1. SaaS METRIC OF THE WEEK: Another from Andrew Chen of a16z this week (who is now LA-based - see #3 below as to why that's important): An 80-page slide deck of the red flags and magic numbers that investors look for in your startup's metrics. The article is the best part due to Andrew's commentary, but if you want the PDF I got, just click here.
2. PR: Getting good PR if you're an unknown startup is hard (and also can be seen as a low priority in the endless stable of things-to-get-done) - but it's not as hard as you think without a publicist. Here is a great 101 article from Point Nine Capital (they call it PR for dummies) on how to get great press coverage. ChartMoguls also have this article late on PR for SaaS - with some sample scripts!
3. UNBUNDLED: This is a great read (at least for me). For years the common VC adage was that if you are not located in Silicon Valley or in later pre-COVID years, San Fransisco, you ain't worth considering. But last month, Andreessen Horowitz (aka a16z) declared that Silicon Valley, the Region, is philosophically over and that their "headquarters will be in the cloud" going forward. I think this is a pretty big deal for most global Tech Companies - read more via this interview.
4. MARKETING: For me, the main goal of any marketing campaign is value-based. I'm trying to convert people that consume some of our marketing efforts into happy customers. Knowing what works can be complicated: measuring ROI, attributing revenue, measuring brand awareness, overall campaign success, etc., etc. So bookmark this marketing attribution dashboard like me: It covers all the attribution model types and metrics, best practices, tools de jour, and more.
5. COMMISSIONS: How should you pay your different sales channels? Commission sales levels are stable across sale types at about 10-14%. Commissions on renewals are only 3%, and upsell is 9% - however, about 50% of the time, this is not paid at all. (Bringing up another subject on how much revenue a Customer Service Manager can manage).
6. VENTURE: According to The Entrepreneurs Report for 1H 2022 from Wilsons Sonsini, eleven percent of Series B and later financing deals were considered down rounds, the largest share of down rounds since the beginning of the COVID pandemic (Q2 '22). Flat rounds have also increased to 7%. However, valuations are still rising (in series A and B deals).
7. BRIDGE LOANS: In the Wilsons Sonsini report above, Median bridge loan amounts decreased for both pre-and post-Seed companies in Q2 22 and had shorter maturity periods (50% had less than 12 months), so understanding Bridge Loans may be more critical now than ever. Here is how Fred Wilson likes to structure investor Bridge Loans.
8. NET INCOME: In 2020, revenue growth was the most important factor explaining a public software company's forward multiple. NDR has been popular of late - but none of these dramatically matter anymore - it's now Net Income.
9. PRICING: As stated in previous newsletters, pricing is never correct, and we are not charging enough. But 2022 is adding another challenge to our attempts at pricing: Inflation and a recession. FastSpring chimes in on this by deep diving into these challenges via this report. Fun Fact: 37% raised prices by over 10% between Q1 21 and Q1 22. Those that did raise prices grew 15% more than companies that didn't, demonstrating an older article that a 1% increase in price can generate up to an 11% increase in your profits!
10. CASE STUDY: Shopify has been in the news a fair bit lately, and their pandemic boom may be over. But they are still reporting revenue of $5B ARR! Jason Lemkin of SaaStr looks at the top 5 interesting things from their last financial report.
POD OF THE WEEK: Complementing #9 above is from SaaSclub: SaaS Pricing Strategy: Top 5 Mistakes to Avoid