Tom Tunguz

MAY 23, 2016

Enterprise companies average contract value is greater than $100,000. Mid-market companies span $10,000-$100,000, and SMB companies generate less than $10,000 per year per customer. It is not uncommon for a SaaS company to start in the small to medium business segment and push into the mid-market.

Outsourced Development 153

Outsourced Development SaaS SMB Enterprise 153

Sales Hacker

MARCH 22, 2018

In this article, I will summarize what I’ve learned about B2B sales outsourcing. W hat is Sales Outsourcing? Sales outsourcing gives parts of your own sales process to others (individuals or agencies). Reasons to outsource include: Lack of expertise and experience in some sales functions (e.g. Lead Generation).

Outsourcing Services 100

Outsourcing Services Sales Outsourcing Outsourced Development Scale 100

SaaStr

AUGUST 2, 2021

But developing solid partnerships takes vision, grit, time and patience. Technology Alliances: The tech alliances offer important integrations, especially critical for ServiceNow’s target market of enterprise customers. This early phase is where you’re still looking for that perfect product-market fit and scaling the product to market.

Outsourcing Services 284

Outsourcing Services Scale Scaling Outsourced Development 284

SaaStr

NOVEMBER 30, 2023

Go-to-Market matters because sales and marketing spend remain the biggest proportion of SaaS spend, so honing in on that spend to build an engine and drive growth is paramount. But to develop a GTM strategy, you must have Product Market Fit. The Early Stage — $0 to $20M ARR The early stage is crucial for GTM.

Scale 274

Scale Sales Hiring Scaling Outsourced Development 274

SaaStr

JULY 15, 2022

But I almost never see mediocre outsource SEO really work for B2B. As a tiny startup who might be commercializing its first product, are there any general guidelines that you can stick to that would prevent the massive companies out there from crushing the baby? Experiments are great to outsource, but you cannot outsource your core.

Scale 293

Scale Outsourcing Services Sales Hiring VP of Engineering 293

Tom Tunguz

MAY 1, 2023

Conversations about contracts & pricing are kicked down the road until the customer sees value & the path to capture it. AEs, experts in closing contracts, often focus on reducing sales cycle & maximizing contract value - which aligns with their incentives & compensation plan.

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Scale Engineering Outsourced Development Sales 211

Tom Tunguz

OCTOBER 19, 2016

What is the optimal contract length with for your SaaS startup? It’s common to see SaaS startups initially price their products on a monthly basis, then add an enterprise “Call Me” plan which hides behind it an annual contract. Annual contracts bring predictability to a SaaS startup.

Outsourced Development 100

Outsourced Development SaaS Payments Startup Sales Hiring 100

SaaStr

SEPTEMBER 11, 2024

It required Lucid to change its product, process, and overall user and administration systems to be able to scale with the customer. It also required them to: Negotiate their first Enterprise customer contract Undergo deep security reviews Once you land your first Enterprise customer, it might be time to build that first sales team.

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Scale Scaling Sales Hiring compliance 307

Tom Tunguz

DECEMBER 2, 2018

Annual prepay contracts - wherein customers pay for a year’s cost on day - is a free loan from customers. There’s only one requirement: you must be able to sell your product while you’re building it. Step 1 is reaching product market fit, the point at which some group of potential customers will pay.

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Sales Hiring Outsourced Development Finance Startup 226

SaaStr

OCTOBER 25, 2023

Q: Should Product Marketing Work for Product or Marketing? Product marketing is a weird art, with many over-indexing. These days, CEOs are looking for too much magic from product marketing. Maybe we expect too much, even up to $10-20M ARR, and expect magic from product marketing.

Scale 284

Scale Sales Hiring Sales Recruiting AI 284

SaaStr

NOVEMBER 24, 2021

Says Roberge, “We’re using a sales comp plan that was invented in the 1980s, and it’s causing our customers to utilize their licenses at a lower rate, and it’s causing revenue contraction.”. It includes leadership development courses, and responsibilities of managing and hiring one or two reps to get experience. .

Sales Hiring 257

Sales Hiring Scale Compensation Sales 257

SaaStr

NOVEMBER 1, 2022

AI is likely the next platform, dev tools are strategic given the scarcity of developers, cybersecurity is front and center for enterprises, and the data stack is still going strong. The former CRO of a successful prosumer SaaS company shared how they gave away free annual licenses for all new users over and above the ones contracted.

Scale 293

Scale Sales Hiring Underperforming Technical Team Cybersecurity 293

Tom Tunguz

JUNE 21, 2022

Second, UBP reduced friction for individual developers to tinker with the APIs. AEs retired quota by closing annual contracts for a base level usage. AEs deliberately undersized the contract commitment to ensure customer happiness and create opportunities to re-engage the customer for expansion.

Startup 203

Startup Sales Hiring Outsourced Development Compensation 203

Tom Tunguz

JULY 21, 2013

That’s why I think there ought to be an additional step in the Product Market Fit process , the image at the top of the page. This step begins after Customer Validation and before the scaling of the sales and marketing teams in Customer Creation. This step should be called Customer Engagement.

Product Marketing 100

Product Marketing Engagement Scale Startup 100

SaaStr

MAY 24, 2024

Lemkin expresses concern about the changing work ethic and loyalty of sales and marketing professionals, observing a trend of multiple job-holding and lack of commitment. Having marketing report to the CRO can lead to short-term focus, lack of control, and absence of yin and yang balance.

Sales Hiring 293

Sales Hiring Outsourcing Services Technical Review Scale 293

SaaStr

MARCH 1, 2024

We’re on the cusp of a golden age in AI, and the lesson learned from Cloud was that Cloud sped up the pace of development by a lot. At Base10, they expect to see the speed of development and deployment accelerate so dramatically that it will make our heads spin. Microsoft is a master class in strategy for us.

Generative AI 293

Generative AI Outsourcing Services AI Software Review 293

SaaStr

DECEMBER 27, 2023

Between 2016 and 2023, you see the ACV (average contract value) going up and up. Over time, they realized the product value was best spent with high-complexity organizations. As a result, the contracts got bigger because they were working with bigger companies. Undercharging in the early days is a common story.

Sales Hiring 277

Sales Hiring Scale SMB Outsourced Development 277

Tom Tunguz

SEPTEMBER 19, 2012

As every SaaS startup transitions from development to growth, the company must supplement the engineering and product capability with sales, marketing and account management. How well is product converting prospects to qualified leads? At what rate and at what contract value can sales close customers?

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Outsourced Development Development Engineering Startup 100

Tom Tunguz

AUGUST 14, 2017

Once a business established product market fit, the cash conversion cycle is a key metric of a company’s cash efficiency - how quickly a company can convert a dollar of investment into a dollar of cash flow. Sales cycle is the number of days from first engaging a customer to when the customer signs a contract.

Startup 189

Startup Sales Hiring Payment Solutions Payment Services 189

SaaStr

JULY 25, 2022

By doing this, you will gain a better understanding of the pricing elasticity in your market and how compelling your product-market fit is. If inflation-based increases are built into your contracts, ensure these are being upheld. SaaS markets are not static, they are constantly developing and evolving.

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Pricing Strategy SaaS Forecasting 274

FastSpring

MARCH 3, 2023

When you’re using a DIY payment solution like Stripe, making it work for your business falls on your developers. What if, instead of spending so much time making your payment stack work for you, your developers could focus on your product? And this leads to our third point.

Merchant Services 148

Merchant Services Payment Services Outsourcing Services SaaS Payments 148

Tom Tunguz

OCTOBER 27, 2015

To achieve best-in-class quota attainment, a startup must execute the go-to-market strategy well across five dimensions. SaaS companies generate leads in many ways including through sales development reps, search engine marketing, paid social, lead capture on the home page, events, customer referrals, evangelists and channel partners.

Sales Hiring 197

Sales Hiring Startup Scale Marketing 197

SaaStr

MARCH 22, 2023

They asked themselves, “what if we moved to some motion of licensing contracts?” Instead of selling products, they were selling aspirational concepts and business value. It’s necessary, in every new market you go into, to go in and soften the beach. This changed the conversations with customers. This is important.

Scale 259

Scale Scaling AWS Sales Hiring 259

SaaStr

JULY 25, 2021

Do you have to still find the right product market fit, you have to build a good product, you have to service the customers, you have to compete in the market. In this conference that’s a important thing like, you know, as companies start, they start getting a product market fit. None of that changes.

Sales Recruiting 261

Sales Recruiting Sales Hiring Scale VP of Engineering 261

Totango

OCTOBER 14, 2024

A dated focus For years, getting to “product-market fit” was the holy grail. Hit that, and you aren’t even really selling , you’re simply fielding contracts. When the company is focused on customer ROI, Marketing can develop campaigns around that ROI, and sales can qualify prospects based on their need for that return.

Scale 71

Scale Marketing Finance Outsourced Development 71

Aaron Beashel

MARCH 9, 2018

Obviously Product/Market fit is a big factor here, but assuming you have a relative level of Product Market fit, I think the next thing key factor is having the right Go To Market model. MyEmma (Inside Sales) – MyEmma is an email marketing tool that uses an Inside Sales model to acquire customers.

Scale 192

Scale SaaS Payments B2B Strategy 192

SaaStr

APRIL 30, 2022

Basically you can more easily start using products. The second constituent there is the developer. Why do developers love SaaS products? They love SaaS products. They love consuming SaaS products not because of the billing model, but because of the delivery model. It depends on the product.

SaaS Payments 246

SaaS Payments Metrics Payment Methods Scale 246

SaaStr

APRIL 2, 2023

Eventually, you end up with 2000 contract types for 1000 customers. Since clients use you differently, they can’t always use new functionality that you develop. But this process was also hard: We had to get alignment across Product, Marketing, Sales, CS, and PS on what our end-to-end value (from 30K feet to 30 feet).

Sales Hiring 329

Sales Hiring Scale Customer Success Scaling 329

SaaStr

FEBRUARY 11, 2020

If you’re big enough to have sales and marketing, because I know some of you aren’t, they don’t always work together. It’s a new presentation he’s developing. First, you get product market fit, then you create predictable revenue, and then you scale. Anyway, skipping a step. Okay, maybe 96%.

Scale 276

Scale Outsourcing Services Revenue Outsourced Development 276

SaaStr

AUGUST 12, 2020

And, the second system is what I call the product marketing system. I’ve seen V2s that were supposed to take a couple of quarters end up being literally years late, and it paralyzed the development road map of the company. So, the first insight is that there’s two key systems in a startup.

Startup 293

Startup Software Review Scale Systems Review 293

Intercom, Inc.

JUNE 7, 2018

When Sean Ellis joined Dropbox as the company’s first marketer, he was tasked with creating a culture of growth and experimentation. This wasn’t just a line item on a goals sheet; it was written into Sean’s contract. Developing a growth culture at Dropbox. That was actually in my contract.

VP of Engineering 196

VP of Engineering Growth Hacking Underperforming Technical Team Onboarding 196

The Angel VC

APRIL 1, 2017

That means that you’ll have to: screen around 500-1000 CVs interview around 100 people do 2nd and 3rd interviews with around 20-50 people do a few dozen reference calls negotiate compensation and an employment contract with 10 people The numbers can obviously vary greatly, but you get the idea.

Sales Hiring 168

Sales Hiring Sales Recruiting Startup Software Review 168

SaaStr

JUNE 10, 2021

In the 2000s, we turn into software licenses where we sold support contracts on top of them. So you need to think more broadly about the whole product, what it contains, what it is built up. It does make product management and innovation and development that refer to our own product roadmap more complex.

Outsourcing Services 162

Outsourcing Services Marketplace as a Service Outsourced Development Scale 162

OpenView Labs

FEBRUARY 6, 2020

Editor’s Note: This article is part three of a four-part series that covers the most crucial product marketing activities for an early-stage startup. Ok, we tested the product out with a few potential customers. Sales and Product Marketing. This is personally one of my favorite parts of product marketing.

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Scale Product Marketing Sales Hiring Scaling 52

Intercom, Inc.

NOVEMBER 3, 2022

Your product marketing is so on point – the way you’ve been able to facilitate this self-serve and onboarding journey that is relatively frictionless, and the way that you position yourselves in the broader market. And with that, the orchestration layer, the planning, and the scheduling developed many more complexities.

Scale 206

Scale Outsourcing Services Software Sales Hiring 206

Intercom, Inc.

FEBRUARY 1, 2018

It was what I later learned was the classic startup experience of really smart founders and founding team have an idea that’s really clever, don’t validate it at all in the market, build a product, build out a team, realize they don’t have product-market fit, and just freak out and don’t know what to do.

Growth Marketing 174

Growth Marketing Scale Marketing Outsourcing Services 174

Sales Hacker

MAY 15, 2023

We’re approached multiple times a day by lead generation companies or outsourced sales companies who are either paid on retainer — regardless of performance — or paid on performance. Hiring a sales team too soon can lead to issues like: Your team tries to sell a product to a market that doesn’t need it or want it.

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Sales Hiring Scale Outsourcing Services Payment Services 104