Welcome to the official Sastr podcast, where you can hear some of the best Sastr speakers. This is where the cloud meets. Up today on the Sastr podcast, the classical approach to outbound is dead. I think a lot of us have been saying that in sales. The vendors are great because they're much more sophisticated platforms, but that old playbook of just load up a database with the same freaking email is dead. And I think most of us believe it's not dead, but the yield is really low.
And I think what I meant to say by that is that AI is blowing that up. We're all getting a trillion AI emails and they're terrible, but they're actually better than the ones the humans sent. I got a DM from an SDR today. Dear Jason M, will you be at SAS today? What time shall we meet? This is a human driven one. This is the quality of an SDR today. That is, that's what I mean is that is dead. Slow up the frack down. Stop with the dumb emails.
Hey, everybody. Thanks to the 10,000 of you who came out to SASTR Annual this year. We had a blast and big news. We'll be back in May of 2025 or in May of next year. That's right. SASTR Annual will be in earlier next year, the 13th to 15th of May 2025. We'll still be back at the same venue in the SF Bay Area in our 40-acre San Mateo County Events Center campus.
And tickets are never cheaper than right now. So grab your tickets at sasterannual.com with my code Jason50 for an extra discount on our very, very best pricing. That's Jason50 at sasterannual.com. See you next May at Saster 2025. Hey, don't let sales tax slow your growth. It's important in SaaS now. Anarok's all-in-one platform handles global tax compliance for fast-growing companies like Notion and Banta. Those are some of the best of the best.
Ready to simplify tax and need to do? Visit anrok.com slash Sastr today. A-N-R-O-K dot com slash Sastr today. Please welcome Jason Lemkin, founder and CEO at Sastr. Thank you, everyone, for being here. So this is great. Thank you for coming back. I'm not sure how much time we have, but this has become the extent that I can help.
This kind of closing AMA has become a little tradition. Maybe just a couple few notes first, maybe just more stuff for folks that have been multiple times. We've been doing Sastra Annual in September since that little bug went around in 2021. It was great. We did it in September because September 2021 was the first week we were allowed to do it. In fact, San Mateo County was the only county in 2021 that let us do an event. We've tested 5,000 people three times a day. It was pretty fun. So we did September for three years, but September kind of sucks.
There's way too much going on. There's Dreamforce, there's Inbound, there's a million things. So we're moving back. We'll be in May 13th to the 15th. May's the earliest we can do it that this venue's open, indoor, outdoor. So plan a little bit early. I think it'll be better. There's less going on. It'll be more fun. And Saster tickets are always relative. They're not cheap, but compared to anything else, they're cheap. But if you want super cheap ones, you can buy them today on sasteranual.com. Like they're literally more than half off if you buy them like this week at Saster Annual. So May 13th to the 15th.
It'll be fun. And just maybe just a couple of nerdy things that are interesting to folks that have been part of SaaS for a while. This event, in some ways, the attendance is a pulse of SaaS. And it is interesting what the numbers show. The raw attendance is about 103% of last year, just a tiny bit up. Both are great. In an ideal world, maybe it would be bigger, but it's pretty interesting that it's up. But the mix is pretty different.
of the people here, of that 103%. CEOs and founders up about 150% of last year. Folks from other countries are up, as you can probably tell. It's always been diverse. In 2021, the action is crazy. It was weird in 2021. The United States was locked down. It was all Americans in 2021. I think this year, it's a majority of folks outside of the US. So that's fun. So founders and CEOs are up. Overall, CMOs, CROs, CCOs are up because we've had three 200 plus.
summits here for CCOs here. We're going to do that bigger next year and integrate them more with everybody. So look for a thousand extra CMOs, CIROs, and CCOs to meet next year. That worked well. So those are good overall numbers. Founders are good. C-levels are good. VCs are about 60% of last year. About 60%. This Sastr, it's not designed. We have a VC lounge. We do stuff. It's not unlike something that's not designed for VCs, but it's traditionally been a magnet for VCs because of the concentration of founders. Down 40%.
I could hypothesize why. What is clear, no matter what you read, even great, we love all the carded data I quoted on Sastra all the time. The aggregate data says VC is back. It's on fire. You heard that from Tamaz and others, but not really. As we said in the opener, it's back, but it's different. And while YC is as hot as ever, right? I talked to two YC founders in this batch that got 40 VC offers this week, and the batch hasn't even started yet. So that's hot.
Portions of AI are so hot that hair is getting singed off founders. But a lot of folks in venture, even though it doesn't look like it, they don't have money to invest. They're struggling to raise another fund. They're sitting on the sidelines. They've slowed it down. They're worried. And I think, how true is that? I didn't know how true that was until this week, but attendance is down. It's only 60% of last year. I think that's...
If you really want to know what the vibe is for venture, for real, forget about the actual hard data. Thank you, Cardiff. But forget the hard data. What's the reality of the human data? It's about 60% or down 40%. That's still down. So it's just something to think on. So that is down. And then a couple other interesting things. There are more CEOs, founders, and CEOs. The individual contributors, the managers that...
They're not our core audience, but they love SaaS. The ones that really want it, not the reps working 10 hours a week from home for jobs, but the ones you want to hire, right? The ambitious ones. That group is down a bit this year. I'm worried about the next. I'm not worried about us. There's more of us than ever. I'm a little worried about the kids. I'm a little worried about the kids because that group is down, which we talked about in the opener. And then the last point I'll make, even though overall it's up, this was the first year we missed our inclusion goals here. And for folks that have been here for a while,
We were the first people that I knew of to have aggressive inclusion goals for underrepresented founders here. I think we started in 2017. I think I realized that we had to have 50% women speakers and as many diverse folks. We mostly hit our speaker goals this year. I think we came just under 50% women, which we shouldn't have, but I think we were like 60-something percent less represented speakers. But the weird thing was for attendees, we put a lot of money and energy into our inclusion program.
We had about 30% less takers than last year. 30%. So I think, I hope that this is a little bit more representative and diverse environment than your average bro tech event. I hope that it is, but I'm disappointed on many levels that despite 10,000 tweets, probably a half million or more invested, that goal we didn't achieve, even though we've achieved it since 2017. And I can hypothesize why, but it's something I'm going to reflect on because I think overall,
Folks, feel free to challenge me, but I think overall, tech cares less about inclusion and being representative than it did two years ago. It cared, I think, more in March 2020 when we shut down the world than it cared today. And then there was a revival in 2020 when it was on fire. And then there may be a lot of reasons that I'm not here to even have any politics in it. But I think we all know that as leaders, that the more diverse our teams are, the stronger they are on all vectors.
the more socioeconomic, the more gender, the more background, the more countries you're from. I know when I was a founder for the first time, my co-founder, who was a Palestinian Lebanese refugee female, she and I came up with only two rules. We wouldn't hire anybody from either coast. We didn't want anyone entitled in our company. So I was the only white male of some privilege in our original team of 14. We had folks from everywhere, from Vietnam and Mexico and everything.
I don't know. I think the Bay Area is the place of SaaS I would hire from here. But what I learned from that experience, we didn't know what we were doing as a first time founder. When she and I did that, our company was so resilient being that diverse. It was unstoppable. We did things that were actually were thought to be scientifically impossible. Do I think it's all because we were from 11 countries and had two out of three women on our founding team? I don't know. But I know that extreme diversity.
made us just resilient no matter what. And I worry as we've moved away from this, that we're more brittle and it is easier to work with folks that look like you and that were in your dorm. And I think it's okay for your co-founder to be your best friend, but I worry that we are building brittler startups and have forgotten. And I don't have the answers, but I'm bummed that this is the first year we missed that goal. And I'm going to try harder next year, but to be honest, but just between us.
I don't know how much more I could do. I don't know how many more emails I can send. I don't know how many folks that came to our inclusion last year that we asked to bring a friend, that we asked to share it. I can't tell you how many more leaders in tech. I asked about 20, I'll end it here. I asked about 20 CEOs and founders and CTOs in tech to help us with the inclusion program this year, okay? You know how many offered to help? One, Dharmesh Shah from HubSpot said he would fund the entire thing next year.
The entire frigging thing. The entire frigging thing. Yeah. So tweet that out. Okay. He didn't make a big deal. And I said, do it next year where you can help us. He said, just tell me what the check is and how I can promote it. And bless his frigging soul. Been to SaaS many times. The only one. So love the founder vibe. Founder power. Founders here more than ever. More C-level executives. Come back next year. There'll be even more C-level execs to do. VC's interesting.
I'm a little worried about the next generation, and I think we all have to do more on inclusion. Those are my learnings for this year, and I could do another, but I think that's it. So anyone who wants any questions or anything, let me know what we want to chat about. Hi, I'm Victor, early stage founder, B2B SaaS. Two questions. First one you mentioned earlier, outbound might be dead. Yes. How would you advise a company in my situation to find the first 30 customers? The second question is, in your data. Yes, you only get one, but what's the second one?
Yeah. Remote work. Does it work for ambitious company? Should we all be in an office? Do you have any data? How should start? Look, those are fun topics. The first one is, I think I did write on, I think I wrote on Saster. I'm not a clickbait guy. I like fun titles and fun images. I'm not a clickbait guy. But I did write something like that, that maybe was exaggerated a little bit. I think what I meant to say and wrote was that the classical approach to outbound is dead. I think a lot of us have been saying that in sales.
that the old classic spam cadences, I invested in sales off pre-revenue. I watched it happen and Mixmax and others watched Outreach. That playbook has, the vendors are great because they're much more sophisticated platforms, but that old playbook of just load up a database with the same freaking email is dead. And I think most of us believe it's not dead, but the yield is really low. And I think what I meant to say by that is that
AI is blowing that up. We're all getting a trillion AI emails and they're terrible, but they're actually better than the ones the human sent. That terrible, I got a DM from an SDR today. Dear Jason M, will you be at SaaS today? What time shall we meet? This is a human driven one. This is the quality of an SDR today. That's what I mean is that is dead. Who trains this person? Okay. So when I get the SDR emails,
With AI, they're better than that. They're like, hey, Jason, I'm so proud of this. But you can see that they all sound the same under the hood. But what I mean is because they're better than that crappy human I got today and because software will send it, we are already being inundated in SDR spam and we're being inundated in LinkedIn comments that are fake. And now that's spread to Twitter and X and all of my, I get a lot of engagement on LinkedIn. If you ever see, I get hundreds of comments. Now 70% are AI, right? So it's destroying.
This old cadence that used to work. That's what I meant to say. Now, what I also said was that through all of the history of time of software, back to the early tools of the 1700s and the early 1800s on those really early computers of those four bit computers in the 1820s selling software, finding someone through a carrier pigeon parchment email today at the exact moment.
when they have a problem and sending them the solution has always worked. It has always worked. And I remember when I was first a SaaS founder, I'd never done outbound. I'd done like seven figure deal, pick up the phone for huge deals, but I'd never done this type of outbound that we do. And then I was at Dreamforce actually, which is next week. And we had a customer panel and we had the CRO of SuccessFactors, which is bought by SAP. So a big part of SAP today.
And he's like, how did I find Adobe Sign, Echo Sign? This was the last week of the quarter. And my damn sales team, I couldn't take them standing by the fax machine anymore. And I got an email from you, Jason, at the right time. I'm like, me? That was my head of marketing that sent it from me. But literally, the busiest CRO wanting a public SaaS company, any other time, it would have been her. But he had that moment that day. He needed his problem solved. He had to close this deal. He could not stand it. This was the early day of e-signatures. And he bought that day a public company, right?
So that type of outbound, slow at the frack down, stop with the dumb emails. If you want to get you something, so if you're trying to get something off the ground, be honest first. Do you have a 10X feature? Do you have one? Because your product, if it's early, is feature poor, bug ridden, slow, and does nothing. No one needs your product unless you have a 10X feature. What is 10 times better?
Then figure out 100 folks. For real, slow it down. Spend a week, a month if you need to. Research 100 folks that you think have that 10x problem and spend an hour each writing them the email. Research that email for an hour, right? Hey, Jason at Saster. I was at Saster Annual. I saw you had this issue around some of the networking complaints. I did it. I'm not trying to do this. I can solve this one problem for you today.
Here's how the tool works. Here's how we did it for your competitor. Here's how we did it for someone else in your industry. I can solve this for you today. And if you're busy, I will do all the onboarding for you. I will do all the onboarding for you. Are you interested? If that's my top problem, I will take that email. I can't tell you for me. Now, I'm not a typical customer. I get an email a month from someone that actually can solve one of Sasser's top five problems. That one gets responded to. I often follow forward it to Amelia.
who run Saster, but that one gets responded in minutes. And the last, the related obvious point is there's so many tools. There's reasons that booths work because buyers come here. There's reasons that digital advertising works. It all works. But praise the Lord that email is an open system that people still use. You can reach, if you do it right, you can reach any executive with email. I was with Andrew Bilecki, CEO of Klaviyo, a billion dollar company yesterday.
Someone grabbed him. I said, Andrew, you don't get, he was swarmed. I'm like, no, I'll talk to this one guy. The guy gave him a pitch. He gave him his personal email. I said, email me about it. Email works. Email works, but it's gotta be great. It has to be great. And 99.99% of the sales emails we get are automated or mediocre or automated and mediocre. And AI, because AI is making it better, it's making it worse because there'll be a hundred times more.
mediocre, but not terrible email. We're being flooded with them that are almost good and it's not going to work. But boy, we forget the point of outbound is not to get. I hate this vibe of so many sales teams have their SDRs judged by how many folks they can get on the phone. I don't know about you, but it was always true, but it has accelerated the last two years. Whatever it is with CROs and BP, the sales are like, we're going to judge SDRs by calls. I get so many. I will outbound to a vendor that I will buy from.
Okay. I forget there was a tool. I literally would just buy that second a couple of weeks ago. I outbound is we have to get on the phone to talk about it. No. What I mean is these interactions are crappy. Make that email so good. Then slow it down. Then this is the trick to pitching VCs too. Here's the thing at the end of the day. This will always work. Find the hundred people that will really buy it from you and then slow it down. Make the best email. And then before you hit send, and no SDR on planet Earth does this, but founders can. Slow it the hell down and look at this email and say,
Would I buy my product based on this email? Be honest, just the frigging email. Because clearly with this guy at SAP, I didn't even write the email marketer. It clearly said, are you struggling with your sales reps at the end of the quarter? Is it taking them hours? Are you unable to find the deal? Would you like something that can be signed and pushed into Salesforce in three seconds? His answer was, it was a great email, right? No one writes that green email. I read all of them and forward the ones I get, right? So slow it down. No one asks, is this email...
good enough to sell the company on its own. How many SDR emails have folks ever gotten in the room where you would buy the product based on the email alone? It's one a quarter, if you're lucky. Because they're all crappy. Do that. And I'll give you one last story. And it turns out, I know it's not what you asked. It's the same story for venture capital, right? I published on Sastr. So I've done maybe 10 investments that founders cold emailed me. People say cold email doesn't work for investment. Many folks don't like it, okay? I invested in the...
The first one was a pipe drive from a cold email. That sold for 1.5 billion. I co-led the seed, okay? I did Algolia, which is going to IPO. It's a 240 million from a cold email. Then the next one was a talk test. They're worth 10 billion. That was a cold email, okay? The fourth one was Greenhouse for 800 million. I knew them. The fifth deal I did was SalesLoft. It exited for $2.3 billion from a cold email, okay? I just did one last week. The TechCrunch wrote up.
that I invested from a cold email in this company called Mangoman, okay? And then I wrote a whole thing on Sastra. I asked David Sachs, Keith Ravoy, Aileen Lee, Sacha Patel from Uber. How did they, and they all said, here are the type of cold emails we like to work, but they have to be great. The reason I invest off cold emails is because it's not the one that says, do you want coffee? Or I saw you at Sastra or when are you free? Or I'm in Palo Alto. It's like the email is so good. Like I want to invest before I get below the fold.
And if you want to see some DC examples, I wrote an old post, two cold emails I funded for millions, and the CEOs of TalkDesk and Mapistry let me publish their emails. When I show these to founders and they read them, they're like, yeah, I would fund that one. I don't know much about a bad statement. Yeah, so make your product email as good as those two. Okay, so that rambly answer. And then I'll give you one last little anecdote, and hopefully that's enough for the two. So I'll tell you, I got this as a founder, right? And then I remember we were acquired by Adobe.
And I was a VP or an SVP, but my boss was like an EVP, okay? And he had 11 VPs reporting to him. He had two secretaries surrounding him in his corner office, and he had a lot of resources. And I remember sitting next to him in our e-staff meeting, and I'm like, Jesus, how do you, I'm just curious, because I've never worked in a Fortune 500 tech company with it. How do you handle all the emails you get? And I'm watching him with his laptop. He didn't get that many. A lot, okay?
But my point is people don't go direct to him or add filters or add his EA. My point is even this, not the CEO of Adobe, but one level down, if you sent him the right email and it was great, he was going to sit there in our staff meeting and open it right there. It's magical. So write that email. Works in 2024, 2014, 2004, 1994. Probably not before email was invented, but thanks for the question. Yeah, thank you.
Hey, Dr. Lemkin. I love it. Basically like a business doctor. Yeah. So context is I work at a company that builds a document editor and reader for enterprise clients. We have a lot of legal and banks right now. We crossed a million ARR at the start of the year. Congratulations. Thank you. Not by my doing, but sales has started to slow down and we built that business off of channel partnerships as well as full call and email.
So sales cycles lengthened and core dev team is pretty burnt out on servicing these legal customers. Yeah. And remedies have been floated to continue to grow the business by repurposing the product for its mass market. So that would consist of like building PLG approach and like meta ads. Early results aren't very promising and I'm personally pretty bearish on this. I think there's still a lot of stuff we could do in terms of growing our enterprise offering. Do you have any thoughts on like- How many customers do you have? We have about like-
25 to 50 enterprise customers. And then we have a smattering of individual small shops. Have you completely exhausted your market at 1 million an hour? Absolutely not, no. If you have 25 to 50, what are the odds you can get 50 to 100? I think very high. That's what you should do. Okay, so just continue in that track. I think, listen, there's a chance this is wrong. I've written this many times over the years, but the biggest mistake folks make on the journey from one to 10 is the shiny penny. Is finding, I want something that's easier.
This is too hard. What if we had a self-serve motion? What if we did this? What if we did that? But maybe growth is slowed and that's an issue. And it may be more team issue or competition because you've got to a million. Unless there are only 50 customers in the entire world, you have 0.001% of the market. You have found a way to get 50. There is no way on planet Earth you cannot get to. So I would atomize it and get it to 5,100 and not chase the shiny penny. Should you run a few experiments? Yes.
Should you let the team do maybe one passion project that's not too distracting? Yes. But you got to not, we've all, anyone here that has been there in the early days, some, especially the non-believers are going to want to chase a shiny penny. I've lived it. And you just got to say, guys, this is what I would do. Our goal, I know it sounds simplistic. Our goal is 2 million. And literally when I went through this last year, I went through this. At the end of the day.
This is now three generations ago in SaaS. We went from zero to 12 in five years. I thought it was slow. Okay. I thought it was slow. My colleagues were Renee from Bill, my like investing group, Aaron from Box, David Sachs from Yammer, Peter Gassner from Viva. They all grew even faster, but I thought it was terrible. Zero to 10, 12 million in five years growing 100% with 120% NRI. I thought it was terrible. It was a different time. We didn't know it was good. That was pretty good today, right? It's not.
Whiz good, but it's pretty good. But anyhow, it felt slow and it felt slow to my engineering team. I had a huge wall in our office. Our office was split quiet and loud for sales. Had a huge thing on the wall. And I had this stupid curve from one to 10 with the superhero flying. And every week I would move the superhero up the curve. 2.3 million, 2.32 million, 2.5 million.
And every week we would do a team meeting and every quarter we would do a bigger meeting. And I would just, I would literally move this thing up the curve. And people probably thought I was a goofball and lame, but they saw that the superhero was not flying as fast as Superman. This is the slowest flying Superman going up this wall, but they could see it. So maybe you'd just make project 2 million. That's what I would do. Atomized at 2 million. We've got 50 guys. We can't do it. And I'll give you one last story since the end of the day.
Again, we thought it was... One of my co-founders promised my other co-founder we would... And it's my fault. I built the model, okay? It's actually not his fault. Promised our CTO we would do 2 million our first year, two generations ago. Now, some folks do 2 million. It's pretty hard in sass, okay? We ended the year at 300,000, okay? Along the way, because of that, my one co-founder fired my CTO. I had to run down the street and unfire him. Then he quit. The guy that fired us, there was a lot of drama because we didn't hit 2 million. But I...
And I got my CTO to come back, but he was never the same after he got fired. It was too much drama from the other co-founder. But I sat him down. And then I sat him down about six months later as we were coming up on a million. And he didn't think we were growing fast enough. And I know this isn't exactly what you're saying, but maybe it's helpful. I think in a million, I think we accelerated. So I think in a million, maybe we were growing 60 or 70% a year, which is actually not that great from a compounding rate, right? And I said, Dan, you're the best engineer I've ever worked with. I get that you're not happy with 70, but...
What let's, I just, I know this sounds so basic. I did a spreadsheet. If we just grow 60% a year and then it declines. So next year it's 50 and 40 at a million. And then 2 million, we grow 50. Like that kind of, that's not that good. Like we'll never frigging get there. I'm like, but what if we just went from 60 to a hundred? Okay. It's not that. Now let's look what the work would take. And then we would go one to two to four to eight to 16. And I almost got through to him with it. And now I look back and that was the magic.
Growing that little bit faster, we eventually figured it out. But if we'd just been a better team, if I convinced him that day, he was so good. He was so good. We built the first Salesforce integration like this had ever been done. The whole Salesforce engineering team and Dreamforce in 2006 came over to ask him how he did it. He built, he would just, he was one of these guys who's, he's one of the chief scientists at Adobe today. He's so brilliant, like cranky as F, but arguing.
I hate arguing. I'm a conflict averse. Argue and argue. But if I could eventually convince him, he would disappear for a week and do something that would take five people a year to do. This is a five or a ten. But I couldn't get him to see this compounding thing. It was one of my many failings. So get the team to see that you can get to two. And then, you know what? That's all we're going to talk about today. But if we can get to two, we can get to four. And then eight and 16. And then, you know what? Maybe this is actually... He never thought it was worth... And in fact...
I failed so much that one of the reasons we sold at $12 million was I don't think he ever really believed it would get big, even though our team got it to $200 million. So get him to believe. So a lot of answers to that one. Thank you.
Is the SDR dead with the advent of AI? I think we just said it isn't dead. I think we just said the lame-o SDR is dying. Totally, yeah. So a lot of conversation around that topic. How do we use AI, et cetera. But another really important go-to-market motion that I haven't heard a lot about in this conference is the channel. Consultants, influencers. Indeed. In fact, I wanted to spend 10 minutes with both Rene from Bill and...
from Klaviyo, from Andrew from Klaviyo. And I should have done it first because I ran out of time. The last slide for both was talking about the channel. Klaviyo gets 40% of its 1 billion in revenue through agencies and partners. I don't know if Bill discloses it, but I do think the majority of their revenue is influenced or comes from accountants and others. And we touched on it. It's a super important topic and we should have done a lot more of it because way too many founders learned the direct motion.
And then they just get their ass kicked when their competitors figure out the channel and partner strategy, right? HubSpot, over 40% of the revenue comes from partners, agencies that deploy HubSpot. So if you think you're going to compete with HubSpot and you're going to all go direct, you're going to lose the fact that these agencies just deploy HubSpot. Shopify, I don't know what it is, 40, 45% of the revenue from agencies, okay? Service now, the majority of the revenue, right? And Klaviyo, I wanted to ask Andrew, but I think it's in the 40s. And Bill, they may not.
I think at least partially, it's probably 90%, right? Our accounting firm, I love Bill, but our accounting firm put it in. No one asked me and they required us as a client to use Bill. And what people miss is in the enterprise, the Accentures and others will really only partner with one or two and they'll strongly recommend it to their clients. So if you're not the strongly recommended one, you better be badass, right? Because you're not going to get recommended by the big five.
And people slowly learn that. They're like, ah, my competitor is tight with Accenture. And they meet someone in the innovation team and they slowly build a relationship. That's hard enough to figure out. What they don't realize with SMBs is that like agencies and dev shops, they just pick one. They don't have time to learn four email marketing partners. They don't care if something's better than Shopify. I don't care. Shopify is number one. I'm a tiny team. I'm a tiny agency in downtown San Mateo. I have five employees.
We have e-commerce clients. We're going to learn one platform. We're going to spend years becoming Shopify experts. We don't really care if your product's better. And I know I'll let you finish your question. If you watch, I did a video with Brian Halligan, who's chairman and was CEO of HubSpot a week before a snowmobile accident in 2021. Crazy story. But it was right during lockdown. He's in Vermont working remotely in his Lumberdack shirt, living the dream we all were during lockdown. And watch this video of him. They were just crossing a million. It was so good. He was so direct. Everyone was briefly at peace after.
The drama subsided, but then the markets went up. It was a moment when life was easy. And I asked him, Brian, how much of a moat is it that 45% of your revenue comes from agencies and partners? He literally laughs almost like milk out of the nose. Laugh is as big a moat as you can imagine. So I know I'll let you finish your question, but we should have talked more about it. And I meant...
For my two, and particularly for my sessions, there was 0.9 in both of them and I screwed up and didn't get to 0.9. To everybody, the one bit of advice I would have is if you're selling direct, if nothing else, use public companies, use SaaS for five interesting learnings, learn what folks in your industry and segment are doing through partners and channel and start doing it as much as you can now. Copy it, learn from it, skate around it, dance around it because in many of your industries,
You'll start off direct and you'll start off from early adopters and folks that find you in tech and they find you in Google. And that's great, but it's often less than half of your world. And if you get boxed out because your competitor owns a channel or partner, sometimes it's almost game over like HubSpot. It's almost game over. Here's the one thing I have learned. Klaviyo kind of pioneered aping Shopify with this agency model. Shopify took off with these agencies.
It boxed out BigCommerce and Magento and all these others. All this, it just catered to these small shops, okay? Maybe we'll get Toby here to explain how it happened, okay? Klaviyo copied it. They copied it. And then I invested in a company called Gorgias, which is like Klaviyo for Contact Center. It's coming up 100 million. They copied Klaviyo, okay? They literally hired a guy that had done this in the Shopify ecosystem. And importantly, they didn't just hire a guy. They hired someone that was badass. And here's my one learning from this one case study. It's an entirely different department.
Okay. So they had it gorgeous and gorgeous is coming up on a hundred million and 20,000 SMB customers. And just like for the same reason, just like Shopify and HubSpot, 45% of these almost 20,000 SMBs come from agencies and partners. And they only do gorgeous for their help desk. They only, Zendesk is a great competitor. There's others, but these shots don't do Zendesk or the other kids. They've already spent three years learning gorgeous and they don't do others. And you need this guy that was the head of it was half marketer, half indirect sales.
He would do 200 events a month. 200 anywhere and travel to them. Anywhere these agencies were. No one else. We're all lazy. We're all sitting in front of our computers. And this guy, Phil, went constantly. He built a small team. Anywhere you could bring donuts. Anytime there was a tiny meetup, a tiny agency meetup in Boulder or Pensacola, Florida, because these are small businesses. He had a team and they did it again and again and again and again. And it kept growing and working.
And then once, if you get a little bit of a mini brand going, right? And then Shopify would start to recommend them. Then you would see triangulation. They're everywhere that are all our events. And now Shopify is telling us to use it. What are you going to start to standardize on? Especially when Zendesk never showed up. Zendesk was a horizontal platform. Zendesk is much bigger. They're acquired for 10 billion. But Zendesk only recently took Shopify seriously. They had a weak integration, great company, weak integration. But they were selling direct and to big merchants.
And Gorgeous is running around with a team doing 200 events a month. The big guys aren't doing it, right? So that's one way. But they didn't figure it out. Actually, I just heard the story the other day. I didn't know it. He was pushed by another vendor that's at $150 million that told him to do it, who copied Klaviyo, who learned from Shopify. So emulate the playbook and dedicate enough resources. Whether you can do it the way that ecosystem did or not, the meta lesson is you don't dedicate the resources to business development or partnerships or channels. It will fail.
A related point, you didn't ask it, but thanks for tuning up. You got to have a team to do partnerships and channels. You got to see if your competitors are doing a knockout boxed out. A related issue you didn't ask about, but this is a top 10 founder mistake related to it is partnerships and business development. And the biggest mistake, and I made it too, the biggest mistake many of you will make, especially if you're passionate and have some chutzpah and get out there, is it's related to this. You will build those relationships. You will meet Andrew from Klaviyo or Renee from Bill.
And you will get to know them and you will build this relationship and you will open the door and you'll build the integration and you'll get something going and then you'll move on to the next thing. And it starts off great and it's great, but then your other competitor comes in and puts four resources on it and brings cookies to the office and gets to know everyone in the enablement organization and gets to know everyone in the customer success organization. And even though Andrew likes you and Renee knew you, you get boxed out.
You get boxed out. So the number one mistake I see with founders don't do this partner channel thing. They wait too long. They screw it up. But they're okay at initiating these business developed partnerships, but they don't have anyone working 120 hours a week on it. Three people, 120 hours a week. And the folks that do just fox you out. It's so dumb, but they bring cookies. Okay. They bring cookies. They have cookie teams. They have cookie teams going up there, right? Cookie teams to Shopify.
to Salesforce, to Zendesk, folks, and talk to someone that's run this playbook before. And it sounds silly, but they have gift teams and it's dumb. But if you show up at the office, just like folks try to do with doctors and samples, if you're showing up to the office with free samples, I've never done medical. I think the doctor is more likely to use your product than if you don't. And it turns out it's true in partners and channel two, right? So you can't get in the door of Salesforce or Shopify if you don't have that relationship.
But you better freaking staff it up or you're wasting all your founder energy if you don't have full time backing up those big day relationships. So thank you. Can I ask your last question, Jason? Yes. Yes. I run a cold email SaaS. So we're at about 600K. I'm a one person shop now. My CEO quit last year. Sam Altman said you could go to a billion. Why would you hire anybody if you got to 600K yourself? Yeah, but my question is what to do first? VP product, VP marketing or VP sales?
VP marketing. Okay. Okay. But I'm going to tell you exactly why it's a good question. I think it's helpful to other people. I'm pretty certain of my answer. Having said all of that, I might have said this earlier in this event. Maybe I didn't say this earlier in that, but I've said it many times. It's probably one of the 10 best things I've ever said on Sastra because it takes you years to figure it out. Yes. The right sequence is VP marketing, VP sales, VP of product. I'll tell you why. I've got some great Sastra posts on it. We made a cool chart that people have...
stolen and reused without attribution hundreds of times. AI just makes that so much easier. That's the reason I'll tell you why. But the real answer, if you have something like you have, hire any great VP you can ever find. But great, not good, not because you're tired, not because you need to do sales or you need to do marketing, you need to do product, we'll get there. But if literally you're here and you meet this and you're too early for a VP of sales or you don't really need a VP of product today and you meet someone and you just know,
This person is a hundred times better than ever you met. Find the money, take it out of your own pocket as a founder, find them. So there is a sequence and there's a perfect sequence if you're capital constrained for your VPs. And I will say that second, but ignore all of it. If you find a 10 or if you have a logarithmic scale, a five, if you find a five, I don't care if you have no money. If you ever find a 10X engineer, a five, hire her, hire her because she will build that feature, that integration.
that thing that Google wants or Oracle wants. And she will pay for herself in about eight weeks of 10X. If you've never worked with the 10X engineer, you don't know what I'm talking about. If you have, you know that they're all accretive. They're all accretive for the ICs and the best VPs are accretive. So if you truly find them and in your heart of soul, you want to get married, that they are the one for you, the one. Hire them too early in the wrong order. Okay, so that, and trust me, having said all that in a perfect world, if we had unlimited candidates,
No problem sourcing them. We had a surplus of A players. Everything was easy. Probably don't want to hire a VP of sales until you have two reps hitting quota. We've written about this because 99% of VPs of sales get you from rep three to 300. They take a process that is starting to repeat, that has order, and the output of that order is two reps hitting quota. When you have two reps hitting quota, even if it's chaotic, even if it's founder-led, you actually have the beginning of a process. A smart VP of sales will figure out what those two do.
And then bring in a third or fourth in the first 30 days and you're off to the races. Hire a VP of sales before you have two reps hitting quota. Hyper risky. And so typically that doesn't happen between one and two million in revenue. You typically don't have two reps. So you're better off finding two reps yourself, getting two to hit quota. And in a perfect world, the next day you'd hire the VP of sales if you could sequence it. The day after your second rep hits quota, okay? Now, so that's usually going to be one to two million is the physics of getting there.
Think about marketing or demand gen or growth, whatever we want to call it. Someone that's senior, not someone that just does infographics or does tweets, but someone that can do a commit to get you revenue. I wrote this, one of the earliest Sasser posts I wrote, it's still one of the best. I hired my VP of marketing at 20K MRR. It wasn't a week too early. Okay, one of the best, old one, I'll rewrite it, go read it.
And I laid out the math and hired my VP of marketing then just because I happened to find her. But then what I quickly realized is she got us, like we went from 20, so she joined at 20K. So probably in a year we were at a million, okay, or something like that. So 20K MRR, so 300K to a million plus 700K. One way or another, she probably got us 200K of that plus the pipeline that she built. So she was free, wasn't she? And she helped me train the sales team and she did the collateral and she fixed the marketing site.
but she was accretive. So if you think about that math for a minute, depending on your growth rate, someone that will own growth, not just, again, own an infographic or do one podcast a month for you, but will own a number, they're typically accretive at 20K MRR and you're past that, right? So marketing 20K MRR, if they're great, sales at one to 2 million, head of sales, and then product can vary, but I will, I'll go on a tangent almost like it's a different question because I will tell you, I see,
More and more these days, the VP of product hires screwed up. I see it's screwed up. And for fun, let's talk about it. A couple of reasons I see the VP of product screwed up. One is old and one is newer. The old reason is most people don't know what a great VP of product is. Most founders have never worked with one. It's an old thing that I've dusted off a bunch of times today. You got to meet a great one. You got to know a great one. And most founders...
If they're in a big company, they worked with a junior product marketing manager, product person that was super junior, but they never worked with a game-changing VP of product that can spend 50 hours a week with the customers, with your workflow, with your integration product, with your API, fixing things with your customers, figuring out configurations of your products, figuring out onboarding, figuring out how to make those big customers happy, figuring out how to save them.
That is epic because our products typically, even after four or five million in revenue, for most of us, they get complicated. We start off with one or two workflows, and then we add some integrations, and then we add some other features. And pretty soon, if you start doing the math, I've got 10 integrations, 50 workflows, three different additions. And I start multiplying. You've got 2,000 different configurations of your product. You need a VP of product to optimize that around all your other customers and get that complexity to the next level.
I find folks try too many founders shoot from the hip and think, hey, I'll be the head of product vision. I just got back from my customer. I can do product five hours a week because I'm thinking about it 24 hours a day. And you know what happens? They miss all that complexity. They miss it all. So they wait too long. I see this again and again. And don't do it. Don't do it. But it's got to be someone that is hyper customer centric.
and knows product for real, ideally actually has managed an engineering team at some point in their life. They're just magical when you find the combination. So thanks for the question. Okay. All right, let's take a break. Thank you for the questions. Yeah, thank you. Hey, everybody. Thanks to the 10,000 of you who came out to Sastra Annual this year. We had a blast and big news. We'll be back in May of 2025 or in May of next year. That's right, Sastra Annual will be a bit earlier next year.
The 13th to 15th of May, 2025. We'll still be back at the same venue in the SF Bay area in our 40-acre San Mateo County Events Center campus. And tickets are never cheaper than right now. So grab your tickets at sasterannual.com with my code Jason50 for an extra discount on our very, very best pricing. That's Jason50 at sasterannual.com. See you next May at Saster 2025.