1. SaaS METRIC OF THE WEEK: Fundraising Metrics. Make your fundraising way less chaotic by getting these metrics dialed in. Unless you are pre-revenue, Investors will expect to see detailed ARR, CAC, LTV, retention rates, and engagement metrics. A strong data deck (or data room) can answer investors' questions and show a clear path to growth.
2. GROWTH LOOPS: Elena Verna (Head of Growth at Amplitude) gave a great presentation about predictable and defensible growth loops and how to make money from them. Elena makes the interesting argument that revenue is an outcome and should not be a KPI in Growth. Reforge has a recent article with some examples and feedback on how to put Growth Loops into action. 3. WEB: Super interesting read from The Pew Research Center: Digital Decay, a quarter of all pages that existed from 2013 to 2023 are now unreachable, with pages often deleted on otherwise functional websites. 4. INTELLECTUAL PROPERTY (AI): Historically, in the Tech World, many startups have been vulnerable to their competitors producing copycat technologies - looking at you Meta/Facebook. Generative AI raises newer questions on intellectual property – who owns AI-generated content, and who benefits? (Google AI search already has ads - gross!) This article from Benedict Evans delves into the complexities - looking at ownership, moral rights, and potential exploitation. 5. UN-SCALE: Sometimes, while building a repeatable scaleable business model, some un-scaleable things have to be done. This article highlights three specific non-scalable things sales teams should be doing right now. 6. INVESTMENT: Carta's "State of Markets Q1 2024 Report" is out with some quality insights critical for those of us looking to raise a round (or others of us planning our runway). Funding rounds are down by almost a third, and investors are being selective (if not AI, then solid growth potential and fiscal sustainability). In the Seed/Series A side of town, over 40% of funding was directed at bridge rounds, which I assume are VCs protecting their existing startups and funds. 7. PRICING: This is an excellent report from Vendr: The SaaS Trends Report for Q1 2024 (B2B only). You can compare quarters from Q1 2020 to now: Renewal ACV and Net New ACV (after a remarkable drop last year) remain flat, and buying life cycles are getting longer. Cybersecurity is the leader in new-category purchases. A cool feature at the top is that you can select and compare the category your SaaS may be in. 8. MARKETING: Hubspot continues to report on marketing data gathered via the platform with the State of Marketing report. TL;DR: Marketers focus on AI, with 77% saying AI helps create personalized content. In this business environment, efficiency, personalization, and innovative tools will drive marketing success in 2024. This other Hubspot page pulls some good stats. Again, TL;DR, the average landing page conversion rate is less than 10%, the average bounce rate is 37%, and the SEO click-through rate is 13%. 9. TEAM: Check this stat: VCs say startup success depends on your TEAM DYNAMICS (56% of them), then timing (12%), and tech (9%). Tech sector likes teams more (64%) than healthcare (42%). 10. CASE STUDY: Notion is a great product, and notably, to me, they also run some pretty impressive marketing tricks. First Round Capital agrees and has a great case study on their different strategic layers of Marketing, especially with community. POD OF THE WEEK: From a16z: Metrics and mindsets for retention and engagement as marketplaces and other platforms evolve over time. 1. SaaS METRIC OF THE WEEK: ARR. Two cool publications. The first one was sent from a buddy of mine, "The Ultimate Guide to ARR," which offers practical advice on measuring, influencing, and reporting ARR based on experiences at Intercom, Atlassian, and Stripe; the second one is from Bessemer Ventures and claims to be a founder's roadmap to $100 million ARR.
2. MVSP: Here is one more for your tech dictionaries - MSVP stands for Minimum Viable Secure Product. This is a simplified security checklist for B2B software and outsourcing providers. It outlines essential controls to ensure a minimal yet effective security posture. Not quite the SOC/ISO/APRA level stuff some of us have to deal with - but great for those of you outside of Enterprise and Financial Services. 3. SHAPE UP: This is the annual refresher for your tech dictionaries and reading list. Software product development requires innovative strategies based on today's cadence expectations of continuous integration, micro-services, feature delivery, and scale. The team at Basecamp (I'm an old-school fan) has developed ShapeUp, their publications, and toolbox of techniques designed to eliminate chaos when it comes to designing, prioritizing, and shipping products/features. 4. SEED: Carta's latest report takes a look at investments into pre-seed/Seed Stage companies - SAFEs are the most common instruments in pre-seed financings, most pre-seed rounds are around $1M, and the typical valuation cap is $8-$10M. 88% of pre-priced rounds use SAFEs instead of convertibles. This underlines the ongoing shift towards more flexible and founder-friendly funding mechanisms. 5. INVESTMENTS (AI): Silicon Valley/Bay Area is still dominant and secured more than 50% of all global investments into AI startups last year, according to Crunchbase (and that's nearly double the prior year's total: $27B vs. $14B). Despite repeated claims of its imminent demise throughout the years, Silicon Valley ain't going anywhere anytime soon. 6. INVESTMENTS (AI): The bubble builds? AI valuations are soaring big time, with early-stage AI companies valued above $70 million and late-stage at around $100 million in Q1 2024, according to this PitchBook report. While the rest of us in the VC landscape see an increase in flat and down rounds, AI remains a top focus for investors. Some investors out there (such as Sierra Ventures) are calling for a more diversified approach within AI and caution against the short-term hype we have seen a few times before. There are already some signals that not all is well. Gross Margins may not be that great, either. 7. GROWTH: Coming off the back of last week's quite popular post on Growth Marketing - is it even marketing in the first place? I like this find, and I've been sitting on it a little while - but share it with your marketing team: The Strategic Growth Calendar Framework is a year-long blueprint that combines "Always On"growth channels with impactful "Marketing Moments." Emphasizing integrating steady, foundational channels like SEO and email with high-impact campaigns such as product launches, events, influencer collaborations, and the like. Aligning these strategies with seasonal demand over your calendar year optimizes planning and (hopefully) continuous/steady growth throughout the year. 8. AI LEAD GEN: I had a bit of a unique GenAI moment this week, my first inbound lead from ChatGPT and hopefully not the last. Do we need a form of LLM SEO? Meta is also now sticking generative features into its core advertising platform, which lets ads be generated programmatically. The big question here: Will my organic traffic disappear because of AI? 9. ADVISORS: Startups need them; often they can be a little over plentiful and a little predatory. If you find a sound advisor, how should they be compensated? Peter Walker from Carta has some data for you. TL;DR market rates are 0.23%-0.07% median based on stage unless full-time hires who get 1% typically. 10. CASE STUDY: Squarespace is now part of the $1 Billion+ ARR Club with $1.1 billion in annual revenue. They have also decided to delist and go Private. At private sale, they were valued at $7 billion, which works out to be about 6x ARR and growing nearly 20% YoY. POD OF THE WEEK: Adding onto #1, Funnel and revenue math kindly explained by Mark Roberge and Matt Plank of Rippling in the Science of Scaling podcast. 1. SaaS METRIC OF THE WEEK: Share of Wallet - this is one for all you marketplace people (who should also check this other article on Marketplace Liquidity and mentions in this newsletter from earlier this month). Share of Wallet is a measure of a marketplace going from being one of many options to becoming the main option for a buyer (AND also a supplier).
2. ONBOARDING (Remotely): Fun fact- I've only met three of my team IRL; everyone else is remote, overseas, and in a different time zone. Successful onboarding is hard, so check out this complete guide to remote employee training from Hubstaff (who I also use for my remote team). For some solid examples, 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. 3. PPG: Grab your tech dictionaries everyone! I have another acronym for you: PPG, or People Powered Growth. This is a derivative of product-led growth, which consists of a cross-functional team with customer- and non-customer-facing members. It's a People + Product partnership that develops and tests solutions, searching for ways to scale human interactions/intervention with a product. Some examples of PPG companies are Drift, Dropbox, and Loom. 4. GROWTH: Testing new marketing growth tactics takes a lot of resources, and most of us don't have much time to run experiments. So check this Google Doc from Dashly, where they collected 100 growth marketing hypotheses tested by a bunch of their experts (including advert retargeting, wait list for product launches, niche glossaries, etc.). 5. AI: Another week, another big AI update: OpenAI launched a new model called GPT-4o. It can reason across text, voice, and video. Take a test drive (it's free for everyone). It's impressive, and I can now turn off my accessibility microphone workaround as I can now actually talk directly to ChatGPT as response time is fast. It's not quite Human conversation fast, but close, and keep in mind this is the worst it will ever perform. Check these examples out. 6. CHAOS THEORY (PIVOTS): Digital Transformations are important, strategically for most modern businesses. But the mindset needed for these changes to happen requires a certain kind of improv style to get there - as the systems in place needed 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... 7. RAISING: Securing a Series A funding round in the current market has some seriously heightened expectations. It's a common tech-ism that most startups have not yet reached genuine "product-market fit" by this stage, but the expectation these days is that there needs to be a higher degree of PMF signals. The "graduation rate" from Seed to Series A has declined, showing increased investor skepticism. In fact, the graduation rate from seed to Series A is around ~12%, the lowest it has been in 5+ years. 8. MARKETING 1: Where do Marketers feel most confident about getting an ROI from their campaigns? This article answers that for you, but the TL;DR is that it's LinkedIn (and this is a survey of B2B and B2C marketers). 9. MARKETING 2: Now that market conditions dictate profits are more important than growth, what is the role of B2B growth marketing? And, curiously, is it even marketing in the first place? 10. CASE STUDY: Everyone loves a good old Pivot story. Expanding on #6 above, here are 5: The Hidden Backstory of 5 Startup Pivots That Grew to $43B, including Lyft and Discord, and also a "definitive" Pivot list from Lenny of Lenny's Newsletter (see below for more).PIVOT! PIVOT! POD OF THE WEEK: Continuing with the Pivot vibe this week, Lennys Newsletter has a Part 1 and Part 2 series on "The Art of The Pivot." 1. SaaS METRIC OF THE WEEK: SaaS METRIC OF THE WEEK: Buyer Intent Data. There is never a one-size-fits-all marketing strategy and channel for a business. So how does a business find out what are the best marketing channels for them? This article suggests that everything needed to answer that question is already within the data a business generates every day. (You're going to need Personas, so don't skip the links below.)
2. PERSONAS: SaaS B2B Marketing is a pretty unique beast, and getting into the minds of an idealized customer often requires creating personas. You should try it - it will definitely make you a better SaaS marketer. For most SaaS companies, creating multiple personas is often a strategic necessity. So here is an additional differentiator (and what the difference is compared to a persona) of an Ideal customer profile. 3. AI (part 1): Check out Stanford's AI trends and index report. A few key highlights: 1. AI is better than humans only on a small subset of tasks; 2. Foundational models are getting more expensive to train, 3. Most AI innovation is happening in the US (but the regulators are coming). 4. AI (part 2): Read this in Yodas voice: "Begun the AI Wars has." VCs poured $50B+ into AI last year, with significant investments from big tech and Nvidia's $50 billion in AI chip sales, totaling over $120 billion in AI investment. This boom has led to a few other companies jumping into the ring, including Adobe, Amazon, Meta, and (reported last week) Apple. This surge raises questions about whether AI models are in a bubble, will remain valuable products, or become commoditized, impacting profitability and future AI developments. AI is already fueling Microsoft's surge in cloud revenue, stealing market share from rivals and boosting its enterprise business, and OpenAI may challenge Google. 5. SEO: Sooooooo, do we really still need it? (TL;DR, yes and no)- if you are in the yes camp, check this more modern SEO guide: The Ultimate Guide for AI-powered SaaS SEO, probably written by AI, but it details several benefits of using AI in SEO 6. INDUSTRY (part 1): Last week's newsletter was notable as I had the most ever clicks on one post ever - Is SaaS Dead? Part of the current issue with SaaS is the lack of future liquidity via poor M&A and IPO markets. With IPOs, Tech Companies have a general hesitancy because of perceived "size." Meritech Capital did the analysis, and it turns out there is no "Size Problem." It's all about business quality rather than the size of the revenue base. Read more here 7. INDUSTRY (part 2): ChartMogul's April Benchmark data is out and shows that SaaS is remaining stable - we're in the "it's not getting worse" phase - with growth rates remaining steady. But drilling deeper reveals some potential positivity: Growth is picking up more broadly. PitchBook data takes a bit of a different take: VC investment in the US slowed in Q1'24, especially for large deals and IPOs. AI remains a hot investment area, while M&A activity is stalled. 8. ROADMAPS: We all need them, even in today's Agile workplaces. They are a reference point and sense of direction for what's to come beyond their more myopic Sprint cycles. Read here for the reasoning behind this, along with five roadmap templates to use. I took inspiration from Atlassian and published a public access roadmap - it works well! ChartMogul also has one, and if you want to venture in, first check these seven roadmap-making fails. 9. CYBERSECURITY: Cyber threats are going nowhere fast in 2024. Regardless of the size of your SaaS business, security should be part of your dev cycle but also know your weak spots. Bessemer Ventures has a great article this week covering Cybersecurity trends in 2024. CISOs (or whomever in your org assumes that role) are refocusing on security basics due to evolving threats and regulations, plus AI exploits are on the rise. 10. CASE STUDY: SEARCH: What has broken Google Search? Before ChatGPT and the like threatened Google's somewhat laissez-faire monopoly of search, Google's search revenue had already faltered back in 2019, triggering a "code yellow" crisis. According to this article (with solid sources), Google's ad and finance teams pushed for aggressive growth measures, resulting in the current compromised search quality and user experience to boost revenue. This internal conflict revealed what the real problem may be - a shift in Google's focus from user-centric innovation to revenue-driven tactics. Of course, it may not all be Google's fault (in fact, they already penned a strongly worded letter of complaint to the author - and he's responded, taking none of their antics) - the other problem is that the web has also gone to shit and a lot of it has become "too inauthentic to trust." POD OF THE WEEK: YC Partner Gustaf Alströmer talks about Growth for Startups, including how to measure product market fit, how to decide on a growth channel, metrics that lie about PMF, and other mechanics of growth for startups. 1. SaaS METRIC OF THE WEEK: CRO or Conversation Rate Optimization and Banklinko have created a great web guide about what it is and how to design for CRO within a business.
2. INDUSTRY: Jason Lemkin wrote a thought-provoking article last week: Is SaaS Dead? That's a controversial headline, for sure, but it did get me thinking: Now that high growth is no longer cool (thanks AI!) and returns are lackluster, is it dead? It feels like it, as it's a long down cycle, but Jason does point to plenty of upsides. SaaS spending has grown, and customers are still spending more each year than the last. 3. MICROSERVICES: Microservices have become the application deployment method du jour for quite some time now due to scalability and agility. But those old-school monolith apps also have value. Case in point - the Amazon Prime Video team recently shifted from microservices to a monolith and reduced costs by 90%. The choice is case by case, though. Microservices can get crazy complex, and Monoliths simplify deployment but often lack scalability. So, a blended approach makes sense, where core functions remain monolithic, and other components can go microservices. 4. CUSTOMER SUCCESS MODELS: Like customers, not all CSMs are built the same. 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 and 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? 5. REFERRALS: Cracking the referral loop is a dream outcome, but making this work is pretty rare. Kyle Poyar has written a guide on how to do it ( a collab with Stefan Bader from Cello, makers of referral software). 6. TRUST: For #5 above to work, people trust people over brands when it comes to trust. Chart Mogul has posted an 'Ultimate' Guide to Using Customer Testimonials to Boost Sales, noting that a generic and insincere endorsement is just as helpful as not using anything. It's also possible to take it further by leveraging those frothiest customers into a referral channel. 7. MARKETPLACES: Marketplaces need more attention in this newsletter, so time to change that a little this week. a16z have the Marketplace 100. A ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies. Instacart tops the list after some serious food delivery consolidation in that market, and the next 3 down are gaming and ticketing services - it will be interesting to see if any of that consolidates next year. One big marketplace problem, as outlined in this week's copy of Mostly Metrics, is that Marketplace-driven businesses are way behind other tech industry metrics across nearly every category - gross margin, revenue growth, CAC Payback, and Rule of 40 being the big ones. I mean, UBER literally just had its first-ever GAAP operating profit (Uber started in March 2009, so it only took a quick 15 years). 8. MARKETPLACE GROWTH: To add to #7 above, Two-sided marketplace businesses (such as Uber and Airbnb) face chicken vs. egg dilemmas when it comes to supply and demand. Here is a curated list from a16z's Andrew Chen on 28 ways to grow the supply side of a marketplace. 9. AI: Apple announced its foray into the LLM world twice last week with reports of continued conversations with OpenAI and the launch of OpenELM - an open-source model designed to run locally (iPhone chips inbound!) Are there too many LLMs on the Dance Floor? TechCrunch does the hard work with a list of all the cool ones. There is also a noted push towards AI-services (apparently a $4.6 trillion opportunity), which is all part of a newer push for AI to transition from "AI co-pilots" to "AI co-workers" that can complete tasks and workflows on their own. 10. CASE STUDY: PITCHES. Check out Alexander Jarvis's Pitch Deck collection. He has over 500 decks broken down by the good and the bad things people do. And here is something a little Meta from Khosla Ventures—a pitch deck on how to pitch VCs and align your narrative to your deck (and all of your other materials). POD OF THE WEEK: Apollo Chief Revenue Officer Leandra Fishman offers a great discussion on how to sell in a hyper-competitive space with dozens of tools, legacy systems, and cynical users. Apollo went PLG but was also hyper-focused on Time to Value for its target audience. |
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