Unpacking 5 of Atlassian’s Most Unconventional Company-Building Moves

There are plenty of young, flashy startups that seem to be overnight successes, bursting onto the scene, grabbing headlines and growing at a break-neck pace — 

 isn’t one of those stories. The company has been humming along for 18 years, quietly shifting the ground underneath traditional tech companies.

 was in the center of the action. He joined Atlassian back in 2008, and under his long tenure as president, the company grew from $20 million in AAR to about $2 billion today. Now, as a partner at 

, he’s got plenty of stories to tell about the unconventional moves that positioned Atlassian to become a global leader, with a suite of software collaboration tools like Jira, Confluence and Trello.

Most have heard about Atlassian’s storied lack of a traditional sales force. But in our conversation with Simons, we found that this wasn’t the only outlier in the company’s story. If you turn over any stone on their path to scale, you’ll likely uncover something that bucks a trend. Whether it’s the company’s genesis in Australia — far outside of Silicon Valley’s center of gravity — or the unusual dual-CEO leadership structure, or a second product launch in just their second year — it’s a growth story that doesn’t get nearly enough of the spotlight it deserves.

“It was really rare for us to just do something that works somewhere else. 

We always began culturally with the question around, ‘Why is it done that way?

’ I want to understand it first and maybe there’s room for not just incremental innovation, but real invention that can make a big difference for us,” says Simons.

Constant willingness to reinvent the wheel takes a shit ton of courage and energy. It’s way easier to just rip the page out of the playbook and follow the script.

 and sidestep conventional wisdom, and Simons is game to get deep in the weeds to unpack each of these atypical moves. In this exclusive interview, he gets incredibly tactical about each leg of Atlassian’s three-pronged stool: the self-service funnel, a global network of channel partners, and enterprise upselling. He also dives into why the company relied on product-led growth before anyone coined the phrase, his theory on why HipChat lost to Slack, and the flywheels that fuel and reinforce the company’s up-and-to-the-right growth. There’s plenty of spot-on advice for go-to-market and revenue leaders, but also lessons for any company-builder on architecting a product and culture that’s rooted in first-principles thinking.

UNCONVENTIONAL MOVE #1: BUILD ON THE BACKBONE OF PRODUCT-LED GROWTH.

In any conversation with Atlassian insiders, you’ll likely hear one word over and over again: flywheel. “We gravitated to that metaphor early on because a flywheel is a big, heavy device that takes lots of energy to spin. You typically can’t get it to accelerate fast because it takes so much to push it. But once you get it going, it’s going to move at a consistent pace, and there’s small things you can add to move it a bit faster,” says Simons. “Conversely, it’s hard to stop a flywheel — you can’t just grab onto it and bring it to a halt. That feeds into what we’ve always tried to architect for, which is the durability of the business as a whole.”

For Atlassian, the core ingredient in the flywheel is product-led growth, an ethos that predates Simons. “Even before I got there, the company’s earliest mission is characterized as building remarkable products. They were really intentional with the word ‘remarkable’ because they thought, ‘We want to build a product that compels people to remark upon it,’” he says. “Atlassian believed that we’d built a product that was easy to use and that people loved, and that was going to add to the megaphone of getting the word out about who we are and what we do.”

A lot of companies worry about how to sell a product before they build a product that can sell itself.

But a lovable product alone isn’t enough to crack into a crowded landscape. Atlassian deployed a trio of tactics to smooth out some of the potholes customers often step into:

“The product and the business model are really married together, and that’s what we got right,” says Simons.

, and architected everything around that self-service model. “First you have to build a great product that people can discover on their own, begin to use on their own, onboard effectively on their own. If you can’t do those things, it’s not going to work,” he says.

So rather than pointing prospects to a traditional “contact us” form and a pitch from a salesperson, Atlassian prioritized an intuitive onboarding process that didn’t need a ton of explaining. In the present day, bottoms-up SaaS gets plenty of attention, but back in 2002 when launching Jira, Atlassian got its fair share of sideways looks. “We were early adopters of AdWords, and wanted to meet the customers at the point where they were looking for something to solve a problem. That was something that IBM or our free and open source competitors weren’t really doing,” he says.

Beyond grabbing eyeballs, there were several other bumps the company needed to smooth along a prospect’s path. “We wanted to have the product guide the customer through in the same way that a human being would if they’re sitting right alongside the customer. That meant making it easy for them to transact online and buy the product. We needed a price point that didn’t require a lot of explaining or convincing,” says Simons.

Now, Atlassian has a tiered pricing structure which includes a free version, a standard version, a premium version, and an enterprise version. But that wasn’t the case in the earliest days. “At the time, we were so focused on reducing the cognitive load on the customer that was coming to us. And if you have four different versions at four different price points, that’s very difficult to help the customer wade through,” he says. Instead, Atlassian landed on a single price point for the product, at just above free. But that meant reducing the overhead on distribution to stay out of the red.

Scaling up with a different kind of sales force.

Rather than an army of salespeople, the company invested in what it called product advocates. “We would say to every customer, ‘Let us know how we can help.’ Our product advocates were absolutely focused on the success of the customer and they were there to remove whatever potholes the customer might step into. They’d answer a question on product capability, or competitive alternatives, or pricing, but with a great answer, they would then send the customer back into the self-service path,” he says.

The one-to-many commerce engine and emphasis on self-service meant the company’s human capital was much more cost-effective, leaving plenty of green space for scaling up.

Once you go down the track of scaling with manpower, it’s very difficult to say, “Woah, we could actually fix all these things in the product, and then we wouldn’t need as many people.” Once your train is set in motion, it’s difficult to jump to a different set of tracks.

“Atlassian now has probably close to 5,000 employees and, relative to most enterprise software companies of that size, it has a fraction of the number of quota carriers because of that flywheel approach,” says Simons.

The company thought of this self-service funnel as a product in itself, and constantly tinkered with opportunities to optimize. “If somebody went through an evaluation of the product and said, ‘No, I’m not going to buy it,’ we would spend a bunch of time understanding what the headaches were that convinced you to go somewhere else, and look for patterns that we could smooth out,” he says.

The business model ends up becoming the business. It’s equally important as the market you’re going after and the product that you build.

UNCONVENTIONAL MOVE #2: LAUNCH A SECOND PRODUCT INCREDIBLY EARLY AND LEARN WHEN TO LET GO.

, in Atlassian’s second year, which is really unusual — especially when you’ve got a breakout product like Jira that’s growing really nicely. Conventional company-building wisdom would say not to do it — there’s still a ton of work you need to do on the first product, and it will fragment your focus once you start working on a second thing, which could be a death sentence for a young company,” says Simons.

Not only did Confluence become a cornerstone of Atlassian’s product suite, but Simons also spots plenty of less-tangible uspides. “We began to build this muscle around how you think about cross-merchandising, cross-selling, and upselling. 

 and packaging around multiple things? How do you do product planning and prioritization and budgeting and staffing?”

At a really early age at Atlassian we began to wire our brain to think about all of those things that companies need to do as they get bigger.

That’s not to say the decision to add new products is always unanimous. “There’s lots of debate and planning and thinking that goes into the trade-offs. When you’ve got a business that you’re running and there’s lots of things you need to do for existing customers, starting something new does draw away from that. It’s got a zero sum,” he says. “It all begins with listening to the market and listening to the customer, and paying attention internally at the itches that we’ve had to scratch for ourselves, and whether or not we think those are transferable to hundreds of thousands of customers.”

Every time you create something new, it’s going to take away from something that’s already here that also needs more coal in the furnace.

“Turning over all the different products Atlassian has introduced or the acquisitions we’ve done, each one of them involves a different set of debates and agreeing to disagree or disagreeing and committing,” says Simons.

While launching a second product in your company’s relative infancy has its own thicket of traps to avoid, there’s a whole new set of challenges to contend with as the company grows. “It’s harder as you get bigger too, because the product you add actually needs to be bigger. For a company like Atlassian that has individual products that are hundreds of millions of ARR, a new thing that you add has got to grow pretty quickly, and it’s got to have a big market it can grow into,” he says.

The sting of losing to a young upstart: HipChat vs. Slack.

But Atlassian has been on the other side of the table too, and got beat by a competitor with a singular, laser focus. “HipChat was a growing product and used by lots of companies, but at the time the market was still pretty nascent. 

 before the market was ripening to what those technologies could do, and then did everything right.”

“History is painted with some examples like this one where you’ve got Slack just ruthlessly focused on one particular thing and moving forward and moving faster and innovating, while we were trying to do a number of things simultaneously,” says Simons.

Atlassian eventually announced in 2018 that they would divest 

. “It’s hard for companies to admit that something’s not going the way that you want it to and open up a really honest conversation with both the market and its customers. 

It’s easier for companies to just keep chugging along, add a couple features, and mostly just ignore it

One of Atlassian’s values is “Don’t f*ck the customer.” We felt that not being honest about our feelings that we can’t win the category in the long run with HipChat and give it our full attention was going against those values.

Simons now calls himself a cheerleader for Slack, and is proud that the Atlassian team made the gutsy call. “There’s an opportunity cost to not divesting, and it means less focus on the opportunities where we feel like we’ve got a better shot at winning outright,” he says.

UNCONVENTIONAL MOVE #3: HAND OVER THE REIGNS TO CHANNEL PARTNERS.

When it came to building up their enterprise customer base, once again Atlassian resisted the urge to pull from others’ playbooks. “When Atlassian was really young, we would come across customers in the enterprise and they’d say, ‘I’m comparing you to IBM Rational and IBM is sending in a whole demo team and doing a dog and pony show, I want Atlassian to do the same thing.’ We chose not to invest in that directly,” says Simons. “Instead, we thought it was the perfect opportunity to build a channel partnership ecosystem, because if we wanted to make a push for the enterprise, those big companies were going to need some hand holding.”

 can seem like an intriguing solution to stop up some company gaps. But without clear swim lanes, the relationships can quickly turn sour. “What happens a lot of times is the direct sales motion can begin to cannibalize the opportunity for the channel partner,” he says. Simons walks us through the common traps: “It starts with, ‘Hey, it’d be great to have a company in Korea that represents us in resale.’ But then you get to a certain size, you’ve got your own people there, and they start to focus on the biggest opportunities,” he says. “The channel gets pushed down the value stack, and they go from being able to sell and support the largest companies to the medium ones, and eventually only the small ones. At that point, they’ll probably diversify to find additional products and companies to represent, and their attention is fractured, and then the channel is degraded.”

building out your own internal sales force faces plenty of its own challenges

. “If you think about building an international business, a lot of companies will say, ‘I need my first boots on the ground in Europe.’ But it’s not just boots on the ground, because you don’t just need a salesperson, you have to think about how that person is supported with marketing,” says Simons. “Eventually, there’s going to be tax implications for paying the salaries and how they’re transacting with customers locally. There’s a bunch of other stuff that comes with planting a flag in a particular country, and it can get immensely complicated.”

But the reason channel partnerships are tricky — and rarely executed well — is that giving up control is something most company leaders aren’t particularly fond of. “It’s hard to trust a third party outside of your company with the core part of your business — which is finding, selling, converting and making customers successful,” says Simons. “We had a really symbiotic relationship with the channel because we weren’t competing with them directly.”

It’s easier to hire your own salespeople and you control them and train them. It’s hard to be represented by a third party, and it requires you to do things differently.

But it’s a trade-off Atlassian was willing to make for longer-term growth. “We were focused on where we could get leverage that improves our speed and velocity and efficiency of the business. We didn't have our own sales team that was hunting for the best deals. Whenever there was a really big opportunity, we were motivated to introduce a channel partner of ours to handle the sales engagement,” he says.

It’s now a core part of the company’s marketing flywheel, and created a brand-new ecosystem, with over 400 Atlassian channel partners around the world that employ many thousands of people. “If it was just us, with a team of 100 people in Germany, that approach I believe is dwarfed by the thousands of partners in Germany that get up every day, without a business card from Atlassian, but are in essence working for Atlassian,” says Simons.

UNCONVENTIONAL MOVE #4: DEFER A PLAY FOR ENTERPRISE.

What began as a single product (Jira) with a single price has since evolved into a full product suite and a more traditional tiered pricing structure. But that simple self-service remains core to the Atlassian brand — even with its largest customers. “Still today, most new customers that Atlassian acquires come through a self-service funnel,” says Simons. “Even if you’re a Fortune 10 company, you might start with Atlassian with a team of 10 or 20 or 50 or 100. And in that particular case, you could be spending less than $1000 a month, but as you begin to grow, we’ve got the advantage of having natural network effects in our products built in, because they’re collaboration software. You might start with 10 users of Jira on a team, and as your team adds an 11th or 12th person, we naturally benefit from that expansion.”

Rather than prioritize signing big-ticket contracts with thousands of seats, in the earlier days, Atlassian leaned on lower-lift tactics. “We would focus on, through marketing and product nudges, highlighting the path for a customer to product B, or C or D. If you use Confluence or you use Jira, we want to point you at the other one, and often that’s as simple as a little pop-up or a little tip when you’ve pasted a Google Doc link into a Jira project that says, ‘It looks like you’re connecting content to your Jira project. Did you know there’s an easier way to do that? Click here,’” says Simons. “Every product in Atlassian’s portfolio is effectively a product that a customer could begin with or a product that they could expand to. I can start with Jira and expand to Confluence. I can start with Confluence and expand to Bitbucket. I can start with Bitbucket and expand to Trello.”

With the company’s “land and expand” strategy firmly in place, the company deferred any true enterprise focus, instead prioritizing something decidedly less sexy. “We were effectively rearchitecting our cloud — which serves this massive spectrum of customers from teams of two up to teams of 10,000 or more. We really needed to rebuild that so that it will be the predominant platform for Atlassian for the next 10, 20 years,” says Simons.

If it sounds like an obvious trade-off, it certainly didn’t feel that way to Simons at the time. “When you think back to 2011, 2012, most of the customers in the enterprise segment at that time were using on-prem products. So we could have said, ‘Let’s go after this enterprise opportunity and defer cloud. I think that would have been the wrong choice, but that’s a very strategic choice,” he says.

Atlassian chose to trade off faster short-term growth and opportunity for the long-term durability of the company, which is a trade that we would make every single day.

Eventually, with the long-term cloud strategy in place, the company turned to a renewed focus in enterprise, based on customer feedback. “We had lots of things that large enterprises were asking us to do. As we began to invest in them, we thought that there was a product offering here for these big, big existing customers of ours to upgrade to. Our largest customers, when they had sometimes 10,000 people running on a version of Jira, there were some things they wanted that weren’t in the product,” says Simons.

With a larger roster of enterprise customers, the timing felt right to make a play — and the bottom line reflected that impulse. “In some cases that upgrade could move them from spending hundreds of thousands of dollars a year to potentially millions of dollars a year. At that point, it really made sense for us to be a bit more proactive with those larger customers that we had material growth opportunities with,” he says.

Self-service from the smallest customers to the largest.

The company added its first Enterprise Advocate role in around 2013, and set off on the journey to finding product/market fit. “We had advocates contact those customers and begin to talk to them about the capabilities that we were looking to add and what the price points were. It was effectively a traditional sales job,” says Simons.

After months of conversations and the realization that they did have product/market fit, the company once again doubled-down on self service — even for this new, premium product tailored to the enterprise. “The thing that we did that again gives us leverage, is we said, ‘Great, we've figured out that we've actually got product/market fit at a price point that people are going to pay. Let's put it on the web so people can buy it online if they want to. And then let's incorporate automation work in the product to nudge an admin or nudge a primary sponsor of Jira towards this premium version that they could either add to their bill, or they could upgrade at an annual renewal cycle and do it on their own if they don't want to talk to anybody,” he says.

With the introduction of premium, enterprise products, the company’s original single pricing structure has since evolved to a more traditional tiered system. “Now, if you look at Atlassian today, the pricing structure has gotten more complex. It’s got a pretty common menu of free, slightly above free, standard, and then premium and enterprise,” says Simons.

It may seem counterintuitive to Atlassian’s founding principles, but Simons sees this evolution as only possible because of that unconventional beginning. “Atlassian is more established in its market with its product brand. So the additional 

 is offset by its position in the market and its brand. Customers are probably willing to spend a little bit of time learning about the Atlassian choices because they know who Atlassian is then if it were just a company they’d never heard of before,” he says.

It all goes back to those early days, when Atlassian put a premium on getting into as many companies as possible, not just the companies with the most seats. “It helped us when we were unknown and young and small because it was just so simple — 

 actually worked in our favor, where you just came to the web and it was like, Oh, Jira’s one price. I just need to think about the number of users, I don’t need to think about, ‘Does it include this? Does it get SSO and the security stuff or no, that’s in the enterprise package. Is it worth twice as much for that stuff? There are all these questions that the customer gets bogged down into thinking about and that’s friction,” he says.

Friction can be okay in the right context with the right approach, but in our particular case, we chose not to introduce it. We were just going to make it simple. We're going to go for high velocity volume customer acquisition, and we're going to reserve future opportunity to have those expansion conversations with those customers.

As Atlassian’s footprint grew, the tiers began falling into place. “By the time we decided to consider expanding our product tiers, guess what? They’re already hooked. They’re already deeply committed. They love the product, and it’s used by thousands of users. Now they just want some extra security features and if we want to charge them for it, it’s probably easier,” says Simons.

“I’m not recommending that every company follow this playbook, but I do think the ‘keep it simple’ strategy benefited a lot of other things we were investing around. It really gave us the freedom to establish a system that we were able to build and improve over time,” he says.

UNCONVENTIONAL MOVE #5: PUT A PREMIUM ON FIRST-PRINCIPLES CULTURE.

Perhaps nothing demonstrates Atlassian’s commitment to going about things its own way like the S-1 filing. “The cover photo of our IPO filing document had a picture of one of the Dr. Seuss characters with a quote from him that said, ‘You’ve got to be odd to be number one.’ We wanted to signify that we’re different and unconventional, and those things are virtuous for what we’re trying to accomplish,” says Simons.

In the company’s earliest days, leadership honed in on three main buckets to focus on innovating: business, product and culture. “Those were the biggest places where we invested in first principle thinking and these were the most foundational elements of the business that we’re all building to outlast us. So it really matters that we take our time to think about them and not just rip a page out of the playbook and follow a script,” says Simons.

unconventional approach to performance reviews

 to something as simple as the dreaded quarterly employee survey, leadership was wired to look for levers to try adjusting. “

Not all of the approaches worked, but what’s important is we tried to do things differently. When they work, those differences matter a lot.

 When they didn’t work, you can always just go back to the way that 90% of the companies do performance reviews,” he says. “I’m proud that we weren’t dogmatic about it. We were just super curious and thoughtful about how we can make different things work.”

To put a finer point on it, one example from early on in Atlassian’s journey was the team decided to refuse any pricing or terms and conditions negotiations. “If there was a customer that said, ‘Listen, I need to negotiate my warranty or my indemnity clause or my payment terms,’ 

we basically just said no — and it’s hard to say no to someone that wants to give you money

. But we basically said ‘We’re not paying for people to do that with you because we’re charging you so little for the product. We pass on those savings of not having lawyers or salespeople negotiating your discount and give you cheaper software. If it’s really important for you to negotiate your indemnity clause, probably one of our competitors will do that, but they’re going to charge you 10 times as much.’” Eventually, the company nabbed its first 50,000 customers without a single modified ULA, and was an eight-year-old business before hiring its first lawyer.

I always remind people that there’s no business where you get 100% of the customers. You’re going to lose some for various reasons. We were comfortable early on losing customers that wanted different things than what we were going to offer.

Some company-builders may hear that story and cringe, but Simons is more than happy to keep taking the road less traveled. “There’s an argument that says, ‘Think about the money that you left on the table,’ and that the customers that walked away were probably the big ones,” he says. “But in the long run I think Atlassian was better off when you think about the efficiency and velocity of how the business operates now.”

When we were at $20 million ARR people would look at us and say, “it’s cute that you guys do it that way, but there’s no way you get to $50 million without doing the thing that every company has done before you.” Then the benchmark became $100 million and then $500 million, and finally $1 billion.

This article is a lightly-edited summary of the key takeaways from Jay Simons’s appearance on our new podcast, “In Depth.” If you haven’t listened to our show yet, be sure to check it out

Cover image by Getty Images / Paper Boat Creative.

After a 12-year run at Atlassian, Jay Simons digs into how the company's story runs contrary to conventional startup wisdom, unpacking their product-led growth flywheel, reliance on channel partners, strategy for launching new products, and slow-burn enterprise strategy.

After a long run as the President of Atlassian, Jay Simons details all the non-consensus moves in the company's story.

A keen attention to the numbers is a through line in 

’s career. She started out in consulting and finance, and then moved into sales operations (previously at LinkedIn and currently as the Head of Customer Success and Sales Strategy at 

). And as she shared on the Review last year, she’s put those experiences to work, advising sales teams and developing 

a disciplined, metrics-driven framework for growing sales sustainably

So it comes as no surprise then that Rhorer firmly believes sales managers have an unprecedented opportunity to lean into the numbers in order to level up as coaches for their reps. But in her experience, most are leaving that potential untapped.

Take this cautionary tale from the sales floor of a startup: A sales manager reported to the Head of Sales that one of his reports was underperforming. When the company brought in Atrium’s analytics software to help dig into the numbers, the data told a different story about the “underperforming” report. It turned out that she was diligently working her own opportunities and closing business, while others who appeared more successful were in fact beneficiaries of profitable “bluebird” deals handed down from more senior outside reps. Faced with the data, the sales manager later admitted why his concern was piqued: When he walked around the sales floor, he didn’t hear the “struggling” rep making calls, so he assumed she was falling behind.

The story underscores a deep-seated problem that Rhorer’s seen afflict startup sales teams: Managers place too much importance on coarse rules of thumb, passing observations and lagging indicators, instead of digging deeper to uncover the 

 drivers of their team’s performance. “

Many sales managers default to assessing reps based on one metric: whether or not they’re hitting their quotas. But one metric doesn’t tell the whole story — you need to unpack the 

 behind whether or not your reps are making quota, to help them do more of what’s working or figure out where things are going awry,” she says.

In other words, sales managers need to put in the legwork to offer more targeted coaching to their reps in order to end the endless churn-and-burn hiring cycle that plagues many sales teams. “

As a function, we too often present distant goal posts in the form of ambitious quotas, don’t give reps any direction on how to get there, and then put them on a PIP or fire them when they don’t reach their targets.

 That’s a fundamentally broken approach,” says Rhorer. “Sales leaders have a responsibility to proactively probe and diagnose performance issues, 

But all too often, most sales managers (especially first-timers) aren’t equipped for that challenge. “Sales is a sink or swim environment. There aren’t many coaching opportunities at most startups, and the skills that earned you a promotion up from AE don't map over to what you’ll take on as a team lead,” says Rhorer. “So many wind up just riding along on every call, thinking that’s the most effective way to help their team improve. But that limits both your wingspan and your effectiveness as a manager.”

Ride-alongs are a valuable coaching tool. But if it’s the only one in your arsenal, then things will crack as you start to scale.

To help managers get more comfortable with the “sales math” and level up as managers, Rhorer and her team at Atrium have been hosting 

 that offer a crash course in a more quantitatively-driven approach to sales management. In addition to seriously digging into the mechanics of sales math, she covers everything from structuring stellar 1:1 conversations to tips for doing PIPs the right way.

In this exclusive interview, Rhorer shares those lessons and 

gets tactical on how sales managers should be using data — not for data’s own sake, but to drive winning performance on their teams

. She outlines how to keep a steady thumb on the pulse of performance while cultivating the chops leaders need to support reps who aren’t quite there yet. Whether you’re an early-stage founder trying to diagnose where sales is going wrong, a newly promoted sales manager looking to learn the ropes or a seasoned leader with sights set on scaling sales, her advice is essential for course-correcting performance problems before they’re fatal — and investing in the habits that build high-performing sales teams. Let’s dive in.

Rhorer emphasizes that leadership is only strengthened by a sales math bootcamp. Data gives sales leaders the opportunity to become more effective and meaningful coaches to their teams. “With an eye for the data, managers can make a clear-eyed assessment of individual strengths and development areas. Then, they can use that insight to elevate the trajectory of their reps’ performance,” says Rhorer.

According to Rhorer, brushing up on their data chops helps sales leaders fulfill the three things that all managers owe to their teams:

 “Frequent feedback, grounded in data, helps strong performers prepare for success in their next role; it gives those who are struggling an opportunity to improve.”

Proactive, rather than reactive, performance management:

 “Data lets you see into the future. It gives you the ability to understand who is likely to hit or miss quota in advance, so that you can take action — and give that struggling rep an opportunity to catch up 

 you need to issue a performance improvement plan.”

Drive: The Surprising Truth About What Motivates Us

, mastery is one of the main drivers of our professional lives. Your reps want to feel accomplished in the work that they’re doing. If you’re smart with data, you can deliver feedback and performance conversations that empower your reps to attain mastery in their roles.”

Leading a sales team is about more than just checking whether reps hit their numbers. Set fair expectations — and make sure reps have a clear pathway to hitting those goals.

And data is a powerful tool to help sales leaders deliver on these responsibilities. Of course, the problem isn’t that startups 

 want to take advantage of sales data. Rhorer breaks down three challenges that often hinder companies, especially startups, from taking full advantage of the tools in their arsenal — and how even the scrappiest startup can overcome them, today:

Not having enough time to gather and review data.

 “Especially at fast-paced startups, taking a microscope to the data isn’t usually a top priority. But if you can only keep track of a handful of metrics, that’s still progress. Even limited data can tell you 

 “Some orgs gather data for the sake of gathering data, without knowing how to make sense of it. Data overload doesn’t lead anywhere productive — and it leads to a lot of wasted time and resources. These organizations need to take a more structured approach to identifying which metrics are most important, for each discipline or segment within the sales organization, to understand and take action on.”

 with strong inbound lead flow, so they don’t feel the need to worry about tracking sales metrics yet because the sales team is successful on the strength of those inbound leads. That’s a great position to be in right now — but that’s seldom a permanent state. What if those inbound leads don’t scale, and you need to add outbound later? If you haven’t been tracking metrics that whole time, you’ll quickly find yourself in stormy skies, flying blind.”

In other words, sales leaders of companies at all stages can and should be digging into the numbers — and the earlier you get started, the better.

 In the sections that follow, Rhorer gets down to brass tacks about how managers can use data to incorporate the three elements of data-driven management into their routine practices: setting targeted goals for reps, leading high-value performance check-ins, and designing proactive performance conversations and interventions that empower reports and deliver results.

DEFINE TARGETED EXPECTATIONS — AND CHART A CLEAR PATH TO SUCCESS

Data gives sales leaders a clear blueprint for how to coach individual reps. “Using data as a coaching tool is especially useful for early-stage companies that don’t have a well-developed sales enablement function,” says Rhorer.

“Because startups are strapped for resources, sales training often only covers broadly applicable topic areas. That broad training doesn’t help when an individual rep struggles with a more specific challenge,” she says. “On the other hand, if managers have a strong grasp on the data, they can use it to diagnose issues and set targeted performance goals that help reps grow over the long-term.”

For sales leaders ready to flex their data muscles, Rhorer outlines the basic steps for starting to orient your team around data:

 “Determine which metrics are most important to care about, by discipline and potentially customer segment.”

2. Create a crystal-clear reporting system.

 “Ensure that you’re capturing the data to report on those metrics in an accessible, digestible way. Build metrics reviews into an operational cadence to make sure you’re reviewing them with reps regularly.”

 “Once you’ve established a readable reporting system, those metrics need to be monitored for deviations. Who’s hitting goals? Who’s missing them? How is someone’s performance changing over time?”

 “Finally, managers should decide on a course of action to respond to the trends they’re seeing.”

Once you’ve begun spotting trends in the data, start using it to hone precise goals for your team. “If you can ground a rep’s performance goals in numbers and drivers, then expectations are as clear and objective as possible,” she says.

But it isn’t enough to simply quantify goals — the metrics you choose to focus on matter. To help managers zero in on the metrics they should monitor, Rhorer illustrates the four variables that affect her sales reps’ velocity:

“This formula points out the four levers that AEs can pull to impact bookings: Opportunities Worked, Win Rate, Average Selling Price, and Average Sales Cycle,” says Rhorer. “The levers work together to create appropriate bookings expectations according to the customer segment being sold to.”

For example, while SMB AEs close smaller details (with a lower Average Selling Price), they generally work more deals at a time (higher number of Opps Worked) because of a simpler sales process and a shorter sales cycle time, compared with enterprise AEs selling to fewer companies at higher prices.

“If one of these metrics declines, an AE needs to ‘make up’ the magnitude of that impact from one of the other drivers,” she says, “which they can only do if they understand how each one impacts their overall performance.”

When it comes to articulating goals for AEs, managers need to look 

 those four drivers. “Metrics like average cycle time and win rate are metrics that reps may not feel they have as much direct control over or a clear understanding of how to impact,” says Rhorer. Consider two goals that managers might articulate to their reps:

 You need to have a next meeting scheduled for each of your open opportunities and be in touch with at least 3 contacts at each account where you have an active opportunity.

“Goal A is the kind of goal that we more commonly see in sales — it presents this distant goalpost and doesn’t give reps any direction on how to get there,” says Rhorer. “Contrast that with Goal B, which is based on the up-funnel metrics that still positively impact win rate. The latter is far more tactical, because it’s based on skills and actions that are directly within your rep’s control.”

If an AE is struggling, it’s not enough to know 

 they can get there. Data gives AEs a detailed map of the road to improvement.

All too often, sales reps are evaluated against metrics they have limited control over. If you truly want to see your reports level up, give them goals that explicitly state what they can do to improve.

Each of the four levers that impact sales velocity have up-funnel drivers that impact them, and it’s those up-funnel metrics that managers need to train their reps toward. Rhorer expands on the four metrics that impact bookings and drills deeper into the drivers that reps can act up to improve them:

“For example, a lower win rate may be driven by single-threading deals that require multiple stakeholders, which would show up as fewer contacts engaged per account. It could also be caused by an AE struggling to communicate value or set next steps in an initial meeting, which would show up in the data as a lower ratio of follow-up meetings for each initial meeting that they take,” she says.

“There are a couple of approaches you could use to effectively set goals for these up-funnel drivers and triangulate success,” says Rhorer. For example, if you want to set a goal for the number of meetings an AE needs to have each week to be successful, you might ask these questions:

•If the sales process is being followed rigorously, what does that mean for how many meetings an AE needs per closed won deal? What does that imply for total meetings across closed won and closed lost deals in order to hit quota at a given win rate?

•How efficiently are AEs converting meetings into bookings? At the team’s average bookings per meeting, how many meetings would they need to have to hit quota?

•What are the most successful AEs doing? What would emulating their process look like?

“Asking a question in multiple ways should result in a reasonable range of what a metric ‘should’ be in order for your reps to be successful. Then, you can decide how conservative or aggressive you want to be with the targets you give your team,” says Rhorer.

Moreover, incorporating data into coaching helps managers invest in their reports’ long-term development — rather than simply burning and churning them out.

 She shares a story of a rep who was newly promoted from SDR to AE: “This rep was struggling to get from that first meeting to subsequent meetings,” she says. “It showed up in her follow-up meeting ratio and in the number of opportunities she advanced down the pipeline.”

Given the data, the SDR’s manager focused on coaching the communication skills that come to bear on that critical first call. “While it look longer for the impact of that coaching to show up in her bookings, you could see her follow-up meeting ratio and conversion rate of opportunities start to improve almost immediately,” says Rhorer.

Better to coach the employee who shows a willingness to learn than turn to external hiring, where you have less context and might even hire someone who just has a different set of improvement areas.

Of course, diagnosing performance issues using data takes practice. “It’s easiest to reverse-engineer success: 

Start with areas where you already know what the outcomes were, then work your way backwards

,” says Rhorer. Then, start to identify patterns within your organizational sales motion:

•What are the most common drivers of low win rate for your team?

•What does an attrition pattern look like when a rep starts disengaging from their role and interviewing elsewhere?

•What are the behavioral patterns of your most successful reps that you can identify in their leading indicator metrics?

“Once you start to see those patterns, then you can diagnose performance issues without needing to wait for lagging indicators like results metrics,” says Rhorer.

Rather than waiting for lagging indicators, spotting patterns in the data lets you see past the horizon of what’s immediately perceptible. It gives you the opportunity to right the course before you run aground.

Not only does drilling into precise metrics set up your reps for success — it helps managers become more focused in their coaching. “If a rep is struggling, then you’ll already know exactly and immediately where to focus your efforts,” she says.

The focused approach makes managers more efficient, too. Historically, sales managers have used ride-alongs as a primary training tool. “Don’t get me wrong, ride-alongs are useful. But sitting in on every call is only sustainable when a manager has six or fewer reps,” says Rhorer. “But if you can use data to pinpoint where your reps are struggling, then you can target your efforts. There’s no longer the need to devote so much time to broad, unfocused ride-alongs.”

A data-driven approach helps managers focus their energies and maximize the reps that they manage. “If you’re using your data effectively, you can significantly widen your managerial span. 

A seasoned, data-fluent sales manager could manage a team of eight to ten rep

s,” says Rhorer. She notes, though, that this is a team load to work up to, not a starting point for unseasoned, newly promoted managers.

The effects of more methodical coaching carry over into 

. “If you can give new reps clear, quantified guidelines for what success looks like, you can shorten their ramp time and free up more of your bandwidth,” says Rhorer.

LEAD STANDUPS AND 1:1S THAT MAXIMIZE EVERY MINUTE

In addition to more efficiently coaching reps, managers can also take advantage of data to design meetings that maximize everyone’s time. “If you orient your meetings around a set agenda that includes reviewing the relevant numbers, you’ll structure your time in a far more focused way,” she says. “On top of that, metrics reviews help to pinpoint goals and reinforce them on a daily, weekly and quarterly cadence.”

Unstructured meetings are a waste of time. Remember, time is your most precious resource as a manager — and wasted time harms yourself and your team.

Whether it’s for a daily standup, a weekly team meeting or a 1:1, Rhorer provides a prep checklist to set up metrics reviews that help managers and teams 

 for the meeting, and create an agenda that will allow you to meet that purpose. Complete the statements 

2. Craft the items on your agenda and the questions

 that need to be answered in order to successfully execute on each of those agenda items.

 and dashboards to answer those questions.

 beforehand. Come to the meeting prepared with targeted points of discussion, based on the relevant metrics.

She gives a detailed breakdown of this checklist, using an example from a manager’s most common meeting: the 1:1.

“One of the biggest problems I see in sales leadership is that, more often than not, sales managers poorly manage the time spent on their 1:1s,” says Rhorer. “Managers 

 that they want to loosen the reins because they want the rep to take ownership of the meeting. 

But how can you expect your report to maximize their 1:1 if you don’t set them up for success?

While it’s important to foster reports’ feelings of ownership, managers are ultimately accountable for making sure the meeting is as useful to their report as possible. Rhorer specifies how managers and reports ought to divide the responsibility of a 1:1 meeting: “You prep and set the agenda. Your reps fill in part of the content.”

Your reps want to succeed. Data-driven goals give them a clearly marked runway toward attaining, even exceeding, your expectations.

“First, on your own calendar, schedule a regular meeting time and a prep period before each meeting,” she says. The prep period should be dedicated to reviewing the dashboard and notes from the prior meeting. “During this time, you should be defining: What does success look like for this particular meeting?”

Rhorer gives an example of how managers might outline success metrics. Start with the statement 

•1. Manager is aware of the status of deals in a rep’s pipeline.

•2. Manager is aware of any challenges or roadblocks the rep is encountering.

•3. Rep receives targeted coaching, guidance and performance feedback.

2. Craft the agenda and related questions

“Managers should set an agenda for 1:1s with reps and work with sales ops to create a dashboard that matches up with that agenda,” says Rhorer. For example, an agenda for an AE 1:1 may involve discussing the rep’s concerns, completing a pipeline review and identifying next steps.

The questions you prepare should help you dig deeper into each of the agenda items. “During the pipeline review, you might want to ask: Which deals look like they might be going sideways? Which deals have progressed? What does the overall pipeline look like compared to peers?” says Rhorer.

Build reporting and dashboards that will help you answer the key questions you identified in your agenda. For example, for the pipeline review discussion, a manager might have built a dashboard that illustrates these metrics:

•Days between sale rep touches on open opportunities

•Opportunities advanced at least a stage

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