1. SaaS METRIC OF THE WEEK: CONCENTRATION: Break out your tech dictionaries again because I'm not talking about my brain's ability to get distracted. Lightspeed Venture Partners' Nnamdi Iregbulem has outlined a new metric he created called weighted average contract value (WACV). He argues this metric provides more meaningful information than ACV (see #1 above). The reason is that B2B SaaS revenue is highly concentrated due to the distribution of companies a SaaS company sells into also being very concentrated - a large number of smaller companies, a moderate number of moderate-scale companies, or a very small number of very large companies.
2. CONVERTIBLE LOANS: They are kind of debt until they are not. But Convertible Loans are a quick way to access money quickly via an interested investor. Point Nine Capital describes what is involved in a convertible loan and what to look for.
3. M&A: According to this new report, Merger and Acquisition deals in the enterprise software sector are on track to pass last year's records and have already reached $104.7 B for the year, and the report doesn't even include Adobe's $20 B Figma deal. Many larger firms stepped up their M&A transactions hoping to scoop up cashflow-strapped companies as venture funding deals continue to pull back.
4. ESTIMATION: Estimating effort in Software projects is mega hard, and we're all terrible at it. McKinsey found that IT projects are, on average, 45% over budget and 7% over schedule, and the larger a project gets - the worse these stats become. So you should definitely bookmark this series (or share with the person you know that needs to bookmark) - Estimating Software Projects by Jacob Kaplan-Moss (and what to do when you mess up).
5. DEADLINES: Adding to #3 above, Author Douglas Adams once wrote, "I love deadlines. I love the whooshing noise they make as they go by.". It's funny because it's true. So, how do you make peace with that whooshing noise when it comes to software development? Check this article from Free Code Camp that discusses the art of managing the deadline - part of it is complementary to a reference to the sub-art of saying NO from a while back.
6. SATELLITE: In the latest hardware release from Apple, they have added Emergency SOS capabilities using satellites to the iPhone, and apparently, it's coming to their Smartwatches too. Open signal break down this announcement into what it means as a new opportunity space.
7. BENCHMARKS: Did you know more diverse teams grow faster? From Capchase, learn more about this benchmark in this report listing the metrics lenders, and investors care about most. In addition, there is a complimentary SaaStr presentation (Slideshare) and video here.
8. GROWTH LOOPS: Elena Verna is Head of Growth at Amplitude and has an excellent presentation from their Amplify 2022 event about predictable and defensible Growth Loops and how to make money from them. Elena makes the interesting argument that revenue is an outcome and should not be a KPI in Growth.
9. MARKETING FOR ENGINEERS: For all of you technical entrepreneurs who have built something and trying to figure out how to get it into the wild, check this GitHub-based curated collection of marketing articles and tools to grow your product. It's the ultimate GTM Repo!
10. CASE STUDY: Speaking of Repos, JFROG is a publicly traded Code Repository (same as GitHub and BitBucket), and, full disclosure, I had never heard of this company until I saw the write-up from SaaStr/Jason Lemkin. This is surprising as the company generates $270m in ARR and has 132% NDR and 97% Gross Dollar Retention - those metrics are crazy - but learn more here.
POD OF THE WEEK: Complimenting #2 above. The content pumping out of Y-Combinator is always good. YC Partner Carolynn Levy details the basics of startup financing and how modern early-stage financing rounds are done using convertible securities, like the SAFE note.