The secret sauce for building a “rockstar” SaaS company

Last week I attended the SaaStr Annual conference in San Francisco. This was my second year in attendance and for those of you who weren’t there SaaStr Annual is a three-day conference dedicated to all things SaaS. In addition to mingling with 10.000 odd ”SaaStrs” from all over the world the conference is also a chance to listen to the crème-del-a-crème of founders, top managers and investors from some of the most iconic SaaS companies who are on stage non-stop to share their experiences, learnings and recommendations for how to build a winning SaaS company. This year's theme was "Learn to scale, together” and there were tons of insights shared across domains such as sales, marketing, talent management, strategy, leadership and finance. So, with inspiration form these "Titans of SaaS” I set out to summarize the common denominator between the winners, to find the recipe for building a successful SaaS company if you like. However, for those in attendance it rather quickly becomes obvious that there is no specific formula to follow, there are no cookie cutters to apply. The companies that have achieved success have done so by going after enterprise customers as well as SME customers (or sometimes both). Some are vertically laser focused while others are industry agnostic. There are those that have raised massive amounts of venture capital, while others have bootstrapped their way to fame. Low touch, online, acquisition strategies have worked well for some companies whereas high touch good old fashion feet-on-the-street customer acquisition was key for others. Some companies have hired outside expert managers to help in growing their organizations at hyper speed, with yet others building all the way to IPO with the original entrepreneur at the helm.

In summary, my conclusion is that there are as many individual recipes as there are successful companies.

There is however one common ingredient that is core to all the successful recipes, one common trait that all these "poster-child” companies share, and that is a very strong emphasis on company culture. Purposely designing a strong and well articulated culture around a set of distinct organizational values creates clarity and alignment by making it very clear to everyone in the organization what is important and what is expected of every member of the team. This clarity and alignment is the lynchpin to successfully managing rapid growth where revenues and employee count double, triple or even beyond, year on year. There is no way to micromanage through rapid growth, you simply can’t make enough decisions fast enough, and you can’t really train people on every aspect of their job because the business, and thereby job roles, are constantly changing. Culture is the glue that keeps the organizational cog wheels ticking under this massive strain and allows a continuous flow of new people to join the team without creating chaos and wasting money. Below are a couple of anecdotes that were shared on stage at SaaStr and which attest to how paramount culture is in building a successful SaaS company.

Trello was recently acquired by Atlasssian and Michael Pryor, the Trello CEO, shared his story behind how Trello is a result of the founders starting a company that was, in essence, "a cool place for developers to work in NYC". That is a strong cultural statement if ever there was one. According to Pryor, when the Trello team accepted the Atlasssian acquisition offer, they did so in no small part due to the strong cultural fit between the two organisations.

Veeva is an incredibly successful vertical SaaS for the life science industry. Founder and CEO Peter Gassner shared his story on Veeva’s mission to make a difference in people’s lives by helping to accelerate drug discovery and new therapies. That is bound to be a very inspiring statement for current and prospective employees that says a lot about the culture of the company. He further described how he looks for cultural fit in hiring and the importance of not growing too fast, because you may not find people who are a good fit for your culture. 

Dustin Moskovitz of Facebook co-founding fame now runs Asana, a team collaboration SaaS. Moskovitz shared on stage how Asana has incorporated mindfulness and work life balance into its mission. That is not a very common focus or priority in Silicon Valley and is bound to set very distinct cultural tones that will attract, or possibly deter, talent to Asana. Regardless, by being crystal clear about this, the risk for Asana to hire people with poor cultural fit is very low and they stand out by offering a great place to work for high performance individuals who need to balance their work with family and a spouse that is also having a professional career.

On a panel about managing change through hyper growth three early Salesforce executives described how Marc Benioff, the Salesforce founder and CEO, used to meet with every single employee candidate before the company made an offer, even when the company was at the stage of making hundreds of hires per year meaning he’d spend a very large part of his time in recruiting meetings. This was all to ensure the proper cultural fit between Salesforce and the prospective employee.

I could go on here, but I think I have made my point. If you haven’t properly thought about your company culture and how that serves you in attracting the best and brightest people necessary for delivering on your company’s ambitions, it is high time to do so now. If you don’t know how to go about this, I will give you a head start by recommending that you pick up ”The Advantage” by Patrick Lencioni and run through some of the simple, but very powerful exercises recommended in that book. Good luck!