Matching Price to Value: 3 Lessons in Monetization from Menlo Ventures (Video + Transcript)

SaaStr

Naomi Pilosof Ionita | Investing Partner @ Menlo Ventures. We’re going to talk about matching price to value, and I’m going to share some lessons from my time as both an operator and an investor. This is a mobile solution for SMB’s to send an invoice and get paid. I’m a nerd on the subject, I love it and I brought it now from my time as an advisor and an operator to the investing side. The next camp, we price it artificially low.

SaaStr Podcast #395 with UserTesting CEO Andy MacMillan

SaaStr

Why does Andy think the seat-based pricing model in SaaS will die? Why is volume-based pricing optimal? How does one instil volume based pricing without disincentivizing usage? When we think about pricing today, you said to me before something that was fascinating.

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SaaStr Podcast #213: Tom Tunguz, GP @ Redpoint Ventures On Why Scoring Leads May Actually Be Dangerous

SaaStr

As for Tom, he joined Redpoint in 2008 and has since led investments in Kustomer, Looker, Expensify, and Gremlin all prior guests on the show, I hasten to add. In Today’s Episode We Discuss: * How Tom made his way from creating software with his father in Brazil to being GP and forefront figure in the SaaS investment community as a GP at Redpoint today? How does this differ when comparing enterprise to SMB? How does this differ when comparing SMB to enterprise?

8 Tough Lessons from Closing 12,000 Customers at WebPT (Video + Transcript)

SaaStr

It’s a global technology focused investment firm. So I went down the hall, met with the head of marketing, and I discovered a lot about in bound SaaS, about SMB, the importance of building this machine as I call it now that generates all these lovely leads. They all looked at me really weird because remember, I’d never done SMB before. Well, in the SMB space within physical therapy, most of the owners are actually operators as well.

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SaaStr Podcasts for the Week with Matrix Partners, ActiveCampaign, Insight Squared, and Dropbox — June 29, 2019

SaaStr

Jason Lemkin is the Founder @ SaaStr, the world’s largest SaaS community and leading early-stage SaaS fund with investments in Automile, TalkDesk, Algolia and more. What can founders do to their pricing model to extract as much value from each customer? How do the very best businesses structure their pricing for value extraction? * Is it best to start at enterprise and work down to SMB or does SMB and work up to enterprise work best?

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SaaStr Podcasts for the Week with Chargebee and Glassdoor — November 1, 2019

SaaStr

How does Krish think about purely serving the SMB market? How does Krish think your customer acquisition and GTM strategy has to change with the movement from SMB to enterprise? The reason I suggest this as an approach is that when you’re getting your pricing right as a partner, and to grow with your customer. That’s in a case when pricing is successful. How do you think about the right way to price a product as you move into enterprise?

Using Price & Demand Curves to Inform Startup Product Roadmaps

Tomasz Tunguz

The traditional theoretical price demand curve is often drawn like this. The chart makes two points: there is some relationship between price and demand / revenue opportunity, and customer segments underpin that relationship. Even if the details are very hazy, price demand curves are useful tools to inform product strategy and prioritization. After all that, there’s also a process of testing various price points to get a better sense of price elasticity.

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SaaStr Podcasts for the Week with Airtable and Shopify Plus — October 25, 2019

SaaStr

Pricing? * Harry Stebbings: Is it also challenging in terms of pricing, given the fact that one has to have consistent pricing, but also you might actually not have optimal value extraction for the product dependent on who’s using it and what sector they’re in. I think our pricing strategy will continue to evolve. So I do think our pricing strategy will continue to evolve and it is something that we’re talking a lot about internally.

Four Steps to Scaling to $250M from Stack Overflow

SaaStr

All of this will help create value and return on investment capital. SMB to Enterprise, decide which you want to start with and toward which you want to move. There is a deliberate focus on market differentiation vs. market relevance as it relates to investment.

Top 10 Learnings about Free Trials with Tomasz Tunguz (Video + Transcript)

SaaStr

We invest from the very earliest stages to the latest stages of software and consumer companies and we’re based in California. And they were broken down roughly a third, a third, a third by targeting the SMB, the mid-market, and the enterprise. In the SMB, two-thirds use month-to-month, and in the enterprise, you’ve got two-thirds using multi-year. And really, that comes back to your price point. And on the X-axis you have all the different price points.

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How Much ARR Can a CSM Manage?

Tomasz Tunguz

In the SMB the distribution is more uniform. Price points in the SMB can vary widely, as can the success effort. The lower the price point, the greater the number of accounts managed to reach that $2-5M in ARR managed per CSM. This is a pleasant surprise for startups because it means the CSM investment per dollar of ARR goes further. How much can a customer success manager manage? I’d heard the wisdom of $1-2M in ARR per year and around 80 accounts.

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29 Latin American SaaS Superstars

SaaStock

In preparation for SaaStock LatAm, we looked at what the vast continent has brewed beyond these hefty IPOs, asked local friends such as Diego Gomes, CEO of Rock Content and Patrick Arippol, Managing Director of Early-Stage Investments in DGF Investimentos which are the companies they are really excited about and came up with a list of 29 Latin American SaaS superstars. Omie main goal is to bridge the efficiency gap in Brazilian SMB, helping customers to be more prosperous.

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SaaStr’s Podcast “Best Of Guide” Our Top 10 Podcasts of All Time

SaaStr

How should early-stage startups approach the topic of pricing? As for Chetan, he focuses on enterprise software and has made investments in MuleSoft, MongoDB, Elastic, Heap, just to name a few. How Chetan made his way from the world of leveraged buyouts to the world of enterprise VC investing with NEA. Does Dave agree with David Skok on the need for more than 1 variable pricing mechanism? Why does Dave not encourage usage-based pricing? #8:

A Few SaaS Operational/Business Trends That We are Seeing Right Now

OPEXEngine

Here are a few of the trends that we are hearing about from CFOs, investors and lenders: Flexible pricing models and payment terms: A couple of things are happening here. This seems to be especially true for companies selling in the SMB space as compared to large enterprise customers.

“From Hackathon to Unicorn” Talkdesk Co-Founder Tiago Paiva and SaaStr CEO Jason Lemkin (Video + Transcript)

SaaStr

Also, don’t miss out on discounted prices for SaaStr Annual 2020 tickets. You’ll see what a unicorn looked like before they got their first investment. I was lucky enough to … One of my first larger investments was in Talkdesk. Because we all go … most of us in this room are going to go up market, we’re going to raise our prices. You go from the leanest organization and very small SMB, to closing seven figure TCVLs for enterprise.

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5 Myths That Stop SaaS Companies from Moving Upmarket with Dropbox (Video + Transcript)

SaaStr

You may actually have to pricing differentiate. Salesforce started at SMB and they moved up market and they have really done a fantastic job. How do you actually go from selling to consumers to then to SMB customers and then going up market. And unfortunately by the time we got to the CIO’s, we were heavily price negotiated. It’s the number of opportunities that you have in your market times the win rate times the ASP, which is the average selling price.

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Moving to Enterprise Sales {Part 2}: 5 Go-to-Market Prerequisites You Need to Succeed

Sales Hacker

When you are selling to SMB and MM, you can get away with fairly lean marketing. RELATED: From SMB to Enterprise: A 2-Step Strategy to Boost Adoption & Growth. The two most common approaches when it comes to your team is to either take your high-performing SMB/mid-market reps and have them sell into the enterprise, or hire experienced enterprise reps from other enterprise companies (Oracle, SFDC, SAP, etc.). Make no mistake, this is a long way from the SMB sales motion!

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Moving From Mid-Market to Enterprise {Part 1} – Product and Market Readiness

Sales Hacker

If you have a product that is absolutely crushing it in SMB/mid-market, you may be tempted to dive straight into the Enterprise market. Everyone needs to understand the investment and time-frames associated with this decision. SMB and Mid-Market orgs don’t have an analytics department with data scientists, so the technology fills the gap. Many SaaS products are successful in the SMB market because their function and process choices are built for the customer.

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How to Define the Go-To Market Strategy for Your B2B SaaS Company

Aaron Beashel

It’s free to send less than 2000 emails per month, with paid pricing plans going up from there. The end users of their software are marketers at SMB companies and they sell their product for around $100 per month (Meaning the Annual Contact Value is around $1000). Price. At what price point will you be selling your product? If it’s a low price point, then you’re likely going to need to employ a touchless acquisition model. Price. Price.

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Freemium: Playing the Long Game

Chart Mogul

Yet assessing this pricing model's success can be challenging if you're not measuring its long term, compounding effect on revenue. Adding expansion levers to your product pricing will ensure that you build a symbiotic relationship with your customers and grow as they grow.

Defining Your KPIs – The Importance Of A Yearly Review Right Now And How It Benefits Your 2021 Planning

OPEXEngine

If you are an early-stage or growth SaaS company, most likely all your sales and marketing expenses are invested in acquiring new customers. As a result, the company was comparing itself to companies selling millions of low-priced subscriptions in a high-volume, transactional SMB model.

SaaStr Podcasts for the Week: May 24, 2019

SaaStr

How does Andrew advise founders on the question of whether to start in enterprise or SMB? What are the benefits of starting in SMB? How does the product and what you invest in proactively need to change as you move into enterprise? Harry Stebbings: I do want to start there Andrew, and I know a lot of SaaS founders talk to me about this SMB, enterprise, where should I start and where should I move to and from? In the SMB, marketing component is heavier.

The SaaS Finance Roundup

SaaSX

Invest some time and learn the basics. Detailing how each interacts with one another and when and why they matter most, this article backs its findings with data collected by Price Intelligently , concluding with a 20-slide deck explaining these concepts even further. SaaS Financial Plan for Startups and SMB’s. I created the SaaS Financial Plan in Excel, so that SaaS startups and SMB’s could easily create their own financial forecast.

Sales and GTM in Uncertain Times with Adnan Chaudhry and Matt Garratt (Video + Transcript)

SaaStr

Matt Garratt: So for those that aren’t familiar with Salesforce Ventures, we are the strategic investment arm for Salesforce. Also, there is focus on changing terms to try and close and accelerate deals, reducing time commitment requirements for contracts, pricing minimums to get to a yes more quickly, and then also focusing on cash and cash collections by building more efficiency in that process. It’s the SMB space. So that’s been a heavy investment.

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Financial Resources and Capital Markets Roundup for 5/29/2020

OpenView Labs

gross multiple of invested capital—buying SaaS equities after IPO and holding long term is foolproof.”. Permabull investors point to Workday as their overwhelming proof that SaaS is a guaranteed successful long term investment. Long-term investors piled into Workday but their expected results were priced in 5 years ahead of time and the stock didn’t budge. This week, we saw improvements in economic data like consumer confidence and increases in home prices.

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SaaStr Podcasts for the Week with Pleo and Talkdesk — October 4, 2019

SaaStr

How does the product build in the early days differ when building for SMB vs enterprise? Why does Jeppe believe that building for SMB makes it easier to build a great culture internally? How does Jeppe respond to 3 common concerns VCs have with SMBs: * The price points are so low that it takes huge volume to scale to meaningful revenue? * How did you think about this, and why did you start with SMB? How do you think about that and the pricing element with SMB?

State of the Cloud 2019: Europa Edition with Alex Ferrara, Bessemer Venture Partners (Video + Transcript)

SaaStr

It was around that time about 12 years ago that Jeff Bezos launched AWS, and some of you may remember that, when he did this, Wall Street analysts were looking at him and saying, “Why would you take what’s already a very unprofitable business and drive it further into the red by investing in this AWS initiative?” Contrast that with companies that might also sell into the SMB segment of the market where the ASPs, the average deal sizes are lower.

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SaaStr Podcast #376 with ZoomInfo CEO Henry Schuck: “10 Mistakes the CEO of ZoomInfo Made on His Journey to IPO (Part 2)”

SaaStr

They’ve invested in all of these other businesses. You should go fix that, so that you have the opportunity to make these types of investments along the way, but totally get that it’s not for today.” We all under invest. And we just invested in automation.

In-House vs. Outsourced Sales: A Case for NOT Hiring SDRs

Sales Hacker

The SMB Decision: In-House vs. Outsourced Sales Development. As a high-growth SMB, your number-one focus is consistent sales. Based on my experience working with hundreds of SMBs across the country, 65% just aren’t at the size or run-rate to allow for the economic investment required to establish a successful in-house sales development team. That means the average SDR could come with a price tag of up to $150,000 per year.

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Benchmarking Hubspot's S-1 - How 7 Key SaaS Metrics Stack Up

Tomasz Tunguz

HubSpot’s target customer base are SMBs and with this price point, it’s possible to support a profitable inside sales model if the team is very efficient. HubSpot is the second fastest SMB SaaS company to IPO yet, achieving the mark within 8 years. Most other SMB companies, defined for this analysis as having an ARPC of less than $15,000, took at least one more year to go public.

How Much Should Your Startup Spend to Grow?

Tomasz Tunguz

To answer those questions, I’ve pulled together data from a basket of 46 publicly traded SaaS/Cloud companies and segmented them based on their average annual customer value (ACV) into three buckets: SMB ( =$10k to $100k). These four charts contrast sales & marketing investments and revenue growth trends across the three different SaaS startup segments. The median SMB SaaS startup spends significantly less on sales and marketing through year 4 of their lives.

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PODCAST 93: The Journey from 2x Founder to VC with Angus Davis

Sales Hacker

Now he’s a partner making investments on the VC side at Foundation Capital with over 20 years of operational experience. SMB Sales & SDRs at (Smaller) Scale [18:20]. Now he’s a partner making investments on the VC side at Foundation Capital, but has over 20 years of operational experience. We invest in technology companies typically at the earliest stages. SMB Sales & SDRs at (Smaller) Scale [18:20].

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5 Reasons COVID-19 Changes SaaS Forever

OPEXEngine

Management teams are learning that revenue doesn’t just “recur” —they need to invest to make it so. Based on historical experience, we forecast large enterprise-focused vendors sustaining renewal rates significantly better than SMB focused models, and subscriptions priced on infrastructure/data levels sustaining better than seat-based models.”.

SaaStr Podcasts for the Week with Kustomer, Google Cloud, and Zenoss — August 8, 2019

SaaStr

Why is it so crucial to invest in enablement in the early days? It’s not an SMB where you’re getting volumes of 100 a day. There are great companies out there that have entire infrastructures, teams, investment around teaching people how to sell. Now having said that, even then I need to invest in that enablement. I clearly don’t get out enough if I have a couple of questions on mid-market versus SMB, but let’s go for it.

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Sales Stack 2020: The Tools

yoursales

One Simple Price. Mimiran – More Leads and More Deals for SMB Services Business. Mimiran – More Leads and More Deals for SMB Services Business. Currenty investing time in our Drift setup. Mimiran – More Leads and More Deals for SMB Services Business. Sales Stack 2020. Sales Tools for Professional Sales. SALES STACK 2020: THE TOOLS SALES STACK 2020: THE TOOLS. W elcome to "Sales Stack 2020 - Sales Tools for Professional Sales".

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The Best SaaS Articles of 2016 From Around the Web

Hitenism

That’s because the people who are working in the SaaS industry or investing in these businesses are sharing much more of the details about all aspects of growing and scaling a SaaS business. Work backwards from there to get your pricing model and acquisition channels. SMB-focused companies often find growth by going upmarket. A homepage, pricing page and thank you page.

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SaaStr Podcasts for the Week with Zylo and TaskRabbit — July 26, 2019

SaaStr

She likes to invest across consumer, B2B saas, and technology infrastructure companies at the earliest stages. ” Is it SMB or is it Enterprise? You make that decision based on the fact that your profile fits either an SMB or Enterprise. Then, you can decide, is it a high volume play in the SMB? In the early days, you obviously have less leverage and brand to price strongly. Really invest in values and what you stand for.

SaaStr Podcasts for the Week with Work-Bench and Initialized Capital — May 8, 2020

SaaStr

Jessica Lin: A sale may not happen within three months or even six months, but the more you can provide value to them, whether it’s connecting them with other peers, whether it’s inviting them to events, whether it’s sharing, those are the types of relationships and investment where you can see the enterprise relationship pay off, maybe sometimes even one to two years down the line, but can be very worth it.

Sequencing Business Models: Can That SAAS Business Turn Into a Marketplace?

Casey Accidental

Also, how should the SAAS tool price these additional customers? Excess SMB Inventory for Groupon. You need to be in a position where you can invest for that long before seeing a return. As someone who has spent a lot of time building marketplaces in my career, a curious thing has happened over the last couple years. Founders have started reaching out asking for help converting their SAAS or SAAS-like business into a marketplace.

SaaStr Podcast for the Week with Redpoint Ventures and Cloudflare — January 3, 2020

SaaStr

As for Tom, he joined Redpoint in 2008 and has since led investments in Kustomer, Looker, Expensify and Gremlin all prior guests on the show I hasten to add. In Today’s Episode We Discuss: * How Tom made his way from creating software with his father in Brazil to being GP and forefront figure in the SaaS investment community as a GP at Redpoint today. How does this differ when comparing enterprise to SMB? How does this differ when comparing SMB to enterprise?

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