Athelas and Zip on Mission, Strategy, and Metrics

A. Athelas

Athelas is performance-driven. Tanay views winning as best path to achieving their mission

• Athelas’ Mission is to “Empower Doctors to do their Jobs Better”. It was first written 4 years ago (<$20M ARR)
• While the mission is important to Athelas, the mission is not the driver of execution and day-to-day work
• Rather, the culture at Athelas is to win - and in the long-term it will help them achieve the mission above

Tanay on Athelas’ Culture

“We are not one of those companies where there is one mission statement, and everything drives from it. Really our mission and our culture is to win. We just want to win. And everything we do in terms of the input metrics we track, the output metrics that we track, there's a performance driven culture that's driven around it.”

How Tanay Run’s the Company

• Start each year with an annual plan -> broken down into quarterly OKRs -> broken down into weekly goals
• While OKRs are set at a quarterly level, the entire company operates off the cadence of weekly targets/goals
• The expectation at Athelas is that teams will sprint to get meaningful things accomplished each week
• The weekly operating cadence is driven by two meetings: 1) Sunday Weekly Planning and 2) Friday Checkouts

The Sunday Meeting

• 6 hour meeting on Sunday. Goal is to review last week’s performance and align on execution/tasks for next week

Meeting Structure
4:30pm - 6:00pm. Hersh (CBO) and Tanay (CEO) spend 1.5 hours on GTM and Account Operations. Review quota attainment, customer sentiment, retention, and do one or two key spot checks of teams and/or active deals. [See the section on spot checks for more details on what this is]

6:00pm - 8:00pm. GTM leaders from one of their mid-market teams presents. They discuss what was accomplished last week, status of key inputs (pipeline, attainment, status of key deals), and key needs from the product. They will also spot check a few deals. Relevant engineering leaders also attend these meetings. This helps maintain the connection between GTM/Product and forces teams to align on what to prioritize to build.

8:00 pm - 10:00 pm. GTM leaders from the enterprise segment present. Deals can be as large as $40M/year, so they warrant their own attention. This meeting follows a similar structure to the mid-market segment, but is focused on fewer deals and customers. 

Friday Checkout Meetings

• Each pod presents to Hersh (CBO) with the same format each week their progress against quarterly goals
• Teams report: 1) what they accomplished, 2) what are the key bottlenecks, and 3) what the big outstanding risks
• Hersh spends most of his time on “risks” to figure out how they can unblock or unlock these for the business
• This ensures 1) accountability and 2) alignment. Everyone knows metrics will be evaluated/discussed on Friday

Driving alignment between Sales and Engineering/Product

• A key principle at Athelas is that “Everybody works for sales.” In practice, this means engineering and product teams build in service of customers and sales is the best avenue to understand what customers want and need. 
• They tie this to the weekly cadence by running combined engineering/product and GTM meetings. This enables a tight loop between the sellers and the engineers and forces prioritization to drive sales, retention, and upsells.
• Athelas also maintains separate resources for big bets each quarter that require longer investment horizons

Tanay on Sales and Engineering

“Everybody works for sales. This is not a company where engineering gets to go off and be in a corner and build what they want. We’re not going to emerge from the depths of a cave with some life changing innovation. We know what our customers want. It's usually a pretty simple, straightforward thing. We're going to build those things every single week, and then we're going to hold engineering accountable to those things, and then we're going to have a couple big bets every quarter around areas that we want to push the product in terms of key capabilities and things that just weren't possible in the product or healthcare technology more broadly in the quarter before.”

Principles matter. Principles enable you to scale your decision making and working style

• Missions are not achieved in 1 or 2 or 3 year period. Winning enables you to achieve a mission. In Tanay’s view, employees that are too mission driven can be bad employees. In his experience, they fall in love with today’s version of the company versus being nimble and practical enough to do the things that need to be done to win.
• In his view, this means figuring out 1) how to make customers happy, 2) why customers churn/retain, 3 how to grow sales, and 4) how to make it repeatable. If you do these things, you will achieve your mission. 
• More important than the mission itself—operating principles drive actions at Athelas. Operating principles are simple frameworks that clarify decision making and behaviors at your company.
• Tanay adopted this concept from Amazon after a conversation with Mike Clayville (former CRO at Stripe and key sales leader at AWS) about the launch of AWS. Clayville emphasized, “Amazon was defined by its business principles, which were applied to various business opportunities. These operating principles drove everything they did and were almost more important than any singular mission.”

Athelas’ Operating Principles 

• Speed above all else—Do things fast. Do them well. Do them with intensity
• High output matters—You are benchmarked on output. If nothing is produced, doesn’t matter how hard you work
• Day doesn’t end until the customer is happy—Athelas operates in service of customers. The idea that the day ends when you go home, doesn’t work in a startup. People take this literally. If you walk into the Athelas office, you’ll see people working until a customer outcome is driven. 

Create systems to spot check or inspect the work. This enables quality and speed at scale 

• The minute people know the CEO is watching, they work more intensely and take their work more seriously
• Tanay has created systems to ensure he is able to monitor (or at least appear to monitor) output on the team
• They’ve found very large productivity gains just by introducing these types of systems across the business

Tanay on creating systems for inspection

“The minute people know that you're looking at something, they tend to work more intensely. And more importantly, they take their work seriously. So if you create systems in your business that make it seem like even the CEO is watching more places, or ideally, make it so the CEO actually is watching more places, that's a huge win. That alone will independently boost productivity in your organization in a way that is shocking. And it's not like people can't be allowed to self govern. It's just that when the CEO is watching, there's more intensity. It's just a law of physics.”

How Athelas uses metrics and operating principles to drive urgency?

1. Engineering Productivity

• As a company scales, engineering naturally slows down and it becomes challenging to monitor engineering productivity. Tanay started feeling this as soon as “he no longer had relationships with every person on the team.”
• Tanay established processes and engagement models to stay closely connected with EPD, the workhorse of Athelas.

Normalize direct engagement even at scale

• Tanay normalizes engaging directly with engineering individual contributors (ICs). He is clear with his team that he will have direct relationships with ICs. If a leader is trying to enforce this structure or prep people, it's a red flag.

Monitor engineering productivity metrics

• The best people are prolific—they excel and produce a significant amount of work in areas they are good at
• To measure this, they created a dashboard that shows the d7 and d30 trailing metrics of code commits
• The dashboard also summarizes each IC's contributions and estimates a number of working days
• This summary is sent to managers, which forces managers to justify any seemingly low output performers

How do they use the Dashboard?

• It helps leaders spot trends. If you see a team or an engineer not shipping much for a few weeks, it is a signal to inspect what is going on. There could be good reasons, but at least you have visibility into where to double click
• Tanay uses it as a system of accountability with pod leaders. Instead of fact finding, he can troubleshoot more directly because he can approach leaders and say “I noticed x, what is going on?”
• Tanay tracks critical teams and projects to ensure they are hitting product goals and milestones

Tanay on using the engineering productivity dashboard

“If a pod leader is consistently not delivering, you go up to them and say I don't understand why there's not much code being committed. Help me understand where things are broken. And instead of the conversation being like, "Oh, this is a really hard feature for us to ship, where it needs a lot of thinking, it turns into a much more concrete show me what's happening kind of conversation.”

2. Revenue and GTM Predictability

• At $20M-$30M ARR, Tanay often set unreasonable goals that they would sometimes miss to push the team to move fast. At their current scale (>$200M Run-Rate), Athelas is now able to predict whether they will hit their targets one month into the quarter. The transition towards predictability is natural as a company gets larger
• To achieve this, Tanay invested in 1) sales data hygiene, 2) measurement / spot checking, and 3) team

Stricter hygiene in CRM data entry

• In general, account executives are not good at maintaining deal information in their CRM. This means it's very difficult to get accurate measurements and insights from your sales data. Hersh, Athelas’ CBO, forced team accountability by telling reps he would not look at a deal if it was not logged in the CRM correctly. This enabled Athelas to better measure the truth health of the sales organization
• Tanay and team also came up with a framework to more accurately probability-weight pipeline. Revenue is segmented by the team into 3 categories: commit, probable, and best. Commit has a 90% chance of closing, probably has a 30% chance of closing, and best has a 10% chance of closing.
• Combined, this lets   

With better hygiene, Athelas invested in granular measurement and created inspection systems  

• Athelas tracks Sales input metrics by representative and at a company level
• These metrics are reviewed every Sunday by Tanay and Hersh during the first 1.5 hours of the Sunday meeting
• Tanay and Hersh will spot check a few representatives to understand 1) are they doing the work, 2) is the data measured correctly (e.g, is a commit deal actually a commit deal?), and 3) are reps generating enough pipeline.
• Over the course of a couple months, they are able to make it through the entire 100 person sales team.

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Tanay on inspecting select deals

“We'll pick a deal. We will go super deep. We'll look at the calls. We'll evaluate is this actually a best case deal or is this a commit or probable deal? Is there buying intent in the video calls? We will pull in the emails and just confirm that the degree to which the deal has been assessed is accurate. The other thing you're doing during that time is you're assessing the reps level of product knowledge and their sales skills. You obviously can't spend 30 minutes on every single rep in your business when you have 10s to hundreds of reps. But what you can do is you can spot check. You can pick three or four people each week, go super deep, and then get a very good sense of what's working in your business and what's not from a go to market motion.”

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Athelas optimizes for hiring sales people that “don’t miss”

• In hiring his team, Tanay noticed that you need to optimize for hiring sales leaders/reps that don’t miss
• There is a class of sales people that rarely miss and if they do they take extreme ownership for what happened
• I missed in “Q2 2023 for x,y and z reasons and here is why I won’t do it again” – test for this type of execution

3. Dissecting the “Claim” to better understand customer outcomes

• The claim is the key unit of measurement for Athelas. When a hospital bills a patient, a claim is created. From claim creation to claim payout, there is a measurable funnel. By measuring each step of the funnel at a customer level, Athelas is able to quickly understand what is driving customer sentiment or respond to customer issues. It also helps Athelas identify areas for improvement to make the claim experience better

b. Zip

Zip’s Planning and OKR Process

• Zip’s mission is to “help customers purchase faster, at lower risk, and at the better possible value”
• When they were 20-30 people, Zip had monthly OKRs and daily goals. Each day, the team would update their goals in a spreadsheet. This broke as they began to scale and Zip shifted to a quarterly OKR cadence
• Today, Zip starts each year with a financial plan tied to four outcomes. This is broken down into quarterly OKRs
• The result is five documents: 1. The financial/strategic plan and 2–5. Individual documents for each objective
• In the document for each objective, Zip lists DRIs and goals/initiatives required to achieve in the objective

Example: Zip’s 4 Objectives and Key Initiatives

FY’25 Objectives‍

1. Unlock Enterprise
2. Dominate Commercial
3. Build insanely great product and drive upsell
4. Mint the Brand

Unlock Enterprise Initiatives

1. Scale Key Enterprise (<10K FTE)
2. Plant the seeds in Enterprise (>10K FTE)
3. Enterprise Product Investments
4. Enterprise Marketing Investments

Each of the the Unlock Enterprise initiatives have target metrics for the year and quarter

In the early scaling phase, do not set objectives by committee

• Do not set objectives by committee. Rujul and Lu set outcomes and partner with 1-2 key people to draft
• In Rujul’s experience, bottoms up exercises don’t result in what you want. Keep the circle small and high trust
• These documents are updated each quarter as the situation changes on the ground or with new learnings

Rujul on top down objective setting

"Lu and I (co-founders) set the outcomes for the company, and then we will  work with a small set of people like the leader of our enterprise business, and then the engineering product leader that's mapped to the enterprise segment. The four of us will basically write this stuff out and then you bring people along with you. But I have just found that if you try to do too much of a bottoms up exercise, it's just not going to end up the way you want it.”

Communicate progress against your plan in multiple forums to drive alignment

• Every quarter, he sends out a short note to the company and gives a lie update during all hands
• They also do a monthly business review with the entire company where they go through every business metric
• During this meeting, they always mention the four outcomes and in the same order to ensure prioritization
• 80% of the company attends this meeting and it has successfully driven visibility and alignment

Rujul on driving alignment with a company wide business review

“We do a monthly business review with the company. We walk through all the financial metrics, everything from how much cash we have in the bank to all of the revenue and pipeline metrics. 80%+ of the company comes to those every month. It’s only 30 minutes because it is an expensive meeting. It has actually helped create more visibility for the business. And we try to always talk about the four outcomes in the same order, because it's prioritized.”

How Rujul Run’s the Company

• Rujul uses three meetings to run the company: 1) a biweekly OKR review, 2) a weekly leadership meeting, and 3) a weekly cofounder meeting.

Biweekly OKR Meeting

• 8am on Mondays with 20-25 leaders at the company. Meeting is happens every 14 days
• Serves as an accountability mechanism as leads have to report on goals in front of the company leadership
• In this meeting, they review pacing against key topline metrics and each of the objectives and sub-initiatives
• Rujul optimizes for more detail rather than less - he’s found its better for alignment and enabling inspection

Zip’s Biweekly meeting

Topline Review

• They track pacing versus the quarterly goal and changes versus prior 2 week period for each major segment:
  • Enterprise Net ARR 
  • Commercial Net ARR
  • New Markets Net ARR
  • Payments Net ARR

Objective and initiative Review

• They review each objective and sub initiative in each meeting
• For each sub initiative, they include progress to date, DRI, and next steps
• They plan to add “what you shipped” to the tracker to force teams to be more concrete about 14 day output

Management Meeting

• Runs a separate management team meeting with just 6 people. One hour on Mondays each week
• Rujul sets the agenda. The goal is to discuss strategic topics. These are topics rarely discussed elsewhere
• Example topic: We have customers that pay $1M/year and $20k/year and we haven’t looked at the PL by customer cohort. Is it worth it to continue to serve $20K/year customers? This forced a discussion amongst executives that only Rujul is thinking about.

Cofounder Meeting

• Lu and Rujul work on Sunday and have a cofounder alignment meeting

How Rujul chooses where in the organization to inspect 

• You need to be selective with where you go into additional detail. This is not only true within meetings like the Biweekly OKR review, but also with where you spend your time. Rujul puts leaders into three buckets: 1) People you trust, 2) People that are new, and 3) People that are struggling
• He spends most of his time inspecting leaders in bucket 2 and 3. This includes everything from joining their OKR and team meetings to inspecting their progress in the scheduled alignment meetings
• With leaders in bucket 1, he dives deep based on problems. When he notices something or its surfaced, he will shift his attention and inspection to these areas of the business

Rujul on choosing where to inspect

“There are people on the team that I trust because I've worked with them for three years. I know they go into the details. And then there's people who are new and so haven't maybe earned that trust and then there's the third bucket, right? I manage each differently. The people in the second or the third bucket – I’m in their OKR meetings, or their team meetings quite often. The first one you can kind of take your hand off the wheel a little bit. I know that if there's a problem, I will find out. Doesn't mean you don't go deeper but you go deeper based on the problem.”

How Zip uses metrics and systems to drive urgency and performance

• Zip is a outbound driven business and a lot of Rujul’s attention is focused on sales efficiency and capacity
• He is always evaluating 1) if reps are performing efficiently 2) if he can hire more to increase capacity
• Zip tracks number of calls, number of emails, number of connects, conversions at a BDR and AE level
• The sales leadership team reviews these metrics on a weekly basis to identify improvements or changes
• This is useful because they can see which team members are performing best and on which channels
• They use this to inform sales coaching (e.g., BDRs that have great email metrics, coach other BDRs on email)
• They are also starting to share these metrics publicly and to call out low performers to drive accountability

Rujul on elevating metrics to drive accountability

“One change I actually made in the past week is we are now publicly sharing these [AE pipe gen metrics] in our entire company channel to drive more visibility and we're also publicly calling out the bottom performers.”

Sales Enablement is critical to scaling any GTM Organization

• Sales enablement is often underinvested in by early teams. Without good sales enablement, new sales hires won’t ramp. This is a disaster because it means you’ll spend more money, but won’t get the return on investment
• This was one of the key reasons Rujul fired his CRO – he did not invest in enablement before scaling the team
• Rujul implemented a new enablement process and it has massively improved conversion and performance

Example: Zip’s Sales Enablement Process

• Try to be very specific and outline what new sales people are doing at your company
• At Zip, tasks are scheduled by the hour for new sales team members during the first 6 weeks
• This includes shadowing other people at the company, listening to Gong calls, learning about the product
• Each week, ramping AEs and Rujul spend 30 minutes reviewing calendars, what they did, what they learned
• Rujul will do this with managers as well and will ask them to explain the performance of the ramping AEs
• After 30 days, they do a certification with Rujul. If they fail, they have one more shot at the test or they are fired

Rujul on the importance of sales enablement

“We have their programming managed every hour of the working day for six weeks. They have to do very specific things. They have to take specific lessons. There's a whole curriculum set up where they watch a specific series of Gone calls in a specific quarter and answer questions about the Gong calls. To make it even more aggressive, every week, there's a 30 minute meeting with all the new AEs that are on a ramp where we pull up their Google Calendars to see if they attended enough meetings. So we publicly look at what they were doing. They share what they learn. We just go through that person by person I'll just ask [questions]. Then we do the same meeting, but with their managers to make sure the managers feel accountability, and they have to explain that person's performance last week. The other thing we implemented is, after 30 days, they do a certification with me. If they fail, they have one more shot, and then we fire them if they fail the second time. Everybody knows that’s the expectation. That has helped massively."

Learning from Zip’s first Sales leadership hire

• Do not get enamored with storied backgrounds. You need a leader that is willing to get into the details
• His first instinct was always to implement new or better sales processes versus identifying the core issue
• This was because he didn’t deeply understand the product, so he couldn’t actually identify what to fix/address
• Rujul thought he was going to quit when teams weren’t performing, but he never did. Rujul had to fire him
• Rujul’s lesson is to tell people who you think and if that causes them to quit, so be it. Its likely better for the team

C. Questions

How do you get people bought into a change of strategy?

• Athelas launched as a medical device company. Initially, the plan was to scale the device business to build the company. A few years in, Tanay realized that they could continue with the device alone or leverage their ML talent to build products for healthcare. This sparked the idea for Revenue Cycle Management (RCM) and other workflow products for healthcare companies. These started as add-on products, but now represent >90% of the Revenue
• Tanay approached the shift in strategy gradually versus making a declaration to the company. His view is this lets the company naturally build buy-in as you can point to metrics and performance versus making a sudden change with intuition

How did this work?

• Initially, it started as a bet where they allocated a small amount of resources
• They slowly began to allocate more resources to the new initiatives as metrics began progressing
• Eventually, the majority of leadership’s attention and company resources shifted to these new products
• Employees pushed back, but it's your right as the founder to make these types of decisions

How did you deal with pushback?

• When employees pushed back, they would say “the device business will continue to be a big part of the business, but we are making a bigger and more important bet right now.” You can’t assuage all concerns. Some people will leave if they disagree, but this worked well overall.

Tanay on shifting strategy

“Your company is a dictatorship, whether you like it or not. If you don't run it like a dictatorship, you will lose. There were definitely people that fell in love with the initial mission of the device. We weren't in the business to make those people happy. We're in the business to have a real massive impact. So we didn't negotiate. When people had those complaints, we heard them, we told them [the device] will continue to be a big part of the business, but we're making a larger bet."

How do you get senior execs to be close to the ground?

Set expectations that they need to do the job of the individual contributor (IC) when they start

• Set clear expectations that they need to do the job of the individual contributor initially
• At Zip, they will not hire leaders will not do the IC job initially (i.e., they have to be exceptional ICs).
• Rujul recently hired a Post Sales leader and Rujul forced him to do implementations when he started
• This leader has done well at the company and still implements 1x customer each quarter
• You can’t manage the work unless you deeply understand it. This requires leaders to be exceptional ICs.

Attend meetings with the leader and their ICs

• Attend a meeting with a leader and their ICs
• It will be clear if they actually know what is going on or if their reports think they are an idiot
• If it's clear they aren’t in the details, Rujul will ignore the leader and ask to hear directly from the ICs

Do skip-level roundtables

• Do skip-level roundtables where groups rotate in. This helps you understand the sentiment of that team
• If the leader has heartburn over this or tries, it's a red flag and signals they have something to hide 

How do you deal with edge cases that don’t fit the core objectives in your OKR docs?

• It’s your company. Do what you want. Don’t get bogged down by process and formality
• If you think support is critical, add another objective and call it “Customer Support Outcomes”
• Announce it to the organization and explain why it is important enough to warrant adding