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Curated SaaS and tech insight from around the web repackaged for people to put to good use
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1. SaaS METRIC OF THE WEEK: Here is another list (seven) of the SaaS metrics that VCs evaluate Startups on - the bonus is that it comes with a downloadable Google Worksheet template (make a copy for yourself).
2. BUSINESS MODEL: You will be asked often, especially when pitching, about your go-to-market business model: This is a pretty long but very high-value read from Alex Jarvis with real-life examples of good business models (and some good humor thrown in). The business model is always more important than the product (but of course, they both matter - but so does timing. There is a more extended PDF version - so I got that for ya too. 3. MARKET SIZING: The dreaded slide on everyone's pitch deck that is required to outline the business model and pricing in #2 above. What's the size of the market? TL;DR if the market is small, same with your startup. Understanding the nuances of TAM, TOM, and SOM is a great way to complete the slide but get started with your TAM first via this guide from Bling Capital on how to size a market (in 30 minutes!). 4. VENTURE 1: A couple of weeks back, I discussed the potential of a mass extinction event coming for early & mid-stage startups (#8 and #9)- same is probably valid for Venture and, according to this article, a "horde of ailing venture capital zombies" will emerge in the coming years. 5. VENTURE 2: Adding to evidence for the impending VC Apocalypse above, January's VC funding landscape stats are in this Crunchbase report - all rounds were down except seed. And that includes the banger of a round from OpenAI (ChatGPT's Parent) of $10 Billion. 6. SMB: In general, the Old SaaS-Skool guidance was to start chasing the most significant contract values as soon as possible (hello Enterprise!). But according to Craft, newer school thinking is to focus on SMBs, as sales velocity is a better strategy than chasing contract size - and SMBs are plentiful. However - the downside of SaaS-for-SMB is discussed in this article from SaaStr - CHURN! 7. PRODUCT LED FRAMEWORKS: Bookmark this as it's the first part of a pretty amazing 3-part series from Calixa covering PLG fundamentals, starting with defining what a PQL (product qualified lead) is and how to find it. 8. B2B MARKETING 1: SaaS B2B Marketing is a unique beast. I'm running a new demand generation campaign and finding out the hard way that growth marketing and demand generation are different. So don't learn the hard way, as I did. Instead, read this too-late-for-me article from Emily Kramer if MKT1 on the difference (and how to organize your B2B growth marketing team). 9. B2B MARKETING 2: Now that market conditions dictate profits are more important than growth, what is the role of growth marketing? And is it even marketing in the first place? 10. CASE STUDY: According to the Bessemer Cloud Index, only 11 of its 75 companies earn a profit today, but here is Slab's path to startup profitability. POD OF THE WEEK: A great discussion in the Y-Combinator Podcast on the normalization of Startup jobs in the US and beyond (and how the drift from non-conformists (less than 15 years ago) to mainly conformity today. 1. SaaS METRIC OF THE WEEK: Net Dollar Retention is an essential metric in the new world of Product Led Growth. It's used to help answer the following: Does my Startup need to increase customer acquisition/marketing spend? Crunchbase has already done the work to calculate what good NDR benchmarks should look like, but this month, Tomasz Tunguz looks at what it takes to achieve 200% NDR!
2. POC: I switched to proof of concept (POC) based paid trials as part of our enterprise sales process last year, and I like it! It's working well as part of our customer journey and is the fastest time-to-value metric we can deliver for various enterprise stakeholders. Want to get your POC up and running fast? The team at Work-Bench has a step-by-step framework AND a template of a POC Agreement for you here. 3. CAP TABLE: How do you best manage dilution from a cap table perspective? Here is what is considered "Normal," and read this article from Heavybit that discusses Cap Table management in relation to growth and how to manage that Option Pool. 4. INCENTIVES: Need to move beyond Founder-led sales in your Startup? Close.com has a rundown of five different kinds of Sales Incentive programs, one of which I'm sure would be fit for purpose for you (along with incentives to keep a sales team motivated. This post from Jason Lemkin also outlines how to construct a framework for your first SaaS sales compensation plans. 5. PROFESSIONAL SERVICES: It's a weird open secret that many B2B SaaS businesses generate significant Revenue from implementation and deployment projects, often captured as Revenue from Professional Services. This week Dave Kellogg has a post - called the Professional Services Paradox, where there are times when only a Startup can deliver the services needed to execute a transformation strategy. BTW - on average, Service Revenue as a percentage of Total Revenue caps out at 11% with Enterprise focused businesses. However, even at the lower end of town, it's still 5% of revenues with SMB-focused companies. Fun fact: more professional services, less churn. 6. SALES: ZoomInfo has unleashed an excellent playbook for all your business development teams, which I've already shared with my team. The PDF contains 16 of the best go-to-market plays from B2B sales and marketing pros across different sales funnel stages. 7. DESIGN: One of my many startup hats forces me to spend more time in Canva than I should (even though I'm pretty much canceling my Adobe Subscription as Canva can manage about 95% of my needs) - so this article a) Is visually lovely to look at and b) is in my Bookmarks of guides to reference: Visual design rules you can safely follow every time. 8. GENERATIVE AI: I bet most of you are already dabblers or active users (<cough> ChatGPT <cough>, so this should already be in your tech dictionaries, and by all accounts, Generative AI will be the next Consumer Platform. The use cases are everywhere - at least for me - and in particular, my new evolving relationship with Search and Google, a targeted integration into the business (KB articles and User Manuals), and my proximity to code. 9. CAPITAL: The article above on Generative AI then leads into more essential questions as this is a new functional application layer, so where will the value come from? 10. CASE STUDY: Founder-led sales is a well-documented part of the startup journey, often with inexperienced or more technical founders. Here is a list of 10 Founder-Led Sales lessons learned from a recent Race Capital roundtable. POD OF THE WEEK: SaaStr is now running workshops every Wednesday - a great concept that hopefully lasts. Jessica Bartos of Salesforce Ventures was on the last one and noted that only 150 private SaaS companies have hit $100m+ ARR. 1. SaaS METRIC OF THE WEEK: ACV, or Annual Contract Value, is one of the most popular metrics in the SaaS world. This article from Chartmogul goes into detail about what it is, how to calculate it, and how to leverage it in your business. Here are some excellent recent data on ACV within scaled SaaS companies. TLDR, the median ACV is $49K.
2. WEBSITE: Quick Question "Is Your Website Stressing Out Visitors"? Quick Answer: Probably. Read further on the WJTBD (Web Jobs to be Done) or TL;DR - remove the noise and focus on the jobs you need the website to do. 3. VENTURE: From Law of VC is the Ultimate Guide to Fund Terms that can tell you all of the critical terms that govern venture capital funds so you can nod knowingly when pitching to all of those VCs. 4. REVIEWS: According to Gartner's 2023 Global Software Buying Trends report, user reviews, and ratings influence the purchase decisions most - 41%. And of those reviews - customer reviews are trusted by 49% and peer recommendations by 50%. On the other hand, recommendations from industry influencers are used by only 37%, 32% have outgrown their current technology, and 30% have concerns about security and cyber attacks - good information to know when targeting new SMB B2B Customers! 5. BUYERS: Software is generally a boom during Economic downturns - the downside of which is more competitiveness. So take note that in the same report above, almost 70% of small to medium-sized businesses plan to increase their spend on software this year, many to increase productivity (47%), and security is a Top Priority for Software Buyers at 42% (more so than ease of use - 38%). 6. PRICING: It's never right as it has to evolve (and we need to charge more). Intercom makes the case that a solid pricing strategy helps shape an entire business model. 7. PAYFAC: Crack open them Tech Dictionaries again: PayFac (or Payments Facilitator) is something I have implemented to create an additional (recurring) revenue line to the business, but it was only this week that I discovered a pre-existing portmanteau for that. Stripe has a good guide on bringing PayFac in-house, and here is a downloadable PDF on the same topic. Very low touch once it's up and running! 8. STARTUPS 1: This is a bit of a ying and yang 2-part post: Tom Loverro of IVP makes the case via a Twitter Thread (and also mentioned in last week's All In Podcast) that there's a mass extinction event coming for early & mid-stage startups this year and next (due to short cash runways and the acute inability to raise cash in this market). 9. STARTUPS 2: To contradict (a little) the post above, Nnamdi Iregbulem, a Partner at Lightspeed Venture Partners, makes an in-depth argument that we don't have nearly enough startups (well, at least the good ones) 10. CASE STUDY: Successful onboarding is challenging in person - it's 10x harder in today's remote work environments. This is how Zapier does it (and leverages their own product to use automation to do it), and here are some lessons learned from Slack. POD OF THE WEEK: The Video-version of #10 - Employee onboarding secrets from Zapier founder Wade Foster. 1. SaaS METRIC OF THE WEEK: Churn is the metric that will make or break a SaaS business. This article is part one of a two-part series but lists 7 retention strategies that can assist you in retaining as many customers as possible:. Starting with scoring yourself to gauge where the business needs to improve.
2. WEB ANALYTICS: Being more data-driven is an intelligent 2023 move. So read this long-form article on how to be more web-based and data-driven this year (and why that's important). 3. EMPLOYEES: Here is a great question: How many employees should you have based on your ARR? In 2023 this answer may be much lower in our leanops market, but my former big boss David Sacks has a great slide from his SaaStr presentation on optimal SaaS Org Charts (Full deck here) - Series A is 40-50 at 1m ARR. Yup, that's only $20-$25k ARR per employee - full report here, which expands into what roles you should hire and what the org chart looks like. 4. MVT: Here is another one for your tech dictionaries: MVT or Minimum Viable Testing, which is about creating hypotheses and conducting tests that allow you to predict if a market will appreciate a product before even launching an MVP. 5. CYBER/API: APIs are big business these days, and the flip side of the rise of the API economy is that it catches the eye of cybercriminals. Based on figures from Salt Security's State of API Security Report, 94% have experienced security problems in production APIs, with a 117% increase in malicious API traffic over the past year. Check here for Trends, and also read on best defense practices. 6. MARKETING: So, how do you measure up in 2023 as a marketing business (that's all we secretly are)? Get started here with the 9 marketing disciplines of great SaaS companies, created by the former CMO of Zendesk and Slack, then complete the Marketing Scorecard Spreadsheet here, scoring each on a 1 to 10 scale. A deeper explainer is in this post. 7. LEAD SCORING (in a PLG world): Lead scoring is a way of assigning numerical values to prospects so sales and marketing teams can optimize their funnels and convert faster - so how does that work in a Product Lead World? This blog has all the answers. 8. LANDING PAGES: See below's Case Study link for the master of landing pages (Zapier had 25k of them). Scrapbook (who are getting very close to taking my money) looked over 100 SaaS landing pages and created a helpful (at least to me) landing page optimization checklist for SaaS. 9. MEETINGS: We all probably attend more meetings than we need to. In the US, there are 55 million of them a day. So check this great episode from Freakonomics on how to have healthier meeting habits or even better (if you are of the Product mindset), "If our meetings were products, no one would buy or renew" so here is How To Product Manage the Sh#t out of your Meetings. 10. CASE STUDY: I love Zapier (and their 25,000 landing pages). Here is how they built up one of the most incredible content marketing machines around. POD OF THE WEEK: Complimenting #3 above is the SaaS Org Chart Podcast live from SaaStr with David Sacks. (Video version here) |
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