First principles + 'Is that true?' fixes bad GTM practices

If you have ever heard a dogmatic proclamation similar in nature to the following, then this article is for you:

"We need 3X quota in pipeline"

"We have to hand off the new accounts from hunters to farmers"

"The product has internal virality - We don't need sales people."

As a salesperson in my early 20's I found myself owning industrial accounts for a systems integrator - In order to earn the right as an advisor I took it upon myself to dig into manufacturing principles like the 'Theory of constraints' and the '5 Whys'* as management practices. It turns out that both of these are helpful in unlocking value in our GTM organizations, and foundational to both is uncovering what is TRUE.

When a new revenue leader joins an organization, their first 30 days includes being laser-focused on understanding reality, without the perspective distortion lens of history. I recall being at Yammer (akin to Slack, before Slack) when the PLG motion was starting to slow and the sales led motion was really ramping up. One of the assumptions being made at the time was that all prospects (including inbound) should be addressed by an SDR before an AE took ownership. My modified version of the principles above was to ask, "Why, and what else must be true for this to be valid?"

What I found was that:

1. The unit economics of deals <$5K just didn't make sense. We were losing money on every deal and trying to make up for it in volume (Ok, this is an oversimplification, but the LTV on these small accounts was too low to account for the CAC, due to high churn in small accounts).
2. The experienced SDRs could be given 'rails' to stay on for simple transactions and close their own deals.

This exercise improved sales efficiency overall due to the following:

• AEs only spent time on larger deals
• The CAC for small deals was reduced to the point of hitting the unit economics we needed.
• SDRs were getting closing experience, which greatly reduced their ramp time as a 1st time AE.

In the spirit of continuous improvement and when taking on new contexts, it is critical that we strip away assumptions and ask two questions until we exhaust all avenues:

1. "Why?"
2. "Is that true?"

"Sapere aude" - Dare to know.

__________________________________________________________________________________

*The '5 Whys' management practice originated from the Toyota Production System, which used it as a core component of their problem-solving culture. It is founded in the belief that we need to apply first principles thing to problems - IE discard existing conventions and assumptions and instead, focus on what is absolutely true, which is accomplished by focusing on the core elements and their relationships at the heart of the problem.