Content marketing is one of the most powerful marketing tools startups can employ. Blogs are powerful drivers of awareness and creators of purchasing intent which ultimately lead to new customers, new employees or other new opportunities. This is doubly true as buyers are educating themselves before contacting sales teams to a far greater extent than ever. Below are the five things I wish I would have known when I first started writing this blog. I hope they are useful for anyone designing or redesigning a content marketing strategy.
I've been reading Creativity, Inc., a history of Pixar and autobiography of Ed Catmull, the founder and CEO. Given how captivating Pixar's seminal movies, I wasn't surprised to find the book is engrossing and well written. But, I was dazzled by the wealth of management wisdom the book shares. These are my five favorite bits from the book so far.
Salesforce went public more than 10 years ago. This harbinger of subscription, internet delivered software created one of the most exciting waves in software and the single most valuable SaaS company today, worth $37B as of this writing.
In 2015, SaaS companies trade at a 30% lower multiple of revenue than last year. In early 2014, the typical SaaS company traded at about 9.2x their next-twelve-months of revenue. Since August 2014, that figure has dropped by about 30% to about 6.0x.
Figuring out how much capital your startup may need to raise will inform lots of different strategic decisions. A startup's growth rate is often highly correlated with the amount of capital it can invest in sales and marketing. More customers means more bookings, which means more capital and so on.
The best teams share two common attributes, according to an MIT research.
SaaS startups are growing faster than ever before. Publicly-traded SaaS companies founded from 2008 through 2014 needed 50% less time to reach $50M than their counterparts founded between 1998 and 2005. I stumbled across this trend when looking at a different chart used in my S-1 analyses that compares the time to $50M for each of the 51 or so publicly traded SaaS companies.
We've seen a sudden decline in SaaS pricing. In the past 3 years, the median Average Revenue by Customer of SaaS companies going public has dropped by about 70%. But has the shift towards smaller customers, shorter and faster sales cycles created less profitable businesses?
There's a SaaS company on the other side of the world founded nine years ago that is worth $2B, generates $100M in annual revenue and growing 80% year over year. Based in New Zealand, Xero has built a widely adopted small-to-medium business (SMB) accounting solution that counts 371,000 paying customers, a figure that grew 76% in the last 12 months. Amazingly, 30% of New Zealand GDP is processed by Xero.
Christoph Janz, one of the best seed stage SaaS investors, published a great tweetstorm on the state of the SaaS ecosystem yesterday. I've copied it below.
These are my two favorite devices from 2014. I use each one on a daily basis and both have changed my life in a meaningful way.
After writing about B2C2B companies last week, I received a lot of great comments about the differences between the B2C2B models, particularly the sales models after a company has acquired the initial Consumers. These are three sales models I've observed B2C2B companies use to convert the initial momentum with consumers into dollars.
Since LinkedIn's IPO in 2012, the company has grown its market cap by 6x and as of this writing is worth about $27.5B. Second to Salesforce, LinkedIn is the second largest SaaS company in the world. Unlike most SaaS companies which are B2B, LinkedIn is a B2C2B company. LinkedIn attracts hundreds of millions of consumers to post resumes online and sells this data and access to its audience to advertisers and recruiters and salespeople. The intrinsic data and people network effects of the business create reinforcing feedback cycles that have helped the business achieve tremendous revenue growth.
This week, an entrepreneur told me his startup is a B2C2B business. It was the first time I'd heard this acronym, and I thought it was a genius moniker. B2C2B succinctly captures the critical part of the new customer acquisition model powering many enterprise startups: winning hearts and minds of the intermediate consumer, the employees of a company. B2C2B models are behind much of the innovation in every part of the enterprise stack, from applications to platforms to infrastructure.
What percentage of SaaS IPOs in the last four years have the founding CEOs of the business been CEO at the time of IPO?