Presentation deck from SaaStock 2019

1. Common Sense
Business
(in a world gone mad!)

2. 10 lessons we’ve learned in acquiring and
accelerating 12 SaaS business originally doing
between 1m and 10m annual revenue.

3. Capital Efficient - Principle Driven - Growth Focussed - Value Investors.
● Founded 4 years ago
● Raised $150m in 2 Funds (and a Venture Finance fund)
● 12 Acquisitions (9 Core, 3 Add-On)
● 3 Exits (700% return on capital)
● ~$55m ARR in current portfolio

4. Don’t Confuse Cash
Cash = How much money I have in the bank (excluding what I’m owed and what I owe but
including what I’ve been paid in advance for).
Cashflow = How much money flows into my account each month (good indicator of how
much I can spend stress-free).
Profit & Loss = The revenue and expenses I’m booking (and accruing) each month, but not
necessarily getting and paying. The bottom line is not the cash line!
Lesson #1
Cash, Cashflow, Profit & Loss are different!

5. Lesson #2
Always Have a Margin of Safety
● 6 Months ‘Runway’ - or better - Default Alive
● ‘Notional EBITDA’ = can you be profitable in 30 days if you reduce spending?
● Net Positive Install Base (over time customers tend to use more and pay more)
(If something doesn’t pan out - can you survive?)

6. Lesson #3
Be Selfish with Equity
● Most SaaS Companies, post ‘friends & family’ round, don’t need Venture Capital
● Consider alternative sources of funding: debt, pre-payments. Manage accounts
receivable.
● Your Equity = Your Decisions → Your Exit Time Frame → Your Exit Price → Your
Returns

7. Lesson #4
Reward Performance (not just time)
● Cash bonuses don’t work.
● Time is a poor indicator of success.
● Performance-based equity grants - blend with Time-based Grants
● Keep simple: performance = growth.
● Prevents the ‘waiting to get vested more’ approach.

8. Lesson #5
Hire Fast. Fire Fast.
● Reality is Hire Fast, Fire Slow!
● The ‘Grey-Zone’ people are the real tough ones.
● Grey-Zoners hold back the team and the company performance. And themselves.
● How many times have you let someone go and said ‘I did that at just the right
time’?!

9. Lesson #6
Hire Potential over Experience
● Great CV is irrelevant if not a culture and values fit.
● Hire the people who are going to be great in their next job. And make your position
their next job.
● Hire the person who is going to be a VP in their next role (or promoted to that in
their current company).
● Recruiting isn’t difficult, it’s just Hard Work.

10. Lesson #7
Gates of Trust
● For new hires - the gates are cracked open - you hand-hold and approve decisions.
● As they get more comfortable with your culture and principles - the gates open
more - you provide coaching and regular check-ins.
● Once they have a ‘gut feel’ and generally default to the right decision - the gates
open fully and you empower, and trust.
● If you don’t do this - you risk a potential winner getting started on the wrong foot
and ruining their chances of succeeding.

11. Lesson #8
No Amateur Mistakes
● Signups / MQLs get contacted, quicky and regularly. Leads get closed.
● Emails get responded to. Tweets are watched. Support tickets are triaged and
always updated.
● AR - Accounts Receivable - and Expired Credit Cards - get collected!
● Make sure the things in your control, are done well.
The little details really add up to move the needle - in either direction

12. Lesson #9
Focus out the Leading Indicator
● Lagging Indicators tell you how things are going: Revenue. Leads. Visitors.
● Figuring out the Leading Indicator - those activities that customers do that in turn
drive usage and revenue - the results will follow.
● Examples: Number of Tasks Created (for a Project Management Tool). Number of
Documents Handled (for a File System).
● Then focus your activities on increasing that metric.

13. Lesson #10
Charge the Right Price
● Price is the most powerful and least effort lever.
● It’s amazing how infrequently price is discussed, and changed.
● Your product, market, customers, features, are evolving. So is your value. Your price
should too.
● Price is a signal of where you want to be perceived in the market.
● Best and cheapest is not reality.

14. Ed Byrne
www.scaleworks.com
ed@scaleworks.com
@edbyrne
Thank You!