Feb 09
27
By Connie Loizos, of peHUB (Thomson-Reuter’s private equity blog)
“A New Support Group for CEOs Emerges”
I spent Friday morning at the Sand Hill Road offices of Battery Ventures, where a dozen CEOs took up temporary residence to discuss what to do about sales cycles that have grown longer every month since September, why most no longer discuss sales leads with their VCs and some of the surprising differences between selling to a new customer versus getting an existing customer to renew.
The group was gathered by Aaron Ross, who has been an Internet entrepreneur, a Salesforce.com executive and a venture capitalist, among other things, and who recently began organizing small, monthly meetings of chief executives looking to create predictable revenue during one of the worst recessions in our country’s history.
Under the rubric of CEOFlow, Friday’s meeting was Ross’s first in the Valley (a Bay Area native, Ross now lives in L.A., where he has had similar gatherings). Judging from how much the participants seemed to benefit from the exchange — including CEOs of companies that have raised tens of millions of dollars, CEOs who’ve taken companies public, and CEOs still figuring out their product portfolios — I gather there will be plenty more.
In the meantime, though I agreed not to identify the people gathered, I thought I’d share just some of the ideas and advice that surfaced during their get-together.
* Everyone was more concerned than ever about scaling while acquiring customers more cheaply, a tall order considering that “standard budgeting apparently went out the window in October,” according to one seasoned CEO. Said this person, “Even if a CEO tells you they’ll do something, it’s not clear that they will when push comes to shove. How do you teach your prospects that they shouldn’t wait?”
* There was lot of talk of getting from organic growth to proactive growth. Part of the issue seems to be that new CEOS often think that based on a set number of leads and a particular number of close rates, that they’ll do twice as much the next quarter or year. They don’t take into account that the metrics involved in outbound sales (owing to customer acquisition costs) makes that data meaningless.
* Everyone agreed that in days past, CEOs could add more salespeople and spend more on marketing to acquire customers but that neither works today, partly because companies aren’t able to raise the amounts of capital from VCs as they once were. A serial CEO also observed that “you had more time to prove out” your business model in years past. Now, he said, “everything has to work so much more quickly and effectively.”
