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.

Anticipatory Commerce: the Evolution of Intent on the Web

Intent to purchase is the engine of the consumer web. Creating and capturing intent motivates almost every dollar invested into ecommerce and advertising. Intent is also the fuel for the Internet's most successful business model, Google's AdWords + Search. As the internet has evolved, so have the ways of creating and capturing intent. Each new technique has leveraged data in a novel form to discover consumers' wishes. I believe we're at the beginning of an entirely new wave called anticipatory computing.

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A Startup's Rosetta Stone: How to Succinctly Communicate the Details of a Business

Financial statements are the Rosetta Stone for a business. They are the most succinct way of communicating how a business operates to management teams and boards, who weigh the trade-offs of different investments. In the early stages of the startup, financial statements aren't used much as a management tool. They are most often used to keep an eye on monthly burn rate....

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The SaaS Valuation Bubble

In the past 24 months, something extraordinary has happened. The value of publicly traded SaaS companies has grown by 200 to 400% while the underlying customer unit economics of those businesses hasn't changed...

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What a Dog and a Monkey Taught Me About Management at Google

At all hands meetings on Tuesday afternoons, our 75 person AdSense Ops team reviewed the most important metrics for the business: top-two box customer satisfaction scores, revenue growth and customer churn. But unlike every other all hands meeting I attended, these meetings ended with a monkey and a dog...

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Silicon Valley's Library

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When I was a teenager I read a book called Barbarians at the Gate about KKR’s leveraged buyout of RJR Nabisco. Two journalists detail the dramatic struggle for power and control of the company between Henry Kravis of KKR and Nabisco’s CEO Ross Johnson. From that point, I was hooked on business history.

In the valley, there’s a massive collection of verbal history that is passed around. There are anecdotes of Google’s early days with a high burn rate, personal chefs, unbending founders and without ...

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Using Gaming Product Hacks to Maximize Freemium SaaS Growth

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Freemium SaaS and free-to-play games have a lot in common. If you’ve ever harvested crops on Farmville or raised an army in Dragons of Atlantis, you’ve experienced an aspirational product. The same is true if you’ve signed up to use a freemium CRM, expense reporting tool or note taking app.

Freemium SaaS businesses, like free-to-play gaming companies, seek to build a large funnel, extract data from the free users, and leverage that data to increase the conversion and retention of users into long-term paying customers.

...

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How Much Should Your Startup Spend on Managing Churn?

It’s an important question and one that arises most often as a SaaS startup scales. Churn, masked by growth, becomes a limiting factor of growth. How much should the business invest in managing churn?

Our SaaS benchmarks from earlier this week tell us the average public SaaS company has a 3% monthly revenue churn or a 2 year lifetime and a sales efficiency of 0.8, which implies a 5 quarter pay back period on cost-of-sales and cost-to-serve.

Using those numbers, the contribution revenue chart for a typical ...

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The Two Characteristics of Seamless Mobile Payment Experiences

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Paying for an Uber is a breeze. I step out of the car and go on my way. Behind the scenes, Uber has identified me, recorded my fare, added a gratuity, and sent me a digital receipt that I can easily forward to Expensify.

That’s the way I want all my payments to be.

Paying for Uber with a mobile phone is less work than using a credit card, which is the biggest competitor for share of wallet of in-person payments. As one of ...

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The Optimal Blog Post Length to Maximize Viewership

BhutanBook-640-CC.jpg Bhutan, the world’s largest book at UWashington Library

Anyone who has ever penned a blog post has asked, how long should this post be to maximize viewership? I’ve often wondered the same thing, particularly in the moment before I click the publish button and broadcast a perhaps-too-short-perhaps-too-long post into the Interwebs.

I’ve written 256 posts in the past 18 months and I sought to understand the impact of word count on every metric I could measure: page views, time on site, time on ...

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Why Customer Success Is An Essential Part of Every SaaS Startup

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If a typical SaaS business loses about 2 to 3% of their customers each month to churn, the business must grow by at least 27% to 43% annually to maintain the same revenue.

The idea written as an equation:

Revenue Growth = Customers x Avg. Contract Value x (Growth Rate - Churn Rate)

At the beginning of a SaaS startups' life, when the company generates $1M in annual revenue, churn in absolute dollar terms is small, about $300k for the year. This ...

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