Venture Capitalist at Theory

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2 minute read / Jun 23, 2015 /

The Beauty of Bottoms Up SaaS Businesses

One smart SaaS entrepreneur told me last week he prefers bottoms up businesses to top-down companies because bottoms up sales and marketing efforts enable startups to pursue hundreds of paths into a company. Unlike top down sales processes which offer a startup one shot at closing an account (a meeting with a CEO or VP), for bottoms up products, each employee is a credit-card-carrying-decision-maker.

As the number of total potential buyers expands, so does the universe of sales processes. And because each sales process is targeted to an individual, the sales cycles are much shorter. Combined, these two attributes of bottoms-up sales models permit startups to AB test and iterate their marketing and sales tactics much more quickly. Each experiment in marketing collateral or sales pitch reaches statistical significance in weeks, not months or years.

Bottoms up businesses also have another beautiful trait - they lead with their product. After marketing educates and interests potential users, the product and engineering team’s effort must shine during trial to entice a user to convert to paid. A startup can measure their effectiveness through the signup to paid flow, and again experiment their way to success.

Last, in bottoms up sales processes, customer success teams become critical contributors to the product roadmap. Daily, customer success teams hear and understand the challenges users face, and report them to the product team. In a top down model, the sales team often is responsible for relaying this feedback, which sometimes leads to feature building to satisfy the needs of one particular client, often a member of the leadership team, not the true end user.

Through experimentation and analysis, bottoms up SaaS companies can quickly spin a customer acquisition flywheel that can be used to generate enough business to grow a business very quickly.

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