No one’s had a bigger exit in a shorter amount of time than Divvy. How did they do it? Let’s find out the go-to-market models Divvy used to go from zero to a $2.5B exit in just four years with the former CRO, Sterling Snow.
There’s this idea in rowing called swing, where the oar or paddle of each person in the boat hits the water at the same time and pulls back with the same amount of force.
Anyone out of sync means the boat veers off course. And when everyone is in perfect unison, it’s magic for a GTM leader.
The Team Matters More Than The Operating Model
Snow’s greatest piece of advice is to choose your team wisely.
He believes the team is more important than the operating model because you can have the best models in the world. But if you don’t have the underlying team and structure, it won’t work.
When people hear about Divvy’s growth, they assume Divvy must have skipped a step.
They didn’t.
Instead, the Divvy team crammed all their learnings into a very condensed time frame.
How did they do that?
By starting with a base and a belief that they wanted to do something special and then building a high-performing team capable of reaching its goals.
Key Traits Of A High-Performing Team
- Knowing that chasing ambitious goals is a fun thing.
- Extreme ownership and acting like a co-owner.
- Pursuing healthy competition within the team and ruthless competition in the market.
- Not acting like a jerk, but never tolerating less than a full effort and an excellent outcome.
- Speed is of the essence. High performers know the answer to “when to act” is now.
Key Traits High-Performing Teams Do NOT Have
- Excuses
- A culture of fear
- Disloyalty to those who aren’t present
- Fight against large goals or changes
- Entitlement
- Complaining
There is no room for “passengers” in a high-performing team. You want everyone to hold themselves accountable. Everyone is engaged and driving and pushing and moving forward.
The key traits of a team are just as important to look out for as the traits you want to avoid if you’re trying to build something quickly and well.
A great team is the foundation of it all.
Model 1: Align The Funnel — One Clear Owner Reduces Waste and Friction
As CRO at Divvy, Snow was responsible for marketing, sales, implementation, customer success, customer support, and revenue operations.
If things went wrong, there was nowhere to hide, no excuses, and no one to blame anything on except himself.
That responsibility and ownership was a powerful tool to align their funnel.
To align the funnel and reduce waste and friction, Divvy would compensate each group, from marketing to customer support, one stage below where they were actually responsible in the funnel.
For example:
- They didn’t talk with marketing about MQLs or SQLs. Instead, the conversation was about closed one new dollars.
- Sales were compensated based on new logos and what they’d do during the first 90 days of implementation.
Snow would push everyone’s accountability one step deeper into the funnel.
Automatically, the sales rep had responsibility for the next step and started selling a little differently and caring about what they didn’t care about before.
A simple change in how you measure success means:
- More alignment in the funnel
- Everyone can go a little faster.
- Everyone cares a little more about everyone else’s roles, creating one unified owner.
Model 2: Budget, Quota, Goal — The Formula To “Beat and Raise”
Many people experience the challenge of balancing needing to present a plan they can beat and exceed expectations to a board or CEO without leaving growth on the table.
How do you balance these two things?
Snow says this is a momentum game. If you can get wins, you’re going to get more wins. If you take losses, you’re going to get more losses.
The budget, quota, goal framework helps you to manage this balancing act.
Budget — the number Divvy would present to the board with an 80% chance of meeting this number, a.k.a. the “Sterling keeps his job number.” Conservatism is baked into this number.
Quota — Every rep, manager, and leader is built around the quota. It’s a step up from budget.
Goal — The go-get-’em number. The stretch. You’ll probably only achieve this a couple of times a year.
This framework of Budget, Quota, Goal allows you to “beat and raise” at a very high frequency.
Most of the time, Divvy would push themselves and land somewhere between the quota and goal and then raise their expectations.
The takeaway?
The Budget, Quota, Goal framework protects your downside so you always do what you say you will do, but also allows for upward mobility.
Model #3: Shorten The Cycle — From Quarterly To Monthly To Weekly To Daily
What Snow learned early on with Divvy was that if they took their numbers and targets from quarterly to monthly, they could save themselves a lot of heartache.
If you’re maniacally paying attention to the month and hinging your expectations on it, you will almost never have a quarterly problem.
Shortening the cycle gives you 12 chances to beat and raise during the year instead of just four.
When you focus on a four-week interval, you can raise your annual target 12 times and grow that much faster.
The takeaway here is simple yet powerful.
When you shorten the cycle and demand more of yourself with less time, you and your organization get scrappier and more creative.
Necessity is the mother of creativity, and when you put artificial constraints on yourself and your team, you can accomplish a lot more than you thought you could.
Model #4: T3/B3 — Always Know Where You Stand And What You’re Working On
T3/B3 was a helpful formula for Divvy and stands for the top three and bottom three.
Every quarter, they would sit down with every person in the organization. They had this template, and each person would list the top three superpowers someone had and coach them on how to lean into those more.
And then, they would do the same for areas of opportunity that needed some work to develop.
The trick with this formula?
You not only do it for direct reports. You have your direct reports do it for you. It’s bilateral.
Being able to have direct conversations with your team and the team with its leaders creates a healthy dynamic where everyone is supporting everyone and has an opportunity to not only work on their weaker skills but also hear what people think of their superpowers.
Knowing exactly what everyone is thinking or experiencing as a team is a win for company culture.
Model #5: Name, Number, And North Star — Zero “Glass Balls” Dropped And Always Prioritized
A phrase that circulated around Divvy all the time was, “If it doesn’t have a name next to it or a number, it’s not going to happen.”
Every single thing they cared about had to have a person responsible for it and a number attached.
Of course, this can be tricky when you’re trying to assign a number to a creative function like marketing, but it must be done.
There’s a third component: The North Star
The North Star is what everyone orients themselves around to make sure they’re prioritizing correctly.
The Divvy team often said they wanted to raise their targets and chase a goal, but they couldn’t see a great path to it.
The solution?
Bring 20 of their most capable people into a room to brainstorm ideas, and then people would put their name and number next to their initiative, their North Star.
The Takeaway —
You are constantly juggling a series of balls. Some are glass, and some are rubber. If everyone knows the North Star, you won’t drop a glass ball. You’ll understand the priorities and won’t let it hit the floor.
There’s incredible power in everyone understanding what success looks like for them in their role.
Model #6: Sell, Design, Build — Never Waste Time
Divvy learned this lesson the hard way, launching a new product or feature and being met with a lackluster result after checking all the boxes of interviewing customers and believing people would be excited about it.
Sell, Design, Build was built out of frustration and realizing their resources were precious.
How could they, as a revenue team, make sure the things they were advocating for their product and engineering partners to build were the right things?
The Sell, Design, Build Framework
When you think you have a good idea for a product or service, go out and sell it first.
Put together some duct tape version of it and sell it.
You’ll find out quickly if people will use and pay for it. And if so, how much.
Once you figure that out, you can start designing because you’ve already talked to ten people who are sold on it and using a manual version.
Selling first means you get to know the customer’s actual needs and design faster. You get a high degree of confidence in the design after feedback from those ten customers, and then you build it.
If you’re trying to get big fast, you don’t have time for missteps.
A Quick Recap
These models are all, by design, very simple. There’s no Pythagorean Theorem or rocket science to figure it out, which is precisely what makes them powerful.
They’re easy to understand, but they aren’t easy to do consistently over a long period of time.
Whether you implement one or all of these GTM models, the critical takeaway is that consistency is key.
The 6 GTM Models + The Most Important Need To Operate Successfully Recap
- The team matters more than the operating model. The best operating models in the world won’t work if you don’t have a great team to implement them.
- Align the funnel. Figure out how to have a singular owner and reduce friction. Ask yourself, “What could I do today to make marketing care more about what sales cares about or make sales care more about what implementation cares about?”
- Budget, Quota, Goal. Ensure you are protecting your business, protecting the downside, and maximizing the upside. Build a financial plan around the budget number to prevent over-hiring and overspending, and then get aggressive with your goals while protecting your culture and reputation.
- Shorten the cycle. Never drop a glass ball, and run your business on a monthly basis to give yourself 12 chances to beat and raise, correct mistakes, and have a higher growth rate.
- T3/B3. Give everyone a chance to give very valid feedback to their leaders and team and a chance to know where they stand.
- Name, Number, and North Star. If it doesn’t have someone’s name and a number, it’s not going to happen. But if it does, then you can have ultimate accountability and prioritize against the things the organization deems most important.
- Sell, Design, Build. When you have an idea, go out and sell it first. If you are successful, you can design and build something and have a level of confidence in it and snuff out bad ideas before they cost you a ton of time and money.
