·Business & Strategy
Section 1
The Core Idea
Christoph Janz published a blog post in 2014 that became one of the most referenced frameworks in SaaS investing. The title was simple: "Five Ways to Build a $100 Million Business." The insight was simpler still. There are exactly five types of customers a SaaS company can pursue, and each type dictates a completely different company — different sales motion, different team structure, different capital requirements, different failure modes. Janz named them after animals, ranked by size. The framework stuck because the metaphor was instantly legible: you are a hunter. What are you hunting?
The five animals. Elephants are $100,000+ annual contracts — enterprise deals sold by experienced account executives over six-to-twelve-month sales cycles. You need 1,000 of them to reach $100M ARR. Salesforce, Workday, and Palantir hunt elephants. Deer are $10,000 contracts — mid-market deals closed by inside sales teams over weeks, not months. You need 10,000. HubSpot and Zendesk started here. Rabbits are $1,000 contracts — self-serve products with light-touch sales assist. You need 100,000. Atlassian built a $50 billion company hunting rabbits with zero outbound sales reps for its first decade. Mice are $100 annual subscriptions — consumer or prosumer products that acquire users through marketing and product-led growth. You need 1,000,000. Spotify, Evernote, and Grammarly live here. Flies are $10 transactions — micro-purchases, ad-supported revenue, or per-transaction fees. You need 10,000,000. WhatsApp charged $1 per year. Google monetises through ads at pennies per interaction.
The framework's bite is in what it reveals about misalignment. A founder building a $1,000/year product with a six-person enterprise sales team is hunting rabbits with an elephant gun — the unit economics will never close. A founder building a $100,000/year product and relying on viral growth is hunting elephants with a flyswatter — the product will never reach the buyers who can write that cheque. The animal you hunt determines the company you must build. Not the other way around. The product does not choose its go-to-market. The go-to-market chooses the product. Janz's framework forces founders to confront this dependency before they burn two years and $5 million building the wrong distribution machine.
The deeper pattern: each animal size carries its own physics. Elephants tolerate complexity, require customisation, and demand white-glove service — but they pay enough to justify the cost. Flies tolerate zero friction, demand zero human interaction, and will abandon the product at the slightest inconvenience — but they arrive in volumes that make individual behaviour irrelevant. The mistake is not hunting a particular animal. The mistake is building a product that sits between two animals — too expensive for self-serve, too cheap to justify a sales team — and discovering that no go-to-market motion produces sustainable unit economics at that price point. The space between the animals is where startups go to die.
