LIVE Workshop Wednesday: AMA with SaaStr Founder & CEO Jason Lemkin

Welcome.

Thank you so much for joining.

Welcome.

We'll give everyone just a minute or two to join the Zoom. As a reminder, this is an AMA with our CEO and founder, Jason M. Lemkin. AMA means you have to have questions, so get your questions in the chat early. As you may know, these sessions at Annual, Europa, et cetera, They seem to never end. We have so many questions. So if you do want to ask your questions, get them in early. You may notice also we don't have a title slide up. We're looking forward to seeing your faces, making this as interactive and useful for you as possible. So if you can come off of video or come on video so we can see you while you're asking all of these questions. Speaking of Annual, we will be at Annual next week, Jason included. So we are so excited to see you all there.

It will be great. It will be great.

For sure it will be. With that, Jason, I'm going to introduce you, although you do not need any introduction. Thank you so much for joining today.

For sure. Yeah. Hey, everybody. Thanks. We've been doing— I think we've been doing these Workshop Wednesdays 3 or 4 months. I think they've gone pretty well. Right before Annual, we wanted to simplify things, so I thought I would just come in here and if we wanted folks to put their questions in the chat, we can just dig in and dive on as many folks as they want to. For folks next year, if you've been or haven't, SAS Annual is our big global gathering. It'll be the 9th one, our 10th year of doing meetups, which is pretty crazy. We will have well over 10,000 folks there, 7 stages, 40 acres, outdoor, indoor, festival vibe. It's pretty fun and hundreds and hundreds of like dates and mentoring sessions. If you can't come, one, we're going to stream a lot of the bigger sessions on Twitter and LinkedIn. They'll be on both me, SaaStr, and SaaStr Annual. I think we typically stream 3 stages, which is about as much as we can pull off. And then almost all the content beyond that, it'll be streaming. So it'll also live on our YouTube. If you go to the live channel, there'll be a ton of it there and on LinkedIn. And we'll also sort of edit transcribe and polish a bunch of the sessions as you've probably seen across all of our media over the coming months. So if you can't, it's a bummer if you can't come, come next year or come to SaaStr Europa in London next June. Come one year at least to SaaStr Annual. It's pretty epic. But you can follow, you can follow a ton of content on social media. And yeah, with that, again, put it, put it in the chat, right? Questions in the chat, Katelyn.

Yep. Questions in the chat makes it easier for us to see. I'll be messaging you to see if you want to ask that question out loud, come off mute and get to talk to Jason yourself, which I know you'll all be fighting for it annual. So if you have questions, please put them in the chat. We have one already to kick us off. What got you focused on sales? I follow a lot of VCs and we see so many of them talk about funding, funding, funding. Funding. However, it appears to be that you are the only one focusing on sales.

Well, look, I'll answer the question about me, but maybe in a more generic way that helps founders. How did I— why did I get so focused on sales? You know, the tactical, the tactical learning for me back as a founder, and this is some of the inspiration of the original content, is I made the same mistake at Adobe Sign, at EchoSign, that, you know, 70-80% of you make, which is My first VP of sales was the perfect logo guy. He came out of Salesforce and he was tall and strapping and spoke in a deep voice and knew how to say ARR and ACV and NRR and claimed he could recruit 50 reps in a week and did all of that. And our revenue immediately plummeted. We actually went from one rep and me, what we now all call founder-led sales. We just didn't know how to call it founder-led sales then. Me and one rep, him plus 10 reps and an SDR team closed less than me and Joe. So that was the classic disaster. Obviously our burn rate tripled. We almost ran out of money. I had to go without salary for a year and a half. And then as a Hail Mary, you know, I brought in Brendan Cassidy, who's done a lot with SaaS, as my first VP of sales. He had been the first head of sales at LinkedIn, and LinkedIn was one of our early tech customers. So I'd gotten to know him through a customer. And then in one of those fortuitous moments that happens if you do this long enough, when my first VP of Sales from Salesforce quit, flamed out after burning all the money, I got a text from Brendan that same week, hey, are you looking for a VP of Sales? And so obviously I pounced on it. I tried to recruit him initially when he was at LinkedIn, but it was hopeless. But when the timing was right, I recruited him. And then, so that's the story. What happened And the magical thing that's happened, and it will happen to so many of you, is that our sales doubled in 60 days. Our deals, it actually more than doubled. And I've written this so many times, but maybe it's worth explaining live why it happened. Well, what did Brendan do? How could he come in and double sales in 60 days? Well, the hint of the answer is that sales were higher before we had the mis-hire, right? So if you course correct, you're going to do better. So what did Brendan do? He— we had 8 reps at the time. He got rid of 6. Actually, he got rid of 7. So he kept 1 and he kept a young SDR we had, Sam Blonde, who then went on to be CRO at Brax and worked with us and now at Founders Fund. But he took— kept the 2 breakouts, 1 AE, actually 2 AEs, the 1 AE that worked with me, one that the VP of Sales hired, and the SDR. So he kept 3 and immediately brought in 3 folks that had worked with him at LinkedIn. So now we had a much better team. Just doing that, looking back on it, tripled our revenue per lead because instead of flushing these precious leads down the drain, we were giving them to closers. First, we took the folks that had already worked, the two that could close anything, we gave them more of the leads and we trained the new folks faster. So that plus running a more confident playbook. The other thing that had happened is it did help that, that LinkedIn was an early customer of ours because it meant that Brendan had used our product in the field. Right? He didn't know everything. He didn't know every workflow, but it didn't take 6 months to train him. And our first VP of sales, and this is an important issue, he lost confidence in us. He didn't think that e-signatures was a big enough category. Fast forward to today, you know, DocuSign's doing $2 billion, even Adobe Sign's doing almost $300 million. The category is big, but back then it was small. And look, our first head of sales had lost confidence, and some of that maybe is his fault, but it's my fault. It's everybody else's. So when I brought someone in new that had used the product, that believed in the product, that upgraded the team, that got rid of the underperformers, add that with the same leads. We had the same marketer who was good, but we had the same marketer before and after him. So we didn't actually change a single thing in marketing that upgraded the sales team in terms of who, confident, and knowing the product. It literally doubled revenue in 60 days and essentially tripled or quadrupled revenue over the next 12 months. And everyone has a profound story like that. I was just speaking. I had one of my last investments from my first batch in 2015 is an e-discovery company called Logical. And they and another company were bought for $1 billion cash last week. It was a joint acquisition, $1 billion cash, no escrow, no holdbacks, no anything. In fact, Andy is now sitting on a beach in Kauai. He didn't even have to work a day after the acquisition, all cash. And it was a good deal, especially today. But he got the company up to $35 million, his part of the acquisition acquired. And He and I were flipping through old investor updates at $35 million. At $15 million, his growth had turned negative. This is a company that just last week became worth hundreds of millions of cash, but when we were flipping back in 2019, it was like -1.8%, -3%, -2% at double-digit revenue. That's a disaster. I mean, I can't actually think— and Andy's great, the team's great. And I asked Andy what happened, and he's like, It was just a string of terrible hires. Like, they did not understand the product and they drove the thing into the ground. And so anyhow, and then he turned it around. He hired a great sales team himself and a few others, and they turned something that had a lot of momentum to total loss of momentum to restored momentum and turned this thing into something worth hundreds of millions of dollars. So his story is like mine. And when you go through that, to answer the question, you become passionate about sales. When you realize that, hey, there is no sales magician. There's no one that can come into a product with no customers and no product market fit and bring in 20 reps and change the world. That usually doesn't happen. But the magic is, if you have something, if you have some amount of traction, some amount of leads, some amount of demand, a great sales team and a great sales leader can do somewhere between 50% and 500% better than a mediocre one. 50% and 500%. And so you've got to just be a zealot about finding this talent, a zealot about finding the best talent at all levels, not just sales. But when I saw this incredible impact that Brendan did, once I had free time to blog and write and learn and invest, I decided this was a learning I could share with other founders. And I just shared it with a few. But then to finish my lengthy answer to your question, why am I passionate about this? Then once I started sharing it with other founders, I realized that, hey, at a given ACV, the lessons are the same. I know this is obvious stuff today, but basically the cadence at $3K ACV, at $30K, at $300K, they're all kind of the same. What the products do is different, but the playbooks, the way you staff these companies, the efficiencies, they're all kind of the same. So if you could get enough of the good folks together at similar ACVs and abstract the lessons, you really could help other people. So That's the answer. And I think everyone that has gone through one of these almost death moments and then hired a great sales leader ends up having, ends up having the same, same passion that I do. So good question.

And I love the names you dropped. Brendan and Sam are still so part of the SaaS ecosystem. Yes, that goes to show those great hires really do make an impact, not only in that moment but long lasting as well. Yep. All right. Our next question comes from Sanjay. If you want to unmute yourself and ask.

Or I can take it.

I can take it.

If he comes, great. Hi, Jason M. Lemkin.

Good morning. Yeah, my name is Sanjay from Mumbai, India. I'm super excited to attend this workshop with you and I'm I've also been very closely following you on Spotify, you know, your podcast with founders who have done some amazing stuff on SaaS. You know, it's just amazing.

Good to hear.

So my question to you is just I wanted to understand your point of view on the SaaS industry going forward, because the way we have seen SaaS sort of growing, you know, over the last couple of years, you know, it's already more than, more than a billion dollars or, you know, more than $30 billion market already. And there are a couple of enterprise areas wherein SaaS as an offering has already made a difference. So what do you think what this, what this industry or what this SaaS as a market is going to be in, let's say, next 5 years, next 10 years? And what are some of the areas of enterprise transformation, you know, which were previously very services-focused, you know, wherein a services company sort of used to come, give resources and build very customized softwares? So, you know, which are the areas of enterprise transformation that are still untouched by SaaS as an offering?

So it's a funny question about the stuff, what's untouched. And I was catching up with David Sacks from Craft Ventures, who was founder of Yammer and CEO of PayPal the other day, because we're doing a, we're doing a session at SaaS Australia next week together. And, and he had a similar vibe now that he had maybe 8 or 9 years ago that felt like a lot of the categories were taken, right? And I remember just before he started investing, we happened to meet and he wrote this tweet coming out of Yammer, and it seemed like everything had been done. Like there was a time, maybe 10 years ago, it felt like things like EchoSign and DocuSign and Yammer and Box and Dropbox were brand new categories. It seemed like everyone had a brand new category and that then folks rushed in and we had all the payroll apps we needed and we had all the CRMs we needed and collaborations we needed. And it really felt like that for a while. I remember David, obviously one of the deep thinkers here, thinking maybe it's all done. And then we were chatting the other day about AI and he's like, yeah, maybe a lot of the traditional SaaS categories are done. And so I think there's elements of that where things get full of vendors. But what I've learned is, and that's, you know, a reminder from one of the top minds in SaaS, but what I've learned is that every 5 years or so, maybe 5 to 7 in the enterprise, categories get reinvented. They get reinvented, and there's usually a reason for it. It could be AI right now. It could have been mobile 6 to 7 years ago. For example, I did a lot of investing in contact center. Talkdesk exploded and became a $10 billion leader. What happened? Well, it seems silly today, but they exploded because WebRTC worked in the browser, so you could run a call center in the browser. They don't really run on it today, but things like this, technology has changed, and we don't know where they're going to take them, but they reinvent the space. Platforms change. For example, you might think, goodness, what do we really need another email marketing platform? Goodness. Well, what's the first SaaS IPO to file in 2 years? Klaviyo, $650 million ARR, profitable, growing almost 60%. That's a pretty good one. The world didn't necessarily need another marketing solution, but what Klaviyo did was hyper-specialize in e-commerce and on Shopify, And that, that level of deep integration with Shopify and Shopify data remade a category, right? So verticals, platforms, technology. And so I— you ask what I think is going to explode or whatever. I'm not that smart. What I do know, though, is that these categories remake themselves on their own every 5 to 7 years, right? And they can come from new entrants or, you know, another one that's just both obvious and shocking. And we talked a lot about it at SaaS Annual last year was HubSpot CRM. So, you know, HubSpot and probably, you know, more than half of folks in SaaS use HubSpot now as their CRM, not Salesforce. And 10 years ago, that would have seemed crazy. 5 years ago, it would have seemed unlikely, not because the world didn't need an easier-to-use CRM, but HubSpot came from a marketing background, right? It did not seem natural to sell to sales professionals. And when the founders, Brian Dharmesh, came to SaaS Annual, you can watch last year, it's one of our best sessions, said, yeah, it's crazy. Like, Most folks would say, you can't do this. You can't take something that's very strong in marketers and sell to sales folks. And we knew it was crazy, but we knew what we wanted to build. We invested in this for 5 to 10 years, and we stuck at it. And today, it's over $500 billion of revenue. So sometimes innovation can come from different areas. And so look, I don't have the perfect answer other than that everything's going to get remade. It also seemed like, for example, another one, like all of the payroll and HR categories in some ways seemed well established, and then we had this global pandemic and everyone was running distributed teams. And all these folks like Remote and Deal and others exploded because all of a sudden we had folks working for us in 87 countries and all these jurisdictions. And so I don't have the answer other than that if it feels like you can't break out in a category, either find the area that's being disrupted, or the second point, and we've talked about this, Sasastr, Once someone gets big, find an area that's too small for them to pay attention to. So for example, we talked about how Klaviyo broke out in e-commerce, almost a billion in revenue by specializing in e-commerce. Another one I know well is another breakout leader in that ecosystem that I've invested in and that has done stuff at SaaS was Gorgias, and you can research Gorgias. They have about 12,000 SMB customers, and it's kind of like a Zendesk for e-commerce. That's a simple reason, but why do we need a Zendesk for e-commerce? I mean, Zendesk is pretty good. I mean, Zendesk has been around forever, and you could say, hey, it's It's a creaky old, but I mean, the thing works pretty good. Well, the e-commerce segment of Zendesk's business wasn't worth their time. It wasn't big enough. It was a $20, $30, $40, $50 million segment. Zendesk was at $1.5 billion in revenue. And even to grow 20%, they got to add $300 million a year. They don't have time to mess around in little tiny corners or little tiny verticals or little tiny niches. But fast forward to today, and, you know, Gorgeous itself has more revenue than that size of that entire niche 6 or 7 years ago. A niche is another way to do it because the big guys just can't invest the time in anything that is less than 10% of the revenue that's material. So that will— the niches that grow, not the niches that shrink, not so good, but the niches that grow will constantly disrupt categories in a way that the leaders see but can't even care about. So that's my second point. The last one is a bigger topic. Going from services to software, I mean, that's so hard, right? And you will hear 100 founders talk about how they failed, how they couldn't do it. But there's a lot of examples of companies that did go from services to software because services businesses usually don't have the greatest engineers. They don't know how to build the best software, but they do know their market. And if you know the one that Logical we just talked about that was acquired for hundreds of millions of cash last week, if you read up on them on SaaS, they did a switch from services to software and it was hard. And they had to drop a couple million dollar services business and they almost ran out of money by doing it, by going all in. But if you can get enough good engineers and build good enough software, there are plenty of folks that have done that who are— or so many others that we can think about that have gone from service to software. There's plenty of other cloud leaders that I'm almost forgetting now. Mailchimp. Mailchimp, you can look at Ben Chestnut's session we did last year. You know, Mailchimp sold— greatest bootstrap success so far, sold for $13 billion at a billion in revenue. It started off as an agency. And anyhow, what you'll learn from all of those, not to ramble too much, is you got to go in, you got to commit as much as you can, right? That's the answer. And you'll know what— you'll know the products the market wants, but your ability to recruit a great engineering team is what usually— where usually the services business stumble. They know what the market wants, but they can't build it, and they do it on the side, and they never go all in. And the markets are too competitive to do it on the side. Some good questions.

Yeah, thank you so much. Our next question comes from Siddharth.

Thank you, Caitlin. Hey Jason, my name is Sid, CEO of Yimbo. I just would love to understand like your content playbook. SaaSr has some amazing content.

Yeah.

To the extent that if like if my exec team or if the company have questions, I actually like, go to a SaaS blog and say, here, we need to do this, right? So, so, so what is your playbook? How do you build high-quality content with repeatability and consistency? Like, and what size is your team? Just like, love to understand, uh, uh, what you guys do behind the scenes.

Yep. Well, look, if for fun, second, I can answer what we do behind the scenes because it's unique, but why don't I first answer what I've learned Because I do think content marketing is so important, right? We, I don't think we, we, I don't think even 5, 6 years ago we fully understood the power of content marketing. But it's pretty crazy when you look at how companies like GitLab have exploded, right? How DigitalOcean exploded on the developer side. When you look at where HubSpot, how HubSpot exploded on the B2B side, it's all from content marketing one way or another, huge amounts. And so we, it took us all a little bit by surprise to realize how powerful this could be with the, but then of course what we did all did was we did a B-minus, C-plus job of it. We outsourced it. We hired someone on Upwork and we do use some good Upworkers ourselves, or we hired some junior person fresh out of school to write some generic content. And we all learned that doesn't work. No one needs the 11th most boring article on compliance in your industry. It doesn't work. So we're all caught in a conundrum. Everyone wants to play this playbook, but no one has the time or the skills to do it. That's the ultimate issue, right? So I'll tell you my view across my experience, the companies I've invested in, the folks that do the mediocre outsourced content stuff, they hire someone to write blog posts or outsource a boring podcast. I just haven't seen that move the needle for anyone. I just haven't seen the move in the new one. Having said that, it's funny, I actually didn't know this. When you look at the SaaS Annual last year, when Dharmesh and Brian were there from HubSpot, they challenged themselves to each of them had to write a blog post every day in the early days of HubSpot. Each of them had to write a blog post every day. And if you wanna know the secret to SaaStr, I've written one blog post a day since 2012. So how many days is that, Caitlin? Can you do the quick math? What's 365 times the number of days since 12? And actually it's 2 because I, I used to always write a core answer. So that was 2 pieces a day for 11 years. So 2 times 365 times 11 is what? A lot.

Well, the 12 years one, once a day, is 4,380.

Okay, so I've probably written just shy of 10,000 pieces of content, right? Um, and it was interesting that Dharmesh— I don't know if Dharmesh and Brian write a blog post a day today, but they did to get it off the ground, right? So listen, that, that's— that the learning is you got to do it at the elite level. And it's interesting that the founders did it, right? So my meta learning and advice and I don't know everything, but I have absorbed a lot of companies. I've watched SaaS-ter is you got to do it consistently, but better and fewer is better. Like, force yourself to do— it's like a work. It's like I've written so many times over the years at SaaS-ter, do a customer webinar every week. Every week, invite your customers and prospects, and only one will come the first week, and then two, and then three. And then say we've got 127 people live here and probably 80 on LinkedIn and wherever on social media. And it builds on itself. But you know what happens with that weekly webinar? Like no one wants to do it and they skip a week and then they skip 2 weeks and then it doesn't happen. And then you restart it 7 weeks later. You know how many people come? Nuts. Nuts people come if you don't each week. So, you got to figure out some sort of cadence that you can do it every week. And then the second advice I've learned is pick your medium that you enjoy. If you have to do it yourself, do you like writing? Most people can, I can tell you, most people cannot write. Over 11 years of SaaSster, I have given so many leaders a chance to write a guest post on SaaSster. 90% of them never do it. 5% of them need 4 months and give me a 7,000-page document and ask me to edit it. I don't got time. And like 2% actually can complete the assignment. But if you're a great writer like Dharmesh and Brian were, write. If podcasts have a lot of problem with reach and distribution, right? But if you genuinely love talking to, say, customers or people in your industry, do that podcast because you'll be excited each week. To do that podcast. YouTube is a weird channel, but if you genuinely like the efforts to make A-tier quality video each week for your industry, then do it. Pick one, do it well weekly, and then supplement it. That's what performs, not outsourcing your tweets to some agency that writes the same tweets for 11 clients, right? Those are my meta learnings. And so actually it's the same, you know, if you really wanna learn the history of Saastr, there's a lot of other things we've done, which I might run out of time on, but literally I personally, even me just personally, has been writing 2 pieces of content, one and one, for 9,000-something pieces of content, as Caitlin said. And then we just built on top of it, right? And the last point I would add, and then for me, just to use this as a case study, how could I write 9,000-something pieces? I mean, it seems nutty. Are you like such a girl? Like, no. The trick is you do what you know and that you're pa— if you, the 2x2 is, you know, and you're passionate about it. It will take you a month to research a category you don't know about, right? Yeah, you can use ChatGPT now and do a little bit better work. But the thing is, here's the trick to all of this stuff. At least buy $1 million or $2 million in ARR, you're an expert in something. You're an expert in something. You're not an expert in a lot of things. People get on stage at SaaStr Annual that are below $10 million. Most of them are terrible because they try to teach you all the great lessons of life at $3 million ARR. We never allow them to be speakers because they haven't learned the lessons of life at $3 fine. But they have with 100 customers, 250, uh, 800, they've learned a lot of lessons in their industry. They know what 800— and if you know what 800 customers want, you have a pretty good idea what 8,000 and 10,000 actually want. You have become a subject matter expert. So make that your content marketing week after week after week. Add value to your industry, to your existing customers. I have never— and I'll finish this as the answer— if you just add value to your industry for real, Not fake articles, not outsourced articles. Think about what's the most important piece of value I could add today, this week to my community. That always compounds. And that's the story of Saastr. What each day, each week, what are the biggest mistakes I could— in the beginning, it was more about me. What are my biggest mistakes as a CEO I can share today? And then I would go on Quora. What answer can I answer very quickly that would add the most value? That 2x2, it just doesn't fail. So a long answer, but I think that's Pick what, pick what you're passionate about. Do it every single week, right? And add value to just to your niche. Forget about all the rest. Forget about getting followers or views. Add value to your niche. You do that consistently and you have, you know, something almost nobody else knows, you will eventually attract a meaningful audience. And I never see it not attract leads and customers. I've never seen it not attract leads and customers. And lastly, for folks that I wrote this blog post, it's related on SaaStr if you search for it, it's called blog posts, corporate, not my best title, but corporate blogs always work, but you have to do them for real or something like that. Corporate blogs always work. So go to our homepage, search our Algolia, search Google for it. And there's a great example. There is a company called RevenueCat that is kind of a dominant API today for mobile subscriptions, but I invested at just a couple hundred dollars in ARR, a little early for me, Actually misunderstood their revenue. I invested accidentally too early. Different story. But they wrote an iconic piece of content early. Now, they wrote a lot of posts, but not 87 pieces. And they wrote this one, they're doing mobile subscriptions, how to manage mobile paid subscriptions. And they wrote how it actually technically works in iOS, because it was very confusing back then in 2018. And they told you how to do it, how to implement it, where the pitfalls are. And no one had really written a piece of content this great on implementing mobile subscriptions in iOS and the amount of leads and long tail they got off this was epic because it truly added value to developers in this industry. Go read that one, copy it, add that level of value. And then just if it's text, the magic of SEO means someone's gonna find you if you literally have the most valuable piece of content in your industry. So long-winded answer, but I think we got into some interesting stuff.

Yeah, for sure. We have a lot of jokes in the chat. Or jokes and reality that large language models and ChatGPT will be doing all of this for us. But I think maybe part of being an expert definitely is important regardless.

So yeah, I really, I really listen. We could— let's go on to some other topics. I really, I really think— I'm not saying that large— that ChatGPT and LLM don't have their space. I mean, if anyone has kids, you know, it's already disrupted education massively. But, you know, it's never gonna create that subject matter. It's never— it may be, maybe, but I doubt it. I actually think what happens in every area as we think we don't need certain types of workers or sometimes, all it really does is just raise the bar. It just means that the content will have to be better going forward to work. Mediocre content will work worse and worse because yes, we are being flooded with even more and more automated content. But it actually means if you do do it for real, if you add value, it's actually— I think it's going to be even easier to stand out.

Yeah, there's a comment in the chat. LLM is effectively groupthink on steroids. I thought that was a funny comment. But with that, Matteo.

Hey, how are you, Jason? Big fan. Hey, just one quick question. You always talk about that. You know that if you have hired a VP, you get Like you get, you get to know in less than 3 months if the VP is good, right? When do you know you have a good sales rep? Are you up for a good sales rep or account executive? Is it for you like 3 months, 4 months, 1 month, 2 weeks? You know, what's your thesis on that?

I know that when you're doing sort of founder-led sales, when you're hiring the first reps yourself, you mean when you know they're good?

No, we already have like 3 or 4 sales reps that are selling very, very good. But like I'm just hiring more. But I think that these first sales reps were the first ones, you know, I was really with them.

I know this. There are so many— there's so many founders who will tell you this story. My first 2 to 3 sales reps did really well and the next 10 all failed.

Yeah.

So you're going to hear that story almost as often as my first VP of sales failed. You're going to hear that story, especially when you're running founder-led sales for a long time because you don't have a head of sales, right?

No, I mean, I don't have a VP of sales right now. I'm the VP because we're a team of like 30 people. We're making around $2 million.

So is the question, how do you maintain that consistent quality?

Yes, yes, that could be the question, probably.

Well, look, the reality is, first of all, oversimplify the answer. I don't think— and you're one of the founders, right? You're the founder.

I am the CEO. And we're making like—

okay. The reality is you're too busy. The problem is you're too busy. You're too busy. And you not, you can't put in the time for those first 2 to 3. You can for the next 7 to 8. You can't, you don't have the time. This training by osmosis with a couple super smart, like street smart reps, just it, I've never seen it scale much past 2 or 3 reps. So ultimately you have to take a pause and find a manager to train them, to onboard them, to scale them, to listen, to read their emails, to read their Zooms, to listen to Gong, to do all— like, someone's got to do the real work so that you can scale these human beings. Okay? You don't have that person today though, right? So all I can tell you is you have a choice. You can either get overwhelmed by managing another 3, right? Because it will more than double the amount of time you have to put in sales. That's choice 1. No one really pulls this off because they run out of time. But in theory, if you doubled the time you put with the team, you could double the team, right? Or if you want to wait until you have a head of sales, you've got to do something which is brutal, but you've got to put a formal training program in place. You've got to train them yourself or find a team leader, your 3, to train them for the first 30, 60 days, pair them up with a leader, have them do sales calls together, build training materials, onboard them yourselves, do weekly or biweekly training of the— you probably never did biweekly training before or twice a week. Bi is always very confusing. Is it every 2 weeks or twice a week? You probably haven't had to do twice a week training, have you? Or open sessions with with the sales team or win-loss meetings. You gotta do all that stuff that a head of sales does. If you don't do all the head of sales stuff, they'll fail. So either you can hire someone to do it or you can do it all yourself. But if you don't do— and, you know, I wrote this SaaS— classic SaaS post that I've updated many years. You can read it and listen to it. Like, you have to train reps 3 through 300. They won't train themselves. You're going through that phase transition. You're not the first because I've rewritten this post 5 times over the years. But it's not going to work if you don't either hire someone or deeply become— not the CEO, founder, let's say— become the VP of sales yourself.

Okay, perfect.

Especially, are you more SMB?

Uh, no, we're selling right now to enterprise.

With enterprise, you have a little bit more time because the velocity is slower, right?

Yes.

But on the other hand, what happens in enterprise— and then we could talk about server break— what also happens in enterprise is when you get hands-off in enterprise you close nothing in sales because they answer. I was literally just talking with a founder this week about why his 3 through 10 reps failed, right? What was going on? And I'm like, well, what happened? He's like, well, I would do the intro call with the new rep and they would then just have to come back to me and I would have to answer all the questions. They don't really know the product. I'm not getting any leverage. So the amount of— the problem with enterprise is the velocity is slower, but the amount of training you have to do for people is really high to be it because they have to be the close— the more you are SMB, the more sales. The reality is it's transactional, the more it's 10 questions. Okay. The more you can write a Google Doc and a tear sheet. Here are the 10 questions you need to ask to beat SMB, to beat whoever, Canva or Zendesk, whoever. The more enterprise, those reps for a long time have to be subject matter experts. They have to know your industry and your workflow. And how the integrations work and how it gets going and how all this stuff flows and really what's different than the competition. And if you don't profoundly train them, they will— I bet they close zero. Okay. They close zero. Right? And I'll give you a last example. Another founder I was working with that's coming up on $20 million in revenue went through this himself. And to simplify, they would describe their product as Gong for support. Okay. Everyone uses Gong, right? So it's very easy to recruit people to explain to the world, hey, we're Gong for support. But, you know, it's not actually what the product does. There's, there's hints of truth to that.

Okay.

And these new reps that weren't trained for a while under a previous sales leader would get on and say, hey, we're Gong for support, how can I help you? And they would lose every deal. It's just not— it's not enough, right? So anyhow, Gotta train them. So either you're gonna brute force it, which is maybe you can do with enterprise because it's fewer people, um, but you gotta be the VP of sales, not just the boss. That's— I'll wrap it up there, but thanks for the time.

One more question. Any— I'm going to SaaStr, I'm thrilled about that. Any suggestion about, uh, next week? Like, uh, anything? Like, any recommendation? Is my first SaaStr.

The best, really, the— look, it's really fun and the vibe is different, but the best thing you really can do is lean in heavily on the brain dates. The brain dates are really going to be structured networking. And what a lot— we're pretty good at this. And there's a whole area in one of our hangars that's full of brain dates. If you have, you can register now on the app. If not, if you have to, you can do it on site. You can do one yourself if you want to share or join them. We have a lot of, especially folks that are in the scaling phase like you, they oftentimes spend the entire event just doing, doing these brain dates. They're one-on-one, one-on-four, one-on-eights, one-on-thirty, one-on-fifty sessions. Especially the smaller ones, you will meet— if you pick one that's around something you're really interested, like hiring enterprise reps 3 through 30, not only will you meet somebody, but you'll meet another 5 people in your session that are going through what you're going. It's the cheat code, right? So literally, a lot of the veterans spend almost all their days in these, and it's also full of VCs and other things if you want to meet VCs. But that's the cheat code. Go sign up for Brain Dates, hang out in a meet 'em, um, and You know, the core content is great. It's amazing to hear from the CEOs of Monday and Freshworks. And I mean, they're inspirational, right? But it's meeting these small groups in person that you can't, you can't do on the internet.

Okay, perfect. I applied to, I think, something with to meet VCs. I don't know if I'm explaining myself correct. I think I need to—

That's different too. But the Brain Dates are a whole massive area of small roundtables for meetings and networking and sessions. So look in the mobile app for Brain Date. I know we do a lot of communications or find it, or you can sign up on day, but they're called Brain Dates. And it's really the magic of the event.

Thank you very much. I'm looking forward to meeting you there.

Yep. See you then.

Of course. We also in the chat do have a recording of our attendee webinar. So if you're looking for an hour of advice, Taylor just Slacked that or Zoomed that to you. All right. Our next question will come from David Grant, if you want to unmute yourself and ask.

Hey there, thanks a lot. Great information here. Jason, you touched on it a little bit before, but maybe you could expand. Just what are you seeing in the market, right? You know, there's been a lot of talk about recession, pulling back, etc. Is that what you're seeing? What do you— what's your prediction next 12 to 18 months? And very specifically, do you see it differing by SMB versus enterprise, or different segments, you know, getting stronger than other ones?

Yeah, you know, actually, when I do my opener for SaaStr Annual next week, this is a lot of what I'm going to talk about. And so I, but I can actually, maybe I can do a 5-minute cheat code. If I can share my screen, I can show you a few answers because I really think it's one of the most confusing things going on right now. But I can try this one. Let's see if this works. Kaelin, is this good enough? Can we see this?

Yep, looks great.

Look, I'll just throw this out of order. There's kind of like a tale of— let's step back for a minute. There is a tale of two worlds today. There are the heavily impacted, in some cases, the decimated categories, right? There's the mildly impacted, and then there's the immune.

Okay?

Let me just expand the spectrum. The US economy remains on fire. Their unemployment approaches zero. Most segments of the economy are growing. Restaurants are full. Cars are struggling a little bit, but they're still selling at all-time pricing. Housing's a little tricky because mortgages are 99% interest, but if they were lower, houses would be selling like hotcakes. So when you look at some categories of SaaS that sell to Main Street, that sell to normal people and the normal economy, they're doing pretty darn good. So look at these two if you can see them. I picked two for next week, Toast and Monday. Toast is obviously restaurant technology. You can see a little bit of flattening, but still good growth. And then last quarter was a record. If you look at this, I'm colorblind, but I think it's red on the left. Is it red or orange, Caitlin?

Orange.

Orange. Okay. This is a record for them in terms of GPV because it's doing fine. Monday.com, and one of the co-CEOs, Aran, who's great, is coming live to SaaS next week. Monday's seen a little bit of acceleration, but one of the things that differentiate— one of the many things differentiates Monday from Asana or Atlassian or a few others is they mostly sell outside of tech. They sell to ordinary companies. They sell to companies in ordinary industries, and they remain a rocket ship, a jaw-dropping rocket ship. Klaviyo, that we talked about, that will be new to some of you, that's IPO, that just filed IPO, the first in 2 years, it's over $600 million growing 60%. They're selling to normal merchants that do e-commerce, right? And not that there aren't some impacts for e-commerce. So there are these folks that sell to the real world, to mainstream America. They're doing pretty great. Okay? Then there's folks that have sold into heavily impacted categories. Okay? The number one toughest one is a lot of sales and marketing stuff got decimated because they were the number one killed last year in what I call the app layoffs. Last year, big companies got together and they decided— not struggling unicorns, I'm talking about super successful companies in 2022. They all got their CIOs and executives together and they said, listen, we're going to get leaner, we're going to get fitter, we're going to cut 10% of our apps. Everyone got together and cut 10%. And that extra sales productivity app, that extra marketing app got hit first. It got slammed. And so, if you look at this chart on the left, ZoomInfo is the number one most successful pure play kind of sales and marketing public leader out there. Okay? We could talk about PubSpot and others, but ZoomInfo is the closest in terms of market dynamics to folks in sales and marketing. They actually held out good for a while. Then what happened in Q1 '23? Boom. Like they just got whacked in the head. This is— we use ZoomInfo, everyone— they got whacked in the head in Q1 and that was a low point. And then you can see in Q2 2023, it started to come back. You see this, right? But if you were like ZoomInfo, but not as good, right? If you're in this category, what happened in the 2022, 2023 downturn is the bigger you were, the less impacted you were. Okay, you know this, but we didn't know it going into it. The bigger and the smaller you were, the more you got slammed, right? So everyone was kind of like this on steroids. And if you were in some of the ZoomInfo categories, but not as big or not as strong, you saw this happen faster and bigger. You saw that negative growth that they saw in Q1 2023. Okay. And then the one on the right is just the craziest one because of the pandemic is Zoom, right? Zoom was just Crazy, because we pulled forward a decade of usage in one year. Zoom went from 1 billion to 4 billion in one year. It never should have grown that far, fast. Eric didn't want it to grow that fast, the CEO, but you couldn't help it. We couldn't leave our homes for a few months. You can see that Zoom got hit so hard, because what happened is massive churn set in from everyone that didn't end up needing that many seats. But what's interesting on the right is you can see Zoom finally after these quarters bouncing back. Not immensely because it got too big too quickly, but the first quarter of real net new growth you can see on the right. And the one I carved in is that their churn would actually used to be negative for SMBs, which was stunning. At least it's down for the first time. It's down for the first time in years. So we're seeing a recovery. We're seeing a cautious recovery. And this last one I put in, I grabbed some data from Maxio from their clients. You can see a cautious rebound at the bottom. This is what the data is showing. We'll never go back to 2021, but some categories never got impacted, some got slaughtered, a bunch are in the middle, but we're bouncing off the bottom. The app layoffs are over. No one this year is getting through and saying, "We're going to cut another 10% of apps." You're seeing the layoffs are over too. For the big companies, they did it, they're done, they got more efficient, they got fitter, but they're not going to do this every year. And so, you know, we're bouncing off the bottoms and we're going to all do better because we're lapping bad times. But exactly what the velocity is, no one knows. No one knows in SaaS. So a lot of answers on those categories, but that's kind of the summary of my thinking and we'll dig into it more next week.

Pretty good. Thanks.

Yeah.

So reminder, if you haven't already, buy that SaaStr annual ticket so you can see the rest of that slide deck. All right. Our next— I'm not sure if that was a question, but if so, put it in the chat. All right.

Yep.

With that, our next question comes from Taylor Wahlberg.

Hey, Jason, thanks for all the sage advice and wisdom over the years. I really appreciate it, especially as a young guy. My question was around kind of like the, the 5 to 10 customer range when you're pretty early. And for full context, I'm probably in that bucket of the one of the first 2 AEs you hire, but hired too early. So managing that product-market fit, still figuring that out. But really, how do you strike the balance with especially an enterprise customer who's very well versed on the procurement process and pretty stringent of being fully authentic about where you are as a company, as a startup, and where you're looking to go and getting them to buy into that vision versus is kind of playing the role of a well-put-together organization that has everything going on, 100 customers on the backend. Like, how do you balance that?

How do you do it? The fact you don't have enough cash in the bank, you don't have a big enough brand, and you're trying to sell to big companies. Yes. Yes. Look, there will be some sales folks that disagree with me, but I will tell you the correct answer, and you already know this, is 85 to 90% transparency. And first of all, you're going to get caught if you exaggerate too much, right? People are going to act like if you exaggerate your, you know, most— if you haven't been through this yet, big enterprises are taking a risk on you. They're going to ask for your financials, they're going to ask for your balance sheet. So if you lie and say you have $50 million in the bank and then you send them your Wells Fargo and it's $60, you're going to lose the deal.

Okay?

If you say you've done the SOC 2 and you haven't, which you should do if you're enterprise, you're going to get— they'll trust you in the beginning, but you're probably going to get caught, right? You're going to get caught on all of these things. So I think there are areas where you can fudge a little bit the margins, but you want to be 85% to 90% transparent. But two things, one which most founders don't get is the reality is in enterprises, they either form mostly formally or sometimes informally have a separate set of criteria for emerging vendors. Okay? Enterprises understand that there are— they need to bring in a handful of emerging vendors each year that solve holes. Okay? It's very hard to get brought in as emerging vendor if there is an identical app that is proven. Okay, if you have no differentiation. So to bring in an emerging vendor, you have to prove there is a specific need the enterprise needs that no one else has. And if you do, and your champion is willing to vouch for you, the standards are lower, they exist. And you might own— and they put you in a box, and they call you an emerging vendor, whatever they call, and they give you 2 years to get out of it. And they typically— you have to go— they have to go through a different process. They have to understand, are you just in a silo? Are you touching core confidential data, right? Because Maybe they want everything on-prem, but if you're really using a segment of the data that could be exposed, it's not the end of the world. They might allow you to use a little bit of the data, or they might allow you to try in one group where it's allowed and not in other groups. But everyone has a, frankly, a lower bar, but a genuine bar for emerging vendors, because I know you can't have it all. You can't— you're not public. And everyone has it. Even most interestingly, even if you talk, you know, the most interesting thing to me is actually the best built-out programs are often in security. And you might think, oh my God, why? Of all the areas, why would I take the most risk in security, right? But because secure— because you can never solve every security hole in your enterprise, right? You— everything is vulnerable, right? You can— security is an amazing space because it's never solvable. That they know that we have to try out some new vendors because the attacks are new each year, right? So ironically, even in the most secure segment of SaaS and cloud, they actually have the most leniency for emerging vendors. But you have to fit in a box where the risk is mitigated. So understand, like, there will be customers you will lose because you haven't done things. You can't fix that. Be 85 to 90% transparent, be trustworthy, and then let them guide you through the— this emerging vendor process and guide you in their own way, because they will know the risk they're taking. They will know they need to bring you in as that emerging vendor. Don't, don't fake that you're not. Thanks.

Of course. We are going to take one more question. If you do have remaining questions, please put them in the chat. We will use them for blog posts and other content in the future. So please put it in the chat.

Actually, if you guys put it in the chat, I will try to answer at least the questions that are broad. I'll try to do a separate one and push out to everyone that answers all the questions. So put your questions in before we leave. If I can't get to them, we'll— I'll do a— I'll do an offline session.

Awesome. Our last question will come from Jill. Jill, wherever you are, I want to be. Feel free to unmute yourself and ask.

Yeah, hey Jason, great to see you, and, uh, bummed I can't—

Mahalo.

I'm actually in San Diego at Paradise Point. There's a go-to-market conference here the next 2 days, which is actually a little bit of my, my point. And the— you talked about content and HubSpot and the category they created, inbound. Um, I just re-watched Yamini's keynote from last year's event, and she talked about, you know, really important is context. And you've mentioned this in your, in your content as well, but it's context of, of the customer and context of the market. And I think AI can do a little bit of that, but what AI can't do is really connection and community. And the, the idea of really— and you've done this with your content— is the who.

Right?

Who's done the thing that I want to do? Who's solved the problem that I need to solve? And it's less about the what and the how today because you can get that, you know, Google search and, and so forth. But the who really comes from living in market, which I think is, is, you know, a little bit of a different concept than going to market. And so emerging category, you know, I naming categories, but nearbound, right? And nearbound is, is more of a surround strategy.

Yeah.

Like, understand who your customers are, your ideal customers, who surrounds your customers, and how do you surround them.

I'm with you, Jill.

What's—

sorry, for the group, what's the question that we could dig into?

Yeah, what do you think about, about that? As you know, how do we fix go-to-market, right? Do we make outbound a little bit better with better data and more personalization? Do we make content, like you said, more niche, nailing it down and valuable? Or do we think more about like people?

Well, look, I'll give you an answer. I'll give you an answer you might, you might disagree with, which is good cuz you thought about this for many years. I'll just give you a, a higher level answer for founders. Okay. I think we don't, and this is, this, if, if this is taken out of context, it would be seen as controversial, but I think when you think about it, most folks would agree. Don't worry as founders too much about innovation in sales and marketing. Don't look for magic bullets. They're not there. Okay. We are basically running for the entire time I've been in SaaS. So many things have gotten better. Okay. We didn't have the tools we had. We didn't have Gainsight and Gong. We didn't even have Zoom. We were trying to, in the old days, we were doing async stuff on GoToMeeting. It was terrible with customers. Okay. But if you step back for a minute, the basic motions haven't changed. The basic motions of doing outbound well. In fact, it's gotten worse. We talk like customer success is 10 years old, but we've had account management since, you know, the 1480s. Okay. Marketing, the marketing tools are radically different. But the idea that you need to communicate on multiple levels, you need drip marketing, you need personalized content, you need to do events, you need to do all these things, webinars like Nothing is new, it's just getting better. And even everyone talks about PLG, but really some of the older timers like me, Aaron Levy, and others, we agree, but sometimes we want to just jump off the cliff or the roof when people say PLG, because PLG is just instrumented freemium. And what really frightens me, I can't tell you how many founders I talk to are getting into trouble, especially with their burn rates, and they're struggling. What are you going to do about your burn rate? Oh, we're going PLG. What? Okay. How is burning $1 million just because you put up a brand new self-service function that you've never had and probably doesn't work because you never architected your product for free or freemium? How is that magically going to change the trajectory of your company? All these things have gotten better. All these things have gotten better. And freemium, we've been doing freemium and viral since the start of the internet. How did Hotmail take off? How does everything take off? It's all viral. It's all word of mouth. Products are better. But so what I'm saying to founders is when you have no help, when you have no executives, pick something here that you know how to do and just do the best job you can. If you're great at outbound, go hustle, go get into deals. You can still— email still works. Email has worked for 20 years. The world's best email to a prospect that needs your product always works. It is hard to do that, but the world's best email to someone that needs your product always works. If that's you, that's great. If you're great at marketing, go, go do marketing. And then here's the thing. Just bring in great people in these areas. Bring in a truly great head of sales, head of marketing, head of customer, head of product engineering. They will add state of the art. But I really think that at HighLevel, we've been doing the same stuff for 20 years. We're just doing it faster and with better tools. So I don't think there's any— the last thing I'll say in my rambling answer is don't look for the silver bullet. There's no silver bullet. There's no magic tweet storm. There's no magic agency you can hire to do short-form video that are gonna change the face of your company. You've gotta just do the same stuff better and better with the tools we have today. And there's no shortcuts, guys. That's the real answer. There are— the internet will convince you, the world of solopreneurs, the world of multiple jobs at the same time, folks on LinkedIn, everyone telling you about the millions of dollars they're making from their courses and the 8 jobs they're working at the same time while they want to real estate agency, it's toxic. It is toxic. You got to put in the hours on the things that work. And there's— and again, I know we're out of time, Caitlin, so we could wrap it up. And Jill, we could chat about the topic more later, but there's no shortcuts. There's no shortcuts. Figure it out yourself what you're good at, and then don't lower the bar. Hire great people. They'll, they'll, they'll run with it, right? They will run with it. And the last point I'll make, one of these classic SaaS posts I wrote early, maybe I'll leave us with this. And I keep reposting it, but not enough people really read it and understand it. Okay? I honestly think this is one of the 10 best things I've ever written, but obviously, if I had written it better, other people would say the same thing. Okay? But this was actually something I copied from the old and updated for SaaS from the founder of Excite, where back in the day, Joe Krause had written that he didn't think he needed a lawyer at his startups at Excite, which was an old Yahoo competitor, until he met the best general counsel ever. And then he knew. Then he knew what a magical general counsel could be. And that's what I hear from so many founders. I don't need a head of product. I'll just do it myself or I'll have a kid do it. That's because you've never met a truly great head of product. I don't need a VP of engineering. My CTO will do it. That's because you've never met a great VP of engineering. On the go-to-market side, when you've met a truly great VP of marketing, a truly great VP of sales, a truly great VP of customer success, truly great, not a great LinkedIn, but truly great for today, you will change your whole mind. And you should become it. And even if you— it's okay, you got to go meet 30. And if you can't hire that amazing one today, it's okay. We talked about Brendon Cassie at the start of this. It took me a year to hire him, right, from LinkedIn. But at least find the greatest one in the world and meet them. Meet them online, meet them at Saastron, do whatever, and then be a heat-seeking missile to try to recruit one to your company because the best ones will take advantage of these tools and these changes and these in-persons and near sources and everything that Jill said. And just magic will happen. And you need a VP of everything. And if you don't think you do, it's because you haven't met a great one. Trust me on this. Go meet a great one and it will change your— it'll change your world. All right. Thanks, everybody. Any other questions in it? We'll try to assemble them and then I'll do an offline one and answer all the rest. Really appreciate it. Enjoy the beach. And everyone that's at SaaStr Annual next week, we will see you together IRL. Thanks, everybody.