SaaS METRIC OF THE WEEK: CRO
or Conversation Rate Optimization and Banklinko have created a great web guide about what it is and how to design for CRO within a business.
Top 10 in Tech - What to know for Week ending May 3, 2024
INDUSTRY
Jason Lemkin wrote a thought-provoking article last week: Is SaaS Dead? That's a controversial headline, for sure, but it did get me thinking: Now that high growth is no longer cool (thanks AI!) and returns are lackluster, is it dead? It feels like it, as it's a long down cycle, but Jason does point to plenty of upsides. SaaS spending has grown, and customers are still spending more each year than the last.
MICROSERVICES
Microservices have become the application deployment method du jour for quite some time now due to scalability and agility. But those old-school monolith apps also have value. Case in point - the Amazon Prime Video team recently shifted from microservices to a monolith and reduced costs by 90%. The choice is case by case, though. Microservices can get crazy complex, and Monoliths simplify deployment but often lack scalability. So, a blended approach makes sense, where core functions remain monolithic, and other components can go microservices.
CUSTOMER SUCCESS MODELS
Like customers, not all CSMs are built the same. And it depends, based on stage and strategy, as to how your CSM teams will evolve…...but they will. Gainsight proposes 5 basic kinds of CSM and a corollary org chart. But keep in mind IRL they all will be different hues. SaaSx has this model. Which one best resonates with you?
REFERRALS
Cracking the referral loop is a dream outcome, but making this work is pretty rare. Kyle Poyar has written a guide on how to do it ( a collab with Stefan Bader from Cello, makers of referral software).
TRUST
For #5 above to work, people trust people over brands when it comes to trust. Chart Mogul has posted an 'Ultimate' Guide to Using Customer Testimonials to Boost Sales, noting that a generic and insincere endorsement is just as helpful as not using anything. It's also possible to take it further by leveraging those frothiest customers into a referral channel.
MARKETPLACES
Marketplaces need more attention in this newsletter, so time to change that a little this week. a16z have the Marketplace 100. A ranking of the largest and fastest-growing consumer-facing marketplace startups and private companies. Instacart tops the list after some serious food delivery consolidation in that market, and the next 3 down are gaming and ticketing services - it will be interesting to see if any of that consolidates next year. One big marketplace problem, as outlined in this week's copy of Mostly Metrics, is that Marketplace-driven businesses are way behind other tech industry metrics across nearly every category - gross margin, revenue growth, CAC Payback, and Rule of 40 being the big ones. I mean, UBER literally just had its first-ever GAAP operating profit (Uber started in March 2009, so it only took a quick 15 years).
MARKETPLACE GROWTH
To add to #7 above, Two-sided marketplace businesses (such as Uber and Airbnb) face chicken vs. egg dilemmas when it comes to supply and demand. Here is a curated list from a16z's Andrew Chen on 28 ways to grow the supply side of a marketplace.
AI
Apple announced its foray into the LLM world twice last week with reports of continued conversations with OpenAI and the launch of OpenELM - an open-source model designed to run locally (iPhone chips inbound!) Are there too many LLMs on the Dance Floor? TechCrunch does the hard work with a list of all the cool ones. There is also a noted push towards AI-services (apparently a $4.6 trillion opportunity), which is all part of a newer push for AI to transition from "AI co-pilots" to "AI co-workers" that can complete tasks and workflows on their own.
CASE STUDY
PITCHES. Check out Alexander Jarvis's Pitch Deck collection. He has over 500 decks broken down by the good and the bad things people do. And here is something a little Meta from Khosla Ventures—apitch deck on how to pitch VCs and align your narrative to your deck (and all of your other materials).