Top 10 GTM Mistakes I See Founders Making Today with Jason Lemkin

As you know, we are here every single Wednesday at 10 AM Pacific with another great SaaS expert to go over their top lessons and learnings. And today we're honored to have Jason back with us to talk about a question he gets asked a lot about being successful as a founder and go-to-market strategy. So he's going to be going over 10 go-to-market mistakes that he sees founders making today and some strategies on how to overcome and what to do when you're stuck in these situations. As always, we know this is going to be filled with so many amazing tactical learnings and hot takes, as always reliable from Jason. We're going to have plenty of time for Q&A, so make sure to drop your questions throughout the session. And then we will have plenty of time to get you queued up to hopefully be able to ask Jason live and chat with him in person. So Jason, welcome. Thank you for joining us on Workshop Wednesday.

Hey everybody, I am Some of this stuff, if you've read SaaS or been part of our content for over a decade, some of it may be familiar to you, but I literally had probably a half dozen conversations with CEOs between $5 and $25 million in ARR just the last couple of weeks saying, Jason, can I pick your brain? And kind of busy, we have SaaS Europa coming up June 4th and 5th. I hope to see you there. But I did a few of these with folks I knew and I saw history rhyme. History continued to repeat itself. And look, the world is actually— I think the world for hiring, for people, for scaling is significantly different today than it was pre-March 2020. I think we've changed as people. I think expectations have changed in the workplace, but there's still just these mistakes we keep making again and again. So I thought I would to myself, dust off and think, okay, of all the founders, the great founders that I've talked to over the last 30 days, what are the mistakes we're all still making? I thought I'd list them out, go through some quick tells, some quick cheat codes so you don't make these mistakes. Then we can open it up, open it up to some questions. And this first one, when I started SaaStr, I never wrote this because I didn't realize how critical it was. It's that do not, whatever you do, Whatever you do, do not hire a head of sales that before day one can't demo the product. They can't demo the product. And I took this for granted in the early days. I'm not sure my first VP of sales could have demoed up. But the good one I hired, Brendan Cassidy, who had been— who went on to be VP of sales at TalkDesk and helped put together all the original Gong revenue team and was the first head of sales at LinkedIn. I didn't have to know this because he'd actually been a customer. LinkedIn had been an early Adobe Sign, EchoSign customer. So So I, you know, I, he didn't know all the nuances of the product, but I didn't have to, I didn't have to say, hey, did, does he actually know how to demo, use the product? He'd already used it 100 times. I mean, also frankly, if you sell a product that is sales related or revenue related, your sales team probably can pick it up if, if, if, if, you know, it's not that far from what they're doing. But the huge mistake I see founders still make is they hire someone that has, is selling a space the VP of sales hasn't done before. They're doing vertical SaaS, they're selling to governments, they're selling a more complicated product than they've sold before. And the VP of sales all talks process and people, people and process, and they have great demos and Gantt charts and org charts and talk about their hiring philosophies and their views of revenue attainment and quotas. And they just never learn the product. And I have found again and again, if they don't learn the product before they start, they never do. I'm not saying the best of the best can't, I'm sure there are some elite-level folks that truly can, but boy, they just can't. And I've seen this stumble again and again. And I just talked last week to a founder, just crossed $10 million ARR with a hybrid PLG sales-led motion that the PLG, the self-serve side's going really well, the bottom's up. The sales guy he's hired, it's been 12 months, hasn't closed anything. Hasn't closed anything. They've got the leads, they've got the groundswell, they've got the PLG, and it's a fairly technical product. So I stopped them. I said, Can he demo the product? He's like, no, he needs a sales engineer and a solution architect and his right-hand man. Ugh. I'm like, did you ever ask him to demo the product before you hired him? He's like, no, he came from this great company. And look, in the old days, in the old days before March 2020, I never saw a rep, let alone a VP of sales, be hired before they did a demo. Used to do it in the office, used to go in and you'd make them pitch in front of the whole sales team, the room. And we stopped doing this for sales reps in many cases, maybe not the best, but so many of us did. We, we lowered the bar when things were a boom. We all changed as we became hybrid and distributed teams. But boy, I gotta tell you, I think 80 or 90% of founders never forced the VP of sales to demo or learn the product before we start. So I can give you so many other stories. Another one, which I shared a while back, there is a VP of sales at another company that I loved, and he just went from a, a product that was somewhat complicated to one that was very enterprise, and the workflows were very complicated and very competitive. And 6 months in, he raised his hand at the board meeting when they were struggling, when sales had not gone up. And he said, listen, my number one mistake is I didn't know how complex this product was. And he took the job, you know, he took the bet. So look, slow it down. I know it is not too basic. If the VP of sales and the first 5 to 10 reps cannot demo the product on their own without you, without an architect, without 11 people under her or him, just don't make the hire. Do not make the hire. You don't have the resources, you don't have the brand, you don't have the brand to carry you when they can't be demoed. People will not buy in today's world just because it's a nice guy. Just in the old days, it was someone that golfed, and then as SaaS took off, everyone thought they could sell because they're a nice guy. You know why they could sell because a nice guy? Because the prospect already tried the product and wanted to buy on their own. Yeah, then being nice is enough. So whatever you— don't do this. If the VP of Sales before they start needs someone to demo for them, do not make the hire. I know they had someone do their demos for them at their last company. Great. Hire this person at $50 million, $100 million, $500 million ARR. Do not pass go, do not make the hire. And related to that, it's kind of the same point. If today a VP of sales won't sell when they start, if they won't carry a bag, if they won't do the entire sales process to start at least the first quarter or two, don't make the hire. Trust me, don't make the hire. Anyhow, before they start, make sure they can demo the product. You can even give them— if you're not comfortable for whatever reason doing this in the recruiting process, do it pre-offer letter or even do a post-offer letter. I do a lot of diligence now for candidates post-offer letter. Like if I've invested, a CEO introduced me to a candidate and I'll say, okay, Jane, Jim, George, let me tell you some reasons maybe you shouldn't take this role. Not because I want to talk them out of it, but I want to make sure it is a good match. And if they can't demo the product, give them a chance. Just say, Jason, before you start, Taylor, before you start, I want to make sure you can nail this demo so we hit the ground running and spend the time. And if they won't do it, I don't think it's the right place for them. I don't think they'll survive in this brutally competitive world. So total cheat code. I know 80% of you are gonna do this anyway. Don't do it. Okay. This is a funny one. I also talked with another founder in double digits, ARR $12, $14, $15 million the other day. And he said he wasn't sure his head of marketing was working out. And this goes back to one of the earliest SaaStr posts about hire the right Wrong type of VP marketing. You don't let them get blue pens with your logo on it. Go read that one. In its own way, it's as relevant today as it was back then. I said, why is your marketer not getting you any leads? Or why is not anything happening? He's like, well, I love Jim. He's doing this and doing that. I'm like, what's his background? Oh, he was a junior product manager at GitLab. Product— sorry, junior product marketer at GitLab. Product marketer. I'm like, well, do you know what product marketers do at large tech companies? They don't get you leads. They don't get you opportunities. They don't even know who's on the sales team. They segment your product and collateral. And I'm like, he's like, but I love him. He's so smart. I know he's smart. Sometimes at tech companies, the product marketers are really wicked smart on the product. I asked him, okay, how long has he been there? 4 months. 4 months. Okay. What has he done so far? Well, he's created a lot of landing pages for different versions of our product. And I'm like, oh, that's what you got. That's what a product marketer does. So now having said that, he made the hire. I actually didn't tell him to fire this person. What I said is, do what a product marketer do. You're gonna get landing pages and have them do a weekly webinar. They usually can do that and explain the product. Like they might not be good at the funnel, but leverage the asset you have. But he's never gonna get you what you need, which is demand gen. So don't hire, whatever you do is don't hire a product marketer cuz they smart and they love product and their LinkedIn says marketer. Don't hire anyone that says like corporate marketing, whatever you do, Don't hire someone that says communications. If it's VP of communications, VP of something in communications. I know folks that are in communication are gonna hate me for saying this. Never hire this person. They don't know how to get you leads. They know how to— what, as you scale, as your brand gets big, as people want to talk to you, as everyone wants to, you know, what's the most important marketers at OpenAI are probably communications, right? What, who knows what Sam's gonna say tomorrow or the other founders are gonna say or what phone's gonna or what's gonna happen with Scarlett Johansson. Okay? You don't need a demand gen. You need corporate. You need folks to manage how the world sees OpenAI. At a startup, you do not need that until your brand is at an epic level. Do not hire someone who's a VP of communications, corporate marketing, third one, whatever you do, just like the VP of sales has to demo the product where we start. This is my cheat code. I know a lot of folks are gonna be mad. Whatever you do, when you like, when there's a marketer you think you like, open up her or his LinkedIn. If the first line is strategist, do not make the hire. Do not make the hire because they'll never do any work. Everyone that's burnt out or tired or needs a team of 10, it could mean a lot of things. They may not be burnt out, but strategist means they need a team of 10 or they only wanna give you ideas. What it really means is they won't execute anything. Strategists execute nothing, nothing, not a damn thing. They don't send a campaign, they don't do a webinar like we're doing. They don't, they don't host an event. They don't write content. Strategists do nothing but give you ideas. You do need this marketing, you need about 3 hours a month. You need a good 3 hours a month, but that's all you're gonna get. Do not hire anyone whose first line in LinkedIn is strategist. And the final question, and this is an old SaaS Jerk post, this is true today. When you hire this marketer, ask them a Columbo question. You don't have to be a jerk about it. You have to say, hey, Jim, Jane, just lemme, what was your commit at your last role? And a real demand gen marketer or growth marketer will answer, my commit was 5 million in pipeline per quarter. My commit was 300 MQLs. My commit was 2,000 signups if they're growth. My commit was this. You can just ask it like an innocent Columbo question. The product marketers, the strategists, the corporate marketers, you know what their answer? They won't be able to answer. Or if they do, they'll pause. They'll have to think. Commit. You know, I did that back in 2019. What was it? I can't— A real marketer will just tell you the answer in 60 seconds. This is what I delivered. And also, it's almost always their first line on their LinkedIn. Instead of strategist, the first line on their LinkedIn is, I drove pipeline up 184% at my last role. Hire her. Hire her. Don't do it. Don't hire the product marketer you love. Don't hire the strategist. Don't hire the corporate marketer. Don't hire someone without a commit. Whatever you do, it's not their fault. They may have a great role at OpenAI or we're at whatever hot company that raised a billion dollars. They may be great for Notion or Atlassian. They ain't gonna work at your company. Okay. Third one. This relates to the first one, but it's the flip side. Probably the number 3 mistake I see with founders making today that have something that start to take off, and it's even more true today than the past, is they exit sales. They exit sales. I ask this question so many times to founders that are decelerating at $5 or $10 million. It's more common today because even though Fundraising is harder. When you do fundraise, folks raise bigger rounds. Even today, they raise bigger rounds. So they'll raise $10 million or $20 million, and the CEO will be like, thank God I don't have to do sales anymore. I hate it. I hate it. I hate, I hate like the picking up the, doing the Zooms and the same stupid question for the 11th time. I want to get what, and why founders do this is they almost always, it's the same reason. I gotta get back to product. I don't have enough time to work on the product. We're falling behind on the product. And look, there's a lot of truth in that. And It's why I really think you should hire a VP of product that is great far earlier than most founders do. It's not on my top 10 list, but it's super important. But it doesn't work that way. You have to do more in product and you have to do the same amount of time in sales. What changes? What changes is when you hire a great sales leader, your job will be different. You won't have to open and you won't have to close. You'll spend all your time in the middle. You'll spend your time being grabbed and dragged into conversations to help close deals because every single prospect and every single customer loves to talk to the CEO, even of a 5-person company, even of a 50-person company. They love it. So you will get dragged into sales. So you should not have to do the same things in the post-founder-led sales and sales that you do in the pre— in the founder-led sales. But you don't get that. You never, ever, ever get the time back. You never get the time back. So never step out of sales. I always see sales plummet when founders say, I'm, I'm just gonna be a product guy now. And this first point I see have accelerated the last couple years. Not only do they want to step out of sales, they want to hire a mythical CRO or COO that will manage everybody. Every founder, as things start to grow, they get burned out. They have too many reports. It takes too much time. There's too much drama. Taylor's complaining too much about this, and I'm tired of her talking about the campaigns. And Amelia's just constantly complaining about the feature gaps in sales. And I just can't have this conversation anymore because I got to work on— everyone say it to me. I know we're on Zoom, but I got to work on product. I got to work on product. So I'm going to have Taylor and Amelia and Bob, my sales, marketing, CS, they're all going to report to my magical CRO that I hired, that came out of Notion. And Notion, we use Notion, SaaS revenue. It's great. What is it? At $300 million in revenue? Comes in, that CRO doesn't really learn how to sell. That CRO doesn't carry a bag. That CRO doesn't have a product. That CRO actually does nothing about marketing or customer success. You know what happens when you force your head of sales, marketing, or CS to report to some CRO or COO that doesn't know the product, they quit. The good ones quit. They came to work for you. The great ones, the pirates and the romantics, those first VPs, they didn't come to work for that person you hired off the street that doesn't do work her or himself, that just hits refresh on the dashboards and tells people they gotta do better next week. They came to work for you. So tough transition. So listen, the COO and the CRO are not— you may make these hires. I think there's value in these hires. We'll run outta time. But they don't mean you get to stop managing sales, marketing, or CS. And it doesn't mean you get to stop doing sales. Don't do it. Revenue always goes down. There was never anyone on planet Earth that will understand all the nuances of the product, all the integrations that work, all the hacks, all the reasons why, all the reasons why you're better than the competitors. No one will ever understand this better than the founders. So you have to support sales that way. You don't get to get out of it. Fourth one, this one is new. I don't even think this happened in 2008, 2009, when literally the entire global economy shut down, when the country of Korea prohibited cash exports, when every single store in downtown Palo Alto was boarded up with plywood, the global economy was so bad. We still didn't cut marketing to zero, even then. But you know what? I see all startups that are struggling today, they're cutting marketing to zero. They're cutting marketing to zero. And this is your job as founders and executives, is to find the balance here. Look, if cash is tighter, obviously the first thing we look at are variable costs. And honestly, the bottom 10%, if things are tight, you got to move the bottom 10% out. They never do anything. They always consume time, energy, and resources. So as tough as layoffs look in the media, look, a 40% layoff is brutal. Laying off the bottom 5%, you find the next day everyone does better because Jason's always dragging down the sales team. He closes nothing. He's complaining. He never follows up with the customers. He never finishes this or that. So, that helps a little bit, but then you're looking at your variable costs. What do I cut? And I can't, there's so many things. I got to ship the code and I got to keep the servers up. And so, you cut marketing. You cut marketing because you know what? Jim had $4 million last year and yeah, He did some pipeline, but if I could just get all that budget back, that's how we're going to do it. And so listen, some of this is natural, but if you cut all your marketing, you're cutting your future. You're cutting— I talked to so many founders who the growth has slowed and I said, how's your pipeline looking? It's like, well, it's really slowed down. Well, how much are you spending on marketing? Nothing. And what are you doing? Oh, we're doing all free stuff. We're doing our new podcast. We spent 3 months working on our podcast. We got the same 11 guests on the podcast everyone else has, the same marketer selling her courses and the same sales guy selling his courses that's on everybody else's podcast. It took 3 months and we got over 80 downloads on the first one. Okay. Yeah, that was free, air quotes, hate air quotes. It was free. But think about all the soft costs and time you put into that podcast or that you're okay, we're just going to do content marketing because it's cheaper. Great. Is this content like so amazing that you did on ChatGPT or outsourced to some service? No, it's terrible. It doesn't work. Like, you gotta do the free stuff. It always works, but it's never, almost never enough unless you have an inherently viral app. The only thing that really works at scale and free is word of mouth. You have to incent word of mouth and you gotta at least do that marketing. So What's actionable here is just this final point. What you got to do rather than cut it to zero, unless you're literally running out of time and runway, you have to decide if you trust your head of marketing or not. Do you trust them? Do you trust them? If so, come up with a budget. Okay, last year was $10 million. This year it's $5 million. Maybe it was $30K a month. Now it's $10K a month, but don't cut it to zero. Trust them to take that $10K a month and spend it, or $30K, or $100K. Trust them to spend it as effectively as they can. And not have everything have to convert tomorrow. That's a problem too. Marketing doesn't work if everything has to convert tomorrow. Marketing sequences things. It's sequencing things over time in your pipeline. And if you cut all of that, yeah, I get that maybe you'll help the short-term stuff, but you're going to sacrifice your future. And I'll give you one last example. We have over 200 sponsors at SaaStr. We talk to a lot of marketers and we talk to a public cloud company doing billions in revenue and actually generating over a billion in free cash flow, generating over a billion in free cash flow. We talked to one of the senior managers there, is a good friend of ours in the executive team. He's like, well, we cut all events last week. We cut all spend on events. It's like, why? Well, we came back from this niche event and we didn't close any deals. We came back last week, we didn't close any deals. Okay. First of all, it's not enough time. It's not enough time for anyone that's run the Field Playbook. But more importantly, you cut everything? How's that going to help? That is not the right reaction. The right reaction is to get more focused. Maybe it's to do less, but to cut your entire field budget to zero when you're generating $1 billion in free cash flow a year, it's too reactive. Everyone is too reactive here. You have to calm down and you have to find a way to invest in the future and not just the present. Okay, point 5, and we're going to actually have an entire SaaStr AI summit Now hasn't been announced yet, just to you guys, just to our friends. It's gonna be inside of SaaStr Annual on the 11th. We're gonna have heads of marketing from OpenAI and Cohere. We're gonna have the CEOs of everyone from Klaviyo to Attentive, the head of AI at Zapier, everyone talking about how AI really works in B2B for real. No one's doing this. It's gonna be awesome. It's gonna be wicked awesome. Okay, so we're gonna talk a lot about this in the coming times, but AI isn't like, it hasn't changed every B2B and SaaS space in 60 seconds. It's not revolutionary. The fact that two phones can talk talk to each other does not mean your payroll app is magically better. Okay? It does not mean it's magically better. AI is like, just because you can type in some text and get a cartoon does not necessarily mean you've made your customers any happier. So I get it. It's, there's some nuance and complexity here. But you can't hide from it. This is what I see too many founders doing. They're, it's expensive to hire engineers. It's expensive to do this, expensive to do that. So they're arguing, they're arguing, You can't— you have to, if nothing else in AI, if AI is not revolutionizing your space, and it is in many, it is in many, it is in the contact center, it is in other spaces. If it's not, you gotta be at parity. You're gonna lose. I see startups that are arguing with AI, that are arguing against this tsunami that is coming, and they're arguing that it doesn't work, and they're arguing, and you know what the competition's going in doing? They're saying, we can automate this with AI, and the competition is exaggerating. Sometimes they're at the edge of lying, but you cannot fight this trend of AI. You cannot fight the billions and billions and billions being deployed every week. You cannot fight it. And also, this is where budget is. Budget is being freed up because other apps are being cut. Humans are being laid off. This budget doesn't come out of heaven. It doesn't come out of nowhere. You always gotta know where your budget's coming from. And budget is being freed up for AI. And if you do everything in the world Great. But you're not at feature parity in AI and your competition is. They're going to get this freed up budget, this efficiency budget, and you're not. You're going to lose the deal. I see folks losing deals left and right because at least they're not at parity. At least they're not at parity. You got to jump on. You got no choice. You can't fight it anymore. Okay, point 6. And I'll get through the next ones faster so we can have some questions. Boy, I see this. I don't see this so much with the founders I know well or invested in, but I see this constantly on LinkedIn, on social media, everywhere, which is people are just getting this wrong. We are in a new era of efficiency. The average public SaaS company does almost $400,000 in revenue per employee, over $300,000, almost trending towards $400,000. That was $100,000-something in 2021. So the average public company is more than twice as efficient as they were in 2021. So efficiency matters. Efficiency matters. Profitability does not on its own. On its own, folks that are not growing but profitable like Dropbox are trading at 2 to 3 times revenue. That's not where you want to be. So too many founders either believe this or probably worse, are using it as an excuse. They're using an excuse, which is that they're not growing anymore, but hooray, we're profitable. Now listen, this is fine. If you've been hit like a ton of bricks by a downturn the last 18 months, maybe you got to be cash flow breakeven because there's no more money coming. There's no more this, there's no more that. That is a different tactical goal than saying, hey, we're going to be profitable and that's some sort of win. There is some truth that as you cross $10 or $20 million in revenue, you may never— what you still want to do is grow at outlier rates. Ideally, you do this triple, triple, I said T3D2, but it's really more like T2D3, triple, triple, double, double. The best startups go from 1 to 3, 3 to 9, and then 9 to 18, 18 to 36. I know that sounds like a lot to everybody, this triple, triple, double, double. But if you think about what it takes to get to $200 million in revenue in less than 10 years IPO, it takes that amount of compounding. Just put it on a spreadsheet. That's where you want to do to be the next Klaviyo or Rubrik or better. Or better. But the reality is being efficient at like $10 to $20 million, which is 30% or more growth and breakeven, can get you great PE exits, can get you an offer ultimately for $200 or $300 million to buy your company. But the growth still has to be north of 30, even if you're breakeven, it still has to be north of 30. And so there's just no world where profitability is above growth. Emergence Capital just redid the data, I did it on SaaS. I think Meritech did it, a growth fund, a whole bunch of folks. They all summarized it in that growth matters twice as much as profitability. Profitability didn't matter in 2021. It didn't matter. Forget about startups. It didn't even matter in the public markets. It matters, but growth is still twice as important. So listen, do what it takes to survive, but don't pat yourself on the back like profitability is this magical end state. It's not. You've got to grow. Okay. Point 7, talked about this a lot. I wish I could stop talking about it, but the world really has changed since March 2020 in so many ways. It is, I don't think today, for some folks today is the hardest it's ever been. We have some SaaS leaders at hundreds of millions of revenue growing 0%. I've never seen that in my lifetime. There's others where it's just kind of hard, like 2018, like cry me a river. It's hard like it used to be. Budgets actually have to be earned rather than money just flowing like it was in 2021. But it is harder for almost everybody. Even for the best, it's harder. And it's led to a lot of folks that are broken, the broken, the bitter, and the fractional. These are folks that just don't want to do it anymore. Honestly, just between us, there are days I'm not sure I want to do it anymore. Most days I do. Okay? 40 days I do. There was a day the other day I told Emilio, who's on this, I wasn't sure I wanted to do it anymore. I'm back. Don't worry. I'm totally back. But a little bit of it, this is okay. A little bit of this is okay. But here's how I summarize it. And look, I barely even watched sports since March 2020, but you can't hire anyone that won't play the game 48 minutes. It's too hard today. You can't hire anybody that's not going to play the full game. You can't hire someone that is too angry about their last boss. You can't hire all these folks that think the system is loaded against them, that VCs destroy people with their liquidation preferences, that VCs destroyed their last company, that their CEO was a terrible human being, that they got— I was lied to at my last startup. The founders told me this, but it wasn't true. I believe all that. I mean, there's elements of truth in all those things. You can't hire— don't hire them. Don't hire them. Don't hire, and don't hire the fractional. There is a very, very, very narrow role for fractional people, but most of them aren't willing to do anything. They're just like the strategists in marketing. They're not willing to do anything themselves, so they don't solve your problem. So I said there's no room for strategists and dashboardologists in SaaS startups. Want me to look at it? But I just simplify it. You know, a little chip on your shoulder, probably necessary for success in a founder, probably great in your VPs too. A little chip on the shoulder. Like what I love, like a great background for your first VP is a stretch VP is, hey, I was a director, head of sales at somebody, and then I got them to $20 million and they topped me with this CRO from big company. Okay. And I got pissed and I quit. Okay. That's a great little chip, right? I got topped. It's not going to happen this time. I'm going all the way. I'm going all the way, Taylor. I'm going to IPO this time. I made that hire myself. It works great. I've had that chip myself. I possibly even have a little chip myself even today. That's great. But when it's like that chip is so heavy, it's like a rock and it's weighing you down, that whole shoulder is falling out of the frame of the Zoom. You can't hire that person. It's too much. They can't recover. And I feel bad that frankly, there's a lot of people I've known over the years that are now in this category. I try to help them. I give them new ideas, but they're not there. They're the broken, the bitter, and the fractional. They may have great LinkedIn. They're often wicked smart, and they often can identify your problems in like 15 minutes. This is where you'll get confused. They'll identify your problems. I talked to one of these folks who I've known for years the other day, and I described him a whole bunch of issues. And in 15 minutes in, he described the root cause and the issues better than anyone I talked to in months. And then I gave him an opportunity, a great VP of Sales role. It took him a couple of weeks to get back to me. Not cool. And instead of even taking the meeting with the CEO, he wrote me an email, like a long email of all the objections and issues he had with the startup without ever talking to them. I don't know if I can make $10 million. I don't know if the CEO's committed enough to sales, even though they're growing 100% at $10 million. I don't know if this— I need it all to be explained to me before I'll take a call. I mean, he's great, but he may be too broken or bitter to do this. Don't hire that person. And they're often, again, wicked smart, including the fractional. Okay. Last couple ones I'll do shorter. This one is not new. This one goes back to the 1930s when we started SaaStr, when enterprise software took off, or the '60s or the '80s when my grandfather started a little newspaper called SaaStr and would hand it out on street corners and bar stools. And then it became a blog in the early days. And Grandpa SaaStr was talking about this even back then. Don't hire for the logo. Gotta be in our first post in 2012. But here's the thing, this is an evergreen error. Again, when I talk to founders, I don't know why is this an evergreen error? It's because there's more folks that worked at Datadog or Notion or Cloudflare or ZoomInfo or Zoom or all these iconic companies or Gong or Salesloft or Outreach. Pick your hero company. There's not just one VP that used to work there when I started in SaaS. There's like 30 sales leaders that have spun out of those companies, 100 over the years. And we're in love with these logos, especially the ones that— most of us realize we don't want to hire from a direct competitor, even though we're tempted. I'm still tempted. Don't do that because you'll overlook the downsides. But we're just so tempted that the guy that was earlier, the person that was early at Datadog got the answers in MySpace, or that was early at whatever cloud leader you like, that was early at Klaviyo if you're in e-commerce or Rubrik if you're in security. And look, there's a time and a place for some of this and there is some benefit to it. But here's the simple thing. You got to do it and you have to do it with your team. Literally take their LinkedIn and put your hand over that logo, that Rubrik, that Klaviyo, that Notion, whatever. And be honest. Would you still hire them if they hadn't worked there? And I do those founders all the time when they tell me, okay, this, my VP of whatever didn't work out. Where did she work last? Top logo. I'm like, okay, this is the first question I ask them. I've done this multiple times even in the last 30 days. Would you have hired them if they didn't work at big, big fancy name? You're right, Jason. I wouldn't have. They always say this. I wouldn't have. So once in a while, this is okay, especially if they were there really early, especially if the chip is the right size on their shoulder. I'm not saying there aren't exceptions, but if you're hiring for the logo, make sure you take a, take your hand or maybe print it out. I don't even have a printer anymore, but if you do have a printer, take, find one of those smelly black thick markers. What are they called? Put it all over their logo at the last cool company and ask everyone around the table. Would you still hire Amelia, Taylor, or Jason if they— if this was their LinkedIn? If they say absolutely, I don't care, best of the 30 candidates we've met, make the hire. But probably people are going to be, well, you knew how to do it at Datadog. Okay, last two, and then we'll open it up for questions. This is kind of tied to the marketing one, so we partially hit it, but boy, this is— we are cutting cutting, cutting our nose off to spite our faces left and right. Everyone's looking for instant ROI. They're looking for instant ROI. The most extreme example, one of the most extreme examples I've seen actually is ourselves at Saastr. So again, we have these 200 sponsors. So we kind of use them as a lab. I use them as a lab to learn and what do they want? Well, you know, last year it switched. Instead of, instead of where they measured on pipeline or opportunity or influence or awareness or brand, They wanted scans. They wanted folks that would literally come to our events, get a scan, and that's how they were judged. Did I get 584 scans? Did I get 681? Did I get 1,012? I mean, listen, friends, scans is at the very, very, very, very top of a pipeline. But most marketers in normal times view a scan with a little bit of skepticism. Okay. Did they convert? Did they take an action? Did they take a meeting? Did they sign up for a trial? Because having some SDR in your booth wave a scanner in your face before they give you a, you know, a yellow rubber ducky to take home as swag, you know, that's pretty low on the the intent scale, right? I'm not saying that those— that there aren't good ones. There are, because people that go to events, buyers go to meet vendors. So there's gems. But if you take scans as your number one KPI, I'm not sure it's the best one. But the thing is, it's instantly measurable. You walk out of a field event and you know that day how many scans you got. So it was interesting how, like, the whole tenor of what everyone wanted changed. And last year it all became scans, scans, scans. I need 1,000 scans for my boss. So It's looking for instant ROI in something which is field marketing, which you're lucky if you get it in 6 months. You're lucky if folks you meet at an event, you convert to a customer in 6 months. Well, we can talk about why that is in the Q&A if you want, but it's just the reality is, you might get someone at an event who already was shopping you. You'll get those, and then you'll push them down the pipeline and they'll close right after the event. That happens all the time. But if you're building raw new events, it's just, it's somewhere between a high-intent Google search and randomly discovering someone on a piece of content. It's in the middle of an event, right? So it takes time. And if you want instant ROI, it's not there. The other one, the other one I just see, and it's just related to this, then we'll close it on the last point. This instant ROI is also, I think, destroying customer success. Maybe this is my last point, and others' relationships with customers. We all— many of us, the bigger companies, push through multiple price increases the last few years. Without any notice and without commensurate value. Hey, it's another 20% up. We literally just had a vendor at SaaS who we've worked with for 8 years. They hired a new CRO a couple of weeks ago, and she got on the phone with us and said, I'm doubling your prices. I'm doubling. We're a case study on this company's website for years. We're in videos for them. They're all over YouTube for us. The new CRO came in. Why are you doubling price? Is there a new feature or functionality? She's like, I don't really use the product, but It's take it or leave it. I'm doubling prices. Now, why did she do this? First of all, our relationships are burnt and broken forever. We went from NPS 9 to 0. But look, she came in and it's tougher there. And so, what do you do? You kind of burn your base. And we all burned our bases. We burned our bases with rip-off price increases again and again, not once a decade, but again and again. And what happens when you do that? Well, maybe you'll make this quarter, maybe, but are they gonna refer more customers to you? At the end of the day, all software is powered by word of mouth. That is everyone's number one source of new customers is folks telling their friends, telling other folks, leaving one company, going to another, and bringing you with us, which you'll see again and again as the years go by. Word of mouth. Word of mouth remains HubSpot's number one source of new customers at $2.5 billion in revenue. They stopped publishing this around a billion, but they even had the numbers. It's on the 5 Interesting Learnings from Saastr. Through a billion in revenue at HubSpot, from the beginning, word of mouth was our number one lead source. Ask yourself as founders, have you done things the last 18 months that have damaged word of mouth? Do you even have a customer success team at all anymore? I just put this up today on Saastr. G2 did some polls across all their, their, all, all of their customers, the majority of their CS teams not only report to sales now, but consider themselves, but are on quota, have a sales quota. Now there's, now this is what folks did when they needed to monetize the base more. Instead of these CS folks being folks that would maybe show up to a QBR here or two, they said, listen, your job is protecting our NRR, which has declined the last 18 months. And so CS kind of became weaponized and part of sales and At SaaS for Itself, we had some very brutal conversations with CS teams trying to monetize us rather than help us. But it's done. I don't know that CS is gonna go back to the old days where customer happiness was job number one. I said for me, maybe it's over. But as founders, as founders, if nothing else, ask for your top 20% of your customers, for your top 50 customers, whatever it is, draw a line, do a sort of big to small. Is at least for your top 20% customers, is there someone whose job it is nothing more, 40 hours a week, 100% time, at least make your top customers happy? Because if your CS team is doing nothing for those top accounts but trying to get them to buy more, buy more seats, trick them into bigger additions, raise prices on them, right? Threaten them if they want to downgrade, threaten them, threaten them if they want to downgrade, which has become a behavior. That's what account managers do. That's why back in the day I refused to hire account managers. Like I said, no, I don't want— like back in the day when e-signatures were early, the whole point of an e-signature in the early days was to make your life better versus a fax machine. I know it's kind of funny. I'm like, if my team makes your life worse, you're never going to use my product. So I said, we will never have account managers. We only have customer success and sales. And maybe that was dated. It worked pretty well for me. We never had less than triple-digit NRR, but it was a different time. But I just mean, even folks are putting— are weaponizing even CS for their top customers. You've got to put a couple people, maybe just one person, whose only job is to making sure those top logos are happy and nothing else, or they will churn. They will not churn tomorrow, but they will churn in a year or two when the renewal is up, and they will go to your customer— your competitor who finally gets an in because you treated them like you— an account to be managed up rather than an account to be made happy, and they're frustrated. And finally, on that year 3 renewal, they say, heck it, I will try your competitor. That's happening all the time. I just got an email yesterday from a founder that's great, but after 3 years, you know, one of their competitors stole one of their top 10 customers. It's happening now left and right. And if your CS team are account managers, if they spend all their time not configuring the product, not getting the integrations to work, not making sure new folks are trained, not making sure onboarding metrics get better and better, If they're just there to create more revenue because they report to sales, you're gonna be sad. You're gonna be sad starting this year. Okay, those are my 10— what did I call these again, Taylor? 10 top GTM mistakes founders are making. So open it up for questions for the next few minutes. Hopefully this was helpful.

Yes, thank you, Jason. We're already getting a few questions. I was thinking of one though, just when you were going, um, I heard you talk about this with Harry Stebbings a couple of weeks back. And it may have been an old recording, but I think for people, especially as we're talking about so much hiring, you talk a lot about the pirates and the romantics, kind of this arc, the Jason archetype. I think it'd be helpful for people to just hear in your words, like how you define what those people are, that profile of what is a romantic, what is a pirate.

Well, look, I mean, it's a good question. Then let's, if there are questions from the group, let me take more direct tactical questions. Look, your first, The first 50 need to be special. The first 50 people need to have an almost irrational connection to your product and customers. The first 50 need to be misfits a little bit. They need to be folks that have to be startup people. And in the old days, you were seen as insane to join a startup. So most of them were going to be misfits. You really couldn't hire anybody else. Now that tech became so mainstream the last 4 or 5 years, it just became the common college— come out of college, go work in sales at wherever, most folks you meet will not be this. They will not be misfits or pirates or men. They won't. It's just a job. And look, there's a lot of people in this country and people need a job. And when you have 1,000 and 2,000 and 10,000 employees, most folks are there just for a job. They're there to work 20 hours a week and work from home and maybe work on their side hustles and do their other stuff and do 20 hours a week. But you can't hire those people in the beginning. So, you just need folks that are quirky and live and breathe startups and just don't, don't make an exception, hire anything else in your first 50. That's all.

Thank you, Jason. We're going to take an audience question from Sanazki. Sanazki, you want to come up and ask your question live? Yeah.

Thank you, Taylor. Hey, Jason. So, Jason M. Lemkin, I'm the founder and CEO of an early-stage company. My company is called Manifest AI, and I have been doing demand gen myself for past 1.5 years, and we recently crossed—

25 years, you said?

Sorry, 1.5 years.

1.5, got it. Okay.

And we recently crossed our $1.5 mil revenue mark. So, you know, there was a question that came to my mind, and our goal is to hit $3 million by December this year. So, you know, like, either we hire a demand gen lead, or, you know, just to speed up our execution, like, should I hire juniors to take up the initiatives which I usually do myself. So what should be the strategy as per you, Jason? That's the question.

Well, look, I mean—

And one thing I want to highlight is around 80% of our revenues are word of mouth.

There you go, right? So look, the one thing you can't afford to do at that size even more is make a mis-hire, right? Hire the person that doesn't know how to do demand gen, right? So But, but you have $1.5 million in revenue, right? So in a way, you're almost actually, in my mind, you're almost late to make the hire because at $1.5 million, if you hire a great head of demand gen and she or he gets you another $200K, $300K, $400K of revenue, that more than covers their costs and adds a lot of value to your company. So you can certainly afford both one or another to hire someone that is accretive, someone that is, that actually can create more value. So look, absolutely go hire a head of demand gen that either is better than you, which you'll know— you've done this long enough, you'll know, like, you'll know in 7 minutes if someone's better than you. It won't even take you 10 minutes to know if someone's better. Then just hire, hire her, him, like, before the Zoom ends. Just, just hire them immediately if they're better than you. Um, or are they at least as good at you as one part of what you do? Because most marketers, Most marketers are only good at 1 or 2 things, maybe 3. And at best, they either don't do the rest or they hire people to do the rest. So make sure the 3— like, related to this one, this is another cheat code. When you hire, when you go to meet a marketer for a head of role or any role, just ask again an innocent question. What are the couple of things that you really love to do in marketing? And don't interrupt, listen. And you'll hear it. I just did this for fun. I just did a podcast. It was great with David Gerhardt. You can find it. It just came out. It'll be on Saastr in a couple of days, who was head of marketing at Drift. He was early at— I forget where else he was. He was at HubSpot in the very beginning. And then he was at Privy, which was acquired for $100 million. And people love him. And he's got a marketing community called ExitFive, very charismatic guy. And I played this with him. I said, Dave, what's the number one thing you like to do in marketing? And he said, brand. Now, is that who you need today? Yeah. A brand person at $1.5 million in revenue doing demand gen? No. And if people love Dave and he's great and you can go watch it, don't hire Dave now. You don't need him. So, that's the Columbo question. Figure it out and then see if those are the things that you need. This would be best, $1.5 million, you don't have time to manage 11 Upworkers and kids who can't do it. You don't have time. Having said that, so that's what you should do. Having said that, You already know the answer. If you can find some entry-level folks that are smart enough that you can trust to give you leverage, because at your size as a founder, $1.5 million, you don't have enough money, but you've got to start finding leverage. You've got to start finding leverage. You can't get out of things like to the presentation. You can't just drop marketing or drop sales, but you've got— if you don't start finding at least some leverage, you're going to hit a little bit of a wall. So that, that's the best, best advice I could give.

Got it.

Thank you so much, Jason.

Thank you.

Thank you, Shanosky. Okay, Jason, we have another question from Deepak. I'm gonna just read it out for you right here. What is your point of view on combining CS and support?

Well, look, I mean, on the one hand, it's a, it's a bad idea because they're not the same. Customer Success's job, at least in the old days, was to especially to focus on bigger accounts and key accounts and make them wildly successful over time, to be somewhat proactive, to go into the office, to study their configuration. Support is a very, very reactive role. Hyper-reactive and hyper-transactional. So in theory, in theory, they should be very distinct departments with only a little bit of overlap in the middle, right? But in practice, in practice, the truth is, especially as the deal sizes are lower and the customer account goes up, there is overlap. There absolutely is overlap between customer success and support. And so I guess if your head of CS has some experience and wants to own support, and the support team is cool with that. It's okay. It's not great. It's okay. What doesn't really work well, and again, I haven't written a lot about this, it's probably a mistake I made too. I had a head of success, of support, sorry, of support who was wicked smart, wicked smart. So I just managed him up to $12 million in revenue. I just managed him and he worked well with my head of customer success and worked well with sales. But he was off the charts smart and I didn't even really manage him. I was just nominally his boss. He self-managed. But who, who's going to manage support? It's usually something, unfortunately, on the— that doesn't, doesn't have a great answer. Usually doesn't have a seat on the true management team. Right. And so it's got to sit somewhere. And if there's not a better idea, I would do CS, but you got to have your CS leader really want to do that. It's one of these things on the org chart where there's no perfect answer.

Got it. Uh, Mahara, you're up next. I'm gonna bring you up to ask Jason your question live. Great, thank you. Well, Jason, thank you for having this question and this talk. Uh, this question actually is a mixture of the, the 9th and the 10th point that you brought up, which is looking for instant ROI and elimination of that Customer success. One thing that we talk a lot about, even on this talk, is about word of mouth and how customers inviting other customers and referring is like a huge weapon for— yes, for increasing your funnel. But one thing that is really hard to actually do is to measure word of mouth. You either have like a really good research or NPS. How do you do that?

Well, Okay, you just ask.

But usually you have more than one touchpoint that makes a customer, right? And a new customer, right?

The nuance of multi-touch attribution and all of this is complicated. But listen, what I did back in the day, and it still works today, is I didn't let a sales rep get paid or close a deal until they'd filled out where you heard of me. So then the sales rep always, once they didn't get paid and they literally, it was a rule in Salesforce, you could do it and probably HubSpot's here and say They just couldn't— they couldn't close the opportunity until they'd filled out the field, where did you hear about me? And so they would just ask. And the beauty is, it's another— like, since they don't really care, they actually get really good answers. It's a Columbus-style question. They get on the phone, you know, oh, Taylor, great. Thanks for taking the time. Before we get into it, I want to do a demo and show you the app. Just where did you hear about us? And if Taylor said word of mouth from my friend, we could argue whether that's the first touch or the 8th touch or the 96th touch. I'm going to suggest it's the best touch. I'm gonna suggest that if you ask someone in an, in an open moment, it's the most important touch. And it doesn't really matter if it was actually AdWords or it was actually a podcast or whatever. You need to do all that stuff because we're in a multi-touch world. But that's how I would measure word of mouth. Is it the first thing someone says? Great.

Thank you. Thanks, Mahara. Our next question is from Alex. Alex, I'm going to bring you up to ask your question to Jason. Oh, I think you're on mute, Alex.

Hello, Jason. Thanks for holding this webinar. Very interesting. My question for you is, so I've been working in London for like 6 years in a startup industry. And my question is, I was working in the demand gen side and I plan to start a new agency. Agency, especially targeting fast-growing startups, Series A, Series B in London, San Francisco. And my question is, do you see a demand right now in like for this kind of services? So do you see more startups outsourcing these towards agencies and do you see a big demand or is more like they try to hire internal people that do BDR and demand gen?

Well, look, I'd break it up into two groups for agencies. And I both love and am skeptical of agencies at the same time. I find most are terrible and frankly are ripoff firms. My rough rule is if a BDR qualifies me at an agency, I'm out. If I have to be qualified by Caitlin that before I can even talk to a principal, that's not for me. Like maybe that's good for Adobe or Intuit. I'm not into it, but we all need these partners and a lot of great folks want to run agencies for a variety of reasons, right? So there's gems out there and let me break it up into, to answer your question, is there demand? There's two types of demand. There's demand in marketing, there's demand from marketers and there's demand from founders and they're very different, right? A lot of marketers want agencies because that's how they've been trained to work. They have folks and look, if you build the right relationships with marketers that are senior enough and they go from role to role to role, they'll keep bringing you in and you'll have a long life cycle being that person's SEO firm or content firm or website agency or whatever. They all have— most marketers have 5 or 6 agencies that they bring with them to each gig of different sizes and scale. So that's fairly well understood and that's nothing new. Most founders in this day and age when it is harder to find the pirates or Romantics and Budgets are more complicated. They are actually, I would think, more amenable to outsourcing some of these things if the results are there, if the results are there. But most agencies are not willing to put in the energy it takes to work with the CEO. Like, listen, if literally me, even for SaaS Yourself, if we could hire 3 more agencies today, if someone sent me the perfect email and said, listen, Jason, I saw you on Twitter, you said you need someone to manage your Marketo campaigns going out to 250,000 people. You need to segment your list. You're running 25 campaigns a month. I've read— I've actually read the campaigns. I've read the emails. I know what you need. They're pretty good, but we can do better and we can do better for this much a month. And I have a team ready and we can chat tomorrow. I'm going to friggin take that meeting in 60 seconds. If you send me an email saying, Dear Jason M. Lemkin, um, we have another AI tool to replace SDR. Um, would you like to talk? Like, there's just no way. So just realize, like, you can either build— listen, I'm not a total expert, but like, do it. If you— there is a role for like this epic agency, epic agency, and we have a— and, but I view them more as, as just as partners for founders. And are you willing to do that? Are, are you willing to do that? 99% of agencies say that. But they're really bucket shops. They want to assemble as many clients as possible, sell them the same crap to the same people again and again. And you'll trick some founders into doing that, but they're going to fire you. And so you got to keep tricking founders again and again to do that. So, but if you have the energy to go deep, do it. You will stand out from 99% of the competitors, but you got to solve the problem for your founders, not make me talk to a BDR. So let's go to the next one. But thank you. Good question.

Thanks. Thanks, Jason. Jason, this probably will be our last one, but this is a follow-up actually to the conversation that we were just having about word of mouth and referrals. Question from the audience is, what's the best way to incentivize referrals? Should the CS team be rewarded? Should your client be rewarded? What thoughts do you have about that?

Look, the best way First of all, we talked in the presentation about being anxious. Word of mouth is powerful flywheel. It's a slow-moving one. You cannot— there's only so much you can do. And so listen, there are folks, especially in the B2C world, that hack referrals, that they create incentives and, you know, do this and I'll give you, you know, an iPhone and this and that. And listen, if you happen to have a great growth marketer on your team that loves those hacky things, let them run with it, right? But for most of us, it's not that complicated. We don't— it's not a magical referral system. It is making your customers insanely happy and insanely happy and then just giving them a way to do that that is low lift. So a simple, simple— one of the simplest ways to incent word of mouth, at least especially if your deal size is of any reasonable size, is like every month do a steak dinner somewhere in the city and invite your prospects and your customers together. This always works. Invite them together, do a steak dinner with as many people will come and have half prospects and half customers. They can't help but sell you. And then when you have a little more budget and time, do an event. Your own event doesn't have to be SaaS or annual size. Just rent a ballroom somewhere or rent, rent the back half of a nice restaurant and or do whatever, a half day somewhere in a hotel. And do an event, invite customers and prospects. The customers that come and the prospects that come, they'll sell each other. They can't help themselves. They're showing up. So either they're happy or sort of happy, but care. They care. And they're going to— there's no more powerful way to have folks to incent this cycle than to put human beings together IRL one way or the other. So that's a great way, a digital way to do it. Going back to something I've written every 30 days for over a decade, it's Aster. Do a weekly webinar for real, a real— not every once a month, don't forget to do it every week, do a webinar. So you got to do 52 a week at the same time. And you know, a third of them have a customer come present, have a customer come present, do a case study. This is well understood again, since the, since the '30s. Have a customer, one of your customers come and say, listen, you know, this is how our marketing tool worked. Let me tell you, present a case study, and that case study actually will be valuable. To other customers and prospects. And they'll also sell you. They'll do it for you. Invite them to do it. We all do it for our best— when our best customers, best vendors ask us, they get a lot of value. If they ask us to do a webinar or something for them, we'll often do it. We'll either do it as a favor, or if we're very passionate about it, we'll do it. Some folks do it because they like their own personal celebrity, especially if they're mid-level or lower. They don't get it. I get asked 11 times a day to do a podcast. But not every mid-level person at your industrial customer does. They might get asked once a year. So put them on the pod, put them on stage, put them on the webinar, but do it every week. And so you'll be surprised if you do it, you know, a third of your weekly webinars is a customer sharing a case study. You'll be surprised how much that incents word of mouth, right? And so you can do the other hacky things and pay for reviews. And, you know, I did that back in the day, back when the AppExchange was early for Salesforce. We, you know, we did this and we were the first app with 1,000 5-star reviews and no one else had 100. My head of CS was really into it and we did a bunch of edgy things and we got 1,000 reviews. And, you know, you know, back in the day, no one else had more than 90 or 80, and it sort of worked. It helped. But that alone, that kind of hacky stuff, I think helps if someone wants to do it like my head of CS wanted to do it. But I don't think it moves the needle. I think getting people to share their success stories with others in as regular a form as you can is the way to do it.

Awesome, thank you so much, Jason. Thank you all so much for joining. We're at time today, but thank you for your amazing questions. Um, some— a lot of the questions I saw in the chat that we didn't get to, uh, there is so much content of this type of stuff on the Zaster blog. You can pretty much Google or put in the search on the Zaster website and you're going to find content to answer some of those questions. But thank you guys so much. Um, the recording is available on YouTube. I know some people joined late, so please feel free to find it there. And then next week we are back with the SaaSer fan favorite, Ji Cabane, and he's gonna be doing a topic very related to Jason's number 5. And he's gonna be talking about how to break through something that's on all of our minds and figure out what AI tools are really working for B2B marketing. So Ji's gonna be talking about that.

And really good one. Everyone come back to that one. Ji will tell you some stuff that actually works in growth hacking and marketing is pretty good.

So totally. Well, thank you guys so much for joining. We'll see you back next week. Thanks, Jason.