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Drivetrain: A new approach to predictable SaaS growth

Read the story behind Drivetrain and our mission to enable SaaS companies to find and navigate their path to growth and success.‍
Alok Goel
Announcement 
January 12, 2022
10 min read
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Summary

The pressing question facing leaders at SaaS companies today is,

"How do we scale the business predictably and achieve targets quarter after quarter?"

As a team of SaaS investors and entrepreneurs with multiple exits, we pursued this question passionately for the past several years. 

We worked closely with hundreds of SaaS companies and watched them grow (and some fail too). Over time, we carefully observed these businesses and saw what helped bring predictability to growth—at speed and all scales. 

Drivetrain is the culmination of these learnings. 

Here’s the story behind Drivetrain and our mission to enable SaaS companies to find and navigate their path to growth and success.

Impact of predictable growth on your business

While a new infusion of capital to grow your company is uplifting, it also comes with higher expectations. For one, the board places far more aggressive targets than what has been achieved in all the previous years.

For example, suppose it took five years to get your company to $10 million in annual recurring revenue (ARR). The expectation from the board is to add another $15 million to $20 million in ARR over the next 12 months. That’s almost tripling your revenue in less than a fifth of the time it took to get there. 

A daunting task. 

The stakes (cost of missing targets) are higher

The constant pressure to generate higher multiples on the investment brought in means the repercussions of missing targets is huge. For instance, a $2 million shortfall in ARR can have an impact of $30 million to $50 million on your company's valuation. It has cascading effects on the next round you are looking to raise.

And hustle won’t cut it any longer 

In the past, the scale of operations was small enough that you could hustle and reach your targets. However, with increasing scale and business complexity, it becomes harder to fix things and get back on track if targets slip. 

Scaling SaaS businesses is a hard science

especially to do it in a predictable way

Since every part of your GTM strategy is connected to another, it can be leveraged to bring predictable growth. If you know your targets, you can lay out every piece of your GTM puzzle by what should happen and when. 

For instance, the marketing team needs to ensure that there’s sufficient pipeline for the sales team at all times. Once sales closes a deal, the onboarding teams take over the implementation and hand over to customer success teams for driving successful renewals. 

To solve the SaaS growth puzzle, you need answers to three questions:

  1. What needs to happen to meet our target? 
  2. Is our business on track to hit that target? 
  3. What needs to be done to get back on track?

Let’s explore what’s needed to answer each of the above questions and the challenges associated with them.

Planning: What needs to happen to meet the target? 

To answer this question, you need to:

  • Create accurate plans, quickly
  • Collaborative planning across departments
  • Define and tune scenarios such as best case, worst case, etc.

But, this requires strong financial modeling knowledge. Spreadsheets, which is where most modeling is done, takes time to build, are error-prone, difficult to collaborate and align on, and hard to maintain. 

These challenges result in poor forecasts and long lead times for planning. Consequently, leaders are forced to make tactical and reactive decisions and often limit planning exercises to once a year. This is not ideal as you should plan at the speed your business requires to adapt to changing business conditions quickly.

Monitoring: Is your business on track to hit that target? 

To answer this question, you need to:

  • Quickly integrate and manage your business data securely
  • Create a single source of truth for company metrics
  • Monitor your plan numbers against actuals in real-time and optimize your forecasts

But maintaining an end to end data stack is expensive and requires engineering effort. Hence, incorporating actuals into the Excel model is often done manually. 

The Business Intelligence (BI) tools that integrate your data act as “rear-view mirrors” and only provide retrospective analysis. They lack the predictive ability that can answer questions such as, “Where will we land at the end of the quarter?” 

Also, planning often happens in silos creating problems like different definitions and measurement rules for metrics, and delays in relaying information across departments. Due to this, the reconciliation exercise is done manually and at the end of the month or quarter.

Foresight: What needs to be done to get back on track?

To answer this question, you need to:

  • Perform Root cause analysis to identify bottlenecks to growth 
  • Determine the growth drivers that can get the numbers back on track (What-If analysis)
  • Replan and align stakeholders quickly

Today, each of the above tasks becomes a project which takes days to complete.  As an example, can you determine if an additional sales hire actually drove the desired impact? Understanding this delta is vital because it connects tactics to business value, identifying what drives results most efficiently. 

Without such data-driven insights, making strategic planning decisions that will have the most significant measurable impact is difficult to conceive.

Thus, our aim became clear.

To create a platform to enable,

  • all departments from FP&A and revenue operations, to the CEO’s office and their chiefs of staff to view and create plans collaboratively,
  • Contextualize current business performance quickly, and
  • Forecast confidently for faster decision-making.

At the same time, to help them model faster, avoid errors, make more accurate forecasts and run multiple scenarios with ease.

So, we got to work!

Drivetrain: Purpose-built for driving SaaS growth

Drivetrain helps SaaS companies run better with integrated planning, monitoring and forecasting. 

It helps your teams with the information they need to work together in order to create and align on a single plan for your business. It helps you understand why slowdowns or accelerations happen and use that to sustain or achieve rapid growth. 

It provides executives the big picture perspective on where precisely their plans and efforts are having the most impact. Thus enabling them to optimize their plans and make decisions with informed confidence at the right time. 

Interested in learning more about Drivetrain and its capabilities? Reach out to us at learn@drivetrain.ai to schedule a demo today.

Drivetrain: A new approach to predictable SaaS growth

Alok Goel
Tarkeshwar Thakur
Announcement 
January 12, 2022
10 min read

The pressing question facing leaders at SaaS companies today is,

"How do we scale the business predictably and achieve targets quarter after quarter?"

As a team of SaaS investors and entrepreneurs with multiple exits, we pursued this question passionately for the past several years. 

We worked closely with hundreds of SaaS companies and watched them grow (and some fail too). Over time, we carefully observed these businesses and saw what helped bring predictability to growth—at speed and all scales. 

Drivetrain is the culmination of these learnings. 

Here’s the story behind Drivetrain and our mission to enable SaaS companies to find and navigate their path to growth and success.

Impact of predictable growth on your business

While a new infusion of capital to grow your company is uplifting, it also comes with higher expectations. For one, the board places far more aggressive targets than what has been achieved in all the previous years.

For example, suppose it took five years to get your company to $10 million in annual recurring revenue (ARR). The expectation from the board is to add another $15 million to $20 million in ARR over the next 12 months. That’s almost tripling your revenue in less than a fifth of the time it took to get there. 

A daunting task. 

The stakes (cost of missing targets) are higher

The constant pressure to generate higher multiples on the investment brought in means the repercussions of missing targets is huge. For instance, a $2 million shortfall in ARR can have an impact of $30 million to $50 million on your company's valuation. It has cascading effects on the next round you are looking to raise.

And hustle won’t cut it any longer 

In the past, the scale of operations was small enough that you could hustle and reach your targets. However, with increasing scale and business complexity, it becomes harder to fix things and get back on track if targets slip. 

Scaling SaaS businesses is a hard science

especially to do it in a predictable way

Since every part of your GTM strategy is connected to another, it can be leveraged to bring predictable growth. If you know your targets, you can lay out every piece of your GTM puzzle by what should happen and when. 

For instance, the marketing team needs to ensure that there’s sufficient pipeline for the sales team at all times. Once sales closes a deal, the onboarding teams take over the implementation and hand over to customer success teams for driving successful renewals. 

To solve the SaaS growth puzzle, you need answers to three questions:

  1. What needs to happen to meet our target? 
  2. Is our business on track to hit that target? 
  3. What needs to be done to get back on track?

Let’s explore what’s needed to answer each of the above questions and the challenges associated with them.

Planning: What needs to happen to meet the target? 

To answer this question, you need to:

  • Create accurate plans, quickly
  • Collaborative planning across departments
  • Define and tune scenarios such as best case, worst case, etc.

But, this requires strong financial modeling knowledge. Spreadsheets, which is where most modeling is done, takes time to build, are error-prone, difficult to collaborate and align on, and hard to maintain. 

These challenges result in poor forecasts and long lead times for planning. Consequently, leaders are forced to make tactical and reactive decisions and often limit planning exercises to once a year. This is not ideal as you should plan at the speed your business requires to adapt to changing business conditions quickly.

Monitoring: Is your business on track to hit that target? 

To answer this question, you need to:

  • Quickly integrate and manage your business data securely
  • Create a single source of truth for company metrics
  • Monitor your plan numbers against actuals in real-time and optimize your forecasts

But maintaining an end to end data stack is expensive and requires engineering effort. Hence, incorporating actuals into the Excel model is often done manually. 

The Business Intelligence (BI) tools that integrate your data act as “rear-view mirrors” and only provide retrospective analysis. They lack the predictive ability that can answer questions such as, “Where will we land at the end of the quarter?” 

Also, planning often happens in silos creating problems like different definitions and measurement rules for metrics, and delays in relaying information across departments. Due to this, the reconciliation exercise is done manually and at the end of the month or quarter.

Foresight: What needs to be done to get back on track?

To answer this question, you need to:

  • Perform Root cause analysis to identify bottlenecks to growth 
  • Determine the growth drivers that can get the numbers back on track (What-If analysis)
  • Replan and align stakeholders quickly

Today, each of the above tasks becomes a project which takes days to complete.  As an example, can you determine if an additional sales hire actually drove the desired impact? Understanding this delta is vital because it connects tactics to business value, identifying what drives results most efficiently. 

Without such data-driven insights, making strategic planning decisions that will have the most significant measurable impact is difficult to conceive.

Thus, our aim became clear.

To create a platform to enable,

  • all departments from FP&A and revenue operations, to the CEO’s office and their chiefs of staff to view and create plans collaboratively,
  • Contextualize current business performance quickly, and
  • Forecast confidently for faster decision-making.

At the same time, to help them model faster, avoid errors, make more accurate forecasts and run multiple scenarios with ease.

So, we got to work!

Drivetrain: Purpose-built for driving SaaS growth

Drivetrain helps SaaS companies run better with integrated planning, monitoring and forecasting. 

It helps your teams with the information they need to work together in order to create and align on a single plan for your business. It helps you understand why slowdowns or accelerations happen and use that to sustain or achieve rapid growth. 

It provides executives the big picture perspective on where precisely their plans and efforts are having the most impact. Thus enabling them to optimize their plans and make decisions with informed confidence at the right time. 

Interested in learning more about Drivetrain and its capabilities? Reach out to us at learn@drivetrain.ai to schedule a demo today.

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