Top 10 in Tech - What to know for Week ending February 19, 2021

SaaS METRIC OF THE WEEK

NRG - Natural Rate of Growth. Now that I’ve slow-burn convinced a bunch of people subscribed to this newsletter to go all-in with Product Lead Growth (PLG), it’s time to reference the metrics you need to know. It requires us to get halfway through this article before that becomes clear. But hey - it’s totally worth the scroll. With Natural Rate of Growth (NRG), the assumption is that a PLG business has an organic, self-service growth engine at their core (because they’re built to attract the end-user). Keep reading as the article comes complete with benchmarks towards the bottom. Hungry for more best-practice PLG metrics? I got ya!

DEATH TO SAAS

Made ya look! Last week I discussed the challenges of adding value via data into pricing for a subscription/SaaS company - This TechCrunch article takes this premise further highlighting that many SaaS Companies are shifting to usage-based models (full confirmation-bias disclosure - I operate a hybrid pricing model).

EMAIL (deep dive)

On the non-PLG end - Cold email outreach is a go-to modern-day sales tool but this method historically has very low response rates (1% for cold emails historically but it dropped below 1% for the first time in 2019!). 1. Jason Bay has some spot-on methods to optimize responserates, 2. Predictable Revenue has thisPowerPoint deckon the four pillars they think constitutes a quality sales-based email campaign. 3. This is a quality case study for anyone with email marketing as part of their businesses - a deep dive into a single cold email and why the author actually opened it (TL;DR - yes it’s all about everything in the emails design, but its more about how targeted the message is). 4. So here (from LeadIQ) is their 3-step guide to getting noticed by email.

PRICING FEATURETTE

Adding on from last week (as it was a popular post) - FUN FACT: On average, a 1 percent price increase translates into an 8.7 percent increase in operating profits - but optimizing Pricing is hard and it’s never (ever) perfect. a) If companies decide to have a pricing page on their site (which is a whole other topic), Jason Lemkin, the founder of SaaStr, lays out some thoughts of what makes a good pricing page. b) McKinsey gets technical, outlining how toleverage big data to make better pricing decisions. c) Want to look at competitor prices? Comptera has a great article on how to conduct a high-fidelity competitive pricing analysis project.

SALES

This article challenges us all to sell something bigger than your boring ass product. It’s similar to the mindset of "The Jobs That Need to be Done” discussed in earlier posts, making the point that the true sales value is something that genuinely helps users get better or more successful at what they do.

FOUNDERS

A great (but uncomfortable for many) article on the lessons learned through the journey of a startup……..which may not end with a founder in charge: "A founder creates something from nothing. A CEO manages something that already exists. They’re two totally different jobs"

BOOTSTRAPPED

Bootstrapping is a perfectly awesome approach to growing a startup or tech company, so take a read of the latest State of Independent SaaS Report based on hundreds of non-venture track, revenue-generating SaaS companies. It has really great Bootstrapped benchmarks: growth rates, demographics, validation approaches, and more......and from Pierre de Wulf are 6 (wise) things I wish I knew before I bootstrapped my first SaaS startup.

VENTURE CAPITAL

The Ying of the #6 Yang above - While bootstrapping (I've been there) is a very noble approach, more often than not, some kind of Venture Capital is needed to help fund growth and development. In last year's KeyBanc SaaS report, only 14% of companies surveyed were Bootstrapped or Independent. This report also found that VC-backed businesses demonstrate better growth, but at the total expense of margin. Correlating these deal size categories to forecast growth highlights that the low end of town retained the best forecast for (25% growth). TL;DR - Growth rate really matters to VC's and you need to understand exactly why. This article, by Jason Calacanis, lays out why VC firms aren’t focused on slow/modest growth startups.

PRODUCT

This one is for all you product managers. Lenny Rachitsky has curated a list of templates and frameworks for Product Management (there are also a bunch of others in there too) - definitely a bookmark-able page! If you are a founder and acting Product Manager then this one is a better fit for you.

CASE STUDY

HubSpot's turn. - this is another SaaS company that has crossed $1b in ARR (and growing at about 30%!!). They have been around for 14 years but didn't really get started until about 2011. You can watch the $0 - IPO breakdownhere too.