Chaotic Flow

APRIL 22, 2014

Over the past few years, the SaaS community has gained a solid understanding of SaaS financial metrics, as well as many of the operational principles required to achieve them. However, there has always been an obvious gap between what happens on the top line and what happens on the ground. It’s one thing to claim that a 50% reduction in churn will result in a 2X increase in recurring revenue, but it’s quite another thing to make it happen.

Customer Success 138

Customer Success Metrics SaaS Churn 138

Practical Advice on SaaS marketing

APRIL 14, 2014

"Eighty percent of success is showing up." — Woody Allen. For most companies, buying a software-as-a-service (SaaS) solution to address a critical business need isn't a decision they take lightly. Evaluating a solution to support HR, CRM, finance, marketing, or any other important part of the business takes a good amount of deliberation. It could involve a demo or a trial.

SaaS 113

SaaS Acquisition Benchmarks Finance 113

Tom Tunguz

APRIL 30, 2014

What a difference three weeks make! Since I wrote “ The Correction in SaaS Company Valuations ”, SaaS company valuations have continued to fall. As a basket, SaaS companies have fallen 33% from their highs (median), wiping all the gains for the last year. To make that point more explicit, below I’ve charted the total value of public SaaS companies over the last ten months.

Marketing 100

Marketing SaaS Pricing Enterprise 100

CloseSaaS

APRIL 28, 2014

I was talking to a good friend of mine who founded a very successful SaaS (Software as a Service) startup a few years ago and is currently considering a major new direction in their product.

Startup 52

Startup Software SaaS Sales 52

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Payment Solutions

Aber Law Firm

APRIL 15, 2014

What to Know About the ‘Combination Exception’ to Infringement Indemnities. As a software licensing attorney I run into the issue of infringement indemnities all the time. These risk shifting contractual clauses can be very confusing for clients, so I thought I would explain (with a real live case and a graphic) what is called the ‘combination claim exception.’ Contractual indemnities are in essence insurance policies , and the customer is asking for insurance if your software

Software Review 52

Software Review Technical Review Compensation Software 52

Tom Tunguz

APRIL 28, 2014

Since 2008, there has been a secular trend to increase cash compensation and decrease equity to startup management teams. Tho two tables below tell the story for VPs of Engineering (VPE) and VPs of Product (VPP) across the US broadly and in the SF Bay Area. VPE US SF. Cash +10% +16%. Equity -19% -17%. VPP US SF. Cash +26% +8%. Equity -31% -25%. In the past 5 years, VPEs have benefitted from a 10 to 16% increase in their cash compensation, but have seen their equity grants fall by 17-19%.

Compensation 100

Compensation Part-Time VPE Trends Startup 100

Tom Tunguz

APRIL 27, 2014

The chart above compares the contribution of two hypothetical inside sales people with $400,000 quotas to an early-stage startup’s finances. In this case, contribution is the 18 month revenue of sold customers tallied cumulatively minus the salary costs of $100k annualized of the sales person. I’ve modeled a six month linear ramp for the sales person to reach 100% of quota.

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Sales Hiring Sales Recruiting Customer Lifetime Value Company Culture 100

Tom Tunguz

APRIL 22, 2014

One of the key metrics that I don’t think gets enough notice when reviewing the health of a SaaS business is revenue-at-risk or RaR. For SaaS businesses with quarterly or annual contracts, each month some subset of the customer base’s contracts must be renewed. The RaR is the sum of the revenue from these customers in a given month or quarter.

Revenue 100

Revenue Startup SaaS Scale 100

Tom Tunguz

APRIL 20, 2014

Pricing is one of the hardest things for startups to get right because there is no universal and constant price optimum. As a SaaS startup’s product evolves and offers more features, the product’s price points should increase. As a sales team or marketing team engages different customer segments, price points may vary wildly. The contract for a F500 should have very different pricing than a startup , because of the stark contrast in the different companies’ willingness to pay a

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Pricing Startup Customer Lifetime Value Outsourced Development 100

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ClinicSense is a SaaS platform that supports over 7,000 massage therapists who use it for appointment management, payments, scheduling, marketing activities and more. Despite having a relatively low payment failure rate, the company discovered that the failures disrupted the customer experience. This often led to churn as customers decided to cancel or abandon their account, preventing ClinicSense from realizing the full lifetime value (LTV) of its users.

Payments

Tom Tunguz

APRIL 16, 2014

Tien Tzuo, the founder and CEO of Zuora* and former CSO/CMO at Salesforce, knows SaaS businesses better than most. So when he pens an opinion about the subscription economy, a term which I believe he coined, I read it with great interest. Yesterday, Tien wrote “These Numbers Show That Box CEO Aaron Levie Is A Genius” , explaining Box’s business and growth in great detail.

Communication 100

Communication Business SaaS Forecasting 100

Tom Tunguz

APRIL 15, 2014

When the meeting first appeared on my calendar, I incredulous at the idea of a management coach. “A business shrink who would sap another hour from my frenetic day,” I thought. I was a few months into being a product manager at Google and stressed because I was in over my head. Most difficult of all, I lacked any type of formal authority.

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Consulting Engineering Technology Investment 100

Tom Tunguz

APRIL 14, 2014

Last week, we proved SaaS startups are raising more than they have in the past and newer SaaS companies seem to be generating more revenue per dollar invested. But do newer SaaS companies actually spend less on sales and engineering than their older counterparts? In fact, the 2014 cohort of public SaaS companies spend more on sales & marketing and engineering than previous IPO cohorts.

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Engineering Investment Sales SaaS 100

Tom Tunguz

APRIL 8, 2014

If you visit Yahoo Finance today, type in the ticker of every SaaS stock, copy and paste the image into a document, you might create a chart that looks like the one above. A cursory glance at the plunging lines in most of these names might send you into a panic, only to tweet in alarm that the bottom is falling out of the SaaS market. Chicken little.

SaaS 100

SaaS Finance Trends Enterprise 100

Speaker: David Warren and Kevin O’Neill Stoll

Transitioning to a usage-based business model offers powerful growth opportunities but comes with unique challenges. How do you validate strategies, reduce risks, and ensure alignment with customer value? Join us for a deep dive into designing effective pilots that test the waters and drive success in usage-based revenue. Discover how to develop a pilot that captures real customer feedback, aligns internal teams with usage metrics, and rethinks sales incentives to prioritize lasting customer eng

Revenue

Tom Tunguz

APRIL 7, 2014

I’ve been following Casey Johnston’s journey on Ars Technica to switch keyboard layouts from the ubiquitous Qwerty layout to the Dvorak layout with great interest and empathy. ( part 1 and part2 ). About six years ago, I went through the same process to learn Dvorak. It took me five tries to succeed. Judging by the volume and passion of the comments in that series, keyboard layouts are a topic many people are pretty passionate about.

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Venture Capital Mobile Software 100

Tom Tunguz

APRIL 3, 2014

Last week, we analyzed the fund raising history of billion dollar SaaS companies and determined SaaS startups are raising nearly twice as much capital as 16 years ago before going public. Given that trend, I wondered if there is there any truth to the idea that startups today require less capital than before to succeed. To answer that question, I’ve taken the same basket of public SaaS companies and computed a revenue-on-invested-capital (ROIC) across the four 4-year IPO cohorts from 1998-

Startup 100

Startup Trends Investment Cloud 100

Tom Tunguz

APRIL 2, 2014

One of the cloud’s great promise has been cost-reduction and for a while, we’ve chanted a mantra that startups require less capital than before to get started and ultimately succeed. As the number of publicly traded SaaS companies has grown with time, it’s possible today to examine whether those statements are proven in the data, at least for those 41 publicly traded companies.

Finance 100

Finance Trends SaaS Cloud 100

CloseSaaS

APRIL 21, 2014

Entrepreneurs often struggle when they start doing cold calls. They hate calling others to drum up business and they're not good at it either. Their approach is too timid and they give up too soon when they encounter resistance. They don't manage objections well.

Management 52

Management Business 52

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Enterprise

Aber Law Firm

APRIL 15, 2014

What to Know About the ‘Combination Exception’ to Infringement Indemnities. As a software licensing attorney I run into the issue of infringement indemnities all the time. These risk shifting contractual clauses can be very confusing for clients, so I thought I would explain (with a real live case and a graphic) what is called the ‘combination claim exception.’ Contractual indemnities are in essence insurance policies , and the customer is asking for insurance if your software

Software Review 52

Software Review Technical Review Compensation Software 52

CloseSaaS

APRIL 10, 2014

If you've ever tried to print a page from the web version of Close you've undoubtedly run into issues. Today we added a print stylesheet so that printing anything from Close – such as a list of your Opportunities or a list of Leads – just got a lot better.

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CloseSaaS

APRIL 9, 2014

I recently spoke at Alchemist Accelerator (video of the talk coming soon). Afterwards, a founder approached me with a specific challenge: they had a highly technical product and no customers yet.

Enterprise 52

Enterprise Sales Startup 52

Aber Law Firm

APRIL 4, 2014

What to remember about Saas Reseller Agreement and SaaS OEM Agreement Models! There are essentially 3 different SaaS channel models: referral, reseller and OEM, which are documented in a referral agreement, SaaS reseller agreement and SaaS oem agreement. I discuss these three reseller models a lot with clients, so I thought this topic deserved a brief outline of the differences between the models (here is another post on the types of SaaS reseller agreement models ).

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SaaS Payments Payment Solutions Payment Services SaaS 52

Speaker: Jay Allardyce, Deepak Vittal, and Terrence Sheflin

As we look ahead to 2025, business intelligence and data analytics are set to play pivotal roles in shaping success. Organizations are already starting to face a host of transformative trends as the year comes to a close, including the integration of AI in data analytics, an increased emphasis on real-time data insights, and the growing importance of user experience in BI solutions.

Trends

Aber Law Firm

APRIL 4, 2014

. What to remember about Saas Reseller Agreement and SaaS OEM Agreement Models! There are essentially 3 different SaaS channel models: referral, reseller and OEM, which are documented in a referral agreement, SaaS reseller agreement and SaaS oem agreement. I discuss these three reseller models a lot with clients, so I thought this topic deserved a brief outline of the differences between the models (here is another post on the types of SaaS reseller agreement models ).

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SaaS Payments Payment Solutions Payment Services SaaS 52

CloseSaaS

APRIL 2, 2014

If your startup is selling to the enterprise, always make sure to identify and understand all the stakeholders involved in the deal.As a founder of a technology company, you might find yourself faced with a new challenge: breaking into enterprise sales.

Enterprise 52

Enterprise Sales Startup Technology 52

CloseSaaS

APRIL 1, 2014

We're happy to announce that we've launched a new version of the Opportunities page in Close. This page—now with a better layout and filters—is designed to help you see which deals are in your current pipeline, as well as report on past won/lost deals.

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CloseSaaS

APRIL 13, 2014

“Do you know the best thing about startups?” - “What?” - “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.

Startup 52

Startup Sales 52

Speaker: Christophe Louvion, Chief Product & Technology Officer of NRC Health and Tony Karrer, CTO at Aggregage

Christophe Louvion, Chief Product & Technology Officer of NRC Health, is here to take us through how he guided his company's recent experience of getting from concept to launch and sales of products within 90 days. In this exclusive webinar, Christophe will cover key aspects of his journey, including: LLM Development & Quick Wins 🤖 Understand how LLMs differ from traditional software, identifying opportunities for rapid development and deployment.

Artificial Intelligence

CloseSaaS

APRIL 5, 2014

In the spirit of being as open as possible and giving you complete freedom over your own data, we improved the exporting capabilities of Close.

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Data 52

Aber Law Firm

APRIL 15, 2014

What to Know About the ‘Combination Exception’ to Infringement Indemnities. As a software licensing attorney I run into the issue of infringement indemnities all the time. These risk shifting contractual clauses can be very confusing for clients, so I thought I would explain (with a real live case and a graphic) what is called the ‘combination claim exception.’ Contractual indemnities are in essence insurance policies , and the customer is asking for insurance if your software

Software Review 40

Software Review Technical Review Compensation Software 40

Aber Law Firm

APRIL 15, 2014

What to Know About the ‘Combination Exception’ to Infringement Indemnities. As a software licensing attorney I run into the issue of infringement indemnities all the time. These risk shifting contractual clauses can be very confusing for clients, so I thought I would explain (with a real live case and a graphic) what is called the ‘combination claim exception.’ Contractual indemnities are in essence insurance policies , and the customer is asking for insurance if your software

Software Review 40

Software Review Technical Review Compensation Software 40