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.

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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The Compounding Returns of Content Marketing: The Data Behind Why Persistence Pays Off in Blogging

It is easy to write off content marketing as a waste of time. Effectiveness is difficult to measure; it is time consuming and the payback period on the investment is uncertain.

But unlike most forms of paid marketing, content marketing has a cumulative and compounding return. Each of the posts of a blog continues to attract traffic from SEO and social channels long after it has been published.


Below is a chart of the 9 most popular posts in the last 12 month on this blog. It is scaled to ...

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Throwing in the Towel on Google’s Go: What Programming Taught Me About Sales

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I started playing around with Google’s programming language called Go yesterday. There’s a tour of the language found here. Clearly, Go has been designed by a group of incredibly smart people and makes a series of terrific design decisions that enable a tremendous amount of flexibility and performance while reducing the amount of code an engineer has to write.

But after spending about 90 minutes running through the tutorial, I decided to throw in the towel.

It’s easy to become accustomed to a ...

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The Startup Sector That’s Quietly Booming

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I’m asked with some frequency which startup sectors are booming. Mobile messaging and big data are knee-jerk reactions at this point. But these days I often respond “financial services.”

In the last two years, financial services startups have been innovating impressively quickly and challenging some of the fundamental ways in which capital and credit are distributed. I count seven major categories of innovation to date:


Math Based Currencies/Payment Networks - Bitcoin might be the most well-known and best publicized math-based currency, but there are a ...

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The First Rails App I Built at Google

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At about 11pm on a Tuesday night in 2006, I began coding a skeleton CRM web app for our internal use at Google called Toothpaste that tracked the key details of our larger inside sales customers.

It was my first real Rails project after spending quite some coding Java. After I ran “rails server”, I watched the terminal as the program spit out a few lines from the built in app server, Webbrick, and refreshed my browser to see the Ruby on Rails Welcome page. ...

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