Tips for Navigating Growth Phases in Startups

In 66 months, I helped grow Gong from $200k ARR to $7.2B in valuation and worked alongside some of the planet's best sales leaders. Here's the 6 biggest lessons I learned: 1. Overinvest in great marketing early on. I’m still shocked at how few startups do this. Sales with no (effective) marketing early on to pave demand and provide air-cover is a brute-force way to build. 2. Measure twice, cut once when hiring leaders. Your first leadership hires will have cascading effects on your company that ripple through many years. Their fingerprints will weigh heavy on everything from your sales motion, to company culture, to the people they hire, whether you want it to or not. Even after they’re gone. Recruit and hire accordingly. 3. Beat the hell out of what’s working. Finding what works in growing a startup is like drilling for oil. You’re going to drill a number of "wells" and come up dry. But soon, you’ll find one to go DEEP with. Drill it for all it’s worth. Don’t screw around trying to find too many other oil wells when you haven’t even maxed out your best one. 4. Hire salespeople who thrive on ambiguity. Not just those who CAN do that, but those who LOVE to do it (because they'll be doing this for a while as your market evolves). Do this, and you’ll accelerate your learning curve to a repeatable sales motion. Hire entrepreneurial reps. 5. Inject risk into the business as you scale. As you scale, your “portfolio” of growth initiatives should contain more and more risk. It's as if you're a fund manager. Early on, find what works and cling to it. But as you grow and you’re able to rely on several well-established growth vectors, start to introduce risk into your portfolio. Examples: Experimenting with channel partnerships, international, new segments of the market or use cases. 6. Realize the "growth at scale" playbook is different than the "scale up" and "startup" playbooks. What got you to $50M or $100M will not get you to the next level by itself. The path to $100M, and going beyond that (“growth-at-scale”) are two very different situations demanding different means of growing. Early on, nothing matters but (the right) customer acquisition, controlling churn, and making your product absolutely amazing. But if you’re going to continue growing at a fast rate, several other methods have to start firing: high net dollar retention (NDR), multi-product and multiple streams of ARR, going hard and fast on international expansion, and crossing the chasm into “low tech” industries. This list is non-exhaustive. For those of you who have ridden that tornado, what would you add? P.S. Turn "open opps" into paying customers at any phase of growth with these 10 closing motion scripts: https://lnkd.in/gtxYd9Vs

I was one of the key pieces of a startup that went from $0-40m+ in ~6 years. Here are the 12 GTM learnings I wish I knew earlier that would have allowed us to achieve that growth in half the time: 1. Think about email deliverability from day 1 – this is a dark, deep hole to get out of 2. Figure out how to get other technology vendors in your accounts on your team – even 1-2 key partners help remove friction 3. Competing against massive incumbents who can bundle their competitive offering to your product as a platform/suite sell is hard to compete against – if it feels like you are pushing a boulder up a hill, find other areas to play in 4. When in an early market – make your “nurture” program elite. This is more than marketing emails – most accounts took multiple opps before moving forward 5. Have a “not doing” list – smart new hires will eventually come to ideas that most orgs have thought of. If you decided NOT to pursue an initiative, make it known to avoid new people spending time on it 6. Have the confidence to push back to the board when you know deep down something isn’t going to work – ex: hiring super enterprise reps without a compelling offering, support structure, or relevant proof 7. The minute you realize you have a top 5% performer, you should have a retention plan to keep them paid well, constantly challenged, and around for as long as possible 8. Take performance management seriously – unfortunately getting comfortable firing people is what separates great leaders from the middle of the pack 9. Remove negativity from the organization, regardless of performance --- high optimism and low ego is contagious, but so is negativity 10. Maximizing for speed is a huge advantage – it’s hard to know what decisions and changes are going to work – focus on getting more shots on goal 11. Build a calling / hunter culture from day 1 -- it's hard to turn this on and growth channels change 12. Take revops and enablement seriously – if you think you need to hire the highest IQ, quick-on-their-feet reps to be successful, you haven’t worked with a great enablement leader or sales leader who can truly build repeatable systems. Don’t underinvest here.

In 8 years, Pavilion went from a local happy hour for 10 overworked VP of Sales to a global platform with 10,000 paying members around the world. Here are the 5 biggest lessons I learned about growing a startup: 1. Focus Your market is bigger than you think. Your first group of products will scale further than you think. Before $20M in ARR, resist the temptation to go broad.  Resist the temptation to open an office in a new geo. Resist the temptation to sell to an adjacent customer. Every new initiative or GTM motion is costly, time consuming and distracting. You’ll need all of those things eventually (new markets, new customers, new products), just not as soon as you think. Enjoy the beautiful monotony of doing one thing very well. 2. Talent drives outcomes Your execution is directly related to the quality of talent on your team.  You want there to be a mix of people that are hungry and can learn.  And you want there to be people with deep subject matter expertise.  But understand that your results are going to be driven by the quality of the “motor” from the people on your team.  Lower you hiring standards at your peril.  It will show up in slipping targets and missed forecasts. The old adage “hire slowly, fire quickly" is true.  Hiring for a role out of desperation is a surefire path to mediocrity.  3. Never lose sight of the customer Your customers will provide you the roadmap. In B2B especially, you’re not Steve Jobs.  You don’t need to know better than them. Avoid drawing up your strategy in a backroom whiteboard without checking in with them. Avoid product teams that don’t spend time deeply interacting with customers. Avoid zooming out so far you lose empathy for what motivates them. Customers are your north star.  4. Size your bets For most questions, it’s not “if” you should do something but to what extent.  New ideas should be encouraged but preserve your precious capital by ensuring that before you go big you have enough data to understand HOW big.  Maybe you should build a new GTM motion but that doesn’t mean throwing millions of $$$ at that new motion before you have evidence it works. 3 AE’s hitting quota? Great! That doesn’t mean hire 20. Hire 3 more. See how they do. Channels don’t scale linearly. Size your bets. 5. Build your operating rhythm Every company needs an operating system. Ideas are great. Talent is great.  But you need a system where the team is reviewing performance on a regular basis, is accountable to each other, understands expectations, and feels pressure to deliver results.  So figure out what your system should be. It can be V2MOM. It can be EOS.  But it has to be something that provides a rhythm to your team and builds discipline and a regular reporting cadence. Bottom line... The most important lesson is the first one: Focus.  Get GREAT at a small number of things. Not good at a huge number of things Being great is 10x the value of being good.

As a trusted advisor to many InsurTech startup founders, I have been privileged to witness firsthand and help their growth journey from innovation to scaling. Initially, it’s all about innovation, but as startups grow, a tension between innovation and growth emerges. I am often asked if we can have both. Some key challenges include: 1. Maintaining Agility: Early-stage startups are nimble, but as they grow, decision-making processes can slow down. 2. Resource Allocation: Balancing the allocation of resources between innovation and day-to-day operations becomes more complex. 3. Systems and Processes: Scaling requires specialized roles and structured processes, which can limit the initial creativity. 4. Communication: Small teams communicate effortlessly, but expansion requires formal methods to keep everyone aligned especially in today's hybrid or 100% remote workplace 5. Focus: Startups iterate to find product-market fit. Once achieved, the focus shifts to scaling, potentially restricting further innovation. Here are some recommendations for addressing the Innovation/Growth Tradeoff: 1. Anticipate Challenges: Recognize and plan for growth-related challenges. Stay agile and monitor market trends. 2. Foster Communication: Keep innovation a priority with regular updates on market changes and new initiatives. Weekly stand-up meetings can keep teams aligned. 3. Encourage Cross-Functional Teams: Promote collaboration across different departments to foster innovation and maintain a holistic approach to problem-solving. 4. Invest in Talent Development: Continuously up-skill employees to keep pace with industry changes and maintain a culture of innovation. 5. Dedicate Time for Strategy: Ensure strategic thinking isn't overshadowed by operational efficiency. Regularly assess market demands and vulnerabilities to stay ahead. While some loss of innovation is inevitable with growth, it’s not an all-or-nothing situation. By balancing and prioritizing innovation, InsurTech startups can achieve sustainable growth and long-term success, positioning themselves for a successful exit.

As an innovation educator, I've seen countless entrepreneurs struggle with changing environments as they grow and that's why I invested over a decade in trying to understand why. In our upcoming book "Nail it, Scale it, Sail it - The Innovator's Odyssey" we explore the unique challenges and strategies for each stage of the innovation journey. 1. Nail It: Surviving the Jungle The Nail It stage is like entering a dense, unfamiliar jungle. It's hot, stuffy, and filled with strange sounds and smells. The environment is unpredictable and resource-constrained, requiring extreme agility from the small team. In this stage, innovators must embrace a culture of frugality and customer intimacy. They need to know all their customers, learn what they need, and react fast to errors. Speed typically overrides quality, as a minimum viable product tested early in the marketplace will do more good than waiting for perfection. 2. Scale It: Conquering the Mountain Scaling is like embarking on a daring expedition up a long, steep mountain. The environment becomes clearer, with visible paths and a sense of direction. However, it's a paradoxical adventure that demands both expansion and refinement. As Bob Sutton of Stanford School of Engineering points out, "Scaling is a problem of less. There are lots of things that used to work that don't work anymore, so you have to get rid of them." In this stage, innovators must shift from "what" to "how," balancing growth with structure. They need to streamline processes while expanding, cultivating resilience and discipline. Like Dan Gilbert said, "Ideas are rewarded. Execution is worshiped." This stage is where your ability to execute efficiently at scale becomes paramount, all while maintaining the innovative spirit that got you here. 3. Sail It: Navigating the Open Seas The Sail It stage is like navigating open waters. Growth has decelerated, and the focus shifts to sustainability and continuous improvement. The environment is more stable but still competitive, requiring vigilance and swift adaptation to market dynamics. In this stage, innovators must leverage data for decision-making and manage complex resources effectively. They should embrace a culture of continuous improvement, optimizing processes and refining operations. As the company's visibility expands, maintaining a strong brand reputation becomes crucial. It's about staying innovative while optimizing operations, ensuring the company can weather any storm while still charting new territories. Remember, what works in one stage may hinder you in the next. The key is adapting your mindset and strategies as you progress through these distinct environments. Curious about the 'why' behind these stages? Stay tuned for my next post, where we'll explore the fundamental reasons driving this innovation journey.

I see this pattern consistently repeat itself in start ups. You find product market fit 🎉 Great, time to start selling! You start scaling your founder led sales motion with 3 reps. Things seem to be working so you add 4 more reps and a sales leader! Everyone seems to be crushing it. 🔥 You think “Yay we made it. We have a repeatable revenue engine” 🎉 You hire 5 more reps and another manager as it’s time to scale again ✅ But this time, somehow none of them are ramping as expected. Oh, and your existing team of 7 reps aren’t doing well either.. 🤔 huh?! It must be the VP of sales. We need a new one that’s seen the next stage of growth. 🤔 And the cycle continues… In a growing startup, the only truth is — **what works today will mostly likely break tomorrow** 🔑 🔑 🔑 Scaling a 7 person team is drastically different than scaling a 30 person team vs a 150 person team. 📈 And the best time to make big changes like bringing in experienced leaders (as advisors or full time execs) is when things are going well aka **BEFORE** the slowdown happens. ✅ 1️⃣ Embrace paranoia when things are going well (and stay close to the details) 2️⃣ Have the courage to do the hard thing that works for the business but may not work for specific people 3️⃣ Focus on avoiding issues vs solving them (PS: The number of reps could look different in every case based on your industry, quality of your PMF, ACV etc but the pattern is similar) #startupgrowth #revenuegrowth #startup #founders #salesleadership

Most founders never break $10m. Not because they aren’t smart or hardworking. They just don’t know how to scale. I took AppSumo from $3m to $84m in six years. Bootstrapped. Here’s the exact framework I used to do it: ~~ Before we dive in—this post is just a preview. I broke down these frameworks in depth with Greg Isenberg on his podcast. I'll share the link to watch in the comments. == 1. The "9 Steps to 9 Figures" Framework Scaling happens in three phases: • Startup ($0-$1M): Find product-market fit. • Scale-up ($1M-$100M): Build a machine. • Grow-up ($100M+): Protect the legacy. Each phase requires a different skillset, mindset, and strategy. == 2. The Triple, Triple, Double, Double Formula Triple your business three years in a row. Double your business twice in a row. Here’s is the roadmap: Year 1: $1M → $3M Year 2: $3M → $9M Year 3: $9M → $27M Year 4: $27M → $54M Year 5: $54M → $108M == 3. Find Product-Market Fit first You don’t have product-market fit until it feels like you're wearing a meat suit in a dog park. If you’re still convincing customers to buy, you aren’t there yet. When you can’t keep up with demand, now you’re scaling. == 4. Retention before growth Building a business without fixing churn is like building a skyscraper on sand. Every 3% increase in net revenue retention DOUBLES your company’s valuation. Before you scale, fix retention. Otherwise, you’re filling a leaky bucket. == 5. The 80/20 Growth Rule • 80% of your resources on what’s already working. • 20% on new experiments. At AppSumo, one small test—switching from credits to cash payments for referrals—became an 8-figure revenue channel. Test small. Scale what works. == 6. You only have two bottlenecks If you're stuck, your problem is either: • Sales – Not enough leads? You don’t have a marketing problem. You have a product problem. • Delivery – Selling more than you can fulfill? You’re scaling chaos, not a business. Fix these first. == 7. Hire to scale revenue, not to discover it. Most founders hire too soon. Your job is to find the gold vein. Your team’s job is to mine it. Hiring too early = You burn cash. Hiring too late = You burn out. Hire only when scaling becomes the bottleneck. == 8. The Shield vs. Sword Framework for decision-making Rate every decision 1-5 on: • Impact (Sword) – How big is the upside? • Effort (Shield) – How much work is it? Only pursue 8+/10 ideas. If it’s not a clear win, it’s a distraction. == 9. Build an executive team that replaces you Your business only has two core functions: • Sales (CRO) – Gets Customers • Delivery (COO) – Keeps Customers Pro tip: Hire first in your zone of genius. Why? Because you’ll know what excellence looks like. == 10. The founder is the hardest worker. The CEO is the laziest. If your calendar is full, you're still a founder. A CEO’s job is to think 3-5 quarters ahead while the team executes. If you’re in meetings all day, you aren’t running the company.