February, 2016

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That’s a nice little $1-2M SaaS company you have here. Call me to discuss if it will scale!

The Angel VC

About two years ago, Josh Hannah of Matrix Partners wrote an excellent article titled “That's a nice little $40M eCommerce company you have there. Call me when it scales.” In it he argues that an eCommerce business with $10 to $20 million in revenues is not that hard to build and also not very valuable. I would recommend that you read the full article, but one of the key points of the article was that if you fill a niche and have distinctive product/market fit with a set of customers, you can ac

Scale 192
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How to Become Profitable Faster in SaaS

Tom Tunguz

As the fundraising environment changes, some SaaS companies will look to reach cash flow break even on their existing reserves. Founders may reduce staff, particularly in recruiting or new projects that the company prefers not to finance. But there are three other ways to become profitable that limit reductions in force, enable the company to continue to grow with greater efficiency and increase the value of the company in the process.

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Why Your Prospects are Ignoring You

Practical Advice on SaaS marketing

Trying to connect with someone while they’re scanning their Twitter feed, replying to texts, and staring at a full inbox, while desperately trying to meet deadlines for whatever deliverables are on their long to-do list isn’t easy. But if you’re the poor marketing person trying to reach prospective customers, that’s exactly what you’re up against. And that’s especially true if you’re marketing a software-as-a-service (SaaS) solution.

Finance 100
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Zero to IPO: Lessons From The Unlikely Story of HubSpot

OnStartups

HubSpot has had a pretty good run. Went from zero to IPO. What's not known is how unlikely the story of our success is. II gave a talk at the 2016 SaaStr Conference hosted by Jason Lemkin. The slides and full video from the talk are included below, with some quick notes on a few of the topics covered. Here's me presenting what turned out to be the most popular slide (more on this idea at the end of the article).

Startup 76
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How Investors & Strategic Buyers Evaluate Integrated Payment Strategies

Explore how integrated payment strategies impact investor and buyer evaluations. Payments are more than a feature — they’re a key to long-term success and market differentiation. They help SaaS companies offer seamless user experiences and efficient operations. Investors and strategic buyers assess these integrated payment strategies as a measure of a company's growth potential and sustainability.

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Growth Engineer Job Description Cheatsheet

Sylvia Ng

Putting together a job description for a Growth Engineer? Wondering what others are doing? Save time with this cheat sheet! The below tidbits are taken from 30+ job descriptions for Growth Engineers, all from tech companies such as Asana, Airbnb, AdRoll, Cybercoders, Mircosoft, UXPin, and Zenefits, to name a few. Copy and paste what’s relevant to you to build your job description, or just scroll through to get some inspiration.

More Trending

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How customizing subscription billing cycles help with customer retention

ReSci

Some subscription companies are shooting themselves in the foot by following the one size fits all method of monthly billing. Although monthly cycles are industry standard for subscription companies, it's not necessarily the most efficient model for all. A monthly cycle makes a lot of sense…. The post How customizing subscription billing cycles help with customer retention appeared first on ReSci.

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Not All Revenue Dollars Are Created Equal

Tom Tunguz

A dollar is a dollar is a dollar, right? Not quite. Not all revenue dollars are created equal, but all gross profit dollars are. Gross profit, not revenue, is the metric companies should be using to compare themselves. Ultimately, gross profits account for more than 55% of the forward multiple of publicly traded SaaS companies after normalizing for revenue growth.

Revenue 110
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The Hard Thing About Your Brand and Funnel

Hacking Revenue

“In today’s world, It’s easier than ever. to start an online business”. This sentence has been repeated by many experienced business people, especially since the introduction of SaaS and other cloud based online services. While these services significantly lowered the costs of starting a new business, I believe that the people who said that sentence were missing the point of starting a business – to build an always growing, sustainable brand.

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10 Questions I Hope I Don't Get Asked During My Product Hunt AMA

OnStartups

I'm doing an "Ask Me Anything' (AMA) session on Product Hunt tomorrow (Tuesday, Feb 23rd, 2016 at 10 am PST, 1pm EST). Would love for you to sign-up early, because I'm insecure, egotistical and I want to impress Ryan Hoover. Would love for a decent number of people to sign-up. Or an indecent number would be even better. 350 have signed up already (before this blog post was published).

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The Big Payoff of Application Analytics

Outdated or absent analytics won’t cut it in today’s data-driven applications – not for your end users, your development team, or your business. That’s what drove the five companies in this e-book to change their approach to analytics. Download this e-book to learn about the unique problems each company faced and how they achieved huge returns beyond expectation by embedding analytics into applications.

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The Other Payback Period that Matters in SaaS

Tom Tunguz

When we discuss payback periods in SaaS, we implicitly mean customer payback periods. How much time does it take for us to recoup the capital outlay we invest in acquiring a new customer? But, there’s a second and equally important payback period – the payback period on hiring a new account executive. Let’s take a hypothetical SaaS startup that sells a $20k product at a 75% gross margin.

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The 57% Drop in SaaS Valuations

Tom Tunguz

What a difference a month makes. I wrote a post on January 10, 2016 called The Downward Pressure of Public Markets on Startup Valuations that depicted the slow decline of SaaS multiples in the public markets. Since then, multiples have compressed markedly. The chart above shows the forward revenue to enterprise value multiple of all public SaaS companies.

SaaS 111
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Benchmarking Exceptional Series A SaaS Companies

Tom Tunguz

At SaaStr 2016 and SaaS Office Hours in New York , I shared an analysis of the fastest growing SaaS companies over the last 3 years. In particular, I benchmarked the revenue, growth rates and round size characteristics of these businesses at their Series A. I’ve embedded the slides here. Benchmarking Exceptional Series A SaaS Companies from Tomasz Tunguz.

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Hacking Your To Do List with Your Calendar

Tom Tunguz

Each new year, I try to implement a new productivity hack. Getting Things Done. Bullet Notebook. This year, I’m trying to manage my to do list with my calendar. I realized a few years ago no arsenal of productivity hacks will prolong the working week, this February’s 29th day notwithstanding. That’s the challenge with to do lists - they lack commitment devices.

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People, Passion & Perfection: The Key Ingredients for an Awesome Product

Need help launching innovative software quickly? Dive into "People, Passion, and Perfection" and unlock the secrets to building excellent products in the digital age. Fast-track your journey with Tech Accelerator: Agile and Cloud-Native for flexibility & scalability AI-powered innovation for faster results Quality at every step for a flawless user experience See real impact across industries: Healthcare: Empower patients and medical professionals with intuitive solutions Education: Transform cla

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The Impact of a Changing Venture Environment on Startup Fundraising Terms

Tom Tunguz

Attorneys witness the changes in the fundraising market from a unique vantage point. Consiglieri to startup founders and investors alike, attorneys assist in the negotiation and are privy to the terms of investment. Fenwick & West, one of those law firms, released data this morning detailing the evolution of financing terms for Q4. I’ve reproduced the most salient difference in Q4 compared to previous periods above.

Startup 100
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SaaS Office Hours in New York - A Q&A on the State of the SaaS Market

Tom Tunguz

Join me for SaaS Office Hours on February 22 in New York at the Axial headquarters. This is the first time we’ll be hosting SaaS Office Hours on the East Coast, and there will be more to follow. Given the volatility in the market and the number of inbound questions about the implications, this SaaS Office Hours will be focused on fundraising and the venture capital outlook for 2016.

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Venture Debt for SaaS Startups

Tom Tunguz

There are several forms of venture debt. Convertible notes are the most common, today. Most startups raise seed rounds using convertible notes. Startups that have substantial working capital requirements often employ lines of credit/revolvers. Last, many startups take out term loans. They borrow money for several years and repay it over time. Venture debt can supply additional capital for a startup to grow at a lower cost of capital than equity.

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Mr. Market and the SaaS World

Tom Tunguz

Mr. Market is a fictitious character imagined by legendary investor Benjamin Graham in The Intelligent Investor. Graham describes Mr. Market as emotional, irrational, moody - and is in the short run a voting machine, in the long run a weighing machine. It might sound like a children’s story, but Warren Buffett lauded the book as the greatest book ever written on investing.

Marketing 100
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Addressing Top Enterprise Challenges in Generative AI with DataRobot

The buzz around generative AI shows no sign of abating in the foreseeable future. Enterprise interest in the technology is high, and the market is expected to gain momentum as organizations move from prototypes to actual project deployments. Ultimately, the market will demand an extensive ecosystem, and tools will need to streamline data and model utilization and management across multiple environments.

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The Nature of Leverage in Fundraising Conversations Has Changed

Tom Tunguz

Leverage. It’s the key to negotiating. Classic negotiating books like Getting to Yes define the BATNA, the Best Alternative to Negotiated Agreement. If you were to walk away from a conversation, what’s the next best choice? The BATNA singlehandedly creates leverage in negotiating. Over the last few years, startup founders have exerted tremendous leverage in the fundraising market by taking advantage of the supply/demand imbalance.

Startup 100
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With Smart Software, Sell Ironman Not Robocop

Tom Tunguz

When buying machine learning enabled software, it’s easier to sell like Ironman than Robocop; a product that complements and augments the user’s skills rather than a true replacement. As machine learning continues to become a key differentiator among SaaS products, a secular and positive trend, startups are learning how to sell the promise of the software better and better.

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Startup Istanbul 2015: The power of the hustle

CloseSaaS

Startup events like Startup Istanbul, "The Leading Startup Event in Eurasia", are great places for founders, executives, and investors to meet and share great ideas and stories about startups.

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Are buyers liars?

CloseSaaS

You know the drill. Prospects are inconsistent—they say one thing and do another. “Your product is too expensive,” they say, right before closing a deal with a competitor that costs even more. “We need more time,” you hear, then suddenly they're back with an answer the next day.

Sales 52
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Software Composition Analysis: The New Armor for Your Cybersecurity

Speaker: Blackberry, OSS Consultants, & Revenera

Software is complex, which makes threats to the software supply chain more real every day. 64% of organizations have been impacted by a software supply chain attack and 60% of data breaches are due to unpatched software vulnerabilities. In the U.S. alone, cyber losses totaled $10.3 billion in 2022. All of these stats beg the question, “Do you know what’s in your software?

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5 steps to turn your blog readers into loyal customers

CloseSaaS

We all know a blog is an effective tool for building thought leadership, influence, and awareness among your target market. It’s also a great way to recruit brand advocates. The trick is knowing how to turn those advocates into customers.

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3 unusual ways to make your sales emails stand out

CloseSaaS

Email is the dominant form of communication for salespeople, and with good reason—according to a recent survey, over 70% of people report they would prefer businesses to contact them via email.

Sales 52
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Culture Summit 2015: How to make firing employees into an unscalable growth hack

CloseSaaS

How do you build a great startup culture? While everyone likes to talk about all of their great hiring and recruiting hacks, no one likes talking about having to fire employees—until now.

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2 common B2B SaaS sales objections (and how to handle them)

CloseSaaS

Imagine going to Starbucks. You order a latte, and as you reach for your wallet, the barista says, “That’s $3.00, and just $2.00 more to add a bagel. Would you like the bagel?” You say, “Yes,” take your food, and leave.

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From Whims to Wins: How a Customer-Centric Portfolio Transforms Product Strategy

Speaker: John Mansour - President, Product Management University

You know that sinking feeling. You’ve come up with a winning product strategy, everyone’s on board and energized, and you’re halfway down the path to execution only to have it submarined by something someone convinced your leadership was more strategic! It’s a scenario that’s all too familiar, and it exemplifies one of the biggest struggles with individual product strategies.

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How to deal with hostile and aggressive prospects

CloseSaaS

Your prospect has completely lost it. He's shouting at you over the phone, making ridiculous demands—you can hear the sound of shattering glass as he throws stuff at the walls. Your ears are ringing and you have a massive headache.

Sales 52
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How to get the first 10 customers for your B2B SaaS startup

CloseSaaS

If you don’t have buyers, you don’t have a business. I see startups all the time that are so afraid of selling, they never get their first customer.

Startup 52
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Turn 2019 around with these New Year's resolution hacks

CloseSaaS

“2019 is going to be different. I’m going to get into shape, I’m going to read more, and my sales team is going to have its best year ever!

Sales 52