So is “outbound dead”?

This has become a hot topic and almost a meme across LinkedIn and social media in SaaS. There’s no question for most of us, outbound is a lot harder than it was in 2021. And that the standard, automated cadences and break-up emails generally aren’t performing all that well.

But does that mean that high quality, truly value-add and tailored outreach to a prospect that’s in market or will be soon … doesn’t work?  That’s not my experience. That always works.

What do you think? We did a recent survey, and the feedback was almost split. Yes, 55% of you are shrinking or not growing your SDR and outbound teams. That’s the half-empty side.

But 45% of you are investing more in outbound and hiring more SDRs. It’s working for you. This also ties to a prior survey we did where 49% of folks said outbound wasn’t working for them — but 51% said it was still working.

Most startups aren’t able to raise venture capital, they just aren’t in the sweet spot.  Growth isn’t on point, generally. Bootstrapping is more often not a choice — but the only option. If not forever, at least in the early stages.

Ben Chestnut CEO of Mailchimp had a great story here — they were flooded with VC offers only once they were large enough and profitable enough not to need it.

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So recently, for the first time ever, I called in some favors. Very minor ones, but just to get a little help as SaaStr goes into busy season.

#1 I asked a CRO I’ve worked with for quite a while and got one of his prior roles for him if he wanted to do our podcast with me sometime in the coming weeks. I didn’t need the content, but it would save me a tiny bit of work. He said No. Not later, but just … “No”.

#2 I asked a founder that I got their last role where they made millions if they’d do a call with a founder I invested in. He said “If you really, really, really need me to, but …”

#3 I asked a VC who I referred a one billon+ cash exit to if he could send an email just helping on something. Barely an ask. But he didn’t do it.

#4 I asked a CMO who I’ve promoted many times over the years just if he had an idea of someone I could talk to a certain company. Just who ran something in marketing. He said he knew the contact, but wouldn’t share who it was.

I get that everyone is “hitting snooze” on things these days. The fact alone that “hitting snooze” on things has become part of our collective vocabulary probably says a lot right there. I just didn’t realize how far it had all gone.

So I’ve seen a trend among many startups these days which is to sort of have a VP or Director of Business Ops instead of a VP / Director of Finance. They handle the cash too, but also go deep on the business in a way a “finance person” usually simply can’t.

These folks often come from strategy consulting or banking backgrounds. And they are often great hires, often very smart.

But here’s the thing: ops folks (vs. true finance folks) build GIGO financial plans. Garbage In, Garbage Out.

What do I mean?  The smart folks at Bain, at McKinsey, at Morgan Stanley, etc. will build a financial plan to tell you what you want to hear. E.g.:

If our CAC just goes down, we can stretch the cash 2 years.

If our sales efficiency just goes up, our cash lasts 30 months.

And most dangerously, if growth accelerates just a bit, then … well … we hit the plan!

This type of modeling is what you do when you are selling.  You sell various scenarios, and the ex-consultants and ex-bankers and ex-VC analysts are great at it.  They tweak things, the inputs and variables, to achieve the desired outcome.

True finance folks (e.g., Controllers, CFOs, VP of Finance) usually don’t do this.  In fact, they usually don’t know how.  Instead, they tend to build financial and operating models that are very much driven in the present.  In today’s burn, and today’s revenue, and today’s issues.

So one Cloud and SaaS leader that has held up well in today’s environment is GitLab.

They’re at almost $700m in ARR, growing 33%, with 129% NRR, and 22% free-cash margin.

That’s the full package right there. Overall, everyone is still building a lot of software, some AI-native, some not, but almost all of it in theory benefitting GitLab.

And what’s it worth? Just under $7 Billion. Just about 10x ARR.  That’s criminally low if you ask me. It’s hard to do much better than GitLab. But that’s 2024.

The message in 2022 was to keep going. You couldn’t raise at 27x ARR anymore because that era ended. Last year, the message was that it’s harder, so what is the theme for many SaaS companies this year?

Just build.

SaaStr founder and CEO Jason Lemkin shares his take on the current SaaS landscape midway through 2024 and what might be coming next in 2025 at the opener to this year’s SaaStr Europa.

There’s a lot of doom and gloom on social media, so it’s important to look at the facts as much as possible. Many people are doing great, even private companies like Netskope, which are growing over 30% at $500M in revenue. Canva is growing at 40% and has a revenue of $2.3B. So, yes, things are hard for some people, but companies are all over the place, and all you can do is keep building.

You can’t control public multiples, but you can control your competitiveness. You can control becoming more customer-centric, and you can keep building. Things ebb and flow, and if you keep your head in the game and increase your competitive position, things will come back.

• SaaStr 745: Mastering SaaS Sales Hiring, Customer Retention, and Growth with OpenAI, Retool, and 20VC

• SaaStr 744: A Tale of 3 Worlds: Where SaaS, Cloud, and AI are in 2024 with SaaStr CEO and Founder Jason Lemkin

• SaaStr 743: 9 Easy Sales Concepts So Many Get Wrong with Sam Blond, Former CRO Brex

Listen on Apple Podcast, Spotify or Google Podcasts

Co-CEOs like never works

Too many conflicts, no one knows who the boss is, etc.

Never works

Biggest challenge with rolling out a second product:

Sales will sell whatever is easiest to sell

A second product often need a second sales team maybe even from Day 01

If it seems like your CEO or your boss is pushing you too hard,

Sometimes it's because they are a jerk. Or a workaholic. Or don't get it.

But sometimes, it's because they believe you can do great things.

Otherwise, no point in pushing.

© SaaStr 2024

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