The weekly top 10 for B2B tech operators · Every Friday
! Recurring revenue models and usage-based pricing can be complex to reconcile, but David Kellogg's insights on transitioning from annual to monthly and leveraging Implied ARR are enlightening. According to this article, there are only 5 types of MRR growth, and they hinge on expansion and reactivation - areas traditionally overlooked. Benchmark your MRR here.
What exactly is the difference between Customer Success and Customer Support? Get started here to understand the nuances. They are both part of the same customer journey spectrum, and Totango posits, in this recent SaaStr Annual presentation, 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).
Because your new strategic year is just around the corner and now is the second best time to get started, Dave Kellogg has an excellent How-to guide on presenting your amazing new operating plan to your board.
The title of this article says it all -5 SaaS pricing mistakes you're probably making. Stop lowballing!, pick the right metric, make purchasing easy, optimize upsells, and keep pricing dynamic.
The Quarterly report from Vendr: The SaaS Trends Report for Q3 2023 (b2b only) is out. The remarkable drop-off in ACV that we referenced a few months back for Q2 looked like a blip, but ACV is still down 17% YoY. We're all hiking prices like crazy, though, and CAC is at a 3-year high - doubled since 2020!
Here is an interesting side note from Carta late last month: Seed and Series A funding sizes are rising; median seed at $3.2M, Series A at $9.1M, showing a positive trend for startups for the first time in 2 years. Hopefully, this remains a positive trend, as I reported a few weeks back, Carta's Q2 report painted a far from rosy picture of about a 1-in-5 raises also being a down round.
Planning time again - Tomasz Tunguz asking questions related to #5 last week but with a sales focus given rises in AI, CAC, decreases in ACV, and budgets: How much should Quotas increase next year? His back of the napkin Math is 20%.
This one is juicy - thanks to an ongoing court case, we get to temporarily peak into Google's most lucrative search queries over one week. The top Google revenue queries are dominated by iPhones, insurance, flights, and cable/internet services, where advertisers bid aggressively for high-value customer acquisitions. Unfortunately, there is no indicator of what the cost per click is - but judging by the Hubspot study they also referenced, they look to be in the high three to the low four-figure range.
Big announcements on the high end of AI town. OpenAI officially launched the ChatGPT Store, with the potential for massive revenue growth via third-party developers. They are not calling them apps, though - but "GPTs." Microsoft, in its earnings call, announced that GitHub Co-Pilot has over a million paying users, which is an indicative ARR of about $150 million.
Complementing #4 and #5 above, Pricing: it varies. So check these case studies: Atlassian had one model; Intercom, several; Loom (now part of Atlassian!) changed with growth. There is no perfect pricing; there are always trade-offs and deep experimentation.
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