Discover and read the best of Twitter Threads about #SaaS
Most recents (24)
Met another VC in India today who was concerned about whether I would be moving my early-stage #SaaS to the US (since all our customers are there).
@SeanB @LakshmanThatai @mrgirish @svembu @prasanna_says @skirani @sureshsambandam @avlesh @cbkrish
@SeanB @LakshmanThatai @mrgirish @svembu @prasanna_says @skirani @sureshsambandam @avlesh @cbkrish
I find selling #SaaS from India to SMB US companies way easier when I’m based in India. I am a US citizen with a predominantly India-based team.
VCs in India ask me about whether I am moving far more than US VCs. I find this odd since they should understand the productivity benefits better than most, given most of their LPs will probably be in the US.
Who are the top HRIS players in SaaS? Check out the chart below from my 4th annual survey.
#HRIS #saas
Quick summary below with more details.
#HRIS #saas
Quick summary below with more details.
HRIS Highlights
HRIS by Company ARR Size
Gusto appears to dominate the ARR categories up to $4M in ARR. ADP and Gusto are very close in the $5M to $10M range and then ADP takes over at $11M ARR and above.
Gusto appears to dominate the ARR categories up to $4M in ARR. ADP and Gusto are very close in the $5M to $10M range and then ADP takes over at $11M ARR and above.
Hey, SaaS founders and finance pros, have you heard of Remaining Performance Obligations (RPO)?
It's a required disclosure for public SaaS companies and provides forward-looking revenue visibility.
Quick thread. #saas #RPO
It's a required disclosure for public SaaS companies and provides forward-looking revenue visibility.
Quick thread. #saas #RPO
RPO is the value of contracted revenue that SaaS companies expect to recognize in the future from existing contracts with customers.
It's an important measure of a company's revenue visibility and backlog.
It's an important measure of a company's revenue visibility and backlog.
Salesforce's (CRM) definition:
The “contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods.”
The “contracted revenue that has not yet been recognized and includes unearned revenue and unbilled amounts that will be recognized as revenue in future periods.”
Your cash balance is the result of the decisions you make every day in your business.
If you're in a cash-burn mode, you must have a path to profitability. Understand the levers to pull with my 5 Pillar SaaS Metrics Framework.
Quick summary. #saas
If you're in a cash-burn mode, you must have a path to profitability. Understand the levers to pull with my 5 Pillar SaaS Metrics Framework.
Quick summary. #saas
I use my framework as a roadmap to financial transparency and better decision-making in SaaS.
Move from left to right. Right metrics for the right stage of your business. #metrics
Move from left to right. Right metrics for the right stage of your business. #metrics
Pillar 1️⃣ - Growth📈
Understanding the “layers” of recurring revenue is key to understanding growth.
➡️ New
➡️ Expansion
➡️ Contraction
➡️ Churn
Understanding the “layers” of recurring revenue is key to understanding growth.
➡️ New
➡️ Expansion
➡️ Contraction
➡️ Churn
SaaS Metrics are more powerful when used together. In isolation, they offer less context.
Assess your CAC Profile to grasp the full picture of GTM efficiency.
🧵 Here’s a quick summary to help you analyze your CAC profile and grow. 📈 #saas
Assess your CAC Profile to grasp the full picture of GTM efficiency.
🧵 Here’s a quick summary to help you analyze your CAC profile and grow. 📈 #saas
You will need the following inputs for CAC profile calculations:
1️⃣Sales expenses - wages, taxes, benefits, travel, commissions, CRM, training, etc.
2️⃣Marketing - marketing, paid ads, conferences, brand, swag, ESP, etc.
3️⃣Bookings - dollars and logo counts
1️⃣Sales expenses - wages, taxes, benefits, travel, commissions, CRM, training, etc.
2️⃣Marketing - marketing, paid ads, conferences, brand, swag, ESP, etc.
3️⃣Bookings - dollars and logo counts
4️⃣MRR/ARR - includes new, expansion, and maybe contraction
5️⃣Logo count - the number of new customers/users each month
6️⃣Gross Margin - recurring gross margin and maybe variable gross margin
5️⃣Logo count - the number of new customers/users each month
6️⃣Gross Margin - recurring gross margin and maybe variable gross margin
2023 is about time to value!
Watch this short demo on how you can create and publish your first #SaaS metrics dashboard in 2 minutes.
Follow the thread to see this live dashboard in your browser and how to create your dashboard account.
Watch this short demo on how you can create and publish your first #SaaS metrics dashboard in 2 minutes.
Follow the thread to see this live dashboard in your browser and how to create your dashboard account.
See the live dashboard here. It's very easy to share with your team, Board, and investors without adding them as users. app.backofficetools.com/metricsdashboa…
To create an account and your first dashboard, register for this short video tutorial here. thesaasacademy.com/offers/FGT86tv…
Le mail d'annonce des pépites de la semaine vient de partir à près de 700 personnes inscrites sur Below50.
Au programme, 5 pépites de très bon level !
Je dis 5, mais en réalité c'est plutôt 4....
🧵👇
Au programme, 5 pépites de très bon level !
Je dis 5, mais en réalité c'est plutôt 4....
🧵👇
Chaque lundi, nous publions la sélection des sites ayant fini de passer notre filtre (manuel).
En moyenne 5 à 10 sites / semaine (et ça devrait grimper au fil des optimisations de process).
Cette semaine, il y en avait donc 5 à publier pour les profils Investisseurs.
En moyenne 5 à 10 sites / semaine (et ça devrait grimper au fil des optimisations de process).
Cette semaine, il y en avait donc 5 à publier pour les profils Investisseurs.
Pour rappel : les profils Investisseurs obtient un accès 72h avant le reste des membres de la plateformes aux sites listés.
Un petit avantage concurrentiel très demandé :)
Lundi 9h, je clique sur envoyé.
Lundi 9h24 Max prend son abo.
Un petit avantage concurrentiel très demandé :)
Lundi 9h, je clique sur envoyé.
Lundi 9h24 Max prend son abo.
Don't let anyone fool you!
A SaaS App can be quite simple.
Here are a few rules that help you make the right decisions 🚀🧵
A SaaS App can be quite simple.
Here are a few rules that help you make the right decisions 🚀🧵
💡 Mindset (1/2)
The SaaS space is a mature, highly commoditized one where you can cherry-pick a lot of what is needed from a pool of mature services and ready-to-use modules and use well-established, common best practices.
The SaaS space is a mature, highly commoditized one where you can cherry-pick a lot of what is needed from a pool of mature services and ready-to-use modules and use well-established, common best practices.
💡 Mindset (2/2)
Just don't lock yourself into short-lived technologies or dependencies.
And let your team only build stuff that sets you apart from the competition and/or builds up real value in your startup.
Buy everything else (the commodities)
Just don't lock yourself into short-lived technologies or dependencies.
And let your team only build stuff that sets you apart from the competition and/or builds up real value in your startup.
Buy everything else (the commodities)
📈🛠️ Creating a SaaS backbone ?
Here's a checklist of measurable steps to follow 👇
Here's a checklist of measurable steps to follow 👇
✅ Define your target audience & value proposition
🎯 Knowing your target audience and value proposition is key to building a successful business. Define them clearly to guide your product development and marketing efforts.
🎯 Knowing your target audience and value proposition is key to building a successful business. Define them clearly to guide your product development and marketing efforts.
✅ Develop a minimum viable product (MVP)
✅ Test, iterate & gather feedback
🚀 Develop the core features that solve your users' problems and get it in front of them.
👥 Gather feedback and iterate to create a better product.
✅ Test, iterate & gather feedback
🚀 Develop the core features that solve your users' problems and get it in front of them.
👥 Gather feedback and iterate to create a better product.
Oilytics Weekly Chart of the Day recap: Week 6
With Russia’s invasion of Ukraine coming close to 1 year anniversary at the end of this month, the diesel market has mean reverted to levels seen this time last year. Diesel cracks remain $10+ from the seasonal range. (1/5)
Asian refinery runs of the 4 main countries (China + India + Japan + Korea) surged above 25MMBD only for the 3rd time ever. The December runs came in at 25.07MMBD (+0.4MMBD y/y) and just 0.1MMBD shy of the record high seen in Nov 2021. (2/5)
How important are clear and distinct revenue streams in SaaS? Well, your valuation depends on it.
The proper SaaS P&L setup helps your team, your Board, and your investors.
Quick guide. #saas
The proper SaaS P&L setup helps your team, your Board, and your investors.
Quick guide. #saas
SaaS Revenue Streams
It's no longer just subscription revenue for SaaS companies. That was SaaS pricing 1.0.
I've worked with SaaS companies that had 5 distinct revenue streams.
Have you clearly defined your revenue categories?
It's no longer just subscription revenue for SaaS companies. That was SaaS pricing 1.0.
I've worked with SaaS companies that had 5 distinct revenue streams.
Have you clearly defined your revenue categories?
Subscription Revenue
🚀Generated from invoicing subscription contracts that range from monthly to multi-year. Your product and resold products. This is contracted MRR or ARR.
☠️Careful with resold products. I may roll up to subscriptions but I code to a different GL account
🚀Generated from invoicing subscription contracts that range from monthly to multi-year. Your product and resold products. This is contracted MRR or ARR.
☠️Careful with resold products. I may roll up to subscriptions but I code to a different GL account
Time for Advanced SaaS COGS. COGS vs OpEx is so important to get right.
But what if we have multiple revenue streams? Our COGS section must align with this.
Quick guide. #saas
But what if we have multiple revenue streams? Our COGS section must align with this.
Quick guide. #saas
What departments are included in pure-play SaaS COGS?
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my example
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my example
What if we have more than just subscriptions and services?
It's very common in SaaS to have subscriptions, services, and variable revenue streams.
I had one client with all but managed services in the pic below.
It's very common in SaaS to have subscriptions, services, and variable revenue streams.
I had one client with all but managed services in the pic below.
SaaS COGS vs. OpEx is a common discussion in my courses and with my clients.
What should I include in SaaS cost of goods sold (COGS)?
Quick guide below and why this is important. #saas
What should I include in SaaS cost of goods sold (COGS)?
Quick guide below and why this is important. #saas
What departments are included in SaaS COGS?
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my examples
For pure-play SaaS, your COGS structure should include:
1⃣Technical Support
2⃣Professional Services
3⃣Customer Success
4⃣Dev Ops
Of course, CS is up for debate depending on their role.
Dev Ops = Cost of Ops in my examples
📌Technical Support
They manage inbound customer contact regarding product bugs and how-to's.
💡Typical Expenses: Wages, payroll taxes, benefits, travel, training, internal software subscriptions
💡Margin: Included in recurring gross margin
They manage inbound customer contact regarding product bugs and how-to's.
💡Typical Expenses: Wages, payroll taxes, benefits, travel, training, internal software subscriptions
💡Margin: Included in recurring gross margin
Rumblings on "Private-to-Private" M&A deals
From an M&A practitioner perspective, I can't help but to think there will be a newfound appreciation for the level of complexity involved in consummating these specific types of transactions in today's environment
Let me explain...🧵
From an M&A practitioner perspective, I can't help but to think there will be a newfound appreciation for the level of complexity involved in consummating these specific types of transactions in today's environment
Let me explain...🧵
Talks of a wave of "VC-backed consolidation" over the next 12-18 months have been pervasive in various Valley circles recently, and manifesting in the form of:
🤝 Buyers using '21 valuations opportunistically as "M&A currency"
🤝 "Roll-ups of last resort" for subscale players
🤝 Buyers using '21 valuations opportunistically as "M&A currency"
🤝 "Roll-ups of last resort" for subscale players
There have been a number of "private-to-private" all-stock (or majority stock) combinations that have been consummated before
Two "success stories" that come to mind are 1) Seamless + Grubhub and 2) Elance + oDesk (now $UPWK)
But these deals have enormous underlying complexity
Two "success stories" that come to mind are 1) Seamless + Grubhub and 2) Elance + oDesk (now $UPWK)
But these deals have enormous underlying complexity
The term "hostile takeover" begets images of "raiders" dawning two-toned collared shirt & suspender combos, screaming into phones in a cigar-smoke-clouded mahogany rooms filled with dot matrix printer tear-sheets...
But, $EMR showed that companies too can also "go hostile"🧵
But, $EMR showed that companies too can also "go hostile"🧵
So yesterday, $EMR announced *a proposal* to acquire $NATI for $53.00 a share (~$7.6bn and 32% premium to last close)
$NATI is a $1.7bn electronic T&M business with 70% GMS, 35K customers across diverse end markets
Deal would advance $EMR's global automation focus & strategy
$NATI is a $1.7bn electronic T&M business with 70% GMS, 35K customers across diverse end markets
Deal would advance $EMR's global automation focus & strategy
Why go "hostile"?
Well, in short, if as a buyer you're getting stonewalled by management & their Board, you can put the target "in play" by going directly to shareholders
$EMR made many attempts to engage with $NATI in private dating to 5/22 with no constructive engagement
Well, in short, if as a buyer you're getting stonewalled by management & their Board, you can put the target "in play" by going directly to shareholders
$EMR made many attempts to engage with $NATI in private dating to 5/22 with no constructive engagement
M&A is capital allocation tool to help reimagine the strategic priorities in a company's portfolio
But what happens when the pieces of the portfolio "no longer fit"?
"Separation" transactions are complicated & often misunderstood by investors
Here's some good stuff to know🧵
But what happens when the pieces of the portfolio "no longer fit"?
"Separation" transactions are complicated & often misunderstood by investors
Here's some good stuff to know🧵
WHY do companies "break-up"?
Some reasons:
☑️Enhance operational focus
☑️Accommodate differing capital needs
☑️Create distinct "identities" for investors
☑️"Align" equity comp & currency for M&A
☑️Mitigate anti-trust concerns
☑️Quell activist pressure to "unlock value"
Some reasons:
☑️Enhance operational focus
☑️Accommodate differing capital needs
☑️Create distinct "identities" for investors
☑️"Align" equity comp & currency for M&A
☑️Mitigate anti-trust concerns
☑️Quell activist pressure to "unlock value"
HOW do companies "break-up"?
Some pervasive mechanisms that companies have used to "unbundle the conglomerate discount" include the following:
1⃣ Divestitures
2⃣ Spin-Offs
3⃣ Split-Offs
4⃣ Carve-Out IPO
5⃣ Spin-Mergers
(NOTE: this isn't exhaustive; see WLRK for reference)
Some pervasive mechanisms that companies have used to "unbundle the conglomerate discount" include the following:
1⃣ Divestitures
2⃣ Spin-Offs
3⃣ Split-Offs
4⃣ Carve-Out IPO
5⃣ Spin-Mergers
(NOTE: this isn't exhaustive; see WLRK for reference)
M&A always gets buzz in the public markets
But, many investors don't understand what a deal means for them as a shareholder
Also, most can't be bothered reading thousands of pages of underlying documentation (or just get it very wrong)
Here are the SEC filings to dig into🧵
But, many investors don't understand what a deal means for them as a shareholder
Also, most can't be bothered reading thousands of pages of underlying documentation (or just get it very wrong)
Here are the SEC filings to dig into🧵
⏳At Announcement ("T+0")
8-K & 425
✅Press Release
✅Investor Presentation
✅Transaction Docs
Takeaways:
🤔Focus on "how it works" (rationale + mechanics)
🤔Ask yourself: "what do I get or give here?"
Example: how the $10bn $ADBE stock part of Figma deal *technically* works
8-K & 425
✅Press Release
✅Investor Presentation
✅Transaction Docs
Takeaways:
🤔Focus on "how it works" (rationale + mechanics)
🤔Ask yourself: "what do I get or give here?"
Example: how the $10bn $ADBE stock part of Figma deal *technically* works
Takeaway #2: "Read Between the Lines"
🤔Stop and ask "why did they do this?"
🤔Stop and ask "where's the risk?"
Examples (all co-dependent variables)
1⃣Deal Closing (i.e. why close on X date)
2⃣Termination (i.e. who's at risk of not closing)
3⃣Others (i.e. "go shop" in PE deals)
🤔Stop and ask "why did they do this?"
🤔Stop and ask "where's the risk?"
Examples (all co-dependent variables)
1⃣Deal Closing (i.e. why close on X date)
2⃣Termination (i.e. who's at risk of not closing)
3⃣Others (i.e. "go shop" in PE deals)
CFO’s will tell you that financial discipline never goes out of style. Good markets, bad markets. Doesn’t matter.
But with the tighter markets, everyone is calling for longer cash runways and attention to the Rule of 40 metric.
A quick post on the Rule of 40. #saas
But with the tighter markets, everyone is calling for longer cash runways and attention to the Rule of 40 metric.
A quick post on the Rule of 40. #saas
What is the Rule of 40?
It's a financial framework that measures revenue growth vs profit margins. The Rule of 40 determines the health and/or attractiveness of your business. To CFO’s, it adds financial discipline to your decision-making process.
It's a financial framework that measures revenue growth vs profit margins. The Rule of 40 determines the health and/or attractiveness of your business. To CFO’s, it adds financial discipline to your decision-making process.
How to Calculate the Rule of 40
Rule of 40 = growth % + profit margin
If revenue growth is 15%
and profit margin is 20%
Your rule of 40 number is 35%
Can you have negative inputs? Yes, that’s the meaning of the Rule of 40.
Increase growth or profit to reach 40% or higher.
Rule of 40 = growth % + profit margin
If revenue growth is 15%
and profit margin is 20%
Your rule of 40 number is 35%
Can you have negative inputs? Yes, that’s the meaning of the Rule of 40.
Increase growth or profit to reach 40% or higher.
𝗛𝗼𝘄 𝘁𝗼 𝗧𝗵𝗿𝗶𝘃𝗲 𝗕𝗲𝘆𝗼𝗻𝗱 𝘁𝗵𝗲 𝗦𝘁𝗮𝗿𝘁𝘂𝗽 𝗦𝘁𝗮𝗴𝗲
𝗧𝗵𝗶𝘀 𝗶𝗻𝘃𝗼𝗹𝘃𝗲𝘀 𝗰𝗹𝗲𝗮𝗿𝗹𝘆 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝘃𝗮𝗹𝘂𝗲𝘀 𝗮𝗻𝗱 𝗴𝗼𝗮𝗹𝘀 𝘁𝗼 𝘆𝗼𝘂𝗿 𝘁𝗲𝗮𝗺. ⤵️
𝗧𝗵𝗶𝘀 𝗶𝗻𝘃𝗼𝗹𝘃𝗲𝘀 𝗰𝗹𝗲𝗮𝗿𝗹𝘆 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗶𝗻𝗴 𝘆𝗼𝘂𝗿 𝘃𝗮𝗹𝘂𝗲𝘀 𝗮𝗻𝗱 𝗴𝗼𝗮𝗹𝘀 𝘁𝗼 𝘆𝗼𝘂𝗿 𝘁𝗲𝗮𝗺. ⤵️
Moving past the startup phase is a significant milestone and something to be celebrated. As your business grows and evolves, it's important to continue adapting and refining your strategies. A key area to focus on is building a strong and sustainable corporate culture.
𝗧𝗵𝗶𝘀 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽 𝘁𝗼 𝗺𝗶𝘁𝗶𝗴𝗮𝘁𝗲 𝗿𝗶𝘀𝗸 𝗮𝗻𝗱 𝗲𝗻𝘀𝘂𝗿𝗲 𝗹𝗼𝗻𝗴-𝘁𝗲𝗿𝗺 𝘀𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆. ⤵️
As your business moves past the startup phase, it's important to consider expanding your product or service offerings, as well as exploring new markets.
🗣️
As your business moves past the startup phase, it's important to consider expanding your product or service offerings, as well as exploring new markets.
🗣️
In conversation with @tejeshwi_sharma & #SaaS founders in BLR, Klaviyo’s former CMO, Kady S. talked about all things marketing for early stage cos. Highlights 👇
"When you get to the $5M mark, you want to think about product #marketing aggressively. A framework I use is ABCD." 🧵
"When you get to the $5M mark, you want to think about product #marketing aggressively. A framework I use is ABCD." 🧵
Audience - Identifying who the core audience is
Benefit - Building features for them that convert to benefits in a language that they understand
Compelling Reasons to Believe (RTB) - social proof, case studies, etc.
Differentiation - your product’s dramatic differentiation 1/
Benefit - Building features for them that convert to benefits in a language that they understand
Compelling Reasons to Believe (RTB) - social proof, case studies, etc.
Differentiation - your product’s dramatic differentiation 1/
Use this framework for ur msging. It’s imp bcos when u go outside ur core market, u have to be able to convince ur TG. U may be getting into a fragmented/competitive mkt & this is how u'll stand out. Ensure it's consistent on ur site, sales training etc. This is product mktg.2/
A month ago, a wave of rare political protests swept China, centered on Beijing, where Premier Xi Jinping was consolidating his already-substantial power by claiming an unprecedented third term:
cnn.com/2022/10/22/chi… 1/
cnn.com/2022/10/22/chi… 1/
If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
pluralistic.net/2022/11/11/for… 2/
pluralistic.net/2022/11/11/for… 2/
Protest organizers in China struggle with the serious legal and extrajudicial penalties for anti-government activities, backed by a sophisticated digital surveillance grid that monitors and blocks online communications that might challenge government authority. 3/
I review a lot of SaaS P&L's. 90% are structured incorrectly or need improvement.
Quick thread on the 4 common mistakes in your SaaS P&L setup. With pictures :) #saas
Quick thread on the 4 common mistakes in your SaaS P&L setup. With pictures :) #saas
The SaaS P&L Structure
A properly formatted SaaS P&L tells you so much! And it's easily consumable by operators and investors.
- gross profit
- margins by revenue stream
- OpEx profile
- EBITDA
- and it easily feeds S&M efficiency metrics
Cost of Ops = Dev Ops in this example
A properly formatted SaaS P&L tells you so much! And it's easily consumable by operators and investors.
- gross profit
- margins by revenue stream
- OpEx profile
- EBITDA
- and it easily feeds S&M efficiency metrics
Cost of Ops = Dev Ops in this example
The Chart of Accounts
The COA is a numerical and descriptive listing of all the accounts on your general ledger from the balance sheet to the income statement.
This is "under the hood" of your P&L. You need enough rev and expense detail for proper coding, analysis, rollups.
The COA is a numerical and descriptive listing of all the accounts on your general ledger from the balance sheet to the income statement.
This is "under the hood" of your P&L. You need enough rev and expense detail for proper coding, analysis, rollups.
When a company breaks a product and wrecks decades of work it's natural to feel fury. Companies know this, so they try to deflect your rage by blaming their suppliers. Sometimes, it's suppliers who are at fault - but other times, there is plenty of blame to go around. 1/
If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
pluralistic.net/2022/10/28/fad… 2/
pluralistic.net/2022/10/28/fad… 2/
For example, when Apple deleted all the working VPNs from its Chinese App Store and backdoored its Chinese cloud servers, it blamed the Chinese government. 3/
