64% of You Are Starting the Year Burnt Out

So I have a ton of empathy overall, but burnout?

Sort of. I do have empathy for founders, execs and ICs that truly left nothing on the field for 3, 4, 5 years. That truly burns you out. But even there, my empathy has limits.  Because while it’s real, you gotta get help as a founder, exec or leader. You have to recruit a few great VPs and folks under you. 

That’s the only way to avoid true burnout.

Still, that burnout I get.

But the fact that these days, everyone seems burnt out? Even folks in many cases with relatively low stress jobs, often that honestly take 20 hours or less a week to do?  I’m not sure I have total empathy here. But it doesn’t matter.

It’s time to recognize it — as a fact.

64% of you say you are burnt out, and in fact, 50% of you are more burnt out than last year.

Here’s the thing.  I’ve tried certain tactics myself that I thought would help. I suspect one reason these “fixes” don’t really seem to help is burn-out is also combined with some ennui among many in tech.  A feeling of discouragement, that they aren’t getting what they wanted, the title, the comp, the lifestyle, etc.  That may be the root cause of a lot of this burnout.  Not really the hours or pressure.

There will be a lot of spirited debate between marketing + sales in the lead hand-off process. Do you have MQLs and then … SALs? (Sales Accepted Leads)? Does sales get to reject leads from marketing? How long do they have? Etc. etc.

As you scale, and refine this, you’ll have more and more nuances here in your lead qualification process.

What matters most–maybe even all the way to $10m ARR–though, I’ve found, is a clear SLA where all leads need to be followed up on.

As you begin to get to even $1m-$2m in ARR, reps will naturally start to focus on the “hot” leads. Maybe even earlier. That’s natural.

But if nothing else, you need an SLA. A firm process where every lead gets touched within X minutes or Y hours. And is then followed up again with X days. And this is key. If those criteria aren’t met … the lead is automatically assigned to someone else.

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This is the time of year when I have a few “Woe is Me” conversations with founders:

• “It’s so hard”
• “It’s not our fault”
• “Well, we’ll try”
• “No one wants our product”

There’s always some truth in this, especially how hard it is.  Every founder that is successful knows how hard it is.   Heck, the CEO of $1 Trillion+ Nvidia recently said he wouldn’t be a founder if he had it to do all over again!  Yes, it’s hard.

It’s just, the ones that feel sorry for themselves — those ones never make it. 

Not in my experience at least.

If that’s you, first, sort of keep it to yourself.  At least for the most part.

Being vulnerable has its place, but not if it demotivates the team.  I’ve been there myself, and felt it was almost hopeless — with both my startups.  I shared those feelings with my cofounders, and a very old friend.  But that was about it.

Second, pick yourself up off the ground and — Stop.  Stop Feeling Sorry For Yourself.

It’s OK for a week or two, but it doesn’t help after that.  Even if you have to act a bit — and CEOs always have to act a bit — act more confident.  Show everyone the way.  If you do, you might just be surprised that not only do they follow.  But they find a way to make it happen.

And third, stretch your cash.  Find a way.

You can’t make radical changes in just a few months.  You always need 14-18 months to fully execute a plan in SaaS.  Find a way.  I had to go a year without salary after we were venture funded to make this happen.  It was hard.

It was worth it.

I’ve been investing long enough — since 2013 — to see some higher-level patterns emerge.  In the end, the best founders with even a hint of true traction end up winning.  I’ve seen that now across 5 billion+ exits.  They find a way.

But … it sure helps if you make it easier on yourself. 

If you make fewer unforced errors, in particular.

And one potential subtle unforced error founders tend not to see is picking VCs that don’t trust each other … at least when they don’t have to.

What happens when you have multiple VCs that don’t trust each other?

Two meta-thoughts:

1. First, you have to decide if you are going to “hold the line on burn” after a fundraising. If you plan to — tell everyone. They may not be 100% happy, but they will get it. Is your goal to hire 100 reps next week and 10x the marketing plan? That’s one approach. But if you don’t communicate a burn budget, everyone will expect all budgets to grow overnight. Another approach is to use the capital as a “buffer” so “we have plenty of runway”. If you communicate you are doing the second approach, most folks won’t expect so many out-of-turn raises. They’ll get the goal is to de-risk the company, not to grow the burn rate.
2. Two, sometimes — many times — at least some people do deserve a raise after you close a round. Are folks taking under-market salaries? If so, marking some up closer to market after each round can make sense. My rough rule is after you raise $2m, the founders shouldn’t work for < 50% of market. And after you raise $20m, most employees will begin to expect to make full market salaries. Between those phases, a discount to market may (or may not) still fly. But the % will need to come down over time.

I’ve been investing long enough now to see start-ups fall out of product-market fit. When we started blogging on SaaStr.com a decade back (!), I didn’t really think this happened.  I thought folks got out-sold, lost to the competition, and even failed to evolve.  But I didn’t get that apps with happy customers, and some real traction, could fall out of product-market fit.

But they do.

Start-ups growing at fast rates at $1m slow down at $5m-$10m ARR frequently. One reason is low NPS and a poor product. That’s the #1 cause I’ve seen.

But sometimes, your customers are happy. They keep buying more from you, and the net retention is positive.  The NPS is higher.  You just … start winning fewer deals.  Far fewer deals.  Or sometimes, you still win a lot of deals.  You just don’t see the leads growing, even though the market is.

Both cases are signs that you’ve fallen out of product-market fit.

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