I'm a partner at Redpoint and write daily, data-driven blog posts about key questions facing startups including how to fund raise, startup benchmarks, management best practices and team building. Join thousands of others receiving these blog posts daily by email.


Using Statements of Work to Accelerate Sales Cycle and Align Sales, Customer Success and Marketing

I met a really smart vice president of sales a few weeks ago working in a company with mid-market customer values in the $10-100k per year range. When I asked her about her sales process, she described how her team employs statements of work (SOW), which isn't something I hear about very frequently in startups, despite the fact they are very powerful sales tools.

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The Obscure Economic Idea Behind SaaS Pricing Challenges

Startups struggle to set the right price for their products because pricing dynamics in the field don't obey the laws taught in the classroom. The standard supply and demand curves, drawn above, imply that as price increases demand decreases; that buyers act rationally and that this law is immutable. But this simply isn't the case. Buyers in the market place violate the traditional supply and demand model all the time. For example, Veblen goods defy the traditional pricing theory.

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The 9 Marketing Disciplines of Great SaaS Companies

Bill Macaitis, the former CMO of ZenDesk, articulates how a SaaS marketing team should operate better than anybody else I've met. At a recent conference, Bill outlined the 9 marketing disciplines of great SaaS companies and how they fit together to create a marketing powerhouse. I've copied my notes from Bill's talk below.

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Why Revenue Isn't the Most Important Financial Metric for Startups

Of the ten most important metrics on a startup's financial statements, revenue might seem to be the most important. But it isn't. Gross margin matters more because it is directly tied to a company's ability spend to grow and achieve profitability.

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The Fastest User Interface

In "Time to Hang Up on Voice," Sam Lessin argues voice isn't the interface of the future for three reasons. First, voice is hard to use in public places because background noise complicates interpretation, and because many people are in earshot, voice isn't private. Second, speaking to computers is less efficient than typing or using gestures. Third, keyboards are better tools for editing text than voice. But I think he's wrong if for only one reason: speed.

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Benchmarking SaaS Startup Efficiency with Revenue per Employee Metrics

In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time. As Jesse Hulsing pointed out to me, examining this figure over five years reveals quite a bit about the health of the business.

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The Four Key Trends of the Startup Acquisition Market

The startup acquisition market is poised to have its best year in nearly a decade. If acquirers maintain the same pace from the first nine months of the year through Q4, more than 450 venture-backed startups will have been acquired, generating more than $25B in proceeds. Given this state of affairs, it's a good time to take stock of the major trends in the startup market. I've observed four.

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Benchmarking WorkDay's S-1: How 7 Key SaaS Metrics Stack Up

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. Today, we'll explore one of the enterprise behemoths, both in market cap and average revenue per customer: WorkDay.

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The Key Financing Attributes of Startups in the Billion Dollar Club

The WSJ published a recent chart of the 49 startups with billion dollar valuations. According to their research, there have never been as many privately held companies with such high valuations ever. The absolute number of these massively valuable companies alone is amazing. Ten years ago, most of them would have gone public by now. But what other insights can we tease from the data about these very special businesses?

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Why Personas Are Critical Product Development and Go To Market Tools for Startups

Yesterday, I attended an event held by the IT team of a major bank. When the data analytics team took the stage, I listened with great interest as the chief of the group described their internal struggles with data and the areas where startups might help them achieve their goals. He articulated his team's needs and goals in a very concise way by bucketing his users into three personas.

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The Unexpected and Uneven Evolution of the Startup Fundraising Market

I started working in venture capital three months before Lehman imploded. After the bankruptcy, the fundraising market contracted as investors internalized the new normal of the public markets. Over the past six years, the fundraising markets flipped from quite bearish to mildly bullish to extremely bullish. Or at least, that's the way it feels to me. I've struggled often to convey the magnitude of the change and its unevenness.

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Second Seed Rounds: How They Impact a Startup's Ability to Raise a Series A

The market for startups raising capital has changed dramatically over the past few years. Round sizes have ballooned: startups raise 50%+ more capital in Series As than a few years ago. The looming Series A crunch never occurred. Instead, we've seen the bifurcation of the Series B market. Series Bs are the spring of hope for some startups who raise megarounds and the winter of despair for others who must compete for increasingly scarce Series B dollars.

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Come Work on the Redpoint Software Team!

Come work at Redpoint! The Redpoint Software team would like to add a new associate to the software team in our Menlo Park office. We're looking for someone to work alongside the tightly-knit group managing Redpoint's early stage software practice. This person will work shoulder-to-shoulder with all the members of the team, discovering new startups, evaluating their market opportunities, working with portfolio companies, expanding the firm's network and contributing to investment decisions

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The Valuable Startup Equity That's Not Captured in Your Cap Table

I met a founder a few days ago who captured the idea of building brand equity really well. He said something along the lines of, "Every time we provide a magical experience to a customer, we invest in our brand equity. Each time we do something that disappoints them or overtly extracts value from our users, we expend brand equity." This founder prided himself on continuously investing in and increasing his business's brand equity over long periods of time.

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Benchmarking MobileIron's S-1: How 7 Key SaaS Metrics Stack Up

Founded in 2007, MobileIron is a leader in the Mobile Device Management sector. MDM provides enterprises software to manage the mobile phones and tablets of their employees. MobileIron provides three different products: a server product called Core to define and deploy security policies, a client product named Client that enforces these policies on each device and a gateway called Sentry that secures traffic from the device to the enterprise's servers. MobileIron employs a hybrid delivery model. The company delivers its product both as perpetual license software and as-a-Service. We will explore the differences in these delivery models and the implications for the business.

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