Frequently Asked Questions


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Do you accept guest posts? Sorry, I don’t. May I use one of your charts? Yes, if you link back. Thanks! How do you make your charts? With R and ggplot2. There are instructions here. May I advertise on your site? Sorry, I don’t run ads. May I copy your content? Feel free to use the first 2-3 sentences of a post, but please do not copy the entirety.

Frequently Asked Questions


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Do you accept guest posts?
Sorry, I don’t. May I use one of your charts?
Yes, if you link back. Thanks! How do you make your charts?
With R and ggplot2. There are instructions here. May I advertise on your site?
Sorry, I don’t run ads. May I copy your content? Feel free to use the first 2-3 sentences of a post, but please do not copy the entirety.

Startup Best Practices 4 – Managing Monkeys


This post is by Tomasz Tunguz from Tomasz Tunguz


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You’re walking down the hallway at work from one meeting to the next. A colleague or report stops you en route, asks for a minute and presents an important problem. It’s easy to respond with “let me think about it” and duck into the meeting. In that half-second, all the responsibility of the decision has been transferred. Unlike a minute ago, you have the monkey on your back. The challenge with these situations is two-fold.

Startup Best Practices 4 – Managing Monkeys


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




You’re walking down the hallway at work from one meeting to the next. A colleague or report stops you en route, asks for a minute and presents an important problem. It’s easy to respond with “let me think about it” and duck into the meeting. In that half-second, all the responsibility of the decision has been transferred. Unlike a minute ago, you have the monkey on your back. The challenge with these situations is two-fold. First, you’re unlikely to have enough information to make a decision. Second, no time has been allocated to solving the problem. Multiply this event by 3 or 4 times per day, every working day, and it’s easy to see why these hallway conversations create massive bottlenecks in organizations. Everyone is talking but no one is deciding or acting. Organizational inertia sets in and the company’s rate of execution grinds to a halt. William Oncken, Jr, Continue reading "Startup Best Practices 4 – Managing Monkeys"

Revenue per Employee Benchmarks of Billion Dollar Companies


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One way of measuring the efficiency of a company’s revenue model is to benchmark revenue per employee. Google and Facebook, the two most efficient companies, generate $1M per revenue per employee per year. Setting aside those exceptional cases and focusing instead on SaaS companies, the typical average revenue per employee is about $190k to $210k per year. The histogram above shows the ranges for publicly traded SaaS companies. In the scatterplot above, which compares revenue per employee to revenues (in log10 scale), the outliers pop out.

Revenue per Employee Benchmarks of Billion Dollar Companies


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




One way of measuring the efficiency of a company’s revenue model is to benchmark revenue per employee. Google and Facebook, the two most efficient companies, generate $1M per revenue per employee per year. Setting aside those exceptional cases and focusing instead on SaaS companies, the typical average revenue per employee is about $190k to $210k per year. The histogram above shows the ranges for publicly traded SaaS companies. In the scatterplot above, which compares revenue per employee to revenues (in log10 scale), the outliers pop out. Financial Engines (FNGN) is the most efficient publicly traded SaaS company at $500k in revenue per employee and LifeLock isn’t far behind. Salesforce (CRM) and LinkedIn (LNKD) are much closer to the average range while other darlings like WorkDay (WDAY) and Tableau (DATA) are close to $100k. Revenue per employee isn’t a leading indicator of success, but a lagging one. It’s also a composite Continue reading "Revenue per Employee Benchmarks of Billion Dollar Companies"

The 10 Most Important Metrics in a Startup’s Financial Statements


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Financial statements are a Rosetta Stone for startups. They reveal the strategies and the tactics of how to bring a product to market. These are the ten metrics I look at when sifting through a startup’s operational model, whether when considering an investment or in a board meeting. Revenue growth indicates how quickly a company can grow under the current way of doing business. The top line shows whether the market affords steady growth (SaaS) or lumpy revenue growth created by the long sales cycles of big customers (Telecom) and whether the company must sell one product or a collection of complementary products.

The 10 Most Important Metrics in a Startup’s Financial Statements


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Financial statements are a Rosetta Stone for startups. They reveal the strategies and the tactics of how to bring a product to market. These are the ten metrics I look at when sifting through a startup’s operational model, whether when considering an investment or in a board meeting.
  1. Revenue growth indicates how quickly a company can grow under the current way of doing business. The top line shows whether the market affords steady growth (SaaS) or lumpy revenue growth created by the long sales cycles of big customers (Telecom) and whether the company must sell one product or a collection of complementary products. The revenue growth projections indicate the potential of the business.

  2. The Net Income, aka bottom line or burn rate if negative, is the revenue minus all the costs incurred. Net Income dictates the minimum amount a startup needs to raise to become profitable. By comparing Cash, Net Continue reading "The 10 Most Important Metrics in a Startup’s Financial Statements"

A 47 Year Old Prediction Comes True


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On January 8, 1966, the New Yorker profiled Buckminster Fuller for the first time. During a trip to a Maine island with the journalist Calvin Tomkins, Fuller said something tremendously prescient: Fuller proposed a worldwide technological revolution…[that] would take place quite independently of politics or ideology; it would be carried out by what he calls “comprehensive designers” who would coordinate resources and technology on a world scale for the benefit of all mankind, and would constantly anticipate future needs while they found ever-better ways of providing more and more from less and less.

A 47 Year Old Prediction Comes True


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




On January 8, 1966, the New Yorker profiled Buckminster Fuller for the first time. During a trip to a Maine island with the journalist Calvin Tomkins, Fuller said something tremendously prescient:
Fuller proposed a worldwide technological revolution…[that] would take place quite independently of politics or ideology; it would be carried out by what he calls “comprehensive designers” who would coordinate resources and technology on a world scale for the benefit of all mankind, and would constantly anticipate future needs while they found ever-better ways of providing more and more from less and less.
Fuller’s prediction has come true. The founders of the tech companies embody the values of the comprehensive designers and enact the changes Fuller predicted. From Google investing $100M behind Calico, a life extension research company to Khan Academy which extends high-quality education into the hands of hundreds of millions of people to Twitter which has become the Continue reading "A 47 Year Old Prediction Comes True"