The False Choice of Prepaid vs. Monthly Contracts
In scaling the cash-flow side of SaaS, there’s almost nothing more powerful than annual contracts combined with prepaid cash. It’s just such a huge benefit. You get all the cash up-front, and your churn almost by definition goes down. Because the earliest chance the customer has to churn is 12 months hence. So get pre-paid annual deals whenever […]
When to Stop Doing It All Yourself
Perhaps the biggest difference between most first-time founders and most second-time founders is how long they try to do it all themselves. This isn’t a criticism first time you usually sort of have to. You have less capital to hire a team, and less experience building teams. But then after that there are at least […]
Big Companies Don’t Churn. They Quit You.
“Churn” is a term we all use in SaaS as a core metric, but its roots, as near as I remember and can tell, come from our B2C colleagues. In a low-end subscription model for a tool, not a solution (e.g., semi-commodity storage, semi-commodity hosting, etc. etc.), individuals and small businesses, often paying on their […]
Why I Usually (Not Always) Prefer Customer Success to Report to the CEO
Ah, who should Customer Success report to? It’s not super simple. There are generally 3 options in the early and middle days: CEO VP of Sales (once you have one) VP of Something Else. Finance sometimes. Product on occasion. Other “business” co-founder. There are clear Pros and Cons to reporting to a VP of Sales. […]
What You Want to Hit: 50 and 20 at 10 (million in ARR)
The first SaaStr post that got widespread distribution was this one — “Want to Understand SaaS? If Nothing Else — Understand That It Compounds.” The excerpt here: “What does this mean, that SaaS compounds? It means it’s really, really hard to get revenues going. You close a customer for $120 in annualized revenue, you only […]
6 Things in SaaS That Are Only Obvious At Scale
Some thoughts: Churn Lurks. Churn doesn’t happen overnight, especially with annual contracts. It lurks. Use customer visits, NPS surveys, and more to root it out before it happens. Oftentimes, you don’t even lose customers until Year 3. So it really only hits you just when things are getting good. More on that here: Why It’s […]
One Simple Rule on When to Build a “Custom” Feature
“Custom” features … I feel this is perhaps the point founders get the worst advice of all. Especially from VCs, B2C folks, and folks that have never sold bigger deals and into the enterprise. One-off customization per se is bad. This is SaaS, not a services business. But Being paid a lot to build something […]
The 10-Year (And Longer) Customer
Salesforce likes to talk about “Customers for Life”, and while that’s sort of catchy, it’s a little hard to grok what it really means. It finally sunk in for me a bit the other day. At EchoSign, now Adobe Sign, there’s a large group of well-known customers that I closed, Back in The Day … […]
The Two Things to Do. When You Don’t Know What to Do.
There may come a time, or two, in your company when you just don’t know what to do. You aren’t growing fast enough. or The competition seems to be getting the best of you. or You can’t raise financing. or You just lost an important deal. Or maybe more than one. or That great new […]
One Tough (But Rewarding) Job: Being the First Sales Rep at a SaaS Startup
Ah, the first sales rep. Being the first salesperson into a start-up in a rewarding — but very tough job: Your Founder Boss likely will never have managed a salesperson before. She likely won’t know what you are supposed to do 40+ hours a week. Your Founder Boss may have strong views on what you […]
