B2B Companies and Sales-Led GTM Teams⎪Predictable Revenue

Structuring your sales-led GTM organization is vital if you want the team to achieve the desired results. When it comes to getting it right, who you hire and when are the two most important elements to consider. Paul Fifield is an entrepreneur with 18 years of experience in founding and scaling global companies. He’s the CEO of Sales Impact Academy and over the last 7 years, he has grown two international technology businesses from $0 to $70M in combined sales as CRO and $100s of millions in value. At Sales Impact Academy, he leads a talented team, revolutionizing the way B2B tech companies approach skills development making it an integral part of their GTM stack. He joined us on the Predictable Revenue Podcast to share his insights on how to build and scale a sales-led GTM motion from the ground up.

In Paul’s experience, so many companies make disastrous mistakes in building their GTM teams. The consequences of these mistakes are devastating, not only in terms of capital burned, but in terms of the time that’s wasted – sometimes years – getting things wrong.

FROM THE TOP

The most dangerous mistakes, in Paul’s experience, happen in the earliest stages of a company’s growth. Once a company gets past $1m ARR, it is typically robust enough to handle a few mistakes, but in the $0-1m range, it is as fragile as a flower in a desert. Some estimates put new product failure rates at 80% (LinkedIn). That being the case, choosing your steps wisely at this stage is of utmost importance.

The most common mistakes Paul sees are made by technical founders with an aversion to sales. Most tech-focused companies have a technical founder or founders. These personas are often introverted and the very thought of sales makes them sweat. As a result, they try to hire their way out of the problem as quickly as they can so they can push sales off onto someone else.

Makes perfect sense, right? Wrong.

Accordingly to Paul, early-stage customers buy into the same thing early-stage VCs buy into: the individual. At an early stage, when there isn’t much more than a minimum viable product, it’s the founder’s passion, zeal, and ardor that are so electric. You can’t instill that dedication and excitement that made you quit your job and risk it all in a salesperson. Furthermore – most founders don’t even understand what type of salesperson they need at this stage. Consequently, a lot of them resort to hiring VPs of Sales with the expectation that they will know what to do.

You, the founder, are the most invaluable sales asset in the company. Even if you don’t feel confident in a sales role, your early customers will feel your enthusiasm and it will be contagious.

FIRST HIRE & THE EARLY TEAM

When the time comes to make your first sales hire, it shouldn’t be a VP of Sales. It should be an SDR, Paul argues. The process of building pipeline requires both time and focus. Context switching between any role and prospecting is difficult (think full-cycle salesperson), especially if you’re the CEO trying to manage people and build a product. So, you want to hire someone to do the prospecting for you.

Another argument for hiring an SDR first is to start to find product-market fit. Trying to get your first customers through cold outbound will force you to pay attention to your messaging and refine your ideal customer profile. Then, if you can get 11 customers through cold outbound, you know that you’re really solving a problem that your buyers want solved. If you’re generating your first customers through warm introductions via VCs, friends, family, and colleagues, it’s too easy, and you’ll experience a sharp drop in pipeline when these introductions inevitably dwindle.

But if you’re not an experienced seller yourself, how can you support SDRs and enable them with everything they need to be successful? You can work with a consultant who has been an SDR leader to act as a fractional SDR manager, you can join networking communities to find great resources, or you can buy a subscription to Sales Impact Academy for your SDR.

The classic mistake Paul sees from companies who build their outbound team first is not starting to build the complimentary marketing engine early enough. Founders invest time and energy into getting their SDR/AE motion producing predictably and then, once it is, they think, “it would be nice to have some inbound leads.” It takes 6-9 months to get an inbound engine producing repeatable leads, so you should be building that function early on in your growth.

Next, you can hire 2 AEs. “It’s tough to know what good looks like if it’s just one,” as Paul says, so hire 2. Even with these AEs in the seat, up until around your 30th customer, you (the founder/CEO) should still be selling. Those AEs are here to give you leverage. They should be on calls with you, doing follow-up, managing the CRM, essentially carrying the bag for you while you do discovery, demos, and get sales through to close. There is a lot to teach these AEs, and since you don’t have a sales enablement function at this point, you’re the one who’s responsible for that. And the best way for them to learn is by doing. This is how you’ll ramp those AEs, and eventually, they can start to run their own sales cycles. But, as a founder, the less capital you have, the closer you have to stay to sales.

When you’ve hired your 2 AEs, you’ll need to hire another SDR so you’ve got a 1:1 SDR to AE ratio. You can buddy these SDRs up with their AE or have them pass on opportunities round robin.

On the marketing team, you’ll need to hire a multi-skilled marketing executive and a content manager. You’ll also need to get a revenue operations person in as quickly as possible. They can even start on a fractional basis, just 1 or 2 days a week, but getting them in the seat is vital to preventing a mess later on. Sales Impact Academy managed with a revops person working just 2 days a week until they reached $3m ARR.

As much as you want to find product-market fit, bring on new customers, and learn from them at this stage, you need to make sure that customers you have brought in are getting value. If they’re all churning at or before the end of their contracts, it will be very difficult to raise your next round or grow at all. This customer success person shouldn’t be concerned about cross-sells, upsells, or anything other than success.

This team will propel you to $1m+ ARR.

THE NEXT PHASE

You’re around the $1m ARR mark. You have 30-50 customers. You have some repeatability, you’ve identified your key metrics thanks to your revops person giving you visibility into your meetings booked and attended, SQOs, and conversion rates to customers. Your customers aren’t churning, things are becoming more predictable, and you’re ready to trigger your series A. From here through the $5m ARR mark is the time to hire your VPs of Sales, Marketing, Partnerships, and Customer Success, and a full-time revops or bizops person. Finally, as a founder, you can step back and start to let them run the show.

It’s too early for a CRO. According to Paul, your VP Sales should be a functional, in the weeds type of sales leader. They will be involved in early deals, but they shouldn’t have a quota. Their focus should be on building the team and getting top performance of the existing players. This person should improve your sales cycle and deal stages, professionalize your presentations, upskill the team, and refine your ICP.

Now that you’re really starting to scale, some of your customer success metrics get much more important, hence the need to hire that VP. Onboarding, as one of the determinants of customer success, needs to become its own, unique function. Happy customers will churn, successful customers won’t. So focus your onboarding team on standardizing the onboarding process then shortening the time to value for your customers, figuring out what ROIs they care about, and setting them up for success.

Early on in your growth, net dollar retention is important in that you don’t want to lose them, but now you need to make sure it’s at 100%. NDR is everything. Having an NDR of 100% or is the only way you can hope to attract investors who will give you a great premium. So, how do you get NDR? By growing your revenue from your existing customer base. First, you need to make sure you have a scalable pricing model. Then, you need to cross-sell and upsell. For that, you need an account management function.

Another mistake Paul sees is the conflation of the customer success and account management roles. The second mistake, when companies do understand that cross-sells and upsells shouldn’t belong to customer success, is sending those opportunities back to the AEs. A piece of new business from an existing customer is a completely different motion from net new business. Tasking AEs with handling this will both mess up their metrics and take their time away from generating net new customers (which should be their sole focus). To this end, companies need a specific account management function. The account management team can report to the VP Sales, but customer success should report to their own VP.

$10M & ONWARD

As you hit $10m ARR, you need to build your c-suite. Sales, marketing, partnerships, and account management can roll up to your CRO. There should be a separate c-level leader, the Chief of Customers, that takes on customer success and onboarding. Dan Steinman, author of Customer Success: How Innovative Companies Are Reducing Churn and Growing Recurring Revenue advocates for customer success having its own executive rather than reporting to the CRO. The reason is twofold. First, as a CEO, you want to be close to your customers. You don’t want a CRO reporting to you, a VP customer success reporting to them, and your customers below that. You want a direct line into the customer success function. Secondly, you want your revenue leader and customer success leaders to be peers. Imagine a scenario where your sales team is losing discipline around ICP and is closing bad customers who won’t get good time to value and will churn early. Or, maybe the sales team isn’t doing a good job of setting realistic expectations and customers are shocked and unhappy when they go through onboarding. If your customer success leader is reporting into the CRO, there won’t be much motivation to address the issue. If the CCO brings it to the CRO, however, they will have to come up with a solution together.

Your VPs should move up into your c-level roles. Too often, Paul sees that companies hit $10m in revenue and they bring in the “grown-ups” – usually middle-aged, greying men who have done the job before. The VPs get let go for no reason other than that they haven’t taken a company from $10-100m. If you go about it like that, you will ruin your company culture and breed resentment in your employees. That said, the jump between a VP and the c-suite is a big one. You can no longer take care of the day-to-day because you’re too busy with strategy. As a result, great c-suites need to be confident enough to hire people better than them in specific areas.

THE WHOLE FACTORY LINE

The engine you’ve now set up, as Paul so aptly puts it, is “pretty epic.”

SALES IMPACT ACADEMY

Paul asserts that “in the most shocking educational travesty of the last 50 years, sales wasn’t taught at school” – even though it’s now a major profession. Compounding this issue is the fact that sales is becoming infinitely more complex. Even what we’ve explained in this blog post, the roadmap for putting together a GTM organization that works, is like brain surgery. There’s a growing demand for GTM talent, and Sales Impact Academy has instructors and curriculums to teach them. They have live classes for SDRs, AEs, CS reps, leadership, and will soon be building out revops school as well. They have 200 customers including Gong and Outreach, 6k learners on the platform, and they’re growing like mad. They’re backed by stage 2 capital, and Mark Roberge is on the board. You can learn more at salesimpact.io.

CONCLUSION:

Building a GTM organization required incredible timing and precision. As a founder/CEO, you need to know who to hire in exactly what order, which roles should report to which leaders, when you should be taking the reins, and when you should handing them over to someone else. It’s a difficult thing to get right on the first try, but thankfully Paul Fifield has 18 years of experience (and mistakes) that he can pass along to help other companies build their sales-led GTM teams without a hitch.

EDITOR’S NOTE:

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