What is a Revenue Manager in a Startup?
Starting a new business is thrilling but also challenging. With limited resources, startup founders need to make careful decisions about hiring. One key role that is often overlooked is the revenue manager.
So what does a revenue manager do? And why is this position so critical for startups?
An Orchestra Conductor
Imagine an orchestra preparing for a performance. The percussionists, string players, and wind instrumentalists are all highly skilled at their individual parts. But to create beautiful, coordinated music, they need a conductor.
A startup revenue manager is like an orchestra conductor. They bring harmony to the startup’s “music” by aligning sales, marketing, finance, product development, and other teams.
Without a revenue manager, each department focuses narrowly on its own metrics. Marketing drives leads and brand awareness. Sales pursue deals. The product builds features. But no one looks at the big picture of how they interact to generate revenue.
The Revenue Manager’s Role
The core responsibility of a revenue manager is optimizing the startup’s customer acquisition and revenue generation processes.
They oversee the revenue engine made up of four pistons:
- Product-market fit
- Marketing and sales funnel
- Pricing
- Sales Process
Let’s look at each area more closely.
Product-Market Fit
Product-market fit means you are selling a product that customers genuinely want. This requires constant checking of assumptions and adjusting based on feedback.
Revenue managers work closely with product teams to identify target customers, understand their pain points, and refine product positioning. They provide feedback on features and pricing based on what will appeal most to customers.
Marketing and Sales Funnel
The marketing and sales funnel starts with reaching potential customers through activities like search, social media, email, events, etc.
It continues by nurturing leads until they are sales-ready. Finally, closing deals and onboarding customers.
Revenue managers analyze metrics to identify leaks in the funnel and work cross-functionally to improve conversion rates. For example, they may notice leads from a certain channel have lower conversion rates. They can then fix issues with that channel’s messaging or outreach cadence.
Pricing
Pricing is both an art and a science. Price too low and you leave money on the table. Price too high and customers won’t bite.
Revenue managers run pricing experiments and analyze customer data to find the optimal price point. This may differ by customer segment so they develop targeted pricing strategies.
Sales Process
To increase sales velocity, revenue managers create repeatable sales processes. This includes developing collateral, crafting pitches, designing sales plays for common scenarios, and more.
They also work with sales leaders to set goals, review progress, and improve skills.
Why Startups Need Revenue Managers
With so many plates spinning, you may wonder why a young startup needs a dedicated revenue manager rather than having the CEO or COO oversee things.
There are several key reasons:
Revenue First Mindset
Startups need to find product-market fit and scale revenue extremely fast with limited resources. An experienced revenue manager brings strategic focus and urgency to this goal.
Cross-Functional Alignment
As described above, revenue generation involves coordination between teams – product, marketing, sales, customer success, etc. A skilled revenue manager can synchronize their efforts for maximum impact.
Data-Driven Decisions
In the unpredictable startup environment, decisions should be rooted in data, not hunches. Revenue managers continuously analyze KPIs and run experiments to guide choices.
Revenue Operations Excellence
Successful startups have excellent systems, processes, and skills supporting their revenue engine. Revenue managers build and optimize these revenue ops capabilities.
Think of tech startups that grew quickly like Facebook, Uber, Airbnb, etc. They all hired revenue managers early on.
Traits of a Great Revenue Manager
Not everyone has the mix of skills and mindset to thrive as an early startup revenue manager. Here are some key traits to look for:
- Visionary – Can see the big picture and set strategy but also dive into details of execution.
- Analytical – Comfortable juggling lots of data, spotting trends, and drawing insights to guide decisions.
- Coordination – Gets things done through others by building consensus and alignment across teams.
- Agile – Responds quickly to changes in customer feedback or market conditions. Comfortable with experimentation.
- Motivational – Inspires teams to rally around revenue goals and improve performance.
- Technical – Comfortable with sales, marketing, and financial tech stacks and leveraging them for automation.
Very few candidates check all these boxes. So don’t set unrealistic expectations!
Prioritize the areas most important for your current startup stage and culture. Recognize revenue management strengths and weaknesses can be complemented by other team members.
Hiring Options
Let’s examine options for acquiring revenue management skills:
Training
Can you take someone already on your team and teach them revenue management? This allows institutional knowledge transfer and alignment with company values.
But the learning curve may be steep. Estimate 6-12 months for an intelligent, motivated employee to get up to speed.
Be ready to complement with occasional outside experts.
Consulting Firm
Engage a professional services firm that provides on-demand revenue management consulting. They offer seasoned expertise your team lacks.
But consultants are temporary. There’s no replacement for someone in-house, growing with your startup full-time.
Fractional CMO
An experienced fractional Chief Marketing Officer can handle both strategic marketing and sales funnel optimization.
However, you may sacrifice focus on the broader revenue engine including product-market fit, pricing, and sales processes. And fractional resources, by nature, are not full-time.
Full-Time Revenue Manager
For long-term impact, consider hiring a full time revenue manager. Look for at least 3-5 years experience specifically in early stage SaaS startups. Expect to pay $150K-$250K salary plus equity.
The upfront investment will pay dividends in growing a scalable, efficient revenue engine.
Aligning Goals and Culture
Before hiring a revenue manager, ensure goals and culture align. Discuss priorities openly to set expectations.
If the revenue manager promises quick, hockey stick growth while the CEO prefers more sustainable practices, there will be friction.
Both seek revenue growth but need to agree on strategies and style. This understanding improves collaboration and commitment.
Leveling Up Over Time
At a 10-person startup, the revenue manager needs to roll up their sleeves and get involved in all aspects of the revenue engine.
As the company scales to 50 or 100 employees, their role evolves. They can delegate more execution responsibilities and focus on high-level strategy and coaching.
Eventually, the revenue manager may transition into a Chief Revenue Officer overseeing departments like Sales, Marketing, Customer Success, etc.
Startups that invest early in the revenue manager role tend to grow into enterprises with $100M+ in revenue. Treat this as a foundational position on the path to success.
Related Posts
Takeaway
Revenue managers are masters of the startup revenue engine. They bring alignment, data-driven focus, and operational excellence to generate growth.
While often overlooked in the early stages, investing in this role pays dividends as startups scale. A strong revenue manager provides the vision, coordination, and strategy to speed the path to product-market fit and profits.
