Let’s start with what should be obvious: what separates SaaS startups that succeed at scaling from those that don’t is not necessarily the fact that they have a better product, but rather that they consistently figure out ways to unlock growth before running out of cash.
Suppose a startup just raised a Seed fund or Series A. The expectation from investors is that within a given timeframe they will hit a set of milestones that will derisk their investment in the company and earn them future backing. One approach would be for the founder to reverse engineer from the next round and ask herself three important questions to guide strategy: What are the drivers that will help hit those milestones? Where are we today with respect to those drivers? How can we get them to where we need to be?
It is the last question that is usually trickier to answer – especially when it comes to revenue. Whether the next milestone is to double, triple or grow revenue double digits, cash burn is also a critical consideration. There needs to be a plan to get there and enough runway to do so before needing to fundraise. Unfortunately a number of startups founders don’t know how to build a solid Go-To-Market plan before starting to spend their cash or worse – consider spending cash on Sales and Marketing a plan in itself. While B2C startups may get away with it, this is often a fatal mistake in B2B where unlocking growth is a very different beast.
This is where the Hypergrowth Sales Playbook aims to assist. It is a systematic and perpetual process to help an Enterprise-focused startup find a scalable, repeatable and cash efficient path to growth before running out of resources.
The use of the word ‘perpetual’ is deliberate: you may strike gold with a model that allows you to scale to $100M on its own but more realistically hypergrowth will require a combination of models for different types of customers, channels or products. Besides, if you do find a single model to scale to $100M, why stop there?
The use of ‘cash efficient’ instead of ‘profitable’ is also deliberate. Finding a cash efficient model provides more flexibility than trying to hit profitability at all costs. Some startups may have a lot of cash in the bank or be willing to forgo some margin in order to gain market share or accelerate network effects. Whatever the strategic reason; however, being able to turn back the dials to become profitable should always be a critical factor in evaluating the validity of a growth model.
I am strong believer in the scientific method and running experiments. Some of you will notice parallels with Customer Development and Lean Startup methodologies – this is no coincidence. Not only is this playbook a systematic process to find Go-To-Market fit the same way Lean is a process to find Product/Market fit, it also incorporates an array of similar philosophies that I also strongly believe in: customer-centricity, experimentation and iteration, cash-efficiency, ruthless prioritization and focus to name a few. It is also for these reasons that I believe that this playbook will enable product founders and sales leaders in particular to speak a similar language.
The approach doesn’t mean not spending money or overly refraining from investing in growth but rather being cash and resource efficient until there is validation that it is time to hit the gas for a given market or product. Neither that it means growing slowly – quite the opposite. Perpetually finding and building new growth engines while existing ones are firing produces compound effects that lead to hypergrowth.
Finally, I should probably add a disclaimer at this point that no methodology or playbook can guarantee success. There are no silver bullets. If scaling were that easy there would be many more unicorn SaaS companies by now. This blog is my humble attempt at sharing an approach that I have developed over the years using first-hand experience with my own teams along with an array of methodologies and concepts from others. Ultimately, with your input helping, I believe the most important output will be the learnings that will be provided from continuous feedback.
Thank you for reading and looking forward to sharing the Hypergrowth Sales Playbook with you in the next post.
