Weekly SaaSology ⚡ 12.05.21
Deskless Workforce 👷, Sales Tech Stack 🛠️, and Product-Market Fit 🎯
Forbes announcing its annual 30 under 30 (more like 600!), Jack Dorsey stepping down as Twitter CEO (ceding the title to yet another rising immigrant leader), and Square changing its name to Block 🧊 (I’m sorry what?). A lot of interesting developments in tech recently. Let’s unwrap the most exciting investments and trends of this week:
Top Five Investments 🚀
Shiftsmart, a New York City-based labor management platform, raised $95 million in Series B funding led by D1 Capital. Its platform matches more than 500,000 hourly workers 👷 with open shifts across companies like Airbnb, Subway, and Levi’s. More on deskless workforce management tools below.
Klue, a Vancouver-based competitive enablement platform, raised $62 million in Series B funding led by Tiger Global, with participation from Salesforce Ventures. It gathers data on competition from various sources and leverages AI to provide competitive insights 📈 to multiple teams within a business, including marketing, sales, product, and senior leadership. It competes against other competitive intelligence platforms like Crayon and Contify.
ThreeFlow, a Chicago-based employee benefits placement platform, raised $45 million in Series B funding led by Accel, with participation from Emergence Capital, Equal Ventures, and First Trust Capital Partners. Insurance brokers and carriers require a highly customized sales process due to the complexities of designing bespoke plans 💼. ThreeFlow helps brokers and carriers manage the entire benefits placement process (end-to-end) on a single shared system.
Frontegg 🥚, a Tel Aviv-based user management platform, raised $25 million in Series A funding led by Insight Partners. In a product-led growth era, there is a dire need for tools like Frontegg that developers can embed as a UI layer within apps and enable self-service, security, admin portal, and enterprise capabilities.
Blue Lava, a Palo Alto-based security program management platform 🛠️, raised $7.5 million in Series A funding led by Crosslink Capital. It provides deep visibility into an enterprise’s IT infrastructure, so security and IT leaders (CISOs and CIOs) can evaluate, strategize, and budget cybersecurity programs.
Top Two Trends ☁️
Deskless Organizations Grapple with High Turnover 👷
By definition, a “deskless” worker is any employee not seated behind a desk when they're working. According to the Rise of the Deskless Workforce report, deskless workers make up ~80% of the global working population. They work across a variety of industries like agriculture, manufacturing, and retail 🛒.
More than a third (36%) of deskless workers in the US want to quit
67% of deskless workers said that feedback is crucial to them, but 44% don’t feel connected to the employer, and 39% don't feel heard
73% of deskless workers are still using pen-and-paper checklists. Even for those that do interact with tech, they are bound to legacy IT systems
65% of deskless leaders plan to invest more energy or budget into their overall employee experience in 2022 💰
The deskless workforce has often been overlooked by software providers. To boost productivity, morale, and efficiency, deskless organizations will have to focus on end-to-end digitalization of work processes and business functions. As a digitally-savvy generation of young workers enters the workforce, replacing manual practices with modern technology and optimizing the digital experience of deskless workers 📱 will be instrumental in reducing turnover. More deskless workforce management tools will emerge, scale, and raise funding in the next few years, either as a horizontal play (like communication and scheduling capabilities) or with a vertical focus (like restaurants and retail).
Rise of Sales Enablement Platforms
Did you know that the average sales representative spends more than 65% of their time on tasks other than selling? If a startup pays a sales rep $100,000, this equates to $65,000 spent on activities that don’t generate any revenue. This might make you wonder - where is all that time (and money 💸) spent?
The majority of that time is spent on administrative tasks 📋 such as performing research to find leads, tracking prospects on a spreadsheet, adding notes to the CRM, and, if we’re being honest, scrolling on Instagram 📱!
This is where sales acceleration software comes into the picture. There are hundreds, if not thousands, of SaaS platforms focused on various sales functions from training, call tracking to lead-to-account matching. While the human element of sales 👨💼 may never go away, software platforms will continue to make the life of a sales rep easier. For instance, there’s no need to customize cold emails for all prospects (SalesLoft automates that function) and screen hundreds of emails to add leads to the CRM (Groove tracks emails in real-time).
Software platforms empower sales reps with the tools they can use to automate tasks, training they need to convert leads, insights they can leverage to win against rivals, and more. Building a robust sales tech stack is just as important as hiring the right VP of Sales. This seems like the perfect opportunity to discuss one of the hottest sales enablement startups, Gong, that recently raised $250 million at a $7.25 billion valuation in Series E funding.
Startup Spotlight ✨
Founded in 2015, Gong is a San Francisco-based revenue intelligence platform with 700+ employees and $584 million in funding. Gong captures and analyzes customer interactions across phone, email, and web conferencing to provide insights at scale, empowering revenue teams to make data-driven decisions 👩🏫. Gong helps its customers improve win rates, increase deal sizes, and accelerate ramp-times.
Gong serves 2,000+ customers like PayPal, Hubspot, LinkedIn, and Zillow, that continue to rate the platform highly 😍 on software review websites like G2 (4.7/5) and Capterra (4.8/5). It primarily competes against other conversational intelligence tools like Chorus, which ZoomInfo acquired for $575 million earlier this year.
VC Topic of the Week 📚
As we discussed pre-seed and seed investing in the last few editions, let’s talk about two critical attributes of an early-stage startup that get VC investors fired up:
Founder-Market Fit (FMF) and Product-Market Fit (PMF) 🎯
Founder-market fit (FMF) is when the founder or CEO has strong domain expertise, mission-driven mindset, and technical skills 🛠️. Pre-Series A VCs like to see FMF as they rarely have the luxury of investing in startups with PMF.
Product-market fit (PMF) is achieved when a business successfully identifies its target customers and serves the right product 💡. Marc Andreessen of a16z defines PMF as “being in a good market with a product that can satisfy that market”. In his blog, he also argues that PMF is “the only thing that matters for a new startup”.
In principle, one can measure product-market fit with surveys that identify the percentage of the users that think that the product is a 'must-have' ✔️. It is less about hypothetical numbers and more about an in-depth and tangible understanding of who the target customers are and how they feel about the product and the business. Some VCs also believe that for PMF, the business must be creating organic growth through word of mouth 🗣️ before building a marketing engine to scale user acquisition.
Andy Rachleff, a co-founder of Benchmark, coined the term “product-market fit.” Andy credits Don Valentine, founder of Sequoia, for inventing the concept of PMF. He says, “for enterprise businesses, at the end of your free trial, you should pull the trial. If the customer doesn’t scream 😱, you don’t have PMF. Because if they aren’t going to buy it at the end of the 30 days, they aren’t desperate. If they aren’t desperate, you don’t have PMF.”
Tweet of the Week 🐦
Feel free to reach out to me by replying to this email or @dhruvcashpoor on Twitter!
This newsletter is intended for informational purposes only. Sources: TechCrunch, VentureBeat, Twitter, Giphy, Tenor, Klue, Frontegg, a16z, HR Reporter, Sales Hacker, Reuters, HR News, Marc Andreessen's blog, Tom Wilson's Medium, Gong