So to raise seed and post-seed money from VCs, you need to show traction.

What’s that? Roughly:

• Before $1m ARR, growing 10%-15% a month
• Around $1m ARR, growing 8%-10% a month or so
• Around $10m ARR, ideally doubling

Etc. Being on track to Triple Triple Double Double after $1m ARR, and growing faster earlier than that.

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SaaStr CEO and founder Jason Lemkin chats with SaaStr Fund-backed Mangomint CEO Daniel Lang about why vertical SaaS is booming and how Mangomint got to 110% NRR at eight figures in ARR.

What was once often considered too small or too niche, vertical SaaS has recently emerged as a hotbed of innovation and profitability — and interest from Venture Capital.

But vertical SaaS isn’t new — it’s being reinvented. So what’s changed in the space with the introduction of automation and AI? And how did MangoMint drive such growth from a seemingly smaller and mature category of software, SaaS for spas and salons?

The #1 most important criterion for your first 2 reps is:

would you buy from her?

For real?

Would you truly, 100%, buy your own product from them?

98% of the reps you interview … will fail this test. Don’t hire them.

At least, not until you have a strong VP of Sales that can help mold them.

Leads are too precious in the early days, your brand is non-existent, and everything is quirky and undocumented. Later, this is the wrong criterion. Later, you’ll need all sorts of reps, and beyond that, you’ll have so many customers and so many different types of customers that what you would buy isn’t representative of the sales process anymore. But in the early days, it is.

So forget the perfect LinkedIn. You do want at least 18–24 months of on-point selling experience at close to your price point. Not having that is very risky. Because those 18–24 months train them in a way you can’t.

So Zoom has entered its mature stage, but it’s also now rebooting itself. It’s dropped “Video” from its name as it has gone communications and AI-first:

• $4.7B ARR
• 3.6% Growth Overall
• Very, very profitable — generating almost $2B in free cash flow a year

Growth is up just 3.6%, but Zoom has raised guidance — and the stock is up a strong 20% this year.  And it still trades at 5x ARR.

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So at the end of SaaStr Annual this year, I shared a bunch of statistics and metrics. Including one where, for the first time ever, we came up short:

We missed our inclusion goal for the first time since we set one at Annual.

We only had about 680 qualified attendees on our no-cost Equality and Inclusion program.  We’d always hit our goal of 1,000 since we rolled out the program in 2018.

What happened?

There are a number of root causes I think, but one is clear: many folks don’t care anymore. At least, not as much.

Look it will help a little in a few ways if you are more enterprise. But it won’t really change any fundamentals.  

There’s a natural evolution as you scale a SaaS company. In the beginning, every day can almost seem life and death. Every single deal feels critical.  Sales cycles seem so long, and you can barely even see a quarter ahead, let alone a year.

Peter Gassner, CEO of $35B market cap Veeva and I had this discussion at a SaaStr Annual, where in the early days he could only plan about a quarter ahead, max.

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