Top 10 in Tech - What to know for the week ending August 20, 2021

1. SaaS METRIC OF THE WEEK: RULE OF 40: What is the 40% rule for SaaS companies? This video explains more but basically, when a VC-backed SaaS business (of over about $2m in ARR) adds profit + growth rate, the total should be equal to 40% or more. This helps calculate the cadence of a business: The faster they grow, the less profitable they need to be. Rule-of-40 stocks have outperformed the broader indices and IT benchmarks over the last 15 years.
2. GROWTH: Five ways to build a $100M business - just follow this simple video, or read this article, find your target market animal spirit, and you are good to go. This is a fantastic way to think about customers, segments, pricing, and cohorts.
3. STRATEGY: As an expansion on above, because there are many different ways to build a SaaS business, it depends on the “animals spirit" of the target market as to which strategy is best.
4. MARKETING: There is a multitude of marketing strategies organizations can deploy that are relevant for their line of business and target audiences from pay-per-click to content marketing. Bloom list the differences between the three main categories. Cutting to the chase though, creating a solid marketing strategy is no walk in the park, so take a look here on how to create a solid one in 7 steps. (BTW - benchmarking budget - Marketing teams spend 5-10% of a companies ARR).
5. TEST TEST TEST: Evaluating the functionality of a software application at every stage is critical to shipping something awesome. Take a good read of this PDF guide (along with real-life examples) and then bookmark this Google Site page for a comprehensive list of the Stages of Test Development. That's list is kind of old school though - so take a read and sprinkle some of this more modern (ie Agile) take on testing. into your QA world.
6. 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?
7. DEVELOPERS: The results from the Stackoverflow 2021 Developer Survey are out and the report is full of insightful nuggets: Developers primarily learn online (60% of respondents learned how to code via online resources), AWS is the most widely used cloud platform but GCP and Azure made some gains, devs are still mostly men, and this year React.js surpassed jQuery as the most commonly used framework.
8. TIKTOK: Significant news in the social media circles and perhaps the end of an era: TikTok surpassed Facebook as the world's most downloaded app. And here is a fact that blew my little mind: Users spent 2.8 billion hours on the app, which equates to nearly 320,000 years last year.
9. STARTUP SALARY: How much should you pay yourself as a founder after raising some capital? There are lots of good answers and also lots of different situations. A good rule of thumb according to Nathan Latka is if you’re a two-co-founder business and just hit $1m in ARR, you should each be making about $100k per year and increase to $150k at $2m in ARR.
10. CASE STUDY: Excuse me while I clutch my pearls but this is a story about <gasp> a pivot from being a Product Led business to an Enterprise Sales based organization - but it's a well-documented story and a really important change in narrative focus from ‘Sell & Forget' to ‘Sell & Nurture'.

POD OF THE WEEK: Expanding on last week's popular post on Moats I'm delivering the Podcast version of Jason Lemkin's article on Top 10 Moats in SaaS.