The world of Software as a Service (SaaS) is dynamic and constantly evolving. To stay ahead, SaaS founders, venture capitalists, and professionals need to adapt to changing landscapes, emerging trends, and new challenges. Recently, I had the opportunity to attend SaaStock Dublin, a prominent SaaS conference held at the RDS, where I gathered valuable insights and lessons. In this blog post, I’d like to share some key takeaways from the event and delve into each of them.
1. Funding: VC’s Pitch Too
The first insight from SaaStock is that venture capitalists (VCs) need to pitch, not just to startups but also to potential Limited Partners (LPs). In today’s economic climate, where high-interest rates can make traditional investments less attractive, attracting LPs can be challenging. This is a reminder that VCs also need to sell their vision and opportunities.
For example, take the case of a prominent VC firm like Sequoia Capital. They don’t just invest in companies; they also invest in building relationships with LPs. Their pitch to LPs goes beyond just showcasing their successful portfolio companies. They communicate their strategy and the long-term value they bring to LPs’ portfolios.
Moreover, SaaS founders and startups should not overlook grants available at various stages of their growth. These grants can be more advantageous than giving away equity. It’s essential to research and learn about the grants provided by state agencies and other sources.
2. Strategy: Think Long-term and International
The SaaS business model isn’t about quick wins; it’s about building sustainable, long-term success. Startups should approach their business as if they’re on a path to becoming a €100 million ARR (Annual Recurring Revenue) business. This means thinking globally from the get-go.
For instance, look at Shopify, a SaaS company that began by serving a niche market and gradually expanded to become a global e-commerce platform. They’ve maintained a long-term perspective, continuously innovating and expanding their offerings to cater to an international audience.
3. Sales: The Role of Cold Calling in SaaS
The SaaS industry has its debates about sales strategies. While many say “cold calling is dead,” it may not be true for every SaaS company. If you’re in a Product-Led Growth (PLG) SaaS company, a cold calling strategy may not be the right fit. However, if you’re not a PLG company, cold calling can be an effective way to reach potential clients.
Consider HubSpot, a SaaS company that has both inbound and outbound sales teams. They’ve successfully integrated cold calling into their outbound sales strategy, proving that it can still be a valuable tool when used appropriately.
4. People: The Power of a Chief of Staff
SaaS founders work tirelessly, and they often require leverage to help manage their growing organisations. One often underestimated role is that of the Chief of Staff. This position complements the founder/CEO, eliminates interference, and plays a pivotal role in organisational execution.
5. Processes: Efficiency Matters
Efficiency is paramount in the SaaS world. A key metric that’s gaining attention is ARR/FTE (Annual Recurring Revenue per Full-Time Equivalent or Employee). However, this metric is a lagging indicator. It’s the output, and to increase it, you need to optimize your processes and operations.
For instance, consider how Atlassian, a SaaS giant, focuses on operational structures and cross-team alignment to maximise efficiency. They place a strong emphasis on OKR (Objectives and Key Results) planning and execution.
6. General Conference Insights
SaaStock also offered some general insights into the conference experience. Sponsors should stick to their core competencies. For example, a coffee sponsor offering bad-tasting coffee detracts from the overall experience. Similarly, forced networking meetings might not be the most effective way to connect. Instead, attending talks and serendipitous networking can lead to more high-value interactions.
7. Recommended Reads
Finally, some speaker-recommended books from the event that are worth adding to your reading list include:
- “First, Break All the Rules” by Marcus Buckingham & Curt Coffman
- “PEAK” by Chip Conley
- “Inner Engineering” by Sadhguru
These books offer valuable insights into leadership, personal development, and innovation.
In conclusion, SaaStock 2023 provided a treasure trove of insights for SaaS professionals. Whether you’re a founder, an investor, or an industry enthusiast, these key takeaways offer valuable lessons for navigating the ever-evolving SaaS landscape. As you consider these insights, remember that adaptation, innovation, and the pursuit of excellence are the hallmarks of success in the SaaS world.