What is a typical organizational structure for a SaaS startup with sales reps?

A rough structure from 1–25 sales reps: Early days:
  • CEO acts as VP of Sales.
  • CEO hires 2 reps, in the beginning, each barely pays for themselves, but by months 4–6 they are able to close 3x-5x their total compensation.
  • Once 2+ reps can do 3x-5x their comp, the model gets pretty efficient.
Then:
  • Have to scale from reps 3–8 or so. CEO often struggles to manage so many directly.
  • CEO starts looking for true VP of Sales before $1m, ideally hires one by $1m in ARR.
  • VP of Sales hires next 5–10 reps herself.
After 8–10 reps, you have to add more management:

Did Elon Musk make a good business move in buying trucking companies to ensure Model 3 can be delivered in US by Dec 31 if ordered by Nov 30?

Yes. It will help him make the quarter, and thus keeping the stock price high enough to have a good chance to convert almost $1b in soon-due debt into equity. And it will save customers thousands. View original question on quora The post Did Elon Musk make a good business move in buying trucking companies to ensure Model 3 can be delivered in US by Dec 31 if ordered by Nov 30? appeared first on SaaStr.

It’s Time To Start Getting an Uber/Lyft Rating for Sales Reps. And Paying Them Based On It.

This year we’ve had a string of fairly terrible experiences buying software at little ol’ SaaStr:
  • With one well-known SaaS vendor, an employee e-signed a 2-year contract without permission.  We never deployed the software, and yet the vendor threatened to sue us if we didn’t pay for Year 2.  Even though we never used the product, paid in full for Year 1, and the signor had no signatory authority.
  • Another vendor, the sales rep was so aggressive it took us 14 months to buy.  We would have bought the prior year, but the rep was so insistent on rip-off pricing we gave up.  The rep also shut off the trial repeatedly before we could even put any data in it or use it. It took intervention at the C-level to get the deal done, and it took more than a year.
  • A third vendor, the rep
    Continue reading "It’s Time To Start Getting an Uber/Lyft Rating for Sales Reps. And Paying Them Based On It."

LinkedIn Names SaaStr #1 Voice in Startups & Entrepreneurship!

About 18 months ago, we started to invest more in LinkedIn, both in publishing and our feed.  We went from a handful of followers 2 years ago to almost 160,000 in about that time and have learned a lot.  Mostly, it’s been a great place to meet new folks that don’t engage with us in other media.  It turns out, LinkedIn has its own communities and group that have helped expand the SaaStr ecosystem. Probably just as importantly, LinkedIn’s feed has evolved, at least for SaaS, to become a bit of “Twitter for Businesspeople”.  As it has, it’s become a great outlet for SaaStr insights, long and short. So it was great to read today that SaaStr is now the #1 ranked Voice in Startups & Entrepreneurship on LinkedIn!  Read more here Thank you Linkedin!!!
These are the 10 must-know writers and creators driving Continue reading "LinkedIn Names SaaStr #1 Voice in Startups & Entrepreneurship!"

Once your equity vests in a startup, what are the advantages of staying around?

It’s an interesting and subtle question, especially these days in the Bay Area, where many barely stay 1 year to their cliff, let alone the full 4–5 years to vest. For founders, there are three incentives to stay:
  • If you own say 10% of a company, it really doesn’t matter if you own 11% or 12% or 9%. You are strongly incented to make that equity worth something. If you can add material value to the company, you should stay.
  • Legacy. Once you are gone, it’s not yours anymore.
  • More grants. They often are immaterial, but more grants can come over time.
For VPs and folks that own say 1%+, the incentives are similar, just a bit less so. But as a VP, if you have 1% of a company that can IPO, stay as long as you add value. For strong individual contributors though, it’s tough to stay > Continue reading "Once your equity vests in a startup, what are the advantages of staying around?"

Meet VCs from Bessemer, Sapphire, August, Emergence, Creandum, Bain, Scale, Iconiq and Many More at SaaStr Big Holiday Party THIS Thursday

It’s almost here! The once-a-year SaaStr Huge Holiday Party!  This Thursday November 15th from 3pm-10pm.   We’ll start off with mentoring and networking at 3pm, and amazing sessions on scaling your business and getting funding with Bessemer, Mixmax, Gainsight and Cloudflare at 4pm!  Then the band and drinks and more at 6pm. Come early to meet the top VCs in SaaS!  We’ll have investors from Bessemer, Sapphire, August, Emergence, Creandum, Bain, Scale, Next World, Iconiq, Canaan, Foundationand tons of other leaders. See you then!  Come the Big Holiday for the friends and mentors.  Stay for the amazing learnings lessions.  And they don’t go until you are funded! We have over 720 already registered and are at max capacity!  Grab one of the last tickets here. The post Meet VCs from Bessemer, Sapphire, August, Emergence, Creandum, Bain, Scale, Iconiq and Many More at SaaStr Big Continue reading "Meet VCs from Bessemer, Sapphire, August, Emergence, Creandum, Bain, Scale, Iconiq and Many More at SaaStr Big Holiday Party THIS Thursday"

The Top 3 Critera for Hiring Your First Head of Sales

We’ve talked a lot on SaaStr about hiring that first VP of Sales.

But what if you can’t find the right person, and you’ve spend months looking.  What risks should you take when you’ve realized Ms or Mr Perfect just isn’t going to happen rigbt now?  At some point, you have to take more risk.  I’d boil it down to 3 factors.  If your risky candidate passes all 3 critera, and you haven’t found your “true VP” after 4-5 months (possibly less), I’d go ahead and make the hire:

#1: Have they hired 2+ quota-meeting/exceeding reps before?  This is #1 by far. If they’ve never hired 2+ great reps before, you are taking on a lot of risk making them your director of sales or first “head of sales”. 95%+ of great individual contributor reps have zero experience hiring. Do you want to be the company Continue reading "The Top 3 Critera for Hiring Your First Head of Sales"

What are the most important qualities to look for when hiring a sales manager for SaaS?

The top 3: #1: Have they hired 2+ quota-meeting/exceeding reps before. This is #1 by far. If they’ve never hired 2+ great reps before, you are taking on a lot of risk. 95%+ of great individual contributor reps have zero experience hiring. Do you want to be the company where you learn if they can? Ideally, no. And this is not the same as simply being given a small team to manage. The question is, can they give the names of 2 reps they hired that hit plan? If they can, they’ll know how to hire 2 and then 20 more. #2. Do they have proven success selling at your price point? Being great at $1k deals is not the same at $10k deal or $100k deals. Don’t gloss over the critical differences. #3. Can they train you? See if they can train you to sell your own product. If Continue reading "What are the most important qualities to look for when hiring a sales manager for SaaS?"

What are the most important qualities to look for when hiring a sales manager for SaaS?

The top 3: #1: Have they hired 2+ quota-meeting/exceeding reps before. This is #1 by far. If they’ve never hired 2+ great reps before, you are taking on a lot of risk. 95%+ of great individual contributor reps have zero experience hiring. Do you want to be the company where you learn if they can? Ideally, no. And this is not the same as simply being given a small team to manage. The question is, can they give the names of 2 reps they hired that hit plan? If they can, they’ll know how to hire 2 and then 20 more. #2. Do they have proven success selling at your price point? Being great at $1k deals is not the same at $10k deal or $100k deals. Don’t gloss over the critical differences. #3. Can they train you? See if they can train you to sell your own product. If Continue reading "What are the most important qualities to look for when hiring a sales manager for SaaS?"

What are the 5 main differences about how sales is scaled in Europe vs the US?

Having invested in 22 Europe->U.S. companies, I am not sure the differences are all that huge, absent cases where there are regulatory differences. But in SaaS, there are fewer veterans in Europe than the U.S. This tends to mean more stretch candidates and more risky candidates for Directors and VPs. It also tends to mean worse training for more junior candidates. Surprisingly, turnover can be just as high in Europe among more junior candidates. This can meaningfully drive up the cost of employees vs. U.S., even if salaries are 1/3d to 1/2 of SF Bay Area. Having said that, there are far more veterans in Europe than even 24 months ago. And the U.S. HQ’d SaaS companies all have bigger outposts and European offices than they used to, that you can poach from. View original question on quora The post What are the 5 main Continue reading "What are the 5 main differences about how sales is scaled in Europe vs the US?"