A cofounder is asking for more equity post fund-raising. What should I do?

Listen. It usually means something is wrong. Or at least, off:
  • If you got the equity splits right at first, usually, big issues don’t come up later. This may be a sign you need to fix things here.
  • If your co-founder isn’t willing to take the dilution that comes with raising capital and you are— that could be a sign you guys are misaligned here on how — and if — to Go Big. This is much harder to fix.
In any event, it’s not the right time to bring the topic up if you guys are communicating well. So I suspect you aren’t. You’re aren’t aligned and “thinking as one” co-founding entity. And it’s on a super important issue. So listen. Right now. View original question on quora The post A cofounder is asking for more equity post fund-raising. What should I do? appeared first on SaaStr.

Founders, it’s time to embrace radical experimentation. Here’s why.

Editor’s Note: This article first appeared on Inc. here. Physicist Niels Bohr once mused that an expert is someone who has made all the mistakes that one can make in a narrow field. That’s not a surprising sentiment coming from a scientist. Science is based on exposing ideas to the rigor of real-world testing. It’s an antidote for wishful thinking, superstition, unjustified enthusiasm and overconfidence. Failure, in this way of thinking, is constructive because it brings you closer to the truth. That said, even in tech circles where you’d think there would be reverence for the scientific method, using controlled randomized testing is severely underutilized. There are exceptions though. Airbnb claims to run some 700 experiments a week, and CapitalOne is known as a pioneer in business experimentation, but more often, companies do way too little real-world testing. One of the main reasons is a very human one
Continue reading "Founders, it’s time to embrace radical experimentation. Here’s why."

Founders, it’s time to embrace radical experimentation. Here’s why.

Editor’s Note: This article first appeared on Inc. here. Physicist Niels Bohr once mused that an expert is someone who has made all the mistakes that one can make in a narrow field. That’s not a surprising sentiment coming from a scientist. Science is based on exposing ideas to the rigor of real-world testing. It’s an antidote for wishful thinking, superstition, unjustified enthusiasm and overconfidence. Failure, in this way of thinking, is constructive because it brings you closer to the truth. That said, even in tech circles where you’d think there would be reverence for the scientific method, using controlled randomized testing is severely underutilized. There are exceptions though. Airbnb claims to run some 700 experiments a week, and CapitalOne is known as a pioneer in business experimentation, but more often, companies do way too little real-world testing. One of the main reasons is a very human one
Continue reading "Founders, it’s time to embrace radical experimentation. Here’s why."

Founders, it’s time to embrace radical experimentation. Here’s why.

Editor’s Note: This article first appeared on Inc. here. Physicist Niels Bohr once mused that an expert is someone who has made all the mistakes that one can make in a narrow field. That’s not a surprising sentiment coming from a scientist. Science is based on exposing ideas to the rigor of real-world testing. It’s an antidote for wishful thinking, superstition, unjustified enthusiasm and overconfidence. Failure, in this way of thinking, is constructive because it brings you closer to the truth. That said, even in tech circles where you’d think there would be reverence for the scientific method, using controlled randomized testing is severely underutilized. There are exceptions though. Airbnb claims to run some 700 experiments a week, and CapitalOne is known as a pioneer in business experimentation, but more often, companies do way too little real-world testing. One of the main reasons is a very human one
Continue reading "Founders, it’s time to embrace radical experimentation. Here’s why."

What are the benefits of having your own startup?

Few things are harder than being a CEO, once you have something. It’s so hard, it weighs on you all the time. But the benefits are also unique. My list:
  • Always being engaged. This is a subtle but huge benefit of having your own startup. Yes, it will consume your thoughts. Not entirely at the beginning, but later almost 24×7365. But the flip side is you’ll never be bored when work is involved, and more importantly, you’ll never have the ennui of being in a meaningless job. You will always be engaged. Your mind will always be working, processesing, and innovating.
  • Not having to work for a bad boss (but pick your VCs wisely). Another benefit I didn’t get at first, but not having to work for a bad boss is wonderfully liberating. But remember, your board and VCs are legally your bosses on many levels. So pick wisely, if Continue reading "What are the benefits of having your own startup?"

After closing a few deals myself as a founder, I hired 2 SDRs and closed some more. Should I hire an AE to take over the SDRs and close or a VP of sales?

No, for two reasons: First, you seem good at managing SDRs. This is a skill. Managing entry-level sales professionals can try the patience of the best of us. So you seem to have a super-power here. Second, hiring an AE to take over the SDRs is unlikely to work as well as it does today. Most AEs do not know how to manage other sales professionals. And most AEs are closers and don’t know how to manage the goals for SDRs properly, either. They tend to treat them like their sales administrative assistants. So if you can, I say push on. Hire an AE or two, and another SDR. Get them all working. Then bring on a true VP of Sales. But if you can’t handle it, having the SDRs report to the AE is better than nothing. You can also hire a head of marketing and have the SDRs Continue reading "After closing a few deals myself as a founder, I hired 2 SDRs and closed some more. Should I hire an AE to take over the SDRs and close or a VP of sales?"

When should the CEO step away from sales?

I remember when we closed Groupon as one of our Ten (or so) Largest customers, back in the day. This was probably 2009 or so. They’d brought us on shortly after they’d deployed Salesforce all across the company. My guess is they paid Salesforce $20m a year back then, although I have no idea. We flew out for a Big Hands On, in the bitter middle of a Chicago winter. Anyhow, my VP of Customer Success, VP of Product and I were in one small conference room working with the Sales Operations team. Talking about how to deploy faster, better, bigger. Across the floor, with the 25 year old CEO Andrew Mason … was Marc Benioff and his team. He’d flown out to Chicago in the dead of winter as well, probably all the way from Kona, who knows. He knew he had to be there, too. Anyhow, he was
Continue reading "When should the CEO step away from sales?"

The Effect of Flush Private Markets on Software IPOs

The venture capital markets are flush with capital. We’re approaching the heady days of the dot com era. In that epoch, despite the record volumes of venture dollars, startups went public quickly, in 4-5 years. Today, that timeframe is no longer realistic. In fact, the surfeit of private dollars delay IPOs.

From 2000-2005, the “typical” IPO-bound startup listed on an exchange 5 years after founding. After the Lehman collapse and the crisis of 2008, the IPO closed, and startup age spiked to 16 years median.

Since then, the trend has continued. 2017 and 2018 IPO startups are 11 years old when they do go public, more than double the early aughts.

The corollary to delayed IPOs: great companies age like bacterial colonies. They grow bigger with time. In 2017, the median company generated more than $160M in revenue. In 2018, the median IPO generated more than $340M.

Will this trend Continue reading "The Effect of Flush Private Markets on Software IPOs"

We’re Up to 900 Attendees Now for SaaStr Europa! Zuora, UiPath, Anaplan and More Added as Speakers!

We’re up to ~900 total attendees for our first SaaStr Europa now in Paris!  We’re capped at about 1,000, although we may be able to squeeze a few more in. This will be a 1+1+1 day event, with our main full day on Friday 15 June, a kick off party on 14 June at The Family, and a VC-Founder Morning and Half-Day on June 16 with August Capital, Insight, Accel, Point 9, and other SaaS leaders.  We have extra tickets set aside just for founder/VC day if you want to get funded or learn how to, so sign up here! We have room for 3 more sponsors — click here if interested.  The lead quality should be very high if you sell to CEOs and founders of B2B companies. We’re also continuing to add great final speakers:

How many metrics should a startup CEO share with Vista Equity Partners during the first meeting if their business development team wants to have an exploratory conversation?

Two things to think about when meeting with later stage investors (and Vista is the best of all of them in SaaS):
  • They’ll meet with everyone in the space. So assume even if they don’t share anything with anyone else, they have everyone’s numbers in a database. And in the end, that will lead to some data leakage from VCs and PE firms. All late stage investors have the numbers on everyone they’ve met (and many they haven’t) sitting in their databases.
  • Your numbers are not as confidential — or special — as you think. A Google search, some work on LinkedIn, etc. … you can pretty much guess how much revenue most SaaS companies have. So in general, I say you may as well disclose almost everything except the “secret sauce”.
So if you have zero interest in being acquired, take the meeting to learn. But don’t share much. Continue reading "How many metrics should a startup CEO share with Vista Equity Partners during the first meeting if their business development team wants to have an exploratory conversation?"