Rise of Sales Development

SalesLoft put on an amazing event these past two days as part of their Rainmaker 2015 conference. With over 200 sales professionals attending, it’s clear that sales development is a major growth area. Two of my favorite sales speakers, Derek Grant and Allen Nance, headlined the early afternoon session. Modern sales development was popularized by Aaron…

SaaS Funding Relative to Recurring Revenue

Recently I was talking to an investor and he mentioned they were looking at a deal, liked the company, but were concerned with how much cash the startup had burned relative to current annual recurring revenue. For Software-as-a-Service (SaaS) startups, it’s especially difficult to get the business model going, and once it’s going, it’s especially cash-intensive…

SaaS Value Creation is Back-Loaded

One interesting aspect of Software-as-a-Service businesses is that most of the value creation is back-loaded. What I mean is that the majority of the valuation growth occurs in the later years, assuming the startup makes it there and has a rapid growth rate. Here’s an example five year trajectory with amount of recurring revenue and corresponding…

SaaS Metrics Cheat Sheet

ChartMogul has a nice new PDF online called The Ultimate SaaS Metrics Cheat Sheet where they’ve consolidated many of the key SaaS metrics from thought-leaders like David Skok, Christoph Janz, and Tomasz Tunguz. Here are a few key items from the SaaS Metrics Cheat Sheet: Monthly Recurring Revenue (MRR) – Amount of money billed monthly…

Consulting Services Revenue in SaaS

Several years ago I was biased against Software-as-a-Service (SaaS) startups offering consulting services. The previous thinking was that it was better for the startups to focus exclusively on recurring revenue and to hand off any consulting revenue to partners. Now, I believe the top priority is to deliver an amazing solution and make customers happy. While…

The Product Manager

In the tech startup world there’s a consistent theme that software engineers and sales reps are two of the hardest positions to fill as the company scales. Well, there’s an even harder position to fill and that’s the role of the product manager (thankfully, a larger number of them aren’t required for each startup). Here’s…