Auren Hoffman founded Rapleaf in 2006, and served as its CEO until 2012, when he spun off data platform LiveRamp as a separate company. After LiveRamp’s acquisition by Acxiom in 2013, he’s onto his next startup, Siftery. In this panel moderated by BJ Lackland, CEO of Lighter Capital, Hoffman discusses five things he’s learned from his previous startups that he’s going to nail this time around.
DataFox will summarize the SaaStr 2016 panels. If you miss the tactical theater or strategy stage, are networking on the ground, or didn’t get a chance to attend this great conference, we’ve got you covered.
Special thanks to Jason Lemkin of SaaStr for putting on this conference and giving us the chance to publish these summaries.
In a nutshell:
- Hire generalists, not specialists, in the early days.
- Choose a small, fast-growing market segment to focus on - no one will pay attention to it until you’re already the dominant player.
- There are two types of salespeople: product-oriented and relationship-oriented. Decide early on which type you want on your team.
Learning 1: All-around athletes beat position players early on.
Hoffman, like many other panelists, made the strong case for hiring generalists early on. Especially if you don’t know what problem you’re solving, it doesn’t make sense to hire people who are only good at solving certain types of problems.
"Almost every one of our 200-plus hires at LiveRamp had less than 5 years of experience."
LiveRamp hired young, hungry people, who were gradually promoted as they learned, grew and gained more experience. But it’s not easy to find the late-round draft picks who turn out to be superstars.
Once you’ve worked with someone, though, you’ll know whether they’re a superstar - and you should work to keep the winners.
Learning 2: Put yourself in a defined box.
Be very clear about what you will do and what you won’t do - don’t try to be all things to all people, and while A/B testing tactics is encouraged, A/B testing strategy isn’t. Be clear on who you are, what you’re doing and where you’re going.
"Publicly announcing what you won’t do gives your business a lot more clarity moving forward."
Learning 3: Focus on a small, fast-growing market that you will win.
If you choose an under-the-radar market, you’ll have the space to build a monopoly. And if that same market is about to grow, you’ll be able to ride that growth. Hoffman recommended keeping three things in mind:
When building your initial product, can your startup get to $10m in revenue in the current market?
Will your startup be the dominant player in a micro-market?
Once your company can’t grow at 100% a year, is the team good enough to move into and dominate new markets (even if you don’t know what those markets will be)?
Learning 4: Product-oriented companies need product-oriented salespeople.
There are two types of salespeople: product-oriented and relationship-oriented. Relationship-oriented salespeople are the easiest to find - they’re the archetypal life of the party folks, and are helpful for complex situations in competitive landscapes. Product-oriented ones, though, will fire off 50 emails from their hotels instead of working the room at a happy hour, and while they’re just as competitive, they’re deep in the weeds of the product. Though they may not have a technical background, they’re well-versed in features and use cases. Product-oriented companies in new markets, Hoffman argues, need product-oriented salespeople.
Learning 5: The future of enterprise software is in abundance.
The number of software vendors that a company buys from has gone up 10x in the last decade, while the number of buyers within an enterprise software company has risen 12x. That’s a huge market - and it’s spawned a number of micro-markets to exploit.