Here’s what Top SaaS Founders have to share!
In the past few years, SaaS companies are facing a wallop like never before. In quick succession came the pandemic followed by a domino effect of Geopolitical instability, spiking inflation, rising rates of capital, a fall in SaaS multiples, a funding winter, cracking of the whip on profitability, and a barrage of emotions following layoffs.
The US alone has seen 60000+ layoffs and social media laden with messages and pleas for support. Analysts opine this is just the beginning.
If you are a Founder of a SaaS company, there would be a lot going on in your mind. According to the OpenView Partners, SaaS Benchmarks report an interesting finding, “At a high level, our data shows what everyone has already known—companies are slashing their budgets to generate optionality in the future. However, we expected that companies with short cash runways would be cutting heavily and companies with longer runways would be insulated. The reality is an overwhelming majority of respondents are slashing spending regardless of cash runway.”
The need to keep the eye on the prize is more critical than ever. Fitbots went about asking Top SaaS founders, what they are doing to navigate through this storm with a calm demeanor on what their judo moves are.
We asked them three questions:
Lempire is a group of passionate and curious individuals who have a very healthy obsession with building the world’s finest products and helping entrepreneurs worldwide grow profitable and successful businesses. We’ve all heard of Lemlist! That’s right, the outreach platform that helps you start conversations that get replies from your prospects. Sales teams of all sizes, startups, lead gen agencies, and ambitious entrepreneurs use Lemlist to grow a profitable business and build win-win relationships with their customers.
MRR / Growth Rate / Churn / EBITDA / CAC / LTV / ARPA
During a recession, more companies are facing new problems. That means that you have more business opportunities as you can help them solve these new problems. Instead of slowing down, this is when you should invest heavily for your future growth.
I plan in decades but make decisions in seconds. Always remember that Growth = speed * momentum. Speed is how quickly you can go from idea to execution. Momentum is how the market reacts to the solution you've created.
Almabase is on a mission to make quality education affordable to everyone by helping schools increase their fundraising efficiency. Their all-in-one engagement and fundraising platform helps Alumni-Relations and fundraising teams to boost engagement with streamlined programs.
Your priority 1 is to make sure your company does not run out of money. The economy is cyclical and things will get better so just stay alive until then.
1. Create a strong support network of founders and mentors
2. Celebrate small wins along, to not be miserable, with all the ‘what-ifs’.
RippleHire exists to make recruiting effortless, human, and delightful. RippleHire is a cloud-based hiring platform that was founded with the mission of enabling enterprises to hire great talent effortlessly. Their dedication to the craft has seen our customers win several national and international awards. They are known for a category-defining employee referral product and a deep talent acquisition platform.
At Ripplehire, we are focused on finding accounts that are seeking to leapfrog through transformation. Companies that struggled with hiring extensively will invest in improving core systems and channels of hiring. Especially when they have downtime.
We are focused on hitting more accounts this year expecting conversion ratios to be lower due to budgetary reasons.
Customer success helps build a strong foundation for growth. Focus on helping customers succeed and have them advocate for you in the ecosystem. This helps regardless of market conditions but doubly so during a recession.
Have a founder buddy with whom you can check in on honest transparent terms weekly. This structure helps you stay sane emotionally. My mantra for good and bad things is that this too shall pass. Helps me stay grounded during good times and hopeful during tough times.
Co-Founder & CEO, Vymo
Vymo is a personal assistant app for enterprise sales/service teams. It predicts what a rep/manager should do next, detects whether this has happened, and links this to downstream metrics to drive better predictions. Vymo has helped some of the world's largest enterprise field teams get almost 2X productivity uplift; resulting in 30-50% higher sales within 3 months of launch.
Never waste a good crisis, they say; slowdowns impose constraints that help you refocus on your core, improve operational efficiency, and think out of the box.
1. Refocus on your core
a) We have doubled down on our core markets and industries and are going deeper into our solutions, trying to be more relevant to our customers.
b) Speaking of, we are expanding sideways within our existing customer base and figuring out how we can own more of their stack and unify journeys across the spectrum [Vymo has a net revenue retention of > 140%].
c) In the spirit of being more aligned with our customers, we held our first customer event - “Nudge 2022”, where our customers shared their vision for the year and also got to learn/share with their peers.
2. Improve operational efficiency
a) We have focused on cloud/API optimization and through engineering ingenuity, have managed to reduce costs by as much as 40% on some fronts directly impacting our gross margins.
b) Similarly, we have found ways to reduce support tickets through automation which has saved our bandwidth tremendously and also crashed our resolution times to 1/3rd.
c) We have realigned teams around micro-missions to ensure greater cross-functional collaboration. These SWOT teams are being made accountable outside of their functional OKRs.
d) Aside, an ongoing effort is to also relook at our sales execution to improve conversions across the funnel and really sweat every lead and opportunity.
3. Think out of the box
a) We are revisiting our acquisition channels and investing in ways to accelerate deal closures (for example, check out our ad in the Economic Times).
b) We are also investing in our brand to set up for 100% inbound and category leadership and hence working on building our narrative through different mediums.
c) We are creating mini-offsites called Vymo Shots; around 20 excursions such as breakfast tours and birding trips in and around our Bangalore base led by volunteers with the aim of getting the team together informally.
Every little thing counts. Make sure you keep a close watch on customer success metrics such as Adoption and NPS and get more face time with key stakeholders.
This is not the new normal; financial cycles are just that - cyclical. And for the most part product/innovation and financial cycles run independently of each other. It’s just that people have short memories and tend to forget what happened the last time. Tune out the noise and focus on building a sustainable business. Some of the best, most renowned SaaS startups like Dropbox, Slack, and Nutanix were founded during a slowdown.
Double down on what’s working. Figure out what experiments have worked and double down on them rather than spreading yourself thin. This is not a time for you to be doing too many things, but doing your core functions and activities cheaper, faster, and better. Also, a great time to revisit some of your assumptions on everything from go to market to engineering.
Stay close to your customers. This is a great time to build a real, integral relationship with your customers. They are in the same boat as you are - figure out what you can do to help them tide through this crisis.
Thank you to all for your great advice to the SaaS Community. If you have some great practices to share, please drop an email to vidya@fitbots.com
Vidya Santhanam is the Co-Founder of Fitbots OKRs. Having coached 600+ teams, and conducted 1000+ check-in meetings, Vidya likes writing about Metrics, high performance, and leadership.
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