The Latest from SaaStr: The Impact of Generative AI on Software

So this survey and data won’t surprise very many, but I wanted to do it anyway to get the latest data back from the SaaStr community.

The learning: your SDRs average tenure is about 14 months, and perhaps most importantly, 52% of you don’t see your SDRs last even 12 months.

This shouldn’t be much of a surprise.

SDR is an entry level role in most sales orgs, and many SDRs want to be promoted within 12-16 months, often even faster, or look to move on to where they can get an AE role.

Perhaps the biggest reminder is to make sure you have a clear progression path and rules for your SDRs, and make sure by month 6 they have a good sense of how they are tracking to an AE promotion, if that’s what they want. 

Or they’ll … move on.

In March of this year, the U.S. saw the second-largest bank failure in its history. Silicon Valley Bank specialized in venture capital-backed startups, primarily in tech. Understandably, the collapse of a venture bank where companies could lose billions of dollars was staggering. 

On a recent episode of the Uncharted podcast with SaaStr’s Poya Osgouei, the SVP of Venture Debt and Startup Banking at Pacific Western Bank, Mark diTargiani, shared what the state of venture debt looks like post-SVB collapse and three tips for communicating effectively during chaos. 

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Generative AI has taken the world by storm, and VCs and SaaS founders are looking at new opportunities it can bring. Even considering the more conservative fundraising market in 2023, there are opportunities for startups to get investor attention with AI.

Tomasz Tunguz, Founder & General Partner at Theory Ventures, believes that with the right GTM plan and capital efficiency, it is still possible to get funding.

It’s simply a matter of watching your burn: “The main difference in the market between 2021 and today is that efficiency matters more than growth.”

Beyond MRR growth + managing the burn rate — which ultimately are really are all that matters … you should obsess over improving every key metric and KPI. 

You can’t change everything overnight.  But you can improve almost everything in one quarter, if it’s a top priority.

Maybe your NPS isn’t that high. 

Maybe your NRR isn’t quite top-tier yet.

Or churn is too high. 

Or upsells aren’t clicking yet,

So be it, for the moment. 

First just establish your baseline, for better or worse, in each key metric.

Then once you’ve measured them, set goals of improving each at least 20% (or whatever amount) annually, with interim quarterly goals to get you there.

Obsess about decreasing churn.  If you do, it comes down.

Obsess about increasing deal size.  Set a real goal here and track it monthly.

This is a classic SaaStr post I try to update about every 18 months or so. 

What to do when you do miss a quarter.

And it’s time to update it again, as many of you are still struggling right now to get back to where growth used to be.

SaaS is a journey.  7-10 years to get anywhere good.  And another 7-10 after that to get to the iconic level.  Along the way, you are going to miss a quarter.  Or 3.  Or 5.  (And likely even have one Year From Hell).

When it happens, and it will happen, let me just provide some basic thoughts.

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The bigger the firm, the greater the number of partners, the less they “work” on holidays, “ski week”, and even over certain parts of the summer.  The offices are generally very quiet over a variety of holidays, and even parts of the summer.

And yes, VCs don’t work as hard as founders and yes, as stressful as investing can be, it’s not 1/10th as stressful as being a CEO.

But … it doesn’t mean investing stops then.  Only parts of VC investing slows down over holidays and other slow times:

Not working over holidays isn’t just a ski thing. VC firms are consensus-driven, and it’s basically impossible in any firm with >3 partners to drive consensus around Holiday times. If a key partner or two is out, usually, it’s better to wait to bring the deal to the full partnership. This means aligning on windows when everyone agrees to be in the office, at least the Monday of that week (Monday is when deals usually get presented and formally approved).

But this doesn’t mean VCs aren’t reading emails over holidays.  They are constantly reading emails.  So in fact, it can be one of the best times to do cold outreach.  You can get more attention than during busier times.  So reach out to VCs during slower times.  It really works.

And deals can keep moving during holidays.  They’re just harder to get a full partner meeting done then.

We're now less than < 60 days away from the SaaStr Europa 2023 event in London! 

It's the 4th SaaStr Europa, and we you asked for it, so we're bringing it to London for the very first time. 

If you're looking to reach 3,500 SaaS professionals across 2 days, get in touch as we're down to the last few final Sponsorships. 

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