FORECAST
Great article and excel download from The SaaS CFO - A SaaS Financial Plan for Startups and SMB’s. It also comes with a handy complimentary video tutorial to the worksheet.
Top 10 in Tech - What to know for Week ending August 23, 2019 INSTAGRAM
SEED FUNDING
Tomasz Tunguz takes a look at the current state of seed funding to determine which categories of startups are thriving and which aren’t. WHAT’S HOT: AI, Blockchain, FinTech, Food and Beverage and Software. COOLING: Advertising, Analytics, Big Data, and Social Media.
RECURRING REVENUE
It’s a great business model for building out predictable revenues as long as you are not a gym (which sit at an industry average of about 30% churn). That predictability also takes a hit that when subscriber growth is driven by Stranger Things, Game of Thrones or The Hand Maiden Tales. The research team at The Information take a look at streaming TV revenue growth - specifically at Netflix as it relates to stock price and forward multiples (they are calling a 4x multiple for Netflix in comparison to SaaS industry average of 5.2)
FINTECH
Here is the 2019 H1 report from KPMG. It’s been a quiet start for fintech investment globally and Blockchain/crypto technology investment has returned to the levels of 2014-2016 following a two-year hype period.
EXPANSION
Growth is not just about acquisition. Far from it. As mentioned in prior newsletters, improving retention or monetization can actually impact growth 2-4x more effectively than improvements in acquisition. (see slides 41-46 for the real nuggets). Tips on how to optimize this via renewal available here. But I really enjoyed reading this working example of what that means to a companies growth and revenues from a product perspective from the company Buffer.
MODERN WORK
The Industrial Revolution 4.0 is apparently coming and Slack is a company with products that have reinvented a large digital part of how modern workers choose to work, collaborate, and communicate. Slack are focused on being a thought leader in this new state of (modern) work, so they embarked on a global survey of about 17,000 knowledge workers and came up with some fascinating insights around alignment. Starting with the fact that organizations need to communicate their corporate strategy at least once a month to keep employees engaged and drilling into stats such as optimal number of meetings/day (no more than 4) and the loss of hours per person/per year simply by time spent switching between applications (it’s 130 hours!). PDF Version of report here
STARTUP CITIES
Yes, San Francisco is still the primary geographic location to nurture a fast growing tech company. But, unlike a lot of disaster movies, the tech world doesn’t end at the Golden Gate Bridge. Three things here: 1. From Inc Magazine comes a list of the top 10 US Startup Cities, 2. In a more extensive global report are data on over 200 exists from 17 Cities around the world. (Nearly every month for the last ten years, a tech company has been acquired or gone public for over a billion-dollars from outside the SF Bay Area) 3. The Startup Ecosystem report from StartupBlink (NZ Ranks 26th - room to move!)
PRODUCT MARKET FIT
From Y-Combinator this is a great (but 50 minute long) presentation on how to measure product-market fit via high fidelity data. Slides here if you can’t watch - which have really insightful charts and examples.
VALUE
The test of long-term success for a modern tech company is with their ability to demonstrate value to customers - which can determine whether a startup can continually generate waves of success that are sustainable. TL:DR Here is a playbook on mastering the art of successful customer outcomes.
Feel like the amount of ads in your feed have increased? Well they have (pretty much doubled) since 2018. This article from The Information is a fascinating deep dive behind the (tense) scenes at Facebook and Instagram over the past 18 months.