Top 10 in Tech - What to know for Week ending May 24, 2024

1. SaaS METRIC OF THE WEEK: ARR. Two cool publications. The first one was sent from a buddy of mine, "The Ultimate Guide to ARR," which offers practical advice on measuring, influencing, and reporting ARR based on experiences at Intercom, Atlassian, and Stripe; the second one is from Bessemer Ventures and claims to be a founder's roadmap to $100 million ARR.


2. MVSP: Here is one more for your tech dictionaries - MSVP stands for Minimum Viable Secure Product. This is a simplified security checklist for B2B software and outsourcing providers. It outlines essential controls to ensure a minimal yet effective security posture. Not quite the SOC/ISO/APRA level stuff some of us have to deal with - but great for those of you outside of Enterprise and Financial Services.


3. SHAPE UP: This is the annual refresher for your tech dictionaries and reading list. Software product development requires innovative strategies based on today's cadence expectations of continuous integration, micro-services, feature delivery, and scale. The team at Basecamp (I'm an old-school fan) has developed ShapeUp, their publications, and toolbox of techniques designed to eliminate chaos when it comes to designing, prioritizing, and shipping products/features.


4. SEED: Carta's latest report takes a look at investments into pre-seed/Seed Stage companies - SAFEs are the most common instruments in pre-seed financings, most pre-seed rounds are around $1M, and the typical valuation cap is $8-$10M. 88% of pre-priced rounds use SAFEs instead of convertibles. This underlines the ongoing shift towards more flexible and founder-friendly funding mechanisms.


5. INVESTMENTS (AI): Silicon Valley/Bay Area is still dominant and secured more than 50% of all global investments into AI startups last year, according to Crunchbase (and that's nearly double the prior year's total: $27B vs. $14B). Despite repeated claims of its imminent demise throughout the years, Silicon Valley ain't going anywhere anytime soon.


6. INVESTMENTS (AI): The bubble builds? AI valuations are soaring big time, with early-stage AI companies valued above $70 million and late-stage at around $100 million in Q1 2024, according to this PitchBook report. While the rest of us in the VC landscape see an increase in flat and down rounds, AI remains a top focus for investors. Some investors out there (such as Sierra Ventures) are calling for a more diversified approach within AI and caution against the short-term hype we have seen a few times before. There are already some signals that not all is well. Gross Margins may not be that great, either.


7. GROWTH: Coming off the back of last week's quite popular post on Growth Marketing - is it even marketing in the first place? I like this find, and I've been sitting on it a little while - but share it with your marketing team: The Strategic Growth Calendar Framework is a year-long blueprint that combines "Always On"growth channels with impactful "Marketing Moments." Emphasizing integrating steady, foundational channels like SEO and email with high-impact campaigns such as product launches, events, influencer collaborations, and the like. Aligning these strategies with seasonal demand over your calendar year optimizes planning and (hopefully) continuous/steady growth throughout the year.


8. AI LEAD GEN: I had a bit of a unique GenAI moment this week, my first inbound lead from ChatGPT and hopefully not the last. Do we need a form of LLM SEO? Meta is also now sticking generative features into its core advertising platform, which lets ads be generated programmatically. The big question here: Will my organic traffic disappear because of AI?


9. ADVISORS: Startups need them; often they can be a little over plentiful and a little predatory. If you find a sound advisor, how should they be compensated? Peter Walker from Carta has some data for you. TL;DR market rates are 0.23%-0.07% median based on stage unless full-time hires who get 1% typically.


10. CASE STUDY: Squarespace is now part of the $1 Billion+ ARR Club with $1.1 billion in annual revenue. They have also decided to delist and go Private. At private sale, they were valued at $7 billion, which works out to be about 6x ARR and growing nearly 20% YoY.


POD OF THE WEEK: Adding onto #1, Funnel and revenue math kindly explained by Mark Roberge and Matt Plank of Rippling in the Science of Scaling podcast.