Some SaaS companies still have the pricing strategy that their founder picked after a thirty minute whiteboarding session five years ago; those startups subist but rarely thrive.
After fifteen years of running Logikcull, a Series B legal tech startup (and OpenView portfolio company), I’ve learned a lot about the art and science of pricing, particularly when I transitioned Logikcull from a managed service to software-as-a-service. As a SaaS company, it is crucial to prioritize finding a pricing model that aligns with both your broader mission and customer demand as soon as possible. You need to constantly test pricing schemes and remain open to further pivoting even after you’ve landed on a successful strategy.
If We Didn’t Pivot from Service to SaaS, Someone Else Would
In 2004, Logikcull was a highly profitable services company that streamlined legal discovery by processing and packaging data from customer hard drives. After seven years of
When we published the results of the freemium survey earlier this year, we noticed respondents targeting the enterprise observed higher net dollar retention and lower churn than those startups targeting other segments. I wondered if we could observe any other patterns about enterprise businesses, so I produced this analysis of public companies with ACVs (annual contract values) of $100k or greater.
In the series of charts that follow, the red bars indicate the value of the metric during the year of IPO. And the blue dashed line is the median.
Revenue growth at IPO spans quite a wide range from FireEye’s 148% to Financial Engine’s 19%. The median is 70%, which is consistent across all other modern software companies at IPO.
Gross margins are also span the gamut from 79% to 34%. These distributions indicate that there’s no clustering as a result of a higher price point. However, in
I remember the first customer I lost due to not showing up in person. They were a Fortune 50 customer. We did a CSAT survey, and every user loved us. The implementation was flawless. There were zero issues. And … we lost them at renewal.
Our buyer was kind enough to call us and explain why. “Well, your competitor was in the office last week, and just convinced us that …”
Ugh. We’d done everything “right” … except … We’d never even visited.
I hear this story now time and time again. Here are a few from a recent LinkedIn post I did on the matter:
You can see from both my subsequent experience, and all the comments on the post in this thread, that I was hardly alone.
You already know this. If you show up, you close faster
It isn’t as radical change as it seems, but direct listings will become much more common.
Now we have 2 big successes (Spotify + Slack), and 0 failures here.
In the Age of the Unicorn, more and more start-ups will raise IPO levels of capital before an IPO. This is a new phenomenon, relatively speaking.
Assuming their burn rate is also low, and the brand is strong enough to jump start liquidity without an IPO … why sell any primary shares and take the dilution from a traditional IPO?
There’s no reason anymore, in many cases.
AMAZING execution today on the Slack direct listing. $WORK closed within 1% of the initial open pricing (compared to 50-100% recent mis-pricings with standard IPO). Congrats to Slack, Morgan Stanley (advisor to DMM), and Citadel (DMM). Well done.
Ep. 243: Sara Varni is the CMO @ Twilio, the company building the future of communications allowing you to engage customers like never before on voice, SMS, WhatsApp or Video. Prior to their IPO in 2016, Twilio had raised over $250m in VC funding from some of the best in venture including USV, Bessemer, Salesforce, and Techstars just to name a few. As for Sara, prior to Twilio she spent 10 years with Salesforce in numerous roles including SVP of Marketing for Salesforce’s Sales Cloud and CMO @ Desk.com, among other roles. If that wasn’t enough, Sara is also an advisor @ Anthos Capital.
Now that we’re done with SaaStr Europa 2019 — which was truly amazing — we’ve added a new, special event to bridge the gap between Europa and 2020 Annual.
It’ll be 2+ stages and 100+ Braindates that just give you the playbook.
Nothing more, nothing less.
How to Get More Leads.
How to Build a World-Class Sales Team.
How to Make Customer Success Work at Scale.
How to Scale a Demand Gen Team.
How to Go Upmarket, Faster.
How to Go More Viral.
How to Do ABM for Real.
How to Spend to Grow — The Right Way.
We’ll have CROs and CMOs and CSOs from Brex, Flexport, Talkdesk, PatientPop, Trip Actions, Slack and dozens of other leaders in SaaS. Teaching you how really to do it. And doing mentorship sessions as well.
No firesides. No fluff. Just the playbook
In the last few years, user onboarding has become increasingly popular. But like everything else, things change over time. The “traditional” user onboarding flows and walkthroughs don’t work anymore. For the modern user, they’re overwhelming and unnecessary.
The main reason why a lot of people skip steps and walkthroughs is that they want to explore the product on their own. So, what does the next era of user onboarding look like?
Well, I believe that user onboarding 2.0 is going to be subtle and non-predictive.
By “subtle” I mean that the user onboarding flow will not start until the user decides they want it to. And no, I’m not talking about “click here to start a product tour.” I’m talking about triggered and driven in-app experiences that are shown based on the user’s behavior.
In other words, while the user is exploring the product on their own, short
Gartner's 2019 Current and Emerging Technologies in Sales is making the rounds on LinkedIn.
I’ll be honest, I spent quite some time trying to grok what it was saying. I’m more of a numbers person than a visual learner, so I made a bit of a remix. I thought I’d share it here to get the community’s feedback.
First, I spreadsheet'd their data out by adoption, current ROI, and future importance. I used distance to center to measure Deployment Level (1-9 scale) and followed their size and color key for Current ROI and Future Importance (1-3 scale).
The Tech Stack Adoption Lifecycle
Next, I overlaid Gartner’s Deployment Level with the familiar Technology Adoption Lifecycle (aka Chasm chart). Where the farther right, the more highly adopted a technology is. Two things jumped at out at me right away.
Account-Based Marketing more highly adopted than CRM? Customer Success