Tom Tunguz

FEBRUARY 25, 2023

Similar questions have surrounded Microsoft’s acquisition of Blizzard; The US Department of Justice seeks to unwind the Google/DoubleClick merger ; British regulatory bodies forced Facebook to reverse its Giphy acquisition. At what strike price? The FTC reportedly will sue to stop Adobe from acquiring Figma.

Acquisition 223

Acquisition Startup Government Technical Review 223

SaaStr

AUGUST 31, 2021

Q: When should a CEO walk away from an acquisition? I’ve walked from acquisitions where I, to be honest, did want the money but still walked. You have (at least) 4 constituencies in an acquisition: You and your co-founders. The post Dear SaaStr: When Should a CEO Walk Away From an Acquisition Offer? Your employees.

Acquisition 241

Acquisition Pricing Cloud Startup 241

SaaStr

AUGUST 19, 2020

Q: Which merger and acquisition trends, if any, do you expect to unfold in the next 12 months? Multiples and share prices are at all time highs. With Twilio then seemingly priced to perfection, and with investors expecting huge growth rates … they bought the biggest thing in email API they could afford, not the smallest.

Acquisition 265

Acquisition Cloud SaaS Pricing 265

User Pilot

JANUARY 8, 2024

With the right customer acquisition strategies, you can convert potential customers to paying users and set the stage for turning them into long-term loyal users. Best practices for effective customer acquisition and product-led growth. Focus on the right customer acquisition channels. What is a customer acquisition strategy?

Acquisition 105

Acquisition Strategy Social Media Underperforming Technical Team 105

SaaStr

SEPTEMBER 29, 2022

Dear SaaStr: How Do I Do My Retention Negotiation in an Acquisition? But the sticks come out of the purchase price. The post Dear SaaStr: How Do I Do My Retention Negotiation in an Acquisition? A few thoughts on retention compensation when you are acquired. Even if they haven’t told you yet. It will just disappear.

Acquisition 243

Acquisition Retention Payments Compensation 243

Tom Tunguz

JUNE 11, 2019

Let’s put this acquisition in context. First, it’s the third business intelligence related acquisition in the past month. Google announced the Looker acquisition last week. To get a sense of how this price and multiple compares in clearer terms, lets look at multiples vs growth rate. on these three businesses.

Acquisition 271

Acquisition Pricing Startup Software 271

SaaStr

APRIL 11, 2022

In other cases, getting to invest more heavily for a few years as private company can fuel faster growth, and a later IPO at a much higher price. The post The Private Equity Math of 1+1=3 in SaaS Acquisitions appeared first on SaaStr. In some cases, a PE firm can upgrade portions of management and grow faster. But substantial.

Acquisition 239

Acquisition SaaS Cloud B2B 239

SaaStr

AUGUST 25, 2023

Dear SaaStr: As An Employee, As an acquired employee, How Do I Negotiate My Compensation in an Acquisition? Because it’s seen as their money, as “extra” compensation on top of the deal price. A related post here: Dear SaaStr: How Do I Do My Retention Negotiation in an Acquisition? Especially below the VP level.

Compensation 131

Compensation Acquisition Sales Hiring Finance 131

User Pilot

SEPTEMBER 20, 2023

Working out pricing for a SaaS can be difficult, so consider using a cost-plus pricing method. TL;DR Cost-plus pricing, or markup pricing, is where you add a set to a product’s unit cost, often overlooking competitive market prices. Justifying price increases is easier when adopting a cost plus strategy.

Pricing 103

Pricing Software Review Market Research Acquisition 103

User Pilot

SEPTEMBER 20, 2023

Optional product pricing can help SaaS companies earn more money while charging less for their otherwise premium product. TL;DR Optional product pricing is a strategy where you sell your core product at a low cost and then encourage consumers to buy more accessories, features, or complementary products.

Pricing 102

Pricing Customer Lifetime Value Advertising Strategy 102

Tom Tunguz

OCTOBER 27, 2018

Over the weekend, IBM announced the largest software acquisition of Red Hat, an open-source software company, for $35B. It is the largest software acquisition in history, and the third largest technology acquisition (Dell/EMC at $67B and JDS/SDL for $41B were both larger hardware mergers). This price values the company at a 10.6x

Acquisition 203

Acquisition Application Development Software Engineering Pricing 203

Tom Tunguz

AUGUST 28, 2021

Should you price your SaaS per seat or per use? The first thing to state is that massive companies have been built using both pricing structures: Salesforce and Adobe bill per seat while Snowflake and Twilio charge per use. When to use per seat pricing. Would they switch if the pricing weren’t predictable?

Pricing 279

Pricing Strategy Startup Scale 279

Baremetrics

AUGUST 1, 2021

So what works (and doesn’t work) as a SaaS acquisition strategy? In this article, you’ll learn 5 keys to building a purpose driven acquisition strategy for your SaaS and how to avoid common mistakes along the way. SaaS Customer Acquisition: Getting the basic right How to Build a Purpose-driven SaaS Customer Acquisition Strategy 1.

Acquisition 98

Acquisition Strategy SaaS Underperforming Technical Team 98

Tom Tunguz

JUNE 9, 2018

It’s a massive acquisition at a massive price relative to other software acquisitions. The Skype acquisition was also about identity, consumer identity. This acquisition capstones the commitment. Why is Microsoft willing to pay so much? Developer identity. Identity has been critical to Microsoft success.

Acquisition 203

Acquisition Azure Cloud Enterprise 203

Baremetrics

AUGUST 8, 2021

For most SaaS businesses, customer acquisition is one of the most challenging stages of growth. For most, the easiest ways to increase customer acquisition rates are to offer a freemium model or price your product on the lower end of the spectrum. Ensures You Attract the Right Customers When Should You Increase Your Pricing?

Pricing 111

Pricing SaaS Scale Churn 111

Neil Patel

NOVEMBER 9, 2020

Plus, the price tag on those more established businesses often run into the billions. Micro startup acquisitions. But before we dive into that, we need to look into what micro startup acquisitions are and why you need to sit up and take notice. Micro Startup Acquisitions: What Are They, and Why Should I Care?

Technical Review 144

Technical Review Payment Methods Acquisition Development Team Review 144

Chart Mogul

AUGUST 20, 2020

4x entrepreneur Andrew Gazdecki shares how you can better prepare yourself for your startup's acquisition, and make the journey a rewarding one. The better prepared you are for an acquisition, the smoother it’ll go, leaving you financially, operationally, and psychologically stronger during negotiations. Speak to other founders.

Acquisition 105

Acquisition Startup Technical Review Scale 105

Tom Tunguz

JANUARY 4, 2023

The total quantity of acquisitions demonstrated greater resilience shrinking by 56%, while the median acquisition value tumbled from $81m to $22m (-72%). A $22m median M&A price implies most of these transactions were acquihires - acquisitions that value a company for its team. in Q4 2021 to a paltry $2.1b in Q4 2022.

Startup 327

Startup Marketing Acquisition Pricing 327

Tom Tunguz

OCTOBER 30, 2023

Facebook has faced a similar suit for illegal monopolization, which resulted perhaps indirectly in the divestment of two of its more recent acquisitions. Microsoft’s most recent acquisition of Blizzard nearly didn’t succeed & the FTC continues to pursue means to reverse it or win concessions. Compare Microsoft at $2.5t

Acquisition 250

Acquisition Startup Pricing Technology 250

Subscription Flow

JANUARY 3, 2024

Consider the potential for growth if you make your pricing model a consistent priority for your company. Most SaaS companies, on the other hand, treat pricing as an afterthought, setting it and then forgetting about it, rather than viewing SaaS flexible pricing strategies as ongoing processes critical to their success.

Pricing 52

Pricing Payment Features SaaS Marketplace as a Service 52

FastSpring

MARCH 9, 2022

Answer: It’s the pricing page. The path to a signup or purchase may include a variety of page views, but it almost always includes the pricing page. In this article, we’ll show you examples from a variety of SaaS pricing pages. 7 SaaS pricing page examples. Add a summary table for pricing plans. How do we know?

SaaS Payments 122

SaaS Payments Pricing Payments Payment Methods 122

SaaStr

APRIL 17, 2024

Or, maybe they missed a couple of quarters in a row, and stock prices are threatened, so they make a move. Build trust, which is essential during an acquisition. In general, your valuation is a hard floor on a good acquisition price. You’d essentially be walking away from a $100M acquisition in that moment.

Underperforming Technical Team 164

Underperforming Technical Team Data Development Team Review Technical Review 164

Tom Tunguz

MARCH 19, 2018

Price ($M). Year of Acquisition. If we compare this acquisition on other dimensions, we see that Mulesoft is the second fastest growing at the time of acquisition, next to SuccessFactors in 2011. In the first three months of 2018, we’ve witnessed two multibillion dollar software acquisitions. Transaction.

Acquisition 189

Acquisition Marketing Enterprise Revenue 189

Tom Tunguz

JANUARY 28, 2024

This dynamic will very likely cascade into the private markets as well with both acquisitions and financings in these categories priced at a premium. As a result, these businesses project higher growth rates & fetch more attractive valuations in early 2024.

Software Review 321

Software Review Software Finance Acquisition 321

Tom Tunguz

FEBRUARY 25, 2013

Over sushi, a friend explained to me that this strategy might also extend to the way the company views acquisitions. Ideally, acquisitions increase the revenue and profitability of the the parent company, increasing stock price and enabling the parent to raise capital more easily in the public markets.

Acquisition 100

Acquisition Pricing AWS Startup 100

SaaStr

MARCH 12, 2024

It’s a common dream for founders to hope their startup be acquired one day, but what is a company, like Google, really looking for in their acquisitions? First, there are three types of acquisition deals: Talent — To get the expertise on your team and more firepower. You only make money after your investors get their money back.

Software Review 212

Software Review Technical Review Acquisition Scale 212

SaaStr

JULY 10, 2022

Let’s take a look at 3 B2B acquisitions from a few years back as an example. Let’s first start with the $35m acquisition of TokBox after 11 years and the $220m acquisition of SpringCM after 13 years. talking about “tuck-in” acquisitions that can attach to existing revenue streams.

Venture Capital 354

Venture Capital Acquisition AI Pricing 354

SaaSOptics

MAY 19, 2022

What Is Customer Acquisition? Customer Acquisition is the process of acquiring new customers in a business. For subscription-based SaaS businesses, your customer acquisition metrics indicate how effectively you acquire new users via sales, marketing, or a product-led approach like a free trial. More customers = more revenue.

Acquisition 59

Acquisition Scale Strategy Software Review 59

Baremetrics

SEPTEMBER 30, 2021

Cost plus pricing is one of the many pricing strategies employed by companies in an attempt to increase their revenue and profit. The basic idea behind cost plus pricing is to base your prices on the cost of production plus your desired profit margin. This makes it a very simple and safe pricing strategy.

Pricing 96

Pricing Outsourced Development Systems Review Strategy 96

SaaS Metrics

AUGUST 9, 2023

That’s the impact of SaaS pricing. Yet, many firms overlook this, focused more on product development and customer acquisition. But crafting a tailored pricing strategy doesn’t need to be complex. The choices can be daunting—flat-rate, usage-based, tiered plans. This article will.

Pricing 52

Pricing Subscription Payment Features Strategy 52

Tom Tunguz

OCTOBER 14, 2023

Within the last few weeks, we’ve seen two significant exits in Startupland, the first new pricing information we received in many quarters. Atlassian’s acquisition of Loom is also the first unicorn sale in about the same time frame. But the market has changed enormously since the market set those prices.

Acquisition 240

Acquisition Pricing Enterprise Startup 240

Tom Tunguz

MARCH 4, 2024

He worked on search quality at Google, founded a dynamic pricing company for the restaurant industry, then ran data at a hotel tonight before becoming Chief Analytics Officer at Looker through its acquisition by Google. Colin has advised many of the world’s largest companies on their BI strategy.

Technical Advisors 205

Technical Advisors AI Search Data Analysis Acquisition 205

SaaStr

SEPTEMBER 29, 2022

Free user acquisition. Stage 3: Prove scalable quality user acquisition. It’s time to reduce the customer acquisition cost by experimenting with content marketing and virality. As a result, your growth team gets limited to user acquisition. Mistake #4: Pricing that creates friction for free user adoption and virality.

Technical Review 232

Technical Review Technical Advisors Scale Compensation 232

SaaStr

MARCH 27, 2024

Despite raising prices and selling more products, HubSpot ACV is basically flat at $11,365. Clearly, even SMBs are working to moderate spend, even as vendors increase pricing. So price increases don’t always automatically lead to an ACV / ARPU bump. #4. GRR is more consistent.

Scale 231

Scale Cloud Pricing Scaling 231

Tom Tunguz

JULY 30, 2023

The acquisition is notable for two reasons. Second, New Relic’s sale price is close to the recent highs measured on January 1st of each year New Relic benefitted from multiple expansion that pushed its valuation higher - admittedly less than the top quartile. This acquisition is a bet that the company can be run more efficiently.

Payment Services 241

Payment Services Sales Acquisition SaaS 241

Chaotic Flow

JULY 21, 2015

SaaS customer acquisition should focus on maximizing available market penetration, not increasing available market size, and to do that you have to have a very clear picture of your target SaaS customers. Bad prospects waste precious sales cycles and marketing dollars, driving up your customer acquisition costs.

Acquisition 133

Acquisition Scale SaaS Pricing 133

SaaStr

APRIL 19, 2024

Pricing Is Over-Discussed Founders want to know if there’s a sweet spot on pricing, but the topic is over-discussed. Reverse Engineering Your Way to $100M Tip #4 What you want to do is find the organic price points for products that are similar to yours and anchor around them. Everyone got massive price increases for no benefit.

Engineering 228

Engineering Business Model Pricing Scaling 228