Sales Funnel for Lean Startup Seattle by Andy Chen (AARRR)

Lean Startup - Building an Enterprise SaaS Sales EngineMay 5, 2014

Andy Chen andy@cryingbox.com

SALES BLACK• In first dotcom boom, it was the Idea

(Yahoo!)

• In late 2000’s, it was Users (Facebook)

• Now, it’s Sales (and growth of sales)!

“The series A valuation picture, according to [big VC], goes something like this based on month revenue rate (MRR):

$40-$70K MRR translates to a $7M-$14M pre-money valuation

$100K+ MRR translates to a $15-$20M pre-money valuation”

isthenew

What is a Sales Process?

http://500hats.typepad.com/500blogs/2007/09/startup-metrics.html

Process is different based on your product/strategy• B2B vs. B2C

• Enterprise vs. SMB

• Early stage vs. Early growth vs. Scaling

• Velocity deals vs. Elephant hunting

What we think Sales does

What Sales really is

Marketing Engine Overview

Integrated Marketing Engine

Campaign/Scoring

Leads

Lead Qualification

Drip/Nurturing

Pipeline Management

http://www.g2crowd.com/categories/marketing-automation/compare

QualifiedOpportunities

Marketing’s goal is to create Qualified Leads/Oppty

Leads Leads can be Implicit or Explicit

}Scores over 125Go to top priority

and guarantee a callw/in 24 hrs

CMO

CRO

Sales Enablement Tools

Sales’ goal is to create quantifiable deal-movement

SalesMarketing

Use a Sales Methodology to create consistency

Sales Comp Structure

• Enterprise rep = $7-$10k new MRR/month

• Mid-market rep = $4-$8k new MRR/month

#RepsBase/

Variable Target

Equity MRR Notes

Early Stage 1-2 75/25

Same as early

employee

<$25kCompany-wide goal

focus. Significant product co-creation

Early Growt

h2-5 50/50 Sliding

Scale$25-

$100kIndividual quota. Sell

what you have

Scaling 5+ 35/65 Low

equity>$100

kIndividual quota.

Specialized

Other Sales Tips• Hire slow, Fire fast

• Evaluate in weeks/months, not quarters

• Don’t accept excuses from your reps

• Sell what you have. Everyone blames marketing/product/service

• Sales will “respect what you inspect”

• Beyond closed sales, pipeline integrity is critical to maintain. Managers are responsible for Inspecting the data in Salesforce (or other CRM)

• Hire for the process, not the person

• Don’t buy the rolodex (unless you have to). I choose a rep that fits my process every time vs. someone with a rolodex.

Summary• MRR (Monthly Recurring Revenue)

• Marketing Automation (CRO, not CMO)

• Lead Scoring (Implicit/Explicit scoring)

• Sales Playbook (1-liner, competitive zingers, etc)

• Sales Automation (Pipeline, forecasting)

• Sales Methodology (MEDDIC)

• Sales Compensation

Questions?

andy@cryingbox.com

About Me• Co-founder Fogdog Sports, B2C E-commerce site,

IPO 1999

• VP Product GSI Commerce, B2B E-commerce platform, $2.4B acquisition by ebay in 2011

• Head of Product, Yahoo! Shopping. B2C Marketing/lead-gen site

• Co-founder PowerReviews, B2B Enterprise SaaS Solution, acquired in 2012 for $168M