The Cadence: Building Your SaaS Army with Craft Ventures

Editor's Notes

• #4: In the early days, it’s pretty easy to keep organized. Then you start growing. Functional areas develop An org chart is born - along with silos Information gets trapped The shit show happens along the path from 50-500 Founders / leaders continue to manage like they did during seed stage But then they realize things are breaking How do you fix the chaos and elegantly scale? Create an army that tears through the market PayPal, Yammer Good ideas paired with great execution Cadence is that philosophy that enabled it
• #9: SaaS Sales teams are naturally oriented around quarters. The economics driving this behavior are built into comp packages and performance metrics. Aligning product and marketing efforts to quarterly sales flows makes them phenomenally more productive. Salespeople are desperate to create a sense of urgency with their prospects. Quarterly releases create a variety of time-bound “gives” that sellers can use as tools to lock down a deal. Quarterly releases, timed with sales quarters, turn the chaos of EOQ hail marys and desperation discounts into a tightly coordinated boon. Once you know when your Sales quarters begin and end, you can nail down everything else - from Sales Kickoffs and marketing events to code freezes and product releases. Carefully planned from a fixed date and working backwards, this unites the company behind the Sales team’s goals.
• #10: Fiscal Year is also quarterly: Big decision is whether to end on December 31 or January 31. A January year-end is better for sales-driven startups, avoiding mad rush to close out the year during Christmas break. Customers know about year-end closes and can try to extort discounts. With a January 31 close, the sales quarters end in January, April, July, October. Sales and Finance calendars are one system: Sales drives the financial results of the company. Good for reporting purposes to be on the same quarters. Finance team should also be the arbiter of quota credit and revenue recognition.. Incorporate Board meetings into the Sales / Finance system: Schedule 2-3 weeks after close of the quarter when results are fresh. Teams gets strategic insights when they can still impact the quarter.
• #12: Product Management works better on a quarterly calendar. This is controversial because engineering wants to ship code weekly (or daily). You can and still should do that, but this is about product management. Planning is different than releases. Think about it as filling a jar with wiffle balls, marbles, and sand. How do you fit them all in? The jar is the quarter’s release capacity. Start with the wiffle balls (major releases, tent pole products). Then add marbles (features). End with sand (fixes). Product orgs that don’t plan quarterly either ship a lot of sand -- or their wiffle balls take forever. Avoid “over scope.” Yammer rule: 2-10 engineers, 2-10 weeks. If 10 engineers can’t ship it in 10 weeks, it needs to be re-scoped. Otherwise, it’s a quagmire. Nothing kills dev like a v2. A lot of founders resist this system because they like to run around on fire telling devs what to do. That doesn’t scale. Remember this is for 50 → 500 transition. Salesforce successfully implemented seasonal releases early (Winter, Spring, Summer, Fall). The compounding effect has been huge.
• #13: Marketing and PM operate within the same system: Marketing activity feeds off of new products. Product releases are the centerpiece of marketing events. For marketing purposes, 4 big releases are better than 52 small ones. Use events as the forcing function: Press releases are easily lost in the clutter. Combine news with events and live demos to create lightning strikes. Webinars are fine in the new era. Showcasing the new produce on a specific date that is set in advance and cannot be moved forces the team to scope correctly and hit deadlines. Leadership must go on stage every quarter and justify why it matters. They have to lead from the front. It forces correct prioritization and “outside in” thinking like Sales. The need to communicate it externally will lead to better communication internally. It works for Marc Benioff and Elon Musk -- why aren’t you doing it?
• #15: Two major systems of work going on at all times. Both revolve around customers: The Sales/Finance system revolves around customer closes. The Product/Marketing system revolves around customer launch events.
• #16: If you use the Cadence, I can tell you what your major milestones in a quarter are going to be. Before i even know the specifics of what kind of SaaS you’re selling. Those milestones provide the structure.
• #19: When people talk about company culture, there is much debate about whether employees function better with marathons or sprints. Really, they function better with “Ladders:” Sprint, then rest. Sprint, then rest.