Building a Revenue Engine

The Objective of Revenue Management is to create Predictable, Scalable, and Sustainable Revenue period over period. 


A core principle of Revenue Management is a collaborative, agile, and accountable process driven relationship between Sales, Marketing, and Customer Success (Delivery / Product Management). 

Revenue Management is an Agile process to seek, absorb, analyze, and act in an iterative fashion to market feedback.  

Customers and Prospects are looking to your organization to help them understand their risks, opportunities and how they are most efficiently addressed. What data, information, knowledge, and wisdom is your team able to provide to your market? What is the narrative being delivered, and what message is packaged within the story? How is engagement created? What cause is your organization the champion of, who are you fighting for, against what/whom, and what is the prize for victory?

Change is a certainty. The behaviour, needs, and perspective of your target market are changing at an increasing pace. Your Go to Market approach can adapt with and even lead your target market. This requires actively listening to your customers, prospects, and the environment around them. Take leadership to influence the learning curve of your prospect; be a catalyst of change, not a respondent.  

The fuel of a Revenue Engine is Qualified Leads. Traditionally, and still the most common lead generation model, is volume. Sales and marketing produce as many touch points to the target market as possible, with success being dictated by volume and conversion. However, this is inefficient, painful to your team and your prospects and inconsistent (NO ONE LIKES COLD CALLS).

The generation of consistent, qualified, and quality leads to your sales team is the way to improve revenue velocity, conversion rates, and sales efficiency.   

The foundation of Revenue Management comes from Customer Success. The success of your existing customer set is the most compelling story you can convey to your target market. Build a clear and detailed understanding of how you deliver value to your current customers. Have your customers tell their success stories to enable Customer Advocacy. Use your existing customer success to create the marketing and sales narrative in your marketplace. Two thirds of the buying process is completed by the time a prospect directly connects with a sales person. Ensure that they are learning from your successes with their peers through Customer Success driven Content Marketing. 

Marketing, at its best, is an expression of your company culture to the market. People buy from people, and most decisions are made first and foremost with the gut and then justified with the mind.  People connect with Why you do what you do, not so much what. 

The proliferation of channels (email, search, display, PPC, blogging, microsites, online communities, social media, live chat, etc.) creates an amazing listening platform for marketers to gather insight on the needs, wants, and interests of their ideal prospects. Creating an Agile marketing team that is constantly analyzing and actioning signals from the marketplace into outreach, messaging and campaigns is critical to positioning your brand for market leadership. Marketing oriented for learning and teaching will form the basis for a qualified lead generation machine. Incorporating information, data, and insight from the market, prospects, customers, sales, product management, and customer success will allow marketing to analyze and act with precision, velocity, and power. High quality leads are the fuel for a Revenue Engine. 

Revenue Management provides the leadership to integrate learning, analysis, and action across market interactions to optimize revenue generation. A Revenue Manager breaks down the silos between Sales, Marketing, Customer Success, Product and Management with a customer centric, data driven, agile Go to Market operation. Revenue Managers are the engineers of your Revenue Engine. 

Key Takeaways:

  1. Your value proposition is what your customers say it is.
  2. Deliver that value to a well defined ideal customer. 
  3. Learn from your customers, prospects and marketplace. Teach what you have learned. 
  4. Take a stand. People seek the Why not the What. 
  5. All engines require fuel. Qualified leads are the fuel of a Revenue Engine.

The Enterprise Pilot Chasm


Much time is spent bemoaning the lack of aggression from early stage capital sources. Most of this energy is misplaced in my opinion. The real chasm companies struggle to leap, is to Enterprise Scale Solutions. Solutions that solve problems the Executive Suite of Blue Chip (F2000) companies truly care about and therefore will purchase. Many of the technology products and services consumed by Enterprise clients from SME (including startups) providers are isolated in what I will call Pilots or Islands.

These pilots or islands can be relatively large and long lasting, several millions dollars, run over several years, and touch thousands of users. I term these projects or deployments as pilots/islands because they do not register as strategic to the overall organization. Few if any other systems or processes depend on them and the relative switching (including straight deletion of the process) costs are low. Your core users inside the enterprise may scream bloody murder when you are displaced or turned off, but the overall strategy from the true decision makers will move forward with change regardless in order to achieve the broader more core goals of the company. Microsoft, Oracle, SAP, etc. are entrenched and scaled because their solutions deliver core value to the overall organization, replacing their solutions will have cascading effects that override the potential benefits of switching.

Winning Pilots is often a Series A funding trigger for enterprise software ventures. When it is not, its typically as reflection of a few things: the pilot customer does not reflect the ideal target, it is not a scalable implementation of the solution, the pilot is, has, or will not generate enough evidence to represent sufficient traction, etc.. This process, in my experience, is very similar within F500 organizations as they explore new offers and markets (funding from HQ vs. VC). The next major challenge, and often the project companies get stuck in, is post a successful pilot.

Transitioning from successful pilot to a repeatable and sustainable growth process is a Chasm a large number of companies find themselves trapped in. This chasm is not just trafficked by startups, I would wager the majority of teams in this stalled growth phase are SMEs. $5 – 50m annual revenue 10 – 300 employees, 10 – 100 customers, mix of professional services and product based revenue, 5 – 35% EBITDA.   In other words, a lifestyle business. Lifestyle businesses are awesome, if that is you and your stakeholders’ desired outcome. If you took outside money that has any notion of your business being a venture company, being a lifestyle business is painful. Wanting to grow the business for the sake of growth while in this phase is also fraught with risk for the owners personally and the business.

This chasm is the ideal conditions for Founderitis to run rampant and symptoms to metastasize. Startup founders focus on the positive evidence, ‘we have customers, revenue, etc.’; SME CEOs focus on the risk, ‘we are making money, we are comfortable’. Anyone who dares label themselves an entrepreneur has a dose of Founderitis. The question is how you harness the syndrome to the best benefit of the company.  In the Successful Pilot / Isolated Solution to Scalable Growth transition Founderitis constricts the vision of the key leaders limiting their ability to absorb and act on opportunity or required change. Optionality becomes so constrained that the business loses its momentum and dynamism, stagnating into the ‘lifestyle’ chasm.

If your company is not activating new revenue in a consistent, predictable process you are in the Chasm. If you sell a solution to a decent size market that drives a top or bottom line outcome for you customers; you should be able to forecast revenue growth with decent accuracy. A software startup that has exited the Pilot Chasm and has hit the Growth Curve should be generating better than 100% CARGR. The tactical ins and outs of individual sales cycles should only impact the velocity and amplitude of the growth curve, no individual deal should be able to knock it off the up and to the right shape. SME growth companies should be able to account for churn in the sales team and maintain predictable revenue results. Sales have become an engineered process, the sequence of inputs and outputs are known.

Yikes, we are in a Chasm; what the heck do we do? Confession, our Startup is in the Pilot Chasm, right now, scarier we maybe on an Island. I don’t have enough evidence on whether or not we are on island or not yet, so I am going to focus on the ‘known’ that we are in a Pilot Chasm. Like all problems, acknowledgement is the first step, take stock of the current state. Focus on evidence, categorizing Known Facts, Known Unknowns, Solid Assumptions, Weak Assumptions that require data, and your Current Progress Against Targets. Second step, given the evidence what trajectory are we on, does that trajectory and our current velocity propel us out of the chasm?

You need to run diagnostics on the state and severity of your Founderitis, right here, right now, especially if the evidence is showing you are not going to make it over the crest. If you are not on the roadmap you set to get out of the chasm, the leadership team has hard decisions to make. Founderitis is triggered by hard decisions. 

Our Startup is on course, we have mapped out rocks and potholes between us and the crest of the chasm. We have a partner at the top that we are roped to adding traction, we have enough capital to provide fuel, we have added talent to increase force, we have stripped off some unnecessary components to reduce drag, there are enough pilots & pipeline in process to absorb some bumps, focusing on keeping the engine turning is the core focus. Execution will keep the engine running. Three months closing on current opportunities and active pilots and we are up and out of the chasm.

There are still lots of risk. We have burned lots of fuel and have stripped off a number of the safety features; if our partner cuts the rope we will overheat the engine and stall.  The roadmap we have drawn is working, we need to keep our heads up for unknown unknowns and execute on keeping the engine running.

The question I worry about is what we will look like on the plateau above us? Will we come over the top and find ourselves on an island? For us this would be total dependency on our partner for revenue. There is also a good chance we will drive right into another Pilot Chasm in order to prove our engine is a standalone solution and not just a feature or our partners’. Good news is that we have a solid assumption that we will earn another round of funding once we exit the Chasm, thus giving us the ability to prepare a boat (to get off the island) or for another uphill climb (out of the chasm).

The key outcome of the process will be that we will have proven our revenue engine works. From there we will need to engineer a repeatable revenue generation process based on the proven use case. If we cannot repeatedly generate revenue on the product, we will have to take stock and iterate the vehicle for another rough and tumble ride through the Pilot Chasm.

The key takeaways:

1. Know where you are and where you are going, they call it a roadmap for a reason

2. Pilots are experiments to determine how your revenue engine should operate; they are not your business model

3. If you are not predictably generating new revenue you are stuck, Assess, Analyze, Act