Some of the most fun experiences I’ve had were all about growing a company rapidly from a base of just a few million in revenue. When I was running Sales at StarWind Software or at InsightSquared, it was all about building a fairly tight but world-class sales team. It was an intimate experience – not a huge team but huge when it came to teamwork and effective execution. It was also lots of hands-on coaching and also hands-on executing (not just managing) on sales and revenue growth in this range. This is the stage when a coach is a hybrid player-coach and especially when it comes to the last stretch of helping your sales reps close deals (especially when you need to help get some of the more strategic deals to the finish line smoothly).
Based on my own experiences primarily on the Revenue side but also as a member of the executive leadership team, here are a few simplified things that a company should be paying attention to when going from $1M to $10M:
- The 1st Lever: your #1 lever for growing your Pipeline is Lead Generation (i.e. verbatim what Jason Lemkin wrote in “From Impossible to Inevitable“)
- you must seek out the absolute smartest folks in Demand Gen who know how to scale your lead flow 3x annually
- and note that Lead Generation should not be confused with Content Marketing so focus on hiring the RIGHT people in the seats
- Inbound SDRs: to scale from $1M to $10M, you will need to build an effective “Inbound SDR” team to increase MQLs:Opps to drive the Pipeline
- this requires an experience Sales Leader who is an expert coach at prospecting and building a great SDR process and playbook
- Sales Playbook: Focus on developing a couple of sales motions and plays that will work really well and then just scale those few things efficiently and effectively
- you need a Sales Leader who can develop a Repeatable, Predictable system and craft a Sales Playbook to coach reps regularly
- many companies in this stage drop the ball on developing this playbook which usually equates to huge losses in efficiency and results (and they don’t even realize that but I’ve seen it multiple times and doing this right is a tremendous ROI)
- Add in a New Segment – Strategic Deals: hitting above the $5M number will be a function of introducing a systematized larger mid-market to enterprise size segment and one to a few AEs in sales
- you will need to win some good Enterprise ($100k – $1MM) deals
- your VP of Sales will need to know how to effectively hire, train and specialize those AEs for this segment
- Outbound Process: Hunting these larger mid-market+ or Enterprise deals (i.e. elephants) requires a targeted and proactive Outbound team and process
- Outbound is tacitly more complex than Inbound SDR process and system
- the Win Rates on Outbound-source deals are 1/2 of Inbound-sourced and the sales cycle is usually 2x+ on this segment
- you really need a Sales Leader who has the experience in systematizing this process with high efficiency or your CAC will go through the roof instantaneously before you can even close your first few deals
- another key to this that many don’t realize is that Outbound should only be focused on larger accounts and have a system for targeted lists that are very focused on those larger accounts with a sales process and methodology that is adjusted and customized to this segment
- Effective Sales Process: You will also need to have scale your process for “hunting deer” or mid-market deals ($10k – $100k)
- a bigger team will require more coaching and development and thus more front-line sales managers
- the FLMs which should be coached really effectively by the VP of Sales
- there will be a different and more scaled Pipeline Management process, Forecasting, 1-on-1 coaching process, film reviews, training/development system, etc.
- if you can have the right Sales Leader / VP of Sales a whole 12 months (4 quarters that pass quickly) before you need to hit $5M then that is the ideal time to hire someone early to get you smoothly to pass to the $5M and onto the $10M zone
- also, lots of companies are very “ad hoc” and sell without thoughtfully engineering an effective Sales Process
- this is one of the most “invisible” yet costly self-inflicted mistakes which only become visible a little too late and when sales end up hitting a snag and flattening out (and unfortunately, this happens far more often than we hear about because this is not covered in the news. And this problems hits all kinds of great and rapidly-growing companies in the head like a brick when the team only sees current growth and therefore doesn’t realize to prepare in advance and strategically plan ahead for how to scale later as they get to $5M+ and then $10M. Such planning always needs to happen 4 quarters before the $5M ARR goal
- Also, by the time you get closer and closer to $5M, you will need to segment your sales team and specialize (by customer type or by segments – this is very nuances and contextual so a Sales Leader who really “gets it” and knows how to do this well will be the one who can execute this without a glitch and any org problems)
- Ultimately a lot of the sales will come down to 5Ps – People (i.e. do we have enough and are they the right fit for the job), Plan, Process (repeatable and consistent sales process), Pipeline (do we have enough Opps) and Performance (Execution!)
- Sales Engine Check-Up & Tune-Up: at $5M the Sales Leader must do a check-up and a tune-up – a basic version of this Sales Audit/Assessment will get you enough to ruminate on what improvements you need to implement to get you smoothly to $10M where you will do another check-up and tune-up
Also:
- Customer Success – CS & Account Management will need to be a strong team with the systematized process to be equipped to grow your Upsells & Cross-Sells effectively
- Company Managers – recruit senior managers who can “own” and know how to scale to $20M (so they will surely get you to $10M)
- Company Recruiting – focus more time on recruiting and ensure everyone is A-level
- at this smaller stage, you can still hire A-level talent across the board (which is harder when you have a larger company)
- Pricing – raise your prices especially for larger accounts that want more value-add options in the product
I think this covers 80% of the key issues that I’ve seen in this growth phase. What else? What are some additional ideas and thoughts on what to pay attention on the path from $1M to $10M?