David Sacks on the Importance of Deal Velocity in Sales
00:00:00.000 | When it comes to sales, how do you know whether closing a tough customer is worth the effort?
00:00:04.640 | Here's a framework for how to think about that. This is a two-by-two quadrant. On one axis,
00:00:09.040 | we have the deal size or ACV, annual contract value. The deal can be small or large. And on
00:00:14.720 | the other axis, we have deal velocity, which can be fast or slow. It's fine to be in the top left
00:00:20.880 | corner where you're doing lots of sales really fast of a small dollar amount. Or you can be in
00:00:25.760 | the bottom right corner where you're doing enterprise deals, which are large ACV deals,
00:00:30.320 | but they take longer to close. Obviously, if you can be in the top right where you're doing big
00:00:34.800 | deals fast, that's an amazing place to be. But the one quadrant that doesn't work at all is when
00:00:40.000 | you're doing small deals slowly. If you're in that quadrant, you don't really have a business model.
00:00:45.120 | You need to go back to the drawing board and work on either your product market fit or figuring out
00:00:49.440 | your go-to-market model. If you're going to do small deals, you need to stack them up fast.
00:00:53.200 | In sales, it's all about getting to an efficient,
00:00:56.400 | repeatable motion. You got to make sure that the juice is worth the squeeze.