It seems like start-ups are all about innovation. And they are.

But how innovative should you be as a founder? Should you do something brand new? Or just reinvent a huge, existing category?

• Zoom reinvented WebEx, GoToMeeting, etc.
• Slack reinvented 100 versions of chat, including Hipchat, Basecamp’s product, etc.
• Salesforce reinvented CRM for the web, but the paradigm was as old as software can be.
• Datadog reinvented observability and more for the Cloud, but New Relic and others were already darlings here
• We now have about 1,000 SaaS payroll apps, many of which are unicorns.  They are remixing things, but in one of the oldest categories there is.

Now that there are 100+ public SaaS companies and unicorns, we can finally answer a question — is it better to start a company that remakes an existing category, or that creates a new one?

Yes — at least at first. Especially if you haven’t done a lot of sales yourself.

Boy sales is hard. It’s being told No a lot.

It’s have literal, or virtual, doors shut on your face. It’s figuring out how not to be a pest — yet still be a pest.

It actually doesn’t get that much easier over time, either. Yes, once you have a brand, and inbound leads, the engine gets more established. But then you raise the quotas, and sales is still hard. And then, the easy accounts are already in play for the SDRs. So outbound gets harder, too, later often.

• So first, find great salespeople. People that can push through all the NOs. That can make prospects love them, and your product.
• And second, value the best sales execs. The best ones are worth so, so much. Don’t overpay them as a % of the revenue they bring in. But if they bring in a ton — make sure they make a ton.
• And third, give them a career path. All those NOs? One incentive to push through is the chance for a promotion.
• And finally, realize once you get a great pitch down, and really do your homework, and really add value — you’re not being a pest.  You’re helping.  But only if you do it really well.  Prospects have problems to solve.  We all do.

This edition of the SaaStr Daily is sponsored in part by Infinicept

Learn how to earn more revenue by embedding payments into your solution, without doing it all yourself.

A few years back at the second SaaStr Annual, we put back-to-back a seemingly very different set of speakers, Jeff Lawson CEO of Twilio and Peter Gassner of Veeva.

Both are two of the most impressive and inspiring public SaaS CEOs — but their products and companies couldn’t be more different.  Veeva sells eight figure deals to a very small number of very sophisticated customers, while Twilio has a huge long tail and starts at $0.0085 a minute. 

But I wanted to pair them for several reasons.

One was to get a sense of what the bar was to pull off a successful SaaS IPO these days (answer = oh man, very high).  Another was to see examples of some relatively capital efficient companies (Veeva raised less than $10m in VC money on the way to $6 billion in value!).

And a third key point was to learn about a subject I think about a lot, which is “When is the right time to add a new product?”

So Twilio is perhaps the top “hero” SaaS company that has taken the biggest hit from the crunch of 2023.

Twilio dominates many of its spaces and segments. It’s the Stripe for Communications. But that’s also a segment of the market when customers have cut back heavily.

As a result, growth has radically slowed for the first time ever, to just 15% at $4 Billion in ARR.

This edition of the SaaStr Daily is sponsored in part by Notion

Notion combines project management with your docs and knowledge base, so you can stop jumping between tools, and stop paying too much for them too.

Scaling a tech startup doesn’t come easy, and when you’ve tried all the conventional SaaS advice, it might be tempting to give up. But sometimes, the road less traveled is the path to success. 

In this workshop, WorkRamp CEO Ted Blosser shares how to overcome setbacks, trust your customers, and defy traditional wisdom to carve out a path to growth.

© SaaStr 2023

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