Dave Kellogg: How to Forecast in 2024 & Why CaC Payback is Flawed and CAC Ratio is Better | E1110

ℹ️ EPISODE INFO

Released

January 31, 2024

Duration

1h 12m

Channel

The Twenty Minute VC

Watch on YouTube

▶ Open ↗

📝 EPISODE DESCRIPTION

Stay on top of the private market with free access to volumes of real time market data and enjoy Hiive’s automated trading experience. With thousands of trades across hundreds of unicorns, Hiive is the fastest growing pre-IPO marketplace in the world. Create a free account today at hiive.com/20vc and see why over a thousand institutions and 10,000 accredited investors have joined Hiive. ----------------------------------------------- Dave Kellogg is one of the OGs of Saas. Among his many accomplishments, Dave was the CMO of Business Objects where he helped scale the business from $30M to $1BN in revenue. Dave has also been a CEO twice, once scaling the business from $0 to $80M and the other business from $8M to $50M before selling it. Dave is also an advisor to some of the best including GainSight, Logickull, MongoDB, Pigment, Recorded Future, and Tableau. ----------------------------------------------- Timestamps: (00:00:00) Intro (00:01:04) Kellogg's Career Highlights (00:07:00) CAC Analysis (00:11:48) Investment Metrics Analysis (00:14:40) SaaS NRR and GRR Dynamics (00:18:21) Importance of CS Teams (00:24:32) SaaS Team Incentives & Churn (00:31:18) Sales Team Management (00:39:51) Sales Closing & Buyer Talk (00:43:12) 2024 Discounting Strategies (00:47:44) Customer References (00:53:46) Product Marketing: Horizontal vs Vertical (00:59:50) Engineering vs GTM Founders (01:05:06) AI SaaS Strategies for Founders (01:08:06) Quick-Fire Round ----------------------------------------------- In Today’s Episode with Dave Kellogg We Discuss:

1. What are the Metrics That Matter: Why is CAC payback period such a flawed metric? What is CAC ratio? Why is it more effective than understanding payback? Why is gross revenue retention more important than net revenue retention? What are the single biggest mistakes that founders make when using metrics today?

1. How to Build and Scale the Best Sales Teams: Why should founders hire three sales reps at one time? What is the benefit? What are the three different types of sales calls all teams must have? What should all CEOs and Heads of Sales ask of their sales team in forecasting? What is the single biggest mistake most companies make in forecasting? How should a CEO/board member respond to a sales team that lets a deal slip to next quarter?

1. Are CFOs Buying New Tech and How to Win Renewals: Are CFOs open for business? How has the top down sales process changed in the last year? Why is the way that startups think about renewals completely broken? What are the three different types of customer success teams we have today? What is the core role of customer success? How can we incentivise them to sell more?

1. Mastering Product Marketing, Customer Profiles and Crossing the Chasm: How can we use product marketing to increase sales velocity? What is the single biggest risk in product marketing today? What does Dave mean when he says “an ICP starts as an aspiration and becomes a regression?” ----------------------------------------------- Subscribe on Spotify: https://open.spotify.com/show/3j2KMcZTtgTNBKwtZBMHvl?si=85bc9196860e4466 Subscribe on Apple Podcasts: https://podcasts.apple.com/us/podcast/the-twenty-minute-vc-20vc-venture-capital-startup/id958230465 Follow Harry Stebbings on Twitter: https://twitter.com/HarryStebbings Follow Dave Kellogg on Twitter: https://twitter.com/Kellblog Follow 20VC on Instagram: https://www.instagram.com/20vchq Follow 20VC on TikTok: https://www.tiktok.com/@20vc_tok Visit our Website: https://www.20vc.com Subscribe to our Newsletter: https://www.thetwentyminutevc.com/contact ----------------------------------------------- #harrystebbings #20vc #venturecapital #business #startup #podcast

🎤 SPEAKERS

• Harry Stebbings

  host

• Dave Kellogg

  guest

• Narrator

  other

🧾 EPISODE SUMMARY

In this episode of The Twenty Minute VC, featuring Harry Stebbings and Dave Kellogg, Dave Kellogg: How to Forecast in 2024 & Why CaC Payback is Flawed and CAC Ratio is Better | E1110 explores dave Kellogg Redefines SaaS Efficiency: CAC, Forecasting, CS, and AI Dave Kellogg, veteran SaaS operator and advisor, explains how to think about efficient growth in today’s tougher funding and buying environment, emphasizing simple, “atomic” metrics like CAC ratio over compound metrics like CAC payback period. He argues that most startups underuse basic analytics to double down on what’s working and misunderstand key concepts like ICP, retention, and sales efficiency. Kellogg dives deep into forecasting (new sales vs. churn), the real job of customer success, the dangers of sloppy outbound, and how to structure sales organizations, incentives, and close plans. He closes with views on AI in sales, the outbound arms race, and why subscription pricing and founder idolatry have both become problematic ‘religions’ in SaaS.

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