In companies founded by engineers - as many SaaS providers are - sales is sometimes a dirty word. But getting to healthy recurring revenue is the goal to building a sustainable software-as-a-service business, which explains why sales featured prominently on the agenda at the SaaStock conference in Dublin.
The two-day event was peppered with presentation titles like “Crossing $10m ARR [annual recurring revenue]”, “Revolutionise your online customer acquisition”, “Using direct sales to bootstrap to $8m ARR”, “Winning those six figure deals”, and “What the top salespeople in the world are doing right”.
Challenges and opportunities
Organisers put the attendance at 1,500 people - more than double those who visited Dublin for the 2016 edition. They came from an estimated 44 different countries: that’s testament to the demand from the SaaS sector for a carefully curated event like this. Presentations and panel discussions addressing the challenges and opportunities in SaaS.
It might not be easy for founders to admit, but building software as a service and selling it are two fundamentally different disciplines. “The person who’s good at hacking is not the person who’s going to grow the sales team,” said Tomer Levy, CEO and co-founder of Logz.io, an Israeli startup founded in 2014 that since moved to the US.
Teamwork, based in Cork, Ireland, now pulls in $18 million per year in recurring revenue. The company had bootstrapped since its early days in 2007, as founder and lead developer Peter Coppinger, admitted “we bought into the myth that you don’t need a sales team”. Five years later, an experimental sales hire singlehandedly added $700,000 in deals in seven months, and the company saw the way forward. “I’ve embraced sales,” said Coppinger. “The key lesson is, start your sales team early. If I had my time over, I would start the sales team at $1m ARR.”
When to hire for sales?
Why not hire a salesperson straight away? Because a company may still be figuring out what its niche is, and understanding what its ideal customer looks like. That’s why company founders should be the ones to close the first number of deals, said David Skok, the entrepreneur turned venture capitalist, and author of the influential forentrepreneurs blog.
One of the hardest steps for most founders is reaching the stage of a repeatable, scalable and profitable growth model, he said. “People tend to jump the gun. If you can’t sell the product as a founder, don’t expect a salesperson is going to be able to sell it for you.”
The art of the deal
Speakers also shared secrets of closing deals, and a recurring theme was to sell the benefits to the customer, not the features of the product. “Startups fail because they focus on their funding, not on their customers,” said Ludovic Ulrich, senior director for startup relations and appexchange marketing at Salesforce. “Customer experience is the most important thing beyond pricing and the product.”
Customer focus is especially important if the market your software addresses is a specific niche. “Make sure you get the product-market-fit right and understand your customer before recruiting sales team,” David Skok advised. Qubit’s Graham Cooke spoke about being literally close to customers at its Covent Garden office in London. “We are on the same street as five of our customers. Especially if you are creating a new category, it’s important to see what their pain points are and go and solve for that,” he said.
Market niches and customer needs
Dave O’Flanagan from Boxever reiterated this point. The company focused on key vertical markets from day one, gained a deep understanding of those customers’ needs, and developed the product in line with those requirements. “The key thing in our evolution was building simple use cases that our customers could understand and our sales team could sell. As we evolved past the first few customers, we could take the use cases as a way to sell value rather than capability. That really helped us unhook our go-to-market strategy... We won deals that we had no right to win.”
With SaaStock returning to Dublin in October 2018, attendees can look forward to more of the same insights from founders, funders, entrepreneurs and engineers. We’ll also be posting another blog, rounding up some of the key themes and takeaways from this year’s event.
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