The weekly top 10 for B2B tech operators · Every Friday
End of year is just around the corner - so it's Metric Review time. If you desire to build a data-driven organization in the new year, rigor and discipline have to be built around it. Sachin Rekhi's article discusses why metrics reviews should matter (TL;DR decision-making, inspection, intuition).
From CBInsights is a 67-page report covering the 11 laws driving success in tech. These law-isms cover concepts such as Amazon's 2-pizza rule, the 80/20 principle, and more.
SaaS P&Ls are structured in specific ways, as defining what goes into the cost of goods sold (COGS) section is essential. So, take a good read of what the SaaSCFO recommends to include for COGS and how to structure a SaaS P&L. According to the Author - 90% of them are structured incorrectly, 5% are close, and 5% are correct.
The three major providers — AWS, Azure, and GCP - remain dominant in the Public Cloud realm(65% combined as of Q2 23). Amazon's AWS remains, by quite a margin, the most widely used public cloud platform hogging about half of that 65%. Its cloud business has primarily driven Amazon's overall profits in recent years. In 2019, AWS was 50 percent of Amazon's operating profit, representing just 13 percent of total net sales. By the end of Q2 2023 it was 70%.
With all kinds of cyber attacks happening lately, it's time to hammer this home: Regardless of the size of your SaaS business, for 2024, security should be part of your dev cycle,but also know your weak spots. Founder Institute discusses 6 points of vulnerability in a tech stack that may be a bit leaky. Security should be rolled up into the process - DevSecOps being the new port-portmanteau, or is that SecDevOps? Heavybit also has a great article discussing cloud security challenges (as apparently, if we extrapolate this data from #4 above, two-thirds of SaaSis now sitting on Public Cloud).
Last week's Freemium post was popular. It's time to double down on pricing again this week with a featurette based on Paddle (aka Profitwell)'s 'State of SaaS Pricing in 2023' report. Some highlights for you: 94% of B2B SaaS firms update pricing yearly; The most common success metrics are average revenue per user (ARPU), 34%, followed by annual recurring revenue (ARR) - 18%; Free rules: premium-tier free trials dominate (44.2%), followed by freemium offers (18.7%).
Startups need to have a data-driven focus for growth. This article from ProductLed introduces the "Customer Scorecard"and highlights the power of a key metric, the "North Star" (see #1 above), to align team and user interests.
It's a common tech-ism in the tech industry that Innovation needs a lot of failure before success, something Startups and the industry often do not configure culturally. I agree from a design perspective - but this article also highlights that narratively, you should not glorify it - try to show a baseline of success (with good failures thrown in).
\<SIGH> Year to date, Women-founded startups raised 2.1% of the total capital invested in venture-backed startups in the US according to Pitchbook ($2.4B out of $125.85B ), which is ever so slightly higher than the 1.9% of all of 2022. If you think that is pathetic, read on - Black founders received just 0.13% of venture capital this Q, according to Crunchbase - $39.7 million out of $29.9 billion. This is a massive year-over-year drop (1.2% last year).
A continuation of #4 above - This case study covers the entire history of AWS and is a fun read - it also puts AWS's current ARR at $70B!
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