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Dear SaaStr: For High Dollar Vertical SaaS, Does The First VP of Sales Need Domain Expertise?
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 the trade-off is the most acute. Imagine you…
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Should You Hire a Sales Rep First, Or a Sales Manager?
Dear SaaStr: Should I Hire a Sales Rep First, Or a Sales Manager First? The ideal flow is: You (founder-CEO) close the first batch of customers, say the first 10 or 20. If you don’t, you’ll never really know how it’s done. Or be able to help anyone else, really. Then, once you know how to…
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How To Take Care of Yourself As a Founder
Dear SaaStr: How Do You Take Care of Yourself As a Founder? Quiet quitting, feeling sorry for yourself, working 30 hours a week, etc. — that doesn’t really work for a founder. It may feel good in the short term, but it doesn’t work. It doesn’t get you to success. But you do need to…
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Dear SaaStr: How Can You Land Big Customers If You’re a New Startup No One Has Heard Of?
Dear SaaStr: How Can You Land Big Customers If You’re a New Startup No One Has Heard Of? Solve one of their top pain points, for real — that no other vendor is solving. If you haven’t sold to the F500 / Global 2000 before, you’ll be somewhat surprised to learn that between the CIO’s…
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Four Simple Tips to Increase Pricing. Without Angering Your Customers.
Dear SaaStr: How Do I Increase Pricing Again Without Angering Customers? One simple thought: earn it. First, plan to increase pricing in general once a year, each year for new customers. But earn it. And generally for new customers, not existing customers. How much? Well, that will depend on how much additional value you’ve added…
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Dear SaaStr: What Successful Startups Were Launched While The Founders Worked 9 to 5?
Dear SaaStr: What Successful Startups Were Launched While The Founders Worked 9 to 5? I’m not aware of any huge successes in SaaS that were active side projects while the founders worked at different companies. But there are a bunch that were side projects at the same company: Mailchimp was a side project while the…
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Dear SaaStr: A Co-Founder is Asking for More Equity Post Fundraising. What Should I Do?
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 fix things here. If your…
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There Are Exceptions. But Expect Your Valuation To Become Your Price Floor For An Acquisition.
Dear SaaStr: Does valuation play into how likely anyone would want to acquire the business from the founders? Absolutely. A lot. There is no question “too high” of a valuation can discourage an acquisition. Acquirers will generally assume they have to pay more than the last round price to buy you, and often 2x-3x more:…
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What’s the #1 Most Important Thing in Pricing A New SaaS Product?
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 per user? Why can Workday charge…
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Dear SaaStr: What Are SaaS Billionaires Like?
Dear SaaStr: did you ever have a situation where you were talking to a person but that person turned out to be a billionaire? I’ve done OK, but I’ll never be a tech billionaire. However, I’ve met and worked with many (as crazy as that sounds to say “many”) in my start-up and SaaStr journey….
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The Difference Between a VP of Marketing and a VP of Demand Gen
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 most cases, likely everything. Most VPs…
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Dear SaaStr: What’s The Number One Challenge for Scale-Up Stage Founders?
Dear SaaStr: What’s The Number One Challenge for Scale-Up Stage Founders? In SaaS, once you have even a few million in ARR, the #1 challenge is recruiting top-tier VPs and building a truly top-tier management team: SaaS products mostly don’t sell themselves. You can hack managing and finding 1–3 reps yourself, but after that, you…
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Dear SaaStr: What Would Be The Single Most Important Advice You Would Give Other Entrepreneurs?
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 desk and quit today. Not if you have investors, customers,…
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Dear SaaStr: Does a Big Exit Make You Happy?
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 who they are. Oftentimes, they aren’t really…
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Dear SaaStr: What Is The Best Indicators of Product Market Fit at an Early Stage SaaS B2B Startup?
Dear SaaStr: What Is The Best Indicators of Product Market Fit at an Early Stage SaaS B2B Startup? This is a rough metric, but I’d say from experience working closely with 25+ SaaS companies … if you aren’t growing > 10% a month after $10k in MRR or so … then you don’t yet have…
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Dear SaaStr: How Much Money Do The Best SaaS Inside Sales AEs Make?
Dear SaaStr: How much money do the best SaaS inside sales AEs make? You can back into it. Ultimately, in most SaaS startups, the sales reps will take home about 20% of the total deal value they close. Maybe 25% if SMB sales and/or a startup is very well funded. At scale, this will come…
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Dear SaaStr: What Does “Old-School” Series A Funding Mean?
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 the Series A, at a post-money valuation of < $30m-$40m The “traditional” or “old-school” venture business…
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Dear SaaStr: What Is The Average Time it Takes a VC to Make an Investment Decision?
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 — pending due diligence, confirming her theories are correct, and making…
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Dear SaaStr: What Kind of Background Checks Do VCs Do on Entrepreneurs They Fund?
Dear SaaStr: What Kind of Background Checks Do VCs Do on Entrepreneurs They Fund? It varies. Everyone does some background checks, or least they did outside of the Boom Times of late 2020 through late 2021. And some do very in-depth ones with lots of “off sheet” references (i.e., ones not provided by the CEO)….
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Dear SaaStr: How Do Investors Feel About “Acquihires”?
Dear SaaStr: How Do Investors Feel About “Acquihires”? Back when I started investing, in 2013, VCs worked on getting acquihires for their struggling startups. A lot of energy was put in to find a “soft landing” for struggling investments running out of money, even if the returns might be nickels on the dollars. Today? VCs…
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Yes, It Can Take More Than a Year to Close a Big Customer
Dear SaaStr: Did it ever take you a year to close a sale? Absolutely. This is pretty common in the enterprise. It took me about 18 months to close Google, for example. And that was just for the initial group of users: Need identification and discussions with project manager over several months About 6 on-site…
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Dear SaaStr: What Was the Toughest Rejection You Ever Had in Sales?
Dear SaaStr: What Was the Toughest Rejection You Ever Had in Sales? The hardest rejection I’ve had in sales was around renewals. Especially ones I thought we really had earned. But still lost. In particular, in the early days of EchoSign / Adobe Sign, we had a particular manager at a strategic partner where I…
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Dear SaaStr: Is It Normal for a Founder CEO to End Up With Just 10% Equity?
Dear SaaStr: Is It Normal for a Founder CEO to End Up With Just 10% Equity? Yes — if you are venture-backed. Roughly speaking, this is what generally will happen after 3 rounds of traditional venture capital. Expect it and plan for it. If the company sells 15–20% in each round, and 15–20% is reserved…
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Dear SaaStr: What Should Happen When a Co-founder Wants to Quit?
Dear SaaStr: What Should Happen When a Co-founder Wants to Quit? This is one of the toughest situations to be in. First, figure out if it’s just anxiety. Starting something is hard. Getting to the first $1m in ARR is borderline impossible. If it’s “just” anxiety, and your co-founder is truly great at something —…
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Dear SaaStr: When Is It Too Soon to Target Enterprise Customers in SaaS?
Dear SaaStr: When Is It Too Soon to Target Enterprise Customers in SaaS? It too soon to target enterprise clients when you can’t support their needs 90 days after you close them. It’s sort of OK in the enterprise to promise features and functionality that are sort of there … so long as you deliver…
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Popular Q&A
Dear SaaStr: What Was the Toughest Rejection You Ever Had in Sales?
Dear SaaStr: What Was the Toughest Rejection You Ever Had in Sales? The hardest rejection I’ve had in sales was around renewals. Especially ones I thought we really had earned. But still lost. In particular, in the early days of EchoSign / Adobe Sign, we had a...
Why the Future of Customer Success, Sales and Marketing Has Changed For Good: Ask-Me-Anything Part 2 with SaaStr CEO and Founder Jason Lemkin
In part one of this week’s Ask-Me-Anything (AMA) with SaaStr founder and CEO Jason Lemkin, he answered the community’s questions about whether all anyone cares about is AI anymore, investor appetites going into 2024, vertical SaaS, and thriving as a solo founder....
Is AI the Only Thing in SaaS that Anyone Cares About Anymore? Ask-Me-Anything Part 1 with SaaStr CEO and Founder Jason Lemkin
In the first part of this open Ask-Me-Anything (AMA), Jason shares his thoughts on the current state of sales and marketing, if anyone really cares about anything other than AI anymore, how to hire great partners, and breaking out of a crowded ecosystem.
Doubling Down: Jay Levy Managing Partner at Zelkova Ventures
"Doubling Down" is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. Kicking us off is Jay Levy, Managing Partner at Zelkova Ventures. #1. What’s your most recent disclosed investment? Why did you...
Dear SaaStr: Can an Entrepreneur Back Out of a Signed Term Sheet Without Damaging Their Reputation?
Dear SaaStr: Can an entrepreneur back out of a signed term sheet without damaging their reputation? In my experience — Yes, probably. As a founder, you can back out of a term sheet if something is off, or even if you just get another offer you prefer. There is a lot...
Why You’re Unfundable in 2023: The Cold, Hard Truths About SaaS AMA Part 2 with SaaStr CEO and Founder Jason Lemkin
Jason Lemkin, CEO and Founder of SaaStr, recently answered our audience’s most pressing questions about the present and future of startups. Here is part 2 of the cold truth about SaaS in 2023.