In the Trenches @ SaaStr

Being a rebel to build a movement: Non-traditional ways to scale with DoNotPay CEO, Joshua Browder

Joshua Browder started DoNotPay.com to get you out of parking tickets. Now it is a platform of over 200 solutions to protect your privacy, find hidden money, and beat bureaucracy.

Take the journey slowly: Joshua made a deal with an Adreesen Horrowitz investor that allowed him to get $1MM in investment without having to drop out of Stanford (his dream school). “It allowed me to take my journey a lot slower and to pick the right strategy for my company.”

Capture the zeitgeist: It’s a supercharger when launching. There are two things that you can do in a systematic way, the first is emotions and the second is current events.

• Tap into emotions like wrath, greed, lust, and envy. For example, a message like “Take back control from Uber Eats.” Taps into the emotion of wrath. It captures the zeitgeist for restaurateurs losing tons of money to Uber Eats.

• Take advantage of current events. For example, given all that’s taking place in Ukraine, Twilio is offering its services in support. “Current events are a great example to show the value of your solution because you can offer it for free to non-profits or people who need it.”

Build horizontally vs. vertically: DoNotPay.com was initially just about parking tickets. However, the average American only gets a parking ticket 1x a year. “It's very difficult to build a retentive product with just one use case and impossible to build a subscription business. This taught me that platform companies are more valuable than point solutions.”

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Why The Era of Efficient Growth is Now: The 2023 VC State of the Market with SaaStr CEO Jason Lemkin

Jason Lemkin, founder of Echo Sign, which sold to Adobe for $400M, shares his take on the current SaaS market and how it impacts VC funding at SaaStr’s Europa 2023 summit.

Build something that’s disruptive AND efficient: Since the start of 2022, the markets have been correcting, perhaps “flattening” and returning back to what they should be. Jason points out that the days of crazy growth and unnecessary need to actually sell are in the past. We’re in a phase where efficiency reigns. “Maybe for the first time ever in SaaS, efficiency actually matters. Maybe we just all have to spend 33% less forever. Everything's going to get 33% more efficient and maybe 33% harder. Everyone has already bought 200 SaaS products. No one needs yours, too. Do we need the 11,000th prospecting tool or the 58, 000 payroll system? We do not. Build something disruptive, build something amazing that will get someone to switch, and you'll unlock the budget.”

Triple, triple, double, double: VCs are in a game of growth. Given that growth has slowed approx 33% across the board, the stakes are higher for new VCs to likely come into a new round. While your current VCs may offer a bridge or extension round, new VCs are likely to stay far away. As a SaaS founder, you have to get to $100-$200M ARR in 10 years in order to make a VC enough money to make money. The math works like this: “There's this old math triple, triple, double, double. You got to triple after $1M to $3M, triple again, $3M to $9M, then $36M. If you fall below that line, it doesn't mean you're a bad human or a bad startup or your customers don't love you. It just means venture capitalists can't make enough money to invest in you, and this is why the markets have frozen.”

AI is the golden child: The companies that have defied the 2022 and 2023 correction? High-growth AI companies. Even if your company's metrics do reach the triple, triple, double, double panacea, VCs still likely won’t be interested. They want the AI companies that are getting to $100M ARR in 2 years because they are uber-efficient and ultimately replacing humans at work. “I met with one of the best SaaS VCs. They have $10B - $20B under management. I asked, how are you guys thinking? What if I gave you a triple, triple, double, double company? He's like, we don't even know if we want to [invest] unless it's AI.

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Why you’re unfundable in 2023 with Jason Lemkin, CEO of SaaStr

As a follow-up to his session Why the Era of Efficient Growth is Now, Jason took 60 minutes to answer attendees’ questions on everything from marketing and sales to hiring and moving with integrity.

Question: How do you respond to cold emails? And what does it take to write a great cold email in 2023?

• Answer: “Amazing, great emails that are perfect, that solve your problem as a buyer or as an investor, or that are jaw-dropping investments, get opened. CEOs... even the ones who have huge companies, almost all of them, open all their emails. If you're a CEO and someone sends you an email with a headline that's going to solve your problem, you're going to open that in four seconds. And that's why amazing outbound works for sales, it works for marketing, it works for raising a fund.

Question: There's a lot of buzz right now around salespeople building personal brands. It's not really a selling activity, it's not really moving a needle forward like right now, but on LinkedIn, it's everywhere. What's your take on that?

• Answer: “I think sales folks should spend at least half their time building their own brand rather than selling their product. I think they should spend 60-70 % of their time just on LinkedIn, promoting themselves. [For example] if you've had at least two weeks of experience as an SDR you [should] share your learnings with the world for hours a day: I've been an SDR for four weeks now, let me tell you how to do outbound. And, after that, buy my course.”

Question: I would be super curious to hear a story of yours about A time you had to make a really difficult business decision, perhaps related to integrity. What happened? What did you do? At what point in your career was this?

• Answer: “Being objective, I think I'm one of the highest integrity people out there. And the more time that goes by, the more benefits I get from it, and the more hurt I get by it. Because the more people will throw you under the bus, the more people will wrong you. I had a boss earlier in my career. I was hired to do a specific role. I was in business development. I had a $30K bonus on a $150k base for a VP of business development. I had a specific business development goal to hit. It turned out to be technically impossible. The company lost all of its revenue. It was going to go out of business. Ceo was going to give up. I went out, pitched 200 VCs, and raised him $40 million. All he had to do was show up to the meetings. Everyone else in the company had given up. I raised him $40 million. He sat me down after, he said, You saved the company. Here's your bonus. He gave me $10k out of the $30k. I said, Tim, I get that I did not hit my initial KPI. But I got you the 40 million, you were about to go bankrupt. He's like, yeah, but you didn't hit your goal. I thanked him. I said, keep your check.”

Question: What proportions of founders do everything right, as far as anyone might say, And still fail?

• Answer: “Truly great founders, that have a great CEO and CTO, or a CTO that can be both, and that understands a market –– I've seen 0% fail. I've never failed in my entire career from startups. But, I've almost failed every time. My first startup, it was tough times. All the VCs pulled their term sheets. There was no way to make payroll. I went out, I closed $6 million of contracts, and shipped our product. In two weeks, six million in revenue and shipped our products in two weeks. I finally got a term sheet, but only if I would personally pledge $750k to back the company. I had $8k in the bank. But we did have a house, so I had to pledge the house to the VCs. But I friggin did it.”

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