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Curated SaaS and tech insight from around the web repackaged for people to put to good us
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1. SaaS METRIC OF THE WEEK: PQL: Product Lead Growth is the new SaaS strategy de-jour. All kinds of metrics tie into this new category - Product Qualified Leads (PQL) being the lead indicator that the PLG strategy a company is investing in is legit.
2. ONBOARDING CHURN: This is the sibling to the post above, as abandonment can signal poor onboarding. Here are 3 reasons why users abandon the onboarding process (identify verification, slow onboarding experiences, and being asked for too much data). Appsee has another 8 reasons in this article (adding Privacy and Ad clutter to the list). 3. WEB3: There is a whole new bunch of vocabulary to learn if you don't want to be seen as a big square at all your Web3 parties. Check this Twitter thread from @MishadaVinci, which covers all of the highfalutin' terms. 4. CUSTOMER SUCCESS - Quota: this is an expansion of celebrating CS's contribution as NRR and CAC payback referenced in #1 above. I have referenced AE and SDR metrics and quotas in past newsletters. 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 between 10-500 accounts (but it varies based on segment/ACMR). 5. a16z: Watch out Y-Combinator, Andreessen Horowitz has apparently been stealthily piloting their own early-stage accelerator over the past year and went public this month with what they are calling "a16z START". They are offering early-stage founders up to $1 m in venture capital! Not sure how much equity that will require, and a16z will be accepting founders on a rolling basis. 6. PRICING FEATURETTE: Last week's article on pricing pages was a popular post, so I'm doubling down with more this week. Optimizing Pricing is hard, and it's never (ever) perfect. a) If companies decide to have a pricing page on their site (which is that whole other topic I mentioned last week), Jason Lemkin, the founder of SaaStr, lays out some thoughts on 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? Computers have a great article on conducting a high fidelity competitive pricing analysis project. 7. PODCASTS: Podcasts will make up nearly 20% of Spotify's US ad revenues by 2024 - whoa! In dollar amounts, that will be $400 million. This is just as well as fake artists are a problem these days on Spotify. Podcasting is a massive business now, with an estimated 120 million podcast listeners in the US last year. Podcasting is forecast to be a $94.88 billion industry by 2028. According to this Annual Report from Edison Research, growth is also corollary to Smart Speaker ownership in households. 8. VIDEO: According to this survey, the use of video Aids 95% Of Enterprise B2B Buyers in Conversion - read more (and how it does this) here. 9. BENCHMARKS: Bessemer VP has a playbook for us all (and a slide deck) describing how to scale your business from $1 to $10mm ARR. Significant benchmark data covering all the classics: CAC, retention, growth, etc. 10. CASE STUDY: Category creation! I know we all want to be up and to the left is one of those Gartner/Forrester Quadrant reports. So watch this presentation on category creation from Neo4 and how they did it, and here is another version from Gett. POD OF THE WEEK: Complimenting #9 above ( but with the added challenge of doing it without any outside capital), how FastBridge scaled from $0 to $10m in just four years. 1. SaaS METRIC OF THE WEEK: ARRR! "Pirate Metrics" was first proposed by 500 Startups; the great thing about this acronym based grouping of metrics is that it can be applied to non-software products or services as well as traditional SaaS:
2. DECENTRALIZATION: With the Web3 hype going mainstream, the movement from "big-tech" Web 2.0 to a decentralized Web3 can seem a little bombastic. So here are some specific models and principles of decentralization that are a little more palatable. 3. METAVERSE: Are you Meta-Curious? What's the Web3 hype all about? Look here at Hackernoon's top 5 Metaverse projects to explore this year. Fun fact: None of these projects are from Facebook/Meta (but who knows, one or two may likely be theirs by year-end....) 4. ATLASSIAN: If you didn't notice, earlier this month, Atlassian (Jira, Confluence, Trello, etc.) was down for many people, like, for evvvvverrrr! And I don't mean a few hours. I mean, WEEKS! Here is how that shit-show (technical term) went down. (TL;DR, Atlassian accidentally deleted all of their customer's stuff and had a hard time restoring it in bulk!). The article also highlights what Atlassian customers are saying now. 5. MARKETING: SaaS Marketing comes in so many flavours. The team at MKT1 have evolved a framework and org chart of the different marketing flavours you may encounter in SaaS. Along with a description of the roles underneath (and some recommendations of who to hire based on stage). This complimentary article takes it a step further on using marketing to get results. 6. EMPLOYEES: Here is a great question: How many employees should you have based on your ARR? David Sacks has a great slide from his SaaStr presentation on optimal SaaS Org Charts - Series A is 40-50 at 1m ARR. Yup, that's only $20-$25k ARR per employee - the full report here expands into what roles you should hire and what the org chart looks like. 7. SALES: From Predictable Revenue is a little eBook for your files covering Sales Development Methodology (includes a Playbook). 8. NOMADS: I travel on a plane for the first time in 2.5 years next week, and for many of us, the world is slowly unfurling from our Covid seclusions, and Travel is desirable again. A lot of us are also operating under a remote-work new order. Did you know that some Countries (21+) have Digital Nomad Visas for remote workers that let travellers stay longer than more traditional tourist visas? (Antigua, Barbuda, Bermuda, Costa Rica, Iceland, Mauritius). Learn more about the specific rules and requirements for those countries here. If you are serious about creating a remote workers Company Policy, watch this webinar replay. 9. PRICING: FastSpirng has released a new SaaS pricing page report for 2022 - you can read more here (I also like to highlight the great debate of whether SaaS companies should even have a pricing page on their site, but that is a whole other topic). Interesting highlights: Product Led Growth seems to be the strategy for leading companies, and only 36% of companies highlighted their most popular plan. 10. CASE STUDY: WhatsApp. Fun fact of which I contribute Zero daily: 7 Billion Voice Messages get sent on WhatsApp PER DAY! With 2 Billion users, some people are very chatty. Check here for more stats. To reach this kind of volume, good design is a crucial component. So take a read more on how WhatsApp achieved that here. POD OF THE WEEK: It's been quite a couple of weeks if you are Twitter, the Twitter Board, and/or Elon Musk. So get up to speed (and insider gossip) with the team at the All In Podcast (Chamath Palihapitiya, Jason Calacanis, David Sacks, and David Friedberg) 1. SaaS METRIC OF THE WEEK: CAC PAYBACK: CAC is also a measure of cash profitability per customer, and CAC Payback calculates how long it takes for a customer to become cash-flow positive. Here is how to calculate it (and why it matters). When benchmarking this metric, it's evident in SaaS that the negative cash trough is long! According to this survey, new customers, on average, take 2 years and 2 months to become profitable. This really highlights what will be a deepening dependency on Capital to fuel a SaaS company's growth.
2. CHAOS THEORY: Digital Transformations are important, strategically. But the mindset needed for these changes to happen requires a certain kind of improv style to get there - as the systems in place that are required to change or pivot are usually very complex - change IS chaos. So take some time to read this article to understand more of what this is about - I also aspire to have the title of "Chaos Manager" one day... 3. RYAN BRESLOW: Ryan is the founder of Bolt and is taking zero prisoners this week on Twitter with three SIGNIFICANT threads calling out Stripe for the Fast fiasco and Sequoia Capital for acting like the Mob. Read more on his view on Stripe's impact on Fast (which was a direct competitor to Bolt) here and his teardown of Sequoia here. Finally, wrapping both of those threads up is the third Thread for founders on how to protect their companies from Hostile Takeovers (such as allegedly what happened to InstaCart by Sequoia). 4. INVESTORS: Looking to build a list of non-Sequoia investors for your Cap Raise? Check this new fresh list of 65,000+ Venture capital, Private Equity Firms, Angels and Family Investment Offices contacts. 5. ESOP: Employee Share Option Plans are an excellent idea to incentivize and retain great staff. Not yet figured out your employee stock ownership plan? Check this cheat sheet, or here's a video version if you prefer to watch it. Obviously, working out the dilution factor of an ESOP is an important metric to know - so check this page for more on that. Finally, here is a 9-part video post of the most common questions about startup options. 6. ESOP BENCHMARKS: Fast follow from above here to this wonderful site that has compiled a set of benchmark data, comprising over 20,000 option grants from more than 1,650 startups across the US and Europe sorted by Seed or Venture stage. 7. PRICING: Getting pricing right is a big deal because a 1% increase in price can generate up to an 11% increase in your profits, so check this article on a data-driven framework for SaaS packaging and pricing to optimize that increase in profits. 8. WRAP-UPS: Add this to your tech dictionaries. Daily standups may no longer work in our new mashed up work-from-anywhere team environment, but Wrap-Ups are the new asynchronous, remote, WFH workaround. Possible fit? Take a read here of how to try them out. 9. EXPERIMENTS: Every path toward growth and revenue is a hypothesis in startup land, so read how to run a growth experiment (in 4 easy steps!). Testing versions of things is something to embed across your company and culture as you experiment towards growth - it's why failure is key to not failing. When conducting experiments such as A/B tests, get started with this refresher and then this Step-by-Step Guide. Go Practice has some great advice on making these experiments run faster. 10. CASE STUDY: Complimenting #9 above. On the extreme end of A/B testing is booking.com which often runs over 1,000 tests simultaneously! But here is the payoff: That flywheel enabled Booking.com to compound at healthy growth rates while maintaining ~30% EBITDA margins and scaling Google ad spend to approximately $4 billion per year! POD OF THE WEEK: From the SaaS Revolution Show - Andy Whyte, CEO of MEDDICC (quite the acronym: Metrics, Economic Buyer, Decision Criteria, Decision Process, Identify Pain, Champion and Competition), discusses how to get ahead of complex SaaS sales.
POD OF THE WEEK: Great video (with outstanding notes) covering content creation and marketing strategy at the early stage: How to Earn Trust, Manage Risk and Build Momentum.
POD OF THE WEEK: Starting the month with a brilliant video covering all aspects of failure and resiliency - and how to get back up when you get let down (feel free to forward this one around). |
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