Hey SaaStr Community,

The other day I had a whiplash moment as a customer of a Unicorn SaaS company. 

I had a large problem with a piece of software with a lot of integrations in it, and it really wasn’t clear whose problem it was.  But one of the vendors stepped up and said they’d solve the problem. 

They worked over the weekend and fixed it! 

Beyond above and beyond.

I became the world’s biggest super fan of this vendor.  I said put me on the website, make me a reference account, anything.  I became Mr NPS 100.

And then something happened.

The fix … broke.  And things were sort of bad again.

I went back to the vendor that did the fix and told them the fix didn’t work anymore.  After some research, they said I’d have to go to a third party to fix the problem.  That it wasn’t their problem, it was another vendor, and that they would no longer be able to help me.

Perhaps that was all it was fair to ask of them.  Still, I then became NPS 0.  I no longer had a solution.  After an initial heroic effort.

Great support is far more than solving a problem here or there.  And importantly, even if you do a lot of things well — one bad piece of the customer experience can ruin even the best elements of support.

Back at the first SaaStr Annual, in February 2015, we kicked off the day with Aaron Levie from Box — who had just IPO’d a week or so before.  And we ended the day with an incredible combo of the hottest app at that time (and one of the hottest ever), Slack, who likely was around $30m ARR or so … and hadn’t yet added a sales team! 

And David Sacks was kind enough to join us and compare and contrast the Yammer experience to Slack.

Fast forward to today, and Slack is coming up on $2 Billion in ARR, with the majority of its revenue being bigger enterprise deals … with a sales driven motion. 

From PLG innovator at $30m ARR to a top SLG+PLG leader at $1B in ARR.

But here’s a chance to look back at how Slack really was as it began to explode at tens of millions in ARR, but before it had added a single sales rep.

 We were lucky enough to do an incredible compare-and-contrast session with David Sacks of Craft Ventures, coming off founding Yammer, and with Stewart Butterfield, just as Slack was exploding.  Magic.

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So one large category of software spend is on Point of Sale systems. 

The one most of us know best in Toast, because we all use Toast so often when we go out to dinner.  And it indeed has strong market share there.  And perhaps the one we know second-best is Square. 

But “POS” systems and software are everywhere, and are a lot more than just Toast and Square.

One leader in SMB commerce is Lightspeed Commerce, founded way back in 2005.

They are strongest in retail, but also have a presence in restaurants as well.  And their mix of software, payments and hardware revenue drives up the total deal size — but puts a lot of pressure on margins. 

They’re at a $750,000,000 run rate, not that much smalelr than Toast, and are still growing a very healthy 24% (!). 

For a start-up CEO, here’s my list, force-ranked.

#1.  Spend more of your time recruiting VPs and your senior team — and help in general. 

At least — 20% of your time. 

Your life will be much, much, much simpler once you have a great VP for every core functional area.  If you are lacking one — stop hacking it.  Hire the real deal.

Probably, we can stop right there.  This could be 1-5 right there.

But my next best 4, FWIW.

So something quietly changed in the past few years.  Maybe it was the investing craziness of late ‘20 through late ‘21.  Maybe it was VCs not wanting to rock the boat.  Maybe it was a lot of startups just plain not having real boards of directors.

What’s changed is the majority of startups that are venture-backed don’t seem to get the CEO’s and founders’ compensation packages approved by the board anymore.  

At least not through the early and even middle stages.

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Even today, in tougher times, sales rep turn-over is far higher than it used to be. You can’t completely stop it.

But you can mitigate it. 

The key is a great VP of Sales combined with a very fair comp plan — and a promotion path for those that want it.

First, you need a VP of Sales that great reps want to work for. If you cut corners here, it will be very hard to hire and especially retain great reps. You’ll often in fact see your top reps almost immediately leave if you’ve made a mishire at VP of Sales.

Second, you need a comp plan where the top reps make a lot of money. Not necessarily everyone. The “average” rep just needs to be paid market. But if the top 10% of reps make a lot of money — by closing a lot — everyone will see it’s possible.

Third, successful reps making lots of money don’t want to leave a great boss unless they have to, or for a promotion. If you are doing very well as an Account Exec, have it dialed in, and have a great boss that has your back with a product you believe in — it doesn’t get much better. They tend to stay until the VP of Sales leaves, or some other big change comes. Or they want a promotion … which is the next point...

If you’re looking for a marketing strategy to grow your SaaS business, SaaStr’s very own Jason Lemkin has five things you can do today, this week, or this month that always work.

Most SaaS companies need to spend more on marketing.

To save money, many freeze marketing spend, which is cool for a few months, but if it becomes the norm, they won’t have enough pipeline for the rest of the year.

No matter what, you need to do more marketing in the back half of this year.

If you don’t, your teams are going to starve. As the saying goes, “You can’t cut your way to growth.” 

While many of these ideas seem basic, they aren’t done enough. Instead of tackling all five strategies simultaneously, do just one thing better, and you’ll get more leads. 

Skyflow is looking for an Account Executive who will will be responsible for developing, managing, and closing business with Skyflow prospects as well as maintain relationships with enterprise customers

BEE is seeking a Sales Manager who will be focused on ensuring that BEE Pro continues on its rapid growth trajectory by generating new business, promoting the expansion of existing customers, and leading collaboration around insights internally.

• SaaStr 653: 10 Things That Always Work in Marketing with SaaStr Founder and CEO Jason Lemkin: Part 2
• SaaStr 652: 10 Things That Always Work in Marketing with SaaStr Founder and CEO Jason Lemkin: Part 1

• SaaStr 651: Top Mistakes Founders Make with Series A with Black Mangroves, Square Peg, Vertex, and GGV

Listen on Apple Podcast, Google Podcasts or Spotify

SaaS doesn’t actually ever get easier

But if you have 110%+ NRR and get to at least $10m ARR or so …

it’s all up to you

You can go forever if you want at that point

It’s not a mattress business

Imagine you are only growing 40% a year at $10m ARR

That's not great

But if you just go heads down, and keep it up:

2023: $10m

2024: $14m

2025: $20m

2026: $28m

2027: $38m

2028: $53m

2029: $75m

2030: $105m

2031: $148m

2032: $206m

2033: $290m

That looks just fine

One thing a lot of first time founders don’t quite realize when raise VC today is that there has been a “retreat to ownership”

Yes, valuations in most cases are down. A bit at seed, a ton a late stage.

But more than that, top VCs don’t want to cut corners on ownership today.

There’s a type of founder that essentially does 100% of everything for … everyone else

For the startup.

For the team.

For the LPs.

For the customers.

For them.

It really works. It lets us do the impossible.

But it does take its toll.

© SaaStr 2023

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