This document discusses the sales learning curve (SLC) that companies experience when bringing new products and services to market. It notes that just as manufacturing costs decrease along a learning curve as production volumes increase, the sales yield, or production per sales rep, also increases along an SLC as organizational learning occurs. The document uses a case study of a company called NOCASH that experienced financial difficulties after rapidly hiring a large sales force before its SLC was accounted for. It advocates planning sales deployments based on an understanding of the SLC to avoid excessive cash burn and more accurately determine the timeline and costs to reach cash flow breakeven.
How to Build Your Customer Onboarding PlaybookAmity
Onboarding is a key Customer Success responsibility that can make or break your relationship. During onboarding, a CSM has the opportunity to trigger behavior change, set realistic goals, and define success plans. This opportunity comes with a responsibility - that of ensuring the customer gets value as quickly as possible.
In order to improve that time to first value, you need to create and perfect your onboarding playbook to closely define the tools and actions you’ll need for success.
With a set of documented standard steps, you'll be able to streamline and unify your onboarding process into a proactive game plan.
Market sizing TAM SAM SOM Target MarketReza Hashemi
Startups need a clear understanding of their market segment and show know about SAM, TAM abd SOM. As a Mentor in StartupWeekend and NEXT program, I have noticed that many entrepreneurs are not familiar with these terms. Here’s a quick explanation of what they mean, as an addition to this useful slides (Copyright notes inside) :TAM is Your Total Available or Addressable Market (everyone you wish to reach with your product) , SAM is Your Segmented Addressable Market or Served Available Market (the portion of TAM you will target), SOM is Your Share of the Market (the subset of your SAM that you will realistically reach – particularly in the first few years of your business), SOM is known as Target Market in Steve Blanc Startup Manual.
Identifying your TAM, SAM and SOM requires some market research.
Use this modern go-to-market framework to define the activities required to successfully build market-driven products & services that customers will accept.
SiriusDecisions Advanced Waterfall Use Cases - Circulate 2016Full Circle Insights
www.fullcircleinsights.com
Jon Donlon discusses the Demand Waterfall and explores the best practices to unlocking sales and marketing performance in world class organizations.
April 11, 2016 @ the Circulate 2016 conference hosted by Full Circle Insights, a B2B marketing analytics and funnel metrics solution provider.
How to Build Your Customer Onboarding PlaybookAmity
Onboarding is a key Customer Success responsibility that can make or break your relationship. During onboarding, a CSM has the opportunity to trigger behavior change, set realistic goals, and define success plans. This opportunity comes with a responsibility - that of ensuring the customer gets value as quickly as possible.
In order to improve that time to first value, you need to create and perfect your onboarding playbook to closely define the tools and actions you’ll need for success.
With a set of documented standard steps, you'll be able to streamline and unify your onboarding process into a proactive game plan.
Market sizing TAM SAM SOM Target MarketReza Hashemi
Startups need a clear understanding of their market segment and show know about SAM, TAM abd SOM. As a Mentor in StartupWeekend and NEXT program, I have noticed that many entrepreneurs are not familiar with these terms. Here’s a quick explanation of what they mean, as an addition to this useful slides (Copyright notes inside) :TAM is Your Total Available or Addressable Market (everyone you wish to reach with your product) , SAM is Your Segmented Addressable Market or Served Available Market (the portion of TAM you will target), SOM is Your Share of the Market (the subset of your SAM that you will realistically reach – particularly in the first few years of your business), SOM is known as Target Market in Steve Blanc Startup Manual.
Identifying your TAM, SAM and SOM requires some market research.
Use this modern go-to-market framework to define the activities required to successfully build market-driven products & services that customers will accept.
SiriusDecisions Advanced Waterfall Use Cases - Circulate 2016Full Circle Insights
www.fullcircleinsights.com
Jon Donlon discusses the Demand Waterfall and explores the best practices to unlocking sales and marketing performance in world class organizations.
April 11, 2016 @ the Circulate 2016 conference hosted by Full Circle Insights, a B2B marketing analytics and funnel metrics solution provider.
Media Markeying Plan for a New comer in new market. Through this any one could plan all the Marketing tools to implement the marketing strategy in sense of ATL, BTL, Digital marketing & others.
In my talk at the 2017 LAUNCH SCALE conference in San Francisco, I discuss how to get inside your buyer's head to increase funnel conversion rates. In the talk, I cover:
- How to design and build a buyer-centric sales funnel that has low CAC and fast sales cycles.
- How to figure out why your sales funnel isn't working as well as it could be, and how to fix it.
- How to understand the way buyers react to your funnel, and how to use that knowledge to increase funnel conversion rates.
Product Strategy: Idea to Action by Coinbase Sr Product ManagerProduct School
Product Management Event at #ProductCon San Francisco about Product Strategy: Idea to Action by Senior Product Manager at Coinbase, Anna Marie Clifton.
Product-Led Growth is the go-to-market strategy that relies on using the product as the main vehicle to acquire, activate, and retain customers. In this (summarized and simplified) deck, I will explore:
- Why the fastest growing startups use a product-led GTM strategy
- The role of Sales and Marketing under this GTM
- Main marketing and product KPI's
- B2B martech stack
- Pricing SaaS
- Bottom up targeting
Hera LABS is a business accelerator Helping Entrepreneurs Rapidly Accelerate through workshops, accountability groups, LABS (intense sessions of business launch & growth), and consulting. This pitch deck is a template entrepreneurs can use to prepare for angel investing meetings or general investor meetings. Every angel investor is a bit different in what they are looking for, but with this outline, you can be well prepared for those high level questions. Some angel groups require less or more information, so please check requirements before using this outline. This investor pitch deck is meant to guide entrepreneurs through the basics of a pitch, give real-life examples of companies (big and small) who do it / did it right in every topic of the pitch deck. Hope this is useful.
Tam Sam Som PowerPoint Presentation Slides SlideTeam
Presenting this set of slides with name - Tam Sam Som Powerpoint Presentation Slides. We bring to you to the point topic specific slides with apt research and understanding. Putting forth our PPT deck comprises of thirty four slides. Our tailor made Tam Sam Som Powerpoint Presentation Slides editable deck assists planners to segment and expound the topic with brevity. The advantageous slides on Tam Sam Som Powerpoint Presentation Slides is braced with multiple charts and graphs, overviews, analysis templates agenda slides etc. to help boost important aspects of your presentation. Highlight all sorts of related usable templates for important considerations. Our deck finds applicability amongst all kinds of professionals, managers, individuals, temporary permanent teams involved in any company organization from any field.
Describes the steps required to build a Sales and Marketing Machine that is predictable, scalable, automated, well instrumented, and cost efficient.
This was a presentation that I gave at the Lean Startup Circle in Boston on March 24th, 2011.
This was our final Series A deck. Read more about raising the round in this blog post:
https://medium.com/@DanielleMorrill/welcome-brad-feld-to-the-mattermark-team-announcing-our-6-5m-series-a-dd9532fc1b39
Marketing Plan Presentation Template 2018Demand Metric
Use this marketing plan presentation template to quickly document a modern marketing plan. Chapters include: aspiration, situation, objectives, strategy, content, technology and budget. Your stakeholders will be impressed with the analysis, design, brevity of your marketing plan.
As part of the regional leadership team, Peter leads the Commercial Marketing team in EMEA. In this master class, he talks about how Marketo uses marketing automation itself. With more than 25 years of experience in marketing, Peter has contributed to the success of multiple brands in the software and digital media industry, including Marketo, Microsoft Surface, Skype, Xbox and MSN.
Subscribed 2017: Achieve ‘Super-Grower’ Status With Strategic Pricing & Packa...Zuora, Inc.
Pricing and packaging is one of the most important levers that subscription businesses can pull to drive growth. Super-growth companies know that taking a strategic approach to monetizing services is critical to their success. In this all-star session, Price Intelligently will moderate a panel of execs from some of the biggest names in SaaS. Topics include the up-market journey, pricing model shifts, creating and managing cross-sell and upsell strategies, and using subscriber identity to optimize pricing.
Media Markeying Plan for a New comer in new market. Through this any one could plan all the Marketing tools to implement the marketing strategy in sense of ATL, BTL, Digital marketing & others.
In my talk at the 2017 LAUNCH SCALE conference in San Francisco, I discuss how to get inside your buyer's head to increase funnel conversion rates. In the talk, I cover:
- How to design and build a buyer-centric sales funnel that has low CAC and fast sales cycles.
- How to figure out why your sales funnel isn't working as well as it could be, and how to fix it.
- How to understand the way buyers react to your funnel, and how to use that knowledge to increase funnel conversion rates.
Product Strategy: Idea to Action by Coinbase Sr Product ManagerProduct School
Product Management Event at #ProductCon San Francisco about Product Strategy: Idea to Action by Senior Product Manager at Coinbase, Anna Marie Clifton.
Product-Led Growth is the go-to-market strategy that relies on using the product as the main vehicle to acquire, activate, and retain customers. In this (summarized and simplified) deck, I will explore:
- Why the fastest growing startups use a product-led GTM strategy
- The role of Sales and Marketing under this GTM
- Main marketing and product KPI's
- B2B martech stack
- Pricing SaaS
- Bottom up targeting
Hera LABS is a business accelerator Helping Entrepreneurs Rapidly Accelerate through workshops, accountability groups, LABS (intense sessions of business launch & growth), and consulting. This pitch deck is a template entrepreneurs can use to prepare for angel investing meetings or general investor meetings. Every angel investor is a bit different in what they are looking for, but with this outline, you can be well prepared for those high level questions. Some angel groups require less or more information, so please check requirements before using this outline. This investor pitch deck is meant to guide entrepreneurs through the basics of a pitch, give real-life examples of companies (big and small) who do it / did it right in every topic of the pitch deck. Hope this is useful.
Tam Sam Som PowerPoint Presentation Slides SlideTeam
Presenting this set of slides with name - Tam Sam Som Powerpoint Presentation Slides. We bring to you to the point topic specific slides with apt research and understanding. Putting forth our PPT deck comprises of thirty four slides. Our tailor made Tam Sam Som Powerpoint Presentation Slides editable deck assists planners to segment and expound the topic with brevity. The advantageous slides on Tam Sam Som Powerpoint Presentation Slides is braced with multiple charts and graphs, overviews, analysis templates agenda slides etc. to help boost important aspects of your presentation. Highlight all sorts of related usable templates for important considerations. Our deck finds applicability amongst all kinds of professionals, managers, individuals, temporary permanent teams involved in any company organization from any field.
Describes the steps required to build a Sales and Marketing Machine that is predictable, scalable, automated, well instrumented, and cost efficient.
This was a presentation that I gave at the Lean Startup Circle in Boston on March 24th, 2011.
This was our final Series A deck. Read more about raising the round in this blog post:
https://medium.com/@DanielleMorrill/welcome-brad-feld-to-the-mattermark-team-announcing-our-6-5m-series-a-dd9532fc1b39
Marketing Plan Presentation Template 2018Demand Metric
Use this marketing plan presentation template to quickly document a modern marketing plan. Chapters include: aspiration, situation, objectives, strategy, content, technology and budget. Your stakeholders will be impressed with the analysis, design, brevity of your marketing plan.
As part of the regional leadership team, Peter leads the Commercial Marketing team in EMEA. In this master class, he talks about how Marketo uses marketing automation itself. With more than 25 years of experience in marketing, Peter has contributed to the success of multiple brands in the software and digital media industry, including Marketo, Microsoft Surface, Skype, Xbox and MSN.
Subscribed 2017: Achieve ‘Super-Grower’ Status With Strategic Pricing & Packa...Zuora, Inc.
Pricing and packaging is one of the most important levers that subscription businesses can pull to drive growth. Super-growth companies know that taking a strategic approach to monetizing services is critical to their success. In this all-star session, Price Intelligently will moderate a panel of execs from some of the biggest names in SaaS. Topics include the up-market journey, pricing model shifts, creating and managing cross-sell and upsell strategies, and using subscriber identity to optimize pricing.
Increasing Runway Without Sacrificing Growth with Norwest Venture Partners an...saastr
Sean Jacobsohn, Partner @ Norwest Venture Partners
Scott Beechuk, Partner @ Norwest Venture Partners
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Top of mind for many startups during a downturn is the question, “How do we balance investment in growing our business while maintaining a modest burn to extend our time to next funding?” In this session we will explore some creative techniques to grow your business with efficiency. Hear from three VC partners with experience successfully co-founding, leading, and growing startups during previous market downturns
We have had a lot of inquires about the document we circulated during fundraising, so we thought the easiest thing might be to post a somewhat sanitized version as a Finance Tool along with some explanation. This type of Finance Tool will not apply to all companies, but for those looking to raise early stage capital, hopefully it will be a great contribution to the body of knowledge already out there.
Read more at:
http://profitabl.es/finance/resources/tools/sample-fundraising-deck/
Using machine learning to optimize marketing ROI at Honest Company by Roozbeh...Data Con LA
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This event will provide Senior Managers, Entrepreneurs, Sales Managers, Human Resources Managers and Recruiters with the knowledge, insights, tools and techniques required to consistently recruit effective salespeople.
This will typically provide greater than 90% hiring accuracy, reduce staff churn by at least 30% and increase average annual sales per salesperson by 20-40%.
RMD24 | Debunking the non-endemic revenue myth Marvin Vacquier Droop | First ...BBPMedia1
Marvin neemt je in deze presentatie mee in de voordelen van non-endemic advertising op retail media netwerken. Hij brengt ook de uitdagingen in beeld die de markt op dit moment heeft op het gebied van retail media voor niet-leveranciers.
Retail media wordt gezien als het nieuwe advertising-medium en ook mediabureaus richten massaal retail media-afdelingen op. Merken die niet in de betreffende winkel liggen staan ook nog niet in de rij om op de retail media netwerken te adverteren. Marvin belicht de uitdagingen die er zijn om echt aansluiting te vinden op die markt van non-endemic advertising.
Premium MEAN Stack Development Solutions for Modern BusinessesSynapseIndia
Stay ahead of the curve with our premium MEAN Stack Development Solutions. Our expert developers utilize MongoDB, Express.js, AngularJS, and Node.js to create modern and responsive web applications. Trust us for cutting-edge solutions that drive your business growth and success.
Know more: https://www.synapseindia.com/technology/mean-stack-development-company.html
B2B payments are rapidly changing. Find out the 5 key questions you need to be asking yourself to be sure you are mastering B2B payments today. Learn more at www.BlueSnap.com.
[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
Affordable Stationery Printing Services in Jaipur | Navpack n PrintNavpack & Print
Looking for professional printing services in Jaipur? Navpack n Print offers high-quality and affordable stationery printing for all your business needs. Stand out with custom stationery designs and fast turnaround times. Contact us today for a quote!
Enterprise Excellence is Inclusive Excellence.pdfKaiNexus
Enterprise excellence and inclusive excellence are closely linked, and real-world challenges have shown that both are essential to the success of any organization. To achieve enterprise excellence, organizations must focus on improving their operations and processes while creating an inclusive environment that engages everyone. In this interactive session, the facilitator will highlight commonly established business practices and how they limit our ability to engage everyone every day. More importantly, though, participants will likely gain increased awareness of what we can do differently to maximize enterprise excellence through deliberate inclusion.
What is Enterprise Excellence?
Enterprise Excellence is a holistic approach that's aimed at achieving world-class performance across all aspects of the organization.
What might I learn?
A way to engage all in creating Inclusive Excellence. Lessons from the US military and their parallels to the story of Harry Potter. How belt systems and CI teams can destroy inclusive practices. How leadership language invites people to the party. There are three things leaders can do to engage everyone every day: maximizing psychological safety to create environments where folks learn, contribute, and challenge the status quo.
Who might benefit? Anyone and everyone leading folks from the shop floor to top floor.
Dr. William Harvey is a seasoned Operations Leader with extensive experience in chemical processing, manufacturing, and operations management. At Michelman, he currently oversees multiple sites, leading teams in strategic planning and coaching/practicing continuous improvement. William is set to start his eighth year of teaching at the University of Cincinnati where he teaches marketing, finance, and management. William holds various certifications in change management, quality, leadership, operational excellence, team building, and DiSC, among others.
Improving profitability for small businessBen Wann
In this comprehensive presentation, we will explore strategies and practical tips for enhancing profitability in small businesses. Tailored to meet the unique challenges faced by small enterprises, this session covers various aspects that directly impact the bottom line. Attendees will learn how to optimize operational efficiency, manage expenses, and increase revenue through innovative marketing and customer engagement techniques.
Business Valuation Principles for EntrepreneursBen Wann
This insightful presentation is designed to equip entrepreneurs with the essential knowledge and tools needed to accurately value their businesses. Understanding business valuation is crucial for making informed decisions, whether you're seeking investment, planning to sell, or simply want to gauge your company's worth.
Kseniya Leshchenko: Shared development support service model as the way to ma...Lviv Startup Club
Kseniya Leshchenko: Shared development support service model as the way to make small projects with small budgets profitable for the company (UA)
Kyiv PMDay 2024 Summer
Website – www.pmday.org
Youtube – https://www.youtube.com/startuplviv
FB – https://www.facebook.com/pmdayconference
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1008 slc
1. The Sales Learning
Curve
“It Always Takes Longer and Costs
More…”
mleslie@leslieventures.com
Copyright 2008, Mark Leslie 1
2. Development of Entrepreneurial
Companies
► Seed Stage
Creating the Business Plan
► Development Stage
Creating the product
► Go-to-Market Stage
Getting Traction
AKA “The Chasm”
► Market Expansion Stage
► Harvest
Copyright 2008, Mark Leslie 2
3. Where the Risk Is
► Seed Stage
Creating the Business Plan
► Development Stage
Creating the product
► Go-to-Market Stage
Getting Traction
AKA “The Chasm”
► Market Expansion Stage
► Harvest
Copyright 2008, Mark Leslie 3
4. Where the Risk Is
“If We Build It They Will Come”
“When We Build It Will Anyone Come?”
Copyright 2008, Mark Leslie 4
5. Go-to-Market
► Successful Beta
Conversion of Beta’s to customers
► “Go for it”
► It is an exciting and optimistic time…
Copyright 2008, Mark Leslie 5
6. Rapid Sales Deployment -- The
Seduction of the CEO
► Cash Considerations
Growing expense / Zero revenue -- Cash is being consumed
Fastest / least painful route to cash is growing the revenue line as
fast as possible
Pressure from the investors / board
► Competitive start-ups
“We will not forfeit any game by not showing up”
► Each company must deploy to the superset!
A battle to emerge from the pack: “First Mover Advantage”
► Overconfidence
“The beta went great…”
“The press loves us…”
“We’re hot!”
-- (“…and a lot smarter than the other guys…”)
Copyright 2008, Mark Leslie 6
7. The Case of
Nano – Optical Customer
Adaptive Software and
Hardware Corporation
N O C A S H
Copyright 2008, Mark Leslie 7
8. NOCASH: Goes to Market
► With successful Beta in sight…
► Hire the VP Sales
Often times a “regional” level sales manager at
a larger company in similar market
► New VP sets the plan and hires the sales
force based on a “Capacity Model”
Copyright 2008, Mark Leslie 8
9. NOCASH: Revenue Planning -- The
Capacity Model
► Revenue: For each sales rep assume:
Quota
Apply the company’s gross margin
Start up productivity ramp (by quarter)
Attrition
► Expense: For staffing and logistics determine
On-Target-Earnings (OTE) per sales rep
Number of sales reps per manager and cost per manager
Number of system engineers per Field Sales Exec (FSE) and cost
per system engineer
Number of inside sales reps per FSE and cost per rep
Number and build-out of field locations
Copyright 2008, Mark Leslie 9
10. NOCASH: Revenue Planning -- The
Capacity Model
► Revenue: For each sales rep assume:
Quota -- $1.5 M
Gross Margin – 90%
Start up productivity ramp (by quarter) – 0, 1/2, 1
(25%)
Attrition –
~ $ 1,000 K / FSE per year net (after 6 months startup)
► Expense: For staffing and logistics determine
Number of sales reps per manager
Number of system engineers per Field Sales Exec (FSE)
Number of inside sales reps per FSE
Salary and commission levels
Number and build-out of field locations
> $500K / person / year
► Marginal contribution per FSE <= $500K / Yr
Copyright 2008, Mark Leslie 10
11. NOCASH: The Hope
► Based on a $1.0 M / mo burn rate starting point
► Hire 30 sales reps, get to cash flow positive by
end-of-year
1
0
-1
-2
-3
-4 Cash Flow
-5
-6
-7
1st Qtr 2nd 3rd Qtr4th Qtr
Qtr
Copyright 2008, Mark Leslie 11
12. NOCASH: The Reality
0
-1
-2
-3
-4 Cash Flow
-5
-6
-7
1st Qtr 2nd 3rd Qtr4th Qtr
Qtr
► Fire the VP sales and most of the sales force, do a
big cutback
► Maybe fire the CEO…
Copyright 2008, Mark Leslie 12
13. Would You Invest in this Company?
►I just built this device for $10,000
► Unfortunately the market will only pay $100
for this device
► The good news is my engineers tell me that
if we can ramp up the volume to 1,000,000
units we can manufacture the device for
$10
►The name of this company is
INTEL
Copyright 2008, Mark Leslie 14
14. Manufacturing Learning Curve (MLC)
► Well known principle in business
► Cost decreases as volume increase
► Shape of curve differs in different industries
Semiconductor and Steel industry “price on the
curve”
► Learning is non-predictive – everyone doing
their job well
► MLC is visible to us based on available math
cost accounting gives us the points to plot
Copyright 2008, Mark Leslie 15
16. Sales Learning Curve (SLC)
► Analogous to MLC, but focused on sales interface rather
than manufacturing
► Key variable to measure is the effect of learning on SALES
YIELD
Equal to the average production per full time, fully trained sales rep
per year
Not measured, not visible
Sales Yield is to SLC as Product Cost is to MLC
► Like MLC, learning takes place in many ways – “everyone
just doing their job”
► SLC is an Enterprise effect – not just the sales department
Copyright 2008, Mark Leslie 17
17. The Product Centric Corporation
Production Facing Customer Facing
Departments/Employees Departments/Employees
Production Line 1 Customer 1
d
Production Line 2 Customer 2
Engineering Product Marketing
Product Development
Production Line 3 Customer 3
Production Line 4 Customer 4
Manufacturing Learning Sales Learning
Copyright 2008, Mark Leslie 18
18. SLC Learning -- Product
► Completeness
Features
Installability
► Correctness
Does it do what it is supposed to
Does it do what the customers need
► Scalability
► Maintainability and serviceability
► Ecosystem
Does it work in the required environments
Copyright 2008, Mark Leslie 19
19. SLC Learning -- Market
► Positioning
Correct marketing messages
ROI proof
Market segmentation
Competitive Analysis
► Promotion
Customer success stories
Correct and sufficient collateral material
Correct and sufficient shows, PR, advertising
► Price
Across multiple channels
discounts
► Place
Channels of distribution
Copyright 2008, Mark Leslie 20
20. SLC Learning -- Sales
► Sales model
► Sales pitch
► Training and development
► Availability of executive selling
► Correct sales profile
Learning phase
Development phase
Expansion phase
Copyright 2008, Mark Leslie 21
21. The Sales Learning Curve
Standard Quota
Yield
Fully Loaded Cost/SR
Customer Transactions
Copyright 2008, Mark Leslie 22
22. Staffing for Learning
The “Renaissance” Sales Exec
Standard Quota
Yield
Fully Loaded Cost/SR
Customer Transactions
Copyright 2008, Mark Leslie 23
23. Staffing when Marginal Contribution
is Visible
Standard Quota
Yield
Fully Loaded Cost/SR
Customer Transactions
Copyright 2008, Mark Leslie 24
24. “Pedal-to-the-Metal” Staffing
The “Coin Operated” Sales Exec
Standard Quota
2 x Fully Loaded Cost/SR
Yield
Customer Transactions
Copyright 2008, Mark Leslie 25
25. NOCASH Revisited – Pedal-to-the-
Metal Staffing too Early
Standard Quota
Yield
Fully Loaded Cost/SR
Customer Transactions
Copyright 2008, Mark Leslie 26
26. Tracking Sales Yield
► Often times very few data points
► Often time very random data points
► However, any data is better than no data
► An exercise in data smoothing
Six months trailing average
Curve fitting
► But,probably a lack of clarity
► However…
…you will probably know it when you see it
Copyright 2008, Mark Leslie 27
27. Different Types of Companies
Different Shaped Curve
“Faster, Better Cheaper” “Innovator” “Brave New World”
Copyright 2008, Mark Leslie 28
28. The Nature of Learning
Discover Discover
Test RemediateDiscover
Test Remediate
Test Remediate
Discover
Learning is oftentimes sequential
ABC Test Remediate
Copyright 2008, Mark Leslie 30
29. Planning for Learning
► Identify the specific characteristics of your company,
product and market
Develop SLC expected model
Identify, track and report on the learning opportunities
Identify, track and report on sales yield
► Select initial sales personnel to enhance corporate learning
The “Renaissance” Sales Rep
Not the “Coin Operated” Sales Rep
► Mobilize the company for learning
► Do not ramp up expenses
Perhaps reduce R&D expenses at this time
► Set investor and employee expectations to account for
uncertainty and learning
Copyright 2008, Mark Leslie 31
30. Quantitative Methods
► Marginal Contribution analysis
Expected Gross Margin of FESR at Quota
Minus - Cost / year of a fully loaded FESR
Equal - Marginal Contribution
► Breakeven Analysis
Number of required FESRs at Marginal Contribution to offset fixed costs
Less effect of SLC (reduces marginal contribution)
Factor in organizational build-out time – NOCASH example
► Needed 30 FESRs – example showed batch hiring of all of them
► Would need to hire Sales VP, 4 – 5 RMs, and 20 SEs, find offices, develop
training, etc.
► Sparse Data
Curve Fitting
Six months moving averages
► Sales Yield Accounting – the sales version of Cost Accounting
Copyright 2008, Mark Leslie 32
31. Channels of Distribution
► SLC principles are broadly applicable to channel
selling
► All of the same issues relative to “merchantability”
of the product by the company
Company has to make the first sales by the channel
And the communication with the end customer is more
distant
► In addition to all other learning, need to do the
learning relative to channel acceptance as well
Copyright 2008, Mark Leslie 33
32. Time to Cash Flow Breakeven
NOCASH Revisited
Scenario Result
No SLC Effect ►Break Month 15
Even in
►Hire 12 SR’s month1
►Maximum cash burned = $5.0 M
►Hire 2 per month thereafter
Linear SLC over 24 months Month 18
Breakeven in
►Hire 12 SR’s month 1
Maximum cash burned = $17.7 M
►Hire 2 per month thereafter
Recommended Plan ►Breakeven Month 16
in
►Reduce fixed 40%
►Maximum cash burned = $8.5 M
►Hire 2 SR’s / month for 2 months
►Hire 26 SR’s in month 10 (margin contribution >
0) to catch up
►Hire 2 per month thereafter
Copyright 2008, Mark Leslie 34
33. Time to Cash Flow Breakeven
► Time to breakeven correlates directly to the
learning curve
Learning Positive Marginal Contribution Cash Flow
Breakeven
► Timeto cash flow breakeven reasonably
independent of sales staffing
More staffing may increase rate of initial discovery, but
cannot make it less sequential
► MORE STAFF DOES NOT SPEED UP LEARNING –
JUST CONSUMES MORE CASH!
► Basically, it is not ready until it is ready
Copyright 2008, Mark Leslie 35
35. SLC impact in the Mature Company
► As companies mature they develop and release new
products
As differentiated from new versions of old products
For example, in the software business, there are no “one-product”
companies with revenue > $1 Billion
► Often times new products given to existing sales force
Doesn’t quite work right
Hard to sell and install
Sales reps need to make quota and “move on”
The new product is…
►“Radioactive”
► Result:
New product fails to meet plan by a wide margin
New product is killed
Copyright 2008, Mark Leslie 37
36. SLC impact in the Mature Company
► Companies forget the learning curve they
experienced in their initial go-to-market
► Critical to replicate that product / market learning
process
Segregated sales force
Low productivity expectations
Focus on organizational learning
► Onlydeliver to larger sales force when learning is
complete and sales yield by product is competitive
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37. Impact of SLC on Venture Financing
► Pro-Forma VC financing
A round = product development
B round = go-to-market
C round = market expansion
► Fenwick and West Quarterly VC Survey
Eight quarters reported
Percentage of C and later which are DOWN rounds always greater than for
B rounds
► VCs and Entrepreneurs underestimate the cost and time required to
move up the SLC after successful completion of Beta.
► Reconciling the SLC to VC standard practices
View B round as financing the next (go-to-market) development
stage
Pay less, consistent with the risk assessment
Hopefully more up rounds later…
Copyright 2008, Mark Leslie 39
38. “It Always Takes Longer
and Costs More”
Maybe Not…
Copyright 2008, Mark Leslie 40
39. A New Framework for
Entrepreneurial Companies
► Plan the development of companies to include enterprise-
wide sales learning
A second developmental stage
► ProductDevelopment
► Go-To-Market (Sales Learning) Development
► Value Go-To-Market Development rounds (“B” rounds)
appropriately
Smooth the VC process, which is better for both VC and
entrepreneur
► Plan effectively for achieving cash flow breakeven
Eliminate wishful thinking
Consume much less cash
Reduce trauma to the organization
Copyright 2008, Mark Leslie 41
40. The Sales Learning
Curve
“It Always Takes Longer and Costs
More…”
mleslie@leslieventures.com
Copyright 2008, Mark Leslie 42