Did you know that there are 305M new businesses started each year that ultimately fail?
We were recently invited to appear on SyncUp with SwagUp to share our launch story and insights to help fewer entrepreneurs be a part of that population.
We’re big fans of the SyncUp with SwagUp podcast for its ability to spark insightful conversations with leaders in the industry. Featured guests share valuable stories that help companies, like BurnRate, take our work to the next level.
In this episode, we met with SwagUp Head of Help and podcast host, Wade Lowe to talk about scaling responsibly and what it takes to scale your team during uncertain times. Here’s a recap of our conversation.
As we all know, the challenges of getting your business off the ground are eclipsed by taking that company to the next level. In talking with Lowe, it helped to look back to our own roots to explain how others can move forward.
“A tinkerer since I was a boy, I was always looking for a new solution to complex old challenges. I loved taking things apart and putting them back together. But great instructions and instincts are never quite enough.”
You may notice that even today when you assemble that model car, piece of furniture, or kid’s toy, you wind up with three screws left over. So, what does that have to do with building a company?
If you miss the little details, you end up with those pesky three screws.
The same thing happens with sales forecasting. But the difference is that instead of having three small pieces of metal in your hand you leave thousands (or even millions) of dollars behind.
Excel is a big part of the problem. It’s an imperfect planning tool.
“I started BurnRate as a result of my own real estate start-up. I hated sales and the entire process. I built a prototype to solve our own challenges.”
First, excel is a human-powered tool. Basic people errors like rounding up and down or putting a decimal point in the wrong place can lead to massive forecasting or reporting misses.
Next, it’s time-consuming. People go into sales because they love to build relationships, find prospects, and close deals. A cloud-based system is faster, simpler, and designed specifically for the challenges a sales-driven organization faces. People spend more time selling and less time updating spreadsheets.
Last, Excel has no simple way to account for differences in individual and team performance and requires the user to change assumptions constantly.
And yet, 80 percent of organizations use Excel for capacity planning.
In other words, Excel is a programming tool that validates ego— there’s no debugger. We call this the “Ikea Effect.”
Ikea sells furniture taken apart because they want you to build a relationship with that piece as you’re building it. So when you’ve constructed it yourself, and you sit in it, there’s a sense of accomplishment.
And Excel does exactly the same thing to people. It spits out numbers, it makes you feel like a god. And you can be totally wrong! The reality is that 87% of spreadsheets have 1 error or more.
Having the top of the funnel be consistent and enough people in the seat to process those leads is paramount to your startup’s ability to scale. Everything else is only technical.
For example, if you get funding and decide to hire 3 additional reps, you must have a plan for how you will keep them busy.
If you don’t control this process, you will significantly shorten your runway.
The average tenure of a sales leader is 19 months.
Not only does a rep have to manage a team, but they also have to understand the capacity of each person on the team to reach their goals, all while being an excel programmer to model out how it will work over time.
A sales leader can’t afford for the model to be wrong.
And the worst thing you can do for a company is tell them they have 19 months of runway when they really have 12.
As a sales leader or startup founder, you need to be able to answer: What day a rep you hired 9 months ago is net profitable for your company AFTER covering the tech stack and base salary you paid for while they were ramping up.
It’s crucial questions like this that will make or break your model and ultimately your business.
If you’re interested in hearing more from this conversation, listen here.
For more conversations like this, subscribe to SyncUp with SwagUp where you’ll get valuable insights from innovative leaders in HR, sales, and marketing.