What’s Up in SaaS
Recently I attended the world’s largest event for SaaS founders, execs and investors SaaStr Annual in San Francisco. As someone who has had both the COO and CMO hat on in helping build Mynewsdesk from a $1m to over $20m annual recurring revenue (ARR) SaaS company I went there with three goals in mind.
- Seek inspiration for future growth
- Get confirmation that what we are focusing on right now is correct
- Network with the industry’s best minds.
Here are my takeaways.
SaaS is Bigger Than Ever
I attended SaaStr in 2016 and there were 5,000 attendees but this year year that number had doubled to over 10,000 attendees from over 50 countries. It is clear that Software as a Service (SaaS) is now the dominant delivery and business model in the software industry.
There is now it seems multiple SaaS companies for every industry and segment you can imagine and every entrepreneur and investor wants to get in on the act. One of the key ingredients for longterm success is finding what sets you apart from your competitor set.
Machine Learning over Artificial Intelligence
One of the things that can set a SaaS company apart from their competition is their use of machine learning. An excellent presentation was given buy Tomasz Tunguz, partner at Redpoint Capital on the uses of AI & Machine Learning for a SaaS company.
It was nice to see how he told the audience not to worry too much about AI. He used the example of how a self driving Uber/Volvo which recently ran out of gas to illustrate how we weren’t quite there with AI yet and how humans were still needed in many instances.
Tomasz identified for a SaaS company machine learning was much more relevant and the applications that could be used included
- Identify Objects
- Detect Anomalies
- Segment data
Clearly a fan on speech recognition and it’s affect on the optimisation of sales teams Tomasz has recently invested in Chorus.ai . There are thousands of sales productivity SaaS companies out there but Chorus obviously got his cash due to the fact it is using machin learning to improve a companies sales efficency and that makes them stand out amongst the competitor set.
He also clearly highlighted what investors are looking for in SaaS investments in the Machine Learning space.
- Proprietary access to data
- End to End Applications not platforms
- Strong Go-To-Market advantage enabled by machine learning
- Experts in the field
- Algorithmic advances
If you are an entrepreneur and your product has these applications and capabilities I would suggest that your fundraising environment will be very favourable in in the coming years. Have a look at Tomasz’s excellent blog post on the subject if you want to know more.
One of the areas that was discussed in many presentations was the subject and importance of Net Promoter Score (NPS). One of the key success factors for a successful SaaS company to scale is to monitor, manage and improve their NPS.
This is a subject that deserves a full blog post but it was nice to see in amongst the financial metrics that the SaaS industry fixates upon including CAC, CLTV, ACV and many other acronyms that the power of the recommendation economy is coming to the fore as a key metric of healthy growth.
Power of the Crowd
One of the big marketing take-aways from the event was the increasing power of crowd review sites like G2Crowd and Capterra. Just like we all use TripAdvisor before we book a hotel with the consumerization of enterprise software all buyers are starting to use these sites as a increasingly important part of their buyer journeys.
At Mynewsdesk we have not worked actively with this enough but it was nice to see that we had a few reviews on these platforms and will be working more with this going forward.
Over recent years I have been at the helm of a marketing organisation that has been on a roller coaster journey with marketing automation. Compared to many we have come a long way since the time I purchased a software I had no clue how to operate in 2012. However what has always frustrated me in the use of a persons email as the unique identifier of a contact.
Many speakers talked about the opportunities available with data enrichment vendors such as Clearbit enabling the modern marketer to go beyond the simple email address and learn more about their prospects and contacts and that is a world I look forward to exploring.
Getting From $20m to $100m Takes Laser Focus
The of the most important sessions I attended was the lessons learned from three CEOs who had scaled their SaaS companies from $20m to $100m. Exactly the journey we are on with Mynewsdesk. The overall takeaway was that you need to really focus, focus, focus on what drives your business.
- From opportunistic to intentional
- Identify and grow profitable customer segments
- Develop a repeatable and scalable marketing and sales playbook
- Use M&A wisely in adjacent segments
- Increase average contract value
- Ensure you charge for the services you provide
- Concentrate on building specialised and competent people in all functions
- One the competent teams are in place give them the mandate to do amazing things
This is the thinking that has driven the development of Mynewsdesk and I am sure many other successful SaaS companies over recent years but it was nice to have this validated by others that have been successful and I hope some of these takeaways help some of you that are on other exciting growth journey’s yourself.