# How We Grew from $5K MRR to $25K MRR in 12 Months – David Sims – MicroConf 2016 Channel: Rob Walling Video: https://www.youtube.com/watch?v=DqdHVqTgD_U Duration: 11 min Language: English Words: 1916 Transcript page: https://viewrankai.com/tools/youtube-transcript/DqdHVqTgD_U --- [0:00] [Music] [Music] we actually hit 30 km thank you last last year when I was at micro comp here at 5k and it was with the pipe burst and everything like that and it was kind of fun cuz steli was on stage and he's given his really high energy sales talk and there was somebody counting the swear words that he said he they counted I know they counted 58 swear words from steli see I can't swear like steli so I'm not gonna try but yeah that was pretty cool and then there was Heaton okay so he'd ins like a star of micro Kampf right so I want to talk to him like I'm [0:51] starstruck something like headon I'm kind of stuck at 5km or are what should I do and then he was like what's working for you he's like double down on that so every time I think of headon is like double down on that alright sorry so that's uh so what did i do so i had 5km RR a year ago so there's a guy named Jason Lemkin and he runs an organization called SAS sir and he's like he's like the he is the Godfather of SAS I mean like he had a couple hundred million dollar exit so I'm sure you guys have heard of him and so one of the things that he says [1:37] when you're around 5k he doesn't give that number but when you around 5 km RR he's like ok when you're ready to sell or to hire sales people don't hire one hire two so I had done like I don't know 85% of the sales to get up to 5 km or R and I was like okay I'm burnt out I'm stressed out that's why I'm here at my off can i outsource sales or customer success like I thought I could leaving leaving my Kirk on Flast years like no way I learned that and so I hired - I heard - I took my 5k I took [2:11] all my money and I hired two people and then probably threw in some extra money too and the first account exec on our first day of work she closed a deal that was like twice as big as any deal I had ever done so that's one thing I can definitely recommend is when you're at that 5k level or so you're approaching it maybe and you've been doing all the selling and you have to do all the selling yourself you can't outsource it like the founder has to do the selling or founders but when you're ready to hire a salesperson don't hire one hire two sorry I'm looking at my [2:46] crib notes oh yeah then the big question became like how do we compensate this person okay and so people stress a lot about like what what should the sales commission percentage be and all that kind of stuff what I found was look in your market first of all forget this remote sales stuff well that's my experience you know don't do remote sales bring them into your office and it kind of sucked I had to get an office to and I was like I'm an introvert I want to work at home but like I pushed through my boundaries got the office and I was like okay I looked around what are [3:24] sales people in my town making what do they want as a base what do they want as an aunt on target earnings and can I afford to pay them okay so I knew that in my best month I had added $600 to the Mr are in my best sales month so I thought like okay maybe they can do 700 dollars a month in month out because they'll be doing it full time they'll be better than me maybe that's the way I could do so you can work out the math you can actually say like well I want the aren't target earnings to be here I'm at a base of here what's the [4:00] difference and you can say if they add like say $1,000 an mr are a month and you do the math and you're like well if I pay them this percent of the annual contract value of a deal then by the time the math all works out you get from their base to their OTE their on target earnings so that was a big that was a big lesson learned for me and like there was no end of like going around around and like coming up with the right percentage for that one all right um sorry I don't have slides like those guys oh yeah hangout Commission's so so I'm really cheap [4:40] right so I was like oh my gosh like I'm I just signed up a monthly customer and this customer is paying me once a month so my initial sales plan was to drip out a sales commission over 12 months it was a terrible idea like very first salesperson she's like oh yeah sign up it's great you know and then like she really read the sales compensation plan again and she Keanu she sent me a message saying like you know this thing this isn't gonna work so what I learned right away is like basically what Jason Lemkin says from sastra again everything I'm saying here is just a regurgitation on [5:16] what Jason Lemkin says so he basically says just pay out your sales person their full commission right away and I'm like there's a big part of me and since I come in I don't want to do that like what if they churn you know I got a monthly pair what if they churn after two months like I'll lose money and I I stressed about that a little bit too long and Lemkin basically just just says don't sweat it because you're gonna figure out the sales commission percentage that works so if you have like a lot of people are churning out after two months you know you're gonna [5:49] adjust that percentage so it all works out well in the end because if you're higher you know if you're self-funded single founder like me the people you're hiring like they're not going to quite have the passion that you do okay we all know this right so I mean you got to make it easy for your sales staff you got to basically what I finally concluded was pay out the whole thing just just pay them out now I did wait I do wait until we get the money of course and once in a while someone does churn you know before I've actually got back that that Commission but I don't worry [6:22] about clawbacks nothing like that and like that's basically what Jason limpkin says is don't worry about the claw backs just paint out sorry encrypt notes again oh yeah in terms of salespeople - everyone talks about you know you want someone with like five years in inside sales b2b SAS and stuff like that and I wasn't I just wasn't finding people like that so what worked for me in the end was people who had done actual sales not retail a little bit different than that two to four years experience as long as they could demo well you know they had the some decent amount of computer skills then I could get them to close in [7:06] fact I felt my initial two hires one woman one man the man could demo better than the woman and he picked it up faster but he wasn't near as good a closer as she was and I started calling her at the closer because she started closing so much business and she wasn't quite as good at demoing and she didn't pick it up as fast but I kind of learned from that is I learned that closing skills far outweigh demo skills so I've only got a few more minutes so anyway yeah so I hired that she'll a ease and and you know when you're ready to one [7:45] hire one AE hire two and one had to resign because of family emergency reasons and so I kind of diverted from that track and I said like well I've got some extra money what should I do with it so I ended up hiring a growth hacker so Jason Lemkin says you know you should hire your first VP of Marketing early on he hired his at 20km RR and so I was like well I got some extra money a higher growth hacker and I know that everyone here talks about different ways you can outsource it but for me what worked was hiring an in-house growth hacker and so I was able to take that [8:17] money and that growth hacker is you know of course able to boost leads and then eventually you know revenue grew and as soon as we made more profit I'd want to hire and so I backfilled that AE later on sorry this is like the least polished talk today oh boy oh yeah customer success so I hired that so like once my first a II was starting to close and I starting to feel confident and it's like Brian was just saying you know fire yourself I was like okay how can I pull myself off and developer I work with how can I pull this off of customer success so we went [9:01] ahead and hired customer success and so basically every time there was a little bit of profit we just we just hired we're still not profitable at 30 km or are that's okay I don't know even when the last thing I guess I'll leave it with is a lot of people also talk you know like at 30 km or our I don't stress quite so much about you know all penny-pinching I guess and so now we're ready for that that administrative assistant that office assistant and so what Jason Lim can again says is you know like actually it's Mark Suster the the VC fellow he always says when you do [9:42] your Series A funding the first hire he recommends is an office assistant office admin because they just they're like a force multiplier they just make all those little non-automated things that you have to do I kind of take that away from you and what I like about that better than a virtual assistant is I can say like you know hey look at my screen can you make that into that and like leave them alone whereas if I fear that I'm from using a virtual assistant I have to write a bunch of instructions anyway that's just been my experience anyway that's it so I was really frustrated a year ago at 5km where are [10:18] so basically do recommend reading Jason Lumpkins blog he posts all the time force aster and I kind of got over a couple of those humps and then you know we we were like like like a last Friday we hit 30 km or our so my recommendation will be like read everything and then my final that Jason Lumpkin says so my final recommendation would be double down on that [Applause] you --- About this transcript Read from YouTube's own caption track and laid out by ViewRank AI (https://viewrankai.com). 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