05 September / best practices / management
I’ve playing with a new mental model for early-stage startups: a pendulum. This pendulum oscillates between the limiting factors of the business at different stages. There are only two limiting factors in this mental model: product and go to market. At the moment a startup is founded, the business is product limited. You can’t do much without a product. After the company establishes product market fit, the pendulum swings to go-to-market.
There’s a new debate about marketing efficiency recently, and it’s an important one in the era of product-led growth. If a startup has great net dollar retention (NDR), should it be willing to increase its customer acquisition spend proportionately? I remain a believer that months-to-repay is the best metric for measuring customer acquisition efficiency for a single reason. You know the answer immediately and accurately. With the annual contract you have in your hand and the amount of money you spent in sales and marketing to acquire a set number of customers in a period, you know exactly your MTR.
26 August / s-1 analysis
Recently, we’ve seen a series of product-driven companies building huge customer bases with tremendous account expansion and terrific sales efficiency. DataDog is no exception. DataDog provides a very popular IT monitoring solution that has grown from its founding in 2010 to a huge business. During that time the product has grown from infrastructure monitoring to application performance management, logging and user experience products. The company published its S-1 Friday. DataDog counts more than 8800 customers, 590 of which spend more than $100k, and 40 of which spend more than a $1M.
08 August / trends / data analysis
Which sectors see more startup company formation than others? The answer has changed quite a bit over the last 8 years. Some sectors have hit their apogee and are declining. Others have grown by more than 3x. Yet others are growing geometrically. Let’s take a look. Hot Spaces Artificial Intelligence - yes, it’s a buzzword but it’s more than that. AI or Machine Learning is a new technology that will benefit nearly every type of sector and we’re still in the very earliest innings.
05 August / best practices
Earlier this year, I read Algorithms to Live By, a book that explains how to use insights from computer science in daily life. One of the rules is the 37% rule. It’s an important rule because it’s broadly applicable. But I had forgotten about it until I listened to the author on the Software Engineering Daily podcast. The 37% rule says that if you have a decision to make, you should spend 37% of the amount of time you have.
If you must choose a long term headquarters for your startup, call an executive recruiter who focuses in that city. Ask her about each of the key roles your company will need to hire in the next 2 to 3 years. VP Engineering, VP Product, VP Sales, VP Customer Success, VP Marketing, or VP Operations. How large is the candidate pool for each search? Which are the hardest searches to complete in this geography?
29 July
My perception of books was shattered in first grade. A friend and I were arguing about the extinction of dinosaurs. “It’s right here!” I yelled pointing to the book in my hand.“A meteor crashed, cooled the earth, and killed all the dinosaurs.“ My friend countered with a book of his own. Volcanic eruptions had blackened the sky with ash and cooled the earth, he recited. Locked in stalemate, we appealed to a higher authority.
A little while ago, we were lucky to host Guillaume Cabane at Office Hours in a new format: 30 minute 1-on-1s with a few companies. It was a huge success and a format that we will continue because of all the learning. Guillaume was kind to share some takeaways from the event below. If you’re in B2B SaaS, you most likely have a finite TAM. For the love of ARR, please get the exact list of all accounts in your TAM (at least US).
19 July / trends / data analysis
I’ve written before about the Jacob’s Ladder of Fundraising. The Jacob’s Ladder is a children’s toy that flips over, and it’s a great metaphor for the seed market. Seed rounds are rapidly approaching and now often equal to the sizes of Series As just five years ago. The chart above shows the mean round size in the US across. As the Jacob’s Ladder flips, a series of important strategic questions arise in the market.
15 July / data analysis / trends published the Enterprise Tech 30 last week. It’s a coaches poll of the top enterprise startups broken into early, mid and growth stage. Congratulations to all the companies and in particular, the 8 Redpoint companies on the list: Mattermost, Cockroach Labs, LaunchDarkly,, AppZen, Snowflake, Hashicorp and Stripe. Coaches polls are fun because they provide a different perspective on the market. I analyzed the data set and added a few columns to it to see if there are any trends.