The 5 curveballs no founder is fully prepared for when scaling sales teams beyond $100M ARR

Scaling your sales team beyond the $100 million ARR mark is no easy feat, and the challenges can be unexpected.?

Pieter Kemps , Partner at Peak XV Partners (previously Sequoia Capital ), and I just wrapped up a candid and unfiltered session at SaaStr 2023 in San Francisco, where we shared five curveballs that no company founder is ever fully prepared for as they scale their organization $100million ARR and beyond - build a high-performing sales culture.

If you missed it - here is the recap of everything that we discussed.

Curveball #1: When you learn the difference between "doing sales" and "playing sales"?

In my college days, I learned a valuable lesson called Goodhart's Law: "When a measure becomes a target, it ceases to be a good measure." Metrics and dashboards, while essential, only tell part of the story. In Insider's early days, we were too busy "doing" and "executing" to get lost in measurements.

Brian Burns, former IBM VP of Sales, distinguishes between "doing sales" and "playing sales." The former is honest hard work, hustle, and a relentless focus on winning customers, while the latter typically emerges with the introduction of sales metrics and dashboards - and manifests itself as "massaging the metrics".

As a business scales, it inevitably becomes more metric-driven to drive accountability across all teams and levels of the organization. Targets and reporting is introduced as company founders focus more on other areas of their business - usually in logistics, product development, or finance - the act of scaling.?

But, as targets, metrics, and forecasts become measurable and visible - it invites teams to "play" them. This divide between "doing sales" and "playing sales" lies between input metrics (sometimes referred to as leading indicators, e.g., call volume or # of meetings booked) and output metrics (revenue). Input metrics are easy to manipulate, but output metrics are not.

Ultimately - if your input metrics look good, but revenue metrics aren't, then it's time to confront whether your team might be "playing" rather than "doing."

Founders need to stay in control of both input and output metrics. One of the real curveballs on the Insider journey was learning how to confront this behavior quickly and explicitly to build a culture of honesty and transparency.

Founders must always pay careful attention to input and output metrics - talking to reps and customers to understand why you win, why you lose, and the real drivers behind them.

Curveball #2: When you realize toothpaste is the secret to sales success?

Why you should treat tech sales like toothpaste? Whether you are selling a product or service, company founders can take a lesson from the toothpaste industry when it comes to productization. Think about when you you stroll down the toothpaste aisle at CVS or any pharmacy, you encounter brands like Colgate or Aquafresh, each offering over 20+ variations of what is essentially the same core product. They've taken their knowledge of their customers and their product expertise and packaged it with different benefits and price points. This is called "productization," and it's a concept that can help you scale your sales organization exponentially.?

Productization in sales is about creating well-defined and repeatable sales methodologies, tools, and materials that can be consistently applied across various customer segments to streamline the sales process. It transforms your services into tangible product offerings with clear features and pricing structures based on your core audiences.?

In a nutshell, productization is how you turn your expertise into a scalable, sellable product that drives revenue.

It involves an army to get this right - including marketing, product, and enablement - to define these clear and consistent offerings you can market with. Sales Enablement is key here. Everyone talks about the SDR/AE ratio. Still, nobody talks about the headcount ratio between Enablement and AEs - which will scale you faster and help you achieve productization.?

Now you know how to productize, next you need to know when to productize. Many sales leaders and founders discuss "ICP" too early. When you're still on the path to $10M ARR, any sales team discussing ICP will fail; at that phase, you sell where you can sell.. From $10M to $100M ARR and beyond, that's when you talk about ICP - and that's where productization comes in - because you need to create a sales machine to accelerate growth.

Treat tech sales like toothpaste. Embrace productization and empower your unicorn reps to train others. This strategy will propel your sales team from ordinary to extraordinary.

Curveball #3: When you realize top sales performers are made—not hired

Every founder I have ever spoken to has the same problem - "hiring." And most founders are given the same advice time after time: Find the A-players and persuade them to join your startup. The harsh reality is that most high-performing salespeople will probably not want to join your company in the early days. Many will prefer the allure of industry leaders rather than the challenges a startup poses. It's easy to sell a product when you're working for an industry giant like Google or Microsoft — it's much harder to sell something less-known, even harder when maybe your customers do not even realize the pain you are solving yet…

And, if you succeed in bringing an A-player onboard, they often underperform. Why? Because they have not sold here, in this market, with this product, and to this specific customer. They have not necessarily faced the unique challenges of being a disruptor.

But you don't have to hire great salespeople; you can make them. By investing in onboarding and continuous training, you can develop your team into the A-players you need. It may not always be the most scalable or convenient approach, but it's a path to success that allows you to hire A, B, and C players and still end up with an A-team.

In the early days of Insider, we prioritized empathy and domain knowledge over traditional sales skills. Many of our hires had never sold before but shared one crucial trait—an insatiable appetite for learning and growth. Insider invested heavily in their development, training them relentlessly, even during evenings and weekends. Today, these individuals, who did not begin as natural salespeople, are the top performers in the company, leading countries, territories, and continents.

For me, hiring isn't about expertise; it's about rhythm. I have one steadfast rule—regardless of a candidate's experience, I won't hire them if they don't fit into the Insider rhythm.

Never hire for sales expertise alone; hire for fit and culture first.

Curveball #4: When you start investing in demand generation, you'll be either too early or too late

Scaling a startup is a rollercoaster ride, and at a certain point, a shift occurs between marketing and sales. Founders must prepare for this moment—when marketing must step up to generate inbound demand that outpaces outbound efforts. Sales may dominate at $10 Million ARR, but at $100 Million ARR, marketing takes the lead.

By the time this tipping point approaches, I've noticed founders almost always fall into one of two camps:

• The "too early" trap: Founders rush to establish the marketing flywheel and partnerships before thoroughly testing product-market fit or preparing sales and enablement for increased demand.
• The "too late" realization: Some build a great sales machine but overlook the need for an efficient demand generation engine, which stunts pipeline growth.

In the earlier days of Insider, we focused excessively on sales, neglecting marketing's potential. This oversight led to delayed attention to digital marketing, such as SEO and performance marketing.?

Let me share a more recent personal anecdote - when we first entered the US market, we were new and wanted to make a big splash with our first event to create demand. When deciding on our keynote speaker, one person suggested "President Obama," and everyone laughed. But that's what we did. We asked Former President of The United States, Barack Obama, to speak at our annual conference, and he agreed. Our ambition transformed our annual conference into the world's largest customer experience event in the industry, as part of our marketing strategy.

I mention this because when companies are heading towards $100M ARR, founders, and their teams can begin to settle and feel comfortable, losing that survival mentality that takes you from $1 to $1M ARR. But that can-do attitude, zero-optionality, and startup mentality where anything is possible is necessary to reach $100M ARR. So my advice is to book Barack Obama, invest heavily in marketing, continue to be just as relentless as you were on day one, and accept that you will likely be too early or too late to build your demand gen flywheel.?

Curveball #5: When you realize that a founder's quota cannot be delegated

While growing a startup, one thing often comes up: delegation. As your company expands, it's natural to hand off certain responsibilities and remits, but here's one thing you should never delegate — you should never delegate your quota as a founder, especially as you head towards $100 million ARR and beyond. Here are three reasons why (but there are countless more):?

1. As your company grows and your influence grows, founders develop a unique quality for opening doors that others cannot. One of your responsibilities as a founder is to utilize your network, sway, influence (whatever you choose to call it) to drive sales. I have seen it happen multiple times when engaging CxOs at prospects. Often it's not your company, product, or team that hooks them, but you as a founder. Never underestimate the value of this.
2. Founders are also very good at closing doors. By this, I mean that founders often have a unique talent for closing deals. I am often brought into sales cycles in the final stages to help clinch those hard-to-get deals, provide a safety net, or help facilitate a difficult or critical negotiation.
3. You are your customers. Don't let anything come between you and them. I don't want to be disintermediated. I need to listen to my customers, and understand their businesses, goals, challenges, and vision - it is the only way to drive customer obsession and continue to have deep customer empathy.?

Delegating your quota risks putting a wedge between you and the heart of your business. Zero excuses, get on the plane, get on the call, get in the room.

My Co-founder, Serhat, and I are often in customer meetings. Being in constant communication with our customers is critical for us. It's how we scale our business and anticipate the challenges and needs of the market so we can strategize and take action accordingly.

The pitfall many founders fall into is thinking that hiring more salespeople will ultimately lead to more sales. The truth is more nuanced.

Founders who have sold, keep selling, and keep hitting their quotas have an uncanny understanding of their sales processes and teams. They grasp the real potential of their business.

I know I said five curveballs initially, but, our SaaStr session was such a powerful conversation that we also shared two additional takeaways for company founders on tackling some of the most challenging moments they will face on the journey to $100M ARR and beyond.

Bonus #1: When Making The Hardest Decisions: Conviction > Consensus?

Most company founders, by nature, are not people-pleasers. To be effective, they can't be. What sets the best founders apart is their ability to listen - to investors, peers, network, partners, prospects, and customers. They gather feedback and input from all areas. But ultimately, realize that the final decisions rests with them. That realization requires courage of conviction and the wisdom to discern when to accept or decline feedback.

The most effective founders view all feedback as a compass, not a crutch. It should guide but not dictate actions. Achieving greatness requires more than just following others' advice; it involves trusting your gut instinct. While external parties may be able to describe problems or solutions, as founders, we are the closest to our businesses and understand it's character and potential better than anyone else.

The example I often recount in meetings is the give is the story of Karl Benz, the Mercedes Benz founder, who knew that asking people what they wanted before cars would have yielded "faster horses." Instead, he had unwavering conviction in his vision to build the world's first car. That same conviction remains crucial for pioneers and founders today. At Insider, we trust our gut instincts to shape the future of CX and anticipate marketers' needs before they arise. It's about forging our path based on conviction, intuition, and a clear vision of what lies ahead.

Bonus #2: When Co-Founder Conflict Threatens A Fall-Out, Fall Into "The Values Zone"?

Finally, I shared a unique element of Insider during the SaaStr session - the unique dynamic among our six co-founders and how we've managed to not only coexist but thrive in leadership positions within the company.?

Co-founder Conflict is a significant challenge. The latest research from Harvard Business School suggests that Co-Founder Conflict leads to 65% of high-potential firms to fail.

When I first met Jason Lemkin, Founder of SaaStr, he was intrigued by the fact that we had six co-founders and how we handled disagreements.

Conflict does and will happen, but at Insider, it is always rooted in a belief that our collective impact is far greater than anything we could achieve individually. Our resolve to create a lasting impact, rather than pursuing power, status, or selfish gains, has been the cornerstone of conflict resolution among our co-founders. It's about fostering authentic connections, understanding each other's backgrounds, families, dreams, and, most importantly, our shared vision.

To maintain these connections and address conflicts, we established "The Zone of Values," representing our shared purpose and beliefs. Stepping into this zone reminds us why we came together and helps us transcend ego-driven disputes. As a company scales, nurturing these relationships and preserving our shared vision becomes even more vital.

This culture of selflessness, impact, and community-first mentality has permeated every aspect of Insider, and I believe it makes us unique from any other company in our space.?It has been instrumental in shaping our organization's unique culture and success.?

Ultimately, our collective dedication to our "why" continues to drive us forward and overcome any challenges that come our way.

If you made it this far, congratulations and thank you for reading.

The path to achieving $100M ARR is not one commonly traveled, maybe that is why it's filled with so many curveballs that founders are never fully prepared for. I hope that in sharing my experience honestly and openly, other founders may be better prepared for what their journey may bring.

Thank you Pieter Kemps for sharing the stage and your wisdoms, and thank you Jason M. Lemkin for providing the platform to do so.

If you had a favorite takeaway from the session, leave your thoughts in the comments below. ??

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