Peter Lalonde

My saas.wtf newsletter just cracked the 2,500 subscriber mark. 🎉 These were the 5 most popular articles: 1️⃣ My Go-To SaaS Benchmark Reports: https://lnkd.in/eVwEqJPj 2️⃣ SaaS Valuation Myths: https://lnkd.in/e2sA_Bgn 3️⃣ Time to hit $1M ARR: https://lnkd.in/emmyt-Hy 4️⃣ Micro M&A for SaaS Startups: https://lnkd.in/e5sCK2mB 5️⃣ Cohort Analysis using AI: https://lnkd.in/ebAxhdma I hope you enjoyed the others too. 🙂 On to the next 2500 subs! #saas #startups #founders #kpi #analysis #valuation #ai #benchmarks #pricing #newsletter

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In the last 12 months, Rev has increased our close rates by 300% and shortened our average deal cycle from 100 days to 40. Here's the 3-step playbook we used to increase sales velocity (without adding headcount): BACKGROUND Since 2021, sales benchmarks in SaaS have trending down: - Win rates have dropped 18% - Deal sizes have shrunk 21% - Deal cycles are 16% longer We’re all working harder and longer in every deal for less money! Unfortunately, this environment is here to stay. So what’s a Sales Leader to do to generate velocity in this market? At Rev, we follow a process that I call “SLC” - for “Stalled, Lost, or Churned.” Here's how it works: 1. Convene a SWAT team of your GTM leaders (Head of Sales, RevOps, Marketing, etc). It all starts here. Without getting the right people in place who can impact change across the org, nothing matters. The team is going to meet daily at first to generate a new and valuable report (see #2); then they will divide and conquer to resolve the issues slowing down your GTM. 2. Generate your Stalled-Lost-Churned Report The key insight here is that a standard “closed-lost” report isn’t going to cut it. Instead, you’re going to create a new report of every deal that closed-lost, but also any customer that churned and any deal that “stalled” (i.e. where there hasn’t been a positive change of close-% within three weeks). 3. Map your sales cycle and attach to each step exactly HOW MANY and WHY deals stalled-lost-churned. The WHY is the hardest part — the simple answers in Salesforce will not be good enough. You need to scrub the heck out of the opportunity list to dig deep and figure out real “why” answers. For example:  “Customer went dark” is not a good enough reason. What was really happening in the deal when the customer stopped responding? Were they not impressed enough by the demo? Missing a key feature? Scared off by pricing? Did a key persona refuse to engage or fail to see value? Talk to your AEs and listen to more Gong calls. The answers are there. You just have to find them. 4. Assign each of the WHYs to a member of the GTM team and work through a meaningful improvement Are we missing a slide that speaks to a key persona? Mishandling a certain objection in the sales cycle? Is our order form sitting in procurement too long? Each SLC issue gets assigned to an owner and worked until it no longer slows deals down. Here’s an example: One “SLC issue” we found at my past company NetBase was that our order form was being sent to legal review by our customer 90% of the time. So we removed the legalese from the order form and referenced online terms and conditions with a URL. The result was our buyers only sent the form to legal 10% of the time! That was a savings of 2-3 weeks on 80% of deals! TAKEAWAY Want to improve sales velocity? Find out the real reason WHY deals aren't closing. Not just why you LOST deals. But why deals stalled and churned. Use SLC.

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Chatting to a SaaS CEO about the perilous growth journey to cross $100M ARR level. He mentioned the T2D3 model: 1) You reach $2M in ARR 2) Triple your ARR for 2 years 3) Double for 3 years $2M → $6M → $18M → $36M → $72M → $144M. 5 years to unicorn land ($1B in valuation). Sounds ambitious - but entirely possible. Slack crossed $100M ARR in 2.5 years.  Salesforce did so in about 4 years. These are the exceptions to the rule. The days of easy funding are over - burn rate matters more than ever. The 2 primary reasons I've seen for why it's so hard: Hard to hone in, identify, attract and convert the ideal customer profile Hard to economically build competitive features that materially differentiate With more detail: 1. Product market fit hasn't been properly validated before raising money to scale up. Trying to drive the car while building it. 3. Cost of customer acquisition (CAC) gets progressively higher as a company grows if reliant on channels like paid ads. Because they operate on a bidding model getting more reach costs more money. 2. Churn rate is too high. Acquiring customers cost-efficiently is hard enough, but doing so is only meaningful if you can retain and grow these accounts relative to the cost of acquiring them (CAC). 3. Once capped with the value per account (can only sell so many CRM seats to a given company due to a limited number of employees), the only option is to develop a new product. That takes the business back into product-market-fit territory, which is a high-risk playground. What makes T2D3 so tough is: Lack of predictability over new customer volume Lack of predictability over new customer value Lack of predictability over new customer retention. Good looks like +85%. Sustaining a reasonable CAC to lifetime value (LTV) ratio. A decent ratio is 1:3. The payback window (how long it takes to recoup the cost of acquiring a customer) is too far out, putting a strain on the growth rate. A decent payback window is 5-12 months. I like T2D3's split between market shaker & market maker so attached it. p.s. Check out my newsletter on my profile #growth #marketing #strategy 

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Consolidation is all the rage in SaaS. Don't confuse "All in One" in a mature market (RevTech) with "Master of None" in an emerging market (AI). ^ Yes, I realize there's a LOT of overlap there, but imagine workflows as mature and AI as emerging When a space is emerging (this seems to be especially true with AI) mastering product is hard. Focus is a super power. *Buyers - it's NOT your fault that this is confusing.* 1) When everyone calls their thing a "copilot" and makes the same claims... it's a lot. 2) Some functions from products sound the same. ex. "We pass something to ChatGPT and it generates text" NOTE: quality of output will be VERY different vendor to vendor. Maturity in AI tech is NOT the same as it is in workflow tech. Models change, inputs change, recipients change... it's not the same as a workflow where the task is the task. This is the BIG reason why product focus matters. Magic in a demo is VERY different than the maturity of workflows behind the scenes. How long have they been doing "AI"? Is this one of several models they need to upkeep? We're constantly testing and training models. Swapping them out against use cases with numerous variables being plugged in and tested. The workflows that the AI is housed in are important, and CAN be the difference makers when you're trying to make a decision on tech. But it's important to remember that when you are talking about AI products - if you build it and move on performance will not keep up. (PS. this focus on email quality is why I can point to multiple Lavender case studies with 20%+ reply rates) 3) Some functions from products are very different. ex. Ocean is different than Clay and Copy and they're all different from Lavender (That is a mean AI stack tho 😎) They're built for different problems... they just all happen to use AI. NOTE: It's good to explore what's out there. But, be sure... - whatever you buy actually maps to the problems you're trying to solve - you understand if it actually works for you (trials >>>) - implementation is clearly understood (Talked to someone that was 5 months in and they haven't sent a single email yet because of hallucinations... yikes) 3) Industry Maps are... vague at best Gartner put us (Lavender) in a "Cool Vendor" group and only one of the companies is remotely similar. VCs just lump "AI" and "Sales" into one big bucket Given the confusion in the space - my proposal would be to organize tools by the job to be done. Has anyone done this already? Would love to highlight others work here & help out where I can.

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The findings of this Sifted survey make VCs seem they're copying consultant memes when advising the portfolio: cut costs! improve revenue! = more profits! 🙈 💸 84% of respondents said they were under more pressure to prioritize profitability or revenue vs a year ago; 66% of respondents were told to cut costs. 🤝 Nearly 44% of respondents said that their relationship with their VCs has gotten worse in the last 12 months, while 27% said it had gotten much worse 👎 When asked how helpful VCs had been with things like GTM strategy, customer contacts, and marketing on a scale of 1 (least helpful) to 5 (most helpful), nearly 44% rated them a 1. Read more 👇 https://lnkd.in/eyRtBh4E

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Going from Zero to Product Market Fit is like getting out of a Bermuda Triangle For every direction that works out, an equal and opposite direction works too It is shocking how few get to product market fit Only 15 out of 100 SaaS companies get to a million dollars in revenue When you have PMF, it is an awesome feeling Everything is going smoothly for you It also feels scary and out of control You push one unit, and ten units of progress happen But when you don’t have it…. You push ten units of effort, and not even a unit of progress happens It feels like a Sisyphean punishment Moving a boulder up the mountain In the GenAI age, I hear arguments that go “The focus should be on the core functionality. Like how musicians concentrate on the music itself” This is clearly a faulty analogy Businesses providing playback formats (cassette tapes, CDs) are obsolete today Gen AI brings AI below the API No more does one need to stand up a team in ML Spend a few million dollars to “translate languages” or “transcribe accurately” GenAI now assures that Getting to PMF boils down to the basics - Do you understand the problem deeply - Can you build a 10x better solution - Can you execute & iterate faster - Don’t die in the process (cash) What has worked for you to get out of the Bermuda triangle?

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The average tenure for a PE/VC-backed GTM executive is 17 months. At this pace, you'll work for 14 companies over a 20 year career. Here's the 7 things you need to achieve your professional goals in this environment: 1. Foundational training on modern Go-To-Market best practices.  You have to understand how the world is moving - doesn’t matter how big (or small) your company is.  You have to understand the new basics and what you learned at Salesforce in 2005 won’t cut it.  2. Functional training in your role from trusted outside resources (your company will NOT have the means to sufficiently train you on anything but their industry and their product). 3. A group of peers you can bounce ideas off of, stress test new approaches, and help you avoid common pitfalls.  You can’t afford to make big bets without asking a few people that don’t work at your company.  You are risking your job and in some cases your career. 4. Regular, centralized access to the newest sales and marketing technologies so you know how to use them and whether they’re a fit for your team.  AI is happening NOW.  You need demos, you need to be testing, and you need to know what's happening. The world is changing RAPIDLY. 5. Centralized access to top tier private equity and VC firms managed independently of your current employer’s financing strategy. You need to be in the room where it happens. 6. The ability to negotiate executive compensation with assistance from the world’s leading experts. The smallest tweak to your equity agreement could have a 5, 6, or 7 figure outcome on your net worth. 7. A permanent homebase filled with people that care about you and are looking out for your best interests without conflicts or obligations to anyone else. A place whose incentives are completely aligned to your professional success. That’s what we do at Pavilion. That’s what we’re building. It’s not about any one course. It’s not about a Slack community. It’s not about a big event in Boston.  Or London.  Or Austin.  It’s about helping you live a meaningful and fulfilling career. It’s about helping you sleep better at night, knowing that a community of 10,000 has your back at all times. It’s about landing in Sydney or Barcelona or Kansas City or Salt Lake or Seattle and knowing you can instantly plug into a group of operating executives that are there to help and support you. It’s about looking backwards in 5, 10, or 20 years and saying to yourself, “All things considered, that was a great ride and I accomplished what I set out to do.” If any of this sounds appealing. If you’re feeling lost or alone or adrift. If you want help with your career and resetting your destination to maximize wealth creation, impact, possibility, and fulfillment. Well then - join us! If you want to learn more, DM me.

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44 Out of 45 SAAS Executives Couldn’t Answer This Question It literally can double your business, and PE companies use this secret to 3x companies in 3 years. The Question: Who knows what the average deal size of the top 20% of your customers? The Way to Answer it: Export your revenue data for the last 12 months into a csv. Look at the average contract value of the top 20% of your customers and compare the number vs. your overall average. The Way to Execute Against it: Focus at least 50% of your time (or team's time), energy and resources to the lead flow and sales channels that those top 20% deals came from. The Results I have Seen: -Deal sizes 2-5x year over year -100x deal size increase for your largest customers -Faster and higher conversions for time to close. It is one of the simplest levers you can pull to increase revenue. #sales #marketing #founders

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90% of salespeople are terrible at pricing calls. They either say price point blank (and get sticker shock). Or they beat around the bush. Here's 6 tips for pricing calls that sell: 1. Deliver price in the context of value. No. I'm not saying hide price. But. If you quantify pain first. And if that pain is worth millions? A $60,000 price tag is peanuts. You'll never get sticker shock when you do this. 2. Don't offer proactive discounts. I'm not saying never discount. I'm saying never do it without being asked. You think you're earning brownie points. You're not. Concessions are easily forgotten. Especially if they didn't work for it. When you show up to the negotiation table? That credit will be lost. Your 'discounted' price? In their eyes, that's list price. Soon you'll be showing bone. 3. Position your pricing to avoid objections. The way you explain your pricing will either: - create objections - prevent objections BAD EXAMPLE: You: "We have a 10 seat minimum" Buyer: "But we only need 8!" BETTER EXAMPLE: You: "Initial pricing is $10k. "That covers you all the way up to your first 10 users." Buyer: "Screamin' deal!" (ok, not really). It's not perfect. But there's always a better way to position. 4. Don't apologize. Not literally. I'm sure you're not saying "sorry" about your price. But many of you indirectly say it. - Shifty body language - Overcompensating talk tracks Those things scream: "I don't believe in my price." - Deliver it casually. - Deliver it concisely. - Deliver it with value. The best salespeople? They quote price as casually as they talk about what's for lunch. "$250,000 all in. Can you pass the salt?" 5. Don't negotiate during pricing calls. There's pricing calls. There's negotiation calls. Don't mix the two. If your buyer isn't ready to sign once you land on an agreed price? It's too early to negotiate. If your buyer starts haggling? Ask this: "If we agreed on a win/win price right now, what would still have to happen next before we work together?" If there are still a lot of steps? Punt. 6. Don't deliver price in group settings. The first time you quote price should be with 1-2 people. If you like to suffer, try this: Get 4-5 (or more) buyers on a call. Give 'em a demo. Then quote price. The grumbling will begin. No matter how great of a job you did. There are so many people, that ONE will have an issue with price. They'll start snickering. That sentiment will spread. Soon you'll have a riot on your hands (ok, again, not really). Quote price with 1-2 people first. Bring it to the group later. Once you have a champion. I'm sure I missed a lot of tips here. Got any to add? Write 'em in the comments. P.S. Here's a free list of 39 sales questions that SELL (and make your pricing look like peanuts once you quote it): https://go.pclub.io/list

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Want to be strategic in RevOps? Find way to improve one single GTM motion: Here are the four most common examples: 1. Sales Process 2. Inbound 3. Outbound 4. Retention/Growth Let's take 𝗦𝗮𝗹𝗲𝘀 𝗣𝗿𝗼𝗰𝗲𝘀𝘀 as an example. If this isn't good, it's the place to start. 𝗙𝗨𝗡𝗗𝗔𝗠𝗘𝗡𝗧𝗔𝗟𝗦 Do we have the fundamentals in place for our sales team to run an efficient sales process and close deals? Do we have? - ICP well defined? - Buyer Personas well defined? - A Sales Methodology and Process? - Sales Process implemented into CRM? Without this our sales team is, by definition... - Chasing the wrong people - Chasing the wrong opportunities - Missing critical steps in the process - Not generating metrics to show this More importantly, the - Close Rate is too low - Sales Cycle is too long - Average Sales Price is too small 𝗔𝗗𝗢𝗣𝗧𝗜𝗢𝗡 Is the team executing the process and can we see it? Do we have? - Enablement and training - Pipeline metrics reporting? - A pipeline inspection process? - 1:1 sales coaching cadences? If so, we should see our sales team executing in real time. 𝗢𝗣𝗧𝗜𝗠𝗜𝗭𝗔𝗧𝗜𝗢𝗡 With the above, we have accurate metrics. We can now look for ways to optimize: - Establish a Pipeline Council - Proactive Risk Signals in Deals - Optimized conversion intelligence - Conduct regular sales forecasting If you're in RevOps and you want to be more strategic, you have to find a way to work on things like these, to help management improve the process and, most importantly, the outcomes. Management often doesn't understand that RevOps can make this kind of impact or how, so they need to be shown, one small step at a time. More on this in 📰 𝗧𝗵𝗲 𝗥𝗲𝘃𝗢𝗽𝘀 𝗪𝗲𝗲𝗸𝗹𝘆 📰 https://bit.ly/4aT31de ✌️

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The future of NRR: Will CCOs become the new CROs? (...a 7-figure ARR CCO asked me) A CCO recently asked me, "I've seen CCOs reporting to CROs these days and CCOs becoming CROs. What do you think the future holds? Is this going to be a trend to stay?" It's a fascinating question. Here's what I'm seeing: Companies are laser-focused on improving NRR. But who's directly responsible for it? Marketing, support, CS, AMs, strategic account sales...everyone influences NRR, yet no single executive owns it. That's changing. CCOs are emerging as the "Chief NRR Officers." Why? Because the CCO's ultimate goal aligns perfectly with growing NRR. CCOs are under immense pressure to drive new revenue. However, acquiring new customers is far more expensive than retaining and expanding existing accounts. Putting CCOs in charge of NRR makes strategic sense. But there's another strong candidate for owning NRR: The COO. Retention is a team sport. Every customer touchpoint impacts churn, including product, pricing, sales, onboarding, and support. The COO oversees all these critical functions. They're ideally positioned to drive NRR improvements. Mark my words: Having a dedicated NRR executive will soon become the norm. Will it be CCOs or COOs leading the charge? Only time will tell. I break down the full future of NRR in this video:

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𝐔𝐧𝐯𝐞𝐢𝐥𝐢𝐧𝐠 𝐭𝐡𝐞 𝐇𝐢𝐝𝐝𝐞𝐧 𝐌𝐞𝐭𝐫𝐢𝐜: ‘𝐋𝐅𝐈’ 𝐟𝐨𝐫 𝐏𝐞𝐫𝐬𝐨𝐧𝐚𝐥 𝐖𝐞𝐥𝐥-𝐁𝐞𝐢𝐧𝐠 We rely on metrics daily: 🌟 NPS, 💻 Churn Rate, 📈 CAGR, 💰 Burn Multiples, 📉 LTV, CAC, MRR, ARR, etc. These metrics guide us through business strategy and decision-making. Even books like “Measure What Matters” focus on OKRs/ goals, which I LOVE as a leader. But as I took a step back, I realized there was something missing. Amidst the flurry of KPIs, frameworks and analyses, one crucial area often goes unnoticed: our own well-being 𝐖𝐡𝐲 𝐌𝐞𝐚𝐬𝐮𝐫𝐢𝐧𝐠 𝐖𝐞𝐥𝐥-𝐁𝐞𝐢𝐧𝐠 𝐌𝐚𝐭𝐭𝐞𝐫𝐬 Imagine what would happen to a company if we didn’t measure performance or plot KPIs. It would likely fail, blindsided by unforeseen issues. "𝐖𝐡𝐚𝐭 𝐠𝐞𝐭𝐬 𝐦𝐞𝐚𝐬𝐮𝐫𝐞𝐝 𝐠𝐞𝐭𝐬 𝐦𝐚𝐧𝐚𝐠𝐞𝐝." – 𝑃𝑒𝑡𝑒𝑟 𝐷𝑟𝑢𝑐𝑘𝑒𝑟 If true, then why do we not apply the same logic and discipline to our personal well-being? I continue to see leaders, professionals, and entrepreneurs silently suffering. It’s scary. It’s sad. But it’s also a wake-up call. 𝐈𝐧𝐭𝐫𝐨𝐝𝐮𝐜𝐢𝐧𝐠 𝐋𝐅𝐈 🌞 Of course, you wouldn’t know what LFI means because I conjured this up, but hang with me… I did put some thought behind this 😎. I wanted to find a way to measure and monitor overall fulfillment and satisfaction in life, evaluating aspects like purpose, passion, joy, contribution, and alignment with core values. I call this the 𝐋𝐢𝐟𝐞 𝐅𝐮𝐥𝐟𝐢𝐥𝐥𝐦𝐞𝐧𝐭 𝐈𝐧𝐝𝐞𝐱 (𝐋𝐅𝐈). The foundational rocks for my rubric include: • Time with Loved Ones: Cherish every moment with family and friends. Time is fleeting, and these moments are priceless. Aging parents? Toddlers time-traveling to graduates suddenly? • Personal Happiness and Satisfaction: Take stock of your emotional well-being. Are you truly happy and fulfilled? • Health and Wellness: Prioritize your health. Without it, nothing else matters. Even money can’t be the silver bullet. If Steve Jobs couldn’t do it, what are our odds? • Purpose and Passion: Are you excited about what you do or miserable? Are you working on something you are passionate about? Better to try and fail than live and regret never pursuing it 😡 So the next time you are overwhelmed or triggered by the typical “LFG” with a 🚀, I want you to pause and think about your #LFI 🌞. In a world where success is often measured by external achievements and the only constant seems to be layoffs, let’s not forget to measure what truly matters: our own well-being. Ready to measure and improve your LFI?  What's one rock you'd add to the list above? Please share your thoughts in the comments. With this in mind, I’m working on some exciting changes for my next act and will be sharing soon as I finesse my own rubric for my LFI! It involves a little dose of imagination, bonding with my kids, laughter, & a LOT of LFI 😀 #LifeFulfillmentIndex #CEO #WellBeing #LifeMetrics #Entrepreneurship #StartupSuccess #ZeeZeeAdventures

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If you want to hit $100M ARR (and position your company for true scale), you must master enterprise sales. Here are the 11 critical skills your team needs to consistently close 6, 7 and 8 figure deals: 1. Understanding fundamental differences between transactional selling and enterprise sales 2. Developing the right pricing strategies to align with your customer 3. True multi-stakeholder and multi-threaded sales processes 4. High impact account-based marketing strategies including dedicated virtual programming 5. Field sales support and in-person program development 6. Territory design and comp planning 7. Building the team including pre-sale architects, reps, and customer success 8. Aligning the organization and staffing new functions 9. Building out services to ensure your customers solve their problems 10. Mutual action planning built around client outcomes 11. Deal management at the Board level These are all fundamental skills Pavilion taught previously but the scope and intensity are different when it comes to true Enterprise sales. That’s why Enterprise GTM School is so important and it’s become a foundation of our educational curriculum. We’ll teach you the entire enterprise playbook, give you the workbooks, tools, and processes, and prepare you to hit true scale. The course is included FREE with Executive Membership. It's an absolute can’t miss! And it starts TOMORROW Apply here: https://lnkd.in/ezspvCZe P.S. Not a member yet? DM me to get 10% off Enterprise GTM School

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Many sales teams struggle with it... low closing rates. Studies have shown why this is often the case: you should NEVER sell the product... but the VALUE!!! The positive side effect of this little change? Your deal cycle shortens and your closing rates will increase. Successful sales leaders rely on "Value Selling". They use the so-called Value Framework for this and thus help their team sell more efficiently... by getting everyone in the sales team on the same page. Today we'll show you how to create and apply this Value Framework for your team. #valueselling #valueframework #sales https://hubs.li/Q02tTGSc0

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The Rule of 40 is so elegant It helps investors compare SaaS companies across their lifecycle ... But many candidates get confused about which formula to use 👇 The Rule of 40 states that a SaaS company is "efficient" if its growth rate plus profit margins exceed 40%. But which “margin” should you use? There are many possibilities: 👉 EBITDA: Excludes non-cash expenses, showing operational profitability. 👉 Operating Income: Similar to EBITDA but includes D&A expenses. 👉 Gross Margin: Includes all costs of goods sold, indicating efficiency in turning raw materials into profit. 👉 Net Income: Encompasses all GAAP expenses, providing a comprehensive view. 👉 Free Cash Flow Margin: Accounts for all cash flow, often used by equity research analysts. Which one should you use? It depends on what you’re measuring. I usually recommend Free Cash Flow margin for its comprehensiveness. However, choose the metric that best suits your situation: – Focus on Operating Income if comparing companies with unique dynamics. – Use Net Income if that's all you have access to. Instead of worrying about the "right" formula, focus on what you need to measure and how best to capture it. 📩 Enjoyed this type of content? If so, join my FREE newsletter for more 👇 https://lnkd.in/ga4GhWiK #growthequity #venturecapital #privateequity #investmentbanking #vc #buyside #investing #interviewskills #finance #networking #interviews #recruiter #headhunter

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Why do only 0.001% of SaaS businesses make it to $50M in ARR? Most of them drop off within a “Valley of Death” – a stress-test for your GTM motion that exists between each growth milestone. Here's a rundown of common challenges scaling: $𝟬 𝘁𝗼 $𝟭𝗠 (𝗧𝗵𝗲 𝗣𝗠𝗙 𝗧𝗲𝘀𝘁): The first biggest hurdle is achieving product-market fit. Most budding SaaS companies never get off the ground due to a PMF disconnect. If you do manage to scrape past $1M ARR without your PMF and ICP dialed in, it won’t take long for things to crumble. $𝟭𝗠 𝘁𝗼 $𝟭𝟬𝗠 (𝗧𝗵𝗲 𝗦𝗮𝗹𝗲𝘀 𝗣𝗿𝗼𝗰𝗲𝘀𝘀 𝗧𝗲𝘀𝘁): You’re unlikely to make it through this valley without a solid, professionalized sales process. This means, at the very least, you have one or two salespeople and a standardized base of knowledge about the product, its capabilities, and the pain points it targets. This is the zone where most companies start making mistakes in their processes that catch up with them later. $𝟭𝟬𝗠 𝘁𝗼 $𝟯𝟬𝗠 (𝗧𝗵𝗲 𝗦𝘂𝘀𝘁𝗮𝗶𝗻𝗮𝗯𝗹𝗲 𝗚𝗿𝗼𝘄𝘁𝗵 𝗣𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 𝗧𝗲𝘀𝘁): By $15Mil, bad processes are catching up to you as they buckle and break under the size of the company’s growth. Unsustainable growth practices will not get you past $20Mil. $𝟯𝟬𝗠 𝘁𝗼 $𝟱𝟬𝗠 (𝗧𝗵𝗲 𝗥𝗲𝘁𝗲𝗻𝘁𝗶𝗼𝗻 𝗧𝗲𝘀𝘁): This is where your problems start to shift from new sales to retention. Here, you might start to struggle to outsell your churn, like dumping water into a leaking bucket. $𝟱𝟬𝗠 + (𝗧𝗵𝗲 𝗥𝗲𝗽𝗲𝗮𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 𝗧𝗲𝘀𝘁): At this point, if the company’s GTM strategy is scalable and repeatable, building out new products and repeating this process will allow further growth depending on the limits of the market. In other words, past PMF, you need process and systems to scale. Some ways RevOps can help: - Create a RevOps Roadmap - Create and run a pipeline council - Identify and eliminate technical debt - Audit and optimize compensation plans - Audit and clean up tech stack for simplicity - Create a strategic territory planning process - Double down on the best possible data provider - Align definitions of the most important KPIs for your team These are just examples of ways RevOps can help B2B SaaS companies navigate the Valley of Death and build processes and systems to scale GTM. More on this in the 📰 𝗥𝗲𝘃𝗢𝗽𝘀 𝗪𝗲𝗲𝗸𝗹𝘆 📰 Read the full newsletter on-demand by clicking here⬇️ 🔗 https://bit.ly/4ckqaXw Does this hold up to what you’ve seen in the industry? 🤔

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Precise execution is a function of alignment, though we settle for vague definitions of common terms like 'Niche Vertical SaaS' To give us the best chance of executing on an investment thesis focused on 'Niche Vertical SaaS,' we wanted to ensure raw clarity on a definition. Here's where we're at: 1. Vertical Focus: Refers to SaaS solutions designed exclusively for specific industries or sectors, characterized by tailored functionalities that address unique challenges or requirements of those industries. This specialization and customization of SaaS offerings are not just niche in terms of market size or business type but are intrinsically linked to the specific operational and strategic needs of particular sectors, potentially leading to higher adoption rates and a greater impact on operational efficiencies. 2. Less than 250,000 U.S. Business Entities: Setting a threshold of fewer than 250,000 businesses helps focus on smaller, more specialized markets that are less likely to be saturated with competition. This size indicates a targeted yet sufficiently large market to sustain a new entrant or allow for growth within niche offerings. 3\. **Less than 3% of Total U.S. Businesses**: This parameter aligns with the need to find markets that are not overly crowded. By keeping the focus on industries comprising less than 3% of all U.S. businesses, you're likely looking at industries that are specialized enough to have specific needs, which can be highly advantageous for Micro SaaS solutions designed to meet very particular business requirements. 4. Growth Rate of Less than 20%: A cap on the growth rate at less than 20% helps avoid industries that might be experiencing a bubble or are overly volatile, which could represent higher risks. It targets industries that are growing but not so rapidly that they might become too competitive too quickly or might not sustain long-term growth. 5. High Proportion of SMB and Mid-Market Entities: This criterion focuses on industries predominantly made up of small to mid-sized businesses. It ensures the targeted niche naturally aligns with the intended customer base for Micro SaaS products, emphasizing sectors where decision-making processes are quicker and organizational agility is higher. 6. Moderate to High Fragmentation: Prefer industries that exhibit moderate to high fragmentation, indicating less dominance by a few large players and more room for smaller players to defend market share. This characteristic often leads to faster adoption of innovative solutions, as businesses in fragmented industries are looking for competitive advantages. Thoughts? We miss anything? Still too vague? #microsaas #privateequity #acquisitionentrepreneur

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First Round Capital's 4 Levels framework is one of the most detailed and coherent guides on product-market fit (PMF) for B2B software businesses. And while this guide is geared towards venture-backed businesses, I've seen a lot of parallels within the bootstrapped community. Specifically, there's a version of the Level 3 PMF described here that bootstrapped companies hit where they begin to really start to seriously consider whether or not they should take outside help and/or investment. Usually these businesses are $1M+ in ARR, have team of ~5+ (usually more, and not incl. contractors), and have had a history of pretty healthy growth until the past 6-12 months. To echo some of the yellow flags mentioned in the guide, these businesses are now facing: - Inbound channels that are starting to stall. Referrals and word of mouth have started to plateau - Outbound efforts that have yielded little to no success, and have rendered the founders a bit gun shy on continued investment in these channels - A leaky bucket where unwanted/regretted churn is starting to tick up and competition is starting to get fiercer - Growth is starting to show signs of significantly slowing for the first time - Inexperience and/or a reluctance to orient the business towards larger enterprise opportunities, despite having some large logos or contracts It's completely understandable why founders would look externally for help at this point. The business has gotten farther than they probably initially imagined, but what got them to this point won't get them to the next step. At Polychrome, we've identified this point as our most preferred entry point into a business. Our expertise lies in partnering with and working alongside technical founders who've built a great business, but lack the GTM experience to take their bootstrapped business to that Level 4, Extreme PMF. If what I've shared above describes your business, please don't hesitate to reach out. I'd love to learn more and see if we can work together to help re-accelerate your company! https://lnkd.in/giKJ4Vfi

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