Transcription
Foreign ER at subscribe, which is a unified code-to-revenue system for modern SaaS.
And with me on stage, my friend Leslie. Hi everyone, good morning. My name is Leslie. I head up our accounting/revenue operations teams over at OCTA. So we—I know we have 10 minutes, and we want to make sure that, okay, we are using every second of the time that we have from you. So we'll jump right to that. We are here to talk about all the different secrets that we have seen during my experience and, of course, Leslie at OCTA, where she saw the growth—maybe 20 times—in her experience at OCTA. And what are the different secrets to align the two most critical departments in a company: the go-to-market and the finance side? So we'll jump to the agenda. So we'll talk about, quickly, how exactly SaaS has evolved in the next decade or so. We'll talk about how—what are the common strategies the SaaS businesses use to grow their revenue 10x, or 15x, or 20x? We'll talk about the secrets to align—the main topic that we are here to talk about—between the go-to-market and the finance. And, of course, we will make sure that, okay, we wrap up with the takeaways that you all can take it back to your work tomorrow or to your businesses and use that operation.
If you talk about the growth, or how exactly SaaS has evolved in the last decade or so, we say that, okay, it started from 1.0, which was probably the era of the early 2000s, where it was mainly a recording—building the annual or monthly—you're just charging your customer on a recurring frequency. Then the 2.0 games, which is like—I would say 2010 to 2015—and at that time, it became a little bit more complex. You have different bundles, different product lines, different pricing methods for your B2B businesses. But what we see that now, with the 3.0, it has become a lot more complex, a lot more adaptive, a lot more agile. Every company has various products with different pricing methods. You may be looking at the consumption base; you may be looking at the different bundling; you're looking for an adaptive system, which is more like creating dynamic deals for your individual customer. So we think that, okay, we are now in an era of SaaS 3.0.
If we talk about how exactly, in this SaaS 3.0, the different SaaS businesses are growing their revenue 10x, there are some common strategies across all the businesses which you have seen, or we all have seen, growing on a rapid growth rate. There are the ways the companies—some of the common ones—are growing into a new market. And that could be something like you started with the mid-market or maybe the SMB business, and now you are moving more to the enterprise. You might be in a business which is more on the PLG side, where your products are being sold by themselves; your customers are coming to your website, buying your—trying your product—and then going from there versus going and moving to a more sales-assisted, where you have a very well-established sales team and trying to sell your product to your customer. The second one, I would say that, okay, geographical expansion—moving to one territory to a different territory. The third one, I would say, the new service offering—every company starts with one product, but they definitely go and launch more and more different product lines. And the fourth one—a very important one—is the M&A, which is, of course, for the inorganic growth as well as the technology and the business acquisition. So these are, I would say, very common strategies that the B2B or the SaaS businesses follow to grow their revenue.
So when we talk about the secret—the main thing that we are here—it goes back to the very common or standard things which we talk about across various things: the people, processes, and technology. I know it's very standard; it sounds like something—nothing new here—but I cannot emphasize more that, okay, this is exactly where we have to do the things to make sure that, okay, we are aligned between the teams. So I'll pass it to Leslie now to talk through some of the secrets between the people, process, and technology for the go-to-market and the finance team technology.
So we've reached the secrets part of this presentation. I hope you guys are ready, because what I'm about to say may or may not blow your mind. But ultimately, everything is anchored on common sense and the word balance. We could make a drinking game out of the times I'm going to say the word balance over the next four slides. But everything is about a very healthy tension and balance between your finance teams and your go-to-market teams. So number one: roles and responsibilities. Depending on the stage of company, right, often times you sort of let go-to-market lead, and you're really trying to find a system that enables speed and sales—anything that expedites sales velocity, anything that provides that flexibility that your go-to-market teams need to sell—and you sort of have the other end of the spectrum where you sort of have your systems organization saying, "I don't know if we can customize all the stuff," and you have your finance teams kind of freaking out about all the different things that you can do. And so one of the things to be really important about is obviously you want to enable your go-to-market teams, but we also have to be mindful about future-state scale and not getting yourself into a position where you've over-customized a monster system that you're not going to be able to scale into the future. So being really mindful about understanding that, especially earlier on, you want to enable the go-to-market organization, but also having an eye on the long term to make sure your systems team and your back-end office teams have a role in some of that decision-making. So being really mindful about what is driving what, at the end of the day, is critical, right? And it's a similar message shared is when you're trying to do all of that enablement upstream, right? Flexibility is critical, but not at the cost of control. Governance sometimes feels like a bad word; there's this sort of rigidity; there's this connotation to it as if it's a bad thing. But governance isn't always a bad thing; it is a critical component of how you grow and scale, right? Whether that's like the not-sexy stuff about roles, profiles, permissions—of who can touch what within your CRM, whatever that is—that's going to be really important going forward as your company goes bigger and scales. And this end-to-end strategy, right, similar to what we just talked about on that first slide that I touched on, it's about recognizing all of the key stakeholders in a process. When we think about that order form that's executed with that customer—that's awesome; we've secured the deal; we've got that awesome booking—then that order, depending on—let's say if you sign like a multi-year order, which is awesome, you've secured it—now who's going to be living with some of the burden and some of the upkeep, the maintenance of that customer relationship and that order over the life cycle of that contract? It's going to be your customer success team; it's going to be our finance team; and it's also going to be your systems team. So recognizing the end-to-end life cycle of any deal is also going to be critical, and having that healthy partnership between all of these organizations is also going to be absolutely critical as you're going through your organization. This thing's—this is near and dear to my heart—as you're thinking about how to figure teams, whether that's on the go-to-market side or on your finance team—again, since this conversation is really focused on those two organizations—do not be afraid to hire ahead, or quote-unquote "over-hire." I know budgets are tight, especially sort of in the state and the climate that we're in now. But if you identify, as you're thinking through what are some of the first folks that I want to hire into these roles, these are generally going to be pretty foundational elements. And so if you get that experienced director, senior director—you're seeing them, but you're like, "I really can't afford this person," or, "you know what, I really want someone that's going to roll up their sleeves," and sometimes they direct a level may not be the right person to do that. It's about finding that balance. Don't be afraid of hiring for someone who's done it before, so long as they can demonstrate they can also roll up their sleeves. It's not a bad thing to quote-unquote "over-hire," because you're going to need that experience down the road.
So if the one thing which will—all the discussion that we have—if you wrap it up under the top takeaways, I would say with the growth, the complexity comes. Your business will become complex; your systems, your technology—all of those needs will change with the growth of SaaS. Having the flexibility from day one, trying to build the technology stack which is built on the foundation of flexibility, I think is absolutely critical. Align on the success metrics—that's one thing which we have seen a lot of companies or a lot of different businesses having different success metrics between what is there and the sales and the finance. If you are focusing on those two, aligning those two is such an important thing and such a critical thing to make sure that, okay, whatever the 10x growth that we are looking for, we are able to achieve. Over-hire—what Leslie said—I think this is one of the most critical ones. Companies that are smaller stage, they think that, okay, we can run the business on a spreadsheet or Excel sheet, and then you look for somebody who is fine with running business like that. But having somebody who has seen how to run on the Excel sheet but in a very much more mature, automated system, I think that is what should be the company's goal—to over-hire, even if where you are right now, but what you are looking for five years, ten years down the line. So over-hiring is absolutely important. Last but not least, and this is the most critical one: the unified process in the system. This is something that, okay, which every company does the mistake in the early days. We have a problem; we just look at the fix at that part. Thinking about everything from the sales to the finance—every part of the process is from how you sell the product, how your sales is using the coding system, the billing side, and up to the revenue side—I think that's absolutely important. So the one thing which I would like all of you to take away, if not everything else that we spoke, is how to think about the unified system, how to think about a unified process between your coding and the billing and the sales and the finance side. And if you can solve that, I—if we feel that, okay, your journey to the 10x growth is much more simpler versus how the other companies are—what we have seen in our previous experience. [Music]