TechCrunch journalist Steve O’Hear interviews Oxx co-founders and General Partners, Richard Anton and Mikael Johnsson, on all things SaaS, and why it’s okay to scrap triple-triple-double-double-double in favour of long term sustainable growth.
“[T-T-D-D-D] is very aggressive growth that is often displayed in consumer markets where winners take all — but in B2B software companies, growing this fast often comes with a lot of baggage in terms of product debt, architectural debt, wrong deals being struck that don’t necessarily fit with the company’s long-term vision and focus, unhappy customers, organisational chaos and human burnout. This can therefore result in an abrupt decline in growth, and all sorts of messy issues to clean up.
What we’re saying is that it’s okay to not follow this pattern, but instead a slower (yet by most comparisons still very aggressive) growth trajectory, which allows you to build a sustainable company in terms of product, customers, culture and people. We’re happy to invest in a company that grows 80% at $5 million of revenue if we have conviction that the opportunity is truly the right one in the long term and that we can maintain a high growth rate regardless if that is 100%+ or not. The compounding nature is a massive attraction of the SaaS business model, but that also works the other way around.
If you have been growing like crazy, but underinvested in product and customer success, that will come back to bite you through churn — which if too high, wrecks any SaaS company.”
Read the full interview in TechCrunch here.