Hello, happy Saturday, and welcome to my weekend musings.
We had an incredibly busy week last week that started in LA on Monday and San Francisco Tuesday through Friday. We’re back in Austin for the weekend then out to NYC on Monday, yes – there’s never a dull moment! We were in San Francisco for meetings and to attend the SaaStr Annual Conference which was incredibly interesting and valuable. Imagine thousands of SaaS founders and investors converging in San Francisco sharing ideas, strategies, and discussing the current state of SaaS and the SaaS funding market.
One of the most interesting talks I went to was by Tomasz Tunguz, a VC at Redpoint. In his talk he shared a lot of interesting stats about the state of SaaS funding and the changes that have taken place over the last few years. One of the most interesting facts that Tomasz shared is the changes in MRR for SaaS startups at Series A and how much the average has gone up over the last three years.
While average MRR has gone up, one of the most incredible data points is the fact that nearly a third of all SaaS startups have $0 MRR when they raise their Series A. This begs the question, “are high MRR companies that raise a Series A biasing the results higher. I would be interested to see what the Median Series A MRR is as I think this would likely tell a little different story. Still, great data and an incredibly interesting talk.
The conference was absolutely packed and there was no shortage of network opportunities both during the day and in the evenings. I’m putting together a larger post on Medium.com about some of my key takeaways from the conference but here are a few reflections:
These are still the early days of SaaS – one great stat I learned was that only 2% of software is in the cloud!
There’s no better way to learn than from other founders – there are plenty of people who teach how to do something, but those who have actually done it do it best. One of my favorite talks was by Dharmesh Shah, the co-founder of Hubspot. He shared some great insights into their early days, how they thought about things, and how that thinking changed over time.
Valuations have been too high and are expected to come down – however I don’t think this translates into good companies not getting funded, but those with insanely high valuations will likely have to do downrounds this year.
UberX is perpetually on surge in San Francisco – honestly, this blew my mind. For four days straight UberX was on surge, luckily I was able to take Lyft which wasn’t on permanent surge-mode. I guess Uber realized people in SF will use UberX, surge or no surge. I learned quickly that cabs were cheaper than UberX in San Francisco, which was disappointing since I usually prefer Uber.
The SDR and AE role are critical to scaling a SaaS sales organization – we hired our first AE in September of last year and our SDR in January of this year so it’s still early for us, but it’s great to see so many other companies following this advice, that I’m sure many of us learned from the SaaStr blog or Predictable Revenue book.
There are more sales and marketing tools for SaaS companies than you would imagine – I think it’s safe to say that 80%-90% of the exhibitors at SaaStr were SaaS companies that provided sales and/or marketing services. It’s definitely a competitive space, which is a plus for SaaS founders as it means there really are more tools to automate and streamline your business than ever before.
Last but not least, only at a SaaS conference would you see “ARR” and “LTV” projected on the wall during a party
Make sure to check on Medium next week for my article that take a deeper dive into SaaStr 2016 and the state of SaaS startups in 2016. As usual, there’s more to come. Happy Saturday!