1. SaaS METRIC OF THE WEEK: CAC payback (and accounting for the upsell). Often many base metrics (CAC, CAC/LTV etc.) are in service to VCs and operationally don't tell us enough to make good decisions. This article takes an operator view on CAC Payback that includes (and celebrates) the value of net revenue retention. Here is a very relevant essay on the importance of CAC payback in our current Bear/recessive market.
2. CUSTOMER SUCCESS - Quota: this is an expansion of celebrating Customer Success Teams' contribution as NRR and CAC payback referenced in #1 above. In past newsletters, I have referenced AE and SDR metrics and quotas. But what about renewal and cross-sell/upsell quota expectations within a Customer Success Team? Tomasz Tunguz takes a look based on a report a couple of years back from Gainsight. Most Customer Success Managers can handle between $2-$5M in ARR and between 10-500 accounts (but it varies based on segment/ACMR).
3. PLG PILLARS: Last week, my post on Product Led Groth was popular, so I added another PLG link this week that focuses on leveraging community play strategies with a PLG mindset.
4. SENTIMENT: Earlier this year, Tomasz Tunguz conducted a survey on Market Conditions and shared his insights in last week's blog post. TL;DR: 30% of respondents are seeing longer sales cycles. Companies selling to mid-market and enterprise see this pattern with about twice the frequency of those selling to small businesses. Longer sales cycles may be a leading indicator of slowing demand...
5. NO, NADA, NOPE!: An overlooked skill is how to say "No" well. This post was triggered by an article shared by one of my team from a programmer's perspective, and it's just way too good to not share as it is one of the most important skills a programmer can learn. TL;DR - it's all about keeping the code base small and solving the right problems/jobs! On the flip side - when it comes to selling, "No" is almost a curse word. So this article goes into depth about ways to be Yes, rather than have to say no - it's a great way to think about how to say yes through the product. Want to get started on your "no" journey? Here are a bunch of templates for ya!
6. LAYOFFS: Question of the quarter: Is the Tech Industry heading toward mass layoffs? According to Layoffs.FYI, a layoff tracker, over 16,000 tech workers lost their jobs in May and June is off to a similar start. It's not as bad as the initial COVID layoff freakout - but it's the most significant bump since - but is this just a freakout phase or a new pattern? Read here for a deeper dive that's updated often.
7. AI: I moderated a panel on AI in the insurance industry last week, so, FYI, the era of machine learning has arrived! I said as such. A Google Engineer backed up my claim earlier this week by claiming a Google AI was sentient (and also asking for a lawyer, so........). CB Insights has just published AI trends to watch in 2022 following all of AI-based technology's positive and negative roles: Protecting the metaverse, the $67B AI chips race and weeding out all those deepfakes and Elon's fake Twitter accounts.
8. IDEAS: here is a framework for managing them - I found this a beneficial article with a template that is now on my wall! An HD version of it is here. A little bonus is a compilation of mental models that entrepreneurs and investors leverage to develop new startup ideas & venture theses from the same author.
9. VENTURE CAPITAL: What is the overall impact on the VC world in an economic downturn? We already know that deal cadence and valuations have rapidly cooled, but what about the rest? Take a read of this article for more (including the upside).
10. CASE STUDY: ZOOM remains a total SaaS and PLG rockstar company. Last we visited Zoom in this section (March '21), they were at $3.5B in ARR, not just a year-and-a-bit later, they are at $4.3B. They have an extremely optimal payback period of about 3-months and a net dollar expansion of 130%+ while spending just half the average SaaS company spend on sales & marketing (25% vs. 50% of revenue).
POD OF THE WEEK: How to value startups from the team at This Week in Startups interviewing the CEO of Aether, Ryan Shearman.