I'm a partner at Redpoint and write daily, data-driven blog posts about key questions facing startups including how to fund raise, startup benchmarks, management best practices and team building. I co-authored the book, Winning with Data. Join more than ten thousand others receiving these blog posts daily by email.


How to Become Profitable Faster in SaaS

As the fundraising environment changes, some SaaS companies will look to reach cash flow break even on their existing reserves. Founders may reduce staff, particularly in recruiting or new projects that the company prefers not to finance. But there are three other ways to become profitable that limit reductions in force, enable the company to continue to grow with greater efficiency and increase the value of the company in the process.

Read More...


Mr. Market and the SaaS World

Mr. Market is a fictious character imagined by legendary investor Benjamin Graham in The Intelligent Investor]. Graham describes Mr. Market as emotional, irrational, moody - and is in the short run a voting machine, in the long run a weighing machine. It might sound like a children's story, but Warren Buffett lauded the book as the greatest book ever written on investing. So, has is halving of SaaS multiples the work of irrational Mr. Market or a change from the voting machine to a weighing machine?

Read More...


The 57% Drop in SaaS Valuations

What a difference a month makes. I wrote a post on January 10, 2016 called The Downward Pressure of Public Markets on Startup Valuations that depicted the slow decline of SaaS multiples in the public markets. Since then, multiples have compressed markedly.

Read More...


The Nature of Leverage in Fundraising Conversations Has Changed

Leverage. It's the key to negotiating. Classic negotiating books like Getting to Yes define the BATNA, the Best Alternative to Negotiated Agreement. If you were to walk away from a conversation, what's the next best choice? The BATNA singlehandedly creates leverage in negotiating.

Read More...


With Smart Software, Sell Ironman Not Robocop

When buying machine learning enabled software, it's easier to sell like Ironman than Robocop; a product that complements and augments the user's skills rather than a true replacement. As machine learning continues to become a key differentiator among SaaS products, a secular and positive trend, startups are learning how to sell the promise of the software better and better. These are some of the objections customers raise during those sales pitches.

Read More...


The 12 Things I Know About You

Here are the first three. You have a great need for other people to like and admire you. You have a tendency to be critical of yourself. You have a great deal of unused capacity which you have not turned to your advantage.

Read More...


Chained Probabilities in Startup Business Models

In 1983, Lorne Whitehead, a physicist from the University of British Columbia proved he could knock down the Empire State Building with 29 dominos. A domino can knock over an other domino one-and-a-half times its size. Whitehead's theory concretely demonstrates the power of a chain reaction. Like a series of dominos, a startup's success is a chain reaction.

Read More...


The Question to Ask Before Starting a Company in 2016

My father keeps a copy of Michael Porter's Competitive Strategy on his bookshelf. An imposing dark gray tome, Competitive Strategy is a business classic. I remember reading it sometime in high school, and not understanding very much of it. It was only six years later in a college macroeconomics class, my professor helped me understand the value of the Five Forces. For startups entering a period of increased capital cost, the wisdom of Porter's Five Forces is more important to consider now than they have been in the past few years.

Read More...


The New UI for SaaS - The Question

Quick. Casual. Human. Chat differs from other forms of communication. Because of these three attributes, chat seems to be reemerging as a potentially disruptive user interface for both consumers and business users.

Read More...


3 Questions for Startups to Answer for Themselves in a Volatile Fundraising Environment

65% of entrepreneurs believe that fundraising in 2016 will be more difficult than in 2015, according to First Round's survey. The volatility in the stock market, the steady erosion of public multiples, and the broad decline of seed, venture and growth investment in Q4 2015 seem to portend a repricing of the startup market. In light of those changing circumstances, entrepreneurs should prepare a few different analyses for 2016.

Read More...


Index