should you hire your friends?
SaaS angels are challenged with knowing when it’s the right time to call it quits on an investment, and more of them are throwing in the towel because they value cash in today’s unstable environment. This typically presents good opportunities for new investors to come in at favorable valuations, but leaves founders with an unsightly track record of departed investors. But that’s not always the case – Workhuman, a workplace social recognition platform, showed rare transparency in their recent recapitalization, announcing a higher valuation of 1.2b. Another win for a SaaS company able to ride the COVID tailwinds!
📚 We are all keenly aware of the importance of creating a story around your brand. People like hearing stories, and that narrative is what may get your company noticed. But we agree with Intercom (who are storytelling masters) that an element of a company’s story that’s often overlooked is its brand’s personality. Your story is what your audience will read, but your brand personality is what actually engages them and keeps them coming back for more. As Intercom puts it “after the plot twists and narrative turns have faded from memory, it’s the personality that lingers”.
⚔️ Enterprise accounts are a double-edged sword. On one hand they’re typically prime accounts for revenue expansion, but on the other they can be painfully resource intensive for your success team. To figure out if it makes sense to chase these high dollar customers, you need to be honest with yourself about your product’s capabilities. Take a big picture view of your platform and see where there might be gaps for more demanding clients. Then you can decide whether it makes sense to bridge those gaps, or if doing that would take you down a path that you don’t really want to pursue. If you find yourself building out features that drastically change your model (as opposed to just enhancing it), you might be in over your head.
🏆 A common trend with founders is to make early leadership hires by pulling from their personal networks. But there are some shortcomings to that strategy. Liking who you work with is important, but being able to face challenges head-on and work through disagreements can be trickier when it’s with someone you have a history with. There’s a reason people hire from their networks – it’s convenient. So how can you create a strong leadership team on the fly without hiring your friends? The same way you decide what features to build into your product, experimentation. You can pretty easily create a test environment by running a trial period with the candidate for 2-4 weeks before hiring. That should give you enough time to gauge the fit, and is equally beneficial for the candidate as they are testing you as well!
🐾 The danger of vanity metrics, metrics which look great on paper but don’t actually represent the state of your business, is clear. They can lead you to believe you are sprinting towards success when in reality your business could be struggling. The easiest way to distinguish between useful data and numbers that are really vanity metrics is by asking two key questions: can I tie this back to real performance and what can I do with this information. Remember that numbers can be easily manipulated to fit within a specific narrative, so providing your data with meaningful perspective is what makes it valuable.
📬 We caught a recent episode of Startups for the Rest of Us, where host Rob Walling sat down with Damian Thompson of LeadFuze to discuss all things sales. It’s a good one to tune into if you’re looking for advice on building a sales team, defining roles, and creating a powerful stack. One interesting bit was Damian’s reason as to why most cold emails go unanswered – a lot of sales reps don’t understand their audience. Too often, their cold emails are about scheduling a demo or highlighting product features. The most effective campaigns come from teams who have done their research and learn their leads' most significant pain points. Then and only then can you really and provide them with tangible assets of how your product solves those issues.