Oct 10, 2023 · 44m · saastr
Secrets to Scaling and Growth in an Unpredictable Market with monday.com's Co-founder and Co-CEO
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In this SaaStr Annual session, Jason Lemkin interviews monday.com co-founder and co-CEO Eran Zinman on the operational frameworks and strategic decisions that scaled the company from $7 million to nearly $1 billion in ARR. Zinman details how proprietary data attribution, rapid cash recycling, horizontal product-led growth, and disciplined enterprise expansion built a resilient, highly cash-generative software business.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Jason holds 37.4% of the talking time here. How this is scored →
Jason as informed peer 4.5 Guest teaching 3.8 Guest disagreement 1.2 Jason pushing back 1.3
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 23:57 Rejecting conventional SaaS valuation metrics
Zinman rejects traditional SaaS metrics like ARR, CAC, and LTV, bluntly labeling them misleading and bogus because they ignore actual bank cash flow timing.
Hardest push from Jason ▶ 43:53 Pushing back on negative Super Bowl ROI assessmentLemkin refuses Zinman's framing that the Super Bowl ad was wasteful, arguing that multi-touch deal influence and ubiquitous brand recall helped enterprise sales.
Biggest teaching moment ▶ 24:35 Masterclass on high-velocity marketing cash recyclingZinman educates the audience on how monday deployed $25M in ad spend from a $5M balance by strictly measuring cash exit and re-entry to recycle cohort returns every 30 days.
Jason holds their own ▶ 26:26 Historical analysis of SaaS margins from Salesforce to BoxLemkin contextualizes monday's free cash flow pivot by detailing SaaS margin history, citing Aaron Levie's Box IPO and explaining how software unit economics prove efficient scale is possible.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Scaling monday.com from Seven Million to Nearly One Billion ARR | 4 | 1 | 1 | 1 | Lemkin opens the session praising monday.com's hypergrowth from $7M ARR at their first SaaStr to over $700M, noting key metrics like NRR. Zinman shares a warm founding memory from 2017, and the dynamic is entirely celebratory and collaborative. | |
| Platform Strategy and Gradual Discovery for SMB Workflows | 4 | 4 | 1 | 1 | Lemkin inquires how monday communicates its deep platform functionality to SMBs without overwhelming them. Zinman explains their product strategy of 'gradual discovery'—hooking users on a single use case like project management before exposing the underlying platform. | |
| Early Capital Efficiency and the Creation of BigBrain | 4 | 3 | 1 | 1 | Lemkin brings up monday's early capital discipline and targeted eight-month CAC. Zinman elaborates on building their proprietary BI platform BigBrain with just seven employees in 2014 to track every dollar of marketing spend. | |
| Product-Led Growth and Engineering Autonomous Conversion | 5 | 4 | 1 | 1 | Lemkin probes for the early 10x product differentiator, and Zinman explains that because both co-founders were engineers who hated outbound sales, they were forced to build self-service PLG conversion loops with automated workflows. | |
| Expanding into Non-Tech Verticals for Business Resilience | 4 | 3 | 1 | 1 | Lemkin highlights that 70% of monday's customer base is non-tech (construction, real estate, churches) and asks how that occurred. Zinman explains it began organically through Facebook ad campaigns and became an intentional driver of macro resilience. | |
| Performance Marketing and Multi-Vertical Ad Efficiency | 5 | 5 | 1 | 1 | Zinman details how monday aggressively expanded performance marketing when peers retreated during the downturn, capitalizing on lower ad bids across multiple non-tech verticals. Lemkin validates the approach while exploring team verticalization. | |
| Cash Flow Generation and the Power of Capital Recycling | 5 | 6 | 2 | 1 | Zinman delivers a masterclass on cash velocity, dismissing standard SaaS accounting metrics like LTV and CAC as disconnected from bank balance reality. He details turning $5M cash into $25M in marketing spend via rapid 30-day cohort payback cycles. | |
| Optimizing Net Retention Rate and Expanding Upmarket | 5 | 5 | 1 | 1 | Lemkin and Zinman explore expanding upmarket, with Zinman candidly admitting his initial bias against sales teams was wrong because enterprise buyers require human consultation and security governance. | |
| Operational Discipline, Sales Quotas, and Sustainable Re-acceleration | 5 | 4 | 1 | 2 | Lemkin presses on whether holding headcount flat risked over-optimizing efficiency at the cost of future capacity. Zinman outlines how raising sales rep quotas and eliminating support bloat allowed them to plan 500 new hires while preserving FCF margins. | |
| Super Bowl Brand Experiments Versus YouTube Ad Attribution | 4 | 3 | 2 | 3 | Lemkin questions Zinman's skepticism of their $8M Super Bowl commercial, pointing out that multi-touch attribution and deal influence mean it likely contributed meaningful pipeline. Zinman explains the difficulty in measuring one-off brand lift compared to granular YouTube ad tracking. |
Statements from this episode (22)
Zinman: monday.com was at $7M ARR in 2017
“So there was like five million dollars of ARR, 1,000,010 million, and I remember I think we had seven back then. Seven. Yeah, it was six years ago, we had seven million,”
Lemkin: SaaS companies must go multi-product to reach $1B ARR
“You gotta, I think you gotta, I think the, I think it gets less pithy, because it's like, you gotta go multi-product.”
Zinman: GTM messaging must target specific search intent over abstract platforms
“Nobody went on Google and searched for a flexible software to manage my business, right? Like, nobody does that. People search for project management, they search for CRM, so we had to change from, like, there's the company vision on one hand, but there's the …”
Zinman: Sell SMBs specific tools first, gradually revealing platform depth
“You don't need to tell the whole story from the beginning especially when you sell to SMBs. I think that we focused on giving them value as soon as possible. So if you were searching for a project management or CRM, we wanted to serve them a CRM or a project m…”
Zinman: monday.com raised a $1.4M seed round at a $2M pre-money valuation
“Our first round, just so you all know, ah, we raised 1.4 million, ah, in two million pre.”
Zinman: monday.com's biggest product leaps came from unexpected features, not customer requests
“I think every time we made a leap in terms of product features, it wasn't because of feedback we got from customers. I always like to talk with customers, but actually the major leaps was things they didn't expect. So for example automations was a huge driver …”
Zinman: Great early salespeople can mask poor product-market fit
“Thinking in retrospect, let's say we had, like, an amazing salesperson in the company. Even though we had, in the beginning, like, a shitty product, that person might be able to sell. And then you get a wrong signal. You get a wrong signal. And because we didn…”
Zinman: 70% of monday.com's Customers Have Always Been Non-Tech
“From day one, 70% of our customers were non-tech, and non-tech, I mean, you can see here, like real estate, banking, construction, even churches were using us back in the days and now.”
Zinman: monday.com Saw Lowest Ad Bids in History During Tech Downturn
“Because right now, ah, we, not only we kept doing it, but we actually scaled it, ah, and right now we have, like, the lowest bids, ah, that we ever saw, as a company, because everybody pulled back, A lot of companies reduce spend, and we're more aggressive tha…”
Zinman: Multi-Vertical Marketing Prevents Ad Inventory Exhaustion
“One thing that helped us reduce the marketing span was, let's say you focus just on one vertical. Let's say project management. At some point you exhaust the inventory. And then the incremental dollar you put is not as efficient as the first one. So, the fact …”
Zinman: monday.com holds more cash than total venture and IPO capital raised
“We had more cash in the bank than we ever raised from VCs and the public market.”
Zinman: Standard SaaS metrics like LTV, CAC, and ARR ignore actual cash
“All the metrics that you're using you know, LTV to CAC CAC return rate, all of them don't take cash into account, okay? It's not cash. It's not cash. ARR is not cash. CAC is not cash. LTV, well, I don't know what it is, but yeah. It's a bogus metric, but, ah, …”
Zinman: How monday.com spent $25M on marketing with $5M in cash
“When we had five million in a bank, we spent twenty-five million In performance marketing. Now, how do you do that? Because we recycle the money super quickly. We would spend, let's say, 300 K on performance marketing, and then after one month, we saw 50% back…”
Zinman: monday.com drove free cash flow inflection primarily by slowing hiring
“The only thing that happened here, during those four quarters, was that we slowed down hiring. That's the only thing.”
Zinman: Founders should optimize for free cash flow rather than P&L profitability
“P&L, profitable, is not a way to optimize your company, ah, and free cash flow is much better because this is something that you can do things with it”
monday.com Considers Adding Consumption-Based Billing to Its Seat Model
“One thing we think about is maybe we should have, like, a mixed model, you know, both seats and consumption to an extent, so that's another thing that we're thinking about”
Zinman: monday.com Overall Gross Retention Sits in the Mid-Eighties
“We have gross retention around mid-eighties, something like that on all customers, but obviously it's much greater on enterprise.”
Zinman: For enterprise buyers, a human sales rep is the product
“What I found is that the most amazing product for enterprise companies is to have a person talking with them. You know, it's like they wanna talk with somebody. They have security issues, they have governance, they need help. And this is just a better product.”
Zinman: 85% to 90% of monday.com's Revenue Comes from Existing Customers
“90%, 85, 90% of the revenue is from existing customers. That customer that... That's customers that have been with the company for more than a year.”
Zinman: At Scale, a SaaS Company's Growth Rate Becomes Its NRR
“As you scale, even though you do performance marketing, you do the Super Bowl, you do whatever you want, that increment is going to be insignificant compared to the subscription revenue you already have. So, let's say you want to grow 30%, 40%. How do you do i…”
Zinman: Customers Over $50k ARR Now Drive Nearly 30% of monday.com Revenue
“We have the 50 K segment. So that was almost nothing like three or four years ago. Now it's almost 30%.”
Zinman: Super Bowl ad traffic uplift wasn't worth the cost
“With Superbowl, it was more tricky, because it's like one day, one event, one commercial. Ah, the uplift wasn't worth it. Ah, I'll tell you what did happen. Ah, something that, in almost every sales call, ah, one of the customers mentioned that they saw us dur…”