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.’ ’ The twist this time is the data is very hard for startups to acquire or accumulate.

AI 287

AI Marketing SaaS Interviewing 287

Tom Tunguz

MARCH 10, 2022

I’m going to tell you a bit about two startups and I’d like you to guess the name of each company. Both startups provide database software to developers to build applications. Both companies employ a usage-based pricing model: pay for what you use. Both of these businesses are publicly traded.

Startup 338

Startup Pricing Revenue Development 338

SaaStr

NOVEMBER 13, 2024

New Startups and Companies and Enterprise Strong. But SMBs in the middle have become more cost and price-sensitive. #10. Adding Cash Bonuses for Performance, Reducing Equity Grants Everyone is under pressure to reduce stock-based expense, so Kalviyo is rolling out more short-term cash bonuses to make up for reduced equity grants. #9.

Scale 304

Scale SMB Scaling Enterprise 304

SaaStr

OCTOBER 20, 2024

So most successful angels in tech are seeking startups that can 100x their money. That’s really 200x from the price they pay, because typically over the lifetime of an investment, total dilution is about 50%. If it’s just 1 Big Winner out of 50 angel investments, to even just double your money, that winner has to do 100x.

Investment 287

Investment Startup Pricing 287

SaaStr

JULY 24, 2023

Dear SaaStr: How does a SaaS company find its initial price point? If you are more valuable than the comp, and are confident selling that value — pricing higher than your comp can work well. If you started off low-end, but have moved up-market … don’t be scared to totally redo your pricing each year. It’s pretty simple.

Pricing 246

Pricing Startup SaaS Marketing 246

Tom Tunguz

MAY 15, 2022

As the fiscal quarters of many startups draw to a close, board members and management teams are having one of four conversations: The World is Your Oyster, Time to Strategize, Chewing Gravel, or Go Big/Go Profitable. The x-axis is the Zero Cash Date: when the startup runs out of money. The north star should be efficiency.

Startup 355

Startup Outsourced Development Scale Banking 355

Sales Hacker

FEBRUARY 7, 2025

SaaS pricing isn’t static – it’s a living strategy that grows with your company. In this article we dive into a playbook for pricing across different stages of company growth, inspired by Geoffrey Moore’s Crossing the Chasm. At this stage, startups face significant uncertainty.

Pricing 113

Pricing Scale SaaS Technical Review 113

SaaStr

MAY 23, 2024

So Emergence Capital put together a great report here on B2B startups, “Beyond Benchmarks 2024” , with a ton of great data across 664 software startups. One piece I loved is how 2023 growth rates compared to 2022 for Top Quartile Software Startups. From $5m-$20m ARR, top quartile startups are growing 58%.

Startup 342

Startup Benchmarks B2B Pricing 342

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. In addition to MOIC patterns, the data reveals three startup fundraising epochs. Startups in the 90s raised less than $10m.

Startup 331

Startup Software Pricing Investment 331

SaaStr

DECEMBER 2, 2023

Many Cloud leaders stock prices are way, way up in 2023, the Cloud platform leaders have re-accelerated, and leaders like Shopify are having close-to-record years. But for many startups, the hangover from the Excesses of 2021 is a real and tough one. Startups shutting down are up 238% this year — already. But Be Kind.

Startup 320

Startup Cloud Pricing Data 320

SaaStr

OCTOBER 11, 2020

Investing based on a good deal / cheap price. Not investing due merely to a high price. Almost, at any price in Cloud / SaaS. Now, I just ask the founder what they want in terms of price, terms, etc. The post My Top 8 Mistakes Investing in SaaS Startups appeared first on SaaStr. Cheap isn’t a reason to invest.

Investment 363

Investment Startup SaaS Pricing 363

SaaStr

SEPTEMBER 28, 2022

HubSpot for example, which has been very judicious on holding the line on pricing and ACVs, raised prices 12% for the first time since 2018 — albeit only on new customers: Slack also similarly did its first pricing increase in history recently, of about 10%: Prices are going up in SaaS.

Pricing 315

Pricing Startup SaaS 315

Tom Tunguz

SEPTEMBER 15, 2022

Not too long before the public market correction, high-growth startups routinely commanded 100x ARR multiples. Doesn’t this acquisition reset the market price despite this year’s 70% correction? Doubly true when the median public company today is trading at 6.3x. The answer is likely not.

Startup 355

Startup Acquisition Pricing Revenue 355

Tom Tunguz

MARCH 27, 2023

Slower sales cycles create pipeline shocks & startups are feeling the impacts. The average startup saw a 24% increase in sales cycle from early 2022 to 2023. Startups selling to enterprises have increased 36%, twice those of Mid-Market & SMB focused companies. Sales cycles shifted dramatically in 2023.

Startup 350

Startup SMB Headcount Sales 350

SaaStr

NOVEMBER 28, 2024

I try to look at two things in Vertical SaaS startups, at least when investing : Will everyone in the vertical / industry use it? 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. That’s the question.

Payment Solutions 263

Payment Solutions Inbound Sales Team Marketing Scale 263

SaaStr

MARCH 19, 2024

So Carta put out some recent data I found very useful on how many startups raise another round, and how many sort of quietly wind down, in the first 5 years or so after being founded (from 2018 to early 2024): Almost none IPO’d in the first 5 years, but that just makes sense. And half the Seed stage startups had shut down by Year 5.

Pricing 333

Pricing Acquisition Startup Education 333

SaaStr

JULY 29, 2022

But what about startups? Most VC funds “carry” startup investments at their last round price, unless their value has been materially impaired. Even if the startup isn’t quite a rocketship anymore, most smaller VC funds will stay hold it at the same value. Canva has done as well as any startup possibly could.

Startup 330

Startup Venture Capital SaaS Cloud 330

SaaStr

NOVEMBER 10, 2022

The problem now is in many cases, startups and bigger like Meta are simply stuck with teams that are far less efficien t than we had pre-Covid. The post We’re All Paying the Price Now for Massive Overhiring appeared first on SaaStr. Marketing teams bloated in size to achieve the same goals.

Sales Hiring 324

Sales Hiring Pricing Cloud Startup 324

SaaStr

APRIL 18, 2022

These platforms are used to trade shares in the largest, late-stage startups: Forge Global, which just SPAC’d / went public itself, found the clearing price for trades for top startups fell 10% in February and another 10% or so in March , after just starting to go down in January. or so too in the past 2 months.

Startup 315

Startup Pricing Investment Data 315

SaaStr

JANUARY 27, 2024

Dear SaaStr: What are some common reasons for the failure of startups? My experience across leading 30+ seed investments, including 4 billion+ exits so far, on why startups fail: Not 200% committed to winning no matter what. That might be OK for a few months, but beyond that, startups fall into a decay curve they don’t recover from.

Startup 285

Startup Scale CTO Pricing 285

SaaStr

AUGUST 24, 2021

Q: What are the best marketing techniques for an early stage SaaS startup? If your price point is very low, this sometimes doesn’t work. But in general, most startups find that at best 1–2 channels really work for them. Too many startups waste their list and email campaigns. A great example in here. Challenge yourself.

Scale 344

Scale Startup Marketing SaaS 344

Tom Tunguz

JANUARY 4, 2023

The US startup M&A market in Q4 2022 was one of the quietest in the last 20 years. A $22m median M&A price implies most of these transactions were acquihires - acquisitions that value a company for its team. During the 2013-2014, median acquisition prices increased by 50% in less than a year, from $36m to $54m.

Startup 327

Startup Marketing Acquisition Technology 327

SaaStr

AUGUST 26, 2022

So they remain uncommon, even as some startups are under runway stress, etc. #2. 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. They’d rather pass.

Pricing 327

Pricing Social Media B2C Startup 327

SaaStr

AUGUST 1, 2022

If as a VC you invested at $10m pre initially, and say it’s 2021 and that same startup is doing a 100x round at a $300m valuation, this early VC fund can pick and choose whether to invest more or not. And the price is 30x higher, so anything but a huge check won’t really move the needle on ownership. for reserves.

Venture Capital 335

Venture Capital Startup Investment Pricing 335

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 324

Pricing Scale Enterprise Onboarding 324

SaaStr

SEPTEMBER 9, 2024

When I look across my investment portfolio for past 11 years , the #1 issue I think isn’t pricing, or TAM, or making a terrible mishire, or competition. Parker Conrad, founder CEO at Rippling, has done a great job including at SaaStr Europa talking about building compound startups. In an ideal world, many of us would do just that.

Startup 303

Startup SaaS Investment Enterprise 303

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 271

AI Artificial Intelligence Pricing SaaS 271

Tom Tunguz

JULY 11, 2024

3x as productive as humans, which would parallel mechanical robots, how does a software company price? Building on yesterday’s post , pricing in software companies may change significantly when AI agents become the norm. This would be a significant increase in price, but the value of the software would be much higher.

AI 240

AI Pricing Software Compensation 240

SaaStr

APRIL 10, 2023

However, what many businesses may overlook is the startup segment. Often, startups are lumped in with small businesses, yet this approach fails to recognize what motivates and attracts these early-stage companies. Why Seek Out Startups? How is it that you want to sell to startups differently than the rest of your customer base?”

Startup 273

Startup Scale SMB Venture Capital 273

SaaStr

NOVEMBER 14, 2022

Dear SaaStr: Should I Buy My Stock Options After Leaving a Startup? As a start-up employee: You can’t possibly have enough experience or information to know if you should exercise or not; Even if the company is doing well — is the price too high? The post Dear SaaStr: Should I Buy My Stock Options After Leaving a Startup?

Startup 286

Startup Pricing Revenue SaaS 286

SaaStr

MARCH 7, 2025

There is a time and place for experienced executives, but early stage startups often arent one of them especially true for experienced CFOs. It is an expensive mistake MANY startups make they go for the big experienced executive (or they inflate someones title) and then that person wants to hire too big of a team for the companys stage.

Scale 317

Scale Finance Headcount Leadership 317

SaaStr

APRIL 6, 2023

Dear SaaStr: How Do VCs Value Startups? The very best startups will be able to raise at higher than 10x ARR. No matter the price or how early or late. worth image from here ) The post Dear SaaStr: How Do VCs Value Startups? Valuations in venture have never varied more in SaaS than now. appeared first on SaaStr.

Startup 282

Startup Metrics Investment Pricing 282

SaaStr

MARCH 29, 2024

So this CEO really wanted to buy a startup at around $10m ARR, that actually wasn’t remotely close to #1 in the space, and wasn’t growing anymore. Is a SaaS startup at $10m ARR growing basically 0% objectively worth $80m today? No VC would touch this startup for a Series B round. But barely growing at all.

Pricing 296

Pricing Scale Startup Acquisition 296

SaaStr

JANUARY 16, 2023

Most salespeople will succeed somewhere … but fail at >your< specific startup. Earlier stage startups: – Have no brand – Have no/little training – Have very few resources. Most important is making sure they will thrive at your startup. They’ve never really sold at your price point.

Sales Hiring 328

Sales Hiring Startup Underperforming Technical Team Branding 328

SaaStr

MAY 27, 2022

Notwithstanding the drama in the public markets, most SaaS companies and startups are growing faster than ever. #6. 59% of you have raised prices this year. I think most of us have found our pricing is more elastic than we thought. On average, you got a 33%+ boost in revenue when you hired your first VP of Sales.

Sales Hiring 339

Sales Hiring Pricing Scale Interviewing 339

SaaStr

OCTOBER 30, 2024

And there is bad behavior all over the place on these imploding startups. Because VCs not only meet hundreds of startups a year, but they also get probably thousands of random inbounds asking for investment. And that means that 99 percent of startups can’t even raise venture capital. It is not just Theranos.

Venture Capital 314

Venture Capital Software Review Investment Startup 314

SaaStr

JANUARY 28, 2025

The company realizes that the startup space is highly competitive in terms of speed, and therefore, they need to execute extremely fast. The most successful startups are those that resonate with customers and succeed in taking budget from existing solutions without being compared to them, as they offer something new and better.

AI Search 244

AI Search AI Artificial Intelligence Technical Review 244