Direct Line to Revenue is What Matters for your Startup (and your Career)
One of the main lessons I learned early from my startup & big tech co experience is the importance of being a producer. What do i mean by this?
I would joke back then from my experience with Alibris, when a startup is not doing well the first people to go are marketing and customer service. But who would be the last ones to be cut? engineers who build stuff, and i would argue more importantly, sales which sell stuff. At the core of any business, these are the two things that really matter.
I saw this dynamic play out while I was at Yahoo!. My initial work there was in marketing and I carried around the ignorant view that Sales was grubby (thank you Glengarry Glenross). But a few years in, I quickly realized how central sales was to everything. I saw how valued sales people were in the organization. Money is the lifeblood of every business and a great sales person literally brought in 50–100X what they cost.
Running a sales organization and then a larger P&L (Profit & Loss statement) is the best way to learn business. And it makes sense, whatever theories you have, you either hit the number or you don’t at the end of the quarter. You can’t argue against how simple and pure this is. I also saw that as long as you deliver on the numbers and don’t do anything illegal you could pretty much do whatever you want. I kind of did and that was the reason I stayed at Yahoo! for so long. Because I directly touched, affected and grew revenue, the company provided me with a great and lucrative environment to work in.
Don’t get me wrong that it was not stressful. It definitely was. But something about aiming and trying to hit an ever growing target is fun and educational. Also valuable was the clarity it provides for you and the focus for your team. It’s what i see in the best startups who use and fully focus on the “One Metric that Matters.” I should note that for some early stage startups revenue may not be the best metric to focus on, as it “always depends” in the startup world (and life). But on the other hand, the ultimate validation is that a customer is willing to pay for what you are making.
So to reiterate my main point here: the acme of business and business people is learning how to drive revenue. Ie. Sales. If you do not have a direct line to revenue, you are eventually going to be big trouble. Driving revenue is what makes you valuable to an organization both as a boss and as an employee. So it behooves you to get good at this. Have direct line of sight to revenue!
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