SaaStr 698: How to Navigate Strategic Change for Growth with SaaStr CEO and Founder Jason Lemkin | The Official SaaStr Podcast: SaaS | Founders | Investors | Podwise
This podcast provides insightful strategies for sales teams, particularly in transitioning from a one-person sales operation to a comprehensive department, emphasizing the priority of hiring a VP of Sales with hands-on sales experience before Account Executives. The podcast highlights the importance of hiring experienced salespeople in technical sales and addressing challenges in multi-product strategy. It explores the strategic decisions between horizontal and vertical expansion for generative AI startups and the challenges faced by pre-seed and non-privileged founders in securing funding. It also covers topics such as transitioning from founder-led sales to a scalable sales team, aligning investment strategies with long-term goals in venture capital funding, and the potential impact of the IPO window opening up again in 2024 on startup valuations.
Takeaways
• Prioritize hiring a VP of Sales with hands-on sales experience before Account Executives to establish a sales process and generate revenue.
• Hire experienced salespeople in technical sales to provide expertise and support to the sales team.
• Address TAM exhaustion to sustain growth by considering expansion into new product lines before reaching this point.
• Identify your horizontal product's verticals and industries where it excels and lean into them to gain momentum.
• Pre-seed founders should focus on getting revenue as quickly as possible to increase their chances of securing funding.
• VC funding is not a fair system and favors founders with certain advantages, but it's crucial for pre-seed founders to focus on outliers, like having a strong team, large market, disruptive technology, or high MRR.
• Founders transitioning from founder-led sales should have a clear career path for SDRs and consider running an AB test to compare the performance of an experienced AE with an SDR promoted to AE after a year.
• When aligning investment strategies with long-term goals, consider the importance of an IPO path if seeking VC funding, and explore the middle ground approach called "Pease" for liquidity through acquisitions.
• Founders in vertical SaaS should stay involved in sales until the company reaches $10 million in ARR due to the complexity of the market and the need for deep industry expertise.
• The potential impact of the IPO window opening up again in 2024 may bring more liquidity and investment opportunities, but valuations will likely remain mediocre with only marginal increases for exceptionally competitive or high-growth companies.
