When you attend an event hosted by SaaStr, an organization named one of the Top 100 Blogs for Entrepreneurs by Forbes, it only seems right to come back and write a blog post about our experience. We had a great time at SaaStr 2022! Thank you to the organizers for such a great event, and it was a pleasure to meet so many other knowledgeable people.
If you don’t know, SaaStr Annual is the largest non-vendor event in the industry, with 15,000+ attendees from all across the world coming together in the Bay Area.
It was very valuable, bringing everyone from executives, entrepreneurs, and tech industry enthusiasts to one place to learn how to scale faster! The event was unforgettable, from the “Braindates,” valuable 1:1 time with other tech professionals, investors, and executives, to the overall energy of being around so many creative and inspiring min
Having the opportunity to speak to venture capitalists openly and honestly was a great experience. The overall takeaway from the venture capitalists at the conference was a much more conservative outlook than last year. Several talks were about extending the runway, doing more with less, and safeguarding companies against the potential difficulties ahead.
There were some standard metrics that VCs are looking at, including CAC payback and burn multiple. You are likely familiar with these terms for founders and investors, but they mentioned them enough that we thought it would be worth mentioning for other readers. If the investors are right about economic turbulence ahead, these metrics are going to be very important.
CAC payback is a valuable metric for the efficiency of a business. It doesn’t just ask the question “how much does it cost to acquire a customer?” which is usually followed by “how much is a customer worth?” (lifetime value). CAC payback asks the following question: how long does it take for a customer to pay back their acquisition cost? If you run a business with a CAC payback of 1 month, you are in much better shape than a company whose CAC payback is one year.
There are different ways of measuring this, including looking only at organic vs. paid channels, an all-in metric that incorporates all sales and marketing expenses, and more blended metrics that exclude expenditures like onboarding for new AEs or marketing experiment costs.
Similarly to CAC payback, this also measures the efficiency of a business. It answers the question: “for a period of time, what is the ratio of the company’s net loss vs. new ARR gained?” This measures capital efficiency in the business, and I like to think about it as the cost of booked revenue – very similar to customer acquisition cost.
As you might expect, growth was a big topic at SaaStr, and there was some good advice for growing teams and products. One of Expensify’s learnings was to democratize opportunity inside the company, meaning that anyone on the team could propose and tackle problems across the organization. This strategy gave the team greater autonomy and enabled them to grow into the successful business they are today.
There was also an excellent discussion with the CEO of Mailchimp, which had two great takeaways.
First, product-led growth (PLG) is a ridiculous term that describes something so fundamental to how Mailchimp was successful that it wasn’t even a priority – it was just how things got done. Second, counter to the advice of some VCs’, Ben mentioned that Mailchimp never made moonshot bets, which were too risky. Instead, he encouraged everyone on the team to tinker.
And finally, advice that everyone has undoubtedly heard before but is always good to remind ourselves of when building startups:
Among many of the stories of leaders scaling sales organizations, there was a good lesson that we think others might want to consider.
A sales leader’s critical job is aligning the sales team’s incentives with the business. If the sales team has a high reward for capturing logos, the team may exaggerate product capabilities, leading to further issues. The sales team described at SaaStr was offered equity bonuses for new sales. This way, the best salespeople had the most skin in the game.
In multiple talks, YC advises its founders not to hire a salesperson until the founder is bored of taking sales calls. And only hire more sales when your salespeople scream at you that they cannot take on more work, and more salespeople do not yield more sales.
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