📕 Why it’s time to retire the MQL; Board meetings for beginners; Expert outbound sales sequences...

March 5, 2021

Welcome to the end of the week. We’ve got some big news, as we’ve just launched a brand new website featuring a SaaS Playbook library! Now if you’re looking for great B2B SaaS content in a specific area, you can filter through our historical playbook features by topic to quickly find the best of the best. Historical features are being added as we speak so you should have access to the full library soon... excited to see what you think!

🎒 Education can be a difficult vertical to sell into – the sales cycles are long with multiple decision makers involved, and your product better be squeaky clean to get past IT. GoGuardian founder Advait Shinde recounts how he faced these obstacles on The SaaS Podcast, receiving countless rejections for his classroom management software in their first years of the business. He and his cofounder’s young age and lack of experience didn’t help their case, but he kept a positive mindset and was persistent with his prospects, who slowly but surely started to come around. Fast forward to today, and they’re used by 18 million studies and above 50m in ARR. Of course there are many reasons why Shinde was able to succeed, but as you’ll hear in the pod, he credits persistence above all else.

☕ When it comes to raising capital from SaaS lenders, growth is the metric which founders and CEOs tend to think will have the greatest impact on their success. And while that’s not totally off, the truth is that not all growth is weighed equally – lenders and investors will be specifically zeroing in on your growth efficiency to understand your ability to pay back their capital invested. In the linked article, Espresso Capital explains how to calculate key growth efficiency metrics, what they can tell you about your business, and the important role they play in financing.

👔 Most bootstrapped SaaS companies don’t have board meetings because the board only consists of its founder! But we still think there’s value in holding boards even if you aren’t forced to – it’ll help you summarize and digest your quarterly progress as well as polish your board skills, which you and your company may benefit from down the line. This simple board meeting structure is a great one to follow for those looking to dip their toes into water. It tackles key KPIs like growth, runway, and retention up front when your team will be most engaged, and keeps your total meeting time to a concise 2 hours or less.

🥫 The amount of emails which buyers receive on a daily basis is getting to levels of absurdity, making the quality of emails that sales reps send even more important. NextHunt CRM interviewed 5 SaaS sales stars to see what their secret sauce to getting responses (and closing deals) was. It’s a long read, so if you only have time for one, we’d suggest skipping down to Samantha Gallagher’s section, who’s a Sales Development Manager at Intercom. Ensuring emails are sent with enough frequency to build rapport, being persistent until you hear a hard no, and consistently including language which adds (or shows how you) can add value are her strongest pieces of advice.

🐡 Did you know that waiting longer than just 5 minutes to follow up with a webform submission decreases your ability to connect with the prospect by 10x? Goes to show that buyers have the attention span of a goldfish, and thus should be prioritized based on their demonstrations of buying intent (like a form submission). Measuring MQLs does this to an extent, weighing prospects based on profile and interactions they’ve had with your brand. But where MQLs fall short is the time it takes to process that data, because as mentioned, just 5 minutes can force a buyer to move on. It’s why Drift are big fans of conversational marketing, and the stats shared in their liked Ebook will probably make you one as well.

🤬 If you work in a SaaS business where everyone is encouraged to blog, you may want to put on the earmuffs for this stat: 70% of the content written in organizations is never used, and the other 30% is rarely utilized properly. So instead of focusing on pumping out sheer volume, Randy Frisch argues that we should take a step back and think about how to better leverage our content into experiences. His book, F#ck Content Marketing, he explains why personalized content streams (think Netflix and Spotify) are what each SaaS business should be creating, and why it doesn’t take 100’s of articles to get there.


🔪 Hearing “you’re not thinking strategically” has to be one of the deepest cuts you can recieve in a product related position. But even the best fall down sometimes – Rose Yao spent years building at both Google and Facebook, and couldn’t avoid that exact criticism early in her career. She has since put together a basic product strategy framework to help demystify the topic and show product managers how they can think a bit more outside the box. She includes a couple popular frameworks like the 70/20/10. (70% of time should be spent on existing products, 20% on medium size products/features, and 10% on pure innovation) which have withstood the test of time and are great guides to stick to.

🤥 SaaS companies have an increasing pool of loan providers to choose from, so if you’re considering, you’ll have to take a hard look at who’s offering the best rates. But beware, seemingly identical rates can end up costing you very different totals. For example, some lenders offer rates at what they will say is 12%-20%, but without amortization, meaning you pay 112-120% of the total borrowed in equal payments over a given period. That flat rate actually ends up equating to a 35% interest rate because the principle isn’t reducing every month. The Element Finance team put a nifty loan calculator together which can help you calculate these real costs and make sure you aren’t being swindled, check it out.

💓 When it comes to valuation, SaaS private equity investors lean heavily on the rule of 40, in which a company’s combined growth rate and profitability margin should be ≥ 40. But investors would take higher growth over higher profitability in a heartbeat (especially with smaller SaaS companies where profitability doesn’t equate to much), which is why it makes more sense to weigh each metric accordingly. SEG (Software Equity Group) suggests giving a 1.33 multiple to growth and 0.67 to profitability, which feels about right to us.

⏩ Hubspot (NYSE:HUBS) recently announced they beat Q4 2020 earnings expectations by 7%, and more importantly, surpassed 100,000 customers $1B in ARR. It’s an incredible benchmark for the business, and further proof that we should all be paying attention to whatever best practices and suggestions they offer! We are checking out The Sales Acceleration Formula, which was published by their former CRO, Mark Roberge. It gets pretty deep into the weeds, focusing less on big picture innovation and more on how they created a scalable path to get to where they are today.

📧 No matter what sort of SaaS business you work with, we bet email is one of your top, if not the top, marketing mediums. Single Grain offered a helpful refresher on the most important metrics you should be tracking within your email campaigns, as well as some relatively easy ways to improve them via optimizations. Take click through rates for example. Making your content truly relevant and personalized to the individual user (detailed Hubspot properties are a great start, you can upgrade to a full blown customer data platform when you are ready) is the best way to speak directly to your audience, which will increase your user engagement.

💽 Low to no code software is all the rave right now because the more your company can do without using precious development resources, the better. Groove HQ published a set of growth “hacks” (a word I regret using as I type...) which don’t even require low code tools, so there really are no excuses! Thoughtful autoresponders for email sign ups are a great example. They are easy to implement, and can be trickled in to supplement new feature announcements and other more ad hoc emails, which will give your subscriber a bit more structure along their customer journey.

☠️ Having a killer sales team alone doesn’t guarantee you success – an effective sales enablement strategy is often actually what ends up separating winning sales teams from struggling ones. So if you are looking to grade your own process, these are a few metrics which can highlight where things are going right, or potentially wrong. Keep in mind that just a few reps may be accounting for the majority of your sales (the 80/20 rule often applies here) and that’s ok. You just need to understand where success is coming from in you organization, then you can work to replicate it.

📞 Gong and Chorus.ai are both on the cutting edge of sales intelligence. The tools record/transcribe sales calls, grade them, then offer suggestions on how to improve – down to highlighting the specific topics and phrases that leads to the most closed deals. If you haven’t strongly considered one, it’s worth checking out this piece to see how Gong uses their own product. Close.io also just launched a call coaching feature which allows managers to “whisper” to their reps during the middle of a call. We haven’t tested yet but it seems like it would make loads of sense when onboarding new reps.

✨ Building a successful brand is more than coming up with an eye-catching logo and a well-designed website. It’s about bringing your product to life. Paul Campillo recently went on the SaaS Club podcast to discuss how Typeform built their incredibly successful brand. His number one suggestion was to not do branding, and instead focus on positioning. What he means by this is truly focus on what makes you stand out in your niche. Another element of their marketing strategy Typeform did well was talking to their early customers and developing really solid customer stories. He credits customer transformation as the most exciting part of these brand stories.

🔛 When it comes to customer expansion, there are typically three buckets that revenue can fall into add-on, upgrades, and cross-sales. If you’re a usage-based company, congratulations! Your customer expansion strategy is already baked into your business model. Where companies can get really creative is in add-on and cross-sales. Email and webinars are extremely powerful for both as they are probably the best out of app method to show customers how they can get more out of the product. So develop content and use cases to support it.


🤖 One of the biggest pitfalls of data handling is a lack of context and the ability to give insight into the “why” behind your customers’ behavior. It’s why most data-savvy companies are moving away from your plug and play analytics frameworks and almost exclusively focusing on cohort analysis. For those who haven’t made the leap yet, this summary by Chameleon is a solid write up on cohort analysis basics and how to get going. The one-sentence summary – it provides context to your users’ actions, really diving deep into who is using your product most and where the disconnect points are by mapping out consistent user flows.

🕰 When your team is upgrading the product or rolling out a new feature, you want them to be excited. But excitement can lead to rushing things. There’s something to be said for slowing down and taking your time with product development. Quality will always win when it comes to attracting and retaining customers; think of the project management space – there are a million apps. They all do essentially the same thing with relatively similar interfaces. What sets the Asanas and Basecamps of the world apart is the minute details which took time and patience to build. Shipping a product before all the kinks are worked out is a surefire way to kill your company’s retention rate because if V1 tanks, customers won’t always stick around for V2.

💼 In David Maister’s book, Trusted Advisor, he explains how to effectively build trust between clients and consultants. While not the target audience, the approaches laid out in the book are helpful for everyone from sales reps to CEOs, as the foundation of any relationship with those you work with is trust. One of his critical pieces of advice on relationship building is to consciously remove your ego from work situations. When building a relationship with anyone (clients, team members, and investors), the goal is to actively listen and find common ground with them, not convince them of your accomplishments.

🎨 Teams iterate on their products and build out new features to increase functionality and differentiate from the competition. But they rarely think about the impact those additions have on their software’s UI/UX. Intercom found that many of their customers became frustrated with the app navigation after numerous changes to the product. Realizing they had made a mistake, they decided to take action. Their redesign prioritized two things above all: only focusing on the most used areas of the navigation screen and simplifying their design elements. Simplifying is where they won – the product became intuitive to their customers’ needs (we can vouch) and became much more sticky.

⚡️ All startups are targeting growth, but it becomes dangerous when companies will pursue it at all costs ignoring the potential risks. We try to encourage founders to take a more patient approach, because the downside to unsustainable scaling is incredibly high. Just remember that growth rarely ever happens overnight, and even those who do shoot off like a rocket first had to put the proper growth infrastructure in place to make it possible.

💀 You’re a B2B SaaS startup doing 5-10m ARR and you can’t help but give yourself a pat on the back – you found your PMF, have a growing install base (and team), and arrived at a point many companies never make it to. But somewhere in the next phase of 10-50m ARR you will face the treacherous SaaS Valley of Death, where your once stellar GTM machine is no longer sufficient. Oak HC/FT’s Allen Miller believes that decreasing sales efficiency is a clear symptom of a company heading towards the valley, and offers some levers to pull which can help get you back on track. He also wisely suggests hiring someone who has gone through this stage and can call on their past experiences, which will always be invaluable.

💻 Time for a history lesson on one of the hot topics of today: digitization. As Ray Wang breaks down in “Disrupting Digital Business,” the shift to a virtual world started years ago, and didn’t just impact how we interact with people. It changed the foundation of the business world. To survive in 2021 and beyond companies have to understand we’re no longer built on an economy of products and services, but one of experiences and outcomes, and success now hinges on how well we keep our promises to deliver those things. Wang urges us to build an intention-driven business, noting that old best practices and processes aren’t enough. The best companies are building systems to predict what will happen next and how customers’ attitudes are changing.

🔨 When people discuss why B2B SaaS startups fail, the blame typically falls on a bad product or overly crowded market. But there are obviously lots of other factors and reasons in play, one being that founders’ can become overly focused on product, at the expense of the total business. So before going heads down on scaling, you need a solid foundation in place, meaning: cultivating your value prop, fine-tuning your revenue model, and understanding how you fit within the broader ecosystem. The strength of your growth potential hinges on how well you understand the nuances of those elements and how you blend them together.


🤑 When it comes to customer success metrics (and really customer success in general) there are few more knowledgeable than Lincoln Murphy. He recently covered TTFV (Time to First Value), which is the time between the close of a sale and when that customer is onboarded. It’s a bit of an oddball in that it’s not a metric that businesses have complete control over – every customer has actions they must take to get up and running which you don’t manage. But by setting a goal (say 30 days) and working to get with your TTFV down to that number, you will will be able to measure exactly how much more quickly you can get users to their “aha” moment.

🏦 The management of your margins only becomes more important as you scale. We liked how the SaaS CFO addresses margin by spitting his P&L into two simple layers: gross profit and operating leverage. Gross profit is just your revenue less COGS, and should scale at a relatively similar rate as revenue. Operating leverage, on the other hand, should be closer to a fixed cost as you scale, growing at a much slower rate than revenues. Check out the equation below to calculate – the scale maximum for positive operating leverage is $1, meaning if you achieve $1 of operating leverage, you kept operating expenses flat year over year.

🎯 We are big believers in flywheels over funnels because while funnels have an end state (paid customer), flywheels create a cycle and build momentum. The change to flywheels isn’t as drastic as you think – once a customer reaches the end of your funnel, add a couple steps like having them refer a friend, submit a testimonial, or sign up for your newsletter (all should increase stickiness). Redpoint Venture’s Tomasz Tunguz made an interesting point in favor of flywheels by looking at hiring practices. Once you bring someone on board, that isn’t your final interaction with them – you manage, cultivate, and foster that employee to improve their performance and attract future ones. Your customers should be treated no differently!

🤯 Of course, marketers and sales leaders want to be persuasive, but maybe it’s time to think about being pre-suasive? In Robert Cialdini’s Pre-suasion: a revolutionary way to influence and persuade, he pushes that in order to be able to change minds, we need to be able to change mindsets. Building off the thesis that the most valuable commodity of the 21st century is attention, Cialdini focuses on using two main ideas: anchoring and priming (see below). Our big takeaway – making ideas stick means aiming to change what people think about, not how they think.

  • Anchoring - attentional bias, rooted in the idea people use the first piece of information offered when making decisions.
  • Priming - our responses are systematically biased to the most recent stimuli.

⏰ When we get bored of Friends reruns, we like to flip on legendary founder and investor Bill T. Gross’ TedTalk on why startups fail. He points to timing as the most critical piece of your strategy because you’re really trying to shoot the gap – you need to get in early enough to where the space isn’t oversaturated, but not so early to where you’re spending too much time educating your audience about why they need you. Our current environment changes at what feels like lightspeed, so you need to be realistic about how your product fits into the market and (as always) be able to anticipate how your customer needs will evolve.

⛴ The Shape Up method is a product development technique created by the masters of “work smarter not harder,” Basecamp. Following an eight-week cycle, the Shape Up allows engineering teams to quickly and autonomously develop new products/features. Yes, you read that right, autonomously – if you truly adhere to the process, your engineering teams should work in complete solitude for eight weeks. It’s a big commitment, so the creative folks at SearchSpring found a way to incorporate the Shape Up method's best parts without neglecting daily ops. They found the result was still the same – by cutting down on distractions, they could dive deeper into their problems and create more valuable solutions.

🚙 You can’t define marketing success without measurement, which is why we all track simple metrics like engagements, clickthroughs, conversion rates, etc. We tend to give those easily trackable metrics a disproportionate amount of attention because simply put, we are too lazy to explore new and more challenging ones. That’s called the measurability bias, and it occurs in a wide range of areas that extend far beyond marketing and SaaS. So what can you do about it? Try to have an open mind towards less familiar metrics. They could end up being key to unlocking a new level of effectiveness in your marketing.

💰 Customer LTV shouldn’t be a big focus in the early days of your startup – you’re still figuring out PMF and the best channels to attract and convert leads. But soon enough it will become one of the most important metrics you track. The simple LTV calculation is ARPA multiplied by gross margin, divided by churn. Christopher Janz suggests a few ways to tighten up that calculation and make sure you aren’t over-reporting LTV. For example, lots of companies use logo churn as their denominator, but switching to revenue churn will incorporate expansions and contractions (and be more accurate). This SaaS LTV Calculator includes all of his suggested amendments to the calculation – have at it.

👍 Q1 is when most rebrands and product launches happen – if you are planning yours, you may want to check out Obviously Awesome first. It emphasizes the need to nail positioning before all else, otherwise, your other marketing efforts simply won’t take you far. The book covers a 10-step process to positioning, but also includes 5 specific components which we thought were great:

  1. Competitive alternatives. Know what your customers would use if your product didn’t exist.
  2. Unique attributes. What features does your product have that those competitive alternatives lack?
  3. Value and proof. The benefit those features unlock for your customers.
  4. Target market characteristics. The characteristics of buyers that make them care about the value you offer.
  5. Market category. The market you label yourself as being part of, to help customers understand your value.

🔐 An often overlooked customer segment with strong growth potential is the adjacent customer. These are folks who are aware of your product (and may have even tried using it) but never successfully converted. That “just missed” conversion could be because your positioning doesn’t resonate with them or they see too many barriers to adoption – in either case, it’s extremely difficult to backtrack and figure out why exactly they chose to pass. To start to solve for these users you can look at who is successful on your platform today, and why. Comparing side by side may highlight where the disconnect is with adjacent users. The linked article from Brian Balfour offers more ways to dig deeper, it’s worth the read.

🧗 The SaaS Revolution podcast recently had LB Harvey, CRO at Front, on to discuss how to bring a company upmarket. One point she made which is worth repeating is that when you move to a larger customer segment in the B2B world, you are not going to win over customers because you are cool or have cutting-edge UX/technology. Midsize and enterprise clients truly only care about how your solution will help transform their business, so aligning your customer, sales, and marketing teams to develop in-depth use cases is much more important when making that move upmarket.

🧘 Last year, Headspace generated over 400,00 organic site visitors each month, and it wasn’t just because everyone seriously needed a way to chill out. They did an incredible job with their content marketing strategy, which Grizzle recently took some time to decode. Their home page shows exactly what they do best – focus on the customer. Rather than mentioning what they do, it breaks down their content silos to meet their personas' needs, for example, specifically targeting visitors who want to sleep better or be less anxious. It’s also clear they subscribe to the 10x approach, diving deep into the science behind their meditation methods and creating highly educational content not geared towards selling.

💥 Revenue growth can pick up quickly, and if you aren’t prepared with a plan to scale your team, that growth can halt just as fast as it started. Tomasz Tunguz makes a case for planning at least six-months out when it comes to hiring. Using a hypothetical dev department, he shows how important it is to evenly distribute workload between department heads, managers, and employees. You should also plan how different job functions will evolve with your company. But the real key to successfully scaling your team is knowing the type of people you want to hire during this stage. Software is a unique industry, people who are hungry to learn and adaptable to the quick (and sometimes seismic shifts) we face will do best..

🐰Taking your customer LTV over customer acquisition cost is how many B2B SaaS companies measure ad efficiency. It’s a helpful metric for those with massive ad spends because a small tweak inefficiency can equal big profits. But for early-stage startups who aren’t spending a ton on paid ads, it can lead you down a rabbit hole. A better way for those companies to evaluate marketing channels is the payback period. You don’t need to worry about getting the exact payback period to a tee (it can be difficult given you are predicting revenue over time); you are just looking to see which channels are generally the most profitable.

🛫 A well thought out pricing strategy can end up being your company's biggest growth lever – Price Intelligently reports it has 4-8x the impact of the acquisition on your bottom line. Most companies start with a simple feature-based tiered model because it’s easy to implement and the most common approach. It’s helpful when trying to figure out how customers interact with your product, but as you get a better sense of where your value really lies, you should re-evaluate your strategy to make sure there aren’t more effective ways to price. For example, if you’re selling to more enterprise customers, pricing by different products in your business (with an aim to cross-sell into others in the future) may help embed yourself more deeply.

💣 We’re about to drop a truth bomb on you: the disconnect between your product and your customer is a problem you will never really solve. There is some good news though, this disconnect provides huge growth opportunities. Solving Product, by Etienne Garbugli, offers advice on identifying the service gaps between your product and your audience. The book aims to help product managers proactively identify gaps between the products they create and what customers are actually looking for. We were pretty impressed with how actionable the book is, providing a different perspective of how product people can decode customer feedback and hone-in on what they are actually asking for.

🧙We are always down for a good case study on how companies were built. So it’s no surprise that this write-up on how Outreach was able to break billion-dollar status caught our attention. There are a plethora of unconventional strategies to put in your playbook, but spoiler alert- none of them center on marketing or sales wizardry. Instead, they set a rather unusual B2B North Star Metric, and prioritized monthly active users above all other metrics. The team became razor-focused on making their users daily users and created a job role with the specific goal of getting 70% of new licenses to daily uses. Driving home the product's value and specifically focusing on adoption versus customer success. The effort was wildly successful- the company boasts a 140% annual net revenue retention rate.

👂 We’ve seen several companies move away from the lead funnel acquisitions framework to a more customer-centric flywheel. Embracing this mindset shift means that your customer goals (not company) should be at the core of your growth engine. Here’s where customer-led growth (CLG) comes into play; as the name suggests, the strategy entails taking a deep dive into customer experiences and actions to see where your growth levers are. In other words, your customers tell you their needs, and you interpret their feedback into the product. While slightly different from the product-led growth theory, if they are combined the two strategies can be very powerful.  One word of caution - be selective about the feedback you incorporate; segmentation is vital here.

🚓 Most of the time, when we think about scaling, we prioritize marketing, sales, and customer success. Equally as important is your product's technical side - network bandwidth, features, and security are all important pieces of your product that need to evolve as you scale. Intercom recently broke down some of their best advice for scaling. There are a few obvious “don’ts,” like avoiding technical debt and not over-optimizing. Given some of the recent headlines and as more companies rely on SaaS products, there’s a strong case to be made for building security from the start. For one, it’s easier to be proactive than reactive. Secondly, as you scale, you could be looking at moving into new customer segments - and if those segments include enterprise customers, you’ll need to provide proof of your security safeguards.

🥼 We don’t want to be the guys who suck all the fun out of the room, but we’d caution any founder against releasing their latest technical invention without extensive thought. Startup success is determined by how well you can create and iterate products that solve your customers’ needs. When you begin to validate your product, you should create a hypothesis rooted in your market’s past behaviors. More than showing where the big wins are, using a scientific approach to product iteration and validation helps you identify points of failure before they become a time and money suck.

🌟 In the Chief Customer Officer 2.0, Jeanne Bliss takes a deep dive in how you can building customer-centric strategies for growth. The book centers on five core competencies for shifting to a customer-centric mindset; one of them being how to incorporate customer listening paths. Most know that creating these feedback loops is a great way to gather intel, but there can still be a disconnect between what customers tell us and how we incorporate that feedback. A solid suggestion is to organize input by customer lifecycle stage. For example, a new customer will have a very different perspective than a legacy customer who has a history with your product, and monetary value each customer brings should tell you where to focus time. With customers, the squeaky wheel is not always the highest paying, and should not always be the one greased!

🏎 Your growth machine is similar to a car (hopefully a racecar) in that it has many moving parts. The complexity of all of these parts can get confusing, but remember, everything starts with the engine, which are core activities that keeps your company moving forward. These will always be self-sustaining growth loops like virality, performance marketing, and content, which can hypothetically stand the test of time. Other supplemental parts like turbo boosts (PR, events, ad buys) and lubricants (conversion optimizations, SEO, brand recognition) will help you drive faster, but should rarely be a focal point of your growth strategy.

🚧 Stagnant product backlogs are a consistent problem amongst software companies. There’s really two things to balance – deciding what products to prioritize and then completing the actual work to deliver them on time. We think this take on backlog management could be worth testing because it similarly splits your backlog into two separate sections, the assumed backlog (reserved for features and updates that you have been ideated) and the realized backlog (the actual work that needs to be done by engineering to complete the assumed backlog). It’s not rocket science, but should cut down on misalignment between those tasked with coming up with features and those who will build it.

💰 We know the your list of SaaS metrics to measure can feel endless, but one we think is worth adding to your management dashboard is Zero Cash Date (ZCD). It’s exactly what it sounds like; the day you will run out of cash based on your existing burn rate. The time span from your date of measurement to ZDC will probably change every one or two months based on how your revenue and expenses vary, so when you see that number shortening, it’s a good reminder to cut back on inessential activities which could be driving expenses up.

💪 Every company has power users: users who frequently use your product and champion your brand. We all want more, but to get them you must be able to measure and identify them in the first place. A straightforward way to do this is by looking at your Power User Curve, a histogram of users’ engagement by the total days they were active in a month. It does a better job of tracking engagement than the classic DAU/MAU ratio because instead of just offering one number, it tells a more complete story about user engagement. You will want to see your Power User Curve “smile” (see below), meaning that you have less involved users spiking your chart on the left side, but a strong group of consistent users on the right which should grow over time.

🤔 There’s no one-size-fits-all process in product development. This read from the Neerventure CTO does a great job of summarizing some of the most common methods (Agile, Lean, and Design Thinking), and argues it’s unwise to firmly stick to the policies of one of the three. Instead, they would have you take some of the best practices of each while subscribing to the idea of IP-Thinking, which has one clear goal – building your IP’s value. Those previously mentioned methods can be rigid and take products in directions that veer off from your real goals (raising funds, exit strategy, etc.). IP-Thinking helps keep you heading down the path.

🔗 The link building debate is one we hear often. Is it really worth it, or are you just wasting time trading links when you should be focusing elsewhere? This in-depth feature in the SaaS marketer falls into the pro link building camp and lays out why it’s so important (namely increased domain authority and referral traffic). Some low hanging link building fruit they point to are review sites – they are easy to set up (you control the process) and ~90% of customers visit these sites before purchasing, so there’s some easy traffic for you.

🔊 One of content marketing's superpowers is what SEO pro Rand Fishkin calls amplifier groups, which consist of thought leaders who have significant sway on your target audience. Your job is to make life easy for those amplifiers by creating content specifically for them (not your customers or potential customers) that will earn them engagement when they share. This won’t immediately drive product sales from your amplifier group’s followers, but that’s ok. The #1 goal here is to leverage their credibility to increase your brand’s authority and build trust for a purchase down the road.

💕 Value propositions are one of our favorite subjects, so we were excited when Hiten Shah sat down with Louis Grenier to discuss how to know when you’ve got the right value propositions on Everybody Hates Marketers. One great reminder discussed was that your value proposition is something your customers determine, not you! Especially when you’re just starting to validate your product and gain traction, you’re likely to have an automatic bias on the value your product provides. If this doesn’t match customer feedback, you could be killing growth or even targeting the wrong customer altogether. Another good one –  value proposition is just one thing and one thing only – it’s how you get your customers in the door. Once you’ve lived up to the initial value proposition, you can then expand your product portfolio.

🤑 When it comes to SaaS margins, the 40/40/20 is often used as a solid reference point (40% R&D, 40% S&M, and 20% G&A). Our friends at Blossom Street Ventures took a deep dive into 28 SaaS companies that went public from 2018 to 2020, and found that the 40/40/20 might not be the best target anymore. On average, these co’s spent 50% of their OpEx on sales and marketing due and less on their product and development. We aren’t saying to blindly dump dollars into GTM as this will vary from company to company, but it’s a good reminder that even the best products out there are focusing more of their dollars on selling and building.

📊 When thinking about data-driven growth in 2021 and beyond, your goal should be to build out an infrastructure that allows you to create narratives behind your audience’s online behavior. This is where intent data can be helpful, which is the layering of first, second, and third-party data points to truly understand your audience’s motivations. Let’s use retention as an example. Your customer’s NPS scores and product usage data (first-party data) gives you a pulse of your customer, but tracking which competitors your customers are using via G2Crowd (second-party data) and monitoring which are engaging with their social channels (third-party data) gives you a clear picture of who is most at risk to churn.

🔮  There’s a misconception that B2B customers are rational, probably because we assume professionals are logical. But it’s people that the decision to buy your product (about 7 are involved in the process on average) not entities, so a large portion of that decision making takes place in their subconscious minds. It’s why customer psychology has long been a part of the SaaS marketer’s repertoire, and we expect the best will take an even deeper dive into what many are calling cognitive marketing. Cognitive marketing aims to do more than just understand your audience’s pain points and what they value – it delves into their prejudicial, contextual, and experimental biases and explores how you can leverage them. We’re excited to up our game.

🧪  The New Year is a great time to revisit your acquisition channels and see if there are more cost-effective options available. There are of course loads to pick from (we like Traction’s bullseye framework which offers 19 key channels), and we encourage you to not be afraid of retest channels that previously didn’t work – different tactics can be more or less effective based on your current stage. For those looking for some channel testing help, GoPractice’s growth simulator might be a good way to gain experience without testing your own business! Their 12-week simulator assigns you a hypothetical VC backed startup and forces you to make some tough product and growth decisions based on historical data they provide.

Previous Weekly Playbooks

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The SaaS Playbook Library

Dirft
Sales
Metrics
The MQL Is Dead

🐡 Did you know that waiting longer than just 5 minutes to follow up with a webform submission decreases your ability to connect with the prospect by 10x? Goes to show that buyers have the attention span of a goldfish, and thus should be prioritized based on their demonstrations of buying intent (like a form submission). Measuring MQLs does this to an extent, weighing prospects based on profile and interactions they’ve had with your brand. But where MQLs fall short is the time it takes to process that data, because as mentioned, just 5 minutes can force a buyer to move on. It’s why Drift are big fans of conversational marketing, and the stats shared in their liked Ebook will probably make you one as well.

NetHunt CRM
Sales
Outbound Sales Sequences: 5 Experts Share Their Tips

🥫 The amount of emails which buyers receive on a daily basis is getting to levels of absurdity, making the quality of emails that sales reps send even more important. NextHunt CRM interviewed 5 SaaS sales stars to see what their secret sauce to getting responses (and closing deals) was. It’s a long read, so if you only have time for one, we’d suggest skipping down to Samantha Gallagher’s section, who’s a Sales Development Manager at Intercom. Ensuring emails are sent with enough frequency to build rapport, being persistent until you hear a hard no, and consistently including language which adds (or shows how you) can add value are her strongest pieces of advice.

David Sacks
Operating
Strategy
The SaaS Board Meeting

👔 Most bootstrapped SaaS companies don’t have board meetings because the board only consists of its founder! But we still think there’s value in holding boards even if you aren’t forced to – it’ll help you summarize and digest your quarterly progress as well as polish your board skills, which you and your company may benefit from down the line. This simple board meeting structure is a great one to follow for those looking to dip their toes into water. It tackles key KPIs like growth, runway, and retention up front when your team will be most engaged, and keeps your total meeting time to a concise 2 hours or less.

Espresso Capital
Growth
Strategy
Not all growth is equal: Why growth efficiency matters to venture lenders

☕ When it comes to raising capital from SaaS lenders, growth is the metric which founders and CEOs tend to think will have the greatest impact on their success. And while that’s not totally off, the truth is that not all growth is weighed equally – lenders and investors will be specifically zeroing in on your growth efficiency to understand your ability to pay back their capital invested. In the linked article, Espresso Capital explains how to calculate key growth efficiency metrics, what they can tell you about your business, and the important role they play in financing.

SaaS Podcast
Listens
Operating
The Importance of Founder Persistence & Mindset

🎒 Education can be a difficult vertical to sell into – the sales cycles are long with multiple decision makers involved, and your product better be squeaky clean to get past IT. GoGuardian founder Advait Shinde recounts how he faced these obstacles on The SaaS Podcast, receiving countless rejections for his classroom management software in their first years of the business. He and his cofounder’s young age and lack of experience didn’t help their case, but he kept a positive mindset and was persistent with his prospects, who slowly but surely started to come around. Fast forward to today, and they’re used by 18 million studies and above 50m in ARR. Of course there are many reasons why Shinde was able to succeed, but as you’ll hear in the pod, he credits persistence above all else.

Software Equity Group
Strategy
Metrics
Finance
Calculating the Rule of 40

💓 When it comes to valuation, SaaS private equity investors lean heavily on the rule of 40, in which a company’s combined growth rate and profitability margin should be ≥ 40. But investors would take higher growth over higher profitability in a heartbeat (especially with smaller SaaS companies where profitability doesn’t equate to much), which is why it makes more sense to weigh each metric accordingly. SEG (Software Equity Group) suggests giving a 1.33 multiple to growth and 0.67 to profitability, which feels about right to us.

Element SaaS Finance
Finance
Strategy
Revenue Lenders Hide the True Cost of Finance with Misleading Rates

🤥 SaaS companies have an increasing pool of loan providers to choose from, so if you’re considering, you’ll have to take a hard look at who’s offering the best rates. But beware, seemingly identical rates can end up costing you very different totals. For example, some lenders offer rates at what they will say is 12%-20%, but without amortization, meaning you pay 112-120% of the total borrowed in equal payments over a given period. That flat rate actually ends up equating to a 35% interest rate because the principle isn’t reducing every month. The Element Finance team put a nifty loan calculator together which can help you calculate these real costs and make sure you aren’t being swindled, check it out.

Rose Yao
Strategy
Product
What is Product Strategy?

🔪 Hearing “you’re not thinking strategically” has to be one of the deepest cuts you can recieve in a product related position. But even the best fall down sometimes – Rose Yao spent years building at both Google and Facebook, and couldn’t avoid that exact criticism early in her career. She has since put together a basic product strategy framework to help demystify the topic and show product managers how they can think a bit more outside the box. She includes a couple popular frameworks like the 70/20/10. (70% of time should be spent on existing products, 20% on medium size products/features, and 10% on pure innovation) which have withstood the test of time and are great guides to stick to.

Randy Frisch
Reads
Strategy
Marketing
F#ck Content Marketing

🤬 If you work in a SaaS business where everyone is encouraged to blog, you may want to put on the earmuffs for this stat: 70% of the content written in organizations is never used, and the other 30% is rarely utilized properly. So instead of focusing on pumping out sheer volume, Randy Frisch argues that we should take a step back and think about how to better leverage our content into experiences. His book, F#ck Content Marketing, he explains why personalized content streams (think Netflix and Spotify) are what each SaaS business should be creating, and why it doesn’t take 100’s of articles to get there.


Gong.io
Sales
Case Study
Drinking Their Own Champagne: How Gong Uses Gong

📞 Gong and Chorus.ai are both on the cutting edge of sales intelligence. The tools record/transcribe sales calls, grade them, then offer suggestions on how to improve – down to highlighting the specific topics and phrases that leads to the most closed deals. If you haven’t strongly considered one, it’s worth checking out this piece to see how Gong uses their own product. Close.io also just launched a call coaching feature which allows managers to “whisper” to their reps during the middle of a call. We haven’t tested yet but it seems like it would make loads of sense when onboarding new reps.

Predictable Revenue
Sales
Metrics
7 Critical Metrics to Measure the Effectiveness of Your Sales Enablement Strategy

☠️ Having a killer sales team alone doesn’t guarantee you success – an effective sales enablement strategy is often actually what ends up separating winning sales teams from struggling ones. So if you are looking to grade your own process, these are a few metrics which can highlight where things are going right, or potentially wrong. Keep in mind that just a few reps may be accounting for the majority of your sales (the 80/20 rule often applies here) and that’s ok. You just need to understand where success is coming from in you organization, then you can work to replicate it.

Groove HQ
Marketing
Growth
5 Easy Growth Hacks You Can Implement Today Without a Developer

💽 Low to no code software is all the rave right now because the more your company can do without using precious development resources, the better. Groove HQ published a set of growth “hacks” (a word I regret using as I type...) which don’t even require low code tools, so there really are no excuses! Thoughtful autoresponders for email sign ups are a great example. They are easy to implement, and can be trickled in to supplement new feature announcements and other more ad hoc emails, which will give your subscriber a bit more structure along their customer journey.

Single Grain
Marketing
How to Analyze Your Email Campaign Performance and Optimize It

📧 No matter what sort of SaaS business you work with, we bet email is one of your top, if not the top, marketing mediums. Single Grain offered a helpful refresher on the most important metrics you should be tracking within your email campaigns, as well as some relatively easy ways to improve them via optimizations. Take click through rates for example. Making your content truly relevant and personalized to the individual user (detailed Hubspot properties are a great start, you can upgrade to a full blown customer data platform when you are ready) is the best way to speak directly to your audience, which will increase your user engagement.

Mark Roberge
Reads
Sales
Growth
Case Study
The Sales Acceleration Formula

⏩ Hubspot (NYSE:HUBS) recently announced they beat Q4 2020 earnings expectations by 7%, and more importantly, surpassed 100,000 customers $1B in ARR. It’s an incredible benchmark for the business, and further proof that we should all be paying attention to whatever best practices and suggestions they offer! We are checking out The Sales Acceleration Formula, which was published by their former CRO, Mark Roberge. It gets pretty deep into the weeds, focusing less on big picture innovation and more on how they created a scalable path to get to where they are today.

Andrew Chen
Customers
The Power User Curve: The best way to understand your most engaged users

💪 Every company has power users: users who frequently use your product and champion your brand. We all want more, but to get them you must be able to measure and identify them in the first place. A straightforward way to do this is by looking at your Power User Curve, a histogram of users’ engagement by the total days they were active in a month. It does a better job of tracking engagement than the classic DAU/MAU ratio because instead of just offering one number, it tells a more complete story about user engagement. You will want to see your Power User Curve “smile” (see below), meaning that you have less involved users spiking your chart on the left side, but a strong group of consistent users on the right which should grow over time.

Jeanne Bliss
Reads
Customers
The Chief Customer Officer 2.0

🌟 In the Chief Customer Officer 2.0, Jeanne Bliss takes a deep dive in how you can building customer-centric strategies for growth. The book centers on five core competencies for shifting to a customer-centric mindset; one of them being how to incorporate customer listening paths. Most know that creating these feedback loops is a great way to gather intel, but there can still be a disconnect between what customers tell us and how we incorporate that feedback. A solid suggestion is to organize input by customer lifecycle stage. For example, a new customer will have a very different perspective than a legacy customer who has a history with your product, and monetary value each customer brings should tell you where to focus time. With customers, the squeaky wheel is not always the highest paying, and should not always be the one greased!

Reforge
Growth
Marketing
The Racecar Growth Framework

🏎 Your growth machine is similar to a car (hopefully a racecar) in that it has many moving parts. The complexity of all of these parts can get confusing, but remember, everything starts with the engine, which are core activities that keeps your company moving forward. These will always be self-sustaining growth loops like virality, performance marketing, and content, which can hypothetically stand the test of time. Other supplemental parts like turbo boosts (PR, events, ad buys) and lubricants (conversion optimizations, SEO, brand recognition) will help you drive faster, but should rarely be a focal point of your growth strategy.

The Startup
Product
Development
Strategy
Don’t just ship it: Why we worked on a new idea for 3 years

🕰 When your team is upgrading the product or rolling out a new feature, you want them to be excited. But excitement can lead to rushing things. There’s something to be said for slowing down and taking your time with product development. Quality will always win when it comes to attracting and retaining customers; think of the project management space – there are a million apps. They all do essentially the same thing with relatively similar interfaces. What sets the Asanas and Basecamps of the world apart is the minute details which took time and patience to build. Shipping a product before all the kinks are worked out is a surefire way to kill your company’s retention rate because if V1 tanks, customers won’t always stick around for V2.

Chameleon
Customers
Product
Cohort Analysis: The Key to Data-Driven Product Decisions

🤖 One of the biggest pitfalls of data handling is a lack of context and the ability to give insight into the “why” behind your customers’ behavior. It’s why most data-savvy companies are moving away from your plug and play analytics frameworks and almost exclusively focusing on cohort analysis. For those who haven’t made the leap yet, this summary by Chameleon is a solid write up on cohort analysis basics and how to get going. The one-sentence summary – it provides context to your users’ actions, really diving deep into who is using your product most and where the disconnect points are by mapping out consistent user flows.

Baremetrics
Customers
How to Use Customer Expansion to Skyrocket Growth (+ examples)

🔛 When it comes to customer expansion, there are typically three buckets that revenue can fall into add-on, upgrades, and cross-sales. If you’re a usage-based company, congratulations! Your customer expansion strategy is already baked into your business model. Where companies can get really creative is in add-on and cross-sales. Email and webinars are extremely powerful for both as they are probably the best out of app method to show customers how they can get more out of the product. So develop content and use cases to support it.


SaaS Club
Listens
Marketing
How to Build a SaaS Brand Without Doing ‘Branding’ – with Paul Campillo

✨ Building a successful brand is more than coming up with an eye-catching logo and a well-designed website. It’s about bringing your product to life. Paul Campillo recently went on the SaaS Club podcast to discuss how Typeform built their incredibly successful brand. His number one suggestion was to not do branding, and instead focus on positioning. What he means by this is truly focus on what makes you stand out in your niche. Another element of their marketing strategy Typeform did well was talking to their early customers and developing really solid customer stories. He credits customer transformation as the most exciting part of these brand stories.

Intercom
Design
Product
Sweating the details: Designing improvements to our product navigation

🎨 Teams iterate on their products and build out new features to increase functionality and differentiate from the competition. But they rarely think about the impact those additions have on their software’s UI/UX. Intercom found that many of their customers became frustrated with the app navigation after numerous changes to the product. Realizing they had made a mistake, they decided to take action. Their redesign prioritized two things above all: only focusing on the most used areas of the navigation screen and simplifying their design elements. Simplifying is where they won – the product became intuitive to their customers’ needs (we can vouch) and became much more sticky.

David H. Maister
Reads
Marketing
The Trusted Advisor

💼 In David Maister’s book, Trusted Advisor, he explains how to effectively build trust between clients and consultants. While not the target audience, the approaches laid out in the book are helpful for everyone from sales reps to CEOs, as the foundation of any relationship with those you work with is trust. One of his critical pieces of advice on relationship building is to consciously remove your ego from work situations. When building a relationship with anyone (clients, team members, and investors), the goal is to actively listen and find common ground with them, not convince them of your accomplishments.

Allen Miller
Growth
Strategy
How to Avoid the “Valley of Death”

💀 You’re a B2B SaaS startup doing 5-10m ARR and you can’t help but give yourself a pat on the back – you found your PMF, have a growing install base (and team), and arrived at a point many companies never make it to. But somewhere in the next phase of 10-50m ARR you will face the treacherous SaaS Valley of Death, where your once stellar GTM machine is no longer sufficient. Oak HC/FT’s Allen Miller believes that decreasing sales efficiency is a clear symptom of a company heading towards the valley, and offers some levers to pull which can help get you back on track. He also wisely suggests hiring someone who has gone through this stage and can call on their past experiences, which will always be invaluable.

From the Blog

Scaleworks Acquires Nextopia, Leader in Real-time E-commerce Recommendations and Personalization

We’re excited to announce that Scaleworks has made its second acquisition from Fund II. Joining the family is a leader in e-commerce search technology, with specific expertise in real-time recommendation and personalization, Nextopia.

News

Scaleworks Acquires SearchSpring, Leader in E-commerce Search

Scaleworks is excited to announce today that we’ve acquired SearchSpring, a company that provides access to advanced searching for online retailers' websites. This acquisition is the first for Fund II, which we announced this past February.

Business

This is Scaleworks Debt Fund, a revenue based lender to B2B SaaS companies

As an avid follower of innovation (in all industries) and having worked and studied Finance for the last twenty years, the rise of challengers to the finance and banking industry is met with open arms.

Finance