A Harvard Business School-style
General Partner, Flybridge Capital
Senior Lecturer, Harvard Business School
1. Context for the story
2. The story
3. Three decisions that need to get made
4. Take aways
1 What Is A Harvard Business
(…and who am I to teach it?)
• Day job: venture capitalist (Flybridge Capital)
• Former day job: entrepreneur (Upromise, Open Market)
• On the side: HBS professor
• Teach Launching Technology Ventures to MBAs
• Full disclosure: invested in Mattermark
• Full disclosure: didn’t invest in Hubspot (doh!)
Who Am I?
• Educational innovation pioneered at HBS
• Present a challenge, constraints, incomplete information
• Put student in role of decision maker
• Analyze, debate, discuss, defend – no simple answers
• Usually: read beforehand, do some homework/analysis
• Today: make it up as we go along
• Community college drop out
• Startup geek, hacker, blogger
• Ran marketing at Twilio
• Started Refer.ly, YC, shut down
• Pivoted to Mattermark: mid-’13
Value Proposition: Data on Private Companies
• Raised $2m seed round – June 2014
• Closed $6.5m series A – December 2014
• Board meeting with new investors: tomorrow!
“Nothing focuses the mind like a hanging .” – Samuel Johnson
• Pour money into sales and marketing for VC market?
• Invest in product to expand beyond VC market?
Sales team hitting quota
Sales cycles short
Product usage high, growing
40% test – if product disappeared
LTV : CAC > 3
MRR growing > 10% MoM
Churn < 30% / year
NPS > 20
Criteria for Product Market Fit
NPS (50) and usage high
MRR growth ~ 10% MoM (founder selling)
x MRR growth = flat (new VP sales hired)
x LTV : CAC = ~ 1
x Gross churn = 50-60% / year
Net Promoter Score: Recommend to Others?
Source: Satmetrix NPS Report 2014
~ 500 Active VCs
x $20-30k/year willingness to pay
$10-15m / year market
x 30% market share
How Big Is VC Market?
How Valuable Is VC Market?
• Founders had done all the selling – got to $1m ARR
• Then hired “grown up” VP Sales from industry
• He failed miserably – big company culture, didn’t dig in
• Now have 5 person sales team but no leader
BTW, Sales Leadership A Mess
• Hire a new VP from the outside?
• Promote from within (and keep founders selling)?
Sales Leadership Considerations
Hire New Leader Promote From Within
Sales Leadership Considerations
Hire New Leader
Bring a playbook
Provide exec leadership
Bring a team
Promote From Within
Playbook is unique
Positive signal to staff
Keeps founders selling
• hire inside sales vs. outside sales?
• more reps vs. more marketing programs?
• invest in content marketing / inbound vs. outbound?
Invest in Sales or Marketing?
• Ramp up sales team?
• Ramp up marketing team?
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