5 Learnings from 10 Years of SaaS Investing
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This document discusses 5 learnings from 10 years of investing in SaaS companies. The learnings are: 1) Enterprise customers will pay more so increase pricing tiers, 2) Paid marketing may not scale so invest in product/content, 3) An early VP of Sales is often the founder, hire for the right growth stage, 4) Understand the types of customers ("animals") to target based on average revenue per user, and 5) Align customer acquisition costs with lifetime value to avoid startup graveyards.
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5 Learnings from 10 Years of SaaS Investing
- 6. www.theangelvc.net @chrija 5 Learnings from 10 Years of SaaS Investing
- 8. www.theangelvc.net @chrija SMB vs. Enterprise Pricing How you should be pricing SMBs Enterprises Your pricing Price SMBs Enterprises
- 9. www.theangelvc.net @chrija Learning #1 Ask enterprise customers for more $$$. Increase the spread between your entry plan and your higher tiers.
- 10. www.theangelvc.net @chrija 2. Scaling paid acquisition
- 11. www.theangelvc.net @chrija Scaling paid marketing Marketing spend CACs Your projections Your actuals
- 12. www.theangelvc.net @chrija Learning #2 Don’t assume that PPC will scale. Invest in product and content. NPS matters. If ARPA big enough, try outbound sales.
- 13. www.theangelvc.net @chrija 3. Hiring a VP of Sales
- 14. www.theangelvc.net @chrija „The 48 Types of VP Sales“ YOU
- 15. www.theangelvc.net @chrija Learning #3 Your 1st VP of Sales is probably you. Then, find one who can get you to $10-20M ARR. Always hire for the right stage.
- 16. www.theangelvc.net @chrija 4. Getting to $100M in ARR
- 17. www.theangelvc.net @chrija Which animal are you hunting? ARPA (in $ per year) # of customers (in 1,000s) 10 100 1,000 10,000 100,000 10 1 100 1,000 10,000
- 18. www.theangelvc.net @chrija Learning #4 Know what animal(s) you’re hunting. Align your CACs (and CoGS!) with your ARPA.
- 21. www.theangelvc.net @chrija Learning #5 Align your CACs with your ARPA. (yeah, sorry, I said this already, but this is important)
- 22. www.theangelvc.net @chrija Thank you! More SaaS learnings: www.saaslearnings.com www.theangelvc.net Questions? christoph@pointnine.vc
- 24. www.theangelvc.net @chrija You get a Term Sheet nobody wants to invest everybody wants to invest Time Investor interest
- 25. www.theangelvc.net @chrija Getting to PMF Time PMF How you get to PMF How it’s probably gonna look like think you’ll
- 26. www.theangelvc.net @chrija Company rank Return How you think What it really looks like Power Law 301 15 Power Law looks like
- 27. www.theangelvc.net @chrija Should I go through an accelerator? Is it YC? YES No Go for it! Do they want > 6%? YES RUN AWAY!!! No Think about it
- 28. www.theangelvc.net @chrija Finding good engineers engineers looking for a new job open positions
- 29. www.theangelvc.net @chrija Contracts Number of pages % of pages with a >0 chance of ever becoming relevant. 100% 0% 50% 1 200100 Legal fees ¤5k ¤100k
- 30. www.theangelvc.net @chrija When corporates discover „entrepreneurship“ We need more innovation! Let’s start a Corporate VC. Let’s spin.-off the VC. oops, we’re not attracting the best and the brightest. Let’s start an incubator. Let’s do an „intrapreneur program“ oops, we’re not attracting the best and the brightest. oops, we’re not attracting the best and the brightest.