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September 2, 2022
4 min read
Welcome back to The Weekly Pitch. Our mission is to cover news, offer insights, and profile rising stars in the sales community.
Today, our Feature Story breaks news at Okta, an identity and access management software company. Many of us best know them as that necessary added step to securely log in to our work stuff. Their CEO admitted it's got a sales problem. We'll share why.
In the Weekly Chart, Okta's market cap evaporated by almost 40% in less than 24 hours.
Finally, in The Closer, ICYMI, we offer a few links to everyone's latest hot take – “Quiet Quitting.”
Okta's stock price hovered around $94 before the company's earnings call on Wednesday. It beat revenue and EPS estimates and even hiked its annual outlook.
So what happened? Okta's CEO referred to some crucial mishaps happening inside the sales org.
This pandemic high-flyer continues to grow at a 40%+ clip year-over-year. But perhaps as evidence that the “growth at all costs” era is over, investors are now scrutinizing factors like free cash flow and asking, “what's the path to profitability?” Or, in Okta's case, some eyebrow-raising comments from the top exec.
CEO Todd McKinnon said in an interview with Barron’s that it was “kind of a mixed quarter” for the company, with strong growth in deals worth $1 million or more. But he also said Okta is having some issues with the integration of Auth0, particularly in blending their sales team with the core Okta sales staff.
“This integration has proven harder than we thought,” he said. McKinnon noted that while the deal closed 18 months ago, the sales teams were integrated more recently, at the beginning of 2022. “The biggest issue was that it wasn’t clear enough how the Okta sales people should sell Auth0,” he said.
A second problem, he said, is that there has been higher-than-expected attrition in the Okta sales team, so there have been a large number of new hires who need to be educated about the company’s products.
What are reps saying? On RepVue, a crowdsourced sales org ratings platform, Okta reps score it a 91. Auth0 reps rate it a 95. Reps report 60% hit quota, compared to average of 48% in the SaaS industry.
Glassdoor offers a different perspective where all employees give the company a score of 3.8, but the sales org grades it even lower. Reviews touch on the high turnover and the lack of adequate product knowledge needed to succeed in a sales role.
Steve Rowland, the company's relatively new Chief Revenue Officer, joined in March of 2021, right before the Auth0 acquisition became official. He's almost certainly prioritizing retention, onboarding for new reps, sales enablement, and product training for all sellers.
There are quite a few examples to turn to where merging sales teams are winning, e.g. Twilio's acquisition of Segment or most Salesforce acquisitions. Some lessons gleaned from these successes:
"Quiet Quitting" is still trending on most platforms and outlets. Fearful leaders misinterpret this as workers being lazy and doing the bare minimum.
Employees say this is about work-life boundaries and standing against the “hustle culture” and the 24/7 always-on work environment.
What do you think? Drop us a note and we might give you a shoutout in a future issue.
Here's what others are saying:
The original "Quiet Quitting" TikTok.
Forbes: Where do you stand?
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