Tracy Hernandez’s Post

A must read if you are building a business focused on a specific vertical, I.e. don’t loose heart in the dark times. You are making something that industry really needs and you’ll go deeper and be better than all the generic solutions. You’ll most likely exit to a horizontal SaaS company looking to go deep on your vertical based use case. And I’d guess at a premium. Id love to see a ROIC analysis across 10 exits vs horizontal exits David Spitz ? Thanks again for the insightful post.

Vertical SaaS killed it in GTM in 2023! 😂 At least, compared to the rest of the SaaS world. No matter how you slice it… Just 22% of revenues spent on sales & marketing  – compared with 41% for everyone else (medians). … and the more telling GTM Spend Ratio: $1.76 spent for every $1 of Net New ARR (vs. $2.40 for everyone else) Stealing from my “Ode to Vertical SaaS” from a post last fall…. "People used to shy away from vertical software. They said too niche-y.  Limited TAM. Well, one person’s niche is another's private GOLDMINE. You see, with great products that solve a vertical’s problems and a critical mass of happy customers, you can build an amazing business in vertical SaaS. The best part?  GTM network effects! Your customers become your marketing & sales engine.  It’s GTM on steroids.  Highly efficient." Some other nuggets from the 2023 data: - Growth rates – vertical vs. everyone else – were virtually the same at 17%-18% - Other operating cost margins (R&D and G&A) were also indistinguishable - But gross margins for Vertical SaaS were lower – since many offer attached, lower-margin services This lower GM point is important. The obvious question: Does this negate the GTM advantages? To answer this, I came up with a (admittedly contrived)  “GM-effected Payback”* metric. (I usually loathe complicated, compound metrics. But I felt it was helpful here as it captures the tradeoffs). The result – 29 months for Vertical SaaS vs. 38 for everyone else – clearly shows the superior GTM economics for vertical, even accounting for lower GMs.  (NB: Be careful calling this actual payback since it incorporates churn and therefore overestimates the real payback period). If you’re a fan of vertical SaaS I encourage you to look at the work of David Yuan and his team at Tidemark. They should have some private company vertical SaaS benchmarks soon. #SaaS #metrics #benchmarks #vertical

At SaaS companies, being profitable is crucial. Approaching your strategy with a focus on profitability highlights that your GTM motions are sustainable for the long haul. Here are the best ways to do this… → Decrease Customer Acquisition Costs: One of the best ways our customers do this is by enhancing the returns on their existing GTM-motions by leveraging better and more accurate data points. → Don’t create loss leaders: Your payback period should ideally be less than your minimum cost period. Essentially, every plan you sell should recoup its costs ASAP. → Minimize Service Costs: Service your customers as efficiently as possible. This could mean leveraging offshore talent or reducing technology bloat. (or only bringing in customers who are a good fit) Being GTM-driven means becoming obsessed with the above. (and the customer data that’ll help enhance your GTM-motions’ results) --------------------------------------------- DataBees helps SaaS GTM teams by building bespoke data machines which fuel your GTM motions. Hit me up if you want to chat about us putting together a sample for you.

SaaS founders - great post here with lots to digest: o comps are always helpful to help guide you as you build your biz o Don't know what one of these metrics is/or why it's important? let's talk! o How are are you measuring up against these comps - if < $100m arr, I'd say your arr growth needs to be substantially higher than these... s

The recent buzz around Google mulling an offer for HubSpot got me thinking... What is the next wave of M&A going to look like? And, will it ultimately create a holistic GTM Tech Stack that actually spans pre-and-post sale to orchestrate engagement over the entire lifecycle? Read my musings below - and I'd love to hear you feedback on how you see M&A shaking up the landscape in 2024 and beyond... https://lnkd.in/dvybi3UQ #M&A #Hubspot #google #salesforce #Adobe #amazon #CRM #martech #customersuccess #gainsight

As I work with many start up and high growth SaaS companies, this topic comes up the most often. So I am sharing some best practices in GTM Planning and Execution that can be simple but will help you create a solid foundation early on to plan a more focused strategy and drive results faster. #GTM #Strategy #CEO #CRO #COO #SaaS #Execution #Results https://lnkd.in/gCBQG4WX

🆕 ThriveStack Blog: “SaaS GTM is Broken, Long Live S&M Spend.” 🌟 We spent time reviewing public information about SaaS Growth and attempting to correlate it with departmental spending, and customer acquisition tactics. Thanks to information shared by Jason M. Lemkin SaaStr, David Spitz, Vinay Bhagat/TrustRadius, and Dave Boyce. It made it easy to correlate. And a shoutout to Dave Rigotti for sponsoring coupons to PLGTM.com 🔗 Read the full article here: https://lnkd.in/d9GqG2mn 🔍 Key Takeaways: 💫 Age of Self-Serve is upon us: Buyers are expecting self-service, 💰Operating Expenses: However, SaaS companies are raising S&M budgets and trying to go after larger deal sizes. "Growth at all costs" is back in vogue. What do you think? 🗣️💬

Are your GTM motions truly aligned with your SaaS business's revenue potential, or are they just inflating your costs? In today's dynamic SaaS landscape, aligning the cost of Go-To-Market (GTM) motions with the revenue they generate is more crucial than ever. This alignment becomes vital as companies transition from Growth at all Costs to Sustainable Growth strategies. However, the increase in GTM costs observed (Figure below) from 2018 to 2023 highlights a significant issue: many SaaS companies continue to pay more for their GTM efforts, only to see reduced returns. The Core of the Issue: At a recent session with GTM operators, we delved into the importance of aligning GTM motions with the Average Contract Value (ACV). Customers expect detailed engagements involving multiple specialists for high-value solutions, not just a simple transaction. On the other hand, for lower-priced subscriptions, a streamlined, self-service approach is often more appropriate. This mismatch between GTM execution and customer expectations can lead to inflated costs and jeopardised growth, ultimately impacting company valuations and investor interest. The Path Forward: 1. Analyse Existing Motions: Understand which GTM motions are currently in play and evaluate their efficiency against your ACV bands; 2. Leverage Data-Driven Insights: Use the 'bowtie' model of your customer journey to analyse where you can optimise and reduce friction. This model helps to pinpoint where your customers find the most value and where your operations might be lagging in efficiency; 3. Refine and Streamline: Once you identify the most effective GTM motion for your current stage, focus on refining and perfecting it before hastily adding more layers. This approach ensures that each element of your GTM strategy contributes positively to your bottom line. The Resulting Impact: By taking these steps, SaaS companies can transition to a model where GTM costs are not just expenditures but investments yielding measurable returns. This shift is crucial for maintaining competitiveness and ensuring long-term sustainability in a market that no longer tolerates inefficiency. As we continue to navigate these changes, leadership must adopt a more strategic approach to GTM planning - one that is proactive rather than reactive and aligned closely with evolving market dynamics and customer expectations. Let's discuss how we can apply these insights to streamline our operations and drive sustainable growth. What strategies have you found effective in aligning your GTM motions with your revenue goals? #SaaS #GTMStrategy #SustainableGrowth

It's great to see that many companies today are jumping onto the RevOps bandwagon 🚀 But, let's be honest, there's still a fair bit of ambiguity out there, which begs Go-to-Market (GTM) leaders to ask the critical question: Are we really on the right track? 🤔 While we may not get the answer to that right away, I believe the right strategy behind the RevOps function can significantly influence your org's trajectory, regardless of size or whether resources are invested internally or externally. Here are a few key areas to keep in mind: 1) Understanding the Maturity Cycle: Having an understanding of your org's stage is crucial — whether you're starting up, scaling up, or IPO-ready? This awareness helps guide where you needs to focus and spend more time. Will RevOps prioritize building? or will they focus to maximize current synergies? This will help align your current and future needs. 2) GTM Strategy: Your RevOps should align with your GTM approach. Whether it's product-led, sales-driven, or a hybrid, the nature of your GTM motion dictates the skill sets and focus areas your RevOps should have to effectively support and enhance the org. 3) Predictability in Deal Velocity and Size: If you are dealing with unpredictability in transaction volumes or sales cycles, the right RevOps team should bring a level of predictability crucial for the strategic planning. Whether dealing with transactional sales or navigating long cycles with high Average Contract Value (ACV), forecasting and optimization are paramount to success. 4) Data Insights and Infrastructure: A subpar infrastructure will hinder your ability to gather actionable insights from your data. A world-class RevOps team should not only excel in data analysis but also in enhancing data governance, hygiene, and architecture. Without this in place your forecast will always be untrustworthy. 5) System Expertise: This is more of a ‘duh’. Employ individuals with a strong grasp of the tools in place, from your CRM to any other systems utilized for GTM, as this expertise can serve as an accelerator to your goals. 6) The Power of 'No': Lastly, your RevOps need to have a remarkable ability to prioritize. Often, that will mean challenging decisions and offering strategic alternatives rather than consenting to every directive. This skill serves as a testament to their focus on what genuinely matters. These areas can serve as a strategic framework to ensure RevOps is equipped to help the org win and may help navigate some uncharted waters. #revenueoperations #gtmstrategy #gtm #revenueoptimization #revops #startups #scaleups

RevOps is super exciting in the times when easy capital is drying and there is a need to look inwards to find ways to stop leakages, find efficiency and just get better at business cycle management let alone go to market strategy. #startupadvice #revenueoperations #dataanalysis #efficiency #revops