How should I calculate the “cost of acquisition” of a SaaS product that is still an idea and is not regenerating any revenue yet?

You can sort of half test it via paid spend. This is a good exercise to do. Budget $500 to spend on Adwords and Facebook marketing. Do multiple campaigns and drive them to a simple landing page. And see if you can even afford the traffic at all. Then come up with a theoretical conversion model to paid customers as a % of the traffic you drive to this landing page. You’ll likely find Adwords is way too expensive, and Facebook too difficult to convert. If not, though, then you’re on to something. If so, paid acquisition may not work well for you in the early days. View original question on quora The post How should I calculate the “cost of acquisition” of a SaaS product that is still an idea and is not regenerating any revenue yet? appeared first on SaaStr.

Why are all hugely successful entrepreneurs jerks as a person?

They aren’t. At least not in B2B / SaaS. Although sometimes, they were a little bit arrogant or jerky on the way to being successful. I’ve interviewed and talked backstage with the CEOs and founders of Atlassian, Slack, Box, Twilio, Intercom, Blackline, Coupa, Sendgrid, Veeva, Trello, New Relic, Mulesoft, Appdynamics, Domo, Qualtrics, Asana, Zendesk, Zuora, Zoom and scores of others that have IPO’d and/or gone on to huge successes. None are jerks. At least — not by this point. By the time they hit say $100m in ARR they are all humble, thoughtful, appreciative, gracious, and in their own different ways, charming. Quietly confident by this point, yes — they can see the future pretty well by $100m in ARR or more — and often protective of their time, but that’s about as far as it goes on the arrogant scale. In fact, they all make you feel special Continue reading "Why are all hugely successful entrepreneurs jerks as a person?"

How does it feel to be a CEO?

It’s not what you’d think. It’s not:
  • A power trip. Well, it can be a power trip in some sense I guess, but not if you are doing it right. Oh, you are CEO of a 4 person startup? The glory! 🙂
  • More fun that a non-CEO role. It’s much, much more stressful however. The buck truly stops with you.
  • More rewarding than working for a great boss. Not necessarily. Working for a great boss can be just as rewarding, without quit as much stress.
  • More lucrative that other options. Being a COO or other #2 can, risk-adjusted, be a better deal. You still get a lot of equity and don’t have to take the risk of getting something off the ground.
But the benefits are unique and include:

What is the biggest challenge salespeople are facing when it comes to closing deals (last stage of the sales funnel)?

Urgency. Urgency does not really exist in 95%+ of deals. There really is no burning need for most customers to buy today, this month, or often even, this quarter. The world will not end if they wait a month or two to buy your software. It won’t even end if they like your software, but decide even to wait next year to decide to buy it. Mediocre sales reps have tons of “great conversations” and thus generate tons of “pipeline” … but very little of it closes. Be wary of this when judging reps. Great reps create and indeed manufacture urgency. Be it with discounts, with favors, with creating the best pilots in the history of the company, etc. And because they create urgency, they close far, far more deals with it than reps even with far more notional pipeline. More here: Why The Greatest Sales Teams Just Kill It Continue reading "What is the biggest challenge salespeople are facing when it comes to closing deals (last stage of the sales funnel)?"

Is Quora at risk of another question and answer site emerging? I have been here a few years and Quora seems to have slowly but continuously gotten worse as they attempt to generate more revenue.

I don’t think so. Not until the paradigm changes. Here’s why. Quora has a unique combination of:
  • The largest on-point audience, and
  • By far — by far — the best feed / algorithm / discovery software.
Reddit has a larger audience, as do other properties. But Quora probably has the largest audience for its “segment” (whatever that is) of knowledge seekers. And Reddit and maybe others have not and probably cannot build the dynamic feed Quora does. This is a very, very hard engineering program. (It is not a coincidence the founder of Quora is from Facebook). The key to Quora at scale is millions of individuals getting pushed no-2-feeds-are-alike, high quality feeds that surface highly interesting and relevant information to them. Look at your LinkedIn feed? It’s OK — but boring. The quality isn’t a 1/10th of Quora’s. Other Q&A sites? Not as well tailored. Forums like Stack Continue reading "Is Quora at risk of another question and answer site emerging? I have been here a few years and Quora seems to have slowly but continuously gotten worse as they attempt to generate more revenue."

For how long should a CEO continue being the head of products?

Roughly for me, for as long as it’s about a 10-hour a week job. Or often, maybe only up to $3m-$5m in ARR or so. In SaaS at least, founders make two mistakes:
  • First, try to hire a full-time “head of product” once the product gets complex. Once your product has 50–100 workflows, dozens of use cases, 100s or 1000s of customers, etc. … it’s just too much to hack and juggle informally. My rough rule of thumb is somewhere between $3m and $5m in ARR in SaaS most products just get too complicated to hack product anymore. You’ll ship better prioritized features, with happier customers, with better trade-offs, with a full-time head of product. CEOs that hang on too long here start shipping features and products that are no longer force-ranked the way they should be. And the key is to hire a true head of product. Someone that Continue reading "For how long should a CEO continue being the head of products?"

For how long should a CEO continue being the head of products?

Roughly for me, for as long as it’s about a 10-hour a week job. Or often, maybe only up to $3m-$5m in ARR or so. In SaaS at least, founders make two mistakes:
  • First, try to hire a full-time “head of product” once the product gets complex. Once your product has 50–100 workflows, dozens of use cases, 100s or 1000s of customers, etc. … it’s just too much to hack and juggle informally. My rough rule of thumb is somewhere between $3m and $5m in ARR in SaaS most products just get too complicated to hack product anymore. You’ll ship better prioritized features, with happier customers, with better trade-offs, with a full-time head of product. CEOs that hang on too long here start shipping features and products that are no longer force-ranked the way they should be. And the key is to hire a true head of product. Someone that Continue reading "For how long should a CEO continue being the head of products?"

A partner in a top tier VC who funded our competitor is interested to invest on us and even gave us couple of good intro to potential customers. He claims they have separate funds in different locations, so it’s not a conflict. Should I trust him?

Maybe. A few thoughts:

What did it feel like to exit on your first business?

Much better the first time than the second. The first time we sold, I had far exceeded any expectations I had as a founder. First, I barely believed I could be a founder at all. And second, with zero life savings and no “wins” to my name, selling for $50m in 12 months seemed amazing. Indeed it was. I didn’t work for a year, I made my better half breakfast every day, I was in great shape. The second time though, I knew. I knew how far the team and I could go. Once you know you can do it, it’s not quite as special. It becomes a business decision, and one with mixed emotions. View original question on quora The post What did it feel like to exit on your first business? appeared first on SaaStr.

What do you think of Arlan Hamilton’s investment thesis that “because Black women have had to make do with less for centuries, giving them early stage VC on par with their white male counterparts has the potential to lead to outsized returns?”

I think it’s a very good thesis. The markets are flooded with 200–500+ new seed funds, and it’s hard enough to make money in venture in general. Even doubling your money in venture is tough. One good, if nonobvious strategy, is to invest in folks that aren’t “insiders”. Because insiders are flooded with access to capital today. Overwhelmed with it. And among other things, this likely will depress returns. I’ve done different versions of this “outsider” investment thesis myself, both for a while with international founders who had strong early traction but lacked Bay Area connections, and with a few other groups as well. YCombinator did this in its early days, in a sense too, empowering college students from MIT and others who might never have thought they could really do a start-up. Those early YC investments (Dropbox, Airbnb, Twitch, Reddit, etc) have done rather well. She should get access Continue reading "What do you think of Arlan Hamilton’s investment thesis that “because Black women have had to make do with less for centuries, giving them early stage VC on par with their white male counterparts has the potential to lead to outsized returns?”"