Dear SaaStr: What Should a Bootstrapped Startup Focus on during the Initial Stages of Revenue Growth, Getting More Customers or Making a Few Customers Really Happy? It’s a question I hear all the time. Especially bootstapped startups have so few resources. Should we put them into the few customers we have, or into getting the…
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Dear SaaStr: What are some no-no’s when it comes to funding a startup — and working with VCs? Here’s my list of top No-No’s: Never assume your existing investors will write you another check. They may, but it’s hard to predict if they will. Just assume any more money has to come from new investors….
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Dear SaaStr: Does Being a Strong Operator Make You a Better Investor? I don’t think in SaaS being a founder or senior exec or early key hire makes you a better investor per se. Why not? I mean … it’s pretty easy to invest at $1m ARR growing 300% in a hot space. It’s really…
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Dear SaaStr: How Do I Set the Revenue Goals for Next Year? I try to model 3 overall plans for the year: C-90, C-60, and C-10, not just for the sales team, but the whole company. The C is for “Confidence”. The odds you think you can hit it, from the CEO’s perspective. Here’s how…
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Dear SaaStr: Do VCs See Founders As Somewhat Beneath Them? It can feel that way at times. I’ve felt that way at times, even today! As both an investor and a somewhat successful founder. But it’s not that simple. VCs never work as hard as the best founders, and even when they do, it’s not…
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Dear SaaStr: I Don’t Know Marketing. Should We Try to Do It Ourselves or Hire an Agency? I’ve never seen a marketing agency get a startup qualified leads, especially at the earliest start-up phases. The only value I’ve really seen in agencies is helping you with positioning (sort of, but not too much), branding (yes,…
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Dear SaaStr: Which Mistakes Have You Learned the Most From as an Entrepreneur? The top mistakes I’ve learned from: You can do OK with a so-so founding team, but you can’t do great. And great individuals do not necessarily make great co-founders. So slow this part down. We’re all in a rush, but you can…
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Dear SaaStr: My startup is nearing the end of its runway – and I found out my CEO has been taking money from the company. What should I do? Unfortunately, this is a little more common than you think. Maybe even more common today than a few years back, as VC rounds and especially seed…
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Dear SaaStr: What 3 Mistakes Did You Make in Your SaaS That You Wish You Could Go Back in Time and Fix, to Accelerate Growth? Every year that I think about it, the top 3 sort of change. But my Top 3 mistakes I made as a SaaS CEO: Not constantly hiring, especially for VPs….
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Dear SaaStr: Who Should I Fire, Someone Who Underperforms, or Has Questionable Ethics? I would fire both. An underperforming rep that gets a pass just lowers the bar for everyone, unfortunately. No matter how nice they are. If it’s OK for Bob to always hit 30% of quota … then you just won’t have enough…
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Dear SaaStr: How Many More Junior Marketers Should you Hire Before Hiring a VP of Marketing? Unlike many positions, I say 0 if possible. In fact, one of the 10 most unforced errors I see founders make is hire someone too junior to get marketing going. If you are, say, $500k in ARR, you can’t…
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Dear SaaStr: What Was the Moment You Knew You Had to Break Up With Your Co-founder? It’s happened to me twice, that “moment”. It was the same thing both times: When they just didn’t show up to a critical meeting. Founder conflict is unfortunately pretty common. I was blessed in my first start-up to never…
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Dear SaaStr: Do angel investors or seed venture capitalists normally ask for detailed budgets including cash flow analysis before investing, even though most of the numbers will be pure speculation? Many do. Why? Even if you are very early stage, It’s really one of the best ways to learn. To learn what in the founders’…
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Dear SaaStr: As a VC, if you could go back to your operational experience (as part of a hyper-growth startup), then what would you remind yourself to take note of? My top list: Slow down big decisions — when you aren’t sure. You have to move fast and break things, but if the pit in…
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Dear SaaStr: When Will VCs Push You To Bring On an Outside / Professional CEO? I think 99% of successful VCs, especially “traditional”, experience Silicon Valley-type VCs have now seen you want to back the founder-CEO forever if you can. You sometimes get a short-term boost from a Professional CEO, especially as they often are…
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Dear SaaStr: Is a Strong Social Media Presence Important as a CEO? Onestream is the latest SaaS IPO. Bootstrapped to $100m ARR. The CEO has never posted on LinkedIn. Not once. And he’s a 2x successful founder. Selling to CFOs and finance. On the other hand, if I were selling sales and marketing tools, I’d…
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Dear SaaStr: Should I Publish My Pricing? If you aren’t sure — then yes. Transparent pricing has many advantages: It makes the sales process simpler. It allows prospects and leads to do more discovery work on their own. And it places your app in pricing context with other apps. It makes the sales process faster. …
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Dear SaaStr: Is Underpricing a Good Strategy to Gain Traction? Yes, to some extent — once a category is well established and there is a subset of functionality that is commoditized. But it’s not a marketing strategy. It’s more a tactic to win deals vs. an establish. brand, once you have the prospect in your…
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Dear SaaStr: In B2B Startups, How Useful is Cold Calling? Look, I hate getting those calls. Especially the really pushy, dumb ones from SDRs that barely know their own products. Do those work? I don’t know. However … cold calling, done by folks who have done it well before, always works a bit. Especially if…
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When should you use testimonials in the sales cycle? Testimonials are nice, you need them. But most prospects these days have already seen the generic ones on your website and in your collateral. What really moves the needle in sales is very similar companies using, and loving, your product. So arm your sales team with…
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Dear SaaStr: How Can I Get The Attention of Software VCs? #1: Get Out There: Get in TechCrunch. Get on Hackernews. Get on stage at any B tier or A tier event. Get warm intros from any successful founders or seed investors you know. Rent a cheap booth at an event lots of VCs attend….
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Dear SaaStr: What is Your Best Advice for Maintaining Healthy Co-founder Relationships? Talk. Dysfunctional co-founders don’t talk. Not for real. They stew. They get passive-aggressive. They email. They Slack. But they don’t talk. I don’t mean talk in group settings, or at staff meetings, or in scrum. I mean the two of you. My best…
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Dear SaaStr: If a Startup Raises $40 Million and Fails to Sell The Company, Do Founders Typically Exit With a Severance Package? Very rarely in a failed start-up, irrespective of the amount raised, will the founders end up with anything. If the start-up has raised a lot, e.g. here $40m, a small carve-out may be…
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Dear SaaStr: What are The Pros and Cons of Raising VC Money from a Corporate VC? The pros, and the cons, are both limited. The issues here are smaller than they used to be. Cons: Usually won’t carry the company or write many “second checks”. So not an ideal lead investor. This is the biggest…
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Dear SaaStr: What Are The Downsides of Being a Venture Capitalist? Perhaps the biggest downside, for folks with some success under their belt … is your likely inability to truly be in control of things in a bigger firm. Most great founders are good at being CEO but don’t actually need to be CEO, per se….
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