Our Startup’s Biggest Hiring Fails From $0 to $250K in Monthly Revenue

I’m proud of the team we’ve built, but it hasn’t been easy. Here are the mistakes that hurt the most. If you visit any business’ About Us page, you’ll almost always find a header that looks something like this: “We [solve a particular problem] for [a particular customer].” The constant, among all businesses, is the very first word: “We.” As cliche as it sounds, the foundation of every successful business is its people, and without great people, it’s going to be very, very hard for you to succeed. One of the most frequent pieces of advice I get from entrepreneurs who are working on their second or third success story is that after the earliest stages of growth, hiring should be a CEO’s number one focus. If they can’t do that well, then nothing else matters. Even the best ideas collapse on the shoulders of people who can’t
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Benchmarking Exceptional Series A SaaS Companies

At SaaStr 2016 and SaaS Office Hours in New York, I shared an analysis of the fastest growing SaaS companies over the last 3 years. In particular, I benchmarked the revenue, growth rates and round size characteristics of these businesses at their Series A. I’ve embedded the slides here. These are the key bullet points from the deck about exceptional SaaS companies. Note: there are two key statistical biases in this analysis: survivorship bias and sample size bias. This analysis considers only a small fraction of the total number of SaaS companies. These businesses grow from 10k to 93k in MRR in their first year of commercialization and then to 413k of ending MRR in their second. On average, they raise $9.5M in Series A, though there is a range from smaller rounds of $3M to rounds of greater Continue reading "Benchmarking Exceptional Series A SaaS Companies"

5 Ways to Expand Your Opportunity At Work

not to be totally heartless, sympathizing with anyone possibly offended by the last post, we know it’s hard to embrace change; especially when senior management isn’t on your side.  here’s another “From Impossible” excerpt to help you carve out your path whatever road you’re on.

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If You’re Churning More Than 10% of Your Salespeople, They Aren’t the Problem

High Church Rate of SalespeopleFrom Chapter 13 of Aaron Ross and Jason Lemkin’s new book, From Impossible to Inevitable. Sales culture is different compared to pretty much every other function in that it expects most people to fail or succeed almost totally on their own. Companies assume “We’ll hire 10 salespeople to sink-or-swim and a quarter to half won’t make it.” CSO Insights’ studies show average sales team’s annual turnover of around 25 percent (it varies by a few points year to year), with half quitting and half fired. That means out of 100 salespeople, 25 are lost every year. So you need to hire (and train, and ramp, and transition pipeline or customer accounts for ) an extra 25 salespeople per year just to tread water. But—what the hell? Would you hire 10 HR people and then expect to fire three to five? Managers? Supply chain people?

Beating the Odds
From Impossible to Inevitable by Aaron Ross and Jason Lemkin
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Where’s Our Facebook and WhatsApp?

Right now, a few doubts have creeped into the SaaS investor community.  Multiples have plummeted since February.  And for confusing reasons.  Because … the best SaaS companies are growing faster than ever.  And even the ones that haven’t missed a beat, like Salesforce, Atlassian, Marketo, Hubspot, etc. still have gotten hit: Screen Shot 2016-02-22 at 2.52.57 PM None of that worries me, though.  Multiples swing up and down.  I didn’t totally get the crazy ARR multiples on ’14 and into 1H’15, but it’s all good. One thing I do worry a smidge about though, is … where is our Facebook?  Where is our $100b, $200b, $500b+ SaaS public company? And where’s our WhatsApp?  Our $20b+ acquisition? Take a look at the chart below from Neeraj Agrawal, General Partner at Battery Ventures: Screen Shot 2016-02-22 at 2.46.12 PM Huge, big, epic congrats to Resmed on an $800,000,000 acquisition.  That’s a lot of Benjamins.  And huge congrats to Neeraj and the Battery team
Screen Shot 2016-02-22 at 2.49.53 PM
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What I Learned at SaaStr from Leading Enterprise Software Experts

I had the pleasure of attending the SaaStr Annual 2016 Conference in San Francisco earlier this month and wanted to share some of the insights I gathered from that event with you here. The findings below are arranged by functional area with attribution. I tried to compress the content as much as possible, but there was A TON of great information at the conference so would highly recommend spending the time to read through.

Sales & Marketing

Segmentation by type of sale (new business, upsell, cross-sell, expansion), type of GTM (field sales, inside sales, or internet sales), and lead source (website, event, email) is key to sales and marketing efficiency and scale. The best sales and marketing leaders understand and communicate the different funnels they’re measuring to their employees and proactively experiment with new ways to improve those funnels. Top-tier investors put pressure on sales management to make sure they
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Is it better to join a venture capital firm as an Associate when the market is hot or cold?

< div> I think Hot.  Everything Patrick Mathieson says is right.  But … The simple reason is you are going to have a really hard time sourcing any deals at all in a cold market. If you want to build up your track record, the best way is to source as many great companies as you can.  You won’t make any money as an associate, you’ll get limited kudos.  But you will build up your track record.  And your track record as an associate will only be vaguely correlated to the fund’s.  You get some credit for your winners, no matter what the % ownership or anything.  But zero credit for the fund itself. In ’14 and ’15 every firm wanted to let a non-GP do a small deal or two, even if they didn’t 100% make sense.  Gotta learn. Not Continue reading "Is it better to join a venture capital firm as an Associate when the market is hot or cold?"

One on Ones: The Best Way to Give a Damn

Talent Management has recently produced an offspring of software solutions around employee engagement. One solution might offer badges for superior performance, another automatically gifts a card to an employee’s favorite coffee shop via email. “Engaging” employees has little concern around automating rewards and badges. At its truest core, it’s about relationships: a real relationship between a manager and his/her direct reports. Trust, respect, fear, vulnerability, and faith — just to name a few — mash together and create a bond sacred to the individual participants. Spending more time with office colleagues than our family should place significant priority on the quality of these relationships. Yet, too many managers forget their first job: let their teammates know “I give a damn.” “I care about your development.” “I’m focused on your path to success.” “Your future is something I constantly think about.” “I give a damn about you!”
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6 Things Every Startup CEO Should Know About the Sales Process

I’ve been working with startups and CEOs for the better part of 5 years now. Some of the CEOs I work with have strong backgrounds in sales, but recently I’m seeing more and more startup CEOs and founders coming from the technical side of the house. Through no fault of their own, these technical founders and CEOs often don’t have a good understanding of the sales world and how certain sales processes work. So, with this in mind I’ve put together a few tips for startup CEOs and founders to help get their arms around the sales process and pipeline.

1. Customers are buying the CEO as much as the product or service.

A big point of frustration for non-sales CEOs is around the length of the sales cycle. Often times, when CEOs get involved with a prospect call, they’re able to quickly answer that prospect’s questions and move them through the pipeline. But, that’s not
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