AMA with SaaStr's CEO Jason Lemkin:Live From SaaStr Annual 2023

Please welcome to the stage Jason M. Lemkin, founder and CEO at SaaStr.

Okay, like this is good. Okay. Woo! Thanks everybody! We have fun? Good time? Well cheers, thank you for everyone from coming from like a trillion companies and spending a lot of time, uh, for our 9th SaaStr Annual. Um, we, uh, we have, we do this, uh, to the extent that I can be helpful for people for the last 3 or 4 events we just kind of do an open AMA at the end and tell people get tired or passed out or whatever. So I've got no more slides, already did, did several presentations today, but if people want to come up, uh, and chat about anything we've chatted about these 3 days or ask any other questions, um, just let me know, come on up to the mic and, uh, I will do the best I can to dig into anything, uh, anything I can. So we can kick it off. This is my second one, so it's super fantastic. Oh, thanks for coming. Yeah, no, I mean, this has been— this is the best event I go to all year, every year. Good to hear. Very, very, very surgical question. Series B company, should product marketing work for product or marketing? Boy, you know, honestly, I'm gonna— I'll give you my thoughts. I'm gonna take a pass. I don't— I consider myself a pseudo-expert in a lot of things, but not product marketing. Product marketing, I think, is a weird art. I think, I know folks here, marketers and productors and CEOs will challenge me. I think we over-index on product marketing. I think, you know, I was briefly an SVP at Adobe. I can tell you product marketing there is super important because everyone knows Adobe, right? Everyone, literally every business on the planet is an Adobe customer. They don't even have like contacts or opportunities at Adobe because everyone's a customer. So it's critical. I think these days CEOs and others are looking for too much magic from product marketing. Product differentiation is important, being crystal clear, but until you're massive, there's only so many people to product market to, right? So, the rambly answer, which isn't the question you're asking, is I do think we expect too much, even going into Series B, even up until 10, 20 millionaire, I think we expect magic from product market. I don't see it there, but who should it report to, right? Well, you're right, because product marketing is neither product nor marketing. That's the odd thing about product marketing. I don't know why we call it— it's not really building a product, and it's not actually getting you any new customers or doing any marketing. So, look, I think the answer— I'm gonna give you the same answer, and I have less certainty on this than I do other things. I think it's the same answer in the early days of who should my SDR team report to. Sometimes it's clear the SDR team should report to sales. That's natural, right? But sometimes what happens these days is you'll hire a first head of sales that has never done outbound, right? And you'll hire a head of marketing that's managed a BDR team themselves. So actually, sometimes it makes sense for marketing, for the SDR team to initially report to marketing because the head of marketing has more experience, right? They've worked in a sales-driven environment. I would say today, if you're not sure, should product marketing report to product or marketing? Whoever has more experience managing product marketing. And now having said that, the more technical your product is, maybe whoever's more technical can do a better job of it. But the person in product is probably not gonna be as slick and not gonna produce the brilliant imagery and tear sheet. And the person in marketing may not be as deep in product. But I don't have the— but generally when you're not sure between two functions, the right answer is not what seems logical in the org chart, but who has more experience. The last thing you want is someone managing a function as you're growing quickly. That doesn't understand the function. This I see again and again. Hiring a marketer that's never done ABM, have to figure out ABM. A marketer that has only done enterprise, having to figure out a PLG or self-service motion. It just, it's, it's, if you have no other choice, it works. But if you have a function that can float between an org, put it, put it where the person's done it. That's my best answer. Yeah.

Hi Jason. It's nice to see you again. And after seeing your dog yesterday.

Oh, Marilyn, thanks for coming.

Yeah, of course. So I am in the process of starting my own company and I am, of course, not, you know, invisible to the whole AI buzz that's happening.

And it seems like a big deal today, these last couple of days. I know.

Who would have thought?

Yeah.

So my question to you is, for early-stage companies or new companies that are starting out, yeah. Do you think they should find a way, if they haven't already, to add like an AI twist to or sprinkle some AI here and there in their product?

Well, look, first of all, I'm still learning. I'm a pretty pragmatic person, and it's funny, did you go to the first day session when I was with David Sachs from Kraft Ventures?

Yes.

And I thought his answer was very telling, and I'll expand on it. I said, of your $3.5 billion, how much of your new money is going into AI? I think he said 80%.

80%, yeah.

And then I asked him, And I've known David since we were founders together. And I asked him, what's the best product you've seen that's done AI? And he's like, well, there's a lot of good demos. So if you think about it for a minute, this is the conflict. All the venture money in SaaS is going to AI. Okay? I met a little while ago with Byron Dieter, who runs the whole SaaS cloud practice at Bessemer. We've been doing stuff together for years. He said the same thing. 80% of Bessemer's SaaS investment is going into AI. Okay? That's a fact. To the extent that venture investment matters, that's super important to understand. But the fact that one of the smartest people I know, founders, David, said it was mostly demoware is also telling, isn't it? So look, the answer is, and I'll— so let me, let me put it all together. AI does not magically make every payroll product better. I'm not sure it makes— we could ask Dorada, but looking here, I'm not sure it makes SOC 2 better, right? I'm not sure every app magically hooking into the ChatGPT API is going to change the game. I do think that every smart engineer today is inspired by AI, and they are playing with every API, every Claude, every anthropomorphic, every ChatGPT. And you've got to give your engineers and your product folks— I mean, you're tiny, you're starting, but you've got to give your team, even yourself, leeway to think, how could— where AI is today, and I think it's going to be radically different in 2 years because it's early. Where is it? What magical things can we do with our product? And you have to be thinking that way. If not, you're not state of the art, right? It's— you're not staying there if you're not thinking this explosion of creativity, can it make me better? But if it doesn't, it doesn't. Most of the stuff at SaaStr is business process software. It's changing the way businesses do support or sales or marketing or compliance or procurement. And AI probably is just going to make them a smidge better. Right. But so I wouldn't, I wouldn't. So I wouldn't be cynical about it. I wouldn't go around talking. I talked to too many founders lately who— what do you do? Well, I'm AI for that. I just stop. Right. Just stop. Just that maybe made sense 2 months ago. Today, everyone is assuming your product has AI in it. So start with what it does again. Start with a big problem you're solving, why it's different. But make sure you have a thoughtful response to where AI plays in it. That's all I would say.

Alright, thank you so much.

Thank you.

Oh, hi Jason. I'd like to know your thoughts on the future of lead generation software, and what do you think will be out of the competition between Apollo and ZoomInfo? I know you like ZoomInfo.

Well, I love Henry. I think he's one of the great entrepreneurs of our generation. I mean, this is I mean, ZoomInfo's at a billion-something in revenue, was bootstrapped. He did it himself as a first-time founder from the dirt with no money. I mean, that's pretty impressive, isn't it? Well, look, you almost asked two different questions, and I'm not a total expert, but you asked about lead generation, and then you asked about ZoomInfo and Apollo. Look, the thing is, I mean, the second half is data, right? And data for marketing, data for sales, data is interesting. Because it's never great, is it? No, no, none of these products are great. And I love Henry, I love ZoomInfo. I haven't used Apollo myself, but my team has. They let— people love Apollo, right? Um, but data is— data's like security, it can't be solved. Like, you can't solve security because someone else is going to figure out how to, how to take advantage of anything. And so that's why security is one of the most dynamic spaces, because it's not solvable, right? Data's not solvable. Data is not— you will never get the perfect database of every buyer of every SaaS company on there, every customer. It's not solvable. So what I just think is, and that's why it's interesting, so that's why if Apollo is as good as it's said— and I just haven't used it— if Apollo is as disruptive as it can be, it makes sense I would try both, doesn't it? It's like security. Like, there are very few enterprises that use one security vendor. Maybe in the old days they only used Check Point, okay? But today everyone's got 30, right? And so I think I think it makes sense to try heterogeneous sources of data. I think it's as simple as that. I think Apollo is good and ZoomInfo is good, and none of them will be perfect. You will always find crappy data, you will always find uncleansed data because it's not perfect. And so I actually think it's probably what's more interesting is that ZoomInfo kind of won for a while. I would have expected there'd be 3 to 4 vendors. You can say ZoomInfo is expensive, but I would argue if it works, you could buy 4 of them to get leads. Right. You can, you can always afford more. I'm more surprised there weren't more Zoom Infos. And I think there will be more. As much as we can innovate in the space, it'll be con— it'll be constantly, slowly innovating. That's as far as I think. In terms of lead gen, I don't know. I think it's fascinating. I guess my meta thought, and it's like my caution to founders, is the tools change. Apollo is newer, right? The tools will change. HubSpot, half the founders here use HubSpot CRM, probably 0% did 7 years ago, right? A different— like, the tools change. The tools get more sophisticated. The tools do scheduling and calendaring and meetings better, and they summarize your meetings, and they do stuff. But the basic motions in sales and marketing haven't really changed, have they? We do outbound, we do inbound, we do viral. Now we call this crap VLG. It's still viral. It's the viral of 20 years ago. It's the viral of Hotmail and other things. And You know, ABM is a more sophisticated version of targeting buyers, and we do these things, and we're doing— we all think we're content marketing experts, but we've been doing content marketing since the Stone Age, right? And so I actually don't see, you know, for example, one of the classic SaaStr posts I literally rewrite every single year is, if you do a great weekly webinar, it always works. This is so true. We even do it ourselves at SaaStr. If every single week at the same time, at Wednesday at 10 AM, you do a webinar for prospects and customers, and the first week only one comes and people are grouchy, and the next week two, and then three, and then a year down the road it's 20 and 30, and then they tell their friends to come, and they tell other people to come, this weekly webinar on its own will not make your company, but it always works, right? And how long have we been doing webinars? I mean, I don't know, since the 1820s or something like that. I mean, 20 years. So look, I don't— someone, folks here will, someone will produce some truly disruptive products in lead generation, but my advice is you gotta do the motions. You gotta do the webinar. You gotta do drip marketing. You've gotta do campaigns. Now maybe SMS will change it versus email, especially if you're in e-commerce, but it's the same basic motions just done with better tools and improved channels. And my bigger, my biggest fear is that one, founders think there's a silver bullet, Someone asked me this morning, "What do you think of the fact that affiliate marketing is completely disrupting early-stage SaaS?" I'm like, "I don't think it's disrupting it. I think it's the same old set of things. I haven't seen it. I haven't seen everyone doing revenue share here dramatically changing the folks that are here. I haven't seen that. I just see the tools getting better." So one, don't look for a magic bullet. And then two, and again, I'm not perfectly answering your question, but two, you've got to do them all. And people are lazier than ever in so many functions today. They don't want to do it all. They don't want to— I find it so hard to get anyone to do a weekly webinar anymore. People don't want to do drip marketing themselves. They think they're above it. They don't want to do events. They don't want to do the booth. They don't want to do the steak dinner. They don't want to do field marketing. They just want to be strategists. Everyone wants to be a strategist in 2023. And what happens is that means you don't do the basic. Instead of writing great content for SEO, you outsource it to some crappy agency that recycles ChatGPT content. You know how often that works? Nones. Nones. Nones. If you were here last year, were you here last year, per chance?

No.

Well, Dharmesh and Brian, the co-founders of HubSpot, came, and I knew a lot about— I knew them. But one of the things they did in the early days is for 2 years, each of them had to write a blog post a day about marketing. 2 of them. That's 365 times 2 times 2. What's 365 times 2 times 2?

A lot.

1,400 pieces of founder-created content. Not ChatGPT, not some crappy agency. That would write a post of how to do marketing, you know, great stuff. And so the problem today is people don't do that, right? So rambling answer, my advice to folks, you've got to run the whole marketing playbook for real. You can't be lazy if you do anything that works. If you, if you love podcasting and then bring a customer on every week, not once in a while, not once every 3 months, do a podcast for 52 weeks a year for real. Invite a great industry leader and talk about something that matters in your industry. Promote it, even if only 8 people listen, I bet one was a prospect, right? It all works. But if you outsource it to some agency to do a lame podcast once a quarter, it's a goose egg, right? So I think more consistency, new tools, same playbook. That's my view.

Thank you. Hi, Jason.

Hey, thanks for coming.

Thank you.

I'm founder of an early-stage company, and I'm both CEO and head of product.

Many are.

Sorry?

Many are. Yeah. Many are both. Yeah, many are both.

It's common, yeah.

It works until it doesn't.

That's the point. Exactly.

The point is, now that we've figured out the value of the product, which is the vision coming true, we want to move more towards PLG and help the client serve themselves a little bit more.

And I've never worked as a PLG. Product, head of product before.

Yes.

And I feel like it would be time, now it's the time to bring someone with a bit more technique and experience, but then the product will lose a little bit of the vision.

It will.

How do I balance?

How do I make this decision?

And what have you seen?

Okay, let me give a longer answer. First, listen, I was a product product-focused founder myself who, back in the day, we didn't call it PLG, we called it self-service and viral. Okay, I'd never done it. I wasn't an expert. There were no SaaS experts 15 years ago, but there were B2C experts that knew how to do this, right? I didn't know how to do it. What I knew was how to make a product that was incredibly simple to use. I was relentless. I— my CTO almost killed me because everything had to be easy, everything had to be frictionless, everything had to be onboarding. We had free and free trial, like Not that many people do free and free trial because it's conflict, but it forces you to make the product even easier to use, even more PLG, even easier.

Okay?

So I did it, you can do it. Like, if you've used software— So my point is, I think if you are a product-focused founder, there is no— And let me go to the second part. Too many founders these days, oh my God, at $1 million, $10 million, $20 million, I hear something in board meetings, other meetings, and I want to bang my head on the desk. And you know what it is? PLG is a silver bullet. Growth has slowed. Growth has stalled. What's the answer? PLG. No. PLG is nothing. PLG is like cloud. It's actually nothing. It is an amorphous term that, properly used, describes a set of actions and motions that is helpful. Improperly used, makes no sense. There are no cloud magicians. You can't hire someone to magically cloudify your application. And you can't hire— there are no PLG magicians. You've got to learn it yourself. You've got to do it yourself. And if you're product-focused, you can do it yourself. Hiring someone to do this will be a failure. That's, that's my simple answer. And it is not a panacea. It is not a panacea. If you cannot force your tiny team to go to self-serve, to do all this stuff, then it's not your DNA. The other problem with this magic bullet of PLG, and this has been true since we used to call it self-serve or viral, is it's not everyone's DNA, right? If you are, if you don't do, if you have a, an enterprise or a sales-led motion, you often have humans doing onboarding. You have to have humans filling product gaps. You have to have humans doing handholding, right? And that's fine in the enterprise. It fails in self-serve, right? Not everyone can do that jump. A lot of folks will, if the deal size is big enough, they will plug the gap from deal signed to go live with humans. A self-serve product can't do that, right? You're not going to do that. So, um, Rambling answer is don't look for a silver bullet. Going downmarket does not magically solve problems, right? And do it yourself. There's no magician. And I generally think— so to finish it up, and hopefully this is helpful, I do think these days founders actually hold on to being the head of product too long, which we could chat more about. But don't let it go too quickly. There's no magician. Where you want to hire a head of product usually as a founder is not to make the product better. It's when the product gets too complicated. Our products generally start off as simple. We have 4 people. How comp— how many workflows and integrations? And— but then we get 10 customers. Then we get 100 customers. Then we get 100 customers using 87 different configurations of our product. So 100 times 87 is 8,700 use cases. And as a founder, you have 5 hours a week. I don't care if you were a genius in the early days. You cannot remember 8,700 configurations of your product. That's your head of product's job. So you hire a head of product. But if you let it go early, you'll end up with a lot of Gantt charts and Figmas and beautiful designs, and you'll go nowhere. That's my thought. Thank you.

Perfect.

Thank you.

Long-time fan. First-time attendee? Long-time fan, first-time attendee? First-time question. First-time question.

Yeah. So maybe—

I hope you'll indulge a quick two-part question. So— As long as it's one part. Brief one. Brief one. Yeah. I'm interested in what the odds of success are. So, if there's 1,000 startups— Yeah, this math's crappy. Keep going. Don't listen. Everyone gets this math wrong. It's stupid math. But keep going. If there's 1,000 startups— In your experience, how many of them will hit $100 million in revenue as a freestanding company? Okay. How many of them have great founders and have great initial traction. So in your experience of 1,000 startups, how many have— Let me give, let me give you a fun example. So when I started invest— I've been investing for about 10 years and so I've only done like 30 investments.

Okay.

Here's my first 5 early-stage investments. First 5 early-stage investments. Pipedrive sold for $1.5 billion, now doing almost $200 million in revenue. Okay. Second one, Algolia, worth $3 billion, doing over $200 million, will IPO next year. That's the second one. I invested at $8,000 a month in revenue. Third one is TalkDesk. They're worth $10 billion. They're doing hundreds of millions of revenue. They will IPO yesterday. I invested when it was 5 people and 1 person in the United States who didn't even have a desk. Okay? Fourth one is Greenhouse, which is over there. Okay? They're doing hundreds and hundreds of millions of dollars and will probably IPO in 2 years. I invested pre-revenue. Fifth one was Salesloft, sold for $2.5 billion, 12/31/21. I was there pre-revenue. Okay, so look, it sounds like a humble brag, and it's not for reasons that we could talk about, but what— that's 5 for 5. 5 for 5. Okay, so the sixth one is an eDiscovery company called Logical that acquired Got acquired for $300 million 2 weeks ago. That was the 6th one, so 6 for 6. Okay? My point of the story, we can dig in, is you bend the odds. You bend the odds. Now, these all— now, some of them had a little bit of revenue. Some of them had none of those 6.

Okay?

They were all great founders that hustled, that acquired customers, and didn't quit and kept going. And we could talk about the different case studies because they're fun, because it's fairly diverse and different set of founders. But I just hate this math of 1,000 founders, one, only 1% will get to Series A, and of that only 0.1, like that's sort of true how you build your funnel, but the best founders bend the odds. The best founders bend the odds. So that's, of my first 6 investments, all 6 were wildly successful, weren't they? From $300 million to $10 billion from the seed stage. Now after that, I've done another 25 investments, and I think 5 5 or 6 of those 25 will equal the rest, but maybe 20 of them, 10 or 15 of them won't. And that's where the folks didn't bend the rules. The founders were good but not great, right? They didn't fully lean in. In some cases they quit. In some cases they ran out of money. In some cases they didn't try hard enough. In some cases they yelled at each other and blamed other people, right? But the ones, the incredible founders that never quit, that got customers, they just don't fail. Right? So listen, that's why the very first SaaS revenue in 2015, our tagline was, "From 0 to 1 million ARR, impossible." No one needs another product, do they? There's 100,000 SaaS products. 0 to 1, impossible. 1 to 10 is unlikely because that scaling's so hard. 10 to 100, inevitable. Inevitable. And that's still true today. If you can get it to 10 million, you have good NRR, and the founders don't quit, like even if you're growing 30%, Build a spreadsheet. You will go from $10 million to $100 million if you're patient enough. Even if you're at 60% growth, even though the VCs will not invest in you because you're not growing 100% at $10 million, if you grow 60% at $10 million, of course you will get to $100 million, won't you? So, rambly answer, but if I could kick anybody— give anybody generic kick-in-the-ass advice is don't look to these numbers for excuses. It's up to you. If you have a great set of founders and you have a great technical founder and great non-technical founder, two technical— like, if you can build kick-ass software for real, a lot of us can't build kick-ass software. A lot of folks have a good business person and a mediocre CTO or an outsourced development team. That's harder. OK, that is much more rarely successful. But if you have amazing founders who are committed for 10 years and understand the market, you are already better than 99.9% of the rest. Right? And you will not fail unless you let yourself fail. If you get to just 10 customers. Because if you get to 10, you will get to 20. Right? And I said this in the early days of SaaS, and people thought it was dumb. Now it's obvious. If you get to 10, you'll get to 20. If you get to 20, you will get to 40, to 80, 160, 320, 640. It always happens if you have a great team and you don't quit and you get better and better. You learn the industry better from that 10 you didn't expect, right? But then the 20 you learned. If you— I don't know if you were in the session with the co-CEO of Monday, Aron, on the first day, but I asked Aron, how come 70% of Monday's customers aren't in tech? Why are they in churches and agriculture and insurance? He's like, well, we ran Facebook ads and the tech companies were too hard to close, but we could close churches. So we became a church company. Right? Not literally, right? But they didn't quit. They leaned into it. They embraced what they were good at and did, and they kept going and going and building and building and building. And they went from $7 million when they came to SaaStr Annual. They had $7 million SaaStr Annual in 2017. Today they have $700 million. So is that, is that how— just, I just, so many people cite these numbers and I think they're dangerous for great founders. Right? So that those, all of that first group succeeded, right? But the last point I will make of all those, the Pipedrive, TalkDesk, Algolia, Greenhouse over there, Logical, almost, this is the last point I'm gonna make to founders, almost, not all of them, but almost all of them almost failed. So the most extreme example, so Logical that just got acquired, even in these tougher times, for $300 million a couple weeks ago. I was emailing with the founder, Andy, who's spoken here, you can watch his videos on YouTube, and I was looking back in our investor updates, At $15 million in ARR, their ARR growth was negative for 6 months.

Not—

it didn't shrink. It wasn't the macro economy or blah, blah, blah, blah, blah, or woe is me, or zerper derper warp. In 2019, they had negative growth. They hit $10 million really quick. They fell out of product market fit for a variety of reasons, and they went to $1 to $10 pretty quick, and then they decelerated after 2020 to '30. Most founders would have quit. Growth didn't slow to 30%. Growth went— I couldn't believe it when I look back. I forgot. I'm like, You grew minus 4-point-something percent at $13 million revenue, just sold for $300 million. If you rewatch Andy from Logical on YouTube and Saster, the best founders don't quit. They didn't quit. They didn't—

they didn't—

they got— maybe they got discouraged. I never saw Andy and Cheng get discouraged. I saw them and they changed their business model. They went to pay-as-you-go model and they changed their whole ICP and they gave up on selling to law firms even though they need discovery process. And then that didn't work. They sold different. And they just, and they hired a disastrous CEO who ran the company into the ground, and it took them too long to figure it out. But they got rid of the CEO, and then growth came back, and they got rid of the terrible VP of sales. They didn't quit, and they eventually found the VP of sales, and they never fucking quit. And they went from pretty quickly to $10 million, and then negative. It's hard in SaaS to go negative, right? Fast forward to $300 million. Not $3 billion, but pretty damn good, and the founders owned half. So not a bad outcome, right? So, thank you.

Hey, Jason. It's gonna be the same question that I asked you yesterday, but we had like a very, very short time.

Remind me, I'm getting a little tired.

Perfect. So, we're about to hit $2 million in revenue this year. When is the right time to hire your sales VP? And how do you know like that is the guy? That is the guy can take you to an A round or to the next stage? Thank you.

Look, the answer— I've written this, and no criticism, I've written this at least 80 times since 2012, but I'm going to say it again because it's really true. And I've had many conversations around it this week. If you can, the right, the perfect time to hire the VP of sales is when you have 2 scaled reps, when you do what we now all call founder-led sales. When Saastr started, I just said, you got to do it yourself. Now we call founder-led sales. Ideally, take founder-led sales to 2 reps that can hit quota. When you have 2 reps, you have the beginning of an engine. You have something that someone that has sales experience can replicate. Okay. So if you have 2 reps hitting quota, you can go out and hire your first stretch VP of sales, and her or his job will be to take you from 3 to 300. Once they have 2, if they're smart enough to understand the pattern, close some deals themselves, listen and learn to these 2, The good ones will listen and learn. The mediocre ones will disregard them. The 2 ones will see it's a blessing, and they will find 2 others like them. And then the next 2 will be a little less like them. And the next 2— as you develop a playbook and get some heterogeneity and some diversity. But if you hire a head of sales before 2 reps, maybe 5% of the time it works out. There's nothing for them to build on. There's nothing for them to VP, to be a head of sales. Right? There's nothing there. So if you wait too long after 2, then it's okay, but you're doing founder-led sales too long, right? Like, I think Daniel at Greenhouse is over here. If I remember, I think he was managing 10 reps to start at Greenhouse in the early days. It just took him a while to commit to hiring this head of sales. And so you can do that. And Greenhouse was very successful, but it's a waste of time to hire reps 8, 9, 10 yourself. Someone else that has done sales before can do that, right? So that's the moment in time. How do you find someone great Look, at the end of the day, two things. The first thing I've said a million times, but it's worth repeating because it's a top 10 mistake founders make today too. If nothing else, would you hire them without their LinkedIn? So the mistake so many founders make is, you know, oh, she worked at Twilio, or, you know, she worked at Mercury and FinTech, or Drata, or wherever we are looking out on this great thing. They worked at Expensify, or wherever you want. And you're like, I need that. Like, I'm doing something kind of like Expensify. If only I could hire this person, my problems will be solved. And sometimes it does help a little bit. But what we all make the mistake is we over-index on that. And so you got to like take their LinkedIn and put your hand on top of that, that Expensify or Drata or whatever it is, or G2, and say, would I still hire them? And usually be like, well, actually didn't really respond too quickly to the email, actually failed one of the interviews. Actually doesn't seem to understand our product, but it can't be that hard. It's like Expensify. That's the mistake we make, right? So would you hire them if it wasn't for their background? That's mistake number one. Mistake number two is you gotta hire a stretch VP. You gotta hire a first-timer. Not an SDR to VP, but you gotta hire someone from director to VP or head of to VP or something, but not a stretch too far. Okay, this is the tough Goldilocks thing. If you hire someone that was already a VP of Sales here, why are they gonna join you at $2 million? Probably only because they're terrible. It doesn't make any sense. It's illogical. They're probably not good. Okay? What you want is a stretch. What you want is the up-and— and the kid could be 20 or 60. I don't care about— so I'm using kid as a concept. You want the kid that wants it. The up-and-comer. But the mistake we make when we hire the stretch head of sales, the kid, and again, the kid is not chronological, is we do what I call, and you can research it on Saastr if you do the search on our home, say double search, we do a double stretch hire. And you can hire someone that only hired 2 reps themselves or 3 reps themselves that hit quota. If you hire someone that hired 0 reps themselves, it never works. The mistake so many, and I'll end with this, and I'll end with 2 more things. The mistake so many founders make, Andy from Logical that sold for $300 million made this mistake himself, is You're like, "I gotta take a risk on a kid, right? So I'm gonna go to Drodda." Again, poor Drodda, I'm using them right there, but it's a great company. And I'm gonna find, I'm kind of in the security or compliance space or something similar. I'm gonna find the number one AE. I'm gonna hire Elaine. She is the best. She closed $1.9 million at Drodda last year. She's a, everyone says she's a monster. She's great, right? All the reps say she's the best at Drodda. I'm gonna hire her as my VP of sales, okay? And Elaine might take that job because Elaine's ambitious. She's the best rep, right? She wants the ring. Not all reps want to be managers because there's downside, but she wants it. She wants it. And she put in the years and she put in 3 years at Drata and crushed it. But you know what Elaine never did at Drata? She never hired anybody. She was an IC. And she hit her number. What happens? And I'm making up Elaine. Let's call him Bill instead. Bill comes over from Drata, the number 1 rep, and Bill doesn't know who to hire. And Bill tries to hire the other folks at Drata, but they wouldn't want to leave Drata. And Bill doesn't know how to hire. Bill's never hired a quota-carrying rep. And Bill can't find anybody, and 30 days go by, and it's bad. And so Bill hires a random recruiter, and Bill starts bringing in random people because he doesn't have a network to pull from, and he doesn't have people to bring in, and he doesn't know. And the random recruiter gives him the really mediocre candidates, and they don't really want to work for Bill because he's never done this before, and he's not that polished. And you start hiring C-raps into it, and then everything spirals and falls apart. Part. Okay. So the ideal stretch head of sales, the ideal one is they're ambitious. They get it. You believe in them, but they have to have hired a couple people that hit quota. Two. If they've hired two, you can run the risk that they will hire 100 for you. They can reproduce that experience. But if they've hired none, I almost never see it work. And again, I'm having fun with Andiologica. They just sold for $300 million. I remember we literally had this conversation And I got in a lot of trouble for it. And he hired this top AE from this company. I said, "Whatever you do, Andy, don't hire this guy." Right? And it got me in trouble because he hired this AE out of another company I'd invested in. So now, I had two CEOs mad at me, yelling at each other. I told him not to hire him. I'm stuck in the middle. Hires like 5. Never hired anybody. All the next 5 people he hires are terrible. They close nothing. Right? So that's the long-winded summary of stretch, Don't double stretch. Put your hand over the LinkedIn and make sure you truly believe in them.

Thank you very much. You're the best, man. Before you go, if you're looking for your next stretch VP, give me a ring.

He's right here. He's right here.

You can do the rest.

You're not a double stretch. You're just a single stretch, right?

A single stretch for now.

Very good.

Always be prospecting, right? So, related—

Well, yeah, but let me follow up that question and answer yours.

Sure.

Related to the point is, here, when you hire your first head of sales, how do you know if they're a stretch or a double stretch? The great VP, like the seasoned VPs of sales always have like 10 people that want to work with them. They're working it between jobs, during jobs, on vacation, because half the job of scaling the sales team is recruiting. Okay? So the best sales leaders I know, I bumped into a bunch of sales folks I know here, they're constantly recruiting each other. Okay? And they always know, hey, when I do my— I love my current company, but when I do my next thing, Justin and Ellen are the two. You always hear Justin and Ellen are who I'm going to bring with you. A stretch VP doesn't have 80 people, but they better have 2 or 1. And when you go to interview that stretch VP of sales, stretch head of sales, ask them who they're going to bring with you. It's one of my classic 10 interview questions on sasr.com. And ask them, and ask them, and you don't need 50. When you're late stage, but make sure they have 2 and go interview those 2 and find out if they will come with them. Sometimes they make the 2 up. Sometimes the 2 are notional. They're like, oh, I'd hope to get Elaine and Bob, but I've never talked to them. A real head of sales is recruiting Elaine and Bob constantly, year after year after year after year. Right? I don't mean grooming in the slightly toxic or pejorative sense. I mean in the old-fashioned sense. They are grooming leaders. They are grooming their team. Month after month after month after month. That's part of the job. So if they have no one to bring with them, don't hire them. So a transition question. Okay. Ask your question.

So you just made my interview a lot harder.

Okay. Well, see, you might be a double stretch. I'm not saying you're not very good, but you might be a double. You might be a great double stretch. Right. And if you do. Okay. Last point. If you make the double stretch, if you hire someone that does not have anyone to bring with them, right. That has not. Scaled, at least hired themselves, not inherited a team, not inherited, not was given a team, but hired to themselves. If you're gonna do the double stretch, there's only one time it sort of works, is really early. Because if you hire a double stretch head at half a million in revenue, $250,000, and you can afford it, they have more time. They have more time to learn on the job, and they have more time to start as an IC, to basically carry a bag themselves, not for a week or a quarter, but to carry a bag for 6 months. right? And they can basically be a team lead. And if you love them, if you fall in love with them, you can give them, you can take a high risk that they will be good recruiters. But you got to go really early. You got to go really early.

Awesome. This is related to the topic, but the reason I'm asking the question is my company is going through an acquisition right now. I'm part of the acquired company.

Yes.

And, you know, I just learned about, knock on wood, Databricks acquisition. and so I'm seeing a lot of activity in the market. I'm curious, what's your perspective on M&A in the market over the next 6 to 12 months? What should founders be thinking about?

For founders? Yeah. Well, look, I do think M&A is definitely for companies that are north of $20 million in revenue that are not burning a lot of money, like the logical example from 2 weeks ago. There's a lot of M&A interest for a variety of reasons. There's a ton of interest from private equity firms. Private equity firms will buy any SaaS company with high NRR that are breakeven north of $20 million. Like, if you get to $20— here's a cheat code for founders, okay? If you're in any well-established category, okay, anything that's established, and you hit $20 million, you're growing even just 30%, and you have over 100% NRR and you're breakeven, Someone will buy you as part of financial engineering. If you're at $25 million and they have another, and you're doing whatever, they will slam two security companies together, one at $75, one at $25, each only growing $30, put them together, boom, you have one at $100 growing $30 that maybe in a year and a half can IPO. It's financial engineering, and the Tamo Bravos and the Vistas and smaller folks do it every week. So, I know it's not the question you're asking, and I'll talk about the current times, but bear in mind, and this is— I wish I'd known this as a founder because this started to change just after I sold my last company to Adobe. This hadn't matured yet in SaaS. There is an off-ramp as founders, just so you know. It's hard to build these companies, and in the beginning you just want to get anywhere, and then you want to get to $5 million and $10 million ARR, and then sometimes when you cross $10 million or so, you're like, "Frack." Look, I got something, but I'm, I'm not GitHub. I mean, GitLab. I'm not Okta. I'm not, I'm not going to IPO. I'm not going to IPO. And it's intimidating because what are my options? Right. And there are other things that can come up. But here's the thing that has changed in SaaS. I don't— again, if you can get to $20 million or more and $20 million is the trip line for private equity, if you get to $20 million or more with decent growth and modest burn, you will get offers to buy you. I will bet you dollars to donuts you will get offers. You will get cold calls from analysts at PE firms and others, and you may not want to do it, and you may not like the— love the terms, and you may be bought by something that's a little ossified or dated, but they— there are— is an army of capital whose job it is to buy these because they become annuities. A $20 million business growing 30% with 110% NRR with no burn, even if they never ship a line of code, as long as you keep the customers somewhat happy, or trick them into renewing, it becomes a 5 or 10-year annuity, right? So, um, so that is already picked up. Um, it briefly receded, but there's, there's more money in private equity to buy those 20-plus ARR low burn companies than, than Targets. There's more money than companies. And so you have this step-off point as founders. If you can just get to 20 with even mediocre growth, you do not have to be a rocket ship. This is not obvious. You might need to be a rocket ship to get bought by Salesforce or Twilio or something, because they want to buy a rocket ship, right? You might have to be growing 100% at $20 million to get bought by a tech company, but you can probably get bought by PE at 30% if you don't burn nothing, right? So that is all coming back. There's a surplus of capital. In terms of corporate M&A, the Adobes buying the Figmas and Salesforce is buying Slack, you know, that's murky because things are much better for public SaaS companies now than 12 months ago. That was my opener. You can look at the growth rates, the efficiencies, things are better, but multiples aren't great. The average public SaaS company trades at 6x ARR. Now, when Salesforce bought Slack, even Salesforce, which is real old, I think it sold at like 25— traded at 25x ARR. So when multiples are low, Big, big M&A is tough. It's tough because it seems very expensive, and the targets don't want to sell cheap. They don't want— you don't want to sell— no one wants to sell for 6x ARR. No one that finally got to $8 million in revenue is like really excited to sell for $48 million after 12 years. Like, they might do it, but no one's like, "Woohoo! 12 years, we get to sell for 6 times our ARR." So it's very hard to make M&A work unless multiples are high. And I think everything's much better in SaaS than a year ago. Not for everyone, but for many things are better. But that was my opener. Multiples are the big question mark. They're not great. And this will dampen— no matter what anybody says, this will dampen M&A. And everyone's like, oh, you know what, M&A is stupid. You should buy companies when times are bad and you should not buy things when times are good. It's not that simple because The big companies do better when times are good too. So when— so, I mean, actually Salesforce had a great year this year, but, but the multiple is still low. When you're trading at 20 or 30x revenue and you can buy something for 18x, it feels cheap, right? If you have to pay even 10x revenue today, it feels expensive, right? And so M&A gets paralyzed when multiples are low because the bargains aren't there, and no one good wants to sell. No one good wants to sell cheap. No one good wants to still cheap. So there's not going to be a magic renaissance, but since things are a little bit better in the public markets, I believe that every public company wants to do cheap M&A. So I think we will see anything good that can be required for $100 million, $200 million, $300 million that is good, not that it's pre-revenue, will get bought. But I think it will take a while for like billion-dollar deals to come back because the, the multiples are so low.

Great. Thank you.

Hi again. I actually have a question from my dad who couldn't make it.

Okay, well then that doesn't count. That is a repeat. Okay. What does Dad want?

His name is Andy. He's a founder and CEO of Unipr. Unipr. Yes. And his question is, what is your sweet spot for making the first investment in bootstrap startups from the point of view of ARR, number of customers, team size, and order of preference? And then from what type of business perspective, which do you prefer more, like PLG, SMB, or enterprise SaaS?

Well, look, let me step back for a minute. People miss— folks that are bootstrapped completely misunderstand how venture capital works. People that are bootstrapped think VCs don't like bootstrap companies. Nothing could be further than the truth. Nothing could be further than the truth. VCs love bootstrap companies. If you talk to Accel Partners, one of the top VCs of all times, they'll say our favorite investments were Atlassian, right, which I think they bought 20% of, bootstrapped. Qualtrics, bootstrapped, on and on. Why do VCs like bootstrapped? There's no one else on the cap table. OK, you can, within reason, you can buy more, you can control more, and it's simpler. If you can find a bootstrap company that gets to some scale, The last thing you want to do is have 78 other investors in the company because there's no room, right? There's just no room. So every— and Atlassian for a while, I mean, Accel had this practice and it's still there. They tried to hunt all of— when folks only want to invest in the Bay Area, right? Like anything in SaaS was terrible. They're like, no, we'll go to Australia and meet those guys at Atlassian. We've heard good things. And we'll go to Utah and meet Ryan Smith. They didn't care because they built real businesses, right? And they will tell you those are some of their best investors. Investments of all time. So VCs love bootstrapped for greed reasons, for selfish reasons. There's no competition. There's competition. There might be competition for the deal. You might get multiple term sheets, but there's no one else jamming up the cap table. So people completely misunderstand it. People think VCs are anti-bootstrapped. No, it is your best dream as a VC to be the first investor because you— this is almost a toxic term, but VCs want to control the die. They want to be the biggest investor. And have the most control and the ability to invest more if there's an option. They want to control the dice, so they love bootstrap. The problem is that they don't want slow-growing bootstrap companies. This is where bootstrappers get confused. And you'll meet— I just met a great set of founders here, incredible, incredible founders that got all the way to $15 million bootstrap growing 50%. Okay? 50% is not 10% or 20%. That, if they commit for another 10 years, they will build a 9-figure business, and they will be very rich and have a great journey. but no VC, no, a PE firm like we talked about will touch them at $20 million. Like, they'll get it when they cross $20 million, they'll get an offer for $200 million, but no VC is gonna invest at any price because they're not approaching 100% growth at $15 million. No traditional growth stage VC is gonna touch it, right? But it's not because they're bootstrapped, it's probably because— oh, and I talked to these guys and they're great, I love them, they're at $15 million, and I asked them, "How much cash do you have?" Because they're bootstrapped, they have $1 million on their balance sheet. So they don't have enough to invest. It's slowing down their growth. And that's the, that's the bootstrap bootstrapping paradox challenge, right? And that's why, you know, everything's hard. It's, you have to be an outlier to win, but the out, the Atlassians and the Qualtrics are rare. They are rare. It's, it's, it's a minority of the public SaaS companies, but there is no bot. There's VCs prefer bootstrapped, but they are not willing to give you credit on growth. That's how I'd summarize. They're not willing to say, oh, well, look, 50% growth is okay. It's because you didn't have money. But if I give you money, you'll accelerate to 100. A founder might believe that, but no VC is gonna take that bet. No VC is gonna say, you would have been 100 at $15 million if you'd raised 20, so I'll give you 20. There is founder logic in that. There is no VC logic in that. So, thank you.

Thank you.

Thank you so much. You've always been so helpful with your guidance and it's generous. You and your guests, uh, really big impact. Thank you.

Good to hear.

And the ones, uh, the weekly webinars are great. My question: for a large enterprise SaaS sales team, yeah, the AE ramp planning assumption is 6 months. Do you have any—

that's a stressor, isn't it?

Do you have any advice on moving it to 5? What, what might we suggest and do?

Oh, I don't want to move it to 5. Um, and listen, I know this is going to sound trite. This is what a great VP of Sales does. In Until then, you can't do it. There are no shortcuts, but a great— Do you have a great VP of sales today?

Yes.

That should be her job. Take a month off it. Because what a great VP of sales does is create more urgency. A great VP of sales listens more. A great VP of sales talks to more stakeholders earlier in the process. A great VP of sales realizes that even though Jason inbounded on your form, Jason Jason's not the buyer. Jason's never gonna write a check. You've got to get to Jim or Jane or Julia or Johnson. The junior AE is like, oh, whoo, I got this great deal that came in inbound. It's $1 million a year, but it's the wrong person, right? There's a million things a VP of sales will do to bring— to cut your sales cycles on the order of 20 to 30%, but not half. It's not possible. You can't accelerate procurement. You can't accelerate discovery past the At a certain point, if you need to do 5 discovery calls with 7 stakeholders, you can't do that in an hour. It can't be done. But I guarantee you, if— like, a great VP of sales should increase at least some things quickly 20%, make things 20% better. Maybe for yours it's not sales cycles. Like, maybe they're better at something else. That's OK. But I will tell you in my experience, one of the first— when a VP of sales comes in, they know time's the enemy of deals. Right? So if you bring in a deal quicker, it has a higher chance of closing. Right. And they know how to create urgency when it doesn't exist. Right. And they know how to quickly identify who matters in a deal and who doesn't. Just add those three factors together. Sales cycle shorten. They know. Right. And they know time's the enemy of deals.

Thank you. Jason, appreciate you. Around $11 million in ARR.

Congratulations.

Bought the company a few years ago. We have one person in sales, like a consultant. 100% inbound. We're just about to hire first VP of sales.

So it's mostly self-serve, or how do you do it with one person?

Like, it's a consultative engineer who does—

does $11 million of sales herself.

It's, it's ARR, so it's like a 15-year-old company.

Okay, okay, so the growth's slow.

Okay, yeah, it was slow. Okay, just hiring the first one. I know you mentioned that we should have 2 AEs.

You gotta have 2, you have to.

But we are doing the flip because we don't have have a salesperson. This guy's—

you still have to have two.

So we're gonna hire the salesperson and then salespeople.

No, you misheard me. Two.

We're hiring the VP first. I know we're doing the flip side, so I'm just wondering.

It's— listen, you're at $11 million. It's very risky, but you can hire the VP of sales first. You have— you, you may not have an established sales process, but you certainly have an established business, right? So I get it. So you're gonna hire the head of sales first. Okay.

So how long would you wait to hire the two AEs? Would you hire them immediately or would you have this person?

Can you, can you afford the 2 AEs?

Could.

Okay. So here's, here's my evolved, here's my evolved answer. And I've been thinking about this a lot lately. I'm going to update my Classics Astro post on it. You can hire, you have $11 million in revenue, so you can hire the VP of Sales. You don't need to hire a kid first, right? They've got to carry a bag and they've got to close a significant amount of revenue themselves and then hire 2. that's my question. They have to hire 2.

How much revenue and how long?

If you're— hopefully not much more than a quarter. Because you're running out of time if it's more than a quarter, right? Listen, I have— there's something I wrote a long time ago that got misconstrued, so I gotta deeply update it soon. I wrote a long time ago that— and now I'm gonna put some asterisks and daggers next to it. I wrote a long time ago that in some senses, Like too many founders get cheap in the early days and they want a VP of sales to not only be the VP of sales, but hold a full quota, right? So they can pay for themselves. That doesn't work. You can't even in this day of side hustles and multi-hustles and everyone running a real estate business on the side and courses on the side. As a sales leader, you cannot own a full quota and manage 8 reps. It's not possible. If you can't afford it, you can't afford it. So what I said years ago was, look, whether they should, they hold the quota when they start or not. Sometimes, yes. But it can't last forever. Right. And that is true today. But people somewhat misconstrue that to think it doesn't matter if they ever hold the bag. What I have learned is if they already know the product, if they're already a customer, if they've already sold it, sure. Like they could just be a manager. But I think 80% of VPs of sales today should close when they start. 80 to 90%, they got to close. Now, ideally, it's just a quarter or two and then they, then they assist deals. They join deals with their team. Because if you ask them to close themselves without any help for too long, you will run out. You can never grow. Right? But I would either ask them to hold the full quota or half a quota for a quarter, close 2, 3, 4 deals, and then bring in Jack, Jane, Jill, Joe, and Julia to fill it out. But the mistake I see, and I'm gonna rewrite this to be clear. I see this again. I was just talking with the CEO out here at $15 Million in ARR that I know who made this mistake. He hired a VP of sales that I know that's pretty good. Okay. And it's, it's a complicated product. It's not technical, but it's very complicated workflow. So he hired a VP of sales that actually was good, but came from a slightly less complicated industry. So that's hard. You want to hire someone always from something that was a little harder or more complicated. That's the other cheat code in sales. It doesn't have to be 10 times. Hire someone from a little harder, more complicated, and it'll be like gravity is lower at your startup. It will be easier for them. I'll tell you a story in a minute. If you hire someone from something that is great but easier to sell and yours is harder, they will fail almost always. Okay? So this VP of sales came into a product. He sold a product that was medium-hard to sell to one that was more complicated. And he never sold himself. He hired 5 A's. Okay? And I like this VP of sales. He closed nothing the first 6 months. He never learned it himself and he could never train his reps. And he never closed anything the first 5 or 6 months. Nothing. Yeah.

Just to follow up, do you have an opinion on solution engineering as a department within the sales team to sit, if it's a super technical sale, like 10 out of 10?

One way or another, you need a solution architect department. Whether that's the CEO or the CTO in the early days, which is often the case. Whether it's sometimes the customer success team will play that role. Whether you grab one of your top engineers to do it. The reality is, if you have a technical technical sale, there's always a solution architect, solution engineer, sales engineer in there. They're always in there. Once in a while you'll get an AE that was an engineer themselves, so they're wearing two hats. But even if they're wearing two hats, here's the learning. There's always a sales engineer in the deal. So you got to figure out, do they have to have the title? Like, no. Sometimes if someone else on the team can do it, great. But the biggest mistake in technical sales is when you hire a generic AE and don't put anyone, uh, no solution of any form? Yeah, no, no chance, right? Listen to their gong calls, you're gonna, you're gonna like blow your brains out when you listen to the dumb things they say. Like, does your product, uh, wait, what's an API again? I think our API, yeah, our API does that. Yeah, a hook web? We, we might have those, I think, I think we do. Which of the SOCs do you want? We have all the SOCs. SOC 12? Of course, we've got all, we've got all, You're like, and if you're especially if you're selling to like a VP of Eng or CTO, they're going to see through that in 3 seconds. They're going to, they're going to just click, click X on the Zoom and be out of there. Right.

Yeah.

Hey, I'm Christina. I'm the founder of OneSchema.

Thanks for coming.

Yeah, thanks. So we've been thinking a lot about product roadmap lately, and a lot of companies invest in multiple product lines on their path to $100 million ARR.

We talked a lot about that here. Spencer from Amplitude did, Jack from Lattice. It was a big theme. We talked a lot about AI this year, but multi-product was the subtle theme, right? Nick talked about it from Gainsight at the end. Yeah.

It can be incredibly distracting for both your engineering and product team and your go-to-market team to juggle multiple value propositions, customer types, and potentially neglect your core product. So how do you know when is the right time to invest in a new product line? Are there any red flags for when it's obviously the wrong time? And how do you think about what is fundamentally a new product line versus a very large feature?

A lot of really good questions. That could be a whole session, right? Let me give my overly simplistic answer to all of this. 100, 1,000, 10,000. 100, 1,000, 10,000. Now let me explain. No matter what you do, you're going to hit some TAM issues. People talk about multi-product, but the main reason great founders talk about it, like Spencer and Jack, is because they're starting to exhaust the market for their initial product, right? It's not a weapon or to make more, it's because they're worried that once you approach 10% market share in your, not in the whole world, but in your core ICP, your core market, it starts to slow down at 10%. The good news is your brand picks up at 10%, people have heard of you, they love you. So it starts to feel, it's weird as you cross 10% market share, 'cause it's both easier and harder. The good news is you're in every deal. You're in every deal. But the good news is, for reasons you're not sure of, things are still slowing down. Not radically. It's a weird thing. You're in every deal, but it's getting— it's because you're exhausting your micro TAM, your initial TAM. And in enterprise, it's often around 100 customers in a group. In mid-market, it's 1,000. And in SMB, you're lucky to get to 10,000 customers without hitting significant headwinds. Okay. So my rough, way too rough rules are enterprise, mid-market, SMB. Before you get even halfway to 100, 1,000, or 10,000, you better have a plan to go multi-product, or you will not go to zero, but you will slow down due to TAM exhaustion, right? So those are my numbers, but obviously enterprise is a smaller universe with bigger deals. So as you approach those, not cross them, approach them, you will exhaust your TAM. That's the tactic. And I've seen, we've gotten, you know, when we did SaaStr Annual 2017 in Milgram, it's funny, we didn't know this. And I did two sessions back to back. I did Jeff Lawson, CEO of Twilio, and Peter Gassner of Vivo, who had just gone multi-product. And that was very innovative at the time, because they were smaller, right? They were both crossing, coming up on $200 million and seeing these issues, right? But now it's well understood. You have to do it. But to answer your question, if you do it before TAM exhaustion, you may be stressing the team too much. You've got to get good at it. You want to go in SaaS from nothing to mini brand to brand. Mini brand is when the viral word of mouth loops in. You start to get pulled into deals magically. You don't know why. You get an inbound, "Hey, I heard of you from my friend Bob or Elena." Or, "You know, I was at my last company, I was at Gainsight and went to Vitaly, and I want to bring you in." That's like a mini brand. Like, you know, the world hasn't heard of you, but like in your core ICP, they start to hear about you. That's magic because you start to get this inbound viral loop. And then as you become a real brand, it gets— you're in every deal. Like, not everyone picks Salesforce for CRM that's here, but everyone kicks— everyone thinks— everyone at least talks about it, don't they? They're in every deal. So you want to get there because life gets easier, but as soon as you get there, you're exhausting your team. So that's your job as a founder, is not to go too early because you'll burn the team out. And so you've got to do this: am I approaching 10% market share? Not in the notional world, Not every restaurant in the world, not every SMB. You've got to be— your job as a founder is to be very rigorous. And in this case, define your TAM narrowly, like your core ICP where you get the majority of your revenue. And are we approaching 10% market share? You better have a second product by that point.

Thank you.

Yep.

Hi, Jason. Nice to meet you.

Thanks for coming.

My name is Wayne. I'm a first-time founder of a generative AI startup. It's funny that my question is pretty similar to the previous one, but potentially from different angle. Okay. A quick context is that we help businesses create their AI avatars and videos so they can scale up their video production.

It's a good space. It's a hot space right now. Right. Yep.

So the question is really simple, but we've been really struggling with that a bit. Like, do we go horizontal or vertical? So facing the possibility of using AI to create videos, there's lots of kind of sub-use cases. Like, each one of them makes sense. There's real customers asking us to do that. And we definitely would want to try, because no one else is doing that. And we have the competitive edge of doing, you know, first mover advantage. We tried some of them. They actually also work well. But the problem is that after we do 2 or 3 of them, our product becomes kind of weird. You know, it's like one product for not only one thing, but like 2 or 3 things. So it's getting hard to describe that, but it's like—

That's a problem. That's the problem with the horizontal platform. If it's hard to describe, it's tough, right?

Right. So it's a simple question, but we've been thinking back and forth all the time. We've been growing OK, but we don't know if it's a good decision to say, OK, let's focus. Let's stay laser-focused, people say. Or let's continue to expand to really do horizontal.

Look, I don't know the answer. It's one of the great— if you build a broad-based platform, especially one that has a self-service element, right?

Right.

You want to be horizontal. You want to be Zoom or Slack or Canva, like, because that's the biggest ham. Of course you want to be horizontal. And as product builders, we also kind of enjoy horizontal products, right? But even horizontal products have segments where they outperform, right? And if you— again, if you went to the Monday.com session with Aron, the first day. They built a horizontal platform at Monday, but once they started doing Facebook marketing, they found that insurance, churches, construction were the ones that performed, so they leaned the hell in, right? And so look, I think that the conceit, the, the founder arrogance or conceit, is that you can be totally horizontal, because even in a horizontal, you're gonna have verticals and industries that want to use you. Right? And you gotta get to 1 million, then you gotta get to 10 million, you gotta get momentum. And even these horizontal platforms are not, when you peek behind them, you'll often hear a story that a Loom really performed in this area, or Slack took off with developers early, became it before it became broader. I would, if you love horizontal and you believe that's your future, I would build an elegant, easy-to-use, onboarded PLG self-serve product that is that is beautiful, that is elegant for content or whatever you're doing. And then wherever you have any concentration of customers, I would lean the hell in like a vertical. It's not either/or, right? And going too horizontal is a dream because you still have to find the areas, the areas of strength where you're relative— you're— no matter what you say, everyone's feature-poor at this stage, right? And everyone also has a magical feature or you would have no customers. So you've got to do that 2x2 of where Feature-poor is OK because I have a magical feature and you've got to lean like hell in there. And then, and then if you do, I'll give you one last bit of advice related to the prior question of multi-product. The biggest mistake I see from like $2-ish million to $10 million that founders make is they over-diversify. They cross a couple million in revenue. They finally have something. It's more than beer money. It's real. And they're like, OK, well, we're strong in insurance, or I want to do all these other things. It's too early. You have rarely exhausted your TAM at $2 million. From $2 to $10, all you want to do is double down on what's working, get better and better and better. As you cross $10 million or so roughly, then go back more horizontal. Maybe for you it's horizontal to vertical to horizontal, even though we don't all think about horizontal to vertical to horizontal. But I think that's really the way most of us work because you've got to focus once you have something and put almost all your energy into what's working. And then when you have some fat on the system, when you have extra engineers, extra salespeople, extra capital, then you can do more experiments and you can invest in things that are more expensive or have lower ROI, right? But on the march to 10, don't do it.

Got it.

Thank you.

Thank you so much. Hi, Jason. My name is Chase. I'm the Chief Period Officer at Sanico.us.

Thanks for coming.

I practically stalked you online on LinkedIn and Twitter.

Good. I love a good stalker.

We've been building a B2B, just say Asana for Black period. We are building an employee productivity tool for women in the workplace who want to manage their menstrual, maternal, mental health. And we've been able to at least see that we're in the pre-seed stage. And currently, our secret— we wanted to be able to ask you for your secret sauce to be able to support pre-seed founders because truly there's certain startups who will continuously get this funding because startups are not able to at least write the same language that investors are looking out for. The struggle to come for conferences like this and even getting the right investment or flights and hotel to be able to be participant of assessing—

that is expensive.

It's, it's really ridiculous. And we see ourselves like very resilient to doing this. But we want to be able to ask you your secret sauce to be able to at least see for this SaaS TL fund, yeah, be able to support pre-seed funding. And we would love to invite you to Tulsa, Oklahoma. Thank you.

Well, look, I'm gonna— I'll give a quick— for me, I personally, when I invest, I don't invest before $10K MRR. I don't do any pre-seed because I'm not smart enough. I want to see 10 customers, 15 customers. I think my secret sauce as a SaaS founder that is passionate about go-to-market is if you're a great founder and you have 50 customers or 40, I'm pretty good at figuring out if you can get to 4,000. I'm pretty darn good at that. Figuring out if you can go from 0 to 10 customers, my track record is muddled at best. So I don't ever do it as an investor. I'm very narrow. To the broader point of this chicken and the egg issue, how do I— I don't have traction. I didn't come out of Stripe. I don't have the perfect connections. It's unfair. How do I get this pre-seed funding? Right? It is unfair. And the real answer is, look, it sucks. And the only answer is, one, to raise— if you really need money, find angels. And I mean angels in the traditional sense. Angels. Because you have not— you haven't taken off yet, right? So, there's nothing for a traditional financial investor to sink their teeth into. If you come to me and you're at $10K MRR and you're tripling and you have cool stuff, I can sink my teeth into something. I don't care where you went to college or who you know or whether you went through YC or Stanford. I don't— personally, I don't care about any of that. But I need some— everyone needs something to sink their teeth into except an angel. And that's why, as unfair as it is, why do the Stanford and MIT graduates so effortlessly get capital. And I don't care where anyone go to college. I don't think I've invested in any, but it's not irrational because it's some, it's some indicator. It's something. Why, you know, I was speaking with Michael Seibel from Y Combinator because he was here this morning. 85% of their batch get funded and they hit their funding target. 80, you know why it's 85%? Well, one, most of them are pretty smart. There's a filter. But for investors, it's helpful because it's a sign. A lot of them are gonna fail, but you know what came out of— some good stuff came out of Y Combinator. So, the earlier you are, you gotta look for some kind of sign. You gotta look for something. And privilege sucks, and being a Stripe alum is unfair, and coming out of YC is unfair, and coming out of Stanford, it is unfair. It is not fair. And I don't have the answers because the earlier you are, you gotta look for something. It is too risky to invest early unless you are genuinely Genuinely an angel. So, it may take you 2 years to raise this money. You may have to talk to every person on planet Earth because you aren't the Stanford, YC, Stripe alum, perfect everything grad who also closed $100 million at Salesforce and was the secret co-founder of Dropbox. You're not that. And it's not fair, but I know this is hard to hear for folks. It's not designed to be fair. Here's the last thing. People think that venture is supposed to be fair. It is not about fairness. It is— it maybe it should be about access, but it is a niche, niche, niche, niche investing category. It is a niche of a niche of a niche of a niche. Most VC firms perform terribly. Most— it is a terrible investment. You will hear this again and again. It is true. Most VC firms take— meet with thousands of founders and still do terribly. They're still terrible assets, right? It is a brutal, terrible industry where if you actually saw the numbers, most VC firms underperform NASDAQ. So why would you invest in venture if I can buy a QQQ ETF tomorrow and sell it if I don't like it? Why would I stick my money in venture where I don't get my money back for 12 years? It doesn't make— it's not fair. There are access issues, there are inequality, but the asset itself is so tiny and niche It cannot, it cannot create fairness. It is a, it is, it is a— and so if your job— so, so there is a classic thing in venture, which is the further you are from obvious, the further you are from privilege and having all the boxes, the further you're gonna have to go to raise venture capital. It is not fair, but it is also not unfair in the sense that you don't have the signs. It is unfair. Like, I'm not— but you— but if you get frustrated with it or angry or you'll get nowhere. And, but you have to be honest with yourself. You have to say, look, this is a little bit unfair, but tell yourself, have you checked any boxes? Did you put the decade in at Slack, right? Were you the VP of, of whatever at Datadog, right? They deserve something, right? I mean, maybe not, but there's a lot of data to say that the best VPs at Datadog once in a while build another Datadog. Okay? There is data to suggest that, but you don't have any of that, right? So, It's a come-to-Jesus thing where, again, I want to say because people feel like it is unfair, and it is, and they feel like it's biased, and it is, it's fucking biased, and it's unfair, but you got to understand it's not just a game. When this asset class doesn't outperform Nasdaq, like, it— understand the flip, you got to understand who's on the other side of the table, even if you don't like it, right? And there, they may be making fees, and they may be driving a fancy car, And that's a different discussion of how— but they're not making a ton of money. They're not delivering a lot of results. And so again, I say this just to be helpful that it won't— I don't think venture will get fairer for pre-seed. I don't think venture will get fairer for folks that don't check any boxes. It sucks. But venture is a business. And here's two last points. And I know founders especially haven't gotten this last 4 or 5 years. Venture capital is a niche, niche, niche industry. A niche asset class only designed for outliers. It is— the job is to find an outlier. It is to find a GitLab. It is to find an Okta. It is to find a Stripe. It is to find an Algolia. That is the job. The job is not to find a $10 million exit or a $50 million or $100 million or even a $500 million exit. The job is to find outliers, right? And Folks will take risk if there's signs you might be an outlier, right? The top engineer at Datadog. But if you've got nothing, you have to go further. You have to get— and then again, I'll— it's not fair, but typically if you're not finding true angels, if you're not hustling and finding folks that meet you personally and love you and say, I'll give you $25 grand, I'll give you $50 grand because I met this kid I love, that happens all the time, right? Aaron Levy at Box couldn't get anyone to give him a nickel back in the day, but he met Mark Cuban, and Mark Cuban gave them $500,000 and said, I like these 20-year-old kids. Kids, right? Then he got mad and asked for his money back because he didn't want them to go enterprise. He thought that was a terrible idea. And when they went from consumer to enterprise, he asked for his money back. But he liked those kids. Okay, that's an angel, isn't it?

Yeah.

But until then, you got to check at least one box. And that box— I'm sorry, it's a rambling answer. I hold this up for most folks with nothing, with no Privilege, with no Stripe, with no Datadog, with no YC, with no nothing. The box is revenue. The box is revenue and it's $5K, $10K MRR. If you come here next year, and I know it's hard, if you come here next year with $10K MRR and you're growing quickly and you do our Meet a VC program and you sign up and you share your numbers in your deck, you'll get 20 meetings. But that's because you checked the box, right? And I know it's not fair, but that's your job as a founder is to work the system, right? So thank you.

Would you be able to accept our invitation to visit Tulsa to speak to minority founders?

I could— when you're at $10K MRR, I will. Before then, I would waste your time.

Okay, thank you.

We got time for like these questions, but we'll probably have to wrap after these 4. Thank you. Hi Jason, I'm a huge fan. I've read a lot of your blogs on hiring the first AE. Thank you. And first 2 AEs. My question is, you've written a lot about the magical SDR at some of these early-stage companies. Maybe magical AE more than the magical SDR, but we can talk about a magical SDR too. Yeah. My question is I'm transitioning away from founder-led sales. $1 million in ARR. $1 million, you said?

Yep.

Ideally, you would. I just hired my first AE about 3 days ago. Just one. And then— But the post said hire 2, didn't it? My plan for the second one is essentially that SDR that we hired about a year ago from college, who just really killed it over the last year, promoting him into that AE. You got— You have to, or she'll quit.

Is that the—

second AE, or do I need someone with more sales experience and try to make it through? No, you can promote her. Look, I mean, look, you got— first of all, not exactly the question you're asking. You, you have to be— if you have a great SDR, you got to be communicating. Like, I, I think it's a— one of the top problems in SaaS structurally— I got to rewrite this— is that we don't have a good career path for SDRs. Lars from Cloudera— I mean, from, uh, he was at Cloudera, sorry, at Snowflake last year. He's the head of outbound. You can watch— he's been doing outbound since He's so great. Watch his session last year. We've talked a lot about this. It's a— he's trying at Snowflake now, but there's no great career path. The best SDR should be able to make $150,000, $180,000, $190,000. If they can bring in massive business, they should. But instead, they all want to quit after 8 months and be an AE. You can't fight it today. Maybe you can be the one, but you're trying to fight human nature. So when you have a good SDR, you got to be communicating with them. What are your goals? And maybe you ask them to be an SDR for another quarter or two. But most of them, unfortunately, and this is why it's exhausting to build an outbound team, the best ones will wait a year at most. So if she or he is saying, I want to be an AE, if you don't give it to them, they're going to quit anyway. So that's your second. So that's your second AE. And I think that's fine for your two and go hire another SDR. That's your A/B. Now, the beauty is this is great because you're going to run an A/B test. You're going to have one more experienced AE that doesn't know your company or product. Then you're gonna have the SDR that probably will work out, but might not, but knows the product cold. And you're gonna get your A/B test and you'll see how they perform. And you'll do a better job of hiring number 3 or 4 AE based on the A/B test. So it's good. Perfect.

Just want to clarify.

Thank you.

Hello.

Thanks for coming.

Thank you. Switching tact a little bit. I want to talk about the journey from $10 million to $100 million.

Okay. The inevitable.

The inevitable.

Yeah.

Uh, you've, you've alluded a bit to the difference between seeing this as a PE-backed journey versus a VC-backed journey.

Yeah. Or purely bootstrapped, but yes.

Or purely bootstrapped. So what advice might you have for someone who has seen this journey on a PE-backed financial engineering path a number of times as a leader in a SaaS company and is considering the VC-backed version of this? What are the key differences and what advice might What advice might you have?

Well, there's a lot of nuance to that that you and I could talk about offline, but might be too much for the audience. I think, look, it's the VC-backed. At the end of the day, two things about being VC-backed. Most VCs, at the end of the day, if you give it your all and make the money, they're fine with the outcome. Here's the paradox. But at the same time, they only want to invest in companies that can IPO. So, you cannot make money in venture. Oh, thank you. You cannot make money in venture If at least per fund you don't have a couple billion dollar outcomes, there's a few exceptions, but as a rough rule, not— let's say you do 30 investments in your venture fund, not all 30 have to IPO, but if a couple don't, or at least one or two, you'll never triple your money. And VCs, if they don't triple their money, they don't get another fund and their business dies. It dies very slowly over a decade, but they fail. They eventually lose their job as slowly as a human can lose their job. But you have to— so you need an IPO or two. But so they're not— if you're, if you're a good VC, you will not invest in any startup that you don't think has a shot of IPOing or better. Okay. But, but the mistake they make is as long as you don't raise too much money and you don't lose your investors' money, if you've done your best and you, you raise $10 million and you sell for $20, that's not going to make the fund, but no one's going to be mad at you if that's the right outcome. Them as long as they make money. OK, so that's kind of like the groundwork. So then V versus P, it's not that simple because P doesn't do early investments. They don't do other things. But, you know, don't raise venture capital if you don't want IPO. That's what I'm connecting. Don't raise venture capital, or at least let me qualify it with an asterisk and a dagger. Don't raise more than $5 to $10 million. Don't go to the double digits if you don't want IPO. If you raise a seed round, and you don't really want IPO, but you kind of tell the folks you do, it's okay. Like, yeah, it's not that much money in, okay? Raise $10 million, the stakes go up. Raise $20 million, $30 million, uh, you know, all these unicorns that are struggling that raised money, they're freaking miserable. They're not having fun. They raised $200, $300 million, and they have good companies, but if you sell that company for $300 million, it's a disaster. And it's not only a disaster economically, I don't want to run run that company. You want to spend 10 years of your life building a company to $300 million in value, but then you raise $300 million. So yeah, there's a little carve-out for management, but the employees make nothing. The investors barely make their money back. It's soul-crush— it's soul-crushing for the amount of our lives we put into these companies. So only raise double digits of venture if you're going for IPO. If not, PE is this fun— not fun, actually, it's not remotely fun— but this unexpected middle ground that may not be fun, but is an off-ramp with good liquidity that people don't realize. Again, my fun case study from these weeks, when Andy from Logical sold for almost $300 million, they gave all cash, no escrow, no anything, and he just left the next day. He literally just got back from his first vacation in 10 years at the one hotel in Kauai. Is it great? In a couple years, might he look at it and say, you know, maybe I wish I was still running it? Maybe we'll see. But that's a total off-ramp, right? Literally, you get acquired by HubSpot or Salesforce, they're gonna make you stay 3 years and be the SVP of something. You get acquired by PE and like, they got a guy down the hall, they have a guy, it could be a woman or a man, but they always have a problem down the hall. That's their job, to bring in another manager, another CEO. And so you may not love it, um, but it— that's how I would think of it as a founder. Are you willing to commit to IPO? And if not, and you raise more than $10 million, I think you're gonna be miserable in the end.

Hey, Jason. Good to see you.

Thanks for coming.

Thanks. Last time we spoke, after we went through the winter YC batch, we were doing a lot of founder-led sales.

Yup. As they all do.

We were growing really quickly, and we hired our first 2 AEs, and we sell to construction companies.

Okay.

And we had a lot of like struggles teaching them how the founder-led sales worked. And construction companies don't answer the phone or look at emails. So we tried outside sales going to construction sites and their offices and it started to work. So how do we know if we double down on that or continue down the like inside sales route?

Well, I suspect what happened was not only were you only doing inside sales, which didn't work, you were hiring like tech guys that didn't know the industry, and so no one would buy from them. I see this, you certainly see this in complicated technical products all the time, but actually I see this in vertical SaaS all the time, which is in vertical SaaS, the sales team needs some industry expertise, right? In like developer-led sales, if the early reps don't understand software, they don't understand how to build it, they don't understand how to spell API, They can't sell anything. There's a different problem as you take an Outreach or a Gong or these great companies that know how to— that are salespeople selling sales tools, and you put them into construction, and they just give the dumbest friggin' answers. Do you— like, I need to do this with load-bearing concrete across this. Does it do— oh, of course it does that. Are you sure? What's the amount of pounds per square foot for further— 7. What I see again and again is I see founders who are pretty good at finding— and they hire rep after rep after rep that worked at Dropbox or whatever, and 100% failure rate again and again and again and again and again. So if that's what you're seeing, or other folks, you're not alone. This is hard. You need to either be in deals with them or get them help or hire folks. We usually over-index on domain expertise. It's transferable to to some extent, but what's not transferable is going to something harder and more complicated to sell. It's not transferable. Maybe if you came out of the chemicals industry and you were really good and you wanted to learn construction, you give them 90 days, right? But you really understood the entire periodic table for sales, maybe construction's easier. But we go the other way, right? We hire those and it fails. And so, now you're finding that field works. And field probably works because that's where they are. But it might also work because they know the product better than they know the industry. But it might be two factors you're conflating, right? But whatever it is, you got to do more of that, don't you? Isn't it that simple? You got to do more of that, right? But my point is, and maybe we can break on this, but that first group, and again, you're not— tons of folks do this. They hire the Dropbox or the whoever, the Rippling, the Checker, the cool ones, and they all fail in vertical SaaS, right? You're going to— if you meet— if you ask who else is in vertical SaaS like you, You're going to hear that. You can have a beer here again. You're going to hear the same story again and again and again and again, how they ripped through 10 and they just, you know, they were, they were nice. Like they went to the customer dinner and everybody liked Bob or Bill or Elena or— but, but they sold nothing.

Yeah. So take nothing on the construction worker that wants to work in tech versus the tech that wants to sell.

That's super risky. But I don't know that you have a choice. The only other choice— there's a third path, which for some is the only answer— is you have to be in every deal. If you're willing to be in every deal, you can make a lot of personas work. That's— but, you know, you got to think about that, right? And related to that, and then we— that's an option. But another point is that so many folks in vertical SaaS leave, exit founder-led sales too early. Again and again, they exit it too early. I'm going to make up something that I'm not sure is true, but I'm going to do some work and I think it's right. I think if you exit founder-led sales in vertical SaaS before $10 million, you fail. You got to suck it up and you got to find the extra 20 hours a week. And I know you don't have time because you're doing product and you're doing HR and you're doing this and this and this. You're not going to get it. You got to be— you might have to be in every deal. You. I know it sucks. Yeah, but you might have that. I see this again and again and again. They leave it too early. And yeah, you know, you're selling the sales tool, you get some energy going, you hire a couple of folks from Gong and Salesloft, you plug them in, maybe you can kind of get out of a little bit of it. Never seen it work in vertical SaaS.

And wait until the AEs are just efficient before bringing on a VP at $10 million ARR.

But maybe bring in the— even when you— but here's the nuance. Even when you bring in the VP of sales, but you still have to be in every deal when you bring in the VP of sales. This— the real reason founders in vertical SaaS or complicated SaaS, the real reason they fail on the way to all the way to 10 is they finally hire the VP of sales and then they exit sales. And the VP of sales never understands construction or environmental science or the deep, weird niches of the contact center. They never understand it. And they run the genero playbook. Is it budgeted? Who are the stakeholders? And it just— it doesn't work. And so I would say whether you hire the VP of sales next week or in a year or whatever, you've got to be in every deal. At least think about it. Stepping out of the founder-led sales leads to just the plane crashing to the ground in vertical SaaS. So thank you.

Thank you. Hey, Jason. Thanks. It's my second SaaStr annual. It's been amazing.

Good to hear.

Yeah. So my name is David. I'm the CEO of Fondo. We make it easy for startups to file their taxes. Good.

That's what we all want.

Easier taxes, right?

Can you, can you get rid of our taxes too? Have you developed that product?

Up to 5%.

This is the first time I've actually ever paid taxes and it's not fun.

Yeah, it's not. We can help you get money back. So. Okay. But you've talked a lot about the IPO window opening up again in 2024.

Yeah.

And which is really exciting, especially all of us who might be raising money or thinking about it. Like, what is our valuation? What should we expect it to be?

Well, you're not going to like the valuation impacts.

I was going to say, what do you think the multiples will be and how long will it last?

Look, today— I don't mean to interrupt you. I'll answer half of it and you can finish and then we can— this will have to be our last one. The IPO window opening up is going to be good. It's going to mean that VCs will do more deals. It's going to mean LPs, who are the limited partners that give VCs, will give them more money because this last year was the driest year ever for VCs giving money back to LPs. VCs basically have 10 years to give the money back and more, but it ebbs and flows. 2021 into early '22 was a record of money that went back out. The last 12 months were a low point. Money is not— did not flow back. And it's all this great— you can even be cynical about it— it's all this great recycling, right? The LPs give the VCs money, the VCs give the startups money, the startups have liquidity, the VCs take 20% off themselves, they give 80% to the LPs, then the LPs give it all back to the VCs. and it's this virtuous circle. But for the last— the IPO market's been closed for 24 months, so the virtuous circle is broken right now. So when it reopens, liquidity will follow, VCs will get more money to invest. But if public— the average company is trading at 6x ARR, it's not going to inflate valuations. It's going to create more appetite for VCs to do deals, but it only at the margin will it increase valuations. Only at the margin. Only where there's like hysteria to invest, like certain AI deals. But other than that, unless there's massive competition, the valuations will remain mediocre.

And what do you think it'll be the biggest impact in the multiples once companies start going public?

Look, our job— listen, you know, I got to be honest, I've been— I was a founder for over a decade, and I've been investing for a decade too. I didn't even look at public multiples until like 2021, because I basically just— my whole life in SaaS, I basically decided— all of us that came up early, we basically came up with the basic rule, which is that the public markets went up and down. They were pretty crappy for a while, but good startups were always valued at 10x ARR. Not forward multiple, not this or that, but when I did Adobe Sign, EchoSign, when David did Yammer that was early, when Rene did Build.com, we all kind of came up together, when Peter did Viva, everything was like, it was either nothing or 10x. And once in a while there'd be a rare one that was was so off the charts, but, but like, it was, it was very flat actually. It was either like you couldn't get funded, and if you were in this very elite group, it was always 10x, right? And, um, maybe because I'm tired, I'm actually losing track of my question for the first time today. Uh, I think that's kind of the world we're going to be in again. Like, the multi— the public multiples are 6x. Startups don't have to be at 6x, but everything's outside of, you know, some, some great stuff in the YC batch. That's the world you're going to live in. It's a— it's back to a 10x world unless you're a crazy outlier, right?

Thank you.

Okay, thanks everybody, really appreciate it. Thanks for coming this year. London in June and back here in September. So thank you, really appreciate it.