Scaling Myths and Mistakes (and How to Avoid Them): Meet Our Fund Recap

Robert McLaws
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This summer I had a great opportunity to talk about “Scaling Myths and Mistakes” on Meet Our Fund.

I love sharing the story of my own career history; the mistakes that I made along the way from consultant to CTO to CEO and the lessons that led to my founding of BurnRate. I call those mistakes the “road rash” that ultimately put me (and the companies we serve) on the right path.

In fact, I talked a lot about the journeys for both customer and company and how, without the right map, founders will end up in a ditch rather than on the road to success.

Below is a brief summary of the presentation, but I urge you all to listen to it in its entirety. It could help you avoid that ditch!

Myth #1: Corporations are Not People

Fact #1: 100% of Employees and Companies are People

In other words, you must focus your attention on recruiting the right talent when scaling your company. You’ll make human mistakes along the way that will impact your business and the right hiring decisions, at the right time, can help you scale faster.

Myth #2: We Just Need to Have the Right Product-Market Fit

Fact #2: Your Company is a Product Too

A great product is not enough when you’re scaling your business. Most companies ultimately discover that leads are sporadic, deals take longer to get done than they may have forecasted, and customer churn is happening as a result of a messaging disconnect or an inability to properly serve your customer base, relying too heavily on automated onboarding.

As you’re growing your company, think of the process behind your marketing and sales processes, hiring systems, and retention plans. Investors are looking for companies that not only have solid products but also have the infrastructure and tools that make them great.

Myth #3: You’re Building a Tech Company

Fact #3: 74% of Hires are NOT Tech; You’re Building a Sales and Marketing Company Too

According to Jason Lemkin of SaaStr, only 26% of most companies’ first 100 hires are engineering professionals. The rest are marketing (8), sales (40), and customer success (26). In other words, you must put significant focus on the people in your company that actually bring your product to market and you must invest in tools that enable you to better onboard, retain, and incentivize these people.

Myth #4: “We Don’t Need a Sales Team. I Don’t Need to Know Sales”

Fact #4: Every $1B+ Company Has a Fine-Tuned Sales Organization

As I learned through my own start-up experience, just because you have a great product idea doesn’t mean you know how to bring it to market and sell. Building a sales organization and culture should start to happen early on in your evolution; you’re never too early, but you might be too late.

Systems like self-service sign-up and onboarding may be convenient and economical for you, but they don’t ultimately close deals.

And, because getting outbound systems working well takes as long as a year, if inbound leads drop-off, your business may not survive.

Need to up your sales game? Companies like Aspireship (that train and recruit) and gatherings like Thursday Night Sales (a frank and inspirational gathering of sales pros) will enable you to get smarter as you build out your sales organization and have access to the talent you need to grow.

Myth #5: “We Raised Money So We Can Hire Whenever We Want”

Fact #5: Scaling at the Wrong Pace Kills Companies

Timing is critical as you build your sales team. In fact, late hiring can cost your company $4K PER DAY in lost revenue. When you delay hiring by six weeks, that loss swells to $124K per rep in lost revenue. “Winging it” is not a strategy.

Hiring too quickly or too slowly can be deadly. Consider the customer journey as you bring on new hires, but also think about the employee journey. The seven steps that lead to sales success (at both an individual and company level) are:

  1. Sourcing
  2. Screening
  3. Hiring
  4. Onboarding
  5. Ramping
  6. Quota
  7. Profit

Planning for that process is critical. The more successful you are, the bigger the problem actually becomes, and you need to have a well-considered roadmap for growing your sales function.

Myth #6: A Spreadsheet is Good Enough

Fact #6: You Can’t Excel Managing by Excel

Spreadsheets are great for reporting on money, but not on people or time. CFOs may love them because they are simple and straightforward, but they are way too limiting when you need to understand the human side of sales hiring and its path over months and years.

I like to draw an analogy between business growth and the role of navigation in exploration. From Columbus to the Oregon Trail to Mapquest, to today’s system of live and self-correcting GPS navigation, we have learned how to use more sophisticated tools to get us where we’re going.

Think of the spreadsheet as the Oregon Trail phase. You can see where you’re going, but no intelligence (human or artificial) is applied to your journey.

BurnRate has taken the sales process into this century, ensuring your journey is being informed and guided by automated and smarter tools. You’re less likely to get lost in the woods or drive your wagon into the river.

“Every Company is a Cluster F*ck. Ask Yourself ‘Where are My F*cks Clustered?’”

In other words, even with the right tools, you’ll discover that the people you hire and when you hire them can make all the difference in business growth and its long-term value to investors.

  1. Treat your people well, and the money will follow. Learn to love paying commissions.
  2. Think about two jobs (your role as both founder and sales leader), two products (the one you sell and the value of your company), and two journeys (the one your customers are on and the one your new sales hires are on).
  3. Investors are buying your “money factory,” not your idea. Make sure you have tight processes.
  4. Hiring at the right pace is absolutely critical.
  5. Actually excel at what you’re doing. Don’t be average. (And kill those Excel spreadsheets!)

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