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Net Dollar Retention is one of the most important metrics is a SaaS business. It measures the value of a cohort of customers over time including expansion, cross-sell, and churn (loss of revenue). But how do you measure NDR?

Imagine this is your company’s data. The first column is the cohort month for each cohort in a year. The second column is the revenue of this cohort in their first month. The second colum is a random number between -20 and +20 that is the NDR for that cohort. The last column is the ending revenue of that cohort.

When we announced our investment in and partnership with Mattermost about a year ago, I wrote about a new architecture for SaaS. I’m starting to see that architecture more and more, but with a twist. The idea behind the new architecture is split a SaaS app into code and the data. The SaaS company writes, updates, and maintains the code. And the customer manages the data. Typically, the data resides in the customer’s cloud account.

Nathan Heller published an article called Is Venture Capital Worth the Risk? in the New Yorker. It’s a well-researched critique of the venture industry. The key question he poses is: has the industry become so large that it needs to be disrupted?

It’s a thought provoking question and a good opportunity to ask for feedback on how we can imrove. If you have ideas for how to improve venture capital for founders, please tweet me or send me an email with the link above. I’d love to hear them.

Today, the world’s most valuable brand is Apple. Forbes estimates Apple’s brand is worth $205B. Why is Apple’s brand worth so much? It’s the trust the brand inspires in consumers.

Apple customers know Apple the company. They understand the product philososphy, the history, the quality of typical Apple products, and the reputation for quality. A strong brand is the lagging indicator of having built trust. We won’t buy from people or companies we don’t trust.

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. DataDog, Slack, Crowdstrike, and Twilio round out the top 5 at 7 months or less.

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. In preparing for the session, I’ve learnt a lot about Nick.

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? by target buyer? by price point?
• How do sales team compensate their account executives and their SDRs/BDRs?
• At what stage do startups hire VPs and C-level executives in each go to market role?

Last year, we published the results on the Free Trial/Freemium survey and it was a huge success. We received more than 600 responses and the data was tremendously insightful. We hope to exceed those numbers this year.

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.

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?

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%. With SaaS penetration roughly 20-30% by our estimates, there’s several hundred billion in market cap to be created in the next few years. And incumbents desire as much of that as possible for themselves. I’ll guess a 15% increase from here or about $200B.