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The “$20M to $500M” Question: Adding Top Down Sales

by
Sarah Wang, David George
a16z
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For many enterprise startups, the dominant initial go to market (GTM) strategy has been growth and sales. However, a bottom up GTM is not enough to unlock the full potential of a market. The introduction of top down sales is one of the most important inflection points in many enterprise companies.  

Do you even need top down sales to scale?

  1. Initial growth is often the result of the product 
  2. As products proliferate through enterprise customers, there's a limit to users who will discover it or pay for it on their own 
  3. Yet, enterprise-wide deployment creates new users and use cases 

When should you add top down sales?

  1. The bottom up flywheel is working 
    1. Achieving between $20M to $30M ARR in bottom up-driven sales is a strong leading signal 
    2. Certain penetration statistics can also be a leading indicator 
    3. The bottom up motion serves as an important pipeline generator for the most successful top down sales 
  2. The business is demanding a top down solution 
    1. Critical to remember that individuals don’t buy enterprise features, businesses buy them. 

First leadership hire and rep compensation

  1. First leadership hire must be a: 
    1. Collaborative decision maker 
    2. Analytical and technical orientation 
    3. Long term relationship building 
    4. Enterprise sales experience 

How do you compensate your team?

  1. Align their team’s activities with the goals of the business  
  2. Tie these plans to the work that the individual sales rep is actually in control of 
  3. Incentivize the team to ensure that both the initial landing and net expansion are successful

How do you reconcile top down with bottom up pricing?

  1. Hybrid model: Full transparency for smaller self-serve customers, paired with the ability to negotiate custom enterprise pricing 
    1. Products with competitive environments 
    2. Majority of sales leaders believed a hybrid pricing model inclusive of discounting worked best for their companies 
  2. Self serve applied to enterprise sales: This approach entails full pricing transparency and a zero exceptions approach to discounting 
    1. Works for companies with limited competitions and newer use cases 

When do you start focusing on customer retention?

  1. Nearly all sales leaders we spoke with wished they had focused on retention sooner. 
  2. It should be built up alongside the sales effort 
  3. As the company scales, the role of customer success will evolve 

Looking ahead

  1. There is no right way to scale top down GTM operations 
  2. A truly successful go to market transformation requires product marketing, customer success, and product infrastructure also
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