Not sure how to kick this off, but I saw a post on LinkedIn that I think everyone on Bravado should see and really understand (see screenshot). It's all about how leadership makes THEIR number, and how it affects you as a rep. I'll put in some learnings as well, because understanding how this applies to us AEs is really the point of this whole post. There will be a lot of over-simplifying, but these are illustrative to help you get the idea.
- This is how quotas are made. If you're wondering how quotas are made, here it is. Let's say you're at a series A company. You're the CEO and you ask your VCs how to hire your first sales people and how to guess their numbers, quotas, etc. The VC sends you this (or something like it). That's how. You, as CEO, plug-in a number that you/they want to reach and work the spreadsheet backwards. For AEs, it's important to understand that this is made up based on some guesses or guidelines given by the VCs (we want you to hit X in revenue your first year, etc.). Just because the number is there, doesn't mean it's realistic and that can/will hit it.
- Revenue, it's an educated guess. As companies get later in their lifecycle (Series F, IPO, Public), they'll have much more data to back up why the revenue number should be X. But if you're earlier in the lifecycle (Series A-D), it's a fucking guess. Sure, the VCs can provide numbers based on other companies, but none of the factors are the same as the example company and you can't expect the same results. That's why these are risky, you're charting the unknown to some degree. If you're at the early stages companies, don't get too hung up on the number, it's a guess. Is it an educated one? Maybe, maybe not, but the company doesn't have enough first-hand data to know how good their guess is.
- Who is in the hot seat/when you should stay: If you understand this spreadsheet, you can understand who in the org is on the hot seat/going to get fired. There are SO MANY changes that can occur when a leader goes. Let's say you work for someone you hate and you want to know if you should stick it out: Is your team meeting their number? Are the other teams meeting their numbers? Are you the lowest ranked team in the nation, region, company? If you're team is low in the rankings, you should know that the leadership is looking at your manager and potential options (like firing, etc.). So should you stick it out? Up to you, but just know your manager is fucking up the CROs spreadsheet and they may be gone sooner rather than later.
- Who is in the hot seat/when you should leave: let's say you work for a great manager/leader but the sales aren't coming in as they should be. Look at this spreadsheet, and think about what the board might think. They like this person as a leader, but are they really going to stick with them if they can't get over 50% their quota? Probably not, so as an AE, you should know when your leader is in trouble, and when to start preparing your resume. Once that leader gets kicked out, there will likely be drastic changes and you could be caught up in those (including getting fired too). It's up to you whether you want to get out before that happens or stick it out and see.
- This is a team sport, at the end of the day. I know we're called "individual contributors," but the truth is that how your manager and VP are performing definitely reflects on you individually and your journey at a company. Their performance is in the number they put up on the spreadsheet. If they don't perform it means their leadership looks at them and wonders why. There could be a million reasons good or bad, discerning is an art and not everyone has vision. But the fate of your leader has a huge impact on your fate, because if they let your leader go, then odds are they're already looking at your individual performances (on the team) with a microscope to see if you should be going too. So, it's a team sport. Make sure you really want your fate tied to the team you're with. As an aside, this is why people tend to follow good managers.
- It's easy to blame your reps. When leadership sits down to look at these spreadsheets and a manager's under-performance, who do you think the manger is going to blame, the team or themselves? If they blame themselves, you've got a good manager who is worthy of your respect. But it's usually easier to blame the person not in the room, you the AE, or the whole team. If you've ever wondered why managers do this, it's because when you're sitting around a spreadsheet, the leadership above them makes it so damn easy. It's much easier to accept that then to accept "bad product market fit."
- One of the things I've noticed in software sales over the last 7-ish years is that everyone always talks like they've hit their number every year since the beginning of time. It's a huge lie. Everyone can't hit all the time, which is why these spreadsheet are industry standard, they represent the wisdom of what actually happens and not what we all want to happen. Don't let the big talk get to you.
- Leadership knows not everyone is going to hit their number. It's baked into their spreadsheet, for god sakes. Let that tell you a few things: in reality, you're not supposed to hit quota every year. If your leadership says otherwise, just remember they're not forecasting you to hit. So what they're say and what they're committing on paper are different.
Hope this helps some of you. Feel free to post an additional advice/insights based on this.
Orignal LinkedIn post: https://www.linkedin.com/feed/update/urn:li:activity:7102989846557704193/
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