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start let's go let's do it go for it take it away recording we I switched recording off so if you need to do you need me to switch it on or are you going to switch it on no we're we're recording on the cloud you're good to go okay fantastic well good morning everyone uh most of you know me already so like it's welcome a pleasure and a treat um last week we had or was it two weeks ago now we launched the pre-launch of the book you know and the book called Revenue architecture um is a behemoth book it is not something simple um it is like uh Siri can you bring it up again oh was uh was Will were you pulling one out I mean like it is sizable um the problem with that is well we well we kind of like knew it because we did it before so we kind of like I can't claim ignorance here problem is I just shipped it to uh to Dr Howard in uh in Dallas uh $87 shipment cost it's heavy it's heavy um but it's a it's a textbook so it's uh it's sizable and you know like it has about 550 Pages 250 diagrams yeah I just show a screenshot of it down here we will be going through parts of that book today we'll be touching on them and we're going back and forth from that book I'll have I have it lined up in behind it and so on and so forth that book is out in second or third week of November the IDE behind this is as follows is in order to set the stage that not only you like I know you're here you're committing this hour to me right now but you got like a dozen colleagues that need to know this how are you going to get them on board with this that's what the book is for right to help you expand that okay um today we are going through an uh to tackle the following problem and you know like I'm going to go straight into it the group is uh too big for me to uh to go around the room so I'll just uh I what I would like to do is in the chat box um if you can typee your name your company and whether you're a startup or a scaleup so that you can know who your peers are in it right so startup call that up to 10 million scale up 10 to 100 million grownup I'll do that so up to 10 is a startup up to 100 is a scale up and 100 plus is a grownup and so what you can see is uh so I know Dave is a scaleup right I know that Joe Sanchez is is a scaleup so I know that Dave and Joe probably would be good to network uh right I got there we go we see more okay so so you can start picking your folks out you say ah Robert top dask you know like there we go so look look a little bit at the list and and and kind of like get an idea of who's in your bracket most of you all seem to be scale up I see Alex being a startup um and so on and so forth so like look at that a little bit gets an idea of who's on the call that's as a matter of introduction hi there's uh there's a lot of uh yeah a lot of like good people in the scaleup sector so I I'll I'll keep it focused on scaleup and Alex I know you were a startup uh so I'll I'll I'll touch you know like go down well uh on the top every time I have figure names numbered so if there's a particular slide that you want that you says like hey get me that slide I needed by today or something like that note the figure number at the top we're going to go number up 1 2 3 4 5 six seven so you know which figure that you're going to need and that we can get it to you uh we will share the deck but sometimes that takes longer you know like for review and whatnot but if you can you know like do this um feel free to screen if you st screenshots and stuff like that you don't have to apologize or or or avoid that the sound gets through of the screenshot screenshots is fine just attribute winning by Design session and you'll be good to go you can put it on social and whatnot these are all public content down here um what you'll see down here and what I'm going to uh um uh depict on is a chart that we have been using that's been created by benai David spits from benai has created this for me and um it depicts horizontally down here timeline over the past 10 quarters eight quarters vertically it cost you know like on this axis we see the cost of growth now what you'll see most commonly this is public SAS companies this is about 708 79 companies of the public you know the The Usual Suspects and what you'll see down here is the normal number that is reported which is 44 45x per of Revenue of the total revenue goes to the marketing and sales organization public companies you can pull this off this is no secret here or anything okay and it just is the marketing the cost of marketing and sales divided by the total amount of Revenue and what you'll see that that number actually fluctuated very slightly right and 43 44 45% and so now why is that it's for logical reason when you divide the number by a couple hundred million dollars to a couple of billion dollars that number doesn't fluctuate too much because the anchoring figure is just way too big right you're not going to jump from six6 billion doll in Revenue to $36 billion in Revenue overnight so that will you know there's a lot of anchoring value there what David did though and what we have been working on is what if we only divide that by the cost of net new Revenue what is the new around that is given now cost of growth I want you to point be realistic here cost of growth down here comes from Cog comes from from the marketing and sales cogs uh cost and is different than cogs publicly reported company C compliance we have cogs we have marketing and sale cost cost of retention falls under cogs therefore Co the cost of retention renewals is not included in this cost from expansion ing to Gap principles falls under Marketing in sales so with that caveat understand that what you're looking at down here um what we see is that the revenue that the cost is actually growing this is the problem we're dealing with this means that the adjustment we have made is not working that's the problem problem is the adjustment we made is not working what is the adjustment we made cost cutting cost cutting does not work now at first glance you know like if we look at if you look back at saster and we see the reports being given is like hey it is working but they're looking at a different metric they're looking at free cash flow they're saying no no no we drop cost and free cash flow is going up we're now generating 10 you know as a as a free cash flow margin we're generating we went up from 4 5% free cash flow margin to 10 11 12% which is a a valid point and from a VC perspective that is an absolutely okay perspective there's nothing wrong with that it just doesn't help if you're a CEO of a revenue leader I mean the fact that we're spinning off cash look we're a startup a scaleup we're supposed to invest that in growth the problem is we're not seeing that back we're not seeing that this revenue is generating growth right now as efficient as it used to be now the last what I said is actually where the problem gets and where we see a lot of uh uh interaction on the internet on what that last problem relates to is um and and what I like to say is like trust your own eyes right trust your own eyes like why is it not working like look like I can tell you I am not opening up more email spam emails I am every day this morning again it spends five to 10 minutes you just get all the spam you know like and and and I feel nowadays I don't know if I'm the only one if people have started to ignore my spam rejections right I told you I'm unsubscribing I still get four five six seven messages from them so what we see is that this email open rate is not going up doesn't matter what the market reports if you trust your own eyes if you yourself are you clicking on text messages from an unknown vendor absolutely not have you used the Apple feature to switch off calls from unidentified caller so they don't go straight to you yes you have right so you're not taking on Direct hold calls you're not taking on a text messages you're not opening emails that's why that number has become 228 per. that's what you're seeing you trust your own eyes now we see this we see reports on LinkedIn we hear you know like it takes 2,000 outbound uh touches before I get an for a qualified opportunity instead of like 200 which was a few years ago I saw uh Sam Jacobs my beloved friend from from Pavilion speak about that that is all an outcome of that right it's all the same thing what it means is our GTM motion is not working the GTM motions that we have been using are not working any longer it doesn't matter you know no it may work in some vertical segment right I'm not saying is if you're vertical size and you're selling to trucking firms there it may work but if we look as the industry as a whole that is not working that is the problem that we're going to solve today for that I have this agenda for which I'm going to use the data model to help us solve that um to to start solving it folks what we're about to embark on is an 18 months to two two-year journey to reset and get the growth back up and get healthy growth back up that's what the journey is going to be about it's a two twoyear Journey there's no if anybody thinks oh I got the trick I'm going to deploy plg plg is not a lead gen campaign or is it the sales methodology um AI is not going to since it's applied to everybody AI is going to level it up but it's going to level it up for everybody therefore it doesn't make any difference so those things are not going to make a huge impact um is if you want to stand out in the market if you want to keep growing fast what will is is the following so I'm going to step through these three topics going to talk about Revenue factory data model I'm going to show you some examples of how to make it work so first I'm going to talk talk about the the factory now it's important for me to differentiate when we say we're going to do lots of email that feels like a factory line and we're going to treat it as a factory those are two doing this webinar but I'm keeping an eye on the thing those are two different things right and so I'm going to separate those two different things I'm going to se separate uh what a factory is essentially you know like we all know the picture down here or many of you may know the picture you know Factory one is when we went to the spinning wheel and we used water and steam to power the steaming the the spinning wheel mechanization then we went to electrification electrical engine mass production and so on and so forth we most of it and what you're going to see we are operating today in the third and the fourth generation of a factory factories essentially have been a really good me uh uh mind mindset of how the industry as a whole including ourselves have moved forward we have just not obeyed to the factory laws to the same extent in GTM as other parts of the company has done as as the engineering department has done as um the design Department have done with design thinking all these things have have progressed but we the GTM team have not most of the work that we're doing has been taking place today in the the third industrial generation automation automated email sending out sequence sending all that that takes place in automation what we are currently moving is AI That's the fourth industrial generalization uh industrialization so that's where we're at we are making that leap much of the work that we have been doing today is been doing more more more not doing better we've been doing more so keep in mind we're going to use the factory which is not like oh the absolute hor uh working conditions blah blah blah and and the mass production that's not just what we're going to take a look at we're going to look at hey it has set up a quality system now when we look at the goal from the factory factories have three specific goals produce more lower the cost and drive quality okay this picture I'm presenting to you down here this is where the entire machine has gone is about to go wrong again for the second time so what you'll see is we've Focus primarily on productivity productivity was all about grow faster higher velocity and so on we call that scalable growth you could scale the more money you gave me the more I grow it this is where VCS came in and says hey if I give you twice as much money can you grow twice as fast heck yeah give me twice as much money I'll do that right and that's the age where we're coming from to grow at all cost grow at all cost included did not include cause by the very nature of it we are currently moving from a scalable maturity stage to a sustain stainable maturity stage so if you look back at saster and you look at all the presentations uh uh yeah pick one after another particularly of the VC ones they are all talking about cost efficient growth sustainable growth and they are all based on cost now here's the problem what happens if I ask you to grow faster at lower cost because that is about to happen all these companies are about to start growing faster but they want they are not given the the cost structure any longer folks that is when you get you know lowcost manufacturing we get churn thank you very much churn and what is churn churn is the result of you having the wrong product or your product is not delivering the expect expectation level I just want you to understand that the fundamental thing that we're about to send this entire Market of we're over steering on cost and what we're going to do is if we do not make quality of the product a vital part of our conversation moving forward then we're going to see an increased growth at the lower at a decreasing cost which means we're going to get bad product the problem with recurring Revenue product versus that of a regular Factory and I want you to to think this through with me the problem is if I make bad bicycles and I S send them I don't have a recurring Revenue stream on bicycles it may hit me like two three years later it may hit me hard as the the the the quality is is is dropping if I have recurring Revenue it hits me on my renewal right away so quality and renewals are direct in our world are directly related with each other now again I encourage you to listen to all the VC talk it is all about growth and cost but at no point in time is it about what we deliver to the customer now here's the trick and and what you know Revenue architecture the book is about and what we're describing is look if the first principle of recurring Revenue if it's true that the first principle of recurring Revenue that it is the result of recurring impact which you know like today is I have not been proven wrong on this first principle that means if we deliver recurring impact we will get recurring Revenue out of that that means if we focus on quality we get Revenue why is that so important because as I grow up on the growth stage as I go up on that growth curve that you see down here every one of you startups scale ups were all some dots somewhere along this line we're yeah I'll copy this one but we're we're just some dot somewhere along this line This x x marks a spot some of you are here and as you go up on that chart right as you go up you keep you you know like you want to keep growing that's the reason why you go up on the es curve but at the same time you cannot you as your growth rate goes up you got to get your cost to come down well if you keep hiring more salespeople you keep making your growth dependent on more acquisition growth then your cost of growth is going to keep going and growing and growing why because you know like when you were all down here in the beginning you had one one or two superstars and they were able to do it for you down here at the back end you don't have one or two superstars you have more Superstars but your percentage of superstars is so low that your average performance has gone down and as a result you are running a less efficient and your your cost of growth is going to go up and so the reason why you need to get at that back end of the scurve is your customers have started to contribute to growth your customers have said oh let me help you let me make a recommendation and it you like we don't have programs today for it that run that other than plg but you know like most most people that are in this stage down here you're dependent on your customers depicting impact and that's what caused the co the the the growth cost to come down because the cost of expansion and renewal are a fraction of the cost of acquisition that's how this machine is designed to work now what we have done up to this point is with the growth and any in all cost which is reflected by scal ility we are running in we have historically no longer today but we've historically run into that IPO uh de set or if your wew work your ran Way Beyond it right you go like it's all about growth growth growth growth growth growth at any and all cost where we forgot is that we actually need to mature through these phases we need to mature to hey in the beginning we need to grow fast obviously if you get from zero to 10 it's all about grow grow grow after $10 million you need to start taking into account sustainability cost is important and at some point in time you need to make sure that your growth from your customer starts exceed your growth from acquisition because the cost of that growth is lower that's how this machine is built to work that's the recurring Revenue machine most organizations have not switched to that and that means that the GTM function of grow at any and all cost breaks the system and has broken the system that is what we see in these numbers and the problem is not getting fixed problem is only it's going to get worse okay okay that's the problem we're trying to solve today okay in order to do that we got to start thinking differently and what I pointed out to you down here and what you'll see coming back is that recurring revenue is a result of recurring impact is the basic fundamental principle that if we build our companies on that fundamental principle you have the highest chance of winning of succeeding now will every company succeed of course not companies should fail I get that there's a normal part you know companies probably tend to 20% of the companies should succeed and there's a high uh chance of failing I get that we're currently at 1.7% success win rate of companies who achieved with a few million dollars achieve $100 million something like very low the problem is that not that we should not expect failure we should but hiring and deploying a wrong GTM function you know like should not be one reason to where a company fa that we're going to try to solve here's what I want you to take away Beyond $10 million in ARR we have seen again and again your company is operating as a revenue Factory your Revenue Factory has three calls produce efficiently and deliver impact to your customers that's it that's a recurring Revenue Factory it is way earlier than we ever thought now for those of you are scale-ups the 10 million in AR applies to a GTM motion not just to a factory not just to your total overall nor every one of your DGM motions are going through this you're launching a second GTM otion you were S&B you're going to Enterprise that Enterprise goes again through that whole same cycle you launch another motion another region even you're launching Europe Europe starts at zero million dollars again you start to you know first scale it then make it sustainable then make it durable everything so your revenue is uh that you're building is a whole stack of these ass models dependent on GTM motion and dependent on region there are other ver sometimes it may be a vertical Market for example for those of you who have experienced with settling to the US Federal Market US Federal Market by itself is a whole new GTM motion like just selling into that market require a whole separate motion for you to to to get educated on that's mindset of is what I mean with the factory mindset that factory mindset allows us now to apply and say now we know what the role of AI is now we know what the role of technology is where Cloud fits in and so on and so forth this whole picture of machine learning nii suddenly becomes clear and present we need it to help us not only to skill but also to make it sustainable and also to make it durable that's the role of machine learning in AI not just to scale faster at a lower cost AKA replace my sdrs uh five sdrs with one SDR armed with with chat GPT that may work for achieving scalable growth but it won't achieve durable growth okay with that tackled I'm going to go to the next step to the data model now in the revenue book for those of you are familiar with it there are six models that we describ these six models are the revenue model in other words how are you charging are you charging recurring fee are you charging an upfront fee what are you how are you charging the data model which we're going to talk about the mathematical model which sits on top of the data model then we have to go to uh the the operating model and so on and so forth we have these six models today we're only tackling one model of these these models have proven to work have now been peer tested by many of you for the past years I'm going to go into the data model and what I'm going to lay I'm going to lay the fundamentals and then I'm going to apply real life scenarios to it I'm going to say okay now look at what happens to your inbound motion and look at in so one so four but I'm first laying the foundation um and what I'm doing here is to explain to you very basic and simply this is a super important thing for all of you who run your companies your CEO C who you're on the call you cannot make this bow tie replace the marketing and sales funnel it won't work we're not ready to replace something we need to extend the marketing and sales funnel we need to build on that what is doing what you'll see here is that the bow tie simply extends the marketing and sales funnel right this Marketing sales this marketing and sales funnel simply is the first three stages we're not going to change anything if you already have something there keep it please keep it don't change that but you need to extend that and why to cover that impact that impact needs to be covered now for the for the sants for the for the for the people that that that are deep into Revenue I want you to understand the following this thing that I'm here G to make it blue to highlight it this is a fundamental understanding this piece is a fundamental understanding to pick up on the left side of the bow tie which you call the marketing and sales funnel is all in the value domain value proposal value selling in what value is is the promise of impact it is not the same as impact it is the promise of impact on the right side we are there in order to deliver down that promise this is the impact domain that's why the left and the right is different both sides work very differently that means that if I use a salesperson from the right side and I start applying it to up selling cross selling on the right side that has a high likelihood of not working you're essentially cost model wise you're already doing it wrong because you're picking a person a value domain expert that you're paying a premium price for and you're applying that to the impact based uh uh domain these things won't work similarly you can't expect somebody on the right side to start selling on the left side different thing down here the success rate is often measured in 10% 12% 15% 18% down here or renew should have a success rate of 96 97% two different ball games okay they work differently with each other impact is the realization of value value is the impact to give you an idea down here it's all about going faster down here it's all about keeping the customer longer faster on the left longer on the right keep that in mind two different domains so the bow tie all it does it simply says hey we have awareness education and selection on the left and we're now going to extend that on the right with onboarding adoption and expansion all familiar with it this is not a major new thing we're just mapping that kaket notice there is one major change this change is a fundamental change in thinking the middle of it it's considered a mutual commit it's not a close not an end it's not a win it's a mutual commit why because both parties need to commit to something what do they commit to impact that's what they commit to I commit if I buy your product then you're committing to me that you can deliver and solve all my problem what is that problem that's the impact you're going to deliver you're going to solve my problem that Mutual commit okay that is this simple thing allows us to understand that that when we achieve that recurring Revenue we're going to get that recurring impact and the problem down here is this that the bow tie that the marketing and sales funnel ends where the bow tie where recurring Revenue starts that is the the fundamental challenge that we're trying to solve and as a result what we see is because we're not working off that that standard impact base we are working all over the map you know we see that the the the journey that everybody's on has been very different all these departments have historically worked very much inside silos right and these silos have their data metrics at the outcome and think about the following do you think that when when you're getting a a 30 40 $50 million funding round do you think that the silos in your companies are getting bigger or smaller most cases they getting a lot bigger your marketing department is going to get a lot more on an island and your customer success Department everybody with that additional funding is only building those foms bigger and bigger and bigger and so in the end what we see down here is different departments run different methods and different methodologies um your SMB team in Europe may run on Challenger or on they would probably run on on solution selling or something like that where your Enterprise team in in the US works works of Challenger or something like that like you got two methodologies talking two different languages needing two different kinds of content and using different metrics it's a different approach this is the reason why if we approach GTM we're approaching it the wrong way we get metrics from an ABM campaign conversion rate versus an an inbound ban like all these data signals are all mixed and you know worst of all they're all going to go to the Top Line reported to a VC what is the total investment in marketing and sales calculating or CAC on on a corporate level while this is all these minute different departments that are causing this this is a problem to do that to align that going to Simply say it's impact step number one that we need to agree to the common language that we're going to work off is impact every Department every part of the organization needs to be aligned along establishing impact delivering impacts getting to first impact have the customer Buy on the impact that we promise AKA value priority can we help the customer on impact all the way to the ICP defining what is the impact that we provide for this ICP okay I'm going to give you one very a critical simple thing I assume that 99% of all of you can record the calls and have your CS calls being recorded there should be no problem right no problem at all what I want you to do is the following I want you to create three questions three simple questions as CS rep is being tasked to ask a customer on impact may I ask for example so thank you very much before we wrap up today's renewal call may ask what is the impact that you got out of our product over the past year question like that three questions let your recorded calls pick that up train your AI to get the answer of that to that question summarized and sent to you every month what is the impact we deliver to our customers okay by that you're now closing the loop between What's Happening Here what are the customer buying on what are the customers renewing on what is the impact they're getting and you're feeding that back to who your icps are what you're buying on how you're pricing how you're prioritizing and stuff like that don't do that manually because a human being has an opinion will listen to the call and say no it's not really what they said this is no no no I want literally the words that they were using I want an AI system I do not need an opinion to get every month there should be at least you know what for for those of you are scale up you should at least have a couple of hundred CS call renewal calls month you get a signal every month what is the impact that the customers are getting out of this and you feed that back into the organization before we start which GTM motion works and how are we getting to the customer first listen what is the impact they're renewing on not buying on renewing on okay that gets us to the model because if I if I have now created that like overall picture I now have created normalized language I have a standardized model with the bow tie I have now closed the loop in this example I gave you now I can start measuring data he and the idea generic idea behind measuring the data is like look if we're all working off a standardized model but we're not working off a standardized model because I got my ABM campaign using very different metrics than my plg campaign than my SD AE IM inbound I like everybody's using different metrics everybody's saying different things everybody's you know pql mqa SQ right like how in the world are we going to even compare all these things good news we're going to do that by creating a standardized model this model is what everybody in the organization should like build to when you show up in a meeting and you say we're going to only talk about the marketing and sales funnel your only focus is on acquisition we know that growth in scaleup mode comes from acquisition renew retention and expansion three sources so we can talk into our our our monthly meetings about just what what the marketing and sales funnel looks like we need to see no no no what does the bow tie look like right what does the entire Journey look like that means we need these mric now look what I'm going to do see here at the bottom those are volumetric vm1 is just an abbreviation standing for volumetric it means I am me yeah vm1 which most likely is prospects vm2 we can start discussing what that is and vm3 these are volume metrics in between two volume metrics I got conversion metrics again nothing ridiculous nothing comp complex down here folks I'm just like conversion rate from one to another is a multiplication by an X percentage conversion rate right like like that's it and the one that you probably know very well cr4 down there and make it high that's the win rate and what you're going to see the combination of CR7 cr8 in a second that's nrr if you exclude the expansion from that CR7 grr right like like this is like you're want to see all these numbers back I just want you to know by first creating what is a standard language and then laying on top of that laying on top of that what the GTM motion is I now have an ability to start measuring and talking scientifically and making sure that I'm measuring the right thing and comparing the right thing so when I start seeing that things work I know what I'm investing in I you know like that's where I'm trying to get to now I'm going to do if I all has done yes this is this is from the book and in the book I now highlight like so what you'll see here at the top right there at the top you see the vm1 two three four five six seven eight and nine right so that's the standarded language what I lay now at the bottom I'm saying is in this case I'm going to Target accounts have a conversation I want to shorten the sales cycle I want some executive referral and grow the deal what I'm now going to do I'm going to Overlay a targeted campaign in which vm1 is targets which vm2 is marketing qualified accounts vm3 is opportunities and so on and so forth if I now compare that to for example a low touch High Velocity GTM motion I'm seeing I'm using different language I'm seeing that is based on prospects I'm using the more familiar language of mql and SQL and Sal now and Prospect to mql is based on thought leadership conversion and mql tosql is often based on email sequencing saying in touch the nurturing campaign pins and so what you'll see down here you start to see oh now I call it the win in that sector right you know like I you may call it the close you may call it the win if that GTM motion you want to call it that and standardize that on fine as long as it maps to that that vm5 that's the way now I have a standardized language VM 1 2 3 four 5 six seven eight nine and I map if you're a REV UPS person you ask your rev UPS map each GTM motion that we have whatever language the people are using map to that because now I get a standardized data M now I can start looking at metrics and see what trend lines are and these are trend lines that I'm looking at I need to know which what the trend lines are that my business is going through I need to know is my volume going up or down and I don't mean my volume going up and down overall I mean is my targeted campaign volume going up down are my pqls going up and down and so on so I need specific metrics you can't we this machine that we just ran into the ground over the past years is a finely tuned machine small changes make huge impact you have heard me about to say this before I need Trends lines on the conversion rates I need to know per GTM campaign what are we seeing down there your your this is not complex your rev up steam is capable of doing that okay so that is how we are now getting these models to work together okay questions and I'm going to see Jonathan Chris Joe mercus Mike if yours questions for the next 30 seconds a minute I'm closely looking at the chat window feel free to chat and type it in um but I'm closely looking and all of you others that are online if you have a question I'm looking for it okay and so and I'll wait for the question I'll just you know like I'll summarize a this all up that is how this data model works okay um what you'll see historically historically we've had a very departmental approach that vertical line and we're now in order to make this work we have to have a horizontal approach we have to think about okay which campaign does it come from not what did Market how many sqls did marketing generate no how much did that campaign work and how was the handoff and so on you have to think in GTM motion today there's a series of motions but you know like some of you may refer to them as the Enterprise motion or the SB motion or the plg motion stuff like that these are motions we have called them standardized one no touch low touch medium touch High touch and dedicated touch these are the ways how we think about that what are examples of VM metric from 68 that seems to too easy to use on a grr and mismeasuring the onboarding stage yes so let's go back let's go dive into the number and hone in on that one Ben okay uh fantastic ask the question so we're going to hone in on that so as we are going to and write it because the the next slide is we're going to dive into that I'm going to dive into that but before I do that the key takeaway recurring Revenue begins where the marketing in sales funnel ends that means that recurring Revenue which is the result of recurring impact is not covered by the marketing and sales funnel simply meaning we need to establish recurring impact as the language for the customer and as a result we need to create a model for that voila the bow TI this is important because there's no other company in no other person in the company who can make this decision right now beyond the CEO CEO is the only one who says where how are we going to structure this and so as many of us struggle the CEOs are still on the VC mindset which primarily is Drive generate generate uh a rapid growth at lower cost which is a fantastic but it's a very inward focused mindset it doesn't help us to get our growth going that shift is not going to happen under normal circumstances you're you're you being myself at winning my design we have the same thing we you got to battle this so the CEO is the one who who needs to understand there's two forces pulling on him the VC forces and the market forces and the market forces based on this chart are telling hey folks the lower cost option by itself is not working that's the struggle that they that that we got to point out to our leaders and of those you are leaders that's the point that you got to get to and so um that's the problem that we are running into right now and that tells us like hey this is the CEO responsibility problematic so I'm going to go into examples now what I'm going to do down here I'm going to switch so if those of you want to you can follow this at the right upper corner there's a QR code I'll make it I can make it yeah there it is oh I like that yes there oh I don't know if that works I don't think it works but QR code also type in benchs sites.com winning by Design benchs sites.com winning bydesign heck look I'm the master of my own destiny why can I not do this of course I can do this there you go okay and so what I'm going to do is I'm going to switch to my Chrome browser and in my Chrome browser where is my bat oh no I had it here here's my my bow time matx now what we're going to see here is um uh we're going to see the the bow tie and I'm you like you'll see all the metrics cr1 CR2 zooming in a little bit I know it's going to get ugly when I go but you know like you just so you know you're familiar with what we're seeing there we go okay so now if I wanted I start simple if I want to want a particular uh metric down here you can enter your metrics and you can get it currently we have 288 companies have uh supported with their metrics so I can go into cr4 in our case cr4 is Win rate I'm going to click on cr4 okay you need to so folks when you sign up it asks you to it gives you an anonymous name like like uh Happy monkey or something like that right or a busy Rhino and when it does that you get essentially the um uh you you log in you get your data so your data is anonymized but they still know what you right they know it's you so you can the future compare it let me see where's a spot where I'm in least amount of okay I'm I'm in in the way everywhere so I'm just going to undo me so what you'll see here on the right is I can now start looking at cr4 in this case was on average is is 22% in the market this is across all filters all revenue ranges all ARR growth you know rapid fast all deal sizes and uh for the years if I say it's like hey for my GTM motion Enterprise GTM motion which sells at like 60 to to sorry that's the wrong one all if I go to uh there uh a 50 if you have a 60k uh motion right and I apply that and I hit all sorry hit filter what I'm going to see is you're going to see that move and it's going to give me it's building you don't see it but I see the bar moving at the top it's analyzing data and a second will tell me oh in that range it's 20% I have entered my own data so if I want to show how I compare I can see how winning by Design fits we're at the 59th percentile of this set with 21 with 21% and so what I can I say it's like oh um if I want more of that data or if I want to to go I can see where does the data sample come from I have a histogram that shows to me where that data come from okay it is now selected at the top you know data at the top it tells me which filter I have I have by category blah blah blah so it tells me where the sample size come from okay down here I can now Benchmark myself this is a functional I need to know where I'm at now for example if I say hey uh was it was it what was the difference between 222 and prior and 2023 it's filtering it says Hey the win rate the in cr4 on average of 24 and what is it now in 2023 it is 20% the win rate has dropped on average by 4% which is what we have all experienced okay folks all what we're trying to say what I'm trying to say down here is we are now able to start slicing down in real time give you metrics so that when we're a consulting firm the number one question I not number one but one of the top questions we get is like hey how are we doing compared to our competitors what's the win rate in in Enterprise is it going down because we see a significant going down well we just published this and so you can now now important for those of you who know data here at the bottom it gives you your sample size so there's 20 84 samples which is a Rel I mean like I know you want to see 10,000 samples but folks normally people say like just give me a few samples two or three is good enough so 84 but always look at that sample size if it gets below 10 15 then I go like okay you probably have to filter way too narrow you got to open it back up a little bit because now you're getting into the uh okay now we're going to what that question was is I want to know where nrr and grr fits in okay and so what we see here is nrr is measured over the total we for those of you who know you obviously what R is it includes um renewal expansion and contraction and so it sits down here I achieve impact I grow and I expand nrr covers that grr excludes that and is in that cr6 range so if I click on that cr6 I'm going to get my grr metrix and you're going to see logically I winning by Design I didn't enter the data for that therefore it doesn't show anything so I'll in clud that but what you'll see down here at the current rate in 2023 we see that grr has gone down if I say all or if I say prior to NR I expect it to be higher oh 89% so that means that people in in in 22 also had about a 90% grr for those who reported 35 companies reported their metrics and brought in 89% now there's a couple of public companies in here so that that indicate to you this is grr right so 90% on an annual contract that's where that metric comes in again I go back to the top back to summary and I'm spoofing it and I'm I'm I'm back there if I could take a look at nrr clicking again it builds a little bit I now see that 22 and prior nrr was 115% um if I wanted to take a look at what happened in 2023 that should have come down yeah 105% so there you go so and that sample size 217 companies reported their nrr rate okay this folks is we are now standardizing and that's the idea because all of you are reporting your metrics using a standardized data model I can now start comparing and I can start creating math and and and run the you know we can now start running and calculating I can't do that if I don't have a standardized data model the number one thing that we have to work with companies it says like look you're mixing two campaigns one works and the other doesn't work but you don't know which one you have to literally go anecdotally and go like salesperson by salesp person what's working and what's not working yes you get a sample I get that and that's good that gets you going but you don't know how much more do I need how many more leads do I need how many like like it it becomes very you know like um non yeah very opinionated very sorry um correlation driven not causation driven that is what we're trying to accomplish down here and what I'm going to uh show you is how that can build like into a growth formula what you see here is how we built a growth formula in this growth formula this is a particular growth formula for a GTM motion this is what you know at winning by Design I'm going to zoom in so we can see a little bit closer this is what winning by Design our Architects do they calculate the usual metric this was a real scenario 284 leads converted at 3% these were 284 let's call them mqls converted to nine opportunities uh one got lost during qualification a win rate of 32% resulted in two and a half wins brought in on an average sales price with a discount of 23% brought in $188,000 generating $45,000 now what we are doing we're creating what we call a growth formula so what you'll see do look I now look at what happening here I'm normalizing on the commit and saying in order to get one commit I divide that 284 I divide it by 114 284 divided by two and a half gives me exactly one win right I mean that's formulaic I I don't want you to to to freak out about it all I want you to see is now I got my growth formula in order to get $118,000 $48 I need to get 114 leads converted an average 3.2% qualify 84 uh what is it 15 and a half percent out win at an average 32% give a maximum discount of 23% to generate $118,000 commit fee now I'm going to use that and this is important for those of you who are running data I am now I want you to understand this is where the market is going we are going to a fiveyear LTV ratio we cannot calculate LTV based on nrr we're going to like any other Financial Market we're going to establish what is your fiveyear LTV your three-year LTV or your seven-year but I am hor cap horiz I'm putting a cap on the horizon and say we're just going to measure what your what Your revenue is that $18,000 based on your retention and expansion numbers is generating over a fiveyear LTV $15,000 ladies and gentlemen now I'm running my cost against that I'm adding up my calcul my acquisition cost I'm adding up my retention cost I'm adding up total and I can now calculate how much profit I'm making on a 5 LTV on a 5-year LTV Horizon and know no need assumptions it's all mapped against the data model this is revenue architecture this is how we design calculate this is how bridges are built this is how uh towering skyscrapers are built this is how hospitals operate this is everything every organization works the same we need to learn how to do this and some of you are already doing large part parts of this right it's all I'm trying to say is like hey now we're putting a structure to it so we can normalize against it so that um Joe Sanchez from one company can talk to Jonathan Moss over coffee they are hanging out with each other and they can actually correlate information with each other it's not like oh you know what my ABM campaign is doing fantastic oh my gosh plg is doing so like dude you're like different solutions different markets different things different measurement we are not going to move this industry forward if we keep going and obviously all of this is fueled by Hero Stories at major events right the Hero Stories at at these corporate events which are good in part motivating you're G to be served a 100 Hero Stories and no data story okay um I'm going to stop it there and what you're going to see and what what what we're trying to do with this we're trying to create an industry Consortium we're trying to bring all this together that is not just winning by Design not just this thinking this is bench sides bench sides is doing this um we have Pavilion ISS training their teams on Revenue architecture we're rolling out the bow dive of the GTM Consortium open standardized models constantly make it open make it standardized like get everybody on it like we're not arguing uh uh that the marketing and sales funnel is is not fantastic it is fantastic we just need to expand it we're just keeping that this is where we're we're wrong with that said um me see if I had I think that that was it Sarah did I miss anything um I'd love to just add to what you just mentioned so you mentioned the GTM Consortium I want to make sure that everybody here is aware of what that is because we probably didn't cover that in detail too much yet um if you were not at uh GTM 2023 in Nashville with pavilion event um so the GTM Consortium is an independent Alliance that we've formed that's dedicated to offering this standardized approach promoting this bow tie that Joo has just been talking about um and so if you want to hear from other uh GTM leaders and revenue leaders who have actually started you know successfully implementing these models the first time that you can do that is going to be GTM consortium's first event which is um happening on November 14th I'll post the link in the chat here and we're going to send out all these all this information to everyone who's registered um but it's called Pavilion Elevate GTM event anyone can join you don't have to be a pavilion member um but there are going to be a few folks there who are presenting that day who are going to talk specifically about how they're using the bow tie and measuring these metrics and how they've used it to go their business so I think there will be some great example case studies there that will be helpful um as you sort of Embark upon this journey if you know if you're just getting started um so we'll put all the information there and uh what jock is showing here is the the landing page for the GTM Consortium so you can see who's involved and and who's contributing to that yeah and I think that what what what the key down here is that we standardize on a thing we we can't run all these factories and everybody runs their own Factory that's the reason why we have a 1% 1.7% success rate at this point in time and declining right um we need our trade like any other trade needs to start adopting to standard operating procedures and and and we are far I mean like I do not know how much worse it needs to get before we are we are hearing the the the claran call for this right like um um however I believe also and then I let you folks go that this is a fantastic moment in order to switch this the way what got us here is fantastic it was fantastic we got here now we need to move forward my main point that I want to bring up in today and Before I Let You Go is do not sustainable growth in itself AKA coste efficient growth and we they're not the same I get that I'm just talking about that the same but it's not the same they're a little bit different the cost Capital efficient growth and sustainable growth by itself is not the solution it's going to say it's going to over steer you to the wrong direction you got to have that quality mindset quality in recurring Revenue equals impact why because you deliver the recurring impact you're going to get the recurring Revenue that mindset that means that you got to establish an impact mindset where does the impact mindset come from well Marketing in sales funnel stops where recurring Revenue begins so we need to extend the marketing in sales funnel into what we call a bowai we now are Focus the company on Bai these are the three things you can do start on impact adopt the Bai across your organization get the team up to date on this get as many people as you can up to date on this we need to change this Market to a bowai from a funnel that's as simple as it get that's a really simple start with that said um and with Jonathan providing ex excellent insights um I will remain I let your folks all go and give you four minutes on your agenda back I'll remain here for another like like two minutes three minutes see if there's any question that any of you wants to get off off mute and want to ask a question but other than that this is the time for graceful accent thank you all for attending thank you very much really appreciate the book is out on whatever second week of November or something like that with that said Thank you thank you all thank you Mike thank you Mike thank you Marcus thank you Frank thank you Joe thank you Jonathan awesome