I'm a partner at Redpoint
. I write daily, data-driven blog posts about key questions facing startups. I co-authored the
book, Winning with Data
. Join more than 20,000 others receiving these blog posts by email.
When I die, I want all the people with whom I worked on group projects to lower me into my grave, so they can let me down one last time. Someone once sent me this e-card as a joke. I laughed and laughed, and never forgot it. I can't remember a school group project which teammembers contributed equally. Paradoxically, I bet everyone in the group felt the same way.
Ten years ago, Guy Kawasaki took this photograph of me. I was attending my first YCombinator Demo Day, maybe three months into my time at Redpoint. Much has changed. I'm am not as young or as green. YCombinator has thrived and scaled. And the startup demo has disappeared.
The average English sentence has been shortened by half over the last five hundred years. Read the first sentence of the Declaration of Independence to see why. It is 71 words long and contains 8 recursive clauses. I read it ten times before I understood it. I have 48 seconds with you, my reader. No time to mince words. To reach more people with your content, shorten your sentences and ditch the jargon.
A dollar today is worth more than a dollar tomorrow. This statement underpins all of finance. The idea has a fancy name - the Time Value of Money. It applies to all types of investments, including startups. Time Value of Money is the economic argument for startups to raise money when it's available.
The Ideal Customer Profile. The perfect customer. Can you describe it for your startup? The more precisely you can describe it, the better. That will simplify disqualification. But articulating the ICP well isn't enough.
Yesterday, Salesforce announced it will acquire Mulesoft for $6.5B. A recent addition to the list of public software companies, Mulesoft is a tremendous business. The company generated $297M of revenue in 2017 at a 73% gross margin, and grew by 58%. Salesforce is acquiring the business for an astounding 21x enterprise value to trailing twelve months revenue multiple - nearly 2x the next closest.
Recently, people have been asking just where are we in the SaaS valuation cycle. I last updated the chart above more than six months ago. The answer is close to ten year highs.
In the US, the median seed round has nearly quadrupled over the past seven years. In the mean time, seed investment has grown more than 7x and then fallen to a bit more than half of the high. As the market has grown and retrenched during that time period, I've been wondering about the geographic diversity of these seed dollars. Throughout these cycles, are startups in other states benefitting? Are they increasing their share of investment dollars?
It's one of the most important questions a CEO can ask. Why does our sales team lose potential sales? One of the companies I work with, Chorus, listens and analyzes sales calls to provide insights to heads of sales and account executives. Chorus explored the reasons account executives lose sales opportunities.
Recently, I met an exceptional marketer. She described the purpose, strategy and tactics of a marketing department remarkably succinctly. Marketing's methods can seem intangible. But she explained them simply and elegantly. I drew the chart above based on her vision of marketing's roadmap.