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On November 4, SaaS Office Hours at Redpoint will welcome Kenny van Zant, former COO of Asana and Chief Product Strategist at Solarwinds, a $4.1B market cap maker of infrastructure software. Kenny is renowned for pioneering the flywheel sales model that propelled Solarwinds to a $150M company profitably.

Unlike traditional sales models, the flywheel sales model requires sales people to close business only from existing users. No outbound prospecting allowed. This requirement unifies the go-to-market efforts of companies, and spins a customer acquisition flywheel faster and faster to achieve terrifically efficient growth.

Last night, at our inaugural event, SaaS Office Hours welcomed Bill Macaitis, CMO of Slack, former CMO of Zendesk and former SVP of Online Marketing and Operations at Salesforce. Having worked in three hypergrowth companies, Bill is an expert in building massively successful marketing teams. These are the five kernels of wisdom I learned last night.

When is the right time to hire a head of marketing? The right time to hire a head of marketing for your startup is when the company has found product market fit. Marketing amplifies a message, but rarely do marketing teams ignite the fire.

How much should your startup pay its sales people? According to Pacific Crest’s Annual SaaS survey, 9% of a sales rep’s annual contract value. This figure doesn’t vary much on whether your startup’s salespeople are inside reps or outside/field sales reps.

The table below computes the effective salary + commission of a sales reps as a function of average contract value and an estimated quota. The quota is an estimate based on deal velocity, how many deals a salesperson must close each year to attain quota.

In 1964, IBM announced a mainframe computer family called the System 360. The mainframe wouldn’t ship for another three years, but the announcement reduced the mainframe sales of their competitor, Control Data Corporation, sufficiently to warrant an FBI investigation. And so a new marketing technique was born.

To be clear, there are many different forms of vaporware. Coined in the early 80s by Esther Dyson to describe software companies preannouncing a product, the term vaporware can refer to three different types of these announcements. There’s IBM’s practice of pre-announcing a product with the intent to gain competitive advantage, which violates antitrust law. Second, vaporware also refers to products that were announced but never shipped like the iPhone predecessor, Apple’s Wizzy Active Lifestyle Telephone or WALT.. Last and most useful, vaporware is software that’s pre-announced to gauge customer demand.

The purpose of a price is to tax usage of a product. That’s how companies generate revenue. Discovering how to tax a product properly is a perpetual challenge. It’s a moving target and so it requires an ongoing discovery process as the company and market evolve together. These are some mistakes I’ve noticed.

Complex or unintuitive pricing model. A good pricing model appears simple and logical to the customer. It may be complex behind the scenes, with different prices for varying customer sizes, product complexity and add ons, but the tax align itself to the customer’s perception of ROI clearly. Customers have their own unit of measure. Often for applications, it’s people - hence a pricing model by seats. Other times for infrastructure, it’s bytes for storage or cycles for compute.

Over the weekend, it seemed to me that the sentiment in the valley seemed to change abruptly. Dan Primack wrote Fear and Sadness in Silicon Valley, and Danielle Morrill punctuated her post Somewhere Over the Brainbow: The Unicorn Window is Closing images of unicorn cannibalism. While the attitudes may be changing, the effects haven’t yet revealed themselves in the data. So, is the environment truly changing?

In sales processes, showing a product is always better than talking about a product. Better still is co-customizing the product with the customer during the sales pitch. This customization could be as simple as integrations or changing colors. There’s no better way for customers to understand a product, imagine how it would fit their needs, and become committed to the purchase than customizing their instance during the sales process. I’ve watched this brilliant sales tactic fuel tremendous growth at Looker, a fast growing analytics company.

When I was a PM at Google, we conducted customer research often to understand our customers’ opinions on AdSense. In 2005, Google, Yahoo and Microsoft were vying to win dominant share of advertising pages across large publishers. Customer knowledge, both qualitative and quantitative, informed product development, and that research became a key part of AdSense’s success.

A few years later when I joined Redpoint, I learned that venture capitalists perform similar customer research during diligence. While the ultimate use of the data might differ, the actual investigations and interviews are remarkably alike.

Starting on October 21, I’ll be hosting a bi-weekly event from the Redpoint San Francisco offices called SaaS Office Hours. During these two hours, we will discuss the tactical issues and questions facing seed and Series A SaaS companies in a small group. That’s why we call them Office Hours.

Rather than deliver presentations, SaaS Office Hours are meant to be casual, tactical and collaborative. Sometimes, we’ll invite guests for off-the-cuff conversations and Q&A focused on focused questions like how should I build my startup’s marketing team? How can I evangelize my product to developers? How do I create the right kind of recruiting process?

How big is your SaaS startup’s sales pipeline? How big does it need to be to achieve next month’s bookings target? What is the ratio of the sales pipeline to bookings? What should it be?

When asked these questions during a fundraising pitch, one CEO responded with the number of demos per account executive per day to attain next month’s bookings, impressively conveying his command of his business. A startup’s leadership should know the number of customers, sales and marketing qualified leads to meet or exceed plan at all times. If you haven’t performed this exercise this before, use the interactive worksheet below. Change any of the text boxes and the figures will update. If you’re reading this post by email, please click through. Some email clients don’t allow JavaScript for security.