# Top 10 in Tech - What to know for Week ending December 6, 2024

Published: 5 December 2024
Canonical: https://www.top10in.tech/posts/week-ending-december-6-2024

## 1. SaaS METRIC OF THE WEEK: CAC PAYBACK

The 'payback' period is the nuance of why we measure CAC. How long until we break even? Benchmark-wise, the negative trough is way longer than you think, so take a seat! New B2B customers, on ***average***, [take 2 years and 2 months](https://www.dropbox.com/s/z3tedek2i7ejen8/7%20%20-%20CAC%20PAYBACK.png?dl=0) to become profitable. This really highlights a deepening dependency on access to capital to fund a SaaS company's growth through these [SaaS Cash Flow troughs](https://www.forentrepreneurs.com/saas-economics-1/). BONUS: [Here are last week's CAC Payback benchmarks](https://www.dropbox.com/scl/fi/kels2cqmzrgleyi0iswwy/CAC-PAYBACK.jpg?rlkey=6bqrtzekuwfsi3ngbevzoafmf&dl=0).

Link: https://www.dropbox.com/s/z3tedek2i7ejen8/7%20%20-%20CAC%20PAYBACK.png?dl=0

## 2. FUNDRAISING METRICS

Take a read and a bookmark of this [guide to SaaS metrics for fundraising](https://wrap-text.equals.com/p/saas-metrics-for-fundraising) that breaks down the essentials. The big idea here is to build a "data deck" that answers investor questions upfront, focusing on what they perceive as important metrics like MRR, CAC:LTV, and churn patterns to demonstrate profitability and scalability. BONUS: [Here is a guide](https://medium.com/m8-ventures/the-dos-and-don-ts-of-startup-investor-reports-77be586f1bca) on what should be included in investor reports.

Link: https://wrap-text.equals.com/p/saas-metrics-for-fundraising

## 3. CUSTOMER OPERATING SYSTEM

What exactly ***is*** the difference between Customer Success and Customer Support? [Get started here](https://blog.totango.com/2020/10/customer-success-vs-customer-support-what-are-the-differences-fc) to understand the nuances, they are both part of the same customer journey spectrum, and [Totango](https://www.totango.com/) posits, [in this recent SaaStr Annual presentation](https://www.youtube.com/watch?v=63fsg2Ha39A), that we need a fresher look at Success and Support that they coin the "Customer Operating System" (Like the presso? [Here are the Google Slides deck](https://docs.google.com/presentation/d/e/2PACX-1vTWX7PAduzydSRYf3xtrDdSb-k6-zvGaJMkv-6_ebTML3Dk68c3HWgdIHn5f924bjClTheAxX90pv4m/pub?start=false&loop=false&delayms=3000&_hsmi=94995844&_hsenc=p2ANqtz--XE7fEBjetFNx0zVOD5vrOJogrdF0FrFciO3xVh71RVEzkRfeA45RZJnPzOnq_J6IxrTji9SfDBnLiqh0tYdLEfi4Jmw&slide=id.g63bb278342_0_210)).

Link: https://blog.totango.com/2020/10/customer-success-vs-customer-support-what-are-the-differences-fc

## 4. PRICING

The title of this article says it all -[5 SaaS pricing mistakes you're probably making](https://openviewpartners.com/blog/5-saas-pricing-mistakes). Stop lowballing! Pick the right metric, make purchasing easy, optimize upsells, and keep pricing dynamic.

Link: https://openviewpartners.com/blog/5-saas-pricing-mistakes

## 5. EQUITY

This is a very bookmarkable series from Femstreet that covers the startup founder's guide to equity. Don't worry about Part 1 - it's a very basic primer. The [good stuff starts in Part 2](https://femstreet.substack.com/p/keepingyoursliceofthepiepart2) and covers the different types of equity at a startup (founder, investor, vesting, liquidation, pro-rata, etc etc.), and [Part 3](https://femstreet.substack.com/p/keepingyoursliceofthepiepart3) - covering cap tables and things you can do if they are messy.

Link: https://femstreet.substack.com/p/keepingyoursliceofthepiepart2

## 6. VENTURE-STRAPPED

I googled this term already, and it's unique! It's my term for your tech dictionaries for a hybrid startup that is a mash-up of the old debate of [bootstrapped vs. VC financing](https://www.pitchdrive.com/academy/exploring-pros-and-cons-bootstrap-vs-venture-capital-for-startup-financing) and applies to startups that raise only once. This anecdotally seems a [more common practice](https://www.linkedin.com/pulse/one-and-done-fundraising-startups-aki-kakko-kcf5f/?trk=public_post_main-feed-card_feed-article-content) in these [new market conditions](https://bryce.medium.com/one-round-and-done-197e5dd167be) (including Klaviyo and Zapier). Jason Lemkin notes this new [one-and-done third way](https://www.saastr.com/venture-backed-theres-a-third-way-just-raise-one-round/).

Link: https://www.pitchdrive.com/academy/exploring-pros-and-cons-bootstrap-vs-venture-capital-for-startup-financing

## 7. AI INVESTMENTS

Menlo Ventures' new [report highlights a significant shift in enterprise AI adoption](https://menlovc.com/2024-the-state-of-generative-ai-in-the-enterprise/). AI spending is now at approx $13.8 billion, which is up 6x from 2023. 60% of these investments are from innovation budgets, while 40% are integrated into permanent allocations. Enterprises are exploring an average of TEN AI use cases, with 24% prioritized for near-term implementation.

Link: https://menlovc.com/2024-the-state-of-generative-ai-in-the-enterprise/

## 8. VERTICAL SAAS

A lot of Big Tech is under threat from narrowly focused SaaS companies taking market share in niche areas and building massive businesses. Vertical SaaS isn't new ([the difference between vertical and horizontal SaaS here](https://www.koombea.com/blog/vertical-horizontal-saas/)), but look at [how these vertical SaaS companies are taking market share from those cloud giants](https://www.protocol.com/enterprise/vertical-saas-platform-industry-cloud) and how [AI and Vertical SaaS](https://medium.com/point-nine-news/will-ai-accelerate-vertical-saas-adoption-2889de09f936) are the outliers to [achieving solid growth in this current market](https://openviewpartners.com/wp-content/uploads/2023/10/Chart-3.png).

Link: https://www.koombea.com/blog/vertical-horizontal-saas/

## 9. FOUNDER VESTING

This is a great one for all you founders. Four-year vesting schedules are standard for many founders (and they are still vesting during early funding stages). But with [the time between stages now being longer](https://www.dropbox.com/scl/fi/vpqgottpmjuio8unoxwn3/time-between-stages-now-being-longer.webp?rlkey=amw2k7h2njohq95nn46ba12yt&dl=0), after this traditional 4-year phase, [Investors are now pushing for re-vesting to ensure long-term commitment and minimize "dead equity."](https://www.newsletter.datadrivenvc.io/p/founder-vesting-benchmarks-what-to)

Link: https://www.dropbox.com/scl/fi/vpqgottpmjuio8unoxwn3/time-between-stages-now-being-longer.webp?rlkey=amw2k7h2njohq95nn46ba12yt&dl=0

## 10. CASE STUDY

Everyone loves a good old Pivot story - expanding on #6 above, here are 5: [The Hidden Backstory of 5 Startup Pivots That Grew to $43B](https://www.jasonshen.com/115/) including Lyft and Discord and also [a "definitive" Pivot list](https://x.com/lennysan/status/1787855294921679095) from Lenny of Lennys Newsletter (see below for more)

Link: https://www.jasonshen.com/115/

## POD OF THE WEEK

Expanding on #8 above**, [why vertical SaaS is booming](https://youtu.be/51-lKAsrllE)**, and how to get 110% NRR from SMBs, with Jason Lemkin and the CEO of Mangomint.

Link: https://youtu.be/51-lKAsrllE