Software companies spend more on R&D (research & development) & less on Sales & Marketing (S&M) as a per cent of revenue today than six years ago.
Five Pillars of PLG with Carilu Dietrich
During October, Tomasz Tunguz held Office Hours hosting Carilu Dietrich, marketer and advisor at Atlassian to discuss how to successfully run a PLG program. Dietrich shared the 5 pillars in this guest post from Tomasz Tunguz.
The Fifth SaaS Correction
Since 2016, public software has witnessed four corrections. We’re in the midst of the fifth. This guest article from Tomasz Tunguz explains how corrections affect company valuations, and it affects private SaaS companies and their valuations.
The Feedback Loops in Data that Will Change SaaS Architecture
According to Tomasz, there hasn’t been an architectural shift in SaaS since the advent of the multi-tenant database, which allowed SaaS companies to put all of their data across customers on a single database. This may be the next shift.
This guest post from Tomasz Tunguz explains the innovation and implications of having two feedback loops: 1) influencing customers and users, and 2) outputs data products and insights that are then fed into the data warehouse layer for downstream consumption.
The Need for Two Types of Payback Period Calculations
Two accounts have identical twelve-month contracts except for the payment terms, how should you calculate the payback period? Read this guest post to learn why there is a need for two metrics to exist – a cash-flow-based months-to-repay and an accrual accounting metric.
How to Predict the Forward Multiple of a Software Company
High growth software companies are valued based on forward revenue multiples. But, how does the market set the multiple? What predicts the forward multiple, or correlates with it?
Tomasz Tunguz explains how to calculate and predict revenue growth, sales efficiency, and the forward multiple of a SaaS or software company.
Can You Still Make Money Starting a SaaS Company?
Where is the SaaS world relative to how far it can go? With valuations of as-a-service companies and all-time highs or close to it, and more and more startups leveraging this model to serve an ever-larger number of consumers, I wondered how much more business is there to capture? Let’s try to estimate. We do […]
Simpson’s Paradox in Measuring Net Dollar Retention Rate
Net Dollar Retention is one of the most important metrics is a SaaS business. It measures the value of a cohort of customers over time including expansion, cross-sell, and churn (loss of revenue). But how do you measure NDR? Imagine this is your company’s data. The first column is the cohort month for each cohort […]
100k+ ACV SaaS Companies: Do Their Metrics Differ from Other SaaS Companies?
When we published the results of the freemium survey earlier this year, we noticed respondents targeting the enterprise observed higher net dollar retention and lower churn than those startups targeting other segments. I wondered if we could observe any other patterns about enterprise businesses, so I produced this analysis of public companies with ACVs (annual contract […]
How Would You Manage Your Business Differently if Shelter-in-Place Lasted 18 Months or More?
If the shelter-in-place order were to remain in place for another 12 months, how would you change the way you run your business? Over the past two months, CEOs and founders have managed the turbulence imposed by the coronavirus onto their companies. Most of the time, we’ve implemented short-term plans. This week, the first companies […]
Questions About Returning to Work
When will a start up’s management team feel comfortable telling employees they’re safe to return to work? Is it when the government declares it safe? Or schools re-open? Or customer prospects agree to meet in person? Or when we each record a positive antibody test? How will we conduct meetings? With masks and gloves? What […]
Product Launches Become the Operating Cadence of a Startup
In November 2019, two spectacles occurred. The first is Dreamforce, Salesforce’s annual event and the largest software conference in the world. The second is Elon Musk announcing the Tesla Cybertruck. Benioff and Musk use these events strategically. They engender an operational cadence to Salesforce and Tesla. There’s no feeling like launch day. It’s the day […]
