📕 Convertible Notes To Avoid A Down Round; Scaling GTM Strategy From A 25m To 50m ARR Business; The Most Scarce Resource In SaaS…

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🎈 The many scientists who have identified fresh water and soil as the most valuable resources on earth may need to think again, as Vista Equity Partners founder and chairman Robert Smith recently proclaimed that programmers are the most scarce commodity on the planet. Jokes aside, Smith may have a point. Despite massive layoffs at Twitter, Intel, Snap, and many other big techs, U.S. job openings rose in September 2022 and software developer postings specifically are up 57% since early 2020. This is to say, even amid economic uncertainty and major cutbacks, we are clamoring for more developers. The desire for more devs isn’t limited to the U.S. either – IDC believes the global shortage of developers observed in 2021 (1.4m) will balloon up to 4m by 2025 if there isn’t an improvement in educational infrastructures that empower full-time developers early in their careers.

🥫 While we’re parked on tech private equity takes, let’s turn to Thoma Bravo Managing Partner Holden Spaht and his recent LinkedIn article addressing capital availability in today’s market. He points out that in recent years, capital has been cheap and plentiful for fast growth firms, creating the common expectation of high valuation rounds which always go up. Ever increasing valuations driven by growth made profitability an afterthought for startups, and debt unnecessary. Clearly, we are in a different place today, but some companies in need of capital are reluctant to swallow down rounds, instead taking convertible notes which kick the valuation can down the road. Spaht advises that lower valuations aren’t actually as bad as perceived, and that waiting and hoping isn’t a great strategy for a down round which will likely need to be incurred at some point.

🍒 Bessemer Venture Partners (BVP) VP Janelle Teng shared a great piece on how to scale your GTM from a $25m to $50m ARR business, and more specifically, how to bring repeatability to your sales motion. The blog includes 8 lessons to accomplish that end goal, using examples from BVP’s own portfolio to help illustrate. Lesson 2 is probably the toughest to swallow for sales teams but the best place to start – transitioning to standardized processes and documentation. Pre-10m ARR, almost all deals seem to be an exception or require a cherry on top such as roadmap promises, extra services, or even CEO face time. While it’s tempting to do everything you can to close big deals, those sort of “acts of heroism” tactics don’t scale, and CPQ (configure-price-quote) software becomes a must to bring uniformity to your contract process.

🎄 We are almost at Q1, when most rebrands and product launches happen. If you are planning yours, you may want to check out Obviously Awesome first. It emphasizes the need to nail positioning before all else, otherwise, your other marketing efforts simply won’t take you far. The book covers a 10-step process to positioning, but also includes 5 specific components which we thought were great:

Competitive alternatives. Know what your customers would use if your product didn’t exist.
Unique attributes. What features does your product have that those competitive alternatives lack?
Value and proof. The benefit those features unlock for your customers.
Target market characteristics. The characteristics of buyers that make them care about the value you offer.
Market category. The market you label yourself as being part of, to help customers understand your value.

As always, if you or someone you know is considering selling, taking investment, or even looking for a bit of debt we might be able to help out. Just reply to this thread and we can get acquainted. We may or may not be a perfect fit, but we’re always up for meeting SaaS founders and extending our network where helpful.

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