Creating the billion$ SaaS category:Zero to IPO secrets from a serial entrepreneur
Mark Organ, Influitive, CEO
@markorgan
@influitive
2
Cloud-basedMarketing Automation
Advocate Marketing
Nasdaq IPO$871M
BILLION$ (TBD)
3
4
5
6
List, AttentionSpoilage
DeliverabilityAvailability of
Deep Knowledge
7
Ideal Reality
8
9
2006 2010 2014F0%
25%
50%
75%
Dependence on knowledgeable peers in the buying process(B2B software buyers)
3.5X increase
10
11
What does it mean to create a category?
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13
0 0.2 0.4 0.6 0.8 1 1.2 1.4 1.6
-20%
0%
20%
40%
60%
80%
100%
Revenue growth (2004-2005)
Salesforce.com
Oracle(incl. PeopleSoft)
SAP
Siebel
Amdocs
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’srevenue is divided by the 2nd place company’s revenue. Source: Gartner (http://www.gartner.com/newsroom/id/493005)
Salesforce.com’s status as a category creator enabled rapid growth several years ago
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0.00 0.20 0.40 0.60 0.80 1.00 1.200%
10%
20%
30%
40%
50%
60%
70%
Salesforce.com
Oracle
SAP
Microsoft
IBM
SugarCRM
Note: Relative Market Share is each company’s revenue divided by the market leader; the market leader’srevenue is divided by the 2nd place company’s revenue. Source: Gartner (http://www.gartner.com/newsroom/id/2459015)
This led to a dominant market position today
Revenue growth (2011-2012)
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Tesla currently is small vs luxury vehicles
Tesla Lexus Audi Cadillac Mercedes-Benz BMW0
50,000
100,000
150,000
200,000
250,000
300,000
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
US unit sales, 2012
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Tesla has shown dominance of US vehicle sales in its specific price range
Tesla Model S Audi A8 BMW 7-Series Mercedes-Benz S Class0
1,000
2,000
3,000
4,000
5,000
US unit sales, Q1 2013
Source: Business Insider (http://www.businessinsider.com/tesla-is-not-really-outselling-bmw-audi-2013-5)
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Tesla’s category creator status and rapid growth drive valuation multiples far higher than other carmakers
Tesla DaimlerBenz BMW VW Ford GM$0K
$100K
$200K
$300K
$400K
$500K
$600K
$700K
$800K
$714K
$60K $39K $13K $12K $6K
Market capitalization per vehicle sold
Source: Yahoo! Finance, Corporate filings, Analyst reports
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Transformational experience
Revolutionary business model
+
Driven By Disruptive Forces
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Missionary
MercenaryVS
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Overall (20) Category Creators (10) Non-Category Creators (10)
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$3.40
$5.60
$1.20
Incremental market capitalization per $1.00 of revenue growth
CNN/Fortune top 20 fastest growing companies (2010)
Category creator premium
Category creators enjoy a valuation premium
Source: Cambridge Partners in HBR Blog, 09/2011
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= ≠
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= ≠Hypothesis-driven, iterative approach
Vertical niche market dominance
Focus innovation on the emergent hero
Drive the company on mission, vision and values
Invest early in customer success
Iterated MVP is insufficient: emphasize design & quality
Expand your productization and monetization models
Build for the billion.
Drive leads to achieve profitable, efficient growth
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= ≠
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Use a hypothesis-driven, iterative approach to quickly find
product-market fit
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Pick that niche you want to serve,
document why, and test it.
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It’s OK if your hypothesis is
wrong.
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Pivot quickly!
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Eloqua started with the wrong
product in the wrong market
1.0 2.0
Marke
t
F.I.R.E.(Financial, Insur-
ance, Real Estate)B2B Tech
Product
ChatMarketing
automation
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Vertical niche market dominance
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The narrower the better.
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Your first job as an
entrepreneur is not to die
I PROMISE I WILL NEVER DIE
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Focus innovation on the
emergent, under-served hero
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Drive the company on
mission, vision and values …from day one!
34
Drive leads to achieve profitable, efficient growth
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Treat lead gen as a
strategic imperative
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CEO must help choose
customers strategically
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Ensure the lead flow is increasing in
quality & quantity
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Use a marketing mix of
seeds, nets and spears
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Invest early in customer success
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Build happy customers:
they scale really well
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If you have $1 to spend on
marketing, consider spending
$0.75 on customer success
Need new pic
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= ≠
43
Iterated MVP is insufficient:
emphasize experience,
design & quality
44
Expand your productization
and monetization models
45
Build for the billion.
46
More long-term focus: design a
business with multi-billion potential
47
Raise money earlier, but use
disruptive tools like AngelList for a
higher shareholder count
48
Build a more ambitious
product footprint
49
Hire a stronger executive team
early, but with room to grow.
50
Hire a stronger executive team
early, but with room to grow.
Creating the billion$ SaaS category:Zero to IPO secrets from a serial entrepreneur
Mark Organ, Influitive, CEO
@markorgan
@influitive
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