The Lead Plateau You May Hit Just As It Gets Good. How to Plan Around It.

Many SaaS companies hit an “organic lead plateau” at several phases:
  • When you get Really Big, at some point, every company in the world is an Opportunity.  Box, Salesforce, etc. really don’t have many new opportunies to hit up.  Instead, they have to work them better.  This can hit you around $50-$80m-$100m ARR or so.
  • When you get Pretty Big, if you don’t drive up deal sizes, expand your customer footprint, etc. … at some point the leads keep coming, but they don’t grow fast enough.  Because you’ve won the market, but haven’t grown it enough.  Most markets you start with on Day 1 aren’t $100m ARR markets.  The best companies expand their footprints to become one.  This is one reason a lot of SaaS companies hit a revenue plateau (and a lead plateau) around $20m ARR or so.
and, waaay earlier than that …

Have Even Half-Decent Connect Rates? Double Down on Outbound Sales Early On

We’re going through a quiet revolution in sales processes now, where a combination of specialization, technology, and a segmentation are making the next generation of SaaS founders far better at figuring out and scaling sales than I or my peers ever were. On of the things the best founders are figuring out earlier than ever is how to invest in both outbound and inbound sales early.  In many ways, this was Rob-smiling-on-phonethe core message of Aaron Ross’ Predictable Revenue.  When I first met Aaron, probably way back in ’07, his main point was simply: Add Outbound.  Best case, it can be epic.  Worst case, it will at least add a layer, a new revenue stream at a least (more on that here).  Worst case, if you have happy customers and any reasonably sized ACV, outbound should at least be a way to squeeze another 10-20% of revenue out per year. Continue reading "Have Even Half-Decent Connect Rates? Double Down on Outbound Sales Early On"

At $50k in MRR, Running Out of Money Is No Longer an Excuse

We’ve talked a lot about SaaStr on the challenges in getting from nothing to that first $1m-$1.5m in ARR, “Initial Traction”.  That is takes longer than you think.  That if you get 10 customers, you can get another 10, 100, and so on. There’s a particular moment in time I want to focus on here on the path to Initial Traction.  It’s when there isn’t enough revenue to make it, to get there.  But there’s too much that you just can’t quit.  You can’t.  Period. I think that’s around $50k MRR.  At this point — Money Is No Longer an Excuse. This doesn’t mean money isn’t an issue.  Money really won’t “not be an issue” usually until about $6-$8m ARR, sometimes later.  By that point, you’ll have enough cash coming in to fund the core team of 50-60 you need to properly run a SaaS company.  As you
Continue reading "At $50k in MRR, Running Out of Money Is No Longer an Excuse"

All Pricing is Relative. How To Make That Work in Your Favor.

You could spend days reading about pricing and pricing strategies in software on the web, but a lot of this content doesn’t really hit one, basic fundamental point — there is no real reason any particular piece of software should cost anything in particular.  Or something.  Or a lot.  Or anywhere in between.  Because it costs next to nothing to deliver. Facebook and Google are free — and both are better software than anything you’ll ever ship, my friends.  Evernote is dirt cheap.  Dropbox is cheap.  Box Enterprise isn’t.  Salesforce is fairly expensive.  Workday is really expensive.  All seven apps basically cost the same amount to build, host, serve, and ship.  Yes, enterprise software costs more to sell and support and, sometimes, to market than consumer software.  But so what?  Who cares?  The cost to ship the bits every time you log-in or hit refresh is about $0.0000232.  Real software has basically zero core
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Continue reading "All Pricing is Relative. How To Make That Work in Your Favor."