Tom Tunguz

APRIL 2, 2023

Burn multiple measures the capital efficiency of a startup. Startup burn multiples have changed markedly in 2023. Companies with more efficient burn multiples between 1-2 plan to increase their net burn per new dollar of bookings by between 14-40%. The average startup with a burn multiple of 5 plans to reduce to 1.5.

Startup 301

Startup Marketing Business 301

SaaStr

APRIL 28, 2025

Cross-Vertical Market Expansion Creates Unexpected Innovation Synergies While many startups laser-focus on dominating a single vertical, Sekar’s experience at both Meraki and Samsara showed that deliberate cross-vertical expansion creates powerful network effects of innovation.

Scale 245

Scale Transportation Scaling SMB 245

SaaStr

AUGUST 9, 2024

From startup to $500M CARR, Spencer Burke, SVP of Growth at Braze, shares how Braze scaled a growth and customer success team. A case study in the book In the Age of the Smart Machine, The Future of Work and Power discusses work at paper mills in the mid-1980s as that wave of computation came into industrial processes.

Scale 297

Scale Sales Hiring Scaling Startup 297

Tom Tunguz

JUNE 18, 2019

The template is broken into six sections: People, Bookings & Revenue, Cash, Sales, Marketing, Customer Success. People is the first section because people are a startup’s most important element. Bookings and Revenue illuminates the company’s performance in closing new business (bookings) and recurring revenue.

Metrics 250

Metrics Sales Recruiting Startup Headcount 250

Tom Tunguz

MAY 28, 2019

In 2013, Scott Berkun authored a book called The Year Without Pants. After I read the book, I wrote : In the coming years, video conferencing and online meetings will become much more prevalent as stories like the ones Scott shares are told and retold. Scott shared his experience working remotely for Wordpress.

Sales Recruiting 278

Sales Recruiting Startup Sales Hiring Engineering 278

Tom Tunguz

MARCH 19, 2023

During that session, she alluded to a book sharing her expertise in building exceptional teams at two of the most successful startups. That book, Scaling People : Tactics for Management & Company Building. is a book a management team could take to an offsite to develop or re-imagine the entire operating system of a business.

Startup 229

Startup Scale Systems Review Compensation 229

SaaStr

SEPTEMBER 27, 2023

Dear SaaStr: What Are The Biggest Problems You Face as a Startup Founder? Later, once you have a brand, you’ll be competing with Hot Startups nipping at your heals for top VPs. Many functions simply need more bodies to keep up with larger bookings goals, and inefficiencies come from that, especially in sales-driven models.

Sales Recruiting 291

Sales Recruiting Sales Hiring Startup Scale 291

SaaStr

OCTOBER 6, 2023

If you’re a seed-stage startup, Michael shares the best ways for you to present your company to startup investors. They collect the payment online and take a 15% fee for every booking. Every hotel room is fully booked. They could talk about how they were starving startup founders who couldn’t pay their rent.

Payment Methods 279

Payment Methods Startup Payment Solutions Sales Hiring 279

Tom Tunguz

SEPTEMBER 12, 2022

Selling to very profitable customers benefits a startup. Hermann Simon, the founder of renowned pricing experts Simon-Kucher partners, wrote this in his book Confessions of a Pricing Man. ” How healthy are the business’s underling customers? But so does the underlying health of the buyer.

Startup 246

Startup Market Segmentation Pricing Enterprise 246

Intercom, Inc.

JANUARY 12, 2021

Even thinking about implementing a multi-cloud architecture is prematurely optimizing for practically all businesses – especially startups – and not a trap you want to fall into. Day one of your startup is probably not the time to be learning Kubernetes. Containers vs. serverless host environments. Building for scale.

Technical Review 269

Technical Review Scale multi-cloud Kubernetes Scaling 269

Tom Tunguz

SEPTEMBER 23, 2022

Imagine a startup with 4 customers in the pipeline. If the ACV of the company is $25k, then the business should project $50k in bookings this period & $50k next period (assuming no additional pipeline materializes). So, bookings in the current month zero out. Bookings in the second month should be $25k.

Sales 355

Sales SaaS Startup Product Marketing 355

Tom Tunguz

SEPTEMBER 30, 2020

I’ve been steadily progressing through the excellent books in the Stripe Press catalog. It’s the best book I’ve read on engineering management. The book abstracts out the wisdom of those times into theory abstracted from experience, not just hypothetical ideas. First, I read High Growth Handbook.

Engineering 363

Engineering Software Review Systems Review Technical Review 363

Tom Tunguz

AUGUST 8, 2021

A common topic today in software startup board rooms is: should the company price by seat or by usage? It’s the canonical book on modern pricing. Pricing is one of the questions that persist through the evolution of a company. He has advised more than 20 unicorns including Uber, Asana, and Stripe.

Pricing 244

Pricing Startup Strategy Innovation 244

Tom Tunguz

FEBRUARY 26, 2020

If you’re looking for a primer on many of the responsibilities of being a startup CEO, read The Great CEO Within. Matt Mochary wrote the book. He founded a company which he sold to MCI and now coaches startup CEOs, amongst other philanthropic efforts. “The top goal framework will help you fix this.

Leadership 345

Leadership Startup Management 345

SaaStr

SEPTEMBER 29, 2023

This showcases a narrow segment of a niche market, and it’s missing a lot of startups. Any startup in any reasonable category likely has dozens of competitors, and Altman believes the best strategy to compete in 2023 and beyond is multi-product. Startups are no longer fringe. How can a startup compete with a big company?

Scale 290

Scale Scaling Startup Sales Hiring 290

SaaStr

JANUARY 28, 2025

The company realizes that the startup space is highly competitive in terms of speed, and therefore, they need to execute extremely fast. The most successful startups are those that resonate with customers and succeed in taking budget from existing solutions without being compared to them, as they offer something new and better.

AI Search 244

AI Search AI Artificial Intelligence Technical Review 244

SaaStr

AUGUST 12, 2020

So, the company starts getting divided up into functional areas, or silos, product management, sales, customers support, marketing and so on, and this siloing of the org chart I think means that not everyone knows what everyone else is doing, and there’s a general feeling of disorganization or chaos in most startups.

Startup 300

Startup Software Review Scale Systems Review 300

Tom Tunguz

DECEMBER 9, 2020

Linda’s professional journey has taken her across businesses of all sizes — from startups in hypergrowth mode to mature, multi-hundred million-dollar businesses. It was there that she felt inspired about the impact she could have on a startup, and from there she became a founding member at Tapjoy, and then, Nextbit. Creativity, Inc.:

Startup 259

Startup Management Systems Review Leadership 259

SaaStr

JULY 20, 2022

For whatever reason, the company is ready to exit startup status and prepare to scale-up. Dave Kellogg, Executive-In-Residence at Balderton Capital, breaks down the most common mistakes companies make when going from startup to scale-up. To get a startup off the ground, company operators thrive with those who can figure anything out.

Scale 261

Scale Technical Advisors Sales Hiring Technical Review 261

SaaStr

FEBRUARY 3, 2021

I.e., it’s fair to expect a ramp in just a few months to say $10k-$50k a month in bookings. But give her breathing room to get to a $400k-$500k quota. A related post here: The post One Tough (But Rewarding) Job: Being the First Sales Rep at a SaaS Startup appeared first on SaaStr. It’s not easy.

Sales Hiring 280

Sales Hiring Startup Sales SaaS 280

SaaStr

JANUARY 20, 2022

That's how much in bookings they plan to add this year. It still mostly works, and you can roughly tell how much revenue a “normal” startup has from its employee count. But its less precise than it used to be, with more startups highly funded, and others leaner due to PLG than before.

SMB 315

SMB Scale Startup Enterprise 315

Tom Tunguz

MARCH 27, 2025

As startups scale, effective sales implementation becomes the difference between stagnation and sustainable growth. After analyzing hundreds of sales organizations across startups, I’ve distilled the key pieces of advice that founders and leaders should keep in mind.

Scale 182

Scale Sales Hiring Startup Compensation 182

Tom Tunguz

AUGUST 30, 2020

Compare the slopes of marketing’s lead generation efforts to sales’ bookings trajectory. If the marketing slope is up and the bookings slope is up, the teams are aligned. This is the most common scenario in startups. How do you tell if your sales team and marketing team are working well together?

Marketing 357

Marketing Sales B2B Trends 357

SaaStr

JANUARY 2, 2024

David Sacks classic post on Burn Rate Multiple is A+ and a key metric for every venture-backed startup. But the best burn less each month than they bring in in new bookings and revenue (a Burn Multiple of 1x or less). It simplifies a lot of complexity into one metric. Well, at a practical level, it assumes the next round is coming.

Startup 337

Startup Metrics Revenue 337

SaaStr

JUNE 5, 2023

ChartMogul’s data, which we covered in another recent post here , shows data from 1000+ SaaS startups from $1m-$30m ARR in essentially real-time, as they are doing real-time revenue analytics. He found new bookings in Q1’23 were down about 33% on average from Q4’22: Yes, these are slightly different time frames, but the same basic trends.

Cloud 346

Cloud Startup Trends SaaS 346

Tom Tunguz

NOVEMBER 6, 2021

A startup closing only Contract As will be far more capital efficient than one capturing Contract Bs. For example, if a three-year contract is discounted the startup’s cost of capital for borrowing is simply the discount amortized over the contract period (eg, 10% over three years or 3.2%

Sales Hiring 352

Sales Hiring Scale Payments Payment Solutions 352

SaaStr

JULY 3, 2020

349: Startups can get messy. And, wouldn’t it be nice if somehow we could turn this s**t show into an army where instead of having this startup chaos, we could get the team working in lock step. Basically, it’s based on a few very simple insights, but very few startups are actually doing these things.

Software Review 270

Software Review Scale Systems Review Startup 270

Tom Tunguz

SEPTEMBER 2, 2022

During Bill Binch’s Office Hours , he predicted many more software startups would achieve 200% net dollar retention. Large NDR figures are hugely beneficial to startups. As a company scales, renewal revenue begins to dwarf the new bookings. In other words, the average customer’s spend would double each year.

Enterprise 351

Enterprise Startup Retention Engagement 351

Chart Mogul

JANUARY 9, 2025

Its often blended with a self-service model, like when a website prompts users to sign up for free or book a demo first. While there may still be options like Book a Demo or Contact Us for a Custom Quote on the website, this model typically involves proactively identifying and reaching out to potential customers.

Scale 52

Scale Sales Hiring Startup Sales Recruiting 52

Tom Tunguz

FEBRUARY 16, 2020

If my startup has a 9 months sales cycle and the VP of Sales projects a six month ramp time, my startup is committing this error. How should one expect a new account executive to start delivering bookings in their first quarter if the typical sales cycle is longer than the ramp period? What does this mean?

Scale 297

Scale Forecasting Sales Interviewing 297

SaaStr

SEPTEMBER 26, 2024

So if you’ve been around startups for a while, and especially sat on any boards, you’ll see a VP of Sales answer a slow Q1 and even Q2 with this: “We’ll make up for it in Q4.” In fact, in so many sales plans, you often see Q4 bookings at 2x-3x or more Q1! ” And many variations thereof.

Sales 312

Sales Startup SaaS Revenue 312

Tom Tunguz

MARCH 5, 2020

I was on a panel yesterday to speak about the impacts of the coronavirus on financial markets and startups. Startup Growth Rates. For startups, things will likely slow down. At least, that’s my key metric for startup health over the next few months. Bookings will be more volatile than in the past as a result.

Sales Hiring 340

Sales Hiring Construction Travel Startup 340

Tom Tunguz

DECEMBER 13, 2022

A funny thing happened along the way to Sand Hill Road in the last decade : startups stopped talking about how much runway a Series A would buy them. In 2010, the median software Series A startup raised $3.2m & employed 15 people at about $150k average cost. Capital scarcity curtails startup operation. Median Employees at A.

Headcount 325

Headcount Venture Capital Finance Startup 325

Tom Tunguz

JANUARY 22, 2023

In the last three years, B2C startups’ ratio of layoffs have dwarfed B2B layoffs. The main challenges facing B2B startups today are decreases in seat counts as their customers downsize & slower sales cycles which creates volatility in bookings , which has caused more layoffs than an anytime in the last four years.

B2C 321

B2C B2B Headcount Business Model 321

User Pilot

MAY 30, 2024

Eric Ries is a name synonymous with innovation and startup success. As an entrepreneur, author, and advisor, Eric has transformed the way businesses approach building products and launching startups with his Lean Startup methodology. Eric Ries is an entrepreneur, author, advisor, and the creator of the Lean Startup methodology.

Innovation 105

Innovation Startup Government Software Engineering 105

Tom Tunguz

MAY 30, 2019

Imagine a hypothetical startup with 10 account executives that is growing quickly. This startup has two AEs that outperform meaningfully, six that are at typical quota attainment, and two that are underperforming. in bookings on 10M in quota capacity (which is really good). in bookings. They generated 8.6M Nice result.

Scale 253

Scale Scaling Sales Sales Enablement 253

Tom Tunguz

FEBRUARY 18, 2022

This hypothetical startup amassed 2.3x If the sales cycle lasts 45 days, the startup has time to move Stage 2 opportunities to Stage 6 before quarter end. The startup starts the quarter with 70% of the target bookings in late-stage conversations. Pipeline is the total value of the accounts within a stage or later.

Scale 331

Scale Sales Forecasting Outsourced Development 331