year deal, with quarterly pre-payments), and incentives for more favorable cash flow terms (such as multi-year pre- payments). You should think of account management as a sales function, and that group should be compensated in a similar fashion – but modeled on your CMRR and churn assumptions instead of a new CMRR sales quota. You’ll typically find that the compensation plans are weighted more heavily to base (~75-80%) with less bonus upside, whereas standard “hunter” compensation plans are typically 50% base and 50% commission at quota. To create a repeatable sales process, focus is also critical, which typically means that you should restrict yourself to your core market. If you’re based in North America with a direct sales model (in person and/or tele-sales), prove your business in North America first. Channels are hard in Cloud Computing in general, and if you can’t sell it yourself then it’s unlikely others will be able to sell it more effectively for you. Only after reaching $1M in CMRR should you invest heavily in channels or international expansion. If you’re a freemium business or enjoy viral adoption more broadly, you may want to consider regional marketing and/or support resources in other regions earlier in the life of your business, but avoid becoming over extended before nailing your home markets. You can think of this as a “bowl- ing pin” strategy on a geographic basis, or good military strategy by avoiding concurrent wars on multiple fronts; it’s also good business strategy for Cloud Computing. Finally, do not confuse any of this with a message to build your business slowly or to under-invest in sales or market- ing. In fact, it’s quite the opposite. The 5 C’s of Cloud Finance and the Sales Learning Curve are tools to help you know when and how to invest aggressively to maximize the business’ long term value creation with the least dilution for you as the executive team. If the metrics are strong, you will be able to finance the business at very attractive terms. You will actually be destroying value if you don’t invest behind success when the ROI is strong. #7 Make online sales and marketing a core competency You’re a cloud business, so by definition, your sales prospects are all online. Savvy online sales and marketing is a core competency (sometimes the only one) of every successful cloud business. Amir Ashkenazi Numerous studies show that your customers are now doing most of their primary re- CEO, Adap.tv search online, and this should not surprise you. As a consumer, you wouldn’t imagine “We’re still in the very early days buying a car, making an offer on a home, planning a vacation, or completing other large of the online advertising revolution purchases without doing some research online. The same is now true for executives at and the flood of dollars continue your target customers. You should therefore be aggressive in marketing to them online. to move to online display, video, mobile, and social at rapid rates. Your prospects are online, so your This is a clear example where business-to-business (B2B) marketers need to learn from marketing and sales efforts should their business-to-consumer (B2C) counterparts. The most innovative B2C companies be as well.” Bessemer Venture Partners 17