“Build a great product, but don’t stop there - build a great organization.” - Jason Lemkin, SaaStr Founder
As a Gold Sponsor, DataFox was proud to participate in SaaStr Annual 2017. This year’s event drove over 10,000 attendees and included speaking sessions from thought leaders such as Tomasz Tunguz and Aaron Ross, as well as DataFox customers like RainForest QA and Twilio.
The goal of SaaStr? Bringing together business leaders to share and learn exactly how to bring a company to 100 million ARR.
SaaStr did this in two ways, the first of which was -- giving those who had done it before a stage to walk through their learnings. Instruction was the second -- industry experts had a forum to walk through how they are achieving success. Each room was standing-room only, packed with waves of industry experts frantically taking notes and photos of slides.
Here are a few takeaways from high-growth companies at SaaStr:
1. "Diverse Teams Win" - Immigration Ban is the SaaStr Villain of the Week
The immigration ban was felt at SaaStr 2017, where multiple panelists and speakers indirectly and directly addressed it. Jason Lemkin, Founder of SaaStr, set the stage by addressing it directly in his opening remarks.
“My simple answer: it’s not okay,” said Lemkin. The issue resonated personally with Lemkin, whose co-founder at a previous company was a Syrian refugee.
The ban would have a profound impact on the software technology industry, where a significant portion of the workforce and leadership is comprised of immigrants. The proximity of the ban’s impact hit home when Lemkin announced that 55 ticket-buyers or sponsors couldn’t attend SaaStr because of the ban.
Gender diversity was another theme, highlighted by Bessemer Partner Ventures’ as a benchmark for a successful company. Byron Deeter, Partner at BPV, stated directly: “Gender diversity makes a better company.”
Deter’s point was especially salient, given the male-heavy audience. Twitter demographic analytics of #SaaStrAnnual - courtesy of our friends over at Klipfolio - illustrate the lopsided attendance.
Addressing gender diversity (or lack thereof) head-on, Promise Phelon, the newly appointed female CEO of TapInfluence, struck a nerve with the following question:
"Have you all noticed that I'm not a 27-year-old white male from Harvard?" Her comment was met with applause and undeniably stuck out as a high point of the event.
2. Artificial Intelligence - it is the future of SaaS
Participants highlighted AI as a key driver of the industry’s future. This was evident in conference sessions (there were three on AI, specifically) and was reflected in participating sponsors.
But why? Different applications of machine learning and natural language processing have the potential to help professionals become hyper-efficient. From acting on better buying signals to real-time sales enablement, AI will revolutionize the way SaaS organizations grow.
A number of SaaStr sponsors in the AI space help customers increase employee productivity and decrease time wasted on menial tasks.
Chorus, a newly series A funded company, uses voice recognition and AI to help sales teams optimize their phone calls. They do this by identifying conversation pieces that see great success.
DataFox uses AI to power relevant, hyper-targeted company insights. Revenue-focused business teams use DataFox to find and close deals without interrupting their workflow.
RiskIdent leverages AI for fraud prevention. Using customizable rule sets and fraud pattern recognition, millions of transactions are automatically linked and evaluated in real time.
3. Lessons in hiring early on - Hire pioneers (second-in-command), not settlers (executives)
In the conversation about growing successful SaaS businesses, it’s inevitable that hiring will be a topic of discussion.
“Founders found the company, it takes a village to build it,” said Tracy Young, Co-Founder and CEO of Plangrid.
In “The Best of the Best: YC SaaS Founders” session the panelists (including Young) offered some advice on how to hire: don’t fall into the trap of trying to go only for the top executives.
“The more senior someone is, the longer it will take for them to onboard and make an impact on the organization,” said Joshua Reeves, Co-Founder of Gusto. “You have to help them shed their previous role. We plan for them to take 5-6 months.”
Not only are top executives expensive and take longer to train, they have also a “been there and done that [mentality].” The panelists agreed - they would sacrifice experience to find people who are motivated to learn and are driven to grow into the role.
“You have to hire for a presence of strength that fits with your goals,” said Evernote CEO, Chris O’Neill. “Most people look for weakness, and I think that’s a failure.”
The importance of a “pioneering mentality” was echoed throughout the sessions. O’Neill emphasized the value of trying new things but explained that perhaps more important is to recognize and accept failures. When describing Evernote’s scattered marketing efforts (e.g. selling socks and computer stands), he explained that they had lost their vision. However, like anything else, it was a learning experience.
“It was a strength to try it, but it would have been a weakness to not acknowledge that it was a failure.” said O’Neill.
O’Neill was speaking specifically about Evernote’s future -- moving from a static note taking tool to a dynamic workflow tool. However, his sentiments echoed what everyone felt about building a team (and company):
“We think the future is in team collaboration.”
4. Evolving and Scaling - What growing pains look like
Every founder wants to know how quickly they should be growing and how to scale appropriately.
“It’s not like going from junior level hockey to pro - each phase requires a transformation,” said Baga. “When you think you have found product-market fit, you have to come back to this stage again. In fact, you can go through this [process of finding product market fit] multiple times.”
Michael Pryor’s Q&A session felt like a case study on what growing pains founders should expect when approaching scaling and being profitable.
“[When we started], we just had a mentality of ‘let’s just try new things,’” Pryor said, when describing the inception of what would later become Trello.
In telling the story of Trello, Pryor touched on relatable pain points for any high growth company. Pryor had the audience roaring with laughter when describing their naming convention origins. They had the product Trello, but no company name. After a rigorous (but ultimately fruitless) brainstorming session (the best idea that emerged was a manatee mascot and a company name of “Planatee,”) he resorted to an instant domain search.
On a more serious note, Pryor discussed the pains of pricing and how to make your company profitable.
“When we built Trello, we didn’t even think about monetizing it,” Pryor said. “We said 100 Million users and 1% would pay.” All along, thinking 100 million users seemed crazy.
He talked about the constant balancing act of transformations and keeping your customers and employees happy. One such painful transition was when he decided to reinvest in Trello. His employees had become accustomed to his profit sharing model, but reinvesting in Trello was the next necessary step to scale. The result? Pryor was most proud to say everyone was able to make money in the end.
As we look to SaaStr Annual 2018, what can we expect?
Feeling part of something bigger and part of a movement was something that was clearly felt by those at SaaStr. Just walking down the halls, conversations about the sessions were everywhere.
As SaaStr grows, more and more companies will see value in bringing other team members to learn about the challenges facing other SaaS companies and help tackle their own. Like the companies in attendance, the themes and issues facing SaaS organizations will continue to evolve.
To see a great example of a high-growth company at SaaStr, check out Twilio’s Road to IPO.