Episode 147:Chris Cabrera – The Unicorn Fallacy Reality Check for SaaS Leaders

Today in the SaaS Fuel Founder Episode, Jeff sits down with Chris Cabrera, the brilliant mind steering the ship at Xactly. In this power-packed episode, we're not just scratching the surface; we're taking a deep dive into Chris' remarkable journey.

From the wild waves of early-stage ventures to navigating the complexities of public companies. We're unpacking the highs, the lows, and those elusive “Aha!” moments that shaped his path to success.

Between steering Xactly and crafting his art, Chris manages to find time for his passion project—Cabrera Cellars. And he just dropped his latest masterpiece, “The Unicorn Fallacy”. We're dissecting the myth of unicorn success in the SaaS universe, separating fact from fiction, and uncovering the gems that can redefine your perspective on success.

Key Takeaways

00:00 Public role is unfulfilling; prefers to focus on customers.

05:41 Cloud company learned from past, strategic acquisitions.

09:38 Started small, raised flag, symbolizes early days.

12:18 The Company values a humane approach, and welcomes returning employees.

14:30 Lessons learned from the pursuit of unicorn valuation.

19:19 Unicorns led to wrong focus and failure.

22:10 Importance of achieving the “rule of 40”

25:21 Anticipate growth and build balanced infrastructure for sustainability.

31:25 Salesforce is a longtime customer with forecasting issues.

33:16 Machines with data change forecasting game. Embrace technology or risk obsolescence.

38:19 DirectTV customers have opportunities to change plans.

42:29 Finding mental escape through art and activities.

45:55 Adapt to obstacles, roll with life's punches.

47:51 Find unicorn fallacy on a website or Amazon.

Tweetable Quotes

“Let's buy companies that make sense to our strategy, let's buy technologies that fit into our core technology so that they're additive.” — Chris Cabrera 00:06:12

“The whole point of the unicorn fallacy is exactly that focusing on the valuation drove companies and even investors to do dumb things And to build the company in the wrong way.” — Chris Cabrera 00:19:49 

“And so if you can create the machines to have enough data, and we have all these 20 years of data to allow them to do this pattern recognition, it changes the whole game on how forecasting is done.” — Chris Cabrera 00:33:16 

“I've thought for a long time, we gotta change the definition of unicorn to a profitable SaaS company. Yeah. Those are a whole lot more rare than ones that are valued at $1,000,000,000 or more, but fundamentals matter, and they always have.” — Jeff Mains 00:24:11 

“Fundamentals have always mattered, and I'm glad to see they're starting to be valued again. That's how you build a future-proof company. That's how you manage the high tides and the low tides because they're coming.” — Jeff Mains 00:27:30

“I think you do build differently as a leader, whether it's a short term, build this and flip it, versus building for something that does have long term potential.” — Jeff Mains 00:29:51

SaaS Leadership Lessons

1. Emphasize long-term value: Focus on building a SaaS company for sustainable, long-term success rather than solely for a potential sale. This includes prioritizing customer satisfaction, employee loyalty, and product excellence.

2. Utilize technology for forecasting: Embrace AI and machine learning for accurate revenue and expense forecasting. This allows for informed decision-making and the alignment of sales strategies with long-term corporate goals.

3. Align compensation with company goals: Integrate technology into the compensation system to incentivize longer-term deals and align compensation with the company's broader strategic objectives.

4. Balance growth and profitability: Strive for sustainable growth and EBITDA margins, rather than solely pursuing high growth and low profitability. Achieving a balanced “rule of 40” fosters long-term sustainability.

5. Focus on quality investors: Prioritize the quality and caliber of investors over solely pursuing the highest valuation. This ensures support during challenging economic times and underscores the importance of trustworthy and supportive investors.

6. Embrace technology integration: When acquiring new technologies, focus on seamless integration with existing products and alignment with the core strategy to create a cohesive and valuable SaaS platform.

7. Foster employee loyalty and second chances: Develop a culture of loyalty by welcoming former employees back, emphasizing the value of second chances, and maintaining strong relationships with team members.

8. Personal growth and mental escapes: Encourage CEOs to find mental clarity and relaxation through outside activities and hobbies, recognizing the value of personal growth and balance in leadership.

9. Learn from failures and adapt: Embrace failures as learning opportunities, adapt to unexpected challenges, and seek guidance from experienced individuals to navigate the entrepreneurial journey.

10. Challenge the unicorn fallacy: Question the fallacy of solely focusing on high valuations, and instead emphasize the importance of building a balanced, sustainable company with profitable growth and a focus on fundamental strengths.

Guest Resources



Resources Mentioned






Episode Sponsor

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