Collective Wisdom | Nov/Dec 2023
As 2023 draws to a close, I wanted to take a moment to thank each of you. Together you make this community of operators, founders, and investors exceptional.
This past year was marked by multiple challenges — macroeconomic, geopolitical, even personal — bringing the importance of community and its collective power even more to the forefront.
Many companies are still being hammered by shaky traditional SaaS metrics, but we’re starting to see the beginning of some green shoots. I asked longtime OpCo advisor Dan Scheinman for his thoughts on where founders ought to focus their attention going into 2024. Dan is one of the most experienced enterprise investors around – from first check in through IPO and beyond – and his suggestion to look at leading vs. lagging indicators provides a refreshing take on assessing the health of a business, which he shares below.
I also recently caught up with OpCo LP and Head of Stripe’s Strategy, Operations and Enterprise Business, Maia Josebachvili. She has an expansive vantage, having sold her first startup before the age of 30 and seen all stages of the startup journey from 1→ 8,000 employees, pre-seed to Series I. Her two simple reminders for founders as you plan for 2024: ?(1) invest in the foundations, and (2) strategy is what you are not doing – focusing people on a few big priorities yields better results than spreading everyone too thin. Check out her spotlight here.
We rounded out a busy year of gatherings with a number of small, regional dinners bringing together an intentional cross-section of operators, founders, and investors. With 2024 in mind, we polled our attendees about their thoughts on AI in the year ahead. Perhaps no surprise, the majority are currently experimenting with and looking to implement AI tools. Many are optimistic about what’s to come in 2024, saying there’s never been a better time for innovation.
As I was looking at the 20 folks at our last dinner, it struck me how impressive this community is, even outside of their company-building prowess in their day jobs – two had won Emmys, and one was featured in an HBO documentary on her pro bono lawsuit against Charlottesville rally white supremacists. Giving back has always been a central tenet of our community, and our community continues to do just that. If you get a moment during the holidays, check them out below in One Last Thing.
Finally, grief over the passing of my father last month forced me to take a moment, and that’s my suggestion to you for 2024. Only by having space for reflection was I able to make the connections between my father’s life experiences and my life choices, and yes, even Operator Collective. The world is only going to continue to speed up; stillness provides the opportunity to rise above the noise, take stock of what’s tantamount, and level set. If there is anything this year has illuminated for me, it is that investing in the fundamentals – whether at work or personally – is time well spent.
From everyone at Operator Collective, we offer our heartfelt gratitude to you, our community of operators, founders, investors, advisors, and supporters for believing in our vision and building with us as we strive to make the world a better place.
Wishing you and your loved ones the happiest of holidays.
?? Mallun and all of us at Operator Collective
A (Positive) Message to SaaS Founders from Dan Scheinman
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There’s a lot of doom and gloom out there right now.
For those of you in the startup SaaS world, you’re likely surrounded by metrics that are flashing red. But as someone who’s played the long game for, well, a long time, I tend to focus on leading vs. lagging indicators. And these can give you a very different picture of the health of your business.
SaaS has a gazillion metrics, most of which don’t matter. The traditional ones are generally lagging indicators, numbers like last quarter’s growth rate, churn, or NRR (net recurring revenue). These tell you a lot about what broke in the past few months, but not much about what’s to come—which, you might find out, could be more positive than you think. Surprisingly, these metrics also don’t necessarily tell you much about how your product is doing in the market. For example, a customer may have cut down on licenses because of their own internal downsizing over the last year, but they might be just as excited about what your product can do for them.
Leading indicators, by contrast, force us to focus on the future. The most important one, in my view, is lead generation. Ask yourselves: Are the number of leads increasing? Is the quality of leads improving? (Yes, quality is hard to quantify but this is critical when assessing what’s to come.) Yet another leading indicator is whether or not your sales process and your close process is functioning more efficiently than before. In other words: Are deals starting to move through the funnel and is your close rate starting to improve? If so, these are indicators that changes you’ve made in the last year are starting to pay off.
There are other leading indicators, but the first step is to recognize that forward-looking metrics are important, especially right now. Founders are worn down, pressured to cut people and conserve cash. (Btw, if you don’t have product-market fit, cutting costs won’t solve your problems.) But my message is this: People have gotten so fixated on the bad news that they are not even searching for the good news. And if you look ahead—not just behind—you might find some nuggets of positivity.
As always, keep grinding.
One Last Thing
Karen Dunn, OpCo LP and Paul Weiss’ co-chair of litigation, is featured in HBO’s No Accident, a gripping documentary about Karen and her colleagues' pro bono journey to bring justice under a novel conspiracy theory for the violence committed by white supremacists during the Charlottesville “Unite the Right” rally.
OpCo Advisor and LP Claire Hughes Johnson joins The Economist’s new podcast Boss Class, where she expands upon Scaling People, which has become the definitive, much dog-eared guide to building and scaling organizations. Claire and host Andrew Palmer tackle myriad subjects: implementing systems and rituals early, how to run an effective meeting, and why it’s necessary to double down on talent due-diligence the more high-stakes the role. The episode is behind a paywall, so we encourage you to listen with a friend… or your team!
Pamela Ryckman, OpCo LP and Emmy-winning producer and writer, has a sophomore book after Stiletto Network (in which Mallun and her non-profit ChIPs were featured). Her biography, Candace Pert: Genius, Greed, and Madness in the World of Science, is the story of a groundbreaking prodigy whose research introduced the world to the mind-body connection, opioid receptors, peptide T, and her fight for recognition in a toxic healthcare system. Working in a culture where women were 58% less likely to be included on patents than their male counterparts and 13% less likely to be cited in research, Pert is equal parts visionary and villain and Ryckman’s portrait is hard to put down.