The 9 Disciplines of Great SaaS Companies remains one of the most popular posts on marketing on this blog. It’s a wonderful framework by Bill Macaitis, who was the CMO at Zendesk and Slack. Gabe Larsen, the VP of Growth at Kustomer, has a marketing scorecard that goes one level deeper and breaks down some of the key elements of key marketing processes.
This morning, there were many tweets talking about the impact of the coronavirus on the fundraising environment. It’s as a result of last weeks’ wild swings in the stock market. According to Koyfin’s analysis technology was the second hardest hit sector, falling 14%. The S&P overall was down 11%. Let’s double-click on the impact of last week on the valuation environment.
If you’re looking for a primer on many of the responsibilities of being a startup CEO, read The Great CEO Within. Matt Mochary wrote the book. He founded a company which he sold to MCI and now coaches startup CEOs, amongst other philanthropic efforts. The best part of this book is that it combines descriptions of the key jobs to be done and the frameworks to accomplish them.
As CEOs grow their teams and their companies, their calendars densify with meetings until there’s no space to work. “The top goal framework will help you fix this. Greg McKeown, who wrote a phenomenal book on productivity called Essentialism: The Disciplined Pursuit of Less, boils this down to one key concept: Schedule two hours each day (i.e., put an event in your calendar) to work on your top goal only. And do this every single workday. Period.”
This is the theoretically ideal organizational chart of a startup. There’s a CEO at the top in red, VPs in orange, senior contributors in dark gray, team leads in green, and junior individual contributors in light gray.
This is the org chart of the typical startup. It’s a very different in reality. The departments are lopsided and scraggly. The span of control is out of control. Sometimes there are directors running teams that should be headed by VPs. Other times, departments are missing leaders and so another leader takes the helm. Is this so bad?
When I started in venture capital, one of the questions I learned to ask very early on was competition. Founders would often reply that competition validates the opportunity. At the time, I thought it was a canned response, a clever parry, to avoid answering the question directly. I’ve since realized I was wrong.
Let’s say you’re creating a category. You need to cross the chasm and reach the second half of the technology adoption curve. I found a beautiful technology curve online and have replicated it above. A small number of innovators and early adopters might use a minimal feature set product.
One of the most consistent errors made in sales projections and planning is mismatching the ramp time to the sales cycle. What does this mean? If my startup has a 9 months sales cycle and the VP of Sales projects a six month ramp time, my startup is committing this error.
How should one expect a new account executive to start delivering bookings in their first quarter if the typical sales cycle is longer than the ramp period? One argument is that the territory is warm. Leads have been nurtured in that territory for a while. The account executive starts with business that has made some progress in their customer lifecycle journey.
“Basketball can be modeled as two-biased random walks. Each team has a probability. Each team has a probability of scoring each trip down the court…this model suggests a strategy: stronger teams should speed up the game to create more possessions.” If you shoot more accurately, then more possessions over time creates a greater delta in the final score. This is a great idea from Scott Page’s the Model Thinker that I find I quote a lot when discussing competitive strategy.
Next Friday, February 21, SaaS Office Hours at Redpoint welcomes Lisa Lawson. Lisa built the channel program at Optimizely, the leading AB testing platform. Lisa also lleads the channel practice for SaaS Sales Management, the leading bootcamp for SaaS sales leaders.
Developing channel and partner programs is a capital efficient way of growing SaaS companies. But to succeed, a company must understand the key parts of partnering with larger salesteams to make the effort effective.
The debate about partnering with Snowflake went back and forth during the investment committee meeting. It was March 2014. My partners, Satish and John, had met the company and were proposing to lead the Series B. The company was about two years away from launch and heading straight into a dance with elephants.
Google and Amazon both offered competing products and were already in market. Here was a plucky group of founders with deep technical expertise seeking to take on the incumbents with a novel architecture. And that was the bet the deal team advocated: Snowflake’s superior architecture will triumph in the end when users begin to query petabytes of data.
Have you ever sold a product while working at the market leader? How about from the market challenger? If you’ve done both, you know how different the role of a salesperson can be in each of these businesses. having them both, I can tell you that though the jobs have very similar titles, the work is quite different.
The market leader benefits from the strength of its brand. Buyers compare other products to the leader. For account executives, everything is easier. The brand’s strength eases prospecting work. Internal champions prefer recommending the leader to their superiors because it’s easier, increasing close rates. And if that implementation fails, there is lesser downside risk. Salespeople leverage the trust the brand has created.