The Exchanges

Q price as a deciding factor, and applying that to, kind of, start-up sales processes. Uh, one element of, of, kind of, start-ups and SaaS journeys is, obviously, fundamentals attaining customers. And you said before that only two price points work with a SaaS start-up. Or in many cases, if we don't apply the absolute terms, only two price points work with a SaaS startup. What do you mean by this?

A Yeah, well, I appreciate you calling out the not always, because it is, there are some exceptions. But generally speaking, the reason I make that rule about there are really only two price points that work in SaaS startups is that there are a whole lot of things that come out of the price point that you go to market with in a SaaS company. That includes the function and structure of your sales force, the company, that's the type of people you hire. The compensation structure that you put on place of those executives, how much they're allowed to spend, how much they're for their T and E, how much they're allowed to travel. And then it has massive product implications for what your customers expect. So take example at the price points that I say makes sense or 10 K a year or a hundred K a year. Um, so you can think of it as roughly a thousand dollars a month or roughly 10,000 dollars a month. Most companies price these things on an annual basis. So thinking 10 K or a hundred K makes more sense at 10,000 dollars a year. You have a high velocity selling model. You have typically inside sales. Your lead generation is done almost entirely online. You need to have a product that lends itself to that, that has largely self-serve because your customer service costs can't be that high. You need to not have a lot of, um, really deep enterprise features that are difficult for, that are exp…

AI assessment note: “the price points that I say makes sense or 10 K a year or a hundred K a year”

Q price as a deciding factor, and applying that to, kind of, start-up sales processes. Uh, one element of, of, kind of, start-ups and SaaS journeys is, obviously, fundamentals attaining customers. And you said before that only two price points work with a SaaS start-up. Or in many cases, if we don't apply the absolute terms, only two price points work with a SaaS startup. What do you mean by this?

A Yeah, well, I appreciate you calling out the not always, because it is, there are some exceptions. But generally speaking, the reason I make that rule about there are really only two price points that work in SaaS startups is that there are a whole lot of things that come out of the price point that you go to market with in a SaaS company. That includes the function and structure of your sales force, the company, that's the type of people you hire. The compensation structure that you put on place of those executives, how much they're allowed to spend, how much they're for their T and E, how much they're allowed to travel. And then it has massive product implications for what your customers expect. So take example at the price points that I say makes sense or 10 K a year or a hundred K a year. Um, so you can think of it as roughly a thousand dollars a month or roughly 10,000 dollars a month. Most companies price these things on an annual basis. So thinking 10 K or a hundred K makes more sense at 10,000 dollars a year. You have a high velocity selling model. You have typically inside sales. Your lead generation is done almost entirely online. You need to have a product that lends itself to that, that has largely self-serve because your customer service costs can't be that high. You need to not have a lot of, um, really deep enterprise features that are difficult for, that are exp…

AI assessment note: “the price points that I say makes sense or 10 K a year or a hundred K”

Q Can I ask, were there any really big takeaways, particularly from working in such a scaled and hyper-growth organization like Walmart, That you now apply to a role with a very differently structured Shasta?

A Yeah, I think there were quite a few, but a couple that popped to mind are one, as I mentioned earlier, consumer was really in the early innings, and we had just, I'd seen the power of what could be done, how consumers could get products and services delivered, but at the time, broadband wasn't ubiquitous, internet connectivity wasn't ubiquitous, and certainly smartphones didn't even exist, so I knew we were in the early innings, so that was one key takeaway. The second was the power of SaaS, and that was really Really, really important. I was one of the early adopters of core metrics, which was an early, what at the time called ASP application service provider was the previous term for SAS. And we put our analytics on core metrics and a bunch of people inside Walmart.com said, wow, you're crazy. You're going to put our analytics outside the firewall. And I said, you don't get it. Like, do you understand how the internet works and how in the world are we ever going to be able to build something as powerful as a company that's purely focused on doing only that? And it really, and we did, we We put our analytics on core metrics. We became one of their first customers. It was an unbelievably powerful solution, far better analytics than we could have ever done internally, and it really gave me a purview into the fact that over the next, certainly, 20 years and beyond, I thought tha…

AI assessment note: “a couple that popped to mind are one... The second was the power of SaaS”

Q Speaking of the power of SaaS, I do want to start today by discussing the enterprise IPOs that we've seen recently. There's been a plethora from Yex to Alterix to Milsoft to Okta. So I want to hear, what's the catalyst for the rise of these? Is it a Snapchat effect of the opening up of public markets? What is the, the reason behind this?

A I think there were two questions in there. One related to the overall IPO marketing opening, and then separately related to the enterprise IPOs. And I think just if we look at the overall IPO market, I think There's just a natural cycle that comes and goes, and it has for many, many years, and we're in a window where the IPO cycle has opened after a period where investors, institutional investors who purchase IPOs were a little bit less interested in buying them, and it just kind of ebbs and flows, but we're now at a point where they, institutional investors, are quite interested in growth stocks and growth stories, partially as a result of the natural cycle, but more importantly, and I think this is the part that impacts the enterprise side really heavily, is there was a lot of M&A last year, a lot of very large cap Previously, public companies that had gone public in the past were acquired. Demandware, as an example, LinkedIn, as an example. And when those companies are acquired, oftentimes what that means is it takes those securities out of the portfolios of the institutional investors. So just an enormous amount of companies that were the growth vehicles for institutional investors were taken out, particularly on the enterprise side, and that left a gap. And what we've heard very consistently in talking to institutional investors is they want that growth component back in t…

AI assessment note: “there was a lot of M&A last year... Demandware, as an example, LinkedIn”

Q Speaking of the power of SaaS, I do want to start today by discussing the enterprise IPOs that we've seen recently. There's been a plethora from Yex to Alterix to Milsoft to Okta. So I want to hear, what's the catalyst for the rise of these? Is it a Snapchat effect of the opening up of public markets? What is the, the reason behind this?

A I think there were two questions in there. One related to the overall IPO marketing opening, and then separately related to the enterprise IPOs. And I think just if we look at the overall IPO market, I think There's just a natural cycle that comes and goes, and it has for many, many years, and we're in a window where the IPO cycle has opened after a period where investors, institutional investors who purchase IPOs were a little bit less interested in buying them, and it just kind of ebbs and flows, but we're now at a point where they, institutional investors, are quite interested in growth stocks and growth stories, partially as a result of the natural cycle, but more importantly, and I think this is the part that impacts the enterprise side really heavily, is there was a lot of M&A last year, a lot of very large cap Previously, public companies that had gone public in the past were acquired. Demandware, as an example, LinkedIn, as an example. And when those companies are acquired, oftentimes what that means is it takes those securities out of the portfolios of the institutional investors. So just an enormous amount of companies that were the growth vehicles for institutional investors were taken out, particularly on the enterprise side, and that left a gap. And what we've heard very consistently in talking to institutional investors is they want that growth component back in t…

AI assessment note: “they want that growth component back in their portfolio”

Q I mean, I'm intrigued on two elements, kind of, A, with the plethora, do you think there's enough sufficient demand for this to continue? And then, does it also concern you the likes of Yext IPO-ing with really quite low growth rates?

A So, I certainly think there's an opportunity for it to continue, For a while. How long that is, I don't know. I certainly think there's certainly demand, and we hear from the bankers and from institutional investors that there's tremendous pent-up demand right now, so I see no reason that the market's not going to stay open for quite a while and that the demand is going to be there. With regard to lower growth IPOs, I'm actually quite pleased that some companies with lower growth rates are getting out because growth matters a lot, so, and historically, the markets have rewarded companies that are growing at a faster rate, sometimes irrationally, with Really crazy multiples. But there are really good companies that grow at twenty-ish percent a year, and the fact that they are able to get public actually doesn't alarm me. I actually view it as a really healthy sign that good companies that are growing at reasonable rates, but not some spectacular rates, have a liquidity opportunity in the IPO market.

AI assessment note: “With regard to lower growth IPOs, I'm actually quite pleased”

Q I mean, I'm intrigued on two elements, kind of, A, with the plethora, do you think there's enough sufficient demand for this to continue? And then, does it also concern you the likes of Yext IPO-ing with really quite low growth rates?

A So, I certainly think there's an opportunity for it to continue, For a while. How long that is, I don't know. I certainly think there's certainly demand, and we hear from the bankers and from institutional investors that there's tremendous pent-up demand right now, so I see no reason that the market's not going to stay open for quite a while and that the demand is going to be there. With regard to lower growth IPOs, I'm actually quite pleased that some companies with lower growth rates are getting out because growth matters a lot, so, and historically, the markets have rewarded companies that are growing at a faster rate, sometimes irrationally, with Really crazy multiples. But there are really good companies that grow at twenty-ish percent a year, and the fact that they are able to get public actually doesn't alarm me. I actually view it as a really healthy sign that good companies that are growing at reasonable rates, but not some spectacular rates, have a liquidity opportunity in the IPO market.

AI assessment note: “With regard to lower growth IPOs, I'm actually quite pleased”

Q Can I ask, were there any really big takeaways, particularly from working in such a scaled and hyper-growth organization like Walmart, That you now apply to a role with a very differently structured Shasta?

A Yeah, I think there were quite a few, but a couple that popped to mind are one, as I mentioned earlier, consumer was really in the early innings, and we had just, I'd seen the power of what could be done, how consumers could get products and services delivered, but at the time, broadband wasn't ubiquitous, internet connectivity wasn't ubiquitous, and certainly smartphones didn't even exist, so I knew we were in the early innings, so that was one key takeaway. The second was the power of SaaS, and that was really Really, really important. I was one of the early adopters of core metrics, which was an early, what at the time called ASP application service provider was the previous term for SAS. And we put our analytics on core metrics and a bunch of people inside Walmart.com said, wow, you're crazy. You're going to put our analytics outside the firewall. And I said, you don't get it. Like, do you understand how the internet works and how in the world are we ever going to be able to build something as powerful as a company that's purely focused on doing only that? And it really, and we did, we We put our analytics on core metrics. We became one of their first customers. It was an unbelievably powerful solution, far better analytics than we could have ever done internally, and it really gave me a purview into the fact that over the next, certainly, 20 years and beyond, I thought tha…

AI assessment note: “a couple that popped to mind are one, as I mentioned earlier, consumer was really”