Try Micromilestones to Push Through Slower Growth

When I was CEO at Adobe Sign / EchoSign, I made a big strategic error in Year 1. I set a bit of an insane plan of going from $0m to $2m in ARR in our first 12 months in business. These days that happens sometimes.  Sometimes. But even today, that’s pretty rare to get to $2m from initial launch.

It wasn’t because I couldn’t build a model — the model was sound. The mistake was a combination of not knowing enough about SaaS back then, and also having incredible confidence in the team’s past track record. I thought we had the best of the best and we’d hit the number for sure. There was no doubt in my mind, in fact.

And, of course, we didn’t get to $2m by Day 365. But we did hit almost $200k in Year 1. It wasn’t nothing, and it wasn’t that terrible, relative to the times, in Year 1 from launch. But the team was dejected. It quickly became clear, even with paying customers in our first weeks after launch on TechCrunch, that we’d never hit the $2m plan. And that even worse, we’d probably run out of money because of it. The team fought and squabbled and became dejected.  One founder quit. Another fired another founder without talking about it first.  It was tough.

Vimeo CEO and SaaS veteran Adam Gross and Jason Lemkin, SaaStr founder and CEO, recently hosted a fireside chat at SaaStr Miami, talking about running a profitable public company with $400M in revenue, including themes around: 

• Using a combination of self-serve and sales-led motions
• How to juggle and manage several different ICPs 
• How to avoid over-monetization during tough times
• Who owns “free”
• What to expect from AI in the near future

Adam is an OG in Cloud and SaaS. His first company was Personify and he went on to be a VP of Developer Relations at Salesforce, then hire number 11 at Dropbox, CEO at Heroku, and an investor and on many boards before landing as the current CEO at Vimeo. 

Let’s talk about Vimeo and what it’s really like to make a large public SaaS company profitable in a short amount of time. 

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

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So RevenueCat (where I was fortunate enough to be the first investor) now is the embedded mobile subscription API for 30,000 (!) mobile apps, across 290,000,000 subscribers and $6.7 Billion in tracked revenue.

So they do have interesting data.

Their 2024 State of Subscription Apps Report is out, and here were my top learnings:

#1.  70% of Mobile Subscription Apps Now Offer Free Trials, At Least in Part.  That’s way up from 60% in 2023.

PLG is a work-in-progress for many browser apps, but on mobile, you just have to move faster.  We can see that in the push for even more free trials.

Quiet quitting, feeling sorry for yourself, working 30 hours a week, etc. — that doesn’t really work for a founder. It may feel good in the short term, but it doesn’t work. It doesn’t get you to success.

But you do need to take care of yourself, at least as much as possible.

What works:

• Go hire one great VP. A VP of Sales, Marketing, Product, Engineering, Customer Success. It almost doesn’t matter. But if you hire one truly great one, they will take some of the load off your shoulders. Their first week.
• Take one real vacation a year, and a bigger one every few years. Take a 2+2 vacation if you are truly burnt.
• Find a “late” co-founder. You don’t need to always have a great co-founder on Day 0. You can also find them later.
• Drop one thing. Not everything. But drop one thing that you know matters — but that won’t move the needle.
• Ship a game-changing feature.  This always makes everyone feel better.  Like they’ve finally moved the ball down the field.
• Hang out with some other founders at your stage or later. This may not immediately make you feel better. But it may kick you in the arse a bit. And get you out of a pity hole.

“Doubling Down” is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. We had a great one last time with Peter Specht, Partner at Creandum. Check that out here.

This week we’re focusing on Lucy Deland, Co-founder & General Partner at Inspired Capital!

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

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Solve one of their top pain points, for real — that no other vendor is solving.

If you haven’t sold to the F500 / Global 2000 before, you’ll be somewhat surprised to learn that between the CIO’s office and functional heads, at most huge companies, there is a clear goal to bring in a handful of new “innovative vendors” into the company each year.

In fact, almost all the best run large enterprises know they have to seek out new gems in software to help their businesses run faster and better. Otherwise, their stack and approach will ossify. So they have budgets and often even innovation departments to work with emerging vendors.

But here’s the thing — they can only process so many each year. Each new vendor means a lot of business process change, even for a small deployment.

So that means big enterprises often only bring in 1 new vendor per year per department, and maybe another handful at the CIO level. More than that is too many and too much to process.

So be honest and ask yourself — do you solve a super-important problem that existing vendors don’t solve well? And if so, is there a particular GM/SVP or member of CIO’s Office that cares about this problem?

If so, call them. Email them. Reach out. With the best subject line and pitch you can. No spam, no random mass cadences. Call and email the exact buyer, and aim high.

If it’s an acute problem for them and the pitch is amazing — you’ll probably hear back.

Often fast.

© SaaStr 2024

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