Inc - Everyone’s Adding AI But ..

So obvious AI is a generational change in software. Where it will exactly all go we can’t 100% predict.

But there’s a general sense of the Haves and Have Nots. That the Open AIs, Microsofts and Databricks “get it”, that Nvidia is the fuel, that all the hot start-ups are AI native and still raising at unicorn valuation … and that many SaaS leaders are sort of being left in the dust.

Maybe. One thing just to be aware of is every SaaS and Cloud leader is “AI-ifying” their products:

• Zendesk and Intercom all-in on AI, even as 100s of start-ups are building AI chatbots
• ServiceNow attributes a huge amount of its growth to AI-driven workflows
• Asana is all-in on AI
• Salesforce and Marc Benioff are all about being AI-first as well
• ZoomInfo has launched a very exciting Sales AI Co-Pilot

Up Next: Wednesday, July 17th @ 10AM Pacific

Topic: Top Actions Items Joining as The New CRO with Salesloft's CRO

Speaker: Mark Niemiec, CRO at Salesloft

Workshop Wednesdays is new series where we’ll be bringing some of the best SaaStr speakers to you LIVE, every Wednesday. 

Each workshop will be hosted in a live, interactive 30-minute format at 10am Pacific each and every Wednesday. This workshop will be 100% LIVE, not pre-recorded, and will be hosted in an, interactive 30-minute format, including Q&A.

So Coatue a leading multi-stage VC firm put up a ton of great data in its East West conference. A few that I thought we were super helpful for SaaS folks:

“At the 8th annual East Meets West (EMW) conference, we gathered technology leaders from around the world for three days of thought-provoking conversations and connection building.

We kicked off the event with our annual “Coatue View on the State of the Markets” to provide an outlook on the macroeconomic landscape that helps guide our view on both the public and private markets. Despite ever-present uncertainty and change, our analysis suggests that public markets remain resilient and that AI continues to present a new vector of opportunity.”

#1. There Are So Many Unicorns, We Have a 25 Year IPO Backlog

Now of course in theory, IPOs could dramatically exceed their historical pace.  But assuming that doesn’t happen — and it’s been a very dry 2.5 years for IPOs — it would take 25 years to get through all the unicorns we already have.

Lots of SaaS companies don’t offer a free trial — intentionally. But more and more are adding them, from Atlassian to New Relic to Monday.com and more.

Slack and Zoom showed us you can be more far freer than average and grow far faster than average. At least some apps can. And HubSpot and Mailchimp added Free later … and accelerated as a result. Some great data from HubSpot here a little ways back.

It’s a tiny industry that is tough to break into. For sure.  Truly tiny.  There are only a few hundred VC firms, and each may only need 1-3 more junior investors. That means a handful of positions, really.

There just aren’t that many VC firms, and they don’t have that many employees.

But here’s the thing folks don’t get: just about every VC fund I know — including SaaStr Fund itself — is hiring. At least 1 investing professional.  Almost all of them.  The roles are rarely advertised on LinkedIn or on their websites, but everyone needs help and leverage investing.

So if you really, really, really want to break in — work it:

• Research every possible firm that does the type of investing you are interested in
• Write a partner there the world’s best cold email
• Share why you’d be a great investor there — this is hard, but you gotta do it
• -> Point out 2–3 startups you know are hot that they may have missed
• Etc.

Write the world’s best cold email. It may not be responded to, but I bet it gets opened.

It’s not just a hard industry to break into — it’s also hard for partners to find more junior folks that can really do the work. To hustle like heck to find the next Google, Datadog, Atlassian, Wiz, Figma, etc. That knows the difference between Great and Just Very, Very Good. That is willing to do the work.

Be that person.

To me the “strangest” thing I learned is that you get pretty darn good around Year 3–4. Almost automatically. And somewhere around Year 5 at least, if you make it that long — you know exactly what to do.

I always had imposter syndrome as a CEO and founder — and still do. I never thought I could be as good as any of the successful founders I knew. And I probably wasn’t that good in the beginning.

But what I’ve learned twice now is if you make it to Year 3 or 4 or so … you get pretty darn good.

Whatever domain gaps, management gaps, vision gaps you had … you figure it out by then at least. You can really see the future by $8m-$10m ARR.

So if you are worried you aren’t good enough to go the distance … well maybe you aren’t — today. But don’t throw in the towel. Time and committing 110% for years really does make a difference.

• Hiring and Interviewing Tips: Jason emphasizes the importance of interviewing at least 30 candidates for a role and consulting with an expert in the field to interview the final candidate. This approach helps in identifying the best fit and avoiding future problems.
• Product-Led Growth (PLG) vs. Enterprise Sales: Jason discusses the evolution of PLG, noting that it’s essentially freemium with better analytics. He highlights that many companies, like Canva and Asana, start with PLG but eventually incorporate a sales-led motion as they scale.
• Customer Engagement and Onboarding: Jason stresses the importance of early customer engagement. He recommends that heads of product, sales, and customer success should spend their initial weeks meeting customers to understand their needs and challenges.
• Valuation and Revenue Classification: Jason advises being transparent about different revenue streams and their margins. He suggests breaking down revenue into categories (e.g., software, services) and being honest with investors about the composition of your revenue.
• AI in SaaS: Jason is bullish on the tactical benefits of AI in improving workflows within B2B SaaS. He believes that AI will significantly enhance various aspects of SaaS products, making them more efficient and effective.
• Marketing Agencies and Outsourcing: Jason warns against relying heavily on agencies for core functions like lead generation and product-market fit. He suggests that agencies often fail to deliver because they can’t fully understand the product or market.
• Fundraising Strategy: For startups looking to raise funds, Jason advises talking to more investors than initially planned and being conservative in the amount of money you ask for. He also emphasizes the importance of keeping pitch materials up-to-date and tailored to the audience.

What is a pivot, and what makes them succeed or fail? Skyflow is a data privacy company that started with the simple premise that your personal information shouldn’t end up on the dark web.

At SaaStr Europa, Skyflow’s CEO, Anshu Sharma, and COS, Rajsi Rana, shared examples of what does and doesn’t qualify as a pivot and the biggest lessons learned from over 50 investments for making a pivot successful.

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