Seed is Broken But There's More Seed Funding Than Ever

Ok the title here is a bit dramatic, but certainly seed investing is in an odd place in 2024. Public valuations are still at a fraction of their 2021 peaks, but seed rounds are more expensive than ever.

Is it sustainable?

Harry and Jason did a deep dive on this and so much more here.

So we’re almost there!! 

2024 SaaStrEuropa.com is June 4-5 in London!

Join us for 2+ fun-filled days, great parties, 100s of braindates and workshops, 1000s of connections, and so much more!  And meet everyone from Harry Stebbings to the CEO of Gong!

Last chance to save $100 on the final tickets. 

So job tenures do seem to be shorter than ever, from the SDR level all the way to CRO and CMO. Layoffs are part of it, for sure — but so is voluntary attrition.

It’s super frustrating to many founders. In our quiet discussions, it’s often one of the first things that comes up. “We pay top of market, we have a great culture, we have years of runway, and great logos and problems to solve. Why do folks leave?”

I’m actually going to suggest actually — more folks should leave, faster. Yes, faster.

The world has changed since WFH started. It’s changed I think in more ways than we realized. Our relationships to work are just different.

So as part of a learning experience, I’ve asked dozens of executives who left roles … What Happened?

Why not? If they truly are at that level of ownership, responsibility, leadership and buy-in.

Co-founders are often defined as the couple few folks who sit around the coffee table, dream up the idea, write the first line of code, get the first beta customer, etc.

And there really can just be a few. But even that can take some time. And even after that first customer or two, it’s still … early. You can still go find a co-founder if you don’t have a great one yet. You can see above how Spenser Skates, CEO of Amplitude, took over 18 months to convince both his co-founders to join.

Monday has gone from $7m in 2017 to almost $1B in revenue today — wow. But almost no one would fund them in the early days, and they did it in a seemingly very crowded category.  Did monday.com’s founders feel like they’d be 100x bigger in just six years since that first SaaStr conference they attended?

Eran Zimman, monday.com’s co-founder and co-CEO came to SaaStr Annual to share his secrets to scaling and growth in an unpredictable market.  And come see 200+ more sessions like this at 2024 SaaStrAnnual.com on Sep 10-12 in SF Bay!!

monday hasn’t missed a beat, but before we dive into their secrets, let’s first learn where it all started and what they do today.

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The biggest red flag I’ve found is when the “insertion point” you think is 10x+ better than the competition … doesn’t end up being something customers highly value once you launch it.

Sometimes the 1.0 is cool, oftentimes it is clever, but many times it just isn’t quite the innovation customers are willing to pay for. It’s often in the ballpark, and sometimes even close to a sellable product, but not quite there yet.

There are 10,000+ SaaS vendors today, maybe more. How do you really break through? Improving something alone is not enough.

RevenueCat is the dominant solution to manage subscriptions in the mobile world.  Over 30% of U.S. mobile apps with a subscription use their API/SDK, and they have a massive data set.

B2C customers are their bigger base, since that’s bigger on mobile than B2B. But many of the largest SaaS and B2B vendors, from Notion to other leaders, use RevenueCat as well to manage mobile subscriptions.

One key data point I’d missed is … how many paid customers that cancel … come back later?

We all know this happens in SaaS and B2B.  It just takes sooooo long.  The answer:  12%.

Building a $100M+ ARR business is no easy feat. Cloudinary VP of Developer Experience Sanjay Sarathy shares his journey to more than $100M and the lessons he learned along the way for building a PLG motion and an Enterprise sales motion.

Let’s first start with how Cloudinary came to be. It was founded by three developers who owned a consulting firm previously, helping startups come to market. They noticed how often they were manually editing and cropping images. One of the partners had an idea; you can see the origin email for Cloudinary below.

Overcharge if the customer is big, i.e., >$50k-$100k a year o nor so in ACV.

Undercharge if the customer is small by revenue.

Why?

You’re learning very quickly here if you are enterprise or mass-market in the early days, where your sweet spot is, and most important, whatever segment of customers you can actually serve and close. You need to learn quickly if you are going to do fewer big deals, or tons of smaller deals.

If your product and business is a volume game, get the volume going. Charge a super cheap price early to take friction out of sales, and to get to 100, 200, 500+ customers fast.  You want to remove friction.  Charging the low end of normal works best here.  Look at the apps out there most similar to you, and just stay in that range. Maybe the low end of that rage, but that range.

But if you’re going truly enterprise and BigCo early — don’t sell too cheap. Here, you’re selling a solution to a big problem. Not just a tool or a cheap fix. Here, you need to understand how much value you can provide. So go in high. And overdeliver when you win. This will drag you upmarket, and you’ll learn. Which is key. You want to learn as quickly as possible.  Price way too cheap, and you will just confuse the prospects.  And you’ll end up with false signals.

Don’t be crazy.  Don’t ask for $1m a year unless you have the track record to prove it (some have done this, see, e.g. Veeva below).  And don’t charge $4 a month for an SMB product.  That’s too low and doesn’t remove friction.  It adds it.

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