I’t seen four stages in early stage software companies. Some companies employ all four, others just use one or two. Knowing about the options ahead of time might help you figure out the right sales strategy for your own startup.

Stage 4: Long Term Quota
You might have a handful of customers and a sales leader in position; perhaps some revenue and a couple of account executives. The sales staff costs money, and the question before the business is: how can you know what quota strategy to assign to the account executives?
Bill Binch, former SVP at Marketo, employed this strategy from the first days. Quotas weren’t they had been just a number. “Could you close six accounts this year worth greater than $30k each year? ” That’s a symbol. Logo established quotas enable AEs with flexibility empower AEs to develop confidence in their approaches, construct the foundation of logos for promotion and fundraising, and to discover clients in new ways.

In the earliest stages t even understand how to sell or how to price. The most significant goal isn’t price maximization, but just closing some small business. While the company figures out the earnings process, many teams in this stage guarantee a draw/salary for its account executives, instead of assigning a commission. The salary is influenced OKRs or by goals. The key idea: MBOs enable AEs to experiment with new methods to find the right one.

Long term quotas are yearly quotas. At this point, the company has a design set up which includes most of the key factors: ramp time, sales cycles constant pipeline creation. And the company is confident in its ability to prepare existing and new account executives to succeed.

Phase 2: Logo According Quota
Any compensation plan’s objective is to ensure account executive success at every stage. Handling these plans will permit the company to sponsor new AEs since the current ones excel. Additionally, since the company grows, altering the commission plans enables the business to balance commissions and AE achievement with runway and rate.

Stage 1: Management by Objectives
a bit is changing, as the company transitions from Phase 1 or Stage 2. Marketing is generating pipeline, which is probably coming in starts and fits. The company is currently hiring more account executives and determining the way to predict Sales Engineer/AE, ratios of SDR/AE and ramp time. During these periods of regular, the company can roll out a six month quota a term quota, and reserve the right to modify quota up or down based on functionality. By communicating this clearly at sales kickoff or through interviews, you can set expectations with the team.

Stage 3: Short Term Quota