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Pros and Cons of Founder-Led RevOps in Startups

Exploring the benefits and drawbacks of having founders lead the Revenue Operations function in startups, along with alternative approaches.

The Benefits of Founder-Led RevOps

Founder-led RevOps offers several advantages for startups. Typically, startups will opt to begin with founder-led RevOps without realising, unless you have a fully technical-only founding team. Although the founding team will have more than enough to deal with, there are several benefits to retaining this responsibility, at least for a while:

- Deepest understanding of the business: Founders have an intimate knowledge of the company's goals, vision, and target market. This enables them to align the RevOps strategy with the overall business strategy effectively.

- Faster decision-making: Founders can make quick decisions as they clearly understand the business priorities and can act swiftly to address any revenue-related challenges or opportunities. No bureaucracy will get in their way during the approval process either! 

- Strong leadership: Founders are often passionate and dedicated leaders who can inspire and motivate the RevOps team. Their leadership can create a strong company culture and a shared sense of purpose. We've written in the past about how RevOps should report to the CEO, this is a great reason for that.

- Flexibility and adaptability: Founders must wear multiple hats and take on various responsibilities, making them well-suited to handle the diverse demands of the RevOps function. In 2024, founders must be able to flex around their surroundings, and that makes them perfectly built to handle revenue operations.

- Cost-effective: In the early stages of a startup, hiring a dedicated RevOps leader may not be financially feasible. Having the founder lead the RevOps function can help save costs while still driving revenue growth. Of course, fractional RevOps can be a much more cost-effective, lower barrier to dedicated RevOps expertise.

While founder-led RevOps has its advantages, there are also some challenges to consider.

One potential challenge is the lack of expertise or experience in revenue operations. Founders may have a strong vision for the business but may not possess the specialised knowledge and skills required for effective RevOps management. This can lead to inefficiencies or missed opportunities. This is more of a concern for fully technical founding teams.

Another challenge is the potential for burnout. Startups are often fast-paced and demanding, and founders already have numerous responsibilities. Defining the additional responsibility of leading the RevOps function can increase stress and workload.

Founder-led RevOps can be a viable option for startups, especially in the early stages when resources are limited and they have some energy to spare. However, as the company grows, it may be necessary to consider alternative approaches to RevOps leadership.

Alternative Approaches to RevOps Leadership

As startups evolve, they will inevitably explore alternative approaches to RevOps leadership outside of the founders. Some options to consider include:

- Hiring a dedicated RevOps leader: As the company scales, bringing in an experienced RevOps professional can provide the expertise and strategic guidance needed to drive revenue growth. The RevOps leader will be 80% strategy, 20% execution, and be skilled at building a competent team of experts to run the function at your organisation.

- Building a RevOps team: Instead of relying solely on the founder, startups can assemble a team of specialists with diverse skills and knowledge in revenue operations. This team-based approach allows for a more comprehensive and collaborative approach to RevOps. Management of this team can be under a RevOps leader or a more junior but senior RevOps member. Avoid RevOps reporting directly to eg: the Head of Sales, as this will cause biases in the decision-making and management of the team capacity.

- Outsourcing RevOps: Startups can also consider outsourcing their RevOps function to a third-party provider. This allows them to leverage the expertise and resources of an external partner while focusing on other core aspects of their business. This can be in the form of contractors, fractionals or agencies.

Each approach has its advantages and considerations, and startups should carefully evaluate their specific needs and resources before deciding on the most suitable option.

Implementing a Team-Based RevOps Model

One alternative approach to founder-led RevOps is implementing a team-based RevOps model. This quite innovative approach involves assembling a cross-functional team with representatives from sales, marketing, customer success, and finance, among others. The team collaborates to align revenue-related strategies and processes across departments. Think of it like a committee.

Benefits of a team-based RevOps model include:

- Diverse expertise: By involving members from different functional areas, startups can leverage their specialized knowledge and experience to develop a comprehensive RevOps strategy. This will also decrease the likelihood of bias entering the decision-making processes.

- Collaboration and communication: The team-based approach facilitates better communication and collaboration between departments, leading to improved alignment and efficiency. Often overlooked, this will filter down into a culture of cross-department collaboration as a startup scales.

- Scalability: As the company grows, the team can be expanded to accommodate the increasing demands of RevOps. Who knows - perhaps one or more of the committee may transition to a full-time RevOps contributor!

Implementing a team-based RevOps model requires clear roles and responsibilities, effective communication channels, and a strong emphasis on collaboration and teamwork. It is not about who is the loudest gets their way.

It is important to note that the team-based approach may not completely eliminate the need for a RevOps leader or coordinator. Having someone to oversee and coordinate the efforts of the team can ensure smooth operations and effective execution of the RevOps strategy.

Key Considerations for RevOps Success

Regardless of the approach chosen, there are several key considerations for startups to ensure RevOps success:

- Alignment with business goals: The RevOps strategy should be closely aligned with the overall business goals and objectives. It should support revenue growth while also considering factors such as customer satisfaction and retention.

- Data-driven decision-making: RevOps relies heavily on data analysis and insights. Startups should prioritise implementing robust analytics tools and habits to gather and analyse relevant data for informed decision-making - key piece here is relevant.

- Continuous improvement: RevOps is an iterative process that requires constant evaluation and optimisation. Startups should regularly review their RevOps strategies, identify areas for improvement, and implement changes accordingly. Set a regular cadence, say quarterly, and stick with it.

- Cross-departmental collaboration: Successful RevOps implementation requires collaboration and alignment between different departments, such as sales, marketing, and customer success. Startups should foster a culture of collaboration and establish clear communication channels to facilitate this cross-functional cooperation. RevOps doesn't stand alone, it stands with all!

- Scalability: Startups should ensure that their chosen RevOps approach is scalable and adaptable to accommodate growth and changing business needs. This is why working with the founders and C-suite is so crucial to RevOps' success.

If you consider these key factors, you'll be well on your way to setting RevOps up for success and drive sustainable revenue growth.