Startup Best Practices 17 – Strategic Planning Using Your Startup’s Fundamental Equation


This post is by Tomasz Tunguz from Tomasz Tunguz


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“What is the one equation that describes our business?” asked Scott, our new director at Google, during one of our first meetings. I had been there only for a few quarters, so I was startled when he asked. I had never viewed our business this way, but after he asked the question, I wondered why I hadn’t. It seemed obvious in retrospect. What started as a simple question became a complex and insightful exercise.

Startup Best Practices 17 – Strategic Planning Using Your Startup’s Fundamental Equation


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




“What is the one equation that describes our business?” asked Scott, our new director at Google, during one of our first meetings. I had been there only for a few quarters, so I was startled when he asked. I had never viewed our business this way, but after he asked the question, I wondered why I hadn’t. It seemed obvious in retrospect. What started as a simple question became a complex and insightful exercise. Over his first week or so, through many interviews like mine, Scott developed that equation for AdSense and it filled a whiteboard. I’ve reproduced it above in a simplified form. Scott plied the equation to grasp how the business worked. He refined and polished the equation, until he identified all the contributing parts to revenue. These questions led him to understand historical product development decisions, advertiser and publisher policies and the values of the company.
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How We Bootstrapped A SaaS Company To 4 Million Users — And Why Google Owes Us €400,000


This post is by Michael Hollauf,Till Vollmer from SaaS – TechCrunch


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IOU At 7 PM on February 7, 2007, MindMeister went live in private beta. Today, we have almost 4 million users worldwide, and have become the market leader in online mind mapping. It’s a story we haven’t told often (too busy working, I guess), but we think it has a few valuable lessons for SaaS founders, especially the ones interested in bootstrapping a profitable business. Read More

What 10x More Seed Capital Means for Founders


This post is by Tomasz Tunguz from Tomasz Tunguz


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Today, 70% of startups in the US that raise a Series A have raised a seed round. That’s up from 50% ten years ago. In the same period, the amount of seed capital invested in the US has increased about 10x from $200M per year to $2B. What does this imply for early stage founders? First, it implies greater competition at the Series A. Larger seed rounds enable a seed stage company to achieve more - more growth, more revenue, more hiring.

What 10x More Seed Capital Means for Founders


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Today, 70% of startups in the US that raise a Series A have raised a seed round. That’s up from 50% ten years ago. In the same period, the amount of seed capital invested in the US has increased about 10x from $200M per year to $2B. What does this imply for early stage founders? First, it implies greater competition at the Series A. Larger seed rounds enable a seed stage company to achieve more - more growth, more revenue, more hiring. In addition, these larger seed rounds enable successful startups to raises larger series As, and the data supports it. The correlation coefficient between seed round size and Series A size in the Crunchbase data set is 0.89 across all startup sectors. That’s not to say there’s a Series A crunch, where a surfeit of seed companies are vying for a small pool of Series A capital. Series
Continue reading "What 10x More Seed Capital Means for Founders"

Data Network Effects in SaaS Enabled Marketplaces


This post is by Tomasz Tunguz from Tomasz Tunguz


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SaaS Enabled Marketplaces benefit from a unique advantage in their go-to-market. They have a panoptic view of their market place, which over time provides them an unassailable competitive advantage. SEMs provide software to suppliers and consumers, and then make a market between them. The first SEMs flourished in advertising. Google manages one of the world’s largest advertising market places. They provide software to publishers, the supply side, which manages available ad inventory with a product called DoubleClick for Publishers, or DFP.

Data Network Effects in SaaS Enabled Marketplaces


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




SaaS Enabled Marketplaces benefit from a unique advantage in their go-to-market. They have a panoptic view of their market place, which over time provides them an unassailable competitive advantage. SEMs provide software to suppliers and consumers, and then make a market between them. The first SEMs flourished in advertising. Google manages one of the world’s largest advertising market places. They provide software to publishers, the supply side, which manages available ad inventory with a product called DoubleClick for Publishers, or DFP. In addition, Google provides the demand-side inventory system, AdWords, to help advertisers manage their budget. In between, Google operates an advertising marketplace, AdX. Today there are an increasing number examples of SEMs including StyleSeat (beauty), Zenefits (benefits), Quartzy (lab management), Makeable (manufacturing), Yardbook (landscaping), Joist (construction), among others. Because SEMs deploy SaaS to both the supply side and the demand side, these companies can develop an exceptional understanding of Continue reading "Data Network Effects in SaaS Enabled Marketplaces"

Finding SaaS Product-Market Fit


This post is by Joel York from Chaotic Flow by Joel York


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saas product market fitFinding product-market fit is a central, early stage challenge of every startup. SaaS startups, however, have unique advantages. Unlike consumer Internet products, SaaS products are essential business tools. SaaS customers take them very seriously. SaaS customers want to provide feedback and they want to see that feedback acted upon in a timely fashion. In other words, SaaS customers want product-market fit as much as the SaaS vendor. Unlike offline B2B products, the SaaS product creates an always-on connection between the SaaS company and the SaaS customer. By leveraging that connection, the process of getting and acting upon SaaS customer feedback can be automated and accelerated.

This is the fourth post in a series that explores the importance of SaaS customer alignment. Previous posts in the series have focused on establishing SaaS customer alignment throughout the SaaS customer lifecycle, creating a list of SaaS Customer Alignment Tips along the way. This post continues that list, but take us back to the earliest and arguably most important stage of SaaS customer alignment: finding SaaS product-market fit.

Try, try, try again

There have been many great books and articles written on the topic of product-market fit. Surprisingly though, you are unlikely to find any better advice than Continue reading "Finding SaaS Product-Market Fit"

Data Design Patterns – The Building Blocks of a Data Driven Culture


This post is by Tomasz Tunguz from Tomasz Tunguz


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In 1977, a British polymath named Christopher Alexander, who studied Math and Architecture at Cambridge and was awarded Harvard’s first PhD in architecture, published a book titled A Pattern Language: Towns, Buildings, Construction. This book would transform the architecture world, and more surprisingly, forever influence the way computer scientists write software. A Pattern Language prescribed rules for constructing safe buildings, from the layout of a region of 8M people, to the size and shape of fireplaces within a home.

Data Design Patterns – The Building Blocks of a Data Driven Culture


This post is by Tomasz Tunguz from Tomasz Tunguz


Click here to view on the original site: Original Post




Peter Kogler Bends Space with Lines In 1977, a British polymath named Christopher Alexander, who studied Math and Architecture at Cambridge and was awarded Harvard’s first PhD in architecture, published a book titled A Pattern Language: Towns, Buildings, Construction. This book would transform the architecture world, and more surprisingly, forever influence the way computer scientists write software. A Pattern Language prescribed rules for constructing safe buildings, from the layout of a region of 8M people, to the size and shape of fireplaces within a home. Today, A Pattern Language still ranks among the top two or three best-selling architecture books because it created a lexicon of 253 design patterns that form the basis of a common architectural language. A decade after A Pattern Language was published, Kent Beck and Ward Cunningham, two American software engineers, presented the paper “Using Pattern Languages for Object Oriented Programs” that reshaped Alexander’s ideas for computer programming. Continue reading "Data Design Patterns – The Building Blocks of a Data Driven Culture"