Tech Entrepreneur’s Survival Guide –The Best of SaaStr

Jason M. Lemkin

SaaStr; Managing Director, Storm Ventures

@jasonlk

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Jason M. LemkinSaaStr Founder Community – 1m Views/Mo

Managing Director, Storm Ventures

Founder/CEO – EchoSign/Adobe

MobileIron, Marketo, EchoSign, GuideSpark, Metacloud, Sandforce, etc.

SaaStr

• Web’s Largest Community for SaaS Founders and Execs

• Genesis: learnings (and mistakes) going from $0 to $100m+ at EchoSign/Adobe Web Services

• 1m views a month; 5m on Quora

• Cool, founder-specific events & 1,250 answers, videos and posts

• Goal: Help you get from 0 to $100m Faster. With Fewer Mistakes.

From the Impossible to the Inevitable

•Getting from $0 - $1m: IMPOSSIBLE.

•Getting from $1 - $10m: UNLIKELY.

•Getting from $10m - $100m: INEVITABLE.

SaaS CompoundsVery Hard to Start. Much Easier to Maintain and Grow … Up to An Organic Point.

$0 - $1m: Impossible.No One Needs Another Web Service. Not Really.

$0 - $1m: Impossible.No One Needs Another Web Service. Not Really.

• Not That Fun

• Not That Fun

It’s Not Always So Linear

$1m - $10m: Toughest SlogToo Much to Do. Too Few Resources.

$1m - $10m: Toughest Slog (Usually)Too Much to Do. Too Few Resources.

If You Have Leads – A Great Hire Can Be Just EpicCan almost instantly double sales, marketing, product, engineering, etc.

If You Have Leads – A Great Hire Can Be Just EpicSo Spend 20% of Your Time Recruiting. Period. You Just Gotta Find a Way.

– From Initial Traction on (say $1m ARR until $10m ARR) — this is the single most important improvement you can make to your SaaS company:

• To recruit every single day. • Or 20% of your time. • The equivalent of one full day a week.

– You have to find a way to get out of the weeds. Stop taking out the trash. Stop doing Medium and Low ROI things. Hire great people to do them.

Flip Side – Get Rid of a Bad VPS Especially ASAP

– For a VPS -- You Should Know Subjectively In Just a Few Months – Just 50% of The Way Through Your Average Sales Cycle

– Numbers Should Increase in 1 Sales Cycle – with Keen Focus on Revenue Per Lead

– First Few Hires Should be Clear Upgrades – and made quickly + seemingly effortlessly

Ways to Go From $1m to $10m ARR Faster

– Tilt, at least a smidge, Upmarket

– Overinvest in Customer Success (not just Sales)

– Focus just on doing better. Improving churn (no matter what absolute value). Improving Revenue Per Lead. Improving MQLs. Don’t try to quintiple overnight. Just try to improve everything that matters at least 20%. Will be enough (SaaS compounds).

– To do #3, need measure everything. No more soft goals. In any function.

– Recruiting, Recruiting, Recruiting

The Cavalry Comes @ ~10m:Brand. Redundancy. Robustness.

Time Can Become Your Enemy5 Years is the Burn-Out Zone – Even if You’re Doing Well.

• Everyone – everyone – just gets burnt around Year 5

• After $10m, if you are growing >80-100% … time then becomes your friend

• Must … Fight … Through It

• Bring on a COO, a Great VP, a One Great Exec Who Can Truly Help Shoulder the Load

The Cavalry Comes @ ~10m:Brand. Redundancy. Robustness.

• Installed Base + Customer Success = Huge $ Driver

• Second Order Revenue Really Kicks In (Takes 2+ Years)

• Partners Can Begin to Move The Needle

The Cavalry Comes @ ~10m:Second Order Revenue Begins to Really Scale***

*** So Invest in it – Heavily!!!!

$20-$30m or So: Self-Replication With Brand, Second-Order Revenue + Scale = Feed the Machine

$25m-$30m or So: Can’t Be Killed

• Market Leadership. +• Winning CEO &• Mgmt Team. +• Commitment to Innovation.• = Guaranteed Success.

• Don’t Screw it Up!

Once You Have Something: Take Nothing for Granted

• Because It’s Year 3 When You Lose Your Customers!

• Invest. Invest. Invest.

• In What You Have … Not Just Where You Want to Be.

,

The Inevitable: From Mini-Brand to BrandBrands are Highly Defensible. Proxy for Who to Trust.

It Doesn’t Get Easier Per Se. Just Better.And You Really Will Get Better. Much Better.

• No Matter How Bad You Are at X, or Inexperienced at Y … You Will Learn in SaaS.

• Everyone Will.

• You Will Get Even Better. Guaranteed.

• You Will Become a Great SaaS CEO.

When It’s Good – It’s Really Good

– Great SaaS Teams Have Low Turnover – They Want to Stay Together

– Great SaaS Teams Feed on Themselves – Get Better and Better. Serving Customers is Inherently Collaborative.

– Great SaaS Teams Energize the Rest of the Company

So Your Job is To Drag the Company to Initial Scale – And Then Feed the Engine so It Stays There!