How should SaaS founders engineer their Second Act? ??

Here's the newest podcast on the block and what a way to kick things off. ???

As soon as I learned that Krish Subramanian is hosting a SaaS podcast, I added it to my weekend reading list. Of course, knowing that Akash Sharma has his fingerprints all over it was the ever-so-gentle nudge for me to go through it in one go. And what a great first episode! ??

For the inaugural episode of the Second Acts podcast, Krish sat down with Nick Mehta , CEO of Gainsight , who dropped deep earned secrets about scaling SaaS companies.

First, what's the Second Act for a SaaS company? Here's what Nick says.

Most SaaS companies hit a growth ceiling with their initial product. The "second act" is all about finding new ways to grow—"And what they don't realize is some companies, act one can scale them to billions of revenue. Right, Snowflake? Maybe there's most people, it doesn't happen, like, vast majority of markets don't scale to billions of revenue in an act one. You wish they did. You could probably count on like a few hands the number of companies that have ever scaled to billions. You know, Microsoft and Google and Apple. But that's because these are the outliers, right? Nvidia. Even Nvidia's act one was actually gaming cards, right? So it's like a gaming chip. So everyone has this sort of act, act one, act two."

Now, let's explore Nick's key insights on how to engineer your Second Act as a founder.

Watch Those Numbers ??

Your bookings growth and new logo acquisition are like canaries in the coal mine who'll tell you if you are at the end of your first act.

Nick: "And so for me, the early warning is, are your bookings growing? Is the logo count growing? If you're seeing that start to taper off, you got to get to act two very quickly and we'll talk more about what act two looks like. I'll tell about what we did, but to me, the core thing if you so far, what we talked about, this is mission critical to building a great company."

Before You Dive into a New Market, Know Your Right to Win ??

Nick drops this valuable insight right off the bat.

"Now, what does right to win mean? I think to your point, one right to win is actually very simple, which is a buyer right to win. So you have a, typically an executive buyer. So you have an executive buyer. They like you a lot. For certain product but they also buy products from other vendors."

He shares the example of Gainsight's Buyer Right to Win.

"So in our case, Customer Success or Chief Customer Officer, whatever you call it, they buy our customer success platform to run their customer success team. But they also have like a training initiative and they also have a community. These people come to our conference. They're in our database. They like us, they work with us. We got great NPS. Go sell them these new products. And they love it. They're like, I can buy it all from Gainsight."

Data & Workflow: The Adjacencies that Create Your Right to Win ???

Nick shares how data and workflow adjacencies enable

"So in our case, what's interesting is that to give you two examples on a data adjacency, well, when you want to track like product usage in your product, like where people click and all that, one of the biggest reasons you do that is to drive retention and adoption. The other one is you want to make the product better. Right? But one big use case for retention adoption, all of the product analytics data from what we call Gainsight product experience PX flows automatically into Gatesight CS, our core product, so that our CSM's other people can see customer usage, drive campaigns based on that, things like that. There's a data sharing aspect to it."

And on workflow:

"Then you think about a different one, which is workflow in our community product. This is a forum. People post things. How do I do x in charge b or whatever in that product, one of the things that happens is somebody posts something and a CSM needs to see it, maybe act on it, because, gosh, they might be like, hey, it probably doesn't happen for you guys. But I'm upset at charge because of X, Y and Z. Right? It won't do and the CSM should see that. And so we have a automatic routing now where the posts will get pushed into gainside cs and then the CSM sees it and they can act on it."

"It's a no brainer, there's the buyer, economic buyer adjacency. There's the data, there's workflow. Probably some other things too. But you have to have some right to win."

The takeaway? To decide which markets to expand into and which features to build, check for the ways in which your core product can naturally send data or integrate into existing workflows adjacent to it. Start there.

When the "Right to Win" Isn't So Right ??

You should also realize quickly that you don't have the right to win in a market.

"By contrast, we are in a fourth area, which is this product analytics engagement where we sell that sells to the CPO or product leader. We have a lower right to win there historically because there's companies focused totally on that. Like it's a great company called Pendo. You guys might use them or Walkme. There's all these companies Amplitude that just focused on CPO. And so we struggled for quite a while because we're like, hey, over here we're like the center of the world. And over here they're like, who's Gainsight? Why are you guys in this market? I want to buy from the leader. Best of breed."

Here's looking forward to more amazing episodes from Krish, Akash and team Chargebee.

Watch the full episode here: https://www.youtube.com/watch?v=rM9HM0jN8Hs&t=3s