Notion Capital is obsessing over the path from $1 to $100m. What are the commonalities between the 1% of companies that raise $3m+ who go on to achieve $100m ARR and beyond?
They’ve broken that journey down into the start, build and scale phases.
“Start” is defined as going from $0 to $1m, then $1m-$3m. This initial phase is all about evolving your idea and business from a musing shared among friends, a niggle at the back of your mind asking “could I do it?”, to a tangible business with customers & revenue. Or as Stephen Millard says: “is this a problem thats truly worth solving?”
As founders the skills required to go from nothing to something are not found anywhere else. Chris Tottman, also of Notion, explains “convincing early hires to join your startup is difficult; you’re asking talented, intelligent, rational people to make a highly irrational decision.”
What does that say about the founders themselves? The odds are firmly stacked against us, and yet we lean into this uncertainty, with our unique cocktail of ignorance, passion, excitement, and delusion.
As founders during the “Start” phase, not only do we need to convince ourselves to put a decade of our lives on the line and highly rational future employees to join us on the journey, but also to ask real-world businesses to part with their cash in exchange for our product to solve a problem they previously didn’t even know they had!
Founders are the driving force behind these early customer wins, but as we approach the latter phases of the “Start” phase, we need to evolve from founder-led sales to a fully-fledged go-to-market team, capable of winning business repeatedly.
Much is written about founder-led sales. For most companies, the founder themselves will be instrumental in winning the first set of customers. They know the product, the market, the problem-space better than anyone and are well positioned to convince potential customers of the value in what they’re doing.
During the early phase this direct customer interaction is invaluable to shape the product direction, positioning and more. I often share that one of the benefits of a sales-led approach to GTM is direct, qualitative feedback from customers. This is critical in the early phases and beyond.
Speaking with Benedikt Ilg of Flip on a Growth Panel at Notion Live in Berlin in 2023, he shared he still carves out time every week to speak to customers - no longer in the guise of looking to close the companies first set of deals (the business is 5 years old and raised ~$100m) but to continue to hear this direct feedback from the field.
By hook, by crook, or by fateful friend in their network, the founders often manage to accrue a loyal bunch of early customers.
Your job isn’t to win customers or revenue
At this point the founder often thinks their job is finished. “If I am able to sell this product multiple times, then surely it’s now time that others do the same?”.
The way in which you sell as a founder, the credibility you hold in the room, even the creative license you hold during negotiations are never perks your average Account Executive will benefit from. As a founder we have what we might call “Founder Privilege.” No-one else in the business has this, least of all your AEs.
Your job as a founder isn’t to win your first set of 5, 10, 20 customers. It’s to build a process or foundation for many others to be able to go and do the same.
Sure, as a founder we need to ensure the business has enough revenue to keep the lights on. But in order to grow through the “Start” phase of your business lifecycle, and transition successfully through to the “Build” phase. You need more than some paying customers. You need a team that can repeatedly win more of them.
Go To Market Fit (GTMF) & Product Market Fit (PMF)
As we move towards the end of the “Start” phase and into the “Build” phase we’re looking to have established both product-market fit, as well as go-to-market fit. For me, there’s a danger that we merge the two together with disastrous consequences.
You’ll see many different definitions and perspectives on what product-market-fit is. For me, it’s a set of lookalike customers, with common characteristics, common needs, using your product in the same way, recognising the same value proposition, and paying a similar price.
The above is something which can definitely be achieved without go-to-market fit.
A founder may have been able to acquire a set of customers the above is true for through sheer will, grit, and personality. But (and it’s a big but!) that does not mean others will be able to do the same. This is the measure of go-to-market fit.
Andy Leaver of Notion succinctly describes, “go-to-market fit as the point in time when a founder is no longer needed in the room or in the process in order to sell the product.”
Andy is right, but I would go ever further than this…
You need to make selling boring
For me, your job as a founder is to build a sales process that is overwhelmingly boring.
Your job as a founder is to build a sales process that is overwhelmingly boring.
At the point in time that your sales process is so repeatable, so similar, that each and every time it feels exactly the same. Once you have awoken from your slumber - this is the exact time to be truly excited.
… this is the exact moment the Hollywood dollar-signs-in-the-eyes should appear.
Better yet, when you can articulate your solution to these prospects’ needs in the same way with resonance and customers are willing to pay the same price for this solution.
This is when you have really done it. You’ve made selling your product boring.
The above of course is a little tongue-in-cheek, but is a very good measure for whether you have truly achieved go-to-market fit.
Long live the sales script
Some leaders wince at the idea there is a scale script that can be delivered to a client to deliver the results we want. This too is a little extreme. But the closer we can get to this, the more likely it is you can train 100s of hungry salespeople to be able to effectively sell your product.
Running sales organizations over the past decade, nothing pleased me more than hearing the hum of the verbatim set of phrases, articulation of value, customer stories, discovery questions ringing around the office.
As your sales team get more experienced you want and need to create room for their personality, their tone of voice and more. But building off the above foundations will result in the greatest outcomes.
The role of your sales leader
I have spoken to countless founders who “Don’t know how to sell”, or “Have no experience selling” and therefore outsource this role to someone else. To be candid, in my opinion this is a shirking of responsibility as a founder.
Whether a technical founder or not, you need to flex your “selling muscle” each and every day. Whether that’s selling a potential employee on joining the company, or an investor on why they should fund your business. The same is true when in front of customers.
Nobody is going to work out how to sell your product for you.
It’s your responsibility as a founder of the business to work out how to sell your product. You cannot hire someone to do this for you.
The trigger to hire a VP Sales or Head of Sales isn’t because you need someone to work this out, instead it’s because you need to hire someone to scale something that is already working.
Of course, there are early stage sales leaders out there who will be helpful on this journey. However in my experience working out what or how to sell your product is not the skill-set of these individuals (and nor should it be!). These people are excellent leaders, know how to scale teams, set targets, motivate folks, hold them to account, how to better handle sales objections, how to forecast and more.
No job description for a VP Sales or Head of Sales ever states, “work out how to sell our product” but this on occasion is the (ill-informed!) expectation of the founding team.
Iteration not invention
Your job as a founder is to make your sales process predictable, so predictable it becomes boring for you, having executed upon the well-defined process 100 times.
This is your trigger to scale your commercial organization, and will ensure those you bring in are setup for real success.
Those you hire will iterate on the strong foundations you have laid, especially as your market changes, product improves and more. However, these folks shouldn’t be going for zero to one, they shouldn’t be inventing… just iterating.
There can and should be scope for invention, for the “new” in an organization. However as a founder you should be very purposeful about who is there to execute relentlessly towards what is working with some iteration, and who is in the business to explore the new. Running experimentation like this is a topic for another day.
Meanwhile, embrace the boredom and enjoy the ride.