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Friday, 14 May 2021

SaaStr

SaaStr Podcast #429 with ProfitWell Founder & CEO Patrick Campbell: “The Current State of SaaS Companies, Subscriptions, and Retention in 2021”
VCs Run Out of Money (Sort of). Here’s How & What That Means.
4 Tips To Earn Respect as a Young SaaS CEO

SaaStr Podcast #429 with ProfitWell Founder & CEO Patrick Campbell: “The Current State of SaaS Companies, Subscriptions, and Retention in 2021”

Posted: 13 May 2021 03:07 PM PDT

Ep. #429: In this episode, ProfitWell Founder & CEO Patrick Campbell shares benchmarks from over 23,000 companies and offers a helpful framework to re-evaluate your retention strategy and increase your CLV (Customer Lifetime Value) between 10 and 60%.

This episode is an excerpt of Patrick’s session from SaaStr University: Spring Semester conference. Watch the full video here.

If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:

Jason Lemkin
SaaStr
Patrick Campbell

The post SaaStr Podcast #429 with ProfitWell Founder & CEO Patrick Campbell: “The Current State of SaaS Companies, Subscriptions, and Retention in 2021” appeared first on SaaStr.

VCs Run Out of Money (Sort of). Here’s How & What That Means.

Posted: 13 May 2021 07:45 AM PDT

As the number of Cloud and SaaS IPOs increase, each one becomes a little case study. We’ve looked at many of them in our 5 Interesting Learnings series.

And one thing we can see is that many big successes were far from overnight success stories:

It took UiPath 10 years to get to $1m ARR! More here.
It took Procore 10 years to hit its stride! More here.
It took Squarespace 5 years to get to material revenue. More here.

These long-time-to-success stories are more common that you might think, and worth of their own post.

But here, we’re going to use them just to illustrate a point.

Your VCs can run out of money — for later checks. Just understand that if you ask for money years later. And especially if it just takes longer to get to that next round that you were planning.

How does this work? Well, VC funds typically last 10-15 years, but do all or most of their brand new investments the first 2-4 years. They might deploy 40% of the total fund into these first checks. The rest is then used for later, follow-on rounds into these existing investments. But eventually, the fund starts to run low on “reserve” cash for later rounds and bridges. That 60% of the fund earmarked for later rounds gets used up bit-by-bit, check by check.

Now for the mega winners, VCs can always find more money. They can use other vehicles like Opportunity Funds and SPVs for their very top winners. But that’s opportunistic and doesn’t really help you as a founder. That money comes from other places, just for the very top performers.

Just be aware of this: 7-8 years into the life of a specific VC fund, it starts to run out of money. After that, there’s often very little left.

How do you know? Just ask. It’s OK. Ask how much of the fund is left. Ask if your VCs have more cash for the next round. Ask more specifically “what percent are you deployed in the fund?”. Folks will generally tell you. If the answer is much more than 80%, money will get tight.

Around Year 9-10 of a fund, it’s often close to 100%.

And then the specific VC fund you are in really will be close to out of money.

The post VCs Run Out of Money (Sort of). Here’s How & What That Means. appeared first on SaaStr.

4 Tips To Earn Respect as a Young SaaS CEO

Posted: 13 May 2021 06:20 AM PDT

While age ultimately doesn’t matter — results do — in SaaS, starting off as younger-than-average can create some challenges in a sales- and customer-driven environment. Aaron Levie started Box at 19, Mark Zuckerberg and Bill Gates dropped out at 19-ish, Melanie Perkins started Canva at 25, Anthony Casalana started Squarespace at 21. Tobi Lutke started Shopify at 26.

So just some hacks to potentially make it easier:

Start with SMBs. It's easier to get taken seriously, not just as a CEO, but also as a company, with smaller businesses. They close faster, make quicker decisions, and the owners take the risks. The more gatekeepers there are, the more decision-makers, the harder it can be to break through. You may get 1 or 2 bigger customers, but don't start in the enterprise unless you know the enterprise, 95 times out of 100.

Be always on the front lines. Do all the sales, customer support, post-sales yourself, as much as you can. Secret: Customers LOVE to talk to the CEO. Even the CEO of a 2-person company. Even an 18-year-old CEO.

12 months after closing your first customers, you'll be the best there is at your market and product. And you'll just keep getting better. You will get so much better. You will be so experienced once you have 10, 15, 100 customers, 1000 users, under your belt. You may Know Nothing now but in 12 months you'll be an expert. Just watch. So hang in there, listen, learn and you’ll get great.

Be respectful & Don't Pretend who you (as CEO) are. You can pretend just a little bit that the product does more than it does. But don't pretend you are so much more experienced than you are. Don't pretend you've been in business longer than you have been (Everyone does this. Don’t do this). The early adopter customers are looking not just to buy today, but to buy into you. And they know they are taking a risk. Lead them with truth, knowledge, and enthusiasm. Not everyone will take the risk on the next Gates or Levie or Zuck. But some will. It usually turns out just fine.