Opinion
Kellogg: The SaaS IPO Bar Has Risen to $500M ARR
“The IPO bar is just spectacularly high right now. I think it's around five hundred million in ARR by my math.”
Insight
Kellogg: PE Firms Want SaaS Companies Fixed Before Acquiring Them
“The biggest thing I've learned about working with PE is I thought they were fixer upper people... And I don't actually think many of them like to do that. They want it fixed first.”
Insight
Kellogg: Private Equity Can Turn Most Stagnant SaaS Companies to 20%+ EBITDA
“A lot of times founders think it's not possible and give that company to a PE person. And I guarantee you they're going to have 20% EBITDA, maybe 30% EBITDA in a couple of years. It can be done.”
Insight
Kellogg: Executive infighting is a direct reflection of a weak CEO
“Another friend of mine has this expression from Machiavelli that warring princes means one thing, a weak king. And if you're CEO of the company, you cannot allow warring princes in your company. Everybody sees it. The whole company knows if two E staffers are …”
Assertion Not checkable as stated
Benioff dismissed early Zendesk threats to Salesforce to avoid fear-based leadership
“I did a year at Salesforce in the middle of all that, and I was mentioning Zendesk. I was like, hey, there's these guys called Zendesk, and they might be a problem for, like, our customer service business and I got the kind of uh-oh moment where, like, oh, and…”
Insight
Kellogg: Companies must be vision-driven publicly, customer-driven culturally, competitor-driven strategically
“Avoid this fake either or framing, which is you need to speak like you're vision driven. So when you're talking to customers and analysts, the markets, talk about the desired end state. Talk about the vision. Don't talk about competition. When you're building …”
Insight
Kellogg: 80% quarterly rep quota attainment in enterprise SaaS is nearly impossible
“First, you did not have on a quarterly basis in an enterprise company, 80% of your reps every quarter. You might have had 80% every year. You might, right? 80% at a hundred percent of quota on an annual basis is very good. On a quarterly basis, it's almost imp…”
Insight
Kellogg: Startups Scaling Past $10M ARR Should Redeploy Early Leaders
“I've worked with many startups where the figure it out sales VP had to leave when we hit ten million. And I always feel bad about that, because I don't actually think they have to leave. I think they should be redeployed. Like, my answer is, what do you do wit…”
Opinion
Kellogg: Enterprise SaaS startups should wait until $100M+ ARR for second product
“In terms of second product, I talked about Jason Lemkin's work before, but he's done a series of tweets and blogs, and from his research to me, for most companies, it's probably a hundred million plus in ARR, and maybe multiple, for the companies I work with, …”
Insight
Kellogg: SaaS Startups Should Charge Above Market for Services to Enable Partners
“Create your own agency or your own services org. Charge for it. Charge market rates. Maybe even a little more than market rates. Actually, not maybe. Charge more than market rates, and then build a partner network.”
Opinion
Kellogg: Most marketers lack rigorous thinking and confuse executives with jargon
“You're confused by ill-defined terminology and process, most marketers are not that rigorous in their thinking and you're drawn into conflict between sales and marketing, right?”
Insight
Kellogg: CMOs should quarterback overall pipeline coverage across all sources
“Now to me, the best practice here is that marketing should be the quarterback of the pipeline, because if you think about those four funnels, the only person they all report to is the CEO. So either you're going to be the quarterback of the pipeline, or you're…”
Insight
Kellogg: ARR is a fact while churn rates are an opinion
“There's a semi-famous quote that but cash is a fact, profit is an opinion. I feel the same way about ARR and churn, that ARR is a fact churn, And churn rates are an opinion.”
Assertion Contradicted
Kellogg: Net Dollar Retention Shows Almost Zero Correlation With SaaS Multiples
“The R squared is only .O six between net dollar retention and enterprise value to next 12 months revenue.”
Insight
Kellogg: NDR Is a Financing Enabler, Not a Valuation Driver
“So it's not a valuation driver. I now think of it as a financing enabler, right? Okay. So a higher one isn't necessarily by itself going to drive a higher valuation, but I could tell you if you don't have a high enough one, you're not going to be able to raise…”
Insight
Horizontal SaaS startups facing heavily funded rivals must out-raise them or pivot
“If you're in some horizontal platform category, people may throw hundreds of millions, maybe even billions, of VC at the category. And you don't get to not play. So, if you find yourself in this situation, it's probably a sign that you're in a really good cate…”
Insight
CEOs must proactively assign board members work or risk unhelpful meddling
“If I'm not keeping the board busy, Helping me drive the company, they are going to come in with ideas and ways to help that I may not find helpful.”
Insight
Startups must be publicly vision-driven, culturally customer-driven, and strategically competitor-driven
“Avoid this fake either or framing, which is you need to speak like you're vision driven. So when you're talking to customers and analysts, the markets, talk about the desired end state. Talk about the vision. Don't talk about competition. When you're building …”
Insight
Kellogg: Customer Success Should Not Report to Sales or the CRO
“By the way, for whatever it's worth, I don't actually think customer success should report to sales. I think that's a stress reaction to save money. I think the company hits a downturn. There's too much sales expense, which customer success is usually classifi…”
Insight
Kellogg: Startups Should Copy Standard Pricing Models Unless Disrupting
“Unless your business plan is predicated on price model disruption, do what everybody else does.”
Insight
Kellogg: Enterprise software manages pricing friction via consistency or complexity
“There's two ways to solve that problem. One is to have super consistent pricing, which in my experience in enterprise is very difficult. The other is to have very complicated pricing. So it's very hard for them to figure out who got the better deal.”
Insight
Kellogg: VCs trust founders' CAC while PE firms recalculate it themselves
“Because the VCs tend to be trusting and say, what's your CAC and tell me how you calculate it. And isn't that interesting? Whereas the PE people just said to say, give me all your data. I'll tell you what your CAC is fundamentally. Especially in the context of…”
Opinion
Kellogg: VCs bludgeon founders by expecting best-in-class metrics across every single category
“You know, a VC will look across their portfolio and think of the best CAC payback period, the best LTV to CAC, the best rule of 40, and ask you to do, you know, beat them on all four, right? It's inherently unfair. It's a form of bludgeoning, right?”
Opinion
Kellogg: Upgrading SaaS metrics often requires replacing non-strategic RevOps and FP&A staff
“The change management is hard. It may require staff upgrades, particularly key analytics roles like RevOps, FP&A. Sometimes those people are not that strategic. They're not that fast, right? That they're good at making a budget and they're good at getting comp…”
