Episode 53: Surviving the Valley of Death as a Startup

In this episode of the RevOpsAF podcast, co-host Matt Volm chats with startup advisor and former Okta sales leader Garrett Stanton about one of the most daunting (and least discussed) phases in a startup’s growth: scaling from $1M to $10M in ARR. Commonly referred to as the “Valley of Death,” this stage often feels like you’ve made it - only to realize you’re nowhere near out of the woods.

Despite early momentum, fewer than 1% of SaaS startups successfully cross the $10M ARR mark. Stanton unpacks why this brutal drop-off exists and lays out a tactical framework for getting through it, using examples from his time scaling GTM teams at Salesforce and Okta and his work advising early- and growth-stage startups.

Spoiler: what got you to $1M will almost certainly break on the way to $10M. Here's how to survive—and scale anyway.

The Valley of Death: Why the $1M–$10M Journey Kills So Many Startups

Garrett opens with a stark data point: while thousands of startups hit $1M in ARR, less than 4% reach $10M. And according to other estimates, the real number may be closer to 1%. That’s not a funding problem—it’s a go-to-market execution problem.

“This is the stage where companies don’t necessarily fail, but they do fail to reach their full potential.” — Garrett Stanton

He explains that many companies treat $1M ARR like a badge of product-market fit. But product-market fit is not a static achievement—it’s a continuum. And in the $1M–$10M range, founders must prove not just that people will buy the product, but that their organization can repeatedly sell it at scale.

This stage often reveals weak GTM processes, messy ICP definitions, bad hiring decisions, and a lack of alignment between product, sales, marketing, and RevOps.

A Scalable Mental Model: Problem, Market, Team

To diagnose a startup’s chances of making it through the valley, Garrett recommends evaluating three key elements:

1. Problem – Is it real, painful, and urgent? Does it show up in budgets?
2. Market – Is the TAM large enough, and is there buyer intent?
3. Team – Do you have people who know how to identify and serve that market?

“If any one of those three isn’t clicking, it doesn’t matter how good your product is.” — Garrett Stanton

This model is useful not just for diagnosing go-to-market health, but for building operational strategy, hiring plans, and even fundraising narratives.

From Chaos to Clarity: Lessons from Okta's Early Days

Garrett shares a case study from his time at Okta, which he joined in 2011 when the company had 12 customers, no RevOps function, and less than $1M in ARR.

By the time Okta hit 50 customers (roughly $1M–$2M in ARR), Garrett and the leadership team made several key pivots:

• They clarified who they were selling to (enterprise IT buyers with cloud migration goals).
• They shifted their messaging from features (single sign-on) to outcomes (mobility, security, compliance).
• They created a real go-to-market plan—not just quotas, but TAM analysis, account segmentation, and vertical narratives.
• They launched customer advisory boards to test messaging and extract insights from both wins and losses.

“Our early customers didn’t say, ‘I want single sign-on.’ They said, ‘We need to meet 21 CFR Part 11 compliance.’ That’s what clicked.” — Garrett Stanton

That conversation with a customer in Lexington, Massachusetts led to a complete overhaul of their ICP and messaging strategy—proving that deep customer interviews, not assumptions, are the foundation of scalable GTM.

Build the Plan, Then Build the Muscle to Adapt It

Garrett emphasizes the importance of having a real plan—but also being nimble enough to revise it.

“Start with a plan, then assume that plan is going to break. Make sure you have mechanisms in place to learn and adapt.” — Garrett Stanton

He advises companies to:

• Set short time horizons (monthly or quarterly) for review and course correction.
• Assign clear ownership of the plan (preferably RevOps and Finance).
• Create feedback loops between GTM and Product.
• Revisit the ICP, messaging, and customer segments every 90 days.

As Matt Volm adds: “You need a single owner—otherwise you’ll end up with the Spider-Man meme where everyone’s pointing fingers at each other.”

The Real Role of Early Customers: Your Messaging Department

Most startups rely on early adopters to shape product development—but Garrett reminds us they should shape your messaging just as much.

“Your first 10–20 customers will tell you why they bought. Don’t pitch them. Ask them what they needed and how they found you.” — Garrett Stanton

This insight is especially relevant for revenue operators who are building messaging, sequences, sales enablement materials, and campaign themes. Your customers’ words should become your copy. Not your product marketing team’s gut feel.

Hiring for the Journey: Traits That Predict Success

So who should you hire to get through the valley?

Garrett’s answer: Look past credentials. Optimize for curiosity, urgency, integrity, and comfort with ambiguity.

“Some of the best people we hired came from telecom or totally unrelated industries. They weren’t polished, but they were hungry, honest, and loved learning.” — Garrett Stanton

Avoid the “BigCo transplant” who only knows how to execute inside a well-oiled machine. Instead, look for high-agency players who see joining your startup as a platform to build—not inherit—success.

He also recommends documenting what “good” looks like early and building your hiring rubric around it. Don’t just hire for potential—hire for alignment with your operating cadence, customer profile, and velocity.

Culture as Your Secret Weapon

Culture isn’t just a nice-to-have. At this stage, it’s a GTM multiplier—or killer.

At Okta, two values stood out:

• Protect the customer – Be honest about what the product can (and can’t) do.
• Pursue knowledge – Intellectual curiosity was rewarded at every level of the org.

“Culture is what gets you through the days when the plan isn’t working. And those days will come.” — Garrett Stanton

Accountability and speed were also emphasized. Garrett recommends defining team standards early, then hiring, managing, and promoting based on those standards—not vague vibes.

What to Do When a Hire Doesn’t Work Out

Even with strong hiring processes, misfires happen. Garrett and Matt both emphasize the importance of fast, respectful exits.

Matt shares a story of hiring an AE with a stellar resume and references—who simply couldn’t adapt to their early-stage GTM environment.

“You won’t bat 1.000 on hiring. But what you can control is how quickly you recognize it, and how you learn from it.” — Matthew Volm

Dragging out underperformance doesn’t just hurt productivity—it undermines team culture and morale. Clarity and decisiveness are key.

Final Advice: Don’t Just Survive—Build with Intent

To wrap up, Garrett leaves founders and operators with one last piece of advice:

“You don’t reach $10M by luck. You get there by having a system for learning, adapting, and operationalizing every insight. That system is RevOps.”

TL;DR: Tactical Takeaways

• 💀 The Valley of Death is real: <1% of companies make it from $1M to $10M ARR.
• 📐 Framework = Problem → Market → Team: If one’s misaligned, everything breaks.
• 📣 Customer insights drive narrative: Use their words, not your feature set.
• 🛠️ Plan > Tools: No tech stack can fix a broken go-to-market motion.
• 🧠 Curiosity > Resume: Hire people who ask great questions and embrace ambiguity.
• 🔁 Culture = Execution: Define, reinforce, and scale it intentionally.

Looking for more?

Explore these related reads on RevOps strategies for early-stage companies:

• A Framework to Improve RevOps Team Dynamics
• The Process of Building Process
• How and Why to Hire a RevOps Enablement Professional

Want to survive your own Valley of Death? Start by surrounding yourself with operators who’ve been there 👉🏻 check out our blog, join our community and subscribe to our YouTube Channel for more insights.