In episode four of RevOps and Hops, we go in depth with Go Nimbly’s CEO, Jason Reichl, on the topic of building a revenue operations function.
You can listen to episodes of RevOps and Hops on Apple Podcasts, Spotify, Google Podcasts, or wherever you get your podcasts. There's also a full video version below so you can pick and choose your own journey.
- Generalist vs specialist. Both impactful in their own way, but having a generalist that can do it all, will help with RevOps
- “Know what you don’t know.” Learn how to be nimble and do other things
- Centralization—when you bring all your teams together, you lose the silo syndrome
- Beat your competitors through implementing operations to get ahead
This time, we—Michael Klett of Chargify, Jason, and myself—go deep into how a beer is made. Building RevOps and building beer.
The first ingredient is malt, malted barley. It’s surprisingly edible raw, and a lot of people compare it to barley cereal. I don’t have a sense of smell, but I’m assured there's a point during the brewing process where things get funky. To create malted barley you have to let it start to germinate. That’s the very beginning of the growing process.
The next step is to take the malted barley, crush it up, and then soak it in water to create wort. It’s a lot like brewing a cup of tea. As you’re boiling your wort, it helps concentrate the flavors and removes impurities.
The next step is to add the hops. The earlier you add the hops, the more bitter the beer will become. The hops are introduced to the beer to mainly offset the sweetness, but it also acts as a preservative.
The final ingredient before you have your beer is yeast. Yeast are microorganisms that eat sugar and produce alcohol during the fermentation process.
And there you have it, the beer is built. Now, on to building RevOps.
Jason Reichl, CEO of Go Nimbly—a revenue operations consultancy that currently does $200 million in MRR—defines revenue operations as the unification of operations teams.
Unifying each team into a single role and having them focus on delivering a good customer experience, systematically eliminating the gaps through process and tools, he explains, leads to so much growth within the customer base. You’re solving problems holistically that you wouldn’t be able to solve at a lower level in an organization. To round it off, RevOps is all about delivering a personalized experience to the customer.
The Silo Syndrome is a term coined by a former Goodyear Tire employee, Phil Ensor. During the 1980s, when Goodyear had the better part of the tire market share, Ensor’s role at the tire giant was to drive to each Goodyear location and look into why certain tires were not working correctly. Ensor realized throughout his travels and visits that none of the locations worked together, they operated differently, and they were all against becoming one cohesive organization. As Ensor drove through Illinois he noticed a corn silo towering above the vast farm land, hence the term Silo Syndrome.
As an organization grows and scales, it becomes specialized and people begin to work against one another, communication is hindered, and they lose track of the greater goal. This is all too prevalent in today’s SaaS organizations.
How does RevOps improve efficiency?
Revenue operations teams are pulling in 36% revenue, according to Jason. But we have to ask, where is that coming from and what is causing it? Jason explains that revenue operations is made up of three distinct parts.
The first is moving all the different operations team members into their own, operations-specific organization and aligning their goals.
The second is creating a generalist who can respond to the business demand that’s happening within your revenue team. This requires a different look at who and how you hire and how you train, because this person is completely specific to RevOps.
The third is using some sort of analytics, which is measuring a pipeline that includes volume, value, velocity, and conversion.
Once you’re able to do that you’ll be able to find where you’re lacking as a business against other businesses. From there, you can prioritize the operational projects—not on what people say you need to do, but what actually needs to be done to advance the company.
For Jason, RevOps is a methodology more than anything else, “You can be in a traditional operations role and apply this mindset to start thinking differently, and it will help you achieve that 36% RevOps revenue.”
How do you implement RevOps?
Jason believes your business should be broken down into two parts. Traditionally a SaaS company has a product team that includes your developers and business operations teams. This group of people is driven by growth or margin depending on what stage they are at as a SaaS company. The other side of the card is the revenue team, the frontline actors, those that connect with the customers. They are driven by revenue. These two groupings are completely independent of one another with the CEO sitting in the middle, acting as a driver of the two.
Jason predicts that going forward, companies will implement a CRO controlling the revenue side, and a COO controlling the operations side. He believes there isn’t really a need for more C-title positions. These two roles are essentially product managers for that part of the business. A lot of what Jason does at Go Nimbly is implement this methodology at other organizations.
How Go Nimbly does it
Jason explains that his team at Go Nimbly will begin by doing an analysis of an organization's operations team, as well as a skill gap analysis, so they can pinpoint what they are missing. A lot of organizations hire due to reactive pain: They have a problem to solve at that time, so their initial reaction is to put someone in place to solve that problem.
Unfortunately when it comes to a specialist, they will always prioritize what they can do. So what happens after the problem is fixed? Someone in a RevOps-specific role should be a generalist and be able to have a larger, multifaceted bandwidth so they can work with multiple revenue specific teams.
Go Nimbly collects all of its customers’ data, and for them it’s about inflection points. And those numbers change depending on the inflection point. Ultimately, it is taking a group of like-SaaS companies and comparing them to one another. “At this point in revenue operations, I like to say it is correlation, not causation, but just having that mindset that operations is an art, married with a little math and science.”
Generalists are more effective than specialists
As someone who prides himself on being a RevOps specialist, Jason believes that generalists get more done than specialists. He has worked with a plethora of companies and CEOs who in their early beginnings had employees who got things done because they were generalists.
“Nothing irritates me more than when I go into a company and the marketing team says they are hitting their MQL targets, but the business itself is not where it should be.”
The goal is to put momentum KPIs in place for each team to move the needle and convert to revenue.
What makes a great CRO?
We are all aware that the CRO position has grown at an exponential rate. (It’s incredibly prevalent on LinkedIn.) But it’s the most critical non-tapped revenue source in an organization that is being let go to waste.
Jason has met with CEOs that don’t measure their operations team, but are measuring everything else. There's a plan in place for sales, but nothing for operations. As previously mentioned, 36% of revenue can come from operations.
But I want to make this point: If a CRO does not have customer success and sales reporting into them, then they’re not a real CRO. (A lot of companies label their Chief Sales Officer as CRO.)
Jason finds that hiring a CRO with a marketing background is advantageous because marketing execs have that operations mentality. The question remains, though: Can they have the urgency that sales has when it comes to acquisition? How do we get them to focus on more than just MQLs and pipeline?
“The best CRO is someone who comes up through operations, spends time in a frontline role (VP sales, marketing operations).”
Go Nimbly’s ideal operations team
Go Nimbly creates revenue operations teams otherwise known as “impact teams.” They’re made up of four people to start, including a sales operations person, marketing operations person, a technical person, and finally an analytical person.
Jason picks these people to not only cover all the bases, but because people like this have failed at one point, are frustrated with their craft, and learned from their mistakes. His goal is to turn them into generalists so they can apply themselves in other areas. It’s that operations team’s diversity that makes them so nimble.
A product background sets a path for operations
Jason, who has always worked in tech, helped grow a Salesforce system integrations (SI) company from 20 to 1,000 employees before he found himself in product. While working at two product companies he realized they didn’t know how to maximize the value of their customer. This was all prior to the term “revenue operations” being coined. A light bulb went off in his head; Something had to be done to help streamline and acquire revenue.
Today, as he leads Go Nimbly, Jason benefits from his product background because it allows him to create operational roadmaps and approach the operations side methodically, all while using analytics tools to get ahead. The larger plan is to build software that’s specific to revenue operations companies, design trainings for companies who want to perform RevOps themselves, and act as a strategic service that provides hands-on help to organizations in need.
“The only thing that maximizes LTV is revenue operations.” It’s the all-too-familiar point Jason makes to clients (and anyone who will listen). At the end of the day, your marketer, your sales rep, and your customer success rep aren’t thinking that way.
What’s leading the adoption of RevOps?
The average age of a founder used to hover around 25. (That’s super young.) Today, a tech founder’s average age is 31. It’s obviously reflected in the maturity of choices these founders are showing, as well the emergence of revenue operations. “It doesn’t feel good to keep showing up and saying, “Yeah, our growth numbers are insane but our annual contract is $5k.” Ideally you want to have a far higher ACV if your CAC is high. Comparing the two will let you know how long it takes to pay back the cost of acquiring a customer.
Go Nimbly’s go-to market
Jason believes there’s over 800 organizations that could use Go Nimbly. Their monthly contract value is around $25k, and he also explains that his target customer size is a company who has raised its series C with a value around $60 million—but that number is growing everyday.