The Wisdom Wall

“And, and the folks with the highest usage may actually have the most incentive to leave. It's not a clear correlation to success, right?”

“Customers will prefer, prefer a great eye to a mediocre human. They'll prefer a great eye that solves their problem today, that knows the answer, to someone that has to get an engineer and an appointment to you next week, that doesn't know, that says I'm just new to the account because your old account manager quit…”

“Like a third of your company, you need to part ways with them. They're not fit for this new world. They don't want to build the same way you want to build. They don't like fast, crazy fast pace. They don't like chaos.”

“the AI traffic is going to reveal something to you. You will review, reveal promising areas for new development. You will all of a sudden see very early on. Which products are gaining traction, and you should 100% copy those products. You should copy those products and build them right into your system.”

“it's better to give a precious lead to an ad to a B plus AI than to give it to someone in sales. That's going to quit, not show up or screw up the deal.”

“I know there's this advice that say no to a 95%. I don't believe in that. I think you have to say yes to yes to everything, right? Because if, if you lose, if you miss a large fortune, 500 customer, it may be a hundred K deal down the road. That's a 20, 30 X lifetime value you can build with a customer. So you have to…”

“It doesn't, you don't need to return to office for high performers. The best people will get it done. They'll get it done from Antarctica or they'll get it done in the office, but the mid performers just don't work from home, right? They barely work. And so they, they want to supervise them for 40 hours. It's not about…”

“So the like simple framework here is that the product owns success. So this means that It should be so aligned and so good with your verticals needs that it doesn't need translation and it doesn't need somebody to come back in and say, Hey, we noticed you're not using it. And that's probably why it's not working for…”

“The tactical answer for more kumbaya people is probably cut half your sales team. This always works. Concentrate your leads in tougher times. It may not work at Matt. Maybe it doesn't work at zoom info scale, but even at fifty million, it's going to work.”

“You gotta play in categories where you lose most deals to win. This is a weird thing. You gotta play in categories where you lose most deals.”

“If growth has slowed, it is not a downturn or macro. It's a little bit of it. It is that you have fallen out of product market fit. If two years ago you were growing a hundred percent and today you're growing. It is not just the market. It is that you do not have the mark, the product the market wants anymore. You…”

“If you are a strategic person in a multi-stage fund, getting into one of these hot deals is what's going to get you the promotion. Doing the slightly off the beaten track, but amazing company that might take three or four years to get to product market fit, or is very deep in the infrastructure build, ah, you're not…”

“It's always your fault when someone doesn't work out... It's you didn't do the work. You didn't figure out if they were the right fit. They never know. You can never know enough about a company before you join. It's impossible.”

“Monetization comes first, open source for acquisition comes second. Other way around is, like, super hard, my opinion, huh?”

“So far, since I've been involved in SAS since 2005, we have not gotten any more efficient. In sales and marketing, we've gotten more efficient at other things.”

“I think if you have humans in a renewal, you're you have failed your customers. You have failed your customers. If you need sales or success or account, it doesn't mean that the margin, you don't need help. I'm not saying you don't need to parachute in on 10% of your deals, but if 80% of your deals can't sell for new,…”

“So if you had to choose between having an A plus AI tech talent team with millions of records of data, and you were going against a mediocre AI tech talent team with trillions of data, of data that the startup wins. And that starts to make sense with the diminishing returns of that data.”

“If you need a designer to build a slide deck, you're doing it wrong. And here's an even deeper, more important point. Your designer has no idea what the most interesting and important points of your pitch are. So if you hand them your pitch to design, they will emphasize the wrong things.”

“Uh, they're tough on all of us, and I really think as founders, we should do everything humanly possible to have no non-performance layoffs. I mean, we have recurring revenue. You should be able to predict the next quarter or two. You should be a little embarrassed if you have to do layoffs, even though a lot of us do…”

“You can brute force high NRR with longer term deals. You can brute force NRR if you threaten customers when they leave with an inability to get their data. You can, you can brute force NRR by having out of bound price increases, 30 or 40% a year.”

“this conventional wisdom is wrong, um, or at least extremely limiting, and there exists a set of companies that could be built that are often not built that break this rule.”

“with a few exceptions, I don't have any empathy for startups that had decent growth during 2021 and have, have slowed to zero. Ok, I don't have any empathy. You really have no customers? Really none? No. What it really means is your product wasn't valuable enough. It means you no longer have product market fit. It…”

“But you don't get from 20 to a hundred on PLG, um, because, you know, to get from 20 to a hundred, you're probably doing bigger deals, and you're doing bigger deals at bigger companies, and so PLG makes for a great meeting, and, um, you know, I think in a hundred, if you're selling to a hundred person company,…”

“how many of those same people, uh, just brought in some kind of outside executive from their VCs? Yeah, you just fucked your entire company. Because by doing that, you just indicated to every one of your employees, you cannot grow here. That we value skills that you cannot get here. And so basically, you put a cap on…”

“If you want to hire a 10 Xer, that person will almost certainly have glaring faults. Anyone that you could hire without glaring faults will be at best good. They will not be great.”

“Instead, delegate things that you're good at. This sounds really strange, so let me explain. The things that are the easiest to delegate are the things that you're already good at. You know how to do these things really well. You might already be an expert in them. You can break these things down really well. You can…”

“the reason that most VCs give you a no is lies, and especially the the reason of total addressable market in your TAM.”

“Like, I have an opinion. It should be between eight to 10 in ARR. If you want a really solid VP of sales, they're gonna want to come in. They don't want it to be too scrappy, and they don't want it to be too far ahead”

“An A investor gives you money, signs paperwork when you want them to, and shuts the fuck up. That's an A. There's a lot of room below an A. There's not a lot of room above.”

“if you are a white person, and my god, if you are a white man, which I love white men, I'm married to one, I'm made to, I'm down with it, right? I like them, but you have the most important voice in this, because no one expects you to say anything.”

“We think that most founders can actually use the overfocus on growth to their advantage, like a judo artist, either by more often choosing the lifestyle option, or by having a more sober approach to their relationship with their companies and with VCs, by actually selling companies more often, more quickly, To take…”

“This crappy word, servant leadership, it leads to stuff like this. This is the scut work that needs to be done, and I can do it, so I'll do it so the team doesn't need, doesn't have to do it. That sounds altruistic, and what it does is burn you out because you're doing all the shit you don't like to do.”

“Unless your customers are in New York, unless you're doing financial services or some parts of ad tech or otherwise, going to New York is the worst idea. Uh, you get none of the, almost none of the benefits of being in the Bay Area. You don't get the customers here. You don't get the ecosystem. You don't get the…”

“Once you give up free trials, you will never go back, and you will be able to have terrible onboarding, and you will be able to have all this friction behind the scenes, and you will be able to have many broken processes and things, and you will never build great software if you abandon your free trial.”

“Um, but the VC business model is they get paid when they invest. And so it actually, they don't really make money on the exit. Like, there's the carry, they would say, at the very end.”

“the second that you hire in, you know, sort of that, that, that pro who comes in above everyone else, you've just told everyone else in your company, fuck you. There's no way you can ever grow in this company. Because we have just hired someone above you whose qualifications you will never be able to match. Because all…”

“I do still believe that, like, AI agents are not that good today actually at doing something that is very relationship driven. But they're getting much better at it, right? So, like, the problem is when you look at LLMs, they look at the distribution site, and they give you results within the distribution. If you truly…”

“I think it is a self-inflicted wound for a lot of systems of record and SaaS centers as they jack up the prices because seats are going down and agents are going up and they jack up the price for access. It's incense us finally to put more and more of our data outside of that system of record and then forget about the…”

“you're going to lose in the vendor war if you're not the one that not just is recommended in AO, but where the agent says, I will just do it with this, with this API.”

“What we tend to think of as software. I now think of as its infrastructure. It's just a means to an end. So if you build some amazing UI, that's great. Like there might be, there are a lot of humans that will still use that some AIs, but the reality is like headless is now the defaults.”

“I know this feels, look, a lot of humans, we're used to these kind of fuzzy interfaces, and then we'll meet, we'll have meetings to kind of figure out what he's first going to do. I think that it's not a great way to work, honestly, and it doesn't work with agents because agents aren't that fuzzy. They want to, they…”

“I think for a lot of agents, if you can't try that product out of the gates and it requires an indication, you're dead on arrival.”

“What's changed is the agents have so much context. They're aware of so much that every single day when you log in, especially with you, when you log in with 10 K now our AI VP of revenue, it has new things that wants to build and do. It's not a software tool. It's not a workflow automation, right? I mean, it's not…”

“The agent made the call for a heat map vendor We'd never heard of, and we, we didn't even, we didn't even need to do more diligence. You trusted the agent. Someone lost a 50, 20, a twenty-k deal out there to an agent, and you, they were never, and this paid vet, this other, this SaaS vendor was never even in the deal.…”

“these models, um, are goal-seeking, right? And they want to finish projects. So Replit just wants, Amelia, you know this, Replit wants to finish. Replit wants to finish, and so does CloudCode if you use it on an own. But when, but if you use Cloud on top of it, It, it countermands that. It gets Replit to slow down and…”

“moats still exist in the age of AI, but they're just like shallower, so you better fucking deliver value.”

“no one knows the answer and most VCs are betting both ways. They're chucking a bunch of money in at a modest 300 or six hundred billion pre at Antropic. And at the same time, they're doing a whole bunch of investments that only make sense if in fact there is room separate from that, right?”

“And then there's about a third way you're absolutely threatened, where you are typically what we call plain vanilla SaaS. You automate a workflow, and then you either got to move and survive, or you're going to be dead, right?”

“You either have compute that sells itself or people who sell it, but you can't do both.”

“Essentially, what happens is that essentially what we're seeing here is that content that's like one social media marketer can make several minutes of commercially viable videos, social media videos a day.”

“it is more tiring to be managing 21 agents. It is not. I don't know that it's more work. I'm still reflecting on it, but it is a higher cognitive load than people.”

“And so your goal should not be to reproduce 80% of your best person, but the goal should be to find areas where the goal is higher than human.”

“I think the hard part for the standalone BI tools was they historically really had no semantic understanding of the data, right? You didn't extract of a data warehouse. They stood there. And when they tried to add talk to data, it was mainly just, let me convert text to SQL, which doesn't work. What you really need to…”

“if you talk to folks like at Finn or Intercom or Gorgias or Sierra and others, they're all saying that there's convergence that support sales and marketing are all converging because once you can AI-ify them, you don't want to have three different agents, right? You want one.”

“to get to the level of autonomy you want, you don't need humans in the loop. Okay. That that's not autonomy, right? What you need is humans on the loop constantly, the exceptions kicked out to them.”

“That will, in many cases, either deliver instant ROI or really replace humans, and it is so jaw-droppingly valuable that you can charge two to 10 times more than your software.”

“I think we've already crossed a threshold. Yeah. For which the context links Is larger than any context that human can have. Right. And I, I think that's huge because, I mean, just think back two years ago, uh, we had 16 K context link. Right now we have a one million.”

“Agents really like file systems. They like them better than SQL. They're really trained on doing grep and doing kind of search in the Unix command line.”

“So feature differentiation is really hard to maintain as a mode. You might be ahead for a month to six months, but then everybody will catch up because AI is writing so much of our code.”

“we really believe that building something is already becoming a commodity. Everybody and their mother are going into competition of creating an app builders. How do you create value out of what you've built? Whether it's your personal value for your company or value for your customers, that's where the next level of…”

“even Approaching half a billion dollars in revenue, we're still on the product market fit treadmill, because category is evolving so fast, both from technological perspective, from customer perception, that we still need to keep pushing the product at the maximum velocity forward, and it's a living, breathing thing…”

“So often you'd go and try to do RFP and buying software and I was like, oh, let me just go build it in an hour because let me see how far I can get there. So we constantly pressure testing our own boundaries of how much of our lovable we can build on lovable ourselves.”

“the biggest takeaway is don't, still don't build it if you can buy it. We love Tenk and QB, they're part of our families, and I hate to say this, but we would dump both of them if there was an off the shelf tool. We wouldn't turn them off. This is the strange anthropomorphizing we do with AI, but we would stop using…”

“if you run them in the dev environment permanently, like we're doing, you get an extra agent that has an infinite context window and infinite history.”

“what's better is if your team is Lagging or resistant, just go hire one reasonably senior person that is all in here. One. And, and folks will start quitting when they don't want to work at that pace anyway. You got to hire them ideally at the VP level above, and they're just going to do it. Just create a new role, VP…”

“If you build a 60% solution. No, one's going to pay for it.”

“view FDs as one of your most important assets to getting renewals, retention, NPS, word of mouth, virality. Don't, don't look at FDs as a cost center. This was the mistake we made in customer success a generation ago. And this is why customer success was cut to zero and repurposed into a sales function because it was…”

“It might be the API that gets us to switch, not the humans, not the chocolates, not the gift certificate, but if the API is better, works better with our agents, we might spend a couple hours. It takes to move over our key accounts to ramp because it's the agent that matters.”

“If you haven't gotten any outbound to work, Buying an AI to do it isn't, it's not going to help you. You have to prove it. Any of the agents we use, any of the dozens of agents we use, we are taking a playbook that at least works a little bit.”

“even with the help we get, like, I feel like every new agent costs us at least two weeks of what I call either a blackout period and somewhat chaotic of, like, I kind of have to ignore the other agents anytime I bring on a new agent”

“You can't, you, it just can't afford to wait a whole week, or like you're, or you're probably just wasting, honestly, you're probably wasting your money if you don't spend the time to do it daily, because a lot of these are waiting for you to give it inputs, right? Like, it's such a high volume, like, artisan,…”

“I do feel like now that I've flipped and switched to managing more agents, I think I've probably become slightly worse in managing the people that are, you know, that work with SaaS or especially leading up to SaaS Radial.”

“So there's no economic justification, uh, for software costs to building these apps, right? Uh, you can buy them for 10 grand, like it makes no economic sense. Um, so you have to really need something that you can't buy today.”

“If growth isn't accelerating, you're not an AI company.”

“You're not going to VibeCode Salesforce for real, but you know what you can VibeCode? Something for demo day that looks really good.”

“investors are expecting insane levels of growth. Insane levels of growth, right? They want, like, the idea that you can go from one to a hundred in a year is now seen as what you want to invest in.”

“There's no great answers to the question that some great businesses will compound to Epic rates, but they're unfundable now, and they would have been fundable two years ago.”

“You have to own the agents on your platform, or the agents will take away all the value.”

“In marketing, for example, marketing is all about standing out. You know what large language models are all about? Not standing out. They're all about reverting to the mean, actually. Um, and, and that's literally what they're synthesizing a lot of information and giving you kind of a synthesis of it. And so if you use…”

“A lot of the agents we use, um, are pushing down market to be more self-service. So far that doesn't work. So far, I will say for the most part, agents that require deep training cannot be self-trained.”

“Culture runs really deep. So you have to be wary of the people you need to keep convincing because they're going to be a liability.”

“AI products don't look like this at all. It's actually the inverse. Building the UI is the easy part. That's the small part. The hard part is building great AI infrastructure, building products that actually truly work at scale.”

“A lot of AI products do look the same. Um, a lot of them are now AI agents. They all kind of look like some kind of chat interface. Uh, they all do different things, but they all kind of look the same. It's hard to tell them apart. Look at five competitors. They all kind of look the same. So actually the pitch is…”

“I don't think that is the right answer for 99.8% of the world. It might work for owner, and I'd love to learn from you. It might work for us, but most folks should not think about, most folks should realize you need a, you need a nerdy human managing your agents.”

“You could have it all. You could have lifestyle, quality of life, work from home, work for 20 or 30 hours a week, exceed quota for a lot of structural reasons. That doesn't exist anywhere today. Even the fastest growing startups, um, they're either lean or they're back in the office or they're high intensity. There…”

“If you were up against a competitor who's an AI only product and you have the system of record, I promise you, your customers do not want to leave. They are far more interested in staying right where they are and having their data and their documents and all the workflows that they've built on your SaaS application do…”

“Your AI only competitors, they struggle with margins badly. They have a really hard time with margins because they have all their LOM costs are super high. So you get to do something kind of savage. You get to sell the AI products at a lower price point than your competitors can sell them at. Why can you do this?…”

“if you're not in existing invest, uh, vendors that are able to increase pricing and you're not in a top AI initiative, the number of vendors are shrinking or flat.”

“If you've been doing this for a while, your VCs are just going to check out on you. They're just, it's just not again, like putting all your money into anthropic. It's just natural. If your company is around six, seven, eight, nine, 10 years, and you're looking at this chart, you know what your job is as an investor,…”

“AI is about more than being productive. Ultimately it's about replacing or augmenting humans and delivering relatively rapid and massive ROI, much more than traditional workflow and database software.”

“profitable is not enough unless you're utterly insanely profitable like Zoom. For every dollar Zoom brings in, 50 cents goes to the bottom line.”

“Atlassian got incredibly successful selling JIRA and other products for five bucks a month with discounts to folks at companies. Now folks will spend 400 dollars, in some cases, 5000 dollars on cursor. That's why it goes to a billion.”

“these guys are blowing up because the products unlock huge TAM expansion, huge TAM expansion by replacing a lot of humans, a lot of SDR. And none of these guys would be remotely as successful if they had to charge like traditional SaaS companies.”

“Even if you grew a 50% this year, if your competitor grew a hundred percent and you, you know, you're at the same AR, sorry, got a normal idea. You lost this year.”

“The fastest growing AI companies are burning more AI and their gross margins are lower, but their burn multiples are also lower because they're adding so much revenue.”

“And you want them to double next year, and they need to triple their team, move on from that executive.”

“agents will actually may make our moats even weaker and shallower because if the agents can just take prompt, if I can take a prompt from one app and give it to another app, my switching costs have gone down radically.”

“The way an AI agent works for sales for GTM is you figure out something that works with your team with humans. You figure out an email, an outreach, a script, a set of objections that you overcome, a set of questions. You, you nail it yourself, just like it has always been at Sastra since the beginning. Humans figure…”

“The real bar is better than the average human with 24, seven consistency. And that's which, that's what you're going to see in these emails, like pretty good. With not a lot of errors. That's, that's good enough to crush it.”

“And I really think, especially in 20, 26, we're all going to work in these heterogeneous worlds where we mix AIs and humans and imagining that I somehow mind talking to a great AI is backwards. A great AI is often going to add more value than a mediocre human.”

“If you can't get that help. Don't buy the vendor. Don't buy the vendor, no matter how slick the salesperson is AI or human. If you're not going to get the help to train and deploy. I'd rather have a worse vendor that will give me the help day and night.”

“You just need enough data for these tools to work. You don't need 10 years of data. Six months is enough. You need a volume of actionable data.”

“Like all of this is because when you delivered the product, it didn't deliver value. A customer would have to use your product and then go do their job. But you have a product now with a what the fuck interface to look at and they realize in their head, oh my God. This is going to immediately help me do this job that I…”

“The reality is that you're not building screens. If you have the metadata and your agent interface understands the context, you can do it in a month.”

“customers, Don't want to use multiple agents. A salesperson, an individual functional role does not want to use seven agents.”

“And I'd say our most leading edge companies like design and product is just building prototypes. There's no doc. There's heading prototypes to dev success or support that we moved out of dev normally is back in dev because the iteration loops to hear from support, getting over to dev to figure out what's working and…”

“What is interesting now in a world, which you're not building screens, but you're solving problems, as long as you're smarter customers, at least they're actually very good product managers. They're giving you use cases or pain points that I want you to solve for, which at the purest abstraction, if you're building an…”

“No matter how great your app is, there just isn't any budget at the CIO office. It's all being consumed by AI and price increases.”

“You don't really need twenty million, right? You might need 20,000 great words of content that are recent on your product. It might be enough to make the AI great.”

“This is, you will get more benefits, but you do not get time back. You lose time. You lose time with these agents.”

“There's no set and forget, no matter what anybody tells you in 20, 25, maybe in 20, 26. Uh, but there's, there's no set and forget.”

“The main learning is only do this if you can't buy it from 99% of you. Like it's cool, but we did this for content review and other things, and we'll show you where there is no off the shelf app, but, but don't roll your own. Buy, buy, don't build, right? Use for B to B stuff. There's a lot of cool things you can vibe…”

“none of these names are as important as putting in the reps and the work. And Amelia will show you the actual date in a second. These are all great apps. We stand behind them. We recommend them for sure. But you could pick another two. The most important thing is training them deeply and doing it Every day. So many of…”

“all of these apps have their own OAuth built in. That is secure. That has been hardened. And everyone goes in and I know Replit the best because that's where I've spent time, but they all have the same ultimate. They're all more similar than they're different. And you're like, oh, I don't want to use the Replit OAuth…”

“If you build unit tests and this is, if you go back to the craziness that happened to me on social media, the agent, when it, first of all, the agent wants you to be happy. So we'll make up data. That's number one issue. We'll say it passed the test when it didn't. But the worst thing is when it fails the test. It will…”

“If you seriously want to put a simple, but real B to B app into production with real users, collecting real information and charging for it for real, and you want it to be any good budget a month. A month and 60% of your time will be QA and testing.”

“there's really two broad categories, things that are AI proof, right? The AI resilience. So that's going to be like social proof and influencers is going to be like some of the UGC stuff. A lot of that, the webinars, the in-person, the events, the dinners, all that, that is going to work for a while. Like people like…”

“And I'm now encouraging CMOs to like have much leaner content teams, and just a few people that can run content workflows at scale, because the output is just as good, if not better.”

“I have a saying at Bessemer that I started saying a year ago, which is that COGS are the new CAC, which is that you can spend a lot on, on COGS, but it means that you also can't then be spending a lot on CAC in customer acquisition.”

“VCs are now looking for trillion dollar outcomes. People have decided that every couple of years, there'll be another open AI. Not every week. There'll be a trillion dollar company.”

“after a hundred, if you're growing less than 30%, it's big yellow light, right? And if after a hundred million, you're growing less than 20%, you fell out of product market fit. A hundred million. You have so many thousands of customers. They should be telling their friends and they should be leaving and going to new…”

“Most sales reps want to earn 80% of what they can for 30% of the work.”

“if they don't understand what they're going to do about the fact that search is going from SEO to chat CPT, and I don't know the answer, but I know the issues probably can't hire them.”

“some of the easiest things to sell AI products to today or automate are things that maybe have already been outsourced that business process organizations are doing already. And the interesting thing about that is they might actually have a real race to the bottom in pricing.”

“training your own model, certainly pre-training it, not helpful. Yes, you need data to fine tune, but it's not actually a ton of data. And so a lot of people have access to that. And so in many ways the, the differentiation that I think will continue to compound is like these thousand little things.”

“Again, if you can get your AI to be decent to the level of you yourself, that's probably the quality you should aim for. They will prefer that to, you know, a AE or SER that is one day in at your company saying, hey, have you heard of Saster?”

“You get higher output. You get higher quality, but you, but there's no less work trade off here. That does not seem to exist in high quality GTM AI today. More work for more, for better output.”

“I'm actually very bullish right now. You know, there's like a little bit of a meme of like these AI coding tools. You can just swap them out. I think that's like a temporary thing that you'll see on Twitter or X or whatever. I think the mode is actually fantastic because if you're the place where you have agents that…”

“And the thing that I always tell any partner is unless there's someone in snowflake whose career and future depends on you succeeding, you don't have a partnership. And by the way, that's true for every company.”

“Everything in this age, and we'll talk about this, but the business model is changing. It's not like what product you shipped and how much you can get for that product. It is where is their value and how much work is getting done because of AI.”

“You need to be a highly systems engineering focused CRO to survive over the next two to five to 10 years. Yeah. If you don't have the acumen to be able to understand how customer journey connects to systems and infrastructure and connects to the rep process, And how this whole orchestration works, you will greatly…”

“I'm the last generation of CEOs to say, maybe you are too, that we only had human employees.”

“I think that where there was an AI budget, that was a mistake. And that where it should be is like, you should be holding, at least this is what I do. I should be holding our service team accountable. Our sales team should be held accountable for that. And that is where the budget should be. It should be the line of…”

“the IPO bar today is 50% growth at five hundred million, okay? Now that's not a billion dollar IPO, that's a much bigger IPO.”

“often there is an investor on the cap table that's been there for a long time, and their model, it's like the tail wagging the dog here, their model is they need to see some liquidity for the next fund, so they're often very problematic reasons.”

“sometimes like the mistake we make is we take pressure out of the system by giving the founders some kind of liquidity. But we don't think enough about the rest of the team. And then the team's playing on the founders.”

“Generally, my experience has been when it's frustrating, it's because at around 50 to a hundred million in revenue, someone's like, oh, maybe we should use data to make decisions. And then it's like a multi-year process of unwinding a bunch of stuff that happened. So we made the decision to prioritize it pretty early.”

“People don't realize that the SMBs and mid-market of today are the enterprise of tomorrow. So they, they getting used to use another product, they're getting used to use another platform, and eventually they become the enterprise companies. And then those enterprise companies, those SaaS companies that move off market,…”

“if you want to scale a company past a billion and even to a billion, you have to go multi-product. There's no other way you can do it.”

“And because of that, you don't necessarily have to have the best CRM in the world. It might be second place, but because of that integration and because of that data flows between the different products, you get such huge benefit from that, that it's a huge advantage over any other kind of player in that industry.”

“We think that you need to be at least four hundred million of ARR. You have to be growing at least 30% a year. You're probably going to be worth three to five billion dollars and trade anywhere from that eight to 12 X range.”

“And regardless of private market valuation, at least in today's interest rate environment, companies cannot expect to be worth more than 10 times ARR.”

“And the down round IPO is actually irrelevant over the long term. You've seen companies like SPS Commerce that are up almost 20 X from when they went public because they grew durably over time.”

“I firmly believe that even if you do raise VC for most folks, a one and done is the best approach. Raise a little bit of seed money and then call it a day. Don't take the stress and pressure.”

“profitability efficiency is great. It may be necessary. It may be necessary. If you don't have capital, if you're bootstrapped, if you've spent all your money, the public markets are demanding that everybody be, be more efficient, but it's not enough. So profitable. Hooray. No one cares.”

“Interview 30 kids of any age and be religious about this. Just only hire one you would buy your own product from. Don't give on this. I don't care whether they worked at Toast. I don't care if they worked at Owner. I don't care if they were the first person in at Service Titan.”

“I tell companies all the time, 10%. That's the number. You have 10% of your revenue that you can spend on all things post sales. And I can debate what's in there or not in terms of the menu we talked about. But ultimately, if you're going to run a business that can raise money effectively, that is rule of 40, that can…”

“if you're tripling, doubling without AI, it's a hard sell.”

“it's a Groupon era for AI where one company takes off and then there are 15 to 20 others because you're wrapping the API, you have a lot of capability out of the gate, and then long-term product differentiation probably matters less than go-to-market execution.”

“rather than trying to figure it out, decide today with the limitations that we have today, which in the world of AI, that It's like a complete, that just leads to complete failure within weeks.”

“He'll wake up one day and be like, oh, I want to sell my company, hire a banker. It never works. It's inbound. It has to be inbound.”

“You, to be a venture backed company, you have to go from zero to two hundred million in 10 years. Do a spreadsheet. If you don't triple, triple, double from a million, you will never get to two hundred million in a decade. It just won't happen.”

“You don't have product market fit until you have no cus more customers than you know why. If you know exactly how you got every customer and it's hard and you're not, and you're like our other guy who was great. He said a million, but they don't know how to get to two. He's got happy customers. Great. You can have in…”

“The truth is we talk about on the internet that like it's a choice, but the truth is the venture capital is a niche product. It's a weird product. It requires T three D two growth. Most folks are not experiencing T three, two growth. Or don't appear to have the potential for it in the early days. So they just can't…”

“Companies are not trying to be efficient. Companies are trying to grow. And so if I give you a way to grow faster, then you're just gonna say if we had more people and this thing is more efficient, then we'd grow even faster. And so I'm gonna try to add more people if possible.”

“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.”

“I believe AI is as much table stakes, more table stakes at a tactical level than it is budget enabler at a meta level, at a high level. I think you have to do it. And it's hard, but it may not actually increase your revenue.”

“if it's scale, if you can't grow your new logos, 20% a year, you're in decay. Okay. 20% a year plus 120% NRR. I know it doesn't totally sum, but that's your 40% growth at scale.”

“Because every five to 10 years, you have to re-found a company. It's so hard just to keep up with bugs. It's so hard just to keep up with feature requests. It's so hard to build the product you built 10 years ago, right?”

“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.”

“I think it's much better to break into an already existing category with something significantly better than in the early days, try to do something bigger.”

“The playbook that we've built over the last 20 years, basically no longer applies. And we need to re-instrument and re-determine what this new world looks like.”

“We see most AI agentic software companies, people who are selling software that replaces labor, they either sell at the bottom, PLG, bottoms up, or they sell at the very top. Mid-market is much harder.”

“We don't get to do your payments unless you love the software that you just talked about. Like we are a software government. We have to make a great experience. We have to make it so that when you're going between buildings, you can actually pay a bill if you need to on your phone, right? Like you have to be able to do…”

“You can't, even if you build the products in a year, it takes so long for that revenue to get material, doesn't it? Two, three years. So if you start now at a hundred million or two hundred million in revenue to try to go to IPO, you're fracked.”

“You basically got to have 700 people when you get to two hundred million in ARR. And that may sound, hey, what does that mean for me? I'm not at two hundred million in ARR today. Roll it back to where you are. You can bridge some of the gap with capital, but at the end of the day, to be efficient, to survive in today's…”

“if I was building a AI application company, I would, my first piece of advice is build a services strategy immediately. Do not wait.”

“No single, like if you're POS only, like POS will get commoditized to zero and basically already is. Most POS companies alone are making all of their money on the rake of the transaction and not no one's like the hardware is now zero that you have to start.”

“most businesses that I've seen and most sales orgs that I've seen Almost always fall under a power law. Which is most of the business is being driven by a small number of people. And yet the company continues to add headcount and spread it out. And it's just stop doing this over index on the people who actually perform…”

“The other thing is immediately kill anyone who talks about averages. If they're showing up, they're like the average performance. Oh, the average performance. That's pulled both directions by your worst rep and your best rep. So if you have a rep who's 10,000 percent of number, your average means nothing. Your median…”

“I think picking up the phone and calling people is like a lost art. I think a lot of companies just don't do that anymore. And it may even be why it's more effective today is because everyone's cold calling doesn't work. We got to do other things.”

“As a rule of thumb, I have never seen in my life an Excel plan or a Google Sheets plan that had dozens or maybe 20 pages or tabs where it actually made sense. None. I've seen a lot of these, but I think they are all just really poorly done. If anybody wants to challenge me on that, I'd be, I'm totally up for it. If you…”

“If an investor sees a company with 10 or 20 salespeople and they've never let go a salesperson, that almost tells you something Tells you that something isn't working because it's unheard of, that every single salesperson works out.”

“I wouldn't let them start until they know the product folds. I wouldn't let them start. Now, best of all is literally give them the, if you really think they're so great, give them the offer, agree on the comp, agree on the equity and say, you know what? Now take a month before you even show up and go learn the, I…”

“make sure, even in a stretch candidate, that they have hired two to three salespeople that hit quota before. Not 20, not 200, but it's not enough if they inherited a team. It's not enough if they were on a sales team. It's not enough if they were an SDR that got promoted to manager but never hired any of the SDRs that…”

“which I think is very unique to AI, is that people are actually very willing to pay to try something out, both in enterprise and personally, much more so than the kind of previous generations of SaaS.”

“I would say the two big aha moments was, the first one was like, people are not replacing video production, they're replacing text. That's very fundamental to our understanding of like, why this product is valuable.”

“Meaning sometimes, you know, you think that, oh, like more momentum is a good thing and let's, you know, onboard you really quick. Let's go live next week. But actually the success rate drops quite a bit when you push that hard for it because, um, you know, you, you want to bring everybody on board. You want to get…”

“when you built like a high velocity sales motion, you gotta, you gotta find the systems to make it scale. And it can't be that, oh, you know, we need someone to help close to steel. Let's bring in the CEO when the deal size is only like, you know, six, seven, eight K ACV.”

“if you have an aggressive Multi-stage fund in your cap table, everyone knows if you're killing it, they would preempt your next round. They would clearly do the A round. That's certain. Can give you 10,000 examples. It's just, if things are going okay, but not massively great, which is normally the case at the early…”

“and that's why I also really like, and I always push people, work with the founders of firms. They ain't leaving, number one. You're not going to get orphaned. They're not afraid to take these courageous bets. They're not getting fired by other partners.”

“People, if they need to talk to you, they queue up the stuff they need to talk to you about until the meeting. So if I have a meeting with, with Kyle, with Kevin, on Thursday at two o'clock, let's say I need to meet him, and he's got something really urgent to tell Howard, the CEO, guess what? Kevin is going to wait…”

“The frickin' founders who are starting the company and trying to do something impossible and move a rock up a mountain ought to be available at eight p.m. Sunday night for an hour and a half to plan out the week.”

“instead of investing heavily in BDRs and SDRs and outbound to generate demand, Use your stock options to bring on advisors who can make a fast introduction to the top people immediately and get you in. No BDRs can be able to get a meeting with the CEO of some place.”

“The learning is, as of six months ago, that has changed, and it is working absolutely. It's making the job seamless. Like, the LLMs now, inside Google Ads, are making targeting better, ok? They're better at showing the right creative. They're better at showing it to the right audience, uh, at setting the bids, ok? Uh,…”

“And so they're not gonna, they're not gonna give you credit because you're profitable. They're not gonna give you credit for lower growth because of macro issues. But what they will do is they get a little blind to hyper growth. Like they're so deaf because fewer companies are hyper growing. The ones that are…”

“Agencies for BDRs and SDRs never work with a few exceptions. The reason they never work is because with. 20 clients, you never learn the product.”

“the number one reason I see startups struggle at your stage. In today's world is they hire a VP of sales that either doesn't want to sell. Or doesn't ever want to learn the product.”

“I would never give anyone an offer letter before they give you a demo from CRO to junior SDR.”

“I used to not be sure. Now I think it's a hundred percent required. They've got to sell themselves. And if you hear hesitation in their voice, they ain't gonna do it. If you hear a maybe, don't make the hire.”

“Not a hundred percent of the time, but at least 90% of the time sales falls.”

“If your CTO by today, isn't sure how to, doesn't, isn't sure how to integrate AI into your product. Ask yourself if you need a new CTO. It doesn't mean get rid of them, but your competitiveness, I think is going to continue to decay and accelerate.”

“magically bolting on a PLG motion to a sales led thing is not an instant solution to marketing. It's I see so many folks that they're struggling. What are you going to do? Our product's 60,000 dollars a year. Oh, we're going to go PLG. What does that mean? We're not quite sure, but it's going to be self-serve. It's…”

“I think the worst of all of this, what has made it the worst is when we've all decided that customer success should be part of sales. The worst of all of these trends, because what we've done is weaponized customer success. We've taken the one person in the company. Who, if they're actually good and not lazy and do any…”

“funds are structured for this funds are looking for ten billion dollar exits. It actually puts a lot of pressure on folks that are doing pretty good. They'll just, if you, if a V, the only way a VC can make money is not just if you exit for a billion, which is pretty hard. Pretty hard to exit for a billion, but it has…”

“There is no magical AI line budget at big companies. There is no magical thing. Stuff is being cut to fund these initiatives”

“Actually, the one thing most people don't understand is actually, it's not very smart. It's, if you've read kind of book like system one syncing system, Two thinking, right? So this is like AI generated value system one thinking, right? It's not, it doesn't reason. It doesn't understand what it's telling you. Just get…”

“It's a little bit weird with small businesses because sometimes with small businesses, they need like five years to figure it out and you know how it is. And so. We never really found the one show. What we found was that they just need lots of time to find their way. And everything we tried just really didn't seem to…”

“it's actually the most economical marketing you do because it goes viral that people tell their friends about, and that's the cheapest marketing, uh, that you could pay for.”

“if you're trying to, we wanted the ability to be able to do any type of payment because that's what customers needed. You have to, you know, make sure that you're owning that infrastructure. Versus you're lying on some third party in the bank that's going to help you because they won't be able to keep up with you once…”

“If your new customer growth is not growing half of your, of your top line, your revenue growth, you are shrinking in relevance. You are shrinking in market share and your future is at risk.”

“Growth is twice as important as profitability. So track both, but profitability is not the goal.”

“don't bother hiring more than one or two BDRs until you figure out this data piece. Cause it just, the economics won't make sense.”

“just look at your reps calendars. And if they don't have three or four customer facing meetings on their calendar, every single day of the week, you don't need more reps.”

“using a first party solution with say OpenAI or with Anthropic is going to have different performance, different latency than if you do it via an intermediary, like a cloud. So you maybe get some simplicity by not having to onboard different vendors and different, different support, but there is going to be an impact…”

“What you're describing is as, as Peter described the power law venture, where there can be a series, a, an exceptional company that is raising money at 30 to forty million dollars, which I think is probably the Middle of the road series a right now and a billion dollar outcome for that company. It actually doesn't move…”

“We made decisions based on a spreadsheet. We had a historical data on rep effectiveness in 20, 20 and 20, 21 in finance plugged the number going from 10 reps to 14 reps into the spreadsheet. And the spreadsheet said this was what was going to happen when we go from 10 to 14 reps. And it actually went, it not only Um,…”

“If your sales led motion slows down, I will tell you the simple answer. And this is so important. You have fallen out of product market fit.”

“If you don't architect around this in the beginning, it's almost impossible to add it later.”

“What we have seen, though, in the applications in Upstarts is that a lot of them are now facing challenges, and those challenges essentially boil down to one word, and that's retention. Retention has been tough for some of these, and there's a couple of reasons why that might be, and think about it. For the, those that…”

“And so, there's actually a better way of, like, building product-led sign-up motions with separate products to get people engaged, and then push that into a sales motion. And that is a much easier transition than, like, shifting your entire product from an enterprise product down to a self-serve, like, PLG product,…”

“I think it makes sense to create your own community when you have something that is free for everybody, or it's a big portion that is free, or if it's open source, if it's a developer product. But if it's not that, then you have a closed product. People need to pay. They don't want to be part of your community.”

“No one on planet Earth needs another SaaS product. They don't. Every company out there, all the Fortune 500 and Global 2000, they seem to work just fine. With whatever CRM, or marketing automation, or ABM, or whatever tool, they work just fine. They don't need any change. Like, the bar is really high to get someone to…”

“And so we think that's not what we now call a language model. So it's not one big parametric monster. It's something a bit more elegant that has the retrieval kind of built in. It's a retrieval augmented language model and is strained end to end so that it can rely on information that's external. And so that means that…”

“You don't have to fine tune your model. It feels very intuitive. We have this great data set. Uh, we own it. It's our data. So we need to do something useful with it. So we need to fine tune our own language model. And so the companies who are offering that service, they would like you to think that, but I just think…”

“I would just fire anyone that isn't metrics oriented. Literally, you don't need anybody today. You have the wrong people. First of all, I don't think you should ever hire anyone that isn't metrics oriented, but it's usually a sign of someone that should either not be a VP. Or should be somewhere much larger than you're…”

“There basically are no rounds north of two hundred million dollar valuations because for an investor to make 10 X on a two hundred million dollar valuation with dilution, you have to have a two and a half billion dollar IPO. There just aren't very many. Most SaaS companies aren't even worth two billion dollars today.”

“You know, people Uh, often say that at a billion in ARR, you really need your second product. I would argue that you need to start a hundred X earlier, right? Have your second product in market and scaling at ten million, and boy does it pay off.”

“You do want it to be kind of just healthy to be at a six or eight X revenue multiple, and I make, I'm making up those numbers, but like, but that, you know, that tends to be a safe range if you assume the company's going to get 20, 30, 40% operating margin, grow it up, you know, 10 to 20% revenue rate, like that, that…”

“The alternative model is you just say, hey, we're just going to embed AI into everything. And then you're like, well, shoot, now my costs just explode. And, and, and also equally, you have this, like, you know, disadvantage, which is the power user is being subsidized by the non-power user, which, you know, has in, in,…”

“There's no AI budget per se. When I, when I, and when I referenced that, it's sort of like, there's every, everybody has like just some discretionary dollars for, you know, some R and D or innovation thing. And so that's, that's probably right now the totality of the kind of quote unquote AI budget. And you should be…”

“if I'm gonna build my MVP, I'm gonna build it with the startup tech community. That's, like, scary for me to say, because the startup tech by itself, as an, that, that has a high failure rate, so you're gonna have a lot of churn, but it's just where you're gonna have the quickest bang for your buck to build the models,…”

“I personally believe the number one failure reason for startups is they, they choose the wrong time to scale and they choose to scale at the wrong pace.”

“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 need to hire that person that can help you get to where you…”

“there are other businesses that, or other verticals that don't have the density and that also don't have the unit economics. To, to get the payback that you need on a distributed workforce, right? We do because of the software plus embedded payments model, right? And so if you only have half of that, if you only have…”

“If you hire someone from something that is great, but easier to sell and yours is harder, they will fail almost always.”

“in enterprise, it's often around a hundred customers in a group. In mid-market, it's a thousand. And in SMB, you're lucky to get to 10,000 customers without hitting significant headwinds, ok? So my, my rough, way too rough rules are enterprise, mid-market, SMB. Before you get even halfway to a hundred, a thousand or…”

“The biggest mistake I see from like, Two-ish million to ten million that founders make is they over-diversify. They cross a couple million in revenue. They finally have something. It's more than beer money. It's real. And they're like, okay, well, we're strong in insurance. I want to do all these other things. It's too…”

“Don't raise venture capital, or at least let me qualify it with an asterisk and a dagger. Don't raise more than five to ten million. Don't go to the double digits if you don't want IPO.”

“what I see again and again is I see founders who are pretty good and they hire rep after rep after rep that worked at Dropbox or whatever, and a hundred percent failure rate. Again, and again, and again, and again, and again.”

“I think if you exit founder led sales and vertical SAS before ten million, you fail.”

“PLG is like cloud. It's actually nothing. It is an amorphous term that properly used describes a set of actions and motions that is helpful. Improperly used makes no sense. There are no cloud magicians. If you don't, you can't hire someone to magically cloudify your application and you can't hire, there are no PLG…”

“If you can get it to ten million, you have good NRR, and the founders don't quit, Like, even if you're growing 30%, build a spreadsheet. You will go from 10 to a hundred if you're patient enough.”

“If you can, the right, the perfect time to hire the VP of sales is when you have two scaled reps.”

“If you hire someone that hired zero reps themselves, it never works.”

“Private equity firms will buy any SaaS company with high NRR, um, that are break even north of twenty million.”

“VCs prefer bootstrapped, but they are not willing to give you credit on growth. That's how I'd summarize. They're not willing to say, oh, well, look, 50% growth is okay. It's because you didn't have money, but if I give you money, you'll accelerate to a hundred. A founder might believe that, but no VC is going to take…”

“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't have a salesperson, and people have to convert and send a…”

“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, uh, the incremental dollar you put is not as efficient as the first one. So, the fact you can go multi-vertical is a hack in a way because…”

“All the metrics that you're using, um, you know, LTV to CAC, um, um, 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, uh, yeah. It's a bogus metric, but, ah, that's definitely not cash.”

“you need two different answers to what do you do. One that you give investors, and another one you give customers, and they're different. The words on the front page of your website are for customers. If you're using that for investors, more often than not, you're doing it wrong.”

“Your goal should be 80% accurate, a hundred percent clear, not a hundred percent accurate, 50% clear.”

“what most people don't realize about investors is that you're not really convincing an investor to invest. They're convincing themselves to invest. The more they can talk, the more they can talk themselves into giving you money.”

“I think that the vast majority of the time building is better than buying. I think buying companies, particularly when you're small, comes with a huge amount of overhead that is hard to foresee. You have to integrate the team, the culture, the product. You're not going to have the integrations. It's generally speaking…”

“do not let your burn multiple go above two, because We're going into a tough period. It's more likely that you're gonna miss than exceed, and if you miss, your burn multiple's gonna, like, go off the charts. It's gonna be even worse than you're planning, right? Yeah, so two is the absolute max that your burn multiple…”

“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 at war.”

“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 your company culture, my opinion, make it customer driven.…”

“when I hear that we win every deal, I just know it means you're not doing any marketing. You're not doing any marketing and you're likely not doing any outbound in sales either.”

“I mentioned before there's some exploitive behavior from the cloud service providers, in particular AWS, and so you have to be very careful about your license if you're doing open source. I would not just have a, a very powerful core that, for example, is with the Apache license. That's, uh, shown, been shown to be,…”

“But the really worst thing about trying to do open source, uh, and, and also, of course, trying to build a cloud service, which you fundamentally need to do, we're at the SAS conference here, uh, in 2023, is that you're actually going to build two different companies, much less two different products.”

“So I'd say that if you're starting from scratch in 2023, you should only ever consider doing both of these things at the same time. If your ICP that you just believe is really the sort of narrow set of potential customers out there that really need and want your product, if they're not willing to use a cloud service…”

“as companies have become more mature. Most of their S&M expense Is not spent on acquiring customers. Um, most of what they spend on is retaining their existing ARR.”

“At the end of the day, the metric everyone's going to talk about is NRR, going to a Ron's point. Every public company reports it, but GRR is more important.”

“You will close more revenue with fewer salespeople when you are in an environment that is demand constrained.”

“what you usually find is if you get rid of the good but not great VP of sales, And don't have a plan. Don't have someone to replace her or him. Don't have a strategy. I see companies go into a spiral they often struggle to recover from.”

“And a simp, a simplistic way to boil it all down is, one, we have to revert back to sales closing three to five times what they take home. Three, at least three X for SMB, at least four X for mid-market, five X for enterprise. And you have to budget in there the cost of the support of the team. And so that may have to…”

“when I look at the purpose of venture capital, it's not to, you know, burn a dollar five in order to grow a dollar of revenue. It's to give you that opportunity to already be building for the market while it is still developing.”

“at this point, Like, ah, you know, 15 years ago, you could start a SaaS company in any vertical, and you'd be the first one, and it would probably be pretty successful. But now, like, every, every space has got two or three things in it. And so the focus, narrow point solution approach, there's not a lot of…”

“What we can do is we can go a hundred times deeper on those capabilities than any of our competitors can afford to go, and so whenever we're going up against a point solution competitor that only builds in one area, we know that we're going to win in those areas. We're going to have better permissions. We're going to…”

“The most important thing to start with is like the, that the integration is the product. Um, You want to build in a space where there are problems because of disconnected systems or business process, and that you have these advantages where if you combine everything, you can unlock a lot of new product capabilities,…”

“if you have a VP of sales that's got, you know, 25 SKUs that they're selling, they're gonna pick, like, the three or four that are the easiest to sort of help them get to quota, and, and inevitably you get products that are just not gonna be as material An input to your sales number that year, but still, like, could…”

“generally speaking, you want to build products where those five advantages are maximized. And so, you know, the first one was like integration. So you want to build products where the integration with the other products that you've already built matters. Integration with employee data... You want to find products where…”

“when you're a PLG self-serve business, you at some point need to actually have sales led, especially after you're going after enterprise organizations, be approximately fifty-fifty of your net new revenue that you're generating, and we are far from that ratio, and we likely have to close that over the next couple of…”

“If you're doubling, you can raise venture capital. If you're growing 65%, that's still pretty good growth. You can't raise money.”

“I don't think that the desire to make a Category is the right approach to build software. I think it's a sign of arrogance. I want to build a new category. It's, uh, I think it's gonna clutter your mind if you feel, you feel, it's, you feel too much, you put too much pressure on you. If you play tennis and you are a…”

“Customers don't care about purity. This is also another lesson, guys. It's, uh, you, if you aim to purity, it's the wrong way to do. It's, uh, you need to aim for, um, kind of, um, something that is, I mean, it's like life. Purity in a way burns everything around it, and you don't see, you cannot do real use cases.”

“SAS is checkers, not chess. You, you shouldn't be thinking of yourself as, like, a grand master of SAS. You should be thinking of this as, like, a kind of simple game with kind of simple rules, and it's more a question of executing them well and understanding the game board.”

“for most SaaS companies, this is where the technical moat comes from. Your technical moat is not usually some unique specific piece of technology. It's, uh, for most SaaS and just an accumulation of, um, ever more nuanced, enriched, and detailed handlings of all, it's this accumulation of feature weight and, and, uh,…”

“Once the top public companies are trading at about 10 X on average, 10 X or above, that's normalcy for venture. And you can make a spreadsheet and you can talk about why and how ownership works out to distributions and, but it's pretty hard to build a three X venture fund in SAS if, if we don't have 10 X multiples.”

“what no VC wants on planet Earth Is slower growth and profitability. No VC wants that trade-off. Because going back to the earlier point, the game is to go from one to two million to a hundred million in seven to 10 years.”

“So M&A, like, you think M&A should pick up in, when, when things are calmer, but it does, it doesn't happen that way, right? Now, to some extent, there's a little bit of, like, you know, the Tomo Bravos and the Vistas, they, they have some insulation from this, but even they don't, like, Vista is struggling to close…”

“the best BDR, the most, the best BDRs are the most senior people because they're a phone call away and can easily meet people and the board. And so I, I really think founders ought to think about how to construct their board and our advisors in a way that they can just make them the BDRs to kind of get going and to get…”

“enablement doesn't work globally because the stage of development of the development community is very different.”

“from an investor point of view, a term sheet sign is not a deal done. We continue to do our due diligence up to the last day, and the entire negotiation process with a founder on the terms is a, is a, is a, like the most revealing of all due diligence”

“Because where enterprise sales is about injecting friction, like value engineering, or proof of concepts, or business cases into the sales process, when you move to a consumption model, it's actually about removing friction. It's about doing exactly the opposite.”

“PLG can solve for a whole raft of use cases, but for the large enterprise opportunities, it's gonna be really tough to work with PLG. So pure PLG is not realistic in those scenarios.”

“So if you can do it in, in single digit millions, I think that's my challenge. Try to do it in, try to fully localize your app in, in single digit millions, right?”

“the thing is, SAS is not really that interesting without a hundred percent NRR from SMBs and like a 120% from the enterprise, because you can kind of sleepwalk. I mean, not literally, but it's what makes the business model work is that the revenue recurs, right?”

“somewhere between 10 and twenty million in revenue, depending on your sales motion, the models converge. The models converge. So, if you have twenty million in revenue and you're bootstrapped, and you're willing to spend all 20, right, you can basically hire as many people as a venture-backed startup can.”

“I don't think there's any such thing as an MVP in SaaS. Yeah. If you want to be a B to C guy, great. I, I hate that term too. I, the term I use, and I, I should, I used to talk about it a lot in the early days of Saster, but you want a minimum sellable product, not viable product. Uh, MVP is a crappy, uh, pre-milestone…”

“it's a lot easier To build a self-service business first and add sales later, then build a sales driven business first and add self-serve later.”

“if you cut the bottom performing whatever percent of the AE team, what that means is you will give the limited number of opportunities that you do have to performers that have a higher conversion rate and actually convert more revenue or more sales with fewer sales people.”

“somehow in seven to 10 years, you've got to get to a hundred plus million in revenue. Okay, you, you just have to, and, and really today it probably has to be closer to two hundred million because that's when you can really IPO, right, approaching two hundred million.”

“There's still delusion across all of the markets, and I still anger founders when I bring it up. I still get Toxic comments, but you just have to assume absent evidence, you're unfundable. Like, go find, go get a term sheet, or just go get someone you trust to tell you, hey, Harry, if you hit ten million growing to…”

“Um, you know, it, it's very hard for most employees to make money on anything that doesn't have a ten billion dollar plus outcome. It's very hard to get rich as an employee.”

“Exits are rare. They're really, really rare, and VCs don't talk this way, and Twitter doesn't talk this way.”

“If you do a brief strategic retreat as a startup, it's fine. Take a quarter, get your house in order, right? Get rid of that terrible VP, cut your burn rate. But if you stay in strategic retreat for a year, you never pull out of it, right?”

“If you can't raise any money at all today, like if you're unfundable, I don't think you're going to be fundable at the end of the year. Ok, if you're, if you're, if you're fundable today, but you don't, you don't like the metrics, you don't like the valuation, you, you double the end of this year and you see some…”

“There are only so many really amazing sales leaders that exist to begin with. And if you limit your candidate population to a very small domain, like let's just say property tech or something like that, how many unbelievable property tech sales leaders are there? It's just like, so you, you ultimately end up…”

“it's probably harder to retrofit, you know, delightful, you know, bottoms up adoptable or PLG, um, you know, adoptable product. You know, after the fact than it is to figure out how to start with self-serve adoption, PLG, and then layer in enterprise sales.”

“You put it in product.”

“you're talking to CROs and VPs of sales, like you can't have a really junior sales rep on the other end of the phone. And so raised quotas, raised OTE. And so I think the sales force that we built early on and the people that, that joined early to help sell were just a, I think we were outselling them.”

“embracing this identity around sort of like fast growing tech company raised a bunch of money. Um, that was a, that was a mistake. Um, and I, I think the right thing to do or, or what to try and do is associate your company with what you do. Had we been known as, you know, the best health insurance broker or the first…”

“The rule of 40 is a measurement for public company scale businesses. And if you're at orders of magnitude below that at 10 to 15 in ARR, it's a different rule. You know, you'll never get to scale and have that sort of profitability margin at scale unless you're growing fast.”

“Um, and so the second role that I advocate for a very early stage founder after that content person is two SDRs. There is no head of revenue. There's no head of marketing. It's a content person and two SDRs, and those SDRs should be booking meetings for the founder and the early stage team.”

“Um, as these SDRs start generating meetings and pipeline starts to build, then yes, hire two sales reps. Never hire one, always hire in pairs.”

“There's no amount of money you can give a partner to motivate them to represent you. What's going to really motivate them is helping them sell more of their own product more quickly.”

“partners are the best source of M&A activity. Companies are not sold, they're bought, and those that have the most intimate relationship with you are likely the ones that will acquire you down the, down the line.”

“There's a huge, huge market in the M and the M think of it like 10 employees to 2000 employees. They have money. They have pain. The small business products don't solve it. The enterprise companies don't solve. It's too expensive, too hard to put in.”

“the investment we make on our upper market, 202,000 segment, we have these features that we add that we can kind of subside. We're making money. Yes. And then over time, our MO is we pull those down to lower tiers all the way down to the free tier. And so it benefits the fact that we're in the kind of upmarket market.…”

“the reality is word of mouth is not a function of how much revenue you're making from a customer. Word of mouth is based on how many people love your product that are out there in the world. And it's much easier to do that and get that mind share, uh, versus, so lots of companies focus on like share of wallets.”

“the one thing we miss is that LTV as it's currently measured is based on our current churn rate and current market dynamics. Here's what a customer is worth that we sold right now. But if you've been out for a little while and you're like, oh, maybe we might add another product and here's where the trend line is.…”

“So if you're in that situation and you need more runway, it's probably a big mistake to cut your sales and marketing costs because the payback is so quick that it might actually decrease your runway if you, if you don't spend on sales and marketing.”

“there's something magical about the thirty million dollar number, in my experience. Uh, when we can get products with thirty million dollars, they'll get to a hundred, right? So that thirty million dollar number really is important to us.”

“it is systems thinkers, not experience that wins. If you can think about how we architect that system, your job in the leadership team is not to pick the market. It is to re-architect the systems regularly. That is something that can be learned. Systems thinkers are the ones that do that best.”

“You hire a salesperson when your sales call and demo calls become extremely boring and repetitive because that's when you've figured out what your go to market motion is.”

“The most common mistake is you hired a VP of sales, they've cranked up your team, you have all these sales accountants, but your growth is slow. And the root cause of that is not that the sales motion isn't working, your product is not appealing enough.”

“I usually say if you have hit five to ten million ARR, you cannot get killed. You should be default alive.”

“a lot of research has shown That the success of a customer in retaining and expanding has a lot more to do with the sales process than the onboarding process.”

“The minute you start designing your PLG funnel with cannibalization in mind, you're cooked. Cause someone else is gonna cannibalize you.”

“now I think that we're at a different time when people want it bundled back together again, and the cycle is just going to keep continuing. I think right now, uh, I don't know that you could do what we did. Uh, yeah, I think there, it will happen when there is a great unbundling again.”

“If you don't ever want to get acquired, never open the door to anyone. Because, because here's, really, honestly, if you open the door and let one in, you have to bring your executive team in with you eventually, and once everyone gets in on that, it's very tough to back down after that.”

“Investors are hoping for a hundred percent growth at a hundred million ARR. That's what you can back into. Today, and it's crazy, investors want a hundred percent growth at a hundred ARR.”

“Like it's, it's hyper risky to hire a head of sales, even a stretch one before you have two reps that hit quota because a head of sales job is to hire reps three through 300, not to create product market fit, not to create the playbook, but to take a really rough playbook That's, that it's not really clear why it's…”

“even if you don't ship another feature this year, you can go back, and you can upgrade your support next week, and you can do some of it next week, and you can do over four to six weeks, and your MPS will go up, your sales will go up a little bit, Your NRR will go up, and people will just be happier”

“Even if they're a stretch VP, even if they're, this might be their first VP role, if they don't have one or two queued up, zero, uh, approaching zero percent chance they make it.”

“If they don't have anyone good in 30 days, realize by day 60 you may need to move them out, as painful as it is, right?”

“There's a lot of, like, basically, as these funds got bigger, they had more fee income. And so they could feed more mouths. And they would hire younger people and say, you have a checkbook. Like, you don't have a big checkbook like I have. Like, you know, the part, the general partners could write 20, 5000, hundred…”

“And what we have seen in Europe quite a bit is companies that became, you know, regional winners, But then the, the global winner came in at some point and kind of steamrolled, not completely, but, you know, eroded their market and stopped them from growing.”

“Because if you work with one of those folks, and they have a bad reputation in the industry, they can absolutely sink, sink your fundraise on the spot. Because there are people in the business who are not trustworthy, who run around with shitty deals, who generally don't really add any value. In fact, they can be a…”

“I think here it's really important when creating a category, it's actually good to have some, some really strong and good competitors. I actually think it's, it really helps to, you know, you can basically use some of their VC dollars as well to eventualize the space to, to create more awareness about, Uh, about the…”

“we all, we all just really start with a 10 X feature. One little thing that matters to a buyer that someone else doesn't do or ignores or doesn't have time to do anymore. That's what matters, not, not immediately building, being irreplaceable your first year. It's not going to happen.”

“Your first, the sales reps you hire as a CEO, you have to be willing to buy from them.”

“Finally, something we did with Pigment was to hire very senior talents day one. And I can tell you that this is a very big accelerator as well of growth for two reasons. First of all, senior people, they have their own network, so they are going to bring also, you know, the next wave of customers. They know the…”

“And it's not, Uh, AEs, so people closing deals that are, uh, driving, you know, the figures, the growth, but it's the SDRs, and especially SDR outbound, which, uh, will, uh, you know, generate, uh, new leads on top of, uh, the leads that will be generated by, uh, marketing.”

“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 impossible in enterprise because it tends to be backloaded.”

“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 with them? Go find something else to figure out.”

“Create your own agency or your own services org. Charge for it. Charge market rates. Maybe even a little more than market rates. Uh, actually, not maybe. Charge more than market rates, and then build a partner network.”

“If you have an efficient sales and marketing engine, try to spend more on it, not less, and try to save money in other, in other places.”

“If you can't become default alive, then try to become default investable”

“every company has five to 10% or maybe even more of people on their team who are just not performing as well as the rest. There is just no company where everybody is at the same level. So, um, just consider letting go, like, the, the bottom five to 10%. In the, in the sales team, it might even be, uh, the bottom 20%.…”

“move on from any VP that isn't amazing. Um, I think this advice has been given and repeated many times over, but it's doesn't make it wrong. If you've hired a VP, say it's marketing or any other function, and if he or she isn't absolutely awesome, uh, after a couple of months, then you know, That you have to let that…”

“literally move out your bottom 10%, and your revenue will literally go up in less than one sales cycle.”

“a great VP of sales should make an impact in one sales cycle or less.”

“just remember time never turns a mediocre VP into a good one. It just never does. And especially never listen to your VCs or investors that tell you this.”

“I've never seen a single VP of sales succeed that didn't bring in one or two good people with them immediately when they joined. Never seen it. Not once.”

“I'd rather have an expert in my product that's a decent closer than an amazing closer that doesn't understand the product. They won't close anything until your brand is just, is just mega.”

“it's a terrible sign if 80% of your deals close. It means you're doing no marketing. It means you're literally doing no marketing or outbound if 80% of your deals close.”

“there's no freaking efficiencies in sales in SaaS. Like, you get engineering efficiencies. Everyone can use your same code base, but you barely get any efficiencies in sales once you hit a billion in ARR, and I don't think too many people here hit a billion in ARR. It is linear.”

“if you can look in your business and I know everybody on this call can and say, if I had 10 more of him or 10 more of her, how this business would grow exponentially faster than you really do believe that talent drives your business grow. And that's an easy way to get to the core of what drives it is to go. If I clone…”

“I set the target with 90% confidence that we're able to hit it.”

“I think the reason most are burned by them is just because they try to go after them too early. They're like little kids on a soccer field. They go where the ball is, and if you're just starting out or you're sub hundred million dollars, you're not the ball yet.”

“Before a hundred million, it's just a distraction.”

“you could look at the largest software companies on the planet that are headquartered right down the street from here, how much of their revenue comes from product A? And how much money and chaos that they still have Decades later, focusing on all these other products that produce less than five percent of revenue.…”

“a free peer is a lot more valuable than a free trial, right? And there, there's a lot of debate about this and every business is special, but for me personally, I come out very much in favor of a, of a free peer. And if you look at some of the successful, um, some of the patterns from successful modern infrastructure…”

“When you do category creation, your high order bit is getting the word out about the entire category, right? And so, you know how all startup CEOs end up saying whenever a big company enters your space, oh, this is great validation. Well, in category creation, that's very much true, right? Because the high order bit,…”

“And there are really only two ways that you can protect against that. And they're not mutually exclusive, but unfortunately some of them end up being hard to retrofit onto your business, um, kind of in, in, in, uh, after you've started the company. But the first one is of course, licensing, right? There are certain…”

“There are certain product categories that are very, very sticky where the half-life is very long when there's really only one chance for you, uh, to build a company in that space. And that's when you have a platform shift.”

“When you're in an infrastructure company, you always exist on the, uh, the build path, right? In the enterprise IP buy versus build, right? If they don't go down the build path and want to build themselves with their own project, Like, you don't have a play. Like, if it's on the bypass, they want to buy an…”

“You don't disrupt a market by hiring the, the people from the legacy vendors and hoping they'll figure it out. You need fresh thinking, and so really what that means is you hire sales athletes, exceptional sales talent, That probably doesn't know anything about your market.”

“We have models, and our model says that only 50% of reps can meet their quota. That's how all the numbers make sense, and that's how we don't pay out too much commission, and we achieve our target as a company.”

“What this organization does is they say, here's the reps number, and the manager has a 105%, and the directors have a 110%. They are betting for their reps, and what that shows is this wonderful environment where people feel like they're set up for success, that they're expected to win. And the psychology of someone…”

“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 going to delegate it to somebody who doesn't run all four.…”

“So we ended up charging based on the buyer. For features that are used by an individual contributor, we put them in the open source code base. For features that are the focus of an executive, we put them in the highest paid version. That works really well because individual contributors are much more likely to…”

“for product-led growth to work, you do need a somewhat similar, um, set of best practices and needs by your customer.”

“And then, by the way, if customers complain about price, that doesn't mean the price is too high. It is too high when they abandon you. If they complain and they don't abandon you, in a weird way, they're confirming that your pricing is pretty good.”

“So the infrastructure-ish SaaS company, they intend to have around 20 to 30% margin, but if you go to end-to-end application, they tend to have more than 70%”

“As an early stage company, end-to-end apps is much better way to go to market, especially because you have more consistent and predictable sales and marketing motion, and also you can control the entire sales process.”

“So, um, what I found out was if you become a truly, um, you know, one billion dollar plus platform company, you really need a killer application by yourselves.”

“The investor really likes the platform story to be told, and you can keep talking about the platform for the right audience, but that's not how customers will purchase or fund the project.”

“Having customer, if you have enough trust with your head of customer success, have them have to accept the customer. This is the only hack I've seen. Not that the commission is delayed until deployment or, or renewal, but CS has to accept it.”

“So the business models were not robust, uh, in the sense that really, it was really selling services masqueraded, uh, as, uh, software.”

“You know, you can't really play with licenses and expect to win. Um, it, it, I, what I've seen is it doesn't work. Um, people just don't like the fact that you have, you know, um, polluted a license or you're not setting the right expectations. Uh, you have to innovate and you have to deliver services on the cloud.”

“If you, if you don't have those two AEs and you hire a VP of sales, 80% of the time it doesn't work because there's nothing for them to work with, right?”

“The toolkit is roughly the same for every startup at a given ACV, at a given price point. So make sure they've sold in cloud, in SaaS at your price point, ok? Otherwise, don't fall in love with them.”

“What makes them 10 X, and it took me a long time to figure this out, is that, um, they can change their playbook. 90% of sales reps, and this works out the bigger you get. They sell exactly the same way.”

“I've found that in true enterprise, like real enterprise, the founder is often the VP of sales until ten million.”

“basically a hundred X ARR startup has to at least quintuple next year with high quality revenue, at least quintuple, right?”

“We're using a sales comp plan that was invented in the 19 eighties, and it's causing our customers to utilize their licenses at a lower rate, and it's causing revenue contraction.”

“don't work on sustainable moat, in my opinion, at Series A, but around Series B and Series C, build the moat. Know what it is. Build the moat, and sometimes it comes at the expense of growth, and that's ok.”

“I have product market fit when I have a million in revenue. I could not disagree more. That's market message fit. Congratulations. You know how to sell. Doesn't mean your product works.”

“I think the risk with that is that the pro rata and a lot of risks and subsequent rounds just gets bigger and bigger and bigger.”

“try and purge from everybody at your company's vocabulary Uh, the phrase, um, exit, or the word exit. It's not an exit. It's the starting point. There might be some people who aren't in your company, some investors who, uh, need a liquidity event, or they, they need, they need to leave. They're, they're gonna go off…”

“They always make the mistake of choosing the domain expert. Um, I would say you should almost always choose the sales expert. A good salesperson, a good AE will learn your product, will learn your market. That's what they've done their whole careers. Trying to teach somebody who's never done sales before, who just…”

“If you have a developer marketing program, scratch that. If you have a developer sales program, scratch it, because the moment you do that, you'll actually repel them.”

“You know, you have an exit and the next day, you know, you start a company, you're second time CEO now. And just psychologically now everyone thinks you're an expert on everything because now you're second time CEO. So even though you are really the same person, but just like, you know, the, so that, that does make…”

“That doesn't work anymore, because if you just go to go to the someone who's a decision maker, And unless you have bought buy-in and already ground up adoption from developers and the practitioners, no decision maker wants to give a tool or a product to their teams to go and use it.”

“Never do things to gain optionality. Optionality is bad. You need to really have a purpose-driven life.”

“And the number one reason why a VC will pass on your business is that they don't like your team. This is especially true for seed and series A deals.”

“The most non-obvious clause to negotiate is the amount that you're supposed to reimburse the investor's legal counsel. You're actually doing your investors a favor by negotiating this. This is an actual win-win to negotiate. The time it takes you to go from term sheet to close is a function of how many dollars there…”

“it's universally applicable that you're getting paid less for producing the same, depending on where you're located.”

“our thesis was really obvious in retrospect that you could dramatically drop tack by using consumer-like marketing techniques, inbound marketing, content marketing, freemium to get to these people.”

“And whether you're selling, I think to the fortune, or you're selling to a two person startup, I think freemium's the way to go, uh, in almost any model because no one wants to talk to your sales rep anymore.”

“it used to be in the old world of IT, you had these classic build versus buy decisions. Are we going to build something? Are we going to buy it? Right? And now it's become build versus die. Because if you aren't building software that answers your customers needs and your competitors are, there's a Darwinian evolution…”

“It's not a strategy to say, I'm only going to hire these like, you know, top one percent, you know, 10 X developers, and that's how I'm going to build my company. The strategy is how do I take a wide variety of engineers and make them work together as a team to get, to get consistently great output that's not hinged on…”

“there's a semi-famous quote that, uh, but cash is a fact, profit is an opinion. Uh, I feel the same way about ARR and churn, that ARR is a fact, uh, churn, And churn rates are an opinion.”

“So it's not a valuation driver. I now think of it as a, 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 money.”

“bottoms up is great... But at the same time it's, you know, it's probably not enough in most cases to provide durable growth. For the next 10 years, right? If your aspirations are to become a billion dollar plus revenue business, like it's very unlikely”

“and as long as you're even at a million and a half in revenue, whatever that OT, the on target earnings, The total amount you pay him or her, as you can see in the match, he or she will pay for themselves.”

“But I think, actually, of all the bad hires you can make, VP of sales is the worst because it's far worse than no hire at all, right?”

“whether you're doing poorly or well, if that person can't come in and increase the revenue in one sales cycle that comes out of them, it is hopeless. Right? There is no excuse, because either they're going to do a better job with what you have or not.”

“As long as your deal size isn't like a million dollars or more, it's about a million and a half in revenue. Ok, and a million and a half in revenue, You've probably got at least a hundred customers, 50 customers, 80, you've got a statistically significant number of customers, you've been at it for a little while, ok?”

“there is a non-zero value for those customers beyond the LTV around what other things that we don't exist yet in the product portfolio that we will be able to sell them once we have them as customers. And I think that makes the math more interesting in terms of how much you're willing to spend to acquire customers. Uh,…”

“is there some fragility in our supply chain? Yes. But I would argue that fragility is really in this, Uh, in the area of information technology, information access rather than in physical access because the goods and services exist. And as soon as there's demand, supply gets there.”

“the backdrop of global pandemic change is so enormous that you can kind of sneak in anything you want. And we see, uh, I see that talking to other CEOs today, not my customers, just like, There's essentially a group therapy SAS CEO round table. And it's like, oh, that reorg that we've been sitting on for six months…”

“Let's focus on people's comprehension. Let's focus on whether they want to do this thing or not, and less on the friction. You can make it trivially easy and remove every bit of friction from some process, adding an app to a channel in Slack. Let's say, but if no one knows what, what that means or why they would want…”

“at the end of that time period, if it has not gotten remarkably better, the person needs to go. And you need to be willing to take the hit to revenue or product delivery or whatever it is that that person was so amazing at, but I guarantee you the short-term hit is so worth it relative to the long-term malaise that…”

“And then raise your prices every six months. Go ahead and double them until you're at the upper end of reasonable. You'll know you're at the upper end of reasonable when people on the phone Start asking for discounts, 25 to 50% of the time, right?”

“I don't think this is a problem that's gonna be solved by cyber security tools. Ah, I think that this is a problem that results from poor privacy engineering on the part of SaaS application companies over the last decade.”

“And I think that the big learning with SAS, your internal team will never be able to compete with the SAS product. Never. It's hopeless. Like, if the solution is successful, the team will scale, and maybe today they have two engineers, but in two years they will have 50, while you will stay with, like, a limited…”