The impending slowdown and opportunity
The VC and startup community is rife with reports and data coming out every day of the impending slowdown in investments and valuations.
According to CBInsights, global funding has fallen 19% to $144 billion from last quarter, the most significant quarter-over-quarter percentage decline in nearly ten years.
Although some feel that the SaaS industry is bucking this trend or is slowing down "slower" than other sectors, it is essential to note that public SaaS companies' Q1 2022 end valuations are already down 24% compared to Q4 2021 end.
The slow down currently felt in the growth stages will eventually trickle down to the Series A and seed stages. It is expected that the SaaS industry will be heading into a challenging environment.
B2B SaaS leaders would do well to buckle down for the ride. Some time-tested strategies include:
- Conserve cash flow and burn multiple
- Deepen product focus
- Rejuvenate the customer retention focus
- Position your offering to help customers ride out the slowdown and come out stronger
- Carefully plan your growth spending on the most promising areas
However, as Winston Churchill famously said,
"Never let a good crisis go to waste."
Along with the slowdown is an opportunity for every B2B SaaS company to outperform and outshine their category peers. Not all categories of SaaS will be impacted equally, and not every company will experience slowing growth. Companies that can maximize their current efforts and investments with focus and clarity can outperform their peers in the category.
Navigating the slowdown - The Hard thing about Hard things
Much is being written about how to navigate in a down-market strategically.
As VC and ex-entrepreneur Ben Horowitz expressed in his book The Hard thing about Hard things, "There's no recipe for leading a group of people out of trouble."
While there is no sure-shot recipe, there are a few operationally "hard" things that B2B SaaS RevOps leaders can focus on to help their companies and themselves ride the curve.
1. Maximize the Full Revenue Funnel across Marketing, Sales, and Customer Success
- Don't just focus on the current Sales opportunities and deals. While closing deals already in the sales pipeline is essential, you also have to think about pipeline readiness and quality. Your ability to extract the maximum from your current leads, MQLs, and SQLs in the funnel will be crucial.
- Drive better visibility into the effectiveness and efficiency of transitions between Marketing, SDR, and AE motions are critical.
- Identifying where the leakages and drops are happening, e.g., why leads are not progressing faster or are being dormant, and whether SDRs and Marketing are working together to advance the leads is essential.
2. Drive cross-functional SWAT teams
- Become more cross-functionally integrated. It is not what Marketing, Sales, or Customer Success does individually but how the transitions happen while reducing the chances of drops and leakages.
- Create a Team of Teams approach. Move away from centralized hierarchical decision making and execution to networked empowered execution teams. This is the right time to reinforce the RevOps integrated approach.
- Create new teams and team names to create the shared mission. Instead of functional team names like Demand Generation, Marketing, SDRs, etc., re-configure the teams into "Pipeline Coverage and Generation," "Funnel Health" teams, etc.
- Come to quick alignment on the key metrics and processes to monitor.
- Simplify your metrics and process stages
3. Emphasize End to End Execution Visibility & Agility
- Create a RevOps execution control center/view that helps you monitor what changed on a daily/weekly basis from the aggregate to the most granular level
- Create views and drill-downs that give you insights into what leads/opportunities are new, moved, dropped, or disqualified and why to take the requisite action.
- Monitor progress of the full-funnel on a shorter rolling time-window basis (e.g., rolling two weeks) across key metrics on Volume, Value, Conversion, and Velocities. Your ability to rapidly respond to new information from leads, prospects, customers, sales, and marketing is critical.
- Set up the activity level, lead level, campaign level, opportunity level alerts, and notifications. All in one place. Make sure these views map the individual entities and their journeys and transitions across teams and stages.
4. Increase the frequency of cadences
- If you have pipeline coverage, pipeline health, sales & marketing interactions, have them more frequently to drive the right interventions and actions faster.
- Conduct frequent dipstick tests that reduce your time to respond to emerging issues and opportunities
- Increase the speed of the Plan-Execute-Measure cycles.
5. Selectively invest in AI-based technologies with fast time to value
- It is not the time to change your core systems of record like the CRM, the Marketing Automation systems, etc. Instead, teams should focus on improving the utilization of these systems to drive automation and better capture information on activities and customers.
- However, this is definitely a time to improve your ability to make informed decisions and improve velocity and productivity through investments in Systems of Intelligence, Engagement & Orchestration.
- Selectively invest in new data and AI-based technologies that help you speed up insights and execution.
- Prioritize technologies that have time to value in days and weeks (not in months)
- Prioritize technologies that enable an entire revenue funnel perspective and end to end execution visibility and agility
Lean in - Never let a crisis go to waste!
Revenue Operations is one of the fast-growing functions and operating models in the B2B SaaS world. Gartner predicts that 75% of the Highest Growth Companies in the World Will Deploy a RevOps Model by 2025
The role of RevOps leaders and teams becomes even more critical in a slowing market.
The RevOps model done with urgency can precisely rescue such a situation and beyond.
In a crisis are born new things and new ways of functioning. RevOps has been around, but the promise of RevOps remains unfulfilled. Execution innovation in a crisis is the need of the hour as the recent pandemic has shown us.
Don't let this crisis go to waste. Lean in.
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