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Recently, we examined the comparative efficiency of bottoms-up and top-down businesses. Today, we’ll dig into valuation metrics to see if there’s any systematic bias in the investor community for SMB, Mid-Market and Enterprise SaaS companies.

Using public data, I categorized the 50 or so public companies by ACV at IPO. SMB is less than $10k, Mid-Market is between $10k and $100k, and Enterprise is greater than $100k in average customer value.

How fast could a SaaS business grow on paid acquisition? If the business decided today to sprint and acquire as many customers as possible?

We can model it with some assumptions, some of which are quite aggressive. Let’s take a startup with $1.2M on the balance dedicated to customer acquisition. Assume a $10,000 CAC, an 80% gross margin and a payback period of 12 months. We’ll assume customers begin to pay the month after they sign up, and all this math implies customers pay a monthly fee of $1042 ($12,500 ACV over 12 months). Assume zero net churn and no impact of the crush of new customers on sales or support.

When an SMB SaaS startup is young with quickly growing revenues, more of the same works. A $1M ARR SaaS startup with an average selling price of $750 per year needs to add 1,333 each year on average to double.

Fast-forward two years when the company is at $5M in ARR and the business needs to be adding 13,333 customers each year. At $25M in ARR, suddenly the 100% growth figure demands 33,333 customers.

Like many others, English is my second language. As I learned over time, there’s a particular way of ordering adjectives in English to make yourself understood. Opinion. Size. Shape. Condition. Age. Color. Pattern. Origin. Material. Purpose. Noun. That’s the order most of the time.

When I say a unique large curvaceous second-hand modern orange checked Italian carbon fiber racing car, it rolls right off the tongue and you imagine a sleek, if garish, Lamborghini. But if I alter the order just a bit to say carbon fiber checked Italian orange racing second-hand curvaceous unique modern car, I’ve lost you in adjectival gobbledygook.

If I made a word cloud of the terms in 2016 that dominated Startupland, burn would be among them and perhaps the largest. On the contrary, burn would be absent from the 2015 list, replaced by unicorn. Starting in the end of 2015, Public companies have markedly shifted the way they manage their businesses pushing toward cash flow positive and net income positive. In parallel, startup founders and CEOs have markedly shifted the way they communicate and manage their businesses.

In Startups are Risk Bundles, Leo Polovets outlines the risks startups face as they grow. In particular, Leo identifies common mistakes when addressing that parcel of peril. Addressing minor risk by spending time and effort on low priority or low impact risk a common failure mode for companies. The business isn’t focused on the most critical issues.

One founder I met recently took this idea to heart. On the last slide of his presentation, he listed the four key existence risks facing the business today. In the adjacent column, he wrote the strategies he intends to employ to mitigate those risks.

Creating and optimizing a sales plan for an early stage SaaS company is a challenging task. There are lots of different variables to manage and the truth is it’s always a work in progress even for massively successful businesses. But at the very earliest days, where do you start?

Quota is a function of number of deals closed, sales cycle, price point and conversion rate. When a SaaS company is just releasing its products, none of these are known figures. What is the sales cycle for product that is not yet in market? What is reasonable conversion rate from lead to meeting, and meeting to close? How many prospects can we sell in a month?

If your SaaS startup were to trade in the public markets today, what would it be worth? The true answer is we don’t know, but we can approximate it by comparing it to the other publicly traded SaaS companies and benchmarking the business by its growth rate.

The chart above shows the median multiple of public SaaS companies by growth rate bucket, 25%-49%, 50%-74%, and 75%+ trailing twelve month revenue growth rate. Each color represents a different year.

Jeff Wiss has managed demand generation and corporate marketing for some iconic software companies. MySQL, the most valuable open-source acquisition; Zendesk*, the $3B leader in customer support software; DataStax, The business commercializing Cassandra; and most recently Duo Security*, an Ann Arbor-based trusted access company that has some of the most sensational SaaS metrics I’ve ever seen.

Recently, I had a chance to talk to Jeff and learn about the unique strategies they employ to drive one of the fastest growing and most efficient SaaS companies in the market today. These are three of the insights he shared with me about Duo’s marketing and customer acquisition strategies.

It’s no secret I believe speech is the next input mechanism. We are in the Voice-to-Text Era. I wrote in late 2014 that speech is the fastest user interface, and the newest speech recognition experiments confirm it.

Andrew Ng, a luminary in the world of machine learning, and his teammates at Baidu, Stanford and University of Washington have developed Deep Speech 2, a neural network based speech recognition system. They tested the speech and accuracy of the system and compared it to people typing on their mobile phones.