Category Archives: blog

Gabe
Upshift’s Year in Review: Congrats to our First 15 Graduates!

Here we are at the start of a new year and I can’t believe how much we at Upshift, as well as the tech startup industry in Silicon Valley, has to look forward to. It’s never been a more exciting time to be part of the innovations that are changing—and improving— the way people do things every day.

At Upshift, we’re even more jazzed about the potential of today’s startups because we’re helping to grow their businesses faster than they could on their own, and in a way that’s sustainable to keep them thriving.

Upshift, still less than a year old, already has graduated 15 companies from our sales acceleration program, the first five of which raised over $215 million in follow up funding within six months  of completion. If you know me, you know I’m not shy about saying WE KICKED ASS by kicking the asses of our program participants so that they could be successful.

How did we do it?

Part of the beauty of Upshift is, we’re not just teaching the companies in our program how to scale, we’re committed to sharing information for the community at-large to help them kick ass as well. Part of the plans we have for 2015 is to post in-depth case studies on how we moved some of the companies in our program from Point A to Point B. Quite candidly, it’s too much to talk about here since each company is different and each deserves their achievements to be highlighted in a way that can be fully absorbed.

What did we learn this year?

When we first started out in March of 2014, we had a concept – to help accelerate the growth of Silicon Valley startups. I had experience scaling companies through my own businesses, and learning from my own mistakes as well as the mistakes of others, is a key tenet of our curriculum. We learned as much from the companies that came through our program as they learned from us. They learned how to develop a structure for their sales process, and we learned how to take our experience and turn it into an actionable blueprint for them and other companies to follow. In the 10 months since launch, we made several iterations to the program and continually grew and standardized it based on what we identified as the areas in which the companies needed the most help.

Did we meet our expectations for our first year?

I’d say things have gone better than we could have hoped for. Back in March, there were two of us working on two companies at a time, and taking between four to five months to execute our scaling process.  In the fourth quarter of 2014, adding Julian Pisani to our staff helped us to expand to six companies working over the course of three months. Not only have we learned to streamline our process so that it’s faster, we’ve also learned how to add more value and take on additional capacity – now that’s scaling!

What did we learn from the companies participating in our program?

Looking back, I’d say it comes down to five things that startups need to focus on:

1 – Don’t boil the ocean.  Startups don’t struggle because of lack of potential customers, they struggle because they’re going after too many prospects at once. It’s important to hone in on the customers most likely to be interested in your product or service. Don’t go after everyone.

2 – Data is essential. Many companies in the early stages set out flying blind and relying on emotion over data.  They make gut decisions about strategic directions that can very often prove wrong or misguided. It’s important to accumulate data early on, and analyze it so you can begin to identify trends as to what’s really working. You need transparency in everything you do and you need to back your decisions with data.

4 – Learn how to prioritize. Another setback that tends to befall startups is a lack of execution or prioritization. Often startups are doing a lot of things, but because they’re not prioritizing what’s most important, it inhibits their ability to execute on the things that matter most.

5 – Every house starts with a blueprint. Often companies have a process or structure for the way they go about customer acquisition, but if it’s not documented and only the founder knows what it is, then you can’t scale. It’s like trying to build a house without a blueprint.

What’s in store for Upshift next year?

We are continually focused on identifying the areas we can leverage most to help scale startups rather than doing everything. (We take our own advice!) So we’re taking another look at the program to reevaluate what we can do to be even more productive in 2015. And in keeping with our commitment to the greater startup ecosystem, we’ll be rolling out a great deal of content here on the blog and throughout our site, and making it free to startups to help them expedite their own learning curves.

The first of these initiatives will be an eBook with advice and tips from several of our Upshift advisors – the kind of advice most startups would kill to get in their early stage – we’ve culled it and couldn’t be more excited to be putting it out there. Of course, we’ll also be making core revisions to our program to help the companies we bring on board and give them the best experience we possibly can. As a sneak peek, one of the areas we’ll be looking to focus on will be helping startups implement a management structure for high performing teams and ensure that all the companies going through our program can execute on that.

To get an idea of the types of companies that can best benefit from Upshift’s program, take a look at our first 15 graduates. We couldn’t be more proud of their accomplishments and can’t wait to see where they go from here.

Betterdoctor – Discover the best doctors in your area
Boomtown – The new age of tech support
Boomtrain – The only personalized marketing platform with artificial intelligence at its core
15five – Stay connected with your employees, projects and culture as your company grows
Honeybook – Delightful, simple tools for event professionals
Massdrop – Bringing enthusiasts together
Metromile – The smart approach to car ownership
Pathbrite – Capture and share your projects
Proven – Easy, Elegant Hiring.
Supplyhog – Built from the ground up to better connect vendors and manufacturers with customers in the construction industry
Symphony Commerce – Commerce as a service
Thanx – Use your credit or debit card to earn free stuff from your favorite merchants
Ubiquity Retirement + Savings – The smart way for you and your small business to start saving for retirement
Whalepath – The largest marketplace for market research and competitive analysis
XTV – Connected TV and media management platform

In terms of scaling our own company, we’re planning to double our staff, if not triple it, in 2015, to accommodate 50 companies. Will yours be one of them? If you think you’re ready to scale, leave a comment below or email me at gabriel@upshiftpartners.com. We’d love to hear from you!

 

 

 

 

 


Gabe
The Next Web’s Feature on Upshift Partners’ Startup Accelerator Program

Big thanks to The Next Web’s Lauren Maffeo for this fabulous feature article on Upshift’s Startup Accelerator Program!


Gabe
One Important Secret to Scaling…

Over the years, I’ve constantly looked for ways to empower my teams, to give them a game to win and something to push towards. I’m a firm believer that team + execution is what leads to scale. While we come across many interesting and talented teams the area that we often see most room for improvement is execution.

A few years ago I read an amazing book called The Four Disciplines of Execution and it’s had a profound impact on the way that I run teams. I encourage you to read a summary here.

This week we launched the Upshift Q4 theme…SEIZE YOUR GLORY.

Here are some photos of the launch with our team.

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Gabe
3 Lessons Learned from Bootstrapping Sales from $0 to $20 Million

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Eight years ago, I started a tech company in Silicon Valley without an email address or computer and bootstrapped it to over $20 million. And I did it without a penny of outside funding.

If I can do it…anyone can…

To say that my journey is unique is a huge understatement. I didn’t go to an Ivy League school; in fact, I dropped out of college. I didn’t get funded by a VC; instead, I bootstrapped my way along on credit cards and home equity lines of credit. Growing up on a hippy commune, I didn’t have many examples of what it meant to be an entrepreneur. We had no electricity, internet, or televisions and the only entrepreneurs I knew were in let’s just say, “farmers.”

How did I do it?

Here, I’d like to share three powerful lessons I learned the hard way in the hopes that you don’t have to make all the same mistakes that I did.

 

Lesson 1: Do More With Less

 

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In this lesson you will learn:

  • How to focus on the customers that have the most pervasive and urgent need
  • The importance of a top 10 and bottom 10 analysis
  • Mo’ money = mo’ problems

My Story:

My partners and I were running a marketplace for local services called Calfinder that –with a bit of tenacity, the ability to tap an untapped market and perhaps even luck – we were able to grow to about three million in sales. (More on how we did this in Lesson 2). But eventually, we found ourselves stuck. You see, like many entrepreneurs, we were incredibly ambitious and wanted to continue growing as fast as we could – our goal was doubling revenue each year. I wondered what we would have to do to accomplish this and was feeling deflated.

At that time we were still struggling to hire the right salespeople – we were generally hiring about three people to find every one top performer. Running the numbers I saw that in order to accomplish our goals we were going to have to triple our sales team. But I had to find a way to accelerate the process. I started digging through our customer list and saw two of the companies in our top ten were spending almost ten times what the average customer was spending. I knew I was on to something…

Then I hired a freelancer through Elance to research both our top- and bottom-performing companies to gather other attributes on them like:

  • how many counties they covered
  • how long their website had been up
  • what our entry point had been into the account

When I got the spreadsheet back I sat down (with some beers) to analyze it and found that there were a few key attributes shared by these exceptionally profitable customers. I then built a list of 100 more companies that matched this same criteria. After building the list, I designed a coordinated campaign to hit them from all sides – phone calls, emails and attention-getting gifts sent in the mail. Then I executed on my plan – sending out the mail pieces each week and ensuring that each of our 100 prospects got a follow up phone call. To my surprise—absolutely nothing happened during the first four weeks of my brilliant campaign.

As I sunk back in my chair (with another beer) to doubt myself even more, it happened. My phone rang and it was the CEO of a multi-billion dollar company. He said…”ok, you’ve got my attention, how can you help me?” The next week I got another call and then another one the week after that.

Four months later, we had signed up over $2 million in contracts and after tallying up our total spend, it cost us around $2,000 and we didn’t have to hire a single new salesperson.

What I Learned:

It’s not only the power of hustle to get results, but the incredible power of doing less, but with focus. If we were flush with VC cash the odds are that we wouldn’t have been as creative or willing to put our foot on the gas. Or, we would have been doing so many things at once, we would have given up a lot sooner before seeing any results. Focus.

The Takeaways for YOU:

  • If you’re just starting out, pick a market with the most urgent, pervasive and costly problem that you can solve.
  • If you’re already running, take a step back in order to take a huge step forward.  Analyzing the attributes of your top and bottom ten customers; then look for 100 more that match the criteria of your top ten and pursue them with all that you’ve got. Read more on this in my post: “The 80/20 Rule.
  • Once you’ve identified your prospects, be relentless about contacting them; but be creative and smart, too. Read more on this in my post: “Stop Pitching.”

 

Lesson 2: Make the System the Hero

 

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In this lesson you will learn:

    • A better playbook = faster growth
    • Document everything that you do more than twice
    • The importance of iterating weekly

My Story:

When we came up with the concept for Calfinder – a marketplace to connect homeowners with local service professionals – we didn’t know how to build a website, use software or even spreadsheets. In order to test the business model, four of us wrote down a script on yellow note pads and went around to houses asking people if they would want to get free quotes on household projects. To our surprise, when we all met up at Starbucks at the end of the day we had collected 10 leads!

The next day we wrote another script, this time geared to service professionals, then looked in the Yellow Pages to find contractors with the biggest ads to see if they’d be willing to pay to get connected to the homeowners we identified. We set up three appointments for the following day. We asked the contractors how much they’d be willing to pay for leads – the names and phone numbers of the people we knew wanted work done. The first one said “$80,” we literally made a photocopy of the yellow piece of paper and sold it to them on the spot. A company was born.

We took the money, refined our script and hired college kids from the local campus to knock on doors for us over the next weekend – that brought in 30 more leads.

We repeated this process, continually refining the script and process for months, all while documenting everything in the system, testing it and iterating on it every single week.

Over the years this helped us to go from 0 to 50 salespeople and run a highly organized company with a relatively small staff.

What I Learned:

I’ve never forgotten that hustle and documentation go hand in hand and build upon each other to create momentum. I’ve taken this process with me to every company I’ve started and every company that I advise and invest in.

The Takeaways for YOU:

  • Your playbook is one of the most important things you will create as a startup
  • Document everything you do more than twice
  • Review weekly to start, then start reviewing monthly

 

Lesson 3: Let Data Drive Decisions

 

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In this lesson you will learn:

  • Why you should let data drive decisions
  • How to manage by the numbers
  • How to remove ego from decision making

My Story:

We were up to a 50 person sales team at Calfinder and closing four times the number of deals than we were before…but…when I looked at the data for previous 6 months I saw that we had actually lost $1 million ramping up the team and though the deal volume had increased sharply, we hadn’t seen any boost in profits. In fact, churn had increased significantly which meant that the lifetime value of our customers was cut in half.

We were on a very rough road; one that called for a serious correction.

Again, we dug into the numbers looking at churn by rep, average deal size and customer happiness, as measured by repeat business.

We found six salespeople that were profitable and in order to save the business from going under we made one of the most difficult decisions of my career – letting go 42 salespeople (84% of our sales force!) and going back to the drawing board.

Sometimes difficult decisions pay off. After our layoffs we focused on the specific, measurable things that made these six salespeople so successful. We looked at every attribute and approached it like a science. And we found some very interesting similarities in terms of:

  • where they came from
  • the approach they took
  • the specific customer segments they were going after

We then emulated everything they were doing and cut out a lot of what we “thought” made for a successful salesperson, instead only focusing on what the data told us.

Over the next 12 months we grew revenue by over 50% with a team of 6 and eventually, Calfinder grew to become a $20 million business. Did I mention we started with nothing?

What I Learned:

Less is more when you’ve figured out what works the best. Just do that and forget about the rest of it.

The Takeaways for YOU:

  • Don’t let the highest paid person in the room make decisions that aren’t supported by data
  • Don’t let your ego get in the way of doing what needs to be done
  • Don’t try to scale until you really have a good understanding of the metrics that lead to success

Do you have any of your own stories of how bootstrapping sales worked for you? Tell us about it here, or ask me a question about any of it below.


Gabe
What do Zynga, HubSpot, and HootSuite All Have in Common? (Besides Really Cool Company Names?)

If you guessed they all scaled from cool idea to multi-million dollar behemoths that changed their respective industries within a matter of years, you’d only be partially right. The thing that all these companies have in common is that their founders (or sales gurus) are represented among Upshift’s Board of Advisors, along with three other Silicon Valley dynamos who not only talk the talk when it comes to business growth, they’ve all walked the walk.

Upshift is proud to announce our stellar team of advisors whose combined startup experience totals billions in sales volume and acquisition dollars (including two sold to Google and one to Oracle) and millions of users or customers.

Marcus Segal, COO of Game Studio Operations; former COO of Business Operations and the Casino Division at Zynga (world’s leading provider of social game services with more than 240 million monthly active users playing its games)

Andrew Riesenfeld, VP of Sales @GuideSpark; former VP of Sales Development + Pipeline @Responsys (helped lead the company to an acquisition by Oracle for $1.6 billion)

Mark Roberge, Chief Revenue Officer of the HubSpot Sales Division. (HubSpot ranked #33 on  the INC 500 list of Fastest Growing Companies for 2011and Mark was ranked #19 in Forbes’ Top 30 Social Sellers in the World)

Navid Zolfaghari, founder of Pinpoint Mobile; former founder of TriFame online talent discovery site; early member at Wildfire Interactive  in charge of social media campaigns for GM, AT&T, BBDO, and Target. (Wildfire was acquired by Google in August 2012 for over $400M.)

Ryan Holmes, CEO of Hootsuite, global leader in social media with nearly 4 million business users, including 79 of the Fortune 100 companies; former founder of Invoke Media, the company that developed HootSuite in 2009.

Aaron Ross, #1 best-selling author of Predictable Revenue: Turn Your Business Into A Sales Machine With The $100 Million Best Practices Of Salesforce.com (called by many people the “Sales Bible of Silicon Valley.”)  Founder, Predictable Revenue Inc. consultancy; former sales guru at Salesforce.com, where he helped increase Salesforce.com’s revenues by $100 million.

How do we work with these advisors at Upshift?

We’ve assembled this seasoned team with hands-on operational and advisory experience to ensure that our portfolio companies have the best and the brightest behind them.

We enlist their knowledge as part of the Upshift curriculum in the following areas:

  • building massive sales teams
  • growing revenue
  • knowing what the most important KPI’s are for growing sales
  • startup sales strategy
  • recruiting and hiring
  • demand generation
  • fundraising

They’ve helped us to build a world class program that can be honed and repeated with many startups. We find that this approach of codifying knowledge for the 80% of things that all successful startups do well in terms of sales, works much better than them doing one off analyses.

To learn more about the Upshift program or our stellar team of advisors, visit upshiftpartners.com.


Gabe
The Most Important Startup Phase You’ve Never Heard Of

You know the process of evolution for most new companies: they incubate, where they discover what they are and who they’re for (which may not be the same as what they thought); then they accelerate, which is where they validate their reason for being through actual customer feedback; and then if all goes well in these two phases, they’re ready to scale, or grow, and reap the fruits of their labor and maybe eventually get acquired. But there’s another crucial phase that occurs in which you build upon the knowledge you’ve already gained from incubating and accelerating—but before you actually scale—and we call it:  the Upshift Phase.

The Upshift phase comes down to one essential factor that’s crucial to get right: customer creation. Without customers, you can’t build anything. When you figure out what it takes to get customers then you can figure out how to get more of them. Only then, can you scale your business. This phase can take companies 12-18 months, and cost between $750,000 and $1.5 million, before they “figure it out.”  It takes a lot of trial and error, but it’s worth the time and money spent if you want to have a viable enterprise. However, with proper guidance and support, the time frame of the Upshift phase can be condensed considerably.

How do you know if you’re ready to enter the Upshift Phase?

The benchmarks we use to determine if a company is ready for the Upshift phase are:

  • The founder has been doing most of the selling and has been able to acquire 10 + paying customers thus far.
  •  The founder recognizes there is still work to be done and estimates a minimum of 6-8 months “runway” time to ramp up sales efforts before scaling.
  • The company’s current lead gen efforts are bringing in a minimum of 20+ inbound requests per month.

What defines the Upshift phase?

There are several important markers a company should achieve during the Upshift phase. It all comes down to systems and processes including:

  1. A repeatable lead generation process

In my post on the 80/20 rule, I talk about how to identify your best customers by narrowing down the ones that are the most profitable, and that get the most value out of what you are trying to sell. Model those customers and figure out how to get more of them using different sales tactics – try some of the ones I’ve outlined in my post, Stop Pitching.

  1. Objective and measurable sales process

In my post on the sales cycle, I talk about persistence and creativity as key to getting more customers that are similar to those you’ve identified as the best. But you have to test and quantify the results of every tactic you use to find out which are most successful. You can’t shoot in the dark and hope to win each time. Take the time to be methodical about it and gradually you’ll see some trends start to develop.

  1. Ability to onboard and get sales people to trend towards quota

Once you figure out what tactics work for enticing new customers, you need to implement a process for training your team to implement that process. This can involve written manuals, phone or webinar training, or offsite functions that focus on nothing but your sales process. Give them what they need to do the best job for you.

  1. Refined messaging

Building a business takes constant evolution. You are never done learning, refining and improving. As you bring new sales people on, constantly monitor and refine your sales messages. Stay current with the times, the marketplace and with changes in your technology or how you evolve your brand or product. See what your competitors are doing and adjust accordingly. Make updates to your product whenever necessary and make sure your messaging reflects these.

  1. Lifetime value equal to or greater than 2x the cost of acquiring a customer

Many startup companies make the mistake of taking on any and all customers. This can be a mistake as sometimes a customer is just not worth the effort. You need to make sure your customers bring a positive lifetime value, not just immediate gain or numbers. There is an actual formula I use to test which customers will make the cut – they need to have a projected LTV of two times the cost of acquiring them. Otherwise you are just wasting your money.

  1. Payback period relative to cost of acquiring

While LTV is important, you shouldn’t have to wait a lifetime to realize value from your customers. Companies move fast and they die fast, so you need to have a realistic payback period in which to see the returns from your customers, usually within 12 months of acquiring them. If you have any customers who are costing you more in time, complaint management, refunds or make goods, you might be better off firing them. There are other forms of payback that should be considered if financial benefit is not readily apparent. Ask your customers if they would refer you to their colleagues or supply testimonials to use on your website or in your sales materials. If they help you get new customers, they may be worth hanging on to and keeping happy.

Okay, now I’m ready to Upshift. How can I ensure my sales process is up to snuff?

Upshifting is about being prepared to scale so the question now is, what do you need to have in place in order to scale properly? There are two options companies usually take to accomplish this.

Option 1:  Hire a VP of Sales

This is usually the fall-back position for many startups who are ready to upshift. Personally, I went through four Sales VP’s until I found the right fit. So it’s not as easy a solution as it sounds.  This article  by Jason Lemkin breaks down the types of sales people you may come across during the hiring process and how to make sure you find the right one for your company based on their personality type, and also if they have the right skills for your particular kind of product.

Option 2Do it Yourself

This option could potentially be worse than hiring the wrong Sales VP in that a) you couldn’t figure it out in time and missed opportunities, or b) neglected the operations part of your business and something went terribly wrong, or c) you scaled prematurely.

In this Forbes article, Nathan Furr defines premature scaling as “spending money beyond the essentials on growing the business (e.g., hiring sales personnel, expensive marketing, perfecting the product, leasing offices, etc.) before nailing the product/market fit.” He cautions against “spending money scaling the business before you have really nailed what customers want and how to reach them.”

This is the biggest failure zone for startups because you only have a limited amount of time in which to create a repeatable process and without a roadmap or guidance, many companies make these common mistakes. This is why the Upshift phase is so important and why I’ve turned my professional pursuits to making sure you succeed by avoiding them.

Here are some metrics we recommend SasS businesses meet in order to know they’re ready to scale. Until then, they need to focus on building a repeatable and measurable model for sales success.

  • Half of their sales reps are meeting their quota
  • Their SaaS reps are trending towards $300,000k in ARR (annual recurring revenue). This can be scaled up or down dependent on the average monthly recurring value of each customer.
  • They can onboard 2-4 sales people at one time with relative ease and measure their results.

What happens after the Upshift Phase?

You scale. Now that you have the tools, knowledge, confidence and support that you were lacking prior to the Upshift phase, you can build your company. You’ve figured out the recipe for your business and are ready to hire more people to cook it.

We created Upshift Partners to help accelerate the trial and error and preparation it takes to get to this point, and we expedite the process so that it takes 12 weeks instead of 12 months. To find out if you’re ready to Upshift, learn more at our website or send us an email.

Please add your comments or questions about the Upshift phase for me below, I’ll do my best to answer them here or in a future blog post.


Gabe
A bootstrappers guide to the top 5 start up sales tools

Technology is awesome. If it wasn’t for the internet I would not be able to live the lifestyle I lead today. Every week it feels like there’s some new tool to try out. I love anything that makes my life easier or more productive.