Sammy is the Managing Director and Cofounder of Blossom Street Ventures. Email him directly at sammy@blossomstreetventures.comJFrog recently went public, so we did a deep dive on their prospectus. In conclusion, they’re a fantastically run company and there are a number of tidbits in their prospectus about how to run your own SaaS company. For instance, having engineers on the CS team, using CS to drive revenue, focusing on product so well that it sells itself with no outbounding, etc. A Our notes are below.
Software release paradigm. The increased pace and volume of new software and updates have made releasing software in monolithic, discrete versions (e.g., v1.0, v2.0, v3.0) too slow to adequately address dynamic customer demands. Continuous delivery is the new paradigm. Updating a feature of a software application, rather than releasing a new version of the entire application, ensures that current software is brought to market faster. Updates today are released incrementally and with greater frequency.
CS also drives revenue though. “Increased engagement with our products provides our support and customer success teams opportunities to work directly with customers and introduce them to additional products and features, as well as drive usage of our products across large teams and more broadly across organizations.” (cohort data below).
The lack of sales team is badass. “JFrog was born as a company with JFrog Artifactory as the world’s first software package management product. Importantly, we’ve never sold it. It’s always been bought, and to this day we haven’t made a single field sales outbound call to a prospective customer.”
But ARR grows due to deeper penetration. “As of June 30, 2020, 286 of our customers had ARR of $100,000 or more, accounting for 48% of our ARR. As of December 31, 2018, 131 of our customers had ARR of $100,000 or more.”
But leads are at a high. “We also generated a record number of new business leads during the second quarter of 2020, and our 2020 virtual swampUP conference attracted a record number of attendees.”
Billing in advance. “Our self-managed subscriptions are offered on an annual and multi-year basis, and our SaaS subscriptions are offered on an annual basis, with the exception of certain SaaS subscriptions, which are also offered on a monthly basis. Our self-managed subscriptions are billed primarily in advance. Our SaaS annual subscriptions are billed in advance for the minimum annual usage commitments, and if exceeded, monthly thereafter.”
Integrations matter. “We invest heavily in integrating our products with the major package technologies so that our products can be easily adopted in any development environment.”
11 patents, but innovation is what matters. “Although we rely on intellectual property rights, including trade secrets, patents, copyrights, and trademarks, as well as contractual protections to establish and protect our proprietary rights, we believe that factors such as the technological and creative skills of our personnel, creation of new modules, features and functionality, and frequent enhancements to our platform are more essential to establishing and maintaining our technology leadership position.”