Hey SaaStr Community,

I know a lot of folks in tech are still frustrated in 2024 — and feel they’re being asked to do more with less. But is it really true?

Actually, yes, it’s true. You are being asked to do more than in years past.  And it’s going to likely be permanent.

Because beyond WFH, RTO, and all the tactical changes of the past few years, the biggest structural one really is — The March To $400,000 in Revenue Per Employee.

Many SaaS and Cloud leaders are already there — especially the highest performers, from Cloudflare to Canva to ServiceNow.  The rest are marching there.  Even SMB leaders like Monday are there.  Monday just crossed $800,000,000 in ARR with less than 2,000 employees.

In fact, almost every SaaS leader at scale is hitting $300,000 in Revenue Per Employee at the pre-IPO phase. In 2021? It was half that or less. $100k in Revenue Per Employee was pretty common for Unicorns, or even far less.

So you’re hiring your first few sales reps in the early days?  Before you have a great VP of Sales? It’s an interesting time. Leads are precious, everyone is a team. So you need a very certain type of sales rep.

Let me give you a checklist of a few signs they won’t work out:

#1. They’re Late

Many will challenge me here, but if they’re late to the interview, they’ll be late to customer calls, too. Don’t make the hire. If they send you a professional message ahead of time, that they need to push? That’s fine. If they just show up at 2:05 onto the Zoom though, don’t make the hire.

#2. You Wouldn’t Buy From Them

A classic SaaStr theme, as true today as it ever was. If you honestly wouldn’t buy from them — well neither will your prospects. At least not in the early days. Not during founder-led sales.

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So at $3.1 Billion in ARR, Snowflake finally feels a bit … human. Like a truly epic, incredible, generational tech leader. But perhaps, no longer like it’s from another planet altogether.

After years of metrics (170%+ NRR) and growth (110% at ~$1B ARR) like we’ve never seen before, it hasn’t been immune from macro slowdowns, and now is growing 32% at $3.1 Billion in ARR. And generational transition comes for all of us, eventually. Legendary CEO Frank Slootman has stepped down, and up, to Chairman.

All that is still incredible. Growing 32% at $3.1 Billion in ARR still means adding +$1B in new ARR a year! But growth and NRR are starting to normalize at scale. For the first time ever.

So we recently did a SaaStr survey on if folks would pick the same VCs if they have to do it all over again.

The learnings aren’t surprising, but they are interesting:  only 23% would pick the same VCs for sure.

Now there is a lot of nuance beyond this poll.  The relationship between investor and founders should be supportive.  Interests truly are aligned, at least 90% of the time.  But there are frictions.

Many are natural, e.g.:

• Some founders are way too wasteful and spend too much, too quickly.  Sadly, this became commonplace in 2020-2022.  The “go down with the ship and spend it all” mentality can lead to a lot of friction.
• Some founders expect their VCs to bail them out.  It doesn’t work that way.  A second (and third) check has to be earned.
• Some VCs just are way too patronizing.  Many.  This rubs almost everyone the wrong way.
• Some VCs are manipulate around outcomes.  Pushing founders to sell, or not sell, or raise more, or not raise more.
• Many VCs now are grinfrackers.  They tell you everything is great, or fine.  No VC wants to be labeled un-founder friendly now.  This leads to tough conversations happening far later than they need to.

Etc. Etc.

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.

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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.

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. 

• SaaStr 730: How to Price and Package AI SaaS Products with Sandhya Hegde, General Partner at Unusual Ventures

• SaaStr 729: 6 Questions Founders Should Ask Themselves to Drive Value from Generative AI with Base10 Partners

• SaaStr 728: How to Double Your Magic Number and Increase Your Go-to-Market Efficiency with Sapphire Ventures

Listen on Apple Podcast, Spotify or Google Podcasts

Founders notice everything.

Every bug,

Every screwed up deal,

Every employee that didn't give it their all,

Everything every competitor does,

Every moment that ever mattered.

Everything that matters.

Just make sure you keep most of it to yourself.

Apologies in advance

But in a startup, you don't get kudos for doing the bare minimum

You don't even get kudos for hitting plan

You get kudos for stepping up

To be a great CEO,

You have to enjoy telling certain stories over and over again

Sometimes 100s of times

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