This poster has missed the point of Jason Fried's post by a cosmic distance.
He talked to a CEO last week who fell ass-backwards into a huge deal that he can't win without recruiting 2-3 "enterprise SAS sales persons" "ASAP". Why, if he followed Fried's advice, he'd never close those deals!
You want to take the advice of people like Scott Olson if this is the situation you'd like to find yourself in: bouncing from make-or-break high-6-figures enterprise deals dogfighting with 3 other companies doing exactly the same thing you do. There is indeed a playbook that most direct sales enterprise software companies run from, and if you don't mind quietly crying into your hands for 5 minutes every day when you start your day sitting in the lobby of a telecom company you're pitching in Jackson Mississippi, you are well served by its plays[1].
I can't read Fried's mind, but here is the sense I get from how he writes --- and this may be my own bias here --- he would rather gnaw off and consume raw his own big toes than run this kind of company. He's writing his own playbook for his company. And in that playbook, he doesn't "staff up". He's unlikely to wind up in a situation where he has to delude himself that he can ramp up 2 sales reps so that they can close a single deal whose window is days to close.
Instead, the point of Fried's model appears to be: grow headcount as slowly as possible, and instead of posting job reqs, leave yourself maximally exposed to motivated talent. Exposed: running a company that people love, and that people are inclined to ping for openings. Motivated: people who are seeking out the opportunity to work with you. Talent: people who can prove themselves with something other than a sheet of paper that looks identical to everyone else's paper.
Scott Olson's friend can't do that. He runs an enterprise software company that needs "Enterprise SAS Salespersons". Guessing, regardless of the "deep technical rocket science" involved, that top talent isn't beating down the doors to get an interview at that company --- unless it's attached to a monstrous 1099 consulting rate.
But, I mean, what do I know? All I can say for reasonably sure is that Fried is crying his way to the bank because of this mean post.
By the way: I've lived in Chicago all my life, started 2 companies here, one of which I'm at now, and I don't know anyone who (a) works for the park district or (b) is hiring people with UofC MBA's. Scott might just have needed a better social circle here, and some different career choices. As someone who has spent a couple years in the valley, I will attest to the fact that it is easier to find people talking about the "rocket ride days at Netscape" there. That wasn't enough of a win for me to stay, but hey, if "heady stuff" like that does it for you, mazel tov! You be a mensch in the valley, I'll keep growing a business in Chicago.
[1] This playbook is also the reason every VC-funded enterprise software company with less than 10MM revs has products with pilot pricing at $70,000, and why they all have the exact same 3-person VP/Marketing, Dir/Marketing, and Marketing Communications Manager marketing team, solely responsible for giving the CEO a "marketing plan" that in no way influences the sole product the whole company develops. It is also the playbook that recruits 3 "sales engineers" so that there are enough people staffing the pointless industry conferences the playbook dictates they must spend $200,000 on every year. And it's the reason you're getting fucking obnoxious phone calls from "inside sales" people every other day.
And since nobody who actually knew what they were doing would ever go out of their way to subject themselves to this kabuki startup built out of PowerPoint "lego" slides and strip club visits, you do indeed need resumes to execute this plan.
But hey. Little stress balls with your company's name on it. Don't forget the perks.
Way to cut through the bullshit and get to the root of the issue. Funny as hell, too.
It's amazing to me how thoroughly old guard biz types (especially the kind you find haunting the halls of print media conglomerates, not that that's relevant here) cling to outdated traditions like resumes. At this point I generally don't even bother sending a resume when applying for work unless it's explicitly demanded and can't remember the last time I updated mine. The last two jobs I took where picked up on the strength of my open source contributions (look Ma, real code!) and a small developer blog that I maintain. Resumes? For developers? Seriously?
I think fundamentally Jason's advice works for the business of selling web apps. And scott's got it all mixed up with general business practices of large corporations.
Jason is a romantic when it comes to what worked for him and he is preaching it to the world. Scott just can't handle the fact that preaching still works.
I really think this has more to do with the way that insta- 50-person post-A-round enterprise software startups work. They really do start with a small pouch of powder, which, when sprinkled over water, blossoms into a company with a 1/10 shot of getting acquired for 2x investment dollars in a couple years.
It's probably really frustrating that all you have control over is the flavor of that powder. Maybe that's why Olson is so angry. Or maybe something bad happened to him in the Chicago parks. Some of them do get pretty iffy at night.
Nice post. I think you nailed it: Fried's advice is for a very specific type of company. Scott's example of a giant SAS company is a bit cherry-picked in this sense, since it's the complete opposite of Fried's "type" of company.
And this may be a bit OT, but... how about an Amazon link to that playbook? ;)
Looks like this post has stirred up some of the "You kids get off the grass" crowd. Olson's post echoed Poe "long I peeked through my fingers, with enormous trepidation, but when Mr. Fried ventured upon a pernicious lack of respect, I knew I had to have my revenge.." and so he takes up his trowel.
Enterprise SAS indeed, we know little about Olson, but he wants us to know he's climbed up the corporate latter the right way, and he's probably a devout resume reader, and as such Fried is destroying his carefully cultivated world reality. He likes to drop titles like "CEO", and yearns for the corner office, fat pension and gold watch perhaps.
I admire Jason in that he retweets these critiques, whereas the criticizer (Olson) does not allow comments - that's what I expected. Dish it out, but can't take it back?
I wonder what they would think of Mark Zuckerman's hiring practices? According to Ben Mezrich, Mark would have the applicants drink shots as they completed each section of a coding contest. Resumes would be pretty meaningless.
When you sell a product via direct sales, your initial price point has to be high enough that after factoring in your close rate, you are making money for each AM/SE account team in the field. You can't sell a specialized $5000 product direct, because the AM alone runs you $150-200 fully loaded, and would need to solo-close a deal a week just to break even.
Yep. In that sort of business model, they have to set really high price points because:
1. they have to cover a much higher staff cost for the "non-productive" types (compared to the 37Signals model, eg.)
2. they have to, as you say, go to the conferences, strip clubs, steak dinners with clients, going really big with paid advertising early, etc.
3. pay for all the costly-but-failed sales attempts
If instead you forego all those extra costs, and try to keep it cheap and grow organically, you can sell at lower price points, and keep revenue ahead of costs, instead of the other way around. With no big upfront cash burn needed, then no big outside upfront investment needed, and therefore the founders can continue to maximize control, freedom and retained equity.
Whenever someone uses "deep" as a description of tech/knowledge/experience, that is a sign that they are full of it. E.g. "deep technical rocket science."
He talked to a CEO last week who fell ass-backwards into a huge deal that he can't win without recruiting 2-3 "enterprise SAS sales persons" "ASAP". Why, if he followed Fried's advice, he'd never close those deals!
You want to take the advice of people like Scott Olson if this is the situation you'd like to find yourself in: bouncing from make-or-break high-6-figures enterprise deals dogfighting with 3 other companies doing exactly the same thing you do. There is indeed a playbook that most direct sales enterprise software companies run from, and if you don't mind quietly crying into your hands for 5 minutes every day when you start your day sitting in the lobby of a telecom company you're pitching in Jackson Mississippi, you are well served by its plays[1].
I can't read Fried's mind, but here is the sense I get from how he writes --- and this may be my own bias here --- he would rather gnaw off and consume raw his own big toes than run this kind of company. He's writing his own playbook for his company. And in that playbook, he doesn't "staff up". He's unlikely to wind up in a situation where he has to delude himself that he can ramp up 2 sales reps so that they can close a single deal whose window is days to close.
Instead, the point of Fried's model appears to be: grow headcount as slowly as possible, and instead of posting job reqs, leave yourself maximally exposed to motivated talent. Exposed: running a company that people love, and that people are inclined to ping for openings. Motivated: people who are seeking out the opportunity to work with you. Talent: people who can prove themselves with something other than a sheet of paper that looks identical to everyone else's paper.
Scott Olson's friend can't do that. He runs an enterprise software company that needs "Enterprise SAS Salespersons". Guessing, regardless of the "deep technical rocket science" involved, that top talent isn't beating down the doors to get an interview at that company --- unless it's attached to a monstrous 1099 consulting rate.
But, I mean, what do I know? All I can say for reasonably sure is that Fried is crying his way to the bank because of this mean post.
By the way: I've lived in Chicago all my life, started 2 companies here, one of which I'm at now, and I don't know anyone who (a) works for the park district or (b) is hiring people with UofC MBA's. Scott might just have needed a better social circle here, and some different career choices. As someone who has spent a couple years in the valley, I will attest to the fact that it is easier to find people talking about the "rocket ride days at Netscape" there. That wasn't enough of a win for me to stay, but hey, if "heady stuff" like that does it for you, mazel tov! You be a mensch in the valley, I'll keep growing a business in Chicago.
[1] This playbook is also the reason every VC-funded enterprise software company with less than 10MM revs has products with pilot pricing at $70,000, and why they all have the exact same 3-person VP/Marketing, Dir/Marketing, and Marketing Communications Manager marketing team, solely responsible for giving the CEO a "marketing plan" that in no way influences the sole product the whole company develops. It is also the playbook that recruits 3 "sales engineers" so that there are enough people staffing the pointless industry conferences the playbook dictates they must spend $200,000 on every year. And it's the reason you're getting fucking obnoxious phone calls from "inside sales" people every other day.
And since nobody who actually knew what they were doing would ever go out of their way to subject themselves to this kabuki startup built out of PowerPoint "lego" slides and strip club visits, you do indeed need resumes to execute this plan.
But hey. Little stress balls with your company's name on it. Don't forget the perks.