Tom Tunguz

SEPTEMBER 10, 2024

The new software GTM playbook has yet to be written. Figuring out how to consistently produce wow moments with non-deterministic software is essential. The room was split on pricing model : seats, usage, or some hybrid. Ultimately, pricing captures 15-30% of the value the software/AI creates.

Software 296

Software Sales Hiring Customer Lifetime Value Scale 296

Tom Tunguz

AUGUST 1, 2022

How much value does a successful software startup create per dollar of venture investment? Over the last 30 years, a venture dollar invested in a successful US software startup generated $10 of value. When the IPO markets shuts, exit value regresses to the average M&A price. About 10x, though it’s volatile.

Startup 330

Startup Software Pricing Investment 330

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

Tom Tunguz

AUGUST 7, 2022

This year, private equity firms have acquired five public software companies, totalling $38b in value. Since these transactions’ details are public, we can use them to infer how the private software market values companies. But no relationship exists between the Nasdaq’s price level & multiples. Growth Rate.

Acquisition 321

Acquisition Pricing Startup Software 321

Tom Tunguz

JULY 10, 2024

Pricing an AI product will be a defining question in software for the next few years. But greater productivity may reduce the demand for seats over time, ultimately decreasing the size of software markets. We can observe the market trends today across some of the larger SaaS companies who offer AI pricing.

AI 267

AI Pricing Sales Hiring Strategy 267

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

Payrix

FEBRUARY 4, 2025

Interested in learning more about software-led payments or joining the current Embedded Payments conversations in your organization? Terms related to integrated payment technology Application programming interface (API) A set of routines, protocols, and tools that are used for building software applications.

Payment Services 147

Payment Services Merchant Services Payment Solutions Payment Methods 147

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 319

Software Review Software Finance Acquisition 319

SaaStr

OCTOBER 25, 2021

Q: What billing or pricing tactic have you found in the end just wasn’t worth it? “Unless your product has a huge TAM to cast your net in, no-touch onboarding, and an obvious first “wow” moment you’re trying to reach, free trials and/or freemium pricing does not work well.” Jason, ed. : Jason, ed. :

Pricing 322

Pricing Scale Enterprise B2B 322

SaaStr

FEBRUARY 2, 2025

Activant Capital brought together at SaaStr Annua l a group of break-out next-generation AI enhanced vertical software leaders: the CEOs from Owner.com, Alloy Automation, and DoNotPay. At SaaStr Annual they shared their experiences and insights on implementing AI in vertical software companies.

AI 222

AI Technical Review Artificial Intelligence Systems Review 222

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). Pricing : Qualaroo offers a free forever plan with all features included for startups and small businesses for up to 50 monthly responses.

Software Review 105

Software Review Technical Review Software B2C 105

Tom Tunguz

JANUARY 12, 2022

In the last few weeks, public software company multiples have halved. Beyond the most recent cycle, how often do the web2 and web3 software markets move in synchrony? Beyond the most recent cycle, how often do the web2 and web3 software markets move in synchrony? The cryptocoins appreciated much more than software.

Software 330

Software Marketing Trends Startup 330

Tom Tunguz

MARCH 28, 2024

AI will transform software sales. When researching software, operational buyers & procurement teams alike will use AI to research different offerings. My second query was to compare pricing between the two products & ask which would be less expensive. But the buyers’ process will also evolve. which is better?

AI 284

AI Software compliance Consulting 284

Tom Tunguz

DECEMBER 26, 2022

Constellation Software is a $30b+ publicly-traded software holding company employing more than 25,000. A former venture capitalist, Mark Leonard started Constellation in 1995 with $15m of outside investment & a goal of buying vertical software companies with a moat & good unit economics. Price Increases.

Software Review 286

Software Review Investment Software Acquisition 286

SaaStr

NOVEMBER 28, 2024

The good news is, you can support these price points effectively with a very efficient inbound sales team, and/or a mix of self-serve and sales-led. At two different price points. Many Vertical SaaS leaders do payroll, finance, accounting, and much more — not just the core software. But how do you get to $100m+ in ARR?

Payment Solutions 261

Payment Solutions Inbound Sales Team Marketing Scale 261

Tom Tunguz

NOVEMBER 9, 2023

Vendr’s quarterly report on SaaS purchasing trends summarize the sentiment of the software market. The average sales cycle has lengthened from 32 to 44 days for net new software, a 37% increase. Slower cycles & fewer new purchases : 19% of software purchases are net new in 2023 ; just 17% in Q3. What’s selling?

Software 289

Software Trends Pricing Data 289

SaaStr

AUGUST 26, 2022

Series B and later prices are down across the board from their peaks in 2021 and Q1’22, down 30% or more. Fenwick’s blended numbers see overall Series B and later round pricing down about 30%. #3. But overall, valuations and prices post-Series A still remain way ahead of where they were up until 2018.

Pricing 326

Pricing Social Media B2C Startup 326

SaaStr

JULY 18, 2022

Gartner: businesses will spend $100,000,000,000 more on software in 2023 than 2022. As of July 2022, Gartner predicts: Overall business software spend will still grow a stunning 11.8% That means $100 Billion more software spend in 2023 than 2022. The post Gartner: Software Spend Will Still Grow by $100 Billion in 2023.

Venture Capital 347

Venture Capital Software Cloud Forecasting 347

Clouded Judgement

JUNE 19, 2024

Q1 was a very weak quarter of software earnings. I’m calculating FCF by taking the Operating Cash Flow and subtracting CapEx and Capitalized Software Costs. Some software companies also have seasonality in the “payback.” What I’ve shown below is the market-adjusted stock price reaction.

Cloud 318

Cloud GCP(Google Cloud Platform) Software Azure 318

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

SaaStr

MARCH 5, 2024

Dear SaaStr: What’s the #1 Most Important Thing in Pricing A New SaaS Product? Software all sort of all, rough-and-tough, costs the same to build and ship. Most first-time SaaS CEOs price too low and don’t drive ACVs up quickly enough because they don’t quite yet understand the context of the product.

Pricing 270

Pricing SaaS Software 270

SaaStr

MARCH 8, 2024

With everything in AI moving so rapidly, what’s the best way to price Artificial Intelligence products or SaaS tools with custom AI features and integrations? So we asked the expert, Sandhya Hegde, General Partner at Unusual Ventures to share her best practices and trends for pricing and packaging AI products. Why is pricing so tricky?

AI 268

AI Artificial Intelligence Pricing SaaS 268

SaaStr

FEBRUARY 12, 2025

The Evolution of Vertical SaaS The shift from horizontal to vertical SaaS solutions represents a fundamental change in how enterprises buy and implement software. They don’t just build software they become construction industry experts. Efficient Growth : Word-of-mouth in tight-knit industries reduces customer acquisition costs.

Construction 251

Construction Scale SaaS Travel 251

SaaStr

DECEMBER 11, 2024

AI can help discover preferences in contracts, understand how legal teams like to negotiate and implement that automatically in the software. Pricing and Monetization The industry hasn’t yet settled on a dominant pricing model for AI capabilities, making this an area of ongoing experimentation.

AI Search 284

AI Search AI Artificial Intelligence B2B 284

SaaStr

NOVEMBER 6, 2023

If you’re selling software to SMB merchants and outside of tech like Shopify and Toast and Monday , things are pretty, pretty good, if in some ways still harder than before. If you’re selling sales and marketing software, like Zoominfo, it can seem a lot tougher than 12-18 months ago. So where does this all net out?

Merchant Services 307

Merchant Services Azure Software AWS 307

SaaStr

JULY 24, 2023

So price increases have been the name of the game in SaaS for the past 12 months, in many (not all) cases to help make up for slowing growth: Zendesk up 16% Salesforce up 9% Google Workspace up 20% HubSpot up 12% Webflow up 16% Shopify up 33% Slack up 10% And some of them like Slack and Salesforce hadn’t raised list prices in quite some time.

Pricing 246

Pricing Software Review Churn SaaS 246

SaaStr

NOVEMBER 7, 2024

The price for inference has massively plummeted this year, so you have more powerful models to build into your application, and they cost less every time you use them. Pricing Will Move Away From Per Seat You can’t just add AI into your product for free because there’s a real dollar cost to add it to your existing offering.

AI 261

AI Artificial Intelligence ChatGPT Mobile 261

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

Tom Tunguz

AUGUST 22, 2023

The company’s pricing power at work : limited supply & increased demand pushes prices higher. Looking at some of the inventory metrics (this isn’t a software company!) AI has become the engine pushing the technology markets forward - both at the infrastructure & software levels.

Pricing 246

Pricing AI Business Cloud 246

SaaStr

FEBRUARY 10, 2023

Dear SaaStr: How Do Enterprises Decide Which Software Vendor to Sign a Deal With? Price rarely wins per se. They may go with their #2 choice based on price … but generally only if they view the top 2 vendors as mostly fungible. The post Dear SaaStr: How Do Enterprises Decide Which Software Vendor to Sign a Deal With?

Enterprise 284

Enterprise Software Pricing Branding 284

SaaStr

OCTOBER 20, 2022

One thing that is clear is that public SaaS and Cloud stock prices are way down. And they say 2023 will be a banner year for enterprise software spend at least — growing a stunning 11% to $880 Billion. The post Gartner: Business Software Spend Still Forecast to Rise 11.3% But is spending? I’m not so sure.

Forecasting 300

Forecasting Artificial Intelligence Software Business 300

FastSpring

OCTOBER 11, 2024

When you’re expanding your software business into new regions, industry benchmarking data can help you make better strategic decisions by answering important questions about business in the region. If you’re selling software at the same price into both the U.S. and EU customer data to set “one-size-fits-all” global pricing.

Merchant Services 159

Merchant Services SaaS Payments Benchmarks Subscription 159

SaaStr

DECEMBER 27, 2024

AI in B2B SaaS: The Incumbent Advantage On the AI revolution in B2B software, it’s the age-old ‘startups are innovating and racing to get distribution, and the bigger companies have distribution and are racing to innovate.’ “We had the best board meeting we’ve ever had,” according to Brian.

AI 284

AI Marketing SaaS Interviewing 284

SaaStr

JANUARY 17, 2025

Pricing Strategy : Consider whether AI features should be packaged as part of existing products or as separate offerings, based on how value scales with usage. Key Takeaways The discussion highlighted how AI is not just another feature but a fundamental shift in how software products are built and consumed.

AI 261

AI Cybersecurity User Experience Scaling 261