Across technology, manufacturing, financial services, and an array of other fields, quota attainment rates are in a multiyear slide. Why this is happening and what some sales leaders are doing to address it.
Fintech is not SaaS, which is a crucial distinction given the number of leaders who employ a standard software commission template, launch it company wide, and spend the next year tending to churned enterprise contracts, compliance violations, and a sales team optimized for bookings that never convert to healthy revenue.
For most of the twentieth century, space was a government monopoly. Economics were essentially irrelevant because the customer was the public sector. Commerce, if it existed at all, was little more than a footnote. That is rapidly being replaced by a construct organized around services, subscriptions, and recurring revenue.
Until very recently, a Sales Development Representative’s day followed a general format that entailed opening a spreadsheet of leads, dialing numbers, dropping voicemails, and filling out the forms in the CRM being used. Today, that process is being automated in seemingly rapid fashion based on recent studies and the number of calls I receive that are becoming harder to tag as AI.
The quest for top talent has never been based on salary alone. Today’s most sought after candidates enter conversations with a checklist that goes far deeper than compensation, and companies that fail to take it into consideration risk losing individuals who may be superb contributors.
For most of the last two decades, the primary logic in enterprise software was one of horizontal scale which entailed building a platform sufficiently broad, acquiring enough customers to properly fuel it, and allowing the subsequent network effects to sustain growth.
For half a century, selling to space essentially meant winning a government contract. The procurement cycle was long, the paperwork was immense, and the buyer pool was minimal. If you weren’t in the Lockheed, Boeing, or Northrop ecosystem, you largely were playing from behind from the onset. The recent appearance of the current launch revolution has changed that considerably, particularly in the low orbit sphere.
There is a moment when every founder recognizes that it’s most likely time to hire someone to direct sales efforts. Revenue is growing and the pipeline is filling while trying to build the product and operate the organization that’s in place. All too often owners who are in this position throw an ad on a site, hire an individual who seems to fit their notion of a fit, and within eighteen months let them go.
Today, the CPO often sits at the center of company strategy, or at least that’s often the primary goal. What’s actually happening in practice is considerably more nuanced.
Every year, in conference rooms and video calls across the country, sales leaders perform a very familiar ritual. Last year’s numbers are gathered and a growth percentage is tacked on that will presumably satisfy the board. This is then divide it by the number of reps in the organization and a quota number is reached.
Ten years ago, the idea of a part-time CFO would have been met with consternation at best in most boardrooms. Today it may raise valuations. Across industries and company sizes, a fairly quiet shift is underway in how organizations access and utilize senior talent, and it’s upending assumptions about what it means to be an executive.
For two decades, the per-seat license was the engine of the software industry.
The math for this type of approach has been quite simple, the contracts were predictable and the revenue was recurring.