4 Common Mistakes SaaS Companies Make While Scaling Revenue
4 Common Mistakes SaaS Companies Make While Scaling Revenue
Here’s how early-stage companies can avoid pitfalls when scaling up
Hello and welcome to The GTM Newsletter - read by over 50,000 revenue professionals weekly to scale their companies and careers. GTMnow is the media extension of GTMfund - sharing insight on go-to-market from working with hundreds of portfolio companies backed by over 350+ of the BEST in the game executive operators who have been there, done that at the world’s fastest growing SaaS companies.
This week’s newsletter is brought to you by Pocus.
It’s no secret that scaling a business comes with challenges. SaaS leaders have to navigate growing the team at the right pace, structuring the GTM organization, establishing pricing, maximizing resources, and leveraging the best suite of tools to help everyone achieve their goals.
Suresh Khanna has been there, done that. He served as President and CRO of AdRoll for six years, leading all revenue functions and transforming the business into one of the world’s largest ad tech companies with $150M in net revenue. Before that, he was the Director of Inside Sales at Google.
Currently, Suresh is the president of Treez Inc., a Series C point of sale and payments company in the cannabis industry, and founder of Pieces, a Series A startup building productivity tools and developers.
Suresh has learned through experience what SaaS companies get right — and wrong — when scaling up.
These are the common mistakes he’s seen, and how companies can successfully navigate the challenges of scaling revenue.
Let’s get into it.
Mistakes SaaS companies make while scaling revenue
4 common mistakes👇
1. Missing the signals for moderate vs. high pain
It’s tempting for SaaS companies to want to validate the need for their product. You might even ask leading questions in early discovery calls to prove that there is indeed a pain point your product can solve. Yet these surface-level signals can muddy the waters as your team tries to find your ICP and iterate on the product.
Think of it on a scale of 1-10, with 10 being the highest pain. In the 5-7 range, your product can make a prospect’s life better, but that doesn’t mean they can’t live without the product. Even if you address these pain points better than your competitor, it’s unlikely that prospects will divest from their current tools to adopt something new for a slight improvement.
Companies can avoid this pitfall and source “high-pain” prospects by:
Spending more time in discovery. Engage in candid conversations to learn the core challenges your prospects are facing. Be honest when talking to prospects (and with yourself) about whether your product can solve their mission-critical problems.
Looking at the right signals. Pay attention to how quickly a deal closes, how successful onboarding was, how much value a customer is getting from the product, and how quickly they derive that value. This can tell you a lot about who your product is for and inform your processes going forward.
Leveraging referral-based growth to find more high-pain opportunities. Early-stage companies can lean more into referrals to find the right prospects. Chances are your customers know other organizations or individuals with similar pain points.
Use lookalike modeling. Winning a deal allows you to reflect on what went right. You can theorize and explore what ultimately led to a conversion — it could be the type of buyer, their industry, or the tool they used before. From there, the team can go after similar or “lookalike” prospects.
2. Having too many product and business variants
During Suresh’s time at AdRoll, the team had three different products launched in various markets across the world and a variety of customer segments, leading to a nearly unmanageable workload and complexity for the team. Early-stage SaaS companies may not be at a global phase yet, but launching too many initiatives and product variants at once can result in resources being spread too thin. A more effective approach is to simplify, focusing on a single initiative and executing well.
3. Hiring too quickly
Scaling revenue doesn’t necessarily mean you need to scale the team. A slow and strategic approach to hiring allows companies to grow more sustainably and avoid unnecessary layoffs and reputation damage. Maximize resources by identifying and empowering your most effective players, rather than calculating how many account executives or sales professionals you need to support an unknown number of deals down the line. As a bonus, each AE is rewarded with more deals, without having to share resources.
We all love a good story, and in SaaS, a company that grows quickly is a compelling business tale. But it might not have a good ending. “Taking some of the pressure off gives you time to hire really smart people that can wear many hats, and test your assumptions on their capacity,” says Suresh.
A better story for your investors is around unit economics: prioritize key players who can close better deals more quickly.
4. Not hiring for the right traits
Along the same lines as hiring slowly, hiring the “right” people in the early stages sets your company up for sustainable growth. A smaller SaaS company doesn’t need to hire 100 new sales reps, but they’ll want to bring in a few A players who can represent the company. Effective hires ask the right questions on sales and discovery calls, are willing to speak up and challenge decisions, and share their insights with the team.
Suresh has a rubric for hiring AEs, which can apply to hires across the board:
Collaborative - “Are they going to work well with their peers? Are going to teach the people around them? Do they feed the product team with insights?”
Humble - “They’ll wear any hat; they'll go on any mission you send them into; they're there to win for the team, not just for themselves.”
Smart - “I don't mean they have a high IQ, I mean they are a quick learner. How much learning dexterity does this person have? Are they curious? Do they ask good questions?”
Ambitious - “This word for me means ‘wired for greatness.’ I'm looking for people that wake up and want to be somebody. ‘Ambitious’ is the most important quality for me.”
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👂 More for your eardrums:
Kyle Lacy spent the last 17 years building, scaling, failing, and winning in high-growth software. He is currently serving the Jellyfish team as their CMO, and before joining the Jellyfish ‘bloom’, He had the pleasure of building a company called Lessonly, employing over 230 people and changed the lives of many more after the acquisition. He has also been fortunate to lead teams at Seismic, OpenView, Salesforce, and ExactTarget. Most importantly, he is the father of two wonderful boys, an energetic dog, and one too many books on World War II.
In this episode, you’ll learn about pipeline models and numbers for early-stage companies, gaining equal footing with sales leaders, building a personal brand and more.
Listen wherever you get your podcasts by searching “The GTM Podcast.”
👀 More for your eyeballs:
Did anyone get tricked by any of the April Fools’ campaigns earlier this week? These were two of our favorite:
Pocus announced a new feature called ‘ZQLs’.
They launched that Zodiac Qualified Leads (ZQLs) are the revolutionary lead-scoring technology from Pocus that harnesses the cosmic wisdom of astrology to transform the way you sell. ZQLs are the secret for unlocking the full potential of every sales interaction.
They even got Corporate Bro in on it. Perhaps too believable? They had some customers reach out thinking it was real!
Measuring only a few pixels, microsites compress your entire website into a single page so small you’ll need to squint. Talk about the ultimate hack to conversion rate optimization! There was a great video to go with it that your eyeballs won’t want to miss.
The best part? They tied this April Fool’s joke to real launches!
On Monday, they shrunk the website down to the size of a few pixels (check it out).
On Tuesday, they revealed it was an April Fools joke, but also launched the real Microsites product, enabling the creation of AI-powered 1:1 landing pages for all your target accounts (check it out).
On Wednesday, they opened enrollment for ABM MBA, a 100% free, super tactical course on how to build and scale an ABM program (check it out).
🚀 Start-ups to watch:
Seso - raised a $26M Series B to continue building critical software for American farmers. This round of funding will be used to expand their platform, including adding an AI-enabled payroll solution, a banking and remittance solution for farm workers, and a comprehensive HR platform purpose-built for agribusiness employers. Farmers everywhere will now have access to a comprehensive solution that will help them scale to meet seasonal demands and reduce reliance on pencil and paper. Read more about Seso’s Series B round in TechCrunch.
Airspeed - dropped three AI product innovations to strengthen employee connection: AI Awards, AI Chatbots in Slack, and AI Writing Assistants. AI Awards, the first such capability of its kind, makes the process of creating awards on a regular basis, such as for a monthly all-hands meeting, simple and automated. AI Chatbots in Slack enables a ChatGPT-like experience in all Airspeed apps, letting you ask any people-related questions from the Messages tab. AI Writing Assistants help remove writer’s block when you’re thinking about what to say to a colleague for their work anniversary, birthday, shoutout and more. Read more about how Airspeed is using AI to strengthen employee connection.
🔥 Hottest GTM jobs of the week:
Lead Product Marketing Manager at WorkRamp (Remote - US)
Business Development Representative at Spekit (Denver, CO)
Revenue Operations Analyst at Vanta (Remote - US)
Marketing Manager at Esper (Remote - US)
See more top GTM jobs on the GTMfund Job Board.
🗓️ GTM industry events
Go-to-market events you won’t want to miss:
April 9-10: Spryng (Austin, TX)
April 16-17: PLGTM (San Francisco)
April 17: Goldenhour (NYC or Online)
April 18: CMO Summit (NYC, NY)
Reach out to Sophie Buonassisi on our team if you’ll be at Spryng, Goldenhour or CMO Summit.
◼️ GTMfund corner
We hosted two events in San Francisco this week:
Co-hosted an intimate event with a partner on Winning Competitive Markets.
A GTMfund dinner - these are private executive dinners across North America and Europe, bringing together 40 of our executive go-to-market operators and founders at each. This dinner, we couldn’t resist but to expand the restaurant to accommodate more incredible community members and brought 55 executives together.
Next week we’ll be in:
LA for SuperReturn, an event for private market leaders.
Austin for a VC partner event and Wynter’s conference, Spryng.
NYC to host a GTMfund dinner.
That’s it, that’s all.
Many thought-leaders, consultants, agencies, influencers need to keep pumping out content for the sake of pumping out content because that’s what fills their funnel.
It’s hard to tell the difference between what’s actually working/been proven to work vs. what sounds good on paper and build an audience.
That’s why GTMnow only highlights real operators in the trenches and we ask them to speak through their lived experience vs. pontificating about what they think ‘might’ work. This is across The GTM Newsletter, The GTM Podcast, and all other media assets.
Suresh is truly one of the best executive operators who has truly been there, done that. Always appreciate when incredible operators share their insight and advice through their lived experiences and stories.
Have a great weekend ahead!
Barker ✌️