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Building a Killer Company in a Nonobvious Market

Aileen Lee, founder and managing partner at Cowboy Ventures, leads a Q&A session with three CEOs who have cornered under-the-radar markets: Andy Wilson of Logikcull, Scot Chisholm of Classy, and Daniel Chait of Greenhouse. The four talk funding, metrics and culture.

DataFox provides summaries of every single panel at SaaStr 2016, all published within a day of the panel itself. 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.

View all SaaStr 2016 panel summaries

Special thanks to Jason Lemkin of SaaStr for putting on this conference and giving us the chance to publish these summaries.

In a nutshell:

  • Build your company around a mission, not a product.
  • Keep an eye on SaaS metrics like CAC and LTV, but those aren’t the end-all, be-all.
  • Be prepared for funding to dry up. It’s probably going to happen.

The companies

  • Logikcull (Andy Wilson) is an 11-year-old firm that helps law firms, governments and nonprofits decrease litigation costs. It’s a service company that transitioned into a SaaS one, and it’s growing revenue at 3x a year.
  • Classy (Scot Chisholm) is an operating system for social impact that helps nonprofits scale and keep donors engaged. The company started as a charitable pub crawl, and now boasts 150 employees.
  • Greenhouse (Daniel Chait) is a four-year-old, Series C recruiting tool that helps companies optimize the hiring process. It quadrupled in almost every metric last year.

Q&A

Q: Was fundraising easy?
A: All said no. The secret is to speak the language of the VCs - to figure out the one metric you’ve been successful with, and craft your message around that.

Q: Have things gone the way you expected?
A: Generally no. But the founders were able to keep a strong plan for the first few years.

Q: How do you interview for a culture fit?
A: You have to build a culture from the ground up first.

Q: How do you attract talent to these non-obvious markets?
A: You’re fishing in a narrower talent pool, but you should look for someone who’s genuinely passionate about your niche - not just as a passing trend.

Q: Should you follow all SaaS metrics religiously?
A: Two said yes, but one argued that early on, you don’t know LTV or CAC enough to make reasonable estimates. Once you scale, though, you can start looking more closely at those guideposts.

Q: What are some “special sauce” hacks that helped you succeed?
Chait: Center the entire company around helping customers do a better job at hiring. They read the research first, then built their vision for how companies should do recruiting.  
Chisholm: Start with the mission first, and from that, build a movement.
Wilson: Spend most of your time on recruiting and culture, and second to that, spend time on your customers.

Q: Are you prepared for the long, cold winter of dried-up funding?
A: All three agreed that founders should be prepared from day one to survive a funding crunch.

Q: Any advice you’d give to your younger selves?
Chait: Be more patient and thoughtful.
Wilson: Focus on CAC, LTV and other SaaS metrics.
Chisholm: Optimize for customer success, not for the rest round of fundraising; and focus on finding the right VC partners, rather than optimizing solely for the best terms.  

 

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