The Importance of a SaaS CEO Minding the Gaps

By Justin Talerico

Feb 28 2019

Sometimes things just fall into place. Like this post. I had nascent inspiration to write it last week, but couldn’t quite find my passion for it. Then I had a couple of clients surface some things that really focused my thoughts on the SaaS CEO role. My personal experience as a tech CEO for 20 years is part of it. But because we were largely bootstrapped, I wasn’t beholden to raise round after round of capital. (Granted, I had a whole different set of responsibilities that filled the fundraising void — like sustainably growing from cash flow.)

SaaS CEO Role: Chief Fundraiser

Many SaaS CEOs have cyclical roles. Chief among those cycles might be the chief fundraiser role. If you’re a startup or growth stage SaaS and dependent on outside capital, this role never goes away. But it does cycle through some pretty acute peaks and valleys. When you’re not actively raising, you’re preparing to raise — managing to metrics to ensure that your next raise is on track. And when you’re actively raising and pitching, you could be spending almost all of your time on that task. So let’s say that a funded (or aspiring to be funded) SaaS CEO spends 15-90% of their time as chief fundraiser.

SaaS CEO Role: Chief Recruiter

Another of the cyclical roles, chief recruiter is largely focused on attracting key leadership talent that aligns with the culture, vision, and needs of the organization. Like fundraising, this one also seldom goes to zero. And in startup mode, chief recruiter may well consume a very high percentage of the CEO’s time. Once the core leadership team is in place, the chief recruiter portion of the SaaS CEO’s role will diminish. But there’s usually someone needed somewhere that’s going to need CEO-level vision and passion to woo them into the company.

SaaS CEO Role: Chief Visionary

This is about leading the company, providing and reinforcing a point of view, and keeping everyone in the boat and rowing together. This is less volatile than fundraising and recruiting. In fact, volatility undermines the very nature of being the chief visionary. The real value in this role lies in consistency, predictability, and quite frankly, repetition (or reinforcement if you prefer). This means reinforcement in every meeting and casual conversation, and it means reinforcement in all-hands and town-hall meetings that take place on a regular and frequent cadence. The hardest part of this role is remembering that everyone is not in your head. The leadership needed may feel too obvious, but it’s not.

SaaS CEO Role: Sales

Sales is a role that doesn’t come with a ‘chief’ for me as a SaaS organization should be building a scalable, predictable sales machine that’s not dependent on the CEO or any other whale of a rainmaker. Yes, a sales-focused CEO is beholden to sell like crazy until the right sales leadership and team are built. But that’s a temporary role of necessity, rather than an intentional and permanent one. So the sales portion of SaaS CEO’s role may be higher at the pre-revenue/startup stage and diminish from there to near zero. Like recruiting, the charismatic CEO’s ability to jump into a big deal and get it closed will never go to zero.

And now the reason for this post…

After 20+ years as a tech entrepreneur, I see the SaaS CEO’s most critical startup or growth-stage role as minding the gaps.

 Aside from the acute needs articulated around fundraising, recruiting, vision, and sales, the CEO’s big contribution should be seeing and addressing the gaps between leaders, teams, and initiatives.

How gaps reveal themselves, and how big they are, depends on how the organization is structured and measured. Modern SaaS departments are much more co-dependent than independent. For example, we now understand that churn isn’t a customer success problem, it’s an organizational problem — from product, to sales and marketing, to support, and even operations. Reducing the gaps means seeing, evangelizing, and optimizing for the opportunities across team boundaries. In the case of churn, it means aligning all teams and incentives in a common mission where everyone understands their contribution to accomplishing a shared goal. It means empowering each team to develop contributing sub-metrics and incentives that role up to churn in a meaningful way. And then it means referencing that progress and cooperation as chief visionary in all hands and town halls.

In most well-designed SaaS organizations, the gaps may not break the company, but mitigating them may well make the company. The SaaS CEO’s role as chief gap minder is a largely consistent one that requires perspective and space to be revealed. In my experience, the gaps revealed themselves when I had the mental freedom to think about the company at a higher level. That’s not easy. In fact, when chief recruiter or chief fundraiser is consuming 90% of bandwidth, chief gap minder probably doesn’t have much of a chance. But for the rest of the time, the ability to recognize and mind the gaps is crucial to optimizing the growth machine.

Content by Beacon9 SaaS Business Advisory

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