I remember the first customer I lost due to not showing up in person. They were a Fortune 50 customer. We did a CSAT survey, and every user loved us. The implementation was flawless. There were zero issues. And … we lost them at renewal.
Our buyer was kind enough to call us and explain why. “Well, your competitor was in the office last week, and just convinced us that …”
Ugh. We’d done everything “right” … except … We’d never even visited.
I hear this story now time and time again. Here are a few from a recent LinkedIn post I did on the matter:
You can see from both my subsequent experience, and all the comments on the post in this thread, that I was hardly alone.
You already know this. If you show up, you close faster
It isn’t as radical change as it seems, but direct listings will become much more common.
Now we have 2 big successes (Spotify + Slack), and 0 failures here.
In the Age of the Unicorn, more and more start-ups will raise IPO levels of capital before an IPO. This is a new phenomenon, relatively speaking.
Assuming their burn rate is also low, and the brand is strong enough to jump start liquidity without an IPO … why sell any primary shares and take the dilution from a traditional IPO?
There’s no reason anymore, in many cases.
AMAZING execution today on the Slack direct listing. $WORK closed within 1% of the initial open pricing (compared to 50-100% recent mis-pricings with standard IPO). Congrats to Slack, Morgan Stanley (advisor to DMM), and Citadel (DMM). Well done.
Now that we’re done with SaaStr Europa 2019 — which was truly amazing — we’ve added a new, special event to bridge the gap between Europa and 2020 Annual.
It’ll be 2+ stages and 100+ Braindates that just give you the playbook.
Nothing more, nothing less.
How to Get More Leads.
How to Build a World-Class Sales Team.
How to Make Customer Success Work at Scale.
How to Scale a Demand Gen Team.
How to Go Upmarket, Faster.
How to Go More Viral.
How to Do ABM for Real.
How to Spend to Grow — The Right Way.
We’ll have CROs and CMOs and CSOs from Brex, Flexport, Talkdesk, PatientPop, Trip Actions, Slack and dozens of other leaders in SaaS. Teaching you how really to do it. And doing mentorship sessions as well.
No firesides. No fluff. Just the playbook
Just assume your competitor is cold calling all your existing customers. They should be. Yes, sometimes the yield here can be low if your customers are very happy. But it is worth a shot if you have the resources and are in a competitive space.
Second, assume your competitor has a database of when your contracts are up for renewals, and does campaigns around those dates. They should.
Third, assume your competitor reaches out aggressively to your customers if you have downtime, a security issue, etc. Some will use that as a reason to switch.
Fourth, assume your competitor may offer big discounts for switching — bigger ones that they’d usually offer. And even buy-out deals. They may be willing to subsidize the cost of switching now, even if they are on annual+ contracts.
Assume it all. When you are big enough, you may (or may not) want to do Continue reading "How do I find out how if my competitor is cold calling prospects?"
I’ve watched many bridge rounds over time from a far, and took $500k in bridge capital at EchoSign myself when our seed round didn’t end up being quite enough to get us to the Series A.
But I haven’t really seen bridge rounds from the other side, as an investor, until recently. That’s mainly because over the past 2 years I’ve invested in more early-ish seed companies (vs later seed companies), that often end up needing a second seed, or bridge. And once you start seeing them in action, you see all the many, many mistakes founders make here.
What is a “bridge financing”? Simply put, it’s another round of venture financing from the same investors as the last round. VCs do not like to do this. VCs like to see each round priced 2x-3x the last round, or higher. And generally, they prefer Continue reading "How Bridge Rounds Work in Venture Capital: Messy, Full of Drama, and Not Without High Risk"
The key to truly motivate a sales team, to excellence, is two-fold:
They need to see the top reps making real money. Like, really good money. That will show everyone it is possible. That is can be done. And that maybe it isn’t even that hard if you hustle, listen and learn. Not everyone needs to make huge bucks. But the top 10%-15% do.
A great VP of Sales / boss. Sales is a risky career. You can get fired at any time, and there is so much turnover. A great boss backs up her team. Promotes her top performers. Backfills those with promise, but gaps. Etc.
In 2019, the average enterprise buyers has deployed over 100+ SaaS apps, per Okta numbers. And the average SMB buyer has already purchased 50+ apps. So your prospects and customers are veterans.
The general pyschology thus is different than it used to be in SaaS.
The ideal flow is:
Leads initially do discovery on their own. They look at your website. They do a Google search. They talk to their peers. They check out your blog.
Then, sales’ job, the account executive, is to help them understand why an initial decision they’ve already made— to maybe buy your product — is the right one.
Salespeople in 2019 that employ high pressure, rip-off tactics. That mislead prospects. That claim the product does things it doesn’t. That trick customers into contracts that are bad for them.
That playbook doesn’t work so
Debt can be good for SaaS. The key is — just not too much of it.
For convertible debt, a little can help you make that extra hire, extend the runway, go more upmarket.
But when it comes time to raise a Series A, assume that anything much more than 20% of a debt:equity ratio for the next round will spook Series A investors.
In other words, assume for each $1 in SAFEs and convertible debt you raise, you’ll probably need to raise 4x than in the next round.
So if you raise say $1m-$2m in debt+SAFEs, you are probably OK. Once start-ups these days raise $4m-$6m in SAFEs though, you’re gunning already for a $15m-$20m+ Series A.
Put differently: it’s really, really hard to raise $5m in SAFEs and then raise a “normal” round of $5m in equity (a 1:1 ratio).Like, close to impossible. Investors will just see Continue reading "Why is a “large overhang of convertible debt resulting from numerous convertible note rounds” bad for startups before a series A round?"