By Craig J. Lewis
They say that revenue is king.
I would say similarly that the sales pipeline is queen as they both go hand-in-hand. Sales revenue is the lifeline of B2B tech startups. Unlike with many B2C tech startups, the only metric that counts is paying customers.
So, how does one get those paying customers?
It starts with a big pipeline.
It’s impossible to know which deals will result in a win, in advance, until you get closer to the buyer’s purchase decision. If you only focus on a number of perceived “guaranteed deals”, too early in the process, you risk not having enough of those by the end to reach your ARR goal.
Simply put, you need to front-load your pipeline if you have any hope of winning enough business. And that number needs to be big.
How did Kairos do it?
Going from $0 to $100 million in your sales pipeline takes a well-designed MVP, a compelling brand story and marketing that’s focused on a Minimal Viable Segment (MVS).
- Brian Brackeen launched Kairos from NewMe Accelerator in 2012 and started growing the pipeline in Silicon Valley through word-of-mouth.
- Via alpha testers we started refining the product, messaging and market position.
- From the beginning we've had an obsessive relationship with user experience and paid incredible attention to customer feedback and kept the pipeline growing.
- Brian had some great contacts from his days at ADP, and as one of the world’s top Kronos consultants. Incorporating my own relationships in the startup payroll and payment space, as well as firms like ADP, we were able to leverage that to get us in the door with some potential clients, brand ambassadors and beta testers.
- Again this generated real world feedback and got mid-market firms talking about our product to others.
- 50% of our pipeline growth came from existing users sharing their beta experience with others. We hit $10MM in the pipeline.
- Brian was pitching and pitching and pitching. I was talking to potential customers, and in combination with investor and user feedback, the Kairos story became even more clear.
- We stayed focused on design; coding was about design, marketing was about design, and internal docs were about design. We were design first and the market was drawn to that.
- We analyzed the users and potential customers we were attracting and figured out our Minimal Viable Segment and focused on it hard.
- We were then voted one of WSJ Top 2013 Startups. The exposure pushed us to a $30MM inbound pipeline.
- Right around this time we raised a $1.2MM Series A and hired our growth team in Dallas; 2 sales professionals and a sales engineer. That moved the needle to $40MM and allowed us to start collecting signals from prospects, as well as users.
- With a clear vision of what problem we could solve best, and who we could help the most, we spent a few thousand dollars on an industry specific tradeshow and generated an additional $60MM. Bringing our total pipeline for our growth team to work to $100MM.
Focused strategy, a market to aim at, and a niche solution defines your Minimal Viable Segment. ARR is important, but you have to have business to win. More chicken, more egg.
You need to prime that pump with enough leads to generate 10X the numbers you want to hit. As a startup it’s easy to focus on building your MVP and not think you have the bandwidth to handle even a couple of leads, you still need to be creating an atmosphere where people want to buy and building out that pipeline.
Craig J. Lewis is chief strategy officer of Kairos.