Breaking into GTM

I have been handed a comp plan. How do I work out what I will actually earn?

The short answer

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 realistic bookings by the commission rate and add the base, because OTE assumes you hit 100 percent and most teams do not. Then read the fine print that decides whether the plan is honest: does commission pay on booking or on cash collected, is there a clawback if the customer churns in 90 days, is there a cap, and what happens during ramp. If quota is more than about five times your OTE, or the ramp period pays nothing, negotiate now rather than discover it in month four.

Go deeper, your way

4 hand-picked resources, 1 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

The same ground, at another level

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

Terms in this answer

People also ask

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

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