My Top 8 Mistakes Investing in SaaS Startups


My biggest mistakes in SaaS investing actually in the end haven’t been truly costly because, in the end, power laws mean your winners overwhelm your losers if you do it right. But still I have screwed up a number of investments. Because it was all really transactional revenue.

Why would an investor invest in a pre-revenue company?


Q: Why would an investor invest in a pre-revenue company? And you’d even wait if that meant the price went up a tiny bit. As long as the price doesn’t go up too much, it’s still generally better to wait. And de-risk the investment. If someone else is going to do the deal, you may need to invest now. You are worried you can’t get enough ownership unless you invest now. The earlier you invest, the easier it is to get your target ownership.

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What is revenue optimization? Using pricing to optimize revenue


Revenue is good. Lots of revenue is great. Optimized revenue is better. Because the world of e-commerce is so restless, as soon as your company finds itself bringing in steady revenue, the first question anyone will be asking is: How can we make this performance even better ? The better answer, in fact, is to optimize the revenue you’re already bringing in. Revenue optimization, though, is not as simple as flipping a switch. What is revenue optimization?

SaaStr Podcasts for the Week with Matt Garratt, Trisha Price, David Schmaier, Rob Bernshteyn, and Jason Lemkin


359: The Secrets to Vertical Growth, What it Really Takes to Build a $1B SaaS Company with Matt Garratt, SVP, Managing Partner @ Salesforce Ventures, Trisha Price, Chief Product Officer @ nCino and David Schmaier, CEO & Founder @ Vlocity. Trisha Price. Trisha Price: Yes.

How to Package and Price Embedded Analytics

HOW TO PACKAGE & PRICE EMBEDDED ANALYTICS. Practical Frameworks to Monetize Embedded Analytics Table of Contents Embedding Analytics to Lift Value and Revenue. 15 Pricing for Value Organizing Your Tiers. Competitive Pricing. value, priced accordingly.

Revenue Growth: Understanding & Calculating Revenue Growth


Revenue growth might well be the king of all SaaS metric monsters, the Godzilla of the balance sheet. And what works for the beast from the deep works for revenue growth: to master it, you must first understand it. Though you can calculate revenue growth with a simple formula, found below, that’s only half the battle. What is revenue growth? Revenue growth is the increase, or decrease, in a company’s sales between two periods. The revenue growth formula.

Become a Revenue Architect (and Level Up) With a Revenue Engine Framework

Sales Hacker

Revenue Operations is at the forefront of a paradigm shift — to view the buyer’s journey as a seamless thread across multiple people, systems, and value propositions. Newly minted Chief Revenue Officers are what I like to call revenue architects. Invest in Growth via Enablement.

SaaS Pricing Models & Strategies Demystified


Pricing can be one of the most overwhelming and puzzling parts of business. SaaS businesses, in particular, have a unique challenge with pricing for a few reasons: There’s an almost infinite number of different ways to price a SaaS product. The cost to produce and maintain a SaaS product is generally unrelated to the value a customer receives, so pricing based on how much margin (profit) doesn’t make sense for the most part. What is pricing? Change the price.

The Playbook To Re-Igniting Growth with Predictable Revenue Co-Founder and CEO Aaron Ross (Video + Transcript)


How this company called Sagemount, they’re a $2 billion private equity firm, triples evaluations of their investments in three years, how Twilio nailed the billion dollar niche or a niche if you’re from Canada or Europe, and uncommon practices of hypergrowth CMOs. Now, how many people here have read Predictable Revenue? First, you get product market fit, then you create predictable revenue, and then you scale. So that every revenue increase is a big deal.

SaaStr Podcast #211: The Ultimate Guide To SaaS Pricing From Investors @ Benchmark, Matrix, Upfront Ventures & Operators @ Figma, Snyk and Kustomer


In Today’s Episode: * David Skok , General Partner @ Matrix Partners: Why does David believe that all good products have at least one variable pricing axis? Chetan Puttagunta , General Partner @ Benchmark: Why does Chetan believe we have seen a strong decline in the per seat pricing model? Mark Suster , General Partner @ Upfront Ventures: What were Mark’s two biggest lessons on pricing from seeing the hyper-growth of Salesforce first hand? I learned a ton about pricing.

5 Early Indicators Your Embedded Analytics Will Fail

Indicator #5: Revenue Impact. to languish until something—an unhappy customer, plummeting revenue, a spike in customer churn— demands change. revenue yet, it’s easy to push enhancements off. They invest time and money in a quick- fix tool, such as a bolt-on analytics that.

What’s an effective price? Price effective strategies & subscriptions


There’s a question that every startup founder, subscription service provider, and ecommerce store owner, needs to ask themselves on a regular basis: Is this the most effective price for my product or service? If the answer is no, then there is potential for revenue-related issues as your company matures. Finding an effective price helps you solidify your position, build trust with your customers, and achieve your business goals. What is an effective price? pricing

What is the subscription revenue model? | ProfitWell


The subscription revenue model is hardly new. It’s simple: the subscription revenue model benefits both customers and companies. Customers enjoy the convenience of auto-renewals and having access to a high-value offer for a low ongoing investment. Meanwhile, companies offering subscriptions can scale with confidence, with predictable revenue and deeper relationships with their customer base. What is the subscription revenue model?

Usage-Based Pricing: What SaaS Companies Need to Know


Enter usage-based pricing. In this guide, we’ll take a deep dive into usage-based pricing, how it works and who it’s for. What is usage-based pricing? What are the advantages of usage-based pricing? What are the downsides of usage-based pricing?

What is a pricing matrix? 4 Pricing matrix examples for high growth


Ah, pricing—the core of your business. Your pricing page is where the magic happens. Your pricing page is where you convert leads into revenue. So, your pricing structure needs to be laid out in a digestible format for customers—you do this with a pricing matrix. Throughout this article, I’ll unpack what a pricing matrix is, how to set one up, and some stellar pricing matrix examples. What is a pricing matrix? Optimized pricing.

New Study: 2018 State of Embedded Analytics Report

Customer success, not field sales, drove the most revenue. In turn, this drives user satisfaction, application stickiness, and revenue. user experiences, stickier applications, and (especially crucial for ISVs) higher revenue. helped them increase overall revenue.

Does psychological pricing work? Definition & examples | ProfitWell


If the answer is “yes,” then you, my friend, are a victim of psychological pricing. Retailers, restaurants, and businesses alike have utilized psychological pricing tactics in some regard. I’ll walk you through what psychological pricing is, some pros and cons, strategies, and thoughts on whether your B2B business should consider psychological pricing. What is psychological pricing? It integrates sale tactics with price. Charm Pricing.

Pricing Structure Guide: Finding the Optimal Price Structure


If you know anything about us here at ProfitWell, it’s that we’re pretty keen on pricing. We’re always available to talk about pricing. Doesn’t matter who you are or what you’re selling, if it’s pricing, we’re interested. That’s because your pricing structure is absolutely definitive for your business. Where you go with pricing structure will define not only your approach to your price points but also your packaging and discounts throughout your business.

Why conversational customer support is a key strategic investment

Inside Intercom

Economies of scale, your position in the market, and your pricing should influence the way you think about spending on support. Pricing. It’s price. A similarly specced computer from Apple and Dell will not be priced the same and may even vary by orders of magnitude.

?? How “firing” the wrong customers allowed me to generate 2.5X revenue from the right ones

Chart Mogul

Reilly Chase knew that raising prices would not sit well with all of his customers. In January 2020, I decided to run a pricing experiment by increasing the price of the minimum plans at HostiFi from $19/month to $49/month for new customers. I felt that the business and product have matured significantly in the last year and provide enough value to justify the price increase. What I learned from this price increase is that I have two different customer groups.

Seed Investing Today: What’s Changed, What Hasn’t with Aileen Lee and Jason Lemkin (Video + Transcript)


What Nobody Tells You About Seed Investing with SaaStr CEO Jason Lemkin and Cowboy Ventures Founder and Partner Aileen Lee. I think it gives us a perspective that maybe we don’t get in some other places, in addition to many great investments over the years. On either a scale of 1 to 10 or a percentage basis, where is seed investment? I think that’s going to be an awesome time to invest, but I don’t think we’re quite there yet.

What is pricing power? How the power of pricing determines success


Deciding when to adjust your pricing is never easy. There is a lot riding on your ability to meet customer expectations—any miscalculation can result in unhappy customers and lost revenue. Think back to the last time Netflix raised its monthly price—social media was chock-full of negative comments about it. That’s why understanding how much pricing power you have is so important. What is pricing power? Pricing power is dependent on price elasticity of demand.

Six Lessons on How to Build a Platform that Fuels an Ecosystem with Plaid (Video + Transcript)


Quovo had focused on investment accounts and allowing you to programmatically interact with your investment accounts through third-party applications. If you think about the heyday, the early days of Wealthfront and Betterment, they came out and people started investing with them and they were really excited to grow their assets under management. ” This was before we had any real revenue.

SaaS Pricing Guide: When & How to Raise Prices Without Losing Customers

OpenView Labs

Segment CEO and Co-founder Peter Reinhardt was recently reflecting on what were his top lessons learned from changing packages and pricing. Without batting an eye, the unicorn founder said, “The first is to raise prices and that we discovered we could raise prices by probably ten thousand times from what we were initially charging and people were happy to pay for that.”. Successful price increases drive a far higher profit improvement than any other initiative.

It’s Time to Resegment Your Market (and Revise Your Pricing)

OpenView Labs

Any changes to either of these should cause you to reconsider your pricing strategy. Related read: The Ultimate SaaS Pricing Resources Guide. This is generally a bad thing, as commoditization means lower willingness to pay and less opportunity to make strategic pricing decisions.

A Step by Step Guide to Revenue Growth with Mark Roberge (Video + Transcript)


He provides an in-depth guide to driving revenue growth at your company and what to expect at each stage. Awesome revenue growth on the X axis, awesome revenue retention on the Y. Hundred percent revenue retention, 200% revenue growth. Option A is we can go have awesome revenue retention, 100% revenue retention, but mediocre growth. Thirty, 50% revenue growth. Option B is awesome revenue growth, 200%, but mediocre revenue retention, 70%.

Not investing in localization is costing you more than you think

Inside Intercom

Because of this, localization can seem unattainable to many small and medium-sized businesses that may not have the capital to invest in localization – or the resources to maintain it. The post Not investing in localization is costing you more than you think appeared first on Inside Intercom.

How to handle price objections

When someone tells you your product is too expensive, it's not always about the price. A classic sales mantra is that if a prospect gives you the price is too high objection , you simply haven't communicated enough value. But oftentimes it's about something else altogether—and they simply use pricing as an easy way out. Here's how to handle price objections effectively in any sales scenario, uncover the real reason for the price objection, and overcome it effectively.

Pricing Optimization: Why and How You Need to Optimize Your Prices


For years, I’ve seen companies start their pricing journey by simply pulling a number out of their hat and calling it a day. Some get close, guided by their competitors’ prices (which were likely pulled from their own hats). We’ve talked before about pricing strategy being like a dartboard. Guessing at your pricing is a little like throwing darts blindfolded. That’s where pricing optimization comes in. You can’t afford to overlook optimizing your pricing.

Pricing Strategies: How To Price Your Social Media Marketing Services


Without a doubt, no matter who you are selling to, social media is an effective marketing tool that helps grow your business and increase revenues. How to price your social media marketing services Now when it comes to social media marketing, most people wanted to know how much it costs. Raise your prices It is only natural and quite tempting on your part to offer lower prices so that you can attract more clients in the long run.

Value Delivery Patterns Shape Your Pricing Choices

OpenView Labs

The when becomes a critical input into designing your pricing model. Working with a large B2B SaaS company that has a long implementation and configuration cycle, we uncovered contradictions between their pricing and how the customer was getting value. This company manages time to capture implementation costs (how many months will it take until revenue collected exceeds investment in implementation), with a target to capture these within four months.

What is a Pricing Discrepancy? Why Customers Leave Before Checkout


And while I’m sure unexpected power outages, cranky children, and overdrawn credit cards play some part in that number, the biggest contributor to abandoned checkouts is pricing discrepancy. Pricing discrepancies and extra costs were the primary cause of abandoned carts for 60% of respondents in a 2017 survey from Baymard. Fixing unexpected discrepancies in your pricing, then, can quickly and dramatically increase your conversion rates. What is a pricing discrepancy?

Recurring revenue: drive business growth with simple metrics


Recurring revenue is the lifeblood of subscription companies, and for good reason. Finally, recurring revenue gives the company a sense of predictable revenue and compounding growth. Implementing a recurring revenue model requires enabling a data-driven process and understanding the axes through which SaaS metrics impact your business. What is recurring revenue? Recurring revenue is revenue continuously brought in by customers who are on a subscription.

The B2B SaaS Pricing Model that Doubled Revenue and the Others that Failed


See all the dumb things we did with our b2b SaaS pricing and the “obvious” pricing model that worked, doubled revenue and made us profitable. Related : What we Realised about Enterprise Sales Also see : Enterprise Software Pricing Advice We Wish We had Known Contents Key lessons learned The model that worked All the models that failed and why Key lessons that got us to a pricing model that worked. We tried every other dumb pricing model and this was the winner.

B2B 40

Ten Year's Worth of Learnings About Pricing

Tomasz Tunguz

Last week, I shared a presentation with an executive team at a large public SaaS company on everything I’ve learned about pricing. Here’s a summary of the frameworks and theory that I’ve aggregated over a decade of investing in startups. Why do we set prices? Setting aside the important reasons of generating revenue and maintaining solvency for a business, there are many other reasons to set price. There are four components to pricing: 1.

Using Product Led Growth as an Indicator for Investment w/OpenView Venture Partner, Ashley Smith (Video + Transcript)


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? I enjoyed that weird dynamic of trying to impress them and get them to invest in my company. Enterprise value per revenue is 10X.

SaaS Pricing: The two sides of Freemium

Chart Mogul

It requires some upfront investment but the cost of scaling documentation to thousands (or even millions) of customers is zero ! Your recurring revenue (à la ChartMogul’s new Free plan). Some businesses are small and won’t hit the revenue limit. Hint: If you want to see examples of B2B SaaS pricing pages, check out our analysis: 5 key learnings from analyzing top B2B SaaS pricing pages. And you need a pricing structure that suits your product.

What is revenue performance management? Measure & Increase ROI


Even if you get it all right, there’s still one question that you can’t answer: “What will revenue performance be like?” The only way to answer that question is to optimize each of your would-be customers’ every interaction with your company and product via a process known as revenue performance management. Defining revenue performance. Revenue performance is the analysis and improvement of sales marketing efforts using revenue as the key performance indicator.

Ideas we'd like to invest in

The Angel VC

Inspired by Paul Graham’s “Startup Ideas We’d Like to Fund” post of a few years ago I’d like to start a series of posts about ideas that I find exciting and that we at Point Nine would be very interested in investing in. That means low customer acquisition costs which, combined with a good revenue model, are a killer.

The 14 best SaaS tools: analytics, accounting, pricing, and retention


So I’ll unpack some of our favorite tools that cater to certain needs—analytics, accounting, retention, pricing, and more. From optimizing your pricing to CRM—there’s a tool tailored for all your SaaS needs. Subscription businesses rely on recurring revenue from subscribers, so retaining dedicated customers is crucial to keeping your business alive. Accounting software will keep all revenue assets organized. Pricing. Price Intelligently/ProfitWell.