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David Sacks and Ethan Ruby on launching SaaSGrid | E1803

This Week in Startups

Wed Sep 06 2023



SaaSGrid and its Solution for Founders:

  • SaaSGrid is a new type of dashboarding and business intelligence tool specifically built for SaaS companies.
  • It eliminates the need for manual data collection and calculation by connecting to existing data sources like Salesforce, HubSpot, and QuickBooks.
  • SaaSGrid provides accurate metrics and formulas tailored to the needs of SaaS companies, ensuring data accuracy and saving time.
  • The tool allows founders to track important metrics such as ARR, net new ARR, ACV, customer concentration, churn, retention, burn multiple, and more.
  • By having access to real-time metrics and insights, founders can make informed decisions about their business.

The Impact of AI on SaaS Companies:

  • AI has the potential to revolutionize various aspects of SaaS companies.
  • In terms of coding, AI-powered tools like coding copilots are already making an impact by assisting developers in writing code more efficiently.
  • Conversational intelligence powered by AI can analyze sales calls and provide valuable insights to sales teams. This includes identifying objections from prospects, successful rebuttals from top sales reps, and overall performance analysis.
  • While the full impact of AI on cost reduction is not yet realized in the SaaS industry, it is expected that AI will eventually lead to more efficient processes and lower costs in areas such as product development.

Headwinds Against SaaS Companies:

  • The software recession has created headwinds for SaaS companies. Sales cycles are longer, buyers are more cautious with spending, and competition among software providers has increased.
  • Contraction (customers spending less) has become a significant challenge for many SaaS companies. This highlights the importance of maintaining strong customer relationships and continuously delivering value.
  • The trend towards multi-function products poses challenges for specialized SaaS solutions. Companies like Notion and Coda offer features that overlap with other software categories, potentially reducing demand for standalone solutions.

Three Key Factors for SaaS Success:

  1. Distribution Advantage: Successful SaaS companies have a distribution strategy that works exceptionally well, giving them an edge in reaching their target customers.
  2. Cost Consciousness: Companies need to be strategic about spending and focus on areas that generate the most value. They should identify effective distribution channels and allocate resources accordingly.
  3. Product Velocity: Great SaaS companies prioritize product development and innovation. They continuously improve their offerings, adapt to market needs, and build products that customers want.

The Future of Funding and Equity Ownership:

  • The trend of raising smaller rounds and being more conscious of equity ownership is emerging among founders.
  • Valuations are lower, making it necessary for founders to be more cost-conscious and avoid excessive dilution.
  • Some founders may choose to raise less money overall while maintaining higher equity stakes in their companies.
  • AI's potential impact on reducing costs could lead to startups requiring less funding to achieve significant milestones.

Benchmarking Data and Industry Standards:

  • SASGrid aims to provide benchmarking data across all its customers, allowing founders to compare their performance against industry averages.
  • This data will help founders understand where they stand relative to other companies and identify areas for improvement.
  • By setting industry standards and providing comprehensive metrics, SASGrid aims to simplify the process of measuring success in the SaaS industry.

SAS Grid Pricing:

  • Free if you're up to a million, use the code "bestie" and you get the first million dollars free.

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