1. Power laws are real. $1m MRR is when it gets great. No, it doesn’t get any easier then, per se. It never gets truly easier. But you won’t fail after $10m ARR or so if your customers love you. It is different. And you can build something that will trust last once you get there.
2. Just go find the VP you need. You can miss a quarter if need be. No, you can’t miss every quarter. But you aren’t public. You can miss a quarter intentionally once every 6-8 quarters or so if need be to get something bigger done. Focus as CEO on what will move the needle. Go find the VP you really need. I got the VPs of Sales, Product and Marketing I needed. But I should have taken a pause and just found our true VP of Engineering.
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"
One privilege I get as part of mentoring and investing in a few dozen startups is a chance to work with first-time managers. The reality is, most start-ups are better off with a Stretch VP than a Never Did It But Has a Great LinkedIn VP. More on that here.
And as part of that, I see a lot of ambitious, driven first-time managers screw it up I thought I’d share 7 actionable tips to help you if you’re getting your first big shot now …
Make a firm rule: No Excuses. This is probably the rookie error most first-time managers make, and many second and third-timers as well. Excuses actually work fairly well in Big Companies, because it’s often not exactly clear who is responsible for many things in large organizations. But the #1 reason a VP is hired in a start-up is Continue reading "7 Simple Tips to Being a (Much) Better First Time Manager"
2018 is the Best of Times for venture capital. 200+ new seed funds, and a record number of unicorns and decacorns. And as part of this, more and more big corporations are adding and expanding their venture arms.
For the most part, this is a great thing. More options are almost always better for founders.
Let me share a quick list of Pros, Cons, and Not Big Deals.
Usually won’t carry the company or write many “second checks”. This is the biggest issue. Traditional VCs usually reserve another 1x-2x of their first check for later investments. Corporate VCs don’t. They also generally don’t want to “carry” a company and write another check if no one else will. VCs don’t like this either, but they’ll often do it.
Aren’t usually great at bringing in next round investors. Top seed investors are good at brining in Series A
Many of us founders would secretly like to sit in front of the iMac half the day, and spend the rest of the day planning on making the product even better. Versus getting on jets, getting on TV, going to events, doing customer steak dinners, etc.
Yes you can win in many cases by remaining “hidden” as CEO — but the more enterprise your customer base is, the more important getting out there and being out there is.
Let’s contrast Box and Dropbox. Both grew into huge wins and highly successful public companies. But Box became 95%+ enterprise by revenue over time, and Dropbox is still 95% SMB and smaller and consumer.
But a few thoughts on “the hardest part” for the first few stages:
From $1-$100k in ARR, the hardest part is often how little revenue you get from each customer. Most SaaS products are inexpensive. You work so, so hard to close 100 customers … at $10/mo/customer … and that’s only $1,000 a month! Not enough to pay even a single salary. So much work, so little revenue.
From $100k-$1m in ARR, the hardest part is how slow it is. It seems to take too long to get anywhere. Yes, you now know how to make customers successful and happy now. But it is so slow. You have 2,000 customers now. But at $10/mo, that’s still just $20,000 a month. Enough to pay some salaries and AWS bills, but it’s not that much. And each month, you barely add enough new revenue to
In SaaS, usually one of 5 things enable a new vendor to break-out in a crowded space:
10x better at One Important Thing. In the early days, you will be buggy and feature-poor. Maybe even in the not-so-early days But if you are 10x better at (x) One Important Thing that (y) customers value and will pay for, that’s enough. Many founders get this wrong however, and build a key feature that is indeed 10x better — but not one important enough to pick a raw new vendor to get. It’s only a subset of critical functionality that customers will pay to have implemented 10x better than an existing, trusted vendor. Usually, the part that is close to the money they make, manage, process, or collect. A little more here.
Dramatically Cheaper. This one’s tough to play. Because businesses trust and value brands they can rely on. But often,
It took a little while, but SaaStr finally crossed 40,000,000 views on Quora:
It’s been a fun journey sharing and learning from 2,684 answers on Quora, and being named a “Top Writer” for 6 years in a row:
Some of the top posts from the past year, with hyperlinks to most of them:
A little while back at the 2018 SaaStr Annual, Tomasz Tunguz and our own Jason Lemkin kicked off Day 3 with a fun look at 5 of the Top Trends in SaaS”
Click on the video below to check it out — it’s great. A transcript is also below.
And March/this month is the last chance to get Early Bird tickets for both the 2019 SaaStr Annual and the first SaaStr Europa on 15 June in Paris. GET ‘EM NOW!
— Team SaaStr
Jason Lemkin: Anyone here read Tomasz’ blog posts? Has anyone ever read his stuff? Raise your hand if you’ve ever read anything he’s ever read. All right. Everyone’s up. Okay. Good. Well thanks for coming back. This is a pretty good crowd isn’t it?
Tomasz: Oh yeah, no. Thrilled to be here. Thanks for inviting me.
Here’s my list of the best golden advice I was given as a first-time — and second-time CEO:
Manage People — In General, and Earlier. The earlier in your career you can learn how to manage people, the faster you can excel in learning to scale. Managing people isn’t always fun. But embrace it if you want to be a CEO, a founder, and/or be a part of something bigger.
Listen to “Audibles” and Act on Them. Your best bosses, VPs, mentors and others will give you “audibles” — quick bits of micro-advice duringpitches, customer meetings, interviews, etc. While you are in the process of working They’ll see where you could improve in real-time. Take this real-time feedback and leverage it and act on it immediately. If someone else great is in the room with you, these audibles can make the difference between a positive outcome and a Continue reading "The 7 Best Pieces of Business Advice I Was Given"