Breaking into GTM

I am a founder writing my first sales comp plan. What is the simplest thing that works?

The short answer

One page, one number, one rate. Base plus variable at roughly 50:50 for a closer, a single quota on new ARR, a flat commission rate, and an accelerator above 100 percent. Do not bolt on four modifiers for margin, product mix and multi-year, because at three reps you cannot measure any of it and the rep cannot compute their own paycheck, which is the actual failure. Pay on booking with a clawback if the customer leaves in the first quarter, so cash flow and behaviour are both protected. Then leave it alone for a full year even when it is slightly wrong, because changing comp mid-year costs more trust than the imperfection costs money.

Go deeper, your way

4 hand-picked resources, 2 India-specific, 4 link-checked. Pick how you want to dig in.

✍️ Essay
✓ Link checked Free Intermediate

Why we picked it The clearest arithmetic anywhere on rep economics: the rule of 10 for quota against base, four months to productivity, draws during ramp, and why teams attain about 70 percent of quota capacity so you must plan over capacity.

Simple Math to Set Up a Sales Team

From Craft Ventures by David Sacks 12 min read

Open sacks.substack.com →
📄 Article
✓ Link checked India Free Intermediate

Why we picked it Written for Indian SaaS founders by the Everstage CEO, ex Freshworks. It gives the working numbers: quota period must be at least the sales cycle, quota to OTE around 5 to 6x, and two thirds of reps landing between 80 and 100 percent attainment.

Getting the Quotas Right for Your SaaS Sales Teams

From SaaSBoomi by Siva Rajamani 10 min read

Open saasboomi.org →

The same ground, at another level

How comp, quotas and territory reads from a different seat.

How do I set quotas that most of the team can actually hit? Set them top down and bottom up, and treat the gap between the two as information rather than a negotiation. Top down is the revenue target divided... Doing the work 4 resources → How do I build a comp plan that pays for the strategy we actually have this year? Write the strategy in one sentence first, then make the plan pay for that sentence and nothing else. If this is a new logo year, pay heavily on new... Leading a GTM team 5 resources → What does best-in-class quota attainment actually look like, and what does the shape tell me? Read the distribution, not the average. Top quartile organisations get 65 to 75 percent of reps at or above quota in a given quarter, the median B2... How the best do it 4 resources →

Terms in this answer

Cash Flow MRR

People also ask

I have been handed a comp plan. How do I work out what I will actually earn? Ignore the OTE headline and find four things: the base, the quota, what percentage of a deal you get, and when you get paid. Multiply your realisti... Breaking into GTM 5 resources → What do OTE, pay mix, accelerator, draw and clawback actually mean? OTE is base plus variable if you hit exactly 100 percent of quota, nothing more. Pay mix is how that splits: closing roles are usually around 50:50... Breaking into GTM 4 resources → What is a fair quota for my first rep when we have no history to go on? Start from cost, not from ambition. The common anchors are quota at four to six times OTE, or David Sacks's rule of 10 where quota is about ten tim... Breaking into GTM 4 resources → How do I set quotas that most of the team can actually hit? Set them top down and bottom up, and treat the gap between the two as information rather than a negotiation. Top down is the revenue target divided... Doing the work 4 resources → How should SDR, AE and customer success comp actually differ, and why? Pay variable in proportion to how much of the outcome the person controls. An AE controls the close, so around 50:50 with a real accelerator. An SD... Doing the work 4 resources → Do SPIFFs work, or do they just teach the team to wait for the next one? Both, depending on how often you run them. A SPIFF is a tactical lever for a specific short window: a product launch, a stalled segment, a quarter ... Doing the work 3 resources →

Also in Starting Up

The same ground, over in Co-founders, team & legal, our Starting Up track.

Do I actually need a co-founder, or can I go solo? You don't strictly need one, but the data says teams outlast solos: complementary skills, shared load, and someone to argue you out of bad calls al... 3 resources → How should co-founders split equity fairly? For most early teams, split close to equal, an even split signals you see each other as true partners, and long-term contribution rarely matches wh... 3 resources →
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