The Workplace of the Future

image

In this week’s New Yorker, Jill Lepore reviews Cubed: A Secret History of the Workplace, a book whose author asks the question, what is the work place of the future?

The information worker is a relatively new concept. Peter Drucker coined the term in the 50s. By then companies had already developed new ways of housing information workers. The very first information workers were accountants hunched over “Bob Crachit” desks in the back rooms of factories. Booming railroad companies demanded more organization and created offices within the new skyscrapers along the Chicago skyline. With these new offices came stacks of paper and folios, and cabinets in which to file them. Then, the Mad Men wrought an era of typewriters and mahogany corner offices. Next, Bell Labs invented the suburban office park, moving offices from the city as part of post-war suburbanization and in the 70s, Herman Miller crafted the now-ubiquitous cubicle, which was called the “Action Office” when it launched. Oh, the irony.

Read more

The 4 Challenges Facing Customer Success Teams in SaaS Startups

image Yesterday, I spoke on a panel at the Gainsight Pulse conference with Aaron Ross, the author of Predictable Revenue, Jason Lemkin of Storm Ventures who authors SaaStr, and Brian Stafford, a customer success expert from McKinsey. It was great fun to be on the panel and discuss how customer success is transforming SaaS companies by increasing revenue growth, decreasing capital needs, building better products and consequently retaining more customers. I’ve embedded my slides below.

Read more

Ruthlessness and Grit in Startups

Startups are in a state of perpetual change. During a startup’s first few years of establishing product market and winning the first set of customers, this state of change is obvious. But as a startup scales, the company must adapt by learning and reinventing. Whether it’s building the processes to grow the team, creating new sales and marketing initiatives to pursue adjacent customers, developing customer success teams or handling an unforseen crisis, this process of reacting to the market and evolving the company happens at every level in each function.

Read more

Startup Best Practices 7 - How to Use Andy Grove's Stagger Chart to Build Predictability

Predictability is sexy. Startups that have tuned their growth engines well enough to accurately forecast their growth, presuming these growth rates are attractive, will command much higher valuations in the market, simply because there is less risk in the company. As a result, investors prize these companies disproportionately.

The challenge with predictability is predictability isn’t an end state. A business doesn’t become predictable one day and remain in that state in perpetuity. Rather, predictability is a discipline that must be practiced by managers and management teams within startups.

Read more

The Worst Time of Year to Raise A Seed Round

image

Has there been optimal time of year to raise a seed round? The chart above shows the number of seed rounds by quarter of the year from 2009-2013. At first blush, it would seem that the first quarter of the year is the most attractive period to raise a seed round. But that’s a faulty conclusion.

First, there’s no statistical difference between the number of rounds raised in each quarter, according to a t-test on the four years of Crunchbase data I tested. Second, there is a meaningful difference in the size of rounds by quarter. The chart below depicts the mean and median size of seed rounds by quarter.

Read more

9 Books Every Entrepreneur Should Read

Some of the best content to be found about startups is locked in books. Thomas Kjemperud asked me yesterday for a 140 character recommendation of one book for founders. Reducing my list to just one and condensing an argument for why founders ought to read it in just 117 characters was just too great a challenge for me. Instead I’ve written a blog post about the nine favorite books I’ve read over the last five years have helped me understand startups and the processes that make them successful.

Read more

The Current State of the Consumer Internet Market

image

Last week, we reviewed the state of the public SaaS market and observed the average company had lost 33% of its value from their highs. How have newly public consumer companies fared in the same environment and what does that mean for the tech industry broadly?

I created a basket of most of the venture-backed consumer IPOs since 2010 and added bellwethers Facebook and Google. Above is a chart of these companies enterprise value (market cap minus cash) over the past six months. In that time period, the average public consumer company has fallen 25%.

Read more

A Framework for Maximizing Startup Marketing Effectiveness

image

At a board meeting last week, one of the VPs of Marketing I’m lucky to work with presented a brilliantly simple way of explaining the evolution of a startup’s marketing tactics. I’ve drawn a diagram of the idea above, which borrows heavily from McKinsey’s 3 horizons.

Startups have many different marketing options at their disposal: SEO/SEM, print, radio, TV, mail, affiliate, content marketing…The list goes on and on. Faced with this litany of options, how does a startup maximize their marketing effectiveness?

Read more

Surprising Trends in Startup Founder Equity Stakes

image

Earlier this week, I wrote about the increase in cash compensation and decline in equity grants to VPs of Engineering and Product in startups. I received a lot of comments about the analysis, and in particular hypotheses to explain the data. I dug a bit deeper into the data set to find an explanation.

Founding employees keep more equity today than ever through the Series A and Series B. On average, founders retain 30-33% more equity than 4 years ago through those first two rounds of institutional investment. For the statisticians out there, this change is statistically significant with greater than 99% confidence on an average yearly sample size about 200+ data points per year per role.

Read more

What's Happening to the SaaS Market?

image

What a difference three weeks make! Since I wrote “The Correction in SaaS Company Valuations”, SaaS company valuations have continued to fall. As a basket, SaaS companies have fallen 33% from their highs (median), wiping all the gains for the last year.

To make that point more explicit, below I’ve charted the total value of public SaaS companies over the last ten months. In that time period, the aggreggate enterprise value has fallen from greater than $150B to $117B today.

Read more