• The Rainmaker Report
  • Posts
  • What Needs To Be In Place When Developing New Business + Your Sign To Vibe Code this weekend

What Needs To Be In Place When Developing New Business + Your Sign To Vibe Code this weekend

+ why past conversion rates can be almost useless when predicting the future sales performance (but they matter much more for mass marketing campaigns)

Hi friends,

I finally managed to formalize my thinking on new business development into a framework that feels complete, digestable and easy on the eyes.

I’ve tested it in a couple of conversations I’ve had this week and it feels very helpful to be able to share my mental model with someone in writing!

I will be developing deep dives on each one of those elements but for now I am pleased I can share it here with you before I share it publicly.

**

Next update, I am obsessed with vibe-coding, or to be more exact what I am now able to build by myself.

I started with a simple experiment trying to make me more efficient in the way I am learning new things: I wanted a tool that lets me drop a YouTube link to a longform video and it spits out timestamped, detailed notes from it.

Outcome-wise, I kinda got where I wanted to but experience-wise, it open up a new world for me.

Over the past 3 days (!) I built a pipeline modeling tool that visualizes what the upcoming sales campaign will look like - in terms of time of the efforts and the expected results over the coming weeks and months.

Massively different expected results with conversion rate applied to 100 vs 10k - p-value matters

And this exercise reminded me of one of the concepts from grad school Statistics class (p-value!0- and it suddenly came in very handy

Imagine this - I will tell you that in my efforts by now I had 5.6% end-to-end conversion rate on my sales campaign, from the initial outreach til the deal won.

The implied average number of initial contacts needed to close one deal is… little less than 20, around 18.

Still with me? …let’s say I absolutely need to close 5 deals in the next period.

All I need to do is to get 18 × 5 = 90 qualified leads and I am good to go…right? Or maybe a few more, just in case? 95-100?

Well - nope.

If you really have to close 5 deals and your past conversion rate was 5.6%, you need to put 295 (!!) leads into your pipeline in order to be 99% sure you will get 5 deals out of it.

With only 100 leads going through your process that had 5.6% success rate, in 9/10 cases the number of deal you close will be in between 0 and 17 !

Not really helpful.

However had this been a mass email campaign and you are sending out 10,000 emails with previous 5.6% conversion rate, the number is big enough that any individual noise doesn’t really matter.

You can be 99% sure that the conversion rate of your campaign will be in between 5-6.2%.

Isn’t it wild?

My morale of this nerdy detour is that:

  • if you want very high chances of success in something that doesn’t have too many repetitions,

  • the past performance (conversion rate) is a poor predictor of the future results and also that

  • you need to plan to put in so much more than you’d originally estimate (95-100 vs 295) to be almost sure you get what you wanted.

 

And with that I am signing off - onwards from here!

Katka