Top 10 in Tech - What to know for Week ending June 14, 2024

1. SaaS METRIC OF THE WEEK: Multiples. Valuation multiples are so important for determining a company's worth. But they also seem so mysterious as they vary wildly based on growth stage, industry, and deal size. Dealroom has published a new multiples valuation guide with some great visuals and charts to help us all understand this mysterious metric better and also make data-driven decisions.


2. PRODUCTS: Balancing the needs of existing vs new customers is a hard product act to balance and that push and pull is nicely described in this article with some great analogies and tips on how to influence the product roadmap.


3. DIFFERENTIATION: This is a tricky question founders get asked all the time. Standing out in a saturated sea of SaaS is a tricky problem to solve - pro-tip - never do it on price alone. So ask yourself, "Why should someone buy from you?" It requires balancing familiarity and differentiation. Read this article to get you thinking about the topic more.


4. AI: Never first to market but traditionally excellent at execution, Apple introduced us to "Apple Intelligence" this week,  its own generative AI system designed for pretty much the whole lineup - powered by ChatGPT! The stock popped to an all-time high on Wednesday. Because this is the AI -Wars, Elon really didn't like the news and immediately threatened to ban any Apple Device in his companies, including visitors - lol. Then, the next day, he withdrew his lawsuit against OpenAI (no reasons given yet).


5. AI VOICE: With the release of ChatGPT4o, AI Voice seems to have reached a mass audience. I talk to my ChatGPT phone app daily. Hot on the heels of that, A16z released their thesis on the AI Voice stack (highlighting Play.ai as one of the leading full-stack players, the ChatGPT of voice)—you can view the thesis via their Gamma AI presentation app here. AI voice agents are transforming phone interactions, and there are some promising applications across various sectors.


6. SPVs: One for your tech dictionaries. Special purpose vehicles, or SPVs, are where multiple parties pool their money to share an allocation of a single company. And because AI is so frothy right now and small investors can't invest directly, they can only buy via SPVs (which are risky and have high fees).


7. COMPENSATION: I see a founder compensation report, and I list it. (Don't forget about the TechCrunch article from last year that recommended that founders pay themselves rather than doing it for the equity.) So how much? Take a read of this US-centric Founder Salary Report from Pilot. TLDR, the median amount is $132K, the average is $142, and for pre-seed companies, that median is closer to $100K.


8. VALUATIONS: If you are ready for a long read extending off of #1 this week, this one is for you on Startup valuations with a VC lens. It's a very detailed article on startup risk and how these risks factor into how VCs underwrite their valuation decisions. For any startup operators, this article is a gold mine of insights into securing stage-by-stage financing, validating go-to-market hypotheses, and focusing on building strong teams to help address those underwriting risks.


9. INDUSTRY: ChartMogul's May Benchmark data is out and shows that growth mirrored April (as in, we're still at the "it's not getting worse" phase). Growth rates remain steady. But drilling deeper reveals some potential positivity (or rather not-negativity): Retention rates remain steady at 63%, and certain ARR and ARPA bands saw some improvements. We need to check in for next month to see if these persist.


10. CASE STUDY: GROWTH HACKS. This is a fun case study of unethical growth hacks used by Startups in their early days. Starring Uber (and their legendary Greyball System, and if you haven't watched the TV show yet, I highly recommend SuperPumped), Reddit, YouTube, Facebook, and OpenAI.


POD OF THE WEEK: Here is a deep dive with Harry Stebbings and Jason Lemkin into seed investing (where things are expensive and limited with a broken pipeline to IPO).