It’s not easy to contact your child’s school to get the help you need to ensure your child’s attendance. The best way to get your questions answered is to call, and calling only works during business hours, which is a significant barrier for working parents. Even if you call, the person best equipped to answer your specific question may or may not be available. Broadly, school districts are resource-constrained. The district-level teams tasked with ensuring students can attend school without barriers are incredibly earnest, but sadly too under-resourced to be able to interact directly with all of the families they serve.

In our modern, tech-enabled present day, you need to meet families where they communicate now. Making it easier to engage with families and students isn’t just a modern convenience; it’s an essential tool in combating chronic absenteeism. 8 million students miss 10% of school days, and this chronic absenteeism is a leading indicator that they’ll drop out entirely. Academic research supports using text messaging to communicate between schools and families about absenteeism: it’s been shown to lead to a 17% improvement in attendance, 38% reduction in course failure, and a GPA increase of nearly one-third of a point.

It’s in this context that I’m excited to announce Spero Ventures’ partnership with AllHere, leading their $8M Series A. I am joining the board of the company. AllHere’s founder and CEO Joanna Smith is far more eloquent in her announcement describing the company’s origin and arc.

AllHere’s mission is profound. The founding vision was to solve chronic absenteeism, and that mission has expanded as relationships with school districts have deepened. AllHere uses a conversational chatbot interface as an intervention to nudge families when absenteeism is detected, help answer questions, and remove barriers to attendance. AllHere’s relationship with school districts and families starts with attendance, and it’s a foothold that helps schools engage with families via chat in all aspects of their children’s education. Being this primary conduit of communication is a terrific business opportunity, and it’s how AllHere will thrive in the years to come.

As a former educator and district attendance and family engagement leader at an East Boston charter school network, Joanna Smith has direct experience with the problem of chronic absenteeism in schools. She founded AllHere as the solution, and her grit in building it has been truly exceptional. The team’s response to the Covid pandemic as an attendance intervention solution when all students across the country were suddenly staying at home was equally remarkable: it helped shape the current product execution of their conversational AI chatbot, and it was built in partnership with the direct feedback from customers at a time when education administrators were just trying to keep their heads above water. If that’s not grit, I don’t know what is.

I consider it a deep honor to partner with Joanna and her team, and I look forward eagerly to the coming years. Big thanks to my colleague Stephen Wemple for introducing me to Joanna, and he will be joining the company as a board observer.

AllHere has long been supported by Rethink Education since the early days, and I’m delighted to be joining Matt Greenfield and Ebony Brown there in their service in helping the company, along with our Independent Director Jeff Livingston and a long list of terrific co-investors.

I’m delighted to announce that Shripriya Mahesh and I are partnering to lead a new $123MM fund at Spero Ventures.

I can’t say enough good things about Shripriya. I see in her a remarkable balance of product expertise, optimistic futurism, and empathetic leadership. Shripriya’s execution as global head of product at eBay during their most dominant growth stage is an essential resource. She has a wealth of firsthand knowledge about building online marketplaces, and a deep network of connections to the talented people who will build the next generation of technology companies.

Shripriya also brings to the table something extremely rare, especially among VCs: she spent over a decade as a filmmaker. All the best founders I’ve worked with have a strong appreciation for people with artistic sensibilities, because those people can do more to help them express their vision than almost anyone else. As Paul Graham articulated in his book Hackers & Painters, the connections between hackers and artists is rich. Both learn through the process of doing the work, and both do their best work when they can clearly empathize and express others’ point of view. The art of venture capital is exactly that, an art, and Shripriya’s artistic background helps her thrive as an investor.

Over the past year, we’ve built a lot of trust together as we envisioned the type of firm we’d like to build together. As part of that, I’m joining a truly astounding team: every day, I’m delighted to work with Sara, Marc, Jonathan, Stephen, and Brandon. This group has incredible energy, and everything they do is infused with their genuine enthusiasm for founders and their missions.

At Spero Ventures, we are building an early-stage venture capital firm that invests in the things that make life worth living, specifically: well-being, work & purpose, and human connection. We believe these areas are brimming with opportunities to build enormous wealth while making the world a better place — so I’m proud to commit to Spero’s mission.

Spero is also a good fit for me because we are focused on late Seed to Series A opportunities. This is a company-building stage in which I feel I’ve thrived in my career as an investor. It’s that exciting period when you have a product and a vision, and now as a founder, you need to figure out how to transition from building the product to building the company that builds the product. I love this phase of startup building and have partnered with dozens of founders that have flourished through this stage. In the art of venture capital, I improve only through practice — and I can’t wait to partner with the next generation of founders through this stage as we figure out this messy process together.

As for me, it’s been a year and a half since I was last gainfully employed. I left Spark Capital unsure of what I’d do next. I was happy (and privileged) to have space to explore what I wanted to do with infinite degrees of freedom. The first couple months I felt like I was wandering the desert, often easily distracted by shiny objects without the constraints of a job, which was simultaneously exciting and scary.

I’m deeply grateful to the community at South Park Commons (SPC). I joined the community in mid-2019, and the people there really inspired me. SPC is a community of makers and builders who want to take the space and time to explore what’s next together. Some members go on to found companies, others write books, others push the boundaries of knowledge in academia, and others join the next generation of fast-scaling growth companies.

At SPC I explored a couple different directions, and after a few months found a niche that made me feel great about how I was spending my time: helping aspiring founders through early challenges. I counseled founders on how to raise capital, how to establish a good initial relationship with a newly formed Board, how to balance power between cofounders, how to navigate cofounder breakups, and how to hire and fire your first employees. By navigating through fallow time without pressure to find my next thing right away, I was able to once again fall in love with my calling: supporting founders. I feel deeply indebted to the community at SPC for the support they provided me, and I’d highly recommend anyone at a similar stage in life consider joining.

With a renewed sense of purpose in how I enjoyed spending my time professionally, I started to explore the kind of firm I’d want to build. I was excited by the idea of really shaping the future of a VC firm — a new challenge I hadn’t sufficiently explored during my last 14 years in VC. That’s when Shripriya and I reconnected, and we were struck by how strongly aligned we were around the type of firm we aspired to build. We spent the rest of the year (a surprisingly productive quarantine) talking about the types of founders we loved to partner with, the purpose-led businesses we were certain would thrive in the future, and how to help build the future we wanted to live in.

Shripriya has built Spero with the support of our limited partner Pierre Omidyar over the last 5+ years, and he continues to support us in the fund we’re announcing today. While learning about the early days of eBay (in part through the great book The Perfect Store), I was struck by how Pierre exemplifies the curiosity, grit, and values of the types of entrepreneurs we partner with at Spero. Pierre and Pam continue to tackle some of the world’s biggest problems via The Omidyar Group, and we are privileged and humbled to have Pierre’s support.

Thank you to everyone at Spark Capital and Union Square Ventures for supporting my career to this point. VC is an art best learned through apprenticeship. You get the opportunity to watch those mentors who practiced the art before you, and, if you pay attention, you can pick the best ways in which they support founders and try to assimilate those into your own style. Both Spark Capital and USV have had a huge hand in shaping my approach to partnering with founders, and I’m grateful for the opportunities they gave me.

The biggest thank you of all I reserve for the founders who were willing to take the risk of partnering with a young tech geek early in my career. Without your faith that I’d be a good partner and board member, I’d really be nowhere. Faith is probably too small a word for the confidence necessary to take that risk. I’m in awe of what you’ve built and the problems you’re solving, daily. It’s only through your continued endorsement and referrals that I’m able to continue on my road.

I’m excited to return to my calling in supporting early stage founders. I’d love to hear from you. As always, I leave my email published on my personal website, and my DMs are open.

I’m endlessly appreciative of the of the Founders that took a chance on working with me over the years. Choosing a VC partner is a consequential decision, and one that required faith on their part to give me the opportunity to work with them. I have learned so much from watching the Founders I’ve had the privilege of partnering with execute against their ambitious visions. I admire them all for the risks they take daily, their passion for the dent they aim to make in the universe, and the endless energy the generate to drive their teams to accomplish improbable feats.

Lastly, thanks to my friends in the industry. I’m grateful for all the relationships I’ve built, and I’d love to stay in touch or reconnect as I explore next steps. Thank you.

Despite the richness of these communication-related data sources, the ability to access this data programmatically is a mess. A software application that cares about integration into mail, calendars, and contacts data needs to support multiple vendors’ APIs and multiple competing legacy standards, many of which are long in the tooth and don’t have the nice polish of modern, RESTful APIs, such as webhooks.

In this context of this problem, I’m excited to announce that Spark Capital is partnering with the team at Nylas as we lead their $16MM Series B financing. Nylas provides one, simple, RESTful API to abstract away the tangled messiness of integrating into software companies’ users’ email, calendar and contacts data sets. Like Plaid abstracting away the complication of integrating with financial institutions’ customers’ data, Nylas handles all the difficulties of access, compliance, security, and API-maintenance with a single layer of abstraction that unlocks access to 100% coverage of inboxes and calendars from all providers.

I feel very privileged to have the opportunity to partner with Gleb Polyakov, Christine Spang, and the rest of the stellar Nylas team as they build to their ambitious mission. I will be joining the board along side Alex Moore at 8VC and look forward to doing what I can to be helpful to their future growth. If you’re a member of a development team that is tearing their hair out over implementing or maintaining communications data sets, give Nylas a look. Or come build our elegant developer services with us: we’re hiring.

The folks at Atrium were kind enough to host me on a panel alongside Justin Kan (Atrium), Zach Perret (Plaid), and Niko Bonatsos (General Catalyst) moderated by Lisa Han (Atrium) last night. The topic was about raising Series A, and the audience was primarily seed stage entrepreneurs that would be gearing up for a raise soon.

I was impressed by the contributions of my co-panelists. My favorite moments were:

• After Niko and I waxed on too long about the need for authenticity in pitches from founders and the process of “falling in love” during a pitch, Justin did a great job of deconstructing our words and turning them into practical advice. He advised constantly practicing your story, especially how you communicate your vision. All entrepreneurs have an authentic passion for what they are building, that’s why they endure the masochistic process of building a company in the early years. But, not all entrepreneurs are good at communication, and finding any excuse to practice telling your vision to a friend, colleague, or mentor means that it will come across more cleanly when you tell it to an investor. A pessimist might interpret the advice of aggressive practice as leading to INauthenticity because it will make your pitch too rehearsed, but this is precisely Justin’s (great) point: you can’t be authentic if you aren’t clearly communicating and that will only come with practice, work, and honing.
• I really enjoyed hearing Zach describe the challenges and rejections he had to overcome in raising his seed round for Plaid before getting across the finish line with Spark. From my view at Spark, it was one of the easiest full partnership decisions we have ever made, and I was unaware of what was required from him to give us such a positive impression. It wasn’t until he had really solid, marquee, reference-able customers that he was able to generate enough interest in the company to get the round done, and the perseverance required to get that far on a shoe string budget was very trying.
• The advice from all panelists on the mechanics of running a tight Series A process fit well with my empirical experience with the best run process. Aggressively “product manage” the process. Target specific investors, not just firms. Have you conversations in batch of 4–6 folks at a time so you can get feedback on how the story is resonating and then iterate on the pitch for the next batch. Run through your spreadsheet (or CRM) of investors with a peer or mentor at least weekly to cover all progress updates and next touch points in order to really hold yourself accountable to managing the process. Don’t expect a VC to do something they have not done in the past (so, if you’re raising Series A, don’t pitch a partner that hasn’t led a Series A deal before).
• Lastly, the Q&A was well run. All questions were actually questions and concise. They were challenges real founders were facing at the moment (How does having an international HQ get interpreted by US-based VCs? How should I position or frame paid-pilots in my pitch with regards to revenue traction?), and I felt like we were solving real issues rather than just spitting out platitudes.

I’m grateful for the opportunity to join these smart folks on stage, so a big thank you to Atrium and Lisa Han for organizing and thinking to include myself and Spark.

Spark Capital hosted a Ready Player One viewing party last night in SF. It was a really fun event. I caught up with friends and meet a few new faces. A big thanks to Rachael and Dominique at Spark for organizing.

I am a huge fan of Ernest Cline’s book, so when I heard a movie was being made I was excited. That said, when I saw the first trailer or two, I was concerned it wasn’t going to be good. So my expectations going in to the film were mixed.

Is it a good movie? Not really.

Is it a good popcorn movie? If you like video games, movies, pop culture references, grandiose CGI, and rollercoaster-esque camera tracking: then yes, go see it in theaters for the full effect.

Some good popcorn movies are also good movies. Mad Max: Fury Road is the iconic example of a movie that excels on both fronts. Why does Ready Player One miss on the good movie front? Book-to-movie adaptations are hard.

Some adaptations fail because they follow too closely to the original text. The Watchmen is a perfect example of this failure. Zack Snyder’s adaptation of this beloved comics series captured all the brutality and cynicism of the comics in a way that made its 163 minute runtime feel painfully loyal to the original series and sacrificed entertainment value in the process. Movies from fun books need room to be fun movies, and that requires some space for creative license in adaptation. I was pleasantly surprised to find this is not Ready Player One’s problem. The movie deviates from the book significantly in plot events, and the changes (to plot only) are 90% for the better.

For example, in the book, there is a plot device called FlickSync, where characters have to play a game of “movie-karaoke” (players quote Matthew Broderick’s lines in WarGames) in order to win a mini-game and progress in the plot. Spielberg’s Ready Player One never uses the phrase FlickSync, ditches WarGames, and totally changes the plot device for the better. The movie equivalent adaptation of this concept makes for, by far, the best 15 minutes of the movie, as the central characters play with the sets, themes, and events of The Shining. Spielberg simultaneously messes with and pays homage to The Shining in a way that only an authentic connoisseur of movies could do. It feels like a more approachable version of Tarantino’s same mash-up-like love of film.

If that’s the movie’s peak, the nadir is the beginning. There is no investment in Wade’s plight in the Stacks, no earned development in the Hero’s Journey, no reluctance, and, as a result, generates no empathy. Instead, the beginning of the movie spends 90% of its calories setting up all the rules of the game (both the “rules of the game” of the movie and the rules of the literal game of the Oasis). It crosses into the territory of running down a long checklist of rule explaining, and it tries to compensate for this flaw by throwing the camera tracking around the screen in typical 3D-movie, gravity-defying craziness that is just distracting. There is a Hamlet-esque “stating of the rules of the game from beyond the grave” scene that the book does a good job of earning and the movie takes as a foregone conclusion before it is even shown. A missed opportunity.

Elsewhere in the rule set: the book sets up its central McGuffin in a way that feels like the attainment and outcome matters, not just the journey. By contrast the movie feels littered with McGuffins that distract from its central McGuffin such that it’s hard to keep track of which ones matter and which ones are ancillary.

Despite all those flaws, there is one audience that will have fun with this movie beyond just its good-popcorn-movie value: easter egg hunters. There is a plethora of quick shot cultural references cast about every scene. If you consider yourself a savant of pop culture (80s and onward) you’ll find the movie winking at you constantly. Ready Player One (the book) bathes in nostalgia in a way that feels deliciously indulgent. Ready Player One (the movie) attempts to recreate that experience, and in Spielberg’s hands, does so best in harking older movies, which makes sense as Spielberg’s wheelhouse.

Panorama Education has news today. They raised $16MM in a Series B led by Emerson Collective. Ross Jensen has joined the board from Emerson Collective, and I look forward to working with Ross, along with co-founders Aaron Feuer and Xan Tanner and the rest of the amazing Panorama team on the company’s continued mission. Panorama serves over 5 million students today, and this is just the beginning.

Panorama Education was founded with the mission that we need to look beyond just proficiency in academic subjects to understand how kids are doing in school. We need to look at the whole child; we need to motivate a love of learning and foster social-emotional growth too. Drawing from startup lessons: you cannot grow something you aren’t measuring. Panorama closes the feedback loop and allows educators to measure improvement in social-emotional learning.

If you want to see this focus in action more practically, check out Panorama’s case study with Carolina Voyager Charter School on what grit means to fourth graders. It’s a great initial step to set aside dedicated classroom time to talk about grit. But the picture is made complete by using Panorama for Social-Emotional Learning to measure strengths and areas for improvement, so grit can be improved through iterations with data-driven feedback.

Panorama started with their own ground-truth, collected from students, teachers, and parents via our research-backed surveys product. The second phase of execution on the mission was the creation of Playbook, a resource guide for taking the output of survey data and providing actionable strategies to address areas for improvement in the social-emotional learning environment of a school. Now, this new financing will help drive the third product phase in executing the company’s mission: Panorama Student Success. Student Success combines academic, attendance, behavior, and social-emotional learning data from a variety of sources to provide a holistic picture of each student. Student Success will significantly increase the pace of feedback, so educators can address issues and engage interventions in much tighter cycles.

I’m really excited for this next phase of product execution from Panorama Education. Panorama works with 400 school systems today, including the New York City Department of Education (NYCDOE), Dallas Independent School District, San Francisco Unified School District, and Long Beach Unified School District. But that’s just the beginning of their reach. Panorama’s role in the world today is more important than ever before, and I feel privileged to partner with Aaron and Xan in executing their mission.

This rebrand leaves me feeling reflective. The road to this moment has required clarity of vision and significant execution discipline. It’s a long road, and the change to the name Carta is timely as the company’s product offerings expand to fill out the mission. When Carta first started, the key product innovation was issuing stock certificates digitally. So the name “eShares” was a clean expression of the value proposition, and a good vehicle for the first leg on this road. But now, our new name is the right vehicle for the next leg because the product offering has expanded significantly from the early days, for example:

• We now offer valuation services. Carta is the largest provider of 409a valuations on the market, and a 409a valuation comes free with a subscription to the Carta platform. For Seed and Series A stage companies, a Carta subscription with a 409a is less expensive than just a 409a from a competitive provider, which makes it a no-brainer economic decision to join up early on.
• You can now close financings on Carta. Carta raised $42MM in a Series C a couple months ago, and the financing closing process was managed entirely on the platform (as opposed to the status quo mishmash of email attachments, data rooms, scanned sig pages, PDF wire instructions, and Docusign requests).
• Carta is the system of record for ownership in assets, so it was natural to build a document library to organize all the transactional materials that document each financing and equity issuance.
• Compliance with security regulations is not trivial, and Carta’s ground-truth knowledge of all securities issuances put us in a great place to offer compliance solutions.
• As the density of companies on the platform increased, it was a natural next step to build out tools for investors to manage their entire portfolio on Carta. The first step was to see a full picture of a private equity portfolio in one dashboard, and the next phase will enable automated tracking of KPIs for each company in a portfolio.
• For companies that have achieved escape velocity and have demand for their equity that exceeds their balance sheets’ needs, Carta can help run an organized tender offers for companies powered by software.
• The most recent stop on this road: Carta now supports equity issuance and tracking for public companies. Public companies can manage their employee equity plans on the platform, and Carta is an SEC registered transfer agent.

As the product offering expanded to serve a greater number of parties and use cases, the “eShares” name felt a little too small and on-the-nose relative to the current breadth of the business. Carta is a great name for this next journey on the road.

The decision to rebrand to Carta has been in process for a good amount of time. I remember when the team decided to explore a new brand name, our VP of Product Josh Merrill led the Board in an exercise to find a new name. To be clear, the company found the name (not the Board), so this exercise was not to find a name exactly, but to help the Directors understand what’s in a name: who we are. We spent 120 minutes together on the subject, but only 5–10 of which were spent brainstorming/discussing names directly. The vast majority of the time was spend exploring: What are our values? What do we stand for?

I generally approach these types of exercises skeptically. I’m too left-brained (bordering on robotic), always looking for THE calculated answer, as opposed to exploring textured nuance. I walked away from the exercise a true believer: I felt I had a much better understanding of the mission and vision of the company once we were done, which was very clarifying. There were practical advantages too. For example, I felt like the management team’s product prioritization decisions were so much clearer to me. When you know who you are, it feels more obvious what to build next.

I’m very lucky to work with Henry Ward and the rest of the team at Carta. This new name brought me much closer to the company, and it’s a great name of the next phase of this business. Carta is building the system of record for ownership, in assets of all kinds. It’s an incredibly ambitious mission, and I’m grateful to have the opportunity to help where I can.

When Spark is exploring opportunities to partner with entrepreneurs who are building businesses focused on the enterprise market, we get excited when the product experience lights up our pattern recognition we have built up from our consumer investing experience. In consumer tech the product needs to be able to stand alone. The product must be a compelling experience, able to sell itself through dead simple onboarding and a lightning quick path to the “a-ha!” moment where the value proposition of the product clicks into place.

This is the magic of Particle. The company takes a complex problem, building and deploying IoT products in enterprise environments, and solves it with a well-polished comsumer-like product execution. Getting a quick prototype up and running with Particle is delightfully simple. They handle the messiness of hardware hacking and making devices talk over the internet by really owning every part of the problem up and down the stack. So often when building a product, it’s too easy as a designer to dismiss the rough edges where the product interacts with other layers of abstraction as “not my problem.” Particle takes the opposite approach. To smooth out the full experience of getting an IoT project live, Particle implemented well-designed, first-party defaults that just work, and built these defaults in modular, loosely coupled ways that allow you to swap in alternatives as desired. For example:

• Particle’s Electron product comes with its own SIM card and MVNO specifically optimized for IoT use cases, such that you don’t have to worry about cellular setup messiness. But, if you prefer to use a third-party SIM and network, no problem.
• Particle devices default to connecting to Particle’s cloud platform, so you have a well-organized soft landing place to stream data for your IoT projects from the get-go. But, if you prefer to write to your own S3 buckets, then fire away.
• Particle forked the Atom IDE, so developers can get up-and-running with a tightly integrated dev environment right away, without worrying about the mess of provisioning a new dev environment with plug-ins (and their dependencies) in an existing IDE. But, of course Particle works just fine with whatever IDE flavor you prefer.
• Particle provides first-party development kits and hardware modules to developers that are easily provisioned in the Particle cloud platform by default. But, developers can easily connect other popular solutions like the Raspberry Pi to the Particle cloud.

Each of these examples could have easily been dismissed by a product manager as “not my problem,” but Particle maniacal focus in stringing together these various layers of the stack seamlessly by default makes all the difference. The sum of this work is an IoT cloud platform with the “it works” feature, which is shockingly lacking from most IoT implementations. The “it works” feature might seem trivial or table stakes on the surface, yet, this has been a persistent problem in IoT for decades. In a survey by Cisco, 74% of corporate IoT initiatives fail, and most of them fail in the prototyping phase. “It works” matters.

Having a delightful, consumer-like product with an enterprise sales and business model gives Particle and unusual edge in distribution that we at Spark love to see. It means that engineers at R&D labs inside large enterprises are messing around with Particle in their spare time at home on side projects. So, when an internal corporate initiative to explore a new IoT project forms and a search begins for solutions, Particle is already top of mind for the engineers tasked with implementing these projects. Easy prototyping, at home or in the office, is a wonderfully organic source of new leads for enterprise sales, and it maps nicely on to Spark’s pattern recognition of successfully distributing inside large corporate customers bottoms-up with our investments in companies such as Slack and Trello. And, this isn’t just a handful of engineers; it’s a development community of 120,000 engineers, eagerly helping each other and sharing resources.

When describing Spark’s investment in Particle, I want to touch on Zach Supalla’s arc in building the company. Zach is a recovering McKinsey consultant with an MBA from Kellogg; a pedigree which cultivated and validates his ability for strategic thinking but is not a common background as CEO in Spark’s portfolio. His perseverance in realizing his vision for Particle led him to teach himself to code (at painful, low levels of the stack given his IoT hardware ambitions) and build his first prototype in order recruit his cofounder and CTO. Furthermore, in 2013 he and his co-founding team picked up their lives and moved to Shenzhen for the HAX incubator in order to give their company a strong headstart. The time in Shenzhen allowed Particle to build a strong local network for talent and suppliers that enabled them to succeed in offshore manufacturing where the vast majority of US-based hardware startups stumble. Zach has a remarkable blend of skills that are amplified by his grit, and I feel incredibly lucky that Spark has the opportunity to partner with him and the rest of the Particle team as they realize their vision.

If you’re interested in learning more, Zach has a great post describing what he has built and where he’s heading next.

When we review the sales pipeline, we often look at a weighted average of the Total Contract Value (TCV) of the prospects multiplied against their likelihood to close. Likelihood to close is usually defined by a sales team policy. Some companies define likelihood to close based on deal stage (have you done a demo yet? Is the contract out for signature?); other companies do a deal book review with Account Executives to determine likelihood to close in a more subjective way. The weighted average of the pipeline is the primary methodology of sales pipeline analysis I’ve seen in pretty much every B2B company’s board deck, and it’s often a company KPI.

But the weighted average alone tells an incomplete story when dealing with probable future outcomes and uncertainty. When you have a series of deals that each have some probability of closing, you have a rich probability distribution which is likely not normally distributed. A couple large deals in the pipeline can usually make-or-break the quarter for a sales team. Why not run a Monte Carlo simulation on a sales pipeline in order to really understand the full range of outcomes possible in this probability distribution? A Monte Carlo simulation will “play forward” the future by rolling dice against the probability of each deal in the pipeline, in accordance with the probability that deal will close. Monte Carlo naively simulating the future outcomes of the pipeline a thousand times, and then one can look at all those outcomes in aggregate to get a better feel for how the future might unfold.

I tweeted out asking if any sales team used Monte Carlo simulation on their pipe, and the tweet got a handful of likes, but no one showed me an example. So, I built this on a whim. Here’s a hypothetical sales pipeline and my work. The first sheet has all the raw data:

and the second sheet has the histogram of the Monte Carlo simulation results.

The x-axis is bins of the sum of the pipeline yield and the y-axis is the frequency with which the Monte Carlo dice rolls landed in that bin. The integral of that histogram is 1000 (for our 1000 simulations). As you can see, landing one large deal significantly impacts the outcome of the simulation, and there are a whole bunch of probable outcomes (eyeballing the histogram, looks like ~11% of the outcomes) on the left side of that histogram where the sales team fails to land a large deal.

When looking at a histogram of a monte carlo simulation, I find the following key variables informative:

Events outside those 95% thresholds are unlikely, but you should be prepared for the full range of events that happen within those 95% guard rails. In the case of my dummy data, you could drive a truck through those 95% gates. Most real world examples from actual sales teams in market will have more prospects and less variance in deal size, so the 95% gates will be tighter, but I think most leadership teams and boards would be surprised at the range of possible outcomes that they haven’t accounted for while staring down the results of their sales pipeline Monte Carlo simulation.

By contrast to the data generated by a Monte Carlo simulation, most companies only report weighted average of the pipeline, which will always be very close to the mean of the simulation above. The weighted average (or simulation mean) is misleading precise, too narrow, and fails to provide insight into the full range of possible outcomes.

Unfortunately, Google Sheets doesn’t have native support for running a Monte Carlo simulation, so here’s the code I wrote in App Script in order to generate 1000 Monte Carlo dice rolls against the sales pipeline outcomes. It’s pretty hacky code with hard-coded cells, but if you can write a Javascript “Hello World” then I think you can adapt it for your purposes in combination with the spreadsheet above:

function RunMonteCarloSim(total, runs) {
 var sheet = SpreadsheetApp.getActiveSheet();
 var row = 4;
 for (var i = 0; i < runs; i++) {
   var monteOutput = sheet.getRange(“L” + row);
   var trialSum = sheet.getRange(total);
   monteOutput.setValue(trialSum.getValue());
   row = 1 + row;
 }
}

RunMonteCarloSim(‘J24’,1000);

An ending caveat: I’m not sure whether I’d recommend all the B2B companies I work with do this analysis. This level of pipeline analysis is probably overkill for some smaller companies, and those calories spent doing this analysis would very likely be better spent on sales team training or building sales support materials like case studies or scripts. But, that’s why I did this brief dummy sample and published my work, so, in theory, it will be easier for others to copy without reinventing the wheel. And for larger companies with more analytical bandwidth, it could be a more useful exercise. I wonder if any sales CRM products offer a Monte Carlo simulation baked directly into their product already? If not, it wouldn’t be to hard to add a feature to automatically generate this type of report. I’m sure there must be a Force.com app (or a dozen) floating out there already.