Top 10 in Tech - What to know for Week ending October 25, 2024

1. SaaS METRIC OF THE WEEK:  ARR - I have a whole book for you this week (an "Ultimate Guide," in fact) on ARR. Covers everything you need to know to define, build, and report on ARR from scratch based on experiences at Intercom, Atlassian, and Stripe. Bessemer Ventures also claims to have a founder's roadmap to $100 million ARR.


2. WEBSITE: Quick Question: "Do you think your Website is stressing out visitors"? Quick Answer: Probably. Read further on the WJTBD (Web Jobs to be Done) or TL;DR - remove the noise and focus on the jobs you need the website to do.


3. BENCHMARKS: Bookmark alert! I've got a bit of a benchmarks goldmine this week with the 2024 BenchmarkIT Report (all B2B SaaS), and it's pretty interactive (or snag the PDF here). Median growth for SaaS companies is 30%, and Net Revenue Retention (NRR) is at 105%. Median Customer Acquisition Cost (CAC) payback is 16 months! And here is one of my favorites—an average of $.69 per $1 of expansion revenue generated.


4. DEX: Crack open your tech dictionaries for another acronym-based entry: Digital Employee Experience.  This is all about your internal users - your team. In a surprise to mostly no one, 95% of employees say IT issues decrease workplace productivity and morale - which is a bigger deal AND a bigger challenge to solve now that digital tools are more mission-critical in today's WFH/Hybrid/Remote work environments.


5. USER LED GROWTH: ULG is when existing users become your biggest advocates, driving leads straight into your funnel. It's not for every B2B SaaS company, but when done right, it can build a flywheel that slashes your CAC and ramp times. A classic example is Dropbox's referral program, where users earned extra storage by inviting others—a powerful way to turn customers into evangelists one GB at a time.


6. CASH MANAGEMENT: Part 1 of a 3-part Guide to Cash Management for Startups highlights bank account strategies at different Stages. The startup phase needs basic checking and savings accounts for operational expenses and emergencies, maintaining liquidity, managing cash flow, and keeping financial controls strict. It prioritizes simplicity and security in banking structures.


7. FORECASTING: We are all pretty terrible at it, and for those of you running calendar financial years, you don't have much left to be less terrible at it. Time to get started with a Finances Forecasting 101 article from Bessemer; this article even has a template for you.


8. FINANCIAL HYPOTHESIS: To add to the above, again from Bessemer, Financial models can be pretty overwhelming for many early-stage operators, so the Financial Hypothesis simplifies things. This model focuses on 3-5 key inputs crucial to reaching profitability or securing the next funding round (scroll down to the number 2 listing on this page).


9. PRODUCTS: Balancing the needs of existing vs. new customers is a hard product act to balance, and that push and pull is nicely described in this article, which includes some great analogies and tips on influencing the product roadmap. It also includes an article from First Round Review with a list of things to avoid when building highly technical products.


10. CASE STUDY: PRICING: The SaaS pricing landscape is shifting, with many companies adjusting strategies (73% increased prices). Freemium models remain key, while AI-driven features push usage-based pricing models higher.


POD OF THE WEEK: The Bessemer Venture Partners session at SaaStr 2024, covering the impacts of AI on the State of the Cloud, is a great watch! They have carved $1B of their fund into AI companies.