5 Things I Wished I Asked Before Switching from Employee to Founder (Video + Transcript)

Co-Founder and CEO at GoCardless, Hiroki Takeuchi and CEO and Founder at Shipamax, Jenna Brown on their switch from the employee role to the founder role and what they learned along the way. If you’re a current founder, do you agree? What lessons did you learn along the way? Also, if you didn’t join SaaStr Europa, we’re having it again in 2019. Check out ticket prices and keep your eyes on diversity and inclusion ticket updates. Seriously, who doesn’t want a good FREE reason to fly over to Paris? Transcript Hiroki Takeuchi: Thank you all for coming. So I’m Hiroki, I’m one of the co-founders and CEO of a company called GoCardless. What we do is we make it really easy for businesses to accept recurring payments. We’re based in the UK, working with about 35000 businesses, collecting six billion pounds a year, growing about 100% year over year Continue reading "5 Things I Wished I Asked Before Switching from Employee to Founder (Video + Transcript)"

Are consumption-based SaaS business models becoming more prevalent?

They are, and it’s worth thinking about. We actually sort of started there. The first big SaaS success wasn’t Salesforce, it was WebEx before that. Salesforce learned from WebEx, just like many of us learned from Salesforce. And WebEx started off with a consumption-based model. It made sense, because back then, “minutes” had a high variable cost. From 2003:
$0.45 a minute for video, plus $43.20 just for the audio portion of a one-hour meeting with 6 participants! Woah! It took falling network prices (and competitive pressures) for WebEx to gain the confidence to move to semi-consumption and then flat-rate pricing. Salesforce took that and ran with it, and trained an entire generation of buyers to pay “per seat”. This created some degree of certainty in pricing over consumption-based models — with a trade-off that the vendor (Salesforce) actually came out ahead. Salesforce got everyone trained to buy Continue reading "Are consumption-based SaaS business models becoming more prevalent?"

10 Secrets to Putting on a Great Event

So we’ve been putting on events for a while at SaaStr.  It started off by accident — we did a meet-up in 2013 as an experiment, with no content.  And almost 400 folks came!  Then we did a second meet-up in 2014 with a little content, and it went well.  Then 2015 was the first SaaStr Annual, with ~1000 folks on site (more on that here).  Fast foward to today, and we’re planning the 5th SaaStr Annual with over 12,000 attendees.  It will be the largest non-vendor event in the world for business software, by far. But it was an accident, and personally, back in 2013 and 2014, and even 2015, I knew nothing about events, other than as an attendee.  I knew what I liked about Dreamforce, Boxworks, etc. — and what I didn’t.  So the first plan was
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The time to take SEO beyond Google is now

Data from SimilarWeb shows how much SEO traffic some of the biggest names in Tech get relative to their total traffic: it’s more than 30% on average*! WeWork even bought its own SEO tool company, Conductor, and Amazon owns Alexa Internet (not the voice assistant). *The data comes with two limitations: first, SimilarWeb’s data is good but not perfectly accurate. Second, many of the brands I looked at have a high consumer focus. SEO is the most attractive user acquisition channel right after viral growth. It’s scalable, (technically) free, and brings qualified traffic. And yet, the time to take SEO beyond Google is now! Let me explain.

SEO traffic is more important than ever

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Google Mobile Search Traffic
Google News Traffic
Impression Growth
Google Featured Snippet
Average CTR of Featured Snippet
History of Google Ad Shading and Labeling
Buffer
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When should a CEO tell startup employees that the company is going under?

I recently asked this of an interviewee that just went through the shut-down of a top-VC backed start-up. It was a good reminder of two things:
  • everybody knows; and
  • hope springs eternal.
This isn’t to say everyone knows a start-up is literally going under. But they know when things are … off. They’ll know if you might be getting acquired (odd meetings, lots of folks in button-down shirts coming into the office that no one knows who they are, etc.). And they’ll know if you are going through a very high level of financial stress. Look, being too pessimistic rarely helps in start-ups. But the troops can handle it. If there’s a 25%+ chance you are going to pull through, maybe hold back just a bit. Sometimes we are too pessimistic as founders. I think at 25%+ odds — you may well find a way. Instead, just tell Continue reading "When should a CEO tell startup employees that the company is going under?"

How do you stay creative as an entrepreneur?

For me at least, it’s an odd blend of stress + free time. Personally, I need periods of both over each year to be sufficiently creative. In business I think of two types of creativity — tactical and strategic. “Tactical Creativity” is coming up with a great new feature, a new edition, a new price point, a new integration, etc. A great new evolution or enhancement. Personally, I’ve been the most “creative” here in times of stress. When things are easier, and/or with less time pressure, I am not sure you think as much about key incremental improvements. But the stress to close a bigger customer, to beat a competitor, to meet an annual plan … to me seems to bring out Tactical Creativity. “Strategic Creativity” to me is coming up with brand new ways to do things, or brand new ways to evolve what you are already doing. For Continue reading "How do you stay creative as an entrepreneur?"

Why Your Sales Teams Can’t Cross-sell

A CEB Gartner study completely contradicts what has been conventional wisdom in SaaS, that strong customer service is a critical part of a sales team’s ability to not just retain clients but grow and accelerate account revenue. The study titled “Driving Account Growth through Smarter Account Management” found that while better than expected customer service helps retain a sales account, it doesn’t actually impact the degree to which the account grows. Indeed, 88% of account managers that were surveyed believe providing above and beyond service is the surest way to drive growth. The wider research, however, found absolutely no connection between the level of service provided to a customer and the likelihood that the customer will buy additional products or services. In fact, existing sales channels have taken on responsibility for cross-selling newly acquired business products and sales leaders report a 2.3x increase in the size of their sales
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Will salesmen always exist?

There are probably at least 2 core true-isms with customer buying:
  • For a product much more than $299 a month, most prospects want to talk to someone before they buy.
  • For almost any product that requires real business process change, most prospects will want to talk to someone before they buy. And
  • The best people for prospects to talk to are specialists that just handle those conversations and nothing else. We call them “salespeople”.
So for those products: Yes. Done right, salespeople are highly specialized professionals that handle one little piece of the journey — managing and serving the needs of a prospect until it becomes a paying customer. And making sure they take that jump. And yes, there is a bit of friction between those 2 parts of the job.
Freemium and self-service are great and you and I love to buy products that way. The other day,
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Is the first sale the hardest sale to make?

Not usually. The 7th or 10th or so sale is usually the hardest to make. Why? The first few tend to be from highly unscaleable techniques. An ex-boss or friend that runs a company. A crazy cold call that would never work again. A random meeting or happenstance. And if you are crazy driven enough to be a founder, you often somehow find a pilot “customer” or two from your own extended ecosystem. Put differently, in my SaaS ecosystem at least, I’ve met with tons of founders with 2 or 3 customers (and especially, 2 or 3 “beta” customers or unpaid trials) … that then end up really struggling to get to 10. But I’ve almost never met anyone that got to 10 unaffiliated, paying customers that dropped to 0. Once you get to 10, you’ve generally found some way to get more customers. This is the hardest part to Continue reading "Is the first sale the hardest sale to make?"

How the Economics of Professional Services Have Changed in Software

A founder asked me recently if there were any trends in professional services across public SaaS companies. I had examined the gross margins and share of revenue from professional services about 3 years ago. Professional services are consulting fees software companies charge to customers for software configuration, customization and education. What has changed over the past 3 years? First, we have more comprehensive data set, since many more companies have gone public. Second, many newer software companies generate substantial fractions of their revenue from PS. Appian is close to 50%; Pegasystems is at 37%; Horton is at 24%; Mulesoft at 20%. In the past, companies with higher professional services components to their revenue have been valued less highly because PS revenue isn’t recurring and is lower margin than software revenue. In addition, the gross margins from professional services look different than three years ago. The variance is much higher. One
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