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Dear SaaStr: How Can an Early Stage SaaS Startup Get its First 1-3 Pilot Fortune 500 Paying Customers?
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?
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?
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?
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?
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?
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?
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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Dear SaaStr: Why Are So Many VCs Grouchy These Days?
Dear SaaStr: Why Are So Many VCs Grouchy These Days? I think because it’s so damn hard to truly make money as a VC. So, so much harder than it felt in late 2020 and 2021: If you aren’t in the top quartile of venture fund performance at least, maybe higher, you can’t raise another…
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Dear SaaStr: What Happens to the Management Team When a New CEO is Hired?
Dear SaaStr: What Happens to the Management Team When a New CEO is Hired? You never know exactly what will happen. However, at a practical level, I think you should plan on maybe 50% of the management team turning over if your company brings in a new CEO. Maybe more. It just makes sense. The…
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5 Lessons Learned from a 20+ Years Operator Turned First-Time Founder with ex-Synk and Elastic CMO Jeff Yoshimura
Jeff is the co-founder of a new stealth startup, a previous CMO at Snyk, and an operator at Elastic, Zuora, and Salesforce. His day-to-day role as a first-time founder involves a lot of work around creating and building the MVP product and filtering out all of the noise in this SaaS ecosystem. Now, Jeff shares five themes and his lessons learned over the past 6-8 months as a founder vs. an operator.
Dear SaaStr: Does the Fund Make The VC or VC Make The Fund?
Dear SaaStr: Does the fund make the VC or VC make the fund? The VC makes the fund — but it’s a little more nuanced than that. Only 2 things matters for VC until it’s late stage, and maybe even then: Getting the best founders to pick you; and Picking from the best founders that…
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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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Popular Q&A
How To Reverse-Engineer a $100M Exit: SaaStr on My First Million Pod
How do you reverse-engineer your first million as a SaaS startup founder? SaaStr founder and CEO Jason Lemkin chats with Sam Parr on the popular YouTube channel and podcast My First Million about what’s required to make it on the map for a $100M exit and then reverse engineers the steps to get there.
Rule 1: New minimum is $400K per employee
Rule 2: Go multi-product
Rule 3: Your second product must be bigger than your first product
Cheat code: Double your prices
Rule 4: 30% of your revenue is international
Rule 5: Localize your product
Cheat code: Remove friction
Rule 6: 100% net revenue retention
Rule 7: Don’t raise double digit millions
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...