Mainsail’s Top Takeaways from SaaStr 2019By: Matt Buckley | February 20, 2019
On February 3–5, members of Mainsail’s operations team attended SaaStr Annual 2019. Throughout the three-day event, we gleaned insight from dozens of speakers and networked with some of the 12,500+ SaaS-minded executives, founders, and investors present.
This year’s content was centered around helping businesses grow from $0 to $100M ARR—right in our wheelhouse!
We’re excited to share some of our top takeaways with you.
1Differentiate your Go-To-Market (GTM)
As access to technology increases, it’s getting harder to create product moats—and that’s a good thing for startups. Incumbent companies are constantly being disrupted by new companies who figure out how to sell a similar experience with reduced friction. Knowing that, focus on differentiating your go-to-market strategy and making it ultra-simple to purchase your product. Learn how your customers want to buy and align your GTM to that.
2Focus on your Forever User
Even as your product line expands, don’t lose sight of your “forever user.” Build features with them in mind and keep a steady pulse on their needs. Though your back-end should be enterprise-grade, keep your front-end consumer grade so those valued users want to come back for more.
3Don’t Do it Without Data
Every decision you make and every system you implement should be driven by data. Make data an integral part of your culture by empowering your team to make decisions using it. Ditch your old spreadsheets and encourage your team to learn and use SQL. Build a company-wide data hub and publish every team’s Objectives and Key Results (OKRs) on a dashboard.
4Don’t Skimp on Sales Operations
Many companies wait too long to hire sales operations. Invest early (even as soon as a few fully productive reps) and hire someone more senior that you think you’ll need. The wrong hire will do a great job telling you about what’s already happened. The right hire will help tell you what’s going to happen.
5Be Thoughtful About Your Comp Plans
It’s not enough to be clear in your compensation models—you also need to keep them relevant by reworking them annually. Wondering how your reps could game the next system? Find the reps who game the current system and ask them! Finally, when quotas are going up and on-target earnings (OTE) is staying the same, make sure that this is carefully and clearly communicated to your sales team. And remember—the best place to overspend sub $10M in revenue is on Sales Reps. They are one of your most powerful recruiting tools and they will pay for themselves in the long-term.
6Monetize your Existing Customers
Figure out (1) who your ideal customers are, (2) why they pay you and (3) how much they are willing to pay you. Then, make it easy for your team to upsell to this highly valuable segment of your install base. While new customers are enticing, monetizing existing customers is 4x more efficient. Make it easy for your customers to expand their product engagement autonomously via clear upsell purchase paths in your product, without ever needing to speak to a Customer Success or Sales Representative. Your goal should be to have Net Revenue Retention (NRR) of over 130%.
7Know Your SaaS Metrics
As long as your company is in the sub-$100M category, focus on your Payback period, over your LTV:CAC. LTV is too easily gamed and is prone to inflated retention metrics, especially if you are signing long-term contracts and a large percentage of customers have yet to come up for renewal, or when churn is low and your LTV is projecting out over a greater than 5-year time horizon. (Remember, a 1% increase in churn cuts LTV in half.) Finally, hire someone in Financial Planning and Analysis (FP&A) within your first 50-100 employees so you can be confident in your metrics and lean into spend with conviction.
8Hop on the Free-Trial Train
This sales tactic has risen to the forefront because it works. A study shared by one of the presenters found that the highest conversion rates occur on time-limited trials and, interestingly, showed that longer trials don’t increase conversion rates. If you do offer free trials (and your average selling price is $5-10K+), have your sales team reach out to prospects during their trial. Sales-assisted conversion rates are 4 times higher than unassisted conversion rates.
9Choose the Type of Thought-Leader You Want to Be
If you’re building a category-creating business, build a community around your category to generate content. Avoid making the community synonymous with your product name so it can be a place for users and non-users alike. Conversely, if you’re building a vertical software company and, invest in a deep-dive research project. That kind of reporting can help establish your reputation and get the attention of journalists.
10Define Your Target Segment
Mainsail’s own Kate Hopkins gave a talk on how tight market focus can help small companies take advantage of the economies of scale usually achieved only by much larger players. Focusing on a tightly defined market segment allows a company to out-compete less focused rivals by offering the most compelling product to their target customer, decreasing their customer acquisition costs by narrowing the audience, and increasing their operational efficiency though specialization. Read more about that talk here.
SaaStr 2019 was chock-full of great content that we found to be relevant to both our associates and our portfolio companies. We’re looking forward to applying our new learnings and we’ve already saved the date for SaaStr 2020.
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The information herein is based on the author’s takeaways from the 2019 SaaStr conference and therefore, generally reflect the opinions and beliefs and related topics of certain speakers at such conference and are not necessarily representative of those of Mainsail. There can be no assurance other third-party analyses would reach the same conclusions as those provided herein. The information herein is not and may not be relied on in any manner as, legal, tax, business or investment advice.
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