Modeling Your SaaS Startup’s Revenue Growth Effectively


This post is by Tomasz Tunguz from Tomasz Tunguz


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Once a startup has found an initial product market fit, the business must evolve the way it models its growth. Before product market fit, a startup’s financial projections focus on costs. The company has no visibility into their revenue growth. So, the management team should minimize costs, maximize cash and lengthen runway to provide as much time as possible to find that product market fit. As we’ve seen, staff are both the greatest asset of a business and also the greatest cost, at least initially, and modeling those is straightforward.

Modeling Your SaaS Startup’s Revenue Growth Effectively


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Once a startup has found an initial product market fit, the business must evolve the way it models its growth. Before product market fit, a startup’s financial projections focus on costs. The company has no visibility into their revenue growth. So, the management team should minimize costs, maximize cash and lengthen runway to provide as much time as possible to find that product market fit. As we’ve seen, staff are both the greatest asset of a business and also the greatest cost, at least initially, and modeling those is straightforward. But when a repeatable sales process seems to have been discovered, it’s time to develop the startup’s revenue forecast. Revenue forecasts accuracy won’t ever be perfect, but they do serve the purpose of communicating to the management team and the board the way a business plans to grow. Additionally, and equally importantly, revenue forecasts provide a mechanism to articulate
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Creating the Strangely Familiar


This post is by Tomasz Tunguz from Tomasz Tunguz


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In The Shape of Things to Come, the New Yorker profiles Sir Jony Ive, the man they call Apple’s greatest product. Ive is iconic. His products have been sold 1.5 billion times. For all of his success, Ive’s personality isn’t well known. Neither is his personal history. Or how he manages the Apple Design Lab. The New Yorker article reveals some of these three things. Here are some of my favorite quotes.

Creating the Strangely Familiar


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




In The Shape of Things to Come, the New Yorker profiles Sir Jony Ive, the man they call Apple’s greatest product. Ive is iconic. His products have been sold 1.5 billion times. For all of his success, Ive’s personality isn’t well known. Neither is his personal history. Or how he manages the Apple Design Lab. The New Yorker article reveals some of these three things. Here are some of my favorite quotes. On Ive’s first meetings with Jobs in 1997 Jobs visited the design studio and, as Ive recalled it, said, “F**k, you’ve not been very effective, have you?” This was a partial compliment. Jobs could see that the studio’s work had value, even if Ive could be faulted for not communicating its worth to the company. During the visit, Ive said, Jobs “became more and more confident, and got really excited about our ability to work Continue reading "Creating the Strangely Familiar"

The Three Dimensions of Content Marketing Strategy for Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


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If I were asked to create a content marketing strategy for a person or a business from scratch, I would craft a strategy with three dimensions: customer segments, customer lifecycle stage and content type. **Customer Segments: **Product managers/marketers are responsible for identifying the most important customer segments a startup will pursue. Picking the right customer segments increases profitability, maximizes market size and prioritize the most attractive customer for the business.

The Three Dimensions of Content Marketing Strategy for Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




If I were asked to create a content marketing strategy for a person or a business from scratch, I would craft a strategy with three dimensions: customer segments, customer lifecycle stage and content type. **Customer Segments: **Product managers/marketers are responsible for identifying the most important customer segments a startup will pursue. Picking the right customer segments increases profitability, maximizes market size and prioritize the most attractive customer for the business. Very few businesses target only one type of customer. Market places cater to buyers and sellers. SaaS companies may pursue small, medium and enterprise customers, many times across industry categories. Even pure consumer businesses like social networks can divide their user bases intteoateno celebrities, influencers, and the common user, for example. Content marketing efforts must reflect the core strategy of the business and prioritize the most important few segments. The content a startup produces must resonate with these target
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Challenging Your Customers During Your SaaS Startup’s Sales Process


This post is by Tomasz Tunguz from Tomasz Tunguz


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In 2009, the Corporate Executive Board, a consultancy providing expertise to some of the world’s largest companies, studied the distinguishing characteristics of great sales people and well-run sales processes. They surveyed more than 6,000 sales reps across 90+ businesses. The analysis revealed three interesting things. First, most customers don’t perceive a difference between competitive products. Over and over we found that customers, generally speaking, see significantly less difference between us and the competition than we do ourselves.

Challenging Your Customers During Your SaaS Startup’s Sales Process


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




In 2009, the Corporate Executive Board, a consultancy providing expertise to some of the world’s largest companies, studied the distinguishing characteristics of great sales people and well-run sales processes. They surveyed more than 6,000 sales reps across 90+ businesses. The analysis revealed three interesting things. First, most customers don’t perceive a difference between competitive products.
Over and over we found that customers, generally speaking, see significantly less difference between us and the competition than we do ourselves. It’s not that they think most suppliers are particularly bad on brand, product, or service. It’s just that [customers] don’t think [suppliers are] particularly different.
Second, the most important factor in a purchasing decision is internal consensus that a vendor is the right one for the job. Salespeople must engender solidarity among the group that will report their findings to the ultimate decision-maker. Third, given those two hurdles, what types of sales people
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The Data Behind the Rule of 40%


This post is by Tomasz Tunguz from Tomasz Tunguz


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In “The Rule of 40% for a Healthy SaaS Company,” Brad Feld shared a simple rule of thumb growth investors often apply to judge the attractiveness of a $50M business. “The 40% rule is that your growth rate + your profit should add up to 40%.” I was curious if this theory were broadly true, applicable for growth stage companies Brad mentioned, but also early stage companies. So, I calculated this metric, which I’ll call the GP metric in this post, for all the publicly traded SaaS companies over their lifetimes.

The Data Behind the Rule of 40%


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




In “The Rule of 40% for a Healthy SaaS Company,” Brad Feld shared a simple rule of thumb growth investors often apply to judge the attractiveness of a $50M business. “The 40% rule is that your growth rate + your profit should add up to 40%.” I was curious if this theory were broadly true, applicable for growth stage companies Brad mentioned, but also early stage companies. So, I calculated this metric, which I’ll call the GP metric in this post, for all the publicly traded SaaS companies over their lifetimes. The chart above plots the median GP metric by years since founding. I’ve added a horizontal line at 40%. The GP metric trends from 100%+ to about 30% over about 15 years. As Brad wrote, growth investors apply the 40% rule to companies with $50M+ in revenue, which is right around year five or six of most of
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