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The growing dissonance between two business models (SaaS and VC)

The Angel VC

Had I seen a SaaS startup with this growth curve in my first 2-3 years of SaaS investing (in 2008-2010) I probably would have asked “where do I have to sign?”. For VCs, the question is how many of these companies can become large enough to make the (admittedly somewhat weird) business model of venture capitalists work.

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Chained Probabilities in Startup Business Models

Tom Tunguz

When thinking about a potential market opportunity, articulating the list of business model chained probabilities can be useful. Other business models assume multiple hypotheses. For instance, B2B freemium businesses, like Slack andExpensify, market a two step value proposition.

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If You Had $10k to Invest, Which Stock Would You Buy?

Tom Tunguz

Venture investing clocked more than $329b invested last year , up 10x since 2010. – Notes: this post compares multiples across four companies which have different markets, business models, and margin structures. The next few quarters may reveal what happens when these funds surge elsewhere.

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The decade software ate the world

Intercom, Inc.

To give some perspective, there were about 300 million smartphones sold in 2010. What was perhaps less predictable was the ensuing prevalence of the subscription-based business model. The other transformation is in how businesses are increasingly reliant on long-term, subscription-based relationships with their customers.

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We?re About To See a Lot More SaaS Debt

SaaStr

Salesforce’s IPO is also seen as a test of a new business model that could shake up the software industry. The company is the poster child for subscription-based software, a model that’s gaining popularity among corporate buyers. This CNET article captures the uncertainty well: . Don’t VC’s Want This Dealflow?

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A SaaS History Lesson – The First SaaS Company's Exceptional Journey

Tom Tunguz

Second, Concur’s history provides a mechanism to contrast the license software and a SaaS business models. The company generated about $2M in revenue as it switched to its licensed software business. In the Cloud Era, the economies of scale powered the company to achieve all time gross margin highs in 2010 of about 72%.

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Bought-in and paid for: how Atlassian bridge the gap from freemium to enterprise sales

Intercom, Inc.

For every company that’s executing the freemium model successfully, there are hundreds more that struggle and the tension it can create between sales, marketing, and product teams. But if anyone knows how to walk this tightrope and make it to the other side, it’s Kristen Habacht. I think people want to buy like that.”.

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