Ed will look at case studies of companies that were doing well but then got ahead of themselves and scaled too quickly, looking at a range of businesses and calling on his own experience on the boards of B2B companies to examine the signs you're scaling too quickly, the pace you should scale at, the KPIs to pay attention to, the importance of head count and what to do when scale doesn't come as quickly as you think.

3. 75%
30%
Source: https://kitrum.com/blog/4-reasons-why-saas-startups-fail/
https://www.mckinsey.com/industries/technology-media-and-telecommunications/our-insights/grow-fast-or-die-slow
92%
20%

4. Source: https://kitrum.com/blog/4-reasons-why-saas-startups-fail/ 2023

5. 1. Lack of market fit
(Find PMF)
2. Poor product design
(Fix product & churn)
3. Insufficient funding
(Adapt to environment)
Source: ChatGPT

7. Sexy Story Product-Market Fit!
Self – deception Revenue Centric
Vision
Customer Engagement
Source: Adam Fisher, Bessemer Source: Venture Partners, 2019 (https://www.bvp.com/atlas/the-product-market-fit-journey)

8. 2 years
$3m
raised
Team 6
“Use data
science to
improve hiring”
Source: https://www.failory.com/interview/ansaro

9. Source: https://www.failory.com/interview/ansaro
Conflated Buyers and Users
Proof of ROI took too long
Slow to pivot

10. Sexy Story Product-Market Fit!
Self – deception
Revenue Centric
Vision
Customer Engagement
Source: Adam Fisher, Bessemer Source: Venture Partners, 2019 (https://www.bvp.com/atlas/the-product-market-fit-journey)
Solve
recruitment
bias
Bespoke
models
Transcription
tech

11. Don’t mix up the story
or cool tech
Don’t mistake early
adopters or projects for PMF
Focus and double down
on a market that works
If the idea is rubbish stop

13. Founded
2014
c.$14m
ARR
Raised
$103m
Valued
$360m
Sources: https://www.failory.com/cemetery/scalefactor

14. Source: FinTech News

15. Source: https://www.forbes.com/sites/davidjeans/2020/07/20/scalefactor-raised-100-million-in-a-year-then-blamed-covid-19-for-
its-demise-employees-say-it-had-much-bigger-problems

16. Search
for PMF
Create
Repeatable
Model
Scale the
Business
VC
Funding!
Source: Adapted from Zero to 100. https://www.slideshare.net/DavidSkok/zero-to-100-part-1-intro-first-section

17. 5x
90%+
100%+
Gross
Net
𝐺𝑟𝑜𝑠𝑠 𝑀𝑎𝑟𝑔𝑖𝑛 =
𝑅𝑒𝑣𝑒𝑛𝑢𝑒 − 𝐶𝑂𝐺𝑆
𝑅𝑒𝑣𝑒𝑛𝑢𝑒
Source: Software Equity Group
Good
75%+
Most
70%-85%
Bad
<70%

18. Don’t try to scale until you’ve got
product and churn right
Masking churn with sales will come
back to bite you
Be honest with your investors on
growth until you’ve achieved 1

20. SaaS is interesting
Pandemic we’re all doomed
Actually, SaaS is now very cool
We’re all doomed.. perhaps

21. Source: SaaS Capital (https://www.saas-capital.com/the-saas-capital-index/)

22. “More people and
companies can take
advantage of
analytical insights”
Started in
2005
Lasted 4
years
Raised
$15.6m
Last
valuation
$47m
Source: https://www.slideshare.net/dcunni07/lucidera-dashboard-and-trend-number-best-practices

23. Source: https://www.slideshare.net/dcunni07/lucidera-dashboard-and-trend-number-best-practices

24. Source: https://seekingalpha.com/article/144742-lucidera-s-demise-shouldn-t-diminish-saas-and-cloud-computing-promise
https://www.cbinsights.com/company/lucidera/financials

25. Lessons from
2008
(16 listed
companies)
Source: SaaS Capital (https://www.saas-capital.com/blog-posts/how-do-saas-companies-perform-in-a-recession/)

26. Source: https://layoffs.fyi/ Ben Horowitz

27. Notes: Burn target of 1.5x, non-people overheads of 10%, annualised payments, https://octopusventures.com/blog/the-employee-headcount-
calculator-and-responsible-hiring-for-start-ups/
60 employees 40 employees
Solving for Burn
Multiple of 1.5x

28. The beauty of SaaS is you
can buy yourself time!
Don’t be reckless with hiring as
letting go is very hard
If you’ve exploded your cap table
get to cashflow breakeven