SaaStr 138: The Rule of 40% For A Healthy SaaS Company, Why It Is Not All About Top Line Growth In Enterprise & Why Land & Expand Is Wrong with Vineet Jain, Founder & CEO @ Egnyte

Vineet Jain is the Founder & CEO @ Egnyte, the startup that delivers smart content collaboration in the cloud or on-premises. They have raised over $60m in VC funding from the likes of Kleiner Perkins, Google Ventures and one of our favourites here, Mike Maples @ Floodgate. Prior to Egnyte, Vineet founded and successfully built Valdero, a supply chain software solution provider, funded by KPCB, MDV and Trinity Ventures. Before that, Vineet held a variety of senior operational positions at KPMG and Bechtel.

In Today’s Episode You Will Learn:

• How Vineet made his way into the world of SaaS and came to found his second startup in Egnyte?
• Vineet states that it is not all about top line growth, how does he look to satiate VC appetitie for growth with this mentality? Why does he think that we should discuss EBITDA margins more often within business models in Silicon Valley?
• Considering this conservative approach, how does Vineet determine when is the right time to put the “pedal to the metal” and raise a large round of funding and really look to gain the market? What metrics suggest product market fit to this extent?
• Why does Vineet argue that land and expand is all wrong? What alternative does Vineet offer for those looking to sell to enterprise?
• How does Vineet evaluate “The Rule of 40% For A Healthy SaaS Company”? What are the inherent flaws in this model? How can this model be gamed by posting enormous growth figures? What figures should startups input into this ratio?

60 Second SaaStr

1. What does Vineet know now that he wishes he had known earlier?
2. How long is long enough to give someone who is not performing?
3. What hire does Vineet wish he had made earlier?

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Jason Lemkin

Harry Stebbings

SaaStr

Vineet Jain