SaaStr APAC AMA with Jason Lemkin, SaaStr CEO

Well, look, it was interesting. Especially that last VC panel we had was really great.

It was a really high parts and.

It was interesting how critical the team was from GGV and Vertex and others.

Of some of that.

Right. Being behind. I do think it's true. I don't know if that's the question you're asking. Right. Having said that, I may be drawing. It's tough to draw analogies. You have to be careful about drawing analogies from different cultures and different communities. But again, when I started investing in euro to U.S. companies in 2013, 2014, 2015, people said a lot of the same things, that the teams were not driven, they didn't have big enough exits, they didn't have CEOs to look up to. It might have been different in that I think the engineering cultures in some ways in software were more mature. But there weren't the tons of startups.

In Europe like there were in the U.S. right.

But what I found in me, what I found is the best CEOs find a way. The best CEOs would blend the best of the US and the west with Europe. And you know, and typically they would end up with hybrid teams. Back in the day, the CEO, one of the co founders and some of the VPs would often be in the Bay Area and they would leave a lot of core engineering in Europe. Right. I'm not saying that APAC in Asia is the same model, but I don't see any reason it can't be. And in fact, I think in some ways I think things should be easier today because we're all running distributed teams, we're all running. We don't, we're all used to it now. And yeah, it's hard. And I was talking with a great VP of sales just before this saying how hard it was to recruit from Asia. Well, let me tell you, it's hard to recruit in the U.S. it's hard to recruit in the Bay Area, it's hard to recruit in Palo Alto. It's always hard. But at least if you build something amazing, you may be able to convince.

Someone anywhere across the world to join you.

And I'll tell you, in 2020, before COVID before March 2020, there was 0% chance a great seat. Okay, what less than 1% chance a great CEO in Singapore could convince a US VP of Sales to join them? They just wouldn't do it. They'd be like, I'm an. That's a death sentence. I need to be sitting five feet from my CEO. I need to be in the office with her. The dumbest thing in the world as a VP of Sales would be to join. To be the. The.

The.

To join somewhere where I'm not five people that that world has changed. I'm not saying it's easy to get her or him to join you, but I think people underestimate how powerful it is that we're all running distributed teams and that should be an asset to anyone. They're not easy. Not easy. No one wants to join something growing slowly in a boring space. That's always a tough. It's always a tough sell. But I don't see why it's not better. I don't see why over time that Europe to US thing just can't be reproduced. And you build, you find a way and the more. These VC stories can be really annoying, but you do hear certain truisms of the best, which is they, they relentlessly recruit the best. CEOs recruit 20 to 30% of the time, constantly. 20 to 30. If you're not spending 20 to 30% of your time as a CEO recruiting after a million or two in revenue, you're not getting the job done. Like it's that hard. You got to be interviewing 30, 40, 50 people for every position you got to have in house. Recruiters, external recruiters, right hand recruiters, left hand recruiters. You got to be networking with everyone in the world. You got to be asking everyone. Great. You meet. You happen to know anyone free. Do you know anyone? Great. I'm looking for a VP of sales. I'm looking for a director. Customer says do you know anyone? Constantly, every hour, all the time, every zoom, every meeting.

You.

You should have asked 40 people here if they know anyone great looking. And even if you come up short, that's just part of the job. So a rambly answer to say I don't. Yeah it clearly the talent pools here are more limited than in the US and more limited. But I don't see why in this world you. You can't build a world beating team from anywhere with a certain amount of density. You need a certain amount. It really helps to have a certain amount of founder density. I do think it's hard to build a successful SaaS company if you're in a Geo where you know no one, where there's no one like you. Right. I mean personally like. I mean I mostly live in the Bay Area which is the best but for family reasons during COVID I spent about half the time in Orange county, which is in Southern California, near la, but a different environment where there's no tech. It is the lamest community for technology I've ever. It's beautiful. It's on the beach. There's Laguna beach. The waves are nice, the sky is shining. But. But I. And it. It was uninspiring in tech, right. To know no one. Right. The CMO of Calendly just moved there by coincidence. So I now have one friend, the.

Ex CMO of Calendly. That's it.

But no one else. It's all just real estate people, surfers, retirees, somewhat wealthy people. It's unclear how they make their money and you know, that makes the restaurants fun, but it's not inspiring. But if you have enough critical mass, if you have a Miami or in Atlanta or I think a Singapore. Although I'm not sure. I'm learning and I don't see any reason, any reason at all why from Bangalore or others you can't build a world beating company. I don't see any reason other than time zones. I don't see any reason. I don't see why it can't be done. From Tokyo. I don't see why it can't be done. That's just me though. Anybody else have. Can I help with a question?

Hey Jason, I have a question. First of all, I just want to say that I followed your journey for a very long time. So when Sester APAC was here and I've been telling everybody I'm here on my own payroll, I'm not on my company's payroll, so a labor price. I purchased it myself and I just said and I don't want to be on my company's payroll. So I don't have to own them leads or anything. Right. I just want to come here and learn. So that's it. So love to grab a photo of you later on, but I have two questions. So number one, how did the idea of Sester APEC came about and why Singapore? So I'm born and bred in Singapore. I would love to know why you chose Singapore and how did this APEC planning came about. And secondly, what do you think based on your understanding of apac, what do you think is something good that we have that we should double down?

Yes.

And what do you think is something that can be improved? And I know it's a tricky question because APAC is so diverse, but I would just love to hear your thoughts.

Well, look, the first one, I mean not to spend too much time on niche things. Why APAC? We wanted to do it in 2020. Covid set us Back and we had to focus on when we came back on US and Europe. I mean, look, you can't. Everyone needs to be cognizant of SAS buying patterns, right? You know, the majority of SaaS spend is in North America. The majority Europe is number two. It should be equal by GDP across the world. But it just isn't. It just is. It doesn't make any sense to me at some level. I mean, we all run in the cloud. Spend to me should be proportionate to GDP or something, but it simply isn't. Right? It's a maturity. And you know, the average enterprise company in the US has over 400 B2B apps and the average SMB has over 100. It's just a level of maturity that I'm not sure we have in other markets. I know we don't. So I kind of got a little distracted in your answer. But Nevertheless, APAC for B2B is the distant number 3. Okay? For most, there are exceptions. It's usually you start off, most folks start off in North America, typically then these folks in Britain and Australia speak English, so they start buying your product if it doesn't have regulatory or border issues. So you start getting a little traction, especially you know, Britain is still the largest market for software in Europe. So you get a little bit going and maybe you get a little more traction in France and all of a sudden it's 10% of your revenue or 15% of your revenue. So actually I think most folks wait too long to have an EMEA office. You at least want to do it by the time you have a couple million in revenue to service those customers.

Right?

But then think about it. How long does it take to get a couple million in revenue in APAC for a North American centric company? You might have to get to, I was thinking about this outside. You might have to get to 50 million in revenue until you naturally have a couple million of revenue coming in through apac. Unless you force it. Right? Unless you make it happen. So. But anyhow, you know, so it's a distant three, but obviously it's the number three. And so we wanted to do it for a while. We picked Singapore because it's the easiest I've been here, I knew parts of Singapore. None of the most of the team had never been to Asia. And while most much more of Saster is based in India, we had to pick somewhere and this stuff's hard to.

Do with a team of 10.

So we picked something that I thought people would think was fun and that logistically we could pull off. And it also helped. It would have been fine in Bangalore, probably. But even though Singapore itself is not a huge market, you do want the VCs here, right? We had so many of the best VCs here, from Sequoia to Bessemer to Lightspeed to Capital B to on and on. And there's just so many that are either in Singapore or frequently coming that that makes it easier than trying to cajole people, right?

Yep. So hopefully that answers both the questions.

The second one, what about the what? Based on the interaction with people here, what do you think we are really good at that we should double down? And what do you think? There are things that maybe our culture wise, we need to improve to kind of catch up to our better counterparts.

Well, listen, I'm going to say something kind of crazy, okay? So forgive me. We're among friends, right?

Okay.

So this is very different than when we're in Paris or Barcelona or London where we do events. Right. Honestly, I could be in San Jose, California right now. Now we are indoors, so I don't. There's no windows.

We usually have better natural light at our venues.

But I know this sounds crazy, but I can't tell when I'm in the Bay Area. I see Bessemer, I see Excel. Who did I see today? I saw Bessemer, Excel. I see Sequoia. I saw Bessemer Excel in Sequoia today. Right. You know, it's very different and I don't mean to make any, to compare different cultures, but, you know, the Bay Area is probably, you know, the South Bay where we are, it's probably 20%, 30% Asian American of all different types. I, you know, if I was in the San Jose Convention center where this asked, right. In 2019, it looked a lot like this. Everyone here speaking English. Right? Let's, I mean, let's, let's be. It's a huge advantage in SAs to be a native English speaker. Right. Not everyone has different degrees of fluency in English. I'm just being specific. I know this sounds silly, but I don't see a lot to challenge everybody. I don't see a lot of gates to success here.

It doesn't feel.

I don't, I don't. The quality of entrepreneurs I've met is very similar to the 1 million, 2 million, 5 million, 10 million AR folks.

I meet in the US the capital.

Markets are much smaller, but the same names are here, the checkbooks are here. If you break out, you can raise capital here. Is it harder than being in the beer, sure. But it just the one thing I can tell you if it's helpful, is it, it doesn't feel very different here. It felt very different being in Barcelona last summer. First ask Europa when everyone's partying and the tech community is very small. I mean I love Barcelona, I've been many times but boy it feels familiar. So take it as a challenge to not, not, not not have any excuses. Don't go find those people, go find those customers. People buy products over the Internet today. You gotta visit your customers in person. But people buy over zoom. People want best of breed software and you know, and again not to be, not to accidentally have any cultural malproisms but all the top US tech companies are run by Asian Americans or Indian Americans. All of them. Right. Are there any that aren't amd, Microsoft, Google? Who am I missing? Like I just think we are. There is no, there is no, I know it's not the same same but I just don't feel like anyone should feel there's any barriers to global dominance here. I, I, I, I don't personally see them having been doing this for a long time. I don't, I don't feel it, I don't see it. And it feels to me, I, I again I feel like I could be in a US tech community right here. It wouldn't feel any different.

Right.

Thank you so much for that.

Hi Jason.

Hi.

Looking at your own Sasters marketing strategy, what's top of mind for you this year?

For Saster itself? Yeah. You mean that we have a strategy?

I don't know, you tell me.

Strategy. Well boy, that's awfully niche topic. But if you're curious. Right. As I guess as a stakeholder in the community, I mean I don't know that we have a, we don't really have a marketing strategy or even a marketing team. You know, the goal for, you know, community actually is an area that's much more of interest to people today. Right? Building community around their products, building a community. It's become a marketing buzzword and hotspot. How can I build a community? Right. And Saster is an early example of a successful organic community. So it is interesting for marketers. So the way I think about community is, and a lot of folks that have developer centric products think a lot about community too. Right? Your community of developers is job number one, two and three is to add value to your community each year. A community will either organically grow because you will network with each other, you will go home and bring someone Else next year you will bring two people, you will be three people. You will share Saster content in your Slack or by email, and it will naturally grow if you nurture it or it will slowly degrade over time. Right? We've all seen communities or a random.

Facebook group that we don't check in on anymore. It just wasn't valuable, right?

So this marketing strategy is each year to add at least one significant piece of value to the community and one number, minor but important piece of value for the community. So probably this might count as our number two. Like this is not. This is important enough. Right. And that if we can make APAC really big, that would be a contribution to the community.

Right?

That would be a number two in terms of number one, the most important thing, and we're a little bit behind on it, although I guess it's only February, is we have a bunch of ideas about how to radically improve CEO and VP matchmaking and CEO and VC matchmaking. And we do a bunch of it at Saster annual and we do a little bit at Europa. And we know how to do this programmatically. I just need to hire one other person to help me, but hopefully by the summer will be able to do a much better job matching VPs passively to CEOs and matching VCs to CEOs. And I think for folks in a distributed world or folks that are all across the world, I think it'll be even more helpful than folks that can bump into people, you know, on the street. So those are kind of the goals. And then in terms of, boy, that's as far as strategy gets. But ultimately, you know, we. If you really want too much niche insights, I think if saster grows about 70% bigger, and it depends what metric you use to measure it, then we kind of enter the stratosphere because Saster is like, it is a huge deal for founders, right. And executives. It's where Eric Wan learns Sas and Stuart Butterfield learn sas. And so many. That's why we get so many great speakers, because they were part of Saster so early on. But it's still elective, right? Being part of Saster is a special community. People opt in. Right. In terms of the kind of value that we want to add. Having the feeling that if you're at that, you have to be part of Saster, if not as a founder, as an executive. If salesforce people feel like they have to be their oracle. I know it sounds silly, but like, we want to be something that every part of the ecosystem wants to connect with founders and we're getting there, but we're still kind of an elective opt.

In community events and things.

We're not mandatory and that's kind of the goofy goal. But for everyone to feel like some part of Sastra, they have to be a part of like not maybe the way the folks in this room are, but anyhow, that may be too much.

Information for you, but that's kind of.

The ultimate, the ultimate goal.

Awesome.

Thank you.

Thanks.

Hey Jason, Big fan.

Thank you. Thanks for coming.

The question I have is slightly on like product growth area. So we have like we are a SaaS business. We have customers in about 80, 90 countries and number one question, that's most of them.

Yeah. 80, 90, yeah. All across the world.

Yes.

But these are mostly English speaking countries and we had like lots of requests coming in from non native English speaking countries in terms of localization and we've been like sort of like putting that off because like it's not just like localization of like the product itself or so like content and marketing and like, like looks like a big effort to like commit to like more languages and like more.

But yeah, I get it.

I understand. Yeah.

So my question would be in what have you typically seen in terms of like companies are like 1 million, 5 million, like in terms of ARR.

Yes.

Where do you see companies committing more to like specific locales, specific languages when.

It comes to growth?

Well, I'm shocked. I'm shocked. I do ask a lot of CEOs that I don't do that many CEO.

Interviews, but I do ask them and.

I found that I'm shocked how late.

A lot of SaaS companies localize at all levels.

Back in the day when I was running Adobe Sign Ecosign and we were.

Competing with Docusign, we fully.

And it was a pain, right? We fully localized A2 by the app.

All across every piece of it in.

Every language under the world. And we did it around 3 to.

4 million in revenue.

And the reason we did it, I had to push the team to do.

It as a CEO. The team didn't want to do it.

They didn't see it. But when I started meeting with our top customer, when I started, we had.

A lot of tech customers back in the day. So we had Facebook and Groupon and Google, Twitter and their sales teams were using us back in the day and they said, I'm sending contracts to India, maybe not India. I'm sending contracts to France, I'm sending contracts to Germany, I'm sending contracts to Korea. And it would be great if the. All of the interface was localized. Okay. And we quickly realized we could win tons of deals in tech if we did this. So I forced the team to do it. And then we went on a run where we won, like every sales team that was tech focused, that had a global salesforce.

Right.

We just won every deal. So that's.

I thought that's what everybody should do sometimes around 3, 4, 5. Now I realize folks are waiting until.

100 million sometimes to do it.

That's. And I'm shocked. I'm shocked at. I'm shocked. Because, listen, I know a lot of folks miss, okay? They don't architect their apps in the early days to be localized.

And it's a lot of work, but.

It'S also sort of well understood.

And there are tools and niche tools and platforms to do it. And it doesn't have to be perfect. You know, you can outsource all the translations in the libraries and how it.

All works, and you can start off.

With something that's like 85% and not.

Perfect, and that won't let you compete with the native vendor, but it might.

Be enough for you to do what you want to do, and you can make it incrementally better. And then we hired a small team that did it of three in the beginning, and their job was just to continue this process forever. Right? We had like a designer, an engineer, and then like sort of a pm, and just every. Every release they had to improve this process. And we arch, even though we didn't architect initially, it then became abstracted away from our other release process so we could continually improve every piece of it, and it was just a winner. So I don't know if those stories are helpful, but I think we wait, too. I think we wait too.

There's a whole bunch of things that we wait to do. We wait too long to enterprise our apps. We wait to. We've got Vanta here. We wait too long to do SOC compliance. We wait too long to do HIPAA compliance. And we look back, we're like, the team was whiny, but why didn't we. We lost four deals for not being SOC compliant. It was like we had to do the work anyway. And I think for a lot of us, we'll find that localization. We're like, ugh, like, you know, yeah.

It'S a pain and everything's a pain.

But, you know, we just wasted our life not doing it earlier. So I don't.

Those are the best learnings I have.

And I, I'm shocked how many folks wait so long today and look back.

And I'm like, they're like.

It was. It just gets harder.

Right?

So if you can do it in.

Single digit millions, I think that's my challenge. Try to do it and say, try to fully localize your app in single digit millions. Right.

Okay.

Thanks a lot.

Hi Jason, thanks for coming.

Pleasure. I like that about you. Thanks for coming. So I'd also put a Note on my LinkedIn saying that if you have to truly learn customer success, this is what. Thank your customer. Thank you, community. Okay, my question, Jason, is what are the top three SaaS metrics? I mean, we've been speaking about North Star metric, etc. But what according to you are going to be the top three metric? Do you see that the SaaS matrix also evolved in the times to come and there is a shift in say from NRR or CAC, LTV by CAC, etc. Do a different metric. What is your, you know, guess or vision or futuristic outlook?

There's too many metrics. The Internet is too many people talking about too many metrics.

What according to you could be the top.

How quickly do you, how quickly can you grow and how efficiently? That's all that matters.

Okay?

Right now, nothing else matters. It doesn't matter what your cat. Like, if your CAC is terrible and you're profitable, who cares? I mean, we could dig into the weeds, right? There are companies with great cacs that are burning millions per month.

They're measuring CAC wrong.

They have too many people. There are folks with miserable cac, but they're not blending their viral and free customers. And so actually it's fine, right? All these sub, they're all, all these sub metrics are great. Tax, cltv, blah blah, blah, blah, blah. But really what matters is can you grow quickly, efficiently. And there are different ways to get there. There are folks that do it with a very limited sales team, like Atlassian back in the day, right? There are folks that do it with relatively lean product teams. There are folks like. And that's really what Zoom did. Zoom is a great team, but had a relatively tight, small engineering team and, and a viral app. So Zoom was profitable almost from day one. Okay. There's others like Zoom Info, which we talked about earlier. What Henry did, who's great is he was scrappy. He just did everything less. 20% less in product, 20% less in sales, 20% less in marketing. Not perfect. And he's selling data, so it helps. But if you spend 20% less than average like you're gonna be. That's what matters. And I remember I interviewed Ben, Ben Chestnut at sastranials here for mailchimp, which was bootstrapped. I asked him what his CAC was in his nrr. He didn't know. He. It's the funniest thing.

Go watch this session.

I asked him all the acronyms. I asked him who is. You know, he didn't know any of this. He's running. He got this company all the way to a billion in revenue. He didn't know any of these things, right? He didn't know who his ICP was. He didn't know any because it didn't matter. He didn't even know his nrr. He looked at the top line and the bottom line. It's an extreme example, right? So I illustrate that by saying, look, all these metrics matter, okay? Especially for managing your team and for managing departments. But don't get lost in the religion of them. Like they're gonna solve your problems, right?

It is.

You can, you can go, you can go amok by. You can run out of money with a great cac, right? Okay. Now having said all that, as you scale, as you scale, assuming you have a good team, assuming you have product market fit, what we all learn as we scale is if as leaders, as founders is the only one that matters is top tier nrr. It solves for everything else. Top tier nrr. You have other issues to deal with on a daily or weekly basis. If your NRR is not top 25%, invest in it. Figure out what's wrong. Figure out what your product is missing. Figure out why it's not expanding enough. Figure out what's going on. We can't all be in the top 1% or 10%, but be worried. And another great session from Saster Annual this September, if you want to watch it. I did it with the founders of HubSpot, Brian Halligan and Dharmesh Shah. And HubSpot had horrific NRR for a long time. It was 75% at 30 million in revenue. Horrific, horrific. And eventually they got it up to 100 and then finally to 110% after the IPO. And it was always their north partner. They knew it wasn't good enough. They had product market fit. And the point for learning from HubSpot, it's not that we can't tolerate some mediocre metrics for a while, but you have to have this plan to get them up. And they never let. They knew that for the type of SMEs they were selling to, it was gonna be a while to get to 100%, but it was always their goal. So this is the thing is SaaS is not really that interesting without 100% NRR from SMBs and like 120% from the enterprise. Because you can kind of sleepwalk. I mean, not literally, but it's what makes the business model work.

It's is that the revenue recurs, right? So it just.

And every startup I've worked with that doesn't have top quartile nrr, it just sometimes you don't know in the early days, right? But it just gets hard after 10 or 20 million in revenue. It just gets too hard and they slow down and they get bogged down. And so that's why I think most founders will tell you it's the magical metric, right, is the NRR is. And, but, but know your comp set, know your peer set, know who you're. We're not all snowflake, right? You can't compare yourself to some random Morgan Stanley or Goldman Sachs. Understand your peer set and who they are and what top quartile is and force the team to build the software and build the customer success team to achieve it.

Thank you. Thank you.

Hi, Jason.

Hi.

My question is. So there are some successful bootstrap companies like Zoho, Atlassian and Ahrefs who are here and I want to understand, as a bootstrap founder myself, what about the startups, bootstrap startups who have not done so well and what have they are missing out or what are they not doing well to become so successful as the other successful bootstrap companies?

What are the good bootstraps doing versus the less successful ones? Yeah, well, look, first of all, I really think this bootstrap versus venture backed thing, it is an important line, right, because capital helps, but I think it's almost misdiscussed.

Right?

First of all, most startups, at least for a while, cannot raise venture capital or only raise a little bit of seed funding. Two, outside of the Ben Chestnuts of the world and Atlassians or Zohos, it's rarely a choice. People talk about bootstrapping like a lifestyle choice. Sequoia offered me 100 million, but I decided to bootstrap. Like, it's not really that very few people turn down 10 million or 20 million to bootstrap. I do know a few.

Right.

And I get it. And they're very purposeful and intentional, but usually it's just bootstrapping is forced on us and you know, I remember we asked Michael Cannon Brooks from Atlassian at Saster Annual way back, I think in 2017 what he thinks about bootstrapping versus venture back. His point was, look, when we started in 2000 the world was pretty slow. I don't think it would work today. I think Ben Chestnut said the same thing for mailchimp when I asked. And, and so a lot of folks either were forced to bootstrap and they often, and the ones that were successful often started in categories where there was time. There was time again not to use my own category but in E Signatures when it was just us and Docusign shit, it was four years until there was 10 million of revenue in the category. So it sucked those four years. But we had time, we had time. It was kind of slow. We had time to do it. Other categories, if you want to compete with Figma or Notion, dude, you don't have time. You can't make a product that's an eighth as good as Notion or Zoom. There's no time, is there? So it's very context sensitive. So I know I'm giving you a lot of data and then let me tell you what I've learned and this is where I think the Atlassian Qualtrics and others are interesting is somewhere between 10 and 20 million in revenue depending on your sales motion. The models converge. The models converge. So if you have 20 million in revenue and you're bootstrapped and you're willing to spend all 20, right. You can basically hire as many people as a venture backed startup can. Now you may be stingier and you may not throw money away but basically you end up with $20 million a year to invest at 20 million, right. If you're bootstrapped, most venture backed companies can't, you know. Yeah that maybe they burn a little bit more but you end up having the same amount to spend on the team on marketing and it normalizes, right? So the, the most successful bootstrap companies find a way to get to 10 to 20 million and then, then they become as competitive as the funded ones. Then they become, but they're often not, they have to, to get to that 10, 20 million you often have to be in a less competitive category or a quirky category or a category that stays longer to survive. And you, if you bootstrap in a ultra dynamic category, man, it's tough, right? It can, it can, it's tough, right? There are examples. So you gotta, in every founders got it. You gotta, you gotta pick your battles. In the early days and you have to find categories where you can win. You have to find. I talk a lot about how you have to build a 10x feature to beat a. You can't beat Notion today, but you might do one thing. Notion does 10 times better than Notion does to beat them. Or Figma or whomever you want to pick here.

Or sauna.

One thing, you could be 10x better, but you might also need a business model that supports that. Right. In a space that is evolving just slowly enough that bootstrapping works. And bootstrapping in a. In a hyper, you better. You better tilt to a space that people are overlooking. Maybe a vertical in your industry, right.

Or a segment of your industry that they're overlooking.

Or maybe all the energy is in tech. Or you could do what Monday did, right? Not that Monday was bootstrapped. Monday is like, hey, we'll do normal people for project management. We're not going to. We're not going to compete with. And to some extent, ClickUp Bootstrapped to 25 million the same way they both came into collaboration and said, we're not going to sell to tech so much, especially Monday. We're going to sell to ordinary businesses. And it was harder, but it also meant they didn't need to compete with all the tech leaders. Right. It's another way to do it. So hopefully that's helpful.

Thank you.

Yeah, yeah, go ahead. Oh, well, whoever. First we'll go one, two.

Yeah.

Okay.

Okay. Hey, Jason. So my question is like, while we are doing rain dates today, so excellent forum. But what I realized, I'm talking about SaaS, Matrix and Revenue booking. So there are various ways in which different companies, you know, calculate or compute the formulas they use for. Sorry. For revenue booking. Because there are multiple elements here. They can be one time. There can be customization, there can be. There can be multiple.

You know, and I'm hearing your question. There's a reason I'm frowning, but keep going.

So, okay. And the other thing is. So one is on the revenue booking, there's. I don't.

There's only one way to measure GAAP revenue, though, okay.

Gap, Generally Accepted Accounting Principles.

There's one way.

How much revenue came in this month that I'm allowed to recognize that came in this month.

The further you go away from Gap.

Hmm.

The more fracked up your business is going to be. Now, when you come out of a Microsoft or an Adobe where I briefly worked for others, there's a lot of.

Reasons they move away from Gap Financials. Okay.

I can tell you a funny Story in a minute.

But don't listen to those numbers. How, how, like all that really matters is how much did your ARR grow or your MRI grow.

Nothing.

Everything else is, is a subordinate metric. But, but keep going. Right?

Yeah. The question is what all should go into that mrr because you know, we have revenue. Yeah, revenue. But what does that.

All of it.

All of it. Okay, what about, what about customization? What about one time? Do we spread it in three months? Do we spread it in 36 months?

That's a different question. Yeah, slow down.

All revenue.

Let me simplify all this kookiness. All your revenue should go into your revenue.

Your number one metric each month should be revenue.

That's right.

And your revenue should have all your revenue. And if all of your revenue is.

Not software or recurring, you build a stack chart or a pie chart and you segment it. 70% of our do what's. Take a look at Shopify and we summarize it on Saster. Shopify is like 30% of its revenues from SaaS. Like 60% is from payments and 10% is from other stuff. So Shopify says hey, we're doing 4 billion or whatever they're at. And here's our chart and here's how to. Here's how to segment our business.

Right.

Where we got into trouble in 2021.

Was when fintechs and others would claim.

A lot of 10% or 20% gross margin revenue was software revenue at 80% margin. They would obscure these things.

Just break it down. Just forget about recurring revenue. Just start with revenue like we have.

Since the middle ages. Okay, revenue, what's your and get first? Start with first principles which is get.

Your revenue right each month.

Your actual revenue, revenue.

2.

If you're not sure what to spread out and what not to spread out.

You don't have enough financial help.

You need a part time controller or someone with experience with recurring and non recurring revenue so they have the answer.

There's.

It's not discretionary how you do it.

Generally speaking, if you sign a 12.

Month software contract, you have to recognize the 12th of it each month.

In terms of professional services, there's like slightly different approaches.

Sometimes you do it ratably over and it's changed the last couple years, sometimes ratably over the course of the contract. Sometimes you have to recognize it when the services are delivered and sometimes it's upfront but your financial person comes up with a policy and you stick with it. You don't change it to make the quarter, you don't change it to make.

The VC that looks good.

You start with revenue and a consistent way and you segment it honestly in a consistent way to approach it. That's the real answer. Okay.

And then the further you start talking.

About things like bookings, the more you're getting into trouble. Okay, the more I want credit for a four year deal. I want credit for all this stuff up front. I want credit for a pilot that may or may not happen. That's a bookings. You can do that if you want, but that's a big company construct. They get small companies in a lot of trouble. What matters in small companies is cash and then cash and then revenue and then, and then all the rest.

Right.

So just don't go too far from it.

Right.

I mean I'll give you the last example. Like after my, you know, my after Echo sign, my old startup was acquired by Adobe. Adobe used their processes on us and they said forget about, I only paid my reps on ARR, new ARR, that new ARR. And I paid them a lot of money. Adobe said, hey, we'll pay you a full commission on, on all bookings whether there's any cash or not.

And so immediately.

And you can. And they also said discount as much as you like. So the reps immediately went out and discounted every deal 50% and did a four year deal that was cancelable at any time.

They made so much money. They made so much.

Their bookings were so high and our ARR fell in half.

You couldn't stop them.

The incentive system. But boy, the bookings, we hit the bookings plan, you know, we got to, we want to go, we got to do 5,10 million in bookings this quarter. And so yeah, hey, what if you sign a 20 year cancelable contract for an 80% discount? They didn't do that, but they did for these three to four year deals left. They were fake, they weren't lies, they weren't fraud, they weren't ftx. But this is what happens when bookings corrupt. Got too abstracted away from revenue. Right? A true story. So hopefully that's a little bit helpful revenue and segment it and be honest about the different categories and just get a controller or someone with real, the key is with real B2B SaaS experience to just decide how to recognize these categories.

Absolutely right.

And then the last point is just as a founder you just have to decide are you going to compensate all these categories of revenue the same or not?

Right.

And if most of the revenue is recurring, don't worry about it, just don't you got to keep sales plans simple. The more complicated you make a comp plan, the more people are just. You're going to have those crazy stories like at Adobe, like the crazy stuff's going to happen.

Right.

So keep it simple.

Yeah, sorry. Absolutely. Answered that question in terms of SaaS matrix. Because when I do benchmarking within the firm, I can continue to report the way I do. But when I benchmark and I try to see because same SaaS metric, somebody can do it monthly, somebody reports on a yearly basis. Is there a yearly that's pretty on an average. So I mean the way you compute LTV by CAC or LTV or gross margin, do you. Do you take only revenue or you multiply by gross margin? So if I search on net, there are different answers for one single matrix. How do you compute it? So are we looking at some standardization somewhere down the line? Are we approaching that by any.

I think it's not as confusing as you think. I think people are playing games or.

They have immature controls.

But at the end of the day.

Top line growth and bottom line burn are all that matters.

Right?

Everything else is our how much of customer success should go into gross margin.

Versus not going to gross margin.

Like yeah, you can play games there. People. You know, until recently people would put all of CS in basically sales or.

Sometimes product and engineering or split it.

So that they would have like 75% or 80% gross margins.

Now we've gotten more nuance and what.

A lot of companies do is they're like, okay, the piece of customer success.

That'S long term will go in product and engineering and the piece that's like.

Up front will go in cogs or vice versa. But there's no FASB answer, There's no.

Perfect answer to this stuff. You just gotta be consistent, consistent, consistent.

Yeah.

Thanks Jason. Thank you.

Hi Jason. I was at one of the first sasters in the Bay area. Oh, thanks for coming all those many years ago. Three quick questions. I hope you can cover them all. Will you ever make it to Sydney? There's great things happening in the ecosystem in Sydney. It's really, really cranking and I know.

It'S just the language is tough, the accents are so thick, I sometimes I just don't know what they're talking about.

Actually we so international there these days. So it's Sydney, but yeah, Sydney that's.

Number one is Sydney.

Question number two. Have you ever thought about a spin off conference that's kind of a little bit more intimate? I think I went to some Sessions today that were a little bit smaller.

Yep.

And they were really conference question number two.

Really great niche Sasser questions. What's the third one?

Third one, little bit left field. The Bay area, particularly San Francisco. I've spent quite a bit of time there and I know it's had its challenges in terms of safety and other issues. What's. I haven't been there for a couple of years. I'm curious to know what's the sentiment and what's going on in San Francisco. Mission.

So let's spend some time on the.

Third one because I think I can.

Be helpful when we come to Sydney. Probably not. I mean we have. The simple answer is like we have to pick one city for APAC. We can't do 50 sasters. Not only would it kill a team of 10, but it just dilutes everything. Once, once you get like we've done four events in Miami. Like and we love Miami. I mostly do it because I like Miami. Right. And you know the last one we had the CEO of Salesloft which was bought by 2.5 billion. We had the CRO of Brex which was worth 12 billion. And we had the head of demand gen for snowflakes. That's a pretty good lineup. Right. But it's hard and it's hard to get good speakers and it's hard to get Critical Mass. And we're sat. We don't really want to do an event for 300 like in Miami. Like this is the smallest of size event we want to do. Right? So as soon as we start breaking things up and fracturing it, it's like you building too many features.

Right.

We break.

Everything breaks. The constituency for us, everyone's DNA is different.

Right.

So we want to attract the best of the best. The best of the best want to.

Go to number one. They want to go to Saster Annual. They want to go to SAS Europa.

Maybe we can make that happen in SAS Orac.

And the best of the best don't go to number two or number three or number four. Right.

Even though it sounds good.

So long winded way of saying like if, if, if Critical Mass was Sydney, like notwithstanding the language barriers, I would go for sure. Like you've got great, great leaders there. Right. But my guess is Asia is complicated. But my guess is that we stick to, to Singapore and that that's all we can do.

Even though there's arguments for, for other things. But, but it could change. Right. But. But we'd have to move. We'd have to pick one. We have to pick one center of excellence.

I think the second one, the third one was sf.

The second one was intimate events. No, we won't do intimate events.

The reason is first of all, lots.

Of people do intimate events.

Every Sequoia does it. Bessemer.

Everyone here does intimate events up people.

Do dinners and they do curated small things. It's just we're a community and we.

Want, we don't want to do intimate events.

We will do the brain dates you.

Saw here when you come back to the barrier London.

There we've really nailed it.

We'll have a.

We had a thousand.

It's Astra Annual. We had, we had an aircraft hangar.

Worth of brain dates going for three.

Days this year and we had them fully segmented.

They were all super high quality.

They were screened, they were awesome.

So we can get some of the.

Benefits of that intimacy in a large event. But we're not going to do dinners for right.

Other people. Other. But be. There are. We're not a bespoke community. We want to be number one for two through 200 million in revenue. That's our goal. Number one for two through 200 million. So we, but, but we will do this, this, this mentorship brain aid stuff.

You'll see tons of it, right? And we do weekly workshop Wednesdays on the Internet.

We took one week off. We do 52 week a years of like 20 or 30, 40 people on, on online. They're free, they're awesome, they're amazing speakers. But, but, but we won't do the, the steak things.

Not this team, not this DNA in terms of San Francisco.

Other people do it and they do.

It well, but no one can do this.

It's another way to look at it is a lot of people can do.

Get 20 founders together but the skill set it takes. Sastra annual will cost $12 million. Saster London will cost 5 million.

Saster annual takes 18 months to plan. No one else other people could do it, but no one else has the scale or the capabilities.

So we want to do what we're good at in terms of sf.

Like don't believe the Twitter believe that.

If there's no other lesson you can get today is like, there's like elements.

Of truth of everything on Twitter but everyone's biased, right?

Hopefully not me, but everyone's biased. The San Francisco of 2019 we ran.

We had a 40,000 square foot co working space. Things were crazy. I couldn't walk one, one block without bumping into a public company CEO.

You know the day before lockdown I saw the president of Atlassian the week.

Before the CEO of Twilio on the street, okay?

Those days are never coming back. Okay?

The other thing that's never coming back.

Is that every B2B company had 500 sales reps in the Bay Area. They're never coming back. We're never renting 20 floors of Soma.

Soma. If you Soma south of Market where everyone had 20 floors, it's crickets. It is empty today because no one, no one's going back to having all of their SDRs in the Bay Area.

It makes no sense.

The genie is out of the bottle, right? They will have local offices.

And I think, I do think a lot of folks are coming to the conclusion. Junior sales folks benefit from the office.

A lot of folks believe that.

But it will not be in San Francisco.

But half the VCs and half the founders never left. And people are streaming back. And I think one thing, and what is interesting is that it may not be the folks from the Bay Area.

That are coming back.

It's folks from the rest of the world that want critical mass. And I don't.

I haven't.

There's not a lot of apac. Southeast Asian founders I invested in, but.

I've invested in a ton of European founders. And the time difference from the Bay.

Area to Europe is brutal, as it.

Is to here, right?

So I was just shocked that a lot of them never left. That all the, all the, all the Americans left.

When Covid hit from the Bay Area, they all went, I'm going to go live with my parents in Ohio. They all scattered across the country.

The Europeans stuck it out.

They stuck it out when San Francisco was awful, when it was locked down.

When it was even filthier than it is today. And I kept, why, you're French, you're German, why are you staying? And they're like, there's no founder community like this, right? And it's still true today. So I think you can build a startup from anywhere. I'm not one of those people that says you can't. But there in B2B, it will never be like 2019. So all the folks that say San Francisco isn't coming back, they're right in the sense that there will never be. No one will ever have a thousand sales in San Francisco. But if you can go anywhere and you have a generic B2B product, you don't have a reason to be in a certain geography. You don't have a reason to be in New York or LA or somewhere Else you will never find the density.

Of founders you find in the San Francisco. You'll never be challenged. You will never go to events and.

Parties like you see there. You will never see that. And you don't need it to win. But it's powerful. When you have it, it is powerful. And so that's my. I think people get it wrong, but is it dirty?

Yes.

We had a. We had our Sasser office, our smaller one, our original HQ is in an old 19th century distillery and it has.

20 foot ceilings and it's a corner office with natural light.

And it looks like it's out of.

A startup TV show, like beautiful whitewashed brick and everything you see in tv.

But it's at the outskirts of San Francisco.

It's in an area called the Design.

District, which sounds cool, but it's really.

Barely in San Francisco. Okay. And the reason we picked it is.

Because I lived on the peninsula in.

Palo Alto, and it was also the closest place to San Francisco, so I could get there without blowing my brains out in a commute. March 2020 was at the outskirts of SFA, was vibrant. Okay. Today there's no one left except Sansara, which ipo. It's all gone.

The core is strong, but these.

And so we let our office go. Like, we let our office go. So if you came to the Design District, where the Saster office was, which we moved out of just prior to this event, you'd be like, ah, San Francisco's dead. Like, why?

It's dirty.

It's not clean, it's weird. The restaurants are half closed. But go to 2nd and Howard or.

Go to other hotspots of entrepreneurship and.

You'Ll see something that's.

It's. I miss it.

Like, I didn't miss it in 2021.

And I didn't miss it in the.

Second half of 2022.

And I'm not sure I even missed.

It until our last couple times in the Bay Area. But it is just that, that there's something about density that it's been true since Rome and it's true today, so it's still special. But anyhow, the old one's never coming back.

So if that's helpful or not, that that's the real vibe. Check in sf. Yes.

Okay.

Have you seen examples of other companies that have created a great community? I mean, look, everyone tries to take.

Shortcuts in community and buy a piece of software and tell people to sign up for a website or join a.

Circle or a Facebook group.

That certainly doesn't seem to work.

Right.

Or join our Slack channel that no one moderates.

You gotta go all in. I mean look the best, I don't know a great.

The couple of examples that stand out. Older companies obviously Gainsight and HubSpot invested heavily there. Gainsight, Nick believed in it from day one built. He joined at a million in ARCO and built a huge community around customer success very early. It was seen as a very strange strategy at the day, but it worked out very well for them. Right. That's when you can look at in terms of the more digital side. HubSpot did it from day one. They did it from day one from a content side from all the rest.

And they did it from Inbound which is a huge in world community. And they haven't done all of the pieces. But I can't think of a public.

Non developer centric company that is invested as much as HubSpot is.

So the playbooks evolve but it's at.

Least one to think about. Right.

And then again and then I don't have all the perfect examples.

And the third one that comes up.

Which you know I'm always. Community is an amorphous term and people.

Claim they have more community than they do.

But if you have passionate users, I really think you can copy a lot.

Of what Notion has done.

And notion is interesting because it took Notion eight years to take off. Notion seemed like an overnight success story.

Around 2019 or 2020. It was around for a. I don't know when it was founded 2012. It took a long time. Right.

And. But you know what Notion calls Community.

In some cases is just users, which is an issue. But I would look at everything they claim as Community. Just try to copy as much, as.

Much as you can.

Right.

Those are.

Those are the ones I know. You know the one that I need to study for. Sorry, I should have brought a drink. That I need to study more is. And I should do a. I'm gonna write it up on Saster. I just keep forgetting is there is the one.

What's the LinkedIn for physicians that IPO'd and they're huge.

They're worth billions and billions of dollars.

That's all A physician community built on top of Community.

No, no, no, no. Okay, dude, you're dating yourself. It's on my list of five interesting.

Learnings to write up.

But hold on, let's just look what it's called. But they really did it and I'm embarrassed. What's that? No, not viva. What's it called? It's called. It really should Be. I'll read it up. Doximity.

Let's see what Doximity's valuation is today.

Quiet ipo barely burned any money at all. And today there were. Hold on. Well, 6.4 billion.

It's not bad.

I mean, it's not.

I mean, it's not 7 billion, but.

6.44 billion is pretty good. So I need.

Actually, Doximity's on my list to study and track, but that's another one that was very intentional.

They wanted to build the LinkedIn for doctors.

They connected.

People thought it was pretty weird in.

The early days, but they built this.

Closed, regulated community and it's worth $6.44 billion.

Doximity D O X I M I T. Yeah, you learn something from the examples.

They're not. They're never perfect, but you can always learn something from them. Yeah. Thank you.

Hey, Jason, Two questions. Okay. I think the first one's answered. I was going to ask you, what drink do you need? But the second one is, I mean, looking ahead.

Right.

You know, you were talking about differentiation and so on. There's this whole idea of there's a platform shift, generative AI and there's going to be like, category creation. And I'm just going to ask you, what does a category creating MVP look like in 2023?

Is category creating MVP?

Yeah. Like, is it going to be. Does it need to be monetizable or monetized from day one? Does it have to have. Because it's not competitive, so you can't really have a 10x better.

You could. I think the whole term of category creation is a stupid VC ism. Okay. VCs are trying to simplify investing landscape and look for patterns of success. And they're looking for folks that were category creators.

Right.

I don't know too many founders that decided on day zero they wanted to be category creators. They decided, hey, we need a LinkedIn for doctors, or we need custom. We need to build enterprise customer success software like Gainsight or. I don't. I think this is a manufactured term. I think you have to be careful with manufactured terms that you take the right lessons from them. Right.

Like Peter Thiel's, you know, competing is for losers and, and things of that.

Yeah. Well, good for him.

So you think it is one of his creation, like his. And his folk.

Peter Thiel.

Peter.

Peter. Peter Thiel. You know, I mean, competition is. Is part of SaaS, right? Yeah. So I don't think it's. I don't think it's for losers. I do think there are. I do think being number one in your category in most cases in SaaS you get, you do get most of the economic benefits. There's, there's no question. But I just don't think category creations. Let me put it differently. I don't think category creation is a strategy. What great founders do is they see white space that is real, that will become big that others do not see. That's not categorization. They see white space. They see a gap in the marketplace that others, because they're, they're too big, it's not worth their time. Right. Or a market shift is happening that other people don't see. That's what great founders see. They see they have the personal experience, they work there, they know the problem and they see something that to them is actually clearly there. It's fairly obvious and other people don't see it. So I don't know. So that's my one answer. The other thing is I don't think there's any such thing as an MVP in SaaS. Yeah, if you want to be a B2C guy, great. I hate that term too. I the term I use and I should I used to talk about a lot in the early days of Saster. But you want a minimum sellable product, not viable product. MVP is a crappy pre milestone on the way to the only milestone that matters is a product a customer will buy. And if you stop for a V on a way to an S, you may never monetize your product.

Right.

So what will it take to get the question in SaaS? And again we don't Saster, we try to be a little bit early. We don't try to be too early stage. So maybe that's why I'm pushing back a little bit. But if you're you got to get to 10 paying customers in most in SaaS there are examples of folks that build it off the back of free.

And freemium and I've done a little bit of it.

But most the question is how are.

You going to get 10 paying customers?

Right.

Right.

Thank you.

Anybody else got a question or two? We've probably got about 10 more minutes.

Or I don't know when they'll kick us out.

Yes.

Hi Jason, how are you doing?

Thanks for coming.

Very great first sester event in Singapore. So I have a question. So I read one of your article about late stage startup, especially B2B and it seems like VC care more about rule of 40 and magic number rather than just growth in 2023. So can you share. Yeah. Can you share some of the example where a company used to grow at all cost but then they kind of changed the way they operate and they'd be able to optimize their rule of 40 or magic numbers either.

I don't think any of that stuff's true. Yeah, again, I think this is where Twitter does founders a disservice. I don't think VCs care about the rule of 40 per se. I don't think they can. What VCs want today and they did not want in 2021 is they want very strong growth that's capital efficient. They want companies at a minimum burning.

Less than their booking. Not that I know we talked about.

Bookings, but if you're going to go from 40 to 80 this year and add 40, they want you to be burning 20.

Right.

And it's not really so much the rule of rule of 40 like it makes sense, but those metrics are really for public and very mature companies. Right. They're still true. But Rule of 40 kind of implies that mediocre growth is okay if you're profitable. And that's the disservice. It's no VC is interested in mediocre growth that's profitable.

Like we started this early day.

No one's interested in rule of 30. We really VCs want rule of 100.

Okay, that's true.

And, and so again, going back, we started this morning with kind of a venture AMA. It's bad advice, the Internet VCs do not want are not going to invest in slow growing profitable companies for the most part, at least us. There may be local investors that are okay with small outcomes, but it doesn't work. You've got to get from 1 or 2 million to 100 million or more in 7 to 10 years.

And slow growth doesn't get you there.

Rule of 40 doesn't get you to.

100 million in revenue.

Right? And so no one really wants that. It's just everyone wants growth, growth. I don't know. I don't mean to ramble because I do get tired at the end of the day. It's a crappy, crappy, crappy, crappy, crappy crappy time to raise a series A.

B, C, D, E, F or G round. It's a crappy time.

The growth markets are back. Folks are willing to invest now, but they're still mostly frozen because valuations are low and folks want capital efficient companies. It's hard, right? It is hard and it is. And people want folks anyhow. Ask that follow up to the question because I want to make sure I fully answer it. But I think people take false comfort.

That some slow growth and profitability is interesting to investors.

It's not necessarily a bad path. Like if you can get.

And you talked about growth, right?

If you can get to even 10 million in ARR. I really just wrote this up the other day on LinkedIn. It had like 2,000 upvotes.

You get to 10 million in ARR.

Let alone 20 and even be growing.

At 30% a year.

And you don't quit for 10 years. You get pretty big.

You don't get to become GitLab or.

Zoom, but you can get to 100.

Million in revenue growing 30% compounding if you don't quit and you don't burn a lot of money. Right. 30 to 40%. But it's very hard to attract venture capital.

Yeah. And I guess to follow up, let's say a company is going to ipo, right?

Yes.

And they have great growth, but you know, efficiency is not there.

What do you ipo?

I mean, I'm just curious what should we optimize is. It's not even a choice.

Here's the thing.

Let me, let me, let me. There's a lot of stuff we can chat more about it. Let me just tell you basically every the reason that that's not gonna happen. I mean there will be a few that I.P.O. right?

Like that. But they'll be destroyed in the public markets today.

Basically everyone that has raised a large.

Growth round in the last two years.

Their KPI is get to cash flow positive.

Exactly.

They're all everyone. I have multiple investments I've made. I didn't invest in like a ton of crazy unicorns, but I have several. That couple that raised at north of a billion dollars in valuation with double digits millions in revenue. Okay. And hooray, they have a lot of money in the bank. None of them are ever planning to.

Ever raise another dollar of capital.

It's unavailable to them. They will never be able to raise.

In the current market ever again.

And so there's no, there's no efficiency. There's no rule of anything. It's an allowance. If this is like the last allowance.

You get from your parents. Here's the last hundred dollars.

This is all you're getting. It's all you got to make it.

How can I make it last? Mom, dad, how am I? How am I? It's not my problem. Kid, you're 18. This is your last allowance check and.

You'Re going to have to get the cash flow positive on the last check.

That's what's happening. Right.

And.

And it just. There's. There's a. And a.

You can ask one more follow up if you want because I just want to make sure it is an important issue.

But I just think this is.

And folks to IPO like and listen as we chat about in the kickoff.

Session, if multiples get higher, there will be less pressure on efficiency, there'll be.

Less pressure on the market, and the IPOs will change. Folks, that the only folks that are going to IPO for now in the next 12 to 15 months in SaaS are a handful of folks will be.

Forced to IPO and they may have.

And they may barely pull it off.

And have really crappy IPOs or they'll.

Be profitable or very efficient companies. No one else will ipo.

The ones in the middle will slug it out.

Thank you. Yeah.

Anyone else? We could probably do two more questions. I don't mean to keep people over. No, one last question.

Hey, Jason, first of all, thank you for hosting this event.

Thank you for.

This is the last question. Thank you.

Yeah.

And I'm Nikhil from Trimpixel.com My question is there are things that people should do in this environment.

Yes.

But there are things that people would do. And for us as SaaS companies, I think it's more important to figure out what people would do and target that rather than what people should do.

Okay, I'm almost with you.

Right.

What's the question?

Thanks. The question is I would like you to sort of explain, given experience, I would like you to sort of just focus a bit on what people would do in these scenarios, given the habit of human nature, rather than what people should be doing. So that way all, all of us here can sort of focus and cater to that, to our customers and prospective customers. Are you with me till now?

I'm almost. I know, but I'm going to try to be with you. I'm going to reframe the question so that I'm with you.

Thanks.

I'm not very good at articulation thanks to that.

I think what many people are doing. I wrote this up a couple months.

Ago and I should update it not.

That long ago, but I. Too many folks are doing a strategic retreat. Too many folks are saying, woe is me. The world is terrible. I'm gonna batten down the hatches. I'm gonna not grow, but I'm gonna get to cash flow positive. There are times I think most founders. I wrote an old Saster post project update called the Year of Hell.

Almost everyone has a terrible year. Not everyone.

Almost everyone has a terrible year. Usually it's not actually tied to macroeconomics. It's tied to a phase transition. Terrible. Higher in sales and revenue. A market change. My Year of Hell was not during a global meltdown. It was during a rough VP of sales transition. But people have it. And sometimes in a year of hell, you have to make a strategic review. You have to say, listen, I got to survive.

So I got to take a couple quarters to get my act together.

Maybe move on from a few folks.

On the team that are destructive or not doing it.

I got to get my burn rate under control. And that's fine. But you can't change the ultimate goal.

Of building something big and real.

So you just got to be very careful what the strategic retreat is. You have to be very aware of. Going back to our kickoff session, what's my public comp? If my public comp is ZoomInfo or Monday or Doximity or Cloudflare, why am.

I not growing at their rates? Because it's you, not them.

It's you. There's something wrong with you. But if you have a great team, you can fix it. We can build software. We're all building software. We can ship more code. We can't. We never get enough features. It's always too slow. It always takes too long.

It's always frustrating.

If you're a non technical founder, it takes even longer. If you're a technical founder, they don't understand. They just don't understand. They never understand. And they're supposed to sell what I built. But a great team can always. It's never too late for a great.

Team in SaaS, they can always build more software and catch back up to the market. But if you settle, if you settle.

In tougher times, I don't see those founders recovering. That's different than taking a quarter or.

Two to get your house together is not the same as settling.

Settling is saying I can never find a VP of sales. Settling is saying I'll grow at 30% forever. Settling is saying it's, it's, it's the VC's fault. Settling is saying they didn't give me more money. Settling is saying it's the macro environment, right? Settling is saying my, my competitor raised $400 billion. Well, Atlassian raised nothing. Well, Qualtrics raised nothing. Well, Zoho raised nothing. So sure. But maybe, maybe it's what you need.

Is a frigging kick in the ass.

I've needed a kick in the ass from time to time I go through. And maybe we can end with this story if it's helpful. I've invested in about 32 founders. About four don't like me. Now, I'm not cuddly, okay? I'm not kumbaya, but I'm about the.

Most honest and earnest person you're gonna find, okay? I don't.

I'm not trying to screw anybody over. I'm not trying. I'm just trying to help. And of those 32 founders, 30 have gone through a year of hell, okay? And usually I'm the one that has to give the kick in the ass.

I'm the one that has to say.

Look, it's been a quarter, it's been two. Time to.

It's like, stop feeling sorry for yourself and go build some fucking software and.

Go get on a plane and go sell something. And the best founders do it. The best founders listen. Sometimes they get mad at me because no one else is honest. Everyone else is sucking up to them.

Everyone else is scared of them.

A couple founders hate me for it. They wanted to hear it's okay to quit.

They wanted to hear it's okay to settle for mediocre growth.

They wanted to hear that it's someone else's fault. They wanted to hear that it's too hard, that it's not my fault our market segments too competitive, that our ACV.

Is too low, that our churn is too high. Like, it's not my fault our churn is too high.

But the best founders go. Go and fix it. They go and fix it. And I'm not exactly sure how I got completely on this tangent at 6:05pm, but in terms of should and would, if you ever had product market fit and you have a great team, you can get it again. If you ever had a time of good growth and you have a good team, you can get it again. If you ever. You can get it back if you. If you have a mediocre team. Once in a while, mediocre teams get lightning in a bottle and they grow.

Really quickly and then, then they fail.

It does happen. It's more common in B2C than B2B, but it does happen. But usually if you want it badly enough and you have 100 happy customers, you can find another hundred. And if you have 500 happy customers, you can find 500 more. Do you want it do. And in tougher times, do you want it badly enough? And once in a while, I'm the guy that has to kick him in the ass. Tell them you gotta want it. And what I usually tell them is what my investors didn't tell me. I tell them, hey, you're at 22 million in revenue or 6 million. You're at 6 million revenue, growing 70%. You're at 22 million in revenue and you have a thousand happy customers. You want to quit? You're just getting there. It's supposed to be a little bit hard. It's not as easy as 15 months ago. So what?

Cry me a river.

Go out and, you know, find another happy customer just like the one you have. Go out, find another one just like your biggest customer. And that's the I may be screwing up your should versus would question.

But.

But if you've ever had a good run, go find it again.

Go find your groove again. If you have a great team, it's just some bits. It's just some bits and bytes and. And you know how to sell it and you know how to make customers happy and. And get your mojo back and go do it. That. That's my sugar wood.

So anyhow, thanks everybody for coming. This was really great.

We really appreciate it.

Maybe we'll see you in London or the Bay Area this year or we will. We'll. We'll be back for APAC next year. So thanks for being at the first one.

We really appreciate it.

Thank you. It.