A Smart Bear: Startups and Marketing for Geeks

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WP Engine passes $100M in revenue and secures $250M investment from Silver Lake

A Smart Bear: Startups and Marketing for Geeks

Late last year we passed $100M in annual recurring revenue. That revenue is in on 75,000 customers, earned through the hard work of 500 employees across six offices on three continents. We just announced a few more things.

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Kung Fu

A Smart Bear: Startups and Marketing for Geeks

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. The “boring” but established, large market is where revenue is easy and competition is old, slow, and has something to lose.

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If you build it, they won't come, unless.

A Smart Bear: Startups and Marketing for Geeks

He published revenue figures even when they were still pathetic , he pledged loudly and eagerly to give away lots of free copies to non-profits, and he revealed all his (remarkably effective) marketing strategies (updated here ) even though it meant competitors would learn them too. But one story beats a pile of AdWords A/B tests.

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The unprofitable SaaS business model trap

A Smart Bear: Startups and Marketing for Geeks

Marketo filed for IPO with impressive 80% year-over-year growth in 2012, with almost $60m in revenue. of revenue, force-feeding sales pipelines with an unprofitable product. SaaS companies earn their revenue over time. time to earn back the revenue to cover all your customer acquisition expenses) 75% annual retention.

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Why large companies acquire small companies

A Smart Bear: Startups and Marketing for Geeks

Revenue multiples, profit multiples, premium over the previous financing — these are metrics used by sellers to help determine a minimum acceptable price. In terms of acquisition, they ask more specifically: “How can we trade balance sheet assets (cash, equity) in exchange for executing our strategy better?”.

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Which is better: Many customers at low price-point or few at high price?

A Smart Bear: Startups and Marketing for Geeks

Sacha demonstrated the benefits of selling many copies of an eBook at a low price, while Jarrod pointed out the advantages of higher prices, bringing in more revenue with 1/6th the number of units sold. In that case, A can’t keep growing forever, so its revenue is limited, which is a bad spot. maximizing per-unit profitability).

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The right way to position against competition

A Smart Bear: Startups and Marketing for Geeks

However, whereas Microsoft can't afford to build this from scratch, if we show good growth and profits it would be an obvious acquisition target for them. X automatically has advantages over you (brand, customers, revenue, inside knowledge, a team, momentum), so Y had better be brain-explodingly awesome.