Benchmarking Your SaaS Start-Up with Emergence Capital, Storm Ventures, Talkdesk, Guidespark

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How well do I really need to do to go big? To be outlier? To be the Top 10% of SaaS companies? Or really ... just to survive and make it?

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Benchmarking Your SaaS Start-Up with Emergence Capital, Storm Ventures, Talkdesk, Guidespark

  1. 1. Benchmarking SaaS Start-Ups: How Am I Doing? Really? Brian Jacobs General Partner, Emergence Capital @brian_emcap Jason M. Lemkin SaaStr; Managing Director, Storm Ventures @jasonlk
  2. 2. Brian Jacobs Founding Partner, Emergence Capital Investors in Salesforce, Successfactors, Veeva, Yammer, Box, InsideView, ServiceMax, Bill.com, EchoSign, Hightail, Lithium, etc.
  3. 3. Jason M. Lemkin SaaStr Founder Community – 1m Views/Mo Managing Director, Storm Ventures Founder/CEO – EchoSign/Adobe Investors in MobileIron, Marketo, EchoSign, GuideSpark, Metacloud, Sandforce, etc.
  4. 4. Benchmarking – What We’ll Discuss •The Journey •The Numbers: The Good, The Bad and the Ugly •Funding: Who Gets Funded, & Why •The Live Case Studies: – Early-ish Stage: TalkDesk: $150K to $2.5m ARR in 12 mos.; the next phase – Growth Stage: GuideSpark $1.5-$20m in 24 Mos. (but it took a while to get there)
  5. 5. The Journey What Matters – And What Doesn’t • The Best SaaS Companies Get to $100m in 7-10 Years • Outliers are rare: Workday, Salesforce, DropBox, but few others • Pace to $100m: – Box: 7 Years – Hubspot: 8 Years – Marketo: 6 Years – Zendesk: 8 Years – MobileIron: 6 Years – Veeva: 5 Years ($1m+ ACV) – LinkedIn: 7 Years
  6. 6. The Journey What Matters – And What Doesn’t • But … Really Doesn’t Matter How Long it Takes You to Get to Initial Traction (first $1- $1.5m) • Some get there in 1 Year. Some take 3+ Years (GuideSpark). It doesn’t matter – if you are committed. • Key is Not to Burn Out Around Year 4-5
  7. 7. The Journey What Matters – And What Doesn’t • After Initial Traction, Growth Rate is Critical • Then … – Best SaaS Companies go $2-$10m ARR in 5 Quarters or Less (>=15% MoM); 20% Outlier – Key is Momentum as pass $10m ARR (100%+ Growth Once Cross It)
  8. 8. While Most Attention is Focused on Latter Stage Growth of Public/Acquired SaaS Companies… get to $10m … Average $10m to $100m in 4.7 Ys. …Early Stage Growth is Arguably More Important
  9. 9. This is Why: You Need One 3x Yr, And Then >=2x Each Yr
  10. 10. Top SaaS Players Grew Quickly Pre-$10M in Revenue Annual Revenue Growth Before Achieving $10M in Revenue Max: 983% Target Range Mean: 291% Min: 36%
  11. 11. Without Sacrificing Sales Efficiency Average Sales Efficiency Before Achieving $10M in Revenue Note: Sales Efficiency = Change in Yearly Revenues / Previous Year’s Sales and Marketing Spend Max: 512% Target Range Mean: 164% Min: 45%
  12. 12. The Live Case Studies: TalkDesk and GuideSpark Potential Outliers
  13. 13. Talkdesk: Getting to 20% MoM Growth – From Nothing From Hackathon, to Product-Market Fit • Talkdesk – Top Desk.com Partner • Call/Contact Center in the Cloud • History: – Started off winning Twillio & SFDC hackathons – Then productized – Then monetized – Hit Initial Traction ($1.5m) 16 mos. After Launch – with increased velocity (20%) – On pace grow $1m to $10m in < magic 5 quarters
  14. 14. Talkdesk: Getting to 20% MoM Growth – From Nothing From Hackathon, to Product-Market Fit • Q&A • Keys to igniting growth: – Partners and integrations (takes time) – Driving ACV and deal sizes up (to six figures) – Upgrades key: < 20% of target ACV bought upfront today – Understanding how do true enterprise-grade implemenations --- even for SMBs :) – Pricing for value – Lead growth > Revenue Growth = VPS + Raise $$$
  15. 15. Talkdesk: Getting to 20% MoM Growth Post-Initial From Hackathon to Product-Market Fit to Outlier • Brian Jacobs: • Would you do the Series A? • Is It In the Ballpark vs. Other SaaS Investments? • Why or Why Not?
  16. 16. Case Study #2: Guidespark: 5 Years to Outlier Three+ Tough Years to Initial Scale. Then – Acceleration. • GuideSpark: Employee Communications in the Cloud – Instead of In-Person • History: – Started off as more generic e-learning platform – Struggled for product-market fit until found one core use case, and one core enterprise customer – Doubled down on (x) enterprise + (y) employee communications – Hired their Great VP of Sales at ~$1.5m ARR – once real business model proven and first enterprise customers closed
  17. 17. GuideSpark: Outlier Growth Post-Initial Scale A Long Journey to The Top • Brian Jacobs: • Would you do the Series C? • Why or Why Not?
  18. 18. Come To Dreamforce to See the Rest! Wed Oct 15th! @ 1pm http://bit.ly/saastrdf

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