Top 10 in Tech - What to know for Week ending January 31, 2025

1. SaaS METRIC OF THE WEEK:  NRR is one metric that has become a new modern gold standard for SaaS growth (see Pod of the Week below). So much so that ChartMogul has a trends and benchmark report:  industry average NRR ranges from 90% to 100%, and the top-performing SaaS companies achieve NRRs 120%+. It's an action-packed NRR report, though - lots of fantastic insight.


2. EXPANSION: Expanding from above (get it???) - NRR and expansion strategies are pragmatic and capital-efficient growth practices that any good SaaS company needs but are getting harder to come by. Top quartile companies have been hit hard, seeing NRR drop from 119% to 107%. But at scale, more growth is coming from expansion vs. new. The proportion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3% now. In comparison, the proportion of ARR gained from the new business has fallen from 62.0% to 57.9%.


3. TRIGGER TECHNIQUE. This is a new entry for the Tech Dictionaries; The Trigger Technique outlined in this article shows how to leverage customer interviews to learn what "triggers" potential customers' buying decisions. This information helps design more targeted marketing campaigns and boost sales.


4. RETENTION: Can your retention rate be too good? This is an interesting question this week, and Mostly Metrics explores the (surprising to me) downsides of high retention rates—like stifled growth and untapped revenue streams. It's well worth a read just as a reframing exercise.


5. AI part 1: Unless you were living under an AI rock this week, you may have noticed that a new AI Model, DeepSeek, stole the show, showing us all a few things: First mover advantage usually doesn't play out too well, constraints are a ripe spot for innovation (in this case US sanctions on Chips) and that AI commoditization was inevitable. It also ripped deep into the already established AI markets, giving Nvidia the most unwanted crown of the "biggest market loss In history" (about $600B). Yay to everyone's Stock Portfolio!


6. AI part 2: Fast follow to #4 above; Benedict Evans breaks down the real issue with AI models: it's not enough just to be better. As AI commoditization accelerates, differentiation shifts from model capabilities to distribution, UI, and product integration. The AI gold rush isn't just about who builds the best model—it's about who owns the customer (and why first-mover advantage is generally problematic)


7. AI part 3: This is a repost from a newsletter section late last year, but very relevant to #4 and #5 above this week. Every year, Benedict Evans goes on an absolute blinder in PowerPoint, exploring macro and strategic trends in the tech industry. This year's version (across a 90-page slide deck) is all about AI (again, as last year's presentation was "AI, and everything else"). This year's post is about the post-hype investment surge where proven market value hasn't yet been firmly established (by that, I mean investment vs. Value Creation), which Deep Seek may be close to cracking. He wrote this in November and noted back then (which seems to be like 5 AI years ago)  that scale is hard and REALLY expensive, which limits competitiveness (until last week). Slide 59 is the best TL;DR: The future can take a long time - unless US sanctions provide the ripe, constrained environment for quick innovation.


8. FRICTION LOGS: Another addition to your tech dictionary. Software and product design are never truly finished. Friction logs track every pain point in a product experience, helping teams pinpoint issues and refine UX. Want to set one up? Here's a solid guide on how to do it right.


9. VENTURE: The Q4 2024 PitchBook-NVCA Venture Monitor shows a venture market still in limbo. Exit activity remains really weak, with only 3.6% of exits exceeding $500M, but optimism is creeping back for 2025? High dry powder levels, a handful of strong IPOs, and potential rate cuts could shake things up, but valuation expectations are still holding back the IPO market.


10. CASE STUDY: Is growth still good? Ben Thompson tackles the "growth at all costs" dilemma with real-world examples from Meta, Uber, and Tesla. He unpacks how aggressive scaling strategies are now clashing with regulation, shifting market expectations, and economic reality—making sustainable growth the smarter play.


POD OF THE WEEK: From SaaS Stock, a podcast covering what makes a Founder, not a startup. investible (TL;DL) it's founder compatibility, and also companies with an efficiency edge, strong GTM potential and the right metrics (especially NRR - see #1 and #2 above).