Top 10 in Tech - What to know for Week ending January 26, 2024

1. SaaS METRIC OF THE WEEK:  Developer productivity - There are two primary frameworks for measuring developer productivity: DORA (with a free poster!) or the GitLab source. Five metrics for a four-letter acronym to measure DevOps performance and SPACE - a more holistic framework for productivity. And also as a little bonus, how to measure DevEx (Developer Experience)


2. MARKETING: The main goal of any marketing campaign is value-based. I'm trying to convert people who consume some of our marketing efforts into happy customers. Knowing what works can be hard to impossible: measuring ROI, attributing revenue, measuring brand awareness, overall campaign success, etc. So, if you can relate, bookmark this marketing attribution dashboard. It covers all the attribution model types and metrics, best practices, tools de jour, and more.


3. COMMISSIONS: How to pay your different sales channels? Commission levels of sales are pretty stable across sale types at about 10-14%. Commissions on renewals is 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).


4. PRODUCT MARKET FIT: A long-running Growthism in the Startup world is that getting to $1m of ARR is a strong sign of Product Market Fit (PMF). Kaitlyn Henry from Openview runs contrary to this, stating that there's no specific revenue indicator that defines PMF details other signals of PMF available beyond a $$ amount and gut feel. Read more about all those signals here. This sits well with Brian Balfour's work, who wrote a fantastic article on the subject that is now almost ten years old and still incredibly relevant for figuring out what stage(s) you may be at and we have a Product Market Fit Report to help founders benchmark their progress against others on the same path: Only 56% believe they have product-market fit and 29% believe they will do this within the first 12 months of founding. 


5. GO TO MARKET: Go-to-market motions can be quite specific, and your GTM motions can impact your marketing strategy and your org chart. Robert Kaminski has distilled GTM motions into five types in this article based on the number of use cases; the summary diagram at the bottom is excellent.


6. MARKET CONDITIONS: According to Gartner, Worldwide IT spending is forecasted to pass $5 trillion in 2024, up 6.8% from last year, but re-forecast down from the previous quarter's forecast of 8% growth. Interestingly, the Services side will become the largest segment for the first time - transformation projects are in full gear. But we care about software spend! Which is carrying the team at 12.7% growth and is flat from 2023.


7. EQUITY: This bookmarkable series from Femstreet covers the startup founder's guide to equity. Don't worry about Part 1 - it's a very basic primer. The good stuff starts in Part 2 and covers the different types of equity at a startup (founder, investor, vesting, liquidation, pro-rata, etc, etc), and Part 3 covers cap tables and things you can do if they are messy.


8. VENTURE-STRAPPED: I googled this term already, and it's unique! It's my term for your tech dictionaries for a hybrid startup that is a mash-up of the old debate of bootstrapped vs. VC financing and applies to startups that raise only once. Which anecdotally is a more common practice in these new market conditions (and includes Klaviyo and Zapier). Jason Lemkin notes this new one-and-done third way.


9. R&D: Research and development are significant components of any competent software startup, and often, public R&D incentives (via grants, tax breaks, or deductions) align well during difficult early and growth phases. But in the US (the world's largest software buyer and seller market), there was a Tax change way back in 2017's Tax Cuts and Jobs Act that is impacting many startups and Tech Companies tax bills, thanks to a provision that changes how R&D costs are deducted - a percentage of layoffs we have recently seen and perhaps about to be seen (along with the rapid cooling in the tech hiring market) may be attributable to this. AXIO dives deep into the problem in this article as I do in the Top 10 Expanded.


10. CASE STUDY: MISTAKES: I saw this original presentation from Anand Sanwal of CB Insights way back at SaaStr back in 2017 - but it's memorable because of its Silicon Valley (the TV Show) like accuracy of things not to do: 100 things NOT to do when building a SaaS company.




POD OF THE WEEK: PLG Bonus from the GTM post at #5 above Mark Roberge at Stage 2 Capital gives some PLG context on Go-To-Market Strategies. The slide deck from the presentation can be found here.