Dear SaaStr: How Do I Best Prevent Churn? You don’t. Instead, you drive it down. Each quarter. You can’t eliminate churn. It’s a fact of business life in selling a product with recurring revenue and thus recurring sales. You can hide churn (e.g., by signing multiyear...
Dear SaaStr: How Can an Early Stage SaaS Startup Get its First 1-3 Pilot Fortune 500 Paying Customers? It’s not magic. And it’s not a mystery. Even though it can seem like it, until you’ve done it yourself. There are basically two paths, and one...
Dear SaaStr: How Would You Invest a 5 Million Dollar Payout From an Acquisition? Bear in mind I’m not a CFA, CPA, or professional financial advisor. But I have been through it. And so I know this is a more difficult question to answer than you might think. The...
Dear SaaStr: How Do You Deal With an Unreliable Co-Founder? You first try to move them into an individual contributor role. If that doesn’t work, then move them out. This is one of the most frustrating outcomes, when a very talented co-founder becomes “unrealiable”....
Dear SaaStr: How Can I Convince My Investor We’ll Double Their Investment By The Next Round? It may be an odd & unusual question — but I think it’s a good one. If you are a VC / private investor, there’s a key meta question: why invest...
Dear SaaStr: How Do You Handle Customers That Want to Build It In-House? Be “Cool”. What I mean is, we all go through this, at least, a lot of us. When you first build a start-up, it’s often feature-poor, with little-to-no brand. Internal IT teams sometimes think they...
Dear SaaStr: Does the fund make the VC or VC make the fund? The VC makes the fund — but it’s a little more nuanced than that. Only 2 things matters for VC until it’s late stage, and maybe even then: Getting the best founders to pick you; and Picking...
Dear SaaStr: If you were hiring a head of sales for a high-priced, niche B2B SaaS product, would you focus on general B2B SaaS sales experience or on market/customer knowledge, assuming it will be very difficult to find a candidate with both? This is the scenario when...
Dear SaaStr: A Co-Founder is Asking for More Equity Post Fundraising. What Should I Do? Listen. It usually means something is wrong. Or at least, off: If you got the equity splits right at first, usually, big issues don’t come up later. This may be a sign you need to...
Dear SaaStr: What’s the #1 Most Important Thing in Pricing A New SaaS Product? I think the #1 thing to think about is context. Software all sort of all, rough-and-tough, costs the same to build and ship. Why is Calendly $10 a month, when Salesforce is $200 a month...
Dear SaaStr: What’s the difference between a VP of Marketing and a VP of Demand Gen? Perhaps nothing. Perhaps. A lot of demand gen leaders want to be a “VP of Marketing” next, and that can be a great hire, and a great title to give them. But in...
Dear SaaStr: What Would Be The Single Most Important Advice You Would Give Other Entrepreneurs? Quit today if you don’t want it bad enough. But … never quit if you truly do. … Now, by “quit” I don’t literally mean leave the keys on your...
Dear SaaStr: Does a Big Exit Make You Happy? Well here in the SF Bay Area … we live in a strange place. Folks I know with “infinite” money sort of fall into 3 buckets: Category 1: Still Building Stuff. For Whatever Reason. In their DNA. This is...
Dear SaaStr: What does “old-school” series A funding mean? Most likely: trying to buy 15-20%+ of a company, that is reasonably capital-efficient, and has at least product-market fit and some early traction, that hasn’t done endless seed rounds before...
Dear SaaStr: What Is The Average Time it Takes a VC to Make an Investment Decision? For hot seed and even Series A investments? 20 minutes into the first face-to-face meeting. The average VC basically makes the initial decision to tentatively invest very quickly —...