One Question Series with Penny Orme: What's the one thing you wish founders & CEOs in SaaS knew?

Stop hiring so many salespeople, or too many salespeople, too early on.

Hello and welcome to our One Question series. My name is Emily Asanda, and I am the COO and co-founder of Revalisco. And over the coming weeks, we're going to be asking different leaders, clients, one question to get the different perspectives and hopefully learn something really interesting from it. And today on the call, I'm really excited because we have Penny Orme. Penny is one of our specialists on our team at Revalisco. And in addition to winning various awards, including the top 10 EMEA sales leaders, 3 years on the trot, Penny was voted one of the top 50 CROs to watch. She has spent over 30 years in B2B services and software roles. Penny has closed over 100 financial quarters. Um, worked in VC and PE-backed SaaS businesses, funding rounds, exits, and restructuring multiple acquisitions. So Penny is now working with Revalisco as our revenue specialist, advising a number of our CEOs at our portfolio companies. So welcome, Penny.

Thank you for having me.

Um, so today the one question we're asking Penny is, what is the one thing you wish more founders and CEOs knew?

Well, with my sales hat and revenue hat on, I think it would have to be stop hiring so many salespeople or too many salespeople too early on before you've got your foundations right. I was talking to someone about this the other day. It's a thing I see time and time again. You see companies growing fast, founders getting very excited, they'll have a new funding round or some money, and they want to hire a lot of salespeople straight away. Um, as they think that's the most efficient and best way to get to revenue. Investors are not looking just for growth at cost. They want to look at efficiency and how quickly you can break even or even be profitable, but mostly break even. I believe there are 3 things that companies need to be thinking about before they start hiring lots of salespeople, which we can talk about.

Yeah, I'd love to hear that. Before we get into that, are you seeing this happen at a particular stage of ARR that they start making these decisions?

Yeah, that's a good question. Yes, earlier stage. So we're talking really first million, first up to $5 million, really. So they're at the stage where they think they may have product-market fit or early stages of it. Founder-led sales have typically been working. The founder believes they can sell to anyone. Invariably, they can. And so they think, right, let's get some salespeople on and we can just sell like me and generate more revenue.

It's really interesting because, as you say, it's something that we have seen again and again across so many businesses at this stage, at Revelesco as well. And take us through the whole journey so we can visualize what normally happens when a founder hires that team too early. What's the impact?

Yeah, exactly. So, I mean, I've all— I've been a CRO in one where we— I inherited a team and this had happened. So, invariably what will happen is you'll have hired 2, 3, maybe A couple of SDRs, and then they'll be given a list of accounts and just say, right, can you go find some leads? This is our ICP, which is quite loose, and they'll call it an ICP, but it's really a segment more than an ICP. And they'll go off and make calls and invariably get some meetings, and some will be opportunistic and they'll be successful, but they won't be getting anywhere near the high growth targets that they've got. And either you'll get— one of two things will happen. AEs will misquote and they'll be Let go, or they will decide to leave if they're high-performing because they can't make their quota and make their commission.

Okay, so how do— what's the answer then? How does a CEO know that they're making the right decision?

Yeah, no, good, of course. So, um, really, I think there are 3 ways that I'd be looking at it, and the way we advise as well, and I advise, um, our CEO and founders. First of all, you've got to get your foundations in place. So, making sure you've done that deep work on your ICP and your personas, It's funny because I've done some of this work myself when I was a CRO, where we've tried to work out what is our ICP, and it's really quite hard because it can— it's quite hard to get very, very focused. But that work is so important, and it's really understanding not only who the ICP is but also the persona, and then what are the corresponding pains that they feel. There's also a hierarchy of pain, right? Because some pains people will move on and some people just won't.

Yeah.

And so it's about understanding what's that hierarchy in that really important pain.

Yeah.

And then feeding into that crisp, clear messaging. What's the value that your product really does address for those people that are in your ICP? And then making sure that you understand not just what the ICP is, but as I said, that perfect fit customer. So, we talk about our TAM and our SAM. So, it's understanding what's your total addressable market, what's your service addressable market for now, and making sure that everyone's aligned on that as well. So, it's not just the founder thinking that, but the head of the product doesn't. It's making sure that all the founders and the leadership team agree on these ICPs and personas, the key pain points, and the value your product gives to those personas.

Yeah, and it's a really interesting point because about really truly understanding the ICP, because what we found is that a lot of founders and their leadership team underestimate the work that sits behind really truly understanding your ICP. So, what are some of the things that they need to be thinking about in order to get to the right answer?

So, I think it is an iterative process, but I think when you start with it, I think it's getting dedicated people who are focused on it in a room. So, the way we work at Revalesco is we do it in a workshop. When I didn't have the likes of Revalesco in my last company, it was getting a small subset of people from product, from revenue, and from customer. If we had those— In some early-stage startups, you don't have those, but you'll have product, And you build those hypotheses of value and pain, and it's really about testing it with those existing customers. You'd hope products have already done this, but completely always speaking to the customers who are using it, validating it, and using those stories. So important to get the voice of the customer continuously involved in the work that you do, because otherwise they're just hypotheses, right?

In reality, what does that look like in terms of The amount of hours that they're spending with customers, or what should they be looking for?

I think speaking to customers should be embedded in the DNA of the company anyway. So if I was an AE, I'd want to speak to customers at least once or twice a week minimum, so you're constantly having that touch. There are other things that you can do by having customer advisory boards, etc., but I think in those early stages you want to be a bit scrappy. So it's that market research as you're doing it, as you're building your product, and product should always be talking to customers and Target market. And then I think as you go on, you should always have that behavior of speaking to customers.

And so, um, is there a framework or a rule of thumb which a founder or CEO can look at to say, okay, I'm at this stage, I've got this many customers, my sales team should look like this in terms of structure?

I mean, normally you would expect, yes, there is a maturity model, but I think it depends on, again, the, um, the motion, the sales motion that you're going with, but I think there is an expectation that for the first million, you'd want— first $1 to $2 million, you'd want the founder very, very close to the sales process.

Mm-hmm.

You would bring in, yes, at that point, some AEs, but I think from my perspective, if I take it back to the original point, which I was saying, there's 3 real aspects that you need to think about when you're building a sales team, and you need to have these foundations in place in order to make it successful, and to increase your chances of success. One is, as I said, making sure that you've got a clear understanding of your ideal customer profile, your personas, your addressable market, and the right messaging that will support a list of accounts that are proven, with proven customer case studies that can help a sales team move forward. So the second thing is then looking at the profile of sellers you need. All too often people come in and think they need a CRO, or they've just completed a funding round, they want a CRO or a VP of Sales, they want a bunch of AEs, without having really done the work to think about what skills, attributes, and knowledge they're require at that stage. It might not be a CRO they need. You can give anyone a title, to be quite frank, but actually it's really about whether you need someone to be rolling their sleeves up and getting down and dirty and actually selling.

Yeah.

Is it they need to have experience in someone who has knowledge in this stage of coming up to $2 million, or is it they need to have industry domain knowledge? Is it that they need to understand enterprise selling, product market— product-led growth? So it's really taking the time to look at the profile of the leader and the team that you need in, and then assessing whether this is an efficient way of go-to-market as well, depending on your motion. So how many sellers do you really need? Because you could have a habit of overhiring. There was a number of years ago, I think I got told by a VC who will remain unnamed, overhire because you get rid of at least 3 or 4 of them. But what they don't take into account is for every person you hire, the investment you need upfront to onboard them, to ramp them up, For them to leave, and actually it doesn't do the team any good when you start seeing people who are not successful in a team. Crazy advice at the time, which I think— but I think that comes down to not growth at all costs now.

Yeah.

Grow efficiently. So there has to be success in showing how you can take salespeople on, how you can onboard them, and how you can get them successful quickly, and if you don't have some of these foundations in place, that just won't happen. So, less is more. Getting the right profile right and getting the right leaders in place, I think, is really important. And then I think the third thing was really about, do you have the right support system in place for the sales team? People often don't think about this. They'll hire a sales team in and they won't have necessarily a CRM in place, any sales processes in place. They won't have support in terms of research, and they won't have any way of measuring whether this is successful.

There's a massive difference between being busy and being productive. as we all know. Um, and I think especially for inexperienced employees, when they come in, they, they want to be making an impact, so they do just get busy. And if they don't know what they're doing, it's just a waste of time for them, isn't it?

Um, that's another error there that I see is exactly that, which is the output of not having those 3 things in place, is that you have exactly that— a sales team that are busy and a very frustrated founder and CEO who doesn't understand why can't they just sell.

I can get me— yeah. So, when you're talking about the support, are you leaning more towards the operational foundations and structure and plumbing behind it all? Is that what you meant by that?

Well, that's a good question. I actually mean marketing and some operations. So, because the sales team are the tip of the spear, if you think about it, they're really the end conversation for the buyer who's made a decision before you got there. You've got sales ahead of marketing, that's sort of the cart before the horse slightly for me, I think. I think it's okay to have one or two salespeople who are with the founder, but for me, very much you want marketing in. Who's generating my content? Who's understanding customer intent and buyer intent? Who's understanding how I can build out and own still the ICP and the customer stories and the customer advocacy? And then I can build in my sales team.

Yeah, and so one of the things that we focus on at Revelesco, as you know, is leaders don't know what they don't know. And it's really difficult because whilst we've all probably heard that saying, we don't know what we don't know, and it's true, the question for leaders is, okay, but where do, where do I actually start and how do I actually get that information? And it's one of the reasons why we believe so strongly in being able to lend experts like yourself who've done this journey again and again to help these CEOs and founders see around that corner. Because if they've managed to get the business to $1 million or $5 million and they're looking to now get it to $10 or $20 million, They don't know what they don't know, and so they can too spend so much time just getting busy instead of working on the right things. So, having an efficient framework to get to the right answer, and then having that person in addition support them to help them put light on exactly what's coming next, is so, so critical, and what we found.

Yeah, and so, what— adding to that, actually, what tends to happen in engagement with customers from Rebolesco, um, I've got a number I'm working with now as well, I'll have an initial talk with the CEO and founder, and then show them the sales maturity model. And so it's—

Hmm.

There's 4 pillars to it, which is go-to-market alignment, which is some of what I've been talking about today. Where are you on go-to-market alignment? Where are you on your operational revenue operational excellence? Where are you on your operating model? And where are you on your sales enablement and leadership enablement? And so that— those 4 pillars are then looked at. Of where does it look about your stage fit, and then it's working through. I'll let them plot against where they think they are, and then I'll do having done my analysis will plot where I think they are, and then together we come up with a prioritization. Where do we think we need to focus on? And invariably, I will be working or coaching with their CEO and founder, who might be currently at that point acting as head of sales or a new hire that they bring in. I've done all things about looking at their operating model, looking at the the next hire they should get in from a revenue standpoint, through to playbooks and methodologies with an existing CRO who's new and leveling them up. So that's how I would work with them, and that's how we would engage with them at Revalisco. And, you know, I think one thing you and I, Emily, talk about quite a lot is empathy for a founder and CEO. There is so much work that they have to do and so much they have to think about all the time. It's not about giving them extra work, it's about simplifying. easily to get them the most impact works, we will figure out and work through with them. So, from my perspective, there's not, it's not a perfect, it has to be this way. It's just, okay, what's the situation you're in now? How can we get you as quickly as possible to the next stage? And that's really what it's about. But I think for me, after, when we come back to the original question, the exam question of what do I personally wish, genuinely, think before you hire loads of salespeople.

Penny, thank you. That was great. We'll see you soon.

Thanks for having me.