Why I keep 100% equity of SalesPlaybook (for now)
The easiest way for a founder to speed up growth while staying cash-efficient is often to give away equity to investors, co-founders or employees. But giving away equity is a bit like getting married. You’re taking a big, long-term commitment and give up flexibility to do whatever you want. I am happily married for 3.5 years for the record.
SalesPlaybook could grow annual revenue a lot faster than it did (280% 2019 -> 2020, expecting +/- 200% for 2020 -> 2021) by following the above “advice”. Funding rounds also give founders peace of mind on cash flow, nice PR buzz, valuable advisors and many more things.
I’d however like to share a few thoughts about why I after 2+ years still own 100% of SalesPlaybook and have no intention for the near future to change that.
(I’d like to believe…) It is NOT because I am a greedy, egoistic maniac that does not like to share success and collaborate with others. A few reasons are however:
Need for long-term alignment without long-term clarity
A proposal from a smart, trustworthy Sales Mastermind recently went something like this:
“I’d like to build up SalesPlaybook together with you in exchange for 10–20% equity — but can only commit for 2 years at max. 70% capacity.” I asked why only 2 years and not 2025, which is my current time horizon for SalesPlaybook. The reply was “Because I don’t know what SalesPlaybook will be in 2025 — a coaching company, a SaaS app, a matchmaking platform, or even something else!”
I 100% understand and respect that answer. The trouble is: I also don’t know what SalesPlaybook will be in 2025. Our business model changed and will continue to change based on identified customer needs and market opportunities.
Fundraising can easily consume up to 50% of a founder’s capacity over a 4–9 months period to put together fancy 3–5 year business plans and market potential analysis, investor decks & roadshows, due diligence material, company valuations and more.
This is up to 50% hard work, focus and energy having zero benefit for customers. I founded SalesPlaybook to help B2B entrepreneurs change the world for the better by being commercially successful and scaling their impact, NOT to win startup awards.
Even with 0 fundraising, giving other people equity still requires valuation, vesting, who contributes what, why is person A getting more than person B discussions and more.
No business need
We’ll hit about 175k Q1 2021 revenue at 2 FTEs. We don’t require full-time senior software engineers, UX/UI designers, product managers and “G&A” functions like HR, Legal, Finance.
We’re comfortable paying fair money for fair value and Sales Masterminds seem not to mind earning good money from working with interesting entrepreneurs at close to 0 customer acquisition costs and admin efforts.
I understand the need for ESOPs if you need to pull talent from Google, Salesforce and Tier 1 Technical universities to reach 1M annual revenue. But SalesPlaybook is consciously built not to depend on these hires to be profitable and (relatively) fast-growing.
Quo Vadis SalesPlaybook?
http://club.thesalesplaybook.io/ might become “COMATCH for Sales to match you with Top 1% sales talent within 72 hours at affordable rates without sourcing, hiring and training people yourself.”
https://platform.thesalesplaybook.io/ might become “Europe’s university to learn B2B sales anytime, anywhere, at affordable investment, with a job guarantee.”
https://talent.thesalesplaybook.io/ might spin off as an “HRTech AI SaaS Big Data” to “make Sales Talent Sourcing simpler, faster, cheaper and transparent.”
SalesPlaybook as a company might decide to crash the overpaid, under-serviced corporate sales coaching market at one point, helping professionals tackling sales with the limited resources but efficiency and hustling spirit of an entrepreneur, with the tools and methods of 2021.
I might remove myself as CEO once I feel somebody else can do a better job scaling the company than I can and start another company (guess I’m slightly unemployable by now…).
“Never say never”. I am 100% open to, besides revenue-/profit-sharing models, also part with equity of SalesPlaybook. But it would need to be worth it and make things simpler, not more complex. If you get married, do it only if the person is amazing, you’re ready and it feels 100% right.