SaaStr 245: The Ultimate Guide To ACVs; When and How To Increase Them, Revenue Optimisation Per Lead & What It Means To Truly Be An ARR First Company
David Skok is a serial entrepreneur turned VC at Matrix Partners. He founded four companies: Skok Systems, Corporate Software Europe, Watermark Software, and SilverStream Software and did one turnaround with Xionics. Three of the companies he founded went public and one was acquired.
Jason Lemkin is the Founder @ SaaStr, the world's largest SaaS community and leading early-stage SaaS fund with investments in Automile, TalkDesk, Algolia and more.
Jason Vandeboom is the Founder of ActiveCampaign, a sales and marketing automation platform that enables small businesses around the world to meaningfully connect and engage with their customers. Since 2013 with their transition to SaaS have grown to more than $50 million in ARR in less than five years, while maintaining profitability.
Dave Kellogg is a leading technology executive, independent board member, advisor and angel investor. In his most recent role, Dave was the CEO @ Host Analytics where he quintupled ARR, halved customer acquisition costs and increased net retention rates before selling the company to a private equity sponsor.
Fred Shilmover is the CEO and co-founder of InsightSquared, one of Boston's premiere tech startups paving the way in the sales intelligence space. Throughout the InsightSquared journey, Fred has raised over $25m in VC funding from the likes of DFJ, Bessemer, Salesforce and Atlas Venture.
In Today's Episode We Discuss:
Does David Skok believe that ACV should sit at the top of the metrics stack? What are the 4 metrics that fundamentally matter in your business? What can founders do to their pricing model to extract as much value from each customer? How do the very best businesses structure their pricing for value extraction?
If ACV increase is a core focus for our startup, should we hire a sales rep solely selling to enterprise? What are the biggest mistakes founders make in this scenario? What can founders do to optimise revenue per lead? How does on need o approach lead targeting according to the individual skills of their reps?
Is it best to start at enterprise and work down to SMB or does SMB and work up to enterprise work best? How does the product have to change with the scaling to enterprise? How does the messaging need to change with the scaling to enterprise? How do you need this change to be reflected in your pricing?
What does it truly mean to be an ARR first company? What is the right way for founders to calculate their differing ACVs? What is the right way to present that when pitching VCs? Where do many founders go wrong in how they present and discuss ACVs with investors?
Read the full transcript on our blog.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Harry Stebbings Jason Lemkin SaaStr David Skok Jason Vandeboom Dave Kellogg Fred Shilmover
SaaStr 207: 13 Years To 20 People; 3 Years Later 350 People and $50m ARR, Why Thinking There Is A Price Point You Need For A Rep Is BS & Why SMB First Works And You Must Not Design For Enterprise
Jason VandeBoom is the Founder and CEO of ActiveCampaign, a sales and marketing automation platform that enables small businesses around the world to meaningfully connect and engage with their customers. Jason founded the company in 2003 and under Jason's leadership, ActiveCampaign has flourished from a successful but small company and then in 2013, they transition to SaaS, since they have grown to more than $50 million in ARR in less than five years, while still maintaining profitability and its culture. They have also only raised a single $20m PE round to accelerate their growth, making them a market leader in terms of funds raised/ARR generated.
In Today's Episode We Discuss:
How Jason made his way into the world of SaaS and came to found ActiveCampaign?
Why is Jason so bullish that "SMB first, works"? What are the inherent benefits from starting at SMB? How does it affect product feedback? How does it affect how you build and scale your team? How does one start to layer in market and enterprise over time? Why does it give you additional leverage?
What does Jason think is the right way to scale your sales team> Why does one not need funding to scale sales teams? When does Jason believe is the right time to hire your first VP of Sales? What were the biggest mistakes that Jason made in the scaling of his sales team? Why should hire 3 reps to start at one time?
How does Jason view the current fundraising environment? Why does Jason believe that "no one cares if you get funding"? Why does Jason believe there is a fear around needing fast growth? Who is to blame for this? How should founders in the messy middle feel when seeing large fundraises in the media?
Why does Jason believe that all leaders need to be consuming all feedback? How does Jason consume feedback on a daily basis? What metrics and elements does he look for in this assessment? How has Jason's role changed over the 16-year CEOship? Does it get easier over time in Jason's mind? What has been the biggest challenge?
Jason's 60 Second SaaStr:
What does Jason know now that he wishes he had known at the beginning?
No man's land of SaaS pricing, exist or a myth?
Multi-year deals, all they are cracked up to be or overrated?
Read the full transcript on our blog.
If you would like to find out more about the show and the guests presented, you can follow us on Twitter here:
Jason Lemkin
Harry Stebbings
SaaStr
Jason VandeBoom
One Person SaaS Business: Solo Founder to $50M ARR
Jason VandeBoom started ActiveCampaign from a dorm room, sold his car to fund it, and charged $9 a month. As a one person SaaS business for 13 years, Jason built the company to 60,000 customers and $50 million in annual revenue - all without a co-founder. In this episode, he reveals why he ran on-premise software for a decade before switching to SaaS, why he raised $20M but has not spent any of it, and why he reads cancellation reasons every morning.
Jason ran the one person SaaS business on-premise for 10 years with eight employees and a couple million in revenue. Then bootstrapped SaaS growth compounded rapidly after the switch - from 20 employees to 300 in two years. As a solo founder SaaS story, ActiveCampaign proves that a one person company vision can scale to eight figures without venture capital or co-founders.
Jason VandeBoom is the founder and CEO of ActiveCampaign, an email marketing, marketing automation, and sales CRM platform serving 60,000+ customers.
🔑 Key Lessons
🎯 A one person SaaS business compounds slowly but builds unshakeable foundations: ActiveCampaign grew slowly for 10 years on premise, then compounded rapidly after switching to SaaS. Jason went from eight employees to 300 in two years.
📉 Fear of success delays growth just as much as fear of failure: Jason saw the SaaS opportunity years before acting. He kept planning instead of launching. Overthinking builds the wrong thing because users tell you what needs scaling.
💰 Start at $9/month and let bootstrapped SaaS growth prove the model: ActiveCampaign started SaaS plans at $9/month and remained profitable through the transition. Jason raised $20M only after 13 years and has not spent any of it.
🧠 Obsess over customer pain, not competitors: Jason starts and ends every day reading cancellation reasons and NPS scores. Founders watching competitors instead of understanding customer problems will always be a step behind.
🚀 Find the underserved middle market: ActiveCampaign found product-market fit in mid-market marketing automation - beyond basic email but below enterprise pricing. Nobody was serving that gap for a one person SaaS business to exploit.
🤝 Solo founders can build massive businesses without co-founders: Jason built ActiveCampaign for 15 years alone. Clear vision, extreme passion, and hiring people better than yourself compensate for the lack of a partner.
Chapters
Introduction
Jason's background - from developer to fine arts student
Building email marketing solutions as consulting work
Ten years of on-premise software with eight employees
The decision to switch from on-prem to SaaS
Why slow bootstrapped growth deserves more respect
Transitioning to SaaS and consolidating eight products to one
Bootstrapping a one person SaaS business for 13 years
Being a single founder with no co-founder for 15 years
The loneliness and benefits of solo founding
Starting SaaS pricing at $9 per month
Fear of success and overthinking decisions
How much time to spend thinking about competitors
Mistakes in copying other companies' strategies
What drove growth in the last two years
Finding product-market fit in mid-market automation
Lightning round
Wrap-up and contact information
Resources
Full show notes: https://saasclub.io/195
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