Jason M. Lemkin’s Post

"While I thought I understood the market we were attempting to create and attack, with time, I realized I didn’t fully research comps as deeply or successfully as I could have."

You'll have a lot of regrets on your startup journey. One of the biggest though will be all the time and money you wasted on a few VP hires that looked good on paper, that a lot of folks "liked" -- but were just terrible. Or to be specific -- terrible at your startup. Right LinkedIn, Wrong Fit. 🤷♂️ If you aren't 100% sure, slow down a VP / CXO hire. Have your top mentor talk to them, if nothing else. 🚀 If you are 100% sure, but they don't quite have the full package, the perfect LinkedIn ... well of course they don't. You're not OpenAI or Wiz.  Truly Great Stretch VP > Perfect VP Wait and Push On > Placeholder VP

Worst case, just build what your top customers want They can't see too far into the future But they probably have a better sense of what really moves the needle in the short term than you do

12,000+ of the Best in SaaS and Cloud SaaStr Annual 2024. Sep 10-12 in SF Bay. The Playbooks The Secrets to AI in SaaS The Best VCs 400+ CROs and CMOs and so much more!! Grab 20% off to SaaStrAnnual.com here - > https://lnkd.in/gbc7Ddi3

So there's a vertical SaaS leader at $620 million ARR ... that you probably haven't heard of. Instructure. They make Canvas, #1 SaaS for schools in U.S. Your kids probably use it. You may have used it. The company IPO'd, went private, IPO'd again, and is looking to go private again. It's been a bit under the radar. And it's growing 21%, with 40% non-GAAP margins! The good and bad? It has 40% market share 5 Interesting Learnings: #1.  Core Canvas Product Has Hit 38% Market Share in North America The good and bad in winning a market.  Instructure rocketed from $1m to $100m in just 5 years -- and $200m in just 7 years! That's the power of vertical SaaS. But then they began to hit TAM issues after $200m ARR. By its calculations, Canvas / Instructure now has 38% market share in North America, way up from an already impressive 14% in 2015.  That’s impressive, but also at the point where it gets much harder to grow share. #2.  103% NRR, 93% GRR Canvas is a sticky product. Folks don't leave. They also haven't seen many "macro" impacts. #3.  11 Products and Modules, 80% of Customers Use 2 or More Products A good reminder of the key to being multi-product at scale. Instructure has gotten good as selling more and more Canvas modules and products to its core customers. #4.  Guiding to 9%-11% Growth Going Forward Like so many in SaaS today, they’re guiding for lower growth going forward, down to 9%-11% overall, and as low as 5% for their original core product and core North American buyers. Schools love Canvas. But as they come up on 50% market share, there's only so many in the U.S. left to sell to. Growth is slowing to 5% for the core original product. So they did a large acquisition of an adjacent player, Parchment, to fuel growth. #5.  Even with Slowing Growth, Will Hit $1B ARR by 2028 The power of recurring revenue and NRR > 100%.  Even with slowing growth, growth still … happens.  Instructure can clearly predict $1B or more of ARR by 2028.  With a goal of 40%+ adjusted EBIDTA margins.

That VP with the perfect LinkedIn Just wants to run the same playbook as last time OK if that’s the right playbook to run. It probably isn’t.

12,000+ of the Best in SaaS and Cloud SaaStr Annual 2024. Sep 10-12 in SF Bay. The Playbooks The Secrets to AI in SaaS The Best VCs 400+ CROs and CMOs and so much more!! Grab 20% off to SaaStrAnnual.com here - > https://lnkd.in/gbc7Ddi3

Startups are hard Personally: - My cofounder walked out door - I spent all money - I had to sign a full-recourse $750k note - Our product failed at top customer - My VPS told my board I was incompetent - My family didn't understand - I went through recessions Could have quit

12,000+ of the Best in SaaS and Cloud SaaStr Annual 2024. Sep 10-12 in SF Bay. The Playbooks The Secrets to AI in SaaS The Best VCs 400+ CROs and CMOs and so much more!! Grab 20% off to SaaStrAnnual.com here - > https://lnkd.in/gbc7Ddi3

My top tip to upgrade yourself in the back half of the year: Be More Gracious - Turning down a VC? Thank them truly for putting in the time - Turning down a management role? Thank them for believing in you — and try to find them another great candidate if you can - Downgrading your spend at a loyal vendor? Tell them it’s tough out there, but you’re happy to be a reference and help in other ways - Raising prices … yet again? Ship enough new software, features, etc. to more than earn it, for real. - Leaving a role where you matter? Give a few weeks notice. Maybe even try to find a replacement before or after you go. - Leaving a struggling startup? Be the one that at least has the conversation first. Give them a shot to tell you why you should still stay. - Someone gave you an hour of their time just to help? Send them something. A nice thank you. A small gift. A bottle of wine. Whatever. Don’t just ghost them after. We’re all just a little less gracious these days. It’s OK. It is what it is. But it’s also so, so easy to stand out here. Be More Gracious.