Hey friends,
On Tuesday - during my lunch break in a coworking in Biella, I pulled up Youtube and got caught an interview with Carles Reina, CRO of ElevenLabs, on Guillaume Moubeche’s channel.
The title says it all: 100 sales meetings a week to $600M ARR.
But the most famous and controversial part of this podcast was something that Reina mentioned already in other podcast. (20VC).
Carles said he sets the quota for his sales team at 20x the OTE.
I have been following this 20x story for sometime and I think it's time now to deep dive.
Wait - what are you talking about?
If you’re not in sales every day, OTE means on-target earnings.
That’s base salary plus bonus if you hit 100% of your quota.
So if your OTE is 100k and your quota is 20x, you’re expected to close 2 million a year by yourself. (average it's always been 3-5x).
This is a tough move for almost every company I know.
And I’m already seeing early-stage founders try to copy it.
To be fair, at ElevenLabs this works, apparently.
Their product is in demand. People show up already knowing what they want.
When the market is pulling that hard, even a 20x ratio ote/quota can happen.
But how many companies are in that spot right now?
Maybe two or three. Anthropic, OpenAI, ElevenLabs. Somebody else?
You can count them on one hand and still have fingers left over.
I bet your startup is not on that list. Mine is not either.
Still, in the last few months I’ve talked to founders chasing wild quota numbers.
Some of them are also quoting the 20X story…
Let me tell you a secret, my friend: You’re not Eleven Labs!
Maybe your product is good, maybe even great.
But do you have 20-30 qualified leads coming to you every day or even every week?
I doubt it because I see it around, there is an inbound epidemic (wrote about this a few weeks ago).
Getting attention in the B2B space is harder than ever, and you want a 20X ratio for your sales team?
Let me bring you all back to reality and see how the ratio between your reps’ OTE and sales goals should be:
A lot of founders think 3x is too low.
I don’t.
For a startup still figuring out what sells, to whom, and why, 3x is right.
3x is perfect, actually.
Your first reps are selling and teaching you about your own market at the same time, and you’re earning more or less 3 times their cost.
What do you want more?
Ultimately, you don’t need 20x to build a great sales team.
You need a number your reps look at and think, “This is tough, but I can do it.”
They hit it, get their bonus, trust you, and want to do it again next quarter.
Next quarter we increase a bit and push for more.
And goes like this; it’s always been.
And who knows.
Maybe in a few years the market will chase your product, and you’ll be the one on a podcast talking about your 20x quota.
I hope so, and I’ll be the first to listen, trust me.
What ratio do you use with your team today? Reply and tell me.
Thanks for reading this far; see you all next week!
