Power Laws: A Look Back To Where 20 SaaS Break-Out Companies from 2012 Are Today


The second SaaStr post ever, way back in late 2012, was “ Everybody Lies: SaaS Revenues in the Inc. Very fast-growing companies had great exits, but the “fairly fast ones” had even bigger exits than the very fastest-growing in the class of 2012!

Bye-bye 2011, hello 2012

The Angel VC

2011 2012 angel investing reviewIt's that time of the year – you're looking back to the old year and you're reviewing your plans for the new one. The last year was very busy for me, both privately and professionally. I became a dad for the third time, and I teamed up with Team Europe to create Point Nine Capital. Two startups, so to speak. It's also a good time to take a look at my angel investments because from now on I'm going to make all new investments via Point Nine Capital.


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Year in review: Best of 2012

Tomasz Tunguz

Thank you all for making 2012 a memorable year. Top 10 Blog Posts of 2012. About three years ago, I started journaling my startup education by blogging. In retrospect, blogging has been one of the most rewarding activities for me as an investor. Blogging helps me some observe changes in the start-up ecosystem, communicate trends primarily through data while strengthening and building relationships. It’s been more gratifying than I could have hoped.

Financial planning for SaaS startups

The Angel VC

[Update 03/23/16: I've created an improved version of the template - check it out! ] A few people who read my recent post about financial planning asked if I could provide an example for a good financial plan, so I'd like to post one here. The plan is very similar to the one that I created in the very early days at Zendesk and re-used a few times in the meantime, but I had to make a few adjustments to make it more generic.

5 Things a Data Scientist Can Do to Stay Current

DataRobot together with Snowflake – a leading cloud data platform provider — is helping data scientists stay current with the latest technology and data science best practices so that they can excel in an increasingly AI-driven workplace. Five Things a Data Scientist Can Do to Stay Current offers data scientists guidance for thriving in AI-driven enterprises.

B2B Social Business Bill of Rights | Don’t Get it Wrong!

Chaotic Flow

Which is more important in B2B social media, social or media? For way too many B2B marketers, the answer is media. In the B2B marketing community, content marketing has eclipsed blogging, engagement is measured in click-throughs, and gamification is sexier than conversation. Too many B2B professionals see social media as just another marketing communication channel. It is not!

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Yummy, dog food! Or: Running a VC fund in the Cloud

The Angel VC

Point Nine not only loves animals , we also love dog food. After all, some months ago we invested in ePetWorld , which runs hundeland.de , a fast-growing online shop for dog food and supplies. Today I'm going to talk about a different type of dog food though. If you know us a bit you'll know that we talk a lot about the Cloud.

The 3rd DO for SaaS startups – Create an awesome product

The Angel VC

With some delay I'd like to continue my little series: 3rd DO for SaaS startups Create an awesome product This one is a little tricky. Firstly because it feels like I'm just stating the obvious – who doesn't want to create an awesome product? Secondly because it's hard to offer a lot of useful advice in a blog post on a topic which shelves of books have been written about.

Customer Acquisition Spending: Lessons from Workday

Practical Advice on SaaS marketing

According to a business adage, you need to spend money to make money. According to a SaaS business adage, you need to spend a lot of money to make money. Workday recently made public its S-1 filing in advance of an initial public offering. The document reveals what it takes to succeed in a market dominated by Oracle and SAP. Specifically, it illustrates the need for software-as-a-service (SaaS) companies to spend money - lots of it - on customer acquisition.

Software is eating the world, but the smartphone is pretty hungry too

The Angel VC

Last August, Marc Andreessen wrote a great essay titled "Why software is eating the world". In his article, which got a lot of attention in the tech world, Marc explains why and how a variety of industries have been and continue to be disrupted by software. Read it if you haven't read it yet, it's a well-written and inspiring post by one of the most successful and knowledgable people in the Internet industry.

SaaS companies can't afford to sell

Practical Advice on SaaS marketing

Most companies offering a software-as-a-service (SaaS) solution can't afford to sell it. I'm talking here about "selling" in the traditional sense: finding prospects and convincing them to buy a product or service. In some cases that's done with experienced sales executives working their Rolodex (or its electronic equivalent). Or it might be sold by a team of inside sales reps making cold calls from a purchased list.

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SaaS customer acquisition: Feed it or starve it?

Practical Advice on SaaS marketing

If you manage a software-as-a-service (SaaS) company, at some point you'll be forced to make a tough decision about your customer acquisition process: Feed it or starve it? Should you pony up the money to feed a full-blown sales and marketing effort? Or should you starve the process and keep the cash in your piggy bank? Because of the way the SaaS business model works, if you feed the customer acquisition process, you hurt profits and burn cash.

The 2nd DO for SaaS startups – Build the right team

The Angel VC

Continuing my little series using the "minimum viable" approach , here is my 2nd DO for SaaS startups: Build the right team I've written about the topic before, so if you've read this post from early this year most of what I'm going to write now won't be new for you and you may want to skip this article. I'm going to assume that you want to build a modern SaaS solution for the "Fortune 5,000,000" – a great product that's easy to understand and so useful that it will almost sell itself.

DOs and DON'Ts for SaaS entrepreneurs – #1

The Angel VC

I've been thinking about a "DOs and DON'Ts" article geared towards early-stage SaaS founders and upcoming SaaS founders for a little while now. I thought it would be a good idea to summarize what I've learned about SaaS in the last few years and put it into a format like this. Problem is, it's a very large topic, and if I try to make it as broad, deep and well-written as I'd like it to be I'll never do it. I don't have sixkidsandafulltimejob.blogspot.de

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Avoiding Parkinson's Law of Triviality in your financial plan

The Angel VC

In the last few years I've seen a lot of financial plans, and since we started Point Nine in the middle of last year that volume has been skyrocketing. I've seen everything from just a few numbers in an email to extremely sophisticated Excel spreadsheets with dozens of tabs and tens of thousands of cells, and I thought I'd offer some advice on what I think a good financial plan looks like.

The Price is Right (or not)

The Angel VC

One of the most important questions which every SaaS company has to solve is to find the right pricing – the right pricing model as well as the right price levels. It’s obvious that getting pricing right is extremely important: If you’re too cheap you will leave money on the table and reduce your ability to invest in customer acquisition. You may also hinder adoption especially from bigger customers who think that your product can’t be good because it’s so cheap.

Know your user cohorts

The Angel VC

One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn't matter – is a cohort analysis. In fact, it's almost impossible to get a really good understanding of a service's usage without looking at activity and retention numbers on a cohort-by-cohort basis. And yet, most startups that we're talking to haven't looked into cohort analyses yet. Often the reason is lack of resources.

The Case for Grandfathering

The Angel VC

If you're running a SaaS startup it's likely that sooner or later you'll want to increase your prices. The reason is simple: It's impossible to find the perfect pricing right off the bat, so most startups launch with a pricing scheme that's on the low end to make sure that they don't scare away potential customers. "In In the beginning, err on the side of being too cheap", was also one of the tips that I gave in my previous blog post about SaaS pricing.

1st DO for SaaS startups, continued

The Angel VC

Further to my post about my "1st DO for SaaS startups" (and again, in the spirit of releasing early and iterating fast) I'd like to touch on a few additional points with respect to the right market. Market size If you want to go big and build a large, successful company it's obviously important that your market is big enough. How big is big enough? Most large VCs would answer that the TAM of a SaaS company should be at least $1B.

Point Nine loves animals

The Angel VC

About one and a half years ago I became a vegetarian, after coming to the conclusion that it's impossible to ethically justify to kill – and in almost all case inflict enormous suffering on – living creatures that are capable of experiencing pain, just for the pleasure of eating meat (which, make no mistake about it, is a huge pleasure). Maybe I'll write more about that topic in another post.

SaaS acquisitions: It's about money and genes

Practical Advice on SaaS marketing

Software Equity Group reports that in the first quarter of 2012, 64 SaaS companies were acquired. Another week, another software-as-a-service (SaaS) acquisition. To be more accurate, it's really "another week, another four SaaS acquisitions." Among the more prominent purchases, Oracle bought Vitrue, following its acquisitions of Taleo and RightNow. Keeping pace, SAP purchased Ariba for $4.3 billion, while it's still digesting its earlier multi-billion acquisition of SuccessFactors.

Making free trials work: 3 tips

Practical Advice on SaaS marketing

Lots of software-as-a-service (SaaS) companies offer free trials. But in even the best cases, only about a modest portion of the free trialers actually convert into paying customers. In fact, many times the free trialers don't even try the free stuff. People download the trial, but then they get distracted. Or they don't have the time to use it. Or they don't have the data they need to get started. Or they decide it's a hassle. Or they lose interest. Or whatever.

A PS on grandfathering

The Angel VC

If you've read my last blog post I still owe you a small PS. I mentioned that while I was writing the post I've learned two surprising things, so here goes. Caveat: I usually try to provide some useful advice in my blog. What I'm going to write now doesn't have any practical value so feel free to skip it.) Number 1: Do you know where the term "grandfathering" comes from?

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A very brief history of Point Nine

The Angel VC

Subscription price and customer acquisition costs

Practical Advice on SaaS marketing

Here's an inquiry from the SaaS Marketing mailbox: Dear SaaS Marketing guy, Do software-as-a- service (SaaS) solutions with a high subscription price per customer have a better chance of success than solutions with a low subscription price? Sincerely, Earnest, but Confused SaaS Solution Developer Dear EbCSSD, Here's the good news: Whether your solution carries a high subscription price or a low subscription price, either one can succeed. Here's the bad news: Either one can fail.

When lead generation is a bad thing

Practical Advice on SaaS marketing

Most marketers are fixated on generating leads. It's not uncommon, in fact, that their compensation is related to how many leads they bring in. This fixation on leads is particularly true for us software-as-a-service (SaaS) marketers. Cost-efficiency and a high return on marketing expenses are critical to a successful SaaS business model. See "Ten Essentials of SaaS Solution Marketing." ) But generating leads isn't always a good thing. You can get too much of a good thing.

How does the ideal SaaS startup founder team look like?

The Angel VC

Last night I read this question on Quora : In general terms, what is the ideal size and make-up of a team for a pre-revenue SaaS startup? It's a question I've been pondering about a lot already, and seeing it posted on Quora prompted me to try an answer. I think the second part of the question is more important. I do have a slight preference with respect to the team size as well, but it's light because I've seen and worked with very successful SaaS startups with different team sizes.

Don't waste marketing money: all thought, no action

Practical Advice on SaaS marketing

I pulled up behind a step van at a stop light and read on the back door, "Need a spark? Call Mark. Mark Olsen, Electrician" OK, it's not Shakespeare. It's not even Ogden Nash, but kinda catchy. I thought it could work for other tradesmen too. Sprung a leak? Call Dominique." Need concrete? Call on Pete." (OK, OK, it was a long light.) The silly tagline did part of its job. It got me to think. What it didn't do is get me to act. Why not? There was no phone number.

SaaS profits: who cares

Practical Advice on SaaS marketing

There's a story about accounting that wouldn't really pass as funny - even by accountants' standards- but it is instructive. A CEO was interviewing two candidates for an accounting position. He provided each with the company's most recent financial data and asked each of them: "What would you report for our company's profit?" The first candidate pored over the numbers, pencil and calculator at hand, carefully constructing an accurate income statement.

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Join Point Nine for a summer internship!

The Angel VC

We're looking for an intern – a great opportunity for a young, super-smart over-performer to get an inside view of an early-stage VC in Berlin. :-) I'm reposting our job ad here: * * * * * We offer a three month paid internship, starting middle of April or beginning of May at our office in Berlin. What you do: Support evaluating the dealflow; give us your opinion on >100 business ideas and plans per month; find the one we should invest in. Do networking; meet people and founders.

SaaS acquisitions can be tricky

Practical Advice on SaaS marketing

Having lived through several acquisitions during my career in technology companies, I have some idea of what the folks at SuccessFactors (acquired by SAP last year) and Taleo (acquired by Oracle a few weeks ago) are going through. Some of these combinations go well, others not so well. One reason behind the acquisitions of software-as-a-service (SaaS) companies is the high cost of sales and marketing. In essence, it helps to be bigger and richer.

Free trials don't always make sense

Practical Advice on SaaS marketing

Free trials are one very popular technique for marketing software-as-a-service (SaaS) solutions, especially for relatively inexpensive ones. Think Constant Contact, salesforce.com contact manager, or Carbonite. But before you take the leap and offer your own free trial, think carefully. Free trials can't work without follow-up For a free trial to work, it needs to be part of a overall customer acquisition plan.

We came, saw and. invested

The Angel VC

Our last investment in the old year is a novelty for us – our first investment in a startup from Italy. Founded by 23 year old entrepreneur Guk Kim, Cibando operates a popular iPhone app that makes it easy to find the best restaurants in Rome, Milan, Florence and other Italian cities. What makes this significant (beyond its obvious significance for Cibando and for us) is that this is one of only a very small number of VC investments in Italy.

SaaS solutions for business are not an impulse buy

Practical Advice on SaaS marketing

I don't know who first thought to put gum, candy and Slim Jims next to the checkout aisle, but it was a stroke of genius. While I'm standing there waiting to unload my shopping cart is the perfect time to tempt me to toss in a few inexpensive items that aren't on my list. I give in to the impulse. Software-as-a service (SaaS) solutions for businesses are not gum, candy or Slim Jims. People do not buy them on impulse. Most business software is bought after careful consideration.

Tell Your Customer to Backup Their Data

Aber Law Firm

The Utah Supreme Court ruled in June 2012, that when a software vendor is sued for its software’s destruction of customer data, it really matters whether the software vendor told the customer to backup its data or not.

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What Does Your SaaS Agreement Liability Model Look Like?

Aber Law Firm

Don’t be surprised if you don’t totally understand this SaaS agreement question, even though you want to know the answer. Ok, let me explain, and this will (hopefully) become clearer.

Did You Know That Price and Terms are Linked?

Aber Law Firm

Ok, let me explain what I mean. Enterprise customers too often want to make up their own terms (i.e rules) regarding how they use your software service. As a result, you really need to think about linking price with terms (in your SaaS agreement). How does this work, well let’s go through it.

What You Don’t Want in Your Cloud Services Agreement.

Aber Law Firm

Ok, I need to define a term first. ‘Strategic uncertainty’ = when a party to say a cloud services agreement intentionally tries to create an ambiguity in a clause, so they can later use it for their benefit (in a dispute of course).

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Drafting Your Cloud Services Agreement

Aber Law Firm

3 Things to Consider When Drafting Your Cloud Services Agreement. While there are a lot of things you should think about when drafting your cloud services agreement, here are 3 things you should definitely think through. 1) Clarity.

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I Have Seen the Future, and It Is ‘Privacy by Design’

Aber Law Firm

Ok that may be a little bit of an overstatement, but I do think that this new concept of ‘Privacy By Design’ is the future of privacy in terms of SaaS privacy and software privacy.