AMA with SaaStr's Jason Lemkin on Hiring Your First VP Sales, VC Capital Today, and More!!

Hello, hello, Workshop Wednesday community. Welcome, welcome and happy holidays. We'll just give everyone a few moments here to get set up. As always, great to see so many familiar faces and also some new names too. Thank you everyone for joining. As you know, every Wednesday we are here at 10:00am Pacific Time to share detailed and interactive hands on workshops and to chat one on one with an amazing SaaS mentor. So this week, lucky us, we are here with Jason and he's going to help us close out. We have one more he, we're in the final stretch for workshop Wednesday but he's going to help us close out before the holiday to share some just open AMA time. This is something that's requested often throughout the season of people wanting to just pick Jason's brain and, and when we're all kind of in this planning phase and closing out 2023 trying to figure out 2024, we knew this would be really timely. So we're going to have plenty of time for Jason to get to as many questions as we can. So just go ahead and start dropping those in the chat and I will work on getting those queued up. If you're able to, we would love for you to join the conversation and ask those questions live to Jason. But if not I'm also happy to help facilitate if you are multitasking or maybe just not at a quiet place. We know that happens too from sometimes these weeks. So really excited for everyone to jo join the conversation and welcome. Jason, thanks so much for joining us this week and doing an AMA to.

Close out the year for sure. We've got, you said, I think Taylor, you said we had a few things queued up from before so we can, we can just dig in and we can go until, until we as a team pass out or everyone's, everyone's hit X on their zoom and left us.

That sounds good. Okay. So Jason, this one came in via LinkedIn before the event. So um, so we had an audience member ask what will be the early and mid investor appetite for SaaS startups in the sales tech space in 2024.

Well, look, let me, let me step back and I've discussed it a bunch of times. Other speakers on the series have talked about this. We talked about this on the G2 Reach growth event. Two things generally speaking they're for for now. For now there is very limited investor appetite for anything that isn't true AI. That isn't true AI. And you know, why is that? What's the one, let's see, what's the name of them. There was a legal tech startup, I should, I should know their name this week that got funded at 700 million valuation at 10 million in ARR. But why did it. And in fact this legal tech startup was founded by one lawyer who hadn't even been a lawyer for a year and quit and did a legal tech startup after one year, after working at a firm, but because of AI, they went from 1 to 10 in one year. So if you can go from 1 to 10 in one year, mathematically you can probably go from 10 to 100 in the next year. And so if you're doing that in any category, even an impacted category like sales and marketing, everyone is going to fund you. But more importantly, the thing to understand is we're in a weird world today where if you look at the stock markets and ultimately VC investment is tied somewhat, somewhat to the stock market. NASDAQ is at a record great growth. S and P is at a record. But many startups were hit the hardest of all, right, the lowest growth, even though Shopify up over 100% this year. So many other leaders. So folks are just still looking for outliers and they're mainly looking for them in AI. True AI companies that can grow at such rates. Your jaw drop. And there isn't any venture appetite for pretty good growth. There just isn't any. There's none. There's zero. Absolutely none. There's no in appetite in general and importantly to folks that watch that are here today or watch later at later stages, there's absolutely no appetite. So the, the really biggest risk in in venture funding. And then I'll come back to this question on sales and marketing because I think it's a good one. The real risk that a lot of founders have today, almost every single founder I talk to, including multiple conversations this week that have raised a seed round or an A round or whatever, they all think the next round's going to be easier than it is 100%. No one is realistic. No one is realistic. They don't understand that one. Because public multiples on average are about 6x, there basically are no growth rounds happening. There basically are no rounds north of $200 million valuations. Because to justify for an investor to make 10x on a $200 million valuation with dilution, you have to have a two and a half billion dollar IPO. There just aren't very many. Most SaaS companies aren't even worth $2 billion today. So it's very difficult for a growth investor to invest over 200 million valuation for your series B, series D, E, F, G, H, I, J. No matter how well you're doing, they have to believe you're going to be better than Klaviyo. They have to believe you're going to be a canva to justify not even a billion dollar valuation. A 200 million dollar. And that kind of ripples all the way down. Except in seed. But in seed, everyone's still an optimist. There's so much money in seed and pre seed, everyone still believes you could be a data dog or a Canva and someone will be. Every year, every year there will be a snowflake or a canva and a datadog. And so hope springs eternal in seed and pre seed. And that's good for folks raising that. But after that, unless your growth is crazy in your AI, there just is no oxygen. And you know, today we had two discussions this year. We had one with David Sachs who now has 3 billion at craft, and we had, we had a, an offline discussion with Byron Dieter who runs Bessemer's cloud practice. And they Both said over 80% of our money in SaaS is going to AI. So, so bear that in mind. And so in sales and then, and then you add sales and marketing. In many ways this is the most impacted category, right? You see app vendors that we've all relied on for years, sales off gong outreach hit a wall this year, right? See see declines. And we just did an interview with Henry Schuck from Zoom Info. It's literally on Saster today. It is great. Go to saster.com and watch it. I'm sure it'll be on our podcast probably in a couple days. But it's on saster in our YouTube today and he just talks about what has happened and there's so many good things in that. But two things have happened at Zoom Info and Zoom Info is at billions in revenue, their category leader. Two things have happened for Zoom Info. One is that folks cut every seat that wasn't being used. Every dollar, every nickel of Zoom Info. And, and I, it was really interesting what he said. I think he said before 2022, going into 2022, an account that was about 80 something percent utilized was considered at full load, right? They could sell you more seats, more, more users at 80%. Now it's over 100%. So they're getting like a 12%, 50% churn just from folks putting in the energy to manage their Zoom Info accounts. We didn't used to do this. We didn't have time, we didn't have time to figure out how many gong seats we were using or exactly who was using zoom info on our SDR team. We didn't have time. We were going, going, going. We were busy, busy, busy. Now everyone's like spending precious energy managing all of the sales and marketing spend. So that's a tough trend across the whole industry. Um, and so I'm. It's a rambly answer to say, yeah, it's a tough category and I think that there is relatively limited interest at all from investors unless it's AI with one final point. I'm sorry, it's a rambly answer, but there's so many vectors going in the category. Here's the really interesting thing about sales as a category which has really changed. You know, I invested in sales loft. I got involved with sales loft basically pre revenue, I think 2015, 2014. I don't even remember when maybe 2013. And no one wanted to be at this category because they felt like we could only afford a couple sales tools. Like there wasn't any room for a sales after an outreach or anything because you would buy Salesforce and two or three tools and that's all the budget. And then the budgets inflated and we had room for 80 or 90 sales tools, which we bought in many cases by today. But what has changed is that sales is a category where at the early stage, folks just want to build more and more products. We have more CROs and CEOs that are into that. Tracy from PlanGrid built SaaS for the construction industry. Sold it for 700 million, sold PlanGrid. What did she decide to do next? Build a sales tool. There is like, at a personal level, there is a lot of interest in this category and so that will spur more and more innovation. So on the one hand, if there's no AI, it's tough. Two, it's an impacted category that got overly scrutinized for spend and stuff. But three, so many people are passionate about the category that innovation, it's like a wellspring, like it's never ending. So that will create waves of innovation that doesn't happen in other categories. I mean, you know, this week Service Titan, the press reported Service Titan will probably be the next SaaS IPO since Klaviyo in early 2022, they're about 500 million and ARR growing 50%. But their SaaS for plumbers and air conditioners, okay, there's not like a thousand people that wake up every day and say, I've got to solve the problem for air conditioner SaaS. Right? Bless these two guys in Pasadena that overlooked the category and said no, it's pretty big. Pretty big. There's a lot of, there's a lot of air conditioned maintenance going on. Like look at every office. Every office has H Vac. They're serviced by thousands of independent contractors. They have no software. Like this is actually enormous market. No one got it. Everyone gets sales. It's good and bad, but it will create endless, endless innovation. So sorry if that's maybe too much coffee, too rambly an answer.

I think it's always helpful, Jason. Okay, our next question is from Chris. Chris, would you like to jump in?

Sure.

Thanks, Taylor. So Jason, my question is about the, I guess you could call it a subcategory of SaaS solutions that are pre built or pre tailored by vertical industry like Velocity. You probably got bought by Salesforce. We have such an app that's been retail for two industries. There's been a few articles here and there talking about this being a growing trend, but I just want to get your two cents. Do you think that customers are ready to buy into enterprise level apps that are pre tailored?

Look, I, I actually think it's nothing new. I mean check out the story of Procore. We've written it up on Sasser, it's on the Internet. I mean service titan, we just talked About Service Titan, SaaS for technicians and H Vac maintenance. Vertical. Forget about SAS. Vertical software is nothing new. There has been a niche piece of software for bookkeepers, for dentist, office, for doctor's offices. We think these are like new categories. They're not walk into any of the oldest. There are Multiple categories of SAs for veterinarians. Okay. I don't know if anyone will have a 10 billion dollar outcome, but people have been writing DOS programs and Windows programs for years. So it's, it's not new and it's certainly the case. Look at Toast. Let's just do it for restaurants. Toast is essentially taking a combination of Square, right? Plus other systems. Say we're going to do Square for restaurants. Square had a little bit of point of sale, right? It had its readers. And actually a significant chunk of Square's business is to restaurants, right? To small restaurants. Toast. Today we're going to just do one thing right? And so there's lots of stories. Klaviyo, which was the only IPO of this year, is marketing just for E commerce. In fact, Klaviyo really is just marketing only for Shopify customers. 70% of Klaviyo's almost 1 billion in revenue only not only only comes from E commerce, it only comes from Shopify, but E Commerce. But, but emails for E commerce are much more valuable than normal emails, right? Because they're so close to revenue, right? They're so close to revenue that Klaviyo actually makes much more money. It's going to eclipse mailchimp, right? And it may even pass HubSpot as a HubSpot's marketing piece because it's so valuable in E commerce, right? Because you're so, you're so close to revenue. So again, more rambles. I don't think vertical SaaS is anything new. I do think the fact what we between by adding more value, by running payroll, by running payments like Shopify, by doing more stuff for verticals, it turns out the categories can be 10 to 100 times larger, right? I don't know exactly before Service Titan how big the H Vac software category was, but it was pretty small. Okay? At Shopify today, two thirds of Shopify revenue comes from payments and financial services, not from software, right? So these are the kind of things, these are examples of things that expand the market. But again, I don't think vertical SaaS is new. And my. Here's my personal view for about 10 years of looking at this, maybe 11 years. Every industry, every industry of any size, any industry with 100,000 or more customers, okay, can needs a system of record. They need a core operating system. Service Titan is an operating system for plumbers, janitors, H Vac. It's not just a tool, it is an operating system, right? It is an operating system. And so every. If the market's too small, if the vertical is too small, then you can't get enough scale because SaaS is hard to build, right? You need a bunch of smart people. But any industry with 100,000 or more, you can probably support a 10k or more ACV if you add a hundred thousand dollars of value to that industry, no matter how small. So that's the art. Can you add 10 times more value than you charge and can you be number one? There isn't necessarily room for 20 vendors in a lot of vertical SaaS, but there's room for two and there's room for one big one. And get your ACV up to 10k. My last. I know a lot of rambles. I'm speaking fast, faster than usual today. But a lot of the key, if you look at the math is getting your ACV up to 10k because below that, there's often not enough customers in vertical SaaS. To, to. To get there. But 10k above, right? What's 10k times 10,000 customers? It's a pretty good business.

So first of all, I really appreciate this as it applies specifically to the Salesforce community where Salesforce isv. What I'm trying to figure out is if an enterprise customer who's got the need to tailor Salesforce for, in this case strategic account managers in a particular industry, if they have a choice of hiring Accenture to come in and do all that tailoring or to do it in the house, or third choice, go to a Salesforce ISP partner who's already pre built an app for Sam's in that industry.

Right.

I'm trying to figure out if that's the bet. The right bet.

Look, that is if you're in a large enough segment of the Salesforce ecosystem, there's always eight figures of revenue there. There's always. Right. If you can provide enough value. Right. I mean the. What is Salesforce doing? 150 billion in revenue, right? Something like that. I don't think it's doing 200 yet. I might be wrong. You know, 5x that goes to integrators and people deploying Salesforce. So there's a. There's almost probably. You know, it almost sounds uncalculable. There may be because all of SaaS is only a trillion, but there may be a trillion dollars of spend going to deploy all of the Salesforce ecosystem. Not just sales cloud, but service cloud because it's 200 billion in revenue spending four to five times fully burdened. That would be a trillion dollars. It's at least 4 to $500 billion spent deploying those apps. So is there enough for you for someone to get 10 or 20 million for a niche? Of course there is. Right. Of course there is. Right.

As a software isv or is this. This integrator.

Yeah, but what's the difference? Because listen, we can't spend all of our time on this question. You're trying to replace some of that Accenture dollar, right? So there is clearly, at least in theory, a vast market for every single thing an Accenture does on Salesforce to replace it with software if the software is great. Because people are spending two to ten times more money deploying Salesforce than they are buying it. When I was a VP at Adobe, we had two whole floors with people from Accenture just trying to deploy them. And I think one of them was trying to deploy Salesforce across the whole company. There must have been 100 people from Accenture there for 3 years. Trying to migrate from whatever CRM Adobe used before to Salesforce. And it worked, but it took like four to five years to do it. There are hundreds of people in Accenture on their own floors with their own badges and elevator buttons doing this. If all of that could be replaced by software, it would have all been replaced by software. But if you can replace a significant amount, right? Vendors like Pipify and many others are trying to do this. If you can replace the significant amount of the actual market size is vast. Right. But you got to do it for real. You got to do it for real. There's few markets, in theory, that are more disruptible than these IT consulting services. It's just we need magic to do it right.

Thanks, Jason. Much appreciated.

Thanks, Chris. We're going a little out of order, but just because someone asked a relevant question to this conversation specifically about extension products. So, John Becker, do you want to come on and ask Jason your question?

Sure. Jason, thanks for the. Thanks for the time and. Yeah, good timing. So what are your thoughts, I guess, on platform. On the platforms like specifically ServiceNow and of course, Salesforce, which is the gorilla there from an ISV perspective and bringing products that extend that platform or those platforms to market.

Look, I don't have any brilliant insights other than. And again, I wish of. Of all the EcoSystems, I know ServiceNow the worst, right? I know. I know a lot about Shopify now. I know a fair amount of Salesforce. I've been in it. I know the least about ServiceNow. But there's, you know, there's usually roughly, there's. Well, first of all, there's huge power laws, okay? There's huge. And I'll give you an example in a minute. There's at least 10 vendors in these ecosystems that can build massive businesses. Okay? There's at least 10. Where it gets confusing is when you look at all the folks out there, right? They can't all. There's power laws and. Let's take a look. I don't know. ServiceNow is up. But let's take a look at the Shopify ecosystem because they all have similar power laws. Okay, so Shopify, I don't know. Let's see if we can Google it. How many partners are there on the Shopify platform? Right. Thousands. Two thousand. And I'll. But then I'll give you some really interesting metrics in a sec. One of which is public, one of which is sort of. Okay, I don't know. I can't tell quickly, but there's thousands and thousands of Shopify apps. Okay? Number one is Klaviyo, which we talked about. You can research Klaviyo. They're the only SaaS IPO of the last two years. The only SaaS IPO since HashiCorp in December of 2021. Klaviyo is coming up on a billion in ARR. Growing 50 and profitable. Okay. That's number one. So. So let's call them 850, 800 million ARR. I'm. I am an investor in. And Klaviyo is Shopify for marketing. Okay. There are about 10 Shopify apps that have broken out. Okay. I'm Gonna Guess the 10th is a company called Gorgeous, which I'm an investor in. And we've. We've highlighted. That's Shopify for contact center. Okay. But it's 10th. Okay. And they just published their revenue last week, so I can share it. They just crossed 50 million air. So number one is at 800. Number 10 is at 50 million. Right. Growing just as quickly. Right. And then number 100 probably gets steak knives. Maybe even number 20 gets steak knives. Number 20 probably gets steak. Because if number one's at 800, number tens at 50, what's number 20 at 10? Right. What's number 100 at? You? Not. You don't even get the steak knives. If you're 100th on the shop, you might get fired. Right? Not literally, but there might not be enough oxygen, enough revenue. Right. That's the way it was when I was in the app exchange ecosystem in Salesforce. That's the way it is in Shopify today. And so when you look at these ecosystems, you. You gotta do one of two things. You either if you're going broad, you gotta be in the top 10. Right. Or there's just the attached. The reason is attach rates. Attach rates just aren't high enough. Right. You can't access all of the customers. Actually, Klaviyo has an insane attach rate to Shopify. We can talk about why, which is why it's so big. Gorgeous actually doesn't have as high an attach rate because you need Klaviyo in many cases to make Shopify work. Right. You need marketing to make it work. You don't actually need support agents to make Shopify work. That's a problem you figure out later. Okay? You figure it out later once you scale. So you don't need to buy it on day one as much as you need to buy Klaviyo. So there is day one high attached vendors that make these applications blow up and the rest struggle, which doesn't mean you shouldn't do them, but it does mean it probably can't be everything for you. It probably can't be your whole banana. Right? So those are some. I think those numbers, the 850 in the top 10 of Shopify and then it falling off a cliff after that, hopefully, is pretty. Pretty insightful.

No. Thank you very much for that, Jason. Appreciate it. Appreciate it.

Thanks, John. Next up, we have a specific situation. Question about hiring a VP of sales. I think from Ryan. Ryan, you want to jump on?

Yeah, just hire someone that worked somewhere with a fancy logo, looks good in a tie, and talks the talk. Like, just hire someone that knows all the acronyms and just stop there. They don't need to know the product. Like a great VP of sale. Every product's the same. You don't really need to understand what the product does or how it works, or you don't need to be able to do a demo yourself or answer any customer questions. You just need to be a buddy, just a pal customer. Because people buy from people. Folks. People buy from people. You don't need to know the product. You don't need to know the sales motion. You don't need to know how to build the slides or even how to log into the app you're selling. You're just selling to people. You're with me, Taylor.

We're getting Jason's holiday hot. Takes everyone before disaster.

Annual sessions. I usually do fake sessions to start this lesson on how to. The actual mistake that most founders make. Hired a VP of sales. Right? They literally. And then also I want to ask. Let's. I want to hear for the answer question. I can't tell you even this year how many times actually I interviewed. I'll tell you. I think I wrote this on Saster. I actually interviewed over 50 VPs of sales this year, some of them actually for Saster itself. Because we need one. If anyone really wants this and knows we're doing, let me know. Other than for a bunch of portfolio companies and I can't tell you, of those 50, maybe it's more like 70. Okay, 80. Did no research before the call and literally just thought, selling's the same. It's the same. I last sold whatever. I last sold outreach. I last sold sales off or gong or klaviyo. I'm not. I don't need to do any research. It's all the same. Don't hire that person. Okay? If you do Nothing else in 2024, do not hire the person that does not profoundly understand the product. The Markets are too competitive, budgets are too tight. More importantly, almost all of us are selling to more stakeholders. Now it's not some mid level person that inbounds with budget. You've got to sell. Everyone's talking about we got to sell to the CFO and the CEO and the VP and the mid market person. They do not suffer fools. They do not suffer people that do not understand the product. You will lose that deal to your competitor that knows this industry in and out and how to solve your problem. So rambly offset to my. To my jokey answer, but ask the question again. Sorry.

So my question's actually not about the VP of sales hire. I. I've watched enough of Yalls videos. I kind of used Yalls bible when interviewing a few folks and found a guy that dove straight into the product, got excited about it, was willing to build out the process. All that shit's good. So we're. We're right at that. Signing contracts for a million ARR. Have line of sight to 10 in probably two years if we stay. Keep the train on the tracks where I'm struggling the most because it's just me until I get somebody on board that built all of this is that every meeting has a thousand aha moments in it, a thousand product opportunities, a thousand pivots. Like right. Even when we're signing our contract last week for a large enterprise account, they're asking for 50 more things that I never even thought of as a business. And I mean I signed on to Gong so I can start recording this and cataloging it and trying to keep track of it. But what. What do you recommend for a solo founder that's getting all the gems from the first million in ar.

ARR.

What do I do to collect all this crap and not be scared?

You're at a million. You're closing bigger deals. You just hired a head of sales.

He comes on in March.

Okay. And it sounds like your product's pretty complicated, pretty technical. Pretty complicated.

Yes sir.

Okay, here's. I only have bad news for you then. I'll give you an example you don't, you don't get. You have to be in every deal. It's too complicated. There's too many questions. Right. It's too sophisticated. You will. Unless you hire a VP of sales that frankly was an engineer and smarter than you in the industry. Which is possible. That's not as dumb as it sounds. There's trade offs there. It can work. They're going to start asking you questions about battery test and there, there's no way he's going to. He or she's going to be. Answer the questions right. You're with me here. Right? You know what's gonna happen to that deal if you're not in the call? You lose.

That's been the problem we've had.

There's a company I invested in that'll go nameless. They hit 20 million last year. Brought in a. In a very complicated workflow category. Probably not as complicated as what you. But brutally complicated enterprise workflow. Okay. Brutally complicated. Brought in a seasoned VP of sales. They are at 20 last year. They'll end this year at 22. You know what happened? The CEO stopped doing the sales calls. And they lost 100% of their complicated deals to the 12 competitors. 100%. They lost every single day, including. I got an email yesterday. They lost an $800,000 deal the CEO wasn't in. They just couldn't answer the questions. They could do a pricing table. They could talk about discounts. They could talk about the tagline that's on the website. But this is a product that is complicated. That if it doesn't change the game for your enterprise, it's pointless. But it's. And they would lose every deal. It's could not be sales driven on its own. And so the tough lesson I gave to him and it's already worked is you got to be in every deal. It doesn't mean you have to close every deal or open every deal. You have to be in every deal. You have to be answering all those questions. And the only thing that will save you ultimately probably is hiring an incredible head of product that is better than you on the product. Okay. Right. Or hiring me once in a while. An incredible head of success. Or Enable. That's a product person too. But that's the only way you're going to get any of your time back if you leave these deals. They will not. I know you're a solo founder. I know you have no time. I know you're hoping for your life back and to. To spend the weekends at the beach and to go on some vacations. But it's going to get worse when you hire the VP of sales because you're going to have to be doing. You don't ever get the time back and you will lose all the deals you're not in. It's just a fact. It doesn't mean you don't need it because you need leverage because you want to close more deals per year. So you need to migrate instead of being the opener. The middler and the closer you will spend more time as a middler. But you don't get the time back. You just, you just. That thousand hours a year all gets compressed into the middle and you get to back off from the discovery call and the, and the, the follow up at the end. But you don't get any time back. You don't get one hour back.

I'm okay with that.

I know. But most people don't get it. They think they're going to get it. And the only time this really works, the only time you get time back, and I know I've written about this before but for folks, the only way you get time back when you hire a VP of sales is if the last product they sold was truly harder to sell. If it's truly they go into an environment that in every way is easier. Right. Then you get some time back because they already did it. They already learned how to sell that tough vertical SaaS or complicated battery sass or develop like they go somewhere easier. Then you get your time back. But other than that. So that it's even tougher as a solo founder. But the last thing I'll say, which maybe isn't the question you're asking as a solo founder, don't forget, as you scale and maybe at a million, it's going to be tough but maybe in the next two years and maybe it is your head of product which helps you, you can find a late co founder, you can find an almost founder, you can find someone that is crazy enough to care almost as much as you and you can give her him more equity and you can give them more and you can do more. And it is not, it is too late to officially find a founder.

Right?

Right. You're at a million. It is not too late to find an ex post facto co founder, someone to carry the load. And that's what you probably, that's what I, I think almost every solo founder does. When you look deeper. They're actually, they found someone later that was kind of at that level. Right? I mean literally. I know it sounds off topic, but I just watched this week, there's a video on YouTube with the, I think the head of design, the VP of design and the VP of engineering for, for Tesla. They're doing the Cybertruck with Jay Leno. I never watched Jay Leno. But watch this video because what's interesting about this video isn't that they know the cybertruck, the VP of Eng and the VP of Design. They're, they're at that level they're better than. They're so good they could sell anybody anything. They know everything about this product and they speak with authority. So find two of those for your team. Like wherever Elon found these guys and they each manage a thousand people. They said. But. But he has. That's how he gets the leverage, right?

Where do you find. So where do you find that person in the community? I got five different of our mentors telling me, I need a partner. I need you to bear the weight. So where do you find that partner?

You know, it's hard. You just got to. You gotta just meet everybody. I don't. I don't know that dating services business. Dating services work. I don't know that meeting mediocre people that applied in ATS and can't write a cover letter works. I don't know. But you gotta, like, meet as many great people as you can. And you gotta ask everyone great. You know, just to introduce you to great people, not necessarily for recruiting. Can you introduce me to the best head of product? You know, can you introduce me to the best marketer, the best pro? Like you're not. Not be passively learning and recruiting and those people sometimes can get you someone, build a relationship and do more stuff in person and go to more events. I know it's tiring. I don't know where you're based. Like, this stuff is ten times better in person, even though it's ten times more work. You don't get to know anybody on a zoom. You gotta try, right? But you gotta do it. You gotta meet. Meet as many of the best people as humanly possible and constantly be asking them for help. Do you know. You know, meet Amelia or Taylor or Jason, Meet them in person, spend some time with them and at the end say listen. Is if you can think of anybody you happen to know that could be great at product here, let me know and it may rattle around in their brain next week. One time out of 50, they will get you someone, right? And you got to do that. The best people get you the best people. And then once in a while, you luck out, right? You. You. Someone is someone inbounds from your. From your ats, and it works. But the best people know the best people. That's all you. There's no. There's no magic solution to this, right? Perfect. Thank you. Thank you.

Thanks, Ryan. Jason, we have a question from Alina. I'm going to ask for her. She is asking about your thoughts on how to stand out in terms of customer acquisition among big and established competitors. Who are non true AI, but they are saying they are true AI. And then someone else is asking for a distinguished to please distinguish between true AI versus not true AI.

Look, I don't think that. I think we're getting lost in VC isms and Twitterisms or X isms and LinkedInisms. But let me step back from it. There's no, there is no question that AI, it's a, it's at the, at the vendor level, it's a force of nature. At the force of nature, it's a force of nature. And what that means really varies. I would say I can give a wide range of answers. I think. For example, one custom company I'm an investor in is called Maestro qa that does Contact center qa. That entire category by the end of next year will not, won't even resemble what it did 24 months ago. Because of AI. Everything is changing. Because what QA traditionally has done is had humans grade the outcomes of customer support. Everyone wants AI to do it for better or worse. Like it, it's the fastest change even though people don't see it. Legal is happening too. There are other categories like Contact center where it is more AI being added to it. But if you look at Intercom, go to Intercom's homepage, Intercom.com you'll see what does it say at the top? 50% of support interactions are going to be automated by AI. That, that is disruptive, but that's adding AI to a product. And then there's a third level where it's Sony baloney, where you're competing with vaporware and you're competing with apps don't work and you're competing with crap. And look, I don't have any of the answers here. What I can tell you though is a couple things. You gotta be in the game today. There is so much demand for AI even if it's not fully understood that if you go into, especially in the enterprise or more sophisticated parts of tech, if you don't have parity when AI, you're going to lose deals, you got to do it. And I. My biggest concern is folks that have fallen behind that don't have strong enough technical teams to add AI to their products or that resist it. Resist it dogmatically. Hey, it doesn't matter in our category, it doesn't matter for H Vac SaaS, it doesn't matter for this, it doesn't matter. Well, maybe you're right, Maybe you're right, but it's not what the customers want to hear, okay? Everyone is expecting innovation from AI and it's required. And whether you're pure AI or fake AI or native AI, I mean, I know it's stressful today. I think it will all shake itself out by the end of next year. What that means, and I think some of that is VC isms, right? VCs want to fund things that are truly disruptive, right. Not, not that are fake disruption, which makes sense. It's the only thing that's enduring. Customers just want a dramatically better product, ideally that can do more with less humans. Right? What AI? AI can mean two things with customers. It can mean better outcomes, which is great, but takes work, or it really can mean, hey, listen, I can't find anyone to do any work, I can't find anyone to send my emails, I can't find anyone to update the website, I can't find anyone to even do sales at my company. Right. I'll take AI, but that's about efficiency and automation. But, but yeah, it is tough. We're here. I don't have the perfect answers, but I can tell you like if you're behind in your segment, fix it in Q1 because you're not. You're gonna not get a pass in 2024 for not having some sort of AI parody with the competition. You're gonna, you're gonna get left behind. Just the market wants it.

Great, thanks. Jason Alistar. You have a question for Jason? Oh, I think you're on mute still. There you go.

Hi Jason, thanks a lot for your time. I'm a seed stage founder of a construction tech company. We're at 1.5 mil ARR. Growing efficiently 3 times year on year and 40 odd staff just expanded from Australia into the UK. Question is, as we go through this scaling journey is around how you see the best companies steering into metrics and KPIs to drive performance. Not so much at a company level. We're right across our financials and our SaaS metrics, but more from that sort of next layer of leadership like the head of department level. Some people are more metrics orientated, some people aren't. And just sort of, I suppose how you see companies scale and do well as they go through that growth journey.

So you're going from, let's call it 1.5 to 5. Right. How metrics oriented should your leadership be? Is that the question? How metrics oriented they be? Yeah, I would just fire anyone that isn't metrics oriented. Literally, you don't need anybody today. You have the wrong people. First of all, I Don't think you should ever hire anyone that isn't metrics oriented. But it's usually a sign of someone that should either not be a VP or should be somewhere much larger than you're at. You want folks at your stage that ruthlessly embrace metrics. You want every single person on your leadership team to have a dashboard that they present weekly at your e staff meetings. And they, and ideally today, send out to the whole company weekly. The best leaders send out weekly dashboards across all departments. Here's how we did in lead generation, here's how we did in sales. Here's how we did in pipeline. They send it out at your stage. They send it out to the whole company by email on Friday. You want everyone, and I would force every VP to come to whatever staff meeting you do each week and have them come with a dashboard. And the one that can't put together a dashboard and the one that argues with you and the one that doesn't or even worse, doesn't even know what should be on their dashboard. It's a. Here's a test. Don't tell them what it should be on it. Have them come up with their dashboard. Then when they do, help them make it better. If they can't do it, fire them. I don't mean be mean. I don't mean fire them on Christmas Eve. I don't mean that. It's not. Was it your. And when I say fire somebody I know I'm being direct. It's your failure as a leader for hiring the wrong person. It is not their fault if they're unable to be an owner. If they're unable to do a dashboard, if they can't do this exercise, that is not even 1% their fault. It is your fault for hiring them. You screwed up. You hired a big company person or the wrong person. It is not 1%. It does not make them a bad person. Do not humiliate them. Do not blame them. It is not even a. It feels like it's their fault as founders. Like, it's profoundly frustrating when people let you down and they can't take accountability. But it is not their fault. That is the mistake we make as leaders, as driven founders. It's all your fault. You should not have hired them. And but use this. This dashboard is the greatest trick. I know Taylor and Amelia are nodding with me because the folks that can't get that email out, that can't build the dashboard, it's hopeless at your stage. I think it's hopeless forever. But eventually you get so Big that. That Elena or Trey have a team that builds their dashboard and they just hit refresh. And then they get so big they don't even hit refresh themselves. They just get handed the dashboard because it's. It's too much work to hit refresh, but you're not there. So anyhow, I'll boil it all down. This dashboard trick. Have everyone do a dashboard for January. Tell them to come up with their own dashboard. We even do it on our own team. We do it in notion. Do it however you want. Let them do whatever want, but let them compress all their metrics into five or less metrics, not 50. Some people need a little help to go from 50 to five, compress it to three to five metrics that ideally should tie to their goals for next year. Like, what are your three top five? No one should have more than five goals in each department. So your company should have five goals for next year and each department should have five. Each board meeting and company meeting should have those five goals and show progress against it. And then your weekly dashboard should roll up into those goals. What are your goals? ARR. Nrr. Opportunity creation, Pipeline, Creation, story points, features, whatever it is. Pick the five goals for the year. And the best leaders will just report on progress and they won't make excuses. They won't hide from it. And they won't not send the email when the week is bad. And they will tell you why they're behind. And not only that, the best leaders will tell you they're behind before you realize it. Right? They'll tell you. Alistair, I'm sorry. I know. I know that I promised you leads would go up 20% each quarter this year. Here's why it's not happening. And it's not just that I don't have budget. Let me be honest. It's not just budget. We tried this. We exhausted these channels. We did. We did constructor industry events in. In Perth. That did not work out as well as I'd hoped. We tried this partnership with Procore. It didn't. It didn't play out. That's all on me. Here's what I'm changing in Q2. Here's what I'm changing in Q3. Here's what I'm changing. That's what leaders say. The R. But 90% of the world will hide from these weekly dashboards. They'll hide and just apologize to them, say it's your fault and move on from them in January. Don't even. Don't even have them work at Your company in February, it's just going to dilute and distract everyone else that can do the dashboard. They should be gone in February.

Amazing. Thanks. Jason.

Holiday. Hard truth, guys. From Jason.

But it's your fault. It's not their fault. It's your fault.

Okay, next up, Suman, you have a question about IPOs in 2024?

Yeah.

Or generally. Thanks. I'm Schumann. So I run a seed stage AI fund since 2020. Have about 30 companies across two funds so far. So since you've gone through a number of business cycles, you know, once the IPO market opens up, liquidity, etc. Do you think later stage, kind of SaaS, AI SaaS, companies that are working, like, growing, might consider going public earlier? You know, the number in 2020, in 2005 was 123 million in terms of where companies were. And in 2021, it was 700 million. Do you think that, you know, what. What does that scenario potentially look like? Or how are you thinking about it?

Let's step back for a minute. First of all, it's a misnomer that the IPO window is closed. Canva. We just wrote it up today. Canvas at 2 billion in ARR, growing over 40%. And it's profitable, cash flow positive. It can IPO this afternoon if it wants. It'd be a little hard to get it through the SEC in one day, but it can IPO. And it could have IPO'd any month this year because it's been profitable for four years. It started this year at 1.4 billion. With those metrics, it could have IPO'd in January or February or March, no matter, anything. And it can IPO any month it wants next year. Right. Whether a databricks has to get a little bit. I mean, databricks is. Is, you know, another top candidate. Maybe, you know, they burned a lot of cash this year. Maybe they should burn less next year. But my point is the markets are. It's a misnomer that the windows open and close. Right. They only open and close for the marginal ones. Right. Bird declared bankruptcy today. Okay. They went public at a $2 billion valuation at the peak. That's a. That's a. A window open for gobbly gook and scams and fakenesses. And also maybe for marginal SAS companies. There are folks that IPO'd in 2021 that were at the. At the margin, 100%, 100 million in ARR, with mediocre growth that weren't cash flow positive, probably shouldn't have IPO'D okay. All the ones that are sub a billion or sub a billion and a half shouldn't have. So the window closes for the obscure or the fraud or the, the edge. But it's always open. And so what do I, what's happening though? And, and I've invested in one way or another in about four companies that are at 200 million error or above. Okay. And so I can watch, I'm really not on the board of any of them at this point, but I can watch what's happening. And then they're waiting. Why are they waiting? Well, let's imagine it was this year and you're at 200 million in ARR, growing 40% and you're cash flow neutral. That's pretty good. Right? But what if you're worth 6x and you IPO, you're worth 1.2 billion and the last round was at 5. Like it's a little stressful. So people are waiting, they're waiting to IPO and the number of folks at 200 million. Like just look at some of the Saster stuff we've done. Greenhouse is at 200. Even with challenges. Gain sites at 200. Right. Canvas at 2 billion. Algolia is at 200. All these folks are that we've done stuff. They're all, they all can IPO when they want to and they've waited because the last two years were not great times. And the question is, in 2024, did they stop waiting? And I think they stopped waiting. And you know, we talk about service now. I mean not service now, service Titan. I wrote it up tomorrow. It's going to be on Saster tomorrow. I think that'll be the first SAS IPO of 2024. Okay. They're at 500 million in ARR, growing 40% with pretty, with, with the client with almost, almost cap. They're not, I don't think they're cash flow positive, but they're getting there. They, they. Yesterday the, the press said they'd already filed IPO to IPO in March or April. So that will go public. And the last round was I think at nine and a half billion. Maybe they won't be worth nine and a half billion. Klaviyo's last round was also at nine and a half billion. They're worth seven today. And so I think what's happened is a lot of the super late stage investors have given up on those late stage valuations. Right. Canva was at 40 billion and maybe the IPO at 20 billion next year. And the world doesn't end. The world does not end. But there was a lot of pressure to maintain those late stage valuations. I think that's evaporated to be nerdy. I think a lot of it's evaporated because they are in SPVs and other vehicles that, that the VCs don't care about anymore. They've written those SPVs off. They literally don't care if they're down IPOs or down rounds. That's one technical thing. It took me a little while to realize, but they're going to go. And I think by the second half of 2024, people that either want liquidity or they want the cash or it's time, they'll suck it up and they're going to stop. They're either valuations will reflate, public companies will go to 8x or 9x on average, or 10x versus 6x and then everyone will rush to IPO evaluations. Reflate. Right? Or they won't. And it'll be three years of this. This is the third year of things like not being like kind of crummy for valuation, not necessarily for SaaS. Again, look at this canvas and the service titans and the databricks. These are great companies. But the multiples fell off a cliff in 2022. Right. And then they remain crummy in 2023. Either we get used to it this year or we see an uptick. I don't know which one. But people will normalize it and by the second half of this year they will ipo. And, and I, I, I've done a bunch of Harry Stebbing's podcasts. Earlier this year I bet $70,000 that we would have an IPO a week in the back half of next year. I got a little nervous about that bet after the klaviyo kind of things got quiet. But I think I'm gonna make money. I think I'm feeling pretty good that by the end of next year people are just gonna, you know what, it's time. I'm at 240 million and error. I wanted to be worth 10 billion, I'm gonna be worth 2. It sucks, but what are you going to do? Like, I mean, life is life. Do I think that there will be bubbly AI IPOs that are able to IPO without traditional metrics, without being at 200 million or more in revenue, without top tier growth and without decent efficiency? I doubt it. I don't think there's going to be any type of SPAC type bubble next year for AI. But maybe, maybe B bill gets so crazy. Is OpenAI worth 80 billion with a weird non profit status and people not even buying shares? These people are paying 80 billion at open APA. They don't even get a share of stock. They get a share of a potential profit which may never come. I mean maybe, maybe people will want to buy. I mean it could be right. But I don't think right now we have so, so much liquidity in the public markets that we can maintain that. Frost, my last and again, I apologize for being rambling. The other thing we Learned from Klaviyo Arm and the Instacart IPOs, those are the three that kind of reopened the window, so to speak. Although I don't think the window was ever closed. What we learned if you squint at those deals, especially on the B2B side is there wasn't a lot of demand. And if you haven't been through an IPO live, if you haven't been part of it and seen what happens, it is iPodS. And this is niche. But it, it may be interesting for folks to learn there's not that many people that invest in IPOs outside of crazy frothy times of 2022. It's a niche category because look, everyone could buy the next day. That's the beat of the IPO. I am the biggest Klaviyo fan on planet earth. 800 million growing 50% crazy metrics. Everything's great, but I can go buy the shares today cheaper than at the ipo. Why rush to the ipo? It's a niche of a niche of a niche of a niche. And what happened in these IPOs is we didn't see dramatic demand. That's why none of them popped. There just wasn't demand. It's a thin, it's a thin asset class. Just like ventures a small asset class. So is the IPO market, right? And so I don't know that it's rich enough today to support sort of speculative AI IPOs. But may, may maybe, right? We'll see. So sorry for the rambly answers today.

No, thank you.

But I do think we're going to see people are just going to IPO starting probably with Service Titan. They're just going to get back. It's time to get back to business everywhere. If the last round was at 500 and your company's worth 100 today, so be it. Everyone's. We're not even calling these down rounds anymore. We're just calling them the new round, right? Everyone's doing Readjusted rounds and it. And it. There's not even any. Just like for better or worse, the stigma of layoffs ended sometime around 12 months ago. You know when layoff started at the end of 2021, early 2020. I was like, oh my God, you're going to destroy your company. If you lay off four people like it will. It will be wrecked like no one. Your company will go down the tubes. You can't do layoffs now.

Everyone.

Now we're at the opposite end for. For worse more than better off. Another 20%. It's no big deal. I'm being a little facetious, but that. But that's happened with. With down. They're not down rounds, they're just valuation adjustments. Right. Canvas worth 20 instead of 40 still pretty good, right? If service titans were 7 instead of 12 and you invested at 80 million pre. It's okay, you're still up 100x. Like we've moved on from that. When you moved on from the down round. Late stigma. Everyone can ipo. So sorry. Okay, sorry for the rambly answer. What do we got next? Taylor? Hopefully it was helpful.

Thank you.

Next up, I have a question I'm asking on behalf of Denise. She said, Jason, I saw a recent LinkedIn post that referenced customer success pullback and refocusing that labor to more sales KPIs and renewals. What do you see for 2024 and beyond regarding those selling more complex SaaS regarding sales roles KPIs, namely SDRs and lead generation nurturing.

Look, I don't know. I have an end of the year post coming up or I say, I don't know. It's coming up a couple days. But what I did, what I have learned this year is that those the functions that we're leaving one area era behind and we're going to the next era. Right? We are leaving the era of how we used to do customer success behind. It was probably happening anyway as I know this is triggering but for me the quality of CS has declined so much the last few years. But it was accelerated by the fact that the downturn forced so many people to focus on upsells from the base price increases jamming products down people's throats. That CS was pushed into a sales role and I don't think it's going back in many cases. So CS has changed I think permanently. SDRs again. You can look at the. The convo we just had with Henry Shuck who CEO of Zoom Info. It's on Saster today. I think everyone that's been doing this. No one thinks the age of the SDR is dead, but everyone thinks that AI will radically change what the STR does. I was just having a deep dive with Kyle from Sales Loft on this and you know, this is a, you know, a nine figure platform. They think the traditional SDR is dead too there. It's salesoft, right? It's dead. It doesn't mean that these products are dead, but that old role of of is dead. And my hope. I'm worried about cs. I, I think that having CS report to revenue is a terrible idea we can talk about but I feel like the, the, the ship has left the harbor or the horse has left the, the corral here. It's too late. But when CS reports to sales, all CS does is try to get more money out of you. I have had, I wrote that, I wrote a Saster post this year. It's pretty good. I think the four truly terrible, horrible customer success experiences I had in just one week. If you read it, I'm not going to tell you who the four companies were but two are public and two are pre ipo and these were horrendous experiences I had with cs. But most of that was because they're in sales now. They just wanted to charge us more. They just wanted to get more money out of me. That, that's not helping me with my product problems or deploy my problems. But that's changed the SDRs. I'm hopeful, I'm hopeful that SDRs now slow down that instead of sending 10,000 emails a week which you know, maybe this is a good thing that Google and Yahoo are going to partially block instead of just sending a bunch of emails a week, not even reading them, having it say name string, last name, whatever. The dumbest thing asking for coffee. How about let's force people to slow it down and and actually talk to 50 great prospects a week. That always works. I'm hoping it's positive and that AI allows SDRs to be more value add hopefully to make more money to not be A hey, I'm 21, I graduated from college and in eight months I want to be an AE profession that's proud of the problems with SDRs is that it is it is a hyper entry level high churn role. I don't think that benefits most of us. I'm hopeful that actually gets better from all of this. But it's all in flux. I think all, all of this influx and the last point on the A so that's the CSM then the STR hope gets better. The ae I, I, I'll, I'll, I'll, I'll finish with one final thought on this. So this year every, every, every big public Sask, I mean, almost everyone below that got more efficient, right? We've written this up on Saster, right? Folks like that have gotten radically more efficient. Like I think Monday.com in, in 18 months went from like minus 5% operating margins to plus 20, right? Salesforce is hitting plus 30. Everyone got across the board. Every SAS company got radically more efficient. Almost every single one there. If they're not gap profitable, they're cash flow positive and they have high operating margins, they got there. And but what it's really interesting until you dig in, you know, it didn't get better was sales and marketing expense. Their CACs didn't get any shorter. Everyone got radically more efficient, but their CACs didn't get any shorter. What happened was they traded off growth for the bottom line. And so if you, if you sell less but you, but instead of, instead of investing all this money to grow 60%, you grow 30%, but you mostly rely on your base for upsell and retention, you actually get more efficient because you're not spending as much on sales and marketing. But your CAC didn't go down. No one's CAC went down the last year. Even though they got more efficient. No one's CAC went down despite the 100 SAS tools we bought. Despite all of these things we didn't get. And so we're in a weird reckoning for SAS and B2B. And ever since I've been doing this, people have criticized SaaS for never being profitable. They criticize Salesforce for it. Then that First Next Generation IPO was Box in 2015. At their first session, they criticized Box for not being profitable. And no one was ever profitable in SaaS until this year. And finally everyone got profitable. Everyone got profitable. But the main way they got profitable was by growing at the slowest rate in history for sas. So they just, everyone stopped hiring and just focused on renewals. And it worked. But we have an existential issue to grapple with the coming years, which is we just plain didn't get more efficient. It didn't matter. Working from home didn't work because CACs went up. Buying 100 sales tools didn't work because CACs Went up. Growing more slowly didn't work because CACs went Up. Nothing addressed the CAC issue. And so when we want to grow again faster, how are we going to deal with the fact that CACs have not gotten any better. Some folks are magically hoping that AI and ChatGPT will change this, but so far, nothing's changed it in software. So far. Since I've been involved in SaaS since 2005, we have not gotten any more efficient in sales and marketing. We've gotten more efficient at other things. So that is the last reckoning and sales. Despite how it may feel on LinkedIn with layoffs and changes, we haven't really had a reckoning in sales. We've shrunk our sales teams or we've kept them flat. So it's felt like a reckoning. The layoffs have felt like a reckoning. But we actually hid in our nrr, we hid in high retention, and we didn't solve the fact that it remains extremely expensive to acquire new customers in SaaS. We haven't gotten any better at that. So that's, that's the next frontier that we'll see if we tackle or if the markets get better and we just pretend our CACs are lower than they are. We'll see.

Thanks, Jason. Okay, everyone, we have one final question that we're going to close out with. But I know we are getting close to time, so just a couple reminders before we close out with that question. We are back next week for one last workshop Wednesday. So make sure to join us right after Christmas. Christmas. And as always, this recording will be up on YouTube if you have to jump because I know a few people do. But with Jason, thanks again so much for the time and I'll let you close it out with a final question from Bank.

Okay. It's not a good one. We do one more though, right? You can't end on a bad pistachio, right?

I'm not.

Okay, sorry. Just a little having a little fun and sass, which isn't that. Isn't that funny on most days. Yes.

Whatever brand of coffee, please share it in the chat. I'm eager to get whatever rambling coffee you have. I think it's going to be good for my next meeting, but I'm think I'm a longtime listener. First time caller, I think I'm a chief Product officer at Path Factory, which is a content marketing company, but I worked at Salesforce for a decade, so a lot of this stuff I'm very familiar with. And oddly enough, you're talking about customer acquisition cost and sales and marketing as the last frontier of cost savings and efficiency. And you know, I work a lot with marketing companies to reduce their spend because we're Using AI and automation. Which leads me to this question. I think the unit economics of what we think are going to change in SaaS. I mean, from my perspective as a CPO, I'm wondering if we're actually going to move away from user licenses being the bread and butter of how we define economics and scale and move in a very different direction. So I kind of wanted your insights.

Into this because on price, will pricing models change?

You mean pricing and packaging? Like think of the world built on user licenses. And now we just talked even earlier on AI and automation saying less resources, different people, more workflow automation. So how do you think the unit economics of our industry will change as a result?

Well, look, I'll break it up into two different questions. The first one on marketing spend. We all have to spend more on marketing next year. What happened? Yes, you worked with folks that reduce their marketing spend to get more efficient. Great. But if you didn't grow your customer base, it wasn't really worth it. This is what everyone happened in marketing this year and it's going into next year. And we saw this because we have 200 sponsors at Saster. And basically what we saw was sometime around, boy, it was, it was night and day. Sometime around November 2022, it just stopped. Marketing spend just stopped. Okay, it didn't stop in January 2022 when things got stuff, people kept spending, they kept saying. And then at the end of 2022 when they're planning for next year and they have to deal with what's changed and they have to deal with, everyone got focused on generating very short term pipeline, very short term ROI versus medium, long term. The spend just got cut in half. And that's great. And it worked. And everyone got much more efficient, right? Their dollars. But what happened is they only put the dollars into efficient stuff. So of course they're more efficient. It's very easy in marketing to shrink to the inner circle and be efficient. The hard part of marketing, and that's hard enough to get the inner circle spent, right? The hard part is spending the outer circles. The hard part is the stuff that pays off in 18 months or 12 months or might or might not work. That's the hard part. That's the art. And that's where a mediocre CMO will just spend all your money. It's all gone on, on crazy stuff. But a good one actually will show you the secrets, right? And so we've got to actually spend more on marketing next year because we ended up with the lowest growth in the history of Sas. This year in the public companies, the lowest growth ever because we didn't spend on marketing. That's not where any of us want to be. We don't want to be in a low growth but more efficient market. We want to be in high growth, high efficiency. We all want to be canva, but we can't be right. So this is the inexorable challenge. And you know, I don't. I'll tell you the I. We did another great interview with Aaron Levy recently. It's on Saster on our podcast. And I loved what he said. It's. I guess it's obvious, but he said working at scale like us, it's a jigsaw puzzle. I have this much in sales and this much in marketing, this much in product. And my half of my job as CEO is the jigsaw puzzle. I have whatever he has, I don't know, 3, 000 employees. We let's. They're the billion in ARR. 300K. He probably has 3, 000 employees. I'm making that up. We can Google it. He's got that. He's got 3, 000 chips for his poker game next year, right? And he's got. And he's at a billion in ARR. So with an 800, you know, with an 80 margin, that means you got 800 million a year to spend. He's got, he's got $800 million a year to spend in a jigsaw puzzle. And we gotta. That's. That's the way it works. And we've got to spend more to grow more in terms of the pricing models and all this. Look, I will tell you, pricing is one of the most popular topics out there in SaaS, right? We could literally do 52 weeks of pricing and that would like have the highest views and the highest everything, but at a high level for founders. I don't think it matters. And what I mean is this. I do think it matters. In each category, there are certain patterns. There are categories that are like stripe where everyone's copied stripes. Pricing patterns that are a category like Salesforce and we copy Salesforce. And there are categories like Mongo, there are leaders, and we all copy their pricing. And nine times out of 10, innovation innovating on pricing is a terrible idea because it confuses your market. It confuses your market. And so do I think utility pricing is better than seat pricing or do I think a combination is better? I don't know if, if AI pricing remains expensive, which it is today, we may see new Pricing models. And Aaron and I talked about this at Box. They had to change their pricing model because they couldn't give AI to everybody. They didn't want to discourage use of AI in their product. Right. But they didn't want to go bankrupt at the same time. So there may be forcing functions where we have high cogs right now, AI is extremely expensive, right? But just copy other people. And if a market is in flight, if a market is changing, if a market wants to move to pay as you go, if a market wants to move to freemium, like New Relic and others moved radically to freemium once they moved away from it because the market wanted it. Datadog and others forced New Relic to change their business model. You can argue on a sales call or you can just give the prospect what you want in pricing, right? So my, my, I know it's not we. I, I know it's exciting to talk about pricing, but I think at a strategic level, my first principle is copy whoever is bigger. And like you, it removes friction. The best way to close a customer is to remove every bit of friction in the process. Right? From discovery to renewal. There is friction all along the process from discovery to renewal. Doing better at marketing makes discovery easier for the customer. Right? People want to be marketed to the right way, right? Making a product so great that it renews itself removes friction at the renewal, right? So many folks, I get in a lot of debates with folks talking about should sales do renewals? Should account management do renewals? Customers, you know, we should do renewals. AI, your product should be so important, so beloved, so cherished and so cheap. So cheap that I'm thrilled to renew the best customers the best products can have. Finance or AI do the renewal because I'm not ripping you off. I'm not trying to triple your price. I'm not trying to sell you crap you don't need or quadruple your price. You love my cheap product and cheap in quotes. It could be a million dollars a year. It could be $100. It's so the value is so high, the value is so high that a finance that an automation can do the renewal. I think if you have humans in a renewal, you're. You have failed your customers. You have failed your customers. If you need sales or success or account, it doesn't mean at the margin you don't need help. I'm not saying you don't need to parachute in on 10% of your deals, but if 80 of your deals can't sell for new, your product's not good enough or it's just not valuable enough. That's the lesson from. That's the painful lesson from the last two years. I used to hate this. Vitamins versus medicine or minerals versus I used to think, no. Every, no, no one's gonna buy anything that they don't need. But that turned out to not be true in 2021. And everyone churned the the apps they didn't need. But if, if I can't run my business without you, I ain't going to turn unless you abuse me. Even if you abuse me. I might take me three years to turn. But so copy your copy. Copy, copy your competitor. Copy your bigger competitors to start in pricing. Resist the urge to be clever unless there's a demand for it. And relentlessly the last thing I can say to folks thinking through next year at product where you are or wherever you are. Founders take a pause over the holidays and there's too much to think about this year. I'm, I'm actually overwhelmed personally with things to think about over the holidays. But if you're, if you've done okay this year, think calmly. Take a whiteboard and talk about everything from discovery to renewal. How can you remove friction from your process? What can you do to remove friction? It is actionable. It is doable. It will make your product better at all levels. It will make your customers happier. Just remove friction. It always works. So again, I know we went over thank you everybody. We'll do another one of these and we'll if people want to do more of these, we, we may be able to figure out a way to do more of them and maybe in a separate session on Fridays with some other speakers. So thanks everybody. Happy Holidays and talk to you soon.

Thanks everyone. Thanks Jason. Amazing questions everyone. Like I said, we are back next week so don't forget about us before the end of the year. And we have head of marketing, former head of marketing at Klaviyo, a company we talked a lot about and now the CMO of Lightspeed Commerce Caddy is going to join us next week. She has a lot of great lessons learned from her marketing long experience and she's going to be sharing them with you guys all next week to get ready for 2024. So thanks again so much everyone and happy holidays. We will see you on the 27th.