So "SaaStr Inc" revenue run rate fell to $0 in March+April with Covid ... and now is at a $3.2m run-rate, with a goal of $21m in 2021.
That's a big tilt, and a lot of change
The stakes weren't that high, but it was a second life learning on "tilting"
Here's what I learned:
1. Folks process change at different rates. Co-founders can process change the fastest. Some folks though need 10x-20x longer.
You need to >explain< rapid change many, many more times than you think.
2. Some good folks just won't go on that next journey with you. Some folks just won't want to go through the "tilt" and change. They didn't sign up for the new journey.
3. Give folks more time in a tilt. Related to point #1, but in a tilt, even some of the best folks may need 100 days to not just process change, but internalize brand new ways of doing things
But once they do, amazing things can happen
So give your top performers more time
4. Don't overload your top performers. This is tempting in normal times, but even more so during change. The top engineer, the top VP, the top leaders take even more on their shoulders.
As CEO/founder, you need to make sure they don't take on so much, they break.
5. The real leaders, post-tilt, come out better than ever. Promote them. Invest in them. Rebuild around them.
And watch who pokes their head up above the clouds.
The leaders you didn't know you had.
6. Finally, broken record here -- but go talk to your customers. They didn't know what they wanted in March and April (either). But they adjusted.
Your customers can't see the future very well.
But they sure can see the present. They can show you that. If you listen.
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So Freshworks hasn't been immune to macro issues, but its bigger customers continue to grow and scale at an impressive rate
It's at ~$600,000,00 ARR today, growing 20%. But the bigger customers are growing much faster.
5 Interesting Learnings:
#1. Bigger Customers Keep Growing, But SMBs Have Slowed
A common theme across tech today. Freshworks has 51,700 customers at around $2k ARR, with a quick sales cycle of just 25 days. But in contrast to their bigger customers, the macro environment — or perhaps market saturation — has led to slowing growth in their SMB segment in 2023.
#2. Leveling Up PLG to Accelerate SMB Customers, Including More Attention to Onboarding
It can seem hard to invest heavily in small customers, but if you don’t especially invest in their onboarding, that’s a big shame. Because there are few things worse than closing a customer that never actually uses your product. So much wasted energy getting them there.
"Don’t take the easy route. Your customers will want things that are fairly easy to build, and you’ll understand those problems well, because they are adds-on to what you are already selling.
But these rarely move the needle."
Peter Gassner, CEO Veeva
“It’s critical to be truly multi-product by $100,000,000 in ARR … and the biggest mistake is trying to sell to different ICPs” — Spencer Skates, CEO Amplitude
I can be slow sometimes, but it’s taken me a while to understand what’s >different< in SaaS in 2023
Budgets are tighter, but SaaS is still growing, folks are still buying more software than ever
Here’s what’s different:
2023 is the first time SaaS itself got harder since 2005
SaaS has never been truly easy outside of a window from mid-2020 to late 2021
But every year, it got easier and easier. Not easy, but easier and easier:
There was a bump in 2016 when budgets were slashed, but it didn’t last long enough to really impact renewal cycles
Even the 2008-2009 downturn, while brutal, didn’t hit SaaS as hard as the rest of the economy. The best of us kept growing, albeit with elevated churn through 2010