SaaStr 740: The Top 10 GTM Mistakes I See Founders Making Today with SaaStr CEO and Founder Jason Lemkin

A
Welcome to the official Sastre podcast, where you can hear some of the best Sastre speakers. This is where the cloud meets. Hey everybody, we're so close now to Sastre Europa 2024. Me and the entire SASTR sales team and over 3000 SaaS and cloud enthusiasts will be together June 4, two and fifth in London, England. Everyone from around the world will take over London.

We're down to the last chance tickets, so use my code Jason 20 to save 20% off the last tickets. Now that's Jason 20. Why pay more?

This episode is sponsored by our good friends at Pendo, the all in one product experience platform. Pendo brings together product analytics, guides, discovery and replay so you can improve your product experiences for every customer and employee. Try pendo for free at Pendo IO Sastr. That's pendo IO sastr to try pendo for free.

Get more when Northwest registered agents start your business, they'll form your company fast and stand up your entire business identity in minutes. That means business free domain business email, website hosting address, mail scanning, business phone app all within minutes. Visit northwestregisteredagent.com Sastr to start your business today.

Ready to take your business global with Remote.com comma, it's effortless, from onboarding to payments to compliance, our expert support, and all in one solution. Have you covered? Choose Remote.com and embark on your journey to worldwide growth with confidence.

B
Today we're honored to have Jason back with us to talk about a question. He gets asked a lot about being successful as a founder and go to market strategy. So he's going to be going over ten go to market mistakes that he sees founders making today and some strategies on how to overcome and what to do when you're stuck in these situations. Always. We know this is going to be filled with so many amazing tactical learnings and hot takes, as always, reliable.

From Jason Jason, welcome. Thank you for joining us. If you've read Saster or been part of our content for over a decade, some of it may be familiar to you, but I've I literally had probably a half dozen conversations with CEO's between five and 25 million in AR just the last couple of weeks saying, jason, can I pick your brain? And busy. We have SaS Europa coming up June 4 and fifth.

A
I hope to see you there. But I did a few of these with folks I knew and I saw history rhyme. History continued to repeat itself. And look, the world is actually, I think the world for hiring, for people, for scaling is significantly different today than it was pre March 2020. I think we've changed as people.

I think expectations have changed in the workplace, but there's still just these mistakes we keep making again and again. So I thought I would to myself dust off and think okay, of all the founders, the great founders that I've talked to over the last 30 days, what are the mistakes were all still making? I thought id list them out, go through some quick tells, some quick cheat codes so you dont make these mistakes. Then we can open it up to some questions. And this first one, when I started Sastra I never wrote this because I didnt realize how critical it was.

Its that do not, whatever you do, whatever you do not hire ahead of sales that before day one cant demo the product. They cant demo the product. And I took this for granted. In the early days im not sure my first VPL sales could have demo, but the good one. I hired Brendan Cassidy who had been who went on to be VP of sales at Talkdesk and helped put together all the original gong revenue team and was the first set of sales at LinkedIn.

I didnt have to know this because hed actually been a customer. LinkedIn had been an early Adobe sign echoesign customer. So he didnt know all the nuances of the product. But I didnt have to. I didn't have to say hey, did he actually know how to demo use the product?

He'd already used it 100 times. Also, frankly, if you sell a product that is sales related or revenue related, your sales team probably can pick it up if it's not that far from what they're doing. But the huge mistake I see founders still make is they hire someone that is selling a space that vp of sales hasn't done before. They're doing vertical SaaS, they're selling to governments. They're selling a more complicated product than they've sold before.

And the VP of sales all talks process and people in process and they have great demos and Gantt charts and charts and talk about their hiring philosophies and their views of revenue attainment and quotas and they just never learned the product. And I have found again and again, if they dont learn the product before they start they never do. Im not saying the best of the best cant. Im sure there are some elite level folks that truly can, but boy they just cant. And ive seen this stumble again and again.

And I just talked last week to a founder just crossed 10 million ARR with the hybrid PLG sales led motion that the PCG, the self serve sides going really well. The bottoms up. The sales guy hes hired, its been twelve months. Hasnt closed anything. Hasnt closed anything.

Theyve got the leads, theyve got the groundswell, theyve got the PLG, and its a fairly technical product. So I stopped them. I said, can he demo the product? He's no, he needs a sales engineer and a solution architect and his right hand man, I'm like, did you ever ask him to demo the product before he hired him? He was like, no, he came from this great company.

And look, in the old days, before March 2020, I never saw a rep, let alone a VP of sales, be hired before they did a demo. Used to do it in the office, used to go in and you'd make them pitch in front of the whole sales team, the room. We stopped doing this for sales reps. In many cases, maybe not the best, but so many of us did. We lowered the bar when things were boom.

We all changed as we became hybrid and distributed teams. But boy, I got to tell you, I think 80 or 90% of founders never forced the VP of sales to demo learn the product. Before we start, I can give you so many other stories. Another one which I shared a while back, there is a VP of sales at another company that I loved. He just went from a, a product that was somewhat complicated to one that was very enterprise, and the workflows were very complicated and very competitive.

And six months in, he raised his hand at the board meeting when they were struggling, when sales had not gone up, and he said, listen, my number one mistake is I didnt know how complex this product was, and he took the job, we took the bet. So, look, slow it down. I know it is not too basic. If the VP of sales and the first five to ten reps cannot demo the product on their own, without you, without an architect, without eleven people under her, him, just don't make the hire. Do not make the hire.

You don't have the resources, you don't have the brand, you don't have the brand to carry you in the canva demo. People will not buy in today's world just because it's a nice guy. Just in the old days, it was someone that golfed and then as Sas took off it, everyone thought they could sell because they're a nice guy. You know why they could sell because a nice guy, because the prospect already tried the product and wanted to buy on their own. Yeah, them being nice is enough.

So whatever, you don't do this. If the CP of sales, before they start, need someone to demo for them, do not make the hire. I know they had someone do their demos for them at the last company. Great. Hire this person at 50 million, 100 million, 500 million.

Error. Do not pass go. Do not make the hire. And related to that, its the same point. If today a VP of sales wont sell when they start, if they wont carry a bag, if they wont do the entire sales process to start at least the first quarter to dont make the hire.

Trust me, dont make the hire. Anyhow, before they start, make sure they can demo the product. You can even give them. If youre not comfortable, for whatever reason doing this in the recruiting process, do it pre offer letter or even do it post offer letter. I do a lot of diligence now for candidates.

Post offer letter. If I've invested, a CEO introduced me to a candidate and I'll say, okay, jane, Jim, george, let me tell you some reasons. Maybe you shouldn't take this role. Not because I want to talk them out of it, but I want to make sure it is a good match. And if they can't demo the product, give them a chance.

Just say, jason, before you start Taylor, before you start, I want to make sure you can nail this demo so we hit the ground running and spend the time. And if they wont do it, I dont think its the right place for them. I dont think theyll survive in this brutally competitive world. So total cheat code. I know 80% of you are going to do this anyway.

Dont do it, Preston. Okay, this is a funny one. I also talked with another founder in double digits, ARR 1214 15 million the other day, and he said he wasnt sure his head of marketing was working out. And this goes back to one of the earliest sastra posts about hire the right wrong type of vp marketing. You dont have to get blue pens with your logo on it.

Go reread that one in its own way. Its as relevant today as it was back then. I said, why is your marketer not getting you any leads? Or why is not anything happening? I love Jim.

Hes doing this and doing that. Im like, whats his background, Jeff? He was a junior product manager at GitLab. Jeff. Product.

Sorry, junior product marketer at GitLab. Product marketer. Im like, do you know what product marketers do at large tech companies? They don't get you leads. They don't give you opportunities.

They don't even know who's on the sales team. They segment your product in collateral. And I'm like, he's what? I love him. He's so smart.

I know he's smart. Sometimes at tech companies, the product marketers are really wicked smart on the product. And I asked him, okay, how long has he been there? Four months. Four months.

Okay, what has he done so far? He's created a lot of landing pages for different versions of our product. And I'm like, oh, that's what you got. Thats what a product marketer does. Now having said that he made the hire, I actually didnt tell him to fire this person.

What I said is do what? A product marketing. You, youre going to get landing pages and have them do a weekly webinar. They usually can do that and explain the product. They might not be good at the funnel, but leverage the asset you have.

But hes never going to get you what you need, which is demand gen. So dont hire whatever you do. Dont hire a product marketer because theyre smart and they love product and theyre LinkedIn sales marketer. Don't hire anyone that says like corporate marketing, whatever. You don't hire someone that says communications.

If it's VP of mark Communications, VP of something in communications, I know folks that are in communication are going to hate me for saying this. Never hire this person. They don't know how to get you leads. They know how to what as you scale, as your brand gets big, as people want to talk to you, as everyone wants to. What's the most important marketers at open air?

Probably communications, right? What, who knows what Sam's going to say tomorrow or the other founders are going to say or what phone's going to, or what's going to happen with Scarlett Johansson. Okay. You don't need a dimangin. You need corporate.

You need folks to manage how the world sees OpenAI at a startup. You do not need that until your brand is at an epic level. Do not hire someone who's a VP of communications, corporate marketing. Third one, whatever you do, just like the VP of sales has to demo the product where we start. This is my cheat code.

I know a lot of folks are going to be mad. Whatever you do, when you like, when there's a marketer you think you like, open up her or his LinkedIn. If the first line is strategist, do not make the hire. Do not make that because they'll never do any work. Everyone that's burnt out or tired or needs a team of ten, it could mean a lot of things.

They may not be burnt out, but strategist means they need a team of ten or they only want to give you ideas. What it really means is they won't execute anything. Strategists execute nothing. Nothing. Not a damn thing.

They don't send a campaign. They don't do a webinar like we're doing. They don't host an event. They don't write content. Strategists do nothing but give you ideas.

You do need this in marketing, you need about 3 hours a month. You need a good 3 hours a month, but that's all you're going to get. Do not hire anyone whose first line in LinkedIn is strategist. And the final question, and this is an old sasser post, it's distrust today. Will you hire this marketer?

Ask him a Columbo question. You don't have to be a jerk about our tough. Just say hey Jim, Jane, just let me what was your commit at your last role and a real demand gen marketer or growth marketer will answer. My commit was 5 million in pipeline per quarter. My commit was 300 mqls.

My commit was 2000 signups. If their growth, my commit was this. You can just ask it like an innocent Columbo question. The product marketers, the strategist, the corporate markets, you know what their answer they won't be able to answer. Or if they do they'll pause.

They'll have to think commit. I did that, did that back in 2019. What was it? I cant like a real marketer will just tell you the answer in 60 seconds. This is what I delivered.

And also its almost always their first line on their LinkedIn instead of strategists. Their first line on their LinkedIn is I drove pipeline up 184 percent at my last role. Hire her. Dont do it. Dont hire the product marketer you love.

Dont hire the strategist. Dont hire the corporate marketer. Dont hire someone without a commit. Whatever you do, its not their fault. They may have a great role at OpenAI or were at whatever hot company that raised a billion dollars.

It may be great for notion or Atlassian. They aint going to work at your company. Okay, third one, this relates to the first one but its the flip side, probably the number three mistake I see with founders making today that have something that start to take off. And its even more true today than the past is they exit sales. They exit sales.

I asked this question so many times to founders that are decelerating at five or 10 million. Its more common today because even though fundraising is harder when you do fundraise, folks raise bigger rounds, even today they raise bigger rounds so theyll raise 10 million or 20 million and the CEO will be like thank God I dont have to do sales anymore. I hate it, I hate it. I hate picking up the doing the zooms and the same stupid question for the 11th time. I want to get why founders do this is they almost always its the same reason I got to get back to product.

I dont have enough time to work on the product. Were falling behind in the product and look theres a lot of truth in that and its why I really think you should hire a vp of product that is great, far earlier than most founders do. Its not on my top ten list but its super important but it doesnt work that way. You have to do more in product and you have to do the same amount of time in sales. What changes is when you hire a great sales leader your job will be different.

You wont have to open and you wont have to close. Youll spend all your time in the middle. Youll spend your time being grabbed and dragged into conversations to help closed deals. Because every single prospect and every single customer loves to talk to the CEO, even of a five person company, even of a 50 person company, they love it. So you will get dragged into sales.

So you should not have to do the same things in the post founder led sales and sales that you do in the pre, in the founder led sales. But you don't get that. You never ever get the time back. You never get time. So never step out of sales.

I always see sales plummet when founders say, I'm just going to be a product guy now. And this first point I see have accelerated the last couple of years. Not only do they want to step out of sales, they want to hire a mythical CRO or coo that will manage everybody, every founder. As things start to grow, they get burned out, they have too many reports, it takes too much time, there's too much drama. Taylor's complaining too much about this and I'm tired of her talking about the campaigns and Amelia's just constantly complaining about the feature gaps in sales and I just can't have this conversation anymore because I got to work on everyone.

Say it to me. I know we're on Zoom, but I got to work on product. I got to work. So im going to have Taylor and Amelia and Bob, my sales marketing CSR. Ive been a report to my magical CRO that I hired that came out of notion and notion we use ocean, its astronaut, its great.

What is it at? 300 million in revenue comes in that CRO doesnt really learn how to sell. That CRO doesnt carry a bag, that CRO doesnt have a product, that CRO actually does nothing about marketing or customer success. You know what happens when you force your head of sales marketing your cs to report to some CRO or CEO that doesn't know the product? They quit.

The good ones quit. They came to work for you. The great ones, the pirates and the romantics, those first vps, they didn't come to work for that person you hired off the street. That doesn't do work. Hiram her himself, that just hits refresh on the dashboards and tells people they got to do better next week.

They came to work for you. So tough transition. So listen, the Coo and the CRO are not. You may make these hires. I think there's value in these hires.

We'll run out of time. But they dont mean you get to stop managing sales, marketing, or cs, and it doesnt mean you get to stop doing sales. Dont do it. Revenue always goes down. There was never anyone on planet Earth that will understand all the nuances of the product, all the integrations that work, all the hacks, all the reasons why, all the reasons why youre better than the competitors.

No one will ever understand this better than the founders. So you have to support sales. That way you dont get to get out of it. Okay, fourth one, this one is new. I dont even think this happened in 2008, 2009, when literally the entire global economy shut down, when the country of Korea prohibited cash exports, when every single store in downtown Palo Alto was boarded up with plywood, the global economy was so bad, we still didnt cut marketing to zero.

Even then. Even then. But you know what I see? All startups that are struggling today, theyre cutting marketing to zero. They're cutting marketing to zero.

And this is your job as founders and executives, is to find the balance here. Look, if cash is tighter, obviously the first thing we look at are variable costs and honestly, the bottom 10%. If things are tight, you got to move the bottom 10% out. They never do anything. They always consume time, energy, and resources.

So as tough as layoffs, look in the media, look, a 40% layoff is brutal. Laying off the bottom 5%, you find the next day, everyone does better because jasons always dragging down the sales team. He closes nothing. Hes complaining. He never follows up with the customers.

He never finishes this or that. So that helps a little bit. But then youre looking at your variable costs. What do I cut? And I cant.

Theres so many things. I got to ship the code and I got to keep the servers up. And so you cut marketing because you know what, Jim had 4 million last year and he did some pipeline. But if I could just get all that budget back, thats how were going to do it. And so listen, some of this is natural, but if you cut all your marketing, youre cutting your future, youre cutting.

I talked to so many founders who the growth has slowed and I said hows your pipeline looking? Its really slowed down. How much are you spending on marketing? Nothing. And what are you doing?

Oh, were doing all free stuff. Were doing our new podcast. We spent three months working on our podcast. We got the same eleven guests on the podcast. Everyone else has the same marketer selling her courses and the same sales guys selling his courses.

Thats on everybody elses podcast. It took three months and we got over 80 downloads on the first one. Okay, yeah, that was free air quotes. Hate air quotes. It was free.

But think about all the soft costs and time you put into that podcast. Or that you're okay. We're just going to do content marketing because it's cheaper. Great. Is this content like so amazing that you did on chat, GBT or outsourced to some service?

No, it's terrible. It doesn't work. You got to do the free stuff. It always works, but it's never, almost never enough unless you have an inherently viral app. The only thing that really works at scale and free is word of mouth.

You have to incent word of mouth and you got to at least do that marketing. So whats actionable here is just this final point, what you got to do rather than cut it to zero, unless youre literally running out of time and Runway. You have to decide if you trust your head of marketing or not. Do you trust them? Do you trust them?

If so, come up with a budget. Okay. Last year was 10 million, this year its 5 million. Maybe last, maybe it was thirty k a month. Now it's ten k a month.

But don't cut it to zero. Trust them to take that ten k a month and spend it, or 30k or 100. Trust them to spend it as effectively as they can and not have everything have to convert tomorrow. That's a problem too. Marketing doesn't work if everything has to convert tomorrow.

Marketing sequences things. It's sequencing things over time in your pipeline. And if you cut all of that, yeah, I get that. Maybe you'll help the short term stuff, but you're going to sacrifice your future and I'll give you one last example. We have over 200 sponsors at Sastra.

We talked to a lot of marketers and we talked to a public cloud company doing billions in revenue and actually generating over a billion in free cash flow. Generating over a billion in free cash flow. We talked to one of the senior managers there, is a good friend of ours and the executives. We cut all events last week. We cut all spend on events.

It's like why we came back from this niche event and we didn't close any deals. We came back last week, we didn't close any deals. Okay, first of all, its not enough time. Its not enough time for anyone thats run the field playbook. But more importantly, you cut everything.

Hows that going to help? That is not the right reaction. The right reaction is to get more focus. Maybe its to do less, but to cut your entire field budget to zero when youre generating a billion dollars in free cash flow a year. Its too reactive.

Everyone is too reactive here. You have to calm down and you have to find a way to invest in the future and not just the presentation. Okay. 0.5. And we're going to actually have an entire Saster AI summit now.

Hasn't been announced yet. Just to you guys, just to our friends. It's going to be inside of Saster annual on the 11th. We're going to have heads of marketing from OpenAI and Cohere. We're going to have the CEO's of everyone from Klaviyo to attentive, the head of AI at Zapier, everyone talking about how AI really works in b two B.

For real. No one's doing this. It's going to be awesome. It's going to be wicked awesome. Okay, so we're going to talk a lot about this in the coming times.

But AI isn't. It hasn't changed every B two B in SaaS space in 60 seconds. It's not revolutionary. The fact that two phones can talk to each other does not mean your payroll app is magically better. Okay?

It does not mean it's magically better. AI is. Just because you can type in some text and get a cartoon does not necessarily mean you've made your customers any happier. So I get it. There's some nuance and complexity here, but you can't hide from it.

This is what I see too many founders doing. It's expensive to hire engineers. It's expensive. There's expensive do that. So they're arguing.

They're arguing. You can't. You have to. If nothing else in AI, if AI is not revolutionizing your space. And it is in many.

It isn't many is in the contact center. It is in other spaces. If it's not, you gotta be a parody. You're gonna lose. I see startups that are arguing with AI, that are arguing against this tsunami of that is coming, and they're arguing that it doesn't work.

And they're arguing, and you know what the competition is going and doing. They're saying, we can automate this with AI. And the competition is exaggerating. Sometimes they're at the edge of line. But you cannot fight this trend of AI.

You cannot fight the billions and billions being deployed every week. You cannot fight it. And also, this is where budget is. Budget is being freed up because other apps are being cut, humans are being laid off. This budget doesnt come out of heaven.

It doesnt come out of nowhere. You always got to know where your budgets coming from, and budget is being freed up for AI. And if you do everything in the world, great, but youre not at feature parity and AI and your competition is, theyre going to get this freed up budget, this efficiency budget, and youre not going to lose the deal. I see folks losing deals left and right because at least theyre not at parity. At least theyre not a parity.

You got to jump up. Youve got no choice. You cant fight it anymore.

Okay .6 and I'll get through the next ones faster so we can have some questions. Boy, I see this, I don't see this so much with the founders I know well or invested in, but I see this constantly on LinkedIn, on social media, everywhere, which is, people are just getting this wrong. We are in a new era of efficiency. The average public SaaS company does almost 400,000 in revenue per employee. Over 300,000, almost trending towards 400,000.

That was 100 something thousand in 2021. So the average public company is more than twice as efficient as they were in 2021. So efficiency matters. Profitability does not on its own. Folks that are not growing but profitable, like Dropbox, are trading at two to three times revenue.

Thats not where you want to be. So too many founders either believe this or probably worse, are using it as an excuse. Theyre using the excuse, which is that theyre not growing anymore. But hooray, were profitable. Now, listen, this is fine.

If youve been hit like a ton of bricks by a downturn the last 18 months, maybe youve got to be cash flow breakeven because theres no more money coming. Theres no more this, theres no more that. That is a different tactical goal than saying hey, were going to be profitable and thats some sort of win. There is some truth that as you cross ten or 20 million in revenue, you may never like they're there. What you still want to do is grow at outlier rates.

Ideally you do this triple. I said t, but it's really more like t. Like the best startups go from one to three, three to nine, and then nine to 1818 to 36. Okay, I know that sounds like a lot to everybody, this triple double. But if you think about what it takes to get to 200 million in revenue in less than ten years IPO, it takes that amount of compounding.

Just put it on a spreadsheet. That's where you want to do to be the next klaviyo or rubric or better. But the reality is being efficient at like ten to 20 million, which is 30% or more growth. And breakeven can get you great. P.

Exits can get you an offer ultimately for two or $300 million to buy your company. But the growth still has to be north of 30. Even if you break even, it still has to be north of 30. And so there's just no world where profitability is above growth. Emergence capital just redid the data.

I did it on Saster, I think Maritech did it. A growth fund, a whole bunch of folks, they all summarized it in that growth matters twice as much as profitability. Profitability didn't matter in 2021, it didn't matter. Figured out startups, it didn't even matter. In the public markets, it matters.

But growth is still twice as important. So listen, do what it takes to survive, but don't pat yourself on the back like profitability is this magical end state. If not, you got to grow. Okay .7 talked about this a lot. I wish I could stop talking about it, but the world really has changed since March 2020.

In so many ways it is. I don't think today, for some folks, today is the hardest it's ever been. We have some SaaS leaders at hundreds of millions of revenue growing 0%. I've never seen that in my lifetime. There's others where it's just hard like 2018.

Cry me a river. Like it's hard like it used to be. Like budgets actually have to be earned rather than money just flowing like it was in 2021. But it is harder for almost everybody, even for the best, it's harder. And it's led to a lot of folks that are broken.

The broken, the bitter, and the fractional these are folks that just don't want to do it anymore. Honestly, just between us, there are days I'm not sure I want to do it anymore. Most days I do. Okay. 340 days I do.

There was a day the other day I told Emilio's on his. I wasn't sure I wanted to do it anymore. I'm back, don't worry. I'm totally back. But a little bit of it, this is okay.

A little bit of this is okay. But here's how I summarize it. And look, I barely even watched sports since March 2020. But you can't hire anyone that won't play the game. 48 minutes.

It's too hard today. You can't hire anybody that's not going to play the full game. You can't hire someone that is too angry about their last boss. You can't hire all these folks that think the system is loaded against them, that VC's destroy people with their liquidation preferences, that VC's destroyed their last company, that their CEO was a terrible human being, that they got. It was that I was lied to at my last startup.

The founders told me this, but it wasn't true. I believe all that. There's elements of truth in all those things. You can't hire. Don't hire them, don't hire them.

Don't hire. And don't hire the fractional. There is a very narrow role for fractional people, but most of them aren't willing to do anything. They're just like the strategists in marketing. They're not willing to do anything themselves.

So they don't solve your problem. So I said, there's no room for strategists and dashboardologists in SaaS. Startups want me to look at it, but I just simplify it. A little chip on your shoulder, probably necessary for success. And a founder, probably great in your vps, too.

A little chip on the shoulder. What I love, like a great background for your first vps, a stretch vp is, hey, I was a director, head of sales at somebody, and then I got them to 20 million and they topped me with this CRO from big company. Okay. And I got pissed and I quit. Okay.

That's a great little chip, right? I got topped. It's not going to happen this time. I'm going all the way. I'm going all the way, Taylor, I'm going to IPO this time.

I made that higher myself. It works great. I've had that chip myself. I possibly even have a little chip myself. Even today.

That's great. But when it's like, that chip is so heavy, it's like a rock and it's weighing you down, that whole shoulder is all down to the frame of the zoom. You can't hire that person. It's too much. They can't recover.

And I feel bad that frankly, there's a lot of people I've known over the years that are now in this category. I try to help them. I give them new ideas, but theyre not there. Theyre the broken, the bitter, and the fractional. They may have great Linkedins.

Theyre often wicked smart, and they often can identify your problems in 15 minutes. This is where youll get confused. Theyll identify your problems. I talked to one of these folks who ive known for years the other day, and I described him a whole bunch of issues. And in 15 minutes in, he described the root cause and the issues better than anyone id talk to in months.

And then I gave him an opportunity, a great vp of sales role. It took him a couple of weeks to get back to me. Not cool. And instead of even taking the meeting with the CEO, he wrote me an email, like a long email, of all the objections and issues he had with the startup without ever talking to them. I don't know if I can make 10 million.

I don't know if the CEO is committed enough to sales, even though they're growing 100% at 10 million. I don't know if this, I need it all to be explained to me before I'll take a call. He's great, but he may be too broken or bitter to do this. Don't hire that person and they're often again, we could smart, including the fractional. Okay, last couple ones ill do shorter.

This one is not new. This one goes back to the 1930s when we started Sastre when enterprise software took off, or the sixties or the eighties when my grandfather started a little newspaper called Sastre and would hand it out on street corners and barstools and then it became a blog in the early days. And grandpa Saster was talking about this back then. Dont hire for the logo. Got to be in our first post in 2012.

But here's the thing. This is an evergreen error. Again, when I talk to founders, I don't know why is this an evergreen error? It's because there's more folks that worked at Datadog or notion or Cloudflare or Zoom info or Zoom or all these iconic companies. Or gong or Salesloft or outreach.

Pick your hero company. There's not just one vp that used to work there. When I started in SaaS, there's 30 sales leaders that have spun out of those companies, 100 over the years. And we're in love with these logos, especially the ones that most of us realize we dont want to hire from a direct competitor. Even though were tempted, were still tempted.

Dont do that because youll overlook the downsides, but were just so tempted that the guy that was earlier, the person that was early at datadogs, got the answers in my space, or that was early at whatever cloud leader you like, that was early at Klaviyo. If youre in e commerce or Rubrik, if youre in security, look, theres a time and a place for some of this, and there is some benefit to it. Here's the simple thing. You got to do it and you have to do it with your team. Literally.

Take their LinkedIn and put your hand over that logo, that rubric, that klaviyo, that notion, whatever. And be honest. Would you still hire them if they hadn't worked there? And I do those founders all the time, and they tell me, okay, this, my vp of whatever didn't work out. Where did she work?

Last top logo. I'm like, okay, this is the first question I asked them. I've done this multiple times in the last 30 days. Would you have hired them if they didn't work? A big fancy name.

You're right, Jason. I wouldn't have. They always say this. I wouldn't have. So once in a while, this is okay, especially if they were there really early, especially if the chip is the right size on their shoulder.

I'm not saying there aren't exceptions, but if you're hiring for the logo, make sure you take a, take your hand or maybe print it out. I don't even have a printer anymore. But if you do have a printer, find one of those smelly, black, thick markers, what are they called? Put it all over their logo at the last cool company and ask everyone around the table, would you still hire Amelia Taylor or Jason if they, if this was their LinkedIn? If they say, absolutely, I don't care.

Best, best of the 30 candidates we've met make the hire, but probably people are going to be, if you knew how to do it at Datadog. Okay, last two, and then we'll open it up for questions. This is tied to the marketing one, so we partially hit it. But, boy, this is, we're, we are cutting our nose off to spite our faces left and right. We're, everyone's looking for instant ROI.

They're looking for Instant ROI. The most extreme example, one of the most extreme examples ive seen, actually, is ourselves at Sastre. So again, we have these 200 sponsors. So we use them as a lab. I use them as a lab to learn.

And what do they want? Last year, it switched instead of where they measured on pipeline or opportunity or influence or awareness or brand, they wanted scans. They wanted folks that would literally come to our events get a scan, and thats how they were judged. I get 584 scans. I get 681.

Did I get 1011? Two. Listen, friends, scans is at the very top of a pipeline. But most marketers in normal times view a scan. A little bit of skepticism.

Okay, did they convert? Did they take an action? Did they take me? Did they sign up for a trial? Because having some SDR in your booth wave a scanner in your face before they give you a yellow rubber ducky to take home a swag, I mean, that's pretty low on the intent scale, right?

I'm not saying that those there aren't good ones. There are because people that go to events, buyers go to meet vendors, so theres gems. But if you take scans as your number one KPI, im not sure its the best one, but the thing is, its instantly measurable. You walk out of a field eventually that day, how many scans you got. So it was interesting how the whole tenor of what everyone wanted changed.

And last year, it all became scans. Scans. I need a thousand scans for my boss. So its looking for instant eye and some ROI in something, which is field marketing, which youre lucky if you get it in six months. You're lucky if folks you meet at an event.

You convert to a customer in six months. We can talk about why that is in the q and a if you want, but it's just the reality is you might get someone at an event who already was shopping you. You'll get those and then you'll push them down the pipeline and they'll close right after the event. That happens all the time. But if you're building raw new events, it's just, it's somewhere between a high intent Google search and randomly discovering someone on a piece of content.

It's in the middle of an event, right? So it takes time. And if you want instant ROI, its not there. The other one I just see, and its just related to this, then well close it on the last point. This instant ROI is also, I think, destroying customer success.

Maybe this is my last point. And others relationships with customers, we all, many of us, the bigger companies, pushed through multiple price increases the last few years without any notice and without commensurate value. Hey its another 20% up. We literally just had a vendor at Sastra weve worked with for eight years. They hired a new CRO a couple of weeks ago and she got on the phone with us and said im doubling your prices.

Im doubling. Were a case study on this companys website for years. Were in videos for them. Theyre all over YouTube for us. The new CR came in.

Why are you doubling? Is there a new feature functionality? I dont really use the product but its take it or leave it. Im doubling prices now. Why did she do this?

First of all our relationships are burnt and broken forever. We went from NP's nine to zero. But look, she came in and it's tougher there. And so what do you do? You earn your base.

And we all burned our bases. We burned our bases with ripoff price increases again and again, not once a decade but again and again. And what happens when you do that? Maybe you'll make this quarter. Maybe.

But are they going to refer more customers to you? At the end of the day, all software is powered by word of mouth. That is everyones number one source of new customers is folks telling their friends, telling other folks, leaving one company, going to another and bringing you with us, which youll see again and again as the years go by. Word of mouth remains HubSpot number one source of new customers at $2.5 billion in revenue. They stopped publishing this around a billion, but they even had the numbers.

Its on the five interesting learnings from Sastra through a billion in revenue at HubSpot. From the beginning, word of mouth was the number one lead source. Ask yourself, as founders, have you done things the last 18 months that have damaged word of mouth? Do you even have a customer success team any at all anymore? I just put this up today on Sapstra g two did some polls across all their, all of their customers.

The majority of their CS teams not only report to sales now but consider to themselves but are on quota, have a sales quota now. This is what folks did when they needed to monetize the base more. Instead of these CS folks being folks that would maybe show up to a QBR here or two, they said, listen, your job is protecting their NRR which has declined the last 18 months. And so cs kind of became weaponized and part of sales. And at Sassro sales we had some very brutal conversations with CS teams trying to monetize us rather than help us.

But it's done. I don't know that CS is going to go back to the old days where customer happiness was job number one. I said, for me, maybe it's over. But as founders have nothing else to ask for your top 20% of your customers, for your top 50 customers, whatever is draw a line, do it. Do a sort of big to small is at least for your top 20% customers.

Is there someone whose job it is, nothing more, 40 hours a week, 100% time. At least make your top customers happy. Because if your CS team is doing nothing for those top accounts but trying to get them to buy more seats, trick them into bigger additions, raise prices on them, right? Threaten them if they want to downgrade. Threaten them.

Threaten them if they want to downgrade, which has become a behavior. That's what account managers do. That's why back in the day I refused to hire account managers. I said, no, I don't want back in the day when e signatures were early, the whole point of an e signature in the early days was to make your life better versus a fax machine. I know, it's funny.

I'm like, if my team makes your life worse, you're never going to use my product. I said, we will never have account managers. We only have customer success and sales. And maybe that was dated. It worked pretty well for me.

We never had less than triple digit NRR, but it was a different time. But I just meet even folks are putting, are weaponizing even cs for their top customers. You've got to put a couple people, maybe just one person, whose only job is to making sure those top logos are happy and nothing else where they will churn. They will not churn tomorrow, but they will churn in a year or two when the renewal is up, and they will go to your customer, your competitor who finally gets an in because you treated them like an account to be managed up rather than an account to be made happy and they're frustrated. And finally, at that year three renewal, they say, heck it, I will try your competitor.

That's happening all the time. I just got an email yesterday from a founder. That's great. But after three years, one of their competitors stole one of their top ten customers. It's happening now left and right.

And if your CS team are account managers, if they spend all their time not configuring the product, not going to do the integrations work, not making sure new folks are trained, not making sure onboarding metrics get better and better. If they're just there to create more revenue because they report to sales, you're going to be sad. You're going to be sad starting this year. Okay, those are my ten top GTM mistakes founders are making, so hopefully this was helpful.

This episode is sponsored by our good friends at Pendo, the all in one product experience platform. Pendo brings together product analytics, guides, discovery and replay so you can improve your product experiences for every customer and employee. Try pendo for free at Pendo IO Sastr. That's Pendo IO sastr to try pendo for free.

Get more when Northwest registered agents start your business, they'll form your company fast and stand up here and business identity in minutes. That means business free domain business email website hosting address mail scanning, business phone app all within minutes. Visit northwestregisteredagent.com Sastr to start your business today.

Ready to take your business global with Remote.com comma, it's effortless, from onboarding to payments to compliance, our expert support, and all in one solution. Have you covered? Choose Remote.com and embark on your journey to worldwide growth with confidence.

SaaStr 740: The Top 10 GTM Mistakes I See Founders Making Today with SaaStr CEO and Founder Jason Lemkin

Primary Topic

Episode Summary

Main Takeaways

Episode Chapters

1: Introduction and Sponsor Messages

2: The Top GTM Mistakes

3: Q&A Session

Actionable Advice

About This Episode

People

Companies

Books

Guest Name(s):

Content Warnings:

Transcript