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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So there are a lot of things we’ve made fun of a bit since the 2021 bubble burst, from how weak many unicorns were, to how crazy the strategies of Tiger Global and Softbank were during that boom.

But were they so crazy?

Softbank made $7.7 Billion in profit just last quarter.

So they are putting $1B of it into OpenAI, and a few billion more into other AI and top start-ups.

It’s hard to know for sure what’s going on in tech, SaaS, Cloud and AI today:

• Is a lot of AI spend still experimentation budget?  Yes.
• Does it make sense that Elon Musk’s x.AI is worth $50B in less than 2 years — on just $100m (or less) in revenue?  I’m not so sure.
• YC had a seed investment valued at $250m in its last batch.  Is that … too high?
• Databricks at $55 Billion seems high, but its growth rate at scale is … epic.
• The Nasdaq-BVP Cloud index is of course way off its 2021 highs, but is up +24% the past 6 months! 

Are we back?

My second boss came from a very big, very old tech company. He inherited one of their firm rules: “When you leave, if you leave … you can’t ever come back!”

I didn’t get that rule. If someone great left, wouldn’t you want them back later? Things change. Life changes.

In fact, right after that, we hired a roundtrip employee as our CTO in my first start-up and it was amazing. Game changing. He already had years of domain knowledge and expertise, knew exactly what to do on Day 1 … and yet left all the drama of the past behind. It was magical to have an A+ team member also be almost 100% scaled up his first day. We did amazing things.

Still, as time has gone on, I’ve tried the trick again and again, and it hasn’t always worked. The lessons may be obvious, but I thought I’d summarize them here. Especially in tougher times, folks may be knocking on your door again.

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.

This edition of the SaaStr Weekly is sponsored in part by G2

In today’s landscape, AI isn’t just a tool—it’s a business imperative.

Join C-suite execs, including SaaStr CEO and Founder, Jason Lemkin and GTM leaders, as they explore:

• Accelerating your growth with AI
• Exceeding buyer ROI and agility expectations
• Capitalizing on market trends to stay ahead of the competition 

I know for many, this seems a much harder time to find a new job

What I can tell you is this. It’s not the crazy hiring market of 2021. But all the best start-ups and scale-ups are hiring, and even many of those doing Just OK are, too:

• I have at least 10 high quality portfolio companies looking hard for a great VP of Sales
• I have at least 8 high quality portfolio companies looking hard for a great VP of Marketing / Growth
• Every single portfolio company is looking to hire 2-30 great sales execs

If you are struggling, first ask yourself if you are great at it. Then, ask yourself if you are truly still willing to work. For real. Not 20 hours a week from home.

If so …

Then try harder to find that role.

Literally as I type this, I bumped into a great founder at $20m ARR at Starbucks growing 100%+ with tens of millions in the bank. He just raised his first round ever, after bootstrapping all the way to $20m ARR. His #1 issue?  He just can’t find enough great folks to hire.

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.

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.

Of course not, not intentionally.  

But …

Sort of, unintentionally. VCs have to invest in simply crazy founders. “Good” crazy. Crazy folks who will do whatever it takes to build a Unicorn, not sell at $50m, not sell at $200m, keep going, even when logic 100 times will say otherwise.

I’m no psychiatrist, but my observations, some of this craziness may, in some cases, be correlated to somewhat psychopathic tendencies.

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?

• SaaStr 777: The Rise of Vertical SaaS: Achieving 110% NRR from SMBs with Mangomint's CEO

• SaaStr 776: How to Successfully Bring AI Products to Market at Scale with GitHub’s CRO Elizabeth Pemmerl

• SaaStr 775: If You Fall Off the Venture Track, At Least Stay on The PE Track with Andy Wilson CEO Logikcull and SaaStr CEO Jason Lemkin

Listen on Apple Podcast, Spotify or Google Podcasts

Wondering if you are a "founder" or not?

Controversial, but my definition is:

Yes, if you can't walk away. No matter what.

Everyone wants a team

But if you can have fewer, better people doing function X

You can pay them all more and better

Worth a shot

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