SaaS METRIC OF THE WEEK: SaaS METRIC OF THE WEEK
DAU/MAU. The DAU/MAU ratio is a popular metric for companies that need to measure user engagement. Rule of thumb: Average is 13%; apps with over 20% = good. If you have 50%+ - you're world-class.
Top 10 in Tech - What to know for Week ending March 1, 2024
PRODUCT POSITIONING
It's easy for startups to underestimate the significance of product positioning and marketing in the early stages. This article highlighted the importance of understanding the product, customers, and competitors and had me at the subheader: "A lot of startups suffer after initial growth because they can't figure out what they are building & for whom."
PRICING
This is a constant experiment, and we expect it to evolve forever (FYI, we are not charging enough). Intercom makes the case that a solid pricing strategy should help shape an entire business model, and here is an excellent article on how to choose the right SaaS pricing model.
INVESTOR UPDATES
The NFX team has read many investor updates and published a guide where they share common mistakes and how you can avoid them (and also deliver hard news).
DECIDE
Because human beings are weird, we often make decisions using predictable (and fairly subconscious) mental shortcuts - in the UX world, the term used is 'Heuristics.' Check this (ultimate) guide to heuristics evaluation, complete with cast studies! Sidebar bonus - Look at this guide if you need help with decision-making frameworks.
SALES 1/2
Looking to establish your first SaaS Sales Comp plan? So first, check this report on the State of Startup Compensation from the team at Carta. They look into questions such as what makes up for the largest share of compensation spend, what roles get paid the most, and whether startups are still hiring remote workers (yes, remote hires now represent 62% of all new contracts). Then, read this post from Jason Lemkin on how to construct a framework for the first SaaS sales compensation plans. If you need more Lemkin - see the Pod of the Week.
SALES 2/2
Loading more to #6 above (and #5 on deciding). To scale your Go To Market effectively, you must tailor a sales team to match your audiences, product complexity, pricing model, and GTM strategy, ensuring they possess the necessary skills for success. Alignment is key for optimal execution. It also comes with a template from which you can get inspiration.
SEGMENTATION
A SaaS business doesn't cater exclusively to just one type of customer. So, to focus on size-relevant engagement strategies and cater to the needs and problems of these different customer types, Segmentation is key. Here is an interestingcase study/article on how Segmentation can be combined with LTV (Life Time Value) to grow MRR (from a subscription box startup). From Point Nine Capital is a great article on Customer Segmentation, and here comes the real modern-times question: Can you use AI to automate the segmentation analysis? TL;DR - Yes.
MARKETING
I've already shared this with a bunch of founder-friends; it's a great article listing ten low-effort, high-impact marketing tactics for quick wins.
CASE STUDY
Adding an excellent case study to #1 above from Lenny's Newsletter, Duolingo reignited its user growth via gamification, push notifications, and optimizing streak features. This led to a 350% increase in active users. These strategic changes were data-driven, using some pretty innovative growth models (which got them a successful IPO).