Dear SaaStr: Why do customers hate salespeople? Disalignment. A truly great salesperson is a resource. They help you: They educate you on the product. They honestly answer your questions. They address your concerns, seemingly patiently. They help you pilot / test the product first, in a way that drives things forward without too much pressure….
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Dear SaaStr: What Do You Do When Your Startup is Not Growing Anymore? First, be honest about why. You can blame it on macro issues if you want, but if growth has radically decelerated, it’s likely because you are less competitive than you were before. You probably have fallen out of product-market fit, partially or…
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Dear SaaStr: A Big Tech Co Launched a Competitive Product. How Can I Tell How Serious They Are About It? In SaaS at least, I’ll give you one metric that is fairly reliable: How many dedicated sales professional do they have, just 100% selling the competitive product? If it’s none yet, it’s an experiment. If…
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Dear SaaStr: How Do You Build a Real Exit Strategy? First, bear in mind acquisitions are relatively rare. The vast majority of startups will never get one acquisition offer, let alone a good one. Still, it’s not random. I’ve been through it twice as a founder and about ten times as an investor. At a…
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Dear SaaStr: When You Sold Your Startup, What Were the Downsides? When you sell: it’s not yours anymore; and your upside is capped. Start with Challenge #1. Ask yourself 4 “Are You OK With” questions: The name being changed? With the business being shut down in 2–5 years, if it isn’t strategic anymore — no…
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Dear SaaStr: Is it OK to Reschedule a Job Interview with a Founder? It’s generally fine to reschedule an interview set up with a recruiting manager or similar. They’ll figure it out. That’s their job. But — be careful rescheduling a job interview with a founder CEO — especially at the last minute. If it’s…
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Dear SaaStr: What are Some Early Signs a New VP isn’t Going to Be a Fit? The top one for me is when they don’t embrace the goals given to them. I see this again and again: A VP of Sales that just sort of ignores the plan for the next quarter or two. A…
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Dear SaaStr: Why Do VC Backed Startups Seem To Almost Always Be Running Out of Money? The #1 issue I see is not understanding what investments really are accretive — and which aren’t. And so the money goes far, far faster than anticipated. Venture capital, if you raise it, is there to invest. You don’t…
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Does the advice to always say no to sponsored features would also apply to a SaaS startup selling to mid-market (ACV 20k to 50k+) and has relatively few clients? No. This is not wise advice, it is bad advice in many cases. As long as the deal size is big enough. At least, in the…
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Dear SaaStr: What Will Venture Capitalists Do if Our Startup is a Loss? Move on. Especially, if you’ve only raise one VC round or so. This is telling article re: Bill Gurley, one of the best VC investors of all time: “I give Bill a lot of credit because Bill said, ‘I understand, this happens,’”…
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I’m not that great at sales myself (not really), but I am a student of it. A few things I’ve observed about human behavior, negotiation, and good and bad sales processes in SaaS: Customers that expect a discount really expect a discount. It’s generally easier to mark up the pricing a bit, then discount —…
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Dear SaaStr: Is It Normal to Feel Like a Pest When Prospecting for Customers For a Startup? Yes. Get better at it, get over it, and hire folks who know how to do it. Boy sales is hard. It’s being told No a lot. It’s having literal, or virtual, doors shut on your face. Sales…
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Dear SaaStr: How Hard Is It To Get to $1m ARR Without Investors? My learnings are three-fold. First, it depends on the team. Most of the SaaS unicorns have been built on at least some venture capital … but a number haven’t. Atlassian ($30b market cap), Qualtrics ($12B), Mailchimp ($12B) etc. have gotten there without…
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Dear SaaStr: What Do Founders Need to Know to Navigate a Merger/Acquisition? My #1 tip: Get Zen. Once you sell it, it is not yours anymore. And both your upside and your downside are now capped. You can no longer fail or run out of money, but really, you can no longer win in the…
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Dear SaaStr: Funding Aside, What Are The Top 3 Things That Stop SaaS Companies From Growing From ~$25k MRR to ~$250k MRR? Let’s step back. If you have gotten to $25k in MRR ($300k in ARR) … you have something. Real. It’s not big enough yet. But it’s real. So … You WILL get to…
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Dear SaaStr: What are The Most Common Mistakes Founders Make When They Are Just Starting to Scale Revenue? Let me list some of the ones I see most often going from say $1m to $10m in ARR: Chasing the Shiny Penny. One of the biggest mistakes I see after $1m in trying to enter new…
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Dear SaaStr: When Do You Know It’s Time to Pivot? I think in SaaS, it’s when you have a handful of customers, and they are happy, and it’s been 9+ months … and you are growing, but slowly. If you have no customers, it’s not really a pivot or tilt, it’s a restart. But in…
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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 contracts). And you can drive it down. But you…
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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 predicate step The predicate step is your product has to…
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Dear SaaStr: What Was it Like Acquiring Your First Customer? I had very different experiences in each of my startups. In my first start-up, we were whale hunting — big, large, Fortune 500 customers. So Customer #1 showed us the path to our future. My first customer signed a $10k contract (a small pilot) but…
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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 other day at our most recent…
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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”. You should try to keep them, if you can, and they…
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Dear SaaStr: Why Do Most Entrepreneurs Under Price Their Offerings Initially? Yes, most of us at first under-price and then slowly raise prices as we gain confidence. It’s because (1) we aren’t trained sales leaders, and (2) we worry most about not losing the deal. Founders know the value of a key logo can be…
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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 now? Because, at the same price … later…
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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 can built it themselves. And we’re even…
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