OPEXEngine

Best Practices To Clean Up Your Messy Sales Ops

OPEXEngine

In the 1970s, J. Patrick Kelly, the first sales ops group leader, described his responsibilities as “all the nasty number things that you don’t want to do, but need to do to make a great sales force.”

Online Poll – SaaS & Software Hiring Plan

OPEXEngine

The potential business impact due to the coronavirus pandemic, has resulted in many of you contacting me with questions regarding the rapidly changing financial landscape.

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From Real-Time Insights to Future Time

OPEXEngine

Insight. The one true currency of a finance professional. If we don’t have any insights to share with our business stakeholders, then we’re not helping improve decision-making. A lot has happened on the insight front in recent years.

SaaS Conversations: Building a Culture of Metrics

OPEXEngine

Last week, Mike Volpe, CEO of Lola.com , and I had a terrific, hour-long discussion on the value of a metrics-driven culture at every stage of growth, from early stage to large enterprise.

Need Remote Learning NOW? Get Online Quickly & Easily With This Can’t-Miss Guide

Remote learning is becoming more important than ever. Whether you’re scrambling to get your eLearning launched, or need to upgrade to meet increased demand, this guide will eliminate the guesswork so you can find your perfect LMS!

A Deep Dive Into e-Commerce Gross Margin

OPEXEngine

Gross margin is one of the key metrics for e-Commerce businesses , and one of those metrics that businesses tend to be sensitive about. After all, would you reveal how profitable your e-commerce store is to random strangers on the internet? I didn’t think so.

SaaS Cybersecurity Due Diligence

OPEXEngine

Imagine that you have just signed an LOI for the acquisition of your company. You, the CFO of a mid-sized SaaS company have spent the last 2-3 years getting your financials, your retention, CAC and other key metrics, in shape so you are offered an attractive valuation multiple.

The Three Rules of Freemium

OPEXEngine

I have a bit of a love/hate relationship with the freemium model. Done right, freemium can lead to amazing success. One of the best examples is Dropbox, which Tomasz Tunguz called the “King of Freemium”. What makes the company unique, he argues, is how it transformed its free users into evangelists.

What is ACV in Sales and What is a Typical SaaS ACV

OPEXEngine

The world of SaaS is awash with cryptic acronyms. If your business model relies on annual subscriptions, ACV will be a term that’s constantly on your mind as your company grows. So, what is ACV in sales and what is a typical SaaS ACV? We explain all that and more, below. What is ACV in Sales? ACV (annual contract value) is a metric that typically represents the average annual contract value of a customer subscription.

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Capitalizing Software Development Costs in a SaaS Business

OPEXEngine

At SaaS Capital, we have a lot of respect for GAAP financial statements. We think GAAP financials generally do a better job than cash-based financial statements in reflecting the underlying financial performance of a SaaS business.

Debt Financing Fuels Your Growth - on Your Terms. Zero Dilution.

The landscape of startup financing is changing. Learn why SaaS founders are turning to debt capital options like revenue-based financing.

2020 SaaS C-Suite Evolving to Support Product and Customer Lifecycle Management

OPEXEngine

A Couple SaaS Generations Ago… Traditional software companies managed sales, product development, finance and HR in siloed organizations by function. Cross functional management was attempted but often not effective. In the early SaaS days, management structure was essentially the same.

4 Ways Financial Leaders Can Become More Data-Driven

OPEXEngine

Business technology continues to evolve at lightning speed. As more applications transition to the cloud, information has never been easier to gather. Data is becoming more and more essential to remaining competitive and succeeding in any industry.

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When hiring, seek a “Culture Add,” not a “Culture Fit”

OPEXEngine

When a hiring committee interviews a potential employee, they are not just looking at their skills and past experiences. Often, the team looks for a sense of how an interviewee would work with the team and whether they hold the values of the organization.

SaaS Cost of Goods Trending Down – By How Much?

OPEXEngine

Downward trending cost of goods (COGs) benchmarks are improving SaaS gross margins. Competitive service offerings and new technologies are driving down costs to maintain SaaS infrastructures. As SaaS gross margins are rising, investors are becoming a bit more savvy about gross margin analysis , with increasing scrutiny of SaaS financials, especially in the wake of the WeWork, Peleton and Uber IPO disappointments, some of which is blamed on gross margins below those of true SaaS vendors.

Driving Discovery and Experimentation in your Organization

Speaker: Teresa Torres, Product Discovery Coach, Product Talk, David Bland, Founder and CEO, Precoil, and Hope Gurion, Product Coach and Advisor, Fearless Product LLC

If you want to build what matters, you can't move forward blindly. But to make progress, you can't let things slow to a crawl while you focus resources on gathering data. This is where continuous discovery and experimentation come in. Join Teresa Torres (Product Discovery Coach, Product Talk), David Bland (Founder, Precoil), and Hope Gurion (Product Coach and Advisor, Fearless Product) in a panel discussion as they cover how - and why - to build a culture of discovery and experimentation in your organization.

SaaS 2020: Will an Avalanche of VC & PE Capital Change 2020 Budgets?

OPEXEngine

The SaaS 2020 outlook for CFOs reminds me of swash (look it up – turbulent water caused by an incoming wave hitting the shore and meeting the outgoing backwash from the previous wave). More capital invested, more SaaS offerings, continued expectations of rapid growth are running smack into limits on the availability of qualified employees and a potential economic slow-down which may or may not happen.

How Revenue-Based Financing and Venture Capital Funding Work Together

OPEXEngine

As Chief Credit Officer at Lighter Capital, I work behind the scenes grappling with the data that informs all of our decision-making regarding financing deals, from revenue-based financing (RBF) to term loans and lines of credit. Similar to a venture capitalist (VC), I try to understand where startups are in their life cycles — and where they can expect to go.

How to Calculate Customer Acquisition Cost (CAC)

OPEXEngine

Whether you’re trying to work out how efficient your sales and marketing strategies are, or determine how profitable your current customers are, it’s vital to keep a pulse on the health of your SaaS business. Thankfully, there’s a simple performance metric that does both. Today we’re taking a deep-dive into one of the most crucial SaaS metrics around: customer acquisition cost (CAC). HOW TO CALCULATE CUSTOMER ACQUISITION COST.

Do This, Not That: Prescriptive Analytics in Sales and Marketing

OPEXEngine

How analytics can guide companies from insight to action. Beyond generating insights, leading sales and marketing groups deploy analytics to prescribe specific actions that raise the odds of closing or expanding deals. Prescriptive analytics frequently takes three forms: guided marketing, guided selling and guided pricing. These forms of guidance all hinge on the organization having a solid analytical foundation and the right processes and technology applications to use analytics.

The Magic of Intent: Start Knowing The Goals of Your Users

Speaker: Terhi Hanninen, Senior Product Manager, Zalando, and Dr. Franziska Roth, Senior User Researcher, Zalando

It's important to know your users - what are their preferences, pain points, ultimate goals? With user research and usage data, you can get a great idea of how your users act. The tricky part is, very few users reliably act the same way every time they use your product. Join Terhi Hanninen, Senior Product Manager, and Dr. Franziska Roth, Senior User Researcher at Zalando, as they explain how they were able to reach a new level of user understanding - by taking their user research and segmenting their users by point-in-time intent. You'll leave with a strategy to change how your product team, and organization at large, understands your users.

Balancing SaaS Growth and Profits to Maximize SaaS Company Valuation

OPEXEngine

The typical SaaS company grows faster, loses more money, and has a higher valuations than product sale companies. Weighted Average. Profitability. Cash Flow from Operations. Growth. Price/Revenue Ratio. Public SaaS Companies. -8%. Public Software Companies. +8%. Source: SEC filings – weighted average by company revenue.

110% Net Dollar Retention Is The Benchmark

OPEXEngine

One SaaS metric we monitor closely is net dollar retention. It tells you what percent of revenue from current customers you retained from the prior year, after accounting for upgrades, downgrades, and churn. Formulaically it’s beginning of period revenue + upgrades – downgrades – churn all divided by beginning of period revenue. If that formula yields a number greater than 100%, then growth from your existing customer base more than offset any losses from that customer base.

How much cash can your SaaS co burn?

OPEXEngine

Cash efficiency is one of our favorite metrics in SaaS. Measured as recurring revenue in the latest year / equity + debt invested, it’s every bit as important as growth. We did an analysis looking at the revenue, equity, and debt of 88 publicly traded SaaS companies at the time they went public. Using the equation above (revenue/[equity invested + debt]), we were able to observe the cash efficiency of each company. The conclusion: if you can generate $0.58 cents of revenue each year per $1.00

Does a Product-Led Growth Company Still Need a Sales Force?

OPEXEngine

Think about some of the online tools you can’t live without. Chances are, you backup your work to Dropbox, keep your colleagues updated on your progress via Slack, and automate your marketing emails with a service like Mailchimp. And what all these companies have in common, according to Forbes , is that they’re product-led growth companies.

Encouraging Innovation in an Established Product Culture

Speaker: Richard Cardran, Chief Creative Officer and VP Strategy, HIA Technologies

Innovation is both a process and an outcome. The best way to begin innovating your products is by innovating your internal process. We'll explore the challenges, solutions, and hands-on techniques for becoming a successful "agent of change" within a well-established product culture. We'll examine the importance of UX and user-centric feature analysis, the adaptation of Agile Methodologies to the creative process, as well as a way to drive successful culture change for setting expectations and winning approvals with cross-functional stakeholders. Innovation and Leadership go hand in hand. Join Richard Cardran, Chief Creative Officer and VP Strategy, HIA Technologies, as we assess some case studies to see how to lead with a clear strategy well-defined tactics, and an unbiased understanding of the fundamental question: "why are you innovating?"

SaaS Cash Conversion Score – What Does It Mean?

OPEXEngine

Last week, Bessemer released interesting new research regarding the return on invested capital. Three key take-aways from their analysis: Founders and CEOs should evaluate how effectively they are turning their capital into ARR instead of the size of their funding rounds. A new metric, called the Cash Conversion Score (CCS), shows the return on investment for each dollar ever invested in the company. Bessemer found that the CCS is a good indicator of internal rate of return (IRR) for investors.

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Are You Dying by the Hands of Analysis?

OPEXEngine

If there’s one thing a finance professional can do forever, it’s analyze stuff. We’re never short of data to analyze, and there are always more details to be ironed out. We love analyzing stuff so much that we almost forget the purpose of doing the analysis. The purpose is to improve business performance through improved decision-making. That means that the analysis must produce an outcome that can be presented and discussed with business leaders.

Include ROI Analysis in Your Annual Budget Process

OPEXEngine

During the annual budget and planning process, SaaS Finance leaders focus on making sure that resources are allocated appropriately across the company so the company achieves its performance goals – usually revenue and profitability goals – for the upcoming year.

How Automation and Machine Learning are Reshaping the Finance Function, Part One

OPEXEngine

Here’s how more advanced methods of automation, including machine learning, can help CFOs transform the finance function to be more of a strategic advisor to the business. In a recent McKinsey survey, only 13 percent of CFOs and other senior business executives polled said their finance organizations use automation technologies, such as robotic process automation (RPA) and machine learning.

Embedding Operational Reports: Everything Product Managers Should Know

Speaker: Dean Yao, Sr. Director of Product Marketing, Logi Analytics

Businesses are run with analytics - but companies continue to struggle with interpreting, analyzing, and distributing data. Operational reports help get information to the people who need it most, in formats they understand, and in a timeframe that matters. Join the webinar to learn how embedding operational reports can give your users a precisely formatted, ready-to-analyze view of their operational activities. World-class software teams are embedding operational reports to empower end users with interactive data visualizations, detailed information, and highly precise formats that can be shared via email, PDF, print, or online.

5 Financial Reports Every Business Should Be Running

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Can financial reporting analysis really help your business grow? Absolutely! To employ a data-driven finance approach, CFOs need to move finance functions up the analytic value chain to offer more detailed analyses, better forecasting, and increasingly granular information on products, suppliers, customers, and more. In turn, their analyses inform the business, increase corporate agility, and point the way to cost savings.

Favorite Reads from 2019

OPEXEngine

In my last blog of 2019, I’d like to share some of my recent favorite reads. Favorite Reads. The Power of Habit by Charles Duhigg. The difference between who you are and who you want to be is what you do.” Charles Duhigg. I had no idea this would be such a terrific book. It is a quick but powerful read. Duhigg describes the neurological science behind habit formation and how to use the process of habit formation to change them.

SaaS Company Benchmarking: Leveraging Metrics for Performance Insights

OPEXEngine

In the many years I’ve worked with SaaS companies, I continue to observe a surprising lack of standardization of SaaS metrics and performance reporting. My experience reinforces the fact that SaaS business model variants and approaches to measuring performance via metrics are still very much undefined. This is true even though selling software on a subscription basis has been around for well over 20 years. The Value of Benchmarking.

Non-US-Based SaaS Companies on the Rise

OPEXEngine

US SaaS companies need to take note of the growing number of world class SaaS companies based outside the US because the international landscape is shifting rapidly. Increased funding activity in Canada, Europe and Asia/Pac is introducing more non-US competition in the SaaS marketplace. More and better funded SaaS companies worldwide can be a challenge but also an opportunity for US firms.

Your 2-Part Metrics Audit for High-Value Products

Speaker: Sam McAfee, Product Development Consultant, Startup Patterns

You know what they say: what's measured improves. As product managers we're in a golden age of being able to get all sorts of metrics and run all sorts of experiments. But what are your measurements and analytics focused on? Are they really truly objective? Do they contribute to the ultimate vision of your product? And is everybody clear on that vision? Join Sam McAfee, Product Development Consultant, as he takes you through a two-part measurement audit. First, you'll learn how to make sure your measurements actually align with your product strategy. And second, you'll learn how to evaluate your culture of using measurements, so future experiments will more consistently provide high-value results.

Let’s Do Launch: Five Critical Moves for Your Next Launch

OPEXEngine

By excelling at these moves, marketers ensure that their message breaks through the noise. At a Glance. Getting a product, service or brand launch right matters more than ever for long-term success, which has become more difficult because of the proliferation of launches. Launch leaders have learned how to cut through the din of messages by focusing on five important areas in which to excel.

The Complete Guide to Understanding Net Negative? Churn

OPEXEngine

THE BIGGER YOUR SAAS COMPANY IS, THE LARGER THE SIZE OF YOUR SUBSCRIPTION BASE. AND THE LARGER THE SUBSCRIPTION BASE, THE MORE DETRIMENTAL CHURN BECOMES. As your subscriber base grows larger, the loss of revenue caused by even a low churn rate will begin to compound. The number of new bookings needed to replace the customers who are leaving becomes unachievable, and the struggle to keep your head above water becomes unsustainable.

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Scale vs. Intimacy – The old trade-offs do not cut it in the era of scale insurgency

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A widely held view on strategy in the 1980s defined two ways to compete: firms could pursue either a low-cost advantage (usually through scale) or a differentiation advantage (by building intimate customer relationships). The prevailing approach to running a firm at the time (what we call the professional management system ) was perfectly tuned to steer most large companies toward the low-cost, scale-driven option.

SaaS FP&A – Are You Up to the Challenge?

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Heading into the 2020 planning season, SaaS FP&A teams are working to finalize 2020 budgets and planning. Over the past decade benchmarking software and SaaS companies , I’ve had the chance at OPEXEngine to work with hundreds of amazing Finance execs who work incredibly hard at getting the right data to support their company’s goals.

Measure the Immeasurable: Beyond Vanity Metrics

Speaker: Sari Harrison, Product Management Instructor, Product School

As a product manager, it's your job to realize your product’s vision by executing your chosen strategy. It’s also your job to deliver value to the business. Ultimately, these two outcomes are aligned so the temptation is to focus primarily on business metrics. Doing this can cause you to lose focus on the real value you are trying to achieve, in favor of moving the vanity metrics such as launches and time spent. Join Sari Harrison, Product Management Instructor at Product School, as she explains how to use immeasurable success criteria along with your more standard KPIs to deliver products that don't just get used a lot, but deliver real value.