# Top 10 in Tech - What to know for Week ending August 16, 2024

Published: 15 August 2024
Canonical: https://www.top10in.tech/posts/week-ending-august-16-2024

## 1. SaaS METRIC OF THE WEEK: RULE OF 40

Back in 2021, OpenView observed that "investors have forgotten all about the [Rule of 40](https://twitter.com/PointNineCap/status/1108374783262158849)." Last year's response: the Rule of 40 is "[back from the dead](https://www.dropbox.com/s/aer76d3cq20f0z3/3%20-%20Rule-of-40-public-companies.png?dl=0)." This year, it's [increasingly essential but a very tough bar to continually achieve](https://www.dropbox.com/scl/fi/6i8iacj9v18z4a02vtnae/Rule-of-40.png?rlkey=mvfzcc41d2pa51bdo6797ixa0&dl=0)Quarter on Quarter (but see #3 below).

Link: https://twitter.com/PointNineCap/status/1108374783262158849

## 2. JTBD

[Jobs to be Done](https://jobs-to-be-done.com/what-is-jobs-to-be-done-fea59c8e39eb) is one of my favorite frameworks. It makes the innovation process accessible and tangible in very pragmatic ways. Take a [deeper read here](https://firstround.com/review/build-products-that-solve-real-problems-with-this-lightweight-jtbd-framework/) on a lightweight JTBD framework—broken down with real-world business examples—or [skip straight to the templates](https://docs.google.com/document/d/1NmKemkMOJh4DVLmTMhVUgLjG9i0_-5mqsEdCQcYH6wI/edit?usp=sharing).

Link: https://jobs-to-be-done.com/what-is-jobs-to-be-done-fea59c8e39eb

## 3. PROFIT MARGINS

Great Rule of thumb from CJ Gustafson at Mostly Metrics this week, who states, "[*Make sure your target model shows +25%" bottom line at scal*](https://www.mostlymetrics.com/p/mostly-multiples-811-the-quest-for)[e](https://www.mostlymetrics.com/p/mostly-multiples-811-the-quest-for)." This Rule is excellent for a number of reasons: It demonstrates a sustainable business model (not just a business with a revenue model), you can still plow 30% of revenue into sales and marketing, and you only need to grow 15% per year to achieve the Rule of 40% (see #1 above). Keep reading the article; he also outlines a few businesses with varying profitability ranges.

Link: https://www.mostlymetrics.com/p/mostly-multiples-811-the-quest-for

## 4. AHA!

Not talking about the Band. Take a look at this great read on [product design centered on discovery](https://www.getbeamer.com/blog/aha-moment-for-saas) - what the author references as "Aha moments" - through a customer journey from first encounters through to deep adoption that really focuses on the concept of long-term retention. Go-Practice has a [great complimentary article on how to design for Aha](https://gopractice.io/product/how-aha-moment-and-the-path-to-it-change-depending-on-the-use-case/) (with examples).

Link: https://www.getbeamer.com/blog/aha-moment-for-saas

## 5. CLOUD 100

Bessemer Ventures/Forbes created a "Cloud 100" list a few years back, an annual ranking of the world's top private cloud companies in its ninth year. [The 2024 list is out](https://www.bvp.com/atlas/the-cloud-100-benchmarks-report), and things had already started to look different last year with the first-ever drop in overall aggregate value. This year saw a bounce back to [strong valuations](https://www.bvp.com/assets/uploads/2024/08/FINAL-SLIDE-6-5-Aug-vF-C100-Benchmarks-2024-redesign-v6-min.png) (median valuation of $1.7B), with companies staying private for longer (but demonstrating sustainable growth at scale - see #3 above). These top cloud companies had a median ARR of $170M and [multiples at 23x](https://www.bvp.com/assets/uploads/2024/08/Multiples-reset-final-redesign-5-Aug-vF-C100-Benchmarks-2024-redesign-v7-min.png). FUN FACT: A former [Bessemer Ventures Alum just won 2 Olympic Gold Medals](https://en.wikipedia.org/wiki/Kristen_Faulkner) for the U.S. in Cycling after picking up a bike for the first time in 2017.

Link: https://www.bvp.com/atlas/the-cloud-100-benchmarks-report

## 6. VENTURE 1

Last month, [according to Crunchbase](https://news.crunchbase.com/venture/monthly-funding-recap-july-2024/), VCs invested $23B+ into startups, it's a slight dip from June but a 20% rise YoY. Healthcare and biotech led ($6B), while A.I. funding at $5.8B (but this doubled for Q2). A.I. companies are absent from billion-dollar acquisitions as tech giants are opting for strategic licensing instead for now (to bypass regulatory hurdles).

Link: https://news.crunchbase.com/venture/monthly-funding-recap-july-2024/

## 7. VENTURE 2

PitchBook just [released its quarterly U.S. Valuations Report](https://files.pitchbook.com/website/files/pdf/Q2_2024_US_VC_Valuations_Report.pdf) and, as [reported last month](https://www.top10in.tech/top-10-in-tech/top-10-in-tech-what-to-know-for-week-ending-july-19-2024), there are a bunch of mixed signals: Flat and down rounds hit a decade high; median valuation growth for early-stage A.I. is a whopping 115% (see #9 below), which probably helped the average early-stage valuations to nearly double from 2023 ($169m)

Link: https://files.pitchbook.com/website/files/pdf/Q2_2024_US_VC_Valuations_Report.pdf

## 8. A.I.

Always lots going on, but [are we in an A.I. bubble yet?](https://kelvinmu.substack.com/p/ai-are-we-in-another-dot-com-bubble) (there is definite over-investment, but maybe not a bubble yet.). [Here is an estimated breakdown of OpenAI's revenue](https://futuresearch.ai/openai-revenue-report) (55% B2C, 21% from B2B, and 15% B2D). But Chat A.I. [isn't at PMF yet](https://www.ben-evans.com/benedictevans/2024/7/9/the-ai-summer?), even though [70% of us use it all the time](https://www.saastr.com/of-you-use-chatgpt-for-work-all-the-time).

Link: https://kelvinmu.substack.com/p/ai-are-we-in-another-dot-com-bubble

## 9. GLOOM BOOM

Andrew Chen makes the case that [starting a company in a recession is super advantageous](https://andrewchen.substack.com/p/boom-time-startups-vs-gloom-time). There is less competition, lower costs, more focused investors, etc. Founders can build stronger, more sustainable businesses and also be positioned for serious success when the market recovers.

Link: https://andrewchen.substack.com/p/boom-time-startups-vs-gloom-time

## 10. CASE STUDY

[This article showcases Hootsuite's effective content repurposing strategy](https://foundationinc.co/lab/hootsuite-content-repurposing). By converting existing material into many diverse formats unique to different platforms, Hootsuite maximizes its reach efficiently. Proactive content repurposing is a great brand approach to helping Marketers with #3 above: sustained and capital-efficient engagement and reach.

Link: https://foundationinc.co/lab/hootsuite-content-repurposing

## POD OF THE WEEK

A great podcast featuring [Brian Halligan, co-founder and former CEO of HubSpot](https://www.youtube.com/watch?v=Nsfx_7PqVYo) - *consensus is the enemy of scale* and other great snippets!

Link: https://www.youtube.com/watch?v=Nsfx_7PqVYo