Callan Harrington Wants You To Focus
& Healthcare Software Comps 5.12.23
I recently had the chance to sit down with Callan Harrington, to talk about his career in hypergrowth go-to-market leadership and what it’s like building a sales team for fast-growing startups. Callan is a sharp guy who is very passionate about the space, so enjoy the below dialogue.
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Focus initially, then expand: Go deep into a market segment before pursuing multiple directions to ensure traction and avoid distractions.
Avoid passing off sales too soon: Founders excel at selling their vision and are closely connected to the product and market. The early days involve crucial product feedback and sales growth, which often require a founder's involvement.
Assess growth stage gates: After reaching $1mm ARR, test unit economics for scalability. Identify whether you're in the Early Adopter or Early Majority phase to determine your readiness for scaling.
Question: Can you tell me a little about your background and story, how you got into startups and became an expert at go-to-market and sales?
Callan Harrington: I began my career as an insurance agent and financial advisor at Northwestern Mutual. This role exposed me to sales and taught me a lot. However, I believed there was a better, more modern way to approach the industry. This led me to start my own life insurance agency under the largest privately held lead provider in the country. We sold policies entirely online and recruited agents around the nation. It was the right idea, but we were too early in the market, and our cash flow was terrible.
After winding down the agency, I joined AgentCubed as their fourth employee and first go-to-market hire. We grew rapidly, and the company eventually exited to National General Insurance. Next, I joined The Shipyard, where I was responsible for enterprise sales. We developed a SaaS platform for insurance agencies, which eventually spun out into a separate entity called Smart Harbor. I went along with the spinout, and we were fortunate to scale that and exit to a private equity firm. This is where I learned about team building, what it really took build a successful company, and how to learn from your missteps.
After Smart Harbor, I joined a company called SafeChain. This was my first real test with a venture-backed company, and I learned a ton. I really learned the importance of focus. We had two sides of the business that had good traction, but we really needed to have great traction on one of those sides. When we put more energy towards one side, we’d see results, and those results would suffer when our focus was bifurcated. I then joined Bold Penguin helping the company scale and establish its go-to-market fit within the agency market. We had an excellent team and were able to successfully sell the company to American Family Insurance.
After Bold Penguin, I planned to self-fund a SaaS startup and use consulting revenue to support the business until we reached product-market fit. Ideally, around $1 Million in ARR. I ended up discovering a passion for consulting work, particularly in marketing and sales. My consulting services evolved from fractional CRO work to a focus on RevOps, project-based sales consulting, and providing revenue coaching for CEOs and revenue leaders, helping them with direction and focus across the revenue spectrum.
Overall, my career has been a series of opportunistic moves, but each experience has taught me valuable lessons and allowed me to make an impact in various companies and industries.
Q: Can you talk about the differences in skills, talent, etc., from a go-to-market perspective when a company is going from $0 - $1mm, $1mm - $10mm, and $10mm and beyond?
In the zero-to-one stage, founders should focus on initial sales, product feedback, and customer success. It's essential to have a highly adaptable individual closely connected to the product. The main goal during this stage is retention and establishing a repeatable process. Founders should concentrate on building strong relationships with early customers, ensuring high utilization and excitement about the product.
The one to ten stage involves establishing go-to-market fit. After reaching about $1 million in ARR, it's time to consider hiring a sales leader and expanding the sales team based on a repeatable sales motion. Focus on analyzing unit economics, including LTV to CAC, gross retention rate, net retention, and payback period. Determine the type of sales motion needed to achieve $10 million in ARR, whether it's enterprise or SMB sales.
Once a company surpasses $10 million in ARR, the focus shifts to pouring fuel on the fire. This stage involves transitioning from a people manager/motivator to a true Chief Revenue Officer (CRO), efficiently allocating capital to maximize return per dollar. The CRO should consider increasing headcount, while also paying attention to where they are on the technology adoption lifecycle and ensuring the market size is large enough to support further growth.
Q: That early majority point is really interesting. How do you identify that? Are there tangibles out there? Is that a gut feeling? How do you know you're in the early majority?
There are notable differences between early adopters and the early majority when it comes to adopting new technology. Early adopters seek significant gains and are willing to change their processes or accept bugs and discontinuous solutions in order to achieve them. They don't prioritize factors like price or use the same tools as larger, more established companies. One way to identify early adopters is to look for unique or niche tech being used in their CRM or management systems.
On the other hand, the early majority is pragmatic and typically seeks smaller gains (2-3%). They are less willing to change their processes to implement new technology. Unlike early adopters, the early majority needs validation from respected peers or larger companies before adopting a product. This is where case studies, testimonials, and other validation methods become crucial to attract the early majority customers.
Q: You mentioned that if you get your RevOps really dialed in, you can double your output for the same amount of effort. Can you elaborate on how that manifests itself in the real world?
RevOps plays a crucial role in streamlining revenue processes and improving forecast accuracy. For example, when implementing a tool like Salesloft, automation and workflows will decrease manual processes and by default, increase the number of calls a sales rep can make daily, while also improving conversion rates by better segmenting leads.
RevOps can also automate lead tracking. An example would be marking each lead as MQL, SQL, etc., at different stages. This allows for easier forecasting, as you can see how many leads were generated from various sources like digital marketing or the SDR team, and tie them back to the cost of each source. Without RevOps and automation, hours of manual work would be required to gather and analyze this data, making it harder to accurately forecast and optimize sales processes. RevOps creates an environment that boosts productivity and provides the necessary output for successful forecasting.
Q: So do you have a favorite RevOps tool, SaaS tool based on stage, or like a coterie of tools that you like to use depending on the stage of the company?
For early-stage companies, the free version of HubSpot is a good starting point as a CRM. While the debate between HubSpot and Salesforce often arises, it depends on the specific needs of the company. If more enterprise features and complex integrations are needed, Salesforce might be a better choice.
For sales automation software, Salesloft and Outreach are both excellent options. Conversational intelligence tools like Gong and Chorus can be valuable, but may not be necessary in the early stages due to cost. Building up marketing automation, such as HubSpot's Marketing Hub or Salesforce's Pardot, can have a big impact as well.
Data providers like ZoomInfo, Seamless, or Apollo can be useful for sourcing contacts for marketing or sales. As the company grows, investing in a BI tool like Power BI or Tableau becomes more relevant, especially when creating a complete feedback loop by connecting product data, CRM data, and accounting data to automate LTV to CAC calculations and other key metrics. However, this level of automation usually becomes more relevant when a company surpasses $10 million in revenue.
Q: How do you think about hiring salespeople and sales leaders once a company has enough traction to warrant that? What do you look for from a talent and skills perspective when hiring those folks?
When hiring the first sales reps, I always recommend hiring in pairs and to look for individuals who are entrepreneurial and driven by impact. These individuals should be aware that the role might not lead to guaranteed success, but they should be excited by the direct impact their actions have on the company. Being curious and eager to learn is crucial for these early-stage employees. They should also be interested in researching prospects and the market, as well as understanding objections and providing feedback to the product team.
Q: Are any general resources books you've read? Podcasts you listen to, YouTube videos you watch, anything like that you're like, hey, if you're a founder, you're building out your sales function or even a CRO or whatever, this has to be in your library, be it physical or digital media library.
The Pavilion community, formerly known as Revenue Collective, is an excellent resource. They offer a variety of courses, such as their CRO school, which is highly regarded. Additionally, they have an active Slack community with various channels covering different topics, making it a valuable platform for learning and networking.
Some books include:
That Worked Podcast (Shameless plug, but we do focus on interviewing founders, CEOs, and revenue leaders about this exact subject!)
There are several influential LinkedIn users to follow, such as Sam Jacobs, the CEO of Pavilion, who is a great follow for revenue leaders. Another excellent follow is Jeremy Donovan, who shares insights and information related to the industry.
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