Moneyball of SaaS
Moneyball of SaaS
How to stop buying players, and start buying wins
👋 Hey, Toni from Growblocks here! Welcome to another Revenue Letter! Every week, I share cases, personal stories and frameworks for GTM leaders and RevOps.
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In the early 2000’s baseball was broken. At least in terms of how people viewed and predicted success.
To know if a player was actually going to be good, managers relied on subjective scouting reports, intuition, and conventional stats like batting averages, runs batted in (RBI’s), and home runs.
But the problem with that?
Scouting reports were based on subjective personal observations.
Intuition in this case really meant “gut feeling” and was really just based on stories of past performances.
And the way everyone accepted the ranking of conventional metrics led to higher player salaries, which oftentimes led to inefficient spending.
All of that before Billy Beane of course.
As the manager of the Oakland A’s (a smaller-market team with a limited budget) he knew he couldn’t outspend his competitors. So if the team stood a chance in the current market, they had to be smarter than the competition.
Beane introduced the concept of sabermetrics, which involves using advanced statistical analysis to assess player performance. This approach focuses on undervalued metrics like on-base percentage (OBP) and slugging percentage (SLG).
Essentially, how often will the player get on base?
By adopting sabermetrics, they identified undervalued players who excelled in specific metrics overlooked by traditional scouting methods. This allowed them to assemble a competitive team at a fraction of the cost.
The A's, despite their lower payroll, achieved remarkable success, including a 20-game winning streak in 2002.
They didn’t end up winning a World Series, but they did forever change the way the game was managed.
The SaaS Moneyball era
So what does this have to do with SaaS?
The conventional wisdom that Beane and his team were living with in the 2000s is exactly the way too many companies are working with and predicting their engines today.
We’re basing most of our predictions on surface-level volume metrics (e.g. how many leads did marketing bring in? How many opportunities did our SDRs create?).
We base too many decisions and plans on gut feeling and assumptions (CVRs will go up 10% next Q… just because?).
And when we want to use data across our CRMs to calculate processing metrics (like conversion rates, cycle lengths and ACVs), we need to export and import them into Excel – A piece of software that was first released in 1985 and isn’t strong enough to handle this kind of complexity.
The hard truth is, the way we’re working today does not work anymore.
The vast majority of B2B SaaS companies are running motions that are no longer sustainable. We can no longer pay $2 for $1.
Just like baseball and sabermetrics, we need a system that allows us to be efficient in how we invest in it, and achieve predictable revenue.
The first step towards this future? Achieve actual full-funnel visibility. Which was what we set out to do with Growblocks.
“GTM Partners foresees Revenue Engine Management Solutions like Growblocks becoming essential technologies for every high-growth or scaling organization revenue operations team”
Full Visibility
In the pre-Moneyball era, managers relied on too many scouts' subjective assessments and fragmented statistics. These conventional methods were inefficient and failed to provide a comprehensive understanding of player performance.
And honestly, despite a wealth of data, too many of us are doing the same thing when analyzing our engines.
RevOps has so many data points scattered across so many tools (many mid-size to enterprise orgs run at least 23 core tools in their tech stack, according to GTM Partners) that the only way to see what’s going on across the GTM means jumping through all of them and creating spreadsheets.
Those spreadsheets by the way? Even when they work, they’re only ever owned or used by whoever created that spreadsheet.
And those tools? They create data points that hardly match with other systems. So if you want to manipulate data or calculate metrics like ACVs, CVRs and cycle lengths you’re going to have a bad time.
At best, it’s a time suck. At worst, it takes too long to give answers and insights to drive business decisions.
That was the first problem we wanted to solve at Growblocks.
We built our platform to allow you to visualize your entire revenue engine, from traffic to churn. Integrating all your GTM tools in one place.
So what does this allow you to do?
Let’s say you see that you’re off target for inbound newbiz revenue (like in the image below).
Going through the funnel, you can see that the problem is that MQL production is the biggest bottleneck, and in particular demo requests are down 24%.
By drilling down into MQLs, you can further break it down by region and market, and see how each one is performing in terms of conversion metrics, won opportunities, and overall revenue impact.
From there you can keep splitting it by segments, traffic grouping and even sales leaders. Once you’ve figured out where you need to address, you can save the view and share it with the rest of the team.
All of this, can happen in the meeting where you are discussing the issue. Not another ad-hoc analysis. Not a week later.
Proactive Prediction
When I ask what people are using to predict their GTM, I almost always get the same answer.
“You mean the sales forecast?”
I love a sales forecast, and they’re super valuable for coaching purposes. But they’re terrible revenue predictors.
They only look at open opportunities now, and won’t let you look further than the current quarter. How are they supposed to reasonably show you where you’ll be at the end of Q4?
But focussing on open opps for your predictions is like when baseball teams would focus on buying players.
With sabermetrics, Beane and the A’s realized that they shouldn’t be buying players. They should be buying wins. And to buy wins, they need to buy runs.
And in our case, these opps are only one factor in how many deals you can get across the line. The runs we’re looking for are every step along the funnel. So to predict where we’ll end up (and buy wins), we need to track these metrics religiously.
With Growblocks, we use all your historic data and run the complex calculations for you.
Our GTM models uses your revenue drivers like leads, hires and planned initiatives, to predict your performance.
And if metrics are off track? You’re able to see them in our Mission Control view. Here we give you a list of metrics that are underperforming, and how much revenue is at risk if you don’t address it.
What others are saying
Don’t just take my word for it. If you want to know more about Growblocks, GTM Partners just wrote an in-depth report about our platform.
“Growblocks revolutionalizes GTM data consolidation, identifying cost saving and revenue accelerating opportunities across complex Go-to-Market strategies.”
-GTM Partners Report
You can read their whole report here.
Want to see the product in action? Book a demo with us here.
