Hi, I'm a partner at Redpoint. I invest in Series A and B SaaS companies. I write daily, data-driven blog posts about key questions facing startups. I co-authored the book, Winning with Data. Join more than 18,000 others receiving these blog posts by email.

How Much to Compensate SaaS Sales Teams for New Sales, Renewals and Expansions

As a SaaS startup begins to reach critical mass, the business generates more of its revenue from upsells and expansions, reaching about 30% at between $40-75M in revenue, which is in line with some of the models we've created. Many times startup teams ask how to compensate a sales team for renewals and upsells. The 2016 PacCrest Survey contains a wealth of information about these types of go to market questions.

Read More...


The Limitations of Data and Benchmarks

Numbers provide us a certain certainty. With their precision, they offer a sense of black and white, in or out. But, metrics alone aren't enough. All the quantitative analysis in the world won't lead me to the next great idea for startup. Those figures can't create empathy, develop the right culture, or hire the right people. I've been thinking about this quite a bit because in both the recent Software Engineering Daily podcast I did with Jeff, and the presentation I gave at Launch Conference, the question of the limits of metrics surfaced.

Read More...


How Should You Allocate Your Startup's OpEx between Sales and Engineering?

Earlier this week, I published benchmarks on What Percentage Of Revenue Should SaaS Startups Spend On operating expense? Several founders asked to see this data broken down further. What fraction of operating expense is spent on sales & marketing, and what fraction of operating expense is spent on engineering? Most businesses spend 2x more on sales & marketing than engineering.

Read More...


How to Create Competitive Advantage for Your Startup with Proxy Metrics

Imagine you've just been named the head of a bustling New York City restaurant challenged by one issue - customers complain about the customer service. A data-driven person, you search for a metric to evaluate the current customer service to validate the complaint and then track as you experiment with the restaurant's operations. What metrics would you employ?

Read More...


What Percentage of Revenue Should SaaS Startups Spend on Payroll?

In 2001, Salesforce spent $35.6M on payroll and generated $5.4M in revenue. NetSuite spent $38M on payroll generated $17M in 2004. as both of these companies scaled and approached IPO, the operating expense ratio (OER) or operating expense divided by revenue, asymptotes to 0.8. For every dollar of revenue, both of these companies spent $0.80 in payroll at scale.

Read More...


The Customer Support Experience of the Future

A few weeks ago, I had first my customer support experience of the future. I was in a meeting when my Android's caller ID told me American Express was calling. I stepped of the conference room and answered the call. A machine-generated woman's voice identified itself as the American Express fraud department. "Do you have a bluetooth headset or headphones you can use with your phone?" she asked.

Read More...


How to Build Auction Pressure in Acquisitions and Financings

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.

Read More...


Trends in Early Stage SaaS Fundraising Market of 2016

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.

Read More...


Task List Zero - When Inbox Zero Isn't Enough

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.

Read More...


Are We Seeing the Beginning of SaaS Consolidation?

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.

Read More...


Index