Blue Horizon’s reading list is a curated collection of articles for SaaS founders and management teams. We are entrepreneurs and operators who have lived through the process of founding and scaling software companies. Here are the articles and resources we found useful this month.
When You Don’t Know the Product Cold, You Just Lose Deals
by Jason Lemkin
My lesson learned: everyone has to know the product cold in a startup. And especially, everyone that interfaces with customers and prospects…And a few related learnings:
▪️ I find most B2B sales reps are unable to sell technical products. And most B2B sales reps that have sold “core” products like Gong, Outreach, Salesloft, etc. that they themselves use…struggle to sell complicated enterprise products that solve problems they aren’t personally familiar with.
▪️Training is critical but it’s not enough…A few days of training to start is great but doesn’t not instantly turn you into a subject matter expert.
▪️You gotta talk about your losses — every week. Way too many sales teams only talk about their wins. That’s great, but the reality is you learn even more from the losses. Or at least, just as much. Spend 50% of your time honestly talking about the deals you lost that week.
The Fastest Growing Software Sectors in 2024
by Tomasz Tunguz
For now, software buyers view security & data products as highest priority. As a result, these businesses project higher growth rates & fetch more attractive valuations in early 2024. This dynamic will very likely cascade into the private markets as well with both acquisitions and financings in these categories priced at a premium.
Unrealistic Goals Can Hurt Startup Morale
by David Cummings
As an entrepreneur, it’s crucial to find that balance for your organization—setting ambitious goals without making them so lofty that they become unrealistic and harm morale. It’s a delicate balance with no straightforward solution. Entrepreneurs would do well to find their own approach to this and be intentional about how they lead their organizations in respect to goal setting.
CrowdStrike – “Rule of X” Winner!
On OnlyCFO’s Software World
The obvious flaw with both the Rule of 40 and Rule of X is that they both only look at current financial profiles of growth and profits while most of a software company’s value comes from longer-term durability of growth and profits (i.e. how long can they sustain high growth and strong profits).
How to Reaccelerate Revenue Growth
On OnlyCFO’s Software World
To create the optimal revenue growth plan, you need to start with the tops-down aspirational plan of what you want/need to be able to do. This conversation starts with the CFO and CRO and is then shared with the broader executive team for alignment and iteration. After the initial tops-down model is completed and a revenue target is defined, the CRO must complete a bottoms-up model to determine what they think is reasonably possible given all of the potential drivers – number of sales reps, estimated attrition, ramp times, rep productivity, etc. This helps the CFO and CRO to triangulate the company target.
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Blue Horizon acquires and invests in profitable software businesses with stable recurring revenue streams. The Blue Horizon platform combines long-term capital and industry expertise with an operating model that enables businesses and their leaders to focus on growth and profitability.