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The Cadence:
How to Build Your SaaS Army
David Sacks
Co-founder, General Partner
Craft Ventures
@davidsacks May 27, 2020
The Cadence:
How to Build Your SaaS Army
Let’s Face It
Startups are a Shitshow
50 → 500 employees
Wouldn’t It Be Nice to Turn
Them into an Army?
From To
Startup chaos. The team works in lockstep.
Disconnected functional priorities. Everyone in the company knows
what to focus on.
Erratic release schedule and
unpredictable sales performance.
Quarter after quarter, the company
ships and sells.
● First, as COO of PayPal.
● Then as Founder/CEO of Yammer, we adapted it for SaaS --
creating the fastest unicorn SaaS exit.
● Also learned key elements from our main competitor Salesforce.
How I Learned the Cadence
● There are two key systems in a startup:
1. The Sales / Finance System
2. The Product / Marketing System
● Both run best on a quarterly cycle.
● When snapped together, with an offset, they create a single
operating cadence for the company.
What Is the Cadence?
Sales
📈 Finance
💰 Product
🛠
Marketing
🚀+
The First System
Sales / Finance
Month 1
Sales Kickoff (SKO)
Month 2
Pipeline Inspections
Month 3
Closing
Set new plans, territories,
objectives, spiffs.
Retrain sales team on product
and best practices.
Mid-quarter adjustments to hit
quota.
Sales can use marketing news
to warm up/ nurture prospects.
Heads-down on closing to hit
quota.
Sales is best run on a quarterly plan:
● Annual quotas are too slow to judge performance, monthly plans are too
volatile.
● Adjusting quotas and territories more than once/quarter will undermine morale.
📈 Sales Calendar
💰 Finance Calendar
Sales and Finance calendars are one system:
● Sales drives the financial results of the company.
● Finance team is arbiter of quota credit and revenue recognition.
Year end December 31 or January 31?
● A January year-end is better for sales-driven startups.
Board meetings:
● Schedule 2-3 weeks after close of the quarter when results are fresh.
● Teams gets strategic insights when they can still impact the quarter.
The Second System
Product / Marketing
Product Management works better on a quarterly calendar:
● Engineering should ship code weekly (or daily). But this is about
product management.
● Rocks = major releases; Pebbles = features; Sand = fixes.
● Avoid shipping a lot of sand.
● Salesforce exemplar.
Avoid “over scope.”
● Yammer rule: 2-10 engineers, 2-10 weeks
● Nothing kills dev like a v2.
🛠 Product Calendar
🚀 Marketing Calendar
Marketing and Product calendars are one system:
● Marketing activity feeds off of new products.
● Product releases are the centerpiece of marketing events.
● For marketing purposes, 4 big releases > 52 small ones.
Use events as the forcing function:
● Combine news with events and live demos to create lightning
strikes.
● Setting date forces team to scope correctly, hit deadlines.
● Better external communication forces better internal
communication.
Snapping them together
Sales/Finance
Product/Marketing Launch Event 🎉
The Offset
Quarter Close 💸
Two major systems of work. Offset them about 45 days:
● Avoid lighting everyone’s hair on fire at the same time.
● The product shouldn’t change when Sales is in the final stretch of closing.
● Use product news in the middle of the quarter to advance deals.
Snap it together:
● Decide your Fiscal Year and snap sales plans to the quarters.
● Then snap your event schedule so events occur in the middle of the
quarter.
● Then plan your R&D cycle to hit those event deadlines.
Week 1 ● Sales Kickoff prep
● New sales plans, territories, quotas finalized
● Finance Closes the Quarter
Week 2 ● Sales Kickoff
● PMs present at SKO
● Board meeting prep
Week 3 ● Board Meeting
Week 4 ● Product Roadmap Prioritization for next quarter
● Code freeze / QA begins for this quarter
Month 1 - “Plan”
Week 5 ● Design Review for next quarter
● Company preview of Launch Event
● Closed beta releases
Week 6 ● Final Event prep
● Marketing collateral finalized
Week 7 ● Launch Event
● Customer Advisory Board meets
Week 8 ● Launch event debrief
● Company celebration / recognition
● Sales reps use marketing news to warm up leads
● Bug fixes
● Next quarter’s release finalized
Month 2 - “Launch”
Week 9 ● Coding begins on next release
● Pipeline inspections
● Finance benchmarks against models
Week 10 ● Marketing begins planning next launch event
Week 11 ● Sales Ops begins planning next SKO
Week 12 ● Sales closes the Quarter
Month 3 - “Close”
There’s an old debate about culture:
● Should startups be run as a sprint or a marathon? Which one works best?
● Answer: Neither. They function best as “Ladders.”
○ Sprint, then rest. Sprint, then rest.
○ Let team recover, celebrate accomplishments, reflect on what has
happened. Then start next sprint.
Culture
Summary
● 4 calendars, 2 systems, 1 operating cadence.
● The unit is the quarter (seasons).
● System 1 (Sales/Finance) orients around the quarterly close.
● System 2 (Product/Marketing) orients around the launch event.
● Use events to create cross-functional collaboration (eg SKOs, launches).
● The compounding effect of shipping 4 great quarters/year is huge. Most
companies barely ship 1.
● It’s not a marathon or a sprint -- think ladders.
Thank You

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The Cadence: How to Create Your SaaS Army

  • 1. The Cadence: How to Build Your SaaS Army David Sacks Co-founder, General Partner Craft Ventures @davidsacks May 27, 2020
  • 2. The Cadence: How to Build Your SaaS Army
  • 3. Let’s Face It Startups are a Shitshow 50 → 500 employees
  • 4. Wouldn’t It Be Nice to Turn Them into an Army? From To Startup chaos. The team works in lockstep. Disconnected functional priorities. Everyone in the company knows what to focus on. Erratic release schedule and unpredictable sales performance. Quarter after quarter, the company ships and sells.
  • 5. ● First, as COO of PayPal. ● Then as Founder/CEO of Yammer, we adapted it for SaaS -- creating the fastest unicorn SaaS exit. ● Also learned key elements from our main competitor Salesforce. How I Learned the Cadence
  • 6. ● There are two key systems in a startup: 1. The Sales / Finance System 2. The Product / Marketing System ● Both run best on a quarterly cycle. ● When snapped together, with an offset, they create a single operating cadence for the company. What Is the Cadence? Sales 📈 Finance 💰 Product 🛠 Marketing 🚀+
  • 8. Month 1 Sales Kickoff (SKO) Month 2 Pipeline Inspections Month 3 Closing Set new plans, territories, objectives, spiffs. Retrain sales team on product and best practices. Mid-quarter adjustments to hit quota. Sales can use marketing news to warm up/ nurture prospects. Heads-down on closing to hit quota. Sales is best run on a quarterly plan: ● Annual quotas are too slow to judge performance, monthly plans are too volatile. ● Adjusting quotas and territories more than once/quarter will undermine morale. 📈 Sales Calendar
  • 9. 💰 Finance Calendar Sales and Finance calendars are one system: ● Sales drives the financial results of the company. ● Finance team is arbiter of quota credit and revenue recognition. Year end December 31 or January 31? ● A January year-end is better for sales-driven startups. Board meetings: ● Schedule 2-3 weeks after close of the quarter when results are fresh. ● Teams gets strategic insights when they can still impact the quarter.
  • 11. Product Management works better on a quarterly calendar: ● Engineering should ship code weekly (or daily). But this is about product management. ● Rocks = major releases; Pebbles = features; Sand = fixes. ● Avoid shipping a lot of sand. ● Salesforce exemplar. Avoid “over scope.” ● Yammer rule: 2-10 engineers, 2-10 weeks ● Nothing kills dev like a v2. 🛠 Product Calendar
  • 12. 🚀 Marketing Calendar Marketing and Product calendars are one system: ● Marketing activity feeds off of new products. ● Product releases are the centerpiece of marketing events. ● For marketing purposes, 4 big releases > 52 small ones. Use events as the forcing function: ● Combine news with events and live demos to create lightning strikes. ● Setting date forces team to scope correctly, hit deadlines. ● Better external communication forces better internal communication.
  • 14. Sales/Finance Product/Marketing Launch Event 🎉 The Offset Quarter Close 💸 Two major systems of work. Offset them about 45 days: ● Avoid lighting everyone’s hair on fire at the same time. ● The product shouldn’t change when Sales is in the final stretch of closing. ● Use product news in the middle of the quarter to advance deals. Snap it together: ● Decide your Fiscal Year and snap sales plans to the quarters. ● Then snap your event schedule so events occur in the middle of the quarter. ● Then plan your R&D cycle to hit those event deadlines.
  • 15. Week 1 ● Sales Kickoff prep ● New sales plans, territories, quotas finalized ● Finance Closes the Quarter Week 2 ● Sales Kickoff ● PMs present at SKO ● Board meeting prep Week 3 ● Board Meeting Week 4 ● Product Roadmap Prioritization for next quarter ● Code freeze / QA begins for this quarter Month 1 - “Plan”
  • 16. Week 5 ● Design Review for next quarter ● Company preview of Launch Event ● Closed beta releases Week 6 ● Final Event prep ● Marketing collateral finalized Week 7 ● Launch Event ● Customer Advisory Board meets Week 8 ● Launch event debrief ● Company celebration / recognition ● Sales reps use marketing news to warm up leads ● Bug fixes ● Next quarter’s release finalized Month 2 - “Launch”
  • 17. Week 9 ● Coding begins on next release ● Pipeline inspections ● Finance benchmarks against models Week 10 ● Marketing begins planning next launch event Week 11 ● Sales Ops begins planning next SKO Week 12 ● Sales closes the Quarter Month 3 - “Close”
  • 18. There’s an old debate about culture: ● Should startups be run as a sprint or a marathon? Which one works best? ● Answer: Neither. They function best as “Ladders.” ○ Sprint, then rest. Sprint, then rest. ○ Let team recover, celebrate accomplishments, reflect on what has happened. Then start next sprint. Culture
  • 19. Summary ● 4 calendars, 2 systems, 1 operating cadence. ● The unit is the quarter (seasons). ● System 1 (Sales/Finance) orients around the quarterly close. ● System 2 (Product/Marketing) orients around the launch event. ● Use events to create cross-functional collaboration (eg SKOs, launches). ● The compounding effect of shipping 4 great quarters/year is huge. Most companies barely ship 1. ● It’s not a marathon or a sprint -- think ladders.