Fresh Insights

Analyses, Musings & Observations

Don’t obsess over ACV

Average Contract Value is (“ACV”) is a vanity metric that is a byproduct of your business model, not a driver of it. It shouldn’t be put on a pedestal. Here is why: The world’s biggest and best software companies tend to have smaller ACV’s. Below is a data set of 56 publicly traded SaaS companies…
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A long road to SaaS success

You probably won’t be a success from day 1. Most founders struggle and may even come close to failure (more than once). The good news: there are plenty of examples of companies that had setbacks along the way, but were still a great success. Docusign is one such success story. Docusign went public in 2018…
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Are startups for the young?

Are startups a young man’s/woman’s game? No. We have made 24 investments of which 5 of them have CEO’s who are over 45 with families.  That said, being young is definitely an advantage:   You don’t need much money.  At the early stage of a startup you’re probably on a low or even no salary. …
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Good LTV and CAC trends in B2C

The most important metrics for B2C companies are customer acquisition cost or “CAC” and life time-value or “LTV”. The first measures the cost of acquiring the customer while the second measures the profits of the customer over it’s life with you. We found only 5 public companies that disclose real detail about the metrics, but…
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the right way to drive SaaS upsells

If you’re depending on your customer base to add users as a way to drive upsells, you’re doing it wrong. Here’s why:   Charge based on value, not seats. You shouldn’t be charging the customer based on the number of seats/users they have on your platform. You should be charging based on the value and ROI you’re generating…
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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…
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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…
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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…
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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…
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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…
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