RVNU #001: 4 Phases of Startup Growth
Defining a B2B SaaS startup's path towards escape velocity
AI Audio Discussion of this Newsletter
Howdy 👋🏼
Welcome to the first official Zero to RVNU newsletter, thanks for being an OG!
Our mission is democratize access to GTM expertise that is proven and validated to support ambitious startup founders to grow revenue in a fast, repeatable and sustainable fashion.
For those that don’t know me, I have led the build of rapid and profitable revenue growth at start ups in the US, Europe and Asia, from $0 to ~$20M in ARR dating back to 2009. I’ve been selling new and disruptive SaaS products in startups since 1998. Of the companies I’ve worked at: Hitwise was acquired for ~$240M, Kelkoo for ~$580M, Maxymiser for ~$160M, Criteo IPO’d at $1.7B. Others such as Guidebook and Wonderschool remain private but doing well at the time of writing.
I also invest as part of my consulting engagements and as an angel investor. I’m proud to have firms such as Brightwheel, Upfront, Contractor Commerce, Civic, Sweeten Enterprise, Crowdcube and Mentava in my portfolio.
My co-founder Laura has been building successful revenue operations organizations since 2017, and oversaw operations in one of Tableau’s fastest growth sectors from inception to IPO.
We will tag-team writing this blog, and we’ll also have some guest appearances from industry leaders. This will be a free resource you can rely upon to provide you with consistent advice and opinion grounded in success.
We intend giving hard-hitting, practical advice based on 40 years of combined experience that you can apply both strategically and tactically into your businesses immediately.
I want to kick off this blog by providing you with an overview of the framework that has been central to my back-to-back successes in venture backed SaaS startups, and has been the backbone of my engagements as a consultant to ambitious SaaS founders the past 3.5 years.
Thanks for reading.
Wayne
The 4 Phases of Startup Growth
When I first speak with a founder, they are typically struggling to make sales work, but claim to have product market fit. The general reason why they are struggling is that they have missed critical steps in the startup growth journey, creating go-to-market debt (GTM debt).
The RVNU Startup Growth Framework provides a structured approach and common language to guide founders and their executive team through the four phases of growth—Idea Market Fit, Product Market Fit, Go-to-Market Fit, and Scale—ensuring that each stage of development is strategically aligned with the ultimate goal of building a sustainable, high-growth business.
Fig 1: 4 Phases of Startup Growth
Key Errors the Framework Prevents
Premature Scaling:
Founders often make the mistake of scaling their sales teams before achieving true Product Market Fit. This leads to wasted capital and major runway reduction. The framework ensures that scaling occurs only after critical milestones are met —like a critical mass proof of value exchange, which prevents founders facing the sceptre of a reduction in workforce actions and down rounds.
Misaligned Quotas:
The framework addresses a common issue where account executives (AEs) have unrealistic personal quotas. Hiring AEs into a lead famine is the easiest way to decimate culture in a startup. The framework tests both your readiness for hiring and your realism on quota setting.
Furthermore, the framework supports the founder being the revenue leader for longer. Premature abstraction of the founder from front-line sales has disastrous secondary effects across the whole business, especially in product development.
Lack of Strategic focus:
There’s always an urge to forge ahead in startups. The pressure for growth is real, but also the urge to tend to every fire in the business is real too. These distractions lead to a lack of focus and this ruins execution. The framework provides clear guidance on when you are ready to do things like, start role specializing in sales, which is code for building your first sales pod, for example: an SDR, 2 AEs and a CS associate.
Key Stakeholder Framework Usage - Insights
Since deploying this framework 3 years ago, this is how these key stakeholders have been using it:
Founders/CEOs
As the visionary and strategic leader of the startup, the founder/CEO must navigate the complex journey of scaling the business. Today, most still follow their gut for far too long, which presents huge risk. This framework provides a roadmap that highlights when to pivot, when to scale, and how to manage growth sustainably.
Considering a pivot is difficult to comprehend for many founders, however some of the world’s most successful startups found their ability to scale in adjacent markets to their original hypothesis.
The framework takes a first principles approach to building a real business, and ensures founders are spending their time and capital in areas that position them for sustainable long term growth.
Capital Allocators (VCs/Private Equity)
In the zero interest rate policy period (ZIRP) from 2008 - 2020 and now with the AI bubble, capital allocators got lazy. Due diligence practices of the past made way for faster capital deployment, which has led to startups being funded prematurely. Many should never have been funded at all.
The below chart shows the GTM maturity of a number of series A funded ($10M+) startups who claim to have product market fit, but are struggling with sales.
Fig 2: The sterotypical GTM debt at Series A spectrum based on the RVNU data set
They were funded prematurely and now face existential threats. This is not good for the founder or the capital allocator.
The framework allows capital allocators to make a quick baseline assessment about whether the startup is truly in the position the founder suggests.
In just 20 minutes they receive guidance about the relative health and maturity of their potential investment, which the goal of better educating the investor about the risk and opportunity the investment presents. The knock on effect is that VCs using the RVNU framework will add cents on the dollar of their investments.
Revenue Leaders (CROs, VPs of Revenue, VPs of Sales, VPs of Marketing, VPs of RevOps)
Revenue leaders are responsible for driving the sales team’s performance and ensuring that revenue targets are met. The framework provides a strategic approach to building and scaling a sales team, focusing on role specialization and process optimization. By aligning team quotas with the startup’s growth phases, revenue leaders can create a high-performance culture that drives both short-term results and long-term growth.
The framework impartially aligns the revenue leader with the founder, fellow members of the executive team and the board of directors, which creates a foundation of longevity for the revenue leader.
Individual Contributors (SDRs, AEs, CSAs, RevOps, Demand Gen/Marketing)
AEs and their supporting cast of DemandGen/Marketing, SDRs and RevOps play a crucial role in driving revenue, but individual quotas can sometimes lead to a focus on short-term wins rather than long-term growth. The framework emphasizes the importance of achieving Product Market Fit before scaling sales efforts, ensuring that AEs are working within a system designed for sustainable success. By aligning their efforts with the overall strategy, AEs can achieve their targets while delivering the CS org revenue they can confidently renew and expand therefore contributing to the startup’s broader growth objectives.
Summary:
The 4 Phases of Startup Growth framework is not just a proven roadmap for scaling a business; it’s a strategic tool designed to align the efforts of founders, investors, revenue leaders, and account executives with the overall mission of the startup. By preventing common errors and ensuring that each stage of growth is met with the right strategy and resources, the framework sets the foundation for sustainable, profitable growth.
I’ve used a version of it informally for 25+ years, and formally since 2009. Without it I would never have achieved the success I have in my career to date.
I’m thrilled so many of you have deployed it across your startups with great results already. I’ll be diving deeper with more guidance in every future newsletter, and Laura will be adding her RevOps perspective to add further depth to support your practical application of the framework.
You got this 👊🏼
Wayne
Founder & CEO
RVNU