5 Books Every SaaS Leader Should Read

We all know it’s hard for tech entrepreneurs to find time to read actual books. But there’s much wisdom on those dusty shelves, with valuable lessons for leaders of SaaS companies.

Here, our CEO BJ Lackland tells you why you should pick up these five books in your hours away from your laptop screen.

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Why Transparency is so Critical for Startups

“A Leader Struggles to Sell Software Meant to Aid Sales,” read the August 2014 New York Times headline about Matthew Bellows, founder and CEO of Yesware, Inc., a company that makes email tools for salespeople.

Revealing his struggles to a reporter was a moment of vulnerability for Bellows. But such openness is part and parcel of his management approach, which prizes extreme transparency as a way to encourage a thriving company culture.

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How Knowify Found the Perfect Source of Funding

Marc Visent, CEO of Knowify, and Allen Johnson, Chief Investment Officer at Lighter Capital, recently joined Intuit’s Developer Evangelist David Leary to talk about Knowify’s funding journey in an online “fireside chat.”

Here are some takeaways:

On Lighter Capital understanding SaaS models:

  • In seeking funding, Visent appreciated how Lighter Capital understands how SaaS companies work. “A bank doesn’t have the knowledge to lend to a subscription-based company like ours, but Lighter Capital has this knowledge about how these companies work,” he says. “We show them our numbers, we show them our model, we show them how we run our business—for them it was probably straightforward. While with everyone else, it’s a long journey of explaining what SaaS is, Lighter Capital are experts at this. That’s why it was a great option.”

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Congrats, You've Just Secured Funding. Now What?

This is it! The moment you’ve been waiting for through those long hours of working to translate a fledgling idea into a real business. You’ve got funding.

Whether it’s a traditional bank loan, VC funding, or revenue-based financing, you’re now poised for a new level of success. And that means more responsibility, more planning, and more work.

Luckily, it’s exciting work. So let’s get down to it. Here’s what you need to do now.

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How to Market Like a Human

It’s tempting to think that our customers are rational – that they make logical decisions about what to buy and why. But since when have humans made decisions solely with their heads?

Researchers have found that people’s emotional states profoundly impact the decisions they make. Even sunshine can affect the stock market.

There are many different psychological triggers that can make a potential customer more likely to become an actual customer.

Here are a few on which you can easily capitalize in your marketing efforts.

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Is the Startup 'Cultural Chasm' Real?

Most startups begin life full of enthusiasm and energy, with a scrappy team of visionaries working hard to build the next big thing. It’s easy for those in charge to ride this wave of adrenalin without giving enough thought to what comes next, which is invariably a new phase of the business that involves an expanding staff, a more methodical approach, and – if companies aren’t careful – the onset of employee dissatisfaction.

A study of 100 early-stage ventures by David Niu, CEO of TINYpulse, and Mark Roberge, CRO of HubSpot, found that some 70% of startups start having problems in years three and four, with staff reporting increasing unhappiness. This dip in the team’s morale occurs no matter how blissed-out they were at the beginning.Read more

Managing your SaaS startup’s burn rate

Here’s the deal with raising growth capital for your startup: it will only last you so long, and you’ll spend it far faster than you ever imagined. Managing your burn rate, or the pace at which you spend your cash, requires a balanced approach to risk. There’s no getting around it; you need to spend money to make money. So, at certain times in your startup lifecycle, you’ll hit the gas pedal and blow through some money to make things happen. On the other side, you should be prepared to slow down (or pull the emergency brake) if you’re moving through your capital too fast.

The thought of finally obtaining the funds to take their business to the next level, and the possibility that it could all slip away (or burn up, if you will) keeps many founders up at night. Founders find themselves fixated on questions like how much runway is left? What’s the zero-cash date? Knowing how to calculate your burn rate, and keep it low, are fundamental to startup success. Read on to see how it’s done.

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Sell high: your monthly subscription product, compounding, and revenue growth

Subscription models bring a new level of complexity—deferred revenue, monthly recurring revenue churn, customer churn—but it also brings benefits: sticky revenue streams that one-and-done business models can’t achieve, low cost of goods, and gross margins that increase with scale. One of the easiest levers to pull is the cost of your monthly subscription model.

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6 bootstrapping strategies from CEOs who made it to $100M ARR

In the world of tech startups, bootstrapping has a special cachet. Bootstrapped companies that make it big—say, to $100M ARR—without relying on venture capital or angel investors are looked on with something like awe. (Note that relying is the key word here--some boostrappers may take VC money, but only after they don’t truly need it.)

The founders of such companies are the Yodas of the tech startup world, full of hard-won wisdom and quotable advice. They know what it takes to grow a company to profitability the hard way. Here are some concrete strategies the founders of MailChimp, Atlassian, and Tableau have used to maximize their margins and grow without VC.

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When (and how) should your SaaS startup build a product marketing team?

Ah, the old “what is product marketing” debate. And then there’s the product management versus product marketing dilemma, with the all too common tug-of-war struggle to divvy up areas of responsibility properly. Any way you cut it, product marketing is most often seen as something of a gray area, living at the intersection of your product, sales, and marketing organizations. And while there are plenty of good frameworks to help you figure out who should own what within your own organization, I often hear two questions from SaaS businesses that have started to scale...

  • When should we hire for product marketing?
  • How should we go about building the product marketing function?

This post aims to answer both of those questions.

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