Top 10 in Tech - What to know for Week ending July 12, 2024

1. SaaS METRIC OF THE WEEK: People are the most important (and expensive) metric for any company, especially SaaS (yes, I would argue more important than the actual product). Revenue per FTE is one metric to measure when it comes to company efficiency via people efficiency, but a better one, perhaps, is the ROSE Metric (Return on SaaS Employees). This metric highlights the tradeoffs between headcount, recurring revenue, and EBITDA growth of a SaaS company.


2. HOMEPAGES: The never-ending quest to create the perfect homepage. While there's no such thing as a "perfect homepage," there are certainly best practices you can follow. This article breaks it all down and claims to be the ultimate guide.


3. GROWTH: This fantastic read by the team at Reforge argues that choosing between monetization and growth is a false dichotomy, suggesting businesses can successfully balance both for sustained, scalable success and also outline Growth as a system with three elements: acquisition, monetization, and retention.


4. CHARTS: This is a fun one. "Friends Don't Let Friends Make Bad Graphs" is a GitHub article outlining some good and bad practices in data visualization. It includes examples and explanations.


5. AI ADOPTION: Even though apparently 60% of us released GenAI features last year (see #3 in last week's newsletter), Tomasz Tunguz notes that AI adoption remains slow in some areas. (Opportunity time?) Security, legal complexities, and meeting procurement standards seem to be the top reasons!


6. GTM DATA: I needed this over the past two weeks. GTM partners have a really pragmatic article covering essential metrics and KPIs for your go-to-market strategy (at different stages), covering inbound, outbound, PLG, partner, community, and event-led growth. After all, you can't manage what you can't measure. It has scorecard templates, too!


7. VERTICAL SAAS: Many Big Tech companies are under threat from narrowly focused SaaS companies taking market share in niche areas and building massive businesses. Check the difference between vertical and horizontal SaaS here, and then take a look at how these vertical SaaS companies are taking market share from those cloud giants and how AI and Vertical SaaS are the outliers to achieving solid growth in this current market.


8. GROWTH: Dealroom explores the traits of top-tier SaaS startups, focusing on growth rates, unit economics (my new fav is Revenue per employee broken down by company size - see #1), and retention. Key factors include innovative products, efficient sales models, and scalability.


9. DILUTION: This is a fantastic Chart from Carta: How much equity dilution is normal? At the Seed and Series A stage, businesses usually see around 20% equity dilution. At later stages (Series C-D), dilution drops to ~10% per round.


10. CASE STUDY: Adding onto #7 above, some learnings on Vertical SaaS from Toast & Procore. Includes the importance of industry-specific solutions, seamless integration, and focusing on customer needs


POD OF THE WEEK: Funnel and revenue math, kindly explained by Mark Roberge and Matt Plank of Rippling in the Science of Scaling podcast.