Operating lessons.

A venture fund brought me on as an advisor: “Talk about what’s obvious to you”. This is a rough audit, of my experience and ideas:

As a glutton for punishment, I began my startup life on a bootstrapped founding team, where hiring 2 bad AEs, could kill us. I became the top seller and replicated my approach as a Head of Sales. We got to $XXM ARR and exited. The key lessons: Hire 2 reps to learn quicker, get data on relative performance & benefit from team dynamics. But also watch your COGs. Slim margins make for slim valuations.

I contrast bootstrapping with being first 20 at Zenefits, where as Napoleon (Parker Conrad) said, “The world was made in six days, sir. You can ask me for anything you like, except time..’ Zenefits deserves it’s own book, but at a fundamental level Zenefits was a child of an amazing business model and explosive growth that allowed us to hire the best of the best, then get out of their way. Maintain talent density was the key to success.

I operate primarily in SaaS, but have seen startups stray dangerously close to a service business (if roadmap is too slow). It’s ok to use services to break open Enterprise deals (under 20% of ARR), but you have to be very clear on both the use case (there are many ways to implement an AI project that are mutually independent) and the scope (how many hours, for how long, buyers will always ask for more).

I have seen distrust of technology, in the industrial sector (many don’t know [or care] what the hamburger menu icon is on mobile) and the shiny edge of innovation though computer vision (its all about training data). The key in both is the bridge from R&D to production environments, at scale, with integrations and change management required.

I’ve sold small HR deals and hefty ($3M) Enterprise ones (startups should do both, for ARR growth & consistency). The key in both is speaking to power. The key to the second door, in the Enterprise is adoption by the users. Your app might be magic, but the deal won’t renew if it requires obscure technical wizardry. Obviously costs: sales cycle length and hours required from support teams.

I have dabbled in B2C in gaming (with a marketplace bolted on) and data visualization plays (shifting the core community is hard). The goal in both cases is understanding who will actually pay for the product. You artsy data viz consultant cares little for enterprise governance features and vice versa.

I have seen big and “easy” advertising budgets ($100k+/month if it works) and business models where monetization is much tougher (selling anything in ‘23). Advertising business are tough (in some cases), because your margins get killed by the costs to serve the client ads. Selling in this environment means that you have to ruthlessly focus on priority problems (make sure the rest of the team is on the same page).

I have cofounded a startup with early Whatsapp engineers (big exits change expectations) and talked to founder friends through winding down failed ones (the valley forgives, but hides failure). Being honest with everyone (starting with yourself) is key. It’s obvious, but harder than it seems. Some details only become important when the going gets tough.

I have pitched moonshots with nothing more than wire frames (mobile game => recruiting platform) and made cases for $100M+ business lines to McKinsey Partners (consulting dollars on top of SaaS revenue). In both cases it is about how the partner makes money. Another key is to use partner language when selling, to easy socialization.

I learned the language of the Challenger Sale from the team that created it (CEB, now Gartner) and went on to build 5 sales organizations (and counting). The trick to recruiting is finding people with an existing super power and helping them nurture it.

I love story telling (especially with data), so my passion for data visualizations make sense. It doesn’t hurt that it’s backed by Sequoia (Jim Goetz) and sits on top of D3 (300M+ downloads). Our unfair competitive advantage is the largest data viz community on the web. Communities are the future of front loading sales pipelines.

I witnessed $500M+ rounds (with celebs showing up at the office for secondary) and seen multiple term sheets get pulled (greed turns to fear very fast). Almost every startup darling will fly too close to the sun. Those who made you into a aspiration may also enjoy tearing you down. Gotta have thick skin to be in this game.

In most startups, I found areas with market pull and used the momentum to find monetizeable use cases. Matt Murphy, a senior partner from Menlo ventures told me, “find where the sale is easy”. That’s really it. Build things people want and scale in areas of momentum.