Payback period is one of the best composite diagnostic metrics of product market fit. I’ve written before about the benefits of short payback periods. In short, startups with shorter payback periods require less capital and also grow more quickly. In 2020, what is an excellent payback period[1]? Here is a group of publicly traded companies sorted by estimated payback period[2]. Zoom is at the top with a payback period of just over 3 months.
16 January
At this year’s Saastr Annual conference, I’m excited to interview Nick Caldwell. Nick has an incredible background. He started the PowerBI team at Microsoft and grew it from a small number of people to more than 300. He left to become VP Engineering at Reddit and tripled the size of the engineering team to 150 people in 18 months. And then he joined Looker as Chief Product Officer. In short, Nick has helped grow engineering and product teams from very small to very big three times.
13 January / data analysis
Go to market questions are some of the most common questions startups discuss in board meetings. This is especially true around the end of year because many companies develop their financial plans. To help startups understand how their go to market teams compare to peers, Redpoint has constructed a survey. You can find the survey here. The survey will answer questions like: How does the sales team structure differ by stage?
We are 12 years into the longest bull market in US history and this bullishness has powered the venture market. Investors deployed $117 billion in 2019 up from $106 billion in 2018.. This market has grown 20% over the last five years. It’s been go, go, go for nearly a decade. However, Q4 2019 saw meaningful dip from Q3, but it’s too early to say whether it’s an aberration, or the beginning of a longer-term trend.
05 January / sales / benchmarks / saas
If you’re starting a SaaS company, should you prefer to sell to B2B or B2C companies? And if you would like to sell to both, how should you allocate your sales teams? If you were to hazard a guess about the share of B2C vs B2B companies, what would it be? I often find myself wondering this question in a board room or reading through S-1s of soon-to-be-public companies. What are the demographics of the customer base and how are they reflected in the sales team?
19 December / trends
Here are my 5 predictions for 2020. The direct listing becomes the standard way for startups to go public in 2020. The idea has been proven by Slack and Spotify, and many others will follow. Most startups at IPO have plenty of cash and don’t need to raise more in the public markets. The direct listing enables them to go public without raising capital. The M&A market continues to surge. Software M&A in 2019 reached about $170B up from $136B in 2018, up 25%.
15 December / data analysis / trends
It’s been an incredible year and one I’m grateful for. The most gratifying thing writing this blog is the feedback from readers who say the content is useful. That’s the goal. Thank you for making this so much fun and deeply rewarding. These are the top posts of 2019 with some commentary and behind the scenes notes on each. 1.01^365 = 37.7 - The idea behind this post is that small, daily improvement leads to huge compounding gains.
In November, two spectacles occurred. The first is Dreamforce, Salesforce’s annual event and the largest software conference in the world. The second is Elon Musk announcing the Tesla Cybertruck. Benioff and Musk use these events strategically. They engender an operational cadence to Salesforce and Tesla. There’s no feeling like launch day. It’s the day you reveal to the world the sumtotal of your team’s efforts for weeks or months. That’s how I felt as a PM - a huge sense of urgency, anxiety and motivation.
Our portfolio company released the State of Conversational Intelligence 2020. The report uses data from 5m sales and customer calls to benchmark sales team performance. There’s lots of great data in the report. Some of the data reaffirms rules of thumb. For example, the typical win rate of a sales qualified lead is 19%. Other data points are surprising. For example, the average SDR dials 106 people to schedule one meeting.
18 November / marketing
Last week’s post on The Most Frequent Mishire in Startups generated the most comments on a post this year. In particular, it was this section. Though the startup may have achieved product market fit, the company may not understand the fit. Who is using the product and why? How does the buyer journey evolve with time? How do buyers describe the product amongst each other? Few early stage companies can answer those questions accurately.