How to Stop Micromanaging After $1m-$2m ARR. You Have To.

In the past, we’ve touched on several different ideas to help you scale, to do Even Better:

• Imagine capital doesn’t matter.  And see where that takes you.  More here.  And if your team knows how to spend it, correctly — find a way to get them the capital they need to grow even faster than plan.
• Add a layer.  A new edition, new services, an outbound sales team, an account management / upsell team.  Something new to boost your ACV and TCV.  More here.
• Double your pricing for new customers, on the largest deals.  At least on the big customers.  More here.

There’s one other thing I want to challenge you on.  Which is to delegate more, and micromanage less.  At least after $1m-$2m ARR or so.

And also — to understand where you can’t let it all go.  Not yet.

Here are some basic ideas and rules.  From $1m to $10m ARR or so, as you build your first management team:

• You shouldn’t be the VP of Sales Anymore As You Scale.  But — You May Still Need to be The Chief Customer (and MRR) Officer.  You need to get out of most deals, and 100% of the routine ones … and focus just on the biggest ones.  And importantly, you need to spend more time with your existing customers (vs. the prospects).  More on that here.  But even if you’ve hired the world’s best VP of Sales … you can’t opt out of sales entirely.  You can’t just walk away.  You still need to spend 15-20% of your time in sales.  At least you need to drop into key deals, as “The CEO”, as the Chief Customer Officer.  You don’t get to stop doing that ever.  More on this in a classic presentation from the CEO and VP of Sales of GuideSpark below.  The VPS gives his CEO a customer visit quota:

• You shouldn’t be the VP of Marketing Anymore.  But — You Almost Certainly Still Need to Be the CMO.  I know you don’t even know what a CMO really does.  But you still have to do this job, be this person.  Even when you hire your great VP of Marketing, and he handles all the routine demand gen, the campaigns, even your user conference (which you need to do — more on that here) … expecting true, deep strategic insight on how to position your product in the future … that’s expecting too much.  Odds are, 95%, you have to remain the CMO for a very, very long time.  You still have to figure out the strategic market position.  You still have to promote the heck out of your company.  You still have to define the future and present marketing positioning.  You still have to understand — and communicate — the competitive landscape better than anyone.  You can’t just exit “marketing” because you hired a VP of Demand Gen.  You’ll always be the most strategic thinker in where, and how, your product and market are going.
• You shouldn’t be the VP of Product Anymore.  Trust Me Here.  Instead, Hire a VP Product, Pick 2 or 3 Initiatives a Year to Spearhead — and Get Out of the Way On the Rest.  This is one where most founders don’t know where to draw the line.  Once you have a VP of Product (and you need one far earlier than you think in SaaS — more on that here) … GET OUT OF THE WAY.  By $2m, $3m, $5m ARR … your product already is likely too complex for you to define the basic features and customer needs going forward.  Instead, ideally, just become Chief Strategic Product Officer and pick 2 or 3 either Do or Die features a year, or Must Have to Win In the Future features, or both … and drive those.  But let the team figure out the rest.  They know what the customers want.  And it’s OK if they misprioritize a few items.

• Hire a VP of Finance or even a CFO Early if You Are Growing Quickly.  Outsourcing Finance Breaks Earlier Than You Think.  In the old days, a lot of folks like me would tell you not to hire a CFO too early.  Waste of money, waste of time, it’s just … too early.  But these days … the best SaaS companies are growing faster than ever.  If you are growing > 10-12% Month-over-Month past $1m in ARR, I think you need a VP of Finance, or at least a solid Director, as early as $1m ARR.  Because you’ll be so big, and so complicated, so soon.  And you must have someone with recurring revenue experience.  At least, do whatever you can to get that in the DNA of this hire.  Otherwise, everything will just be a huge mess.  Accounting for recurring revenue companies is really nothing like that of non-recurring revenue companies, especially in modeling, deferred revenue, etc.
• Get a full-time Head of People early, and ideally a Head of Recruiting.  At least by the time you are hiring 1 new employee per month.  You don’t have the time.  Nor does your team.
• Consider Hiring a VP of Engineering As Early as $3m ARR or So If You Are Growing Fast.  If you / your CTO hasn’t built a large engineering team, you may need help earlier than you think.  I know you can continue to attract epic talent.  But once you have to add an engineer a month, that’s almost a full-time job right there.  And have you really built a 99.999% availability product?  Do you know how to speak to customers about DR and HIPPA?  Do you understand intuitively how to pass Fortune 500 Security Audits?   How to scale a global tech ops team?  My only point is amazing CTOs often don’t really want to do this stuff.  So consider getting them help earlier rather than later, especially if you are truly selling into the enterprise.

In any event, delegate more.  Micromanage less.  It’s a warning sign after $2M if you are also the VP of Anything.

But you’re gonna be stuck being the CMO, CCO (Chief Customer Officer), and maybe even the CRO for a while.  That part you can’t delegate.  But get the frack out of finance, day-to-day product, and routine sales as soon as you possibly can.

(note: an updated SaaStr Classic post)