Inc - Don’t Fall into a SaaS Doom Loop

So I caught up by email with a VP of Sales who told me he wasn’t coming to SaaStr Annual this year for the first time.

I asked why — what could we do better? Was it us?

He said it wasn’t that. It was that his startup “was just growing 15%-20% now, so I’m slowing things down. I’m not going to travel much anymore.”

This is a tough one. Does Slow Growth = Slow Effort? Is it a Doom Loop?

This is a tough issue with no perfect answer that many founders and execs are facing today. If you’re in the 70% or so of B2B startups that are growing more slowly, do you cut the team slack? You almost have to.

But if so, how much?

And if you cut so much slack that there isn’t any true urgency, can a startup even survive, let alone thrive?

I don’t know the perfect answer. What I do know is almost 100% of startups can do a >smidge< better than they are doing now. At least 10%-20%. That’s in fact been most of the post of all our SaaStr content for more than a decade. How to do 10%-30% better, with improvements, tweaks, and upgrades.

In a recent Workshop Wednesday, SaaStr Founder and CEO, Jason Lemkin sat down to discuss 9 signs a startup isn’t going to make it. We all know, we’re living in strange times.

Top AI startups are growing 500% a year and exploding.

A lot of public leaders are struggling

Some unicorns are doing incredibly well, while others have stalled and are growing at zero or close to it.

Founders are struggling with how to deal with these changes, and VCs and executives are trying to decide if companies are worth joining, investing in, or sticking it out with. It’s nuanced.

So, let’s look at the nine signs a startup will likely not be a real success. As leaders, if you see yourself doing some of these things, maybe it’s time to stop it.

So many outside of cybersecurity had barely heard of Crowdstrike before … it took down a big chunk of the Internet the other day.

But you should have. Why? That big miss aside, it’s one of the most incredible SaaS and Cloud leaders out there. The metrics are breathtaking (even if there may be some short-term challenges now):

• $3.65 Billion in ARR
• 120% NRR (estimate)
• Still growing 33%
• 22% operating margins and 35% free cash flow margins

Even with the big miss the other day, it’s still worth $65 Billion.  That’s down from $100 Billion+ before it took down the internet.  But even at $65 Billion — that’s still almost 20x+ ARR.

That’s about as good as it gets, folks.

The world is a different place than it was ten years ago. As an incoming or current CRO or sales leader, you have a whole lot of variables to account for. At this week’s Workshop Wednesday, held every Wednesday at 10 a.m. PST, Salesloft CRO Mark Niemiec shares a 5-step playbook for how to deal with market conditions and execute on your vision successfully.

Look, I can’t stand this either.

But … if you can …

Get Over It. Smile, say Thank You, and Move On.

VCs:

• Are a pretty ego-driven bunch, in part because they themselves are being judged as a number (their returns), and in part because that’s the internal culture at many firms (my cos. are the best ones), in part because many are really smart … and in part because they aren’t the CEO … so they aren’t the ones really creating value, not really;
• Often talk a little bit out of the arse b/c they don’t truly have domain / operationally experience in an area (really, they can’t, they do too many things to be an expert in any one except venture capital itself); AND
• Usually hear HUNDREDS of pitches a year and meet hundreds more founders.
• Often don’t realize they are being rude or arrogant.  Just realize that.

There’s no excuse for being rude.  Mom taught us that.

But while you don’t need to be sympathetic … you need to understand that’s how VC is … and thicken your skin. And remember, meeting VCs is a sales job. You’re selling. Selling stock, but selling. Prospects will ghost you, or not want to meet again, or decide you’re not the right vendor / investment … all the time. Get used to it.

Thickening your skin, dealing with all different sorts of folks, and doing what it takes to win — that’s a big part of the job of CEO.

© SaaStr 2024

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