Toast CRO Jonathan Vassil: Scaling with Purpose During the Pandemic

Summary

How do you grow a business even in times of scarcity? When the economic situation gets tough, tough companies need to focus on their customers’ needs to find opportunities for growth. By leveraging success stories, optimizing sales teams through coaching, and staying agile and adaptable, companies can ride out or even thrive in tough times.

Apple | Spotify 

Key Takeaways and Calls to Action

In this episode, Mark, sits down with Jonathan Vassil, CRO at Toast, a cloud-based restaurant management software company specializing in point-of-sale systems. The company has seen tremendous success, especially through the turbulent times of the COVID-19 pandemic. Through their conversation, Jonathan shares his experiences with Toast and helping to grow that company to a value of over $10 billion. They discuss the crucial role of leadership in rapid growth, the value of building a culture of coaching, and the importance of consistent input in scaling a business.

Jonathan has extensive experience in marketplace development, operations, and SMB sales., Prior to holding this position, he was VP of Sales for food-ordering company OrderUp before its acquisition by Groupon. He then served as VP of Sales and Operations and GM of Supply for Groupon. Jonathan also shares his knowledge as a growth advisor at startup accelerator Tidemark and a lecturer at the University of Virginia Darden School of Business.

The Pandemic Pivot: A Masterclass in Agility

One of the most remarkable aspects of Toast's journey is how they navigated the unprecedented challenges brought on by the pandemic. As we all know, the restaurant industry was one of the hardest hit, with dining rooms being forced to close and foot traffic dwindling to nothing. Jonathan shared that Toast’s immediate response was to pivot their strategy to help restaurants adopt digital tools to generate revenue. This quick shift not only saved many restaurants but also led to a significant increase in product adoption for Toast.

Actionable Takeaway #1: Be Ready to Pivot

Assess and Adapt: Companies should continually assess their environment and be willing to pivot their strategies based on new information. During the pandemic, Toast quickly adapted by focusing on digital solutions for restaurants, which proved essential for their survival.

Enhance Digital Capabilities: Enhancing your company's digital capabilities, whether through online ordering, delivery integrations, or digital loyalty programs, can make it resilient against unforeseen challenges.

Mission-Driven Impact

An intriguing element of Toast's story is its commitment to becoming a mission-oriented company during the pandemic. They provided tools to restaurants without charging and even credited their software fees to help them survive. This move wasn't just altruistic; it led to heightened customer loyalty and drove long-term growth.

Actionable Takeaway #2: Embrace a Mission-Oriented Approach

Support Your Customers: In tough times, prioritizing the needs of your customers can build lasting loyalty and stronger relationships.

Long-Term Vision: While short-term sacrifices might seem costly, they can lead to substantial long-term gains, as demonstrated by Toast's approach during the pandemic.

Sales Strategy: The Importance of Field Reps and Social Proof 

When Jonathan joined Toast, he recognized a crucial aspect of their sales strategy: the importance of keeping sales reps in the field. While many companies have shifted to inside sales, Toast found that field reps provided valuable social proof and built robust relationships, particularly in territories that were harder to penetrate.

Actionable Takeaway #3: Optimize Your Sales Force

Balance Between Field and Inside Sales: Based on your market, determine the right balance between field and inside sales. Field reps can be more effective in relationship-driven territories, while inside sales might work better in areas where network building is more challenging.

Leverage Social Proof: Utilize the success stories and experiences of current customers to sell to new ones. Seeing peers succeed with your product can be a powerful motivator for potential clients.

Hiring for Success: Focusing on the Right Attributes

One of the most compelling parts of the podcast was Jonathan’s insight into Toast's hiring process. Instead of focusing solely on experience, Toast began hiring based on "DNA" traits—work ethic, coachability, and the ability to connect the dots. This shift in hiring philosophy played a significant role in Toast's scaling success.

Actionable Takeaway #4: Revamp Your Hiring Practices

Focus on Attributes Over Experience: Identify the key attributes that lead to success in your organization and hire based on these traits rather than just years of experience.

Use Practical Assessments: Implement practical assessments in your hiring process to evaluate the work ethic and coachability of candidates. For instance, evaluate how candidates pitch your product and improve based on feedback.

The Coaching Culture: Driving Performance

A coaching culture is at the heart of Toast’s sales strategy. According to both Jonathan and Mark, a significant portion of sales coaching should focus on middle performers who have the highest potential for improvement.

Actionable Takeaway #5: Foster a Coaching Culture

Optimal Coaching Allocation: To maximize overall team performance, allocate 20% of coaching time to top performers, 20% to bottom performers, and 60% to middle performers.

Implement Performance Management Systems: Develop and enforce clear performance management systems to hold sales reps accountable, including verbal and written warnings for missing quotas.

Linking Manager Compensation to Team Performance

Toast has also successfully linked a portion of its managers' compensation to team performance, a practice that ensures managers are incentivized to elevate their entire team.

Actionable Takeaway #6: Align Manager Incentives with Team Goals

Set Performance-Based Compensation: Connect part of your managers' compensation to the performance of their team. For example, managers receive commissions only if 75% or more of their team hits their monthly quota.

Promote from Within: Establish clear career progression models based on objective performance metrics, ensuring that promotions lead to increased base salaries and commission rates.

Reducing Churn and Leveraging Network Effects

A significant driver of Toast’s success was targeting full-service restaurants, which demonstrated lower churn rates compared to other segments. They also capitalized on network effects by selling to restaurants in proximity to each other.

Actionable Takeaway #7: Target and Network Strategically

Focus on Low-Churn Segments: Identify and target market segments with lower churn rates to maximize customer retention and growth.

Leverage Proximity: Use network effects to your advantage by focusing on selling to businesses near existing customers, enhancing social proof and ease of deployment.

~~~~~

Note: The insights shared in this podcast were initially distilled through advanced AI summarization technologies, with subsequent refinements made by the writer and our editorial team to ensure clarity and engagement.

About "The Science of Scaling" Podcast

Every week during a season, host Mark Roberge—co-founder and Managing Director at Stage 2 Capital and a senior lecturer at the Harvard Business School—interviews some of the tech industries most successful and renown leaders and managers in the areas of sales growth and Go-to-Market strategy. This is a HubSpot for Startups original podcast, and part of HubSpot's Podcast network. It's available on Apple, Spotify, and anywhere you get podcasts.