# Top 10 in Tech - What to know for Week ending May 13, 2022

Published: 12 May 2022
Canonical: https://www.top10in.tech/posts/week-ending-may-13-2022

## 1. SaaS METRIC OF THE WEEK: CLTV

This metric represents the average revenue that a customer generates before they churn - Customer Life Time Value. ChartMogul has a great [online calculator here](https://chartmogul.com/metrics/ltv/#calculate). Go to 'advanced mode' as this calculator references the traditional formula and [the David Skok version](https://www.forentrepreneurs.com/ltv/) (which is the advanced one but viewed as being more realistic)....and [check here for a thought-provoking read](https://medium.com/point-nine-news/why-your-ltv-might-be-higher-or-lower-than-you-think-f35539291701)of why your LTV may be lower than you think.

Link: https://chartmogul.com/metrics/ltv/#calculate

## 2. SECOND ORDER REVENUE

Doubling down on LTV this week and a little contrary to the last link above, Jason Lemkin claims that CLTV isn't the whole story and often [references a term called "Second-Order Revenue"](https://www.saastr.com/its-not-just-cltv-its-your-trgcltv-that-matters-total-all-in-revenue-generated-by-your-customer/). He states that traditional CLTV analyses underestimate genuine revenue generated by customers by 50-100% (whaaaaat!!!) in most SaaS models selling to any businesses larger than SMBs.

Link: https://www.saastr.com/its-not-just-cltv-its-your-trgcltv-that-matters-total-all-in-revenue-generated-by-your-customer/

## 3. GROWTH

Five ways to build a $100M business - just follow [this simple video](https://twitter.com/PointNineCap/status/1097809510666854400), or [read this article](http://christophjanz.blogspot.com/2019/04/five-years-later-five-ways-to-build-100.html), find your target market animal spirit, and you are good to go. This is a fantastic way to think about customers, segments, pricing, and cohorts.

Link: https://twitter.com/PointNineCap/status/1097809510666854400

## 4. USAGE BASED PRICING

v 2.0! Usage-based pricing aligns with customer growth and helps minimize friction during customer onboarding, as customers only pay for what they're using - it's right-sized. This strategy typically sees [best-in-class net-dollar retention](https://www.bvp.com/atlas/state-of-the-cloud-2021#Usage-based-pricing) results. The cool thing is that the current understanding of ways UBP is being applied in forward-thinking SaaS companies is so fresh that [this article is an updated understanding of UBP Article](https://openviewpartners.com/blog/usage-based-pricing-2-0) from November 2020 (but [here is that playbook anyway](https://www.dropbox.com/s/r9xjxb9wjioiol0/The%20Usage-Based%20Pricing%20Playbook.pdf?dl=0) as a downloadable PDF).

Link: https://www.bvp.com/atlas/state-of-the-cloud-2021#Usage-based-pricing

## 5. PRICING 1

Only[41% of SaaS Companies priced by seat](https://www.forentrepreneurs.com/wp-content/uploads/2021/10/Slide48.png) in 2021. TechCrunch also notices that [more and more SaaS companies are shifting to usage-based, not seat-based, pricing](https://techcrunch.com/2021/11/04/more-saas-companies-are-shifting-to-usage-based-pricing/). They reference OpenView's annual Financial and Operating Benchmarks survey noting that startups that adopt product-led growth and UBP outperform their peers. With the more recent additional complexity introduced by B2D (D for Developers) models and Data/AI/Intelligence-based products, traditional pricing no longer works for many of us - and how do you even price intelligence as a product per seat?. Tomasz Tunguz [breaks down pricing in Per-seat vs Usage-based scenarios](https://tomtunguz.com/seat-vs-usage-based-pricing/). Bessemer Ventures also reports that UBP sees [best-in-class net-dollar retention](https://www.bvp.com/atlas/state-of-the-cloud-2021#Usage-based-pricing) results.

Link: https://www.forentrepreneurs.com/wp-content/uploads/2021/10/Slide48.png

## 6. PRICING 2

Speaking of that OpenView report - you can [download that here](https://f.hubspotusercontent10.net/hubfs/366266/2021%20State%20of%20Usage-Based%20Pricing%20Report/The%20State%20of%20Usage-Based%20Pricing%202021.pdf?utm_campaign=2021%20State%20of%20Usage-Based%20Pricing%20Report&utm_source=Hyperlink&utm_medium=Wordpress). It's a survey of almost 600 SaaS companies, and it's fantastic, measuring a [2x adoption of usage-based](https://openviewpartners.com/wp-content/uploads/2021/10/The-State-of-Usage-Based-Pricing-1-2048x1060.png) pricing in companies surveyed since they started the survey back in 2018. There is also a great slide (#16) with a decision tree to decide if usage-based pricing is right for your business.

Link: https://f.hubspotusercontent10.net/hubfs/366266/2021%20State%20of%20Usage-Based%20Pricing%20Report/The%20State%20of%20Usage-Based%20Pricing%202021.pdf?utm_campaign=2021%20State%20of%20Usage-Based%20Pricing%20Report&utm_source=Hyperlink&utm_medium=Wordpress

## 7. DATA

I don't think I have more to add than the title of this article: "[You Cannot Be Data-Driven Without Experimentation](https://www.reforge.com/blog/you-cannot-be-data-driven-without-experimentation?ref=saas-weekly)" well, OK, fine, I do: The opposite of that is also a truth to hammer home "You Cannot run experiments successfully without being data-driven". We all overestimate our experimentation skills AND our Data collection skills.

Link: https://www.reforge.com/blog/you-cannot-be-data-driven-without-experimentation?ref=saas-weekly

## 8. CUSTOMER OPERATING SYSTEM

What exactly ***is*** the difference between Customer Success and Customer Support? [Get started here](https://blog.totango.com/2020/10/customer-success-vs-customer-support-what-are-the-differences-fc) to understand the nuances. They are both parts of the same customer journey spectrum. Totango posits, [in this recent SaaStr Annual presentation](https://www.youtube.com/watch?v=63fsg2Ha39A), that we need a fresher look at Success and Support that they coin the "Customer Operating System". Like the presso? [Here are the Google Slides deck](https://docs.google.com/presentation/d/e/2PACX-1vTWX7PAduzydSRYf3xtrDdSb-k6-zvGaJMkv-6_ebTML3Dk68c3HWgdIHn5f924bjClTheAxX90pv4m/pub?start=false&loop=false&delayms=3000&_hsmi=94995844&_hsenc=p2ANqtz--XE7fEBjetFNx0zVOD5vrOJogrdF0FrFciO3xVh71RVEzkRfeA45RZJnPzOnq_J6IxrTji9SfDBnLiqh0tYdLEfi4Jmw&slide=id.g63bb278342_0_210).

Link: https://blog.totango.com/2020/10/customer-success-vs-customer-support-what-are-the-differences-fc

## 9. PITCH

Getting a VC's attention in an initial pitch meeting is incredibly important. [So here are 10 tips to help your pitch game from Fran Rotman](https://twitter.com/fintechjunkie/status/1341808894641893385) presented in a 28-part Tweet-storm (and check these [16 rookie errors founder make pitching to VCs](https://www.saastr.com/16-rookie-errors-founders-make-pitching-to-vcs-and-passing-the-20-minute-test/) from Jason Lemkin). According to TechCrunch, [these are the 5 most critical pitch deck slides most founders get wrong](https://techcrunch.com/2021/11/16/5-critical-pitch-deck-slides-most-founders-get-wrong/). Finally, here is a monster collection (139!) of [funded pitch decks](https://www.alexanderjarvis.com/pitch-deck-collection-from-vc-funded-startups)(including the neo-classics: AirBnB, LinkedIn, Intercom, Transferwise, Canva, and Sendgrid).

Link: https://twitter.com/fintechjunkie/status/1341808894641893385

## 10. CASE STUDY

Upwork - I have fantastic full-time staff that originated from shorter-term gigs on [Upwork, which is now worth $6 billion and at $400m+ in ARR](https://www.saastr.com/5-interesting-learnings-from-upwork-at-400000000-in-arr/). 2020+2021 gave them a chunky Covid boost, and they are only just getting started with the good ol' fashioned "move-upmarket" strategy, with an absolute classic 80/20 rule in effect. So 80% of clients are SMBs, but 80% of the revenue comes from 20% of clients.

Link: https://www.saastr.com/5-interesting-learnings-from-upwork-at-400000000-in-arr/

## POD OF THE WEEK

Financial Reporting for Startups is something every founder has to up-skill at - [this webinar](https://youtu.be/7-vQsKizUPU)(replay) covers operational and financial forecasts. Answering all those hairy questions - how do I forecast ARR when in startup mode?

Link: https://youtu.be/7-vQsKizUPU