5 Interesting Learnings from Sprout Social; Plus Weekly SaaS News and Updates

Hey SaaStr Community,

Recently, a good friend of mine running a Hot SaaS Start-up asked me if he should hire a particular VP of Product candidate I knew well.  The team he’d be managing was a big thumbs up on him.  The board was in favor.  And I knew this VP.  This VP is a 10/10.

But … it wasn’t what this CEO was looking for.  He wanted someone different.  It just didn’t click.  Not deep down.

You Can’t Hire a VP That You Don’t Love

It wasn’t that long ago we checked in with Sprout Social, but when we did in June 2021, the public markets were at their peak for SaaS and Cloud stocks.  And Sprout Social seemed like an interesting but small SMB player.

But fast forward to today, and Sprout Social is one of the winners in the current market dynamics.  It’s sitting at a $2.6B market cap — up more than 3x from the $800m valuation at its IPO in December 2019,  Not too shabby!!

The key?  Relatively efficient growth, with a PLG booster.  Let’s dig into why Sprout Social stands out in today’s macro environment.

This edition of the SaaStr weekly is sponsored in part by Laika

This is a seemingly niche post that I’ve held off on writing for quite a while.

In the crazy times of 2H’20-2H’21, founders treated investors more and more as fungible commodities.  Raise the most, for the least, as fast as possible. That’s a decent strategy even today — if things go perfectly.

But as part of that, fewer and fewer investors were invited to board meetings.

This edition of the SaaStr weekly is sponsored in part by OnBoard

It’s confusing. Why do VCs need to own “so much”? Why do they often have these specific targets?  Isn’t just making your investors a good return enough?

What makes a great API? And how do you go about building a successful one? Miguel Carranza, CTO at RevenueCat, shares ten learnings from firsthand experience in architecting an API & SDK that is currently on 5,000+ apps and has seen 3x growth Year-over-Year. 

• SaaStr is seeking new team members! We're hiring in Sales, Marketing, Event Content, and Customer Success. If you're ready to help us grow the SaaStr community, see all the opportunities!

• Mailchimp is looking for a Senior Marketing Manager, Lead Generation to set the strategy and develop new customer acquisition programs and end-to-end prospect journeys across a variety of marketing channels inclusive of owned and industry partner events. 

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Classic Episode: Why NPS From Your Whole Ecosystem Is Critical with Flexport Founder & CEO Ryan Petersen

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Top 10 Learnings Architecting a High Throughput Critical API with RevenueCat CTO Miguel Carranza

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Classic Episode: The Importance of Company Values, a Great Hiring Process, and Ownership Culture with Gusto Co-Founder & CEO Josh Reeves

Listen on Apple Podcast, Google Podcasts or Spotify

We're working through 2 years where few in venture cared about capital efficiency post Seed stage

That's driving half the layoffs etc.

A lot of VCs were hyper active last year, not investing this year

But you know, that’s just backwards

Seed investors are looking to do, well hoping to do, 50x their money — if you really crush it

That needs to include 50% dilution

So multiply the valuation you are looking for by 100x

That’s the outcome they are looking for

Now … go be that start-up

The issue isn't so much the valuations of the past 2 years

It's more that investors ignored quality of revenue

If you truly have that, you can grow into a lot of valuations

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