Benchmarking Netsuite’s S-1 – How 7 Key SaaS Metrics Stack Up

Founded in 1998, Netsuite is worth about $7.7B, making it the sixth largest SaaS compay behind Salesforce, LinkedIn, Workday, ServiceNow and Splunk. Netsuite began developing ERP (enterprise resource planning) tools to help companies manage their finances, expenses and supply chain. Over time, Netsuite has added a few more product lines including ECommerce platform, CRM, business intelligence and a professional services management product. In the last ten years, Netsuite has grown revenue from $18M to $556M.

Desired Outcome is a Transformative Concept

desired-outcome-transformativeOne of the most powerful concepts I’ve ever come across in business is the idea of the customer’s Desired Outcome.

And if you’re thinking “one of the most powerful concepts in business” seems like a pretty hefty charge, you’re right; this concept has transformational properties.

When I first introduced Desired Outcome, I explained that this idea came about as a simple replacement for “what does Success mean to your customer?”

But it’s SO MUCH MORE than that… let’s dig in.

Continue reading "Desired Outcome is a Transformative Concept"

What’s Really Happening in the World of Bitcoin Investment

In response last week’s post on The Fastest Growing Areas of Startup Investment in 2015, in which Bitcoin topped the list, I received many questions about the underlying dynamics of this startup segment. Which regions? Which stages? How much is going into Bitcoin companies. Using Crunchbase data, I analyzed BTC investment patterns over the past 4 years. The chart above shows that Bitcoin investment started in earnest in 2013. In 2014, total investment spiked to more than $3.

The Seeds of Churn are Planted Early

seeds-of-churn-are-planted-early“The Seeds of Churn are Planted Early” is a phrase I came up with in early 2013, published shortly thereafter, and have said and used many times since.

I wanted to go on record with that – BTW, if you see the term’s use outside of my work or that of Gainsight’s, maybe send them this link – but I also wanted to give the origin story of this powerful Customer Success concept.

It was late December 2012 when the CEO of a startup that had a major churn problem contacted me.

They were losing far more customers than they were bringing in – and they were bringing in a lot of customers – and he knew this was clearly not sustainable; I could tell he was worried.

Continue reading "The Seeds of Churn are Planted Early"

If You Chase Two Rabbits…

Founders often ask, when is the right time to expand geographically, add a second product or pursue another customer segment? Most of the time, the answer is not yet, not until the company is quite large, perhaps in the hundreds of employees and the main challenges and questions for the business have been answered well. When a startup pursues a new major initiative, the company divides all its key teams by two.

Why Consumer Startups Dominate the Megaround Market

If there’s one notion that will define the decade early 2010s in startupland, it’s the Megaround, the investments of greater than $40M in private companies. Historically, startups needed to trade on public exchanges to access sums of money from $40M to several billion. But today, the private markets are providing this capital. These billions of dollars, which amount to about half of all venture investment, skew substantially towards consumer investments.

We Must Strive to be Ourselves

As I was researching the theory behind organizational goal-setting, I came across a letter from Hunter Thompson, at the time 20 years old, writing to a friend about goals. Yesterday’s post discussed some frameworks for organizations to craft goals to maximize employee happiness and effectiveness. But Thompson’s advice is for our goals as individuals. To put our faith in tangible goals would seem to be, at best, unwise. So we do not strive to be firemen, we do not strive to be bankers, nor policemen, nor doctors.

Aligning SaaS Customer Acquisition

saas marketing - saas customer acquisition alignmentSaaS businesses can be overwhelmingly complex. If the multi-tenant, cloud-based technology isn’t enough, there’s the recurring revenue model which creates all kinds of challenges from accounting to sales compensation to funding. Then, there’s the marketing. Getting noticed on the Internet gets harder every year and almost every SaaS product category has a crowded field of competitors. And of course there is mobile, which should come first right? In my own SaaS experience, be it scaling a sales and marketing team, consulting for SaaS startups or bootstrapping my agile marketing SaaS, Markodojo, I find myself returning to a common theme that always cuts through the complexity: SaaS customer alignment.

This is the second post in a series that explores the importance of aligning the goals and actions of the SaaS customer with the goals and actions of the SaaS business. The first post in a series introduced a simple framework for understanding SaaS customer alignment and its many benefits. This post digs deeper into the challenges of achieving SaaS customer alignment in the early stages of the purchase process. Along the way, we kick-off a list of tips to help SaaS businesses improve SaaS customer alignment at every stage of the SaaS customer lifecycle.

Not Everyone Needs Your Stuff

We love our SaaS companies and we love our SaaS products. They’re our babies! But, your baby always looks cuter to you than it does to everyone else. Selling to everyone is one of the biggest causes of poor SaaS customer alignment. Some people just don’t need your stuff, and they will never appreciate the unique qualities of your baby. Selling to everyone is an ill that inflicts many businesses, not just SaaS businesses, because it is baked into the economics. When growth is the primary determinant of SaaS company value, then there is always pressure to expand your available market. Unfortunately, your available market was probably determined a long time ago when your baby was conceived. Expanding your available market generally requires a new product module, a new SaaS product or even a new business unit.

saas marketing - poor saas customer alignment

SaaS customer acquisition should focus on maximizing available market penetration, not increasing available market size, and to do that you have to have a very clear picture of your target SaaS customers. Who truly needs your stuff? Why do they need it? What do they get out of it? How many are there? And, how can you reach them? This information goes by a lot of different names: market segments, qualification criteria, pain points, buyer personae, customer profiles, use cases, etc. The important realization is that they are all the same thing in the end: tools that reinforce SaaS customer alignment. The primary difference is in the depth of data; because you tend to have more of it the deeper the SaaS customer proceeds into the purchase process.

SaaS Customer Alignment Tip #1

Create a Common Customer Understanding

saas marketing - saas customer alignment knowledgeChances are your SaaS Marketing VP has some version of market segments, buyer personae, and lead scores, while your SaaS Sales VP has some version of qualifying criteria and pain points, and your SaaS Product VP has some version of users and use cases. Do they match? Are they shared? Do they use the same language? Continue reading "Aligning SaaS Customer Acquisition"

The Best Goal Setting Frameworks

Of late, I’ve been having lots of conversations with founders about setting goals. It’s a really important topic for many founders, because it’s the way that management teams align incentives and focus an organization on a few important areas. It’s their focus that enables startups to move quickly, one of their key competitive advantages in the market. But, what is the optimal way of setting goals? I first learned about goal setting at Google, which employs the OKR (Objective and Key Result) that Andy Grove developed at Intel.