Recently, I met with a great SaaS founder doing about $1.5m in ARR.  She was telling me about her VP of Marketing who, in the Bay Area, she was paying $95,000.  

I was a bit skeptical.  Because that’s rather low for a true VP out here in the Bay Area (see typical VP Marketing comp packages here).  Something sounded off.

I asked how about this VPM’s lead commit.  Their opportunity commit.  What their core KPIs were.

No lead commit, or revenue commit.   OK.   No real quant goals at all.  Well. You know where this is going on SaaStr.

OK my next question, OK this VPM must be new.  How long have they been there?

“9 months.”

Oh.

Well.  Then, this VPM may be great.  But.  He will never.  Ever.  Never.  Get you leads.  Ever.  

It’s too late.

I see this all the time in marketing hires that come out of non-demand gen roles. But sometimes I’m wrong.  Sometimes a marketing lead with a corporate marketing or even product marketing background actually signs up for a lead or other commit.  For real.

But when they do — it’s always in the first 90 days, or sooner. If a VP doesn’t do something you expect them to do in the first 90 days — then they never will. Not really.

Here’s a list of where I see this.

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You’ll never truly understand how to lead a SaaS company until you’ve done it firsthand. But it always helps to get advice from someone with experience.

Dan Robinson, current Advisor and former CTO at Heap, shares his essential learnings from nearly a decade of building a SaaS business.

Your Job is to Make the Company Win

A CTO may imagine their primary job is to provide technical expertise, lead engineers, and help build the product. While all of these functions are necessary, they are secondary and serve every leader’s main objective, as described by Robinson: “Your job is to make the company win.”

This guiding light is vital for CTOs and leaders to understand because what the company demands from you to win will change as your business scales and evolves. 

Keep Your Identity Small and Flexible

So, you have to get used to letting go since change is constant. But if you attach yourself too much to a specific thing, it will become too closely associated with your identity, and it will be harder to let go as things change and you are needed elsewhere. 

So ChartMogul pulled together some nice data and statistics across its 2,100 SaaS customers and users for its 2023 Benchmarks report.

My favorite Part is this one, that tracks how Top Quartile SaaS companies have grown the past few years.

What it shows it what we all sort of know, but puts specifics on it. 

The crazy growth of the 2020-2021 period peaked in Q1’21, and then just started falling right after that.

Like a rock.

Today, top quartile SaaS companies are still growing 65% annually on the way to $30m ARR, but that’s far from the 97% at the peak in Q1’21.

And realistically, that also means most of them may no longer be venture-fundable.  100% growth from $1m-$30m or so ARR is sort of the bar for venture funding.  If you are doing OK, but have fallen to 65% growth like above, you may still be a top quartile SaaS company … but are fundable no longer. At least, not for now.

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So I wrote a version of this post years ago, about when to think about selling your startup, if you do get an attractive offer.  But then the advice seemed to get stale in the age of the unicorn, when everyone seemingly could be worth $1 Billion. 

Well, that age does seem to be over ;).

Venture rounds post Series A are tough again, IPOs have been on hold for quite a while, and most importantly, multiples are down.  SaaS companies are just valued at far less than they have been in many years.

It’s just all … harder.

And it reminded me of a stretch when over 6 months or so, I met with a series of entrepreneurs that turned down pretty attractive acquisition offers, relatively early in their lifecycle:

• SaaS Co. #1 turned down an $85m offer on $50k in MRR.
• SaaS Co. #2 turned down an $80m offer on $2.5m in ARR.
• SaaS Co. #3 turned down a $40m offer on $2m in ARR.
• SaaS Co. #4 turned down a $100m offer on $1.7m in ARR.

While the companies are different, in all 4 cases — the founders had no savings.  These weren’t second-timers, doubling down.  They didn’t put a few bucks away last time.  They have nothing to their names but their companies.  And still said NFW.

And I’m proud of all of them.  Because all four are great companies, growing rapidly, in great spaces, with great founders.

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