Sam Jacobs’ Post

Here’s a frightening number for GTM folks: The cost of growth has increased 72%!  That’s according to David Spitz (of BenchSights) who monitors SaaS closely. This is why growth rates for recurring revenue businesses have been cut in half over the last 24 months from an average of 36% to 18%. So what’s the answer? Here's what I'm doing: 1. Create a GTM office and infrastructure that explicitly aligns Marketing, Sales, Customer Success, and Product.  2. Create a regular weekly or bi-weekly meeting whose sole intention is aligning the GTM departments 3. Incentivize and compensate your GTM executives (eg CRO, CMO, CCO or VP Sales, Marketing, CS) the same way.  4. Dispense with quarterly commissions for CROs and create an annual bonus structure that aligns the GTM team primarily around retention. 5. Use Revenue Operations to create a single consistent data layer that each team leverages and ensure that each team does not have its own data set 6. Explicitly begin the alignment from the moment the prospect becomes aware of what you do and ensure messaging is tightly aligned against an agreed Ideal Customer Profile 7. Ensure that the months and quarters are celebrating Net Revenue Retention and Net Revenue Growth vs simply New ARR or New Revenue booked 8. Extend the understanding of the journey through 3 renewals and map key activities through at least 3 years of engagement with the customer ensuring you are delivering consistent value the entire time 9. Understand that the initial sale is in explicitly in the first ¼ to ⅓ of the relationship and treat it with that level of consideration.  It is not the end.  It is merely the beginning.  There should be at least 3 more annual sales to the same customer over the subsequent 3 years. The only way to grow in a capital constrained environment is to align around long-term value delivery for the customer.  This is the fundamental principle underpinning the GTM movement and the reason me, Sangram Vajre, 🐶 Jacco van der Kooij, and our teams created the GTM Consortium. If you want to join, apply here: https://gtmconsortium.com/

We're done gating content. Here's Pavilion's full 2024 Executive Compensation Report (and the 10 most interesting findings) 1. Big Drop in OTE: The median annual On-Target Earnings for execs plummeted by 31%. It’s not about dreaming up new compensation schemes; it’s about facing the harsh reality of falling bonuses and missed revenue targets. 2. Negotiation Power Slipping Away: The average length of negotiations has shortened. Aligning on compensation is tougher now, with less wiggle room for execs. 3. Equity Losing Its Shine: As economic headwinds stiffen, the perceived value of equity among execs has dipped. Companies are handing out less, and what’s given out isn’t seen as golden anymore. 4. Base Pay Steady but Uninspiring: While base salaries have held relatively steady, this stability offers little solace when variable pay — a significant portion of total compensation — has crashed. 5. Layoffs and the Talent Pool: Over 305,000 U.S. workers were laid off last year, tightening the talent pool. It’s not about gathering more candidates; it’s about strategically navigating this smaller pool to find quality hires. 6. Revenue Targets Unrealistic: Many companies have held onto high revenue targets from better economic times, setting execs up for failure. It’s not just about setting goals; it’s about setting achievable goals that don’t demoralize your team. 7. Severance Negotiations Tougher: With layoffs on the rise, you’d think more execs would secure better severance terms. Instead, the rate of execs with pre-negotiated severance has actually decreased. It’s about securing the parachute, not just jumping on board. 8. The Quota Quandary: Only 7% of companies reported that all their sales teams met quotas. When over half miss the mark, it’s not about pushing harder; it’s about aligning expectations with reality. 9. Shift in Leverage at the Negotiation Table: The power dynamics at the negotiation table have shifted noticeably back towards employers. It’s about understanding this new landscape to navigate it effectively. 10. Emerging Opportunities Despite Challenges: The contraction in the job market and decrease in compensation elements create a competitive environment. It’s about leveraging this to attract those who are motivated to innovate and drive growth, despite the odds. Save + Download the Full Report below 👇

At the enterprise level, the best product loses all the time. Why? Because sellers don’t understand the POWER LINE. BACKGROUND What is the power line? Above the power line, the executive team makes decisions that drive the future direction of the company. They are literally in power and their *motivations* determine the entire company’s strategic direction. Below the power line, the team supporting executives is hard at work trying to move the business forward. Sellers without the right enterprise experience tend to focus on OPERATIONAL EFFICIENCY. - Things that save time - Things that save small amounts of money - Things with better bells and whistles But that’s not what motivates people above the power line.  Above the power line motivations include 4 types of pain: 1. Cultural pain 2. Strategic pain 3. Financial pain 4. Political pain Your solution might save a junior employee 10 hours per week, but even when that’s extrapolated across the entire organization, it may not move the needle if the executive team has other priorities.  Those priorities might include - Moving into a new market - Avoiding regulatory scrutiny - Positioning the company to be acquired  - Bolstering a new product line to demonstrate extensibility To drive enterprise sales, understand the power line and ensure you are solving problems at the C-suite that sit above the power line.

13 signs your startup might have early product market fit: 1. You’re sleeping well at night 2. People are finding your product and you’re not doing any marketing 3. People are telling their friends about you (in a good way). 4. Almost everything you try works. Some things work big. Some things work small. But almost every thing works in some way. 5. Some days, it feels like cheating. Like it’s a bit too easy. 6. All your salespeople are hitting goals and you’re thinking about raising quota. 7. You are growing every month and are still running everything off of Google Sheets. 8. Your unit economics are eye popping. 9. Early NPS is over 70 10. You signed a Fortune 1000 company and aren’t quite sure how or why. 11. Junior people are getting rapidly promoted simply to respond to market demand. 12. It feels like you’re being pulled into the market vs you pushing. 13. People say, “I can’t believe this didn’t exist already.” What are some others you can think of? Add them in the comments!

Is your equity a lottery ticket? Equity in a Profitable Efficient Growth (PEG) business like Pavilion is worth more than equity in a FAKE UNICORN (FU). Even though FU is probably doing 5-7x of a PEG company. Why?  1. FU raised capital at a 40x ARR valuation in 2021, but three years later, it's valued at only 30% of its last funding round. 2. Despite growth, punitive liquidation preferences from multiple funding rounds mean that even if FU approaches its recent valuation, common shareholders—including employees—would see nothing. 3. FU remains deeply unprofitable with a looming terminal date. This date coincides with declining GRR and NRR, and flattening growth—timing that could hardly be worse. 4. FU employees, lacking special equity rights, face a tough choice with significant tax implications within 90 days of departure. So what about PEG? Well, let’s use Pavilion as an example.  1. In 2021, we raised at a rich valuation, but now we're closing in on that target and are set to improve further over the next two years. 2. We are cash flow positive and have definitional value (eg the cash) that will continue to build on the balance sheet.  3. This cash flow allows us to enhance the Member experience and develop a compelling community and product, free from the fear of a looming terminal date. Cash flow positivity is fundamentally customer-centric. 4. Our primary investor, Elephant Ventures, has been supportive and patient, making the journey through uncertainties smoother and less stressful. 5. We offer every employee a two-year window to exercise their options after leaving—an equity provision I believe is crucial. It provides time to assess the company's performance. In two separate instances, that provision would have changed my life had I had it.  6. Employees also benefit from double trigger acceleration, ensuring that if we're acquired and they're made redundant, all their unvested options accelerate. 7. As CEO and Founder, I'm committed to creating liquidity within the next 5-10 years for all shareholders, many of whom are Pavilion Members. This responsibility is one I take seriously. So yes, lots of people say your equity is a lottery ticket.  It’s definitely a lottery ticket if you’re a shareholder of FU. They still have a great product, they still have a great team.  And there’s a chance they'll turn it around. But equity in a cash flow positive business where the shareholders, customers, and employees are all aligned - those are just better odds. Odds I’ll take every single day.  PEG > FU

Well ladies and germs, Mercury is officially out of retrograde. Time to unclog those pipes, make some plans, and get those contracts signed. Who knows? Maybe Adam Robinson and 6sense Inc. will even make up. Anything is possible!

Have you ever wanted to learn about a new piece of tech but didn't because you were afraid of getting stuck in the never-ending SDR > AE > Discovery sales process? You're in luck! Pavilion's Demo Day will give attendees the opportunity to get quick, no-pressure 10-minute demos of the most popular new products for Executives. Come join us TODAY at 12pm ET. Here's the lineup: Exclaimer: Redefine email signatures with Exclaimer: Maximize brand impact and ROI through personalized 1:1 communication. Myko AI: Use conversational AI to explore and analyze your Salesforce data. RevSure AI: Unlike traditional attribution solutions, RevSure brings together full funnel intelligence & attribution with predictive intelligence and prescriptive recommendations to 3x pipeline. Dock: Dock makes it easy to set up digital sales rooms, onboarding plans, client portals and project hubs. RevAmp: RevAmp helps Go-to-Market teams make faster and better decisions with automated, end-to-end monitoring and analysis across the entire customer journey. Docket Inc: Docket is your virtual sales engineer that learns from tribal knowledge from across your company and equips all your go-to-market teams with critical answers at every stage of a complex deal. Register here: https://lnkd.in/gi3utYQF

Focusing on sales is killing companies. Why is that? Because the presale funnel is fully architected. We know how many leads we get. We know our win rate. We know our average deal size is. We know the length of our average deal cycle. But do companies have a member health score? Do they know how to articulate time to value post-onboarding? Do they understand the percentage of customers that move from green to yellow, and therefore need an intervention? Do they know the customers who need a call or need to use a different part of the product? Because these are the things that lead to retention. And the thing that will drive your business over time is retention. Not sales. Without retention you simply cannot grow. P.S. Pavilion's Build Your Retention Playbook course starts May 8 DM me if you want to join.

I don’t know any company that needs more ideas. Most companies, including ours, know the answers already. We’ve all got plenty of ideas. I can rattle 20 off the top of my head. The trick isn’t thinking up new stuff to do. The trick is is prioritizing the right stuff from all the possible stuff. The trick is lining up a large group of humans into an aligned team and organizing that team, through systems, process, data, culture, and leadership, to drive the best possible ideas to their natural conclusion. To turn ideas into reality. That’s the hard part.

Over the next 36 months, the bloody GTM wars will be won. You may be under the impression the market is saturated. That companies have evaluated the big revenue intelligence and orchestration platforms (i.e. Clari, Outreach, Salesloft, Gong, ZoomInfo) and have made their decisions on what their tech stack will be. But you’d be wrong. Large enterprises are only now waking up to the possibilities of the modern revenue tech stack. The winner of these big categories will emerge not based on their ability to penetrate the mid-market, but their ability to build a clear and compelling sales motion across the non-tech enterprises of financial services, healthcare, and industrial companies.  Who wins the enterprise will win the GTM wars. The winners will do the consolidating. The losers will be consolidated. Buckle up.