1. SaaS METRIC OF THE WEEK: Churn. So, according to CatchJS, we're all calculating churn rates wrong. But if you love Statistics, the article is worth reading. It even gives some Python code to perform the more complicated probability-based equation they recommend. Is this not how you want to start your new year? Then check out this tool (as a handy Google Sheet) from Newfund as a way to analyze the strength of revenue streams for any B2B startup. A complimentary article outlining the methodology behind the tool is here (and you should read it first).
2. BILLING AND PRICING: What are your pricing plans for 2023? Check this joint report from SaaS Optics and Chargify on B2B SaaS Trends in Billing & Financial Operations to benchmark yourself. According to this report, Forty-Two percent of us opt for a sales-negotiated pricing model. Additionally, 37% are planning to expand into new pricing models. A variable pricing model (such as consumption-based pricing) is the most desired addition. ARR remains the top priority for most SaaS businesses.
3. PRODUCT: Now matter how much Workshopping and strategy development go into a Product, things don't always work out IRL. First Round Review is back again this week to discuss this topic and have a list of things to avoid when building highly-technical products.
4. DIGITAL TRANSFORMATION: I learned this during the GFC recession: Inflation and other economic factors pressure below-the-line business costs (Capex and Opex). This, in turn, triggers a bunch of Technology based transformations within a company to optimize productivity and lower operational costs. According to this report, 70% of CFOs agree and are ready for aggressive tech investments. Plenty of B2B SaaS opportunities are in store.
5. VENTURE 1 (CAPITAL): In the US, California-based Startups remain the poster child for VC investment according to Pitchbook's Q3 report by raising 3x more than New York-based startups, who were in second place on a State by State measure. Meanwhile, on the other side of the pond, European VC funding dropped 43% for Q3 22 compared to Q3 21, and the UK is down 60% from last quarter.
6. VENTURE 2 (DEBT): Venture debt levels halved in Q3 22 ($4.7B) compared to Q2 ($9.7B) - rising interest rates are likely to blame. In addition, structured financing deals have become common with restrictive terms that favor investors and structured debt (convertible, warrants, preferred equity financing). Investor-friendly deals like this are preferred to the other dreaded option - raising down rounds. There is so much to learn in these new down markets.
7. FINTECH CLOUD: I need to yell this one: NINE OUT OF TEN BANKS STILL USE FRIGGIN MAINFRAMES! So, because it's not 1982, check out what Google and Amazon are doing to get this FinTech business via their Mainframe migration tools called Dual Run and AWS Mainframe Modernization. Public Cloud, across the board, is aggressively coming after businesses' budgets.
8. GREEN vs. BLUE: Apple is a business who have done something impressive: They have locked in a new generation of users using peer pressure and color. Thanks to the use of a gross green color and mainly because of the group vibe of Apple Messenger - keeping things strictly Blue-bubbled in peer-based groups has led to iPhone ownership among US Teens hitting almost 90%, more than double since 2012.
9. CUSTOMER: There was an interesting discussion in one of my Slack groups a few weeks back about customer surveys and how customers know the past best and not necessarily the future. It got me thinking way more than most comments, and this article validated why earlier this week. I'm always listening to customers, what they talk about, the problems in their business, how they talk, etc. So when it comes to Product, it's important to be user-focused and not necessarily user-led.
10. CASE STUDY: The study of a SaaS CEO. This one is a rollercoaster of totally relatable anguish and smiles. From SaaStr: 5 Very Good Days, and 5 Pretty Bad Days, as a SaaS CEO.
POD OF THE WEEK: If it ain't blue, I can't be friends with you". This is the podcast version of #8 above - about how iPhone users judge other people with green text bubbles. A great podcast about how Technology forces us to make specific choices.