Come this fourth quarter, while most companies will be drafting their annual plan for the year ahead, Monetate executive chairman David Brussin will be sitting down to formulate his company's three-year plan.
It's a practice he swears by, despite the fact that, upon first glance, it raises eyebrows among pretty much everyone who learned how to benchmark a different way.
Monetate, which was founded in 2008, provides cloud-based marketing optimization tools. It's easy to imagine that Brussin's planning method is too broad to work in such a rapidly changing, technology-driven market.
But it's actually difficult to picture a more nuanced approach--at least the way Brussin does it. That's because he and his team formulate plans while armed with lots of data about the great companies that have gone before them. Brussin's process was recently described in a detailed post in First Round Review.
To start, the founder poured over S1 forms from now-public companies with customers similar to Monetate's. The team created a spreadsheet that tracked each company's revenue over time. Then they asked questions like:
1.What was the best performance we saw for any company? What was the worst? What was the average?
2. How far apart were companies on any given metric within the same year (metrics included departmental spends, bookings, and more)?
3. Which years were "great" for companies and what moves or outcomes made that possible for them?
One year that Brussin tried this, he was looking to learn how much he should plan to budget for sales and marketing down the road. Though he had only been planning to spend a relatively modest amount over three years, he noticed a huge payoff for companies that had heavily invested in sales and marketing during the same growth stage that Monetate was in.
"We had to ask ourselves, 'Do we really think we're smarter than everybody else?' It's okay to be different from the pack--you may very well be smarter or better in a specific area--but you better thoroughly understand why that is," Brussin said.
If you're looking to attempt this yourself, there's a caveat to Brussin's three-year plan. The idea isn't to draft and save it, only to dig it up again in three years. In fact, Brussin revisits the written strategy every quarter. This is how Monetate stays on course now--and in the future.
"The reality is, if you're trying to sustain rapid growth, you need to make sure the numbers work out for several years into the future," Brussin said.