The Biggest News in SaaS HOW TO PRICE INTELLIGENTLY DRIFT CEO: SECRETS OF A FIVE-TIME SAAS ENTREPRENEUR SAAS 1000 LIST PLUS 50 COMPANIES TO WATCH IN 2018 TOM GONSER MAY 2018 | ISSUE 1 DOCUSIGN FOUNDER: INCEPTION TO IPO SubscribeSubscribe at atwww.SaaSMag.com www.SaaSMag.com 2 SAAS MAG | MAY 2018 | ISSUE 1 SAAS MAG | MAY 2018 | ISSUE 1 1 V T L CONFERENCE LTV Conf USA WINTER 2018 A gathering of the greatest minds in the world of SaaS For more details visit www.LTVConf.com 2 SAAS MAG | MAY 2018 | ISSUE 1 10 18 TOM GONSER UP AND COMING CRACKING IN SAAS CATEGORIES 24 30 DAVID CANCEL PATRICK UP THE STARTUP CAMPBELL LADDER HOW TO PRICE INTELLIGENTLY 52 60 BRENNAN DUNN SAAS TOP 1000 PERSONALIZE YOUR SAAS MARKETING ON STRATEGY THE COVER SAAS MAG | MAY 2018 | ISSUE 1 3 Contents 06 Best Marketing Channels For SaaS Companies 07 Upcoming SaaS Conferences 08 SaaS By Numbers 22 SaaS Startup Profile: Outgrow 34 The Future is Statistical 40 Best Tools for SaaS Businesses 42 How To Value a SaaS Business 58 SaaS Market News 4 SAAS MAG | MAY 2018 | ISSUE 1 FROM THE EDITORIAL TEAM At FE International we have encoun- nomenon: if the content you are writ- tered no shortage of brilliant SaaS ing is about your product and useful founders, executives and investors. to customers, chances are your prod- The industry has expanded expo- uct-market-fit is good; and if you are nentially over the last decade, and putting valuable content out there, it’s no wonder given the influence of you are both increasing your visibility technology on businesses. in the market and positioning your- self as a thought-leader in the space. Businesses are nearing an integral point at which operating without We are incredibly excited for the SaaS will become impossible, if it future of the SaaS industry, and in- Thomas Smale isn’t already. Over the last five years creasingly so after the dialogues Editor in Chief in particular, the SaaS businesses contained in this magazine. There is we have valued and sold have be- no question that SaaS is integral to come more complex, sophisticated, the success of both the B2B and B2C and most importantly, aware of their markets—now it is a matter of wait- customers’ needs. As the interviews ing to see where the industry is driv- and contributors in this first edition en by its brilliant founders, investors, of SaaS Mag clearly demonstrate, operators and enthusiasts. data is imperative, certainly, but one of the biggest areas of improvement We feel privileged to be in the po- we have seen has been the willing- sition to create SaaS Mag based on ness to tap into customer feedback. the connections gained through our Asking questions, gathering data work with software and subscription around behavior, building MVPs, Emily Chisholm businesses in both exit planning Editor testing, and collecting responses and investing capacities. It was en- demonstrate a founder’s interest in lightening to hear insights and les- and commitment to building a suc- sons learned from some of the most cessful SaaS business. If the prod- preeminent names in SaaS. We are uct is sound, the marketing strategy thrilled to be able to share what we well-thought out and there is the have learned in this first-ever quar- right team in place, a customer-cen- terly SaaS Mag. tric attitude can make the difference between good and great. Invariably, one of the most effective strategies for long-term customer acquisition has been inbound mar- Ismael Wrixen keting, which is really a two-fold phe- Editor SAAS MAG | MAY 2018 | ISSUE 1 5 BEST MARKETING CHANNELS FOR SAAS COMPANIES We asked members of the leading SaaS Face- 38 Content book group, SaaS Growth Hacks, to vote on 15 Forum (Quora) Marketing the best marketing channel for SaaS in 2018. 10 Cold Email Overwhelmingly, founders and innovators in the community highlighted content market- 10 Paid Advertising ing as the most effective marketing channel 5 Partnerships for SaaS businesses. Citing the unparalleled 3 Word of Mouth importance of providing value to customers, 2 Free Tools professionals in the space are increasing- ly prioritizing content creation in the form 1 Twitter of blog articles, podcasts, social media and 1 Conferences everything in between. While this strategy 1 LinkedIn Messaging may take longer to yield results (read: 6-9 months on average), it can significantly de- crease CAC, increase LTV and aid other mar- keting channels in the process. Featured voters: “I think it varies based on the vertical. Email still seems to be a great channel once you have acquired subscribers. LinkedIn, GrowthHackers, Inbound, Quora and Facebook groups work great for marketing/sales-related products.” - Nivas Ravichandran, Product Marketer, FreshWorks “Content is valuable and often timeless. It gives to your prospects and builds a relationship. People don't just buy from a cool website or a funny email. They buy from people who care about them, who they can trust. Keep giving.” - Jeroen Corthout, Co-Founder, SalesFlare 6 SAAS MAG | MAY 2018 | ISSUE 1 UPCOMING SAAS CONFERENCES LONDON, ENGLAND May 21-22, 2018 Who Should Attend: Founders, marketers, entrepre- Event Highlights: neurs, executives. • Laura Roeder, CEO/Founder of MeetEdgar and Business of Software offers a carefully curated event Ropig aimed at helping SaaS founders innovate in the fields of product, culture and strategy. With speakers • Wade Foster, CEO/Founder of Zapier experienced in founding and successfully growing SaaS companies, the talks are designed to provide • Networking Drinks and Canapes, hosted by in-depth and actionable advice for founders, with no FE International sales pitches. The conference is intentionally small with just a few hundred attendees and a strong focus on quality, not quantity. Who Should Attend: Founders of and investors in soft- ware companies, SaaS entrepreneurs. Gather for the best news and advice from experts in the SaaS industry. Upcoming Events: Learn how to build a SaaS business from real software HELSINKI, FINLAND NEW YORK entrepreneurs. Optimize your business for the high- May 23, 2018 June 20, 2018 est MRR and LTV. Gain knowledge from people who have already made the mistakes so you don’t have to. Collate cutting-edge technologies and growth hacks BERLIN, GERMANY DUBLIN, IRELAND to automate processes that cost valuable time and June 7, 2018 October 15-17, 2018 resources. Hear how to create a need for your sub- scription-based product and market it to targeted au- diences. PARIS, FRANCE June 15, 2018 Who Should Attend: SaaS Founders, venture capital- the most insightful and interesting individuals in the ists, executives. industry. The SaaStr annual conference is finally making its way Event Highlights: to Europe! Every year, SaaStr brings together over 10,000 SaaS founders, VCs, and executives for “learn- ing and scaling together.” • Learning and networking events Providing the largest non-vendor confab on the • Food, drink and evening activities global SaaS event calendar, SaaStr provides a great opportunity to learn from and network with some of SAAS MAG | MAY 2018 | ISSUE 1 7 SAAS BY NUMBERS Diving into 50 of the largest SaaS companies in the world, we gathered insights around the median time to IPO, the length of time founders remain in executive positions and top locations for starting a SaaS business. How many boxes does your SaaS business tick? DISTRIBUTION BY REGION A majority (c.58%) of the top 50 SaaS companies are East Coast, US Midwest, US located on the West Coast of the United States. Europe Canada West Coast, US Southern, US Pacific Asia NUMBER OF YEARS FOUNDERS STAYED ON AS EXECUTIVES 50 2 1 3 1 45 1 1 2 40 4 1 35 2 3 30 6 25 3 Most founders (74%) stay on as 7 20 executives for 10 years or more Number of Founders before exiting the business. 15 3 2 10 2 3 5 1 1 1 0 2 3 4 5 6 8 9 10 11 12 13 14 15 16 17 18 19 20 21 23 18 Years as Executives 8 SAAS MAG | MAY 2018 | ISSUE 1 YEARS TO IPO SPS Commerce Alteryx Paylocity Rapid7 Blackline RingCentral Qualys Ellie Mae Benefitfocus Atlassian Corporation RealPage Mimecast Cornerstone OnDemand Yext Shopify Okta MuleSoft Tableau Software Proofpoint Medidata Solutions Coupa Software Box Athenahealth The median length of time it Q2 Holdings HubSpot took top SaaS companies to Cloudera IPO was 9 years. Apptio Appfolio Twilio The Ultimate Software Group ServiceNow Zendesk Workday Wix Marin Software Instructure Workiva Veeva New Relic MobileIron LogMeIn Castlight Health 2U Salesforce LivePerson Everbridge Hortonworks Five9 Talend Mindbody Xero 0 5 10 15 20 25 30 Years SAAS MAG | MAY 2018 | ISSUE 1 9 How Tom Gonser created a document-signing platform and built it into a $4.4 billion SaaS giant 10 SAAS MAG | MAY 2018 | ISSUE 1 CRACKING CATEGORIES By Ismael Wrixen DocuSign began trading on the Tom Gonser, the man responsible Nasdaq at $38 per share on April 27, for the idea behind DocuSign, needs 2018 after being priced at $29 per little introduction. Despite his suc- share the evening before its public cess, Gonser maintains the profile of debut. By the end of the trading the resourceful founder—hands-on, day, DocuSign shares had hit an in- engaging and ready to take on any- traday high of $40.69 and secured thing himself. a market cap of $4.4 billion—over one-third higher than the $3 bil- DocuSign began as a document lion valuation received following signing platform, and under Gons- the company's last private round in er’s supervision evolved into a cloud- 2015.