SaaStr Build: 5 + 5 Takeaways in 5 Minutes
In September of 2020, I attended SaaStr Annual and wrote about it here. It was my first fully virtual multi-day conference; and there was a real novelty factor to it. Seven months and several digital conferences later, I’ll admit to eagerly awaiting the return of in-person industry events. Still, I was pretty fired-up to take part in SaaStr Build this week; and it did not disappoint. The return on my time-invested was high, with a mix of valuable takeaways and follow-up research to do. My hope in this post is to succinctly share some of my personal highlights with anyone interested but unable to attend the event. Specifically, below are 5 content takeaways and 5 general observations, hopefully in under 5 minutes of reading. Ready…go.
1. Growth Endurance: As at SaaStr Annual in September, the “State of the Cloud 2021 with Bessemer Partners” was a total highlight. If you can spare an hour, spend it watching the session (and you’ll still have 3 minutes left over to make a cup of tea). Among the gems was Mary D’Onofrio’s explanation of Growth Endurance (Current Year Growth Rate / Last Year Growth Rate) as a new key SaaS metric and a good explanation for (a) high current SaaS multiples and (b) the differences among the Good, Better and Best SaaS players. For the time-constrained, her introduction of this important concept begins at the 28:15 mark of the video.
2. Go-to-Market Rules: From the same session, Elliot Robinson offered a great summation of three G-t-M strategies deployed by top SaaS companies: (1) product led growth, (2) usage-based pricing, and (3) cloud marketplaces. While they are all compelling, I find the usage-based pricing topic to be most easily applicable to virtually all SaaS businesses — and one that we so often get wrong. As he eloquently nets it out, UBP is when customers can say, “I’m paying for what I’m getting value from.” Easy to say, hard to do. Jump to minute 38:51 of the vid to pick up at this topic. Separately…I was also excited to see Elliot include in Bessemer’s predictions for 2021 this forecast: “The vertical SaaS wave becomes a tsunami.” Yaaas!
3. Leadership: Another bright spot was a session led by Roy Mann and Eran Zinman, co-founders of Monday.com: “Our Top 5 Mistakes in Scaling with Monday.com.” Like millions, I’m a user of Monday.com; and I was intrigued to learn from Roy and Eran. They shared 5 things that worked well for them and 5 that didn’t; and they were disarmingly candid and self-effacing throughout. I particularly enjoyed the “5 things we’d do differently,” which picks up at the 24:42 mark of the recording. Noteworthy to me among these was, “Just because you have leadership…doesn’t mean you have a leadership team” (which picks up at the 30:59 mark). Oh man, so true…and so worth the effort to get it right. I’m reminded of Patrick Lencioni’s “5 Dysfunctions of a Team” and the concept of the “First Team” espoused by the protagonist Kathryn (beginning on page 135). This video and that book both hammer home this critical point.
4. 5 Metrics: My hands-down favorite session of the event was Tomasz Tunguz’ “The 5 Metrics You Should Track to Maximize Your Company’s Valuation with Redpoint Ventures.” The clarity and simplicity he brought to this confoundingly complex (but extremely important) topic is impressive and rare. Although there are no real surprises among the five metrics discussed (revenue growth, gross margin, cash-flow margin, net dollar retention, and sales efficiency), the double-click into each was invaluable. For me, the most enlightening was the explanation / discussion of Sales Efficiency (aka Payback Period) which starts at 15:24 in the video). That said, I feel this whole session is an instant must-watch for any SaaS company leadership team. Tomasz also referenced a forthcoming blog where he will explain how he translates these metrics into an actual company valuation. I’ve not seen that yet, but I believe will become available here soon — can’t wait.
5. Is This Cheating?: Truthfully, there are too many more content takeaways for me to concisely share here. So, I’ll cheat a bit and list three other sessions that were chock-full of goodness, and well worth the time to view: (1) “3 Reasons Why You Need Support Ops to Scale with Assembled and Stripe,” (2) “How to Make Customer Insights An Integral Part of Product Development & Company Strategy with Asana,” and (3) The Future of Events: What’s Next and Why Everyone’s Focused on Building Community with SwapCard.” Yeah, that probably is cheating…sorry about that.
1. Monster Year: 2020 was awful in countless ways. But the last 12 months have been absolutely insane (in a good way) for SaaS. And while SaaS’ growth is commonly acknowledged by anyone who follows the industry, this conference really put it in perspective for me. Armed with a trove of statistics to make their case, the Bessemer team described the recent past as a “monster” time, which seems pretty apt. A good reminder: when pandemic fatigue can make every day seem like Groundhog Day….that’s definitely not the case in the SaaS world.
2. To COVID or Not to COVID: As in every industry conference the world-over, there was a ton of talk about coronavirus — no surprise. What was remarkable to me was the dichotomy between references in the present tense (“…in a COVID world…”) versus a soon-to-be-past tense (“…as we emerge from COVID…”). It struck me that while the SaaS industry has generally gotten a lift from COVID, it will be interesting to see whether / how smart companies think ahead to the next phase of our reality while avoid being stuck in a moment that will hopefully soon pass.
3. No More “New Normal:” It’s official: my least favorite pandemic-era term is “the new normal.” Aside from it being an unwelcome reminder of bad-news and tedious lock-downs, I wonder whether it is instantly obsolete. “The new normal” strikes me as unnecessarily self-limiting, particularly for an industry as dynamic and fast-evolving as SaaS. The only thing that seems “normal” is a constant state of rapidly accelerating change…and that isn’t really new. Rather, anything normal seems fleeting. Okay…I’ll get off of my soap-box now.
4. Efficient, not Effective: In reflecting on my own participation at SaaStr Build, I realize that I have undeniably become more efficient in participating in virtual events. I’m better at navigating the sessions, flagging content I want to revisit, and simultaneously managing my typical non-conference workload. But was I a more effective attendee? No way. I was frequently distracted, more likely to miss scheduled sessions (though I could certainly access recordings), and generally more likely to session-hop (similar to how I flit around at in-person events). To be clear, this is NOT a commentary on the quality of content at the event — that was bomb-proof. This is more of an introspection around the limits of my own digital endurance. I’m reaching the end; and I suspect others might be also.
5. Freemium Wins Again: Many SaaS businesses have optimized around an effective freemium model. SaaStr appears to be one of those businesses. Admittedly, I opted for the free attendance package to this event; and I am quite grateful to SaaStr for the opportunity to consume such valuable content at no charge. So much so, that I definitely plan to upgrade next time — not because I didn’t get value from my free options…but, rather precisely because I DID. Freemium wins again.
Parting Thought: To make up for having cheated above, I’ll add one last point. I commented in September on the general air of uncertainty at that time and the silver lining at SaaStr Annual of a related (and welcome) vibe of community / humility among attendees. With SaaS multiples at all-time highs, that uncertainty seems to have been replaced with open bullishness at SaaStr Build; and the event certainly offered ample grounds for optimism in the space. My hope for the SaaS community in the coming quarter+ is that we continue to experience sustained market strength…AND / BUT that the same sense of community also endures. Here’s to 2021.