Only a fraction of tech startups reach the milestone of 10 million$ in annual revenue. Even the most successful ones can experience B2B SaaS scaleup GTM challenges that can undermine the growth potential towards the next milestone of 20-30 million in ARR.
I’ve learned from experience that companies can grow fast up to 5-10M and they still can miss basic GTM fundamentals.
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Overcoming such gaps when the size and the complexity of the business have grown substantially, can be painful and put future growth at risk.
The harsh reality is that building and maintaining healthy go-to-market pillars is a never ending job.
How should you detect signals and issues as soon as possible, especially when you have been successful so far?
How should you overcome them?
The status quo of Cloud Academy inc.
Stefano Bellasio, co-founder and CEO of Cloud Academy got in touch with me me towards the end of 2020.
Cloud Academy is a San Francisco based Enterprise SaaS company. Stefano and his Board sold the company to QA some months before we met each other for the first time. QA is owned by Private Equity firm CVC Capital Partners.
Stefano reached out because he had been intrigued by some of my blog articles. My content resonated with some business “anxieties” he was experiencing.
Cloud Academy was at around 15M$ in bookings (12M in ARR).
It was growing 50% yr on yr with more than 90% of revenue coming from US.
Average deal sizes were growing, towards 6 digits.
They had great logos including a few multi-million contracts.
A solid SaaS business!
Why the CEO got in touch – SaaS scaleup GTM challenges
The targets for the 3-year earn out period were ambitious: growing the ARR up to 30M$.
The CEO was concerned because he was experiencing typical B2B SaaS scaleup GTM challenges.
He was seeing signs of growth slowdown that could put at risk the earn-out potential.
Pipeline was lower than expected.
Closing rates were going down
The CEO was not happy with the quality of the sales review meetings and the forecasts produced by the sales team.
He had recently let the VP of Sales go.
The diagnosis of the CEO tended to point out to the capabilities and performance of the sales leaders and individual contributors.
Sometime what we believe to be the cause, in reality it’s a symptom or at least just a part of the reason why something is not working as we wished
We ended up working hand-in-hand for more than a year, week after week.
We re-built some key GTM fundamentals that finally helped Cloud Academy get back on the track towards the milestone of 30M$ in ARR.
Which issues and challenges did we fix? – The “postures”
After a few weeks of discovery and audit/diagnosis we agreed to focus on a few areas of work.
Tackling low pipeline generation was a critical SaaS scaleup GTM challenge
Why wasn’t the sales team generating enough pipeline?
The company had grown so far primarily through an inbound engine.
Looking at numbers, it was clear that an inbound-only motion was not enough anymore to get to 30M.
On top of the historical inbound motion, the business needed a more sophisticated approach to Strategic Account Prospecting and Development.
AE agendas was not that busy
During the sales team weekly meetings (one2one and one2many) the focus was only on the current pipeline.
There was no space in the weekly routine to look also at the number and quality of the meetings actually held with prospects before an opportunity was identified.
The Playbook of Sales Ops was not tracking:
- outbound activities (eg Number of Accounts prospected, prospecting cadences, first meetings with brand new prospect accounts and follow up meetings)
- how many of these engagements were converting into opportunities.
By deep diving with the team we discovered that the agenda of the Account Executives was not as busy as you would expect given the ambitious targets.
We had to change this.
Granular Salesforce dashboards on Activities, not only on Pipeline.
In a few weeks we built a new granular Salesforce dashboard focused on tracking prospecting cadences and First Meetings with new prospects.
These data started to be embedded into the sales team review meetings.
This effort and enhanced routines helped bring the “right” pressure to the sales team by setting clearer and more structured expectations.
Avoiding “happy ears” by splitting New Business pipeline vs Renewals pipeline
In Salesforce the business was looking at the pipeline numbers in aggregate.
- No distinction between Renewals pipeline and New Business Pipeline.
- So the numbers looked big but in reality the New Biz contribution was not that big as you would expect.
We changed that.
Once the dashboards started to show the New Business pipeline on its own, this created a sense of urgency within the team that helped move the niddle in the right direction.
How to reduce the risk that Opportunities given as 99% sold just vanished last minute
The CEO was losing trust in the forecasts passed by the revenue team.
Deals were in pipeline for too much time.
Client sign-off always promised for “next” month, except that at some point out of the blue the deal was moved to Closed Lost.
How frustrating is when the Account Executive is giving generic and not satisfactory explanations about why we lost the deal.
We had a chat about this issue and spent some time exchanging material and Q&A with the team.
I wanted to understand the criteria used internally to identify an opportunity. What were the triggers that would move the opportunity down the funnel with objective criteria?
The reality that came out from this exercise was that the qualification framework was too basic for the current stage of the company.
Generic criteria with too much subjectivity.
No doubt it had to become more scientific and professionalized.
In two weeks we defined a customized version of the MEDDPIC framework that would reflect a few specificities of the Cloud Academy business.
We briefed Sales Ops and got the framework deployed in Salesforce.
We gave an initial training to the team and provided a brief in order to get the entire pipeline reclassified based on the MEDDPIC insight.
This process provided so much good insight on the real status of the entire pipeline of opportunities. It contributed to increase the quality of the forecasts.
Improving sales meeting management and team enablement
Once we had re-built the basics as far as process, data and qualification framework were concerned, we focused on how to make the sale team meeting routine more productive.
First of all we changed the goals of the 60-minute weekly one2many meeting. It became a mix of 3 goals: Align – Inspire – Educate.
- 30 minutes for a revised pipeline review (focus on hot deals plus a round table of individual priorities for the next 15 days and next two months).
- 30 minutes for a Learning section to review parts of the current playbook.
At the same time we redefined the timing and the agenda of the weekly one2one review meetings with the Account Executives.
- Timing: one day after the full team meeting.
- Objective: to detect during the full team meeting what are the key topics that need deeper focus during one2one’s.
- One2one Agenda
- Update since last meeting and focus on hot deals
- Emotional update (how you feel 360 degrees)
- Your priorities next 15 days and next two months
- How can I help
Hiring only from domain and big players can be dangerous.
The right process, data and framework are essential GTM fundamentals but they do not move the needle if you do not have the right people in place for the current stage of the company.
Cloud Academy had a Sales team of 18 people in that period and there were two main SaaS scaleup GTM challenges.
- The first was related to how flat the sales structure was. There were no managers of managers. Given the size of the business a VP with a flat structure of direct reports was not an option anymore.
- The second challenge, the most critical one, was related to the AE profiling. This was the biggest threat to keep on penetrating the market.
The last VP who had been recently phased out was coming from a big player in the same industry, bringing on board AEs with a similar profile.
In my experience there is a big issue with this type of corporate profiles.
They tend to have issues to open door and penetrate the market when working for scaleups like Cloud Academy that are doing really well but do not have yet an established brand in the market. They are still virtually unknown.
I’ve been there moving from an established corp to a scaleup in the same domain for my first tech job in 2010.
Believe me, you don’t want to be the first tech scaleup to sustain the cost of this “switching”.
The work stream focused on People absorbed 70% of the energy and time I invested helping Cloud Academy.
We defined a revised job spec for the new AEs to be hired. We gave high priority to professional coming from B2B SaaS scaleups with a track record on tickets of similar size within companies of no more than 30-50M in ARR.
The provenience from the domain became a nice to have, not a must have anymore as it used to be.
I worked hand in hand with the CEO and the Head of HR to rebuild the team in less than 6 months, including a VP for North America.
To change people was the toughest job of all but in the end everything worked pretty well.
Stefano and his co-founder got their earn out.
Then they moved on to build another success, in the HR SaaS space. Have a look here.
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