Your startup is growing. You suspect you have initial product market fit. Time to hire the first head of each department. Sales, marketing, customer success, engineering, product management. Some founders might have experience or exposure into one of these teams. But rarely do they understand every one well enough to hire the right department chief. How should you do it? I’ve observed three successful strategies.
First, do the job yourself. Great managers manage themselves out of a job. By doing the work yourself first, you’ll know exactly what the role entails and what questions to ask. You’ll have the experience to judge whether a candidate can outperform you in that role. This is a common strategy for sales. The founders confirm product market fit with the first 10-20 sales and then hire an expert to scale the team and polish the process.
Second, enlist experts from your network and your Continue reading "Hiring for a Discipline You Know Little About"
3 Reasons We Hold Daily Remote Team
Continue reading "How Our Remote Team of 15 Runs Daily Video Meetings in Under 10 Minutes"
I commuted to my first job on a bicycle. With my parent’s help, I bought a lemon yellow second-hand road bike that I pedaled 20 miles each way from 30th and N streets in Georgetown, Washington DC, over bustling Chain Bridge and the languid Potomac to an office park buried in Tyson’s Corner in Virginia. That was my workout each week. Then I moved to California and retired the bike. When I started working at Google, I spent the hour on the Google shuttle from San Francisco to Mountain View emailing. Today, I drive most places.
For the past few months, I’ve been listening to stand-up comedy. I’m trying to be funnier, but it’s not working. But at least I’m laughing while maneuvering through SOMA morning traffic. Sometimes, I blend in some podcasts from time to time including Invest Like the Best and Software Engineering Daily. I also try to Continue reading "Maximizing Productivity on My Commute"
A founder asked me if we had reached the point that SaaS is commodified. “Can you build a venture scale SaaS company anymore?” He made three key points to support the argument.
First, the technology barriers to starting a SaaS company continue to fall. Amazon, Google and Microsoft provide sophisticated, scalable, and easy to use infrastructure as a service. Next-generation machine learning tools are also available by API and improving all the time.
Second, the customer acquisition playbook is well known. Whether it’s Predictable Revenue written by Aaron Ross or Mark Roberge’s The Sales Acceleration Formula, or others, authoritative texts describe step by step how to structure, manage and measure a SaaS sales team. Consequently, this go to market model is no longer a differentiator in the market.
Third, the costs of customer acquisition have risen. Whether it’s Facebook ads, LinkedIn ads, Google search engine marketing and retargeting, email Continue reading "Has SaaS Become Commodified?"
We’ve seen quite a bit of volatility in the valuations of publicly traded software companies over the last 5 years. In 2014, the average software company traded at 7.7x forward revenues - the sum of projected revenues over the next 12 months. Two years later, that multiple dropped 57% to 3.3x. Today, we’re exactly where we were in 2013, at 5.4x, which is coincidentally, is the average over this time period.
The average figure masks the substantial variance in forward muliples. By breaking out the multiples on a stock by stock basis, we expose the true distribution. Veeva (VEEV) tops the list at 11.6x forward while MobileIron plays cleanup at 1.5x.
In addition to the broad range of multiples, some of these businesses has seen tremendous volatility. HortonWorks and LivePerson have seen greater than 90% increases in forward multiples, while Zendesk and Twilio observed contractions