Top 10 in Tech - What to know for Week ending June 7, 2024

1. SaaS METRIC OF THE WEEK: Net Dollar Retention is an important metric in product-led growth and consumption-based operations. It helps answer the following: Does my startup need to increase customer acquisition/marketing spend? Crunchbase has already done the work to calculate what good NDR benchmarks should look like, and Tomasz Tunguz looks at what it takes to achieve 200% NDR!


2. M&A: Navigating some kind of acquisition process is a relatively unexplored topic in this newsletter, so check this guide to running an M&A process as a Founder from First Round Review.


3. FUNDRAISING: Carta has a great LinkedIn post that provides a snapshot of the key fundraising metrics from the last quarter. Benchmark yourself! Pre-money valuations for rounds held steady for Seed and Series A, with slight median growth for Series B and C and an upward trend in total amounts raised across most stages.


4. MARKETING: Enterprise Marketing is difficult, and the fun part is that it's getting increasingly harder, yay. 42agency has a great article with 10 different Enterprise Marketing playbooks for you to review. They also introduced me to a new app, Clay, which looks to be a super useful tool (but a little pricey).


5. AI: Adoption is ramping in many areas; 4 in 10 e-commerce marketers use AI for customer service and support, and Andrew Chen notes many more use cases. McKinsey also notes that businesses that adopt AI are seeing benefits like cost reduction and revenue growth.


6. SUPERCYCLES: This is a genuinely great read IMO and one that dives deep and also makes the claim that the first golden age of SaaS is decidedly over, as it's the dawn of AI-SaaS (hard agree from me) and tying it all back to capex/opex cycles and now CPU/GPU cycles (and their commoditization). But there is a lot to absorb here; to me, it's a more-than-one-read-through article.


7. FAILURE: It's a common tech-ism that innovation needs a lot of failure before success, something businesses often do not culturally configure. CB Insights has analyzed almost 500 startup failure postmortems - PMF, Cash, and Team Dynamics (see #9 in last week's newsletter!) play pretty consistent roles across the board.


8. TESTING: According to ZipDo Essential A/B Testing Statistics, 70% of marketers believe that A/B testing is essential to boost conversion rates. When running A/B tests, get started with this refresher and then this Step-by-Step Guide. Go Practice has some great advice on how to make these experiments run faster, too.


9. SENTIMENT: The Clouded Judgement Substack is always full of really interesting data. This week is all about sentiment and the current sentiment in the software industry is not looking great. This is mainly due to disappointing Q1 earnings and lowered Q2 guidance (70% of companies are guiding a below-expected Q2). The biggest issue is that growth has slowed, making revenue multiples less relevant as a valuation metric. Investments in AI are causing additional traditional software apathy, and interest rates continue to add pressure to valuations.


10. CASE STUDY: Building AI features is a risky move, as, realistically, you can't know the quality of an AI response without building the system to see an actual AI response. So check out this great case study from dopt.com, which makes the mind-bending observation that "you must build AI to learn what AI is valuable to build."


POD OF THE WEEK: Lenny of Lenny'sLenny's Newsletter interviews Cameron Adams, co-founder and chief product officer of Canva, who now have 150 MAU in more than 190 countries, and $2.3 billion ARR (and ready to IPO next year)