The weekly top 10 for B2B tech operators · Every Friday
Net Dollar Retention is getting harder to come by but never harder than new customer acquisition efforts. Top-quartile companies have been hit hard, seeing NRR drop from 119% to 107%. But at scale, more growth is from Expansion vs. New.
Tomasz Tunguz from Theory Ventures shares key insights on the evolving GTM landscape for SaaS. This is a great read full of good nuggets. TL;DR: 14-day trials convert best for free trials; Assisted sales (for example, follow-up from sales reps on trial leads) can boost conversion rates by nearly 4x, and Payback Periods and Quotas are both up in parallel (and AI isn't impacting conversion rate or ARR growth). The big takeaway is that to maximize SaaS growth focusing on enterprise NDR (Net Dollar Retention) targets of 120% is, like, the best idea ever.
ICONIQ has a GTM report out for 2024, showing that ARR growth rates have slowed, particularly for companies under $200M ARR. Sales productivity is also down for most companies, though those over $200M ARR saw gains. 54% of companies use PLG (up from 40% in 2023). Partnerships drive significant revenue for companies over $100M ARR, with three-year contracts becoming standard.
How you handle an inbound lead vs an outbound lead is quite different. Check this article from Jack Jorgovan on how Outbound leads differ (and how to close them). The team at predictable revenue have been running over 50 outbound sales experiments to find out what works best (and what doesn't.). Watch the whole series on YouTube. SaaS Weekly also has a guide on automating outbound emails by leveraging intent signals to drive better-targeted campaigns
Tomasz Tunguz makes a second appliance this week, highlighting AI's accelerating impact on business. As companies increasingly allocate budgets to AI (41% from new funding), those that best embrace AI's chaotic nature and measure outcomes will lead the next wave—and that may already be priced into public companies.
Product-Market Fit is a spectrum and a gradual one, moving through stages of demand, customer satisfaction, and efficiency. Success means balancing high customer needs with scalable growth. Check out this dynamic scale - it's pretty interesting as it enables measures across multiple dimensions.
Because we are in a weird time of Venture Capital (and the length between rounds is now much longer than a couple of years ago), we should all know the round-between-round differences: bridge rounds, extension rounds, and in-between rounds.
AngelList data shows that, on average, seed-stage companies have about 18 months to secure a Series A. Because if a startup isn't marked up by then, it's likely to stall.
Earlier this year, I referenced the start of the "AI Wars" for public cloud. But check this article from Tomasz Tunguz; we're going deeper into the GPU Wars. AWS's AI business is growing at triple-digit percentages YoY. But they are also saying that growth is limited by GPUs. Amazon and Google are also developing their own chips.
How many hours should founders work? Check out this analysis of YCombinator Founders. It's a 3-part series, but a good TL;DR is that pre-product-market fit founders work the most hours, with time spent decreasing as companies grow and gain traction. For many of us, it's a good read for a) Validation and b) Tips on managing work and time.
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