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Date: Fri, 13 Sep 2024 21:26:27 +0000 (UTC)
From: Collin Stewart <predictablerevenue-newsletter@mail.beehiiv.com>
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Subject: benchmarking Rippling's product market fit
Reply-To: Collin Stewart <collin@predictablerevenue.com>
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To: "andrew@sterlingcal.com" <andrew@sterlingcal.com>

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Good morning Andrew,=20

tl;dr

* Matt Plank=E2=80=99s (CRO @ Rippling) talk at SaaStr gave me the idea of =
using their sales development efficiency numbers as a benchmark for their p=
roduct market fit

* 50% of their revenue has come from outbound and they=E2=80=99re forecasti=
ng 60% for the future

* If my assumptions are correct, Rippling gets 138% more revenue from a BDR=
 than Outreach and a large part of that is stronger product market fit=20

I attended SaaStr this week and wanted to share some observations from my f=
avourite talk. Sam Blond (former CRO at Brex) interviewed Matt Plank (CRO a=
t Rippling) about Rippling=E2=80=99s early growth and what they=E2=80=99re =
doing now. The two comments that stood out for me were =E2=80=9C_outbound p=
roduces 50% of our revenue today and we=E2=80=99re forecasting it to be 60%=
 moving forward_=E2=80=9D and =E2=80=9C_programmatic outbound produced a .5=
% - 1% conversion to meeting_=E2=80=9D. It was refreshing to hear when it f=
eels like everyone has been dunking on outbound for the past few years. The=
 second stat blew me away, they=E2=80=99re hitting conversion rates for pro=
grammatic emails that we were seeing 10 years ago. Given the publicly share=
d data on their growth, I thought that calculating their sales efficiency a=
nd comparing it to another company's could serve as a proxy for measuring t=
he strength of their product-market fit. What follows is my attempt to do j=
ust that. I=E2=80=99ll use Outreach as a comparable because I know the comp=
any well enough to say they have a very strong sales organization.=C2=A0

Some context before we dig in. Rippling sells tools for HR managers, they h=
ave a broad platform and offer over 30 different individual products. A lar=
ge percentage of their deals are small to medium dollars and tend to be a f=
ast moving sale. The market they sell into is quite large, most HR managers=
 will find something that Rippling can help them with. As a comparable, Out=
reach sells to sales teams which is an equally large market, their platform=
 is a little more focused than Rippling=E2=80=99s, and their deal sizes are=
 likely similar from what I can tell. This is not an ad for either, I just =
thought the context was important before we look at their outbound strategy=
.

**Outreach=E2=80=99s Outbound**

I=E2=80=99ve interviewed 4 sales leaders from Outreach over the past few ye=
ars and most were focused on outbound. Outreach followed a similar path fro=
m programmatic to personalized sales development and while there are differ=
ences their processes and team quality are similar enough to act as a compa=
rable. Check out this interview with [Steve Ross](https://open.spotify.com/=
episode/30P41vVTEdQ9WSGqUMPAKH?si=3DqKY1BmQFTSGGM97T5H5HiQ&nd=3D1&dlsi=3Dbc=
a8fa8e48ba4e1f) for more.=C2=A0

**Rippling=E2=80=99s Outbound**

Rippling has used two different styles of outbound, programmatic and person=
alized. They started outbound around 2017 with programmatic outbound, where=
 marketing was writing the email templates, orchestrating the sends, and an=
 inbound rep was handling the replies. This is the playbook Parker used at =
Zenefits so effectively so it=E2=80=99s not that surprising. What was surpr=
ising was that it was generating a 0.5% to 1% conversion rate to a meeting =
as late as 2022. These are numbers that teams with SDRs personalizing each =
email are achieving and Rippling is doing it with fully automated emails.=
=C2=A0

**How?**

The next question that came to mind was =E2=80=9Chow are they getting such =
great meeting booking rates=E2=80=9D? There are three possible explanations=
, the market is huge, their team is incredible, or they have incredibly str=
ong product market fit. I=E2=80=99ll use the=C2=A0

**Huge Market Hypothesis=C2=A0**

Most companies won=E2=80=99t be able to replicate Rippling=E2=80=99s result=
s because they aren=E2=80=99t selling into a market that=E2=80=99s big enou=
gh to support an email campaign of this size. Matt shared that they relied =
on programmatic outbound for 50% of their growth since founding. There are =
hundreds of thousands of HR leaders that could be targets, depending on how=
 they define their ICP.=C2=A0

In 2020, they were close to [$36m](https://blog.getlatka.com/rippling-reven=
ue-customers/) and in 2024 they were reported to have [$350m](https://www.t=
heinformation.com/articles/in-hr-software-battle-rippling-makes-up-ground-a=
gainst-deel-at-a-cost). I=E2=80=99m going to assume their current average c=
ustomer value is $30k / year because they reported 2000 customers on $36m i=
n the first article ($18k ACV) and they=E2=80=99ve nearly doubled the numbe=
r of features on their platform since then. This means that leading up to 2=
020, outbound had brought them 1000 paying customers. I=E2=80=99m also goin=
g to assume a higher than normal close rate (33%) because of the low price =
(compared to incumbents) and the general excitement behind any company Park=
er seems to start in the space.=C2=A0

To create 1k customers Rippling needed to contact 606k people to book 6k me=
etings, to create 3k opps, which turned into 1k customers ([check my math h=
ere](https://docs.google.com/spreadsheets/d/1dKDc4QroOPYcp41FTK3xdNcnroFRf8=
C_ySiVt95Qej8/edit?gid=3D0#gid=3D0)). Matt called out that in 2022, they re=
alized they couldn=E2=80=99t continue on this path because they were runnin=
g out of accounts to reach out to. While growth using programmatic outbound=
 is only possible in a big market like this, having a big enough market doe=
s not mean you=E2=80=99ll get it is not clear that it is the reason they we=
re getting strong conversion rates.=C2=A0

**Their Team is Incredible=C2=A0**

While I don=E2=80=99t personally know Matt, I have had the pleasure to inte=
rview 3 people that worked at Zenefits in the early days and I can say with=
 confidence that they were all top tier sales people and leaders. You shoul=
dn=E2=80=99t take my word for it so we=E2=80=99ll use their response to the=
 growth roadblock in 2022 as a proxy for team quality. A low quality team w=
ould keep doing more of the same and get worse results whereas a high quali=
ty team would find a way to push through and make it better.=C2=A0

In 2022, realizing their programmatic outbound weapon wouldn=E2=80=99t be a=
ble to continue driving the growth they needed, Rippling hired Ashley Kelly=
 to run their sales development rep (SDR) organization. Since being hired, =
Ashley has built a SDR organization with over 150 people. Keep in mind, the=
se are not all SDRs, there will be many layers of support folks within thos=
e ranks but my rough guess is 110 SDRs and 40 management, director, and sup=
port roles. When Ashley took over the SDR team, they moved to a personalize=
d approach, adding more human time into their process.=C2=A0

The result was a much more expensive organization (estimated $20m annual co=
st) but an increase in effectiveness to 3-7% conversion to meeting and an S=
DR organization they are now forecasting to generate 60% of their $350m in =
revenue. It=E2=80=99s clear that this team is incredible at their jobs. So =
the question is, if this team was selling a less competitive product into t=
he same market, would they generate the same results? While I think they de=
serve a lot of credit, I don=E2=80=99t think it=E2=80=99s fair to attribute=
 all of the glory to the revenue organization.=C2=A0

**Incredibly Strong Product Market Fit**

I can=E2=80=99t comment strongly on the product itself because I=E2=80=99m =
not a user, nor have I spent any time in the HR tech space. However, we can=
 learn a little by comparing Rippling=E2=80=99s results to Outreach=E2=80=
=99s benchmarks.=C2=A0

**Sales Nerd Stats, Feel Free to Skip**

[Outreach.io](https://Outreach.io), a company I know has a [strong sales de=
velopment program](https://www.outreach.io/resources/blog/the-science-behin=
d-managing-by-numbers) and strong product market fit, seems like a good com=
parison. Outreach expects 17 meetings a month from its SDRs which turn into=
 12 sales accepted leads (SAL). The average conversion from meeting to clos=
ed from an outbound opportunity was 23% in 2019 ([source: salesloft study, =
PDF](https://pages.salesloft.com/rs/432-WAJ-793/images/TOPO%202019%20Sales%=
20Development%20Benchmark%20Report.pdf?mkt_tok=3DeyJpIjoiTkdJMlpUWmtOelJtTm=
pRNSIsInQiOiJaa0RORTlFVllQUVRYVG9zTlZCK013ckM1T3h2cDV2ZGZ3UGw2aGN1c3BKRU90R=
kdhb1wvWWVPK1Jsa2dSbEo2b2NwZFlLQkkyMFlqWWNQR2JpXC9cL1ZtMWZkUEZkU2owcVRSSkNh=
WXlcL2dEaXJTZnBTeW9iTWtmcnZWMTJcL2tDSzZ0In0%3D)) which has likely gone down=
 by at least 50%. This means each Outreach SDR is producing 1.38 meetings e=
ach month or 17 closed-won deals each year. The average Outreach install is=
 around $20k so this means each SDR is producing $340k per year.=C2=A0=C2=
=A0

There=E2=80=99s a breakdown in language here because it=E2=80=99s impossibl=
e to tell if Matt was using meetings booked, meetings held, or accepted int=
o pipeline. As a CRO, I=E2=80=99m going to assume he only cares about the n=
umber of meetings accepted into pipeline and assume his 3-7% conversion rat=
e meant conversion to SAL. We know that Rippling had $350m in revenue in 20=
23, which represented [100%](https://sacra.com/c/rippling/#:~:text=3DSacra%=
20estimates%20that%20Rippling%20hit,from%20%24175M%20in%202022.) year over =
year growth, and their growth rate has been roughly [halving every year](ht=
tps://sacra.com/c/rippling/#:~:text=3DSacra%20estimates%20that%20Rippling%2=
0hit,from%20%24175M%20in%202022.) for the past 3 years. So we can assume th=
at they are targeting $500m in revenue for 2024, which is net $150m in grow=
th, or $90m in growth from outbound (at 60% mentioned above).=C2=A0 With $9=
0m in growth from outbound, each of their 110 SDRs are producing an average=
 $810k in revenue each year. Using my same quick math from [above](https://=
docs.google.com/spreadsheets/d/1dKDc4QroOPYcp41FTK3xdNcnroFRf8C_ySiVt95Qej8=
/edit?gid=3D0#gid=3D0), that means they=E2=80=99ve produced 3k customers, 9=
k opportunities, and 18k meetings by reaching 363k customers.=C2=A0

**Head to Head**

When we compare an SDR at each organization an Outreach SDR is producing $3=
40k whereas a Rippling SDR is producing $810k, meaning Rippling is getting =
138% more out of their SDR team. When compared head to head with a company =
with an equally large market, strong product market fit, and a strong sales=
 development program, Rippling beats them by 138%. A big part of the reason=
 must be the strength of their product market fit.=C2=A0

**Measuring Product Market Fit=C2=A0**

Sales efficiency isn't a perfect way of measuring the strength of product m=
arket fit but I do believe it is directionally correct, especially when you=
 have good comparables. It's certainly less valuable as a measure for compa=
nies with less revenue because they won't have the sales maturity yet. The =
default method seems to be asking users how they'd feel if they could no lo=
nger use your product. I don't have anything against this model other than =
it's extra work and at scale companies don't seem to do it consistently.=C2=
=A0

There, I did the thing and I'm happy we got there together. Thanks for read=
ing and let me know what you think. Is this a worthwhile mechanism? Was thi=
s a total waste of time?=C2=A0

Collin=C2=A0


=E2=80=94=E2=80=94=E2=80=94

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</style></head><body class=3D"a" style=3D"margin:0px auto;padding:0px;word-=
wrap:normal;word-spacing:normal;background-color:#FFFFFF;"><div role=3D"art=
icle" aria-roledescription=3D"email" aria-label=3D"email_name" lang=3D"en" =
style=3D"font-size:1rem"><table role=3D"none" width=3D"100%" border=3D"0" c=
ellspacing=3D"0" align=3D"center" cellpadding=3D"0" class=3D"gg"><tr><td al=
ign=3D"center" valign=3D"top"><table role=3D"none" width=3D"670" border=3D"=
0" cellspacing=3D"0" cellpadding=3D"0" class=3D"aa" style=3D"width:670px;ta=
ble-layout:fixed;"><tr><td class=3D"bodyWrapper" align=3D"center" valign=3D=
"top" style=3D"padding:10px 5px 10px 5px;"><table role=3D"none" width=3D"10=
0%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"center"><tr><=
td align=3D"center" valign=3D"top" style=3D"border:0px solid #FFFFFF;border=
-radius:10px;background-color:#FFFFFF;" class=3D"c"><table role=3D"none" wi=
dth=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"cent=
er"><tr><td class=3D"f" align=3D"right" valign=3D"top" style=3D"padding:20p=
x 15px;"><p> September 13, 2024 &nbsp; | &nbsp; <a href=3D"https://link.mai=
l.beehiiv.com/ss/c/u001.xDrLMY0giiSlGuELGCgU3vcTjpRMaSWzujUngxObjZYrCabQfdS=
8QeuInKYXW1f72MzaMrp1qIWx6hexZKssjadNJfmcGrhKNwKFI2xoEIhl3ekG-A7eivi8DgfCPB=
GNkP9OCJ3WZjdhHumlM7bRa2E-z7w2Gx1BGzrfYoBYom70bR49w1J8syOk03Ef5UC4ixXluUClj=
Nb0MVgr_rDRXHktgyF8E0YqUVKmdxQYQLf4jraqBetZh3o-PuUb9rgYeVcFwCkPZ3B480Lg_zvI=
U5Yhk7TNfN1EZa4Hf3hTsPOSvXtdJpoTrUdEbOYFUE8FS91wthYzz4oIAEdBEBBGz9XQL2rUGm0=
uk0U6tWZdnhrstAh2ns8JmcHJMYss9eR5gcaLJd53Ta1ddhyEZYzpMLFi4gTpfql-VtYHaXdehL=
9zn0kbk95nhtwDRALEtMJ9cyk2-GgoNa9LNSRGsf4aN_KAjS5xuFFZSaaHPH3kAK3LQE1OmXqOp=
IIQP5Qj-x9unl_eY0zoiHHEyO8iWk43rRB3CfpsY560slIo1cZTdqQrtjyo23WleEaBsvo7AYRF=
HZjpYKCg0bu5nGvZTzR81WOjlSwCwrL7Priypq8On-zRikay10q4uyF1OA47-HWGuGBY8jgxAUv=
DFPusUeuj_vThuE6TwfIIcNg3s5vmJO3GWfj725OwLGttKaRjwIkgm5iGGgW1QmTXSQofNCP4NI=
5Z2IL2WoY0kjo643OzC1oQjXB2yNyxFZKytcShrwitolt9V0k5J4HvARrASwXIkjvI5TI0N3QcW=
31Mx_X8qL4/49q/igbgzpt0Tcu3y718QtxsgQ/h0/h001.edkkCwp3jUTVJyYx-pN-7RurzKOEj=
UHmjz8tH61HJ_Q"><span class=3D"translation_missing" title=3D"translation mi=
ssing: en.templates.posts.email.v3.header.listen_online">Listen Online</spa=
n></a> &nbsp; | &nbsp; <a href=3D"https://link.mail.beehiiv.com/ss/c/u001.x=
DrLMY0giiSlGuELGCgU3vcTjpRMaSWzujUngxObjZYrCabQfdS8QeuInKYXW1f72MzaMrp1qIWx=
6hexZKssjadNJfmcGrhKNwKFI2xoEIhl3ekG-A7eivi8DgfCPBGNkP9OCJ3WZjdhHumlM7bRa2E=
-z7w2Gx1BGzrfYoBYom70bR49w1J8syOk03Ef5UC4ixXluUCljNb0MVgr_rDRXHktgyF8E0YqUV=
KmdxQYQLf4jraqBetZh3o-PuUb9rgYeVcFwCkPZ3B480Lg_zvIU_kaQQyIzPO5HJsTl9APsZZXj=
pL-Mrdpp_MLrsaIeDf9cKRk7reHMpE8QMrr2qZLwLBbFzH28k-LTKFSEihT96wiUKwi95IXOpSa=
4Jjah4arUo5G60xxJmR_rte5srq-ikk9aBos15uHxiEkjZP3EXb-EUG5aCZFxkMecRtTehjLeHu=
UDRc2iCYIA5kUBgmt5RTiRLhpXowwVI-O9X7a5DoblXpEUxvNiXI9h9gryrypkVMXGl3GDOtwmO=
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HuvFQj-g5gFxKv6vdfeTLZEka4GHnM5udy7JCTkDsvAqBV02yYpmxqvX7tMPF8AV1bbBn3rvAOm=
U-G192u-XNIjvu6vxUF37Ik3XF-keUal6iTDqqw/49q/igbgzpt0Tcu3y718QtxsgQ/h1/h001.=
FBOxPJ10uBqf7k7__bylb4JxLEJgU97A3ZXyGYznvBo"><span class=3D"translation_mis=
sing" title=3D"translation missing: en.templates.posts.email.v3.header.read=
_online">Read Online</span></a></p></td></tr><tr><td class=3D"dd" align=3D"=
center" valign=3D"top" style=3D"padding:0px 15px 20px;"><table role=3D"none=
" width=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"=
center"><tr><td align=3D"center" valign=3D"top"><h1 style=3D"text-align:lef=
t;font-family:'Trebuchet MS','Lucida Grande',Tahoma,sans-serif;font-weight:=
Bold;font-size:32px;color:#2A2A2A;padding:2px 0;line-height:38px;"> benchma=
rking Rippling&#39;s product market fit </h1></td></tr></table></td></tr><t=
r><td align=3D"center" valign=3D"top" style=3D"padding:5px 15px;" class=3D"=
dd"><table role=3D"none" width=3D"100%" border=3D"0" cellspacing=3D"0" cell=
padding=3D"0" align=3D"center" style=3D"border-top:1px solid #EFEFEF;border=
-bottom:1px solid #EFEFEF;padding:15px;margin-bottom:15px;"><tr><td align=
=3D"left" valign=3D"middle" class=3D"mob-stack"><table role=3D"none" border=
=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"right" class=3D"social-=
mobile"><tr><td align=3D"left" valign=3D"middle"><table role=3D"none" borde=
r=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"left" style=3D"width:1=
00%"><tr><td align=3D"left" valign=3D"middle" style=3D"overflow: hidden;"><=
a style=3D"text-decoration:none;display:block;color:#989898;max-width:22px;=
border: 1px solid #EFEFEF;border-radius:50%;width:23px;height:23px;overflow=
:hidden;padding:7px 0 0 8px;position:relative;" href=3D"https://link.mail.b=
eehiiv.com/ss/c/u001.UY7-jEMcRLZ5W6M0bzLpmxH7-WTt-1gChtTcndEMyBoSwgSdDaOALV=
1MAeTHOBSUWCqEjdMxJtRDlZvsKnAu88Z1YRIslV1dQgAoGeH-LlK989xEpf95Db8ika45SlwhT=
cebUM9PZMOxcEU8EIFTSN0cgR6WiY60VX_v8VJNa9QkY4D_BQX-A2ndUN6ftGs0QQrmNiuAUnEK=
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kfSfjXCNvdv3kqMCUWeIHSmYNKIxAFJbCQI9Q6c_pKUXMAfwk-FE3XjwIv3tFHXcG_4ye9Xf5es=
ppUUZsiQApauqoWo4yN-CE3uKUDvSyg32_Pk29SMZ8aHL2TMIoPwLtVYLBApOyS37GvYlRKdw/4=
9q/igbgzpt0Tcu3y718QtxsgQ/h2/h001.S7-L_9oHy-DUztKgZUC3OGa7zwPHHdbpVlDJ7UBqs=
QY"><img style=3D"display:block;color:#000000;max-width:14px;" width=3D"18"=
 alt=3D"fb" border=3D"0" src=3D"https://media.beehiiv.com/cdn-cgi/image/fit=
=3Dscale-down,format=3Dauto,onerror=3Dredirect,quality=3D80/static_assets/f=
acebook_grey.png"/></a></td><td width=3D"14" style=3D"width:14px;">&nbsp;</=
td><td align=3D"left" valign=3D"middle" style=3D"overflow: hidden;"><a styl=
e=3D"text-decoration:none;display:block;color:#989898;max-width:28px;border=
: 1px solid #EFEFEF;border-radius:50%;width:21px;height:21px;padding:9px 0 =
0 9px;overflow:hidden;position:relative;" href=3D"https://link.mail.beehiiv=
.com/ss/c/u001.eT_HH9j2kUx6jXW0PHemwzOjQOpuqUKCn7LAbiCzlo1oxUN44u16xvalV9lC=
zdHNBiGxJ35W2JgtX9Xo4q8B-GD__4k5qsGMhwfulOnHCFJkG6AKUBTPgALaaXaYvjxsKA-jFSU=
UJEtsHgXgGSJWyeba7aXgfWelTrirKFGuE0dRYTC9fJl5z5GpBHEEH5cC_dWg2tp0_TH9EovnwY=
MynyNbhra2CpUoVNITpE1Pq8y0da4fMxvKhEHye2Va7rxG243_Bwk483bfff6kH14WWNZGlmBtJ=
sgBQWgL6r_uK4Wt6zXd2T6-SI8BEmmHGOh8FyEl43LFjDQ99KHIdGLZaBs2lZfcyUO9KFTAXIOR=
SHL_K8q9v8MWKGYEvk-U72J0koQ9Nn-sQJ5-wVVpf3qp_WjrQjqLiFu7R9uZEKyJem4/49q/igb=
gzpt0Tcu3y718QtxsgQ/h3/h001.-VHpltIXNSsEpIx6AFm6suCyNhccJebhGcUxTmxWAsk"><i=
mg style=3D"display:block;color:#000000;max-width:12px;" width=3D"18" alt=
=3D"fb" border=3D"0" src=3D"https://media.beehiiv.com/cdn-cgi/image/fit=3Ds=
cale-down,format=3Dauto,onerror=3Dredirect,quality=3D80/static_assets/x_gre=
y.png"/></a></td><td width=3D"14" style=3D"width:14px;">&nbsp;</td><td alig=
n=3D"left" valign=3D"middle" style=3D"overflow: hidden;"><a style=3D"text-d=
ecoration:none;display:block;color:#989898;max-width:28px;border: 1px solid=
 #EFEFEF;border-radius:50%;width:22px;height:23px;padding:7px 0 0 8px;overf=
low:hidden;position:relative;" href=3D"https://link.mail.beehiiv.com/ss/c/u=
001.UY7-jEMcRLZ5W6M0bzLpm5Vsol3-4mO68bGpSvtYIyCFMPHZM3NHfCQCEvGpU3U82219i03=
ZXpcWbsDp4yL-p1i7f6hDWNjIp0cw1236CySaO_b2JfvcqfWpJjaTinZwPqT1_vci0e7jxBohfG=
HEys2-XuvalnG0HoXdtInyYQjs3cFlN5LkWHgClE7eJqEQ3lX7ZlWrXE5pqepBYoxaFsAejst1a=
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fsOLV3YQdODKtoCbCS5hC4nRvFmc4aFAk5PAUl5yy_XVaZNWJ3B0Noq7oy_TB5jNPW0bWsRCesr=
zde796PMivMJtrK-OtOM9F48hxL2xnzQ4Bn5rK1oali10niO_ZsW5dv9MuK73Irz8jfkctZBuht=
QN/49q/igbgzpt0Tcu3y718QtxsgQ/h4/h001.3SCQsSa8oyEp4jkADJfgZKrOmkSUtbz3dgJ61=
3FfjnU"><img style=3D"display:block;color:#000000;max-width:14px;" width=3D=
"14" alt=3D"fb" border=3D"0" src=3D"https://media.beehiiv.com/cdn-cgi/image=
/fit=3Dscale-down,format=3Dauto,onerror=3Dredirect,quality=3D80/static_asse=
ts/in_grey.png"/></a></td><td width=3D"14" style=3D"width:14px;">&nbsp;</td=
><td align=3D"left" valign=3D"middle" style=3D"overflow: hidden;"><a style=
=3D"text-decoration:none;display:block;color:#989898;max-width:28px;border:=
 1px solid #EFEFEF;border-radius:50%;width:24px;height:24px;padding:6px 0 0=
 6px;overflow: hidden;" href=3D"mailto:?subject=3DPost%20from%20Predictable=
%20Revenue%3A%20Founders%20Edition&body=3Dbenchmarking%20Rippling%27s%20pro=
duct%20market%20fit%20%3A%20%0A%0Ahttps%3A%2F%2Fpredictablerevenue-newslett=
er.beehiiv.com%2Fp%2Fbenchmarking-rippling"><img style=3D"display:block;col=
or:#000000;max-width:26px;" width=3D"26" alt=3D"fb" border=3D"0" src=3D"htt=
ps://media.beehiiv.com/cdn-cgi/image/fit=3Dscale-down,format=3Dauto,onerror=
=3Dredirect,quality=3D80/static_assets/icon-email.png"/></a></td></tr></tab=
le></td></tr></table></td></tr></table></td></tr><tr><td style=3D"height:0p=
x;width:0px;"><div style=3D"height:1px;" data-open-tracking=3D"true"> <img =
src=3D"https://link.mail.beehiiv.com/ss/o/u001.QDl44NxZBc1mRkS74rGpGQ/49q/i=
gbgzpt0Tcu3y718QtxsgQ/ho.gif" alt=3D"" width=3D"1" height=3D"1" border=3D"0=
" style=3D"height:1px !important;width:1px !important;border-width:0 !impor=
tant;margin-top:0 !important;margin-bottom:0 !important;margin-right:0 !imp=
ortant;margin-left:0 !important;padding-top:0 !important;padding-bottom:0 !=
important;padding-right:0 !important;padding-left:0 !important;"/> </div></=
td></tr><tr id=3D"content-blocks"><td class=3D"email-card-body" align=3D"ce=
nter" valign=3D"top" style=3D"padding-bottom:15px;"><table role=3D"none" wi=
dth=3D"100%" border=3D"0" cellspacing=3D"0" cellpadding=3D"0" align=3D"cent=
er"><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-alig=
n:left;word-break:break-word;"><p style=3D"color: ;"><span style=3D"color:r=
gb(44, 62, 80);">Good morning Andrew, </span></p></td></tr><tr><td class=3D=
"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-break:br=
eak-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);">tl;=
dr</span></p></td></tr><tr><td style=3D"padding-bottom:12px;padding-left:37=
px;padding-right:27px;padding-top:12px;" class=3D"ee"><div style=3D"margin-=
left:0px;" class=3D"edm_outlooklist"><ul style=3D"list-style-type:disc;marg=
in:0px 0px;padding:0px 0px 0px 0px;"><li class=3D"listItem ultext"><p style=
=3D"padding:0px;text-align:left;word-break:break-word;"><span style=3D"colo=
r:rgb(44, 62, 80);">Matt Plank=E2=80=99s (CRO @ Rippling) talk at SaaStr ga=
ve me the idea of using their sales development efficiency numbers as a ben=
chmark for their product market fit</span></p></li><li class=3D"listItem ul=
text"><p style=3D"padding:0px;text-align:left;word-break:break-word;"><span=
 style=3D"color:rgb(44, 62, 80);">50% of their revenue has come from outbou=
nd and they=E2=80=99re forecasting 60% for the future</span></p></li><li cl=
ass=3D"listItem ultext"><p style=3D"padding:0px;text-align:left;word-break:=
break-word;"><span style=3D"color:rgb(44, 62, 80);">If my assumptions are c=
orrect, Rippling gets 138% more revenue from a BDR than Outreach and a larg=
e part of that is stronger product market fit </span></p></li></ul></div></=
td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-=
align:left;word-break:break-word;"><p style=3D"color: ;"><span style=3D"col=
or:rgb(44, 62, 80);">I attended SaaStr this week and wanted to share some o=
bservations from my favourite talk. Sam Blond (former CRO at Brex) intervie=
wed Matt Plank (CRO at Rippling) about Rippling=E2=80=99s early growth and =
what they=E2=80=99re doing now. The two comments that stood out for me were=
 =E2=80=9C</span><span style=3D"color:rgb(44, 62, 80);"><i>outbound produce=
s 50% of our revenue today and we=E2=80=99re forecasting it to be 60% movin=
g forward</i></span><span style=3D"color:rgb(44, 62, 80);">=E2=80=9D and =
=E2=80=9C</span><span style=3D"color:rgb(44, 62, 80);"><i>programmatic outb=
ound produced a .5% - 1% conversion to meeting</i></span><span style=3D"col=
or:rgb(44, 62, 80);">=E2=80=9D. It was refreshing to hear when it feels lik=
e everyone has been dunking on outbound for the past few years. The second =
stat blew me away, they=E2=80=99re hitting conversion rates for programmati=
c emails that we were seeing 10 years ago. Given the publicly shared data o=
n their growth, I thought that calculating their sales efficiency and compa=
ring it to another company&#39;s could serve as a proxy for measuring the s=
trength of their product-market fit. What follows is my attempt to do just =
that. I=E2=80=99ll use Outreach as a comparable because I know the company =
well enough to say they have a very strong sales organization.=C2=A0</span>=
</p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px=
;text-align:left;word-break:break-word;"><p style=3D"color: ;"><span style=
=3D"color:rgb(44, 62, 80);">Some context before we dig in. Rippling sells t=
ools for HR managers, they have a broad platform and offer over 30 differen=
t individual products. A large percentage of their deals are small to mediu=
m dollars and tend to be a fast moving sale. The market they sell into is q=
uite large, most HR managers will find something that Rippling can help the=
m with. As a comparable, Outreach sells to sales teams which is an equally =
large market, their platform is a little more focused than Rippling=E2=80=
=99s, and their deal sizes are likely similar from what I can tell. This is=
 not an ad for either, I just thought the context was important before we l=
ook at their outbound strategy.</span></p></td></tr><tr><td class=3D"dd" al=
ign=3D"left" style=3D"padding:0px 15px;text-align:left;word-break:break-wor=
d;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);"><b>Outreac=
h=E2=80=99s Outbound</b></span></p></td></tr><tr><td class=3D"dd" align=3D"=
left" style=3D"padding:0px 15px;text-align:left;word-break:break-word;"><p =
style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);">I=E2=80=99ve inte=
rviewed 4 sales leaders from Outreach over the past few years and most were=
 focused on outbound. Outreach followed a similar path from programmatic to=
 personalized sales development and while there are differences their proce=
sses and team quality are similar enough to act as a comparable. Check out =
this interview with </span><a class=3D"link" href=3D"https://link.mail.beeh=
iiv.com/ss/c/u001.G_FXh2WqEvTN6auln7aYy8RoHPMf9qr4czQJkASRA4YWFXCFXH62LBDkJ=
kEQtqWDfQyOQA3iTp_HZbnSUlMKyI_A9dTss_VbxSIk3WQquyL0XbxEWVVRbPKTnmYRt8E7_pvO=
rPV9XjY7LDr5ZknA6OTDL0sAN41JB9AldsfUK1dgLJtDqmByGVLcL_223EvV6AphVE6LHIC0N9U=
jSIYqpOt-xj5ylKEdcvZtYxadvZ37uWQwHXe7qF-Vx5tPIy4rToIz2tiNSb3M18FTigvpZQunbS=
JzqkHwllmMVyAwMtKTlCyhx0jDIdb58SnTYERiN09aFyhwKTpGGfDk7Uspa4uLz_6c_LyCoGZoE=
vsJF03OuGBvF0GXnaz-OGnrRdggiomn8cqgwZTykBvewjY0Zg/49q/igbgzpt0Tcu3y718Qtxsg=
Q/h5/h001.eheSU8vfvzWhELGxhqj9kzaNIvvVAot4KDTiNynmUS0" target=3D"_blank" re=
l=3D"noopener noreferrer nofollow"><span>Steve Ross</span></a><span style=
=3D"color:rgb(44, 62, 80);"> for more.=C2=A0</span></p></td></tr><tr><td cl=
ass=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-br=
eak:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80)=
;"><b>Rippling=E2=80=99s Outbound</b></span></p></td></tr><tr><td class=3D"=
dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-break:bre=
ak-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);">Ripp=
ling has used two different styles of outbound, programmatic and personaliz=
ed. They started outbound around 2017 with programmatic outbound, where mar=
keting was writing the email templates, orchestrating the sends, and an inb=
ound rep was handling the replies. This is the playbook Parker used at Zene=
fits so effectively so it=E2=80=99s not that surprising. What was surprisin=
g was that it was generating a 0.5% to 1% conversion rate to a meeting as l=
ate as 2022. These are numbers that teams with SDRs personalizing each emai=
l are achieving and Rippling is doing it with fully automated emails.=C2=A0=
</span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0=
px 15px;text-align:left;word-break:break-word;"><p style=3D"color: ;"><span=
 style=3D"color:rgb(44, 62, 80);"><b>How?</b></span></p></td></tr><tr><td c=
lass=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-b=
reak:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80=
);">The next question that came to mind was =E2=80=9Chow are they getting s=
uch great meeting booking rates=E2=80=9D? There are three possible explanat=
ions, the market is huge, their team is incredible, or they have incredibly=
 strong product market fit. I=E2=80=99ll use the=C2=A0</span></p></td></tr>=
<tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:le=
ft;word-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(4=
4, 62, 80);"><b>Huge Market Hypothesis=C2=A0</b></span></p></td></tr><tr><t=
d class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;wor=
d-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62,=
 80);">Most companies won=E2=80=99t be able to replicate Rippling=E2=80=99s=
 results because they aren=E2=80=99t selling into a market that=E2=80=99s b=
ig enough to support an email campaign of this size. Matt shared that they =
relied on programmatic outbound for 50% of their growth since founding. The=
re are hundreds of thousands of HR leaders that could be targets, depending=
 on how they define their ICP.=C2=A0</span></p></td></tr><tr><td class=3D"d=
d" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-break:brea=
k-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);">In 20=
20, they were close to </span><a class=3D"link" href=3D"https://link.mail.b=
eehiiv.com/ss/c/u001.aYzCpayEkDDru2aGJxL4BUmdnp5alY8oNR5XUlrZQbygJ8Qtu0tz61=
2Lnwl2bOHqtQvw_A5LToIEBRa60b44wkVvMxGblKfbKOnLuPqbXHE4cOG3fug4gjrGxWtC0g-I_=
wKeiyavsrmOEmWdrvTtWWpOlPW6zUohe6htOvokZWwZkoj5qrbf_zzAwJkkX4SABp0phDidSRTS=
tOdeB39up9QEHOT0YnV2_XPUZqZ30DRBBTSC1HdLTST9AJ1FdzkS6Cm1eaEAffuMcGfxR0cKYlC=
kxdjF2AIgD6mk5gW7YHevB_Gv_Dxa3uVJ5fFE-a4r/49q/igbgzpt0Tcu3y718QtxsgQ/h6/h00=
1.Gg_QnJmKq05516cThmq_2vDRquHmZsLYHELDgBGAc9Q" target=3D"_blank" rel=3D"noo=
pener noreferrer nofollow"><span>$36m</span></a><span style=3D"color:rgb(44=
, 62, 80);"> and in 2024 they were reported to have </span><a class=3D"link=
" href=3D"https://link.mail.beehiiv.com/ss/c/u001.UY7-jEMcRLZ5W6M0bzLpmwtSF=
jQChydmiRZInZN4gJctpcP1c_IPZM3EV73NLtRmgx_gDBbxWvdaP8bFH7tp84HSFyRBv4WOyW-O=
iyGgDiC14FRgK3Cop9T59xsQjnANnMz_fAGH3hC7h4GZf8JBrDBIz9BelpIZGvoySZa6-5xoaRR=
2u2ItHP6xDWlRx3pws_ogwAzc0eqF1IZHVZ1_bxjZ83Ebvuj_Ca6DLYB90qSfnik434MrbA_ceJ=
ZabyHfM7e_z5sRhqNIts3JTxhL9bagAbxrfevnTlqpAmlqH2r5W3Eqf4X4gGtGUa9NoCdQUD8D6=
EXBsla-2noD1a96X_FDgUbi21OT-wPzup6W2MH8b68k-0vr3V2NT6g_2ld-oGBPVo3Yq-tI0bzh=
OJGLyA/49q/igbgzpt0Tcu3y718QtxsgQ/h7/h001.voGbZ6gSWM1BsuzTyYnAKPp7GsLbmW8RN=
_DyZiogxz0" target=3D"_blank" rel=3D"noopener noreferrer nofollow"><span>$3=
50m</span></a><span style=3D"color:rgb(44, 62, 80);">. I=E2=80=99m going to=
 assume their current average customer value is $30k / year because they re=
ported 2000 customers on $36m in the first article ($18k ACV) and they=E2=
=80=99ve nearly doubled the number of features on their platform since then=
. This means that leading up to 2020, outbound had brought them 1000 paying=
 customers. I=E2=80=99m also going to assume a higher than normal close rat=
e (33%) because of the low price (compared to incumbents) and the general e=
xcitement behind any company Parker seems to start in the space.=C2=A0</spa=
n></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15=
px;text-align:left;word-break:break-word;"><p style=3D"color: ;"><span styl=
e=3D"color:rgb(44, 62, 80);">To create 1k customers Rippling needed to cont=
act 606k people to book 6k meetings, to create 3k opps, which turned into 1=
k customers (</span><a class=3D"link" href=3D"https://link.mail.beehiiv.com=
/ss/c/u001.VPQbJ-t6SbEWV-D-Q4fReNs0Bx7eJS6zYItpuswmpPF46ds5CTQoy9oVxVhP-VBi=
QrR0IQAC4kX6XDSZ4tW4qmszQK22l5RqONcaWu5tOGBcfNlPwc--9tgk8q8zHZl5bDIqsHoIqcP=
HJz0zs80Sl9TQE39c2P1NKDundt0CtuHco7oxxfd81MhqEQjdpAnW6LM5JTIAc9bTQcQjWEfNaF=
PWbUnYcvoMyS0A6qtki0CApZfyh-kyR5oVU9KC_o5ymkU6u_nsK7gbKQ1YiqzObJn9buD_GK0b9=
65RQVhNeKTTF_vXkHp4wixVXYS3cZF3-b1wR-ykwdqswFnTtdA9sKkQjckNFQJq8RWHld3eDMnC=
ha0ULXSjuQveGNtgH58k/49q/igbgzpt0Tcu3y718QtxsgQ/h8/h001.mytEEDiwg4f7nQlTZKl=
Uht4JlTCLiR_94JmN40cDdIM" target=3D"_blank" rel=3D"noopener noreferrer nofo=
llow"><span>check my math here</span></a><span style=3D"color:rgb(44, 62, 8=
0);">). Matt called out that in 2022, they realized they couldn=E2=80=99t c=
ontinue on this path because they were running out of accounts to reach out=
 to. While growth using programmatic outbound is only possible in a big mar=
ket like this, having a big enough market does not mean you=E2=80=99ll get =
it is not clear that it is the reason they were getting strong conversion r=
ates.=C2=A0</span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=
=3D"padding:0px 15px;text-align:left;word-break:break-word;"><p style=3D"co=
lor: ;"><span style=3D"color:rgb(44, 62, 80);"><b>Their Team is Incredible=
=C2=A0</b></span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D=
"padding:0px 15px;text-align:left;word-break:break-word;"><p style=3D"color=
: ;"><span style=3D"color:rgb(44, 62, 80);">While I don=E2=80=99t personall=
y know Matt, I have had the pleasure to interview 3 people that worked at Z=
enefits in the early days and I can say with confidence that they were all =
top tier sales people and leaders. You shouldn=E2=80=99t take my word for i=
t so we=E2=80=99ll use their response to the growth roadblock in 2022 as a =
proxy for team quality. A low quality team would keep doing more of the sam=
e and get worse results whereas a high quality team would find a way to pus=
h through and make it better.=C2=A0</span></p></td></tr><tr><td class=3D"dd=
" align=3D"left" style=3D"padding:0px 15px;text-align:left;word-break:break=
-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62, 80);">In 202=
2, realizing their programmatic outbound weapon wouldn=E2=80=99t be able to=
 continue driving the growth they needed, Rippling hired Ashley Kelly to ru=
n their sales development rep (SDR) organization. Since being hired, Ashley=
 has built a SDR organization with over 150 people. Keep in mind, these are=
 not all SDRs, there will be many layers of support folks within those rank=
s but my rough guess is 110 SDRs and 40 management, director, and support r=
oles. When Ashley took over the SDR team, they moved to a personalized appr=
oach, adding more human time into their process.=C2=A0</span></p></td></tr>=
<tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:le=
ft;word-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(4=
4, 62, 80);">The result was a much more expensive organization (estimated $=
20m annual cost) but an increase in effectiveness to 3-7% conversion to mee=
ting and an SDR organization they are now forecasting to generate 60% of th=
eir $350m in revenue. It=E2=80=99s clear that this team is incredible at th=
eir jobs. So the question is, if this team was selling a less competitive p=
roduct into the same market, would they generate the same results? While I =
think they deserve a lot of credit, I don=E2=80=99t think it=E2=80=99s fair=
 to attribute all of the glory to the revenue organization.=C2=A0</span></p=
></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;te=
xt-align:left;word-break:break-word;"><p style=3D"color: ;"><span style=3D"=
color:rgb(44, 62, 80);"><b>Incredibly Strong Product Market Fit</b></span><=
/p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;=
text-align:left;word-break:break-word;"><p style=3D"color: ;"><span style=
=3D"color:rgb(44, 62, 80);">I can=E2=80=99t comment strongly on the product=
 itself because I=E2=80=99m not a user, nor have I spent any time in the HR=
 tech space. However, we can learn a little by comparing Rippling=E2=80=99s=
 results to Outreach=E2=80=99s benchmarks.=C2=A0</span></p></td></tr><tr><t=
d class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;wor=
d-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62,=
 80);"><b>Sales Nerd Stats, Feel Free to Skip</b></span></p></td></tr><tr><=
td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left;wo=
rd-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44, 62=
, 80);"><a class=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.h=
JmoKrZJ8cH65evxWE6ZhE_6qfG10ApBzYg338Yki_xuzUhp62xosSlOs0IFMVh3ghBraBISxgbV=
QdzicP4QOZpthoUV0Q6YQMm6p_vg36F68wFbbvwSpJ6PTU_nGmr4Hp4LssFG05YKJz1nUtU6i_4=
GhyUq7LlDnfSiFipKwApXAx7SNcVLNYKJHAdyxCTuuNmiVW4nheOdeTWNeRBezl1sRGOUaBHAqL=
YrlRMAWZmnEcMqjLqj07_X2Hjk7C3wirfcFHt77W3nOLHxXHkYOg/49q/igbgzpt0Tcu3y718Qt=
xsgQ/h9/h001.jMAbXTSN-csSvDEFKJ5iME8MKyPShvuAHgm3HMZR_Gs" target=3D"_blank"=
 rel=3D"noopener noreferrer nofollow"><span>Outreach.io</span></a></span><s=
pan style=3D"color:rgb(44, 62, 80);">, a company I know has a </span><a cla=
ss=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.UY7-jEMcRLZ5W6M=
0bzLpmzgn0wUv3Q7QxGhLbSryHnnCk5FrdH8TAETxIh1Qz-YCRjbX5aDnFcuUeeVrLMWaEs94qD=
vbXJno1CkzzNlenQyX9B026YEGqM6X5MfvKJF38fG6sLWdRGizcFI6x7M8UsbRc5CjgdOR_el_E=
4yJ7nbZwHAiuEys31BQjlMSmiu7g8Fpx-aK5sG4g4_Dr8yRDO82O956eCKj060rnANPqD5phoRk=
XNKV1FCByQmhanNYnaE700KkSO29r4eRFKhUd5mdDnW40waUzayl5aa9OQTHYigQW0fiOWSk1I1=
C8drrPcTdfz5CXaoxv_f78udNCtuMRpIXEVGCG91tU44VHYY/49q/igbgzpt0Tcu3y718QtxsgQ=
/h10/h001.yP1QVFV0BXYUyMZx1ogO8dKOYzjzRPsRiBX8LgakS0g" target=3D"_blank" re=
l=3D"noopener noreferrer nofollow"><span>strong sales development program</=
span></a><span style=3D"color:rgb(44, 62, 80);"> and strong product market =
fit, seems like a good comparison. Outreach expects 17 meetings a month fro=
m its SDRs which turn into 12 sales accepted leads (SAL). The average conve=
rsion from meeting to closed from an outbound opportunity was 23% in 2019 (=
</span><a class=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.xD=
rLMY0giiSlGuELGCgU3nxHYxx_S9qoW4XJ_0646z_oeoomlhnXxi0XJy1bbk746xhsQK2mu4QGQ=
O7Xfuu6kGhh8pCrO-_S_3J7LsoaZWtSh9EuPyDr9vYWijkv5sSqyr_tV-3KWQ6eoSKaGZz01iUi=
RJDgwUpzIXRRuT3-2QkYXh_kj_p8j-uVI8_tMYGRz6fSLxs__9-5mItPvp5ejL9gEZxekqeGUPM=
-CfutwSWG0aumQOATn7LH8laIr50KmT4_kYbnNV1UCklWfOIWtOMQilVhbrNA2gZqoWfwJWS2oS=
ZTo-9uk1bcSo8eXHxai3qAlWsS-kIOIYpg4X3miwNHZyG05RdvaS2ZdVxtpNpMjjZUZCDwHJzoK=
e7m7X38FLvcez2ivNsMJ60V2YVXM3hgiVTg6NsdC4m_qFBT15R66_ikLSXkG88ed34oV2gkGAPw=
JhuZVbhyVdNH6kqRMSfUa7pMoTG7Bi7YaoY_37Zky2E4OOxp9HEB_G0cQtpwpSOIgc_YwAkqn1g=
TvLnqZR-_w9O8-OTFurXrI2DM_c8cXHfdDTJEVVDzCx2j042_hXz7eSFCbfS9RMEpkehXFKj6us=
w_t5rez9MPa1K5HfLF74P_iKXpQbXQffA6QKWISEDgSiotIhRBj2m7W-uKrOVaME1yEoLMBKaHl=
9MVmokReynUW7bZg9fY5qi-iTgw/49q/igbgzpt0Tcu3y718QtxsgQ/h11/h001.WYedGu8NvWS=
AY0UNCekLoajJPn3R1AeNol1-TO0jMV4" target=3D"_blank" rel=3D"noopener norefer=
rer nofollow"><span>source: salesloft study, PDF</span></a><span style=3D"c=
olor:rgb(44, 62, 80);">) which has likely gone down by at least 50%. This m=
eans each Outreach SDR is producing 1.38 meetings each month or 17 closed-w=
on deals each year. The average Outreach install is around $20k so this mea=
ns each SDR is producing $340k per year.=C2=A0=C2=A0</span></p></td></tr><t=
r><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;text-align:left=
;word-break:break-word;"><p style=3D"color: ;"><span style=3D"color:rgb(44,=
 62, 80);">There=E2=80=99s a breakdown in language here because it=E2=80=99=
s impossible to tell if Matt was using meetings booked, meetings held, or a=
ccepted into pipeline. As a CRO, I=E2=80=99m going to assume he only cares =
about the number of meetings accepted into pipeline and assume his 3-7% con=
version rate meant conversion to SAL. We know that Rippling had $350m in re=
venue in 2023, which represented </span><a class=3D"link" href=3D"https://l=
ink.mail.beehiiv.com/ss/c/u001.XxId6FZrN29CO0meP4Tk8wikXLtCb2S_J6i2tr1nHEuG=
e55C_5J1Xc2-_9wGJkE5VCBG1cyslVyhQEs23cgUp7FR_SV9WpnxMZcaIoJzLot5QBtXHdQtVuw=
p2FoGci1bm_MHNvcSjDFOAF4k-9_EKnKNzYbk_k_clr-JuA8pkQSUah8651sCev1cNAZflbLGTd=
SqHWW9MDx21grPN3rIiMemxUB1aR3aLMn2Z-WXRWWznvf3LcS7L6lt-K90Tnw5JZtW3LbP0G9yT=
tUsvVMpHMHb_1qxPixpXLIQMwbHuaseolACp2fmaVAd0TY-LfIHuuprVxHuRK51nR6PGHE4Q8QI=
72D6DZKlxcWdBzZG3p2ET3qrDVsqm9HgUyn1QSG_B_kk2pzdrClfYbkiGZzdgw/49q/igbgzpt0=
Tcu3y718QtxsgQ/h12/h001.P64HA5t5-nYhVSrIhOS_Vmr8cHBnMPU9HCBGndMBEjA" target=
=3D"_blank" rel=3D"noopener noreferrer nofollow"><span>100%</span></a><span=
 style=3D"color:rgb(44, 62, 80);"> year over year growth, and their growth =
rate has been roughly </span><a class=3D"link" href=3D"https://link.mail.be=
ehiiv.com/ss/c/u001.XxId6FZrN29CO0meP4Tk8wikXLtCb2S_J6i2tr1nHEuGe55C_5J1Xc2=
-_9wGJkE5VCBG1cyslVyhQEs23cgUp7FR_SV9WpnxMZcaIoJzLot5QBtXHdQtVuwp2FoGci1bm_=
MHNvcSjDFOAF4k-9_EKnKNzYbk_k_clr-JuA8pkQSUah8651sCev1cNAZflbLGTdSqHWW9MDx21=
grPN3rIiMemxUB1aR3aLMn2Z-WXRWXO3Qi6MlT_kMKsBg1KQRvEL_yag4rutowprPS5jaKYbBjT=
CuiLnOnhRsN4JLVM24_s8WOzFJJrpbCaRxRp5dt8DOo6-vfABjC_3i9RV6A_wT3Bx2eyBBtH3Lr=
cDaNobnTT8E6JUdECJixCbuMAXXCmibAcFyqMglDPCQQRB1tkRw/49q/igbgzpt0Tcu3y718Qtx=
sgQ/h13/h001.CHbHOAX89_mQBA8Ue2wr7rtdsyaH-AOZbSnwAG2lpqw" target=3D"_blank"=
 rel=3D"noopener noreferrer nofollow"><span>halving every year</span></a><s=
pan style=3D"color:rgb(44, 62, 80);"> for the past 3 years. So we can assum=
e that they are targeting $500m in revenue for 2024, which is net $150m in =
growth, or $90m in growth from outbound (at 60% mentioned above).=C2=A0 Wit=
h $90m in growth from outbound, each of their 110 SDRs are producing an ave=
rage $810k in revenue each year. Using my same quick math from </span><a cl=
ass=3D"link" href=3D"https://link.mail.beehiiv.com/ss/c/u001.VPQbJ-t6SbEWV-=
D-Q4fReNs0Bx7eJS6zYItpuswmpPF46ds5CTQoy9oVxVhP-VBiQrR0IQAC4kX6XDSZ4tW4qmszQ=
K22l5RqONcaWu5tOGBcfNlPwc--9tgk8q8zHZl5bDIqsHoIqcPHJz0zs80Sl9TQE39c2P1NKDun=
dt0CtuHco7oxxfd81MhqEQjdpAnW6LM5JTIAc9bTQcQjWEfNaFPWbUnYcvoMyS0A6qtki0CApZf=
yh-kyR5oVU9KC_o5ymkU6u_nsK7gbKQ1YiqzObJn9buD_GK0b965RQVhNeKTTF_vXkHp4wixVXY=
S3cZF316em1K0pGwD72FYad6Tdgt6A66e8UwdrLlKA0qHpxeo0qhyLOyPDDM47aJiSyd69/49q/=
igbgzpt0Tcu3y718QtxsgQ/h14/h001.xlrM3YUrRmqf3WfQOeRgm8oXNjao_dx1VAhHOiVy4co=
" target=3D"_blank" rel=3D"noopener noreferrer nofollow"><span>above</span>=
</a><span style=3D"color:rgb(44, 62, 80);">, that means they=E2=80=99ve pro=
duced 3k customers, 9k opportunities, and 18k meetings by reaching 363k cus=
tomers.=C2=A0</span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=
=3D"padding:0px 15px;text-align:left;word-break:break-word;"><p style=3D"co=
lor: ;"><span style=3D"color:rgb(44, 62, 80);"><b>Head to Head</b></span></=
p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;t=
ext-align:left;word-break:break-word;"><p style=3D"color: ;"><span style=3D=
"color:rgb(44, 62, 80);">When we compare an SDR at each organization an Out=
reach SDR is producing $340k whereas a Rippling SDR is producing $810k, mea=
ning Rippling is getting 138% more out of their SDR team. When compared hea=
d to head with a company with an equally large market, strong product marke=
t fit, and a strong sales development program, Rippling beats them by 138%.=
 A big part of the reason must be the strength of their product market fit.=
=C2=A0</span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"pad=
ding:0px 15px;text-align:left;word-break:break-word;"><p style=3D"color: ;"=
><span style=3D"color:rgb(44, 62, 80);"><b>Measuring Product Market Fit=C2=
=A0</b></span></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"pa=
dding:0px 15px;text-align:left;word-break:break-word;"><p style=3D"color: ;=
"><span style=3D"color:rgb(44, 62, 80);">Sales efficiency isn&#39;t a perfe=
ct way of measuring the strength of product market fit but I do believe it =
is directionally correct, especially when you have good comparables. It&#39=
;s certainly less valuable as a measure for companies with less revenue bec=
ause they won&#39;t have the sales maturity yet. The default method seems t=
o be asking users how they&#39;d feel if they could no longer use your prod=
uct. I don&#39;t have anything against this model other than it&#39;s extra=
 work and at scale companies don&#39;t seem to do it consistently.=C2=A0</s=
pan></p></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px =
15px;text-align:left;word-break:break-word;"><p style=3D"color: ;"><span st=
yle=3D"color:rgb(44, 62, 80);">There, I did the thing and I&#39;m happy we =
got there together. Thanks for reading and let me know what you think. Is t=
his a worthwhile mechanism? Was this a total waste of time?=C2=A0</span></p=
></td></tr><tr><td class=3D"dd" align=3D"left" style=3D"padding:0px 15px;te=
xt-align:left;word-break:break-word;"><p style=3D"color: ;"><span style=3D"=
color:rgb(44, 62, 80);">Collin=C2=A0</span></p></td></tr></table></td></tr>=
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