Back to Index

David Sacks on the Importance of Deal Velocity in Sales


Transcript

When it comes to sales, how do you know whether closing a tough customer is worth the effort? Here's a framework for how to think about that. This is a two-by-two quadrant. On one axis, we have the deal size or ACV, annual contract value. The deal can be small or large.

And on the other axis, we have deal velocity, which can be fast or slow. It's fine to be in the top left corner where you're doing lots of sales really fast of a small dollar amount. Or you can be in the bottom right corner where you're doing enterprise deals, which are large ACV deals, but they take longer to close.

Obviously, if you can be in the top right where you're doing big deals fast, that's an amazing place to be. But the one quadrant that doesn't work at all is when you're doing small deals slowly. If you're in that quadrant, you don't really have a business model. You need to go back to the drawing board and work on either your product market fit or figuring out your go-to-market model.

If you're going to do small deals, you need to stack them up fast. In sales, it's all about getting to an efficient, repeatable motion. You got to make sure that the juice is worth the squeeze.