Archive of posts with tag 'SaaS'

On Markets, TAMs, and Agency

September 16, 2022 • #

If you’ve been involved in investing or fundraising activities in the past, you’ve likely heard about “TAMs” (total addressable market), as in “So what’s your TAM look like?” The general idea is to determine a metric that communicates in few words the nature of a given market for a product or service. Investors want to know how a company thinks about its market opportunity (investors generally want large ones), and startup founders need to have a sense for what they can realistically target, build for, sell to, and capture to build a business. You may also...

Stealth Objections

August 31, 2022 • #

An interesting post from Sandy on the “stealth objection”: when a customer, investor, user, employee — anyone — harbors some resistance to what you’re selling them, but doesn’t make it explicit.

My experience here is mostly in getting users to buy or adopt our product. Anytime you’re showing off what you’ve got and selling them on the concept, some objections are out in the open. “It’s too expensive”. “It doesn’t support SSO”. “I can’t integrate with X”. These ones are on the easy end of the spectrum. At least you know where you stand!


Weekend Reading: Robotic Bricklaying, Medici and Thiel, and Airtable, Roblox of the Enterprise

August 13, 2021 • #

🧱 Where Are the Robotic Bricklayers?

Brian Potter wonders why work as taxing and seemingly-mechanically simple as brick masonry is difficult to automate:

Masonry seemed like the perfect candidate for mechanization, but a hundred years of limited success suggests there’s some aspect to it that prevents a machine from easily doing it. This makes it an interesting case study, as it helps define exactly where mechanization becomes difficult - what makes laying a brick so different than, say, hammering a nail, such that the latter is almost completely mechanized and the former...

Stripe's Content Strategy

November 17, 2020 • #

Morgan Mahlock wrote recently about the promise of Stripe Press, Stripe’s book publishing outfit:

Within the legacy publishing industry, Stripe’s young publishing press is refreshing - it is Sutherland’s electric cover art on a dusty, tired bookshelf. An Authoritative Look at Book Publishing Startups in the United States by Thad McIlroy states, “Book publishing has never been a technology-adept industry; indeed it is historically technology-averse. This is a challenge for the (minority of) startups targeting existing publishing companies.” Stripe Press is different because it was born from a technology...

Weekend Reading: Guide to SaaS, a Few Rules, and Starting a Company Now

September 26, 2020 • #

📕 Stripe’s Guide to SaaS

Stripe Atlas has a great batch of guides on various parts of company-building.

📜 A Few Rules

Some great random clippings from Morgan Housel. I’m currently reading his latest, The Psychology of Money, which is great so far.

📈 The 10x Advantage of Starting a Company Now

In many markets during COVID, startups have a host of advantages over their incumbent competitors:

Consequently, growth and innovation efforts are quickly deprioritized or even fully...

Helping Instead of Selling

August 30, 2020 • #

David Skok opens this post on selling with the classic sales training mantra — customers love to buy, but hate to be sold to:

Customers hate being sold to. They don’t mind getting expert help when they want to buy something. But much of the time they are not ready to buy, and one of the most irritating things is to have a salesperson try to get them to buy when they aren’t ready. Unfortunately too many people in marketing and sales positions don’t seem to understand this, and proceed...

Churn is a Company Problem

August 21, 2020 • #

Customer success teams in SaaS are most closely associated with measuring and preventing churn in business, often even having compensation or performance metrics tied to churn rates.

We look to CS teams to identify churn early, but the project of reducing it isn’t only in their hands.

Churn is a company problem

This piece from Kyle Poyar makes the case with examples of how other teams should be participating in retention. After all, churn is only a signal of something missing about your business — the support wasn’t there, the...

Go-to-Market Fit

August 10, 2020 • #

I recently watched this Mark Roberge session where he had an interesting way of describing the challenge that follows product-market fit. Tons of startup literature is out there talking about p-m fit. And likewise there’s plenty out there about scaling, leadership, and company-building.

Go-to-market fit

One of the most fascinating stages is in between, what he calls “go-to-market fit.” This is where you’ve found some traction and solved a problem, but haven’t figured out how to do it efficiently. Here’s how you think about the...

Weekend Reading: Neutrinos and Math, Waymo Progress, and Freemium in SaaS

December 14, 2019 • #

🧮 Neutrinos Lead to Unexpected Discovery in Basic Math

As long as you consider linear algebra and eigenvectors “basic math”:

They’d noticed that hard-to-compute terms called “eigenvectors,” describing, in this case, the ways that neutrinos propagate through matter, were equal to combinations of terms called “eigenvalues,” which are far easier to compute. Moreover, they realized that the relationship between eigenvectors and eigenvalues — ubiquitous objects in math, physics and engineering that have been studied since the 18th century — seemed to hold more generally.


Second-Order Revenue

October 7, 2019 • #

In SaaS there are dozens of common metrics to measure on performance, like a pulse check on your company. Because of the often-high customer-to-revenue ratio with SaaS products, recurring revenue itself becomes a watermark metric to watch as an indicator. Recurrence leads to investing in and measuring customer success metrics, in order to keep that recursion happening indefinitely — customer lifetime value gets large with satisfied customers!

NPS, time-to-value, net retention, and customer health scores are just a few of those metrics that help give you a leading indicator...

The Magic of Recurring Revenue

September 17, 2019 • #

Any business that makes money from the same customer more than once can be said to have “recurring revenue.” But the term in the SaaS universe has a more specific flavor to it, thanks to the unique nature of the business model, value delivery, and the commitments between vendor and consumer. You may think “so what” when you hear that SaaS revenue is special or somehow better than other ways of making money; after all, the money’s still green, right? But there are a number of benefits that come with the “as-a-service” relationship between vendor and customer. Software companies fit...

Growth, Sales, and a New Era of B2B

August 12, 2019 • #

This talk from a16z’s Martin Casado covers how the market for B2B SaaS go-to-market is changing from sales-driven to a marketing-driven. We’ve been thinking a lot about this lately in the context of Fulcrum — how the “consumerization of IT” plays into how business users today are finding, evaluating, purchasing, and expanding their usage of software.

As he describes in the talk, consumer business tend toward a marketing-led GTM, and enterprise ones toward a sales-led GTM....

On Retention

July 12, 2019 • #

Earlier this year at SaaStr Annual, we spent 3 days with 20,000 people in the SaaS market, hearing about best practices from the best in the business, from all over the world.

If I had to take away a single overarching theme this year (not by any means “new” this time around, but louder and present in more of the sessions), it’s the value of customer success and retention of core, high-value customers. It’s always been one of SaaStr founder Jason Lemkin’s core focus areas in his literature about how to “get to $10M,...

Image credits: Mark Roberge, Tomasz Tunguz

Weekend Reading: Summer Solstice, Zoom Learnings, and TeachOSM

July 6, 2019 • #

📺 5 Learnings from Zoom

Zoom is one of those admirable SaaS companies built on solid product and amazing execution. I love this — not relying on anything sexy or super inventive, just solving a known problem better than everyone else. My favorite bit is their retention; it proves what can be done even in SMB with lock-tight product market fit:

Zoom has 140% net revenue retention. This is similar to RingCentral from our last analysis and other leaders. Zoom also shows that yes, this can be done with smaller customers too, not...

Weekend Reading: Calculator, SaaS Metrics, and System Shock

March 9, 2019 • #

💻 Open Sourcing Windows Calculator

Seems silly, but this kind of thing is great for the open source movement. There’s still an enormous amount of tech out there built at big companies that creates little competitive or legal risk by being open. Non-core tools and libraries (meaning not core to the business differentiation) are perfect candidates to be open to the community. Check it on GitHub.

📊 The Metrics Every SaaS Company Should Be Tracking

An Inside Intercom interview with investor...

How Investors Think About Ideas

March 4, 2019 • #

A good overview from YC’s Kevin Hale on how to break down startup ideas:

The “solution looking for a problem” trap is all too easy to fall into, and to justify your way out of even if you fall prey to it. I love the approach here of starting with the end goal ($100M ARR) and backing into what the market size and price point would need to be to hit that target. So simple, but most of us don’t approach...

Getting to 1,000

February 22, 2019 • #

I saw this tweet a couple of days back that I thought was interesting:

The topic of “how we got to 1000 users” is an interesting one I thought I could take a stab at…


Weekend Reading: Business Applications, Rays Prospects, and the Florida Panhandle

February 16, 2019 • #

👨🏽‍💻 Okta Businesses @ Work 2019

Interesting data here in Okta’s annual report. It’s clear that the way customer’s buy SaaS is very different than the “single-vendor” purchasing preferences from years past. SaaS allows businesses to buy and integrate the best-fit tools for any jobs:

We also looked at whether companies who invest in the Office 365 suite — the top app in our network — end up committing to a Microsoft-only environment, and the answer was clearly “no.” We found that 76% of Okta’s Office 365 customers have one or more...

Weekend Reading: CAC, Alexander Hamilton, and Flow

November 10, 2018 • #

🛒 What is Customer Acquisition Cost?

This is a great overview of the importance of CAC in a SaaS business.

One of the enjoyable things about SaaS is how much you can modify and optimize what you’re doing by measuring various parts of your process, especially in SMB-focused SaaS. Marketing, early-stage sales, late-stage sales, customer success — it’s like a machine with separate stages you can tweak separately to make incremental improvements.

📜 The Legacy of Alexander Hamilton

On the similarities between Hamilton and Edmund Burke:

“There are...

A Product Origin Story

September 11, 2018 • #

Fulcrum, our SaaS product for field data collection, is coming up on its 7th birthday this year. We’ve come a long way: from a bootstrapped, barely-functional system at launch in 2011 to a platform with over 1,800 customers, healthy revenue, and a growing team expanding it to ever larger clients around the world. I thought I’d step back and recall its origins from a product management perspective.

We created Fulcrum to address a need we had in our business, and quickly realized its application to dozens of other markets with a slightly different color of the...

The Power of the SaaS Business Model

February 1, 2018 • #

We’re about to head to SaaStr Annual again this year, an annual gathering of companies all focused on the same challenges of how to build and grow SaaS businesses. I’ve had some thoughts on SaaS business models that I wanted write down as they’ve matured over the years of building a SaaS product.

I wrote a post a while back on subscription models, but in the context of consumer applications. My favorite thing about the subscription structure is how well it aligns incentives for both buyers and sellers. While this alignment...

Subscription Pricing Models

September 8, 2017 • #

Since Apple changed their subscription pricing options for App Store developers back in 2016, several high-profile apps that have made the switch from fixed pricing to the subscription model. TextExpander, Day One, and Ulysses are just three that I know of and use.

I may be biased as I’ve been building and selling subscription software for years, but I love that the Apple ecosystem is supporting this now. Ulysses provides a great example: their fixed model had the price at $45 for the Mac app and $25 for the iOS app. Their new subscription is...

Software Pricing and SaaS

July 23, 2012 • #

Jeff Lawson of Twilio gave this talk on SaaS pricing at the Business of Software conference last year:

Everyone in the SaaS product business should watch this. Great approach to thinking through putting prices on your SaaS service.

The key is to understand all the facets of your product and what things cost you as the creator, in addition to slicing and dicing options for your customers to buy what they need. Facets like:

  • Quantities (How many gigabytes? What kind of bandwidth is...