Dear SaaStr: What’s Your Best Advice for Struggling Entrepreneurs? Having struggled a lot myself in the early days several times … just a few thoughts to summarize my learnings: 1. Get help & upgrade the team. This is the #1 thing you can do to move...
Dear SaaStr: How Big of a Return Are VCs Looking For in a Startup? For Angel, Pre-Seed: At least 50x, with a possible chance of more. The loss rate in general is so high here, the winners have to do 50x. And this is after dilution, so 100x from the valuation at...
Dear SaaStr: What Are The Common Problems With “Founder CEO’s”? Founder CEOs are better, all things being equal. They go the distance. They care the most. They know it cold. And in fact, about 90% of SaaS companies that IPO still have their founder...
Dear SaaStr: Do Net Promoter Scores Really Matter? I used to not believe in NPS. But I was wrong. Why? The fundamental reason is if you talk to any software/SaaS business truly at scale, you’ll hear one common theme — they get 80%+ of their new customers from...
Dear SaaStr: I am a startup founder that writes extensive monthly report to investors. We are also doing weekly meetings, are they asking for too much of my time? Yes. Some rough rules: For every 1% of a company an investor owns, an investor should get one meeting a...
Dear SaaStr: How Do You Keep Yourself From Getting Fired as a Founder CEO? First, note it isn’t easy to get fired as a founder CEO. Especially if you haven’t raised all that much money. I’ll leave the legal and contractual answers to others. But...
Dear SaaStr: What Is The Ideal Size For a SaaS Marketing Team? The ideal size of a SaaS marketing team until you are at $10m+ ARR is the size that is accretive. The last thing you want is a bunch of “marketers” whose ROI you don’t understand. That’s where...
Dear SaaStr: Is There Any “Con” In Giving Our Sales Tool For Free to Early-Stage Startups? Free of course can real work, done right.: Slack Zoom Canva All built massive businesses on the back of very Free editions, even if they later turned more...
Dear SaaStr: What is The Average Ratio of Support Staff to Customer Count in SaaS? Typically support consumes about perhaps 5%-7% of your revenue at scale (excluding customer success) in most SaaS models. It could be more or less, but that’s a rough way to think about...
Dear SaaStr: What Was Your Biggest Early Days Mistake In Your Startups? Boy it’s tough to pick just one mistake. But I’d have to say in both my startups, the biggest mistake was not taking the time in the beginning to get the founding team right. This is tough. You...
Dear SaaStr: What happens to employees after your startup gets acquired? It varies — a lot. But as a rule: Top engineers will all be given retention packages, extra money / RSUs / options designed to keep them for 2-4 years. All engineers and product people...
Dear SaaStr: How Do I Convince My Customers with Monthly plans to Upgrade to Annual Plans? My advice: Don’t. It’s too many calories expended for not enough benefit. Let me explain what I mean … Large customers only pay via invoices, especially for any deal of any...
Dear SaaStr: What Are The Most “Evil” Things That VCs Do? I’ve been on every side of the table, and had challenging experiences with my investors. I think what founders get wrong is not understanding incentives. VCs really do want you to be a big success....
Dear SaaStr: Does Anyone Regret Being an Entrepreneur? No, but there are … laments. The thing is, successful entrepreneurs generally speaking, can only do that — be successful entrepreneurs. Why? Why can’t they go work for someone else, collect a huge paycheck,...
Dear SaaStr: Should I Go Into SaaS Sales? If you aren’t sure you want to go into sales — don’t do it. Maybe in 2021, when many SaaS leaders were growing at simply unprecedented rates, could succeed in sales if you weren’t sure you wanted to sell. Not today. A...