1. SaaS METRIC OF THE WEEK: Usage-based pricing and MRR/ARR models are often mentally hard to compute collectively (I know this from experience), so this article was a sight for sore eyes earlier this week, discussing the mental mapping required from Annual to Monthly and Usage-Based Metrics (and introducing Implied ARR) from David Kellogg.
2. SCALE: This is a must-download. Mark Roberge, the founder of Stage 2 Capital and member of the founding team at HubSpot, has launched this great playbook for scaling. In this detailed book, Mark has defined different stages of scale, established quantifiable measures for each, structured the sequence and signals of when to move from one stage to the next, and explored the optimal go-to-market design of each one.
3. CYBER: Gartner's new report forecasts that enterprises will spend $188.3B on cybersecurity products in 2023 - most of that will be my annual Cyber policy :-) - and growing to $262B by 2026.
4. CHURN: In this post, Lenny Rachitsky asks, "What is a good monthly churn for a SaaS business?". Zero is the obviously correct answer - but he took to a benchmarking exercise and sourced good data to develop this chart. For B2C SaaS: 3% - 5% churn is GOOD, and less than 2% is GREAT. For B2B SMB: 2.5% - 5% is GOOD, and less than 1.5% is GREAT. For B2B Enterprise: 1% - 2% is GOOD, less than 0.5% is GREAT.
5. AWS MARKETPLACE: I just listed our B2B SaaS on the AWS Marketplace this week - it's hard. So to celebrate, here is a teardown from Protocol into the AWS Marketplace, where we startups can sell our cloud services to enterprise customers (and AWS transacted over $1 billion last year).
6. FINTECH: From Coatue is a report on all things fintech for 2022 - great for any of you in the FinTech space looking for solid data sources. It also highlights two impressive things: 1) FinTech is the most dominant cloud category across the tech ecosystem (slide 6) and likely because Financial Services has the largest gross profit pool across every significant sector (Slide 8).
7. BIG TECH AND CLOUD: Lots of high drama and intrigue in the Big Tech scene these last couple of weeks, and MASSIVE amounts of value wiped out in Stock Market sell-offs, Big Crypto is technically less volatile. These businesses are really being tested - but FYI - the Big Cloud ones are still getting bigger - public cloud has a $1.5T run rate.
8. SALES EFFICIENCY: Tomasz Tunguz is coming through with a banger of a post this week and taking a deep dive into Sales Efficiency both through and post the COVID era. Since 2016, on average, in Public SaaS, sales efficiency has dropped from 52% to 47% (a drop of about 10%), and he notes that it ain't COVID - it's competition that's creating the slide.
9. MONETIZATION: What are the best ways to monetize based on market segment? For the SMB market (100-200 employees), self-serve is critical. Product-led sales are optimal in the mid-market (200-1000 employees). At the enterprise level (1000+ employees), sales-led reigns supreme. But a bigger question to ask (and Jason Lemkin asks it): How Cheap a Product Can You Have And Still Have Salespeople?
10. CASE STUDY: A read for your Coffee/Pomodoro break - it's about hyperlinks. We are breaking out the way-back time machine for this one (all the way back to 1993). This newsletter is jam-packed with hyperlinks. So here is a question that is not necessarily helpful for your business but one I have yet to consider: Why are hyperlinks blue?
POD OF THE WEEK: From Sachin Monga, a great discussion on the evolution and origins of the blog platform Substack.