Tomasz Tunguz is partner at Redpoint
. I write daily, data-driven blog posts about key questions facing startups. I co-authored the
book, Winning with Data
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Public companies are often required to disclose the process of their acquisition. LinkedIn's sale to Microsoft is described step by step in an SEC disclosure and it offers both a peek into how these massive acquisitions are consummated, and also illustrates the best practices for how to run a process, both acquisitions and fundraisings.
About $1B has been invested in early stage SaaS startups as of November 1. Over the last nine months, marketing startups have raised more dollars in aggregate than any other segment. The chart above shows the early-stage investment dollars by buyer within the organization. Operations teams following second, with human resources focused startups in third. Notably, sales startups raised the least amount of capital.
At my first programming job, I met a colleague who took all his notes in XML. He liked the fact he could structure them well, create programs to search and process them, and display them in many different ways. Most importantly, he future-proofed his notes. Because they were structured, he could transform his notes into any new format. That was my first exposure into the world of productivity hacking.
The number of vendors selling to sales and marketing has exploded from 500 to more than 3000 over the last three years. Are we reaching the end of an expansionary cycle? The software pendulum tends to swing between software suites, offering a collection of different tools, and best-of-breed point solutions.
Demand generation is a critical limiting factor to the growth of many startups. I had the opportunity to moderate a panel of demand generation experts recently at Heavybit, an incubator in San Francisco. I asked the panelists, how well understood is demand generation, considering it is one of the core elements of business needs to sustain its growth? Unanimously, the panel concluded it's not very well understood.
Startups fail when they run out of money. Startups run out of money when they lack focus. Without a maniacal focus on serving customer needs in a unique way, startups can flounder amidst competition. Without product market fit, the business is challenged to generate strong metrics and faces fundraising challenges. That's why it's critical to identify and focus on your startup's competitive advantage.
What is the optimal contract length with for your SaaS startup? Monthly, annual, multiyear? It's common to see SaaS startups initially price their products on a monthly basis, then add an enterprise "Call Me" plan which hides behind it an annual contract. As the business increases its price point, it may eventually book contracts spanning two, three or even five years.
Why is this ad appearing on this site? This was a frequent questions both advertisers and publishers asked of Google. Behind the scenes, machine learning models match the best ad to the best website, given a set of constraints including budget and the dynamics of the ad auction. To untangle the decision chain across the many different targeting systems to answer the question is a knotty task indeed.
2016 has been a volatile year. Major capital investments fell 55% in Q3. The IPO market is a tale of two cities with some companies able to go public and catapult their valuations, but the overall number remains in the single digits. Last, M&A activity seems quite brisk with more than 30 $1B+ billion acquisitions in the last nine months alone. How do all these factors commingle to influence today's acquisition environment? And how does it compare historically?
I remember launching a new filtering feature a Google within the AdSense product. At the time, we had hundreds of thousands of website publishers using our user-interface to accomplish many tasks. They might download reports of their revenue from running AdSense ads, configure ads to match their website's style, and indicate their preferences for the content of the ads to be shown on their site.