The Angel VC

OCTOBER 5, 2014

Some time ago my friend (and co-investor in Clio , Jobber and Unbounce ) Boris Wertz wrote a great blog post about "the only 2 ways to build a $100 million business". I'd like to expand on the topic and suggest that there are five ways to build a $100 million Internet company. This doesn't mean that I disagree with Boris' article. I think our views are pretty similar, and for the most part "my" five ways are just a slightly different and more granular look at Boris' two ways.

Scale 280

Scale Business Customer Lifetime Value Enterprise 280

Tom Tunguz

SEPTEMBER 28, 2014

Bill Gurley and Fred Wilson have focused on burn rates as an important topic for startups. The immediate question that follows this commentary is: How much does the typical startup burn throughout its life? And what is a “risky” burn rate for a company? I use a rule of thumb to evaluate the burn rate of a Series A startup. I multiply the number of employees by about $10-12k, depending on the location of the company.

Startup 205

Startup Scale Sales Hiring Benchmarks 205

Chaotic Flow

MARCH 25, 2014

My first serious lesson in the criticality of SaaS metrics was about six years ago when I was unexpectedly stumped in a board of directors meeting. I had just presented the booking plan for the year and one of the Director’s in the meeting said that the plan was good, but we really needed to increase our booking rate. My first reaction was something like: “Well our current booking rate is pretty strong and we’re a SaaS business, so even with no immediate improvement to bookings we’ll continue to

Metrics 156

Metrics Business SaaS Scale 156

Practical Advice on SaaS marketing

JULY 6, 2014

"If we just dump enough names in the top of the funnel, some paying customers are bound to come out at the bottom of the funnel!" Wrong. This approach to customer acquisition - sucking in as many suspects as possible - is costly and inefficient. In other words, it's a very bad fit for software-as-a-service (SaaS) companies. For one thing, collecting all those names isn't free.

Marketing 140

Marketing SaaS Acquisition Business Model 140

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Aaron Beashel

NOVEMBER 24, 2014

Content marketing can be an incredibly successful approach to customer acquisition for B2B SaaS companies. And there is a lot of content out there that can teach you how to do it effectively as well, with the likes of HubSpot, Marketo and Kapost all producing great content that’ll help you create a winning content marketing strategy for your company.

Content Marketing 100

Content Marketing B2B Social Media Management 100

Neil Patel

JUNE 5, 2014

Social media is critical. I doubt anyone would argue with me about that. But social media is also misunderstood in some ways. One of those misunderstandings is which social media sites a business or individual should be on. If you read this article, you’re going to understand which social media sites are best for your brand or business. You won’t have to waste your time messing around on social media sites that have no ROI, and you even might do better at gaining leads on the social media sites

Social Media 76

Social Media B2C Branding Engineering 76

CloseSaaS

OCTOBER 28, 2014

In SaaS sales, it’s not enough to sell your customers on buying your product. You need to sell them on using it too! Many founders underestimate how much this matters, and their SaaS startups will never gain traction until they get this right.

SaaS 69

SaaS Sales Startup 69

The Angel VC

NOVEMBER 1, 2014

Inspired by Ben Horowitz’ excellent “Good product managers, bad product managers” post and Stefan Smalla’s “Good leader, bad leader” masterpiece I’ve tried to put together my thoughts on what I think makes a great venture capital investor. Thanks go to my colleagues at Point Nine Capital for their invaluable feedback, in particular Michael, Mathias and Rodrigo, who reviewed an early draft of this post and provided lots of great comments.

Technical Review 248

Technical Review Venture Capital Investment Finance 248

The Angel VC

NOVEMBER 3, 2014

It seems like my recent post about five ways to build a $100 million business resonated very well with a lot of people. I also got some really good comments and suggestions, and so I'd like to follow-up with another post on the topic. Introducing: the Brontosaurus! A reader by the name of " Vonsydow" commented that another way to get to $100 million is by having 100 customers, each paying you $1 million per year, and mentioned Veeva as an example.

Business 206

Business Payment Features Subscription Revenue 206

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Tom Tunguz

JANUARY 28, 2014

Aside from a startup’s internal considerations about the right time to raise money, founders should weigh the seasonality of the fund raising market when planning their raise. There’s a rule of thumb batted around the valley that the worst times to raise capital are in the dog-days of summer and after Thanksgiving. As it turns out, this aphorism is only a half-truth.

Technical Review 197

Technical Review Startup Finance Investment 197

Tom Tunguz

OCTOBER 21, 2014

Bill Macaitis, the former CMO of Zendesk, articulates how a SaaS marketing team should operate better than anybody else I’ve met. At a recent Point9 conference, Bill outlined the 9 marketing disciplines of great SaaS companies and how they fit together to create a marketing powerhouse. I’ve copied my notes from Bill’s talk below. Ops & Analytics Team.

Scale 192

Scale Marketing Growth Hacking SaaS 192

The Angel VC

MARCH 13, 2014

My colleague Nicolas wrote a great guide with tips and tricks on how to do cohort analyses which I'd like to share with the readers of this blog. Thanks, Nicolas, for allowing me to guest publish it here. Without further ado, here it is! - - - - - - - - - - At Point Nine we believe that the only way to get a real sense of user retention and customer lifetime is doing a proper cohort analysis.

Customer Lifetime Value 189

Customer Lifetime Value Churn Retention Payment Features 189

The Angel VC

MAY 15, 2014

Today is a very special day for me as as an entrepreneur and investor. About an hour ago, Zendesk went public on the New York Stock Exchange. The last time I watched an IPO so carefully was when Shopping.com, the company that had bought my price comparison startup, went public – almost ten years ago. Here are a few visual impressions of my love affair with Zendesk, which began six years ago: Huge congrats and thanks to the entire Zendesk team – I couldn't be more proud of you guys!

Startup 189

Startup Pricing SaaS 189

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

The Angel VC

DECEMBER 12, 2014

Picture taken by "nlmAdestiny" One of the things that inevitably happens when you're in the angel or VC investing business for a couple of years is that besides a hopefully healthy portfolio, you're also building a growing anti-portfolio. As far as I know, the term "anti-portfolio" has been coined by Bessemer. Its meaning is described very well on Bessemer's website , and because it's so hilarious I want to quote it in its entirety: "Bessemer Venture Partners is perhaps the nation's oldest ventu

Venture Capital 183

Venture Capital Investment Business Marketing 183

The Angel VC

SEPTEMBER 16, 2014

In a Wall Street Journal interview that was published yesterday, Bill Gurley , General Partner at Benchmark and one of the smartest and most successful VCs of all time, said that the current environment reminds him of the tech bubble of the late 1990s: “Every incremental day that goes past I have this feeling a little bit more. I think that Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now.

Venture Capital 167

Venture Capital Interviewing Startup Benchmarks 167

The Angel VC

JANUARY 17, 2014

Who ever said only startups love vanity metrics? Here's our revenge for all those misleading stats that we have to muddle through almost on a daily basis when startups pitch us! Yesterday I saw this post on the blog of Karlin Ventures. In response to a tweet by Paul Graham which was highlighted in Danielle Morrill's excellent Mattermark Daily newsletter, the guys at Karlin Ventures revealed the "days since last contact" numbers for their portfolio.

Metrics 165

Metrics Startup Communication Venture Capital 165

Tom Tunguz

OCTOBER 22, 2014

Startups struggle to set the right price for their products because pricing dynamics in the field don’t obey the laws taught in the classroom. The standard supply and demand curves, drawn above, imply that as price increases demand decreases; that buyers act rationally and that this law is immutable. But this simply isn’t the case. Buyers in the market place violate the traditional supply and demand model all the time.

Pricing 157

Pricing SaaS SMB Enterprise 157

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Enterprise

The Angel VC

MAY 6, 2014

I've just added three new charts to my Excel template for cohort analysis. The first one shows the MRR development of several customer cohorts over the cohorts' lifetime: Each of the green lines represents a customer cohort. The x-axis shows the "lifetime month", so the dot at the end of the line at the bottom right, for example, represents the MRR of the January 2013 customer cohort (all customers who converted in January 2013) in their 9th month after converting.

Data 157

Data Metrics Revenue Pricing 157

Tom Tunguz

MAY 7, 2014

Some of the best content to be found about startups is locked in books. Thomas Kjemperud asked me yesterday for a 140 character recommendation of one book for founders. Reducing my list to just one and condensing an argument for why founders ought to read it in just 117 characters was just too great a challenge for me. Instead I’ve written a blog post about the nine favorite books I’ve read over the last five years have helped me understand startups and the processes that make them s

Underperforming Technical Team 157

Underperforming Technical Team New CTO CTO Government 157

The Angel VC

NOVEMBER 26, 2014

Yesterday I posted a brief review of Mikkel’s excellent book “Startupland”. For me, the book is also a good opportunity for some reflections and to share some thoughts in relation to Zendesk’s journey. The first date When I stumbled on Zendesk in 2008 I knew absolutely nothing about enterprise software, B2B or SaaS. I had always been a consumer Internet guy, having founded comparison shopping engine DealPilot.com back in 1997 and personalized homepage Pageflakes in 2005.

Scale 155

Scale Sales Hiring Venture Capital Software Review 155

The Angel VC

JANUARY 3, 2014

First of all, a Happy New Year to all readers of this blog. I hope you've had a great start into the new year, and I wish you a happy, healthy and prosperous (and of course SaaSy ) 2014. I've done a bit of reflection on what I've learned in the last couple of months. Here are six things that I think SaaS founders should keep in mind in 2014. This is obviously not meant as a definite or comprehensive list by any means.

Scale 155

Scale SaaS Sales Hiring Technical Review 155

Speaker: Jay Allardyce, Deepak Vittal, Terrence Sheflin, and Mahyar Ghasemali

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

The Angel VC

DECEMBER 16, 2014

When we start to work with a new portfolio company, one of the things we always suggest is that in addition to (sometimes lots of ) ad hoc communication via eMail, Skype, Basecamp, etc. we set up a standing meeting or call, at least during the first 9-12 months following our investment. Typically it's a one-hour monthly call, and the purpose of these calls is to get us updated and to talk through current issues.

Sales Hiring 154

Sales Hiring Metrics Communication SaaS 154

The Angel VC

FEBRUARY 23, 2014

More than two years ago I wrote about what we look for in early-stage SaaS startups. Since then we've looked at hundreds of SaaS startups and have gained additional insights through the work that we've been doing with the SaaS startups that we have invested in. Therefore I thought it would be time for a follow-on post with some additional thoughts. In the original post I focused primarily on early metrics as an indicator of product/market fit and of a favorable CAC/CLTV ratio in the future.

Startup 152

Startup SaaS Acquisition Scale 152

Tom Tunguz

JANUARY 1, 2014

Like many others, during my work day I fall into the firefighting trap, a time mis-allocation problem that leaves me focusing on urgent, but not necessarily important tasks. Firefighting is addictive because it’s fast-paced, nonstop and fun. But firefighting is exhausting and leaves me feeling as if I haven’t made progress toward my goals.

Startup 150

Startup Management Business 150

The Angel VC

DECEMBER 1, 2014

This is part two of my post about the early days at Zendesk. The first part is here. Small, fragmented and no potential for differentiation As mentioned in the first part of this post, the seed round was only $500,000 and it was clear that we’d need much more money soon. That’s why Mikkel and I started to work on a pitch deck and a financial plan almost immediately after the closing of the seed round and started to pitch to VCs shortly thereafter.

Investment 149

Investment Business Model Software Marketing 149

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

Chaotic Flow

MAY 6, 2014

As a SaaS business matures, the importance and value of SaaS metrics increase. Most SaaS businesses begin their journey down the SaaS metrics path by tracking recurring revenue in relation to customer acquisition costs. After building a solid customer base, churn becomes a priority. These fundamental SaaS metrics are all apparent in the standard SaaS profit equation below.

Acquisition 149

Acquisition Metrics SaaS Customer Success 149

The Angel VC

NOVEMBER 25, 2014

As some of you may know, my friend Mikkel , founder and CEO of Zendesk , wrote a book. It’s called “Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business” and you can learn more about it here. The hardcover version will be released in about two weeks, but the Kindle version just became available on Amazon and I was lucky enough to get my hands on a draft a few weeks ago.

Entertainment 147

Entertainment Business Startup 147

Tom Tunguz

JUNE 30, 2014

A terrific SaaS VP of Marketing once told me, “If the sales team is focused on hitting this quarter’s revenue target, then the marketing team ought to be focused on next quarter and the following quarter.” In SaaS companies, one of the marketing department’s primary responsibilities is generating sufficient customer interest to enable the company to achieve their revenue targets.

Scale 147

Scale Scaling Sales Hiring Marketing 147