SaaStr

SEPTEMBER 3, 2021

Q: How Do VCs Mitigate Investment Risks? There are a number of slightly subtle things the best VCs do, and the rest really don’t: Getting other investors to carry their “Yellow Lights” You’ll end up with investments sort of doing OK, with customers, but really burning too much cash to justify another check.

Investment 239

Investment Cloud Pricing Branding 239

How To Buy Saas

MARCH 7, 2024

One of the main elements you should take into account whilst choosing the Software as a Service (SaaS) solution that makes the best selection for your business is cost which is the most critical statistic for you. The tiered price system can be applicable either to separate feature sets or to levels of service for different price ranges.

Pricing 52

Pricing SaaS Payments Payment Solutions Payment Methods 52

SaaStr

SEPTEMBER 19, 2023

Many of the fundamental business models that were once engraved in the SaaS playbook are now changing thanks to a tougher macro environment and a maturing market. PST, Stephanie Opdam, Partner at Notion Capital, shares four business model changes that will allow SaaS companies to build resilience and staying power over time.

Business Model 247

Business Model SaaS Payments Payments Headcount 247

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. However, to keep your business afloat, you’ll need to effect a SaaS price increase.

Pricing 111

Pricing SaaS Scale Churn 111

SaaStr

JULY 29, 2022

The Day in SaaS, 07.28.22: Public SaaS companies are worth exactly 50% of What They Were 12 Months Ago: [link] pic.twitter.com/pbK4BmoNwo. The best of the best in SaaS and Cloud, truly the fastest growing and most iconic SaaS companies, from Snowflake to Datadog and more are way, way down. But what about startups?

Startup 291

Startup Venture Capital SaaS Cloud 291

FastSpring

SEPTEMBER 16, 2022

But what about pricing? When FastSpring’s Chief Product Officer Kurt Smith worked with growth-stage to Fortune 100 companies at Accel-KKR, he consistently saw pricing as one of the most essential growth levers they employed to meet their next revenue goal. Why You Shouldn’t Trust How Your Competitor’s Price.

Pricing 118

Pricing Payment Solutions Payment Services SaaS Payments 118

SaaStr

APRIL 17, 2024

But now a second SaaS security leader has filed to IPO, Rubrik. Is this the new bar to IPO in SaaS? Not That Efficient — Yet Rubrik is bucking the trend of public SaaS leaders by not being profitable, free-cash flow positive, or really all that efficient … yet. Since then, we’ve had just one — Klaviyo.

Scale 228

Scale Pricing Scaling Cloud 228

Tom Tunguz

DECEMBER 26, 2018

Just where are we pricing SaaS companies today? The answer is yes, they have, but enterprise value to forward revenue multiples are still at some of the highest levels for SaaS companies in the past eight years. Then prices began a long descent into the February nadir at 3.3x Many stocks are down 10 to 50%.

Pricing 176

Pricing SaaS Startup Investment 176

SaaStr

DECEMBER 17, 2021

Pricing is one of the most challenging elements to get right for SaaS companies. How much should you charge, and what pricing model works best? In an era of empowered buyers, vendors should take care to remove obstacles from the pricing process or risk losing the customer to a competitor.

Pricing 205

Pricing Scale Retention AI 205

SaaStr

NOVEMBER 8, 2022

You know what’s back in fashion today in SaaS? And that’s a lot rarer in SaaS. But so many SaaS leaders aren’t really profitable at $1B ARR even, Why not? And it’s not just public SaaS companies that are often struggling to get profitable. I’m an investor in maybe 30 SaaS startups. So is SaaS cursed?

Scale 280

Scale SaaS Banking AWS 280

Stax

APRIL 18, 2024

Independent Software Vendors (ISVs) and Software-as-a-Service Providers (SaaS) operate within the same market, thus creating a push-and-pull revenue dynamic. SaaS companies deliver software applications over the internet on a subscription basis, simplifying access and management for users. What are SaaS companies?

Outsourcing Services 88

Outsourcing Services SaaS Payments Payment Services Payment Methods 88

Intercom, Inc.

OCTOBER 7, 2020

“Support isn’t just a cost center, but a strategic investment that increases customer retention and reduces churn” Indeed, if you look at the broader financial models of customer support, you’ll see that support isn’t just a cost center, but a strategic investment that increases customer retention and reduces churn.

Customer Support 196

Customer Support Investment Scale Retention 196

SaaStr

APRIL 19, 2024

How do you reverse-engineer your first million as a SaaS startup founder? He’s invested in startups as a VC since 2013 and has 10x his fund. Now, every public SaaS company is at $300k to $400k of revenue per employee. Reverse Engineering Your Way to $100M Tip #3 As soon as you cross 5% of your revenue in an area, invest in it.

Engineering 245

Engineering Business Model Pricing Scaling 245

SaaStr

MARCH 22, 2024

And what it says is that even though Seed stage investing remains arguably as strong as ever … Series A hasn’t bounced back. The public markets are up overall, but multiples aren’t, and overall growth in public SaaS companies has slowed. Raising a Series A is as hard as it’s been since 2018 is the answer.

AI 312

AI Pricing Data Investment 312

SaaStr

MARCH 11, 2022

Multiples are too low today, given that the best SaaS and Cloud companies not only are growing faster than ever, but are even accelerating at scale. Personally, I’m too bullish on the incredible growth of SaaS leaders to think it was all a One Off. But overall, the growth of top SaaS companies is still epic.

Scale 266

Scale SaaS Cloud Pricing 266

Tom Tunguz

JULY 30, 2023

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. Within 18 months, the company attained a sale price within 5% of the high.

Payment Services 213

Payment Services Sales Acquisition SaaS 213

User Pilot

MARCH 25, 2024

Whether you’re planning your exit, seeking VC funding, or setting up ESOPs, a SaaS valuation is a must. Our article: Explains different SaaS valuation methods. Shows how to leverage PLG strategies to boost the value of your SaaS business. Want to learn how Userpilot can help you improve your SaaS valuation?

SaaS 92

SaaS Customer Lifetime Value Acquisition Metrics 92

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. What is a cost-plus pricing?

Pricing 92

Pricing Software Review Market Research Acquisition 92

SaaStr

DECEMBER 29, 2023

Dear SaaStr: How Long Should a Free Trial Be for SaaS Products? What I mean is, this is one of those things in SaaS that is over-analyzed, as if it will make a magical difference. Just bear in mind that’s the real history behind the extremely common 14 day duration you’ll see at many sales-led SaaS leaders. And that’s OK.

SaaS 197

SaaS User Experience Startup Investment 197

SaaStr

MARCH 27, 2024

So we’ve probably covered HubSpot more than any other SaaS and Cloud leader on this 5 Interesting Learnings series, but there’s a good reason for it: First, HubSpot is a lot like most of us. So many SaaS companies just run out of new customers by $100m ARR or so. It sells sales, marketing, support and more tools.

Scale 241

Scale Cloud Scaling Pricing 241

User Pilot

APRIL 29, 2024

Mastering SaaS renewals’ best practices can transform a routine administrative task into a strategic opportunity to drive customer success and propel your business toward sustainable growth. TL;DR The SaaS renewal process involves a series of actions on/before the renewal date that lead to a customer’s renewal.

SaaS Payments 79

SaaS Payments Business SaaS Payment Solutions 79

Tom Tunguz

JANUARY 16, 2018

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? There are four components to pricing: 1.

Pricing 236

Pricing Market Research Interviewing Product Marketing 236

SaaStr

APRIL 11, 2022

So public Cloud and SaaS stocks continue to be under a lot of pressure, with many Cloud leaders trading for half of what they were trading at just a few months ago. 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. But substantial.

Acquisition 248

Acquisition SaaS Cloud B2B 248

Stax

FEBRUARY 21, 2024

For modern Software as a Service (SaaS) companies, the automobile is replaced by primarily digital and cloud-based solutions and software. And because of the digital nature of SaaS businesses and their subscription-based business models, the ability to collect data on how the company is performing is easier and faster than ever.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

Clouded Judgement

APRIL 19, 2024

Subscribe now Rubrik IPO Update This week Rubrik launched their IPO with an initial pricing range of $28 - $31 / share. The table below lays out a few stats at different share prices. I’ll update this table if / when they update the pricing range. Altimeter is an investment adviser registered with the U.S.

Cloud 141

Cloud Scale Subscription Payment Features 141

Clouded Judgement

MARCH 29, 2024

The promise of SaaS is that growth in the early years leads to profits in the mature years. It shows the number of months it takes for a SaaS business to payback their fully burdened CAC on a gross profit basis. This is for information purposes and should not be construed as an investment recommendation.

Cloud 278

Cloud Forecasting Subscription Payment Features 278

Incredo

JUNE 25, 2019

You analyze your needs and the pricing plans and pay for the most comfortable one. But when it comes to SaaS, freemium plans become a reality. SaaS freemium model: The What, The How and The Why. The concept of freemium is mainly typical for the SaaS world (yeah, SaaS means the world to us) and the video games industry.

SaaS 236

SaaS Pricing Software Review Acquisition 236

SaaStr

FEBRUARY 15, 2024

“Doubling Down” is a new series where we hear from top B2B SaaS investors on their most recent activities and takes on the current market. What’s your most recent disclosed investment? What’s your sweet spot for investing — check size, stage, type of deal? Check that out here. Why did you do the deal?

Scale 231

Scale Software Review Payment Features AI 231

SaaStr

SEPTEMBER 20, 2023

So Harry Stebbings was kind enough to have us back in the new group format on 20VC with 2 of the legends in seed investing, Eric Paley of Founder Collective and Mike Maples of Floodgate: While both aren’t pure SaaS investors, they’re both in the top 1% (!), Mike Maples is one of the OGs of seed investing.

Venture Capital 235

Venture Capital Investment Pricing Startup 235

SaaStr

APRIL 27, 2022

So the story of the past few years has been the explosion of SaaS and Cloud unicorns. With upwards of 400 SaaS and Cloud startups now valued at $1B+ now (out of 1,200+ total Unicorns), times are good. Well early-stage (seed, Series A) investors are hoping at least 1 investment per fund does 100x or more. That’s the bar.

SaaS 185

SaaS Cloud Investment Startup 185

SaaStr

FEBRUARY 1, 2022

Q: Dear SaaStr: Why Are So Many SaaS CEOs Former Engineers? I’ve come to almost exclusively invest in founder-CEOs that are or were engineers. You need to pay up to recruit a “technical co-founder” and then she often will bring in 2x the engineers, at a higher price, than an engineer CEO. I’ve found that works equally well.

Outsourcing Services 185

Outsourcing Services Engineering CTO SaaS 185

OpenView Labs

APRIL 8, 2021

Back in November I started writing about why forward-thinking SaaS companies are shifting to usage-based models. While many of the most successful public and private SaaS companies were already usage-based, there wasn’t a clear playbook on the complexities of scaling a usage-based business. Usage-based pricing = compound interest.

Pricing 97

Pricing Scale Subscription Payment Features 97

SaaStr

NOVEMBER 12, 2022

I’ve had the privilege to invest one way or another in about 35 SaaS companies, both as a VC and as angel. They understand why they got “No”s in the early, pre-traction days, and even, in the early-ish days when they had a handful of customers but wasn’t really taking off yet (my favorite time to invest).

Scale 339

Scale Sales Recruiting Machine Learning Artificial Intelligence 339

SaaStr

JULY 17, 2020

these are the Best of Times for SaaS VCs. Two related reasons: First, the stock market for public SaaS and Cloud companies is at an all-time high. Second, in many categories of SaaS, usage is way way up since March 15. Why would you invest anywhere else? But VCs only want to invest in the 4/10 in the above portfolio.

Airlines 286

Airlines SaaS Travel Cloud 286

OpenView Labs

JANUARY 13, 2022

Welcome to the third edition of the Pricing Transformations series. Pricing Transformations in 2020. Pricing Transformations in 2021. Pricing models must be adaptable – 4/5 on this. We took off a point as there are still too few people who understand pricing models well enough to make them adaptable.

Pricing 82

Pricing Payment Services SaaS Payments Payment Solutions 82

SaaStr

JULY 5, 2023

If you do late stage investing … well, every company you invest in is pretty darn good and growing nicely. In SaaS, growth investments generally will all be at at least $20m ARR, or $40m ARR, or more. In SaaS, growth investments generally will all be at at least $20m ARR, or $40m ARR, or more.

Venture Capital 198

Venture Capital Investment Cloud Pricing 198

Clouded Judgement

APRIL 26, 2024

The full quote is below: “We expect capital expenditures to increase materially on a sequential basis driven by cloud and AI infrastructure investments. We continue to bring capacity online as we scale our AI investments with growing demand. Altimeter is an investment adviser registered with the U.S.

Azure 177

Azure Cloud Software AI 177