**Dear SaaStr: I’m Joining a B2B Startup at $3m ARR as VP of Sales. What Should I Do First?**
Stepping into the VP Sales role at a company with $3M ARR is a pivotal moment. At this stage, the company has likely found some product-market fit, but scaling efficiently and predictably is the next big challenge. Here’s how I’d approach it:
1. **Assess the Current State. Ideally Before You Start.**
Before making major moves, understand the lay of the land:
– **Pipeline Health**: Evaluate the current pipeline’s strength, win rate, and coverage.
– **Sales Team**: Assess the number of reps, their productivity, and quota attainment. Determine if they are suitable for the next growth stage.
– **Customer Success**: Check churn rate, NRR, and customer expansion or loss after the first year.
– **Marketing**: Review the lead generation engine, MQLs, and conversion to SQLs.
– **Processes**: Determine if there are repeatable sales and customer success processes or if everything is ad hoc.
– Listen to 5+ sales calls and join at least 2-3 before starting.
2. **Set Clear Goals with the CEO. Before You Start.**
Target $10M ARR by:
– **Triple ARR in X months**: Aim to add $3.5M ARR in both Year 1 and Year 2.
– **Focus on NRR**: Target 110–120% NRR. Expansion revenue is vital.
– **Build a Predictable Sales Machine**: Hire, train, and scale the team.
3. **Build the Team: Bring 1-2 Ringers With You.**
To scale from $3M to $10M ARR, hire and scale the right team:
– **Sales Reps**: Aim for 6–8 strong reps to achieve $10M ARR, with each having a $500K annual quota.
– **SDRs**: Hire 2–3 SDRs for outbound pipeline generation.
– **Customer Success**: Maintain 1 CSM per $2M ARR for account management and expansion.
– **Marketing**: Invest in demand gen if necessary.
4. **Focus on Metrics. Know Them Cold, and Pick One or Two to Improve First.**
Obsess over:
– **Pipeline Coverage**: Maintain 3x pipeline coverage.
– **Quota Attainment**: Ensure at least 70% of reps hit quota.
– **Churn and NRR**: Keep churn below 10% annually, aim for 110–120% NRR.
– **CAC Payback**: Ensure CAC payback is under 12 months.
5. **Refine the Sales Process.**
Enhance what got you to $3M ARR:
– **Standardize the Sales Playbook**: Document successful tactics and train the team.
– **Improve Onboarding**: Aim for new reps to be fully ramped within one sales cycle.
– **Focus on ICP**: Concentrate on ideal customer profiles, avoiding poor fit customers.
6. **Double Down on Expansion Revenue.**
At $3M ARR, expansion revenue is key:
– **Land and Expand**: Focus on growing existing accounts through upselling or cross-selling.
– **Customer Success Alignment**: Incentivize CSMs for expansion revenue.
7. **Build a Predictable Lead Gen Engine.**
Scale with a steady lead flow:
– **Inbound Marketing**: Invest in content, SEO, and ads, either with marketing’s help or independently.
– **Outbound Sales**: Create SDR teams for targeting high-value accounts.
– **Partnerships**: Utilize channel partnerships to increase pipeline.
8. **Align the Team.**
Ensure alignment across sales, marketing, and customer success:
– **Weekly Revenue Meetings**: Review pipeline, deals, and progress.
– **Shared Metrics**: Align everyone on ARR, NRR, and churn goals.
– **Clear Communication**: Make the strategy and roles clear to everyone.
9. **Own The Number. From Day 1.**
As the first VP of Sales or CRO, own the weekly, monthly, quarterly, and yearly goals from the start. Take responsibility for the ARR number, even if not all of it is within your direct control.
This is the playbook I’d follow as a new VP Sales at $3M ARR. It’s all about building the foundation for predictable, scalable growth.