Fresh Insights

Analyses, Musings & Observations

Measuring SaaS health

In software, there are a few ways to measure the health of the customer base and stickiness of the product. Zuora does a nice job of showing four measures of customer health in their S1. Processed Transaction Volume Zuora’s first measure of the overall health of the business is processed transaction volume. According to their…
Read More

First to market means nothing

First to market means nothing There are countless examples of ‘first to market’ not being a sustainable competitive advantage. Comparing the 2018 public offering of Spotify to Pandora’s original IPO in 2011 is a major example. Below are some excerpts from Pandora’s S1 (official IPO document filed with the SEC) that show its dominance at the…
Read More

Measuring SaaS Contribution Margin

Bill.com, SumoLogic, and Confluent are public SaaS companies with excellent customer performance. In their prospectus’, each of these companies was generous enough to share beautiful contribution margin data. Specifically, Bill.com shows the contribution margin of customers acquired in 2017, and SumoLogic and Confluent do it for customers acquired in 2018. It’s a very nice illustration…
Read More

Building SaaS pipeline with SDR’s

I read Trish Bertuzzi’s book ‘The Sales Development Playbook’ and it was by far one of the best sales books I’ve read in a while.  The book focuses heavily on building pipeline with SDR teams.  This is the second post of a few I’m going to share about this book: there was so much good…
Read More

Building SaaS pipeline with SDR’s

Trish Bertuzzi’s book ‘The Sales Development Playbook’ is by far one of the best sales books I’ve read in a while. The book focuses heavily on building pipeline with SDR teams. This is the first post of a few I’m going to share about this book: there was so much good information that putting it…
Read More

Net dollar retention of 73 SaaS co’s

One the most important metrics in SaaS is net dollar retention (“NDR”). It tells you what percent of revenue from current customers you retained from the prior year, after accounting for upgrades, downgrades, and churn. For SaaS businesses with annual or multi-year contracts, formulaically it’s beginning of period revenue + upgrades — downgrades — churn all divided by beginning…
Read More

Run a better board meeting

We’ve been a part of many board meetings.  Below are some of the best practices that should be adopted for a smooth and productive meeting.   Voting matters should be socialized prior to the board meeting. Don’t surprise board members with a vote they haven’t had time to think through, especially if the matter goes…
Read More

SaaS IPOs take $318mm of capital (median)

We looked at the equity and debt raised as well as remaining cash of the past 49 SaaS IPOs to determine how much net capital it took them to get to IPO. According to that data, it takes $314mm on median and $571mm on average. The average is skewed by Mcafee, Palantir, Snowflake, Dynatrace, and…
Read More

The best VC by IPO count

Last week, we published blogs showing the average ownership of tech founders and VC at the time of IPO. The dataset included 160 tech IPO’s going back years. We dug further into the data to see who the actual VC were that invested in these incredibly successful companies; there are clearly certain investors that appear…
Read More

Tech founder ownership at exit

Snapchat cofounders Evan Spiegel and Robert Murphy owned a combined 44% of Snapchat before it went public. Mark Zuckerberg owned 31% of Facebook, Sergey Brin and Larry Page owned 31% of Google, the founders of Eventbrite owned 34%, and Reed Hastings owned 24% of NetFlix. These are remarkable levels of CEO ownership upon going public/exit,…
Read More