Tom Tunguz

APRIL 28, 2024

What drives the acquisition market of startups? It’s the big deals. In the last decade, the total number of venture backed software M&A by count has remained relatively constant. The black line shows the linear trend across US venture backed companies with disclosed values of $50m or more.

Acquisition 147

Acquisition Venture Capital Software Startup 147

SaaStr

AUGUST 24, 2021

Q: What are the best marketing techniques for an early stage SaaS startup? But in general, most startups find that at best 1–2 channels really work for them. It could be content marketing. They will market for you for free — just slowly. They will market for you for free — just slowly. Do customer dinnners.

Scale 337

Scale Startup Marketing SaaS 337

SaaStr

NOVEMBER 9, 2023

Dear SaaStr: What are some of the “ultimate sins” in marketing and sales and success in SaaS in the early stages? Hire stretch reps if you want, but someone without any closing experience likely can’t close at your startup no one has ever heard of. Startups are a journey and you need reps that want to be on the journey.

Sales Hiring 224

Sales Hiring Scale Startup Marketing 224

Tom Tunguz

JANUARY 4, 2023

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. During a down-market, young startups who face a radically more challenging fundraising market than six months ago more often choose a quick sale. But it doesn’t mean all sectors of the M&A market are silent.

Startup 315

Startup Marketing Acquisition Pricing 315

SaaStr

APRIL 21, 2024

Dear SaaStr: What Are The Top 5 Things I Should Know Before Starting a SaaS Startup? Make 100% sure the market will actually pay for your product. They build a useful product, but not one the market values so much they will pay for it. The post Dear SaaStr: What Are The Top 5 Things I Should Know Before Starting a SaaS Startup?

Startup 268

Startup CTO SaaS Interviewing 268

Tom Tunguz

JANUARY 10, 2022

The market determines which sectors are in favor and which sectors aren’t. Naturally, comparing data companies' valuations to the market should reveal investors' aspirations for the data sector relative to the market writ large. Data startups commanded a 47% premium. Good question! 2018 was the watershed year.

Startup 295

Startup Data Marketing Investment 295

SaaStr

APRIL 16, 2024

Dear SaaStr: What Do You Do When Your Startup is Not Growing Anymore? You probably have fallen out of product-market fit, partially or entirely. More on that here : When You Fall Out of Product-Market Fit (Updated) Second, focus on the customers you do have and making them super happy. First, be honest about why.

Startup 244

Startup B2B Metrics Product Marketing 244

SaaStr

JUNE 27, 2020

A little while back we put together some of the top sales & marketing mistakes SaaS companies and founders make, especially in the early days. Hire stretch reps if you want, but someone without any closing experience likely can’t close at your startup no one has ever heard of. Hiring a brand marketing firm. A bit more here.

Sales Hiring 363

Sales Hiring Scale Startup Marketing 363

Tom Tunguz

DECEMBER 27, 2021

Ten years ago, startups pulled capital from the capital markets. A startup raised money, executed for 12-24 months then sought more capital on Sand Hill, flaunting milestones to justify a higher valuation. I call these mark-to-market rounds. Second, mark-to-market rounds offer secondary. link to 100x ARR).

Startup 256

Startup Strategy Marketing Entertainment 256

Tom Tunguz

JANUARY 6, 2024

Hang around startups & venture capital long enough, & you’ll hear this aphorism. In any given year, there’s an 82% chance the value of startup liquidity will change by more than 77% - both up & down. Aside from certain crypto tokens, it’s hard to find a less reliable market than the VC exit market.

Startup 263

Startup Venture Capital Software Marketing 263

SaaStr

FEBRUARY 16, 2023

Dear SaaStr: How Does a SaaS Startup Break Out in a Crowded Market? Find one segment of the market to win in. Most SaaS markets are crowded today. There can be room for a vendor focused just on e-commerce, or healthcare, or contact centers, or other large markets. A bit more here: 5 Ways to Enter a Crowded Market.

Startup 220

Startup Healthcare Marketing SaaS 220

Tom Tunguz

MARCH 8, 2022

Startups create products. After product-market fit, product teams hew the product roadmap from a panoply of options to the features best aligned with the company’s plans. In much the same way, CEOs architect the organization that builds, markets, sells, and supports the product. Who should be the first marketing hire ?

Startup 361

Startup Acquisition Product Marketing Scaling 361

SaaStr

AUGUST 10, 2023

Dear SaaStr: How Can You Grow a SaaS Startup Without Spending a Ton on Sales and Marketing? 9 views 1 share The post Dear SaaStr: How Can You Grow a SaaS Startup Without Spending a Ton on Sales and Marketing? It’s hard but it can be done. appeared first on SaaStr.

Scale 213

Scale Venture Capital Startup Marketing 213

SaaStr

SEPTEMBER 26, 2023

Dear SaaStr: What is The Biggest Difference Between Running a 10 Person Startup and a 100 Person Startup? You won’t be able to scale this far without a full management team — VPs of Sales, Marketing, Product, Engineering, Customer Success at least. But the toughest personal challenge for many CEOs is letting go.

Sales Hiring 266

Sales Hiring Startup Scale Scaling 266

SaaStr

NOVEMBER 18, 2023

SaaS products and services like Pilot track the finances of 1,000s of SaaS and other startup so they’re an interesting source of hard data. Something that’s both not surprising but also pretty impactful: 57% of venture-backed startups will have to go “back to market” in 2024 to raise more capital.

Startup 301

Startup Venture Capital Azure AWS 301

Tom Tunguz

MARCH 8, 2023

With all the broad macro economic shifts, startups are pursuing their core markets much differently in 2023 than in 2022. To illuminate those trends, I’ve constructed a brief, 28 question go-to-market survey here. If you have questions, just message me on Twitter or send me an email.

Startup 191

Startup Construction Marketing Trends 191

Tom Tunguz

MARCH 10, 2022

I’m going to tell you a bit about two startups and I’d like you to guess the name of each company. Both startups provide database software to developers to build applications. Market Cap to Revenue Multiple. Both of these businesses are publicly traded. Both have grown very fast. They would both exceed $400m in 2020.

Startup 335

Startup Pricing Revenue Software 335

SaaStr

JANUARY 2, 2024

ARR, Zendesk today gets 14% of new business from startups. On top of that, if you look at their top accounts globally, 33 of the top 50 customers by ARR are startups. You have to think about how you will differentiate and craft your offers from the rest of your marketing. At Zendesk, startups got six months free.

Startup 178

Startup Scale Underperforming Technical Team AWS 178

Tom Tunguz

MAY 15, 2022

As the fiscal quarters of many startups draw to a close, board members and management teams are having one of four conversations: The World is Your Oyster, Time to Strategize, Chewing Gravel, or Go Big/Go Profitable. The x-axis is the Zero Cash Date: when the startup runs out of money. Markets reverse in a moment.

Startup 346

Startup Outsourced Development Scale Banking 346

Tom Tunguz

JANUARY 18, 2022

Public market investors are rotating out of high growth technology companies as the Fed’s policies of quantitative easing, asset purchases, and low rates abate. The question on every software founder’s mind today must be, how will this affect the private financing markets? Only the 2016 reduction of 57% surpasses it.

Marketing 362

Marketing Startup Finance Technology 362

Tom Tunguz

APRIL 16, 2024

Over the weekend, Tobi, the founder and CEO of Shopify, discussed the major reason investors passed on Shopify in the early days : market size. Years later, I listened as Bill Gurley shared his thoughts about market size. He asked himself a question : whether the startup was increasing, decreasing, or maintaining the market size? (I

Marketing 113

Marketing Finance Startup Business 113

Tom Tunguz

MAY 16, 2023

What percent of headcount is in sales & marketing? It’s surprising to see the Giga companies flat - another indication of uncertain market times ahead. Once companies grow to about 50-100 employees, other teams blossom to support & market the product. Sales & Marketing are a different story.

Headcount 270

Headcount Startup Scale Engineering 270

Tom Tunguz

MARCH 13, 2022

Thanks to the many readers who wrote in to Guess the Startup on Friday. I had three goals for the Guess the Startup Post. they employ dissimilar go-to-markets: Ethereum has no enterprise sales team but MongoDB certainly does. they employ dissimilar go-to-markets: Ethereum has no enterprise sales team but MongoDB certainly does.

Startup 291

Startup Scale Retention Enterprise 291

Tom Tunguz

MARCH 27, 2023

Slower sales cycles create pipeline shocks & startups are feeling the impacts. The average startup saw a 24% increase in sales cycle from early 2022 to 2023. Startups selling to enterprises have increased 36%, twice those of Mid-Market & SMB focused companies. 60 day sales cycles are now 75 days.

Startup 326

Startup SMB Headcount Sales 326

SaaStr

APRIL 10, 2023

Others may seek to corner the SMB market. However, what many businesses may overlook is the startup segment. Often, startups are lumped in with small businesses, yet this approach fails to recognize what motivates and attracts these early-stage companies. Why Seek Out Startups? Acquire : Create a Compelling Offer.

Startup 197

Startup Scale SMB Venture Capital 197

SaaStr

JANUARY 25, 2024

Dear SaaStr: What happens to employees after your startup gets acquired? Then, either: They’ll want to keep everyone for a while; or They won’t see the value in keeping much of sales, marketing, finance, etc. The post Dear SaaStr: What Happens to Employees After Your Startup Gets Acquired? It varies — a lot.

Startup 211

Startup Sales Hiring Finance Acquisition 211

SaaStr

FEBRUARY 4, 2024

Dear SaaStr: Can a startup without any prior experience raise money from venture capitalists (VCs)? You need to prove product-market fit and strong growth, at least relatively speaking in the early days. A bit more here: Dear SaaStr: When is a Startup Ready to Raise Venture Capital These Days? appeared first on SaaStr.

Venture Capital 212

Venture Capital Startup Product Marketing Marketing 212

Tom Tunguz

APRIL 2, 2023

Burn multiple measures the capital efficiency of a startup. Startup burn multiples have changed markedly in 2023. In contrast, startups with higher operating expenses will reduce their burn multiple by 34-70%. In contrast, startups with higher operating expenses will reduce their burn multiple by 34-70%.

Startup 275

Startup Marketing Business 275

SaaStr

APRIL 8, 2024

Dear SaaStr: Why Do VC Backed Startups Seem To Almost Always Be Running Out of Money? A VP of Marketing that can’t get you leads & opportunities = cash drain. The #1 issue I see is not understanding what investments really are accretive — and which aren’t. And so the money goes far, far faster than anticipated. You gotta move on.

Sales Hiring 187

Sales Hiring Scale Startup Venture Capital 187

Tom Tunguz

AUGUST 1, 2022

How much value does a successful software startup create per dollar of venture investment? Over the last 30 years, a venture dollar invested in a successful US software startup generated $10 of value. In addition to MOIC patterns, the data reveals three startup fundraising epochs. Startups in the 90s raised less than $10m.

Startup 296

Startup Software Pricing Investment 296

SaaStr

DECEMBER 26, 2023

Dear SaaStr: What Is A Good Demo Conversion Rate for a SaaS Startup? But sometimes, as your brand grows and you get better at marketing, you’ll attract more general passers by. If fewer than 8%-10% or so of your demos convert to paid customers, you’ll start to burn out your sales team. Even that’s a lot. appeared first on SaaStr.

Scale 223

Scale Startup Sales Hiring SaaS 223

Tom Tunguz

APRIL 27, 2022

Reflecting on this question a founder posed this week, I remembered how we came to be here, the three eras of startup pricing: cash-flow, multiples, and discount-to-future-value. The art of startup pricing in a recipe. $5m Startups were priced first on forward-revenue multiple. Web3/crypto startups are often priced this way.

Startup 258

Startup Venture Capital Pricing Investment 258

Intercom, Inc.

JUNE 1, 2018

The most important tasks for any early stage startup are to write code and talk to users. Looking back, I didn’t see these activities as marketing with a capital M, but they absolutely were. Founding a startup is a lot like this. I didn’t have a perfectly mapped out startup marketing strategy. Absolutely not.

Startup 201

Startup Strategy Marketing Social Media 201