Just a quick post to highlight the fact that last week I was the featured guest on Episode 142 of the Official SaaStr podcast produced by the SaaStr organization run by Jason Lemkin and interviewed by a delightful young Englishman named Harry Stebbings (who also runs his own podcast entitled The Twenty Minute VC).
In the 31-minute episode — which Harry very nicely says was “probably one of his favorite interviews to record” — we cover a wide range of my favorite topics, including:
- How I got introduced to SaaS, including my experience as an early customer of Salesforce in about 2003.
- Challenges in scaling a software business, learned at BusinessObjects as we scaled from $30M to $1B in revenues, as well as at MarkLogic and Host Analytics.
- My favorite SaaS metric. If you had to pick one, I’d pick LTV/CAC.
- Why simple churn is the best way to value the annuity of a SaaS business.
- The loose coupling of customer satisfaction and renewal rates.
- Why SaaS companies need to “chew gum and walk at the same time” when it comes to driving the mix of new and renewal business.
- User-based vs. usage-based pricing in SaaS and how the latter can backfire in disincenting usage of the application.
- My thoughts on bookings vs. ARR as a SaaS metric. (Bookings is generally seen as a four-letter word!)
- Why SaaS companies should make “the leaky bucket” the first four lines of their financial presentation.
- Why I think it’s a win/win when a SaaS company gives a multi-year prepaid discount that’s less than its churn rate.
- Why I view non-prepaid, multi-year deals as basically equivalent to renewals (just collected by finance/legal instead of customer success.)
- Why it’s OK to “double compensate” sales and customer success on renewals and incidental upsells, and why it’s OK to pay sales on non-incidental upsells to existing customers (don’t put your farmer against someone else’s hunter).
- Why you can’t analyze churn by analyzing churn and why you should have a rigorous taxonomy of churn.
- My responses to Harry’s “quick fire” round questions.
You can listen to the podcast via iTunes, here. Enjoy!