500startups unSEXY conference

1. Beautiful accounting software
Selling un$EXY
Insights from building a sales team
Sunday, August 11, 13

2. “If you hire clowns you’ll
end up with a circus”
Sunday, August 11, 13

3. President, Xero US
@sutherlandjamie
Hi! I’m Jamie Sutherland.
Sunday, August 11, 13

4. Sunday, August 11, 13

5. • Global leader in online accounting
• 193,000+ paying businesses
• 7,400+ Xero accounting partners
• 400+ staff (US HQ in San Francisco)
• Bank feeds from 5000+ institutions
2007 2008 2009 2010 2011
Introducing Xero
2012
Sunday, August 11, 13

6. Insight 1
Define your business goals
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7. Business goals
Business
goals
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8. Business goals
Business
goals
Market
share
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9. Business goals
Business
goals
Revenue
Market
share
Sunday, August 11, 13

10. Business goals
Business
goals
Profitability
Revenue
Market
share
Sunday, August 11, 13

11. Sunday, August 11, 13

12. Insight 2
Appropriate sales structure
Sunday, August 11, 13

13. Team structure
• What are you hiring for?
• Web sales → can you sell with no-touch?
• Telesales → can you contract a telesales agency to do your sales?
• Inside sales → can you product be sold with phone calls, emails, and online demos?
• Field sales → does the sale of your product require in-person meetings?
Web sales Telesales Inside sales Field sales
Product complexity
Sunday, August 11, 13

14. Commission plans
Compensation
• Base salary
• 50-100% commission / quota
• Equity
Onboarding / Ramp
• Management by objective (MBO)
• Recoverable & guaranteed draws
Sunday, August 11, 13

15. Insight 3
Sort out your recruit strategy
Sunday, August 11, 13

16. Define the role
• Spend the time to create a job description
• What are the goals for the role? 1st month, first 3 months, full year
• What exactly are you hiring for?
• define the optimal skills
• define the optimal experience
• define the optimal domain knowledge
Sunday, August 11, 13

17. Hiring models
Philosophies
• Hire really smart, amazingly talented people and they’ll figure it out
• Hire people based on experience, previous success, domain expertise
Hiring strategies
• Do-it-yourself
• In-house recruiter
• Outsourced recruiter
• Retainer
• Fee for placement
Sunday, August 11, 13

18. Insight 4
Metrics matter
Sunday, August 11, 13

19. Metrics matter
Sales rep metrics
# calls
# connections
# closes
%
Web metrics
# unique visitors
# trials
# paid
%
% %
Sunday, August 11, 13

20. Important SaaS metrics
1. Monthly recurring revenue (MRR)
2. Churn rate
3. Lifetime Value of a Customer (LTV)
4. Cost to acquire a customer (CAC)
5. Months to recover CAC
Sunday, August 11, 13

21. Rule of thumb
CAC =
sales/mktg expenses
# of customers acquired
Sunday, August 11, 13

22. CAC =
sales/mktg expenses
# of customers acquired
LTV =
ARPU
cost to serve
1
x
churn
Rule of thumb
Sunday, August 11, 13

23. CAC =
sales/mktg expenses
# of customers acquired
LTV =
ARPU
cost to serve
1
x
churn
Rule of thumb
Sunday, August 11, 13

24. Rule of thumb
→ LTV should be 3x greater than CAC
→ Salesforce / Constant Contact are at 5 x greater than CAC
→ recover CAC in under 12 months
David Skok, Matrix Partners
1.
1.
Sunday, August 11, 13

25. But, I’m just getting started...
→ don’t waste time with fantasy spreadsheets
→ use as a guiding principle
→ get a sense of your annual contract value
→ set up a quick scenario analysis around potential churn rates and cost to serve
Sunday, August 11, 13

26. Insight 5
Have fun
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31. No matter how great of a
product you build, it only
matters if people buy it
Sunday, August 11, 13

32. “If you build it, the people
will come”....
Maybe. Odds go up if you
have a great sales team to
help make that happen.
Sunday, August 11, 13

33. Beautiful accounting software
Thank you
Jamie Sutherland
President, Xero US
@sutherlandjamie
Sunday, August 11, 13