Having been a part of building Growth teams for the last 7 years across two different startups, I’ve learned a good deal about how and when to invest in sales and marketing, from things that have worked and things that have not.
At BloomReach, there were about 50 people when I joined and about 350 when I left. We grew from the low teens to much higher double-digit millions of ARR. The company raised nearly $100M and we learned a lot about growth tactics that worked for us—every bet certainly wasn’t a success. At Atrium, we’ve gone from 40 people to about 200 in the last year and a half and raised $75M.
This post focuses on the lessons I’ve learned here at Atrium from things that we’ve done well and things that we could have done better at these stages. Altogether, this sums up how I generally think about investing in sales and marketing in the B2B space, at Seed and Series A.
Seed: When product & brand are your limitations
Atrium has hundreds of startup clients, many of which are at the seed stage. I’ve spent a lot of time talking with these companies and I’ve observed that, regardless of how clever a solution is, how “right” the founders are for the job, or how much early momentum a company has gained, most seed stage products are not at the same level of sophistication as their incumbent counterparts. But often founders see only the vision of what their product can be, not what it is today.
That doesn’t mean your product won’t blow competitors out of the water at some point, but, at this stage, it’s just typically not there yet. And I think it’s important to accept this in order to be smart about the way you convince people to use your product while it’s still being refined.
Seed stage customers are like investors
If you’re in the process of building an early product to revolutionize sales forecasting, you are not as good as Clari, you are not as good as Aviso, and you are not as good as what’s built into Salesforce—but you probably understand the remaining problems with all of those products.
So at the seed stage, teams should understand that they’re not going to convince people that they’re the best product on the block through marketing and sales efforts. At this point, you should be looking for customers who would be interested in partnering with you, to take a bet on you, the way that investors have so far. Investors understand that you won’t make them money now, but if all goes well, you’ll provide them with some great ROI. Use this same appeal to get early customers. Show them that your product’s incompleteness is to their benefit because it can be molded to their needs. If they take a chance now and partner with you to refine your features, later on they’ll be able to leverage a polished product that was built to their exact specifications and you will be much more nimble than the incumbents.
Treat your customers like partners
Approach seed-stage sales like you would approach a partnership. The ones who buy will have any number of reasons to believe this partnership is mutually beneficial but, really, they’re taking a bet on you so treat them as you would a valued partner.
Also, at the seed stage, give your product away for all I care. And again, my focus is B2B, so this is a bit different if you’re building a consumer product. But the fact is that it will probably take you 6 to 12 months to get real, significant feedback about how people are using your product; and this is how you’ll ultimately figure out if what you’re building is something that actually makes sense for your customers.
Be careful: If you listen and react blindly to every piece of customer feedback you get, you’ll end up wasting time building things that don’t make sense for the growth of your business. You have to listen to your early customers in order to find product/market fit—but you also need to discern how to sift through the noise to separate the features that sound great from the ones that will make a great business.
Only spend cash on Growth if you have to
At the seed stage, don’t spend money on sales and marketing if you don’t have to—there’s always a free version of the campaigns you want to run or tool you need. This is the time to be scrappy. Define what’s unique about your business and your team and use that to acquire customers.
At Atrium, what was unique about our team was that our founders had extensive experience and networks in startups and venture capital. Our team leveraged those networks to validate the initial opportunity in the market (being that founders were our target market) and also to get our first customers. We did founder-led sales really well. During this time, our CEO focused a lot of his energy on helping us find our first 20 clients.
If you do hire, generalists with startup DNA are key
Only spending cash on growth if you have to also applies to hiring. It can be tempting to hire people with tons of talent from really big companies into your seed stage startup—but what you really need are generalists who are willing to just bang down doors and get things done any way possible.
One of the best hires our team made at this stage (before I joined) was hiring this one super-smart generalist marketer. She was 23 years old and already had experience from Google and IBM but she wanted to try startups. She had deferred Harvard Business School to come to our company. And she didn’t have fear about anything. She would ask for partnerships with people that we had no business doing partnerships with. She would ask for a venue space for free for our events because we were a cool startup. This was the person that I was really glad to have at that time.
Series A: When GTM, messaging, & process are your limitations
By this point, your startup has started to gain some traction. Your customers have been treated like the valued partners that they are, thus far, and so they give good product references to investors. Maybe that doesn’t matter as much at Series C or D growth rounds but it certainly matters in Series A.
What companies need to figure out now is what channels they should test to actually bring this thing to market. To do this, they’ll need to begin the transition from the generalist mindset and hire some more specialized roles to implement whichever go-to-market strategies are being proposed.
Messaging is resonating, now test new channels
Earlier in the post, I recommended startups define what’s unique about their business and their team and use that to acquire early customers. At Atrium, what was and still is unique is that our leaders have entrepreneurial experience and rich networks within the startup community. In addition to tapping into those networks to validate the business and land our first clients, our team also leveraged these networks to establish a community of founders for the purpose of accelerating each other’s growth via high-caliber thought sharing. After seeing positive results from our blog posts and fundraising bootcamps, we’ve since expanded into new channels including downloadable guides and templates, webinars, a wider range of events, and the beginnings of a podcast.
The unique skill set that helped Atrium get its first set of clients is still the core thesis of how we drive all of our demand gen programs today.
Think about key roles & hires
The message you’ve put out into the market is resonating and you’re ready to test new channels, now you need to ensure you have the right people to do this. On the spectrum between generalists and specialists, you’ll want these hires to be somewhere in the middle—having the right ratio of depth and breadth of experience to run multiple programs on their own until the rest of the team is built out.
At this point at Atrium, we hired two senior marketing pros with 15+ years of experience each—one more on the product marketing side and the other more on the marcomms, PR, brand-building side. Each came into their roles with tested playbooks that could be applied to our go-to-market strategy at Atrium and, fast forward a year later, are leading the marketing team with about eight specialists on it now.
Around the same time, our first two sales hires were brought on. The first was a classic “I want to eventually build my own startup” profile with about 10 years of selling experience. The other was a pretty unique situation—they had graduated early from college and spent about six months as a top-performing SDR. Both profiles worked out really well and both moved on to be managers on our fast-growing sales team.
Looking ahead to the next growth stage, Series B companies can’t have key contributors learning on the job. To maintain the pace of growth that will be necessary at this stage, you need folks who’ve been there and done that before—folks who have already seen the movie and know how it’ll play out.
To that point, hire VP’s sooner than later. I recommend investing in VP’s of Marketing and Sales around the time you’re raising your Series B. You want to have senior people who are dedicated to ensuring that sophisticated process and procedures are in place while your teams are scaling, and not after.
Define your product distribution and sales cycle
At this stage, companies will want to establish a solid understanding of how their product is best distributed. When you get the distribution figured out, you’ll be able to observe what the typical sales cycle for your specific product looks like and build a repeatable sales process around it.
With Atrium’s product being legal services, there were questions at the beginning around who should be doing the selling: The legal partners? Sales professionals? Could non-legal folks really sell legal services? What would the role of the sales engineer possibly look like? So for us it wasn’t just testing and iterating on channels and it was testing and iterating on the overall distribution.
The key here is to get this figured out before going out and hiring twenty sales reps—trying to scale before you’re ready is probably more common than moving too slow in Silicon Valley these days.
At a hyper-growth company, the job is to maximize the yield of your fundraising dollars by playing to your strengths at each stage and being realistic about your limitations. Getting your first customers through founder-led sales—before hiring any salespeople—will help you refine your value proposition and make important product iterations earlier. Iterating on your business model to understand what a qualified customer should actually look like for your company—before hiring your first qualifying reps—will help you avoid issues like churn and poor user experience. While the growth of every startup may be slightly unique, there is a general order of operations that can be followed to find out if you’re building a house of cards with VC money, or if the thing you’re building actually works.