“80% of the worlds workforce doesn’t sit at a desk, and 95% of the world’s software is built for people who sit at a desk. Once people build software for the other 80%, the size of the addressable market that could be created could dwarf what we currently have, which is pretty humbling to think about.”
Jake Saper, Emergence Capital (@jakesaper)
We dive deep into the nitty gritty details of SaaS investing and company building with the best in the business, Jake Saper from Emergence Capital. Emergence has been around since the beginning of the SaaS industry and -uniquely for a venture firm- is entirely focused on early-stage investing within it. They were early investors in major successes like Salesforce, Veeva, SuccessFactors, Box and Yammer, and more recently, Gusto, Zoom, and many more.
This episode is a must-listen for anyone investing in, operating in, or thinking about modern SaaS companies!
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Links from the Show:
Emergence Capital – “Series-A SaaS Metrics”
Show Bookmarks:
[03:50] – SaaS Basics
[06:45] – The Beginnings of Emergence Capital
[08:39] – The Emergence Capital Model
[10:51] – Back to the Origin Story
[15:38] – The Emergence Capital SaaS Thesis and Investment Themes
[20:50] – Coaching Networks
[29:22] – Evaluating Market Size for SaaS Companies
[38:46] – Building SaaS Companies
[39:49] – The Makeup of CEOs and Founding Teams
[47:43] – Before Product Market Fit [“Focus”]
[51:40] – SaaS Metrics and Product/Market Fit
[1:05:52] – What happens after the investment? [The IPO Press Release]
[1:09:20] – Go-to-Market in SaaS
[1:14:45] – SaaS Pricing
[1:19:00] – Show Wrap Up
People Worth Knowing:
Jon David
Dannie Herzberg
Doug Landis
Gordon Ritter
Jake Saper
Joseph Floyd
Mark Benioff
Matt Wallach
Paypal Mafia
Peter Gassner
Rob Ward
Stewart Butterfield
Viviana Faga
Companies and Products Mentioned in Episode:
Airbnb
Apple Music
Box
Compendium
Confluence
Drone Deploy
Emergence Capital
Enrollment
Guru (knowledge management)
Gusto
Kleiner Perkins
Madrona
Meritech
Microsoft
Pfizer
Salesforce
Service Max (acquired by GE)
Slack
Software as a Service
Spotify
SuccessFactors
Taunt
Textio
Force.com
Veeva
Yammer
Zendesk
Zenefits
Zoom
Episode Specific Terms:
ARR/MRR (Triple/Triple/Double/Double)
Churn/Negative Net Churn
Cloud
Coaching Networks
Cohort Analysis (The Smile)
Deskless Workforce
Diligence
Disintermediation
Enterprise
Flywheel
Generalist VC vs Focused VC
Horizontal vs Vertical Software
Investing Themes
Investment Memo
Investment Thesis
Market Pull
Multi-Tenancy vs Single Tenancy
Network Effects
On Track Earnings (OTT)
On-Prem
Opportunity Sizing
Principles, Senior Associates, Associates
Product/Market Fit (“Customer Love”)
Referral Effects
SaaS
Sales and Marketing Efficiency
Technical Thesis
Total Addressable Market (Top Down-Market Sizing)
Utilization (as a Consumer Metric)
Value Provided on Unit Basis (Bottom Up Market Sizing)
Ben and David’s Affiliations:
Wave Capital, @WaveCapitalVC
PSL, @psl
What is ACQ2: The Acquired Interviews?
ACQ2 is Ben and David's conversations with expert founders and investors. Acquired the stories of great companies — and ACQ2 dives deeper into the lessons we can learn from them, often with the protagonists themselves.