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Your Revenue Growth Is Killing Your Business · GTM Made Simple

• 0:00
  This is really interesting. Figma the IPO and they're now down 74%. Circle. If you had looked at
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  their IPO it's amazing. They're not down 73% curve. They also IPO and they're down
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  58%. So is Yamada. So is China. So its hinge held so is eToro. They're all
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  down double digits from their peaks and the average is about 44%. So yes the IPOs are
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  back. But if you actually bought the stock at the height of it at the top, write down that a lot of
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  people have done. You're probably underwater and your stock portfolio is probably screaming don't
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  do it. But this is the most important go to market lesson in 2026. And most companies are about to
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  make the same mistake. And I hope you don't. So what I'm going to do is talk about the problem,
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  give you a framework to think through that, and actually give you a call to action, if you will, so
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  that you won't make the same mistake that some of these companies have made. So here is the
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  conversation we had in a recent CEO founder roundtable that you all know. We run that on a
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  weekly basis. And here's the thing that came up. The market got excited. Getting IPOs is a great
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  thing. Day one everyone's IPO pops. It looks great and everyone celebrates it. That's awesome. But
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  then over a period of time, reality hits and sinks in where you're like, okay, is the revenue really
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  growing or are we just growing without profits? And if you do not have profits, the market will
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  punish you. So all these companies had the growth. Every one of them. You can look at the headlines.
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  They had the hype, all of it. But what they didn't have is profitable revenue, which means not strong
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  unit economics. And I'll jump into that in a second, because we see that across 3000 companies
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  that run on GMOs, they have a challenge. And that challenge got exposed in this market condition
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  that their go to market engine is not compounding, it's actually burning. And therefore, you see
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  layoffs and all those things happening in the name of AI, but in reality is just bad unit
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  economics. Now, this comes from a guy who has built $200 million companies. If you know me, you know
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  that I ran marketing, had partnered with Joe's $10 Million Company. We were then acquired by
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  Salesforce through Exacttarget for 2.7 billion. And so I went from a $10 billion company to $10
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  billion company. So I've seen this movie before. And the hardest lesson I had to learn that
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  eventually the market is going to say, are you efficient? Are you profitable? These two things is
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  what's going to define the growth, the outcome. And as a matter of fact, if you're going to actually
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  be there, you're five years, ten years from now. And that is what I want to make sure that everybody
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  recognizes why we build this idea of around eight question go to market operating system. Because
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  most companies are still and you might be there right now and then the CEO roundtables. It's crazy
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  how many people are focused on top line growth, which means, hey, we got new logos, we have these
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  revenue numbers. We're heading, the board is happy. We're gonna keep doing, we're gonna keep hiring. We
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  need to raise the next round. It's like a hamster wheel. And hopefully we'll get to an IPO or an
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  exit at some point. But they never ask these questions. Or very few CEOs are asking these
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  questions Is my revenue? Profitable? Is this growth repeatable? Do I have a good market
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  engine that's compounding? Because if not, just like all these different businesses that are out
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  there, are the darlings of all these SaaS businesses. They're not going to dust right now.
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  And it's very hard to see that go to market operating system really forces these questions
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  early on, not question like, hey, what's your pipeline look like? And what is this pipeline
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  doing compared to other pipeline? Now what it actually says is that is this pipeline for the
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  right ICP? Are we growing profitably in this particular segment? Is their gross margin
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  big enough in this product that we are trying to sell? Our customer is going to retain for this
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  particular product over another. Should we invest more here? Should we open an office in a different
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  location because there's more profit in that market for that persona? These are big questions.
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  The questions around net revenue retention, your payback time, your path to efficiency. That's what
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  we need to focus on in the roundtable. One of the CEOs told me recently that we've been running on
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  iOS. If you're familiar with iOS, which is entrepreneur operating system, it's amazing. It
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  helps you figure out your vision and mission and big rocks and it's phenomenal. And then he saw GTM
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  OS and he's like, whoa. It immediately clicked for them. He's like, this is the missing operating
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  system for go to market, because iOS was helping them run the company to make sure that you have
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  vision, vision and budgets and all those. But GTM OS runs the revenue engine. So when the companies
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  are getting crushed after IPO or after a big run or after a growth cycle is because
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  they don't have this unit economics that are fundamental to it. So I'm going to give you a
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  framework of growth versus sustainable growth. There's a big difference on it. So here are the
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  two types of growth. Type one the IPO growth is what I would call revenues up. New logos are up R
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  is up. Maybe the S-1 if you're really doing that really looks good. You're probably hitting all the
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  milestones. You're ringing the bell, so to speak. But you're if you're near your net revenue
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  retention, which is customers staying, not only acquiring but staying, but also expanding with you
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  is below 100%. You need to hear this. You are about to go out of business. The public market
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  and any market that you're in is going to punish you. And those are the companies that are dying
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  fast. So here's an alternative type two, which is a compounding growth. That's another one. One is the
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  IPO version of it where Randy is up and exit is up. But the compounding growth is what you need to
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  focus on. That's what I focused on and helped our businesses to go over 100 million. That's where
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  over 3000 companies that are running on GMOs are really focused on. And we really drill this into
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  their hearts and minds that if revenue's up, that doesn't mean anything. What it means is, do you
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  have an existing customers that are expanding? Is your net revenue retention over 120%? Is your
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  cost of acquisition payback under 12 months, if not, your go to market engine is going to suffer.
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  If it is, then it's going to build on itself. And that's why it's called the compounding growth.
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  That is why companies need to spend way more time on expanding with the existing customers than
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  acquiring net new customers. Here's a great application for you to think about if you want to
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  figure out, like, well, I don't know, where are we right now as a company? Are we focused on the
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  right things or not? And if you're still wondering about it, let me give you your three questions
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  that might actually help you. First of all, know your end. Not just the CEO, but everybody in your
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  business should know what is your net revenue retention. And it really doesn't matter if it's
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  75%, 85%. But a lot of companies are. You're gonna eventually die if it stays there. So it's better
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  known now than later. And if you can get all of your projects and initiatives focus on that, it
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  will become your single best indicator and predictor of long term growth and value. I was in
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  a conversation with Yamini Rangan, who's the CEO of HubSpot, and I asked her like, hey, what is the
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  number one thing that you're focused on? It's a publicly traded company, right? Like HubSpot. And
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  she said without flinching, she said, saying her mom focused on N.R.A. And we went through the
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  whole GMOs, and we went through all the eight questions, and she went through that. She's like,
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  this is my strategy for it. It was phenomenal. But that was it, she said. I focused on her because I
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  want to focus on profitable growth. I want to not be a nice to have, but I want to be the
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  foundational go to market stack for the businesses of the future. So focus on that. So
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  that's number one. Number two, fix your CAK payback time. So if you're CAK payback time, which is cost
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  of acquisition for a customer, so to speak, if it's more than 24 months or longer or around that
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  period, you are financing your growth in a way, and that's not cool. You're gonna be or period of time.
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  Either you will have to raise money or you'll have a lot of cost cutting that you'll have to do.
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  That's why we see all these layoffs. Instead, if you can bring it down to 12 months or lower, then
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  that will finance the future of your business and that is what you want to do. Which brings me to
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  you. The third thing, which is really important and I cannot stress this enough. Every single time we
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  have a CEO and executive team conversations, we talk about this data point, which is, look, 68
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  to 78% of your go to market. Leaders right now are looking for focus on clarity and expansion,
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  not acquisition, clarity and expansion. 40 to 50% of your new are at the best in
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  class SaaS companies come from expansion. I saw that first standard Salesforce. I was like, how
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  does a $10 billion company forecast so accurately? Almost to not the penny, but at least like, you
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  know, zero of like 10,000 or 100,000 or millions, how do you get to that finite point? And the
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  reason is because 6,070% of their business was going to come through this expansion revenue. So
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  they already knew that they have a 8,090% probability of getting to a number, and there's a
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  10% that obviously the rest of the company is focused on. That's an amazing business to be part
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  of. Instead of optimizing for all these different things like MKL skills you need to focus on. How
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  do I optimize for expansion? That's the gap. That's what GT most focus is on. You need one operating
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  system, one revenue engine, one definition of success, and that's what drives it. So when we
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  advise CEOs, here's our blunt advice stop celebrating revenue growth. And that might suck
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  because momentum is good. And everybody wants to talk about new logos and put it out there and do
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  press release. But here's the challenge. If you celebrate only revenue growth, not recognizing
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  what that not all revenue growth is saying, then you are actually killing your business. This is
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  why the public market will at some point ask, are you efficient? Are you effective? Otherwise, you'll
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  be in one of those metrics out there that is down by 44%, like I was telling you about some
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  companies. And if you're a go to market leader right now, your job isn't to just hit the number.
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  It is part of the job. But your job is to build a go to market engine that compounds. Otherwise,
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  every month you're starting from zero. And if you don't focus on NRC and CAK. You are going to be in
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  a war forever. And that's where layoffs happen. And if you are building towards an exit or an IPO,
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  look, the IPO window is open. It's a great window and exit market can give you premium for that. But
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  the market is going to punish growth without profitability. Profit is the way out of any valley
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  of death that you might be in right now. So if you're ready and if you're thinking about, well,
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  I'm ready to grow, but I don't know where to grow. I don't know which problems to solve. I don't know
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  what's my sequence. It looks like I know where my vision is, but I don't know how. If my growth
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  engine can compound, do what 3000 other CEOs and founders have done, go to run on GMOs
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  and go through that assessment. That assessment will give you step by step process, almost roadmap,
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  if you will, of how to grow, because it's from data coming out of 3000 plus companies that are
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  running on GMOs. Profitability is the mission is the goal. So if you're ready, let's keep
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  moving.