# Top 10 in Tech - What to know for Week ending March 8, 2024 Published: 7 March 2024 Canonical: https://www.top10in.tech/posts/week-ending-march-8-2024 ## 1. SaaS METRIC OF THE WEEK: Consumption-based LTV. If you have a consumption/usage-based model, you probably have revenue that is not consistent month on month. Variable revenue is now a big thing in SaaS. Check out [How to calculate LTV with variable revenue](https://www.thesaascfo.com/how-to-calculate-ltv-with-variable-revenue/) customers from the SaaS CFO (comes with a template!). An analysis of usage-based pricing from Bessemer Ventures is [here](https://www.bvp.com/atlas/linear-volumetric-or-bundling-which-type-of-usage-based-pricing-is-right-for-you) to help you think about your own pricing models. Link: https://www.thesaascfo.com/how-to-calculate-ltv-with-variable-revenue/ ## 2. HYBRID PRICING Adding onto the metric above, Kyle Poyar of OpenView has noted in [this article](https://www.growthunhinged.com/p/the-state-of-usage-based-pricing) (and updated from [this one a couple of years back](https://www.growthunhinged.com/p/usage-based-pricing-20)) a) usage-based pricing isn't merely a pricing change but an org structure one and b) UBP adoption has cooled (from [46% to 41%](https://www.dropbox.com/scl/fi/w7cj7ysplg9rip6rboxnj/827871f1-0009-49e9-9db1-1b8caa7c7e57_1080x801.png?rlkey=q0wxsrbyxxxd3xyki9sce5wpk&dl=0) '22-'23) shifting towards "hybrid" pricing models that combine usage and subscription pricing, especially in the [SMB side of town](https://www.dropbox.com/scl/fi/eie2nsrlmq9izg9rllkfo/6baa9a93-878a-4bf6-abed-84761e2e0121_1080x791.png?rlkey=639cwn7u656lf0ammvhicji4b&dl=0). Link: https://www.growthunhinged.com/p/the-state-of-usage-based-pricing ## 3. SALES PLAN Adding just one more onto #1 above, when creating Sales plans, here is a great article from a16z on creating[a Usage-based Sales Compensation Plan](https://a16z.com/usage-based-sales-compensation/). Link: https://a16z.com/usage-based-sales-compensation/ ## 4. TAM A critical question at the very early stages of startup land is, "What's the market size?" - if you don't get it right, it can [create trust issues](https://www.mostlymetrics.com/p/your-tam-is-why-i-have-trust-issues) as the size potential of this startup is directly proportional to the size of that market. Having a clear understanding of [Total Available Market (TAM), Serviceable Obtainable Market (SOM), and Target Market (TOM)](http://TAM, TOM and SOM) can give all the confidence in the world to answer that question. But y'all really need to get started first with [this TAM Masterclass](https://www.mostlymetrics.com/p/a-total-addressable-market-masterclass). Link: https://www.mostlymetrics.com/p/your-tam-is-why-i-have-trust-issues ## 5. FIRST PRINCIPLE THINKING This phrase has been thrown around a lot in recent years, so do you want to be more like old-school Elon (the one without all the SEC/Twitter/kids dramas)? Take a read here on the concept of [First Principles Thinking](https://fs.blog/2018/04/first-principles). In addition, [here is a full guide/website](https://fpt.guide/). Link: https://fs.blog/2018/04/first-principles ## 6. RAISING How long does it take startups to reach each venture stage? Carta's Head of Insights, Peter Walker, [shared his analysis, which also clearly highlights the impact of the difficult fundraising environment we are currently in](https://www.linkedin.com/posts/peterjameswalker_cartadata-startups-venturecapital-activity-7167967679536881666-zhDS) (Last year was the lowest for venture funding globally since 2018, - $285 billion according to Crunchbase data) Link: https://www.linkedin.com/posts/peterjameswalker_cartadata-startups-venturecapital-activity-7167967679536881666-zhDS ## 7. SALARY (Updated for 2024) Hey Founders, a [TechCrunch article from last year](https://techcrunch.com/2023/04/09/f-you-pay-me/) recommended that founders pay themselves rather than doing it for the equity. But how much? Unfortunately, this doesn't mean you get Market Rates. Fortunately, there is a new report in town that dives deep into this question; the "[Founder Compensation 2.0](https://creandum.com/stories/founder-compensation-2024)" report (Europe-based) aims at providing data-driven insights for setting founder pay, especially those of us from Seed to Series B, offering a clearer picture of what is considered "normal." It also comes with a [Compensation Calculator](https://foundercomp.creandum.com/)! Link: https://techcrunch.com/2023/04/09/f-you-pay-me/ ## 8. ESOP (also updated for 2024) Employee Share Option Plans are a wonderful idea to incentivize and retain great staff, but under the hood, ESOPs are complex, especially with changing valuations, both positive and negative, in today's market. Check out [Airtree Venture's best practices for communicating the value of ESOP to teams](https://www.airtree.vc/open-source-vc/communicating-esop-value-to-employees). This article also has a bonus financial model template (value calculator, salary package calculator, and vesting schedule). Check [this cheat sheet](https://www.dropbox.com/s/zdzqkw6rcddzr8y/ESOP%20Cheat%20sheet%20of%20Terms.pdf?dl=0) for common ESOP terms. How much equity should you be setting aside for employees in 2024? Peter Walker again - coming through with the good data via [this LinkedIn post](https://www.linkedin.com/posts/peterjameswalker_cartadata-optionpools-esop-activity-7153804635353313280-BoZG) (check the comments for good Q&A). ESOP starts with around 13% fully diluted at Pre-Seed and Seed and grows to about 20% fully diluted at unicorn valuation. Link: https://www.airtree.vc/open-source-vc/communicating-esop-value-to-employees ## 9. GROWTH HACKS [This article suggests we avoid using "growth hacking"](https://gtmstrategist.substack.com/p/no-more-growth-hacks-please) in pitch decks; investors prefer structured GTM strategies. Focus on market understanding, a clear plan to gain market share, and mastery of chosen channels. But IRL, outside of telling VCs you don't, here are [five real growth hacking strategies you can use right now](https://foundationinc.co/lab/saas-hacking-strategies). Link: https://gtmstrategist.substack.com/p/no-more-growth-hacks-please ## 10. CASE STUDY Adding onto #9 above, here is how [First Principle Thinking can be applied IRL - in this example, towards a Product Lead Growth business](https://productled.com/first-principles-of-a-successful-product-led-growth-strategy). Link: https://productled.com/first-principles-of-a-successful-product-led-growth-strategy ## POD OF THE WEEK Adding onto #6 above, Chartmogul has a [great panel discussion about what matters most when pitching in 2024](https://chartmogul.com/webinar/raise-in-bear-market/?) and what advice they have for SaaS companies looking to raise this season. Link: https://chartmogul.com/webinar/raise-in-bear-market/?