Alignment—not acceleration—drives Rule-of-40 outcomes
The real question is not “How do I grow faster?”; it is "What happens to your Rule of 40 when growth comes from eliminating variance instead of adding cost?"
Something we see in the market all too often is enterprise software companies exhibiting a wide range of performance across sales reps. While this is occasionally attributable to natural sales “athleticism,” more often it is something the company is, unwittingly, allowing to happen.
When we see a wide distribution of performance among enterprise sales reps, our initial thesis is that the vendor is not fully aware of how uniform the enterprise software buying pattern actually is — or how uniform it can be. The result is a proliferation of working theories inside the sales organization about what makes a buyer a buyer and how to sell to him/her (aka, relationship selling). Each rep invents his/her own logic. Each manager tolerates variation. The company mistakes diversity of approach for adaptability. This mismatch is not benign.
When you go to sell your company, the proliferation of working theories immediately discomfits a sophisticated buyer. The sharper the buyer, the faster they sense that the sales motion has the physics of consumer selling — many theories, loosely governed, difficult to replicate. At that point, perceived scalability takes a hit, and with it, valuation confidence.
To make this concrete, consider the following example of a five-person sales team. Assume for a moment that Rep 5 simply does not have the eventual wherewithal, but that Reps 2–4 do. To the extent that Reps 2–4 book less than Rep 1, we can reasonably define that gap as "opportunity loss." That loss is not due to market conditions — it exists because each rep is running a different theory of the buyer instead of the same one as Rep 1.
In this example, simply recovering the opportunity loss from Reps 2–4 produces nearly a 40% increase in bookings, without adding headcount, increasing pipeline coverage, or lowering price.
And this is the part that matters: this improvement does not just increase growth — it increases predictability, scalability, and capital efficiency. Those are exactly the attributes the Rule of 40 is designed to reward.
If your sales motion isn’t delivering the predictability your growth targets require, Pipeline Grader can help identify where performance diverges—and why. Visit www.moicpartners.com for more information.
