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At the DEMO conference, Danielle Morrill, the founder and CEO of Mattermark presented an impressive statistic. Seed, Series A, Series B and Later Stage startups employ 1M people, up from 650,000 just six months ago, according to Mattermark’s data sources.

While it’s logical to think that the largest and fastest growing startups might employ the majority of startup employees because they hire at stupendous rates, this isn’t the case today. Impressively, Pre Series A company employment has boomed, increasing by more than 2x in the past six months. These seed-stage companies employ 450k.

Hortonworks filed their S-1 last week. Reading through the document, I noticed the company had quite a substantial fraction of professional services revenue; 41% of trailing 12 month revenue is services.

Of the companies we have studied in our S-1 analyses, Hortonworks generates more professional services revenue as a fraction of total revenue than any other company. But, many companies do book a meaningful amount of revenue from professional services. The chart above shows Veeva, Workday, Responses and MobileIron each generate 20% or more of their revenues from professional services (PS).

Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. Every month, more money comes in, without much effort. This is a powerful effect and can fuel SaaS companies to huge success, as we saw in New Relic’s S-1.

The concept of negative churn is a bit amorphous so let’s illustrate the impact on a startup. The chart above plots the revenue growth of a hypothetical SaaS company for a year. This startup acquires 100 customers per month, each paying $1 per month to use the product. And the company loses 5% of those customers each month, so only about half of the January cohort remains in December.

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders.

New Relic is San Francisco based, 534 person company providing tools for engineers to understand how well their code is performing. The company operates in the Application Performance Management category, which New Relic calls Software Analytics. Engineers insert code into their applications which sends data to New Relic’s servers. New Relic processes this data and provides interactive reports to identify underperforming code. New Relic charges by the server - the more computers monitored, the greater the subscription fee. Today, the company counts 250,000 users and 10,590 paying customers. An interesting sidenote: the name New Relic is an anagram of the founder’s name, Lew Cirne.

At the beginning, a startup is only people, a group of friends who share a passion to change the world in some way. There is no product, no brand, no management team, no PR, no swag, no internal processes, no hierarchy.

Over time, by virtue of all the effort of the people within the company, startups evolve into semi-autonomous machines; machines that acquire and serve customers with a great product in exchange for revenue.

The modern SaaS startup asks marketing to fill the top of the funnel, sales to qualify and close leads, and customer success to retain customers. Conceptually, this trinity works in unison to grow a business rapidly.

But sometimes, SaaS companies struggle with this model, particularly when churn rates increase in a business. The knee-jerk response may be to ask how to change the customer success team’s structure or incentives to increase the revenue at risk save rate (the fraction of dollars that might have churned, if not for the efforts of the customer success team).

Most interviews are a waste of time. According to Adam Grant, a professor of Organizational Behavior at Wharton, “standard interviews only accounted for 8% of the differences in performance and productivity.” The typical interview fails to predict performance accurately because it is subject to interviewer biases and candidate biases, and fails to compare the candidates with a consistent rubric.

In a talent market as competitive as today’s, startups who can more accurately assess candidates’ future performance will create a tremendous recruiting efficiency and ultimately execution advantage. Though no interview system will predict future performance flawlessly, structured interviews, work tests, and intelligence tests are three times more predictive than unstructured interviews.

Seed investments are booming. According to Crunchbase data, the number of seed rounds in US companies has grown by 10x in 6 years from 200 per year to more than 2,200 in 2013. This is driven by the expansion of the institutional seed investor and the tripling of seed stage capital available to founders.

With all that capital entering the market, seed round sizes have also increased. The top quartile seed rounds have expanded by 44% in 8 years, and by 75% since 2008. The 75% percentile seed round in 2014 totals $1.3M. Coincidentally, this seed round size maximizes a seed stage’s company odds of a follow-on Series A.

Most startups play defense when discussing pricing with customers. They dance between asking for too little, leaving money on the table, and asking for too much, only to lose the customer’s interest. The very best companies lead their customers in that dance. They use pricing as an offensive tool to reinforce their product’s value and underscore the company’s core marketing message.

For many founding teams, pricing is one of the most difficult and complex decisions for the business. Startups operate in newer markets where pricing standards haven’t been set. In addition, these new markets evolve very quickly, and consequently, so must pricing. But throughout this turmoil, startups must adopt a process to craft a good pricing strategy, and re-evaluate prices periodically, but at least once per year.

The median equity stake of US venture-backed post-Series A CEO has increased from 15% to 21%, a 40% increase in five years. This trend is also manifested in Series Bs, but as the chart above shows, post-Series C and D, total founder/CEO equity positions have remained constant.

Meanwhile the equity stakes of founding VP of Engineering and VP of Product have remained relatively constant throughout the same five year period across all stages of company.