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ZT20 #001: The Number One Reason Founders Fail to Evolve from Founder-led Sales

saas sales startups venture capital Nov 22, 2022

I have been growing revenue from $0 to $20M+ in enterprise B2B SaaS startups for over 20 years.

Over the years, I have learned that most founders who want to achieve fast ARR growth end up failing because they're unable to truly abstract themselves from the sales process.

They think that because they were able to sell the first 10 deals whilst juggling 15 other responsibilities, someone new coming in and focusing "just" on sales should do at least as good a job as they did. They never realised that taking the knowledge out of their head and documenting it in a way easily consumable by a 3rd party was actually a significant barrier to success.

 

Learning the Hard Way

 

To be honest, it took me quite a while to learn this lesson too, but instead, initially, I just got good at taking what was in the founder's head and documenting it in a way that was easy for my future sales teams to navigate and sell solo of me or the founder.

In fact, if my first career was as a top B2B enterprise SaaS account executive, my second career was definitely as a "complex knowledge extractor" but titled as VP of Sales and latterly as Chief Revenue Officer.

 

Pillars of Success

 

Extracting that knowledge and then executing on it was complex but it was built on a few key pillars, that I think all founders should take note of:

 

#1 Documentation: I was and remain a stickler for documentation. I'm the guy that writes everything down, records each conversation and replays the recording at no more than 1.2x speed adjusting and adapting my notes as I go.

It still amazes me today how many founders I speak with who are at $5m+ ARR who can't succinctly describe to me their ICP - and it's because they have never written it down, but now they have a team of sales reps who are essentially spraying and praying

 

#2 SaaS Metrics: These are high-pressured environments, and it's easy for gut feel and opinion to rule the roost, but you have to find a way to see through the noise. Early in my leadership career I was fortunate enough to have access to VC firms like Index Ventures, and Accel Partners who helped me understand the sheer beauty of SaaS metrics.

In the world of fast-growth chaos that is fast-growth B2B SaaS, I have always found core SaaS metrics to be a safe haven, devoid of noise and chaos. A shelter from the storm. A place I could hunker down and focus and make crystal clear decisions about where the biggest opportunities lay.

 

#3 ICP (Ideal Customer Profile) Alignment:

Me to Founder: "Talk me through a prospect that to the untrained eye looks like an ideal customer, but actually is not."

Founder: "Errrr, we go after everything we can get, and try to make it work."

This lack of focus is commonplace amongst early-stage startups. The fight for survival means they give up nothing easily, it's a survival instinct. However, now they've built some muscle, in order for them to thrive they need to learn to give up the scraps and go for the meatier catches because that's how they'll thrive beyond the nest.

The only way for them to do that is to focus on a specific profile of customer. This takes courage from a founder, but their fears can be quelled by doing things like a cohort analysis on the SaaS metrics of their customer base, to inform their decision around ICP.

 

To sum up

 

Everything starts with building the documentation muscle. It's not an easy muscle to convince founders to build, and as I said, my second career was largely being that muscle for founders.

Now I have a tried and tested process with frameworks that structure this complex knowledge extraction and test its efficacy in a way that is transparent and makes sense to founders - especially those with engineering and product brains, who like pragmatic structure, and are anxious about all things sales. 

Founders, take one step at a time, starting with documenting your successes and once this muscle is built, good things will flow.

 

You've got this 👊🏼

Wayne

 

 

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