The Leadership Style That Gets You Here Won't Get You There

IN the early stage of an enterprise software startup, the founder is often the best - and main - salesperson. And that makes sense – founders have the deep product knowledge, intuitive understanding of the market, and heartfelt enthusiasm to win over customers, even when they thought ‘sales’ wasn’t really their thing. But if you want to scale up, at some point founder-led sales are going to hit a ceiling, and founders have to work out how to transition to a different model.

This can be difficult: Intuition, improvisation, and sheer force of character often work to get deals over the line when a founder is the one working with the customer, but it is very hard to recreate once they pass the torch.

The foundational principle of my go-to-market framework – which I detail in my new book, Built to Grow: A Handbook for High-Performance Sales Teams – is that every startup passes through three distinct phases on the road to success.

First, you experiment with the tactics that will form the bedrock of your business. Second, you build systems and processes that create a repeatable and sustainable business. And then you scale everything: you hit the gas pedal and accelerate, investing heavily to drive growth.

When it comes to sales, founders and CEOs play a different role and must have different priorities in each of these phases. The approach that gets a business going isn't the same one that will get it to $100m in sales. Here's the roadmap founders need to follow.

Experiment

At this stage, no one knows better than the founder how to sell the product. The imperative during the early stages of building a go-to-market strategy is for founders to think very hard about how they can replicate themselves. The best way to do this has two components:

First, founders should experiment with, identify, and document their ‘repeatable sales motion’: the winning strategies and tactics that have enabled them to successfully sell in the early days.

In parallel, they should bring their first two or three ‘trailblazer’ sales hires on board who can experiment with them, and work out how to evolve their more improvised sales approach into this repeatable sales motion. Some of the important questions to ask here are: “Who is my ideal customer and where do I find them? What are their pain points and how do I communicate with them? And how do I best support their buyer’s journey, step-by-step, and close a sale with them? Writing all this down will create the company’s first brief sales playbook–a cornerstone of a startups GTM strategy.

During this early, experimental phase, founders are going to stay very involved with sales, alongside those key trailblazer hires. Once they have all this formally documented in their first, albeit brief, sales playbook, and 2 or 3 non-founder salespeople hitting quota, they graduate from ‘Experiment’ to ‘Build.’

Build

During the build phase - going from 3 to 8 or 9 salespeople - the founder or CEO’s goal is to pressure-test their repeatable sales motion and to prove that non-trailblazer salespeople can use the newly written playbook to successfully sell the product. They also lay the foundation for sustainable growth and operational excellence. This means establishing best practices for revenue management – which comprises opportunity management, pipeline management, and forecasting.

At the same time, you keep expanding the sales playbook - and if the newly hired salespeople are struggling to hit quota, you need to debug your approach. Are you not targeting the right type of customer? Is your messaging, pricing, or packaging wrong? Or maybe you haven’t hired the right profile of salespeople, or not trained them well enough?

The only way to grow sustainably is to keep refining the playbook until you prove that all non-trailblazer salespeople can use it to successfully sell and hit quota. This will allow you to transform sales into a disciplined function rather than an improvised and inconsistent art form. What you want to avoid at all costs is one day in the future having 30 salespeople who are each experimenting in their own way, doing their own thing, and thus making quarterly sales targets a gamble.

Founders are still pretty involved at this stage, but a big part of the build phase is preparing to be more hands-off later – establishing a dedicated head of sales and a fairly senior sales operations leader. Both of them will also continue to help select and integrate the right AI-supported sales tools for the growing sales team.

There's a balancing act here: founders want to hand over day-to-day management of the sales function, but remain close to their customer and their newly hired sales leader to understand if they have hired the right person for the job.

When the company has seven or eight dedicated salespeople that are able to use the sales playbook to reliably hit quota, it is ready for the next step.

Scale

This is the big one. If you have 7 or 8 salespeople reliably hitting quota, you are likely on to something, and it’s time to invest and take the market. In Scale, you're building from eight to 100 or more salespeople, and an $80m or $120m company has to be run differently from a $20m one. Everything changes in this phase, and sales productivity and efficiency become the name of the game. Think about it: If you have 80 salespeople, it makes a huge difference if each salesperson has 3 customer meetings per day versus 6 customer meetings per day.

The founder or CEO really can't be involved in the day-to-day management of the sales team at this stage. Now, they must rely on their sales leadership, specialized sales teams, and distinct customer success, sales enablement, and operations functions. That said, the founder still needs to understand enough about how a well-run revenue organization should function. As a founder or CEO you don’t want to be left surprised when your sales leader isn’t hitting their revenue targets until the end of the quarter, when it’s too late to take action.

A big failure mode for startups is being too slow to mature their management style and capacity at this stage, so founders need to be very clear-eyed about their management team. As they scale, they need to make sure they have enough executive horsepower in each of their functions and hire accordingly. Founders need to be intentional about building the right management team to have by their side for the crucial and intense years to come. For many, this is the time when founders have no choice but to significantly upgrade their go-to-market leadership. In parallel, founders should place extra focus on protecting the customer experience, which is one of the first things lost when a company suddenly starts to grow very quickly.

Getting a startup on track for a successful IPO or acquisition–or to become a large, independent private company–can be a long and difficult journey. But with the right go-to-market strategy, a successful pivot from founder-led sales to a repeatable, playbook-based sales motion, and a conscious focus on revenue fundamentals, startups can give themselves the best possible chance of reaching take-off velocity.

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Stephanie Friedman is an angel investor and adviser to startup founders. Built to Grow: A Handbook for High-Performance Sales Teams will be published by Stripe Press on October 13.

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Posted by Michael McKinney at 12:27 PM
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