Everything changes at $20k MRR

There are many revenue stalls that happen when growing your startup.

The first obvious one is just getting a handful a paying customers.

After that you’re playing the sell>build>sell loop with those handful of customers to really figure out what product you’re building. You’ll get a few more along the way.

Most of these probably came from warm intros in your network. That’s totally fine, keep doing that for as long as you can. You’re building a business here, and every customer and dollar counts.

But right around the $20k MRR mark is where you really hit a wall. And that wall is hard to bust through. Sometimes this wall will last months.

Before I joined LevelJump Software (2017), we were at that wall. $20k MRR for about 9 months. No budging. Couldn’t move past it.

Then we did a handful of things that took us from $20k MRR to $150k MRR in 16 months.

It wasn’t rocket science. It wasn’t anything sexy. The product didn’t really change that much.

Just the focus.

In this newsletter, we’ll go through how to bust through this first plateau of $20k MRR so you can consistently grow towards $200k MRR.

Let’s dive in.

Table of Contents

• Positioning matters now

• Finding your voice

• Staying consistent

• There’s no magic in this

Positioning matters now

In the very early days, positioning is pretty wishy washy. You’ll have assumptions around your positioning, but you don’t really have customers yet to prove that it’s right. So it changes very often.

When you’re at $20k MRR, your positioning should be very clear. Without it, you won’t grow a whole lot.

And the good news is you have a bunch of customers. And you should be looking at those customers very closely to understand your positioning.

At LevelJump, we were stuck at $20k MRR because we were an everything software. Which made our messaging, outreach, inbound, marketing, sales story, etc, generic.

When you’re everything, you’re nothing. That’s the reality of SaaS Sales.

Prospects need something to compare you against. They need a frame of reference so they know how to evaluate you. Without this, they’re confused. And a confused prospect never buys.

So this is where you start outlining your best customers. And you take a clear look at their main use case. Because there will be many at first. But a pattern will emerge amongst your best customers (the ones who bought at full price, pay you on time, use the product well, are pleasant to deal with, low burden on support, helpful product suggestions).

What use case do they have? And what they did use before you?

At LevelJump, we realized that the first program people built on the platform was their sales onboarding program for new hires. It wasn’t ongoing training, it wasn’t practice, it wasn’t promotion pathing, it wasn’t leveling up existing sellers.

95% of our customers pulled the buying trigger because they were onboarding lots of new sales reps, and couldn’t effectively measure the impact of their training against ramp time.

Now, when I spotted this and told this to the CEO/Founder, he went to battle. “But we’re not an onboarding software, we’re so much more!!!” But reality was that our best customers used us as an onboarding software first. That was the entry point. And for us to bust through that $20k MRR plateau, we had to find more prospects who had that same entry point.

So after a long battle, he relented. We tried positioning around onboarding sales reps as the main use case. Spread that messaging across our website, events, email outreach, sales pitch, demo, etc. We targeted companies who were hiring sales reps. We targeted sales enablement managers, who usually owned sales onboarding.

And in 90 days, we were at $35k MRR.

Mission accomplished - plateau busted.

Finding your voice

Now we knew this was a better direction. $20k MRR in 4 years, vs $15k MRR in 3 months.

As much as we weren’t just an onboarding software, we were. And instead of fighting it, we leaned into it. And it made everything easier.

Because now we had focus. And the goal was to figure out what’s repeatable.

We could find sales teams who used salesforce pretty easily. We could see whether or not they were hiring in sales. We could see if they recently hired in sales, and what their sales team growth rate was. We could see through press releases or funding announcements if they planned to invest more in sales. We could tell by their team structure if they had RevOps and Sales Enablement they believed in supporting sales.

This became so clear, so fast.

Our outreach became super tight. We’d reach out to the VP Sales and name drop their 2 most recent sales hires and ask them how they were ramping. Then highlight the problem we’d often see with sales onboarding programs, where they fell flat, and what kind of negative consequence that had. We’d talk about our unique differentiator and why it mattered, and would book meetings off of this. It was super personalized, pain-focused, and different than what everyone else was saying at the time.

So this is what we did to really lean into this:

• We created a sales narrative with a strong point of view. We were built on top of Salesforce, while all of our competitors were basically fancy video training software that was stand alone. So we had a technical moat where we could correlate onboarding programs to revenue metrics, and automate the completion of milestones based on what was done inside the CRM. Nobody else could do this, because they were not native inside of Salesforce. So we created a POV around why this mattered, and why it was the only way to really get better at creating sales onboarding programs. While everyone else was showing you view times on video lessons, we were showing you time to first deal for your new hire, based on the sequence of information they went through onboarding. This changed the game completely.

• This point of view infiltrated everything we did. We became an opinionated software company. Our product roadmap changed to deepen this point of view. Our pricing was more expensive than competitors because of this point of view. Our website highlighted this. Our events highlighted this. We ran a monthly webinar series with topics that would enforce this. We did youtube videos giving away free frameworks to help prospects figure this out. We created thought leadership blog content that pushed this narrative. Marketing happened daily.

• Our outreach matched this. We used this same narrative and point of view in our targeting and messaging. We used this in our emails, calls, linkedin. Inbound leads, outbound leads, they all got this consistent POV.

• Our discovery changed. Our crutch deck opened up the conversation with a polarizing insight that supported this point of view. Our line of questioning supported this. Our pitch anchored this POV in our prospect’s brains. So when they’d get to the demo, they were primed. And when we showed them how this was done, they couldn’t unsee it anymore. Nothing else really compared.

That POV infiltrated everything.

That got us from $35k MRR to $50k MRR in another 90 days.

Staying consistent

After this, it was really about building up discipline and staying consistent.

Marketing happened every day. Blog posts, social media posts, webinar invites, email campaigns, events, ads, etc. There was something intentional happening every single day, all backing up our POV.

Prospecting happened every hour. It wasn’t sporadic. We were all reaching out to leads every hour. I was a Marketing Manager at the time, and I was reaching out. Our CEO was reaching out. Our VP Product was reaching out. Every. Single. Person. We all reached out. We all did prospecting. We all did sales. This was not optional. We were constantly talking to prospects.

The only thing left to do at this point was to really dial in our sales process. We experimented with number of calls, what to include in those calls, how to do discovery, how to demo, how to follow-up, how to negotiate.

This again, was everyone’s responsibilities. As a marketing manager, I was spending half my days on discovery and demo calls. Our CEO was spending 75% of their time selling, the rest working on strategic partnerships and funding. Our VP Product/CTO (same person) was spending 20% of their time managing our devs, 50% of their time on customer calls helping with onboarding, implementation, getting product feedback, etc (basically acting as a CSM the majority of the time) and the rest of their time on sales calls.

We spent an INSANE amount of time crafting our demo. We were competing against companies with 50-250 employees, while we were 3. They had backing, way more customers, way more funding, way more runway. There was NO WAY IN HELL we’d win any deals against them without mastering our craft.

We iterated on the demo - carefully crafted every screen, every mouse movement, every click, every line in our script. We tweaked and tested after every call. We listened to our Gong recordings. We pointed our every mistake, every flaw, and knocked those out. We entered demo competitions at every event we sponsored. And we won EVERY SINGLE ONE OF THEM. We were invited to do Demo Jam at Dreamforce in 2018. We won for our category (sales) against companies like Aircall (who were so much bigger and more well known than us). Then we went and won the Mega Demo Jam against every single other category of demos.

Us. A tiny little startup. That was still figuring things out.

But that relentless focus, that strong point of view, and our maniacal obsession with improving every little bit of sales and marketing every single day paid off.

A year and a half after I started there, we had gone from $20k MRR to $1.8M ARR. We had massive logos using us, we had won competitive deals against all our major competitors. We didn’t take a lick of funding during this time.

And a few years later, the company was acquired by Salesforce.

There’s no magic in this

There’s nothing sexy about this. There’s no magic bullet. It’s just relentless focus and consistency.

An obsession over making progress. That’s really all it took.

Everyone in the company wanted it to be a massive success. So everyone had ideas for marketing. We became creative not because it was innate, but because we had focus and a desire to do well. Everyone sold, even as we hired - SDRs, CSMs, engineers. We were all participating in call blitzes/power hours. We all went to conferences and worked the booth. We all hopped on demos. It was our collective job to figure it out.

But the person who was the most dedicated to this was our Founder and CEO, David Bloom. Every waking moment was dedicated to figuring out how the company made money. Sales was the job.

That’s how we made it. That’s how every founder makes it, eventually.

So if you’re stuck at that nasty plateau, around $20k MRR, there’s no silver bullet that will get you there.

Just the blueprint that every successful startup goes through, eventually. Once they realize that they can’t really wing their way to multi-million ARR. Never happened, never will.

Gong went from $200k ARR to $200M ARR in the same way. Do some research on them. Just a strong narrative and POV, distributed everywhere, consistent throughout product + marketing + sales.

It’s really up to you when you hit this inflection point. Do the hard things, consistently, over time to get past this plateau. Or just hope that it fixes itself.

Spoiler alert, it never fixes itself.

Let me know what you think of the newsletter! Always want to cover topics that you care about.

For more practical early-stage sales tips, connect with me on LinkedIn.

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