FOUNDER’S GUIDE TO B2B SALES THE SELLER RAMP LINK TO MICROSOFT EXCEL • This Seller Ramp chart tracks the historical productivity of every seller • It can be used to determine steady-state seller productivity (average 4Q+ productivity) • It can also be used to determine seller ramp: imagine the company models sellers doing 0%, 25%, 75% and 100% of their target in their first four quarters. Here you can see the reality is slightly better in the first three quarters (at 10%, 31%, 75%) and slightly worse in the fourth at 91%. WHAT IS A DRIVER-BASED PLANNING MODEL? A high-level model that lets you vary key parameters (i.e. the drivers) and see resulting impacts (e.g. key metrics) This is not a budget. It’s a high-level model, meaning it factors in things such as coarse time granularity (quarters, not months), some imprecision (it is approximate), intent (scenario planning, not budgeting – i.e. it does not map to general ledger accounts!), and abstraction (total number of sellers hired vs. one row per seller). The more a driver-based planning model resembles a budget, the harder it is to use for scenario planning. A good model should include: • Sales bookings capacity – given sales hiring, productivity, ramping, and attrition, how much can we sell? • The ARR leaky bucket – give our sales and churn assumptions what happens to our bucket of ARR? • High-level P&L – given the ARR bucket and assumptions about S&M, R&D, G&A, and COGS what does the income statement look like? • Cash – given existing cash, new bookings, renewals, and cash expenses, what does cash look like? SPRING 2023 .52