The Latest from SaaStr: 5 Interesting Learnings from Zscaler at $1.5B ARR

SaaStr Annual 2023 is the world’s largest SaaS festival-style community event on the planet:

• 3 full days with 100+ tactical sessions from world-known founders, new voices, and up-and-comers
• 250+ speakers from the best SaaS companies across the world
• 2000+ networking meetings, AMAs, mentoring sessions, 1-on-1s, and roundtables
• 1000+ VCs in attendance, with 1:1 Meet a VC matchmaking
• 150+ of the best sponsors who are driving innovation in Cloud

SaaStr Annual is THE event of the year, helping you grow your business from $0 to $100M ARR with less stress and more success.

But it's not just about the speakers. SaaStr is also known for its unparalleled networking opportunities. Whether you're looking for your next big partnership or simply want to meet like-minded individuals, this event is the perfect place to make meaningful connections with SaaS leaders from around the globe. 

Secure your tickets (and your front row seats) before prices go up July 31st. 

Quiet but Mighty SaaS security leads Zscaler just keeps on growing at epic rates at $1.5 Billion in ARR — growing a stunning 46% even at that scale. 

And profitably (or at least with strong operating margins). 

And with high NRR. 

And with … well just about everything. 

It’s the full package.

Yes, times are a bit tougher out there.

But Zscaler has mostly shrugged it off by providing a mission-critical solution with strong demand — cyber attacks are only growing and growing, and stopping them is seen as a “must have”.   

And it’s been rewarded for it.

It varies by industry — and by the focus of the company. But here’s a deep dive on the average deal size for many top SaaS companies I did here.

You can play with the data here.

Some of those numbers have changed a bit as the companies have grown, but not that much.

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

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Founders of 2023 right now are asking themselves, “What does it take to raise money right now in this uncertain market environment?”

Peter Specht, Partner at Creandum, shares a data-driven perspective and real-time insights into the market of very recent rounds and current VC expectations. 

Unfortunately, raising money isn’t the same as it used to be. Specht walks you through what has happened in the last 12 months and the best practices for today.

A very few SaaS AEs can make $1m a year. It’s hard to pull off.  But — it does happen regularly. 

It happens because they are (x) in the top 1% and (y) at a SaaS company closing tens of millions of new bookings or more. 

It’s usually not possible before a SaaS startup crosses $20m-$40m+ in ARR, because that one AE has to close $3m-$5m or more in a year themselves to take in a $1m commission. 

You need a big enough SaaS business for that to be mathematically possible.

But almost every sales-driven SaaS company, at some point, maybe after $40m or $50m in ARR, and sometimes earlier, has their first sales rep that makes $1m+. 

At least once.

In fact, personally, I’ve been in the room three times at other SaaS companies the day it happened, and seen it multiple times after.

In fact, I’ve had multiple sales execs work for me make $1m at least one year.

No.

In the old days, 30% in your friends-and-family round was pretty common.

It may become common again, as times are tougher for many these days in venture.

What VCs will want to make sure is that:

• The founders are adequately incented going forward
• The angels before them, as a group, don’t have control or blocking rights over future financings.
• The cap table is “normal”

So as a rough rule, if you’ve sold > 50% of the company before any traditional venture money comes in, and/or given up any big control rights … then most VCs will want to restructure things, one way or another.

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

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Love him or hate him, Nick Saban is the most successful college football coach of the current generation. Winner of 3 out of 4 straight national championships.

And how often is he recruiting?

Every. Single. Day.

In fact, every single day he and his team go into their Recruiting War Room, and analyze every single possible recruit coming up the next four years.  And he seals the deals himself. All season long, off-season. 50/52 weeks a year, every day.

I’m going to suggest to you that, at least from Initial Traction until Initial Scale (say $1m ARR until $10m ARR) — this is the single most important improvement you can make to your SaaS company:  To recruit every single day.  

20% of your time.

The equivalent of one full day a week.

1. SaaStr Annual: SaaStr Annual is one of the largest SaaS conferences, attracting thousands of attendees, including entrepreneurs, investors, and industry experts. It provides insights into the latest trends, best practices, and networking opportunities in the SaaS space.
2. SaaS North: SaaS North is Canada’s largest SaaS conference, featuring keynote speakers, workshops, and networking opportunities, aimed at promoting the growth and success of SaaS companies in North America.
3. Dreamforce: Although Dreamforce, hosted by Salesforce, encompasses a broader scope than just SaaS, it remains a significant event for SaaS professionals. It brings together industry leaders, innovators, and customers to showcase the latest products and technologies.
4. SaaStock: SaaStock is a global conference series dedicated to SaaS companies and entrepreneurs. It offers valuable insights, networking, and opportunities to learn from successful SaaS founders and investors.
5. Microsoft Inspire: Microsoft Inspire is an annual event for Microsoft’s partner community, which includes SaaS companies building on the Microsoft ecosystem. It provides updates on Microsoft’s products and strategies and fosters collaboration among partners.

© SaaStr 2023

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