The 3-Step Guide to Scaling: Going from $0 to $1M in Revenue, with Rami Essaid, CEO of Finmark

Welcome, welcome, welcome everybody. We got a packed house today. My name is Martin Martinez, entrepreneur in residence over at Founder Institute HQ. I'm coming to you live from Austin, Texas. Howdy everybody. We're already sitting at well over 260 attendees here in the webinar. You may be watching us elsewhere in the world. Please just give a shout out, give a share, say hi to everybody here in the chat if you are joining us. Yeah, yeah, tell us where you're coming from. I see Arizona, I see Chicago, Toronto. This is the global family here in the house. Qatar, Kazakhstan, Brazil. I can't even keep up with the chat now. Y'all are blowing it up. Welcome everybody. It's good to be back with another one of these great global events. We got a great special guest today, Rami Assad. He's going to be talking to you a whole lot of stuff about how to scale your business from $0 to $1 million. In revenue. Before we get into our special guest, I just wanna tell you a little bit about Founder Institute. If this is the first time you're joining us, welcome. If it's one of the many times you've joined us or seen me host some of these events, welcome back. It's always good to see you. Hopefully we can see y'all again in person at some point in time as we're transitioning out of this grand experiment of ours over the last couple years. So Founder Institute, as many of you might know, is the world's largest global Pre-Seed Accelerator. We help entrepreneurs turn their ideas into fundable startups. Uh, we start with you right at the beginning. You might just have the idea written on a cocktail napkin. It may still be in your head. That's okay. You might be working on a little prototype, but you haven't really shopped it around. You might even have a teammate, might even have a pilot customer, but you still need to figure out how to build the business. Well, we're the place that you should come to help you figure out how to do that. Applications are open. For our upcoming spring and semester cohorts all around the world. Our Texas program has just opened up as well. So if you are coming in from Texas and you're looking to join the upcoming summer cohort, please head on over to fi.co/join and apply today. You'll be getting some emails in the future if you've registered for this. Obviously, you will get some more info on how you can get involved and take your company to the next level. Um, so here's how it's going to go down today. We're going to bring Rami up here in a second. He's going to have a presentation. If you have questions here, and again, we can't— I can't see anything on the socials if you're watching us all across the interwebs, because we do broadcast this all across the place on Twitter, Facebook, LinkedIn, Facebook, all that stuff. Can't see that. If you can join us on the webinar, that's going to be a lot better. You're already doing the thing. I see Ghana, I see Egypt, I see Switzerland, Montreal. Oh, this global community always excites me, which is helpful. South by Southwest here in Austin is kicking off here in a couple of days. Haven't slept too much, so I got the blur turned up to like 11 right now so you don't see the bags under my eyes. But let's bring up Ramy. Let's bring him up to the stage. We'll get into his presentation. So if you do have questions, throw them in the Q&A tool here, or I'll be pulling them up from the chat, excuse me, and then we'll hold those towards the end. We'll get into some Q&A with Ramy later and, and be able to try and get through as many questions as possible while we have him. We'll be stopping at the top of the hour. So please give me a warm, warm welcome from wherever you're coming from— Belgium, Nigeria, Finland— to Ramy Assad, founder of Finmark. Ramy, how you doing today, bud?

I'm doing well, Martin. How are you?

I'm doing pretty good, all things considered. It's been a busy week so far. It's going to be a busy next couple weeks down here in Austin. Hopefully we can bring you down for a South by Southwest in the future.

I can't wait to come back and have some good old Texas barbecue.

Oh, yeah. I think I'm going to have one later today just to get the gut starting to stretch out before all the madness comes out a little bit later. But I'm going to go disappear into the darkness. Rami, the floor is yours for the rest of the hour. Please take it away. We have 300 attendees already in the audience ready to hear you speak. I'm going to disappear. I'm going to sit in the back and listen to this, too.

All right, well, hi everybody. Thanks for having me, um, back again. Um, you know, I, I've been, uh, here in the past talking about how to fundraise, um, and today we're here to talk about getting customers, revenue, building that up. Um, if you haven't heard from me before, a little background about myself. Uh, I am a partner at Idea Fund Partners, an early-stage seed investment fund on the East Coast based out of North Carolina. I'm also a founder like you. I've built and sold 2 companies and I am currently running my 3rd one, Finmark Financial. Finmark is financial planning and modeling for startups. We help you put your ideas together so that you understand how you're going to hire people, how you're going to scale up your business, how much money do you need to raise, how much that'll last you, really taking you out of Excel to plan for future success. So if you haven't checked out Finmark, please, please check us out. As you're getting up and running with your business. We help put your ideas down on paper and make sure that you know what you're doing. So outside of my shameless plug, let's jump into the conversation at hand today, revenue. How do we get from nothing to $1 million in revenue? Why do I say $1 million? Well, in the pre-seed and seed stages of companies, you're just trying to build things up. Once you get north of $1 million in revenue, That's the point in time where you're actually starting to have an engine. It's a repeatable model now, and it's all about tuning it, less about building that engine. So we're going to talk a little bit about that, kind of what are our 3 steps, what are my 3 steps that I've done over and over again to getting this, right? My last company, we took it from nothing to $25 million in revenue, sold it for 9 figures. I've helped a number of other startups start their sales engine. And so I've done this a number of times, and hopefully my experience can be beneficial for you guys as you're thinking about where are we on our journey? How do we scale this up? What is this even gonna look like? So there's 3 steps that I mentioned, trying to simplify it down. It's about getting your first 10 customers, then trying to understand what is, how do we start building that repeatable model? And then it's about scaling that up and continuing to iterate from there. Before we jump into those 3 steps, I wanna make sure that we're all talking about the same thing and that we've all done a little bit of pre-work, if you will. Before you even build your product, I recommend doing a couple of things, especially before you go out and start trying to pitch your product and sell your product. There's a couple of key things that you wanna make sure you've thought of and you've taken care of. The first one is making sure that you've understood, or at least made an assumption about what your buyer persona is going to look like. Who is it that you're gonna be selling to? What kind of company do they work at? What's their title? But really, more importantly, what's the pain points that they experience day in and day out? How do those pain points relate to the product that you're trying to pitch them? right, that you're— that you've built? Um, how much are they willing to pay for your product? This is one of the key things that I think, um, founders make a mistake about and not get ahead of, is really understanding what are— what am I going to charge for this thing, right? Before you build out your product, you want to get some customers, some potential customers, to give you some directional insight into how much you think you can charge for your product. And the reason that's important actually falls into the next thing of pre-work that you have to do. And that is making sure that you have a big enough market that you're going after. Now, I'm a venture person. I build venture-backed companies. I invest in venture-backed companies. And with venture-backed companies, the name of the game is building a billion-dollar company, right? At least a unicorn. Nowadays, maybe a decacorn or a centacorn. But really, you want to make sure that you have a big potential market opportunity. There's a lot of other ways to build great businesses, but for venture-backed businesses, you want to be able to show that you can be a billion-dollar company. To do that, one of the things that I always recommend is looking at the addressable market. You take a look at the conversations that you've had with potential buyers, and then take the assumption that you had around how much money you're going to make in term— per customer, and multiply that by the number of potential customers that exist. And that's a total addressable market. It's a bottoms-up addressable market. And what you want to make sure is that that market is big enough. Now, I'm seeing in the comments, I totally hear you. There's small markets can make you millions. Absolutely. I mean, you can build amazing businesses off of small markets. So don't take this as that you have to have a big addressable market to build a successful business. I'm saying if it's a venture-backed business. The other thing is, you just want to understand how many potential buyers there are, so you know how hard this motion is going to be to get up and running, to get those customers. Now, once you have a big enough addressable market, you have the sense that you can maybe be— you have a large enough pool of people that you want to go after, You want to take your price assumption and kind of make sure that you're building the right kind of tool or the right persona, that you run a sanity check around all of these things. So let's say you want to be a billion-dollar company. You need about $100 million of annual revenue at kind of a minimum. 10x revenue is kind of a tried and true multiple for a billion-dollar company. Right? And so there's a couple of different ways to get to $100 million. You could get 1 million people to pay you $100 a year, or you can get 1,000 companies to pay you $100,000 a year, or you can kind of get somewhere in between. But that has a reflection on who your buyer persona is and how— what kind of product are you building? Right? And so if you're gonna charge enterprises $100 a year, are there gonna be enough enterprises that are gonna be willing to buy your product? Does it actually make sense to do that? And we'll talk about that motion later, but you wanna make sure that you're targeting the right kind of buyer with the right price point to make sure that this all comes together and makes sense. That's the foundation. This is the pre-work So if you've done those steps, you've figured out kind of ballpark what you think you're gonna charge, who your buyer persona is, now it's about how do we get the first 10 customers? We've built an MVP, we've built a prototype of a product, how do we go out and get the first 10 customers? Now, remember, notice I said prototype or MVP. One of the biggest things I see founders do is try to get the product perfect. Perfect. Try to go out and get— make the most absolute buttoned-up, full-featured product ever. No, no, you want to bring this down. You want to launch as early as possible with as minimal viable of a product as possible, and then iterate with potential customers, right? Those customers, those early adopters should have such a pain point, such a need that they are willing to— they're willing to use a product that's a little rough around the edges, that they are willing to kind of work with you as you evolve or improve the product because they need what you're building, right? So getting those first 10 customers, how are we gonna do that? Well, we're gonna have to go out and sell. And your first salesperson is you as a founder. You need to lead the way early on. Remember I said this is an early stage product. It's a little rough around the edges. So one, the reason that you wanna be involved in this sales process early is so that you can understand what is resonating with your buyer, with your potential customer, and what's not. You can get the product out in front of them early enough, then you can adapt, change, iterate on the product to make it suit what the market is asking for. We think that we know what to build, but I promise you, you'll never get it right. When I launched Finmark, we launched it after only a month of building. Now, for the next 6 months, we were onboarding customers onto Finmark and giving it away for free, just so that we could get the feedback and iterate and get it to the right place. Once we heard from our customers, from the people using it, that they loved it, that they were willing to pay for it, 6 months later, we started charging for it. But if I had spent the first 6 months just building and not actually talking to customers and iterating, we— what we would— what we thought we should build the first 6 months was only about 50% right to what we ended up building. So the first salesperson, the person that needs to be involved in these conversations with customers, is you. As the founder. And I know a lot of you guys as founders, especially if you're a builder like me, you may say, hey, like, I don't know how to sell. And that's actually a really, really good thing. You don't need to know how to sell because getting your first 10 customers isn't about selling. It's about business development. It's about understanding the customer, what's resonating with them, what's not in your product, what pain points do you need to highlight, What pain points do you not need to highlight? These are things that you need to start understanding and refining before we actually really start selling, right? You're building a playbook, understanding customers to try to figure out what's going to resonate with all the future customers. So early on, it's not sales, it's just user interviews, right? But user interviews with the hopeful potential of finding some that love what you're doing and getting them to convert to being paying customers, right? And so where do we find these users? Where do we find these users with the problem? Well, you've built the buyer persona, right? You have an idea of who you think you should be targeting. Now let's find those people and let's find the warmest introductions we can to those people as possible, right? Start with friends, start with coworkers, look at your LinkedIn network and try to find friends of friends that you can get warm introductions options too. If you can't, if you've exhausted the first two, if you don't have any friends or coworkers that fit the bill, that would want to buy this or would be potential users, you don't have any warm introductions, then okay, let's go one level down. Let's go to in-person event. Make that connection with somebody face-to-face. Now that we're kind of getting over the hump of COVID it's getting a little bit easier to get out there into the world. Build that connective tissue, because again, these people are going to take a risk on you. These people are going to buy something or use something that could put them in jeopardy potentially, depending on, you know, what their job is, what your product is, right? If you mess up, does it reflect poorly on them? If they're— if you're a critical part of their role or responsibility, so you need to start building some trust. But if you can't get any of those top 3, then you got to go out and get some cold outreach, you got to go out and just land um, land into people, um, and, and reach out to those, those prospects. Um, so let me give you guys a couple of examples of, you know, reaching out to, uh, to, to some people. Even when it's friends and family, you can reach out. This is an email I actually sent last year to somebody that I had known for 5, 6 years, um, when I was starting Finmark. You can notice here in my email that I don't say anything about, would you buy Finmark? I ask for feedback. I want to catch up. I want to build the relationship and look to Betty as a trusted advisor. It's not a hard sale. It is a, hey, let's talk about this. That lowers somebody's guard. There's an old adage, the best way to ask to get us— to get a sale is to ask for help, right? And what you're doing here is, is making sure that they don't come in defensive. Nobody wants to be sold to. We all naturally put up our guard when we see a salesperson, and, and you don't want to be a salesperson. It's really important that you treat this consult as a consultation and respect the other side, the other person on the other side. So I ask, would you mind giving feedback? Now, here's the other thing that I see founders make mistakes around. Oftentimes, they are a little gun-shy of pushing hard on their network or, you know, pushing on their friends and family. You can see here, a week later, I hadn't heard back from Betty. So I copied her— I copied a colleague of hers and followed up. And I said, hey, I want to politely check back in with you. I'm pushing forward. Can we connect this month for a quick show and tell? Right? Notice how short my emails are, very to the point, but I'm politely being assertive. Don't get— don't be scared to be assertive. Um, even with friends and family, it's okay. People are busy. A nudge here and there is okay. Don't send 10 emails, But 2 or 3 follow-ups to follow up with people, totally fine. Now, in-person events, one thing I mentioned in-person events as one potential area of going out to build that connective tissue. If you're going to a conference, try your best to figure out who's going to be at the conference, do your homework ahead of time, and figure out What are— who can I reach out to? Who should I be talking to? And then prime the pump, right? This is an email that I literally sent to say, hey, I'm going to be at this conference. Here's what I do. I'd love to talk to you. I've researched all the conference attendees that I could find. I prioritized the top 20% that I wanted to talk to. And I ping them ahead of time to set a scheduled meeting at the conference. If you are successful, if you think that you're going to just show up somewhere and build, you know, and just network, you're going to end up talking to a lot of people that waste your time or a lot of people that aren't a good fit. So be very diligent with your time. Focus in on who you want to get in touch with, how you want to get in touch with them, and reach out to them, right? And it doesn't have to be just email. I've mentioned cold outreach as a way to, to go out to the market or to find these prospects. LinkedIn, Twitter, these are great ways to connect with people. Here's an example of literally something I reached out to early on and I said, hey, I noticed that you talk about FP&A in your LinkedIn profile. Would you be open to giving me some feedback? Again, really, really lightweight intro there. It's not a hard sale. It's asking for feedback. And look, the response was really positive. He's like, "Sure, I'd be happy to give you feedback." Right? I just reached out to this person cold. I've never talked to them before. This is literally the playbook. These are screenshots literally of me building Finmark and connecting with my early customers to understand how to build those, to get those first 10 customers. So this isn't something that is just theoretical. These are literally emails that I'm sending out and going through warm friends and family, in-person events, then all the way down to just flat-out cold outreach. Now, you get somebody on the call, right? You get somebody on a phone call. You're gonna be— you're excited, you want to show off exactly what you've built. Um, let's go here, let me show you what I've been working so hard on. Stop, stop, you don't jump into a demo. Don't just jump right in and just cram the product down their face. Your instinct right now is to spend 70% of the time showing them what they're doing and getting 30% of that time feedback, right, as feedback. Reverse that. They should spend most of the time talking, and then 30% of your time should be asking questions, and maybe a little bit of that is demo. At worst, at absolute worst, it should be 50/50. But do not go in and just bombard them and talk at them. Again, you've reached out because you want their advice, you want their help. Um, give them that opportunity, otherwise they'll quickly tune out, they'll quickly feel like, oh, this was just a sales call in disguise, right? So how do I get them to talk? What do I say? Um, to what, what should I be asking them? Right? Well, it's about first understanding them and then mapping what your solution is to what their problems are and understanding how you might be able to help them and getting their feedback about what you've built. Right? So I'll give you some examples of some questions to ask. The key here is make sure that you're asking open-ended questions. Right? Don't ask yes or no questions. Open-ended questions to get them engaged, explaining, and helping you understand what's going on. So one example is, what's the hardest part for you about doing X? Think about what pain you're solving and ask— what problem you're solving, then ask them, what is the hardest part about this? So for financial planning, for my company, what is the hardest part about doing your forecast as a CFO? Understand their pain and their need. Get a sense of how you can solve their problem, right? Your solution might do 10 different things for them, right? You wanna understand which of those things is the most important thing for this potential customer, right? Because if you get into a part where you show them the demo, you don't wanna show them every single bell and whistle. You wanna show them the things that really hit home to them, that resonate to them. So finding the pain, that need, really, really critical first step. Another thing you can ask them, hey, tell me about the last time that this happened, right? That you experienced this need, this problem, this issue, right? Understand the context. Is this something that's constantly top of mind, or is this something that happens periodically? This will help inform you to say, do I get— am I, am I going to have to catch somebody at the right place, right time? Or does this problem expose itself periodically? What are the triggers that I should be looking for to approach potential customers, right? Understand their mindset and how they experience this pain so that you can find the right people at the right time. Another really great question is, Why was that hard? Right? What, what about doing— solving this problem was, was painful? This is going to help you build out your marketing message. This is going to help you build out your strategy of being able to communicate on your homepage, in your emails, in your outreach to prospects, what their— what language they use to articulate the pain that they have. Understand what the why is behind the pain, because that's what people buy on. They buy on the why. Once you understand this repeatedly from your customers, that's a line that you should be putting into your email. I know when this has happened to you in the past, this has happened to customers like you in the past, they've experienced this. Finmark solves this problem by doing X. right? So you can start using that in your future messaging. So another great example is the why. The next great question that I love to ask is, what else have you done to solve this problem before? How have you gone about solving this pain point before? One, that can give you intelligence about your competition. What, what is, what has this buyer done? What does your competitive landscape look like? Where has your competition fallen down, right? This'll give you the weaknesses of your competition if somebody's tried something else to solve this problem. But it also helps you identify this person if they're a serious user or buyer or not, right? If they say, well, I've never really tried to solve it, then are they likely to buy what you're selling? Probably not, right? If this pain point wasn't painful enough for them to ever try to, you know, take a stab at solving it, then they may not be the right user for you to be talking to. Remember, these are early adopters, right? These are people that are going to give you feedback about the problem, but also you want to find the people that are feeling this pain so badly that they just are willing to take a risk on an experimental drug to solve the headache that they have, right? They've tried Tylenol, they've tried Advil, it didn't solve the migraine, the headache that they have, And you know what, you're not FDA approved yet, but they're willing to try it because the pain is so strong. So those are the ones that you want to really hone in on. And this is a great question to help you find those people. And last question that I love asking is, you know, what don't you love about the solutions you've tried, right? Understand what features your, your prospect, this person really wishes existed. Right? Then you can parlay that to, if you have that solution, maybe you can then show them, hey, is this what you're talking about? Would this solve the problem in a way that you'd like? Would— this is kind of a great segue to jumping in to talk about what you've done. And you always want to create that segue. You want to ask a lot of questions, build a mental map of what is this person's problem? Is this the right person? Does this person have that need? What needs should I hone in on? Okay, I have an understanding of what this person, what I should say to this person. Now have a question ready to go to transition you to talk about solutions, right? And that solution is going to be where you jump in and say, here's a demo. Here's, can I show you now what we've done? Can you give me some feedback around whether this, what we've built solves your pain? What would you do differently about what we've done? Help me understand. And that's when you dive into this demo where you can start getting some feedback. Now again, remember, focus in on the areas where you solve the pains that they've articulated and focus in on getting questions, solutions back, right? And if they say, well, this doesn't exactly do it, this isn't exactly what I want, that's great. Understand what features they need. And then once you've kind of cataloged that, go for the win. Before the end of the call, you want to get their understanding of what features, what products, what things they want, and then say, that is really, really helpful advice. This is fantastic. Let me ask you, if we go and build this, Would you buy my product? If I go and iterate, and in a month's time or 2 months' time or 3 months' time, come back to you, is this something that— would you use our product? Would you be willing to pay for the product? Get confirmation that they're willing to pay. So many founders are nervous to ask for the win, for the sale. And what they end up with is a bunch of users that are nice-to-have users that won't end up ever convert to being paying customers. And the feedback from those users is all over the place. Sometimes it's helpful, sometimes it's absolute crap. And so the people that are willing to pay, the people that say, yes, yeah, like you do this, I'm in, or you do this, I'd love to try it and see if like you deliver on what we say, Those are the people that you want to get the feedback from and prioritize feedback from so that you know that you're building towards a qualified customer. Even when we were giving away our product for free at Finmark, we were always asking, if we do this, at the end of every conversation when people were giving us feedback, if we do this, would you pay for this product? How much would you pay for this feature? How much would you pay for that product if it included this feature? Always ask for that just to understand how qualified is this prospect. Should I be spending my time building towards their needs or finding people that have greater pain that I build towards their needs? So this is an iterative process. Find more people, talk to them. Eventually, after hopefully a couple of months, maybe up to a year of doing this over and over again, You refine your product to a place where you have your first 10 customers. So once we have our first 10 customers, what do we do from there? Now it's time to get the repeatable model. Now is the time that you can step out of being the sole person responsible for the sales, and you have the messaging, you have the buyer persona, you have an understanding of, you know, people willingness to pay and how much they're willing to pay. You know that this is going going to be a scalable thing and you, you want to start scaling this up. So before scaling this up, let's do one more sanity check here, right? How hard was it to get each of these 10 customers? How complex was the sale? Was this something where you had to follow up with them 20 times, that you had to handhold them, that you had to do a lot of configurations for? Did it take 3 or 4 months to get them over the hump? Not because you didn't have the features, But even when you had the features, to get them integrated and up and running and fully fleshed out. Or was this a really easy sale? Was it, you know, you had the features that they wanted, they played around with the product, and 30 days later they said, yeah, this is great. Or was it somewhere in between, right? This matters a lot. Before you start scaling up, you want to understand how repeatable is this motion. Right? If you have something that you're selling for less than $2,000 a year, then it really needs to be self-service. It can't be something that is very complex, high touch, requires, you know, handholding. You just can't scale up effectively. You won't be able to invest enough to scale that up. There's some very, very niche players that have been able to, you know, kind of prove this to disprove this, but even those outcomes are a little under, you know, not necessarily fully fleshed out, right? So for example, a lot of people point to Superhuman and they say, well, for a product that's $30 a month, they do this whole handholding, onboarding, et cetera. That's 'cause they're refining their product, right? And they're really trying to create stickiness, but it's very rare that you have a low-cost product that has a high complex sale process that you can actually scale up effectively. Now, if you have a middle-of-the-road product, let's say you're spending $10,000 to $25,000 a year on your product, then you can have an inside sales motion, right? It can be more transactional. You can go out and get people, have people bring customers in, but it can't take 3, 4 months to close the deal. It can't be a very highly involved integration process. But it can be human-led. It doesn't have to be self-service. Then once you're north of $25,000 or $50,000 a year, then you can have that enterprise motion where you have, you can have as complex of a sale as you want and still hopefully be able to afford being able to invest in the team to make that money back. So we've done that sanity check. We're ready to scale up beyond founder-led sales. We have our first handful of customers. This is what a typical funnel looks like. It might be a little bit different for, for different people, but you have kind of a top of funnel where you're building awareness about the problem, awareness about your company, you're getting people interested, then people are thinking through whether or not they want to use you, then maybe a pilot or evaluation, then they buy, they convert, and then you keep them and you grow with them. right? This is a kind of a one example of a nurture process. Um, up until now, the first 10 customers, you did all of this, right? You, you built this, you were every single piece of this engine, right? Well, now it's time to build a growth engine where we start layering in other people to own parts of that funnel, right? The growth engine is a loop that you can repeatedly scale up and build to, um, in, in one or multiple parts of that sales funnel, right? Um, this isn't me, by the way. This, this slide, um, and then next two slides come from Reforge. Lenny, um, Ratchitsky and, and Dan, um, over at Reforge. Love, love their blog. Love Lenny's newsletter. Um, so I, I want to make sure that I give credit where credit is due. I love this model of this growth engine. Right? There's some things outside of growth engines that are turbo boosts that I want to make sure to clarify in a second. And then there is the fuel. What is the driver that powers your growth engine? And then there are ways of tuning or optimizing your growth engine, right? Today we're talking— right now we're talking about what's the first step, right? How do we build the growth engine? What can we do to offload one or more of these from being founder-led to being owned by somebody else. So, the first thing you want to make sure to do is not confuse turbo boosts with the actual engine. A lot of times I see things, people use things like press release or product launches, and they say, oh, this is what we're going to build our engine around. Those are just flashes in the pan. They're awesome. They're great to do upfront to prime the pump, but don't plan that to be the repeatable engine that you use. Examples of things that are repeatable, that are, um, that you can use as part of your engine are performance marketing, right? Things that you can invest money into and get leads from. Virality. If you can build a viral coefficient where one person refers another and refers another, um, similar to like Dropbox. Content. Being able to drive people in from SEO or videos or TikTok or newsletters, right? Most typically, sales is a big, you know, growth engine that people look at. Inbound sales, outbound sales, salespeople, something that you can continue to scale up and they can generate more business. Partnerships or physical spaces, additional growth engines that exist out there. I'm going to talk about the most common example right now of moving, of bringing in sales, right? When to bring in your first salespeople is the point in time in which you've built out the persona, the buyer persona, the target audience, and you wanna transition from founder-led sales to founder-supported sales. That doesn't mean that you hand over the reins altogether to a salesperson and then you walk away from this funnel. No, you want to partner with your first couple of salespeople and you want to— you know how to help a customer evaluate your product. You know how to talk to the customer about the pain points better than anybody else. So you want to still be involved in those critical steps, but you can get leverage from salespeople in building a bigger funnel, reaching out to more people. The things that you did in terms of cold outreach, you can hire 1 or 2 salespeople to bring people into the funnel. And it's also really great to have salespeople being the ones that push on the purchase. Um, the, the reason I love, um, having salespeople pushing on the close is sometimes you have to be a little assertive to get the deal done. You have to follow up persistently, and that lets you as a founder kind of take a step back. And if you— if the salespeople gets too aggressive, you can swoop in and be the hero. If, you know, if the customer is trying to negotiate on price, then the salesperson has somebody to fall back to and say, let me talk to the founder, and if you guys, you can come in, right? I really, really love making sure that as you hire salespeople, stepping out of the purchase process so that the salesperson is the buffer between you and the customer. Right? But they can re— the biggest thing is they can follow up more aggressively, they can reach out to more people. And reaching out to more people is critical because it is a numbers game, right? If you've ever read the book Crossing the Chasm, if you haven't, I recommend doing it. But if you have, you remember that when you bring a product to market early on, you're dealing with innovators, people that are willing to buy and use the newest thing because either what exists out in the market doesn't solve their pain, or they just love new innovations, right? But that's a minority of the market. By the time you're hiring your salespeople, you might be sneaking in to the early adopters. What does that mean? That means that 5% of the total addressable market are people that are willing to buy your product because your product is still at this point a little rough around the edges. Your marketing message isn't necessarily fully defined. You don't have the full-blown features that everybody's going to want. And so that means that if only 5% of the addressable market is there, it is a numbers game. You need people pounding away at 100 potential customers to find 5 early adopters or early innovators. Right? And so what do those salespeople look like? Who should you hire? You want to find people that are ambitious, that are go-getters, that are self-starters. You don't want to have to push them on metrics. A lot of salespeople are coin-operated, right? Which means that you tell them what to do, you tell them how many people to reach out to, you give them kind of the lists. You don't have all of that right now. You're just starting out. So you want people that were athletes, that you want people, you know, some of the best salespeople that I've seen came out of that A-type personality that are, you know, either competitive or athletic or, you know, were in the armed services. Those people are very good at just getting shit done. And that's the type of person that you want as your first couple of salespeople. Now, they still need some sales experience, right? Don't go out and get somebody that's completely cold. My best hack is to hire the first couple of people that have the ambition of being managers, that are trying to find a shortcut to step up in their career, that maybe they've been a salesperson for 2 to 3 years, 4 years, and now they're looking for a fast-track way to get up into leadership. And that could be your ticket in with them. You can say, listen, you do well, as an individual contributor and you can lead a team. This is a shortcut way of you crushing it for 6 months, then I'll hire a team underneath you. That's my hack and it's worked time and time again for me, is that find those A-types that really want to step up and go there. I see we have about 15 minutes left. I'm going to power through some of these slides here because there's still a lot to cover. Make sure as you're transitioning these things, define your sales cycle. Understand what steps do they talk to? They find somebody that's interested, they give them a high-level overview, then you qualify that customer, and then you maybe have a trial, you don't have a trial, you talk about pricing, you don't talk about pricing. The last step is usually a contract, and then you close a deal, right? There's a couple of key steps in these sales cycles that you really should think about. How to qualify a prospect. You wanna make sure that your salespeople are not wasting their time with the wrong people. I love this simple acronym, BANT. Somebody that you're talking to, that they're qualified, either has the budget, has the authority to buy, or can get somebody with the authority to buy, has the need, and has a timeline in which they wanna buy. Get those things locked down before you do a demo, before you go into a lot of different steps. To make sure that you're talking to the right people. Guide your salespeople on this. The other thing that's really important is understanding the steps in between, right? Once you've got them qualified until you close a deal, figure out what are the key things that— what are the key unlocks that help move a customer to getting a closed deal signed? Do they need us? Do they need to see a demo? Do they need to bring other people into the process? Make sure that you define these steps. And then at each point, make sure that your salespeople define a next step at every time they meet with them, every time they communicate with the customer. And the last piece here that I'll talk about is the legal procurement. Start with a simple agreement. Ideally, it's a click here to accept our terms and service. But if you need to send a contract, Start with a simple agreement. I love the Y Combinator template. Introduce the paperwork early because legal is a pain in the butt. It just is. It's going to take weeks and weeks. You have to leverage your champion. The one mistake that I'll say here is, do not drop your pants on price. I see so many founders trying to do this and say, hey, sign by the end of the month and we'll drop your— we'll lower our price. They can't make the legal move any faster. So you're just going to tell them that, hey, I'm willing to go lower on price. And oftentimes the next month they push back on that price anyway and get you to that lower price. So don't drop your pants on price in this procurement piece. Make sure that you lock in price before you get to legal and procurement. And then if you lose the customer, document every time why you lost the customer. Why did we lose them? What did they say? Keep track of that. That data is going to be imperative. So last pieces here, you've gotten the first 2 salespeople, they're getting numbers in. How do we scale this up? How do we build this engine to go all the way? Well, we have this growth engine. We decided what is the piece that we were doing. In this example, it was sales. We focused on sales. Now it's assigning ownership to different parts of the process, right? Get— hire a sales lead, pick somebody, either hire them or assign one of your salespeople to be the owner of the sales process. That'll allow you to create a new engine for maybe the marketing component to lead into feeding sales. Maybe then you hire another person for the activation pieces, right? Start dividing these pieces out and assigning ownership. That's the most important part. Some last tips and tricks here before, before we wrap up and get to, to questions. Hire more reps than you think you need to, right? Here's my hiring plan for my last company. Just with the dates adjusted, you'll see here for every, you know, when I went from 2 salespeople to 8 salespeople in a year, I had also fired 4 salespeople within that same year. So I hired 10 to get a net new of 6, right? Always hire a lot, plan to hire more salespeople than you think you need, because about 25 to 50% of your salespeople are not gonna work out, right? Feed your reps, understand what it means, what your reps need to be successful. If there's a marketing engine above them, Make sure that you maintain a ratio of how many leads they get per rep. One of the things that I failed on in my last company is feeding the reps. You can see here how our leads per rep kept declining, and over the years, our sales efficiency kept declining too. This was a lesson that I learned very, very hard until I had to downsize the number of salespeople I had to get the, the efficiency back up. And then the last piece here, incentivize the behavior that you want.

I—

one example is I paid my salespeople double to go out and prospect and find new deals and not just rely on marketing. In doing that, that moved the needle by 10% in terms of how many deals salespeople brought versus how many deals they relied on marketing to do. And at the most important part is Measure all of this. Measure every step of the way. Measure the KPIs. Measure these ratios, because this is an iterative process. This engine needs constant tuning, or what the Reforge guys call lubricant. Constantly measure, iterate, improve, find ways to tune that engine, because this will be an ever-evolving process. So we ran a little bit over. It's going to reduce the number of questions we can answer, but I'm willing to go a little bit over. If, if the FI guys are, because I see a lot of great questions in the audience.

I mean, thank you so much. That was a killer presentation. You know, we did— I actually host an event called Idea Fest. There's a lot of alignment here. I feel like there's some future collaboration and how we could expand on that. It's like step 1, how do you validate just the idea? Step 2, all right, now that you validate it, how do you get customers to actually pay for for it. Thank you. Thank you. Thank you. Light it up in the chat, everybody, if you really enjoyed that. Let's dive into some questions. We're gonna try and get through these rapid fire. I can stay for a little bit, but I gotta go do the South by Southwest thing. I got more planning to do. So I apologize to y'all in the audience. We're gonna try and get through these as quick as possible. So on that last note, when you were talking about hiring, hiring more than you need early on, especially on the sales side, you know, Cedric's asking, Uh, excuse me, not, uh, not Cedric. It's going to be, um, see, Nadia is actually asking, when's the best timing to do that? Is, uh, especially when you're looking at marketing support, is there a stage you should be looking at? Is that irrelevant?

So yeah, so what's— what you want to get out ahead of your revenue, you want to think about where do I want to be, and you want to hire people. You want to start hiring people 3 to 6 months ahead of where you want to be. So think about Once you understand you have your first 2 salespeople effectively working, you want to think about, okay, now I have a good sense of how many deals each salesperson can close, and now I can look forward ahead in terms of revenue and say, hey, if I had 4 salespeople instead of 2, how much revenue would I get? And then kind of work backwards to say, okay, when do I want to start ramping up revenue? Make sure, make sure to not, to not overscale, right? If you're more than doubling the size of your team in any 6 months, that might be pushing the envelope a little too far. But I see a lot of people more often than not be afraid to push the lever. So make sure that you push aggressively but not too aggressively.

Awesome. Brilliant. Okay, now back to you, Cedric. Cedric is asking, are there any tools that you would recommend to help conduct market research as you're looking to figure out pricing and fit?

Oh man, I mean, this is stuff that it's just good old-fashioned elbow grease, right? Like market research to me is just talking to people. Now you can Google some high-level ideas, some high-level numbers around how many potential customers exist in this segment. That doesn't have to be perfect. That just needs to be directionally correct. And if you haven't watched it, I go into a lot more depth in the last FI presentation that I did that I think is available. About how to get your first investors. But we talk about addressable market, we talk about researching that area a lot into that. So I'll point you to that to really double-click into how do I go out and figure out my addressable market, my persona, and, and how big the, the opportunity is.

Yeah, very good. Awesome. Let's keep it moving. We got a few more. I think I can get a couple more while we have time. Uh, Maciej is asking, any ideas or tips on how to acquire customers if your market seems to already be saturated?

Yeah. I mean, it's actually easier, I think, if you're saturated. If your market's saturated, what you're trying to do is differentiate yourself against the competition. Now, before you build something in a saturated market, it's really important to understand how are you differentiated. You have to have a thesis around why the existing market doesn't work and what your value proposition is into that market, right? So you should have already been thinking about that, now it's about validating that point, right? Some people want to pitch on value, right? Say, hey, I'm going to be half the price or a fraction of the price of the existing solutions. Some people say, I'm going to do it better, I'm going to solve this pain in a different, more novel way. If you can't answer that against existing solutions, maybe we shouldn't be building this product. There's enough out there.

That's a good point. That's a good point. That's something our core program really forces our founders to realize early on so that they're not spending too much time on an idea that may not have enough traction in the long run, saving them a lot of money, a lot of time, a lot of stress. Yeah. So let's, let's talk, let's go to the sales strategy. So Jordan is asking, is there a difference in strategy when trying to sell to mid, large, mid, like small, mid, or large size companies?

Absolutely. Absolutely. So with small to mid-sized companies, telesales works great. Um, with larger enterprises, depending on the complexity of the sale and depending on, um, the type of product that you're selling, oftentimes you might have to go into kind of outbound sales, field sales, enterprise sales. There's, they're all kind of names for the same thing. Those are higher, more expensive reps that either go on site or a lot more consultative with, with the buyer. So enterprise sales motions usually require a salesperson that costs on average in the US about $300,000 a year, you know, on target earnings. Whereas in inside sales, you can go— you can get them for as low as $100,000 on target. So there is a very different strategy. There's also kind of the, the team approach, right? The— with enterprise sales, those salespeople do not hunt for their own deals. They don't. You actually have to kind of build a BDR that feeds them leads. You have to have a sales engineer that supports them from a technical side. These are consultative salespeople that are just working on getting the deal done. And oftentimes their value is in their Rolodex. So it is very, very different in terms of what kind of segment you're targeting and what kind of person that you hire and what kind of team you build around that person.

Got it. That's solid. I'm going to stick on that and probably get this— probably our last question from the audience on sales strategies. Do you— early on, do you pay your sales reps a straight salary or is it some more commission-oriented?

No, I got— I'm a believer that like you got to again incentivize the behavior you want. Salespeople, 50/50 is my go-to, but 60% salary, 40% commission, that's okay. Now here's the thing. If you have a salesperson that doesn't want to work off a commission, then that's not the hungry salesperson that you want, right? You want somebody that wants to kill it. My best salespeople are the ones that come in and they ask in the interview process, How do I make 6 figures? How do I get to $500,000? Tell me how I can blow out my quota. Now you're just building this out. You may not know what's realistic in terms of the amount of revenue that they could bring. So maybe we develop a ramp. Maybe you give them 100% quota relief for the first 3 months or the first 6 months and then say, hey, we're going to ease into it as we learn. So I'm going to pay you full as if you made 100% of the sales But, but we're going to— there's going to be a transition period off of this ramp so that you are going to have to hunt your own stuff. And that's one way of kind of easing some salespeople in because with no leads, no pipeline, no nothing coming in cold, you might have a hard time recruiting some salespeople that really know, understand what they're doing. And they'll see that like, hey, this is going to be me plowing the road with my face. I may not make a lot of money. I'm going to take a pay cut to get to make more money or to have more opportunity, that's one way to bridge it. But never, ever, ever, in my opinion, go salary only on salespeople.

Good point on that. And on that note, I'm going to ask one last question before we let you go. We appreciate the time you spent with us today. This was super valuable. We have so many people still in the audience. But one thing I like to ask anybody that comes in and speaks to our FI Global community is to kind of close out especially for people that are just trying to get something off the ground right now, they don't know where to start. What would be the one piece of advice? If there was anything else that a founder in here, aspiring founder, could take away from this hour together is what would be the first thing you'd ask them to do before they even started as they started to build their startup journey?

Yeah, I mean, to me, I've been through the craziest roller coasters in my company. We've run out of money. I've had to fire a co-founder. I've been sued. I've just dealt with it all. And I really believe in this age of entrepreneurship that there's two key things that you should make sure that you have. One is that you really have a lot of conviction in what you're working on. The problem that you're solving, you should care about it. You should have conviction around it. You should say, I really believe in this problem and providing a solution for this problem. And two, that you build a team around people that you want to work with, that you really appreciate, that you want to be, you know, in arms, in the trenches with these people, because the startup journey is hard, man. Like, this is not glamorous. You know, by all means, on a risk-adjusted basis, you're much better off going to work for Google than going to start a company. And the only thing that's ever gotten me through the thick and thin, through the hardest times, is the people around me, my love for the people around me, and my passion for what I was doing. So those are my two pieces of advice is really care about what you're doing and the people around you.

Fantastic. That's a great way to close it out. Founder CEO of Finmark, Ramy Youssef, thank you for joining us again. I hope to have you back very soon. Hope to maybe see you in person in Texas at some point. Thank you for sharing this knowledge and wisdom to such a big audience. I think we capped out at nearly 400 attendees today. So thank you again. And we'll see you next time on that end. Couple things I want to share with our audience before we let you all go. Stay, stick around in the weeks ahead, stick around for some news. Our next big Founder Showcase takes place on April 6th. It's also going to be a Wednesday. We are featuring special keynote from co-founder over at Techstars, Mr. David Cohen is going to be sitting down for a fireside chat with with our co-founder CEO Jonathan Grecian, and we're going to get into another great showing of some amazing founders from all around the world with a variety of special guest judges also from around the world. So stay tuned for that. You should be getting some emails and more information. We're already starting to ramp up that promotions. And otherwise, please keep engaging with us. Please show into these events. We do these for you so that you have the best possible insight to build the business that's going to change the future and also affect directly the communities you're trying to help. So for all of us here at the Founder Institute, thank you for joining us for another great global event. My name is Martin, EIR over here at FI. Wherever it is you are in the world, we hope you find you safe, well, take care of yourself, take care of each other, build a future that we all want to see, especially the one that you want to see for the people around you. We'll see you next time.