@akothari Too many to tweet. A lot of it will be hard-earned in spite of book, blogs, and experienced executives you bring on board.
@akothari Perhaps the most useful tip I could share, though strictly based on my narrow experience, that I wish someone told me: start very small, scale steadily not rapidly, and make sure 70% of the sales force is hitting 70% of its quota. Scale hiring behind potential but take some risk.
@akothari Nailing a comp plan is extremely hard. Expect to change it many times over many years. You'll constantly be seeking for ways to align incentives perfectly but that will never exists. Perfect is the enemy of good.
@akothari Customers as a result of bottom's up sales are usually more churn-y than say larger, more established customers. You'll have to decide whether churn is a component of the sales quota. Usually, it's a bad idea to incorporate churn (or things sales has little control over).
@akothari A decision around contract length is important as part of the quota: is it okay to get paid on monthly or annual contracts? For bottom's up sales, there's a natural tension between monthly and annual because those users like monthly but churn far less if the plan was annual.
@akothari If you're just starting out, make sales quotas sales people can easily overachieve on. That will help your sales people build both confidence & help you hire better sales people as word spreads that you can make $$$ at your company. Then, steadily optimize for sales productivity.
@akothari Build an extremely strong Sales Ops function (analyzes how it's all going) and Product Marketing function (gives ammo + supports the sales team needs) in tandem with building the sales org. Without it, you're blind and they're blind leading to lots of dysfunction. (Sorry team!)
@akothari Sales plans need real buy-in from the sales people. They have to believe in the quota/plan. Yes, it will feel odd to ask someone if they're okay with a "goal" they are incentivized to minimize but the conversation is not usually as misaligned as you'd think.
@akothari If you royally fuck up the sales plan, do the right thing and true-up your sales people for going along with you on the crazy bumpy ride of everyone learning for the first time together. It may take a few quarters of true-ups to get everyone comfortable.
@akothari It’s generally typical to comp 50/50 base/OTE. Start with a quota that’s ~3x OTE with the goal of getting to a 4-5x multiple, pay on revenue not units, make quota payouts linear early on, a simple accelerator that’s achievable, tweak every 6 mo, one quarter of quota relief.
@akothari I hope this is obvious but just in case it’s not: founders should sell the first 100+ customers. Then you’ll know what’s a realistic sales plan for your future reps & you can be confident it’s achievable. I sold & onboarded the first 300 customers on my own.
@akothari If you have a freemium model, it will inevitably become your sales team's biggest competitor creating tension with their sales plan. Make sure the paid plans have enough "sellable" value.
