Why Operating Advisors

Ken Shih, Head of Wealth Management Greater China at Saxo Markets / Saxo Bank, once posted an interesting overview of the different investment stages available to companies:

Basically, private equity (PE) funds need a faster return on their investment then venture capital firms (VC) and thus, none-withstanding the more advanced maturity of the company they invested in, they are pushing heavily for a more predictable journey towards growth and efficiency.

Sherin Maruhn made a related observation, in that VC is stepping away from spray and pray methods and acting more along the PE playbook: owning, operating, and transforming companies with AI, less passive capital and more active control.

How do these observations come together?

1. VC and PE operating models are converging, with a focus on shorter holding periods and more in-depth involvement including greater collaboration between portfolio companies.
2. Market conditions require us to find the right balance between growth & profitability. With B2B SaaS growth in a cooling phase, it’s time to double-down on our focus on profitability and working capital efficiency.

For B2B SaaS, the related drivers are very well-known:

• Focus and deeply align marketing, sales, customer success and product
• Efficientize customer acquisition and LTV/CAC ratio
• Prioritize net revenue retention (NRR)
• Focus on high-margin revenue streams (i.e. True Single-product Multi-tenant SaaS)
• Optimize pricing strategy (in line with customer’s willingness to pay)
• Streamline operating expenses, including (up/down) scalable and cost-efficient infrastructure

None of this is new, it’s the deep sense of urgency and necessity that requires a new breed of operating advisors. You can’t work on 6 drivers in parallel on a reduced timeframe as an advising board member or consultant, you need experienced feet-on-the-ground in all domains, of marketing, sales, customer success, and of course product and engineering.

What does experience mean?

Experience should be primarily grounded in actual operating experience, feet-on-the-ground, not only by number of board seats held or education/network background. You need actual operating experience for providing credible and actionable advice to companies, and you need your feet on the ground to commit to results: fast(-enough) transition and lasting impact.

Operating advisors should also not be single-minded specialists but firmly T-shaped profiles, as in a typical software company all departments and specializations are (or should be) deeply interconnected.

Operating Advisors

Operating advisors are professionals who combine deep operational experience with advisory capabilities.

They bring hands-on experience from scaling or efficientizing B2B SaaS companies, understanding the complexities of growth, profitability, and market dynamics. Their value lies in the ability to not just advise, but to actively drive transformation and improvement across key business functions.

What sets Operating Advisors apart is a commitment to measurable outcomes and a capability to work inside teams to implement changes, not just recommend them. This hands-on approach is particularly crucial in today's market environment where time-to-value is of critical importance.