How Founders Should Think about GTM — Part 2: Processes

If you’ve landed here because you’re a founder thinking about your GTM strategy, welcome! But before you dive in to ‘processes’, you might want to check out this post on how to think about the ‘people’ part of your GTM equation if you haven’t seen it already.

Processes: Build for scale

Once you land your team, it’s time to think about building for learning and scale. This spans everything from simple documentation for new hires to putting in place your first sales compensation plan. We believe there are three key areas to invest time and effort in first: Pricing & Packaging, Enablement, and Sales Compensation Plans. And we’ll give you the basics that can quickly set you up for success and growth.

Pricing & Packaging

First, know that your company’s pricing and packaging will naturally evolve, and you’ll iterate as you experiment and learn. The traditional enterprise sales approach has been to charge first, then drive adoption. Your sales team will spend weeks driving a lengthier sales process involving outbounding, multi-threading, answering compliance and security questions, and convincing multiple functions that aren’t the end-user like IT. And when customers want to add users, they have to talk to your team and sign a contract. This is Salesforce, Workday, and Okta.

The product-led growth (PLG) model focuses on driving adoption first and then charging them afterward based on that usage. Companies build products that businesses can self-serve with natural expansion forces where teams add teammates and adoption grows. This bottoms-up usage and adoption, then kickstarts a land and expand approach. This is Slack, Zoom, and Dropbox.

Both approaches have their advantages and disadvantages and what works best initially will depend on your business, product, and ideal customer profile (ICP). When you’re just starting to take your product to market, optimize for growth and learning. Regardless of the approach you take, make sure that you’re set up for success and growth across two areas:

Be really clear on your product tiers. Look across your feature set and roadmap and start creating a draft of what your product tiers will look like and how you can set it up to encourage future upgrades and expansion. To start, we advise founders to group enterprise features together that address security and compliance like single sign-on, audit logs, admin controls, etc. At this point, you don’t need to worry about building a self-serve motion to drive PLG. Instead, you should focus on getting your first 30 customers and learning from that journey. You can build that free or trial product later, complete with the self-serve purchasing flow, but right now you want to over index on learning from the market and you won’t get that through your self-serve customer since you’re not talking directly with them throughout the customer lifecycle.

Set attractive pricing. Know the value that your product brings but don’t charge as much as you can. That’s not the variable to optimize for; you can always increase your prices later. Your goal here is growth. Growth drives prospect feedback, market awareness, and brings revenue back to feed your teams. Know your efficiency metrics, but don’t over optimize for pricing — it can be an addictive lever. As a leader, you can be less disciplined in your discounting, especially for your first few potential lighthouse logos and accounts.

You can also experiment with pricing that can drive greater buyer urgency. That might be an implementation fee that you’ll waive if they sign by the end of the month, or attractive discounting that’s valid for that same timeline.

Enablement

Enablement might not be top of mind for leaders but it should be. You want to start the process of building playbooks for your scale phase where you go from occasional new hires to onboarding classes. At this early stage, the goal is to document what works vs. what doesn’t. We think about this as two main areas to initially focus on:

Onboarding and Training. First, start creating and documenting early iterations of onboarding plans for your new hires. Think about the ideal 30/60/90 plans for those joining your GTM team and set up the scaffolding to ensure their success. Center this around:

• Team and Organization: Talk about the company, the culture, your mission, and values. Outline the org chart, functions, and leaders. Have pillars of ownership so your teams know who to go to.
• Product: The best sellers are product experts. Jumpstart that journey for them with an overview of the product and the upcoming roadmap. Where are you strong and where are you weak? What do customers get excited about? This is especially critical if you want to explore product-led growth or sales in the future.
• Administrativia: Include the basics of what they need to get started at your company. What’s the quick checklist of software they need provisioned, steps they need to complete for HR, and anything else they need to get set up and start working.

Sales Strategy. Second, establish your current go-to-market strategy. What’s your ideal customer profile (ICP) and how have you successfully closed deals so far? Then build on that by ensuring the team is continuing to document what’s working and what’s not. This can be supported by sales systems and tooling that can help you understand your customer and prospect demographics and also collect information on who you’re competing against and why you won or lost. (For more detail on initial systems and tooling, see Part 3: Systems).

Ideal Customer Profile and Persona: What’s your addressable market and what’s your near-term addressable market? What roles and functions do you sell into? A great example ICP and Persona definition would be:

• Revenue: Companies with $25M — $100M in revenue
• Industries: All industries, but a focus on software
• Geo: US and Canada
• Budget of $10,000+
• Persona: VPs of Sales who have a pain point around forecasting

Competitive Landscape: Who are your competitors and how do you position yourself?

What’s the customer journey and what’s your sales process? Often you’ll want to include sales stages and their definitions and the key handoff points between sales development, account executives, and customer success.

It’s not a set it and forget it world. As a founder, make time to check in with your newly formed team to get their perspectives on customer conversations. Invest in simple, lightweight processes to capture challenges and successes within deal cycles. Prioritize time to join calls as you’re scaling the sales function to hear prospect and customer views on the product, pricing, and value proposition. Getting feedback directly from prospects and customers was a powerful driver for your learning and the company’s growth in the early stages and it’s important to retain an avenue for that going forward.

That’s it for Enablement. At a later point you can start building out other documentation such as vertical specific sales content, renewal playbooks, or rules of engagement.

Sales Compensation Plans

Quotas and commissions are typically two sides of the same coin. But in your early start, you don’t need to set quotas. Once you have a leader and some critical mass (5+ reps), you can set quotas and go through the process of mapping the finance plan, going through over-assign for the leader, and then setting individual targets.

Keep it simple and set them up for success. Sale compensation is both an art and a science and can be a whole course in itself. In fact, consulting businesses are even built around this one facet of GTM teams. The goals of your sales compensation plan are:

1. Drive individual performance
2. Align team actions with company goals
3. Attract and retain talent

This can manifest itself in complex plans spanning accelerators, decelerators, clawbacks, SPIFFs, etc. We strongly believe that in the beginning you should keep it simple and transparent. It should be easy to explain and attract talent — keep in mind you’ll be competing against the top tech firms.

• Pay a competitive base salary. Everyone needs a competitive base salary to feel safe and protected; this doesn’t need to be 75th percentile, but try to get close to market midpoint.
• Set a hurdle where they have to bring in enough business to pay their cost to the business — this means no commission until they pay for themselves. Setting this hurdle protects your company from poor performers.
• Then pay them 20–25% of ACV as commissions. This is often the upper echelon of their commissions rate at other established companies. You’re giving them an opportunity to out earn their old job if they crush it and at a rate that lines up what you’d offer day in and day out. In sales operations, we aim to benchmark against a Quota to OTE ratio of 5:1.

With this, you’ve set up a plan that de-risks the opportunity for strong performers, that gives them an attractive carrot, and protects the business, all while keeping it simple. Moreover, it’s a great recruiting tool to attract the right early hires on your sales team. You want to hire people who can get excited by this plan and the opportunity. It’s an opportunity to be a ground zero sales hire on your growth journey and let them know they’ll have an opportunity to grow and develop into management and leadership.

Key actions

• Create clear pricing and packaging that your customers can easily understand and one that also promotes growth.
• Make an onboarding checklist for your new hires.
• Clearly define your ideal customer profile and personas.
• Ensure you have a sales compensation plan that pays for performance, drives success, and attracts talent.

If you feel like you’ve got a good handle on processes, and you’ve ticked all the boxes on the people front, then it’s definitely time to check out our next post on systems.