Hey everyone -

We've got a Big (Party) Announcement to make .. 

Cheat Codes who have been performing festivals and shows all round the world will be taking over the Big Party Stage at SaaStr to perform on Thursday, September 7th! 

Los Angeles trio Cheat Codes is an inescapable musical force blending electronic, dance, pop and country, Their total stream tally eclipses a staggering 6 billion plays. Get ready to dance at SaaStr to “No Promises” [feat. Demi Lovato], the gold-certified “Feels Great.” 

We're so excited, to have Cheat Codes are the Big Party this year. It's going to be EPIC. 

Don't miss out on the Big Party at SaaStr Annual! It's included in an All-Access Pass.

So I don’t have a strong emotional attachment to the geo debates: 

Is SF Back?  I say, sort of — at least for founders, VCs and execs.  

Is Miami a tech hub?  I want to believe, and yet …

for SaaS …  Austin?  Maybe.  

Utah?  Utah is clearly a SaaS powerhouse, but not necessarily a place a lot of founders move to to get a SaaS company off the ground.

Look, I love it all, all these tech centers. I just want to know.

What’s the headquarters of SaaS today?

Cyberspace? Zoom? Hayes Valley?

As part of the latest Cloud 100, Bessemer collected data on the top 400 SaaS and Cloud companies surveyed, and found:

• 52% are based in California, mainly the SF Bay Area
• 16% are headquartered in New York
• and 4%-5% in each of Florida, Texas and Massachusetts

The traditional practice is that VC funds have the startup pay both their fees and the VC’s legal fees in the financing.

A lot of folks get upset about this — but my advice is Be Zen and let it go. It doesn’t matter in the end.

It’s just a condition of the funding.

If you are saying raising a $2m round and you have to pay $30k in the VC fund’s legal fees, well … it’s like you raised $1.97m.

So be it.  Move on is my advice. 

Why is this the practice? In part because while VCs do have a fair amount of “management fees” to pay for expenses, those fees also pay their salaries. So the money to pay these legal fees doesn’t come out of the corporate bank account in many cases. It comes from the VC’s own pockets.

In a truly tiny financing (<$500k-$1m) or SAFE notes and the like, however, any investor-side legal fees are often just paid by the investors. Not always but often. There, the thinking is, the amounts both should be small, and can be material relative to the round size.

This edition of the SaaStr Daily is sponsored in part by Mission Cloud

Whether you're getting started on your generative AI journey, or you're scaling your LLMs for business growth, Mission Cloud is here to help.

We’re kicking off a new series on SaaStr on what top SaaS and Cloud leaders (CROs, CMOs, and CTOs) use in their tech stack.

First up is Miguel Carranza, CTO of RevenueCat. 

RevenueCat (where I was lucky enough to be the first investor) is the leading mobile subscription management API and literally processes more API calls a day than Stripe.  It’s the nature of mobile.

So I thought give that volume, he’d be great to tell us about his stack first.

The blog Healthy Competition put together their favorite Top 10 SaaStr Tips for Founders & CEOs from all our content.

It’s a great list and I thought I’d put it up here and add to it a bit:

1. The best CEOs respect & understand the competition cold.  Even at the earliest days, the best founders know the competition cold, and can tell you where they are strong as well as weak.  They don’t simply mock them as the old guard.  After all, the Old Guard often has $1B+ in ARR.  They’re doing something right.  You can’t win if you don’t truly and clearly understand the white space you’re wedging into.
2. Build relationships with competitor CEOs.  I’m not sure I’d put this in my Top 10, but definitely in my Top 100.  Don’t hide from the other CEOs in the space.  You never know where it could go.  Combine together, down the road?  Avoid a big conflict?  Who knows.  No downside, potentially real upside.  The best veteran CEOs go out and meet their top competitors all the time.
3. If you’re not growing at least as fast as competitors, it’s a “you” problem. Don’t blame the market.  Ok this is such an important post and learning that not enough pay attention to.  If you aren’t growing faster than your bigger competiton, you are falling behind.  Even if everyone is OK with the absolute growth rate.  E.g, if you are at $10m ARR growing 50%, and the competition is at $50m growing 40% — you are growing more slowly, not more quickly, that they are. Because they are adding +$20m in bookings a year, and you are adding just $5.  You gotta know where you stand here to challenge yourself.

In my experience, no matter what anyone says, most sales professionals are given three chances:

• 3 sales cycles to ramp up for an AE.
• 3 quarters for enterprise / field reps (even if they close nothing the first 6 months).
• And … 3 months for SDRs to scale up and deliver high quality leads to AEs.

You’ll usually know faster than that if they are going to make it … much faster, really. You’ll know after 1.5 chances. You’ll probably know in 30 days.

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

Win customers by creating compelling offers with flexible pricing, billing, and bundling options with end-to-end automation. Learn more at the SAP booth in the Sponsor Hall, Hanger West! 

As time goes on with your startup, then your scale-up, then maybe even your public company … you will have to deal with disputes.

At first, they will be rare.

Then more common.

Then they will escalate, and in many cases, you’ll be pretty sure you are on the right side of a series of disputes,

• A customer that doesn’t want to pay a signed deal
• A VC that backs out of a term sheet
• An employee that was never even really there that sues you, or threatens to
• A sales rep that sues for commissions on deals they never even closed
• A partner that threatens you for not paying rev share on deals they had nothing to do with
• An ex-founder that comes out the woodwork and wants 10% of the company
• An advisor who claims they are owned a pile of options
• Your first patent threats
• Your first IP litigation

It will all happen to you, or at least most of it over time. And it just scales. It starts with thousands at stake, then tens of thousands, and later millions.

Spencer is coming back LIVE to 2023 SaaStrAnnual.com on Sep 6-8 in SF Bay to chat more about this and more.

Ahead of that, I think this might be my #1 favorite SaaStr session ever on the mistakes and learnings going multi-product.

“Spenser Skates is the CEO of Amplitude, one of the leading customer analytics services for enterprises and product makers. But getting customers like Twitter, Instacart, Match, and IBM didn’t happen overnight. Spenser lays out the mistakes young companies will often make as they grow, and how he positioned Amplitude for growth and success. He found these lessons essential for founders to learn on their way to $100 million ARR and beyond. His SaaStr Build session was so packed with information that we had to split it into two episodes. Look for Part 2 on Friday!

© SaaStr 2023

644 Emerson St. Suite 200, Palo Alto, CA, 94301

If you'd like to stop receiving the SaaStr Daily, click here