Lessons from scaling 0-1M, 1-10M, and 10-20M+
Author: collin stewart
Nick Casale, a recent guest on the Predictable Revenue Podcast, helped to scale Sendoso from a four-person pipe dream to the leading tech platform it is today. Over the past four years, Nick discovered that there were three distinct chapters in Sendoso’s growth, each a different strategy, focus, and mindset. Those three chapters are marked by revenue intervals of $0-1m, $1-10m interval, and $10-20m+.
THE FIRST SALES HIRE
Nick was the first sales hire at a company known at the time as Coffee Sender. According to Nick, the company “didn’t look like a whole lot.” It consisted of two founders, a customer success leader, a project manager, and Nick with their desks pushed together in a small shared office space in San Francisco. Nick is the first to admit that they were making it up as they went along.
It was just this “dorm room feeling” that appealed to Nick so much. He had recently left a sales role at Talkdesk and was looking for an opportunity to work on something more foundational, where he could create and build. Serendipitously, one of Sendoso’s founders and a former colleague of Nick’s at Talkdesk was looking to make his first sales hire. It was a perfect fit.
Nick made the perfect candidate for this job because he knew how to sell, but he didn’t have too much experience. He’d been closing for two years at this point, so he knew what he was doing, but he wasn’t attached to any particular methodology or sales process. He didn’t need a rulebook, roadmap, or plan. This is something that Nick agrees is vital in a first sales hire. Having someone entrepreneurial who can adapt and thrive in chaos is far superior to having a seasoned seller with 20 years under their belt working for your biggest competitor. While their experience may come in handy, this type of seller is used to resources that are not available to a first sales hire. Your first sales hire needs to be able to help build the plane as it’s flying.
The first thing Nick was expected to do in this role was close some deals. The founders had already closed about $100k in business, and they were at a crossroads. They didn’t know whether they could keep signing customers up at a predictable rate, or whether it was just “founder dust” that had gotten them this far. Hiring Nick would help them determine if Sendoso was truly scalable.
In hindsight, Nick explains that it’s funny to think of how little they did in terms of putting processes in place at this early stage. While Nick’s calendar was chock-full of sales meetings, he couldn’t waste any time on documentation. But he was learning rapidly by having hundreds of conversations with customers, testing, iterating, and reiterating as he went until he could find the sweet spot and help Sendoso hit its first million.
Just because Nick wasn’t actively working on process creation, however, it doesn’t mean he wasn’t retaining his learnings. He implemented tools like Gong and Scratchpad very early on and was passively leaving himself a trail of virtual breadcrumbs. Though he wasn’t spending much time sifting through the information he was generating at the time, this strategy built the foundation for the sales operations function at Sendoso.
One of the factors that led to Sendoso’s sales team’s early success was hiring another salesperson to join Nick. If one rep is hitting their numbers, it’s hard to say with certainty whether it’s because you have a great product, an easy market, or great sales skills. After two months of Nick selling solo, Sendoso brought in another rep. They were both able to close dozens of deals a month.
Additionally, the fact that the two of them were doing outbound sales from the get-go rather prepared them for when inbound leads would inevitably dry up. They tried all sorts of creative ways to start new conversations with prospects while on a budget. One of these “hacky” strategies involved gathering lists of attendees at conferences the Sendoso team couldn’t afford to attend themselves, emailing them to suggest a meeting at the conference, and emailing them again saying “Shoot, sorry I missed you there! Let’s set up 30 mins on a zoom call.”
The tipping point in Sendoso’s early growth that helped them kick it up a notch was when they quadrupled their pricing. They were closing too many customers for their one-person customer success team to manage, so they decided to focus on providing more resources to fewer customers. After doing so, they were still able to hit their numbers. This was a clear indication that they weren’t just winning deals because these buyers liked the idea of the platform and the price point was low, but because they were delivering real value. It was also a harbinger of imminent growth.
NAIL YOUR NICHE
Before Nick joined Sendoso, its founders had put in considerable time, effort, and research into defining their ICP. They knew their buyer would be marketing leaders, specifically in demand generation, in the b2b tech space. There were many early indications that this was the right ICP, and that was confirmed by the hundreds of positive conversations Nick and his colleague were having on the phone.
When they tried to expand into different markets, however, things got more difficult than Nick expected. While there are many industries where marketing leaders experience similar challenges to those in the b2b tech industry, each of them has its own language, nuances, tools, and processes. Knowing their pain only takes you 80% of the way there. For an early-stage company like Sendoso, investing in creating case studies, presentations, decks, and integrations for companies in different markets didn’t make fiscal sense. So, they quickly refocused on the b2b tech industry.
Whatever you did that got you from $0-1m, Nick maintains, is not going to get you from $1-10m. For Sendoso, $1m was 1-2 reps closing deals for just under a year. $10m would be 10 reps closing $1m in just under a year. They had proven that their product was valuable and could be sold to a defined market, and 2 reps were hitting their numbers. But that didn’t mean that they could ramp 8 additional AEs in one go. This is a mistake that Nick sees a lot of companies make. You need to add reps based on data and educated assumptions, and you need to add them gradually as you prove the model. That way you can course-correct and pivot as you go.
The interval at which you onboard each new sales rep will depend on your sales cycle. Start with your assumptions about how a rep should ramp. If a month, two months in they are ramping as expected, add another rep and assess again. You also need to take a hard look at lead flow. Inbound is drying up, so what other channels can you lean into? Demand generation, marketing, field events? Take a look at how many SDRs you need per AE (Sendoso has a 3:2 ratio) if you’re doing outbound sales development. Adding more closing sales reps does not equal more revenue.
At the same time as you begin to scale the sales team, you need to make your first sales operations hire. You need to get this done early because no sales leader wants to manage a salesforce of 10 rogue reps who don’t have systems in place. A sales operations leader will help you establish the processes you need to scale and to track things as they scale.
As for sales enablement, it’s okay if you don’t get this set up right away. In any startup, there are going to be parts of your GTM organization that, as Nick puts it, “are ahead of your pace car and stuff that is behind and trailing.” Once you do have the enablement function in place, though, be careful not to use it as an excuse for missing revenue targets. Enablement can make a huge impact, like cutting rep ramp time by 20-30%, but if your reps are missing quota by 50-80%, enablement won’t help.
The biggest change Sendoso made when crossing the $10m mark was letting go of the “we’ll figure it out as we go” mentality that had gotten them this far. From this point forward, they would take a more mature approach to scaling. Nick and his colleagues knew they could no longer piece things together, they needed a real plan. They needed to understand and use all the data they were creating, they needed to set expectations, and they needed to standardize.
Up until this point, each of the sales reps on Nick’s team were doing their own thing to a certain extent. They had to learn on the fly by picking up what they overheard other reps doing, and make it their own. Nick likens it to putting a sales process in a jar and allowing it to grow naturally and organically. But, to move forward, the Sendoso sales organization now had to take a deep dive into their processes to decide what to carry forward, improve, and scale; what to leave behind; and what habits to build. This is the time for a company to agree on a unified sales methodology so that every rep, whether that’s 10 or 100 reps, can follow it to a tee. They have a playbook to execute, and you can plug new reps in at any point and have a high degree of confidence that they will be successful.
In this phase of your company’s growth, you’ll be moving at such breakneck speed that if you don’t have a concrete process and alignment, things will break. It’s time to remove the duct tape and replace it with forged steel.
A huge part of successful scaling is being able to forecast accurately. There are two methods of forecasting that Nick followed throughout Sendoso’s journey. The first is a top-down forecast owned by sales operations. Sales ops takes an objective, data-based look at the last four quarters to assign a confidence level to opportunities at different pipeline stages (how likely they are to close). Next, they determine how many opportunities your sales reps need in each stage in order to hit their numbers in quarter.
The second is a bottom-up forecast. This is more intuitive and subjective. It involves sales managers talking to their reps about their opportunities in the pipeline and asking how likely they are to close, when they will close, why they will close, or what needs to be done in order to close. Each sales rep will share that they commit to closing x amount of deals, they will probably close y amount of deals, and they could hit z amount of deals. From there, each sales manager takes a per-rep high, medium, and low estimate and comes up with their forecast.
The two teams then compare forecasts and, ideally, what the data indicates and what the sales managers are saying come very close to one another. If those numbers are wildly different, that is a red flag suggesting that you need to look elsewhere in the sales process to figure out what’s going wrong. The key idea with these two forecasts is that you don’t rely too heavily on one or the other, but rely on both to give you the most accurate and holistic forecast.
SENDOSO’S SALES ORG TODAY
Here’s a snapshot of Sendoso’s sales org today.
On the new business sales team there are 28 sellers across the smb, commercial, and enterprise segments. There are 25 outbound SDRs with three leaders. There are more than 60 people in the customer success org. Including the sales optimization team, enablement team, and other supporting functions, the org now totals at approximately 250 employees.
Sendoso started as a scrappy little business offering a big, innovative solution. For the first million dollars in growth, they flew by the seat of their pants; learning from hundreds of customer conversations, adjusting pricing, interacting pitches and messaging. For the next 10 million, they doubled down on outbound by slowly adding headcount to the sales team and built the foundation for their future process by creating a data-driven sales ops function. Finally, as they skyrocketed past $10m, they let go of the hacky, piecemeal approaches that had gotten them this far and implemented cold, hard, scalable, repeatable processes to turn the organization into a well-oiled machine. Sendoso is a shining example of a company that got scaling right.
More on taking a controlled approach to scaling: Re-establishing growth: when to scale, and how fast?
And how sales operations or revenue operations will help you get there: Why Revenue Operations is a Critical Piece to Your Growing Sales Org
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