The 5-phase framework that grew Outreach from $0 to $230M ARR
Lessons from Outreach's Journey to $230M ARR
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The 5-phase framework that grew Outreach from $0 to $230M ARR
Outreach’s first salesperson, Mark Kosoglow, played a pivotal role in driving the company’s growth from $0 to $230 million in ARR. Over the years, he built and scaled a world-class sales organization, creating a team that generated hundreds of millions in revenue.
This success was underpinned by five distinct phases of growth, each requiring a unique type of sales leader and leadership approach.
The Doer
The Builder
The Doctor
The Architect
The Communicator
These phases highlight the evolving traits and responsibilities a sales leader must adopt to match an organization's growth trajectory.
[Phase 1: The Doer] Hiring the first salesperson
Role: The first hire needs to be a hands-on “doer.” Their primary responsibility is selling and generating revenue without worrying about other aspects like product meetings or board discussions.
Key characteristics: They must have the ability to execute independently, focus on sales, and have a clear role defined by the founder (e.g., seller, head of sales, or commercial cofounder).
Example: Mark achieved $1 million in sales in six months as Outreach’s first hire on a 100% commission basis.
In those scrappy early days, the first sales hire sets the tone for your entire go-to-market engine.
This initial "doer" isn't just another rep, they're the foundation on which you'll build momentum. Finding someone with an unwavering drive and a network to kickstart that first high-caliber team. Grit, passion, and relentless belief are all important at this stage.
Mark's advice? “If your first hire can't hire their first team of people they know, they shouldn't be your first sales hire unless you're just hiring a seller.”
[Phase 2: The Builder] Establishing sales processes and culture
Role: After initial revenue growth, the doer transitions to a builder. They focus on creating the initial sales team, building processes, and establishing a sales culture.
Key characteristics: They should be capable of hiring and leading a cohesive team, ideally from their existing network, to ensure trust and alignment.
Example: Outreach’s first sales team comprised Mark’s trusted friends and acquaintances who stayed for years and contributed significantly to the company’s early success.
With that initial team humming, it's time for the "builder" phase – developing those critical sales processes and fostering a winning culture.
It’s important to avoid the common pitfall of hiring reps before having enough pipeline. Instead, push them a couple deals more than their threshold, and then hire another rep into the pipeline. For Outreach, that threshold was 25 deals.
[Phase 3: The Doctor] Hiring for capacity
Role: As the organization scales, the sales leader must become a doctor, diagnosing and solving specific issues in the sales process and team dynamics.
Key characteristics: They must identify bottlenecks, prescribe fixes, and implement changes to maintain performance.
Example: Outreach implemented a system where they hired new reps only after existing reps hit a threshold of active opportunities, ensuring the sales pipeline remained balanced.
Reaching around $10 million ARR, most startups face a pivotal crossroads: do you hire ahead of demand to fuel future growth or risk being perpetually understaffed?
That's when you go from being a builder to a doctor. In this phase, the "doctor" leader must diagnose organizational constraints and prescribe proactive solutions – primarily by hiring for future capacity.
Meaning, hire ahead to create capacity, then build demand to fill it.
This is often the opposite of what you do up this point, where you’re building pipeline first.
Outreach went to around $25M under this stage.
[Phase 4: The Architect] Building the sales organization
Role: The leader evolves into an architect who designs the blueprints for scalable sales processes and organizational structures. The focus shifts to creating a cohesive organization with second-line leaders who can sustain and adapt the company’s culture.
Key characteristics: They focus on long-term planning, interdepartmental collaboration, and creating resources that enable the sales team to operate independently.
Example: By structuring the team for scalable growth, Outreach reached $50 million ARR. They developed a unified but nuanced culture across different teams, enabling smooth transitions for reps moving between segments.
With that capacity in place, it's time to evolve into the "architect" – the visionary responsible for designing and scaling the sales organization itself.
As Mark puts it, “You're no longer looking at the plans and building. You're the one that's responsible for the blueprints.”
This phase is about hiring second-line leaders—directors and VPs—who can carry the cultural torch while managing their own high-performing teams.
Culture becomes the engine. Each segment, whether SMB, mid-market, or enterprise, has its own nuances, but they all share a familiar core. The goal is fostering an organization filled with second-line leaders that can create their version of your culture, but it still feels good.
[Phase 5: The Communicator] Aligning for strategic change
Role: The leader becomes a communicator, aligning the entire organization toward a common goal, such as moving upmarket or entering new market segments.
Key characteristics: They must clearly articulate the strategy, rally cross-functional support, and drive company-wide initiatives.
Example: Outreach’s shift to enterprise sales required an “enterprise state of mind” across all teams, emphasizing company-wide commitment rather than relying solely on experienced enterprise sellers.
As the organization matures, the leader must become a "communicator," aligning cross-functional teams around strategic priorities—especially when moving into new markets or upmarket opportunities.
This phase is the most transformational. This phase requires a leader who can articulate a clear vision, rally support across departments, and communicate the why behind strategic shifts. It’s about changing the company’s DNA, not just the sales team’s approach.
At GTMfund, we’re deeply committed to helping our portfolio companies build world-class teams. To date, we’ve facilitated over 1,000 candidate introductions, resulting in many pivotal hires. To scale this support and extend it beyond our portfolio to the broader SaaS ecosystem, we’ve partnered with Pursuit - a leader in go-to-market talent acquisition. This partnership enables companies to access top-tier talent on a non-retainer basis, ensuring flexibility and quality without unnecessary overhead.
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