3 Acts of Growth: Lessons, Patterns & Mistakes from a 3x Entrepreneur
Aug 10, 2022
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The founder journey typically comprises of conquering product-market fit, go-to-market fit, and then scaling. Sounds easy, right? This simple formula makes the journey sound like a straight line from founding to IPO, but reality has proven it’s a much windier road.
What’s less talked about is the holistic view of not only how to succeed at each stage, but the biggest lessons, patterns, and mistakes many founders make when transitioning from one stage to the next.
To give us the real talk, we tapped Bob Tinker, 3x entrepreneur most notably Founding CEO of MobileIron which he grew from $0 to $150M in ARR before taking the company public in 2014. During our LFG: NYC Enterprise Operators Retreat, he gave us the rundown of what he calls the “3 Acts of Growth.” See his full keynote here and our recap below.
Act 1: Survive to Product Market Fit
(Aka Founder Growth from $0 to $1M)
According to Bob, the classic advice about finding product-market fit is misleading. It encourages founders to start with the founding idea, iterate (again and again) based on customer feedback, then boom…you’ll find product-market fit. But for Bob, it was never this simple.
He finds that the biggest product-market fit mistake founders make is to be too committed to the founding idea. While it’s natural that founders are super committed here (after all…that’s why they started the company!), this can lock you into a narrow scope of complex and often changing customer pain points. Instead, he urges founders to “cast a *slightly* wider net” and look for the most urgentcustomer pain points that may be in adjacent problem areas. A good algorithm is to allocate 20-30% of time exploring adjacencies, while focusing the bulk 70-80% on your initial target.
Example from MobileIron: At first, MobileIron set out to provide mobile security management for Symbian, Windows Mobile, and Blackberry. After receiving modest, but not urgent interest from customers, they started hearing feedback that executives were putting a lot of pressure on IT to allow iPhone usage in the office - saying to IT “figure out how to let us use iPhones or you’re fired.” Solving the iPhone problem was clearly the urgent pain point, so MobileIron pivoted to focus on security and management for iPhones.
Act 2: Find Go-To-Market Fit
(Aka Unlock Scalable Growth from $1M to $20M) Once you find product-market fit, it’s time to unlock growth by finding go-to-market fit. However, lots of companies get stuck in this growth phase.
At this point, you must ditch founder sales, and move on to a repeatable go-to-market machine. Why? Founder selling doesn't scale. A classic mistake is to simply try to lift and shift the founder’s selling approach to the rest of the sales team, telling sales reps to “just do what I did.” That won’t work because founders have super powers when it comes to selling - an ability to find and win deals others can’t. The key is to build a repeatable process that the sales and marketing teams can use to win over and over again. Bob relates finding go-to-market fit to trying to catch a wave. Before finding go-to-market fit, every deal is like paddling a surfboard in the ocean - hard, tiring, and frustrating. But once you do find go-to-market fit, you’ll feel the momentum - like surfing.
So how do you find go-to-market fit? Bob laid out a three step approach to get from paddling to surfing:
1. Catch the Wave - Find the Urgent Pain and “Wow Moment” Finding the urgent pain is the root of go-to-market fit, driving interest and leads. It answers the question: why would your customer buy now versus six months from now? Often, startups struggling to unlock growth are solving a medium pain (not an urgent pain) or are trying to “create urgency” versus finding an urgency that’s already there.
Then, what are the key “Wow Moments” that cause your customer to engage with you? The “Wow” is that thing (feature, product, etc.) that you show a customer that causes them to “lean in” and engage. You can see it in their body language. A classic mistake is that startup teams think they know the “Wow” and automatically attribute it to the feature they are most proud of. The reality is that the customers decide the “Wow,” not the company.
Finding the urgent pain and “Wows” are hard. Bob recommends your team sit down for 2-3 hours and complete what he calls the “20 Deal Grind.” This means walking through 20 deals (wins, losses or stalls) - who's the customer, why did they buy now, why didn’t they buy now, who made the sale and how? Simply reading notes in Salesforce won’t clue you into important patterns, but after a few quarters of the “20 Deal Grind” you should see patterns including the category with most urgency and volume.
“Key was the deal grind. Grinding through each deal. What worked, didn’t work. It was so laborious. We did it over and over again…we gleaned patterns from each conversation. It really worked. Then we took off.” - April Koh, Co-Founder & CEO of Spring Health
2. Build the Right Surfboard - Create a Repeatable Go-To-Market Playbook Once you have tha patterns, the key step to finding go-to-market fit is building your repeatable go-to-market playbook - how a startup finds and wins customers over and over again.
The first step of the go-to-market playbook is to nail down the customer journey (across the top of the image below). A classic mistake is to use the sales journey (1st meeting, 2nd meeting, contracting, etc). That’s NOT the Customer Journey. The Customer Journey must be from the POV of the customer.
Then for each stage in the customer journey, overlay the key milestones that you discovered from your Deal-by-Deal Grind: urgent pain, Wows, tie to 1st value, big rollout, become a hero, etc. And under each stage, be really specific about (a) what each team says and does, and (b) what tools are needed.
Distilling this process to a 1-2 pager (nothing more!) that outlines your entire go-to-market playbook requires iteration, sacrifice, and most importantly getting everyone in your team on the same page. A good sign is when a new sales rep posts the playbook on their wall above their computer.
MobileIron Example: Bob fit MobileIron’s entire go-to-market playbook on one slide:
3. Ride the Wave - Operationalize Ownership and Handoffs Like sports, handoffs are most often where things get dropped. So, be clear about the handoffs in the go-to-market playbook between teams. Make sure to operationalize your processes by assigning an owner to each stage. Remember that a go-to-market playbook is not just a “sales thing.” As a matter of fact, a go-to-market playbook is likely the most cross functional thing a startup will build - it cuts across Sales, Marketing, Product, Engineering, and Customer Success.
When you start to feel that wave building, you’ve found your go-to-market momentum. For MobileIron this momentum hit when they went from winning 10-20 enterprise customers per quarter, to 150 new customers per quarter, to eventually over 500 enterprise customers a quarter. It is some of the most fun an entrepreneur will ever have!
Act 3: Win Adjacencies & Un-Learn Old Habits That No Longer Work
(Aka Become a Category Leader from $20M to $100M)
At this point, you may be thinking, “we have so much momentum, let’s just keep doing what we’re doing.” But the very things that make you successful early on, can hold back your growth or even kill the company, because what works at $20M ARR doesn’t work at $100M+ ARR. So now, you need to un-learn your go-to-market muscle memory and re-find go-to-market fit. Embrace the new-ness ahead - new customers, new products, and a new pitch to win adjacent markets. MobileIron Example: MobileIron rolled out their “next act” product in the Fall of 2012 at about $20M ARR. 30 days later, they reverted back to their first act. Bob was terrified and thought “if we can’t get this right, we’ll hit the wall.” So he resorted to drastic measures. Over a 3 week period, Bob made every single person on the sales team present a new sales pitch to him 1:1. While this took a lot of time, it was the most important thing for the company at that moment. And it worked. They un-learned their GTM muscle memory, and six months later, a major portion of MobileIron’s revenue came from the new products. Bob had several major un-learning cycles in his evolution as CEO:
At founding: As CEO, you and your small team are all in the trenches, handling every aspect of the company together.
At 50 people: As CEO, the goal is to hire superheroes who are better at their job than you are. When you hire a specialized superhero, they’ll tell you everything that needs improving, which will be unpleasant, but exactly what should be happening!
At 400 people: The CEO becomes more like a Dean of a university, where you have professors to bring up the next generation. The CEO does a lot less, but for a lot more people, and has to repeat themselves over, and over, and over again.
Bob shared his biggest un-learning: His greatest mistakes were all rooted in fear of self-inflicted turbulence that got in the way of doing the right thing for the long term. He learned to let go of that fear.
Un-learning isn’t just a CEO thing. Every leader must un-learn what made them successful before and learn what must be done for the future.
Bob believes un-learning is a core competency to growth for a company and for a team. And if done right, un-learning will happen over and over again. We agree.
If you’re an early-stage enterprise founder or operator — connect with us directly to chat about anything GTM or check out our events page to stay in the loop on all things happening in the Work-Bench community.