Large quota over-assignment, e.g., where the sum of ramped, rep-level quotas >= 150% of plan causes some major problems. A short 🧵 The company can consistently make plan when most sellers are not making good money and most bonus-driven staff are coming up short.

In short, a morale problem. As I once said when working at a large public company,

The only people drinking champagne at the end of the quarter are the CEO and the CFO.

That's bad for culture, morale, and turnover.

Ut oh. I've said the quiet part out loud again.

European founders lose their bearings when they expand to the US and hire their first few employees, typically salespeople.

"These people are gods," is how one founder told me he felt early in the expansion process. But what's going on is simple.

Americans are taught to inflate, hype, take credit, embellish, real push their career claims to the limit.

Europeans are taught the opposite.

So when a European might be inflating an American CV as they woulud a European one, they should be discounting it

Many wish to be in a large, greenfield, forming market. And it's a great thing and a HUGE opportunity. But the rules are different. You can't be mild mannered. You can't sandbag growth plans. You need a barbarian running your sales team. The discounting guide gets thrown out the window and you need to win, win, win every deal you find.

Why? 1. CAC is the wrong measure (bet you never thought you'd hear me say that). If you're locking someone into a platform with high switching costs for decades, you shouldn't care whether your CAC ratio is 0.8, 1.2, 1.8, 2.5, or even 3+. (That said you better be darn sure about that lock.)

2. CAC's also the wrong measure because it's only looking at the initial deal. If you're really selling a platform with N use-cases, the customer could expand 5x to 10x in the first decade.

3. Network effects. Many platform markets have network effects where the more people use it, the more value it has. AI training data is a subtle form of network effect -- the more data I have, the better my solution and the more people should want to use it.

Reasons that, despite its popularity, I dislike CAC Payback Period as a SaaS metric. A short 🧵 It's a compound metric that includes S&M cost, new ARR, and subscription gross margin. That makes it hard to figure out how to fix it when it's broken.

kellblog.com/2022/10/11/you…

Had a chat with a founder the other day on the difference between an ideal customer profile (ICP) and sales qualification. A kick-it-around thread 🧵 I always say, "in the early days, the ICP is aspirational" -- i.e., it reflects who we want to sell to and it's usually about companies (e.g., size, vertical), buyers/personas (e.g., VP of FP&A, VP of revops) and use-cases / problems to solve / jobs to be done.

How much does it cost to grow from $20M to $100M. Some quick back-of-the-envelope math. A thread 🧵 Let's start with the CAC ratio, i.e., the S&M cost of acquiring a dollar of new ARR. Say your CAC ratio is 1.6.

kellblog.com/2013/12/01/the…

When I speak to one of an early-stage startup's first reference customers, I look for these things. A short 🧵 1. Are they actually using the product or are they a "fake customer" who's a friend of a board member or executive? Ideally, they're an arms-length customer who may have found the startup through a referral, but made an objective decision to use the product.

Since people are in scenario planning mode, right now, a few tips. A 🧵 #planning #scenarios Please don't present a base case and two strawman (or strawperson) proposals. A strawman, often misused in my experience, is a rhetorical fallacy, i.e., creating a proposal that no one would reasonably vote for, and then encouraging votes against it. en.wikipedia.org/wiki/Straw_man

Find the contradiction in this sales/marketing relationship. A thread 🧵 Our CMO and the CRO get along great. They never fight in meetings. All is seemingly peaceful.

Set pipeline generation goals on opportunity count and not on pipeline value or, worse yet, percent of pipeline. Short thread 🧵 When you say, e.g., SDRs or Alliances, need to generate 30% of the pipeline, you immediately do two things: [1] start an attribution war about who gets credit, and potentially end up putting more energy into the credit-assignment problem than the oppty-generation problem, ...

As someone who's launched a lot of products, I thought I'd share a thread on naming 🧵 The longest product name I've ever launched was BusinessObjects WebIntelligence. A massve mouthful of 10 syllables.

Startup leaders come in three basic types and those in a given type typically neither understand nor respect those in other types. Nevertheless, it's critical to have the right types at the right time as you grow. A thread 🧵 #startups #tech #SaaS The first are innovators. They love disrupting the status quo by doing things that haven't been done before. They don't need training or playbooks. All they need is an email, a telephone, and a machete and they can survive and thrive.

There has been some conversation on venture debt in the Twittersphere of late. Here's my first-hand take on venture debt. A thread 🧵 The first time I looked at venture debt was nearly 20 years ago, and it had a strong negative connotation back then. It's for people who can't raise equity. They'll pull the line. They'll sweep your accounts. Parachute that won't open, etc. So we didn't get it.

We’re Not Buddies:  Thoughts on Managers Too Preoccupied with Being Liked buff.ly/3N1WMsB Since some people took issue with the analogy, which is not surprisingly given the frequency with which you see buddying, I have two thoughts: [1] whether you like the analogy or not don't miss the point, managers shouldn't be buddies with their employees, and ...

1/ A few weeks ago I asked #marketing Twitter what should be written on the bottom (inside) of a peel-off yogurt lid 2/ The answers I got generally fell into three buckets: (1) humor (e.g., say something cute/funny), (2) cross-sell (e.g., other flavors or products), and (3) brand reinforcement

If your welcome message to your customer service number is to take 45 seconds to give the website address and business hours, you're doing it wrong. @vanguard And then you do it again. Trust me, I don't want to call. You don't need to try to deflect me twice. @vanguard #cx