Top 10 in Tech - What to know for Week ending July 19, 2024

1. SaaS METRIC OF THE WEEK: Renewal rate: You have to scroll down to the bottom of this article before you get to the informative bit on measuring this metric (I could also link you to this one). But please read the first part, too - it's great.  TL;DR: Don't be a jerk when it comes to renewals. If you have to be, maybe it's you, not your customers (and then keep scrolling again to see the five main reasons why people unsubscribe). This additional article from Profitwell on Renewal Rates also describes the differences between retention and renewals.


2. COMMAND: This is always a much-needed read. Being 'in command' of your business doesn't mean you're in control, and that's OK—it involves proactive, agile leadership that drives change, acknowledges challenges, and seeks solutions, ensuring autonomy and accountability for success.


3. VALUATIONS: Wait - what now??? According to some Pitchbook data fresh from the press last week, early and late-stage VC deals (so not Seed or pre-seed) valuations in the U.S. reached all-time highs in H1 2024. Sounds promising? Pinch of salt time though: it's date from much lower deal volumes of primarily strong companies. Right at the start of the article though, IVP's general partner, Tom Loverro, asserts that us startups that survived this period should shift from cash preservation to growth mode (did we not learn anything??).


4. INDUSTRY: What is Old is New Again. This is a great article reviewing Gergely Orosz's recent talk, in which he discusses the profound recent tech industry shifts and their impact on business strategies, software engineering, and layoffs. It all comes down to interest rates, IPOs, and VC funding changes that have reshaped the tech industry.


5. AI: This is a super interesting thread I wish wasn't just a Twitter post. I also agree with it and actually had a partially drafted essay on it, which motivated me to finish it. I was an original rack and stack infrastructure engineer, which all changed after virtualization and the public cloud. Engineers will not be replaced by AI, but so much day-to-day work is boilerplate that their roles, like mine, will be abstracted up toward design and outline. Why type when you can write?


6. SDRs 1 of 2: SDRs and AEs are putting in way more effort to get less results these days than in the past. It's hard out there. So, if you need to build out SDR teams in your business (see here if you should—you need to have a minimum $3- $4k ACV product), Bessemer Venture Partners has a great article on how to do this well.


7. SDRs 2 of 2: Benchmark time to compliment #6 above. Look at the 2023 SDR Bridge Group SDR Survey for great benchmark metrics, such as how long does it take for an SDR to ramp? (According to past studies, time to ramp for an SDR averages about 3.2 months.)? And how many calls does it take to book one meeting? What about SDRs: AE ratio? This article goes all out and pitches a Mendoza Line for sales reps based on value to the company (not just quotas). BONUS: SDR compensation calculator (Excel).


8. FUNDS: According to end-of-H1 data from Pitchbook, the global VC market continues on a downward spiral in fundraising, with what looks to be the lowest amount of capital raised since 2015. Pitchbook uses the word "Grim" to describe the market, which, of course, has big implications downstream for startups' access to capital.


9. GROWTH: ChartMogul reports further sluggish SaaS growth in H1 2024, with median growth rates at 23%-ish, compared to 30% in H1 2023, 46% for 2022, and 63% in 2021 (on the positive side, it seems to have flattened). Customer acquisition costs are rising (see #6 above), and churn rates have slightly improved. Economic uncertainty and market saturation are the two big factors still impacting growth.


10. CASE STUDY: Most of us should be so lucky to get to this stage, but how do you raise funds beyond Series B (roughly 15% that raise Seed make it to Series B)? Scale Ventures' Stacey Bishop gives the lowdown.


POD OF THE WEEK: The YouTube presentation of #4 above. A review of the past 18 months has seen major changes reshape the entire tech industry almost overnight.