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Jim Kolchin's avatar

Excellent article @DavidSacks, you wrote: after 12 months, the account becomes a renewal and mentioned a lower commission, what is new commission?

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Obbe Knoop's avatar

Great article David, this is exactly how I setup my top performing "high growth" sales teams (model will be different for margin expansion sales versus a high Growth focus)!

Quick addition; I usually like to keep sales quota's for each AE in the same role at the same quota level (for example; each Senior AE has a quota of $1M, no matter where they are in the world). I adjust the territories to match the quota's. Reason for this is to create a "quota standard" and avoid internal discussions on quota's not been allocated fairly (sellers talk and share info).

In my experience the biggest pain with High Growth Sales organizations is usually caused by how commissions are paid; Are sellers paid on "Signings" (When the contract gets signed by the customers) or on the $ that are collected by the company in that year. For example; When a AE sells a 3 year, non-cancelable contract worth $300K ($100k/year, paid yearly), do you pay the AE 10% on the $300K ($30K) or do you pay them 10% of the yearly amount (10% x $100K) each year (10% in year one, 10% in year 2, etc.)? This problem usually occurs during the second stage of a start-up (Series B and beyond), when startup's start to focus on company profits / margin improvements. In my view, not paying AE's on the full contract amount at signing will kill the high growth culture of a company. Love to get your perspective on this David!

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