Luigi MallardoI’ve learned the beauty and power of tales thanks to my son. Having worked with many startup and scaleup CEOs, I was thinking to this little interesting book used in many business schools, “Who Moved My Cheese”.
The story is about a few mice; the mouse that does well is the one who (1) realizes the early signs that the “cheese” is going to finish soon and (2) finds the courage and common sense to identify the right things to do, then finally (3) she can make it happen.
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In B2B SaaS in mainland Europe an interesting tale could be about 3 CEOs that share the same ambitions (grow the company, work hard, enjoy the journey, become multimillionaires), but they are 3 different characters and they act differently.
BOTTLENECK CEO
The Bottleneck CEO tends to micromanage too much.
In B2B SaaS, scaleups with Bottleneck Founders, who can be good salespeople as well, can grow well at the beginning but at some point, by 3-5 million € in ARR at the latest, the revenue growth start to decline sharply and in 1-2 years it can go to zero.
An “enlightened” Bottleneck CEO recognizes not too late that the company go-to-market approach needs to be professionalized and starts to build teams and processes with the appropriate experience and focus.
Many Bottleneck CEOs unfortunately delay too much the needed transformation and then it becomes a real issue or, worst case scenario, they mutate in a MARADONA CEO once they get close to a burnout for accumulating too much stuff on their shoulders.
MARADONA CEO
Why Maradona? Because she’s looking all the time for that superstar VP of Sales that will sort things out so she can focus on the things she likes the most: the product, the press, raising money, whatever.
As soon as the company raises a decent round, the MARADONA CEO recruits the VP Sales and most of the times it’s a failure. After one year nothing has happened, the VP vanished, got fired or resigned and things are again on the CEO shoulders.
What is the cost of this? Founder dilution on the next round plus hundreds of thousands € in management, operational and opportunity costs.
Read more here about the common mistakes (link):
- Timing
- Profile
- Expectations
- Onboarding
A typical case is the Maradona CEO who gives one or two shots of VP Sales. If none works then the Bottleneck soul takes the lead again and the CEO may lose faith in the VP formula.
DOWN-TO-EARTH CEO
The Down-To-Earth CEO does not want to reinvent the wheel on sales scaling best practices.
She knows that to scale healthily she needs:
- Strict strategic focus and a solid value proposition and product marketing
- Obsession for sales process and funnel KPI’s
- The right sales people with the appropriate experience, in the right roles, at the right time.
- An experienced VP after the team has already a few high performers.
The Down-To-Earth CEO knows that the biggest threat to scalability is not executing on time a set of Go-To-Market Fundamentals for a healthy and sustainable revenue growth. There would most likely be slow down of revenue growth for one or a combination of the following reasons:
- Raw sales process and Playbook (eg every deal is different and new sales reps struggle to learn)
- Value proposition and Outbound sales struggling on bigger deals
- Biggest mistake – the VP Sales
Her Go-To-Market vision for B2B SaaS
She knows the biggest driver of customer loyalty is the Sales Experience she’s able to build into the organisation.
The Down-To-Earth CEO will scale the team, including an experienced VP Sales, after having reached concrete signals of revenue predictability.
I’ve seen many CEOs living their Bottleneck “childhood” too long, and then moving all of a sudden into a “Maradona” mode, looking for the great VP Sales.
It doesn’t work 90% of the times, especially when they have high revenue expectation not backed up by a working engine and they need to start from scratch a sales team or have an existing team with specific issues and wrong “postures”.
Other CEOs, on the contrary, as soon as they decide to professionalize the sales engine, become too perfectionists about sales process, CRM, tracking or other techie stuff. Wrong focus.
The Down-To-Earth CEO knows that the Process is just one of the 4 Pillars needed for a healthy go-to-market execution, it’s just one leg in a long journey.
To scale healthily you need two legs and two arms, well harmonised.
Can you imagine someone running a race with only one leg, without the other leg, and with no arms?
CONCLUSIONS
VCs have been investing a lot of money and there is a general concern about the exits.
Many B2B SaaS Scaleups are injured and at risk of future devaluation or extinction for a combination of inappropriate go-to-market execution and for the impact of the storm we have been experiencing after the pandemic.
Many of these companies can be recuperated if we:
- Calm down and stop wasting energy on unicorn infatuation
- Stop believing in ‘growth at all cost´mindset
- Focus on exits based on revenue and process engineering
- Stop thinking that hiring a better VP Sales is always the solution
Why do you think the average tenure of a Revenue Leader (VP Sales and CRO) is less than a year and a half, everywhere?
If you enjoyed this post, you will also like Is the classic” VP Sales model broken in mainland Europe? and Game Plan for a Healthy Go-To-Market in B2B SaaS
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