Tien Tzuo, the founder and CEO of Zuora and former CSO/CMO at Salesforce, knows SaaS businesses better than most. So when he pens an opinion about the subscription economy, a term which I believe he coined, I read it with great interest. Yesterday, Tien wrote "These Numbers Show That Box CEO Aaron Levie Is A Genius", explaining Box's business and growth in great detail.
When the meeting first appeared on my calendar, I incredulous at the idea of a management coach. "A business shrink who would sap another hour from my frenetic day," I thought. I was a few months into being a product manager at Google and stressed because I was in over my head. Most difficult of all, I lacked any type of formal authority. Google structured its product teams to have authority through influence, not direct management of engineering teams or marketing teams or sales teams. The brilliance of the engineers, marketers and salespeople I worked with amplified this challenge. We were all holding each other to very high standards. I walked into my first meeting with my management coach frazzled with the demands of the PM job and frustrated to be allocating an hour to the meeting.
If you visit Yahoo Finance today, type in the ticker of every SaaS stock, copy and paste the image into a document, you might create a chart that looks like the one above. A cursory glance at the plunging lines in most of these names might send you into a panic, only to tweet in alarm that the bottom is falling out of the SaaS market. Chicken little. Chicken little.
I've been following Casey Johnston's journey on Ars Technica to switch keyboard layouts from the ubiquitous Qwerty layout to the Dvorak layout with great interest and empathy. About six years ago, I went through the same process. It took me five tries to succeed.
Last week, we analyzed the fund raising history of billion dollar SaaS companies and determined SaaS startups are raising nearly twice as much capital as 16 years ago before going public. Given that trend, I wondered if there is there any truth to the idea that startups today require less capital than before to succeed. To answer that question, I've taken the same basket of public SaaS companies and computed a revenue-on-invested-capital (ROIC) across the four 4-year IPO cohorts from 1998-2014.
One of the cloud's great promise has been cost-reduction and for a while, we've chanted a mantra that startups require less capital than before to get started and ultimately succeed. As the number of publicly traded SaaS companies has grown with time, it's possible today to examine whether those statements are proven in the data, at least for those 41 publicly traded companies.
As I've described in a previous post, this blog's goal is to create and sustain relationships with readers across the startup landscape. Tuning the engine is proving much harder than I expected and I suspect content marketers are facing similar issues.
Last week, I had a surreal experience with Uber. It was mid-morning on Friday and I pushed a button to request an UberX as I walked out of Sightglass, the coffee shop deep in the South of Market district. When the car arrived a few minutes later, I got in. Without saying a word, the driver passed me his iPhone. Confused, I looked up from my emails and he mouthed to me, "I am deaf."
Earlier this week, I attended the Spring YCombinator Demo Day. I've been attending for six years now. Each time, I'm impressed by the intelligence, ambition and the polish of the founders presenting companies only a few weeks or months old. As I listened to the pitches, I wondered if the types of startups founders decide to build at YC has changed over time and whether those trends are lagging or leading indicators of the market as a whole. At each Demo Day, the YC team provides investors a list of all the companies pitching and I've kept a few. To get a sense of the broader trends in YC companies, I've compared the Winter 2012 class and the Spring 2014 class by sector (consumer v. enterprise), segment (ecommerce, education, social, gaming, delivery) and by revenue model (subscription, ads, transactional).