For the video of the week, listen to one of my favorite startup authors Guy Kawasaki talk about The Top 10 Mistakes of Entrepreneurs. Enjoy!
From YouTube: Kawasaki, former chief evangelist of Apple and co-founder of Garage Technology Ventures, explained the top ten mistakes that entrepreneurs make. His talk covered all stages of a startup from inception to exit.
Generally, I like to err on the side of keeping things as simple as possible, and sales rep compensation is no different. Compensation plans like commission based on 50% of the first four months revenue are easy to understand and manage. Sometimes the desire arises to implement special sales rep incentives to help get a new product launched or get initial traction in a new market.
Here are a few special sales rep incentive ideas:
Keep sales rep compensation plans simple and straightforward. Selectively use special incentives when needed to better align the rep and the company.
What else? What are some more special sales rep incentive ideas?
One of the areas that I want to better understand is that of product engagement and usage metrics in the context of a B2B SaaS app. I’ve looked at a number of usage reports from Google Analytics and other apps but haven’t had the opportunity to see an expert in action combined with a system that adds insight.
Some of the product engagement and usage questions I’m interested in:
I’m confident that staying close to the customer is one of the most important things to do and understanding product engagement and usage is a critical part of this. Now, I’m interested in learning more.
What else? What are the answers to these questions and what other questions need to be asked?
In Mark Roberge’s book The Sales Acceleration Formula, he talks about implementing HubSpot’s first sales compensation plan when they had $300K in annual recurring revenue and 100 customers. Six months later they had 1,000 customers and an annual run rate of $3 million. Today, HubSpot is on a revenue run rate of over $200 million per year (NYSE:HUBS).
From a SaaS perspective, going from $300K ARR to $3M ARR in six months is amazing. Lemkin’s SaaS Law is as follows:
if you can go from $1m to $10m in 5 quarters or less, then your market is huge.
While this HubSpot example is going from $300K to $3M in six months, I’m sure they went from $1M to $10M in five quarters or less. And, of course, today they’re north of $200M run rate, proving that the market is huge.
This is an exceptional example but a great datapoint nonetheless. Entrepreneurs should look for small, fast growing markets that will eventually be huge.
What else? What are some more thoughts on this example of HubSpot having tremendous growth in the early days and that representing a huge market?
One of the common questions I get from other angel investors and VCs is regarding my personal angel investing strategy. Most investors have a strategy about the types of deals they like to do, and then when a deal fits the strategy, they go through their investment criteria (see Ask Investors About Their Investment Criteria).
Here’s my angel investing strategy:
My angel investing strategy has evolved over the past few years and continues to do so. This strategy focuses on serious seed stage entrepreneurs with early, modest results and a recurring revenue business model.
What else? What are some more personal angel investing strategies?
Earlier this week I was meeting with some local entrepreneurs to learn about their business. I had the Simplified One Page Strategic Plan prior to meeting so I knew the vision, goals, and metrics for the startup. We had 30 minutes for the meeting and by the end of the allotted time they still hadn’t asked if their business model and stage fit my investment criteria. It’s like trying to sell a product without doing customer discovery or a sales discovery call first.
Here are a few thoughts on asking investors about their investment criteria:
Entrepreneurs would do well to understand investors’ investment criteria as part of the pitch process and use that to gauge interest and potential alignment.
What else? What are some more thoughts on asking investors about their investment criteria?
Derek Sivers has a fascinating blog and story as an entrepreneur turned world traveler and writer. For our video of the week, watch his video Start Now, No Funding Needed from his book Anything You Want. Enjoy!
From Amazon: After making a living as a professional musician, Derek Sivers went looking for ways to sell his own CD online and ended up creating CD Baby, once the largest seller of independent music on the web with over $100M in sales for over 150,000 musician clients. Since 2008, Derek has traveled the world and stayed busy creating and nurturing creative endeavors, like Muckwork, his newest company where teams of efficient assistants help musicians do their “uncreative dirty work.” Derek writes regularly on creativity, entrepreneurship, and music on his blog: http://sivers.org/.
Lately I’ve been talking to more entrepreneurs that have product/market fit and are working to find a repeatable customer acquisition process (see 5 Steps to Startup Success in 30 Words). Now, sales and marketing metrics become critical and it’s time to figure out what works. Christoph Janz has the best Google Sheets Dashboard for SaaS companies:
Visitors & Signups
Paying Customers
Monthly Recurring Revenue
Customer Acquisition Costs (CAC)
Cash
SaaS entrepreneurs would do well to use the Google Sheets Dashboard for SaaS companies. And, if inside sales is employed, take a look at the Google Sheets Dashboard with Inside Sales.
What else? What are your favorite metrics for SaaS startups?
Next Monday is Atlanta Startup Village #37 at the Atlanta Tech Village. Atlanta Startup Village is the largest monthly gathering of entrepreneurs in the Southeast. Every month five entrepreneurs give five minute pitches followed by five minutes of audience question and answer. For Monday’s event, there’s a strong showing of portfolio companies from Atlanta Ventures:
Join the meetup and come to the Tech Village on Monday night.
Earlier today Stuart McLeod tweeted they do inside sales combined with face-to-face events for his startup Karbon.
I’ve seen several startups follow this same strategy with strong results and I expect more to emulate it. Inside sales is great for all the reasons talked about before (see Rise of the Inside Sales Rep). Only, it doesn’t have the same human element that comes with being in-person that expensive field sales provides. Face-to-face events act as an efficient way to build stronger rapport and connections that are required in B2B sales.
Here are a few more thoughts on inside sales plus face-to-face events:
Look for more B2B startups to employ an inside sales plus face-to-face events approach as the core to their customer acquisition strategy.
What else? What are some more thoughts on the inside sales plus face-to-face events customer acquisition strategy?
David Cummings on Startups 