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. Join more than 20,000 others receiving these blog posts by email.

The Optimal Compensation Plan for Customer Success Teams

At the Gainsight Pulse conference yesterday, I moderated a panel with Boaz Maor, VP of customer success at Mashery and Mike McKee, SVP of customer success and services at Rapid7. During the panel, both men described their path to building substantial customer success organizations at their respective companies. Boaz's team numbers 60 people, and Mike's exceeds 160. Over the course of the panel, we discussed the ways to recruit, structure, and manage vibrant customer success teams.

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The Decreasing Follow On Financing Success of Startups

The rate at which startups are raising follow-on rounds is decreasing, and has decreased steadily from 2003 through 2013. Between 2003 and 2006, post-Series A startups raised series Bs about 57% of the time. However from 2011-2014, that figure fell to 28%. The same trend is true in series C rounds, where success rates fell from 43% to 35%.

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The First Mobile-Only SaaS Company

Mobile visits account for more than 50% of all e-commerce]. During the holiday season in 2014, that figure exceeded 70% for Walmart. In India, mobile usage dominates traffic to such an extent that Myntra, the largest retailer, is shutting down their web application to focus exclusively on their mobile apps. Instagram launched a website only after the mobile app reached more than 100M users. If the consumer world is any indication of the future, we should expect to see a massively successful mobile-only SaaS company in the next few years.

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How Great Unit Economics Enables Startups to Weather the Storm - The Story of WebEx

In the late 90s, one company changed its name five times before they settled on one which today is a well-known brand. The business started as Silver Computing in 1995, then Stellar Computing in June 1997. Six months later, the company would rebrand as next ActiveTouch Systems, then six months later to ActiveTouch Inc., and finally, six months before IPO to WebEx.

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Startup Best Practices #11 - Practice Negotiations Before the Meeting

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Which is a More Efficient Way to Build a SaaS Startup - Bottoms Up or Top Down?

An entrepreneur last week asked me if bottoms up businesses are more efficient software companies than top down sales processes. Because the bottoms up processes tend to rely on seemingly less expensive customer acquisition techniques like content marketing and in-product up-sell initially, this founder suggested, quite reasonably I thought, that bottoms up companies are more efficient.

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How to Make Pretty Charts

When I first started writing, I wondered how I could make charts like those in the Economist or in the New York Times, the beautifully formatted ones. After some research, I figured out how. And this post explains how you can do it, too.

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What an Acquisition of Salesforce Means for Startups

Rumors swirled yesterday that Salesforce, the $40B SaaS behemoth, had been approached by an acquirer. Dan Primack speculated this morning that Oracle and Microsoft are the likely candidates. If Salesforce were to be acquired, the SaaS ecosystem would change substantially.

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A SaaS History Lesson – The First SaaS Company's Exceptional Journey

The first SaaS startup started as a packaged software company. After selling floppy disks and CD-ROMs of expense software in computer software stores, the company changed models for the first time, and sold software licenses directly to enterprises. The company went public on this model in 1998. But soon after the crash of 2001, the startup's market cap totaled only $8M. So the business evolved again and became a pure SaaS business, selling software accessible to anyone with a browser. Thirteen years later, the company generated more than $600M in annual revenue in 2014 and sold to SAP for $8.3B, and it is one of the very few SaaS companies ever to achieve both positive revenue and cash flow break-even

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How Important Is It For a SaaS Startup to be Profitable?

The Information reported last week that in 2014, only 11% of tech IPOs in 2014 were profitable when they became publicly traded companies, an all time low stretching back to 1980, when the figure was 88%. This raises the seemingly absurd question, how important is it to be profitable for a startup? After all, growth is the largest determinant of valuation at IPO, not profitability.

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