# Top 10 in Tech - What to know for Week ending July 21, 2023

Published: 20 July 2023
Canonical: https://www.top10in.tech/posts/week-ending-july-21-2023

## 1. SaaS METRIC OF THE WEEK: CAC payback (

and accounting for the upsell) Often time many of the base metrics (CAC, CAC/LTV, etc.) are in service to VCs and operationally don't tell us enough to make great decisions. [This article takes an operator view on CAC Payback](https://www.saastock.com/blog/advanced-saas-metrics-upsell) that includes (and celebrates) the value of net revenue retention, and [here is a very relevant article on the importance of CAC payback in our current Bear/recessive market](https://medium.com/parsa-vc/the-importance-of-cac-payback-in-todays-market-environment-db025df33d5b).

Link: https://www.saastock.com/blog/advanced-saas-metrics-upsell

## 2. CUSTOMER SUCCESS - Quota

this is an expansion of celebrating Customer Success Teams' contribution as NRR and CAC payback referenced in #1 above. In past newsletters, I have referenced [AE](https://medium.com/north-america-tech-for-kiwis/new-saas-report-from-the-bridge-group-680c2b7cd3d6) and [SDR](https://medium.com/north-america-tech-for-kiwis/2018-sdr-metrics-report-from-the-bridge-group-f7fee0ad46df) metrics and quotas. But what about quota expectations in renewal and cross-sell/upsell within a Customer Success Team? [Tomasz Tunguz takes a look](https://tomtunguz.com/how-much-arr-can-a-csm-manage) based on a [report a couple of years back from Gainsight](https://www.gainsight.com/blog/customer-success-team-planning-cost-benchmarks). Most Customer Success Managers can handle between ***$2-$5M in ARR*** and between ***10-500 accounts*** (but it varies based on segment/ACMR).

Link: https://medium.com/north-america-tech-for-kiwis/new-saas-report-from-the-bridge-group-680c2b7cd3d6

## 3. SALES OPS

For those lucky enough to be in Scale-Up mode but not in a PLG way. Scaling creates some real teething problems, especially regarding revenue teams and moving beyond the founder being the primary (or only) salesperson. Eventually, a dedicated team will be needed ([that doesn't involve the founder)](https://www.saastock.com/blog/saas-sales-process), and, in more modern times, Sales Ops operators are needed to help coordinate cross-departmental activities to help a revenue organization hum. Read t[his Sales Ops primer article from Point Nine Capital](https://medium.com/point-nine-news/a-primer-on-sales-ops-a-k-a-sops-for-early-stage-b2b-founders-1407bb168d1e) on starting all this.

Link: https://www.saastock.com/blog/saas-sales-process

## 4. PRODUCT

Now matter how much Workshopping and strategy development goes into a product, things sometimes work out differently IRL. First Round Review is back again this week to discuss this topic and have a [list of things to avoid when building highly-technical products](https://review.firstround.com/how-product-strategy-fails-in-the-real-world-what-to-avoid-when-building-highly-technical-products).

Link: https://review.firstround.com/how-product-strategy-fails-in-the-real-world-what-to-avoid-when-building-highly-technical-products

## 5. SEGEMENTING

I raised the topic of account-level segmentation [a few weeks ago](https://www.top10in.tech/top-10-in-tech/top-10-in-tech-what-to-know-for-week-ending-june-2-2023), and someone over at Userlist shared [this article that they thought would be interesting](https://userlist.com/blog/segmenting-accounts-vs-users/,). It's true - an excellent article outlining best practices for B2B SaaS companies in effectively segmenting accounts versus individual users.

Link: https://www.top10in.tech/top-10-in-tech/top-10-in-tech-what-to-know-for-week-ending-june-2-2023

## 6. BUYERS

Software generally benefits during Economic downturns - the downside is more competitiveness. So take note that (according to Gartner's 2023 [Global Software Buying Trends report](https://www.dropbox.com/s/dpe0s95vbjrmk30/2023-global-software-buying-trends-report.pdf?dl=0)) almost 70% of SMBs plan to increase their spending on software this year, many to increase productivity (47%), and 42% rank as a top priority. G2 has just launched its [2023 Buyer Behavior Report](https://research.g2.com/hubfs/Buyer-Behavior-Report-2023.pdf) with slightly different stats: 49% plan to increase budgets, and 86% require a security audit!

Link: https://www.dropbox.com/s/dpe0s95vbjrmk30/2023-global-software-buying-trends-report.pdf?dl=0

## 7. PLG TRAP

This is a [great read](https://www.linkedin.com/pulse/plg-trap-oliver-jay/) (across 3 parts) - starting with [Tomasz Tunguz's article](https://tomtunguz.com/plg-less-profitable/) a few months back, where he noted that (post-COVID) publicly traded PLG companies were operating about 5–10% less profitable than sales lead counterparts. Part 1 lays out what the "[PLG Trap](https://medium.com/@ojojoj/part-1-introducing-the-plg-trap-af998195566d)" is. PLG is not a revolutionary silver bullet for many, and the article points to where initial growth strategies and product offerings are no longer sustainable in driving revenue - showing PLG's scale limitations.

Link: https://www.linkedin.com/pulse/plg-trap-oliver-jay/

## 8. PLG vs. SLG

According to [the Expansion SaaS Benchmarks report](https://www.dropbox.com/s/nt6wcvfjvwdovez/2020_SaaS_benchmarks_deck_vFINAL.pdf?dl=0) (it's a downloadable PDF), [PLG](https://openviewpartners.com/product-led-growth-maturity-grader) businesses lead the pack, but as stated above - SLG can outperform PLG, and [according to this article](https://saasoptics.com/blog/sales-led-vs-product-led-why-you-dont-have-to-choose), it's not a "vs." thing - you don't have to choose, both strategies can co-exist.

Link: https://www.dropbox.com/s/nt6wcvfjvwdovez/2020_SaaS_benchmarks_deck_vFINAL.pdf?dl=0

## 9. AI MONEY

A look into [how the heck AI companies monetize their AI-PLG apps and how revenue models are built](https://www.mostlymetrics.com/p/how-does-ai-actually-make-money) (free trials FTW)...and need to be built to ensure a sustainable AI business is being established (the old Revenue vs. Cost optimization challenge). Bonus at the end of the article - CAC Payback is overrated!

Link: https://www.mostlymetrics.com/p/how-does-ai-actually-make-money

## 10. CASE STUDY

Meta is back in the news lately by launching [Threads](https://about.fb.com/news/2023/07/introducing-threads-new-app-text-sharing/), a Twitter competitor that was the [fastest-growing app ever](https://www.zdnet.com/article/threads-hit-100-million-users-in-under-a-week-breaking-chatgpts-record/) (beating out this year's [ChatGPT](https://www.forbes.com/sites/cindygordon/2023/02/02/chatgpt-is-the-fastest-growing-ap-in-the-history-of-web-applications/?sh=140dcc8f678c)!), but Threads also seems to be cooling off in a [major way](https://vulcanpost.com/834001/fastest-flop-in-history-threads-popularity-crashed-in-just-one-week/). Despite their current popularity shortcomings, however, the original Facebook app still has a solid moat, and quite unbelievably, it [has a higher DAU/MAU ratio than in its early days](http://has a higher DAU/MAU ratio than its early days).

Link: https://about.fb.com/news/2023/07/introducing-threads-new-app-text-sharing/

## POD OF THE WEEK

Complimenting 7 & 8 above from Stage 2 Capital: How and when to [layer Sales into PLG](https://blog.stage2.capital/how-and-when-to-layer-in-sales-to-plg) with Tony Granados (DataDog and Airtable).

Link: https://blog.stage2.capital/how-and-when-to-layer-in-sales-to-plg