The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
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Mehta: Hire executives for current needs, not four years of scale
“I think often people miss more than they hit, and this is especially true now, because before people would often say, and boards would say, you need to hire for the person you need four years from now, right?
Because you're going to be growing so fast, and you…”
Mehta: Growth-stage startup net retention rates dropped 10 to 20 points year-over-year
“I've seen a lot of startups for growth stage companies where their net retention rate is down 1015, or 20 points year over year.”
Mehta: Net retention rate is a 'vanity metric' mixing disparate levers
“Net retention rate is a mix. I said it's a bit of a scam because it's mixing a lot of things together. So vanity metric.”
Mehta: Smaller SaaS companies saw gross retention drop 5 to 10 points
“And we looked at this year versus last year on average gross attention is down one point.
But again, this includes a lot of big companies with more sticky products for smaller companies.
Gross attention is down anywhere from five to 10 points year over year.”
Mehta: Net Promoter Score is not valuable due to poor response rates
“This is a good metric. It's good to track it. Also, you often don't get good response rates. You also get random people filling it out. So most people don't find this super valuable.”
Mehta: Providing investors a weak customer reference is worse than no reference
“In fact, if you investor says, who are some of your customers I can talk to? If my opinion, giving them a weak reference is worse than no reference. It literally dilutes your whole pitch process and value.”
Mehta: Do not scale customer success simply by hiring more CSMs
“In fact, if I give you one piece of like advice from the beginning, it's don't just hire a bunch of CSMs, maybe one or two. It's heretical for me to say, by the way, but it's true. Go fix all your processes, your product, make it so you can scale without a cra…”
Mehta: Companies Hire CSMs as Band-Aids for Flawed Products
“There are so many companies out there that hire CSMs as a band-aid over the customer experience, over the product.”
Mehta: Single-product new logo acquisition inevitably plateaus due to TAM limits
“Every market has a certain number of buyers and eventually get to the point where you started selling to a lot of those buyers. Now doesn't mean you won't sell to more buyers, but often like the number of new buyers, like the number of new logos grows, grows, …”
Mehta: Parting with an executive at 15 months is worse than at 90 days
“Like, it's easy for somebody to join a company and leave, like, 90 days later. It's really hard if somebody leaves, like, a year and three months later after joining, because they've already put their imprints on the team, they've hired new people, they've reo…”
Mehta: Large, Storied Companies Rely on Internal Promotions Over Senior Hiring
“This is why when you get to really big companies and really storied companies, there's very little senior hiring. Most of the people in these huge companies grew up in the companies and moved around”
Mehta: SMB customers often require more hand-holding than enterprise clients
“And actually, ironically, SMBs sometimes need more hand-holding, because they have less internal capability, and they're, like, more distracted, so it's kind of weird, like, you know, the smallest customers sometimes need more help, so.”
Mehta: Delaying a Second Product Line Traps Slowing SaaS Companies
“And if you wait till you start slowing down a lot and then need to go launch something new, but you have to create it and you have to raise money for it. And that might take three, four or five years. You're in a trap, and so kind of that really, really can hu…”
Mehta: Product teams will eventually drive the entire customer funnel
“And I think the product team is the whole funnel in the future.”
Mehta: Introducing a second product can save struggling customer accounts
“I think what's a little counterintuitive is when a customer hasn't gotten value or isn't happy, Sometimes actually this extra thing can actually tip the scales.”
Mehta: Many vendors engage in 'customer success washing' with legacy tools
“Some vendors are just taking their old stuff and dressing it up as customer success or whatever. And so there's a bit of a kind of like cloud washing. If you remember that where everyone says they're a cloud company, it's the same thing here where everyone say…”
Mehta: SaaS sales forecasts will suffer far worse than retention
“So I believe that your retention forecast will be hit, because some of your customers will go out of business, and some will hit budget troubles, but your sales forecast will probably hit significantly more than retention.”
Mehta: Using LLMs to summarize customer sentiment for investors is a no-brainer
“Running your communications through some LLM to give the investor a summary of what customers are saying and how they feel about you. That's a no brainer. I would totally do that.”
Mehta: Companies collapse when executives don't share the founder's core beliefs
“The whole thing falls apart when you have some vision as a founder, CEO, entrepreneur, or even if you're a functional leader, and the people underneath you don't believe the same things, it's all a house of cards.”
Mehta: Burned-out leaders are ineffective and send damaging signals to teams
“It's not acceptable to let yourself work all the time and get burnt out because that sends a signal to your team. And by the way, you're not a good leader when you're burnt out.”
Mehta: My success rate on outside executive hires is around 20%
“They had the resume, but I gotta admit, I have swung and miss on way
more executive hires than I've actually hit on.
And if you have to, don't feel bad.
It's something that I think a lot of us do.
I mean, I don't think my batting average is more than
Literally…”
Mehta: Almost all Gainsight executives were promoted from internal roles
“Now, the flip side, if you look at my executive team today, we're 1300 people.
Let me just go through it.
Chief Customer Officer, seven years ago, was a CSM at Gainsight.
Head of sales.
Nine years ago was a sales rep at Gainsight.
Chief marketing officer six y…”
Mehta: Close multiple large enterprise deals before scaling sales capacity
“So this idea that you get one big deal and it's the sign of something new, I'd encourage you to get two or three before you scale up”
Nick Mehta: Gainsight accumulated roughly 1,200 pricing models across 1,300 customers
“Gainsight, we're like, 1300 customers, I don't know, 1200 different pricing models, something like that.”
Mehta: End-of-quarter special pricing deals usually blow up later
“Frankly, a lot of those deals at the end of the quarter that you push in because it's a special pricing model. You're desperate to get your number. Maybe you buy their product. If they buyers, I'm sure none of you have done that before. Maybe we've done that a…”
Mehta: Customer indecision, not technology, drives slow software time-to-value
“I'd argue the biggest part of time to value is not your technology. It's how people implement it. Cause people spend a lot of time on indecision.”
Mehta: Gainsight ARR scaled to $61M before single-product bookings flattened
“So again, tying to our ARR, I think it was one to five to 16 to 30, and there's like 48. That was 61, right? And we didn't do anything wrong. It's just like they started having the same number of logos a year. So what that means is like your new bookings flatt…”
Mehta: Build a named database of actual buyers instead of abstract TAM
“And one of the things very practically I wish I'd done is build a database of your addressable market. Now, I don't mean that BS slide you show to investors that says your addressable market is like ten billion dollars or a trillion dollars. I mean the real on…”
Mehta: Gainsight reaches nearly $200M ARR and 1,200 employees
“Today we are close to two hundred million of ARR, just about, almost there. And we're about 1200 employees.”
Nick Mehta requires all Gainsight leaders to meet 10 clients per quarter
“I expect our leaders to meet at least 10 clients a quarter. It doesn't matter if you're a CFO, it doesn't matter if you're a teammate, you know, teammate success, HR.”
Mehta: SaaS companies should invest in CPQ at 100-200 employees
“Custom deals seem great at the time, but make sure they're really worth it. They have to be big enough to worth it and be worth it. And then invest in back office systems early. So your accounting, your CPQ, all that stuff is pretty good. I'm not talking about…”
Mehta: SaaS companies must build digital CS infrastructure early, not just add CSMs
“If all you have is CSMs and like a kind of a people-driven approach, then it looks like everything requires a CSM. And so kind of what I would say here is just early on, get a lot of the basic stuff in place. Like, you know, people should be able to open a tic…”
Mehta: Gainsight cut onboarding time to four weeks via prescriptive methodology
“Honestly, our time to value literally went from, like, you know, months and months and months to now it's, like, average four weeks, and a big chunk of it was this of being more prescriptive.”
Nick Mehta: Top CS executives demand core company commitment before joining
“If you are in a position where you're founder or CEO and you're trying to recruit people, the way you structure it, the way you talk about it will influence who you can recruit. And you're not gonna be able to get the best people if you don't make it part of y…”
Nick Mehta: SaaS companies must align sales and CS around customer outcomes
“What you need is an integrated journey from sales to customer success, because the truth is, your customer is trying to achieve a business outcome. They're trying to generate more leads for their business or make their employers happier or grow their sales, ri…”
Nick Mehta: SaaS customers churn because they continuously demand increasing value
“What we would say if we revise this now is that customers churn eventually because they always want more value. They always want more, right? They're not buying your technology for a point in time. They're buying your technology so that you can constantly deli…”
Nick Mehta: Post-sale customer success should operate as a lead generation funnel
“There's a second funnel that we need to all consider, which is now I've got a customer and how am I constantly delivering more outcomes to them, right? And how am I constantly getting them more value such that they become leads for me because they become leads…”
Nick Mehta: Top CS teams create mutual success plans assigning client tasks
“Customer success is a two-way street, and the best CS teams out there are bringing their customers into the customer success process, creating what we call a mutual success plan with that customer. Right? Where the tasks aren't all assigned to your company. So…”
Nick Mehta: SaaS startups hitting 50 employees must hire dedicated CS operations
“Every single person, once you get to like 50, 75 employees,
You need a CS operations person.
Don't just hire CSMs.
CSMs are really important, but just like you have in sales, salespeople and sales operations people, you need customer success operations to unde…”
Nick Mehta: Managing stakeholder turnover is critical even for 10-person startups
“Operationalizing that whole process of the stakeholder change. And this is so easy to do. And frankly, even if you're 10 people in your company, It's critical. I'd argue it's even more critical when you're 10 people in your company. Because honestly, the reaso…”
Nick Mehta: 100-person SaaS companies need a dedicated CS-product liaison
“If you're a hundred people, a 150 people, I recommend potentially even having somebody in your CS team who's kind of that interface point with the product team.”
Nick Mehta: In-product onboarding is the best way to accelerate time-to-value
“What I would say today in 2021 is the best way to do that's the product, right? It's one thing to send customers emails and get on calls with them and zoom meetings. It's all great. But the best way to do it is in the product.”
Mehta: Base your churn versus expansion focus on customer segment benchmarks
“So for example, you're a SAS company, you're twenty million of AR, you're selling to enterprise and your retention is 78% gross. Work on your retention, right? Like, yeah, right. But if you're a SaaS company and you're selling to SMB and your retention is gros…”
Mehta: Product teams are increasingly responsible for customer retention
“Number one thing is in the last 10 years, customer experience and customer retention was a job of the customer success team. Now product teams are getting super engaged in how do I drive sticky features and sticky usage? How do I drive user retention onboardin…”
Mehta: Gainsight uses comped specialist overlay sales teams for technical buyers
“So what we created is a specialist team. That works with our main team, but is very focused on talking to that specific buyer and they're kind of an overlay. So both sides get comped, but the specialist team is good with that technical buyer who wants to just …”
Mehta: Enterprise SaaS clients demand date commitments agile development resists giving
“I think the customers are willing to wait, but they want certainty that is more than the agile model delivers. This is a real hard problem. They're used to the old model of, Hey, it's going to ship in Q three of 20, 22. And it's like, I don't know what I'm shi…”
Mehta: SaaS buyers purchase the product roadmap, unlike on-prem customers
“When you're a SAS customer, you are buying the roadmap, like in the on-prem customer, you're buying the product and you might use the roadmap, but you might just stay on that old version. But in SAS, you're buying the roadmap. And so therefore the roadmap is a…”
Mehta: Every business will face a 20% to 90% new sales slowdown
“I think the bottom line of all of this is everyone's going to be affected, particularly in new sales, and we'll talk about retention as well, but your question here is about deals. I think every business is going to be affected, and whether that's a 20% slowdo…”