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About two years ago, Josh Hannah of Matrix Partners wrote an excellent article titled “That's a nice little $40M eCommerce company you have there. Call me when it scales.” In it he argues that an eCommerce business with $10 to $20 million in revenues is not that hard to build and also not very valuable. I would recommend that you read the full article, but one of the key points of the article was that if you fill a niche and have distinctive product/market fit with a set of customers, you can ac
A dollar is a dollar is a dollar, right? Not quite. Not all revenue dollars are created equal, but all gross profit dollars are. Gross profit, not revenue, is the metric companies should be using to compare themselves. Ultimately, gross profits account for more than 55% of the forward multiple of publicly traded SaaS companies after normalizing for revenue growth.
Trying to connect with someone while they’re scanning their Twitter feed, replying to texts, and staring at a full inbox, while desperately trying to meet deadlines for whatever deliverables are on their long to-do list isn’t easy. But if you’re the poor marketing person trying to reach prospective customers, that’s exactly what you’re up against. And that’s especially true if you’re marketing a software-as-a-service (SaaS) solution.
HubSpot has had a pretty good run. Went from zero to IPO. What's not known is how unlikely the story of our success is. II gave a talk at the 2016 SaaStr Conference hosted by Jason Lemkin. The slides and full video from the talk are included below, with some quick notes on a few of the topics covered. Here's me presenting what turned out to be the most popular slide (more on this idea at the end of the article).
AI adoption is reshaping sales and marketing. But is it delivering real results? We surveyed 1,000+ GTM professionals to find out. The data is clear: AI users report 47% higher productivity and an average of 12 hours saved per week. But leaders say mainstream AI tools still fall short on accuracy and business impact. Download the full report today to see how AI is being used — and where go-to-market professionals think there are gaps and opportunities.
Putting together a job description for a Growth Engineer? Wondering what others are doing? Save time with this cheat sheet! The below tidbits are taken from 30+ job descriptions for Growth Engineers, all from tech companies such as Asana, Airbnb, AdRoll, Cybercoders, Mircosoft, UXPin, and Zenefits, to name a few. Copy and paste what’s relevant to you to build your job description, or just scroll through to get some inspiration.
“In today’s world, It’s easier than ever. to start an online business”. This sentence has been repeated by many experienced business people, especially since the introduction of SaaS and other cloud based online services. While these services significantly lowered the costs of starting a new business, I believe that the people who said that sentence were missing the point of starting a business – to build an always growing, sustainable brand.
“In today’s world, It’s easier than ever. to start an online business”. This sentence has been repeated by many experienced business people, especially since the introduction of SaaS and other cloud based online services. While these services significantly lowered the costs of starting a new business, I believe that the people who said that sentence were missing the point of starting a business – to build an always growing, sustainable brand.
We recently took on an intern fresh out of college—an overachiever who knows how to take care of business. She’s ambitious, hard-working, and smart as hell. At school, she didn’t just meet her goals—she blew them out of the water.
As the fundraising environment changes, some SaaS companies will look to reach cash flow break even on their existing reserves. Founders may reduce staff, particularly in recruiting or new projects that the company prefers not to finance. But there are three other ways to become profitable that limit reductions in force, enable the company to continue to grow with greater efficiency and increase the value of the company in the process.
Some subscription companies are shooting themselves in the foot by following the one size fits all method of monthly billing. Although monthly cycles are industry standard for subscription companies, it's not necessarily the most efficient model for all. A monthly cycle makes a lot of sense…. The post How customizing subscription billing cycles help with customer retention appeared first on ReSci.
I'm doing an "Ask Me Anything' (AMA) session on Product Hunt tomorrow (Tuesday, Feb 23rd, 2016 at 10 am PST, 1pm EST). Would love for you to sign-up early, because I'm insecure, egotistical and I want to impress Ryan Hoover. Would love for a decent number of people to sign-up. Or an indecent number would be even better. 350 have signed up already (before this blog post was published).
Speaker: Ben Epstein, Stealth Founder & CTO | Tony Karrer, Founder & CTO, Aggregage
When tasked with building a fundamentally new product line with deeper insights than previously achievable for a high-value client, Ben Epstein and his team faced a significant challenge: how to harness LLMs to produce consistent, high-accuracy outputs at scale. In this new session, Ben will share how he and his team engineered a system (based on proven software engineering approaches) that employs reproducible test variations (via temperature 0 and fixed seeds), and enables non-LLM evaluation m
When we discuss payback periods in SaaS, we implicitly mean customer payback periods. How much time does it take for us to recoup the capital outlay we invest in acquiring a new customer? But, there’s a second and equally important payback period – the payback period on hiring a new account executive. Let’s take a hypothetical SaaS startup that sells a $20k product at a 75% gross margin.
What a difference a month makes. I wrote a post on January 10, 2016 called The Downward Pressure of Public Markets on Startup Valuations that depicted the slow decline of SaaS multiples in the public markets. Since then, multiples have compressed markedly. The chart above shows the forward revenue to enterprise value multiple of all public SaaS companies.
The single most important business decision in evaluating a business is pricing power. And if you need a prayer session before raising price, then you’ve got a terrible business –Warren Buffett. I read this quote in Confessions of the Pricing Man: How Price Affects Everything , written by Hermann Simon. Simon is a former academic, an ex-professor at INSEAD Stanford, Harvard, and London business schools, who extensively researched and taught pricing theory.
At SaaStr 2016 and SaaS Office Hours in New York , I shared an analysis of the fastest growing SaaS companies over the last 3 years. In particular, I benchmarked the revenue, growth rates and round size characteristics of these businesses at their Series A. I’ve embedded the slides here. Benchmarking Exceptional Series A SaaS Companies from Tomasz Tunguz.
Simplify omnichannel payments with a solution that unifies every channel through your platform. By integrating front-end systems like online, mobile, and in-store payments with robust back-end infrastructure, you can deliver a seamless payments experience without the need for heavy engineering. Omnitoken technology enhances security by tokenizing card transactions for reuse, enabling merchants to drive cross-selling opportunities.
Each new year, I try to implement a new productivity hack. Getting Things Done. Bullet Notebook. This year, I’m trying to manage my to do list with my calendar. I realized a few years ago no arsenal of productivity hacks will prolong the working week, this February’s 29th day notwithstanding. That’s the challenge with to do lists - they lack commitment devices.
Attorneys witness the changes in the fundraising market from a unique vantage point. Consiglieri to startup founders and investors alike, attorneys assist in the negotiation and are privy to the terms of investment. Fenwick & West, one of those law firms, released data this morning detailing the evolution of financing terms for Q4. I’ve reproduced the most salient difference in Q4 compared to previous periods above.
Join me for SaaS Office Hours on February 22 in New York at the Axial headquarters. This is the first time we’ll be hosting SaaS Office Hours on the East Coast, and there will be more to follow. Given the volatility in the market and the number of inbound questions about the implications, this SaaS Office Hours will be focused on fundraising and the venture capital outlook for 2016.
Most modern data architectures employ many different data stores and processing engines. Hadoop, Cassandra, HBase, Spark, Storm, Phoenix. Data analysts looking to unearth insights within these data stores must move data back and forth between different systems and different data formats. As the number of new open source projects continues to grow geometrically, this data fragmentation is likely to splinter further.
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.
There are several forms of venture debt. Convertible notes are the most common, today. Most startups raise seed rounds using convertible notes. Startups that have substantial working capital requirements often employ lines of credit/revolvers. Last, many startups take out term loans. They borrow money for several years and repay it over time. Venture debt can supply additional capital for a startup to grow at a lower cost of capital than equity.
Mr. Market is a fictitious character imagined by legendary investor Benjamin Graham in The Intelligent Investor. Graham describes Mr. Market as emotional, irrational, moody - and is in the short run a voting machine, in the long run a weighing machine. It might sound like a children’s story, but Warren Buffett lauded the book as the greatest book ever written on investing.
Leverage. It’s the key to negotiating. Classic negotiating books like Getting to Yes define the BATNA, the Best Alternative to Negotiated Agreement. If you were to walk away from a conversation, what’s the next best choice? The BATNA singlehandedly creates leverage in negotiating. Over the last few years, startup founders have exerted tremendous leverage in the fundraising market by taking advantage of the supply/demand imbalance.
When buying machine learning enabled software, it’s easier to sell like Ironman than Robocop; a product that complements and augments the user’s skills rather than a true replacement. As machine learning continues to become a key differentiator among SaaS products, a secular and positive trend, startups are learning how to sell the promise of the software better and better.
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
Startup events like Startup Istanbul, "The Leading Startup Event in Eurasia", are great places for founders, executives, and investors to meet and share great ideas and stories about startups.
You know the drill. Prospects are inconsistent—they say one thing and do another. “Your product is too expensive,” they say, right before closing a deal with a competitor that costs even more. “We need more time,” you hear, then suddenly they're back with an answer the next day.
We all know a blog is an effective tool for building thought leadership, influence, and awareness among your target market. It’s also a great way to recruit brand advocates. The trick is knowing how to turn those advocates into customers.
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Email is the dominant form of communication for salespeople, and with good reason—according to a recent survey, over 70% of people report they would prefer businesses to contact them via email.
How do you build a great startup culture? While everyone likes to talk about all of their great hiring and recruiting hacks, no one likes talking about having to fire employees—until now.
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