The weekly top 10 for B2B tech operators · Every Friday
MRR (monthly recurring revenue). In a surprise statement to no one, this is one of the most important metrics a SaaS company has. But MRR is a nuanced metric with a few flavors and this is something that everyone needs a deeper understanding of. There are different ways to calculate the metrics and once nailed, can then be leveraged to easily forecast where you are going as a business and which types of MRR are performing best.
Real talk time - Investors love SaaS because of the annuity-like returns (with prolific growth) - but if we really scratch the surface on what the margins are.........it's not good. Sammy Abdullah takes a look at 42 publicly traded SaaS companies (so this is theoretically companies with decelerating growth) to highlight how anemic (that it is negative) the median operating margin of these companies are (TL;DR - it's minus 21%) -most are operating at an operating loss.
Huh? What the heck does this have to do with tech? Well if you have a tech-heavy investment portfolio you sure as heck know why after the last couple of weeks wild Stock Market (and Crypto) ride - let's assume that the fixed Margin costs (see #2 above) are some of the reasoning - but also Tomasz Tunguz gets into it this week looking at the Inflationary pressures within the Tech Industry in regard to valuations. It's quite a wild ride - especially post 2019 (60% spike)and the market is making it clear that valuations need a cool-off.
Everyone thinks they have it (when they don’t). Andrew Chen from a16z is great and his PDF/deck on going from zero to Product-Market Fit is excellent (For SaaS he calls this a 5% conversion rate from free-to-paid, or 3X CPA to LTV ratio, or less than 2% monthly churn rate, or TL;DR.... just a clear path to $100k MRR). He also has an accompanying article with notes
In March 2020 the search term for “how to make hand sanitizer” grew by 4,950% worldwide. Opportunity via search is a real thing. Every google search is a problem looking to be solved - some big some small. So how, as an entrepreneur, can we track these kinds of rapid trends? Google lays down the lesson on how to stay on top of market trends leveraging…..you guessed it: Google Trends.
LinkedIn a pretty good source to secure outbound opportunities. From the Predictable Revenue team is a great article on how SDRs can turn 100 LinkedIn profiles into 10 meetings and Forbes gives a view on the pros and cons of cold calling.
I bet you have been told that you need to focus on the top of the funnel - but here is something controversial to read: When it comes to Content Marketing - focus on the bottom of the funnel first to drive signups. Whaaaaaaaat? The thinking is - top of the funnel already know their stuff, it’s the bottom part of the funnel that's truly on the learning search.
When it comes to closing deals the teams at Zoom and Chorus got together to take a look at what works better - a presentation or a product demonstration, or a bit of both? Read away for more (and I don’t want to spoil it as the infographic is full of amazing nuggets!).
Jason Lemkin swooping in this week with a fantastic top 5 tips to grow an extra 10-20% faster this year - he's always looking for ways to squeeze more performance out of those growth engines metrics and here is an accompanying article about what kind of growth metrics you may wanna squeeze
I got mobbed by Monday.com adds in 2019 and 2020 - thankfully they are gone but I did evaluate their product for use (so they worked). They have now filed to IPO a couple of weeks back and reporting a whopping $240m ARR with an 85% YoY growth. FYI - they launched 6 years ago. Jason Lemkin has some great insight on their numbers here.
Get the top 10, every Friday
Curated SaaS and tech insight from around the web, repackaged for people to put to good use — free.