From $3M to $10M ARR: Widening Without Losing Your Way

At $3M ARR, startup life is typically pretty good.

You've nailed your initial very narrow segment. Revenue is flowing. Your sales reps know exactly who to call, what to say, which companies will buy.

However, getting to $10M ARR in the next 12 months is no small feat.

This is part of a 4 part Series about how to get from $1M → $3M ARR, $3M → $10M ARR, $10M → $20M ARR, and $20M → $50M ARR.

You realize that your perfect initial customer segment may not be big enough anymore. You've sold to most obvious targets. Easy wins are gone.

Time to widen - but not how you think.

At this point, many panic. They try everything again. New verticals! New company sizes! New use cases!

They hire salespeople and tell them to "figure it out." Close rates plummet. Sales cycles extend. Nobody knows what they're selling.

There's a better way. Expand your segment - only slightly.

Keeping your company profile but find a new persona. Or keep the same persona but expand your segment.

Here's how you know you're doing this right: Things start breaking again, but in good ways.

The urgent takes precedence over the important - your best reps focus on closing, hit 300% of quota and beg for help. At the same time, they don’t prospect. Thus, panic next month when the pipeline is empty.

On top, deals pile up waiting for implementation. Customer success gets overwhelmed. Your processes creak under strain.

You've found a new vein of gold and you're mining faster than infrastructure can handle.

Hire aggressively, fix broken processes, and do everything you can to maintain momentum.

With it, your hiring needs start to shift.

You still want entrepreneurial types, but now you need people who've seen scale.

Look for folks at bigger startups itching to leave because "things got too repetitive."

They've learned playbooks but they're bored. Perfect. They'll bring structure without killing energy.

Thus, the key interview question changes. Instead of asking about building from nothing, ask how they organize themselves. How do they handle having too much to do? You need people who can do more with less.

By $10M, you ideally have predictable revenue from multiple segments, each with its own refined playbook.

You'll have cowboys who open new markets and operators who scale existing ones.

You'll have learned that growth isn't about doing everything - it's about finding the next adjacent opportunity and attacking it with the same focus that got you the first one.

Most importantly, you'll have learned to love the chaos.

Because that feeling of everything breaking while revenue soars? That's what building a real company feels like.

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Enjoyed reading this?

Then check out my conversation on the focal podcast with Russ Thau, a seasoned sales leader who helped scale Intercom, Box, and Envoy from single digit $M through IPO.

Youtube | Apple Podcast | Spotify

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