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 16,000 others receiving these blog posts by email. Subscribe.

Maximizing the Value of Investor Referrals

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From time to time, entrepreneurs ask one investor for referrals to other investors. After all, investors network frequently, work together and have long term relationships with each other so a referral should go a long way. But not all introductions are equal.

The most successful investor-to-investor referrals are those where the referring investor is investing in the business and is seeking to fill out the round with complementary capital. By investing, the referring investor sends a strong signal to others about his/her excitement about the company. ...

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Why Support Software Is the Future of Work Email

In 2005, I started as a customer support rep in the AdSense team at Google. Over the next few months, I was trained in the art of handling hundreds of emails per day.

My training focused on using a customer service tool called Trakken that Google had acquired and heavily modified to enable AdWords and AdSense teams to manage the torrent of inbound support emails from customers. In AdSense, a team of fewer than 100 people supported a few hundred thousand customers almost exclusively through email with customer satisfaction scores ...

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Framing Your Startup’s Sales Pitch: Focus on Value, Not on Cost

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Sales pitches ought to frame a product in a way to maximize the chances of success of a sale. One trend I’ve been seeing in pitches is to talk about how software can save costs by reducing a customer’s head count. A pitch that focuses on cost savings by reducing staff should be delivered only after much consideration because of a few objections created in these pitches that might slow or halt the sales process.


First, the pitch immediately provokes opponents to the sale. ...

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Product Market Engagement: The Missing Step in Lean Startup Methodology

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Atul Gawande, the American surgeon known for his book “Better”, wrote an article in this week’s New Yorker called “Slow Ideas: Some innovations spread fast. How do you speed the ones that don’t?” He describes the challenges faced by healthcare institutions all over the world: despite the advances in research, the most difficult part of improving care isn’t availing doctors and nurses to these breakthroughs, but changing their behavior. Some doctors simply won’t wash their hands no matter how many times they ...

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Your Startup’s Office Is Missing a Room

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This week, I visited a startup whose office had a very unusual feature: a usability lab. There I was in a soundproofed room with a table in the center flanked by two chairs, one for a user and one product manager or UX researcher. On the table, a constellation of web cams record a user’s facial expressions and interactions with a mobile phone or laptop while a microphone captures the user’s voice.

It had been years since I had been in a similar room at ...

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The Three Phases of Startup Sales

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Earlier this week, I met an experienced head of sales. During our meeting, the candidate shared a simple way of thinking about a startup’s sales process that resonated with me.


A startup’s sales evolution contains three phases: beta, reference customer, ROI calculator.

Beta: A founder of the startup develops relationships with a handful of customers who will work in tandem with the company to design, tune and improve the product. Typically, beta customers use the software for free or at heavily discounted rates. These customers benefit ...

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The Five Characteristics of An Ideal SaaS Company

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With more than 80% of venture capital investments occurring in enterprise and with the public markets disproportionately rewarding SaaS companies with huge enterprise value-to-revenue multiples (median is 7.6), it’s no surprise that interest Software-as-a-Service is booming. After meeting quite a few SaaS companies, I’ve compiled a list of my ideal characteristics for a SaaS business below.


Characteristic 1: Product Is Core to the Operation of the Business The product is essential to the operation of a customer’s business. For example, Zuora enables subscription billing; ...

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Data, Data Everywhere, Not a Second to Think

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More and more companies realize their proprietary data contains insights that drive tremendous competitive advantage. Enabling an organization to make data driven decisions is a long term process. Below is the current big data adoption process and where we are within it:

  1. Companies generate proprietary data whose volumes can’t be handled by existing tools. The main adopters of these technologies are financial services, healthcare, genomics and web companies.
  2. Companies build or buying the tools and expertise to store and process that data. Major ...

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Why Starting a Company Is Completely Irrational

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I once read a book by Antonio Damasio, a neuroscientist researching decision-making from USC, about a man who had lost the capacity to feel emotions after he was struck by lightning. Much to my surprise, his man was totally incapable of making decisions.

His cognitive ability, the capacity to process and analyze data, remained fully intact. He could articulate the pros and cons of every alternative to each decision. His logical ability was flawless. But, he never could decide on an option.

There’s something indescribable about ...

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Peak Smart Phone: What Happens to the App Economy When Smartphone Penetration Reaches 100%?

We’re already seeing the impact to hardware vendors of peak smart phone. Over the past six months, Apple, Samsung and HTC share prices have fallen 20 to 25%. These share prices have tumbled because smart phone penetration is hurtling towards 70% in the US. True saturation has occurred in certain segments: 87% of 30 to 49 year olds with income greater than $75k own a smart phone.

Does the app economy suffer from the same challenge of decreasing growth as hardware?

Yes, it does.


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