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The Four Stages of Sales Compensation Structures in Early Stage Startups

Your startup is just getting off the ground. You might have a few account executives and a sales leader in place; maybe some revenue and a handful of customers. The sales team costs real money, and the question before the company is: how do know what quota plan to assign to the account executives?

November 27, 2018

Going Out on a Limb and Spend to Grow

SaaS entrepreneurs have to go out on a limb and spend to grow. That’s a fact of the SaaS world. At the same time, spending before revenues come in and investing in growth is a big risk, and it requires tight discipline, like walking on a narrow balance beam requires tight discipline not to fall off. Only the top companies manage to stay the course of investing for growth and the tight discipline of operational efficiency and productivity. Benchmarking is a great stabilizer on that balance beam between the risk on one side of over investing without results and the risk on the other side of not investing enough and choking your growth.

November 20, 2018

Scaling SaaS Company Value

A really smart and experienced investor said to me the other day that with these 3 things, he could absolutely increase any SaaS company value (and would invest in doing so): 1) The right operational data about the company and good, comparable benchmarks 2) Intelligent interpretation of the data, especially around go-to-market 3) Improved business processes focused on leapfrogging the gap between the company’s operating performance and benchmarks.

November 16, 2018

Startup Scaling | Overcoming 5 Key Operational Challenges

Scaling a startup from zero to $100M is 10% strategy and 90% execution. You’d never know that from reading the Web, because the advice you’ll find online is 90% related to strategy and 10% related to execution. This is the second post in a series that explores the challenges of scaling a startup through rapid growth and presents some tips and tricks I’ve learned over the years to smooth out what is an inherently bumpy ride. The first post in this series entitled Startup Business Growing Pains | Staying Focused examined the challenge of maintaining strategic focus amongst the chaos of scaling a startup. This second post leaves the 10% of strategy behind to explore five key startup scaling challenges commonly encountered in the softer, messier 90% of execution.

November 13, 2018

SaaS Cash Management – Critical Factors Affecting Cash Burn

Every vendor, from early to enterprise stage, must have a laser focus on SaaS cash management in order to survive. The lag times caused by the subscription payment model, PLUS the intense customer acquisition growth pressure in order to succeed in the market, makes cash burn tough to manage.

November 9, 2018

SaaS Product Marketing | Upgrade and Upsell Strategy

Hunting is not just for acquiring new customers. If an existing SaaS customer has a value gap that can be closed by an upgrade or upsell strategy, then you should hunt it down and sell it.

November 6, 2018

The Economics of Professional Services for Private SaaS Vendors - Take 2

Despite large variances in professional services metrics, public SaaS companies have all achieved a milestone of financial success in order to raise funds on the public markets. OPEXEngine’s benchmarking shows that a company’s professional services strategy is specific to their overall product and market strategy, which varies among companies. There are several models that we tend to see among private SaaS B-2-B vendors.

November 1, 2018

How the Economics of Professional Services Have Changed in Software

A founder asked me recently if there were any trends in the economics of professional services across public SaaS companies. I had examined the gross margins and share of revenue from professional services about 3 years ago. Professional services are consulting fees software companies charge to customers for software configuration, customization and education. What has changed over the past 3 years?

October 30, 2018

What’s Dropping? The Salary Component of SaaS Operating Expense

The OER (Operating Expense Ratio – ratio of operating expense to revenue) is a traditionally viewed as a measurement of efficiency. It can be translated to mean the dollars required to produce one dollar of revenue. Typically, that dollar of operating expense was 90 percent payroll components.

October 25, 2018