From Impossible to Inevitable notes by Snehal Nimje

1. 1. Nailing a niche

2. Niche doesn’t mean small
• Focus => Specific target customers with specific problem and solution
• Hypergrowth comes from focusing on where you have best changes
of winning customers

3. Examples
• Salesforce – started with sales force automation
• Zenefits – focused on California tech companies with 100-300
customers
• FB – started with Ivy league schools
• Paypal – focused only on ebay users
• Amazon – started with books
• Zappos – focused only on shoes

4. Clues you are not ready to grow
• Grown mostly through word-of-mouth, referrals
• Inbound/Outbound lead gen is abysmal
• Dependent on relationships
• Good at too many things
• Even on getting quality appoints too few people buy

5. Clues you have nailed a niche
• When you are able to signup –
Unaffiliated. Paying. Customers.

6. 1st Goal
• Get to 10 unaffiliated customers
o means you have built something valuable
o10 customers will give you a roadmap

7. Focus
• Solve a specific pain for
• An ideal customer in
• A believable , repeatable way with
• Predictable ways to
oFind them
oInterest them

8. 2. Signs of slogging

9. Basic sign
• Everyone says your product is cool but no one buys it
• Business buy what they need not what they want
Want Need
Marketers Beautiful website Conversions
Management Happy employees Product releases, Profits
VP Sales Sales productivity Analytics, Reporting tools

10. Questions
• What problem is painful enough that customer will pay
• If solving a need , define it differently
• What differentiates customers who need you Vs who don’t
• Where can you create most financial value
• Where can you get permission to make case studies

11. How to nail a niche?
• Be a big fish in small pond
• 5 aspects of niche
• Popular pain
• Tangible results – easy to show impact
• Believable solution – easy to prove impact
• Identifiable targets
• Unique genius

12. Iteration - Process
• Define a target companies list
• Decide who to reach out
• Min required preparation
• Stop procrastinating and start campaigning
• Make a stop doing list – failed projects, failed customers

13. 3. Create Predictable
Pipeline

14. Predictable pipeline is important
• When lead generation is bad everything else need to be perfect –
product, salespeople , sales process
• But with good lead generation you can afford to be bad at few things

15. Types of leads
• Seeds – happy customers who refer
• Nets – Content and inbound marketing
• Spears – Outbound and prospecting

16. 4. Seeds

17. Seeds
• Pros – profitable
• Cons – you have less control over growth

18. Customer success management
• Customer success is a mindset
• Goals of CS
oLower churn
oIncrease revenue
oBetter targeting/marketing

19. Customer success rules
• CS is core growth driver
• 5X more important than sales
• CS – one of 10 employees
• Visit customers in person (5 customers/month)
• Needs metrics to assess – rentention rate, upsell rate
• Evolve the metrics with time

20. Role of customer success
• Traction (0-1m) – What customers want? What do they do?
• Adoption(1-5m)– Why , How should customer user product daily?
• Retention(5-20m) – Why do customers keep using product?
• Expansion (20-100m) - Why should customers expand
• Optimization (100m+) – Automation and improvements

21. Gild case study
• 90 days adoption
• Quarterly business review
• Use predictive tools – Gainsight + Zendesk for tickets
Team structure
1 inside CS rep – monitor usage + run analytics (1 per 70 users)
1 outside CS rep – renewals (1 per 30 customers)
Executive CS - Upselling

22. 5. Nets

23. Inbound marketing
• Quantity over quality
• 50% seeds may turn into customers
• 1% in case of nets
• Pros – High volume of leads
• Cons – High costs

24. Lead Commit
• Quota of VP marketing
• Total leads (qualified) per month

25. Need Demand generation, not Corporate marketing
• Spend X dollars = > get Y leads
• Constant iteration – 5 email templates , 100 mails a day
• Marketing owns it all , then work backwards
• Iterate and move fast

26. Content marketing
• Start with customers buying stages
oWhy your segment – make useful , fun and general info
oHow – definitive, ultimate guide
oWhich – You vs others, how are you better
• Content is king
oWrite for readers
oUse tools to find segments
oAdd details, Pay attention to what works
oOnce or twice a month
oShort and small content
oBe human – Share your stories, add you style

27. 6. Spears

28. Outbound advantages
• Avoid inbound dependency
• Easier to double – double the team
• Increased deal size – 3X – 10X large
• Increase market coverage
• Less competition – Inbound enquirers are checking with your
competitors also
• Small team big impact – 10% increase

29. Where outbound marketing works
• Large deals - $10-20k LTV
• Value prop – easy to understand
• Differentiated not commoditized
• Replacing other solutions

30. When outbound doesn’t work
• No management priority
• Focus on profile is not there
• Unrealistic expectations – takes 6 months to get consistent pipeline
• Needs prospecting
• Custom or commoditized
• Boiler room 101

31. Prospector and Salespeople
• Prospector does a AWAF call (Are we a fit)
• Schedues a longer demo with Sr sales whoe qualifies and
accepts/rejects
• Build a relationship between prospectors and sales
• Try new things. Keep doing A/B

32. Whats expected from prospector
• Send 600-800 emails / month
• 350-450 calls /month
• Mix social media invites
• Schedule 20 long demo /discovery calls
• 15 SQLs are accepted by sales people

33. 7. What execs miss

34. Pipeline creation date (PCR)
• Rate at which your qualified leads are growing
• 10% m-o-m increase

35. 15/85 rule – early adopter Vs mainstream
• Early adopters – risk taker, inherently interested, need little guidance,
finds you, get started details later, doesn’t care about people
• Mainstream buyer – risk averse, only if you solve a pain, lot of
guidance, you gotta find them, lots of proofs – case studies, cares
about other people
• Stop saying MBs don’t get it or are lazy dumb. It’s not their job , it’s
yours.

36. Underestimating LTV
• Ignoring 2nd order effects of word of mouth/virality
• 10K, 12.5K, 15.625K = 38K
• 10% of time champion sells to other companies he movies
• 30% chance one of the friends purchases
• Total LTV = $60K not

37. 8. Managing growth

38. Growth creates problems but they are better
problems
• Operational pain is less
• Diverse customers
• Sales and marketing learn to works as a team
• You understand market better now
• Product still sucks but is rich in features
• Cannot be killed by competitor only wounded

39. Jason’s 12 mistakes
• Hiring sales rep before you prove you can do it yourself
• Hiring VP before you can prove process works with 2 sales reps
• First one – two need to be good
• Actual sales target needs a lot of people
• Underpay sales
• Not going upmarket- double the deal size
• Firing a bad VP, in one sales cycle you know (6 months)
• Needs some basic experience
• Hiring from established company is bad
• 0% voluntary attrition
• Doubling the plan every time

40. Advice from VP sales
• Stop blaming others
• Build for present not past
• Hire the best
• Pay well
• CEO should be on board

41. 5 to-dos for sales
• Drive up the sales size
• Great reps perform in 30 days
• Honesty
• Great sales team stay together
• Outbound and Inbound are yes. Do both.

42. 9. Specialization

43. Sales people should not prospect
• Ineffective – boring for smart sales people
• Erratic focus
• Unclear metrics
• Less visibility / accountability
When people multi-task, most end up doing many things poorly

44. 4 categories of roles
• Inbound lead qualification
• Outbound prospecting
• Closing new business deals
• Post sales –
• account management
• Customer success
• Professional services

45. For small teams
• Dedicate 1,2 hours of prospecting
• 5 over linkedin, add 10 to my list
• Try daily weekly targets
• Get a buddy

46. 4 categories of roles
• Inbound lead qualification
• Outbound prospecting
• Closing new business deals
• Post sales –
• account management
• Customer success
• Professional services

47. 4 reasons to have specialized roles
• Effectiveness
• Farm talent
• Insights
• Scalability

48. Acquia
• 60 salespeople
• 20 presales solution architects (1:3 to sales)
• 20 dedicated prospectors (1:3)
• 15 junior reps inbound lead qualifiers
• 20 account managers
• 8 channel partner managers
• 5 sales operations/deal desk

49. 10. Sales leaders

50. Mis-hire of sales VP
• 1st sales VP generally fails
• VP sales tasks
oRecruiting 20% of time
oHelping sales team
oTactics , reach quota
oStrategy sales
• Don’t hire a sales VP till you can prove process with 2 sales rep

51. Mis-hire of sales VP
• 1st sales VP generally fails
• VP sales tasks
oRecruiting 20% of time
oHelping sales team
oTactics , reach quota
oStrategy sales
• Don’t hire a sales VP till you can prove process with 2 sales rep

52. Right Sales VP by Stage
• 1-2m – Evangelist
• 2-10m - Make it repeatable
• 10-20m - Go big
• 20m+ - Dashboard user

53. Interview Questions to ask
• How big team do we need right now
• What deal sizes have you sold to
• How you build the team
• Sales tool uou used.
• How would sales / CS work together
• Deals you lost to competitors
• FUD in marketplace
• Do you work with sales, engineers
• Revenue look at 120 days
• How should sales and marketing work together

54. 11. Best hiring practices for
sales

55. Predictable recruiting
• Measure activities, conversion rates, elapsed time
• Hiring builders Vs growers
• Get them to work on account, support and product management
• When doing something new, start with 2
oIf it doesn’t work – one rep will blame crappy product, company
oIf it does – you don’t know if it’s the product or the salesperson

56. Hubspot hiring
• Hire same type of sales people
• Consistently train the same way
• Provide sales person with same quality
• Same process

57. 12. Scaling the Sales team

58. Issues
• If churning more than 10% they are not the problem
• Missed quotas
• Team attrition
• Ramp times – 2-4 months now 6-8 months
• Rep count growing faster than lead times
• One lost sales person = 2 times the annual compensation, 5 sales
people with $150K is $1.5m loss.

59. Common causes
• Lead gen – quality of leads is bad
• Specialization – Company is not specializing
• Management – management is not connected
oDon’t blame sales people
oKeep one-to-one coaching
oGreat reps with great managers stay together
oPeople leave managers
oVoluntary attrition should be 0%
oOverall attrition less than 10%

60. Zenefits
• Marketing owns all leads
oSDR team make up mostly outbound prospectors
oPost 300 SDRs outbound prospectors are moved to sales
• 3 key metrics
oRevenue bookings
oHiring goals
oCustomer retention

61. Zenefits
• Predictability
oTo hit X rev, Hire Y sales people, 0.8Y SDR, Z implementation managers
• Sales force automation
• Hiring
• Training
• Specialization double down

62. Comp plan
• VP product for right features – 15% var cash, 15% bonus
• VP marketing- 20% var cash
• VP CS – 30% for upsell, retention, -ve churn goals
• VP and Dir of Engg- 10-15-20% var plan

63. Enterprise
• Slow
• Group decision
• Takes a lot of stakeholders

64. Don’t sell, help them buy
• Find a champion
• Focus on who needs you
• Identify ideal customer profile
• Confused prospects say no
• Show , not tell – case studies, impact ,etc

65. 5 key sales metrics
• No. of total open opportunities/ rep
• No. of total closed opportunities/ rep
• Deal size
• Win rate – closed won / (closed won + closed lost)
• High win rate is bad – low win rate is not good

66. Startups should do services
• 15-20% of annual contract should be services
• 15% month on month growth
• 1m-10m in ARR in < 5 quarters

67. 14. Headcount of a 100 person
SaaS company doing $10m ARR
planning 20m next

68. Sales - 40
• 1 VP sales
• 1 VP / Director of sales Ops
• 25 Sales rep
• 8 SDRs (under marketing department)
• 3-4 sales directors (8 reps per director)
• 2-3 field sales

69. Customer success - 18
• $1.5m ARR per CSM so 15 CS managers
• 1VP and 2 directors to manage half of CSM

70. marketing – 8
• 1 VP marketing
• Director, Demand generation
• Director, Field marketing (Events)
• Content marketing
• Product marketing
• Marketing MQLs (2-3)

71. Support - 6
• Phone support

72. Product – 8
• 1 VP product
• 2-3 product managers
• 3-4 Dev ops

73. Engineering - 34
• 20 engineers + 3 on gen-next features
• 8 QA + 1 manager
• 2 designers

74. 15. Double the deal size

75. Why double the dealsize
• At $10/user, with 2% freemium to paid conversion, you need 50m
users to generate $100m revenue
• 50m users is very tough
• Small deals get you started, big deals drive growth
• Freemium has ceiling , but helps build brand
• Solution to large business = Mix small + enterprise

76. Increase the price of deal
• First time entrepreneurs - under-price their product
• Clarity in nailing a niche
• No of people involved is lots
• Selling on value with unique advantages customers cant get
elsewhere
• Ability to show impact, believable

77. Bigger deals = Better customer experience
• Better service
• More commitment
• More upfront cash

78. 16. Not too big, not too small

79. Deer hunters
• Deer – Good sized deals
• Rabbits- Too small, small money
• Elephants – largest, difficult to sell ,service and very demanding

80. Choose large deals only which
• You can realistically close
• Realistically help the company in a big way
• Wont kill your product or service level expectations

81. Small, mid or large
• At some point you have to make a choice, around $ 1m ARR mostly
• To become dropbox or box
• To become mailchimp or hubspot or marketo

82. Large companies buy a solution not a tool
• Solution is 3-20x more tool.
• Tool max $20,000 budget in most companies
• For solution, companies have budget of $20m, can easily spend 1-2%
for a solution
• Fly to customer
• Need account managers and dedicated professional services team
and customer success managers

83. 17. Going upmarket –
Enteprise Sales

84. Why professional sales team
• What works at the bottom of the market may not work as you tilt
upmarket
• Amateurs don’t know how to close a deal
• Make more money with sales team – they can increase your revenue
by 300%
• SaaS sales person acts like a trusted guide or a consultant helping the
customer through often complex evaluation and purchasing process

85. Why go upmarket
• Small customers can never drive revenue, the goal is only to do
branding and word-of-mouth
• Small customers can not help you build a large business. 4% monthly
churn means 50% annual churn
• Large customers can you you 20-30x more and also stay longer
• Keep adding enterprise level features – mostly around reporting,
admin, security, configuration, collaboration

86. Revenue impact
• One seat
$30 / m seat * 8 months = $240 LTV
• 5 seat team
5 * $30 / m seat * 36 months = $5400 LTV

87. Pricing
• Pricing is always frustrating and never perfect
• Start high and lower it
• Most SaaS companies charge $10-$60 / user
• Make that your base and charge more if you can justify value or have
a compelling use case

88. True Value of Sales person
• Salesperson is not just a communicator
• True purpose for a salesperson is to create NEW value for customers
• If a salesperson comes back and says customer has no budget for
datacenter automation, fire him. of course they wont have as data
centre automation is not established market yet. Its job of
salesperson to go out there are show customers a different and better
way of doing business which they could not think or understand
before.

89. 3 Enterprise customer questions
• Why buy? – First listen and then sell. Try to understand core IT initiatives
and link solution to them. Position yourself as a partner and not a
commodity/vendor
• Why buy from you? – Preposition and differentiate your product over
competitors. Define success in 3 buckets
o Business criteria
o Architecture/scale criteria
o Feature and function criteria
• Prepare messaging, metrics and marketing to address 3 audiences –
 C level, VPs
 Workgroup levels
 User levels

90. 3 Enterprise customer questions
• Why buy now? – Turn value prop into quantifiable business case
• Link products capabilities, operational benefits and financial value
with companies strategic initiatives.
• Point out current operational inefficiencies and challenges in the
companies.
• Ensure your solution delivers the most important business objectives
first, => ensuring shorter time to value.

91. 18. DO the time

92. B2B takes a lot of time
• It takes time to get your team together, get product right, nail an
niche, see sales cycles take off
• 12 months build a product
• 24 months to hit traction
• Once you reach $5m it gets easier, your recurring engines start by
then

93. Comfort is the enemy
• What worked for you so far will be your enemy for faster growth
• Always think about scalable growth
• Learn to handle uncertainty
• Everyone has a Year of Hell post traction/scale
• Delaying known problems – firing non-performing exec, restructuring
sales team, rebranding, repackaging – leads to accumulation - only
leads to Year of Hell.