When building a startup, deciding where to focus your efforts and resources is one of the most critical challenges. While every founder’s journey is unique, there’s a fundamental startup growth sequence to follow when establishing operational centers of excellence. This concept called The Order of Operations by Sam Jacobs, CEO of Pavilion, emphasizes the importance of building strong, scalable departments in the right order: Product first, then Marketing, then Sales.
One center of excellence I felt was missing was Customer Success, and I will explain why.
Let’s break down this sequence and understand why following it can make or break a startup’s ability to scale effectively.
Step 1: Product – The Foundation of Enthusiasm
The journey starts with your product. Without a strong, compelling product, even the most sophisticated marketing and sales efforts will fall flat.
Why product comes first:
- A great product solves a real problem and generates enthusiasm among its users. It creates an organic foundation of word-of-mouth marketing and early adoption.
- At this stage, your focus should be on achieving Product-Market Fit (PMF)—ensuring that your product not only works as intended but also delivers genuine value to your target audience.
Startups often get tempted to rush into building marketing and sales teams before the product is something people are crazy about. You need to obsess about your users and be absolutely driven to continuously make your product better. Invest time and effort in refining the product until it’s something people truly love.
Step 2: Marketing – Harnessing and Amplifying Enthusiasm
Once you have a product that excites its users, the next step is to broadcast that enthusiasm to a broader audience. This is where marketing comes in.
The role of marketing:
- Identify and understand your target audience. Who benefits the most from your product? What problems are you solving for them?
- Create and deliver a compelling message that resonates with your audience’s pain points.
- Use the right channels to reach the right people at the right time.
Marketing acts as the bridge between your product and potential customers. It builds awareness, creates interest, and nurtures leads, ensuring your product gets in front of those who need it most.
Common mistake: Many startups treat marketing as an afterthought. However, without a strong marketing foundation, it become more difficult to achieve PMF, as if it isn’t difficult already. Marketing is the engine that drives demand and fuels the sales pipeline, especially in the early stages.
Step 3: Sales – Converting Interest into Revenue
Finally, sales takes the interest generated by marketing and turns it into revenue. Sales is where enthusiasm becomes action.
The role of sales:
- Engage directly with leads to understand their needs and address their concerns.
- Guide potential customers through the decision-making process and close deals.
Sales teams thrive when they are supported by strong marketing efforts. A well-built marketing department ensures that sales teams receive a steady stream of qualified leads, marketing and sales materials that enable them to be more effective, allowing them to focus on what they do best: converting interest into revenue.
Common mistake: One of the biggest pitfalls startups face is building a sales team too early. This doesn’t mean you shouldn’t hire a salesperson early on, but creating an entire sales department before your marketing team can reliably generate enough opportunities in the early stages of your startup is often premature and can set you back significantly instead of contributing to the startups’s growth.
Step 4: Customer Success – Retaining Enthusiasm and Driving Long-Term Value
While the early stages of a startup growth, founders often prioritize acquiring new customers (or “new logos”), customer success becomes the next critical center of excellence once Product-Market Fit is achieved. Retaining customers and ensuring their satisfaction is essential for sustainable growth.
The role of customer success:
- Ensure that customers achieve their desired outcomes with your product.
- Build relationships that foster loyalty and turn customers into advocates.
- Identify opportunities to expand revenue through upselling and cross-selling.
Why it comes later: In the early stages of startup growth, acquiring new customers is the primary focus to validate demand and iterate on the product. However, as the business matures, retention becomes way more important! A leaky bucket—where customers churn faster than they are acquired—can quickly derail growth. Investing in customer success ensures that the enthusiasm generated by your product, marketing, and sales efforts translates into long-term value.
How SaaS Businesses Grow
The growth of SaaS businesses often follows a predictable trajectory, as illustrated below:
In the early years, new logo acquisition is the driving force behind growth. This is where marketing and sales play a critical role in bringing in fresh customers and building momentum.
However, as the business scales, retention becomes the key driver of exponential growth. Without retaining and expanding existing customers, sustainable growth becomes unattainable.
Retention ensures that the foundation built through new customer acquisition isn’t lost to churn, while expansion through upselling and cross-selling allows businesses to grow revenue from their existing base. This shift highlights the increasing importance of customer success as the most important center of excellence over time.
The question to ask yourself is: Are you building in the right order? Startups that prioritize product development, invest in marketing early, scale sales strategically, and focus on retention through customer success set themselves up for long-term success.