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TOP 10 IN TECH
​a weekly tech newsletter
Curated SaaS and tech insight from around the web repackaged for people to put to good use

Top 10 in Tech - What to know for Week ending January 29, 2021

1/29/2021

 
  1. SaaS METRIC OF THE WEEK: Payback Period. SaaS revenue is painful until it’s not. What I mean by that is that the cost of acquisition for every customer is generally much more expensive than the first payment(s). It takes time to recoup those costs (something called the "Capital Trough”). But how much time? On average (according to David Skok et al) it’s about 17 MONTHS! (Ouch). Tomasz Tunguz takes a look at this metric as well and reviews best-in-class for public traded companies and data sources. Zoom (one of my all-time favorites) tops out at a payback period of about 3-months, which helps justify their spend on Sales and Marketing - 73% of all spend.
  2. SALES: In the early days of any SaaS business, the founder is the first (and only) salesperson - read here to learn how you may get good at sales as a founder. Eventually, a dedicated sales team will be needed, and hopefully, founders step away from front-line sales - to do this intentionally a repeatable SaaS sales process (that doesn't involve the founder) is needed.
  3. STARTUP SALARY: How much should you pay yourself as a founder after raising some capital? There are lots of interesting answers and also lots of different situations. There are some good common sense quotes from this INC article too: "Salary should be sufficient to not create hardship" and "When you're profitable, you can start paying yourself a more impressive salary" and sensibly expanded in this article (but the currency is in Pounds - so convert!). If you want the real numbers though - check this report from a 2019 survey of 125 startups.
  4. CUSTOMER SUCCESS: 2020 really showed just how important keeping existing customers happy and hanging around is. So check this blog post on the why, when, and how of Customer Success best practices to boost retention in 2021.
  5. CHURN: Adding onto the above are the hard facts - Ouch! Big Companies Don’t Churn. They Quit You.
  6. DESIGNOPS: Another one for your Tech Dictionary: Don't roll your eyes - listen up! Design isn't a thing, it's a process. The principles of which can be used and adopted across all lines of business (which is why design thinking is a very popular thing). Take a read here to get a better rundown of what I'm trying to say. And then how to use design thinking (and OPs) in product teams to build better products and experiences.
  7. PRODUCT MARKET FIT: Asking the question IMO is always the more noble focus (as opposed to being focused on answering). But sometimes - you just gotta know and here is a case study on how Superhuman did it. Also, this article has some great PMF definitions. PMF was called “the only thing that matters” to early-stage startups by Marc Andreessen 12 years ago. Now his team gets a little more nuanced suggesting focusing on Product-User-Fit as an indicator towards achieving PMF. Similar nuance is also true post PMF with repeatable-scalable revenue models as a precursor to a repeatable-scalable business model (you know - the one with actual profits).
  8. DEBT - 1/3: Not of the financial kind! This re-post from Stripe on the fiscal benefits of developers (They calculate it at $3 trillion GDP globally) also highlights the opportunity costs of bad code and technical debt, which occurs across all stages of tech companies (looking at you Salesforce). We all do it - so this article discusses how to manage the consequences.
  9. DEBT - 2/3: According to Bessemer Venture Partners, privacy debt is the new technical debt, and discuss this in their State of the Cloud Report from last year and discussed in this panel discussion. Here is how to get started on a slim budget - the burden of proof here will be expected by your customers.
  10. DEBT - 3/3: Product Debt is just as bad as Technical Debt - it's all the decisions that have been made, often tactical and acute, without a clear product vision or sufficient consideration about the long term effects of that moment/decision. The link above also has a great case study of Google messaging product evolution.


POD OF THE WEEK: Complimenting numbers 6 and 10 above from Productboard founder and CEO Hubert Palan on mastering product strategy.

Top 10 in Tech - What to know for Week ending January 22, 2021

1/22/2021

 
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  1. SaaS METRIC OF THE WEEK: LVR (Lead Velocity Rate): LVR is the lead growth rate of qualified leads per month. This metric provides a clear understanding of a businesses’ future revenue and growth. (see #2 below for why this important in 2021). Setting a goal to increase LVR by 25% for example will also enable you to equally increase revenue generated for your business. 
  2. REVENUE: For many of you financial end-of-year is fast approaching (and for some, it's already passed) so, question: How Dynamic Is Your Revenue Plan this year? In 2021 rapid acceleration away from everything 2020 is the best response. A pre-Covid revenue strategy this year could stall or even reverse your growth aspirations, so it's time to pull operational techniques from other departments (ie your Dev squads Agile ways) to create a more dynamic revenue plan - take a good read of this article from SBI for hot tips on avoiding poor Sales-based strategic planning. It even comes with an (OK-ish) downloadable planning tool (which I took the liberty to snag and sacrifice my email address for you).
  3. OPEN STARTUPS: I love this - it's absolutely one for your bookmarks so you can continually check in overtime (or even join the team). Most Startups are very secretive about their metrics but over the last 5 years Baremetrics has been chipping away at this industry norm to get SaaS companies to be more open about performance; Theorizing that radically transparency can actually be beneficial - it works for me to compare and contrast my own business performance.
  4. COGNITIVE LOAD: This is a great one for your tech dictionary and one to always keep in front of mind when designing any kind of user experience. Cognitive Load is basically the mental effort required every time you experience a new app or visit a website. It's the process of learning the navigation, layout, pages, buttons, etc: Your brain has to learn how to use the site while keeping track of the reason you came there in the first place and may begin to slow down or even abandon the task at hand when it receives more information than it can handle. Take a read of this article on ways to design experiences to minimize cognitive loads. Super interesting!
  5. MARGINS: Sammy Abdullah takes a look at publicly traded SaaS companies reporting in comparison to the SaaS-rule-of-thumb of spend: The 40/40/20 rule, (where 40% of spend should be on research and development, 40% on Sales and Marketing and 20% on Admin). The takeaway is that the rule looks, in reality, more of a 30/50/20 split. Yup - HALF of spend is on Sales and Marketing (unless you are Zoom, then it’s 73%!!!!).
  6. EMAIL MARKETING: Fun facts: 46% of consumers prefer to communicate digitally and 78% expect prompt follow-up from sales reps. This is likely growing post-covid normal - so check this ebook from ZenDesk on how to optimize your email automation tools and then from Salesforce is actually a pretty darn helpful best-practices guide to all things email marketing related (focusing on getting your data ducks in a row) - PDF for your downloading pleasure.
  7. FUTURE 50: Three years ago, Fortune Magazine teamed up with BCG to create the Future 50 to try and identify companies with the best long-term growth potential. It's a cool list as it's all mainly tech (Last year’s list produced a cumulative shareholder return of 71%) - explore away.
  8. 2021: SaaSBrief has a great article this week on SaaS in 2021. Tech/SaaS companies have obviously really benefited from the Great dispersion to digital and remote life/work (with forecasts that by 2023, 65% of global GDP will be digitized) but the author notes that 2021 will usher in more competition. M&A activity and PLG directly attributed to these shifts.
  9. CASE STUDY: Last week's Xero case study was a popular one - so I'm continuing the case-study theme this week with New Relic. I was one of their trial friends and family customers way back in their very early days (just over 10 years ago) when they had $0 and today they are now at a whopping $650 million ARR!!!!
  10. SALES: Getting to the point where you may need to hire a head of Sales? Tomasz Tunguz has three questions to ask them and Jason Lemkin has a list of 48 Types of VP Sales to make sure you know which one is the right one to hire for your business.


POD OF THE WEEK: Sales based: 3 Secrets to Help You Sell Upmarket Faster.

Top 10 in Tech - What to know for Week ending January 15, 2021

1/14/2021

 
  1. SaaS METRIC OF THE WEEK: THE ROSE METRIC: Starting 2021 off with Rose colored metrics. People are the most important (and expensive) metric for any company, especially SaaS (yes, I would argue more important than the software product). Revenue per FTE is one metric to measure when it comes to people efficiency, but a better one perhaps is the ROSE Metric, (Return on SaaS Employees). This metric highlights the tradeoffs between headcount, recurring revenue, and EBITDA growth of a SaaS company.
  2. MVP CANVAS: OK - this is interesting (because visual frameworks are my jam). Y’all have heard of the Lean Canvas and the Business Model Canvas? Well check out this spin on applying the framework focused on designing and launching MVP’s (just don’t burn the Pizza)
  3. TOP SAAS: Who are the fastest growing SaaS companies of 2020? This excel file shows the largest private SaaS companies ranked by revenue as of last month. There are over 40 SaaS companies with more than $2m in revenue that grew more than 200%
  4. CX REPORT: All companies are under pressure, especially after 2020, to deliver optimal customer experiences (CX) and companies with a 'champion' mindset outperform their counterparts. Getting started it's difficult to know where to make investments that are likely to pay off so download and read this in-depth Report (78% of respondents said that customer-centric agility has increased in importance as a result of COVID-19).
  5. UPSKILLING: If you have a new years resolution to learn something new, then take a look at this comprehensive list of 50 plus free awesome Certificates to earn in 2021 from Security to DevOps and Programming languages.
  6. CHURN: In our current comic climate, crisis-driven product churn is a legitimate thing as many businesses are continuing with a more austere strategy. As I’ve mentioned quite often in the past acquiring new customers is much more expensive than retaining an existing one. Creating a culture of customer retention is one of the best things to do, especially during a pandemic. This article discusses ways to make that happen.
  7. LEADERSHIP:  The SBI CEO Advisory Board has defined three top priorities for high growth CEOs going into the new year - all focusing on business fundamentals and being data-driven.
  8. GROWTH MARKETING: If you're responsible for growth/marketing we've hit the motherlode this week!  Dan Siepen has put together a comprehensive list of resources and the lists are updated often, so make sure you bookmark this page.
  9. PITCH: Getting a VC's attention in the initial pitch meeting is incredibly important - so here are  10 tips to help your pitch game from Fran Rotman presented in a 28-part Tweet-storm (and check these 16 rookie errors founder make pitching to VC’s from Jason Lemkin)
  10. CASE STUDY: Xero! The accounting software company is approaching $1B in ARR so SaaStr takes a look at how they go there: Nailing a niche and an LTV of 81 months really helps! Markgrowth also has a great complimentary article on how Xero acquired 350k SaaS users in 2018.
POD OF THE WEEK: Sean Ellis: How to rapidly scale growth. Sean discusses when the right time for a startup to really focus on ‘growth’ is and also  how to create a culture of experimentation.

Top 10 (2021 PREDICTIONS) in Tech - What to know for Week ending January 1, 2021

1/1/2021

 
Lets light the Sage and smoke out 2020! It's the perfect opportunity this week for a top 10 predictions list for 2021. (for all that our interested the  2020 version is here - looks like I REALLY nailed trend #8.).
  1. THE GREAT DISPERSION 1/3 (People): WFH Life is here to stay for many! Along with Zillow and others, Reddit announced this week that employees can work from wherever indefinitely with no salary changes. 2020 has taught most of us that we can be productive from anywhere - want proof? The Economist has some solid data for you.  But where will everyone end up?
  2. THE GREAT DISPERSION 2/3 (Product): Products and services bypassed traditional channels like stores, movie theaters (remember them?), and gyms in favor of faster, interaction-free shipments and deliveries. In 2021 the experience that will matter most to customers will be decentralized and mostly a digital only experience - this is the 2021 and onwards new normal. Shopify have this outstanding report covering the future of these eCommerce, retail, and fulfillment trends - a must read.
  3. THE GREAT DISPERSION 3/3 (Capital): You can raise Millions from VC's over Zoom and they will care much less  about your business being  based in SF anymore. It's pretty big news and could really decentralize and make access to Capital much more equitable.  Pro-tip read here on how you will be Zoom-judged by the VC's you are pitching to.
  4. FOCUS: Many buying decisions were delayed, reduced, or canceled in 2020 - so do you have a plan that will focus your 2021 efforts to grow faster than your competition? SBI have a great focused 4-step process for you to review for 2021.
  5. RETENTION: An unintended consequence of the Great Dispersion combined with hopefully a great global economic recovery is that competition for distributed services and products (like SaaS and eCommerce) will explode. Recent research by Salesforce shows that 80% of customers say that the experience a company provides is as important as its product or service. Retention of those customers will be running hot and companies will be experimenting like crazy to optimize those uncertain retention challenges
  6. PUBLIC CLOUD: An obvious conclusion from all this forecasted digital growth/WFH will be the corollary growth of Cloud providers such as Microsoft Azure and Amazon Web Services. The Cloud will be central to post-pandemic new normals. The cloud market grew even faster in 2020 than in 2019, even during the steepest economic contraction in modern history and Gartner is forecasting global public cloud revenue to grow by 19% by 2021.
  7. DEMOCRATIZATION OF INNOVATION: I've discussed this in the past under the "No-Code" title. Enterprise departments and divisions are frustrated at the speed their organizations' IT department can deliver digital projects. Welcome to the world of no-code. Technology infrastructure is becoming so commoditized and abstracted that we have now reached a point in time where web services, apps, and integrations can be provisioned visually with zero amounts of code written by departments outside of IT. A great example is the new e-commerce site, Webflow, who is competing against Shopify, BigCommerce and the like and requires no developers/engineers to stand up and manage a web store.
  8. CRYPTO-SPRING: The Crypto-winter is over - so this is a bit of a cheat as Bitcoin is on a burn right now along with a lot of other cryptocurrencies (just don't tell Ripple). But investors have traded out of gold as bitcoin has gone on its recent run - it's all still not mainstream as a currency though (more of an asset) , so De-Fi is the sub-set of Crypto outside of Bitcoin's rally to keep an eye on.
  9. CHATBOTS: I wanted to mention Product Led Growth - as 2021 will require more reliance on using the product as the main vehicle to acquire, activate, and retain customers. but as I have ranted quite extensively about it in the past, it's not exactly a new trend for 2021. But PLG 2.0 via Chatbots 2.0 works as a trend! Intelligent Self Service support is key to PLG.
  10. INTELLIGENCE: aka Data. I can't skip this one. (it was this or 5G). Check this list of 5 trends from Google Cloud. Gartner believe so deeply that data and analytics programs will become even more mission-critical that they created 100 data and analytics predictions through 2021.

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