Mattermost’s $50M Series B


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Just a few months ago, we partnered with Mattermost and led the Series A. We believe that open source applications will be an important part of the future of software because of their security, lower costs of customer acquisition and the flexibility they offer customers. Today, Mattermost is announcing a $50M Series A from Y Combinator Continuity and Battery. I’m thrilled to partner with Ali Rowghani from YCombinator and Neeraj Agarwal from Battery for the next leg of the journey. They both share the same vision of open source application software changing the enterprise landscape. Customer after customer connects Mattermost to their most important systems. Often, these systems invisible to the Internet. Security operations teams create air-gapped networks for incident response, operations teams developing workflows to fetch logs from different systems to remediate outages, and IT teams developing powerful workflows to automate inbound support tickets from their users - all Continue reading "Mattermost’s $50M Series B"

Redpoint SaaS Startup Key Metrics Template


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Over the last decade or so, I’ve compiled a metrics sheet to summarise a SaaS business. While no living document like this is ever perfect, this is currently the best board-level summary of the overall health of a business I have found. I’m sharing it so that others may benefit and improve it. If you have suggestions, please email me. Redpoint SaaS Metrics Template The template is broken into six sections: People, Bookings & Revenue, Cash, Sales, Marketing, Customer Success. People is the first section because people are a startup’s most important element. This section covers employee satisfaction, headcount, and recruiting metrics. Indicators of challenges include a spike of non-regretted attrition or a decreasing employee satisfaction score. Bookings and Revenue illuminates the company’s performance in closing new business (bookings) and recurring revenue. These are pretty straightforward. The company eating plan or Cash works through the cash balance, burn and implied Continue reading "Redpoint SaaS Startup Key Metrics Template"

Office Hours with Guillaume Cabane on June 27


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Next week, on the 27th of June, Redpoint will host Office Hours with Guillaume Cabane. Guillaume is an exceptional marketer. He built the highly successful growth practices at Segment and Drift. He stands out because of his persistence at the cutting edge. I remember when he told me of how he used the Clearbit Reveal API to change the content of conversations in Drift pop-ups to meaningfully improve conversion. He’s always at the vanguard of using technology to drive awareness and demand for SaaS products. Typically, Office Hours are hour long fireside chats with a speaker. We host them at our office in San Francisco and we gather questions from a small audience of about 30-40 people in a closed door format. This time, we’re trying a new format. Over the course of two hours, we’ll invite four startups to conduct one-on-one office hours for 30 minutes with Guillaume and Continue reading "Office Hours with Guillaume Cabane on June 27"

Top 10 Learnings about Free Trials with Tomasz Tunguz (Video + Transcript)


This post is by Faith Storey from SaaStr


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Join Tomasz Tunguz, Managing Director with Redpoint Ventures as he takes you through a quantitive analysis of 600 Freemium Soon companies. Want to see more content like this? Join us at SaaStr Annual 2020.   Tomasz Tunguz, Managing Director @ Redpoint Ventures FULL TRANSCRIPT BELOW Please welcome Redpoint Venture’s managing director, Tomasz Tunguz. Hi everybody, good morning. I’m so excited to be with you today and I’d just like to thank Jason and the rest of the team at SaaStr for inviting me to be with you. Today I’ve got a lot of data to share with you and I’m really excited because it’s really interesting. Can we get the slides on the presentation? Ready to go? Awesome. My name is Tom Tunguz, I’m a managing director at Redpoint, I’ve been there for about 10 years. I write a blog at tomtunguz.com that focuses a lot of early stage
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Setting the Salesforce/Tableau Acquisition in Context


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Yesterday, Salesforce announced it would acquire Tableau for $15.7B. Tableau sells data visualization software and the team has built an incredible business. We analyzed the S-1 in 2014. The company has grown since its public offering to generate about $1.1B in revenue, growing at 29%. Let’s put this acquisition in context. First, it’s the third business intelligence related acquisition in the past month. Google announced the Looker acquisition last week. SiSense acquired Periscope Data. And now Salesforce is merging with Tableau. This wave of consolidation in the BI world suggests this is a key area of competition amongst the biggest software companies in the world over the next decade. Collectively, these acquirers have spent $18.4B on these three businesses. Second, the Salesforce/Tableau acquisition is the third largest software acquisition since 2012, second to Microsoft acquiring LinkedIn and IBM purchasing RedHat. Third, Salesforce paid 8.4x trailing (or
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Why Product Innovation Slows After the Series A


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You’ve found product market fit. You’ve hired a team, including some managers. Your initial, small customer base is very happy. You’ve discovered an initial channel of customer acquisition that’s working. You’ve raised a meaningful round of capital. And then, right then, product innovation decelerates to zero. The fast pace that characterized the past 12-18 months, when you would germinate an idea and write the code in less than a few days, has evaporated. Suddenly, the product and engineering teams are bogged down. Every innovation requires a Herculean effort to achieve. Why? Why does this fact pattern evolve in many software companies? Here are the most common reasons I’ve seen. First, technical debt. The freewheeling, hedonistic days of idea to instantiation in an instant are over. They’ve left you with the hangover of technical debt. Architectural issues arise that the team didn’t anticipate when you were building features for a single Continue reading "Why Product Innovation Slows After the Series A"

Looker Joins Google Cloud


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Today, Looker is announcing they are joining Google Cloud. During the past seven years, Looker has evolved to become the business intelligence platform for the modern business, that sits atop the next-generation data warehouses like BigQuery, Snowflake and RedShift. Throughout the journey, the long term vision has always remained the same: to become the single data layer across an enterprise. And over the last seven years, Looker has taken the first big steps to seeing it through by working with hundreds of customers to empower them with data. More than building an enduring business, Looker is a company with a big heart. The culture that Lloyd and Frank imbued into the business sets it apart, and it’s an inspiration to see how they’ve built Looker into an enduring business starting with strong values. The combination of Looker and Google’s Cloud Platform is another important step to fulfilling Looker’s vision and Continue reading "Looker Joins Google Cloud"

As Your Sales Team Scales, Focus on Your Middle


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Imagine a hypothetical startup with 10 account executives that is growing quickly. This startup has two AEs that outperform meaningfully, six that are at typical quota attainment, and two that are underperforming. Where should your sales enablement team focus their time? This is the team’s performance last year. They generated 8.6M in bookings on 10M in quota capacity (which is really good). Most teams aim for 70-75% attainment. If the sales enablement teams had focus on the top quartile AEs and improve their performance by 20%, the company would have booked $9.3M. The distribution looks like this. The two top reps jump from $3.5m to $4.2m in bookings. Nice result. How does it compare to an alternative of improving the middle two quartiles’ performance by 20%? In this case, bookings grows to $9.5M, a 10% improvement over the baseline and a more modest 2% improvement Continue reading "As Your Sales Team Scales, Focus on Your Middle"

The Benefits of and Questions Facing Remote and Distributed Startups


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In 2013, Scott Berkun authored a book called The Year Without Pants. Scott shared his experience working remotely for Wordpress. After I read the book, I wrote:
In the coming years, video conferencing and online meetings will become much more prevalent as stories like the ones Scott shares are told and retold. If you’re looking to understand how a fully distributed team used chat and video conferencing to build a world changing product, reading The Year Without Pants is a great way to answer those questions.
Six years later, it’s become a norm with a few different flavors. There are examples of fully distributed companies. Wordpress was among the earliest. Invision, Buffer and Gitlab are three others. This is a corporate structure where team members rarely come into the office and work through the internet. There are examples of semi-distributed companies. Hashicorp and Mattermost staff their GTM functions in Continue reading "The Benefits of and Questions Facing Remote and Distributed Startups"

Before You Raise a Round of Funding, Ask Yourself This Question


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Before you raise your next round, ask yourself this question. Are there any key people you need to hire? Essential executives, critical engineers, important managers or anyone else? Your common stock value, or 409a valuation will increase the second you receive a term sheet. And the strike price of any new options will increase with the 409a valuation. Let’s take a step back. When you hire someone, you’ll grant them a salary and options. An option is the right to buy shares of the business at some future point in time. The strike price of the option is equal to the value of the common stock, which is set by the company’s board periodically, based on a report by an independent appraiser, the 409a valuation. During the early stages of a company, the board typically ratifies an updated 409a valuation annually. As the company grows and approaches an IPO, the Continue reading "Before You Raise a Round of Funding, Ask Yourself This Question"