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​TOP 10 IN TECH

​a weekly 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 December 24, 2021

12/24/2021

 
I'm making this last newsletter of the year (taking a break next week) a customer-focused edition - happy holidays and happy new year y'all, thanks for all of your eye-balls and clicks this year.​

  1. SaaS METRIC OF THE WEEK: CLV (or sometimes LTV): The C stands for CUSTOMER, and this metric represents the average revenue that a customer generates (LifeTime Value) before they churn. ChartMogul has a great online calculator here. Go to advanced mode, though, as this calculator references the traditional formula and the David Skok version (the advanced one is viewed as more realistic).
  2. CUSTOMER EXPERIENCE: Customer loyalty drives the success of a business, and the customer experience (CX) drives loyalty. Zen Desk has published its CX Trends Report for 2021. It's full of great nuggets: support requests are up 20% on average since the start of the pandemic, 75% of customers feel loyal to a particular brand or company (that delivers good CX), and 65% of customers want to buy from companies that offer quick and easy online transactions.
  3. CUSTOMER TESTIMONIALS: 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 a step further by leveraging those frothiest customers into a referral channel. Here is a playbook from SaaStr on how to make that happen.
  4. CUSTOMER CASE STUDIES: Latching onto #3 above. Going beyond testimonials, case studies are super valuable at the early stages as a company needs to demonstrate its credibility, the business value, and the technical context of the product. Heavy Bit has a great guide on crafting that first customer case study, and Uplift provides six best practices to be used in your story.
  5. CUSTOMER SERVICE: In this current age of the customer, enhanced by COVID, SaaSx makes the profound argument that Customer Success IS the product. Want to start building out that product? Check the HubSpot guide on getting started with your customer team.
  6. CUSTOMER SEGMENTATION: To calculate the cost of a Customer Service Manager, it's best to segment customers out to understand the efforts required. Chartmogul has this tremendous visual, and once again, Gainsight takes a look at how to Benchmark efforts over-segmentation. Here is what they found. The median amount of ARR that an Enterprise CSM can manage is between $2M and $5M, and The median amount of customers an Enterprise CSM manages is 10-50 - these revenue figures drop with mid and SMB customer segments and increase fairly dramatically with the number of customers per CSM.
  7. CUSTOMER PERSONAS: SaaS B2B Marketing is a pretty unique beast - and getting into the minds of an idealized customer often requires going through the practice of creating personas - you should try it - it will def 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 and how to (with templates!)
  8. CUSTOMER DATA: Customer data management is a practice, not a technology. I love that simple message. Gluconic gives the crib notes/5-steps in this article about developing a strategy to optimize and improve customer experience using good data management practices.
  9. CUSTOMER ONBOARDING: Onboarding success is often de-prioritized with scrappy fast-growing business but giving customers all the tools they need to succeed with your product is the best way to ensure that they stick around. Profitwell reviews the importance of good SaaS onboarding and discusses steps to create an awesome program. Userpilot also has a great tactical complimentary post on SaaS companies' best customer onboarding software options.
  10. CUSTOMER DELIGHT AUDIT. It's the Age of the Customer, you know, so this needs to be a thing - here is an in-depth post from CopyHackers on how to make this kind of Audit happen, and here is a case study on how three big Tech companies (GitLab, HubSpot, and Zoom) make delight happen. Also, here is a Case Study on building a customer-centric B2B organization from McKinsey.


POD OF THE WEEK: WFH life for Customer Success teams - the CEO of ChurnZero has a perspective on how to build this function remotely.

Top 10 in Tech - What to know for Week ending December 17, 2021

12/17/2021

 
  1. SaaS METRIC OF THE WEEK: The SaaS Magic Number - this is simply the balance between Sales and Marketing Spend and new ARR/MRR created. It's a good number for indicative over or under spend on marketing and sales. Check the SaaS CFO on how to calculate the Magic Number and from Jason Lemkin, some more nuanced thoughts on issues he sees with the metric and a reference to IVP, who Benchmark the Magic Number is 1.2 on average.
  2. CAPITAL: In the current 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 stand-out 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. Here is the Founder's Guide to Venture Debt with advantages vs. disadvantages of Debt vs. Equity from the SaaS CFO.
  3. FUNDRAISING: Another link to IVP this week to get 2022 started right. It's a comprehensive guide to SaaS capital raising so that you can be better prepared for your companies next round. This 25-page article covers financials, go-to-market strategies, market sizing, valuation, and storytelling.
  4. UNICORNS: In total, there are more than 800 unicorn startups globally. So actually, this visualization covers the world's top decacorns (unicorns with valuations above $10 billion) as of December 2021, according to CB Insights data.
  5. FUTURE TECH: It's fast approaching the end of the year, so time to start curating some interesting tech forecasts. Benedict Evans has one of the better (and bigger) ones and does this kind of thing annually. This year focuses on the 2025-2030 horizon and has a heavy emphasis on all things web3 and the non-Facebook metaverse.
  6. SDR RAMP: According to past studies, the time to ramp for an SDR averages about 3.2 months. From Saleshacker, here are some tips and tricks to make this ramp time as practical and successful as possible.
  7. FIPS: OpenView has delivered the 2021 Financial and Operating Benchmarks Report. This report is designed for SaaS operators to compare themselves against peers across many metrics that matter most in a SaaS business. View the interactive report here. Covers benchmarks such as employees, YoY growth, marketing spend, burn rate, NDR CAC, and diversity!
  8. DIVERSITY: The OpenView report above provides interesting diversity benchmarks based on a companies stage. But let's take a look at diversity in founders: Less than 2% of enterprise software startups in the U.S. feature a female founder (actual report here). 500 Startups also looked into coronavirus's disproportionate (and adverse) effects on female and minority founders. Let's not miss out on the fact that in 2020, Black founders received only 0.6% of venture funding!
  9. OUTAGES: If you were hiding under an internet rock last week or last month, you might have missed some pretty significant outages from Amazon Web Services and a big Zero-Day exploit across a lot of the Internet's Apache-based web servers. Which raises some serious questions - such as how resilient is the internet? This article makes an excellent case for #5 above; the web needs some decentralization to remain resilient.
  10. CASE STUDY: I like a good case study covering products I love to use. Grammarly is now valued at $13 Billion after a $200m round last month - with 30 million daily average users (of which I am for-sure one) they have been profitable since day one as they are one of the ultimate PLG businesses that merge B2C and B2B with a TAM of.........pretty much everyone. A great case study on SEO, engineering, great content, and an embedded and rewarding product experience.

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

12/10/2021

 
  1. SaaS METRIC OF THE WEEK: Retention. A blended retention/acquisition strategy is critical for the long-term sustainability of a SaaS business, but what are the core retention metrics to monitor? Take a read here of how to measure and improve the ones on the list.
  2. QUOTA 1/2: Hands up if you're forecasting or re-forecasting for 2022! Compensating SaaS Sales Reps is complicated and expensive. This blog post from Kyle Racki of Proposify has a pretty comprehensive guide on setting quotas and commissions. But here is a quick shortcut to make it easy for all you Account Executives: The average annual quota in this report from David Skok and Co is $770K in ACV, and on average, the quota was  5.3X OTE. An expanded top10inTech teardown of that report (which admittedly is from 2017, so starting to get a bit long in the tooth) can be found here.
  3. QUOTA 2/2: Thought-provoking article: Your Sales Team has a Sales Quota. Your Marketing team has to have a quota too - as they are also part of your revenue team. Getting both sales and marketing teams aligned beyond quota is a fundamental trick, and Tomasz Tunguz has a quick diagnostic to determine if your sales and marketing teams are working well together.
  4. FORECASTS: Outside of setting quotas, running a SaaS business relies heavily on cash flow - so it is imperative to forecast future revenue to avoid a cash crunch when trying to scale. So check this article covering Sales Forecasts and Pipeline Reviews: Why and How from a cash perspective.
  5. PITCH: The days of mandatory in-person pitch meetings to a VC are mostly behind us (at least for the foreseeable future). Pitching over Zoom is where we are at. Before you focus on getting the perfect lighting, though - check these 16 rookie errors founders make pitching to VCs from Jason Lemkin and read here on how you will be Zoom-judged by the VCs you are pitching to.
  6. OPTIONS and ESOP: Stock options are necessary for hiring and retaining the best talent in this hyper-competitive Startup Land. So how can companies build an effective option plan? During a call this week, I was referred to this site earlier this week 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. SOCIAL MEDIA: 2021 was a bit bonkers (ask Google), especially in the Social Media world. So how will 2022 fare? Take a read of this report from HubSpot and Talkwalker for 2022 Social Media Trends - they have a pretty good Top 10 list.
  8. MULTIPLES: Public SaaS and Tech companies suffered a beat down earlier this month. Did it have any significant impact on multiples of their revenue? Overall Stats: Median: 12.3x, Top 5 Median: 49.0x, 3 Month Trailing Average: 15.5x, 1 Year Trailing Average: 16.0x - that's a measurable downturn but keep in mind these numbers are still 86% above pre-covid highs.
  9. UX: Optimizing a User Experience is critical to the long-term success of any service or product. Google has Web Vitals, a program that offers developers guidance about best practice benchmarks on user experience. First, Round Capital has a DEEEEEP dive/crash Course for Founders on the principles of UX Research from people at Zoom, Zapier, and Dropbox.
  10. CASE STUDY: Category Creation is the Holy Grail - we all want to be up, and to the right is one of those Gartner/Forrester Quadrant reports. So here is how Neo4 did it. Here is another story from Gett and a warts-and-all case story about how OKTA made their category creation happen via Bessemer Venture Partners.
​
POD OF THE WEEK: Financial Reporting for Startups is something every founder has to up-skill at - this webinar (replay) covers operational and financial forecasts. Answering all those hairy questions - such as how do I forecast ARR when in startup mode?

Top 10 in Tech - What to know for Week ending December 3, 2021

12/3/2021

 
  1. SaaS METRIC OF THE WEEK: ZCP: Repeat this metric five times as fast as you can: "month zero cash-on-cash payback"- this tongue twister is best referred to as ZCP. It's a cash-based metric because cash-in-the-bank is THE critical number for a SaaS company to monitor in my experience. ZCP answers the question: if we invest $1 in sales costs (such as salaries and commissions), how long does it take to recoup that dollar spent and welcome it back to our bank account?
  2. BURN RATE: Speaking of #1 - because cash is king in SaaS. Here is a very bookmarkable link on how to best calculate cash burn rates - both gross and net - with some great ideas on things you can do to bring that burn rate down.
  3. WRITING: Being able to write well is a life skill that needs to sit with founders. So here is 3 step guide: Step 1. How to position your startup and achieve your unique value prop; Step 2. how to write well and one more version for good measure; and Step 3 top tips for telling stories.
  4. SALES: This week, Jason Lemkin lays down a great discussion on how sales efficiencies in a high growth startup get worse at scale...........so we all got to plan for it.
  5. HIRING: #4 above leads into this next question of hiring to succeed in B2B Sales. Transitioning out of founder-led sales - When should you hire your AEs and SDRs to make sure you can deliver on your growth targets? This article is a little introduction to the tool, and the tool itself is a Google Worksheet and needs your ACV and sales cycle length metrics to work.
  6. PPG: Grab your tech dictionaries, everyone! I have a new acronym for you: PPG or People Powered Growth. PPG is a derivative of Product-led growth consisting of a cross-functional team with both customer-facing 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.
  7. CI/CD: Continuous improvement (CI) is not just a process that dev teams use to iterate and ship software quickly. The method identifies opportunities to reduce waste and streamline work within any department or team. CI can easily be confused with Continuous Deployment and Continuous Delivery - but they are not the same. This article from Angel.co helps clarify the differences and makes the case why CI is the optimal dev strategy for delivering outstanding customer experiences.
  8. DEMO: This one is interesting to me - as the path to Demo is precisely the primary call to action my website is designed around. I assume it is the same for many of you B2B people, so..... "Should Your Website Drive Prospects to a Demo?" Take a read of the article to determine if this is a problem at your startup.
  9. PITCH: Pitch Decks won't be replaced anytime soon, even though people are trying some nifty ways to bypass them. So, according to TechCrunch, these are the five most critical pitch deck slides most founders get wrong, and here is a monster collection (139!) of funded pitch decks here (including the neo-classics: AirBnB, LinkedIn, Intercom, Transferwise, Canva, and Sendgrid).
  10. CASE STUDY: HubSpot's turn because I use them - this is another SaaS company that has managed to cross $1b in ARR (and growing at about 30%!!) even though I renegotiate lower rates with them YoY :-). They have been around for 14 years but didn't really get started until about 2011. You can watch the $0 revenue to IPO breakdown here too.


WAIT A MINUTE - BONUS: This is a cool one sourced from the FKA Newsletter focused on what happens on the internet in a given minute in 2021 now that the global internet population is 5.2 billion (up from 4.5 billion last year).
POD OF THE WEEK: Are you still a bit confused about #6 above? As in" "isn't that just describing Customer Success?" Well, no. Take a listen to this podcast to help clear things up a little by describing PPG from an agency perspective.

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