Tom Tunguz

Where are Most Unicorns Headquartered?

Tom Tunguz

Earlier this week, I wrote Californian Dreaming - Is Silicon Valley Still the Best Place to Start a Company , where I analyzed the IPO and M&A trends of venture-backed companies by state. Those metrics are lagging indicators of startup distribution. How will the distribution change with time?

California Dreaming - Is Silicon Valley Still the Best Place to Start a Company?

Tom Tunguz

So much has happened in the last decade. We’ve seen the rise of massive startups in Europe, South America, China, Israel. Technology entrepreneurship is a global phenomenon.

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Why is the Stock Market Only Down 15%?

Tom Tunguz

Why is the S&P index “only” down about 15%? Given all the economic turmoil, shouldn’t the index collapse? I was wondering this so I went to the source of all truth on the internet, Reddit.

Why Margin Matters Now in Startupland

Tom Tunguz

Over the last decade, growth has been the winning card for startups to play. The faster the business grew, the higher its valuation. Margins didn’t matter much. Neither gross margin, nor net income margin weighed heavily on a company’s valuation unless they deviated grossly from norms.

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ABCs of Data Normalization for B2B Marketers

Data normalization. It’s not a far stretch to suggest that the topic isn’t exactly what gets marketers excited in their day-to-day workflow. However, if lead generation, reporting, and measuring ROI is important to your marketing team, then data normalization matters - a lot. In this eBook, we’ll break down the ins and outs of data normalization and review why it’s so critical for your marketing strategies and goals!

How Would You Manage Your Business Differently if Shelter-in-Place Lasted 18 Months or More?

Tom Tunguz

If the shelter-in-place order were to remain in place for another 12 months, how would you change the way you run your business? Over the past two months, CEOs and founders have managed the turbulence imposed by the coronavirus onto their companies.

What Customer Demand and Your Startup Balance Sheets Imply about Your Startup's Strategy

Tom Tunguz

Among the most useful frameworks I’ve found to manage a company in this era is the 2×2 matrix above. This matrix answers the question: what should the company’s stance be. It also raises the question: when should it change?

Benchmarking Sales Prospecting Volumes, Deal Terms, and Meetings in the Coronavirus Era

Tom Tunguz

How do you benchmark a sales organization in a time like this? This is one of the questions that Jim Benton, CEO of Chorus.ai, answers every day in his Daily Briefings. Using data across 10m telephone calls, Jim highlights how the coronavirus is changing sales team performance.

What Could the Venture Market Look Like in the Coronavirus Era

Tom Tunguz

What could happen to the fundraising market in the coronavirus era where organizers cancel events, the financial markets suffer from a bear market, and there is a lot of uncertainty? The most recent event to use as an analogy is the 2008 financial crisis.

Narrative Economics and the Power of Stories

Tom Tunguz

If I start a salacious tweetstorm that our local bank is running out of money, that rumor will circulate quickly. Eventually, the rumor will trigger a bank run. By tomorrow, the bank will face insolvency, even though it was business as usual at the bank this morning.

Why Smoking Costs Employers More Than They Realize

Your employees are smoking, and at a cost of $7,000 per year for each employee who smokes, that adds up - fast! This free report will show you how an effective cessation program pays for itself.

Office Hours with Hollie Wegman

Tom Tunguz

On June 3rd at 10 am, SaaS Office Hours will welcome Hollie Wegman , former CMO at Segment. Hollie has a wealth of experience as a marketer. She’s marketed many iconic companies including Salesforce, Mulesoft, and Envoy.

What do Google Search Query Trends Reveal about the Changes in How We Work?

Tom Tunguz

I was reading an article in the NY Times about how we’re all using much more internet than we have been. Consequently, YouTube is throttling video quality, and some of our services are slower than before.

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Redpoint 8 - Our Eighth Early Stage Fund

Tom Tunguz

Much has changed in the world since we announced our last early stage fund in 2018, especially in the last several months, as so much of our day-to-day lives have been reshaped by the coronavirus pandemic.

Why is the Stock Market Only Down 15%?

Tom Tunguz

Why is the S&P index “only” down about 15%? Given all the economic turmoil, shouldn’t the index collapse? I was wondering this so I went to the source of all truth on the internet, Reddit.

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.

Surveying Sales Leaders - How Coronavirus is Impacting Quotas, Bookings, and Budgets

Tom Tunguz

Sam Jacobs created the Revenue Collective , a group of more than 1700 sales professionals at some of the fastest-growing companies. With chapters across the US, Revenue Collective has broad reach within the sales community.

What I Expect in the Next Few Months in Startupland

Tom Tunguz

I was on a panel yesterday to speak about the impacts of the coronavirus on financial markets and startups. Later in the afternoon, I read the Sequoia black swan memo. So I figured today, I’ll summarize my outlook on the next few months. Startup Growth Rates.

What is a Best in Class Payback Period for a Software Company in 2020?

Tom Tunguz

Payback period is one of the best composite diagnostic metrics of product market fit. I've written before about the benefits of short payback periods. In short, startups with shorter payback periods require less capital and also grow more quickly. In 2020, what is an excellent payback period[1]?

Observations about Silicon Valley Two Weeks into Quarantine

Tom Tunguz

What’s going on in Startupland? Venture rounds are closing. We’ve seen seeds, As, Bs, and growth rounds in the past few weeks. And round announcements continue. Valuations are coming down a bit, but they are all over the map.

How to Choose the Best Embedded Analytics Solution to Modernize Your Application

If you are looking to modernize your application to improve competitiveness, then one of the quickest wins you can have is to embed sophisticated analytics that will wow your existing and prospective customers.

The Strategic Importance of Competition

Tom Tunguz

When I started in venture capital, one of the questions I learned to ask very early on was competition. Founders would often reply that competition validates the opportunity. At the time, I thought it was a canned response, a clever parry, to avoid answering the question directly.

Notes from Office Hours with Lisa Lawson

Tom Tunguz

Recently, we welcomed Lisa Lawson to SaaS Office Hours to talk about building a channel go-to-market strategy for SaaS companies. Lisa built the channel at Optimizely, which accounted for a meaningful fraction of new business.

The Fundraising Market Has Changed, But Not in the Way I Thought

Tom Tunguz

In March, I published analysis of the fundraising market in 2008. It showed that the later rounds, the series B and series C were the most impacted. The early data from March 2020 shows a different pattern. Seed and Series A rounds are first to bear the compression in the market.

Three Little Puzzles about Infinity

Tom Tunguz

Here are three little puzzles about infinity. Here’s a short blue line and a red line that is 3x longer than the blue line. Let me show you how there are just as many points in the blue line as there are in the red line.

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Need Remote Learning ASAP? Don’t Pick Your Next LMS Before Reading This!

Need to go remote or move your training programs online? Download this guide to identify and overcome the biggest eLearning challenges so you can pick the perfect LMS without wasting time, money, and effort, even if you are just starting your eLearning journey.

Estimating the Impact of the Coronavirus on Growth

Tom Tunguz

As we readjust to the impacts of the coronavirus, I’ve been asking myself: what is a basic useful model for estimating the growth impact to a software company? Of course, every business should develop a more conservative model, focused primarily on cash management to provide a longer runway.

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The Great CEO Within

Tom Tunguz

If you’re looking for a primer on many of the responsibilities of being a startup CEO, read The Great CEO Within. Matt Mochary wrote the book. He founded a company which he sold to MCI and now coaches startup CEOs, amongst other philanthropic efforts.

The Next 30 Years of Geopolitics - What Could They Look Like

Tom Tunguz

With all the breaking news every hour, I found myself looking for a longer-term perspective on the world. I read a book that fit the bill: Peter Zeihan’s Disunited Nations is a political economy book, a sort of Guns, Germs, and Steel for the future.

The SaaS Marketing Scorecard - How Does Your Marketing Operation Rank?

Tom Tunguz

The 9 Disciplines of Great SaaS Companies remains one of the most popular posts on marketing on this blog. It’s a wonderful framework by Bill Macaitis, who was the CMO at Zendesk and Slack.

The 2019 Technographic Data Report for B2B Sales Organizations

In this report, ZoomInfo substantiates the assertion that technographic data is a vital resource for sales teams. In fact, the majority of respondents agree—with 72.3% reporting that technographic data is either somewhat important or very important to their organization. The reason for this is simple—sales teams value technographic data because it makes essential selling activities easier and more efficient.

What Will this Crisis Accelerate in Your Ecosystem?

Tom Tunguz

I read an op-ed in Bloomberg last week written by a stock trader who was on the floor of the New York Stock Exchange during the 1989 crash. His manager brought him into his office. The trader feared his manager would fire him. Instead, his manager told him that these kinds of crises accelerate change and that he should embrace them. I’m struggling to find the link now, but if I do, I will update this blog post with it.

How Would You Manage Your Business Differently if Shelter-in-Place Lasted 18 Months or More?

Tom Tunguz

If the shelter-in-place order were to remain in place for another 12 months, how would you change the way you run your business? Over the past two months, CEOs and founders have managed the turbulence imposed by the coronavirus onto their companies.

Why Your Startup's Org Chart is Limiting Your Growth

Tom Tunguz

This is the theoretically ideal organizational chart of a startup. There’s a CEO at the top in red, VPs in orange, senior contributors in dark gray, team leads in green, and junior individual contributors in light gray. This is the org chart of the typical startup.

The Impact of the Coronavirus on Software Valuation Multiples

Tom Tunguz

This morning, there were many tweets talking about the impact of the coronavirus on the fundraising environment. It’s as a result of last weeks’ wild swings in the stock market. According to Koyfin’s analysis technology was the second hardest hit sector, falling 14%. The S&P overall was down 11%.

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!

When You Have an Advantage, Speed Up the Game

Tom Tunguz

“Basketball can be modeled as two-biased random walks. Each team has a probability. Each team has a probability of scoring each trip down the court…this model suggests a strategy: stronger teams should speed up the game to create more possessions.”

Office Hours with Hollie Wegman

Tom Tunguz

On June 3rd at 10 am, SaaS Office Hours will welcome Hollie Wegman , former CMO at Segment. Hollie has a wealth of experience as a marketer. She’s marketed many iconic companies including Salesforce, Mulesoft, and Envoy.

Which Categories of Seed Startups are Thriving? Which Aren't?

Tom Tunguz

Which sectors see more startup company formation than others? The answer has changed quite a bit over the last 8 years. Some sectors have hit their apogee and are declining. Others have grown by more than 3x. Yet others are growing geometrically. Let’s take a look. Hot Spaces.

The SaaS Valuation Environment in Mid-2019

Tom Tunguz

Every six months or so, I take a look at how the public markets are valuing next-generation software companies. There’s been quite a bit of volatility over the last five years, and this update is no exception. As of mid-June, the public markets value software companies at all-time highs.

The Time-Saving Power of Intent Data for Sales

By using the power of intent data, capturing buyer interest has become more feasible for sales. Not only that, but using it will save immense time during your workflow; a win-win on all fronts.