Is there any reason not to do YC if I’m starting a tech company?

There is a lot of solid advice here and on the internet, and yes, use Sequoia’s template or any other as a base. But if you haven’t done it before, let me suggest a further important exercise — get it all down to ONE slide. That will force you to distill the entire deck into a 1 slide, 5-7 bullet point Slide Elevator Pitch. If this one slide is super compelling, and it can (almost) stand on its own — it will go well, or at least, as well as can be possible. If this one slide is interesting but not compelling on its own, then at least, you know where to take the narrative.  And quickly. If you can’t make one slide either compelling or at least interesting, it will be rough.  You may still get through it, but you’ll fail to put your Continue reading "Is there any reason not to do YC if I’m starting a tech company?"

What specifically do angels and VCs dislike about Y Combinator?

VCs will complain about YC valuations, but in the end, that’s silly.  Because really the market sets the price.  YC has the best track record for accelerators, so all things being equal, its top companies should have the highest prices.  And yes, they do coach their founders around the process.  That’s THEIR JOB. So maybe it’s really access VCs are most concerned about.  That VCs don’t get access to the best YC companies.  That an inner circle of VCs get preferential access, one way or another.  That there’s cherry picking happening. But … Thing is, this is true outside of YC, too. Really — more so actually outside of accelerators, if you think about it.  The best early-stage VCs all first refer their best deals to their inner circle. It’s not only natural — it’s necessary.  Small funds Continue reading "What specifically do angels and VCs dislike about Y Combinator?"

How do enterprise SaaS companies deal with late payments?

< div> Yes, in the end, you have to be willing to switch off the platform. They key is to provide a series of notices, probably at least 5-6 in a managed cadence:
  • 60 days before renewal
  • 30 days before renewal
  • 15 days before renewal
  • URGENCY right before renewal
  • RENEWAL MISSED — To avoid service interuption, please pay ASAP.  because … we’re SHUTTING YOU OFF IN 14 DAYS right after missing renewal (notice #5)
  • SECOND SERVICE INTERRUPTION NOTICE:  72 hours until service interruption.
In the end, you may have to switch it off. But as you get bigger and better, your customer success team can get more and more involved as you pass stage 5.  They’ll get the check for you if in the end, A/R doesn’t with a dedicated process like the above.  Because Customer Success — they’re compensated on avoiding churn. See Questions On Continue reading "How do enterprise SaaS companies deal with late payments?"

Is it normal for web hosts to charge $150 for data recovery of a terminated account?

< div> Unfortunately, the economics of high-churn, low-end recurring revenue products sort of favor these tactics. Products that sell semi-commodities to very small businesses tend to experience monthly churn on the 4-6% rate, sometimes even higher.  These customers can  be gone forever, in just a few months. Assuming you can acquire the customers efficiently, and your reputation is only of partial importance, it makes “sense” to:
  • Make it hard to see where to cancel.  Or e.g., make you call someone to do it.
  • Charge termination fees that may make you think twice about cancelling.
  • Try to upsell you to stuff you almost didn’t even know you purchased.
  • Don’t send you invoices unless you ask.  Getting an invoice for a product you are paying for but don’t need anymore -> cancellations.
  • Etc.
It’s yucky.  But it makes sense on a spreadsheet where churn is Continue reading "Is it normal for web hosts to charge $150 for data recovery of a terminated account?"

What is the key SaaS metric that every SaaS Company should obsess about?

< div> I’m going to suggest a slightly different take. Beyond MRR growth + managing the burn rate — which really are all that matters … you should obsess over improving every key metric and KPI. But not obsess about the baseline and absolute metrics and ratios.  First just establish your baseline, for better or worse, in each key metric.  Then once you’ve measured then, set goals of improving each at least 20% (or whatever amount) annually, with interim quarterly goals:
  • Obsess about decreasing churn.
  • Obsess about increasing deal size.  Set a goal here.
  • Obsess about increasing revenue per lead.  Get your efficiency up.
  • Obsess about growing qualified leads month-over-month, ideally in excess of your month-over-month MRR goals.
  • Obsess about increasing “net negative churn”, i.e., increasing the total revenue from all your accounts.
  • Obsess about the number of logo accounts you have, until Continue reading "What is the key SaaS metric that every SaaS Company should obsess about?"

How do VCs view the CEOs of startups who draw six-figure salaries and drive expensive sports cars when the company hasn’t made a dime and isn’t doing well? Is this common?

< div> I view them as Hopeless. The only way a start-up has any chance, at least in SaaS/B2B, is if the founders truly see everything as positive sum. You have too many people to recruit, too much of a mission to evangelize, too many customers to convince to take on your journey. Would you work for this CEO?  I wouldn’t. Maybe this works in B2C where a viral loop can lead to explosive growth irrespective of human inputs. But in SaaS/Enterprise, anything you do that creates less respect, I think is problematic. See Questions On Quora View original question on quora

How long is each venture funding supposed to last for the company being funded?

< div> I think like many venture axioms, founders get bad advice here out of good solid rules The 18-24 month rule is a good one — until it isn’t. The real answer is Until The Traction Where You Know Someone Will Write You Another, Much Larger Check. I know this is subjective, but pay attention.  Listen to what the expectations are.  Ask your current investors.  Talk to VCs you know, but that can’t invest now. Find out what it will take. And stretch your cash to get there.  However long it takes. See Questions On Quora View original question on quora