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SaaStr Q&A

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Blog Posts, Q&A, Scale

Dear SaaStr: Can a SaaS Company Get to 50% Profit Margins?

Dear SaaStr: Can a SaaS Company Get to 50% Profit Margins? It’s possible, though it does require a very efficient model. The biggest, most mature software leaders aren’t quite there — but they are close. Adobe is currently at 45% non-GAAP operating margins: Microsoft, also mature and at scale, is also at 45% operating margins:…
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Blog Posts, Career Growth & Advice, Early, Leadership, Metrics, Q&A

Dear SaaStr: Is It Normal for a Startup to Not Disclose Burn Rate and Other Details to its Employees?

Dear SaaStr: Is It Normal for a Startup to Not Disclose Burn Rate and Other Details to its Employees? It really varies, but in my ecosystem, I’ve seen more transparency over the years, which is good. Transparency builds trust: I’m 100.00% in favor of transparency in general. And specifically, I believe employees should generally know…
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Blog Posts, Career Growth & Advice, Exit, Exit Strategy, Leadership, Q&A

5 Tips On How to Handle Acquisition Talks

Dear SaaStr: What should I know about getting acquired? My top 5 tips: #1. Listen more. Talk less (on the target side). It’s very difficult to invent an acquisition. It’s almost impossible to create one, though it happens sometimes. Listen and learn. Understand what everyone’s motivations are. Why your champion is doing the deal. People…
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Blog Posts, Exit, Exit Strategy, Fundraising, Leadership, Q&A

Dear SaaStr: Do Shares Get “Forward Vested in an Acquisition?

Dear SaaStr: Do Shares Get “Forward Vested in an Acquisition? Stock vesting is accelerated very rarely in an acquistion. In 95%+ of cases, the acquirer wants folks to keep vesting just as before — or more so. Even where the option agreements or bylaws or other legal documents require it, acquirers often require those agreements…
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Blog Posts, Company Culture, Early, Metrics, Q&A, Sales, Sales

Dear SaaStr: How Do I Manage a Salesperson Who Does Not Follow Up on Sales Opportunities?

Dear SaaStr: How Do I Manage a Salesperson Who Does Not Follow Up on Sales Opportunities? The simple process you need to add is an “SLA”. You need to take away leads, and also opportunities, if they are not followed up with in a prompt fashion. This is fairly easy to implement in Salesforce (or…
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Blog Posts, Growth, Q&A

Dear SaaStr: Has Salesforce Overpaid for its Acquisitions, Including the $27.7 Billion Acquisition of Slack?

Dear SaaStr: Has Salesforce Overpaid for its Acquisitions, Including the $27.7 Billion Acquisition of Slack? Possibly, but it probably doesn’t matter all that much. Why? It needed them. It needed its top acquisitions to keep growing. They worked: Mulesoft, Tableau, Slack, ExactTarget, etc have all become core businesses that are necessary for Salesforce to grow….
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Blog Posts, Exit Strategy, Fundraising, Leadership, Q&A, Scale

Dear SaaStr: What is a “Good” Exit Strategy for a SaaS Company Raising a Seed Round?

Dear SaaStr: From An Investor’s Perspective, What is a “Good” Exit Strategy/Plan for a SaaS Company That’s Raising a Seed Round? Ok, people are going to tell you not to have a slide or discussion on an “exit strategy” and they are right. An “exit strategy” slide in a VC pitch deck makes you…
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Blog Posts, Q&A

Dear SaaStr: What Are Some Early Red Flags That Your SaaS Solution Doesn’t Have Real Product-Market Fit?

Dear SaaStr: What Are Some Early Red Flags That Your SaaS Solution Doesn’t Have Real Product-Market Fit? The biggest red flag I’ve found is when the “insertion point” you think is 10x+ better than the competition … doesn’t end up being something customers highly value once you launch it. Sometimes the 1.0 is cool, oftentimes…
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Blog Posts, Early, Marketing, Marketing, Q&A, Sales

Dear SaaStr: Should We Over-Charge or Under-Charge our First Customers?

Dear SaaStr: Should We Over-Charge or Under-Charge our First Customers? Overcharge if the customer is big, i.e., >$50k-$100k a year o nor so in ACV. Undercharge if the customer is small by revenue. Why? You’re learning very quickly here if you are enterprise or mass-market in the early days, where your sweet spot is, and…
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Blog Posts, Career Growth & Advice, Early, Leadership, Q&A

Dear SaaStr: What Were the Biggest Mistakes You Made Getting Your Startups Going?

Dear SaaStr: What Were the Biggest Mistakes You Made Getting Your Startups Going? The biggest two mistakes I made, I made twice, maybe thrice. They were: One, starting with too incomplete a management team. In my first start-up, while the core 3 co-founders were great, we needed an operational COO to really get to market…
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