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Every investment requires a leap of faith, an emotional act that’s not pure reason, and that’s got to carry you through in the inevitable many months, sometimes years, of horrific bad stuff that comes with the company. And you’ve got to have that energy, that sustaining belief to carry you through, because if you don’t, then you regret having done it. So when I have regret, it’s when I didn’t have that, and I’d logically talked myself into [the investment] and checked the boxes. So it was really helpful [to have a failed investment] that taught me, ‘don’t invest like that.’ You have to have the love affair, and if you don’t, then you shouldn’t do it.

1. We are in the heyday of SaaS. The conference spanned 20+ buildings, served 60,000+ attendees and was sponsored by more than 300 vendors. Free food everywhere. Skullcandy wireless headphone giveaways. DJs in every corner. Four square play areas on fake grass outside. It is one huge party.
2. Benioff delivered a tremendous keynote. I wish I could speak in public with his confidence, control and passion.
   
3. Dreamforce created the perception that Salesforce is at the center of a huge ecosystem of their own creation, which inspires confidence in customers and partners.
4. Social is the buzzword. After the BuddyMedia and Radian6 acquisitions, this is no surprise.
5. Salesforce manages a torrent of brands: Chatter, ChatterBox, Do, Desk, Data.com, Heroku, Social Cloud, Marketing Cloud, Sales Cloud, Services Cloud, etc. It’s confusing to customers but indicative of their ambition.
6. At some point, startups will need to evaluate platform risk, asking hard questions like which categories will Salesforce compete or let others thrive.
7. Chatterbox is a well-built product. It lacks some of key features including security and documents association with client records (Box’s key feature), but it will get there. At Redpoint, we use Salesforce to run internal deal tracking and logging processes; we use Dropbox for file storage and Yammer for chatting. I could envision swapping out Dropbox and Yammer for Chatter and Chatterbox.
8. Marketing automation companies claimed the center of the expo with the biggest booths. Sales technology has outpaced marketing technology. Marketers are clamoring for the same insights from customer data. This demand is driving four bustling companies Marketo, Eloqua, Silverpop, and Pardot.

The excitement was palpable and indicative of the enormous wave SaaS has become.

At a recent meeting, David Barrett, one of the founders of Expensify, drew this diagram when explaining his company’s structure. He has overlaid the core teams of a company with a conversion funnel. It’s brilliantly simple.

As every SaaS startup transitions from development to growth, the company must supplement the engineering and product capability with sales, marketing and account management. This diagram is the simplest way to show how they work together harmoniously at a strategic level.

The throwaway line in pitches these days is “we’ll sell our data.” Most of the time, this notion is wrong.

Data is the most valuable outcome of building a successful product. It’s the insight, the secret, the keys to the kingdom. Don’t sell the keys to the kingdom.

Data provides economies of scale and insights used to develop huge barriers to entry and it should be kept within an organization. Internal data use is the path to building a huge business.

SMB SaaS companies cannot afford to pay for distribution. At 2 to 4% conversion to paid rates and $5 to $10 monthly subscription fees, the breakeven CPC for these products on search is $0.40. The average Google click costs three times this and the iOS average cost-per-install is more than twice as expensive.

The most successful SMB SaaS companies (Zendesk, Expensify, Square) build communities to drive distribution. Those communities reinforce and build a brand. And the brand drives subsequent organic distribution.

Culturally, we tend to associate leadership with extroversion and attach less importance to judgment, vision and mettle. We prize leaders who are eager talkers over those who have something to say.

Must great leaders be gregarious?

Susan Cain wrote an OpEd this weekend in the Times containing the quote above. In Silicon Valley, the culture seems very much to embrace the idea of introverted leadership. One might even say the two kinds of leaders live in harmony.

Last year, I set a goal of adding 100 followers each week starting at 2000. I crossed the 3500 follower mark on Twitter this week. I’ve fallen a bit behind that goal but I have a wonderful group of people who actively engage with me on Twitter who are interested in the same things I am.

As I’ve been cultivating this audience and community, I kept asking myself a question: who are most of these followers? Who retweets me? Who should I meet in person and build a deeper relationship with? In other words, how do I use social media to build a business development pipeline? I imagine this problem is common across social media marketers.

When serving B2B customers, your pricing will be dictated by your customers' margins. The more money they make, the more they can pay for new technology.

Most businesses fund new initiatives including marketing and technology projects from profits. The more profits a company generates the greater their willingness to pay for services and ultimately the larger the market size for a startup.

Let’s compare the margins of grocery stores to restaurants to software companies to prove the point.

“Facebook has built the cities, they’ve built the town squares”

Dave Morin, founder of Path

Is building a social network is like building a city? I watched Urbanize, a documentary describing urban design and the affordances cities must make to cultivate vibrant communities. The words of urban designers echoed many of the challenges faced by networks as they grow.

First, both must balance growth and community. Growing a city from 1M to 10M is like adding 900 semi-close friends to your top 100. All of a sudden, the community has a different vibe - each person recognizes fewer and fewer other people (it’s an n-squared problem, after all). It’s challenging to maintain warmth and the closeness of a tight knit small town. This is the tension urban designers and product managers must manage.

It’s a common refrain that venture backed IPOs have struggled in the past decade. For a long time, I believed and wrote supporting arguments underscoring the idea that the principal causes of this decline were Sarbanes-Oxley costs, decreasing equity coverage and decimalization of exchanges. But that’s wrong.

A paper published earlier this year uses statistics to debunk these hypotheses. In “Where have all the IPOs gone?”, a team of statisticians concludes small cap tech IPOs are struggling because today’s public candidates aren’t profitable when then file. Nor are they very profitable at all.