Clay raised $46M at $500M valuation; here's my prediction...

They'll need to triple or double revenue the next few years. 

Their product seems hot competitively now. 

So the first year will probably be a honeymoon period. 

They'll hire lots of salespeople and acquire lots of users. 

They have 2,500 customers (accounts) today and 100k users.

Many users are probably unpaid so their challenge today is conversion.

Around 6-12 months from now the space will get hyper competitive. 

Existing competitors will copy whatever makes Clay unique today. 

Then it becomes a battle on price.

That's where things will get super difficult. 

That's where SaaS becomes a tremendous gamble. 

It's a race to the top before commoditization. 

They have all the pieces in place to win big (and I hope they do). 

But with $46M in venture capital comes huge revenue expectations. 

What seems obvious is to eventually eliminate their freemium tier.

Or reduce it to a limited time free trial to force conversions. 

The problem is around the time they'll decide to do that will be when competitors release comparable products at competitive prices. 

My advice? 

Don't over-hire, no matter how much pressure investors apply. 

The sales demand today is exciting but it will get dispersed across a competitive landscape over the next 6-12 months. 

If your team is at capacity today, don't expect it to stay that way. 

Once you raise big capital, you quickly attract competitive forces. 

Id' stay lean because if you can outlive competition, you'll win. 

Burn less of that capital upfront with overly aggressive headcount growth. 

Instead prioritize capital toward keeping the product ahead of competition.

If competition catches up with product the hype will dissipate, layoffs will ensue, and a down-round becomes more likely. 

Product, product, product. 

It's on top now, so prioritize keeping it there. 

Do that instead of hiring hundreds of salespeople only to fire them in 9 months. 

Play the long game no matter how tempting it is to move fast.

Happy Selling,