Tom Tunguz

FEBRUARY 6, 2022

If I gave you $10,000 to invest in one company today among the following four software businesses, which would you pick? The first company is a $100m ARR business growing at 100%, trading at 50x ARR, a $5b enterprise value. Which investment will generate the greatest return? Growth Rate. Multiple (ARR/EV).

Investment 252

Investment Pricing Business Model Enterprise 252

Casey Accidental

OCTOBER 20, 2020

This is part two of a three part series on sequencing business models. Casey’s first sequencing business models essay talked about the transition from a SaaS business model to marketplace business model, and why it’s so difficult. This essay is a collaboration with Gilad Horev. We’re not sure.

Marketplace as a Service 141

Marketplace as a Service Business Model SaaS Payments Payments 141

SaaStr

FEBRUARY 2, 2025

Their platform helps restaurant owners, who typically earn less than $50,000 annually in profit, create professional online presences without significant investment in time or resources. Restaurant Industry Solutions Owner.com has developed an AI website generator that implements industry best practices automatically.

AI 217

AI Technical Review Artificial Intelligence Systems Review 217

SaaStr

OCTOBER 23, 2024

’ Bill is approaching half a million customers, so has a good pulse on small businesses. ” Investing for growth has been pretty flat year over year for SMBs, which means there is money there, but they’re holding onto it. From day one, they considered having a viable business model, so they didn’t wait to build it.

SMB 300

SMB Payment Services Payments Payment Methods 300

SaaStr

MARCH 18, 2025

Joselyn Goldfein , Managing Director at Zeta Venture Partners, which invests in AI and data infrastructure-focused startups from inception through seed stage And see everyone at 2025 SaaStr Annual, May 13-15 in SF Bay!! The bar has risen significantly from the “growth at all costs” mindset of 2021-2022.

Technical Review 184

Technical Review Artificial Intelligence AI Marketplace as a Service 184

SaaStr

JANUARY 12, 2021

Because the (maybe semi-sad) thing for VCs is, only Unicorns make the business model work : Say you have a $200m VC fund (not that large, but basically our current fund, as an example). You get to make about 30 or so investments from that fund. So those 30 investments have to return $800m.

Venture Capital 363

Venture Capital Acquisition Business Model Investment 363

Tom Tunguz

AUGUST 26, 2020

Today, the company is a massively successful SaaS business and another example of the flywheel business model that creates demand at the individual user and leverages that interest to sell department and company-wide contracts. Asana invests 10% more of its revenue in S&M, which is consistent with its higher growth rate.

Payment Solutions 363

Payment Solutions Payments Outsourced Development Payment Services 363

SaaStr

APRIL 19, 2024

He’s invested in startups as a VC since 2013 and has 10x his fund. You Need A Business Model with Economies of Scale As you’re trying to reverse engineer whether your business model makes sense, you have to look at your business model. Certain business models have economies of scale, and some don’t.

Engineering 293

Engineering Business Model Pricing Scaling 293

Clouded Judgement

JUNE 14, 2024

If AI delivers on its promise, it may spell the end of the SaaS business model as we know it. Historically, cloud software businesses charged a recurring fee based on the number of users of their software - the SaaS model. Most of my venture career has been spent investing in data businesses.

Cloud 343

Cloud Pricing AI Software 343

SaaStr

JULY 8, 2020

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. You have two partners and one or two other investing?

Investment 204

Investment Technical Review Part-Time VPE Development Team Review 204

SaaStr

MARCH 24, 2025

This means investing heavily in R&D and hiring top-tier talent to make your AI capabilities truly world-class. If youre not thinking about how to integrate AI into your product and business model and make it truly 10x better, youre already behind. Its not enough to be goodyou have to be exceptional. #8. And how they think.

AI 147

AI Trends SaaS AWS 147

SaaStr

JULY 4, 2024

What’s wrong with our business model? And if you are growing say 60% at $10m ARR, that’s another $4m-$5m net of expenses you can invest. Dear SaaStr: We Are Growing Too Fast to Handle the Workload, but We Can’t Afford to Hire New Employees. We’ve all been there. Almost all of us, at least.

Business Model 291

Business Model Engineering Scaling Branding 291

SaaStr

MAY 25, 2022

No one built a business solely on metrics like TAT, LTV, etc., Investors will invest in your business if: You have a strong brand. The Sword: a product-led growth business. Every successful business you admire—Google, Facebook, Microsoft, Apple, et al.—was was built on a solid, profitable business model.

Scale 300

Scale Marketplace as a Service Advertising Business Model 300

Andreessen Horowitz

MARCH 26, 2024

We were hearing soundbites reflecting the true potential of process automation that actually works: business owners changing assumptions on their business models. As one customer put it, “We are salivating at the opportunities for what this means for our business.”

Investment 130

Investment Healthcare AI Business Model 130

SaaStr

DECEMBER 29, 2021

An open core business model empowers customers and fosters brand loyalty. At GitLab, we run on an open core business model. We have a dollar-based gross retention rate of 97% and it’s in part because of our open core model. Clearly and publicly state your business practices. Key takeaways.

Innovation 246

Innovation Business Model Banking Scale 246

SaaStr

FEBRUARY 20, 2023

Underrated: How great of a business model SaaS is. If your NRR is over 100%, that’s a kind of magic if you invest in it. You can literally do almost nothing but make your customers happy and usually you will still grow. Underestimated: Just how expensive the incremental customer gets beyond your core, highest velocity ICP.

Acquisition 339

Acquisition Startup Business Model SaaS 339

SaaStr

NOVEMBER 7, 2022

Not having a scalable business model. Raising capital demands an investment of time, energy, and resources. Investors are giving out money, but you need to prove that your idea is a sustainable and worthy investment. The easiest way to finance a new business is to invest your personal savings, which comes with risks.

Finance 255

Finance Business Model Investment Leadership 255

SaaStr

JUNE 5, 2020

Salesforce’s IPO is also seen as a test of a new business model that could shake up the software industry. The company is the poster child for subscription-based software, a model that’s gaining popularity among corporate buyers. As a result, founders with healthy SaaS businesses are hearing “no” more often.

Venture Capital 293

Venture Capital Technical Review SaaS Scale 293

SaaStr

AUGUST 26, 2024

Plus, three of the closing sessions will be open to the broader audience of Annual this year: Customer Success in Different Business Models with Slack, Mulesoft, and OpenAI : In this session , these three CS leaders will discuss how customer success strategies differ across various business models.

Benchmarks 286

Benchmarks Finance Business Model Forecasting 286

SaaStr

DECEMBER 28, 2023

What’s your most recent disclosed investment? What’s your sweet spot for investing — check size, stage, type of deal? We invest across all stages — seed, early venture, and growth, with a primary focus on early-stage. Some of our most notable investments include Figma, Datadog, Discord, Adyen and Roblox.

Technical Review 273

Technical Review Software Review Payment Solutions Venture Capital 273

SaaStr

FEBRUARY 23, 2021

Or for companies that are investing huge amounts in sales & marketing after raising $30m, $50m, $100m+ But they probably won’t work for you until you are Bigger. Or for companies that are investing huge amounts in sales & marketing after raising $30m, $50m, $100m+ But they probably won’t work for you until you are Bigger.

Sales Hiring 321

Sales Hiring Scale Sales Business Model 321

SaaStr

MARCH 7, 2024

What’s your most recent disclosed investment? What’s your sweet spot for investing — check size, stage, type of deal? For over two decades, Creandum has specialized in early-stage investing, Seed and Series A. Some of our most notable investments include Spotify, Klarna, Bolt, Neo4j, Pleo or Factorial.

Payments 272

Payments Payment Services Payment Solutions Scale 272

SaaStr

AUGUST 10, 2022

This is the secret sauce to Atlassian’s business model. Atlassian turns around and invests some of that savings in engineering and product. And come join Atlassian’s CRO LIVE at 2022 SaaStr Annual on Sep 13-15 sharing how they scale their unique business model! This is about as low as it gets in SaaS.

Scale 277

Scale Headcount Cloud Forecasting 277

SaaStr

MAY 4, 2021

You change / make up a new valuation based on how much the VC wants to invest. Don’t change the price, at least not explicitly, based on a VC saying they’d invest $Xm or $Xk. “Oh Oh if you want to invest $2m, then the price is $20m. Don’t bring up anecdotes about every company a VC has invested in. Don’t do that.

Venture Capital 285

Venture Capital Investment Pricing Business Model 285

SaaStr

AUGUST 8, 2023

Strategic finance can be thought of as a project management function for your company’s underlying business model or a BizOps team that operates within a more financial lens. Strategic Finance optimizes a company’s underlying business model to create long-term value by increasing revenue and decreasing costs.

Scale 239

Scale Finance Outsourcing Services Sales Recruiting 239

SaaStr

JULY 5, 2023

I like this chart a lot showing both the awesome power of high NRR, and also how you have to invest in customers that scale with you over time. And here you can see the magic in Mongo’s business model. Go long, invest long. Despite having a partial PLG motion and very high NRR, Mongo has invested in growth.

Scale 242

Scale cloud efficiency Cloud Business Model 242

SaaStr

MARCH 30, 2024

It’s one thing to invest in an area where only 5% of your business is today. Bad operational model / misunderstanding the burn rate. Often, you can sort of intuit the business model up to $1m or $2m or so in ARR. Leave the pipedreams for $100m in ARR. Or at least, maybe $10m-$20m ARR. And stymie all of them.

Scaling 294

Scaling Revenue Underperforming Technical Team Market Segmentation 294

Tom Tunguz

JUNE 26, 2022

Their business models differ meaningfully. We need standardized reporting for tokens and equivalent shareholder rights to compare equities to tokens: an essential step to enticing more investment in web3. Coinbase and Uniswap generate billions in revenue. Coinbase’s trailing revenue in Q1 2022 approached $7.5b

Benchmarks 299

Benchmarks Headcount Government Business Model 299

SaaStr

OCTOBER 11, 2024

Historically, the business model has been to sell radio ads, and the people running the ads are typically local businesses. The problem is that when a BDR called these businesses, the person on the other end didn’t have the budget or know-how to create an effective ad.

Cloud 161

Cloud AI Artificial Intelligence Healthcare 161

SaaStr

JANUARY 4, 2024

What’s your most recent disclosed investment? What’s your sweet spot for investing — check size, stage, type of deal? Typically, these companies range from seed stage to Series B, though most of my investments in 2023 were Series A investments. What’s different about your fund / how you invest and support founders?

Management 268

Management CTO Hire New CTO CTO 268

Tom Tunguz

FEBRUARY 5, 2023

The richer the balance sheet & the more solid the business model, the greater the growth rate & ability to win market share. 1] Assumptions: $1m in starting ARR; $25k ACV with a $50k CAC; 30% of ARR + Net Burn invested in Sales & Marketing ; 120% NDR ; constant sales efficiency. % NDR ; constant sales efficiency. [2]

Sales Hiring 268

Sales Hiring Startup Business Model Strategy 268

Tom Tunguz

NOVEMBER 8, 2022

Three Arrows borrowed against their crypto holdings to invest in Luna & defaulted on their loans when Luna crashed in value. In short, technology advances have an installation phase when frenzy for an innovation drives speculative investment, with periods punctuated by rapture & collapse. of assets from projects year-to-date.

Technical Review 250

Technical Review Innovation Technology Business Model 250

SaaStr

FEBRUARY 27, 2023

They credit this growth to their global team, a switch to an enterprise business model switch, and flexible work operations. Moving from self-service to enterprise As your product improves, your user demands change, requiring a revamp of the business model to satisfy high-paying customers. Self-service.

Scale 245

Scale Sales Hiring Sales Recruiting Scaling 245

SaaStr

MAY 1, 2021

Zhao says, “Our business model is B2B SaaS, but our sales motion is similar to a consumer-like company…there’s a lot of B2C elements to it.”. But in order for us to pull off this motion, we have to have a strong consumer brand, not just a business brand.” A Different Way to Approach Enterprise Leads .

Enterprise 308

Enterprise Scale B2C SaaS 308

Andreessen Horowitz

MARCH 11, 2024

Over the last decade, we’ve seen record growth in player demand driven by several tailwinds, including: the rise of mobile and emerging markets, new business models like free-to-play and subscriptions, transmedia storytelling, and much more. The games industry has a cost problem.

Outsourcing Services 93

Outsourcing Services Investment Outsourced Development Marketplace as a Service 93

SaaStr

MAY 6, 2021

If you’re a company that has a 100% sales-driven business model, it makes sense to hire a big-deal revenue person. Just note, you’ll need a strong balance sheet and stable investments — it takes money to make money. Market: products that aligned with her experience but that she was emotionally invested in and excited about.

Sales Hiring 293

Sales Hiring Sales Recruiting Interviewing Revenue 293

SaaStr

NOVEMBER 15, 2022

This flexible mindset creates just the right conditions for embracing evolving business models and new metrics. A general understanding of the SaaS business model grew as the SaaS sector matured. as a common language to analyze a cloud business.

Metrics 267

Metrics Machine Learning Artificial Intelligence Technical Review 267