Tom Tunguz

JANUARY 26, 2017

Over the last seven years, software startup investing has changed quite a bit. In 2010, classic SaaS was booming, the benefits of a subscription model were finally becoming clear to the public markets and the mass-market. Which of these markets are growing the fastest for investment dollars?

Startup 214

Startup Software Machine Learning Artificial Intelligence 214

Clouded Judgement

NOVEMBER 3, 2023

This growth adjusted premium also comes at a time when the 10Y is nearly double what it was from 2010 to 2020. Most public companies don’t report net new ARR, so I’m taking an implied ARR metric (quarterly subscription revenue x 4). Altimeter is an investment adviser registered with the U.S.

Software Review 161

Software Review Cloud Software Azure 161

Clouded Judgement

OCTOBER 21, 2022

And to get ahead of some questions, the long term average I’m using is from 2010-2020 (so excluding the crazy multiples of Covid). The average 10Y in the period of 2010 - 2020 was ~2.3%. I don’t think it goes back to ZIRP, but I think it looks closer to the average from 2010 - 2020 than what it does today.

Cloud 130

Cloud Software Review Subscription Payment Features 130

Clouded Judgement

JUNE 16, 2023

Said another way, the median NTM revenue multiple is ~23% below it’s historical average, but forward growth expectations are the lowest ever (~40% below historical average), and the 10Y is ~40% higher than it’s historical average (from the period 2010-2020). Median NTM Growth Rate was ~25% Median 10Y was ~2.3%

Cloud 130

Cloud Software Revenue Subscription 130

Clouded Judgement

FEBRUARY 24, 2023

So today, the median multiple is ~25% lower than where it’s longer term average (pre 2010 we don’t have much data on cloud software multiples as there weren’t many public cloud software companies). It makes sense the median multiple today is lower than the 2010-2020 average given the difference in rates.

Cloud 130

Cloud Subscription Payment Features Revenue 130

SaaStr

SEPTEMBER 12, 2019

I’m talking about product-led growth as an investment strategy, but really my background is 10 years of operating experience in the product-led growth world. Now I’m investing in that. I say investment strategy, but really it’s like how do you build a company that’s focused on product-led growth?

Investment 100

Investment Underperforming Technical Team Sales Hiring Software Review 100

Intercom, Inc.

DECEMBER 31, 2019

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. Perhaps nowhere is the impact of the subscription model quite as dramatic as in popular culture. There are about 3.2

Payment Solutions 259

Payment Solutions Payment Methods Software SaaS Payments 259

Chart Mogul

DECEMBER 4, 2020

And is Stripe a good choice as your billing and payment provider? When Stripe was launched in 2010, dealing with payments online wasn’t a straightforward matter. As I outlined in the beginning, handling payments wasn’t easy in 2010, even for developers. Let’s see why.

Payment Methods 105

Payment Methods Payment Services Payments Payment Solutions 105

Chart Mogul

MARCH 9, 2020

CEO Joel Gascoigne tells us about the decision to invest in new analytics tools and how Buffer sustained long-term growth thanks to growing their ARPA. Established in 2010, Buffer hardly needs an introduction. The Solution: Invest in a revamped data infrastructure. What is Buffer. Click To Tweet. Click To Tweet.

Payment Solutions 113

Payment Solutions Payment Features Payments Social Media 113

SaaStr

JUNE 5, 2020

It’s hard to imagine a world where analysis didn’t understand recurring, subscription based revenue for technology products. 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: .

Venture Capital 213

Venture Capital Technical Review SaaS Scale 213

SaaStock

FEBRUARY 14, 2019

Meet Our Speakers… Patrick Arippol, Managing Director of Early Stage Investments, DGF Investimentos. In 2010, he joined DGF Investimentos, one of the top VC firms in Brazil. He is leading DGF Investimentos’ specialized early-stage investment group – DGF Inova. Its focus is on businesses in Big Data, mobile, and SaaS.

Technical Review 207

Technical Review Scale Entrepreneurship Sales Hiring 207

The Angel VC

JANUARY 4, 2011

Here's the third part of my 2010 portfolio review. was founded in 2008 by two extremely sharp students of the Cracow University of Science and Technology who wanted to build a simple, easy-to-use, web-based invoicing and billing application for small businesses in Poland. Another investment that I made in 2010 is Propertybase.

Payment Solutions 104

Payment Solutions Payments Payment Features Software Review 104

Chart Mogul

DECEMBER 4, 2020

And is Stripe a good choice as your billing and payment provider? When Stripe was launched in 2010, dealing with payments online wasn’t a straightforward matter. As I outlined in the beginning, handling payments wasn’t easy in 2010, even for developers. Let’s see why.

Payment Methods 52

Payment Methods Payment Services Payments Payment Solutions 52

Chart Mogul

MARCH 9, 2020

CEO Joel Gascoigne tells us about the decision to invest in new analytics tools and how Buffer sustained long-term growth thanks to growing their ARPA. Established in 2010, Buffer hardly needs an introduction. The Solution: Invest in a revamped data infrastructure. What is Buffer. Tweet this quote. Tweet this quote.

Payment Solutions 52

Payment Solutions Payment Features Payments Outsourcing Services 52

Intercom, Inc.

JUNE 16, 2020

The rise of the subscription model challenges businesses to place equal emphasis on conversion and retention , or risk spending themselves into oblivion. But first, let’s take a look at how loyalty emerged as a priority, and why leading businesses are investing in customers, not stakeholders or employees, to drive up revenue.

Scale 237

Scale Social Media Customer Support Scaling 237

Tom Tunguz

OCTOBER 12, 2014

Unlike these other companies, WorkDay has employed a huge professional services team in addition in investing massively in their R&D to create a broad suite of products. In 2009 and 2010, the company recognized more revenue from services than subscription. Services revenue isn’t a money-maker.

Benchmarks 109

Benchmarks Deferred Revenue Venture Capital Outsourced Development 109

The Angel VC

DECEMBER 25, 2010

As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year. Some highlights: Zendesk has had a phenomenal year.

Cloud 106

Cloud Investment B2B Subscription 106

Tom Tunguz

DECEMBER 7, 2015

Today, more than 82% of revenues are subscription dollars. However, professional services’ contribution to revenue has fallen from 32% in 2010 to about 20%, likely because ULTI is moving into the mid-market and the product has improved so less service is required to satisfy customer needs. only once - during the year of the IPO.

Software 100

Software Marketing Forecasting Enterprise 100

Intercom, Inc.

FEBRUARY 6, 2020

“The shift from serving just consumers to serving consumers and companies is a massive one” For Udemy, investing in a B2B arm seemed too obvious, and too good, an opportunity to ignore. When Eren Bali founded Udemy in 2010, he had a vision for what the marketplace would be: a place where anyone could teach and learn anything.

Marketplace as a Service 243

Marketplace as a Service Scale Sales Recruiting Business 243

SaaStr

OCTOBER 24, 2019

Jos White : We were fortunate enough to lead a Series A investment into Tradeshift back in 2010, I think. Notion Capital was really the first fund to have the guts to invest in Tradeshift. Christian Lanng : So we started with something very, very narrow, which was invoicing. You pay a subscription.

Payments 102

Payments Payment Features SaaS Payments Underperforming Technical Team 102

Frontegg

MAY 27, 2021

Making the bottom-up shift: You are shifting from the top-down to a bottom-up mindset, which means more money and time to invest in R&D efforts. Best For: Subscription Management, Billing. Looking for a comprehensive end-to-end solution for your subscription management and billing requirements? 6 ChargeBee.

Payment Solutions 98

Payment Solutions SaaS Payments Payments Scale 98

SaaStock

MARCH 20, 2019

ProfitWell provides industry standard subscription financial metrics that uncover pockets of hidden revenue through unmatched subscription intelligence. ProfitWell is used by over five thousand subscription companies every day, including Meetup, HubSpot, and Teamwork.com. Founded: 2010. Based in: Boston, MA. ProfitWell.

SaaS Payments 271

SaaS Payments Merchant Services Payment Solutions Payments 271

SaaStr

NOVEMBER 2, 2019

And so I’m so thrilled to welcome back Krish Subramanian, founder and CEO at Chargebee, the startup that lets you go beyond payment, billing, and recurring invoices to delivering subscription experiences that wow and what they’re doing now in the world of rev ops, trust me, it’s pretty mind blowing.

Scale 124

Scale SaaS Payments Sales Recruiting Payment Services 124

FastSpring

APRIL 1, 2021

Are users automatically billed or signed up for recurring payments? Once the trial ends, you send them an email or in-app prompt that directs them to a paid subscription link. Opt-in free trial conversion rates vary from low single digits to upwards of 25% depending on the product category and target customer.

Payment Solutions 108

Payment Solutions SaaS Payments Payment Methods Strategy 108

Intercom, Inc.

SEPTEMBER 22, 2022

At some point in their growth, businesses usually start investing in customer research. And whether it’s things we’re doing in our lives or boring everyday business things like paying an invoice, every person, every company has a different process. And that was a revelation for me as a product manager.

Interviewing 138

Interviewing Underperforming Technical Team Sales Recruiting Software Review 138

Sales Hacker

SEPTEMBER 11, 2020

Venture capitalists invest in startups because they believe in the founder(s) and their vision. That means a majority of their investments are write-offs. If you sell an HR platform with a subscription that starts at 50 seats, you should scratch any seed-stage startups off your list. Founded in 2010. Raised seed in 2010.

Outsourcing Services 78

Outsourcing Services Scale Startup Outsourced Development 78

Tom Tunguz

SEPTEMBER 21, 2014

Tableau sells software the old-fashioned way, with perpetual licenses not subscriptions. To offset the mostly one-time payment from customers, Tableau employs a land-and-expand strategy. For every sales and marketing dollar Tableau invests, the business returns more than $1.54.

Benchmarks 100

Benchmarks SaaS Payments Metrics Scale 100

Hitenism

JANUARY 16, 2017

In March 2016, it ultimately became clear that we were over-invested in some parts of the business and as a result let go of 10% of our employees.”. In 2016, venture capital investment in SaaS is up to $7B, from $1.5B We often associate SaaS with the standard 30-day trial feeding into a recurring subscription.

Scale 147

Scale Venture Capital SaaS Headcount 147

ProfitWell

NOVEMBER 15, 2019

Your top subscription news. And in all fairness, subscription is the Netflix business model, and password-sharing naturally circumvents that. We know Netflix is a streaming giant—and apparently not super worried about the issues—but this is an ongoing situation that online subscriptions have to address and deal with on the regular.

Subscription 41

Subscription Payment Features Finance Investment 41

ProfitWell

OCTOBER 29, 2019

Your top subscription news. And in all fairness, subscription is the Netflix business model, and password-sharing naturally circumvents that. We know Netflix is a streaming giant—and apparently not super worried about the issues—but this is an ongoing situation that online subscriptions have to address and deal with on the regular.

Subscription 40

Subscription Payment Features Finance Investment 40

OPEXEngine

NOVEMBER 22, 2022

These factors resonated well with the investment theses of venture capital firms. Despite Intuit’s timing lead, Xero grew faster than Intuit’s Small Business Segment (products and subscriptions), outperforming the large competitor with an eight-year Compounded Annual Growth Rate (CAGR) of 52% versus 3% for Intuit.

Business Model 52

Business Model Business SaaS Scale 52

Neil Patel

JULY 30, 2021

However, Google made the tool available to the public in 2010, which made it simpler for all website owners to access and use. comes free with every Hootsuite account, too, so you don’t need a paid subscription to benefit from the tool. Google’s own URL shortening tool, Goo.gl, launched back in 2009. Sounds good, right?

Social Media 134

Social Media Scale Mobile Branding 134

Audacix

MARCH 20, 2020

Roaring Out Of Recession, Harvard Business Review, 2010 I think you'll agree that the key here is not necessarily to make the right decisions, ostensibly because making the right decisions implies that we know exactly what we are dealing with here and for how long, which we do not.

Underperforming Technical Team 52

Underperforming Technical Team SaaS Systems Review Software Review 52

SaaStr

JANUARY 14, 2020

That was our first transitionary moment, and from that point forward, we began investing heavily in building a way to teach people technology skills outside of a physical classroom. And from about 2007 till 2010 we bootstrapped and built the first version of the Pluralsight you see today. We were not an enterprise company yet.

B2B 132

B2B B2C Scale New CTO 132

ChurnZero

JANUARY 13, 2022

This role is made for her,” said Kirsten Davies, SVP and Chief Information Security Officer, The Estée Lauder Companies. Ellen joined Forescout in 2010 and has been instrumental in driving cross-functional efforts between sales, product, and engineering to deliver on customers’ technical needs. markets at Blackbaud.

VP of Engineering 98

VP of Engineering Customer Success Outsourcing Services Technical Review 98

FastSpring

JUNE 19, 2019

We’re also heavily investing in data science and engineering to automate, accelerate & increase the quality of these decisions.”. Developing a better user experience produces by far the most viral effect and impact when investing in growth. Engagement drives conversion from free consumption to a paid subscription.”.

Payment Methods 79

Payment Methods Trends Payments Payment Services 79

SaaStock

MARCH 20, 2019

ProfitWell provides industry standard subscription financial metrics that uncover pockets of hidden revenue through unmatched subscription intelligence. ProfitWell is used by over five thousand subscription companies every day, including Meetup, HubSpot, and Teamwork.com. Founded: 2010. Based in: Boston, MA. ProfitWell.

SaaS Payments 100

SaaS Payments Merchant Services Payment Solutions Payments 100