B2B SaaS

“One of the themes that has run through the podcast is how the lab and experimentation and the real world have probably the biggest impact and have the most relevance to whether something is AI for science or something like B to B SAS.”

“Not only do you have to deliver a beautiful app, it has to surprise and delight you at least once a quarter where your jaw drops that it does something you didn't even expect because of AI. Your jaw should drop because of the agentic capabilities of a B to B p…”

“B to C SaaS with that high of churn doesn't sell for the same multiples that B to B does, but that doesn't mean that every thousand of MRR that you add to this product isn't worth a lot of money.”

“The minimum annual contract value for making cold outreach work, making the economics of that work, is about 10,000 dollars US.”

“Because of all the 20 B to B SaaS marketing approaches, if you have a price point of 50 dollars a month, I think you can do four or maybe five of the B to B SaaS marketing approaches. If you have a price point of 500 a month, you can do between five and 10 of …”

“And biggest problem with some of the software stuff is the replacement offers. I'll come in, I'll replace your existing kind of like, you know, internal systems. That's a really big ask. It's a really big one-way door, too. It's like, well, if I try you, if yo…”

“B to B SaaS founders, maybe 10, 20% should consider it. I do not think it's the majority”

“Between that, sort of, two and twenty million ARR range, it's an extremely opaque market, and so what that translates into is, like, You can very easily end up in a situation where you as a founder get bad advice, so you end up selling your business for like a…”

“A lot of people have a view of, I like to joke, like a private equity is like, you know, like a Bruce Springsteen Movie or a song where it's like, you know, they're always bad and always pay poorly, but that really is a misunderstanding of really the biggest b…”

“B to B SaaS is not going to go away, but for those folks building that software, they need to be very aware that it's going to be a way easier for people to build something to do what they're doing, and they have to figure out some way to make your software un…”

“There's Two different types of businesses. When you're starting out, there's the ego business, and then there's the business you're actually meant to build. The ego business is what people will congratulate you for because it is a real business, quote unquote,…”

“Golf putting has become this great Trojan horse for us not to give away the strategy, but if you want to talk to a CEO of a major corporation or a CFO or talk to any kind of leadership, don't go to them saying, I have a great B to B SaaS solution for you. Say,…”

“I think the value of B to B SaaS is about to become astronomical. And if you can figure out how to align your product to that ROI, it's not a hostage. It's, you're just completely aligned with your customer.”

“I think for, even for B to B grounded in what we do, I think we're going to normalize around a million dollars to two million dollars per employee.”

“Horizontal B to B SaaS is very hard. And at a certain point, a lot of competitors are in your space, and It becomes hard to grow. And so vertical and orthogonal SaaS, we've seen stronger exits, we've seen folks able to get further and have lower churn and all …”

“And the less entertaining your product is, the better, the more interesting video is. And the reason why I say that is because video is made to be entertaining and entertaining categories like food, travel, beauty are the most crowded and the least entertainin…”

“I think if you have, especially a B to B feature where you may have some lock in reverse trials can be super powerful. You just want to get people in there. You don't need to ask for their credit card because they're using your CRM or they're investing quite a…”

“The market is going to increase. For one reason, now you can see it's not G-Twenty K, it will be G-Fifty K companies who can able to do hundred million dollars of revenue because the build is actually becoming shorter and the technology is becoming more widely…”

“If it's a complex B to B app or B to B SaaS. You're gonna need a sales team. So you probably don't want to do that. And when I'm talking about that, I'm talking about like a healthcare company, you know defense company, education you know, selling into the for…”

“A lot of startups and a lot of companies within technology are looking for vitamins. Yeah, if you, like, operate within a TAM and a buyer base that is always looking to improve and is, like, searching for solutions to problems they have, you're gonna do well b…”

“It didn't used to be the case that B to B SaaS companies were the ones that had hyper growth. Like, there were some, like, consumer social companies that got hyper growth, but, like, B to B SaaS used to be this, like, you know, flotting, slow growing, like, ki…”

“And those are the kinds of software companies that we like to invest in. You're never going to know their name outside of the announcement that we've invested. They're just going to go ahead and keep doing their thing year in and year out as employees churn, a…”

“That's gonna happen.”

“And when we're in ChatGPT 24 hours a day, we're not going to like pull up a CRM. We're not going to use the interfaces. Like these interfaces are all Already dying. You can see it, Sam. And then the amount of time you spend in GPT, like then go to like a B to …”

“If you want to target like big companies, you need to go through compliance. You need to have like a couple of badges and everybody will ask you, can you show me like five case studies, seven use cases and yada, yada that you don't have at the moment. So we ha…”

“First, like in your beta, it might be free and these are not customers. These are users, right? And there will be huge discrepancy between people who are using it and saying it is awesome. This is why I wanted to differentiate this concept from just like early…”

“If you take out the workflow, if you take out the competitive alternative, you're left with a very broad, make your life better, make your business more successful type of message.”

“When you're young, you want to take a lot of swings and a lot of risks and a lot of like, you want to have a lot of at bats, a lot of tries. So I do think that building consumer mobile apps is like the best thing to be doing. If you're a young person”

“Founders Fund doesn't do B to B intentionally. They make exceptions, but they don't believe in B to B. They don't believe the outcomes justify it. It's explicitly, they don't do it.”

“Very few companies in B to have the same level of untrammeled, competitive free space that something like SpaceX does. That's the negative on B to B, but the positive on B to B is there's been two to 300 SaaS winners”

“The average public B to B stock was growing 70% in 2021. Public. I'm not talking about Cursor, or I'm talking about moldy oldies. The moldy oldies of SaaS were growing 70% in twenty-twenty-one.”

“We'll never see that again.”

“If you're selling B to B SAS in, you know, kind of the normal, let's say quote unquote normal price points, you know, your ACVs or anything between A 1020 thousand, just to put a number on it. If your demo to close is about 40%, then it's pretty clear that the…”

“This is gonna be trite, but if you're building a, if you have a consumer company that's kind of meh, if you pivoted into the B to B version of it, there's probably something interesting there.”

“Basically, we are a ten million dollar fund that is investing in B to B SaaS products that are in the future of workspace, and we are excited to build about 15 companies in the next five years, and so just lots of different things going on.”

“Also, when you have a champion who cares about your product and helps it be implemented, that is Is critical when you go to do renewals. If that champion is not there any longer, then you're likely to have churn. So that I think is more important, at least in …”

“Greg Treverton uses this phrase of puzzles versus mysteries, which is just like puzzles are this thing that you can like, you know, use that raw horsepower to solve. And mysteries are, you know, there you have to go on the journey. There's like fog of war and …”

“I would say 40 to 50% have to sell some form of service before they can sell a technology.”

“Trying to encourage word of mouth marketing is something I have never seen B to B SaaS do well. I've never seen a silver bullet is more of what I should say. There are ways to encourage it, and I'm going to run through a few of those here, but there's no way t…”

“I know people who have refer a friend or affiliate programs and refer a friend, you get a month free, they get a month free. That's fine. That works well with B to C. I find that it works perhaps less well with B to B. I'm not saying you shouldn't do it, but a…”

“If you are looking for an aqua hire, salespeople are in high demand. If you have guys that can sell and girls that can sell, this company will get bought. I don't care what you're selling, but start collecting salespeople and build a sales team. You'll either …”

“The events one, when it works, it really works. And it works usually in tight verticals and you need a high annual contract, high enough annual contract value to make it work.”

“When we see a business that has B to C subscriptions and B to B, we place all the value on B to B. And the reason is because historically the churn rates and B to C are too high.”

“For us, the, I think if you can't have a customer paying you repeatedly a 100,000 dollars annually. It's very hard to build a ten million dollar annual recurring, like, ten million dollar revenue company, right?”

“Puts us just over a 170 companies that we will have invested in all B to B SaaS. And it puts my total to a low 190. So almost, almost 200 companies overall.”

“The way it works is net profit up to about a million and a half ARR. And above that, if you're dealing with the right buyers, so it'd be strategics or The big, bigger private equity who are not value buyers, they're gonna look at you at a revenue multiple base…”

“Subscription fatigue will continue to be a thing in B to C, but it will not be a big deal with B to B.”

“This is why I basically skewed towards B to B SaaS is because a good B to B SaaS business will have net expansion. Instead of 50% churn, you'll do a 120% expansion. And so you're actually building a subscriber base with long-term value.”

“You're like struggling so hard to get people to pay like five dollars a month for an app. Meanwhile, businesses could be like, 40 dollars a month easily for like a SaaS thing or whatnot. Which also makes it really hard to get past that first, like a hundred MR…”

“When you're doing a B to B SaaS like that, and we're trying to compete with Slack, so it's something that you need millions upon millions upon millions of dollars before you get to profit. You know, probably ten million dollars invested before you get profit o…”

“Unless there is a network effect where getting free users actually increases the value of your business. In almost every case I see of an early stage or a new entrepreneur trying this, it's a mistake.”

“You have proven so very little until someone gives you money, specifically with B to B SaaS. You've proven almost nothing until someone gives you their credit card.”

“So I feel that next 20 years, The whole rest of the world, which is not in the developed countries will be digitized by India. The developed countries were digitized by America. Granted the next wave is ours because we are the only talent pool.”

“At one point I was spending about 30,000 dollars a month of my own money to keep the team going, which when you look at it and you have no end in sight for the cost of development and being able to get people To become customers and pay, like it's, it was real…”

“If you are in one of the top two quadrants, Hi Nye, and hi everyone, and you solve a really important problem, workflow problem , you can probably turn into a billion dollar company.”

“Of all the companies we funded at TinySeed, 131 companies, it was less than five percent that had an audience when they launched or even as they grew.”

“In B to B, you got to sell, man. No one needs another SAS product. We already have 11 payroll companies and 88 CRMs and 96 mark. We don't need one. So if you can't force your way into a market and Selling stock is sales.”

“I have never in SAS in B to B with, The high margins we have, with the recurring revenue we have, with the upsell opportunities that we generally have. I have never seen a great VP of any role, sales, marketing, customer sales, eng or product, not be a creativ…”

“Almost half of the conversations I had were kind of about that.”

“Games especially are so inherently like hype cycle driven. Like even you look at the biggest, some of the biggest game makers in the world kind of wildly fluctuate on their ability to even stay in business because it's just so hit based and it's very difficult…”