About Office Hours
An invite-only series that connects OpCo founders and CEOs with leaders in our Operator LP community on key operating issues critical to success. These candid, interactive conversations surface best practices, how to avoid potential pitfalls, and compelling “how we did that” stories from the trenches that range from strategies to tactics.
Our Operator LP Hosts
Dini Mehta, former CRO of Lattice who scaled the sales organization from 7 to 120 employees with almost no attrition while building revenue from $5M to $100M+ in less than 4 years.
Jeanne DeWitt Grosser joined Stripe in 2016 and built out the sales org from 10 to 400 as the Head of Americas Revenue & Growth and is now Global Head Partnerships.
You’ve got a sales goal. Now what?
Build out your operating model in “excruciating detail”:
Step 1 - Quantitative: break down your topline number and do the math on how to get there.
- Break down the funnel from top to bottom, and bottoms up, of what it’s going to take to get your revenue from point A to point B
- Start with segmentation and outline what you need:
- The number of leads and opportunities
- Conversion rates across the funnel
- Average deal size
- Average win rate
- Capacity: the number of reps, the quota they’re carrying today, and how much is ramped vs unramped
- Break it down by channel based on your segmentation
- Outline what parts of the business are repeatable and what’s working
- Know where you’re putting your mini-bets
- Depending on your sales motions, bottoms-up planning looking at each region, manager, and rep may be equally important to analyze and break out.
- Goal: have three plans for conservative, mid-level, and optimistic models
- Articulate your assumptions: Work with your team to analyze the assumptions you’re making and flag those that are riskier vs conservative early on - are there dependencies on big product launches? Aiming to move upmarket? Process overhauls? Market risks?
- Use your operating model to diagnose what’s happening if your revenue outcomes don’t materialize – was an assumption just wrong, or did something that used to be predictable about your sales funnel start to change?
- Be aggressive in planning but agile in execution.
Step 2 - Qualitative: turn your operational plan into an execution playbook, and get buy-in from the team by communicating transparently. The guidelines of how to operate in the year are often what leaders miss.
- Show the topline plans, and which one you’re going to execute against. Be forthcoming about how often you’ll get together to review and adjust. Reset quarterly.
- Set expectations with your team about what the assumptions are and where there are risks.
- Things are constantly changing and overcommunication is key. As a leader you need to be optimistic and confident in the long-term and realistic in the short-term.
On hiring in this uncertain environment:
Explain the how of the execution playbook and the guidelines that drive hiring decisions. Go slow to go fast.
- Sequence: analyze marketing dollars and BDR capacity before adding AE capacity
- Hire the same way you build your funnel. To hit your Q1 revenue goal, you needed to start spending your marketing budget in Q3-Q4 of last year. Same goes for hiring, stage it to hit your goals in advance.
- Pay attention to leading indicators and the bottom of the funnel - resource utilization. There’s no point in constantly bringing in AEs if you’re not going to have them appropriately fed, it’s just expensive and they’ll churn.
- Make sure your recruiting team is talking to the market, building relationships, keeping people warm so if you are feeling confident you can execute hires in a few weeks vs multiple months.
- Revenue leaders can also share how they judge their own performance - ex: 80% of the team getting to 90% attainment. If you’re not hitting that, then you shouldn’t be hiring more people.
- Not adding management and infrastructure capacity is a classic trap. If you put all your dollars into capacity hiring, and you don’t have the enablement, operations and management in place, scale will stall. You need to ramp your reps to make them productive and successful.
- Start reps in classes so you build cohorts out of the gate.
- Consider career tracks and what percentage of hires are internal promos vs external hires.
- Start segmenting when reps are running into each other, when the lead mix changes, and, if the sales cycle is fast, do it often to make working together for the health of the business part of the culture.
A few more from our Q&A:
On PLG vs Sales Motions
- Self-serve for SMB should be your primary route to market if you want to be efficient. If you can’t get that going, it probably says something about your product-market fit.
- Companies that don’t do enough to instrument their PLG motion will stall at some point and not get the right insights.
- Determine how to get PQLs into one of three buckets - the ones who will never convert no matter what, the ones who will convert no matter what, and the ones who signal interest but are unlikely to convert on their own.
- Consider how to best structure PLG across product, marketing, data science, and also sales - specifically where you’re getting insights around customer UX and friction points.
It’s time to bring in account managers. How to do it without making it feel like you’re taking opportunity away:
- Double pay in the first couple of quarters can help to smooth the transition.
- Culture is crucial. If you have an abundance mindset and have set the foundation that you’re all in it together, then it’s clear you’re building a bigger pie in the long term. You’re putting the company first.
So… can a sales org function remotely?
- It’s hard. Remote BDRs can be grouped together in a satellite office, but you ideally want them to hear each other on calls, have a manager there coaching, and for them to build camaraderie, resilience, and culture.
- Having some flexibility can make it easier to hire and transition post-COVID. Once a week on the same day, or 2-3.
- Set the expectation at the time of hire - it won’t be for everyone.
- In-house BDRs vs external: while some external can be successful, you really build a culture and can scale with internal BDR teams.
How can you set up the process to land mission-critical roles, c-suite hires that you need to get right?
- Many executives look good on paper and end up being the wrong hire. Hire an executive whose current scope is where your company will be in two years - not ten.
- Get in front of top operators who would be well-suited for your company and engage in formal advisory roles to build relationships and understand working patterns early on.
- Spend non-work time with operators to get to know them as humans: go out to meals or go for walks to help you both understand how the other ticks.
- Recruiting can start years in advance - it’s like a marriage. At the same time, remember that for some roles the typical tenure is 2-4 years, so it’s important to know what you need now and next.