Top 10 in Tech - What to know for Week ending January 21, 2022

1. SaaS METRIC OF THE WEEK: Churn. So, according to CatchJS, we're all calculating churn rates wrong. But if you love Statistics, the article is well worth reading and even gives some Python code to perform the more complicated probability-based equation they recommend. Is this not how you want to start your new year? Then check out this tool (as a handy Google Sheet) from Newfund as a way to analyze the strength of revenue streams for any B2B startup. A complimentary article outlining the methodology behind the tool is here (and you should read it first). Churn also has an interesting section in the report in #2 below.
2. BILLING AND PRICING: What are your pricing plans for 2022? Check this joint report from SaaS Optics and Chargify on B2B SaaS Trends in Billing & Financial Operations to benchmark yourself. Forty-Two percent of us opted for a sales-negotiated pricing model in 2021 — additionally, 37% plan to expand into new pricing models in the coming year. The most desired addition is a variable pricing model (such as consumption-based pricing), and ARR remains the top priority for most SaaS businesses.
3. PRICING SENSITIVITY: Reviewing pricing is critical in 2022 as a 1% increase in price can generate up to an 11% increase in your profits. So this week, let's also take a look at different concepts within pricing strategies starting with priced-based sensitivity, which measures the percentage of sales you will lose or gain at any particular price point relative to another lower or higher price point. Profitwell can explain this concept much better than me - so take a read of their article about how to measure and optimize it (check the Van Westendorp's Price Sensitivity Meter")
4. DUNNING: Also relevant this week, and check the churn section in the report above (#2) for metrics on involuntary churn. "Dunning" is a weird-ass name for involuntary churn (aka bad payments) - according to Baremetrics, SaaS and subscriptions businesses lose around 9% of their MRR due to failed payments on average. Learn more about a successful dunning (and pre-dunning) process here.
5. VENTURE: The Q4 2021 PitchBook Venture report is out (you can even get the Excel version if you prefer spreadsheets), with VC Fundraising topping $100 billion in a record year for venture capital. US VC-backed companies raised $330 billion in 2021, almost double the number for 2020 ($166.6 billion and prior record). $774 billion in annual exit value was also created by VC-backed companies (either via IPO or acquisition).
6. DUE DILIGENCE: The ever-increasing adoption of cloud-based software exacerbated by Covid also creates more exposure and risk to bad actors looking to exploit vulnerabilities. Tech companies should be continually concerned about the security of the software being built. Security-based due diligence is a critical part of the sales cycle for those on the Enterprise side of town (there is a growing need for chief compliance officers example). OWASP can help you out here - it's a foundation working to improve the security of software - and maintains a Top 10 list of the most critical security risks to web applications and also how to pass those awkward, sales-friction-inducing, Enterprise Security Audits/Reviews….and finally how to get started with security as a startup.
7. GROWTH: Growth rate is more closely correlated with SaaS valuations than ever before, and this week, I enjoyed reading this article on how to accelerate growth in 2022 by Kyle Poyar, listing six areas to consider for your year-end/year-start planning
8. 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!
9. ADVICE: Looking for good SaaS Resolutions for 2022? Take a good read of this article from First Round Review: The 30 Best Pieces of Advice for Entrepreneurs in 2021 - I already have a couple of these on my list.
10. CASE STUDY: Stripe is (still) the largest privately held tech company globally - but how did they come out of nowhere to dominate the payments space? The answer: Developers! They focussed on going after developers — the leading group of people involved in integrating payments into all kinds of digital applications.

POD OF THE WEEK: Kickstarting 2022 with an a16z podcast on how to kickstart Network Effects looking at Slack and Zoom as prime examples.