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

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

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Jul 10, 2024

Ara Mahdessian, Co-founder and CEO of ServiceTitan, shares insights from building a $7.3BN vertical SaaS powerhouse. He discusses the early decision to delay VC funding and how that shaped their success. Ara reveals the key lessons learned in transitioning to enterprise markets, including critical product and organizational changes. He also outlines effective branding strategies for premium pricing and the challenges of launching new products. His journey emphasizes resilience, storytelling, and the importance of timing in the ever-evolving tech landscape.

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INSIGHT

Earning Premium

Premium pricing must be earned through delivering exceptional value and ROI, not just branding.
ServiceTitan didn't aim for premium pricing; they aimed for a no-brainer buying decision.

INSIGHT

Building Brand

Brand in vertical SaaS is built through customer interactions and perceived success, not just marketing.
ServiceTitan's brand organically became synonymous with success in the contracting industry.

ADVICE

Customer Success

Prioritize customer success; it's crucial for referrals, close rates, and upselling.
Customer success is influenced heavily by the product's ability to deliver ROI.

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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?