The weekly top 10 for B2B tech operators · Every Friday
NRG - Natural Rate of Growth. This is for all you Product Lead Growth groupies. With NRG the assumption is that a PLG business has an organic, self-service, growth engine at the core (because they’re built to attract the end-user). The article linked above comes complete with benchmarks towards the end. Hungry for more PLG metrics? I got ya!
Nice little lead-in from above, Lemme tech-splain you: PLG is a go-to-market strategy that relies on using the product as the main vehicle for growth (eg Slack, Evernote, Netflix, and Dropbox). PLG gives the user access to the product, driving their experience to meaningful outcome where upgrading to a paid plan just becomes a no-brainer. It can become a true growth fly-wheel if built right.
Are a proven method for a solid PLG go-to-market strategy. Check this article on 9 ways to optimize your SaaS trial and then take note from Tomasz Tunguz on how long should your customer trial period be?: TL;DR: Longer trials do not convert customers at greater rates
Take a (deep) read of this extensive guide for building great customer success teams - CS is not just about limiting churn, but it also creates a department and practice to convince existing customers to buy even more from you. As Jason Lemkin said back in 2015: "Customer Success is where 90% of the revenue is”. Want a working example? Chart Mogul expand on this and explain their approach to a (successful) success management strategy.
Last week I mentioned Sales Budgets - Figuring out how to optimize marketing spend and growth rate is also a key question and this study doesn’t show great benchmarks - percentage of revenue in pretty much equals percentage growth out, but with an ever increasing range of outcomes as spend increases per business. More solid benchmarks are with the Sales vs Marketing spend ratios which stay at about 2:1 regardless of market-facing strategies (although Mixed is a bit of an outlier).
A lot of startups follow this path: Get an idea, build an MVP, convince friends and family to validate as beta customers. Then........OK - now what? This is ideally when prospecting needs to start - so take a read here of the beginner’s guide to B2B prospecting.
I love myself a good and fully transparent, with warts and all, SaaS growth story. So this one is a great beginning to end account: Growing a SaaS from Zero To Sold - BOOTSTRAPPED. On the flip side of that bootstrap world are the unavoidable and hard pitfalls of trying to grow a startup without any external capital: 6 things I wish I knew before I bootstrapped my first SaaS startup.
Good conversations this week prompted me to make sure to add some significant messages this newsletter focused on the Venture World. First up - seed stage start-ups do not have the pipeline, processes, or sales skills capability to give hard core growth metrics to an investor. So what metrics actually matter? This article from The Startup lists 3 metrics that should truly matter to investors at Series A. Second is the SaaS napkin: Point Nine Capital have just launched a call for feedback to update their SaaS Napkin for 2020 (it’s awesome but a little pre-covid) so here is the fresh publication from them on what it takes to raise capital (in SaaS) in 2020.
The days of mandatory in-person pitch meeting to a VC are mostly behind us (at least for the foreseeable future). Pitching over Zoom is where we are at. Before you focus on getting the perfect lighting though - check these 16 rookie errors founder make pitching to VC’s from Jason Lemkin and read here on how you will be Zoom-judged by the VC's you are pitching to.
Founders - take a good review of this! How many of these mistakes are you making? (i'm making a few) : 8 Finance Mistakes Growing SaaS Businesses Make (and How to Fix Them).
Get the top 10, every Friday
Curated SaaS and tech insight from around the web, repackaged for people to put to good use — free.