Postcard from SaaStr Europa Day 2. Here’s The Downer!

Day 2 felt distinctly less upbeat. To add to my slight tiredness from all the networking the evening before, I over-indexed on “this didn’t go well” workshops. Good insights though. Sharing with you my notes from the two best sessions. 

The path to $100M ARR

Edith Harbaugh, CEO @ LaunchDarkly

• First 2 years went really slow: 0 to $1M ARR. Next 7 years however: $1M to $100M! 

• Was blinded by a “sales guy with a great pedigree” who ended up being bad at selling to developers. Should’ve tested this during the interview!

• No unstructured “coffee chats” with VCs again – even if they position so. Always be prepared heading into a pitch. Always have a back-up plan in case there is no funding

• “Get leverage in your tasks”. Didn’t have a full time person up until Series B. Edith did financial models herself. In hindsight, a big mistake. Ditto now hiring an Executive Assistant faster. A good external recruiter is worth it

• Always keep creating categories! Talked about getting upper hand over Optimizely by adding feature management to the product. This market took a few years to mature though – in the beginning, people didn’t understand that feature management was

• Don’t forget to refresh company values. Talked about people weaponizing the “work is not life” value to disown deadlines and responsibility. Changed the value to “work impactfully, work sustainably”

• “No right playbook, just play pages”. A lot of tactics that worked 5-6 years ago no longer work. And vice versa. Assemble chapter by chapter: sales motion, pricing, hiring

Lessons from the companies that have blown up themselves

Edward Keelan, Principal @ Octopus Ventures

• Find product market fit! 

• “You cannot grow out of churn”. Don’t try to scale if your gross margin is below 70% and gross revenue retention <90%, net <100%. You have a customer churn problem! Masking churn with sales will come back to you. “5X more cost effective to keep existing customers than to find new ones”

• Layoffs: how efficient should one strive to be? Octopus Ventures have built a headcount calculator. Solving for a burn multiple of <1.5X (good: <1X)

• You’ve exploded your cap table. Not the end of the world: get to cash flow breakeven