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I'm Sangram Vajre. I've built two $200M+ companies, written three books on go-to-market, and designed a GTM operating system that over 3,000 companies operate on today. If I've learned anything, it's this: go-to-market is the business. Keep it simple, and it scales.
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You do see this OpenAI's revenue 3.5 to $13 billion and they at
the same time lost 39 billion. Now, let's do the math here and let that sink in. 3.7 billion
to $13 billion in revenue. That's explosive growth. Like wow, we should celebrate. Right. But then the
R&D cost alone was about 19 billion. So net loss was roughly $39 billion.
And and that is a really important gap that we all need to think about. And most CEOs and
founders are running through the same hole. But they're not they're not recognizing that they
don't they're not OpenAI. They don't have unlimited money. They don't have deep pockets. And
I'm about to expose the problem and what you should do to build a profitable business. So let's
dig in. Here's what keeps coming up in the last few CEO roundtables. Hey, look, my revenues up. My
headcount seems to be up, my activities speaking up. You're doing a ton of AI, but when I ask like,
so what is your path to profitable growth. That's what I get.
Silence. OpenAI is extremely extreme version of what success looks like, and this is
happening everywhere. We love to glorify that 0.001% of the companies. And ultimately, what's
happening is that that's not true for 99% of you that are business owners or good market leaders.
Growth without great unit economics is just expensive storytelling. And I've built
over $200 million businesses. The last company I built, terminus. We built the ABM category. Right?
Like so there are hundreds of thousands of jobs, $100 million plus other businesses that came as a
result of the books I've written on ABM. You can check it up on Amazon. And then they're using the
frameworks. But that happens when you're building a category where something new is happening. Now
you can still grow three x, by the way, and still be dying as a business. Then here's why. You can
hit your revenue number, by the way, and you can still be burning cash like OpenAI is right now
faster than your billing value, which in the case of OpenAI, they're also building value. But that's
not 99% of the companies. That's not 99% of the companies ever can do. So the AI hype cycle is
exposing companies that are confusing the two things. And that's where maybe you are right now,
OpenAI can afford to lose, let's say, $39 billion because they have Microsoft's checkbook.
You don't. So the question for every go to market leader right now is this are you measuring
success in terms of revenue growth or profitable revenue? This is why I love the go to market
system and the CEO roundtables that we run. In one of the roundtables, we were asking these four
questions. These are the four questions that that you should just take a pen and paper and write it
down. If you don't have clarity on it, man, you are really gonna struggle. Because if you follow what
OpenAI and some of the other big things that are happening, that is 0.001% of what real growth is.
So here are the four questions. And these are deep questions, by the way, you can't just rattle that
off, because if you go around and talk to your executive team, they are most likely going to say,
that's not true. So so be ready for it. So here are the four questions. One is what is your real ICP.
And when I say real I mean profitable ICP. Not any ICP, not where hey, we did so-and-so. We did one
healthcare deal there that was amazing. That was 200 K and then this one. No, no, no real ICP. Meaning
where you have a repeatable business that you can go to the bank and say, hey, I'm going to get more
of this. If you give me more money to get more of this, and they would give you money for that, right?
So what is your real ICP? The more profitable where you have the highest gross margin. Which
leads me to the question number two, which is what is your positioning around it. So positioning is a
key area to to consider when you think about companies that are like Teslas or OpenAI, they
have a clear positioning. They are changing the game in that industry. And if your positioning is
like one of your competitors. So right now, if you just go up and, you know, just pick up two
competitor websites, yours and your competitors, and the positioning is kind of similar. You really
don't have a positioning in point of view. You really are playing in the same category. And then
you're going to end up in a price war. So you have to understand and figure out and clarify what is
your positioning that is so unique to you that your customers will pay premium for? Which brings
me to the question number three, which is do you have a pipeline breakdown by the most profitable
ICP? And that's key, not just a pipeline breakdown, because everybody can run reports now and say,
give me the how much pipeline do we have? And it's all fake, right? It's all fake news if you will.
Because most pipeline if actually it's true and closes we all will be so much more richer. You
wouldn't have me on this video watching this, because the reality is you have a pipeline issue
at some point, which is what's driving you to figure out how do I solve this problem? How do I
become the snowflake of the world? How do I become an open AI? But those are again edge cases. That's
not reality for you and most of the business owners and good market leaders. So you need to
look at the pipeline by ICP. That is why I asked the first question, what is your real ICP so that
you can dig into positioning and see if the pipeline for that ICP is enough for you to build
a business. And here's the last one, probably the most important one. What is the revenue look like
that is profitable? And how do you know your revenue is profitable? Well, you know your revenue
is profitable. Let's say if you have like ten customers and out of the ten customers, four of
those customers are from your real ICP. They value your positioning. Their pipeline was in that
particular area. So you know, that segment is something that's that stays with you and you can
retain you can expand with them. Well then 40% of your revenue is profitable, the rest
60% it is going to show up and bite you later on when it comes to renewal. And that's where churn
comes up. That's why go to market. Operating system is the way you should think about it. I remember
this very clearly at terminus when we're building a $100 plus exit business, there was a time where
we looked at all revenue the same. We didn't understand the difference between what I call the
momentum growth and profitable growth. So let me just dig into that. Momentum growth is like, hey,
revenues up, activity up. We were doing tons of events. Everybody was busy. The board was happy. We
were we were at that point probably spending $1.50 for every dollar we were making. So we're
hiring so that we can keep up with that growth. And we're celebrating all of it. And we're raising
money just like OpenAI is posting there. But then then we saw that, man, we're going to run out of
money in like 18 months or sometimes nine months. What are we going to do? And so you are in this
hamster wheel. And again OpenAI is the poster is the the poster child for this 13 billion in
revenue and 39 billion in losses. That's a -300% margin, just in
case somebody is doing the math on that one. But it works for them because they're building an
entirely new category that people are willing to put money in 1 in 100,000 companies might be in a
position to do something like OpenAI and Tesla is doing, but that's not what's happening with you. So
the momentum growth is not the real growth. So now let me bring you what the second type of growth
that you should think about, which is the profitable growth where revenues up and the unit
economics are working, which means you are retaining customers and they're expanding, which
means your cost of acquisition for customers is getting lower, which means you are going after the
same segment. This is where you're not just growing but compounding. And that's what
profitable growth is all about. So most companies who run on GMOs, we don't advise them to go raise
money. We don't advise them most. I mean, in some cases when they're trying to build a new category
or so, but in most cases we say, let's look at your unit economics, not what's running hot, but what's
running right. We're trying to get hold their feet to the fire on some of the the hard things, the
invisible things, the things that actually build strong foundations so you can actually build a
business. So if you're practically trying to do this, here's what you need to do today. Go with
your team right now and figure out what is the right ICP, the profitable ICP, the ICP that makes
money that you can position for. Number two. Start measuring what is what is the efficiency around
this? Not just activity because profit is reality. Revenue can go up and down, but profit. That needs
to be clear. Cash flow. Your SDRs might be booking a ton of meetings, for example, right now, but all
of those all meetings in the right ICP or not, you got to dig into it. I remember this distinctly in
in in my last company, man, we were having some meetings that we shouldn't be having. We were
selling to some folks that we shouldn't be selling, and that ended up biting us at the end of
the year when we were about to raise a fund, because that killed our business. It was the most
painful thing we had to do. And then we had hundreds of people trying to figure it out. It was
insane. And the third thing is you have to align. You have to align marketing, sales and customer
success. Your go to market team, your operations so that they're not looking at different metrics.
They're looking at the same metric and aligning on that growth, because you got to have one
operating system, one revenue engine, one definition of success. And if you can do that as a
CEO, you will be able to stop celebrating this crazy revenue growth. Things actually start
spending more time on saying, hey, what are the business unit economics that's actually growing
our business profitably? And if you are a go to market leader right now in a company, you should
be asking that question to your CEO and executive team is like, hey, which metrics make us profitable?
Not all revenue is the same. So if you want to get into the trenches, rewrite research on this every
single day on run on gmos.com so you can go check it out. There are 3000 companies who have gone
through assessment. You probably are sick of me saying that over and over again, because we just
want to have 100,000 companies run on GTM. Always take our assessment. It's free so you can see how
you can be a profitable business. So if you're ready, let's get moving.