The Common Characteristics of Successful Freemium Companies

Is there a common characteristic of successful freemium companies? Piotr asked this question earlier this week. This is the framework I’ve seen work well for freemium startups. At its core, freemium is a novel marketing tactic that entices new users and ultimately potential customers to try a product and educate themselves about its benefits on their own. By shifting the education workload from a sales team to the customer, the cost of sales can decrease dramatically.

The Impact of Varying Sales Hiring Strategies on SaaS Startups

What are the tradeoffs when considering different sales hiring plans and which is the right one for your startup? There are many different considerations in creating a sales hiring plan. Balancing them all can be tricky, but thinking through the trade-offs is important to scaling the business well. First, let’s compare the financial impact of three different sales hiring strategies: six sales people hired at once, two sales people hired for each of three quarters and one sales person hired each month.

The Common Language of Great Teams

Last week, Redpoint held our annual Founder Day gathering. At the event, I listened to the stories of Felix Baumgartner’s record breaking jump from 120,000 feet, heard about the astonishing comeback of the US America’s Cup team and took part in a creativity workshop led by a Stanford Design School professor. In short, the event revolved around doubt. Baumgartner halted the Stratos Project twice during its seven year development. Quite naturally, he was terrified of the jump from space.

The Five Letters that Will Change the Data World: BYOBI

BYOBI is an acronym I first heard on a telephone call with a VP of Technology at a large corporation. The word is almost unknown today, but I think that it will be one of the largest trends to impact data in the next five years. BYOBI means Bring Your Own Business Intelligence. This VP of Technology was struggling to enable the sales people, marketers, engineers and others within his business to access the data they needed.

Confessions of a Perpetual Freeloader: When to Jettison the Freemium Tier

I’m a perpetual freeloader. Like a houseguest who has overstayed his welcome with hundreds of people, I depend upon the generosity of strangers - in particular, software teams. I’ve used HelloFax to sign documents for years, but I haven’t paid them a nickel. The same is true for GMail, Google Docs, TripIt, TypeKit, UberConference, LogMeIn, Evernote, the list goes on. For all of these companies and products, harboring freeloaders like me is part of their growth strategy.

A Surprisingly Powerful Mechanism for Growing a SaaS Startup

One of the single most effective tools SaaS companies can use in order to grow faster isn’t tweaking the product in a particular way or implementing an AB optimization framework or adopting new marketing tactic. Rather, it’s financial judo for structuring contracts and cash collection. Cash is the lifeblood of startups. Cash empowers management teams to invest in all kinds of growth mechanisms. So, it’s no surprise that maximizing a company’s cash to invest in growth is a good thing.

What’s Wrong with the Internet of Things

At an Internet of Things conference last week, I took part in a panel in which we discussed the future of connected devices. Will simple products win or will complex products dominate in the IoT?, we were asked. I think the question misses the point and raises another problem about the Internet of Things more broadly. It’s not about Things. It’s about Services. Software-as-a-Service and Platform-as-a-Service. Simplicity and complexity are two sides of the same coin.

How the Fund Raising Market Will Evolve in 2014

Fenwick’s report on the state of the venture market and I came across these three data points that summarise one facet of the market in Silicon Valley succinctly: 11 venture backed companies raised funds at a valuation of over $1 billion in Q114, more than did so in all of 2013. Hedge and mutual funds participated in 23 venture deals through mid-April, compared to 41 in all of 2013 Investment in later stage comprised 47% of all dollars invested in Q1, while Series A investment fell to a five quarter low at 15%.

The Workplace of the Future

In this week’s New Yorker, Jill Lepore reviews Cubed: A Secret History of the Workplace, a book whose author asks the question, what is the work place of the future? The information worker is a relatively new concept. Peter Drucker coined the term in the 50s. By then companies had already developed new ways of housing information workers. The very first information workers were accountants hunched over “Bob Crachit” desks in the back rooms of factories.

The 4 Challenges Facing Customer Success Teams in SaaS Startups

Yesterday, I spoke on a panel at the Gainsight Pulse conference with Aaron Ross, the author of Predictable Revenue, Jason Lemkin of Storm Ventures who authors SaaStr, and Brian Stafford, a customer success expert from McKinsey. It was great fun to be on the panel and discuss how customer success is transforming SaaS companies by increasing revenue growth, decreasing capital needs, building better products and consequently retaining more customers. I’ve embedded my slides below.