Hey SaaStr Community,

So we’ve done a few good posts on SaaStr about how to steal a customer / prospect from a competitor.

And yet, I still see so few SaaS companies doing even the most basic steps here. 

Too many just ask, “Is there anything we can still do to win your business” … once the deal is totally lost and long since signed with another vendor. 

Why do they even bother? 

I get that most sales teams aren’t structured to really put in the work here, to steal a customer.  But there is one simple thing you can do — enable and put guidelines in place for buy-out deals.  To buy potential customers out from long-term contracts they’ve already signed and paid for with the competition.

So Zoom has just been the craziest story of all time in SaaS. It was already a rocketship before Covid. At $450m in ARR, it was growing a stunning 110% already, as fast as anything we’d ever seen.

Good Times, indeed.

Then lockdown came, and in the end, it wasn’t a boom for Zoom.

Revenue rocketed from $1B ARR to $4B ARR … in just 12 months. Truly insane. But also, something that could never possibly be sustained. It was too much, pulled forward too quickly.

Fast forward to today, and to no fault of its own, we can see what happens when 5+ years of growth was compressed into 12 months: a reversion.

At $4.4B in ARR, Zoom’s enterprise business is robust, if not a true rocketship, growing an impressive if mature 24% a year. But the 110%+ NRR Zoom had from SMBs through 2021 didn’t last. It probably couldn’t last.

So what if I told you there is a SaaS company you likely have never really heard of unless you are in adtech / advertising, doing $2 Billion in ARR, with a $28 Billion market cap even today, that’s insanely profitable and yet still growing 32%?

Yes, this company exists.

It’s called The Trade Desk.

It’s self-service SaaS for AdTech, so it’s often seen more as an Adtech player than a SaaS company, but the reality is it’s software for ad spend.  It’s SaaS.

Let’s dig in.  Because they’re doing just about everything right. And even in today’s low multiple, tougher world — being rewarded for it.

So if you were on social media this week, you probably saw a ton of YC companies talking about how they were in the 2023 Top Companies.

SaaStr Fund has invested in several of them, from Algolia to Treasury Prime to RevenueCat and more and it’s always fun to see awards and similar content from leaders like YCombinator.

But beyond the great stories of who is breaking out, I found a quiet set of statistics even more interesting:  where they are breaking out.

It turns out that 58% of top YC companies are headquartered in the SF Bay Area … but at the same time, 82% are partially or fully remote.

This is indeed a big bummer.  But it truly does make you stronger — if you commit to winning the next one.

Six thoughts on how to do better next time:

First, move them into your Lost Now (But Not Forever) Marketing Program . I know you don’t have one yet, but maybe it’s time to add this new marketing program as part of your demand gen efforts. You likely will get another shot, albeit in 1–3 years.

If you got into an RFP as a tiny start-up, that probably means it is a new initiative. That also probably means they’ll take a fresh look at the landscape again a few years down the road. Market to them like a medium warm, but long-sales-cycle prospect. That already knows you and the space cold. 

The odds you can truly steal the deal later are often relatively low, but they’re often not zero, and unpredictable.  Keep the relationships warm.  Invite them to your customer conferences and webinars — this helps keep the relationship warm as well. 

Go long here. 

You’ll likely talk to them again.

Protect your business against lost revenue, compromised customer confidence, and reduced competitive advantage.

Sign up for hCaptcha Enterprise’s complimentary traffic analysis to uncover the fraud and abuse that is targeting your company. 

Next Thursday, we’ll be hosting 5 Ways to Measure the ROI of Events with SaaStr and Bee Content Design’s CEO, Massimo Arrigoni!

Each Thursday, the SaaStr Insider Live Webinar series covers how to get the most out of events, the latest saastr events news & much more. 

Sign up here as we share the traditional and non-traditional ways to measure the ROI of live events. 

There are two types of SaaS companies in the world: those that are category creators and the challengers of incumbent technology. 

At SaaStr APAC 2023, Scott Pugh, VP of Sales at Figma, shared how to scale these two sales teams while building culture. 

Pugh’s strategy is simple, albeit not always easy: 

• Recruitment — how to hire the best talent to scale your sales organization. 
• Enablement — setting your team up for success and investing in their professional growth. 
• Culture — developing sub-cultures within sales that enable the team to scale successfully. 

Mercury is looking for Account Executive who will own the sales process from prospect to close, as well as partner with their new SDR team and build a quality outbound pipeline.

Diligent is seeking a Regional Sales Director who will be responsible for closing mid-market and enterprise new business in the US for Diligent, as well as understand customer needs and help develop solutions through the company’s offerings.

• SaaStr 637: Unveiling the Data Behind Effective Scaling with ICONIQ Growth General Partner Doug Pepper and ICONIQ Growth Partner & Head of Analytics Christine Edmonds

• SaaStr 638: Lessons Learned in Scaling Your Team & Revenue from $1M ARR to $1B+ with Cloudflare CRO Chris Merritt

• SaaStr 639: Scaling a SaaS Sales Team While Building Culture with Figma VP of Sales Scott Pugh

Listen on Apple Podcast, Google Podcasts or Spotify

Here’s the thing in SaaS

You can build something great and important in a 6x ARR world

But it’s hard, and it’s often not very fun

You can’t pay people as much, you can’t overhire, later VC rounds are tough, and even getting acquired for 10x will be a big win

If times are tougher for you, get your investor updates out today.

Today.

Every VC is still working on figuring out which struggling portfolio companies to believe in, and which not to

Sending the update out the 1st of the month helps you be in the first category

What I see CEOs at struggling start-ups do:

- Go dark

- Hide

- Lash out

- Tweet about lots of things non-work

- Invest time on tiny expenses

- Argue internally

What should do:

- Be Present

- Be Honest

- Be the Rock

- Be Realistic/Optimistic

You just plain grow faster that way

© SaaStr 2023

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