A non-exhaustive list:

Not listening. Too many reps just talk and talk, trying to get the pitch out. They miss a chance to learn what problem the prospect actually wants solved.

Not being an expert in the product. So many times I see this. In SaaS, the prospect is expecting the sales rep to be their guide, their expert on the product.

When they don’t know the product cold, all confidence is lost.  Maybe reps can get away with this a bit when they work for a clear #1 in the space, but beyond that, it’s a deal killer.

Not designing a true solution to their problem. Related to the prior 2 points. The best sales reps listen and hear what the prospect’s problem is in the space — and use the product to design a solution.

To solve the customers’ problem. Not just do an inflexible demo and send a price quote. An AE that can solve a top problem for me is worth their weight in gold. Truly solve it.

Pushing the most expensive edition too hard. Smaller and midsize companies like to start small, many times.  Push a prospect out of the comfort zone and the deal often just … never closes.

Over-qualifying. Yes, not every lead is suitable for every product. But sales reps that over-qualify alienate prospects that really would buy.  If they reached out on their own, the interest likely is genuine. No one enjoys just window shopping for SaaS apps.

If I were starting today — and in a sense, I’m running this experiment in many ways with SaaStr — I’d ask myself 3 questions if I had the option to raise seed funding (many don’t):

• Can we make it 24+ months with the team we need to hire without funding?
• Can we work even harder, and get to $2m+ ARR growing > 100% without funding?
• Can we work even even harder, and get to $10m+ ARR without funding?

If we could answer Yes to all 3 questions, I wouldn’t raise outside capital. It’s so much better, in an ideal world, to skip several rounds of dilution.  Especially if you have the time. The extra time it can take if you bootstrap.

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We’ve talked a lot on SaaStr about not screwing up that VP of Sales hire.  Done right, it will accelerate your company to the next level.  Done wrong — you can lose the better part of a year, and half of your last round of capital.

And we’ve talked a lot about the trade-offs in the hire, including how to think about Stretch VPs … the ones that haven’t quite done it yet, but working for you is their shot.

The reality is, most of you are going to hire a Stretch VP for your first VP of Sales, or at least, your first VP of Sales that works out. More on that here and here.  Otherwise, you’ll probably be stuck with a Failed VP, or someone from Too Big a Company that never did it, etc. etc.

Once you’ve made the hire, then you have to make sure you’ve got it right.

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We kicked off a new series that productized something we’ve been doing for 10+ years at SaaStr … getting top leaders to share their mistakes.  So the rest of us can get to $100m+ ARR faster, with less stress and more success.  

We’ve done a ton of this content over the years, but never on a consistent basis.  The first was with Nick Mehta, CEO of Gainsight here, and it was very popular.  Next up was Jason Cohen, founder of $100m+ WP Engine. 

Now Andy Byrne, CEO at Clari, adds his learnings! 

He joined us some time ago at our 2017 Summer Social, when Clari was much smaller, you can chat out that great session together with the founder of Medallia below.

First, bear in mind, start-up fundraising has gotten a lot harder than it’s been the past few years.  A lot harder. The latest Carta data summarizes it well:.

But while raise VC capital has gotten harder, the rough rules in B2B / SaaS haven’t really changed:

Seed Round:

• $10k-$100k a month in revenue
• Growing 150% annually or more
• Strong founders, including strong technical co-founder

There are two great SaaS companies I’m working with right now.  Both have a sales-driven process, selling to SMBs.  Both have a CAC payback that is very short — around 90 days.  Both have roughly the same number of employees (roughly 50).

One is cash-flow positive.  The other is burning a ton of cash.  A ton.

How can that be?  What are the differences between these 2 seemingly similar SaaS startups selling to SMBs?

• Churn.  The higher the churn, the lower your CAC needs to be to survive.
• NRR.  The cash-flow positive one has 130% NRR from SMBs and has several years of existing customers to renew.  Renewals and 130%+ NRR are very cost-effective drivers of cash flow.  It just takes a few years for the power of renewals and a high NRR to really kick in.
• CLTV Measurement.  Each of these two startups measures CLTV value differently.  Do you include upsells in Year 1?  Projected revenue?  This can flatter your CAC metrics.
• Including — or not including — customers also acquired for free, in your CAC measurement.  If you include customers acquired outside of paid spend, the blended CAC goes way down!

Below is a list of ancillary events happening during SaaStr Europa either hosted by SaaSt, one of our trusted sponsors or friends.  Note there will be on-site parties every day, as well as an on-site pub, so there’s plenty going on at the venue as well!

Monday, June 5th:

• The team at Paddle is hosting a breakfast meetup to kick off the week. Request your seat here.
• Zendesk and Crane Ventures are hosting an AMA at Zendesk’s London offices from 12-2.  Sign up here.
• SaaStr Europa Opening Reception from 3-6pm hosted by SaaStr at Tobacco Dock. Get your Pass and join Jason and the other early birds to attend (and avoid the reg rush on Tuesday morning) here.
• Dreamdata is hosting a rooftop bar mixer on London Bridge (!) from 6:30-8:30pm.  Sign up here.

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