Cracking the Code

MARCH 12, 2010

Given the predictability of SaaS GAAP revenues on a quarterly basis, the fact that the 08/09 projections were unchanged is not a surprise. Given that the revenues are not growing very fast, this means that most of the companies have reduced their sales force and focused on productivity improvement. Finance Dissertation Help.

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Software Review Technical Review Cloud Forecast 63

VC Cafe

NOVEMBER 2, 2019

One question that keeps coming up when speaking with early stage entrepreneurs when it comes to funding, is what metrics the company needs to hit to raise seed/series A/B etc: What’s a good conversion rate? Investors look beyond top line metrics to assess other important factors. What should our MRR growth be?

B2C 141

B2C Technical Review Startup Retention 141

Cracking the Code

OCTOBER 9, 2009

This strong recovery has highlighted the resiliency of the recurring revenue model in a downturn as well as the stength of the shift to soaftware-as-a-service and cloud computing. In other words, how much of the decline in revenue growth is due to signing up fewer customer vs lower revenues from each new customer. Yahoo Finance.

Software Review 48

Software Review Technical Review Cloud Europe 48

Steve Blank

DECEMBER 7, 2010

If you’re assuming virality of your product, you will need to show viral propagation of your product and the improvement of your viral coefficient over several experiments. Dave McClure, “Startup Metrics for Pirates”, [link]. Class Lecture/Out of the Building Assignment: What’s a revenue model? Access to resources.

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Wiki Lean Management Business Model 311

abovethecrowd.com

OCTOBER 17, 2013

Awareness of the service was clearly spreading virally through word of mouth. For starters, the business metrics are quite compelling. On August 23, Stitch Fix announced that it had shipped its 100,000th Fix , and today the company announced that it has grown 500% since its last financing round this past February.

eCommerce 62

eCommerce Technical Review North America San Francisco 62

reidhoffman.org

NOVEMBER 12, 2013

we had no revenue. You may happen to emphasize the right points that pique an investor’s interest, but you shouldn’t leave your financing up to chance. Second, understand the broader financing climate. As a result, we knew that our pitch would need to steer into investors’ biggest concern: the lack of revenue.

Entrepreneur 111

Entrepreneur Revenue Viral Networking 111

Cracking the Code

NOVEMBER 10, 2009

Get instrument rated, and trust the 6Cs of Cloud Finance (more.) Cloud accounting is all about matching revenue and costs to consumption…well, except for professional services! SaaS companies use different metrics to calculate renewals. SaaS business metrics: why are they different? Yahoo Finance. Raj Kapoor.

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Software Review Cloud Technical Review Sales Cycle 48

Cracking the Code

NOVEMBER 13, 2008

The fact that SaaS valuations are being more affected by the downturn than the Nasdaq can be surprising given the supposed resiliency of the SaaS model (recurring revenues) but it translates the public investors belief that SMB software spend is going to be hit very hard by this recession. With this decline, the average EV/08 rev.

Software Review 48

Software Review Technical Review Valuation Portfolio 48

View from Seed

JUNE 30, 2015

A few weeks ago, Manu Kumar wrote an excellent post detailing the current state of the seed financing landscape. Over a third of our investments happen pre-product (so by definition, before PMF), and two-thirds are pre-revenue. For consumer social, you need amazing virality, engagement, and hundreds of thousands of DAUs.

Seed Stage 120

Seed Stage Syndicate Syndication Dilution 120

Cracking the Code

NOVEMBER 10, 2009

It is intriguing to see the M&A dynamics in the space, highlighting the interest of tech companies for recurring revenue streams - even SAP announced in their analyst call earlier this month that they were moving from perpertual licenses to five year term licences. SaaS business metrics: why are they different? Yahoo Finance.

Software Review 48

Software Review Technical Review IPO Cloud 48

ReadWriteStart

JUNE 29, 2020

There has never been a viral outbreak of such magnitude before. It means relying on your own savings and revenue to operate and expand.”. Your data will be ordered and structured into information based on specific niches like engineering and construction, finance, technology, and business.

Bootstrapping 85

Bootstrapping Global Startup Hungary 85

Cracking the Code

JANUARY 22, 2009

For SaaS companies, we found that MRR is the best metric on which to base sales commissions. While it may make sense to offer very slight adjustments for favorable payment terms and one time revenue, net additions to MRR should dominate the sales rep’s thoughts. How do you clawback revenue from the sales guy? Cindy said.

Software Review 91

Software Review Clawback Sales Salary 91

Genuine VC

APRIL 30, 2008

After the crash at the end of the last decade, web startups clamped down to focus on their core value proposition and were forced out of necessity for survival to hone their revenue models. The stories of tremendous growth in adoption with the promise of revenue later on has been enough to excite both entrepreneurs alike.

Distribution 103

Distribution Widget Viral Social Media 103

Genuine VC

APRIL 30, 2008

After the crash at the end of the last decade, web startups clamped down to focus on their core value proposition and were forced out of necessity for survival to hone their revenue models. The stories of tremendous growth in adoption with the promise of revenue later on has been enough to excite both entrepreneurs alike.

Distribution 100

Distribution Widget Viral Social Media 100

Both Sides of the Table

MAY 23, 2012

Yes, it’s true that FOMO (fear of missing out) is driving some irrational behavior and valuations amongst uber competitive deals and well-financed VCs. Try charging customers for your product when you have 12 competitors giving the product away free finances by $20 million of VC. The Exit Problem. This never existed a decade ago.

Venture Capital 347

Venture Capital Technical Review LP Mobile 347

The Next Web

SEPTEMBER 29, 2013

You’re learning what the metrics that matter are, what your funnel looks like, and what actions you want your prospects to take. It should never be the financing event that dictates whether to shift or not. Clearly investors should promote the idea that startups need to have clear metrics for terminating the discovery mode.

Metrics 136

Metrics Cofounder Cram Down Liquidity Event 136

Cracking the Code

FEBRUARY 25, 2008

As I was building the spreadsheet, I also included the revenue multiples for this set of companies, both for the trailing 12-month (TTM) and the forward 12-month (FTM). SaaS business metrics: why are they different? Popular Media: the key to viral marketing. Yahoo Finance. pts and is dynamically updated via GoogleDocs.

Software Review 48

Software Review Technical Review Europe Venture Capital 48

Spencer Fry

JUNE 29, 2011

You may see a lot of signups by a certain type of user, but that cohort may bring in only half the revenue of another cohort that may provide fewer total signups. The Viral Strategy. We're all familiar with the idea of viral user acquisition: Your current users invite other users to use your service.

Philippines 77

Philippines Viral Bootstrapping Europe 77

Up and Running

MAY 23, 2016

In fact, SaaS industry revenue is projected to grow from $49 billion in 2015 to $67 billion in 2018, a compound annual growth rate of approximately eight percent. At this stage, simply list your primary revenue streams and your key expenses. At this stage, simply list your primary revenue streams and your key expenses.

Software Review 74

Software Review Software Delaware Forecast 74

Cracking the Code

DECEMBER 11, 2015

For this type of model, I would like to understand how the number of inbounds is scaling with the activities and how much virality there is in the model as the word spreads out in the community SMB door to door sales (e.g., In other words, there are universal metrics that smart investors require to make investing decisions.

San Francisco 48

San Francisco Churn Rate Silicon Valley Engineer 48

Cracking the Code

DECEMBER 16, 2006

however, public SaaS companies like Concur, Saba, Taleo, LivePerson and Ultimate are growing 50-100% per year and trading at an average 5x trailing revenue multiples (I excluded salesforce leading the pack with 9x!) whereas traditional software companies of this size have a growth rate of less than 10% and revenue multiples of 2-2.5x.

Software Review 48

Software Review Silicon Valley Technical Review Software 48

Cracking the Code

JANUARY 28, 2008

Eloqua is bringing this revolution to the B2B marketers by providing on-demand applications and best-practice expertise for B2B marketers to execute, automate and measure effective marketing programs that drive revenue. SaaS business metrics: why are they different? Popular Media: the key to viral marketing. Yahoo Finance.

Software Review 48

Software Review Technical Review Los Angeles Europe 48

David Teten

DECEMBER 3, 2019

Lean Case provides standard business models & metrics, so you can apply a standard approach to business planning, modeling, and profitability tracking. Lighter Capital, a Revenue Based Investing VC, offers a Cost of Capital Calculator. Similarly, Corsis uses benchmarking data to understand technology spend patterns.

Technical Review 78

Technical Review Software Review Analytics Private Equity 78

Steve Blank

FEBRUARY 26, 2020

There are two reasons to raise money: You have a killer idea that is only partially validated, that you think can get to $50M+ of revenue in 5 years with 80%+ gross margins (if margins are lower, you need a lot more revenue)and you need money to get to product-market fit, or. Not all startups need outside investment to grow.

Cofounder 429

Cofounder Seed Stage Valuation Metrics 429

Occam's Razor

MAY 19, 2014

But the problem is that single golden metrics hide valuable insights and, more often than not, drive bad behavior. Here's my proposal: If you are pushed to have a single golden metric, give it a partner. The BFF metric you find should not be one that is very far away. So, great metric. Honestly, who can blame them.

Metrics 159

Metrics Analytics SEC Acquisition 159

Startup Lessons Learned

MAY 11, 2020

There's a good enough vaccine to get the virality rate below one. I just saw a friend of mine who's a finance person temporarily pause his job and volunteer to be the CFO or investor, whatever investor relations person for a startup was trying to work on a cure so that the founders could have more time to do the science.

Silicon Valley 68

Silicon Valley Technical Review Government .Net 68

A Smart Bear: Startups and Marketing for Geeks

OCTOBER 24, 2011

Totally automate all that so it doesn’t bring me down all the time and instead I can sign all the revenue, because that’s fun. Do you feel like the more users you have it helps accelerate, is there some kind of, maybe not necessarily viral, but that people just tell their friends at all. Patrick: How close did he get?

Cofounder 208

Cofounder Technical Review Software Review Differentiation 208

Cracking the Code

MAY 25, 2010

A few highlights from the different keynotes and speakers On top of Jason, we also had the chance of having many great speakers at the event and here are a few quotes and notes that I have taken during the different keynotes and panels: Joe Payne, CEO of Eloqua moderated the panel on Revenue Performance Management. Yahoo Finance.

Software Review 74

Software Review Cloud IPO Jordan 74

Cracking the Code

OCTOBER 10, 2008

Be prepared to cross the desert - SaaS requires R&D and sales expense up front for a multi-year stream of revenue, so it demands enough investment capital to fund 4+ years of runway. Effectively measuring and understanding your CAC and CLTV metrics are key to future success. Great list! I particularly agree on points #2 and #4.

Software Review 48

Software Review North America Europe Metrics 48

mashable.com

SEPTEMBER 14, 2011

If you’re working with an open source project, for example, it’s important that you have a definitive business model to drive revenue — though not at the cost of alienating your community of core contributors. To that end, companies will offer enterprise-ready software that comes with additional features, services and support.

France 77

France Marketing Social Media Startup 77

Cracking the Code

MARCH 10, 2008

I found this approach interesting, but it seems to me that gross margin is a more relevant benchmark than revenues, given that the GM of saas companies varies by type of application and size of the company (for example NetSuite went from about 50% GM three years ago to close to 70% today).

Sales 79

Sales Software Review Marketing Technical Review 79

Cracking the Code

SEPTEMBER 2, 2008

The Deutsche Bank report has a very interesting chart on the topic presenting the Free Cash Flow margins vs. the revenue growth four years post IPO for select software leaders: As you can see, with 20% Free Cash Flow margin and a 50% growth rate, Salesforce is well positioned in the pack! SaaS business metrics: why are they different?

Software Review 48

Software Review Software Technical Review Cloud 48

Cracking the Code

JULY 6, 2007

SaaS business metrics: why are they different? I was surprised today when I went through the NetSuite IPO filling (S1) to see that it looked very much like any Enterprise software document - not a single mention of churn or % of recurring revenues. Different models require different performance metrics. Friday, July 06, 2007.

Software Review 66

Software Review Metrics Valuation Technical Review 66

mashable.com

MAY 24, 2011

Mobile commerce revenues may still pale in comparison to their ecommerce brothers, but we’re already seeing signs of mobile commerce’s potential. While commercial software houses have the luxury of targeting a specific platform for a revenue-generating commercial app, business developers have to satisfy business requirements.

Mobile 90

Mobile Web Social Media Software Review 90

Cracking the Code

FEBRUARY 4, 2008

T he response rate has been overwhelming and we ended up with 40+ companies and 80+ attendees, most of them CEOs and CxOs of leading public and private saas companies representing around 80% of the revenues of the SaaS industry in 2007. What metrics should I be using to drive a saas business? Whats the right strategy for Europe?

Software Review 48

Software Review South Korea IPO Portfolio 48

ConversionXL

APRIL 6, 2016

Claire Vo: CRO Metrics for Performance and Insight. Underlines improve clickthrough on Bing for both algorithmic results and ads (so more revenue) and improve time to successful click (better UX). Wrong Success Metric (OEC). Revenue is usually a good metric to use to evaluate effectiveness of test. Welcome mat.

Retention 48

Retention Algorithm Software Review Conversion 48