Final day at SaaStr Annual 16′. This was the best event that I attended as a SaaS founder. If you want to review the previous days, here are my notes:
What Makes a Great SaaS CEO
Josh Stein, Jason Lemkin
Key insight: If you can get to U$1m in ARR you are smart enough to do it. The question is: Do you want a put the effort it?
- It is crucial to set a great vision;
- Met Aaron Levie 2y before the investment;
- He burned the boat early to leave B2C and focus on enterprise. He had to “rebuild himself” to become an enterprise leader. All with discipline and hard work;
- He became the go-to guy for thought leadership in the industry;
- Don’t say “I’m not a good public speaker. I’m not an enterprise guy.” You have to practice. You have to embrace the change.
- Set values and principles, that’ll make things easier;
- As you grow, be less exposed to day to day ops. Assemble a great team;
- 3 stages that require great changes: Up to 50 people, 200 people, 1000 people. You have to emerge as a figure, scale yourself;
- Set clear responsibilities for CEO, COO, CRO, etc;
- Empower people to make decisions and not bottleneck;
- Do not ask yourself if you are capable to become a CEO. Just take the commitment. It takes a lot of effort on the side. It takes reading every single business book. The key question is: Do you want to do it?
- You always have to be thinking 6–12 months in advance. Get advice. Bring external feedback;
Marketo: Winning, IPO’ing, and Going Upmarket
Key insight: Ignore the competition. Let them chase you, do your own thing.
- Fun fact: Lemkin was one of the first 10–15 Marketo customers;
- Marketo started focused on the mid-market. Huge race to the bottom, with 6–7 competitors;
- Before marketing automation, they started as an SEO product. Pivoted after A round;
- In the enterprise there was a need for innovation, budget and less competition;
- Average deal size is U$50k;
- We saw Eloqua as an interesting company between Siebel and Benioff. But on the same budget;
- We highjacked their brains by not engaging in their game. We didn’t respond, they start following. You don’t wanna be responding to the competition;
- Should we worry about relative velocity? Should you care if your competitors are growing faster? Have a real strategy on what you’re doing. Ultimately, the first mover takes the largest share, as SaaS compounds, but segmentation is crucial. Focus on finding out what’s the next play to scale the business;
- Success doesn’t have to mean taking the market… it means we’re growing & scaling within a huge category.
- The degree of change from $1m to $10m is incredible. You need continuous learners to keep an evolving team;
- We weren’t great at strategic planning at U$30m, so we hired for that. U$30m was too early for us to hire a “big company” executive. The organization had a hard time with it. The seduction of the big SAP-type exec is powerful. Be careful if it’s too early;
- Spend about 30% of your time with customers. The cocaine of user acquisition can be very dangerous;
Scaling from 30–1,500 in SaaS: Lessons From the Frontlines
Key insight: Be transparent, polite, work hard to help everybody to develop their self-awareness sense.
- Joined as an account manager, at 30 people. The primary job was dealing with enterprise customers. At that time, we spent time explaining what cloud computing is, and the advantages of the cloud;
- All I wanted was a job close to home. I had a consulting background. So I had to align business process internally and with our customers. I made a lot of mistakes. I moved away from those fast, and that’s key. Be agile. I like building and changing. Don’t stop building and changing;
- I fundamentally believe that if I don’t learn something new every day, I’m failing;
- You need to have a culture. It’s not about ping pong tables, candy walls. You need to trust each other. It’s about relationships. The employees are the culture;
- To create a great culture, acknowledge, and maintain it. You have to care about what you’re doing. You gotta have a mission and stay true to that;
- People who are not a great fit for the next stage: Offer paths and mobility. Give special attention for folks that did an awesome job. Let them know what they’re not good at. Help them develop their self-awareness. Help hem create their own plans;
- When you create a clear, measurable plan, it is easier to coach people. People will tell you if you’re being successful or failing if you ask. You have to be clear with feedback. Straight to the point;
- The I’s don’t scale. The We’s do!
- Forget the MBA, get a psychology degree. It’s all about communication and motivation;
- How to deal with great talent decided to become a “manager”? Tell them you’re just not ready. Tell what’ s missing. In some cases, they’ll leave. That’s ok. Hope you’re helping them giving that info;
- You have to be street smart. You have to be able to “read a room”;
- I became the boss of my boss early on. It is all about the vision. It’s hard. Try to think 3 years in advance. Have a dream. Let people know what that big dream is. Have the tough conversations on whether they can or cannot scale. It is better for the individual. You shouldn’t surprise anyone. Be gracious, but separate business from the individual.
- Tell upfront to the person. You have to perform at the top level. I don’t know what your path is. But trust me. If you rock, I will create a path.
- Phil mentioned the cocaine of customer acquisition. I think about the crack of happy customers;
- Customer success is knowing the science of your customers. Back then we used spreadsheets. Now you can automate a lot of it;
- Customer success manager is responsible for the utilization of the solution, making the solution sticky, and help the customer realize the value, and uncover the needs and goals of the organization. The account management team runs renewals and upsells based on the uncovered needs;
- People are your biggest asset. Treat them with respect;
Marketing: Running the Box Playbook — Even Better The Second Time
Anthony Kennada, Menaka Shroff, Aaron Levie
Key insight: It gets easier the second time. The product might change, you might have different customers, but your first-time mistakes will happen way less often. The second time, you have a draft playbook, at least.
- Both panelists came from Box, and the topic of the panel is doing marketing for SaaS for the second time. Key lessons, mistakes, etc.
- Takeaway #1: Go big with the brand and message. See picture below, from 2009. (If you do a billboard, make sure people will have time to read it.)
- Takeaway #2: Create a movement. Read this: https://www.box.com/blog/think-enterprise-software-cant-be-sexy-think-again/ & https://www.businessinsider.com/box-ceo-aaron-levie-no-longer-has-to-explain-the-cloud-2015-9 Gainsight did great promoting the customer success manager and community, creating thought leadership content. The product comes later on, so they could become synonymous to customer success, be helping people become part of it, creating this bond;
- Takeaway #3: As marketers, we need to think about entry points — touches, leads, etc
- If you have a tool one individual can use alone, and you have a large number of those users, freemium works well. If it’s a team/collaboration solution, usually is not that great;
- For new categories, educate the market first, then, bring the product conversations later on. Gainsight focused on teaching customers how to buy, after teaching customer success concepts. ROI calculators, Buyer guides, Sample RFP’s, Long form explainer ebooks;
- Takeaway #4: Use events to spread the word. (Benioff invented that)
- It is great for thought leadership. the event is a manifestation of what you’re doing online.
- It isn’t just for customers. It’s about the industry and the category.
- Takeaway #5: Build customers and a Community
- One of Box core values is to blow the customers mind;
- Work closely with the early believers. They’ll bring your whale customers later. Respond to their needs and leverage them for promotion;
- You’re building software for people to use. Make them realize that there are people on the other side too.
- Bonus Takeaway: Promote your rockstar CEO!
- Dress him well;
- Make him become a thought leader in the category;
- He has to carry the brand and be responsible for it;
Building Amazing Teams
Key insight: Take bets when you hire. Get information to make informed bets. Buy a lot of coffee.
- Keith started at Paypal and worked and invested in several startups. Slide, Linkedin, Square, Khosla Ventures, Scribd;
- 28 investments;
- Just started Opendoor. 70 employees today. Only 2 have domain expertise;
- If you have no discretionary time for people, you’re overwhelmed as CEO;
- Beware of the risk of playing 2 roles. A lot of CEO’s end up doing CEO & VP product. In this case, you might need a COO soon;
- If you have a secondary title, you need someone to help. It has to be a permanent position;
- For COO, bring a different skill set. It’s important to assess your gaps and hire someone to fill those;
- In Paypal we used to have aggressive discussions;
- In my 1st week at Paypal, Peter explained to me. You can’t go after proven people when you start. You have to go after people that are less proven and become great at evaluating, focus on learning how to evaluate people. Make informed bets, and give these people the opportunity to succeed.
- 2 kinds of things you want in a VP. Ability to manage people really well, technical/strategy understanding. Take a bet if they only have A+ experience in one of those;
- Choose investors that can help you recruit, retain, train;
- Go meet the 5 best people at something. Have coffee. What will I learn from the best CFO in the world? By getting coffee with one, you have a benchmark to interview fewer experience candidates. You know what to look for. Use your network, investors, angels;
- For any new position, interview as many people as possible;
- You can get good early in your career at reference checking for each position. If you get good at that, it will avoid a lot of mistakes;
- Preserve what’s unique about your culture. When you’re adding 15 people a quarter, your culture is changing. Make sure you retain culture. Keep people together and on the same page;
- When you grow very fast, it’s a rocket ship ticket. It’s easy to sell, interesting, and people can find an infinite amount of unknown paths.
How to Break Out and Really Scale
Dan Siroker, Ajay Agarwal
Key insight: The last thing you wanna do, is what other companies have done.
- Former director of analytics for Google. Man, it was hard to do A/B testing at that time.
- Ease of use was the catalyst for growth;
- Focusing on the product, helped us get growth through evangelism;
- Marketers tend to talk to other marketers;
- We were not great at marketing initially. My co-founder’s goal was 1 blog post per quarter. A year later, nada.
- Our tagline when we started the company was “A/B Testing You’ll Actually Use.”
- Don’t focus on growth at any costs. Growth has its costs. It has expenditure costs, we culture costs. The rocketship message is important. It has to go fast, but also to go far;
- To be pragmatic you need to be consistent. If someone is not a great culture fit, ask why.
- Great culture: On a weekly all hands, people report a bug incident. One guy stands up and says: I was the one to introduce the bug, here’s why it happened, here’s what we found about it, here’s why it’ll never happen again. This is a great culture. It’s transparent and accountable. Search for missionaries, not mercenaries;
- Behaviors are important assistants to culture. Defining them is important too;
- It’s important to update your company, change values;
- Our real sales team are our customers;
- Hire people who are not proven. Bet on these guys;
- A/B testing on pricing. Eat your own dog food. We went from SMB simple pricing to a very flexible model (no limits, pay per usage, give U$500 for you to test);
- Make sure everybody understands what you understand. When you are 250 people, you don’t participate in the majority of the decisions. Give people clarity. Give them the reasoning to make the right decisions and get out of the way;
The Second Five Years
Josh Mcfarland, Raj De Datta, Sameer Dholakia
Key insight: Ask the hard question. Are we excited about this next stage? Am I? Are we good technical fit? Can I do it? If not, it’s important to refresh the company.
- Bloomreach is personalization software for enterprise;
- Sendgrid is an email marketing platform for developers and marketers;
- Tellapart is predictive analytics for finding your best customers (acquired by Twitter);
- Raj Scale culture: Use the word we. Create mechanisms for reinforcing it;
- Sendgrid’s values, 4H’s: Happy, Hungry, Humble and Honest;
- TellApart: In the transition to Twitter, we kept one of the strongest cultures in Silicon Valley. And we never sat down and created a formal document. We hoped to impact your resume, your bank account, your memories. The TellAparties were memorable. As you transition from 80 people to a 4k people company, you have to keep your culture and amplify it. Bring them to the rest of the company. The commitment I made to my people and to Twitter. A year from now, success means leaving a meeting and not knowing who came from Twitter and who came from TellApart. If you have a clash, it is a lack of context, not a major disagreement;
- Sendgrid has a tradition of flying the whole company for alignment and kickoff meeting in Mexico. Create memories that affect the business;
- Raj: One of the hardest things about scaling the companies is becoming the #1 experience that impact people’s professional lives;
- Raj: Be aggressive. But aggressive for the long term. Focus on sustainable growth;
- Sendgrid did several changes lately. Almost all C level. What are the skills needed to get to the next 5 years? And the executives must understand their roles. Bring people passionate about getting to the next level and that have the next stage skills. Have honest conversations and ask: Are you still fired up for this new stage?
- Bloomreach: Stage #1: Let’s take the world on and do everything. No titles. No exec team. Stage #2: Build an exec team, 3 years in. Spent a lot of time recruiting. Stage #3: Who’s got the energy? The skills, the attitude for the next stage? Refresh.
- These conversations should be explicit. Have open conversations if people are up for the next challenge. It is freaking hard. Before asking people, ask yourself. Am I excited and interested in it?
PR Playbook: The Real Truth. How to Get It. What It Means
Ed Zitron, Erica Lee, Sarah Frier, Colleen Taylor, Matt Weinberger
Key insight: Sell stories and relevance. Don’t be boring.
- Metrics that really matter: Revenue and valuation. Staff numbers are useful. User numbers are good;
- Don’t say you grew 5000% this year. You didn’t exist last year;
- Don’t say “best in class solution”, “disruption”, “innovative”. Tell who your customers are;
- Our job is to tell stories. Give us tools to help that goal;
- Market data, Business benchmarks, research data. Expose these kinds of numbers. If you don’t want to expose yourself, get great, interesting stuff;
- Entrepreneurs underestimate how smart they are often;
- Very few people are born to get on stage. If your founder is ugly and boring, found multiple spokespeople. Have different people for different spots.
- Train people. Train yourself. If you’re a CEO, we hope someday you’ll be on Bloomberg.
- Very few people are interested in stuff such as data analytics. You have to craft an interesting point of view or story;
- Practice. Zuck was terrible, now he’s always doing Q&A’s. He’s comfortable talking about things he’s passionate;
- Be professional. The journalist is doing his job. Don’t be an asshole. They are not obliged to talk about your company;
- Give them real NEWS, not OLDS;
- Never expect them to cover everything. They are just too busy. They do not work for you. They work for the readers;
- Sometimes we’ll interview you and not run it. It’s common. Don’t expect that every briefing call will end up as a story. Don’t be frustrated by that;
- Sync stories and launches. Get everything ready from a product perspective when you give an exclusive;
- It’s great hearing from the founder, makes stuff more relevant, most of the time. In the early days, do not outsource the story you’re telling;
- The best way to get in touch is not on the phone. It feels weird for all journalists;
“When Last We Met …”
Key insight: I’ll be at SaaStr 17′ again.
- Parker Conrad didn’t show up. More on the topic here: https://techcrunch.com/2016/02/11/zenefits-under-investigation-in-california/
- SaaStr Pro is coming soon. Sign up fast, get 2 months free;
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