If you’re a founder at the Seed Stage of the company-building journey, there’s a good chance you’re intimately familiar with the expression above. It represents the first of many sales milestones for a typical enterprise startup and is a critical metric to hit in order to raise subsequent financing in the form of a Series A. Reaching this goal from a customer acquisition standpoint also typically indicates that you’ve achieved, or are very close to achieving, product-market fit.
In a time where startups are raising record-setting levels of capital and making/losing eye-watering amounts of money, one would think that getting to that first $1 million in revenue, while not easy, would still be very attainable.
The unfortunate reality is this $1M sales milestone is one of the biggest roadblocks that startups slam into.
Most startups never reach it and when others finally do, many are left sputtering between extension rounds or crossing the Series A mark with lasting damage.
If you drill down to analyze the overall conversion rates here, which take into account all milestones (sales, product, team, etc.), it’s made clear that the jump from Seed to Series A is by far the hardest to make with 79.4% of companies failing to do so.
The good news: the solution to significantly increase your chances of hitting/surpassing the $1M sales goal already exists.
You may be familiar with the idea of sales enablement, but for those new to the topic, sales enablement can be defined as breaking downthe complexity of sales into practical ideas through scalable and repeatable practices that will lead to increased revenue. In simplest terms, it’s the systematic process of teaching others how to sell effectively.
The same way there are defined steps and processes for the software development lifecycle, a good sales process has the same level of rigor for delivering the highest quality revenue (CLV) at the lowest cost (CAC) in the shortest time (ASC). Sales enablement programs provide this process to sales reps, regardless of whether they’re in their first year or their 10th, in order to learn a company’s sales methodologies through training, templates, frameworks, playbooks, email sequences, etc.
For companies that have sales enablement programs, the results are impressive. According to Sales Hacker:
75% of companies that implemented a sales enablement process reported higher sales than in the previous 12 months (with nearly 40% of them reporting growth of 25% or more).
59% of companies that have defined sales enablement functions exceeded their revenue targets (including 72% that exceeded them by 25% or more).
If you’re still not convinced, according to a Pitchbook report, Lyft, Zoom, Slack, Uber, PagerDuty, Fastly, Crowdstrike, and over 84% of tech IPOs over the last two years have sales enablement programs.
The bad news: until now, sales enablement hasn’t been accessible to Seed-Stage startups.
Here’s my take on why that’s the case:
1. The seemingly endless amount of sales tips, tactics, books, YouTube videos, podcasts, etc., are not for first-time founders. Instead, this content is created for career salespeople and companies that already have product-market fit and are now scaling revenues for their next $1M, $10M, $100M, $1B+.
2. Sales enablement programs require a significant investment of time, people, and money (roughly a $200K starting point on the low end). Only companies that have hit significant revenue milestones and have medium/large sales teams can afford to build one internally or hire expensive consultants.
That’s why we created the sales arm of Unusual's Founder Services. Our program is designed to take all of the insights, strategies, playbooks, and tactics from world-class sales and sales enablement programs and distill them down for what’s most applicable and most impactful for seed-stage founders and their goals.
By better-enabling founders around sales go to market strategies at the beginning of their journey, when they need it the most, I believe we will allow more companies to survive the seed-to-series-a death gap and become more well-rounded and effective executives in the process.
If you tasked the majority of first-time sellers with the goal of bringing in $1M of revenue with no training, no leads, no sales management, no product recognition…oh, and you have to do it in 18–24 months or you’ll likely lose their job, few would sign up for that.
Yet, this is exactly what’s being asked of first-time founders.
By creating what I consider afounder sales enablementprogram, I’m excited to take what’s made other software companies and sellers wildly successful and give it to founders who are just getting started.