716: The Future of Customer Success in 2024: Insights and Predications from Gainsight CEO Nick Mehta and SaaStr CEO and Founder Jason Lemkin
- Founders need to have a 10x better feature in their product. – Jason Lemkin
715: The 7 Biggest Mistakes CMOs Make (And How to Avoid Them) with the CMOs of Databricks, Zoom, and Okta
- Strategy
- Building the right team
- Find a company you admire and hire the person one level below who is probably doing a ton of the work. – Jeanine Pelosi
- Setting the right metrics
- Putting the right process and tools for attribution; Don’t overlook people who have been there from the beginning
- Invest early enough in brand
- Having strong, consistent messaging
- Not being yourself as a leader in tough times
714: From Zero to Hero: How to Dominate Outbound SaaS with Rippling and Founders Fund on CRO Confidential
- Host: Sam Blond; Guest: Ashely Kelly
- At inception, target the following:
- 1st degree connections that fit your ICP & persona
- Leverage your investors
- Key characteristics when hiring SDRs:
- Coachability
- Adaptability to change & failure
- Organization & time-management
- Hunger
- SDR hiring profile
- Work hard/play hard universities (ex: Santa Barbara)
- Althetes
- Fraternity/Sorority
- People who did interns or worked through college
- People with experience in recruiting
- When phone screening/interviewing prospective SDRs, look for candidates who are good at driving the conversation [15:35-56]
- Ashley prefers to hire people who answer “hate to lose” when asked, “Do you love to win or hate to lose?”
- If you have a short sales cycle (under 30 days), consider putting your SDRs on revenue targets.
- It is likely the case that AE self-sourced opportunities close with higher win rates and ACV compared to SDR-sourced opps. But before shifting money from hiring SDR to hiring AEs, consider the fact that many if not most of the high-performing AEs were SDRs at your company. [43:44-44:30]
713: Why the Future of Customer Success, Sales, and Marketing Has Changed: Ask-Me-Anything Part 2 with SaaStr CEO and Founder Jason Lemkin
- I don’t think you should ever hire anyone onto your leadership team who isn’t metrics driven.
- The SaaS industry has failed to lower new logo CAC. Everyone got more efficient in the last year by focusing on expansion.
- 9 times out of 10, innovating on pricing is a terrible idea since it confuses your market.
- Copy whoever is bigger and like you. It removes friction. The best way to close a customer is to remove every bit of friction from discovery to renewal. Doing better at Marketing makes Discovery easier.
- The best products can have AI or Finance do the renewal since the value is so high. If you have humans in a renewal, then you have failed your customers. [26:44-27:28]
587: The 7 Tips to Setting Yourself Apart During the Venture and Growth Stages with Atomico Partner Irina Haivas and Principal Hillary Ball
- At all stages, It is critical to be a talent (and talent retention) magnet.
586: Scaling from $10M-$100M ARR: The Good, The Bad, and The Ugly with Showpad Co-Founder Pieterjan Bouten
- When hiring [executives], it is easy to check off the skills & experience box, but it is much harder to assess the mindset/grit box and the culture fit box. If you have doubts, even if you have a pressing need to hire, wait for a better candidate.
585: The Answers to Scaling, Hiring, and Everything Else: A SaaStr Europa AMA with SaaStr CEO Jason Lemkin
- “Stick with everything good longer… don’t be impatient… if you work for a great boss, stay longer. Everything compounds.” – Jason Lemkin
- Small layoffs generally only impact the bottom 10%.
- “Start with a 10x feature for a particular buyer segment.” – Jason Lemkin
- Accelerate your Enterprise roadmap
584: More than Revenue: Why Choosing Your First Customers Matters More Than You Think with Pigment Co-Founder & Co-CEO Eleanore Crespo
- In your early days, create a top logo wishlist of iconic brands you plan to go after. This not only impacts GTM strategy, but also product design.
- Choose advisors, investors, and executive hires whose networks tightly align with your ICP. Then, leverage them as an outbound (referral) channel.
- If a bad-fit customer comes inbound (too big or too small), then build trust by referring them to a provider who is a better fit for them.
- Customers are not buying a product, they are buying the entire experience of doing business with you.
583: Scaling Faster, Part 2: An AMA with SaaStr Founder & CEO Jason Lemkin
- You constantly need to add new demand generation strategies to your marketing mix to sustain growth.
- “[When an enterprise prospect is stuck on build versus buy] is a sign that your sales process is going okay but not great. Build vs. buy means your prospect has recognized they have a problem and they want to solve it but it is not so urgent or the value is not so well defined that they are ready to buy today.” – Jason Lemkin
- “Hire someone you would buy from, especially someone who could just as easily be a sales engineer.” – Jason Lemkin
- “[To drive demand via content marketing/SEO], write one awesome, preferably data-centric post per week. You cannot just phone this in or hire an agency to do this.” – Jason Lemkin
- Every market has so many vendors. Figure out what your ’10x feature’ is for a particular segment and ‘show up’ where your prospects are (even if your competitors are there).
582: SaaS Secret Sauce: How the CEO-CRO Dynamic Drives Growth with Marketo Former EVP Bill Binch
- “The CEO and CRO need to align on which is better – more deals at lower ACV or fewer deals at higher ACV.” – Bill Binch
- “Pre-plan the org chart of of your revenue team +1, +2, and +3 quarters out.” – Bill Binch
- “Build a bottom-up capacity plan that takes into account existing & to-be-hired reps and adds nuance for attrition, ramp, and performance variation.” – Bill Binch
- “There are only two reasons you make or miss your target for a period. One is that you either had enough pipe or did not. The other is that you either converted or did not convert at your normal rates. Track this on a monthly basis.” – Bill Binch
- “Even for enterprise, create monthly quotas to encourage a faster pace. This builds urgency 12 times a year instead of just 4 times.” – Bill Binch
- “I almost always default to more logos at a lower ASP versus fewer logos at a higher ASP.” – Bill Binch
- “Optimize your prospect experience to get them to demo.” – Bill Binch
- “The worst-case prospect experience is to fill out a demo request form then have to talk to an SDR who schedules a discovery call with an AE who sets up a demo for you with a sales engineer.” – Bill Binch
- “ABM is not a technology, it is a process.” – Bill Binch
581: The Latest in VC Funding + Scaling: An AMA with SaaStr Founder & CEO Jason Lemkin
(no substantive GTM takeaways from this episode)
580: Finding Opportunities in Every Challenge: From Humble Beginnings to 30 Million Users with Miro Founder and CEO Andrey Khusid and ICONIQ Growth General Partner Matthew Jacobson
(poor audio; no substantive GTM takeaways from this episode)
579: Why Event Marketing Matters Even More Than Before & The Future of Events with SaaStr CEO Jason Lemkin
- “Field marketing is 40% of pipeline.” – Jason Lemkin
- 70-20-10 Rule: 70% into programs with measurable ROI, 20% into brand, and 10% into experimentation.
578: The Metrics that matter, Whether You are Raising $1 Million or $100M with Index Ventures Partner Molly Alter
- “It is not just the metrics that matter; it is your command and control of these metrics.” – Molly Alter
- Starting at $1M, 3x-3x-2x-2x-2x means $72M after 5 years.
- The ‘Holy Trinity’ of metrics: logo retention + gross dollar retention + net dollar retention (all measured on a trailing 12 month basis)
- Unless you made major changes, cohort retention and LTM retention will be similar.
- Show both CAC payback in months and 3-year (or 5-year) LTV:CAC
577: Scaling Faster, and AMA with SaaStr Founder & CEO Jason Lemkin
- “If you don’t build freemium into your product early, you will never get there.” – Jason Lemkin
- “The more you take friction out of the product, the more you sell.” – Jason Lemkin
- “Brand is the number one determinant of buying decisions. Until you have brand, you need a solution that is 10x better for a slice of the market.” – Jason Lemkin
- “Free pilots are for suckers. They never [rarely] convert and are a big headache.” – Jason Lemkin
- “Free customers are not customers.” – Jason Lemkin
576: 7 Secrets to a Successful Go-To-Market Strategy With PayFit Co-Founder and CEO Firmin Zocchetto and Accel Partner Phillippe Botteri
- “Self-serve for SMB is non-negotiable.” – Phillippe Botteri
575: The State of SaaS Marketing in 2022: Mutiny & SaaStr CMO Panel
(no actionable GTM insights from this episode)
574: Scale-Up Mistakes for Startups with Dave Kellogg
- Prematurely accelerating go-to-market
- Keeping people in the wrong roles
There are figure-it-outers and scale-it-uppers. The former are builders and typically don’t like process; the latter love process and need a playbook. - Losing focus
Don’t worry about a 2nd product until you are over $100M. - Messing up US Expansion
See: https://kellblog.com/tag/us-expansion/ - Accumulating debilitating technical debt
Hire strong technical architects.
573: Scaling from $1M to $10M, an AMA with SaaStr CEO and Founder Jason Lemkin
- Solve a problem 10x better in a way that is low effort/low risk for the buyer.
- Outsourcing sales does not work since 3rd parties cannot understand your product the way you do.
- The main reason early sales leaders fail (when they do) is because they fail to hire great managers under them as they grow.
- When you are at $10M, hire people who been part of the journey from $10M to $25M.
- Early on (< $1M), get one channel to work (inbound, outbound, etc.). Above $10M, you have a brand and everything will start to work.
572: 10 Mistakes in Building Out Your Revenue Organization: A CEO’s Perspective with Insider CEO Hande Cilingar
- Add sales enablement once you are over $5M
- Obsess over pipeline relative to target. This is THE most important SaaS metric.
- Ensure reps have expansion quotas.
571: 5 Mistakes the CEO/Founder of ZoomInfo Make on His Journey to IPO (and beyond) Part 2
- Early on, AEs need to know a lot about the product and need to be really bright (as measured by a cognitive test). As you get bigger, this hurts your ability to scale.
- Hire great people first THEN optimize.
- Once you segment, the smaller end of a segment gets ignored. As soon as you are ready, segment more granularly to increase focus and returns.
570: 5 Mistakes the CEO/Founder of ZoomInfo Make on His Journey to IPO (and beyond) Part 1
- “If you go fill out a form on the ZoomInfo website, somebody will call you within 90 seconds. The person who is calling you has been algorithmically chosen as the SDR most likely to convert your type of your company and your level of buyer into a demo for an account executive.” – Henry Schuck
- “All of our account executives are ranked in 4 different tiers. Based on what tier you are in, you get a higher quality of leads. If you are in Tier 2 and you outperform your peers by 20%, you move up to Tier 1; if you underperform by 20%, you move down to Tier 3.” – Henry Schuck
- Why the Chorus.ai acquisition worked (increased growth from 100% to 300%): same buyer, same motion, & simple product. “When we do M&A, one of the things we think about is, ‘How quickly can we enable the sales team to sell this?'” – Henry Schuck
569: Classic Episode: Succeeding as a Young Enterprise Founder with Front Co-Founder and CEO Mathilde Collin
- For early hires, ask yourself, “Could this person be a co-founder?”
325: How Marketing Teams Can Replace the Leads Lost from Events In a COVID World & The Right Tone to Adopt With Clients That is Caring and Achieves Business Objectives with Carolyn Guss, VP Corporate Marketing at PagerDuty
- Our key focus on Marketing is to drive trial on our website. We then land and expand.
225: Biggest Lessons from the AppDynamics and GlassDoor Scaling, 3 Elements Marketing Team Comp Has to be Tied To & How to Create True Alignment Between Marketing & Sales with Stephen Burton, VP of Smarketing at Harness.io
(no actionable GTM insights from this episode)
194: ARR is a Lagging Indicator Not a Leading Indicator, The Metrics You Need to Focus On, The Secret to Success In Selling to Developers, Why You Should Delay the Buildout of Customer Success Teams & How Small Numbers in SaaS Can Deceive You With Steve Newman
- In the early days, dive into the qualitative insights you can get from wins and losses
- “We look at PoCs because they are early enough to be a leading indictor and late enough to be meaningful.” – Steve Newman
- Scaling CS to too fast may flaws in the product.
- Selling to developers is just like selling to anyone except they don’t want to talk to you and don’t believe anything you say. You can’t tell them; you have to show them. Demos, benchmarks, [product] videos, or customer testimonials.
- In rapid growth, hire people 3 months before you need them (when something is a 1/4 time job for a person).
184: Step by Step Guide to Scaling Your Sales Team, Why Founders Need to Spend More Time on Top of Funnel & Why Discounting is a Great Tool with Sam Blond, Chief Sales Officer @ Brex
- In earlier stage (under 10 reps), hiring more sales reps does not necessarily lead to more revenue. Spreading good leads to less productive reps hurts performance.
- Look at reps calendars – you want to see a whole lot activity. If calendars are light, then you don’t need more reps, you need more leads.
- Great problem to have: Reps are telling you they are overloaded with demos.
- A highly technical founder may hire reps earlier; but don’t hire just one, hire two.
- Your first sales hire should have been one of the first reps hired at a separate company.
- Focus on hiring reps who have worked in an environment with a similar sales velocity/motion. They can learn the product relatively quickly.
- Increasing lead flow tends to have a faster and larger impact then working to increase rep productivity.
- Hierarchy of channels: referral then inbound then outbound.
- Go back after closed-lost opps.
- Sales cycle depends on pricing, brand, and the size of the company you are selling into.
- Legal & procurement takes at least 45 days.
180: David Skok on Why You Should Not Focus on LTV/CAC In The Early Days, What is the Right Way to Analyze Sales Rep Productivity, & the Leading Indicator Early Stage VCs Use to Assess Product Market Fit
- The most important metric is net bookings = new logos + expansion – churn
- Early on, pick one use case for one target market
- Pull together a cross function growth team to problem solve how to unclog your pipeline
- On scaling sales
- For early sales, the founders need to sell to ensure product is sellable
- Hire a team of two ‘pathinder’ sales reps. These are people capable of selling in a hyper-unstructured environment.
- Then keep hiring in pairs.
- 75% of reps should be above 75% of quota. 50% of reps should be above 100% of reps.
- Don’t hire salespeople until you have a predictable lead generation engine driven by marketing. Once that is happening, make sure you hire salespeople fast enough.
- Removing steps and friction (effort / time) from your sales process is the best way to increase productivity.
171: How To Figure Out Your Pricing Strategy: The Diminishing Role of the Per Seat Model, Why Open Source is the Only Way To Get In Front Of Today’s Developers & Why Capital Efficiency is Always Key with Chetan Puttagunta, General Partner @ NEA
- The only way to reach vast numbers of developers today is via open source (on GitHub)
- Align pricing with how your customer perceives value. Rather than per-seat, that might be: amount of data, events or transactions, number of servers, amount of memory, etc.
156: Most Downloaded SaaStr of 2017: David Skok, General Partner @ Matrix Partners
- The four top-level metrics that matter are: profit, cash, growth, and market share
- Look at LTV:CAC (target 3x) and CAC payback (target 12-18 mos)
- The components of LTV: average deal size; net dollar retention; gross margin
- Target (at least) 5x Quota:OTE.
- Healthy SaaS companies collect on average, at least 7 mos of cash up front
- At the end of each month, track new ARR added. new – churn + expansion. Track all of these individually vs. plan.
- Track customer churn and revenue churn separately
- A good SaaS company will have at least one variable pricing axis and possibly more (ex: seats; amount of storage; etc.).
- In the early days, relying on channel slows your growth rate.
- Have customers score you at the end of onboarding. If the score is not great, address it immediately.
- If your champion leaves the companies, develop another champion quickly.
- Once you have a repeatable sales machine, make sure you achieve your hiring plan
150: Why New Qualified Leads Divided By Win Rate is THE Metric in SaaS, Why it is Harder to Go Enterprise Down Than SMB Up, & How to Create Engines of Growth Within Your Organization with Paul Albright, Former CEO @ Marketo
- Leading indicators:
- New qualified leads / win rate
- Average deal size over time
- Pipeline per ramped sales equivalent
- Time to ramp a rep
- Renewal rates (dollar and log)
- In a velocity model, win rates needs to be > 25% and preferably 40%+
- You should be able to add reps to warm territories with pipeline. They should be able to close their first deal in the 1st month.
- There are 4 routes to driving the sales funnel: inbound, outbound, referral, and sales-driven
- Marketing should be evaluated by week by program
- Your first marketing hire should be a demand gen leader. They should be one of your first 2 hires.
- For sales, you need to think about: channels, direct, international, verticals, [and size]. (all across products)
- It will take 9 to 12 mos to create an enterprise motion. SMB is much more about features, pricing, and UX; ENT is more about value-selling.
- If your ASP is $5K to $20K, then your sales process needs to be less than 45 days, preferably less than 30. For MM, 30 to 60 days. ENT can be “4 months to forever.”
- Conversion rates:
- Inbound to qualified: 20%
- MQL to late stage: 30% to 40%
- Stress the quality of leads coming out of sales development
- Customization is required for ENT but keep services as a % of revenue under 20%
- Ensure your sales team is at 70% quota attainment overall
- Make sure contracts have an automatic annual price increase of at least 7%
- Create a customer sales upselling team as early as you can
142: Why LTV/CAC Is The Most Important Metric in SaaS, How to Analyze Churn Correct & Why Bookings are Inaccurate and Easy to Manipulate with Dave Kellogg, CEO @ Host Analytics
- 3x LTV/CAC is really the minimum. 5x is better than 3x.
- Upselling is selling more of the same product – a new version, incremental seats, etc. Cross-selling is selling another product.
- Usage-based pricing can discourage usage.
- “CS should run easy incremental upsells & cross sells as well as renewals. But don’t put your CSM against a competitor’s enterprise rep. Pair hunter vs. hunter and farmer vs. farmer.”
- To analyze churn, you need to talk to customer who churned AND who retained and then find what was different.
- Implement a standard taxonomy for classifying churn.
- The role of Marketing is to make sales easier.
- The minimum Quota:OTE is 4x but 5x is better.
- Build a “driver-based model” (aka capacity plan)
124: Upfront’s Mark Suster On the One Thing that Kills Sales, Why You Have to Price High and Discount & Why Salespeople Are Either Farmers or Hunters?
- “Price high and discount.” – Mark Suster. No matter who you are, you want to feel like you ‘got a pound of flesh.’
- “Over time, it is easier to reduce discounts than to raise price.”
- The number one rule of scaling sales is referenceability.
- In the early days, err more on hiring farmers rather than hunters. It is better to have fewer clients for whom you can make a meaningful difference in their product.
- Call as high as possible.
- NINA = no influence, no authority.
- Why buy anything? Why buy from me? Why buy now? Urgency comes from preventing loss, saving costs, gaining a competitive advantage, or meeting a pressing regulatory requirement.
- Early sales in SaaS are highly consultative so sellers must deeply understand need.
- Even early on, prioritize accounts into Tier 1, 2, & 3. 1s are targets to close this quarter. 2s might take 2 or 3 quarters. And don’t touch the Tier 3s!
94: The $100 Million Question All SaaS Founders Must Ask, Learnings from Working with Marc Benioff at Salesforce & Scaling Zuora to a $Bn Valuation with Tien Tzuo, Founder & CEO @ Zuora
- In the early days, don’t hire salespeople. Have everyone work with early customers.
- For GTM strategy, you need to start with your assumptions of (# customers) x (ASP). Once you have that, it dictates how you shape your company.
88: How to React When a Lead Goes Dark? How Sales Reps Can Be Polite Not Rude? Why Summary Emails are Fundamental After all Client Interactions with John Barrows, Godfather of Sales
- Set accurate expectations with internal and external clients, document them, and then stay committed to meeting/exceeding them
- At the end of a client meeting, let them know you are going to send them a summary follow-up email and (verbally) ask them to reply to confirm it is accurate
- Understand people’s priorities at the intersection of role x industry
- ‘Marketing is content; sales is context’ (Barrows/Vaynerchuk)
- “Salespeople filter content and add context.” – John Barrows
- Remove discounts from your vocabulary and reframe and ‘creativity’ to set up trades (reduced price in exchange for cash upfront or a longer term contract)
- Annoying persistence is saying the same thing over and over again. Professional persistence is having a reason for your interaction, adding value, and setting accurate expectations and holding yourself accountable.