From Impossible to Inevitable: How SaaS and Other Hyper-Growth Companies Create Predictable Revenue

Metadata

• Title: From Impossible to Inevitable: How SaaS and Other Hyper-Growth Companies Create Predictable Revenue
• Author: Aaron Ross and Jason Lemkin
• Book URL: https://amazon.com/dp/B07SC4RS1Q?tag=malvaonlin-20
• Open in Kindle: kindle://book/?action=open&asin=B07SC4RS1Q
• Last Updated on: Tuesday, August 5, 2025

Highlights & Notes

And you know that lead generation is the #1 lever that drives revenue growth and can create hypergrowth. You’ve been trying to grow your leads, and thus sales, but it’s been harder than you expected … maybe a lot harder.

Struggles often mean there’s a niche problem, either at the company, marketing department, or salesperson level.

Clues You Aren’t Ready to Grow (Regardless of What the CEO or Board Expects) You’ve grown mostly through referrals, word of mouth, and up-/cross-selling. Inbound or outbound lead generation has been disappointing … or abysmal. You realize, looking back, that you’re dependent on preexisting relationships or a recognized brand to get in the door, even if your product or service is amazing. You’re good at too many things, and struggle focusing on the one best opportunity to sell and deliver over and over again. Even when you get quality appointments, too few people buy.

If you can’t predictably generate leads and opportunities where you’re needed, win them, and do it profitably, you’re gonna struggle.

One of the indicators that you’ve Nailed a Niche is that you’re consistently able to find and sign up unaffiliated customers.

Since you have 10, you can definitely get 20… and then 100. If you can get 10 unaffiliated customers to pay you (no small feat), I guarantee you can get 20. And if you keep going at it, you will get at least to 100. And then 200, at least. At a minimum, you can keep doubling and doubling. I’m not saying it’s easy, but it’s possible.

The same core “goodness” that you’ve built attracts all of them. Of course, you’re going to need to build tons more features, mature your product dramatically, and so forth. But the core will be the same goodness as customers 1–10 experienced.

Trust us. Ten customers may not pay the bills. But if you got them from scratch, you have the start of organic leadflow or of some leadgen process that you can replicate. That’s really special, and something you can actually build on.

Niche here means focused. On a specific target customer with a specific pain. Regardless of how many types of customers you could help, or how many of their problems you could solve.

Hypergrowth doesn’t come from selling many things to many markets, covering all your bases (really, dividing your energies). Hypergrowth comes from focusing on where you have the best chances of winning customers, making them successful, building a reputation of tangible results, and then growing from there.

Where’s the easiest place for you to build momentum now? What’s the path of least resistance to money for you? Focusing on specific industries or types of customers—like banks, software companies, or large businesses—is part, but not all of it. It also means focusing your unique strengths (not all your strengths) where they can create the most value (not any value), and: Solve a specific pain for An ideal target customer in A believable, repeatable way, With predictable methods to (a) find and (b) interest them.

If you focus on solving a single problem really well and can adapt as the market evolves, the sky’s your limit.

There’s a painful difference to evolve from selling to Early Adopters who trust you, to Mainstream Buyers who don’t.

The more connection you have with them right away, the more leeway they’ll give you. The less you have, the faster you lose them. Some sample (nonscientific) windows: A cold email or online ad: A 0.3- to 3-second window before they engage or move on A cold call: A 3- to 30-second window Walking door-to-door: A 3- to 60-second window Compare these to: A referral: 15 minutes–1 hour A best friend or parent: Unlimited (in fact, you may be the one who wants to limit the time!)

The whole point of Nailing a Niche is to help you cross the Trust Gap, moving from depending on buyers on the right side (trust) to being able to better market and sell to buyers on the left side (no trust). You have to either (a) find a way to fit your message into that slice of attention, or (b) expand the amount of attention they’re willing to give you.

Your message has to be simple for them to both understand and easily act on, or else they’ll move on before ever giving it a chance.

This is why short and sweet emails and videos tend to work better than long emails and videos as first touches with new people. People see a long email or video from someone they don’t know, and they just aren’t willing to invest in consuming it.

ARE YOU A NICE-TO-HAVE? Do you believe your intended buyers need what you’re offering? Or are you a nice-to-have? One clear sign that you’re a nice-to-have: Everyone you show your product to says “cool!,” but no one buys.

Consumers don’t buy what they need; they buy what they want. How much do consumers spend on Porsches and ice cream compared to broccoli and psychotherapy? But businesses don’t buy nice-to-haves. For example: Marketers want a beautiful website—but they need a website that converts visitors to outcomes such as leads or purchases. CEOs want happy employees—but they need people to show up and do their jobs, for products to be released on time, or for cash flow to be improved. VPs of Sales want increased sales productivity—but they need and buy what contributes to it, such as leads, accurate reporting tools, and training. Venture capitalists want to invest in honorable founders—but they need to generate above-average returns, which may or may not come from companies with honorable founders.

What problem is painful enough that a team of people will spend both their money and time to fix it? If you are solving a need, how can you describe what you do differently, so prospects also see it that way? What differentiates the customers who need you from the ones who don’t? Where can you create the most financial value? Where can you get permission to create case studies or get references? (With some types of markets or customers these are almost impossible to get.) How can you “sell money”? How can you sell “things”?

“Sell money” means proving to customers that your product will help them make more money, spend less of it, reduce the risk of losing it, or stay compliant (avoiding fines and legal risk). Demonstrate how spending money with you will make them more money.

Make money by proving to customers that your product will help them make more money, spend less of it, reduce the risk of losing it, or stay compliant.

If you say you’ll “increase revenue” or “decrease costs,” you sound just like everyone else. What’s equivalent to money in their mind—leads? Close rates? Social activity? Collections?

Any kind of paid or nonorganic lead generation (like marketing or prospecting) can be a forcing function that makes you confront the reality of whether you’ve nailed a niche or not. If it doesn’t work, you need to rethink your target customer … and possibly your solution.

How do you make it all about them, not all about you?

It’s hard to resist going on and on and on … to buyers about all the wonderful ways you can help them. But if you keep doing that rather than specializing, you’re more likely to confuse buyers than excite them.

It’s hard to think about much else when you’re struggling to pay the bills.

I’d been denying or ignoring the skills that made me the most marketable.

Once I specialized in serving business-to-business companies with at least $1 million in revenue, who needed to grow, who wanted predictable lead generation, but who weren’t doing outbound prospecting yet (see? being specific!), business picked up. My rates went up by 10×, too, when I specialized. I mean, who do you think earns more, a general practice doctor or a neurosurgeon?

Here’s why picking One Thing is better than trying to pick the Best Thing: You can’t predict where your big opportunity or $100 million exit will come from. So pick One Thing and figure out how to win at that. Where can you be a big fish in a small pond? Get momentum winning in that small pond, then expand into the next bigger pond, and so on. If you learn how to win at One Thing, you’ll know how to win at the Next Thing. If your One Thing struggles, then learn and pivot, until you learn how/where to win. Let go of knowing what the answer is ahead of time—just get to the next step. And reevaluate. And repeat.

From: “What’s your problem? We can solve it. Whatever your problems are, we have many capabilities. There’s something we can do for you if we look hard enough.” You end up solving different problems in different ways, making it virtually impossible to scale. To: “Here’s the problem we are the best at solving … with our repeatable solution we have delivered 100 times. Do you have it? No, you don’t have it? Do you know anyone else who might be interested?” We’re not saying you don’t find out about the specific situation and pains of a customer, but there’s a difference between understanding exactly how your solution can help them, and creating a solution from scratch that will help them. It’s the difference between configuration and customization.

Be willing to lose the people who want all colors of pens, because ultimately you’ll sell more pens, at higher prices, to the right people—the ones who value those special orange ones.

WHERE CAN YOU BE A BIG FISH IN A SMALL POND? It’s better to pick a focused market that’s “too small,” but where you can find and win deals, than it is to stick to defining your target market so broadly that you get lost in it. Why is this? It’s easier to make the pond smaller than make the fish bigger: It’s easier to retarget, refocus, and reframe yourself than to change your products and offerings. To grow past word-of-mouth marketing, you have to stand out. It’s easier to stand out and win deals in a smaller pond. When you share too many things that you excel at (too many ponds), it’s more likely to confuse prospects than impress them.

You know that a pain is common when you see that people are willing to pay money to solve it, repeatedly.

Specialize in a specific pain you solve, but don’t get so narrow that you can’t find anyone that has it.

Tangible Results: Where can you show concrete or detailed results? How can you answer the question “What do I get?” For example, if the answer is “Peace of mind or a better night’s sleep,” how do you make that tangible? “Grow leads 217%” or “Shorten month-end closing to 12 hours” are much more concrete offers. If you struggle with hard numbers, you can use visual examples or detailed customer stories and testimonials.

To find or be found, to close deals, to avoid commoditization—you must be different or unique.

Who are the people you aim to help, and who have the most power over buying your stuff?

Proof: To charge based on value, or to market and sell to Mainstream Buyers, your lead generation and sales teams need proof. If you don’t have proof, you can still sell to people, but this will require more relationship-building, or sticking only to Early Adopters. Examples of proof: Free trials Case studies with details Testimonials, especially in video Lists of logos or brand names Stories Demonstrations It’s always better to “show” rather than “tell” (stop talking and prove it).

It’s always better to “show” rather than “tell” (stop talking and prove it).

It’s not the leads here that are important—yet. It’s the learning. The faster you learn how to generate leads, the faster you can get ready to grow. Give yourself 90 days as the learning or beta-test period before counting your growth chickens. Essentially, what you’re doing here is four things: Define a target list, usually of prospects, partners, or marketing outlets. Decide on how you want to reach out, that is, cold emailing, calling, referrals, social, mail, blogging, and so on—and what you’ll say and ask for. Remember to write from the reader’s point of view: What’s in it for them? What’s the minimum required preparation needed before you can start campaigning? Don’t overplan here on creating the ultimate marketing or outbound plan, building a ton of content and then … nothing works. For example, if you’re prospecting, ideally you have a case study or short introductory video you can use. But if you don’t—don’t let that stop you from getting started. It’s more efficient to learn and create any other tools or content along the way. Finally: Stop procrastinating and just send the first campaign. Even if it’s just one phone call, letter, tweet, or email. Send more. Measure results. Adjust. Try again. Act, learn, and adjust. Fire, ready, aim. The more tests you run, the faster you learn. Speed of learning creates speed to growth.

Speed of learning creates speed to growth.

The learnings are more important than the results in this step. If you get 10 sales right away but you don’t know why, you can’t repeat them. If you get two sales, but know how to replicate them, you’re golden and can ramp things up.

Platform startups often struggle to nail niche markets because customers can do so many things with it.

When debriefing salespeople, also ask “Why is the customer doing this?” If they don’t know, or throw out assumptions, make sure they go and ask.

How can you get product feedback before you build it?

It’s impossible to research your way to certain success.

Get your stuff into the hands of customers and watch what happens. And if nothing happens, that’s not a failure if you see it as useful information, too.

If nothing happens, that’s not a failure if you see it as useful information, too.

Get narrower. Get to that one thing people really want from you. To whom or when are you most needed? Remove the clutter to make it easier for the right customers to see why they need you. Easier said than done. If it were easy, everyone would do it.

A sexy, fancy, or grandiose message that doesn’t click with people is useless.

A tight elevator pitch can tell someone quickly whether they are a prospect or not. You’re not trying to engage everyone, just the people to whom you’re relevant. Here are a few tips: Avoid jargon. Keep it simple. Simple is better than accurate. It’s always frustrating: You’ll never be 100% satisfied, so stick to “good enough.”

Notice it’s not about the steps you take to help them—it’s about the results they want and desire. If it’s interesting, they will naturally ask you more questions about how you do it.

People like to buy “things.” Their minds are asking, “What do I get for my investment?” Whether it’s a $10ora$10,000 purchase, they’ll want to know exactly what they get. Spell it out as much as you can as “things,” with concrete details.

Focus on those customers with a burning need you can solve—not on the ones that think you’re “cool” or who should or could need you.

What kind of person/company most needs what you have to offer?

Most people are afraid to get brutally honest feedback about their offering. Don’t hide from the truth that you may not be where you thought you were, and it may take a lot more work and time than you expected or wanted to get it dialed in for growth.

Without predictable ways to fill your pipeline, you’re going to struggle.

What’s Important: There Are Three Types of Leads “Seeds” are many-to-many leads, created from word-of-mouth, networks, and relationships. Usually grown through creating happy customers who refer others, and who remain as customers for years. Salesforce.com, Google, Facebook, and Slack all ignited initial hypergrowth through Seeds. “Nets” are one-to-many marketing campaigns, including the now-popular approaches of content and inbound marketing as well as outbound marketing. “Spears” are targeted outbound prospecting or business development campaigns. Usually a human is involved, working through a targeted list, calling, emailing, or using any other technique that helps them make contact and get appointments.

Too many companies obsess over a single form of lead generation and ignore the others.

Partners aren’t a fourth kind of lead. They are a different type of customer. Whether they are channel partners, resellers, marketing partners, or anything else, you’re acquiring and supporting them as customers—or should be. Partners can be acquired through Seeds (word of mouth/Partner Success), Nets (mass marketing for partners), and Spears (prospecting into a targeted list of ideal partners).

Seeds are many-to-many campaigns; they’re based on word of mouth and relationships. Some companies, like Dropbox, Box, and Slack, have been able to take off by creating products that spread like wildfire through word of mouth. But for most companies, seeds will mostly come through systematizing how you ensure your customers stay happy and get value from your service, and who then generate more referrals and lower attrition rates. All the great work you do to help others succeed, while building relationships and networks, is “planting seeds”—whether they’re with employees, partners, investors, or customers

The best way to methodically grow your seeds is with a repeatable program or with systems that ensure your customers are successful. This field is now commonly called Customer Success Management or just Customer Success. It means systematically reducing customer churn, increasing upsells, increasing referrals, and helping capture more and better case studies and testimonials.

Customer Success is not about increasing customer satisfaction, but creating revenue growth.

By investing in Customer Success, you should see: Lower churn: The easiest revenue comes from keeping the customers you have. More revenue: More referrals to new customers; more willingness to try and buy your other offerings (upselling and cross-selling). Better marketing: You can improve everything in lead generation and sales with detailed case studies (success stories) and testimonials from happy, successful customers.

Remember, a Customer Success person, like a salesperson or a marketing budget, is an investment that should make money (a lot); it’s not a cost to be put off.

Here’s a 5 + 2 rule on this point for every cofounder, the CEO, plus every Customer Success Manager: Must meet on-site with five customers a month (that’s 60 per year). Get two customer badges every year as a bonus (that is, you visit so often they give you your own ID badge).

One bad assumption is that “a great product will automatically create happy customers.”

Rule 6: Evolve Customer Success Goals and Metrics as You Grow For example, SaaS companies experience these phases (courtesy of Gainsight): Traction ($0–$1 million): What do customers want, and what do they do with our product? Adoption ($1–$5 million): Why and how should customers include our product in their daily business? Retention ($5–$20 million): Why do customers need to keep on using our product after the honeymoon? Expansion ($20–$100 million): Why should customers expand to more seats, more features? Optimization ($100 million-plus): Automation and improvements driven by data. Your phases may be different. The point: Never assume Customer Success is “done” and won’t need extra investment or executive attention next year.

Gild found out if there’s successful usage of the product in the first 90 days, usage will be three times higher for the rest of the year.

Team Structure The Gild Customer Success (CS) team has about 10 people across three roles (out of 50 employees!): Inside CS reps train, monitor usage, and run analytics; there’s one rep per 70 users. Outside CS reps handle, and are measured on, renewals; there is one rep per 30 users in their relevant customer segment. Executive CS reps are responsible for upselling, and work mostly with large and fast-growing customer segments. The teams have dashboards to help spot earlier both at-risk customers and customers who should buy more product, giving reps a reason to call a customer to talk.

Customer Success owns: 90-day adoption Feeding usage data and customer feedback into the product roadmap Renewals Upsells

Frustrated customer support agents help create frustrated customers.

Customer support typically reacts to fix problems that have happened. On the other hand, Customer Success works best in preventing problems from being created in the first place. They are two sides of the same coin in supporting customers.

Forty hours a week on the phone with frustrated customers can be a recipe for agent burnout.

The support team is the voice of the customer. Some organizations overlook the support team and all their valuable knowledge.

What content is loved by your market and creates measurable results?

Out of a trillion ways to market, inbound marketing (or content marketing) is the most popular kid in school. It works, and it works for every company—unlike, say, outbound prospecting. The idea is creating marketing that customers love or learn from, inspiring them to want more from you, eventually buying your stuff.

If you’re passionate about social media—go for it. If you’re doing it “because you’re supposed to,” don’t be afraid to put it on the back burner.

Pros: Often easy-to-generate high volumes of leads; some kinds of marketing programs are scalable; content published online can generate leads forever; highly measurable. Cons: Even free leads aren’t “free”—there can be high fixed costs for generating leads (mainly time and salaries); low conversion rates, since most leads aren’t a fit; usually works better at reliably generating leads at small/medium businesses than at enterprises—at least for the first few years.

Simply put, Inbound marketing is pull strategies and Outbound marketing is push strategies. With Inbound, customers come to you. With Outbound, you seek out customers. The Inbound funnel is broad, the Outbound funnel is targeted. Inbound builds on existing assets, awareness, and demand. Outbound generates new awareness and demand that Inbound doesn’t reach. Yes, there are gray areas, those of you who love to argue, don’t overanalyze the edges and miss the big picture!

Account-Based Marketing is a popular example today of Outbound marketing. You choose the companies you want to target, and based on the tier (usually determined by deal size), you are building one-to-one, one-to-a-few, or one-to-many outreach strategies. The greater the deal size, the greater the personalization, the longer the cycle, and the smaller the target list.

When you are firing on all cylinders, Inbound and Outbound marketing working side by side, you will see prospects moving seamlessly between the two funnels. A new segment that you first reached out to via digital advertising, will start to follow your content, subscribe, and eventually become a customer through your inbound funnel. On the other hand, if old inbound prospects have gone cold, you can make them active again through outreach and eventually close through the outbound funnel. These are ideal journeys of push and pull working together.

“For the next 10 years, Outbound marketing will be the biggest driver of growth.”—Meena Sandhu

Goodbye Sales versus Marketing, Hello Revenue Team

Every growing business out there wants to grow their customer base and increase revenue, right? So then why is it that sales and marketing, the two key functions driving customer and revenue growth, are constantly in battle with each other? These teams are structured and measured differently, and each end up with slightly competing objectives: like when marketing is measured on new lead volumes, sales on revenue. Build one, unified Revenue department where sales and marketing are functions within one team. Avoid the mistake of marketing working independently from sales.

Weekly pipeline meetings involve both sales and marketing, and everyone understands how each contributor’s efforts are supporting one another

None of these metrics matter on their own and they are not directly connected to the bottom line. Don’t make the mistake of choosing marketing goals that aren’t tied to sales and the business goals overall. What matters to a business is growth in customers, growth in revenue, minimizing churn and increasing LTV, and accomplishing these goals in the most efficient way possible.

Mistake: Overfocusing on Per-Lead Cost, and Ignoring Quality We’ve talked about aligning sales and marketing functions and one way to do that is with goals and metrics that make sense for both. Marketing’s biggest function is providing bottom of the funnel, marketing qualified leads to sales. This is marketing’s direct connection to revenue and customer growth. With a shift in focus from quantity or cost per lead to quality, we are able to leverage conversion rates, linking marketing’s performance closer to sales. By keeping an eye on the conversion rate between each stage of the process you can determine where the bottlenecks are in your company, and then rally your team around strategic objectives to alleviate them. Some examples: What percentage of opportunities booked by Inbound SDRs (responding to inbound leads)and Outbound SDRs (dedicated outbound prospecters)are making it to the meeting stage with an Account Executive? What percentage of marketing qualified leads are converting to customers? What percentage of marketing qualified leads are getting sales qualified?

There are numerous options available for measuring the success of marketing initiatives while also being directly relevant to sales and the bottom line for the business. Unified goals lead to unified teams, which lead to Growth.

First, don’t worry about all the ways you can create inbound leads. Because the #1 place to start with improving marketing is to create a Forcing Function for the leader. Your VP Sales has a quota—why doesn’t your VP of Marketing? Your sales team has a quota—your marketing team and leader have to have one, too—as a Sales Qualified Lead Commit.

Sales Qualified Lead Commit goals “force” marketers to focus on practices that create quality leads instead of efforts that pump up total lead numbers but don’t turn into pipeline.

Marketers: if you believe it’s sales’ job to follow up and qualify your leads… that will never happen consistently. You need an Inbound SDR role that ensures poor leads don’t make it to Sales, and the right leads get Sales Qualified.

Demandgen folks are all about the numbers: Spend X dollars and create Z leads, which should be worth five × X dollars in revenue. Great demandgen marketers can handle the “squishy stuff” (logos, branding, press releases, etc.) well enough until you’re ready to get corporate. Their blue pens may not be as pretty as the ones the corporate marketer gets you, but you’ll get leads.

You want someone who’s shown a passion for areas like inbound/web demand generation programs, lead nurturing, and metrics—but who will also work hand-in-hand with your sales team. And that’s not corporate marketing. Demandgen folks can figure out corporate marketing. Corporate marketing cannot figure out demandgen. Ever.

It was simpler to build a content-based brand 10 years ago, before buyers were hyper-saturated in content.

“Companies today need to be focused on pushing your message as well instead of only waiting for customers to come to you.”—Jon Miller

Common Campaign “Build it and they’ll come” marketing plan: Deciding what content a company want to share (“how great our new release is!”), then How they plan to distribute it (“let’s do a webinar!”), and finally Who should we sent it to (“who do we want to invite?”).

Engagio rearranges those steps into an Account Based Marketing approach integrating Outbound Marketing and Outbound Prospecting: First decide who (which companies or people) we want to speak with, then Map out what they want to hear and learn about, based on our account research, and Figure out how to get that value front of them: online marketing, webinars, cold prospecting, events, direct mail …?

The “magic bullet” in creating this Account-Based Marketing revenue team: shared goals, metrics and target accounts between sales and marketing, then working together toward them, and keeping up regular communication to spot and fix the inevitable problems.

If you’re struggling or don’t have much to rely on, here’s a simpler approach. First, here are some mistaken beliefs in marketing: Build it and they will come (a fairy tale). More is better (not necessarily). Inbound leads are free (an urban myth). It should happen fast (an evil expectation).

When you host live events, especially in person, it’s a visceral experience to see people show up and get value. Or not. You’re forced into clarity, revisiting which niche you’re trying to nail: Who do you want to attend? Why would they come; what will they get out of it? What will you teach or offer, and how will you deliver? What action do you want them to take afterward?

When you host live events, it’s a visceral experience to see people show up and get value. Or not.

Other things to love about events: They create reusable content. They build your audience. They generate leads and revenue. Your team connects with real live humans (oh my!).

Pro Tips First, pick a date for the live event. Announce the date to people you know (before you have all the details, or even a title or location). It’s okay to change it before it happens. No matter what, don’t chicken out! Go through with it, even if no one shows (which can happen). What you learn from this is more important than the results (how many people attended or took your Call to Action). Do it again, and again, and again, and again …

Marketing with partners is the simplest way to expose new people to your brand. It’s hard building an audience from scratch. Working with partners who already have a relevant audience makes pretty much any kind of project more effective.

Marketing with partners is the simplest way to expose new people to your brand.

When salespeople have been trained as prospectors, they develop the mind-set and skills to be entrepreneurial and make things happen instead of waiting around for something to happen for them.

Easier to double: After you’ve figured out the messaging and steps, outbound prospecting is a place where you can double your results by doubling the team.

Increase deal sizes: Your average outbound deal could be 3 to 10 times larger because you can specifically target bigger opportunities and avoid small ones.

Small team, big impact: You don’t have to invest a ton and hire a huge team; even a small number of outbound reps can add another 10% to sales. And even a 10% increase in recurring/SaaS sales per year has a huge impact on your profit and valuation.

You can sell deals that are large enough to be profitable, usually $10,000–$20,000 in lifetime value (bigger is better). Yes, outbound can work with smaller deals, but it’s harder to do it profitably.

Your value proposition is easy for a prospect to understand and say yes or no to. If your proposition or messaging is jargonish or vague (“we can help you grow revenue or reduce expenses”), you’ll struggle. Products tend to be more concrete than services, so tend to be easier to sell. We’re talking on average. The more concrete you can make your offering and value—even in services—the easier for a prospect to “get it,” the better.

You’re selling something they “add in” without having to rip-and-replace a prior system: If you’re trying to call in and compete with DropBox or some financial system, to get a company to rip that out and replace it with your service, it’s hard. You have to have a damn good reason for them to do it—a reason that you’re 10 times better. It’s much easier to look for opportunities where the buyer doesn’t need to replace or trash an entrenched system that works “well enough.” Whether you call this white space, green fields, blue skies, or magenta flowers, look for that kind of market or way to position yourself.

You’re not differentiated, or your different because “we have the best service/most experience.” That won’t fly with outbound—too vague. However you’re differentiated in your own mind, does it resonate with prospects? Probably not. You can’t have 100 competitors selling similar stuff or sounding similar and expect easy outbound success. There’s too much noise (= confusion) and prospects just tune you out. Go back to the Nail a Niche chapter and exercises.

Crowded market: Related to the earlier point, some markets are just extra crowded with thousands of players: hosting, MSPs, VARs, website design, creative/digital agencies, to name a few. Is it harder? Yes. Can outbound work? Yes, if you niche your outbound programs in ways you can differentiate. Compare: “sales training” versus “cold email training” versus “increasing cold email response rates.” (Hint: Don’t outsource outbound in these markets, start with an internal SDR hire.)

Unrealistic expectations: “Hey guys, it’s been 60 days—where are our closed deals?” It takes three to six months to go from scratch to consistent pipeline generation—and longer to see regular revenue, depending on how long your sales cycle is (and outbound cycles will take longer than your inbound cycles). Stick it out! We break down time frames at the end of this chapter, in “Build an Outbound Program Right the First Time.”

It takes three to six months to go from scratch to consistent, quality pipeline generation—and longer for revenue. Stick it out!

Phone calls aren’t obsolete: Don’t let reps succumb to “phone fear.” Pick up the damn phone! Prospectors should be having live conversations every day.

Teams get Sales Specialization wrong. Common: Making an SDR do both inbound lead response and outbound prospecting—they don’t mix! And lumping inbound lead response and outbound prospecting metrics, dashboards, and processes together, muddy the results waters of both.

Prospecting went from generating 0% to 40% of all new business sales pipeline (thus almost doubling their new business growth rate).

What’s Expected of Acquia’s Prospectors? Send 600–800 cold outbound emails a month. Make 350–450 outbound calls a month. Daily: Mix in some social media touches (LinkedIn, Twitter, etc.) and personalized emails to executives. Schedule 20 longer demo/discovery calls between influencers and Acquia salespeople, per month. Tally 15 Sales Accepted Leads (SALs) passed to and accepted by salespeople, per month.

The way the math works out with prospectors, revenue comes faster by finding bigger deals, not by pursuing every single opportunity.

Growing sales at portfolio companies (as opposed to other methods like cost-cutting) is the best way we’ve found to triple value fast.

Potential acquirers will pay a lot more for a faster-growing company than a slower-growing company. So organic sales growth is our #1 focus.

Base Case is for financial planning, Target Plan is the management commit, and the Stretch Plan is our aspirational target.

The number of new initial qualified meetings held, The number of proposals sent, and The number of opportunities won/customers signed. … … as well as measuring and improving every step of the journey between those milestones.

We set aggressive targets for each step in the funnel, and backcast our way to the number of sales activities (# of calls, # of emails, # of social touches, etc.) needed to achieve the new target (ignoring conversion improvements for now).

We set aggressive targets for each step in the funnel, and backcast our way to the number of sales activities.

Let’s say the prior 12 months’ results were: ~120,000 emails sent, 251 qualified meetings held, 153 proposals sent, and 50 opportunities won. We know we need to sign 200 new customers per year ($3,000,000/$60,000). To hit this target, we create quarterly goals to generate ~480,000 emails, 1004 qualified meetings held, and 612 proposals sent. We plan the best ways to grow these activities while also improving conversion, which helps offset diminishing returns we see from higher volume outbound emailing.

When we analyze all the lead sources across our portfolio companies that add new customers, outbound prospecting, and especially cold emailing, has created the most predictable pipeline (it commonly sources ~70% of new deals). But not all cold emails are equal, and the difference between amateur and expert cold emailing is dramatic. We target a 1-in-200 email-sent-to-meeting-booked ratio (yes, it can be much better in small samples, but not at the scale we operate at). We’ve seen an email-sent-to-meeting-booked ratio as poor as 1 in 9,000. The value of a qualified new initial meeting can be worth $5,000 or even much more, so improving this ratio is worth millions to us.

To hit these outcomes in only two or three years, we focus on outbound prospecting first.

We want to immediately improve the conversion rate of “New Initial Meetings Held” to “Closed Won.”

All sales reps (experienced or not) benefit from call scoring and coaching.

For an interview and more details on how this call scoring works (or can be done for you) go to PredictableRevenue.com/scoring

Conversions: The number of emails sent to a new initial meeting held should be closely tracked and improved.

“Who’s your ideal customer? What do they care about? When we write emails or make calls, what makes us sound mechanical versus human?”

Get the Sagemount Sales Acceleration Deck at www.FromImpossible.com/sagemount.

You can triple your company’s value, too. Assess your willingness and your team. Measure and set the goal. Be ready to slay the sacred cow (usually something your team has been saying needs to happen for a long time, but you haven’t listened). Then create a Forcing Function to create leverage—like taking an investment, publicly announcing a goal, or hiring/assigning a key executive to lead the effort—and burn your bridges to force the changes you know need to happen, but have been putting off.

Burn your bridges to force the changes you know need to happen, but have been putting off.

Zuora looks to see if a prospect is pursuing one of the “Eight Growth Initiatives”

Zuora looks to see if they fall into one of the “Eight Growth Initiatives,” signaling they are serious about considering a major shift to subscription: Launching a new product or service Going international Move into new segment (Up- or Downmarket, Launch Self-Service or Sales Assisted, Multichannel) Pricing and packaging model change Cross-sell/upsell additional products Massive sales team growth Reduce churn Acquisition/spin off of business line

Marketing’s measured on the number of qualified opportunities that sales accepts.

Zuora mixes a variety of functions into a mini-business “franchise team.”

Push for, and expect, outbound results soon …. maybe not revenue, but at least meetings and pipeline. If you’re not seeing qualified pipeline increase within six to eight weeks, something’s wrong. If you’re building an outbound prospecting program from scratch, you’ll see revenue in year one, but not exponential revenue until years two and beyond.

To see the video interview of Zuora executives Kyle Christenson and Franke Ernst, go to www.FromImpossible.com/resources

Revenue Per Outbound SDR = (# New Customers Per Month) × (12 Months) × ($ Avg Outbound Deal Size)

Estimating # of New Customers per Month: At SaaS and differentiated companies, one well-trained Outbound SDR can set up 12–20 Discovery or Demo calls a month. Of those, 8–10 end up in the sales pipeline as Sales Accepted Leads (SALs). We’re using baseline averages.

We like to see 20% of those SALs close … so in baseline scenarios, assume a range of one or two new customers per month per Outbound SDR. Run both scenarios for low–high estimates. Use the same number even if your SDR is prospecting to new divisions of current customers.

SALs per month can be as low as one per month for large deals in challenging niches or complex enterprises, or up to 15-plus per month for highly transactional SMB sales.

Outbound deal sizes should be 3 to 10 times larger than the average inbound sale.

True: “Too many founders are penny wise and pound foolish. They’ll spend $10Monproductandsalariesbutlessthan$2,000 on sales enablement to get more out of that $10M.”—Joe Toste

How Long Will It Take? Year 1: “The Build Year.” You’re building the program, funnel momentum and pipeline. The flywheel’s begun turning. You should see revenue payback this year—if you execute well—but usually not until late: months 8–12 (we’ll break down why).

Year 2: “The ROI Year.” All the pipeline you’d built prior begins to close, regularly. Now that the flywheel’s turning, and you’re starting off with pipeline, you should see a 3–10× jump in revenue this year from Year 1, depending on how fast you’re growing the program.

Example: Salesforce.com closed an exceptional $1MinannualrecurringrevenueinYear1oftheoutboundprogram.Itclosed$7M in Year 2, a 7× jump. And $20M in Year 3.

If you’re new to outbound, you’ll be sorely disappointed if you expect results (usually deals) in “a couple of months.” If you have a two-month sales cycle for inbound leads, expect four months for outbound deals … but with much larger deal sizes.

Let’s break down common timeframes for building an Internal Team: Hire and onboard first SDR(s): 1–2 months … now they have their heads straight. Train them, book first 10 meetings: +2 months … but many meetings are poor. Up meeting quality and quantity: +1–2 months… now we see pipeline grow. Add typical outbound sales cycle: +4–6 more months … hallelujah!

Push for measurable progress, but be prepared for it to take several months longer than you wish to see revenue.

See Kemberton leaders discuss outbound project problems, time frames, details around building a team and more at www.FromImpossible.com/resources.

Predictable outbound prospecting is about The Dashboard. Without an accurate dashboard, whether you’re building your internal team or using an outsourcing firm, you don’t know what’s working or not, or the “real” results.

Inbound SDR (lead response) and Outbound SDR roles, metrics, and dashboards have to be separated.

Everyone has some version of … Outbound Activity Metrics (Email, Phone, Social) Outbound Results Metrics (Conversations, Meetings/Demos) But … do you also measure: # Qualified, Audited Outbound Opportunities (or Sales Accepted Leads)—every outbound opportunity needs to be reviewed for consistency and integrity. Outbound Pipeline Creation Rate—the dollar value of qualified pipeline created each month, and is that trending up or down month over month). Win Rates of Outbound Deals—goal: 20%.

Get the “Build an Outbound Program Right Workbook” at www.FromImpossible.com/workbook

It’s a wonderful problem to have a wealth of inbound leads coming in. But it can lead to sloppy practices in leadgen and sales when teams “get fat.”

Outbound prospecting metrics and dashboards are different (a huge error executives make all the time, lumping inbound and outbound metrics together in single “Sales Development” reports). “Lead conversion rate” means something in marketing. Not in prospecting. Prospectors are targeting Accounts or Prospects, not leads. If case studies are in a PDF document, “white paper” format, or videos longer than three minutes, they aren’t “outbound ready.” Even worse: They’re vague without any concrete details or tangible results.

Inbound leads need to be contacted within minutes or hours, which interrupts the large blocks of hours needed to prospect. Inbound leads take hours or days to qualify, while outbound appointments take two to four weeks to qualify. Inbound call metrics and ratios are different than outbound call metrics and ratios.

Buyers go through three phrases: Why change? Why now? Why you? Outbound prospects usually are at Phase 1 (“Why Change?”). Inbound leads are likely already at Phase 3 (“Why you?”), after already deciding that they need a change and when. They haven’t decided on which solution yet. With outbound leads this differs because you’re having to convince someone why they need to change from the status quo and why they need to take action now. Let’s take a look at a typical buying process with outbound…

When you get so caught up in the day-to-day busy-ness of marketing, lead generation, and app configuration, it can be easy to miss the forest for the trees.

But there’s a better metric, your Key Metric, which you should track and score yourself on—and hold your VP Marketing and VP Demand Generation team(s) to—is Pipeline Creation Rate (or PCR; also sometimes called Lead Velocity Rate). PCR measures your growth in qualified leads and pipeline, measured month-over-month, every month. PCR is real-time, not lagging, and it clearly predicts your future revenues and growth—and, even better—your growth trend.

Your Key Metric, which you should track and score yourself on, is Pipeline Creation Rate (PCR, also sometimes called Lead Velocity Rate).

If you created $1millioninnewqualifiedpipelinethismonth,andcreated$1.1 million in new qualified pipeline the following month, you are growing PCR at 10% month-over-month. So, your sales should grow 10% as well after a period of an average sales cycle length.

One great thing about PCR is that while sales can vary a lot by month and quarter, there’s no reason leads can’t grow every single month like clockwork: Every … Single … Month. Follow other core business metrics of course—just understand that they aren’t as good. Sales and pipeline lag. Monthly sales growth is important, but minor variations can lead to huge forecasting/modeling variances. Know you will grow.

As long as you’re measuring some version of Qualified Leads—not raw or unqualified leads—with a consistent formula and process to qualify them, you can begin to See The Future. Hit your PCR goal every month and you’re golden. And with practice, you’ll see the future of your business 12 or more months out, clear as can be.

You don’t get into true hypergrowth mode until you can get beyond your networks (Early Adopters, 15% of the market) and can sell to “regular people” (Mainstream Buyers, 85% of the market).

You don’t get into true hypergrowth mode until you can get beyond your networks.

Mainstream Buyers won’t buy on faith; they buy concrete “things.” They need to sell projects internally, to their VP or the CEO or CFO. To do that, Mainstream Buyers need everything spelled out: what they get, expected results, the time frame, cost, risks, and steps. It’s a lot more work for you to figure out all the tools they need to sell and justify the purchase internally. Sales calls and discussions can be very repetitive, repeating the same things multiple times.

Figure out all the tools your prospect needs to sell and justify the purchase internally.

They want you to explain things to them with a demo over the phone. They can’t or won’t unilaterally push a new project through; they want more approval and support from more people. They’re less risk-tolerant. They work at more complicated organizations. This isn’t bad, just different. Don’t fall into the ego trap of thinking that because they don’t “get it” as quickly as you that they’re dumber or lazier—they aren’t. Stop bitching. Start learning.

By underestimating the value of a customer, you may underinvest overall in acquiring them.

Your all-in Customer Lifetime Value, including second-order revenues, could be double your current estimate.

But much of the operational pain, especially in recurring revenue SaaS companies, seems to go away around $10–$15 million in ARR. At that point: Your customer base is highly diverse, and not dependent on any whales. You have enough reference accounts. You want more—but don’t need—more logos, as great as they are. Your sales and client success teams are working as a team, as an imperfect but effective engine, and not dependent on a single rock star or two. You have a brand, maybe a small brand at first, but a real one. This is a key inflection point in the getting-easier process. More leads come in, more easily. Customers still need to be sold, for sure, but at least you don’t have to kill yourself to get into the discussion. You can’t be killed by BigCo entering the space or the competition. Wounded, yes, but not killed. Your product may still suck in a lot of ways, but it’s pretty rich with features. You have what many customers need. You know the market so well, it’s pretty easy to see two years out, not only from a product side, but also from a scaling revenue and team side.

Growth won’t eliminate all your worries. You’ll get new ones.

You hire a sales rep to sell before you can prove you can do it yourself. You have to prove it’s sellable first. And the CEO/founders need to do the initial sales themselves, so that they understand how to make sales work. You can’t outsource this.

You hire a VP of Sales to sell before you prove you can do it yourself. You gotta prove the process is at least just barely repeatable before you hire someone to turn up the volume and spin the wheel faster. You gotta build two reps that can hit quota before you hire a real VP of Sales.

Any of your first two to three sales reps are folks you personally wouldn’t buy from. Because then you’ll never trust them with your precious handful of leads, and they will fail,…

You insist reps #4–400 are folks you personally would buy from.…

You underpay. The best salespeople want to make money. If you pay undermarket, you get bottom of the…

Not (intentionally) going upmarket faster to Double Your Deal-size. Nothing is an anomaly: If you can get one enterprise customer—you can get 10. If you have one customer in an industry—you can get 10. The outliers aren’t anomalies: They are The Future.…

Not firing a bad VP Sales in one sales cycle. You should know subjectively in just a few months—just 50% of the way through your average sales cycle Numbers should increase in one sales cycle—with a keen focus on Revenue Per Lead First few hires should be…

You ask your VP of Sales to carry a bag for too long. Her job is to recruit a great deal and hit the overall plan, not to sell herself, not mostly. Have her own the whole number, the ARR plan, not…

You hire someone who last sold Nu Skin. This can work later, but not in your first reps. They need to understand how to sell vaguely similar…

You hire because she worked at Salesforce/Box/DropBox/ABC Famous Company. Don’t hire them because they worked at a well-known or hot company. Hire them because they can and have closed at least vaguely similar products at somewhat similar price points. Not because they are one of 4,000 reps that sell a product at Salesforce.com, which…

You allow any great reps to leave. You should strive for 0% voluntary attrition, not to fire the bottom one-third. That’s for boiler rooms. Great sales teams stick together. Great sales teams inspire each other. Great sales…

Not doubling the plan. Once the EchoSign team was (finally) great, we exceeded the plan, every quarter of every year. Always. But … Jason should have challenged the team to do Even Better. He could have pushed harder by asking questions like “What would it…

The reality is that any hiring shortcut you take now means you are going to have to work 10 times more later to compensate for any shortfalls, such as running too many of your reps’ deals because they can’t close them themselves, having to coach too much, having high sales team turnover, or missed goals.

We don’t get CEOs or VPs of Sales who are cheap when it comes to paying their salespeople. It’s incredibly hard to find great sales talent, much less hire and retain them. Pay them well. Trust me, they can go elsewhere, while the B and C players stay.

Don’t take a job just for the title, investors, or company. Pick the wrong CEO to work with and you’ll be miserable. Be honest about what works for you before you make a decision.

To-Do #1: Drive Deal Size Up as Quickly as Possible Small deals pay the bills, big deals drive growth. Small deals are a fantastic way to get started, get fast feedback, and build testimonials and word of mouth. But fast revenue growth usually occurs with bigger deals.

At Talkdesk, our first rep closed $150,000 in his first 30 days. That’s not luck. You won’t always see sales numbers rise that fast, but if you’re gut tells you that a person was a mis-hire, your gut is probably right.

Again and again. Folks who know how to make a lot of money together want to continue to do so. You should see very little churn among your top sales team members and managers—if any. If you see material churn, there’s a real problem somewhere.

To-Do #5: Outbound (Spears) and Inbound (Nets) Aren’t Either/Or, They Are “Yes” Always be doing both. The question is just the relative ratio, and when to begin or expand each.

Ineffective: Experienced sales people hate to prospect, and are usually terrible at it. Plus, why have your most expensive people make cold calls?

Erratic focus: Even if a salesperson does do some prospecting successfully, as soon as they generate pipeline, they become too busy to prospect. It’s not sustainable, and leads to up-and-down rollercoaster results.

Unclear metrics: It’s harder to break out and keep track of key metrics (inbound leads, qualification and conversion rates, Customer Success rates …) when multiple functions are done by the same team. Having different roles makes it easier to break out different steps in your processes, which means clearer metrics.

Less visibility, accountability: When things aren’t working, lumped responsibilities obscure what or who is going wrong, making it harder to isolate and fix problems.

Specialize people so they can do fewer things, better.

When salespeople multitask (overtask), 90% of them end up doing many things poorly.

Specializing your roles is the #1 most important thing for creating predictable, scalable sales growth.

Prospectors need to prospect. They shouldn’t close, respond to inbound leads, or act as part-time telemarketers when marketing’s trying to fill events.

If you’re seeing recurring problems in your team, or some vital function just isn’t happening or is weak across multiple people, look first to structure. Maybe changing roles and responsibilities is the Forcing Function needed to deal with it. For example, with the right Sales Development team to help prequalify inbound leads or focus on prospecting, any “sales and marketing” divide mostly goes away.

The Four Core sales roles. Inbound lead response Outbound prospecting Closing new business Post-sales roles, such as account management, customer success and professional services

When not to specialize, or do it very differently … because exceptions exist for every rule: You have a very simple sales process, like a one- or two-call-close product. You’re in a business or segment currently succeeding with generalized salespeople (like financial services advisors). Don’t fix what ain’t broken … but also don’t be afraid to try new ideas. Common sense or proven experience—not tradition—says it just isn’t right for you.

Creating a junior sales/SDR role that mixes inbound lead response with outbound prospecting. You better have a really, really good reason to do this.

Dashboards and metrics that lump together inbound lead metrics and outbound prospecting metrics. Step #1 to create clarity in your different funnels: Measure and track them separately.

To make this transition, Clio had to rework a lot of important sales systems: designing new roles, new quotas, new comp plans, creating a territory system (which they’d never had), figuring out which rep should go into which team, changing Salesforce.com, and a lot more. They dove in headfirst.

Lesson #1: Simplify comp: Previous comp plans had a ton of rules and regulations around the kinds of deals that would be eligible for quota. Clio was trying to drive the right behaviors with those rules, but they created too much confusion and too many obstacles.

By removing confusing comp goals and triggers, salespeople partner, collaborate, and close much more because everyone’s aligned. Salespeople partner, collaborate, and close much more when everyone’s aligned.

Lesson #2: Overpay salespeople during the transition: During their restructuring, Clio paid the team a flat fee/fixed bonus for three months while gathering data and figuring out new quotas and goals. Clio wanted the team to feel comfortable helping switch to the new model, without distracting them.

Lesson #3: Create a collaborative, not competitive, sales environment: Fun or friendly competition is helpful and energizing. Hurtful or “real” competition kills your team.

Even if there’s some part of your sales process that you don’t like to do, it’s valuable to do it for a while first so that you have hands-on experience. It’ll help you better hire and manage someone else when you’re ready.

Prospects and customers get better service when you specialize.

Effectiveness: When people are focused on one area, they become experts. For example, in 10 years, we’ve never met a team of generalized salespeople that didn’t struggle with generating or responding to leads.

Farm team/talent: Having multiple roles in sales gives you a simple career path to hire, train, grow, and promote people internally. This creates a much cheaper, less risky, and more effective way to recruit, rather than relying too heavily on outside hires. (A rule of thumb: Over the long term, grow two-thirds of your people internally and hire one-third externally for new ideas and blood.)

Insights: By breaking your roles into separate functions, you can easily identify and fix your bottlenecks. When everyone is doing everything, it’s like having a tangled ball of yarn you can’t tease apart.

Scalability: Specialization makes it easier to hire, train, measure, grow, and promote people across the board.

It’s hard for a manager to be effective with more than 10 direct reports.

But … those VCs are right. In startups, it seems as though the majority of first VP Sales fail: They don’t even make it past 12 months. The average tenure for VP Sales in Silicon Valley averages 19 months, so that includes the winners—ouch. (And marketing leaders average 18 months in fast growth companies.)

Recruiting. You hire a VP Sales not to sell, but to recruit, train, and coach other people to sell. So recruiting is 20% or more of their time, because you’re going to need a team to sell. And recruiting great reps and making them successful is the #1 most important thing your VP Sales will do. And the great ones knows this.

Backfilling and helping his/her sales team. Helping coach reps to close deals (not doing it for them). Getting hands-on when needed, or in big deals. Spotting issues before they blow up. Seeing opportunities ahead of the horizon.

Sales tactics. Training, onboarding. Territories (yes, you need them). Quotas, comp. How to compete. Pitch scripts. Coordinating FUD (fear, uncertainty, and doubt) and anti-FUD. Segmenting customers. Reports. Ensuring everyone on the team, including themselves, can get what they need from the sales/CRM system.

Sales strategy. What markets should we expand into? What’s our main bottleneck? Where should our time and money go? What few key metrics tell us the most about the health of our team and our growth?

Creating and selling deals themselves. This is last of the top five. Important for select deals. But last on the list, because if your VP Sales (or CEO, for that matter) is doing the closing rather than their team, you’re bottlenecked. No scaling for you, sir.

So … don’t hire a VP Sales until you are ready to scale, build, and fund a small, growing sales team. Usually this means you have at least two salespeople—who are not the CEO or head of sales—who are succeeding.

Don’t hire a VP Sales until you are ready to scale, build, and fund a small, growing sales team.

The problem with Evangelists? They’ve never actually built or scaled or systematized sales. They know how to think creatively and cross-functionally. They’re fun to work with. But 9 times out of 10, this is a waste of a hire and your time. Why? Because the founder/CEO has to be the Evangelist, along with the first one or two reps you hire.

Here’s what happens with Mr. Make-It-Repeatable: Everything seems much simpler and clearer. Almost immediately, revenue goes up. Because they know how to close, recruit, hire, and coach. And they know how to build the basic processes you need to make it predictable.

Don’t let a resume blind you—or your investors.

Before we get there, we strongly recommend that you hire one to two sales reps at a minimum (ideally two) before you hire a VP Sales. And make them successful first. So you can practice what you preach, knowing what success looks like before hiring. Also, to get big enough so a “real” VP Sales can actually help, not hinder you.

Practice what you preach, knowing what success looks like before hiring.

If any of the answers are terrible, pass. If any don’t make sense, pass. If you don’t learn something in the interview, pass. And if you know more about any of these questions than the candidate does, pass. Your VP Sales needs to be smarter than you in sales, sales processes, and building and scaling a sales team.

Your VP Sales needs to be smarter than you in sales, sales processes, and building and scaling a sales team.

Your people and culture determine your destiny.

delegate work in sales, but don’t abdicate your understanding of sales.

At least until you’ve seen sales become predictable and profitable enough. Whether you’re a business, technical, finance, or product founder, YOU are responsible for figuring revenue out. Not your VP Sales. Not your sales hires.

Technical leaders: Even if you’re an introvert or too busy coding to meet with customers … do it. It doesn’t matter how fast you code the wrong feature.

Mistake: CEO gets tired of selling, and hires a closer to do the selling for them. CEO lets go of sales too fast. Closer takes far longer than expected to ramp, and fails.

salesperson should bring in 3 to 5 times their total compensation. So if they are earning $150,000ayear,theyshouldbringin$450k–$600k-plus in annual contract value.

Within one sales cycle, you’ll know in your gut if a change worked out. Listen to it.

Develop Reps Who Are “Businesspeople Who Can Sell,” Not “Salespeople” When a salesperson is an expert who knows how your product can help customers—and when it’s not a fit—they will build trust and relationships quickly with the right prospects. There’s no better way to quickly ramp a salesperson than to find ways to rotate your new hires around your company, giving them hands-on experience with support, product, or account management. Slowing down their start on full-time selling, so they can get hands-on experience and accelerate time-to-expertise, can speed up their ramp time.

And there’s only one problem with that: No matter how well that rep does, you won’t learn anything. You need at least two to learn. Here’s why: If your first rep does poorly, you’ll have no idea why. The rep will blame you, your crappy product, your crappy company, your crappy lack of marketing, which may all be correct. But if the rep is a bad fit, that may be the real reason. You just won’t know. If your first rep does well (our experience), you’ll still have no idea why. Does the product sell itself? Is it the rep’s suave phone skills? Is it your deal size, and are your customers representative of the ones you’ll really get in the future? Or is this rep only good at a certain type of customer—and are you leaving other potential customers behind? You just … won’t know.

Look, if you’ve been a VP of Sales yourself for 10 years, ignore this. But most of you haven’t built or led an inside sales team before. So you’re gonna need to learn. So even if it seems expensive, hire two. To start. Then learn … and go from there. It will be better, and thus cheaper, in the end. And the rule of two can apply to any new function, not only sales.

When you do something new, hire two. With one person, you can’t tell if what is and is not working is due to the person or to the process.

Hire the same type of successful sales person. Consistently train them the same way. Provide each salesperson with the same quantity and quality of leads. Have the salespeople work the leads using the same process.

Hire people who show past success as well as people with untapped potential.

Coachability (#1!) Prior success Work ethic Curiosity Intelligence

People always matter, but when you’re doing something new, the first hires make an even bigger difference.

Find the job description and download-able hiring guide at FromImpossible.com/recruiting

Set comp expectations. Paul tends generally to advise companies doing big, new things (new products, teams, markets) to avoid commission-based comp plans as long as they can. You can’t put together smart commission plans until you’re smart about your sales machine, and that can take a lot longer than you want. While you’re learning, it’s better to pay salespeople a flat amount per month, or with discretionary bonuses, until you have enough experience and data to put together a practical (not arbitrary) plan that includes commissions. If you put a sales team on a commission-based plan too early, when you’re arbitrarily guessing at realistic sales and business goals (even when based on other companies just like yours), you’re setting yourself up for a no-win situation. One of two things happens: Either: Very rarely, the sales team will blow away the targets and you (or your board) will be upset at paying them “too much money” (although everyone agreed to it ahead of time), then quotas will be jacked up and commissions decreased, thus frustrating the reps … Or: (And this is the one that happens 95% of the time with new products and companies.) The sales team totally misses goals because the goals were unrealistic and arbitrary in hindsight. And the sales team is again left very frustrated, and perhaps financially desperate (never a good thing) if they need at least some commission income to pay for basics like rent.

A bad system will beat a good person every time. —W. Edwards Deming

Until you fix the systems, you’re going to struggle getting repeatable success.

Your ability to scale a sales team depends on making everything a system. When salespeople leave for any reason—missed quotas, dissatisfied, bad apple—it means you have “defects” in your system. Your ability to scale a sales team depends on making everything a system.

A commonly accepted estimate of the cost of one lost salesperson is one and a half to two times their annual comp. At two times their comp, losing five salespeople with targets of $150,000isacostof$1.5 million.

Common Sales Attrition Causes There can be a million underlying causes behind high sales attrition, but the three most common ones are: Lead generation: The company isn’t doing enough to support the reps with quality leads. Specialization: The company isn’t specializing at all, the right ways, or going far enough with it. Management: Leadership (mostly the CEO and VP Sales) isn’t connected with what’s going on “in the trenches,” or is still very traditional or conservative. We love this quote: “People leave managers, not companies.”

identify patterns that lead you to discover the main one or two problems that are causing high attrition. Don’t just blame salespeople for failing. What else contributes to the systemic problem(s)? Keep up the one-to-one coaching, and don’t let individual salespeople use team-wide problems as an excuse to give up. Great reps with a great (or even good) manager and fair compensation will prefer to stay. People leave managers, not companies. Which managers have high churn, and why? Voluntary attrition should be 0%. Overall attrition should be 10% or less, but not 0%, because no company has perfect hiring and coaching.

The biggest problem Mark sees today in the sales world: sales doesn’t care enough about customer success. We talked earlier in the “Seeds” chapter about creating a dedicated Customer Success team, but how do sales comp plans affect customer success? People talk the talk … but when push comes to shove, vanilla sales teams are gonna do whatever it takes to close a deal, then collect a check, and let other teams pick up the pieces later.

Think about this scenario: you have two reps who both closed $1M in revenue this year. Your first rep, all her customers are happy and they’re expanding and renewing their contracts because of it. While your second rep’s customers are miserable, complaining and churning out. If your compensation model is set up so that both of those reps are compensated the same, you’ve got a problem. Mark proposes incorporating a customer lifetime value trigger into your comp plan.

Churn and retention are the best indicators of customer lifetime but they take too long to tie to your sales comp. Mark says find an “aha moment” in your product or service your customer completes in the first two months that flag them as an ongoing success. Pay the sales rep half their commission when they sign the contract, and half when that “aha moment” happens. Some popular examples of how a company knew a customer would be successful: Dropbox—when an account has added one device, one file, and one user. Slack—once a team exchanged 2,000 messages. Hubspot—once the customer used 5 out of the 25 available features in the platform. Twitter—after someone followed 30 other people.

Involving your reps in helping redesign their plans reduces comp plan change friction: They had a voice and could contribute concerns and ideas, it reduces surprises, and reps are pre-educated before a new comp rollout.

We all agree everyone in sales has to have commissions and a highly variable comp structure. What we mean is everyone that materially impacts the plan should have some variable comp.

Your VP Product should be incentivized to build the right features, not only to make a great product but also to hit the annual plan. How about a 15% variable cash component, and a 15% bonus for exceeding the plan, and also perhaps some downside for missing it?

Your VP Marketing better have her comp plan tied to the leads or opportunity commits that make the annual plan work. How about a 20% variable cash component? The leads aren’t there, she comes up short. But if the plan is blown out, she shares in the extra revenue.

Your VP Customer Success better have her comp plan tied to hitting the upsell, retention, or negative net churn goals. How about a 30%-plus variable component? Watch her sweat the lost customers 10 times more when money is on the line.

Your VP and Directors of Engineering need to build the stuff we need to hit this year’s plan. How about a 10/15/20% variable comp plan here?

Your Controller exceeds our collections goals, and you end up with an extra $300,000 of cash in the bank? How about a bonus here?

Revenue is a concrete team goal everyone can and should get behind.

Later, this may get harder. Later, you may need subordinate goals. But for now, tie a bonus plan for exceeding the revenue plan for all your key hires, of every discipline.

Get them thinking directly about revenue, and it’ll help revenue come.

Maybe you’re frustrated by a similar thing: Big companies seem to take forever (6–12 or more months) to decide to buy your “no-brainer” service that—to you—they clearly need. However, if you’re an early-stage company, you may not realize that you’re still figuring out if you’re (a) a need-to-have or (b) a nice-to-have with these companies, and need to Nail a (New) Niche. Or, because you had a few fast Early Adopter buys, you may have totally wacky expectations on how fast your big company Mainstream Buyers can make decisions.

Remember: Big companies usually make group decisions, are risk-averse, and it can get complicated. More people involved means longer decisions. When buying something new or important, a big company might take six to nine months to buy with more people involved, more complexity, more systems and teams affected, and less tolerance for risk. The nature of the beast is it’s harder for them to buy. So, in selling to them, one of your jobs is not to “sell,” but to help them buy. This often means you need to help the primary person at the company—the one who wants your stuff—sell it internally to their peers and boss(es). One of your jobs is not to “sell,” but to help them buy.

Find a champion and help them sell internally:

Focus on prospects who need you and can buy faster:

Clarify your “Ideal Customer Profile”

Confused prospects say “No.”

Whatever you wrote up to impress your professors or investors just sounds like bullshit in the real world. If a prospect is confused about what you do or how you can help them, they’ll say no—even if you know they need your product. You want your prospects to understand what you’re talking about, and the best way is not to impress them, but to keep it simple. Maybe you need to do a new set of interviews to help refresh your messaging.

Case studies prove that you’re not all talk: Details on how you helped ACME grow from $10millionto$50 million in two years are more concrete than “We can help you grow 500% in 12 months.” References, especially if there’s someone in their network who knows your stuff. Can you do some free work for them to prove your claims, rather than have them guess? Start your pitch with a demo or dashboards to show them what they’ll get with your product, rather than a long-winded history of your company. Is there a demo or visual you can show, a story you can tell, a picture you can draw, a video you can shoot? Can you get them using your product hands-on—say, with a pilot or free trial? Either can be a double-edged sword. If you run one, don’t assume they’ll just “figure it out.” Define what a successful pilot looks like, and the steps needed to get there, before you begin.

Number of open opportunities in total and per rep: Measure the total number of open opportunities each rep is working at any given time, and understand how many total new opportunities they should be getting per month—not too few, and not too many.

Number of closed opportunities in total and per rep: Measure total opportunities closed including both closed-won and closed-lost opportunities.

High win rates aren’t good, low ones aren’t bad.

Deal size: Measure the average value of your closed-won deals.

Win rate: Measure the number of closed opportunities, in a specific closing period, that you won (Closed Won Opportunities)/(Total Opportunities: both Closed-Won and Closed-Lost). This won’t mean much unless you can watch it trend, or use it to A/B test reps with similar segments, or compare against companies similar to yours.

The simplest way to start increasing your team’s win rate is to find the one or two most problematic steps in your process, and then look both “inside” (e.g., a better demo process) and “outside” the team (e.g., an easier free trial, or simpler pricing)…

Don’t assume—investigate.

Look at your sales funnel and understand conversions through every stage through to closed-won. If most reps are struggling in the same area, then don’t blame them; it might be something outside their control. Nominate an investigator to find the truth of what’s going on.

Sales cycle: Measure the average duration or time (typically in days) it takes your team to win a deal and, ideally, how long opportunities spend in each sales stage.

Especially if you’re doing SaaS for the first time (or even the second), the whole idea of charging for “services” may seem anathema. It sure seemed like that to me at EchoSign. If your product is so easy to use that you hardly even need salespeople, why in the world would I need to charge for implementation? For support? For training and engagement? And isn’t it a bit unseemly to charge for services? Doesn’t it label your product as old-school, too clunky, inelegant, or complex? And isn’t the revenue from services a waste? For example, it’s not recurring and it’s not true ARR. Does it even count? After all, I’m a SaaS company.

Your buyer wants to do the least amount of change management possible by herself.

Both of these are often line-item budgeted at 15–20% of the core contract value for the product. So … You probably can’t charge another 15–20% for services and implementation and training for a $99 a month product. Well, maybe you could, but it’s probably unprofitable and not worth it. But, as soon as the sale gets into the five figures, consider adding 15–20% for services. You’ll probably get it. And plan for charging, and delivering, additional services in mid-five-figure and larger deals. The customers are happy to pay, and in fact, will expect it.

And importantly, this extra services revenue still “counts” as recurring revenue if it’s less than 25% or so of your revenues. Wall Street and VCs and acquirers and everyone will still consider you a 100% SaaS company if less than 25% of your revenues are nonrecurring. And you’ll get the same SaaS ARR multiple on those extra services revenues: same multiple, no extra work, 10–25% more revenue, extra, nondilutive cash flowing into the business. Don’t leave the services revenue on the table.

If you’re selling something at $1,000butcancharge$10,000 for the same work, it’s 10 times easier.

Concentrate on small deals initially and work up to the enterprise level—the most profitable part of SaaS—later.

If you have true enterprise customers, they’re going to last around five to seven years. If you sell to various small businesses on a credit card, they’re going to churn out at 3% to 4% per month. Which may not sound like a lot, but 4% monthly churn means losing about 48% of your customers in a year.

Assume the majority of your headcount at a $10 million ARR SaaS business is not building product, but helping to sell, market, and support it.

The Painful Truth : It’s hard to build a big business out of small deals.

For example, at EchoSign, pure freemium (i.e., no human involvement, where people started with the free version, then auto-bought some kind of upgrade) never exceeded 40% of revenue. As they passed the first $10millioninARR,freemiumsalesbegandecliningandneverexceededathirdofrevenue.AnothergreatexampleisBox.Boxtogetpast$100 million in revenue “tilted” from a mostly freemium product to an enterprise focus aimed at landing six- and seven-figure annual subscription deals. Today freemium is a minority of their revenue.

Freemium alone has a ceiling. But it builds your brand.

Pure, automated freemium—where you put up a website and the money automatically rolls in—is a wonderful vision, when it works. However, it’s much harder to achieve than you realize, if you haven’t done it yet.

SMALL DEALS GET YOU STARTED, BIG DEALS DRIVE GROWTH

Which is the fastest way to get to $5millioninrevenue:sellingamillionordersat$5 each, or selling 100 at $50,000each,orselling10at$500,000 each? You can make millions without needing millions of users.

They all started simple then went upmarket. Salesforce.com started by selling a handful of users at $50auser.Withinthreeyears,theyweresellingdealsof1,000usersat$125 a user. Then a few year later, tens of thousands of users at $300 a user (list price). Salesforce.com put tremendous focus on selling (and delivering) deals with massive user counts, while finding ways to create higher end packages… which combined to create massive revenue acceleration.

When you’re attempting to grow by major leaps, work on doubling your average sale size as much as you work on finding and closing twice as many deals. Or if you already have lead generation machine working smoothly, it’s how you can quadruple growth—doubling deal sizes while doubling leads.

Work on doubling your average sale size as much as you work on finding and closing twice as many deals.

You can do it through a mix of targeted lead generation, changing pricing, designing higher-end packages, through premium products with enterprise features, carefully developed channel partners, or whatever. It doesn’t happen overnight, but you can take concrete steps to get there.

Start with the question, “What conditions would have to exist to close deals that are 10 times larger than we are doing today?”

Many entrepreneurs, especially first-time founders, have expectations of what people will pay that are far too low. It’s also easy for experienced executives to fall into a rut with a division or team, through either inertia or habits. Push yourself past those limits, to come up with ways to double or triple your revenue per customer by also asking: What would it take to grow our revenue 10×? What would it take to grow our biggest sales size 10×? How can we find and work with customers to whom our solution would be worth 10 times the price we’re currently charging?

How can you think bigger? For example: SaaS products: What kinds of management features would you need to sell packages of 50, 500, or 5,000 seats? Freemium or cheap products: What do companies need so badly that they’re willing to pay for a five-, six-, or seven-figure annual subscription deal? Or what kinds of channel and distribution partners would have a big audience hungry for your stuff? Smartphone apps: Is there a way to sell bulk packages to businesses? Or resell the technology or your unique expertise to other business? Books, online programs, or workshops: Are there partners who can help sell bulk orders? How can these lead to five-figure consulting/services, then six-figure, then seven-figure? Jeans or T-shirts: What kinds of companies would bulk-buy them, or be a great channel to profitably sell lots of them for you? (For every successful “Threadless”-type T-shirt success, there are probably 50 other companies that struggle to profitably sell single T-shirts and other small items direct.)

Don’t count on making a big business out of small deals or customers.

As you get off the ground, one of the best ways to double your other growth, without working more hours, is by closing bigger deals. With bigger deals, you will (a) make a lot more money, (b) exert less effort, and (c) help customers become more successful. If you’re selling to someone who’s close to your Ideal Customer Profile, closing a $100,000dealshould{n}^{\prime }tbemuchmoreworkthanclosinga$10,000 deal, and may not even take longer. So if it takes two to three times the time and effort—but if you get 10 times the revenue and your customers get 10 times the value, it’s worth it!

Don’t be afraid of raising your prices when selling to bigger companies with bigger needs. Bigger deals can take longer to close, but they’re worth the wait. The size of the deal doesn’t determine the sales cycle length; that’s affected by things like: Clarity in Nailing a Niche, especially becoming a need, not a nice-to-have, for executives The number of people involved in a buying decision (bigger companies means more people are involved, the decisions are more complex, and more time is required) Selling on value, not price, and with unique advantages customers can’t get elsewhere Your ability to show believable proof of results Also, bigger deals can lead to better customer results: Better service: You can focus customer service/Customer Success people on fewer customers, ensuring customers get the most value from your product. More commitment: As long as you’re not selling to people who aren’t a fit or aren’t ready, bigger deals should lead to companies that have greater need, commitment, and resources to get the most from your product. More cash upfront: Working with bigger deals often means working with companies that have cash or funding, to pay cash upfront for one- to three-year contracts, so important for growing businesses!

We want to be clear: We’re not telling you to give up small deals. Use small deals to get started. Appreciate those customers and love them—but don’t limit yourself to small deals by thinking small. Before the Internet, businesses ended up focusing on either lots of small, transactional customers, or on big customers and big deals. Now, companies can blend them cooperatively, building a customer base of small, medium, and large customers. The trick is in focusing on one as your primary business, while keeping the other(s) as complementary.

There’s a difference between being patient and being passive.

Because what he had with his SaaS company is something you may have with yours, too: an application that can be used by businesses of every size. And if you do, you’ll want to decide if you’re selling a tool—or a solution.

If you have multiple segments with 10% or more revenue, you need to service them all in some fashion. But one segment has to be number one.

Understand that you can make 3 to 20 times the revenue on a given enterprise customer with a solution sale versus a tool.

You’ll need a lot more people and processes (and features and software development) to provide a true solution.

It’s easier to get to $100millioninARRandanIPOonthebacksofenterprisecustomerswhocanpay$100,000-plus a shot.

Don’t fear the solution. Don’t fear the Professional Services team, or the solution architect, or the sales engineer. Deep down, many of us would prefer to sit at our desks or in front of our iPads and watch the customers roll in with no human interaction. If you can get 1,000,000 paying customers that way, that’s probably the way to go. But whatever you do, don’t do all the expensive work to provide a solution and then get stuck at a low tool price point; that’s the kiss of death.

• Ojo

Going Upmarket So you have a good thing going already? Maybe it’s time to push yourself on investing in salespeople, on pricing, and going after bigger, more complex customers.

What works at the bottom of the market may not work as you tilt upmarket.

“Amateurs” (those not classically trained in sales) don’t know how to close. They wait and hope for the close to happen magically on its own. Sometimes it does. But you’ll see that once you have someone managing a prospect who knows how to close, then a lot more deals happen, and they close more quickly.

Putting true sales professionals on those leads is going to increase your revenue per lead by 300%—at least in the segment of your customer base where it makes sense to have sales professionals (e.g., $99–$299 MRR and higher).

The sales rep’s job is to be a trusted guide, a consultant, helping prospects through an often-complex evaluation and purchasing process.

For lead generation, it helps to have some free, easy, or affordable ways for prospective customers to kick the tires and get to know you. This could be a free or low-cost product, a free trial, or free content.

For lead generation, it helps to have some free, easy, or affordable ways for prospective customers to kick the tires and get to know you.

If your product is 100% individual-focused, and you add just enough features to sell to a team, to tilt just slightly upmarket—you can grow your revenue, at least a segment of your revenue, by 20 to 30 times. Because deal sizes can go way up, and customers will stay with you much longer.

Now come up with a slight extension of that same product whereby some team or segment of an entire enterprise can use it together. Let’s call it just five seats to start, instead of one (see Figure 17.1). Maybe you add management-level analytics. And then some sort of collaboration. I’m not sure what it will be for you, but let’s call it the most basic features necessary so that a team or a group will buy, instead of an individual user. Often it’s around extra reporting features, administration, security, or configuration controls.

What you’ll find is epic on the churn side. As the deal gets just a smidge bigger, your churn will drop by 50–80%, toward 1–1.5% per month. As you add more seats, the churn will trend toward 0% and eventually become negative: your customers will add more seats than they cancel over time. Since SaaS compounds and is a long-term play, over three-plus years you’ll be just so far ahead. That single-seat user that left after eight months might be gone forever. But that five-seat team edition sales customer is still there in Year 2 and Year 3, paying you, and maybe even adding seats.

So what’s the point? If you are building a freemium or self-service product you don’t immediately need to Go Enterprise. What we are suggesting is that you at least think about adding a layer: If the one-seat freemium thing is working for you, add a Team or a so-called Enterprise Edition, even if it’s just for an enterprise of five.

Think about adding a layer: If the one-seat freemium thing is working for you, add a Team or Enterprise Edition.

PRICING IS ALWAYS A PAIN If you’re struggling with nailing down your pricing, remember: Pricing is always frustrating and never perfect When in doubt, it’s easier to start with higher pricing and then lower it, than to start low and raise it later

Maybe anyone can use what you’ve got, but who would find it especially valuable? Who needs it?

Complex pricing makes it harder for customers to buy and harder to keep track of what has been delivered.

Don’t let the fear of losing a deal stop you from trying out new pricing ideas with prospects.

In many ways, the purpose of enterprise sales is to help customers get through their own internal buying processes. Even the best and most popular product can’t make typical enterprise buyers change the way they do procurement.

The true purpose of salespeople is to create new value for customers.

Even though the enterprise sales process has many steps and stages, it ultimately has to answer three questions for the customer: why buy, why buy from you, and why buy now.

The best enterprise salespeople are coaches, ensuring that prospects receive what they need, resources are rallied within the company, stumbling blocks are uncovered and avoided, and surprises are eliminated.

Any expectations you have about how long it will take, or how hard it will be, are pretty much guaranteed to be wildly off. But it’s worth it.

You read these exciting press stories and feel a mixture of excitement first, and then depression: Everyone’s crushing it except for you (“compare and despair”).

COMFORT IS THE ENEMY OF GROWTH

If it’s a revenue plateau, it’s often because: You’ve tapped out your networks and relationships. You or your business doesn’t stand out; you sound like everyone else. You’re overly dependent on a single person for a key function, such as bringing in leads, closing deals, or engineering. The market or customer needs have changed, and changing the business feels impossible or impractical. You’ve hit a business model or market wall but aren’t sure what to do about it.

The irony is, what’s already worked best for you so far (what you’re familiar and comfortable with) can be the enemy of faster growth, because you become dependent, complacent, or just too busy to keep

A drastic change might be required to Nail a Niche or get on the path to scalable growth.

When your bicycle tire’s leaking air but not flat yet, it feels easier just to keep pushing.

Those who succeed in making the big leaps find the motivation—whether through drive or passion—to sustain them through the ups and downs of Doing the Time, or a Year of Hell.

You have to want something as badly as a drowning person wants air.

Remember three things when overwhelmed: Embrace your struggle, because it’s real and not going away. Everyone else has it, too—even when it doesn’t look like it. Use your struggle as a fire under your butt to change things, rather than resisting it. Turn it to your advantage! Don’t let “keeping up with the Joneses,” whether friends or competitors, distract you from doing the important things you, your team, and customers need. Don’t raise money, hire a ton of people, write a book, or spend money on a conference just because someone else did. Cut the “blah blah” crap from your communication, to employees and customers. “Simple to understand, easy to act on,” honest information that’s valuable to the reader (not just the sender) will help cut through the clutter they’re dealing with. Be blunt. Be honest. Be helpful.

If you really want to earn, you need to be among the top three or four leaders in the company. It’s best to be a founder. Very few people can do this. It’s a rare skill. Be realistic about your skills, background, and ideas.

Match your talents, age, skills, ambition, and economic situation to your current reality.

Having a good heart isn’t enough. You need to learn how to make money to grow your organization, whether it’s for- or nonprofit.

Now, he says he’s learned the hard way that regardless of how meaningful an organization’s vision and values are, it’s not going to exist unless its founders embrace money. Including how to market, sell, and predictably grow.

Don’t obsess about getting to success so fast that you ignore your inherent interests, those “whispers” in the back of your head that you usually ignore as being impractical—you know, pretty much anything that isn’t about your to-do list or your immediate career and home concerns. Anytime you say, “I’d like to do X, but I can’t because of Y” imagine what it would be like if Y were not in the way. How can you pursue dreams you had when you were younger, such as moving to another country, making art, writing music or poetry, having kids, or adopting?

Make Your World better by appreciating all the tangible ways you already help the people you work with, serve, or inspire.

• Importante

You can make a great journey. Startups, companies, or teams don’t last forever. They grow, one way or another, or they die. But you can make a great journey. You get only so many trips in life. Having a great one is something everyone takes with them, forever.

The Painful Truth: Your employees are renting, not owning, their jobs.

You’re passionate and committed to what you do, which leads you to forget that many others aren’t, or that they haven’t learned yet how to execute as you do. And they won’t, unless you embrace Functional Ownership.

I am only motivated to do the minimum here to get by, rather than going above and beyond—because, what’s the point?

If you wait for people to recognize or “discover” you, here or anywhere, chances are you’ll be waiting a lo-o-ong time.

I know we have set ways of doing things, but don’t let them trap you into inertia or excuses: You can’t wait for more people and budgets to happen before you can evolve and adapt. There is always a way to move forward with the time and resources that you already have. Embrace faster decisions: Nothing happens until a decision is made. Are you avoiding making an important decision (or keeping it in committee indefinitely, or hiring a McKinsey…) because you’re afraid of making the wrong one or looking bad? Don’t punish new ideas. When a salesperson intentionally tries a creative new technique but loses a big deal or blows up a customer, do you punish them for failing or reward them for trying? It’s not a loss as long you learn. Save stronger action for people who (a) make the same mistakes repeatedly, or (b) lie.

If you punish your employees for trying new ideas (or just ignore them), they’ll stop trying.

Get your hands dirty—say “I,” not “we.” Do you think “we” should start a blog, start prospecting, or come up with a new vision statement? Kick off the grunt work yourself first. You’ll set the example and learn more about what “it” will take to work. How can you and your team increase revenue? Maybe no one else cared before how HR, procurement, IT, manufacturing, or accounting affected revenue. But I need you to understand what growth requires, so you can help. At a minimum you can teach our sales teams to be smarter about how your function works at customers. And the closer you can tie your area to financial results, the better for your career and responsibilities.

Owners don’t need to be managed. They don’t sit around waiting to be told what to do—they do it. Because when they own something, emotionally, when they care about something, they take care of it.

How can you help employees go above and beyond their job description—not in hours, but in initiative?

Look, if most sales managers complain their salespeople don’t prospect enough, then it’s not the salespeople that are the problem—it’s the system of prospecting that needs to change. This is why specializing sales roles works so well. Got it? Okay then… Likewise, if most CEOs and executives wish their employees took more initiative and acted like owners, and then it’s not the people that are the problem, it’s the system of management that needs to change.

It’s not the people that are the problem, it’s the system of management that needs to change.

Because the truth is, your employees are renting their jobs: How do you treat a car you own versus a rental? How do you invest in a house you own versus a leased apartment? What’s it feel like to babysit others’ kids, versus having your own? Your employees don’t act like owners, because they aren’t owners. Not really.

Employees need Functional Ownership to inspire owner-like behavior.

But Functional Ownership can be life-changing for: Employees who want to take their contributions to the next level, but haven’t been sure how. Executives who keep looking for ways to predictably motivate and energize people. But Functional Ownership can be life-changing for: Employees wanting to get to the next level, but aren’t sure how, and Executives who keep looking for ways to predictably motivate and energize people.

People support what they help create—the size of what they own doesn’t matter as much as the reality of their ownership. Including an inability to hide from that responsibility, which is why shared responsibility creates pointed fingers.

So, Functional Ownership is a key piece of the motivation puzzle here. Then, combine it with inescapable deadlines and Forcing Functions (which we’ll get to later in this chapter) … that’s when predictable magic happens.

Are you going to react to changes in the market or get ahead of them and help create the changes yourself?

Yes, by definition you and your people should feel frustrations when getting outside your comfort zones. As long as it’s new frustration from new problems, not from the same ones that never get solved or evolved.

Don’t try to fix or respond to or improve everything at once.

Customers hate surprises from salespeople. Salespeople hate surprises from customers. VP Sales hate surprises from their salespeople. CEOs hate surprises from their executive team. Boards hate surprises from the CEO. How can you create a culture of “No Surprises”? Consider what it’d take to eliminate them …

What it would take to eliminate surprises—across employees, customers, investors, and the management team?

If you have a board, turn board presentations around and use the same one for a regular company update.

Over time, regular updates will evolve to change style and pace, but in the beginning, you need to establish how serious you are about it.

Educate your employees on your finances.

Are there proven career paths in the company that people can look forward to? How are promotions or job changes decided? Are new job openings publicized within the company in addition to outside the company, and are internal people allowed to apply? If not, why not?

For example, here’s a simple outline of a process that aligns both buyer and seller: Initial “Are We a Fit?” call: Determine if this is a waste of time or not, before moving forward. This may include a first simple demo to the buyer, so they can decide if a next call is appropriate, and who to invite from their team. Demo or discovery call: Include several people from the buyer’s team, including a decision-maker, so again we can make a decision whether a deal is worth pursuing. Proposal: Lay out the terms so the buyer can see all the details regarding how it would work to meet their expectations, pricing, options, and terms. Offer alternatives—honestly presented!—to the seller’s products (including “do nothing” or “competitor 1”) to help the buyer make the best decision. Executive buy-off: The decision-maker gets all questions and objections answered. What would it take to get them excited for the project? Finalize terms: The word “negotiation” implies a “win-lose” situation for most people, when in reality, both sides are trying to finalize the details in ways that make sense for each other. Sign contracts (or paperwork): Both sides celebrate today, and then get back to work tomorrow on delivering on the promises made. Kickoff/implement/begin: The customer on boards the new product or service. Track success: Help the customer measure and gauge their results to date, and how successful the project has been compared to their expectations.

When someone owns something emotionally, the way they think about it, work on it, and commit to it is far deeper than when they’re just a part-time player. When they can dabble. It’s like the difference between being a parent and being a babysitter.

Answering the question “Who owns marketing?” is easy if you have a VP of Marketing. And usually, they own everything in marketing, with all important decisions being made or affirmed by them. But who runs the blog? That’s not the VP Marketing, unless they are a one-man marketing team and run everything themselves. Whoever runs the blog on the team should own it. That means the head of marketing would defer to that person on decisions about the blog, which could include decisions about the visuals, rhythm, format, content, and style. And that person would own it and be 100% responsible for the metrics related to the blog.

Rather than having people coming to you with options all the time and asking you to decide, they are coming to you for advice when they need it and then they decide. It’s made an enormous difference in the management load at PredictableRevenue.com to have decisions spread out across the team, rather than funneled up (aka bottlenecked) at the top.

Remember, we’re concerned with two kinds of ownership (well, what we truly care about is emotional ownership, but that’s a side effect of implementing these others): Functional Ownership: Who owns which responsibilities—Sales? Leads? IT? Financial Ownership: Who are the equity owners of the company? How are commissions made or profits shared? Executives usually have both. But many employees have neither, or have only token amounts.

To encourage your people to take charge of their lives and be more entrepreneurial, they need to own something, anything, even if it’s the kitchen refrigerator.

People only get better at decision-making when their boss lets them make decisions on their own, and then learn from the consequences.

Start with Three Questions

• importante

When you have a Forcing Function deadline that someone can’t hide from, it drives everything else to get built as they go: results, decisions, and learning loops.

Every time an employee comes to you for a decision, you’re stealing a chance for them to practice their own decision-making. You’re teaching them to depend on you.

Owners need to improve their decisiveness and confidence, which comes from practice and coaching. So as often as you can, find opportunities for them to make more of their own decisions, and live with them. One rule: they have only to ask for advice from someone else before they make it.

When you make a decision for an employee, you’re robbing them of a chance to practice it themselves, to learn. Even if the decision ends up being a painful one, making mistakes is the cost of doing something new—especially when learning how to be entrepreneurial.

If you’re not failing, frustrated, or disappointed almost every day about something, you’re too comfortable.

Ownership isn’t about how “big” or “small” something is, as long as it’s important to someone, and is appropriate to the owner (not too easy, not impossibly challenging). It can mean owning the fridge, the company blog, the phone system, fun team-building events, an internal wiki, a product launch, a multimillion-dollar product line, or a conference.

The more you involve your people in the process … the better the result for the company and all its stakeholders.

If there are remote workers in your company, find a way to get them together in person even if it’s once a year. Video calls work better than ever, but there’s no replacement (yet) for getting to work and know someone in person, whether it’s a coworker or customer. There’s no replacement for face-to-face meetings.

Help people find their individual strengths, desires and genius, to work together as a group of talented individuals, not clones.

Do you channel your frustration and anger into figuring out how to change? Or do you let it simmer and fester inside, without doing anything about it?

The Painful Truth: You’re letting frustrations stop, rather than motivate, you.

When we ask executives, “What do you wish employees knew?” they answer that employees have way more opportunity than they realize to make an impact in the business, their careers, and their lives.

Employees: You wait around for others to tell you what to do, to help you, or to motivate you. You’re letting yourself become dependent on others, and that’s not going to get you to your goals.

There will never be an ideal time, opportunity, or idea—there will always be challenges. Owners and entrepreneurs succeed despite them, not without them. Even in baby steps. A step is a step, no matter how small.

Clocking hours at work doesn’t count. What are you learning that’s important to your goals—and not just through watching videos or reading books, but by doing it? (The best way to learn how to market or sell is to … market or sell.) How are you contributing beyond what’s expected at work, or from customers?

It’s fun to dream about success. Making it happen—and keeping it going—is a lot tougher. And far more rewarding.

Can you find a problem that requires you to learn or do something from your list?

Money and passion are like water and food. You need both, though you can last only a few days without water (money) while you can go for weeks without food (passion) … even if it’s unpleasant.

You need to (a) explore your interests and passions while also (b) learning how to create value and create money.

Yeah, and how much do 99% of those international, beach-lounging, yoga lifestyle, work-from-home-in-my-underwear people actually make? Except for a small number of standouts, much less than you probably assume. We aren’t against beach yoga, and as for the ones doing it—great for them! The problem is when you read those sexy stories and assume you’re failing, or think that you need to quit whatever you’re doing to start from scratch, or buy into a overnight success pitch. Because 95% of you shouldn’t make such a drastic change, and instead need to take what you’re already doing and dig back into it, build on it, and expand on it.

Remember that those successful people whom you’re following (including ourselves) still have plenty of problems. It’s just more fun to write about how awesome life is than to share the sucky parts—especially on social media where your friends are watching. It’s embarrassing to write “I’m doing yoga on the beach in Bali, but after a few months it’s not that great, and I want to go back to a job where I see friends every day and can rely on a stable salary.”

For example: Creating financial stability and choices for your family. Marketing and selling products, yourself, and your ideas. Saying “no” to people, ideas, and opportunities that threaten to overwhelm you. Spotting problems that others would be willing to pay to solve. Finding new ways every month, every week, and every day to learn in your routine job, and learn something new (avoiding the Grass Is Greener trap). Learning outbound prospecting, and how to drum up business. Communicating clearly in emails, speaking, or messaging. Creating and maintaining relationships: authentic curiosity about others, impeccable honesty, small talk, eye contact. Connecting with people, making small talk, having conversations—not just via email, texts, or social media (or dating) apps. Building your confidence by taking on new challenges, and “going for it,” then—whether you succeed or fail—learning and try, try again. Exiting toxic situations whether with a manager, business, or customer. Having the hard conversations with coworkers or customers that you’ve been avoiding, even when it scares the heck out of you. These passions aren’t sexy, but they’re examples of what you need to do to make as much money as you want, doing what you love. Work—every day—to find passion in what you do, including in making customers successful, learning how to make money, and managing people.

Questions What skills do you want or need? How can you get paid to learn and do it now? What baby step can you take today toward doing it? Nurture a passion(s) in something you already do.

Pick an important life or work goal. What are you doing about it, or need to, to reach it? How can you get paid to learn and do it here, wherever you are right now? What baby step can you take today to move forward?

Happiness is a funny thing. It’s transitory, often coming and going on a moment’s notice. And happiness today can be the enemy of happiness tomorrow, if you let it make you complacent.

A company is responsible to employees, not for employees. It can create the conditions for your fulfillment: a safe work environment, no assholes, fair pay, career opportunities, and an honest culture. But it can’t be responsible for making you happy—just as it can’t be responsible for keeping you entertained or interested.

Fulfillment, a more enduring form of feeling good, comes from using all your talents and growing through challenge.

What works for me is creating Forcing Functions made of up simple ASSes: Announce to others that you’ll create a … Specific Outcome, by a … Specific Date

Tell some people what you’ll do, and when you will do it.

The best way to deal with any fear or panic is to get moving and take one more step toward your deadline (Figure 23.1).

Especially when I’m tired, motivation hides. It cowers. It runs away. It doesn’t just come to me. Motivation is attracted by action. Ninety percent of the time I don’t start working after I’m motivated. It’s only after I start something—a workout, writing, drawing sketches—then motivation shows up and keeps me going.

Agree to give a talk someplace—even before you know what you’ll present.

More examples: Agree to give a talk someplace—even if you don’t know what you’ll present. Announce you’re going to hold a training session to teach people about one particular industry. Specialize people’s roles so that prospectors prospect, and closers close. Raise sponsorship money for an event or publication that isn’t yet complete. First publish a Kickstarter page, and then raise money through it. To learn a language, buy a one-way ticket to that country. To limit your smartphone use, switch to a dumb/flip phone.

In Review Pick a date (often two to three weeks out, unless it’s a big thing). Choose what’s going to happen on that date. Tell other people about it!

To accomplish anything in work or life, you need to know how to sell.

What’s one thing people like Gandhi, Mother Theresa, Elon Musk, and Richard Branson have in common? They are examples of people who are superb at selling.

Your primary goal should not be to close a deal, but to help your “customers” solve problems and realize success.

The best kinds of sales are when both parties win. You make money, they get a problem solved, and you both feel good about it. So, here’s an alternative ABC if you’re new to selling: Ask questions: Listen more than you talk. Insightful questions make it easy to have conversations with customers or prospects, learn about their problems, and know what solution will help them best. People won’t be ready to listen to you until after you’ve listened to them. Be honest: About why you’re doing this, and what your personal story is. In being curious about them, their situation, and what they care about. What you’re passionate about. Why you think they should or should not do this. That you’re new and don’t know the answers, but that you know where to get them. Customer success: If you stay focused on what will help your customers succeed, you can’t go wrong. That doesn’t mean only selling them on what they ask for—because people don’t always know what they need. Become an expert in what you do, and you will guide people in helping decide what’s best for them. Through experience, you’ll learn how to challenge people to get out of their comfort zone, to make a decision and move forward—even when at first they’re uncertain or resistant.

But, you’re not sure how to take this across the finish line to close it, and get it signed. Let’s help you: Figure out the roadmap of steps it’s going to take to close the deal. Discover major red flags and issues that will slow it or sabotage it, while ensuring it’s a good fit. Educate your prospect through all the steps he or she will have to take to make the deal happen. Help your prospect imagine and visualize a future where he or she has become a customer of your idea, product, or project. Uncover whether there is no real “buying intent” (are they honestly serious?).

How? Simply ask this question: “Dear [executive/investor/potential customer]: Now that you know what I’m doing and I’ve answered all your questions, it seems we’re a good fit. Would you agree? And if so, what are all the steps we have to take to help make this happen?” Then shut up and listen. If the prospect says something to the effect of, “Well, I’m not sure …” or, “Well, we can’t buy for three years because we’re locked in the current contract …” then, you’re in trouble. This means they’re not serious about buying. Walk away. Then retool the product, or try a different customer. A serious buyer will work with you to figure out a way around their roadblocks.

Fulfillment comes from applying your “full self.” Are you treating work as something completely separate from life? Or is life interfering with your work? Combine them to make the most of both. Work can enhance life, and life can enhance work.

Here’s one test you can run to see if someone’s using “meaning” as an excuse to stay comfortable and avoid growing. Imagine one of your friends, for example, one who means well and wants to help people but who pretty much just shares inspirational quotes all day or posts pictures of himself or herself being spiritual or edgy. Maybe they volunteer weekly or monthly. Now imagine this friend saying, “I’m going to create a $1 million organization to help/fix/address [insert cause].” Can you see that person—or maybe it’s you!—actually doing it? Can you see them walking the walk, jumping in and embracing the idea of putting money as a top priority, a necessity to support the mission? (Assuming integrity is a given.) It’s easier to hide and pretend that the “money stuff” (or whatever else you need to change) isn’t important. No guts, no glory—and no risk of failing. Breakthroughs often require you to let go of your ego, and egos can be harder to break down than bad habits. Pride often interferes with taking the leap to grow.

Breakthroughs often require you to let go of your ego, and egos can be harder to break down than bad habits.

This is why successful entrepreneurs care more about the brutal truth than about being right or looking good. They take responsibility for results, not intentions. It boils down to this: “Is this working? If the answer is yes—great, do more. Is the answer no? Then don’t blame other people; instead, ask what can I do, what needs to happen, to fix it?”

Use crises to motivate you to embrace the change, as painful as it may be, rather than avoid it. And if you don’t have a crisis, get creative with manufacturing one with Forcing Functions that drive you to grow anyway.

Don’t assume that meaning will only come only from quitting your job and finding some exotic new occupation.

There’s nothing wrong with those goals, but start by finding more meaning in the little things you already do every day: talking with a customer, giving someone a helpful idea, writing something (whether anyone else cares or not). Getting feedback from a coworker. Getting coffee with a teammate. Fixing a bug. Coding a new feature. Learning how to better organize your workspace. Talking with an angry customer and saving the relationship. Breaking through a creative block. Or just breaking something. Getting your reports and dashboards to finally work. Learning from a spectacular failure. Finishing your daily sales or activities goal.

Discover what makes you different, learn how to express (market) it, and apply it in a way that solves others’ problems.

A great brand (personal or business) repels as much as it attracts. Because it stands for something. And when you stand for something, no matter what it is, many others are bound to disagree.

Instead of thinking about all the stuff you could or should do, what do you want to do?

Once you ask the question, “What is my Unique Genius?” your mind will begin trying to answer it. What do you want to learn about, if you could learn about anything? List at least 10 things, and then pick the top few. Imagine having more money than you could ever spend, so you don’t need to work. You take a few years to lie on the beach, and then get bored. What would you want to do, if you could do anything? (This is usually something that helps others or that makes a difference in the world.) Ask coworkers or customers the question, “What’s the one thing you hired me for, or would hire me for?” Complete this: “If I could help anyone/any kind of person, I would help …” Or, “If I could have any kind of customer, I would have …” If you could start a project that wouldn’t fail, that is assured of success, what would it do? Who would it help? What about it would make you proud? Who are you jealous of, and why? What would you have to learn, do, or have in order to not be jealous of them anymore? What have you been the most successful at so far? What frustrates you that you would like to personally help fix in the world? Especially something that you deal with personally or daily. What parts of work do you enjoy most? What daily activities do you like to do? What do people keep coming to you for help with, to ask your advice on? What do you secretly love to do, or love about yourself? If you’re in a bookstore, what section do you go to first? What’s your ideal book to read (or write)? What if you stick only to the business section? What would it take to make your work so enjoyable that you’d do it for free? What do your friends see as your strengths? Apply these questions to your job today: What do you like, and not like, about your job today? Your company? How can you increase what you like, and reduce what you don’t? Is your manager or work environment irretrievably toxic? If not, what needs to happen to improve it? How can you kick that process off? With what you want to learn, how can you make it relevant to your work? For example: If you want to get paid to speak, or inspire people through speaking, how can you begin doing it for your job? If you want to help kids, also try imagining those kids as grownups who you work with in some way today … How would you help them as adults? If you want to change the world or people, how can you make the same change happen in your team, business, or market?

Pretending you or your team don’t have kids, aren’t exhausted or sick, or that “everything’s fine” doesn’t make it true. Everyone at some point ends up living with challenges they can’t just simply sweep under the rug.

When people are honest with each other, a solution can be found to help everyone win.

If you show people how to be honest with personal challenges, and not feel judged or punished, it lightens the situation.

You don’t—and shouldn’t—share everything. Some things should remain private.

Just because you have a tough or horrible challenge doesn’t mean you have to give up on your goals

Parent guilt. Every parent feels this, and I’m no exception. Just one example: as much time as I spend with the family, frequently I feel guilty about not being there even more. Especially when I travel. But when I (or you) need to work to pay the bills or create financial stability for my family, work is family time. You gotta pay the bills.

When you’re pursuing anything vitally important to you, figure it out by embracing the challenge—and uncertainty— rather than avoiding it.