Tom Tunguz

DECEMBER 31, 2022

. % of Revenue spent on Software. Implied Web3 Software TAM, $M. Implied Web3 Software TAM (excluding Ethereum), $M. The average software company operates at about 70% gross margin, so let’s assume a web3 company is similar. At a 10x revenue multiple, web3 software should support about $0.75b to $2.3b

Payment Solutions 351

Payment Solutions B2B Software Payment Services 351

Tom Tunguz

JUNE 1, 2024

Last week, public software markets suffered significant compression. Future revenue ramps have been the dominant driver of software valuations for the vast majority of the last decade. Some context is helpful : during the same period, total software revenue across the public companies grew from $124b to $592b.

Software 316

Software Marketing Revenue Business 316

Clouded Judgement

FEBRUARY 14, 2025

Every week I’ll provide updates on the latest trends in cloud software companies. Will the macro turn in favor of software buyers? We’ll see how the rest of software earnings shake out - but so far I’d categorize the guides / outlooks for the year as “meh” at best. Follow along to stay up to date!

Cloud 144

Cloud Software Subscription Payment Features 144

SaaStr

OCTOBER 25, 2024

For the subsequent ten years in software, we’ve optimized every little bit of how we sell it. But today, it’s different because the kinds of software we sell aren’t the same. Six months ago, security was the number one prohibition preventing businesses and software companies from buying AI. It isn’t predictable.

Venture Capital 333

Venture Capital Marketing AI SaaS 333

Payrix

FEBRUARY 4, 2025

Interested in learning more about software-led payments or joining the current Embedded Payments conversations in your organization? Card acceptor business code A four-digit numerical representation of the type of business in which the card acceptor (merchant) engages. Youve come to the right place.

Payment Services 147

Payment Services Merchant Services Payment Solutions Payment Methods 147

Tom Tunguz

SEPTEMBER 10, 2024

The new software GTM playbook has yet to be written. But the companies who figure it out will become the next wave of massive businesses. Figuring out how to consistently produce wow moments with non-deterministic software is essential. Ultimately, pricing captures 15-30% of the value the software/AI creates.

Software 304

Software Sales Hiring Customer Lifetime Value Scale 304

Payrix

NOVEMBER 19, 2024

In the latest episode of PayFAQ: The Embedded Payments Podcast, Ian Hillis speaks with Brad Pinneke , VP of Business Development at Payrix and Worldpay for Platforms, about one of the most important decisions software companies face today: choosing the right payments partner. How do those goals align with potential payments partners?

Payments 130

Payments Embedded Payments Payment Solutions Payment Services 130

Payrix

NOVEMBER 13, 2024

At Payrix from Worldpay, we see the potential in empowering software platforms to deliver valuable financial products seamlessly within their user experience. Meet some of our experts driving this shift for our software partners and see how Embedded Finance can enhance your platform’s revenue, customer loyalty, and growth potential.

Payments 130

Payments Finance Payment Solutions SaaS Payments 130

Tom Tunguz

JANUARY 28, 2024

The fastest growing software category in the public markets is security. These two software categories lead buyers’ priorities & are expected to grow at twice the pace of the overall software market. For now, software buyers view security & data products as highest priority. Data follows.

Software Review 321

Software Review Software Finance Acquisition 321

Tom Tunguz

AUGUST 9, 2022

In 2020, revenue growth was the most important factor explaining a public software company’s forward multiple. Net income has surged to the highest correlate of a public software company’s multiple surpassing revenue growth. The model’s predictive ability frays the earlier the business.

Software 364

Software Revenue Metrics Sales 364

Payrix

JANUARY 10, 2025

Ian Hillis welcomes David Blair, Senior Director of Product Management at Worldpay for Platforms, on PayFAQ: The Embedded Payments podcast to explore the critical roles of merchant underwriting and onboarding for software providers. Check out this helpful blog: The essential elements of merchant underwriting for software companies.

Merchant Services 130

Merchant Services Payment Services Payment Solutions Payments 130

Tom Tunguz

FEBRUARY 26, 2025

For many founding teams, pricing is one of the most difficult and complex decisions for the business. Many mid-market software companies price with the goal of revenue maximization, negotiating for the highest possible price in each sale. The value of your business is the discounted sum of all its future profits.

SaaS Payments 283

SaaS Payments Pricing Strategy Scale 283

Kellblog

NOVEMBER 7, 2024

Increasingly, you’ll hear the term “business outcomes” popping up in software marketing. While I initially loathed the phrase for its vagueness, over time I’ve come to believe that, much like the frequently abused word “ solutions ,” there is a right and a wrong way to use “business outcomes.” It’s not great.

Marketing 140

Marketing Business Finance Sales Hiring 140

User Pilot

OCTOBER 19, 2024

Think of Net Promoter Score (NPS) software as a tool to measure your customers’ feelings about your product, and categorize them based on their level of loyalty (promoters, neutrals, and detractors). A 14-day free trial is available for businesses to test the platform before committing.

Software Review 105

Software Review Technical Review Software B2C 105

Payrix

JANUARY 28, 2025

In this episode of PayFAQ: The Embedded Payments Podcast, host Ian Hillis welcomes Matt Downs, President of Worldpay for Platforms, to discuss software-led payments predictions for 2025 and beyond. remains the largest interchange and software market, Matt predicts a loosening of regulatory constraints.

Payments 130

Payments Payment Solutions Merchant Services Payment Methods 130

Tom Tunguz

NOVEMBER 12, 2023

Recently, I was on the HR Heretics podcast and we talked about the increasing efficiency of software companies (in addition to other topics including the implications of AI for executives, how to diligence a candidate, & what board members expect of their people leaders). Compare that to the benchmarks in 2013!

Software Review 331

Software Review Trends Revenue Software 331

Clouded Judgement

JUNE 19, 2024

Q1 earnings season for cloud businesses is now behind us. My hope is that this analysis can provide startup entrepreneurs with a framework for how to manage their businesses around SaaS metrics (e.g., Q1 was a very weak quarter of software earnings. net retention and CAC payback). Subscribe now What Happened in Q1?

Cloud 318

Cloud GCP(Google Cloud Platform) Software Azure 318

Clouded Judgement

AUGUST 16, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now The Great Services-To-Software Rotation There's a lot of debate right now about the economic impact of GenAI. They contend that AI agents, capable of handling infinite workloads, will ultimately reduce the need for software spend.

Outsourcing Services 274

Outsourcing Services Cloud Software Outsourced Development 274

USIO

MAY 16, 2024

Here are some of the most FAQs software companies ask Usio about integrated payments, along with comprehensive answers to help you navigate this critical aspect of your business. Integrated payments refer to the seamless incorporation of payment processing capabilities directly within a software application.

Payment Services 263

Payment Services Payments Merchant Services Payment Solutions 263

Payrix

FEBRUARY 4, 2025

What is an integrated software vendor? An integrated software vendor more commonly known as an ISV is a software company that engages in a partnership with a payments provider in order to integrate payment processing capabilities into their platform. 3 things you should know about integrated software vendors 1.

Payments 130

Payments Payment Services Payment Solutions PayFac as a Service 130

SaaStr

NOVEMBER 27, 2024

Its product provides software to spas and salons but it’s not new (the first salon software came out in the 80s), and neither is a lot of the vertical software getting hot today. Consumers now also expect to talk to businesses through digital means. For Mangomint customers, this software is their operating system.

SaaS Payments 259

SaaS Payments Payments Payment Solutions Payment Services 259

SaaStr

OCTOBER 23, 2024

In 2006, BILL CEO and Founder René Lacerte set out to define a category around financial operations for small and midsize businesses (SMBs). ’ Bill is approaching half a million customers, so has a good pulse on small businesses. With SMBs, the smallest business is owner-operated. Needless to say, he succeeded. in revenue.

SMB 310

SMB Payment Services Payments Payment Methods 310

SaaStr

JANUARY 11, 2025

"Software engineers working in AI earned 48% more than the average software engineer at the company, according to a payroll spreadsheet shared with BI." No start-up can compete with OpenAIs massive comp and annual tender offers to provide partial liquidity. But it has created a two-tiered comp system for engineers.

Engineering 287

Engineering AI New CTO CTO 287

Tom Tunguz

NOVEMBER 5, 2023

Six quarters ago, profitability became the most important factor to public software valuations. 14 public software companies have reported earnings in this quarter so far. There’s no correlation between the Earnings Surprise & the revenue multiple for any of these businesses. ” The quirky thing about the market?

Software 317

Software Management Revenue Marketing 317

SaaStr

JUNE 2, 2023

Dear SaaStr: Does Bootstrapping Through an Agency/Services Business Work? Running two businesses at once well is really, really hard. More on that with CEO Ben Chestnut here: The challenges include obvious ones such as relative scale and resource contention: Do you kill the services business once the software business takes off?

Business 304

Business Investment Software Scaling 304

SaaStr

OCTOBER 25, 2024

Up to 20% of the ACV is usually OK and you will still be seen as a software business, not a services business. But some do make services profitable, for sure. Net net, in bigger deals ($50k-$100k+), charge for services if you can. That’s usually good enough. More here: Doing 5, 6 or 7 Figure Deals?

Investment 301

Investment SaaS SMB Enterprise 301

USIO

FEBRUARY 7, 2025

APIs (Application Programming Interfaces) are at the heart of this transformation, enabling businesses to create customized payment workflows that meet the unique demands of their operations. API-driven payment systems reduce processing times by up to 40%, improving cash flow management for businesses of all sizes.

Payment Solutions 130

Payment Solutions Payment Services Payments Payment Methods 130

SaaStr

SEPTEMBER 8, 2024

Ryan’s previous company, ImportGenius , was the largest provider of business intelligence to the import-export industry, which gave them access to an extremely valuable list of customers, trade data, and understanding of the international trade market. Measure customer NPS early and make it a key KPI for the business.

Sales Recruiting 324

Sales Recruiting Scale Venture Capital Sales Hiring 324

Stax

MARCH 16, 2025

The average churn rate for the software industry as a whole is 14%. As a SaaS business leader, reducing software user churn is an important part of maintaining your customer base and increasing revenue. TL;DR The average software industry churn rate is 14%, but SaaS companies should aim for under 2%. Contact sales 2.

Payment Solutions 88

Payment Solutions Software Review Churn SaaS Payments 88

Tom Tunguz

APRIL 9, 2025

Pricing is one of the most complex topics in software. It is a company-wide evolution that has the potential to completely reshape your entire business & your customer relationships. Changing pricing is never simple. Few have executed this transition better than Barr Moses , Co-Founder & CEO of Monte Carlo.

Revenue 130

Revenue Business Pricing Engineering 130