Is Google an enterprise software company?
No, but it is moving a bit in that direction. Google paid $380,000,000 to buy Bebop in large part just to get Diane Green to kickstart their enterprise play. She’s brought in a huge veteran team, done a bunch of acquisition, pushed Google Cloud into an aggressive AWS...
Does one need to be a great salesperson to make a great sales manager?
I do think so, outside of the F500 at least. I can tell you empirically the best VP of Sales I know were strong salespeople in the early career. Not always the #1 top salesperson, but very strong. In the top 20% or so, ideally higher. I agree the #1 job of a VP of...
How do I calculate how much ownership should I give to potential or serious investors if they are willing to invest in a startup? What would be the appropriate formula?
There is no appropriate formula, but bear in mind different VCs have their own different formulas. It’s hard to tell from the outside, but VCs will often pass on an investment if you don’t meet their formula. What are these formulas? Most Seed funds want to own at...
Dear SaaStr: How Long Did It Take For You To Convince Your Co-founder to Start?
Dear SaaStr: How Long Did It Take For You To Convince Your Co-founder to Start? It varied a lot. The first time, it took an hour or so. My co-founder and I were both working at a struggling company. It wasn’t hard to convince her. The idea to start the company may...
Do you have any advice for my early 20s life?
I have no real regrets about my 20s, because I needed every experience to get to wherever it is I am today. I had to go through all of them, even if some took too long, etc. But if I was stronger or better, or who I am today doing it over again, my top re-do ideas:...
Is it a good idea to buy a used Tesla Model S, or should you only buy new? Why?
We bought a fairly early P85 in 2012. No Autopilot, no parking sensors, no badge on the back, almost no nothing on this early build. The seats aren’t that comfortable. The materials aren’t that great. It’s a bit noisy on the highway. But — nothing has ever gone...
Dear SaaStr: My Startup is Entering Its First Churn Cycle after 2 Years. What Should We Know?
Dear SaaStr: My Startup is Entering Its First Churn Cycle after 2 Years. What Should We Know? What’s most important is: Segment it. You’re already alluding to this. But generally, between Small, Medium and Larger customers because they will churn at different rates....
How do I calculate gross margin in SAAS businesses?
While GAAP rules allow some flexibility here, generally most SaaS companies include: Hosting costs. E.g., AWS. Customer support costs. The salaries and expense of your support team. A % of Customer success costs. Often some % of their salaries and costs go into gross...
How do the economics work for a $3MM venture capital fund?
It sure sounds small for a full-time gig. If you end up doing 250x+ like Lowercase I, you can still make a lot of money. But the one thing that’s non-obvious with small funds is they often call all or most of the fees up-front. Fees often are equal to about 20% of the...
What is your advice for a founder who is between ventures after his last one failed?
Let it go. This is very hard advice to take, but it’s my best advice. I’ve seen many founders who have failed who can’t let it go. They make excuses. They blame other people (this is the most destructive). They are insecure about their next gig. They feel like...
How did Domo, a startup from Utah, get a two billion dollar valuation?
Fairly simple: Proven CEO who sold his last company for almost $2b — and wants this next one to be worth $20b+. Fast path to $100m in bookings. Well-defined, large space. See a discussion on this topic and related ones from SaaStr Annual here with CEO Josh...
Should an ex co-founder be still referred to a co-founder even though he damaged the brand on resigning?
Be gracious. If he damaged the brand on the way out, but still made some material contributions while a co-founder, let it go. Startups are tough. Not all founders are made to go the distance. It was also your fault for picking him. View original question on...
Given that Elon Musk’s first company Zip2 was shut down by Compaq without ever earning a profit, would that be considered either a lucky dot-com era sale or a failure?
This is one of the great questions you will have to ask yourself as a founder. If your company does not live on, is it a failure? What if you make $1,000,000 or even $10,000,000 (!) on a sale, but the acquirer shuts the product down in 24 months? Is that a success or...
We just raised multi million series A for our startup. I am a COO and a cofounder. How much annual salary should I take?
The low end of market is a good place to start. If you’ve raised “multi-millions” in a Series A, then the investors don’t want you to starve. It’s time to pay yourself a real salary. But multi-millions is not as much as it sounds. Hire 5 engineers, a few sales folks,...
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