How do you enter a highly competitive marketplace, carve a niche for yourself, and then scale the business to $100 million+ ARR?
Sam Blond, Partner at Founders Fund, joined Matt Plank, VP of Sales at Rippling, to unlock the secrets to exponential revenue growth. We follow Rippling’s journey from $10 million ARR to hundreds of millions of ARR and the key learnings along the way.
Entering a hyper-competitive marketplace
Entering a crowded marketplace as a new business can be intimidating, especially when established players with a solid customer base surround you. Rippling entered a mature, highly competitive market, found a need gap, and worked to address it. Recognizing that no single player managed every aspect of human capital management, it sought to fill that gap. Rippling positioned itself as an all-in-one solution for employee management across HR, IT, and finance.
The first week at any SaaS startup is about doing everything you can to acquire leads. Start building a database of interested prospects and focus on quantity over quality at this stage.
Here are a few lessons from Rippling’s first week in business and what to focus on in your first week:
- Creating a talk script: Identify your competitive advantage and make that the centerpiece of your conversations with prospective clients.
- Conducting demos: Focus on getting as many people as possible to experience your product.
- Writing cold emails: Even the most successful companies started with the most basic of things, writing out cold emails to get their first few customers in the door.
Using messaging to maximize outbound efforts
Outbound is another successful growth tactic when combined with effective messaging. Use carefully crafted messaging to seek the perfect buyers (people who haven’t engaged) and bring them to you.
In their outbound efforts, when Rippling team members emailed CEOs and founders of tech companies, they communicated how their offering wasn’t just another HR solution. Instead, they focused on how it’s the one that takes away busy work beyond payroll by helping with new hires’ IT requirements, saving founders significant time.
Similarly, it’s wise to show prospects you understand their pain points and can solve more problems than the competition. Effective communication highlights a problem your customer base may still need to recognize. It then goes on to showcase how your product is a differentiated offering that can solve that problem.
“Expose the problem through questions and assumptions, and focus on the differentiation your service provides to gain prospects’ interest.”
Leveraging other initiatives and channels beyond outbound
Outbound marketing to investors and potential users is an essential growth driver, especially in the early stages of business growth. But it can soon turn into a reason for coming across as spammy.
Over time, it’s smart to identify other channels and partnerships that drive behavior and demand, as these pay long-term dividends. Brokers and accountants were two of the channels that Rippling identified would help them scale quickly, so they invested in them from early on.
Once you’ve made your picks, remember the importance of conviction in your chosen channels; they won’t work immediately. Partners won’t show up and send you massive volume on day one. You have to invest a lot of time to get a channel going, to get referrals, to acquire customers…and then work on customer satisfaction.
Scaling your go-to-market efforts
Hiring right and optimizing for efficiency are the two critical components of go-to-market motion that result in scaling up revenue.
Your first few hires will typically be from your network. As you scale, identify and hire profiles with the right skill sets for your company’s unique needs—which may mean going beyond the people you know. The key factor to look out for is the efficiency of new hires. More people in the team means more work done, but it also creates the scope for inefficiency to creep in.
For example, when Rippling started hiring more sales reps, it meant getting more leads as more emails went out. It was imperative at this stage to get more effective with emails. If writing a better email could get a two percent conversion from one percent, it opened the opportunity to do twice as many demos.
“Instead of celebrating headcount, focus on growing efficiently in scalable ways.”
Unconventional scaling ideas to accelerate growth
Once you step on the gas for growth acceleration, it’s about pursuing the most ambitious goals and building a realistic plan to achieve them. Logo acquisition (i.e., building the client base) is always a top priority, but there are a few other underrated tactics to accelerate revenue growth.
Dynamic pricing: Increase pricing periodically until you meet friction. If you don’t experience friction, your product is not priced high enough. Rippling found success with dramatic price increases. Despite operating in a space where pricing was transparent and competitors’ products were priced significantly lower, increasing pricing didn’t hurt Rippling’s win rates. As a result, the company earned 2-3 times more per customer.
“If you increase pricing by 30% and acquire the same number of customers, you’ve just increased sales by 30%.”
Outsourcing: If the economics don’t make sense by hiring sales reps in your location, consider outsourcing work overseas until the unit economics work out. Rippling built a productive and revenue-efficient sales team out of Bangalore, which helped the company save money.
Don’t forget the basics
Even in hyper-competitive niches, the confidential secrets to growing revenue are in following the basics.
- Start strong by finding one thing your competitors are missing out on that you can do better and use that lever for marketing your product.
- Develop impactful messaging to tell your product story and embed that into your outbound strategy.
- Identify and focus on alternate channels beyond outbound as well.
- Develop a laser-sharp ideal sales profile and hire for it, but don’t compromise on efficiency.