How Great Unit Economics Enables Startups to Weather the Storm – The Story of WebEx


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In the late 90s, one company changed its name five times before they settled on one which today is a well-known brand. The business started as Silver Computing in 1995, then Stellar Computing in June 1997. Six months later, the company would rebrand as next ActiveTouch Systems, then six months later to ActiveTouch Inc., and finally, six months before IPO to WebEx. WebEx went public in June 2000 with $8.

How Great Unit Economics Enables Startups to Weather the Storm – The Story of WebEx


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




In the late 90s, one company changed its name five times before they settled on one which today is a well-known brand. The business started as Silver Computing in 1995, then Stellar Computing in June 1997. Six months later, the company would rebrand as next ActiveTouch Systems, then six months later to ActiveTouch Inc., and finally, six months before IPO to WebEx. WebEx went public in June 2000 with $8.3M in revenue over the previous twelve months. After three relatively slow years, growing from $1M to $3M, the company’s revenue rocketed 7x, then 3x and the close to 2x, as the chart above shows. And churn was pretty impressive, too. WebEx retained 95% of their customers the year they went public. To achieve that phenomenal growth in 2000, the company ramped their sales and marketing investment from $2M to $9.3M to $50M from 1998 to 2000, representing
Continue reading "How Great Unit Economics Enables Startups to Weather the Storm – The Story of WebEx"

Startup Best Practices #11 – Practice Negotiations Before the Meeting


This post is by Tomasz Tunguz from Tomasz Tunguz


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My first major negotiation was a potential advertising agreement between Google and Facebook. I was PM on the social advertising team at the time. There was a call scheduled at 2pm one afternoon, and I had been told that morning about it. I’m wasn’t an experienced negotiator, so I panicked. I didn’t know how these conversations worked. I called some a few other product managers I knew inside Google, and asked their advice.

Startup Best Practices #11 – Practice Negotiations Before the Meeting


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




My first major negotiation was a potential advertising agreement between Google and Facebook. I was PM on the social advertising team at the time. There was a call scheduled at 2pm one afternoon, and I had been told that morning about it. I’m wasn’t an experienced negotiator, so I panicked. I didn’t know how these conversations worked. I called some a few other product managers I knew inside Google, and asked their advice. I downloaded a few eBooks on negotiation and took notes. When 2pm came, I dialed into the call. I’m sure the Facebook team could hear my ragged nerves over the phone. I realized a few minutes into the conversation that these 60 minutes were the first step of many. We chatted on the phone, became acquainted and sketched the outlines of a partnership that might make sense. Ultimately, and for many different reasons, Facebook chose Microsoft as Continue reading "Startup Best Practices #11 – Practice Negotiations Before the Meeting"

Which is a More Efficient Way to Build a SaaS Startup – Bottoms Up or Top Down?


This post is by Tomasz Tunguz from Tomasz Tunguz


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An entrepreneur last week asked me if bottoms up businesses are more efficient software companies than top down sales processes. Enabled by web and mobile app distribution, the bottoms up software business acquires individual users, small teams and eventually departments. The top down model sells to a C-level executive (CEO, CIO, CFO) and captures the relevant part of the organization through one sales process. Because the bottoms up processes tend to rely on seemingly less expensive customer acquisition techniques like content marketing and in-product up-sell initially, this founder suggested, quite reasonably I thought, that bottoms up companies are more efficient.

Which is a More Efficient Way to Build a SaaS Startup – Bottoms Up or Top Down?


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




An entrepreneur last week asked me if bottoms up businesses are more efficient software companies than top down sales processes. Enabled by web and mobile app distribution, the bottoms up software business acquires individual users, small teams and eventually departments. The top down model sells to a C-level executive (CEO, CIO, CFO) and captures the relevant part of the organization through one sales process. Because the bottoms up processes tend to rely on seemingly less expensive customer acquisition techniques like content marketing and in-product up-sell initially, this founder suggested, quite reasonably I thought, that bottoms up companies are more efficient. In this post, we’ll compare the efficiencies of bottoms up and top down companies across four dimensions: revenue growth, gross margin, profitability, and capital raised. I curated a bucket of companies for each category. Zendesk, Hubspot, New Relic and Tableau represent the Bottoms Up bucket. Workday, Responsys, Demandware, Taleo and
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How to Make Pretty Charts


This post is by Tomasz Tunguz from Tomasz Tunguz


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When I first started writing, I wondered how I could make charts like those in the Economist or in the New York Times, the beautifully formatted ones. After some research, I figured out how. And this post explains how you can do it, too. Many data scientists use a free open-source language called R. It’s a great tool for processing data and I use R to process all the data for this blog.

What an Acquisition of Salesforce Means for Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


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Rumors swirled yesterday that Salesforce, the $40B SaaS behemoth, had been approached by an acquirer. Dan Primack speculated this morning that Oracle and Microsoft are the likely candidates. If Salesforce were to be acquired, the SaaS ecosystem would change substantially. Looking at the market caps and the balance sheets of the major enterprise acquirers, Microsoft could certainly acquire Salesforce outright in cash. Oracle would likely acquire the business in a cash & stock transaction.

How to Make Pretty Charts


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




When I first started writing, I wondered how I could make charts like those in the Economist or in the New York Times, the beautifully formatted ones. After some research, I figured out how. And this post explains how you can do it, too. Many data scientists use a free open-source language called R. It’s a great tool for processing data and I use R to process all the data for this blog. You can download it here. Alternatively, many people use RStudio, an editor which makes R much easier to use. To make these charts, I use a library written by Hadley Wickham called ggplot2. ggplot2 has all kinds of charts: area, line, bar, etc. You can see all of them here That all sounds much more complicated than it is. To make the chart above which is a point chart of random data, just download RStudio, create Continue reading "How to Make Pretty Charts"

What an Acquisition of Salesforce Means for Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Rumors swirled yesterday that Salesforce, the $40B SaaS behemoth, had been approached by an acquirer. Dan Primack speculated this morning that Oracle and Microsoft are the likely candidates. If Salesforce were to be acquired, the SaaS ecosystem would change substantially. Looking at the market caps and the balance sheets of the major enterprise acquirers, Microsoft could certainly acquire Salesforce outright in cash. Oracle would likely acquire the business in a cash & stock transaction.
CompanyMarket Cap, $B (2015-04-29)Cash & Eq., $B
Microsoft39895
Oracle21144
IBM1729
Intel15615
SAP915
Salesforce491
VMWare387
Most importantly, the number of large market cap companies capable of acquiring substantial SaaS startups would decline. In the past ten years, Salesforce has been the second most active acquirer of next-generation enterprise companies at greater than $100M, tied with IBM and second to Oracle.
Continue reading "What an Acquisition of Salesforce Means for Startups"