Price's Law and Its Impact on Hiring and Retaining Talent
Price's Law and Its Impact on Hiring and Retaining Talent
The phenomenon that impacts all teams, yet is rarely discussed openly.
Hello and welcome to The GTM Newsletter - read by over 52,000 revenue professionals weekly to stay up-to-date and scale their companies and careers. GTMnow is the media brand of GTMfund - sharing go-to-market advice from the top 1% of revenue operators including the 350 executives behind the fund, news, and our viewpoints from working with hundreds of portfolio companies.
Brought to you by Apollo.
Over 3 million Apollo users, including rapidly growing enterprise ones like Mutiny, use Apollo’s lead database, multi-channel outreach, call recording, and analytics, to grow revenue and streamline busy work. If your sales team has 20 plus reps, we’re confident Apollo could be a game changer for you. Topping the list of most-loved sales platforms, Apollo has a 4.8 star rating on G2 backed by over 7,300 verified reviews. Interested to learn more, click here.
Hiring, Scaling, and the Impact of Price’s Law
He scaled Procore over 8.5 years from $10m to over $900m+ in revenue, the team from 30 to 1,500 people, and took it public on the NYSE. He served as Executive Vice President of Sales and Chief Revenue Officer.
On the outside, they were crushing it. On the inside, Dennis Lyandres was having feelings of failure.
When there were 100 people at the company, about 15 people were disproportionately epic. Once they hit 500 people, the number of disproportionately epic individuals had only increased to a maximum of 30 people.
Dennis thought his "hit rate" for hiring exceptional individuals was dropping, creating feelings of failure. Turns out that when he spoke with other leaders, this was normal.
Why? A phenomenon called Price’s Law - let’s get into it.
Price’s Law
Price's Law states:
"the square root of the number of employees in a company do about half the work"
Meaning, it’s actually a small fraction of people drive half the productivity.
Let’s do the math:
In a 10-person company, about 3 people (square root of 10) are responsible for 50% of the output.
In a 100-person company, 10 people will be doing half the work.
In a 1,000-person company, it’s just 32 people.
So, in larger teams, the ratio of high-output individuals doesn't scale at the same pace as headcount, making it seem like fewer “rockstars” are emerging.
This means as your company grows, finding and retaining these key individuals becomes even more critical. These are the people driving the work that truly moves the needle.
Programming the retention of key people
The mission: find and retain your key people.
While not widely discussed, some revenue leaders are creating programs that formalize incentives to support the retention of these key people.
Steve Jobs notoriously had such a program, which was called “T-100.”
Four key program areas emerge:
Connect them with leadership regularly.
Build cross-functional relationships by introducing them to other high performers.
Challenge them with the toughest problems.
Ensure their compensation and career growth reflect their contribution.
At a certain scale this doesn’t make sense, but once your company hits around 100 people, considering formalizing this process can.
While it’s normal for a small number of individuals to drive the majority of the work, recognizing and empowering them can have a disproportionate impact on your company’s success.
Tips for hiring the best people from top operators
“I think the over-rotation towards domain expertise or hiring someone just because they were at a hot company is misguided. What matters is hiring someone with the growth mindset who has seen scale.”
- Dennis Lyandres (previous CRO, Procore)
“We test for grit, we test for collaboration, we test for growth mindset...that means folks are very team-oriented, eager to embrace change.”
- Elizabeth Pemmerl (CRO, GitHub)
“You need people that are aggressive, people who have that can-do mentality. But I think the people that also can bring substance really stand out.”
- Matt Breslin (CRO, Upland)
“Hire folks that challenge you, not somebody that you know more than.”
- Noah Marks (SVP & Head of Commercial Strategy and Operations, Diligent)
“Top talent wants to go where things are buttoned up and streamlined. They want to be where they can make a contribution, move the needle, and do better in their own right and in their own career.”
- Ralph Barsi (VP of Sales at Kahua)
If you share on social, make sure to tag GTMnow so we can see your takeaways and help amplify them.
📹 Upcoming digital live events
The Future of Outbound: An Ecosystem-Led Approach - September 24th at 10am PST / 1pm EST
The $1B Sales Leadership Methodology - October 10th at 9:30am PST / 12:30pm EST
👂 More for your eardrums
The GTM Podcast - subscribe on Apple, Spotify, YouTube or wherever you listen.
Leandra Fishman is the Chief Revenue Officer at Apollo.io, a leading go-to-market solution for sales and marketing teams. Apollo.io is one of the fastest-growing companies in SaaS, with 9x ARR growth since 2021 and currently valued at $1.6 billion. Leandra brings over 30 years of experience to Apollo.io. Most recently, Fishman was the CRO at Intercom, which during her tenure ranked No. 35 on the 2022 Forbes Cloud 100 List with over $200 million in annual revenue. Previously, as the SVP of Sales and Success for SendGrid, she led the company through a successful IPO and helped double its market cap in its first year as a public company. As an executive consultant, she has executed projects ranging from developing sales and marketing strategies for startups to creating business plans and serving in an advisory role for venture capitalist firms and board members.
👀 More for your eyeballs
How to build more pipeline in 2024: tactical ideas from revenue leaders at Carta, G2, Jellyfish, Miro and more. This was a collaboration piece between our network of GTM leaders and Kyle Poyar. It provides insight and inspiration around the question everyone is asking: how do we build more pipeline for the rest of the year?
If you can't delegate, you can't scale. Delegation isn't just about offloading tasks, it's about building a scalable team that can achieve more together. Growth demands more than just hard work; it requires smart work. Delegation isn't an option, it's a necessity.
🚀 Startups to watch
Operator - launched online and in person, which is GTMfund’s first incubated company. Request early access and see how Operator is taking the world back to 2 touches meant to attract buyers into conversations that convert, instead of 20 touches meant to make sure you hit your activity number.
AudiencePlus - closed a $7.3M round of financing led by Emergency Capital, High Alpha, and PHX Ventures. This round will enable them to double down on their R&D resources to accelerate their value creation for customers, while also investing in marketing programs to educate the industry around owned media best practices.
🔥 Hottest GTM jobs of the week
Senior Manager, Strategic Customer Success at Vanta (Remote - US)
Director, Field Marketing at Atlan (Remote - US)
Sr. Demand Generation and Integrated Marketing Manager at ModelOp (Remote - US)
GTM Enablement Manager at OfferFit (LATAM - CAN - Remote)
Sales Development Representative at Tavus (San Francisco - Remote)
See more top GTM jobs on the GTMfund Job Board.
If you’re looking to hire incredible startup talent, reach out to our search firm partner as a resource: Integrity Power Search (IPS). They are also available to support candidates looking for their next startup opportunity.
🗓️ GTM industry events
Upcoming go-to-market events you won’t want to miss:
GTMfund Dinner: September 17 (Boston, MA)
INBOUND: September 18 - 20 (Boston, MA)
GTMfund Annual Retreat: October 4 - 6 (San Diego, CA)
GTM Summit by Pavilion: October 14 - 16 (Austin, TX)
I mentioned an exciting upcoming announcement last week. Well, Operator.ai is now unveiled, which is GTMfund’s first incubated company. Keep your eyes peeled for a deep dive behind the scenes, including the launch event that I shared a few pictures of here.
✌️ Scott