SaaStr

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How to Handle, and Share, Bad News Posted: 04 Jun 2022 01:20 AM PDT Run toward bad news Sometimes you need a moment. That's OK. But after that, hiding makes it worse. Process it … Then: Address it Share it Talk about it Make a plan Act on it Your team and investors will rally — Jason BeKind Lemkin #ДобісаПутіна (@jasonlk) March 31, 2022 The past 10+ years I’ve had a chance to observe a lot of SaaS founders, as an investor, as an advisor and more … and the vast majority I’ve worked with have in the end just killed it.  Gone on to bigger and better things.  Five of the first six became unicorns.  Two have sold at billion+ valuations.  Many are just getting going. But … it’s never all roses.  We know this.  And in fact, many, if not most, of you will have a Year of Hell.  And right now for some of you can be extra stressful, given the challenges in venture and the public markets at the moment. And one thing I’ve observed is many founders and CEOs don’t handle bad news the right way.  I wasn’t perfect either, I went too far on the transparency side, and maybe spooked my investors a little too much some times. But hiding the ball can end up being a disaster.  Even best case, it creates anxiety. Here’s behavior I’ve observed: Investor updates are delayed, or never sent, in bad months. Strategic changes aren’t communicated before they are executed. Informal meetings and catch-ups stop or aren’t scheduled in rougher times. Rough months and quarters, and challenging metrics, are glossed over. This may be natural for some of you.  But let me tell you it’s a terrible idea. Everyone that’s been around start-ups knows there are ups and downs.  We expect it.  And investors especially expect it. What people don’t expect is not getting a heads-up on the unexpected.  Ideally, an extremely thoughtful one.   Then, confidence evaporates.  Investors stop boasting about their investments.  The Next Investors get nervous when they don’t see unqualified support. And the ‘confidence’ game then all falls apart.  Because the rough quarter wasn’t communicated and managed right.   Everyone in SaaS — everyone — ends up with a rough quarter.  Maybe even really, a Year of Hell (more on that here). If you are not just transparent, but consistently transparent — you’ll get through it. So this is a simple post, but so many founders get this wrong.  Let me summarize: Make sure everyone that is going to be an important advocate for you in the future — investors, key advisors, board members, etc. — gets a crisp and prompt monthly update, always.  Always.  Do not delay in bad months.  Don’t let it stretch past the 10th of the month … especially on bad months.  I see way too many founders skip, or slow down, their updates when times are tough.  This is backwards.  It completely undermines confidence.  Everyone notices when the updates stop. Meet all your key stakeholders and champions every quarter, at least on Zoom.  This is more than just an obligatory board meeting.  Do a Zoom at least once a quarter, as a group or individuals, with all your key investors and allies.  And don't leave behind your third or fourth largest investors, just because they aren't on your board.  They can often be your biggest advocates and champions. Don’t explain it after the fact.  Great founders can always see it coming.  Always explain the stumble even before it shows up.  And tell us what you are doing to mitigate it.  Investors, employees, really all start-up people are wired to take some tough news.  But there’s no reason to not hear about it when it happens.  In fact, since revenue recurs in SaaS, everyone should hear about bad news before it materially impacts your MRR. Don’t dismiss concerns folks have or tell them “I told you about this issue”.  That not only doesn’t help, it dis-instills confidence.  Weak CEOs and founders consistently dismiss concerns from their team and investors by saying I Told You So.  Well, if you’d told everyone so properly, AND had a plan to do something about it, there would have been no reason to say so. When you have a stumble, dispassionately and logically re-forecast.  When is our Zero Cash Date now?  Does this change when we get to $2m or $5m or $10m ARR?  Does it change anything fundamental about what we are doing?  This will install an almost unimaginable amount of confidence.  But if your investors, team, board members, etc. have to try to re-forecast on their own — they’ll quickly lose confidence in your ability to do so. Know the current funding landscape cold.  You should know if you are fundable or not at the moment, and what to do about it. Force your VPs to come up with a plan to improve if they haven’t already (and the best ones do this on their own).  Don’t let them blame others on the team, or holes on the org chart.  Every functional area can always improve. Again, how will we do better going forward?  This is what everyone wants to know.  If you aren’t 100% sure how to do much better going forward, at least explain how we are going to do a bit better in the future.  That’s often enough for now.  There just has to be a plan now. Everyone — your team, your investors, your advisors, your customers — is making a long-term bet here.  Everyone expects a few bumps, and maybe even, one really tough one every few years or so. So just … EXPLAIN IT TO US.  Tell us what happened, and why, before we even see it coming.  As Todd McKinnon, CEO of Okta said at the recent SaaStr Scale: “99 times out of 100, Truth is Your Friend.” Great founders see the future.  Just make sure we all know that — all the stakeholders. If we know you can truly see the future, and it’s still a bright (and data-driven) one — then we can take some interim bad news.  Really, we can. If Times Are Tough — Don’t Hide. Be Present. (note: an updated SaaStr Classic post) The post How to Handle, and Share, Bad News appeared first on SaaStr.

Enterprise Communities: The What, Who, Why, When & How with Venafi Head of Community Holly Firestone (Pod 560 + Video) Posted: 03 Jun 2022 06:00 AM PDT How do you build a flourishing community around your SaaS business? How can you get your audience excited enough to contribute, and how can they derive value from the community? Holly Firestone, Head of Community at Venafi, taps into her impressive experience in building communities to share the secret to success. The What Firestone defines community as a group of individuals connected through a network of platforms, programs, resources, and a shared set of values. These commonalities give your audiences the power to build together, support each other, contribute to business goals, and find their paths to success. In a thriving community, people connect over a shared set of interests, and your company is the glue that sticks them together. However, avoid rushing into community-building as a way to promote your business. As Firestone says, "Community is not an opportunity for you to build your connection or your channel with your customers or audiences. It's really about them connecting with one another. That's where they'll see the value, and that's where you'll get the most value." Without this people-first ideology, your community just becomes another marketing channel, and it won't deliver value. The Who No, not the band. The "who" refers to all the individuals connected to your company. This covers a wide range of audiences, like customers, prospects, developers, partners, thought leaders, and employees. Essentially, it can include anyone who cares about your work and the problems you're trying to solve.  You don't have to include everyone right away when you are starting out. Instead, you can prioritize your most important segment and build there first, but keep future expansion in mind. The Why In a nutshell –– community delivers ROI across your business, from product, to marketing, to customer success. So when you're creating your community, think about your overall business goals and pain points, and leverage the community to help you achieve your targets. Firestone provided examples from her past experience, which included leading communities at Salesforce and Atlassian. She shared some data that reflects the positive impacts that community had in one of her previous tenures: Community Drives Growth & ROI 2x pipeline 2x bigger deals 33% higher product adoption 3x lower attrition Community Deflects Support Costs 4,000 monthly answered questions in the community 83% peer-driven responses $2 million per month in support savings Community Amplifies Success For Audiences 93% of community members surveyed said they discovered new products and solutions 81% reported higher productivity 82% higher ROI With these impressive results, it's no wonder that Firestone says, "Community is an integral part of your business strategy. It's no longer a nice-to-have; it's a must-have." The When  When should you start building community? The answer is a resounding "NOW." It doesn't matter if you are a large enterprise or a small startup; you want to get started immediately. The How A lot of effort and moving pieces go into building a community, but Firestone shares a few general tips to get started. Hire an experienced community professional. They have the expertise to build your strategy and lead effectively. Community is an investment. Commit to providing adequate resources and budget. Align community goals with top-level business goals and get everyone in leadership on board. Trust is everything. Build trust with your community through honesty, humility, and authentic engagement. Key Takeaways Stay authentic, and put your audiences first. Prioritize them finding value, or you won't be successful. Community brings ROI to your entire business. Be sure that your community is tied to your most critical business goals. The post Enterprise Communities: The What, Who, Why, When & How with Venafi Head of Community Holly Firestone (Pod 560 + Video) appeared first on SaaStr.

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