20VC: ServiceTitan Would Not Be the Success if We Raised VC Earlier: How to Build a Dominant Vertical SaaS Business, How to Master Going Into Enterprise, When & How to Launch Second Products with Ara Mahdessian, Co-Founder @ServiceTitan

The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch

The Twenty Minute VC

Finance, Venturecapital, Tech News, News, Siliconvalley, Technology, Investing, Startups, Business

4.4 • 637 Ratings

🗓️ 10 July 2024

⏱️ 51 minutes

🔗️ Recording | iTunes | RSS

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Summary

Ara Mahdessian is the Co-Founder and CEO @ ServiceTitan, one of the great vertical SaaS business of the last decade. Today the company powers over 11,800 trade customers and has raised over $1.4BN from some of the best including Bessemer, Battery, Index, ICONIQ and more. Their latest valuation pegged the business at a reported $7.3BN.

In Today's Episode with Ara Mahdessian We Discuss:

1. We Did Not Want To Raise VC Money:

Why did Ara not want to raise VC funding in the early days?
What convinced Ara to change his mind? Why did he choose Byron and Bessemer?
Does Ara believe that ServiceTitan would have been the success that it is, if it had raised in today's market, a $5M on $25M seed round? What would they have done differently?

2. How to Master Going Upmarket:

What are Ara's biggest lessons on what it takes to go upmarket?
How does the product need to change? How does the org of the company change?
When is the right time to go upmarket?
What did ServiceTitan get wrong in their move into enterprise? What did Ara learn from this?

3. How to Build a Brand in SaaS and Have Premium Pricing:

What are some of Ara's biggest lessons in how to build the best brand in vertical SaaS?
What works in brand building in SaaS? What does not? What would he do differently?
What have been Ara's biggest lessons on pricing? ServiceTitan is 3x their competitors, how does Ara think about what is required to have such premium pricing?

4. How to Master the Second Product & Be the Best at Customer Success:

When is the right time to do a second product? Why is it too late to wait for PMF with your first product to do the second product?
What product did ServiceTitan wait too long to release? What did they learn?
What product did they release too early? What did they learn?
What are the two core reasons why customer success is the most important element in a business?

5. The Core Pillars of Great Leadership:

Why do product builder founders have such an increased chance of success in startups?
Why do you have to have expertise in the domain you are hiring for to hire the best?
What does truly great leadership mean to Ara today? How has his style of leadership changed?
What has Ara learned from soccer that he has applied to being a CEO?

Transcript

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0:00.0	Great leadership is about one thing.
0:01.8	Deliver extraordinary outcomes.
0:03.3	That typically involves one decision about where to play.
0:06.8	Successfully executing where to play involves hundreds of great decisions on execution.
0:12.6	You are listening to 20 VC with me, Harry Stebbings, and if you did not know, I'm probably the biggest vertical SaaS nerd there is.
0:19.2	With that in mind, Service Titan is likely one of the
0:22.3	best companies that you might not know much about. They are one of the greatest vertical
0:27.0	SaaS companies of the last decade. They serve over 11,800 trade partners, have raised
0:33.8	$1.4 billion from some of the very best in the business, including Bessemer and
0:39.4	index, and their latest valuation was a whopping $7.4 billion, reportedly. With that, I'm so excited
0:46.9	to welcome Service Titans co-found and CEO Aaron Medesian to the Hot Seat today. This is an incredible
0:53.0	discussion. It's time to take out the notebook.
0:56.0	But before we dive in today, all of you listening use tons of software every day. Sometimes it
1:01.0	fills us with rage. You can't figure something out. The chatbot in the bottom right is
1:04.9	useless. You keep getting bombarded with these useless pop-ups. And for those of you who build
1:09.7	products, no one wants their product to feel like this.
1:12.6	Thankfully, a company exists to help users without annoying them.
1:15.6	Command Bar. It does a couple of very helpful things.
1:18.6	First, it's a chatbot that uses AI to give users extremely personalized responses and deflect tickets.
1:24.6	But it can be beyond just text.
1:26.6	It can also co-brows with the user and show them how to do things inside the UI. Magic. But it can also detect when users would benefit from a proactive nudge, like a helpful hint, or an invitation to start a free trial. Commandbar is already used by world-class companies like Gusto, Hashikorp, Yotpo and Angelist. If you're a product CX or marketing
1:45.8	leader, check them out at command bar.com slash harry. And talking about incredible companies with
	...

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