SaaStr Annual Conference – Day One
SAN FRANCISCO – With so much going on here, it’s hard to know where to start. But a couple of things stand out in my mind: three big lessons learned from watching and listening to everyone here, and how those lessons are part of the secret behind two big success stories.
First, the lessons.
As I talked to people here and listened to their stories, a pattern quickly emerged. It was obvious that successful SaaS companies were focusing on three things. In that respect, there are three big lessons for any firm in the SaaS field.
1. Make the product easy to use.
This lesson can’t be understated. It kept coming up in every other session: Everywhere, SaaS companies were urged to really focus on customer use. The idea is to make the product easy to use by removing friction every step of the way, from the first moment a customer interacts with your brand. And then measure your success in doing so, both by being close to the customer and by working hard to remove any hurdles that are identified.
2. Focus on being really good at something.
Pick fewer things to master, and really nail them. Concentrate on the things that are working and build real domain expertise.
Don’t be distracted by all the data that’s out there and by customers who are not in your target group. Most importantly, don’t let yourself be distracted by your competitors. Understand your market and your customers, and focus on making yours the product they love and can’t live without.
3. Work to ensure customer success.
Customer success is a new and growing element that is at the heart of many SaaS companies’ economic engine.
Ensuring customer success requires a culture and a mindset that extends all the way from the first touch point your sales team has with a prospect to how your marketing organization then harvests advocacy from your biggest fans.
Customer success has great rewards. It is responsible for retention and engagement. It leads to up-sells, referrals and cross-sells. It’s a critical piece to a SaaS business – one that requires the ability to listen, empathize with, rescue and encourage customers.
Now the two break-out success stories – Atlassian and New Relic – both of whom recently went public.
Atlassian is an Australian-based firm founded in 2002. It made its first IPO on the NASDAQ in December 2015.
Atlassian president Jay Simmons told the story of a slow, bootstrapped and incredibly efficient 13-year journey to that IPO.
What really stood out was their patient and measured approach to growth.
They slowed their jump into public markets, and took the time to really understand institutional investors – to the point of even doing practice earning calls a year ahead of going public.
“An IPO is not a destination,” said Simmons. “It’s a mile marker.”
The other striking detail about Atlassian is that they invested very heavily in product, engagement and features that encouraged virality.
They obsessed about removing all friction points (see Lesson One above) and built a process that did not include sales people.
That’s very rare. Yes, they have sales people for their channel, but not for their direct efforts.
For more information on Atlassian, see http://tomtunguz.com/atlassian-s-1/.
The other firm that caught my eye was New Relic. It’s a San Francisco-based company founded in 2008; it went public in 2014.
Lew Cirne, the CEO at New Relic, talked about investment in the product. He also stressed the importance of the first customer experience within the first minute. (See Lesson Three above).
As with Atlassian, efficiency stood out. They were always improving, testing and experimenting with different sales models, creating a testing culture within the company.
Of interest was the fact that they raised far less than their competitors – $3 million in A round, and $6 million in B round.
These really speak to the utilization of capital and the cultural benefits of not over-capitalizing. As Cirne said: “Don’t manufacture growth with big capital raises.”
For S1 Data on New Relic, see http://tomtunguz.com/new-relic-s-1/.
I’ll have more to report tomorrow. In the meantime: shout-outs to Assent Compliance, Rise, Showbe, L-Spark, Staff.com and Influitive.
Allan Wille is a co-founder of Klipfolio, and its president and CEO. He’s also a designer, a cyclist, a father and a resolute optimist.