The 3 Phases of Enterprise Software Sales Maturity: A Founder's Guide
I've spent over a decade leading an enterprise software company, scaling it to more than $100M ARR. Along the way, I've taken several products from zero to tens of millions in sales. Drawing from this experience, I've developed a framework for the various phases of Enterprise Software Sales Maturity. This framework offers guideposts for founders to consider at different stages of a successful enterprise software company's lifecycle.
Let's break it down into three phases of scaling sales in an enterprise software company:
Discovery: Reaching Product-Market Fit
Blueprint: Building a Go-To-Market (GTM) Motion
Scale: Perfecting the Ramp Model
Discovery: Reaching Product-Market Fit
During the discovery phase, the main goal for founders is to achieve Product-Market Fit (PMF). We all know what PMF is about: making sure a startup's product or service meets the needs and demands of its target market. For an enterprise software company, this typically happens when you're at the $0-$1M ARR range. You'll know you're on the right track when you have a handful of referenceable customers (usually 5-10, depending on the Go to market model and target customer) and a "painkiller" solution.
Blueprint: Building a Go-To-Market (GTM) Motion
In the blueprint phase, the goal is to create a repeatable GTM motion. This covers everything from promoting and distributing to selling and implementing your product or service. You'll likely be in the $1-$10M ARR range during this phase. Success here looks like a standardized sales playbook and reps bringing in 3x their On-Target Earnings (OTE) in new annual bookings. So, if a rep's OTE is $250K a year ($125K base and $125K commission), you'd want them consistently generating $750K a year in annual bookings. The Blueprint phase often is overlooked and involves building out the sales playbook like the one I shared when I was the CEO at Gigya.
Scale: Perfecting the Ramp Model
The scale phase is all about replicating your GTM motion. It may sound simple, but it gets complex with factors like org design, capacity planning, sales enablement, pipeline plans, and forecasting. To succeed, aim for a repeatable sales model with reps consistently hitting around 80% of their quotas and 2-3x new ACV growth. This phase is what propels a company to scale and reach that $100M+ milestone.
In upcoming posts, I'll dive deeper into each of these phases, discussing the aspects to focus on and the metrics you should be tracking. Stay tuned!