What is life like as an entrepreneur and how does one overcome stage fright?

Don’t worry about stage fright. You’ll get over it. I remember the very first time I had to present to a Fancy Board Meeting. I wasn’t a founder yet, but I was told I had to get up in front of a half dozen very famous, very prominent Venture Capitalists. 10 minutes in, I frozen. And walked out. It was terrible. Fast forward to the first time I had to get on stage in front of 2,000+ in a Vegas kick off. I’d done it so many times, I refused to even show up to the prep session. You’ll get better with practice. It’s OK. The secret is repetition. You’ll start to get very good at your pitch, the vision, the value proposition, once you’ve done it a few times. So a few suggestions:

What is a SaaS company cancelation policy on yearly contracts?

The simple answer “of course” in that yearly contracts can’t be cancelled — per se. That’s the whole point of whatever explicit or implicit discount you give for doing a yearly contract (vs. monthly or quarterly). And the language likely will plainly say the contract cannot be cancelled. But … it’s just one contract. So a few qualifiers:
  • If you haven’t received pre-paid cash, it doesn’t matter. Do NOT threaten to send the customer into collections – period. There is no effective way to enforce a customer contract if the customer doesn’t want to pay and doesn’t need the service any longer. Do not create drama. This won’t work, and it will turn someone who just might be a customer again into someone that won’t be a customer again. Any “annual” contract in fact at a practical level is only as long as the pre-paid cash attached to it.
  • They Continue reading "What is a SaaS company cancelation policy on yearly contracts?"

Does a CEO have the right to fire an employee down the chain?

Of course. As you scale, you’ll have more formal processes here and in particular, around who and how to terminate an employee. Get a great HR professional on board as early as you can, maybe even by employee #50. But one suggestion when you are small — have whomever is “best” at firing, fire an employee. What I mean is that firing an employee is very hard. Legally, sometimes it’s not hard, especially in places like California with at will employment. But it’s very hard on most people to fire someone. It wrecks them. So if the CEO is the most experienced in terminations, often she or he should consider handling terminations even for non direct reports in the early days. And folks that have never terminated anyone are often unintentionally very hard on the employee being fired. They ramble, they blame themselves, they dredge up mistakes … and they Continue reading "Does a CEO have the right to fire an employee down the chain?"

How much easier is hiring when you are venture backed?

It’s always easier to hire when you have a brand. Once your company itself has and is itself a brand, it won’t matter. It doesn’t matter for hiring who invested in Slack, Intercom, Zoom, etc. But until you have a brand, leveraging an investor’s brand can help in recruiting. Especially in the early days. Like brands in general, a strong brand in your investor is a signal to “customers” (including prospective hires) of quality. There are so, so, so many startups. How does a potential hire know which one to pick? They look for a product and CEO they believe in. And they look for whatever early signals of quality they can find. Look at how powerful YCombinator is at attracting capital and talent to startups at an extremely early stage … that’s brand as a signal for potential quality. View original question on quora The post How much easier Continue reading "How much easier is hiring when you are venture backed?"

Squeezing Out That Last 10%-20% Growth

Once you have something in SaaS, somewhere on the path from $1m to $10m where you’re either on your way to Initial Scale or getting past it, you’ll often end up with a subtle choice: Should you go for the extra 10%-20% of growth a year? After a few years, a few management team mistakes, and a few cycles, finally it will be repeatable.  Net negative churn and renewals will kick in.  Your mini-brand will start drive in a regular stream of leads (more on that here).  You’ll be a known vendor, have a decent sales team, a proven product, a steady stream of leads.  You’ll more or less know how you’ll do next quarter and maybe even this year, within a wide variance at least. You’ll finally, sort of, have some of it dialed in and figured out.  Folks will start to get Continue reading "Squeezing Out That Last 10%-20% Growth"

SaaStr Podcast #175: Jason Lemkin, Founder @ SaaStr on How To Approach Long Sales Cycles

Welcome to Episode 175! Jason Lemkin is the Founder @ SaaStr, the world’s largest SaaS event with over 20,000 of the world’s best SaaS founders and investors attending every year. Jason also invests from SaaStr’s debut $70m fund and has made prior investments in the likes of Algolia, TalkDesk, MixMax, Rainforest QA, and many more incredible companies. In Today’s Episode You Will Learn:
  • How does Jason think founders should approach long sales cycles in the early days? Why does Jason believe that ultimately long sales cycles do not matter? What can the truly great VPs do to impact those long sales cycles?
  • How does Jason think founders can tackle lead optimization with their team? How can founders determine which leads to send to which AEs? What will the effect of this tailored lead distribution be?

  • When is the right time for the founder to begin to take Continue reading "SaaStr Podcast #175: Jason Lemkin, Founder @ SaaStr on How To Approach Long Sales Cycles"

Why do some startups choose not to sell to other companies, and instead they go for an IPO?

I was just with a founder who owns 40% of his startup. He just turned down an offer for $500,000,000 to sell his startup to a public company. He is 33. I do not believe he has any life savings. I do not believe his parents have any savings, and he did not come from any money. He has never sold a share. 40% of $500,000,000 is just about $200,000,000. Turning that down is nuts. Why? Because he must think those shares are worth at least $1b (5x) to risk-adjust. And maybe, he’s just not done. Also — he is a much better CEO than I was. I was a good founder, but not nearly as good as he is. Who do you want to be? What do you want to do? What future do you see? We’re all different here. Selling often is logical, the highest return on time, Continue reading "Why do some startups choose not to sell to other companies, and instead they go for an IPO?"

Why do some startups choose not to sell to other companies, and instead they go for an IPO?

I was just with a founder who owns 40% of his startup. He just turned down an offer for $500,000,000 to sell his startup to a public company. He is 33. I do not believe he has any life savings. I do not believe his parents have any savings, and he did not come from any money. He has never sold a share. 40% of $500,000,000 is just about $200,000,000. Turning that down is nuts. Why? Because he must think those shares are worth at least $1b (5x) to risk-adjust. And maybe, he’s just not done. Also — he is a much better CEO than I was. I was a good founder, but not nearly as good as he is. Who do you want to be? What do you want to do? What future do you see? We’re all different here. Selling often is logical, the highest return on time, Continue reading "Why do some startups choose not to sell to other companies, and instead they go for an IPO?"

At a $20B valuation, is WeWork overvalued?

Well, goodness since this question was asked WeWork is now worth $20 billion! + WeWork’s $20 Billion Office Party: The Crazy Bet That Could Change How The World Does Business Does this even make sense? WeWork is losing money, its margins are murky and it is crafting brand new financial metrics like “community adjusted EBITDA” we’ve never heard of! WeWork’s staggering growth has run up an $18 billion rent bill Still … maybe it does make sense. First, there’s a $3b public company comp in Regus/IWG. Regus is a slow-growing, but well established player in the market. And WeWork is growing much, much faster. So you can clearly see your way to a much higher valuation than $3b: Secondly, the market itself is very large ($200b+) and is clearly changing. Office space is a huge market and Regus/IWC only carved out a very small space of it. WeWork by contrast
Continue reading "At a $20B valuation, is WeWork overvalued?"

At a $20B valuation, is WeWork overvalued?

Well, goodness since this question was asked WeWork is now worth $20 billion! + WeWork’s $20 Billion Office Party: The Crazy Bet That Could Change How The World Does Business Does this even make sense? WeWork is losing money, its margins are murky and it is crafting brand new financial metrics like “community adjusted EBITDA” we’ve never heard of! WeWork’s staggering growth has run up an $18 billion rent bill Still … maybe it does make sense. First, there’s a $3b public company comp in Regus/IWG. Regus is a slow-growing, but well established player in the market. And WeWork is growing much, much faster. So you can clearly see your way to a much higher valuation than $3b: Secondly, the market itself is very large ($200b+) and is clearly changing. Office space is a huge market and Regus/IWC only carved out a very small space of it. WeWork by contrast
Continue reading "At a $20B valuation, is WeWork overvalued?"