The Fork In The Road

A Marketer’s Perspective of This Year’s SaaStr Annual

 

Last week, I attended the SaaStr Annual. This now-annual event is equal parts inspiration and celebration of companies who have achieved $0 to $100M and beyond in annual repeatable revenue (ARR). In other words, the number one goal of (almost) every SaaS company. Before I dive into why every marketer should attend similar entrepreneur-focused conferences, here’s my version of ARR:

Despite what some people think, SaaS is not a business model. It is infrastructure and a delivery model. Companies who have been successful with growing ARR have several characteristics in common: 

1. The ability to implement and repeat with little to no customization - Customers may be able to customize or personalize aspects of your service through their management dashboard, but if your developers need to get involved in significant customization for POCs, you are running a custom shop and will never be able to scale.
2. Integration with other preferred and appropriate software - For example, an analytics company not integrated into SFDC and Marketo with plans to add more integrations soon needs to reset its priorities. I say appropriate because integration and partners must match your core value. Check out MobileIron’s partner program. It’s my new favorite partner ecosystem example because the choice of partners fits perfectly with the company’s core offering and value.
3. Have hired the right type of sales and marketing executives - Since I’m a little too passionate about this subject to cover it in two sentences, I refer you to Jason Lemkin’s excellent blogs How to hire your (First) VP Sales (And not screw it up) and Hire the Right Type of VP Marketing — Or You’ll Just End Up With a Bunch of Blue Pens with Your Logo On Them.

There are many companies that have billed themselves as X as a Service that don’t fit. As cloud has become more mainstream for large enterprise, many of these have moved on to referring to themselves as “cloud-based, on-demand.” 

So, why was a marketing executive like myself absorbing everything that was said that this year’s SaaStr Annual? Because marketing’s job is the work in sync with sales, not just send them leads through pneumatic tubes. Sales and marketing working harmoniously doesn’t mean marketing needs do everything sales wants. In fact, if this were the case, it would be to the detriment of the company. Sales and marketing need to have a “business first” approach. In other words, if I’m not watching everything that affects the business, I’ve failed at my job. 

A good marketing professional, whether an CMO or a product marketing manager, needs to understand corporate goals, including all aspects of sales goals, not just quota numbers. How does the product support what is being sold now and where the market opportunities will be in the future? Are the (sales development reps) SDRs delivering (sales qualified leads) SQLs that have a good chance of resulting in a signed – and implemented – contract? 

Yes, wading through a gaggle of entrepreneurs and SaaS executives is a very good way to spend a day. 

Where Founders Should Go After They’re Done Founding

It is rare to find a founder who is visionary and can grow a $1+ Billion organization. For every Jeff Bezos, there are 100s of founders who create very good concepts and then allow their companies to miss their true potential because they don’t know how to move beyond being the founder, CEO and company rudder.

The best founders know whether they are the right leader for the next stage, when it’s time to have someone replace them, or even leave the organization. The second best version is the founder who has trusted advisors who can provide this outside guidance.

For the founder who chooses to leave the company they helped create, their next step depends in part on what brought them to become founders in the first place. For some people, it is as if they have no choice but to create over and over again. For others, founding their first company was based on happenstance. For example, Engine Yard received the funding that put it on the path it’s on today because VCs noticed other companies were using it to build their technology. Wildfire Interactive was created after its founders experienced the painful process of trying to create promotions for Facebook.

Three options are available outside the initial company:

1)   Move into a technical or business role in a related business sector. Yahoo and Google have been known to hire former founders. A large technology company could be a good fit because the founder’s technical skills married with the personality characteristics required to develop and launch a company (determination, organization and confidence) makes these people more likely than their peers to prove themselves and move up quickly.

2)   If the VC who funded the initial company sees potential in the founder’s skills and creativity, an entrepreneur in residence position may be offered. This gives the entrepreneur the opportunity to assist other startup companies by providing insight and subject matter expertise. This also gives the entrepreneur in residence a needed break in which they can cultivate their next idea.

3)   An often-overlooked option is moving into academia. It’s unfortunate that this isn’t considered more. Just as some founders have an abundance of determination, organizational skills and confidence, others are much more interested in the process of creating and perfecting new things. These people will be more focused on details than the big picture. The same characteristic that makes it hard for them to decide what is the best business approach and stick with it makes these people good academics because they want to examine and reexamine every possibility multiple times.

For founders for whom it is not appropriate to remain in any role at their company, what comes next could be uncertain and an ego blow. Two important things to keep in mind: (1) whether you are currently in charge or not, the prosperity of the company you founded is bigger than you and it comes first; second, you can find success beyond one company.