So RingCentral is a quiet SaaS leader that has been around for a long time, since the early days of SaaS.  It’s built its way into an enterprise contact center leader and has now crossed $2 Billion in ARR, growing a mature but still steady 16%. 

And while it’s not GAAP profitable, on a non-GAAP basis, its margins are way up to 17%.

So what’s that worth in 2023?

Sigh.  Only $2.8 Billion.  RingCentral, with all that momentum and improved efficiency and margins, is only worth 1.3x ARR.  Now, RingCentral also carries significant debt, so it trades at more like 2x enterprise value.  But that’s still mighty low.

Revenue multiples are brutal out there for many.

So a recent SaaStr survey confirmed what I’ve experienced over the years:  outsourced SDRs are tough to make work. The idea is appealing, but hard to get right in practice.

It would be so great if we could all outsource sales, sales development, sales operations, and more. 

It really would be great.  It’s just hard in practice to outsource something you don’t already know well yourself.

Personally, I’ve seen it sort of work a few times — and that’s why I added “sort” as an option, and 26% of you also said it had sort of worked:

We used an experienced outsourced team at SaaStr itself to bring in new sponsors, and they added about 8% of new revenue.  Worth it, but the margins were lower than core customers, and it took up a lot of bandwidth.

I’ve invested in 2 startups that micromanaged outsourced SDR teams to some success.  They managed the resources, wrote the scripts, reviewed the lists, etc. Still, neither stuck with those agencies after 4-6 months.

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In this week’s episode of CRO Confidential, host Sam Blond wraps up the founder-led sales series with one of the most accomplished sales leaders in the world, Brendon Cassidy. 

Cassidy was Blond’s VP of Sales at Echosign and, before that, was one of the first sales leaders at LinkedIn. Post-Echosign, he was the first sales leader at Talkdesk, valued at $10+B. Cassidy is now a co-founder at CoSell, the relationship platform designed to organize your intro efforts. 

The point of CRO Confidential is to help startups acquire customers, and Cassidy provides a unique perspective on founder-led sales as a current founder and highly talented sales leader. 

So what secrets has Cassidy learned over the past decades of building businesses and acquiring customers? 

Let’s find out. 

I think it boils down to 2 key factors:

Someone that is both very good at, and better than you, in several key functional areas. 

If you are good at coding, she is good at sales and customers.  Or whatever.   That together, the two of you have all the key functional areas covered decently, at least initially (Engineering, Product, Sales & Customers, Marketing).

AND

Someone you want to sit down at the end of the day, each day, to talk about the day.  When I had this, I excelled at every level.  When I didn’t, I still did OK.  But was also sort of lost.  It’s just way, way, way too hard otherwise.

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In the first quarter of 2023, global venture funding fell to $59 billion, down from a peak of $181 billion in Q4 2021. Deal sizes are falling, late-stage rounds are down by 45%, and funding rounds are taking longer to complete.

Despite the challenges, there is still some good news: founders who launch companies in this market may be rewarded with a specific set of advantages. 

Managing Partner at Zelkova Ventures, Jay Levy, believes starting a business now presents a unique opportunity.

“It is a great time to launch a company…talent is more accessible, competition is reduced, and frankly, you’re forced to focus on economics and building a sustainable enterprise.”

Founders embarking on seed or early-stage funding rounds in this competitive market must pay special attention to investor relations, the art and science of communicating with and managing your investors. In a special workshop session, Jay Levy shares insights into successful founder-investor relationships and why they are so crucial to the success of your startup.

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