This document discusses 5 learnings from 10 years of investing in SaaS companies. The learnings are: 1) Enterprise customers will pay more so increase pricing tiers, 2) Paid marketing may not scale so invest in product/content, 3) An early VP of Sales is often the founder, hire for the right growth stage, 4) Understand the types of customers ("animals") to target based on average revenue per user, and 5) Align customer acquisition costs with lifetime value to avoid startup graveyards.

1. Tere päevast :-)

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#BadStockPhotosOfMyJob

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SaaS& Marketplaces

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5 Learnings from 10 Years
of SaaS Investing

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1. Pricing

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SMB vs. Enterprise Pricing
How you should
be pricing
SMBs Enterprises
Your pricing
Price
SMBs Enterprises

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Learning #1
Ask enterprise
customers for more $$$.
Increase the spread
between your entry plan
and your higher tiers.

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2. Scaling paid acquisition

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Scaling paid marketing
Marketing spend
CACs
Your projections
Your actuals

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Learning #2
Don’t assume that PPC will scale.
Invest in product and content.
NPS matters.
If ARPA big enough, try
outbound sales.

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3. Hiring a VP of Sales

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„The 48 Types of VP Sales“
YOU

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Learning #3
Your 1st VP of Sales is
probably you.
Then, find one who can get
you to $10-20M ARR.
Always hire for the right stage.

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4. Getting to $100M in ARR

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Which animal are you hunting?
ARPA
(in $ per year)
# of customers
(in 1,000s)
10 100 1,000 10,000 100,000
10
1
100
1,000
10,000

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Learning #4
Know what animal(s)
you’re hunting.
Align your CACs (and
CoGS!) with your ARPA.

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5. Startup graveyard

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Escaping startup graveyard
CACs
LTV

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Learning #5
Align your CACs with
your ARPA.
(yeah, sorry, I said this already, but this is
important)

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Thank you!
More SaaS learnings:
www.saaslearnings.com
www.theangelvc.net
Questions?
christoph@pointnine.vc

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Bonus slides

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You get a
Term Sheet
nobody wants
to invest
everybody wants
to invest
Time
Investor interest

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Getting to PMF
Time
PMF
How you
get to PMF
How it’s probably
gonna look like
think you’ll

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Company rank
Return
How you think
What it really
looks like
Power Law
301 15
Power Law looks like

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Should I go through an accelerator?
Is it YC? YES
No
Go for it!
Do they
want
> 6%?
YES RUN AWAY!!!
No
Think
about it

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Finding good engineers
engineers looking
for a new job
open positions

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Contracts
Number of pages
% of pages with a
>0 chance of ever
becoming relevant.
100%
0%
50%
1 200100
Legal fees
¤5k
¤100k

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When corporates discover „entrepreneurship“
We need more innovation!
Let’s start a
Corporate VC.
Let’s spin.-off the VC.
oops, we’re not attracting the
best and the brightest.
Let’s start an incubator.
Let’s do an
„intrapreneur program“
oops, we’re not attracting the
best and the brightest.
oops, we’re not attracting the
best and the brightest.