Top 10 in Tech A WEEKLY NEWSLETTER

Top 10 in Tech - What to know for Week ending February 26, 2021

2/26/2021

SaaS METRIC OF THE WEEK: CPA - cost per acquisition - vs CAC. CPA is often conflated with the Cost of acquisition, but they are different. Andrew Chen dives into the details as to why (and also how to calculate CAC accurately).
DESIGN: Bringing good design into different elements of a business is nothing new to modern businesses. But there are specialized branches of design constantly emerging. Growth Design is my new all-time favorite - merging typical HCD/Empathy Design but adding in the pragmatism of designing the jobs that need to be done.
SALES OPS: For those of us lucky enough to be in Scale-Up mode. Scaling creates real teething problems. Especially when it comes to 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) and, in more modern times, Sales Operations operators are needed to help coordinate cross-departmental activities to help a revenue organization hum. Take a read of this Sales Ops primer article from Point Nine Capital on how to get started.
DEATH: Of the SaaS kind. Sorry to make it morbid - but Y-Combinator (via the SaaStr Blog) lists 5 things that kill startups (and what to do about it). It's a way deeper article than it sounds (and it ain't just 5 things) - then there is also this Twitter Zinger.
CYBERSECURITY: This is actually an expansion of the Pod of the Week below (listen to it!). Cybercrime has become big business and selling your product to larger corporates and the enterprise in a post-SolarWinds breach world has made operational and cyber Due Diligence a lot trickier to navigate (there is a growing need for chief compliance officers for example). What to start focusing on? Start with more detailed Log Management (listen to the Podcast to understand why in the Solar Winds case)
SEGMENTATION: Not all customers are created equal and audience segmentation isn’t a new concept. But it's a constantly moving target and can be a hard topic for startups to master. In this rapid deep dive, learn What segmentation is: Why it matters, and How to implement it. If done right, there are massive upsides. But Cohorts are also a necessary ingredient in Segmentation analysis and sometimes segmentation can be a bad idea.
CUSTOMER SUCCESS MODELS: Just like customers, not all CSM’s are built the same either. And it depends, based on stage and strategy, as to how your CSM teams will evolve…...but they will. Gainsight proposes 5 basic kinds of CSM, along with a corollary org chart. But keep in mind IRL they all will be different hues. SaaSx has this model. Which one best resonates with you?
CUSTOMER SUCCESS #2 - Quota: In past newsletters, I have referenced AE and SDR metrics and quotas. But what about quota expectations in renewal and cross-sell/upsell within a Customer Success Team? Tomasz Tunguz takes a look based on a report a couple of years back from Gainsight. Most Customer Success Managers can handle between $2-$5M in ARR and somewhere between 10-500 accounts (but it varies based on segment/ACMR).
MARKETING: Just save this link to your ideas/inspiration board or something. At first glance, it looks like a lightweight article. But just wait. One day you will be looking for ideas on how to elevate your product or business, when you do open up this bookmark for some true inspiration on 52 Low-Cost Ways to Promote Your Business
CASE STUDY: The Freemium and Product Lead Growth master - SLACK - and 5 interesting learnings now that they are at $1B in ARR. They are still growing revenue at 40% year-over-year - likely thanks to Covid and PLG, and thanks to their Freemium model Slack has a great 50/50 split of customers Small/Enterprise.

POD OF THE WEEK: a16z's declaration of a pivot into Media last month was a surprise to no-one who listens to or reads any of their content. So take a listen to this tear-down of how the Solar Winds hack went down (technically). Really great listening for anyone that loves Serial-style podcast covering super tech issues. The SolarWinds hack is no joke. It's a very big deal with political ramifications.

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

2/19/2021

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 response rates, 2. Predictable Revenue has this PowerPoint deck on 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 to leverage 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 breakdown here too.

POD OF THE WEEK: Adding onto #3 above, Profitwell run a pricing page teardown on Accounting software company, Xero

Top 10 in Tech - What to know for Week ending February 12, 2021

2/12/2021

SaaS METRIC OF THE WEEK: Active Users! An active user is any user who interacts with your platform in some way during a specific time period that you can identify (depends on your business but can be daily, weekly, monthly). Some consider this a vanity metric but here is why this is still important.
SALES: Many well-known tech companies (Atlassian, Zoom, SurveyMonkey) "moved upmarket" - which means they started in the Consumer/SMB space and transitioned into a successful enterprise-focused business. The team at SaaStr has 5 tips to closing larger deals more frequently and Tom Hale has a great case-study on how it was done at SurveyMonkey.
PR: Getting PR if you’re an unknown startup is hard (and also can be seen as a low priority in their stable of things-to-get-done)- but it's not as hard as you think without a publicist. Here is a great 101 article from Point Nine Capital (they call it PR for dummies) on how to get great press coverage. The Nasdaq Entrepreneurial Center also has a webinar coming up on Feb 17 PST on how to get PR for your business without a publicist.
VENTURE: The CBInsights/Money Tree tech report for Q4 2020 is now out and despite this whole pandemic thing, 2020 investments reach a new annual record (of USD $130B - up 14% YoY) - mostly attributable to the rise of fewer-but-bigger checks with investors consolidating their tech investments into more mega-rounds (reflected by the fact that deal count is down 9% from 2019). IPO's also made a come-back - 147 tech IPO's in 2020 vs 90 in 2019. 2021 is also not messing around with, $40B invested, setting an all-time high record, according to Crunchbase.
USABILITY TESTING: Creating an intuitive user experience within an application or website takes time, and requires a continual process of design - what may seem obvious to one person may not be for everyone. It's not just about UX - it's about usability testing, read here for the fundamentals of this concept. Once you have that article mastered, head over here on how to elevate your UX design empathy skills.
FRAMEWORKS: Beyond measurements/metrics, a successful business framework can distill complex processes or models to make execution more of a simple recipe (but ones that can build enduring, mass-market businesses). Sarah Tavel has compiled a great list of compelling Frameworks covering the 10x model, the hierarchy of engagement, hype cycles, and more!
SAAS SPEND: The "Covid Boost " is a thing, the speed of digital transformation is going gangbusters - so much so that Gartner has had to re-forecast their numbers in this report that has increased its estimates for global enterprise and IT spend for 2021 and 2022, with Enterprise Software and SaaS the biggest winners - projected to grow 6.2% and another 4.6% in 2022 - with Enterprise Software really taking the big (forecast) prizes - 8.8% 2021 and 10.2% 2022.
PRICING: In the Software and SaaS world, pricing has always been tricky. With the more recent additional complexity introduced by Data, AI, and Intelligence-based products, it’s getting even harder - how do you price intelligence?. Tomasz Tunguz breaks down what he has learned on pricing over the past 10 years and this article breaks down pricing in Per-seat vs Usage-based scenarios.
CUSTOMER PROFILE: Here is a great tool for anyone. Sales can be a real uphill battle when revenue teams don't truly understand their ideal customer, building out customer profiles is an incredibly useful way to identify your best customers. So download this Profiler kit pdf and use these questions and survey generator to quickly generate the ideal questions and template for your customer profiles. The rest is all on you.
CASE STUDY: OTKA - They are an under-the-hood Tech company ("one of those" SOMA 2nd Street Tech Companies is the SF reference) but coming up to almost $1B in ARR!!!! So check this SaaStr Case Study on the growth of the OKTA business on how they got there.

POD OF THE WEEK: To add some power to #4 above What It Takes to Really Raise Capital in 2021 with Christoph Janz, Co-Founder, and Partner @ Point Nine Capital‬.

February 05th, 2021

2/5/2021

SaaS METRIC OF THE WEEK: Retention. Long-term retention is the foundation of sustainable product growth. Retention is viewed differently in different industries. Gaming companies have 1, 7, and 30-day retention rate metrics and Segment has a great guide on how to measure and improve customer retention
COLD CALLS: 2% of today’s cold calls actually result in meetings and 63% of sales professionals say it’s what they dislike most about their jobs. However - 78% of decision-makers have taken an appointment or attended an event as a result of a cold call - so how do you be the latter not the former? ZoomInfo has a download for you. Jason Bay also has some methods to optimize response rates and Gong has some additional recommendations on cold calling.
FEEDBACK: No-one likes to be told they are doing a poor job. Delivering this news can be pretty anxiety-ridden. But we all have to do it. Here are some great tips for delivering that news well and when it comes to management - I love some thought-provoking rules - so here are 6 counterintuitive ones from First Round Capital.
CAPITAL: In the current/post COVID tech world, it doesn’t have to always be about Venture Capital or equity (and dilution) when looking to finance. Revenue-based financing is quickly becoming a popular way for startups to raise funds without sacrificing equity, with the rise of significant services such as Lighter Capital and The 20-Minute Term Sheet in the past couple of years. Here is how it works and what these financiers care about. HINT: It’s ARR and growth. From the SaaS CFO here is the Founder’s Guide to Venture Debt with advantages vs disadvantages of Debt vs Equity.
FREEMIUM: It's a new year and a new Freemium posting. This is extensive, so definitely bookmark-able as it covers a lot of detail on how to make Freemium models work.
PREDICTABLE REVENUE: It's the #1 reason investors love SaaS. I may give Salesforce a hard time occasionally - but almost 20 years ago, they launched the methodology of Predictable Revenue - which then became a sales guide published way back in 2011 by Aaron Ross - Crib Notes PDF pf that book is downloadable here.
REVENUE MANAGEMENT: Tagging on to #6 above - revenue management is the system of setting prices and adjusting them based on supply and demand (thanks for the infographic Chargify). In SaaS, which is all about predictability, this is really important, with RevOps being a new category of practice within maturing SaaS companies.
SECURITY: Back-of-the-napkin Math tells us that about 88% of all SaaS is now sitting on public-cloud. But building on a major cloud provider’s platform doesn’t make your products secure. This is a great video and transcript hosted by HeavyBit covering the core tenets of modern cloud infrastructure security.
SILICON CLOUD: Here is a concept for you - (as I predicted daaaaaays ago) Geography is becoming way less of a thing. In the current portfolio of Initialized Capital (who I actually am not quite sure why they call themselves "the honeybadgers of Venture") fewer than one-third of the companies are based in the Bay Area/Silicon Valley. In this survey, more than 40 percent of founders say that the best place to start a company will be in the cloud.
SEO: For many SEO (Search Engine Optimization) is some otherworldly voodoo - But discoverability trumps content marketing and needs to be an endless-part of any modern business strategy. So sign up to Notion's SEO MBA class and get learning! The resources linked are meant to be a comprehensive curriculum on everything you need to know about SEO for SaaS companies.

POD OF THE WEEK: Complimenting #6 above - for some, the concept of ’salesperson’ is cringe - so listen to this podcast from Predictable Revenue that explores the idea of social selling and bringing back the human element of sales.

TOP 10 IN TECH

Top 10 in Tech - What to know for Week ending February 26, 2021

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

Top 10 in Tech - What to know for Week ending February 12, 2021

February 05th, 2021

Get YOUR WEEKLY UPDATES!

Archives

​TOP 10 IN TECH

Top 10 in Tech - What to know for Week ending February 26, 2021

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

Top 10 in Tech - What to know for Week ending February 12, 2021

February 05th, 2021

Get YOUR WEEKLY UPDATES!

Archives

TOP 10 IN TECH