My notes from SaaStr 16' — Day 1 Summary
[UPDATE] Here's notes for days 2 and 3:
Had a lot of fun yesterday, if you want to check day 1 summary, click here. Here’s my notes for Day 2.medium.com
Final day at #SaaStrAnnual 16'. This was the best event that i attended as a SaaS founder. If you want to review the…medium.com
Atlassian — Inside Story Behind a $5B IPO: Jay Simons
Key insight: Think about “Product Expansion paths”
- Create a natural network effect built into our products. Think about organic expansion inside the organization
- Product strategy is important. Atlasssian thinks about the team collaboration.
- Profile the end users — Make them happy.
- Be an advocate for your customer and they will be an advocate for you.
- It was a right decision to divert energy and build a second product.
New Relic: Scaling Even Faster the Second Time: Lew Cirne
Key insight: You’ve got 180 seconds to impress the user
- I had knowledge of the problem, the customer;
- Focus on the first minute of experience. It is the most important minute, and that was missing in enterprise software.
- Make the customer love your product from day 1;
- Multiple SKUs are distracting. We’d all love to be able to focus on just 1, service the same customer on doing product lines.
- Get distribution partners. Relic got 400 customers on day 1;
- Got by the end of 2008 without salespeople;
- Started adding salespeople in 2009, calling customers, trials.
- Focus of salespeople — Prioritize the decision NOW. People don’t have time and they can always wait for another week;
- Sales team was about getting people who already liked our product to become customers.
- Affordable for SMB, but scalable for enterprise customers
- As we grow, a lot of competition appears in the SMB space;
- Learn to be less canadian, defend yourself and punch back;
Hiring your first VP Sales: Brendon Cassidy, Sam Blond, Emmanuelle Skala
Key insight: The first VP Sales has to be you. Get 2 reps up and running and go for the VP hunt.
- Perfect timing: You already have 2 reps performing. You have the leads. It is not a true VP of Sales if you only have 1 rep;
- Have different styles, different profiles for your first reps;
- The wrong VP of Sales will delay your startup for 1 year.
- #1 job of the VP Sales is recruiting;
- Hire ASAP once you have a repeatable process;
- Your VP Sales must know/have 3–5 sales reps to bring in with him. If not, red flag;
- VP Sales must take action fast. Assess the team, hire and fire fast;
- VP of Sales should not carry an individual contributor quota. They exist to teach reps how to do it.
- You must see results in one sales cycle. More revenue per rep, shorter cycle, 5-10% growth, etc.
More on the subject: This video completely blown my brain in 14' and inspired us a lot at Rock Content. #thxlemkin, thx @mattdoyon: http://www.saastr.com/how-to-hire-a-great-vp-sales-the-full-video-and-transcript/
CXO Talk Live: Michael Krigsman, Zach Nelson, Netsuite
Key insight: Never turn an enterprise deal into a mid market deal ;)
- NetSuite was started in 98, went public in 07. Zach came from McAfee, where he was helping the company with internet sales;
- Initial metrics where deal size and # of deals per rep/month (1 at the time). Never loose historical data, that’ll help find the next growth engines.;
- Distributed team very early;
- Priorities: #1 Company vision, #2 Financial management, #3 People
- Track employee vesting schedules. Once they are fully vested, they’ll starting looking for new jobs. Retain these people;
Sales & Market Segmentation
- Netsuite was selling to SMB's in the early days, but they were mission critical applications;
- Cracking the way on how to sell complex applications throught the internet was critical. It allowed Netsuite to sell to midsize business and later (harder) to do enterprise;
- It’s harder to work for a mid-size business than for enterprise. A U$ 10k mistake is way more dangerous in mid market than on the enterprise;
- NetSuite once competed with SAP on a 8 million dollar deal. The rep closed a 400k deal. That's when we learned that the mid market rep would turn enterprise deals into mid market deals. To go enterprise we had to "sorta" create a new organization.
- When you go public, you have to have a clear answer to "what are your next growth engines? ".
- Really ugly software, right? None of it works. SAP did a massive 3 billion dollar failure. They should have copied NetSuite.
- They have not built a single product. They just buy a couple companies and sell it as X on the web.
Building a World-Class Sales Organization: Dave Bernan, Bill Binch, Jason Green, Erica Ruliffson-Schultz
Key insight: The 3 key sales motivators - Personal growth, recognition, compensation.
The VP Sales role
- VP Sales with little experience that are Alpha Reps are ok in the early stage;
- At about 10 reps, you need an A+ VP Sales who can train, onboard, and recruit. Someone to build systems;
- Customer network is also important, specially in enterprise;
- Your sales leader must be able to tune strategy to segment the team (SMB, enterprise, industry specific, etc.);
- When scaling, you need a VP Sales who gets his hands dirty;
Early days strategies
- Marketing on the early days, set quota based on number of deals. Pipeline can be faked;
- Marketo started with zero discount policy, defined it once the patterns were there;
- Build a cadence for sales, a motivation machine. Create a spirit of winning;
- Salespeople are competitive;
- Motivation factors: #1 growth, #2 recognition, #3 compensation
- For growth: Encourage 6 months promotions,
- For Recognition: The leadership must recognize the champs. "Hey, i Saw that deal. Super important for the company". Have a president's club. Target for 20% of people. Make sure people get as much fun as they can't miss it next year
- For compensation: If you are great on #1 & #2, you can be ok at #3;
Sales Training and Operations
- If you have 8–10 sales reps and are adding 1 a month, you MUST have training and enablement. It'll payback faster than you imagine;
- Sales Ramp up benchmarks: SMB 60–90 days, Mid Market 6 months, Enterprise 9 months;
- Measure activities. If a rep is trainable and putting in the effort, give them an extra quarter;
Most interesting moment on the talk
Big Binch believes in specialization: "Hunting and customer care are two separate animals. I don’t lump churn and sales together."
Erica notes that in a product with "high adoption" it is great to have the AE involved in the expansion.
Customer Success: Upsells, Cross-sells and Expansion: April Oman, Dabid Obrand, Santi Subotovsky, Sarah Kokin
Key insight: They only people happy when the customer closes the deal is the salesperson. Finance gets happy when money is in the bank. Engineers are happy when customers actually use the product. CS is happy when customer is successful. Happiness == adoption. Move a significant part of sales compensation towards adoption.
Right time to invest
- Sometimes, prior to sales. Early goal = Solicit feedback;
- As fast as possible;
- For finding your first CSM: Look for consultative people, ability to learn from the customer;
- Retention is the most important, and first priority;
- Focus on user engagement, if you have it, you have retention;
- Customers that want to be a reference. Create passion;
Other notes, ideas
- Have a clear customer profile. Communicate it to the team;
- Have a clear alignment across your organization. Make everyone on the organization become passionate about CS;
- Don't sell to the wrong customer;
- Tie part of sales reps comission to retention/adoption;
- Have a consultative conversation with customers about their one-off requests;
- Support == cost, Customer Success == Investment;
From Day 0 to IPO: What Went to Plan, What Most Certainly Didn’t: Dharmesh Shah
Key insight: It takes more than technology to build something big.
Wrong assumptions (questioned):
- Having MBA's on team is bad. Hubspot has 6 in Management positions;
- Nobody succeeds selling to small and medium businesses. Hubspot is a billion dollar company selling to these customers;
- Focus on only 1 thing. Hubspot builds everything a marketer needs (landing pages, seo, smm, email, reporting);
- Charge early, charge often. Your product sucks, that's ok;
- Come up with a pricing fast. Do not rocket science it, make it simple. Hubspot had one pricing, one plan, for years;
- Label your industry. You sell transformation. Hubspot invented "Inbound Marketing";
- Don't be just a brand, be a movement. If you want to create a category, make people be part of it;
- Freemium hack: Instead of giving people a solution, give them a problem. A Diagnostic tool is a great freemium version, without freemiuns hassles. More on the topic here: https://blog.kissmetrics.com/hubspot-marketing-culture-sales/ ;
- Absence of cancellation is not proof of presence or delight. Hubspot created the customer happiness index;
- Lemkin notes: There are some customers that seem active, they seem to be using your product but they're actually prisoners, waiting to migrate from your product. It's tricky to find them;
- Q: How do you resist going enterprise? A: It is easier going upmarket, it is great. The downside is that it is very competitive. The SMB & mid market are infinite.
The Journey to a Unicorn — And How We’re Doing It Even Better This Time: Scott Dorsey, Gordon Ritter
Key insight: Make sure you become a must have, not a nice to have. Become mission critical. Talk to customers everyday.
- Your product needs to be acessible. Exact Target was laser focused on ease of use. Helping the non-technical marketer be able to do email marketing;
- Once a small company called Groupon signed via inside sales. A couple months later, they said. We're gonna be your biggest customer. The ability to serve small and huge companies is critical. SMB helps with virality. Some of those companies will grow fast;
- Have feature flags: Ability to turn features on and off is critical;
- Filled to go public in late 07'. A difficult moment, just like right now;
- Felt the need for a culture framework at 1500 employees. Omniture color was green, Salesforce was red, we wanted a part of it. Being orange was an advantage;
- 6 acquisitions, all worked incredibly well: 3 international, 3 product expansions;
- The reseller network was critical for international.;
- Selling to Salesforce was great, we were SF customers and had a great partnership. They were moving in the marketing cloud direction and it made sense. Salesforce is a PHD in SaaS (stayed for 1 year only);
- Great moment in Salesforce: Rehearsing Dreamforce keynotes online to all Salesforce employees. Every single employee could rate and comment.;
- Salesforce is incredibly fast;
- Integration is critical for success. Exact Target, Buddy Media, Radian 6, lots of companies working in sync.
That's it for day 1! Feel free to comment, suggest improvements and if you like it, please share it on social networks and send it to your friends that couldn't make to SaaStr 16'! Stay tuned for tomorrow.