Keeping Startup Sales Simple

Many promising startups and technologies never get off the ground because the team never quite makes the transition from spreadsheet to action; or from ‘Zero to One,’ as Peter Thiel might say. All the financial projections in the world won’t save you if you can’t identify and execute on the tactical actions to build a sales funnel. To be sure, part of the problem is the dizzying array of acronyms, metrics, and traction milestones thrown at founders by investors; not to mention, the endless stream of blogs written about how to scale your startup. Most of what gets published about scaling businesses is far more relevant for growth from $2 million to $10 million in revenue or from $10 million up.   

For startups seeking early customers, especially those led by founders who do not come from a sales background, it can be overwhelming to figure out what to do, how to do it, and what to measure. Believe me, you’re not alone. Over a sales career that spanned nearly 15 years there were many moments where I sat staring at a laptop trying to figure out what to do next. It’s a grind and I have attempted to help many founders focus on the tangible ‘roll-up-your-sleeves’ things you can do to get customers and build revenue. 

Here are the 4 metrics we advise founders to focus on to build early traction:

  1. Number of qualified leads 

  2. Length of sales cycle

  3. Average deal size

  4. Win rate

Easy, right? If these look familiar it’s because they comprise the primary inputs to the ‘sales velocity’ formula which you can read more about at Hubspot or Marketo, among other places. 

Why these metrics? Simply because they are measurable and actionable. Within each variable there are certain levers that can be adjusted to drive performance. Build a matrix of possible corrective action items under each category to accelerate your growth rate and figure out which activities best address the bottlenecks you are experiencing within the time, budget and resource constraints you are facing. Below is a basic starting point that can (and needs to) be customized for your business.  

Sales and marketing initiatives can be lean and agile just like product development cycles. Find out how fast you can run tests to gather enough data to figure out what moves the needle.

None of this is to say that measuring CAC, LTV, payback periods, and other benchmarks are not highly important. Founders will need to make critical decisions about sales and marketing strategy at multiple inflection points along the journey of growing the business. We are huge advocates of building the infrastructure to collect and analyze this data as early as possible so that it is actionable as soon as you have a meaningful amount of information. To get started, implement an integrated marketing/CRM tool and set consistent policies for what constitutes a ‘qualified lead.’ By the time you reach $1m - $2m ARR you should start to see some useful metrics.

Until then, keep your feet moving and focus on what you can influence! 


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