How to Make Pretty Charts


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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"

A SaaS History Lesson – The First SaaS Company’s Exceptional Journey


This post is by Tomasz Tunguz from Tomasz Tunguz


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The first SaaS startup started as a packaged software company. After selling floppy disks and CD-ROMs of expense software in computer software stores, the company changed models for the first time, and sold software licenses directly to enterprises. The company went public on this model in 1998. But soon after the crash of 2001, the startup’s market cap totaled only $8M. So the business evolved again and became a pure SaaS business, selling software accessible to anyone with a browser.

A SaaS History Lesson – The First SaaS Company’s Exceptional Journey


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




The first SaaS startup started as a packaged software company. After selling floppy disks and CD-ROMs of expense software in computer software stores, the company changed models for the first time, and sold software licenses directly to enterprises. The company went public on this model in 1998. But soon after the crash of 2001, the startup’s market cap totaled only $8M. So the business evolved again and became a pure SaaS business, selling software accessible to anyone with a browser. Thirteen years later, the company generated more than $600M in annual revenue in 2014 and sold to SAP for $8.3B in the largest ever SaaS acquisition, and it is one of the very few SaaS companies ever to achieve both positive revenue and cash flow break-even. That company is Concur, the travel and expense business. SaaS history isn’t very long. But Concur’s story stands out as a seminal
Continue reading "A SaaS History Lesson – The First SaaS Company’s Exceptional Journey"

How Important Is It For a SaaS Startup to be Profitable?


This post is by Tomasz Tunguz from Tomasz Tunguz


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The Information reported last week that in 2014, only 11% of tech IPOs in 2014 were profitable when they became publicly traded companies, an all time low stretching back to 1980, when the figure was 88%. This raises the seemingly absurd question, how important is it to be profitable for a startup? After all, growth is the largest determinant of valuation at IPO, not profitability. Only 19 of the 48 publicly traded SaaS companies in the basket I track have ever recorded a financial year with a positive net income.

How Important Is It For a SaaS Startup to be Profitable?


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




The Information reported last week that in 2014, only 11% of tech IPOs in 2014 were profitable when they became publicly traded companies, an all time low stretching back to 1980, when the figure was 88%. This raises the seemingly absurd question, how important is it to be profitable for a startup? After all, growth is the largest determinant of valuation at IPO, not profitability. Only 19 of the 48 publicly traded SaaS companies in the basket I track have ever recorded a financial year with a positive net income. As the chart above shows, the median publicly traded SaaS company, marked in red, never achieves positive net income. There are a handful of outliers who have sustained positive net income for a while, but they are very few. Only 3 companies of the 48 have more positive net income years than negative net income years. However, cash flow Continue reading "How Important Is It For a SaaS Startup to be Profitable?"

Measuring Bookings, MRR, Revenue and Cash for Your SaaS Startup


This post is by Tomasz Tunguz from Tomasz Tunguz


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Yesterday, I met with a bright, young SaaS entrepreneur who asked me to clarify four key numbers for SaaS companies: bookings, monthly recurring revenue, recognized revenue and cash collections. These four numbers are critical to understanding the health of a SaaS startup, and they can be quite different, so it’s important to have a strong grasp on the distinctions between them. MonthJanFebMarAprMay…Jan ACV Bookings12,000 Monthly Recurring Revenue (MRR)1,0001,0001,0001,0001,0000 Recognized Revenue5161,0001,0001,0001,000484 Cash Collections3,0003,000

Measuring Bookings, MRR, Revenue and Cash for Your SaaS Startup


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Yesterday, I met with a bright, young SaaS entrepreneur who asked me to clarify four key numbers for SaaS companies: bookings, monthly recurring revenue, recognized revenue and cash collections. These four numbers are critical to understanding the health of a SaaS startup, and they can be quite different, so it’s important to have a strong grasp on the distinctions between them.
MonthJanFebMarAprMayJan
ACV Bookings12,000
Monthly Recurring Revenue (MRR)1,0001,0001,0001,0001,0000
Recognized Revenue5161,0001,0001,0001,000484
Cash Collections3,0003,000

Let’s consider a hypothetical SaaS startup called RedRocket, which sells software for $12k per year, and asks its customers to pay each quarter. On the 15th day of January, one customer agrees to pay RedRocket $12k for a one year contract. The startup doesn’t sell any more software for the next twelve months. The table above Continue reading "Measuring Bookings, MRR, Revenue and Cash for Your SaaS Startup"