Tracy writes

In a recent LinkedIn post I caused an immune-system-like response when I described the mid-market as “no man's land.” Some folks who build for the mid-market wanted to know what I meant.

It takes very different skills to build for and compete in SMB versus Enterprise. The mid-market is the transitional segment between the two. Of course, businesses, including TigerEye, build and sell into the mid-market. I just believe it should not be a startup's initial target market. I define mid market as companies with 100 to 999 employees, but how companies draw their mid-market lines will vary depending on their segmentation needs.

In my experience, mid market has three distinct flavors:

1. Ramping: Mid-market companies that still behave like SMBs.

2. Graduating: Mid-market companies in the process of, or those that have already spent millions in preparation for, scaling to the next level and aspiring to match their enterprise counterparts.

3. Autopilot: Mid-market companies that have hit a wall in terms of total addressable market and rapid growth. 
   

If you want to sell to the first two mid-market categories I've defined above, it's best to pick one outer lane first, either SMB or Enterprise, which will automatically include either ramping or graduating mid market, respectively.

What we don’t want to do is compete on two fronts, against well-resourced incumbents on one side and hungry startups on the other. Additionally, these different segments have different buying behaviors, so it's best to focus and excel at selling to one segment, refining the sales process before adding more complexity to your business.

Ramping mid-market companies, which have recently graduated into this segment, often experience growing pains. As a result, they are not afraid to make decisions quickly, and adopt new technology to make their days less painful. Most startups can successfully build for ramping mid-market companies by solving a single pain point really well then broadening their feature set later on. In most industries, there are usually more potential customers in this segment at lower average contract values. For these ramping mid-market companies, features such as freemium and trial offerings, along with in-product tool tips that promote self-onboarding, are must-haves.

In contrast, graduating mid-market companies have more decision-makers across multiple departments, with a greater number of internal processes. These factors often create a kind of red tape that can slow down the evaluation and deployment of new technology. To successfully sell to this group, there are minimum table stakes requirements that you have to meet to get past the front door. This includes security and compliance certifications like SOC2 Type2 and ISO27001 and ISO270002. Additional requirements may include role-based access control (RBAC) and admin consoles for the non-user buyer. These technology deployments are usually departmentwide or companywide, which will require some form of customer success and/or professional services. At five-to seven-figure average deal sizes, companies will expect hands-on training, especially if customization has been built to make their environment work.

Autopilot mid-market companies often have sufficient revenue to place them in the mid-market segment, but their growth has slowed. Typically, these companies are in cash conservation mode, focusing on strategizing new ways to accelerate their growth. When a company faces high-risk challenges like slow growth, it will be more cautious about every penny spent.

To build for the mid-market, early-stage companies need to determine who they want to serve: SMB or Enterprise. It's all about focus and strategically choosing the sweet spot. This doesn't imply ignoring the mid-market's potential; it simply shouldn't be the starting point.

Companies are bought, they are not sold. Buyers typically pursue acquisitions to:

• Gain market share, increase revenue and customer logos.
• Remove a competing business from the market.
• Expand their product lines and technical capabilities.
• Expand in-house technical and sales expertise quickly.

In December 2018, Autodesk acquired PlanGrid for $875 million for all the reasons above. I worked at Autodesk, assisting in integration for fifteen months in the newly formed Autodesk Construction Group.

Integrating a startup into another company is like jumping into freezing cold water — there is an initial shock to the entire system. As founders, it was important that we took care of our team and ensured our products continued to work well for customers.

This post is for anyone who has a signed LOI or term sheet with an acquirer and is looking for lessons learned on how to navigate the new world — what to anticipate and what to try to avoid. For folks who are talking to corp dev, read this. (For founders who want to sell their company right now: It is mentally, physically and emotionally taxing to live two competing realities — to envision two competing futures for your startup at the same time. Your job is to preserve optionality and make all options (including running your startup standalone) available if you want to entertain an M&A conversation. Do not risk slowing down in execution and growth to talk to corp dev).

Lesson #1: Vision

After an acquisition, most companies prioritize product integration as their top concern. In our case, this was true as well. However, true product integration is often a lengthy and unsatisfying first priority, as it can take years to complete if it ever happens. Unless the architecture is exactly the same, and products somehow snap together nicely, the result is often a hodgepodge of incompatible products. The costliest challenge of focusing on product integration as the number one priority is that it overlooks more critical needs. The top priority should have been establishing and aligning on a shared vision.

In the early days, our teams, revenue targets, incentives and sales processes were not integrated. This led to construction customers receiving multiple sales calls from different teams within the same company, resulting in ARR churn and ARR shifting between product lines.

After the acquisition, a team member expressed, "We never had the chance to mourn PlanGrid's death." Within eighteen months, approximately 40% of our team left. Some believed we had faltered in the market and were absorbed by our competitor, while others saw it as an opportunity for new leadership roles and more direct reports.

Anytime there is an org change and new reporting structure there will be turbulence, and we experienced this emotional turbulence at full scale. Retention packages were put in place to retain the strong performers, many of whom have had amazing careers at Autodesk. I did my best to motivate the team and set them up for success before I passed the baton.

Lesson #3: Go-to-market motion

With the newly acquired startups came a dozen new products for the new construction division to sell. The company hired a consultant to help enable and train our folks on how to message and cross-sell. Meanwhile, incentives were put in place to encourage sales reps to cross-sell all construction products for the first year.

We needed hands-on, in-house leadership to learn how to sell a newly formed platform and coach the team on how to do it. The sales team would eventually excel at representing the different product lines, but I left before I saw it happen.

Lesson #4: Back-office systems

During the merger, we had to drop all our point solutions and startup tools to turn on all the enterprise “winners.”  We wasted hours on slow, cumbersome software and were thrown into confusing legacy workflows. The new tools we were given not only made us less productive, but also made us continually frustrated and angry. We didn’t have software to help us strategically run our business. This is what inspired us to build our new company TigerEye. 

Takeaway: Back-office systems integration is boring -– it’s blocking and tackling — but to function as one  team, we must use the same tools. We made the right decision to act quickly on system integrations, but we lost valuable teammates. Great people want to use great tools to do their work.  

It is almost impossible to start product integration without first choosing the engineering leader, defining the engineering culture and uniting the engineering team. Without leadership, any conversation on whose architecture or tech stack or login system is better will likely trigger immediate in-fighting. Assuming a single engineering leader is now in charge, the brass tacks will include what libraries to use, design-system choices, dev tool vendor selection and integration of each overlapping product functionality. 

Takeaway: Unification of the engineering team and products is gnarly and challenging. And the larger the team the harder it is. Put strong leaders in place and prioritize their retention because most great engineering teams prefer building new products than integration work.  

For folks who are considering acquiring another company, there may be real strategic benefits. But it also comes with a hefty tax. Beyond the cost of the acquisition itself, the integration process can be time-consuming and challenging, and it often results in a thrashy transition period, and several products that might not fully integrate. But this turbulence can be navigated smoothly with clear vision. 

1. Build something people want and believe in the power of your product. People can tell if you’re trying to sell them garbage. And people love buying products from trusted partners.

2. Establish a clear customer definition and make sure everyone on your team knows it.

3. Put yourself in your customer’s shoes — understand their fears and desires; keep all of these in mind.

4. Find the biggest pain point your customer has; focus all product and sales conversations around solving this pain point for them.

5. Identify users, buyers, deployers, and trainers.The larger the company, the more likely these will be different people and departments and you will need to sell to (or around) all of them.

6. Learn how money flows in your customer's organization. What budget line items can be used to pay for your product?

7. It is hard for teams to create a new budget that doesn’t exist in their financial plan, but not impossible for something that has excellent return on investment.

8. Create a database of companies and users who should use your product, then talk to them, and document every interaction.

9. In the early days, use a spreadsheet for as long as you can to track customers until your life sucks so bad you don’t mind it sucking a little more to deploy Salesforce.

10. Midmarket is no man’s land. Is your product’s sweet spot in SMB or Enterprise?

11. Slice your market into different perspectives so you can understand the potential levers for growth. Consider segmentation by geographic regions, customer profiles, and industries.

12. Plot your customers onto a cross section where x-axis is how much they pay you and y-axis is growth potential. Prioritize your time and investment with everyone who shows up in high growth potential.

13. Do not let anyone waste your time or energy. Disqualify the tire kickers quickly. 

14. Get prospects into the right swim lanes. Is this a $50 deal or a $50,000 deal? Allocate time proportionally to customer potential.  

15. Never leave a meeting without knowing the next step. Say: “What are the next steps before you can make a decision?”

16. Lead the customer. Help them organize at every step. Help them in ways that don’t scale.

17. Shrink your sales cycle every chance you get. If a prospect asks you to call them next week, call them on a Monday, not Friday.  If a prospect asks you to touch base next month, reach out in week 3 not week 4. 

18. In general, time kills all deals.

19. Listen more than you speak.

20. Track and be curious about every objection. These are learning moments for you. Do not be defensive.

21. When your customer is talking to you, they’re not talking to your competitor. 

22. Don’t be afraid to test out pricing. You can always change it later and grandfather your existing customers in on the old plan for some generous duration.

23. When presenting pricing: present the facts, stop talking, listen and watch body language from your prospects. There is no need to justify how much you charge.

24. Ask for their business: “What do you need to sign today?”

25. Go towards where it hurts, ask the questions you’re scared to hear the answers to. 

26. Keep a healthy paranoia. Deals are not done until money is in your bank account. 

27. Review and document every win. There should be patterns including the number of and type of correspondences, what resonated, and the people involved. These patterns should become the foundation of your sales process and playbook.

Our new startup, TigerEye, is remote-first. Ten years ago while at PlanGrid, I wouldn't have believed it was possible to run a company remotely, but a worldwide lockdown showed me that a better quality of work and life can be achieved. With good communication architecture and well-defined rules of engagement, decisions can be made quickly on Zoom or a phone call [1]. There are trade-offs to remote work, but to us, the benefits outweigh the negatives.

The biggest fear of remote work is that employees won't actually work — a very real possibility. According to a recent Microsoft survey, some 85% of leaders say the shift to hybrid work means they can't tell if their workers are actually doing any work. But there are ways to derisk this. I believe that remote work is available to startups in a way that is not an option for larger companies, making it a competitive advantage in recruiting and retaining the best talent.

Startups have fewer people and can move together as a unit more effortlessly. Bigger companies can be burdened by layers of mediocre middle management, making the entire org ineffective. Mandating that employees work from the office may give leadership a feeling of control, but whether having employees actually sitting in the office increases productivity or improves company culture is something that only team members can know. In my experience, the best managers know exactly what their team is working on and how much they’re producing regardless of where they sit.

Millions of women left the workforce during the pandemic to take care of their families, and many have not yet returned due to the lack of social infrastructure for childcare or eldercare in our country. To attract talented women back into the workforce we must remove the old-school belief that good work can only be done in an expensive office. As a mother of three, I wouldn't be able to achieve what I do if I had to sit in traffic and be in an office all day.

This holds true for many of my highly skilled colleagues who also have childcare and/or eldercare responsibilities. They work from home, excel in their roles, pay taxes and can handle any life challenges that come their way. And the data backs this too — McKinsey surveyed 13,000 office workers in six countries and found that those who have confidence in their working abilities, children, and a mortgage to pay, no longer want to commute to sit at a desk and do essentially the same job. 

1. Everyone on the team is excellent at communication – It is really easy to miscommunicate when working remotely, so we look for teammates who have the ability to write and speak directly and answer questions simply. Everyone writes like they talk. We’ve all agreed to move long Slack threads to a more productive phone call.  

2. Company information is documented simply and easy to find – An important variable to effectiveness is ensuring that the whole team can find information they need quickly. Since we can’t walk over to a colleague’s desk and get answers, we make sure our Google Drive and Gitlab is organized and well-documented. It does take a Google Drive and Gitlab cop, and we put our most detail oriented and vocal person on this (CTO, founder).

3. We share core working hours and embrace time flexibility – With our global team, we have six overlapping core working hours, so we know exactly when we are available to each other everyday. Beyond those hours, we embrace time flexibility, so employees can devote their most energetic hours to their most intellectually demanding tasks and also to take care of personal matters (without taking PTO or sick days). 

4. We meet in-person and work remotely together – There is no substitute for in-person connection, so we do it at least once per month. While saving on office costs [2], we invest in travel so we can look each other in the eyes. Once a month our Dev team gets together in-person. There are also regional in-person workdays (e.g., Bay Area folks get together once a month). Every two months, our Go-to-Market team regroups in-person. We also offer WeWork passes for anyone who needs to get out of the home environment. When in-person, we make sure to eat together, because something magical happens when we break bread as a team.

5. Recurring meetings with purpose – One of our commitments to each other is speaking openly about the hard things. We can be honest, disagree, and be respectful at the same time, and we carry this commitment into all our meetings. Our weekly recurring meetings include All Hands (alignment, lessons learned, open questions and discussions), Whiteboarding (for team problem-solving), Customer Updates (covering all aspects related to prospects and customers), and Show and Tell (providing progress updates).

6. Culture of wholeheartedness (copied directly from our core values) – Life is hard even for the most fortunate of us. Building a company while living life will be challenging. The best we can do is to be wholehearted in everything we do. Be wholehearted in our personal lives. Be wholehearted when we are working. When we split our hearts into multiple pieces in multiple directions, we will get overwhelmed and be mediocre at everything.

[1] Remote work may not be feasible for professions in industries like construction or manufacturing, as their roles often have hands-on responsibilities.

[2] PlanGrid’s 2011-2019 all-in office cost revolved around 10% of total opex spend. All-in cost includes rent, utilities, insurance, tax, food, security, vending, cleaning, facilities team and more.

I often receive inquiries from female founders and execs on how to announce their pregnancy to investors and/or board directors. It appears that very little is written about how to talk about one of the biggest moments in many people’s lives. So I’ve created this FAQ in case it’s helpful to a parent.

I am fundraising right now, should I tell potential investors that I am pregnant?

I fundraised while I was eight months pregnant. This was during the COVID-19 pandemic, so most conversations were happening via phone calls and Zoom. After I got the offer, and before I signed the term sheet, I disclosed that we would be taking maternity leave in a month. The offer did not evaporate and our investor told us to take the time we needed. In general, I would not do business with someone who isn’t going to support me as a mother and human.

When did you tell your board about your pregnancy?

I was nervous to tell my board that I was pregnant. I didn’t know how they would take the news, because I am also married to my cofounder — which meant that two founder/execs/board directors would be on parental leave at the same time. 

At 21 weeks, after the second-trimester ultrasound and prenatal tests confirmed my pregnancy was viable, I told my board I was pregnant. It was also around the same time my baby belly started to show.

How did you tell your board?

I made the announcement in person at the beginning of a board meeting. Instead of calling each one individually, I found it easier to make the announcement all at once. When I told my board, they had huge smiles and looked genuinely happy for us. In hindsight, if their reaction was anything less, it would have been a red flag. But luckily we had no jerks on our board.

What did you prepare when you told your board?

The only thing I prepared was who would serve as interim CEO. I had selected my CFO to serve as our interim CEO during my upcoming leave. It is possible that your board might have a difference in opinion on who should lead as interim CEO, but it’s important for the CEO to lead the board on this decision.

What was the maternity leave arrangement you agreed to with your board?

I told the board I would take four weeks off even though our startup had a three-month parental-leave policy. I ended up needing more time to heal and went back to work at six weeks postpartum. 

For our internal team, I announced my pregnancy and parental leave schedule and shared that our CFO would be in charge. I joked that they shouldn’t burn the place down while I am away.  I also had a written maternity leave plan on Google Docs, which everyone had access to, that itemized the goals I expected each leader to see through while I was gone. Each department leader and I created these goals together to ensure we were aligned across the business.

What would you do differently?

I could have also been more creative about my ramp back into work. At my friend’s company, they had a phased-return policy that asked new mothers and fathers to come back to work one day the first week, two days the second week, three days the third week and so on until they were back to a full five-day work week. During the first three weeks back, they were not to lead any projects or try to cram a full week's work into a shorter work week.

I get asked for fundraising advice often. Here’s a cleaned up version of my answer:

1. Understand that VCs have their own investors, and their top priority is delivering a substantial return on investment to their LPs.
2. Early stage investors evaluate thousands of startups, listening to hundreds of pitches each year, but only invest in a fraction of them.
3. Investors are skilled negotiators, so avoid playing games with them.
4. The best investors can discern your intentions with remarkable accuracy, a valuable skill in their line of work. Avoid posturing or lying to yourself about your startup’s purpose and impact.
5. When you hear a “no”, move on. 
6. When you hear a “yes”, know that the deal is not done until money is in your bank account.  
7. In general, time kills all deals. So timebox fundraising and stick to it emotionally and practically. Return to building and talking to users even if you haven't secured a term sheet after the predetermined period.
8. Fundraising is just a financing event; don't become infatuated with it or let it lead you into a state of depression.
9. Fundraising is not an indication of success or failure, it is an indication that you now own less of your company.  
10. If you’re not in 100% fundraising mode, don’t talk to VCs (unless they're good friends or family).

This article previously ran in TechCrunch+

I previously served as the CEO board director at PlanGrid, and as an independent board director for two startups. I believed in the leadership and products at those companies, but I resigned from both startup boards because I couldn’t bear sitting through another company’s board meeting. I wrote an article in TechCrunch+ to offer advice on how to run an effective board meeting.

Time is a fixed resource. As a board director, it's crucial to be helpful to the leadership team with the limited time we have. Otherwise, attending board meetings becomes pointless. Concise materials can make board meetings more effective and leave room for useful conversations.

After Initialized and Next47 co-led TigerEye’s Series A, and a formal board of directors was put in place, this is what my cofounder and I wrote to them:

Dear Board,

From the start at TigerEye, we promised ourselves we would use our experience to our advantage by making better decisions across all vectors everyday. “What did we do that we never want to do again?” One thing we’d like to never do is the three-hour, too-in-the-weeds, non-strategic board meeting. Here is a memo we wrote instead of preparing a board deck. We hope this memo gives you the punchline on the business and how we’re thinking about the future, allowing the majority of our time together for meaningful conversations.

With gratitude,

Tracy & Ralph

We discuss what we accomplished in the last three months as a team and what we’re doing in the next three. Then it's an open discussion where we push ourselves to have the hard discussions on worst-case scenarios and how to de-risk against them. These conversations typically revolve around the competitive market landscape, our direction as a company, current economic conditions and a realistic check-in on how much money we’re burning and our ability to execute. 

• Eliminate 80-plus-page board decks: Every board deck I’ve made and seen is more than 80 pages long. I am not exaggerating. The challenge with this much content is there is a finite amount of minutes of attention we get from the board, and only so much information can be absorbed in one sitting. If there is truly that much material and information that needs to be communicated, consider sending out regular email updates, or having one-on-ones with the board, to keep them updated outside of the board meeting. The goal of the board materials is to quickly get your board up to speed on your assessment of the business, shine a light on the problems and get their help strategically.  
  

• Show where the business hurts the most: It is important to celebrate the hard work of the team. But I’ve seen many board decks that over-index on wins and don’t focus enough on the losses. In my experience, everytime I ignored where it hurt in the business, it cost me triple the amount of time, because problems tend to compound — and do not go away on their own.   
  

• Never bury bad news: I once experienced a situation where, with fifteen minutes remaining in a board meeting, the founders told us something that would completely change the business and put it at risk. We needed at least an hour to talk through our options, but everyone was out of time and steam at that point.
  

• Eliminate the showboat: As a CEO who wanted to give each department head autonomy, I would structure the board decks with open spaces for each executive to provide updates. The challenge with that approach is that we ended up with an incohesive, showboaty board deck where each department leader used their allotted slides to brag about their teams’ wins and defend their roles. Instead, bring your board on your journey of wins. If a big deal closes, text your board or email them as it happens. Have a good cadence of communications with the board so they feel included. This will also help to cut down on the victory lap sections in the board materials.
  

• Use existing artifacts: At my last company, it would take a few weeks to generate new graphs and artifacts for the board decks, and I’d later present them in All Hands. I now realize this was wrong. If we do our jobs as leaders, the whole company already knows how we think of our business and understands near- and long-term goals and how we are working hard at pushing the company forward together. A good way to capture and communicate the direction of the company is to have the team create artifacts that highlight the business, so they’re brought along early — and present those materials to the board.
  

• Allow for closed-door sessions: A valuable lesson I learned from being on a board is the importance of closed-door sessions. The CEO held a beginning closed-door session to go over legal matters without their executive team. Then, there were two closed sessions at the end, one with the CEO and board and one with only the independent and investor directors. This gave the board space to debrief, discuss how to be most helpful, and create an action plan. One of the directors would then follow up with the CEO. Closed-door sessions allow for open and honest communication and can lead to more effective decision-making. 

The responsibilities of a board at a startup can vary depending on the size and stage of the company, but generally, the board is responsible for overseeing the company's management and ensuring the company is run in the best interests of its stakeholders (shareholders, employees, customers and the wider community). Keep board decks short so all parties can focus conversations on the long-term sustainability and success of your company, which includes managing finances effectively.  By doing so, the board can contribute significantly to the growth and success of the startup.

I had the privilege of leading PlanGrid to $100M in ARR before I stepped down as CEO and passed the baton to Autodesk Construction. I’ve had years to dissect the mistakes I have made in my first startup, and I’ve now taken my lessons learned to TigerEye.

Our failure points: 

As first-time founders we were too creative about organizational structure. We had a flat management hierarchy in the early years, and we bragged that we ran our startup like Star Trek — you were either in engineering or operations, and everyone reported to a founder. This was cute, until it quickly stopped working. People care about titles and career paths, and if you want to retain great people, you have to care about these things too. 

Takeaways: Be creative on how you’re solving problems for your customer — don’t be creative about org structures. Hire a great HR leader as a business partner to help recruit and retain the right team, and architect a good communication flow. And remember that A players can recruit other A players, but B players usually end up recruiting C players.

Our trickiest inflection point was hitting Dunbar’s number — at 150 people, everything went to chaos. Hierarchy is a factor. At 10, 20, or 30 people, everyone can report into a founder — at 150, just based on basic management ratios, there's now three to four degrees from the frontline team member to the founders.  

Another heartbreaking side effect with growth is that the people who helped get the company to its current success may not be the right people to grow it the next five years. 

#3: An executive not working out

My biggest mistake was hiring a big-public-company tech executive with a fancy resume who had never worked at a startup. And although everything in my gut told me that they were the wrong fit, I felt so underwater with work that I convinced myself that my life would suck less if they were just in the building. 

As we grew to nearly 500 people, we would have several versions of the executive bench. The best indicator of an executive’s success is that they have already done the thing you want them to do at exactly the same stage that you are in and want to grow to. With that said, I do believe a first-time executive with raw talent and a growth mindset can be successful. In my case, at my first startup, it felt risky to be learning on the job as a CEO and be surrounded by other leaders who were learning on the job as well. Luckily it worked out for us. 

Here is a brief list of red flags on an executive who isn’t working out:

1. They frequently use the wrong pronoun “I” followed by “[contribution to the company]”.
2. You dread having 1-1s with them.
3. They blame you or their peers.
4. They complain laterally and downwards.

#4: Losing product market fit

Construction people used our software because they loved us.  If construction folks were using our competitors' software it was because they were told to. In enterprise software, the best product doesn’t necessarily win, and there is a long trail of great enterprise software under tombstones.

Selling to the enterprise requires a series of features and products that have nothing to do with making the end-user happy. There is security red tape that the non-user buyer cares about: RBAC, SOC2 Type 2, ISO270002, Admin Consoles, SSO and more.

Prior to PlanGrid’s acquisition, in my last years of leading the company, our growth slowed to high double percentage year-over-year growth while our competitor’s growth was rumored to be triple digits. We needed additional growth levers. We pushed towards internationalizing our product. We launched two new product lines with small scrum teams and slim budgets. Concurrently, we were knee-deep in technical debt and our Vice President of Engineering quit with no notice. These were rough years. But through hard work and great people who continued to pour their heart and soul into the company and customers, we hit almost all our milestones and secured the attention of Autodesk, our future acquirer. 

#5: Life happens

I’ve come to believe that a big part of our jobs as founders is to manage our own emotions. It doesn’t matter how well we were doing; it never got easier. Life doesn’t stop just because we’re doing the hardest thing we’ve ever done before.

I remember how excited we were to get accepted into YC’s Winter 2012 batch. As we were launching our product into the world, living the entrepreneurial dream and sleeping and working out of our Silicon Valley hacker house, we were also experiencing the cruelness of life. In between demos and code commits, we greeted hospice care at our doorsteps. We watched our cofounder battle, and ultimately succumb, to cancer at age 29.

Takeaways: Life is short and hard even for the most fortunate of us. And that’s why, whatever you have chosen to work on, it has to be worthy of your time here. Because if you have any success at all, it will take up at least a decade of your life. And if you’re really lucky, you get to work on it for multiple decades. 

In 2014, I drove through Sand Hill Road pitching a profitable construction software startup with five million dollars in ARR and zero sales people. We received three generous term sheets within forty-eight hours and closed a Series A a half-day later. This post summarizes how we led sales as founders in the early stages of PlanGrid and shares tips that can be applied in this tough economic climate.

It is important to note that we built an easy-to-use product that solved a significant pain point. If you've already established and validated product-market fit, these tips will help you get closer to your customers and sell more effectively to them. But if you're not there yet, keep in mind that the advice I'm offering won't help you – without some semblance of product-market fit, not even the best sales leader in the world will be able to grow your company [1].

Here are five things we got right in sales:

#1: Understand how money flows.

We understood how money flowed through the companies and construction projects we were selling to.  We knew that although corporate headquarters technically had a budget for IT and software, it was already maxed out to pay for legacy solutions. Construction projects have their own independent accounting silos, so we could skip the buyers at the corporate office completely [2]. We were domain experts and had been responsible for construction budgets at our previous jobs. We knew exactly which line items we could tap into. For example, ten percent of many construction budgets was slated to “random allowances” and another ten percent to “contingencies.” We targeted our end users at the individual level, folks who have never purchased software in their lives but had jobsite buying power. Our end users regularly put $500+ charges on their credit cards for construction tools and materials to get the job done. No one would blink an eye at a $50 monthly charge for our software solution. When thinking about your customers, invest time in understanding who owns what budget and who has the power to approve purchases.

#2: Write the ten-second “wow” demo script.  

I’m borrowing from Apple here. PlanGrid was once a top-ten business app on iOS, and our software was preloaded on every demo iPad in Apple stores. We worked with Apple’s experts, who guided us in creating ten-second “wow” demo scripts to train their in-store sales reps on how to demo our software when a construction contractor, engineer or architect visited their stores. The most important thing we learned during this process was that there is a short window of time to secure someone’s attention. Don’t waste it. Everything you say and show during these few seconds needs to be high-value for your prospects or you will lose them. These ten-second scripts would become the foundation of our sales rep training program.

When we finally earned enough money to afford renting booths at conferences, we got creative in order to secure attention. One example was Greenbuild in 2013. We commissioned a fashion student to make a dress and a suit out of blueprints, and our colleagues volunteered to wear it [4]. They walked the conference and looked like they were part of the event. People would stop and ask to take pictures with them, and in turn they would use these opportunities to demo our product.  

#4: Get prospects into the right swim lanes.  

Time is the only resource we will never get more of, so we cannot let anyone — especially not a random prospect — waste our time. The average contract value of PlanGrid in the early years was $5,000. We had a highly transactional, small-deal-size business in 2014. To protect time, it was crucial for us to identify which customers were at best $500 in ARR and which ones could grow to $100,000 in ARR. If it was a $200 deal, the prospect would get an email with a link to a demo, and maybe a ten-minute phone call at the end of month to nudge them to buy. If it was a 6-figure potential deal, three co-founders would show up at their front door. We would personally train them on new features that they suggested, listen to their feedback and offer white-glove-service bug fixes on the spot. Prioritize defining the different swim lanes for prospects, and identify the right teammates that need to talk to them and when. It’s also important that swim lanes evolve as your company grows, but don’t change so rapidly that you’re constantly developing new messaging and targets. Signals and data points obtained over time will tell you what’s working and what’s not. 

This one is simple. After you’ve shown prospects what you have to offer, ask them directly what needs to happen for them to make a decision. More likely than not, you are their lowest priority, so make the process easy for them. Lead the customer after a meeting and tell them what next steps are. Schedule the meetings for them. Write sample emails they can forward to their colleagues. If they tell you they have all the information they need to make a decision, ask if they will buy today. What is the worst that will happen? 

I’ll be writing more tips about the journey from $5 million to $100 million and $100 million to acquisition in the upcoming months. 

#entrepreneur #founder #startups #sales #selling #customers #b2b 

[1] The foundation of founder-led sales is to make sure you have a great product that solves a real pain point.  I’ve coached and advised hundreds of startups during my time as a visiting partner at YCombinator.  When founders lie to themselves it’s almost always over having product-market fit when they do not. Their product simply did not solve a big enough problem for people to care about. So a key question to ask yourself is: Does the problem you’ve chosen to solve hurt your user so badly that they’ll pay money to make it go away? Does that problem make their job suck so much that they’ll be a champion for you and convince their boss and colleagues to pay for it?

[3] There are a bunch of add-ons from renting booths at conferences. You can get the smallest bare-bones booth for $5k, then rent the carpet for the booth for another $1k, and rent an electrical outlet for another $1k — and a table and tablecloth might cost another $1k. 

I started a new company called TigerEye. We’re building a sales solution that will help companies make better strategic decisions. It all sounds vague because we’re in stealth.

I want to share why I am building a new company.

After I ended my watch at PlanGrid and Autodesk in 2020, I got to work at Y Combinator for two batches. Founders would ask me questions about a problem they were experiencing, and I would answer them by sharing PlanGrid stories, expanding on the things we did right, things we got wrong and things I would do differently if given a second chance. 

Everyday I spoke to smart and hungry founders and learned about industries I never even considered. I was energized by the small population of female founders disrupting consumer and health tech, but female founders building enterprise technology were scarce.

During this time, millions of women would exit the workforce to care for their families as the COVID-19 pandemic forced schools and day cares to close, driving an increase in gender disparities in the U.S. workforce. I thought about the father chasing his career while the mother was left chasing dirty diapers. I thought about the families who need to juggle jobs while caring for vulnerable or senior family members. I grieved over how a virus exacerbated our non-existent support structure for women in the workforce. I thought about how mentally and physically challenging child care and elder care is and how rarely it is openly discussed. All of it made me livid.

I took that anger and focused on building again.

Normalize women in (enterprise) CEO roles.

I’ll buy you a beer if you can name from memory female CEOs in tech on all your fingers. The people who have defied the odds and paved the way for women in enterprise today include leaders such as Carol Bartz, Ginni Rometty, Meg Whitman, Shellye Archambeau, Therese Tucker and Ursula Burns. There are a few B2B female CEOs today doing incredible work and inspiring us to build, but females in top executive positions still remain few and far between. The first step to change is acknowledgement, so let us acknowledge that in 2021 female founders secured only 2% of venture capital in the U.S.  

Businesses need to run better.

We’re in the middle of multiple irreversible world crises. All businesses need to figure out how to build better and faster, with fewer resources and more compassion towards people and our planet.

The most surprising lesson I learned from building PlanGrid was that the best product doesn’t necessarily win in enterprise, but those with the largest sales team will. Even with a meaningful outcome, we lost in the market. A big reason why we’re building TigerEye is to build sales software to help companies with the best products win.  

Every day, I get to work with — and learn from — colleagues and customers from all walks of life, from Boomers to Gen Z. I refuse to believe that the TikTok generation and future leaders will still be deploying legacy solutions two decades from now. There is simply no way they’ll stand for it.