1. SaaS METRIC OF THE WEEK: Beyond Customer Satisfaction Surveys or Net Promoter Scores is this idea of a Customer Engagement Score. This is a valuable tool for managing a company's customer base, making segment decisions easy, therefore enabling different priorities and engagement strategies - and measuring the impact of those strategies over time. So get started reading this article.
2. VALUE-BASED PRICING: It's a tough nut to crack as it makes the most of the maximum cost customers would be willing to pay for a product or service - this means there is no magic guesswork or thumb-suck number. These prices need to be arrived at Empirically. Paddle.com have a pretty good guide on what this means (with examples), and Profitwell has a comprehensive guide on making it happen (and how to go about calculating/measuring it).
3. PRODUCT BENCHMARKS: For those starting or deep into product-led growth, this report is for you. It's year 3 of the Openview product Benchmark Reports - downloadable here. Products continue to perform well as acquisition, conversion, and expansion tools, so this is an excellent report to gauge what's good vs. what is great for product conversion. In a hurry to benchmark yourself? Use this interactive calculator to see how your user journey compares to businesses of a similar size and scale. FUN FACT: 61% of companies in the Cloud 100—including Calendly, Amplitude, and GitLab—leverage a PLG model.
4. CUSTOMER JOURNEY: What the heck is a Customer Journey anyway, and why do you need to create one? OK - so now you know you need one; mapping out a Customer Success Journey via a visual map is a great way to tell what areas a Customer Success Team need to be involved in (and what their responsibilities will be) via a variety of engagement models. And a "complete guide" with some great, modern templates can be found here.
5. VALUATION MULTIPLES: By now, we all should be aware that Companies looking to raise in 2022 should be prepared for a compression in valuation and possibly a down round. This article has looked at valuation multiples based on the SaaS Capital Index and the Bessemer Emerging Cloud Index for insight. This chart, in particular, is interesting - as it shows that most of the crazy valuation increases in 2020-2022 are attributable to companies added to the index since 2019. Growth is still the most crucial valuation driver.
6. FUNDING: Backing up #5 - According to Crunchbase News, global venture funding continued downward for May '22. $39 billion in total, which is down 14% from April. Good news! It's mainly on the big-deal end of town. The seed stage is fairing pretty well - no real change from April ($3.1 Billion).
7. CLOUD: Battery Ventures historically published an annual Cloud Report, and while attempting the 2022 version, the market was changing so fast that they had to keep re-writing it. So they have switched to a Quarterly edition, which you can view here. It's a dense 40-page document, but, as we know, valuations have plummeted, and the big takeaway is that investors are shifting their focus quite dramatically from growth to profitability.
8. SUPER PUMPED: OK - So I super binged SuperPumped (aka Uber: The Travis-Bro Years) last week and really enjoyed the show. Bill Gurley is one of the main protagonists and a real-life Silicon Valley VC - so sure enough, he is getting some press at present. Fair enough - he is a legendary venture capital investor known for betting big on companies outside of Uber, such as Dropbox, Instagram, Snapchat, Twitter, and Zillow. This is a deep dive into his 25 years of experience via every blog post he's ever written.
9. COGS: Not every listing I write has to be exciting; important is just as important. SaaS P&Ls are structured in specific ways, and defining what goes into the cost of goods sold (COGS) section is....important. So take a good read of what the SaaSCFO recommends to include. Bit of an eye-opener for me - where do you record your Support, Professional Services and Customer Success expenses?
10. CASE STUDY: Slack! I've written before on the fascinating week in the life of Slack CEO Stewart Butterfield via a Tweet storm - but this week (and complimenting #3 above) is the Slack growth formula of getting from 0 to 10 million users. PLG, of course - but it was called "going viral" or "growth hacking" back in the early days. These days Slack is at about 12 million users and was acquired by Salesforce for $27.7 Billion at the end of 2020.
POD OF THE WEEK: From SaaStr, a VCs perspective on where the venture markets really are today (recorded late last month).