In this interview, Luis the Co-Founder and CEO of Education SaaS Skore goes into the story of how "revenue fixes everything". Read to hear Luis unpack his journey from raising a seed round to getting his first customers as a technical founder–to now a Product CEO with a team of 20+ employees and growing quickly.
Where Luis and the Skore team started
In the early days, being a horizontal solution presented a challenge around market segmentation.
Technically speaking, Skore works with a lot of different types of customers and Luis would take as many meetings as he could with potential customers who all seemed excited about what he was working on.
These meetings ended up mostly being a waste of time and his close rate stayed low. Often, a meeting would end with the prospect saying "send me a proposal" which Luis would send and after a series of follow up emails, end up with radio silence.
The hardest part here was not knowing where Luis truly stood in a deal. Luis would go through a process where he'd see a good sales forecast, but then would have to go back and have to redo it when deals would fall through.
During this period of time, revenue growth was slow and Luis knew they needed to change something about their process.
Why investing in product and lowering Skore's price didn't work
To get around this, Luis first approached it from the product-feature angle. Maybe if Skore could improve their product, this would increase demand. Instead, this approach led to increased burn and no change in sales. They were on the Feature Death Cycle. After all, great products aren't about a lot of features, but a great core experience.
Next, Luis tested decreasing their price. This lever also didn't result in much change – if your users don't yet see the value, it doesn't matter if your price is as low as $1 or $3 per user. Releasing a freemium version was a disaster because it attracted unqualified prospects–who were more interested in the technology than the outcome.
Often times, Luis would notice a customer come to Skore with their own expectations about the product and outcome – only for those to change after he'd changed the way he handles sales conversations. When this was done right, the value of Skore became much more clear and larger than his buyers originally imagined.
7 Ways Skore Built a Scalable Sales Process in 12 months
It was at this stage that Skore knew something was broken, but they weren't sure what it was. This is when Luis and his Co-Founder found Upmarket. During this time, here are just a few of the adjustments we were able to cover in the interview:
1. Took Ownership of Sales
Initially, Luis first rolled the system out to his sales reps, who he found resisted making changes to their process. When he realized they weren't open to changing a broken system, Luis knew he needed to let them go and build the sales process back up with his founders. Looking back, Luis sees that there are so many different types of sales specialties. Without knowing what the right process was for his customer first, investing time into recruiting a Head of Sales was a waste.
By running sales through $1M, Luis could figure out the process and scale with the right type of talent. Even more, by being involved in sales–Luis was able to built a more innovative product that solved his market's true pain points.
2. Went from Push to Pull
Going through the process of getting explicit buy-in in his sales conversations appeared crazy to Luis at first. He thought no customer would let him ask these types of questions. In the process of implementing explicit buy-ins throughout his sales process, Luis could pull in customers rather than feeling like he's pushing product and more follow up meetings. By using questions to expose pain, Luis was able to come up with a set of "killer questions" that would make the value of Skore very obvious to buyers without being pushy.
3. A Spike In Confidence
Rather than letting customer's control the conversation, understanding the process significantly improved Luis and his team's confidence. In one case, a very desirable prospect proposed Skore enter into their RFP and Luis declined. When the customer asked why, Luis respectfully explained they'd fail their RFP because 80% of the questions were asked in the wrong way. He suggested the prospect, have a conversation to know the questions they should be asking instead. This led to a 4-hour meeting and ultimately Skore winning this big customer as the client.
4. A More Scientific Sales Process
Luis then implemented a process where he would check off whether the customer had gone through requirements he knew they needed before they buy. This gave him a baseline from which to make changes. Once he had the template, he could then make adjustments and look at how those impacted his metrics, and continue to iterate.
5. The Right Customer Beachhead
The next change was getting a clear focus on a narrow customer beachhead of high-growth startups from 300-500 employees. When companies were in this stage, they'd buy and implement quickly. Doing this, led to a domino effect that started to attract non-early adopters in the market. Luis segmented his customers and found ways to identify the high-expectation customer which he optimized his sales funnel around.
6. Using Sales as a Channel for Customer Insight
Whereas before, it was hard to know how sales fit into the rest of the organization – when it was done right, sales became an active source of customer insight. Now product and customer success teams at Skore incorporate sales into decisions they make.
7. 300% More Revenue/Customer
Although he was hesitant at first, by creating more value in the sales process Skore was able to increase their pricing 300% with no decrease in conversion rate. Now discounts aren't given without asking for something in return (longer contracts, intros to new customers, etc).
So, does revenue solve all problems?
Well, after Skore could show a graph with 450% revenue growth, previous struggles of hiring and raising financing disappeared. Now that Luis can build his team – and is starting to see word of mouth kick in. All together, he's expected revenue to double again in the next quarter all while increasing his focus on customer success.
Interested in creating the same type of value with your customers as Luis has at Skore? Check out the demo to learn more about our process.