Not all things are repeatable

There's not repeatability in everything, but you need it to scale.

Show Notes

There's a difference between fastfood chains and Michelin star restaurants. One has repeatability allowing them to scale, the other doesn't.

Understanding the limitations of repeatability helps you pick the right initiatives as you seek to scale revenue at a b2b saas company. We discuss the common misconceptions around repeatability, and how you can make things repeatable allowing you to scale.

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

[00:01:11] Mikkel: So I love watching movies, and one of my favorites is funny enough, founder, and it actually, it's a story about McDonald's.
[00:01:23] go watch it. It's, it's pretty cool. But it's just such a good example for what we're gonna get into today. Yeah. Repeatability. So these, you know, McDonald's are really the masters of repeatability scale efficiency. They, they really figured it out. Yeah. And, they have, have, you've seen it, right? So they have this scene where they, they need to change around the kitchen and they're at the tennis court, you know, with markers on and their exercise, you know, training how okay now the burger's ready handed over the fries and walking around because they don't have a lot of space to make. That it actually works out until they just, they nail it. And once they, you know, start nailing some of those fundamentals in the process, then they can obviously open up and sell, you know, all the burgers, they're cheap, so they need to have a, a high volume, but then they just start opening up more and more and more and more and more and more shops with the exact same setup, with the exact same menu, the exact same quality. You know, if you, if you go to a McDonald's in, in Denmark and then one elsewhere, chances are, is gonna be pretty much the same pretty much. And so they really nailed it.
[00:02:34] Toni: That is repeatability. That is scalability. Opposed to, you know, try and have like a two or three star Michelin restaurant on every corner. That doesn't work out.
[00:02:47] Sounds good. Right. Not only because you're not able to replicate the same quality, because you need those master grand, master chefs to kind of do it. but also you don't have the market to even do that in the first place. Right. And, and that, that separates a cool business model that is great and world renowned, you know, Noma, from a scalable business model that basically it's also world renowned, if you will, in skills across the old planet.
[00:03:14] Mikkel: Right. And the revenues they produce are entirely different. Entirely different. Absolutely. And so scale is absolutely critical.
[00:03:22] And repeatable is, repeatability is just a massively important factor in, in that sense. And that's why we're gonna get into it today. If you wanna end up with, you know, a business that grows rapidly and you wanna be able to model how you're gonna grow, you need to understand where you have repeatability.
[00:03:38] Toni: Yes. And really, the point here is, and this is really important to understand, is. Repeatability not only means that you can do something on a Monday and repeat it on a Tuesday, it means that you can do it, you know, once on a Monday, but in a week or two from now, you're able to do it 10 times on a Monday.
[00:04:00] Mikkel: Yeah.
[00:04:01] Toni: Repeatability is about running things in parallel, you know, adding logs to the fire. Instead of just having a, you know, the same lock of the fire burning all the time. Right. So that, that's kind of really important to, to make that mantle leap. And, when we talk about repeatability, again, it doesn't mean that it can do one thing one week and the next.
[00:04:24] It means that it can do the same thing at the same time over and over and over again. Yeah. Yeah.
[00:04:30] Mikkel: So there are some things we tend to think are repeat. That then aren't, And you had this example of false friends, I think, What's the phrase?
[00:04:39] Toni: False friends. You know what this is? This is not a German weird translation into English.
[00:04:43] I
[00:04:43] Mikkel: no. I've just never Interesting. I've never heard about it before. So,
[00:04:47] Toni: So a false friend. What is a false friend? A false friend is, I just know it from language. There's, there, there are many words that are the same between languages. Like for example, kindergarten and English.
[00:05:00] In German surprise, it's called kindergarten, right? It's the same thing. and then they are, then they are, you know, you could say, this is a, this is a true friend, because the same words mean the same thing in both languages. But if you take something like brave. In English means, you know, whatever brave means.
[00:05:18] But in German it means being a good child. Right? so it's, it's a false friend. You think it's the same meaning in both places, but it's not, so therefore it's, you know, not, not a false, it's not a friend, it's a false friend.
[00:05:32] Toni: Wonderful. and in our, so what the f does that have to do with what we are doing here right now?
[00:05:37] Well, I feel, and this is, you know, I feel this is one of my, one of the myth I want. But, but whenever I talk about it, people just zone out on a board about it. So really, you know, a false friend for scalability is your Google ad Spend your Google ads. It's a false friend. Why the f is that a false friend?
[00:06:00] Well, you will have a really nice ramp up of, you know, you spent money on ads and you bid on those keywords and, you know, the dashboard looks really nice and it adds up really. But very quickly, either in the first year or shortly thereafter, you will cap out. You will basically have the same amount of traffic coming from Google Week or week, month of a month.
[00:06:22] You will have seasonality in there and all of that jazz, but generally speaking, it's flat. So why is it not repeatable, but it's repeatable? you know, every me, every week and every month. But it's not like you can add another Google search. you can, you can add Bing by the way. It will give you another bump of around 2%.
[00:06:41] unless you sell to grandmas and grandpas, by the way, but, otherwise, otherwise there's not, you know, another Google search and you can add on top and get the same intent level, inbound coming. And so therefore it's, you know, it's, it's a nice base to have. But it's not repeatable in the sense you can't scale through Google.
[00:07:03] Many people forget about that, and I just want everyone listening that, you know, if, if this is your business model right now and you're, you're b2b, totally different story in b2c. By the way, if you're B2B and Google Ads is how you grow. You have a really big problem coming up in six to 12 months from now.
[00:07:19] Mikkel: Yeah, and I mean it's, it's a classic S-curve. That's happening. Right. So you'll see some growth and that's great. And by the way, we're, it is not that to knock on Google. It's, it's certainly a big, an important and a good channel to consider if you b2b, but at some point it is gonna flatten out.
[00:07:34] And what you then tend to do is say, Well, can we do another campaign about this other products? You add another S-curve on top until you kind of exhausted it. Yeah. And you're gonna be there at some point. Now the other difference, where you just can continuously add s-curves on top and on top and on.
[00:07:50] Toni: top. So there's, you know, let's just stay in the, in the marketing role maybe for a and. Let's just say Facebook. Let's just say you sell something SMB or something like that, and Facebook obviously is a gazillion billion users.
[00:08:06] and you will wanna reach them and you don't, you know, you shouldn't try and reach them with the, hey, demo request demo request demo request.
[00:08:16] I'm not a certified marketing experts. So, you know, don't, don't too much
[00:08:21] Mikkel: You heard it here first.
[00:08:22] Toni: Yeah. But what you can do on, on, on Facebook is you can interface to your potential buyers and their targeting issues and so forth. But basically kind of tell them about, you kind of tell them the problem that they weren't aware yet, and then have them realize the next day. Jazz, I have this problem. I now need to go to Google and I need to search. And what you now did, you created demand. Other people call it demand generation. And when they then show up on Google, that is then called demand capture.
[00:08:57] Toni: And the demand in a market usually is flat unless you have a lot of people.
[00:09:02] Trying to push that demand up, which is sometimes the reason why it's better to be in a crowded market than not, by the way. but if you are only looking at capturing whatever demand is out there, it will simply, there, there won't be magically more people that wake up every day to have that problem.
[00:09:18] Right. You need to educate the market that they have that problem.
[00:09:21] Mikkel: Oh, I need another BI tool. I just realized.
[00:09:23] Toni: Yes. And the, and the other example, obviously SDRs. Yeah. Outbound, you know, favorite go-to here for, for, for many reasons. And, and the reason is, it's, it is also really a demand gen function. It doesn't mean that it needs to report into marketing if someone was, you know, getting scared of this now, but it, it basically means you are calling up people.
[00:09:45] You educating them on the problem they, they might or might not have. And then, you know, magically you get them from where they are right now, all the way down to, oh, now I wanna see a demo. And then the rep in the demo is, you know, building out this problem that they might have. And then they realize, shit, now I need to buy this thing.
[00:10:03] That's why, that's why, it works really great. And the reason why it is so scale, is, it's not about the how many people wanna buy today, It's how many people could buy and let's go at it and call them all up. It's the same with the Facebook ads. Let's, let's go to all the people that could buy, educate that we have a problem.
[00:10:24] And obviously you could say now, hey, but there's also a limit to it, you know, once, once you kind of talk to all of these people, then you have the other S-curve and that's right. For sure. But now you're basically talking about, TAM you're running out of total addressable market at that point. And you know what?
[00:10:41] Once they have that problem, I congratulate you. That's a, that's a champagne problem to have. and, and try and get there first. Yeah. Before you complain about it. Yeah. We
[00:10:49] Mikkel: we talked about there's a reason why Facebook and Google are trying to spread more internet around the world.
[00:10:55] Toni: They, So maybe we need to elaborate on this. So Google and Facebook, they're trying to, bring the internet to, to Africa.
[00:11:02] They're bring the internet to, remote places on the planet. Why are they doing that? Well, they literally ran out of TAM. They got everyone to go on this search engine. They got everyone to go on this social, media website and what they now need to do in order to keep growing. They basically need to help everyone.
[00:11:24] you know, drop into that. They need to not build demand. They need to build a market. Yeah. So they're basically trying to get more and more people to go online, hence they give them internet and then obviously they become a customer.
[00:11:34] Mikkel: Yeah. And so maybe this is an entire side rant, but usually you don't run out of TAM
[00:11:40] Toni: Usually it's the. VP marketing that is clueless and is worried that then says, You know what, guys? I think we're running out of TAM. That's the reason why we're not growing. I can't deliver any more leads. It's done. and, and usually when you hear that it's probably bs.
[00:11:57] Mikkel: Probably. Yeah. Yeah. So, so really what you're saying with. You know, with SDRs, with the Facebook examples is here you have a potential case where you can keep stacking, you know, keep hiring SDRs.
[00:12:10] Yes. Get one more Monday, another one next Monday. And they average, you know, maybe 10 meetings, a week, and then it's a month, sorry. And then it becomes 20 as you hire a 30, 40 and so on, and you can keep going because you know what? There's a lot of people you can call, and even the ones you called a year ago, You can call them now.
[00:12:28] Toni: No, actually the ones you called three months ago. But, you know, besides that point, So now we're getting into the,
[00:12:35] So this is the difference between what's repeatable, what's not repeatable. And now you need to think about, okay, how do I make it repeatable? Right? In a demand gen marketing use case, it's oh, oh, you know, the, copy needs to change. The, the, the visuals of the ad need to change. The target needs to change.
[00:12:53] Whatever you did for Google wants on the keyword and a landing page, it will, you know that that dynamic will change. You need to be way more creative.
[00:13:02] AKA need to hire way more copy and creative people to keep rotating those ads. So keep that, you know, target mark to, you know, from edu, keep them educating. and then on the SDR side, you basically have the same issue to a degree, but in that case it's how do you repeatedly find the talent, get them into the organization and onboard them.
[00:13:28] and get them to being successful in their role. That's for the SDR side. For the AE side, how do you find them? How do you successfully get them into the role and how do you get them to close business at the right rate, and hit success criteria throughout the organization? If you figure this out with, you know, we, we call her the average jane.
[00:13:52] If we do that with average Jane, not with rockstar, super awesome person, I dunno, PhD, whatever. You know if, if, if you're able to do that with the average person off the street, then you have something that smells like repeatability. If you need the outlier expert all the time will be difficult for you to get to 10, 50, 100 folks.
[00:14:18] Mikkel: Yeah. Yeah. So you're really getting into the whole, you know, standardization almost, right?
[00:14:24] Toni: Yes. That you need to have some inputs, you need to have a processing, you need some outputs, and that you know, where you have predictability.
[00:14:32] Toni: And the, so 1, 1, 1 way to get to stronger standardization, is to narrow down the scope of each role. And then you get into specialization. And the reason why I wanna do specialization, You want to have a very clearly defined, this is what this role is about. I only need to teach you this part. You can explore all the other things around it, but that's what I need to teach you right now, and I need to get you to be great at that specific step.
[00:15:06] Toni: And if you have, for example, the typical current typical SDR and account executive setup, you need to teach the SDR how to be greater prospecting.
[00:15:16] And you have great managers around that, and you need the AE to be great at closing those deals. Both of this is a completely different, Onboarding is a completely different management style.
[00:15:26] It's completely, everything's different. If you have a set up where you have an account executive covering the whole cycle, suddenly you need to teach her how to prospect how to be great at that and how to close, how to be great at that. If she is not good in one of those. This thing will break apart. and it will probably be really difficult for you to figure out whom to fire because well, but she's really good at closing.
[00:15:53] just not on the prospecting side. Does that now mean I should Let this let her go, or maybe I can funnel more marketing stuff to her. So this is, this is the problem, right? If you specialize, you narrow down the scope of what you need to achieve and the repeatability piece you train that you get them successful, ensure there's a career path coming out of this.
[00:16:11] Say an SDR can become an AE if they want to, and so forth. But that is, that is what you need to achieve in order to get to repeatability, you know? And, and repeatability is, for me, just another word for scale.
[00:16:23] You need some cash on to pay for those salaries and so forth. So there's some, some other issues around it.
[00:16:28] But once you have that, then you have scale, then you have a, a scalable channel. and that's, that's what many people struggle with, by the way. Yeah. But, but that is really the definition of repeatability.
[00:16:39] Mikkel: But I think the interesting piece here that I'm reflecting over is you, so you have things that are non repeatable. You can do them up to a point. Go ahead and do them, if that makes sense. That's totally fine. But you do need to uncover which initiatives can you make repeatable when you go and prioritize them.
[00:16:57] Right. So the example I would take from from marketing is there, there is actually two. So you have, events. Yep. Right. If you do local meetups such as we've done recently, you know, we've done one in Copenhagen, we're doing one in Berlin and London start adding more cities. And, and, you know, do more of those, start adding people to manage and create those events and market them.
[00:17:17] The other would be content, right? HubSpot is one of those that's, you know, been at it for I think a decade by now. And, you know what they did once they started exhausting the inbound marketing, area. They started going into sales and they started going into cs. They even started writing. You know, very, very top funnel things like spreadsheets or education.
[00:17:38] So there's scale there for sure as well.
[00:17:41] Toni: No, but you have, especially HubSpot is really the inbound marketing. That's what they is so brilliant by the way. That's what they sell and what they, you know, got known for is so b. , but guess what, they have a large team of outbound reps as well. Yeah. Yeah. And then you have teams that are, the, the archetype of plg of product led growth.
[00:18:02] Guess what? They have a massive sales teams right now that are not only doing the sales assist, but doing also the sales led. Right? And you, you, use a tactic to get going. You see success. At some point it will tape off or. It will just not deliver the growth that your investors want to see. So guess what?
[00:18:19] You need to add something else on top. Right? And I think sometimes we are talking about those two things as, scale versus evolve.
[00:18:27] Toni: So once you have, once you have a, a motion, something that you can repeat, Then it's really about, Okay, cool, I've figured this out. Now it works for me. Now I'm gonna spend a bunch of money to scale it up and get more stuff out of it.
[00:18:44] Lots of issues around it to even, you know, get to that point and then to make sure that you spent the money in the right way and so forth. Scale is always a different challenge, but at the on, on the, on the other. And I see this a lot with companies that are starting to be a bit more cautious about, you know, customer acquisition cost paybacks or tech payback.
[00:19:04] They basically are, hey, we are only gonna use the channels that we know already at that scale. They will tape off eventually, by the way. And using evolve projects, meaning new markets, new products, new motions, new segments, new stuff. That is the way that is, gonna keep you growing eventually, but it's gonna be really expensive in the short term.
[00:19:29] When you start with an evolve project. We talked about this many times. It might take up to a year before, this is at a point where you can say, Now we can scale this. and during this year, it's only gonna cost you money and it's gonna look like shit CAC payback, and you will need to explain to your boss on the board.
[00:19:47] And so, That this is a long term play. And as soon as you in startup scale up world, say the word long term, you have an issue already right there. Right? So this is, this is sometimes what I see, what kind of separates, the, you know, the repeatability side and scale side. and it's really great. You know, even getting there is difficult.
[00:20:06] Finding one or two channels up to 10 million is hard and those will probably take you until 50. And so, But as you go through that, you will need to find more and other channels and motions at area, whatever, to keep on adding S curves on top of each other.
[00:20:23] Mikkel: And then I think you need to, as we discussed, you need to, once you've proven that, hey, now we can see this is beginning to work.
[00:20:31] It shifts from, okay, now no longer an evolve initiative. Yes. Now we need to figure out how to scale it. That might mean bring you on different people. If it, if it was me and we saw, hey, we can scale content, You know what I would probably recommend finding someone who's done that before. Yeah. Who can then go and say, Okay, this is the hiring process.
[00:20:48] You know what, this is the copywriting and onboarding process. This is how we measure and control the output.
[00:20:53] Toni: Yep. I think this is a really great point. It's really many times you will need to have someone that is creative.
[00:21:03] And I don't mean that in the, all this is a designer kind of sense. Someone that has the willingness and the attitude and the grit to take some something from zero to one.
[00:21:14] Yeah. That is this one kind of person. And they will do things in a completely unscalable way because that's how you get from zero to one. It's not the immediate boom. Scalable. and then, you know, once it is one you need to. Probably start, get someone in that is the playbook guy. Yeah. Or girl. It's like, ah, okay, how did he do this?
[00:21:34] Okay. Yep, yep, yep. I think those five things we can skip those two things. We will add, here's the playbook and now I'll take it from one to a hundred. Yeah. And those are just two different people by the way. And figuring that shift out. You know, sometimes reflected in, you need to have this kind of VP sales for a million and this kind of VP sales for 10 and so forth.
[00:21:54] But really, it boils down to what I just said. Right? And just keep this also in mind when you are starting up a new channel, if you are starting up something new, don't give it to the scale girl. Give it to the, give it to the evolve or, or creative, let's just call it like that girl.
[00:22:12] Mikkel: Yeah.
[00:22:14] Toni: Wow, this felt like a like a bullet train here.
[00:22:19] Mikkel: No, we can, we can go a long time on this one. Right. But it's really. It is one of the key components. If you want to scale a business and grow, you need to figure out what you can repeat. You need to realize that it's gonna be different, you know, people when you started out versus when you then need to scale it.
[00:22:38] you're gonna try out a lot of things and fail, but at least having the mindset of is, you know, first off the cuff, is this something you're gonna be able to scale? And if so, up to what point?
[00:22:49] Toni: Yeah.
[00:22:49] Mikkel: And, and does that make more sense given where you are? You know, compared to other opportunities you have on the table.
[00:22:56] Toni: You know, like, I like to say it, is it a false friend So I think, I think it's really important to look at the different channels you have, figure out if they're scalable, repeatable, and again, not repeatable in time, but repeatable at the same time. And double down on the ones that you see will keep on growing, for example.
[00:23:17] I don't think you need to have a massive performance marketing team that only looks at Google. That probably doesn't, you know, it's not gonna work out for you. You need to have a team that probably is able to go into demand gen mode and scale this up a lot. Same with SDRs. And I think, you know, we keep talking about inbound outbound basically.
[00:23:34] There's partnerships as well. Little bit more difficult to scale, but if you get to scale Jesus, Yeah, that's a fantastic channel. And there are a couple of other pieces as well, right? So really, look at the stuff that you have, and figure out which ones of them are actually scalable. And then put your resources behind making that one scalable.
[00:23:54] Yeah.
[00:23:54] Mikkel: then once you're there, it's, all standardization and go, go, go. Yeah. Then you can put it into a model. You can map it out and go.
[00:24:01] Toni: Yeah. So one, one big question. I think every, every listener stood us, on his or her mind is, is Founder really your favorite movie?
[00:24:10] Mikkel: No, I said one off.
[00:24:11] Toni: Oh, one off. Okay.
[00:24:12] Mikkel: I find it really hard to limit myself to one favorite movie.
[00:24:17] Toni: I just feel everyone will think like, Ah, he did it for the intro.
[00:24:20] Mikkel: Ah, . Well, I'm not gonna lie it, it does fit in there, but it is one of my favorites. You know, again, depends
[00:24:27] on how
[00:24:27] Toni: you now in a certain way, but it's fine.
[00:24:30] Mikkel: You know what? I don't care. I stand by my statement
[00:24:33] Toni: But you care about the jacket. Of course,
[00:24:36] Mikkel: you. But another good day in the studio. Yes. Another good topic. I feel like we're slowly finding some of the key elements to building, you know, a growth engine, to having that revenue formula. Yep. Up on the whiteboard. and, you know, next time we go into the studio we are probably gonna start talking about how to use some of this we just talked about in the past episodes to model out.