The Common Characteristics of Successful Freemium Companies


This post is by Tomasz Tunguz from Tomasz Tunguz


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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 Common Characteristics of Successful Freemium Companies


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




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. So, freemium can be a huge strategic advantage in a competitive market because those companies that successfully implement freemium can scale faster and more efficiently than traditional sales-driven companies might. Successful freemium companies do three things: First, they use free to market, educate and win mindshare. The nature of sales processes is evolving as Daniel Pink eloquently argued in his book To Sell is Human. The Internet enables potential customers to research products much Continue reading "The Common Characteristics of Successful Freemium Companies"

The Impact of Varying Sales Hiring Strategies on SaaS Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


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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 Impact of Varying Sales Hiring Strategies on SaaS Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




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. In this hypothetical example, the sales people have a $350k annual quota, cost the startup $100k annually, and achieve their quota over six months with the following attainment percentages by month: 0%, 0%, 25%, 50%, 75%, 100%. The plot at the top of the post compares the MRR trajectory of these three sales strategies. No surprise that hiring the six sales people immediately grows the top line of
Continue reading "The Impact of Varying Sales Hiring Strategies on SaaS Startups"

The Common Language of Great Teams


This post is by Tomasz Tunguz from Tomasz Tunguz


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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 Common Language of Great Teams


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




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. Ten months before competition, Jimmy Spithill and his crew capsized and destroyed their $10M America’s Cup catamaran that had required twelve months to build. After overcoming that ordeal with round-the-clock shifts to build a new boat, the team found themselves down 1-8 in a race to nine points. The ultimate successes both teams achieved are glorious and unique, and that’s where most of the attention naturally flocks. But the most interesting Continue reading "The Common Language of Great Teams"

The Five Letters that Will Change the Data World: BYOBI


This post is by Tomasz Tunguz from Tomasz Tunguz


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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.

The Five Letters that Will Change the Data World: BYOBI


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




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. The monolithic solution that they had adopted, (I can’t remember if it was MicroStrategy or Cognos or BusinessObjects), satisfied the needs of the one department that had catalyzed the purchasing decision many years ago. Several years on, his team had become inundated with custom data requests that the tools failed to answer and petitions to purchase new types of software. Unfortunately, his data architecture just wouldn’t allow him to respond to those needs.
Continue reading "The Five Letters that Will Change the Data World: BYOBI"

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


This post is by Tomasz Tunguz from Tomasz Tunguz


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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.

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


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




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. At the product’s launch, free plans generate the majority of new users and eventually customers for the business and in the case of B2B companies, leads for the sales team. The positive goodwill engendered by a free product feeds word-of-mouth and the product achieves lift-off. All of this is possible because in small numbers, the marginal costs to support perpetual freeloaders are insignificant. In the past few weeks, I’ve been working with two Continue reading "Confessions of a Perpetual Freeloader: When to Jettison the Freemium Tier"