In this episode, we dissect the explosive growth in the software industry as revealed by the G2 Quarterly State of Software report. With over 75,000 more software companies existing today than in 2018, the challenge of demand generation has intensified. We also explore the effectiveness of ecosystem-led growth while fighting to generate demand. Furthermore, we delve into the delicate balance of home and work life and the importance of being an empathetic leader while maintaining professionalism. The episode concludes with the Nvidia CEO's candid reflection on the challenges of entrepreneurship.
Let's dive into the three key topics discussed in this episode…
G2’s State of Software Report and the Rise of Ecosystem-Led Growth:
The G2 quarterly state of software report indicates that the number of software companies has grown from less than 50,000 in Q3 2018 to 125,000 in Q2 2023. This shows a growth rate of about 7% per quarter.
With the increase in the number of software companies in existence, creating demand is more challenging due to increased market noise and higher interest rates. It reportedly now takes 1000 to 1400 touchpoints to generate an opportunity, compared to 400 touchpoints five years ago.
According to Crossbeam, ecosystem-led sourced deals are 53% more likely to close and 58% less likely to churn.
In an article by Jason Lemkin, he found low attach rates when working with partners. But this article and the data are from over ten years ago. The ecosystem has changed.
Partnerships play a key role in generating demand for Pavilion, particularly as outbound as a channel has become more difficult.
To have a product or service that can scale through word-of-mouth recommendations, it is crucial to develop a great product that leaves customers satisfied.
Sales Talent Agency (Asad’s company) has also shifted from an outbound sales team-driven structure to relying heavily on partnerships due to inbound leads and existing customers.
Background: Jason Lemkin shared a LinkedIn post discussing that due to the ever-changing SaaS environment since 2020, people often are misplacing feelings of tension towards home life on their work. It's important to differentiate between issues at home and work and not make hasty career decisions based on unhappiness without thoroughly assessing the situation.
Due to the shift to remote work, lines have blurred between home and work, and, as a result, there has been an increase in discussing one’s personal life in the workplace.
The role of a modern leader now requires you to understand your team members' situations, promote psychological safety in the workplace, and foster open dialogue.
However, the extent to which a leader can and should be involved in their teams' personal lives should be limited. There is a need to set boundaries because, as a leader, you are not a therapist and should maintain a somewhat removed role from an employee’s personal life. But, to foster empathy in the workplace, a leader should be transparent and vulnerable.
A good example of being an empathetic leader while maintaining professional boundaries is from Kim Scott, author of Radical Candor. She had an employee who started treating her like a therapist. She noticed in every 1x1 with this person, they would start crying. Kim Scott had an idea where she removed the tissue box from her office so that when the person started crying, she would leave the room to grab tissues while giving them a couple of minutes to collect themselves before returning.
Background: Nvidia’s CEO, Jensen Huang, admits during an interview with Acquired that if he knew what he knows now about starting a company, he wouldn’t.
AJ stated that, without a doubt, he would start a company again, while Sam feels unemployable and therefore has no choice but to continue as a company founder.
Asad shared that being a CEO was easier than he had thought initially. However, he highlighted that the complexity of managing a company grows with the size of the company, which doesn't necessarily get easier over time. Suggesting that years of experiencing these pressures and challenges might have influenced Nvidia's CEO's statement.
Asad Zaman feels the Nvidia CEO's discussion was twisted into a clickbait-like story, missing the actual context about the toll this might take on a person.
Sam shared his strategy of focusing more on the profitability of Pavilion than growth, which he believed would lower his stress levels and enable him to stay in the game longer.