CEO @ Passetto | Is Your GTM AI-Ready? | Value Creation & GTM Innovation for PE/GE-Backed SaaS
B2B companies have moved past MQLs (or so they think) and have moved on to the “Four Funnel MQL Model” and it will 100% fail. These models worked great in the Growth at All Costs Era (2015-2022) because unit economics didn’t matter. -Valuation multiples were 50X revenue. -Investors didn’t care about CAC. -You could just unintelligently drop $10MM more into Ads, SDRs, and Sales reps, grow 30% and raise another round 18 months later. That’s simply not how the World works anymore. And it’s unlikely to ever go back. The Four Funnel MQL model is failing companies everywhere today because it doesn’t properly track and optimize for unit economics. Yes, Slower Growth and Higher CAC are a unit economics problem. You spend too much money and don’t get the appropriate ROI. There is a clear constraint to growth in your Revenue Factory, but you don’t see it because of this overly-simplistic planning and operating model that tries to divide lead source credit by functional department. -- Like if you had a stock portfolio worth $50MM and your portfolio delivered negative returns but you couldn’t get into the individual investment data to clearly understand why and reallocate your investments to drive positive returns. B2B Executives don’t have the visibility they need to make good decisions with this model. And it’s even worse with the old stale MQL Waterfall model from 2012. So when B2B companies adopt this model, here are the major holes it creates: “We can’t measure top of funnel” “Should we hire more SDRs? Or maybe we should cut the team and try AI SDRs. I’m not sure if it’s working” “Is our Marketing working? The Marketing QBR deck says it's working, but something doesn’t feel right” “To hit $14MM new logo target for next year, we need 12 more reps and get them ramped fast, but I’m concerned we’re not going to have enough pipeline to feed all of them” __ The CEO is the only person in your company who can fix GTM. Because it involves rebuilding the entire process for how your GTM “First Team” collects data, measures performance, aligns objectives, and optimizes investments. GTM First Team = CFO, CRO, CMO, RevOps* [Led by CEO] You can keep trying to delegate it to your CRO or your RevOps team if you want. But once you realize what the true problem is, you’ll clearly realize why this isn’t working (at your company or others). We need to be designing, building, and operating our GTM for how the World works TODAY and in the future. Not how the World worked 5 years ago. Growth At All Costs is gone forever. #finance #b2b #revops #gtm *Maybe 1 other executive depending on your leadership talent and structure Lots of incredible, high performing companies have seen pipeline and revenue plateau over the past 6-8 quarters. They all use the Four Funnel department model. They all have no idea what to do to scale and grow pipeline. It’s all guessing and opinions. Likely to lead to slowed growth and diminishing ROI.
Couldn't agree more. Clinging to outdated GTM models is like trying to steer a ship with a broken compass. Without unified data and clear visibility into ROI drivers, decision-making turns into educated guessing. I loved the emphasis on the CEO-led GTM First Team. Just curious, what’s one tangible step companies can take today to start untangling these Four Funnel issues? 🤔
I like the comparison. I actually was a COO in manufacturing before going fully into marketing and I view things this way...holistic KPI measurement as a system, zooming in and out. This really resonates with me. And you're also speaking to something else which exists in manufacturing, kind of indirect costs associated with a system...namely cost of quality. The extra cost of properly vetting a new material vendor for instance, seems like a frivolous expense looking back in the accounting books, but if you didn't and got bad material and were forced to rework things, it might be an enormous cost to find an alternate supplier, fix all the issues that resulted for customers etc. So it's both these hard meausrables and the system as a whole.
You could easily start a new, equally successful pod called something like “B2BS” where you just destroy all manners of dumb shit orgs are doing Would pay for sub. 👏🏻 Btw Chris Walker - thankful you’re using factory metaphors prevalent now. Makes understanding the concepts easier for someone (still) new like me
Been through this painful shift at 3 companies now. Most telling moment was when our CFO printed every department's metrics and laid them side by side. Marketing showed 300% pipeline contribution, Sales claimed 250%, and SDRs reported 200%. Somehow we were generating 750% of our actual revenue 😅
I think it's safe to say nobody's really moved past MQLs. It's still the same as before.
“We will become profitable after acquiring the customer because our 42 month LTV is so high.” What’s your 42 month LTV? “That’s too hard to track”
Chris Walker.. You are correct. This is what I meant all those years ago with reflect to backwards to go forwards. Back then, prior to the split outs in first iteration Oracle 2008, 2011 predictable revenue modelling.. Largely, the Head of Sales, had complete sight of ; . Looked over New Business (Not just SDR or AE functions separately like we see today) . Looked over CS, to ensure they were proactive go getters (Not the Order takers, with no opportunity spot we largely see today) . They had commercial understanding of feedback loops from market validate back to marketing to conduct proper marketing. • They had commercial awareness of account contract value and serviceability at CS, so accounts could thrive, and they were business impactful in terms of commercial viability. That's the sole reason, I have the lens I do, and when I first head you speak on your first state of deman gen, you showed me your lens on demand was the missing piece. Together, thats a clear, concise, organized method for End to End service delivery. The only component, would also be rolling up the old commercial manager, into this role/skillset.. George Coudounaris and I have worked hard, building the guard rails..
This is exactly the hard truth B2B execs need to hear. The Four Funnel MQL Model is like trying to solve a Rubik’s cube blindfolded — you’re making moves, but you have no idea which ones are actually working. Biggest takeaway for me: “The CEO is the only person in your company who can fix GTM.” It’s a system-wide problem, not a department problem. You can’t outsource it to RevOps or hope your CRO figures it out. The 'Growth at All Costs' era is over. Unit economics do matter now, and the companies still chasing outdated models will be the ones wondering why pipeline is drying up. This post is a blueprint for what to do next — time for B2B leaders to stop guessing and start rebuilding. 🔥
The MQL at all costs model... utter rubbish these days 🤮
CEO @ Passetto | Is Your GTM AI-Ready? | Value Creation & GTM Innovation for PE/GE-Backed SaaS
1wBig things coming on the podcast in January!! Stay tuned for more details. In the meantime, here's a MUST LISTEN episode "The Future of AI in GTM". Check it out here: https://podcasts.apple.com/us/podcast/rv225-the-future-of-ai-in-gtm-go-to-market-live-episode-39/id1511588213?i=1000679483664