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 Three Churn Mitigation Strategies of SaaS Startups

Every SaaS business suffers from churn. If churn isn't managed properly, the lost revenue from churned customers offsets new revenue and the business flat-lines or suffers negative revenue growth, which can be devastating to the business.

I've seen startups employ three patterns for offsetting churn: acquiring new customers faster, upselling existing customers to buy more software, or structuring pricing to grow with customers. Each strategy requires different levels of investment but achieves similar results. These strategies are often deployed in addition to a customer success team, which require their own investment.

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Quick and Dirty Product/Market Fit Validation: Can You Hit Your Quota?

How do you validate an idea for a product before it has been built? Last week, a founder of a SaaS business and I were wrestling with this question. It's a question without a universal answer. But we came up with quick and dirty rule of thumb for his business. Can he hit his quota?

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The Unexpected Compensation Trends of Post-Series A Startup Founder/CEOs

There's an interesting phenomemon occurring in founder compensation for post-Series A companies: founding CEOs are swapping cash for larger equity stakes in their companies. Founding CEO salaries, post Series A, have fallen by about 24% while founder equity has increased by 32%.

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Dream Teams: The Characteristics of Billion-Dollar Startup Founders

There's an endless debate in Startupland about the ideal founding team. Should the ideal team be entirely computer scientists? How important to success is having an MBA/business person? What about the stories of billionaire dropouts? I've aggregated the academic backgrounds of 30 of the top startups of the past few years and analyzed the make up of each of those founding teams.

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The Internet Subscription Startup is Winning

This week, Netflix announced its US userbase grew to 31M subscribers surpassing HBO for the first time. The magnitude of Netflix's milestone is hard to overstate. In a bid to compete with Netflix, HBO has partnered with Comcast, which serves 21M subscribers, to trial an Internet-only subscription plus HBO, the first time HBO is available to US consumers without a full cable subscription. It's a clash of behemoths. Separately, the NY Times revealed they have amassed more than 700,000 digital subscribers who provide upwards of 20% of circulation revenues and grow about 40% year over year...

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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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