Datasets:

core-outline

/

llama-2-7b-chat-hf

like 0

Follow

Core&Outline 1

From Service to SaaS with Jeb Banner of Boardable. Nonprofits often struggle with technology because companies aren’t building technologies with nonprofits in mind. For example, while a for-profit organization may have five board members and hundreds of employees, nonprofits often have five employees but 25 board members. In this episode of SaaS Open Mic, I speak with Jeb Banner is the CEO of Boardable. Boardable is a board management and meeting software for mission-driven organizations. We talk about how to turn a service business into a SaaS business. We also touch on dedicating yourself to solving the right problem, raising money, and how to balance confidence and vulnerability as a member of the executive team. Before starting Boardable, Jeb used to run a service business, so early on he needed to shift his thinking towards SaaS. You’re building a snowball with SaaS. It’s just all about growing that recurring revenue versus constantly having to go out there and resell the same customers over and over. That’s a big mindset shift. While running a SaaS business, mistakes are inevitable: you’re going to spend money on marketing campaigns that won’t work, hire the wrong people that you’ll eventually need to let go, and much more. No leader is able to prevent it all. Jeb seeks to be vulnerable about the things he doesn’t know. The CEO should have the answer. That’s the archetype. (…) We’re confident but we’re also vulnerable about the things that we’re not confident about. That’s a tricky balance. (…) I firmly believe that the growth and potential of your company are closely tied to how much you can change and mature as a leader. Our interview covers the following topics: The shift from a service business to SaaS Focusing on the problem and nothing else Raising money The balance between confidence and vulnerability in the leadership team Employee experience

[INST] From Service to SaaS with Jeb Banner of Boardable [/INST]

Nonprofits often struggle with technology because companies aren’t building technologies with nonprofits in mind. For example, while a for-profit organization may have five board members and hundreds of employees, nonprofits often have five employees but 25 board members. In this episode of SaaS Open Mic, I speak with Jeb Banner is the CEO of Boardable. Boardable is a board management and meeting software for mission-driven organizations. We talk about how to turn a service business into a SaaS business. We also touch on dedicating yourself to solving the right problem, raising money, and how to balance confidence and vulnerability as a member of the executive team. Before starting Boardable, Jeb used to run a service business, so early on he needed to shift his thinking towards SaaS. You’re building a snowball with SaaS. It’s just all about growing that recurring revenue versus constantly having to go out there and resell the same customers over and over. That’s a big mindset shift. While running a SaaS business, mistakes are inevitable: you’re going to spend money on marketing campaigns that won’t work, hire the wrong people that you’ll eventually need to let go, and much more. No leader is able to prevent it all. Jeb seeks to be vulnerable about the things he doesn’t know. The CEO should have the answer. That’s the archetype. (…) We’re confident but we’re also vulnerable about the things that we’re not confident about. That’s a tricky balance. (…) I firmly believe that the growth and potential of your company are closely tied to how much you can change and mature as a leader. Our interview covers the following topics: The shift from a service business to SaaS Focusing on the problem and nothing else Raising money The balance between confidence and vulnerability in the leadership team Employee experience

<sys> [INST] From Service to SaaS with Jeb Banner of Boardable [/INST] Nonprofits often struggle with technology because companies aren’t building technologies with nonprofits in mind. For example, while a for-profit organization may have five board members and hundreds of employees, nonprofits often have five employees but 25 board members. In this episode of SaaS Open Mic, I speak with Jeb Banner is the CEO of Boardable. Boardable is a board management and meeting software for mission-driven organizations. We talk about how to turn a service business into a SaaS business. We also touch on dedicating yourself to solving the right problem, raising money, and how to balance confidence and vulnerability as a member of the executive team. Before starting Boardable, Jeb used to run a service business, so early on he needed to shift his thinking towards SaaS. You’re building a snowball with SaaS. It’s just all about growing that recurring revenue versus constantly having to go out there and resell the same customers over and over. That’s a big mindset shift. While running a SaaS business, mistakes are inevitable: you’re going to spend money on marketing campaigns that won’t work, hire the wrong people that you’ll eventually need to let go, and much more. No leader is able to prevent it all. Jeb seeks to be vulnerable about the things he doesn’t know. The CEO should have the answer. That’s the archetype. (…) We’re confident but we’re also vulnerable about the things that we’re not confident about. That’s a tricky balance. (…) I firmly believe that the growth and potential of your company are closely tied to how much you can change and mature as a leader. Our interview covers the following topics: The shift from a service business to SaaS Focusing on the problem and nothing else Raising money The balance between confidence and vulnerability in the leadership team Employee experience </sys

Segmentation, now more flexible (and in color!). Announcing a colorful update to Segmentation At ChartMogul we’re excited to continue enhancing our product to make it that much easier to measure, understand, and grow your subscription business. Since launching Segmentation, we’ve released a few updates to make the analytics even more powerful and easy to use. With Segmentation, ChartMogul customers can create views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep The relative time feature allows ChartMogul customers to refine segments to a specific time period, past or future. They can focus their analysis using definitions such as “Customers who upgraded in the past week” or “All annual customers up for renewal in the next 14 days.” Now, customers can take these segments they’ve created and use them in more dynamic, insightful ways — through on-the-spot comparison and effective visualization. Whether you’re sitting down for a deep-dive analysis or just reviewing data at a glance, ChartMogul Segmentation now yields more value more quickly. NEW: Compare and edit segments with just one click When you sit down to review and analyze data, you usually have a certain question in mind. Often the initial question you sought to answer morphs into something else — it goes in another direction, or splinters into a set of more specific questions. And of course, follow-up questions come to mind. Wouldn’t it be nice to follow these whims easily, to compare them all together? For example, want to see how the MRR of customers on a specific plan in a specific region compare to your overall customer base? What about how they compare to customers on a different plan? Now you can. Live editing and comparison allows you to analyze data segments no matter how broad or acute they are. Adding a saved segment and creating a new segment, in just a few clicks. You can select saved segments, or you can create a brand new one on the spot. A key improvement here is that you’re no longer required to save a segment before viewing it. You can also edit the segments live, drilling down by plan or any other filter that suits your investigation. The graph will reflect your changes immediately. This is all about providing more responsive and flexible analytics. NEW for ESSENTIAL plan: Compare regions and plans on the same graph Customers on the ChartMogul ESSENTIAL plan can now compare any combination of segments on the same graph. We’re excited to extend this functionality to all users. BONUS: Colors! The above updates required that we make comparing multiple segments on the same graph as easy to comprehend as possible. The answer: colors! Label each saved segment with a specific color. You can also easily edit that color on the spot, switching around on the palette provided. We’re excited to see what you can achieve with Segmentation. If you have a ChartMogul account, you can log in and start using it right away. If you haven’t signed up yet, you can start a free 30-day trial to start using the features.

[INST] Segmentation, now more flexible (and in color!) [/INST]

Announcing a colorful update to Segmentation At ChartMogul we’re excited to continue enhancing our product to make it that much easier to measure, understand, and grow your subscription business. Since launching Segmentation, we’ve released a few updates to make the analytics even more powerful and easy to use. With Segmentation, ChartMogul customers can create views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep The relative time feature allows ChartMogul customers to refine segments to a specific time period, past or future. They can focus their analysis using definitions such as “Customers who upgraded in the past week” or “All annual customers up for renewal in the next 14 days.” Now, customers can take these segments they’ve created and use them in more dynamic, insightful ways — through on-the-spot comparison and effective visualization. Whether you’re sitting down for a deep-dive analysis or just reviewing data at a glance, ChartMogul Segmentation now yields more value more quickly. NEW: Compare and edit segments with just one click When you sit down to review and analyze data, you usually have a certain question in mind. Often the initial question you sought to answer morphs into something else — it goes in another direction, or splinters into a set of more specific questions. And of course, follow-up questions come to mind. Wouldn’t it be nice to follow these whims easily, to compare them all together? For example, want to see how the MRR of customers on a specific plan in a specific region compare to your overall customer base? What about how they compare to customers on a different plan? Now you can. Live editing and comparison allows you to analyze data segments no matter how broad or acute they are. Adding a saved segment and creating a new segment, in just a few clicks. You can select saved segments, or you can create a brand new one on the spot. A key improvement here is that you’re no longer required to save a segment before viewing it. You can also edit the segments live, drilling down by plan or any other filter that suits your investigation. The graph will reflect your changes immediately. This is all about providing more responsive and flexible analytics. NEW for ESSENTIAL plan: Compare regions and plans on the same graph Customers on the ChartMogul ESSENTIAL plan can now compare any combination of segments on the same graph. We’re excited to extend this functionality to all users. BONUS: Colors! The above updates required that we make comparing multiple segments on the same graph as easy to comprehend as possible. The answer: colors! Label each saved segment with a specific color. You can also easily edit that color on the spot, switching around on the palette provided. We’re excited to see what you can achieve with Segmentation. If you have a ChartMogul account, you can log in and start using it right away. If you haven’t signed up yet, you can start a free 30-day trial to start using the features.

<sys> [INST] Segmentation, now more flexible (and in color!) [/INST] Announcing a colorful update to Segmentation At ChartMogul we’re excited to continue enhancing our product to make it that much easier to measure, understand, and grow your subscription business. Since launching Segmentation, we’ve released a few updates to make the analytics even more powerful and easy to use. With Segmentation, ChartMogul customers can create views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep The relative time feature allows ChartMogul customers to refine segments to a specific time period, past or future. They can focus their analysis using definitions such as “Customers who upgraded in the past week” or “All annual customers up for renewal in the next 14 days.” Now, customers can take these segments they’ve created and use them in more dynamic, insightful ways — through on-the-spot comparison and effective visualization. Whether you’re sitting down for a deep-dive analysis or just reviewing data at a glance, ChartMogul Segmentation now yields more value more quickly. NEW: Compare and edit segments with just one click When you sit down to review and analyze data, you usually have a certain question in mind. Often the initial question you sought to answer morphs into something else — it goes in another direction, or splinters into a set of more specific questions. And of course, follow-up questions come to mind. Wouldn’t it be nice to follow these whims easily, to compare them all together? For example, want to see how the MRR of customers on a specific plan in a specific region compare to your overall customer base? What about how they compare to customers on a different plan? Now you can. Live editing and comparison allows you to analyze data segments no matter how broad or acute they are. Adding a saved segment and creating a new segment, in just a few clicks. You can select saved segments, or you can create a brand new one on the spot. A key improvement here is that you’re no longer required to save a segment before viewing it. You can also edit the segments live, drilling down by plan or any other filter that suits your investigation. The graph will reflect your changes immediately. This is all about providing more responsive and flexible analytics. NEW for ESSENTIAL plan: Compare regions and plans on the same graph Customers on the ChartMogul ESSENTIAL plan can now compare any combination of segments on the same graph. We’re excited to extend this functionality to all users. BONUS: Colors! The above updates required that we make comparing multiple segments on the same graph as easy to comprehend as possible. The answer: colors! Label each saved segment with a specific color. You can also easily edit that color on the spot, switching around on the palette provided. We’re excited to see what you can achieve with Segmentation. If you have a ChartMogul account, you can log in and start using it right away. If you haven’t signed up yet, you can start a free 30-day trial to start using the features. </sys

Freshdesk’s Arun Mani on European SaaS expansion, diversity and self-reinvention. “If you treat Europe as one mega-region… you’re bound to fail.” I had to check twice when I looked at Arun Mani’s career path: Growing up in India Designing chips at Intel Studying for an MBA at the renowned INSEAD business school Advising C-level execs on strategy at McKinsey Leading global sales at AppNexus Running Freshdesk’s European expansion Most people’s career exhibits some form of consistent theme. It took me a while to understand that for Arun, the one consistency is constant self-reinvention. “From risk free safe choices, to what gives you happiness, there is a huge shift… you have to do everything the other way round.” Arun has spent the last few months building a satellite Freshdesk team from scratch in Berlin, Germany to run the company’s efforts in Europe, as their customer base grows and moves up-market towards mid-level and Enterprise businesses. Freshdesk today has over 900 employees globally and over 100,000 customers. As you might expect, there’s a whole world of challenges involved in expanding a SaaS product to a new market, especially one so diverse as Europe. In our discussion, we cover: The most common mistakes businesses make when approaching SaaS expansion to Europe — and how Freshdesk avoids this How transformation is a consistent theme across Arun’s whole career, and how he thinks of this as a vital component of personal growth How mentorship has played a critical role throughout his career, and how others can find their feet with it How he managed to build diversity into his team from scratch when so many others are struggling How running a remote (non-HQ) office came with some unexpected obstacles “I do look for one thing, and that’s people who are comfortable with change. Because for me, that’s a proxy for the ability to learn.” Arun’s recommended books Here are the two books that Arun recommended during the interview: Thinking, Fast and Slow by Daniel Kahneman Working Identity: Unconventional Strategies for Reinventing Your Career by Herminia Ibarra Listen to the episode As always, you can find SaaS Open Mic in your usual podcast player (just search for us). We’re also on SoundCloud and Apple Podcasts:

[INST] Freshdesk’s Arun Mani on European SaaS expansion, diversity and self-reinvention [/INST]

“If you treat Europe as one mega-region… you’re bound to fail.” I had to check twice when I looked at Arun Mani’s career path: Growing up in India Designing chips at Intel Studying for an MBA at the renowned INSEAD business school Advising C-level execs on strategy at McKinsey Leading global sales at AppNexus Running Freshdesk’s European expansion Most people’s career exhibits some form of consistent theme. It took me a while to understand that for Arun, the one consistency is constant self-reinvention. “From risk free safe choices, to what gives you happiness, there is a huge shift… you have to do everything the other way round.” Arun has spent the last few months building a satellite Freshdesk team from scratch in Berlin, Germany to run the company’s efforts in Europe, as their customer base grows and moves up-market towards mid-level and Enterprise businesses. Freshdesk today has over 900 employees globally and over 100,000 customers. As you might expect, there’s a whole world of challenges involved in expanding a SaaS product to a new market, especially one so diverse as Europe. In our discussion, we cover: The most common mistakes businesses make when approaching SaaS expansion to Europe — and how Freshdesk avoids this How transformation is a consistent theme across Arun’s whole career, and how he thinks of this as a vital component of personal growth How mentorship has played a critical role throughout his career, and how others can find their feet with it How he managed to build diversity into his team from scratch when so many others are struggling How running a remote (non-HQ) office came with some unexpected obstacles “I do look for one thing, and that’s people who are comfortable with change. Because for me, that’s a proxy for the ability to learn.” Arun’s recommended books Here are the two books that Arun recommended during the interview: Thinking, Fast and Slow by Daniel Kahneman Working Identity: Unconventional Strategies for Reinventing Your Career by Herminia Ibarra Listen to the episode As always, you can find SaaS Open Mic in your usual podcast player (just search for us). We’re also on SoundCloud and Apple Podcasts:

<sys> [INST] Freshdesk’s Arun Mani on European SaaS expansion, diversity and self-reinvention [/INST] “If you treat Europe as one mega-region… you’re bound to fail.” I had to check twice when I looked at Arun Mani’s career path: Growing up in India Designing chips at Intel Studying for an MBA at the renowned INSEAD business school Advising C-level execs on strategy at McKinsey Leading global sales at AppNexus Running Freshdesk’s European expansion Most people’s career exhibits some form of consistent theme. It took me a while to understand that for Arun, the one consistency is constant self-reinvention. “From risk free safe choices, to what gives you happiness, there is a huge shift… you have to do everything the other way round.” Arun has spent the last few months building a satellite Freshdesk team from scratch in Berlin, Germany to run the company’s efforts in Europe, as their customer base grows and moves up-market towards mid-level and Enterprise businesses. Freshdesk today has over 900 employees globally and over 100,000 customers. As you might expect, there’s a whole world of challenges involved in expanding a SaaS product to a new market, especially one so diverse as Europe. In our discussion, we cover: The most common mistakes businesses make when approaching SaaS expansion to Europe — and how Freshdesk avoids this How transformation is a consistent theme across Arun’s whole career, and how he thinks of this as a vital component of personal growth How mentorship has played a critical role throughout his career, and how others can find their feet with it How he managed to build diversity into his team from scratch when so many others are struggling How running a remote (non-HQ) office came with some unexpected obstacles “I do look for one thing, and that’s people who are comfortable with change. Because for me, that’s a proxy for the ability to learn.” Arun’s recommended books Here are the two books that Arun recommended during the interview: Thinking, Fast and Slow by Daniel Kahneman Working Identity: Unconventional Strategies for Reinventing Your Career by Herminia Ibarra Listen to the episode As always, you can find SaaS Open Mic in your usual podcast player (just search for us). We’re also on SoundCloud and Apple Podcasts: </sys

What if Uber was a subscription business?. Uber has delivered the new on-demand generation on a silver platter Uber has seen a staggering rate of growth since 2009, transforming its brand into something of a household name across many countries, as well as a figurehead for much of the “on-demand generation” we’re used to talking about in the tech world. They may not have been the absolute first to usher in this new model of consumer service, but they certainly feel like the most prominent. And today’s possibilities when it comes to on-demand products are nearly endless. Need some laundry washed? Use Washio. Need something delivered? Use Postmates. Want to send some flowers? Use BloomThat. Need a haircut? Use Shortcut. Need to move house? Use Lugg. The list goes on! Uber for X is the term thrown around in product pitches everywhere. But what if things were different? It’s sometimes good to dream a little, and explore what things might look like if a consumer business like Uber decided to offer its service through a subscription model. What would a subscription model mean for Uber customers? First, let’s clarify exactly what we mean by this. There are many ways that Uber could introduce a subscription, including the following: Pay a fixed monthly fee for a specific amount of ‘Uber miles’, which you can spend on trips. Pay a fixed monthly fee for access to Uber, and pay a certain rate on top per trip. Pay a fixed monthly fee for unlimited usage of the Uber service. Pay a fixed monthly fee for some additional features in the Uber platform (e.g. business-focused features) and still pay per trip. So let’s say Uber decides to roll out option 1. What would this mean for you, the customer? Greater simplicity in pricing is the first thing that comes to mind. As an Uber customer, if I use the service in a predictable way, i.e. I know roughly how many miles I’ll travel each month with the service, I can purchase a corresponding subscription with confidence, and more transparency into how much I’m actually spending (especially compared to the non-transparent per-transaction model which currently exists, surge pricing, etc). This also makes it easier to compare the cost of Uber with the cost of owning a vehicle, or other alternatives. There’s also greater lock-in. Right now, if I’m trying to get a ride and I can see that there won’t be an Uber driver arriving for at least 10 minutes, maybe I’ll just hail a Lyft car instead. Or maybe I’ll even use public transport! If you have your pre-paid, pre-committed subscription to Uber, you’re going to wait that 10 minutes so that you can spend the miles you’ve already paid for. It’s also likely that I’ll have higher expectations and demands. If I’m a paying subscriber, I’m expecting Uber to keep me happy – I’ve paid for a service upfront and expect them to deliver on their promise. Perhaps if I’m not happy or have a bad experience, I’m more likely to contact their support. “I’ve nearly used up my mileage quota for this month, could you just drop me after the traffic lights please?” What would a subscription model mean for Uber? Less flexibility in pricing. Right now, one of Uber’s strongest capabilities is being able to constantly tweak and optimize pricing to match the demand and other external variables at the time. Surge pricing means that Uber makes the most of a peak in demand, often seen at busy periods around special events, concerts etc. With a flat subscription, they’d lose this level of control (unless they still added a ‘surge fee’ on top, or something similar). They would also have to offer a plan that suited each target demographic. Uber caters to a huge range of different customers and use cases, meaning that a single pricing plan certainly wouldn’t please everyone. There’s almost certainly a massive amount of research required to do this. A more predictable, measurable business. Switching customers over to a regular subscription means that they can talk in terms of Monthly Recurring Revenue (MRR). This brings with it the usual benefits associated with running a subscription business, including metrics: Customer Lifetime Value (LTV) means they can have a better view of how much a customer spends with them over their lifetime, which in turn allows them to more confidently spend money on acquiring new customers. Churn Rate means that they can focus on customer success, minimizing the number of users who cancel or unsubscribe from the service. > Side note: According to those familiar with Uber’s latest fundraising round in December 2015, the company supposedly touted an Annual Run Rate (ARR) of over $10 billion, globally. Usually companies that announce such metrics select a particularly successful month in recent history, and multiply by 12 to get the annual figure (so it’s hardly ever a realistic value). Even so, imagine if Uber could convert that into truly recurring, subscription revenue. That’s over 800 million MRR! More difficult customer acquisition. Right now, Uber has to get prospective customers to simply create an account, add a credit card and take a single ride. With an up-front subscription cost, there’s much more perceived risk on the customer’s side. This can be tackled with a money-back guarantee or free trial, but only to a certain extent. So why haven’t they introduced a subscription? Although not many people have visibility of Uber’s strategic plan for the next few years, I’d place a bet that a subscription model probably isn’t in the cards, for these main reasons: Uber knows that customers generally come back when they need the service, after the first time. There’s not much in terms of direct competition, as long as Uber keeps delivering a great product at a great value. For this reason, they don’t really need to lock in customers upfront. Uber has been 100% focused on rapid growth and market expansion since its launch. They’re not currently optimizing for revenue – to them, it’s a land-grab game (even though they state that they’re profitable in many cities). It’s also quite likely that users see greater value in the product when evaluated on a per-ride basis. How many times do you find yourself comparing the cost of your latest trip with the seemingly over-priced equivalent taxi journey? A subscription model wouldn’t allow for this. How do you pay the driver in this case? A subscription model adds some complexity here. “Thanks to my Uber Unlimited plan, I can take a ride just to read the daily newspaper in peace!” What does this say about the subscription economy? ‘On-demand’ & ‘Subscription’ cater for two slightly different use cases For more ‘transactional’ on-demand businesses, it may not make as much sense to offer subscriptions. It increases the barrier to acquisition and forces customers to commit upfront. Uber doesn’t want people to even think twice about calling a ride with them, and as long as they can keep driving great value, customers will keep coming back. This differs a lot from more traditional ‘subscription’ products which are really based around the ongoing value of a service (instead of pure transaction-value). If you look at the problem from the other side, it’s quite clear that these two models are often incompatible. For example, ChartMogul customers pay a subscription (either yearly or monthly) to use our SaaS Analytics platform and understand their revenue. It would make zero sense whatsoever to offer some form of transactional billing for this — it flat-out wouldn’t work. Would we charge them every time they wanted to log in to their account? Sure, there are also some overlaps in the use cases for these models. As an example: Laundry services. I can think of on-demand transactional ‘Uber for laundry’ startups, as well as subscription-based laundry services. But as a general rule: Transactional value = On-demand, per-transaction pricing. Ongoing value = Subscription-based, recurring pricing. Is there room for a hybrid model? Can the on-demand and subscription models play nicely together in the context of a single product? Potentially… In the case of Uber, there clearly exists a tier of ‘power’ users who use the service to an extent where it would make sense to offer a subscription tier. In this case, regular customers who spend hours per week in the back of an Uber — particularly those who spend a predictable amount of time — could save money and gain additional benefits by committing to a certain amount of mileage or hours upfront.

[INST] What if Uber was a subscription business? [/INST]

Uber has delivered the new on-demand generation on a silver platter Uber has seen a staggering rate of growth since 2009, transforming its brand into something of a household name across many countries, as well as a figurehead for much of the “on-demand generation” we’re used to talking about in the tech world. They may not have been the absolute first to usher in this new model of consumer service, but they certainly feel like the most prominent. And today’s possibilities when it comes to on-demand products are nearly endless. Need some laundry washed? Use Washio. Need something delivered? Use Postmates. Want to send some flowers? Use BloomThat. Need a haircut? Use Shortcut. Need to move house? Use Lugg. The list goes on! Uber for X is the term thrown around in product pitches everywhere. But what if things were different? It’s sometimes good to dream a little, and explore what things might look like if a consumer business like Uber decided to offer its service through a subscription model. What would a subscription model mean for Uber customers? First, let’s clarify exactly what we mean by this. There are many ways that Uber could introduce a subscription, including the following: Pay a fixed monthly fee for a specific amount of ‘Uber miles’, which you can spend on trips. Pay a fixed monthly fee for access to Uber, and pay a certain rate on top per trip. Pay a fixed monthly fee for unlimited usage of the Uber service. Pay a fixed monthly fee for some additional features in the Uber platform (e.g. business-focused features) and still pay per trip. So let’s say Uber decides to roll out option 1. What would this mean for you, the customer? Greater simplicity in pricing is the first thing that comes to mind. As an Uber customer, if I use the service in a predictable way, i.e. I know roughly how many miles I’ll travel each month with the service, I can purchase a corresponding subscription with confidence, and more transparency into how much I’m actually spending (especially compared to the non-transparent per-transaction model which currently exists, surge pricing, etc). This also makes it easier to compare the cost of Uber with the cost of owning a vehicle, or other alternatives. There’s also greater lock-in. Right now, if I’m trying to get a ride and I can see that there won’t be an Uber driver arriving for at least 10 minutes, maybe I’ll just hail a Lyft car instead. Or maybe I’ll even use public transport! If you have your pre-paid, pre-committed subscription to Uber, you’re going to wait that 10 minutes so that you can spend the miles you’ve already paid for. It’s also likely that I’ll have higher expectations and demands. If I’m a paying subscriber, I’m expecting Uber to keep me happy – I’ve paid for a service upfront and expect them to deliver on their promise. Perhaps if I’m not happy or have a bad experience, I’m more likely to contact their support. “I’ve nearly used up my mileage quota for this month, could you just drop me after the traffic lights please?” What would a subscription model mean for Uber? Less flexibility in pricing. Right now, one of Uber’s strongest capabilities is being able to constantly tweak and optimize pricing to match the demand and other external variables at the time. Surge pricing means that Uber makes the most of a peak in demand, often seen at busy periods around special events, concerts etc. With a flat subscription, they’d lose this level of control (unless they still added a ‘surge fee’ on top, or something similar). They would also have to offer a plan that suited each target demographic. Uber caters to a huge range of different customers and use cases, meaning that a single pricing plan certainly wouldn’t please everyone. There’s almost certainly a massive amount of research required to do this. A more predictable, measurable business. Switching customers over to a regular subscription means that they can talk in terms of Monthly Recurring Revenue (MRR). This brings with it the usual benefits associated with running a subscription business, including metrics: Customer Lifetime Value (LTV) means they can have a better view of how much a customer spends with them over their lifetime, which in turn allows them to more confidently spend money on acquiring new customers. Churn Rate means that they can focus on customer success, minimizing the number of users who cancel or unsubscribe from the service. > Side note: According to those familiar with Uber’s latest fundraising round in December 2015, the company supposedly touted an Annual Run Rate (ARR) of over $10 billion, globally. Usually companies that announce such metrics select a particularly successful month in recent history, and multiply by 12 to get the annual figure (so it’s hardly ever a realistic value). Even so, imagine if Uber could convert that into truly recurring, subscription revenue. That’s over 800 million MRR! More difficult customer acquisition. Right now, Uber has to get prospective customers to simply create an account, add a credit card and take a single ride. With an up-front subscription cost, there’s much more perceived risk on the customer’s side. This can be tackled with a money-back guarantee or free trial, but only to a certain extent. So why haven’t they introduced a subscription? Although not many people have visibility of Uber’s strategic plan for the next few years, I’d place a bet that a subscription model probably isn’t in the cards, for these main reasons: Uber knows that customers generally come back when they need the service, after the first time. There’s not much in terms of direct competition, as long as Uber keeps delivering a great product at a great value. For this reason, they don’t really need to lock in customers upfront. Uber has been 100% focused on rapid growth and market expansion since its launch. They’re not currently optimizing for revenue – to them, it’s a land-grab game (even though they state that they’re profitable in many cities). It’s also quite likely that users see greater value in the product when evaluated on a per-ride basis. How many times do you find yourself comparing the cost of your latest trip with the seemingly over-priced equivalent taxi journey? A subscription model wouldn’t allow for this. How do you pay the driver in this case? A subscription model adds some complexity here. “Thanks to my Uber Unlimited plan, I can take a ride just to read the daily newspaper in peace!” What does this say about the subscription economy? ‘On-demand’ & ‘Subscription’ cater for two slightly different use cases For more ‘transactional’ on-demand businesses, it may not make as much sense to offer subscriptions. It increases the barrier to acquisition and forces customers to commit upfront. Uber doesn’t want people to even think twice about calling a ride with them, and as long as they can keep driving great value, customers will keep coming back. This differs a lot from more traditional ‘subscription’ products which are really based around the ongoing value of a service (instead of pure transaction-value). If you look at the problem from the other side, it’s quite clear that these two models are often incompatible. For example, ChartMogul customers pay a subscription (either yearly or monthly) to use our SaaS Analytics platform and understand their revenue. It would make zero sense whatsoever to offer some form of transactional billing for this — it flat-out wouldn’t work. Would we charge them every time they wanted to log in to their account? Sure, there are also some overlaps in the use cases for these models. As an example: Laundry services. I can think of on-demand transactional ‘Uber for laundry’ startups, as well as subscription-based laundry services. But as a general rule: Transactional value = On-demand, per-transaction pricing. Ongoing value = Subscription-based, recurring pricing. Is there room for a hybrid model? Can the on-demand and subscription models play nicely together in the context of a single product? Potentially… In the case of Uber, there clearly exists a tier of ‘power’ users who use the service to an extent where it would make sense to offer a subscription tier. In this case, regular customers who spend hours per week in the back of an Uber — particularly those who spend a predictable amount of time — could save money and gain additional benefits by committing to a certain amount of mileage or hours upfront.

<sys> [INST] What if Uber was a subscription business? [/INST] Uber has delivered the new on-demand generation on a silver platter Uber has seen a staggering rate of growth since 2009, transforming its brand into something of a household name across many countries, as well as a figurehead for much of the “on-demand generation” we’re used to talking about in the tech world. They may not have been the absolute first to usher in this new model of consumer service, but they certainly feel like the most prominent. And today’s possibilities when it comes to on-demand products are nearly endless. Need some laundry washed? Use Washio. Need something delivered? Use Postmates. Want to send some flowers? Use BloomThat. Need a haircut? Use Shortcut. Need to move house? Use Lugg. The list goes on! Uber for X is the term thrown around in product pitches everywhere. But what if things were different? It’s sometimes good to dream a little, and explore what things might look like if a consumer business like Uber decided to offer its service through a subscription model. What would a subscription model mean for Uber customers? First, let’s clarify exactly what we mean by this. There are many ways that Uber could introduce a subscription, including the following: Pay a fixed monthly fee for a specific amount of ‘Uber miles’, which you can spend on trips. Pay a fixed monthly fee for access to Uber, and pay a certain rate on top per trip. Pay a fixed monthly fee for unlimited usage of the Uber service. Pay a fixed monthly fee for some additional features in the Uber platform (e.g. business-focused features) and still pay per trip. So let’s say Uber decides to roll out option 1. What would this mean for you, the customer? Greater simplicity in pricing is the first thing that comes to mind. As an Uber customer, if I use the service in a predictable way, i.e. I know roughly how many miles I’ll travel each month with the service, I can purchase a corresponding subscription with confidence, and more transparency into how much I’m actually spending (especially compared to the non-transparent per-transaction model which currently exists, surge pricing, etc). This also makes it easier to compare the cost of Uber with the cost of owning a vehicle, or other alternatives. There’s also greater lock-in. Right now, if I’m trying to get a ride and I can see that there won’t be an Uber driver arriving for at least 10 minutes, maybe I’ll just hail a Lyft car instead. Or maybe I’ll even use public transport! If you have your pre-paid, pre-committed subscription to Uber, you’re going to wait that 10 minutes so that you can spend the miles you’ve already paid for. It’s also likely that I’ll have higher expectations and demands. If I’m a paying subscriber, I’m expecting Uber to keep me happy – I’ve paid for a service upfront and expect them to deliver on their promise. Perhaps if I’m not happy or have a bad experience, I’m more likely to contact their support. “I’ve nearly used up my mileage quota for this month, could you just drop me after the traffic lights please?” What would a subscription model mean for Uber? Less flexibility in pricing. Right now, one of Uber’s strongest capabilities is being able to constantly tweak and optimize pricing to match the demand and other external variables at the time. Surge pricing means that Uber makes the most of a peak in demand, often seen at busy periods around special events, concerts etc. With a flat subscription, they’d lose this level of control (unless they still added a ‘surge fee’ on top, or something similar). They would also have to offer a plan that suited each target demographic. Uber caters to a huge range of different customers and use cases, meaning that a single pricing plan certainly wouldn’t please everyone. There’s almost certainly a massive amount of research required to do this. A more predictable, measurable business. Switching customers over to a regular subscription means that they can talk in terms of Monthly Recurring Revenue (MRR). This brings with it the usual benefits associated with running a subscription business, including metrics: Customer Lifetime Value (LTV) means they can have a better view of how much a customer spends with them over their lifetime, which in turn allows them to more confidently spend money on acquiring new customers. Churn Rate means that they can focus on customer success, minimizing the number of users who cancel or unsubscribe from the service. > Side note: According to those familiar with Uber’s latest fundraising round in December 2015, the company supposedly touted an Annual Run Rate (ARR) of over $10 billion, globally. Usually companies that announce such metrics select a particularly successful month in recent history, and multiply by 12 to get the annual figure (so it’s hardly ever a realistic value). Even so, imagine if Uber could convert that into truly recurring, subscription revenue. That’s over 800 million MRR! More difficult customer acquisition. Right now, Uber has to get prospective customers to simply create an account, add a credit card and take a single ride. With an up-front subscription cost, there’s much more perceived risk on the customer’s side. This can be tackled with a money-back guarantee or free trial, but only to a certain extent. So why haven’t they introduced a subscription? Although not many people have visibility of Uber’s strategic plan for the next few years, I’d place a bet that a subscription model probably isn’t in the cards, for these main reasons: Uber knows that customers generally come back when they need the service, after the first time. There’s not much in terms of direct competition, as long as Uber keeps delivering a great product at a great value. For this reason, they don’t really need to lock in customers upfront. Uber has been 100% focused on rapid growth and market expansion since its launch. They’re not currently optimizing for revenue – to them, it’s a land-grab game (even though they state that they’re profitable in many cities). It’s also quite likely that users see greater value in the product when evaluated on a per-ride basis. How many times do you find yourself comparing the cost of your latest trip with the seemingly over-priced equivalent taxi journey? A subscription model wouldn’t allow for this. How do you pay the driver in this case? A subscription model adds some complexity here. “Thanks to my Uber Unlimited plan, I can take a ride just to read the daily newspaper in peace!” What does this say about the subscription economy? ‘On-demand’ & ‘Subscription’ cater for two slightly different use cases For more ‘transactional’ on-demand businesses, it may not make as much sense to offer subscriptions. It increases the barrier to acquisition and forces customers to commit upfront. Uber doesn’t want people to even think twice about calling a ride with them, and as long as they can keep driving great value, customers will keep coming back. This differs a lot from more traditional ‘subscription’ products which are really based around the ongoing value of a service (instead of pure transaction-value). If you look at the problem from the other side, it’s quite clear that these two models are often incompatible. For example, ChartMogul customers pay a subscription (either yearly or monthly) to use our SaaS Analytics platform and understand their revenue. It would make zero sense whatsoever to offer some form of transactional billing for this — it flat-out wouldn’t work. Would we charge them every time they wanted to log in to their account? Sure, there are also some overlaps in the use cases for these models. As an example: Laundry services. I can think of on-demand transactional ‘Uber for laundry’ startups, as well as subscription-based laundry services. But as a general rule: Transactional value = On-demand, per-transaction pricing. Ongoing value = Subscription-based, recurring pricing. Is there room for a hybrid model? Can the on-demand and subscription models play nicely together in the context of a single product? Potentially… In the case of Uber, there clearly exists a tier of ‘power’ users who use the service to an extent where it would make sense to offer a subscription tier. In this case, regular customers who spend hours per week in the back of an Uber — particularly those who spend a predictable amount of time — could save money and gain additional benefits by committing to a certain amount of mileage or hours upfront. </sys

SaaS Q&A: Why wouldn’t a SaaS company use annual billing?. Last week we reviewed how annual billing impacts a subscription business. The benefits seem all-around convincing, so this week we thought we’d explore the other side of the issue. Given that SaaS giants like Salesforce, Zendesk, and Intercom all charge month to month, what are the reasons a SaaS company wouldn’t use annual billing? Here are two general reasons why a SaaS company might not want to use annual billing. The first has to do with the company’s SaaS pricing model, and the second has to do with customer engagement and SaaS metrics. More flexible pricing One key reason a SaaS company would not want to use annual contracting is if they price their product based on some kind of volume variant, such as number of licenses or users. The volume is divided into bands (0<100, 101<200, 201<300). Each band is a different tier of pricing — and usually marketed as a different plan. On a certain tier, the customer’s use of the service could max out at a specific limit, at which point they would need to upgrade to the next plan. The potential conflict between this type of pricing model and annual contracting is that your customers’ demand for, or use of, your SaaS product might fluctuate over the course of 12 months. The customer could bounce from one tier to the next, and this could wreak havoc on your internal bookkeeping, accounting, operations, etc. For example: If a customer downgrades to a cheaper plan at month 4, but has already paid upfront for a year-long contract, do you then have to process an 8-month refund for the difference? And what if they have a great quarter and then want to re-upgrade in month 9? Essentially, if your pricing model leaves room for mobility through the different tiers, or if your customers experience a lot of business volatility, annual billing doesn’t really make sense. Let’s look at some of this type of pricing model. User-based pricing This is a pricing model based on “the number of seats” or users that your customer has using your product on their end. This pricing model is in some very notable places, such as Salesforce and Zendesk. API-based SaaS API-based products design their pricing differently as well. Some, like Clearbit, have pricing tiers based on number of requests made to their API, whereas others may be based on the volume of data transmitted. Moreover, some APIs could charge not by tiered bandwidth or monthly contract at all, but charge more transactionally and on a granular level — individually per call (or per request) made to their API. In this way, the billing for a SaaS product breaks away from the typical recurring revenue structure of SaaS. Accurate insight into customer success and SaaS metrics This reason is less technical, and actually a bit more personal to the business management style of the founder or executive team. When customers are committed to an annual contract, it locks in a large proportion of your revenue and therefore also stabilizes your performance metrics (MRR, Churn, and so on). Month-to-month billing involves a lot of interaction between your company and customer, ensuring their satisfaction and keeping them on board. As a result you have your fingers on the pulse of your customer base, how they use and perceive your product. You also know that your metrics reflect a real-time performance of your business. With the reduced interaction that could come with an annual contract, there’s a risk you lose touch with how engaged and satisfied your customers are. And the healthy SaaS metrics you see, buoyed by annually-contracted revenue, can’t reflect any risks in real time either. Of course, there are safeguards and processes to put in place to ensure your team stays on top of this. Final word At ChartMogul we followed in Intercom’s footsteps to move away from annual contracts, for the reasons above. We pursued “value-based pricing.” That said, there are plenty of reasons for SaaS companies to pursue annual contracts, and those are worth hearing, too. Here’s a short answer about why some SaaS prefers annual billing and how it impacts a subscription business. And if you’re curious about other things to do with SaaS pricing, check out these 5 key learnings from analyzing top B2B SaaS pricing pages.

[INST] SaaS Q&A: Why wouldn’t a SaaS company use annual billing? [/INST]

Last week we reviewed how annual billing impacts a subscription business. The benefits seem all-around convincing, so this week we thought we’d explore the other side of the issue. Given that SaaS giants like Salesforce, Zendesk, and Intercom all charge month to month, what are the reasons a SaaS company wouldn’t use annual billing? Here are two general reasons why a SaaS company might not want to use annual billing. The first has to do with the company’s SaaS pricing model, and the second has to do with customer engagement and SaaS metrics. More flexible pricing One key reason a SaaS company would not want to use annual contracting is if they price their product based on some kind of volume variant, such as number of licenses or users. The volume is divided into bands (0<100, 101<200, 201<300). Each band is a different tier of pricing — and usually marketed as a different plan. On a certain tier, the customer’s use of the service could max out at a specific limit, at which point they would need to upgrade to the next plan. The potential conflict between this type of pricing model and annual contracting is that your customers’ demand for, or use of, your SaaS product might fluctuate over the course of 12 months. The customer could bounce from one tier to the next, and this could wreak havoc on your internal bookkeeping, accounting, operations, etc. For example: If a customer downgrades to a cheaper plan at month 4, but has already paid upfront for a year-long contract, do you then have to process an 8-month refund for the difference? And what if they have a great quarter and then want to re-upgrade in month 9? Essentially, if your pricing model leaves room for mobility through the different tiers, or if your customers experience a lot of business volatility, annual billing doesn’t really make sense. Let’s look at some of this type of pricing model. User-based pricing This is a pricing model based on “the number of seats” or users that your customer has using your product on their end. This pricing model is in some very notable places, such as Salesforce and Zendesk. API-based SaaS API-based products design their pricing differently as well. Some, like Clearbit, have pricing tiers based on number of requests made to their API, whereas others may be based on the volume of data transmitted. Moreover, some APIs could charge not by tiered bandwidth or monthly contract at all, but charge more transactionally and on a granular level — individually per call (or per request) made to their API. In this way, the billing for a SaaS product breaks away from the typical recurring revenue structure of SaaS. Accurate insight into customer success and SaaS metrics This reason is less technical, and actually a bit more personal to the business management style of the founder or executive team. When customers are committed to an annual contract, it locks in a large proportion of your revenue and therefore also stabilizes your performance metrics (MRR, Churn, and so on). Month-to-month billing involves a lot of interaction between your company and customer, ensuring their satisfaction and keeping them on board. As a result you have your fingers on the pulse of your customer base, how they use and perceive your product. You also know that your metrics reflect a real-time performance of your business. With the reduced interaction that could come with an annual contract, there’s a risk you lose touch with how engaged and satisfied your customers are. And the healthy SaaS metrics you see, buoyed by annually-contracted revenue, can’t reflect any risks in real time either. Of course, there are safeguards and processes to put in place to ensure your team stays on top of this. Final word At ChartMogul we followed in Intercom’s footsteps to move away from annual contracts, for the reasons above. We pursued “value-based pricing.” That said, there are plenty of reasons for SaaS companies to pursue annual contracts, and those are worth hearing, too. Here’s a short answer about why some SaaS prefers annual billing and how it impacts a subscription business. And if you’re curious about other things to do with SaaS pricing, check out these 5 key learnings from analyzing top B2B SaaS pricing pages.

<sys> [INST] SaaS Q&A: Why wouldn’t a SaaS company use annual billing? [/INST] Last week we reviewed how annual billing impacts a subscription business. The benefits seem all-around convincing, so this week we thought we’d explore the other side of the issue. Given that SaaS giants like Salesforce, Zendesk, and Intercom all charge month to month, what are the reasons a SaaS company wouldn’t use annual billing? Here are two general reasons why a SaaS company might not want to use annual billing. The first has to do with the company’s SaaS pricing model, and the second has to do with customer engagement and SaaS metrics. More flexible pricing One key reason a SaaS company would not want to use annual contracting is if they price their product based on some kind of volume variant, such as number of licenses or users. The volume is divided into bands (0<100, 101<200, 201<300). Each band is a different tier of pricing — and usually marketed as a different plan. On a certain tier, the customer’s use of the service could max out at a specific limit, at which point they would need to upgrade to the next plan. The potential conflict between this type of pricing model and annual contracting is that your customers’ demand for, or use of, your SaaS product might fluctuate over the course of 12 months. The customer could bounce from one tier to the next, and this could wreak havoc on your internal bookkeeping, accounting, operations, etc. For example: If a customer downgrades to a cheaper plan at month 4, but has already paid upfront for a year-long contract, do you then have to process an 8-month refund for the difference? And what if they have a great quarter and then want to re-upgrade in month 9? Essentially, if your pricing model leaves room for mobility through the different tiers, or if your customers experience a lot of business volatility, annual billing doesn’t really make sense. Let’s look at some of this type of pricing model. User-based pricing This is a pricing model based on “the number of seats” or users that your customer has using your product on their end. This pricing model is in some very notable places, such as Salesforce and Zendesk. API-based SaaS API-based products design their pricing differently as well. Some, like Clearbit, have pricing tiers based on number of requests made to their API, whereas others may be based on the volume of data transmitted. Moreover, some APIs could charge not by tiered bandwidth or monthly contract at all, but charge more transactionally and on a granular level — individually per call (or per request) made to their API. In this way, the billing for a SaaS product breaks away from the typical recurring revenue structure of SaaS. Accurate insight into customer success and SaaS metrics This reason is less technical, and actually a bit more personal to the business management style of the founder or executive team. When customers are committed to an annual contract, it locks in a large proportion of your revenue and therefore also stabilizes your performance metrics (MRR, Churn, and so on). Month-to-month billing involves a lot of interaction between your company and customer, ensuring their satisfaction and keeping them on board. As a result you have your fingers on the pulse of your customer base, how they use and perceive your product. You also know that your metrics reflect a real-time performance of your business. With the reduced interaction that could come with an annual contract, there’s a risk you lose touch with how engaged and satisfied your customers are. And the healthy SaaS metrics you see, buoyed by annually-contracted revenue, can’t reflect any risks in real time either. Of course, there are safeguards and processes to put in place to ensure your team stays on top of this. Final word At ChartMogul we followed in Intercom’s footsteps to move away from annual contracts, for the reasons above. We pursued “value-based pricing.” That said, there are plenty of reasons for SaaS companies to pursue annual contracts, and those are worth hearing, too. Here’s a short answer about why some SaaS prefers annual billing and how it impacts a subscription business. And if you’re curious about other things to do with SaaS pricing, check out these 5 key learnings from analyzing top B2B SaaS pricing pages. </sys

5 Sneaky Reasons You’re Losing Customers (despite your best intentions). Kristen LaFrance is the Growth Lead at Churn Buster. She is dedicated to educating companies and founders on the importance of customer retention and the dangers of ignoring churn of all types. Thanks to Kristen and the Churn Buster team for sharing these common churn causes and helpful avoidance techniques. So you’re focused on improving customer retention, trying to do everything in your power to reduce churn. That’s awesome! But maybe your efforts are falling short and churn prevention is starting to feel a bit overwhelming and disheartening. This is actually extremely common. Churn is tricky. You’re dealing with human beings who have different needs, different communication styles, and different decision-making processes. So even if you’re working as hard as possible to keep those hard-earned customers, it can be a long and arduous road to retention. If you feel like you’re doing your best to reduce churn, but you’re not seeing the results you expected, you may be missing the mark on some sneakier churn drivers. Let’s look at some of these lesser-known reasons you may be losing customers. 1. You’re marketing to the wrong people New customers are exciting, I can level with you on that. This excitement makes it tempting to think any new customer is a customer worth celebrating, but that’s not always true. There will be leads that come into your pipeline who simply aren’t a good fit for your product. Maybe their needs don’t match your offering perfectly or the tech is too advanced. Maybe you don’t actually offer what they thought you did. There are endless reasons for a bad fit between product and customer, so don’t get too hung up here. It’s important to remember that bad-fit leads will eventually churn out no matter how incredible your product is. These users are simply finding a mismatch between their needs and your service. Don’t take it personally, they’re just not meant to be on your platform (and if you’re putting the customers’ needs above your own, you will be okay turning away people you can’t serve well). Even in the early stages of growth, converting bad-fit leads into paying customers can actually cost you more in the long run. When your product simply isn’t the solution they need, they will drain your support team and pull your resources and attention away from more valuable customers. So how do you spot a bad-fit lead before they become a customer? First, make sure you understand who the best-fit customer is and make detailed buyer personas. What are the characteristics of your most successful customers? How did they find you? What were their specific pain points? How does your product solve them? What is their role in the company? Were they the decision maker? If not, who was? Next, figure out what a bad-fit customer looks like so that your marketing and sales team can spot them before they convert. Create buyer personas for poor-fit leads as well and ensure everyone is educated on who you want to hold at the door. If you’re unsure if this is a problem for you, analyze your churn in monthly cohorts. If you’re seeing high levels of churn early in the user journey, take a closer look at who you’re marketing to and how their needs line up with your offering. Ensuring you’re bringing in the best-fit customers will set you up for dependable growth built to last. 2. You’re focused too heavily on new customers This ties in really well with the previous point. Yes, acquisition is absolutely vital to continuous growth. You need to be bringing in new users as often as possible. But, if you can’t keep those customers long-term, you’re just running in place. Retention is the bedrock of any successful SaaS business. You need a stable use base with compounding growth instead of a shaky one that’s constantly churning and burning through customers. If you’re fighting nonstop to bring in new customers, but not focusing on your existing customers, your churn battle is going to be never-ending. Think of it this way: When you build a platform that users stick with and continue to pay for, in turn, you increase your funds and resources available to market to new customers. So for sustainable growth, retention is just as vital (if not more vital) than acquisition. So what do you do? Invest in your customers more than you invest in your leads. Systematize customer success so that every team member is focused on creating the best experience for your current user base. Here are a few quick tips to help you focus efforts on existing customers: Proactively engage with your users as often as possible Map out the user journey and create engagement strategies throughout Ensure your product roadmap reflects the needs of your current users Build an internal system for implementing and analyzing retention efforts Foster empathy for your users (treat them like humans, not numbers on a screen). If you’re surprised how many customers you’re losing, despite working hard to create the best product possible, look at who you’re serving most. 3. You’re not tracking and measuring engagement You’re working hard to focus on existing customers and improve their experience, but you’re still not sure why customers are leaving. While your intentions are correct, maybe you’re falling short on how you track and measure those intentions. This is what can make customer retention feel a lot like damage control. A little more like you’re running around trying to make as many last minute saves as possible rather than proactively preventing churn. Sound familiar? It doesn’t have to be this hectic. Start by looking at customer retention as a way to dig in and connect with your customers. It’s not about saving people wanting to cancel, it’s about engaging with customers so they never consider leaving in the first place. There are tons of ways to improve engagement within your user base and you should be constantly testing new ways to connect with them. Hint: this should actually be really fun! You essentially want your customers to be integrated fully with your product, team, AND your brand. So engagement is important, you probably already knew that. Then why are you still losing customers? Likely because you’re not thoroughly tracking and analyzing engagement. Just like any marketing tactic, your engagement tactics should be tracked and measured. How much did adding an automated live chat on day 5 improve engagement with new users? Did a blog post sent to your customers result in more in-app activity that week? Does an in-app feature announcement lead to more users checking it out? It’s important to have systems set up to track when customers are logging in and how they are interacting with your platform. Intercom, MixPanel, and Heap are great options for this. Although engagement is all about human interaction, data should still drive the majority of your decisions. It goes without saying, but the more active your customers are, the more likely they are to stay. 4. You’ve prioritized upgrades over value Subscription-based billing and customer upgrades go hand in hand. When you have multiple pricing tiers, you’re constantly looking for ways to naturally upgrade customers to extend their LTV and increase your revenue. But, if your pricing tiers are designed around upsell opportunities and you’re pushing those too aggressively, you may be doing more harm than good. You know the importance of retention. That’s why you’re reading this article. But if you’re prioritizing upgrades over value provided, you’re not actually working towards retention and you’re likely missing the mark for your customers. Pricing tiers need to be designed to provide value, not to encourage upsells. The most successful and happy customer is one with all of the features they need, without a lot of excess. Each customer should be on the plan that provides them exactly what they need, no more no less. If you’re cutting features at the knees on your lower plans just to push people up the ladder, you will really start to upset customers. Conversely, if you’re putting customers on plans that provide more power than they actually need, they may fall into the analysis paralysis trap. Think of it this way: How often do you return to the same coffee shop simply because it’s easier than combing through all of the options on Google? When customers have more features and options than they truly need, they will start to wonder if they’re really getting their money’s worth. And once they start questioning your value, you’re already behind. So take a look at your pricing strategy and upgrade initiatives. Are you pushing customers up who don’t truly need new features? Are your lower-tier plans simply built to get people in the door rather than provide real value for those beginning customers? Being on the right plan gives users the best experience possible. Focus on the value provided for each customer and you’ll plug this sneaky retention leak. And as an added bonus, as customers become more comfortable and successful on their plan, upsells will begin to happen more naturally. It’s a win-win. 5. You’re failing to address passive churn Passive churn is hands down the sneakiest revenue leak out there, because customers can simply slip away without you noticing. And if that sounds a bit scary to you, good. Passive churn is often one of the most overlooked leaks despite being one of the easiest to plug. Passive churn occurs when failed payment issues aren’t resolved with your customers. You may already be thinking this can’t be that big of an issue. Hold that thought. Founders simply don’t understand the compounding nature of churn and how a small improvement can create huge returns in cash flow. It’s common for about 40% of churn to be caused by payment failures. That’s 40% of churn that didn’t need to happen. 40% of churn that could have been recovered. And 40% of churn that’s happening passively, despite your best intentions. So without a reliable dunning system in-place to handle failed payments and recover that revenue, your churn will quickly accelerate leading to compounding revenue loss, poor user experience, and an overwhelmed support team. From flexible campaigns to trustworthy emails and seamless card updating, there are lots of ways to optimize your failed payment recovery campaigns and delight your customers in the process. Here’s a great guide to creating a leak-proof dunning system and a handy cheat sheet for failed payments. So what can you do about this leak? Get the right tools for fighting passive churn. Chart Mogul is great for measuring and tracking churn over-time and gaining a deeper insight into your performance. Churn Buster is solely focused on failed payment recovery and can help you create an optimized system with full control and transparency. With these two best-of-breed tools in your arsenal, you’ll quickly plug this sneaky leak so you can move onto the fun stuff. You CAN beat your churn If you’re still reading, it’s safe to assume you’ve felt a little bogged down by your retention efforts. But don’t fret. You’re on the right path, you just have to start looking at the quiet, lesser-known churn drivers too. The little instances where your engagement and customer relationships aren’t diving deep enough. And now that you’re looking deeper into retention, you can start to strategically test and analyze new ways to better serve your customers. No matter how amazing your product is, there will always be a user who hasn’t had the greatest experience or a user who simply doesn’t find the value in your product. That’s okay. As long as you are constantly creating a customer-centric culture where serving your customers first is your biggest focus, you’ll surely create a more stable customer base ready to grow and scale with you. Churn is tricky but you can beat it. I promise.

[INST] 5 Sneaky Reasons You’re Losing Customers (despite your best intentions) [/INST]

Kristen LaFrance is the Growth Lead at Churn Buster. She is dedicated to educating companies and founders on the importance of customer retention and the dangers of ignoring churn of all types. Thanks to Kristen and the Churn Buster team for sharing these common churn causes and helpful avoidance techniques. So you’re focused on improving customer retention, trying to do everything in your power to reduce churn. That’s awesome! But maybe your efforts are falling short and churn prevention is starting to feel a bit overwhelming and disheartening. This is actually extremely common. Churn is tricky. You’re dealing with human beings who have different needs, different communication styles, and different decision-making processes. So even if you’re working as hard as possible to keep those hard-earned customers, it can be a long and arduous road to retention. If you feel like you’re doing your best to reduce churn, but you’re not seeing the results you expected, you may be missing the mark on some sneakier churn drivers. Let’s look at some of these lesser-known reasons you may be losing customers. 1. You’re marketing to the wrong people New customers are exciting, I can level with you on that. This excitement makes it tempting to think any new customer is a customer worth celebrating, but that’s not always true. There will be leads that come into your pipeline who simply aren’t a good fit for your product. Maybe their needs don’t match your offering perfectly or the tech is too advanced. Maybe you don’t actually offer what they thought you did. There are endless reasons for a bad fit between product and customer, so don’t get too hung up here. It’s important to remember that bad-fit leads will eventually churn out no matter how incredible your product is. These users are simply finding a mismatch between their needs and your service. Don’t take it personally, they’re just not meant to be on your platform (and if you’re putting the customers’ needs above your own, you will be okay turning away people you can’t serve well). Even in the early stages of growth, converting bad-fit leads into paying customers can actually cost you more in the long run. When your product simply isn’t the solution they need, they will drain your support team and pull your resources and attention away from more valuable customers. So how do you spot a bad-fit lead before they become a customer? First, make sure you understand who the best-fit customer is and make detailed buyer personas. What are the characteristics of your most successful customers? How did they find you? What were their specific pain points? How does your product solve them? What is their role in the company? Were they the decision maker? If not, who was? Next, figure out what a bad-fit customer looks like so that your marketing and sales team can spot them before they convert. Create buyer personas for poor-fit leads as well and ensure everyone is educated on who you want to hold at the door. If you’re unsure if this is a problem for you, analyze your churn in monthly cohorts. If you’re seeing high levels of churn early in the user journey, take a closer look at who you’re marketing to and how their needs line up with your offering. Ensuring you’re bringing in the best-fit customers will set you up for dependable growth built to last. 2. You’re focused too heavily on new customers This ties in really well with the previous point. Yes, acquisition is absolutely vital to continuous growth. You need to be bringing in new users as often as possible. But, if you can’t keep those customers long-term, you’re just running in place. Retention is the bedrock of any successful SaaS business. You need a stable use base with compounding growth instead of a shaky one that’s constantly churning and burning through customers. If you’re fighting nonstop to bring in new customers, but not focusing on your existing customers, your churn battle is going to be never-ending. Think of it this way: When you build a platform that users stick with and continue to pay for, in turn, you increase your funds and resources available to market to new customers. So for sustainable growth, retention is just as vital (if not more vital) than acquisition. So what do you do? Invest in your customers more than you invest in your leads. Systematize customer success so that every team member is focused on creating the best experience for your current user base. Here are a few quick tips to help you focus efforts on existing customers: Proactively engage with your users as often as possible Map out the user journey and create engagement strategies throughout Ensure your product roadmap reflects the needs of your current users Build an internal system for implementing and analyzing retention efforts Foster empathy for your users (treat them like humans, not numbers on a screen). If you’re surprised how many customers you’re losing, despite working hard to create the best product possible, look at who you’re serving most. 3. You’re not tracking and measuring engagement You’re working hard to focus on existing customers and improve their experience, but you’re still not sure why customers are leaving. While your intentions are correct, maybe you’re falling short on how you track and measure those intentions. This is what can make customer retention feel a lot like damage control. A little more like you’re running around trying to make as many last minute saves as possible rather than proactively preventing churn. Sound familiar? It doesn’t have to be this hectic. Start by looking at customer retention as a way to dig in and connect with your customers. It’s not about saving people wanting to cancel, it’s about engaging with customers so they never consider leaving in the first place. There are tons of ways to improve engagement within your user base and you should be constantly testing new ways to connect with them. Hint: this should actually be really fun! You essentially want your customers to be integrated fully with your product, team, AND your brand. So engagement is important, you probably already knew that. Then why are you still losing customers? Likely because you’re not thoroughly tracking and analyzing engagement. Just like any marketing tactic, your engagement tactics should be tracked and measured. How much did adding an automated live chat on day 5 improve engagement with new users? Did a blog post sent to your customers result in more in-app activity that week? Does an in-app feature announcement lead to more users checking it out? It’s important to have systems set up to track when customers are logging in and how they are interacting with your platform. Intercom, MixPanel, and Heap are great options for this. Although engagement is all about human interaction, data should still drive the majority of your decisions. It goes without saying, but the more active your customers are, the more likely they are to stay. 4. You’ve prioritized upgrades over value Subscription-based billing and customer upgrades go hand in hand. When you have multiple pricing tiers, you’re constantly looking for ways to naturally upgrade customers to extend their LTV and increase your revenue. But, if your pricing tiers are designed around upsell opportunities and you’re pushing those too aggressively, you may be doing more harm than good. You know the importance of retention. That’s why you’re reading this article. But if you’re prioritizing upgrades over value provided, you’re not actually working towards retention and you’re likely missing the mark for your customers. Pricing tiers need to be designed to provide value, not to encourage upsells. The most successful and happy customer is one with all of the features they need, without a lot of excess. Each customer should be on the plan that provides them exactly what they need, no more no less. If you’re cutting features at the knees on your lower plans just to push people up the ladder, you will really start to upset customers. Conversely, if you’re putting customers on plans that provide more power than they actually need, they may fall into the analysis paralysis trap. Think of it this way: How often do you return to the same coffee shop simply because it’s easier than combing through all of the options on Google? When customers have more features and options than they truly need, they will start to wonder if they’re really getting their money’s worth. And once they start questioning your value, you’re already behind. So take a look at your pricing strategy and upgrade initiatives. Are you pushing customers up who don’t truly need new features? Are your lower-tier plans simply built to get people in the door rather than provide real value for those beginning customers? Being on the right plan gives users the best experience possible. Focus on the value provided for each customer and you’ll plug this sneaky retention leak. And as an added bonus, as customers become more comfortable and successful on their plan, upsells will begin to happen more naturally. It’s a win-win. 5. You’re failing to address passive churn Passive churn is hands down the sneakiest revenue leak out there, because customers can simply slip away without you noticing. And if that sounds a bit scary to you, good. Passive churn is often one of the most overlooked leaks despite being one of the easiest to plug. Passive churn occurs when failed payment issues aren’t resolved with your customers. You may already be thinking this can’t be that big of an issue. Hold that thought. Founders simply don’t understand the compounding nature of churn and how a small improvement can create huge returns in cash flow. It’s common for about 40% of churn to be caused by payment failures. That’s 40% of churn that didn’t need to happen. 40% of churn that could have been recovered. And 40% of churn that’s happening passively, despite your best intentions. So without a reliable dunning system in-place to handle failed payments and recover that revenue, your churn will quickly accelerate leading to compounding revenue loss, poor user experience, and an overwhelmed support team. From flexible campaigns to trustworthy emails and seamless card updating, there are lots of ways to optimize your failed payment recovery campaigns and delight your customers in the process. Here’s a great guide to creating a leak-proof dunning system and a handy cheat sheet for failed payments. So what can you do about this leak? Get the right tools for fighting passive churn. Chart Mogul is great for measuring and tracking churn over-time and gaining a deeper insight into your performance. Churn Buster is solely focused on failed payment recovery and can help you create an optimized system with full control and transparency. With these two best-of-breed tools in your arsenal, you’ll quickly plug this sneaky leak so you can move onto the fun stuff. You CAN beat your churn If you’re still reading, it’s safe to assume you’ve felt a little bogged down by your retention efforts. But don’t fret. You’re on the right path, you just have to start looking at the quiet, lesser-known churn drivers too. The little instances where your engagement and customer relationships aren’t diving deep enough. And now that you’re looking deeper into retention, you can start to strategically test and analyze new ways to better serve your customers. No matter how amazing your product is, there will always be a user who hasn’t had the greatest experience or a user who simply doesn’t find the value in your product. That’s okay. As long as you are constantly creating a customer-centric culture where serving your customers first is your biggest focus, you’ll surely create a more stable customer base ready to grow and scale with you. Churn is tricky but you can beat it. I promise.

<sys> [INST] 5 Sneaky Reasons You’re Losing Customers (despite your best intentions) [/INST] Kristen LaFrance is the Growth Lead at Churn Buster. She is dedicated to educating companies and founders on the importance of customer retention and the dangers of ignoring churn of all types. Thanks to Kristen and the Churn Buster team for sharing these common churn causes and helpful avoidance techniques. So you’re focused on improving customer retention, trying to do everything in your power to reduce churn. That’s awesome! But maybe your efforts are falling short and churn prevention is starting to feel a bit overwhelming and disheartening. This is actually extremely common. Churn is tricky. You’re dealing with human beings who have different needs, different communication styles, and different decision-making processes. So even if you’re working as hard as possible to keep those hard-earned customers, it can be a long and arduous road to retention. If you feel like you’re doing your best to reduce churn, but you’re not seeing the results you expected, you may be missing the mark on some sneakier churn drivers. Let’s look at some of these lesser-known reasons you may be losing customers. 1. You’re marketing to the wrong people New customers are exciting, I can level with you on that. This excitement makes it tempting to think any new customer is a customer worth celebrating, but that’s not always true. There will be leads that come into your pipeline who simply aren’t a good fit for your product. Maybe their needs don’t match your offering perfectly or the tech is too advanced. Maybe you don’t actually offer what they thought you did. There are endless reasons for a bad fit between product and customer, so don’t get too hung up here. It’s important to remember that bad-fit leads will eventually churn out no matter how incredible your product is. These users are simply finding a mismatch between their needs and your service. Don’t take it personally, they’re just not meant to be on your platform (and if you’re putting the customers’ needs above your own, you will be okay turning away people you can’t serve well). Even in the early stages of growth, converting bad-fit leads into paying customers can actually cost you more in the long run. When your product simply isn’t the solution they need, they will drain your support team and pull your resources and attention away from more valuable customers. So how do you spot a bad-fit lead before they become a customer? First, make sure you understand who the best-fit customer is and make detailed buyer personas. What are the characteristics of your most successful customers? How did they find you? What were their specific pain points? How does your product solve them? What is their role in the company? Were they the decision maker? If not, who was? Next, figure out what a bad-fit customer looks like so that your marketing and sales team can spot them before they convert. Create buyer personas for poor-fit leads as well and ensure everyone is educated on who you want to hold at the door. If you’re unsure if this is a problem for you, analyze your churn in monthly cohorts. If you’re seeing high levels of churn early in the user journey, take a closer look at who you’re marketing to and how their needs line up with your offering. Ensuring you’re bringing in the best-fit customers will set you up for dependable growth built to last. 2. You’re focused too heavily on new customers This ties in really well with the previous point. Yes, acquisition is absolutely vital to continuous growth. You need to be bringing in new users as often as possible. But, if you can’t keep those customers long-term, you’re just running in place. Retention is the bedrock of any successful SaaS business. You need a stable use base with compounding growth instead of a shaky one that’s constantly churning and burning through customers. If you’re fighting nonstop to bring in new customers, but not focusing on your existing customers, your churn battle is going to be never-ending. Think of it this way: When you build a platform that users stick with and continue to pay for, in turn, you increase your funds and resources available to market to new customers. So for sustainable growth, retention is just as vital (if not more vital) than acquisition. So what do you do? Invest in your customers more than you invest in your leads. Systematize customer success so that every team member is focused on creating the best experience for your current user base. Here are a few quick tips to help you focus efforts on existing customers: Proactively engage with your users as often as possible Map out the user journey and create engagement strategies throughout Ensure your product roadmap reflects the needs of your current users Build an internal system for implementing and analyzing retention efforts Foster empathy for your users (treat them like humans, not numbers on a screen). If you’re surprised how many customers you’re losing, despite working hard to create the best product possible, look at who you’re serving most. 3. You’re not tracking and measuring engagement You’re working hard to focus on existing customers and improve their experience, but you’re still not sure why customers are leaving. While your intentions are correct, maybe you’re falling short on how you track and measure those intentions. This is what can make customer retention feel a lot like damage control. A little more like you’re running around trying to make as many last minute saves as possible rather than proactively preventing churn. Sound familiar? It doesn’t have to be this hectic. Start by looking at customer retention as a way to dig in and connect with your customers. It’s not about saving people wanting to cancel, it’s about engaging with customers so they never consider leaving in the first place. There are tons of ways to improve engagement within your user base and you should be constantly testing new ways to connect with them. Hint: this should actually be really fun! You essentially want your customers to be integrated fully with your product, team, AND your brand. So engagement is important, you probably already knew that. Then why are you still losing customers? Likely because you’re not thoroughly tracking and analyzing engagement. Just like any marketing tactic, your engagement tactics should be tracked and measured. How much did adding an automated live chat on day 5 improve engagement with new users? Did a blog post sent to your customers result in more in-app activity that week? Does an in-app feature announcement lead to more users checking it out? It’s important to have systems set up to track when customers are logging in and how they are interacting with your platform. Intercom, MixPanel, and Heap are great options for this. Although engagement is all about human interaction, data should still drive the majority of your decisions. It goes without saying, but the more active your customers are, the more likely they are to stay. 4. You’ve prioritized upgrades over value Subscription-based billing and customer upgrades go hand in hand. When you have multiple pricing tiers, you’re constantly looking for ways to naturally upgrade customers to extend their LTV and increase your revenue. But, if your pricing tiers are designed around upsell opportunities and you’re pushing those too aggressively, you may be doing more harm than good. You know the importance of retention. That’s why you’re reading this article. But if you’re prioritizing upgrades over value provided, you’re not actually working towards retention and you’re likely missing the mark for your customers. Pricing tiers need to be designed to provide value, not to encourage upsells. The most successful and happy customer is one with all of the features they need, without a lot of excess. Each customer should be on the plan that provides them exactly what they need, no more no less. If you’re cutting features at the knees on your lower plans just to push people up the ladder, you will really start to upset customers. Conversely, if you’re putting customers on plans that provide more power than they actually need, they may fall into the analysis paralysis trap. Think of it this way: How often do you return to the same coffee shop simply because it’s easier than combing through all of the options on Google? When customers have more features and options than they truly need, they will start to wonder if they’re really getting their money’s worth. And once they start questioning your value, you’re already behind. So take a look at your pricing strategy and upgrade initiatives. Are you pushing customers up who don’t truly need new features? Are your lower-tier plans simply built to get people in the door rather than provide real value for those beginning customers? Being on the right plan gives users the best experience possible. Focus on the value provided for each customer and you’ll plug this sneaky retention leak. And as an added bonus, as customers become more comfortable and successful on their plan, upsells will begin to happen more naturally. It’s a win-win. 5. You’re failing to address passive churn Passive churn is hands down the sneakiest revenue leak out there, because customers can simply slip away without you noticing. And if that sounds a bit scary to you, good. Passive churn is often one of the most overlooked leaks despite being one of the easiest to plug. Passive churn occurs when failed payment issues aren’t resolved with your customers. You may already be thinking this can’t be that big of an issue. Hold that thought. Founders simply don’t understand the compounding nature of churn and how a small improvement can create huge returns in cash flow. It’s common for about 40% of churn to be caused by payment failures. That’s 40% of churn that didn’t need to happen. 40% of churn that could have been recovered. And 40% of churn that’s happening passively, despite your best intentions. So without a reliable dunning system in-place to handle failed payments and recover that revenue, your churn will quickly accelerate leading to compounding revenue loss, poor user experience, and an overwhelmed support team. From flexible campaigns to trustworthy emails and seamless card updating, there are lots of ways to optimize your failed payment recovery campaigns and delight your customers in the process. Here’s a great guide to creating a leak-proof dunning system and a handy cheat sheet for failed payments. So what can you do about this leak? Get the right tools for fighting passive churn. Chart Mogul is great for measuring and tracking churn over-time and gaining a deeper insight into your performance. Churn Buster is solely focused on failed payment recovery and can help you create an optimized system with full control and transparency. With these two best-of-breed tools in your arsenal, you’ll quickly plug this sneaky leak so you can move onto the fun stuff. You CAN beat your churn If you’re still reading, it’s safe to assume you’ve felt a little bogged down by your retention efforts. But don’t fret. You’re on the right path, you just have to start looking at the quiet, lesser-known churn drivers too. The little instances where your engagement and customer relationships aren’t diving deep enough. And now that you’re looking deeper into retention, you can start to strategically test and analyze new ways to better serve your customers. No matter how amazing your product is, there will always be a user who hasn’t had the greatest experience or a user who simply doesn’t find the value in your product. That’s okay. As long as you are constantly creating a customer-centric culture where serving your customers first is your biggest focus, you’ll surely create a more stable customer base ready to grow and scale with you. Churn is tricky but you can beat it. I promise. </sys

New Feature: MRR that Entered/Left Segment. When I read Don Norman’s book “The Design of Everyday Things“, one of the key takeaways for me was the importance of taking into account the difference between how a tool has been designed to work and how a user thinks it works. Unsurprisingly, the more the two differ, the greater the chance the user will get frustrated or confused, even when the tool is working just as designed. Such alignment issues are pervasive across products, be they ovens or web applications. A common solution is to make it clearer how the tool works so that users can update their mental models accordingly. Because data in ChartMogul is built from the ground up — giving you both reliability and detail, our product is not immune to similar challenges. This can result in our analytics being less clear, and therefore harder to rely on. We have discovered that clarifying the workings of our product, not only makes the data easier to understand, it can also lead to providing some further insights. This is neatly illustrated in a new improvement to one of our most popular functions, which is to filter your MRR by a specific plan. Filtering by plan — how it has worked so far Filtering your data down to a specific plan is great, as it can allow you to carry out price experimentation or identify which product offerings are driving most of your revenue. However, it differs from most of our other filters, which segment the data depending on whether someone is a certain type of customer or not. This is a subtle but important difference, based on the fact that our filters essentially do two things: Select and aggregate the relevant data (e.g. total MRR shown on the chart) Select the relevant activities to be shown in the data table below the chart What counts as relevant activities means that when plan filters are applied, the sum of the MRR movements shown in the data table below the chart will not always add up to the total MRR shown on the chart series. Let’s take the example where Jane purchased the Silver plan in January, and then the following month swapped it for the Gold plan. If you were to filter on a customer level (i.e. ‘Jane’), you would see the MRR belonging to Jane, and the activities relevant to her. In this case, the total MRR is aligned with the movements. What counts and what doesn’t when you use the plan filter functionality However, if you were to filter the results by the Silver plan, you would get the total MRR for the Silver plan, but you would only see activities that switched customers to the Silver plan: you would not see the switch to the Gold plan in the breakdown, even though this still affects the total MRR of the Silver plan. There is an additional subtlety. If on a future date Jane were to downgrade back to the Silver plan, this activity would show up in the MRR breakdown. However, it would be classed as a contraction of MRR (which indeed it is), but one which increases the total MRR of the Silver plan. As we see, it can get complicated (and confusing) quickly. There are therefore two problems. The first is clarity, in that it is not immediately clear as to why the numbers in the data table below the chart no longer add up when some of the plan filters are applied. The second is that the breakdown provides an incomplete picture of the lifecycle of users with a specific plan. What happened to the users who switched away to other plans? Was their experience so positive that they upgraded to a more expensive plan, or was the opposite the case? What has changed Our approach was to add a new feature to the MRR breakdown data table below the charts to provide the information that was previously missing. We now include the value of the subscriptions that switched to the filtered plan, as well as the value of the subscriptions that switched out of the plan: The MRR breakdown data table now includes new lines for MRR that entered and left the segment/plan By doing so, the values in the breakdown will now add up to the total MRR. Selecting one of the cells, you will also be able to see the activities that resulted in the switch. If we were to think of the example above, Jane’s expansion to the Gold plan would be seen among the MRR that left the segment, whereas her later downgrade to the Silver plan would be seen among the MRR that entered the segment. Some benefits in practice Providing better visibility of our numbers is good on its own, but there are some concrete use cases where this improvement can be very useful. If you are a product manager owning a specific plan, identifying customers switching to it gives you a better understanding of the top of your conversion funnel. Conversely, some of your customers may be ‘leaving your segment’, but by expanding to a more expensive one, i.e. an overall gain for the company. With more companies having a ‘land-and-expand’ business model, this sort of insight can be crucial, as a growing product ecosystem can be lucrative (even if not without its challenges.) Another example concerns monitoring transitions to and from annual plans. The guaranteed revenue of annual plans can be preferred over the higher rates obtained from monthly plans, even though this would result in a contraction of such customers’ MRR. By filtering by an annual plan, you will now be able to see see the size of the benefits such ‘good’ MRR contractions bring in terms of a more stable recurring revenue. Better clarity, more insight When we started working on clarifying the behavior of the plan filter, our main drive was to remove a source of perceived inaccuracy. However, by taking a step back to understand the source of the confusion, we also uncovered a new potential source of insights for our customers. In that respect, building an analytics product is similar to tackling a math problem at school: it is good to show your work.

[INST] New Feature: MRR that Entered/Left Segment [/INST]

When I read Don Norman’s book “The Design of Everyday Things“, one of the key takeaways for me was the importance of taking into account the difference between how a tool has been designed to work and how a user thinks it works. Unsurprisingly, the more the two differ, the greater the chance the user will get frustrated or confused, even when the tool is working just as designed. Such alignment issues are pervasive across products, be they ovens or web applications. A common solution is to make it clearer how the tool works so that users can update their mental models accordingly. Because data in ChartMogul is built from the ground up — giving you both reliability and detail, our product is not immune to similar challenges. This can result in our analytics being less clear, and therefore harder to rely on. We have discovered that clarifying the workings of our product, not only makes the data easier to understand, it can also lead to providing some further insights. This is neatly illustrated in a new improvement to one of our most popular functions, which is to filter your MRR by a specific plan. Filtering by plan — how it has worked so far Filtering your data down to a specific plan is great, as it can allow you to carry out price experimentation or identify which product offerings are driving most of your revenue. However, it differs from most of our other filters, which segment the data depending on whether someone is a certain type of customer or not. This is a subtle but important difference, based on the fact that our filters essentially do two things: Select and aggregate the relevant data (e.g. total MRR shown on the chart) Select the relevant activities to be shown in the data table below the chart What counts as relevant activities means that when plan filters are applied, the sum of the MRR movements shown in the data table below the chart will not always add up to the total MRR shown on the chart series. Let’s take the example where Jane purchased the Silver plan in January, and then the following month swapped it for the Gold plan. If you were to filter on a customer level (i.e. ‘Jane’), you would see the MRR belonging to Jane, and the activities relevant to her. In this case, the total MRR is aligned with the movements. What counts and what doesn’t when you use the plan filter functionality However, if you were to filter the results by the Silver plan, you would get the total MRR for the Silver plan, but you would only see activities that switched customers to the Silver plan: you would not see the switch to the Gold plan in the breakdown, even though this still affects the total MRR of the Silver plan. There is an additional subtlety. If on a future date Jane were to downgrade back to the Silver plan, this activity would show up in the MRR breakdown. However, it would be classed as a contraction of MRR (which indeed it is), but one which increases the total MRR of the Silver plan. As we see, it can get complicated (and confusing) quickly. There are therefore two problems. The first is clarity, in that it is not immediately clear as to why the numbers in the data table below the chart no longer add up when some of the plan filters are applied. The second is that the breakdown provides an incomplete picture of the lifecycle of users with a specific plan. What happened to the users who switched away to other plans? Was their experience so positive that they upgraded to a more expensive plan, or was the opposite the case? What has changed Our approach was to add a new feature to the MRR breakdown data table below the charts to provide the information that was previously missing. We now include the value of the subscriptions that switched to the filtered plan, as well as the value of the subscriptions that switched out of the plan: The MRR breakdown data table now includes new lines for MRR that entered and left the segment/plan By doing so, the values in the breakdown will now add up to the total MRR. Selecting one of the cells, you will also be able to see the activities that resulted in the switch. If we were to think of the example above, Jane’s expansion to the Gold plan would be seen among the MRR that left the segment, whereas her later downgrade to the Silver plan would be seen among the MRR that entered the segment. Some benefits in practice Providing better visibility of our numbers is good on its own, but there are some concrete use cases where this improvement can be very useful. If you are a product manager owning a specific plan, identifying customers switching to it gives you a better understanding of the top of your conversion funnel. Conversely, some of your customers may be ‘leaving your segment’, but by expanding to a more expensive one, i.e. an overall gain for the company. With more companies having a ‘land-and-expand’ business model, this sort of insight can be crucial, as a growing product ecosystem can be lucrative (even if not without its challenges.) Another example concerns monitoring transitions to and from annual plans. The guaranteed revenue of annual plans can be preferred over the higher rates obtained from monthly plans, even though this would result in a contraction of such customers’ MRR. By filtering by an annual plan, you will now be able to see see the size of the benefits such ‘good’ MRR contractions bring in terms of a more stable recurring revenue. Better clarity, more insight When we started working on clarifying the behavior of the plan filter, our main drive was to remove a source of perceived inaccuracy. However, by taking a step back to understand the source of the confusion, we also uncovered a new potential source of insights for our customers. In that respect, building an analytics product is similar to tackling a math problem at school: it is good to show your work.

<sys> [INST] New Feature: MRR that Entered/Left Segment [/INST] When I read Don Norman’s book “The Design of Everyday Things“, one of the key takeaways for me was the importance of taking into account the difference between how a tool has been designed to work and how a user thinks it works. Unsurprisingly, the more the two differ, the greater the chance the user will get frustrated or confused, even when the tool is working just as designed. Such alignment issues are pervasive across products, be they ovens or web applications. A common solution is to make it clearer how the tool works so that users can update their mental models accordingly. Because data in ChartMogul is built from the ground up — giving you both reliability and detail, our product is not immune to similar challenges. This can result in our analytics being less clear, and therefore harder to rely on. We have discovered that clarifying the workings of our product, not only makes the data easier to understand, it can also lead to providing some further insights. This is neatly illustrated in a new improvement to one of our most popular functions, which is to filter your MRR by a specific plan. Filtering by plan — how it has worked so far Filtering your data down to a specific plan is great, as it can allow you to carry out price experimentation or identify which product offerings are driving most of your revenue. However, it differs from most of our other filters, which segment the data depending on whether someone is a certain type of customer or not. This is a subtle but important difference, based on the fact that our filters essentially do two things: Select and aggregate the relevant data (e.g. total MRR shown on the chart) Select the relevant activities to be shown in the data table below the chart What counts as relevant activities means that when plan filters are applied, the sum of the MRR movements shown in the data table below the chart will not always add up to the total MRR shown on the chart series. Let’s take the example where Jane purchased the Silver plan in January, and then the following month swapped it for the Gold plan. If you were to filter on a customer level (i.e. ‘Jane’), you would see the MRR belonging to Jane, and the activities relevant to her. In this case, the total MRR is aligned with the movements. What counts and what doesn’t when you use the plan filter functionality However, if you were to filter the results by the Silver plan, you would get the total MRR for the Silver plan, but you would only see activities that switched customers to the Silver plan: you would not see the switch to the Gold plan in the breakdown, even though this still affects the total MRR of the Silver plan. There is an additional subtlety. If on a future date Jane were to downgrade back to the Silver plan, this activity would show up in the MRR breakdown. However, it would be classed as a contraction of MRR (which indeed it is), but one which increases the total MRR of the Silver plan. As we see, it can get complicated (and confusing) quickly. There are therefore two problems. The first is clarity, in that it is not immediately clear as to why the numbers in the data table below the chart no longer add up when some of the plan filters are applied. The second is that the breakdown provides an incomplete picture of the lifecycle of users with a specific plan. What happened to the users who switched away to other plans? Was their experience so positive that they upgraded to a more expensive plan, or was the opposite the case? What has changed Our approach was to add a new feature to the MRR breakdown data table below the charts to provide the information that was previously missing. We now include the value of the subscriptions that switched to the filtered plan, as well as the value of the subscriptions that switched out of the plan: The MRR breakdown data table now includes new lines for MRR that entered and left the segment/plan By doing so, the values in the breakdown will now add up to the total MRR. Selecting one of the cells, you will also be able to see the activities that resulted in the switch. If we were to think of the example above, Jane’s expansion to the Gold plan would be seen among the MRR that left the segment, whereas her later downgrade to the Silver plan would be seen among the MRR that entered the segment. Some benefits in practice Providing better visibility of our numbers is good on its own, but there are some concrete use cases where this improvement can be very useful. If you are a product manager owning a specific plan, identifying customers switching to it gives you a better understanding of the top of your conversion funnel. Conversely, some of your customers may be ‘leaving your segment’, but by expanding to a more expensive one, i.e. an overall gain for the company. With more companies having a ‘land-and-expand’ business model, this sort of insight can be crucial, as a growing product ecosystem can be lucrative (even if not without its challenges.) Another example concerns monitoring transitions to and from annual plans. The guaranteed revenue of annual plans can be preferred over the higher rates obtained from monthly plans, even though this would result in a contraction of such customers’ MRR. By filtering by an annual plan, you will now be able to see see the size of the benefits such ‘good’ MRR contractions bring in terms of a more stable recurring revenue. Better clarity, more insight When we started working on clarifying the behavior of the plan filter, our main drive was to remove a source of perceived inaccuracy. However, by taking a step back to understand the source of the confusion, we also uncovered a new potential source of insights for our customers. In that respect, building an analytics product is similar to tackling a math problem at school: it is good to show your work. </sys

Announcing Mogul I/O – A Community for SaaS Founders and CEOs. Those of you who’ve been following ChartMogul for some time may remember that Mogul I/O was originally an event series that we held back in 2018 in four cities (SF, NYC, London, Berlin). We planned to reboot the event in 2020 as a single larger event in SF or NYC, but then COVID hit and put that idea on hold. We considered re-launching it as an online event, but it felt like everyone was launching those. Also, in my view the biggest benefit of events is meeting people in real life and building lasting connections. We then thought about re-launching Mogul I/O as an online community, but for some time couldn’t think of a good angle to make it unique and worthwhile. Then I got to thinking, our VC, Point Nine Capital, runs a Slack community for portfolio companies, it’s open to founders and employees of their portfolio companies, as well as team members and close friends of Point Nine. Within their Slack community, my favorite channel is the founders-only one; it’s a private place for founders to connect with each other. It is however just for founders Point Nine have backed, which excludes the vast majority of SaaS founders. So the idea for today’s reboot of Mogul I/O was born – it’s simply a Slack-based community, exclusively for SaaS founders and CEOs. We’ve been running it as a pilot for the past few weeks with around 45 members, and there has been enough of a positive reaction for us to pursue this concept, do an official launch, and start opening it up to a wider audience. We want the sweet spot for the community to be founders and CEOs operating SaaS businesses doing between $0.5M to $50M in ARR. Below half a million in ARR ($42K MRR) the challenges are quite different, e.g. the search for PMF, survival, etc. There are also quite a few communities serving very early stage startups and bootstrappers (e.g. IndieHackers, etc). As companies scale from $0.5M to $50M in ARR the daily challenges facing founders tend to be some combination of team, hiring, making oneself redundant, becoming a better leader, fundraising, scaling, compliance, international expansion, etc, etc. Above $50M the challenges are also very different, e.g. figuring out how to manage hundreds of employees, raising mega growth rounds from Goldman Sachs, preparing for an IPO, etc. In time we may open up the community to earlier stage founders, though for now we’re going to start things off with these rough parameters for membership 🙏 and see how things go. We’re doing this for fun, mainly because I love connecting with other founders and CEOs, it’s not going to make money and it doesn’t need to grow too large. If you are a SaaS founder or CEO and want to be part of this community, please head over to mogul.io and click “Apply to Join” 🙂 P.s. Mogul I/O is on ProductHunt today, please check it out and give it a 👍 if you like what you see 🙏

[INST] Announcing Mogul I/O – A Community for SaaS Founders and CEOs [/INST]

Those of you who’ve been following ChartMogul for some time may remember that Mogul I/O was originally an event series that we held back in 2018 in four cities (SF, NYC, London, Berlin). We planned to reboot the event in 2020 as a single larger event in SF or NYC, but then COVID hit and put that idea on hold. We considered re-launching it as an online event, but it felt like everyone was launching those. Also, in my view the biggest benefit of events is meeting people in real life and building lasting connections. We then thought about re-launching Mogul I/O as an online community, but for some time couldn’t think of a good angle to make it unique and worthwhile. Then I got to thinking, our VC, Point Nine Capital, runs a Slack community for portfolio companies, it’s open to founders and employees of their portfolio companies, as well as team members and close friends of Point Nine. Within their Slack community, my favorite channel is the founders-only one; it’s a private place for founders to connect with each other. It is however just for founders Point Nine have backed, which excludes the vast majority of SaaS founders. So the idea for today’s reboot of Mogul I/O was born – it’s simply a Slack-based community, exclusively for SaaS founders and CEOs. We’ve been running it as a pilot for the past few weeks with around 45 members, and there has been enough of a positive reaction for us to pursue this concept, do an official launch, and start opening it up to a wider audience. We want the sweet spot for the community to be founders and CEOs operating SaaS businesses doing between $0.5M to $50M in ARR. Below half a million in ARR ($42K MRR) the challenges are quite different, e.g. the search for PMF, survival, etc. There are also quite a few communities serving very early stage startups and bootstrappers (e.g. IndieHackers, etc). As companies scale from $0.5M to $50M in ARR the daily challenges facing founders tend to be some combination of team, hiring, making oneself redundant, becoming a better leader, fundraising, scaling, compliance, international expansion, etc, etc. Above $50M the challenges are also very different, e.g. figuring out how to manage hundreds of employees, raising mega growth rounds from Goldman Sachs, preparing for an IPO, etc. In time we may open up the community to earlier stage founders, though for now we’re going to start things off with these rough parameters for membership 🙏 and see how things go. We’re doing this for fun, mainly because I love connecting with other founders and CEOs, it’s not going to make money and it doesn’t need to grow too large. If you are a SaaS founder or CEO and want to be part of this community, please head over to mogul.io and click “Apply to Join” 🙂 P.s. Mogul I/O is on ProductHunt today, please check it out and give it a 👍 if you like what you see 🙏

<sys> [INST] Announcing Mogul I/O – A Community for SaaS Founders and CEOs [/INST] Those of you who’ve been following ChartMogul for some time may remember that Mogul I/O was originally an event series that we held back in 2018 in four cities (SF, NYC, London, Berlin). We planned to reboot the event in 2020 as a single larger event in SF or NYC, but then COVID hit and put that idea on hold. We considered re-launching it as an online event, but it felt like everyone was launching those. Also, in my view the biggest benefit of events is meeting people in real life and building lasting connections. We then thought about re-launching Mogul I/O as an online community, but for some time couldn’t think of a good angle to make it unique and worthwhile. Then I got to thinking, our VC, Point Nine Capital, runs a Slack community for portfolio companies, it’s open to founders and employees of their portfolio companies, as well as team members and close friends of Point Nine. Within their Slack community, my favorite channel is the founders-only one; it’s a private place for founders to connect with each other. It is however just for founders Point Nine have backed, which excludes the vast majority of SaaS founders. So the idea for today’s reboot of Mogul I/O was born – it’s simply a Slack-based community, exclusively for SaaS founders and CEOs. We’ve been running it as a pilot for the past few weeks with around 45 members, and there has been enough of a positive reaction for us to pursue this concept, do an official launch, and start opening it up to a wider audience. We want the sweet spot for the community to be founders and CEOs operating SaaS businesses doing between $0.5M to $50M in ARR. Below half a million in ARR ($42K MRR) the challenges are quite different, e.g. the search for PMF, survival, etc. There are also quite a few communities serving very early stage startups and bootstrappers (e.g. IndieHackers, etc). As companies scale from $0.5M to $50M in ARR the daily challenges facing founders tend to be some combination of team, hiring, making oneself redundant, becoming a better leader, fundraising, scaling, compliance, international expansion, etc, etc. Above $50M the challenges are also very different, e.g. figuring out how to manage hundreds of employees, raising mega growth rounds from Goldman Sachs, preparing for an IPO, etc. In time we may open up the community to earlier stage founders, though for now we’re going to start things off with these rough parameters for membership 🙏 and see how things go. We’re doing this for fun, mainly because I love connecting with other founders and CEOs, it’s not going to make money and it doesn’t need to grow too large. If you are a SaaS founder or CEO and want to be part of this community, please head over to mogul.io and click “Apply to Join” 🙂 P.s. Mogul I/O is on ProductHunt today, please check it out and give it a 👍 if you like what you see 🙏 </sys

The New Tags Manager Lets You Quickly Edit and Delete Your Tags. We just introduced a new addition to the Data platform section of our application: Tags manager. Over the years tags have been heavily used for filtering and customer segmentation. The thing that was missing was the tags manager. Our customers weren’t able to see all the tags that exist in their accounts in one place. In addition, even though it was possible to remove one tag from a customer at a time, it was not possible to delete or rename tags. With the addition of this new functionality, we are now giving you the power to do all these things. What you can do with the tags manager In order to take advantage of the new tags manager, you need to be an admin of your ChartMogul account. Head over to the Data platform section, and select Tags in the Metadata section. The tags manager can be found under Data platform > Metadata in your ChartMogul account With the tags manager you can see and manipulate all the tags added to your customers. A simple interface, but many new things you can do with your tags. Edit a Tag’s name In order to edit the name of a tag, you need to locate the tag in the table, click on the ✏️ icon and type the new name. Save your changes and the tag’s name is going to be updated in all relevant customer records. Changing the name of a tag takes no more than a few seconds Delete a Tag When a tag is applied to only one customer and that customer is either deleted or the tag is removed from that customer, the tag will be deleted automatically. If you wish to delete a tag that is applied to multiple customers you can do it using the tags manager. Locate the tag that you want to delete, click on the 🗑️ icon. Confirm the deletion in the alert box, and the tag will be removed from all customers that had it applied. You can now quickly delete a tag and remove it from all customer records with a click. Get a list of all customers that have a specific tag applied The second column in the table shows how many customers have a specific tag applied. Clicking on this number generates a list of those customers. Click on the number of customers to see a list of their records. Identify the last customer to have a tag applied or removed The column Last added to customer contains a link to the last customer to have that tag added or removed. In case you are not sure where the tag was used last, you are able to get this information by clicking on the link in the column. Clicking on the link in the Last added to customer field will take you to the relevant customer record. Inspect who last performed an action on a specific tag Column Last used by contains information about the user that either last applied the tag, removed the tag, or edited the tag’s name. Having this information available makes investigating changes easier. Last used by shows you the user who last made changes to the tag The tags manager provides the possibility to identify whether the tags are up to date and still in use, so one of the main focuses of the tags manager is to enable tags to be deleted in bulk. Additionally, the possibility to rename tags makes working with them easier and less error-prone, allowing you to quickly fix typos or enforce naming conventions. Stay tuned: more to come! The tags manager is now live in your ChartMogul account, but we’re not done yet. The next thing we want to add is the ability to assign tags to customers in bulk, making it easier to create and work with customer segments. Learn more about using tags and check out the tags manager today. Let us know what you think — you can always get in touch with our team by writing to [email protected].

[INST] The New Tags Manager Lets You Quickly Edit and Delete Your Tags [/INST]

We just introduced a new addition to the Data platform section of our application: Tags manager. Over the years tags have been heavily used for filtering and customer segmentation. The thing that was missing was the tags manager. Our customers weren’t able to see all the tags that exist in their accounts in one place. In addition, even though it was possible to remove one tag from a customer at a time, it was not possible to delete or rename tags. With the addition of this new functionality, we are now giving you the power to do all these things. What you can do with the tags manager In order to take advantage of the new tags manager, you need to be an admin of your ChartMogul account. Head over to the Data platform section, and select Tags in the Metadata section. The tags manager can be found under Data platform > Metadata in your ChartMogul account With the tags manager you can see and manipulate all the tags added to your customers. A simple interface, but many new things you can do with your tags. Edit a Tag’s name In order to edit the name of a tag, you need to locate the tag in the table, click on the ✏️ icon and type the new name. Save your changes and the tag’s name is going to be updated in all relevant customer records. Changing the name of a tag takes no more than a few seconds Delete a Tag When a tag is applied to only one customer and that customer is either deleted or the tag is removed from that customer, the tag will be deleted automatically. If you wish to delete a tag that is applied to multiple customers you can do it using the tags manager. Locate the tag that you want to delete, click on the 🗑️ icon. Confirm the deletion in the alert box, and the tag will be removed from all customers that had it applied. You can now quickly delete a tag and remove it from all customer records with a click. Get a list of all customers that have a specific tag applied The second column in the table shows how many customers have a specific tag applied. Clicking on this number generates a list of those customers. Click on the number of customers to see a list of their records. Identify the last customer to have a tag applied or removed The column Last added to customer contains a link to the last customer to have that tag added or removed. In case you are not sure where the tag was used last, you are able to get this information by clicking on the link in the column. Clicking on the link in the Last added to customer field will take you to the relevant customer record. Inspect who last performed an action on a specific tag Column Last used by contains information about the user that either last applied the tag, removed the tag, or edited the tag’s name. Having this information available makes investigating changes easier. Last used by shows you the user who last made changes to the tag The tags manager provides the possibility to identify whether the tags are up to date and still in use, so one of the main focuses of the tags manager is to enable tags to be deleted in bulk. Additionally, the possibility to rename tags makes working with them easier and less error-prone, allowing you to quickly fix typos or enforce naming conventions. Stay tuned: more to come! The tags manager is now live in your ChartMogul account, but we’re not done yet. The next thing we want to add is the ability to assign tags to customers in bulk, making it easier to create and work with customer segments. Learn more about using tags and check out the tags manager today. Let us know what you think — you can always get in touch with our team by writing to [email protected].

<sys> [INST] The New Tags Manager Lets You Quickly Edit and Delete Your Tags [/INST] We just introduced a new addition to the Data platform section of our application: Tags manager. Over the years tags have been heavily used for filtering and customer segmentation. The thing that was missing was the tags manager. Our customers weren’t able to see all the tags that exist in their accounts in one place. In addition, even though it was possible to remove one tag from a customer at a time, it was not possible to delete or rename tags. With the addition of this new functionality, we are now giving you the power to do all these things. What you can do with the tags manager In order to take advantage of the new tags manager, you need to be an admin of your ChartMogul account. Head over to the Data platform section, and select Tags in the Metadata section. The tags manager can be found under Data platform > Metadata in your ChartMogul account With the tags manager you can see and manipulate all the tags added to your customers. A simple interface, but many new things you can do with your tags. Edit a Tag’s name In order to edit the name of a tag, you need to locate the tag in the table, click on the ✏️ icon and type the new name. Save your changes and the tag’s name is going to be updated in all relevant customer records. Changing the name of a tag takes no more than a few seconds Delete a Tag When a tag is applied to only one customer and that customer is either deleted or the tag is removed from that customer, the tag will be deleted automatically. If you wish to delete a tag that is applied to multiple customers you can do it using the tags manager. Locate the tag that you want to delete, click on the 🗑️ icon. Confirm the deletion in the alert box, and the tag will be removed from all customers that had it applied. You can now quickly delete a tag and remove it from all customer records with a click. Get a list of all customers that have a specific tag applied The second column in the table shows how many customers have a specific tag applied. Clicking on this number generates a list of those customers. Click on the number of customers to see a list of their records. Identify the last customer to have a tag applied or removed The column Last added to customer contains a link to the last customer to have that tag added or removed. In case you are not sure where the tag was used last, you are able to get this information by clicking on the link in the column. Clicking on the link in the Last added to customer field will take you to the relevant customer record. Inspect who last performed an action on a specific tag Column Last used by contains information about the user that either last applied the tag, removed the tag, or edited the tag’s name. Having this information available makes investigating changes easier. Last used by shows you the user who last made changes to the tag The tags manager provides the possibility to identify whether the tags are up to date and still in use, so one of the main focuses of the tags manager is to enable tags to be deleted in bulk. Additionally, the possibility to rename tags makes working with them easier and less error-prone, allowing you to quickly fix typos or enforce naming conventions. Stay tuned: more to come! The tags manager is now live in your ChartMogul account, but we’re not done yet. The next thing we want to add is the ability to assign tags to customers in bulk, making it easier to create and work with customer segments. Learn more about using tags and check out the tags manager today. Let us know what you think — you can always get in touch with our team by writing to [email protected]. </sys

Good Design is the Secret to a Successful SaaS Conference Presence in 2019. Conferences are becoming an increasingly important part of running a SaaS business. They are a chance to meet existing and prospective customers, learn about new trends and topics in the industry, and — above all — get inspired. When it comes to events, SaaStock Dublin is the highlight of the year for our team. The 3 days of the conference are jam-packed with great people to meet, interesting talks, and many opportunities to get to know the people behind the companies you work with. For us at ChartMogul, SaaStock is also the best chance to get our product in front of new customers and to improve the knowledge of our existing audience. So, the conference experience we create is the cornerstone when it comes to the success of our efforts. We want to be memorable and compelling, so that we maximize our time (and spend!) onsite and to help with follow up. You know that slew of emails and calls you get from salespeople after a show? How can you remember that conversation or product? In our case, creative helps. A lot. In addition, the design team at ChartMogul plays a central role when it comes to the marketing collateral our team hands out and the email campaigns we send out after the event. Tradeshow season is nearly here. Recognizing that not every startup or SaaS business has a track record with events, we thought it would be helpful to share our insight about how our design team participates in making conference attendance a success. Things to consider when designing the booth Having a successful experience at a conference starts long before you and your team get on the plane to the conference location. Usually, we start our conference prep at least 3 months in advance by thinking about the following aspects. Floor plan Once we register for a conference, we choose a location. Naturally, we always prefer that we’re in a high traffic area near the entrance or close to areas reserved for coffee and networking. You’ll want to ask yourself questions like: What do your buyers care about? What areas of the conference will they want to explore? Answering those questions help us come up with an overall concept for our conference experience — we know how to design a booth that will attract conference attendees and what messages to promote through our booth and our collateral. Conferences often organize the floor plan by industry or category. It is always important to be in an area where you’re most likely to meet your ideal customer. For example, let’s say you’re selling learning management software, but you know your customers are struggling with analytics. In this case, it would probably be better to get situated in an area with all the other analytics products, rather than set up your booth next to all the e-learning platforms. Booth layout For conferences like SaaStock, we usually opt for a big booth with two walls, two stools, a counter, and a TV. We choose this type of booth because it allows us to build a focussed space which presents our brand in the best possible way. Having two walls also makes our presence more remarkable and gives us the chance to display more information. When conference attendees approach us, there’s little to distract them, so they get to connect and understand what we stand for. We believe this is the best way for us to leave a lasting impression with them. Messaging and booth experience Designing the booth experience starts with a joint discussion with the marketing team. The goal of this step of the process is to come up with an overall vision/message for each specific tradeshow. Once we have agreed on the overall vision, the design team starts work on the overall booth experience. Our goal with this is to create an experience that is: Memorable: When your sales team follows up with prospects, do they remember what happened at your booth? Crisp: Is the design simple, and straight-forward with a short and clear message? Productive: Do conference attendees leave your booth having learned or benefited from the conversation? Cohesive and on brand: Can you be easily identified and found? Overall design concept The mission of the design is to catch people’s attention and make them want to come in. To do that, the booth must look bright, open, clean and inviting — i.e. it must create a friendly atmosphere. The tradeshow floor will be filled with competitors, giveaways, and almost certainly, lots of noise. Therefore, the role of the design we use is to stand out and create a remarkable experience that can capture attention in a second or two when attendees walk by. Furthermore, in the huge venue, the distance from attendees is another important thing to consider. Simple, bold, and clear graphics with effective short messages are enough. Never overdesign or fill in every empty space. It is important to consider the scale of the hall where you will have your booth There’s no point in trying to “sell” the product with overcomplicated design and/or lots of messaging — too much text with lots of graphics and too many different colors are more likely to confuse visitors than earn you attention. Once people approach you at the booth, you will have time to talk about your product in detail. Good simple design creates that initial attraction. LED lights worked really well with out choice of color Here are some things we’ve found to work really well when we’ve worked on our booths in the past: Color: To make the message standout better, we are selective with color. Using too many colors can make the whole booth look messy and can confuse the main message. Light: We’ve found that the use of LED lights works well with a white background. Screen: We install a television screen — typically near one side or another — to showcase our product. This way, attendees can see ChartMogul in action on site. Booth design at SaaStock 2018 Here’s an example of one of our recent booth designs. This was shortly after we launched a new brand, so the concept of booth design was focused on promoting our new look. As I mentioned above, the LED lighting worked really well with the design concept. On the other hand, one of the things we could have done better was to use bigger font in order to make our messaging more noticeable. Marketing Collateral Swag. Freebies are probably the most fun part of every tradeshow and booth experience. Our brand is clean, modern, and serious and our collateral has to reflect that. We always want our trade show materials to be memorable and give a good impression to attendees. To get attention, we prepare giveaways that won’t take up a lot of room and will stick around after the show for weeks to come. This year we are planning to prepare: 3-4 different cheat sheets on A5 handy size Business cards Logo stickers T-shirts for employees and attendees Logo printed laptop camera cover Some of these seem to be pretty standard and repeatable (business cards for example), but for some of the other material we produce (brochures), we may try to come up with a design which is tied around the specific campaign we’re using for the conference. After the Event The event might be done, but that doesn’t mean our event work is done. If the event’s gone well, that means our team has a bunch of warm leads to work with. After the event, we always make sure to send out follow-up emails to the people we connected with during the conference. The design and sales teams work on this together — we create an email template that’s tied to the visual concept we used for the conference. The sales team provides the details, which allow us to send out a personalized email to each customer that we spoke with. Good design is key for SaaS conference success We believe in good design and try to make it an integral part of every aspect of our business — from the product to our conference participation, our creative team is always heavily involved in our preparations. For us, the creative process is not just an opportunity to put up an impressive booth and wow conference attendees, but also a chance to project what we believe in as a team. We find that this allows us to start and nurture many relationships which turn into meaningful long-term partnerships.

[INST] Good Design is the Secret to a Successful SaaS Conference Presence in 2019 [/INST]

Conferences are becoming an increasingly important part of running a SaaS business. They are a chance to meet existing and prospective customers, learn about new trends and topics in the industry, and — above all — get inspired. When it comes to events, SaaStock Dublin is the highlight of the year for our team. The 3 days of the conference are jam-packed with great people to meet, interesting talks, and many opportunities to get to know the people behind the companies you work with. For us at ChartMogul, SaaStock is also the best chance to get our product in front of new customers and to improve the knowledge of our existing audience. So, the conference experience we create is the cornerstone when it comes to the success of our efforts. We want to be memorable and compelling, so that we maximize our time (and spend!) onsite and to help with follow up. You know that slew of emails and calls you get from salespeople after a show? How can you remember that conversation or product? In our case, creative helps. A lot. In addition, the design team at ChartMogul plays a central role when it comes to the marketing collateral our team hands out and the email campaigns we send out after the event. Tradeshow season is nearly here. Recognizing that not every startup or SaaS business has a track record with events, we thought it would be helpful to share our insight about how our design team participates in making conference attendance a success. Things to consider when designing the booth Having a successful experience at a conference starts long before you and your team get on the plane to the conference location. Usually, we start our conference prep at least 3 months in advance by thinking about the following aspects. Floor plan Once we register for a conference, we choose a location. Naturally, we always prefer that we’re in a high traffic area near the entrance or close to areas reserved for coffee and networking. You’ll want to ask yourself questions like: What do your buyers care about? What areas of the conference will they want to explore? Answering those questions help us come up with an overall concept for our conference experience — we know how to design a booth that will attract conference attendees and what messages to promote through our booth and our collateral. Conferences often organize the floor plan by industry or category. It is always important to be in an area where you’re most likely to meet your ideal customer. For example, let’s say you’re selling learning management software, but you know your customers are struggling with analytics. In this case, it would probably be better to get situated in an area with all the other analytics products, rather than set up your booth next to all the e-learning platforms. Booth layout For conferences like SaaStock, we usually opt for a big booth with two walls, two stools, a counter, and a TV. We choose this type of booth because it allows us to build a focussed space which presents our brand in the best possible way. Having two walls also makes our presence more remarkable and gives us the chance to display more information. When conference attendees approach us, there’s little to distract them, so they get to connect and understand what we stand for. We believe this is the best way for us to leave a lasting impression with them. Messaging and booth experience Designing the booth experience starts with a joint discussion with the marketing team. The goal of this step of the process is to come up with an overall vision/message for each specific tradeshow. Once we have agreed on the overall vision, the design team starts work on the overall booth experience. Our goal with this is to create an experience that is: Memorable: When your sales team follows up with prospects, do they remember what happened at your booth? Crisp: Is the design simple, and straight-forward with a short and clear message? Productive: Do conference attendees leave your booth having learned or benefited from the conversation? Cohesive and on brand: Can you be easily identified and found? Overall design concept The mission of the design is to catch people’s attention and make them want to come in. To do that, the booth must look bright, open, clean and inviting — i.e. it must create a friendly atmosphere. The tradeshow floor will be filled with competitors, giveaways, and almost certainly, lots of noise. Therefore, the role of the design we use is to stand out and create a remarkable experience that can capture attention in a second or two when attendees walk by. Furthermore, in the huge venue, the distance from attendees is another important thing to consider. Simple, bold, and clear graphics with effective short messages are enough. Never overdesign or fill in every empty space. It is important to consider the scale of the hall where you will have your booth There’s no point in trying to “sell” the product with overcomplicated design and/or lots of messaging — too much text with lots of graphics and too many different colors are more likely to confuse visitors than earn you attention. Once people approach you at the booth, you will have time to talk about your product in detail. Good simple design creates that initial attraction. LED lights worked really well with out choice of color Here are some things we’ve found to work really well when we’ve worked on our booths in the past: Color: To make the message standout better, we are selective with color. Using too many colors can make the whole booth look messy and can confuse the main message. Light: We’ve found that the use of LED lights works well with a white background. Screen: We install a television screen — typically near one side or another — to showcase our product. This way, attendees can see ChartMogul in action on site. Booth design at SaaStock 2018 Here’s an example of one of our recent booth designs. This was shortly after we launched a new brand, so the concept of booth design was focused on promoting our new look. As I mentioned above, the LED lighting worked really well with the design concept. On the other hand, one of the things we could have done better was to use bigger font in order to make our messaging more noticeable. Marketing Collateral Swag. Freebies are probably the most fun part of every tradeshow and booth experience. Our brand is clean, modern, and serious and our collateral has to reflect that. We always want our trade show materials to be memorable and give a good impression to attendees. To get attention, we prepare giveaways that won’t take up a lot of room and will stick around after the show for weeks to come. This year we are planning to prepare: 3-4 different cheat sheets on A5 handy size Business cards Logo stickers T-shirts for employees and attendees Logo printed laptop camera cover Some of these seem to be pretty standard and repeatable (business cards for example), but for some of the other material we produce (brochures), we may try to come up with a design which is tied around the specific campaign we’re using for the conference. After the Event The event might be done, but that doesn’t mean our event work is done. If the event’s gone well, that means our team has a bunch of warm leads to work with. After the event, we always make sure to send out follow-up emails to the people we connected with during the conference. The design and sales teams work on this together — we create an email template that’s tied to the visual concept we used for the conference. The sales team provides the details, which allow us to send out a personalized email to each customer that we spoke with. Good design is key for SaaS conference success We believe in good design and try to make it an integral part of every aspect of our business — from the product to our conference participation, our creative team is always heavily involved in our preparations. For us, the creative process is not just an opportunity to put up an impressive booth and wow conference attendees, but also a chance to project what we believe in as a team. We find that this allows us to start and nurture many relationships which turn into meaningful long-term partnerships.

<sys> [INST] Good Design is the Secret to a Successful SaaS Conference Presence in 2019 [/INST] Conferences are becoming an increasingly important part of running a SaaS business. They are a chance to meet existing and prospective customers, learn about new trends and topics in the industry, and — above all — get inspired. When it comes to events, SaaStock Dublin is the highlight of the year for our team. The 3 days of the conference are jam-packed with great people to meet, interesting talks, and many opportunities to get to know the people behind the companies you work with. For us at ChartMogul, SaaStock is also the best chance to get our product in front of new customers and to improve the knowledge of our existing audience. So, the conference experience we create is the cornerstone when it comes to the success of our efforts. We want to be memorable and compelling, so that we maximize our time (and spend!) onsite and to help with follow up. You know that slew of emails and calls you get from salespeople after a show? How can you remember that conversation or product? In our case, creative helps. A lot. In addition, the design team at ChartMogul plays a central role when it comes to the marketing collateral our team hands out and the email campaigns we send out after the event. Tradeshow season is nearly here. Recognizing that not every startup or SaaS business has a track record with events, we thought it would be helpful to share our insight about how our design team participates in making conference attendance a success. Things to consider when designing the booth Having a successful experience at a conference starts long before you and your team get on the plane to the conference location. Usually, we start our conference prep at least 3 months in advance by thinking about the following aspects. Floor plan Once we register for a conference, we choose a location. Naturally, we always prefer that we’re in a high traffic area near the entrance or close to areas reserved for coffee and networking. You’ll want to ask yourself questions like: What do your buyers care about? What areas of the conference will they want to explore? Answering those questions help us come up with an overall concept for our conference experience — we know how to design a booth that will attract conference attendees and what messages to promote through our booth and our collateral. Conferences often organize the floor plan by industry or category. It is always important to be in an area where you’re most likely to meet your ideal customer. For example, let’s say you’re selling learning management software, but you know your customers are struggling with analytics. In this case, it would probably be better to get situated in an area with all the other analytics products, rather than set up your booth next to all the e-learning platforms. Booth layout For conferences like SaaStock, we usually opt for a big booth with two walls, two stools, a counter, and a TV. We choose this type of booth because it allows us to build a focussed space which presents our brand in the best possible way. Having two walls also makes our presence more remarkable and gives us the chance to display more information. When conference attendees approach us, there’s little to distract them, so they get to connect and understand what we stand for. We believe this is the best way for us to leave a lasting impression with them. Messaging and booth experience Designing the booth experience starts with a joint discussion with the marketing team. The goal of this step of the process is to come up with an overall vision/message for each specific tradeshow. Once we have agreed on the overall vision, the design team starts work on the overall booth experience. Our goal with this is to create an experience that is: Memorable: When your sales team follows up with prospects, do they remember what happened at your booth? Crisp: Is the design simple, and straight-forward with a short and clear message? Productive: Do conference attendees leave your booth having learned or benefited from the conversation? Cohesive and on brand: Can you be easily identified and found? Overall design concept The mission of the design is to catch people’s attention and make them want to come in. To do that, the booth must look bright, open, clean and inviting — i.e. it must create a friendly atmosphere. The tradeshow floor will be filled with competitors, giveaways, and almost certainly, lots of noise. Therefore, the role of the design we use is to stand out and create a remarkable experience that can capture attention in a second or two when attendees walk by. Furthermore, in the huge venue, the distance from attendees is another important thing to consider. Simple, bold, and clear graphics with effective short messages are enough. Never overdesign or fill in every empty space. It is important to consider the scale of the hall where you will have your booth There’s no point in trying to “sell” the product with overcomplicated design and/or lots of messaging — too much text with lots of graphics and too many different colors are more likely to confuse visitors than earn you attention. Once people approach you at the booth, you will have time to talk about your product in detail. Good simple design creates that initial attraction. LED lights worked really well with out choice of color Here are some things we’ve found to work really well when we’ve worked on our booths in the past: Color: To make the message standout better, we are selective with color. Using too many colors can make the whole booth look messy and can confuse the main message. Light: We’ve found that the use of LED lights works well with a white background. Screen: We install a television screen — typically near one side or another — to showcase our product. This way, attendees can see ChartMogul in action on site. Booth design at SaaStock 2018 Here’s an example of one of our recent booth designs. This was shortly after we launched a new brand, so the concept of booth design was focused on promoting our new look. As I mentioned above, the LED lighting worked really well with the design concept. On the other hand, one of the things we could have done better was to use bigger font in order to make our messaging more noticeable. Marketing Collateral Swag. Freebies are probably the most fun part of every tradeshow and booth experience. Our brand is clean, modern, and serious and our collateral has to reflect that. We always want our trade show materials to be memorable and give a good impression to attendees. To get attention, we prepare giveaways that won’t take up a lot of room and will stick around after the show for weeks to come. This year we are planning to prepare: 3-4 different cheat sheets on A5 handy size Business cards Logo stickers T-shirts for employees and attendees Logo printed laptop camera cover Some of these seem to be pretty standard and repeatable (business cards for example), but for some of the other material we produce (brochures), we may try to come up with a design which is tied around the specific campaign we’re using for the conference. After the Event The event might be done, but that doesn’t mean our event work is done. If the event’s gone well, that means our team has a bunch of warm leads to work with. After the event, we always make sure to send out follow-up emails to the people we connected with during the conference. The design and sales teams work on this together — we create an email template that’s tied to the visual concept we used for the conference. The sales team provides the details, which allow us to send out a personalized email to each customer that we spoke with. Good design is key for SaaS conference success We believe in good design and try to make it an integral part of every aspect of our business — from the product to our conference participation, our creative team is always heavily involved in our preparations. For us, the creative process is not just an opportunity to put up an impressive booth and wow conference attendees, but also a chance to project what we believe in as a team. We find that this allows us to start and nurture many relationships which turn into meaningful long-term partnerships. </sys

Documentation: The under-appreciated hero of SaaS. Sweating the details on your product’s visual design. Tackling complex technical challenges at scale. Building a world-class sales team. Putting together a comprehensive library of documentation. One of these things is seen as considerably less “sexy” than the others. I don’t need to tell you which. Documentation is more often than not an afterthought for many businesses; a checkbox to be ticked once the core business functions are up and running smoothly. In some ways, it’s understandable — there are often far more compelling priorities with immediate, quantitative benefits. But I’m here to convince you that documentation can actually be a make-or-break competency within your business that can make the difference between scaling success and crippling churn. So let’s get started. Why is good documentation so critical? Ever heard this statement before? “A well-designed product shouldn’t need documentation. It should just be obvious.” That assertion may well be true in the consumer space. Nobody expects to read the manual for Spotify (although my recent attempts to use Snapchat leave me wishing for a quickstart guide). But B2B software is big, and can cover a variety of use-cases. Some advanced functionality will just never be completely intuitive — and that’s fine. For a B2B SaaS business, the documentation is the additional line of support that scales infinitely. One how-to guide can be served to millions of customers at almost no incremental cost. The more of your product’s functionality that can be covered by good documentation, the more scalable your business. For developer-focused products (i.e. API-based SaaS), documentation is not an option. API documentation is basically a part of the API itself. One without the other is essentially useless. In fact, for such products, developers will often judge the product by your API documentation. It’s the first port of call after the landing page — we’ve seen evidence of this on the ChartMogul site. Look at the first item in Twilio’s navigation menu: Twilio knows the importance of documentation for its developer-focused products. What great documentation looks like Write The Docs is a global community focused around technical writing. They outline an excellent set of principles for documentation that address every aspect: “In general, documentation should be…” Precursory: Begin documenting before you begin developing. Participatory: In the documentation process, include everyone from developers to end users. “Content should be…” ARID: Accept (some) Repetition In Documentation. Skimmable: Structure content to help readers identify and skip over concepts which they already understand or see are not relevant to their immediate questions. Exemplary: Include (some) examples and tutorials in content. Consistent: Use consistent language and formatting in content. Current: Consider incorrect documentation to be worse than missing documentation. (The site goes on to outline more principles, read the full guide.) Fortunately for us, there are a number of SaaS businesses doing an amazing job at documentation in 2017: Stripe’s documentation contains interactive, sandboxed elements for you to test functionality: Some API documentation (like ChartMogul’s) offers code samples in the language of your choice: Web design and development platform Webflow created Webflow University, with a series of courses featuring video lessons: How we’ve improved documentation at ChartMogul Identifying and filling gaps One of our first steps was to look at the top search phrases in our Help Center, and identified trends in what people were looking for. This immediately gave us some “low hanging fruit” in the form of common searches related to easy-to-solve problems in the product that we didn’t have docs for. These common searches represent gaps in knowledge which are sometimes amplified by a poor or confusing experience in the product. Plugging gaps with targeted, easily-discoverable documentation gives a vastly-improved experience for users. You’ll see a measurable impact on support tickets in filling these gaps. Focusing on proactive vs. reactive documentation It can be useful to think about two different categories of documentation: Reactive documentation: Where the user has a problem or question and seeks help themselves. This usually results in a search in the Help Center. If this process fails, it may result in a query to our Support team and the creation of a ticket. Proactive documentation: Where the user consumes educational content as they are onboarded into the product, and throughout their journey as a user. This kind of documentation doesn’t rely on the user actively seeking it out. Clearly, in an ideal world, the vast majority of our documentation would be proactive. This way we don’t have to wait until the user has a problem, and we have much more control over the educational journey with our product — resulting in an altogether better experience. Unfortunately this ideal world doesn’t exist, and the user will never have all the knowledge they need to solve every problem in our product. But using certain tactics it’s possible to shift a massively-reactive documentation library to a much more proactive one. Here’s how we did that: Bringing documentation closer to the product Eliminating friction with documentation is critical to its success. Finding documentation can already be an arduous task for users, so the slightest bump or point of friction can cause them to give up. In a scenario where they’re already likely to be confused, or even angry — well, you can imagine the outcome. Proactive content (mentioned above) works best when it’s as close to the use case product it’s addressing as possible. For us, making small snippets of documentation easily accessible within the relevant part of the product has really helped smooth out the education process. The ChartMogul product contains tooltips with useful content and links to relevant resources. The result: Reversing the growth of “tickets per customer” The structure and discoverability in the early days of ChartMogul was bad. We knew this for some time before putting serious effort into re-launching our Help Center. We rolled out a comprehensive redesign of the Help Center, featuring: Drastically-improved search (we used Algolia for this). We also put a greater emphasis on search – it’s now front and center in the design. Complete re-categorization of the content, based on what we’d learned about the previous structure A visual redesign, for better alignment with our brand and an overall more pleasant experience The improved search experience in the ChartMogul Help Center, enabled by Algolia. Try it out for yourself! The results were surprising. We expected some effect on our support process, but what we saw was an immediate and significant change in the growth rate of our “tickets per customer” metric. As our customer numbers grow at ChartMogul, keeping “tickets per customer” under control is more and more critical for scaling our support team. Clearly better documentation looked to be a prime candidate for positively affecting this, and we weren’t wrong: As the chart clearly shows, our ticket volume (which was slowly growing) saw a sharp decline after we launched the new Help Center in June. While our total change in customers was around +20% from March to July, the total change in ticket volume was -10.5%! This cemented our belief that investing in improving documentation was going to be a key part of our ongoing customer success strategy at ChartMogul. We’ve since implemented many more improvements and created initiatives to take this further. Steps you can take to invest in documentation There are many small steps you can take in your business right now, to get on the right track towards giving documentation the attention it deserves. Short term: If you have the data, take a look at the common search terms for your help center, as mentioned above. These should show you the biggest pain points for users. Un-publish any documentation that’s inaccurate or out of date! This is arguably worse than having no documentation. Get an independent review of your docs. This could be someone in your business who’s not as close to the product as your technical and product teams, or someone outside of the business. This will highlight the obvious areas where you’re causing friction for users, and should lead to some simple fixes. Go and become acquainted with Write The Docs. Really, it’s an excellent resource and community. Longer term: Bring your documentation into your product, for a smoother educational experience. Design an educational curriculum to accompany your product onboarding. Think about the logical steps and order in which users should learn the different parts of your product. Hire a technical writer to put documentation front and center. Or at least having a person within your company for whom documentation is the primary responsibility. What have you learned about documentation in your company? Is there something smart you’re doing to educate your customers? We’d love to hear about it — drop a note in the comments below!

[INST] Documentation: The under-appreciated hero of SaaS [/INST]

Sweating the details on your product’s visual design. Tackling complex technical challenges at scale. Building a world-class sales team. Putting together a comprehensive library of documentation. One of these things is seen as considerably less “sexy” than the others. I don’t need to tell you which. Documentation is more often than not an afterthought for many businesses; a checkbox to be ticked once the core business functions are up and running smoothly. In some ways, it’s understandable — there are often far more compelling priorities with immediate, quantitative benefits. But I’m here to convince you that documentation can actually be a make-or-break competency within your business that can make the difference between scaling success and crippling churn. So let’s get started. Why is good documentation so critical? Ever heard this statement before? “A well-designed product shouldn’t need documentation. It should just be obvious.” That assertion may well be true in the consumer space. Nobody expects to read the manual for Spotify (although my recent attempts to use Snapchat leave me wishing for a quickstart guide). But B2B software is big, and can cover a variety of use-cases. Some advanced functionality will just never be completely intuitive — and that’s fine. For a B2B SaaS business, the documentation is the additional line of support that scales infinitely. One how-to guide can be served to millions of customers at almost no incremental cost. The more of your product’s functionality that can be covered by good documentation, the more scalable your business. For developer-focused products (i.e. API-based SaaS), documentation is not an option. API documentation is basically a part of the API itself. One without the other is essentially useless. In fact, for such products, developers will often judge the product by your API documentation. It’s the first port of call after the landing page — we’ve seen evidence of this on the ChartMogul site. Look at the first item in Twilio’s navigation menu: Twilio knows the importance of documentation for its developer-focused products. What great documentation looks like Write The Docs is a global community focused around technical writing. They outline an excellent set of principles for documentation that address every aspect: “In general, documentation should be…” Precursory: Begin documenting before you begin developing. Participatory: In the documentation process, include everyone from developers to end users. “Content should be…” ARID: Accept (some) Repetition In Documentation. Skimmable: Structure content to help readers identify and skip over concepts which they already understand or see are not relevant to their immediate questions. Exemplary: Include (some) examples and tutorials in content. Consistent: Use consistent language and formatting in content. Current: Consider incorrect documentation to be worse than missing documentation. (The site goes on to outline more principles, read the full guide.) Fortunately for us, there are a number of SaaS businesses doing an amazing job at documentation in 2017: Stripe’s documentation contains interactive, sandboxed elements for you to test functionality: Some API documentation (like ChartMogul’s) offers code samples in the language of your choice: Web design and development platform Webflow created Webflow University, with a series of courses featuring video lessons: How we’ve improved documentation at ChartMogul Identifying and filling gaps One of our first steps was to look at the top search phrases in our Help Center, and identified trends in what people were looking for. This immediately gave us some “low hanging fruit” in the form of common searches related to easy-to-solve problems in the product that we didn’t have docs for. These common searches represent gaps in knowledge which are sometimes amplified by a poor or confusing experience in the product. Plugging gaps with targeted, easily-discoverable documentation gives a vastly-improved experience for users. You’ll see a measurable impact on support tickets in filling these gaps. Focusing on proactive vs. reactive documentation It can be useful to think about two different categories of documentation: Reactive documentation: Where the user has a problem or question and seeks help themselves. This usually results in a search in the Help Center. If this process fails, it may result in a query to our Support team and the creation of a ticket. Proactive documentation: Where the user consumes educational content as they are onboarded into the product, and throughout their journey as a user. This kind of documentation doesn’t rely on the user actively seeking it out. Clearly, in an ideal world, the vast majority of our documentation would be proactive. This way we don’t have to wait until the user has a problem, and we have much more control over the educational journey with our product — resulting in an altogether better experience. Unfortunately this ideal world doesn’t exist, and the user will never have all the knowledge they need to solve every problem in our product. But using certain tactics it’s possible to shift a massively-reactive documentation library to a much more proactive one. Here’s how we did that: Bringing documentation closer to the product Eliminating friction with documentation is critical to its success. Finding documentation can already be an arduous task for users, so the slightest bump or point of friction can cause them to give up. In a scenario where they’re already likely to be confused, or even angry — well, you can imagine the outcome. Proactive content (mentioned above) works best when it’s as close to the use case product it’s addressing as possible. For us, making small snippets of documentation easily accessible within the relevant part of the product has really helped smooth out the education process. The ChartMogul product contains tooltips with useful content and links to relevant resources. The result: Reversing the growth of “tickets per customer” The structure and discoverability in the early days of ChartMogul was bad. We knew this for some time before putting serious effort into re-launching our Help Center. We rolled out a comprehensive redesign of the Help Center, featuring: Drastically-improved search (we used Algolia for this). We also put a greater emphasis on search – it’s now front and center in the design. Complete re-categorization of the content, based on what we’d learned about the previous structure A visual redesign, for better alignment with our brand and an overall more pleasant experience The improved search experience in the ChartMogul Help Center, enabled by Algolia. Try it out for yourself! The results were surprising. We expected some effect on our support process, but what we saw was an immediate and significant change in the growth rate of our “tickets per customer” metric. As our customer numbers grow at ChartMogul, keeping “tickets per customer” under control is more and more critical for scaling our support team. Clearly better documentation looked to be a prime candidate for positively affecting this, and we weren’t wrong: As the chart clearly shows, our ticket volume (which was slowly growing) saw a sharp decline after we launched the new Help Center in June. While our total change in customers was around +20% from March to July, the total change in ticket volume was -10.5%! This cemented our belief that investing in improving documentation was going to be a key part of our ongoing customer success strategy at ChartMogul. We’ve since implemented many more improvements and created initiatives to take this further. Steps you can take to invest in documentation There are many small steps you can take in your business right now, to get on the right track towards giving documentation the attention it deserves. Short term: If you have the data, take a look at the common search terms for your help center, as mentioned above. These should show you the biggest pain points for users. Un-publish any documentation that’s inaccurate or out of date! This is arguably worse than having no documentation. Get an independent review of your docs. This could be someone in your business who’s not as close to the product as your technical and product teams, or someone outside of the business. This will highlight the obvious areas where you’re causing friction for users, and should lead to some simple fixes. Go and become acquainted with Write The Docs. Really, it’s an excellent resource and community. Longer term: Bring your documentation into your product, for a smoother educational experience. Design an educational curriculum to accompany your product onboarding. Think about the logical steps and order in which users should learn the different parts of your product. Hire a technical writer to put documentation front and center. Or at least having a person within your company for whom documentation is the primary responsibility. What have you learned about documentation in your company? Is there something smart you’re doing to educate your customers? We’d love to hear about it — drop a note in the comments below!

<sys> [INST] Documentation: The under-appreciated hero of SaaS [/INST] Sweating the details on your product’s visual design. Tackling complex technical challenges at scale. Building a world-class sales team. Putting together a comprehensive library of documentation. One of these things is seen as considerably less “sexy” than the others. I don’t need to tell you which. Documentation is more often than not an afterthought for many businesses; a checkbox to be ticked once the core business functions are up and running smoothly. In some ways, it’s understandable — there are often far more compelling priorities with immediate, quantitative benefits. But I’m here to convince you that documentation can actually be a make-or-break competency within your business that can make the difference between scaling success and crippling churn. So let’s get started. Why is good documentation so critical? Ever heard this statement before? “A well-designed product shouldn’t need documentation. It should just be obvious.” That assertion may well be true in the consumer space. Nobody expects to read the manual for Spotify (although my recent attempts to use Snapchat leave me wishing for a quickstart guide). But B2B software is big, and can cover a variety of use-cases. Some advanced functionality will just never be completely intuitive — and that’s fine. For a B2B SaaS business, the documentation is the additional line of support that scales infinitely. One how-to guide can be served to millions of customers at almost no incremental cost. The more of your product’s functionality that can be covered by good documentation, the more scalable your business. For developer-focused products (i.e. API-based SaaS), documentation is not an option. API documentation is basically a part of the API itself. One without the other is essentially useless. In fact, for such products, developers will often judge the product by your API documentation. It’s the first port of call after the landing page — we’ve seen evidence of this on the ChartMogul site. Look at the first item in Twilio’s navigation menu: Twilio knows the importance of documentation for its developer-focused products. What great documentation looks like Write The Docs is a global community focused around technical writing. They outline an excellent set of principles for documentation that address every aspect: “In general, documentation should be…” Precursory: Begin documenting before you begin developing. Participatory: In the documentation process, include everyone from developers to end users. “Content should be…” ARID: Accept (some) Repetition In Documentation. Skimmable: Structure content to help readers identify and skip over concepts which they already understand or see are not relevant to their immediate questions. Exemplary: Include (some) examples and tutorials in content. Consistent: Use consistent language and formatting in content. Current: Consider incorrect documentation to be worse than missing documentation. (The site goes on to outline more principles, read the full guide.) Fortunately for us, there are a number of SaaS businesses doing an amazing job at documentation in 2017: Stripe’s documentation contains interactive, sandboxed elements for you to test functionality: Some API documentation (like ChartMogul’s) offers code samples in the language of your choice: Web design and development platform Webflow created Webflow University, with a series of courses featuring video lessons: How we’ve improved documentation at ChartMogul Identifying and filling gaps One of our first steps was to look at the top search phrases in our Help Center, and identified trends in what people were looking for. This immediately gave us some “low hanging fruit” in the form of common searches related to easy-to-solve problems in the product that we didn’t have docs for. These common searches represent gaps in knowledge which are sometimes amplified by a poor or confusing experience in the product. Plugging gaps with targeted, easily-discoverable documentation gives a vastly-improved experience for users. You’ll see a measurable impact on support tickets in filling these gaps. Focusing on proactive vs. reactive documentation It can be useful to think about two different categories of documentation: Reactive documentation: Where the user has a problem or question and seeks help themselves. This usually results in a search in the Help Center. If this process fails, it may result in a query to our Support team and the creation of a ticket. Proactive documentation: Where the user consumes educational content as they are onboarded into the product, and throughout their journey as a user. This kind of documentation doesn’t rely on the user actively seeking it out. Clearly, in an ideal world, the vast majority of our documentation would be proactive. This way we don’t have to wait until the user has a problem, and we have much more control over the educational journey with our product — resulting in an altogether better experience. Unfortunately this ideal world doesn’t exist, and the user will never have all the knowledge they need to solve every problem in our product. But using certain tactics it’s possible to shift a massively-reactive documentation library to a much more proactive one. Here’s how we did that: Bringing documentation closer to the product Eliminating friction with documentation is critical to its success. Finding documentation can already be an arduous task for users, so the slightest bump or point of friction can cause them to give up. In a scenario where they’re already likely to be confused, or even angry — well, you can imagine the outcome. Proactive content (mentioned above) works best when it’s as close to the use case product it’s addressing as possible. For us, making small snippets of documentation easily accessible within the relevant part of the product has really helped smooth out the education process. The ChartMogul product contains tooltips with useful content and links to relevant resources. The result: Reversing the growth of “tickets per customer” The structure and discoverability in the early days of ChartMogul was bad. We knew this for some time before putting serious effort into re-launching our Help Center. We rolled out a comprehensive redesign of the Help Center, featuring: Drastically-improved search (we used Algolia for this). We also put a greater emphasis on search – it’s now front and center in the design. Complete re-categorization of the content, based on what we’d learned about the previous structure A visual redesign, for better alignment with our brand and an overall more pleasant experience The improved search experience in the ChartMogul Help Center, enabled by Algolia. Try it out for yourself! The results were surprising. We expected some effect on our support process, but what we saw was an immediate and significant change in the growth rate of our “tickets per customer” metric. As our customer numbers grow at ChartMogul, keeping “tickets per customer” under control is more and more critical for scaling our support team. Clearly better documentation looked to be a prime candidate for positively affecting this, and we weren’t wrong: As the chart clearly shows, our ticket volume (which was slowly growing) saw a sharp decline after we launched the new Help Center in June. While our total change in customers was around +20% from March to July, the total change in ticket volume was -10.5%! This cemented our belief that investing in improving documentation was going to be a key part of our ongoing customer success strategy at ChartMogul. We’ve since implemented many more improvements and created initiatives to take this further. Steps you can take to invest in documentation There are many small steps you can take in your business right now, to get on the right track towards giving documentation the attention it deserves. Short term: If you have the data, take a look at the common search terms for your help center, as mentioned above. These should show you the biggest pain points for users. Un-publish any documentation that’s inaccurate or out of date! This is arguably worse than having no documentation. Get an independent review of your docs. This could be someone in your business who’s not as close to the product as your technical and product teams, or someone outside of the business. This will highlight the obvious areas where you’re causing friction for users, and should lead to some simple fixes. Go and become acquainted with Write The Docs. Really, it’s an excellent resource and community. Longer term: Bring your documentation into your product, for a smoother educational experience. Design an educational curriculum to accompany your product onboarding. Think about the logical steps and order in which users should learn the different parts of your product. Hire a technical writer to put documentation front and center. Or at least having a person within your company for whom documentation is the primary responsibility. What have you learned about documentation in your company? Is there something smart you’re doing to educate your customers? We’d love to hear about it — drop a note in the comments below! </sys

New: Start analyzing your App Store Connect data in ChartMogul. Growing user expectations is one of the key factors behind the success of SaaS and subscription businesses. Businesses and consumers alike want outstanding services that are convenient and easy to use. This focus on user experience has led many companies to develop native apps — in addition to web-based apps — in an effort to best support customers on whichever device they prefer. Native app subscriptions are growing in popularity, with Apple and Google both throwing more support behind the payment model in the past two years. As adoption has increased, so has demand for a way to analyze this information and produce meaningful and actionable metrics. I’m thrilled to share that, as of today, all ChartMogul customers can now bring their subscription data from App Store Connect into ChartMogul. With this integration, businesses can now better understand metrics such as: Monthly recurring revenue and the movements that impact it Customer lifetime value based on plan type, device type, time of subscription and much more Finally — all your important revenue metrics in one place Companies who support both web-based and in-app payments have up until now had a hard time getting a complete view of their revenue and customers. They could go deep on their customers paying through Stripe, for instance, and optimize acquisition channels and pricing. However, they were limited to top-level and aggregated metrics on mobile. Things weren’t necessarily easier for mobile-first subscription businesses. While they could get big-picture numbers on customers and revenue, metrics like churn rate and customer lifetime value weren’t automatically calculated. So unless they had the bandwidth and the Excel skills, they couldn’t get those metrics with any level of frequency. Start segmenting and analyzing App Store Connect customers With ChartMogul’s Enrichment API, businesses can enrich and analyze their App Store Connect data in ways that once weren’t possible. In addition to our built-in filters like plan type, time of purchase and device type, ChartMogul users can create custom segments based on attributes like product usage and NPS score. Learn more about our segmentation features. Connect your App Store data to ChartMogul Getting started is simple. If you already have a ChartMogul account, you can head over to Admin—>Data Sources and add App Store Connect. (Don’t see this option? Then send this article to the Admin of your ChartMogul account.) If you’re new to ChartMogul, start your free trial. Then connect your data and start analyzing your subscription metrics straight away. I hope you enjoy our latest integration! If you need support or have any questions, please reach out to [email protected].

[INST] New: Start analyzing your App Store Connect data in ChartMogul [/INST]

Growing user expectations is one of the key factors behind the success of SaaS and subscription businesses. Businesses and consumers alike want outstanding services that are convenient and easy to use. This focus on user experience has led many companies to develop native apps — in addition to web-based apps — in an effort to best support customers on whichever device they prefer. Native app subscriptions are growing in popularity, with Apple and Google both throwing more support behind the payment model in the past two years. As adoption has increased, so has demand for a way to analyze this information and produce meaningful and actionable metrics. I’m thrilled to share that, as of today, all ChartMogul customers can now bring their subscription data from App Store Connect into ChartMogul. With this integration, businesses can now better understand metrics such as: Monthly recurring revenue and the movements that impact it Customer lifetime value based on plan type, device type, time of subscription and much more Finally — all your important revenue metrics in one place Companies who support both web-based and in-app payments have up until now had a hard time getting a complete view of their revenue and customers. They could go deep on their customers paying through Stripe, for instance, and optimize acquisition channels and pricing. However, they were limited to top-level and aggregated metrics on mobile. Things weren’t necessarily easier for mobile-first subscription businesses. While they could get big-picture numbers on customers and revenue, metrics like churn rate and customer lifetime value weren’t automatically calculated. So unless they had the bandwidth and the Excel skills, they couldn’t get those metrics with any level of frequency. Start segmenting and analyzing App Store Connect customers With ChartMogul’s Enrichment API, businesses can enrich and analyze their App Store Connect data in ways that once weren’t possible. In addition to our built-in filters like plan type, time of purchase and device type, ChartMogul users can create custom segments based on attributes like product usage and NPS score. Learn more about our segmentation features. Connect your App Store data to ChartMogul Getting started is simple. If you already have a ChartMogul account, you can head over to Admin—>Data Sources and add App Store Connect. (Don’t see this option? Then send this article to the Admin of your ChartMogul account.) If you’re new to ChartMogul, start your free trial. Then connect your data and start analyzing your subscription metrics straight away. I hope you enjoy our latest integration! If you need support or have any questions, please reach out to [email protected].

<sys> [INST] New: Start analyzing your App Store Connect data in ChartMogul [/INST] Growing user expectations is one of the key factors behind the success of SaaS and subscription businesses. Businesses and consumers alike want outstanding services that are convenient and easy to use. This focus on user experience has led many companies to develop native apps — in addition to web-based apps — in an effort to best support customers on whichever device they prefer. Native app subscriptions are growing in popularity, with Apple and Google both throwing more support behind the payment model in the past two years. As adoption has increased, so has demand for a way to analyze this information and produce meaningful and actionable metrics. I’m thrilled to share that, as of today, all ChartMogul customers can now bring their subscription data from App Store Connect into ChartMogul. With this integration, businesses can now better understand metrics such as: Monthly recurring revenue and the movements that impact it Customer lifetime value based on plan type, device type, time of subscription and much more Finally — all your important revenue metrics in one place Companies who support both web-based and in-app payments have up until now had a hard time getting a complete view of their revenue and customers. They could go deep on their customers paying through Stripe, for instance, and optimize acquisition channels and pricing. However, they were limited to top-level and aggregated metrics on mobile. Things weren’t necessarily easier for mobile-first subscription businesses. While they could get big-picture numbers on customers and revenue, metrics like churn rate and customer lifetime value weren’t automatically calculated. So unless they had the bandwidth and the Excel skills, they couldn’t get those metrics with any level of frequency. Start segmenting and analyzing App Store Connect customers With ChartMogul’s Enrichment API, businesses can enrich and analyze their App Store Connect data in ways that once weren’t possible. In addition to our built-in filters like plan type, time of purchase and device type, ChartMogul users can create custom segments based on attributes like product usage and NPS score. Learn more about our segmentation features. Connect your App Store data to ChartMogul Getting started is simple. If you already have a ChartMogul account, you can head over to Admin—>Data Sources and add App Store Connect. (Don’t see this option? Then send this article to the Admin of your ChartMogul account.) If you’re new to ChartMogul, start your free trial. Then connect your data and start analyzing your subscription metrics straight away. I hope you enjoy our latest integration! If you need support or have any questions, please reach out to [email protected]. </sys

Add Your MRR Movements to the Stripe Dashboard. Your key metrics are probably spread between many tools and dashboards. Integrate ChartMogul with Stripe to view your key metrics without switching between dashboards. Get the ChartMogul Stripe App to view your MRR, ARR, Subscribers, and MRR movements, on the Stripe homepage. On the customer page view MRR, ARR, Customer status, and MRR Movements of a particular customer. You can get the business context you need, whether you’re on your Stripe or ChartMogul dashboard. To install the app, go to the Stripe App Marketplace. View key metrics and detailed MRR movements on your Stripe homepage Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. MRR movements are updates on the New Business, Expansion, Contraction, Churn, and Reactivation. Keep track of your MRR movements to stay up-to-date with your business growth. Now, you can view the following metrics on your Stripe homepage: MRR ARR Subscribers MRR Movements Your customers’ MRR movements give you a more meaningful picture of your subscription business over simply looking at a list of transactions. – Nick Franklin, CEO, ChartMogul Gain more insights into a customer on the Stripe customer profile On the Stripe customer profile, you can see the metrics associated with that customer: MRR ARR Customer status MRR Movements While you’re on a particular customer page, the MRR, ARR, customer status, and MRR movements allow you a deep insight into this customer’s activity. Has this customer recently upgraded their plan? Turn them into an advocate. Have they recently downgraded to a lower-tier plan? They might be at risk of churning! Compliment your Stripe data with ChartMogul metrics You can gain a deep understanding of your business with accurate subscription metrics. Most organizations have multiple data sources for their billing data. For example, Stripe as the main billing platform and Google Play, App Store Connect, or a custom data source as additional data sources. In ChartMogul, you can see all of them in one place. ChartMogul provides numerous data settings that give you full control over how your metrics are calculated. You can: Customize your churn rate formula Set when churn is recognized Choose how to handle free customers Decide how to handle past-due invoices Decide whether refunds should impact MRR or not Group activities Go to Data Platform -> Subscription Analytics to review your data settings. How do you track MRR movements? Do you track your MRR movements on a daily basis? Tell us how. We’d love to hear from you. We’re hoping that this release will help you get a better understanding of your metrics without the need to switch between dashboards. To share your feedback on the ChartMogul integration with Stripe, send us a message at [email protected].

[INST] Add Your MRR Movements to the Stripe Dashboard [/INST]

Your key metrics are probably spread between many tools and dashboards. Integrate ChartMogul with Stripe to view your key metrics without switching between dashboards. Get the ChartMogul Stripe App to view your MRR, ARR, Subscribers, and MRR movements, on the Stripe homepage. On the customer page view MRR, ARR, Customer status, and MRR Movements of a particular customer. You can get the business context you need, whether you’re on your Stripe or ChartMogul dashboard. To install the app, go to the Stripe App Marketplace. View key metrics and detailed MRR movements on your Stripe homepage Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. MRR movements are updates on the New Business, Expansion, Contraction, Churn, and Reactivation. Keep track of your MRR movements to stay up-to-date with your business growth. Now, you can view the following metrics on your Stripe homepage: MRR ARR Subscribers MRR Movements Your customers’ MRR movements give you a more meaningful picture of your subscription business over simply looking at a list of transactions. – Nick Franklin, CEO, ChartMogul Gain more insights into a customer on the Stripe customer profile On the Stripe customer profile, you can see the metrics associated with that customer: MRR ARR Customer status MRR Movements While you’re on a particular customer page, the MRR, ARR, customer status, and MRR movements allow you a deep insight into this customer’s activity. Has this customer recently upgraded their plan? Turn them into an advocate. Have they recently downgraded to a lower-tier plan? They might be at risk of churning! Compliment your Stripe data with ChartMogul metrics You can gain a deep understanding of your business with accurate subscription metrics. Most organizations have multiple data sources for their billing data. For example, Stripe as the main billing platform and Google Play, App Store Connect, or a custom data source as additional data sources. In ChartMogul, you can see all of them in one place. ChartMogul provides numerous data settings that give you full control over how your metrics are calculated. You can: Customize your churn rate formula Set when churn is recognized Choose how to handle free customers Decide how to handle past-due invoices Decide whether refunds should impact MRR or not Group activities Go to Data Platform -> Subscription Analytics to review your data settings. How do you track MRR movements? Do you track your MRR movements on a daily basis? Tell us how. We’d love to hear from you. We’re hoping that this release will help you get a better understanding of your metrics without the need to switch between dashboards. To share your feedback on the ChartMogul integration with Stripe, send us a message at [email protected].

<sys> [INST] Add Your MRR Movements to the Stripe Dashboard [/INST] Your key metrics are probably spread between many tools and dashboards. Integrate ChartMogul with Stripe to view your key metrics without switching between dashboards. Get the ChartMogul Stripe App to view your MRR, ARR, Subscribers, and MRR movements, on the Stripe homepage. On the customer page view MRR, ARR, Customer status, and MRR Movements of a particular customer. You can get the business context you need, whether you’re on your Stripe or ChartMogul dashboard. To install the app, go to the Stripe App Marketplace. View key metrics and detailed MRR movements on your Stripe homepage Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. MRR movements are updates on the New Business, Expansion, Contraction, Churn, and Reactivation. Keep track of your MRR movements to stay up-to-date with your business growth. Now, you can view the following metrics on your Stripe homepage: MRR ARR Subscribers MRR Movements Your customers’ MRR movements give you a more meaningful picture of your subscription business over simply looking at a list of transactions. – Nick Franklin, CEO, ChartMogul Gain more insights into a customer on the Stripe customer profile On the Stripe customer profile, you can see the metrics associated with that customer: MRR ARR Customer status MRR Movements While you’re on a particular customer page, the MRR, ARR, customer status, and MRR movements allow you a deep insight into this customer’s activity. Has this customer recently upgraded their plan? Turn them into an advocate. Have they recently downgraded to a lower-tier plan? They might be at risk of churning! Compliment your Stripe data with ChartMogul metrics You can gain a deep understanding of your business with accurate subscription metrics. Most organizations have multiple data sources for their billing data. For example, Stripe as the main billing platform and Google Play, App Store Connect, or a custom data source as additional data sources. In ChartMogul, you can see all of them in one place. ChartMogul provides numerous data settings that give you full control over how your metrics are calculated. You can: Customize your churn rate formula Set when churn is recognized Choose how to handle free customers Decide how to handle past-due invoices Decide whether refunds should impact MRR or not Group activities Go to Data Platform -> Subscription Analytics to review your data settings. How do you track MRR movements? Do you track your MRR movements on a daily basis? Tell us how. We’d love to hear from you. We’re hoping that this release will help you get a better understanding of your metrics without the need to switch between dashboards. To share your feedback on the ChartMogul integration with Stripe, send us a message at [email protected]. </sys

Announcing ChartMogul v2. This upgrade has been rolled out to all users earlier today. It’s worth noting that your data, and how we calculate your metrics hasn’t been changed by these updates. New features and enhancements All new user experience UI has been completely redesigned and rebuilt. Clearer layout: navigation is on the left, segmentation along the top. Collapsible side panel gives you almost the entire screen to explore your data. A beautiful new Overview screen that’s fully customizable Decide what graphs and metrics are important for your business, add them to your Overview and then arrange things using drag and drop. Enhanced Cohorts New ability to click on the cells in the cohort analysis and discover what customer activities are impacting your churn and retention numbers. New admin tool for managing plans You can now hide and show plans, rename them and create groups of plans just way easier. And some minor enhancements The MRR movements graph can now be viewed in weekly intervals. There’s a new ‘Annual Run Rate’ graph. To go along with this release we’ve also updated our website and product pages, we hope you like the new look! The Next Web were also kind enough to do a nice writeup about this release. Below I explain some of the thinking behind this update… Video transcript We have some really big product updates to announce. Firstly, it’s worth noting that none of these updates are going to affect your data, or how we calculate your metrics in any way. The biggest thing you’re going to notice is a completely new UI. A couple of months ago we looked at our product roadmap and thought: “how are we going to fit in all the new features we have planned, the UI just isn’t designed to be extensible”. So we took a step back and thought about what the perfect UI for ChartMogul might look like, taking into consideration what we have now, and where we’re going to take things in the future. What we came up with is a completely new design that’s really easy to read and gives our team the flexibility to add in all the new things we have planned. We’ve put the segmentation controls along the top, and all the navigation is now on the left hand side – and it’s collapsible so you can maximise the available space for exploring your data. We’ve introduced a beautiful new Overview screen that displays all the most important graphs and metrics in one place. And it’s completely customisable, you can decide what metrics are most important for your business and add those to your Overview screen, and then arrange things using drag and drop, it’s really cool. We’ve also improved cohorts. Ever since we released Cohorts back in February, customer’s have been telling us they want to be able to just click on one of the cells in the cohort analysis and take a look at the underlying data, in the same way you can already do with the charts…so we’ve built this feature, and it’s really useful for investigating what customer activity is impacting your retention numbers. Finally, the admin tool for managing plans has been completely re-built. You can now hide & show plans, rename them and create groups of plans to filter with, just way more easily than before. We hope you love the new features and the new design. Thanks for watching.

[INST] Announcing ChartMogul v2 [/INST]

This upgrade has been rolled out to all users earlier today. It’s worth noting that your data, and how we calculate your metrics hasn’t been changed by these updates. New features and enhancements All new user experience UI has been completely redesigned and rebuilt. Clearer layout: navigation is on the left, segmentation along the top. Collapsible side panel gives you almost the entire screen to explore your data. A beautiful new Overview screen that’s fully customizable Decide what graphs and metrics are important for your business, add them to your Overview and then arrange things using drag and drop. Enhanced Cohorts New ability to click on the cells in the cohort analysis and discover what customer activities are impacting your churn and retention numbers. New admin tool for managing plans You can now hide and show plans, rename them and create groups of plans just way easier. And some minor enhancements The MRR movements graph can now be viewed in weekly intervals. There’s a new ‘Annual Run Rate’ graph. To go along with this release we’ve also updated our website and product pages, we hope you like the new look! The Next Web were also kind enough to do a nice writeup about this release. Below I explain some of the thinking behind this update… Video transcript We have some really big product updates to announce. Firstly, it’s worth noting that none of these updates are going to affect your data, or how we calculate your metrics in any way. The biggest thing you’re going to notice is a completely new UI. A couple of months ago we looked at our product roadmap and thought: “how are we going to fit in all the new features we have planned, the UI just isn’t designed to be extensible”. So we took a step back and thought about what the perfect UI for ChartMogul might look like, taking into consideration what we have now, and where we’re going to take things in the future. What we came up with is a completely new design that’s really easy to read and gives our team the flexibility to add in all the new things we have planned. We’ve put the segmentation controls along the top, and all the navigation is now on the left hand side – and it’s collapsible so you can maximise the available space for exploring your data. We’ve introduced a beautiful new Overview screen that displays all the most important graphs and metrics in one place. And it’s completely customisable, you can decide what metrics are most important for your business and add those to your Overview screen, and then arrange things using drag and drop, it’s really cool. We’ve also improved cohorts. Ever since we released Cohorts back in February, customer’s have been telling us they want to be able to just click on one of the cells in the cohort analysis and take a look at the underlying data, in the same way you can already do with the charts…so we’ve built this feature, and it’s really useful for investigating what customer activity is impacting your retention numbers. Finally, the admin tool for managing plans has been completely re-built. You can now hide & show plans, rename them and create groups of plans to filter with, just way more easily than before. We hope you love the new features and the new design. Thanks for watching.

<sys> [INST] Announcing ChartMogul v2 [/INST] This upgrade has been rolled out to all users earlier today. It’s worth noting that your data, and how we calculate your metrics hasn’t been changed by these updates. New features and enhancements All new user experience UI has been completely redesigned and rebuilt. Clearer layout: navigation is on the left, segmentation along the top. Collapsible side panel gives you almost the entire screen to explore your data. A beautiful new Overview screen that’s fully customizable Decide what graphs and metrics are important for your business, add them to your Overview and then arrange things using drag and drop. Enhanced Cohorts New ability to click on the cells in the cohort analysis and discover what customer activities are impacting your churn and retention numbers. New admin tool for managing plans You can now hide and show plans, rename them and create groups of plans just way easier. And some minor enhancements The MRR movements graph can now be viewed in weekly intervals. There’s a new ‘Annual Run Rate’ graph. To go along with this release we’ve also updated our website and product pages, we hope you like the new look! The Next Web were also kind enough to do a nice writeup about this release. Below I explain some of the thinking behind this update… Video transcript We have some really big product updates to announce. Firstly, it’s worth noting that none of these updates are going to affect your data, or how we calculate your metrics in any way. The biggest thing you’re going to notice is a completely new UI. A couple of months ago we looked at our product roadmap and thought: “how are we going to fit in all the new features we have planned, the UI just isn’t designed to be extensible”. So we took a step back and thought about what the perfect UI for ChartMogul might look like, taking into consideration what we have now, and where we’re going to take things in the future. What we came up with is a completely new design that’s really easy to read and gives our team the flexibility to add in all the new things we have planned. We’ve put the segmentation controls along the top, and all the navigation is now on the left hand side – and it’s collapsible so you can maximise the available space for exploring your data. We’ve introduced a beautiful new Overview screen that displays all the most important graphs and metrics in one place. And it’s completely customisable, you can decide what metrics are most important for your business and add those to your Overview screen, and then arrange things using drag and drop, it’s really cool. We’ve also improved cohorts. Ever since we released Cohorts back in February, customer’s have been telling us they want to be able to just click on one of the cells in the cohort analysis and take a look at the underlying data, in the same way you can already do with the charts…so we’ve built this feature, and it’s really useful for investigating what customer activity is impacting your retention numbers. Finally, the admin tool for managing plans has been completely re-built. You can now hide & show plans, rename them and create groups of plans to filter with, just way more easily than before. We hope you love the new features and the new design. Thanks for watching. </sys

Using ASP to benchmark your SaaS sales team. In SaaS, ASP is the average price paid by a new customer at the moment they first convert to a paid subscription. Any followup expansion or contraction of the account is ignored. Unlike ARPU, ASP can vary dramatically month by month and gives you a good idea of how effective your sales team is at driving up new customer deal sizes. As a high level metric ASP is interesting but it gets much more meaningful when you start to filter down by plan and geographies – particularly when you have a larger sales organisation with teams responsible for different regions. Let’s say you have two US sales teams, the first covering the Western United States and the second covering all other states. With ChartMogul you can quickly define your sales regions by simply selecting the countries and/or states you want to group and hitting save. I’ve called our two example regions ‘US West’ and ‘US Mid+East’. You can define these areas in a way that matches your companies sales regions. Once defined you can compare the ASP of these two regions. In this fictional example we can see that the ASP in ‘US West’ is pulling away from ‘US Mid+East’, approaching $2,000 MRR. We’ve also filtered the graph to just show the Enterprise plan, this is a good idea if like most SaaS companies you have lower plans that are mostly self-service – so you know you’re just looking at the work of your sales team. It looks like the US West sales team is outperforming the US Mid+East team in this example – in terms of raising the initial deal size. Unless the US West team underperforms on upsell/retention they will gradually pull ahead on ARPU also. This comparison is also interesting to do between countries and international regions. E.g. UK vs France vs Germany. APAC vs LATAM, etc.

[INST] Using ASP to benchmark your SaaS sales team [/INST]

In SaaS, ASP is the average price paid by a new customer at the moment they first convert to a paid subscription. Any followup expansion or contraction of the account is ignored. Unlike ARPU, ASP can vary dramatically month by month and gives you a good idea of how effective your sales team is at driving up new customer deal sizes. As a high level metric ASP is interesting but it gets much more meaningful when you start to filter down by plan and geographies – particularly when you have a larger sales organisation with teams responsible for different regions. Let’s say you have two US sales teams, the first covering the Western United States and the second covering all other states. With ChartMogul you can quickly define your sales regions by simply selecting the countries and/or states you want to group and hitting save. I’ve called our two example regions ‘US West’ and ‘US Mid+East’. You can define these areas in a way that matches your companies sales regions. Once defined you can compare the ASP of these two regions. In this fictional example we can see that the ASP in ‘US West’ is pulling away from ‘US Mid+East’, approaching $2,000 MRR. We’ve also filtered the graph to just show the Enterprise plan, this is a good idea if like most SaaS companies you have lower plans that are mostly self-service – so you know you’re just looking at the work of your sales team. It looks like the US West sales team is outperforming the US Mid+East team in this example – in terms of raising the initial deal size. Unless the US West team underperforms on upsell/retention they will gradually pull ahead on ARPU also. This comparison is also interesting to do between countries and international regions. E.g. UK vs France vs Germany. APAC vs LATAM, etc.

<sys> [INST] Using ASP to benchmark your SaaS sales team [/INST] In SaaS, ASP is the average price paid by a new customer at the moment they first convert to a paid subscription. Any followup expansion or contraction of the account is ignored. Unlike ARPU, ASP can vary dramatically month by month and gives you a good idea of how effective your sales team is at driving up new customer deal sizes. As a high level metric ASP is interesting but it gets much more meaningful when you start to filter down by plan and geographies – particularly when you have a larger sales organisation with teams responsible for different regions. Let’s say you have two US sales teams, the first covering the Western United States and the second covering all other states. With ChartMogul you can quickly define your sales regions by simply selecting the countries and/or states you want to group and hitting save. I’ve called our two example regions ‘US West’ and ‘US Mid+East’. You can define these areas in a way that matches your companies sales regions. Once defined you can compare the ASP of these two regions. In this fictional example we can see that the ASP in ‘US West’ is pulling away from ‘US Mid+East’, approaching $2,000 MRR. We’ve also filtered the graph to just show the Enterprise plan, this is a good idea if like most SaaS companies you have lower plans that are mostly self-service – so you know you’re just looking at the work of your sales team. It looks like the US West sales team is outperforming the US Mid+East team in this example – in terms of raising the initial deal size. Unless the US West team underperforms on upsell/retention they will gradually pull ahead on ARPU also. This comparison is also interesting to do between countries and international regions. E.g. UK vs France vs Germany. APAC vs LATAM, etc. </sys

Come meet us in London, Boston, Munich & Dublin. London – London SaaS Meetup – 21st Sept Ed Shelley (Dir. Content) will be attending the first event run by our friends over at SaaScribe. Boston MA – Business of Software – 21st – 23rd Sept I’ll be in Boston for the 3 days of the conference next week, and will be hosting a workshop on Monday afternoon: SaaS Metrics Masterclass: techniques for using your data to drive growth. More info here. Munich – Bits and Pretzels – 27th – 29th Sept Oktoberfest!!! I’ll be a ‘Table Captain’, reserve a seat at our table. It’s not online poker, we promise! October we recover from the hangover, then onto Dublin… Dublin – Web Summit – 3rd – 5th Nov A few of us will be at Web Summit in Dublin for 3 days in November, look out for us in ChartMogul T-Shirts. Meet us in the US, London or Germany in September, Munich in November, and in Berlin all year round (more events added soon). If you would like to meet us, be sure to drop us an email at [email protected]. See you there.

[INST] Come meet us in London, Boston, Munich & Dublin [/INST]

London – London SaaS Meetup – 21st Sept Ed Shelley (Dir. Content) will be attending the first event run by our friends over at SaaScribe. Boston MA – Business of Software – 21st – 23rd Sept I’ll be in Boston for the 3 days of the conference next week, and will be hosting a workshop on Monday afternoon: SaaS Metrics Masterclass: techniques for using your data to drive growth. More info here. Munich – Bits and Pretzels – 27th – 29th Sept Oktoberfest!!! I’ll be a ‘Table Captain’, reserve a seat at our table. It’s not online poker, we promise! October we recover from the hangover, then onto Dublin… Dublin – Web Summit – 3rd – 5th Nov A few of us will be at Web Summit in Dublin for 3 days in November, look out for us in ChartMogul T-Shirts. Meet us in the US, London or Germany in September, Munich in November, and in Berlin all year round (more events added soon). If you would like to meet us, be sure to drop us an email at [email protected]. See you there.

<sys> [INST] Come meet us in London, Boston, Munich & Dublin [/INST] London – London SaaS Meetup – 21st Sept Ed Shelley (Dir. Content) will be attending the first event run by our friends over at SaaScribe. Boston MA – Business of Software – 21st – 23rd Sept I’ll be in Boston for the 3 days of the conference next week, and will be hosting a workshop on Monday afternoon: SaaS Metrics Masterclass: techniques for using your data to drive growth. More info here. Munich – Bits and Pretzels – 27th – 29th Sept Oktoberfest!!! I’ll be a ‘Table Captain’, reserve a seat at our table. It’s not online poker, we promise! October we recover from the hangover, then onto Dublin… Dublin – Web Summit – 3rd – 5th Nov A few of us will be at Web Summit in Dublin for 3 days in November, look out for us in ChartMogul T-Shirts. Meet us in the US, London or Germany in September, Munich in November, and in Berlin all year round (more events added soon). If you would like to meet us, be sure to drop us an email at [email protected]. See you there. </sys

🚀 SaaS Roundup #117: Stop making pricing decisions in a vacuum. In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Pricing Lessons from Working with 30+ Seed and Series A B2B Startups An interview with Tyler Gaffney, First Round Capital “People get caught up behind the computer screen trying to figure pricing out, or doing a ton of benchmarking and research. Instead, they should be having conversations. All the answers are in your customers’ heads.” Pricing is such a widely-discussed topic in SaaS, but First Round’s Tyler Gaffney would have us believe that many of us are still underestimating the value of pricing decisions, which are still largely made in a vacuum. This post is full of guidance, pitfalls and ways to get started down the path towards better pricing decisions. Read the full post A guide to improving product quality in a SaaS environment Oren Raboy, Totango “Improving product quality is really hard. It becomes more manageable when you have a feedback loop that can direct you forward. We found it effective in improving product quality, and in gives us confidence in our progress and direction.” Contrary to pricing, the topic of product quality is not at all widely discussed — that’s why this post from Oren at Totango really caught my eye. Oren has built a well-structured feedback loop which is focused on categorizing product defects and tracking them through to a resolution. Read the full post Dropbox, the ultimate Mouse Hunter Christoph Janz, Point Nine Capital “…getting a hundred million dollars in ARR within around eight years is incredibly hard and extremely rare. Getting to more than one billion within the same timeframe is completely nuts. If the improbability of reaching a $1B valuation is epitomized by a unicorn, getting to $1B in SaaS revenues within eight years is as unlikely as seeing a unicorn with three heads.” Dropbox was the fastest SaaS company to hit $1B in ARR, and according to its S-1 filing over 70% of paying users are on an individual (rather than business) plan. It’s great to see Christoph’s take on the components of Dropbox’s success, especially after some of the IPO dust has settled. Read the full post That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday.

[INST] 🚀 SaaS Roundup #117: Stop making pricing decisions in a vacuum [/INST]

In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Pricing Lessons from Working with 30+ Seed and Series A B2B Startups An interview with Tyler Gaffney, First Round Capital “People get caught up behind the computer screen trying to figure pricing out, or doing a ton of benchmarking and research. Instead, they should be having conversations. All the answers are in your customers’ heads.” Pricing is such a widely-discussed topic in SaaS, but First Round’s Tyler Gaffney would have us believe that many of us are still underestimating the value of pricing decisions, which are still largely made in a vacuum. This post is full of guidance, pitfalls and ways to get started down the path towards better pricing decisions. Read the full post A guide to improving product quality in a SaaS environment Oren Raboy, Totango “Improving product quality is really hard. It becomes more manageable when you have a feedback loop that can direct you forward. We found it effective in improving product quality, and in gives us confidence in our progress and direction.” Contrary to pricing, the topic of product quality is not at all widely discussed — that’s why this post from Oren at Totango really caught my eye. Oren has built a well-structured feedback loop which is focused on categorizing product defects and tracking them through to a resolution. Read the full post Dropbox, the ultimate Mouse Hunter Christoph Janz, Point Nine Capital “…getting a hundred million dollars in ARR within around eight years is incredibly hard and extremely rare. Getting to more than one billion within the same timeframe is completely nuts. If the improbability of reaching a $1B valuation is epitomized by a unicorn, getting to $1B in SaaS revenues within eight years is as unlikely as seeing a unicorn with three heads.” Dropbox was the fastest SaaS company to hit $1B in ARR, and according to its S-1 filing over 70% of paying users are on an individual (rather than business) plan. It’s great to see Christoph’s take on the components of Dropbox’s success, especially after some of the IPO dust has settled. Read the full post That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday.

<sys> [INST] 🚀 SaaS Roundup #117: Stop making pricing decisions in a vacuum [/INST] In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Pricing Lessons from Working with 30+ Seed and Series A B2B Startups An interview with Tyler Gaffney, First Round Capital “People get caught up behind the computer screen trying to figure pricing out, or doing a ton of benchmarking and research. Instead, they should be having conversations. All the answers are in your customers’ heads.” Pricing is such a widely-discussed topic in SaaS, but First Round’s Tyler Gaffney would have us believe that many of us are still underestimating the value of pricing decisions, which are still largely made in a vacuum. This post is full of guidance, pitfalls and ways to get started down the path towards better pricing decisions. Read the full post A guide to improving product quality in a SaaS environment Oren Raboy, Totango “Improving product quality is really hard. It becomes more manageable when you have a feedback loop that can direct you forward. We found it effective in improving product quality, and in gives us confidence in our progress and direction.” Contrary to pricing, the topic of product quality is not at all widely discussed — that’s why this post from Oren at Totango really caught my eye. Oren has built a well-structured feedback loop which is focused on categorizing product defects and tracking them through to a resolution. Read the full post Dropbox, the ultimate Mouse Hunter Christoph Janz, Point Nine Capital “…getting a hundred million dollars in ARR within around eight years is incredibly hard and extremely rare. Getting to more than one billion within the same timeframe is completely nuts. If the improbability of reaching a $1B valuation is epitomized by a unicorn, getting to $1B in SaaS revenues within eight years is as unlikely as seeing a unicorn with three heads.” Dropbox was the fastest SaaS company to hit $1B in ARR, and according to its S-1 filing over 70% of paying users are on an individual (rather than business) plan. It’s great to see Christoph’s take on the components of Dropbox’s success, especially after some of the IPO dust has settled. Read the full post That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday. </sys

David Cancel, CEO of Drift on chatbots, metrics & mentorship. “The last decade of Marketing and Sales tools have made it super difficult to buy, and it doesn’t match the way that people buy any more.” David Cancel, CEO of Drift is a product person through and through. He’s no stranger to growing a SaaS business, formerly working as CPO at HubSpot after his startup Performable was acquired by the Marketing giant. David firmly believes that the experience of buying business software is lagging far behind the experience we’ve all come to expect from consumer shopping. David and I chatted about his vision of the future of Sales and Marketing software – and how Drift fits into this. (hint: it involves chat bots). Selected quotes “Our wider vision is wild and crazy, and we think we have this chance to re-define the whole stack of Marketing and Sales software” “My daughter is 12 years old. She doesn’t know the difference between a brand – a company – and a person.” “I have to say, I don’t love bots… where they all fail is that most of them pretend to be human… that’s not going to work. That’s the worst experience. We took the opposite approach and said, ‘it’s always going to be clearly a bot… we’re not trying to replace human behaviour, we’re trying to be more intelligent about how we route someone to the right person.” “If you let anyone define a set of metrics I can define a metric to tell any story I want.” Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you! David’s recommended books Shoe Dog: Phil Knight “In this candid and riveting memoir, for the first time ever, Nike founder and CEO Phil Knight shares the inside story of the company’s early days as an intrepid start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands.” Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business: John Mackey & Raj Sisodia “At once a bold defense and reimagining of capitalism and a blueprint for a new system for doing business, Conscious Capitalism is for anyone hoping to build a more cooperative, humane, and positive future.” Links Drift – “Instead of traditional marketing and sales platforms that rely on forms and follow-ups, Drift connects your business with the best leads in real-time, like a virtual assistant for your website.” David’s profile on Medium Seeking Wisdom podcast (also on SoundCloud) – David Cancel and Dave Gerhardt’s podcast about personal and professional growth.

[INST] David Cancel, CEO of Drift on chatbots, metrics & mentorship [/INST]

“The last decade of Marketing and Sales tools have made it super difficult to buy, and it doesn’t match the way that people buy any more.” David Cancel, CEO of Drift is a product person through and through. He’s no stranger to growing a SaaS business, formerly working as CPO at HubSpot after his startup Performable was acquired by the Marketing giant. David firmly believes that the experience of buying business software is lagging far behind the experience we’ve all come to expect from consumer shopping. David and I chatted about his vision of the future of Sales and Marketing software – and how Drift fits into this. (hint: it involves chat bots). Selected quotes “Our wider vision is wild and crazy, and we think we have this chance to re-define the whole stack of Marketing and Sales software” “My daughter is 12 years old. She doesn’t know the difference between a brand – a company – and a person.” “I have to say, I don’t love bots… where they all fail is that most of them pretend to be human… that’s not going to work. That’s the worst experience. We took the opposite approach and said, ‘it’s always going to be clearly a bot… we’re not trying to replace human behaviour, we’re trying to be more intelligent about how we route someone to the right person.” “If you let anyone define a set of metrics I can define a metric to tell any story I want.” Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you! David’s recommended books Shoe Dog: Phil Knight “In this candid and riveting memoir, for the first time ever, Nike founder and CEO Phil Knight shares the inside story of the company’s early days as an intrepid start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands.” Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business: John Mackey & Raj Sisodia “At once a bold defense and reimagining of capitalism and a blueprint for a new system for doing business, Conscious Capitalism is for anyone hoping to build a more cooperative, humane, and positive future.” Links Drift – “Instead of traditional marketing and sales platforms that rely on forms and follow-ups, Drift connects your business with the best leads in real-time, like a virtual assistant for your website.” David’s profile on Medium Seeking Wisdom podcast (also on SoundCloud) – David Cancel and Dave Gerhardt’s podcast about personal and professional growth.

<sys> [INST] David Cancel, CEO of Drift on chatbots, metrics & mentorship [/INST] “The last decade of Marketing and Sales tools have made it super difficult to buy, and it doesn’t match the way that people buy any more.” David Cancel, CEO of Drift is a product person through and through. He’s no stranger to growing a SaaS business, formerly working as CPO at HubSpot after his startup Performable was acquired by the Marketing giant. David firmly believes that the experience of buying business software is lagging far behind the experience we’ve all come to expect from consumer shopping. David and I chatted about his vision of the future of Sales and Marketing software – and how Drift fits into this. (hint: it involves chat bots). Selected quotes “Our wider vision is wild and crazy, and we think we have this chance to re-define the whole stack of Marketing and Sales software” “My daughter is 12 years old. She doesn’t know the difference between a brand – a company – and a person.” “I have to say, I don’t love bots… where they all fail is that most of them pretend to be human… that’s not going to work. That’s the worst experience. We took the opposite approach and said, ‘it’s always going to be clearly a bot… we’re not trying to replace human behaviour, we’re trying to be more intelligent about how we route someone to the right person.” “If you let anyone define a set of metrics I can define a metric to tell any story I want.” Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you! David’s recommended books Shoe Dog: Phil Knight “In this candid and riveting memoir, for the first time ever, Nike founder and CEO Phil Knight shares the inside story of the company’s early days as an intrepid start-up and its evolution into one of the world’s most iconic, game-changing, and profitable brands.” Conscious Capitalism, With a New Preface by the Authors: Liberating the Heroic Spirit of Business: John Mackey & Raj Sisodia “At once a bold defense and reimagining of capitalism and a blueprint for a new system for doing business, Conscious Capitalism is for anyone hoping to build a more cooperative, humane, and positive future.” Links Drift – “Instead of traditional marketing and sales platforms that rely on forms and follow-ups, Drift connects your business with the best leads in real-time, like a virtual assistant for your website.” David’s profile on Medium Seeking Wisdom podcast (also on SoundCloud) – David Cancel and Dave Gerhardt’s podcast about personal and professional growth. </sys

Why Desktop is still king for B2B SaaS. A condensed history of ‘mobile’ in SaaS Generation 1 “Mobile is here! It’s the next big thing! Let’s cram our ‘desktop-class’ experience into a small form factor. (we didn’t fully understand mobile at this point).” Result: Turns out the experience was bad and nobody really used it. Oops. Generation 2 “Actually, it doesn’t make sense to fit our whole desktop experience into a small screen. Let’s break out small parts of the experience into smaller, isolated apps that make sense in a mobile workflow.” Result: Mobile SaaS is actually useful, when the use case makes sense in a mobile context and small, isolated workflows are broken out of the core product. Generation 3 (AKA Mobile SaaS Nirvana) “Actually, it doesn’t make sense to think about mobile apps and devices as separate entities. When customers subscribe to our service, they expect an experience that works well in the places where it makes sense for them to use it.” Result: Companies and services are born that move on from the distinction between devices, towards ‘experience-first’ products that deliver value for customers across a range of screens, devices and platforms. If I ‘turn on’ a service, I seamlessly experience the benefits of that service wherever it’s valuable for me to do so. “Mobile-first” is how many of us envision working in the future. So why do we all still sit at desks with laptops? Barriers between us and Mobile SaaS Nirvana App stores, onboarding friction Let’s face it, downloading an app to your device has become somewhat of a pain. When compared to simply following a link to a web app, you have to open the app store, wait for the store page to load, hit the Download button, and wait for your device to download a ton of assets (half of which you probably don’t even need for your specific device and use-case), then put the home screen icon in a sensible place. App discovery sucks The App Store is stale. Of the millions of apps available on both the iOS and Android platforms, how many of those do you think are actually discoverable? Despite Google’s efforts to include app listings in its search product, and Apple’s efforts to surface App Store results from things like Spotlight searches, it’s not getting any easier to actually find that amazing app you’ll probably love. Somewhere behind this screen are over 1.5 million apps. Hmm, better get started… Privacy, data laws Privacy is the current hot topic in the tech universe. I would guess that in the next few years, there will emerge a greater awareness of data privacy in general, as big stories (such as FBI vs. Apple) hit the mainstream news. People are going to care about their privacy. The unfortunate truth is that to offer a service that is truly device or platform agnostic, you’re going to have to track people across a number of platforms and devices. This doesn’t come without concerns. Services are reactive (require user effort) rather than proactive Most SaaS products today are entirely reactive. That is to say, they exist as tools which you can go and access to get information about an aspect of your business, and maybe carry out a task related to your business. Sure, they’re effective at doing their job, but a truly platform-agnostic service will not be able to rely on the user remembering to log in and check the state-of-play. People are increasingly strained for time and attention in this age, so services must adapt to be more proactive for the user. If there’s an opportunity to tweak my marketing automation process, don’t wait for me to log in and see it — notify me! The end-user is rarely the buyer (in Enterprise), so acquisition on mobile app stores is somewhat difficult compared to consumer. The person who installs your Enterprise SaaS app on their phone is likely not the same person who can make the decision to use ‘SaaS Product X’ across their business. This presents a set of problems around both discovery and acquisition, particularly in the constrained walled garden of the App Store. Apple’s support for subscription billing is poor If you want a smooth purchase and onboarding experience, it makes sense to make use of the native payment infrastructure that the platform provides. The problem with this? Handling subscription billing on iOS is not a nice experience, for the vendor or the user. And good luck getting any data out of Apple’s platform, or using a 3rd party analytics tool! This is why most apps have gone down the one-off micro-transaction route as a solution for monetization. The majority of work is still done in the office – people try to keep their work time from leaking into personal life. The smartphone (and other mobile devices) are still inherently personal devices. They own highly personal interactions with people close to you, and they’re completely geared towards a single user. People are often reluctant to mix their work and personal life, therefore introducing an enterprise app to their personal smartphone doesn’t feel right. And who wants to have 2 separate smartphones in their pockets? Mobile devices, despite what Apple tells you, are still primarily used for consumption rather than creation. Despite shiny videos of artists and architects using their shiny new iPad Pro, and writers tapping away on their cramped bluetooth keyboard accessory, these devices still have problems as pure productivity platforms. In the workflow of a Content Marketer for example, there would be tasks you’d struggle to complete without falling back to that trusty MacBook. Which leaves us with mobile devices which are only ever an accompaniment to a “full computer”. How Apple wants you to be productive in the future. But should we refer to this a “Mobile” experience? (Source: apple.com) There are too many barriers for an incremental solution We’ll never move beyond these barriers unless the industry undergoes a fundamental change to the way in which we’re thinking about devices and platforms. Our current way of thinking imposes somewhat artificial limitations on our success in building cloud-based products and services, but the platforms also need to evolve beyond the narrow view they adopt today. As SaaS vendors, we can drive this forwards by changing the way we think about solutions: We need to stop thinking in terms of ‘mobile’ and ‘desktop’. Don’t fear — this rather radical way of thinking has already been suggested and is picking up some momentum in some more forward-thinking technology businesses… Our current way of thinking imposes artificial limitations on our success in building cloud-based products. Tweet this quote ‘Mobile’ is dead, long live ‘multiple screen sizes’ For some time now, thought leaders on the topics of user experience, design and product have put forward the following notion: Stop thinking about ‘devices’ and instead simply consider each consumer device as a ‘screen’, where the user interacts with services. And instead of ‘mobile’ as a platform, simply focus on different screen sizes and which types of screens are relevant to your service. The latest episode of the Inside Intercom podcast sees Chris Messina, Uber’s Developer Experience Lead discuss this exact concept, as well as using the Jobs To Be Done framework for desigining features in a device-agnostic way: Even Android’s design chief Matias Duarte told us to give up our obsession with ‘mobile’, as a platform, and instead focus on experiences which span across multiple platforms: “Mobile was a meaningful distinction from what people did, when it was extremely constrained… [in terms of computing power, bandwidth etc.]” “For most people, just about any experience you can imagine can be meaningfully expressed on any screen size.” “We need to stop thinking of mobile as a distinct category… you should put energy into the screens where people’s eyeballs are at.” If you find this intriguing, I highly recommend watching the full interview with Matias below: If I had to highlight one takeaway from the above debate – one that’s relevant for B2B SaaS businesses thinking about mobile – it would be this: Put your energy into screens where people’s eyeballs are. Or, to elaborate: Put energy into screens where your customer’s eyeballs are, when they’re encountering the problems that your product solves. If they only need your solution when they’re sat in the office, build for desktop screens If they need quick updates and alerts when they’re on the go, build something for small screens If they need something that’s constantly on display to provide monitoring, build for large screens Unboxing small ‘workflows’ from a SaaS solution into different screens A number of B2B companies are already thinking more on the level of taking small parts of their solution – the ones that make sense on a small screen – and offering a mobile version of them. Intercom’s iOS app gives you the ability to respond to users on the go – allowing you to maintain an exceptional customer experience. Mailchimp allows you to quickly check the performance of a campaign when you’re away from your desk. Of course, you can’t compose and design a new campaign in their app – but why would you? Buffer understands that you want to be able to queue some great content, whenever and wherever you find it. That means having a presence on mobile. ChartMogul offers an experience for the desktop, where the vast majority of revenue analysis and reporting is done today: Geckoboard is also offering LARGE screen experiences, because that’s a key use case for their solution: source: geckoboard.com If we look more towards the consumer space, there are some companies which truly live and breathe the notion of “existing anywhere that’s relevant to the user”. Take Uber, for example. I can order an uber from most connected devices that I use every day. I can tap my Apple Watch and a car will arrive within minutes. I can shout at my Amazon Echo to order me an Uber – and that doesn’t have a screen! Uber even has a presence on platforms that don’t use screens at all. But the company knows how to craft an ‘omnipresent’ experience of its brand. Source: Amazon.com In summary Think of your SaaS product as an ‘experience’ that can be enabled for your customers when they subscribe. Think about allowing users to interact with your experience wherever it makes sense for them to do so. Build for platforms that are most prevalent during those points when it makes sense to interact with users. As a side-note, I should probably change the title of this post to “Why desktop-sized screen experiences are still king for SaaS”. But it didn’t quite have the same ring to it… NEW on the @ChartMogul blog: Why Desktop is still king for B2B SaaS https://t.co/lyfyutFJ3j #SaaS #Enterprise pic.twitter.com/BFBzm03OJM — ChartMogul (@ChartMogul) April 6, 2016 Further reading This post wasn’t possible without the great writing and research of the following people: The Challenge Facing Mobile-First SaaS Companies – Tom Tunguz Mobile SaaS FTW – Point Nine Capital Ideas we’d like to invest in: Mobile-first SaaS Why mobile-first is outdated – Intercom

[INST] Why Desktop is still king for B2B SaaS [/INST]

A condensed history of ‘mobile’ in SaaS Generation 1 “Mobile is here! It’s the next big thing! Let’s cram our ‘desktop-class’ experience into a small form factor. (we didn’t fully understand mobile at this point).” Result: Turns out the experience was bad and nobody really used it. Oops. Generation 2 “Actually, it doesn’t make sense to fit our whole desktop experience into a small screen. Let’s break out small parts of the experience into smaller, isolated apps that make sense in a mobile workflow.” Result: Mobile SaaS is actually useful, when the use case makes sense in a mobile context and small, isolated workflows are broken out of the core product. Generation 3 (AKA Mobile SaaS Nirvana) “Actually, it doesn’t make sense to think about mobile apps and devices as separate entities. When customers subscribe to our service, they expect an experience that works well in the places where it makes sense for them to use it.” Result: Companies and services are born that move on from the distinction between devices, towards ‘experience-first’ products that deliver value for customers across a range of screens, devices and platforms. If I ‘turn on’ a service, I seamlessly experience the benefits of that service wherever it’s valuable for me to do so. “Mobile-first” is how many of us envision working in the future. So why do we all still sit at desks with laptops? Barriers between us and Mobile SaaS Nirvana App stores, onboarding friction Let’s face it, downloading an app to your device has become somewhat of a pain. When compared to simply following a link to a web app, you have to open the app store, wait for the store page to load, hit the Download button, and wait for your device to download a ton of assets (half of which you probably don’t even need for your specific device and use-case), then put the home screen icon in a sensible place. App discovery sucks The App Store is stale. Of the millions of apps available on both the iOS and Android platforms, how many of those do you think are actually discoverable? Despite Google’s efforts to include app listings in its search product, and Apple’s efforts to surface App Store results from things like Spotlight searches, it’s not getting any easier to actually find that amazing app you’ll probably love. Somewhere behind this screen are over 1.5 million apps. Hmm, better get started… Privacy, data laws Privacy is the current hot topic in the tech universe. I would guess that in the next few years, there will emerge a greater awareness of data privacy in general, as big stories (such as FBI vs. Apple) hit the mainstream news. People are going to care about their privacy. The unfortunate truth is that to offer a service that is truly device or platform agnostic, you’re going to have to track people across a number of platforms and devices. This doesn’t come without concerns. Services are reactive (require user effort) rather than proactive Most SaaS products today are entirely reactive. That is to say, they exist as tools which you can go and access to get information about an aspect of your business, and maybe carry out a task related to your business. Sure, they’re effective at doing their job, but a truly platform-agnostic service will not be able to rely on the user remembering to log in and check the state-of-play. People are increasingly strained for time and attention in this age, so services must adapt to be more proactive for the user. If there’s an opportunity to tweak my marketing automation process, don’t wait for me to log in and see it — notify me! The end-user is rarely the buyer (in Enterprise), so acquisition on mobile app stores is somewhat difficult compared to consumer. The person who installs your Enterprise SaaS app on their phone is likely not the same person who can make the decision to use ‘SaaS Product X’ across their business. This presents a set of problems around both discovery and acquisition, particularly in the constrained walled garden of the App Store. Apple’s support for subscription billing is poor If you want a smooth purchase and onboarding experience, it makes sense to make use of the native payment infrastructure that the platform provides. The problem with this? Handling subscription billing on iOS is not a nice experience, for the vendor or the user. And good luck getting any data out of Apple’s platform, or using a 3rd party analytics tool! This is why most apps have gone down the one-off micro-transaction route as a solution for monetization. The majority of work is still done in the office – people try to keep their work time from leaking into personal life. The smartphone (and other mobile devices) are still inherently personal devices. They own highly personal interactions with people close to you, and they’re completely geared towards a single user. People are often reluctant to mix their work and personal life, therefore introducing an enterprise app to their personal smartphone doesn’t feel right. And who wants to have 2 separate smartphones in their pockets? Mobile devices, despite what Apple tells you, are still primarily used for consumption rather than creation. Despite shiny videos of artists and architects using their shiny new iPad Pro, and writers tapping away on their cramped bluetooth keyboard accessory, these devices still have problems as pure productivity platforms. In the workflow of a Content Marketer for example, there would be tasks you’d struggle to complete without falling back to that trusty MacBook. Which leaves us with mobile devices which are only ever an accompaniment to a “full computer”. How Apple wants you to be productive in the future. But should we refer to this a “Mobile” experience? (Source: apple.com) There are too many barriers for an incremental solution We’ll never move beyond these barriers unless the industry undergoes a fundamental change to the way in which we’re thinking about devices and platforms. Our current way of thinking imposes somewhat artificial limitations on our success in building cloud-based products and services, but the platforms also need to evolve beyond the narrow view they adopt today. As SaaS vendors, we can drive this forwards by changing the way we think about solutions: We need to stop thinking in terms of ‘mobile’ and ‘desktop’. Don’t fear — this rather radical way of thinking has already been suggested and is picking up some momentum in some more forward-thinking technology businesses… Our current way of thinking imposes artificial limitations on our success in building cloud-based products. Tweet this quote ‘Mobile’ is dead, long live ‘multiple screen sizes’ For some time now, thought leaders on the topics of user experience, design and product have put forward the following notion: Stop thinking about ‘devices’ and instead simply consider each consumer device as a ‘screen’, where the user interacts with services. And instead of ‘mobile’ as a platform, simply focus on different screen sizes and which types of screens are relevant to your service. The latest episode of the Inside Intercom podcast sees Chris Messina, Uber’s Developer Experience Lead discuss this exact concept, as well as using the Jobs To Be Done framework for desigining features in a device-agnostic way: Even Android’s design chief Matias Duarte told us to give up our obsession with ‘mobile’, as a platform, and instead focus on experiences which span across multiple platforms: “Mobile was a meaningful distinction from what people did, when it was extremely constrained… [in terms of computing power, bandwidth etc.]” “For most people, just about any experience you can imagine can be meaningfully expressed on any screen size.” “We need to stop thinking of mobile as a distinct category… you should put energy into the screens where people’s eyeballs are at.” If you find this intriguing, I highly recommend watching the full interview with Matias below: If I had to highlight one takeaway from the above debate – one that’s relevant for B2B SaaS businesses thinking about mobile – it would be this: Put your energy into screens where people’s eyeballs are. Or, to elaborate: Put energy into screens where your customer’s eyeballs are, when they’re encountering the problems that your product solves. If they only need your solution when they’re sat in the office, build for desktop screens If they need quick updates and alerts when they’re on the go, build something for small screens If they need something that’s constantly on display to provide monitoring, build for large screens Unboxing small ‘workflows’ from a SaaS solution into different screens A number of B2B companies are already thinking more on the level of taking small parts of their solution – the ones that make sense on a small screen – and offering a mobile version of them. Intercom’s iOS app gives you the ability to respond to users on the go – allowing you to maintain an exceptional customer experience. Mailchimp allows you to quickly check the performance of a campaign when you’re away from your desk. Of course, you can’t compose and design a new campaign in their app – but why would you? Buffer understands that you want to be able to queue some great content, whenever and wherever you find it. That means having a presence on mobile. ChartMogul offers an experience for the desktop, where the vast majority of revenue analysis and reporting is done today: Geckoboard is also offering LARGE screen experiences, because that’s a key use case for their solution: source: geckoboard.com If we look more towards the consumer space, there are some companies which truly live and breathe the notion of “existing anywhere that’s relevant to the user”. Take Uber, for example. I can order an uber from most connected devices that I use every day. I can tap my Apple Watch and a car will arrive within minutes. I can shout at my Amazon Echo to order me an Uber – and that doesn’t have a screen! Uber even has a presence on platforms that don’t use screens at all. But the company knows how to craft an ‘omnipresent’ experience of its brand. Source: Amazon.com In summary Think of your SaaS product as an ‘experience’ that can be enabled for your customers when they subscribe. Think about allowing users to interact with your experience wherever it makes sense for them to do so. Build for platforms that are most prevalent during those points when it makes sense to interact with users. As a side-note, I should probably change the title of this post to “Why desktop-sized screen experiences are still king for SaaS”. But it didn’t quite have the same ring to it… NEW on the @ChartMogul blog: Why Desktop is still king for B2B SaaS https://t.co/lyfyutFJ3j #SaaS #Enterprise pic.twitter.com/BFBzm03OJM — ChartMogul (@ChartMogul) April 6, 2016 Further reading This post wasn’t possible without the great writing and research of the following people: The Challenge Facing Mobile-First SaaS Companies – Tom Tunguz Mobile SaaS FTW – Point Nine Capital Ideas we’d like to invest in: Mobile-first SaaS Why mobile-first is outdated – Intercom

<sys> [INST] Why Desktop is still king for B2B SaaS [/INST] A condensed history of ‘mobile’ in SaaS Generation 1 “Mobile is here! It’s the next big thing! Let’s cram our ‘desktop-class’ experience into a small form factor. (we didn’t fully understand mobile at this point).” Result: Turns out the experience was bad and nobody really used it. Oops. Generation 2 “Actually, it doesn’t make sense to fit our whole desktop experience into a small screen. Let’s break out small parts of the experience into smaller, isolated apps that make sense in a mobile workflow.” Result: Mobile SaaS is actually useful, when the use case makes sense in a mobile context and small, isolated workflows are broken out of the core product. Generation 3 (AKA Mobile SaaS Nirvana) “Actually, it doesn’t make sense to think about mobile apps and devices as separate entities. When customers subscribe to our service, they expect an experience that works well in the places where it makes sense for them to use it.” Result: Companies and services are born that move on from the distinction between devices, towards ‘experience-first’ products that deliver value for customers across a range of screens, devices and platforms. If I ‘turn on’ a service, I seamlessly experience the benefits of that service wherever it’s valuable for me to do so. “Mobile-first” is how many of us envision working in the future. So why do we all still sit at desks with laptops? Barriers between us and Mobile SaaS Nirvana App stores, onboarding friction Let’s face it, downloading an app to your device has become somewhat of a pain. When compared to simply following a link to a web app, you have to open the app store, wait for the store page to load, hit the Download button, and wait for your device to download a ton of assets (half of which you probably don’t even need for your specific device and use-case), then put the home screen icon in a sensible place. App discovery sucks The App Store is stale. Of the millions of apps available on both the iOS and Android platforms, how many of those do you think are actually discoverable? Despite Google’s efforts to include app listings in its search product, and Apple’s efforts to surface App Store results from things like Spotlight searches, it’s not getting any easier to actually find that amazing app you’ll probably love. Somewhere behind this screen are over 1.5 million apps. Hmm, better get started… Privacy, data laws Privacy is the current hot topic in the tech universe. I would guess that in the next few years, there will emerge a greater awareness of data privacy in general, as big stories (such as FBI vs. Apple) hit the mainstream news. People are going to care about their privacy. The unfortunate truth is that to offer a service that is truly device or platform agnostic, you’re going to have to track people across a number of platforms and devices. This doesn’t come without concerns. Services are reactive (require user effort) rather than proactive Most SaaS products today are entirely reactive. That is to say, they exist as tools which you can go and access to get information about an aspect of your business, and maybe carry out a task related to your business. Sure, they’re effective at doing their job, but a truly platform-agnostic service will not be able to rely on the user remembering to log in and check the state-of-play. People are increasingly strained for time and attention in this age, so services must adapt to be more proactive for the user. If there’s an opportunity to tweak my marketing automation process, don’t wait for me to log in and see it — notify me! The end-user is rarely the buyer (in Enterprise), so acquisition on mobile app stores is somewhat difficult compared to consumer. The person who installs your Enterprise SaaS app on their phone is likely not the same person who can make the decision to use ‘SaaS Product X’ across their business. This presents a set of problems around both discovery and acquisition, particularly in the constrained walled garden of the App Store. Apple’s support for subscription billing is poor If you want a smooth purchase and onboarding experience, it makes sense to make use of the native payment infrastructure that the platform provides. The problem with this? Handling subscription billing on iOS is not a nice experience, for the vendor or the user. And good luck getting any data out of Apple’s platform, or using a 3rd party analytics tool! This is why most apps have gone down the one-off micro-transaction route as a solution for monetization. The majority of work is still done in the office – people try to keep their work time from leaking into personal life. The smartphone (and other mobile devices) are still inherently personal devices. They own highly personal interactions with people close to you, and they’re completely geared towards a single user. People are often reluctant to mix their work and personal life, therefore introducing an enterprise app to their personal smartphone doesn’t feel right. And who wants to have 2 separate smartphones in their pockets? Mobile devices, despite what Apple tells you, are still primarily used for consumption rather than creation. Despite shiny videos of artists and architects using their shiny new iPad Pro, and writers tapping away on their cramped bluetooth keyboard accessory, these devices still have problems as pure productivity platforms. In the workflow of a Content Marketer for example, there would be tasks you’d struggle to complete without falling back to that trusty MacBook. Which leaves us with mobile devices which are only ever an accompaniment to a “full computer”. How Apple wants you to be productive in the future. But should we refer to this a “Mobile” experience? (Source: apple.com) There are too many barriers for an incremental solution We’ll never move beyond these barriers unless the industry undergoes a fundamental change to the way in which we’re thinking about devices and platforms. Our current way of thinking imposes somewhat artificial limitations on our success in building cloud-based products and services, but the platforms also need to evolve beyond the narrow view they adopt today. As SaaS vendors, we can drive this forwards by changing the way we think about solutions: We need to stop thinking in terms of ‘mobile’ and ‘desktop’. Don’t fear — this rather radical way of thinking has already been suggested and is picking up some momentum in some more forward-thinking technology businesses… Our current way of thinking imposes artificial limitations on our success in building cloud-based products. Tweet this quote ‘Mobile’ is dead, long live ‘multiple screen sizes’ For some time now, thought leaders on the topics of user experience, design and product have put forward the following notion: Stop thinking about ‘devices’ and instead simply consider each consumer device as a ‘screen’, where the user interacts with services. And instead of ‘mobile’ as a platform, simply focus on different screen sizes and which types of screens are relevant to your service. The latest episode of the Inside Intercom podcast sees Chris Messina, Uber’s Developer Experience Lead discuss this exact concept, as well as using the Jobs To Be Done framework for desigining features in a device-agnostic way: Even Android’s design chief Matias Duarte told us to give up our obsession with ‘mobile’, as a platform, and instead focus on experiences which span across multiple platforms: “Mobile was a meaningful distinction from what people did, when it was extremely constrained… [in terms of computing power, bandwidth etc.]” “For most people, just about any experience you can imagine can be meaningfully expressed on any screen size.” “We need to stop thinking of mobile as a distinct category… you should put energy into the screens where people’s eyeballs are at.” If you find this intriguing, I highly recommend watching the full interview with Matias below: If I had to highlight one takeaway from the above debate – one that’s relevant for B2B SaaS businesses thinking about mobile – it would be this: Put your energy into screens where people’s eyeballs are. Or, to elaborate: Put energy into screens where your customer’s eyeballs are, when they’re encountering the problems that your product solves. If they only need your solution when they’re sat in the office, build for desktop screens If they need quick updates and alerts when they’re on the go, build something for small screens If they need something that’s constantly on display to provide monitoring, build for large screens Unboxing small ‘workflows’ from a SaaS solution into different screens A number of B2B companies are already thinking more on the level of taking small parts of their solution – the ones that make sense on a small screen – and offering a mobile version of them. Intercom’s iOS app gives you the ability to respond to users on the go – allowing you to maintain an exceptional customer experience. Mailchimp allows you to quickly check the performance of a campaign when you’re away from your desk. Of course, you can’t compose and design a new campaign in their app – but why would you? Buffer understands that you want to be able to queue some great content, whenever and wherever you find it. That means having a presence on mobile. ChartMogul offers an experience for the desktop, where the vast majority of revenue analysis and reporting is done today: Geckoboard is also offering LARGE screen experiences, because that’s a key use case for their solution: source: geckoboard.com If we look more towards the consumer space, there are some companies which truly live and breathe the notion of “existing anywhere that’s relevant to the user”. Take Uber, for example. I can order an uber from most connected devices that I use every day. I can tap my Apple Watch and a car will arrive within minutes. I can shout at my Amazon Echo to order me an Uber – and that doesn’t have a screen! Uber even has a presence on platforms that don’t use screens at all. But the company knows how to craft an ‘omnipresent’ experience of its brand. Source: Amazon.com In summary Think of your SaaS product as an ‘experience’ that can be enabled for your customers when they subscribe. Think about allowing users to interact with your experience wherever it makes sense for them to do so. Build for platforms that are most prevalent during those points when it makes sense to interact with users. As a side-note, I should probably change the title of this post to “Why desktop-sized screen experiences are still king for SaaS”. But it didn’t quite have the same ring to it… NEW on the @ChartMogul blog: Why Desktop is still king for B2B SaaS https://t.co/lyfyutFJ3j #SaaS #Enterprise pic.twitter.com/BFBzm03OJM — ChartMogul (@ChartMogul) April 6, 2016 Further reading This post wasn’t possible without the great writing and research of the following people: The Challenge Facing Mobile-First SaaS Companies – Tom Tunguz Mobile SaaS FTW – Point Nine Capital Ideas we’d like to invest in: Mobile-first SaaS Why mobile-first is outdated – Intercom </sys

5 SaaSy Secrets to Growing Faster, Profitably. Even with such promise, the industry has witnessed the rise of a SaaS purgatory where once promising businesses fall flat. This is in part because while growing monthly recurring revenue (MRR) at 15% – 20% month over month is awesome, doing so with little regard for growth efficiency can result in expensive habits that become increasingly difficult to shake in subsequent years. Why is it hard for SaaS businesses to reach profitability? Their greatest strengths can also be their greatest weaknesses. SaaS businesses have high upfront acquisition costs reflecting, sales and marketing, research and development, hosting infrastructure and customer support. On the flipside, SaaS earns revenue over the lifetime of the customer. Therefore, SaaS is typically unprofitable for the first 12 – 24 months of operation and, in four years time, produces only a small fraction of revenue as profit. So how do we change the math, and unlock the value that SaaS promises? It’s simple; consider the following customer acquisition-related best practices I learned at online SaaS startups like Zendesk, Autopilot, and Codesion, companies that found efficient growth and eventual industry success. 1. Start Simple and Minimize User Friction Begin with a low friction offering, such as a freemium (e.g. Slack) or free trial-based (e.g. Zendesk) model. High initial costs will scare off potential customers, while a complex product requires expensive sales and support resources right off the bat (beware the SaaS graveyard). With a free or low-cost offerings, online SaaS opens the door to a broad range of first-time customer types, and is most successful when addressing a large, horizontal market of motivated users. Remember that 100 raving fans can be more valuable than 10,000 “users”. Insider tip: Early word of mouth success means 80% or more leads come from organic (non-paid) sources. B2B companies like Atlassian drive huge top of funnel interest with charitable cause campaigns – requesting a $10 donation to get credit card details, filter out unqualified users, and make upgrading easy. 2. Create “Aha” Customer Experiences Successful SaaS companies map out their customers’ buying and growth journeys, and obsess over how to optimize the experience. This in turn drives up platform adoption, conversion rates, and customer satisfaction. An “aha” onboarding experience that produces satisfied customers, as reflected by high Net Promoter Scores, will drive referrals, high conversion, and repeat purchases. So how do you this? One approach is to micro-analyze the hurdles and buying decisions faced by a user, then deliver personalized in-product, email, and direct touch points to guide a user through their journey towards “aha” or magic moments. As a rule of thumb, get a new user to an “aha” moment within 30 seconds of signing up, and you earn 3 more minutes of attention. Deliver another “aha” after 3 minutes to earn 30 minutes, and 30 minutes will earn you three days. Most SaaS trialists are emotionally bought in (or bail) after three days. Intuitive, attractive design decorated with on-voice copy (including infamous 404 pages) can help differentiate a SaaS business and drive social shares and forum chatter. Insider Tip: Focus on maximizing your activation rate, or the percentage of signups that lead to conversion. For example, Dropbox focuses on how to increase the percentage of daily users who achieve a certain number of file updates over the trailing 28 days, as they know heavy users tend to upgrade. 3. Build an Efficient, Light Touch Conversion Engine Early Build a repeatable, light-touch sales model to drive down customer acquisition costs while maximizing sales growth. Onboarding customers one at a time is lengthy and costly, so figure out what works manually, then automate those best practices to delight your small and large customers alike. Do so by creating “swimming lanes,” or clearly defined sales channels owned by distinct sales or success onboarding teams. Assign leads using automated routing rules, and evolve standard processes for each. Doing this from relatively early on will help focus on how to be efficient, and continuously drive down your company’s customer acquisition cost to lifetime value ratios. You’re winning if you have a customer payback periods of one to two years, plus you can drive this down further as you scale. Insider Tip: Online (self-service) approaches are best for customers paying up to $50 per month, semi-automated “1:Many” approaches (think Apple Genius bar) suit customers paying $50 – $250 per month. Meanwhile, customers who pay more than $250 will expect direct inside sales as well as customer success and account management. 4. Scale Fast With Automation and Real Time Dashboards Growing fast while ensuring that lead and customers aren’t slipping through the cracks is easier if your growing list of activities are automated, and you have up-to-the-minute insights. Use marketing automation to ensure all customers, large and small, benefit from your best practices, by delivering attractive blog posts, ebooks, videos, and emails, in personalized customer journeys. To codify your swimming lanes, define your automated journeys, and early-diagnose what’s working and what’s not, you’ll need to tune your customer engagement technology stack. The marketing stack for high-growth SaaS is (relatively) painless and inexpensive to develop today using best-of-breed tools. Start out by centralizing as much customer data as you can by connecting CRM to marketing automation. Add subscription billing, then incorporate in-product events (via Salesforce APIs or Segment) to personalize messages and early-diagnose conversion or churn signals. Integrate your business-intelligence software to combine usage, revenue, activity, and billing data into dashboards, enabling your teams to monitor and react in real-time. Insider Tip: Ask for company size (e.g. number of employees) on your signup form to automatically assign large company leads to direct sales and success reps, and small companies to self-service or 1:Many channels. This improves the customer experience by focusing time and expert “heavy touch” resources on the power users who need it most, while ensuring you can attain your efficiency goals. 5. Offset Cancellations through Upgrades While new monthly recurring revenue (MRR) is the lighter fluid that ignites a SaaS business, successful long-term growth comes from expanding existing customer MRR faster than cancellations occur. This is known as attaining “net negative churn,” which can be achieved in two ways. First, commit to continuously improving the customer experience by regularly measuring satisfaction levels with a Net Promoter Score (NPS) survey. Loyal customers are more likely to renew, expand, and refer friends. Second, SaaS pricing and packaging can make or break future growth. Whether your SaaS pricing strategy is based on multiple editions, users, or functionality, as customers grow and mature, seamlessly upselling them to higher level plans is critical to offseting cancellations. Doing so is easier if you hone a value-based pricing path that minimizes upgrade friction, reduces discount requests, and guards against competitor switching threats. Insider Tip: Aim to deliver a 10X increase in value for each doubling in price. For example, Zendesk customers pay a bit over double to upgrade from “Regular” to “Plus” plans, largely to access an advanced reporting package that can be worth far more to an organization’s management teams. Wrapping it all up While these techniques should come as no surprise, many SaaS companies still have yet to fully embrace them. By incorporating steps like: starting simple, creating “aha” moments, building a conversion engine, automating the customer journey, and offsetting cancellations through upgrades, a SaaS company can achieve high revenue growth, predictable performance indicators, and long-term profitability. This week’s guest post is from Guy Marion, CMO of Autopilot. Autopilot is marketing automation software that helps SaaS businesses automate the customer journey, visually. Check out Flight School, Autopilot’s recently released community training platform for marketers who want to grow faster online.

[INST] 5 SaaSy Secrets to Growing Faster, Profitably [/INST]

Even with such promise, the industry has witnessed the rise of a SaaS purgatory where once promising businesses fall flat. This is in part because while growing monthly recurring revenue (MRR) at 15% – 20% month over month is awesome, doing so with little regard for growth efficiency can result in expensive habits that become increasingly difficult to shake in subsequent years. Why is it hard for SaaS businesses to reach profitability? Their greatest strengths can also be their greatest weaknesses. SaaS businesses have high upfront acquisition costs reflecting, sales and marketing, research and development, hosting infrastructure and customer support. On the flipside, SaaS earns revenue over the lifetime of the customer. Therefore, SaaS is typically unprofitable for the first 12 – 24 months of operation and, in four years time, produces only a small fraction of revenue as profit. So how do we change the math, and unlock the value that SaaS promises? It’s simple; consider the following customer acquisition-related best practices I learned at online SaaS startups like Zendesk, Autopilot, and Codesion, companies that found efficient growth and eventual industry success. 1. Start Simple and Minimize User Friction Begin with a low friction offering, such as a freemium (e.g. Slack) or free trial-based (e.g. Zendesk) model. High initial costs will scare off potential customers, while a complex product requires expensive sales and support resources right off the bat (beware the SaaS graveyard). With a free or low-cost offerings, online SaaS opens the door to a broad range of first-time customer types, and is most successful when addressing a large, horizontal market of motivated users. Remember that 100 raving fans can be more valuable than 10,000 “users”. Insider tip: Early word of mouth success means 80% or more leads come from organic (non-paid) sources. B2B companies like Atlassian drive huge top of funnel interest with charitable cause campaigns – requesting a $10 donation to get credit card details, filter out unqualified users, and make upgrading easy. 2. Create “Aha” Customer Experiences Successful SaaS companies map out their customers’ buying and growth journeys, and obsess over how to optimize the experience. This in turn drives up platform adoption, conversion rates, and customer satisfaction. An “aha” onboarding experience that produces satisfied customers, as reflected by high Net Promoter Scores, will drive referrals, high conversion, and repeat purchases. So how do you this? One approach is to micro-analyze the hurdles and buying decisions faced by a user, then deliver personalized in-product, email, and direct touch points to guide a user through their journey towards “aha” or magic moments. As a rule of thumb, get a new user to an “aha” moment within 30 seconds of signing up, and you earn 3 more minutes of attention. Deliver another “aha” after 3 minutes to earn 30 minutes, and 30 minutes will earn you three days. Most SaaS trialists are emotionally bought in (or bail) after three days. Intuitive, attractive design decorated with on-voice copy (including infamous 404 pages) can help differentiate a SaaS business and drive social shares and forum chatter. Insider Tip: Focus on maximizing your activation rate, or the percentage of signups that lead to conversion. For example, Dropbox focuses on how to increase the percentage of daily users who achieve a certain number of file updates over the trailing 28 days, as they know heavy users tend to upgrade. 3. Build an Efficient, Light Touch Conversion Engine Early Build a repeatable, light-touch sales model to drive down customer acquisition costs while maximizing sales growth. Onboarding customers one at a time is lengthy and costly, so figure out what works manually, then automate those best practices to delight your small and large customers alike. Do so by creating “swimming lanes,” or clearly defined sales channels owned by distinct sales or success onboarding teams. Assign leads using automated routing rules, and evolve standard processes for each. Doing this from relatively early on will help focus on how to be efficient, and continuously drive down your company’s customer acquisition cost to lifetime value ratios. You’re winning if you have a customer payback periods of one to two years, plus you can drive this down further as you scale. Insider Tip: Online (self-service) approaches are best for customers paying up to $50 per month, semi-automated “1:Many” approaches (think Apple Genius bar) suit customers paying $50 – $250 per month. Meanwhile, customers who pay more than $250 will expect direct inside sales as well as customer success and account management. 4. Scale Fast With Automation and Real Time Dashboards Growing fast while ensuring that lead and customers aren’t slipping through the cracks is easier if your growing list of activities are automated, and you have up-to-the-minute insights. Use marketing automation to ensure all customers, large and small, benefit from your best practices, by delivering attractive blog posts, ebooks, videos, and emails, in personalized customer journeys. To codify your swimming lanes, define your automated journeys, and early-diagnose what’s working and what’s not, you’ll need to tune your customer engagement technology stack. The marketing stack for high-growth SaaS is (relatively) painless and inexpensive to develop today using best-of-breed tools. Start out by centralizing as much customer data as you can by connecting CRM to marketing automation. Add subscription billing, then incorporate in-product events (via Salesforce APIs or Segment) to personalize messages and early-diagnose conversion or churn signals. Integrate your business-intelligence software to combine usage, revenue, activity, and billing data into dashboards, enabling your teams to monitor and react in real-time. Insider Tip: Ask for company size (e.g. number of employees) on your signup form to automatically assign large company leads to direct sales and success reps, and small companies to self-service or 1:Many channels. This improves the customer experience by focusing time and expert “heavy touch” resources on the power users who need it most, while ensuring you can attain your efficiency goals. 5. Offset Cancellations through Upgrades While new monthly recurring revenue (MRR) is the lighter fluid that ignites a SaaS business, successful long-term growth comes from expanding existing customer MRR faster than cancellations occur. This is known as attaining “net negative churn,” which can be achieved in two ways. First, commit to continuously improving the customer experience by regularly measuring satisfaction levels with a Net Promoter Score (NPS) survey. Loyal customers are more likely to renew, expand, and refer friends. Second, SaaS pricing and packaging can make or break future growth. Whether your SaaS pricing strategy is based on multiple editions, users, or functionality, as customers grow and mature, seamlessly upselling them to higher level plans is critical to offseting cancellations. Doing so is easier if you hone a value-based pricing path that minimizes upgrade friction, reduces discount requests, and guards against competitor switching threats. Insider Tip: Aim to deliver a 10X increase in value for each doubling in price. For example, Zendesk customers pay a bit over double to upgrade from “Regular” to “Plus” plans, largely to access an advanced reporting package that can be worth far more to an organization’s management teams. Wrapping it all up While these techniques should come as no surprise, many SaaS companies still have yet to fully embrace them. By incorporating steps like: starting simple, creating “aha” moments, building a conversion engine, automating the customer journey, and offsetting cancellations through upgrades, a SaaS company can achieve high revenue growth, predictable performance indicators, and long-term profitability. This week’s guest post is from Guy Marion, CMO of Autopilot. Autopilot is marketing automation software that helps SaaS businesses automate the customer journey, visually. Check out Flight School, Autopilot’s recently released community training platform for marketers who want to grow faster online.

<sys> [INST] 5 SaaSy Secrets to Growing Faster, Profitably [/INST] Even with such promise, the industry has witnessed the rise of a SaaS purgatory where once promising businesses fall flat. This is in part because while growing monthly recurring revenue (MRR) at 15% – 20% month over month is awesome, doing so with little regard for growth efficiency can result in expensive habits that become increasingly difficult to shake in subsequent years. Why is it hard for SaaS businesses to reach profitability? Their greatest strengths can also be their greatest weaknesses. SaaS businesses have high upfront acquisition costs reflecting, sales and marketing, research and development, hosting infrastructure and customer support. On the flipside, SaaS earns revenue over the lifetime of the customer. Therefore, SaaS is typically unprofitable for the first 12 – 24 months of operation and, in four years time, produces only a small fraction of revenue as profit. So how do we change the math, and unlock the value that SaaS promises? It’s simple; consider the following customer acquisition-related best practices I learned at online SaaS startups like Zendesk, Autopilot, and Codesion, companies that found efficient growth and eventual industry success. 1. Start Simple and Minimize User Friction Begin with a low friction offering, such as a freemium (e.g. Slack) or free trial-based (e.g. Zendesk) model. High initial costs will scare off potential customers, while a complex product requires expensive sales and support resources right off the bat (beware the SaaS graveyard). With a free or low-cost offerings, online SaaS opens the door to a broad range of first-time customer types, and is most successful when addressing a large, horizontal market of motivated users. Remember that 100 raving fans can be more valuable than 10,000 “users”. Insider tip: Early word of mouth success means 80% or more leads come from organic (non-paid) sources. B2B companies like Atlassian drive huge top of funnel interest with charitable cause campaigns – requesting a $10 donation to get credit card details, filter out unqualified users, and make upgrading easy. 2. Create “Aha” Customer Experiences Successful SaaS companies map out their customers’ buying and growth journeys, and obsess over how to optimize the experience. This in turn drives up platform adoption, conversion rates, and customer satisfaction. An “aha” onboarding experience that produces satisfied customers, as reflected by high Net Promoter Scores, will drive referrals, high conversion, and repeat purchases. So how do you this? One approach is to micro-analyze the hurdles and buying decisions faced by a user, then deliver personalized in-product, email, and direct touch points to guide a user through their journey towards “aha” or magic moments. As a rule of thumb, get a new user to an “aha” moment within 30 seconds of signing up, and you earn 3 more minutes of attention. Deliver another “aha” after 3 minutes to earn 30 minutes, and 30 minutes will earn you three days. Most SaaS trialists are emotionally bought in (or bail) after three days. Intuitive, attractive design decorated with on-voice copy (including infamous 404 pages) can help differentiate a SaaS business and drive social shares and forum chatter. Insider Tip: Focus on maximizing your activation rate, or the percentage of signups that lead to conversion. For example, Dropbox focuses on how to increase the percentage of daily users who achieve a certain number of file updates over the trailing 28 days, as they know heavy users tend to upgrade. 3. Build an Efficient, Light Touch Conversion Engine Early Build a repeatable, light-touch sales model to drive down customer acquisition costs while maximizing sales growth. Onboarding customers one at a time is lengthy and costly, so figure out what works manually, then automate those best practices to delight your small and large customers alike. Do so by creating “swimming lanes,” or clearly defined sales channels owned by distinct sales or success onboarding teams. Assign leads using automated routing rules, and evolve standard processes for each. Doing this from relatively early on will help focus on how to be efficient, and continuously drive down your company’s customer acquisition cost to lifetime value ratios. You’re winning if you have a customer payback periods of one to two years, plus you can drive this down further as you scale. Insider Tip: Online (self-service) approaches are best for customers paying up to $50 per month, semi-automated “1:Many” approaches (think Apple Genius bar) suit customers paying $50 – $250 per month. Meanwhile, customers who pay more than $250 will expect direct inside sales as well as customer success and account management. 4. Scale Fast With Automation and Real Time Dashboards Growing fast while ensuring that lead and customers aren’t slipping through the cracks is easier if your growing list of activities are automated, and you have up-to-the-minute insights. Use marketing automation to ensure all customers, large and small, benefit from your best practices, by delivering attractive blog posts, ebooks, videos, and emails, in personalized customer journeys. To codify your swimming lanes, define your automated journeys, and early-diagnose what’s working and what’s not, you’ll need to tune your customer engagement technology stack. The marketing stack for high-growth SaaS is (relatively) painless and inexpensive to develop today using best-of-breed tools. Start out by centralizing as much customer data as you can by connecting CRM to marketing automation. Add subscription billing, then incorporate in-product events (via Salesforce APIs or Segment) to personalize messages and early-diagnose conversion or churn signals. Integrate your business-intelligence software to combine usage, revenue, activity, and billing data into dashboards, enabling your teams to monitor and react in real-time. Insider Tip: Ask for company size (e.g. number of employees) on your signup form to automatically assign large company leads to direct sales and success reps, and small companies to self-service or 1:Many channels. This improves the customer experience by focusing time and expert “heavy touch” resources on the power users who need it most, while ensuring you can attain your efficiency goals. 5. Offset Cancellations through Upgrades While new monthly recurring revenue (MRR) is the lighter fluid that ignites a SaaS business, successful long-term growth comes from expanding existing customer MRR faster than cancellations occur. This is known as attaining “net negative churn,” which can be achieved in two ways. First, commit to continuously improving the customer experience by regularly measuring satisfaction levels with a Net Promoter Score (NPS) survey. Loyal customers are more likely to renew, expand, and refer friends. Second, SaaS pricing and packaging can make or break future growth. Whether your SaaS pricing strategy is based on multiple editions, users, or functionality, as customers grow and mature, seamlessly upselling them to higher level plans is critical to offseting cancellations. Doing so is easier if you hone a value-based pricing path that minimizes upgrade friction, reduces discount requests, and guards against competitor switching threats. Insider Tip: Aim to deliver a 10X increase in value for each doubling in price. For example, Zendesk customers pay a bit over double to upgrade from “Regular” to “Plus” plans, largely to access an advanced reporting package that can be worth far more to an organization’s management teams. Wrapping it all up While these techniques should come as no surprise, many SaaS companies still have yet to fully embrace them. By incorporating steps like: starting simple, creating “aha” moments, building a conversion engine, automating the customer journey, and offsetting cancellations through upgrades, a SaaS company can achieve high revenue growth, predictable performance indicators, and long-term profitability. This week’s guest post is from Guy Marion, CMO of Autopilot. Autopilot is marketing automation software that helps SaaS businesses automate the customer journey, visually. Check out Flight School, Autopilot’s recently released community training platform for marketers who want to grow faster online. </sys

The first-timer’s guide to SaaStr Annual. What is SaaStr Annual 2016? It will be the biggest gathering of senior SaaS professionals in history! Well…maybe…Dreamforce is bigger but it’s also more diluted, SaaStr is purer SaaS. You can read my notes from attending last year’s SaaStr Annual – the quick version is that the event was so good we decided to sponsor this year and fly five of the team out from Berlin. What to prepare and bring with you Make sure to download the event app, you can connect with other attendees and view the agenda. Plan which talks you want to see – the speaker lineup is fantastic and there will be many great talks – but you can’t see everything (there are two tracks). You can bookmark talks in the event app. Bring a notepad, there’s so much knowledge and tips being shared, I ended up with pages of valuable notes last year…and this time it’s three days instead of one! Bring a LOT of business cards – you’ll be meeting with founders, investors, existing customers, potential customers, potential partners, come prepared. If you’re flying in from overseas it’s a good idea to arrive a couple of days early to adjust to the time difference (we will be flying in from Berlin on the 6th of Feb so we’ll have a couple full days to adjust to the 9 hour time difference). There’s no point to fly in and then be yawning throughout the event. Make sure you remember to charge your phone overnight, being at an event all day with a dead iPhone is just frustrating. What to expect when you arrive Last year the event wasn’t small, but it wasn’t a ‘huge’ event, this year I’m guessing it’s going to be around three times bigger – so it will feel big. Last year the event was basically split into two parts: upstairs there were talks going on and downstairs there was the booths, networking and food area. The venue map hasn’t been released for this year yet, but by the looks of things there will be tonnes more sponsor booths, one megastage and one smaller stage. Do not speak at SaaStr Annual if u have stage fright pic.twitter.com/3aY3S1LHaX — Jason M. Lemkin (@jasonlk) December 8, 2015 It’s mostly senior (and very senior) SaaS execs attending (decision makers) – so deals get done, partnerships are made knowledge is shared – we met and eventually closed two of our largest customers to date at the conference last year. The networking is second to none if you’re in SaaS. Other stuff going on in the same week The official party is on the Wednesday evening. There’s also some unofficial/invite-only parties and meetups going on during the week. ChartMogul will be hosting customer meetup on the Friday evening (12th Feb) – invites didn’t go out yet. If you need a Time-out If three days of non-stop SaaS awesomeness wears you out and you need a breath of air, I recommend taking a stroll through Huntington Park which is just across the road from the Masonic Center and next to the beautiful Grace Cathedral.

[INST] The first-timer’s guide to SaaStr Annual [/INST]

What is SaaStr Annual 2016? It will be the biggest gathering of senior SaaS professionals in history! Well…maybe…Dreamforce is bigger but it’s also more diluted, SaaStr is purer SaaS. You can read my notes from attending last year’s SaaStr Annual – the quick version is that the event was so good we decided to sponsor this year and fly five of the team out from Berlin. What to prepare and bring with you Make sure to download the event app, you can connect with other attendees and view the agenda. Plan which talks you want to see – the speaker lineup is fantastic and there will be many great talks – but you can’t see everything (there are two tracks). You can bookmark talks in the event app. Bring a notepad, there’s so much knowledge and tips being shared, I ended up with pages of valuable notes last year…and this time it’s three days instead of one! Bring a LOT of business cards – you’ll be meeting with founders, investors, existing customers, potential customers, potential partners, come prepared. If you’re flying in from overseas it’s a good idea to arrive a couple of days early to adjust to the time difference (we will be flying in from Berlin on the 6th of Feb so we’ll have a couple full days to adjust to the 9 hour time difference). There’s no point to fly in and then be yawning throughout the event. Make sure you remember to charge your phone overnight, being at an event all day with a dead iPhone is just frustrating. What to expect when you arrive Last year the event wasn’t small, but it wasn’t a ‘huge’ event, this year I’m guessing it’s going to be around three times bigger – so it will feel big. Last year the event was basically split into two parts: upstairs there were talks going on and downstairs there was the booths, networking and food area. The venue map hasn’t been released for this year yet, but by the looks of things there will be tonnes more sponsor booths, one megastage and one smaller stage. Do not speak at SaaStr Annual if u have stage fright pic.twitter.com/3aY3S1LHaX — Jason M. Lemkin (@jasonlk) December 8, 2015 It’s mostly senior (and very senior) SaaS execs attending (decision makers) – so deals get done, partnerships are made knowledge is shared – we met and eventually closed two of our largest customers to date at the conference last year. The networking is second to none if you’re in SaaS. Other stuff going on in the same week The official party is on the Wednesday evening. There’s also some unofficial/invite-only parties and meetups going on during the week. ChartMogul will be hosting customer meetup on the Friday evening (12th Feb) – invites didn’t go out yet. If you need a Time-out If three days of non-stop SaaS awesomeness wears you out and you need a breath of air, I recommend taking a stroll through Huntington Park which is just across the road from the Masonic Center and next to the beautiful Grace Cathedral.

<sys> [INST] The first-timer’s guide to SaaStr Annual [/INST] What is SaaStr Annual 2016? It will be the biggest gathering of senior SaaS professionals in history! Well…maybe…Dreamforce is bigger but it’s also more diluted, SaaStr is purer SaaS. You can read my notes from attending last year’s SaaStr Annual – the quick version is that the event was so good we decided to sponsor this year and fly five of the team out from Berlin. What to prepare and bring with you Make sure to download the event app, you can connect with other attendees and view the agenda. Plan which talks you want to see – the speaker lineup is fantastic and there will be many great talks – but you can’t see everything (there are two tracks). You can bookmark talks in the event app. Bring a notepad, there’s so much knowledge and tips being shared, I ended up with pages of valuable notes last year…and this time it’s three days instead of one! Bring a LOT of business cards – you’ll be meeting with founders, investors, existing customers, potential customers, potential partners, come prepared. If you’re flying in from overseas it’s a good idea to arrive a couple of days early to adjust to the time difference (we will be flying in from Berlin on the 6th of Feb so we’ll have a couple full days to adjust to the 9 hour time difference). There’s no point to fly in and then be yawning throughout the event. Make sure you remember to charge your phone overnight, being at an event all day with a dead iPhone is just frustrating. What to expect when you arrive Last year the event wasn’t small, but it wasn’t a ‘huge’ event, this year I’m guessing it’s going to be around three times bigger – so it will feel big. Last year the event was basically split into two parts: upstairs there were talks going on and downstairs there was the booths, networking and food area. The venue map hasn’t been released for this year yet, but by the looks of things there will be tonnes more sponsor booths, one megastage and one smaller stage. Do not speak at SaaStr Annual if u have stage fright pic.twitter.com/3aY3S1LHaX — Jason M. Lemkin (@jasonlk) December 8, 2015 It’s mostly senior (and very senior) SaaS execs attending (decision makers) – so deals get done, partnerships are made knowledge is shared – we met and eventually closed two of our largest customers to date at the conference last year. The networking is second to none if you’re in SaaS. Other stuff going on in the same week The official party is on the Wednesday evening. There’s also some unofficial/invite-only parties and meetups going on during the week. ChartMogul will be hosting customer meetup on the Friday evening (12th Feb) – invites didn’t go out yet. If you need a Time-out If three days of non-stop SaaS awesomeness wears you out and you need a breath of air, I recommend taking a stroll through Huntington Park which is just across the road from the Masonic Center and next to the beautiful Grace Cathedral. </sys

New Feature: Improved Accuracy of MRR Movements Thanks to Smart Activity Classification. We’re excited to announce the release of Smart Activity Classification! Smart Activity Classification is a seemingly small, but significant feature that allows you to get more meaningful (and arguably more accurate) MRR movements in ChartMogul. Smart Activity Classification allows you to choose how subscription events that happen at the same time (or close together) are classified. For example, with Smart Activity Classification turned ON a new subscription purchase followed by an upgrade shortly afterwards can be treated as part of the same “newbiz event” rather than a newbiz movement followed by an MRR expansion movement. This also means if you create a multi-plan/multi-component subscription (in a system like Stripe or Recurly that supports such compound subscriptions) ChartMogul will classify these as a single newbiz event (with multiple components) or a single churn event (instead of a contraction movement followed instantly by a churn event). How will Smart Activity Classification impact my charts? Smart Activity Classification affects the MRR movements chart and the breakdown of MRR movements in the data tables. When enabled, the number of MRR movements contributing to New business MRR, Churn MRR and Reactivation MRR is likely to increase, whereas the movements contributing to Expansion and Contraction MRR will decrease by the same amount. Ready to take it for a spin? Smart Activity Classification can be turned on under Admin > Data Settings > Subscription analytics > Smart Activity Classification. By default, the time window is set to 60 minutes (so a NewBiz event followed by an upgrade 55 minutes later will be counted as part of the same NewBiz event), but you can change this to suit your company’s needs. Find out more in our Help Center.

[INST] New Feature: Improved Accuracy of MRR Movements Thanks to Smart Activity Classification [/INST]

We’re excited to announce the release of Smart Activity Classification! Smart Activity Classification is a seemingly small, but significant feature that allows you to get more meaningful (and arguably more accurate) MRR movements in ChartMogul. Smart Activity Classification allows you to choose how subscription events that happen at the same time (or close together) are classified. For example, with Smart Activity Classification turned ON a new subscription purchase followed by an upgrade shortly afterwards can be treated as part of the same “newbiz event” rather than a newbiz movement followed by an MRR expansion movement. This also means if you create a multi-plan/multi-component subscription (in a system like Stripe or Recurly that supports such compound subscriptions) ChartMogul will classify these as a single newbiz event (with multiple components) or a single churn event (instead of a contraction movement followed instantly by a churn event). How will Smart Activity Classification impact my charts? Smart Activity Classification affects the MRR movements chart and the breakdown of MRR movements in the data tables. When enabled, the number of MRR movements contributing to New business MRR, Churn MRR and Reactivation MRR is likely to increase, whereas the movements contributing to Expansion and Contraction MRR will decrease by the same amount. Ready to take it for a spin? Smart Activity Classification can be turned on under Admin > Data Settings > Subscription analytics > Smart Activity Classification. By default, the time window is set to 60 minutes (so a NewBiz event followed by an upgrade 55 minutes later will be counted as part of the same NewBiz event), but you can change this to suit your company’s needs. Find out more in our Help Center.

<sys> [INST] New Feature: Improved Accuracy of MRR Movements Thanks to Smart Activity Classification [/INST] We’re excited to announce the release of Smart Activity Classification! Smart Activity Classification is a seemingly small, but significant feature that allows you to get more meaningful (and arguably more accurate) MRR movements in ChartMogul. Smart Activity Classification allows you to choose how subscription events that happen at the same time (or close together) are classified. For example, with Smart Activity Classification turned ON a new subscription purchase followed by an upgrade shortly afterwards can be treated as part of the same “newbiz event” rather than a newbiz movement followed by an MRR expansion movement. This also means if you create a multi-plan/multi-component subscription (in a system like Stripe or Recurly that supports such compound subscriptions) ChartMogul will classify these as a single newbiz event (with multiple components) or a single churn event (instead of a contraction movement followed instantly by a churn event). How will Smart Activity Classification impact my charts? Smart Activity Classification affects the MRR movements chart and the breakdown of MRR movements in the data tables. When enabled, the number of MRR movements contributing to New business MRR, Churn MRR and Reactivation MRR is likely to increase, whereas the movements contributing to Expansion and Contraction MRR will decrease by the same amount. Ready to take it for a spin? Smart Activity Classification can be turned on under Admin > Data Settings > Subscription analytics > Smart Activity Classification. By default, the time window is set to 60 minutes (so a NewBiz event followed by an upgrade 55 minutes later will be counted as part of the same NewBiz event), but you can change this to suit your company’s needs. Find out more in our Help Center. </sys

Blinkist CEO Holger Seim on growing a B2C SaaS business. SaaS Open Mic 05 – Blinkist Berlin has seen some extremely promising growth in Series A investments over the last 6-12 months, and a number of businesses are emerging as a new generation of role models for the startup scene in Germany’s capital, with strong VC backing for SaaS businesses, from the likes of Point Nine Capital (investors in ChartMogul) and others. Blinkist is certainly part of this strong growth, having recently announceed $4M investment round headed by Greycroft Partners. Having grown to over 30,000 subscribers in 2015, they’re well positioned to make even more headway in 2016. Blinkist offers 15-minute condensed versions of popular non-fiction books, both in eBook or audio formats. I sat down with Holger Seim, Blinkist’s co-founder and CEO, to chat about his strategy for growing their consumer SaaS business, and how they got to the position they’re in today. Listen to the full episode below from SoundCloud, subscribe in iTunes or search for SaaS Open Mic in your preferred podcast app.

[INST] Blinkist CEO Holger Seim on growing a B2C SaaS business [/INST]

SaaS Open Mic 05 – Blinkist Berlin has seen some extremely promising growth in Series A investments over the last 6-12 months, and a number of businesses are emerging as a new generation of role models for the startup scene in Germany’s capital, with strong VC backing for SaaS businesses, from the likes of Point Nine Capital (investors in ChartMogul) and others. Blinkist is certainly part of this strong growth, having recently announceed $4M investment round headed by Greycroft Partners. Having grown to over 30,000 subscribers in 2015, they’re well positioned to make even more headway in 2016. Blinkist offers 15-minute condensed versions of popular non-fiction books, both in eBook or audio formats. I sat down with Holger Seim, Blinkist’s co-founder and CEO, to chat about his strategy for growing their consumer SaaS business, and how they got to the position they’re in today. Listen to the full episode below from SoundCloud, subscribe in iTunes or search for SaaS Open Mic in your preferred podcast app.

<sys> [INST] Blinkist CEO Holger Seim on growing a B2C SaaS business [/INST] SaaS Open Mic 05 – Blinkist Berlin has seen some extremely promising growth in Series A investments over the last 6-12 months, and a number of businesses are emerging as a new generation of role models for the startup scene in Germany’s capital, with strong VC backing for SaaS businesses, from the likes of Point Nine Capital (investors in ChartMogul) and others. Blinkist is certainly part of this strong growth, having recently announceed $4M investment round headed by Greycroft Partners. Having grown to over 30,000 subscribers in 2015, they’re well positioned to make even more headway in 2016. Blinkist offers 15-minute condensed versions of popular non-fiction books, both in eBook or audio formats. I sat down with Holger Seim, Blinkist’s co-founder and CEO, to chat about his strategy for growing their consumer SaaS business, and how they got to the position they’re in today. Listen to the full episode below from SoundCloud, subscribe in iTunes or search for SaaS Open Mic in your preferred podcast app. </sys

Introducing our SaaS Metrics Refresher course. We’ve been writing on the topic of data-driven SaaS growth since 2015. Right from that first SaaS Metrics Cheat Sheet, our vision was — and remains to this day — that metrics and data are central to sustainable, measured growth. We saw a large barrier in learning and understanding concepts in this space, and we set out to fix that through smart, useful content. Fast forward more than three years and ChartMogul carries a large body of content that simplifies many of the complex concepts in SaaS — from LTV modelling to churn prevention — using our blog, resources and podcast. But one challenge still remains: How can we effectively bring people up to speed on SaaS metrics and provide an easy path to entry for those who are new to the space? Today we’re launching SaaS Metrics Refresher to do exactly this — provide an accessible way for people to get to speed on these critical business concepts. You can register for the course here: Based on conversations with SaaS experts During my time at ChartMogul I’ve been incredibly lucky to have long conversations with some of the smartest thinkers in SaaS. These are the people building the future of the industry and sweating the details on what matters. There’s a lot of insights locked inside these SaaS Open Mic episodes, so to build this course we’ve revisited every one of them (more than 20 hours of content!) What you can expect The structure of the course is simple: once you sign up, you’ll get: Each of the 10 lessons delivered each Tuesday via email Guided further reading and downloadable resources to accompany the course Exclusive Insights and snippets from thought leaders in SaaS Answers to your own SaaS questions, which you’ll be able to submit the throughout the course Course outline Here’s what you can look forward to in the coming weeks: Why SaaS Metrics? – We’ll look at why metrics should be at the core of every SaaS business, and introduce you to the course. Recurring Revenue – It’s all about that MRR. Or should we use ARR? Let’s look at different ways revenue can be measured Churn – Churn kills SaaS businesses. Measuring and understanding churn is the first step toward reducing it. Expansion – Great SaaS businesses have healthy revenue expansion by design. Here’s how you can achieve this. Lifetime Value – The most controversial metric in SaaS, LTV promises so much. But can it truly be useful? Cohort Analysis – Learn how you can understand customer behavior across their lifetime and identify trends. Revenue Recognition – MRR is not recognized revenue! Learn how to differentiate and recognize revenue correctly in a SaaS business. Data Literacy – Here’s how you can ensure that the whole team is equipped to work with metrics and data. Segmentation – Segmentation turns average metrics into actionable ones. Discover the power of targeted customer segments. Wrapping it all up – You made it! Let’s summarize everything you’ve learned and take away some key action points. Enroll in the course today Thanks to everyone who contributed their insights to the course, including Gia Laudi of the excellent Forget The Funnel. We’ve all been there: You’ve probably read most of the “definitive” content on SaaS metrics and growth before. But it hasn’t been delivered in a structured way. There are elements which you could do with revisiting but there’s no high-level guidance, and most of the information is fragmented and buried in blog posts. With SaaS Metrics Refresher, we’re changing that and giving you and your colleagues the opportunity to go through a structured, accessible course suitable for anyone who plays a part in helping their subscription business grow. Drop your email here today, and make sure you’re a part of this from the beginning. See you in the first lesson! Bonus: Get a head start with these two resources If you’re itching to get started right away, here are some recommended resources to peruse in your own time: Read up on the basics with The Ultimate SaaS Metrics Cheat Sheet Our OG cheat sheet covers all of the essential metrics a SaaS business needs to understand and accelerate growth. It’s since been improved and expanded, and is used by SaaS business leaders worldwide! Get it here Understand the state of play from SaaS OG Christoph Janz Listen to a live discussion between ChartMogul CEO Nick Franklin and Point Nine Capital’s Christoph Janz. This serves as a great entry point for anyone looking to build or grow a SaaS business and covers everything from metrics to moat-building. Listen to the discussion (or read the takeaways)

[INST] Introducing our SaaS Metrics Refresher course [/INST]

We’ve been writing on the topic of data-driven SaaS growth since 2015. Right from that first SaaS Metrics Cheat Sheet, our vision was — and remains to this day — that metrics and data are central to sustainable, measured growth. We saw a large barrier in learning and understanding concepts in this space, and we set out to fix that through smart, useful content. Fast forward more than three years and ChartMogul carries a large body of content that simplifies many of the complex concepts in SaaS — from LTV modelling to churn prevention — using our blog, resources and podcast. But one challenge still remains: How can we effectively bring people up to speed on SaaS metrics and provide an easy path to entry for those who are new to the space? Today we’re launching SaaS Metrics Refresher to do exactly this — provide an accessible way for people to get to speed on these critical business concepts. You can register for the course here: Based on conversations with SaaS experts During my time at ChartMogul I’ve been incredibly lucky to have long conversations with some of the smartest thinkers in SaaS. These are the people building the future of the industry and sweating the details on what matters. There’s a lot of insights locked inside these SaaS Open Mic episodes, so to build this course we’ve revisited every one of them (more than 20 hours of content!) What you can expect The structure of the course is simple: once you sign up, you’ll get: Each of the 10 lessons delivered each Tuesday via email Guided further reading and downloadable resources to accompany the course Exclusive Insights and snippets from thought leaders in SaaS Answers to your own SaaS questions, which you’ll be able to submit the throughout the course Course outline Here’s what you can look forward to in the coming weeks: Why SaaS Metrics? – We’ll look at why metrics should be at the core of every SaaS business, and introduce you to the course. Recurring Revenue – It’s all about that MRR. Or should we use ARR? Let’s look at different ways revenue can be measured Churn – Churn kills SaaS businesses. Measuring and understanding churn is the first step toward reducing it. Expansion – Great SaaS businesses have healthy revenue expansion by design. Here’s how you can achieve this. Lifetime Value – The most controversial metric in SaaS, LTV promises so much. But can it truly be useful? Cohort Analysis – Learn how you can understand customer behavior across their lifetime and identify trends. Revenue Recognition – MRR is not recognized revenue! Learn how to differentiate and recognize revenue correctly in a SaaS business. Data Literacy – Here’s how you can ensure that the whole team is equipped to work with metrics and data. Segmentation – Segmentation turns average metrics into actionable ones. Discover the power of targeted customer segments. Wrapping it all up – You made it! Let’s summarize everything you’ve learned and take away some key action points. Enroll in the course today Thanks to everyone who contributed their insights to the course, including Gia Laudi of the excellent Forget The Funnel. We’ve all been there: You’ve probably read most of the “definitive” content on SaaS metrics and growth before. But it hasn’t been delivered in a structured way. There are elements which you could do with revisiting but there’s no high-level guidance, and most of the information is fragmented and buried in blog posts. With SaaS Metrics Refresher, we’re changing that and giving you and your colleagues the opportunity to go through a structured, accessible course suitable for anyone who plays a part in helping their subscription business grow. Drop your email here today, and make sure you’re a part of this from the beginning. See you in the first lesson! Bonus: Get a head start with these two resources If you’re itching to get started right away, here are some recommended resources to peruse in your own time: Read up on the basics with The Ultimate SaaS Metrics Cheat Sheet Our OG cheat sheet covers all of the essential metrics a SaaS business needs to understand and accelerate growth. It’s since been improved and expanded, and is used by SaaS business leaders worldwide! Get it here Understand the state of play from SaaS OG Christoph Janz Listen to a live discussion between ChartMogul CEO Nick Franklin and Point Nine Capital’s Christoph Janz. This serves as a great entry point for anyone looking to build or grow a SaaS business and covers everything from metrics to moat-building. Listen to the discussion (or read the takeaways)

<sys> [INST] Introducing our SaaS Metrics Refresher course [/INST] We’ve been writing on the topic of data-driven SaaS growth since 2015. Right from that first SaaS Metrics Cheat Sheet, our vision was — and remains to this day — that metrics and data are central to sustainable, measured growth. We saw a large barrier in learning and understanding concepts in this space, and we set out to fix that through smart, useful content. Fast forward more than three years and ChartMogul carries a large body of content that simplifies many of the complex concepts in SaaS — from LTV modelling to churn prevention — using our blog, resources and podcast. But one challenge still remains: How can we effectively bring people up to speed on SaaS metrics and provide an easy path to entry for those who are new to the space? Today we’re launching SaaS Metrics Refresher to do exactly this — provide an accessible way for people to get to speed on these critical business concepts. You can register for the course here: Based on conversations with SaaS experts During my time at ChartMogul I’ve been incredibly lucky to have long conversations with some of the smartest thinkers in SaaS. These are the people building the future of the industry and sweating the details on what matters. There’s a lot of insights locked inside these SaaS Open Mic episodes, so to build this course we’ve revisited every one of them (more than 20 hours of content!) What you can expect The structure of the course is simple: once you sign up, you’ll get: Each of the 10 lessons delivered each Tuesday via email Guided further reading and downloadable resources to accompany the course Exclusive Insights and snippets from thought leaders in SaaS Answers to your own SaaS questions, which you’ll be able to submit the throughout the course Course outline Here’s what you can look forward to in the coming weeks: Why SaaS Metrics? – We’ll look at why metrics should be at the core of every SaaS business, and introduce you to the course. Recurring Revenue – It’s all about that MRR. Or should we use ARR? Let’s look at different ways revenue can be measured Churn – Churn kills SaaS businesses. Measuring and understanding churn is the first step toward reducing it. Expansion – Great SaaS businesses have healthy revenue expansion by design. Here’s how you can achieve this. Lifetime Value – The most controversial metric in SaaS, LTV promises so much. But can it truly be useful? Cohort Analysis – Learn how you can understand customer behavior across their lifetime and identify trends. Revenue Recognition – MRR is not recognized revenue! Learn how to differentiate and recognize revenue correctly in a SaaS business. Data Literacy – Here’s how you can ensure that the whole team is equipped to work with metrics and data. Segmentation – Segmentation turns average metrics into actionable ones. Discover the power of targeted customer segments. Wrapping it all up – You made it! Let’s summarize everything you’ve learned and take away some key action points. Enroll in the course today Thanks to everyone who contributed their insights to the course, including Gia Laudi of the excellent Forget The Funnel. We’ve all been there: You’ve probably read most of the “definitive” content on SaaS metrics and growth before. But it hasn’t been delivered in a structured way. There are elements which you could do with revisiting but there’s no high-level guidance, and most of the information is fragmented and buried in blog posts. With SaaS Metrics Refresher, we’re changing that and giving you and your colleagues the opportunity to go through a structured, accessible course suitable for anyone who plays a part in helping their subscription business grow. Drop your email here today, and make sure you’re a part of this from the beginning. See you in the first lesson! Bonus: Get a head start with these two resources If you’re itching to get started right away, here are some recommended resources to peruse in your own time: Read up on the basics with The Ultimate SaaS Metrics Cheat Sheet Our OG cheat sheet covers all of the essential metrics a SaaS business needs to understand and accelerate growth. It’s since been improved and expanded, and is used by SaaS business leaders worldwide! Get it here Understand the state of play from SaaS OG Christoph Janz Listen to a live discussion between ChartMogul CEO Nick Franklin and Point Nine Capital’s Christoph Janz. This serves as a great entry point for anyone looking to build or grow a SaaS business and covers everything from metrics to moat-building. Listen to the discussion (or read the takeaways) </sys

New visualizations – bar charts, stacked charts & more!. Ever since reading Tomasz Tunguz’s article about negative churn I fell in love with the layer cake cohort charts – it’s the clearest way I’ve seen to visualise the impact of churn and account expansion over time. We’ve been waiting for the right time to build this capability into ChartMogul, and today I’m excited to announce that it’s available. What’s new? Bar charts! Any chart can now be switched between a line or a bar chart. You can also change any of the charts on your Overview dashboard to bar charts, just go into “Edit mode” on the Overview screen (Admin only) > click “Edit” on a chart and you will see the option to choose the chart type. Stacked charts! When you’re comparing more than one segment you can toggle ‘stacked’ mode. This is the killer feature that makes it possible to build layer cake style cohort analyses. This report was built by creating a separate segment for each quarter with a filter like this: “Customer since – between – 1st Jan 2015 and 31st March 2015”, etc. There’s one more thing… You can also change the order your segments are rendered on the chart using drag and drop It can also just be fun! This analysis of average sale price doesn’t give us any new insights, but it looks pretty. I hope you enjoy this new capability within ChartMogul, if you have any questions or feedback please shoot us an email to [email protected].

[INST] New visualizations – bar charts, stacked charts & more! [/INST]

Ever since reading Tomasz Tunguz’s article about negative churn I fell in love with the layer cake cohort charts – it’s the clearest way I’ve seen to visualise the impact of churn and account expansion over time. We’ve been waiting for the right time to build this capability into ChartMogul, and today I’m excited to announce that it’s available. What’s new? Bar charts! Any chart can now be switched between a line or a bar chart. You can also change any of the charts on your Overview dashboard to bar charts, just go into “Edit mode” on the Overview screen (Admin only) > click “Edit” on a chart and you will see the option to choose the chart type. Stacked charts! When you’re comparing more than one segment you can toggle ‘stacked’ mode. This is the killer feature that makes it possible to build layer cake style cohort analyses. This report was built by creating a separate segment for each quarter with a filter like this: “Customer since – between – 1st Jan 2015 and 31st March 2015”, etc. There’s one more thing… You can also change the order your segments are rendered on the chart using drag and drop It can also just be fun! This analysis of average sale price doesn’t give us any new insights, but it looks pretty. I hope you enjoy this new capability within ChartMogul, if you have any questions or feedback please shoot us an email to [email protected].

<sys> [INST] New visualizations – bar charts, stacked charts & more! [/INST] Ever since reading Tomasz Tunguz’s article about negative churn I fell in love with the layer cake cohort charts – it’s the clearest way I’ve seen to visualise the impact of churn and account expansion over time. We’ve been waiting for the right time to build this capability into ChartMogul, and today I’m excited to announce that it’s available. What’s new? Bar charts! Any chart can now be switched between a line or a bar chart. You can also change any of the charts on your Overview dashboard to bar charts, just go into “Edit mode” on the Overview screen (Admin only) > click “Edit” on a chart and you will see the option to choose the chart type. Stacked charts! When you’re comparing more than one segment you can toggle ‘stacked’ mode. This is the killer feature that makes it possible to build layer cake style cohort analyses. This report was built by creating a separate segment for each quarter with a filter like this: “Customer since – between – 1st Jan 2015 and 31st March 2015”, etc. There’s one more thing… You can also change the order your segments are rendered on the chart using drag and drop It can also just be fun! This analysis of average sale price doesn’t give us any new insights, but it looks pretty. I hope you enjoy this new capability within ChartMogul, if you have any questions or feedback please shoot us an email to [email protected]. </sys

How to Run Sales in the Era of Product-Led Growth. Product-led growth (PLG) has been used by some of the most successful SaaS companies for years, but it’s only in recent months that the wider community is starting to take notice of it. Slack and Calendly are just some of the examples of products that have leveraged PLG to grow their user base rapidly and now others are looking for ways to profit from the same approach. Like in every other trend, the things that work — work only at the beginning. And those who adopt it early on will have the biggest benefit from them. For that reason, it’s very important for all software and subscription companies to be early adopters. Product-led growth brings you product-qualified leads, which are the best fit for your business — since they’ve already tried your product and know how to take advantage of it. Because of that, your sales department will work with warmer leads who are more interested in your product than sales-qualified or marketing-qualified leads and will be able to close more deals. In this article, I’ll help you understand how to organize your sales effort in a PLG-led company and how to turn your product and your sales team into a well-oiled machine that generates new highly-engaged customers. In the following sections, we’ll cover: What Product-Led Growth is and why it’s important for your business What’s the difference between the product-led, sales-led, and marketing-led approaches What are PLG sales and why you should consider using them How to do PLG sales So let’s get started. What is Product-Led Growth (PLG)? Product-led Growth isn’t a new concept, but it has become really popular in the last few years because of the rising levels of competition in SaaS. PLG is the process of using your product as the main acquisition and growth channel. Tweet this quote The product-led model is suitable for all SaaS businesses. It helps them to showcase their product first before even discussing the upgrade or premium accounts with their trial users. In other words, the purpose of Product-Led growth is to enable trial/free users to see the immediate product value and make them develop a habit around using the product so eventually, they end up buying it. Here are the key aspects of the PLG strategy: Your product is the key channel to market to your prospects The product should have a viral effect and prompt your users to invite and share The user experience should be your biggest focus You should capture product usage activity in order to drive personalized onboarding and experiences User segmentation and personalized in-app experiences are playing an important role in PLG Don’t show paywalls before the customer has seen the value Why it’s important to use a PLG model If you’re a SaaS or any other company that has a subscription-driven pricing model, you should definitely consider making PLG your main driver of growth. There are several reasons why: The market is huge and customers are demanding more and more each day: The number of direct/indirect competitors you have is getting bigger every single day — many businesses are struggling with differentiating themselves in the market with their website and product positioning. Giving potential customers an opportunity to try the product before buying it is essential. Customer Acquisition Cost (CAC) is increasing: Even if this trend isn’t affecting your business, PLG can help you reduce your CAC since your trial-to-paid conversion rates are going to be better and you will spend less time on manually closing deals (if your product and user experiences are good enough). It improves your customer lifetime value (LTV): If you acquire your customers with the help of the PLG model, it means that they saw a value in your product and that they’re going to become long-term users. In other words — they can’t live without your product. Take Slack for example. Slack becomes so embedded in teams, that they have no choice but to start paying for it — changing the vendor and doing the same things over and over again will cost them time, money, and nerves. As you can see, Product-led growth can bring you a lot of benefits. Before we actually see how to do PLG sales, let’s see what are the main differences between the product-led, sales-led, and marketing-led approaches. What are the differences between product-led, sales-led, and marketing-led approaches? In order to understand how to do product-led sales, we first need to know what are the differences between the various approaches. Product-led vs Sales-led approach The sales-led sales approach is mainly focused on cold-emailing, outreach, and cold-calling, while the product-led sales approach is using the product as the main acquisition channel. Further reading: Startup Sales: Everything You Need to Know About Building Your First Sales Team In other words, sales teams are qualifying sales leads by different lead scoring aspects (like the team size, industry, title of the lead, and a bunch of other factors), while the product-qualified leads are qualified by different in-app experiences and events. For example, if your product requires installing some part of the code on the user’s website, the user might be considered as a product qualified lead if they install the code. So, what are the differences between product-led and sales-led approach? The product-led approach shows the value, while sales-led approach tells the value: in other words, product-led sales are leading users towards the meaningful outcome, such as sending the first email campaign to a number of subscribers in MailChimp. On the other hand, sales-led approach explains the benefits of your product — but doesn’t show them. Product-led growth is more cost-efficient: the important difference between these two approaches is in its cost, especially because CAC is going up over time. The product-led approach helps you to attain cost-efficiency. For example, since with the PLG model users are onboarding themselves, you’re reducing the sales cycle and time-to-value. Or, you have lower costs to serve and bigger revenue per employee, since you initially don’t need too many employees. Product-led vs Marketing-led approach There are a couple of differences between product-led and marketing-led approach, but that doesn’t mean that they can’t coexist with each other. Even more, it means that they should fill the gaps they have. Let’s look at the differences: Product-led and Marketing-led approaches are measuring different KPIs: most marketing-led companies are great at acquisition, but not so good at figuring out their performance in activation and retention. Even more, only 44% of SaaS companies defined user activation as the KPI for their product. Not using activation and retention metrics means that you’re not paying attention to your churn — which is a deadly metric for your company. Because of this, both approaches must co-exist and work smoothly with each other. Product-led companies spend less money on marketing: If you’re using only marketing-led approach, you will always need to spend more money to buy attention. If you’re in the scaling phase, you can’t dedicate too much money on marketing activities and ads. In other words, bringing the user inside your product with marketing and onboarding and retaining them with the product-led approach will save you a fortune. As we can see, all three methods must coexist if we want to grow our companies effectively. Marketing-led and sales-led approaches are there to bring the people inside our product. But what happens after it, and whether the user will decide to buy or not to buy your product, mostly depends on the product-led approach. That’s the reason why PLG sales are important for your business. So, let’s see how to do PLG sales. How to do PLG sales The PLG sales cycle begins from the moment when your trial user lands on your product. That’s the moment when you need to be able to track their moves through your product. As I already mentioned, PLG sales are based on user experiences and in-app events. So, PLG sales are product-first. Having good UX/UI is mandatory. The ultimate goal of PLG sales is to motivate your users to use your product, unleash the value as soon as possible, and convert your users to power-users (i.e. users who can’t live without your product — just like Slack did). From prospect to power customer, your users face various conversion points in their journey. Specifically for that reason, you need to unleash the “aha!” moment from the user’s first-run through your product. What’s the “aha!” moment mostly depends on your product. For example, for Slack, the “aha!” moment is when the users start to chat with each other. It’s important to separate the “aha!” moment from user activation. “aha!” moment is the moment when the users perceive the value of your product/feature. user activation is the moment when your users feel the value of your product/feature. It means that your user already experienced the benefits. In other words, for the user to completely adapt your product, use it and start paying for it, he will need to go through different activation points and “aha!s”. Most products contain multiple activation points. All of this sounds nice in theory, but how can you do this? Let’s see it, step-by-step. 1. Set your PLG sales KPIs Before you even start doing your PLG sales, you will need to set-up your KPIs. As I already mentioned, the most important KPIs in the PLG approach are: the “aha!” moment for product/feature the user activation moment for product/feature Product-qualified leads (PQL) There are a couple of ways how to decide what your “aha!” moments and user activation points are. One of them is common sense. It’s good for early-stage products who don’t have users. But as soon as you get your first users (or if you already have some), you will need to monitor their activities and see what’s the most important thing that diversifies those who end up paying for your product form those who don’t. For example, the team behind Ghost, an online blogging platform, realized that those who change the theme of the blog are more likely to upgrade to premium accounts. That’s the reason why Ghost created a checklist with everything that users need to do in order to see the full potential of Ghost. Depending on the complexity of your product, you can have one or 10 different “aha!” moments and user activation points. It’s important for you to show the biggest value as soon as possible (i.e. making your users engage with your core features at the beginning, and only after that with secondary ones). So, the user onboarding curve before your trial/free users completely adopt your product and start paying for it might look like this: The user onboarding flow can be thought of as a series of “aha!” moments. As you can see, for the best results in PLG Sales, you will need to know exactly what your most important KPIs are. If you don’t, you won’t be able to do PLG sales in the right way. Without defined KPIs, you won’t be able to go to the second step. Pro tip: for the best activation and adoption rates, I recommend creating personalized and context-driven user onboarding flows. In this way, you will be able to activate more users and do more PLG sales deals. 2. Qualify your users at the trial phase User qualification at the trial phase is important. It helps you to divide those who might be interested in buying your product from those who won’t be. Those who are interested in buying your product are called product-qualified leads or PQLs. The best way to qualify your users is by monitoring their app sessions and the things they’re doing inside your product. Let’s look at an example with a live chat software and 14-day trial. In this case, we might have three different groups of people: Group A: Trial users who didn’t install your live chat code snippet into their websites a couple of days after they registered. Group B: Trial users who installed the code Group C: Trial users who installed the code and who are chatting with their website visitors regularly. We can assume that people in Group B reached the “aha” moment, but weren’t motivated to go any further (or they didn’t have the resources for that). On the other hand, the people in group C reached both the “aha” moment and the user activation point. Perhaps we can even assume that they adopted the product in their organization and workflows. Those can definitely be considered as PQLs. So, in this case, you want to do the following: Focus your PLG sales efforts on closing deals with the people in Group C Motivate the people in Group B to move further (so they can be in Group C) or try to understand why are they not using their live chat (perhaps they don’t have website visitors) Remind the people in Group A to install their live chat code so they can see the value. If they don’t, they’re not qualified for PLG sales As you can see, for an in-depth understanding of your PLG sales cycle, it’s important to qualify your trial users and identify PQLs. At Userpilot, qualifying our trial users and identifying PQLs helped us improve our MRR by more than 50% in the first months. We consider an Activated user someone who installed our JS code in their app and who’s ready to improve their product experiences and user onboarding flows: Using filtering to identify activated users. We’re also monitoring new users by the number of experiences they create. The more product experiences user created in the trial phase, the more qualified they are (i.e. they can be considered as a PQL). Tracking experiences created allows Userpilot to identify the most-engaged PQLs. There are also PQLs that installed the code but didn’t create any product experiences — those require more attention (we consider them a Partially activated user). Some PQLs might require a slight nudge even if they are a good fit for the product. For this kind of “partially activate” PQLs, we’re usually sending personalized “demo videos” explaining them some particular features (that are great for their use case) and benefits they can get: A personalized video is a great way to engage a cool lead. In the end, we have PQLs who are qualified for our product, but who haven’t subscribed or paid yet. We’re also sending them videos and personally contacting them in order to figure out what’s missing and what they need to sign up. This analysis allows Userpilot to focus on those leads who are most likely to convert. 3. Track your users’ in-app events This one is similar to the step above, but with a little twist. Sometimes, it’s not just important to track KPIs (“aha!” moments and user activation points), but also the users’ in-app events. For example, if you have a checklist in your product, did the user complete your checklist fully, partially, or not at all? It’s clear that the users who fully completed your checklists might be potential customers, and that those who completed them partially require some additional motivation to do that. The same can be done with other in-app events as well, such as the number of features users are using, or the number of team members they invited. The more addicted trial users are to your product, the greater the chances will be that they\ will convert to paying customers. Tweet this quote Take Slack’s example: The more team members a Slack user invites, the more who become engaged with the product. The more people in a Slack team has, the faster they will reach the 10,000-message limit where they are exposed to the premium account. Tracking different users’ in-app events will help you to better qualify people who are interested in buying your product. Pro Tip: I use exit intent popup slide out if the user hasn’t done any key events in-app to give them a demo: 4. Show the value as soon as possible in the first run A first run is the moment when trial users “walk through your product” for the first time. It’s the period of a couple of minutes after they signed up. User attention is pretty low. A lot of things can distract us and make us see the value too late. If this is the case, then your trial-to-paid conversions will be pretty low. That’s the reason why we need to show value to our users as soon as possible. The first step to do this is to reduce the friction inside your product. So instead of the dozens of different UI elements, you should show only the most important ones that are crucial for the users in the first-run. Every additional element adds friction for users. Try to reduce the number of steps users need to do before seeing the value. For example, if you have a product that requires extensive setup, try to reduce the number of features you want to show at the beginning. If your product is integration-based, then make your users integrate one or two most important things in the first-run that can have a direct impact on their business. The sooner your trial users see the value of your product, the more motivated they will be to move forward. 5. Re-engage with those who are not qualified It’s important to re-engage with those who are not qualified (yet). People sometimes just need follow-ups. If they didn’t activate certain events inside your product, it doesn’t need to mean that they’re not interested in it. Life happens. There can be different reasons why they stopped using your product after some time or immediately after signing up. Perhaps they were distracted so they forgot. People like those need additional motivation. That’s the reason why it is important to touch base with them. For example, at Userpilot, we’re sending this email to the users who are not engaged enough with our product: Emails can play a vital role in Product-led growth It’s important to keep in mind that boring and dull emails and user onboarding won’t have any impact. That’s the reason why you need to implement a human element and personalization in it (if you want to achieve the highest ROI from PLG sales as possible). You can also offer a discount to those who didn’t purchase a premium plan after the trial. 6. Don’t forget about in-app marketing In-app marketing plays an important role in PLG sales and user adoption. There are various things and spaces in your product you can use to market your new features or product changes that can make your trial users addicted to your product, improve your retention and reduce churn. For example, Drift uses the empty space on their “sign-up” page to market their important features: Your product can be a perfect location to advertise new features and events I love how Drift show social proof & human element on their signup page and in-app. You can do your in-app marketing with progress bars, checklists, different UI elements (such as tooltips, modals, slide-outs) or even with your changelog — as Slack does: Slack announces new features within the product Watch your trial-to-paid conversions grow As we could see, the purpose of PLG sales is to convert your trial users to paid ones automatically and on a scalable way through your product. Because of that, understanding their in-app behaviours and monitoring their steps through your product is crucial for delivering the right user experiences and sending the most appropriate sales messages. If you carefully implement everything we talked about above, you will probably be able to double your trial-to-paid conversions just like we did after we implemented the free trial process. About the Author Aazar Ali Shad is the VP of Growth & Sales at Userpilot, and has more than 5 years of SaaS experience. He is currently helping 500+ SaaS companies improve user onboarding and increase product adoption.

[INST] How to Run Sales in the Era of Product-Led Growth [/INST]

Product-led growth (PLG) has been used by some of the most successful SaaS companies for years, but it’s only in recent months that the wider community is starting to take notice of it. Slack and Calendly are just some of the examples of products that have leveraged PLG to grow their user base rapidly and now others are looking for ways to profit from the same approach. Like in every other trend, the things that work — work only at the beginning. And those who adopt it early on will have the biggest benefit from them. For that reason, it’s very important for all software and subscription companies to be early adopters. Product-led growth brings you product-qualified leads, which are the best fit for your business — since they’ve already tried your product and know how to take advantage of it. Because of that, your sales department will work with warmer leads who are more interested in your product than sales-qualified or marketing-qualified leads and will be able to close more deals. In this article, I’ll help you understand how to organize your sales effort in a PLG-led company and how to turn your product and your sales team into a well-oiled machine that generates new highly-engaged customers. In the following sections, we’ll cover: What Product-Led Growth is and why it’s important for your business What’s the difference between the product-led, sales-led, and marketing-led approaches What are PLG sales and why you should consider using them How to do PLG sales So let’s get started. What is Product-Led Growth (PLG)? Product-led Growth isn’t a new concept, but it has become really popular in the last few years because of the rising levels of competition in SaaS. PLG is the process of using your product as the main acquisition and growth channel. Tweet this quote The product-led model is suitable for all SaaS businesses. It helps them to showcase their product first before even discussing the upgrade or premium accounts with their trial users. In other words, the purpose of Product-Led growth is to enable trial/free users to see the immediate product value and make them develop a habit around using the product so eventually, they end up buying it. Here are the key aspects of the PLG strategy: Your product is the key channel to market to your prospects The product should have a viral effect and prompt your users to invite and share The user experience should be your biggest focus You should capture product usage activity in order to drive personalized onboarding and experiences User segmentation and personalized in-app experiences are playing an important role in PLG Don’t show paywalls before the customer has seen the value Why it’s important to use a PLG model If you’re a SaaS or any other company that has a subscription-driven pricing model, you should definitely consider making PLG your main driver of growth. There are several reasons why: The market is huge and customers are demanding more and more each day: The number of direct/indirect competitors you have is getting bigger every single day — many businesses are struggling with differentiating themselves in the market with their website and product positioning. Giving potential customers an opportunity to try the product before buying it is essential. Customer Acquisition Cost (CAC) is increasing: Even if this trend isn’t affecting your business, PLG can help you reduce your CAC since your trial-to-paid conversion rates are going to be better and you will spend less time on manually closing deals (if your product and user experiences are good enough). It improves your customer lifetime value (LTV): If you acquire your customers with the help of the PLG model, it means that they saw a value in your product and that they’re going to become long-term users. In other words — they can’t live without your product. Take Slack for example. Slack becomes so embedded in teams, that they have no choice but to start paying for it — changing the vendor and doing the same things over and over again will cost them time, money, and nerves. As you can see, Product-led growth can bring you a lot of benefits. Before we actually see how to do PLG sales, let’s see what are the main differences between the product-led, sales-led, and marketing-led approaches. What are the differences between product-led, sales-led, and marketing-led approaches? In order to understand how to do product-led sales, we first need to know what are the differences between the various approaches. Product-led vs Sales-led approach The sales-led sales approach is mainly focused on cold-emailing, outreach, and cold-calling, while the product-led sales approach is using the product as the main acquisition channel. Further reading: Startup Sales: Everything You Need to Know About Building Your First Sales Team In other words, sales teams are qualifying sales leads by different lead scoring aspects (like the team size, industry, title of the lead, and a bunch of other factors), while the product-qualified leads are qualified by different in-app experiences and events. For example, if your product requires installing some part of the code on the user’s website, the user might be considered as a product qualified lead if they install the code. So, what are the differences between product-led and sales-led approach? The product-led approach shows the value, while sales-led approach tells the value: in other words, product-led sales are leading users towards the meaningful outcome, such as sending the first email campaign to a number of subscribers in MailChimp. On the other hand, sales-led approach explains the benefits of your product — but doesn’t show them. Product-led growth is more cost-efficient: the important difference between these two approaches is in its cost, especially because CAC is going up over time. The product-led approach helps you to attain cost-efficiency. For example, since with the PLG model users are onboarding themselves, you’re reducing the sales cycle and time-to-value. Or, you have lower costs to serve and bigger revenue per employee, since you initially don’t need too many employees. Product-led vs Marketing-led approach There are a couple of differences between product-led and marketing-led approach, but that doesn’t mean that they can’t coexist with each other. Even more, it means that they should fill the gaps they have. Let’s look at the differences: Product-led and Marketing-led approaches are measuring different KPIs: most marketing-led companies are great at acquisition, but not so good at figuring out their performance in activation and retention. Even more, only 44% of SaaS companies defined user activation as the KPI for their product. Not using activation and retention metrics means that you’re not paying attention to your churn — which is a deadly metric for your company. Because of this, both approaches must co-exist and work smoothly with each other. Product-led companies spend less money on marketing: If you’re using only marketing-led approach, you will always need to spend more money to buy attention. If you’re in the scaling phase, you can’t dedicate too much money on marketing activities and ads. In other words, bringing the user inside your product with marketing and onboarding and retaining them with the product-led approach will save you a fortune. As we can see, all three methods must coexist if we want to grow our companies effectively. Marketing-led and sales-led approaches are there to bring the people inside our product. But what happens after it, and whether the user will decide to buy or not to buy your product, mostly depends on the product-led approach. That’s the reason why PLG sales are important for your business. So, let’s see how to do PLG sales. How to do PLG sales The PLG sales cycle begins from the moment when your trial user lands on your product. That’s the moment when you need to be able to track their moves through your product. As I already mentioned, PLG sales are based on user experiences and in-app events. So, PLG sales are product-first. Having good UX/UI is mandatory. The ultimate goal of PLG sales is to motivate your users to use your product, unleash the value as soon as possible, and convert your users to power-users (i.e. users who can’t live without your product — just like Slack did). From prospect to power customer, your users face various conversion points in their journey. Specifically for that reason, you need to unleash the “aha!” moment from the user’s first-run through your product. What’s the “aha!” moment mostly depends on your product. For example, for Slack, the “aha!” moment is when the users start to chat with each other. It’s important to separate the “aha!” moment from user activation. “aha!” moment is the moment when the users perceive the value of your product/feature. user activation is the moment when your users feel the value of your product/feature. It means that your user already experienced the benefits. In other words, for the user to completely adapt your product, use it and start paying for it, he will need to go through different activation points and “aha!s”. Most products contain multiple activation points. All of this sounds nice in theory, but how can you do this? Let’s see it, step-by-step. 1. Set your PLG sales KPIs Before you even start doing your PLG sales, you will need to set-up your KPIs. As I already mentioned, the most important KPIs in the PLG approach are: the “aha!” moment for product/feature the user activation moment for product/feature Product-qualified leads (PQL) There are a couple of ways how to decide what your “aha!” moments and user activation points are. One of them is common sense. It’s good for early-stage products who don’t have users. But as soon as you get your first users (or if you already have some), you will need to monitor their activities and see what’s the most important thing that diversifies those who end up paying for your product form those who don’t. For example, the team behind Ghost, an online blogging platform, realized that those who change the theme of the blog are more likely to upgrade to premium accounts. That’s the reason why Ghost created a checklist with everything that users need to do in order to see the full potential of Ghost. Depending on the complexity of your product, you can have one or 10 different “aha!” moments and user activation points. It’s important for you to show the biggest value as soon as possible (i.e. making your users engage with your core features at the beginning, and only after that with secondary ones). So, the user onboarding curve before your trial/free users completely adopt your product and start paying for it might look like this: The user onboarding flow can be thought of as a series of “aha!” moments. As you can see, for the best results in PLG Sales, you will need to know exactly what your most important KPIs are. If you don’t, you won’t be able to do PLG sales in the right way. Without defined KPIs, you won’t be able to go to the second step. Pro tip: for the best activation and adoption rates, I recommend creating personalized and context-driven user onboarding flows. In this way, you will be able to activate more users and do more PLG sales deals. 2. Qualify your users at the trial phase User qualification at the trial phase is important. It helps you to divide those who might be interested in buying your product from those who won’t be. Those who are interested in buying your product are called product-qualified leads or PQLs. The best way to qualify your users is by monitoring their app sessions and the things they’re doing inside your product. Let’s look at an example with a live chat software and 14-day trial. In this case, we might have three different groups of people: Group A: Trial users who didn’t install your live chat code snippet into their websites a couple of days after they registered. Group B: Trial users who installed the code Group C: Trial users who installed the code and who are chatting with their website visitors regularly. We can assume that people in Group B reached the “aha” moment, but weren’t motivated to go any further (or they didn’t have the resources for that). On the other hand, the people in group C reached both the “aha” moment and the user activation point. Perhaps we can even assume that they adopted the product in their organization and workflows. Those can definitely be considered as PQLs. So, in this case, you want to do the following: Focus your PLG sales efforts on closing deals with the people in Group C Motivate the people in Group B to move further (so they can be in Group C) or try to understand why are they not using their live chat (perhaps they don’t have website visitors) Remind the people in Group A to install their live chat code so they can see the value. If they don’t, they’re not qualified for PLG sales As you can see, for an in-depth understanding of your PLG sales cycle, it’s important to qualify your trial users and identify PQLs. At Userpilot, qualifying our trial users and identifying PQLs helped us improve our MRR by more than 50% in the first months. We consider an Activated user someone who installed our JS code in their app and who’s ready to improve their product experiences and user onboarding flows: Using filtering to identify activated users. We’re also monitoring new users by the number of experiences they create. The more product experiences user created in the trial phase, the more qualified they are (i.e. they can be considered as a PQL). Tracking experiences created allows Userpilot to identify the most-engaged PQLs. There are also PQLs that installed the code but didn’t create any product experiences — those require more attention (we consider them a Partially activated user). Some PQLs might require a slight nudge even if they are a good fit for the product. For this kind of “partially activate” PQLs, we’re usually sending personalized “demo videos” explaining them some particular features (that are great for their use case) and benefits they can get: A personalized video is a great way to engage a cool lead. In the end, we have PQLs who are qualified for our product, but who haven’t subscribed or paid yet. We’re also sending them videos and personally contacting them in order to figure out what’s missing and what they need to sign up. This analysis allows Userpilot to focus on those leads who are most likely to convert. 3. Track your users’ in-app events This one is similar to the step above, but with a little twist. Sometimes, it’s not just important to track KPIs (“aha!” moments and user activation points), but also the users’ in-app events. For example, if you have a checklist in your product, did the user complete your checklist fully, partially, or not at all? It’s clear that the users who fully completed your checklists might be potential customers, and that those who completed them partially require some additional motivation to do that. The same can be done with other in-app events as well, such as the number of features users are using, or the number of team members they invited. The more addicted trial users are to your product, the greater the chances will be that they\ will convert to paying customers. Tweet this quote Take Slack’s example: The more team members a Slack user invites, the more who become engaged with the product. The more people in a Slack team has, the faster they will reach the 10,000-message limit where they are exposed to the premium account. Tracking different users’ in-app events will help you to better qualify people who are interested in buying your product. Pro Tip: I use exit intent popup slide out if the user hasn’t done any key events in-app to give them a demo: 4. Show the value as soon as possible in the first run A first run is the moment when trial users “walk through your product” for the first time. It’s the period of a couple of minutes after they signed up. User attention is pretty low. A lot of things can distract us and make us see the value too late. If this is the case, then your trial-to-paid conversions will be pretty low. That’s the reason why we need to show value to our users as soon as possible. The first step to do this is to reduce the friction inside your product. So instead of the dozens of different UI elements, you should show only the most important ones that are crucial for the users in the first-run. Every additional element adds friction for users. Try to reduce the number of steps users need to do before seeing the value. For example, if you have a product that requires extensive setup, try to reduce the number of features you want to show at the beginning. If your product is integration-based, then make your users integrate one or two most important things in the first-run that can have a direct impact on their business. The sooner your trial users see the value of your product, the more motivated they will be to move forward. 5. Re-engage with those who are not qualified It’s important to re-engage with those who are not qualified (yet). People sometimes just need follow-ups. If they didn’t activate certain events inside your product, it doesn’t need to mean that they’re not interested in it. Life happens. There can be different reasons why they stopped using your product after some time or immediately after signing up. Perhaps they were distracted so they forgot. People like those need additional motivation. That’s the reason why it is important to touch base with them. For example, at Userpilot, we’re sending this email to the users who are not engaged enough with our product: Emails can play a vital role in Product-led growth It’s important to keep in mind that boring and dull emails and user onboarding won’t have any impact. That’s the reason why you need to implement a human element and personalization in it (if you want to achieve the highest ROI from PLG sales as possible). You can also offer a discount to those who didn’t purchase a premium plan after the trial. 6. Don’t forget about in-app marketing In-app marketing plays an important role in PLG sales and user adoption. There are various things and spaces in your product you can use to market your new features or product changes that can make your trial users addicted to your product, improve your retention and reduce churn. For example, Drift uses the empty space on their “sign-up” page to market their important features: Your product can be a perfect location to advertise new features and events I love how Drift show social proof & human element on their signup page and in-app. You can do your in-app marketing with progress bars, checklists, different UI elements (such as tooltips, modals, slide-outs) or even with your changelog — as Slack does: Slack announces new features within the product Watch your trial-to-paid conversions grow As we could see, the purpose of PLG sales is to convert your trial users to paid ones automatically and on a scalable way through your product. Because of that, understanding their in-app behaviours and monitoring their steps through your product is crucial for delivering the right user experiences and sending the most appropriate sales messages. If you carefully implement everything we talked about above, you will probably be able to double your trial-to-paid conversions just like we did after we implemented the free trial process. About the Author Aazar Ali Shad is the VP of Growth & Sales at Userpilot, and has more than 5 years of SaaS experience. He is currently helping 500+ SaaS companies improve user onboarding and increase product adoption.

<sys> [INST] How to Run Sales in the Era of Product-Led Growth [/INST] Product-led growth (PLG) has been used by some of the most successful SaaS companies for years, but it’s only in recent months that the wider community is starting to take notice of it. Slack and Calendly are just some of the examples of products that have leveraged PLG to grow their user base rapidly and now others are looking for ways to profit from the same approach. Like in every other trend, the things that work — work only at the beginning. And those who adopt it early on will have the biggest benefit from them. For that reason, it’s very important for all software and subscription companies to be early adopters. Product-led growth brings you product-qualified leads, which are the best fit for your business — since they’ve already tried your product and know how to take advantage of it. Because of that, your sales department will work with warmer leads who are more interested in your product than sales-qualified or marketing-qualified leads and will be able to close more deals. In this article, I’ll help you understand how to organize your sales effort in a PLG-led company and how to turn your product and your sales team into a well-oiled machine that generates new highly-engaged customers. In the following sections, we’ll cover: What Product-Led Growth is and why it’s important for your business What’s the difference between the product-led, sales-led, and marketing-led approaches What are PLG sales and why you should consider using them How to do PLG sales So let’s get started. What is Product-Led Growth (PLG)? Product-led Growth isn’t a new concept, but it has become really popular in the last few years because of the rising levels of competition in SaaS. PLG is the process of using your product as the main acquisition and growth channel. Tweet this quote The product-led model is suitable for all SaaS businesses. It helps them to showcase their product first before even discussing the upgrade or premium accounts with their trial users. In other words, the purpose of Product-Led growth is to enable trial/free users to see the immediate product value and make them develop a habit around using the product so eventually, they end up buying it. Here are the key aspects of the PLG strategy: Your product is the key channel to market to your prospects The product should have a viral effect and prompt your users to invite and share The user experience should be your biggest focus You should capture product usage activity in order to drive personalized onboarding and experiences User segmentation and personalized in-app experiences are playing an important role in PLG Don’t show paywalls before the customer has seen the value Why it’s important to use a PLG model If you’re a SaaS or any other company that has a subscription-driven pricing model, you should definitely consider making PLG your main driver of growth. There are several reasons why: The market is huge and customers are demanding more and more each day: The number of direct/indirect competitors you have is getting bigger every single day — many businesses are struggling with differentiating themselves in the market with their website and product positioning. Giving potential customers an opportunity to try the product before buying it is essential. Customer Acquisition Cost (CAC) is increasing: Even if this trend isn’t affecting your business, PLG can help you reduce your CAC since your trial-to-paid conversion rates are going to be better and you will spend less time on manually closing deals (if your product and user experiences are good enough). It improves your customer lifetime value (LTV): If you acquire your customers with the help of the PLG model, it means that they saw a value in your product and that they’re going to become long-term users. In other words — they can’t live without your product. Take Slack for example. Slack becomes so embedded in teams, that they have no choice but to start paying for it — changing the vendor and doing the same things over and over again will cost them time, money, and nerves. As you can see, Product-led growth can bring you a lot of benefits. Before we actually see how to do PLG sales, let’s see what are the main differences between the product-led, sales-led, and marketing-led approaches. What are the differences between product-led, sales-led, and marketing-led approaches? In order to understand how to do product-led sales, we first need to know what are the differences between the various approaches. Product-led vs Sales-led approach The sales-led sales approach is mainly focused on cold-emailing, outreach, and cold-calling, while the product-led sales approach is using the product as the main acquisition channel. Further reading: Startup Sales: Everything You Need to Know About Building Your First Sales Team In other words, sales teams are qualifying sales leads by different lead scoring aspects (like the team size, industry, title of the lead, and a bunch of other factors), while the product-qualified leads are qualified by different in-app experiences and events. For example, if your product requires installing some part of the code on the user’s website, the user might be considered as a product qualified lead if they install the code. So, what are the differences between product-led and sales-led approach? The product-led approach shows the value, while sales-led approach tells the value: in other words, product-led sales are leading users towards the meaningful outcome, such as sending the first email campaign to a number of subscribers in MailChimp. On the other hand, sales-led approach explains the benefits of your product — but doesn’t show them. Product-led growth is more cost-efficient: the important difference between these two approaches is in its cost, especially because CAC is going up over time. The product-led approach helps you to attain cost-efficiency. For example, since with the PLG model users are onboarding themselves, you’re reducing the sales cycle and time-to-value. Or, you have lower costs to serve and bigger revenue per employee, since you initially don’t need too many employees. Product-led vs Marketing-led approach There are a couple of differences between product-led and marketing-led approach, but that doesn’t mean that they can’t coexist with each other. Even more, it means that they should fill the gaps they have. Let’s look at the differences: Product-led and Marketing-led approaches are measuring different KPIs: most marketing-led companies are great at acquisition, but not so good at figuring out their performance in activation and retention. Even more, only 44% of SaaS companies defined user activation as the KPI for their product. Not using activation and retention metrics means that you’re not paying attention to your churn — which is a deadly metric for your company. Because of this, both approaches must co-exist and work smoothly with each other. Product-led companies spend less money on marketing: If you’re using only marketing-led approach, you will always need to spend more money to buy attention. If you’re in the scaling phase, you can’t dedicate too much money on marketing activities and ads. In other words, bringing the user inside your product with marketing and onboarding and retaining them with the product-led approach will save you a fortune. As we can see, all three methods must coexist if we want to grow our companies effectively. Marketing-led and sales-led approaches are there to bring the people inside our product. But what happens after it, and whether the user will decide to buy or not to buy your product, mostly depends on the product-led approach. That’s the reason why PLG sales are important for your business. So, let’s see how to do PLG sales. How to do PLG sales The PLG sales cycle begins from the moment when your trial user lands on your product. That’s the moment when you need to be able to track their moves through your product. As I already mentioned, PLG sales are based on user experiences and in-app events. So, PLG sales are product-first. Having good UX/UI is mandatory. The ultimate goal of PLG sales is to motivate your users to use your product, unleash the value as soon as possible, and convert your users to power-users (i.e. users who can’t live without your product — just like Slack did). From prospect to power customer, your users face various conversion points in their journey. Specifically for that reason, you need to unleash the “aha!” moment from the user’s first-run through your product. What’s the “aha!” moment mostly depends on your product. For example, for Slack, the “aha!” moment is when the users start to chat with each other. It’s important to separate the “aha!” moment from user activation. “aha!” moment is the moment when the users perceive the value of your product/feature. user activation is the moment when your users feel the value of your product/feature. It means that your user already experienced the benefits. In other words, for the user to completely adapt your product, use it and start paying for it, he will need to go through different activation points and “aha!s”. Most products contain multiple activation points. All of this sounds nice in theory, but how can you do this? Let’s see it, step-by-step. 1. Set your PLG sales KPIs Before you even start doing your PLG sales, you will need to set-up your KPIs. As I already mentioned, the most important KPIs in the PLG approach are: the “aha!” moment for product/feature the user activation moment for product/feature Product-qualified leads (PQL) There are a couple of ways how to decide what your “aha!” moments and user activation points are. One of them is common sense. It’s good for early-stage products who don’t have users. But as soon as you get your first users (or if you already have some), you will need to monitor their activities and see what’s the most important thing that diversifies those who end up paying for your product form those who don’t. For example, the team behind Ghost, an online blogging platform, realized that those who change the theme of the blog are more likely to upgrade to premium accounts. That’s the reason why Ghost created a checklist with everything that users need to do in order to see the full potential of Ghost. Depending on the complexity of your product, you can have one or 10 different “aha!” moments and user activation points. It’s important for you to show the biggest value as soon as possible (i.e. making your users engage with your core features at the beginning, and only after that with secondary ones). So, the user onboarding curve before your trial/free users completely adopt your product and start paying for it might look like this: The user onboarding flow can be thought of as a series of “aha!” moments. As you can see, for the best results in PLG Sales, you will need to know exactly what your most important KPIs are. If you don’t, you won’t be able to do PLG sales in the right way. Without defined KPIs, you won’t be able to go to the second step. Pro tip: for the best activation and adoption rates, I recommend creating personalized and context-driven user onboarding flows. In this way, you will be able to activate more users and do more PLG sales deals. 2. Qualify your users at the trial phase User qualification at the trial phase is important. It helps you to divide those who might be interested in buying your product from those who won’t be. Those who are interested in buying your product are called product-qualified leads or PQLs. The best way to qualify your users is by monitoring their app sessions and the things they’re doing inside your product. Let’s look at an example with a live chat software and 14-day trial. In this case, we might have three different groups of people: Group A: Trial users who didn’t install your live chat code snippet into their websites a couple of days after they registered. Group B: Trial users who installed the code Group C: Trial users who installed the code and who are chatting with their website visitors regularly. We can assume that people in Group B reached the “aha” moment, but weren’t motivated to go any further (or they didn’t have the resources for that). On the other hand, the people in group C reached both the “aha” moment and the user activation point. Perhaps we can even assume that they adopted the product in their organization and workflows. Those can definitely be considered as PQLs. So, in this case, you want to do the following: Focus your PLG sales efforts on closing deals with the people in Group C Motivate the people in Group B to move further (so they can be in Group C) or try to understand why are they not using their live chat (perhaps they don’t have website visitors) Remind the people in Group A to install their live chat code so they can see the value. If they don’t, they’re not qualified for PLG sales As you can see, for an in-depth understanding of your PLG sales cycle, it’s important to qualify your trial users and identify PQLs. At Userpilot, qualifying our trial users and identifying PQLs helped us improve our MRR by more than 50% in the first months. We consider an Activated user someone who installed our JS code in their app and who’s ready to improve their product experiences and user onboarding flows: Using filtering to identify activated users. We’re also monitoring new users by the number of experiences they create. The more product experiences user created in the trial phase, the more qualified they are (i.e. they can be considered as a PQL). Tracking experiences created allows Userpilot to identify the most-engaged PQLs. There are also PQLs that installed the code but didn’t create any product experiences — those require more attention (we consider them a Partially activated user). Some PQLs might require a slight nudge even if they are a good fit for the product. For this kind of “partially activate” PQLs, we’re usually sending personalized “demo videos” explaining them some particular features (that are great for their use case) and benefits they can get: A personalized video is a great way to engage a cool lead. In the end, we have PQLs who are qualified for our product, but who haven’t subscribed or paid yet. We’re also sending them videos and personally contacting them in order to figure out what’s missing and what they need to sign up. This analysis allows Userpilot to focus on those leads who are most likely to convert. 3. Track your users’ in-app events This one is similar to the step above, but with a little twist. Sometimes, it’s not just important to track KPIs (“aha!” moments and user activation points), but also the users’ in-app events. For example, if you have a checklist in your product, did the user complete your checklist fully, partially, or not at all? It’s clear that the users who fully completed your checklists might be potential customers, and that those who completed them partially require some additional motivation to do that. The same can be done with other in-app events as well, such as the number of features users are using, or the number of team members they invited. The more addicted trial users are to your product, the greater the chances will be that they\ will convert to paying customers. Tweet this quote Take Slack’s example: The more team members a Slack user invites, the more who become engaged with the product. The more people in a Slack team has, the faster they will reach the 10,000-message limit where they are exposed to the premium account. Tracking different users’ in-app events will help you to better qualify people who are interested in buying your product. Pro Tip: I use exit intent popup slide out if the user hasn’t done any key events in-app to give them a demo: 4. Show the value as soon as possible in the first run A first run is the moment when trial users “walk through your product” for the first time. It’s the period of a couple of minutes after they signed up. User attention is pretty low. A lot of things can distract us and make us see the value too late. If this is the case, then your trial-to-paid conversions will be pretty low. That’s the reason why we need to show value to our users as soon as possible. The first step to do this is to reduce the friction inside your product. So instead of the dozens of different UI elements, you should show only the most important ones that are crucial for the users in the first-run. Every additional element adds friction for users. Try to reduce the number of steps users need to do before seeing the value. For example, if you have a product that requires extensive setup, try to reduce the number of features you want to show at the beginning. If your product is integration-based, then make your users integrate one or two most important things in the first-run that can have a direct impact on their business. The sooner your trial users see the value of your product, the more motivated they will be to move forward. 5. Re-engage with those who are not qualified It’s important to re-engage with those who are not qualified (yet). People sometimes just need follow-ups. If they didn’t activate certain events inside your product, it doesn’t need to mean that they’re not interested in it. Life happens. There can be different reasons why they stopped using your product after some time or immediately after signing up. Perhaps they were distracted so they forgot. People like those need additional motivation. That’s the reason why it is important to touch base with them. For example, at Userpilot, we’re sending this email to the users who are not engaged enough with our product: Emails can play a vital role in Product-led growth It’s important to keep in mind that boring and dull emails and user onboarding won’t have any impact. That’s the reason why you need to implement a human element and personalization in it (if you want to achieve the highest ROI from PLG sales as possible). You can also offer a discount to those who didn’t purchase a premium plan after the trial. 6. Don’t forget about in-app marketing In-app marketing plays an important role in PLG sales and user adoption. There are various things and spaces in your product you can use to market your new features or product changes that can make your trial users addicted to your product, improve your retention and reduce churn. For example, Drift uses the empty space on their “sign-up” page to market their important features: Your product can be a perfect location to advertise new features and events I love how Drift show social proof & human element on their signup page and in-app. You can do your in-app marketing with progress bars, checklists, different UI elements (such as tooltips, modals, slide-outs) or even with your changelog — as Slack does: Slack announces new features within the product Watch your trial-to-paid conversions grow As we could see, the purpose of PLG sales is to convert your trial users to paid ones automatically and on a scalable way through your product. Because of that, understanding their in-app behaviours and monitoring their steps through your product is crucial for delivering the right user experiences and sending the most appropriate sales messages. If you carefully implement everything we talked about above, you will probably be able to double your trial-to-paid conversions just like we did after we implemented the free trial process. About the Author Aazar Ali Shad is the VP of Growth & Sales at Userpilot, and has more than 5 years of SaaS experience. He is currently helping 500+ SaaS companies improve user onboarding and increase product adoption. </sys

The Ultimate Customer Success Cheat Sheet. There has never been greater awareness of Customer Success, as an integral part of growing a successful SaaS business. It’s often referenced as the one key tool for combatting churn. But to a SaaS business looking to ramp up their Customer Success efforts, you can find a lot of conflicting information from multiple sources across the web. With this in mind, we’ve designed the next instalment in our series of SaaS-focused resources – The Ultimate Customer Success Cheat Sheet: Download for free If you enjoy our free SaaS resources, please consider spreading the word and sharing them with others! As always, our resources are built on the excellent work of various thought leaders in the SaaS space, so thanks to Gainsight, GrooveHQ, Totango and Lincoln Murphy who have all contributed great material on the topic of Customer Success. Share This: NEW on @ChartMogul The Ultimate Customer Success Cheat Sheet [PDF] – Download it now! https://t.co/loddHJAZhg pic.twitter.com/HWuYGGJmfj — ChartMogul (@ChartMogul) October 6, 2015

[INST] The Ultimate Customer Success Cheat Sheet [/INST]

There has never been greater awareness of Customer Success, as an integral part of growing a successful SaaS business. It’s often referenced as the one key tool for combatting churn. But to a SaaS business looking to ramp up their Customer Success efforts, you can find a lot of conflicting information from multiple sources across the web. With this in mind, we’ve designed the next instalment in our series of SaaS-focused resources – The Ultimate Customer Success Cheat Sheet: Download for free If you enjoy our free SaaS resources, please consider spreading the word and sharing them with others! As always, our resources are built on the excellent work of various thought leaders in the SaaS space, so thanks to Gainsight, GrooveHQ, Totango and Lincoln Murphy who have all contributed great material on the topic of Customer Success. Share This: NEW on @ChartMogul The Ultimate Customer Success Cheat Sheet [PDF] – Download it now! https://t.co/loddHJAZhg pic.twitter.com/HWuYGGJmfj — ChartMogul (@ChartMogul) October 6, 2015

<sys> [INST] The Ultimate Customer Success Cheat Sheet [/INST] There has never been greater awareness of Customer Success, as an integral part of growing a successful SaaS business. It’s often referenced as the one key tool for combatting churn. But to a SaaS business looking to ramp up their Customer Success efforts, you can find a lot of conflicting information from multiple sources across the web. With this in mind, we’ve designed the next instalment in our series of SaaS-focused resources – The Ultimate Customer Success Cheat Sheet: Download for free If you enjoy our free SaaS resources, please consider spreading the word and sharing them with others! As always, our resources are built on the excellent work of various thought leaders in the SaaS space, so thanks to Gainsight, GrooveHQ, Totango and Lincoln Murphy who have all contributed great material on the topic of Customer Success. Share This: NEW on @ChartMogul The Ultimate Customer Success Cheat Sheet [PDF] – Download it now! https://t.co/loddHJAZhg pic.twitter.com/HWuYGGJmfj — ChartMogul (@ChartMogul) October 6, 2015 </sys

The New Stripe Integration: Open Invoices, Multi-plan Support, and Increased Transparency. Stripe is one of our most popular billing system integrations in ChartMogul. Over the last seven years, we managed to import tens of millions of Stripe customers from over 10,000 ChartMogul accounts. As impressive as this may sound, this number will continue to grow and we have to ensure that our Stripe integration is scalable and robust enough to attend to the increasing needs of our existing and future customers. With this in mind, over the last few months, we’ve been working hard to deliver a new version of our Stripe integration and I’m very excited to tell you it’s finally live. The new Stripe integration is live for all new accounts, and for existing accounts using Stripe it will be gradually rolled out in the coming weeks. We’ll be in touch with you about the migration so you know what to expect. Increased transparency on the Data Platform The new Stripe integration will directly access our Data Platform – this will allow you to see exactly how your Stripe data maps to your customers, invoices, plans, and transactions into ChartMogul. Consequently, this makes it easier to understand how your metrics are calculated, thus giving you a better understanding of the forces that are impacting your business. We now display the data we’ve imported from Stripe to the Data Platform in the table shown below. This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. We believe that this is a big step to ensuring that the numbers you see in ChartMogul can be traced back to transactions in Stripe, and therefore, can be trusted. You also have the option to export your data to a CSV file. When you click EXPORT, ChartMogul emails you a link to download your file. You can then work with your data as you see fit in its new cleaned and usable format. Better breakdown of amounts With the current version, if you apply any tax, discount and fees, they will be listed down as separate line items. With the new Stripe version, we split them into columns to provide you with a clearer breakdown of how your taxes and discounts are applied to your invoices. Improved Stripe multi-plan support Billing systems like Stripe allow customers to add multiple components and add-ons to a single subscription. Such subscriptions and their components can be seen within an individual customer’s page. With the current implementation, you can’t easily check which components or plans belong to the same subscription as you can see from the image below. With the new version of our Stripe integration, we’ve improved this by grouping all the components within a single subscription together. The subscription table can be expanded to show the contribution provided by the different components a subscription has or has had in the past. Update customer details automatically With the old version, any customer profile updates in Stripe won’t reflect in ChartMogul. As a result, you’d have to manually update your customer records in ChartMogul to sync these changes. With the new version, any customer profile changes you do in Stripe will now sync to your ChartMogul data. This is to ensure that the email, company name and customer name in both Stripe and ChartMogul are identical. In turn, any edits made in ChartMogul will be overwritten by edits you do in Stripe. If you wish to avoid this and keep the old behavior in your account, you can request this by sending an email to [email protected] Full customer import ChartMogul will now import all Stripe customers. With the old version, ChartMogul only imports customers when they have at least one successful transaction. This doesn’t give users full visibility over their customers especially when you want to track the number of leads in your ChartMogul account. New features to expect Open Invoices Support You’ve asked and we’ve listened. As we continue to make improvements to our Stripe integration, we are working on a new data setting that will allow unpaid subscriptions to generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. At the moment, Stripe only generates MRR if we receive a successfully paid invoice. In the next release we’ll support open invoices to give you more flexibility and greater insight into your metrics. Define when you want MRR to be recognized With the new Open invoices feature, you now have the ability to control how and when subscriptions and MRR data are created. We’re excited to announce this new version of our Stripe integration. Our Data Platform will provide greater transparency in the data you’re sending from Stripe so you can better trust the metrics in your dashboards. On top of that, we’re adding even more features to ensure accuracy in your numbers across our integrations. Get in touch with us and let us know what you think about our latest upgrade. We’d love to hear any feedback you may have.

[INST] The New Stripe Integration: Open Invoices, Multi-plan Support, and Increased Transparency [/INST]

Stripe is one of our most popular billing system integrations in ChartMogul. Over the last seven years, we managed to import tens of millions of Stripe customers from over 10,000 ChartMogul accounts. As impressive as this may sound, this number will continue to grow and we have to ensure that our Stripe integration is scalable and robust enough to attend to the increasing needs of our existing and future customers. With this in mind, over the last few months, we’ve been working hard to deliver a new version of our Stripe integration and I’m very excited to tell you it’s finally live. The new Stripe integration is live for all new accounts, and for existing accounts using Stripe it will be gradually rolled out in the coming weeks. We’ll be in touch with you about the migration so you know what to expect. Increased transparency on the Data Platform The new Stripe integration will directly access our Data Platform – this will allow you to see exactly how your Stripe data maps to your customers, invoices, plans, and transactions into ChartMogul. Consequently, this makes it easier to understand how your metrics are calculated, thus giving you a better understanding of the forces that are impacting your business. We now display the data we’ve imported from Stripe to the Data Platform in the table shown below. This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. We believe that this is a big step to ensuring that the numbers you see in ChartMogul can be traced back to transactions in Stripe, and therefore, can be trusted. You also have the option to export your data to a CSV file. When you click EXPORT, ChartMogul emails you a link to download your file. You can then work with your data as you see fit in its new cleaned and usable format. Better breakdown of amounts With the current version, if you apply any tax, discount and fees, they will be listed down as separate line items. With the new Stripe version, we split them into columns to provide you with a clearer breakdown of how your taxes and discounts are applied to your invoices. Improved Stripe multi-plan support Billing systems like Stripe allow customers to add multiple components and add-ons to a single subscription. Such subscriptions and their components can be seen within an individual customer’s page. With the current implementation, you can’t easily check which components or plans belong to the same subscription as you can see from the image below. With the new version of our Stripe integration, we’ve improved this by grouping all the components within a single subscription together. The subscription table can be expanded to show the contribution provided by the different components a subscription has or has had in the past. Update customer details automatically With the old version, any customer profile updates in Stripe won’t reflect in ChartMogul. As a result, you’d have to manually update your customer records in ChartMogul to sync these changes. With the new version, any customer profile changes you do in Stripe will now sync to your ChartMogul data. This is to ensure that the email, company name and customer name in both Stripe and ChartMogul are identical. In turn, any edits made in ChartMogul will be overwritten by edits you do in Stripe. If you wish to avoid this and keep the old behavior in your account, you can request this by sending an email to [email protected] Full customer import ChartMogul will now import all Stripe customers. With the old version, ChartMogul only imports customers when they have at least one successful transaction. This doesn’t give users full visibility over their customers especially when you want to track the number of leads in your ChartMogul account. New features to expect Open Invoices Support You’ve asked and we’ve listened. As we continue to make improvements to our Stripe integration, we are working on a new data setting that will allow unpaid subscriptions to generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. At the moment, Stripe only generates MRR if we receive a successfully paid invoice. In the next release we’ll support open invoices to give you more flexibility and greater insight into your metrics. Define when you want MRR to be recognized With the new Open invoices feature, you now have the ability to control how and when subscriptions and MRR data are created. We’re excited to announce this new version of our Stripe integration. Our Data Platform will provide greater transparency in the data you’re sending from Stripe so you can better trust the metrics in your dashboards. On top of that, we’re adding even more features to ensure accuracy in your numbers across our integrations. Get in touch with us and let us know what you think about our latest upgrade. We’d love to hear any feedback you may have.

<sys> [INST] The New Stripe Integration: Open Invoices, Multi-plan Support, and Increased Transparency [/INST] Stripe is one of our most popular billing system integrations in ChartMogul. Over the last seven years, we managed to import tens of millions of Stripe customers from over 10,000 ChartMogul accounts. As impressive as this may sound, this number will continue to grow and we have to ensure that our Stripe integration is scalable and robust enough to attend to the increasing needs of our existing and future customers. With this in mind, over the last few months, we’ve been working hard to deliver a new version of our Stripe integration and I’m very excited to tell you it’s finally live. The new Stripe integration is live for all new accounts, and for existing accounts using Stripe it will be gradually rolled out in the coming weeks. We’ll be in touch with you about the migration so you know what to expect. Increased transparency on the Data Platform The new Stripe integration will directly access our Data Platform – this will allow you to see exactly how your Stripe data maps to your customers, invoices, plans, and transactions into ChartMogul. Consequently, this makes it easier to understand how your metrics are calculated, thus giving you a better understanding of the forces that are impacting your business. We now display the data we’ve imported from Stripe to the Data Platform in the table shown below. This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. We believe that this is a big step to ensuring that the numbers you see in ChartMogul can be traced back to transactions in Stripe, and therefore, can be trusted. You also have the option to export your data to a CSV file. When you click EXPORT, ChartMogul emails you a link to download your file. You can then work with your data as you see fit in its new cleaned and usable format. Better breakdown of amounts With the current version, if you apply any tax, discount and fees, they will be listed down as separate line items. With the new Stripe version, we split them into columns to provide you with a clearer breakdown of how your taxes and discounts are applied to your invoices. Improved Stripe multi-plan support Billing systems like Stripe allow customers to add multiple components and add-ons to a single subscription. Such subscriptions and their components can be seen within an individual customer’s page. With the current implementation, you can’t easily check which components or plans belong to the same subscription as you can see from the image below. With the new version of our Stripe integration, we’ve improved this by grouping all the components within a single subscription together. The subscription table can be expanded to show the contribution provided by the different components a subscription has or has had in the past. Update customer details automatically With the old version, any customer profile updates in Stripe won’t reflect in ChartMogul. As a result, you’d have to manually update your customer records in ChartMogul to sync these changes. With the new version, any customer profile changes you do in Stripe will now sync to your ChartMogul data. This is to ensure that the email, company name and customer name in both Stripe and ChartMogul are identical. In turn, any edits made in ChartMogul will be overwritten by edits you do in Stripe. If you wish to avoid this and keep the old behavior in your account, you can request this by sending an email to [email protected] Full customer import ChartMogul will now import all Stripe customers. With the old version, ChartMogul only imports customers when they have at least one successful transaction. This doesn’t give users full visibility over their customers especially when you want to track the number of leads in your ChartMogul account. New features to expect Open Invoices Support You’ve asked and we’ve listened. As we continue to make improvements to our Stripe integration, we are working on a new data setting that will allow unpaid subscriptions to generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. At the moment, Stripe only generates MRR if we receive a successfully paid invoice. In the next release we’ll support open invoices to give you more flexibility and greater insight into your metrics. Define when you want MRR to be recognized With the new Open invoices feature, you now have the ability to control how and when subscriptions and MRR data are created. We’re excited to announce this new version of our Stripe integration. Our Data Platform will provide greater transparency in the data you’re sending from Stripe so you can better trust the metrics in your dashboards. On top of that, we’re adding even more features to ensure accuracy in your numbers across our integrations. Get in touch with us and let us know what you think about our latest upgrade. We’d love to hear any feedback you may have. </sys

The Ultimate Guide to SaaS LTV [slides]. To give you a comprehensive overview of LTV for SaaS, we’ve compiled The Ultimate Guide to SaaS Customer Lifetime Value on Slideshare. It covers many aspects of estimating LTV for your business, and offers choices when it comes to accounting for Customer Churn Rate, and other common traits of a SaaS business. As always, we’d like to thank many of the thought leaders on this topic, all of whom contribute great value to the domain. Particularly Tomasz Tungaz, Christoph Janz and David Skok for his excellent SaaS Metrics 2.0 definitions piece. Want this guide as an extended, downloadable PDF? Get it here for free!

[INST] The Ultimate Guide to SaaS LTV [slides] [/INST]

To give you a comprehensive overview of LTV for SaaS, we’ve compiled The Ultimate Guide to SaaS Customer Lifetime Value on Slideshare. It covers many aspects of estimating LTV for your business, and offers choices when it comes to accounting for Customer Churn Rate, and other common traits of a SaaS business. As always, we’d like to thank many of the thought leaders on this topic, all of whom contribute great value to the domain. Particularly Tomasz Tungaz, Christoph Janz and David Skok for his excellent SaaS Metrics 2.0 definitions piece. Want this guide as an extended, downloadable PDF? Get it here for free!

<sys> [INST] The Ultimate Guide to SaaS LTV [slides] [/INST] To give you a comprehensive overview of LTV for SaaS, we’ve compiled The Ultimate Guide to SaaS Customer Lifetime Value on Slideshare. It covers many aspects of estimating LTV for your business, and offers choices when it comes to accounting for Customer Churn Rate, and other common traits of a SaaS business. As always, we’d like to thank many of the thought leaders on this topic, all of whom contribute great value to the domain. Particularly Tomasz Tungaz, Christoph Janz and David Skok for his excellent SaaS Metrics 2.0 definitions piece. Want this guide as an extended, downloadable PDF? Get it here for free! </sys

Building Repeatable Sales Processes with Ross Rich from Accord. Whether you’re a startup or a scale up, repeatable sales processes are key to building on past successes and laying the groundwork for future growth. But it can be difficult to know when to start, how to start, and how to know which pieces of the funnel to lock in or improve. Without processes you might have a dozen reps that are going it alone, with no way to replicate success. Ross Rich knows something about sales processes as the CEO and co-founder of Accord. Accord is a customer-facing collaboration workspace for B2B sales, onboarding, and success. In the past, Ross was one of the first sales hires at Stripe (which now has over 500 reps), so he knows about what it takes to build reliable sales processes at every stage of growth. It’s not what you start with, but when you start… When you’ve got about 10-20 customers, that’s the right time to start thinking about processes. It’s not before then when you’ve got one person paying you. And it’s probably too late when you’ve got 50-100 customers, and every rep is doing something different. Ross Rich Often, it’s the CEO that’s closing the first deals, but knowing which kind of sales leader to bring in next can be the key to building out repeatable sales processes. Ross says, “the process starts with the person.” SDRs or junior AEs typically won’t have the experience necessary to create repeatable processes, and neither will a more VP type who has management experience but none with your product. When you find the balance and hire the right person, you can start to outline your customer journey, test, and iterate on processes. In this episode of SaaS Open Mic, Ross and I discuss creating repeatable revenue processes and: Customer journey mapping Improving the funnel Positioning and sales/marketing alignment How to know when to iterate on your processes Personas and PMF Revenue generation responsibilities beyond the sales organization Relationship building Hope you enjoy this SaaS Open Mic episode!

[INST] Building Repeatable Sales Processes with Ross Rich from Accord [/INST]

Whether you’re a startup or a scale up, repeatable sales processes are key to building on past successes and laying the groundwork for future growth. But it can be difficult to know when to start, how to start, and how to know which pieces of the funnel to lock in or improve. Without processes you might have a dozen reps that are going it alone, with no way to replicate success. Ross Rich knows something about sales processes as the CEO and co-founder of Accord. Accord is a customer-facing collaboration workspace for B2B sales, onboarding, and success. In the past, Ross was one of the first sales hires at Stripe (which now has over 500 reps), so he knows about what it takes to build reliable sales processes at every stage of growth. It’s not what you start with, but when you start… When you’ve got about 10-20 customers, that’s the right time to start thinking about processes. It’s not before then when you’ve got one person paying you. And it’s probably too late when you’ve got 50-100 customers, and every rep is doing something different. Ross Rich Often, it’s the CEO that’s closing the first deals, but knowing which kind of sales leader to bring in next can be the key to building out repeatable sales processes. Ross says, “the process starts with the person.” SDRs or junior AEs typically won’t have the experience necessary to create repeatable processes, and neither will a more VP type who has management experience but none with your product. When you find the balance and hire the right person, you can start to outline your customer journey, test, and iterate on processes. In this episode of SaaS Open Mic, Ross and I discuss creating repeatable revenue processes and: Customer journey mapping Improving the funnel Positioning and sales/marketing alignment How to know when to iterate on your processes Personas and PMF Revenue generation responsibilities beyond the sales organization Relationship building Hope you enjoy this SaaS Open Mic episode!

<sys> [INST] Building Repeatable Sales Processes with Ross Rich from Accord [/INST] Whether you’re a startup or a scale up, repeatable sales processes are key to building on past successes and laying the groundwork for future growth. But it can be difficult to know when to start, how to start, and how to know which pieces of the funnel to lock in or improve. Without processes you might have a dozen reps that are going it alone, with no way to replicate success. Ross Rich knows something about sales processes as the CEO and co-founder of Accord. Accord is a customer-facing collaboration workspace for B2B sales, onboarding, and success. In the past, Ross was one of the first sales hires at Stripe (which now has over 500 reps), so he knows about what it takes to build reliable sales processes at every stage of growth. It’s not what you start with, but when you start… When you’ve got about 10-20 customers, that’s the right time to start thinking about processes. It’s not before then when you’ve got one person paying you. And it’s probably too late when you’ve got 50-100 customers, and every rep is doing something different. Ross Rich Often, it’s the CEO that’s closing the first deals, but knowing which kind of sales leader to bring in next can be the key to building out repeatable sales processes. Ross says, “the process starts with the person.” SDRs or junior AEs typically won’t have the experience necessary to create repeatable processes, and neither will a more VP type who has management experience but none with your product. When you find the balance and hire the right person, you can start to outline your customer journey, test, and iterate on processes. In this episode of SaaS Open Mic, Ross and I discuss creating repeatable revenue processes and: Customer journey mapping Improving the funnel Positioning and sales/marketing alignment How to know when to iterate on your processes Personas and PMF Revenue generation responsibilities beyond the sales organization Relationship building Hope you enjoy this SaaS Open Mic episode! </sys

SaaS Q&A: What are some examples of usage-based pricing models?. Usage-based pricing in SaaS is increasingly common with highly transactional services. When it comes to choosing a billing model, the biggest factor is how your product delivers value to the customer. And by that I mean: “When your customer pays for your product, what (from their perspective) are they paying for, and how do they get it?” It’s important to not confuse usage-based pricing with user-based pricing. USER-based pricing In products like Helpdesk or CRM solutions, most of the value for the customer is delivered on a per-user basis, meaning that it makes sense to charge for each user license required. With 5 support reps: I can use the CRM to solve X tickets per day, which is equates to a certain value. With 10 support reps: I can use the CRM to solve Y tickets per day, which represents incremental value to my business over 5 support reps. I therefore pay a greater amount for the service. User-based pricing is how many SaaS businesses still bill their customers today. It’s proven fairly effective for products that are used by a specific team within a business which scales over time. A typical example of this is selling Helpdesk software to a Support team. As your business scales, your support team will typically scale with it, meaning that you pay more for (expand) your account with the Helpdesk product. Simple, right? Or is it? There are many other ways to price your service that could be tied more directly to the value seen by customers. One of them is usage-based pricing. USAGE-based pricing This can work well in products and services that are more transactional in nature: Data services – paying for data, or insights from data Cloud storage services – paying for storage Payment services – paying to process a payment transaction In this model, we’re saying that processing one “transaction” in the system equates to some measurable value for the customer. This could also be referred to as “metered” billing — paying for something in the same way you would pay for your energy bill for example, by measuring how much of it you use. So what are some examples of this? Example 1: Clearbit Source: clearbit.com Clearbit is an API-based product, i.e. the value of their product is not delivered through a user interface to a user, but through an API connected to a machine. For these types of transactional products, you’ll almost always find pricing based on “number of requests” made to the API. Example 2: Stripe Source: stripe.com Stripe is a payment solution – a great example of a transactional business. Most Stripe customers would agree that the value they get from the product is on a ‘per-transaction’ basis. And that’s exactly how they charge for the product: “per successful card charge”. This actually allows a great deal of simplicity for customers. Example 3: Twilio Source: twilio.com Twilio allows anyone to program telephony-based features into their application, through an API. Their SMS product is entirely transactional, and as such, the pricing is “per SMS”. Once again, this is the best way for them to measure value for the customer — and also to measure costs to deliver the service. In Conclusion Usage-based pricing is fairly common when you look at more infrastructure-based SaaS products — things you might integrate into your platform to build out powerful functionality (like payments) more quickly and easily. All of the above examples are relatively simple to explain to customers. This post originated as an answer on Quora — Read the full thread here.

[INST] SaaS Q&A: What are some examples of usage-based pricing models? [/INST]

Usage-based pricing in SaaS is increasingly common with highly transactional services. When it comes to choosing a billing model, the biggest factor is how your product delivers value to the customer. And by that I mean: “When your customer pays for your product, what (from their perspective) are they paying for, and how do they get it?” It’s important to not confuse usage-based pricing with user-based pricing. USER-based pricing In products like Helpdesk or CRM solutions, most of the value for the customer is delivered on a per-user basis, meaning that it makes sense to charge for each user license required. With 5 support reps: I can use the CRM to solve X tickets per day, which is equates to a certain value. With 10 support reps: I can use the CRM to solve Y tickets per day, which represents incremental value to my business over 5 support reps. I therefore pay a greater amount for the service. User-based pricing is how many SaaS businesses still bill their customers today. It’s proven fairly effective for products that are used by a specific team within a business which scales over time. A typical example of this is selling Helpdesk software to a Support team. As your business scales, your support team will typically scale with it, meaning that you pay more for (expand) your account with the Helpdesk product. Simple, right? Or is it? There are many other ways to price your service that could be tied more directly to the value seen by customers. One of them is usage-based pricing. USAGE-based pricing This can work well in products and services that are more transactional in nature: Data services – paying for data, or insights from data Cloud storage services – paying for storage Payment services – paying to process a payment transaction In this model, we’re saying that processing one “transaction” in the system equates to some measurable value for the customer. This could also be referred to as “metered” billing — paying for something in the same way you would pay for your energy bill for example, by measuring how much of it you use. So what are some examples of this? Example 1: Clearbit Source: clearbit.com Clearbit is an API-based product, i.e. the value of their product is not delivered through a user interface to a user, but through an API connected to a machine. For these types of transactional products, you’ll almost always find pricing based on “number of requests” made to the API. Example 2: Stripe Source: stripe.com Stripe is a payment solution – a great example of a transactional business. Most Stripe customers would agree that the value they get from the product is on a ‘per-transaction’ basis. And that’s exactly how they charge for the product: “per successful card charge”. This actually allows a great deal of simplicity for customers. Example 3: Twilio Source: twilio.com Twilio allows anyone to program telephony-based features into their application, through an API. Their SMS product is entirely transactional, and as such, the pricing is “per SMS”. Once again, this is the best way for them to measure value for the customer — and also to measure costs to deliver the service. In Conclusion Usage-based pricing is fairly common when you look at more infrastructure-based SaaS products — things you might integrate into your platform to build out powerful functionality (like payments) more quickly and easily. All of the above examples are relatively simple to explain to customers. This post originated as an answer on Quora — Read the full thread here.

<sys> [INST] SaaS Q&A: What are some examples of usage-based pricing models? [/INST] Usage-based pricing in SaaS is increasingly common with highly transactional services. When it comes to choosing a billing model, the biggest factor is how your product delivers value to the customer. And by that I mean: “When your customer pays for your product, what (from their perspective) are they paying for, and how do they get it?” It’s important to not confuse usage-based pricing with user-based pricing. USER-based pricing In products like Helpdesk or CRM solutions, most of the value for the customer is delivered on a per-user basis, meaning that it makes sense to charge for each user license required. With 5 support reps: I can use the CRM to solve X tickets per day, which is equates to a certain value. With 10 support reps: I can use the CRM to solve Y tickets per day, which represents incremental value to my business over 5 support reps. I therefore pay a greater amount for the service. User-based pricing is how many SaaS businesses still bill their customers today. It’s proven fairly effective for products that are used by a specific team within a business which scales over time. A typical example of this is selling Helpdesk software to a Support team. As your business scales, your support team will typically scale with it, meaning that you pay more for (expand) your account with the Helpdesk product. Simple, right? Or is it? There are many other ways to price your service that could be tied more directly to the value seen by customers. One of them is usage-based pricing. USAGE-based pricing This can work well in products and services that are more transactional in nature: Data services – paying for data, or insights from data Cloud storage services – paying for storage Payment services – paying to process a payment transaction In this model, we’re saying that processing one “transaction” in the system equates to some measurable value for the customer. This could also be referred to as “metered” billing — paying for something in the same way you would pay for your energy bill for example, by measuring how much of it you use. So what are some examples of this? Example 1: Clearbit Source: clearbit.com Clearbit is an API-based product, i.e. the value of their product is not delivered through a user interface to a user, but through an API connected to a machine. For these types of transactional products, you’ll almost always find pricing based on “number of requests” made to the API. Example 2: Stripe Source: stripe.com Stripe is a payment solution – a great example of a transactional business. Most Stripe customers would agree that the value they get from the product is on a ‘per-transaction’ basis. And that’s exactly how they charge for the product: “per successful card charge”. This actually allows a great deal of simplicity for customers. Example 3: Twilio Source: twilio.com Twilio allows anyone to program telephony-based features into their application, through an API. Their SMS product is entirely transactional, and as such, the pricing is “per SMS”. Once again, this is the best way for them to measure value for the customer — and also to measure costs to deliver the service. In Conclusion Usage-based pricing is fairly common when you look at more infrastructure-based SaaS products — things you might integrate into your platform to build out powerful functionality (like payments) more quickly and easily. All of the above examples are relatively simple to explain to customers. This post originated as an answer on Quora — Read the full thread here. </sys

Check your ChartMogul MRR on iOS with SmartPlan’s new app. SmartPlan is a simple online scheduling tool that makes running a business open and efficient for the whole team, by bringing the scheduling process online. Mathias Aggerbo and the Smartplan team have been using ChartMogul for some time to quickly and accurately measure their SaaS metrics. They wanted to take their metrics on the road and make them accessible from anywhere, so they decided to make use of the Metrics API and build a simple native iOS app: We’re addicted to our ChartMogul numbers. And as a new and bootstrapped small business we keep a close eye on our MRR and numbers of customers. Having a quick glance at these numbers made us create the app. The SmartPlan app allows anyone with a ChartMogul account to quickly view their MRR, ARR & Customer numbers on the go. Once SmartPlan decided to build the app, they headed over to the API documentation and hooked their native iOS code up to the Chartmogul API endpoint. The app requires the user to authenticate using the account token and secret key for their ChartMogul account. It was very easy. It’s a simple app we needed to make and the endpoints gives us an easy access to the numbers we needed. Got a ChartMogul account? Download the app today! The SmartPlan Revenue Tracking App is now available on the iTunes Store as a free download. If you have a ChartMogul account, you’ll be able to use the app to get a quick overview of your MRR data. And as Mathias quite rightly puts it: As a small business owner, numbers are king. And checking your revenue while sipping your morning coffee or when your head hits the pillow at night, is a great motivation. A few taps and you’re in reminded that people enjoy your product everyday. We can’t wait to see what else people do with the ChartMogul Metrics API, to make running their subscription or SaaS business that little bit more efficient. It’s open to anyone with a ChartMogul account, so check out the documentation and get building!

[INST] Check your ChartMogul MRR on iOS with SmartPlan’s new app [/INST]

SmartPlan is a simple online scheduling tool that makes running a business open and efficient for the whole team, by bringing the scheduling process online. Mathias Aggerbo and the Smartplan team have been using ChartMogul for some time to quickly and accurately measure their SaaS metrics. They wanted to take their metrics on the road and make them accessible from anywhere, so they decided to make use of the Metrics API and build a simple native iOS app: We’re addicted to our ChartMogul numbers. And as a new and bootstrapped small business we keep a close eye on our MRR and numbers of customers. Having a quick glance at these numbers made us create the app. The SmartPlan app allows anyone with a ChartMogul account to quickly view their MRR, ARR & Customer numbers on the go. Once SmartPlan decided to build the app, they headed over to the API documentation and hooked their native iOS code up to the Core&Outline API endpoint. The app requires the user to authenticate using the account token and secret key for their ChartMogul account. It was very easy. It’s a simple app we needed to make and the endpoints gives us an easy access to the numbers we needed. Got a ChartMogul account? Download the app today! The SmartPlan Revenue Tracking App is now available on the iTunes Store as a free download. If you have a ChartMogul account, you’ll be able to use the app to get a quick overview of your MRR data. And as Mathias quite rightly puts it: As a small business owner, numbers are king. And checking your revenue while sipping your morning coffee or when your head hits the pillow at night, is a great motivation. A few taps and you’re in reminded that people enjoy your product everyday. We can’t wait to see what else people do with the ChartMogul Metrics API, to make running their subscription or SaaS business that little bit more efficient. It’s open to anyone with a ChartMogul account, so check out the documentation and get building!

<sys> [INST] Check your ChartMogul MRR on iOS with SmartPlan’s new app [/INST] SmartPlan is a simple online scheduling tool that makes running a business open and efficient for the whole team, by bringing the scheduling process online. Mathias Aggerbo and the Smartplan team have been using ChartMogul for some time to quickly and accurately measure their SaaS metrics. They wanted to take their metrics on the road and make them accessible from anywhere, so they decided to make use of the Metrics API and build a simple native iOS app: We’re addicted to our ChartMogul numbers. And as a new and bootstrapped small business we keep a close eye on our MRR and numbers of customers. Having a quick glance at these numbers made us create the app. The SmartPlan app allows anyone with a ChartMogul account to quickly view their MRR, ARR & Customer numbers on the go. Once SmartPlan decided to build the app, they headed over to the API documentation and hooked their native iOS code up to the Core&Outline API endpoint. The app requires the user to authenticate using the account token and secret key for their ChartMogul account. It was very easy. It’s a simple app we needed to make and the endpoints gives us an easy access to the numbers we needed. Got a ChartMogul account? Download the app today! The SmartPlan Revenue Tracking App is now available on the iTunes Store as a free download. If you have a ChartMogul account, you’ll be able to use the app to get a quick overview of your MRR data. And as Mathias quite rightly puts it: As a small business owner, numbers are king. And checking your revenue while sipping your morning coffee or when your head hits the pillow at night, is a great motivation. A few taps and you’re in reminded that people enjoy your product everyday. We can’t wait to see what else people do with the ChartMogul Metrics API, to make running their subscription or SaaS business that little bit more efficient. It’s open to anyone with a ChartMogul account, so check out the documentation and get building! </sys

Check ChartMogul on the go with Numerics. We love to see developers build on top of our Metrics API, especially when it makes it easier for ChartMogul customers to access their data. So we’re incredibly excited to share that the team at Cynapse has brought ChartMogul data to its app, Numerics. Numerics is a real-time dashboarding app that spans all of your Apple devices, including Apple Watch and Apple TV. You can create personalized dashboards by choosing from hundreds of pre-designed KPI templates, and it integrates with major software like Google Analytics, Salesforce and Zendesk. Their new ChartMogul integration offers three widget packs: The Basic pack — which includes ARR, customer count and MRR — is free. The Advanced Stats and Plan Stats packs — which reveal the rest of your ChartMogul KPIs and lets you segment by plan — are available with Numerics Pro, which is $9.99 per month. “We believe the subscription economy is the future of business. ChartMogul provides unparalleled insights into your subscription business, and some of the most valuable metrics that a subscription business must track. Since the goal of Numerics is to keep users always updated with their most important KPIs, integrating Numerics with ChartMogul was an easy decision. With its integration in Numerics, users can now design live dashboards from ChartMogul metrics for their iPhone, iPad, Apple TV and Apple Watch to stay updated with their subscription KPIs everywhere.” Romasha Roy Choudhury, VP Product Design, Cynapse With Numerics, ChartMogul customers can monitor their KPIs from iOS devices and track week-over-week or month-over-month changes. ChartMogul calculations can be viewed as either top-level numbers or trendlines. Numerics helps ChartMogul customers stay up-to-date on KPIs, no matter where they are. Download Numerics and access your most important data from anywhere. Numerics is available in the App Store as a free download. We think this is an excellent use of our Metrics API, which is open to all ChartMogul customers. Have an idea for an integration? Check out the documentation and start building!

[INST] Check ChartMogul on the go with Numerics [/INST]

We love to see developers build on top of our Metrics API, especially when it makes it easier for ChartMogul customers to access their data. So we’re incredibly excited to share that the team at Cynapse has brought ChartMogul data to its app, Numerics. Numerics is a real-time dashboarding app that spans all of your Apple devices, including Apple Watch and Apple TV. You can create personalized dashboards by choosing from hundreds of pre-designed KPI templates, and it integrates with major software like Google Analytics, Salesforce and Zendesk. Their new ChartMogul integration offers three widget packs: The Basic pack — which includes ARR, customer count and MRR — is free. The Advanced Stats and Plan Stats packs — which reveal the rest of your ChartMogul KPIs and lets you segment by plan — are available with Numerics Pro, which is $9.99 per month. “We believe the subscription economy is the future of business. ChartMogul provides unparalleled insights into your subscription business, and some of the most valuable metrics that a subscription business must track. Since the goal of Numerics is to keep users always updated with their most important KPIs, integrating Numerics with ChartMogul was an easy decision. With its integration in Numerics, users can now design live dashboards from ChartMogul metrics for their iPhone, iPad, Apple TV and Apple Watch to stay updated with their subscription KPIs everywhere.” Romasha Roy Choudhury, VP Product Design, Cynapse With Numerics, ChartMogul customers can monitor their KPIs from iOS devices and track week-over-week or month-over-month changes. ChartMogul calculations can be viewed as either top-level numbers or trendlines. Numerics helps ChartMogul customers stay up-to-date on KPIs, no matter where they are. Download Numerics and access your most important data from anywhere. Numerics is available in the App Store as a free download. We think this is an excellent use of our Metrics API, which is open to all ChartMogul customers. Have an idea for an integration? Check out the documentation and start building!

<sys> [INST] Check ChartMogul on the go with Numerics [/INST] We love to see developers build on top of our Metrics API, especially when it makes it easier for ChartMogul customers to access their data. So we’re incredibly excited to share that the team at Cynapse has brought ChartMogul data to its app, Numerics. Numerics is a real-time dashboarding app that spans all of your Apple devices, including Apple Watch and Apple TV. You can create personalized dashboards by choosing from hundreds of pre-designed KPI templates, and it integrates with major software like Google Analytics, Salesforce and Zendesk. Their new ChartMogul integration offers three widget packs: The Basic pack — which includes ARR, customer count and MRR — is free. The Advanced Stats and Plan Stats packs — which reveal the rest of your ChartMogul KPIs and lets you segment by plan — are available with Numerics Pro, which is $9.99 per month. “We believe the subscription economy is the future of business. ChartMogul provides unparalleled insights into your subscription business, and some of the most valuable metrics that a subscription business must track. Since the goal of Numerics is to keep users always updated with their most important KPIs, integrating Numerics with ChartMogul was an easy decision. With its integration in Numerics, users can now design live dashboards from ChartMogul metrics for their iPhone, iPad, Apple TV and Apple Watch to stay updated with their subscription KPIs everywhere.” Romasha Roy Choudhury, VP Product Design, Cynapse With Numerics, ChartMogul customers can monitor their KPIs from iOS devices and track week-over-week or month-over-month changes. ChartMogul calculations can be viewed as either top-level numbers or trendlines. Numerics helps ChartMogul customers stay up-to-date on KPIs, no matter where they are. Download Numerics and access your most important data from anywhere. Numerics is available in the App Store as a free download. We think this is an excellent use of our Metrics API, which is open to all ChartMogul customers. Have an idea for an integration? Check out the documentation and start building! </sys

The Ultimate SaaS LTV Cheat Sheet. The trickiest SaaS metric, for good reason Have you ever seen the metric Customer Lifetime Value (LTV) mentioned somewhere, and wondered how exactly the final number was reached? Has an investor ever asked you to include LTV in a report or pitch, only for you to spend far too long pondering the best formula to use for your business? We’ve researched what all of the VCs and thought leaders in the SaaS space are currently saying on the topic of LTV, and put together this free cheat sheet for you to use as a reference. The cheat sheet covers: Definition: What really is LTV? The most widely-accepted LTV formula (and its limitations) Business characteristics that impact LTV A more advanced LTV formula, recently proposed by SaaS metrics grandmaster David Skok Grab your free PDF download below. Download for free If you find it useful, please share it with others who could also benefit from it, using the social icons to your left or the tweet below. Find the LTV of your customers with our free LTV Calculator Wait, there’s more! We also partnered with OmniCalculator to launch a SaaS Calculator tool to accompany the cheat sheet. With it, you can plug in numbers and instantly get an LTV estimate. Head on over to the calculator page to give it a try: Calculate my LTV NEW: The Ultimate SaaS LTV Cheat Sheet – Download the free PDF https://t.co/eKlcrfsKlV #SaaS pic.twitter.com/AHHkNWUzio — ChartMogul (@ChartMogul) May 19, 2016

[INST] The Ultimate SaaS LTV Cheat Sheet [/INST]

The trickiest SaaS metric, for good reason Have you ever seen the metric Customer Lifetime Value (LTV) mentioned somewhere, and wondered how exactly the final number was reached? Has an investor ever asked you to include LTV in a report or pitch, only for you to spend far too long pondering the best formula to use for your business? We’ve researched what all of the VCs and thought leaders in the SaaS space are currently saying on the topic of LTV, and put together this free cheat sheet for you to use as a reference. The cheat sheet covers: Definition: What really is LTV? The most widely-accepted LTV formula (and its limitations) Business characteristics that impact LTV A more advanced LTV formula, recently proposed by SaaS metrics grandmaster David Skok Grab your free PDF download below. Download for free If you find it useful, please share it with others who could also benefit from it, using the social icons to your left or the tweet below. Find the LTV of your customers with our free LTV Calculator Wait, there’s more! We also partnered with OmniCalculator to launch a SaaS Calculator tool to accompany the cheat sheet. With it, you can plug in numbers and instantly get an LTV estimate. Head on over to the calculator page to give it a try: Calculate my LTV NEW: The Ultimate SaaS LTV Cheat Sheet – Download the free PDF https://t.co/eKlcrfsKlV #SaaS pic.twitter.com/AHHkNWUzio — ChartMogul (@ChartMogul) May 19, 2016

<sys> [INST] The Ultimate SaaS LTV Cheat Sheet [/INST] The trickiest SaaS metric, for good reason Have you ever seen the metric Customer Lifetime Value (LTV) mentioned somewhere, and wondered how exactly the final number was reached? Has an investor ever asked you to include LTV in a report or pitch, only for you to spend far too long pondering the best formula to use for your business? We’ve researched what all of the VCs and thought leaders in the SaaS space are currently saying on the topic of LTV, and put together this free cheat sheet for you to use as a reference. The cheat sheet covers: Definition: What really is LTV? The most widely-accepted LTV formula (and its limitations) Business characteristics that impact LTV A more advanced LTV formula, recently proposed by SaaS metrics grandmaster David Skok Grab your free PDF download below. Download for free If you find it useful, please share it with others who could also benefit from it, using the social icons to your left or the tweet below. Find the LTV of your customers with our free LTV Calculator Wait, there’s more! We also partnered with OmniCalculator to launch a SaaS Calculator tool to accompany the cheat sheet. With it, you can plug in numbers and instantly get an LTV estimate. Head on over to the calculator page to give it a try: Calculate my LTV NEW: The Ultimate SaaS LTV Cheat Sheet – Download the free PDF https://t.co/eKlcrfsKlV #SaaS pic.twitter.com/AHHkNWUzio — ChartMogul (@ChartMogul) May 19, 2016 </sys

The SaaS growth ceiling: what happens when churn takes hold. What is the SaaS growth ceiling? Many SaaS businesses overlook the multiplicative effect that churn can have on their business, especially if new customer acquisition grows linearly. Since customer churn is a percentage of the number of customers, there will come a point when the number of new customers equals the number of churned customers. At this point, the growth rate effectively stalls to zero, finding an equilibrium state known as the growth ceiling. In this post, we’ll define the SaaS growth ceiling, show you how to calculate it, use the equation to understand the driving forces that impact the ceiling, and ultimately present three growth levers to use to avoid hitting the ceiling. Why is the SaaS growth ceiling important? The SaaS growth ceiling exposes the dramatic impact of churn on growth as the business scales. Understanding the growth ceiling and the dynamics behind its calculation allows you to forecast, plan, and ultimately solve these inevitable problems before this stage. Oftentimes, early SaaS growth is rapid, but succumbs to the growth ceiling as the churned customers cancels out newly acquired customers. If you have stakes in hitting aggressive growth targets, then it’s important to understand the why and the how of this ceiling. How to calculate your SaaS growth ceiling The formula for calculating the SaaS growth ceiling is simple. To start, let’s define the growth ceiling as the highest recurring revenue or the most customers your SaaS business is able achieve, given a specific churn rate. You can calculate the maximum number of customers by dividing the number of new customers by your churn rate percentage. Max customers = customer acquisition rate / % churn rate To get to a value for maximum revenue, you can simply multiply the maximum number of customers with your average customer lifetime value (LTV): Max MRR = max number of customers * average revenue per account (ARPA) It becomes easier to understand when we plot the growth ceiling on a chart, showing growth over time: Quick example SaaSCo. Acquires 100 new customers each year with an annual churn rate of 20%: 100 / 0.20 = 500 SaaSCo hits its growth ceiling at just 500 customers. And if the average revenue per account (ARPA) is $100: 500 * 100 = 50,000 The maximum achievable MRR for SaaSCo is just $50k. How to smash through the SaaS growth ceiling using growth levers The equations show us precisely which inputs and factors drive the growth ceiling. These three are, to hopefully no one’s surprise: new customer rate, lifetime value, and churn rate. Everyone’s business is different, and depending on what stage your business is in, you may be focused on a different metric. Here are some simple guidelines to help you identify which of the three levers is the most impactful for your SaaS business. If your churn rate is greater than industry average (4% to 6%) then this should be the first thing you should address. Imagine churn as the bottom of your funnel. If it’s too high, then you can widen the top of your funnel all you want, but most of your customers will fall straight through. Also, due to the inversely proportional nature of churn rate to the maximum number of customers, you’ll see a higher increase in max number of customers when the churn rate lowers from 3% to 2% than if the churn rate lowers from 5% to 4%. Increasing the LTV of your customer base is a surefire way to grow. Note that LTV grows linearly with the max revenue ceiling. Growing LTV is doubly important because its impact can be felt throughout your entire business. Higher lifetime values will raise the customer ceiling linearly, but also increase your cash balance, decrease revenue churn, and overall boost team morale. Find a way to grow customer acquisition exponentially via some viral mechanism. This is the only sure fire way to beat the growth ceiling, since new customers will outpace the churn rate (which is just a percentage of the customer base). Every business is different, so it’s hard to prescribe how to find the viral growth mechanism here, but you can learn more about some common viral growth loops here. Using the growth ceiling for positive change Calculating your business’s growth ceiling is another way to measure and understand its growth dynamics. Knowing when and where your business will plateau will not only motivate you to act in advance, but plan accordingly to impact key metrics such as churn or LTV. Often, the actions set in motion will not produce results overnight, but will take a long time before you can see a noticeable difference in your growth. Think of it as a countdown timer, to spur you on each day towards more sustainable growth.

[INST] The SaaS growth ceiling: what happens when churn takes hold [/INST]

What is the SaaS growth ceiling? Many SaaS businesses overlook the multiplicative effect that churn can have on their business, especially if new customer acquisition grows linearly. Since customer churn is a percentage of the number of customers, there will come a point when the number of new customers equals the number of churned customers. At this point, the growth rate effectively stalls to zero, finding an equilibrium state known as the growth ceiling. In this post, we’ll define the SaaS growth ceiling, show you how to calculate it, use the equation to understand the driving forces that impact the ceiling, and ultimately present three growth levers to use to avoid hitting the ceiling. Why is the SaaS growth ceiling important? The SaaS growth ceiling exposes the dramatic impact of churn on growth as the business scales. Understanding the growth ceiling and the dynamics behind its calculation allows you to forecast, plan, and ultimately solve these inevitable problems before this stage. Oftentimes, early SaaS growth is rapid, but succumbs to the growth ceiling as the churned customers cancels out newly acquired customers. If you have stakes in hitting aggressive growth targets, then it’s important to understand the why and the how of this ceiling. How to calculate your SaaS growth ceiling The formula for calculating the SaaS growth ceiling is simple. To start, let’s define the growth ceiling as the highest recurring revenue or the most customers your SaaS business is able achieve, given a specific churn rate. You can calculate the maximum number of customers by dividing the number of new customers by your churn rate percentage. Max customers = customer acquisition rate / % churn rate To get to a value for maximum revenue, you can simply multiply the maximum number of customers with your average customer lifetime value (LTV): Max MRR = max number of customers * average revenue per account (ARPA) It becomes easier to understand when we plot the growth ceiling on a chart, showing growth over time: Quick example SaaSCo. Acquires 100 new customers each year with an annual churn rate of 20%: 100 / 0.20 = 500 SaaSCo hits its growth ceiling at just 500 customers. And if the average revenue per account (ARPA) is $100: 500 * 100 = 50,000 The maximum achievable MRR for SaaSCo is just $50k. How to smash through the SaaS growth ceiling using growth levers The equations show us precisely which inputs and factors drive the growth ceiling. These three are, to hopefully no one’s surprise: new customer rate, lifetime value, and churn rate. Everyone’s business is different, and depending on what stage your business is in, you may be focused on a different metric. Here are some simple guidelines to help you identify which of the three levers is the most impactful for your SaaS business. If your churn rate is greater than industry average (4% to 6%) then this should be the first thing you should address. Imagine churn as the bottom of your funnel. If it’s too high, then you can widen the top of your funnel all you want, but most of your customers will fall straight through. Also, due to the inversely proportional nature of churn rate to the maximum number of customers, you’ll see a higher increase in max number of customers when the churn rate lowers from 3% to 2% than if the churn rate lowers from 5% to 4%. Increasing the LTV of your customer base is a surefire way to grow. Note that LTV grows linearly with the max revenue ceiling. Growing LTV is doubly important because its impact can be felt throughout your entire business. Higher lifetime values will raise the customer ceiling linearly, but also increase your cash balance, decrease revenue churn, and overall boost team morale. Find a way to grow customer acquisition exponentially via some viral mechanism. This is the only sure fire way to beat the growth ceiling, since new customers will outpace the churn rate (which is just a percentage of the customer base). Every business is different, so it’s hard to prescribe how to find the viral growth mechanism here, but you can learn more about some common viral growth loops here. Using the growth ceiling for positive change Calculating your business’s growth ceiling is another way to measure and understand its growth dynamics. Knowing when and where your business will plateau will not only motivate you to act in advance, but plan accordingly to impact key metrics such as churn or LTV. Often, the actions set in motion will not produce results overnight, but will take a long time before you can see a noticeable difference in your growth. Think of it as a countdown timer, to spur you on each day towards more sustainable growth.

<sys> [INST] The SaaS growth ceiling: what happens when churn takes hold [/INST] What is the SaaS growth ceiling? Many SaaS businesses overlook the multiplicative effect that churn can have on their business, especially if new customer acquisition grows linearly. Since customer churn is a percentage of the number of customers, there will come a point when the number of new customers equals the number of churned customers. At this point, the growth rate effectively stalls to zero, finding an equilibrium state known as the growth ceiling. In this post, we’ll define the SaaS growth ceiling, show you how to calculate it, use the equation to understand the driving forces that impact the ceiling, and ultimately present three growth levers to use to avoid hitting the ceiling. Why is the SaaS growth ceiling important? The SaaS growth ceiling exposes the dramatic impact of churn on growth as the business scales. Understanding the growth ceiling and the dynamics behind its calculation allows you to forecast, plan, and ultimately solve these inevitable problems before this stage. Oftentimes, early SaaS growth is rapid, but succumbs to the growth ceiling as the churned customers cancels out newly acquired customers. If you have stakes in hitting aggressive growth targets, then it’s important to understand the why and the how of this ceiling. How to calculate your SaaS growth ceiling The formula for calculating the SaaS growth ceiling is simple. To start, let’s define the growth ceiling as the highest recurring revenue or the most customers your SaaS business is able achieve, given a specific churn rate. You can calculate the maximum number of customers by dividing the number of new customers by your churn rate percentage. Max customers = customer acquisition rate / % churn rate To get to a value for maximum revenue, you can simply multiply the maximum number of customers with your average customer lifetime value (LTV): Max MRR = max number of customers * average revenue per account (ARPA) It becomes easier to understand when we plot the growth ceiling on a chart, showing growth over time: Quick example SaaSCo. Acquires 100 new customers each year with an annual churn rate of 20%: 100 / 0.20 = 500 SaaSCo hits its growth ceiling at just 500 customers. And if the average revenue per account (ARPA) is $100: 500 * 100 = 50,000 The maximum achievable MRR for SaaSCo is just $50k. How to smash through the SaaS growth ceiling using growth levers The equations show us precisely which inputs and factors drive the growth ceiling. These three are, to hopefully no one’s surprise: new customer rate, lifetime value, and churn rate. Everyone’s business is different, and depending on what stage your business is in, you may be focused on a different metric. Here are some simple guidelines to help you identify which of the three levers is the most impactful for your SaaS business. If your churn rate is greater than industry average (4% to 6%) then this should be the first thing you should address. Imagine churn as the bottom of your funnel. If it’s too high, then you can widen the top of your funnel all you want, but most of your customers will fall straight through. Also, due to the inversely proportional nature of churn rate to the maximum number of customers, you’ll see a higher increase in max number of customers when the churn rate lowers from 3% to 2% than if the churn rate lowers from 5% to 4%. Increasing the LTV of your customer base is a surefire way to grow. Note that LTV grows linearly with the max revenue ceiling. Growing LTV is doubly important because its impact can be felt throughout your entire business. Higher lifetime values will raise the customer ceiling linearly, but also increase your cash balance, decrease revenue churn, and overall boost team morale. Find a way to grow customer acquisition exponentially via some viral mechanism. This is the only sure fire way to beat the growth ceiling, since new customers will outpace the churn rate (which is just a percentage of the customer base). Every business is different, so it’s hard to prescribe how to find the viral growth mechanism here, but you can learn more about some common viral growth loops here. Using the growth ceiling for positive change Calculating your business’s growth ceiling is another way to measure and understand its growth dynamics. Knowing when and where your business will plateau will not only motivate you to act in advance, but plan accordingly to impact key metrics such as churn or LTV. Often, the actions set in motion will not produce results overnight, but will take a long time before you can see a noticeable difference in your growth. Think of it as a countdown timer, to spur you on each day towards more sustainable growth. </sys

How We Combined Churn Analytics with Customer Feedback to Develop a Better Product. Churn rates can keep business owners and leaders up into the wee hours of the night, head-scratching why it can’t be reduced to a reasonable amount. But have no fear: a high churn rate is an opportunity to improve! It highlights the bottlenecks and weaknesses of your brand’s customer experience. When churn starts to subside, it can indicate the brand is delivering exceptional quality service that is capable enough to earn customer loyalty. While a business may be capable of acquiring new customers at a rapid pace, keeping your current customers on board is mission-critical to your team’s success. According to Wheelhouse Advisors, 70% of companies say it is much cheaper to keep their existing customers than acquiring new ones. In our case, we used ChartMogul to perform churn analytics and combined this with our own product Usersnap to get feedback on why customers were leaving. We were able to figure out why our churn was so high. It gave us the necessary food for thought to innovate, and create new offers for our customer base to give them more moments of delight while keeping them with us for a longer period of time. Using ChartMogul for quantitative data Being one of the most promising platforms for consolidating and streamlining billing data, we onboarded with ChartMogul as part of our customer behavior strategy. Since we are a customer-centric company, it is essential to have the right tools that address their decisions and voice. It integrated easily with our brand’s technology stack, and given the fact that we want to deliver products that blow our customers’ minds, ChartMogul gave us the dashboard we needed to better understand our customers. We connected it with relevant billing service providers so we were in a much better position to track quantitative data from a centralized location. Monthly recurring revenue (MRR), customer lifetime value (LTV), churn rates, and the overall business performance were on the dashboard and easy to view. Importantly, there were no expert requirements to manage the software, which meant smart brains with little technical knowledge could get down to the business of helping our customers build feedback-driven products. Collecting qualitative feedback from customers ChartMogul was quite helpful in terms of highlighting the number of customers that left us, however, we also wanted to know why they were leaving. We, as many companies do, “ate our own dog food”, and placed our own qualitative feedback collectors at various customer interaction points. Usersnap’s calling card is about getting actionable user feedback, whether it is screenshot bug reports or experience ratings, and anything in-between. We live and breathe customer-centricity, and placing our product along their journey gave our customers the full opportunity to provide their honest feedback about their experience. This helped us to get valuable insight into the underlying reasons for churning, and improve our overall decision-making. No matter which feedback collection company one decides to go with, these examples were quite useful for obtaining the qualitative feedback needed to triage and take action: Quick pop-ups A non-intrusive pop-up was quite helpful in getting the required feedback. When embedded into a website, it allows customers to share what they are thinking about regarding our brand, website, and products. Pop-ups can be used to ask different types of questions as customers are using the product Feedback buttons We also employed a more passive and subtle way to collect feedback. Since it is a two-step process, customers clicking on the button are more likely to leave an actionable remark. This puts the ball in their court: instead of us asking for feedback, we make it optional and find out who actually cares, as well as what they care about. Feedback can be collected quickly on the go Follow-up emails When a user is aligned with what we believe in (and purchases our product), we send an email to the customer asking them about the overall service quality and their experience. We also use that opportunity to get valuable information about our brand, and how we can further improve. Following up with customized emails is key for collecting user feedback Apart from these, there are plenty of active ways to collect feedback. For instance, we also use live chat so our Customer Success team can directly talk to the customer about their experience when we are approached. Choosing the right strategy and taking your target audience into account are crucial to this. Deploy surveys at churn points Maybe you’ve tried to uninstall a program or even tried to disable your Facebook account and noticed that they have a built-in system that inquires about the reason for leaving or stopping to use that service. It allows them to collect accurate information at the point of churn. That’s exactly what we did. Customers on the brink of churn can still be retained with specialized campaigns We designed a survey that told customers that we’re sorry to see them go and asked them about the reason they were leaving us. Ask churning customers what influenced their decision Since customers don’t have any further interaction with the business or they’ve gotten frustrated by something in the product, they are more willing to shout out why they are leaving (sometimes from the rooftops). This strategy allowed us to learn more about our business as a whole, and what we could do better. Combining ChartMogul and Usersnap to see the full picture Once we had sufficient quantitative data, using the ChartMogul dashboard and direct qualitative feedback from our paying customers, it was time to combine them to identify the primary root causes of churn. Using qualitative and quantitative data in tandem allows you to determine the ‘what’ and ‘why’ simultaneously. For us, this brought about that additional “oomph” to better understand our churn situation, and devise an adequate strategy. What did we find? The first thing we calculated was our average churn rate automatically in ChartMogul. Compared to the industry average of SaaS at around 5%, ours was a bit high. Usersnap’s churn stood at ~6% before they started implementing special campaigns to curb it. We went through hundreds of feedback items from our customers, and we were able to figure out the issue was inherent to our system. We did this by categorizing our customer churn feedback in Usersnap based on the feedback our ex-customers gave us. Our business strategy was designed in such a way that it was not conducive to retain customers. Since we provide a product used for QA and visual bug tracking, which is more often than not project-based, customers would leave as soon as the project was over. So even if customers were leaving, it wasn’t because they wanted to throw tomatoes at our product, and a pie in our faces. They are indeed known as our “happy churners”. In total, we realized that this project-based churn figure accounted for around half of our entire churns on a monthly basis. This is mind-blowing for any company looking to figure out ways to keep customers happy, evolve, and provide new offers to keep them on-board. Making the shift to a full customer feedback platform We had to come up with a more practical approach, offering products that enable us to retain our customers and cut down the churn rate. It took a lot of brainstorming and evaluation of data, but we were finally able to make better choices. We listened to our customers who gave us feedback on what they’d like to see more of. Besides the feedback collectors discussed above, we also asked our customers to tell us about features they’d like to see. We realized we could take feedback that was thoroughly described and frequent, and make it fully actionable (by building something for customers that they’d like). By realizing that our QA specialty is project-oriented and thus has a definitive end, we evolved into customer feedback, which is more open-ended and thus increases LTV and retention. We built new use cases and features to address the needs of our current and future customers. “Happy” churn can be misleading. The culmination of our churn analytics and feedback review helped create the Usersnap Platform, which created a home for all of our use cases (CX and QA). This opened up the possibilities to our customers to see the value we can bring across many of their business needs, and ultimately reduce churn over a long-term period. Churn Analytics + Customer Feedback = Clarity A lot of businesses (like us) can struggle with retaining customers, or even understanding why they’re leaving in the first place. Implementing a multi-prong strategy, which can position your enterprise to collect customer feedback (quantitative and qualitative) allows for the right product evolution on behalf of your customers. In our situation, we used ChartMogul to identify all of our billing metrics, and specifically churn analytics, to help get to the heart of a pain we encountered: why were customers leaving us? This, combined with asking our customers to tell us why they were leaving, uncovered new insights that allowed us to gain clarity and take action. Then, we relied on Usersnap to collect necessary customer feedback, and evolved our offerings to be able to better meet their needs with our Usersnap Platform. Certainly, churn is a constant challenge for every company. However, with a holistic overview and approach that shows us the “what” and the “why” concerning churn, we’re able to make products that our customers love, enabling them to do the same for their customers too. About the author: Klaus-M. is a growth-driven entrepreneur and built growth and sales teams for various companies and startups. He co-founded two martech companies that were acquired – Gentics (by APA) and Wikidocs (by Atlassian). Klaus-M. focuses on growth of Usersnap and on customer research. He’s an enthusiastic triathlete and an advocate for lifelong learning (having also written a bestselling book).

[INST] How We Combined Churn Analytics with Customer Feedback to Develop a Better Product [/INST]

Churn rates can keep business owners and leaders up into the wee hours of the night, head-scratching why it can’t be reduced to a reasonable amount. But have no fear: a high churn rate is an opportunity to improve! It highlights the bottlenecks and weaknesses of your brand’s customer experience. When churn starts to subside, it can indicate the brand is delivering exceptional quality service that is capable enough to earn customer loyalty. While a business may be capable of acquiring new customers at a rapid pace, keeping your current customers on board is mission-critical to your team’s success. According to Wheelhouse Advisors, 70% of companies say it is much cheaper to keep their existing customers than acquiring new ones. In our case, we used ChartMogul to perform churn analytics and combined this with our own product Usersnap to get feedback on why customers were leaving. We were able to figure out why our churn was so high. It gave us the necessary food for thought to innovate, and create new offers for our customer base to give them more moments of delight while keeping them with us for a longer period of time. Using ChartMogul for quantitative data Being one of the most promising platforms for consolidating and streamlining billing data, we onboarded with ChartMogul as part of our customer behavior strategy. Since we are a customer-centric company, it is essential to have the right tools that address their decisions and voice. It integrated easily with our brand’s technology stack, and given the fact that we want to deliver products that blow our customers’ minds, ChartMogul gave us the dashboard we needed to better understand our customers. We connected it with relevant billing service providers so we were in a much better position to track quantitative data from a centralized location. Monthly recurring revenue (MRR), customer lifetime value (LTV), churn rates, and the overall business performance were on the dashboard and easy to view. Importantly, there were no expert requirements to manage the software, which meant smart brains with little technical knowledge could get down to the business of helping our customers build feedback-driven products. Collecting qualitative feedback from customers ChartMogul was quite helpful in terms of highlighting the number of customers that left us, however, we also wanted to know why they were leaving. We, as many companies do, “ate our own dog food”, and placed our own qualitative feedback collectors at various customer interaction points. Usersnap’s calling card is about getting actionable user feedback, whether it is screenshot bug reports or experience ratings, and anything in-between. We live and breathe customer-centricity, and placing our product along their journey gave our customers the full opportunity to provide their honest feedback about their experience. This helped us to get valuable insight into the underlying reasons for churning, and improve our overall decision-making. No matter which feedback collection company one decides to go with, these examples were quite useful for obtaining the qualitative feedback needed to triage and take action: Quick pop-ups A non-intrusive pop-up was quite helpful in getting the required feedback. When embedded into a website, it allows customers to share what they are thinking about regarding our brand, website, and products. Pop-ups can be used to ask different types of questions as customers are using the product Feedback buttons We also employed a more passive and subtle way to collect feedback. Since it is a two-step process, customers clicking on the button are more likely to leave an actionable remark. This puts the ball in their court: instead of us asking for feedback, we make it optional and find out who actually cares, as well as what they care about. Feedback can be collected quickly on the go Follow-up emails When a user is aligned with what we believe in (and purchases our product), we send an email to the customer asking them about the overall service quality and their experience. We also use that opportunity to get valuable information about our brand, and how we can further improve. Following up with customized emails is key for collecting user feedback Apart from these, there are plenty of active ways to collect feedback. For instance, we also use live chat so our Customer Success team can directly talk to the customer about their experience when we are approached. Choosing the right strategy and taking your target audience into account are crucial to this. Deploy surveys at churn points Maybe you’ve tried to uninstall a program or even tried to disable your Facebook account and noticed that they have a built-in system that inquires about the reason for leaving or stopping to use that service. It allows them to collect accurate information at the point of churn. That’s exactly what we did. Customers on the brink of churn can still be retained with specialized campaigns We designed a survey that told customers that we’re sorry to see them go and asked them about the reason they were leaving us. Ask churning customers what influenced their decision Since customers don’t have any further interaction with the business or they’ve gotten frustrated by something in the product, they are more willing to shout out why they are leaving (sometimes from the rooftops). This strategy allowed us to learn more about our business as a whole, and what we could do better. Combining ChartMogul and Usersnap to see the full picture Once we had sufficient quantitative data, using the ChartMogul dashboard and direct qualitative feedback from our paying customers, it was time to combine them to identify the primary root causes of churn. Using qualitative and quantitative data in tandem allows you to determine the ‘what’ and ‘why’ simultaneously. For us, this brought about that additional “oomph” to better understand our churn situation, and devise an adequate strategy. What did we find? The first thing we calculated was our average churn rate automatically in ChartMogul. Compared to the industry average of SaaS at around 5%, ours was a bit high. Usersnap’s churn stood at ~6% before they started implementing special campaigns to curb it. We went through hundreds of feedback items from our customers, and we were able to figure out the issue was inherent to our system. We did this by categorizing our customer churn feedback in Usersnap based on the feedback our ex-customers gave us. Our business strategy was designed in such a way that it was not conducive to retain customers. Since we provide a product used for QA and visual bug tracking, which is more often than not project-based, customers would leave as soon as the project was over. So even if customers were leaving, it wasn’t because they wanted to throw tomatoes at our product, and a pie in our faces. They are indeed known as our “happy churners”. In total, we realized that this project-based churn figure accounted for around half of our entire churns on a monthly basis. This is mind-blowing for any company looking to figure out ways to keep customers happy, evolve, and provide new offers to keep them on-board. Making the shift to a full customer feedback platform We had to come up with a more practical approach, offering products that enable us to retain our customers and cut down the churn rate. It took a lot of brainstorming and evaluation of data, but we were finally able to make better choices. We listened to our customers who gave us feedback on what they’d like to see more of. Besides the feedback collectors discussed above, we also asked our customers to tell us about features they’d like to see. We realized we could take feedback that was thoroughly described and frequent, and make it fully actionable (by building something for customers that they’d like). By realizing that our QA specialty is project-oriented and thus has a definitive end, we evolved into customer feedback, which is more open-ended and thus increases LTV and retention. We built new use cases and features to address the needs of our current and future customers. “Happy” churn can be misleading. The culmination of our churn analytics and feedback review helped create the Usersnap Platform, which created a home for all of our use cases (CX and QA). This opened up the possibilities to our customers to see the value we can bring across many of their business needs, and ultimately reduce churn over a long-term period. Churn Analytics + Customer Feedback = Clarity A lot of businesses (like us) can struggle with retaining customers, or even understanding why they’re leaving in the first place. Implementing a multi-prong strategy, which can position your enterprise to collect customer feedback (quantitative and qualitative) allows for the right product evolution on behalf of your customers. In our situation, we used ChartMogul to identify all of our billing metrics, and specifically churn analytics, to help get to the heart of a pain we encountered: why were customers leaving us? This, combined with asking our customers to tell us why they were leaving, uncovered new insights that allowed us to gain clarity and take action. Then, we relied on Usersnap to collect necessary customer feedback, and evolved our offerings to be able to better meet their needs with our Usersnap Platform. Certainly, churn is a constant challenge for every company. However, with a holistic overview and approach that shows us the “what” and the “why” concerning churn, we’re able to make products that our customers love, enabling them to do the same for their customers too. About the author: Klaus-M. is a growth-driven entrepreneur and built growth and sales teams for various companies and startups. He co-founded two martech companies that were acquired – Gentics (by APA) and Wikidocs (by Atlassian). Klaus-M. focuses on growth of Usersnap and on customer research. He’s an enthusiastic triathlete and an advocate for lifelong learning (having also written a bestselling book).

<sys> [INST] How We Combined Churn Analytics with Customer Feedback to Develop a Better Product [/INST] Churn rates can keep business owners and leaders up into the wee hours of the night, head-scratching why it can’t be reduced to a reasonable amount. But have no fear: a high churn rate is an opportunity to improve! It highlights the bottlenecks and weaknesses of your brand’s customer experience. When churn starts to subside, it can indicate the brand is delivering exceptional quality service that is capable enough to earn customer loyalty. While a business may be capable of acquiring new customers at a rapid pace, keeping your current customers on board is mission-critical to your team’s success. According to Wheelhouse Advisors, 70% of companies say it is much cheaper to keep their existing customers than acquiring new ones. In our case, we used ChartMogul to perform churn analytics and combined this with our own product Usersnap to get feedback on why customers were leaving. We were able to figure out why our churn was so high. It gave us the necessary food for thought to innovate, and create new offers for our customer base to give them more moments of delight while keeping them with us for a longer period of time. Using ChartMogul for quantitative data Being one of the most promising platforms for consolidating and streamlining billing data, we onboarded with ChartMogul as part of our customer behavior strategy. Since we are a customer-centric company, it is essential to have the right tools that address their decisions and voice. It integrated easily with our brand’s technology stack, and given the fact that we want to deliver products that blow our customers’ minds, ChartMogul gave us the dashboard we needed to better understand our customers. We connected it with relevant billing service providers so we were in a much better position to track quantitative data from a centralized location. Monthly recurring revenue (MRR), customer lifetime value (LTV), churn rates, and the overall business performance were on the dashboard and easy to view. Importantly, there were no expert requirements to manage the software, which meant smart brains with little technical knowledge could get down to the business of helping our customers build feedback-driven products. Collecting qualitative feedback from customers ChartMogul was quite helpful in terms of highlighting the number of customers that left us, however, we also wanted to know why they were leaving. We, as many companies do, “ate our own dog food”, and placed our own qualitative feedback collectors at various customer interaction points. Usersnap’s calling card is about getting actionable user feedback, whether it is screenshot bug reports or experience ratings, and anything in-between. We live and breathe customer-centricity, and placing our product along their journey gave our customers the full opportunity to provide their honest feedback about their experience. This helped us to get valuable insight into the underlying reasons for churning, and improve our overall decision-making. No matter which feedback collection company one decides to go with, these examples were quite useful for obtaining the qualitative feedback needed to triage and take action: Quick pop-ups A non-intrusive pop-up was quite helpful in getting the required feedback. When embedded into a website, it allows customers to share what they are thinking about regarding our brand, website, and products. Pop-ups can be used to ask different types of questions as customers are using the product Feedback buttons We also employed a more passive and subtle way to collect feedback. Since it is a two-step process, customers clicking on the button are more likely to leave an actionable remark. This puts the ball in their court: instead of us asking for feedback, we make it optional and find out who actually cares, as well as what they care about. Feedback can be collected quickly on the go Follow-up emails When a user is aligned with what we believe in (and purchases our product), we send an email to the customer asking them about the overall service quality and their experience. We also use that opportunity to get valuable information about our brand, and how we can further improve. Following up with customized emails is key for collecting user feedback Apart from these, there are plenty of active ways to collect feedback. For instance, we also use live chat so our Customer Success team can directly talk to the customer about their experience when we are approached. Choosing the right strategy and taking your target audience into account are crucial to this. Deploy surveys at churn points Maybe you’ve tried to uninstall a program or even tried to disable your Facebook account and noticed that they have a built-in system that inquires about the reason for leaving or stopping to use that service. It allows them to collect accurate information at the point of churn. That’s exactly what we did. Customers on the brink of churn can still be retained with specialized campaigns We designed a survey that told customers that we’re sorry to see them go and asked them about the reason they were leaving us. Ask churning customers what influenced their decision Since customers don’t have any further interaction with the business or they’ve gotten frustrated by something in the product, they are more willing to shout out why they are leaving (sometimes from the rooftops). This strategy allowed us to learn more about our business as a whole, and what we could do better. Combining ChartMogul and Usersnap to see the full picture Once we had sufficient quantitative data, using the ChartMogul dashboard and direct qualitative feedback from our paying customers, it was time to combine them to identify the primary root causes of churn. Using qualitative and quantitative data in tandem allows you to determine the ‘what’ and ‘why’ simultaneously. For us, this brought about that additional “oomph” to better understand our churn situation, and devise an adequate strategy. What did we find? The first thing we calculated was our average churn rate automatically in ChartMogul. Compared to the industry average of SaaS at around 5%, ours was a bit high. Usersnap’s churn stood at ~6% before they started implementing special campaigns to curb it. We went through hundreds of feedback items from our customers, and we were able to figure out the issue was inherent to our system. We did this by categorizing our customer churn feedback in Usersnap based on the feedback our ex-customers gave us. Our business strategy was designed in such a way that it was not conducive to retain customers. Since we provide a product used for QA and visual bug tracking, which is more often than not project-based, customers would leave as soon as the project was over. So even if customers were leaving, it wasn’t because they wanted to throw tomatoes at our product, and a pie in our faces. They are indeed known as our “happy churners”. In total, we realized that this project-based churn figure accounted for around half of our entire churns on a monthly basis. This is mind-blowing for any company looking to figure out ways to keep customers happy, evolve, and provide new offers to keep them on-board. Making the shift to a full customer feedback platform We had to come up with a more practical approach, offering products that enable us to retain our customers and cut down the churn rate. It took a lot of brainstorming and evaluation of data, but we were finally able to make better choices. We listened to our customers who gave us feedback on what they’d like to see more of. Besides the feedback collectors discussed above, we also asked our customers to tell us about features they’d like to see. We realized we could take feedback that was thoroughly described and frequent, and make it fully actionable (by building something for customers that they’d like). By realizing that our QA specialty is project-oriented and thus has a definitive end, we evolved into customer feedback, which is more open-ended and thus increases LTV and retention. We built new use cases and features to address the needs of our current and future customers. “Happy” churn can be misleading. The culmination of our churn analytics and feedback review helped create the Usersnap Platform, which created a home for all of our use cases (CX and QA). This opened up the possibilities to our customers to see the value we can bring across many of their business needs, and ultimately reduce churn over a long-term period. Churn Analytics + Customer Feedback = Clarity A lot of businesses (like us) can struggle with retaining customers, or even understanding why they’re leaving in the first place. Implementing a multi-prong strategy, which can position your enterprise to collect customer feedback (quantitative and qualitative) allows for the right product evolution on behalf of your customers. In our situation, we used ChartMogul to identify all of our billing metrics, and specifically churn analytics, to help get to the heart of a pain we encountered: why were customers leaving us? This, combined with asking our customers to tell us why they were leaving, uncovered new insights that allowed us to gain clarity and take action. Then, we relied on Usersnap to collect necessary customer feedback, and evolved our offerings to be able to better meet their needs with our Usersnap Platform. Certainly, churn is a constant challenge for every company. However, with a holistic overview and approach that shows us the “what” and the “why” concerning churn, we’re able to make products that our customers love, enabling them to do the same for their customers too. About the author: Klaus-M. is a growth-driven entrepreneur and built growth and sales teams for various companies and startups. He co-founded two martech companies that were acquired – Gentics (by APA) and Wikidocs (by Atlassian). Klaus-M. focuses on growth of Usersnap and on customer research. He’s an enthusiastic triathlete and an advocate for lifelong learning (having also written a bestselling book). </sys

Where does SoundCloud Go from here?. SoundCloud in the news Let’s take a look at some of the news headlines for SoundCloud over the last couple of months: “SoundCloud in danger of running out of cash” (Financial Times) “Soundcloud’s top execs are leaving at an incredibly awkward time” (QZ) “Is SoundCloud Imploding? Top Execs Jump Ship as ‘Desperate’ Fundraising Begins” (Digital Music News) You don’t have to be an expert analyst to understand that the company is going through severe financial difficulties — even looking past some of the the more sensationalist headlines. Despite the doom and gloom SoundCloud holds a lot of good will in the eyes of users and indie artists, some of whom have built a career from scratch using the platform: “This is for every indie artist. Shouts out to SoundCloud for holding me down. It’s another one, baby!” (Chance the Rapper shouts out SoundCloud in Grammys acceptance speech – The Verge) After rising to fame, Chance The Rapper still offers his work for free on SoundCloud (source: soundcloud.com/chancetherapper) So this is the bottom line, then: SoundCloud is a product for the artists and the listeners. It was built out of passion, to solve a problem that its founders were facing, and has changed the way that young up-and-coming talent can grow and connect with their fanbase — and this is the part of the business that came first. But when it comes to converting such positive sentiment into revenue, things are far from working well. The poster child of Berlin’s startup scene The ever-present St Oberholz cafe at Berlin’s Rosenthaler Platz There’s a café not 5 minutes from my apartment in Berlin, where the SoundCloud founders are rumoured to have put together the very first version of the cloud-based streaming app. Perhaps it’s for this reason that I feel some kind of connection to the company. Although having never worked there myself, a number of friends and acquaintances have joined and left over the years. It’s a staple of the city, and somewhere most people in tech seem to have some form of connection to. The company also plays its part when it comes to fostering the community by hosting a range of engineering meetups and other startup events. For those in the Berlin tech scene, SoundCloud is seen as something of a flagship company for the city — for at least as long as I can remember. The tech industry here is still relatively immature compared to other European cities like London, which has given birth to a number of high-profile names and big exits. It’s still not clear when that will change, given the proportion of early-stage startups still dominating headlines. Despite being such a recognized brand in Europe and worldwide, the SoundCloud product is hard to categorize in a world now shared with the big names and deep pockets of Spotify and Apple. If SoundCloud wasn’t around, it’s still not clear who would take up the banner of “Berlin startup flagship” in their place. Fact sheet Founded: 2007 Launched: 2008 Funding: $193M across 6 rounds Founders: Eric Wahlforss, Alexander Ljung Users (total): >175 million Users (paid): ? (not public) Catalog size: >135 million Back in a different era… It’s important to understand the space that SoundCloud was born into, back in 2008. The “YouTube of audio” was launched at a time when YouTube was barely a shell of what it is today. At a time when MySpace was dominating as a platform for independent musicians, SoundCloud was intended to provide a better way for creators to share and present their music to an audience on the web — something that still applies today. In comparison to MySpace, music on SoundCloud was more shareable, compatible with social media and more “open” in general — something that became increasingly important over time with the rise of platforms like Facebook. In many ways this focus has paid off for the platform; today, I’d argue that the variety of indie content from individual artists is the platform’s single unique selling point for consumers (but more on that later). If you’re old enough, this should bring back some memories… (source: howstuffworks.com) The elephant in the room: Revenue Over the years, the team have had several attempts at monetizing the platform in a number of different ways. Creator subscriptions (SoundCloud Pro) As creators of a podcast, we pay for SoundCloud Pro at ChartMogul. With this subscription, you’re essentially just paying for more storage and stats on listeners. You’ll hit the limits of the free plan once you upload 3 hours of audio, so it’s basically a must-have for any serious creators on the platform. I can’t help but think that getting creators to pay for storage is a backwards way of approaching monetization that only serves to limit the content on the platform. YouTube doesn’t charge for the number of hours of video uploaded to your account — they simply monetize on the user side through their ad platform. Listener subscriptions (SoundCloud Go) I was genuinely excited when SoundCloud Go was launched back in March 2016. But I arrived at the announcement page and was instantly confused by the majority of messaging: The pricing page for SoundCloud Go (source: soundcloud.com/go) “Listen offline” – okay, this is a nice addition. Not worth the $9.99 alone though. “Ad-free” – I don’t currently hear any ads when using SoundCloud! How is this relevant? (I guess they just we’re running ads in my country at the time) “135+ million tracks” – This is quite clearly misleading, because they don’t compare how many tracks you get access to with the standard product. (my bet is that it’s not that much short of 135 million). So I’m left to comparing “135+ million tracks” with “not 135+ million tracks”. Great… “SoundCloud Go full tracks” – What?! To this day I can’t make sense of this. How is “SoundCloud Go full tracks” a benefit of SoundCloud Go? Didn’t we already cover that in the number of tracks above?! So you can see why I didn’t buy. This is the LEAST compelling subscription pricing page I’ve seen for a long time! I’m an early-adopter proficient in tech, so how do they plan to sell this to… my Mum, for example?! It’s too vague. I pay £10/month for Spotify. If someone told me I could pay £15/month for “even more tracks”, how am I supposed to understand if that’s a valuable proposition for me? In reality, what they’re really suggesting is that they’re adding access to licensed tracks from the various record company deals they’ve signed (UMG, Sony, Warner etc.). But how is the user supposed to make this distinction? I can’t help but feel like the company made some serious concessions to close the various deals they needed with each record company – features like paid-only content are clearly there to appease the rights holders, and for listeners only serve to confuse and frustrate. Streaming audio ads Following in Spotify’s footsteps, SoundCloud inserts streaming ads in between tracks for free users of the service. Actually, when you look at the type of product SoundCloud represents, this form of monetization seems to make the most sense. SoundCloud has: The largest catalog of content of any streaming music service Free, user-generated content Some licensed content mixed in There’s definitely another streaming platform with very similar characteristics: YouTube. How is YouTube monetized? By running ads in its free user-generated content. (Okay, I know there’s YouTube Red, the premium subscription too, but that still represents a minor chunk of the platform’s revenue at this point). For whatever reason, SoundCloud has failed to imitate the YouTube model work effectively. This could be due to reasons of scale, or subtleties in the audio format when compared to video. Or the product execution. User experience woes The core user interface of SoundCloud hasn’t changed considerably over the years, and while the web experience was never renowned for its elegance, it remains functional without too many surprises. The mobile app however… well where do I start? All you have to do is read some of the blog comments from the announcement back in 2014 when the latest re-design went live. Here is just one of many comments on the post: “SoundCloud’s new app is one of the most unfortunate business decisions I have ever seen a company make. It seems they have forgotten that without the musicians that upload music there wouldn’t be people to listen.” The backlash was extensive, and almost entirely targeted towards the removal of features that artists relied upon, and the addition of a new, completely unintuitive user interface. The mobile app confuses me on almost a daily basis when I tap the wrong thing, swipe the wrong way or play a track without meaning to. And I’ve been using it since 2014! I don’t think I’ve felt this way since trying to use Snapchat for the first time. SoundCloud is the only streaming audio platform I’ve used that has a feed, i.e. I can see a chronological stream of new tracks that are posted and recommended by people I follow. I like that! One of the main problems I have is with discovery. With so much user-created and indie content on the platform, my ability to find and play new music that fits my taste profile is shockingly low. So what went wrong? 1. Shift in focus to directly compete with licensed streaming platforms The pivot towards including licensed tracks on SoundCloud means competing with the big players in the space (Spotify, Apple Music, Google Play music) in a much more direct fashion. Spotify touts 43 million paying subscribers (out of over 100 million accounts overall), and is still struggling to break even at that scale with its licensing model. Given the mixed messaging around SoundCloud Go (see above), it’s not completely surprising that the service is rumored to have no more than a few hundred thousand paying listeners – although no official numbers exist for this yet. 2. Scattered attempts at monetization As highlighted above, each separate attempt at monetization has effectively attacked the product from every possible angle, leaving a fragmented user experience. The result is that users suffer from a sense of penny-pinching, pushed to part with their money at every opportunity. 3. Poor product evolution and vision This is in all likelihood a result of the search for reliable revenue mentioned above. As a listener, it’s not clear to me what SoundCloud is any more. Where does it fit into the streaming music landscape? It doesn’t feel like a product that can stand on its own as an alternative to Spotify or Apple Music, but it’s still asking for ten of my hard earned dollars every month. 4. A big bet on converting free users to paid If SoundCloud was to succeed in the launch of paid subscriptions (SoundCloud Go), they needed to convert a serious number of their free users over to paid accounts. Spotify is incredibly proud of its proposed free-to-paid conversion rate of 20-25% — which dwarves most other similar freemium businesses. In the recent Financial Times report, analyst Mark Mulligan, founder of Midea Research stated: “It will never get conversion rates [from free to paid] anywhere close to Spotify’s 20-25 per cent… The best it could ever hope for was 2 to 3 per cent, and in doing so it will alienate much of its userbase.” It’s not clear what kind of conversion rate SoundCloud Go has seen in the months since launch, but the outlook isn’t promising. What can subscription businesses learn from this? 1. Consumer subscriptions require unparalleled scale In a market where margins are virtually non-existent, your business may not be remotely viable unless you’re the single dominant player in the market. Spotify has eaten up a large chunk of the music streaming market, but even at 43 million paying subscribers is struggling to balance the economics in their favour. 2. Don’t drive your pricing communication from the business side Your subscription offering needs to be communicated in a crystal-clear way. This runs from the actual Pricing page through every part of Marketing communication and into the product itself. The positioning of the paid subscription needs to be communicated from the consumer’s perspective — even if it’s driven from the business side. Thinly-veiled monetization strategies are obvious. 3. Freemium: Don’t assume free users can be converted to paid users Consumer subscriptions generally only work well when the value of the paid service in comparison to any alternatives is overwhelmingly high. One good example of this is Netflix — for a single monthly fee you get such a vast, high-quality library of content that you can consume to your heart’s desire. As has been said many times from both a B2C and B2B perspective, users who sign up for your free plan are not necessarily the same segment of users who would sign up for a paid plan. They may have no intention to ever pay for such a service, but are quite happy to make the most of your free offering. Focusing on freemium growth without a solid plan for converting said free users means you’re building a high level of risk into your business model. What now? Over the last few months we’ve seen signs that time may be up for the company – at least in its current form. According to a filing for SoundCloud Ltd in January 2017, the company’s net loss grew to $52M in 2015, outpacing a very slow growth in revenue (to $22M). Worryingly, the average annual salary grew nearly 20% to ~€90K in 2015. That’s a surprisingly-high average for a company headquartered in Berlin, where living costs and average salaries are generally lower than other European capitals. The company has recently taken on more senior hires, such as former Google Exec Holly Lim, joining as the company’s first CFO, in a clear bid to build a revenue-generating machine and secure future funding. Regardless of the above, SoundCloud has two things of considerable value to businesses and investors in the media space: A lot of passionate, active users and a huge library of content. With these assets, there’s hope that the team can raise some form of funding – given a solid plan for the near-term future of the product – albeit with a lower valuation than expected. My bet is we’ll be seeing some SoundCloud-focused headlines before Q1 is up. Written while listening to a 2-hour bootleg deep house mix, on SoundCloud. The SoundCloud HQ, based in Berlin’s Factory startup complex.

[INST] Where does SoundCloud Go from here? [/INST]

SoundCloud in the news Let’s take a look at some of the news headlines for SoundCloud over the last couple of months: “SoundCloud in danger of running out of cash” (Financial Times) “Soundcloud’s top execs are leaving at an incredibly awkward time” (QZ) “Is SoundCloud Imploding? Top Execs Jump Ship as ‘Desperate’ Fundraising Begins” (Digital Music News) You don’t have to be an expert analyst to understand that the company is going through severe financial difficulties — even looking past some of the the more sensationalist headlines. Despite the doom and gloom SoundCloud holds a lot of good will in the eyes of users and indie artists, some of whom have built a career from scratch using the platform: “This is for every indie artist. Shouts out to SoundCloud for holding me down. It’s another one, baby!” (Chance the Rapper shouts out SoundCloud in Grammys acceptance speech – The Verge) After rising to fame, Chance The Rapper still offers his work for free on SoundCloud (source: soundcloud.com/chancetherapper) So this is the bottom line, then: SoundCloud is a product for the artists and the listeners. It was built out of passion, to solve a problem that its founders were facing, and has changed the way that young up-and-coming talent can grow and connect with their fanbase — and this is the part of the business that came first. But when it comes to converting such positive sentiment into revenue, things are far from working well. The poster child of Berlin’s startup scene The ever-present St Oberholz cafe at Berlin’s Rosenthaler Platz There’s a café not 5 minutes from my apartment in Berlin, where the SoundCloud founders are rumoured to have put together the very first version of the cloud-based streaming app. Perhaps it’s for this reason that I feel some kind of connection to the company. Although having never worked there myself, a number of friends and acquaintances have joined and left over the years. It’s a staple of the city, and somewhere most people in tech seem to have some form of connection to. The company also plays its part when it comes to fostering the community by hosting a range of engineering meetups and other startup events. For those in the Berlin tech scene, SoundCloud is seen as something of a flagship company for the city — for at least as long as I can remember. The tech industry here is still relatively immature compared to other European cities like London, which has given birth to a number of high-profile names and big exits. It’s still not clear when that will change, given the proportion of early-stage startups still dominating headlines. Despite being such a recognized brand in Europe and worldwide, the SoundCloud product is hard to categorize in a world now shared with the big names and deep pockets of Spotify and Apple. If SoundCloud wasn’t around, it’s still not clear who would take up the banner of “Berlin startup flagship” in their place. Fact sheet Founded: 2007 Launched: 2008 Funding: $193M across 6 rounds Founders: Eric Wahlforss, Alexander Ljung Users (total): >175 million Users (paid): ? (not public) Catalog size: >135 million Back in a different era… It’s important to understand the space that SoundCloud was born into, back in 2008. The “YouTube of audio” was launched at a time when YouTube was barely a shell of what it is today. At a time when MySpace was dominating as a platform for independent musicians, SoundCloud was intended to provide a better way for creators to share and present their music to an audience on the web — something that still applies today. In comparison to MySpace, music on SoundCloud was more shareable, compatible with social media and more “open” in general — something that became increasingly important over time with the rise of platforms like Facebook. In many ways this focus has paid off for the platform; today, I’d argue that the variety of indie content from individual artists is the platform’s single unique selling point for consumers (but more on that later). If you’re old enough, this should bring back some memories… (source: howstuffworks.com) The elephant in the room: Revenue Over the years, the team have had several attempts at monetizing the platform in a number of different ways. Creator subscriptions (SoundCloud Pro) As creators of a podcast, we pay for SoundCloud Pro at ChartMogul. With this subscription, you’re essentially just paying for more storage and stats on listeners. You’ll hit the limits of the free plan once you upload 3 hours of audio, so it’s basically a must-have for any serious creators on the platform. I can’t help but think that getting creators to pay for storage is a backwards way of approaching monetization that only serves to limit the content on the platform. YouTube doesn’t charge for the number of hours of video uploaded to your account — they simply monetize on the user side through their ad platform. Listener subscriptions (SoundCloud Go) I was genuinely excited when SoundCloud Go was launched back in March 2016. But I arrived at the announcement page and was instantly confused by the majority of messaging: The pricing page for SoundCloud Go (source: soundcloud.com/go) “Listen offline” – okay, this is a nice addition. Not worth the $9.99 alone though. “Ad-free” – I don’t currently hear any ads when using SoundCloud! How is this relevant? (I guess they just we’re running ads in my country at the time) “135+ million tracks” – This is quite clearly misleading, because they don’t compare how many tracks you get access to with the standard product. (my bet is that it’s not that much short of 135 million). So I’m left to comparing “135+ million tracks” with “not 135+ million tracks”. Great… “SoundCloud Go full tracks” – What?! To this day I can’t make sense of this. How is “SoundCloud Go full tracks” a benefit of SoundCloud Go? Didn’t we already cover that in the number of tracks above?! So you can see why I didn’t buy. This is the LEAST compelling subscription pricing page I’ve seen for a long time! I’m an early-adopter proficient in tech, so how do they plan to sell this to… my Mum, for example?! It’s too vague. I pay £10/month for Spotify. If someone told me I could pay £15/month for “even more tracks”, how am I supposed to understand if that’s a valuable proposition for me? In reality, what they’re really suggesting is that they’re adding access to licensed tracks from the various record company deals they’ve signed (UMG, Sony, Warner etc.). But how is the user supposed to make this distinction? I can’t help but feel like the company made some serious concessions to close the various deals they needed with each record company – features like paid-only content are clearly there to appease the rights holders, and for listeners only serve to confuse and frustrate. Streaming audio ads Following in Spotify’s footsteps, SoundCloud inserts streaming ads in between tracks for free users of the service. Actually, when you look at the type of product SoundCloud represents, this form of monetization seems to make the most sense. SoundCloud has: The largest catalog of content of any streaming music service Free, user-generated content Some licensed content mixed in There’s definitely another streaming platform with very similar characteristics: YouTube. How is YouTube monetized? By running ads in its free user-generated content. (Okay, I know there’s YouTube Red, the premium subscription too, but that still represents a minor chunk of the platform’s revenue at this point). For whatever reason, SoundCloud has failed to imitate the YouTube model work effectively. This could be due to reasons of scale, or subtleties in the audio format when compared to video. Or the product execution. User experience woes The core user interface of SoundCloud hasn’t changed considerably over the years, and while the web experience was never renowned for its elegance, it remains functional without too many surprises. The mobile app however… well where do I start? All you have to do is read some of the blog comments from the announcement back in 2014 when the latest re-design went live. Here is just one of many comments on the post: “SoundCloud’s new app is one of the most unfortunate business decisions I have ever seen a company make. It seems they have forgotten that without the musicians that upload music there wouldn’t be people to listen.” The backlash was extensive, and almost entirely targeted towards the removal of features that artists relied upon, and the addition of a new, completely unintuitive user interface. The mobile app confuses me on almost a daily basis when I tap the wrong thing, swipe the wrong way or play a track without meaning to. And I’ve been using it since 2014! I don’t think I’ve felt this way since trying to use Snapchat for the first time. SoundCloud is the only streaming audio platform I’ve used that has a feed, i.e. I can see a chronological stream of new tracks that are posted and recommended by people I follow. I like that! One of the main problems I have is with discovery. With so much user-created and indie content on the platform, my ability to find and play new music that fits my taste profile is shockingly low. So what went wrong? 1. Shift in focus to directly compete with licensed streaming platforms The pivot towards including licensed tracks on SoundCloud means competing with the big players in the space (Spotify, Apple Music, Google Play music) in a much more direct fashion. Spotify touts 43 million paying subscribers (out of over 100 million accounts overall), and is still struggling to break even at that scale with its licensing model. Given the mixed messaging around SoundCloud Go (see above), it’s not completely surprising that the service is rumored to have no more than a few hundred thousand paying listeners – although no official numbers exist for this yet. 2. Scattered attempts at monetization As highlighted above, each separate attempt at monetization has effectively attacked the product from every possible angle, leaving a fragmented user experience. The result is that users suffer from a sense of penny-pinching, pushed to part with their money at every opportunity. 3. Poor product evolution and vision This is in all likelihood a result of the search for reliable revenue mentioned above. As a listener, it’s not clear to me what SoundCloud is any more. Where does it fit into the streaming music landscape? It doesn’t feel like a product that can stand on its own as an alternative to Spotify or Apple Music, but it’s still asking for ten of my hard earned dollars every month. 4. A big bet on converting free users to paid If SoundCloud was to succeed in the launch of paid subscriptions (SoundCloud Go), they needed to convert a serious number of their free users over to paid accounts. Spotify is incredibly proud of its proposed free-to-paid conversion rate of 20-25% — which dwarves most other similar freemium businesses. In the recent Financial Times report, analyst Mark Mulligan, founder of Midea Research stated: “It will never get conversion rates [from free to paid] anywhere close to Spotify’s 20-25 per cent… The best it could ever hope for was 2 to 3 per cent, and in doing so it will alienate much of its userbase.” It’s not clear what kind of conversion rate SoundCloud Go has seen in the months since launch, but the outlook isn’t promising. What can subscription businesses learn from this? 1. Consumer subscriptions require unparalleled scale In a market where margins are virtually non-existent, your business may not be remotely viable unless you’re the single dominant player in the market. Spotify has eaten up a large chunk of the music streaming market, but even at 43 million paying subscribers is struggling to balance the economics in their favour. 2. Don’t drive your pricing communication from the business side Your subscription offering needs to be communicated in a crystal-clear way. This runs from the actual Pricing page through every part of Marketing communication and into the product itself. The positioning of the paid subscription needs to be communicated from the consumer’s perspective — even if it’s driven from the business side. Thinly-veiled monetization strategies are obvious. 3. Freemium: Don’t assume free users can be converted to paid users Consumer subscriptions generally only work well when the value of the paid service in comparison to any alternatives is overwhelmingly high. One good example of this is Netflix — for a single monthly fee you get such a vast, high-quality library of content that you can consume to your heart’s desire. As has been said many times from both a B2C and B2B perspective, users who sign up for your free plan are not necessarily the same segment of users who would sign up for a paid plan. They may have no intention to ever pay for such a service, but are quite happy to make the most of your free offering. Focusing on freemium growth without a solid plan for converting said free users means you’re building a high level of risk into your business model. What now? Over the last few months we’ve seen signs that time may be up for the company – at least in its current form. According to a filing for SoundCloud Ltd in January 2017, the company’s net loss grew to $52M in 2015, outpacing a very slow growth in revenue (to $22M). Worryingly, the average annual salary grew nearly 20% to ~€90K in 2015. That’s a surprisingly-high average for a company headquartered in Berlin, where living costs and average salaries are generally lower than other European capitals. The company has recently taken on more senior hires, such as former Google Exec Holly Lim, joining as the company’s first CFO, in a clear bid to build a revenue-generating machine and secure future funding. Regardless of the above, SoundCloud has two things of considerable value to businesses and investors in the media space: A lot of passionate, active users and a huge library of content. With these assets, there’s hope that the team can raise some form of funding – given a solid plan for the near-term future of the product – albeit with a lower valuation than expected. My bet is we’ll be seeing some SoundCloud-focused headlines before Q1 is up. Written while listening to a 2-hour bootleg deep house mix, on SoundCloud. The SoundCloud HQ, based in Berlin’s Factory startup complex.

<sys> [INST] Where does SoundCloud Go from here? [/INST] SoundCloud in the news Let’s take a look at some of the news headlines for SoundCloud over the last couple of months: “SoundCloud in danger of running out of cash” (Financial Times) “Soundcloud’s top execs are leaving at an incredibly awkward time” (QZ) “Is SoundCloud Imploding? Top Execs Jump Ship as ‘Desperate’ Fundraising Begins” (Digital Music News) You don’t have to be an expert analyst to understand that the company is going through severe financial difficulties — even looking past some of the the more sensationalist headlines. Despite the doom and gloom SoundCloud holds a lot of good will in the eyes of users and indie artists, some of whom have built a career from scratch using the platform: “This is for every indie artist. Shouts out to SoundCloud for holding me down. It’s another one, baby!” (Chance the Rapper shouts out SoundCloud in Grammys acceptance speech – The Verge) After rising to fame, Chance The Rapper still offers his work for free on SoundCloud (source: soundcloud.com/chancetherapper) So this is the bottom line, then: SoundCloud is a product for the artists and the listeners. It was built out of passion, to solve a problem that its founders were facing, and has changed the way that young up-and-coming talent can grow and connect with their fanbase — and this is the part of the business that came first. But when it comes to converting such positive sentiment into revenue, things are far from working well. The poster child of Berlin’s startup scene The ever-present St Oberholz cafe at Berlin’s Rosenthaler Platz There’s a café not 5 minutes from my apartment in Berlin, where the SoundCloud founders are rumoured to have put together the very first version of the cloud-based streaming app. Perhaps it’s for this reason that I feel some kind of connection to the company. Although having never worked there myself, a number of friends and acquaintances have joined and left over the years. It’s a staple of the city, and somewhere most people in tech seem to have some form of connection to. The company also plays its part when it comes to fostering the community by hosting a range of engineering meetups and other startup events. For those in the Berlin tech scene, SoundCloud is seen as something of a flagship company for the city — for at least as long as I can remember. The tech industry here is still relatively immature compared to other European cities like London, which has given birth to a number of high-profile names and big exits. It’s still not clear when that will change, given the proportion of early-stage startups still dominating headlines. Despite being such a recognized brand in Europe and worldwide, the SoundCloud product is hard to categorize in a world now shared with the big names and deep pockets of Spotify and Apple. If SoundCloud wasn’t around, it’s still not clear who would take up the banner of “Berlin startup flagship” in their place. Fact sheet Founded: 2007 Launched: 2008 Funding: $193M across 6 rounds Founders: Eric Wahlforss, Alexander Ljung Users (total): >175 million Users (paid): ? (not public) Catalog size: >135 million Back in a different era… It’s important to understand the space that SoundCloud was born into, back in 2008. The “YouTube of audio” was launched at a time when YouTube was barely a shell of what it is today. At a time when MySpace was dominating as a platform for independent musicians, SoundCloud was intended to provide a better way for creators to share and present their music to an audience on the web — something that still applies today. In comparison to MySpace, music on SoundCloud was more shareable, compatible with social media and more “open” in general — something that became increasingly important over time with the rise of platforms like Facebook. In many ways this focus has paid off for the platform; today, I’d argue that the variety of indie content from individual artists is the platform’s single unique selling point for consumers (but more on that later). If you’re old enough, this should bring back some memories… (source: howstuffworks.com) The elephant in the room: Revenue Over the years, the team have had several attempts at monetizing the platform in a number of different ways. Creator subscriptions (SoundCloud Pro) As creators of a podcast, we pay for SoundCloud Pro at ChartMogul. With this subscription, you’re essentially just paying for more storage and stats on listeners. You’ll hit the limits of the free plan once you upload 3 hours of audio, so it’s basically a must-have for any serious creators on the platform. I can’t help but think that getting creators to pay for storage is a backwards way of approaching monetization that only serves to limit the content on the platform. YouTube doesn’t charge for the number of hours of video uploaded to your account — they simply monetize on the user side through their ad platform. Listener subscriptions (SoundCloud Go) I was genuinely excited when SoundCloud Go was launched back in March 2016. But I arrived at the announcement page and was instantly confused by the majority of messaging: The pricing page for SoundCloud Go (source: soundcloud.com/go) “Listen offline” – okay, this is a nice addition. Not worth the $9.99 alone though. “Ad-free” – I don’t currently hear any ads when using SoundCloud! How is this relevant? (I guess they just we’re running ads in my country at the time) “135+ million tracks” – This is quite clearly misleading, because they don’t compare how many tracks you get access to with the standard product. (my bet is that it’s not that much short of 135 million). So I’m left to comparing “135+ million tracks” with “not 135+ million tracks”. Great… “SoundCloud Go full tracks” – What?! To this day I can’t make sense of this. How is “SoundCloud Go full tracks” a benefit of SoundCloud Go? Didn’t we already cover that in the number of tracks above?! So you can see why I didn’t buy. This is the LEAST compelling subscription pricing page I’ve seen for a long time! I’m an early-adopter proficient in tech, so how do they plan to sell this to… my Mum, for example?! It’s too vague. I pay £10/month for Spotify. If someone told me I could pay £15/month for “even more tracks”, how am I supposed to understand if that’s a valuable proposition for me? In reality, what they’re really suggesting is that they’re adding access to licensed tracks from the various record company deals they’ve signed (UMG, Sony, Warner etc.). But how is the user supposed to make this distinction? I can’t help but feel like the company made some serious concessions to close the various deals they needed with each record company – features like paid-only content are clearly there to appease the rights holders, and for listeners only serve to confuse and frustrate. Streaming audio ads Following in Spotify’s footsteps, SoundCloud inserts streaming ads in between tracks for free users of the service. Actually, when you look at the type of product SoundCloud represents, this form of monetization seems to make the most sense. SoundCloud has: The largest catalog of content of any streaming music service Free, user-generated content Some licensed content mixed in There’s definitely another streaming platform with very similar characteristics: YouTube. How is YouTube monetized? By running ads in its free user-generated content. (Okay, I know there’s YouTube Red, the premium subscription too, but that still represents a minor chunk of the platform’s revenue at this point). For whatever reason, SoundCloud has failed to imitate the YouTube model work effectively. This could be due to reasons of scale, or subtleties in the audio format when compared to video. Or the product execution. User experience woes The core user interface of SoundCloud hasn’t changed considerably over the years, and while the web experience was never renowned for its elegance, it remains functional without too many surprises. The mobile app however… well where do I start? All you have to do is read some of the blog comments from the announcement back in 2014 when the latest re-design went live. Here is just one of many comments on the post: “SoundCloud’s new app is one of the most unfortunate business decisions I have ever seen a company make. It seems they have forgotten that without the musicians that upload music there wouldn’t be people to listen.” The backlash was extensive, and almost entirely targeted towards the removal of features that artists relied upon, and the addition of a new, completely unintuitive user interface. The mobile app confuses me on almost a daily basis when I tap the wrong thing, swipe the wrong way or play a track without meaning to. And I’ve been using it since 2014! I don’t think I’ve felt this way since trying to use Snapchat for the first time. SoundCloud is the only streaming audio platform I’ve used that has a feed, i.e. I can see a chronological stream of new tracks that are posted and recommended by people I follow. I like that! One of the main problems I have is with discovery. With so much user-created and indie content on the platform, my ability to find and play new music that fits my taste profile is shockingly low. So what went wrong? 1. Shift in focus to directly compete with licensed streaming platforms The pivot towards including licensed tracks on SoundCloud means competing with the big players in the space (Spotify, Apple Music, Google Play music) in a much more direct fashion. Spotify touts 43 million paying subscribers (out of over 100 million accounts overall), and is still struggling to break even at that scale with its licensing model. Given the mixed messaging around SoundCloud Go (see above), it’s not completely surprising that the service is rumored to have no more than a few hundred thousand paying listeners – although no official numbers exist for this yet. 2. Scattered attempts at monetization As highlighted above, each separate attempt at monetization has effectively attacked the product from every possible angle, leaving a fragmented user experience. The result is that users suffer from a sense of penny-pinching, pushed to part with their money at every opportunity. 3. Poor product evolution and vision This is in all likelihood a result of the search for reliable revenue mentioned above. As a listener, it’s not clear to me what SoundCloud is any more. Where does it fit into the streaming music landscape? It doesn’t feel like a product that can stand on its own as an alternative to Spotify or Apple Music, but it’s still asking for ten of my hard earned dollars every month. 4. A big bet on converting free users to paid If SoundCloud was to succeed in the launch of paid subscriptions (SoundCloud Go), they needed to convert a serious number of their free users over to paid accounts. Spotify is incredibly proud of its proposed free-to-paid conversion rate of 20-25% — which dwarves most other similar freemium businesses. In the recent Financial Times report, analyst Mark Mulligan, founder of Midea Research stated: “It will never get conversion rates [from free to paid] anywhere close to Spotify’s 20-25 per cent… The best it could ever hope for was 2 to 3 per cent, and in doing so it will alienate much of its userbase.” It’s not clear what kind of conversion rate SoundCloud Go has seen in the months since launch, but the outlook isn’t promising. What can subscription businesses learn from this? 1. Consumer subscriptions require unparalleled scale In a market where margins are virtually non-existent, your business may not be remotely viable unless you’re the single dominant player in the market. Spotify has eaten up a large chunk of the music streaming market, but even at 43 million paying subscribers is struggling to balance the economics in their favour. 2. Don’t drive your pricing communication from the business side Your subscription offering needs to be communicated in a crystal-clear way. This runs from the actual Pricing page through every part of Marketing communication and into the product itself. The positioning of the paid subscription needs to be communicated from the consumer’s perspective — even if it’s driven from the business side. Thinly-veiled monetization strategies are obvious. 3. Freemium: Don’t assume free users can be converted to paid users Consumer subscriptions generally only work well when the value of the paid service in comparison to any alternatives is overwhelmingly high. One good example of this is Netflix — for a single monthly fee you get such a vast, high-quality library of content that you can consume to your heart’s desire. As has been said many times from both a B2C and B2B perspective, users who sign up for your free plan are not necessarily the same segment of users who would sign up for a paid plan. They may have no intention to ever pay for such a service, but are quite happy to make the most of your free offering. Focusing on freemium growth without a solid plan for converting said free users means you’re building a high level of risk into your business model. What now? Over the last few months we’ve seen signs that time may be up for the company – at least in its current form. According to a filing for SoundCloud Ltd in January 2017, the company’s net loss grew to $52M in 2015, outpacing a very slow growth in revenue (to $22M). Worryingly, the average annual salary grew nearly 20% to ~€90K in 2015. That’s a surprisingly-high average for a company headquartered in Berlin, where living costs and average salaries are generally lower than other European capitals. The company has recently taken on more senior hires, such as former Google Exec Holly Lim, joining as the company’s first CFO, in a clear bid to build a revenue-generating machine and secure future funding. Regardless of the above, SoundCloud has two things of considerable value to businesses and investors in the media space: A lot of passionate, active users and a huge library of content. With these assets, there’s hope that the team can raise some form of funding – given a solid plan for the near-term future of the product – albeit with a lower valuation than expected. My bet is we’ll be seeing some SoundCloud-focused headlines before Q1 is up. Written while listening to a 2-hour bootleg deep house mix, on SoundCloud. The SoundCloud HQ, based in Berlin’s Factory startup complex. </sys

Keep Deals Moving Forward with Tasks. With SaaS revenue growth at the slowest it’s been in years, every deal counts. With Tasks for ChartMogul CRM, you can track and prioritize all tasks associated with your leads, opportunities, and customers. You can stay on top of what’s next for every deal, collaborate more effectively with your team, and improve sales performance. Your team can create tasks for follow-up calls, product demos, email outreach, or meeting arrangements – perfect for sales and account management. Managers can assign tasks to team members based on their expertise, workload, or availability. You can automatically organize your tasks based on when they’re due, so no crucial follow-up falls through the cracks. Tasks is our first major feature release for ChartMogul CRM since we launched back in April. This has been the number one feature request so far and we’re excited to announce it’s finally here. What’s new in ChartMogul CRM If you’ve been assigned a CRM seat, you can find the Tasks module on top of the Opportunity section on each lead, opportunity, or customer profile page. Here you can add, edit, and mark tasks as completed. Your tasks will be stacked chronologically by the due date – overdue tasks will show in red. When you mark a task as completed, it’ll appear in the activity feed on the customer profile. Tasks are ordered by due date, with overdue tasks shown in red. How to add a task Click “Add Task” on the profile page (you need to have a CRM seat assigned). Add the description, task owner, due date, and time. The default task owner will be the user adding the task, but you can assign tasks to different CRM users by selecting them from the drop down. The due date and time will be shown in the CRM user’s local time zone. Click ‘Save’ to add the task to the task list. You can edit each task by clicking the pencil icon, and mark them complete by clicking the checkmark. See all tasks in one place Perfect for sales and account management. Be sure to schedule your renewal kickoff! Keeping up with tasks from multiple opportunities and leads can be a struggle. The task list page aggregates tasks from all your prospects, making it the core part of your daily sales workflow. You can see all your team’s tasks here as well, keeping everyone accountable, and ensuring sales processes are running smoothly. Open up your Task List to see all your to-dos for the day. Everything is organized for you by due date – all you have to do is knock them out one by one. Using Tasks in ChartMogul CRM lets your team prioritize, track, and manage their workload, resulting in increased productivity and improved sales performance. Read more in our Help Center here. ChartMogul customers get 3 CRM seats for free. Get started now.

[INST] Keep Deals Moving Forward with Tasks [/INST]

With SaaS revenue growth at the slowest it’s been in years, every deal counts. With Tasks for ChartMogul CRM, you can track and prioritize all tasks associated with your leads, opportunities, and customers. You can stay on top of what’s next for every deal, collaborate more effectively with your team, and improve sales performance. Your team can create tasks for follow-up calls, product demos, email outreach, or meeting arrangements – perfect for sales and account management. Managers can assign tasks to team members based on their expertise, workload, or availability. You can automatically organize your tasks based on when they’re due, so no crucial follow-up falls through the cracks. Tasks is our first major feature release for ChartMogul CRM since we launched back in April. This has been the number one feature request so far and we’re excited to announce it’s finally here. What’s new in ChartMogul CRM If you’ve been assigned a CRM seat, you can find the Tasks module on top of the Opportunity section on each lead, opportunity, or customer profile page. Here you can add, edit, and mark tasks as completed. Your tasks will be stacked chronologically by the due date – overdue tasks will show in red. When you mark a task as completed, it’ll appear in the activity feed on the customer profile. Tasks are ordered by due date, with overdue tasks shown in red. How to add a task Click “Add Task” on the profile page (you need to have a CRM seat assigned). Add the description, task owner, due date, and time. The default task owner will be the user adding the task, but you can assign tasks to different CRM users by selecting them from the drop down. The due date and time will be shown in the CRM user’s local time zone. Click ‘Save’ to add the task to the task list. You can edit each task by clicking the pencil icon, and mark them complete by clicking the checkmark. See all tasks in one place Perfect for sales and account management. Be sure to schedule your renewal kickoff! Keeping up with tasks from multiple opportunities and leads can be a struggle. The task list page aggregates tasks from all your prospects, making it the core part of your daily sales workflow. You can see all your team’s tasks here as well, keeping everyone accountable, and ensuring sales processes are running smoothly. Open up your Task List to see all your to-dos for the day. Everything is organized for you by due date – all you have to do is knock them out one by one. Using Tasks in ChartMogul CRM lets your team prioritize, track, and manage their workload, resulting in increased productivity and improved sales performance. Read more in our Help Center here. ChartMogul customers get 3 CRM seats for free. Get started now.

<sys> [INST] Keep Deals Moving Forward with Tasks [/INST] With SaaS revenue growth at the slowest it’s been in years, every deal counts. With Tasks for ChartMogul CRM, you can track and prioritize all tasks associated with your leads, opportunities, and customers. You can stay on top of what’s next for every deal, collaborate more effectively with your team, and improve sales performance. Your team can create tasks for follow-up calls, product demos, email outreach, or meeting arrangements – perfect for sales and account management. Managers can assign tasks to team members based on their expertise, workload, or availability. You can automatically organize your tasks based on when they’re due, so no crucial follow-up falls through the cracks. Tasks is our first major feature release for ChartMogul CRM since we launched back in April. This has been the number one feature request so far and we’re excited to announce it’s finally here. What’s new in ChartMogul CRM If you’ve been assigned a CRM seat, you can find the Tasks module on top of the Opportunity section on each lead, opportunity, or customer profile page. Here you can add, edit, and mark tasks as completed. Your tasks will be stacked chronologically by the due date – overdue tasks will show in red. When you mark a task as completed, it’ll appear in the activity feed on the customer profile. Tasks are ordered by due date, with overdue tasks shown in red. How to add a task Click “Add Task” on the profile page (you need to have a CRM seat assigned). Add the description, task owner, due date, and time. The default task owner will be the user adding the task, but you can assign tasks to different CRM users by selecting them from the drop down. The due date and time will be shown in the CRM user’s local time zone. Click ‘Save’ to add the task to the task list. You can edit each task by clicking the pencil icon, and mark them complete by clicking the checkmark. See all tasks in one place Perfect for sales and account management. Be sure to schedule your renewal kickoff! Keeping up with tasks from multiple opportunities and leads can be a struggle. The task list page aggregates tasks from all your prospects, making it the core part of your daily sales workflow. You can see all your team’s tasks here as well, keeping everyone accountable, and ensuring sales processes are running smoothly. Open up your Task List to see all your to-dos for the day. Everything is organized for you by due date – all you have to do is knock them out one by one. Using Tasks in ChartMogul CRM lets your team prioritize, track, and manage their workload, resulting in increased productivity and improved sales performance. Read more in our Help Center here. ChartMogul customers get 3 CRM seats for free. Get started now. </sys

Tips & Tricks: How does language support affect churn in different regions?. Adding location attributes to customers ChartMogul’s native billing system integrations automatically detect customer location information as recorded in the billing system. The location information is then stored in ChartMogul and can be easily used for segmentation in the Maps feature. There are many default attributes available out of the box in ChartMogul — you can learn more about them and how to make use of them here. If you submit data via the Google Sheets App or Import API, you will need to specify the geo data in order to build the segments described in this article. Setting up segments to compare We will create an English-speaking countries segment as well as a Non-English speaking countries segment that we can compare. 1. Log in to your ChartMogul account, and head to the maps page. 2. Using the Maps interface, you can now click on each English-speaking country or region to select them 3. Once your selection is complete, click Save Region and name it accordingly – “English speaking countries” or similar. 4. To create the segment Non-English speaking countries, again select each of the countries that you want to include in the analysis and click Save Region. Give this segment a sensible name, such as “Non-English speaking countries”. 5. To compare the two regional segments, go to your Customer churn rate chart and click on All Regions. Select the region English Speaking Countries. 6. Next, click on New Segment to add the second Non-English Speaking Countries region. 7. In your Customer Churn rate chart, you can see that the churn rate for non-English speaking countries is higher than in English speaking countries. What we learned It’s clear from this analysis that customers who live in countries where English is not the dominant language are at greater risk of churning. To address this problem we could: Add internationalization to the product — support for other languages Focus support efforts on customers from non-English speaking regions Monitor the data to understand whether these actions succeed in driving down churn rates Next steps To gain further insight into this, you can start to drill down into specific non-English speaking countries to locate where most of the churn is coming from. For example, if Spain’s churn rate is very high while generating a strong lead volume, Spanish may be the best focus for additional language support in your product. Share your analysis Do you have a particular analysis in ChartMogul that has helped gain unique insights? Do you think it could help other users? Please send it to us at [email protected].

[INST] Tips & Tricks: How does language support affect churn in different regions? [/INST]

Adding location attributes to customers ChartMogul’s native billing system integrations automatically detect customer location information as recorded in the billing system. The location information is then stored in ChartMogul and can be easily used for segmentation in the Maps feature. There are many default attributes available out of the box in ChartMogul — you can learn more about them and how to make use of them here. If you submit data via the Google Sheets App or Import API, you will need to specify the geo data in order to build the segments described in this article. Setting up segments to compare We will create an English-speaking countries segment as well as a Non-English speaking countries segment that we can compare. 1. Log in to your ChartMogul account, and head to the maps page. 2. Using the Maps interface, you can now click on each English-speaking country or region to select them 3. Once your selection is complete, click Save Region and name it accordingly – “English speaking countries” or similar. 4. To create the segment Non-English speaking countries, again select each of the countries that you want to include in the analysis and click Save Region. Give this segment a sensible name, such as “Non-English speaking countries”. 5. To compare the two regional segments, go to your Customer churn rate chart and click on All Regions. Select the region English Speaking Countries. 6. Next, click on New Segment to add the second Non-English Speaking Countries region. 7. In your Customer Churn rate chart, you can see that the churn rate for non-English speaking countries is higher than in English speaking countries. What we learned It’s clear from this analysis that customers who live in countries where English is not the dominant language are at greater risk of churning. To address this problem we could: Add internationalization to the product — support for other languages Focus support efforts on customers from non-English speaking regions Monitor the data to understand whether these actions succeed in driving down churn rates Next steps To gain further insight into this, you can start to drill down into specific non-English speaking countries to locate where most of the churn is coming from. For example, if Spain’s churn rate is very high while generating a strong lead volume, Spanish may be the best focus for additional language support in your product. Share your analysis Do you have a particular analysis in ChartMogul that has helped gain unique insights? Do you think it could help other users? Please send it to us at [email protected].

<sys> [INST] Tips & Tricks: How does language support affect churn in different regions? [/INST] Adding location attributes to customers ChartMogul’s native billing system integrations automatically detect customer location information as recorded in the billing system. The location information is then stored in ChartMogul and can be easily used for segmentation in the Maps feature. There are many default attributes available out of the box in ChartMogul — you can learn more about them and how to make use of them here. If you submit data via the Google Sheets App or Import API, you will need to specify the geo data in order to build the segments described in this article. Setting up segments to compare We will create an English-speaking countries segment as well as a Non-English speaking countries segment that we can compare. 1. Log in to your ChartMogul account, and head to the maps page. 2. Using the Maps interface, you can now click on each English-speaking country or region to select them 3. Once your selection is complete, click Save Region and name it accordingly – “English speaking countries” or similar. 4. To create the segment Non-English speaking countries, again select each of the countries that you want to include in the analysis and click Save Region. Give this segment a sensible name, such as “Non-English speaking countries”. 5. To compare the two regional segments, go to your Customer churn rate chart and click on All Regions. Select the region English Speaking Countries. 6. Next, click on New Segment to add the second Non-English Speaking Countries region. 7. In your Customer Churn rate chart, you can see that the churn rate for non-English speaking countries is higher than in English speaking countries. What we learned It’s clear from this analysis that customers who live in countries where English is not the dominant language are at greater risk of churning. To address this problem we could: Add internationalization to the product — support for other languages Focus support efforts on customers from non-English speaking regions Monitor the data to understand whether these actions succeed in driving down churn rates Next steps To gain further insight into this, you can start to drill down into specific non-English speaking countries to locate where most of the churn is coming from. For example, if Spain’s churn rate is very high while generating a strong lead volume, Spanish may be the best focus for additional language support in your product. Share your analysis Do you have a particular analysis in ChartMogul that has helped gain unique insights? Do you think it could help other users? Please send it to us at [email protected]. </sys

Is all-in-one SaaS incompatible with SMBs?. The Coffee Thoughts series on ChartMogul is a place for short thoughts and musings on SaaS industry trends. We welcome you to join the discussion in the comments below! A common theory is that as SaaS and software in general evolves, the kinds of solutions we see change in a cyclic fashion, moving from “all-in-one” solutions to a large number of smaller, highly-vertical SaaS tools (and eventually consolidating again). Right now, some departments like Marketing have to deal with a huge number of standalone SaaS tools to operate an effective stack: “Based on this there’s talk of moving towards a more “consolidated” world, with a new era of one-stop-shop SaaS products emerging which solve most problems within a space, all under one roof. For example, what if I had just ONE marketing tool to manage all of my marketing activities?” (I’m quoting myself here. I hope that’s allowed.) An important point to make here is that all-in-one SaaS solutions are nothing new, and have never completely disappeared. Look at SalesForce (an entire Sales stack), HubSpot (an entire Marketing stack) and more. But these companies really represent the (now mature) winners of the last generation of SaaS and have moved upmarket to cater to enterprise customers. The scrappy-yet-effective SMB stack There are newer breeds of SaaS now aiming to offer “full-stack” software, targeting SMBs. But do these smaller startups really want a “full-stack” solution? For SMBs, big all-in-one solutions have usually been out of reach in terms of cost. What typically happens is that young, scrappy startups put together a functional stack based on a combination of free tools and cheaper small solutions. A tool for newsletters A tool for transactional email A tool for lead capture A tool for queueing social media content A tool for analyzing social media content …you get the idea. It looks like a nightmare (and it can be) but there are benefits to this kind of set up. For one, you get to pick the best tool for every single use case. You can also swap out components of the stack as a better tool becomes available, thanks to ease of integration and portability. The ease for doing this has never been greater, with platforms like Zapier (which we’re a fan of at ChartMogul) empowering even non-technical Marketers to plug things together. All-in-one for SMBs So as a company offering an all-in-one SaaS solution to these businesses, the challenges are very big and very real: The pain of switching Switching away from a custom setup of many deeply-integrated tools can be huge, particularly when resources in the company are scarce. Things will break when you rip out such a setup. The inevitable feature compromise This is huge. You’re asking a Marketer (for example) to move from a stack of his hand-picked best-in-class Marketing tools, to a platform that covers a handful of use-cases really well — and the rest with mediocrity. All-in-one platforms are rarely amazing at everything. Jack of all trades, yada yada… The risk of failure Most SaaS platforms have a free trial of a month or at least a couple of weeks. That’s great, but in the case of an all-in-one platform, a trial is higher-risk. You can try out the product without paying or committing, but if the trial fails you’re left with a huge task of switching back to your previous setup. These large platforms want to own everything, and they’ll leave you with a large hole when you turn them off. All-in-one usually makes business sense at some point Clearly there are other drivers for a business to move to bigger all-in-one platforms at some point as the business grows. The “small tool” approach is likely to break or become expensive at a certain scale, so once the business matures it makes a lot of sense to make the switch. But for smaller businesses, it’s hard to see the benefit of committing to such platforms.

[INST] Is all-in-one SaaS incompatible with SMBs? [/INST]

The Coffee Thoughts series on ChartMogul is a place for short thoughts and musings on SaaS industry trends. We welcome you to join the discussion in the comments below! A common theory is that as SaaS and software in general evolves, the kinds of solutions we see change in a cyclic fashion, moving from “all-in-one” solutions to a large number of smaller, highly-vertical SaaS tools (and eventually consolidating again). Right now, some departments like Marketing have to deal with a huge number of standalone SaaS tools to operate an effective stack: “Based on this there’s talk of moving towards a more “consolidated” world, with a new era of one-stop-shop SaaS products emerging which solve most problems within a space, all under one roof. For example, what if I had just ONE marketing tool to manage all of my marketing activities?” (I’m quoting myself here. I hope that’s allowed.) An important point to make here is that all-in-one SaaS solutions are nothing new, and have never completely disappeared. Look at SalesForce (an entire Sales stack), HubSpot (an entire Marketing stack) and more. But these companies really represent the (now mature) winners of the last generation of SaaS and have moved upmarket to cater to enterprise customers. The scrappy-yet-effective SMB stack There are newer breeds of SaaS now aiming to offer “full-stack” software, targeting SMBs. But do these smaller startups really want a “full-stack” solution? For SMBs, big all-in-one solutions have usually been out of reach in terms of cost. What typically happens is that young, scrappy startups put together a functional stack based on a combination of free tools and cheaper small solutions. A tool for newsletters A tool for transactional email A tool for lead capture A tool for queueing social media content A tool for analyzing social media content …you get the idea. It looks like a nightmare (and it can be) but there are benefits to this kind of set up. For one, you get to pick the best tool for every single use case. You can also swap out components of the stack as a better tool becomes available, thanks to ease of integration and portability. The ease for doing this has never been greater, with platforms like Zapier (which we’re a fan of at ChartMogul) empowering even non-technical Marketers to plug things together. All-in-one for SMBs So as a company offering an all-in-one SaaS solution to these businesses, the challenges are very big and very real: The pain of switching Switching away from a custom setup of many deeply-integrated tools can be huge, particularly when resources in the company are scarce. Things will break when you rip out such a setup. The inevitable feature compromise This is huge. You’re asking a Marketer (for example) to move from a stack of his hand-picked best-in-class Marketing tools, to a platform that covers a handful of use-cases really well — and the rest with mediocrity. All-in-one platforms are rarely amazing at everything. Jack of all trades, yada yada… The risk of failure Most SaaS platforms have a free trial of a month or at least a couple of weeks. That’s great, but in the case of an all-in-one platform, a trial is higher-risk. You can try out the product without paying or committing, but if the trial fails you’re left with a huge task of switching back to your previous setup. These large platforms want to own everything, and they’ll leave you with a large hole when you turn them off. All-in-one usually makes business sense at some point Clearly there are other drivers for a business to move to bigger all-in-one platforms at some point as the business grows. The “small tool” approach is likely to break or become expensive at a certain scale, so once the business matures it makes a lot of sense to make the switch. But for smaller businesses, it’s hard to see the benefit of committing to such platforms.

<sys> [INST] Is all-in-one SaaS incompatible with SMBs? [/INST] The Coffee Thoughts series on ChartMogul is a place for short thoughts and musings on SaaS industry trends. We welcome you to join the discussion in the comments below! A common theory is that as SaaS and software in general evolves, the kinds of solutions we see change in a cyclic fashion, moving from “all-in-one” solutions to a large number of smaller, highly-vertical SaaS tools (and eventually consolidating again). Right now, some departments like Marketing have to deal with a huge number of standalone SaaS tools to operate an effective stack: “Based on this there’s talk of moving towards a more “consolidated” world, with a new era of one-stop-shop SaaS products emerging which solve most problems within a space, all under one roof. For example, what if I had just ONE marketing tool to manage all of my marketing activities?” (I’m quoting myself here. I hope that’s allowed.) An important point to make here is that all-in-one SaaS solutions are nothing new, and have never completely disappeared. Look at SalesForce (an entire Sales stack), HubSpot (an entire Marketing stack) and more. But these companies really represent the (now mature) winners of the last generation of SaaS and have moved upmarket to cater to enterprise customers. The scrappy-yet-effective SMB stack There are newer breeds of SaaS now aiming to offer “full-stack” software, targeting SMBs. But do these smaller startups really want a “full-stack” solution? For SMBs, big all-in-one solutions have usually been out of reach in terms of cost. What typically happens is that young, scrappy startups put together a functional stack based on a combination of free tools and cheaper small solutions. A tool for newsletters A tool for transactional email A tool for lead capture A tool for queueing social media content A tool for analyzing social media content …you get the idea. It looks like a nightmare (and it can be) but there are benefits to this kind of set up. For one, you get to pick the best tool for every single use case. You can also swap out components of the stack as a better tool becomes available, thanks to ease of integration and portability. The ease for doing this has never been greater, with platforms like Zapier (which we’re a fan of at ChartMogul) empowering even non-technical Marketers to plug things together. All-in-one for SMBs So as a company offering an all-in-one SaaS solution to these businesses, the challenges are very big and very real: The pain of switching Switching away from a custom setup of many deeply-integrated tools can be huge, particularly when resources in the company are scarce. Things will break when you rip out such a setup. The inevitable feature compromise This is huge. You’re asking a Marketer (for example) to move from a stack of his hand-picked best-in-class Marketing tools, to a platform that covers a handful of use-cases really well — and the rest with mediocrity. All-in-one platforms are rarely amazing at everything. Jack of all trades, yada yada… The risk of failure Most SaaS platforms have a free trial of a month or at least a couple of weeks. That’s great, but in the case of an all-in-one platform, a trial is higher-risk. You can try out the product without paying or committing, but if the trial fails you’re left with a huge task of switching back to your previous setup. These large platforms want to own everything, and they’ll leave you with a large hole when you turn them off. All-in-one usually makes business sense at some point Clearly there are other drivers for a business to move to bigger all-in-one platforms at some point as the business grows. The “small tool” approach is likely to break or become expensive at a certain scale, so once the business matures it makes a lot of sense to make the switch. But for smaller businesses, it’s hard to see the benefit of committing to such platforms. </sys

Why We Decided to Pull the Plug on Our Outbound Sales Strategy. ChartMogul is a product-led business. We spend most of our waking hours thinking about how to build a reliable, beautiful product that helps subscription businesses grow faster using their customer and billing data. This mentality extends, of course, to our marketing strategy, which is why folks still print out our cheat sheets and read our weekly roundup. It also extends to our customer acquisition and sales strategy. More than 90% of our leads come through our 14-day trial. Then, it’s our job to help those businesses get set up, evaluate our product, and ultimately, make a purchase decision. We’ve grown sustainably for six years in this way. Enter: the allure of an outbound sales motion. In a recent Act-On and Demand Metric study completed in Q2 of 2016, less than 20 percent of mid-size B2B companies relied on solely inbound or outbound strategies; 84 percent of respondents used some mix of both. TechnologyAdvice We know who our prospective buyers are, what is important to them, and how to engage them — after all, we’ve been working with SaaS founders and operators consistently for some time. And importantly, our retention rate for these customers is high. What would it mean for our business if we could crack outbound sales? If we could reliably generate new opportunities and onboard right-fit customers? Could introducing a new sales motion accelerate our ability to hit our next few revenue targets? Our outbound sales strategy We set a plan to find out. To properly test outbound, we knew that we needed the following: Hungry salespeople trained on and devoted to outbound efforts Appropriate process and tooling Target accounts and reliable contact information Personalized, on-brand messaging that illustrates how and why we’re the right subscription analytics partner. We hired two SDRs (Leo and Verena), trained them on our value proposition, outreach style, and strategy. We consumed the latest and greatest prospecting content from sales leaders like Becc Holland and Josh Braun. We even took Winning by Design’s 4-week course on prospecting. We decided to focus our efforts exclusively on our best-fit customers: B2B SaaS. We curated a list of these businesses and researched their pricing and billing strategies. Notion housed a dedicated outbound sales playbook, complete with best practices, templates, and creative ideas. Thomas, our senior sales lead in EMEA, built an impressive process and toolset that automatically sourced contact details for qualified prospects at those businesses. Before we started, we mapped out the success criteria for measuring outbound — we required consistency, strong sales qualification, and larger opportunities (±2x ASP because many ChartMogul customers pay $100-$250/month). The success criteria for our outbound sales strategy. Our SDR team strived to contact 40 new accounts/week with highly personalized 1-1 messaging. What worked with our strategy So, how did it go? The energy invested in personalization proved fruitful. Prospects were receptive. Our cold outreach campaigns gathered some really positive responses. Our email outreach yielded meetings, and we were able to create qualified opportunities. We coupled email outreach with social, and Twitter proved a hearty avenue for conversations with SaaS founders. Many SDR teams strive to book meetings, and while that was a top priority for us, we also encouraged prospects to trial our product. This is because many of our buyers prefer to evaluate the capabilities of our product without sales assistance — and ‘being aligned’ with prospects is a core value of our sales culture. We know that trial users with imported data convert to paying customers at a high rate, so getting prospects to try the product is half the job. We were hoping that an outbound strategy can help us add even more fuel to our product-led motion. Through effort and determination, we managed to get new users on the product, reactivate old trials, book discovery calls, create opportunities, and win new customers. Importantly we did this in a way that was true to ourselves without burning our brand. What didn’t work so well… Unfortunately, we weren’t able to win enough customers to consider the program a success. In just under six months, we were able to: Set 39 total meetings set from an average of 1,650 emails sent/month (~10K emails sent total) Create 13 deals (which is less than 1 deals created/month/SDR) Convert 7 new customers (which is less than 1 sales/month/SDR) at a win rate of 54% and ASP = 1.5x You can see that the funnel breaks down from outreach to meetings booked. To counteract this, we increased the volume of outreach after several weeks. Still, we were unable to get enough consistent meetings to ensure the program’s success. I have a few hypotheses why the program didn’t work as we were hoping it would… though it’s most likely a combination of all of the following: B2B SaaS founders are the recipients of lots of outbound, so it’s perhaps a less effective strategy than it was five years ago Our messaging and timing was weak The order/sequencing of our outreach was lacking Prospects on our target list are satisfied with their current state Our segmentation was too broad What’s next? Continuing the program could mean winning a new large customer here and there, but the allure of outbound promises consistency. And we must employ sustainable strategies that give us energy and keep us focused. This is, of course, a bit frustrating, but our dedicated attempt was comprehensive enough to learn that outbound sales is not a viable GTM strategy given current inputs. And maybe that’s true for you too. We hear a lot about the importance of focus for product teams, but rarely for commercial teams. Sales and marketing teams are all too often pursuing a quick win or growth hack instead of sustainable growth via select channels. It’s essential to keep an eye on your limited resources and use them in the best way possible. For now, we’ve decided to retire these efforts and turn our focus on opportunities with potential for viral results. Stay tuned!

[INST] Why We Decided to Pull the Plug on Our Outbound Sales Strategy [/INST]

ChartMogul is a product-led business. We spend most of our waking hours thinking about how to build a reliable, beautiful product that helps subscription businesses grow faster using their customer and billing data. This mentality extends, of course, to our marketing strategy, which is why folks still print out our cheat sheets and read our weekly roundup. It also extends to our customer acquisition and sales strategy. More than 90% of our leads come through our 14-day trial. Then, it’s our job to help those businesses get set up, evaluate our product, and ultimately, make a purchase decision. We’ve grown sustainably for six years in this way. Enter: the allure of an outbound sales motion. In a recent Act-On and Demand Metric study completed in Q2 of 2016, less than 20 percent of mid-size B2B companies relied on solely inbound or outbound strategies; 84 percent of respondents used some mix of both. TechnologyAdvice We know who our prospective buyers are, what is important to them, and how to engage them — after all, we’ve been working with SaaS founders and operators consistently for some time. And importantly, our retention rate for these customers is high. What would it mean for our business if we could crack outbound sales? If we could reliably generate new opportunities and onboard right-fit customers? Could introducing a new sales motion accelerate our ability to hit our next few revenue targets? Our outbound sales strategy We set a plan to find out. To properly test outbound, we knew that we needed the following: Hungry salespeople trained on and devoted to outbound efforts Appropriate process and tooling Target accounts and reliable contact information Personalized, on-brand messaging that illustrates how and why we’re the right subscription analytics partner. We hired two SDRs (Leo and Verena), trained them on our value proposition, outreach style, and strategy. We consumed the latest and greatest prospecting content from sales leaders like Becc Holland and Josh Braun. We even took Winning by Design’s 4-week course on prospecting. We decided to focus our efforts exclusively on our best-fit customers: B2B SaaS. We curated a list of these businesses and researched their pricing and billing strategies. Notion housed a dedicated outbound sales playbook, complete with best practices, templates, and creative ideas. Thomas, our senior sales lead in EMEA, built an impressive process and toolset that automatically sourced contact details for qualified prospects at those businesses. Before we started, we mapped out the success criteria for measuring outbound — we required consistency, strong sales qualification, and larger opportunities (±2x ASP because many ChartMogul customers pay $100-$250/month). The success criteria for our outbound sales strategy. Our SDR team strived to contact 40 new accounts/week with highly personalized 1-1 messaging. What worked with our strategy So, how did it go? The energy invested in personalization proved fruitful. Prospects were receptive. Our cold outreach campaigns gathered some really positive responses. Our email outreach yielded meetings, and we were able to create qualified opportunities. We coupled email outreach with social, and Twitter proved a hearty avenue for conversations with SaaS founders. Many SDR teams strive to book meetings, and while that was a top priority for us, we also encouraged prospects to trial our product. This is because many of our buyers prefer to evaluate the capabilities of our product without sales assistance — and ‘being aligned’ with prospects is a core value of our sales culture. We know that trial users with imported data convert to paying customers at a high rate, so getting prospects to try the product is half the job. We were hoping that an outbound strategy can help us add even more fuel to our product-led motion. Through effort and determination, we managed to get new users on the product, reactivate old trials, book discovery calls, create opportunities, and win new customers. Importantly we did this in a way that was true to ourselves without burning our brand. What didn’t work so well… Unfortunately, we weren’t able to win enough customers to consider the program a success. In just under six months, we were able to: Set 39 total meetings set from an average of 1,650 emails sent/month (~10K emails sent total) Create 13 deals (which is less than 1 deals created/month/SDR) Convert 7 new customers (which is less than 1 sales/month/SDR) at a win rate of 54% and ASP = 1.5x You can see that the funnel breaks down from outreach to meetings booked. To counteract this, we increased the volume of outreach after several weeks. Still, we were unable to get enough consistent meetings to ensure the program’s success. I have a few hypotheses why the program didn’t work as we were hoping it would… though it’s most likely a combination of all of the following: B2B SaaS founders are the recipients of lots of outbound, so it’s perhaps a less effective strategy than it was five years ago Our messaging and timing was weak The order/sequencing of our outreach was lacking Prospects on our target list are satisfied with their current state Our segmentation was too broad What’s next? Continuing the program could mean winning a new large customer here and there, but the allure of outbound promises consistency. And we must employ sustainable strategies that give us energy and keep us focused. This is, of course, a bit frustrating, but our dedicated attempt was comprehensive enough to learn that outbound sales is not a viable GTM strategy given current inputs. And maybe that’s true for you too. We hear a lot about the importance of focus for product teams, but rarely for commercial teams. Sales and marketing teams are all too often pursuing a quick win or growth hack instead of sustainable growth via select channels. It’s essential to keep an eye on your limited resources and use them in the best way possible. For now, we’ve decided to retire these efforts and turn our focus on opportunities with potential for viral results. Stay tuned!

<sys> [INST] Why We Decided to Pull the Plug on Our Outbound Sales Strategy [/INST] ChartMogul is a product-led business. We spend most of our waking hours thinking about how to build a reliable, beautiful product that helps subscription businesses grow faster using their customer and billing data. This mentality extends, of course, to our marketing strategy, which is why folks still print out our cheat sheets and read our weekly roundup. It also extends to our customer acquisition and sales strategy. More than 90% of our leads come through our 14-day trial. Then, it’s our job to help those businesses get set up, evaluate our product, and ultimately, make a purchase decision. We’ve grown sustainably for six years in this way. Enter: the allure of an outbound sales motion. In a recent Act-On and Demand Metric study completed in Q2 of 2016, less than 20 percent of mid-size B2B companies relied on solely inbound or outbound strategies; 84 percent of respondents used some mix of both. TechnologyAdvice We know who our prospective buyers are, what is important to them, and how to engage them — after all, we’ve been working with SaaS founders and operators consistently for some time. And importantly, our retention rate for these customers is high. What would it mean for our business if we could crack outbound sales? If we could reliably generate new opportunities and onboard right-fit customers? Could introducing a new sales motion accelerate our ability to hit our next few revenue targets? Our outbound sales strategy We set a plan to find out. To properly test outbound, we knew that we needed the following: Hungry salespeople trained on and devoted to outbound efforts Appropriate process and tooling Target accounts and reliable contact information Personalized, on-brand messaging that illustrates how and why we’re the right subscription analytics partner. We hired two SDRs (Leo and Verena), trained them on our value proposition, outreach style, and strategy. We consumed the latest and greatest prospecting content from sales leaders like Becc Holland and Josh Braun. We even took Winning by Design’s 4-week course on prospecting. We decided to focus our efforts exclusively on our best-fit customers: B2B SaaS. We curated a list of these businesses and researched their pricing and billing strategies. Notion housed a dedicated outbound sales playbook, complete with best practices, templates, and creative ideas. Thomas, our senior sales lead in EMEA, built an impressive process and toolset that automatically sourced contact details for qualified prospects at those businesses. Before we started, we mapped out the success criteria for measuring outbound — we required consistency, strong sales qualification, and larger opportunities (±2x ASP because many ChartMogul customers pay $100-$250/month). The success criteria for our outbound sales strategy. Our SDR team strived to contact 40 new accounts/week with highly personalized 1-1 messaging. What worked with our strategy So, how did it go? The energy invested in personalization proved fruitful. Prospects were receptive. Our cold outreach campaigns gathered some really positive responses. Our email outreach yielded meetings, and we were able to create qualified opportunities. We coupled email outreach with social, and Twitter proved a hearty avenue for conversations with SaaS founders. Many SDR teams strive to book meetings, and while that was a top priority for us, we also encouraged prospects to trial our product. This is because many of our buyers prefer to evaluate the capabilities of our product without sales assistance — and ‘being aligned’ with prospects is a core value of our sales culture. We know that trial users with imported data convert to paying customers at a high rate, so getting prospects to try the product is half the job. We were hoping that an outbound strategy can help us add even more fuel to our product-led motion. Through effort and determination, we managed to get new users on the product, reactivate old trials, book discovery calls, create opportunities, and win new customers. Importantly we did this in a way that was true to ourselves without burning our brand. What didn’t work so well… Unfortunately, we weren’t able to win enough customers to consider the program a success. In just under six months, we were able to: Set 39 total meetings set from an average of 1,650 emails sent/month (~10K emails sent total) Create 13 deals (which is less than 1 deals created/month/SDR) Convert 7 new customers (which is less than 1 sales/month/SDR) at a win rate of 54% and ASP = 1.5x You can see that the funnel breaks down from outreach to meetings booked. To counteract this, we increased the volume of outreach after several weeks. Still, we were unable to get enough consistent meetings to ensure the program’s success. I have a few hypotheses why the program didn’t work as we were hoping it would… though it’s most likely a combination of all of the following: B2B SaaS founders are the recipients of lots of outbound, so it’s perhaps a less effective strategy than it was five years ago Our messaging and timing was weak The order/sequencing of our outreach was lacking Prospects on our target list are satisfied with their current state Our segmentation was too broad What’s next? Continuing the program could mean winning a new large customer here and there, but the allure of outbound promises consistency. And we must employ sustainable strategies that give us energy and keep us focused. This is, of course, a bit frustrating, but our dedicated attempt was comprehensive enough to learn that outbound sales is not a viable GTM strategy given current inputs. And maybe that’s true for you too. We hear a lot about the importance of focus for product teams, but rarely for commercial teams. Sales and marketing teams are all too often pursuing a quick win or growth hack instead of sustainable growth via select channels. It’s essential to keep an eye on your limited resources and use them in the best way possible. For now, we’ve decided to retire these efforts and turn our focus on opportunities with potential for viral results. Stay tuned! </sys

The magic of quality feedback. The past two weeks have also highlighted for us the importance, and almost magical nature of quality feedback. Building software without feedback is like sailing through fog; you sort of know which direction you’re heading but until the fog clears you can’t be completely certain of where you are and what’s around you. After a couple of blog posts, tweets and retweets we received over 200 beta signups. A great number to begin getting some people using our app. We started sending out invites one at a time, waited until people had completed the on-boarding process (luckily this was a high % of users from the start) and then reached out individually via email to ask for feedback. Everyone we asked has been super friendly and willing to help us out – and the results have been enlightening. UX mistakes that had been staring us in the face for months become immediately apparent when you see people using your product for the first time. We’ve learnt about use cases we’d never thought of and been given feature suggestions that in hindsight seem obvious. We’re no longer sailing through fog For collecting feedback we’ve found doing screen-shares over Skype or join.me probably gives the best mix of power & convenience (in person is probably best, but not always practical) and email exchanges are sort of like the bread and butter. Photo credit Toilography We’ll be experimenting with other ways to collect feedback – it’s my experience that the organisations who’ve taken the time to make it super-easy and fun to give feedback usually also provide a better customer experience in general. Singapore’s Changi Airport, which is regularly rated the best airport in the world, is a good example of this. Changi is covered with these screens, where with one touch you can rate your experience in different parts of the airport. This helps identify areas for improvement (down to the individual toilet). The first thing to do when receiving feedback is to really listen and make sure you have the attitude that the person giving it is 100% correct. If you hold onto the belief that your product is right, if only the user took the time to figure out how to use it properly, then you’re most likely on a losing path. You need to internalise that the customer is always right, and you’re most likely wrong. The next step is to figure out what to do with the feedback, sometimes implementing exactly what the user says they want isn’t the right approach, but there’s usually a way to resolve their underlying need while staying true to your own product vision. Our strategy has been to try and quickly hammer out the easier improvements right away and add the larger projects to our todo list where we can spend more time thinking about the optimum implementation. We’d like to say thanks to everyone who’s taken the time to respond and give feedback, please keep it coming, we’re listening. If you’d like to get in touch please email [email protected] and we’ll be happy to spend time understanding your requirements via email or phone.

[INST] The magic of quality feedback [/INST]

The past two weeks have also highlighted for us the importance, and almost magical nature of quality feedback. Building software without feedback is like sailing through fog; you sort of know which direction you’re heading but until the fog clears you can’t be completely certain of where you are and what’s around you. After a couple of blog posts, tweets and retweets we received over 200 beta signups. A great number to begin getting some people using our app. We started sending out invites one at a time, waited until people had completed the on-boarding process (luckily this was a high % of users from the start) and then reached out individually via email to ask for feedback. Everyone we asked has been super friendly and willing to help us out – and the results have been enlightening. UX mistakes that had been staring us in the face for months become immediately apparent when you see people using your product for the first time. We’ve learnt about use cases we’d never thought of and been given feature suggestions that in hindsight seem obvious. We’re no longer sailing through fog For collecting feedback we’ve found doing screen-shares over Skype or join.me probably gives the best mix of power & convenience (in person is probably best, but not always practical) and email exchanges are sort of like the bread and butter. Photo credit Toilography We’ll be experimenting with other ways to collect feedback – it’s my experience that the organisations who’ve taken the time to make it super-easy and fun to give feedback usually also provide a better customer experience in general. Singapore’s Changi Airport, which is regularly rated the best airport in the world, is a good example of this. Changi is covered with these screens, where with one touch you can rate your experience in different parts of the airport. This helps identify areas for improvement (down to the individual toilet). The first thing to do when receiving feedback is to really listen and make sure you have the attitude that the person giving it is 100% correct. If you hold onto the belief that your product is right, if only the user took the time to figure out how to use it properly, then you’re most likely on a losing path. You need to internalise that the customer is always right, and you’re most likely wrong. The next step is to figure out what to do with the feedback, sometimes implementing exactly what the user says they want isn’t the right approach, but there’s usually a way to resolve their underlying need while staying true to your own product vision. Our strategy has been to try and quickly hammer out the easier improvements right away and add the larger projects to our todo list where we can spend more time thinking about the optimum implementation. We’d like to say thanks to everyone who’s taken the time to respond and give feedback, please keep it coming, we’re listening. If you’d like to get in touch please email [email protected] and we’ll be happy to spend time understanding your requirements via email or phone.

<sys> [INST] The magic of quality feedback [/INST] The past two weeks have also highlighted for us the importance, and almost magical nature of quality feedback. Building software without feedback is like sailing through fog; you sort of know which direction you’re heading but until the fog clears you can’t be completely certain of where you are and what’s around you. After a couple of blog posts, tweets and retweets we received over 200 beta signups. A great number to begin getting some people using our app. We started sending out invites one at a time, waited until people had completed the on-boarding process (luckily this was a high % of users from the start) and then reached out individually via email to ask for feedback. Everyone we asked has been super friendly and willing to help us out – and the results have been enlightening. UX mistakes that had been staring us in the face for months become immediately apparent when you see people using your product for the first time. We’ve learnt about use cases we’d never thought of and been given feature suggestions that in hindsight seem obvious. We’re no longer sailing through fog For collecting feedback we’ve found doing screen-shares over Skype or join.me probably gives the best mix of power & convenience (in person is probably best, but not always practical) and email exchanges are sort of like the bread and butter. Photo credit Toilography We’ll be experimenting with other ways to collect feedback – it’s my experience that the organisations who’ve taken the time to make it super-easy and fun to give feedback usually also provide a better customer experience in general. Singapore’s Changi Airport, which is regularly rated the best airport in the world, is a good example of this. Changi is covered with these screens, where with one touch you can rate your experience in different parts of the airport. This helps identify areas for improvement (down to the individual toilet). The first thing to do when receiving feedback is to really listen and make sure you have the attitude that the person giving it is 100% correct. If you hold onto the belief that your product is right, if only the user took the time to figure out how to use it properly, then you’re most likely on a losing path. You need to internalise that the customer is always right, and you’re most likely wrong. The next step is to figure out what to do with the feedback, sometimes implementing exactly what the user says they want isn’t the right approach, but there’s usually a way to resolve their underlying need while staying true to your own product vision. Our strategy has been to try and quickly hammer out the easier improvements right away and add the larger projects to our todo list where we can spend more time thinking about the optimum implementation. We’d like to say thanks to everyone who’s taken the time to respond and give feedback, please keep it coming, we’re listening. If you’d like to get in touch please email [email protected] and we’ll be happy to spend time understanding your requirements via email or phone. </sys

Startup Sales: Everything You Need to Know About Building Your First Sales Team. Startup founders are stretched thinly like silly putty. Between hiring, training, and helping new employees excel, iterating on customer feedback, building brand awareness, et al., there are hundreds of activities you can engage in on a daily basis. But the one thing you must think about is sales. Without sales, your startup dies. Yet, sales is all too often a dirty word. One reason for this is because early sales managers repeatedly make avoidable mistakes on the journey to go-to-market fit. They overpromise and underdeliver. They go for the sale without caring about what the customer needs in the first place. They get salesy. It doesn’t have to be that way. Below, I share common pitfalls and techniques in four fundamental areas of startup sales. We’ll hit: Your first sales playbook Sales hiring: mistakes and must-dos The importance of sales methodology and why you can’t wing it Finding the right sales ops balance In each section, I’ll also aim to give advice about how to repurpose first version of these assets as you evolve your go-to-market strategy because with limited resources, you should make key assets, like sales playbooks, fungible. I wrote this because sales isn’t a magic switch you turn. SaaS founders and operators need help structuring and understanding the importance of sales basics. But it is also a lot of text. So feel free to look around and jump to the sections that are most relevant to your team. Here’s a summary on the content to make it easy to jump to the part you’re most interested in: Table of Contents Your first sales playbook Your second sales playbook Sales hiring pitfalls and must-dos Characteristics of high performers Sales methodology and why you can’t wing it Which sales methodology is right for me Coach regularly The sales ops balance Or jump right into it! Your first sales playbook Your startup sales playbook is your evergreen guide to securing happy, paying customers. It’s a collection of your processes and practices that help you achieve your sales targets and continually improve your sales organization. But where do you start when you want to create your first one? Your earliest customers will shape your thinking, your next few moves, and even your cash flow. Without knowing it, you’ve started to lay the groundwork for your sales playbook and your go-to-market engine. Here’s what I mean… Remember the first customer you closed? How after that payment was processed or that service order was signed, you set your sights on cloning that customer. Calvin gets first-hand experience on why perfect duplicates can be less than perfect “Go get X-number more of Y-type customer,” right? Nod your head if you’re guilty of saying or thinking this — for many startup sales organizations this is where strategy starts and ends. For many sales organizations “Go get more X-type customers” is where sales strategy starts and ends. Tweet this quote Because you’re trying to figure out how to replicate and quicken your successes, it can be tempting to build your sales playbook around your first customer or an early customer that contributes significant revenue and product feedback. Or a customer that simply makes you feel good. Beware of this bias though. Spend time striking the delicate balance of understanding who you are and who you want to be. Next, start to write this down — along with the processes and practices you need to execute consistently to achieve your vision. And voilà, you’re on your way to an early sales playbook that can focus and strengthen your commercial operations. Here are a few prompts to help you get started on the why (which you’ll want to do before interviewing sales candidates — the good ones will ask these kinds of questions): What does the buying experience feel like for your customers? What is it like to be on the receiving end of sales messaging and calls? How do you expect your individual operators to behave? What do you want your sales culture to be like (or not be like?) What motivates your sales team? And now, some on the how and the who: How is sales involved in that process? What sales model is right for your customer’s buying experience? What sales model is right to help you achieve your desired outcomes? What does your sales team need to know about the industry to be a credible and successful advocate for your product and for prospective buyers? What problem do you solve for which kinds of buyers? (note: this is the beginning of your ideal customer profile (ICP) and buyer persona definitions) How do you get a conversation started with those key people? What are the general motions of a sales cycle? What can go wrong and what should you be on the lookout for? Key wins and why they matter A thorough introspection, even if incomplete, makes it easy for future hires to succeed. Don’t expect a new hire in sales (or any domain, really) to come in and solve your puzzles and problems. I see people make this mistake for VP, C-level, roles, so why would you set this precedent and make this mistake for individual contributors or even junior salespeople? This exercise also gives you the opportunity to ensure that from the get-go, your commercial team is operating in a way that is aligned with how you want to run the business — instead of allowing new hires to apply old or inappropriate sales methodologies that will burn leads and shape customer opinions. Your second sales playbook A perfectly crisp sales playbook may feel unattainable because like most startup operations, you’re learning about your ICP and your messaging as you sell. In fact, when I asked Khris Fenton, Director of Sales Enablement and Operations at WealthEngine for his definition of a sales playbook, he laughed and said, “That thing I want to do but simultaneously don’t think I’ll ever complete.” Of course, no one wants a shoddy or incomplete sales playbook. Your go-to-market strategy and how you articulate it to your sales team needs serious and regular fine-tuning (and at some point, a full-time or even team of certified, top-notch mechanics). If you’ve spent time massaging a first version of what I’ve described above, my next advice is three-fold: Get crisp without overengineering Maintain a narrative Begin building sales tools As your understanding of your buyers matures, you should get as specific as you can without building in details that will quickly be forgotten or dated. Keep in mind that the best and most motivated salespeople will be curious for industry and product information in order to sell better, faster. More concrete information on the industry, guidance on messaging, and customer success stories will help future hires ramp faster. Your playbook can evolve to include specific detail on: current trends and common language in the industry (even acronym definitions) defined key differentiators about your product and company pain to probe for required reading and training materials messaging standards and/or sample messaging (email templates, proposal advice, etc.) product and content marketing assets for different sales touchpoints To me, a healthy startup sales playbook has consistent material that is consumed daily and iterated on monthly. I find that a lot of the battlecards, buyer personas, and templates are superfluous exercises to show commercial progress. While you should of course put the energy into giving smart guidance, beware of growth techniques or candidates that sell a magic pill. The other key indicator of a useful sales playbook is its narrative. As your content and sales tools begin to grow, it can be challenging to weave together the core components in a way that is consistent. That’s why I suggest spending significant time on the why of your sales organization. If your sales team has a way to evaluate their own behavior and customer interactions against the organization’s expectations and standard operating procedures, they’ll be better situated to course correct with available resources. Finally, you’ll begin to bake in some sales templates and tools. I’ll talk more about sales ops later on, but my guidance is to work on building your first sales tools quickly and one at a time. It will likely happen organically — a new hire will ask questions like ‘how can I overcome an objection about a missing or inadequate feature’? So, you (or likely your first sales manager) will begin to create assets like this: A taste of our process for overcoming common objections Which can get even further fleshed out into guidance/assets like this: Example of objection handling tree for “We’re going to build our own solution”. (Click to zoom image) Sales hiring pitfalls and must-dos Now that you have a sales playbook with concrete answers to questions sales candidates will inevitably ask, you’re ready to begin hiring. Whether you have help from an HR department or you’re a lone recruiter/sales manager/quota-carrying badass, I encourage you to follow a structured process. This will help you combat the feeling of being ‘sold’ during the interview process and ensure you’re evaluating characteristics of high performers. This is the process I use to hire a full-time Account Executive at ChartMogul: Initial phone screen: the purpose of this 15-30 minute interview is to get on the same page on three things — competencies, culture, and compensation. Hiring manager video interview: this is the deep dive. This is where I’m looking for core competencies. In this interview, I ask questions to assess sales experience, skills, and methodology. Depending on the role, I look for 6-9 characteristics of high performers (some examples on this below). Sales skills evaluation: this is the practical exercise. It can also vary by role (e.g. a writing prompt, a discovery role play, a product demo, or a territory plan), but should be hands-on with some required prep work. I also like to use this exercise to assess self-awareness and coachability. (Optional) Peer interview: this can be useful if you’re competing in a tight talent market and want to give the candidate a different perspective. It’s especially helpful if all other interviews have been conducted by the hiring manager. CEO interview: this depends on the size/structure of the organization. Reference checks: I like to use reference checks to understand how best to set up a prospective employee for success. Some organizations use scorecards and ATS systems like Recruitee to track interviewer feedback and candidate progress, but don’t apply unnecessary structure. Characteristics of high performers Ready to schedule those interviews? Not so fast. Before you talk to the first candidate, earmark the key characteristics you expect candidates to showcase during the application process. In addition to evaluating startup sales experience and product knowledge, candidates should exhibit specific characteristics that will help them win over your buyers and excel long term. This will make sure you hire a great fit candidate — and help you avoid the “shiny object” syndrome where you get excited about a candidate because of a great logo on her resume. The average sales organization salesperson turnover rate is now 34%, with “involuntary turnover up nearly two-thirds of that number.” The same research suggests that one in ten companies experience turnover rates above 55%. The new average time for reps to ramp to productivity has reached 5.3 months. On average, only 67% of reps are making quota, down from 74% in 2012. No matter how you spin it, the data reflects an unfortunate trend. Anthony Chaine And for next-level startup sales hiring, list out those characteristics. Some of those characteristics depend on your sales model and your industry. You can pinpoint those characteristics by reflecting on sales methodology (more on that later). Here’s what I mean: This is a sample list of characteristics we evaluate during our AE hiring process: Business acumen Consistent execution Storytelling Likeability Offers a unique perspective Drives two-way communication Credible as an expert in SaaS Comfortable discussing money Can pressure the customer By itself, it’s a fine checklist. But have you ever had that nagging feeling after conducting an interview? Maybe something bothered you but you just can’t put your finger on it? By defining those competencies and providing evaluation guidelines, you can make sure that you, or your HR team, aren’t checking those boxes simply to get a body in the door. It takes ~50 days on average to hire a sales professional. Don’t rush it. Salespeople are skilled practitioners of selling themselves too. One of the essential pieces you have to get before you’re ready to hire is to define the “why” of your sales organization: The best salespeople want to believe in what they are selling. And even more so, they want to believe in the business they are building by selling your product/service. So if you need to bring on the right salespeople NOW, show them how you’re making a difference why they should drop everything to get on board and be part of your mission. Amy Volas Here is an example of how we evaluate one competency in the interview process. You can ask these questions in a video interview or even to a candidate’s supplied reference: An example of how we define and interview to assess specific competencies when hiring (Click to zoom image) It’s possible, that you find a candidate that you’re ready to hire, but who does not excel at every targeted competency. With a structured interviewing process like this, you can identify areas of potential concern and proactively work them into your onboarding and management strategy. If there is doubt, though, stop and close out the process. There is a lot of competing advice about whether you should hire a sales candidate with nearly identical skills and experience and/or an existing network of contacts. For example, if you sell healthcare wearables to hospices and palliative care organizations in the U.S., should you only hire from that talent pool? In truth, I’ve seen this formula take off and also fail spectacularly. If you have a particularly niche product or require relationships with larger channel partners (like Salesforce, Oracle, Microsoft, Atlassian, etc.) it might make sense to hire from the same pool, but it’s also harder and more expensive. For most SaaS companies, I would recommend hiring salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. The best practice for SaaS companies is to hire salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. Tweet this quote For example, if I hire someone that was closing deals on a 15-30 day sales cycle and my sales cycles are 6-9 months, I run the risk of that person a) not being successful and b) getting bored/being a retention risk. It can be a very expensive and painful mistake to make. Hopefully, by now I’ve debunked the idea that anyone can sell at your startup. Like any critical role, executing a planned hiring process will help you hire and retain top talent. For further resources about how to structure sales compensation plans, I recommend: SAAS Sales Compensation Simplified Startup sales methodology and why you can’t wing it Stick around a group of battle-tested sellers long enough and someone is sure to tell you how their blue sheet helped them nail that RFP process last quarter. Miller Heiman, Sander, SPIN, Challenger, MEDDIC, SNAP. There’s no shortage of options if you’re on the hunt for a sales methodology. Unlike a sales process, which focuses on defining the steps or stages on the path to purchase, a sales methodology offers a framework for how sales reps can approach each of those stages to win the deal Jacco van der Kooij Your sales methodology defines your approach to the buyer-seller relationship and how your team solves prospect problems. A defined sales methodology is the foundation of your sales organization — and should come before your sales model or process. For startups, applying this much structure may seem counterintuitive or even like a waste of critical resources. Perhaps this is because, as Kooij goes on: Most of the most popular sales methodologies are trademarked and were created by sales consultants and trainers, who wanted to define their own signature approach. Unfortunately, this means many of the methodologies you’ve heard of are really products being sold to you. Here’s why it’s so important though. Your startup sales methodology grounds your decision-making process. In sales (and startups for that matter), every day, every call is filled with countless decisions. How should I frame this? What should I highlight in my demo? How will the customer respond? What are the customers priorities and how can I communicate effectively? When is the right time to follow up and what should I say? Process can help you answer some of these questions but methodology gets to the heart of the matter. A well-defined sales methodology brings cohesion to the sales process and arms your sales team with a compass for what to do when a new decision or question arises to which there is not an obvious answer. If done well, it can help eliminate that paralyzing feeling of what should I do next or what if I do or say the wrong thing. Which sales methodology is right for me? It depends. To start, have a serious think about what the selling and buying experience was like for your first few customers. You want to employ a refined methodology that is most aligned with your prospective customers. When and how were they aware of their problem/opportunity? What steps did they take to learn about and evaluate solutions? How do they want to engage with your team? What are their expectations about the sales process? From there, do some research. And be sure to put that research into context. Know that the Challenger Sales model, for example, is about building consensus with various stakeholders in a large enterprise sale, so if you are hunting mice, your methodology shouldn’t involve educating the customer about their problem. Five ways to build a $100m SaaS business by chasing different “animals.” Source: Christoph Janz Don’t feel like you have to latch onto every piece of advice within a methodology, but as your decision will be the foundation for your sales organization, it’s important not to waver or to introduce frequent changes. Coach regularly Too many startups expect salespeople to be immediate and consistent star performers. One constant, regardless of what industry your startup is in, though, is change. As your sales playbook, markets, and products evolve, you should expect to invest regularly in the development of your sales reps. Andy Farquharson Document and exercise your methodology. One way to make sure your sales methodology runs deep is to conduct regular role-playing and coaching exercises. Our team chooses a tough customer call each week and workshops key inflection points. It’s a standing commitment but well worth the investment — because we know practice makes sales practitioners better. The sales ops balance By now I’ve asked you to document an entire playbook, your sales hiring practices, and a sales framework and we haven’t even introduced process or technology. Who manages all of this? There’s a reason startup sales and revenue ops are so prevalent in most B2B sales organizations — it’s a lot of moving parts. Your sales team is responsible for bringing revenue into your company. Your sales operations team helps them do it faster, better, and with a lot less hassle. It’s a crucial part of your sales organization. Steli Efti Sales ops can be a catch-all for: Sales stack management — CRM and sales tool administration Sales strategy and process improvement Sales reporting and forecasting Sales training and curriculum development Unfortunately, sales ops is all too often an excuse for management to ask questions and validate hypotheses about sales and marketing performance. “Can you show me a report of converted leads from the SaaStock conference?” Reporting and quantitative analysis are necessary for team and individual performance improvement. Beware, though, of investing your limited resources in CRM dashboard perfection when your processes are evolving. Really sales ops is responsible for managing how your organization systematically improves how the buyer-seller relationship works. One way to implement a regular rhythm of sales improvement is with a defined change management process. If you’re triaging Slack messages and sticky notes from your team with requests like “can we add a new field to track buyer persona?” start by putting all of those requests and suggestions in one place. Here’s what I mean: We use a Kanban board to track all requests for changes to our sales process You can use a board like this to identify and prioritize common challenges in your sales organization. You can also use it to iterate on your training materials. As your sales organization matures in tools and processes, you can feed “completed” items on your change management board back into your sales playbook so that new hires have all of the details on how leads are assigned. It’s okay if non-priority items sit — as long as you’re growing and improving the sales organization in a sustainable way that makes sense for the business. You’d be surprised how many emergent requests do not impact you or your team’s ability to sell because like most other areas of SaaS, there is no silver bullet CRM for sales productivity and higher win rates. A solid foundation for startup sales success No startup can survive without selling. But that doesn’t mean the early-stage scrappy founder-does-it-all-type of selling will work as your company matures. On the contrary, one of your essential focus areas as a founder is to lay down the foundation for scaling your commercial team. In this post, I tried to collect the essential elements of such a foundation: Building a sales playbook that collects essential processes and tools Successful startup sales hiring Picking a sales methodology that supports your organization Getting the right balance in sales ops But once you’ve developed (and documented) your initial thinking about those, it doesn’t mean your job is done. Just like you constantly iterate on your product, so you should look for opportunities to improve your sales operations. A big part of the inspiration for those improvements will come just as your team goes out and talks to customers. But it is essential that you develop a process for recording, analyzing, and acting on the insight you get from selling. My final piece of advice is — don’t be scared. I know selling sounds intimidating, especially to those who come from a technical background, but just like with building a product and/or a company, you tend to develop an appetite for it once you start doing it.

[INST] Startup Sales: Everything You Need to Know About Building Your First Sales Team [/INST]

Startup founders are stretched thinly like silly putty. Between hiring, training, and helping new employees excel, iterating on customer feedback, building brand awareness, et al., there are hundreds of activities you can engage in on a daily basis. But the one thing you must think about is sales. Without sales, your startup dies. Yet, sales is all too often a dirty word. One reason for this is because early sales managers repeatedly make avoidable mistakes on the journey to go-to-market fit. They overpromise and underdeliver. They go for the sale without caring about what the customer needs in the first place. They get salesy. It doesn’t have to be that way. Below, I share common pitfalls and techniques in four fundamental areas of startup sales. We’ll hit: Your first sales playbook Sales hiring: mistakes and must-dos The importance of sales methodology and why you can’t wing it Finding the right sales ops balance In each section, I’ll also aim to give advice about how to repurpose first version of these assets as you evolve your go-to-market strategy because with limited resources, you should make key assets, like sales playbooks, fungible. I wrote this because sales isn’t a magic switch you turn. SaaS founders and operators need help structuring and understanding the importance of sales basics. But it is also a lot of text. So feel free to look around and jump to the sections that are most relevant to your team. Here’s a summary on the content to make it easy to jump to the part you’re most interested in: Table of Contents Your first sales playbook Your second sales playbook Sales hiring pitfalls and must-dos Characteristics of high performers Sales methodology and why you can’t wing it Which sales methodology is right for me Coach regularly The sales ops balance Or jump right into it! Your first sales playbook Your startup sales playbook is your evergreen guide to securing happy, paying customers. It’s a collection of your processes and practices that help you achieve your sales targets and continually improve your sales organization. But where do you start when you want to create your first one? Your earliest customers will shape your thinking, your next few moves, and even your cash flow. Without knowing it, you’ve started to lay the groundwork for your sales playbook and your go-to-market engine. Here’s what I mean… Remember the first customer you closed? How after that payment was processed or that service order was signed, you set your sights on cloning that customer. Calvin gets first-hand experience on why perfect duplicates can be less than perfect “Go get X-number more of Y-type customer,” right? Nod your head if you’re guilty of saying or thinking this — for many startup sales organizations this is where strategy starts and ends. For many sales organizations “Go get more X-type customers” is where sales strategy starts and ends. Tweet this quote Because you’re trying to figure out how to replicate and quicken your successes, it can be tempting to build your sales playbook around your first customer or an early customer that contributes significant revenue and product feedback. Or a customer that simply makes you feel good. Beware of this bias though. Spend time striking the delicate balance of understanding who you are and who you want to be. Next, start to write this down — along with the processes and practices you need to execute consistently to achieve your vision. And voilà, you’re on your way to an early sales playbook that can focus and strengthen your commercial operations. Here are a few prompts to help you get started on the why (which you’ll want to do before interviewing sales candidates — the good ones will ask these kinds of questions): What does the buying experience feel like for your customers? What is it like to be on the receiving end of sales messaging and calls? How do you expect your individual operators to behave? What do you want your sales culture to be like (or not be like?) What motivates your sales team? And now, some on the how and the who: How is sales involved in that process? What sales model is right for your customer’s buying experience? What sales model is right to help you achieve your desired outcomes? What does your sales team need to know about the industry to be a credible and successful advocate for your product and for prospective buyers? What problem do you solve for which kinds of buyers? (note: this is the beginning of your ideal customer profile (ICP) and buyer persona definitions) How do you get a conversation started with those key people? What are the general motions of a sales cycle? What can go wrong and what should you be on the lookout for? Key wins and why they matter A thorough introspection, even if incomplete, makes it easy for future hires to succeed. Don’t expect a new hire in sales (or any domain, really) to come in and solve your puzzles and problems. I see people make this mistake for VP, C-level, roles, so why would you set this precedent and make this mistake for individual contributors or even junior salespeople? This exercise also gives you the opportunity to ensure that from the get-go, your commercial team is operating in a way that is aligned with how you want to run the business — instead of allowing new hires to apply old or inappropriate sales methodologies that will burn leads and shape customer opinions. Your second sales playbook A perfectly crisp sales playbook may feel unattainable because like most startup operations, you’re learning about your ICP and your messaging as you sell. In fact, when I asked Khris Fenton, Director of Sales Enablement and Operations at WealthEngine for his definition of a sales playbook, he laughed and said, “That thing I want to do but simultaneously don’t think I’ll ever complete.” Of course, no one wants a shoddy or incomplete sales playbook. Your go-to-market strategy and how you articulate it to your sales team needs serious and regular fine-tuning (and at some point, a full-time or even team of certified, top-notch mechanics). If you’ve spent time massaging a first version of what I’ve described above, my next advice is three-fold: Get crisp without overengineering Maintain a narrative Begin building sales tools As your understanding of your buyers matures, you should get as specific as you can without building in details that will quickly be forgotten or dated. Keep in mind that the best and most motivated salespeople will be curious for industry and product information in order to sell better, faster. More concrete information on the industry, guidance on messaging, and customer success stories will help future hires ramp faster. Your playbook can evolve to include specific detail on: current trends and common language in the industry (even acronym definitions) defined key differentiators about your product and company pain to probe for required reading and training materials messaging standards and/or sample messaging (email templates, proposal advice, etc.) product and content marketing assets for different sales touchpoints To me, a healthy startup sales playbook has consistent material that is consumed daily and iterated on monthly. I find that a lot of the battlecards, buyer personas, and templates are superfluous exercises to show commercial progress. While you should of course put the energy into giving smart guidance, beware of growth techniques or candidates that sell a magic pill. The other key indicator of a useful sales playbook is its narrative. As your content and sales tools begin to grow, it can be challenging to weave together the core components in a way that is consistent. That’s why I suggest spending significant time on the why of your sales organization. If your sales team has a way to evaluate their own behavior and customer interactions against the organization’s expectations and standard operating procedures, they’ll be better situated to course correct with available resources. Finally, you’ll begin to bake in some sales templates and tools. I’ll talk more about sales ops later on, but my guidance is to work on building your first sales tools quickly and one at a time. It will likely happen organically — a new hire will ask questions like ‘how can I overcome an objection about a missing or inadequate feature’? So, you (or likely your first sales manager) will begin to create assets like this: A taste of our process for overcoming common objections Which can get even further fleshed out into guidance/assets like this: Example of objection handling tree for “We’re going to build our own solution”. (Click to zoom image) Sales hiring pitfalls and must-dos Now that you have a sales playbook with concrete answers to questions sales candidates will inevitably ask, you’re ready to begin hiring. Whether you have help from an HR department or you’re a lone recruiter/sales manager/quota-carrying badass, I encourage you to follow a structured process. This will help you combat the feeling of being ‘sold’ during the interview process and ensure you’re evaluating characteristics of high performers. This is the process I use to hire a full-time Account Executive at ChartMogul: Initial phone screen: the purpose of this 15-30 minute interview is to get on the same page on three things — competencies, culture, and compensation. Hiring manager video interview: this is the deep dive. This is where I’m looking for core competencies. In this interview, I ask questions to assess sales experience, skills, and methodology. Depending on the role, I look for 6-9 characteristics of high performers (some examples on this below). Sales skills evaluation: this is the practical exercise. It can also vary by role (e.g. a writing prompt, a discovery role play, a product demo, or a territory plan), but should be hands-on with some required prep work. I also like to use this exercise to assess self-awareness and coachability. (Optional) Peer interview: this can be useful if you’re competing in a tight talent market and want to give the candidate a different perspective. It’s especially helpful if all other interviews have been conducted by the hiring manager. CEO interview: this depends on the size/structure of the organization. Reference checks: I like to use reference checks to understand how best to set up a prospective employee for success. Some organizations use scorecards and ATS systems like Recruitee to track interviewer feedback and candidate progress, but don’t apply unnecessary structure. Characteristics of high performers Ready to schedule those interviews? Not so fast. Before you talk to the first candidate, earmark the key characteristics you expect candidates to showcase during the application process. In addition to evaluating startup sales experience and product knowledge, candidates should exhibit specific characteristics that will help them win over your buyers and excel long term. This will make sure you hire a great fit candidate — and help you avoid the “shiny object” syndrome where you get excited about a candidate because of a great logo on her resume. The average sales organization salesperson turnover rate is now 34%, with “involuntary turnover up nearly two-thirds of that number.” The same research suggests that one in ten companies experience turnover rates above 55%. The new average time for reps to ramp to productivity has reached 5.3 months. On average, only 67% of reps are making quota, down from 74% in 2012. No matter how you spin it, the data reflects an unfortunate trend. Anthony Chaine And for next-level startup sales hiring, list out those characteristics. Some of those characteristics depend on your sales model and your industry. You can pinpoint those characteristics by reflecting on sales methodology (more on that later). Here’s what I mean: This is a sample list of characteristics we evaluate during our AE hiring process: Business acumen Consistent execution Storytelling Likeability Offers a unique perspective Drives two-way communication Credible as an expert in SaaS Comfortable discussing money Can pressure the customer By itself, it’s a fine checklist. But have you ever had that nagging feeling after conducting an interview? Maybe something bothered you but you just can’t put your finger on it? By defining those competencies and providing evaluation guidelines, you can make sure that you, or your HR team, aren’t checking those boxes simply to get a body in the door. It takes ~50 days on average to hire a sales professional. Don’t rush it. Salespeople are skilled practitioners of selling themselves too. One of the essential pieces you have to get before you’re ready to hire is to define the “why” of your sales organization: The best salespeople want to believe in what they are selling. And even more so, they want to believe in the business they are building by selling your product/service. So if you need to bring on the right salespeople NOW, show them how you’re making a difference why they should drop everything to get on board and be part of your mission. Amy Volas Here is an example of how we evaluate one competency in the interview process. You can ask these questions in a video interview or even to a candidate’s supplied reference: An example of how we define and interview to assess specific competencies when hiring (Click to zoom image) It’s possible, that you find a candidate that you’re ready to hire, but who does not excel at every targeted competency. With a structured interviewing process like this, you can identify areas of potential concern and proactively work them into your onboarding and management strategy. If there is doubt, though, stop and close out the process. There is a lot of competing advice about whether you should hire a sales candidate with nearly identical skills and experience and/or an existing network of contacts. For example, if you sell healthcare wearables to hospices and palliative care organizations in the U.S., should you only hire from that talent pool? In truth, I’ve seen this formula take off and also fail spectacularly. If you have a particularly niche product or require relationships with larger channel partners (like Salesforce, Oracle, Microsoft, Atlassian, etc.) it might make sense to hire from the same pool, but it’s also harder and more expensive. For most SaaS companies, I would recommend hiring salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. The best practice for SaaS companies is to hire salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. Tweet this quote For example, if I hire someone that was closing deals on a 15-30 day sales cycle and my sales cycles are 6-9 months, I run the risk of that person a) not being successful and b) getting bored/being a retention risk. It can be a very expensive and painful mistake to make. Hopefully, by now I’ve debunked the idea that anyone can sell at your startup. Like any critical role, executing a planned hiring process will help you hire and retain top talent. For further resources about how to structure sales compensation plans, I recommend: SAAS Sales Compensation Simplified Startup sales methodology and why you can’t wing it Stick around a group of battle-tested sellers long enough and someone is sure to tell you how their blue sheet helped them nail that RFP process last quarter. Miller Heiman, Sander, SPIN, Challenger, MEDDIC, SNAP. There’s no shortage of options if you’re on the hunt for a sales methodology. Unlike a sales process, which focuses on defining the steps or stages on the path to purchase, a sales methodology offers a framework for how sales reps can approach each of those stages to win the deal Jacco van der Kooij Your sales methodology defines your approach to the buyer-seller relationship and how your team solves prospect problems. A defined sales methodology is the foundation of your sales organization — and should come before your sales model or process. For startups, applying this much structure may seem counterintuitive or even like a waste of critical resources. Perhaps this is because, as Kooij goes on: Most of the most popular sales methodologies are trademarked and were created by sales consultants and trainers, who wanted to define their own signature approach. Unfortunately, this means many of the methodologies you’ve heard of are really products being sold to you. Here’s why it’s so important though. Your startup sales methodology grounds your decision-making process. In sales (and startups for that matter), every day, every call is filled with countless decisions. How should I frame this? What should I highlight in my demo? How will the customer respond? What are the customers priorities and how can I communicate effectively? When is the right time to follow up and what should I say? Process can help you answer some of these questions but methodology gets to the heart of the matter. A well-defined sales methodology brings cohesion to the sales process and arms your sales team with a compass for what to do when a new decision or question arises to which there is not an obvious answer. If done well, it can help eliminate that paralyzing feeling of what should I do next or what if I do or say the wrong thing. Which sales methodology is right for me? It depends. To start, have a serious think about what the selling and buying experience was like for your first few customers. You want to employ a refined methodology that is most aligned with your prospective customers. When and how were they aware of their problem/opportunity? What steps did they take to learn about and evaluate solutions? How do they want to engage with your team? What are their expectations about the sales process? From there, do some research. And be sure to put that research into context. Know that the Challenger Sales model, for example, is about building consensus with various stakeholders in a large enterprise sale, so if you are hunting mice, your methodology shouldn’t involve educating the customer about their problem. Five ways to build a $100m SaaS business by chasing different “animals.” Source: Christoph Janz Don’t feel like you have to latch onto every piece of advice within a methodology, but as your decision will be the foundation for your sales organization, it’s important not to waver or to introduce frequent changes. Coach regularly Too many startups expect salespeople to be immediate and consistent star performers. One constant, regardless of what industry your startup is in, though, is change. As your sales playbook, markets, and products evolve, you should expect to invest regularly in the development of your sales reps. Andy Farquharson Document and exercise your methodology. One way to make sure your sales methodology runs deep is to conduct regular role-playing and coaching exercises. Our team chooses a tough customer call each week and workshops key inflection points. It’s a standing commitment but well worth the investment — because we know practice makes sales practitioners better. The sales ops balance By now I’ve asked you to document an entire playbook, your sales hiring practices, and a sales framework and we haven’t even introduced process or technology. Who manages all of this? There’s a reason startup sales and revenue ops are so prevalent in most B2B sales organizations — it’s a lot of moving parts. Your sales team is responsible for bringing revenue into your company. Your sales operations team helps them do it faster, better, and with a lot less hassle. It’s a crucial part of your sales organization. Steli Efti Sales ops can be a catch-all for: Sales stack management — CRM and sales tool administration Sales strategy and process improvement Sales reporting and forecasting Sales training and curriculum development Unfortunately, sales ops is all too often an excuse for management to ask questions and validate hypotheses about sales and marketing performance. “Can you show me a report of converted leads from the SaaStock conference?” Reporting and quantitative analysis are necessary for team and individual performance improvement. Beware, though, of investing your limited resources in CRM dashboard perfection when your processes are evolving. Really sales ops is responsible for managing how your organization systematically improves how the buyer-seller relationship works. One way to implement a regular rhythm of sales improvement is with a defined change management process. If you’re triaging Slack messages and sticky notes from your team with requests like “can we add a new field to track buyer persona?” start by putting all of those requests and suggestions in one place. Here’s what I mean: We use a Kanban board to track all requests for changes to our sales process You can use a board like this to identify and prioritize common challenges in your sales organization. You can also use it to iterate on your training materials. As your sales organization matures in tools and processes, you can feed “completed” items on your change management board back into your sales playbook so that new hires have all of the details on how leads are assigned. It’s okay if non-priority items sit — as long as you’re growing and improving the sales organization in a sustainable way that makes sense for the business. You’d be surprised how many emergent requests do not impact you or your team’s ability to sell because like most other areas of SaaS, there is no silver bullet CRM for sales productivity and higher win rates. A solid foundation for startup sales success No startup can survive without selling. But that doesn’t mean the early-stage scrappy founder-does-it-all-type of selling will work as your company matures. On the contrary, one of your essential focus areas as a founder is to lay down the foundation for scaling your commercial team. In this post, I tried to collect the essential elements of such a foundation: Building a sales playbook that collects essential processes and tools Successful startup sales hiring Picking a sales methodology that supports your organization Getting the right balance in sales ops But once you’ve developed (and documented) your initial thinking about those, it doesn’t mean your job is done. Just like you constantly iterate on your product, so you should look for opportunities to improve your sales operations. A big part of the inspiration for those improvements will come just as your team goes out and talks to customers. But it is essential that you develop a process for recording, analyzing, and acting on the insight you get from selling. My final piece of advice is — don’t be scared. I know selling sounds intimidating, especially to those who come from a technical background, but just like with building a product and/or a company, you tend to develop an appetite for it once you start doing it.

<sys> [INST] Startup Sales: Everything You Need to Know About Building Your First Sales Team [/INST] Startup founders are stretched thinly like silly putty. Between hiring, training, and helping new employees excel, iterating on customer feedback, building brand awareness, et al., there are hundreds of activities you can engage in on a daily basis. But the one thing you must think about is sales. Without sales, your startup dies. Yet, sales is all too often a dirty word. One reason for this is because early sales managers repeatedly make avoidable mistakes on the journey to go-to-market fit. They overpromise and underdeliver. They go for the sale without caring about what the customer needs in the first place. They get salesy. It doesn’t have to be that way. Below, I share common pitfalls and techniques in four fundamental areas of startup sales. We’ll hit: Your first sales playbook Sales hiring: mistakes and must-dos The importance of sales methodology and why you can’t wing it Finding the right sales ops balance In each section, I’ll also aim to give advice about how to repurpose first version of these assets as you evolve your go-to-market strategy because with limited resources, you should make key assets, like sales playbooks, fungible. I wrote this because sales isn’t a magic switch you turn. SaaS founders and operators need help structuring and understanding the importance of sales basics. But it is also a lot of text. So feel free to look around and jump to the sections that are most relevant to your team. Here’s a summary on the content to make it easy to jump to the part you’re most interested in: Table of Contents Your first sales playbook Your second sales playbook Sales hiring pitfalls and must-dos Characteristics of high performers Sales methodology and why you can’t wing it Which sales methodology is right for me Coach regularly The sales ops balance Or jump right into it! Your first sales playbook Your startup sales playbook is your evergreen guide to securing happy, paying customers. It’s a collection of your processes and practices that help you achieve your sales targets and continually improve your sales organization. But where do you start when you want to create your first one? Your earliest customers will shape your thinking, your next few moves, and even your cash flow. Without knowing it, you’ve started to lay the groundwork for your sales playbook and your go-to-market engine. Here’s what I mean… Remember the first customer you closed? How after that payment was processed or that service order was signed, you set your sights on cloning that customer. Calvin gets first-hand experience on why perfect duplicates can be less than perfect “Go get X-number more of Y-type customer,” right? Nod your head if you’re guilty of saying or thinking this — for many startup sales organizations this is where strategy starts and ends. For many sales organizations “Go get more X-type customers” is where sales strategy starts and ends. Tweet this quote Because you’re trying to figure out how to replicate and quicken your successes, it can be tempting to build your sales playbook around your first customer or an early customer that contributes significant revenue and product feedback. Or a customer that simply makes you feel good. Beware of this bias though. Spend time striking the delicate balance of understanding who you are and who you want to be. Next, start to write this down — along with the processes and practices you need to execute consistently to achieve your vision. And voilà, you’re on your way to an early sales playbook that can focus and strengthen your commercial operations. Here are a few prompts to help you get started on the why (which you’ll want to do before interviewing sales candidates — the good ones will ask these kinds of questions): What does the buying experience feel like for your customers? What is it like to be on the receiving end of sales messaging and calls? How do you expect your individual operators to behave? What do you want your sales culture to be like (or not be like?) What motivates your sales team? And now, some on the how and the who: How is sales involved in that process? What sales model is right for your customer’s buying experience? What sales model is right to help you achieve your desired outcomes? What does your sales team need to know about the industry to be a credible and successful advocate for your product and for prospective buyers? What problem do you solve for which kinds of buyers? (note: this is the beginning of your ideal customer profile (ICP) and buyer persona definitions) How do you get a conversation started with those key people? What are the general motions of a sales cycle? What can go wrong and what should you be on the lookout for? Key wins and why they matter A thorough introspection, even if incomplete, makes it easy for future hires to succeed. Don’t expect a new hire in sales (or any domain, really) to come in and solve your puzzles and problems. I see people make this mistake for VP, C-level, roles, so why would you set this precedent and make this mistake for individual contributors or even junior salespeople? This exercise also gives you the opportunity to ensure that from the get-go, your commercial team is operating in a way that is aligned with how you want to run the business — instead of allowing new hires to apply old or inappropriate sales methodologies that will burn leads and shape customer opinions. Your second sales playbook A perfectly crisp sales playbook may feel unattainable because like most startup operations, you’re learning about your ICP and your messaging as you sell. In fact, when I asked Khris Fenton, Director of Sales Enablement and Operations at WealthEngine for his definition of a sales playbook, he laughed and said, “That thing I want to do but simultaneously don’t think I’ll ever complete.” Of course, no one wants a shoddy or incomplete sales playbook. Your go-to-market strategy and how you articulate it to your sales team needs serious and regular fine-tuning (and at some point, a full-time or even team of certified, top-notch mechanics). If you’ve spent time massaging a first version of what I’ve described above, my next advice is three-fold: Get crisp without overengineering Maintain a narrative Begin building sales tools As your understanding of your buyers matures, you should get as specific as you can without building in details that will quickly be forgotten or dated. Keep in mind that the best and most motivated salespeople will be curious for industry and product information in order to sell better, faster. More concrete information on the industry, guidance on messaging, and customer success stories will help future hires ramp faster. Your playbook can evolve to include specific detail on: current trends and common language in the industry (even acronym definitions) defined key differentiators about your product and company pain to probe for required reading and training materials messaging standards and/or sample messaging (email templates, proposal advice, etc.) product and content marketing assets for different sales touchpoints To me, a healthy startup sales playbook has consistent material that is consumed daily and iterated on monthly. I find that a lot of the battlecards, buyer personas, and templates are superfluous exercises to show commercial progress. While you should of course put the energy into giving smart guidance, beware of growth techniques or candidates that sell a magic pill. The other key indicator of a useful sales playbook is its narrative. As your content and sales tools begin to grow, it can be challenging to weave together the core components in a way that is consistent. That’s why I suggest spending significant time on the why of your sales organization. If your sales team has a way to evaluate their own behavior and customer interactions against the organization’s expectations and standard operating procedures, they’ll be better situated to course correct with available resources. Finally, you’ll begin to bake in some sales templates and tools. I’ll talk more about sales ops later on, but my guidance is to work on building your first sales tools quickly and one at a time. It will likely happen organically — a new hire will ask questions like ‘how can I overcome an objection about a missing or inadequate feature’? So, you (or likely your first sales manager) will begin to create assets like this: A taste of our process for overcoming common objections Which can get even further fleshed out into guidance/assets like this: Example of objection handling tree for “We’re going to build our own solution”. (Click to zoom image) Sales hiring pitfalls and must-dos Now that you have a sales playbook with concrete answers to questions sales candidates will inevitably ask, you’re ready to begin hiring. Whether you have help from an HR department or you’re a lone recruiter/sales manager/quota-carrying badass, I encourage you to follow a structured process. This will help you combat the feeling of being ‘sold’ during the interview process and ensure you’re evaluating characteristics of high performers. This is the process I use to hire a full-time Account Executive at ChartMogul: Initial phone screen: the purpose of this 15-30 minute interview is to get on the same page on three things — competencies, culture, and compensation. Hiring manager video interview: this is the deep dive. This is where I’m looking for core competencies. In this interview, I ask questions to assess sales experience, skills, and methodology. Depending on the role, I look for 6-9 characteristics of high performers (some examples on this below). Sales skills evaluation: this is the practical exercise. It can also vary by role (e.g. a writing prompt, a discovery role play, a product demo, or a territory plan), but should be hands-on with some required prep work. I also like to use this exercise to assess self-awareness and coachability. (Optional) Peer interview: this can be useful if you’re competing in a tight talent market and want to give the candidate a different perspective. It’s especially helpful if all other interviews have been conducted by the hiring manager. CEO interview: this depends on the size/structure of the organization. Reference checks: I like to use reference checks to understand how best to set up a prospective employee for success. Some organizations use scorecards and ATS systems like Recruitee to track interviewer feedback and candidate progress, but don’t apply unnecessary structure. Characteristics of high performers Ready to schedule those interviews? Not so fast. Before you talk to the first candidate, earmark the key characteristics you expect candidates to showcase during the application process. In addition to evaluating startup sales experience and product knowledge, candidates should exhibit specific characteristics that will help them win over your buyers and excel long term. This will make sure you hire a great fit candidate — and help you avoid the “shiny object” syndrome where you get excited about a candidate because of a great logo on her resume. The average sales organization salesperson turnover rate is now 34%, with “involuntary turnover up nearly two-thirds of that number.” The same research suggests that one in ten companies experience turnover rates above 55%. The new average time for reps to ramp to productivity has reached 5.3 months. On average, only 67% of reps are making quota, down from 74% in 2012. No matter how you spin it, the data reflects an unfortunate trend. Anthony Chaine And for next-level startup sales hiring, list out those characteristics. Some of those characteristics depend on your sales model and your industry. You can pinpoint those characteristics by reflecting on sales methodology (more on that later). Here’s what I mean: This is a sample list of characteristics we evaluate during our AE hiring process: Business acumen Consistent execution Storytelling Likeability Offers a unique perspective Drives two-way communication Credible as an expert in SaaS Comfortable discussing money Can pressure the customer By itself, it’s a fine checklist. But have you ever had that nagging feeling after conducting an interview? Maybe something bothered you but you just can’t put your finger on it? By defining those competencies and providing evaluation guidelines, you can make sure that you, or your HR team, aren’t checking those boxes simply to get a body in the door. It takes ~50 days on average to hire a sales professional. Don’t rush it. Salespeople are skilled practitioners of selling themselves too. One of the essential pieces you have to get before you’re ready to hire is to define the “why” of your sales organization: The best salespeople want to believe in what they are selling. And even more so, they want to believe in the business they are building by selling your product/service. So if you need to bring on the right salespeople NOW, show them how you’re making a difference why they should drop everything to get on board and be part of your mission. Amy Volas Here is an example of how we evaluate one competency in the interview process. You can ask these questions in a video interview or even to a candidate’s supplied reference: An example of how we define and interview to assess specific competencies when hiring (Click to zoom image) It’s possible, that you find a candidate that you’re ready to hire, but who does not excel at every targeted competency. With a structured interviewing process like this, you can identify areas of potential concern and proactively work them into your onboarding and management strategy. If there is doubt, though, stop and close out the process. There is a lot of competing advice about whether you should hire a sales candidate with nearly identical skills and experience and/or an existing network of contacts. For example, if you sell healthcare wearables to hospices and palliative care organizations in the U.S., should you only hire from that talent pool? In truth, I’ve seen this formula take off and also fail spectacularly. If you have a particularly niche product or require relationships with larger channel partners (like Salesforce, Oracle, Microsoft, Atlassian, etc.) it might make sense to hire from the same pool, but it’s also harder and more expensive. For most SaaS companies, I would recommend hiring salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. The best practice for SaaS companies is to hire salespeople who have worked similar deal sizes and sales cycle lengths. It improves ramp time and helps them stay engaged. Tweet this quote For example, if I hire someone that was closing deals on a 15-30 day sales cycle and my sales cycles are 6-9 months, I run the risk of that person a) not being successful and b) getting bored/being a retention risk. It can be a very expensive and painful mistake to make. Hopefully, by now I’ve debunked the idea that anyone can sell at your startup. Like any critical role, executing a planned hiring process will help you hire and retain top talent. For further resources about how to structure sales compensation plans, I recommend: SAAS Sales Compensation Simplified Startup sales methodology and why you can’t wing it Stick around a group of battle-tested sellers long enough and someone is sure to tell you how their blue sheet helped them nail that RFP process last quarter. Miller Heiman, Sander, SPIN, Challenger, MEDDIC, SNAP. There’s no shortage of options if you’re on the hunt for a sales methodology. Unlike a sales process, which focuses on defining the steps or stages on the path to purchase, a sales methodology offers a framework for how sales reps can approach each of those stages to win the deal Jacco van der Kooij Your sales methodology defines your approach to the buyer-seller relationship and how your team solves prospect problems. A defined sales methodology is the foundation of your sales organization — and should come before your sales model or process. For startups, applying this much structure may seem counterintuitive or even like a waste of critical resources. Perhaps this is because, as Kooij goes on: Most of the most popular sales methodologies are trademarked and were created by sales consultants and trainers, who wanted to define their own signature approach. Unfortunately, this means many of the methodologies you’ve heard of are really products being sold to you. Here’s why it’s so important though. Your startup sales methodology grounds your decision-making process. In sales (and startups for that matter), every day, every call is filled with countless decisions. How should I frame this? What should I highlight in my demo? How will the customer respond? What are the customers priorities and how can I communicate effectively? When is the right time to follow up and what should I say? Process can help you answer some of these questions but methodology gets to the heart of the matter. A well-defined sales methodology brings cohesion to the sales process and arms your sales team with a compass for what to do when a new decision or question arises to which there is not an obvious answer. If done well, it can help eliminate that paralyzing feeling of what should I do next or what if I do or say the wrong thing. Which sales methodology is right for me? It depends. To start, have a serious think about what the selling and buying experience was like for your first few customers. You want to employ a refined methodology that is most aligned with your prospective customers. When and how were they aware of their problem/opportunity? What steps did they take to learn about and evaluate solutions? How do they want to engage with your team? What are their expectations about the sales process? From there, do some research. And be sure to put that research into context. Know that the Challenger Sales model, for example, is about building consensus with various stakeholders in a large enterprise sale, so if you are hunting mice, your methodology shouldn’t involve educating the customer about their problem. Five ways to build a $100m SaaS business by chasing different “animals.” Source: Christoph Janz Don’t feel like you have to latch onto every piece of advice within a methodology, but as your decision will be the foundation for your sales organization, it’s important not to waver or to introduce frequent changes. Coach regularly Too many startups expect salespeople to be immediate and consistent star performers. One constant, regardless of what industry your startup is in, though, is change. As your sales playbook, markets, and products evolve, you should expect to invest regularly in the development of your sales reps. Andy Farquharson Document and exercise your methodology. One way to make sure your sales methodology runs deep is to conduct regular role-playing and coaching exercises. Our team chooses a tough customer call each week and workshops key inflection points. It’s a standing commitment but well worth the investment — because we know practice makes sales practitioners better. The sales ops balance By now I’ve asked you to document an entire playbook, your sales hiring practices, and a sales framework and we haven’t even introduced process or technology. Who manages all of this? There’s a reason startup sales and revenue ops are so prevalent in most B2B sales organizations — it’s a lot of moving parts. Your sales team is responsible for bringing revenue into your company. Your sales operations team helps them do it faster, better, and with a lot less hassle. It’s a crucial part of your sales organization. Steli Efti Sales ops can be a catch-all for: Sales stack management — CRM and sales tool administration Sales strategy and process improvement Sales reporting and forecasting Sales training and curriculum development Unfortunately, sales ops is all too often an excuse for management to ask questions and validate hypotheses about sales and marketing performance. “Can you show me a report of converted leads from the SaaStock conference?” Reporting and quantitative analysis are necessary for team and individual performance improvement. Beware, though, of investing your limited resources in CRM dashboard perfection when your processes are evolving. Really sales ops is responsible for managing how your organization systematically improves how the buyer-seller relationship works. One way to implement a regular rhythm of sales improvement is with a defined change management process. If you’re triaging Slack messages and sticky notes from your team with requests like “can we add a new field to track buyer persona?” start by putting all of those requests and suggestions in one place. Here’s what I mean: We use a Kanban board to track all requests for changes to our sales process You can use a board like this to identify and prioritize common challenges in your sales organization. You can also use it to iterate on your training materials. As your sales organization matures in tools and processes, you can feed “completed” items on your change management board back into your sales playbook so that new hires have all of the details on how leads are assigned. It’s okay if non-priority items sit — as long as you’re growing and improving the sales organization in a sustainable way that makes sense for the business. You’d be surprised how many emergent requests do not impact you or your team’s ability to sell because like most other areas of SaaS, there is no silver bullet CRM for sales productivity and higher win rates. A solid foundation for startup sales success No startup can survive without selling. But that doesn’t mean the early-stage scrappy founder-does-it-all-type of selling will work as your company matures. On the contrary, one of your essential focus areas as a founder is to lay down the foundation for scaling your commercial team. In this post, I tried to collect the essential elements of such a foundation: Building a sales playbook that collects essential processes and tools Successful startup sales hiring Picking a sales methodology that supports your organization Getting the right balance in sales ops But once you’ve developed (and documented) your initial thinking about those, it doesn’t mean your job is done. Just like you constantly iterate on your product, so you should look for opportunities to improve your sales operations. A big part of the inspiration for those improvements will come just as your team goes out and talks to customers. But it is essential that you develop a process for recording, analyzing, and acting on the insight you get from selling. My final piece of advice is — don’t be scared. I know selling sounds intimidating, especially to those who come from a technical background, but just like with building a product and/or a company, you tend to develop an appetite for it once you start doing it. </sys

The 10 subscriptions keeping the lights on at ChartMogul. DigitalOcean Provides the servers that run the ChartMogul App — https://www.digitalocean.com/ Docker Powers our elastic scaling capability – if many users decide to import their data into ChartMogul at the same time Docker with Kubernetes automatically spin-up (and spin-down) DigitalOcean droplets as demand increases — https://www.docker.com/ New Relic So our devops and engineers can tune performance, investigate errors, and keep things running smoothly — http://newrelic.com/ SendGrid “Congratulations, you have a new customer” these email notifications all get sent via SendGrid — https://sendgrid.com/ MailChimp We send out our monthly newsletter using MailChimp. Missed the last one? ChartMogul February Newsletter — http://mailchimp.com/ Zendesk Powers our help center, live chat (Zopim) and general customer service ticketing — https://www.zendesk.com/ Intercom Powers our trial onboarding/drip emails and in-app message system — https://www.intercom.io/ GitHub Code repo — https://github.com/ Media Temple Hosts our ChartMogul.com marketing site — http://mediatemple.net/ CloudFlare CDN for our ChartMogul.com site, so it loads fast regardless of where you are — https://www.cloudflare.com ChartMogul We do of course eat our own dog food and measure our own revenue using ChartMogul🙂

[INST] The 10 subscriptions keeping the lights on at ChartMogul [/INST]

DigitalOcean Provides the servers that run the ChartMogul App — https://www.digitalocean.com/ Docker Powers our elastic scaling capability – if many users decide to import their data into ChartMogul at the same time Docker with Kubernetes automatically spin-up (and spin-down) DigitalOcean droplets as demand increases — https://www.docker.com/ New Relic So our devops and engineers can tune performance, investigate errors, and keep things running smoothly — http://newrelic.com/ SendGrid “Congratulations, you have a new customer” these email notifications all get sent via SendGrid — https://sendgrid.com/ MailChimp We send out our monthly newsletter using MailChimp. Missed the last one? ChartMogul February Newsletter — http://mailchimp.com/ Zendesk Powers our help center, live chat (Zopim) and general customer service ticketing — https://www.zendesk.com/ Intercom Powers our trial onboarding/drip emails and in-app message system — https://www.intercom.io/ GitHub Code repo — https://github.com/ Media Temple Hosts our ChartMogul.com marketing site — http://mediatemple.net/ CloudFlare CDN for our ChartMogul.com site, so it loads fast regardless of where you are — https://www.cloudflare.com ChartMogul We do of course eat our own dog food and measure our own revenue using ChartMogul🙂

<sys> [INST] The 10 subscriptions keeping the lights on at ChartMogul [/INST] DigitalOcean Provides the servers that run the ChartMogul App — https://www.digitalocean.com/ Docker Powers our elastic scaling capability – if many users decide to import their data into ChartMogul at the same time Docker with Kubernetes automatically spin-up (and spin-down) DigitalOcean droplets as demand increases — https://www.docker.com/ New Relic So our devops and engineers can tune performance, investigate errors, and keep things running smoothly — http://newrelic.com/ SendGrid “Congratulations, you have a new customer” these email notifications all get sent via SendGrid — https://sendgrid.com/ MailChimp We send out our monthly newsletter using MailChimp. Missed the last one? ChartMogul February Newsletter — http://mailchimp.com/ Zendesk Powers our help center, live chat (Zopim) and general customer service ticketing — https://www.zendesk.com/ Intercom Powers our trial onboarding/drip emails and in-app message system — https://www.intercom.io/ GitHub Code repo — https://github.com/ Media Temple Hosts our ChartMogul.com marketing site — http://mediatemple.net/ CloudFlare CDN for our ChartMogul.com site, so it loads fast regardless of where you are — https://www.cloudflare.com ChartMogul We do of course eat our own dog food and measure our own revenue using ChartMogul🙂 </sys

A roundup of SaaStock 2016. 09:30 – Thing are warming up The ChartMogul team is ready to go at the SaaStock venue. Or at least, once we’ve all finished our coffee we will be. Here’s an overview of the day’s sessions on the Operator Stage: 10:00 – Des Traynor takes the stage Des is speaking this morning about Product-first companies. I’ll hand over to Annie, for a quick summary of the key points… 10:30 – My take-aways from Des Traynor’s talk Des kicked things off at SaaStock with a great talk about produce-first companies. He started way back at the dawn of business software and followed the evolution into the cloud. From there he made great key points about how software has shifted, molding to the user — and how software companies are shifting, molding to their product. Here are the three innovations of software that describe the SaaS we know today: Move to the cloud. “No installs necessary!” and “Work from anywhere!” were the common sales points. Design with the user in mind. Nowadays, great UX is a no-brainer, but ten years ago it was revolutionary. The product distributes itself. The latest and most successful SaaS products spawn users on their own, through innate virality in the product (e.g.- Slack users invite friends to chat) and sometimes with a little marketing help (e.g.- Dropbox offers free storage when you invite new users). Many SaaS companies today acquire their first few hundred or thousand users without a dedicated sales or marketing team. Thanks to the extreme connectedness of the web in 2016 and the new sales standard of Try Before You Buy, users can flock to SaaS products much more easily. Pietro Bezza, Managing Partner of Connect Ventures Des expanded on point #3. The reality is that with product-focused companies, the product solves many more challenges for the business beyond the primary function of satisfying a customer’s need. It solves distribution, marketing, and sales. It guides the growth trajectory of the business. This reminded me of what Pietro Bezza (of Connect Ventures) said in his recent conversation with Ed about investing in early stage start-ups and mission-driven founders. What’s interesting is that innovation in SaaS isn’t equally distributed across verticals. Here’s how Des broke down some business areas from most evolved to least: Product management tools: The most evolved, completely in the cloud, with excellent UX and viral distribution. Invoices and expenses: In the cloud, great UX, but limited self-distribution. Wikis & intranets HRIS systems Payroll systems: So far, just in the cloud. Typically still very difficult (aka unpleasant) to use. What’s next? Des pointed out how much more growth is in store for SaaS. B2B spend on on-premise software is on the decline, while spend on SaaS is on the rise. He said that by 2020, on-premise could be obsolete. A little bit about SaaS metrics: Of course, my ears perked up when Des brought up metrics. He said he’s tired of seeing company’s charts of pure MRR growth. “This means nothing without churn,” he said, “for all you know that revenue is dropping out of the business as well.” Instead he suggested looking at SaaS Quick Ratio, which compares MRR with churn so you can get an accurate picture of how efficiently you’re growing. A few months ago I wrote a piece explaining SaaS Quick Ratio and evaluating it based on thoughts from the metric creator, Mamoon Hamid, plus Tomasz Tunguz and InsightSquared. What do you learn from the metric? What’s the benchmark? Is it useful? Read more about SaaS Quick Ratio here. Okay, I’m off to the next session! Hope you enjoyed this recap. Tweet and let us know what you think as the day goes on. This is our first “live” blog, and it would be great to hear your feedback! – Annie 12:20 – Genius or luck? What it takes to build a successful SMB SaaS business Fireside chat with Alex Farrara from Bessemer Venture Partners and Martin Henk, Co-Founder and Chief Product Officer at Pipedrive I dropped into this session a bit late, but am glad I made it because it was full of cool insight from Martin Henk, who started his Sales CRM product in the small European country of Estonia and eventually moved over to the States. Here’s what I captured: Hiring in Europe vs. hiring in the States Earlier today Nikos Moraitakis said it’s easier to find great talent in the United States. He started Workable in Greece and eventually moved the headquarters to Boston. Henk agreed that there’s a much smaller talent pool in his native Estonia, so at times they do need to go abroad for hires. But on the other hand, Pipedrive is the best employer in Estonia. When you have a status like that, you get lots of attention and media, you have public recognition. “We stand out, so its easier for us to find great people [in Estonia].” When did it make sense to move to the US? Pipedrive was forced to because they couldn’t get the business to grow beyond 10 new customers/month. At that point they decided to go to Silicon Valley and try the angel investor path. “We opened an office there to breath the air and drink the koolaid.” Pipedrive grew the California office to 10-15 people, then shut it down to move to NYC. Was moving to NYC the right decision? An NYC office was the right move for the Pipedrive team. It came down to coordination and collaboration between global offices. California was a ten hour time difference with Estonia, so there was no overlap in working hours between the two teams. After a round of funding, in the face of hiring more and expanding, it seemed unwise to continue to grow two offices that had zero overlap. At least in NYC, there are a few hours where both offices can have meetings. No late night calls for Estonian team members, not 6am calls for the guys in California, nursing their coffees and trying to wake up. Cultural tension: Geographic location of team functions and decision-makers When companies expand from Europe to US, there can be some cultural tension between teams. Some founders believe they can find the best executive or sales/marketing talent in the States. But you risk everyone back in the original country feeling that key decisions are made elsewhere. They feel they’re a low cost engineering and product route for the company. Henk agrees that it’s tricky to balance. “We try to manage it as best we can” through transparency and constant iteration. What team functions should stay in the States? There are key marketing roles that don’t exist in Estonia and will stay in NYC. If you really want to do American sales, you need local people and native speakers making calls. Pipedrive also runs customer support from NYC. Last but not least, Finance. “It’s almost impossible to find Finance people in Estonia who would understand US tax policies.” Finding Product-Market Fit Earlier today Peter Reinhardt, CEO of Segment, said only 1 in 5 founders find PMF. For Pipedrive to find it, they had to removed roadblocks they themselves put in place. They had a product that sales people loved, but it wouldn’t grow. It was too difficult to sign up. So they changed that initial experience — how website worked and a few other things. The result? 3x more sign-ups over night From 10 to 100 new customers/month in the course of one quarter. Without changing the product but instead the user initial experience, they now get about 3000 new companies every month. What’s the most important thing Pipedrive looks at to measure the company? Net Promoter Score. Henk likes it because it tells the story of how the entire company is doing. It’s about entire ecosystem: speed, reliability, support, product features, etc. And you can learn more by splitting segment of users. “Small companies love, us but large companies aren’t as happy. So that tells us that we can cater do these bigger customers differently.” One unlucky moment in the Pipedrive story Henk told a story about when the company growth stalled. “Money was running out. The product was ready. We were getting 10 new customers every month but wouldn’t grow faster.” They applied to numerous accelerators and got rejected. “It was a negative pattern, and it felt like we were doing something wrong, that maybe we should shut it down.” But then they embraced the idea to “decide not to fail.” They sent one of the co-founders to Silicon Valley, he knocked on hundreds of doors. They could not raise money when they needed it most. Then back in Estonia, they worked all winter, hit 1000 customers and profitability. At that point — raising funds became easier. They were able to raise money from investors over the phone, whom they’d never even met in person. “It seemed once you didn’t need the money, it was easier to get.” Phew! Lunch time. We’ll check back in soon. – Annie 14:00 – Lunch update Ed here. I managed to implement my well-tested strategy of timing lunch perfectly, just before the queues start to build up. There’s a really nice festival vibe to the lunch area, with a DJ adding some background beats. I went for the bagel — and didn’t regret it. The chilly Dublin wind is coming into play, but the networking is as fierce as you’d expect from the SaaS crowd… 15:00 – The data-driven Marketing playbook Great panel with the following participants: Elizabeth Yin, Partner @ 500 Startups Andrew Davies, CMO & Co-Founder @ idio Kieran Flanagan, VP Marketing @ Hubspot Nicola Anderson, VP Marketing @ GoCardless KPIs in Marketing Have to be aligned to business objectives Have to give you insight into business performance Keeping KPIs lean – tracking too much – paralysis Must be constantly re-evaluated, as the product evolves It’s easy to get side-tracked by vanity metrics – they can be a great excuse to throw a party. What KPIs does your Marketing team track? Nicola @ GoCardless: Signups Qualified leads MRR Churn LTV Signups vs. Qualified leads There can be conflict when it comes to choosing to focus on small startups vs. medium / large sized businesses, and the KPIs required to measure those. Signups are more relevant to the “long tail” customers, whereas qualified leads are more about sales opportunities, bigger accounts etc. It’s important to have some conflict over this — it shows that people are bought into it. Experimentation in Marketing How do you include and nurture experimentation in your Marketing team? Hubspot picks experiments applicable to three categories: Acquisition Monetization Retention How do you prioritize the experiments you want to run? Prioritization Impact Ease (PIE) Everyone agreed that it’s essential to tie the potential of an experiment to a real number — a real change in KPIs. if you have this, you can say “I predict that we can increase X by Y amount.” Hubspot has built an “elastic-type” Marketing team, each person bringing different skill sets. This multi-functional team structure means you can ALL focus on one big problem as a team, before moving to the next big thing. More to come this afternoon! Ed 15:20 – 5 key moves that got a $Billion dollar exit A chat between Siraj Khaliq (Co-founder, The Climate Corporation and investor at Atomica) and Tom Lyons, the Business Editor of Sunday Business Post The following is all paraphrased from Siraj Khaliq and should not be considered direct quotes. Move #1. Pivot. (Twice.) We pivoted twice. People around us tried to discourage it, but good founders don’t listen to naysayers. They just execute. We did stay aware of adjacent opportunities, which helped us determine our pivots. The first pivot was out of necessity, and it boils down to the fact that our CAC was too high and LTV too low. We were selling weather insurance to businesses. But educating on weather risk and convincing business owners to buy insurance didn’t work. So we pivoted to agriculture specifically. The second pivot was not out of necessity. Working with farmers, we simply saw the opportunity to focus on inputs, not just outputs. How much water, fertilizer, etc.; what to invest in their farm to determine a certain outcome. This evolved into a farm management platform that spurred the precision agriculture movement. Our board was split on whether to do it. They didn’t want us to lose focus, but it worked. And this second pivot of the business was key to us getting acquired for a billion dollars. It wouldn’t have happened if we were just an insurance business like before. Move #2. A big outcome requires a big problem. If you want to have a big result, you have to start with a big idea. We set out to solve the problem of world hunger and work with agriculture and technology to solve it. Now as an investor, I don’t back people who tackle something too small. Move #3. Fire fast. We let go of staff who didn’t work out EARLY, even senior people. You’ve probably heard the saying, “A people hire A. B people hire C.” But you’re gonna screw it up at some point. And there are huge costs of a mishire in confusion and in morale. Trust your gut about hiring someone, even if people around you whom you respect swear you should hire a certain person. Gut beats hearsay every time. Also, great people don’t come cheap. Paying for headhunter is worth it. Move #4. We became a channel business. Our first approach was direct sale, and we couldn’t sell because there was a trust issue. The average American farmer couldn’t relate to the guy we had on our sales team. Eventually we hired local sellers. Keep open mind about sales, and move to a channel business if it fits. Move #5. Choose investors for strategy, not money. In our Series B, we didn’t choose even the third best term sheet we were offered. We chose not the best economically — but instead went with the investor who had the connections politically, and the connections with customers. This helped us out at that particular stage. It was the same at Series C. We went with Founders Fund. They are very long-term thinking, so they understood and supported our second pivot when our board was skeptical. So strategically pick your investor, don’t just go with the biggest amount of money. Think carefully because they become co-owners. Do yourself a favor and don’t use a bank. Maybe in a Series C it makes sense, but early on, it pays off to spend time with investors and deepen those relationships. Bonus question: Was the sale, your billion dollar exit, planned or reactive? We were mission-driven. We weren’t about biggest outcome, but rather about how we could best help farmers. We felt that feeding the world’s population was so important. It was clear we couldn’t do it successfully without another round or two, so there was still a lot of risk left in the business. We ended up selling to the Google of the AgTech space who were in a great position to carry on our mission. So the sale was not out of necessity but pragmatism. They were the right partner. Maybe in 2015 in that fundraising climate, we could have raised $500M and executed, but that’s how it goes. On to the next! – Annie 17:30 – SaaS VC landscape: Raising Capital in Europe Vision > metrics, great design, and the advantages of the US market… The following is a collage of comments from the panel members: Mike Chalfen – Co-founder and Partner at Mosaic Ventures Gil Dibner – Venture Syndicate Lead, Angelist Syndicate Sitar Teli – Partner, Connect Ventures Conor Stanley – Founder, Tribal.vc Jos White – Notion Capital The VC landscape panel. Pardon my shoddy iPhone photo! What does it take to raise money at an early stage? It’s key to understand UX design. At Connect Ventures, we look to see if they are solving a problem and if there’s a potential for PMF. (Sitar) In general, seed capital for SaaS has been difficult and underfunded. It’s possible that’s why we don’t see as many large SaaS companies here. (Sitar) As for some generic advice for raising seed, assume that you aren’t going to generate revenue on your seed round. Instead aim to raise a lot of money so you can build for 18 months. Yes, you’ll probably generate revenue, but you don’t want to set that expectation and possibly panic. (Sitar) Series A is having an impact on seed. The bar has been raised significantly for Series A. So now we rarely companies going straight from seed to Series A; there are a lot of intermediate rounds. So we’re interested in large seed rounds so our companies can get more traction. (Conor) In Series A, revenue is a general reference point, not a deciding factor. (Jos) The pace of growth matters more than the number. (Mike) There’s a formulaic approach to SaaS in Europe that doesn’t exist in the US. SaaS is a tool, not the answer. (Gil) SaaS has built a culture of metrics and benchmarks, but none of that is true SaaS. It is not grounds for a funding event. (Gil) The SaaS toolkit is useful for building a large company, but not enough for getting to the big payout for investors. (Gil) Things are getting financed that shouldn’t get financed — which is changing entrepreneurs’ perspective on what their metrics need to be. (Gil) Exploring the difference of SaaS in the US and SaaS in Europe: The US is ahead on SaaS adoption curve, all the way from from mid-market to Fortune 1000. (Conor) European founders have to make the transition to SaaS. (Conor) Cause for adoption is a barrier. (Mike) In the US, you can raise more money. American VCs take top-down approach (they look at growth), while Europe is more cautious (metrics and downside protection). (Jos) The US is a huge market with the same language and currency. (Jos) The best founders don’t think of it as, “I’m a European founder.” It’s just: “I want to build a huge global company.” Don’t think in geographic silos. Play a global game from the moment you wake up in the morning. Go where the market is. (Gil) Unfortunately, leanness erodes as a company grows. As you have the money, you spend it. And then you built a fat business and the next round you raise needs to be even bigger. Yes, I think you need to raise money to scale, but I don’t think you need to raise as much as some companies do today. (Sitar) It’s cheaper to start a company today. That means it’s cheaper for everyone and anyone to start a company today. Technology is what differentiates from competition. Execution really matters, but you can hire for that. Technology is the only weapon. (Gil) Actually I’d say that design and UX are fundamental. It’s not something you can copy; it’s part of the founders view of life. If it’s not part of the founder’s view of life, then it’s not part of the company’s view of life. Design and UX can be as differentiating as technology. Every company that scales becomes a tech company, otherwise they will break down. (Sitar) I’d like to see a founder better articulate their vision — crisply, in a way that’s easy to grasp. It sounds simple, but actually it’s remarkable how few can do that in a way that is clear and compelling. (Conor) In meetings to raise, founders focus too much on KPIs and metrics. It’s not exciting. You can see the growth of the company, but not how it will impact or change the market. Big impactful things lead to the biggest returns. If you pitch metrics and not vision, it’s hard to get excited. What happens after SaaS? Now SaaS seems passive. I think we’ll see increasingly software infused with data. It will be dialectical, infused with data and some machine learning so it gets better every time. Then we have a future of intelligent software. (Jos) SaaS is such a dominant model and efficient delivery system that it’s hard for me to see beyond SaaS. APIs are interesting. If you believe that software is eating the world, then developers will eat the business users. (Gil) – Annie 18:20 – Off to the after party! That’s a wrap! We had a great time manning our ChartMogul booth in Software City, as well as attending as many informative sessions as we humanly could. Many thanks for everyone who stopped by to say hi, who taught us things from the stage, and of course who helped make this inaugural event possible! Hats off to SaaStock. Now… time for a beer. Sláinte!

[INST] A roundup of SaaStock 2016 [/INST]

09:30 – Thing are warming up The ChartMogul team is ready to go at the SaaStock venue. Or at least, once we’ve all finished our coffee we will be. Here’s an overview of the day’s sessions on the Operator Stage: 10:00 – Des Traynor takes the stage Des is speaking this morning about Product-first companies. I’ll hand over to Annie, for a quick summary of the key points… 10:30 – My take-aways from Des Traynor’s talk Des kicked things off at SaaStock with a great talk about produce-first companies. He started way back at the dawn of business software and followed the evolution into the cloud. From there he made great key points about how software has shifted, molding to the user — and how software companies are shifting, molding to their product. Here are the three innovations of software that describe the SaaS we know today: Move to the cloud. “No installs necessary!” and “Work from anywhere!” were the common sales points. Design with the user in mind. Nowadays, great UX is a no-brainer, but ten years ago it was revolutionary. The product distributes itself. The latest and most successful SaaS products spawn users on their own, through innate virality in the product (e.g.- Slack users invite friends to chat) and sometimes with a little marketing help (e.g.- Dropbox offers free storage when you invite new users). Many SaaS companies today acquire their first few hundred or thousand users without a dedicated sales or marketing team. Thanks to the extreme connectedness of the web in 2016 and the new sales standard of Try Before You Buy, users can flock to SaaS products much more easily. Pietro Bezza, Managing Partner of Connect Ventures Des expanded on point #3. The reality is that with product-focused companies, the product solves many more challenges for the business beyond the primary function of satisfying a customer’s need. It solves distribution, marketing, and sales. It guides the growth trajectory of the business. This reminded me of what Pietro Bezza (of Connect Ventures) said in his recent conversation with Ed about investing in early stage start-ups and mission-driven founders. What’s interesting is that innovation in SaaS isn’t equally distributed across verticals. Here’s how Des broke down some business areas from most evolved to least: Product management tools: The most evolved, completely in the cloud, with excellent UX and viral distribution. Invoices and expenses: In the cloud, great UX, but limited self-distribution. Wikis & intranets HRIS systems Payroll systems: So far, just in the cloud. Typically still very difficult (aka unpleasant) to use. What’s next? Des pointed out how much more growth is in store for SaaS. B2B spend on on-premise software is on the decline, while spend on SaaS is on the rise. He said that by 2020, on-premise could be obsolete. A little bit about SaaS metrics: Of course, my ears perked up when Des brought up metrics. He said he’s tired of seeing company’s charts of pure MRR growth. “This means nothing without churn,” he said, “for all you know that revenue is dropping out of the business as well.” Instead he suggested looking at SaaS Quick Ratio, which compares MRR with churn so you can get an accurate picture of how efficiently you’re growing. A few months ago I wrote a piece explaining SaaS Quick Ratio and evaluating it based on thoughts from the metric creator, Mamoon Hamid, plus Tomasz Tunguz and InsightSquared. What do you learn from the metric? What’s the benchmark? Is it useful? Read more about SaaS Quick Ratio here. Okay, I’m off to the next session! Hope you enjoyed this recap. Tweet and let us know what you think as the day goes on. This is our first “live” blog, and it would be great to hear your feedback! – Annie 12:20 – Genius or luck? What it takes to build a successful SMB SaaS business Fireside chat with Alex Farrara from Bessemer Venture Partners and Martin Henk, Co-Founder and Chief Product Officer at Pipedrive I dropped into this session a bit late, but am glad I made it because it was full of cool insight from Martin Henk, who started his Sales CRM product in the small European country of Estonia and eventually moved over to the States. Here’s what I captured: Hiring in Europe vs. hiring in the States Earlier today Nikos Moraitakis said it’s easier to find great talent in the United States. He started Workable in Greece and eventually moved the headquarters to Boston. Henk agreed that there’s a much smaller talent pool in his native Estonia, so at times they do need to go abroad for hires. But on the other hand, Pipedrive is the best employer in Estonia. When you have a status like that, you get lots of attention and media, you have public recognition. “We stand out, so its easier for us to find great people [in Estonia].” When did it make sense to move to the US? Pipedrive was forced to because they couldn’t get the business to grow beyond 10 new customers/month. At that point they decided to go to Silicon Valley and try the angel investor path. “We opened an office there to breath the air and drink the koolaid.” Pipedrive grew the California office to 10-15 people, then shut it down to move to NYC. Was moving to NYC the right decision? An NYC office was the right move for the Pipedrive team. It came down to coordination and collaboration between global offices. California was a ten hour time difference with Estonia, so there was no overlap in working hours between the two teams. After a round of funding, in the face of hiring more and expanding, it seemed unwise to continue to grow two offices that had zero overlap. At least in NYC, there are a few hours where both offices can have meetings. No late night calls for Estonian team members, not 6am calls for the guys in California, nursing their coffees and trying to wake up. Cultural tension: Geographic location of team functions and decision-makers When companies expand from Europe to US, there can be some cultural tension between teams. Some founders believe they can find the best executive or sales/marketing talent in the States. But you risk everyone back in the original country feeling that key decisions are made elsewhere. They feel they’re a low cost engineering and product route for the company. Henk agrees that it’s tricky to balance. “We try to manage it as best we can” through transparency and constant iteration. What team functions should stay in the States? There are key marketing roles that don’t exist in Estonia and will stay in NYC. If you really want to do American sales, you need local people and native speakers making calls. Pipedrive also runs customer support from NYC. Last but not least, Finance. “It’s almost impossible to find Finance people in Estonia who would understand US tax policies.” Finding Product-Market Fit Earlier today Peter Reinhardt, CEO of Segment, said only 1 in 5 founders find PMF. For Pipedrive to find it, they had to removed roadblocks they themselves put in place. They had a product that sales people loved, but it wouldn’t grow. It was too difficult to sign up. So they changed that initial experience — how website worked and a few other things. The result? 3x more sign-ups over night From 10 to 100 new customers/month in the course of one quarter. Without changing the product but instead the user initial experience, they now get about 3000 new companies every month. What’s the most important thing Pipedrive looks at to measure the company? Net Promoter Score. Henk likes it because it tells the story of how the entire company is doing. It’s about entire ecosystem: speed, reliability, support, product features, etc. And you can learn more by splitting segment of users. “Small companies love, us but large companies aren’t as happy. So that tells us that we can cater do these bigger customers differently.” One unlucky moment in the Pipedrive story Henk told a story about when the company growth stalled. “Money was running out. The product was ready. We were getting 10 new customers every month but wouldn’t grow faster.” They applied to numerous accelerators and got rejected. “It was a negative pattern, and it felt like we were doing something wrong, that maybe we should shut it down.” But then they embraced the idea to “decide not to fail.” They sent one of the co-founders to Silicon Valley, he knocked on hundreds of doors. They could not raise money when they needed it most. Then back in Estonia, they worked all winter, hit 1000 customers and profitability. At that point — raising funds became easier. They were able to raise money from investors over the phone, whom they’d never even met in person. “It seemed once you didn’t need the money, it was easier to get.” Phew! Lunch time. We’ll check back in soon. – Annie 14:00 – Lunch update Ed here. I managed to implement my well-tested strategy of timing lunch perfectly, just before the queues start to build up. There’s a really nice festival vibe to the lunch area, with a DJ adding some background beats. I went for the bagel — and didn’t regret it. The chilly Dublin wind is coming into play, but the networking is as fierce as you’d expect from the SaaS crowd… 15:00 – The data-driven Marketing playbook Great panel with the following participants: Elizabeth Yin, Partner @ 500 Startups Andrew Davies, CMO & Co-Founder @ idio Kieran Flanagan, VP Marketing @ Hubspot Nicola Anderson, VP Marketing @ GoCardless KPIs in Marketing Have to be aligned to business objectives Have to give you insight into business performance Keeping KPIs lean – tracking too much – paralysis Must be constantly re-evaluated, as the product evolves It’s easy to get side-tracked by vanity metrics – they can be a great excuse to throw a party. What KPIs does your Marketing team track? Nicola @ GoCardless: Signups Qualified leads MRR Churn LTV Signups vs. Qualified leads There can be conflict when it comes to choosing to focus on small startups vs. medium / large sized businesses, and the KPIs required to measure those. Signups are more relevant to the “long tail” customers, whereas qualified leads are more about sales opportunities, bigger accounts etc. It’s important to have some conflict over this — it shows that people are bought into it. Experimentation in Marketing How do you include and nurture experimentation in your Marketing team? Hubspot picks experiments applicable to three categories: Acquisition Monetization Retention How do you prioritize the experiments you want to run? Prioritization Impact Ease (PIE) Everyone agreed that it’s essential to tie the potential of an experiment to a real number — a real change in KPIs. if you have this, you can say “I predict that we can increase X by Y amount.” Hubspot has built an “elastic-type” Marketing team, each person bringing different skill sets. This multi-functional team structure means you can ALL focus on one big problem as a team, before moving to the next big thing. More to come this afternoon! Ed 15:20 – 5 key moves that got a $Billion dollar exit A chat between Siraj Khaliq (Co-founder, The Climate Corporation and investor at Atomica) and Tom Lyons, the Business Editor of Sunday Business Post The following is all paraphrased from Siraj Khaliq and should not be considered direct quotes. Move #1. Pivot. (Twice.) We pivoted twice. People around us tried to discourage it, but good founders don’t listen to naysayers. They just execute. We did stay aware of adjacent opportunities, which helped us determine our pivots. The first pivot was out of necessity, and it boils down to the fact that our CAC was too high and LTV too low. We were selling weather insurance to businesses. But educating on weather risk and convincing business owners to buy insurance didn’t work. So we pivoted to agriculture specifically. The second pivot was not out of necessity. Working with farmers, we simply saw the opportunity to focus on inputs, not just outputs. How much water, fertilizer, etc.; what to invest in their farm to determine a certain outcome. This evolved into a farm management platform that spurred the precision agriculture movement. Our board was split on whether to do it. They didn’t want us to lose focus, but it worked. And this second pivot of the business was key to us getting acquired for a billion dollars. It wouldn’t have happened if we were just an insurance business like before. Move #2. A big outcome requires a big problem. If you want to have a big result, you have to start with a big idea. We set out to solve the problem of world hunger and work with agriculture and technology to solve it. Now as an investor, I don’t back people who tackle something too small. Move #3. Fire fast. We let go of staff who didn’t work out EARLY, even senior people. You’ve probably heard the saying, “A people hire A. B people hire C.” But you’re gonna screw it up at some point. And there are huge costs of a mishire in confusion and in morale. Trust your gut about hiring someone, even if people around you whom you respect swear you should hire a certain person. Gut beats hearsay every time. Also, great people don’t come cheap. Paying for headhunter is worth it. Move #4. We became a channel business. Our first approach was direct sale, and we couldn’t sell because there was a trust issue. The average American farmer couldn’t relate to the guy we had on our sales team. Eventually we hired local sellers. Keep open mind about sales, and move to a channel business if it fits. Move #5. Choose investors for strategy, not money. In our Series B, we didn’t choose even the third best term sheet we were offered. We chose not the best economically — but instead went with the investor who had the connections politically, and the connections with customers. This helped us out at that particular stage. It was the same at Series C. We went with Founders Fund. They are very long-term thinking, so they understood and supported our second pivot when our board was skeptical. So strategically pick your investor, don’t just go with the biggest amount of money. Think carefully because they become co-owners. Do yourself a favor and don’t use a bank. Maybe in a Series C it makes sense, but early on, it pays off to spend time with investors and deepen those relationships. Bonus question: Was the sale, your billion dollar exit, planned or reactive? We were mission-driven. We weren’t about biggest outcome, but rather about how we could best help farmers. We felt that feeding the world’s population was so important. It was clear we couldn’t do it successfully without another round or two, so there was still a lot of risk left in the business. We ended up selling to the Google of the AgTech space who were in a great position to carry on our mission. So the sale was not out of necessity but pragmatism. They were the right partner. Maybe in 2015 in that fundraising climate, we could have raised $500M and executed, but that’s how it goes. On to the next! – Annie 17:30 – SaaS VC landscape: Raising Capital in Europe Vision > metrics, great design, and the advantages of the US market… The following is a collage of comments from the panel members: Mike Chalfen – Co-founder and Partner at Mosaic Ventures Gil Dibner – Venture Syndicate Lead, Angelist Syndicate Sitar Teli – Partner, Connect Ventures Conor Stanley – Founder, Tribal.vc Jos White – Notion Capital The VC landscape panel. Pardon my shoddy iPhone photo! What does it take to raise money at an early stage? It’s key to understand UX design. At Connect Ventures, we look to see if they are solving a problem and if there’s a potential for PMF. (Sitar) In general, seed capital for SaaS has been difficult and underfunded. It’s possible that’s why we don’t see as many large SaaS companies here. (Sitar) As for some generic advice for raising seed, assume that you aren’t going to generate revenue on your seed round. Instead aim to raise a lot of money so you can build for 18 months. Yes, you’ll probably generate revenue, but you don’t want to set that expectation and possibly panic. (Sitar) Series A is having an impact on seed. The bar has been raised significantly for Series A. So now we rarely companies going straight from seed to Series A; there are a lot of intermediate rounds. So we’re interested in large seed rounds so our companies can get more traction. (Conor) In Series A, revenue is a general reference point, not a deciding factor. (Jos) The pace of growth matters more than the number. (Mike) There’s a formulaic approach to SaaS in Europe that doesn’t exist in the US. SaaS is a tool, not the answer. (Gil) SaaS has built a culture of metrics and benchmarks, but none of that is true SaaS. It is not grounds for a funding event. (Gil) The SaaS toolkit is useful for building a large company, but not enough for getting to the big payout for investors. (Gil) Things are getting financed that shouldn’t get financed — which is changing entrepreneurs’ perspective on what their metrics need to be. (Gil) Exploring the difference of SaaS in the US and SaaS in Europe: The US is ahead on SaaS adoption curve, all the way from from mid-market to Fortune 1000. (Conor) European founders have to make the transition to SaaS. (Conor) Cause for adoption is a barrier. (Mike) In the US, you can raise more money. American VCs take top-down approach (they look at growth), while Europe is more cautious (metrics and downside protection). (Jos) The US is a huge market with the same language and currency. (Jos) The best founders don’t think of it as, “I’m a European founder.” It’s just: “I want to build a huge global company.” Don’t think in geographic silos. Play a global game from the moment you wake up in the morning. Go where the market is. (Gil) Unfortunately, leanness erodes as a company grows. As you have the money, you spend it. And then you built a fat business and the next round you raise needs to be even bigger. Yes, I think you need to raise money to scale, but I don’t think you need to raise as much as some companies do today. (Sitar) It’s cheaper to start a company today. That means it’s cheaper for everyone and anyone to start a company today. Technology is what differentiates from competition. Execution really matters, but you can hire for that. Technology is the only weapon. (Gil) Actually I’d say that design and UX are fundamental. It’s not something you can copy; it’s part of the founders view of life. If it’s not part of the founder’s view of life, then it’s not part of the company’s view of life. Design and UX can be as differentiating as technology. Every company that scales becomes a tech company, otherwise they will break down. (Sitar) I’d like to see a founder better articulate their vision — crisply, in a way that’s easy to grasp. It sounds simple, but actually it’s remarkable how few can do that in a way that is clear and compelling. (Conor) In meetings to raise, founders focus too much on KPIs and metrics. It’s not exciting. You can see the growth of the company, but not how it will impact or change the market. Big impactful things lead to the biggest returns. If you pitch metrics and not vision, it’s hard to get excited. What happens after SaaS? Now SaaS seems passive. I think we’ll see increasingly software infused with data. It will be dialectical, infused with data and some machine learning so it gets better every time. Then we have a future of intelligent software. (Jos) SaaS is such a dominant model and efficient delivery system that it’s hard for me to see beyond SaaS. APIs are interesting. If you believe that software is eating the world, then developers will eat the business users. (Gil) – Annie 18:20 – Off to the after party! That’s a wrap! We had a great time manning our ChartMogul booth in Software City, as well as attending as many informative sessions as we humanly could. Many thanks for everyone who stopped by to say hi, who taught us things from the stage, and of course who helped make this inaugural event possible! Hats off to SaaStock. Now… time for a beer. Sláinte!

<sys> [INST] A roundup of SaaStock 2016 [/INST] 09:30 – Thing are warming up The ChartMogul team is ready to go at the SaaStock venue. Or at least, once we’ve all finished our coffee we will be. Here’s an overview of the day’s sessions on the Operator Stage: 10:00 – Des Traynor takes the stage Des is speaking this morning about Product-first companies. I’ll hand over to Annie, for a quick summary of the key points… 10:30 – My take-aways from Des Traynor’s talk Des kicked things off at SaaStock with a great talk about produce-first companies. He started way back at the dawn of business software and followed the evolution into the cloud. From there he made great key points about how software has shifted, molding to the user — and how software companies are shifting, molding to their product. Here are the three innovations of software that describe the SaaS we know today: Move to the cloud. “No installs necessary!” and “Work from anywhere!” were the common sales points. Design with the user in mind. Nowadays, great UX is a no-brainer, but ten years ago it was revolutionary. The product distributes itself. The latest and most successful SaaS products spawn users on their own, through innate virality in the product (e.g.- Slack users invite friends to chat) and sometimes with a little marketing help (e.g.- Dropbox offers free storage when you invite new users). Many SaaS companies today acquire their first few hundred or thousand users without a dedicated sales or marketing team. Thanks to the extreme connectedness of the web in 2016 and the new sales standard of Try Before You Buy, users can flock to SaaS products much more easily. Pietro Bezza, Managing Partner of Connect Ventures Des expanded on point #3. The reality is that with product-focused companies, the product solves many more challenges for the business beyond the primary function of satisfying a customer’s need. It solves distribution, marketing, and sales. It guides the growth trajectory of the business. This reminded me of what Pietro Bezza (of Connect Ventures) said in his recent conversation with Ed about investing in early stage start-ups and mission-driven founders. What’s interesting is that innovation in SaaS isn’t equally distributed across verticals. Here’s how Des broke down some business areas from most evolved to least: Product management tools: The most evolved, completely in the cloud, with excellent UX and viral distribution. Invoices and expenses: In the cloud, great UX, but limited self-distribution. Wikis & intranets HRIS systems Payroll systems: So far, just in the cloud. Typically still very difficult (aka unpleasant) to use. What’s next? Des pointed out how much more growth is in store for SaaS. B2B spend on on-premise software is on the decline, while spend on SaaS is on the rise. He said that by 2020, on-premise could be obsolete. A little bit about SaaS metrics: Of course, my ears perked up when Des brought up metrics. He said he’s tired of seeing company’s charts of pure MRR growth. “This means nothing without churn,” he said, “for all you know that revenue is dropping out of the business as well.” Instead he suggested looking at SaaS Quick Ratio, which compares MRR with churn so you can get an accurate picture of how efficiently you’re growing. A few months ago I wrote a piece explaining SaaS Quick Ratio and evaluating it based on thoughts from the metric creator, Mamoon Hamid, plus Tomasz Tunguz and InsightSquared. What do you learn from the metric? What’s the benchmark? Is it useful? Read more about SaaS Quick Ratio here. Okay, I’m off to the next session! Hope you enjoyed this recap. Tweet and let us know what you think as the day goes on. This is our first “live” blog, and it would be great to hear your feedback! – Annie 12:20 – Genius or luck? What it takes to build a successful SMB SaaS business Fireside chat with Alex Farrara from Bessemer Venture Partners and Martin Henk, Co-Founder and Chief Product Officer at Pipedrive I dropped into this session a bit late, but am glad I made it because it was full of cool insight from Martin Henk, who started his Sales CRM product in the small European country of Estonia and eventually moved over to the States. Here’s what I captured: Hiring in Europe vs. hiring in the States Earlier today Nikos Moraitakis said it’s easier to find great talent in the United States. He started Workable in Greece and eventually moved the headquarters to Boston. Henk agreed that there’s a much smaller talent pool in his native Estonia, so at times they do need to go abroad for hires. But on the other hand, Pipedrive is the best employer in Estonia. When you have a status like that, you get lots of attention and media, you have public recognition. “We stand out, so its easier for us to find great people [in Estonia].” When did it make sense to move to the US? Pipedrive was forced to because they couldn’t get the business to grow beyond 10 new customers/month. At that point they decided to go to Silicon Valley and try the angel investor path. “We opened an office there to breath the air and drink the koolaid.” Pipedrive grew the California office to 10-15 people, then shut it down to move to NYC. Was moving to NYC the right decision? An NYC office was the right move for the Pipedrive team. It came down to coordination and collaboration between global offices. California was a ten hour time difference with Estonia, so there was no overlap in working hours between the two teams. After a round of funding, in the face of hiring more and expanding, it seemed unwise to continue to grow two offices that had zero overlap. At least in NYC, there are a few hours where both offices can have meetings. No late night calls for Estonian team members, not 6am calls for the guys in California, nursing their coffees and trying to wake up. Cultural tension: Geographic location of team functions and decision-makers When companies expand from Europe to US, there can be some cultural tension between teams. Some founders believe they can find the best executive or sales/marketing talent in the States. But you risk everyone back in the original country feeling that key decisions are made elsewhere. They feel they’re a low cost engineering and product route for the company. Henk agrees that it’s tricky to balance. “We try to manage it as best we can” through transparency and constant iteration. What team functions should stay in the States? There are key marketing roles that don’t exist in Estonia and will stay in NYC. If you really want to do American sales, you need local people and native speakers making calls. Pipedrive also runs customer support from NYC. Last but not least, Finance. “It’s almost impossible to find Finance people in Estonia who would understand US tax policies.” Finding Product-Market Fit Earlier today Peter Reinhardt, CEO of Segment, said only 1 in 5 founders find PMF. For Pipedrive to find it, they had to removed roadblocks they themselves put in place. They had a product that sales people loved, but it wouldn’t grow. It was too difficult to sign up. So they changed that initial experience — how website worked and a few other things. The result? 3x more sign-ups over night From 10 to 100 new customers/month in the course of one quarter. Without changing the product but instead the user initial experience, they now get about 3000 new companies every month. What’s the most important thing Pipedrive looks at to measure the company? Net Promoter Score. Henk likes it because it tells the story of how the entire company is doing. It’s about entire ecosystem: speed, reliability, support, product features, etc. And you can learn more by splitting segment of users. “Small companies love, us but large companies aren’t as happy. So that tells us that we can cater do these bigger customers differently.” One unlucky moment in the Pipedrive story Henk told a story about when the company growth stalled. “Money was running out. The product was ready. We were getting 10 new customers every month but wouldn’t grow faster.” They applied to numerous accelerators and got rejected. “It was a negative pattern, and it felt like we were doing something wrong, that maybe we should shut it down.” But then they embraced the idea to “decide not to fail.” They sent one of the co-founders to Silicon Valley, he knocked on hundreds of doors. They could not raise money when they needed it most. Then back in Estonia, they worked all winter, hit 1000 customers and profitability. At that point — raising funds became easier. They were able to raise money from investors over the phone, whom they’d never even met in person. “It seemed once you didn’t need the money, it was easier to get.” Phew! Lunch time. We’ll check back in soon. – Annie 14:00 – Lunch update Ed here. I managed to implement my well-tested strategy of timing lunch perfectly, just before the queues start to build up. There’s a really nice festival vibe to the lunch area, with a DJ adding some background beats. I went for the bagel — and didn’t regret it. The chilly Dublin wind is coming into play, but the networking is as fierce as you’d expect from the SaaS crowd… 15:00 – The data-driven Marketing playbook Great panel with the following participants: Elizabeth Yin, Partner @ 500 Startups Andrew Davies, CMO & Co-Founder @ idio Kieran Flanagan, VP Marketing @ Hubspot Nicola Anderson, VP Marketing @ GoCardless KPIs in Marketing Have to be aligned to business objectives Have to give you insight into business performance Keeping KPIs lean – tracking too much – paralysis Must be constantly re-evaluated, as the product evolves It’s easy to get side-tracked by vanity metrics – they can be a great excuse to throw a party. What KPIs does your Marketing team track? Nicola @ GoCardless: Signups Qualified leads MRR Churn LTV Signups vs. Qualified leads There can be conflict when it comes to choosing to focus on small startups vs. medium / large sized businesses, and the KPIs required to measure those. Signups are more relevant to the “long tail” customers, whereas qualified leads are more about sales opportunities, bigger accounts etc. It’s important to have some conflict over this — it shows that people are bought into it. Experimentation in Marketing How do you include and nurture experimentation in your Marketing team? Hubspot picks experiments applicable to three categories: Acquisition Monetization Retention How do you prioritize the experiments you want to run? Prioritization Impact Ease (PIE) Everyone agreed that it’s essential to tie the potential of an experiment to a real number — a real change in KPIs. if you have this, you can say “I predict that we can increase X by Y amount.” Hubspot has built an “elastic-type” Marketing team, each person bringing different skill sets. This multi-functional team structure means you can ALL focus on one big problem as a team, before moving to the next big thing. More to come this afternoon! Ed 15:20 – 5 key moves that got a $Billion dollar exit A chat between Siraj Khaliq (Co-founder, The Climate Corporation and investor at Atomica) and Tom Lyons, the Business Editor of Sunday Business Post The following is all paraphrased from Siraj Khaliq and should not be considered direct quotes. Move #1. Pivot. (Twice.) We pivoted twice. People around us tried to discourage it, but good founders don’t listen to naysayers. They just execute. We did stay aware of adjacent opportunities, which helped us determine our pivots. The first pivot was out of necessity, and it boils down to the fact that our CAC was too high and LTV too low. We were selling weather insurance to businesses. But educating on weather risk and convincing business owners to buy insurance didn’t work. So we pivoted to agriculture specifically. The second pivot was not out of necessity. Working with farmers, we simply saw the opportunity to focus on inputs, not just outputs. How much water, fertilizer, etc.; what to invest in their farm to determine a certain outcome. This evolved into a farm management platform that spurred the precision agriculture movement. Our board was split on whether to do it. They didn’t want us to lose focus, but it worked. And this second pivot of the business was key to us getting acquired for a billion dollars. It wouldn’t have happened if we were just an insurance business like before. Move #2. A big outcome requires a big problem. If you want to have a big result, you have to start with a big idea. We set out to solve the problem of world hunger and work with agriculture and technology to solve it. Now as an investor, I don’t back people who tackle something too small. Move #3. Fire fast. We let go of staff who didn’t work out EARLY, even senior people. You’ve probably heard the saying, “A people hire A. B people hire C.” But you’re gonna screw it up at some point. And there are huge costs of a mishire in confusion and in morale. Trust your gut about hiring someone, even if people around you whom you respect swear you should hire a certain person. Gut beats hearsay every time. Also, great people don’t come cheap. Paying for headhunter is worth it. Move #4. We became a channel business. Our first approach was direct sale, and we couldn’t sell because there was a trust issue. The average American farmer couldn’t relate to the guy we had on our sales team. Eventually we hired local sellers. Keep open mind about sales, and move to a channel business if it fits. Move #5. Choose investors for strategy, not money. In our Series B, we didn’t choose even the third best term sheet we were offered. We chose not the best economically — but instead went with the investor who had the connections politically, and the connections with customers. This helped us out at that particular stage. It was the same at Series C. We went with Founders Fund. They are very long-term thinking, so they understood and supported our second pivot when our board was skeptical. So strategically pick your investor, don’t just go with the biggest amount of money. Think carefully because they become co-owners. Do yourself a favor and don’t use a bank. Maybe in a Series C it makes sense, but early on, it pays off to spend time with investors and deepen those relationships. Bonus question: Was the sale, your billion dollar exit, planned or reactive? We were mission-driven. We weren’t about biggest outcome, but rather about how we could best help farmers. We felt that feeding the world’s population was so important. It was clear we couldn’t do it successfully without another round or two, so there was still a lot of risk left in the business. We ended up selling to the Google of the AgTech space who were in a great position to carry on our mission. So the sale was not out of necessity but pragmatism. They were the right partner. Maybe in 2015 in that fundraising climate, we could have raised $500M and executed, but that’s how it goes. On to the next! – Annie 17:30 – SaaS VC landscape: Raising Capital in Europe Vision > metrics, great design, and the advantages of the US market… The following is a collage of comments from the panel members: Mike Chalfen – Co-founder and Partner at Mosaic Ventures Gil Dibner – Venture Syndicate Lead, Angelist Syndicate Sitar Teli – Partner, Connect Ventures Conor Stanley – Founder, Tribal.vc Jos White – Notion Capital The VC landscape panel. Pardon my shoddy iPhone photo! What does it take to raise money at an early stage? It’s key to understand UX design. At Connect Ventures, we look to see if they are solving a problem and if there’s a potential for PMF. (Sitar) In general, seed capital for SaaS has been difficult and underfunded. It’s possible that’s why we don’t see as many large SaaS companies here. (Sitar) As for some generic advice for raising seed, assume that you aren’t going to generate revenue on your seed round. Instead aim to raise a lot of money so you can build for 18 months. Yes, you’ll probably generate revenue, but you don’t want to set that expectation and possibly panic. (Sitar) Series A is having an impact on seed. The bar has been raised significantly for Series A. So now we rarely companies going straight from seed to Series A; there are a lot of intermediate rounds. So we’re interested in large seed rounds so our companies can get more traction. (Conor) In Series A, revenue is a general reference point, not a deciding factor. (Jos) The pace of growth matters more than the number. (Mike) There’s a formulaic approach to SaaS in Europe that doesn’t exist in the US. SaaS is a tool, not the answer. (Gil) SaaS has built a culture of metrics and benchmarks, but none of that is true SaaS. It is not grounds for a funding event. (Gil) The SaaS toolkit is useful for building a large company, but not enough for getting to the big payout for investors. (Gil) Things are getting financed that shouldn’t get financed — which is changing entrepreneurs’ perspective on what their metrics need to be. (Gil) Exploring the difference of SaaS in the US and SaaS in Europe: The US is ahead on SaaS adoption curve, all the way from from mid-market to Fortune 1000. (Conor) European founders have to make the transition to SaaS. (Conor) Cause for adoption is a barrier. (Mike) In the US, you can raise more money. American VCs take top-down approach (they look at growth), while Europe is more cautious (metrics and downside protection). (Jos) The US is a huge market with the same language and currency. (Jos) The best founders don’t think of it as, “I’m a European founder.” It’s just: “I want to build a huge global company.” Don’t think in geographic silos. Play a global game from the moment you wake up in the morning. Go where the market is. (Gil) Unfortunately, leanness erodes as a company grows. As you have the money, you spend it. And then you built a fat business and the next round you raise needs to be even bigger. Yes, I think you need to raise money to scale, but I don’t think you need to raise as much as some companies do today. (Sitar) It’s cheaper to start a company today. That means it’s cheaper for everyone and anyone to start a company today. Technology is what differentiates from competition. Execution really matters, but you can hire for that. Technology is the only weapon. (Gil) Actually I’d say that design and UX are fundamental. It’s not something you can copy; it’s part of the founders view of life. If it’s not part of the founder’s view of life, then it’s not part of the company’s view of life. Design and UX can be as differentiating as technology. Every company that scales becomes a tech company, otherwise they will break down. (Sitar) I’d like to see a founder better articulate their vision — crisply, in a way that’s easy to grasp. It sounds simple, but actually it’s remarkable how few can do that in a way that is clear and compelling. (Conor) In meetings to raise, founders focus too much on KPIs and metrics. It’s not exciting. You can see the growth of the company, but not how it will impact or change the market. Big impactful things lead to the biggest returns. If you pitch metrics and not vision, it’s hard to get excited. What happens after SaaS? Now SaaS seems passive. I think we’ll see increasingly software infused with data. It will be dialectical, infused with data and some machine learning so it gets better every time. Then we have a future of intelligent software. (Jos) SaaS is such a dominant model and efficient delivery system that it’s hard for me to see beyond SaaS. APIs are interesting. If you believe that software is eating the world, then developers will eat the business users. (Gil) – Annie 18:20 – Off to the after party! That’s a wrap! We had a great time manning our ChartMogul booth in Software City, as well as attending as many informative sessions as we humanly could. Many thanks for everyone who stopped by to say hi, who taught us things from the stage, and of course who helped make this inaugural event possible! Hats off to SaaStock. Now… time for a beer. Sláinte! </sys

The Rise of the API-based SaaS. We’ve come a long way Enterprise software has seen a number of key shifts in the way that it’s built, distributed and consumed. From the days of on-premise hosted solutions, with bespoke code and teams of consultants required for efficient operation, through to today’s cloud-based solutions with a focus on great user experience, next-to-no onboarding effort and far more flexible pricing for customers. But just as the world is waking up to the importance of design and user experience in enterprise products – arguably years after the consumer market saw the same evolution – there is a new breed of B2B solution, which ditches the visual user experience altogether – the API-based SaaS. What is API-based SaaS? There are a few, rather hard-to-miss features of such a service: There is NO user interface (GUI). Or in some cases, there is a GUI but it’s secondary to the core product. Interaction with the service is through a web-based API – a programmatic way of connecting services and transferring data across the web in a machine-readable way. The value of the service is usually in the data that’s delivered (through the API). Pricing is often usage-based, meaning that the cost is based on the number of requests made to the API. Some examples Clearbit Clearbit is building a collection of Business Intellgence APIs with the goal of becoming the BI backend for many businesses. As with most API-based products, the value is in the data that Clearbit provides, through a simple, easy-to-consume interface. Clearbit’s marketing efforts focus on the value of their data to your business. Tip: Listen to the latest episode of SaaS Open Mic, a podcast dedicated to sharing the stories of SaaS founders and thought leaders. In this episode I chatted with Clearbit Co-Founder and CEO Alex MacCaw, on why he believes API-based products are set to become the next generation of enterprise software: Contentful Contentful is a new breed of CMS which is built for the multi-device world we live in today, unlike many ‘traditional’ CMS products. How does it manage that? Through an API, of course! The Contentful team have stripped away much of the complexity around managing content in a device-agnostic space. Contentful strongly conveys the simplicity of removing the “legacy” parts of a traditional CMS. Twilio It looks like Twilio is set to become the first truly API-based SaaS to IPO in 2016. The platform has grown significantly in the years since it’s first funding round in 2009, and now runs the telecommunications infrastructure for major corporations like Coca Cola, Uber and EMC2. And all through an API! Twilio’s marketing is highly developer-focused. Algolia Algolia offers an API for search, allowing SaaS vendors to effectively outsource the complexity of handling advanced, high-performance search in their apps – something that’s technically very hard to achieve. The search functionality in apps like ProductHunt, Medium and Birchbox are all powered by Algolia! Algolia does a great job of displaying the value of their product in an interactive and engaging way. What are the benefits for vendors? API-based products are sticky Once integrated into your platform, there is a very real ‘pain’ in stripping out the functionality and replacing it, either with another product or with your own business logic (that will inevitably need to be developed by your engineering team). This could mean that, even in the case where a cheaper (or functionally superior) solution exists, there still may not be enough of an incentive to make the switch to such a competitor. More focus on the value provided It’s very difficult to add ‘marketing fluff’ around an API-based product. Consequently, it’s much easier for customers to clearly see the value that the solution is adding to their business, particularly when the solution is simply providing them with some data. Easier to build & maintain If you’re building an API-based SaaS product, there are some key things you don’t need to consider, for example: Designing the perfect UI Accommodating multiple browsers and screen sizes Creating in-app onboarding & tutorials Building a native mobile app Of course, that’s not to say that everything is easier with an API (see the challenges below), but you have a great opportunity to run a largely simplified software stack that can scale to a large amount of requests. The customer can apply their own user experience Businesses consuming your API can have a much greater level of control over how that functionality is delivered to the user. They can brand it in a way that matches their creative vision for the product – leading to an overall more consistent experience. What are some challenges? Onboarding If the goal of your onboarding is to get your customers to their “Aha moment” as quickly as possible, this can be challenging when the customer is required to spend development time on integrating your API before that can happen. There’s much more risk of poisoning the onboarding experience. I spoke to Sascha Konietzke, CEO at Contentful, to get his take on some of the challenges of building and growing an API-based product, particularly when onboarding customers. Here’s what he had to say: One common strategy for getting around the challenges of onboarding is to offer a set of integrations with existing platforms. This is especially useful where there is a fairly common set of use cases for the API, and they involve integrating with an existing service. You’re essentially doing the work (of building the integrations), so that your customers don’t have to. The end result is often a ‘one-click’ connection rather than weeks of development and testing. Example: Clearbit provides pre-built integrations with Google Sheets, Close.io, Salesforce, Marketo and Slack. Longer sales cycles This is directly tied to the difference in Onboarding. Persuading a customer to commit to integrating an API and fitting the required work into their development cycle is clearly a higher barrier than getting them to click sign up in a polished user interface, and enter their payment details. You’ll also need to think about extending your trial period to account for the increased effort in onboarding. Pricing – Less flexibility You’ll have significantly fewer options for pricing your service. Typically with data-oriented services, you’ll see scalable volume-based pricing, i.e. on the number of requests you make to the API. When products are unboxed into API-based micro-services, you’ll find it difficult to scale pricing based on features or other factors. On the plus side, instead of one product with lots of different pricing dimensions, you’ll be left with a set of smaller products, each with their own, more simple pricing structure. It’s a great way to let your customers pick and choose the different parts of your solution they’ll need, and only pay for what’s valuable to them. Example: Contentful is priced based on the amount of data entries you store with them, and the number of requests you make to their API. Marketing – It’s not at all visual Marketing a SaaS product is a lot about finding ways to convey (and visualize) the value of your solution to the target customer. Even your product has a highly visual, well-designed UI, that job isn’t easy at the best of times. But remove that UI entirely and you’re left with next to no way to really show the product to your target customers. The solution? You have to find a way to visualize the value that the product delivers, rather than the product itself. You’re also likely to be marketing not only to business owners and decision-makers, but also to developers – they’ll be the ones faced with the task of integrating your API. You’ve got to win over both of these parties if you really want to sell your product. Example: Twilio goes all-out with developer conferences, swag and an awesome knowledge base of code samples and interactive integration guides to win over the hearts of developers. So should I ‘unbox’ elements of my SaaS product into an API? So it’s fairly clear that there are great benefits to both selling and consuming API-based products. But what if you already offer a ‘full-scale’ SaaS solution, should you consider offering parts of this as standalone services? Here are a few questions you should consider first. Are there areas of my product that could be broken out into smaller, standalone services? Are there small areas of your product that deliver some isolated value to your customers? These are prime candidates for unboxing and offering separately, through an API. Is the value of my product tied to the data it provides? If the answer is “yes”, you might want to consider giving access to this data programatically (through an API), and enabling customers to build platforms and services on top of your data. Is my product often used as a core part of my customers’ solutions? If this is the case and you see businesses building additional value on top of your solution, they might be able to do this more easily if you offer this part of your product through an API. The Holy Grail of many SaaS businesses is to become a platform or an ecosystem – You only have to look at the Salesforce AppExchange to see that this unlocks a world of possibilities. In conclusion: These are the building blocks of the future The movement towards SaaS businesses delivering value through an API might not appear to be something huge, in the grand scheme of things. There will always be a need for products and services that can be used by humans, with some form of interface through which they can interact (even though there are subtle changes in that space, with strong growth in instant messaging-based apps). However, when the ‘next generation’ startup approaches the mammoth task of building their product with limited funding and time, there will be a new option on the table for them: Use API SaaS A for my email Use API SaaS B for my support Use API SaaS C for my business intelligence And so on… And there we have the new generation SaaS, built using the building blocks of a range of existing API-based services, that can: Launch their product more quickly Add pieces of advanced functionality without in-house expertise (e.g. machine learning) Evaluate the cost of their service more predictably Scale more reliably We’re already starting to see this, even with some more well-established startups. But it’s likely that we’ll see it to a greater extent in the coming years, as more and more pieces of functionality are suitable for ‘outsourcing’ through an API. The only question that remains is “what, if anything, will still be built from scratch in 5 years?”

[INST] The Rise of the API-based SaaS [/INST]

We’ve come a long way Enterprise software has seen a number of key shifts in the way that it’s built, distributed and consumed. From the days of on-premise hosted solutions, with bespoke code and teams of consultants required for efficient operation, through to today’s cloud-based solutions with a focus on great user experience, next-to-no onboarding effort and far more flexible pricing for customers. But just as the world is waking up to the importance of design and user experience in enterprise products – arguably years after the consumer market saw the same evolution – there is a new breed of B2B solution, which ditches the visual user experience altogether – the API-based SaaS. What is API-based SaaS? There are a few, rather hard-to-miss features of such a service: There is NO user interface (GUI). Or in some cases, there is a GUI but it’s secondary to the core product. Interaction with the service is through a web-based API – a programmatic way of connecting services and transferring data across the web in a machine-readable way. The value of the service is usually in the data that’s delivered (through the API). Pricing is often usage-based, meaning that the cost is based on the number of requests made to the API. Some examples Clearbit Clearbit is building a collection of Business Intellgence APIs with the goal of becoming the BI backend for many businesses. As with most API-based products, the value is in the data that Clearbit provides, through a simple, easy-to-consume interface. Clearbit’s marketing efforts focus on the value of their data to your business. Tip: Listen to the latest episode of SaaS Open Mic, a podcast dedicated to sharing the stories of SaaS founders and thought leaders. In this episode I chatted with Clearbit Co-Founder and CEO Alex MacCaw, on why he believes API-based products are set to become the next generation of enterprise software: Contentful Contentful is a new breed of CMS which is built for the multi-device world we live in today, unlike many ‘traditional’ CMS products. How does it manage that? Through an API, of course! The Contentful team have stripped away much of the complexity around managing content in a device-agnostic space. Contentful strongly conveys the simplicity of removing the “legacy” parts of a traditional CMS. Twilio It looks like Twilio is set to become the first truly API-based SaaS to IPO in 2016. The platform has grown significantly in the years since it’s first funding round in 2009, and now runs the telecommunications infrastructure for major corporations like Coca Cola, Uber and EMC2. And all through an API! Twilio’s marketing is highly developer-focused. Algolia Algolia offers an API for search, allowing SaaS vendors to effectively outsource the complexity of handling advanced, high-performance search in their apps – something that’s technically very hard to achieve. The search functionality in apps like ProductHunt, Medium and Birchbox are all powered by Algolia! Algolia does a great job of displaying the value of their product in an interactive and engaging way. What are the benefits for vendors? API-based products are sticky Once integrated into your platform, there is a very real ‘pain’ in stripping out the functionality and replacing it, either with another product or with your own business logic (that will inevitably need to be developed by your engineering team). This could mean that, even in the case where a cheaper (or functionally superior) solution exists, there still may not be enough of an incentive to make the switch to such a competitor. More focus on the value provided It’s very difficult to add ‘marketing fluff’ around an API-based product. Consequently, it’s much easier for customers to clearly see the value that the solution is adding to their business, particularly when the solution is simply providing them with some data. Easier to build & maintain If you’re building an API-based SaaS product, there are some key things you don’t need to consider, for example: Designing the perfect UI Accommodating multiple browsers and screen sizes Creating in-app onboarding & tutorials Building a native mobile app Of course, that’s not to say that everything is easier with an API (see the challenges below), but you have a great opportunity to run a largely simplified software stack that can scale to a large amount of requests. The customer can apply their own user experience Businesses consuming your API can have a much greater level of control over how that functionality is delivered to the user. They can brand it in a way that matches their creative vision for the product – leading to an overall more consistent experience. What are some challenges? Onboarding If the goal of your onboarding is to get your customers to their “Aha moment” as quickly as possible, this can be challenging when the customer is required to spend development time on integrating your API before that can happen. There’s much more risk of poisoning the onboarding experience. I spoke to Sascha Konietzke, CEO at Contentful, to get his take on some of the challenges of building and growing an API-based product, particularly when onboarding customers. Here’s what he had to say: One common strategy for getting around the challenges of onboarding is to offer a set of integrations with existing platforms. This is especially useful where there is a fairly common set of use cases for the API, and they involve integrating with an existing service. You’re essentially doing the work (of building the integrations), so that your customers don’t have to. The end result is often a ‘one-click’ connection rather than weeks of development and testing. Example: Clearbit provides pre-built integrations with Google Sheets, Close.io, Salesforce, Marketo and Slack. Longer sales cycles This is directly tied to the difference in Onboarding. Persuading a customer to commit to integrating an API and fitting the required work into their development cycle is clearly a higher barrier than getting them to click sign up in a polished user interface, and enter their payment details. You’ll also need to think about extending your trial period to account for the increased effort in onboarding. Pricing – Less flexibility You’ll have significantly fewer options for pricing your service. Typically with data-oriented services, you’ll see scalable volume-based pricing, i.e. on the number of requests you make to the API. When products are unboxed into API-based micro-services, you’ll find it difficult to scale pricing based on features or other factors. On the plus side, instead of one product with lots of different pricing dimensions, you’ll be left with a set of smaller products, each with their own, more simple pricing structure. It’s a great way to let your customers pick and choose the different parts of your solution they’ll need, and only pay for what’s valuable to them. Example: Contentful is priced based on the amount of data entries you store with them, and the number of requests you make to their API. Marketing – It’s not at all visual Marketing a SaaS product is a lot about finding ways to convey (and visualize) the value of your solution to the target customer. Even your product has a highly visual, well-designed UI, that job isn’t easy at the best of times. But remove that UI entirely and you’re left with next to no way to really show the product to your target customers. The solution? You have to find a way to visualize the value that the product delivers, rather than the product itself. You’re also likely to be marketing not only to business owners and decision-makers, but also to developers – they’ll be the ones faced with the task of integrating your API. You’ve got to win over both of these parties if you really want to sell your product. Example: Twilio goes all-out with developer conferences, swag and an awesome knowledge base of code samples and interactive integration guides to win over the hearts of developers. So should I ‘unbox’ elements of my SaaS product into an API? So it’s fairly clear that there are great benefits to both selling and consuming API-based products. But what if you already offer a ‘full-scale’ SaaS solution, should you consider offering parts of this as standalone services? Here are a few questions you should consider first. Are there areas of my product that could be broken out into smaller, standalone services? Are there small areas of your product that deliver some isolated value to your customers? These are prime candidates for unboxing and offering separately, through an API. Is the value of my product tied to the data it provides? If the answer is “yes”, you might want to consider giving access to this data programatically (through an API), and enabling customers to build platforms and services on top of your data. Is my product often used as a core part of my customers’ solutions? If this is the case and you see businesses building additional value on top of your solution, they might be able to do this more easily if you offer this part of your product through an API. The Holy Grail of many SaaS businesses is to become a platform or an ecosystem – You only have to look at the Salesforce AppExchange to see that this unlocks a world of possibilities. In conclusion: These are the building blocks of the future The movement towards SaaS businesses delivering value through an API might not appear to be something huge, in the grand scheme of things. There will always be a need for products and services that can be used by humans, with some form of interface through which they can interact (even though there are subtle changes in that space, with strong growth in instant messaging-based apps). However, when the ‘next generation’ startup approaches the mammoth task of building their product with limited funding and time, there will be a new option on the table for them: Use API SaaS A for my email Use API SaaS B for my support Use API SaaS C for my business intelligence And so on… And there we have the new generation SaaS, built using the building blocks of a range of existing API-based services, that can: Launch their product more quickly Add pieces of advanced functionality without in-house expertise (e.g. machine learning) Evaluate the cost of their service more predictably Scale more reliably We’re already starting to see this, even with some more well-established startups. But it’s likely that we’ll see it to a greater extent in the coming years, as more and more pieces of functionality are suitable for ‘outsourcing’ through an API. The only question that remains is “what, if anything, will still be built from scratch in 5 years?”

<sys> [INST] The Rise of the API-based SaaS [/INST] We’ve come a long way Enterprise software has seen a number of key shifts in the way that it’s built, distributed and consumed. From the days of on-premise hosted solutions, with bespoke code and teams of consultants required for efficient operation, through to today’s cloud-based solutions with a focus on great user experience, next-to-no onboarding effort and far more flexible pricing for customers. But just as the world is waking up to the importance of design and user experience in enterprise products – arguably years after the consumer market saw the same evolution – there is a new breed of B2B solution, which ditches the visual user experience altogether – the API-based SaaS. What is API-based SaaS? There are a few, rather hard-to-miss features of such a service: There is NO user interface (GUI). Or in some cases, there is a GUI but it’s secondary to the core product. Interaction with the service is through a web-based API – a programmatic way of connecting services and transferring data across the web in a machine-readable way. The value of the service is usually in the data that’s delivered (through the API). Pricing is often usage-based, meaning that the cost is based on the number of requests made to the API. Some examples Clearbit Clearbit is building a collection of Business Intellgence APIs with the goal of becoming the BI backend for many businesses. As with most API-based products, the value is in the data that Clearbit provides, through a simple, easy-to-consume interface. Clearbit’s marketing efforts focus on the value of their data to your business. Tip: Listen to the latest episode of SaaS Open Mic, a podcast dedicated to sharing the stories of SaaS founders and thought leaders. In this episode I chatted with Clearbit Co-Founder and CEO Alex MacCaw, on why he believes API-based products are set to become the next generation of enterprise software: Contentful Contentful is a new breed of CMS which is built for the multi-device world we live in today, unlike many ‘traditional’ CMS products. How does it manage that? Through an API, of course! The Contentful team have stripped away much of the complexity around managing content in a device-agnostic space. Contentful strongly conveys the simplicity of removing the “legacy” parts of a traditional CMS. Twilio It looks like Twilio is set to become the first truly API-based SaaS to IPO in 2016. The platform has grown significantly in the years since it’s first funding round in 2009, and now runs the telecommunications infrastructure for major corporations like Coca Cola, Uber and EMC2. And all through an API! Twilio’s marketing is highly developer-focused. Algolia Algolia offers an API for search, allowing SaaS vendors to effectively outsource the complexity of handling advanced, high-performance search in their apps – something that’s technically very hard to achieve. The search functionality in apps like ProductHunt, Medium and Birchbox are all powered by Algolia! Algolia does a great job of displaying the value of their product in an interactive and engaging way. What are the benefits for vendors? API-based products are sticky Once integrated into your platform, there is a very real ‘pain’ in stripping out the functionality and replacing it, either with another product or with your own business logic (that will inevitably need to be developed by your engineering team). This could mean that, even in the case where a cheaper (or functionally superior) solution exists, there still may not be enough of an incentive to make the switch to such a competitor. More focus on the value provided It’s very difficult to add ‘marketing fluff’ around an API-based product. Consequently, it’s much easier for customers to clearly see the value that the solution is adding to their business, particularly when the solution is simply providing them with some data. Easier to build & maintain If you’re building an API-based SaaS product, there are some key things you don’t need to consider, for example: Designing the perfect UI Accommodating multiple browsers and screen sizes Creating in-app onboarding & tutorials Building a native mobile app Of course, that’s not to say that everything is easier with an API (see the challenges below), but you have a great opportunity to run a largely simplified software stack that can scale to a large amount of requests. The customer can apply their own user experience Businesses consuming your API can have a much greater level of control over how that functionality is delivered to the user. They can brand it in a way that matches their creative vision for the product – leading to an overall more consistent experience. What are some challenges? Onboarding If the goal of your onboarding is to get your customers to their “Aha moment” as quickly as possible, this can be challenging when the customer is required to spend development time on integrating your API before that can happen. There’s much more risk of poisoning the onboarding experience. I spoke to Sascha Konietzke, CEO at Contentful, to get his take on some of the challenges of building and growing an API-based product, particularly when onboarding customers. Here’s what he had to say: One common strategy for getting around the challenges of onboarding is to offer a set of integrations with existing platforms. This is especially useful where there is a fairly common set of use cases for the API, and they involve integrating with an existing service. You’re essentially doing the work (of building the integrations), so that your customers don’t have to. The end result is often a ‘one-click’ connection rather than weeks of development and testing. Example: Clearbit provides pre-built integrations with Google Sheets, Close.io, Salesforce, Marketo and Slack. Longer sales cycles This is directly tied to the difference in Onboarding. Persuading a customer to commit to integrating an API and fitting the required work into their development cycle is clearly a higher barrier than getting them to click sign up in a polished user interface, and enter their payment details. You’ll also need to think about extending your trial period to account for the increased effort in onboarding. Pricing – Less flexibility You’ll have significantly fewer options for pricing your service. Typically with data-oriented services, you’ll see scalable volume-based pricing, i.e. on the number of requests you make to the API. When products are unboxed into API-based micro-services, you’ll find it difficult to scale pricing based on features or other factors. On the plus side, instead of one product with lots of different pricing dimensions, you’ll be left with a set of smaller products, each with their own, more simple pricing structure. It’s a great way to let your customers pick and choose the different parts of your solution they’ll need, and only pay for what’s valuable to them. Example: Contentful is priced based on the amount of data entries you store with them, and the number of requests you make to their API. Marketing – It’s not at all visual Marketing a SaaS product is a lot about finding ways to convey (and visualize) the value of your solution to the target customer. Even your product has a highly visual, well-designed UI, that job isn’t easy at the best of times. But remove that UI entirely and you’re left with next to no way to really show the product to your target customers. The solution? You have to find a way to visualize the value that the product delivers, rather than the product itself. You’re also likely to be marketing not only to business owners and decision-makers, but also to developers – they’ll be the ones faced with the task of integrating your API. You’ve got to win over both of these parties if you really want to sell your product. Example: Twilio goes all-out with developer conferences, swag and an awesome knowledge base of code samples and interactive integration guides to win over the hearts of developers. So should I ‘unbox’ elements of my SaaS product into an API? So it’s fairly clear that there are great benefits to both selling and consuming API-based products. But what if you already offer a ‘full-scale’ SaaS solution, should you consider offering parts of this as standalone services? Here are a few questions you should consider first. Are there areas of my product that could be broken out into smaller, standalone services? Are there small areas of your product that deliver some isolated value to your customers? These are prime candidates for unboxing and offering separately, through an API. Is the value of my product tied to the data it provides? If the answer is “yes”, you might want to consider giving access to this data programatically (through an API), and enabling customers to build platforms and services on top of your data. Is my product often used as a core part of my customers’ solutions? If this is the case and you see businesses building additional value on top of your solution, they might be able to do this more easily if you offer this part of your product through an API. The Holy Grail of many SaaS businesses is to become a platform or an ecosystem – You only have to look at the Salesforce AppExchange to see that this unlocks a world of possibilities. In conclusion: These are the building blocks of the future The movement towards SaaS businesses delivering value through an API might not appear to be something huge, in the grand scheme of things. There will always be a need for products and services that can be used by humans, with some form of interface through which they can interact (even though there are subtle changes in that space, with strong growth in instant messaging-based apps). However, when the ‘next generation’ startup approaches the mammoth task of building their product with limited funding and time, there will be a new option on the table for them: Use API SaaS A for my email Use API SaaS B for my support Use API SaaS C for my business intelligence And so on… And there we have the new generation SaaS, built using the building blocks of a range of existing API-based services, that can: Launch their product more quickly Add pieces of advanced functionality without in-house expertise (e.g. machine learning) Evaluate the cost of their service more predictably Scale more reliably We’re already starting to see this, even with some more well-established startups. But it’s likely that we’ll see it to a greater extent in the coming years, as more and more pieces of functionality are suitable for ‘outsourcing’ through an API. The only question that remains is “what, if anything, will still be built from scratch in 5 years?” </sys

Choosing the Right Billing System for Your SaaS Business [Updated for 2020]. Billing is the lifeline of your subscription business. You could have hundreds or thousands of customers lined up wanting to buy from you, but without a way of collecting that cash, you’re out of luck. The trick about billing systems is that when they’re working correctly, you can forget they exist. The best billing system for you works seamlessly so that you can focus your efforts elsewhere. However, if they start to cause issues, the faults will grow to a massive scale. Lost income, frustrated customers, and your reputation down the drain are some of the genuine consequences to lousy billing. The importance of a billing system shouldn’t scare you, though. Instead, view this as an opportunity to make an informed decision that will positively benefit you for years to come. In this guide, we’re going to teach you what you need to know about SaaS billing systems and how to choose them. By the end, you’ll be armed with the questions and considerations required to make selecting the right billing system for your SaaS much easier. Why is billing critical for my business? Billing is the middle man between your customer’s accounts and your bottom line, that much is obvious. How exactly could a billing system make or break your company, though? It all comes down to fit, ease, and flexibility. First, your billing system needs to fit your product’s needs. For example, a SaaS product with different tiers needs a billing system that can accommodate these different options. It also needs to be able to handle movement between these tiers, as well as monthly vs. annual billing. If your billing system can’t manage that, the customer experience will be frustrating, and you’ll be limited in experimenting with pricing. Next, your billing system should make transactions as easy as possible for both you and your customers. Difficult to navigate billing will stop prospective users in their tracks and potentially make your company seem untrustworthy. Plus, a redundant workflow or lack of data and reporting would make it difficult for you to work efficiently and spot issues. Finally, you need a billing system that offers flexibility. While you can’t foresee the entire future of your company, you do need a billing system that can grow and evolve with you. Having to switch providers down the line is a large undertaking. You also need flexibility in integrations. Using multiple providers for different purposes is pretty standard, and having systems that don’t play nice together is disruptive. The three types of billing systems you’ll need We’ve talked about how important this somewhat abstract concept of a “billing system” is, but now it’s time for details. The SaaS billing process has a few steps and necessary tools. First, let’s start with the billing systems. Subscription management platform (optional) If you’re handling customer subscriptions, then subscription management platforms will manage a lot of the heavy lifting and logic around pricing tiers, discounts, upgrades, downgrades, etc. A subscription management platform can effectively drive a lot of the pricing model of your product – before we even get to the payment transaction. This is an optional tool, and examples include Chargebee, Invoiced, and Recurly. Payment gateway The gateway is the system that securely transmits transaction data to merchant banks and receives responses from issuing banks. Essentially, it tells the customer’s bank how much it needs to send. Payment gateways you’ve likely encountered include PayPal, Stripe, and Amazon Pay. Merchant account You’ll always need a merchant account to receive online payments as a business, but some of the billing systems include a “built-in” version. For example, Stripe is both a payment gateway and a merchant account. Others may require you to plug in an external account. How do these three systems work together? We’ve simplified SaaS billing in the graphic below. Let’s say, for example, a customer decides to upgrade to a paid Pro plan. They click the beautiful “Upgrade Now” button on your website, which sets in motion a conversation between your application and server. Your application and server work together to determine what plan the customer is on now, and which they’d like to upgrade to. This information is then passed on to the subscription management platform, which calculates what the total cost is. This total is passed on to the payment gateway, which gets the money from the customer’s bank. Finally, the merchant account passes the payment to your business. Does every SaaS transaction need all of those tools? Well, no. A subscription management platform is optional, which means you only need a payment gateway and a merchant account to get started. Some gateways are set up as both payment gateways and merchant accounts in one. If not, they’ll likely offer integrations with other 3rd-party products. In-house vs. 3rd-party billing There’s another vital detail about SaaS billing that we haven’t covered yet: you don’t need an external solution. There are many SaaS businesses out there with custom-built in-house billing systems driving their back end. As with any business decisions, choosing a 3rd-party or in-house solution comes with pros and cons. In-house billing systems If you want maximum control and customization over your billing system, then an in-house solution is probably tempting. Building from scratch takes time, so this route is better suited for bigger companies that can commit resources to get the system just right. Pros: Fully customizable to your product, payment tiers, promotions, and more After the initial investment in building the system, there will be lower monthly or per-transaction costs Issues receive full, immediate attention since you’re the system’s only customer Cons: Require a lot of complex logic to handle payment transactions (i.e., you’ll need some great engineers and a lot of time) Still needs to interact with 3rd-party systems along the way, for card authorization, etc. May require a legal presence in each country in which you wish to do business Will require a significant ongoing investment in security. Your billing system will need to stay at the forefront of the latest Paymentech 3rd-party billing systems Opting for a pre-existing 3rd-party billing system is naturally less customizable. However, 3rd-party systems will always win in the “speed of integration” category. These tools are perfect for smaller teams or companies who want to have a working system up and running in a matter of hours. Pros: Handle nearly all of the complex logic associated with payments Take care of the legal side of transactions in multiple countries Usually maintains the highest possible level of security Support many one-click integrations with other platforms (analytics, accounting, etc.) Deliver a consistent payment experience for the end-user Cons: They’ll take a transaction-based fee, but there’s no upfront cost of building If you need a new feature, you’ll have to request it or find a new solution Less flexibility and control than an in-house system 5 questions to evaluate a billing system So you’ve decided to go with a 3rd-party option – great. But here comes the next dilemma: Which system should you choose out of all of the available products out there? Many of them have different characteristics and cover slightly different parts of the billing process. How to Evaluate a SaaS Billing System You need a payment gateway and merchant account, but subscription management platforms are optional. What part of the billing process does each system cover? Does it handle subscription billing and one-time payments? Does it operate in the country AND currencies you need? What are the setup, monthly, and transaction fees? Does it have features that matter to you, like analytics, mobile support, and integrations? Which parts of the billing process does it cover? Recall that there are three key SaaS billing systems, two of which are required. Do you want a comprehensive solution that covers most, if not all, of your process needs? Or are you content to mix and match services to cover the billing process? There’s no right answer, and it will depend on your preference. It’s also useful to consider what you need now vs. what you may need in the future. Your company today may not need a particular feature today, but if it’s a possibility in the future, you’ll want a system with appropriate integrations. Do they handle both subscription and one-time charges? This one’s fairly straightforward. If your business processes purely subscription-based charges, you can choose any of the specialized subscription billing systems available. However, if you also have some one-time charges such as setup costs, fees, etc. then you’ll need a system that supports this as well. In which countries and currencies do they operate? Country and currency support are two critical factors, but they’re definitely not the same thing. A billing system can support transactions in a particular country but not allow you to accept payments in the currency of that country. There are almost no payment gateways that support every country (except for PayPal), so do your research! Having said that, most will support the world’s major currencies. Remember: If in doubt, make sure you read the complete terms of the payment gateway you choose. What are the fees? For a billing system, fees come in several different categories, all of which could have an impact on your bottom line: Monthly fees: This is basically a SaaS subscription fee. You’re paying to use certain features, per-month (or per-year). Many billing systems don’t actually have a monthly fee. Setup fees: When opening a merchant account, or other financial services, you’ll often have to pay a one-time setup fee when you apply. Transaction fees: This is how most billing system businesses make their money — they take a small fee for each transaction you run through their system. This is usually a percentage of the transaction amount, sometimes combined with a fixed fee of a few cents. When you’re evaluating billing systems, think about your transaction volume. Compare solutions based on your average number of transactions a month, as well as average ticket prices. If you’re processing transactions over a certain (very large) volume, you’ll be able to negotiate fees (and discounts) with the billing system. Huge SaaS businesses don’t pay the fees you see on the pricing page! What features are important to you? Finally, you should consider the features that each system offers, particularly with regards to subscription management. Here are 6 categories of features that could be useful to you, depending on the features of your business: Handling of subscription tiers, discounts, and coupons: If you don’t have logic and systems in place to model and manage the different pricing tiers for your product, it’s possible to find subscription management products to do this for you. This is especially valuable if you have a complicated pricing model and multiple discounts or coupons in use. For example, Chargebee, Recurly, and Chargify all offer subscription management functionality. Analytics: You want to be able to view and understand the data associated with billing. Some billing systems have a basic level of built-in analytics. However, if you really want to understand customer churn, retention, and optimize your MRR, you should turn to a subscription data platform. Give it a try. Integrations: Besides analytics, billing systems can plug into a vast range of other platforms, depending on your desired functionality. For example, Stripe integrates with Intercom to allow you to communicate effectively with your customers. Make sure the billing solution you choose supports the systems you use in-house, and your experience will be much smoother in the long run. Mobile support: Depending on your product, mobile payments may or may not be a requirement for you. Many billing systems support different kinds of mobile experiences (some more customizable than others). A good example of this is Braintree’s extensive set of mobile integrations, supporting products like Apple Pay and Android Pay. Invoicing and tax handling: If you need to invoice your customers, the chances are that you can have your billing system take care of generating, and even sending invoices. Handling card failure: Credit card failure is a killer cause of churn in SaaS businesses. Some businesses have reported up to 50% of customer churn is attributed to failed card transactions, so choosing a billing system that can address this in some way could save you from a churn nightmare down the line. 5 SaaS billing system options in 2020 You didn’t think we were going to give you all of this SaaS billing system information and then send you out on your own to find a solution, did you? There are a ton of subscription management platforms, payment gateways, and merchant accounts to choose from, but let’s explore five. As a reminder, subscription management platforms are useful but optional. If you want to start with a lean billing system, all you need is a payment gateway and a merchant account. Chargebee Type: Subscription management platform (optional) Chargebee is a subscription management and billing platform that handles both one-time and recurring payments. They’re not a payment gateway, but they do integrate with gateways around the world. Chargebee offers pricing options in 100+ currencies and payment methods. Fees: Payments plans, billed annually or monthly, are based on annual revenue and start at $249 a month. Higher-tiered plans also come with more features, users, and priority support. Features: Pricing model flexibility Cart abandon recovery and dunning management Subscription metrics and analytics Recurly Type: Subscription management platform (optional) Recurly lets you set up one-time or recurring payments across a variety of payment methods, including credit card, ACH, PayPal, Apple Pay, and more. Just like Chargebee, Recurly has a global presence, though compatible payment gateways vary by location. Fees: Recurly doesn’t list pricing, but there are three tiers: core, professional, and elite. Plans have varying levels of analytics, integrations, and payment methods. Features: Machine-learning-powered “decline management” capabilities Analytics dashboard Add a second, backup gateway Chargify Type: Subscription management platform (optional) Chargify handles recurring payments, as well as one-time adjustments or charges. They connect with major payment gateways, and you’ll still need a merchant account. As with other subscription management platforms, available countries will vary based on your payment gateway. Fees: Chargify charges a monthly or annual subscription, along with a fee based on revenue. Their starter plan begins at $149 a month, and the mid-tier “Success” plan is $499 a month + 0.9% of revenue. Features: Send personalized offers Segment and experimental pricing Dunning notifications Stripe Type: Payment Gateway and Merchant Account Stripe is one of the leading online payment platforms, and for a good reason. It’s a payment gateway and a merchant account all in one, so you could theoretically set up your SaaS with Stripe alone. The service is available in 34 countries, so your business needs to be located in one of those in order to accept payments through Stripe. Fees: Stripe offers a pay-as-you-go pricing of 2.9% of card charge + 30 cents per transaction. They do have some country-specific rates and volume discounts, so it’s worth contacting sales if you have a special case. Features: Accept customer payments Receive payouts to your bank Many services, including subscription management platforms, integrate with Stripe Authorize.net Type: Payment Gateway with the option to add a Merchant Account Authorize.Net is a Visa-backed company that can be used as a payment gateway only or a combination of a payment gateway and merchant account. Your business can accept international payments with Authorize.Net, but you do need to be based in the U.S., Canada, UK, Europe, or Australia. Fees: There will be a monthly and per-transaction fee, whether you choose payment gateway only or an all-in-one solution. Using Authorize.Net as a payment gateway costs $25 a month plus 10 cents per transaction and a 10 cent daily batch fee. If you want to use one system for billing, Authorize.Net is $25 a month plus 2.9% + 30 cents per transaction. Features: Option to use a different Merchant Account or use Authorize.Net for all payment needs Accept 10 payment types, including Visa, PayPal, or E-Check How to pick the best billing system for 2020 and beyond Finding the right billing system for your SaaS is a tricky business. You need to weigh both your current needs, as well as what you might need in the future. Choosing a billing system that works out of tune with your pricing model or needs can lead to lost income and frustrated customers. Plus, switching billing systems down the line requires planning and careful coordination. Since billing systems are essential, you need to take your time to compare and contrast. Consider things like which countries you need to be able to accept features from and whether you’ll need one-time payments on top of subscription billing. The fewer billing systems you use, the less you’ll pay out monthly or per-transaction. However, it’s common to use multiple services together. Just make sure that your payment gateway and subscription management platform integrate before committing to either. Want an easy way to keep all of this information top of mind as you choose a billing system? Check out our Ultimate SaaS Billing Cheat Sheet. This article was originally published on the ChartMogul blog on January 27, 2016.

[INST] Choosing the Right Billing System for Your SaaS Business [Updated for 2020] [/INST]

Billing is the lifeline of your subscription business. You could have hundreds or thousands of customers lined up wanting to buy from you, but without a way of collecting that cash, you’re out of luck. The trick about billing systems is that when they’re working correctly, you can forget they exist. The best billing system for you works seamlessly so that you can focus your efforts elsewhere. However, if they start to cause issues, the faults will grow to a massive scale. Lost income, frustrated customers, and your reputation down the drain are some of the genuine consequences to lousy billing. The importance of a billing system shouldn’t scare you, though. Instead, view this as an opportunity to make an informed decision that will positively benefit you for years to come. In this guide, we’re going to teach you what you need to know about SaaS billing systems and how to choose them. By the end, you’ll be armed with the questions and considerations required to make selecting the right billing system for your SaaS much easier. Why is billing critical for my business? Billing is the middle man between your customer’s accounts and your bottom line, that much is obvious. How exactly could a billing system make or break your company, though? It all comes down to fit, ease, and flexibility. First, your billing system needs to fit your product’s needs. For example, a SaaS product with different tiers needs a billing system that can accommodate these different options. It also needs to be able to handle movement between these tiers, as well as monthly vs. annual billing. If your billing system can’t manage that, the customer experience will be frustrating, and you’ll be limited in experimenting with pricing. Next, your billing system should make transactions as easy as possible for both you and your customers. Difficult to navigate billing will stop prospective users in their tracks and potentially make your company seem untrustworthy. Plus, a redundant workflow or lack of data and reporting would make it difficult for you to work efficiently and spot issues. Finally, you need a billing system that offers flexibility. While you can’t foresee the entire future of your company, you do need a billing system that can grow and evolve with you. Having to switch providers down the line is a large undertaking. You also need flexibility in integrations. Using multiple providers for different purposes is pretty standard, and having systems that don’t play nice together is disruptive. The three types of billing systems you’ll need We’ve talked about how important this somewhat abstract concept of a “billing system” is, but now it’s time for details. The SaaS billing process has a few steps and necessary tools. First, let’s start with the billing systems. Subscription management platform (optional) If you’re handling customer subscriptions, then subscription management platforms will manage a lot of the heavy lifting and logic around pricing tiers, discounts, upgrades, downgrades, etc. A subscription management platform can effectively drive a lot of the pricing model of your product – before we even get to the payment transaction. This is an optional tool, and examples include Chargebee, Invoiced, and Recurly. Payment gateway The gateway is the system that securely transmits transaction data to merchant banks and receives responses from issuing banks. Essentially, it tells the customer’s bank how much it needs to send. Payment gateways you’ve likely encountered include PayPal, Stripe, and Amazon Pay. Merchant account You’ll always need a merchant account to receive online payments as a business, but some of the billing systems include a “built-in” version. For example, Stripe is both a payment gateway and a merchant account. Others may require you to plug in an external account. How do these three systems work together? We’ve simplified SaaS billing in the graphic below. Let’s say, for example, a customer decides to upgrade to a paid Pro plan. They click the beautiful “Upgrade Now” button on your website, which sets in motion a conversation between your application and server. Your application and server work together to determine what plan the customer is on now, and which they’d like to upgrade to. This information is then passed on to the subscription management platform, which calculates what the total cost is. This total is passed on to the payment gateway, which gets the money from the customer’s bank. Finally, the merchant account passes the payment to your business. Does every SaaS transaction need all of those tools? Well, no. A subscription management platform is optional, which means you only need a payment gateway and a merchant account to get started. Some gateways are set up as both payment gateways and merchant accounts in one. If not, they’ll likely offer integrations with other 3rd-party products. In-house vs. 3rd-party billing There’s another vital detail about SaaS billing that we haven’t covered yet: you don’t need an external solution. There are many SaaS businesses out there with custom-built in-house billing systems driving their back end. As with any business decisions, choosing a 3rd-party or in-house solution comes with pros and cons. In-house billing systems If you want maximum control and customization over your billing system, then an in-house solution is probably tempting. Building from scratch takes time, so this route is better suited for bigger companies that can commit resources to get the system just right. Pros: Fully customizable to your product, payment tiers, promotions, and more After the initial investment in building the system, there will be lower monthly or per-transaction costs Issues receive full, immediate attention since you’re the system’s only customer Cons: Require a lot of complex logic to handle payment transactions (i.e., you’ll need some great engineers and a lot of time) Still needs to interact with 3rd-party systems along the way, for card authorization, etc. May require a legal presence in each country in which you wish to do business Will require a significant ongoing investment in security. Your billing system will need to stay at the forefront of the latest Paymentech 3rd-party billing systems Opting for a pre-existing 3rd-party billing system is naturally less customizable. However, 3rd-party systems will always win in the “speed of integration” category. These tools are perfect for smaller teams or companies who want to have a working system up and running in a matter of hours. Pros: Handle nearly all of the complex logic associated with payments Take care of the legal side of transactions in multiple countries Usually maintains the highest possible level of security Support many one-click integrations with other platforms (analytics, accounting, etc.) Deliver a consistent payment experience for the end-user Cons: They’ll take a transaction-based fee, but there’s no upfront cost of building If you need a new feature, you’ll have to request it or find a new solution Less flexibility and control than an in-house system 5 questions to evaluate a billing system So you’ve decided to go with a 3rd-party option – great. But here comes the next dilemma: Which system should you choose out of all of the available products out there? Many of them have different characteristics and cover slightly different parts of the billing process. How to Evaluate a SaaS Billing System You need a payment gateway and merchant account, but subscription management platforms are optional. What part of the billing process does each system cover? Does it handle subscription billing and one-time payments? Does it operate in the country AND currencies you need? What are the setup, monthly, and transaction fees? Does it have features that matter to you, like analytics, mobile support, and integrations? Which parts of the billing process does it cover? Recall that there are three key SaaS billing systems, two of which are required. Do you want a comprehensive solution that covers most, if not all, of your process needs? Or are you content to mix and match services to cover the billing process? There’s no right answer, and it will depend on your preference. It’s also useful to consider what you need now vs. what you may need in the future. Your company today may not need a particular feature today, but if it’s a possibility in the future, you’ll want a system with appropriate integrations. Do they handle both subscription and one-time charges? This one’s fairly straightforward. If your business processes purely subscription-based charges, you can choose any of the specialized subscription billing systems available. However, if you also have some one-time charges such as setup costs, fees, etc. then you’ll need a system that supports this as well. In which countries and currencies do they operate? Country and currency support are two critical factors, but they’re definitely not the same thing. A billing system can support transactions in a particular country but not allow you to accept payments in the currency of that country. There are almost no payment gateways that support every country (except for PayPal), so do your research! Having said that, most will support the world’s major currencies. Remember: If in doubt, make sure you read the complete terms of the payment gateway you choose. What are the fees? For a billing system, fees come in several different categories, all of which could have an impact on your bottom line: Monthly fees: This is basically a SaaS subscription fee. You’re paying to use certain features, per-month (or per-year). Many billing systems don’t actually have a monthly fee. Setup fees: When opening a merchant account, or other financial services, you’ll often have to pay a one-time setup fee when you apply. Transaction fees: This is how most billing system businesses make their money — they take a small fee for each transaction you run through their system. This is usually a percentage of the transaction amount, sometimes combined with a fixed fee of a few cents. When you’re evaluating billing systems, think about your transaction volume. Compare solutions based on your average number of transactions a month, as well as average ticket prices. If you’re processing transactions over a certain (very large) volume, you’ll be able to negotiate fees (and discounts) with the billing system. Huge SaaS businesses don’t pay the fees you see on the pricing page! What features are important to you? Finally, you should consider the features that each system offers, particularly with regards to subscription management. Here are 6 categories of features that could be useful to you, depending on the features of your business: Handling of subscription tiers, discounts, and coupons: If you don’t have logic and systems in place to model and manage the different pricing tiers for your product, it’s possible to find subscription management products to do this for you. This is especially valuable if you have a complicated pricing model and multiple discounts or coupons in use. For example, Chargebee, Recurly, and Chargify all offer subscription management functionality. Analytics: You want to be able to view and understand the data associated with billing. Some billing systems have a basic level of built-in analytics. However, if you really want to understand customer churn, retention, and optimize your MRR, you should turn to a subscription data platform. Give it a try. Integrations: Besides analytics, billing systems can plug into a vast range of other platforms, depending on your desired functionality. For example, Stripe integrates with Intercom to allow you to communicate effectively with your customers. Make sure the billing solution you choose supports the systems you use in-house, and your experience will be much smoother in the long run. Mobile support: Depending on your product, mobile payments may or may not be a requirement for you. Many billing systems support different kinds of mobile experiences (some more customizable than others). A good example of this is Braintree’s extensive set of mobile integrations, supporting products like Apple Pay and Android Pay. Invoicing and tax handling: If you need to invoice your customers, the chances are that you can have your billing system take care of generating, and even sending invoices. Handling card failure: Credit card failure is a killer cause of churn in SaaS businesses. Some businesses have reported up to 50% of customer churn is attributed to failed card transactions, so choosing a billing system that can address this in some way could save you from a churn nightmare down the line. 5 SaaS billing system options in 2020 You didn’t think we were going to give you all of this SaaS billing system information and then send you out on your own to find a solution, did you? There are a ton of subscription management platforms, payment gateways, and merchant accounts to choose from, but let’s explore five. As a reminder, subscription management platforms are useful but optional. If you want to start with a lean billing system, all you need is a payment gateway and a merchant account. Chargebee Type: Subscription management platform (optional) Chargebee is a subscription management and billing platform that handles both one-time and recurring payments. They’re not a payment gateway, but they do integrate with gateways around the world. Chargebee offers pricing options in 100+ currencies and payment methods. Fees: Payments plans, billed annually or monthly, are based on annual revenue and start at $249 a month. Higher-tiered plans also come with more features, users, and priority support. Features: Pricing model flexibility Cart abandon recovery and dunning management Subscription metrics and analytics Recurly Type: Subscription management platform (optional) Recurly lets you set up one-time or recurring payments across a variety of payment methods, including credit card, ACH, PayPal, Apple Pay, and more. Just like Chargebee, Recurly has a global presence, though compatible payment gateways vary by location. Fees: Recurly doesn’t list pricing, but there are three tiers: core, professional, and elite. Plans have varying levels of analytics, integrations, and payment methods. Features: Machine-learning-powered “decline management” capabilities Analytics dashboard Add a second, backup gateway Chargify Type: Subscription management platform (optional) Chargify handles recurring payments, as well as one-time adjustments or charges. They connect with major payment gateways, and you’ll still need a merchant account. As with other subscription management platforms, available countries will vary based on your payment gateway. Fees: Chargify charges a monthly or annual subscription, along with a fee based on revenue. Their starter plan begins at $149 a month, and the mid-tier “Success” plan is $499 a month + 0.9% of revenue. Features: Send personalized offers Segment and experimental pricing Dunning notifications Stripe Type: Payment Gateway and Merchant Account Stripe is one of the leading online payment platforms, and for a good reason. It’s a payment gateway and a merchant account all in one, so you could theoretically set up your SaaS with Stripe alone. The service is available in 34 countries, so your business needs to be located in one of those in order to accept payments through Stripe. Fees: Stripe offers a pay-as-you-go pricing of 2.9% of card charge + 30 cents per transaction. They do have some country-specific rates and volume discounts, so it’s worth contacting sales if you have a special case. Features: Accept customer payments Receive payouts to your bank Many services, including subscription management platforms, integrate with Stripe Authorize.net Type: Payment Gateway with the option to add a Merchant Account Authorize.Net is a Visa-backed company that can be used as a payment gateway only or a combination of a payment gateway and merchant account. Your business can accept international payments with Authorize.Net, but you do need to be based in the U.S., Canada, UK, Europe, or Australia. Fees: There will be a monthly and per-transaction fee, whether you choose payment gateway only or an all-in-one solution. Using Authorize.Net as a payment gateway costs $25 a month plus 10 cents per transaction and a 10 cent daily batch fee. If you want to use one system for billing, Authorize.Net is $25 a month plus 2.9% + 30 cents per transaction. Features: Option to use a different Merchant Account or use Authorize.Net for all payment needs Accept 10 payment types, including Visa, PayPal, or E-Check How to pick the best billing system for 2020 and beyond Finding the right billing system for your SaaS is a tricky business. You need to weigh both your current needs, as well as what you might need in the future. Choosing a billing system that works out of tune with your pricing model or needs can lead to lost income and frustrated customers. Plus, switching billing systems down the line requires planning and careful coordination. Since billing systems are essential, you need to take your time to compare and contrast. Consider things like which countries you need to be able to accept features from and whether you’ll need one-time payments on top of subscription billing. The fewer billing systems you use, the less you’ll pay out monthly or per-transaction. However, it’s common to use multiple services together. Just make sure that your payment gateway and subscription management platform integrate before committing to either. Want an easy way to keep all of this information top of mind as you choose a billing system? Check out our Ultimate SaaS Billing Cheat Sheet. This article was originally published on the ChartMogul blog on January 27, 2016.

<sys> [INST] Choosing the Right Billing System for Your SaaS Business [Updated for 2020] [/INST] Billing is the lifeline of your subscription business. You could have hundreds or thousands of customers lined up wanting to buy from you, but without a way of collecting that cash, you’re out of luck. The trick about billing systems is that when they’re working correctly, you can forget they exist. The best billing system for you works seamlessly so that you can focus your efforts elsewhere. However, if they start to cause issues, the faults will grow to a massive scale. Lost income, frustrated customers, and your reputation down the drain are some of the genuine consequences to lousy billing. The importance of a billing system shouldn’t scare you, though. Instead, view this as an opportunity to make an informed decision that will positively benefit you for years to come. In this guide, we’re going to teach you what you need to know about SaaS billing systems and how to choose them. By the end, you’ll be armed with the questions and considerations required to make selecting the right billing system for your SaaS much easier. Why is billing critical for my business? Billing is the middle man between your customer’s accounts and your bottom line, that much is obvious. How exactly could a billing system make or break your company, though? It all comes down to fit, ease, and flexibility. First, your billing system needs to fit your product’s needs. For example, a SaaS product with different tiers needs a billing system that can accommodate these different options. It also needs to be able to handle movement between these tiers, as well as monthly vs. annual billing. If your billing system can’t manage that, the customer experience will be frustrating, and you’ll be limited in experimenting with pricing. Next, your billing system should make transactions as easy as possible for both you and your customers. Difficult to navigate billing will stop prospective users in their tracks and potentially make your company seem untrustworthy. Plus, a redundant workflow or lack of data and reporting would make it difficult for you to work efficiently and spot issues. Finally, you need a billing system that offers flexibility. While you can’t foresee the entire future of your company, you do need a billing system that can grow and evolve with you. Having to switch providers down the line is a large undertaking. You also need flexibility in integrations. Using multiple providers for different purposes is pretty standard, and having systems that don’t play nice together is disruptive. The three types of billing systems you’ll need We’ve talked about how important this somewhat abstract concept of a “billing system” is, but now it’s time for details. The SaaS billing process has a few steps and necessary tools. First, let’s start with the billing systems. Subscription management platform (optional) If you’re handling customer subscriptions, then subscription management platforms will manage a lot of the heavy lifting and logic around pricing tiers, discounts, upgrades, downgrades, etc. A subscription management platform can effectively drive a lot of the pricing model of your product – before we even get to the payment transaction. This is an optional tool, and examples include Chargebee, Invoiced, and Recurly. Payment gateway The gateway is the system that securely transmits transaction data to merchant banks and receives responses from issuing banks. Essentially, it tells the customer’s bank how much it needs to send. Payment gateways you’ve likely encountered include PayPal, Stripe, and Amazon Pay. Merchant account You’ll always need a merchant account to receive online payments as a business, but some of the billing systems include a “built-in” version. For example, Stripe is both a payment gateway and a merchant account. Others may require you to plug in an external account. How do these three systems work together? We’ve simplified SaaS billing in the graphic below. Let’s say, for example, a customer decides to upgrade to a paid Pro plan. They click the beautiful “Upgrade Now” button on your website, which sets in motion a conversation between your application and server. Your application and server work together to determine what plan the customer is on now, and which they’d like to upgrade to. This information is then passed on to the subscription management platform, which calculates what the total cost is. This total is passed on to the payment gateway, which gets the money from the customer’s bank. Finally, the merchant account passes the payment to your business. Does every SaaS transaction need all of those tools? Well, no. A subscription management platform is optional, which means you only need a payment gateway and a merchant account to get started. Some gateways are set up as both payment gateways and merchant accounts in one. If not, they’ll likely offer integrations with other 3rd-party products. In-house vs. 3rd-party billing There’s another vital detail about SaaS billing that we haven’t covered yet: you don’t need an external solution. There are many SaaS businesses out there with custom-built in-house billing systems driving their back end. As with any business decisions, choosing a 3rd-party or in-house solution comes with pros and cons. In-house billing systems If you want maximum control and customization over your billing system, then an in-house solution is probably tempting. Building from scratch takes time, so this route is better suited for bigger companies that can commit resources to get the system just right. Pros: Fully customizable to your product, payment tiers, promotions, and more After the initial investment in building the system, there will be lower monthly or per-transaction costs Issues receive full, immediate attention since you’re the system’s only customer Cons: Require a lot of complex logic to handle payment transactions (i.e., you’ll need some great engineers and a lot of time) Still needs to interact with 3rd-party systems along the way, for card authorization, etc. May require a legal presence in each country in which you wish to do business Will require a significant ongoing investment in security. Your billing system will need to stay at the forefront of the latest Paymentech 3rd-party billing systems Opting for a pre-existing 3rd-party billing system is naturally less customizable. However, 3rd-party systems will always win in the “speed of integration” category. These tools are perfect for smaller teams or companies who want to have a working system up and running in a matter of hours. Pros: Handle nearly all of the complex logic associated with payments Take care of the legal side of transactions in multiple countries Usually maintains the highest possible level of security Support many one-click integrations with other platforms (analytics, accounting, etc.) Deliver a consistent payment experience for the end-user Cons: They’ll take a transaction-based fee, but there’s no upfront cost of building If you need a new feature, you’ll have to request it or find a new solution Less flexibility and control than an in-house system 5 questions to evaluate a billing system So you’ve decided to go with a 3rd-party option – great. But here comes the next dilemma: Which system should you choose out of all of the available products out there? Many of them have different characteristics and cover slightly different parts of the billing process. How to Evaluate a SaaS Billing System You need a payment gateway and merchant account, but subscription management platforms are optional. What part of the billing process does each system cover? Does it handle subscription billing and one-time payments? Does it operate in the country AND currencies you need? What are the setup, monthly, and transaction fees? Does it have features that matter to you, like analytics, mobile support, and integrations? Which parts of the billing process does it cover? Recall that there are three key SaaS billing systems, two of which are required. Do you want a comprehensive solution that covers most, if not all, of your process needs? Or are you content to mix and match services to cover the billing process? There’s no right answer, and it will depend on your preference. It’s also useful to consider what you need now vs. what you may need in the future. Your company today may not need a particular feature today, but if it’s a possibility in the future, you’ll want a system with appropriate integrations. Do they handle both subscription and one-time charges? This one’s fairly straightforward. If your business processes purely subscription-based charges, you can choose any of the specialized subscription billing systems available. However, if you also have some one-time charges such as setup costs, fees, etc. then you’ll need a system that supports this as well. In which countries and currencies do they operate? Country and currency support are two critical factors, but they’re definitely not the same thing. A billing system can support transactions in a particular country but not allow you to accept payments in the currency of that country. There are almost no payment gateways that support every country (except for PayPal), so do your research! Having said that, most will support the world’s major currencies. Remember: If in doubt, make sure you read the complete terms of the payment gateway you choose. What are the fees? For a billing system, fees come in several different categories, all of which could have an impact on your bottom line: Monthly fees: This is basically a SaaS subscription fee. You’re paying to use certain features, per-month (or per-year). Many billing systems don’t actually have a monthly fee. Setup fees: When opening a merchant account, or other financial services, you’ll often have to pay a one-time setup fee when you apply. Transaction fees: This is how most billing system businesses make their money — they take a small fee for each transaction you run through their system. This is usually a percentage of the transaction amount, sometimes combined with a fixed fee of a few cents. When you’re evaluating billing systems, think about your transaction volume. Compare solutions based on your average number of transactions a month, as well as average ticket prices. If you’re processing transactions over a certain (very large) volume, you’ll be able to negotiate fees (and discounts) with the billing system. Huge SaaS businesses don’t pay the fees you see on the pricing page! What features are important to you? Finally, you should consider the features that each system offers, particularly with regards to subscription management. Here are 6 categories of features that could be useful to you, depending on the features of your business: Handling of subscription tiers, discounts, and coupons: If you don’t have logic and systems in place to model and manage the different pricing tiers for your product, it’s possible to find subscription management products to do this for you. This is especially valuable if you have a complicated pricing model and multiple discounts or coupons in use. For example, Chargebee, Recurly, and Chargify all offer subscription management functionality. Analytics: You want to be able to view and understand the data associated with billing. Some billing systems have a basic level of built-in analytics. However, if you really want to understand customer churn, retention, and optimize your MRR, you should turn to a subscription data platform. Give it a try. Integrations: Besides analytics, billing systems can plug into a vast range of other platforms, depending on your desired functionality. For example, Stripe integrates with Intercom to allow you to communicate effectively with your customers. Make sure the billing solution you choose supports the systems you use in-house, and your experience will be much smoother in the long run. Mobile support: Depending on your product, mobile payments may or may not be a requirement for you. Many billing systems support different kinds of mobile experiences (some more customizable than others). A good example of this is Braintree’s extensive set of mobile integrations, supporting products like Apple Pay and Android Pay. Invoicing and tax handling: If you need to invoice your customers, the chances are that you can have your billing system take care of generating, and even sending invoices. Handling card failure: Credit card failure is a killer cause of churn in SaaS businesses. Some businesses have reported up to 50% of customer churn is attributed to failed card transactions, so choosing a billing system that can address this in some way could save you from a churn nightmare down the line. 5 SaaS billing system options in 2020 You didn’t think we were going to give you all of this SaaS billing system information and then send you out on your own to find a solution, did you? There are a ton of subscription management platforms, payment gateways, and merchant accounts to choose from, but let’s explore five. As a reminder, subscription management platforms are useful but optional. If you want to start with a lean billing system, all you need is a payment gateway and a merchant account. Chargebee Type: Subscription management platform (optional) Chargebee is a subscription management and billing platform that handles both one-time and recurring payments. They’re not a payment gateway, but they do integrate with gateways around the world. Chargebee offers pricing options in 100+ currencies and payment methods. Fees: Payments plans, billed annually or monthly, are based on annual revenue and start at $249 a month. Higher-tiered plans also come with more features, users, and priority support. Features: Pricing model flexibility Cart abandon recovery and dunning management Subscription metrics and analytics Recurly Type: Subscription management platform (optional) Recurly lets you set up one-time or recurring payments across a variety of payment methods, including credit card, ACH, PayPal, Apple Pay, and more. Just like Chargebee, Recurly has a global presence, though compatible payment gateways vary by location. Fees: Recurly doesn’t list pricing, but there are three tiers: core, professional, and elite. Plans have varying levels of analytics, integrations, and payment methods. Features: Machine-learning-powered “decline management” capabilities Analytics dashboard Add a second, backup gateway Chargify Type: Subscription management platform (optional) Chargify handles recurring payments, as well as one-time adjustments or charges. They connect with major payment gateways, and you’ll still need a merchant account. As with other subscription management platforms, available countries will vary based on your payment gateway. Fees: Chargify charges a monthly or annual subscription, along with a fee based on revenue. Their starter plan begins at $149 a month, and the mid-tier “Success” plan is $499 a month + 0.9% of revenue. Features: Send personalized offers Segment and experimental pricing Dunning notifications Stripe Type: Payment Gateway and Merchant Account Stripe is one of the leading online payment platforms, and for a good reason. It’s a payment gateway and a merchant account all in one, so you could theoretically set up your SaaS with Stripe alone. The service is available in 34 countries, so your business needs to be located in one of those in order to accept payments through Stripe. Fees: Stripe offers a pay-as-you-go pricing of 2.9% of card charge + 30 cents per transaction. They do have some country-specific rates and volume discounts, so it’s worth contacting sales if you have a special case. Features: Accept customer payments Receive payouts to your bank Many services, including subscription management platforms, integrate with Stripe Authorize.net Type: Payment Gateway with the option to add a Merchant Account Authorize.Net is a Visa-backed company that can be used as a payment gateway only or a combination of a payment gateway and merchant account. Your business can accept international payments with Authorize.Net, but you do need to be based in the U.S., Canada, UK, Europe, or Australia. Fees: There will be a monthly and per-transaction fee, whether you choose payment gateway only or an all-in-one solution. Using Authorize.Net as a payment gateway costs $25 a month plus 10 cents per transaction and a 10 cent daily batch fee. If you want to use one system for billing, Authorize.Net is $25 a month plus 2.9% + 30 cents per transaction. Features: Option to use a different Merchant Account or use Authorize.Net for all payment needs Accept 10 payment types, including Visa, PayPal, or E-Check How to pick the best billing system for 2020 and beyond Finding the right billing system for your SaaS is a tricky business. You need to weigh both your current needs, as well as what you might need in the future. Choosing a billing system that works out of tune with your pricing model or needs can lead to lost income and frustrated customers. Plus, switching billing systems down the line requires planning and careful coordination. Since billing systems are essential, you need to take your time to compare and contrast. Consider things like which countries you need to be able to accept features from and whether you’ll need one-time payments on top of subscription billing. The fewer billing systems you use, the less you’ll pay out monthly or per-transaction. However, it’s common to use multiple services together. Just make sure that your payment gateway and subscription management platform integrate before committing to either. Want an easy way to keep all of this information top of mind as you choose a billing system? Check out our Ultimate SaaS Billing Cheat Sheet. This article was originally published on the ChartMogul blog on January 27, 2016. </sys

Popmenu Secures Product Market Fit Pre-COVID, Growth Soars. Next up on the SaaS Open Mic Podcast is Brendan Sweeney, CEO and Co-Founder of Popmenu, a restaurant technology company. Popmenu’s SaaS offering helps restaurants attract, delight, and retain regulars at a time when big tech food delivery services are crushing food favorites. Their product helps restauranteurs showcase their inventory, their creativity, the quality of ingredients, their plating with easy-to-use, compelling tech. They’ve seen impressive growth since the pandemic hit and investors are raving. And importantly, they are turning this growth and their learnings into value for their restaurant businesses globally. Before COVID, the number one reason people didn’t buy from us is inertia. But now evaluating and adopting new technology is less intimidating to industries that have traditionally – for one reason or another – not been cloud first. Brendan Sweeney In our interview, I drool over the idea of eating again in restaurants, while Brendan shares insights on topics like: Why restaurants need a more compelling tool than PDFs to present offerings The beloved topic of finding product market fit Brendan’s take on how to design features for your customers The adoption SaaS and the buying habits of buyers in new and different industries How to help small businesses take back control from big platforms Here’s the episode:

[INST] Popmenu Secures Product Market Fit Pre-COVID, Growth Soars [/INST]

Next up on the SaaS Open Mic Podcast is Brendan Sweeney, CEO and Co-Founder of Popmenu, a restaurant technology company. Popmenu’s SaaS offering helps restaurants attract, delight, and retain regulars at a time when big tech food delivery services are crushing food favorites. Their product helps restauranteurs showcase their inventory, their creativity, the quality of ingredients, their plating with easy-to-use, compelling tech. They’ve seen impressive growth since the pandemic hit and investors are raving. And importantly, they are turning this growth and their learnings into value for their restaurant businesses globally. Before COVID, the number one reason people didn’t buy from us is inertia. But now evaluating and adopting new technology is less intimidating to industries that have traditionally – for one reason or another – not been cloud first. Brendan Sweeney In our interview, I drool over the idea of eating again in restaurants, while Brendan shares insights on topics like: Why restaurants need a more compelling tool than PDFs to present offerings The beloved topic of finding product market fit Brendan’s take on how to design features for your customers The adoption SaaS and the buying habits of buyers in new and different industries How to help small businesses take back control from big platforms Here’s the episode:

<sys> [INST] Popmenu Secures Product Market Fit Pre-COVID, Growth Soars [/INST] Next up on the SaaS Open Mic Podcast is Brendan Sweeney, CEO and Co-Founder of Popmenu, a restaurant technology company. Popmenu’s SaaS offering helps restaurants attract, delight, and retain regulars at a time when big tech food delivery services are crushing food favorites. Their product helps restauranteurs showcase their inventory, their creativity, the quality of ingredients, their plating with easy-to-use, compelling tech. They’ve seen impressive growth since the pandemic hit and investors are raving. And importantly, they are turning this growth and their learnings into value for their restaurant businesses globally. Before COVID, the number one reason people didn’t buy from us is inertia. But now evaluating and adopting new technology is less intimidating to industries that have traditionally – for one reason or another – not been cloud first. Brendan Sweeney In our interview, I drool over the idea of eating again in restaurants, while Brendan shares insights on topics like: Why restaurants need a more compelling tool than PDFs to present offerings The beloved topic of finding product market fit Brendan’s take on how to design features for your customers The adoption SaaS and the buying habits of buyers in new and different industries How to help small businesses take back control from big platforms Here’s the episode: </sys

Improving customer feedback in SaaS with Canny. “When you’re a team of two, you have to really be critical about what you decide to prioritize. It creates a lot more responsibility and you have to support such a feature further down the line.” We all know that SaaS companies should be collecting customer feedback. But how you should actually manage, process, quantify, categorize and action that feedback data is far from simple. Especially when you’re operating at scale. For this topic I reached out to two entrepreneurs who are building a company around this — it’s called Canny. “As a user, it always felt like companies didn’t care. There was either no way to give feedback at all or it was a simple email form…After working on this…it turns out they do care — Product managers would love to have this data when they’re making product decisions.” Co-Founders Sarah and Andrew left their jobs at Facebook to bootstrap Canny as a SaaS business, because they believe there was a better way to handle customer feedback and feature requests. I’m really happy that I could pick their brains on a lot of best practices for making feedback more valuable within a business. Canny founders Sarah Hum and Andrew Rasmussen Topics covered Just some of the questions I asked Sarah and Andrew: What are businesses doing wrong with feedback? How can we make feedback more actionable? How do you balance company vision with requested features? What about feature requests that have revenue attached to them? How do you make feedback an ongoing conversation? Is Net Promoter Score (NPS) useful? Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you!

[INST] Improving customer feedback in SaaS with Canny [/INST]

“When you’re a team of two, you have to really be critical about what you decide to prioritize. It creates a lot more responsibility and you have to support such a feature further down the line.” We all know that SaaS companies should be collecting customer feedback. But how you should actually manage, process, quantify, categorize and action that feedback data is far from simple. Especially when you’re operating at scale. For this topic I reached out to two entrepreneurs who are building a company around this — it’s called Canny. “As a user, it always felt like companies didn’t care. There was either no way to give feedback at all or it was a simple email form…After working on this…it turns out they do care — Product managers would love to have this data when they’re making product decisions.” Co-Founders Sarah and Andrew left their jobs at Facebook to bootstrap Canny as a SaaS business, because they believe there was a better way to handle customer feedback and feature requests. I’m really happy that I could pick their brains on a lot of best practices for making feedback more valuable within a business. Canny founders Sarah Hum and Andrew Rasmussen Topics covered Just some of the questions I asked Sarah and Andrew: What are businesses doing wrong with feedback? How can we make feedback more actionable? How do you balance company vision with requested features? What about feature requests that have revenue attached to them? How do you make feedback an ongoing conversation? Is Net Promoter Score (NPS) useful? Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you!

<sys> [INST] Improving customer feedback in SaaS with Canny [/INST] “When you’re a team of two, you have to really be critical about what you decide to prioritize. It creates a lot more responsibility and you have to support such a feature further down the line.” We all know that SaaS companies should be collecting customer feedback. But how you should actually manage, process, quantify, categorize and action that feedback data is far from simple. Especially when you’re operating at scale. For this topic I reached out to two entrepreneurs who are building a company around this — it’s called Canny. “As a user, it always felt like companies didn’t care. There was either no way to give feedback at all or it was a simple email form…After working on this…it turns out they do care — Product managers would love to have this data when they’re making product decisions.” Co-Founders Sarah and Andrew left their jobs at Facebook to bootstrap Canny as a SaaS business, because they believe there was a better way to handle customer feedback and feature requests. I’m really happy that I could pick their brains on a lot of best practices for making feedback more valuable within a business. Canny founders Sarah Hum and Andrew Rasmussen Topics covered Just some of the questions I asked Sarah and Andrew: What are businesses doing wrong with feedback? How can we make feedback more actionable? How do you balance company vision with requested features? What about feature requests that have revenue attached to them? How do you make feedback an ongoing conversation? Is Net Promoter Score (NPS) useful? Listen to the episode Enjoying SaaS Open Mic? Please take a moment to review the podcast on iTunes – it’d really help us reach a wider audience. Thank you! </sys

Announcing our integration with Visible. Easily add your SaaS metrics to Visible.vc reports Today, we’re excited to announce a partnership between Visible and ChartMogul! The metrics calculated and shown in ChartMogul are often the exact data you need to communicate to investors and stakeholders. Whether MRR, Churn Rate, LTV or anything else — with today’s launch, you’ll be able to quickly get the metrics you need into your Visibile.vc reports. You can even schedule automated reports to send when you need them, and track stakeholder engagement with each update you send out. About Visible Visible (visible.vc) allows you to take control of stakeholder updates for your business. For anyone who needs to keep their investors or other stakeholders informed, you’ll know that doing so in a consistent, effective manner is not the easiest task. Investors want just the critical information, delivered in a timely manner, communicated clearly and in a form that’s digestible. Visible solves this, allowing anyone to connect their data, create beautiful updates, and start engaging stakeholders. Visible lets you create simple, beautiful investor reports. (source: visible.vc) How to connect ChartMogul to Visible If you have a Visible account and a ChartMogul account (if you don’t, start a trial!), then make sure you check out the help article here which will walk you through connecting your accounts. Hint: You’ll need your ChartMogul API keys. If you have any comments or suggestions, you can contact the Visible team at [email protected].

[INST] Announcing our integration with Visible [/INST]

Easily add your SaaS metrics to Visible.vc reports Today, we’re excited to announce a partnership between Visible and ChartMogul! The metrics calculated and shown in ChartMogul are often the exact data you need to communicate to investors and stakeholders. Whether MRR, Churn Rate, LTV or anything else — with today’s launch, you’ll be able to quickly get the metrics you need into your Visibile.vc reports. You can even schedule automated reports to send when you need them, and track stakeholder engagement with each update you send out. About Visible Visible (visible.vc) allows you to take control of stakeholder updates for your business. For anyone who needs to keep their investors or other stakeholders informed, you’ll know that doing so in a consistent, effective manner is not the easiest task. Investors want just the critical information, delivered in a timely manner, communicated clearly and in a form that’s digestible. Visible solves this, allowing anyone to connect their data, create beautiful updates, and start engaging stakeholders. Visible lets you create simple, beautiful investor reports. (source: visible.vc) How to connect ChartMogul to Visible If you have a Visible account and a ChartMogul account (if you don’t, start a trial!), then make sure you check out the help article here which will walk you through connecting your accounts. Hint: You’ll need your ChartMogul API keys. If you have any comments or suggestions, you can contact the Visible team at [email protected].

<sys> [INST] Announcing our integration with Visible [/INST] Easily add your SaaS metrics to Visible.vc reports Today, we’re excited to announce a partnership between Visible and ChartMogul! The metrics calculated and shown in ChartMogul are often the exact data you need to communicate to investors and stakeholders. Whether MRR, Churn Rate, LTV or anything else — with today’s launch, you’ll be able to quickly get the metrics you need into your Visibile.vc reports. You can even schedule automated reports to send when you need them, and track stakeholder engagement with each update you send out. About Visible Visible (visible.vc) allows you to take control of stakeholder updates for your business. For anyone who needs to keep their investors or other stakeholders informed, you’ll know that doing so in a consistent, effective manner is not the easiest task. Investors want just the critical information, delivered in a timely manner, communicated clearly and in a form that’s digestible. Visible solves this, allowing anyone to connect their data, create beautiful updates, and start engaging stakeholders. Visible lets you create simple, beautiful investor reports. (source: visible.vc) How to connect ChartMogul to Visible If you have a Visible account and a ChartMogul account (if you don’t, start a trial!), then make sure you check out the help article here which will walk you through connecting your accounts. Hint: You’ll need your ChartMogul API keys. If you have any comments or suggestions, you can contact the Visible team at [email protected]. </sys

How We Run Finance & Operations with Two People at ChartMogul. Finance & Operations. Exciting, right? The first thing that comes to mind when you think of a SaaS business? Probably not. Yet, people lie at the heart of every software company, so taking good care of them is imperative for every SaaS business that wants to succeed. With just 2 dedicated people on the Finance and Ops team at ChartMogul, we have to be careful with our resources and make sure we don’t get spread too thin. For us the software we use is the keystone that allows us to scale what we do. In this post, I want to share with you our favorite tools and how they allow us to run ChartMogul better. But before I get into that, here are a few details about our team. The Finance & Operations Team at ChartMogul Olga Evsenko Olga is maybe the archetypal international ChartMogul employee — originally from Russia, she spent an exchange year in Berlin during her studies in Economics and Finance. After that, she supported multiple non-profits in the US on the finance side for multiple years before returning to Berlin. She’s been with ChartMogul for almost a year now and has helped us a lot to improve & document our reporting and other processes. Martin Raißle I (Martin) also felt the urge to return to Germany, but that’s because it’s home for me. After completing my studies in Industrial Engineering, I had a 3-year stint in the Middle East to gain practical exposure to the Finance side of things. While I enjoyed crunching the numbers, I realized I wasn’t made for working in a corporate environment or living in the desert. So I returned to Europe in 2016 and joined ChartMogul in the same year. Since then I’ve been in charge of fast and accurate reporting, regulatory compliance, and all the other small things that make sure everyone else can do their job. And now to the tools we use to give superpowers to our small team! Excel Excel is still the powerhouse in this category. Unsurprisingly, it is also at the top of my list. Finance teams all over the world use it for everything from A as in Attainment Reporting, to O as in OPEX Planning to Z as in … avoiding Zero-sum games, I guess? The OPEX template we use This is also true for us at ChartMogul. With its immense flexibility and power, Microsoft Excel is the draft horse of pretty much anything we do that deals with large amounts of numbers. PivotTables easily handle hundreds of thousands of lines to derive — often very specific — insight. For our regular reports, we do have templates and macros prepared that help us stem the monthly workload. For everything else… there’s ChartMogul. ChartMogul Of course, we’re also using our own product! With all our revenue data captured in ChartMogul, the data it holds is the foundation for many of the reports our team produces regularly and on an ad-hoc basis. At the very beginning of the month, we do high-level investor reporting. Not all the metrics covered in this report come from ChartMogul — there are better options to keep track of your OPEX, hiring plan, the engineering roadmap, etc. However, the core figures that every SaaS investor cares about come straight from our tool: How did our MRR develop and how do we track against the plan? A bit later in the month, we prepare a revenue report for tax purposes. This is based not on MRR, but GAAP revenues. Luckily, ChartMogul also offers Revenue Recognition functionality. Its detailed export allows us to send separate lists for issued invoices, received payments and deferred revenue to our accountants. The recognized revenue report makes it easy to prepare accounting documents From the very same report, we derive our VAT reporting. As a business based in Europe, we need to differentiate between customers in our home country, those in the EU VAT area, and those in the rest of the world. Thanks to the filters available in ChartMogul, this is done easily. Finally, when it comes time to do payroll, we prepare the sales attainment report for our account executives. We cannot get a ready-made report out of ChartMogul for that (yet) — our commission rules are a bit too specific for that. However, the combination of Zapier (which automatically assigns accounts in ChartMogul to account executives based on data from our CRM tool Close), detailed exports for MRR movements in any given month and existing customers, and a custom-made Excel template allow us to calculate everyone’s achievement in a breeze. These two tools were kind of expected given one is the foundation of every Finance team and the other is our own product. There are, however, also a few tools that you might not have heard of — but that have proven to be very valuable for us. Spendesk How many credit cards does your company have? How many critical services are paid through the same card, that is also used for non-essential purposes that carry a higher risk of fraud? How often did you have to update the credit card details in the 20+ SaaS solutions that you use? How much time do you spend trying to find out who made that purchase on the credit card? Unless you are already a quite mature company, the answers are probably: not enough, too many, too often, and too much. Spendesk is here to ease your pain. There are two parts to it: We started with the digital-only part, with which you can generate virtual credit cards that are only used for a single transaction or subscription. Whoever needs to make a purchase just files a request that will go through a flexible approval flow and — once approved — lead to the creation of a prepaid MasterCard funded from your Spendesk wallet. This way, you don’t need to share physical cards or use the same card for multiple services. Also, because each card is tied to a requester, you know who to hunt down if the receipt is missing (Spendesk actually does that itself already). The second bit is physical prepaid cards that you can hand out to employees, especially those who travel often or otherwise regularly spend money offline. The workflow is similar — you can either assign a monthly budget (similar to a subscription) or the employee can request one-off top-ups. A mobile app prompts users to upload a photo of the receipt and automatically matches it to the corresponding transaction. In both cases, you can easily track how much of the budget is used already and all subscription cards will be topped up at the beginning of the month from your Spendesk wallet — which you can fund through a bank transfer. The best bit: Spendesk does support cards denominated in different currencies — so that we can generate USD cards, fund them with the Dollars that we get paid in, and save the FX fees along the way. HelloSign Not all the tools we use are about numbers though! Some are about letters, or whatever you call these illegible scribbles that some people use to conclude contracts. HelloSign moves this solution into the digital world at a very affordable price and with a very user-friendly interface. Most of our utilization falls into one of three use cases: Employment & freelancer contracts: A fast process is crucial to hiring the best talent, and a great e-signing solution helps to speed up the signature process a lot. Keep in mind that some jurisdictions have limitations in place about what can be agreed without wet ink signatures. Service Orders: What is true for hiring is just as true for the sales process. Bigger customers often want to negotiate specific terms — we accommodate this request by offering them to sign service orders. Once the terms are agreed, e-signing helps to formalize everything quickly so that the customer can get access to ChartMogul as soon as possible. Data Protection Agreements and other templates: What I really like about HelloSign is its option to create templates for documents that are regularly signed by different parties but are essentially the same for everyone. Once you upload a document template and place the fields that the other party has to fill, you will be provided with a link that you can send directly to customers or employees. Whenever somebody signs a template, both of you will be provided with a copy of the executed agreement via email and HelloSign will also keep a copy for you. TravelPerk Another solution to enable our employees to self-service typical problems without giving up control is TravelPerk. As the name suggests, this is about business travel. While our employees do not travel that much, every now & then we do attend conferences or even host our own customer meetups. While Spendesk makes sure you know who to bug for the invoice, TravelPerk makes it even easier by providing a central billing system that automatically sends the invoice to your accounting system. Here as well you can define flexible approval flows & travel policies that reduce interaction to a minimum. This ensures that employees can book trains, flights, hotels, and even Airbnbs themselves, without the risk of travel spend overrunning the allocated budget. Currently, hotel selection seems to be a bit limited in some cities. However, TravelPerk will allow you to book accommodation that you find with other providers through its platform, so that all spend can be found here. Point9 & Alven Community Finally, there is something that — while not being a software tool — makes our work life much easier. Both Point9 and Alven, our two biggest investors, maintain Slack groups in which their portfolio companies can swap ideas and get input from others that might have had a similar problem. Being able to get some quick free feedback is incredibly valuable, especially on such topics that we’re not very familiar with ourselves — like which benefits are common in Canada vs. Germany, which external DPO other companies in Germany are using, or how to deal with certain HR topics. Both companies also regularly host events. Because Alven is based in Paris attending those is more difficult. Both ChartMogul and Point9 are based in Berlin though, so I recently attended the Point9 Portfolio CFO Meetup in which we discussed our current challenges and recent learnings. Scale your Finance & Ops department with the right tools Using smart software tools is a great opportunity to empower nimble teams to support a great SaaS team. The software and communities I shared above are what we use inside ChartMogul, but there are many more out there. I’d be curious to hear about your favorite tools in this category — reach out to us @chartmogul and let me know. Maybe I can even find something to add to our arsenal. If you want to learn more about the internal operations of our Finance & Ops team, check out this post from an interview I did with Quaderno.

[INST] How We Run Finance & Operations with Two People at ChartMogul [/INST]

Finance & Operations. Exciting, right? The first thing that comes to mind when you think of a SaaS business? Probably not. Yet, people lie at the heart of every software company, so taking good care of them is imperative for every SaaS business that wants to succeed. With just 2 dedicated people on the Finance and Ops team at ChartMogul, we have to be careful with our resources and make sure we don’t get spread too thin. For us the software we use is the keystone that allows us to scale what we do. In this post, I want to share with you our favorite tools and how they allow us to run ChartMogul better. But before I get into that, here are a few details about our team. The Finance & Operations Team at ChartMogul Olga Evsenko Olga is maybe the archetypal international ChartMogul employee — originally from Russia, she spent an exchange year in Berlin during her studies in Economics and Finance. After that, she supported multiple non-profits in the US on the finance side for multiple years before returning to Berlin. She’s been with ChartMogul for almost a year now and has helped us a lot to improve & document our reporting and other processes. Martin Raißle I (Martin) also felt the urge to return to Germany, but that’s because it’s home for me. After completing my studies in Industrial Engineering, I had a 3-year stint in the Middle East to gain practical exposure to the Finance side of things. While I enjoyed crunching the numbers, I realized I wasn’t made for working in a corporate environment or living in the desert. So I returned to Europe in 2016 and joined ChartMogul in the same year. Since then I’ve been in charge of fast and accurate reporting, regulatory compliance, and all the other small things that make sure everyone else can do their job. And now to the tools we use to give superpowers to our small team! Excel Excel is still the powerhouse in this category. Unsurprisingly, it is also at the top of my list. Finance teams all over the world use it for everything from A as in Attainment Reporting, to O as in OPEX Planning to Z as in … avoiding Zero-sum games, I guess? The OPEX template we use This is also true for us at ChartMogul. With its immense flexibility and power, Microsoft Excel is the draft horse of pretty much anything we do that deals with large amounts of numbers. PivotTables easily handle hundreds of thousands of lines to derive — often very specific — insight. For our regular reports, we do have templates and macros prepared that help us stem the monthly workload. For everything else… there’s ChartMogul. ChartMogul Of course, we’re also using our own product! With all our revenue data captured in ChartMogul, the data it holds is the foundation for many of the reports our team produces regularly and on an ad-hoc basis. At the very beginning of the month, we do high-level investor reporting. Not all the metrics covered in this report come from ChartMogul — there are better options to keep track of your OPEX, hiring plan, the engineering roadmap, etc. However, the core figures that every SaaS investor cares about come straight from our tool: How did our MRR develop and how do we track against the plan? A bit later in the month, we prepare a revenue report for tax purposes. This is based not on MRR, but GAAP revenues. Luckily, ChartMogul also offers Revenue Recognition functionality. Its detailed export allows us to send separate lists for issued invoices, received payments and deferred revenue to our accountants. The recognized revenue report makes it easy to prepare accounting documents From the very same report, we derive our VAT reporting. As a business based in Europe, we need to differentiate between customers in our home country, those in the EU VAT area, and those in the rest of the world. Thanks to the filters available in ChartMogul, this is done easily. Finally, when it comes time to do payroll, we prepare the sales attainment report for our account executives. We cannot get a ready-made report out of ChartMogul for that (yet) — our commission rules are a bit too specific for that. However, the combination of Zapier (which automatically assigns accounts in ChartMogul to account executives based on data from our CRM tool Close), detailed exports for MRR movements in any given month and existing customers, and a custom-made Excel template allow us to calculate everyone’s achievement in a breeze. These two tools were kind of expected given one is the foundation of every Finance team and the other is our own product. There are, however, also a few tools that you might not have heard of — but that have proven to be very valuable for us. Spendesk How many credit cards does your company have? How many critical services are paid through the same card, that is also used for non-essential purposes that carry a higher risk of fraud? How often did you have to update the credit card details in the 20+ SaaS solutions that you use? How much time do you spend trying to find out who made that purchase on the credit card? Unless you are already a quite mature company, the answers are probably: not enough, too many, too often, and too much. Spendesk is here to ease your pain. There are two parts to it: We started with the digital-only part, with which you can generate virtual credit cards that are only used for a single transaction or subscription. Whoever needs to make a purchase just files a request that will go through a flexible approval flow and — once approved — lead to the creation of a prepaid MasterCard funded from your Spendesk wallet. This way, you don’t need to share physical cards or use the same card for multiple services. Also, because each card is tied to a requester, you know who to hunt down if the receipt is missing (Spendesk actually does that itself already). The second bit is physical prepaid cards that you can hand out to employees, especially those who travel often or otherwise regularly spend money offline. The workflow is similar — you can either assign a monthly budget (similar to a subscription) or the employee can request one-off top-ups. A mobile app prompts users to upload a photo of the receipt and automatically matches it to the corresponding transaction. In both cases, you can easily track how much of the budget is used already and all subscription cards will be topped up at the beginning of the month from your Spendesk wallet — which you can fund through a bank transfer. The best bit: Spendesk does support cards denominated in different currencies — so that we can generate USD cards, fund them with the Dollars that we get paid in, and save the FX fees along the way. HelloSign Not all the tools we use are about numbers though! Some are about letters, or whatever you call these illegible scribbles that some people use to conclude contracts. HelloSign moves this solution into the digital world at a very affordable price and with a very user-friendly interface. Most of our utilization falls into one of three use cases: Employment & freelancer contracts: A fast process is crucial to hiring the best talent, and a great e-signing solution helps to speed up the signature process a lot. Keep in mind that some jurisdictions have limitations in place about what can be agreed without wet ink signatures. Service Orders: What is true for hiring is just as true for the sales process. Bigger customers often want to negotiate specific terms — we accommodate this request by offering them to sign service orders. Once the terms are agreed, e-signing helps to formalize everything quickly so that the customer can get access to ChartMogul as soon as possible. Data Protection Agreements and other templates: What I really like about HelloSign is its option to create templates for documents that are regularly signed by different parties but are essentially the same for everyone. Once you upload a document template and place the fields that the other party has to fill, you will be provided with a link that you can send directly to customers or employees. Whenever somebody signs a template, both of you will be provided with a copy of the executed agreement via email and HelloSign will also keep a copy for you. TravelPerk Another solution to enable our employees to self-service typical problems without giving up control is TravelPerk. As the name suggests, this is about business travel. While our employees do not travel that much, every now & then we do attend conferences or even host our own customer meetups. While Spendesk makes sure you know who to bug for the invoice, TravelPerk makes it even easier by providing a central billing system that automatically sends the invoice to your accounting system. Here as well you can define flexible approval flows & travel policies that reduce interaction to a minimum. This ensures that employees can book trains, flights, hotels, and even Airbnbs themselves, without the risk of travel spend overrunning the allocated budget. Currently, hotel selection seems to be a bit limited in some cities. However, TravelPerk will allow you to book accommodation that you find with other providers through its platform, so that all spend can be found here. Point9 & Alven Community Finally, there is something that — while not being a software tool — makes our work life much easier. Both Point9 and Alven, our two biggest investors, maintain Slack groups in which their portfolio companies can swap ideas and get input from others that might have had a similar problem. Being able to get some quick free feedback is incredibly valuable, especially on such topics that we’re not very familiar with ourselves — like which benefits are common in Canada vs. Germany, which external DPO other companies in Germany are using, or how to deal with certain HR topics. Both companies also regularly host events. Because Alven is based in Paris attending those is more difficult. Both ChartMogul and Point9 are based in Berlin though, so I recently attended the Point9 Portfolio CFO Meetup in which we discussed our current challenges and recent learnings. Scale your Finance & Ops department with the right tools Using smart software tools is a great opportunity to empower nimble teams to support a great SaaS team. The software and communities I shared above are what we use inside ChartMogul, but there are many more out there. I’d be curious to hear about your favorite tools in this category — reach out to us @chartmogul and let me know. Maybe I can even find something to add to our arsenal. If you want to learn more about the internal operations of our Finance & Ops team, check out this post from an interview I did with Quaderno.

<sys> [INST] How We Run Finance & Operations with Two People at ChartMogul [/INST] Finance & Operations. Exciting, right? The first thing that comes to mind when you think of a SaaS business? Probably not. Yet, people lie at the heart of every software company, so taking good care of them is imperative for every SaaS business that wants to succeed. With just 2 dedicated people on the Finance and Ops team at ChartMogul, we have to be careful with our resources and make sure we don’t get spread too thin. For us the software we use is the keystone that allows us to scale what we do. In this post, I want to share with you our favorite tools and how they allow us to run ChartMogul better. But before I get into that, here are a few details about our team. The Finance & Operations Team at ChartMogul Olga Evsenko Olga is maybe the archetypal international ChartMogul employee — originally from Russia, she spent an exchange year in Berlin during her studies in Economics and Finance. After that, she supported multiple non-profits in the US on the finance side for multiple years before returning to Berlin. She’s been with ChartMogul for almost a year now and has helped us a lot to improve & document our reporting and other processes. Martin Raißle I (Martin) also felt the urge to return to Germany, but that’s because it’s home for me. After completing my studies in Industrial Engineering, I had a 3-year stint in the Middle East to gain practical exposure to the Finance side of things. While I enjoyed crunching the numbers, I realized I wasn’t made for working in a corporate environment or living in the desert. So I returned to Europe in 2016 and joined ChartMogul in the same year. Since then I’ve been in charge of fast and accurate reporting, regulatory compliance, and all the other small things that make sure everyone else can do their job. And now to the tools we use to give superpowers to our small team! Excel Excel is still the powerhouse in this category. Unsurprisingly, it is also at the top of my list. Finance teams all over the world use it for everything from A as in Attainment Reporting, to O as in OPEX Planning to Z as in … avoiding Zero-sum games, I guess? The OPEX template we use This is also true for us at ChartMogul. With its immense flexibility and power, Microsoft Excel is the draft horse of pretty much anything we do that deals with large amounts of numbers. PivotTables easily handle hundreds of thousands of lines to derive — often very specific — insight. For our regular reports, we do have templates and macros prepared that help us stem the monthly workload. For everything else… there’s ChartMogul. ChartMogul Of course, we’re also using our own product! With all our revenue data captured in ChartMogul, the data it holds is the foundation for many of the reports our team produces regularly and on an ad-hoc basis. At the very beginning of the month, we do high-level investor reporting. Not all the metrics covered in this report come from ChartMogul — there are better options to keep track of your OPEX, hiring plan, the engineering roadmap, etc. However, the core figures that every SaaS investor cares about come straight from our tool: How did our MRR develop and how do we track against the plan? A bit later in the month, we prepare a revenue report for tax purposes. This is based not on MRR, but GAAP revenues. Luckily, ChartMogul also offers Revenue Recognition functionality. Its detailed export allows us to send separate lists for issued invoices, received payments and deferred revenue to our accountants. The recognized revenue report makes it easy to prepare accounting documents From the very same report, we derive our VAT reporting. As a business based in Europe, we need to differentiate between customers in our home country, those in the EU VAT area, and those in the rest of the world. Thanks to the filters available in ChartMogul, this is done easily. Finally, when it comes time to do payroll, we prepare the sales attainment report for our account executives. We cannot get a ready-made report out of ChartMogul for that (yet) — our commission rules are a bit too specific for that. However, the combination of Zapier (which automatically assigns accounts in ChartMogul to account executives based on data from our CRM tool Close), detailed exports for MRR movements in any given month and existing customers, and a custom-made Excel template allow us to calculate everyone’s achievement in a breeze. These two tools were kind of expected given one is the foundation of every Finance team and the other is our own product. There are, however, also a few tools that you might not have heard of — but that have proven to be very valuable for us. Spendesk How many credit cards does your company have? How many critical services are paid through the same card, that is also used for non-essential purposes that carry a higher risk of fraud? How often did you have to update the credit card details in the 20+ SaaS solutions that you use? How much time do you spend trying to find out who made that purchase on the credit card? Unless you are already a quite mature company, the answers are probably: not enough, too many, too often, and too much. Spendesk is here to ease your pain. There are two parts to it: We started with the digital-only part, with which you can generate virtual credit cards that are only used for a single transaction or subscription. Whoever needs to make a purchase just files a request that will go through a flexible approval flow and — once approved — lead to the creation of a prepaid MasterCard funded from your Spendesk wallet. This way, you don’t need to share physical cards or use the same card for multiple services. Also, because each card is tied to a requester, you know who to hunt down if the receipt is missing (Spendesk actually does that itself already). The second bit is physical prepaid cards that you can hand out to employees, especially those who travel often or otherwise regularly spend money offline. The workflow is similar — you can either assign a monthly budget (similar to a subscription) or the employee can request one-off top-ups. A mobile app prompts users to upload a photo of the receipt and automatically matches it to the corresponding transaction. In both cases, you can easily track how much of the budget is used already and all subscription cards will be topped up at the beginning of the month from your Spendesk wallet — which you can fund through a bank transfer. The best bit: Spendesk does support cards denominated in different currencies — so that we can generate USD cards, fund them with the Dollars that we get paid in, and save the FX fees along the way. HelloSign Not all the tools we use are about numbers though! Some are about letters, or whatever you call these illegible scribbles that some people use to conclude contracts. HelloSign moves this solution into the digital world at a very affordable price and with a very user-friendly interface. Most of our utilization falls into one of three use cases: Employment & freelancer contracts: A fast process is crucial to hiring the best talent, and a great e-signing solution helps to speed up the signature process a lot. Keep in mind that some jurisdictions have limitations in place about what can be agreed without wet ink signatures. Service Orders: What is true for hiring is just as true for the sales process. Bigger customers often want to negotiate specific terms — we accommodate this request by offering them to sign service orders. Once the terms are agreed, e-signing helps to formalize everything quickly so that the customer can get access to ChartMogul as soon as possible. Data Protection Agreements and other templates: What I really like about HelloSign is its option to create templates for documents that are regularly signed by different parties but are essentially the same for everyone. Once you upload a document template and place the fields that the other party has to fill, you will be provided with a link that you can send directly to customers or employees. Whenever somebody signs a template, both of you will be provided with a copy of the executed agreement via email and HelloSign will also keep a copy for you. TravelPerk Another solution to enable our employees to self-service typical problems without giving up control is TravelPerk. As the name suggests, this is about business travel. While our employees do not travel that much, every now & then we do attend conferences or even host our own customer meetups. While Spendesk makes sure you know who to bug for the invoice, TravelPerk makes it even easier by providing a central billing system that automatically sends the invoice to your accounting system. Here as well you can define flexible approval flows & travel policies that reduce interaction to a minimum. This ensures that employees can book trains, flights, hotels, and even Airbnbs themselves, without the risk of travel spend overrunning the allocated budget. Currently, hotel selection seems to be a bit limited in some cities. However, TravelPerk will allow you to book accommodation that you find with other providers through its platform, so that all spend can be found here. Point9 & Alven Community Finally, there is something that — while not being a software tool — makes our work life much easier. Both Point9 and Alven, our two biggest investors, maintain Slack groups in which their portfolio companies can swap ideas and get input from others that might have had a similar problem. Being able to get some quick free feedback is incredibly valuable, especially on such topics that we’re not very familiar with ourselves — like which benefits are common in Canada vs. Germany, which external DPO other companies in Germany are using, or how to deal with certain HR topics. Both companies also regularly host events. Because Alven is based in Paris attending those is more difficult. Both ChartMogul and Point9 are based in Berlin though, so I recently attended the Point9 Portfolio CFO Meetup in which we discussed our current challenges and recent learnings. Scale your Finance & Ops department with the right tools Using smart software tools is a great opportunity to empower nimble teams to support a great SaaS team. The software and communities I shared above are what we use inside ChartMogul, but there are many more out there. I’d be curious to hear about your favorite tools in this category — reach out to us @chartmogul and let me know. Maybe I can even find something to add to our arsenal. If you want to learn more about the internal operations of our Finance & Ops team, check out this post from an interview I did with Quaderno. </sys

🚀 SaaS Roundup #120: Financing, selling, scaling. In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Six Paths to Financing a SaaS Business Clement Vouillon, Point Nine Capital “I see an increasing number of SaaS companies taking debt at the Revenue stage. It can be either because they couldn’t secure money from VCs or because they just need some cash upfront to invest in their product or sales and don’t want to sacrifice equity for that.” It seems that the number of viable financing options for SaaS founders is growing. In some ways this is likely to be a side effect of the reduced VC-compatibility of many SaaS businesses (something that Clement himself talked about at length). It’s interesting (and no doubt incredibly useful for founders) to see these common routes to growth mapped out visually and compared. How long before founders are sitting in bars saying things like “oh, so you took the B-B-D-V route”? Read the full post. When SaaS founders shouldn’t be afraid of hiring a sales team Elicia McDonald, AirTree Ventures “If your ACV is greater than $1k, you will need to decide whether or not to invest in building an inside sales or enterprise sales team (or both!). A startup can typically support an inside sales team with ACVs over $5k and sometimes even lower.” Alternative title for this: “How to be more confident in choosing your sales model”. Elicia expertly breaks down different approaches to building a sales organization in SaaS, with a strong basis in metrics — LTV, CAC, ACV — it’s all here! Read the full post. 17 Priceless Lessons Learnt from Scaling to the US Irina Dzhambazova, SaaStock “According to research of 69 high growth companies conducted by Scott Sage and Andy Leaver from the London-based Crane Venture Partners, the time period that high-growth tech companies need before they start internationalising is rapidly shrinking. Previously, it was in the range of 10 years, while now it’s accelerating to less than four years.” Excellent compare/contrast of different startups’ views on expanding across the pond. The majority of this post is condensed insights. Read the full post. That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday.

[INST] 🚀 SaaS Roundup #120: Financing, selling, scaling [/INST]

In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Six Paths to Financing a SaaS Business Clement Vouillon, Point Nine Capital “I see an increasing number of SaaS companies taking debt at the Revenue stage. It can be either because they couldn’t secure money from VCs or because they just need some cash upfront to invest in their product or sales and don’t want to sacrifice equity for that.” It seems that the number of viable financing options for SaaS founders is growing. In some ways this is likely to be a side effect of the reduced VC-compatibility of many SaaS businesses (something that Clement himself talked about at length). It’s interesting (and no doubt incredibly useful for founders) to see these common routes to growth mapped out visually and compared. How long before founders are sitting in bars saying things like “oh, so you took the B-B-D-V route”? Read the full post. When SaaS founders shouldn’t be afraid of hiring a sales team Elicia McDonald, AirTree Ventures “If your ACV is greater than $1k, you will need to decide whether or not to invest in building an inside sales or enterprise sales team (or both!). A startup can typically support an inside sales team with ACVs over $5k and sometimes even lower.” Alternative title for this: “How to be more confident in choosing your sales model”. Elicia expertly breaks down different approaches to building a sales organization in SaaS, with a strong basis in metrics — LTV, CAC, ACV — it’s all here! Read the full post. 17 Priceless Lessons Learnt from Scaling to the US Irina Dzhambazova, SaaStock “According to research of 69 high growth companies conducted by Scott Sage and Andy Leaver from the London-based Crane Venture Partners, the time period that high-growth tech companies need before they start internationalising is rapidly shrinking. Previously, it was in the range of 10 years, while now it’s accelerating to less than four years.” Excellent compare/contrast of different startups’ views on expanding across the pond. The majority of this post is condensed insights. Read the full post. That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday.

<sys> [INST] 🚀 SaaS Roundup #120: Financing, selling, scaling [/INST] In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. This week’s top reads Six Paths to Financing a SaaS Business Clement Vouillon, Point Nine Capital “I see an increasing number of SaaS companies taking debt at the Revenue stage. It can be either because they couldn’t secure money from VCs or because they just need some cash upfront to invest in their product or sales and don’t want to sacrifice equity for that.” It seems that the number of viable financing options for SaaS founders is growing. In some ways this is likely to be a side effect of the reduced VC-compatibility of many SaaS businesses (something that Clement himself talked about at length). It’s interesting (and no doubt incredibly useful for founders) to see these common routes to growth mapped out visually and compared. How long before founders are sitting in bars saying things like “oh, so you took the B-B-D-V route”? Read the full post. When SaaS founders shouldn’t be afraid of hiring a sales team Elicia McDonald, AirTree Ventures “If your ACV is greater than $1k, you will need to decide whether or not to invest in building an inside sales or enterprise sales team (or both!). A startup can typically support an inside sales team with ACVs over $5k and sometimes even lower.” Alternative title for this: “How to be more confident in choosing your sales model”. Elicia expertly breaks down different approaches to building a sales organization in SaaS, with a strong basis in metrics — LTV, CAC, ACV — it’s all here! Read the full post. 17 Priceless Lessons Learnt from Scaling to the US Irina Dzhambazova, SaaStock “According to research of 69 high growth companies conducted by Scott Sage and Andy Leaver from the London-based Crane Venture Partners, the time period that high-growth tech companies need before they start internationalising is rapidly shrinking. Previously, it was in the range of 10 years, while now it’s accelerating to less than four years.” Excellent compare/contrast of different startups’ views on expanding across the pond. The majority of this post is condensed insights. Read the full post. That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday. </sys

Scaling Outbound Sales with a Simple Automation Tool. At ChartMogul, we have been long supporters of content marketing and inbound sales. So far, most of our lead generation is the result of a strong brand, word of mouth, valuable resources and blog posts, and rock-solid documentation. However, as we started expanding into non-traditional areas of subscription companies and beyond SaaS hubs, the need to connect with our audience directly increased. We recently built our first-ever outbound team — they identify, research, and reach out to prospective clients who are in the best position to benefit from our subscription data platform. Personalization at scale can be painstaking. It’s common knowledge that arming an outbound team with lackluster tools almost guarantees failure. To set our team up for success, we made it a priority to ensure our SDRs had the appropriate workflows and tools to execute. We wanted to do this without tying ourselves to a solution like Salesloft or Outreach, so we stuck to our roots and opted to build our own modular solution for testing purposes. This would allow us to work out the kinks and understand how outbound sales contribute to our pipeline and revenue growth. This post describes that process: from getting the requirements and building the workflow to selecting the tools and implementing it. First things first: Figuring out our requirements This is probably intuitive but important to point out nevertheless: Before you start building anything, you have to understand what you’re looking to develop. We started by figuring out the non-functional requirements (or guiding principles, as we like to call them) for outbound sales. We wanted to introduce a process that: works well with our current toolset, is relatively simple for easy onboarding and usage by non-developers, and is also modular as we wanted to try things and not commit to a particular toolset. For us, to achieve our goal, we figured out we had to work through these technical points: Identify the target industries/geographies/segments that we want to focus on Identify the right-fit accounts within our target segments Identify the right people/roles within each company Get their contact details Enrich with additional information about the company Clean up data, de-duplicate, etc. Send out custom messages and follow-ups on each prospect based on our research With this list of activities in hand, we were ready to get building. Translating the requirements into a workflow With the above requirements in mind, we built support for the following workflow: Generate a target account list Select company from target companies Check if the company exists in our systems Find leads within the company Enrich with additional information (location, technology, size, etc.) Identify the most appropriate lead Assign to the appropriate campaign with the correct messaging/value proposition Send to outbound tool Personalize the messaging/value proposition Review before sending Measure the results of each campaign This workflow applies to a specific type of outbound sales — primarily, it assumes that the target list of companies exists and is not focused on identifying the right-fit companies. Instead, it is an operational workflow that allows an SDR to go from the target company to initial outreach very fast, without going through multiple tools or sourcing email addresses by hand, which is typically one of the most time-consuming steps in the process. Tools selection: Implementing the workflow As I mentioned above, we started with the intent of creating a modular workflow, where we can experiment in a low-cost fashion and replace and upgrade the services after learning and iterating. The tools we chose to start with are the following: Email finder: Snov.io. Snov is a simple, easy-to-use, reliable email finder tool that works well with APIs. Company data enrichment: Purple Sonar. A tool that is primarily used to send signals about company changes (e.g., adding a tool to their stack). However, we used it to enrich our existing accounts with information such as technologies, location, size, etc. Email outreach: Lemlist — a tool that provides easy-to-use email outreach. Simple to start with, covering our initial requirements. Workflow tool for SDRs: Google Sheets. We used an old-fashioned spreadsheet with some dropdowns and Arrayformulas() to be the single place of controlling and monitoring this process. Stitching things together: Pipedream. A fantastic low-code tool, think of it as a cross between Zapier and Node.js. The idea was to start fast with a stable workflow. These tools do the job, each of them can be easily replaced if necessary, and the whole thing is reliable. Building the flow and connecting the tools In this section, I will walk you through the process we followed to build our outreach tool for outbound sales. I recorded a short video that covers the whole process if you prefer that medium over reading: We started by creating a Google Sheet with three sheets: List of companies for which we’ll collect data People within these companies that will act as our leads Campaigns & other dropdowns Get leads The SDRs start the process by clicking on a link, which is a webhook to Pipedream that triggers a workflow. We also pass some information along with link: Once the SDR clicks this link, the workflow starts and it goes through the following steps: Finds the domain on Snov.io Finds any leads associated with that domain Enriches the results from Sonar Sends the results to the next tab in our Sheet The first part of the process is finished, and we now need to review the leads. Send leads Some of the information we collect about leads (click for higher res) On the leads tab, we now have a list of leads from the previous step. The next task is to: Review the leads Select the ones we need for the campaign Assign to a campaign To do this, we use a very similar approach as before. Again a unique webhook link is created, but before that we select our campaign from a list in a dropdown: Once the SRD clicks the Send Lead URL, it acts as a button that triggers the following actions: We first do a few checks: Does the domain exist in our CRM already? If yes, we send a Slack message to the person who sent the request with the existing lead in our CRM for manual review. Does the email exist in Lemlist? If yes, we send a similar message on Slack, and we stop the process. Assuming that these two criteria are met, we then send the lead with all its details to our CRM, the lead is added to the Lemlist campaign, and the process continues there! Dropdowns and updating There is a list of dropdowns used throughout the process in Google Sheets. This is maintained in a separate tab that stores all the options we use in the first two tabs. For instance, it has a list with the Sales Reps, so they select themselves, their Slack IDs so that the notifications are sent to each of them, and so on. The options used in dropdown menus are stored in a separate sheet Dropdowns This also includes the campaigns from Lemlist. Since new campaigns are added frequently, we have a 1-hour Cron job to update the campaigns and refresh the dropdowns. This is also maintained in Pipedream. Trials and onboarding Once we built the prototype and did a bit of debugging, we started testing with real leads. The good thing was that there is a final review step on Lemlist before we send any emails, so we were comfortable that no big disaster would happen, even if something in the workflow broke. 🙂 We were planning to start slow, fix as we identify, and continue building. Fortunately, the process was fairly straightforward and we generally did not have many iterations. Most back and forth was in error handling — what happens if the domain does not exist or is misspelled? What if there is no lead identified? How about API limits? We also had a dedicated Slack channel for immediate feedback and fixing any critical issues, as well as a Notion board to capture feedback, feature requests, a roadmap for future improvements, etc. After a couple of weeks of iterating, we were in a steady state and our tool was properly in production! The results of our automation tool It’s still early days, but the results we see from the workflow we’ve built are very promising. For one thing, our outreach volume went up by more than 50%! Naturally, the main goal of outbound sales is not to just blast out messages but to generate high-quality leads and close deals with them. Our early results with this are making us optimistic: 1700 leads identified and contacted 26 different campaigns 80% open rate 14% reply rate 10 leads advanced to deal stage 5 won deals Scaling outbound sales further With an eye on continuous improvement, we keep a list of future developments we want to introduce. These are our main priorities for the future: Build a similar tool for inbound: We need to reach out to our inbound trials and leads in a semi-automated manner, using information that comes from our systems for customization and personalization; Some tools of our stack kept having issues: Thankfully, the design is modular, so we are in the process to update and potentially replace them; Move some of our data from Google Sheets to a database for robustness and speed. Better enrichment for our leads. Overall, we created a tool that fits our needs and let us try and experiment in our outbound efforts without spending too much time evaluating and deploying a heavy sales outbound tool. It allowed us to iterate and better understand our requirements. After a while, we will surely need to move to a more robust tool. Whenever that time comes, we will know much better what we need and be able to implement it better and faster.

[INST] Scaling Outbound Sales with a Simple Automation Tool [/INST]

At ChartMogul, we have been long supporters of content marketing and inbound sales. So far, most of our lead generation is the result of a strong brand, word of mouth, valuable resources and blog posts, and rock-solid documentation. However, as we started expanding into non-traditional areas of subscription companies and beyond SaaS hubs, the need to connect with our audience directly increased. We recently built our first-ever outbound team — they identify, research, and reach out to prospective clients who are in the best position to benefit from our subscription data platform. Personalization at scale can be painstaking. It’s common knowledge that arming an outbound team with lackluster tools almost guarantees failure. To set our team up for success, we made it a priority to ensure our SDRs had the appropriate workflows and tools to execute. We wanted to do this without tying ourselves to a solution like Salesloft or Outreach, so we stuck to our roots and opted to build our own modular solution for testing purposes. This would allow us to work out the kinks and understand how outbound sales contribute to our pipeline and revenue growth. This post describes that process: from getting the requirements and building the workflow to selecting the tools and implementing it. First things first: Figuring out our requirements This is probably intuitive but important to point out nevertheless: Before you start building anything, you have to understand what you’re looking to develop. We started by figuring out the non-functional requirements (or guiding principles, as we like to call them) for outbound sales. We wanted to introduce a process that: works well with our current toolset, is relatively simple for easy onboarding and usage by non-developers, and is also modular as we wanted to try things and not commit to a particular toolset. For us, to achieve our goal, we figured out we had to work through these technical points: Identify the target industries/geographies/segments that we want to focus on Identify the right-fit accounts within our target segments Identify the right people/roles within each company Get their contact details Enrich with additional information about the company Clean up data, de-duplicate, etc. Send out custom messages and follow-ups on each prospect based on our research With this list of activities in hand, we were ready to get building. Translating the requirements into a workflow With the above requirements in mind, we built support for the following workflow: Generate a target account list Select company from target companies Check if the company exists in our systems Find leads within the company Enrich with additional information (location, technology, size, etc.) Identify the most appropriate lead Assign to the appropriate campaign with the correct messaging/value proposition Send to outbound tool Personalize the messaging/value proposition Review before sending Measure the results of each campaign This workflow applies to a specific type of outbound sales — primarily, it assumes that the target list of companies exists and is not focused on identifying the right-fit companies. Instead, it is an operational workflow that allows an SDR to go from the target company to initial outreach very fast, without going through multiple tools or sourcing email addresses by hand, which is typically one of the most time-consuming steps in the process. Tools selection: Implementing the workflow As I mentioned above, we started with the intent of creating a modular workflow, where we can experiment in a low-cost fashion and replace and upgrade the services after learning and iterating. The tools we chose to start with are the following: Email finder: Snov.io. Snov is a simple, easy-to-use, reliable email finder tool that works well with APIs. Company data enrichment: Purple Sonar. A tool that is primarily used to send signals about company changes (e.g., adding a tool to their stack). However, we used it to enrich our existing accounts with information such as technologies, location, size, etc. Email outreach: Lemlist — a tool that provides easy-to-use email outreach. Simple to start with, covering our initial requirements. Workflow tool for SDRs: Google Sheets. We used an old-fashioned spreadsheet with some dropdowns and Arrayformulas() to be the single place of controlling and monitoring this process. Stitching things together: Pipedream. A fantastic low-code tool, think of it as a cross between Zapier and Node.js. The idea was to start fast with a stable workflow. These tools do the job, each of them can be easily replaced if necessary, and the whole thing is reliable. Building the flow and connecting the tools In this section, I will walk you through the process we followed to build our outreach tool for outbound sales. I recorded a short video that covers the whole process if you prefer that medium over reading: We started by creating a Google Sheet with three sheets: List of companies for which we’ll collect data People within these companies that will act as our leads Campaigns & other dropdowns Get leads The SDRs start the process by clicking on a link, which is a webhook to Pipedream that triggers a workflow. We also pass some information along with link: Once the SDR clicks this link, the workflow starts and it goes through the following steps: Finds the domain on Snov.io Finds any leads associated with that domain Enriches the results from Sonar Sends the results to the next tab in our Sheet The first part of the process is finished, and we now need to review the leads. Send leads Some of the information we collect about leads (click for higher res) On the leads tab, we now have a list of leads from the previous step. The next task is to: Review the leads Select the ones we need for the campaign Assign to a campaign To do this, we use a very similar approach as before. Again a unique webhook link is created, but before that we select our campaign from a list in a dropdown: Once the SRD clicks the Send Lead URL, it acts as a button that triggers the following actions: We first do a few checks: Does the domain exist in our CRM already? If yes, we send a Slack message to the person who sent the request with the existing lead in our CRM for manual review. Does the email exist in Lemlist? If yes, we send a similar message on Slack, and we stop the process. Assuming that these two criteria are met, we then send the lead with all its details to our CRM, the lead is added to the Lemlist campaign, and the process continues there! Dropdowns and updating There is a list of dropdowns used throughout the process in Google Sheets. This is maintained in a separate tab that stores all the options we use in the first two tabs. For instance, it has a list with the Sales Reps, so they select themselves, their Slack IDs so that the notifications are sent to each of them, and so on. The options used in dropdown menus are stored in a separate sheet Dropdowns This also includes the campaigns from Lemlist. Since new campaigns are added frequently, we have a 1-hour Cron job to update the campaigns and refresh the dropdowns. This is also maintained in Pipedream. Trials and onboarding Once we built the prototype and did a bit of debugging, we started testing with real leads. The good thing was that there is a final review step on Lemlist before we send any emails, so we were comfortable that no big disaster would happen, even if something in the workflow broke. 🙂 We were planning to start slow, fix as we identify, and continue building. Fortunately, the process was fairly straightforward and we generally did not have many iterations. Most back and forth was in error handling — what happens if the domain does not exist or is misspelled? What if there is no lead identified? How about API limits? We also had a dedicated Slack channel for immediate feedback and fixing any critical issues, as well as a Notion board to capture feedback, feature requests, a roadmap for future improvements, etc. After a couple of weeks of iterating, we were in a steady state and our tool was properly in production! The results of our automation tool It’s still early days, but the results we see from the workflow we’ve built are very promising. For one thing, our outreach volume went up by more than 50%! Naturally, the main goal of outbound sales is not to just blast out messages but to generate high-quality leads and close deals with them. Our early results with this are making us optimistic: 1700 leads identified and contacted 26 different campaigns 80% open rate 14% reply rate 10 leads advanced to deal stage 5 won deals Scaling outbound sales further With an eye on continuous improvement, we keep a list of future developments we want to introduce. These are our main priorities for the future: Build a similar tool for inbound: We need to reach out to our inbound trials and leads in a semi-automated manner, using information that comes from our systems for customization and personalization; Some tools of our stack kept having issues: Thankfully, the design is modular, so we are in the process to update and potentially replace them; Move some of our data from Google Sheets to a database for robustness and speed. Better enrichment for our leads. Overall, we created a tool that fits our needs and let us try and experiment in our outbound efforts without spending too much time evaluating and deploying a heavy sales outbound tool. It allowed us to iterate and better understand our requirements. After a while, we will surely need to move to a more robust tool. Whenever that time comes, we will know much better what we need and be able to implement it better and faster.

<sys> [INST] Scaling Outbound Sales with a Simple Automation Tool [/INST] At ChartMogul, we have been long supporters of content marketing and inbound sales. So far, most of our lead generation is the result of a strong brand, word of mouth, valuable resources and blog posts, and rock-solid documentation. However, as we started expanding into non-traditional areas of subscription companies and beyond SaaS hubs, the need to connect with our audience directly increased. We recently built our first-ever outbound team — they identify, research, and reach out to prospective clients who are in the best position to benefit from our subscription data platform. Personalization at scale can be painstaking. It’s common knowledge that arming an outbound team with lackluster tools almost guarantees failure. To set our team up for success, we made it a priority to ensure our SDRs had the appropriate workflows and tools to execute. We wanted to do this without tying ourselves to a solution like Salesloft or Outreach, so we stuck to our roots and opted to build our own modular solution for testing purposes. This would allow us to work out the kinks and understand how outbound sales contribute to our pipeline and revenue growth. This post describes that process: from getting the requirements and building the workflow to selecting the tools and implementing it. First things first: Figuring out our requirements This is probably intuitive but important to point out nevertheless: Before you start building anything, you have to understand what you’re looking to develop. We started by figuring out the non-functional requirements (or guiding principles, as we like to call them) for outbound sales. We wanted to introduce a process that: works well with our current toolset, is relatively simple for easy onboarding and usage by non-developers, and is also modular as we wanted to try things and not commit to a particular toolset. For us, to achieve our goal, we figured out we had to work through these technical points: Identify the target industries/geographies/segments that we want to focus on Identify the right-fit accounts within our target segments Identify the right people/roles within each company Get their contact details Enrich with additional information about the company Clean up data, de-duplicate, etc. Send out custom messages and follow-ups on each prospect based on our research With this list of activities in hand, we were ready to get building. Translating the requirements into a workflow With the above requirements in mind, we built support for the following workflow: Generate a target account list Select company from target companies Check if the company exists in our systems Find leads within the company Enrich with additional information (location, technology, size, etc.) Identify the most appropriate lead Assign to the appropriate campaign with the correct messaging/value proposition Send to outbound tool Personalize the messaging/value proposition Review before sending Measure the results of each campaign This workflow applies to a specific type of outbound sales — primarily, it assumes that the target list of companies exists and is not focused on identifying the right-fit companies. Instead, it is an operational workflow that allows an SDR to go from the target company to initial outreach very fast, without going through multiple tools or sourcing email addresses by hand, which is typically one of the most time-consuming steps in the process. Tools selection: Implementing the workflow As I mentioned above, we started with the intent of creating a modular workflow, where we can experiment in a low-cost fashion and replace and upgrade the services after learning and iterating. The tools we chose to start with are the following: Email finder: Snov.io. Snov is a simple, easy-to-use, reliable email finder tool that works well with APIs. Company data enrichment: Purple Sonar. A tool that is primarily used to send signals about company changes (e.g., adding a tool to their stack). However, we used it to enrich our existing accounts with information such as technologies, location, size, etc. Email outreach: Lemlist — a tool that provides easy-to-use email outreach. Simple to start with, covering our initial requirements. Workflow tool for SDRs: Google Sheets. We used an old-fashioned spreadsheet with some dropdowns and Arrayformulas() to be the single place of controlling and monitoring this process. Stitching things together: Pipedream. A fantastic low-code tool, think of it as a cross between Zapier and Node.js. The idea was to start fast with a stable workflow. These tools do the job, each of them can be easily replaced if necessary, and the whole thing is reliable. Building the flow and connecting the tools In this section, I will walk you through the process we followed to build our outreach tool for outbound sales. I recorded a short video that covers the whole process if you prefer that medium over reading: We started by creating a Google Sheet with three sheets: List of companies for which we’ll collect data People within these companies that will act as our leads Campaigns & other dropdowns Get leads The SDRs start the process by clicking on a link, which is a webhook to Pipedream that triggers a workflow. We also pass some information along with link: Once the SDR clicks this link, the workflow starts and it goes through the following steps: Finds the domain on Snov.io Finds any leads associated with that domain Enriches the results from Sonar Sends the results to the next tab in our Sheet The first part of the process is finished, and we now need to review the leads. Send leads Some of the information we collect about leads (click for higher res) On the leads tab, we now have a list of leads from the previous step. The next task is to: Review the leads Select the ones we need for the campaign Assign to a campaign To do this, we use a very similar approach as before. Again a unique webhook link is created, but before that we select our campaign from a list in a dropdown: Once the SRD clicks the Send Lead URL, it acts as a button that triggers the following actions: We first do a few checks: Does the domain exist in our CRM already? If yes, we send a Slack message to the person who sent the request with the existing lead in our CRM for manual review. Does the email exist in Lemlist? If yes, we send a similar message on Slack, and we stop the process. Assuming that these two criteria are met, we then send the lead with all its details to our CRM, the lead is added to the Lemlist campaign, and the process continues there! Dropdowns and updating There is a list of dropdowns used throughout the process in Google Sheets. This is maintained in a separate tab that stores all the options we use in the first two tabs. For instance, it has a list with the Sales Reps, so they select themselves, their Slack IDs so that the notifications are sent to each of them, and so on. The options used in dropdown menus are stored in a separate sheet Dropdowns This also includes the campaigns from Lemlist. Since new campaigns are added frequently, we have a 1-hour Cron job to update the campaigns and refresh the dropdowns. This is also maintained in Pipedream. Trials and onboarding Once we built the prototype and did a bit of debugging, we started testing with real leads. The good thing was that there is a final review step on Lemlist before we send any emails, so we were comfortable that no big disaster would happen, even if something in the workflow broke. 🙂 We were planning to start slow, fix as we identify, and continue building. Fortunately, the process was fairly straightforward and we generally did not have many iterations. Most back and forth was in error handling — what happens if the domain does not exist or is misspelled? What if there is no lead identified? How about API limits? We also had a dedicated Slack channel for immediate feedback and fixing any critical issues, as well as a Notion board to capture feedback, feature requests, a roadmap for future improvements, etc. After a couple of weeks of iterating, we were in a steady state and our tool was properly in production! The results of our automation tool It’s still early days, but the results we see from the workflow we’ve built are very promising. For one thing, our outreach volume went up by more than 50%! Naturally, the main goal of outbound sales is not to just blast out messages but to generate high-quality leads and close deals with them. Our early results with this are making us optimistic: 1700 leads identified and contacted 26 different campaigns 80% open rate 14% reply rate 10 leads advanced to deal stage 5 won deals Scaling outbound sales further With an eye on continuous improvement, we keep a list of future developments we want to introduce. These are our main priorities for the future: Build a similar tool for inbound: We need to reach out to our inbound trials and leads in a semi-automated manner, using information that comes from our systems for customization and personalization; Some tools of our stack kept having issues: Thankfully, the design is modular, so we are in the process to update and potentially replace them; Move some of our data from Google Sheets to a database for robustness and speed. Better enrichment for our leads. Overall, we created a tool that fits our needs and let us try and experiment in our outbound efforts without spending too much time evaluating and deploying a heavy sales outbound tool. It allowed us to iterate and better understand our requirements. After a while, we will surely need to move to a more robust tool. Whenever that time comes, we will know much better what we need and be able to implement it better and faster. </sys

Seasonal SaaS: Your worst enemy?. The SaaS business model brings with it a wealth of benefits over traditional non-subscription based models. Everything suddenly becomes more measurable and predictable. Furthermore, your revenue recurs and compounds over time. What could be better?! However, subscription models aren’t a great fit for every product out there. There’s a common aspect of some products that can play havoc with metrics and growth: Seasonality. What is seasonality in SaaS? Simply put, seasonality is when a customer’s need for your solution is not continuous. On a higher level, it’s all about how revenue flows into your business across a timeframe. The best way to detect it is to look at two metrics: Reactivation MRR and Churned MRR. In a seasonal business, both of these metrics will assume a high proportion of your total MRR for at least part of the year. There are two key types of seasonality, each exhibiting different characteristics: 1. Regular Seasonality (Usually caused by external factors) Example: A service offering an easy way to send greetings cards during the holiday season. These businesses will show fluctuations in Reactivation and Churn MRR in a predictable pattern. This is because the business has customers who leave and come back due to some external factor – usually calendar events during the year. In the above example, most customers would subscribe during the run-up to the holiday season each year and unsubscribe (churn) after the holidays are over. This is predictable, and caused by external factors. 2. Irregular Seasonality (Usually caused by internal factors) Example: A product offering an easy way for businesses to find and move into new office space. This type of business will have a consistently high level of Reactivation and Churn MRR throughout the year, and on a per-customer level will be almost completely unpredictable. This is because the reasons for churn and reactivation are not caused by externally visible events (holidays etc.) but rather by internal events experienced by each business. In this example, the product’s usage on a customer level seems fairly spontaneous. Customers will subscribe at the point where they need to move their company to a new office, and will unsubscribe (churn) once the move is complete. What’s so bad about this? My customers come back! On the surface, having a business with some of the characteristics mentioned above might not seem like a desperately bad situation to be in. Actually, in a lot of cases many business can survive — and even thrive — with these high levels of churn and reactivation. After all, people are coming back and paying you when they need the product, so what’s the problem? It’s largely about risk. Each time those customers churn from your subscription, things are completely out of your control. Investors aren’t hugely fond any kind of seasonal business for this very reason – there is a consistent, ongoing level of risk that may just come back to bite you at some point. Will they come back? What if a better solution enters the market in the meantime? Why would they come back to yours when they have no ties to it — either in the form of a contract commitment, or just in terms of customer loyalty? It’s also about control. One of the huge benefits of a subscription model in the first place is that you can focus on providing ongoing incremental value, and a high-level user experience to your customers. If those customers are leaving all of the time, you lose the chance to build up any ongoing rapport or connection between them and your brand. They’re not really loyal to you, they just come back when they need you. If you can move away from this seasonality, you’ll likely solve a lot of problems and start to see many of the often-touted benefits of the subscription model: Measurable growth Ongoing customer value creation Predictability Compounding revenue When Seasonality is acceptable I recently interviewed founder and CEO of Workable, Nikos Moraitakis. As a SaaS recruitment tool, Workable is one kind of product that commonly attracts seasonal subscriptions. Customers subscribe when they’re going through a recruitment period. This is a typical example of Irregular seasonality, causing a constant high level of both Churn and Reactivation MRR. The interesting point with Workable is that due to the company’s high-velocity growth, these symptoms are not a problem for them — or at least, not just yet. In other words, if you’re growing fast enough, there are probably better things to focus on. Read the full interview here: How can I become less seasonal? There are several options you have which can help to smooth out revenue spikes and lower any high levels of churn and reactivation caused by seasonality. I’ll warn you – there aren’t many that are easy to implement. Switch to annual subscriptions only This is probably the easiest solution to implement, and in many ways the simplest. If customers subscribe to your product once every year for a certain event (the best example of this is a conference ticketing service), then having an annual subscription will force them away from coming and going as they please. The risk: You might end up driving some customers away who don’t want to commit to a whole year’s subscription upfront. This is inevitable. However, the net positive of having a more controlled subscription model and basically eliminating reactivation means that it’s probably worth it. You need to find the sweet spot for pricing though. Broaden the use case for your product Many seasonal businesses are so because the use case for customers is too narrow. This is especially common in early-stage companies where the product hasn’t matured to the level where it offers a range of features for a broader spectrum of target customers. If you can expand the features of your product such that it delivers at least some ongoing value across the whole year, you’re more likely to keep customers from churning. The risk: You’re going to be moving away from a highly-targeted solution for a highly-specific problem and target customer. Doing this could water down your marketing around the product, making it harder for potential customers to really understand the value you’re delivering. Try to turn those churns into downgrades What if you offered a super cheap alternative to churning? A pricing plan that still offered some ongoing value from the product, but at a small scale and a tiny price? Converting your potential churns into downgrades means that you still have a line of dialogue open with your customer. You still have their credit card on file and it’s much easier for them to upgrade again when they need a bigger plan. The risk: You don’t want to offer a cheap alternative that cannibalises your higher-value plans. The tricky part here is to find a balance of offering just the right (small) amount of value at a price that’s effectively a no-brainer as an alternative to cancelling. When all else fails… What if all of the above strategies won’t work for your business and its characteristics? Then it’s time to address the SaaS-sized elephant in the room: Maybe your product just isn’t a suitable fit for the subscription model. And maybe that’s fine. Better to see this upfront than to continue to shoehorn the product into a billing model that simply doesn’t make sense. If you can’t offer a steady amount of ongoing value to your customers across a long period of time, you should maybe consider repositioning as a more on-demand transactional solution. There are benefits to those models too.

[INST] Seasonal SaaS: Your worst enemy? [/INST]

The SaaS business model brings with it a wealth of benefits over traditional non-subscription based models. Everything suddenly becomes more measurable and predictable. Furthermore, your revenue recurs and compounds over time. What could be better?! However, subscription models aren’t a great fit for every product out there. There’s a common aspect of some products that can play havoc with metrics and growth: Seasonality. What is seasonality in SaaS? Simply put, seasonality is when a customer’s need for your solution is not continuous. On a higher level, it’s all about how revenue flows into your business across a timeframe. The best way to detect it is to look at two metrics: Reactivation MRR and Churned MRR. In a seasonal business, both of these metrics will assume a high proportion of your total MRR for at least part of the year. There are two key types of seasonality, each exhibiting different characteristics: 1. Regular Seasonality (Usually caused by external factors) Example: A service offering an easy way to send greetings cards during the holiday season. These businesses will show fluctuations in Reactivation and Churn MRR in a predictable pattern. This is because the business has customers who leave and come back due to some external factor – usually calendar events during the year. In the above example, most customers would subscribe during the run-up to the holiday season each year and unsubscribe (churn) after the holidays are over. This is predictable, and caused by external factors. 2. Irregular Seasonality (Usually caused by internal factors) Example: A product offering an easy way for businesses to find and move into new office space. This type of business will have a consistently high level of Reactivation and Churn MRR throughout the year, and on a per-customer level will be almost completely unpredictable. This is because the reasons for churn and reactivation are not caused by externally visible events (holidays etc.) but rather by internal events experienced by each business. In this example, the product’s usage on a customer level seems fairly spontaneous. Customers will subscribe at the point where they need to move their company to a new office, and will unsubscribe (churn) once the move is complete. What’s so bad about this? My customers come back! On the surface, having a business with some of the characteristics mentioned above might not seem like a desperately bad situation to be in. Actually, in a lot of cases many business can survive — and even thrive — with these high levels of churn and reactivation. After all, people are coming back and paying you when they need the product, so what’s the problem? It’s largely about risk. Each time those customers churn from your subscription, things are completely out of your control. Investors aren’t hugely fond any kind of seasonal business for this very reason – there is a consistent, ongoing level of risk that may just come back to bite you at some point. Will they come back? What if a better solution enters the market in the meantime? Why would they come back to yours when they have no ties to it — either in the form of a contract commitment, or just in terms of customer loyalty? It’s also about control. One of the huge benefits of a subscription model in the first place is that you can focus on providing ongoing incremental value, and a high-level user experience to your customers. If those customers are leaving all of the time, you lose the chance to build up any ongoing rapport or connection between them and your brand. They’re not really loyal to you, they just come back when they need you. If you can move away from this seasonality, you’ll likely solve a lot of problems and start to see many of the often-touted benefits of the subscription model: Measurable growth Ongoing customer value creation Predictability Compounding revenue When Seasonality is acceptable I recently interviewed founder and CEO of Workable, Nikos Moraitakis. As a SaaS recruitment tool, Workable is one kind of product that commonly attracts seasonal subscriptions. Customers subscribe when they’re going through a recruitment period. This is a typical example of Irregular seasonality, causing a constant high level of both Churn and Reactivation MRR. The interesting point with Workable is that due to the company’s high-velocity growth, these symptoms are not a problem for them — or at least, not just yet. In other words, if you’re growing fast enough, there are probably better things to focus on. Read the full interview here: How can I become less seasonal? There are several options you have which can help to smooth out revenue spikes and lower any high levels of churn and reactivation caused by seasonality. I’ll warn you – there aren’t many that are easy to implement. Switch to annual subscriptions only This is probably the easiest solution to implement, and in many ways the simplest. If customers subscribe to your product once every year for a certain event (the best example of this is a conference ticketing service), then having an annual subscription will force them away from coming and going as they please. The risk: You might end up driving some customers away who don’t want to commit to a whole year’s subscription upfront. This is inevitable. However, the net positive of having a more controlled subscription model and basically eliminating reactivation means that it’s probably worth it. You need to find the sweet spot for pricing though. Broaden the use case for your product Many seasonal businesses are so because the use case for customers is too narrow. This is especially common in early-stage companies where the product hasn’t matured to the level where it offers a range of features for a broader spectrum of target customers. If you can expand the features of your product such that it delivers at least some ongoing value across the whole year, you’re more likely to keep customers from churning. The risk: You’re going to be moving away from a highly-targeted solution for a highly-specific problem and target customer. Doing this could water down your marketing around the product, making it harder for potential customers to really understand the value you’re delivering. Try to turn those churns into downgrades What if you offered a super cheap alternative to churning? A pricing plan that still offered some ongoing value from the product, but at a small scale and a tiny price? Converting your potential churns into downgrades means that you still have a line of dialogue open with your customer. You still have their credit card on file and it’s much easier for them to upgrade again when they need a bigger plan. The risk: You don’t want to offer a cheap alternative that cannibalises your higher-value plans. The tricky part here is to find a balance of offering just the right (small) amount of value at a price that’s effectively a no-brainer as an alternative to cancelling. When all else fails… What if all of the above strategies won’t work for your business and its characteristics? Then it’s time to address the SaaS-sized elephant in the room: Maybe your product just isn’t a suitable fit for the subscription model. And maybe that’s fine. Better to see this upfront than to continue to shoehorn the product into a billing model that simply doesn’t make sense. If you can’t offer a steady amount of ongoing value to your customers across a long period of time, you should maybe consider repositioning as a more on-demand transactional solution. There are benefits to those models too.

<sys> [INST] Seasonal SaaS: Your worst enemy? [/INST] The SaaS business model brings with it a wealth of benefits over traditional non-subscription based models. Everything suddenly becomes more measurable and predictable. Furthermore, your revenue recurs and compounds over time. What could be better?! However, subscription models aren’t a great fit for every product out there. There’s a common aspect of some products that can play havoc with metrics and growth: Seasonality. What is seasonality in SaaS? Simply put, seasonality is when a customer’s need for your solution is not continuous. On a higher level, it’s all about how revenue flows into your business across a timeframe. The best way to detect it is to look at two metrics: Reactivation MRR and Churned MRR. In a seasonal business, both of these metrics will assume a high proportion of your total MRR for at least part of the year. There are two key types of seasonality, each exhibiting different characteristics: 1. Regular Seasonality (Usually caused by external factors) Example: A service offering an easy way to send greetings cards during the holiday season. These businesses will show fluctuations in Reactivation and Churn MRR in a predictable pattern. This is because the business has customers who leave and come back due to some external factor – usually calendar events during the year. In the above example, most customers would subscribe during the run-up to the holiday season each year and unsubscribe (churn) after the holidays are over. This is predictable, and caused by external factors. 2. Irregular Seasonality (Usually caused by internal factors) Example: A product offering an easy way for businesses to find and move into new office space. This type of business will have a consistently high level of Reactivation and Churn MRR throughout the year, and on a per-customer level will be almost completely unpredictable. This is because the reasons for churn and reactivation are not caused by externally visible events (holidays etc.) but rather by internal events experienced by each business. In this example, the product’s usage on a customer level seems fairly spontaneous. Customers will subscribe at the point where they need to move their company to a new office, and will unsubscribe (churn) once the move is complete. What’s so bad about this? My customers come back! On the surface, having a business with some of the characteristics mentioned above might not seem like a desperately bad situation to be in. Actually, in a lot of cases many business can survive — and even thrive — with these high levels of churn and reactivation. After all, people are coming back and paying you when they need the product, so what’s the problem? It’s largely about risk. Each time those customers churn from your subscription, things are completely out of your control. Investors aren’t hugely fond any kind of seasonal business for this very reason – there is a consistent, ongoing level of risk that may just come back to bite you at some point. Will they come back? What if a better solution enters the market in the meantime? Why would they come back to yours when they have no ties to it — either in the form of a contract commitment, or just in terms of customer loyalty? It’s also about control. One of the huge benefits of a subscription model in the first place is that you can focus on providing ongoing incremental value, and a high-level user experience to your customers. If those customers are leaving all of the time, you lose the chance to build up any ongoing rapport or connection between them and your brand. They’re not really loyal to you, they just come back when they need you. If you can move away from this seasonality, you’ll likely solve a lot of problems and start to see many of the often-touted benefits of the subscription model: Measurable growth Ongoing customer value creation Predictability Compounding revenue When Seasonality is acceptable I recently interviewed founder and CEO of Workable, Nikos Moraitakis. As a SaaS recruitment tool, Workable is one kind of product that commonly attracts seasonal subscriptions. Customers subscribe when they’re going through a recruitment period. This is a typical example of Irregular seasonality, causing a constant high level of both Churn and Reactivation MRR. The interesting point with Workable is that due to the company’s high-velocity growth, these symptoms are not a problem for them — or at least, not just yet. In other words, if you’re growing fast enough, there are probably better things to focus on. Read the full interview here: How can I become less seasonal? There are several options you have which can help to smooth out revenue spikes and lower any high levels of churn and reactivation caused by seasonality. I’ll warn you – there aren’t many that are easy to implement. Switch to annual subscriptions only This is probably the easiest solution to implement, and in many ways the simplest. If customers subscribe to your product once every year for a certain event (the best example of this is a conference ticketing service), then having an annual subscription will force them away from coming and going as they please. The risk: You might end up driving some customers away who don’t want to commit to a whole year’s subscription upfront. This is inevitable. However, the net positive of having a more controlled subscription model and basically eliminating reactivation means that it’s probably worth it. You need to find the sweet spot for pricing though. Broaden the use case for your product Many seasonal businesses are so because the use case for customers is too narrow. This is especially common in early-stage companies where the product hasn’t matured to the level where it offers a range of features for a broader spectrum of target customers. If you can expand the features of your product such that it delivers at least some ongoing value across the whole year, you’re more likely to keep customers from churning. The risk: You’re going to be moving away from a highly-targeted solution for a highly-specific problem and target customer. Doing this could water down your marketing around the product, making it harder for potential customers to really understand the value you’re delivering. Try to turn those churns into downgrades What if you offered a super cheap alternative to churning? A pricing plan that still offered some ongoing value from the product, but at a small scale and a tiny price? Converting your potential churns into downgrades means that you still have a line of dialogue open with your customer. You still have their credit card on file and it’s much easier for them to upgrade again when they need a bigger plan. The risk: You don’t want to offer a cheap alternative that cannibalises your higher-value plans. The tricky part here is to find a balance of offering just the right (small) amount of value at a price that’s effectively a no-brainer as an alternative to cancelling. When all else fails… What if all of the above strategies won’t work for your business and its characteristics? Then it’s time to address the SaaS-sized elephant in the room: Maybe your product just isn’t a suitable fit for the subscription model. And maybe that’s fine. Better to see this upfront than to continue to shoehorn the product into a billing model that simply doesn’t make sense. If you can’t offer a steady amount of ongoing value to your customers across a long period of time, you should maybe consider repositioning as a more on-demand transactional solution. There are benefits to those models too. </sys

How Resource Guru uses Segmentation to optimize pricing. Resource Guru is an app to make your life easier. Not just easier, but to make it run smoother, faster, and even in harmony with all the other lives running around your office or organization. With ease, flexibility and optimal visibility, you can schedule employees and freelancers, meeting rooms and equipment. Resource Guru tracks multiple time zones to accommodate international teams, and automatically prevents any overbookings or schedule clashes. No need to fumble with spreadsheets, Google Calendars, or update emails. It’s no surprise, then, that their website is littered with customer testimonials. (Perhaps “littered” isn’t the right word in this case — decorated? bejeweled?) The app suits a wide array of users, from project managers coordinating multiple projects, to scheduling a remote team, to any kind of organization that shares equipment, such as a university newspaper or a professional recording studio. “We’ve been attracting incredible customers like Publicis, Saatchi & Saatchi, Yahoo!, Deloitte, Virgin Media, VMware and ASOS and now have a diverse range of customers in over 90 countries around the world.” And they all love it because the resource management app saves time and serious money. If you’re skeptical, take a look at their Savings Calculator: When Resource Guru was a young grasshopper We spoke with Percy Stilwell, one of Resource Guru’s cofounders, about the evolution of the app and their company. He and Andrew Rogoff began developing it in 2009 while working in marketing agencies. “…we experienced the headaches of resource scheduling. In almost every agency we worked in, people were using ugly spreadsheets to schedule their teams.” So began Resource Guru’s journey. “We developed a clickable prototype and did a lot of usability research with project managers and resource managers to ensure we got the product right.” With research done and product tweaked, Percy and Andrew launched Resource Guru in May 2012. Now the company’s HQ is in London, but the team has a remote, work-from-anywhere culture — and they continue to strive to improve their product. Their latest developments include adding time off, managing overtime, and adjusting availability for major holidays (e.g.- the chaotic time around Christmas). To learn more about where the Resource Guru app is now and how to use it, check out this great product video: Give spreadsheets the boot Resource Guru and ChartMogul have something in common. We felt similar pain points. In a way, we both set out to make clunky spreadsheets obsolete — headaches, confusion, frustration, be gone. Simplicity, clarity, automation — hello! Resource Guru smooths out the numerous tangled schedules of an organization’s resources, so that all resources are maximized and everyone can work more productively and efficiently. ChartMogul sifts through a sea of data to define key metrics that clearly track a company’s performance, so that decision makers can work quickly and effectively to optimize their business. But while Resource Guru was doing an excellent job making their customers’ lives easier, they found themselves facing that same old frustration: dealing in messy spreadsheets. As their SaaS business grew, they struggled to determine accurate data about their growth, data they could analyze and act upon. Data that could monitor revenue and maximize profits. Cue ChartMogul. “How should we spend on marketing?” Before ChartMogul Like any SaaS business, Resource Guru wanted to track their revenue growth, and they also wanted to understand where to invest in that growth. The thing with SaaS metrics is, though… If you want to know one thing, you usually need to know other metrics first. You must track them all to get to whatever key indicator matters most to you. That’s how it can get messy. For example, Percy mentioned wanting to know how best to allocate their marketing spend. “In order to spend efficiently on marketing, you need to know your target Cost Per Acquisition, and in order to define that you need to know your Lifetime Value per customer. Before you can work out your LTV, you need to know your Average Revenue Per Account and your Churn rate.” Hmm… If you can get lost in that sentence, imagine finding your way through a complex spreadsheet of the actual data. “Before ChartMogul we used to create a spreadsheet with monthly figures for our key metrics and there was a fair amount of manual work. It was actually quite time consuming trying to determine accurate numbers.” When looking for help with business metric insights, they knew they required a high level of detail. And they were happy to find that in ChartMogul. Read up on the metrics mentioned above with the Ultimate SaaS Metrics Cheat Sheet And now? With Recurly’s multiple webhooks, Percy and Andrew never have to worry about dealing with their data or importing anything. Metrics management is a cleaner, hands-off experience, one that’s actually proactive to them through regular notifications. “Our metrics are always up to date and we get fired an email for every transaction event (including MRR expansion/contraction which was invisible for us before).” Resource Guru’s calendar view, showing the availability and utilization of team members. Next-stage dilemmas: SaaS Pricing Resource Guru came across a common dilemma for growing startups: do we change our pricing? SaaS founders in Berlin admitted to their initial pricing being a bit random. For Resource Guru, when they were determining their initial pricing model, they took notes from SaaS pioneers. But after nearly four years, the user band model they chose didn’t fit so well. Here is where ChartMogul comes in handy again. “I think my most valued ChartMogul feature is the ability to segment data and group pricing plans.” We introduced segmentation so that SaaS companies could go far beyond the high-level metrics and learn about critical trends and opportunities in their business. Optimizing pricing plans is one of those things. Resource Guru’s hunch The “band” pricing model could be unfair to customers who would end up paying much more per user if they upgraded. And perhaps the current scheme was disincentivizing any plan upgrades for that reason. Well, what does the data say? Resource Guru used ChartMogul to segment their customer base. “With ChartMogul’s custom plan groups it’s very easy to group customers by pricing plans and generate charts to display data for those groups.” They saw in their customer data that accounts were bunching at the user limit of each plan, signaling that customers were avoiding upgrades. Here’s an example of a chart in ChartMogul that displays customer segmentation. In this particular image, the chart compares MRR per marketing channel. Curious about other ways segmentation can help a SaaS business? Read Deep segmentation in SaaS End result? With their hunch validated by the data in ChartMogul, Resource Guru rolled out a new price-per-user model for three different plan levels, modeled off today’s SaaS darling, Slack. They think this works out best for the customer: “You benefit from a consistent price per person and simply choose which features you need.” They also now offer annual plans wherein the subscriber gets two months free. They detailed this change in a great blog post, with full transparency to their customers and helpful advice to any other SaaS companies who are contemplating a similar move. Worth a read! (You can also take a look at “What to do when your SaaS pricing is wrong.”) So what’s next? “We’ll be conducting further pricing experiments in the future,” says Percy. Which he admits is possible because it’s so easy to learn from the data in ChartMogul. “[ChartMogul] is really valuable when it comes to evaluating pricing changes and if we had to do this manually it would be a total headache.” Onward and upward, to Resource Guru! We look forward to continue helping them grow and solve whatever challenges they face. What’s next for you? What changes and experiments would you do with your business if only you had the data? Well, you can find out with our free trial. Sign up with ChartMogul. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts. Upload manual data and pipe in customer attributes from Google Sheets, or via API, and start building a better subscription business. And what would you accomplish with extra time and money on your hands from easy calendar management? Try Resource Guru for free. Share and follow! NEW on @ChartMogul: How @resourceguruapp uses Segmentation to optimize pricing https://t.co/0wZCWvOTAL #SaaS pic.twitter.com/HP7yye1hd5 — ChartMogul (@ChartMogul) April 19, 2016

[INST] How Resource Guru uses Segmentation to optimize pricing [/INST]

Resource Guru is an app to make your life easier. Not just easier, but to make it run smoother, faster, and even in harmony with all the other lives running around your office or organization. With ease, flexibility and optimal visibility, you can schedule employees and freelancers, meeting rooms and equipment. Resource Guru tracks multiple time zones to accommodate international teams, and automatically prevents any overbookings or schedule clashes. No need to fumble with spreadsheets, Google Calendars, or update emails. It’s no surprise, then, that their website is littered with customer testimonials. (Perhaps “littered” isn’t the right word in this case — decorated? bejeweled?) The app suits a wide array of users, from project managers coordinating multiple projects, to scheduling a remote team, to any kind of organization that shares equipment, such as a university newspaper or a professional recording studio. “We’ve been attracting incredible customers like Publicis, Saatchi & Saatchi, Yahoo!, Deloitte, Virgin Media, VMware and ASOS and now have a diverse range of customers in over 90 countries around the world.” And they all love it because the resource management app saves time and serious money. If you’re skeptical, take a look at their Savings Calculator: When Resource Guru was a young grasshopper We spoke with Percy Stilwell, one of Resource Guru’s cofounders, about the evolution of the app and their company. He and Andrew Rogoff began developing it in 2009 while working in marketing agencies. “…we experienced the headaches of resource scheduling. In almost every agency we worked in, people were using ugly spreadsheets to schedule their teams.” So began Resource Guru’s journey. “We developed a clickable prototype and did a lot of usability research with project managers and resource managers to ensure we got the product right.” With research done and product tweaked, Percy and Andrew launched Resource Guru in May 2012. Now the company’s HQ is in London, but the team has a remote, work-from-anywhere culture — and they continue to strive to improve their product. Their latest developments include adding time off, managing overtime, and adjusting availability for major holidays (e.g.- the chaotic time around Christmas). To learn more about where the Resource Guru app is now and how to use it, check out this great product video: Give spreadsheets the boot Resource Guru and ChartMogul have something in common. We felt similar pain points. In a way, we both set out to make clunky spreadsheets obsolete — headaches, confusion, frustration, be gone. Simplicity, clarity, automation — hello! Resource Guru smooths out the numerous tangled schedules of an organization’s resources, so that all resources are maximized and everyone can work more productively and efficiently. ChartMogul sifts through a sea of data to define key metrics that clearly track a company’s performance, so that decision makers can work quickly and effectively to optimize their business. But while Resource Guru was doing an excellent job making their customers’ lives easier, they found themselves facing that same old frustration: dealing in messy spreadsheets. As their SaaS business grew, they struggled to determine accurate data about their growth, data they could analyze and act upon. Data that could monitor revenue and maximize profits. Cue ChartMogul. “How should we spend on marketing?” Before ChartMogul Like any SaaS business, Resource Guru wanted to track their revenue growth, and they also wanted to understand where to invest in that growth. The thing with SaaS metrics is, though… If you want to know one thing, you usually need to know other metrics first. You must track them all to get to whatever key indicator matters most to you. That’s how it can get messy. For example, Percy mentioned wanting to know how best to allocate their marketing spend. “In order to spend efficiently on marketing, you need to know your target Cost Per Acquisition, and in order to define that you need to know your Lifetime Value per customer. Before you can work out your LTV, you need to know your Average Revenue Per Account and your Churn rate.” Hmm… If you can get lost in that sentence, imagine finding your way through a complex spreadsheet of the actual data. “Before ChartMogul we used to create a spreadsheet with monthly figures for our key metrics and there was a fair amount of manual work. It was actually quite time consuming trying to determine accurate numbers.” When looking for help with business metric insights, they knew they required a high level of detail. And they were happy to find that in ChartMogul. Read up on the metrics mentioned above with the Ultimate SaaS Metrics Cheat Sheet And now? With Recurly’s multiple webhooks, Percy and Andrew never have to worry about dealing with their data or importing anything. Metrics management is a cleaner, hands-off experience, one that’s actually proactive to them through regular notifications. “Our metrics are always up to date and we get fired an email for every transaction event (including MRR expansion/contraction which was invisible for us before).” Resource Guru’s calendar view, showing the availability and utilization of team members. Next-stage dilemmas: SaaS Pricing Resource Guru came across a common dilemma for growing startups: do we change our pricing? SaaS founders in Berlin admitted to their initial pricing being a bit random. For Resource Guru, when they were determining their initial pricing model, they took notes from SaaS pioneers. But after nearly four years, the user band model they chose didn’t fit so well. Here is where ChartMogul comes in handy again. “I think my most valued ChartMogul feature is the ability to segment data and group pricing plans.” We introduced segmentation so that SaaS companies could go far beyond the high-level metrics and learn about critical trends and opportunities in their business. Optimizing pricing plans is one of those things. Resource Guru’s hunch The “band” pricing model could be unfair to customers who would end up paying much more per user if they upgraded. And perhaps the current scheme was disincentivizing any plan upgrades for that reason. Well, what does the data say? Resource Guru used ChartMogul to segment their customer base. “With ChartMogul’s custom plan groups it’s very easy to group customers by pricing plans and generate charts to display data for those groups.” They saw in their customer data that accounts were bunching at the user limit of each plan, signaling that customers were avoiding upgrades. Here’s an example of a chart in ChartMogul that displays customer segmentation. In this particular image, the chart compares MRR per marketing channel. Curious about other ways segmentation can help a SaaS business? Read Deep segmentation in SaaS End result? With their hunch validated by the data in ChartMogul, Resource Guru rolled out a new price-per-user model for three different plan levels, modeled off today’s SaaS darling, Slack. They think this works out best for the customer: “You benefit from a consistent price per person and simply choose which features you need.” They also now offer annual plans wherein the subscriber gets two months free. They detailed this change in a great blog post, with full transparency to their customers and helpful advice to any other SaaS companies who are contemplating a similar move. Worth a read! (You can also take a look at “What to do when your SaaS pricing is wrong.”) So what’s next? “We’ll be conducting further pricing experiments in the future,” says Percy. Which he admits is possible because it’s so easy to learn from the data in ChartMogul. “[ChartMogul] is really valuable when it comes to evaluating pricing changes and if we had to do this manually it would be a total headache.” Onward and upward, to Resource Guru! We look forward to continue helping them grow and solve whatever challenges they face. What’s next for you? What changes and experiments would you do with your business if only you had the data? Well, you can find out with our free trial. Sign up with ChartMogul. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts. Upload manual data and pipe in customer attributes from Google Sheets, or via API, and start building a better subscription business. And what would you accomplish with extra time and money on your hands from easy calendar management? Try Resource Guru for free. Share and follow! NEW on @ChartMogul: How @resourceguruapp uses Segmentation to optimize pricing https://t.co/0wZCWvOTAL #SaaS pic.twitter.com/HP7yye1hd5 — ChartMogul (@ChartMogul) April 19, 2016

<sys> [INST] How Resource Guru uses Segmentation to optimize pricing [/INST] Resource Guru is an app to make your life easier. Not just easier, but to make it run smoother, faster, and even in harmony with all the other lives running around your office or organization. With ease, flexibility and optimal visibility, you can schedule employees and freelancers, meeting rooms and equipment. Resource Guru tracks multiple time zones to accommodate international teams, and automatically prevents any overbookings or schedule clashes. No need to fumble with spreadsheets, Google Calendars, or update emails. It’s no surprise, then, that their website is littered with customer testimonials. (Perhaps “littered” isn’t the right word in this case — decorated? bejeweled?) The app suits a wide array of users, from project managers coordinating multiple projects, to scheduling a remote team, to any kind of organization that shares equipment, such as a university newspaper or a professional recording studio. “We’ve been attracting incredible customers like Publicis, Saatchi & Saatchi, Yahoo!, Deloitte, Virgin Media, VMware and ASOS and now have a diverse range of customers in over 90 countries around the world.” And they all love it because the resource management app saves time and serious money. If you’re skeptical, take a look at their Savings Calculator: When Resource Guru was a young grasshopper We spoke with Percy Stilwell, one of Resource Guru’s cofounders, about the evolution of the app and their company. He and Andrew Rogoff began developing it in 2009 while working in marketing agencies. “…we experienced the headaches of resource scheduling. In almost every agency we worked in, people were using ugly spreadsheets to schedule their teams.” So began Resource Guru’s journey. “We developed a clickable prototype and did a lot of usability research with project managers and resource managers to ensure we got the product right.” With research done and product tweaked, Percy and Andrew launched Resource Guru in May 2012. Now the company’s HQ is in London, but the team has a remote, work-from-anywhere culture — and they continue to strive to improve their product. Their latest developments include adding time off, managing overtime, and adjusting availability for major holidays (e.g.- the chaotic time around Christmas). To learn more about where the Resource Guru app is now and how to use it, check out this great product video: Give spreadsheets the boot Resource Guru and ChartMogul have something in common. We felt similar pain points. In a way, we both set out to make clunky spreadsheets obsolete — headaches, confusion, frustration, be gone. Simplicity, clarity, automation — hello! Resource Guru smooths out the numerous tangled schedules of an organization’s resources, so that all resources are maximized and everyone can work more productively and efficiently. ChartMogul sifts through a sea of data to define key metrics that clearly track a company’s performance, so that decision makers can work quickly and effectively to optimize their business. But while Resource Guru was doing an excellent job making their customers’ lives easier, they found themselves facing that same old frustration: dealing in messy spreadsheets. As their SaaS business grew, they struggled to determine accurate data about their growth, data they could analyze and act upon. Data that could monitor revenue and maximize profits. Cue ChartMogul. “How should we spend on marketing?” Before ChartMogul Like any SaaS business, Resource Guru wanted to track their revenue growth, and they also wanted to understand where to invest in that growth. The thing with SaaS metrics is, though… If you want to know one thing, you usually need to know other metrics first. You must track them all to get to whatever key indicator matters most to you. That’s how it can get messy. For example, Percy mentioned wanting to know how best to allocate their marketing spend. “In order to spend efficiently on marketing, you need to know your target Cost Per Acquisition, and in order to define that you need to know your Lifetime Value per customer. Before you can work out your LTV, you need to know your Average Revenue Per Account and your Churn rate.” Hmm… If you can get lost in that sentence, imagine finding your way through a complex spreadsheet of the actual data. “Before ChartMogul we used to create a spreadsheet with monthly figures for our key metrics and there was a fair amount of manual work. It was actually quite time consuming trying to determine accurate numbers.” When looking for help with business metric insights, they knew they required a high level of detail. And they were happy to find that in ChartMogul. Read up on the metrics mentioned above with the Ultimate SaaS Metrics Cheat Sheet And now? With Recurly’s multiple webhooks, Percy and Andrew never have to worry about dealing with their data or importing anything. Metrics management is a cleaner, hands-off experience, one that’s actually proactive to them through regular notifications. “Our metrics are always up to date and we get fired an email for every transaction event (including MRR expansion/contraction which was invisible for us before).” Resource Guru’s calendar view, showing the availability and utilization of team members. Next-stage dilemmas: SaaS Pricing Resource Guru came across a common dilemma for growing startups: do we change our pricing? SaaS founders in Berlin admitted to their initial pricing being a bit random. For Resource Guru, when they were determining their initial pricing model, they took notes from SaaS pioneers. But after nearly four years, the user band model they chose didn’t fit so well. Here is where ChartMogul comes in handy again. “I think my most valued ChartMogul feature is the ability to segment data and group pricing plans.” We introduced segmentation so that SaaS companies could go far beyond the high-level metrics and learn about critical trends and opportunities in their business. Optimizing pricing plans is one of those things. Resource Guru’s hunch The “band” pricing model could be unfair to customers who would end up paying much more per user if they upgraded. And perhaps the current scheme was disincentivizing any plan upgrades for that reason. Well, what does the data say? Resource Guru used ChartMogul to segment their customer base. “With ChartMogul’s custom plan groups it’s very easy to group customers by pricing plans and generate charts to display data for those groups.” They saw in their customer data that accounts were bunching at the user limit of each plan, signaling that customers were avoiding upgrades. Here’s an example of a chart in ChartMogul that displays customer segmentation. In this particular image, the chart compares MRR per marketing channel. Curious about other ways segmentation can help a SaaS business? Read Deep segmentation in SaaS End result? With their hunch validated by the data in ChartMogul, Resource Guru rolled out a new price-per-user model for three different plan levels, modeled off today’s SaaS darling, Slack. They think this works out best for the customer: “You benefit from a consistent price per person and simply choose which features you need.” They also now offer annual plans wherein the subscriber gets two months free. They detailed this change in a great blog post, with full transparency to their customers and helpful advice to any other SaaS companies who are contemplating a similar move. Worth a read! (You can also take a look at “What to do when your SaaS pricing is wrong.”) So what’s next? “We’ll be conducting further pricing experiments in the future,” says Percy. Which he admits is possible because it’s so easy to learn from the data in ChartMogul. “[ChartMogul] is really valuable when it comes to evaluating pricing changes and if we had to do this manually it would be a total headache.” Onward and upward, to Resource Guru! We look forward to continue helping them grow and solve whatever challenges they face. What’s next for you? What changes and experiments would you do with your business if only you had the data? Well, you can find out with our free trial. Sign up with ChartMogul. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts. Upload manual data and pipe in customer attributes from Google Sheets, or via API, and start building a better subscription business. And what would you accomplish with extra time and money on your hands from easy calendar management? Try Resource Guru for free. Share and follow! NEW on @ChartMogul: How @resourceguruapp uses Segmentation to optimize pricing https://t.co/0wZCWvOTAL #SaaS pic.twitter.com/HP7yye1hd5 — ChartMogul (@ChartMogul) April 19, 2016 </sys

Net vs. Gross Revenue Churn: Best Practices. A lot has been written (here & here) on the fantastic dynamics of being a SaaS company with a net-negative revenue churn rate (or negative MRR churn rate). Negative Churn: A Reminder Net-negative revenue churn happens when the positive impact of account expansions outweigh the negative impact of account cancellations and downgrades. For example, you might start the year with 100 customers all paying $10 per month ($1,000 MRR total). 10 cancel during the course of the year, but of the 90 remaining, 20 upgrade to a higher plan at $20 per month. The change to this cohort of 100 customers is therefore a net increase of 10% in MRR over the year, despite the lost accounts. However, if you’re trying to understand your churn and reduce it, then focusing too hard on net revenue churn could be a little dangerous. Net churn merges together two somewhat unrelated metrics: Lost revenue from (probably unhappy) cancelling customers Gained revenue from (probably happy) customers upgrading Introducing Gross MRR Churn Rate In most cases (at least internally) it makes much more sense to focus on gross revenue churn (or Gross MRR churn rate). This gives you a more realistic picture of how much revenue you are losing without sugar-coating the numbers. That’s why we split out Gross MRR churn rate from Net MRR churn rate in the ChartMogul app. The Gross MRR churn rate number will always be higher than the Net number, and by definition can’t be a negative value. Another trick, to help paint the ugliest possible picture of churn for your internal KPIs is to recognize churn at the time when customers cancel and not at the end of their paid-up billing periods. This will make your churn cohort analyses much more meaningful, in terms of understanding customer behaviour. Now to backtrack a bit; if you do have net-negative revenue churn you will want to take this into consideration, particularly when planning what to spend on acquiring a customer and making cash flow projections. E.g. if $1 of MRR today is going to be worth $1.10 in 12 months then this changes what you will be willing to spend to acquire a $1 of new MRR. Finally, if you are fundraising, having a negative churn rate helps create a great story to potential investors. But for trying to understand and reduce churn I recommend focussing on the gross number and not the net.

[INST] Net vs [/INST]

Gross Revenue Churn: Best Practices. A lot has been written (here & here) on the fantastic dynamics of being a SaaS company with a net-negative revenue churn rate (or negative MRR churn rate). Negative Churn: A Reminder Net-negative revenue churn happens when the positive impact of account expansions outweigh the negative impact of account cancellations and downgrades. For example, you might start the year with 100 customers all paying $10 per month ($1,000 MRR total). 10 cancel during the course of the year, but of the 90 remaining, 20 upgrade to a higher plan at $20 per month. The change to this cohort of 100 customers is therefore a net increase of 10% in MRR over the year, despite the lost accounts. However, if you’re trying to understand your churn and reduce it, then focusing too hard on net revenue churn could be a little dangerous. Net churn merges together two somewhat unrelated metrics: Lost revenue from (probably unhappy) cancelling customers Gained revenue from (probably happy) customers upgrading Introducing Gross MRR Churn Rate In most cases (at least internally) it makes much more sense to focus on gross revenue churn (or Gross MRR churn rate). This gives you a more realistic picture of how much revenue you are losing without sugar-coating the numbers. That’s why we split out Gross MRR churn rate from Net MRR churn rate in the ChartMogul app. The Gross MRR churn rate number will always be higher than the Net number, and by definition can’t be a negative value. Another trick, to help paint the ugliest possible picture of churn for your internal KPIs is to recognize churn at the time when customers cancel and not at the end of their paid-up billing periods. This will make your churn cohort analyses much more meaningful, in terms of understanding customer behaviour. Now to backtrack a bit; if you do have net-negative revenue churn you will want to take this into consideration, particularly when planning what to spend on acquiring a customer and making cash flow projections. E.g. if $1 of MRR today is going to be worth $1.10 in 12 months then this changes what you will be willing to spend to acquire a $1 of new MRR. Finally, if you are fundraising, having a negative churn rate helps create a great story to potential investors. But for trying to understand and reduce churn I recommend focussing on the gross number and not the net.

<sys> [INST] Net vs [/INST] Gross Revenue Churn: Best Practices. A lot has been written (here & here) on the fantastic dynamics of being a SaaS company with a net-negative revenue churn rate (or negative MRR churn rate). Negative Churn: A Reminder Net-negative revenue churn happens when the positive impact of account expansions outweigh the negative impact of account cancellations and downgrades. For example, you might start the year with 100 customers all paying $10 per month ($1,000 MRR total). 10 cancel during the course of the year, but of the 90 remaining, 20 upgrade to a higher plan at $20 per month. The change to this cohort of 100 customers is therefore a net increase of 10% in MRR over the year, despite the lost accounts. However, if you’re trying to understand your churn and reduce it, then focusing too hard on net revenue churn could be a little dangerous. Net churn merges together two somewhat unrelated metrics: Lost revenue from (probably unhappy) cancelling customers Gained revenue from (probably happy) customers upgrading Introducing Gross MRR Churn Rate In most cases (at least internally) it makes much more sense to focus on gross revenue churn (or Gross MRR churn rate). This gives you a more realistic picture of how much revenue you are losing without sugar-coating the numbers. That’s why we split out Gross MRR churn rate from Net MRR churn rate in the ChartMogul app. The Gross MRR churn rate number will always be higher than the Net number, and by definition can’t be a negative value. Another trick, to help paint the ugliest possible picture of churn for your internal KPIs is to recognize churn at the time when customers cancel and not at the end of their paid-up billing periods. This will make your churn cohort analyses much more meaningful, in terms of understanding customer behaviour. Now to backtrack a bit; if you do have net-negative revenue churn you will want to take this into consideration, particularly when planning what to spend on acquiring a customer and making cash flow projections. E.g. if $1 of MRR today is going to be worth $1.10 in 12 months then this changes what you will be willing to spend to acquire a $1 of new MRR. Finally, if you are fundraising, having a negative churn rate helps create a great story to potential investors. But for trying to understand and reduce churn I recommend focussing on the gross number and not the net. </sys

A Simplified Method for Forecasting MRR Growth. The spreadsheet used to make the charts included in this blog post can be found here. Ugh! It’s budget season. How many meteorologists does it take to accurately predict the weather? Nobody knows, it’s never been done. I’ve built a lot of revenue and growth models in my life. It’s not something that I particularly enjoy, but it’s something that I think I do a pretty reasonable job of. It’s sort of like being the weather forecaster — perfection unattainable. One thing I do enjoy is going back to look at the models that I’ve built in the past. It’s fun to have hindsight on assumptions that you made in your model. It’s also sometimes humbling to look at models that were outrageously aggressive. I just reviewed a forecasting model that I built 6 months ago where actual MRR is going to beat the modeled prediction for MRR a month early. In this case, a 2-month period with substantially lower than normal churn caused the model to miss the mark. The funny thing is that even with hindsight, we can’t really put our finger on the reason for those 2 months having abnormally low churn. So what is the best way to model MRR growth for SaaS businesses? I once built a model, and the response I got to it was very lackluster It’s not complex enough. On another occasion I was told $15M ARR is the number I want, work the model back from that. To a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Tweet this quote If we are being honest, to a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Because of that truth, MRR forecasts and goals many times get set based on emotion, a nice round number, or what you should do because that’s what other companies of your size have done. There’s nothing wrong with that, but this model should be a good sanity check. So let’s dive in. There are probably 1001 ways to model out a forecast for MRR. What I’m going to suggest is a very quick and dirty way that seems to work best for me, while pointing out some of the pitfalls that I’ve encountered. To start with, I’m going to assume that your business or product has at a minimum a few years of history. Should that not be the case, you will need to try a different approach. I’m also going to assume that you use a product like ChartMogul that allows you to have an in-depth understanding of your historical MRR changes by month. Simplicity The model that I like to use is very simplistic. It’s based on month-over-month growth rates of MRR. The reason I pick a model that is so simplistic is that I fundamentally believe that for every assumption you make in a model, the greater the error introduced into the model, many times in a compounding way. For every assumption you make in a model, the greater the error introduced into the model. Tweet this quote The guy that told me It’s not complex enough, what he really meant was he wanted something analogous to a zero-based budget model that predicted MRR growth based on growth channels, organic and paid — starting from the ground up. That model started at the top of the funnel estimating conversion rates on websites and multiple app stores for organic traffic. Likewise, for paid acquisition, it estimated conversion rates on advertising through various channels. Then once a customer converted, it accounted for retention / expansion / contraction of users across the various platforms we had. Had the model worked it would have been beautiful, but it didn’t. Our funnel was very complex: we were aggressively ramping up our advertising and we didn’t have a good enough understanding of the paid acquisition funnel metrics. I think a model like this might work for more mature companies that have a lot of data, measure and track that data, and have the time and patience to build out the model. But most SaaS businesses don’t have this luxury. There are 5 components that make up MRR. You could build your model at that layer (new business, expansion, contraction, churn, and reactivation) but frankly that’s five things that could go wrong. Each one of them is a complex thing to model in and of itself. Or you could even go a layer lower, modeling the things that make up each of the five components — but again — that is destined for error without a lot of effort and reliable historical data. I start my forecasting models by first building out the history of the month-to-month growth rate of MRR. Step 1 is to export my historical MRR data from ChartMogul into a spreadsheet. History Knowing the history of a business will help you understand the present and predict the future. This should help you understand a few possible trends. Does the company see seasonality in its growth? Has the company noticed a slight decline in growth rate as it grows? Are there any other anomalies that stand out? I like to not only look at the history by year, by overall average, but I also like to do a weighted average. What happened last year is probably more indicative of future growth than what happened 5 years ago. Usually, a picture is worth 1000 words. In this fictitious example a few things stand out: It does indeed look like the growth rate is reducing over time. As the company ages, the growth has slowed — it’s a lot harder to grow big numbers than small numbers. April 2020 stands out like a sore thumb. I’m sure you can guess what happened there. I wouldn’t expect future Aprils to take on this same behavior, however, your business may have some sort of impact in general in 2021 and beyond that may need to be accounted for. While it’s not super obvious, it looks like there might possibly be some seasonality in growth? If we dig into this data a bit further by normalizing the data on an annual basis, a few things stand out even further. What we see is that there indeed seems to be some seasonality. December through March have historically been the better growth months while July through September have been slower months. That said, the seasonality isn’t extreme such as some companies that do all of their business in the months of November and December. I should point out that I like to use shades of grey to represent years, using a very light shade as you go further back. The reason for this is that when I look at trends I want the more recent years to stand out more — I’m less interested in trends from 2016. Future The next thing I do is look to the future, carefully. What are the things that the company is doing that might impact your growth rates? Are there major product improvements or changes in go-to-market strategies? This is probably where a lot of models go sideways. They become overly optimistic about what the future holds. As I mentioned before, the company growth rate tends to slow down as a company ages up until it’s about 12 years old where it then stabilizes. So as you build your model and you begin to estimate future monthly growth rates keep in mind that gravity — or in this case the size of your company — is pulling against you. Source of Data: SaaS Capital At this point, you could dig deeper if you desire. Is there seasonality in the components that make up your MRR, such as in your New MRR or your Churn MRR? But that’s for another day. Scenarios: 30-60-90 Model I don’t know who introduced this methodology to me, possibly Brad Feld, but it’s something that we used regularly in my last company and it was a really good way of framing forecasts and budgets. Here is the way that it works. The 90% Case represents the base case. This model should be met or exceeded 9 out of 10 times. So if we use this model for the next decade, it should only miss one time. As we saw in 2020, sometimes things happen that just can’t be accounted for in a simplistic model. The 60% Case represents a more aggressive case. In this model, you are only 60% confident that you will hit the target, or 6 of 10 times you will meet the mark. The 30% Case represents the most aggressive case. In this model, you expect to only hit the target 3 of 10 times. While this topic is just looking at forecasting MRR, this same concept can be applied to financial budgets and forecasts. Typically the 30% model while much more aggressive in revenue also has accompanying additional expenses — as growth usually doesn’t come for free. We now start working through each scenario, only altering the monthly growth rates. Here is where the cognitive dissonance starts to kick in. On one hand, we believe that we have all of these great things that we are going to do to increase our growth. On the other hand, we know that as we get larger our growth rates will tend to slow. Every business is different, and the approach you take is probably unique to your situation. For the sake of simplicity and given that my data set is for a fake company, I’m going to do the following: For the 90% case, I’m going to assume that we see growth rates that are 100% of last year’s growth rates. For the 60% case, I’ll assume that we do 10% better than we did last year. And for the 30% case, I’ll assume that we beat last year’s growth rates by 25%. I’m also going to assume that the huge decline in growth in April of 2020 was an anomaly so I’ll factor that out. I’m also going to smooth out a couple of months where I believe the peaks and valleys aren’t warranted. Finally, I’m going to assume that in this particular case, I don’t feel like Covid-19 has any appreciable impact on my 2021 growth. I picked 2020 as the baseline, you could have easily used a weighted average or really a variety of other methods. I think much of it comes down to how realistic you believe 2020 was representative of how things will go moving forward. Again, I like to visualize the data and the forecasts including previous years’ data as I find that it helps to drive home a model based more on reality. Nonetheless, you can change this to be your own, be more aggressive, less aggressive, it’s up to you. You’ll notice that up until this point there has been no discussion on the actual MRR of the company in this data set. Ignoring that to start with, and focusing solely on the monthly growth rates removes the emotion and bias from the forecast. Really, at this point, it comes down to 12 assumptions that you have made, all of which are backed up by historical data that is very relevant in where your growth will likely be in the following years. Finally, we now add the MRR to the equation to see where these growth rates project the company to be over the course of 2021. These 3 scenarios would put this fictitious company at an annualized growth rate of 34% in the most conservative case and 44% in the most aggressive scenario. If we look at a company that is roughly an $8M ARR company in the Growth Rate by ARR graphic above, we’ll see that these projections would put this company at just shy of the 50th percentile in growth rates for companies of its size. So why do multiple scenarios? I think it’s a good exercise to go through — granted there is usually a cost that comes with stretching growth. Examples might include extra advertising spend, hiring another account representative, etc. I also highly encourage you to talk to your team about ideas as to how to hit some of the stretch scenarios. It tends to help get buy-in which is always a good thing when an annual MRR goal comes down from a high.

[INST] A Simplified Method for Forecasting MRR Growth [/INST]

The spreadsheet used to make the charts included in this blog post can be found here. Ugh! It’s budget season. How many meteorologists does it take to accurately predict the weather? Nobody knows, it’s never been done. I’ve built a lot of revenue and growth models in my life. It’s not something that I particularly enjoy, but it’s something that I think I do a pretty reasonable job of. It’s sort of like being the weather forecaster — perfection unattainable. One thing I do enjoy is going back to look at the models that I’ve built in the past. It’s fun to have hindsight on assumptions that you made in your model. It’s also sometimes humbling to look at models that were outrageously aggressive. I just reviewed a forecasting model that I built 6 months ago where actual MRR is going to beat the modeled prediction for MRR a month early. In this case, a 2-month period with substantially lower than normal churn caused the model to miss the mark. The funny thing is that even with hindsight, we can’t really put our finger on the reason for those 2 months having abnormally low churn. So what is the best way to model MRR growth for SaaS businesses? I once built a model, and the response I got to it was very lackluster It’s not complex enough. On another occasion I was told $15M ARR is the number I want, work the model back from that. To a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Tweet this quote If we are being honest, to a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Because of that truth, MRR forecasts and goals many times get set based on emotion, a nice round number, or what you should do because that’s what other companies of your size have done. There’s nothing wrong with that, but this model should be a good sanity check. So let’s dive in. There are probably 1001 ways to model out a forecast for MRR. What I’m going to suggest is a very quick and dirty way that seems to work best for me, while pointing out some of the pitfalls that I’ve encountered. To start with, I’m going to assume that your business or product has at a minimum a few years of history. Should that not be the case, you will need to try a different approach. I’m also going to assume that you use a product like ChartMogul that allows you to have an in-depth understanding of your historical MRR changes by month. Simplicity The model that I like to use is very simplistic. It’s based on month-over-month growth rates of MRR. The reason I pick a model that is so simplistic is that I fundamentally believe that for every assumption you make in a model, the greater the error introduced into the model, many times in a compounding way. For every assumption you make in a model, the greater the error introduced into the model. Tweet this quote The guy that told me It’s not complex enough, what he really meant was he wanted something analogous to a zero-based budget model that predicted MRR growth based on growth channels, organic and paid — starting from the ground up. That model started at the top of the funnel estimating conversion rates on websites and multiple app stores for organic traffic. Likewise, for paid acquisition, it estimated conversion rates on advertising through various channels. Then once a customer converted, it accounted for retention / expansion / contraction of users across the various platforms we had. Had the model worked it would have been beautiful, but it didn’t. Our funnel was very complex: we were aggressively ramping up our advertising and we didn’t have a good enough understanding of the paid acquisition funnel metrics. I think a model like this might work for more mature companies that have a lot of data, measure and track that data, and have the time and patience to build out the model. But most SaaS businesses don’t have this luxury. There are 5 components that make up MRR. You could build your model at that layer (new business, expansion, contraction, churn, and reactivation) but frankly that’s five things that could go wrong. Each one of them is a complex thing to model in and of itself. Or you could even go a layer lower, modeling the things that make up each of the five components — but again — that is destined for error without a lot of effort and reliable historical data. I start my forecasting models by first building out the history of the month-to-month growth rate of MRR. Step 1 is to export my historical MRR data from ChartMogul into a spreadsheet. History Knowing the history of a business will help you understand the present and predict the future. This should help you understand a few possible trends. Does the company see seasonality in its growth? Has the company noticed a slight decline in growth rate as it grows? Are there any other anomalies that stand out? I like to not only look at the history by year, by overall average, but I also like to do a weighted average. What happened last year is probably more indicative of future growth than what happened 5 years ago. Usually, a picture is worth 1000 words. In this fictitious example a few things stand out: It does indeed look like the growth rate is reducing over time. As the company ages, the growth has slowed — it’s a lot harder to grow big numbers than small numbers. April 2020 stands out like a sore thumb. I’m sure you can guess what happened there. I wouldn’t expect future Aprils to take on this same behavior, however, your business may have some sort of impact in general in 2021 and beyond that may need to be accounted for. While it’s not super obvious, it looks like there might possibly be some seasonality in growth? If we dig into this data a bit further by normalizing the data on an annual basis, a few things stand out even further. What we see is that there indeed seems to be some seasonality. December through March have historically been the better growth months while July through September have been slower months. That said, the seasonality isn’t extreme such as some companies that do all of their business in the months of November and December. I should point out that I like to use shades of grey to represent years, using a very light shade as you go further back. The reason for this is that when I look at trends I want the more recent years to stand out more — I’m less interested in trends from 2016. Future The next thing I do is look to the future, carefully. What are the things that the company is doing that might impact your growth rates? Are there major product improvements or changes in go-to-market strategies? This is probably where a lot of models go sideways. They become overly optimistic about what the future holds. As I mentioned before, the company growth rate tends to slow down as a company ages up until it’s about 12 years old where it then stabilizes. So as you build your model and you begin to estimate future monthly growth rates keep in mind that gravity — or in this case the size of your company — is pulling against you. Source of Data: SaaS Capital At this point, you could dig deeper if you desire. Is there seasonality in the components that make up your MRR, such as in your New MRR or your Churn MRR? But that’s for another day. Scenarios: 30-60-90 Model I don’t know who introduced this methodology to me, possibly Brad Feld, but it’s something that we used regularly in my last company and it was a really good way of framing forecasts and budgets. Here is the way that it works. The 90% Case represents the base case. This model should be met or exceeded 9 out of 10 times. So if we use this model for the next decade, it should only miss one time. As we saw in 2020, sometimes things happen that just can’t be accounted for in a simplistic model. The 60% Case represents a more aggressive case. In this model, you are only 60% confident that you will hit the target, or 6 of 10 times you will meet the mark. The 30% Case represents the most aggressive case. In this model, you expect to only hit the target 3 of 10 times. While this topic is just looking at forecasting MRR, this same concept can be applied to financial budgets and forecasts. Typically the 30% model while much more aggressive in revenue also has accompanying additional expenses — as growth usually doesn’t come for free. We now start working through each scenario, only altering the monthly growth rates. Here is where the cognitive dissonance starts to kick in. On one hand, we believe that we have all of these great things that we are going to do to increase our growth. On the other hand, we know that as we get larger our growth rates will tend to slow. Every business is different, and the approach you take is probably unique to your situation. For the sake of simplicity and given that my data set is for a fake company, I’m going to do the following: For the 90% case, I’m going to assume that we see growth rates that are 100% of last year’s growth rates. For the 60% case, I’ll assume that we do 10% better than we did last year. And for the 30% case, I’ll assume that we beat last year’s growth rates by 25%. I’m also going to assume that the huge decline in growth in April of 2020 was an anomaly so I’ll factor that out. I’m also going to smooth out a couple of months where I believe the peaks and valleys aren’t warranted. Finally, I’m going to assume that in this particular case, I don’t feel like Covid-19 has any appreciable impact on my 2021 growth. I picked 2020 as the baseline, you could have easily used a weighted average or really a variety of other methods. I think much of it comes down to how realistic you believe 2020 was representative of how things will go moving forward. Again, I like to visualize the data and the forecasts including previous years’ data as I find that it helps to drive home a model based more on reality. Nonetheless, you can change this to be your own, be more aggressive, less aggressive, it’s up to you. You’ll notice that up until this point there has been no discussion on the actual MRR of the company in this data set. Ignoring that to start with, and focusing solely on the monthly growth rates removes the emotion and bias from the forecast. Really, at this point, it comes down to 12 assumptions that you have made, all of which are backed up by historical data that is very relevant in where your growth will likely be in the following years. Finally, we now add the MRR to the equation to see where these growth rates project the company to be over the course of 2021. These 3 scenarios would put this fictitious company at an annualized growth rate of 34% in the most conservative case and 44% in the most aggressive scenario. If we look at a company that is roughly an $8M ARR company in the Growth Rate by ARR graphic above, we’ll see that these projections would put this company at just shy of the 50th percentile in growth rates for companies of its size. So why do multiple scenarios? I think it’s a good exercise to go through — granted there is usually a cost that comes with stretching growth. Examples might include extra advertising spend, hiring another account representative, etc. I also highly encourage you to talk to your team about ideas as to how to hit some of the stretch scenarios. It tends to help get buy-in which is always a good thing when an annual MRR goal comes down from a high.

<sys> [INST] A Simplified Method for Forecasting MRR Growth [/INST] The spreadsheet used to make the charts included in this blog post can be found here. Ugh! It’s budget season. How many meteorologists does it take to accurately predict the weather? Nobody knows, it’s never been done. I’ve built a lot of revenue and growth models in my life. It’s not something that I particularly enjoy, but it’s something that I think I do a pretty reasonable job of. It’s sort of like being the weather forecaster — perfection unattainable. One thing I do enjoy is going back to look at the models that I’ve built in the past. It’s fun to have hindsight on assumptions that you made in your model. It’s also sometimes humbling to look at models that were outrageously aggressive. I just reviewed a forecasting model that I built 6 months ago where actual MRR is going to beat the modeled prediction for MRR a month early. In this case, a 2-month period with substantially lower than normal churn caused the model to miss the mark. The funny thing is that even with hindsight, we can’t really put our finger on the reason for those 2 months having abnormally low churn. So what is the best way to model MRR growth for SaaS businesses? I once built a model, and the response I got to it was very lackluster It’s not complex enough. On another occasion I was told $15M ARR is the number I want, work the model back from that. To a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Tweet this quote If we are being honest, to a large degree MRR is a vanity metric for CEOs and a yardstick for venture capitalists. Because of that truth, MRR forecasts and goals many times get set based on emotion, a nice round number, or what you should do because that’s what other companies of your size have done. There’s nothing wrong with that, but this model should be a good sanity check. So let’s dive in. There are probably 1001 ways to model out a forecast for MRR. What I’m going to suggest is a very quick and dirty way that seems to work best for me, while pointing out some of the pitfalls that I’ve encountered. To start with, I’m going to assume that your business or product has at a minimum a few years of history. Should that not be the case, you will need to try a different approach. I’m also going to assume that you use a product like ChartMogul that allows you to have an in-depth understanding of your historical MRR changes by month. Simplicity The model that I like to use is very simplistic. It’s based on month-over-month growth rates of MRR. The reason I pick a model that is so simplistic is that I fundamentally believe that for every assumption you make in a model, the greater the error introduced into the model, many times in a compounding way. For every assumption you make in a model, the greater the error introduced into the model. Tweet this quote The guy that told me It’s not complex enough, what he really meant was he wanted something analogous to a zero-based budget model that predicted MRR growth based on growth channels, organic and paid — starting from the ground up. That model started at the top of the funnel estimating conversion rates on websites and multiple app stores for organic traffic. Likewise, for paid acquisition, it estimated conversion rates on advertising through various channels. Then once a customer converted, it accounted for retention / expansion / contraction of users across the various platforms we had. Had the model worked it would have been beautiful, but it didn’t. Our funnel was very complex: we were aggressively ramping up our advertising and we didn’t have a good enough understanding of the paid acquisition funnel metrics. I think a model like this might work for more mature companies that have a lot of data, measure and track that data, and have the time and patience to build out the model. But most SaaS businesses don’t have this luxury. There are 5 components that make up MRR. You could build your model at that layer (new business, expansion, contraction, churn, and reactivation) but frankly that’s five things that could go wrong. Each one of them is a complex thing to model in and of itself. Or you could even go a layer lower, modeling the things that make up each of the five components — but again — that is destined for error without a lot of effort and reliable historical data. I start my forecasting models by first building out the history of the month-to-month growth rate of MRR. Step 1 is to export my historical MRR data from ChartMogul into a spreadsheet. History Knowing the history of a business will help you understand the present and predict the future. This should help you understand a few possible trends. Does the company see seasonality in its growth? Has the company noticed a slight decline in growth rate as it grows? Are there any other anomalies that stand out? I like to not only look at the history by year, by overall average, but I also like to do a weighted average. What happened last year is probably more indicative of future growth than what happened 5 years ago. Usually, a picture is worth 1000 words. In this fictitious example a few things stand out: It does indeed look like the growth rate is reducing over time. As the company ages, the growth has slowed — it’s a lot harder to grow big numbers than small numbers. April 2020 stands out like a sore thumb. I’m sure you can guess what happened there. I wouldn’t expect future Aprils to take on this same behavior, however, your business may have some sort of impact in general in 2021 and beyond that may need to be accounted for. While it’s not super obvious, it looks like there might possibly be some seasonality in growth? If we dig into this data a bit further by normalizing the data on an annual basis, a few things stand out even further. What we see is that there indeed seems to be some seasonality. December through March have historically been the better growth months while July through September have been slower months. That said, the seasonality isn’t extreme such as some companies that do all of their business in the months of November and December. I should point out that I like to use shades of grey to represent years, using a very light shade as you go further back. The reason for this is that when I look at trends I want the more recent years to stand out more — I’m less interested in trends from 2016. Future The next thing I do is look to the future, carefully. What are the things that the company is doing that might impact your growth rates? Are there major product improvements or changes in go-to-market strategies? This is probably where a lot of models go sideways. They become overly optimistic about what the future holds. As I mentioned before, the company growth rate tends to slow down as a company ages up until it’s about 12 years old where it then stabilizes. So as you build your model and you begin to estimate future monthly growth rates keep in mind that gravity — or in this case the size of your company — is pulling against you. Source of Data: SaaS Capital At this point, you could dig deeper if you desire. Is there seasonality in the components that make up your MRR, such as in your New MRR or your Churn MRR? But that’s for another day. Scenarios: 30-60-90 Model I don’t know who introduced this methodology to me, possibly Brad Feld, but it’s something that we used regularly in my last company and it was a really good way of framing forecasts and budgets. Here is the way that it works. The 90% Case represents the base case. This model should be met or exceeded 9 out of 10 times. So if we use this model for the next decade, it should only miss one time. As we saw in 2020, sometimes things happen that just can’t be accounted for in a simplistic model. The 60% Case represents a more aggressive case. In this model, you are only 60% confident that you will hit the target, or 6 of 10 times you will meet the mark. The 30% Case represents the most aggressive case. In this model, you expect to only hit the target 3 of 10 times. While this topic is just looking at forecasting MRR, this same concept can be applied to financial budgets and forecasts. Typically the 30% model while much more aggressive in revenue also has accompanying additional expenses — as growth usually doesn’t come for free. We now start working through each scenario, only altering the monthly growth rates. Here is where the cognitive dissonance starts to kick in. On one hand, we believe that we have all of these great things that we are going to do to increase our growth. On the other hand, we know that as we get larger our growth rates will tend to slow. Every business is different, and the approach you take is probably unique to your situation. For the sake of simplicity and given that my data set is for a fake company, I’m going to do the following: For the 90% case, I’m going to assume that we see growth rates that are 100% of last year’s growth rates. For the 60% case, I’ll assume that we do 10% better than we did last year. And for the 30% case, I’ll assume that we beat last year’s growth rates by 25%. I’m also going to assume that the huge decline in growth in April of 2020 was an anomaly so I’ll factor that out. I’m also going to smooth out a couple of months where I believe the peaks and valleys aren’t warranted. Finally, I’m going to assume that in this particular case, I don’t feel like Covid-19 has any appreciable impact on my 2021 growth. I picked 2020 as the baseline, you could have easily used a weighted average or really a variety of other methods. I think much of it comes down to how realistic you believe 2020 was representative of how things will go moving forward. Again, I like to visualize the data and the forecasts including previous years’ data as I find that it helps to drive home a model based more on reality. Nonetheless, you can change this to be your own, be more aggressive, less aggressive, it’s up to you. You’ll notice that up until this point there has been no discussion on the actual MRR of the company in this data set. Ignoring that to start with, and focusing solely on the monthly growth rates removes the emotion and bias from the forecast. Really, at this point, it comes down to 12 assumptions that you have made, all of which are backed up by historical data that is very relevant in where your growth will likely be in the following years. Finally, we now add the MRR to the equation to see where these growth rates project the company to be over the course of 2021. These 3 scenarios would put this fictitious company at an annualized growth rate of 34% in the most conservative case and 44% in the most aggressive scenario. If we look at a company that is roughly an $8M ARR company in the Growth Rate by ARR graphic above, we’ll see that these projections would put this company at just shy of the 50th percentile in growth rates for companies of its size. So why do multiple scenarios? I think it’s a good exercise to go through — granted there is usually a cost that comes with stretching growth. Examples might include extra advertising spend, hiring another account representative, etc. I also highly encourage you to talk to your team about ideas as to how to hit some of the stretch scenarios. It tends to help get buy-in which is always a good thing when an annual MRR goal comes down from a high. </sys

What it takes to get started in SaaS sales. On starting out Ed: Were you specifically looking for a role in sales when you joined ChartMogul? Marie: So, just before ChartMogul I had experience in different startups — the last one was also in SaaS. I wanted to work for a good company, with a product I liked. I had never heard about ChartMogul, but when I researched the company I really liked the product. I’ve always liked entrepreneurship, small data-focused startups and particularly analytics. E: What made you target the SaaS industry? M: I actually didn’t know so much about the tech industry before I moved to Berlin. I have a background in sports and tourism. By being in Berlin you start to become curious about tech and start to realize the importance and impact of SaaS products in every company — for nurturing relationships, closing deals, managing workflows etc. E: What did your first few months at ChartMogul look like? M: At the beginning I was working on outbound — mainly reaching out to companies who had never heard of ChartMogul to catch their interest and try to get them signed up for a trial. It wasn’t the first time I did outbound, so I had the basics already. I actually liked it because it was all about the numbers — trying to optimize the funnel and being data-driven, measuring the success of what you’re doing. This part was interesting. On the other hand it can get a bit depressing because you’re reaching so many people who are receiving cold emails every day, and the vast majority won’t take the time to respond. Right now I’m focused more on the second step — what’s referred to as inside sales. After doing pure outbound for some time, I think you have an idea what people are experiencing every day, receiving so much cold outreach. The result is that you really try to make what you do more personal and connect with people. On Inside Sales strategy “At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business.” E: Now that you’re more focused on inside sales — talking to active trial customers using the product — what’s your approach to this? M: Well, I think you shouldn’t try to sell too hard. At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business — you’re here to find a way to achieve that. When someone signs up I try to contact them and explain that we’re here to help if they have questions. Once we connect I try to find out why they came to us, what their needs are and their business goals, and then try to see how the product can fit their needs. I’ve worked with sales before, but a completely different kind of sales in B2C. With that, you’re really just focused on persuading people to buy, no matter what. This is a much more considerate approach to that, and that’s what I love. E: Which part of the role do you enjoy the most? M: I really love inside sales! At the end of the day we’re talking to founders, C-level execs, etc. and we get to chat about their business, their needs and the strategies they’re using. You get to learn from every single person you’re connecting with and help them — I love this part and I’ve learned so much in this way! E: What do you think are some important qualities of a SaaS sales person? M: You need to be data-driven and have an understanding of the numbers. There are things that you can learn on the job, like product knowledge, especially the more technical parts like API integrations. etc. Also having an entrepreneurial mindset. You’re dealing with startups and people who want advice on growth. If you have an inherent interest in these topics it really helps. E: What about actually closing a deal? Is there a point where you really have to switch gears and start pushing them a little bit? M: Yes, once they realize the value of the product. You’ll always have people who really push for a discount or trial extension once they know the product’s value. Our pricing at ChartMogul scales based on the company’s revenue and size, and we’re always looking to find a fair deal for customers. Honestly it’s more like 80% is convincing them of the product’s value. If you can do that successfully you really don’t need to sell very hard because they’re already sold at that point. E: Has your view of doing SaaS sales changed since you started? M: I really didn’t know anything about SaaS in the beginning, so it’s hard to say. I actually saw SaaS as this super boring world of software companies! I didn’t know about all of these interesting businesses and products that exist today. I think my view has changed from the cliché SAP- and Salesforce-oriented view to all of these exciting young startups. E: Is the sales process in SaaS how you expected it to be? M: I really expected it to be a bit less human and more impersonal — definitely highly technical, data-driven but not so much of a human element. On tools and techniques “In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it…and I try to hit every one of those items on the call.” E: When it came to learning about sales, is there anything you read that helped? M: Before interviewing at ChartMogul I was doing a of research on the blog, reading SaaS metrics articles. The blogs of David Skok and Christoph Janz were really helpful, I did a lot of reading about the subscription model and how each of the metrics relate to the growth of the business. Predictable Revenue by Aaron Ross was a nice book — it really showed me how to be data-driven in sales. E: Any favorite tools that you use day to day that help you in the role? M: I make a lot of notes. In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it — not in order — but I try to make more of a natural conversion, and I try to hit every one of those items on the call. I just write it on paper. It’s just something I’ve always done! I don’t want to become a robot when it comes to discussions with clients. Before a call, I prepare by writing the name of the company and the person I’ll be speaking with. Then I add all the info I already have for the company, and highlight any things that are missing that I need to find out in the call. E: So it’s like a puzzle! M: Yeah! I usually have all the pieces in my head, but I like putting it on paper too. We spend all day typing on the computer and we don’t really write any more. So it’s a nice change. E: What’s the biggest common mistake people make in SaaS sales? M: Speaking too much and not listening enough! It’s hard because when you’re in sales you’re generally speaking a lot and you’re so excited about the product. But you need to listen, otherwise people just feel like they’re being sold to — which they are! But it’s just not engaging for them. Join the ChartMogul team! Come and work with talented, passionate people on hard problems in the analytics space. Check our jobs page for current openings in Berlin and Toronto.

[INST] What it takes to get started in SaaS sales [/INST]

On starting out Ed: Were you specifically looking for a role in sales when you joined ChartMogul? Marie: So, just before ChartMogul I had experience in different startups — the last one was also in SaaS. I wanted to work for a good company, with a product I liked. I had never heard about ChartMogul, but when I researched the company I really liked the product. I’ve always liked entrepreneurship, small data-focused startups and particularly analytics. E: What made you target the SaaS industry? M: I actually didn’t know so much about the tech industry before I moved to Berlin. I have a background in sports and tourism. By being in Berlin you start to become curious about tech and start to realize the importance and impact of SaaS products in every company — for nurturing relationships, closing deals, managing workflows etc. E: What did your first few months at ChartMogul look like? M: At the beginning I was working on outbound — mainly reaching out to companies who had never heard of ChartMogul to catch their interest and try to get them signed up for a trial. It wasn’t the first time I did outbound, so I had the basics already. I actually liked it because it was all about the numbers — trying to optimize the funnel and being data-driven, measuring the success of what you’re doing. This part was interesting. On the other hand it can get a bit depressing because you’re reaching so many people who are receiving cold emails every day, and the vast majority won’t take the time to respond. Right now I’m focused more on the second step — what’s referred to as inside sales. After doing pure outbound for some time, I think you have an idea what people are experiencing every day, receiving so much cold outreach. The result is that you really try to make what you do more personal and connect with people. On Inside Sales strategy “At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business.” E: Now that you’re more focused on inside sales — talking to active trial customers using the product — what’s your approach to this? M: Well, I think you shouldn’t try to sell too hard. At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business — you’re here to find a way to achieve that. When someone signs up I try to contact them and explain that we’re here to help if they have questions. Once we connect I try to find out why they came to us, what their needs are and their business goals, and then try to see how the product can fit their needs. I’ve worked with sales before, but a completely different kind of sales in B2C. With that, you’re really just focused on persuading people to buy, no matter what. This is a much more considerate approach to that, and that’s what I love. E: Which part of the role do you enjoy the most? M: I really love inside sales! At the end of the day we’re talking to founders, C-level execs, etc. and we get to chat about their business, their needs and the strategies they’re using. You get to learn from every single person you’re connecting with and help them — I love this part and I’ve learned so much in this way! E: What do you think are some important qualities of a SaaS sales person? M: You need to be data-driven and have an understanding of the numbers. There are things that you can learn on the job, like product knowledge, especially the more technical parts like API integrations. etc. Also having an entrepreneurial mindset. You’re dealing with startups and people who want advice on growth. If you have an inherent interest in these topics it really helps. E: What about actually closing a deal? Is there a point where you really have to switch gears and start pushing them a little bit? M: Yes, once they realize the value of the product. You’ll always have people who really push for a discount or trial extension once they know the product’s value. Our pricing at ChartMogul scales based on the company’s revenue and size, and we’re always looking to find a fair deal for customers. Honestly it’s more like 80% is convincing them of the product’s value. If you can do that successfully you really don’t need to sell very hard because they’re already sold at that point. E: Has your view of doing SaaS sales changed since you started? M: I really didn’t know anything about SaaS in the beginning, so it’s hard to say. I actually saw SaaS as this super boring world of software companies! I didn’t know about all of these interesting businesses and products that exist today. I think my view has changed from the cliché SAP- and Salesforce-oriented view to all of these exciting young startups. E: Is the sales process in SaaS how you expected it to be? M: I really expected it to be a bit less human and more impersonal — definitely highly technical, data-driven but not so much of a human element. On tools and techniques “In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it…and I try to hit every one of those items on the call.” E: When it came to learning about sales, is there anything you read that helped? M: Before interviewing at ChartMogul I was doing a of research on the blog, reading SaaS metrics articles. The blogs of David Skok and Christoph Janz were really helpful, I did a lot of reading about the subscription model and how each of the metrics relate to the growth of the business. Predictable Revenue by Aaron Ross was a nice book — it really showed me how to be data-driven in sales. E: Any favorite tools that you use day to day that help you in the role? M: I make a lot of notes. In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it — not in order — but I try to make more of a natural conversion, and I try to hit every one of those items on the call. I just write it on paper. It’s just something I’ve always done! I don’t want to become a robot when it comes to discussions with clients. Before a call, I prepare by writing the name of the company and the person I’ll be speaking with. Then I add all the info I already have for the company, and highlight any things that are missing that I need to find out in the call. E: So it’s like a puzzle! M: Yeah! I usually have all the pieces in my head, but I like putting it on paper too. We spend all day typing on the computer and we don’t really write any more. So it’s a nice change. E: What’s the biggest common mistake people make in SaaS sales? M: Speaking too much and not listening enough! It’s hard because when you’re in sales you’re generally speaking a lot and you’re so excited about the product. But you need to listen, otherwise people just feel like they’re being sold to — which they are! But it’s just not engaging for them. Join the ChartMogul team! Come and work with talented, passionate people on hard problems in the analytics space. Check our jobs page for current openings in Berlin and Toronto.

<sys> [INST] What it takes to get started in SaaS sales [/INST] On starting out Ed: Were you specifically looking for a role in sales when you joined ChartMogul? Marie: So, just before ChartMogul I had experience in different startups — the last one was also in SaaS. I wanted to work for a good company, with a product I liked. I had never heard about ChartMogul, but when I researched the company I really liked the product. I’ve always liked entrepreneurship, small data-focused startups and particularly analytics. E: What made you target the SaaS industry? M: I actually didn’t know so much about the tech industry before I moved to Berlin. I have a background in sports and tourism. By being in Berlin you start to become curious about tech and start to realize the importance and impact of SaaS products in every company — for nurturing relationships, closing deals, managing workflows etc. E: What did your first few months at ChartMogul look like? M: At the beginning I was working on outbound — mainly reaching out to companies who had never heard of ChartMogul to catch their interest and try to get them signed up for a trial. It wasn’t the first time I did outbound, so I had the basics already. I actually liked it because it was all about the numbers — trying to optimize the funnel and being data-driven, measuring the success of what you’re doing. This part was interesting. On the other hand it can get a bit depressing because you’re reaching so many people who are receiving cold emails every day, and the vast majority won’t take the time to respond. Right now I’m focused more on the second step — what’s referred to as inside sales. After doing pure outbound for some time, I think you have an idea what people are experiencing every day, receiving so much cold outreach. The result is that you really try to make what you do more personal and connect with people. On Inside Sales strategy “At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business.” E: Now that you’re more focused on inside sales — talking to active trial customers using the product — what’s your approach to this? M: Well, I think you shouldn’t try to sell too hard. At the end of the day, you’re here to help these businesses. They come to you because they want to understand their data and they want to drive growth in their business — you’re here to find a way to achieve that. When someone signs up I try to contact them and explain that we’re here to help if they have questions. Once we connect I try to find out why they came to us, what their needs are and their business goals, and then try to see how the product can fit their needs. I’ve worked with sales before, but a completely different kind of sales in B2C. With that, you’re really just focused on persuading people to buy, no matter what. This is a much more considerate approach to that, and that’s what I love. E: Which part of the role do you enjoy the most? M: I really love inside sales! At the end of the day we’re talking to founders, C-level execs, etc. and we get to chat about their business, their needs and the strategies they’re using. You get to learn from every single person you’re connecting with and help them — I love this part and I’ve learned so much in this way! E: What do you think are some important qualities of a SaaS sales person? M: You need to be data-driven and have an understanding of the numbers. There are things that you can learn on the job, like product knowledge, especially the more technical parts like API integrations. etc. Also having an entrepreneurial mindset. You’re dealing with startups and people who want advice on growth. If you have an inherent interest in these topics it really helps. E: What about actually closing a deal? Is there a point where you really have to switch gears and start pushing them a little bit? M: Yes, once they realize the value of the product. You’ll always have people who really push for a discount or trial extension once they know the product’s value. Our pricing at ChartMogul scales based on the company’s revenue and size, and we’re always looking to find a fair deal for customers. Honestly it’s more like 80% is convincing them of the product’s value. If you can do that successfully you really don’t need to sell very hard because they’re already sold at that point. E: Has your view of doing SaaS sales changed since you started? M: I really didn’t know anything about SaaS in the beginning, so it’s hard to say. I actually saw SaaS as this super boring world of software companies! I didn’t know about all of these interesting businesses and products that exist today. I think my view has changed from the cliché SAP- and Salesforce-oriented view to all of these exciting young startups. E: Is the sales process in SaaS how you expected it to be? M: I really expected it to be a bit less human and more impersonal — definitely highly technical, data-driven but not so much of a human element. On tools and techniques “In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it…and I try to hit every one of those items on the call.” E: When it came to learning about sales, is there anything you read that helped? M: Before interviewing at ChartMogul I was doing a of research on the blog, reading SaaS metrics articles. The blogs of David Skok and Christoph Janz were really helpful, I did a lot of reading about the subscription model and how each of the metrics relate to the growth of the business. Predictable Revenue by Aaron Ross was a nice book — it really showed me how to be data-driven in sales. E: Any favorite tools that you use day to day that help you in the role? M: I make a lot of notes. In each sales call I have my list of points, like a checklist. I have it all the time, and I go through it — not in order — but I try to make more of a natural conversion, and I try to hit every one of those items on the call. I just write it on paper. It’s just something I’ve always done! I don’t want to become a robot when it comes to discussions with clients. Before a call, I prepare by writing the name of the company and the person I’ll be speaking with. Then I add all the info I already have for the company, and highlight any things that are missing that I need to find out in the call. E: So it’s like a puzzle! M: Yeah! I usually have all the pieces in my head, but I like putting it on paper too. We spend all day typing on the computer and we don’t really write any more. So it’s a nice change. E: What’s the biggest common mistake people make in SaaS sales? M: Speaking too much and not listening enough! It’s hard because when you’re in sales you’re generally speaking a lot and you’re so excited about the product. But you need to listen, otherwise people just feel like they’re being sold to — which they are! But it’s just not engaging for them. Join the ChartMogul team! Come and work with talented, passionate people on hard problems in the analytics space. Check our jobs page for current openings in Berlin and Toronto. </sys

Making customer lifetime value more actionable. In all of the metrics-oriented discussions I’ve had with SaaS founders in recent years, customer lifetime value (LTV) has been by far the most polarizing of all metrics. The promise of LTV is so compelling: a true understanding of the complete contribution a customer’s value across their entire lifetime in your product, taking into account revenue expansion and changes to MRR. There’s really no argument about the value and utility of LTV — that’s completely clear. With it, businesses are able to confidently assign budget to customer acquisition (CAC) with the knowledge that the investment will more than pay off. The general agreement in SaaS is that a CAC:LTV ratio of 1:3 is a good target, i.e. the cost to acquire a customer will be paid back three times over. Predicting the future is hard “We are using a formula to predict the future, and the future, by it’s very definition is not predictable…The value in this analysis is to get enough accuracy to make useful business decisions, such as what factors to look at to improve profitability…” David Skok So what’s the problem with LTV as a metric? Looking at the data of a number of SaaS startups, it’s clear that it’s difficult to get to an LTV estimate that’s anywhere near consistent or accurate. Particularly in businesses with a lower customer count, the cancellation of a single customer has an over-sized impact on churn rate. This directly impacts LTV, where the usual formula is a product of churn rate and average revenue per account (ARPA). These businesses can see LTV fluctuating wildly from one month to the next, meaning that attempts to gauge or plan acquisition spend are often futile. The basic LTV formula This formula is broken down in our SaaS LTV Cheat Sheet The bottom line is this: LTV is a forward-looking prediction rather than a measurement, based on a very basic model of customer churn. So is there anything better out there that we can use in these cases? I’d propose two variations on “traditional” LTV: LTV across a fixed period “Actual” LTV LTV across a fixed period Investors sometimes like to sample the LTV of a startup across a fixed period, which is usually 12 months. This modified formula answers the question “how much value to customers deliver in a 12-month period?” Rather than trying to estimate the complete customer lifetime. Metrics like twelve-month LTV work well in businesses with low churn (where there’s very little “full lifetime” data to go on). The result is a more stable LTV which can drive higher confidence in acquisition spend. This variation also does a good job of capturing any revenue expansion customers might see over the period. “Actual” LTV If one of the main issues with LTV is in the prediction, what if we eliminate that and just look at the average real LTV of customers who’ve already churned? If you have some data to go on (i.e. you’ve had a number of customers both subscribe and churn over time), this can give a more realistic picture of LTV. The only problem with this variation is that it can give an overly pessimistic view of customer value because it only looks at customers who have churned. Those perpetually happy customers who have stuck around and are still subscribed are not included here. In this case it maybe more useful to track and focus on increasing the delta rather than read into absolute numbers too much. Getting experimental There’s a lot more you could do to tweak your measurement of LTV and get to a metric that’s highly tailored to your product. So which metric should you choose? It depends on: Who’s asking What questions you’re trying to answer about your business Segmentation is a great way to bring far more actionable results, allowing you to answer questions like: “What’s the LTV of customers on the Pro plan?” “What’s the 12-month LTV of customers who had a high-touch onboarding process vs. self-service onboarding?” You can use a tool like ChartMogul to answer those questions. Just remember that when you see the common LTV metric, it is always a forward-looking estimation rather than a precise measurement. Without getting into increasingly complex modeling, it’s never easy to give a completely accurate picture of your business. That doesn’t mean it can’t be useful though! Further reading If you really want to get advanced with predicting the future, David Skok presents an advanced version of the classic LTV formula that applies a “discount factor” to get to a more realistic estimate. You can also find a summarized version of this (and more LTV tips) in our SaaS LTV Cheat Sheet which you can download for free!

[INST] Making customer lifetime value more actionable [/INST]

In all of the metrics-oriented discussions I’ve had with SaaS founders in recent years, customer lifetime value (LTV) has been by far the most polarizing of all metrics. The promise of LTV is so compelling: a true understanding of the complete contribution a customer’s value across their entire lifetime in your product, taking into account revenue expansion and changes to MRR. There’s really no argument about the value and utility of LTV — that’s completely clear. With it, businesses are able to confidently assign budget to customer acquisition (CAC) with the knowledge that the investment will more than pay off. The general agreement in SaaS is that a CAC:LTV ratio of 1:3 is a good target, i.e. the cost to acquire a customer will be paid back three times over. Predicting the future is hard “We are using a formula to predict the future, and the future, by it’s very definition is not predictable…The value in this analysis is to get enough accuracy to make useful business decisions, such as what factors to look at to improve profitability…” David Skok So what’s the problem with LTV as a metric? Looking at the data of a number of SaaS startups, it’s clear that it’s difficult to get to an LTV estimate that’s anywhere near consistent or accurate. Particularly in businesses with a lower customer count, the cancellation of a single customer has an over-sized impact on churn rate. This directly impacts LTV, where the usual formula is a product of churn rate and average revenue per account (ARPA). These businesses can see LTV fluctuating wildly from one month to the next, meaning that attempts to gauge or plan acquisition spend are often futile. The basic LTV formula This formula is broken down in our SaaS LTV Cheat Sheet The bottom line is this: LTV is a forward-looking prediction rather than a measurement, based on a very basic model of customer churn. So is there anything better out there that we can use in these cases? I’d propose two variations on “traditional” LTV: LTV across a fixed period “Actual” LTV LTV across a fixed period Investors sometimes like to sample the LTV of a startup across a fixed period, which is usually 12 months. This modified formula answers the question “how much value to customers deliver in a 12-month period?” Rather than trying to estimate the complete customer lifetime. Metrics like twelve-month LTV work well in businesses with low churn (where there’s very little “full lifetime” data to go on). The result is a more stable LTV which can drive higher confidence in acquisition spend. This variation also does a good job of capturing any revenue expansion customers might see over the period. “Actual” LTV If one of the main issues with LTV is in the prediction, what if we eliminate that and just look at the average real LTV of customers who’ve already churned? If you have some data to go on (i.e. you’ve had a number of customers both subscribe and churn over time), this can give a more realistic picture of LTV. The only problem with this variation is that it can give an overly pessimistic view of customer value because it only looks at customers who have churned. Those perpetually happy customers who have stuck around and are still subscribed are not included here. In this case it maybe more useful to track and focus on increasing the delta rather than read into absolute numbers too much. Getting experimental There’s a lot more you could do to tweak your measurement of LTV and get to a metric that’s highly tailored to your product. So which metric should you choose? It depends on: Who’s asking What questions you’re trying to answer about your business Segmentation is a great way to bring far more actionable results, allowing you to answer questions like: “What’s the LTV of customers on the Pro plan?” “What’s the 12-month LTV of customers who had a high-touch onboarding process vs. self-service onboarding?” You can use a tool like ChartMogul to answer those questions. Just remember that when you see the common LTV metric, it is always a forward-looking estimation rather than a precise measurement. Without getting into increasingly complex modeling, it’s never easy to give a completely accurate picture of your business. That doesn’t mean it can’t be useful though! Further reading If you really want to get advanced with predicting the future, David Skok presents an advanced version of the classic LTV formula that applies a “discount factor” to get to a more realistic estimate. You can also find a summarized version of this (and more LTV tips) in our SaaS LTV Cheat Sheet which you can download for free!

<sys> [INST] Making customer lifetime value more actionable [/INST] In all of the metrics-oriented discussions I’ve had with SaaS founders in recent years, customer lifetime value (LTV) has been by far the most polarizing of all metrics. The promise of LTV is so compelling: a true understanding of the complete contribution a customer’s value across their entire lifetime in your product, taking into account revenue expansion and changes to MRR. There’s really no argument about the value and utility of LTV — that’s completely clear. With it, businesses are able to confidently assign budget to customer acquisition (CAC) with the knowledge that the investment will more than pay off. The general agreement in SaaS is that a CAC:LTV ratio of 1:3 is a good target, i.e. the cost to acquire a customer will be paid back three times over. Predicting the future is hard “We are using a formula to predict the future, and the future, by it’s very definition is not predictable…The value in this analysis is to get enough accuracy to make useful business decisions, such as what factors to look at to improve profitability…” David Skok So what’s the problem with LTV as a metric? Looking at the data of a number of SaaS startups, it’s clear that it’s difficult to get to an LTV estimate that’s anywhere near consistent or accurate. Particularly in businesses with a lower customer count, the cancellation of a single customer has an over-sized impact on churn rate. This directly impacts LTV, where the usual formula is a product of churn rate and average revenue per account (ARPA). These businesses can see LTV fluctuating wildly from one month to the next, meaning that attempts to gauge or plan acquisition spend are often futile. The basic LTV formula This formula is broken down in our SaaS LTV Cheat Sheet The bottom line is this: LTV is a forward-looking prediction rather than a measurement, based on a very basic model of customer churn. So is there anything better out there that we can use in these cases? I’d propose two variations on “traditional” LTV: LTV across a fixed period “Actual” LTV LTV across a fixed period Investors sometimes like to sample the LTV of a startup across a fixed period, which is usually 12 months. This modified formula answers the question “how much value to customers deliver in a 12-month period?” Rather than trying to estimate the complete customer lifetime. Metrics like twelve-month LTV work well in businesses with low churn (where there’s very little “full lifetime” data to go on). The result is a more stable LTV which can drive higher confidence in acquisition spend. This variation also does a good job of capturing any revenue expansion customers might see over the period. “Actual” LTV If one of the main issues with LTV is in the prediction, what if we eliminate that and just look at the average real LTV of customers who’ve already churned? If you have some data to go on (i.e. you’ve had a number of customers both subscribe and churn over time), this can give a more realistic picture of LTV. The only problem with this variation is that it can give an overly pessimistic view of customer value because it only looks at customers who have churned. Those perpetually happy customers who have stuck around and are still subscribed are not included here. In this case it maybe more useful to track and focus on increasing the delta rather than read into absolute numbers too much. Getting experimental There’s a lot more you could do to tweak your measurement of LTV and get to a metric that’s highly tailored to your product. So which metric should you choose? It depends on: Who’s asking What questions you’re trying to answer about your business Segmentation is a great way to bring far more actionable results, allowing you to answer questions like: “What’s the LTV of customers on the Pro plan?” “What’s the 12-month LTV of customers who had a high-touch onboarding process vs. self-service onboarding?” You can use a tool like ChartMogul to answer those questions. Just remember that when you see the common LTV metric, it is always a forward-looking estimation rather than a precise measurement. Without getting into increasingly complex modeling, it’s never easy to give a completely accurate picture of your business. That doesn’t mean it can’t be useful though! Further reading If you really want to get advanced with predicting the future, David Skok presents an advanced version of the classic LTV formula that applies a “discount factor” to get to a more realistic estimate. You can also find a summarized version of this (and more LTV tips) in our SaaS LTV Cheat Sheet which you can download for free! </sys

Scaling customer feedback with Hannah Chaplin of Receptive. “I think people can be quite fearful of asking customers in particular for feedback. We hear the worry that if they ask a customer for feedback and they don’t act on it, that makes them look really bad.” Receptive is a SaaS company helping other businesses build better products by collecting and acting on customer feedback more effectively. Hannah Chaplin (@HanChaplino) founded the company, along with her co-founder Dan, back in 2015. Like many other B2B SaaS startups, Receptive began its life as a project inside of an existing organization that was eventually spun out into a full-scale business. Hannah and Dan found that they’d struck a chord with businesses that were really struggling with capturing, prioritising and acting on customer feedback to try and answer a critical question: What should we build? In this conversation, we discuss: How you can balance product vision with feature requests Some common mistakes companies make with feedback Tools and strategies for prioritizing input from customers How Receptive started attracting larger customers, and how the company rallied around this Whether all product feedback is equal (hint: it’s not!) and much more! “Very often when we look at the data, we find there’s a pain point customers are talking about and prospects are talking about that actually aligns nicely with the vision we have for the product.” Listen to the episode As always, you can find this episode — along with all previous episodes — in your podcast player of choice. Just search for “SaaS Open Mic”. If you enjoy it, please take a moment to leave us a review, it’d really help us reach a wider audience. Thank you!

[INST] Scaling customer feedback with Hannah Chaplin of Receptive [/INST]

“I think people can be quite fearful of asking customers in particular for feedback. We hear the worry that if they ask a customer for feedback and they don’t act on it, that makes them look really bad.” Receptive is a SaaS company helping other businesses build better products by collecting and acting on customer feedback more effectively. Hannah Chaplin (@HanChaplino) founded the company, along with her co-founder Dan, back in 2015. Like many other B2B SaaS startups, Receptive began its life as a project inside of an existing organization that was eventually spun out into a full-scale business. Hannah and Dan found that they’d struck a chord with businesses that were really struggling with capturing, prioritising and acting on customer feedback to try and answer a critical question: What should we build? In this conversation, we discuss: How you can balance product vision with feature requests Some common mistakes companies make with feedback Tools and strategies for prioritizing input from customers How Receptive started attracting larger customers, and how the company rallied around this Whether all product feedback is equal (hint: it’s not!) and much more! “Very often when we look at the data, we find there’s a pain point customers are talking about and prospects are talking about that actually aligns nicely with the vision we have for the product.” Listen to the episode As always, you can find this episode — along with all previous episodes — in your podcast player of choice. Just search for “SaaS Open Mic”. If you enjoy it, please take a moment to leave us a review, it’d really help us reach a wider audience. Thank you!

<sys> [INST] Scaling customer feedback with Hannah Chaplin of Receptive [/INST] “I think people can be quite fearful of asking customers in particular for feedback. We hear the worry that if they ask a customer for feedback and they don’t act on it, that makes them look really bad.” Receptive is a SaaS company helping other businesses build better products by collecting and acting on customer feedback more effectively. Hannah Chaplin (@HanChaplino) founded the company, along with her co-founder Dan, back in 2015. Like many other B2B SaaS startups, Receptive began its life as a project inside of an existing organization that was eventually spun out into a full-scale business. Hannah and Dan found that they’d struck a chord with businesses that were really struggling with capturing, prioritising and acting on customer feedback to try and answer a critical question: What should we build? In this conversation, we discuss: How you can balance product vision with feature requests Some common mistakes companies make with feedback Tools and strategies for prioritizing input from customers How Receptive started attracting larger customers, and how the company rallied around this Whether all product feedback is equal (hint: it’s not!) and much more! “Very often when we look at the data, we find there’s a pain point customers are talking about and prospects are talking about that actually aligns nicely with the vision we have for the product.” Listen to the episode As always, you can find this episode — along with all previous episodes — in your podcast player of choice. Just search for “SaaS Open Mic”. If you enjoy it, please take a moment to leave us a review, it’d really help us reach a wider audience. Thank you! </sys

State of play: Berlin’s B2B SaaS startups. Recent exits Fyber – mobile app monetisation. SalonMeister – salon management platform. Series A or higher (with over $1.5m of announced funding) Adjust – bi for mobile app marketers. Contentful – cloud CMS platform. Mambu – banking platform. Nosto – platform for product recommendations based on individual behavioural data. PressMatrix – helping publishers deliver their magazines on tablets and mobile devices. SearchMetrics – enterprise platform for SEO. Wunderlist – manage all your team’s projects with centralised communication. Seed stage (with over $300k of announced funding) Avari – personalise in the moment with real-time predictive content in email. ChartMogul – helping SaaS companies calculate and understand their subscription metrics. Embraase – Personalisation & A/B Testing Platform. Ezeep – cloud print server. ReMerge – App Retargeting. Sensorberg – iBeacon management platform. Swabr – private social network for companies. uberMetrics – media monitoring platform. Funding amount not published, or published funding under $300k, or bootstrapped There are unfortunately far too many to list in this category so I’ve just picked a selection that looked interesting to me. Ecratum – supplier relationship management suite. FitAnalytics – platform for giving clothing size recommendations via webcams. GladBills – invoices and quotes. Fliplingo – online content professional translation platform. Interact.io – real-time analytics for CRMs. Perdoo – easily manage and track your OKRs. Small Improvements – performance review software. softgarden – recruiting software that makes you smile. T Dispatch – dispatch software for fleet management. testCloud – software testing and QA. Transloadit – file upload processing API. Trecker – manage farm contractors. Some of these companies are clearly well funded (some with over seven figures of investment, e.g. softgarden) but the amount is either not readily available or is under $300k. If I’ve put your company in the wrong bucket and you’d like me to make a change please let me know in the comments. I’ve not included a list of investors who are actively investing in B2B SaaS startups in Berlin (I know there are a few), e.g. our investors Point Nine Capital are one of the most active (e.g. Conentful, ChartMogul, Fyber, Mambu and ReMerge).

[INST] State of play: Berlin’s B2B SaaS startups [/INST]

Recent exits Fyber – mobile app monetisation. SalonMeister – salon management platform. Series A or higher (with over $1.5m of announced funding) Adjust – bi for mobile app marketers. Contentful – cloud CMS platform. Mambu – banking platform. Nosto – platform for product recommendations based on individual behavioural data. PressMatrix – helping publishers deliver their magazines on tablets and mobile devices. SearchMetrics – enterprise platform for SEO. Wunderlist – manage all your team’s projects with centralised communication. Seed stage (with over $300k of announced funding) Avari – personalise in the moment with real-time predictive content in email. ChartMogul – helping SaaS companies calculate and understand their subscription metrics. Embraase – Personalisation & A/B Testing Platform. Ezeep – cloud print server. ReMerge – App Retargeting. Sensorberg – iBeacon management platform. Swabr – private social network for companies. uberMetrics – media monitoring platform. Funding amount not published, or published funding under $300k, or bootstrapped There are unfortunately far too many to list in this category so I’ve just picked a selection that looked interesting to me. Ecratum – supplier relationship management suite. FitAnalytics – platform for giving clothing size recommendations via webcams. GladBills – invoices and quotes. Fliplingo – online content professional translation platform. Interact.io – real-time analytics for CRMs. Perdoo – easily manage and track your OKRs. Small Improvements – performance review software. softgarden – recruiting software that makes you smile. T Dispatch – dispatch software for fleet management. testCloud – software testing and QA. Transloadit – file upload processing API. Trecker – manage farm contractors. Some of these companies are clearly well funded (some with over seven figures of investment, e.g. softgarden) but the amount is either not readily available or is under $300k. If I’ve put your company in the wrong bucket and you’d like me to make a change please let me know in the comments. I’ve not included a list of investors who are actively investing in B2B SaaS startups in Berlin (I know there are a few), e.g. our investors Point Nine Capital are one of the most active (e.g. Conentful, ChartMogul, Fyber, Mambu and ReMerge).

<sys> [INST] State of play: Berlin’s B2B SaaS startups [/INST] Recent exits Fyber – mobile app monetisation. SalonMeister – salon management platform. Series A or higher (with over $1.5m of announced funding) Adjust – bi for mobile app marketers. Contentful – cloud CMS platform. Mambu – banking platform. Nosto – platform for product recommendations based on individual behavioural data. PressMatrix – helping publishers deliver their magazines on tablets and mobile devices. SearchMetrics – enterprise platform for SEO. Wunderlist – manage all your team’s projects with centralised communication. Seed stage (with over $300k of announced funding) Avari – personalise in the moment with real-time predictive content in email. ChartMogul – helping SaaS companies calculate and understand their subscription metrics. Embraase – Personalisation & A/B Testing Platform. Ezeep – cloud print server. ReMerge – App Retargeting. Sensorberg – iBeacon management platform. Swabr – private social network for companies. uberMetrics – media monitoring platform. Funding amount not published, or published funding under $300k, or bootstrapped There are unfortunately far too many to list in this category so I’ve just picked a selection that looked interesting to me. Ecratum – supplier relationship management suite. FitAnalytics – platform for giving clothing size recommendations via webcams. GladBills – invoices and quotes. Fliplingo – online content professional translation platform. Interact.io – real-time analytics for CRMs. Perdoo – easily manage and track your OKRs. Small Improvements – performance review software. softgarden – recruiting software that makes you smile. T Dispatch – dispatch software for fleet management. testCloud – software testing and QA. Transloadit – file upload processing API. Trecker – manage farm contractors. Some of these companies are clearly well funded (some with over seven figures of investment, e.g. softgarden) but the amount is either not readily available or is under $300k. If I’ve put your company in the wrong bucket and you’d like me to make a change please let me know in the comments. I’ve not included a list of investors who are actively investing in B2B SaaS startups in Berlin (I know there are a few), e.g. our investors Point Nine Capital are one of the most active (e.g. Conentful, ChartMogul, Fyber, Mambu and ReMerge). </sys

How do you pitch value to a potential customer?. I don’t believe pitching to be a dark art — there is a formula that, once followed, will get you on a level that’s better than 70% of people out there. Let’s look at some of the elements of a great pitch. Actually, hold that thought. Let’s watch a great product pitch first, and then pull it apart. Cut to the end of the first season of Mad Men, where Don Draper, Creative Director of ad agency Sterling Cooper, is tasked with presenting a pitch for a new slide projector (anyone remember those things?!) for some Kodak execs. “That’s great,” I hear you say, “but this isn’t real. It’s a dramatisation that would never work in real life.” Sure, there’s some cheesiness added, but there are actually some critical, timeless lessons to learn from the pitch we just watched. Enter the conversation in the customer’s head The best way to get on the same level as your audience is to already know what they’re thinking (or what questions they’re asking) and join the conversation from that point. That way, you’re inspiring confidence in letting them know that you fully identify with the problem they’re facing. Example: In the clip above, the Kodak execs start the conversation by talking about the technology, and the difficulties of marketing something that’s not “desirable”. Don joins in: “Well, technology is a glittering lure. But there’s the rare occasion when the public can be engaged on a level beyond flash, if they have a sentimental bond with the product.” Source: Mad Men (Lionsgate) Be mission-driven If you want to inspire action in your audience on a low level (buying your product), you need to inspire them to buy into your mission on a high level. Why should they care? What’s the point? This is your chance to convey passion for the problem that you’re solving. If you want to learn more about this approach, make sure you watch Simon Sinek’s TED talk, “How great leaders inspire action”: Simon’s example of how Apple approached Marketing from a completely different angle to pretty much any company at the time is something that’s always at the front of my mind when planning a Marketing strategy. The structure below can be used when pitching value to potential customers (note that the order is the most important thing here). Why (you do it) How (you do it) What (you do) To take Simon’s Apple example from the talk, it’s the difference between what most Marketing looks like (what – how – why): “We make great computers, they’re beautifully designed, simple to use and user friendly. Want to buy one?” and what Apple does (why – how – what): “In everything we do, we believe in challenging the status quo. We believe in thinking differently. We do this by making our products beautifully-designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one?” Use actions over words wherever possible In the Mad Men clip, Don used the actual product — the projector — to do the pitch. The whole thing spoke for itself! While it’s obviously not feasible for every product out there, if you have the chance to use your product as part of the pitch in any way, you should jump on the opportunity. Actions speak louder than words, and if your product delivers true value in an effective way, your audience will understand this nearly instantly. Demonstrate value, not features Don doesn’t talk about any technical features of the product in any way in his pitch. None. It doesn’t matter that the projector has an infra-red remote control, or more lumens of brightness than any other product on the market. This isn’t value. Again, it’s about giving the audience a reason to care deeply about the product. How does it make their lives better? Does it make them appear a better person to their colleagues? Will it bring them closer to their loved ones? These are the things that people care about. When it comes to B2B, Marketing thought leader Seth Godin summed things up pretty concisely when he said that deep down, people in business have one of two goals: Impress their boss, for personal career gains (employees) Increase the value of their business, to please investors (leaders) So what’s the lesson here? Demonstrate clearly that people can achieve one of those two things with your product! Use emotion Source: Mad Men (Lionsgate) Clearly, Don’s pitch is laced with emotion (as well as much more from a build up of conflict that leads up to this scene). Arguably, leveraging emotion in a pitch for a product that allows customers to visualize their memories is relatively easy. So what about those products that aren’t inherently “emotion-driven”? ChartMogul is a subscription analytics platform. It doesn’t get much more dry and emotionless than that. And while it’s definitely more difficult to factor emotion into the marketing of such a product, there are still ways in which you can generate a feeling of aspiration. A lot of it comes back to demonstrating values, as I mentioned above. “ChartMogul helps you build a better subscription business.” Our decision to use this phrase was a conscious effort to be aspirational, and it comes from our mission: We believe that subscription businesses can use data to be more successful and empower their teams to make better, informed decisions. We’re empowering people to be better at their jobs! There’s no mention of charts, data tables, user segments or any other low-level features in that. Emotion can be present in all forms of Marketing — some more subtle than others. This answer was originally featured on Quora – You can read the full thread here.

[INST] How do you pitch value to a potential customer? [/INST]

I don’t believe pitching to be a dark art — there is a formula that, once followed, will get you on a level that’s better than 70% of people out there. Let’s look at some of the elements of a great pitch. Actually, hold that thought. Let’s watch a great product pitch first, and then pull it apart. Cut to the end of the first season of Mad Men, where Don Draper, Creative Director of ad agency Sterling Cooper, is tasked with presenting a pitch for a new slide projector (anyone remember those things?!) for some Kodak execs. “That’s great,” I hear you say, “but this isn’t real. It’s a dramatisation that would never work in real life.” Sure, there’s some cheesiness added, but there are actually some critical, timeless lessons to learn from the pitch we just watched. Enter the conversation in the customer’s head The best way to get on the same level as your audience is to already know what they’re thinking (or what questions they’re asking) and join the conversation from that point. That way, you’re inspiring confidence in letting them know that you fully identify with the problem they’re facing. Example: In the clip above, the Kodak execs start the conversation by talking about the technology, and the difficulties of marketing something that’s not “desirable”. Don joins in: “Well, technology is a glittering lure. But there’s the rare occasion when the public can be engaged on a level beyond flash, if they have a sentimental bond with the product.” Source: Mad Men (Lionsgate) Be mission-driven If you want to inspire action in your audience on a low level (buying your product), you need to inspire them to buy into your mission on a high level. Why should they care? What’s the point? This is your chance to convey passion for the problem that you’re solving. If you want to learn more about this approach, make sure you watch Simon Sinek’s TED talk, “How great leaders inspire action”: Simon’s example of how Apple approached Marketing from a completely different angle to pretty much any company at the time is something that’s always at the front of my mind when planning a Marketing strategy. The structure below can be used when pitching value to potential customers (note that the order is the most important thing here). Why (you do it) How (you do it) What (you do) To take Simon’s Apple example from the talk, it’s the difference between what most Marketing looks like (what – how – why): “We make great computers, they’re beautifully designed, simple to use and user friendly. Want to buy one?” and what Apple does (why – how – what): “In everything we do, we believe in challenging the status quo. We believe in thinking differently. We do this by making our products beautifully-designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one?” Use actions over words wherever possible In the Mad Men clip, Don used the actual product — the projector — to do the pitch. The whole thing spoke for itself! While it’s obviously not feasible for every product out there, if you have the chance to use your product as part of the pitch in any way, you should jump on the opportunity. Actions speak louder than words, and if your product delivers true value in an effective way, your audience will understand this nearly instantly. Demonstrate value, not features Don doesn’t talk about any technical features of the product in any way in his pitch. None. It doesn’t matter that the projector has an infra-red remote control, or more lumens of brightness than any other product on the market. This isn’t value. Again, it’s about giving the audience a reason to care deeply about the product. How does it make their lives better? Does it make them appear a better person to their colleagues? Will it bring them closer to their loved ones? These are the things that people care about. When it comes to B2B, Marketing thought leader Seth Godin summed things up pretty concisely when he said that deep down, people in business have one of two goals: Impress their boss, for personal career gains (employees) Increase the value of their business, to please investors (leaders) So what’s the lesson here? Demonstrate clearly that people can achieve one of those two things with your product! Use emotion Source: Mad Men (Lionsgate) Clearly, Don’s pitch is laced with emotion (as well as much more from a build up of conflict that leads up to this scene). Arguably, leveraging emotion in a pitch for a product that allows customers to visualize their memories is relatively easy. So what about those products that aren’t inherently “emotion-driven”? ChartMogul is a subscription analytics platform. It doesn’t get much more dry and emotionless than that. And while it’s definitely more difficult to factor emotion into the marketing of such a product, there are still ways in which you can generate a feeling of aspiration. A lot of it comes back to demonstrating values, as I mentioned above. “ChartMogul helps you build a better subscription business.” Our decision to use this phrase was a conscious effort to be aspirational, and it comes from our mission: We believe that subscription businesses can use data to be more successful and empower their teams to make better, informed decisions. We’re empowering people to be better at their jobs! There’s no mention of charts, data tables, user segments or any other low-level features in that. Emotion can be present in all forms of Marketing — some more subtle than others. This answer was originally featured on Quora – You can read the full thread here.

<sys> [INST] How do you pitch value to a potential customer? [/INST] I don’t believe pitching to be a dark art — there is a formula that, once followed, will get you on a level that’s better than 70% of people out there. Let’s look at some of the elements of a great pitch. Actually, hold that thought. Let’s watch a great product pitch first, and then pull it apart. Cut to the end of the first season of Mad Men, where Don Draper, Creative Director of ad agency Sterling Cooper, is tasked with presenting a pitch for a new slide projector (anyone remember those things?!) for some Kodak execs. “That’s great,” I hear you say, “but this isn’t real. It’s a dramatisation that would never work in real life.” Sure, there’s some cheesiness added, but there are actually some critical, timeless lessons to learn from the pitch we just watched. Enter the conversation in the customer’s head The best way to get on the same level as your audience is to already know what they’re thinking (or what questions they’re asking) and join the conversation from that point. That way, you’re inspiring confidence in letting them know that you fully identify with the problem they’re facing. Example: In the clip above, the Kodak execs start the conversation by talking about the technology, and the difficulties of marketing something that’s not “desirable”. Don joins in: “Well, technology is a glittering lure. But there’s the rare occasion when the public can be engaged on a level beyond flash, if they have a sentimental bond with the product.” Source: Mad Men (Lionsgate) Be mission-driven If you want to inspire action in your audience on a low level (buying your product), you need to inspire them to buy into your mission on a high level. Why should they care? What’s the point? This is your chance to convey passion for the problem that you’re solving. If you want to learn more about this approach, make sure you watch Simon Sinek’s TED talk, “How great leaders inspire action”: Simon’s example of how Apple approached Marketing from a completely different angle to pretty much any company at the time is something that’s always at the front of my mind when planning a Marketing strategy. The structure below can be used when pitching value to potential customers (note that the order is the most important thing here). Why (you do it) How (you do it) What (you do) To take Simon’s Apple example from the talk, it’s the difference between what most Marketing looks like (what – how – why): “We make great computers, they’re beautifully designed, simple to use and user friendly. Want to buy one?” and what Apple does (why – how – what): “In everything we do, we believe in challenging the status quo. We believe in thinking differently. We do this by making our products beautifully-designed, simple to use, and user friendly. We just happen to make great computers. Want to buy one?” Use actions over words wherever possible In the Mad Men clip, Don used the actual product — the projector — to do the pitch. The whole thing spoke for itself! While it’s obviously not feasible for every product out there, if you have the chance to use your product as part of the pitch in any way, you should jump on the opportunity. Actions speak louder than words, and if your product delivers true value in an effective way, your audience will understand this nearly instantly. Demonstrate value, not features Don doesn’t talk about any technical features of the product in any way in his pitch. None. It doesn’t matter that the projector has an infra-red remote control, or more lumens of brightness than any other product on the market. This isn’t value. Again, it’s about giving the audience a reason to care deeply about the product. How does it make their lives better? Does it make them appear a better person to their colleagues? Will it bring them closer to their loved ones? These are the things that people care about. When it comes to B2B, Marketing thought leader Seth Godin summed things up pretty concisely when he said that deep down, people in business have one of two goals: Impress their boss, for personal career gains (employees) Increase the value of their business, to please investors (leaders) So what’s the lesson here? Demonstrate clearly that people can achieve one of those two things with your product! Use emotion Source: Mad Men (Lionsgate) Clearly, Don’s pitch is laced with emotion (as well as much more from a build up of conflict that leads up to this scene). Arguably, leveraging emotion in a pitch for a product that allows customers to visualize their memories is relatively easy. So what about those products that aren’t inherently “emotion-driven”? ChartMogul is a subscription analytics platform. It doesn’t get much more dry and emotionless than that. And while it’s definitely more difficult to factor emotion into the marketing of such a product, there are still ways in which you can generate a feeling of aspiration. A lot of it comes back to demonstrating values, as I mentioned above. “ChartMogul helps you build a better subscription business.” Our decision to use this phrase was a conscious effort to be aspirational, and it comes from our mission: We believe that subscription businesses can use data to be more successful and empower their teams to make better, informed decisions. We’re empowering people to be better at their jobs! There’s no mention of charts, data tables, user segments or any other low-level features in that. Emotion can be present in all forms of Marketing — some more subtle than others. This answer was originally featured on Quora – You can read the full thread here. </sys

Lessons from Marvel, Receptive and ProdPad at Mogul I/O London. Thanks to everyone who came out to see us in London at our third Mogul I/O event. The presentations and discussion was packed full of lessons and insights, as you’d expect from such a selection of seasoned SaaS leaders. The following post is a summary of the points discussed along with key takeaways and quotes. Enjoy! Participants: Nick Franklin (@Nick_Franklin) — CEO, ChartMogul Murat Mutlu (@mutlu82) — Co-Founder, Marvel Janna Bastow (@simplybastow) — Founder & CEO, ProdPad Hannah Chaplin (@HanChaplino) — Co-founder & CEO, Receptive On the most meaningful metrics for decision-making The team at Marvel tracks the company’s key metrics in ChartMogul. Beyond looking at high-level metrics, a lot of his focus is on understanding the effectiveness of individual pricing plans. The team has identified and rolled out new plans aimed at unlocking new growth for the product, so it’s important to constantly check in on how these perform. A key metric for Marvel is what the team calls “day zero to day seven premium conversion” — i.e., how fast can you get someone to upgrade within the first week? This helps prioritize the most impactful interactions with users during that critical seven-day period. “For Marvel, one of the most important days for us is day zero — that’s where we get most of our conversions from. Literally from the moment someone signs up, we’ve got to get to work right there and then.” Murat Mutlu, Marvel Janna Bastow of ProdPad is highly focused on product usage data, and explains just how big the insights from this have been: “We did some analysis and we realized we could tell with 85% certainty by day nine if they were going to buy or not. This was actually one of the drivers in bringing the trial length down.” Janna recommends looking at what users are actually doing in the product — how many other colleagues they’ve invited, what kind of features they’re actively using — trying to understand the health of the account. These are rarely individual numbers or metrics and require a deeper approach. She also highlighted how it’s important not to forget the significance of cash flow, i.e. actual money in the bank: “It’s one thing to get people to pay for a monthly subscription, but something else altogether when they buy an annual plan … it makes a huge difference to your bottom line and your ability to run the company.” At Receptive, the business model is a little different. The product is tailored to enterprise or scaling businesses. The team put a lot of work into figuring out their ideal customer profile and realized that those enterprise businesses generally wanted to be sold to. This means that by the time a customer has signed up, there’s already been some discussion about an annual or multi-year deal. Also key for enterprise-focused businesses is average revenue per account (ARPA): “ARPA has been really important metric. We’ve seen that steadily going up as the whole team has been focused on closing those bigger deals.” Key takeaways The first few days (or even hours) of a new trial are critical. This should be the focus of your efforts if you want to have an impact on conversion rate. Add context to your metrics, especially with product usage data. You need to understand the experience your new customers are having in the product. For enterprise, average deal size or ARPA should be a key metric. Janna Bastow — Founder & CEO of ProdPad On making freemium work Marvel is a fascinating product when viewed through the lens of freemium. In the early days, the entire product was completely free and it wasn’t until later that a premium plan was added. Today, Marvel has a “forever free” plan which is important for the way the product fits into professional products. Murat explained: “We take a bottom-up approach. We’re a tool for creatives and designers and we need to get saturation within a team, workflow or company to be able to move up to a purchase conversation.” It’s clear that by only offering a limited free trial this process wouldn’t have worked. Designers and creatives have to be completely bought into using Marvel — they need to fit it into their workflow: “A designer will not use something that someone else tells them to use … they’ll just use the thing they like and that helps them get the job done faster.” So for Marvel, bottom-up selling works really well. It does take time, though, for a project to get underway. This is the main reason for not having a limited free trial. The process will often last longer than a week or two, and they’ll need to get real value from it during that period. Murat also explained another benefit of freemium early on: “When you’re really early stage, working in your bedroom and don’t have a lot of customers, they act as a really good marketing engine for you — being able to spread the word and have advocates … that worked really well for us.” At ProdPad, Janna and her team have tried many approaches to pricing over the five years since launching, including Freemium. This includes launching a free version of ProdPad that didn’t get traction. Janna’s experience was that free users ended up being problematic and expensive to support. They wanted features that were available in the premium package but did not have the willingness to pay for them. They also had the expectation of full support. The solution that works well for ProdPad is a hybrid approach: “We’ve actually found other ways of approaching it. We now have add-on tools, like a portal for your customers to give you ideas (that’s free) and other mini tools that you can use for free.” ChartMogul launched our free plan in July 2017. As CEO Nick discussed, it took about seven months for the free users to overtake the three years worth of paid growth. ChartMogul’s free plan replaced an existing starter plan that cost $1 per month. The problem with this was that it created the expectation of service — the customer is paying you. In reality, a $1 plan is not meaningful for overall revenue, so it was dropped in favor of the new free plan. Interestingly, the team at ProdPad had a very different experience. The product had a free plan, and after launching a cheap paid version ($20 per year) found that paid users were much more ready and willing to upgrade. Key takeaways Think about who your buyer really is. Do you need to win over developers, designers or other personas? Don’t assume you have to offer a free trial in SaaS. There are cases where it limits both you and your prospective customers. If people are paying for your product (regardless of the amount) they’ll expect a certain level of service and support. From left to right: Nick Franklin (ChartMogul), Hannah Chaplin (Receptive), Janna Bastow (ProdPad) and Murat Mutlu (Marvel) On aligning price with value Nick set the tone for this question: “It’s easier said than done, right?” Pricing is always a difficult topic and the panel wholeheartedly agreed. As Murat explained, some products are easier to price where you can scale the price point based on transactions or API calls. With Marvel it’s a little bit trickier. Marvel’s pricing scales per user as one dimension, and secondly with projects. The baseline allows for two or three projects, with any more requiring a higher price point. Things can becomes difficult with pricing when you have a small team inside of a big company using the product: “You might have a big global company using one project because it takes them six or seven months to complete, then you have an agency getting through a ton of projects really quickly but there’s only five of them.” Murat’s advice on this? The only way to do it is test, repackage, move features between plans, look at the data on what people are using and keep moving forward. There’s no magic pricing plan that’s suitable for everyone. ProdPad used to charge based on products. “If you had more products we assumed that you had more money.” This assumption turned out to be wrong. Janna’s team ended up settling on per-user pricing, but based on different packages tailored to specific use cases. “One of the key things is that we only charge for the people who actually get day-to-day usage. There’s tons of value for other people to be able to look in — commenting, annotating, viewing projects — but we only charge for the product people and not the rest of the company.” People tell you not to price based on user, because people start sharing logins and this breaks things like collaboration. For ProdPad, it’s really a blended approach that’s worked in the end. “Don’t be afraid of complicated-looking pricing. Look at Intercom — it used to be a single product, but nowadays it’s four different products based on one platform. Nobody seems to get it but it really really works.” Hannah Chaplin’s advice? Test it. Test, test, test. “We’ve tried all sorts but what’s working right now is feature-based pricing. A great example is smaller companies don’t care about fine-grained permissions and SAML SSO etc.” Nick has seen from his former experience running the APAC region for Zendesk that different markets have dramatically different levels of price sensitivity. It’s important to remember this. Initially, ProdPad was really big in the Brazilian market, but the team didn’t really understand why. Over time, these customers eventually dropped off. It wasn’t until afterwards that they realized that because they were pricing in US dollars, the exchange rate (due to the ongoing economic crisis at the time) led to the product being cost-prohibitive for Brazilian companies. This has happened with a lot of SaaS tools in Brazil — they ended up building their own solutions. Key takeaways It can be useful to look at the internal structure of businesses you’re selling to. Would it be used by a small team or across the organization? Test your pricing in whatever way you can! Simplicity doesn’t necessarily lead to the best pricing strategy. People like to pay for features they use, so this might mean splitting the product out into smaller add-ons. On improving onboarding success rates As a product entirely focused on the enterprise segment, things are a bit different for Receptive. As Hannah explained, by the time the sale has been made there’s already been a lot of effort to ensure a good fit. Because of this, Receptive has invested a lot in making customer-only content such as webinars to nurture those existing customers. “I think like any good SaaS business, once the sale’s done, it’s not over — you’ve got to keep adding value, you’ve got to keep being helpful and making sure people are successful in your product … Always be onboarding.” Janna explained the “plateau of doom” that the company experienced and had to claw their way out of. One of the few metrics they could improve during this period was the onboarding rate. Free trial conversion wasn’t great at this point, so they took action in two ways: Throwing away the fixed trial period and moving to an auto-extending trial. Users really love this, and it’s actually cut the “time to entering credit card” metric down from 36 days to just 11 days. Personalized onboarding emails based on product usage. The team was able to automate most of these emails using the data they had. This completely transformed the onboarding experience. Marvel is aiming to self-serve the majority of onboarding. The team has created a process where if you sign up, you’re taken through exactly what is considered to be important in the product. But (and here’s the surprise), they found that people skipping the tour were more likely to upgrade to a paid account! Today, Marvel is still experimenting with automated onboarding and also investing in video content to help guide users through features. Key takeaways Always be onboarding! Don’t make any assumptions when it comes to designing your trial. ProdPad’s flexible trial period is a great example of throwing away the playbook. In 2018 the benchmark for good onboarding has been raised. You need to provide a personal onboarding experience — and the tools to do this exist today. On opportunities in 2018 and beyond Receptive: Hannah’s team are starting to build out an ROI dashboard which shows how much time the company is saving, really helping leadership in the business. They’re also starting to use the data in much smarter ways; e.g., “Hey, customer success manager, did you know that 90% of accounts have this same feedback as their number one priority?” ProdPad: A key focus for this year is in getting the word out and marketing the product. Today, most customers came from inbound and they’ve only just started pushing outside of that. “We’re learning what happens when you start going out and telling people about it.” Marvel recently launched an API which takes it from being a small tool to a platform that people can build and innovate on. Secondly, pricing and packaging is always a huge focus. Murat and his team will take a step back and look at how they can build the tools they need to make the right decisions on pricing.

[INST] Lessons from Marvel, Receptive and ProdPad at Mogul I/O London [/INST]

Thanks to everyone who came out to see us in London at our third Mogul I/O event. The presentations and discussion was packed full of lessons and insights, as you’d expect from such a selection of seasoned SaaS leaders. The following post is a summary of the points discussed along with key takeaways and quotes. Enjoy! Participants: Nick Franklin (@Nick_Franklin) — CEO, ChartMogul Murat Mutlu (@mutlu82) — Co-Founder, Marvel Janna Bastow (@simplybastow) — Founder & CEO, ProdPad Hannah Chaplin (@HanChaplino) — Co-founder & CEO, Receptive On the most meaningful metrics for decision-making The team at Marvel tracks the company’s key metrics in ChartMogul. Beyond looking at high-level metrics, a lot of his focus is on understanding the effectiveness of individual pricing plans. The team has identified and rolled out new plans aimed at unlocking new growth for the product, so it’s important to constantly check in on how these perform. A key metric for Marvel is what the team calls “day zero to day seven premium conversion” — i.e., how fast can you get someone to upgrade within the first week? This helps prioritize the most impactful interactions with users during that critical seven-day period. “For Marvel, one of the most important days for us is day zero — that’s where we get most of our conversions from. Literally from the moment someone signs up, we’ve got to get to work right there and then.” Murat Mutlu, Marvel Janna Bastow of ProdPad is highly focused on product usage data, and explains just how big the insights from this have been: “We did some analysis and we realized we could tell with 85% certainty by day nine if they were going to buy or not. This was actually one of the drivers in bringing the trial length down.” Janna recommends looking at what users are actually doing in the product — how many other colleagues they’ve invited, what kind of features they’re actively using — trying to understand the health of the account. These are rarely individual numbers or metrics and require a deeper approach. She also highlighted how it’s important not to forget the significance of cash flow, i.e. actual money in the bank: “It’s one thing to get people to pay for a monthly subscription, but something else altogether when they buy an annual plan … it makes a huge difference to your bottom line and your ability to run the company.” At Receptive, the business model is a little different. The product is tailored to enterprise or scaling businesses. The team put a lot of work into figuring out their ideal customer profile and realized that those enterprise businesses generally wanted to be sold to. This means that by the time a customer has signed up, there’s already been some discussion about an annual or multi-year deal. Also key for enterprise-focused businesses is average revenue per account (ARPA): “ARPA has been really important metric. We’ve seen that steadily going up as the whole team has been focused on closing those bigger deals.” Key takeaways The first few days (or even hours) of a new trial are critical. This should be the focus of your efforts if you want to have an impact on conversion rate. Add context to your metrics, especially with product usage data. You need to understand the experience your new customers are having in the product. For enterprise, average deal size or ARPA should be a key metric. Janna Bastow — Founder & CEO of ProdPad On making freemium work Marvel is a fascinating product when viewed through the lens of freemium. In the early days, the entire product was completely free and it wasn’t until later that a premium plan was added. Today, Marvel has a “forever free” plan which is important for the way the product fits into professional products. Murat explained: “We take a bottom-up approach. We’re a tool for creatives and designers and we need to get saturation within a team, workflow or company to be able to move up to a purchase conversation.” It’s clear that by only offering a limited free trial this process wouldn’t have worked. Designers and creatives have to be completely bought into using Marvel — they need to fit it into their workflow: “A designer will not use something that someone else tells them to use … they’ll just use the thing they like and that helps them get the job done faster.” So for Marvel, bottom-up selling works really well. It does take time, though, for a project to get underway. This is the main reason for not having a limited free trial. The process will often last longer than a week or two, and they’ll need to get real value from it during that period. Murat also explained another benefit of freemium early on: “When you’re really early stage, working in your bedroom and don’t have a lot of customers, they act as a really good marketing engine for you — being able to spread the word and have advocates … that worked really well for us.” At ProdPad, Janna and her team have tried many approaches to pricing over the five years since launching, including Freemium. This includes launching a free version of ProdPad that didn’t get traction. Janna’s experience was that free users ended up being problematic and expensive to support. They wanted features that were available in the premium package but did not have the willingness to pay for them. They also had the expectation of full support. The solution that works well for ProdPad is a hybrid approach: “We’ve actually found other ways of approaching it. We now have add-on tools, like a portal for your customers to give you ideas (that’s free) and other mini tools that you can use for free.” ChartMogul launched our free plan in July 2017. As CEO Nick discussed, it took about seven months for the free users to overtake the three years worth of paid growth. ChartMogul’s free plan replaced an existing starter plan that cost $1 per month. The problem with this was that it created the expectation of service — the customer is paying you. In reality, a $1 plan is not meaningful for overall revenue, so it was dropped in favor of the new free plan. Interestingly, the team at ProdPad had a very different experience. The product had a free plan, and after launching a cheap paid version ($20 per year) found that paid users were much more ready and willing to upgrade. Key takeaways Think about who your buyer really is. Do you need to win over developers, designers or other personas? Don’t assume you have to offer a free trial in SaaS. There are cases where it limits both you and your prospective customers. If people are paying for your product (regardless of the amount) they’ll expect a certain level of service and support. From left to right: Nick Franklin (ChartMogul), Hannah Chaplin (Receptive), Janna Bastow (ProdPad) and Murat Mutlu (Marvel) On aligning price with value Nick set the tone for this question: “It’s easier said than done, right?” Pricing is always a difficult topic and the panel wholeheartedly agreed. As Murat explained, some products are easier to price where you can scale the price point based on transactions or API calls. With Marvel it’s a little bit trickier. Marvel’s pricing scales per user as one dimension, and secondly with projects. The baseline allows for two or three projects, with any more requiring a higher price point. Things can becomes difficult with pricing when you have a small team inside of a big company using the product: “You might have a big global company using one project because it takes them six or seven months to complete, then you have an agency getting through a ton of projects really quickly but there’s only five of them.” Murat’s advice on this? The only way to do it is test, repackage, move features between plans, look at the data on what people are using and keep moving forward. There’s no magic pricing plan that’s suitable for everyone. ProdPad used to charge based on products. “If you had more products we assumed that you had more money.” This assumption turned out to be wrong. Janna’s team ended up settling on per-user pricing, but based on different packages tailored to specific use cases. “One of the key things is that we only charge for the people who actually get day-to-day usage. There’s tons of value for other people to be able to look in — commenting, annotating, viewing projects — but we only charge for the product people and not the rest of the company.” People tell you not to price based on user, because people start sharing logins and this breaks things like collaboration. For ProdPad, it’s really a blended approach that’s worked in the end. “Don’t be afraid of complicated-looking pricing. Look at Intercom — it used to be a single product, but nowadays it’s four different products based on one platform. Nobody seems to get it but it really really works.” Hannah Chaplin’s advice? Test it. Test, test, test. “We’ve tried all sorts but what’s working right now is feature-based pricing. A great example is smaller companies don’t care about fine-grained permissions and SAML SSO etc.” Nick has seen from his former experience running the APAC region for Zendesk that different markets have dramatically different levels of price sensitivity. It’s important to remember this. Initially, ProdPad was really big in the Brazilian market, but the team didn’t really understand why. Over time, these customers eventually dropped off. It wasn’t until afterwards that they realized that because they were pricing in US dollars, the exchange rate (due to the ongoing economic crisis at the time) led to the product being cost-prohibitive for Brazilian companies. This has happened with a lot of SaaS tools in Brazil — they ended up building their own solutions. Key takeaways It can be useful to look at the internal structure of businesses you’re selling to. Would it be used by a small team or across the organization? Test your pricing in whatever way you can! Simplicity doesn’t necessarily lead to the best pricing strategy. People like to pay for features they use, so this might mean splitting the product out into smaller add-ons. On improving onboarding success rates As a product entirely focused on the enterprise segment, things are a bit different for Receptive. As Hannah explained, by the time the sale has been made there’s already been a lot of effort to ensure a good fit. Because of this, Receptive has invested a lot in making customer-only content such as webinars to nurture those existing customers. “I think like any good SaaS business, once the sale’s done, it’s not over — you’ve got to keep adding value, you’ve got to keep being helpful and making sure people are successful in your product … Always be onboarding.” Janna explained the “plateau of doom” that the company experienced and had to claw their way out of. One of the few metrics they could improve during this period was the onboarding rate. Free trial conversion wasn’t great at this point, so they took action in two ways: Throwing away the fixed trial period and moving to an auto-extending trial. Users really love this, and it’s actually cut the “time to entering credit card” metric down from 36 days to just 11 days. Personalized onboarding emails based on product usage. The team was able to automate most of these emails using the data they had. This completely transformed the onboarding experience. Marvel is aiming to self-serve the majority of onboarding. The team has created a process where if you sign up, you’re taken through exactly what is considered to be important in the product. But (and here’s the surprise), they found that people skipping the tour were more likely to upgrade to a paid account! Today, Marvel is still experimenting with automated onboarding and also investing in video content to help guide users through features. Key takeaways Always be onboarding! Don’t make any assumptions when it comes to designing your trial. ProdPad’s flexible trial period is a great example of throwing away the playbook. In 2018 the benchmark for good onboarding has been raised. You need to provide a personal onboarding experience — and the tools to do this exist today. On opportunities in 2018 and beyond Receptive: Hannah’s team are starting to build out an ROI dashboard which shows how much time the company is saving, really helping leadership in the business. They’re also starting to use the data in much smarter ways; e.g., “Hey, customer success manager, did you know that 90% of accounts have this same feedback as their number one priority?” ProdPad: A key focus for this year is in getting the word out and marketing the product. Today, most customers came from inbound and they’ve only just started pushing outside of that. “We’re learning what happens when you start going out and telling people about it.” Marvel recently launched an API which takes it from being a small tool to a platform that people can build and innovate on. Secondly, pricing and packaging is always a huge focus. Murat and his team will take a step back and look at how they can build the tools they need to make the right decisions on pricing.

<sys> [INST] Lessons from Marvel, Receptive and ProdPad at Mogul I/O London [/INST] Thanks to everyone who came out to see us in London at our third Mogul I/O event. The presentations and discussion was packed full of lessons and insights, as you’d expect from such a selection of seasoned SaaS leaders. The following post is a summary of the points discussed along with key takeaways and quotes. Enjoy! Participants: Nick Franklin (@Nick_Franklin) — CEO, ChartMogul Murat Mutlu (@mutlu82) — Co-Founder, Marvel Janna Bastow (@simplybastow) — Founder & CEO, ProdPad Hannah Chaplin (@HanChaplino) — Co-founder & CEO, Receptive On the most meaningful metrics for decision-making The team at Marvel tracks the company’s key metrics in ChartMogul. Beyond looking at high-level metrics, a lot of his focus is on understanding the effectiveness of individual pricing plans. The team has identified and rolled out new plans aimed at unlocking new growth for the product, so it’s important to constantly check in on how these perform. A key metric for Marvel is what the team calls “day zero to day seven premium conversion” — i.e., how fast can you get someone to upgrade within the first week? This helps prioritize the most impactful interactions with users during that critical seven-day period. “For Marvel, one of the most important days for us is day zero — that’s where we get most of our conversions from. Literally from the moment someone signs up, we’ve got to get to work right there and then.” Murat Mutlu, Marvel Janna Bastow of ProdPad is highly focused on product usage data, and explains just how big the insights from this have been: “We did some analysis and we realized we could tell with 85% certainty by day nine if they were going to buy or not. This was actually one of the drivers in bringing the trial length down.” Janna recommends looking at what users are actually doing in the product — how many other colleagues they’ve invited, what kind of features they’re actively using — trying to understand the health of the account. These are rarely individual numbers or metrics and require a deeper approach. She also highlighted how it’s important not to forget the significance of cash flow, i.e. actual money in the bank: “It’s one thing to get people to pay for a monthly subscription, but something else altogether when they buy an annual plan … it makes a huge difference to your bottom line and your ability to run the company.” At Receptive, the business model is a little different. The product is tailored to enterprise or scaling businesses. The team put a lot of work into figuring out their ideal customer profile and realized that those enterprise businesses generally wanted to be sold to. This means that by the time a customer has signed up, there’s already been some discussion about an annual or multi-year deal. Also key for enterprise-focused businesses is average revenue per account (ARPA): “ARPA has been really important metric. We’ve seen that steadily going up as the whole team has been focused on closing those bigger deals.” Key takeaways The first few days (or even hours) of a new trial are critical. This should be the focus of your efforts if you want to have an impact on conversion rate. Add context to your metrics, especially with product usage data. You need to understand the experience your new customers are having in the product. For enterprise, average deal size or ARPA should be a key metric. Janna Bastow — Founder & CEO of ProdPad On making freemium work Marvel is a fascinating product when viewed through the lens of freemium. In the early days, the entire product was completely free and it wasn’t until later that a premium plan was added. Today, Marvel has a “forever free” plan which is important for the way the product fits into professional products. Murat explained: “We take a bottom-up approach. We’re a tool for creatives and designers and we need to get saturation within a team, workflow or company to be able to move up to a purchase conversation.” It’s clear that by only offering a limited free trial this process wouldn’t have worked. Designers and creatives have to be completely bought into using Marvel — they need to fit it into their workflow: “A designer will not use something that someone else tells them to use … they’ll just use the thing they like and that helps them get the job done faster.” So for Marvel, bottom-up selling works really well. It does take time, though, for a project to get underway. This is the main reason for not having a limited free trial. The process will often last longer than a week or two, and they’ll need to get real value from it during that period. Murat also explained another benefit of freemium early on: “When you’re really early stage, working in your bedroom and don’t have a lot of customers, they act as a really good marketing engine for you — being able to spread the word and have advocates … that worked really well for us.” At ProdPad, Janna and her team have tried many approaches to pricing over the five years since launching, including Freemium. This includes launching a free version of ProdPad that didn’t get traction. Janna’s experience was that free users ended up being problematic and expensive to support. They wanted features that were available in the premium package but did not have the willingness to pay for them. They also had the expectation of full support. The solution that works well for ProdPad is a hybrid approach: “We’ve actually found other ways of approaching it. We now have add-on tools, like a portal for your customers to give you ideas (that’s free) and other mini tools that you can use for free.” ChartMogul launched our free plan in July 2017. As CEO Nick discussed, it took about seven months for the free users to overtake the three years worth of paid growth. ChartMogul’s free plan replaced an existing starter plan that cost $1 per month. The problem with this was that it created the expectation of service — the customer is paying you. In reality, a $1 plan is not meaningful for overall revenue, so it was dropped in favor of the new free plan. Interestingly, the team at ProdPad had a very different experience. The product had a free plan, and after launching a cheap paid version ($20 per year) found that paid users were much more ready and willing to upgrade. Key takeaways Think about who your buyer really is. Do you need to win over developers, designers or other personas? Don’t assume you have to offer a free trial in SaaS. There are cases where it limits both you and your prospective customers. If people are paying for your product (regardless of the amount) they’ll expect a certain level of service and support. From left to right: Nick Franklin (ChartMogul), Hannah Chaplin (Receptive), Janna Bastow (ProdPad) and Murat Mutlu (Marvel) On aligning price with value Nick set the tone for this question: “It’s easier said than done, right?” Pricing is always a difficult topic and the panel wholeheartedly agreed. As Murat explained, some products are easier to price where you can scale the price point based on transactions or API calls. With Marvel it’s a little bit trickier. Marvel’s pricing scales per user as one dimension, and secondly with projects. The baseline allows for two or three projects, with any more requiring a higher price point. Things can becomes difficult with pricing when you have a small team inside of a big company using the product: “You might have a big global company using one project because it takes them six or seven months to complete, then you have an agency getting through a ton of projects really quickly but there’s only five of them.” Murat’s advice on this? The only way to do it is test, repackage, move features between plans, look at the data on what people are using and keep moving forward. There’s no magic pricing plan that’s suitable for everyone. ProdPad used to charge based on products. “If you had more products we assumed that you had more money.” This assumption turned out to be wrong. Janna’s team ended up settling on per-user pricing, but based on different packages tailored to specific use cases. “One of the key things is that we only charge for the people who actually get day-to-day usage. There’s tons of value for other people to be able to look in — commenting, annotating, viewing projects — but we only charge for the product people and not the rest of the company.” People tell you not to price based on user, because people start sharing logins and this breaks things like collaboration. For ProdPad, it’s really a blended approach that’s worked in the end. “Don’t be afraid of complicated-looking pricing. Look at Intercom — it used to be a single product, but nowadays it’s four different products based on one platform. Nobody seems to get it but it really really works.” Hannah Chaplin’s advice? Test it. Test, test, test. “We’ve tried all sorts but what’s working right now is feature-based pricing. A great example is smaller companies don’t care about fine-grained permissions and SAML SSO etc.” Nick has seen from his former experience running the APAC region for Zendesk that different markets have dramatically different levels of price sensitivity. It’s important to remember this. Initially, ProdPad was really big in the Brazilian market, but the team didn’t really understand why. Over time, these customers eventually dropped off. It wasn’t until afterwards that they realized that because they were pricing in US dollars, the exchange rate (due to the ongoing economic crisis at the time) led to the product being cost-prohibitive for Brazilian companies. This has happened with a lot of SaaS tools in Brazil — they ended up building their own solutions. Key takeaways It can be useful to look at the internal structure of businesses you’re selling to. Would it be used by a small team or across the organization? Test your pricing in whatever way you can! Simplicity doesn’t necessarily lead to the best pricing strategy. People like to pay for features they use, so this might mean splitting the product out into smaller add-ons. On improving onboarding success rates As a product entirely focused on the enterprise segment, things are a bit different for Receptive. As Hannah explained, by the time the sale has been made there’s already been a lot of effort to ensure a good fit. Because of this, Receptive has invested a lot in making customer-only content such as webinars to nurture those existing customers. “I think like any good SaaS business, once the sale’s done, it’s not over — you’ve got to keep adding value, you’ve got to keep being helpful and making sure people are successful in your product … Always be onboarding.” Janna explained the “plateau of doom” that the company experienced and had to claw their way out of. One of the few metrics they could improve during this period was the onboarding rate. Free trial conversion wasn’t great at this point, so they took action in two ways: Throwing away the fixed trial period and moving to an auto-extending trial. Users really love this, and it’s actually cut the “time to entering credit card” metric down from 36 days to just 11 days. Personalized onboarding emails based on product usage. The team was able to automate most of these emails using the data they had. This completely transformed the onboarding experience. Marvel is aiming to self-serve the majority of onboarding. The team has created a process where if you sign up, you’re taken through exactly what is considered to be important in the product. But (and here’s the surprise), they found that people skipping the tour were more likely to upgrade to a paid account! Today, Marvel is still experimenting with automated onboarding and also investing in video content to help guide users through features. Key takeaways Always be onboarding! Don’t make any assumptions when it comes to designing your trial. ProdPad’s flexible trial period is a great example of throwing away the playbook. In 2018 the benchmark for good onboarding has been raised. You need to provide a personal onboarding experience — and the tools to do this exist today. On opportunities in 2018 and beyond Receptive: Hannah’s team are starting to build out an ROI dashboard which shows how much time the company is saving, really helping leadership in the business. They’re also starting to use the data in much smarter ways; e.g., “Hey, customer success manager, did you know that 90% of accounts have this same feedback as their number one priority?” ProdPad: A key focus for this year is in getting the word out and marketing the product. Today, most customers came from inbound and they’ve only just started pushing outside of that. “We’re learning what happens when you start going out and telling people about it.” Marvel recently launched an API which takes it from being a small tool to a platform that people can build and innovate on. Secondly, pricing and packaging is always a huge focus. Murat and his team will take a step back and look at how they can build the tools they need to make the right decisions on pricing. </sys

Adobe’s $4.2B ARR pivot to SaaS: The strategy behind the numbers. Much has been said about Adobe’s successful transition of its Creative Suite of apps to a subscription-based service — Creative Cloud. While it makes sense to start with some facts, I don’t want to focus too much on the data. The sheer scale of the numbers here are impressive — it’s not often we see a business of such scale and success pull off a pivot to a different business model, and live to see another day. But the numbers are not the aspect of this topic that we’ll learn from (even though they serve as good context). The facts In 2011, Adobe’s Creative Suite was a cash cow by most measurements. It generated more than $3.4B in revenue with a gross margin of 97%. On April 23rd, 2012, the company announced the release of Adobe Creative Cloud™: “a radical new way of providing tools and services that will change the game for creatives worldwide.” While Adobe continued to offer the CS6 perpetually-licensed software alongside this new cloud subscription, it was clear that the subscription model was their focus moving forward. Initial reception from users was mixed, raising some concern (and a little outrage) from loyal customers who didn’t want to buy into the subscription service: “Adobe was seemingly caught flat-footed by the sheer volume and intensity of the criticism and had to spend the next several days after the announcement talking not about new software and service features, but dispelling inaccurate claims proliferating on user forums about terms and features of their Creative Cloud service.” (Adobe’s Subscription-Only CC Release Carries Obvious Upside But Big Risk) Fast-forward five years to the present day, and the success of Creative Cloud (CC) and its impact on Adobe as a business is an overwhelming success. Q2 2013: CC subscriber numbers had reached almost 700,000 FY 2016: CC revenue was up 44% year-on-year to $733 million FY 2016: Over 30% of CC total subscribers were new to Adobe Q1 2017: $4.25B ARR, a quarter-over-quarter increase of $265M This chart by Tom Tunguz clearly shows the dramatic pace of Adobe’s revenue model switch (source: http://tomtunguz.com/adobe-saas-growth/) What we can learn In many ways, what’s more interesting about such a large-scale paradigm change for Adobe are the decision making and thought processes undertaken by the leadership and management teams. Pivots are hard at the best of times, and in many cases cause the kind of destruction that’s irreversible. In an interview with McKinsey, Adobe CFO Mark Garrett and VP of Business Ops & Strategy Dan Cohen give insights that are arguably more insightful than the numbers and metrics. Yes, the scale and revenue involved is incomparable for 99% of SaaS businesses — but the philosophy and challenges encountered by the leadership is something that can be taken and applied to everyday decisions in companies of any size. Below are the key points I learned from the full interview transcript, published by McKinsey. Experiment with side-by-side models to understand potential traction of the full scale When it comes to risk, it doesn’t get much bigger than throwing away your existing (successful) business model and shifting to a new unknown. But what strikes me about how Adobe handled this transition is how they were able to test subscriptions on a smaller scale for a significant period of time before going all-in: “At the time of these discussions, we were experimenting with subscription models overseas and in the United States. We offered, side by side, similar products under both a subscription model and our traditional perpetual-licensing model, and we observed what the uptake was.” Creative Suite 6 (with its perpetual license) was launched in May 2012 alongside Creative Cloud (subscriptions), and was only recently retired in January 2017! For nearly 5 years, both options were available to consumers side-by-side. Revenue growth through raising prices is not sustainable in the long term “We were driving revenue growth by raising our average selling price—either through straight price increases or through moving people up the product ladder. That wasn’t a sustainable approach.” In SaaS, price-raising is a common strategy for driving revenue growth that doesn’t actually require businesses to win new business. In many scenarios it makes sense, particularly when products mature, gaining new powerful feature sets targeted to enterprise-level customers. Raising the price (or adding more expensive pricing tiers) reflects the increasing value delivered by the product. What Adobe realised, however, is that the price-raising strategy is not sustainable in the longer-term. There’s only so long you can keep hiking prices, even with consistent product improvements. Stakeholder management and goal-setting is key to success Adobe is a public company. Not everyone has to answer to Wall Street, but every business — no matter the size — has stakeholders that require careful relationship management. Big changes that involve killing (or at least maiming) your cash cow are sure to be met with high levels of concern. Three things strike me about how Adobe handled the transition with its shareholders: 1. Over-communication The point here is to go above and beyond the expected level of communication, to avoid leaving any questions unanswered when it comes to the execution. This process requires you to be proactive, rather than reactive. “The point is, we were transparent. We over-communicated. When we did that, and when Wall Street saw the traction we were getting with the initial release, the stock started to move.” 2. Goal-setting A great way to inspire confidence is to consistently meet goals. Each time a goal is met, confidence is reinforced and compounds with each subsequent goal. When it came to subscription metrics, Adobe executives gave clear “markers” along the path to success: “We gave them ‘markers’—for instance, we said we were going to reach 4 million subscribers in 2015 and build up ARR.” 3. Education One big challenge for Adobe in moving to the subscription model was in helping investors see and think in the “new” way of measuring such a business. Subscription revenue requires subscription metrics — and the team at Adobe focused on educating investors on how exactly this was done: “We shifted their focus toward the building blocks of the Creative Cloud business—subscriptions, annualized recurring revenues (ARR), average revenue per user, and revenue that was contracted and either deferred or in backlog” Don’t underestimate the cultural aspects of change “We had to contend with some of that cultural antibody—especially given that we were a company that had been doing things the same way for almost three decades. Literally any form of change is going to meet resistance in a company that’s been around nearly 30 years, even changing the brand of coffee. But for younger startups, it can still be challenging to seemingly “undo” months of progress and pursue a different strategy. Employees in smaller businesses often feel a stronger attachment and sense of ownership over the work they do, and it can be disheartening to let go of that. “We instituted open dialogue with employees—here’s what we’re going through, here’s what it might look like—and we encouraged debate. Not everyone stayed, but those who did were committed to the cloud model.” The principles that Adobe followed with its employees apply to any sized business: Leaders need to be transparent, encourage debate and be open to the very real possibility that the “new world” is just not something certain employees want to be a part of — and that’s okay! “Dig in” and question every aspect of your current model “For any company moving to a subscription model, you need to deliver ongoing value to the customer and also create new sources of value that didn’t exist with the old model. You can’t just sell the same offering in a different way.” The SaaS model revolves around delivering ongoing value to users. This may be obvious in 2017, but to Adobe in 2012 this was a level of foresight many businesses didn’t even manage. “In every part of the business, we had to dig in and ask, ‘How do we need to do this differently?’ Moving to the cloud affected how we engineered the products, our operations, and our go-to-market and business models.” With any change to your billing model or even pricing structure, it’s worth taking a fresh look at every aspect of the business that could be affected by it. If you’re offering a new premium plan, what does this mean for your support structure? How does the marketing focus need to change to accommodate expansion in the target customer base? Dig in, and don’t leave any stone unturned. “You have to take a fresh look at your products—and be willing to ‘burn the boats,’ so to speak.” In other words, look for the things today that are taken for granted, and question every single one of them. Listen and respond to feedback Not every aspect of the move was a roaring success from day one. The initial subscription offering for Creative Cloud left hobbyists (particularly photographers) feeling sidelined: “We learned an important lesson in this area early on, when we got serious pushback to our cloud plan from our photography customers, who felt the offering did not work for them.” In response to this, the company eventually introduced a Photography plan, packaging the Photoshop and Lightroom apps into a more affordable $10 monthly fee. This shows that even with a year of financial modelling and running numbers, you can’t expect to hit the right solution first time. Clearly for Adobe, there were some things they just couldn’t see without the feedback of loyal customers. In summary Today, after a long transition period, Adobe has completed their transition to a subscription model – they no longer offer perpetually-licensed solutions for their creative software. The sheer scale and numbers involved in the success of this transition are hard to ignore, however they don’t tell the full story of the organizational and cultural paradigm shift that was required. The learnings and values listed above can apply to any business going through a major change of pricing model or product pivot. These changes affect all aspects of a business, and present huge challenges both internally and with communication to external stakeholders.

[INST] Adobe’s $4 [/INST]

2B ARR pivot to SaaS: The strategy behind the numbers. Much has been said about Adobe’s successful transition of its Creative Suite of apps to a subscription-based service — Creative Cloud. While it makes sense to start with some facts, I don’t want to focus too much on the data. The sheer scale of the numbers here are impressive — it’s not often we see a business of such scale and success pull off a pivot to a different business model, and live to see another day. But the numbers are not the aspect of this topic that we’ll learn from (even though they serve as good context). The facts In 2011, Adobe’s Creative Suite was a cash cow by most measurements. It generated more than $3.4B in revenue with a gross margin of 97%. On April 23rd, 2012, the company announced the release of Adobe Creative Cloud™: “a radical new way of providing tools and services that will change the game for creatives worldwide.” While Adobe continued to offer the CS6 perpetually-licensed software alongside this new cloud subscription, it was clear that the subscription model was their focus moving forward. Initial reception from users was mixed, raising some concern (and a little outrage) from loyal customers who didn’t want to buy into the subscription service: “Adobe was seemingly caught flat-footed by the sheer volume and intensity of the criticism and had to spend the next several days after the announcement talking not about new software and service features, but dispelling inaccurate claims proliferating on user forums about terms and features of their Creative Cloud service.” (Adobe’s Subscription-Only CC Release Carries Obvious Upside But Big Risk) Fast-forward five years to the present day, and the success of Creative Cloud (CC) and its impact on Adobe as a business is an overwhelming success. Q2 2013: CC subscriber numbers had reached almost 700,000 FY 2016: CC revenue was up 44% year-on-year to $733 million FY 2016: Over 30% of CC total subscribers were new to Adobe Q1 2017: $4.25B ARR, a quarter-over-quarter increase of $265M This chart by Tom Tunguz clearly shows the dramatic pace of Adobe’s revenue model switch (source: http://tomtunguz.com/adobe-saas-growth/) What we can learn In many ways, what’s more interesting about such a large-scale paradigm change for Adobe are the decision making and thought processes undertaken by the leadership and management teams. Pivots are hard at the best of times, and in many cases cause the kind of destruction that’s irreversible. In an interview with McKinsey, Adobe CFO Mark Garrett and VP of Business Ops & Strategy Dan Cohen give insights that are arguably more insightful than the numbers and metrics. Yes, the scale and revenue involved is incomparable for 99% of SaaS businesses — but the philosophy and challenges encountered by the leadership is something that can be taken and applied to everyday decisions in companies of any size. Below are the key points I learned from the full interview transcript, published by McKinsey. Experiment with side-by-side models to understand potential traction of the full scale When it comes to risk, it doesn’t get much bigger than throwing away your existing (successful) business model and shifting to a new unknown. But what strikes me about how Adobe handled this transition is how they were able to test subscriptions on a smaller scale for a significant period of time before going all-in: “At the time of these discussions, we were experimenting with subscription models overseas and in the United States. We offered, side by side, similar products under both a subscription model and our traditional perpetual-licensing model, and we observed what the uptake was.” Creative Suite 6 (with its perpetual license) was launched in May 2012 alongside Creative Cloud (subscriptions), and was only recently retired in January 2017! For nearly 5 years, both options were available to consumers side-by-side. Revenue growth through raising prices is not sustainable in the long term “We were driving revenue growth by raising our average selling price—either through straight price increases or through moving people up the product ladder. That wasn’t a sustainable approach.” In SaaS, price-raising is a common strategy for driving revenue growth that doesn’t actually require businesses to win new business. In many scenarios it makes sense, particularly when products mature, gaining new powerful feature sets targeted to enterprise-level customers. Raising the price (or adding more expensive pricing tiers) reflects the increasing value delivered by the product. What Adobe realised, however, is that the price-raising strategy is not sustainable in the longer-term. There’s only so long you can keep hiking prices, even with consistent product improvements. Stakeholder management and goal-setting is key to success Adobe is a public company. Not everyone has to answer to Wall Street, but every business — no matter the size — has stakeholders that require careful relationship management. Big changes that involve killing (or at least maiming) your cash cow are sure to be met with high levels of concern. Three things strike me about how Adobe handled the transition with its shareholders: 1. Over-communication The point here is to go above and beyond the expected level of communication, to avoid leaving any questions unanswered when it comes to the execution. This process requires you to be proactive, rather than reactive. “The point is, we were transparent. We over-communicated. When we did that, and when Wall Street saw the traction we were getting with the initial release, the stock started to move.” 2. Goal-setting A great way to inspire confidence is to consistently meet goals. Each time a goal is met, confidence is reinforced and compounds with each subsequent goal. When it came to subscription metrics, Adobe executives gave clear “markers” along the path to success: “We gave them ‘markers’—for instance, we said we were going to reach 4 million subscribers in 2015 and build up ARR.” 3. Education One big challenge for Adobe in moving to the subscription model was in helping investors see and think in the “new” way of measuring such a business. Subscription revenue requires subscription metrics — and the team at Adobe focused on educating investors on how exactly this was done: “We shifted their focus toward the building blocks of the Creative Cloud business—subscriptions, annualized recurring revenues (ARR), average revenue per user, and revenue that was contracted and either deferred or in backlog” Don’t underestimate the cultural aspects of change “We had to contend with some of that cultural antibody—especially given that we were a company that had been doing things the same way for almost three decades. Literally any form of change is going to meet resistance in a company that’s been around nearly 30 years, even changing the brand of coffee. But for younger startups, it can still be challenging to seemingly “undo” months of progress and pursue a different strategy. Employees in smaller businesses often feel a stronger attachment and sense of ownership over the work they do, and it can be disheartening to let go of that. “We instituted open dialogue with employees—here’s what we’re going through, here’s what it might look like—and we encouraged debate. Not everyone stayed, but those who did were committed to the cloud model.” The principles that Adobe followed with its employees apply to any sized business: Leaders need to be transparent, encourage debate and be open to the very real possibility that the “new world” is just not something certain employees want to be a part of — and that’s okay! “Dig in” and question every aspect of your current model “For any company moving to a subscription model, you need to deliver ongoing value to the customer and also create new sources of value that didn’t exist with the old model. You can’t just sell the same offering in a different way.” The SaaS model revolves around delivering ongoing value to users. This may be obvious in 2017, but to Adobe in 2012 this was a level of foresight many businesses didn’t even manage. “In every part of the business, we had to dig in and ask, ‘How do we need to do this differently?’ Moving to the cloud affected how we engineered the products, our operations, and our go-to-market and business models.” With any change to your billing model or even pricing structure, it’s worth taking a fresh look at every aspect of the business that could be affected by it. If you’re offering a new premium plan, what does this mean for your support structure? How does the marketing focus need to change to accommodate expansion in the target customer base? Dig in, and don’t leave any stone unturned. “You have to take a fresh look at your products—and be willing to ‘burn the boats,’ so to speak.” In other words, look for the things today that are taken for granted, and question every single one of them. Listen and respond to feedback Not every aspect of the move was a roaring success from day one. The initial subscription offering for Creative Cloud left hobbyists (particularly photographers) feeling sidelined: “We learned an important lesson in this area early on, when we got serious pushback to our cloud plan from our photography customers, who felt the offering did not work for them.” In response to this, the company eventually introduced a Photography plan, packaging the Photoshop and Lightroom apps into a more affordable $10 monthly fee. This shows that even with a year of financial modelling and running numbers, you can’t expect to hit the right solution first time. Clearly for Adobe, there were some things they just couldn’t see without the feedback of loyal customers. In summary Today, after a long transition period, Adobe has completed their transition to a subscription model – they no longer offer perpetually-licensed solutions for their creative software. The sheer scale and numbers involved in the success of this transition are hard to ignore, however they don’t tell the full story of the organizational and cultural paradigm shift that was required. The learnings and values listed above can apply to any business going through a major change of pricing model or product pivot. These changes affect all aspects of a business, and present huge challenges both internally and with communication to external stakeholders.

<sys> [INST] Adobe’s $4 [/INST]2B ARR pivot to SaaS: The strategy behind the numbers. Much has been said about Adobe’s successful transition of its Creative Suite of apps to a subscription-based service — Creative Cloud. While it makes sense to start with some facts, I don’t want to focus too much on the data. The sheer scale of the numbers here are impressive — it’s not often we see a business of such scale and success pull off a pivot to a different business model, and live to see another day. But the numbers are not the aspect of this topic that we’ll learn from (even though they serve as good context). The facts In 2011, Adobe’s Creative Suite was a cash cow by most measurements. It generated more than $3.4B in revenue with a gross margin of 97%. On April 23rd, 2012, the company announced the release of Adobe Creative Cloud™: “a radical new way of providing tools and services that will change the game for creatives worldwide.” While Adobe continued to offer the CS6 perpetually-licensed software alongside this new cloud subscription, it was clear that the subscription model was their focus moving forward. Initial reception from users was mixed, raising some concern (and a little outrage) from loyal customers who didn’t want to buy into the subscription service: “Adobe was seemingly caught flat-footed by the sheer volume and intensity of the criticism and had to spend the next several days after the announcement talking not about new software and service features, but dispelling inaccurate claims proliferating on user forums about terms and features of their Creative Cloud service.” (Adobe’s Subscription-Only CC Release Carries Obvious Upside But Big Risk) Fast-forward five years to the present day, and the success of Creative Cloud (CC) and its impact on Adobe as a business is an overwhelming success. Q2 2013: CC subscriber numbers had reached almost 700,000 FY 2016: CC revenue was up 44% year-on-year to $733 million FY 2016: Over 30% of CC total subscribers were new to Adobe Q1 2017: $4.25B ARR, a quarter-over-quarter increase of $265M This chart by Tom Tunguz clearly shows the dramatic pace of Adobe’s revenue model switch (source: http://tomtunguz.com/adobe-saas-growth/) What we can learn In many ways, what’s more interesting about such a large-scale paradigm change for Adobe are the decision making and thought processes undertaken by the leadership and management teams. Pivots are hard at the best of times, and in many cases cause the kind of destruction that’s irreversible. In an interview with McKinsey, Adobe CFO Mark Garrett and VP of Business Ops & Strategy Dan Cohen give insights that are arguably more insightful than the numbers and metrics. Yes, the scale and revenue involved is incomparable for 99% of SaaS businesses — but the philosophy and challenges encountered by the leadership is something that can be taken and applied to everyday decisions in companies of any size. Below are the key points I learned from the full interview transcript, published by McKinsey. Experiment with side-by-side models to understand potential traction of the full scale When it comes to risk, it doesn’t get much bigger than throwing away your existing (successful) business model and shifting to a new unknown. But what strikes me about how Adobe handled this transition is how they were able to test subscriptions on a smaller scale for a significant period of time before going all-in: “At the time of these discussions, we were experimenting with subscription models overseas and in the United States. We offered, side by side, similar products under both a subscription model and our traditional perpetual-licensing model, and we observed what the uptake was.” Creative Suite 6 (with its perpetual license) was launched in May 2012 alongside Creative Cloud (subscriptions), and was only recently retired in January 2017! For nearly 5 years, both options were available to consumers side-by-side. Revenue growth through raising prices is not sustainable in the long term “We were driving revenue growth by raising our average selling price—either through straight price increases or through moving people up the product ladder. That wasn’t a sustainable approach.” In SaaS, price-raising is a common strategy for driving revenue growth that doesn’t actually require businesses to win new business. In many scenarios it makes sense, particularly when products mature, gaining new powerful feature sets targeted to enterprise-level customers. Raising the price (or adding more expensive pricing tiers) reflects the increasing value delivered by the product. What Adobe realised, however, is that the price-raising strategy is not sustainable in the longer-term. There’s only so long you can keep hiking prices, even with consistent product improvements. Stakeholder management and goal-setting is key to success Adobe is a public company. Not everyone has to answer to Wall Street, but every business — no matter the size — has stakeholders that require careful relationship management. Big changes that involve killing (or at least maiming) your cash cow are sure to be met with high levels of concern. Three things strike me about how Adobe handled the transition with its shareholders: 1. Over-communication The point here is to go above and beyond the expected level of communication, to avoid leaving any questions unanswered when it comes to the execution. This process requires you to be proactive, rather than reactive. “The point is, we were transparent. We over-communicated. When we did that, and when Wall Street saw the traction we were getting with the initial release, the stock started to move.” 2. Goal-setting A great way to inspire confidence is to consistently meet goals. Each time a goal is met, confidence is reinforced and compounds with each subsequent goal. When it came to subscription metrics, Adobe executives gave clear “markers” along the path to success: “We gave them ‘markers’—for instance, we said we were going to reach 4 million subscribers in 2015 and build up ARR.” 3. Education One big challenge for Adobe in moving to the subscription model was in helping investors see and think in the “new” way of measuring such a business. Subscription revenue requires subscription metrics — and the team at Adobe focused on educating investors on how exactly this was done: “We shifted their focus toward the building blocks of the Creative Cloud business—subscriptions, annualized recurring revenues (ARR), average revenue per user, and revenue that was contracted and either deferred or in backlog” Don’t underestimate the cultural aspects of change “We had to contend with some of that cultural antibody—especially given that we were a company that had been doing things the same way for almost three decades. Literally any form of change is going to meet resistance in a company that’s been around nearly 30 years, even changing the brand of coffee. But for younger startups, it can still be challenging to seemingly “undo” months of progress and pursue a different strategy. Employees in smaller businesses often feel a stronger attachment and sense of ownership over the work they do, and it can be disheartening to let go of that. “We instituted open dialogue with employees—here’s what we’re going through, here’s what it might look like—and we encouraged debate. Not everyone stayed, but those who did were committed to the cloud model.” The principles that Adobe followed with its employees apply to any sized business: Leaders need to be transparent, encourage debate and be open to the very real possibility that the “new world” is just not something certain employees want to be a part of — and that’s okay! “Dig in” and question every aspect of your current model “For any company moving to a subscription model, you need to deliver ongoing value to the customer and also create new sources of value that didn’t exist with the old model. You can’t just sell the same offering in a different way.” The SaaS model revolves around delivering ongoing value to users. This may be obvious in 2017, but to Adobe in 2012 this was a level of foresight many businesses didn’t even manage. “In every part of the business, we had to dig in and ask, ‘How do we need to do this differently?’ Moving to the cloud affected how we engineered the products, our operations, and our go-to-market and business models.” With any change to your billing model or even pricing structure, it’s worth taking a fresh look at every aspect of the business that could be affected by it. If you’re offering a new premium plan, what does this mean for your support structure? How does the marketing focus need to change to accommodate expansion in the target customer base? Dig in, and don’t leave any stone unturned. “You have to take a fresh look at your products—and be willing to ‘burn the boats,’ so to speak.” In other words, look for the things today that are taken for granted, and question every single one of them. Listen and respond to feedback Not every aspect of the move was a roaring success from day one. The initial subscription offering for Creative Cloud left hobbyists (particularly photographers) feeling sidelined: “We learned an important lesson in this area early on, when we got serious pushback to our cloud plan from our photography customers, who felt the offering did not work for them.” In response to this, the company eventually introduced a Photography plan, packaging the Photoshop and Lightroom apps into a more affordable $10 monthly fee. This shows that even with a year of financial modelling and running numbers, you can’t expect to hit the right solution first time. Clearly for Adobe, there were some things they just couldn’t see without the feedback of loyal customers. In summary Today, after a long transition period, Adobe has completed their transition to a subscription model – they no longer offer perpetually-licensed solutions for their creative software. The sheer scale and numbers involved in the success of this transition are hard to ignore, however they don’t tell the full story of the organizational and cultural paradigm shift that was required. The learnings and values listed above can apply to any business going through a major change of pricing model or product pivot. These changes affect all aspects of a business, and present huge challenges both internally and with communication to external stakeholders. </sys

Forecasting Sales in a Product-Led Business. Forecasting sales. This has been a challenge for companies since…well, since we started selling things. This was a challenge even when we companies operated with a traditional sales-led approach — when we had salespeople interacting with every customer and able to provide input on a forecast. But then came the product-led growth model which has proven that your business can grow while having little, if any, traditional sales interaction with the majority of our prospective customers. And this model has taken the forecasting challenge to a whole other place. But what if you are operating with both models? What if you are a modern SaaS business with both a product-led motion as well as a traditional sales-led approach AT THE SAME TIME?!?! Meaning, you have customers self-serving their way to conversion (and expansion) AND you have a sales team that is selling into higher-value accounts in a high-touch way? How can you possibly forecast sales with this type of hybrid approach? Well…you need to design a hybrid forecasting model. And that is what we will explore in this post. Let’s start with a look at the different methodologies: Sales-led forecasting Product-led forecasting The sales forecasting formula Before we get into the specifics of the different methodologies, it’s important to look at the calculation that underpins any sales forecasting practice (often called a weighted pipeline). It’s pretty basic (and I’m sure if you are reading this, you have used this calculation before). To forecast sales of any new deal, you use the formula: Amount of deal x Likelihood to close = Forecasted revenue For example, if you have a potential $10,000 deal that is 50% likely to close, that would contribute $5,000 to your forecast. When you do that across all the deals in your pipeline, it would look like this: (Hopefully, you have more than 3 deals in your pipeline 🙃 ) Pretty simple, right? Well…as the math goes, yes, very simple. The challenge is actually plugging in accurate and unbiased values in the calculation. Potential deal size For sales-led forecasting, potential deal sizes are typically generated by the salesperson working the deal. This information is usually derived from sales conversations: How many users will you need? How much data will you be tracking? Are there freemium features that are interesting to you? From these answers, a salesperson is tasked with estimating the deal value. If you have relatively standard pricing structures, estimating potential deal size can be done fairly accurately. For traditional enterprise deals, the potential deal size is really what a salesperson thinks he/she can charge. With product-led forecasting, this becomes easier (in most cases). Product-led businesses typically have fairly standard pricing tiers, especially for the initial conversion. This means that potential deal sizes for new conversions can be easily plugged-in. With that said, in the general forecasting model, the potential deal size is NOT the most challenging piece. The more challenging piece for any forecast model is calculating the LIKELIHOOD TO CLOSE. Amount of deal X Likelihood to close = Forecasted revenue And this is where we will focus most of our time in this discussion. LIKELIHOOD TO CLOSE represents the most significant difference between the two forecasting methodologies. In a sales-led forecasting model, LIKELIHOOD TO CLOSE is based on sales stage In a product-led forecasting model, LIKELIHOOD TO CLOSE is based on product engagement Let’s dig in. Sales-led forecasting methodology If you have ever done forecasting in a sales-led environment, this process is going to look very familiar. In a traditional sales-led approach, deals are managed in a CRM and salespeople are charged with updating the all-important DEAL STAGE field. This single field represents, perhaps, the most important field in your CRM set-up. It is this field that is used to determine the LIKELIHOOD TO CLOSE for each and every deal. It looked a little something like this: Translating deal stages into Likelihood percentages is the basis for a sales-led forecasting model. Voila…your forward-looking forecast! This methodology should be no surprise to anyone who has done any forecasting in the past. It’s fairly standard. Not great, but standard. Product-led forecasting methodology The emergence of the self-serve, product-led model has turned much of the traditional software operation on its head — and it’s completely upended revenue forecasting. As shown above, traditional forecasting models are dependent on a salesperson’s interaction with a prospect. But a pure-play product-led model is designed to eliminate the sales interaction. SO…. How do you build a forecasting model based on sales stages when…there are no sales stages? Tweet this quote In short, you don’t. You build a different model. Two approaches to forecasting revenue in a product-led model There are really two approaches forecasting in this new world. The first is a TOP-DOWN approach and the second is a more detailed, BOTTOM-UP approach. APPROACH 1: TOP-DOWN APPROACH (not recommended) If you’re like most SaaS businesses that have been around for a while, you probably have some historical data that tells you on average how many of your trial leads convert to paid every month. With a TOP-DOWN approach, you simply take this average conversion rate and apply it going forward. For example, let’s say your monthly conversions for the past few months have looked like this: On average, you have a 4.1% conversion rate. If you take that average and do a little math magic, it’s easy to get a rough estimate of net new MRR in future months. Watch: Conversion rate x Number of trials x Average revenue per customer = Net New MRR It’s certainly simple and manageable. But it’s not ideal. Just look at the variation in conversion rate over the past few months in this example. This is very common. Lazily applying the average conversion rate across the number of trials is missing a big factor — the quality of those trials. And their LIKELIHOOD TO CONVERT. Lucky for you, there’s a way to modify this equation so it takes into account both the volume and quality of your trial signups. APPROACH 2: BOTTOM-UP APPROACH This method of sales forecasting is more in line with the sales-led forecasting outlined earlier. This method evaluates each individual trial and predicts its Likelihood to Convert. But how do you determine this Likelihood to Convert? It’s all about product engagement. In a true product-led motion, how a trial account is engaged with the product during a trial is the biggest determinant of their Likelihood to Convert. If they see value with your product, the more likely they are to pay for it. But how do you measure that? It’s all about product engagement. More specifically, we recommend using a simple metric — Activation Rate. What is the Activation rate? n. Static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is. n. An indicator of how far along someone is to becoming a product qualified lead. Every new trial account must do several things before they can see value with a product. And these “things” are unique to every product. These are a product’s “Activation steps”. For example, the Activation steps for a SaaS company with a GSuite plugin for email collaboration might look like this: Activation Rate is simply the percentage of steps completed. If an account or user has done 2 out of the 5 steps above, it is 20% Activated. 20% of the way to hitting first value with the product. If it completes 4 out of 5 steps — it has an Activation Rate of 80%. Pretty simple. While the Activation steps are going to be different for every product, the Activation Rate will always measure how likely an account is to convert. It makes sense, right? The more value someone has gotten from your product during their trial period, the more likely they are to pay for the product after the trial is over. Activation as a proxy for the likelihood that they’ll convert Just like with sales stages in the sales-led forecasting model, translating Activation Rate into Likelihood to Convert represents the basis of a product-led revenue forecasting model. To translate Likelihood to Convert from Activation Rate, have a look at some of your historical data. Identify a relationship between the two. For example, in our business, we know when a trial account gets to about 50% activation or above, they convert to paid 70% to 80% of the time. Similarly, we know that, if someone gets to an Activation rate of 25% to 50%, they will close about 20% of the time. Anyone less than that is not going to close. (Even our most optimistic salesperson agrees with that statement!) Here’s what a product-led growth revenue forecast for our business might look like when taking into account Activation rate. And the best part — we’ve found Activation works even better than the guesstimates of an overzealous (or under…zealous?) salesperson. That’s because it’s based on an objective measurement of how much value users are getting from the product, not a person’s estimation of how much they can make an account believe in a future promise of value. Ok, great. But, again, what if you are product-led AND have a sales team? And this brings us back to our original question. How do you create a revenue forecasting model for a SaaS business with both a product-led AND a sales-led motion??? Tweet this quote Very few SaaS businesses operate on a purely product-led model. The vast majority product-led companies also employee a sales-led motion – whether that is against the entire prospect base, or focused on the (potentially) higher-dollar deals. Either way, this hybrid structure calls for a hybrid forecasting model. Does this mean we have to completely segment our customer base into “those who talk to sales” and “those who don’t”? That seems like a complete PITA… This is one way to approach the problem, but yes…it is a PITA. And a lot of work. And, in many cases, it won’t work because these are some muddy waters. As anyone that manages a sales team in a product-led business can tell you — it’s impossible to keep salespeople from contacting as many potential customers as possible. Which means, it’s near impossible to have these segments completely separate. Instead of using two completely different forecasting models, we recommend combining them into a single “series of stages” (ok, ok….it’s a funnel) that can account for both motions at the same time. What would that look like? Something like this: As you can see, this funnel combines “stages” from both the traditional sales-led motion (Demo request, Demo held, Verbal Commit) as well as product-led motion (Trial started, 50% Activated, 100% Activated). This new funnel (these new “stages”) can then be translated into LIKELIHOOD TO CONVERT percentages. Like this: Viola! A new forecasting model that accounts for product engagement AND sales interaction at the same time. Your new, hybrid forecasting model would look something like this: With this model, it doesn’t matter if a prospective account talks to a salesperson before starting a trial or not. Either way, its “stage” can be captured. One assumption this model (safely) makes is that every account will go through some form of trial before deciding to convert. Even those accounts that come in through a sales process aren’t going to buy the product without trying it first. This is just the way of the world as it stands. This means all additional stages from a traditional sales-led model are unnecessary — until you get to a verbal commit. The demo “bumper” I know what you’re thinking now: This all makes sense, but it doesn’t always represent our customers’ journey. Many times — maybe in most cases — our team talks to an account AFTER they sign-up for a trial. And many times, you will see higher conversion rates on accounts that get an assist from your team (as Tom Tunguz from Redpoint Ventures found in his 2019 SaaS survey). So…how do you capture this scenario in your hybrid forecasting model? How do you account for: Trial sign-up → Demo held OR Trial sign-up → 50% Activated → Demo held Or maybe even Trial sign-up → 100% Activated → Demo held In these cases, you may want to apply what we’ll call a “demo booster”. This is simply a way to “boost” the likelihood percentage of any deal that has received a demo (regardless of when). This means that “Demo request” or “Demo held” will not exist as their own sales stage. You would use the product-led stages mentioned earlier and simply boost any likelihood forecast by 10%. It would look like this: This “demo boost” model is probably more in-line with how the process works for many of today’s product-led businesses. It’s a little more work to execute (mostly because it adds an extra step to an existing process), but it’s really not hard. And more accurate. It’s worth a little extra work to have a forecasting model that is more in-line with your customers’ actual journey. Not an exact science — but incredibly accurate Sales forecasting is not an exact science. It never has been and it never will be. But that doesn’t mean you shouldn’t put more rigor into it to create a model that is in line with your go-to-market motion. The models presented here are designed to do just that. The goal is to encourage you to think about how to infuse product engagement data into your sales forecasting models. The specifics of how you do it aren’t as important as the process here. Give it a shot. I promise you won’t be disappointed. In fact, you’ll wonder why you didn’t do it a long time ago. About the author Derek Skaletsky is a SaaS entrepreneur and founder of Sherlock — the leading product-engagement scoring platform helping companies drive their product-led operations.

[INST] Forecasting Sales in a Product-Led Business [/INST]

Forecasting sales. This has been a challenge for companies since…well, since we started selling things. This was a challenge even when we companies operated with a traditional sales-led approach — when we had salespeople interacting with every customer and able to provide input on a forecast. But then came the product-led growth model which has proven that your business can grow while having little, if any, traditional sales interaction with the majority of our prospective customers. And this model has taken the forecasting challenge to a whole other place. But what if you are operating with both models? What if you are a modern SaaS business with both a product-led motion as well as a traditional sales-led approach AT THE SAME TIME?!?! Meaning, you have customers self-serving their way to conversion (and expansion) AND you have a sales team that is selling into higher-value accounts in a high-touch way? How can you possibly forecast sales with this type of hybrid approach? Well…you need to design a hybrid forecasting model. And that is what we will explore in this post. Let’s start with a look at the different methodologies: Sales-led forecasting Product-led forecasting The sales forecasting formula Before we get into the specifics of the different methodologies, it’s important to look at the calculation that underpins any sales forecasting practice (often called a weighted pipeline). It’s pretty basic (and I’m sure if you are reading this, you have used this calculation before). To forecast sales of any new deal, you use the formula: Amount of deal x Likelihood to close = Forecasted revenue For example, if you have a potential $10,000 deal that is 50% likely to close, that would contribute $5,000 to your forecast. When you do that across all the deals in your pipeline, it would look like this: (Hopefully, you have more than 3 deals in your pipeline 🙃 ) Pretty simple, right? Well…as the math goes, yes, very simple. The challenge is actually plugging in accurate and unbiased values in the calculation. Potential deal size For sales-led forecasting, potential deal sizes are typically generated by the salesperson working the deal. This information is usually derived from sales conversations: How many users will you need? How much data will you be tracking? Are there freemium features that are interesting to you? From these answers, a salesperson is tasked with estimating the deal value. If you have relatively standard pricing structures, estimating potential deal size can be done fairly accurately. For traditional enterprise deals, the potential deal size is really what a salesperson thinks he/she can charge. With product-led forecasting, this becomes easier (in most cases). Product-led businesses typically have fairly standard pricing tiers, especially for the initial conversion. This means that potential deal sizes for new conversions can be easily plugged-in. With that said, in the general forecasting model, the potential deal size is NOT the most challenging piece. The more challenging piece for any forecast model is calculating the LIKELIHOOD TO CLOSE. Amount of deal X Likelihood to close = Forecasted revenue And this is where we will focus most of our time in this discussion. LIKELIHOOD TO CLOSE represents the most significant difference between the two forecasting methodologies. In a sales-led forecasting model, LIKELIHOOD TO CLOSE is based on sales stage In a product-led forecasting model, LIKELIHOOD TO CLOSE is based on product engagement Let’s dig in. Sales-led forecasting methodology If you have ever done forecasting in a sales-led environment, this process is going to look very familiar. In a traditional sales-led approach, deals are managed in a CRM and salespeople are charged with updating the all-important DEAL STAGE field. This single field represents, perhaps, the most important field in your CRM set-up. It is this field that is used to determine the LIKELIHOOD TO CLOSE for each and every deal. It looked a little something like this: Translating deal stages into Likelihood percentages is the basis for a sales-led forecasting model. Voila…your forward-looking forecast! This methodology should be no surprise to anyone who has done any forecasting in the past. It’s fairly standard. Not great, but standard. Product-led forecasting methodology The emergence of the self-serve, product-led model has turned much of the traditional software operation on its head — and it’s completely upended revenue forecasting. As shown above, traditional forecasting models are dependent on a salesperson’s interaction with a prospect. But a pure-play product-led model is designed to eliminate the sales interaction. SO…. How do you build a forecasting model based on sales stages when…there are no sales stages? Tweet this quote In short, you don’t. You build a different model. Two approaches to forecasting revenue in a product-led model There are really two approaches forecasting in this new world. The first is a TOP-DOWN approach and the second is a more detailed, BOTTOM-UP approach. APPROACH 1: TOP-DOWN APPROACH (not recommended) If you’re like most SaaS businesses that have been around for a while, you probably have some historical data that tells you on average how many of your trial leads convert to paid every month. With a TOP-DOWN approach, you simply take this average conversion rate and apply it going forward. For example, let’s say your monthly conversions for the past few months have looked like this: On average, you have a 4.1% conversion rate. If you take that average and do a little math magic, it’s easy to get a rough estimate of net new MRR in future months. Watch: Conversion rate x Number of trials x Average revenue per customer = Net New MRR It’s certainly simple and manageable. But it’s not ideal. Just look at the variation in conversion rate over the past few months in this example. This is very common. Lazily applying the average conversion rate across the number of trials is missing a big factor — the quality of those trials. And their LIKELIHOOD TO CONVERT. Lucky for you, there’s a way to modify this equation so it takes into account both the volume and quality of your trial signups. APPROACH 2: BOTTOM-UP APPROACH This method of sales forecasting is more in line with the sales-led forecasting outlined earlier. This method evaluates each individual trial and predicts its Likelihood to Convert. But how do you determine this Likelihood to Convert? It’s all about product engagement. In a true product-led motion, how a trial account is engaged with the product during a trial is the biggest determinant of their Likelihood to Convert. If they see value with your product, the more likely they are to pay for it. But how do you measure that? It’s all about product engagement. More specifically, we recommend using a simple metric — Activation Rate. What is the Activation rate? n. Static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is. n. An indicator of how far along someone is to becoming a product qualified lead. Every new trial account must do several things before they can see value with a product. And these “things” are unique to every product. These are a product’s “Activation steps”. For example, the Activation steps for a SaaS company with a GSuite plugin for email collaboration might look like this: Activation Rate is simply the percentage of steps completed. If an account or user has done 2 out of the 5 steps above, it is 20% Activated. 20% of the way to hitting first value with the product. If it completes 4 out of 5 steps — it has an Activation Rate of 80%. Pretty simple. While the Activation steps are going to be different for every product, the Activation Rate will always measure how likely an account is to convert. It makes sense, right? The more value someone has gotten from your product during their trial period, the more likely they are to pay for the product after the trial is over. Activation as a proxy for the likelihood that they’ll convert Just like with sales stages in the sales-led forecasting model, translating Activation Rate into Likelihood to Convert represents the basis of a product-led revenue forecasting model. To translate Likelihood to Convert from Activation Rate, have a look at some of your historical data. Identify a relationship between the two. For example, in our business, we know when a trial account gets to about 50% activation or above, they convert to paid 70% to 80% of the time. Similarly, we know that, if someone gets to an Activation rate of 25% to 50%, they will close about 20% of the time. Anyone less than that is not going to close. (Even our most optimistic salesperson agrees with that statement!) Here’s what a product-led growth revenue forecast for our business might look like when taking into account Activation rate. And the best part — we’ve found Activation works even better than the guesstimates of an overzealous (or under…zealous?) salesperson. That’s because it’s based on an objective measurement of how much value users are getting from the product, not a person’s estimation of how much they can make an account believe in a future promise of value. Ok, great. But, again, what if you are product-led AND have a sales team? And this brings us back to our original question. How do you create a revenue forecasting model for a SaaS business with both a product-led AND a sales-led motion??? Tweet this quote Very few SaaS businesses operate on a purely product-led model. The vast majority product-led companies also employee a sales-led motion – whether that is against the entire prospect base, or focused on the (potentially) higher-dollar deals. Either way, this hybrid structure calls for a hybrid forecasting model. Does this mean we have to completely segment our customer base into “those who talk to sales” and “those who don’t”? That seems like a complete PITA… This is one way to approach the problem, but yes…it is a PITA. And a lot of work. And, in many cases, it won’t work because these are some muddy waters. As anyone that manages a sales team in a product-led business can tell you — it’s impossible to keep salespeople from contacting as many potential customers as possible. Which means, it’s near impossible to have these segments completely separate. Instead of using two completely different forecasting models, we recommend combining them into a single “series of stages” (ok, ok….it’s a funnel) that can account for both motions at the same time. What would that look like? Something like this: As you can see, this funnel combines “stages” from both the traditional sales-led motion (Demo request, Demo held, Verbal Commit) as well as product-led motion (Trial started, 50% Activated, 100% Activated). This new funnel (these new “stages”) can then be translated into LIKELIHOOD TO CONVERT percentages. Like this: Viola! A new forecasting model that accounts for product engagement AND sales interaction at the same time. Your new, hybrid forecasting model would look something like this: With this model, it doesn’t matter if a prospective account talks to a salesperson before starting a trial or not. Either way, its “stage” can be captured. One assumption this model (safely) makes is that every account will go through some form of trial before deciding to convert. Even those accounts that come in through a sales process aren’t going to buy the product without trying it first. This is just the way of the world as it stands. This means all additional stages from a traditional sales-led model are unnecessary — until you get to a verbal commit. The demo “bumper” I know what you’re thinking now: This all makes sense, but it doesn’t always represent our customers’ journey. Many times — maybe in most cases — our team talks to an account AFTER they sign-up for a trial. And many times, you will see higher conversion rates on accounts that get an assist from your team (as Tom Tunguz from Redpoint Ventures found in his 2019 SaaS survey). So…how do you capture this scenario in your hybrid forecasting model? How do you account for: Trial sign-up → Demo held OR Trial sign-up → 50% Activated → Demo held Or maybe even Trial sign-up → 100% Activated → Demo held In these cases, you may want to apply what we’ll call a “demo booster”. This is simply a way to “boost” the likelihood percentage of any deal that has received a demo (regardless of when). This means that “Demo request” or “Demo held” will not exist as their own sales stage. You would use the product-led stages mentioned earlier and simply boost any likelihood forecast by 10%. It would look like this: This “demo boost” model is probably more in-line with how the process works for many of today’s product-led businesses. It’s a little more work to execute (mostly because it adds an extra step to an existing process), but it’s really not hard. And more accurate. It’s worth a little extra work to have a forecasting model that is more in-line with your customers’ actual journey. Not an exact science — but incredibly accurate Sales forecasting is not an exact science. It never has been and it never will be. But that doesn’t mean you shouldn’t put more rigor into it to create a model that is in line with your go-to-market motion. The models presented here are designed to do just that. The goal is to encourage you to think about how to infuse product engagement data into your sales forecasting models. The specifics of how you do it aren’t as important as the process here. Give it a shot. I promise you won’t be disappointed. In fact, you’ll wonder why you didn’t do it a long time ago. About the author Derek Skaletsky is a SaaS entrepreneur and founder of Sherlock — the leading product-engagement scoring platform helping companies drive their product-led operations.

<sys> [INST] Forecasting Sales in a Product-Led Business [/INST] Forecasting sales. This has been a challenge for companies since…well, since we started selling things. This was a challenge even when we companies operated with a traditional sales-led approach — when we had salespeople interacting with every customer and able to provide input on a forecast. But then came the product-led growth model which has proven that your business can grow while having little, if any, traditional sales interaction with the majority of our prospective customers. And this model has taken the forecasting challenge to a whole other place. But what if you are operating with both models? What if you are a modern SaaS business with both a product-led motion as well as a traditional sales-led approach AT THE SAME TIME?!?! Meaning, you have customers self-serving their way to conversion (and expansion) AND you have a sales team that is selling into higher-value accounts in a high-touch way? How can you possibly forecast sales with this type of hybrid approach? Well…you need to design a hybrid forecasting model. And that is what we will explore in this post. Let’s start with a look at the different methodologies: Sales-led forecasting Product-led forecasting The sales forecasting formula Before we get into the specifics of the different methodologies, it’s important to look at the calculation that underpins any sales forecasting practice (often called a weighted pipeline). It’s pretty basic (and I’m sure if you are reading this, you have used this calculation before). To forecast sales of any new deal, you use the formula: Amount of deal x Likelihood to close = Forecasted revenue For example, if you have a potential $10,000 deal that is 50% likely to close, that would contribute $5,000 to your forecast. When you do that across all the deals in your pipeline, it would look like this: (Hopefully, you have more than 3 deals in your pipeline 🙃 ) Pretty simple, right? Well…as the math goes, yes, very simple. The challenge is actually plugging in accurate and unbiased values in the calculation. Potential deal size For sales-led forecasting, potential deal sizes are typically generated by the salesperson working the deal. This information is usually derived from sales conversations: How many users will you need? How much data will you be tracking? Are there freemium features that are interesting to you? From these answers, a salesperson is tasked with estimating the deal value. If you have relatively standard pricing structures, estimating potential deal size can be done fairly accurately. For traditional enterprise deals, the potential deal size is really what a salesperson thinks he/she can charge. With product-led forecasting, this becomes easier (in most cases). Product-led businesses typically have fairly standard pricing tiers, especially for the initial conversion. This means that potential deal sizes for new conversions can be easily plugged-in. With that said, in the general forecasting model, the potential deal size is NOT the most challenging piece. The more challenging piece for any forecast model is calculating the LIKELIHOOD TO CLOSE. Amount of deal X Likelihood to close = Forecasted revenue And this is where we will focus most of our time in this discussion. LIKELIHOOD TO CLOSE represents the most significant difference between the two forecasting methodologies. In a sales-led forecasting model, LIKELIHOOD TO CLOSE is based on sales stage In a product-led forecasting model, LIKELIHOOD TO CLOSE is based on product engagement Let’s dig in. Sales-led forecasting methodology If you have ever done forecasting in a sales-led environment, this process is going to look very familiar. In a traditional sales-led approach, deals are managed in a CRM and salespeople are charged with updating the all-important DEAL STAGE field. This single field represents, perhaps, the most important field in your CRM set-up. It is this field that is used to determine the LIKELIHOOD TO CLOSE for each and every deal. It looked a little something like this: Translating deal stages into Likelihood percentages is the basis for a sales-led forecasting model. Voila…your forward-looking forecast! This methodology should be no surprise to anyone who has done any forecasting in the past. It’s fairly standard. Not great, but standard. Product-led forecasting methodology The emergence of the self-serve, product-led model has turned much of the traditional software operation on its head — and it’s completely upended revenue forecasting. As shown above, traditional forecasting models are dependent on a salesperson’s interaction with a prospect. But a pure-play product-led model is designed to eliminate the sales interaction. SO…. How do you build a forecasting model based on sales stages when…there are no sales stages? Tweet this quote In short, you don’t. You build a different model. Two approaches to forecasting revenue in a product-led model There are really two approaches forecasting in this new world. The first is a TOP-DOWN approach and the second is a more detailed, BOTTOM-UP approach. APPROACH 1: TOP-DOWN APPROACH (not recommended) If you’re like most SaaS businesses that have been around for a while, you probably have some historical data that tells you on average how many of your trial leads convert to paid every month. With a TOP-DOWN approach, you simply take this average conversion rate and apply it going forward. For example, let’s say your monthly conversions for the past few months have looked like this: On average, you have a 4.1% conversion rate. If you take that average and do a little math magic, it’s easy to get a rough estimate of net new MRR in future months. Watch: Conversion rate x Number of trials x Average revenue per customer = Net New MRR It’s certainly simple and manageable. But it’s not ideal. Just look at the variation in conversion rate over the past few months in this example. This is very common. Lazily applying the average conversion rate across the number of trials is missing a big factor — the quality of those trials. And their LIKELIHOOD TO CONVERT. Lucky for you, there’s a way to modify this equation so it takes into account both the volume and quality of your trial signups. APPROACH 2: BOTTOM-UP APPROACH This method of sales forecasting is more in line with the sales-led forecasting outlined earlier. This method evaluates each individual trial and predicts its Likelihood to Convert. But how do you determine this Likelihood to Convert? It’s all about product engagement. In a true product-led motion, how a trial account is engaged with the product during a trial is the biggest determinant of their Likelihood to Convert. If they see value with your product, the more likely they are to pay for it. But how do you measure that? It’s all about product engagement. More specifically, we recommend using a simple metric — Activation Rate. What is the Activation rate? n. Static measurement of how far along a user or account is in their journey toward “first value” or the “aha” moment where they realize how great your product is. n. An indicator of how far along someone is to becoming a product qualified lead. Every new trial account must do several things before they can see value with a product. And these “things” are unique to every product. These are a product’s “Activation steps”. For example, the Activation steps for a SaaS company with a GSuite plugin for email collaboration might look like this: Activation Rate is simply the percentage of steps completed. If an account or user has done 2 out of the 5 steps above, it is 20% Activated. 20% of the way to hitting first value with the product. If it completes 4 out of 5 steps — it has an Activation Rate of 80%. Pretty simple. While the Activation steps are going to be different for every product, the Activation Rate will always measure how likely an account is to convert. It makes sense, right? The more value someone has gotten from your product during their trial period, the more likely they are to pay for the product after the trial is over. Activation as a proxy for the likelihood that they’ll convert Just like with sales stages in the sales-led forecasting model, translating Activation Rate into Likelihood to Convert represents the basis of a product-led revenue forecasting model. To translate Likelihood to Convert from Activation Rate, have a look at some of your historical data. Identify a relationship between the two. For example, in our business, we know when a trial account gets to about 50% activation or above, they convert to paid 70% to 80% of the time. Similarly, we know that, if someone gets to an Activation rate of 25% to 50%, they will close about 20% of the time. Anyone less than that is not going to close. (Even our most optimistic salesperson agrees with that statement!) Here’s what a product-led growth revenue forecast for our business might look like when taking into account Activation rate. And the best part — we’ve found Activation works even better than the guesstimates of an overzealous (or under…zealous?) salesperson. That’s because it’s based on an objective measurement of how much value users are getting from the product, not a person’s estimation of how much they can make an account believe in a future promise of value. Ok, great. But, again, what if you are product-led AND have a sales team? And this brings us back to our original question. How do you create a revenue forecasting model for a SaaS business with both a product-led AND a sales-led motion??? Tweet this quote Very few SaaS businesses operate on a purely product-led model. The vast majority product-led companies also employee a sales-led motion – whether that is against the entire prospect base, or focused on the (potentially) higher-dollar deals. Either way, this hybrid structure calls for a hybrid forecasting model. Does this mean we have to completely segment our customer base into “those who talk to sales” and “those who don’t”? That seems like a complete PITA… This is one way to approach the problem, but yes…it is a PITA. And a lot of work. And, in many cases, it won’t work because these are some muddy waters. As anyone that manages a sales team in a product-led business can tell you — it’s impossible to keep salespeople from contacting as many potential customers as possible. Which means, it’s near impossible to have these segments completely separate. Instead of using two completely different forecasting models, we recommend combining them into a single “series of stages” (ok, ok….it’s a funnel) that can account for both motions at the same time. What would that look like? Something like this: As you can see, this funnel combines “stages” from both the traditional sales-led motion (Demo request, Demo held, Verbal Commit) as well as product-led motion (Trial started, 50% Activated, 100% Activated). This new funnel (these new “stages”) can then be translated into LIKELIHOOD TO CONVERT percentages. Like this: Viola! A new forecasting model that accounts for product engagement AND sales interaction at the same time. Your new, hybrid forecasting model would look something like this: With this model, it doesn’t matter if a prospective account talks to a salesperson before starting a trial or not. Either way, its “stage” can be captured. One assumption this model (safely) makes is that every account will go through some form of trial before deciding to convert. Even those accounts that come in through a sales process aren’t going to buy the product without trying it first. This is just the way of the world as it stands. This means all additional stages from a traditional sales-led model are unnecessary — until you get to a verbal commit. The demo “bumper” I know what you’re thinking now: This all makes sense, but it doesn’t always represent our customers’ journey. Many times — maybe in most cases — our team talks to an account AFTER they sign-up for a trial. And many times, you will see higher conversion rates on accounts that get an assist from your team (as Tom Tunguz from Redpoint Ventures found in his 2019 SaaS survey). So…how do you capture this scenario in your hybrid forecasting model? How do you account for: Trial sign-up → Demo held OR Trial sign-up → 50% Activated → Demo held Or maybe even Trial sign-up → 100% Activated → Demo held In these cases, you may want to apply what we’ll call a “demo booster”. This is simply a way to “boost” the likelihood percentage of any deal that has received a demo (regardless of when). This means that “Demo request” or “Demo held” will not exist as their own sales stage. You would use the product-led stages mentioned earlier and simply boost any likelihood forecast by 10%. It would look like this: This “demo boost” model is probably more in-line with how the process works for many of today’s product-led businesses. It’s a little more work to execute (mostly because it adds an extra step to an existing process), but it’s really not hard. And more accurate. It’s worth a little extra work to have a forecasting model that is more in-line with your customers’ actual journey. Not an exact science — but incredibly accurate Sales forecasting is not an exact science. It never has been and it never will be. But that doesn’t mean you shouldn’t put more rigor into it to create a model that is in line with your go-to-market motion. The models presented here are designed to do just that. The goal is to encourage you to think about how to infuse product engagement data into your sales forecasting models. The specifics of how you do it aren’t as important as the process here. Give it a shot. I promise you won’t be disappointed. In fact, you’ll wonder why you didn’t do it a long time ago. About the author Derek Skaletsky is a SaaS entrepreneur and founder of Sherlock — the leading product-engagement scoring platform helping companies drive their product-led operations. </sys

The Great NPS Debate: How, when, and whether to use it. What NPS is and how it works At the most basic level, the Net Promoter Score is a process for gauging customer satisfaction and gathering customer feedback. NPS is remarkably simple. The metric measures customer satisfaction based on a single question. How likely is it that you would recommend our company/product/service to a friend or colleague? I.e.- How likely are you to promote us? Notice the question is not explicitly about whether the customer is happy. Rather the question gauges whether the customer trusts the product enough to attach his own name and credibility to it, by recommending it to someone he personally knows. In this way, NPS indicates not only customer satisfaction but also customer loyalty. The first is attitude; the second is behavior. Especially in SaaS, there’s a definitive (and lucrative!) difference between the two. Respondents answer by choosing a number on a scale of 0-10, 10 being the most likely. Here’s how the scores shake out: Source: Net Promoter Network, https://www.netpromoter.com/know/ It’s most common to follow the question with an optional open-ended feedback section, where customers can explain and elaborate on their score. The qualitative feedback from this second question makes NPS doubly valuable. Finally, the scores from all individual customers are then aggregated into one single number, a single company statistic which is the company’s Net Promoter Score. The final Net Promoter Score can range from -100, if every customer is a Detractor, to 100, if every customer is a Promoter. Where NPS came from Today more than two thirds of Fortune 1000 companies use Net Promoter Score, as reported by Bain & Company to Bloomberg in May 2016. NPS came about back in 2003, trademarked by Fred Reichheld, Bain & Company, and Satmetrix Systems. Fred Reichheld, an expert in customer loyalty, introduced the metric through an article in the Harvard Business Review. In it, he made his case for customer loyalty: “Evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general profitable growth can’t be achieved without it.” – Reichheld, Harvard Business Review Those of us in SaaS are very familiar with this by now; we know how vital customer loyalty is to the subscription model. We also might be familiar with the article’s tone. Its title, “The One Number You Need To Grow,” smacks of the ubiquitous headlines in today’s startup world, always claiming to hold the most important, the most true information that guarantees your success. And it’s perhaps that very confidence that drew so much critical attention to the survey as a reliable metric. Research teams cited the title of that article, and other highly confident phrases in Satmetrix content, as points they wanted to challenge. These studies wanted “peer-reviewed, scientific investigations” that examined questions such as: Is NPS a more accurate and reliable measurement of customer satisfaction and customer spending? Is it enough on its own? And thus, the start of the NPS debate. The Debate While NPS measures the promoters and detractors of countless companies, it has promoters and detractors itself. Since its creation, and especially during its rise in popularity, the metric has received plenty of praise and plenty of criticism. Some people are in the middle, praising the survey itself but criticizing how companies actually use it. Those Pro NPS Fans of Net Promoter Score include business executives across all industries and the venture capitalists who invest in them. The survey and metric have become so popular that a few standalone NPS services exist, such as Wootric and Promoter.io. 1. It’s a leading indicator of business growth. SaaS executives and VCs alike are always looking to leading indicators of growth. The connection is crystal clear and data-driven for revenue metrics, but not as much for Net Promoter Score. The logic follows that the more enthusiastic customers you have, the more new customers you can attract (and with less effort or investment). And this cycle becomes a growth engine. “The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department.” – Reichheld, Harvard Business Review In SaaS, customer loyalty is the bedrock. If you can mobilize and verbalize that loyalty, you then have a marketing system that is literally and figuratively priceless. 2. It’s simpler and more productive than traditional customer satisfaction surveys. NPS is low friction for both sides. The survey is only two questions, which is easier for the company because response data is contained and easy to evaluate. Also, customers are more likely to fill it out because it’s so brief. As a result the company gets more customer data than they would otherwise. Response rates to NPS are generally much higher than traditional surveys. 3. It clearly suggests where to nurture customer base. Many companies use NPS to gauge the happiness of customers, plus the viability of a word-of-mouth network. NPS results show strengths and weaknesses in your customer base. Customer success teams can work pointedly to improve customer relations — whether that’s bringing back around a detractor, or encouraging a promoter to actually make some referrals. What do investors like about it? Investors like a high NPS score, of course. Happy customers will stick around longer, and that retention will become the engine of the company’s revenue growth. It goes beyond retention, too. Happy customers beget new customers (through recommendation), who in turn hopefully beget even more customers. This bestows a kind of human virality to the product, which investors love to see. Investors also like to see an upward trend of successive NPS scores, which is “a good leading indicator that the company is not only focused on their users, but is improving its value proposition over time.” (Andreessen Horowitz) Bill Macaitis, CMO of Slack, explained to Tunguz how a high NPS can positively affect other growth metrics. “The larger the number of advocates for product, the lower the customer acquisition costs for the company, and the more effective customer success team will be.” – Bill Macaitis To brush up on Customer Acquisition Cost (CAC) and other SaaS metrics, check out our free SaaS Metrics Cheat Sheet. Those Dubious of NPS Critics of NPS include… academics, staticians, market researchers, and perhaps the creator himself. Here are the main reasons for their doubts. 1. It’s not actually a proven indicator of business growth. Several published studies and peer-reviewed tests of NPS could not find statistically significant relationships between the NPS scores and business growth. The founder himself admits that his original research was flawed, and that he never found evidence that high NPS scores are causally related to company growth. 2. It’s not statistically reliable. Research in 2008 found that out of four scales tested, this NPS has the lowest predictive validity. Add to that the potential of skewed results that can happen with any survey: self-selection bias or non-response bias, for instance. To combat this problem, Bain & Company published a guide on how to shape NPS into a reliable metric. 3. It’s used incorrectly. We’ll detail when and how to use NPS below. But a common criticism is that companies send the survey too frequently. There is such a thing as diminishing returns when it comes to customer surveys. Results become less representative. The other common criticism is that companies rely too heavily on NPS alone. They don’t use any other measurements of customer experience and satisfaction to complement the Net Promoter Score. No metric is perfect It doesn’t need to be perfect. There’s no problem testing or using a metric once you’re fully informed of its limitations. The danger is only if you subscribe to the wishful thinking that “the next big thing” in startup strategy will be a surefire way to improve your business. Basically, apply the Net Promoter Score survey with the same intellectual honesty you use with the rest of your business. There are still valid advantages to using NPS. Evaluate what value you can get from it and where it might fall short. And, of course, conduct the survey as it’s intended. Shaped by all of this research, here are the best “best practices” we came up with. How to conduct an NPS survey properly Conducting an NPS survey is as simple as you might guess. Most companies send it through email. There are tools you can use, whether it be a sleek survey from a service like Typeform, or a third-party company dedicated to the Net Promoter System. Our bottom-line advice would be to use any tool that allows you to organize and filter the responses on the backend. Who to send it to Each survey should go to a blind subset of your customers. Bonus: NPS can also be used internally to measure employee satisfaction and gather employee feedback. It’s not as comprehensive — and therefore not as telling — as a more formal employee engagement survey. And of course the follow up is completely different. When to send it Some companies send it to all of their customers simultaneously, at some regular interval like once per quarter. However NPS tools recommend sending the surveys frequently, but always to a different subset of your customers. That way you can monitor how the scores evolve as you pivot and tweak your service, rather than getting a static feedback dump once every three months. 1. At regular milestones in the customer lifecycle. Not too frequently! Over-surveying leads to survey fatigue and unrepresentative results. 2. Neutral (or arbitrary) scheduling. Don’t trigger the NPS survey on customer behavior. Don’t base it on an interaction with the company, and try to avoid giving that impression to your customers. For instance, don’t send an NPS survey after a customer support exchange. No matter how you frame the NPS survey, when the customer reads it they will inevitably reflect on that customer support interaction — rather than your product or service at large. An excellent (or terrible) customer support experience will bias that customer’s NPS score. And so their NPS score won’t be truly representative of their feelings about your company. How to calculate an NPS score So what’s your company’s overall Net Promoter Score? Here is the most common way to calculate it: Percentage of promoters = Number of respondents who ranked 9 or 10, divided by total number of respondents Percentage of detractors = Number of respondents who ranked ≤ 6, divided by total number of respondents Then do a little subtraction: Your result will be on a scale from a low -100 to a high 100. And what’s a normal Net Promoter Score? There’s also a debate about whether there are industry benchmarks for NPS scores. There is no universal NPS scale by which to measure any company. But Zendesk conducted some research that found averages and benchmarks within industry niches. “Best in class companies achieve a score of 70 on a scale of 100, but according to Zendesk data, the typical B2B software company achieves only 29.” – Tunguz Those of us in SaaS are always looking to benchmarks to judge our performance against the competition. But when it comes to customer experience and NPS, put benchmarks aside. There’s no real use in comparing yourself. Instead, focus on improving your own numbers. Create your own internal benchmarks. Which brings us to the next section… How to make NPS results actionable “The path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net-promoter number transparent throughout your organization.” – Reichheld, Harvard Business Review In fact, the value of NPS lies in the changes you make after the survey is over. So what to do once you’ve collected the feedback? First, you thank your customers for taking the time give it. Then you act on it. 1. Game plan for employees Yep, first and foremost, disseminate the open feedback sections beyond executives and management to relevant front-line employees and teams. “If NPS does its job, you will identify broken processes and workflows that normally frustrate staff. Since a poor system affects customers, don’t expect them to hang around for too long. And don’t expect staff to either.” – Typeform 2. Game plan for promoters Customers who gave 9s and 10s are your prime target for cultivating them into advocates (or evangelists, or whichever term you like). If they’re not already talking about you, they probably will. They might even be happy to! So try directly asking them to recommend your company to others. Check out some other word-of-mouth strategies for B2B. 3. Game plan for detractors This all depends on what’s scalable and cost-effective for you. For some companies, it’s not feasible to reach out to every detractor, understand their complaints, and attempt to coax them back to liking you. But it is probably wise to reach out to those customers who are high value, or those who have left scathing or otherwise impassioned feedback in the free response section. You’ve given the opportunity to speak, and you should make them feel heard.

[INST] The Great NPS Debate: How, when, and whether to use it [/INST]

What NPS is and how it works At the most basic level, the Net Promoter Score is a process for gauging customer satisfaction and gathering customer feedback. NPS is remarkably simple. The metric measures customer satisfaction based on a single question. How likely is it that you would recommend our company/product/service to a friend or colleague? I.e.- How likely are you to promote us? Notice the question is not explicitly about whether the customer is happy. Rather the question gauges whether the customer trusts the product enough to attach his own name and credibility to it, by recommending it to someone he personally knows. In this way, NPS indicates not only customer satisfaction but also customer loyalty. The first is attitude; the second is behavior. Especially in SaaS, there’s a definitive (and lucrative!) difference between the two. Respondents answer by choosing a number on a scale of 0-10, 10 being the most likely. Here’s how the scores shake out: Source: Net Promoter Network, https://www.netpromoter.com/know/ It’s most common to follow the question with an optional open-ended feedback section, where customers can explain and elaborate on their score. The qualitative feedback from this second question makes NPS doubly valuable. Finally, the scores from all individual customers are then aggregated into one single number, a single company statistic which is the company’s Net Promoter Score. The final Net Promoter Score can range from -100, if every customer is a Detractor, to 100, if every customer is a Promoter. Where NPS came from Today more than two thirds of Fortune 1000 companies use Net Promoter Score, as reported by Bain & Company to Bloomberg in May 2016. NPS came about back in 2003, trademarked by Fred Reichheld, Bain & Company, and Satmetrix Systems. Fred Reichheld, an expert in customer loyalty, introduced the metric through an article in the Harvard Business Review. In it, he made his case for customer loyalty: “Evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general profitable growth can’t be achieved without it.” – Reichheld, Harvard Business Review Those of us in SaaS are very familiar with this by now; we know how vital customer loyalty is to the subscription model. We also might be familiar with the article’s tone. Its title, “The One Number You Need To Grow,” smacks of the ubiquitous headlines in today’s startup world, always claiming to hold the most important, the most true information that guarantees your success. And it’s perhaps that very confidence that drew so much critical attention to the survey as a reliable metric. Research teams cited the title of that article, and other highly confident phrases in Satmetrix content, as points they wanted to challenge. These studies wanted “peer-reviewed, scientific investigations” that examined questions such as: Is NPS a more accurate and reliable measurement of customer satisfaction and customer spending? Is it enough on its own? And thus, the start of the NPS debate. The Debate While NPS measures the promoters and detractors of countless companies, it has promoters and detractors itself. Since its creation, and especially during its rise in popularity, the metric has received plenty of praise and plenty of criticism. Some people are in the middle, praising the survey itself but criticizing how companies actually use it. Those Pro NPS Fans of Net Promoter Score include business executives across all industries and the venture capitalists who invest in them. The survey and metric have become so popular that a few standalone NPS services exist, such as Wootric and Promoter.io. 1. It’s a leading indicator of business growth. SaaS executives and VCs alike are always looking to leading indicators of growth. The connection is crystal clear and data-driven for revenue metrics, but not as much for Net Promoter Score. The logic follows that the more enthusiastic customers you have, the more new customers you can attract (and with less effort or investment). And this cycle becomes a growth engine. “The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department.” – Reichheld, Harvard Business Review In SaaS, customer loyalty is the bedrock. If you can mobilize and verbalize that loyalty, you then have a marketing system that is literally and figuratively priceless. 2. It’s simpler and more productive than traditional customer satisfaction surveys. NPS is low friction for both sides. The survey is only two questions, which is easier for the company because response data is contained and easy to evaluate. Also, customers are more likely to fill it out because it’s so brief. As a result the company gets more customer data than they would otherwise. Response rates to NPS are generally much higher than traditional surveys. 3. It clearly suggests where to nurture customer base. Many companies use NPS to gauge the happiness of customers, plus the viability of a word-of-mouth network. NPS results show strengths and weaknesses in your customer base. Customer success teams can work pointedly to improve customer relations — whether that’s bringing back around a detractor, or encouraging a promoter to actually make some referrals. What do investors like about it? Investors like a high NPS score, of course. Happy customers will stick around longer, and that retention will become the engine of the company’s revenue growth. It goes beyond retention, too. Happy customers beget new customers (through recommendation), who in turn hopefully beget even more customers. This bestows a kind of human virality to the product, which investors love to see. Investors also like to see an upward trend of successive NPS scores, which is “a good leading indicator that the company is not only focused on their users, but is improving its value proposition over time.” (Andreessen Horowitz) Bill Macaitis, CMO of Slack, explained to Tunguz how a high NPS can positively affect other growth metrics. “The larger the number of advocates for product, the lower the customer acquisition costs for the company, and the more effective customer success team will be.” – Bill Macaitis To brush up on Customer Acquisition Cost (CAC) and other SaaS metrics, check out our free SaaS Metrics Cheat Sheet. Those Dubious of NPS Critics of NPS include… academics, staticians, market researchers, and perhaps the creator himself. Here are the main reasons for their doubts. 1. It’s not actually a proven indicator of business growth. Several published studies and peer-reviewed tests of NPS could not find statistically significant relationships between the NPS scores and business growth. The founder himself admits that his original research was flawed, and that he never found evidence that high NPS scores are causally related to company growth. 2. It’s not statistically reliable. Research in 2008 found that out of four scales tested, this NPS has the lowest predictive validity. Add to that the potential of skewed results that can happen with any survey: self-selection bias or non-response bias, for instance. To combat this problem, Bain & Company published a guide on how to shape NPS into a reliable metric. 3. It’s used incorrectly. We’ll detail when and how to use NPS below. But a common criticism is that companies send the survey too frequently. There is such a thing as diminishing returns when it comes to customer surveys. Results become less representative. The other common criticism is that companies rely too heavily on NPS alone. They don’t use any other measurements of customer experience and satisfaction to complement the Net Promoter Score. No metric is perfect It doesn’t need to be perfect. There’s no problem testing or using a metric once you’re fully informed of its limitations. The danger is only if you subscribe to the wishful thinking that “the next big thing” in startup strategy will be a surefire way to improve your business. Basically, apply the Net Promoter Score survey with the same intellectual honesty you use with the rest of your business. There are still valid advantages to using NPS. Evaluate what value you can get from it and where it might fall short. And, of course, conduct the survey as it’s intended. Shaped by all of this research, here are the best “best practices” we came up with. How to conduct an NPS survey properly Conducting an NPS survey is as simple as you might guess. Most companies send it through email. There are tools you can use, whether it be a sleek survey from a service like Typeform, or a third-party company dedicated to the Net Promoter System. Our bottom-line advice would be to use any tool that allows you to organize and filter the responses on the backend. Who to send it to Each survey should go to a blind subset of your customers. Bonus: NPS can also be used internally to measure employee satisfaction and gather employee feedback. It’s not as comprehensive — and therefore not as telling — as a more formal employee engagement survey. And of course the follow up is completely different. When to send it Some companies send it to all of their customers simultaneously, at some regular interval like once per quarter. However NPS tools recommend sending the surveys frequently, but always to a different subset of your customers. That way you can monitor how the scores evolve as you pivot and tweak your service, rather than getting a static feedback dump once every three months. 1. At regular milestones in the customer lifecycle. Not too frequently! Over-surveying leads to survey fatigue and unrepresentative results. 2. Neutral (or arbitrary) scheduling. Don’t trigger the NPS survey on customer behavior. Don’t base it on an interaction with the company, and try to avoid giving that impression to your customers. For instance, don’t send an NPS survey after a customer support exchange. No matter how you frame the NPS survey, when the customer reads it they will inevitably reflect on that customer support interaction — rather than your product or service at large. An excellent (or terrible) customer support experience will bias that customer’s NPS score. And so their NPS score won’t be truly representative of their feelings about your company. How to calculate an NPS score So what’s your company’s overall Net Promoter Score? Here is the most common way to calculate it: Percentage of promoters = Number of respondents who ranked 9 or 10, divided by total number of respondents Percentage of detractors = Number of respondents who ranked ≤ 6, divided by total number of respondents Then do a little subtraction: Your result will be on a scale from a low -100 to a high 100. And what’s a normal Net Promoter Score? There’s also a debate about whether there are industry benchmarks for NPS scores. There is no universal NPS scale by which to measure any company. But Zendesk conducted some research that found averages and benchmarks within industry niches. “Best in class companies achieve a score of 70 on a scale of 100, but according to Zendesk data, the typical B2B software company achieves only 29.” – Tunguz Those of us in SaaS are always looking to benchmarks to judge our performance against the competition. But when it comes to customer experience and NPS, put benchmarks aside. There’s no real use in comparing yourself. Instead, focus on improving your own numbers. Create your own internal benchmarks. Which brings us to the next section… How to make NPS results actionable “The path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net-promoter number transparent throughout your organization.” – Reichheld, Harvard Business Review In fact, the value of NPS lies in the changes you make after the survey is over. So what to do once you’ve collected the feedback? First, you thank your customers for taking the time give it. Then you act on it. 1. Game plan for employees Yep, first and foremost, disseminate the open feedback sections beyond executives and management to relevant front-line employees and teams. “If NPS does its job, you will identify broken processes and workflows that normally frustrate staff. Since a poor system affects customers, don’t expect them to hang around for too long. And don’t expect staff to either.” – Typeform 2. Game plan for promoters Customers who gave 9s and 10s are your prime target for cultivating them into advocates (or evangelists, or whichever term you like). If they’re not already talking about you, they probably will. They might even be happy to! So try directly asking them to recommend your company to others. Check out some other word-of-mouth strategies for B2B. 3. Game plan for detractors This all depends on what’s scalable and cost-effective for you. For some companies, it’s not feasible to reach out to every detractor, understand their complaints, and attempt to coax them back to liking you. But it is probably wise to reach out to those customers who are high value, or those who have left scathing or otherwise impassioned feedback in the free response section. You’ve given the opportunity to speak, and you should make them feel heard.

<sys> [INST] The Great NPS Debate: How, when, and whether to use it [/INST] What NPS is and how it works At the most basic level, the Net Promoter Score is a process for gauging customer satisfaction and gathering customer feedback. NPS is remarkably simple. The metric measures customer satisfaction based on a single question. How likely is it that you would recommend our company/product/service to a friend or colleague? I.e.- How likely are you to promote us? Notice the question is not explicitly about whether the customer is happy. Rather the question gauges whether the customer trusts the product enough to attach his own name and credibility to it, by recommending it to someone he personally knows. In this way, NPS indicates not only customer satisfaction but also customer loyalty. The first is attitude; the second is behavior. Especially in SaaS, there’s a definitive (and lucrative!) difference between the two. Respondents answer by choosing a number on a scale of 0-10, 10 being the most likely. Here’s how the scores shake out: Source: Net Promoter Network, https://www.netpromoter.com/know/ It’s most common to follow the question with an optional open-ended feedback section, where customers can explain and elaborate on their score. The qualitative feedback from this second question makes NPS doubly valuable. Finally, the scores from all individual customers are then aggregated into one single number, a single company statistic which is the company’s Net Promoter Score. The final Net Promoter Score can range from -100, if every customer is a Detractor, to 100, if every customer is a Promoter. Where NPS came from Today more than two thirds of Fortune 1000 companies use Net Promoter Score, as reported by Bain & Company to Bloomberg in May 2016. NPS came about back in 2003, trademarked by Fred Reichheld, Bain & Company, and Satmetrix Systems. Fred Reichheld, an expert in customer loyalty, introduced the metric through an article in the Harvard Business Review. In it, he made his case for customer loyalty: “Evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general profitable growth can’t be achieved without it.” – Reichheld, Harvard Business Review Those of us in SaaS are very familiar with this by now; we know how vital customer loyalty is to the subscription model. We also might be familiar with the article’s tone. Its title, “The One Number You Need To Grow,” smacks of the ubiquitous headlines in today’s startup world, always claiming to hold the most important, the most true information that guarantees your success. And it’s perhaps that very confidence that drew so much critical attention to the survey as a reliable metric. Research teams cited the title of that article, and other highly confident phrases in Satmetrix content, as points they wanted to challenge. These studies wanted “peer-reviewed, scientific investigations” that examined questions such as: Is NPS a more accurate and reliable measurement of customer satisfaction and customer spending? Is it enough on its own? And thus, the start of the NPS debate. The Debate While NPS measures the promoters and detractors of countless companies, it has promoters and detractors itself. Since its creation, and especially during its rise in popularity, the metric has received plenty of praise and plenty of criticism. Some people are in the middle, praising the survey itself but criticizing how companies actually use it. Those Pro NPS Fans of Net Promoter Score include business executives across all industries and the venture capitalists who invest in them. The survey and metric have become so popular that a few standalone NPS services exist, such as Wootric and Promoter.io. 1. It’s a leading indicator of business growth. SaaS executives and VCs alike are always looking to leading indicators of growth. The connection is crystal clear and data-driven for revenue metrics, but not as much for Net Promoter Score. The logic follows that the more enthusiastic customers you have, the more new customers you can attract (and with less effort or investment). And this cycle becomes a growth engine. “The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department.” – Reichheld, Harvard Business Review In SaaS, customer loyalty is the bedrock. If you can mobilize and verbalize that loyalty, you then have a marketing system that is literally and figuratively priceless. 2. It’s simpler and more productive than traditional customer satisfaction surveys. NPS is low friction for both sides. The survey is only two questions, which is easier for the company because response data is contained and easy to evaluate. Also, customers are more likely to fill it out because it’s so brief. As a result the company gets more customer data than they would otherwise. Response rates to NPS are generally much higher than traditional surveys. 3. It clearly suggests where to nurture customer base. Many companies use NPS to gauge the happiness of customers, plus the viability of a word-of-mouth network. NPS results show strengths and weaknesses in your customer base. Customer success teams can work pointedly to improve customer relations — whether that’s bringing back around a detractor, or encouraging a promoter to actually make some referrals. What do investors like about it? Investors like a high NPS score, of course. Happy customers will stick around longer, and that retention will become the engine of the company’s revenue growth. It goes beyond retention, too. Happy customers beget new customers (through recommendation), who in turn hopefully beget even more customers. This bestows a kind of human virality to the product, which investors love to see. Investors also like to see an upward trend of successive NPS scores, which is “a good leading indicator that the company is not only focused on their users, but is improving its value proposition over time.” (Andreessen Horowitz) Bill Macaitis, CMO of Slack, explained to Tunguz how a high NPS can positively affect other growth metrics. “The larger the number of advocates for product, the lower the customer acquisition costs for the company, and the more effective customer success team will be.” – Bill Macaitis To brush up on Customer Acquisition Cost (CAC) and other SaaS metrics, check out our free SaaS Metrics Cheat Sheet. Those Dubious of NPS Critics of NPS include… academics, staticians, market researchers, and perhaps the creator himself. Here are the main reasons for their doubts. 1. It’s not actually a proven indicator of business growth. Several published studies and peer-reviewed tests of NPS could not find statistically significant relationships between the NPS scores and business growth. The founder himself admits that his original research was flawed, and that he never found evidence that high NPS scores are causally related to company growth. 2. It’s not statistically reliable. Research in 2008 found that out of four scales tested, this NPS has the lowest predictive validity. Add to that the potential of skewed results that can happen with any survey: self-selection bias or non-response bias, for instance. To combat this problem, Bain & Company published a guide on how to shape NPS into a reliable metric. 3. It’s used incorrectly. We’ll detail when and how to use NPS below. But a common criticism is that companies send the survey too frequently. There is such a thing as diminishing returns when it comes to customer surveys. Results become less representative. The other common criticism is that companies rely too heavily on NPS alone. They don’t use any other measurements of customer experience and satisfaction to complement the Net Promoter Score. No metric is perfect It doesn’t need to be perfect. There’s no problem testing or using a metric once you’re fully informed of its limitations. The danger is only if you subscribe to the wishful thinking that “the next big thing” in startup strategy will be a surefire way to improve your business. Basically, apply the Net Promoter Score survey with the same intellectual honesty you use with the rest of your business. There are still valid advantages to using NPS. Evaluate what value you can get from it and where it might fall short. And, of course, conduct the survey as it’s intended. Shaped by all of this research, here are the best “best practices” we came up with. How to conduct an NPS survey properly Conducting an NPS survey is as simple as you might guess. Most companies send it through email. There are tools you can use, whether it be a sleek survey from a service like Typeform, or a third-party company dedicated to the Net Promoter System. Our bottom-line advice would be to use any tool that allows you to organize and filter the responses on the backend. Who to send it to Each survey should go to a blind subset of your customers. Bonus: NPS can also be used internally to measure employee satisfaction and gather employee feedback. It’s not as comprehensive — and therefore not as telling — as a more formal employee engagement survey. And of course the follow up is completely different. When to send it Some companies send it to all of their customers simultaneously, at some regular interval like once per quarter. However NPS tools recommend sending the surveys frequently, but always to a different subset of your customers. That way you can monitor how the scores evolve as you pivot and tweak your service, rather than getting a static feedback dump once every three months. 1. At regular milestones in the customer lifecycle. Not too frequently! Over-surveying leads to survey fatigue and unrepresentative results. 2. Neutral (or arbitrary) scheduling. Don’t trigger the NPS survey on customer behavior. Don’t base it on an interaction with the company, and try to avoid giving that impression to your customers. For instance, don’t send an NPS survey after a customer support exchange. No matter how you frame the NPS survey, when the customer reads it they will inevitably reflect on that customer support interaction — rather than your product or service at large. An excellent (or terrible) customer support experience will bias that customer’s NPS score. And so their NPS score won’t be truly representative of their feelings about your company. How to calculate an NPS score So what’s your company’s overall Net Promoter Score? Here is the most common way to calculate it: Percentage of promoters = Number of respondents who ranked 9 or 10, divided by total number of respondents Percentage of detractors = Number of respondents who ranked ≤ 6, divided by total number of respondents Then do a little subtraction: Your result will be on a scale from a low -100 to a high 100. And what’s a normal Net Promoter Score? There’s also a debate about whether there are industry benchmarks for NPS scores. There is no universal NPS scale by which to measure any company. But Zendesk conducted some research that found averages and benchmarks within industry niches. “Best in class companies achieve a score of 70 on a scale of 100, but according to Zendesk data, the typical B2B software company achieves only 29.” – Tunguz Those of us in SaaS are always looking to benchmarks to judge our performance against the competition. But when it comes to customer experience and NPS, put benchmarks aside. There’s no real use in comparing yourself. Instead, focus on improving your own numbers. Create your own internal benchmarks. Which brings us to the next section… How to make NPS results actionable “The path to sustainable, profitable growth begins with creating more promoters and fewer detractors and making your net-promoter number transparent throughout your organization.” – Reichheld, Harvard Business Review In fact, the value of NPS lies in the changes you make after the survey is over. So what to do once you’ve collected the feedback? First, you thank your customers for taking the time give it. Then you act on it. 1. Game plan for employees Yep, first and foremost, disseminate the open feedback sections beyond executives and management to relevant front-line employees and teams. “If NPS does its job, you will identify broken processes and workflows that normally frustrate staff. Since a poor system affects customers, don’t expect them to hang around for too long. And don’t expect staff to either.” – Typeform 2. Game plan for promoters Customers who gave 9s and 10s are your prime target for cultivating them into advocates (or evangelists, or whichever term you like). If they’re not already talking about you, they probably will. They might even be happy to! So try directly asking them to recommend your company to others. Check out some other word-of-mouth strategies for B2B. 3. Game plan for detractors This all depends on what’s scalable and cost-effective for you. For some companies, it’s not feasible to reach out to every detractor, understand their complaints, and attempt to coax them back to liking you. But it is probably wise to reach out to those customers who are high value, or those who have left scathing or otherwise impassioned feedback in the free response section. You’ve given the opportunity to speak, and you should make them feel heard. </sys

The Ultimate SaaS Company Tagline Quiz: How’s your SaaS Company Knowledge?. Do you know who owns the tagline: “Build software better, together”? How about “Your key metrics in one place”? And no cheating! Karma will catch up with you. Feel free to share your score on Twitter, or in the comments below.

[INST] The Ultimate SaaS Company Tagline Quiz: How’s your SaaS Company Knowledge? [/INST]

Do you know who owns the tagline: “Build software better, together”? How about “Your key metrics in one place”? And no cheating! Karma will catch up with you. Feel free to share your score on Twitter, or in the comments below.

<sys> [INST] The Ultimate SaaS Company Tagline Quiz: How’s your SaaS Company Knowledge? [/INST] Do you know who owns the tagline: “Build software better, together”? How about “Your key metrics in one place”? And no cheating! Karma will catch up with you. Feel free to share your score on Twitter, or in the comments below. </sys

PR for SaaS Businesses: How to Get High-Quality Leads (Includes Scripts). Media coverage can have a huge impact on your business. Content Marketing Institute reports that B2B companies are 21-23% likelier to achieve success with their content marketing if they use PR. While getting PR isn’t easy (it does take consistent work!), it can be a simple process. Today, you’ll learn how to successfully pitch media outlets and how to create an automated lead funnel with the traffic you get. The benefits of PR for SaaS businesses What is PR for SaaS? PR helps your business get mentioned in the media. This can be traditional news outlets, offline and online publications, influencer feeds, and blogs. For example, a journalist might interview you or write about your product updates or funding rounds. Alternatively, you might write a guest post for a publication or speak on a podcast. The benefits of PR PR (done in the right way) will: Earn you media mentions, brand awareness, and high-quality leads. (Maybe even lower your Customer Acquisition Cost!) Help you build high-quality links to your website. This improves your search engine optimization efforts. In the long run, your own posts rank better and you drive more leads to your website from Google. Enable you to use media mentions on your website and in your marketing and sales material. This builds your credibility and increases social proof (which, again, can lead to more sales). Case in point: I’ve helped my clients and myself get mentions in publications like Fast Company, HuffPost, Entrepreneur, and tons of niche sites in different industries. This gives me credibility. It makes it easier to pitch new guest posts and get clients for my content marketing services because I’ve built up this trust. Not to mention all the great links that help my clients rank better. Or take the social media SaaS business Buffer. Early on, Buffer didn’t have any brand recognition. But by guest posting on small blogs, it was able to move to bigger publications like Entrepreneur, Forbes, and Fast Company. This is how the company got most of its early traction. Buffer built a great reputation, which is invaluable when you’re competing in a crowded marketplace. How to make sure your PR pitches are successful Did you know that journalists receive hundreds of pitches in any given week? It’s true: 57% of top-tier publishers get between 50-500 pitches every week. So, how do you stand out and get your story featured? You need to: Know your audience. Pitch consistently. Tailor your pitches. Know your audience First, there’s no sense in getting PR for the sake of it. Getting mentioned in Forbes might grow your brand awareness. But are your users and customers reading Forbes? Instead, ask yourself what publications your clients read, what podcasts they listen to, and what sites they love. Because the thing is: Niche publications can often be far more effective at driving leads than big sites. Niche publications can often be far more effective at driving leads than big sites. Tweet this quote For example, a SaaS business in the construction industry might get some traction on a site like Business Insider. But what if that SaaS got featured in an industry publication that specifically targets construction executives? The traffic would likely be less impressive. But the number of qualified leads could easily outperform bigger and less targeted publications. Pitch consistently One of the top mistakes businesses make with their PR strategy is that they’re inconsistent in their pitching. Unfortunately, sending out the occasional pitch won’t get you far. Instead, keep a consistent schedule. Sending even one pitch a day will get you much further than randomly pitching whenever you feel like it. And the numbers will add up. When your SaaS business’s name starts popping up everywhere, people will take notice. As they say, it takes 6-8 touches to generate a sales lead. For example, one of my clients is now using a PR pitch strategy every month. With just a few hours of work, they get about two high-quality features on a monthly basis. Tailor your pitches Finally, your pitches need to be tailored. Pitching a standard template doesn’t cut it these days. Instead, research the person and publication you’re pitching. The more relevant you can make your pitch for them and their audience, the better. For example, when I pitched this guest post, I looked at what ChartMogul might be interested in. I noticed that the blog focusses on helping SaaS businesses grow. As my area of expertise is content marketing and SEO, that’s what I focused on. I noticed that there was a gap that could be filled: A “how-to” guide on PR and getting media mentions. The result? You’re reading the product of my pitching right now. 3 specific SaaS PR strategies you can use today Now you have a list of things to think about when you pitch. But how do you pitch effectively? Here below are three ways in which you can use PR for your SaaS business. Media mentions You could wait until you have something newsworthy to share to pitch journalists. But how often do you really get to share cool product updates and funding rounds? Get more media mentions by pitching regularly. The best way to do this? A simple way to get started is to use HARO (Help a Reporter Out). HARO is a newsletter for journalists to find story sources (you!). This means you don’t have to find journalists and figure out what they want to write about. Instead, you get a newsletter three times a day with pitch requests. You then pitch those stories that look interesting to you. The trick to standing out among everyone else? Think about the most common information that’s shared about that topic. How can you add a twist to your answer? Or how can you add more value to the article? For example, I helped one of my SaaS clients Kreezalid craft a pitch for a story. The question asked for examples of using social proof in marketing. We added in Kreezalid’s own numbers to make it more specific and valuable. Here’s a script you can use to create your own HARO pitches: “Hi Name, [Include a bit of information about your SaaS and make it specific to this pitch. For example: ABC SaaS is a leading email marketing platform for educational institutions.] Wanted to share my/our insights: [Include your tip] Let me know if this feels like a fit. Best, Your name” Guest post Guest posting is a great way to build your thought leadership and get traffic and leads. You can guest post for niche publications or publications like Fast Company, Forbes, Business Insider, and more. This is the exact approach I took to publish a guest post on Fast Company: Also, your guest post doesn’t necessarily need to be a traditional text-heavy guest post. You could instead pitch infographics and data visualizations if your SaaS has access to proprietary data. What it comes down to is finding publications that publish guest posts and figuring out what guest posts they would be interested in. To find publications, use these search strings in Google to see what publications have already published guest posts (and are likely to do it again): “Guest post” + “relevant keyword” “Guest writer” + “relevant keyword” “Guest submission” + “relevant keyword” When you find a site that looks promising, take a look at their blog. Based on their blog posts, what topic would their audience be interested in? What topics haven’t they covered extensively? For example, when I pitched this guest post, I looked at what types of posts ChartMogul usually publishes (growth advice for SaaS), a topic they haven’t talked too much about, and that I can write about (PR). Once you’ve found sites to pitch, look for who you should send your pitch to. If it’s a smaller site, it might be the owner. If it’s a bigger site, you should go for the editor. Here’s a script to use to pitch your guest posts: “Hi (Name), My name is (your name) and (include something relevant about your SaaS business). I’d love to submit a guest post to (name of publication). Here are three topic suggestions I think your audience will love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 I’ve/we’ve previously written guest posts for (include a few sites if you’ve previously written guest posts): • Link to example 1 • Link to example 2 • Link to example 3 Let me know if one of these feels like a fit? Best, Your name” Podcasts The last strategy? Podcasts. Podcasting is a powerful strategy to get in front of highly engaged leads. Think about it: They spend an hour listening to you. You bet that they will be interested to learn more after your episode. To find podcasts, use these search strings: “Podcast” + “keyword” “Top podcasts (year)” + “keyword” Again, as with guest posts, think about how you can contribute to that podcast. What is something their audience will like, the podcast hosts haven’t talked about extensively, and you are qualified to talk about? Your pitch should be directed to the podcast hosts. This is the script to pitch: “Hi Name, My name is (your name) and (include something relevant about your SaaS business). I’d love to set up an interview for (name of the podcast). Here are a few topics that I think your audience would love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 Let me know if one of these feels like a fit for (name of the podcast) listeners? Best, Your name” Quick note: You can modify both your guest post and podcast outreach to instead pitch YouTube channels or LinkedIn or Facebook groups to partner up with the admins and that way get in front of new audiences. How to turn your PR efforts into an automated lead funnel By now, you know how to use PR. But how do you turn the brand awareness and traffic you get into leads? Good question. There are two specific strategies you can use here: #1: A dedicated landing page Link to a dedicated landing page, especially if you’re featured in a publication that could bring in more traffic. So, if your SaaS business has been featured in Forbes, your page would say: “Liked our story in Forbes? Here’s how to schedule a demo call with us.” Alternatively, ask them to sign up for your newsletter. #2: Get leads on your newsletter A great way to capture people who aren’t ready to sign up for a trial, book a demo, or get on a call with your sales reps is to get them on your newsletter. This is even more important if your SaaS is a higher investment and the sales cycle is long. Offer a free lead magnet to incentivize people to sign up. Your lead magnet could be a free PDF report that educates your prospects on why your solution is the best one out there. For example, ChartMogul offers a weekly SaaS roundup to subscribers: The next steps are to engage those subscribers and build a funnel so that eventually, you get them on a demo call or to sign up for a free or paid trial of your SaaS. Get started pitching today! To summarize what you’ve learned in this article: PR is a great way for SaaS businesses to grow their businesses. Randomly pitching standard templates won’t do much for you these days. You need to tailor your pitches and keep up a consistent PR strategy. Once you have a bit of traffic built up, you can start turning it into leads, users, and paying customers. The best way to get started is this: Pitch one site today. Then, add another tomorrow, another the day after, and start building up a great strategy that will bring you tons of media mentions. In the end, PR for SaaS businesses can be a straightforward process. The reward? A growth strategy that might just make all the difference for your business. About the Author: Camilla af Hallstrom is a content marketing and SEO consultant for B2B SaaS businesses. Get your copy of the 3-Step B2B Content Marketing Strategy.

[INST] PR for SaaS Businesses: How to Get High-Quality Leads (Includes Scripts) [/INST]

Media coverage can have a huge impact on your business. Content Marketing Institute reports that B2B companies are 21-23% likelier to achieve success with their content marketing if they use PR. While getting PR isn’t easy (it does take consistent work!), it can be a simple process. Today, you’ll learn how to successfully pitch media outlets and how to create an automated lead funnel with the traffic you get. The benefits of PR for SaaS businesses What is PR for SaaS? PR helps your business get mentioned in the media. This can be traditional news outlets, offline and online publications, influencer feeds, and blogs. For example, a journalist might interview you or write about your product updates or funding rounds. Alternatively, you might write a guest post for a publication or speak on a podcast. The benefits of PR PR (done in the right way) will: Earn you media mentions, brand awareness, and high-quality leads. (Maybe even lower your Customer Acquisition Cost!) Help you build high-quality links to your website. This improves your search engine optimization efforts. In the long run, your own posts rank better and you drive more leads to your website from Google. Enable you to use media mentions on your website and in your marketing and sales material. This builds your credibility and increases social proof (which, again, can lead to more sales). Case in point: I’ve helped my clients and myself get mentions in publications like Fast Company, HuffPost, Entrepreneur, and tons of niche sites in different industries. This gives me credibility. It makes it easier to pitch new guest posts and get clients for my content marketing services because I’ve built up this trust. Not to mention all the great links that help my clients rank better. Or take the social media SaaS business Buffer. Early on, Buffer didn’t have any brand recognition. But by guest posting on small blogs, it was able to move to bigger publications like Entrepreneur, Forbes, and Fast Company. This is how the company got most of its early traction. Buffer built a great reputation, which is invaluable when you’re competing in a crowded marketplace. How to make sure your PR pitches are successful Did you know that journalists receive hundreds of pitches in any given week? It’s true: 57% of top-tier publishers get between 50-500 pitches every week. So, how do you stand out and get your story featured? You need to: Know your audience. Pitch consistently. Tailor your pitches. Know your audience First, there’s no sense in getting PR for the sake of it. Getting mentioned in Forbes might grow your brand awareness. But are your users and customers reading Forbes? Instead, ask yourself what publications your clients read, what podcasts they listen to, and what sites they love. Because the thing is: Niche publications can often be far more effective at driving leads than big sites. Niche publications can often be far more effective at driving leads than big sites. Tweet this quote For example, a SaaS business in the construction industry might get some traction on a site like Business Insider. But what if that SaaS got featured in an industry publication that specifically targets construction executives? The traffic would likely be less impressive. But the number of qualified leads could easily outperform bigger and less targeted publications. Pitch consistently One of the top mistakes businesses make with their PR strategy is that they’re inconsistent in their pitching. Unfortunately, sending out the occasional pitch won’t get you far. Instead, keep a consistent schedule. Sending even one pitch a day will get you much further than randomly pitching whenever you feel like it. And the numbers will add up. When your SaaS business’s name starts popping up everywhere, people will take notice. As they say, it takes 6-8 touches to generate a sales lead. For example, one of my clients is now using a PR pitch strategy every month. With just a few hours of work, they get about two high-quality features on a monthly basis. Tailor your pitches Finally, your pitches need to be tailored. Pitching a standard template doesn’t cut it these days. Instead, research the person and publication you’re pitching. The more relevant you can make your pitch for them and their audience, the better. For example, when I pitched this guest post, I looked at what ChartMogul might be interested in. I noticed that the blog focusses on helping SaaS businesses grow. As my area of expertise is content marketing and SEO, that’s what I focused on. I noticed that there was a gap that could be filled: A “how-to” guide on PR and getting media mentions. The result? You’re reading the product of my pitching right now. 3 specific SaaS PR strategies you can use today Now you have a list of things to think about when you pitch. But how do you pitch effectively? Here below are three ways in which you can use PR for your SaaS business. Media mentions You could wait until you have something newsworthy to share to pitch journalists. But how often do you really get to share cool product updates and funding rounds? Get more media mentions by pitching regularly. The best way to do this? A simple way to get started is to use HARO (Help a Reporter Out). HARO is a newsletter for journalists to find story sources (you!). This means you don’t have to find journalists and figure out what they want to write about. Instead, you get a newsletter three times a day with pitch requests. You then pitch those stories that look interesting to you. The trick to standing out among everyone else? Think about the most common information that’s shared about that topic. How can you add a twist to your answer? Or how can you add more value to the article? For example, I helped one of my SaaS clients Kreezalid craft a pitch for a story. The question asked for examples of using social proof in marketing. We added in Kreezalid’s own numbers to make it more specific and valuable. Here’s a script you can use to create your own HARO pitches: “Hi Name, [Include a bit of information about your SaaS and make it specific to this pitch. For example: ABC SaaS is a leading email marketing platform for educational institutions.] Wanted to share my/our insights: [Include your tip] Let me know if this feels like a fit. Best, Your name” Guest post Guest posting is a great way to build your thought leadership and get traffic and leads. You can guest post for niche publications or publications like Fast Company, Forbes, Business Insider, and more. This is the exact approach I took to publish a guest post on Fast Company: Also, your guest post doesn’t necessarily need to be a traditional text-heavy guest post. You could instead pitch infographics and data visualizations if your SaaS has access to proprietary data. What it comes down to is finding publications that publish guest posts and figuring out what guest posts they would be interested in. To find publications, use these search strings in Google to see what publications have already published guest posts (and are likely to do it again): “Guest post” + “relevant keyword” “Guest writer” + “relevant keyword” “Guest submission” + “relevant keyword” When you find a site that looks promising, take a look at their blog. Based on their blog posts, what topic would their audience be interested in? What topics haven’t they covered extensively? For example, when I pitched this guest post, I looked at what types of posts ChartMogul usually publishes (growth advice for SaaS), a topic they haven’t talked too much about, and that I can write about (PR). Once you’ve found sites to pitch, look for who you should send your pitch to. If it’s a smaller site, it might be the owner. If it’s a bigger site, you should go for the editor. Here’s a script to use to pitch your guest posts: “Hi (Name), My name is (your name) and (include something relevant about your SaaS business). I’d love to submit a guest post to (name of publication). Here are three topic suggestions I think your audience will love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 I’ve/we’ve previously written guest posts for (include a few sites if you’ve previously written guest posts): • Link to example 1 • Link to example 2 • Link to example 3 Let me know if one of these feels like a fit? Best, Your name” Podcasts The last strategy? Podcasts. Podcasting is a powerful strategy to get in front of highly engaged leads. Think about it: They spend an hour listening to you. You bet that they will be interested to learn more after your episode. To find podcasts, use these search strings: “Podcast” + “keyword” “Top podcasts (year)” + “keyword” Again, as with guest posts, think about how you can contribute to that podcast. What is something their audience will like, the podcast hosts haven’t talked about extensively, and you are qualified to talk about? Your pitch should be directed to the podcast hosts. This is the script to pitch: “Hi Name, My name is (your name) and (include something relevant about your SaaS business). I’d love to set up an interview for (name of the podcast). Here are a few topics that I think your audience would love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 Let me know if one of these feels like a fit for (name of the podcast) listeners? Best, Your name” Quick note: You can modify both your guest post and podcast outreach to instead pitch YouTube channels or LinkedIn or Facebook groups to partner up with the admins and that way get in front of new audiences. How to turn your PR efforts into an automated lead funnel By now, you know how to use PR. But how do you turn the brand awareness and traffic you get into leads? Good question. There are two specific strategies you can use here: #1: A dedicated landing page Link to a dedicated landing page, especially if you’re featured in a publication that could bring in more traffic. So, if your SaaS business has been featured in Forbes, your page would say: “Liked our story in Forbes? Here’s how to schedule a demo call with us.” Alternatively, ask them to sign up for your newsletter. #2: Get leads on your newsletter A great way to capture people who aren’t ready to sign up for a trial, book a demo, or get on a call with your sales reps is to get them on your newsletter. This is even more important if your SaaS is a higher investment and the sales cycle is long. Offer a free lead magnet to incentivize people to sign up. Your lead magnet could be a free PDF report that educates your prospects on why your solution is the best one out there. For example, ChartMogul offers a weekly SaaS roundup to subscribers: The next steps are to engage those subscribers and build a funnel so that eventually, you get them on a demo call or to sign up for a free or paid trial of your SaaS. Get started pitching today! To summarize what you’ve learned in this article: PR is a great way for SaaS businesses to grow their businesses. Randomly pitching standard templates won’t do much for you these days. You need to tailor your pitches and keep up a consistent PR strategy. Once you have a bit of traffic built up, you can start turning it into leads, users, and paying customers. The best way to get started is this: Pitch one site today. Then, add another tomorrow, another the day after, and start building up a great strategy that will bring you tons of media mentions. In the end, PR for SaaS businesses can be a straightforward process. The reward? A growth strategy that might just make all the difference for your business. About the Author: Camilla af Hallstrom is a content marketing and SEO consultant for B2B SaaS businesses. Get your copy of the 3-Step B2B Content Marketing Strategy.

<sys> [INST] PR for SaaS Businesses: How to Get High-Quality Leads (Includes Scripts) [/INST] Media coverage can have a huge impact on your business. Content Marketing Institute reports that B2B companies are 21-23% likelier to achieve success with their content marketing if they use PR. While getting PR isn’t easy (it does take consistent work!), it can be a simple process. Today, you’ll learn how to successfully pitch media outlets and how to create an automated lead funnel with the traffic you get. The benefits of PR for SaaS businesses What is PR for SaaS? PR helps your business get mentioned in the media. This can be traditional news outlets, offline and online publications, influencer feeds, and blogs. For example, a journalist might interview you or write about your product updates or funding rounds. Alternatively, you might write a guest post for a publication or speak on a podcast. The benefits of PR PR (done in the right way) will: Earn you media mentions, brand awareness, and high-quality leads. (Maybe even lower your Customer Acquisition Cost!) Help you build high-quality links to your website. This improves your search engine optimization efforts. In the long run, your own posts rank better and you drive more leads to your website from Google. Enable you to use media mentions on your website and in your marketing and sales material. This builds your credibility and increases social proof (which, again, can lead to more sales). Case in point: I’ve helped my clients and myself get mentions in publications like Fast Company, HuffPost, Entrepreneur, and tons of niche sites in different industries. This gives me credibility. It makes it easier to pitch new guest posts and get clients for my content marketing services because I’ve built up this trust. Not to mention all the great links that help my clients rank better. Or take the social media SaaS business Buffer. Early on, Buffer didn’t have any brand recognition. But by guest posting on small blogs, it was able to move to bigger publications like Entrepreneur, Forbes, and Fast Company. This is how the company got most of its early traction. Buffer built a great reputation, which is invaluable when you’re competing in a crowded marketplace. How to make sure your PR pitches are successful Did you know that journalists receive hundreds of pitches in any given week? It’s true: 57% of top-tier publishers get between 50-500 pitches every week. So, how do you stand out and get your story featured? You need to: Know your audience. Pitch consistently. Tailor your pitches. Know your audience First, there’s no sense in getting PR for the sake of it. Getting mentioned in Forbes might grow your brand awareness. But are your users and customers reading Forbes? Instead, ask yourself what publications your clients read, what podcasts they listen to, and what sites they love. Because the thing is: Niche publications can often be far more effective at driving leads than big sites. Niche publications can often be far more effective at driving leads than big sites. Tweet this quote For example, a SaaS business in the construction industry might get some traction on a site like Business Insider. But what if that SaaS got featured in an industry publication that specifically targets construction executives? The traffic would likely be less impressive. But the number of qualified leads could easily outperform bigger and less targeted publications. Pitch consistently One of the top mistakes businesses make with their PR strategy is that they’re inconsistent in their pitching. Unfortunately, sending out the occasional pitch won’t get you far. Instead, keep a consistent schedule. Sending even one pitch a day will get you much further than randomly pitching whenever you feel like it. And the numbers will add up. When your SaaS business’s name starts popping up everywhere, people will take notice. As they say, it takes 6-8 touches to generate a sales lead. For example, one of my clients is now using a PR pitch strategy every month. With just a few hours of work, they get about two high-quality features on a monthly basis. Tailor your pitches Finally, your pitches need to be tailored. Pitching a standard template doesn’t cut it these days. Instead, research the person and publication you’re pitching. The more relevant you can make your pitch for them and their audience, the better. For example, when I pitched this guest post, I looked at what ChartMogul might be interested in. I noticed that the blog focusses on helping SaaS businesses grow. As my area of expertise is content marketing and SEO, that’s what I focused on. I noticed that there was a gap that could be filled: A “how-to” guide on PR and getting media mentions. The result? You’re reading the product of my pitching right now. 3 specific SaaS PR strategies you can use today Now you have a list of things to think about when you pitch. But how do you pitch effectively? Here below are three ways in which you can use PR for your SaaS business. Media mentions You could wait until you have something newsworthy to share to pitch journalists. But how often do you really get to share cool product updates and funding rounds? Get more media mentions by pitching regularly. The best way to do this? A simple way to get started is to use HARO (Help a Reporter Out). HARO is a newsletter for journalists to find story sources (you!). This means you don’t have to find journalists and figure out what they want to write about. Instead, you get a newsletter three times a day with pitch requests. You then pitch those stories that look interesting to you. The trick to standing out among everyone else? Think about the most common information that’s shared about that topic. How can you add a twist to your answer? Or how can you add more value to the article? For example, I helped one of my SaaS clients Kreezalid craft a pitch for a story. The question asked for examples of using social proof in marketing. We added in Kreezalid’s own numbers to make it more specific and valuable. Here’s a script you can use to create your own HARO pitches: “Hi Name, [Include a bit of information about your SaaS and make it specific to this pitch. For example: ABC SaaS is a leading email marketing platform for educational institutions.] Wanted to share my/our insights: [Include your tip] Let me know if this feels like a fit. Best, Your name” Guest post Guest posting is a great way to build your thought leadership and get traffic and leads. You can guest post for niche publications or publications like Fast Company, Forbes, Business Insider, and more. This is the exact approach I took to publish a guest post on Fast Company: Also, your guest post doesn’t necessarily need to be a traditional text-heavy guest post. You could instead pitch infographics and data visualizations if your SaaS has access to proprietary data. What it comes down to is finding publications that publish guest posts and figuring out what guest posts they would be interested in. To find publications, use these search strings in Google to see what publications have already published guest posts (and are likely to do it again): “Guest post” + “relevant keyword” “Guest writer” + “relevant keyword” “Guest submission” + “relevant keyword” When you find a site that looks promising, take a look at their blog. Based on their blog posts, what topic would their audience be interested in? What topics haven’t they covered extensively? For example, when I pitched this guest post, I looked at what types of posts ChartMogul usually publishes (growth advice for SaaS), a topic they haven’t talked too much about, and that I can write about (PR). Once you’ve found sites to pitch, look for who you should send your pitch to. If it’s a smaller site, it might be the owner. If it’s a bigger site, you should go for the editor. Here’s a script to use to pitch your guest posts: “Hi (Name), My name is (your name) and (include something relevant about your SaaS business). I’d love to submit a guest post to (name of publication). Here are three topic suggestions I think your audience will love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 I’ve/we’ve previously written guest posts for (include a few sites if you’ve previously written guest posts): • Link to example 1 • Link to example 2 • Link to example 3 Let me know if one of these feels like a fit? Best, Your name” Podcasts The last strategy? Podcasts. Podcasting is a powerful strategy to get in front of highly engaged leads. Think about it: They spend an hour listening to you. You bet that they will be interested to learn more after your episode. To find podcasts, use these search strings: “Podcast” + “keyword” “Top podcasts (year)” + “keyword” Again, as with guest posts, think about how you can contribute to that podcast. What is something their audience will like, the podcast hosts haven’t talked about extensively, and you are qualified to talk about? Your pitch should be directed to the podcast hosts. This is the script to pitch: “Hi Name, My name is (your name) and (include something relevant about your SaaS business). I’d love to set up an interview for (name of the podcast). Here are a few topics that I think your audience would love: • Topic suggestion 1 • Topic suggestion 2 • Topic suggestion 3 Let me know if one of these feels like a fit for (name of the podcast) listeners? Best, Your name” Quick note: You can modify both your guest post and podcast outreach to instead pitch YouTube channels or LinkedIn or Facebook groups to partner up with the admins and that way get in front of new audiences. How to turn your PR efforts into an automated lead funnel By now, you know how to use PR. But how do you turn the brand awareness and traffic you get into leads? Good question. There are two specific strategies you can use here: #1: A dedicated landing page Link to a dedicated landing page, especially if you’re featured in a publication that could bring in more traffic. So, if your SaaS business has been featured in Forbes, your page would say: “Liked our story in Forbes? Here’s how to schedule a demo call with us.” Alternatively, ask them to sign up for your newsletter. #2: Get leads on your newsletter A great way to capture people who aren’t ready to sign up for a trial, book a demo, or get on a call with your sales reps is to get them on your newsletter. This is even more important if your SaaS is a higher investment and the sales cycle is long. Offer a free lead magnet to incentivize people to sign up. Your lead magnet could be a free PDF report that educates your prospects on why your solution is the best one out there. For example, ChartMogul offers a weekly SaaS roundup to subscribers: The next steps are to engage those subscribers and build a funnel so that eventually, you get them on a demo call or to sign up for a free or paid trial of your SaaS. Get started pitching today! To summarize what you’ve learned in this article: PR is a great way for SaaS businesses to grow their businesses. Randomly pitching standard templates won’t do much for you these days. You need to tailor your pitches and keep up a consistent PR strategy. Once you have a bit of traffic built up, you can start turning it into leads, users, and paying customers. The best way to get started is this: Pitch one site today. Then, add another tomorrow, another the day after, and start building up a great strategy that will bring you tons of media mentions. In the end, PR for SaaS businesses can be a straightforward process. The reward? A growth strategy that might just make all the difference for your business. About the Author: Camilla af Hallstrom is a content marketing and SEO consultant for B2B SaaS businesses. Get your copy of the 3-Step B2B Content Marketing Strategy. </sys

How to Analyze Marketing Channels and Campaigns in ChartMogul. Do you know what marketing campaigns and channels are generating the majority of your customers & revenue? What about how certain channels compare in terms of ARPU, customer retention & LTV? If you don’t have the tools to answer these questions, then you could be wasting your marketing budget on campaigns that might drive visits and signups, but don’t convert into customers (or the customers it does generate pay you lower amounts and churn quickly). Fortunately, there is a solution. By capturing marketing channel data and sending it into ChartMogul, you can run reports that show you exactly what channels and campaigns are generating customers & revenue. Why you need to capture marketing channel data Let’s imagine you run a B2B SaaS business and run both Facebook Ads and Google Ads to acquire new customers. If you were just using tools like Google Analytics (which only track visitors to your website), you’d probably get something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Goals (Signups) 200 100 If this was all the information you had access to, then it would look like Facebook Ads are outperforming Google Ads as you got 2x more signups for the same budget. However, imagine if you were tracking these campaigns inside ChartMogul and could see the results of these campaigns in terms of Customers, MRR, ARR, ARPU, etc. You’d have something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Signups 200 100 Customers 20 50 ARR $8,000 $25,000 ARPU $400 $500 When you’re able to analyse campaign effectiveness in terms of number of customers, ARR added & ARPU it’s a different story. In this case, Google Ads is far better because: You got 50 customers from Google Ads instead of 20 from Facebook Ads Your conversion rate from signup to customer is 50% from Google Ads, but only 10% from Facebook Ads You are adding $25,000 in ARR from Google Ads but only $8,000 in ARR from Facebook Ads Your average revenue per user from Google Ads is $500 as opposed to $400 per user from Facebook Ads Your cost of acquiring a customer through Google Ads is $200 as opposed to $500 through Facebook Ads As you can see, when you track your marketing campaigns and channels all the way through to Customers, ARR & ARPU you get a much better picture of what’s working and what’s not, and subsequently where you need to invest more to grow. How to capture marketing channel data in ChartMogul Step 1: Tag your ad campaigns In order to know where your customers are coming from, you first need to tag your ads & campaigns. This includes ads on social networks like Facebook, Twitter & LinkedIn, in search engines like Google & Bing, and in any bespoke campaigns you do in places like trade publications. The best way to do this is to use UTM parameters. UTM parameters are essentially little extra bits of information that you add on to the links behind your ads that inform analytics tools where the traffic is coming from. There are a number of tools that you can use to build them, including Google’s Campaign URL Builder and this free one from Attributer. Step 2: Implement a tracking tool Now that you have tagged your ad campaigns, you need to implement a tool on your website that can read these tracking links and send the data into ChartMogul. One such tool is Attributer.io Attributer is a small piece of code that you place on your website that looks at the UTM parameters (and other information) and determines where the visitor came from (i.e. Paid search, Paid social, Organic search, Email marketing, etc). Attributer then stores this information in a cookie and when the visitor completes a form (i.e. the signup form for your product) it writes this information to hidden fields you add to your forms. Step 3: Send the data to ChartMogul Now that all of your signups have marketing channel information being captured alongside their details (i.e. name, email, phone, etc) in the form, it’s time to send that data into ChartMogul. At Simul Docs we use Stripe as our billing platform, so we send the data to our Stripe account as additional properties against the customer. From there, ChartMogul automatically pulls this customer metadata into our account as custom attributes. With these customs attributes inside ChartMogul, we can use them to segment different reports and see how metrics like Customers, ARPU, LTV and ARR differ by channel. If you don’t use Stripe (or for whatever reason aren’t able to send the data into ChartMogul that way), ChartMogul provides a number of other ways to get marketing channel attribution data into your account, including: Sending them in via Zapier Adding them via the Enrichment API Adding them via Google Sheets Manually adding them via the ChartMogul interface Further information on all of these different methods can be found at ChartMogul’s help center. What you can do with this data With marketing channel attribution data flowing into ChartMogul, you can then analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. Further to that though, tools like Attributer will also pass in more granular detail about each channel, such as Campaign Name, Ad Group & Ad Name for paid channels or the referring domain for Referral traffic. This allows you to get even deeper into analysis and figure out not only how certain channels are performing, but which campaigns, ad groups and ads are driving your growth. Some reports worth looking at include: Number of Customers by Channel By segmenting the ‘Subscriptions’ chart inside ChartMogul by channel, you can see how many new customers each channel brings you each month. You can even go more granular, and look at how many new customers were generated by campaign (i.e. your different Google Ads campaigns), by search engine (i.e. Google vs Bing) and more. This can also be useful information in calculating your CAC as well. Simply divide the amount you spent on each channel or campaign by the number of customers you acquired through that channel. ARR or MRR Added by Channel By segmenting the ARR or MRR charts inside ChartMogul by channel, you can see how much new revenue has been generated by channel each month. And if you need to, you can get more granular and look at how much new revenue was generated by campaign, ad group, etc. This information can be very helpful in determining ROI metrics, such as Time to Payback and ROAS. By comparing the amount you spent per channel or campaign with the amount of revenue you generated from them, you can ascertain whether these activities are returning a positive ROI or not and adjust accordingly. ARPA by Channel By segmenting the ARPA and ASP charts inside ChartMogul by channel, you can get an understanding of which channels are bringing in more higher paying customers. And again, if you need to you can get more granular and look at the ARPA or ASP by campaign, ad group, etc. This information is predominantly useful for comparing channels & campaigns against each other. For instance, imagine you provide HR software and you are running Facebook Ad campaigns into different industries, including retail, hospitality & beauty (nail salons, hair salons, etc). You could use this report to understand which of the campaigns are driving you higher paying customers and optimise accordingly. LTV by Channel Like the ARPA & ASP charts above, by segmenting the LTV chart by channel or campaign you can get an understanding of which activities are driving more valuable customers. The difference with the LTV chart however, is that it takes into account Churn to show overall value as opposed to the shorter term view that ARPA & ASP provide. Start analysing your marketing today If you’re using revenue tools like ChartMogul to track your new customers, MRR growth, Customer LTV, etc then you absolutely should be sending marketing channel data in so that you can segment these metrics by channel and understand what’s working and what isn’t. Doing so has led to many useful insights for us at Simul. We’ve been able to learn that Organic Search accounts for about 80% of our customers & revenue, and that some of our Google Ads campaigns that were delivering a high amount of signups (due to the high search volume) weren’t actually converting into customers and subsequently should be discontinued.

[INST] How to Analyze Marketing Channels and Campaigns in ChartMogul [/INST]

Do you know what marketing campaigns and channels are generating the majority of your customers & revenue? What about how certain channels compare in terms of ARPU, customer retention & LTV? If you don’t have the tools to answer these questions, then you could be wasting your marketing budget on campaigns that might drive visits and signups, but don’t convert into customers (or the customers it does generate pay you lower amounts and churn quickly). Fortunately, there is a solution. By capturing marketing channel data and sending it into ChartMogul, you can run reports that show you exactly what channels and campaigns are generating customers & revenue. Why you need to capture marketing channel data Let’s imagine you run a B2B SaaS business and run both Facebook Ads and Google Ads to acquire new customers. If you were just using tools like Google Analytics (which only track visitors to your website), you’d probably get something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Goals (Signups) 200 100 If this was all the information you had access to, then it would look like Facebook Ads are outperforming Google Ads as you got 2x more signups for the same budget. However, imagine if you were tracking these campaigns inside ChartMogul and could see the results of these campaigns in terms of Customers, MRR, ARR, ARPU, etc. You’d have something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Signups 200 100 Customers 20 50 ARR $8,000 $25,000 ARPU $400 $500 When you’re able to analyse campaign effectiveness in terms of number of customers, ARR added & ARPU it’s a different story. In this case, Google Ads is far better because: You got 50 customers from Google Ads instead of 20 from Facebook Ads Your conversion rate from signup to customer is 50% from Google Ads, but only 10% from Facebook Ads You are adding $25,000 in ARR from Google Ads but only $8,000 in ARR from Facebook Ads Your average revenue per user from Google Ads is $500 as opposed to $400 per user from Facebook Ads Your cost of acquiring a customer through Google Ads is $200 as opposed to $500 through Facebook Ads As you can see, when you track your marketing campaigns and channels all the way through to Customers, ARR & ARPU you get a much better picture of what’s working and what’s not, and subsequently where you need to invest more to grow. How to capture marketing channel data in ChartMogul Step 1: Tag your ad campaigns In order to know where your customers are coming from, you first need to tag your ads & campaigns. This includes ads on social networks like Facebook, Twitter & LinkedIn, in search engines like Google & Bing, and in any bespoke campaigns you do in places like trade publications. The best way to do this is to use UTM parameters. UTM parameters are essentially little extra bits of information that you add on to the links behind your ads that inform analytics tools where the traffic is coming from. There are a number of tools that you can use to build them, including Google’s Campaign URL Builder and this free one from Attributer. Step 2: Implement a tracking tool Now that you have tagged your ad campaigns, you need to implement a tool on your website that can read these tracking links and send the data into ChartMogul. One such tool is Attributer.io Attributer is a small piece of code that you place on your website that looks at the UTM parameters (and other information) and determines where the visitor came from (i.e. Paid search, Paid social, Organic search, Email marketing, etc). Attributer then stores this information in a cookie and when the visitor completes a form (i.e. the signup form for your product) it writes this information to hidden fields you add to your forms. Step 3: Send the data to ChartMogul Now that all of your signups have marketing channel information being captured alongside their details (i.e. name, email, phone, etc) in the form, it’s time to send that data into ChartMogul. At Simul Docs we use Stripe as our billing platform, so we send the data to our Stripe account as additional properties against the customer. From there, ChartMogul automatically pulls this customer metadata into our account as custom attributes. With these customs attributes inside ChartMogul, we can use them to segment different reports and see how metrics like Customers, ARPU, LTV and ARR differ by channel. If you don’t use Stripe (or for whatever reason aren’t able to send the data into ChartMogul that way), ChartMogul provides a number of other ways to get marketing channel attribution data into your account, including: Sending them in via Zapier Adding them via the Enrichment API Adding them via Google Sheets Manually adding them via the ChartMogul interface Further information on all of these different methods can be found at ChartMogul’s help center. What you can do with this data With marketing channel attribution data flowing into ChartMogul, you can then analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. Further to that though, tools like Attributer will also pass in more granular detail about each channel, such as Campaign Name, Ad Group & Ad Name for paid channels or the referring domain for Referral traffic. This allows you to get even deeper into analysis and figure out not only how certain channels are performing, but which campaigns, ad groups and ads are driving your growth. Some reports worth looking at include: Number of Customers by Channel By segmenting the ‘Subscriptions’ chart inside ChartMogul by channel, you can see how many new customers each channel brings you each month. You can even go more granular, and look at how many new customers were generated by campaign (i.e. your different Google Ads campaigns), by search engine (i.e. Google vs Bing) and more. This can also be useful information in calculating your CAC as well. Simply divide the amount you spent on each channel or campaign by the number of customers you acquired through that channel. ARR or MRR Added by Channel By segmenting the ARR or MRR charts inside ChartMogul by channel, you can see how much new revenue has been generated by channel each month. And if you need to, you can get more granular and look at how much new revenue was generated by campaign, ad group, etc. This information can be very helpful in determining ROI metrics, such as Time to Payback and ROAS. By comparing the amount you spent per channel or campaign with the amount of revenue you generated from them, you can ascertain whether these activities are returning a positive ROI or not and adjust accordingly. ARPA by Channel By segmenting the ARPA and ASP charts inside ChartMogul by channel, you can get an understanding of which channels are bringing in more higher paying customers. And again, if you need to you can get more granular and look at the ARPA or ASP by campaign, ad group, etc. This information is predominantly useful for comparing channels & campaigns against each other. For instance, imagine you provide HR software and you are running Facebook Ad campaigns into different industries, including retail, hospitality & beauty (nail salons, hair salons, etc). You could use this report to understand which of the campaigns are driving you higher paying customers and optimise accordingly. LTV by Channel Like the ARPA & ASP charts above, by segmenting the LTV chart by channel or campaign you can get an understanding of which activities are driving more valuable customers. The difference with the LTV chart however, is that it takes into account Churn to show overall value as opposed to the shorter term view that ARPA & ASP provide. Start analysing your marketing today If you’re using revenue tools like ChartMogul to track your new customers, MRR growth, Customer LTV, etc then you absolutely should be sending marketing channel data in so that you can segment these metrics by channel and understand what’s working and what isn’t. Doing so has led to many useful insights for us at Simul. We’ve been able to learn that Organic Search accounts for about 80% of our customers & revenue, and that some of our Google Ads campaigns that were delivering a high amount of signups (due to the high search volume) weren’t actually converting into customers and subsequently should be discontinued.

<sys> [INST] How to Analyze Marketing Channels and Campaigns in ChartMogul [/INST] Do you know what marketing campaigns and channels are generating the majority of your customers & revenue? What about how certain channels compare in terms of ARPU, customer retention & LTV? If you don’t have the tools to answer these questions, then you could be wasting your marketing budget on campaigns that might drive visits and signups, but don’t convert into customers (or the customers it does generate pay you lower amounts and churn quickly). Fortunately, there is a solution. By capturing marketing channel data and sending it into ChartMogul, you can run reports that show you exactly what channels and campaigns are generating customers & revenue. Why you need to capture marketing channel data Let’s imagine you run a B2B SaaS business and run both Facebook Ads and Google Ads to acquire new customers. If you were just using tools like Google Analytics (which only track visitors to your website), you’d probably get something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Goals (Signups) 200 100 If this was all the information you had access to, then it would look like Facebook Ads are outperforming Google Ads as you got 2x more signups for the same budget. However, imagine if you were tracking these campaigns inside ChartMogul and could see the results of these campaigns in terms of Customers, MRR, ARR, ARPU, etc. You’d have something like this: Facebook Ads Google Ads Spend $10,000 $10,0000 Visitors 2,000 1,000 Signups 200 100 Customers 20 50 ARR $8,000 $25,000 ARPU $400 $500 When you’re able to analyse campaign effectiveness in terms of number of customers, ARR added & ARPU it’s a different story. In this case, Google Ads is far better because: You got 50 customers from Google Ads instead of 20 from Facebook Ads Your conversion rate from signup to customer is 50% from Google Ads, but only 10% from Facebook Ads You are adding $25,000 in ARR from Google Ads but only $8,000 in ARR from Facebook Ads Your average revenue per user from Google Ads is $500 as opposed to $400 per user from Facebook Ads Your cost of acquiring a customer through Google Ads is $200 as opposed to $500 through Facebook Ads As you can see, when you track your marketing campaigns and channels all the way through to Customers, ARR & ARPU you get a much better picture of what’s working and what’s not, and subsequently where you need to invest more to grow. How to capture marketing channel data in ChartMogul Step 1: Tag your ad campaigns In order to know where your customers are coming from, you first need to tag your ads & campaigns. This includes ads on social networks like Facebook, Twitter & LinkedIn, in search engines like Google & Bing, and in any bespoke campaigns you do in places like trade publications. The best way to do this is to use UTM parameters. UTM parameters are essentially little extra bits of information that you add on to the links behind your ads that inform analytics tools where the traffic is coming from. There are a number of tools that you can use to build them, including Google’s Campaign URL Builder and this free one from Attributer. Step 2: Implement a tracking tool Now that you have tagged your ad campaigns, you need to implement a tool on your website that can read these tracking links and send the data into ChartMogul. One such tool is Attributer.io Attributer is a small piece of code that you place on your website that looks at the UTM parameters (and other information) and determines where the visitor came from (i.e. Paid search, Paid social, Organic search, Email marketing, etc). Attributer then stores this information in a cookie and when the visitor completes a form (i.e. the signup form for your product) it writes this information to hidden fields you add to your forms. Step 3: Send the data to ChartMogul Now that all of your signups have marketing channel information being captured alongside their details (i.e. name, email, phone, etc) in the form, it’s time to send that data into ChartMogul. At Simul Docs we use Stripe as our billing platform, so we send the data to our Stripe account as additional properties against the customer. From there, ChartMogul automatically pulls this customer metadata into our account as custom attributes. With these customs attributes inside ChartMogul, we can use them to segment different reports and see how metrics like Customers, ARPU, LTV and ARR differ by channel. If you don’t use Stripe (or for whatever reason aren’t able to send the data into ChartMogul that way), ChartMogul provides a number of other ways to get marketing channel attribution data into your account, including: Sending them in via Zapier Adding them via the Enrichment API Adding them via Google Sheets Manually adding them via the ChartMogul interface Further information on all of these different methods can be found at ChartMogul’s help center. What you can do with this data With marketing channel attribution data flowing into ChartMogul, you can then analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. Further to that though, tools like Attributer will also pass in more granular detail about each channel, such as Campaign Name, Ad Group & Ad Name for paid channels or the referring domain for Referral traffic. This allows you to get even deeper into analysis and figure out not only how certain channels are performing, but which campaigns, ad groups and ads are driving your growth. Some reports worth looking at include: Number of Customers by Channel By segmenting the ‘Subscriptions’ chart inside ChartMogul by channel, you can see how many new customers each channel brings you each month. You can even go more granular, and look at how many new customers were generated by campaign (i.e. your different Google Ads campaigns), by search engine (i.e. Google vs Bing) and more. This can also be useful information in calculating your CAC as well. Simply divide the amount you spent on each channel or campaign by the number of customers you acquired through that channel. ARR or MRR Added by Channel By segmenting the ARR or MRR charts inside ChartMogul by channel, you can see how much new revenue has been generated by channel each month. And if you need to, you can get more granular and look at how much new revenue was generated by campaign, ad group, etc. This information can be very helpful in determining ROI metrics, such as Time to Payback and ROAS. By comparing the amount you spent per channel or campaign with the amount of revenue you generated from them, you can ascertain whether these activities are returning a positive ROI or not and adjust accordingly. ARPA by Channel By segmenting the ARPA and ASP charts inside ChartMogul by channel, you can get an understanding of which channels are bringing in more higher paying customers. And again, if you need to you can get more granular and look at the ARPA or ASP by campaign, ad group, etc. This information is predominantly useful for comparing channels & campaigns against each other. For instance, imagine you provide HR software and you are running Facebook Ad campaigns into different industries, including retail, hospitality & beauty (nail salons, hair salons, etc). You could use this report to understand which of the campaigns are driving you higher paying customers and optimise accordingly. LTV by Channel Like the ARPA & ASP charts above, by segmenting the LTV chart by channel or campaign you can get an understanding of which activities are driving more valuable customers. The difference with the LTV chart however, is that it takes into account Churn to show overall value as opposed to the shorter term view that ARPA & ASP provide. Start analysing your marketing today If you’re using revenue tools like ChartMogul to track your new customers, MRR growth, Customer LTV, etc then you absolutely should be sending marketing channel data in so that you can segment these metrics by channel and understand what’s working and what isn’t. Doing so has led to many useful insights for us at Simul. We’ve been able to learn that Organic Search accounts for about 80% of our customers & revenue, and that some of our Google Ads campaigns that were delivering a high amount of signups (due to the high search volume) weren’t actually converting into customers and subsequently should be discontinued. </sys

You Don’t Need an Exit Strategy with Legaltech Entrepreneur Matt Spiegel. Matt Spiegel is a licensed lawyer and serial entrepreneur. His first tech startup was called MyCase, a SaaS product that, “keeps all of your important case details — documents, contacts, calendars, emails, tasks, invoices — in a single, organized location.” The transition from criminal defense law to SaaS started as a “scratch your own itch” kind of thing. A typical day for Matt meant receiving dozens of calls, texts, and emails every day from nervous clients wanting updates and resolution — often while he was in court. This inspired an initial personal build that transformed into a full-fledged legal practice management platform. Matt’s first SaaS success led to more and after some experimentation in B2C, he decided to start another B2B legal tech company, Lawmatics. In this episode of SaaS Open Mic, Matt shares his learnings and approach to building businesses. Can thinking about your exit strategy narrow or diminish your exit strategy? Or at the very least your focus? Matt thinks so: “Build your business as if you’re going to build this massive business that’s going to buy other businesses one day. Some entrepreneurs build a company to sell it quickly, but I feel like you don’t build a great company, necessarily, by doing that. You might cut corners if you are building to sell in a couple of years” Matt Spiegel, Lawmatics 🎧 In the episode Head over to your favorite podcast platform or listen below to hear more on these topics: From criminal defense law to SaaS: how and why Matt started his first legal tech startup Getting out of your comfort zone to try something new and ultimately, coming back to what you love Weighing the options of taking a break from entrepreneurship vs. the decision to ‘just keep firing’ Reactive vs. proactive startup ideas What strategies can be used to tackle different market segments Understanding how customers spend and how to marry that with your product strategy Like, subscribe, and if you’re feeling generous, share your favorite episode(s) with a colleague.

[INST] You Don’t Need an Exit Strategy with Legaltech Entrepreneur Matt Spiegel [/INST]

Matt Spiegel is a licensed lawyer and serial entrepreneur. His first tech startup was called MyCase, a SaaS product that, “keeps all of your important case details — documents, contacts, calendars, emails, tasks, invoices — in a single, organized location.” The transition from criminal defense law to SaaS started as a “scratch your own itch” kind of thing. A typical day for Matt meant receiving dozens of calls, texts, and emails every day from nervous clients wanting updates and resolution — often while he was in court. This inspired an initial personal build that transformed into a full-fledged legal practice management platform. Matt’s first SaaS success led to more and after some experimentation in B2C, he decided to start another B2B legal tech company, Lawmatics. In this episode of SaaS Open Mic, Matt shares his learnings and approach to building businesses. Can thinking about your exit strategy narrow or diminish your exit strategy? Or at the very least your focus? Matt thinks so: “Build your business as if you’re going to build this massive business that’s going to buy other businesses one day. Some entrepreneurs build a company to sell it quickly, but I feel like you don’t build a great company, necessarily, by doing that. You might cut corners if you are building to sell in a couple of years” Matt Spiegel, Lawmatics 🎧 In the episode Head over to your favorite podcast platform or listen below to hear more on these topics: From criminal defense law to SaaS: how and why Matt started his first legal tech startup Getting out of your comfort zone to try something new and ultimately, coming back to what you love Weighing the options of taking a break from entrepreneurship vs. the decision to ‘just keep firing’ Reactive vs. proactive startup ideas What strategies can be used to tackle different market segments Understanding how customers spend and how to marry that with your product strategy Like, subscribe, and if you’re feeling generous, share your favorite episode(s) with a colleague.

<sys> [INST] You Don’t Need an Exit Strategy with Legaltech Entrepreneur Matt Spiegel [/INST] Matt Spiegel is a licensed lawyer and serial entrepreneur. His first tech startup was called MyCase, a SaaS product that, “keeps all of your important case details — documents, contacts, calendars, emails, tasks, invoices — in a single, organized location.” The transition from criminal defense law to SaaS started as a “scratch your own itch” kind of thing. A typical day for Matt meant receiving dozens of calls, texts, and emails every day from nervous clients wanting updates and resolution — often while he was in court. This inspired an initial personal build that transformed into a full-fledged legal practice management platform. Matt’s first SaaS success led to more and after some experimentation in B2C, he decided to start another B2B legal tech company, Lawmatics. In this episode of SaaS Open Mic, Matt shares his learnings and approach to building businesses. Can thinking about your exit strategy narrow or diminish your exit strategy? Or at the very least your focus? Matt thinks so: “Build your business as if you’re going to build this massive business that’s going to buy other businesses one day. Some entrepreneurs build a company to sell it quickly, but I feel like you don’t build a great company, necessarily, by doing that. You might cut corners if you are building to sell in a couple of years” Matt Spiegel, Lawmatics 🎧 In the episode Head over to your favorite podcast platform or listen below to hear more on these topics: From criminal defense law to SaaS: how and why Matt started his first legal tech startup Getting out of your comfort zone to try something new and ultimately, coming back to what you love Weighing the options of taking a break from entrepreneurship vs. the decision to ‘just keep firing’ Reactive vs. proactive startup ideas What strategies can be used to tackle different market segments Understanding how customers spend and how to marry that with your product strategy Like, subscribe, and if you’re feeling generous, share your favorite episode(s) with a colleague. </sys

Introducing the New Chargify Integration by SaaSync. ChartMogul’s integration with Chargify is now managed by our integration partner, SaaSync. With this integration, you will have access to ChartMogul’s Data Platform, which provides a transparent view of what has been imported into ChartMogul and how Chargify data maps to ChartMogul customers, invoices, plans, and transactions. In addition to Data Platform access, the new Chargify integration supports many additional Chargify features: Relationship Invoicing, Chargify’s newly redesigned invoicing capabilities. Recurring components, Chargify’s highly configurable recurring billing logic. Cancellations from 100% refunds or voided transactions Percentage discounts Multiple price points on a product Splitting tax out on taxable items Sounds great, how do I get started? For new ChartMogul accounts (created after September 1, 2021), you can start using the new Chargify integration right away, by creating an account at SaaSync and connecting Chargify with Chartmogul through SaaSync. For ChartMogul accounts with existing Chargify Data Sources (Chargify Data Source created before September 1, 2021), we plan to migrate all ChartMogul customers using the existing Chargify integration to this SaaSync developed integration and sunset our own integration in the following weeks. What if I’m already using Chargify? ChartMogul’s success team will reach out to account owners to assist with migrating to the new Chargify integration developed by SaaSync. In order to migrate existing Chargify Data Sources to new Chargify integration, go to our help center and follow the outlined steps. What happens when I re-import my data? You may notice changes to your subscription metrics due to differences in importing and processing of Chargify data, as well as due to new Chargify features supported by SaaSync integration. Therefore, we recommend exporting your subscriptions before migrating your Chargify data source to have a point-in-time comparison, should you need it. Tell me more about SaaSync SaaSync is our close integration partner, and they have already built several integrations for ChartMogul. After creating an account with SaaSync and connecting your Chargify and ChartMogul accounts through SaaSync, SaaSync will retrieve billing data from Chargify, and transform the data for use with ChartMogul’s subscription data model. From there, SaaSync will keep the data in ChartMogul up to date and you’ll be able to track your Chargify subscription metrics in ChartMogul in real time.

[INST] Introducing the New Chargify Integration by SaaSync [/INST]

ChartMogul’s integration with Chargify is now managed by our integration partner, SaaSync. With this integration, you will have access to ChartMogul’s Data Platform, which provides a transparent view of what has been imported into ChartMogul and how Chargify data maps to ChartMogul customers, invoices, plans, and transactions. In addition to Data Platform access, the new Chargify integration supports many additional Chargify features: Relationship Invoicing, Chargify’s newly redesigned invoicing capabilities. Recurring components, Chargify’s highly configurable recurring billing logic. Cancellations from 100% refunds or voided transactions Percentage discounts Multiple price points on a product Splitting tax out on taxable items Sounds great, how do I get started? For new ChartMogul accounts (created after September 1, 2021), you can start using the new Chargify integration right away, by creating an account at SaaSync and connecting Chargify with Core&Outline through SaaSync. For ChartMogul accounts with existing Chargify Data Sources (Chargify Data Source created before September 1, 2021), we plan to migrate all ChartMogul customers using the existing Chargify integration to this SaaSync developed integration and sunset our own integration in the following weeks. What if I’m already using Chargify? ChartMogul’s success team will reach out to account owners to assist with migrating to the new Chargify integration developed by SaaSync. In order to migrate existing Chargify Data Sources to new Chargify integration, go to our help center and follow the outlined steps. What happens when I re-import my data? You may notice changes to your subscription metrics due to differences in importing and processing of Chargify data, as well as due to new Chargify features supported by SaaSync integration. Therefore, we recommend exporting your subscriptions before migrating your Chargify data source to have a point-in-time comparison, should you need it. Tell me more about SaaSync SaaSync is our close integration partner, and they have already built several integrations for ChartMogul. After creating an account with SaaSync and connecting your Chargify and ChartMogul accounts through SaaSync, SaaSync will retrieve billing data from Chargify, and transform the data for use with ChartMogul’s subscription data model. From there, SaaSync will keep the data in ChartMogul up to date and you’ll be able to track your Chargify subscription metrics in ChartMogul in real time.

<sys> [INST] Introducing the New Chargify Integration by SaaSync [/INST] ChartMogul’s integration with Chargify is now managed by our integration partner, SaaSync. With this integration, you will have access to ChartMogul’s Data Platform, which provides a transparent view of what has been imported into ChartMogul and how Chargify data maps to ChartMogul customers, invoices, plans, and transactions. In addition to Data Platform access, the new Chargify integration supports many additional Chargify features: Relationship Invoicing, Chargify’s newly redesigned invoicing capabilities. Recurring components, Chargify’s highly configurable recurring billing logic. Cancellations from 100% refunds or voided transactions Percentage discounts Multiple price points on a product Splitting tax out on taxable items Sounds great, how do I get started? For new ChartMogul accounts (created after September 1, 2021), you can start using the new Chargify integration right away, by creating an account at SaaSync and connecting Chargify with Core&Outline through SaaSync. For ChartMogul accounts with existing Chargify Data Sources (Chargify Data Source created before September 1, 2021), we plan to migrate all ChartMogul customers using the existing Chargify integration to this SaaSync developed integration and sunset our own integration in the following weeks. What if I’m already using Chargify? ChartMogul’s success team will reach out to account owners to assist with migrating to the new Chargify integration developed by SaaSync. In order to migrate existing Chargify Data Sources to new Chargify integration, go to our help center and follow the outlined steps. What happens when I re-import my data? You may notice changes to your subscription metrics due to differences in importing and processing of Chargify data, as well as due to new Chargify features supported by SaaSync integration. Therefore, we recommend exporting your subscriptions before migrating your Chargify data source to have a point-in-time comparison, should you need it. Tell me more about SaaSync SaaSync is our close integration partner, and they have already built several integrations for ChartMogul. After creating an account with SaaSync and connecting your Chargify and ChartMogul accounts through SaaSync, SaaSync will retrieve billing data from Chargify, and transform the data for use with ChartMogul’s subscription data model. From there, SaaSync will keep the data in ChartMogul up to date and you’ll be able to track your Chargify subscription metrics in ChartMogul in real time. </sys

A Guide To SaaS Customer Retention Metrics & Benchmarks in 2023. Companies with best-in-class retention grew at least 1.8x faster than their peers in 2022. In an uncertain market, customer retention is key. So if you are keeping a close eye on your retention metrics this year, you’re not alone. Retention is one of the most important metrics when building a successful SaaS business. A low churn rate means more loyal customers that contribute to sustainable business growth. After all, acquiring a new customer can cost much more than retaining an existing customer. This is your guide to customer retention in 2023. In this post, we will explain customer retention, how to calculate it, why it matters, and what a good customer retention rate looks like in 2023 based on a study of over 2,100 businesses. Then, we’ll share some practical advice for tracking retention metrics and suggest 4 strategies SaaS businesses can use to improve customer retention. Navigate to the chapter that is most relevant to you: What is customer retention and how to calculate it? What is a good customer retention rate? Tips for tracking customer retention Four strategies to improve customer retention SaaS retention FAQ Is revenue retention more relevant to your business at the moment? Whether net revenue retention, gross revenue retention, or customer retention is your north star metric, we’ve got you covered. For more on net and gross revenue retention, check out this guide, or keep reading for all things customer retention. What is customer retention? Retention measures how well you can retain and expand revenue from your existing customer base. For any SaaS business, you can measure it in three ways: customer retention (aka logo retention), net revenue retention (NRR), and gross revenue retention (GRR). The acronyms NDR and GDR are also popular in SaaS (net dollar retention and gross dollar retention). Customer retention measures the percentage of customers retained over a period of time. The formula to measure customer retention To calculate customer retention, divide the number of paying customers (from paying customers one year ago) by the number of paying customers one year ago. Sounds convoluted? Let’s look at an example. One year ago, you had 400 paying customers. What percentage of those customers do you still have now? Let’s say that of that original group, you retained 300 customers (while 100 customers churned in the last year). So, your customer retention is calculated by dividing 300 by 400. Your customer retention is 75%. Whether you have annual or monthly subscriptions (or a mix of both), it is common to measure retention over 12 months. Why? It allows for the full customer lifecycle, and it reduces the risk of any impact from seasonality, which can cause short-term fluctuations. Why is customer retention important? There are many reasons why customer retention is important. Here are our top 3. Companies with retention rates over 85%grow 1.5-3x faster As we found in the study of over 2,100 businesses, SaaS busiensses with retention rates over 85% grow much faster. 1.5-3x faster, in fact, which is a staggering number. You can’t achieve sustainable growth relaying solely on new business. Retaining your customers is equally important. High retention is a strong indication of product-market fit. Customer loyalty proves that you are solving a real problem and are providing value to your customers. Are you ready to implement strategies to scale rapidly? You first need to prove that you can acquire customers AND retain them. Repeat customers are more likely to recommend your product In time, you can turn your customers into true advocates for your solution. A positive experience with your product increases your chances of customers using your brand as part of their marketing strategy (for free). What is a good customer retention rate? We studied over 2,100 businesses to be able to answer this question confidently. Let’s look at customer retention from the perspective of your ARR. Naturally, customer retention is low at the beginning of your journey of building a SaaS business, on average 55%, while the best companies reach 72%. Retention improves after you find product-market fit; it can go up to 78% when your business reaches $1m and later $3m in ARR. Companies in the $3-8m ARR bracket can aspire to a customer retention rate of 80%. And as businesses reach scale ($15-30m ARR), the top quartile customer retention rate further improves to 84%. Best-in-class SaaS businesses have an 87% customer retention Best-in-class customer retention rate at any stage of business stands at ~85-87%. Interesting fact: only 11-19% of SaaS businesses have customer retention over 85%. If you’re like most companies out there still working on improving retention, read our tips for tracking retention and strategies to increase customer retention. One dimension of looking at customer retention is ARR. However, comparing your business to others with a similar APRA range is equally valuable. Download the SaaS Retention Report, a study of over 2,100 businesses, to get all the data. Tips for tracking customer retention Run cohort analysis on top of your customer retention metrics Using cohort analysis helps you identify trends in a particular group of customers. A cohort analysis is commonly used to uncover trends in your customer churn, revenue churn, as well as the inverse, your customer retention and revenue retention. Reminder: in SaaS, a cohort is a group of customers that start their first subscription in the same month and year. In the example below, you can see the percentage of customers retained since April 2022. You can clearly see that this business is not great at retaining its customers in month 3. What happened? Dig into the data to learn more and prevent churn. Segment your retention data by plan, region, or acquisition channel There are so many ways to slice and dice your data and gain insight into your business. For example, you can determine the health of your new customers in their first few months of paying for a subscription and identify when the new customers are dropping off. Or, your customer success team might segment this data to determine if customers with discounted plans are more prone to churn. A marketing executive, on the other hand, might look into how retention data compare against different acquisition channels – which channels are bringing in customers that stick around? 4 customer retention strategies Customer retention strategies are methods that SaaS businesses employ to maintain and strengthen relationships with existing customers, encouraging them to remain loyal and continue their engagement with the brand. Here are our 4 customer retention strategies that you can start applying today: Start with a frictionless onboarding experience How you interact with your brand-new customers determines how they experience your product and company long-term. Make sure you leave a good impression from the start. If you want to increase customer retention and start building customer loyalty, you should start with your onboarding experience. Examples Product tours, product training sessions, and live webinars are great opportunities to get new customers started fully equipped to make the best out of using your product. Make sure that your sales, marketing, and customer success team are aligned and working together to achieve a great experience for your customers. Track customer satisfaction Customer satisfaction measures how well your product meets the needs and expectations of users. In SaaS, it is crucial to maintain a steady stream of revenue, and you can only do that with a satisfied customer base. Improving customer satisfaction means improving the customer experience. Examples To track customer satisfaction, you can use several techniques, including surveys, customer feedback, and customer support interactions. Surveys can provide valuable insight into how satisfied customers are with a product or service, while customer feedback allows you to understand their customers’ needs and expectations better. You can collect feedback through surveys like Net Promoter Score, focus groups, social media, and customer support interactions. Implement a customer feedback loop So you already know how satisfied your customers are? You gathered some great feedback. Make sure to implement a feedback loop. A feedback loop is a process that involves gathering customer feedback, analyzing it, and taking action to improve the customer experience. Don’t miss out on the “taking action” part! Pro tip: Share your results with the relevant teams or even the whole company. Retain the right customers Retain customers that are within your ICPs. There is huge value in acquiring and retaining the right customers. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. Read the whole story of our pricing migration told by Ingmar, our VP of Customer Success. Examples Mapping your ICP can be useful across teams. It will help your marketing team with marketing to the right type of audience. Your sales team will focus on high-value prospects. And your customer success team can support existing customers much better. After all, customer retention starts with acquiring the right type of new customers. Retention FAQ What is good customer retention? Customer retention is low at the beginning of your journey of building a SaaS business. it can go up to 78% when your business reaches $1m. Best-in-class customer retention rate at any stage of business stands at ~85-87%. What is logo churn? In short, logo churn measures the rate at which customers are leaving your SaaS business. It measures the number of customers lost over a period of time. Depending on the revenue concentration, customer churn can be different from revenue churn. Hence, it’s good to look at both numbers. What is the difference between retention and renewal? Renewal speaks to the is the number of existing customers who actively opt to renew their contract with you. Customer retention pertains to customers who have made the deliberate decision to maintain their subscription without canceling it, even when they had the opportunity to do so. Can logo retention be over 100%? Customer retention can never be over 100% (neither can gross dollar retention). Only net revenue retention can be higher than 100%. What is logo vs net retention? Logo retention (aka customer retention) measures the percentage of customers retained over a period of time. Quite often, measuring retention by revenue yields more meaningful results. Gross revenue retention (GRR) and net revenue retention (NRR) are the key metrics to understand how well your SaaS business executes on the promise made to customers. What is a good customer churn rate? Ideally, your customer churn rate is as low as possible. Even a seemingly low monthly churn rate of, e.g., 5% corresponds to an annual loss of nearly half (46%) of existing customers. In our analysis of data from SaaS businesses, the lower your business’s average revenue per account (ARPA), the higher your churn rate. For a SaaS business with less than $10 ARPA it can be relatively high at 6–7% per month. For businesses with $500 ARPA or more, it tends to be lower at 1–2% per month. Check out our customer retention strategies to learn more.

[INST] A Guide To SaaS Customer Retention Metrics & Benchmarks in 2023 [/INST]

Companies with best-in-class retention grew at least 1.8x faster than their peers in 2022. In an uncertain market, customer retention is key. So if you are keeping a close eye on your retention metrics this year, you’re not alone. Retention is one of the most important metrics when building a successful SaaS business. A low churn rate means more loyal customers that contribute to sustainable business growth. After all, acquiring a new customer can cost much more than retaining an existing customer. This is your guide to customer retention in 2023. In this post, we will explain customer retention, how to calculate it, why it matters, and what a good customer retention rate looks like in 2023 based on a study of over 2,100 businesses. Then, we’ll share some practical advice for tracking retention metrics and suggest 4 strategies SaaS businesses can use to improve customer retention. Navigate to the chapter that is most relevant to you: What is customer retention and how to calculate it? What is a good customer retention rate? Tips for tracking customer retention Four strategies to improve customer retention SaaS retention FAQ Is revenue retention more relevant to your business at the moment? Whether net revenue retention, gross revenue retention, or customer retention is your north star metric, we’ve got you covered. For more on net and gross revenue retention, check out this guide, or keep reading for all things customer retention. What is customer retention? Retention measures how well you can retain and expand revenue from your existing customer base. For any SaaS business, you can measure it in three ways: customer retention (aka logo retention), net revenue retention (NRR), and gross revenue retention (GRR). The acronyms NDR and GDR are also popular in SaaS (net dollar retention and gross dollar retention). Customer retention measures the percentage of customers retained over a period of time. The formula to measure customer retention To calculate customer retention, divide the number of paying customers (from paying customers one year ago) by the number of paying customers one year ago. Sounds convoluted? Let’s look at an example. One year ago, you had 400 paying customers. What percentage of those customers do you still have now? Let’s say that of that original group, you retained 300 customers (while 100 customers churned in the last year). So, your customer retention is calculated by dividing 300 by 400. Your customer retention is 75%. Whether you have annual or monthly subscriptions (or a mix of both), it is common to measure retention over 12 months. Why? It allows for the full customer lifecycle, and it reduces the risk of any impact from seasonality, which can cause short-term fluctuations. Why is customer retention important? There are many reasons why customer retention is important. Here are our top 3. Companies with retention rates over 85%grow 1.5-3x faster As we found in the study of over 2,100 businesses, SaaS busiensses with retention rates over 85% grow much faster. 1.5-3x faster, in fact, which is a staggering number. You can’t achieve sustainable growth relaying solely on new business. Retaining your customers is equally important. High retention is a strong indication of product-market fit. Customer loyalty proves that you are solving a real problem and are providing value to your customers. Are you ready to implement strategies to scale rapidly? You first need to prove that you can acquire customers AND retain them. Repeat customers are more likely to recommend your product In time, you can turn your customers into true advocates for your solution. A positive experience with your product increases your chances of customers using your brand as part of their marketing strategy (for free). What is a good customer retention rate? We studied over 2,100 businesses to be able to answer this question confidently. Let’s look at customer retention from the perspective of your ARR. Naturally, customer retention is low at the beginning of your journey of building a SaaS business, on average 55%, while the best companies reach 72%. Retention improves after you find product-market fit; it can go up to 78% when your business reaches $1m and later $3m in ARR. Companies in the $3-8m ARR bracket can aspire to a customer retention rate of 80%. And as businesses reach scale ($15-30m ARR), the top quartile customer retention rate further improves to 84%. Best-in-class SaaS businesses have an 87% customer retention Best-in-class customer retention rate at any stage of business stands at ~85-87%. Interesting fact: only 11-19% of SaaS businesses have customer retention over 85%. If you’re like most companies out there still working on improving retention, read our tips for tracking retention and strategies to increase customer retention. One dimension of looking at customer retention is ARR. However, comparing your business to others with a similar APRA range is equally valuable. Download the SaaS Retention Report, a study of over 2,100 businesses, to get all the data. Tips for tracking customer retention Run cohort analysis on top of your customer retention metrics Using cohort analysis helps you identify trends in a particular group of customers. A cohort analysis is commonly used to uncover trends in your customer churn, revenue churn, as well as the inverse, your customer retention and revenue retention. Reminder: in SaaS, a cohort is a group of customers that start their first subscription in the same month and year. In the example below, you can see the percentage of customers retained since April 2022. You can clearly see that this business is not great at retaining its customers in month 3. What happened? Dig into the data to learn more and prevent churn. Segment your retention data by plan, region, or acquisition channel There are so many ways to slice and dice your data and gain insight into your business. For example, you can determine the health of your new customers in their first few months of paying for a subscription and identify when the new customers are dropping off. Or, your customer success team might segment this data to determine if customers with discounted plans are more prone to churn. A marketing executive, on the other hand, might look into how retention data compare against different acquisition channels – which channels are bringing in customers that stick around? 4 customer retention strategies Customer retention strategies are methods that SaaS businesses employ to maintain and strengthen relationships with existing customers, encouraging them to remain loyal and continue their engagement with the brand. Here are our 4 customer retention strategies that you can start applying today: Start with a frictionless onboarding experience How you interact with your brand-new customers determines how they experience your product and company long-term. Make sure you leave a good impression from the start. If you want to increase customer retention and start building customer loyalty, you should start with your onboarding experience. Examples Product tours, product training sessions, and live webinars are great opportunities to get new customers started fully equipped to make the best out of using your product. Make sure that your sales, marketing, and customer success team are aligned and working together to achieve a great experience for your customers. Track customer satisfaction Customer satisfaction measures how well your product meets the needs and expectations of users. In SaaS, it is crucial to maintain a steady stream of revenue, and you can only do that with a satisfied customer base. Improving customer satisfaction means improving the customer experience. Examples To track customer satisfaction, you can use several techniques, including surveys, customer feedback, and customer support interactions. Surveys can provide valuable insight into how satisfied customers are with a product or service, while customer feedback allows you to understand their customers’ needs and expectations better. You can collect feedback through surveys like Net Promoter Score, focus groups, social media, and customer support interactions. Implement a customer feedback loop So you already know how satisfied your customers are? You gathered some great feedback. Make sure to implement a feedback loop. A feedback loop is a process that involves gathering customer feedback, analyzing it, and taking action to improve the customer experience. Don’t miss out on the “taking action” part! Pro tip: Share your results with the relevant teams or even the whole company. Retain the right customers Retain customers that are within your ICPs. There is huge value in acquiring and retaining the right customers. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. Read the whole story of our pricing migration told by Ingmar, our VP of Customer Success. Examples Mapping your ICP can be useful across teams. It will help your marketing team with marketing to the right type of audience. Your sales team will focus on high-value prospects. And your customer success team can support existing customers much better. After all, customer retention starts with acquiring the right type of new customers. Retention FAQ What is good customer retention? Customer retention is low at the beginning of your journey of building a SaaS business. it can go up to 78% when your business reaches $1m. Best-in-class customer retention rate at any stage of business stands at ~85-87%. What is logo churn? In short, logo churn measures the rate at which customers are leaving your SaaS business. It measures the number of customers lost over a period of time. Depending on the revenue concentration, customer churn can be different from revenue churn. Hence, it’s good to look at both numbers. What is the difference between retention and renewal? Renewal speaks to the is the number of existing customers who actively opt to renew their contract with you. Customer retention pertains to customers who have made the deliberate decision to maintain their subscription without canceling it, even when they had the opportunity to do so. Can logo retention be over 100%? Customer retention can never be over 100% (neither can gross dollar retention). Only net revenue retention can be higher than 100%. What is logo vs net retention? Logo retention (aka customer retention) measures the percentage of customers retained over a period of time. Quite often, measuring retention by revenue yields more meaningful results. Gross revenue retention (GRR) and net revenue retention (NRR) are the key metrics to understand how well your SaaS business executes on the promise made to customers. What is a good customer churn rate? Ideally, your customer churn rate is as low as possible. Even a seemingly low monthly churn rate of, e.g., 5% corresponds to an annual loss of nearly half (46%) of existing customers. In our analysis of data from SaaS businesses, the lower your business’s average revenue per account (ARPA), the higher your churn rate. For a SaaS business with less than $10 ARPA it can be relatively high at 6–7% per month. For businesses with $500 ARPA or more, it tends to be lower at 1–2% per month. Check out our customer retention strategies to learn more.

<sys> [INST] A Guide To SaaS Customer Retention Metrics & Benchmarks in 2023 [/INST] Companies with best-in-class retention grew at least 1.8x faster than their peers in 2022. In an uncertain market, customer retention is key. So if you are keeping a close eye on your retention metrics this year, you’re not alone. Retention is one of the most important metrics when building a successful SaaS business. A low churn rate means more loyal customers that contribute to sustainable business growth. After all, acquiring a new customer can cost much more than retaining an existing customer. This is your guide to customer retention in 2023. In this post, we will explain customer retention, how to calculate it, why it matters, and what a good customer retention rate looks like in 2023 based on a study of over 2,100 businesses. Then, we’ll share some practical advice for tracking retention metrics and suggest 4 strategies SaaS businesses can use to improve customer retention. Navigate to the chapter that is most relevant to you: What is customer retention and how to calculate it? What is a good customer retention rate? Tips for tracking customer retention Four strategies to improve customer retention SaaS retention FAQ Is revenue retention more relevant to your business at the moment? Whether net revenue retention, gross revenue retention, or customer retention is your north star metric, we’ve got you covered. For more on net and gross revenue retention, check out this guide, or keep reading for all things customer retention. What is customer retention? Retention measures how well you can retain and expand revenue from your existing customer base. For any SaaS business, you can measure it in three ways: customer retention (aka logo retention), net revenue retention (NRR), and gross revenue retention (GRR). The acronyms NDR and GDR are also popular in SaaS (net dollar retention and gross dollar retention). Customer retention measures the percentage of customers retained over a period of time. The formula to measure customer retention To calculate customer retention, divide the number of paying customers (from paying customers one year ago) by the number of paying customers one year ago. Sounds convoluted? Let’s look at an example. One year ago, you had 400 paying customers. What percentage of those customers do you still have now? Let’s say that of that original group, you retained 300 customers (while 100 customers churned in the last year). So, your customer retention is calculated by dividing 300 by 400. Your customer retention is 75%. Whether you have annual or monthly subscriptions (or a mix of both), it is common to measure retention over 12 months. Why? It allows for the full customer lifecycle, and it reduces the risk of any impact from seasonality, which can cause short-term fluctuations. Why is customer retention important? There are many reasons why customer retention is important. Here are our top 3. Companies with retention rates over 85%grow 1.5-3x faster As we found in the study of over 2,100 businesses, SaaS busiensses with retention rates over 85% grow much faster. 1.5-3x faster, in fact, which is a staggering number. You can’t achieve sustainable growth relaying solely on new business. Retaining your customers is equally important. High retention is a strong indication of product-market fit. Customer loyalty proves that you are solving a real problem and are providing value to your customers. Are you ready to implement strategies to scale rapidly? You first need to prove that you can acquire customers AND retain them. Repeat customers are more likely to recommend your product In time, you can turn your customers into true advocates for your solution. A positive experience with your product increases your chances of customers using your brand as part of their marketing strategy (for free). What is a good customer retention rate? We studied over 2,100 businesses to be able to answer this question confidently. Let’s look at customer retention from the perspective of your ARR. Naturally, customer retention is low at the beginning of your journey of building a SaaS business, on average 55%, while the best companies reach 72%. Retention improves after you find product-market fit; it can go up to 78% when your business reaches $1m and later $3m in ARR. Companies in the $3-8m ARR bracket can aspire to a customer retention rate of 80%. And as businesses reach scale ($15-30m ARR), the top quartile customer retention rate further improves to 84%. Best-in-class SaaS businesses have an 87% customer retention Best-in-class customer retention rate at any stage of business stands at ~85-87%. Interesting fact: only 11-19% of SaaS businesses have customer retention over 85%. If you’re like most companies out there still working on improving retention, read our tips for tracking retention and strategies to increase customer retention. One dimension of looking at customer retention is ARR. However, comparing your business to others with a similar APRA range is equally valuable. Download the SaaS Retention Report, a study of over 2,100 businesses, to get all the data. Tips for tracking customer retention Run cohort analysis on top of your customer retention metrics Using cohort analysis helps you identify trends in a particular group of customers. A cohort analysis is commonly used to uncover trends in your customer churn, revenue churn, as well as the inverse, your customer retention and revenue retention. Reminder: in SaaS, a cohort is a group of customers that start their first subscription in the same month and year. In the example below, you can see the percentage of customers retained since April 2022. You can clearly see that this business is not great at retaining its customers in month 3. What happened? Dig into the data to learn more and prevent churn. Segment your retention data by plan, region, or acquisition channel There are so many ways to slice and dice your data and gain insight into your business. For example, you can determine the health of your new customers in their first few months of paying for a subscription and identify when the new customers are dropping off. Or, your customer success team might segment this data to determine if customers with discounted plans are more prone to churn. A marketing executive, on the other hand, might look into how retention data compare against different acquisition channels – which channels are bringing in customers that stick around? 4 customer retention strategies Customer retention strategies are methods that SaaS businesses employ to maintain and strengthen relationships with existing customers, encouraging them to remain loyal and continue their engagement with the brand. Here are our 4 customer retention strategies that you can start applying today: Start with a frictionless onboarding experience How you interact with your brand-new customers determines how they experience your product and company long-term. Make sure you leave a good impression from the start. If you want to increase customer retention and start building customer loyalty, you should start with your onboarding experience. Examples Product tours, product training sessions, and live webinars are great opportunities to get new customers started fully equipped to make the best out of using your product. Make sure that your sales, marketing, and customer success team are aligned and working together to achieve a great experience for your customers. Track customer satisfaction Customer satisfaction measures how well your product meets the needs and expectations of users. In SaaS, it is crucial to maintain a steady stream of revenue, and you can only do that with a satisfied customer base. Improving customer satisfaction means improving the customer experience. Examples To track customer satisfaction, you can use several techniques, including surveys, customer feedback, and customer support interactions. Surveys can provide valuable insight into how satisfied customers are with a product or service, while customer feedback allows you to understand their customers’ needs and expectations better. You can collect feedback through surveys like Net Promoter Score, focus groups, social media, and customer support interactions. Implement a customer feedback loop So you already know how satisfied your customers are? You gathered some great feedback. Make sure to implement a feedback loop. A feedback loop is a process that involves gathering customer feedback, analyzing it, and taking action to improve the customer experience. Don’t miss out on the “taking action” part! Pro tip: Share your results with the relevant teams or even the whole company. Retain the right customers Retain customers that are within your ICPs. There is huge value in acquiring and retaining the right customers. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. Read the whole story of our pricing migration told by Ingmar, our VP of Customer Success. Examples Mapping your ICP can be useful across teams. It will help your marketing team with marketing to the right type of audience. Your sales team will focus on high-value prospects. And your customer success team can support existing customers much better. After all, customer retention starts with acquiring the right type of new customers. Retention FAQ What is good customer retention? Customer retention is low at the beginning of your journey of building a SaaS business. it can go up to 78% when your business reaches $1m. Best-in-class customer retention rate at any stage of business stands at ~85-87%. What is logo churn? In short, logo churn measures the rate at which customers are leaving your SaaS business. It measures the number of customers lost over a period of time. Depending on the revenue concentration, customer churn can be different from revenue churn. Hence, it’s good to look at both numbers. What is the difference between retention and renewal? Renewal speaks to the is the number of existing customers who actively opt to renew their contract with you. Customer retention pertains to customers who have made the deliberate decision to maintain their subscription without canceling it, even when they had the opportunity to do so. Can logo retention be over 100%? Customer retention can never be over 100% (neither can gross dollar retention). Only net revenue retention can be higher than 100%. What is logo vs net retention? Logo retention (aka customer retention) measures the percentage of customers retained over a period of time. Quite often, measuring retention by revenue yields more meaningful results. Gross revenue retention (GRR) and net revenue retention (NRR) are the key metrics to understand how well your SaaS business executes on the promise made to customers. What is a good customer churn rate? Ideally, your customer churn rate is as low as possible. Even a seemingly low monthly churn rate of, e.g., 5% corresponds to an annual loss of nearly half (46%) of existing customers. In our analysis of data from SaaS businesses, the lower your business’s average revenue per account (ARPA), the higher your churn rate. For a SaaS business with less than $10 ARPA it can be relatively high at 6–7% per month. For businesses with $500 ARPA or more, it tends to be lower at 1–2% per month. Check out our customer retention strategies to learn more. </sys

Building a Company That People Root For with Andrew Gazdecki. Today we are pleased to announce a new season of the SaaS Open Mic Podcast hosted by me, Olivia Jarvis — 🎉 woohoo!! I hope you are as excited as we are for fresh discussions featuring new voices, opinions, and experiences in SaaS. We were motivated to relaunch this podcast because each week, we speak with dozens of SaaS founders and operators. And in many ways, that’s really lucky. It gives us unique insight into the innerworkings of top-tier SaaS businesses globally. So why not share that with you? It’s our hope that this season’s collection of learnings fuels a productive day and leaves you feeling inspired. This week, we kick things off with Andrew Gazdecki, former CEO of Bizness Apps & Altcoin (both acquired). His most recent venture is MicroAcquire, a marketplace designed to help startups get acquired. Andrew shares his goal to make a thousand millionaires by helping entrepreneurs exit. There’s been a big shift in who acquires companies. There’s been a massive rise in private equity. There’s been a massive increase in the amount of buyers of individuals — potentially like yourself — maybe you’re a VP of Sales or VP of Marketing at a company and you’d like to own a startup but don’t have an idea and that’s where you feel you could add the most value. Andrew Gazdecki If that sounds like you, visit MicroAcquire to (window) shop the listings: In our interview we discuss: how and why Andrew started MicroAcquire changes to the SaaS acquisition landscape what to consider with the acquisition process advice for attracting buyers and getting acquired the importance of storytelling and brand using SaaS metrics …and much more! Listen to the full interview below and don’t forget to subscribe on Soundcloud or iTunes.

[INST] Building a Company That People Root For with Andrew Gazdecki [/INST]

Today we are pleased to announce a new season of the SaaS Open Mic Podcast hosted by me, Olivia Jarvis — 🎉 woohoo!! I hope you are as excited as we are for fresh discussions featuring new voices, opinions, and experiences in SaaS. We were motivated to relaunch this podcast because each week, we speak with dozens of SaaS founders and operators. And in many ways, that’s really lucky. It gives us unique insight into the innerworkings of top-tier SaaS businesses globally. So why not share that with you? It’s our hope that this season’s collection of learnings fuels a productive day and leaves you feeling inspired. This week, we kick things off with Andrew Gazdecki, former CEO of Bizness Apps & Altcoin (both acquired). His most recent venture is MicroAcquire, a marketplace designed to help startups get acquired. Andrew shares his goal to make a thousand millionaires by helping entrepreneurs exit. There’s been a big shift in who acquires companies. There’s been a massive rise in private equity. There’s been a massive increase in the amount of buyers of individuals — potentially like yourself — maybe you’re a VP of Sales or VP of Marketing at a company and you’d like to own a startup but don’t have an idea and that’s where you feel you could add the most value. Andrew Gazdecki If that sounds like you, visit MicroAcquire to (window) shop the listings: In our interview we discuss: how and why Andrew started MicroAcquire changes to the SaaS acquisition landscape what to consider with the acquisition process advice for attracting buyers and getting acquired the importance of storytelling and brand using SaaS metrics …and much more! Listen to the full interview below and don’t forget to subscribe on Soundcloud or iTunes.

<sys> [INST] Building a Company That People Root For with Andrew Gazdecki [/INST] Today we are pleased to announce a new season of the SaaS Open Mic Podcast hosted by me, Olivia Jarvis — 🎉 woohoo!! I hope you are as excited as we are for fresh discussions featuring new voices, opinions, and experiences in SaaS. We were motivated to relaunch this podcast because each week, we speak with dozens of SaaS founders and operators. And in many ways, that’s really lucky. It gives us unique insight into the innerworkings of top-tier SaaS businesses globally. So why not share that with you? It’s our hope that this season’s collection of learnings fuels a productive day and leaves you feeling inspired. This week, we kick things off with Andrew Gazdecki, former CEO of Bizness Apps & Altcoin (both acquired). His most recent venture is MicroAcquire, a marketplace designed to help startups get acquired. Andrew shares his goal to make a thousand millionaires by helping entrepreneurs exit. There’s been a big shift in who acquires companies. There’s been a massive rise in private equity. There’s been a massive increase in the amount of buyers of individuals — potentially like yourself — maybe you’re a VP of Sales or VP of Marketing at a company and you’d like to own a startup but don’t have an idea and that’s where you feel you could add the most value. Andrew Gazdecki If that sounds like you, visit MicroAcquire to (window) shop the listings: In our interview we discuss: how and why Andrew started MicroAcquire changes to the SaaS acquisition landscape what to consider with the acquisition process advice for attracting buyers and getting acquired the importance of storytelling and brand using SaaS metrics …and much more! Listen to the full interview below and don’t forget to subscribe on Soundcloud or iTunes. </sys

David Skok on choosing the right metrics for the right growth stage. “I found some of my readers were obsessing over getting perfectly accurate CAC-LTV figures before they had a repeatable sales processes, so the data they had was completely meaningless…” In the world of SaaS, this guest needs no introduction. But it would be strange to not give one, so here goes… David Skok (@bostonVC) is a former entrepreneur turned VC, who founded four companies before he turned his focus to investing. He’s now General Partner at Matrix Partners. “When you feel like you’ve got this repeatability and the playbook is working consistently, that’s really one of the key elements.” David was thinking about SaaS metrics before I was even starting out on my career. His industry-defining post, SaaS Metrics 2.0 is the go-to reference for entrepreneurs and VCs alike, and serves as a guiding light for anyone who has a need to understand the principles and measurements behind a SaaS business. This conversation was recorded at this year’s SaaStock conference in Dublin, where I sat down with David in the SaaStock podcasting studio. We discussed a lot, including: The stages that startups go through (and which metrics matter at each stage) Mistakes that businesses make at each stage, and how it’s possible to fail by doing things too soon How to identify which phase of growth you’re at based on your data How founders need to scale the sales process and craft a repeatable model What good productivity levels in sales really looks like When to focus on pricing and getting to negative churn How David invented the concept of negative churn with Hubspot In addition to this, David broke the news that he’ll be working on a SaaS Metrics 3.0 blog post in the near future! I hope you enjoy this conversation as much as I did. Listen to the full discussion below.

[INST] David Skok on choosing the right metrics for the right growth stage [/INST]

“I found some of my readers were obsessing over getting perfectly accurate CAC-LTV figures before they had a repeatable sales processes, so the data they had was completely meaningless…” In the world of SaaS, this guest needs no introduction. But it would be strange to not give one, so here goes… David Skok (@bostonVC) is a former entrepreneur turned VC, who founded four companies before he turned his focus to investing. He’s now General Partner at Matrix Partners. “When you feel like you’ve got this repeatability and the playbook is working consistently, that’s really one of the key elements.” David was thinking about SaaS metrics before I was even starting out on my career. His industry-defining post, SaaS Metrics 2.0 is the go-to reference for entrepreneurs and VCs alike, and serves as a guiding light for anyone who has a need to understand the principles and measurements behind a SaaS business. This conversation was recorded at this year’s SaaStock conference in Dublin, where I sat down with David in the SaaStock podcasting studio. We discussed a lot, including: The stages that startups go through (and which metrics matter at each stage) Mistakes that businesses make at each stage, and how it’s possible to fail by doing things too soon How to identify which phase of growth you’re at based on your data How founders need to scale the sales process and craft a repeatable model What good productivity levels in sales really looks like When to focus on pricing and getting to negative churn How David invented the concept of negative churn with Hubspot In addition to this, David broke the news that he’ll be working on a SaaS Metrics 3.0 blog post in the near future! I hope you enjoy this conversation as much as I did. Listen to the full discussion below.

<sys> [INST] David Skok on choosing the right metrics for the right growth stage [/INST] “I found some of my readers were obsessing over getting perfectly accurate CAC-LTV figures before they had a repeatable sales processes, so the data they had was completely meaningless…” In the world of SaaS, this guest needs no introduction. But it would be strange to not give one, so here goes… David Skok (@bostonVC) is a former entrepreneur turned VC, who founded four companies before he turned his focus to investing. He’s now General Partner at Matrix Partners. “When you feel like you’ve got this repeatability and the playbook is working consistently, that’s really one of the key elements.” David was thinking about SaaS metrics before I was even starting out on my career. His industry-defining post, SaaS Metrics 2.0 is the go-to reference for entrepreneurs and VCs alike, and serves as a guiding light for anyone who has a need to understand the principles and measurements behind a SaaS business. This conversation was recorded at this year’s SaaStock conference in Dublin, where I sat down with David in the SaaStock podcasting studio. We discussed a lot, including: The stages that startups go through (and which metrics matter at each stage) Mistakes that businesses make at each stage, and how it’s possible to fail by doing things too soon How to identify which phase of growth you’re at based on your data How founders need to scale the sales process and craft a repeatable model What good productivity levels in sales really looks like When to focus on pricing and getting to negative churn How David invented the concept of negative churn with Hubspot In addition to this, David broke the news that he’ll be working on a SaaS Metrics 3.0 blog post in the near future! I hope you enjoy this conversation as much as I did. Listen to the full discussion below. </sys

Culture Videos Are Not Just for Hiring (They Are a Great Sales Weapon Too!). Companies usually think about culture videos as a way of attracting new talent to their organization. They offer a sneak peek into your company’s everyday life: what your offices look like, who your employees are, and what motivates them to get up each morning and drive to work. But, as the most experienced video companies in the market will tell you, a great culture video can be so much more than just that! A culture video is an effective way of building trust and fostering empathy with your targeted audience. By presenting the human side of your brand, customers won’t think of you as just another corporation but as someone they know and can trust to do business with. In this piece, we’ll go over some of the main aspects you can focus on to make compelling culture videos that not only represent your company but promote deeper connections with potential customers. Let’s go! Most popular types of culture videos First of all, let’s start by breaking down the kind of content you can find in a culture video. You can’t fit every aspect of your company in a single video, and that’s why there’s pretty much one type for each side of your company you want to showcase! Just a heads up, though, these are not all the types of culture videos out there, but the most popular ones! One of the best aspects of this style of content is that each video is unique in its own way! (More on that later.) Company history Before there was a company, there was an idea. Company history videos go back in time to tell the story of how your brand was first created and how it got to the place it is today. In this company history video, the owners of this brewing company explain the how and the why of the brand. What’s valuable about this example is how it relates the original vision of the company with the passion they still put into their products. “About us” videos They are called that because they are usually featured in the “About Us” section of your company’s website. They serve as a summary of your brand’s mission and vision through a friendly and engaging lens. They also give you the opportunity to show off your business’ awards and other impressive accomplishments and recognitions. Compass, a real estate agency, managed to describe the company’s mission using inspirational footage from their clients and employees. Workplace culture videos These videos focus on (you’ve guessed it!) your workplace culture. This means they feature interviews with your employees about what a normal day in your office looks like, and what they think about being a part of your company. This video from Dell Technologies talks with the real employees behind the company and asks them about their workplace culture. The interviews cover topics such as schedule flexibility, home office, and community programs. Behind-the-scenes videos Let’s say you want to show your audience the process that goes behind a new product revealing, or an important event at your company. Behind-the-scenes videos are a rawer and more candid look into the human side of your brand. Take a look at this behind-the-scenes video from Microsoft about their re-branding project for the Los Angeles Nokia Theater. Recruiting videos Recruiting – or HR – videos speak strictly to potential employees and new recruits. They usually list the most important benefits of working in your company to encourage people to apply for a new job. While they are a useful recruitment tool for your HR team, today, we’re going to focus mainly on the previous types of videos and their branding potential. Communicating your brand identity A classic marketing rule states that a successful brand isn’t selling a product or a service: it’s selling a way of life. And this is true, whatever your business or industry. Culture videos show that your company isn’t defined solely by sales or profits: it’s defined by a set of important core principles: its values. These values are the fundamental behaviors that represent your company, the principles that dictate how you should do business. They also work as a moral compass that guides your employees whenever they’re faced with a challenging decision. Some examples of company values are integrity, respect, quality, and innovation. They may sound like big abstract concepts, but when put into action, they form your brand’s culture. Company culture is made up of all the tiny decisions your employees make each day as much as the leading, big-picture decisions. But how will your customers ever get to know your brand’s identity unless they actually work in your company? Culture videos are the one and only opportunity to show your company’s better self to your audience. And here comes a key aspect of culture videos: they are brief and simple. In today’s age of short attention span, video marketing trends point that the ideal length is about 90 seconds long. And culture videos are perfect in that way, as they rarely go over the 2-minute mark. A unique video for a unique company Put yourself in your customers’ shoes for a second. Imagine them in a metaphoric shopping aisle, walking through hundreds and hundreds of indistinguishable products. What would it take for them to notice yours above the rest? How can you show them your brand is different, unique? Now take a look around your workplace, and you’ll notice that you’re surrounded by a unique and diverse team of people working together! They each have their personality and set of skills, which makes it impossible to compare it to any other group out there. Company culture videos can help you showcase just that! Let’s look at an example from Google. The brand wanted to show the whole range of eccentricity and flexibility that’s part of their workplace culture. In this video we follow a very diverse group of interns on their first week, discovering the company’s campus, their sports facilities and cozy offices. You could argue that every video your company puts out there (if done right, at least) is unique in some way. But culture videos give you the stage to take the spotlight away from your products or services for a second and put your employees at the center of the story. And audiences resonate with that type of content! An effective culture video can make a difference in the way your audience perceives your brand and the things it offers. After all, wouldn’t you prefer to buy something from someone you know and trust rather than a stranger? A story your audience can relate to Every company starts with a goal. It can be an ambitious vision, like non-profit organizations that focus on bettering the lives of a community. Or maybe something smaller, like offering the best coffee in town. Either way, it’s a goal that goes beyond selling products or services: it’s about making a change. By focusing on why you started, company culture videos can communicate a relatable sense of purpose that humanizes your brand. This gives your company culture one of the most powerful tools out there: a story. People are just drawn to good stories! With social media being such a huge part of today’s marketing, audiences are far more likely to do business with a brand they feel close to. It’s why so many successful companies no longer market without an attitude. Video is the perfect medium to create a sort of unique storytelling that you need to impact the bottom line. Side note: Culture videos come out best when kept honest! You don’t need to have the most original mission in the world, what’s important is its authenticity. The most captivating culture videos are the ones who answer a simple question: why? And do so in an honest and earnest way. Showing the real people behind your brand Unlike ads, culture videos don’t need actors or an imaginative script: they use real people with real stories. The advantage of culture videos over ads is that they don’t need actors nor a script. Tweet this quote Giving your employees a voice offers an opportunity to show a more casual and relaxed side of your brand. Sure, some of them focus on what management thinks about the company and big-picture aspects. But the most engaging culture videos tend to give the mic to the unsung heroes of your brand and to show what day-to-day processes look like. This means culture videos can get funny and weird! It’s your chance to give a creative twist and show the quirkiness that goes on every day at your office. Maybe you can focus on office birthdays and parties or the hobbies and activities of your employees outside work… This is what uniqueness is all about! Why is all this important? Buyers engage with companies more with their hearts than they do with their brains. Tweet this quote In fact, the act of paying for something you can’t interact with prior to purchase is, in itself, a bit of a leap of faith. Yes, you need to provide a product or service they need to begin with. But between an unknowable generic brand and one that portraits itself through genuine, likable people, the second one will win every time. The more potential customers feel like they know the people behind the products, the more they’ll be open to buying from you. It’s that simple. By representing your people, your culture video can also show your brand with a sense of emotion and sensibility. An effective piece of content can strengthen the emotional bond between your brand and your customers or clients. Something for your Fans One last point about culture videos before you go: they are a great piece of content if you’re looking to build brand loyalty. After all, you shouldn’t only focus on attracting potential new customers! What about your die-hard fans? Evidently, some types of businesses will benefit from repeat customers more than others. But, at the end of the day, having more people engaging with your videos online, you are expanding your content’s initial reach. By sharing your company stories on social media, you’re starting a potential two-way conversation with your audience. Brand fandom wants to know every small and curious fact about the companies they love, and they will appreciate you sharing them! Company videos can expand your brand’s network by spreading the culture your employees created with your customers. This is a key step towards creating a lasting brand. Culture videos provide a window into what you stand for A brand is more than just the products they sell or the services they provide. First and foremost, your company is a unique group of people working together, side by side, towards a common goal. But your customers rarely get to know what it’s like to work at your company by just doing business with you! Culture videos provide a window to bring your potential customers, your workers, and your brand closer together. By focusing your content on the aspects we’ve talked about today, you ensure your culture videos will hit all the right notes. Becoming a fantastic tool to impact your bottom line, as much as they are at humanizing your brand and bringing qualified talent over. About the Author: Victor Blasco is an audiovisual designer, video marketing expert, and founder/CEO of the explainer video company Yum Yum Videos. Besides running the business, he’s a lifelong student of Chinese philosophy and a passionate geek for all things sci-fi.

[INST] Culture Videos Are Not Just for Hiring (They Are a Great Sales Weapon Too!) [/INST]

Companies usually think about culture videos as a way of attracting new talent to their organization. They offer a sneak peek into your company’s everyday life: what your offices look like, who your employees are, and what motivates them to get up each morning and drive to work. But, as the most experienced video companies in the market will tell you, a great culture video can be so much more than just that! A culture video is an effective way of building trust and fostering empathy with your targeted audience. By presenting the human side of your brand, customers won’t think of you as just another corporation but as someone they know and can trust to do business with. In this piece, we’ll go over some of the main aspects you can focus on to make compelling culture videos that not only represent your company but promote deeper connections with potential customers. Let’s go! Most popular types of culture videos First of all, let’s start by breaking down the kind of content you can find in a culture video. You can’t fit every aspect of your company in a single video, and that’s why there’s pretty much one type for each side of your company you want to showcase! Just a heads up, though, these are not all the types of culture videos out there, but the most popular ones! One of the best aspects of this style of content is that each video is unique in its own way! (More on that later.) Company history Before there was a company, there was an idea. Company history videos go back in time to tell the story of how your brand was first created and how it got to the place it is today. In this company history video, the owners of this brewing company explain the how and the why of the brand. What’s valuable about this example is how it relates the original vision of the company with the passion they still put into their products. “About us” videos They are called that because they are usually featured in the “About Us” section of your company’s website. They serve as a summary of your brand’s mission and vision through a friendly and engaging lens. They also give you the opportunity to show off your business’ awards and other impressive accomplishments and recognitions. Compass, a real estate agency, managed to describe the company’s mission using inspirational footage from their clients and employees. Workplace culture videos These videos focus on (you’ve guessed it!) your workplace culture. This means they feature interviews with your employees about what a normal day in your office looks like, and what they think about being a part of your company. This video from Dell Technologies talks with the real employees behind the company and asks them about their workplace culture. The interviews cover topics such as schedule flexibility, home office, and community programs. Behind-the-scenes videos Let’s say you want to show your audience the process that goes behind a new product revealing, or an important event at your company. Behind-the-scenes videos are a rawer and more candid look into the human side of your brand. Take a look at this behind-the-scenes video from Microsoft about their re-branding project for the Los Angeles Nokia Theater. Recruiting videos Recruiting – or HR – videos speak strictly to potential employees and new recruits. They usually list the most important benefits of working in your company to encourage people to apply for a new job. While they are a useful recruitment tool for your HR team, today, we’re going to focus mainly on the previous types of videos and their branding potential. Communicating your brand identity A classic marketing rule states that a successful brand isn’t selling a product or a service: it’s selling a way of life. And this is true, whatever your business or industry. Culture videos show that your company isn’t defined solely by sales or profits: it’s defined by a set of important core principles: its values. These values are the fundamental behaviors that represent your company, the principles that dictate how you should do business. They also work as a moral compass that guides your employees whenever they’re faced with a challenging decision. Some examples of company values are integrity, respect, quality, and innovation. They may sound like big abstract concepts, but when put into action, they form your brand’s culture. Company culture is made up of all the tiny decisions your employees make each day as much as the leading, big-picture decisions. But how will your customers ever get to know your brand’s identity unless they actually work in your company? Culture videos are the one and only opportunity to show your company’s better self to your audience. And here comes a key aspect of culture videos: they are brief and simple. In today’s age of short attention span, video marketing trends point that the ideal length is about 90 seconds long. And culture videos are perfect in that way, as they rarely go over the 2-minute mark. A unique video for a unique company Put yourself in your customers’ shoes for a second. Imagine them in a metaphoric shopping aisle, walking through hundreds and hundreds of indistinguishable products. What would it take for them to notice yours above the rest? How can you show them your brand is different, unique? Now take a look around your workplace, and you’ll notice that you’re surrounded by a unique and diverse team of people working together! They each have their personality and set of skills, which makes it impossible to compare it to any other group out there. Company culture videos can help you showcase just that! Let’s look at an example from Google. The brand wanted to show the whole range of eccentricity and flexibility that’s part of their workplace culture. In this video we follow a very diverse group of interns on their first week, discovering the company’s campus, their sports facilities and cozy offices. You could argue that every video your company puts out there (if done right, at least) is unique in some way. But culture videos give you the stage to take the spotlight away from your products or services for a second and put your employees at the center of the story. And audiences resonate with that type of content! An effective culture video can make a difference in the way your audience perceives your brand and the things it offers. After all, wouldn’t you prefer to buy something from someone you know and trust rather than a stranger? A story your audience can relate to Every company starts with a goal. It can be an ambitious vision, like non-profit organizations that focus on bettering the lives of a community. Or maybe something smaller, like offering the best coffee in town. Either way, it’s a goal that goes beyond selling products or services: it’s about making a change. By focusing on why you started, company culture videos can communicate a relatable sense of purpose that humanizes your brand. This gives your company culture one of the most powerful tools out there: a story. People are just drawn to good stories! With social media being such a huge part of today’s marketing, audiences are far more likely to do business with a brand they feel close to. It’s why so many successful companies no longer market without an attitude. Video is the perfect medium to create a sort of unique storytelling that you need to impact the bottom line. Side note: Culture videos come out best when kept honest! You don’t need to have the most original mission in the world, what’s important is its authenticity. The most captivating culture videos are the ones who answer a simple question: why? And do so in an honest and earnest way. Showing the real people behind your brand Unlike ads, culture videos don’t need actors or an imaginative script: they use real people with real stories. The advantage of culture videos over ads is that they don’t need actors nor a script. Tweet this quote Giving your employees a voice offers an opportunity to show a more casual and relaxed side of your brand. Sure, some of them focus on what management thinks about the company and big-picture aspects. But the most engaging culture videos tend to give the mic to the unsung heroes of your brand and to show what day-to-day processes look like. This means culture videos can get funny and weird! It’s your chance to give a creative twist and show the quirkiness that goes on every day at your office. Maybe you can focus on office birthdays and parties or the hobbies and activities of your employees outside work… This is what uniqueness is all about! Why is all this important? Buyers engage with companies more with their hearts than they do with their brains. Tweet this quote In fact, the act of paying for something you can’t interact with prior to purchase is, in itself, a bit of a leap of faith. Yes, you need to provide a product or service they need to begin with. But between an unknowable generic brand and one that portraits itself through genuine, likable people, the second one will win every time. The more potential customers feel like they know the people behind the products, the more they’ll be open to buying from you. It’s that simple. By representing your people, your culture video can also show your brand with a sense of emotion and sensibility. An effective piece of content can strengthen the emotional bond between your brand and your customers or clients. Something for your Fans One last point about culture videos before you go: they are a great piece of content if you’re looking to build brand loyalty. After all, you shouldn’t only focus on attracting potential new customers! What about your die-hard fans? Evidently, some types of businesses will benefit from repeat customers more than others. But, at the end of the day, having more people engaging with your videos online, you are expanding your content’s initial reach. By sharing your company stories on social media, you’re starting a potential two-way conversation with your audience. Brand fandom wants to know every small and curious fact about the companies they love, and they will appreciate you sharing them! Company videos can expand your brand’s network by spreading the culture your employees created with your customers. This is a key step towards creating a lasting brand. Culture videos provide a window into what you stand for A brand is more than just the products they sell or the services they provide. First and foremost, your company is a unique group of people working together, side by side, towards a common goal. But your customers rarely get to know what it’s like to work at your company by just doing business with you! Culture videos provide a window to bring your potential customers, your workers, and your brand closer together. By focusing your content on the aspects we’ve talked about today, you ensure your culture videos will hit all the right notes. Becoming a fantastic tool to impact your bottom line, as much as they are at humanizing your brand and bringing qualified talent over. About the Author: Victor Blasco is an audiovisual designer, video marketing expert, and founder/CEO of the explainer video company Yum Yum Videos. Besides running the business, he’s a lifelong student of Chinese philosophy and a passionate geek for all things sci-fi.

<sys> [INST] Culture Videos Are Not Just for Hiring (They Are a Great Sales Weapon Too!) [/INST] Companies usually think about culture videos as a way of attracting new talent to their organization. They offer a sneak peek into your company’s everyday life: what your offices look like, who your employees are, and what motivates them to get up each morning and drive to work. But, as the most experienced video companies in the market will tell you, a great culture video can be so much more than just that! A culture video is an effective way of building trust and fostering empathy with your targeted audience. By presenting the human side of your brand, customers won’t think of you as just another corporation but as someone they know and can trust to do business with. In this piece, we’ll go over some of the main aspects you can focus on to make compelling culture videos that not only represent your company but promote deeper connections with potential customers. Let’s go! Most popular types of culture videos First of all, let’s start by breaking down the kind of content you can find in a culture video. You can’t fit every aspect of your company in a single video, and that’s why there’s pretty much one type for each side of your company you want to showcase! Just a heads up, though, these are not all the types of culture videos out there, but the most popular ones! One of the best aspects of this style of content is that each video is unique in its own way! (More on that later.) Company history Before there was a company, there was an idea. Company history videos go back in time to tell the story of how your brand was first created and how it got to the place it is today. In this company history video, the owners of this brewing company explain the how and the why of the brand. What’s valuable about this example is how it relates the original vision of the company with the passion they still put into their products. “About us” videos They are called that because they are usually featured in the “About Us” section of your company’s website. They serve as a summary of your brand’s mission and vision through a friendly and engaging lens. They also give you the opportunity to show off your business’ awards and other impressive accomplishments and recognitions. Compass, a real estate agency, managed to describe the company’s mission using inspirational footage from their clients and employees. Workplace culture videos These videos focus on (you’ve guessed it!) your workplace culture. This means they feature interviews with your employees about what a normal day in your office looks like, and what they think about being a part of your company. This video from Dell Technologies talks with the real employees behind the company and asks them about their workplace culture. The interviews cover topics such as schedule flexibility, home office, and community programs. Behind-the-scenes videos Let’s say you want to show your audience the process that goes behind a new product revealing, or an important event at your company. Behind-the-scenes videos are a rawer and more candid look into the human side of your brand. Take a look at this behind-the-scenes video from Microsoft about their re-branding project for the Los Angeles Nokia Theater. Recruiting videos Recruiting – or HR – videos speak strictly to potential employees and new recruits. They usually list the most important benefits of working in your company to encourage people to apply for a new job. While they are a useful recruitment tool for your HR team, today, we’re going to focus mainly on the previous types of videos and their branding potential. Communicating your brand identity A classic marketing rule states that a successful brand isn’t selling a product or a service: it’s selling a way of life. And this is true, whatever your business or industry. Culture videos show that your company isn’t defined solely by sales or profits: it’s defined by a set of important core principles: its values. These values are the fundamental behaviors that represent your company, the principles that dictate how you should do business. They also work as a moral compass that guides your employees whenever they’re faced with a challenging decision. Some examples of company values are integrity, respect, quality, and innovation. They may sound like big abstract concepts, but when put into action, they form your brand’s culture. Company culture is made up of all the tiny decisions your employees make each day as much as the leading, big-picture decisions. But how will your customers ever get to know your brand’s identity unless they actually work in your company? Culture videos are the one and only opportunity to show your company’s better self to your audience. And here comes a key aspect of culture videos: they are brief and simple. In today’s age of short attention span, video marketing trends point that the ideal length is about 90 seconds long. And culture videos are perfect in that way, as they rarely go over the 2-minute mark. A unique video for a unique company Put yourself in your customers’ shoes for a second. Imagine them in a metaphoric shopping aisle, walking through hundreds and hundreds of indistinguishable products. What would it take for them to notice yours above the rest? How can you show them your brand is different, unique? Now take a look around your workplace, and you’ll notice that you’re surrounded by a unique and diverse team of people working together! They each have their personality and set of skills, which makes it impossible to compare it to any other group out there. Company culture videos can help you showcase just that! Let’s look at an example from Google. The brand wanted to show the whole range of eccentricity and flexibility that’s part of their workplace culture. In this video we follow a very diverse group of interns on their first week, discovering the company’s campus, their sports facilities and cozy offices. You could argue that every video your company puts out there (if done right, at least) is unique in some way. But culture videos give you the stage to take the spotlight away from your products or services for a second and put your employees at the center of the story. And audiences resonate with that type of content! An effective culture video can make a difference in the way your audience perceives your brand and the things it offers. After all, wouldn’t you prefer to buy something from someone you know and trust rather than a stranger? A story your audience can relate to Every company starts with a goal. It can be an ambitious vision, like non-profit organizations that focus on bettering the lives of a community. Or maybe something smaller, like offering the best coffee in town. Either way, it’s a goal that goes beyond selling products or services: it’s about making a change. By focusing on why you started, company culture videos can communicate a relatable sense of purpose that humanizes your brand. This gives your company culture one of the most powerful tools out there: a story. People are just drawn to good stories! With social media being such a huge part of today’s marketing, audiences are far more likely to do business with a brand they feel close to. It’s why so many successful companies no longer market without an attitude. Video is the perfect medium to create a sort of unique storytelling that you need to impact the bottom line. Side note: Culture videos come out best when kept honest! You don’t need to have the most original mission in the world, what’s important is its authenticity. The most captivating culture videos are the ones who answer a simple question: why? And do so in an honest and earnest way. Showing the real people behind your brand Unlike ads, culture videos don’t need actors or an imaginative script: they use real people with real stories. The advantage of culture videos over ads is that they don’t need actors nor a script. Tweet this quote Giving your employees a voice offers an opportunity to show a more casual and relaxed side of your brand. Sure, some of them focus on what management thinks about the company and big-picture aspects. But the most engaging culture videos tend to give the mic to the unsung heroes of your brand and to show what day-to-day processes look like. This means culture videos can get funny and weird! It’s your chance to give a creative twist and show the quirkiness that goes on every day at your office. Maybe you can focus on office birthdays and parties or the hobbies and activities of your employees outside work… This is what uniqueness is all about! Why is all this important? Buyers engage with companies more with their hearts than they do with their brains. Tweet this quote In fact, the act of paying for something you can’t interact with prior to purchase is, in itself, a bit of a leap of faith. Yes, you need to provide a product or service they need to begin with. But between an unknowable generic brand and one that portraits itself through genuine, likable people, the second one will win every time. The more potential customers feel like they know the people behind the products, the more they’ll be open to buying from you. It’s that simple. By representing your people, your culture video can also show your brand with a sense of emotion and sensibility. An effective piece of content can strengthen the emotional bond between your brand and your customers or clients. Something for your Fans One last point about culture videos before you go: they are a great piece of content if you’re looking to build brand loyalty. After all, you shouldn’t only focus on attracting potential new customers! What about your die-hard fans? Evidently, some types of businesses will benefit from repeat customers more than others. But, at the end of the day, having more people engaging with your videos online, you are expanding your content’s initial reach. By sharing your company stories on social media, you’re starting a potential two-way conversation with your audience. Brand fandom wants to know every small and curious fact about the companies they love, and they will appreciate you sharing them! Company videos can expand your brand’s network by spreading the culture your employees created with your customers. This is a key step towards creating a lasting brand. Culture videos provide a window into what you stand for A brand is more than just the products they sell or the services they provide. First and foremost, your company is a unique group of people working together, side by side, towards a common goal. But your customers rarely get to know what it’s like to work at your company by just doing business with you! Culture videos provide a window to bring your potential customers, your workers, and your brand closer together. By focusing your content on the aspects we’ve talked about today, you ensure your culture videos will hit all the right notes. Becoming a fantastic tool to impact your bottom line, as much as they are at humanizing your brand and bringing qualified talent over. About the Author: Victor Blasco is an audiovisual designer, video marketing expert, and founder/CEO of the explainer video company Yum Yum Videos. Besides running the business, he’s a lifelong student of Chinese philosophy and a passionate geek for all things sci-fi. </sys

SaaS Metrics Refresher #9: Segmentation. Simply put, segmentation is the difference between answering questions like “what’s our churn rate this month?” And “what’s the churn rate of customers who haven’t fully onboarded?” Both of those questions can be useful to a SaaS business, but the second one is significantly more actionable in the insights it promises. “At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies.” Brad Coffey, HubSpot What is segmentation? “Audience segmentation isn’t a new concept. A lot of major brands have it down to a science, but it can be a foreign concept to startups. When done right, there are tremendous benefits to be had.” Sujan Patel A segment is basically just a defined group of your customers. It could be as simple or as complex as you like. Here are two perfectly valid customer segments: Customers in APAC region. Customers in APAC region who haven’t completed the onboarding flow but have invited other users to their account and are active in the app more than five times per week. Why is segmentation important? “Despite the added work to produce the metrics, there is high value in understanding the different segments. This tells us which parts of the business are working well, and which are not … As soon as you start doing this segmented analysis, the benefits will become immediately apparent.” David Skok, Matrix Partners Segmenting your metrics by product usage enables you to measure the correlation between user actions in your product (e.g. feature usage, login frequency, etc) and subscription metrics such as MRR. This also lets you compare how certain features or actions impact your conversion and retention rates. Characteristics of a useful customer segment “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint In the article Using Deep Customer Segmentation in SaaS I unpacked these commonly-referenced characteristics: Measurable –You can assess its value, through some form of metric, and that you have enough data to produce that metric. Addressable – You can have a real impact on the segment of customers you’re identifying (otherwise why would you define the segment?). Stable – Segments need to have minimal fluctuation caused by external factors. Such instability will mean that you’re unable to pull any reliable insights from the segment. Consistent – You measure the segment in the same way, across its lifetime. Changing the way you measure it would effectively nullify the value of any findings. Barriers to achieving smarter segmentation If segmentation helps you get to deeper, more actionable findings in your data, why isn’t everyone doing it? The key downside here is likely to be complexity and effort, as Justin Talerico writes on SaaSX: “The problem goes back to time, resources and expertise. Authentic relevance comes from domain knowledge that takes time and deep expertise. It’s like vertical marketing (the highest level of segmentation) — if you don’t do it all the way, you’re sniffed out as a poser and doomed to fail … You’re better off staying out of verticals — and segmentation — if you can’t execute authentic, knowledgeable content for each segment.” What Justin is saying here is that in order to build a complex segment — or highly specific description of a subset of customers — you need to be able to define it. And it’s the definition that usually requires deep domain knowledge or resources. A second problem can be measurement. Being able to define a complex segment is one thing, but the entire exercise is useless if you don’t have the tools or metrics available to measure it. When you dig deeper into defining segments that make up the more behavioral characteristics of customers, your analytics may fall short of the data you need to built it. Interesting customer segments in SaaS Struggling to get started with defining some useful customer segments? Here are some common definitions that are actionable right out of the box. If you want to read more on this, I expanded on how to define and use these in Using Deep Customer Segmentation in SaaS: “At-risk of churn” If you know the customers teetering on the edge of cancelling, you have an instant focus for your customer success efforts. Measuring this one can be hard and should take into account a number of factors like lack of engagement with the product or upcoming credit card expiry. “Low value, high maintenance (unprofitable) customers” Segmenting by profitability is a common strategy employed by larger businesses with a sizable customer base. These types of segments will help you formulate a strategy for turning unprofitable customers into profitable ones. “Profitability segments are first-pass filters. They answer the question, which customers should I be acquiring? Which are the most profitable for the business?” Tomasz Tunguz, Redpoint “Product advocates” If your SaaS is solving a real world problem in an effective way, it’s likely that you’ll have a small-ish group of product advocates. These are your most valuable segment of customers and, when embraced, can nurture word-of-mouth based inbound acquisition. Resources and Further Reading BASICS Using Deep Customer Segmentation in SaaS (ChartMogul) — This post gives a comprehensive overview of SaaS customer segmentation, and covers some of the topics mentioned above in more detail The Importance of Segmentation for Your SaaS Startup (Tomasz Tunguz) — Tunguz does an excellent job of highlighting just how large the impact of segmentation can be, using examples from big enterprise and retail. DEEP CUTS Customer Segmentation: A Step By Step Guide For B2B (Tien Anh Nguyen) — This article goes way beyond the basics (it’s a beast!) but if you really want to immerse yourself in strategies for segmentation, start here. 3 Audience Segmentation Strategies for Your SaaS Startup (Sujan Patel) — Sujan has some solid advice for embedding the roots of good segmentation in your SaaS business from the beginning. When SaaS Marketing Segmentation is a Bad Idea (Justin Talerico) — This piece covers some of the downsides of segmentation, including the cases where you can run into problems.

[INST] SaaS Metrics Refresher #9: Segmentation [/INST]

Simply put, segmentation is the difference between answering questions like “what’s our churn rate this month?” And “what’s the churn rate of customers who haven’t fully onboarded?” Both of those questions can be useful to a SaaS business, but the second one is significantly more actionable in the insights it promises. “At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies.” Brad Coffey, HubSpot What is segmentation? “Audience segmentation isn’t a new concept. A lot of major brands have it down to a science, but it can be a foreign concept to startups. When done right, there are tremendous benefits to be had.” Sujan Patel A segment is basically just a defined group of your customers. It could be as simple or as complex as you like. Here are two perfectly valid customer segments: Customers in APAC region. Customers in APAC region who haven’t completed the onboarding flow but have invited other users to their account and are active in the app more than five times per week. Why is segmentation important? “Despite the added work to produce the metrics, there is high value in understanding the different segments. This tells us which parts of the business are working well, and which are not … As soon as you start doing this segmented analysis, the benefits will become immediately apparent.” David Skok, Matrix Partners Segmenting your metrics by product usage enables you to measure the correlation between user actions in your product (e.g. feature usage, login frequency, etc) and subscription metrics such as MRR. This also lets you compare how certain features or actions impact your conversion and retention rates. Characteristics of a useful customer segment “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint In the article Using Deep Customer Segmentation in SaaS I unpacked these commonly-referenced characteristics: Measurable –You can assess its value, through some form of metric, and that you have enough data to produce that metric. Addressable – You can have a real impact on the segment of customers you’re identifying (otherwise why would you define the segment?). Stable – Segments need to have minimal fluctuation caused by external factors. Such instability will mean that you’re unable to pull any reliable insights from the segment. Consistent – You measure the segment in the same way, across its lifetime. Changing the way you measure it would effectively nullify the value of any findings. Barriers to achieving smarter segmentation If segmentation helps you get to deeper, more actionable findings in your data, why isn’t everyone doing it? The key downside here is likely to be complexity and effort, as Justin Talerico writes on SaaSX: “The problem goes back to time, resources and expertise. Authentic relevance comes from domain knowledge that takes time and deep expertise. It’s like vertical marketing (the highest level of segmentation) — if you don’t do it all the way, you’re sniffed out as a poser and doomed to fail … You’re better off staying out of verticals — and segmentation — if you can’t execute authentic, knowledgeable content for each segment.” What Justin is saying here is that in order to build a complex segment — or highly specific description of a subset of customers — you need to be able to define it. And it’s the definition that usually requires deep domain knowledge or resources. A second problem can be measurement. Being able to define a complex segment is one thing, but the entire exercise is useless if you don’t have the tools or metrics available to measure it. When you dig deeper into defining segments that make up the more behavioral characteristics of customers, your analytics may fall short of the data you need to built it. Interesting customer segments in SaaS Struggling to get started with defining some useful customer segments? Here are some common definitions that are actionable right out of the box. If you want to read more on this, I expanded on how to define and use these in Using Deep Customer Segmentation in SaaS: “At-risk of churn” If you know the customers teetering on the edge of cancelling, you have an instant focus for your customer success efforts. Measuring this one can be hard and should take into account a number of factors like lack of engagement with the product or upcoming credit card expiry. “Low value, high maintenance (unprofitable) customers” Segmenting by profitability is a common strategy employed by larger businesses with a sizable customer base. These types of segments will help you formulate a strategy for turning unprofitable customers into profitable ones. “Profitability segments are first-pass filters. They answer the question, which customers should I be acquiring? Which are the most profitable for the business?” Tomasz Tunguz, Redpoint “Product advocates” If your SaaS is solving a real world problem in an effective way, it’s likely that you’ll have a small-ish group of product advocates. These are your most valuable segment of customers and, when embraced, can nurture word-of-mouth based inbound acquisition. Resources and Further Reading BASICS Using Deep Customer Segmentation in SaaS (ChartMogul) — This post gives a comprehensive overview of SaaS customer segmentation, and covers some of the topics mentioned above in more detail The Importance of Segmentation for Your SaaS Startup (Tomasz Tunguz) — Tunguz does an excellent job of highlighting just how large the impact of segmentation can be, using examples from big enterprise and retail. DEEP CUTS Customer Segmentation: A Step By Step Guide For B2B (Tien Anh Nguyen) — This article goes way beyond the basics (it’s a beast!) but if you really want to immerse yourself in strategies for segmentation, start here. 3 Audience Segmentation Strategies for Your SaaS Startup (Sujan Patel) — Sujan has some solid advice for embedding the roots of good segmentation in your SaaS business from the beginning. When SaaS Marketing Segmentation is a Bad Idea (Justin Talerico) — This piece covers some of the downsides of segmentation, including the cases where you can run into problems.

<sys> [INST] SaaS Metrics Refresher #9: Segmentation [/INST] Simply put, segmentation is the difference between answering questions like “what’s our churn rate this month?” And “what’s the churn rate of customers who haven’t fully onboarded?” Both of those questions can be useful to a SaaS business, but the second one is significantly more actionable in the insights it promises. “At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies.” Brad Coffey, HubSpot What is segmentation? “Audience segmentation isn’t a new concept. A lot of major brands have it down to a science, but it can be a foreign concept to startups. When done right, there are tremendous benefits to be had.” Sujan Patel A segment is basically just a defined group of your customers. It could be as simple or as complex as you like. Here are two perfectly valid customer segments: Customers in APAC region. Customers in APAC region who haven’t completed the onboarding flow but have invited other users to their account and are active in the app more than five times per week. Why is segmentation important? “Despite the added work to produce the metrics, there is high value in understanding the different segments. This tells us which parts of the business are working well, and which are not … As soon as you start doing this segmented analysis, the benefits will become immediately apparent.” David Skok, Matrix Partners Segmenting your metrics by product usage enables you to measure the correlation between user actions in your product (e.g. feature usage, login frequency, etc) and subscription metrics such as MRR. This also lets you compare how certain features or actions impact your conversion and retention rates. Characteristics of a useful customer segment “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint In the article Using Deep Customer Segmentation in SaaS I unpacked these commonly-referenced characteristics: Measurable –You can assess its value, through some form of metric, and that you have enough data to produce that metric. Addressable – You can have a real impact on the segment of customers you’re identifying (otherwise why would you define the segment?). Stable – Segments need to have minimal fluctuation caused by external factors. Such instability will mean that you’re unable to pull any reliable insights from the segment. Consistent – You measure the segment in the same way, across its lifetime. Changing the way you measure it would effectively nullify the value of any findings. Barriers to achieving smarter segmentation If segmentation helps you get to deeper, more actionable findings in your data, why isn’t everyone doing it? The key downside here is likely to be complexity and effort, as Justin Talerico writes on SaaSX: “The problem goes back to time, resources and expertise. Authentic relevance comes from domain knowledge that takes time and deep expertise. It’s like vertical marketing (the highest level of segmentation) — if you don’t do it all the way, you’re sniffed out as a poser and doomed to fail … You’re better off staying out of verticals — and segmentation — if you can’t execute authentic, knowledgeable content for each segment.” What Justin is saying here is that in order to build a complex segment — or highly specific description of a subset of customers — you need to be able to define it. And it’s the definition that usually requires deep domain knowledge or resources. A second problem can be measurement. Being able to define a complex segment is one thing, but the entire exercise is useless if you don’t have the tools or metrics available to measure it. When you dig deeper into defining segments that make up the more behavioral characteristics of customers, your analytics may fall short of the data you need to built it. Interesting customer segments in SaaS Struggling to get started with defining some useful customer segments? Here are some common definitions that are actionable right out of the box. If you want to read more on this, I expanded on how to define and use these in Using Deep Customer Segmentation in SaaS: “At-risk of churn” If you know the customers teetering on the edge of cancelling, you have an instant focus for your customer success efforts. Measuring this one can be hard and should take into account a number of factors like lack of engagement with the product or upcoming credit card expiry. “Low value, high maintenance (unprofitable) customers” Segmenting by profitability is a common strategy employed by larger businesses with a sizable customer base. These types of segments will help you formulate a strategy for turning unprofitable customers into profitable ones. “Profitability segments are first-pass filters. They answer the question, which customers should I be acquiring? Which are the most profitable for the business?” Tomasz Tunguz, Redpoint “Product advocates” If your SaaS is solving a real world problem in an effective way, it’s likely that you’ll have a small-ish group of product advocates. These are your most valuable segment of customers and, when embraced, can nurture word-of-mouth based inbound acquisition. Resources and Further Reading BASICS Using Deep Customer Segmentation in SaaS (ChartMogul) — This post gives a comprehensive overview of SaaS customer segmentation, and covers some of the topics mentioned above in more detail The Importance of Segmentation for Your SaaS Startup (Tomasz Tunguz) — Tunguz does an excellent job of highlighting just how large the impact of segmentation can be, using examples from big enterprise and retail. DEEP CUTS Customer Segmentation: A Step By Step Guide For B2B (Tien Anh Nguyen) — This article goes way beyond the basics (it’s a beast!) but if you really want to immerse yourself in strategies for segmentation, start here. 3 Audience Segmentation Strategies for Your SaaS Startup (Sujan Patel) — Sujan has some solid advice for embedding the roots of good segmentation in your SaaS business from the beginning. When SaaS Marketing Segmentation is a Bad Idea (Justin Talerico) — This piece covers some of the downsides of segmentation, including the cases where you can run into problems. </sys

SaaStr Annual was freaking awesome. I haven’t had such a good time at an event since Point Nine Capital’s awesome SaaS founders meetup in San Francisco last October. I’m now convinced that the more specific an event is, the more valuable, engaging and ultimately more fun it is. At ChartMogul we’re building SaaS metrics software for SaaS companies so there couldn’t be a more perfect event for us. Just to highlight how relevant SaaStr was, we’ve only been selling ChartMogul for one month (therefore don’t have huge numbers of customers yet), yet we bumped into two of our paying customers and several of our very active trialers. Both the customers had flown from different parts of Europe to be there. The majority of folks I met were founders of SaaS companies, mostly beyond the seed stage. I think we were one of the few earlier/seed stage startups attending. This is great for us, surrounding yourself with companies who are where you’re aspiring to be in N months feels like a healthy practice (you improve fastest at sports when you play someone better than you). The speakers were just about as good as it can get, making appearances were (among others) the Founder/CEOs of BOX, Slack, Yammer and Zenefits (unbelievable). For people in SaaS it was the only place to be on February 5th. Huge kudos to Jason M. Lemkin and team for pulling off the SaaS event of the year.

[INST] SaaStr Annual was freaking awesome [/INST]

I haven’t had such a good time at an event since Point Nine Capital’s awesome SaaS founders meetup in San Francisco last October. I’m now convinced that the more specific an event is, the more valuable, engaging and ultimately more fun it is. At ChartMogul we’re building SaaS metrics software for SaaS companies so there couldn’t be a more perfect event for us. Just to highlight how relevant SaaStr was, we’ve only been selling ChartMogul for one month (therefore don’t have huge numbers of customers yet), yet we bumped into two of our paying customers and several of our very active trialers. Both the customers had flown from different parts of Europe to be there. The majority of folks I met were founders of SaaS companies, mostly beyond the seed stage. I think we were one of the few earlier/seed stage startups attending. This is great for us, surrounding yourself with companies who are where you’re aspiring to be in N months feels like a healthy practice (you improve fastest at sports when you play someone better than you). The speakers were just about as good as it can get, making appearances were (among others) the Founder/CEOs of BOX, Slack, Yammer and Zenefits (unbelievable). For people in SaaS it was the only place to be on February 5th. Huge kudos to Jason M. Lemkin and team for pulling off the SaaS event of the year.

<sys> [INST] SaaStr Annual was freaking awesome [/INST] I haven’t had such a good time at an event since Point Nine Capital’s awesome SaaS founders meetup in San Francisco last October. I’m now convinced that the more specific an event is, the more valuable, engaging and ultimately more fun it is. At ChartMogul we’re building SaaS metrics software for SaaS companies so there couldn’t be a more perfect event for us. Just to highlight how relevant SaaStr was, we’ve only been selling ChartMogul for one month (therefore don’t have huge numbers of customers yet), yet we bumped into two of our paying customers and several of our very active trialers. Both the customers had flown from different parts of Europe to be there. The majority of folks I met were founders of SaaS companies, mostly beyond the seed stage. I think we were one of the few earlier/seed stage startups attending. This is great for us, surrounding yourself with companies who are where you’re aspiring to be in N months feels like a healthy practice (you improve fastest at sports when you play someone better than you). The speakers were just about as good as it can get, making appearances were (among others) the Founder/CEOs of BOX, Slack, Yammer and Zenefits (unbelievable). For people in SaaS it was the only place to be on February 5th. Huge kudos to Jason M. Lemkin and team for pulling off the SaaS event of the year. </sys

Introducing the Node.js ChartMogul client. Integrating with ChartMogul has never been easier At ChartMogul, we want any subscription business to be able to integrate ChartMogul with maximum ease and minimum fuss. In some cases, this means building a suite of tools and plugins like our recently-updated Google Sheets app, which allows you to import data directly from a spreadsheet. In other cases where ChartMogul users need to integrate directly with the platform, we have a suite of APIs to cover every aspect of functionality: Import API allows you to push your billing data to ChartMogul from anywhere, and start analyzing your subscription revenue. Enrichment API lets you push additional customer metadata to ChartMogul, for use with Segmentation. Metrics API gives you access to your SaaS metrics and analytics data – to put ChartMogul’s insights wherever is most valuable for your team. These APIs form the basis of all integrations with ChartMogul, and as such are consumed and maintained by us, to reflect the functionality of the platform. BUT, if you want a way to get going even faster with the ChartMogul APIs, we have something for you! We recently launched a Ruby client library, for those of you building apps with Ruby. Today, we’re happy to unveil our Node.js client library, for everyone using the Node environment. The ChartMogul Node.js client The Node client wraps up the complete functionality of all three ChartMogul APIs, giving you a single, abstracted way to interact with the ChartMogul platform. While you’ll always be able to communicate directly with each API, there are a number of benefits to using our client library: You don’t need to worry about handling raw API requests and responses. You can interact with ChartMogul using naming conventions that are on the same level as ChartMogul, i.e. Invoices, Plans, etc. You can get up and running much more quickly, and save developer time. The library will be maintained and updated to reflect new functionality as it’s launched. The Node client library is fully open source. We’re encouraging the developer community to suggest improvements or raise issues, so that we can maintain the best possible implementation for you. Check out the project on GitHub if you want to have a look around. Getting started Want to make use of the Node client library in your application? Great! To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will soon be available on our Developer Hub very soon, but until then you can find everything you need, including a full list of supported methods, parameters and errors in the project’s README. Can you make a client library for [X]? The Node.js client is our second client library for the ChartMogul platform. We have plans for more plenty more languages and frameworks in the coming months. If you have something specific that would make your life easier when interacting with ChartMogul, let us know via email so we can prioritize accordingly.

[INST] Introducing the Node [/INST]

js ChartMogul client. Integrating with ChartMogul has never been easier At ChartMogul, we want any subscription business to be able to integrate ChartMogul with maximum ease and minimum fuss. In some cases, this means building a suite of tools and plugins like our recently-updated Google Sheets app, which allows you to import data directly from a spreadsheet. In other cases where ChartMogul users need to integrate directly with the platform, we have a suite of APIs to cover every aspect of functionality: Import API allows you to push your billing data to ChartMogul from anywhere, and start analyzing your subscription revenue. Enrichment API lets you push additional customer metadata to ChartMogul, for use with Segmentation. Metrics API gives you access to your SaaS metrics and analytics data – to put ChartMogul’s insights wherever is most valuable for your team. These APIs form the basis of all integrations with ChartMogul, and as such are consumed and maintained by us, to reflect the functionality of the platform. BUT, if you want a way to get going even faster with the ChartMogul APIs, we have something for you! We recently launched a Ruby client library, for those of you building apps with Ruby. Today, we’re happy to unveil our Node.js client library, for everyone using the Node environment. The ChartMogul Node.js client The Node client wraps up the complete functionality of all three ChartMogul APIs, giving you a single, abstracted way to interact with the ChartMogul platform. While you’ll always be able to communicate directly with each API, there are a number of benefits to using our client library: You don’t need to worry about handling raw API requests and responses. You can interact with ChartMogul using naming conventions that are on the same level as ChartMogul, i.e. Invoices, Plans, etc. You can get up and running much more quickly, and save developer time. The library will be maintained and updated to reflect new functionality as it’s launched. The Node client library is fully open source. We’re encouraging the developer community to suggest improvements or raise issues, so that we can maintain the best possible implementation for you. Check out the project on GitHub if you want to have a look around. Getting started Want to make use of the Node client library in your application? Great! To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will soon be available on our Developer Hub very soon, but until then you can find everything you need, including a full list of supported methods, parameters and errors in the project’s README. Can you make a client library for [X]? The Node.js client is our second client library for the ChartMogul platform. We have plans for more plenty more languages and frameworks in the coming months. If you have something specific that would make your life easier when interacting with ChartMogul, let us know via email so we can prioritize accordingly.

<sys> [INST] Introducing the Node [/INST]js ChartMogul client. Integrating with ChartMogul has never been easier At ChartMogul, we want any subscription business to be able to integrate ChartMogul with maximum ease and minimum fuss. In some cases, this means building a suite of tools and plugins like our recently-updated Google Sheets app, which allows you to import data directly from a spreadsheet. In other cases where ChartMogul users need to integrate directly with the platform, we have a suite of APIs to cover every aspect of functionality: Import API allows you to push your billing data to ChartMogul from anywhere, and start analyzing your subscription revenue. Enrichment API lets you push additional customer metadata to ChartMogul, for use with Segmentation. Metrics API gives you access to your SaaS metrics and analytics data – to put ChartMogul’s insights wherever is most valuable for your team. These APIs form the basis of all integrations with ChartMogul, and as such are consumed and maintained by us, to reflect the functionality of the platform. BUT, if you want a way to get going even faster with the ChartMogul APIs, we have something for you! We recently launched a Ruby client library, for those of you building apps with Ruby. Today, we’re happy to unveil our Node.js client library, for everyone using the Node environment. The ChartMogul Node.js client The Node client wraps up the complete functionality of all three ChartMogul APIs, giving you a single, abstracted way to interact with the ChartMogul platform. While you’ll always be able to communicate directly with each API, there are a number of benefits to using our client library: You don’t need to worry about handling raw API requests and responses. You can interact with ChartMogul using naming conventions that are on the same level as ChartMogul, i.e. Invoices, Plans, etc. You can get up and running much more quickly, and save developer time. The library will be maintained and updated to reflect new functionality as it’s launched. The Node client library is fully open source. We’re encouraging the developer community to suggest improvements or raise issues, so that we can maintain the best possible implementation for you. Check out the project on GitHub if you want to have a look around. Getting started Want to make use of the Node client library in your application? Great! To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will soon be available on our Developer Hub very soon, but until then you can find everything you need, including a full list of supported methods, parameters and errors in the project’s README. Can you make a client library for [X]? The Node.js client is our second client library for the ChartMogul platform. We have plans for more plenty more languages and frameworks in the coming months. If you have something specific that would make your life easier when interacting with ChartMogul, let us know via email so we can prioritize accordingly. </sys

Growth hacking for mobile apps with Aleksandra Siciarz. A bit of background GetResponse provides an all-in-one online marketing platform for teams that need to build landing pages, send emails, run webinars, and more. Teams all over the globe rely on their suite of web-based solutions to streamline and to automate different aspects of the customer journey. Enter mobile. Enter Aleksandra. Aleksandra left UberEats to join GetResponse about 8 months ago. She’s now responsible for leading an impressive mobile growth team. Her experience is rooted in developing and scaling mobile products. In her role at GetResponse, she’s charged with launching a new app that will help GetResponse acquire new customers in different segments and extend features (as well as availability) to current customers using their web-based app. After all, doesn’t everyone want to check their latest campaign on the go? Big thanks to Aleksandra for sharing her thoughts and experience, which I’ve done my best to review in the text below. On key mobile growth and strategy S: Hi Aleksandra. So I’ve prepared a few questions and we can go through them now and see where our conversation takes us. First, I’m hoping to understand: How do you get the full picture of key metrics when you’re dealing not just with web-based data but mobile too? A: Mobile growth roles require a high level of data literacy. You need to follow data from the iTunes App Store and Google Play and understand how it translates to user acquisition. Much of my day-to-day is: getting my hands on the necessary data sets, running experiments, analyzing what is significant, and tweaking here and there to improve retention. It’s really important to understand the concept of and to use dynamic links. Dynamic links for mobile apps allow you to redirect the user to your app depending on the device he or she is using. This allows you to track the performance of one link versus another. Setting up different dynamic links for each of your campaigns is essential because it helps you appreciate and understand the journey from campaign to install. That way, you can make it as short as possible. You can create dynamic links in different attribution softwares — and you should use them everywhere to understand where your users and customers come from. Also, there are so-called deep links. Deep links allow you to redirect the user to a specific place in the app and are often used for retention campaigns — especially if you want to show the user something specific. S: Sounds similar to other growth efforts, but in some ways, even hairier because you’re managing available information from iTunes and Google Play in addition to standard multi-touch web-based attribution data. A: Yeah, that’s why we typically ask for someone’s mobile phone number or email on our website, so that we can tie different parts of the user journey together using those dynamic links. You need to control the process in order to confidently answer questions about attribution. Mobile metrics and churn S: What are the top of mind metrics that you wake up thinking about? What’s relevant for mobile growth teams and for mobile businesses generally? A: Actually, it’s kind of similar for mobile apps and web apps because you need to analyze the whole funnel and figure out what is making users opt for your product or service. So, you need to understand how and why free users turn into paying customers, yeah? In some ways, the funnel has more dimensions, though. Specific to mobile apps, you should also think about: MAU — monthly active users Conversion from install to open or to sign up Conversion from free to paid LTV of the user All churn metrics One of the key challenges for mobile apps is churn. It’s quite common now for apps to play with different subscription types and pricing as a way to combat churn. S: Ah churn. Yes, I have a lot of questions about that. What does churn look like for mobile apps? What kinds of things do you do to fight churn? A: About 71% of app users churn within 90 days. That’s a lot. Some users uninstall the app from their phone; others simply forget that they installed it to begin with. So it’s a big deal. It’s super important to predict churn likelihood for specific groups as soon as you’re able. You should figure out how churn tolerant you are and then start to experiment with small groups of users to stay on track. You can experiment with specific messaging, push notifications, and in-app messages. But it’s not only about communications and re-marketing, but also about adjusting the actual app itself based on user behavior. One really cool thing that some games apps do — for example — if they identify a user or group of users is likely to churn, they can make playing the game easier for those users. With this and really any kind of experiment, you want to measure the impact — is it statistically significant? If so, it has incremental impact on helping you minimize churn and then you can apply that change to all applicable segments. On process and technology S: Sure, so lots of areas for experimentation. What processes need to be defined to make sure that you’re changing and improving the right things? A: There are a few important areas that you need to give structure depending on where you are as a business. I’d also encourage teams to physically write out their growth hypotheses and test them one by one in a systematic way. One of these key areas is app onboarding. There are a lot of ways to get new users — you can pay for the traffic, use ads, leverage partnerships, PR — top of funnel standards. But from there you need to make sure that active users understand and see the benefits of your app as soon as possible. A common tactic to facilitate this is to log new users in as guests. This way, they don’t see the login or create an account screen, and can instead start to use the app directly after install. Another key area is app store optimization. You should set your strategy and process for optimizing your app’s visibility. This often requires a lot of cooperation with different teams — design, keyword research, data analytics — so you’ll want to make sure everyone is on the same page. In terms of product, it’s important to regularly add new features and content to the app. You should plan to inform users about anything new in a relatively consistent way in order to increase stickiness. Plan and communication roadmap for small fixes and features for upcoming months so that you can publish regular releases. This can actually help with conversions because if you see, for example, that an app was most recently updated 2 years ago, you may be less inclined to use it. You of course need to choose the right technology when it comes to building the app, the cloud service you want to use, and then make sure that you are using mobile-specific attribution software in a consistent and reliable way. S: Got it, so there are some core areas that need definition and consistency across the growth team. Makes sense. A: Ah, and one more thing. You need to decide if you want to be focused on volume or on revenue. It’s hard to do tons of app installs and of users and to simultaneously have super high conversions and revenues. A lot of teams focus on volume first so that they can create virality and learn from their users. Then, step by step, they work to improve monetization. If you’re focused on monetization right away, you might have bad reviews and ratings which will hurt your app store positioning a lot. S: Is there a recent project or experiment that you conducted that could share with us? A hypothesis, something we did, and the result. A: Definitely. We actually pushed new users into the app without a sign up screen during onboarding and found that engagement, retention, and LTV was much higher. One of the drawbacks, though, is that you get a smaller number of emails and contacts, but for us, it was worth it. On necessary tools S: On the topic of technology, what do you think every mobile growth team should have in their toolkit? A: Well, a lot of what you’ll use depends on budget, but I’ll review some basics. First, when it comes to analytics, you should be monitoring the information from the App Store and Google Play. This data, however, is not unified, so it can be a bit tricky. Firebase which is Google Analytics for mobile apps. It’s a free app and I really recommend using it — it includes key conversion and retention analytics but also helps you develop the app. It doesn’t allow you to see financial metrics — you can see more or less the revenue but it’s not very detailed because it usually just includes revenue from Google Play. When it comes to top of the funnel, you’ll likely use Facebook and Google Ads. We of couse use our own tool, GetResponse, for marketing automation. Then you need some tools for ASO (app store optimization) and competition tracking. AppAnnie, AppTweak for keyword research, category ranking, and tools like Survicate for product and customer feedback. You should plan to report on these things weekly. On mobile growth struggles S: What are your biggest frustrations in the mobile growth space or in your role today? A: Haha, well attribution. I think it’s a common problem for all marketers. For mobile specifically, I’ve mentioned this, but it’s difficult to unify data from Google Play and the iTunes App Store. The acquisition and revenue data in each dashboard and the naming conventions are different. You need to download the data and play with it a bit. Part of the reason there is such a difference here is because Google Play recently launched subscription for mobile apps and there’s more work that needs to be done here. Of course, then there’s also reviews. For mobile apps, you’re likely getting reviews on a daily basis. You can’t stress when some users have unmet expectations that are especially high — but it’s both important and challenging to distinguish what feedback is most valuable. On the future of mobile growth S: Where do you see the future of roles like yours and any predictions about what we’ll see in the mobile subscription space in the months and years to come? A: Many people are using their mobile devices rather than computers for major day-to-day activities. So I think B2B and B2C companies will need to think about how to engage users on mobile. Like e-commerce businesses for example are launching mobile apps to increase revenues and to give their users incremental value. From the customer standpoint, subscriptions can be much cheaper — especially for the apps that you’re using regularly. So we’ll definitely see more of that and perhaps some creative pricing/plan options for on demand. There’s also the idea for launching subscription offerings that are more convenient for apps used daily like Uber or Foodora. This might mean paying less and having to worry less about paying each and every time. Finally, subscriptions for gaming — bundles of tools and game enhancements. We’re sure to see more of this. S: Cool insights. That’s all the time we have, but I really appreciate you sharing this detail with us. And good luck with this week’s experiments.

[INST] Growth hacking for mobile apps with Aleksandra Siciarz [/INST]

A bit of background GetResponse provides an all-in-one online marketing platform for teams that need to build landing pages, send emails, run webinars, and more. Teams all over the globe rely on their suite of web-based solutions to streamline and to automate different aspects of the customer journey. Enter mobile. Enter Aleksandra. Aleksandra left UberEats to join GetResponse about 8 months ago. She’s now responsible for leading an impressive mobile growth team. Her experience is rooted in developing and scaling mobile products. In her role at GetResponse, she’s charged with launching a new app that will help GetResponse acquire new customers in different segments and extend features (as well as availability) to current customers using their web-based app. After all, doesn’t everyone want to check their latest campaign on the go? Big thanks to Aleksandra for sharing her thoughts and experience, which I’ve done my best to review in the text below. On key mobile growth and strategy S: Hi Aleksandra. So I’ve prepared a few questions and we can go through them now and see where our conversation takes us. First, I’m hoping to understand: How do you get the full picture of key metrics when you’re dealing not just with web-based data but mobile too? A: Mobile growth roles require a high level of data literacy. You need to follow data from the iTunes App Store and Google Play and understand how it translates to user acquisition. Much of my day-to-day is: getting my hands on the necessary data sets, running experiments, analyzing what is significant, and tweaking here and there to improve retention. It’s really important to understand the concept of and to use dynamic links. Dynamic links for mobile apps allow you to redirect the user to your app depending on the device he or she is using. This allows you to track the performance of one link versus another. Setting up different dynamic links for each of your campaigns is essential because it helps you appreciate and understand the journey from campaign to install. That way, you can make it as short as possible. You can create dynamic links in different attribution softwares — and you should use them everywhere to understand where your users and customers come from. Also, there are so-called deep links. Deep links allow you to redirect the user to a specific place in the app and are often used for retention campaigns — especially if you want to show the user something specific. S: Sounds similar to other growth efforts, but in some ways, even hairier because you’re managing available information from iTunes and Google Play in addition to standard multi-touch web-based attribution data. A: Yeah, that’s why we typically ask for someone’s mobile phone number or email on our website, so that we can tie different parts of the user journey together using those dynamic links. You need to control the process in order to confidently answer questions about attribution. Mobile metrics and churn S: What are the top of mind metrics that you wake up thinking about? What’s relevant for mobile growth teams and for mobile businesses generally? A: Actually, it’s kind of similar for mobile apps and web apps because you need to analyze the whole funnel and figure out what is making users opt for your product or service. So, you need to understand how and why free users turn into paying customers, yeah? In some ways, the funnel has more dimensions, though. Specific to mobile apps, you should also think about: MAU — monthly active users Conversion from install to open or to sign up Conversion from free to paid LTV of the user All churn metrics One of the key challenges for mobile apps is churn. It’s quite common now for apps to play with different subscription types and pricing as a way to combat churn. S: Ah churn. Yes, I have a lot of questions about that. What does churn look like for mobile apps? What kinds of things do you do to fight churn? A: About 71% of app users churn within 90 days. That’s a lot. Some users uninstall the app from their phone; others simply forget that they installed it to begin with. So it’s a big deal. It’s super important to predict churn likelihood for specific groups as soon as you’re able. You should figure out how churn tolerant you are and then start to experiment with small groups of users to stay on track. You can experiment with specific messaging, push notifications, and in-app messages. But it’s not only about communications and re-marketing, but also about adjusting the actual app itself based on user behavior. One really cool thing that some games apps do — for example — if they identify a user or group of users is likely to churn, they can make playing the game easier for those users. With this and really any kind of experiment, you want to measure the impact — is it statistically significant? If so, it has incremental impact on helping you minimize churn and then you can apply that change to all applicable segments. On process and technology S: Sure, so lots of areas for experimentation. What processes need to be defined to make sure that you’re changing and improving the right things? A: There are a few important areas that you need to give structure depending on where you are as a business. I’d also encourage teams to physically write out their growth hypotheses and test them one by one in a systematic way. One of these key areas is app onboarding. There are a lot of ways to get new users — you can pay for the traffic, use ads, leverage partnerships, PR — top of funnel standards. But from there you need to make sure that active users understand and see the benefits of your app as soon as possible. A common tactic to facilitate this is to log new users in as guests. This way, they don’t see the login or create an account screen, and can instead start to use the app directly after install. Another key area is app store optimization. You should set your strategy and process for optimizing your app’s visibility. This often requires a lot of cooperation with different teams — design, keyword research, data analytics — so you’ll want to make sure everyone is on the same page. In terms of product, it’s important to regularly add new features and content to the app. You should plan to inform users about anything new in a relatively consistent way in order to increase stickiness. Plan and communication roadmap for small fixes and features for upcoming months so that you can publish regular releases. This can actually help with conversions because if you see, for example, that an app was most recently updated 2 years ago, you may be less inclined to use it. You of course need to choose the right technology when it comes to building the app, the cloud service you want to use, and then make sure that you are using mobile-specific attribution software in a consistent and reliable way. S: Got it, so there are some core areas that need definition and consistency across the growth team. Makes sense. A: Ah, and one more thing. You need to decide if you want to be focused on volume or on revenue. It’s hard to do tons of app installs and of users and to simultaneously have super high conversions and revenues. A lot of teams focus on volume first so that they can create virality and learn from their users. Then, step by step, they work to improve monetization. If you’re focused on monetization right away, you might have bad reviews and ratings which will hurt your app store positioning a lot. S: Is there a recent project or experiment that you conducted that could share with us? A hypothesis, something we did, and the result. A: Definitely. We actually pushed new users into the app without a sign up screen during onboarding and found that engagement, retention, and LTV was much higher. One of the drawbacks, though, is that you get a smaller number of emails and contacts, but for us, it was worth it. On necessary tools S: On the topic of technology, what do you think every mobile growth team should have in their toolkit? A: Well, a lot of what you’ll use depends on budget, but I’ll review some basics. First, when it comes to analytics, you should be monitoring the information from the App Store and Google Play. This data, however, is not unified, so it can be a bit tricky. Firebase which is Google Analytics for mobile apps. It’s a free app and I really recommend using it — it includes key conversion and retention analytics but also helps you develop the app. It doesn’t allow you to see financial metrics — you can see more or less the revenue but it’s not very detailed because it usually just includes revenue from Google Play. When it comes to top of the funnel, you’ll likely use Facebook and Google Ads. We of couse use our own tool, GetResponse, for marketing automation. Then you need some tools for ASO (app store optimization) and competition tracking. AppAnnie, AppTweak for keyword research, category ranking, and tools like Survicate for product and customer feedback. You should plan to report on these things weekly. On mobile growth struggles S: What are your biggest frustrations in the mobile growth space or in your role today? A: Haha, well attribution. I think it’s a common problem for all marketers. For mobile specifically, I’ve mentioned this, but it’s difficult to unify data from Google Play and the iTunes App Store. The acquisition and revenue data in each dashboard and the naming conventions are different. You need to download the data and play with it a bit. Part of the reason there is such a difference here is because Google Play recently launched subscription for mobile apps and there’s more work that needs to be done here. Of course, then there’s also reviews. For mobile apps, you’re likely getting reviews on a daily basis. You can’t stress when some users have unmet expectations that are especially high — but it’s both important and challenging to distinguish what feedback is most valuable. On the future of mobile growth S: Where do you see the future of roles like yours and any predictions about what we’ll see in the mobile subscription space in the months and years to come? A: Many people are using their mobile devices rather than computers for major day-to-day activities. So I think B2B and B2C companies will need to think about how to engage users on mobile. Like e-commerce businesses for example are launching mobile apps to increase revenues and to give their users incremental value. From the customer standpoint, subscriptions can be much cheaper — especially for the apps that you’re using regularly. So we’ll definitely see more of that and perhaps some creative pricing/plan options for on demand. There’s also the idea for launching subscription offerings that are more convenient for apps used daily like Uber or Foodora. This might mean paying less and having to worry less about paying each and every time. Finally, subscriptions for gaming — bundles of tools and game enhancements. We’re sure to see more of this. S: Cool insights. That’s all the time we have, but I really appreciate you sharing this detail with us. And good luck with this week’s experiments.

<sys> [INST] Growth hacking for mobile apps with Aleksandra Siciarz [/INST] A bit of background GetResponse provides an all-in-one online marketing platform for teams that need to build landing pages, send emails, run webinars, and more. Teams all over the globe rely on their suite of web-based solutions to streamline and to automate different aspects of the customer journey. Enter mobile. Enter Aleksandra. Aleksandra left UberEats to join GetResponse about 8 months ago. She’s now responsible for leading an impressive mobile growth team. Her experience is rooted in developing and scaling mobile products. In her role at GetResponse, she’s charged with launching a new app that will help GetResponse acquire new customers in different segments and extend features (as well as availability) to current customers using their web-based app. After all, doesn’t everyone want to check their latest campaign on the go? Big thanks to Aleksandra for sharing her thoughts and experience, which I’ve done my best to review in the text below. On key mobile growth and strategy S: Hi Aleksandra. So I’ve prepared a few questions and we can go through them now and see where our conversation takes us. First, I’m hoping to understand: How do you get the full picture of key metrics when you’re dealing not just with web-based data but mobile too? A: Mobile growth roles require a high level of data literacy. You need to follow data from the iTunes App Store and Google Play and understand how it translates to user acquisition. Much of my day-to-day is: getting my hands on the necessary data sets, running experiments, analyzing what is significant, and tweaking here and there to improve retention. It’s really important to understand the concept of and to use dynamic links. Dynamic links for mobile apps allow you to redirect the user to your app depending on the device he or she is using. This allows you to track the performance of one link versus another. Setting up different dynamic links for each of your campaigns is essential because it helps you appreciate and understand the journey from campaign to install. That way, you can make it as short as possible. You can create dynamic links in different attribution softwares — and you should use them everywhere to understand where your users and customers come from. Also, there are so-called deep links. Deep links allow you to redirect the user to a specific place in the app and are often used for retention campaigns — especially if you want to show the user something specific. S: Sounds similar to other growth efforts, but in some ways, even hairier because you’re managing available information from iTunes and Google Play in addition to standard multi-touch web-based attribution data. A: Yeah, that’s why we typically ask for someone’s mobile phone number or email on our website, so that we can tie different parts of the user journey together using those dynamic links. You need to control the process in order to confidently answer questions about attribution. Mobile metrics and churn S: What are the top of mind metrics that you wake up thinking about? What’s relevant for mobile growth teams and for mobile businesses generally? A: Actually, it’s kind of similar for mobile apps and web apps because you need to analyze the whole funnel and figure out what is making users opt for your product or service. So, you need to understand how and why free users turn into paying customers, yeah? In some ways, the funnel has more dimensions, though. Specific to mobile apps, you should also think about: MAU — monthly active users Conversion from install to open or to sign up Conversion from free to paid LTV of the user All churn metrics One of the key challenges for mobile apps is churn. It’s quite common now for apps to play with different subscription types and pricing as a way to combat churn. S: Ah churn. Yes, I have a lot of questions about that. What does churn look like for mobile apps? What kinds of things do you do to fight churn? A: About 71% of app users churn within 90 days. That’s a lot. Some users uninstall the app from their phone; others simply forget that they installed it to begin with. So it’s a big deal. It’s super important to predict churn likelihood for specific groups as soon as you’re able. You should figure out how churn tolerant you are and then start to experiment with small groups of users to stay on track. You can experiment with specific messaging, push notifications, and in-app messages. But it’s not only about communications and re-marketing, but also about adjusting the actual app itself based on user behavior. One really cool thing that some games apps do — for example — if they identify a user or group of users is likely to churn, they can make playing the game easier for those users. With this and really any kind of experiment, you want to measure the impact — is it statistically significant? If so, it has incremental impact on helping you minimize churn and then you can apply that change to all applicable segments. On process and technology S: Sure, so lots of areas for experimentation. What processes need to be defined to make sure that you’re changing and improving the right things? A: There are a few important areas that you need to give structure depending on where you are as a business. I’d also encourage teams to physically write out their growth hypotheses and test them one by one in a systematic way. One of these key areas is app onboarding. There are a lot of ways to get new users — you can pay for the traffic, use ads, leverage partnerships, PR — top of funnel standards. But from there you need to make sure that active users understand and see the benefits of your app as soon as possible. A common tactic to facilitate this is to log new users in as guests. This way, they don’t see the login or create an account screen, and can instead start to use the app directly after install. Another key area is app store optimization. You should set your strategy and process for optimizing your app’s visibility. This often requires a lot of cooperation with different teams — design, keyword research, data analytics — so you’ll want to make sure everyone is on the same page. In terms of product, it’s important to regularly add new features and content to the app. You should plan to inform users about anything new in a relatively consistent way in order to increase stickiness. Plan and communication roadmap for small fixes and features for upcoming months so that you can publish regular releases. This can actually help with conversions because if you see, for example, that an app was most recently updated 2 years ago, you may be less inclined to use it. You of course need to choose the right technology when it comes to building the app, the cloud service you want to use, and then make sure that you are using mobile-specific attribution software in a consistent and reliable way. S: Got it, so there are some core areas that need definition and consistency across the growth team. Makes sense. A: Ah, and one more thing. You need to decide if you want to be focused on volume or on revenue. It’s hard to do tons of app installs and of users and to simultaneously have super high conversions and revenues. A lot of teams focus on volume first so that they can create virality and learn from their users. Then, step by step, they work to improve monetization. If you’re focused on monetization right away, you might have bad reviews and ratings which will hurt your app store positioning a lot. S: Is there a recent project or experiment that you conducted that could share with us? A hypothesis, something we did, and the result. A: Definitely. We actually pushed new users into the app without a sign up screen during onboarding and found that engagement, retention, and LTV was much higher. One of the drawbacks, though, is that you get a smaller number of emails and contacts, but for us, it was worth it. On necessary tools S: On the topic of technology, what do you think every mobile growth team should have in their toolkit? A: Well, a lot of what you’ll use depends on budget, but I’ll review some basics. First, when it comes to analytics, you should be monitoring the information from the App Store and Google Play. This data, however, is not unified, so it can be a bit tricky. Firebase which is Google Analytics for mobile apps. It’s a free app and I really recommend using it — it includes key conversion and retention analytics but also helps you develop the app. It doesn’t allow you to see financial metrics — you can see more or less the revenue but it’s not very detailed because it usually just includes revenue from Google Play. When it comes to top of the funnel, you’ll likely use Facebook and Google Ads. We of couse use our own tool, GetResponse, for marketing automation. Then you need some tools for ASO (app store optimization) and competition tracking. AppAnnie, AppTweak for keyword research, category ranking, and tools like Survicate for product and customer feedback. You should plan to report on these things weekly. On mobile growth struggles S: What are your biggest frustrations in the mobile growth space or in your role today? A: Haha, well attribution. I think it’s a common problem for all marketers. For mobile specifically, I’ve mentioned this, but it’s difficult to unify data from Google Play and the iTunes App Store. The acquisition and revenue data in each dashboard and the naming conventions are different. You need to download the data and play with it a bit. Part of the reason there is such a difference here is because Google Play recently launched subscription for mobile apps and there’s more work that needs to be done here. Of course, then there’s also reviews. For mobile apps, you’re likely getting reviews on a daily basis. You can’t stress when some users have unmet expectations that are especially high — but it’s both important and challenging to distinguish what feedback is most valuable. On the future of mobile growth S: Where do you see the future of roles like yours and any predictions about what we’ll see in the mobile subscription space in the months and years to come? A: Many people are using their mobile devices rather than computers for major day-to-day activities. So I think B2B and B2C companies will need to think about how to engage users on mobile. Like e-commerce businesses for example are launching mobile apps to increase revenues and to give their users incremental value. From the customer standpoint, subscriptions can be much cheaper — especially for the apps that you’re using regularly. So we’ll definitely see more of that and perhaps some creative pricing/plan options for on demand. There’s also the idea for launching subscription offerings that are more convenient for apps used daily like Uber or Foodora. This might mean paying less and having to worry less about paying each and every time. Finally, subscriptions for gaming — bundles of tools and game enhancements. We’re sure to see more of this. S: Cool insights. That’s all the time we have, but I really appreciate you sharing this detail with us. And good luck with this week’s experiments. </sys

Make Metrics Meaningful: how each team relates to MRR. “If you want to move numbers in the right direction, you need to get people to care about them.” – Hubspot Most employees of a subscription business know that Monthly Recurring Revenue (MRR) is the engine of the company and the primary indicator of its growth. But when it comes to business goals and their corresponding metrics, they can be a bit abstract or removed from the daily function of many team members. Most employees stay focused on those to do with their specific team. The dreaded “silo” effect sets in, and this is increasingly the case as a business gets larger, headcount grows, and teams specialize. Marketing focuses on conversion rates Engineering on speed and reliability Customer success on retention … And so on. These are the quantitative targets they know they need to hit. These are the targets that directly reflect their effort and performance, that determine their chances for a promotion, and that serve as stepping stones for their career. But when employees can directly tie their own team’s performance and numbers to the larger business metrics of the company, it creates what the startup world loves to call “buy in.” It’s a date-driven way of connecting individual effort to the overall vision of the company, to the company’s progress in pursuit of its mission. And when employees recognize their role in these company-wide metrics, when they feel their impact on the company’s trajectory, that fosters a strong culture of ownership, teamwork, and ultimately — innovation. “The best run companies are data-driven, and this skill sets businesses apart from their competition.” – Tomasz Tunguz MRR, the metric To begin, the metric must be “well-defined, communicated clearly to the workforce and consistently measured.” (Forbes) And from there, you can educate teams on how their individual effort ties in to help move the needle. [Source: The Ultimate SaaS Metrics Cheat Sheet] It contains five movements: In other words… New business MRR: The revenue value of brand new customers. Expansion MRR: Satisfied customers who increase the number of seats/licenses, upgrade to a higher plan, or add a second subscription. Contraction MRR: Customers scale back their subscription by decreasing number of seats/licenses or downgrading to a lower plan. Churn MRR: The revenue value of completely cancelled accounts. Reactivation MRR: Formerly cancelled customers who come back on board. Breaking down MRR per team When it comes to this revenue metric, the connection to the Sales team is obvious. MRR is a key metric for Sales already. So let’s take a look at the more tangential relationships that exist between other teams and MRR. Marketing If marketing’s primary objective is to bring new revenue INTO the business, how do you get them to care about what happens after the sale? What can they learn about the effectiveness of their channels and campaigns? New business MRR: New business can be tied back to acquisition efforts in various marketing channels. It reflects their success in expanding the brand’s audience, gaining exposure and trust, and converting leads to new customers for the first time. Expansion MRR: Expansion can be tied to ongoing marketing initiatives that promote customer success, such as content marketing through a blog or newsletter. Churn MRR: Churn, when segmented and analyzed by marketing channel, can identify which marketing channels are bringing in consistently unsuccessful customers. And from there, marketing change strategy so they are not wasting effort acquiring customers that, in turn, waste the effort of other teams. Reactivation MRR: Reactivation is a great metric to tie back to the marketing team if they have a hand in nurturing cancelled accounts, keeping them warm, and bringing them back around. This can be done through email marketing, sending both content newsletters and also relevant product announcements. Customer Success Expansion MRR: The connection here is pretty straightforward. A main objective of the Customer Success team is to expand the existing portfolio of business through upgrades and add-ons. As such Expansion MRR is most directly tied to this team. And as the SaaS company grows and expansion MRR becomes the engine of the business, it’s important for the team to keep a clear eye on this segment of the metric. Contraction MRR: The other main objective of Customer Success is to keep revenue from leaking out of the business. Contraction MRR is a good indication of the customer success team’s ability to prevent shrinking account sizes and service downgrades. Churn MRR: The connection between Customer Success and Churn MRR is also clear. In the same vein as Contraction MRR, Churn is Customer Success’s enemy #1. Churn overtime reflects on the team’s ability to keep customers satisfied and on board, but any temporary spikes or waves in cancellations could likely reflect back on marketing or sales — whether the lead was qualified and whether expectations were properly set before the deal was closed. Product & Engineering When it comes to Monthly Recurring Revenue, you can measure Product directly on two fronts: New Business and Retention. The engineering team’s effort plays into these as well. New business MRR: New business can be tied back to new product features that are meant to target new markets. If you’re e-commerce, new business can be generated by new site capabilities or new UX flows that simplify and smoothen the shopping/buying process. Churn MRR: Churn could be tied to performance issues within the product, and thus the Product team’s ability to launch features that run smoothly and release timely, thorough fixes. “It’s always important to know reasons for Churn. Bugs are the ones that impact Product most.” – Vinay Seshadri, Director of Product at ChartMogul The flipside of Churn, retention, also comes into play here. Retained MRR, or just retention rate, could be attributed to product features meant to increase user engagement and deliver more value to the customers. “Being able tag your MRR reports with Product events (like a new release) helps accurately attribute MRR to product changes.” – Vinay On that note… If you’re using an analytics tool, or are in the market for one, check to see that it has the ability to segment your data, particularly the ability to add custom tags. This feature is helpful beyond just product events. For example, you can tag accounts with the name of the sales rep who closed the deal. Then later, segment your MRR data by sales rep to easily monitor individual performance. Another helpful feature in an analytics tool is cohort analysis, which reveals trends in your customer base over their life cycle. That spike in cancellations I mentioned? Cohort analysis can determine whether those customers came on board in one particular month, making it easier to review best practices and move forward. Other ways to foster data throughout the team Give team members access to the data. Personal dashboards, a mounted screen in the office, or even handwriting on a white board — display the latest MRR numbers. At ChartMogul we use our own “MRR in the last 30 days” chart. It updates in real time and is available to the whole company through our app’s dashboard. From ChartMogul: This chart shows MRR broken out by plan. Send routine updates. Particularly if you have remote teams, it’s helpful to have these numbers recorded. The frequency is up to you — weekly, biweekly or monthly. Oral KPI updates, like in meetings, can often go in one ear and out the other. With this email, the numbers are physically in front of everyone, and people can refer back to it if need be. Reflect on the numbers as a team. When MRR goals are reached, celebrate! When goals are missed, discuss reasons why. Not only does this cultivate further understanding of the metric and one’s role in it, but reflection also informs the game plan for moving forward. Decisions become transparent — and everyone not only understands the decisions, but feels a part of the decision-making process. Then when next steps are clear, everyone is aligned to move forward.

[INST] Make Metrics Meaningful: how each team relates to MRR [/INST]

“If you want to move numbers in the right direction, you need to get people to care about them.” – Hubspot Most employees of a subscription business know that Monthly Recurring Revenue (MRR) is the engine of the company and the primary indicator of its growth. But when it comes to business goals and their corresponding metrics, they can be a bit abstract or removed from the daily function of many team members. Most employees stay focused on those to do with their specific team. The dreaded “silo” effect sets in, and this is increasingly the case as a business gets larger, headcount grows, and teams specialize. Marketing focuses on conversion rates Engineering on speed and reliability Customer success on retention … And so on. These are the quantitative targets they know they need to hit. These are the targets that directly reflect their effort and performance, that determine their chances for a promotion, and that serve as stepping stones for their career. But when employees can directly tie their own team’s performance and numbers to the larger business metrics of the company, it creates what the startup world loves to call “buy in.” It’s a date-driven way of connecting individual effort to the overall vision of the company, to the company’s progress in pursuit of its mission. And when employees recognize their role in these company-wide metrics, when they feel their impact on the company’s trajectory, that fosters a strong culture of ownership, teamwork, and ultimately — innovation. “The best run companies are data-driven, and this skill sets businesses apart from their competition.” – Tomasz Tunguz MRR, the metric To begin, the metric must be “well-defined, communicated clearly to the workforce and consistently measured.” (Forbes) And from there, you can educate teams on how their individual effort ties in to help move the needle. [Source: The Ultimate SaaS Metrics Cheat Sheet] It contains five movements: In other words… New business MRR: The revenue value of brand new customers. Expansion MRR: Satisfied customers who increase the number of seats/licenses, upgrade to a higher plan, or add a second subscription. Contraction MRR: Customers scale back their subscription by decreasing number of seats/licenses or downgrading to a lower plan. Churn MRR: The revenue value of completely cancelled accounts. Reactivation MRR: Formerly cancelled customers who come back on board. Breaking down MRR per team When it comes to this revenue metric, the connection to the Sales team is obvious. MRR is a key metric for Sales already. So let’s take a look at the more tangential relationships that exist between other teams and MRR. Marketing If marketing’s primary objective is to bring new revenue INTO the business, how do you get them to care about what happens after the sale? What can they learn about the effectiveness of their channels and campaigns? New business MRR: New business can be tied back to acquisition efforts in various marketing channels. It reflects their success in expanding the brand’s audience, gaining exposure and trust, and converting leads to new customers for the first time. Expansion MRR: Expansion can be tied to ongoing marketing initiatives that promote customer success, such as content marketing through a blog or newsletter. Churn MRR: Churn, when segmented and analyzed by marketing channel, can identify which marketing channels are bringing in consistently unsuccessful customers. And from there, marketing change strategy so they are not wasting effort acquiring customers that, in turn, waste the effort of other teams. Reactivation MRR: Reactivation is a great metric to tie back to the marketing team if they have a hand in nurturing cancelled accounts, keeping them warm, and bringing them back around. This can be done through email marketing, sending both content newsletters and also relevant product announcements. Customer Success Expansion MRR: The connection here is pretty straightforward. A main objective of the Customer Success team is to expand the existing portfolio of business through upgrades and add-ons. As such Expansion MRR is most directly tied to this team. And as the SaaS company grows and expansion MRR becomes the engine of the business, it’s important for the team to keep a clear eye on this segment of the metric. Contraction MRR: The other main objective of Customer Success is to keep revenue from leaking out of the business. Contraction MRR is a good indication of the customer success team’s ability to prevent shrinking account sizes and service downgrades. Churn MRR: The connection between Customer Success and Churn MRR is also clear. In the same vein as Contraction MRR, Churn is Customer Success’s enemy #1. Churn overtime reflects on the team’s ability to keep customers satisfied and on board, but any temporary spikes or waves in cancellations could likely reflect back on marketing or sales — whether the lead was qualified and whether expectations were properly set before the deal was closed. Product & Engineering When it comes to Monthly Recurring Revenue, you can measure Product directly on two fronts: New Business and Retention. The engineering team’s effort plays into these as well. New business MRR: New business can be tied back to new product features that are meant to target new markets. If you’re e-commerce, new business can be generated by new site capabilities or new UX flows that simplify and smoothen the shopping/buying process. Churn MRR: Churn could be tied to performance issues within the product, and thus the Product team’s ability to launch features that run smoothly and release timely, thorough fixes. “It’s always important to know reasons for Churn. Bugs are the ones that impact Product most.” – Vinay Seshadri, Director of Product at ChartMogul The flipside of Churn, retention, also comes into play here. Retained MRR, or just retention rate, could be attributed to product features meant to increase user engagement and deliver more value to the customers. “Being able tag your MRR reports with Product events (like a new release) helps accurately attribute MRR to product changes.” – Vinay On that note… If you’re using an analytics tool, or are in the market for one, check to see that it has the ability to segment your data, particularly the ability to add custom tags. This feature is helpful beyond just product events. For example, you can tag accounts with the name of the sales rep who closed the deal. Then later, segment your MRR data by sales rep to easily monitor individual performance. Another helpful feature in an analytics tool is cohort analysis, which reveals trends in your customer base over their life cycle. That spike in cancellations I mentioned? Cohort analysis can determine whether those customers came on board in one particular month, making it easier to review best practices and move forward. Other ways to foster data throughout the team Give team members access to the data. Personal dashboards, a mounted screen in the office, or even handwriting on a white board — display the latest MRR numbers. At ChartMogul we use our own “MRR in the last 30 days” chart. It updates in real time and is available to the whole company through our app’s dashboard. From ChartMogul: This chart shows MRR broken out by plan. Send routine updates. Particularly if you have remote teams, it’s helpful to have these numbers recorded. The frequency is up to you — weekly, biweekly or monthly. Oral KPI updates, like in meetings, can often go in one ear and out the other. With this email, the numbers are physically in front of everyone, and people can refer back to it if need be. Reflect on the numbers as a team. When MRR goals are reached, celebrate! When goals are missed, discuss reasons why. Not only does this cultivate further understanding of the metric and one’s role in it, but reflection also informs the game plan for moving forward. Decisions become transparent — and everyone not only understands the decisions, but feels a part of the decision-making process. Then when next steps are clear, everyone is aligned to move forward.

<sys> [INST] Make Metrics Meaningful: how each team relates to MRR [/INST] “If you want to move numbers in the right direction, you need to get people to care about them.” – Hubspot Most employees of a subscription business know that Monthly Recurring Revenue (MRR) is the engine of the company and the primary indicator of its growth. But when it comes to business goals and their corresponding metrics, they can be a bit abstract or removed from the daily function of many team members. Most employees stay focused on those to do with their specific team. The dreaded “silo” effect sets in, and this is increasingly the case as a business gets larger, headcount grows, and teams specialize. Marketing focuses on conversion rates Engineering on speed and reliability Customer success on retention … And so on. These are the quantitative targets they know they need to hit. These are the targets that directly reflect their effort and performance, that determine their chances for a promotion, and that serve as stepping stones for their career. But when employees can directly tie their own team’s performance and numbers to the larger business metrics of the company, it creates what the startup world loves to call “buy in.” It’s a date-driven way of connecting individual effort to the overall vision of the company, to the company’s progress in pursuit of its mission. And when employees recognize their role in these company-wide metrics, when they feel their impact on the company’s trajectory, that fosters a strong culture of ownership, teamwork, and ultimately — innovation. “The best run companies are data-driven, and this skill sets businesses apart from their competition.” – Tomasz Tunguz MRR, the metric To begin, the metric must be “well-defined, communicated clearly to the workforce and consistently measured.” (Forbes) And from there, you can educate teams on how their individual effort ties in to help move the needle. [Source: The Ultimate SaaS Metrics Cheat Sheet] It contains five movements: In other words… New business MRR: The revenue value of brand new customers. Expansion MRR: Satisfied customers who increase the number of seats/licenses, upgrade to a higher plan, or add a second subscription. Contraction MRR: Customers scale back their subscription by decreasing number of seats/licenses or downgrading to a lower plan. Churn MRR: The revenue value of completely cancelled accounts. Reactivation MRR: Formerly cancelled customers who come back on board. Breaking down MRR per team When it comes to this revenue metric, the connection to the Sales team is obvious. MRR is a key metric for Sales already. So let’s take a look at the more tangential relationships that exist between other teams and MRR. Marketing If marketing’s primary objective is to bring new revenue INTO the business, how do you get them to care about what happens after the sale? What can they learn about the effectiveness of their channels and campaigns? New business MRR: New business can be tied back to acquisition efforts in various marketing channels. It reflects their success in expanding the brand’s audience, gaining exposure and trust, and converting leads to new customers for the first time. Expansion MRR: Expansion can be tied to ongoing marketing initiatives that promote customer success, such as content marketing through a blog or newsletter. Churn MRR: Churn, when segmented and analyzed by marketing channel, can identify which marketing channels are bringing in consistently unsuccessful customers. And from there, marketing change strategy so they are not wasting effort acquiring customers that, in turn, waste the effort of other teams. Reactivation MRR: Reactivation is a great metric to tie back to the marketing team if they have a hand in nurturing cancelled accounts, keeping them warm, and bringing them back around. This can be done through email marketing, sending both content newsletters and also relevant product announcements. Customer Success Expansion MRR: The connection here is pretty straightforward. A main objective of the Customer Success team is to expand the existing portfolio of business through upgrades and add-ons. As such Expansion MRR is most directly tied to this team. And as the SaaS company grows and expansion MRR becomes the engine of the business, it’s important for the team to keep a clear eye on this segment of the metric. Contraction MRR: The other main objective of Customer Success is to keep revenue from leaking out of the business. Contraction MRR is a good indication of the customer success team’s ability to prevent shrinking account sizes and service downgrades. Churn MRR: The connection between Customer Success and Churn MRR is also clear. In the same vein as Contraction MRR, Churn is Customer Success’s enemy #1. Churn overtime reflects on the team’s ability to keep customers satisfied and on board, but any temporary spikes or waves in cancellations could likely reflect back on marketing or sales — whether the lead was qualified and whether expectations were properly set before the deal was closed. Product & Engineering When it comes to Monthly Recurring Revenue, you can measure Product directly on two fronts: New Business and Retention. The engineering team’s effort plays into these as well. New business MRR: New business can be tied back to new product features that are meant to target new markets. If you’re e-commerce, new business can be generated by new site capabilities or new UX flows that simplify and smoothen the shopping/buying process. Churn MRR: Churn could be tied to performance issues within the product, and thus the Product team’s ability to launch features that run smoothly and release timely, thorough fixes. “It’s always important to know reasons for Churn. Bugs are the ones that impact Product most.” – Vinay Seshadri, Director of Product at ChartMogul The flipside of Churn, retention, also comes into play here. Retained MRR, or just retention rate, could be attributed to product features meant to increase user engagement and deliver more value to the customers. “Being able tag your MRR reports with Product events (like a new release) helps accurately attribute MRR to product changes.” – Vinay On that note… If you’re using an analytics tool, or are in the market for one, check to see that it has the ability to segment your data, particularly the ability to add custom tags. This feature is helpful beyond just product events. For example, you can tag accounts with the name of the sales rep who closed the deal. Then later, segment your MRR data by sales rep to easily monitor individual performance. Another helpful feature in an analytics tool is cohort analysis, which reveals trends in your customer base over their life cycle. That spike in cancellations I mentioned? Cohort analysis can determine whether those customers came on board in one particular month, making it easier to review best practices and move forward. Other ways to foster data throughout the team Give team members access to the data. Personal dashboards, a mounted screen in the office, or even handwriting on a white board — display the latest MRR numbers. At ChartMogul we use our own “MRR in the last 30 days” chart. It updates in real time and is available to the whole company through our app’s dashboard. From ChartMogul: This chart shows MRR broken out by plan. Send routine updates. Particularly if you have remote teams, it’s helpful to have these numbers recorded. The frequency is up to you — weekly, biweekly or monthly. Oral KPI updates, like in meetings, can often go in one ear and out the other. With this email, the numbers are physically in front of everyone, and people can refer back to it if need be. Reflect on the numbers as a team. When MRR goals are reached, celebrate! When goals are missed, discuss reasons why. Not only does this cultivate further understanding of the metric and one’s role in it, but reflection also informs the game plan for moving forward. Decisions become transparent — and everyone not only understands the decisions, but feels a part of the decision-making process. Then when next steps are clear, everyone is aligned to move forward. </sys

How ChartMogul helps Sellbrite optimize their SaaS pricing. The perpetual pricing dilemma Designing and defining the pricing for your SaaS product may be one of the most difficult aspects of building a subscription business. “What should I charge?” is a tough question to answer, but that doesn’t cover even half of it… there are many similar questions on the road to defining subscription pricing, including: Should my pricing scale? By what metric should my pricing scale? How many plans should I offer? How do I cater for high-ASP businesses as well as low-ASP? Introducing Sellbrite Sellbrite is a SaaS platform for online retailers and brands looking to manage a multi-channel strategy — typically selling on their own branded web store, plus on one or more marketplaces like Amazon, eBay, Etsy etc. The product helps simplify managing, building and growing that business strategy by tying together the inventory and orders into one interface, automating a lot of common tasks like syncing inventory between channels. Like many founder stories, they got started because they were solving their own pain point. I sat down with CEO Brian Nolan to dig a little deeper. Sellbrite Co-Founders Brian Nolan (CEO) and Michael Ugino (CMO). Co-Founders Brian and Michael were working at a top online retailer at the time, Brian tells me, on a typically beautiful winter morning from the company’s HQ in the heart of Old Pasadena. The area is home to the original tech scene of Los Angeles, before everyone decided to move down to the beaches of Venice and Santa Monica. Brian ran the multi-channel division of the retailer, and saw it grow from almost nothing to over $20M on external channels alone. But multi-channel at the time was incredibly hard to manage. Although there were some solutions available, none matched Brian’s criteria of being affordable, not asking for a percentage of revenue and using modern tech and design techniques. Sellbrite was founded on a key belief: that selling across multiple channel would become critical to e-commerce success. “At one point it was a nice-to-have — sell on Amazon and make a bit extra. Now it’s a requirement to have your products everywhere your customers are shopping… if you don’t have your products there, your competitors are going to have products there and will get the sale.” The company started out under the experienced direction of Bill Gross’s Idealab, the longest-running tech incubator (since 1996!). Idealab played a huge part in tech growth in the Pasadena area over the years. Price-value alignment is hard “The SaaS model was obvious from the start, we knew we wanted to do that. What took a bit of time for us was to figure out the right pricing model.” Initially, Sellbrite launched with five different plans that were primarily based on the number of products (or SKUs) that the retailer had, and the number of channels they were selling them on. After some time, they shifted their focus up-market, where the more sophisticated, well-established customer existed. But the team found that their original pricing structure wasn’t going to be the best fit for this. What the Sellbrite team were looking for here — and what many subscription businesses endlessly debate — is the pricing model that made the price point aligned to the success of the client’s business. This is the holy grail of pricing design and enables the “if you’re succeeding, we’re succeeding” kind of positive feedback loop that so many are striving for. Sellbrite offers a central place to manage inventory across all of the big e-commerce platforms like Amazon, eBay etc. It was clear that scaling the pricing by number of SKUs wasn’t a great fit at all. They were seeing clients come to them with 1000s of SKUs, like apparel companies with multiple sizes, colors and other variations of each product line. For these clients, the product was expensive, which didn’t match with the low-margin, low-volume business they ran. On the flip side, they had clients with just 10 SKUs paying very little for the product, but killing it with over 50K orders per month! It just didn’t align. “What we found is that the small businesses don’t like paying a percentage of revenue, which some of our competitors do. Even if they end up paying the same amount of money… If it’s a percentage of revenue, they feel like you’re taking money from them, versus them paying you for something they find value in.” Enter ChartMogul According to Brian, ChartMogul was an obvious choice for Sellbrite fairly early on in the company’s existence. It serves as the central point for measuring and understanding revenue as well as taking action on specific changes to the product or pricing. With ChartMogul, they track: Monthly recurring revenue (MRR) MRR movements, for tracking month-to-month changes Net MRR churn Customer churn rate Trial-to-paid conversion rate Cash flow The team takes care to track every aspect of their revenue inside ChartMogul, as well as any one-time purchases available in the product: “In addition to pure subscription [recurring] revenue, customers can buy shipping labels so we have a non-recurring cash flow here too, which is really nice.” Analyzing pricing changes with ChartMogul At the beginning of 2017, Sellbrite switched away from the per-SKU pricing model discussed above, to a new model that more closely reflects the value for clients. The new model scales based on order volume, so clients seeing a huge volume of orders will pay more for the service. The Sellbrite pricing page does a great job of conveying the product’s scalable pricing. As many SaaS businesses find, the pursuit of a truly perfect price-value alignment is looking for something that just doesn’t exist — the best result is generally finding a model that’s the best possible fit for the product. “It’s still not a perfect alignment necessarily — you could be selling expensive jewellery with high revenue, but shipping far fewer orders per month — but it’s more closely aligned with the success of the company.” Because of this, the team are always looking to analyze and optimize pricing based on the data they have access to. In Sellbrite’s case, this is possible using segmentation in ChartMogul. Brian has set up segments for: Customers that were grandfathered in from the old pricing model Customers that are on the new pricing model He compares these segments to track metrics like Churn rate, net MRR expansion and other aspects that indicate the effectiveness of their new pricing. Sellbrite is constantly testing their pricing to find the optimal fit for both the customers and the company, according to Brian, so expect to see updates in the future as they learn more from ChartMogul! Take control of your SaaS pricing with ChartMogul To understand how you can use ChartMogul to better measure, understand and grow your SaaS business, start your free trial at chartmogul.com or get in touch at [email protected]. Thanks to Brian and the team at Sellbrite for letting me drop by their inspiring headquarters!

[INST] How ChartMogul helps Sellbrite optimize their SaaS pricing [/INST]

The perpetual pricing dilemma Designing and defining the pricing for your SaaS product may be one of the most difficult aspects of building a subscription business. “What should I charge?” is a tough question to answer, but that doesn’t cover even half of it… there are many similar questions on the road to defining subscription pricing, including: Should my pricing scale? By what metric should my pricing scale? How many plans should I offer? How do I cater for high-ASP businesses as well as low-ASP? Introducing Sellbrite Sellbrite is a SaaS platform for online retailers and brands looking to manage a multi-channel strategy — typically selling on their own branded web store, plus on one or more marketplaces like Amazon, eBay, Etsy etc. The product helps simplify managing, building and growing that business strategy by tying together the inventory and orders into one interface, automating a lot of common tasks like syncing inventory between channels. Like many founder stories, they got started because they were solving their own pain point. I sat down with CEO Brian Nolan to dig a little deeper. Sellbrite Co-Founders Brian Nolan (CEO) and Michael Ugino (CMO). Co-Founders Brian and Michael were working at a top online retailer at the time, Brian tells me, on a typically beautiful winter morning from the company’s HQ in the heart of Old Pasadena. The area is home to the original tech scene of Los Angeles, before everyone decided to move down to the beaches of Venice and Santa Monica. Brian ran the multi-channel division of the retailer, and saw it grow from almost nothing to over $20M on external channels alone. But multi-channel at the time was incredibly hard to manage. Although there were some solutions available, none matched Brian’s criteria of being affordable, not asking for a percentage of revenue and using modern tech and design techniques. Sellbrite was founded on a key belief: that selling across multiple channel would become critical to e-commerce success. “At one point it was a nice-to-have — sell on Amazon and make a bit extra. Now it’s a requirement to have your products everywhere your customers are shopping… if you don’t have your products there, your competitors are going to have products there and will get the sale.” The company started out under the experienced direction of Bill Gross’s Idealab, the longest-running tech incubator (since 1996!). Idealab played a huge part in tech growth in the Pasadena area over the years. Price-value alignment is hard “The SaaS model was obvious from the start, we knew we wanted to do that. What took a bit of time for us was to figure out the right pricing model.” Initially, Sellbrite launched with five different plans that were primarily based on the number of products (or SKUs) that the retailer had, and the number of channels they were selling them on. After some time, they shifted their focus up-market, where the more sophisticated, well-established customer existed. But the team found that their original pricing structure wasn’t going to be the best fit for this. What the Sellbrite team were looking for here — and what many subscription businesses endlessly debate — is the pricing model that made the price point aligned to the success of the client’s business. This is the holy grail of pricing design and enables the “if you’re succeeding, we’re succeeding” kind of positive feedback loop that so many are striving for. Sellbrite offers a central place to manage inventory across all of the big e-commerce platforms like Amazon, eBay etc. It was clear that scaling the pricing by number of SKUs wasn’t a great fit at all. They were seeing clients come to them with 1000s of SKUs, like apparel companies with multiple sizes, colors and other variations of each product line. For these clients, the product was expensive, which didn’t match with the low-margin, low-volume business they ran. On the flip side, they had clients with just 10 SKUs paying very little for the product, but killing it with over 50K orders per month! It just didn’t align. “What we found is that the small businesses don’t like paying a percentage of revenue, which some of our competitors do. Even if they end up paying the same amount of money… If it’s a percentage of revenue, they feel like you’re taking money from them, versus them paying you for something they find value in.” Enter ChartMogul According to Brian, ChartMogul was an obvious choice for Sellbrite fairly early on in the company’s existence. It serves as the central point for measuring and understanding revenue as well as taking action on specific changes to the product or pricing. With ChartMogul, they track: Monthly recurring revenue (MRR) MRR movements, for tracking month-to-month changes Net MRR churn Customer churn rate Trial-to-paid conversion rate Cash flow The team takes care to track every aspect of their revenue inside ChartMogul, as well as any one-time purchases available in the product: “In addition to pure subscription [recurring] revenue, customers can buy shipping labels so we have a non-recurring cash flow here too, which is really nice.” Analyzing pricing changes with ChartMogul At the beginning of 2017, Sellbrite switched away from the per-SKU pricing model discussed above, to a new model that more closely reflects the value for clients. The new model scales based on order volume, so clients seeing a huge volume of orders will pay more for the service. The Sellbrite pricing page does a great job of conveying the product’s scalable pricing. As many SaaS businesses find, the pursuit of a truly perfect price-value alignment is looking for something that just doesn’t exist — the best result is generally finding a model that’s the best possible fit for the product. “It’s still not a perfect alignment necessarily — you could be selling expensive jewellery with high revenue, but shipping far fewer orders per month — but it’s more closely aligned with the success of the company.” Because of this, the team are always looking to analyze and optimize pricing based on the data they have access to. In Sellbrite’s case, this is possible using segmentation in ChartMogul. Brian has set up segments for: Customers that were grandfathered in from the old pricing model Customers that are on the new pricing model He compares these segments to track metrics like Churn rate, net MRR expansion and other aspects that indicate the effectiveness of their new pricing. Sellbrite is constantly testing their pricing to find the optimal fit for both the customers and the company, according to Brian, so expect to see updates in the future as they learn more from ChartMogul! Take control of your SaaS pricing with ChartMogul To understand how you can use ChartMogul to better measure, understand and grow your SaaS business, start your free trial at chartmogul.com or get in touch at [email protected]. Thanks to Brian and the team at Sellbrite for letting me drop by their inspiring headquarters!

<sys> [INST] How ChartMogul helps Sellbrite optimize their SaaS pricing [/INST] The perpetual pricing dilemma Designing and defining the pricing for your SaaS product may be one of the most difficult aspects of building a subscription business. “What should I charge?” is a tough question to answer, but that doesn’t cover even half of it… there are many similar questions on the road to defining subscription pricing, including: Should my pricing scale? By what metric should my pricing scale? How many plans should I offer? How do I cater for high-ASP businesses as well as low-ASP? Introducing Sellbrite Sellbrite is a SaaS platform for online retailers and brands looking to manage a multi-channel strategy — typically selling on their own branded web store, plus on one or more marketplaces like Amazon, eBay, Etsy etc. The product helps simplify managing, building and growing that business strategy by tying together the inventory and orders into one interface, automating a lot of common tasks like syncing inventory between channels. Like many founder stories, they got started because they were solving their own pain point. I sat down with CEO Brian Nolan to dig a little deeper. Sellbrite Co-Founders Brian Nolan (CEO) and Michael Ugino (CMO). Co-Founders Brian and Michael were working at a top online retailer at the time, Brian tells me, on a typically beautiful winter morning from the company’s HQ in the heart of Old Pasadena. The area is home to the original tech scene of Los Angeles, before everyone decided to move down to the beaches of Venice and Santa Monica. Brian ran the multi-channel division of the retailer, and saw it grow from almost nothing to over $20M on external channels alone. But multi-channel at the time was incredibly hard to manage. Although there were some solutions available, none matched Brian’s criteria of being affordable, not asking for a percentage of revenue and using modern tech and design techniques. Sellbrite was founded on a key belief: that selling across multiple channel would become critical to e-commerce success. “At one point it was a nice-to-have — sell on Amazon and make a bit extra. Now it’s a requirement to have your products everywhere your customers are shopping… if you don’t have your products there, your competitors are going to have products there and will get the sale.” The company started out under the experienced direction of Bill Gross’s Idealab, the longest-running tech incubator (since 1996!). Idealab played a huge part in tech growth in the Pasadena area over the years. Price-value alignment is hard “The SaaS model was obvious from the start, we knew we wanted to do that. What took a bit of time for us was to figure out the right pricing model.” Initially, Sellbrite launched with five different plans that were primarily based on the number of products (or SKUs) that the retailer had, and the number of channels they were selling them on. After some time, they shifted their focus up-market, where the more sophisticated, well-established customer existed. But the team found that their original pricing structure wasn’t going to be the best fit for this. What the Sellbrite team were looking for here — and what many subscription businesses endlessly debate — is the pricing model that made the price point aligned to the success of the client’s business. This is the holy grail of pricing design and enables the “if you’re succeeding, we’re succeeding” kind of positive feedback loop that so many are striving for. Sellbrite offers a central place to manage inventory across all of the big e-commerce platforms like Amazon, eBay etc. It was clear that scaling the pricing by number of SKUs wasn’t a great fit at all. They were seeing clients come to them with 1000s of SKUs, like apparel companies with multiple sizes, colors and other variations of each product line. For these clients, the product was expensive, which didn’t match with the low-margin, low-volume business they ran. On the flip side, they had clients with just 10 SKUs paying very little for the product, but killing it with over 50K orders per month! It just didn’t align. “What we found is that the small businesses don’t like paying a percentage of revenue, which some of our competitors do. Even if they end up paying the same amount of money… If it’s a percentage of revenue, they feel like you’re taking money from them, versus them paying you for something they find value in.” Enter ChartMogul According to Brian, ChartMogul was an obvious choice for Sellbrite fairly early on in the company’s existence. It serves as the central point for measuring and understanding revenue as well as taking action on specific changes to the product or pricing. With ChartMogul, they track: Monthly recurring revenue (MRR) MRR movements, for tracking month-to-month changes Net MRR churn Customer churn rate Trial-to-paid conversion rate Cash flow The team takes care to track every aspect of their revenue inside ChartMogul, as well as any one-time purchases available in the product: “In addition to pure subscription [recurring] revenue, customers can buy shipping labels so we have a non-recurring cash flow here too, which is really nice.” Analyzing pricing changes with ChartMogul At the beginning of 2017, Sellbrite switched away from the per-SKU pricing model discussed above, to a new model that more closely reflects the value for clients. The new model scales based on order volume, so clients seeing a huge volume of orders will pay more for the service. The Sellbrite pricing page does a great job of conveying the product’s scalable pricing. As many SaaS businesses find, the pursuit of a truly perfect price-value alignment is looking for something that just doesn’t exist — the best result is generally finding a model that’s the best possible fit for the product. “It’s still not a perfect alignment necessarily — you could be selling expensive jewellery with high revenue, but shipping far fewer orders per month — but it’s more closely aligned with the success of the company.” Because of this, the team are always looking to analyze and optimize pricing based on the data they have access to. In Sellbrite’s case, this is possible using segmentation in ChartMogul. Brian has set up segments for: Customers that were grandfathered in from the old pricing model Customers that are on the new pricing model He compares these segments to track metrics like Churn rate, net MRR expansion and other aspects that indicate the effectiveness of their new pricing. Sellbrite is constantly testing their pricing to find the optimal fit for both the customers and the company, according to Brian, so expect to see updates in the future as they learn more from ChartMogul! Take control of your SaaS pricing with ChartMogul To understand how you can use ChartMogul to better measure, understand and grow your SaaS business, start your free trial at chartmogul.com or get in touch at [email protected]. Thanks to Brian and the team at Sellbrite for letting me drop by their inspiring headquarters! </sys

The ChartMogul 2017 year in review. January We kicked off 2017 by announcing our integration with GoCardless. This allowed GoCardless customers to import their billing data to ChartMogul and start analyzing customers and revenue. On our blog we also explored the topic of moving up market in SaaS and how businesses might tackle this without losing their soul. February February in the SaaS world means one thing: The SaaStr Annual conference. This year ChartMogul hosted a SaaStr Bingo Party — a joint event with Point Nine Capital: Also with February’s product update, ChartMogul customers were given flexibility of choice between line, bar or stacked area charts like this one: Also: We launched two client libraries for developers: Python and GO March In March we were proud to share the story of ghost — specifically how the non-profit publishing platform is using ChartMogul to publicly share its metrics and growth: “When just getting started, with limited money in the bank and not yet profitable, metrics were everything. Life or death.” ~ John O’Nolan, CEO of Ghost Also: We published a follow-up to our most popular blog post of all time: SaaS landing pages in 2017: Our analysis of 100+ top businesses We launched an integration with Visible and an add-on for WHCMS April April saw the launch of our Zuora integration! For the first time, Zuora customers could connect their data to ChartMogul. Also: We explored what a $4K DSLR can teach you about SaaS onboarding We shared an in-depth discussion about API-based SaaS with Zapier CEO Wade Foster May In may we spoke to Arun Mani, MD of Continental Europe for Freshworks (formerly Freshdesk). Arun shared his insights into expanding a SaaS business into Europe, as well as his philosophy on personal growth and development. Read more here. https://soundcloud.com/chartmogul/arun-mani-freshdesk Also: We highlighted a growing problem with data literacy in business, with the post The data literacy shortfall: Are we data-driven, or data-duped? June How we measure content at ChartMogul saw us share our philosophy towards content marketing at ChartMogul, particularly how we measure the success of content. Also: We continued our campaign for better data literacy in business, with The Ultimate Data Literacy Cheat Sheet. As always, you can download it for free from our resources page! July I revisited my original 2015 analysis of SaaS pricing pages with the post B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses. This analysis was even bigger, covering over 100 pricing pages from SaaS businesses of all shapes and sizes. Also: We announced our partnership and integration with Brazilian payment platform Vindi David Cancel, CEO of Drift chatted to us about his product-focused vision for chat bots, metrics and mentorship in the SaaS industry August ChartMogul Founder and CEO Nick Franklin shared some updated thoughts on Berlin as a home for SaaS startups, after originally sharing his impressions 3 years prior. Check out Starting a SaaS in Berlin – 3 years in. On the product side, we began the rollout of a large backend project to improve performance of ChartMogul at scale, leading to a performance increase of 500x for a lot of charts! Also: We joined the discussion on all-in-one SaaS platforms, and whether they’re truly compatible with SMBs September By most measurements, September was the busiest month of the year. First of all, we released ChartMogul revenue recognition! We were excited to get this into the hands of finance teams, letting them save countless hours preparing income statements and giving them a real-time view of GAAP revenues. Secondly, the team was in Dublin for the SaaStock 2017 conference. See our photo journal here, and a transcript of my talk, How to build a highly-engaged SaaS audience. Finally, the team managed to escape for a few days next to a lake in rural Germany for a company offsite. What an awesome way to recharge… and pick up some painful bruises, thanks to various competitive sports: October We published a profile of Mac app subscription service SetApp who’s aiming to fill a gap in support for consumer subscriptions on Apple’s platform. Read How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions We also launched our guide to SaaS revenue recognition under the new ASC 606 guidelines which take effect in 2018. November November was a big one for both us and our customers. Firstly, we announced a new round of funding to help us build out our plans for ChartMogul in 2018 and beyond. Then, we launched the ability to manually edit MRR data in ChartMogul! Also: We announced our integration with Billforward We took a look at the rise in bootstrapped SaaS startups in Bootstrappers: SaaS startups finding their own route to $1M+ ARR December In December our weekly newsletter SaaS Roundup saw its 100th edition — a great time to take a look back at some learnings in the post What I’ve learned sending 100 weekly newsletters. How ChartMogul helps Sellbrite optimize their SaaS pricing From the entire team at ChartMogul, we wish all of you a joyful and relaxing holiday season. See you in the new year!

[INST] The ChartMogul 2017 year in review [/INST]

January We kicked off 2017 by announcing our integration with GoCardless. This allowed GoCardless customers to import their billing data to ChartMogul and start analyzing customers and revenue. On our blog we also explored the topic of moving up market in SaaS and how businesses might tackle this without losing their soul. February February in the SaaS world means one thing: The SaaStr Annual conference. This year ChartMogul hosted a SaaStr Bingo Party — a joint event with Point Nine Capital: Also with February’s product update, ChartMogul customers were given flexibility of choice between line, bar or stacked area charts like this one: Also: We launched two client libraries for developers: Python and GO March In March we were proud to share the story of ghost — specifically how the non-profit publishing platform is using ChartMogul to publicly share its metrics and growth: “When just getting started, with limited money in the bank and not yet profitable, metrics were everything. Life or death.” ~ John O’Nolan, CEO of Ghost Also: We published a follow-up to our most popular blog post of all time: SaaS landing pages in 2017: Our analysis of 100+ top businesses We launched an integration with Visible and an add-on for WHCMS April April saw the launch of our Zuora integration! For the first time, Zuora customers could connect their data to ChartMogul. Also: We explored what a $4K DSLR can teach you about SaaS onboarding We shared an in-depth discussion about API-based SaaS with Zapier CEO Wade Foster May In may we spoke to Arun Mani, MD of Continental Europe for Freshworks (formerly Freshdesk). Arun shared his insights into expanding a SaaS business into Europe, as well as his philosophy on personal growth and development. Read more here. https://soundcloud.com/chartmogul/arun-mani-freshdesk Also: We highlighted a growing problem with data literacy in business, with the post The data literacy shortfall: Are we data-driven, or data-duped? June How we measure content at ChartMogul saw us share our philosophy towards content marketing at ChartMogul, particularly how we measure the success of content. Also: We continued our campaign for better data literacy in business, with The Ultimate Data Literacy Cheat Sheet. As always, you can download it for free from our resources page! July I revisited my original 2015 analysis of SaaS pricing pages with the post B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses. This analysis was even bigger, covering over 100 pricing pages from SaaS businesses of all shapes and sizes. Also: We announced our partnership and integration with Brazilian payment platform Vindi David Cancel, CEO of Drift chatted to us about his product-focused vision for chat bots, metrics and mentorship in the SaaS industry August ChartMogul Founder and CEO Nick Franklin shared some updated thoughts on Berlin as a home for SaaS startups, after originally sharing his impressions 3 years prior. Check out Starting a SaaS in Berlin – 3 years in. On the product side, we began the rollout of a large backend project to improve performance of ChartMogul at scale, leading to a performance increase of 500x for a lot of charts! Also: We joined the discussion on all-in-one SaaS platforms, and whether they’re truly compatible with SMBs September By most measurements, September was the busiest month of the year. First of all, we released ChartMogul revenue recognition! We were excited to get this into the hands of finance teams, letting them save countless hours preparing income statements and giving them a real-time view of GAAP revenues. Secondly, the team was in Dublin for the SaaStock 2017 conference. See our photo journal here, and a transcript of my talk, How to build a highly-engaged SaaS audience. Finally, the team managed to escape for a few days next to a lake in rural Germany for a company offsite. What an awesome way to recharge… and pick up some painful bruises, thanks to various competitive sports: October We published a profile of Mac app subscription service SetApp who’s aiming to fill a gap in support for consumer subscriptions on Apple’s platform. Read How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions We also launched our guide to SaaS revenue recognition under the new ASC 606 guidelines which take effect in 2018. November November was a big one for both us and our customers. Firstly, we announced a new round of funding to help us build out our plans for ChartMogul in 2018 and beyond. Then, we launched the ability to manually edit MRR data in ChartMogul! Also: We announced our integration with Billforward We took a look at the rise in bootstrapped SaaS startups in Bootstrappers: SaaS startups finding their own route to $1M+ ARR December In December our weekly newsletter SaaS Roundup saw its 100th edition — a great time to take a look back at some learnings in the post What I’ve learned sending 100 weekly newsletters. How ChartMogul helps Sellbrite optimize their SaaS pricing From the entire team at ChartMogul, we wish all of you a joyful and relaxing holiday season. See you in the new year!

<sys> [INST] The ChartMogul 2017 year in review [/INST] January We kicked off 2017 by announcing our integration with GoCardless. This allowed GoCardless customers to import their billing data to ChartMogul and start analyzing customers and revenue. On our blog we also explored the topic of moving up market in SaaS and how businesses might tackle this without losing their soul. February February in the SaaS world means one thing: The SaaStr Annual conference. This year ChartMogul hosted a SaaStr Bingo Party — a joint event with Point Nine Capital: Also with February’s product update, ChartMogul customers were given flexibility of choice between line, bar or stacked area charts like this one: Also: We launched two client libraries for developers: Python and GO March In March we were proud to share the story of ghost — specifically how the non-profit publishing platform is using ChartMogul to publicly share its metrics and growth: “When just getting started, with limited money in the bank and not yet profitable, metrics were everything. Life or death.” ~ John O’Nolan, CEO of Ghost Also: We published a follow-up to our most popular blog post of all time: SaaS landing pages in 2017: Our analysis of 100+ top businesses We launched an integration with Visible and an add-on for WHCMS April April saw the launch of our Zuora integration! For the first time, Zuora customers could connect their data to ChartMogul. Also: We explored what a $4K DSLR can teach you about SaaS onboarding We shared an in-depth discussion about API-based SaaS with Zapier CEO Wade Foster May In may we spoke to Arun Mani, MD of Continental Europe for Freshworks (formerly Freshdesk). Arun shared his insights into expanding a SaaS business into Europe, as well as his philosophy on personal growth and development. Read more here. https://soundcloud.com/chartmogul/arun-mani-freshdesk Also: We highlighted a growing problem with data literacy in business, with the post The data literacy shortfall: Are we data-driven, or data-duped? June How we measure content at ChartMogul saw us share our philosophy towards content marketing at ChartMogul, particularly how we measure the success of content. Also: We continued our campaign for better data literacy in business, with The Ultimate Data Literacy Cheat Sheet. As always, you can download it for free from our resources page! July I revisited my original 2015 analysis of SaaS pricing pages with the post B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses. This analysis was even bigger, covering over 100 pricing pages from SaaS businesses of all shapes and sizes. Also: We announced our partnership and integration with Brazilian payment platform Vindi David Cancel, CEO of Drift chatted to us about his product-focused vision for chat bots, metrics and mentorship in the SaaS industry August ChartMogul Founder and CEO Nick Franklin shared some updated thoughts on Berlin as a home for SaaS startups, after originally sharing his impressions 3 years prior. Check out Starting a SaaS in Berlin – 3 years in. On the product side, we began the rollout of a large backend project to improve performance of ChartMogul at scale, leading to a performance increase of 500x for a lot of charts! Also: We joined the discussion on all-in-one SaaS platforms, and whether they’re truly compatible with SMBs September By most measurements, September was the busiest month of the year. First of all, we released ChartMogul revenue recognition! We were excited to get this into the hands of finance teams, letting them save countless hours preparing income statements and giving them a real-time view of GAAP revenues. Secondly, the team was in Dublin for the SaaStock 2017 conference. See our photo journal here, and a transcript of my talk, How to build a highly-engaged SaaS audience. Finally, the team managed to escape for a few days next to a lake in rural Germany for a company offsite. What an awesome way to recharge… and pick up some painful bruises, thanks to various competitive sports: October We published a profile of Mac app subscription service SetApp who’s aiming to fill a gap in support for consumer subscriptions on Apple’s platform. Read How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions We also launched our guide to SaaS revenue recognition under the new ASC 606 guidelines which take effect in 2018. November November was a big one for both us and our customers. Firstly, we announced a new round of funding to help us build out our plans for ChartMogul in 2018 and beyond. Then, we launched the ability to manually edit MRR data in ChartMogul! Also: We announced our integration with Billforward We took a look at the rise in bootstrapped SaaS startups in Bootstrappers: SaaS startups finding their own route to $1M+ ARR December In December our weekly newsletter SaaS Roundup saw its 100th edition — a great time to take a look back at some learnings in the post What I’ve learned sending 100 weekly newsletters. How ChartMogul helps Sellbrite optimize their SaaS pricing From the entire team at ChartMogul, we wish all of you a joyful and relaxing holiday season. See you in the new year! </sys

🚀 SaaS Roundup #125. In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. SMB SaaS and Net Negative Churn Gaurav Makkar, Endurance The Q1 cohort performance of Wix, one example used in the post. “companies need to identify and execute on net negative churn strategies that will resonate the most with value proposition of their products. After all, it’s much easier to make money of an existing customer who understands the value of your product than being constantly under pressure to get new customers through the door.” Churn is generally far higher in SMB SaaS than in enterprise. This post summarizes the strategies used by four SMB SaaS companies to counterbalance revenue churn with healthy revenue expansion, resulting in an overall net negative churn rate. Expanding your startup to the U.S.? Read this first Scott Maxwell, OpenView (writing for SaaStock) “Companies that come from a culture that is similar to the U.S. but smaller have a big advantage. Markets like Northern Europe, Australia/New Zealand or Canada fit that description because English is widely spoken, tech is widespread and there is a level of affluence that rivals or exceeds the U.S.” As Scott writes, the ability to succeed in the highly-competitive and expansive US market is often seen as a form validation for a foreign startup. There are plenty of examples of businesses failing to succeed at this though — and he outlines a few of them here, along with the major tripping points. How Zendesk’s Jaimie Buss is able to forecast revenue within 1% (at a $500 million company) Collin Stewart, Predictable Revenue “What you need on top of the sales process is a qualification methodology because qualification runs through all of this. The sales process is all about the customer verifiable outcome. They’ve told us we’ve won, or they’ve told us we won technically” This post really pulls back the curtain on how Zendesk’s VP of North American Sales approaches revenue forecasts! There are definitely elements of this that could be repurposed in your own business to improve forecasting accuracy. That’s all for this week! Don’t forget you can still get upcoming issues of SaaS Roundup delivered straight to your email inbox. See you next Friday.

[INST] 🚀 SaaS Roundup #125 [/INST]

In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. SMB SaaS and Net Negative Churn Gaurav Makkar, Endurance The Q1 cohort performance of Wix, one example used in the post. “companies need to identify and execute on net negative churn strategies that will resonate the most with value proposition of their products. After all, it’s much easier to make money of an existing customer who understands the value of your product than being constantly under pressure to get new customers through the door.” Churn is generally far higher in SMB SaaS than in enterprise. This post summarizes the strategies used by four SMB SaaS companies to counterbalance revenue churn with healthy revenue expansion, resulting in an overall net negative churn rate. Expanding your startup to the U.S.? Read this first Scott Maxwell, OpenView (writing for SaaStock) “Companies that come from a culture that is similar to the U.S. but smaller have a big advantage. Markets like Northern Europe, Australia/New Zealand or Canada fit that description because English is widely spoken, tech is widespread and there is a level of affluence that rivals or exceeds the U.S.” As Scott writes, the ability to succeed in the highly-competitive and expansive US market is often seen as a form validation for a foreign startup. There are plenty of examples of businesses failing to succeed at this though — and he outlines a few of them here, along with the major tripping points. How Zendesk’s Jaimie Buss is able to forecast revenue within 1% (at a $500 million company) Collin Stewart, Predictable Revenue “What you need on top of the sales process is a qualification methodology because qualification runs through all of this. The sales process is all about the customer verifiable outcome. They’ve told us we’ve won, or they’ve told us we won technically” This post really pulls back the curtain on how Zendesk’s VP of North American Sales approaches revenue forecasts! There are definitely elements of this that could be repurposed in your own business to improve forecasting accuracy. That’s all for this week! Don’t forget you can still get upcoming issues of SaaS Roundup delivered straight to your email inbox. See you next Friday.

<sys> [INST] 🚀 SaaS Roundup #125 [/INST] In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three. You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue. SMB SaaS and Net Negative Churn Gaurav Makkar, Endurance The Q1 cohort performance of Wix, one example used in the post. “companies need to identify and execute on net negative churn strategies that will resonate the most with value proposition of their products. After all, it’s much easier to make money of an existing customer who understands the value of your product than being constantly under pressure to get new customers through the door.” Churn is generally far higher in SMB SaaS than in enterprise. This post summarizes the strategies used by four SMB SaaS companies to counterbalance revenue churn with healthy revenue expansion, resulting in an overall net negative churn rate. Expanding your startup to the U.S.? Read this first Scott Maxwell, OpenView (writing for SaaStock) “Companies that come from a culture that is similar to the U.S. but smaller have a big advantage. Markets like Northern Europe, Australia/New Zealand or Canada fit that description because English is widely spoken, tech is widespread and there is a level of affluence that rivals or exceeds the U.S.” As Scott writes, the ability to succeed in the highly-competitive and expansive US market is often seen as a form validation for a foreign startup. There are plenty of examples of businesses failing to succeed at this though — and he outlines a few of them here, along with the major tripping points. How Zendesk’s Jaimie Buss is able to forecast revenue within 1% (at a $500 million company) Collin Stewart, Predictable Revenue “What you need on top of the sales process is a qualification methodology because qualification runs through all of this. The sales process is all about the customer verifiable outcome. They’ve told us we’ve won, or they’ve told us we won technically” This post really pulls back the curtain on how Zendesk’s VP of North American Sales approaches revenue forecasts! There are definitely elements of this that could be repurposed in your own business to improve forecasting accuracy. That’s all for this week! Don’t forget you can still get upcoming issues of SaaS Roundup delivered straight to your email inbox. See you next Friday. </sys

Churn-informed onboarding and engagement strategies. This week’s blog article comes to us from Steph Knapp in Nashville, Tennessee. You may know Steph from her Zendesk Onboarding Email Breakdown featured in our 2018 SaaS Roundup summary. Steph Knapp is a SaaS copywriter and content marketer. She loves writing about onboarding emails and helping companies guide users to their “a-ha” moments. Ah, churn. Can’t live with it, can’t live without it. Though the term likely makes you shudder, a customer churning isn’t always as unfortunate as you might think. Churn is a natural part of subscription businesses, but it’s everyone’s goal to make it as low as possible. Churn is calculated after a user has left your service, but what if you could use it for a proactive measures instead of reactive tactics? Instead of looking at your churn rate as a whole and shooting in the dark in an attempt to lower it, you can use metrics to upgrade your onboarding and engagement efforts in an organized way. Let’s explore. Pinpointing Churn Red Flags & Engagement Metrics to Find Weak Points Churn on its own is a naturally lagging indicator. After all, that stat doesn’t pop up until after the deed is done. However, your users are sending you red flags that should act as warning signals for impending churn. Here’s how to spot the red flags that will, in turn, help you find the root cause of the issue. Calculate churn risk factors in your business as a whole Let’s start at the top. Start by zooming all the way out and looking at all of your customers together, and the resulting churn. First, keep in mind that not all churn is negative. Believe it or not, there is such an idea as “happy churn” (but we won’t be tackling that in this post). This type of churn occurs when a customer has done what they aimed to do, and leaves satisfied. Some of your churn may also be “passive,” such as when credit cards expire and cause accounts to lapse. For the time being, we’re going to focus on active churn. This is the type that likely comes to mind when you think of churn, and it occurs when a user consciously chooses to leave. More often than not, customers leave because they aren’t gaining proportionate value from your product. It could be that the fit was never there, but churn also stems from disengagement. Think of it like a dusty treadmill in the basement — if you aren’t using it, you won’t reap the benefits. If you don’t reap the benefits, you’ll deem it worthless and sell it in a garage sale. Churn red flags pop up wherever there is a lack or decrease of engagement. Some common churn indicators include: A customer logs in less frequently A customer isn’t using a key feature A customer doesn’t reach out to Support anymore Some of these, such as decreased login activity, are obvious. Others are less so. For example, a customer may stop reaching out to support because they feel so lost or frustrated; it’s easier to throw your hands up and walk away. Want to learn more about tracking these churn indicators? Check out this post. Segment users to find cohort-specific red flags Next, take a more in-depth look at each customer segment. How do churn risk factors vary across segments? For example, do high lifetime value enterprise users exhibit the same warning signs as more casual ad hoc customers? Perhaps users in different roles within their org or those with different end goals engage with your product differently. What’s a normal and healthy engagement level for one user segment may not be right for another group. P.S. If you’d like to learn more about creating and using customer segments to increase retention, you’ll love our Retention 2.0 webinar. Identify gaps in your customer engagement and success strategy After you’ve found the red flags to look out for across all of your customers, you need to shift your attention to what’s happening (or not happening) just before these churn indicators present. Based on the red flags that users display, where might they need help? For example, does engagement drop way off after a certain point in your onboarding experience? Is there a typical time period that users start to lost interest? Is one user segment having a harder time than others? These are the types of questions you’ll have to ask yourself. This is the point in the process in which you need to pinpoint the ailment. Churn and its indicators are the symptoms and side effects of something amiss in your process, and these gaps in customer engagement and success are the root cause. Don’t sweat it if you don’t perfectly uncover the issue on your first try. Experimentation and improvement are much better strategies than taking a single shot. Using Onboarding & Content to Reduce Churn Alright, doc, are you ready to prescribe a cure for churn? The beauty of finding the gaps in customers experience that are resulting in churn is that you can direct your efforts to where it matters most. No more casting a wide net and wasting time and resources; we’re here to pack a punch in a meaningful way. Evaluate current efforts You probably thought we were done analyzing and investigating, but I promise we’re close. With your list of weak points in one hand, you need to compile a list of everything that a customer is seeing (or not seeing) at those points in their journey. This step is critical because you need to determine whether you need to create new or upgrade existing content to support those points. What is your current onboarding and engagement strategy? If you don’t have a plan in place, then your first task is to create one. Armed with your newfound knowledge about churn risk factors, you’ll be able to create a customer success and engagement strategy from scratch that targets problem areas. If you do have an onboarding and engagement strategy, take time to assess each element. Are you highlighting the features that move users closer to their goals, and are you supporting their effort with useful content? Map and list out all of the touchpoints that are currently being used to engage with users. Create or upgrade onboarding emails Next stop — onboarding emails! This is a great place to look to improve if you’re seeing churn risk indicators such as a failure to complete onboarding. Sending consistent and helpful onboarding emails motivates users to get into your app, where they should be getting prompts and support. Make sure that onboarding emails aren’t simply a feature dump. Curate the tools that you’re highlighting and use emails to show the power and results of leveraging them, not just how to use them. Weak onboarding emails could also be to blame for lasting issues, too. Though this is harder to identify, a user that doesn’t get off on the right foot is more likely to churn down the road. This could manifest in the form of users that are past the typical onboarding stage, yet fail to make use of key features. Build up your free resources If onboarding emails propel users into your app and in-app messages get them playing around, then free content helps them see a project through to the end. For example, Shopify doesn’t just give e-commerce business owners a platform. They also provide extensive checklists and guides that detail how to launch and grow their business. If there’s a feature that seems to be a sticking point for users, it may be worthwhile to create better documentation for it. This can mean upgrading blog posts and guides related to the task at hand or presenting information in a new format. It’s also useful to create content that’s relevant for users, even if it relates to tasks beyond your product. A prime example of this is Shopify’s Ultimate Guide to Dropshipping. While Shopify doesn’t supply items to dropship, it’s a project their users may want to take on. Rather than focusing on Shopify features, the guide highlights the possibilities. Additionally, if users aren’t taking advantage of blog post and guides, it might be time to try webinars so that they can see features or strategies in action. In addition to guides, content that shows off the result of using different features can also support users in their journey. Presenting case studies lets users see how other companies in a similar position to theirs solved an issue or tackled a project. Deploy and test After you’ve upgraded your customer onboarding and engagement strategy, you’ll need to regularly check back in to see if it’s done the trick. Using the same churn indicators and problem areas as before, assess whether your new content has helped users after it’s been deployed for a few months. I’ll leave you with a final piece of advice so that you can reduce further churn with the help of upgraded onboarding and content. Make it omnichannel. If you’re using a mix of tactics, such as emails, promoted content, in-app messages, and more, you’ll automatically have a multi-channel engagement strategy. However, that doesn’t mean you’ve reached omnichannel nirvana. All of your messaging and engagements should point users in the same, streamlined direction. Remember to keep customer goals in mind, and use your tools and expertise to illuminate their path.

[INST] Churn-informed onboarding and engagement strategies [/INST]

This week’s blog article comes to us from Steph Knapp in Nashville, Tennessee. You may know Steph from her Zendesk Onboarding Email Breakdown featured in our 2018 SaaS Roundup summary. Steph Knapp is a SaaS copywriter and content marketer. She loves writing about onboarding emails and helping companies guide users to their “a-ha” moments. Ah, churn. Can’t live with it, can’t live without it. Though the term likely makes you shudder, a customer churning isn’t always as unfortunate as you might think. Churn is a natural part of subscription businesses, but it’s everyone’s goal to make it as low as possible. Churn is calculated after a user has left your service, but what if you could use it for a proactive measures instead of reactive tactics? Instead of looking at your churn rate as a whole and shooting in the dark in an attempt to lower it, you can use metrics to upgrade your onboarding and engagement efforts in an organized way. Let’s explore. Pinpointing Churn Red Flags & Engagement Metrics to Find Weak Points Churn on its own is a naturally lagging indicator. After all, that stat doesn’t pop up until after the deed is done. However, your users are sending you red flags that should act as warning signals for impending churn. Here’s how to spot the red flags that will, in turn, help you find the root cause of the issue. Calculate churn risk factors in your business as a whole Let’s start at the top. Start by zooming all the way out and looking at all of your customers together, and the resulting churn. First, keep in mind that not all churn is negative. Believe it or not, there is such an idea as “happy churn” (but we won’t be tackling that in this post). This type of churn occurs when a customer has done what they aimed to do, and leaves satisfied. Some of your churn may also be “passive,” such as when credit cards expire and cause accounts to lapse. For the time being, we’re going to focus on active churn. This is the type that likely comes to mind when you think of churn, and it occurs when a user consciously chooses to leave. More often than not, customers leave because they aren’t gaining proportionate value from your product. It could be that the fit was never there, but churn also stems from disengagement. Think of it like a dusty treadmill in the basement — if you aren’t using it, you won’t reap the benefits. If you don’t reap the benefits, you’ll deem it worthless and sell it in a garage sale. Churn red flags pop up wherever there is a lack or decrease of engagement. Some common churn indicators include: A customer logs in less frequently A customer isn’t using a key feature A customer doesn’t reach out to Support anymore Some of these, such as decreased login activity, are obvious. Others are less so. For example, a customer may stop reaching out to support because they feel so lost or frustrated; it’s easier to throw your hands up and walk away. Want to learn more about tracking these churn indicators? Check out this post. Segment users to find cohort-specific red flags Next, take a more in-depth look at each customer segment. How do churn risk factors vary across segments? For example, do high lifetime value enterprise users exhibit the same warning signs as more casual ad hoc customers? Perhaps users in different roles within their org or those with different end goals engage with your product differently. What’s a normal and healthy engagement level for one user segment may not be right for another group. P.S. If you’d like to learn more about creating and using customer segments to increase retention, you’ll love our Retention 2.0 webinar. Identify gaps in your customer engagement and success strategy After you’ve found the red flags to look out for across all of your customers, you need to shift your attention to what’s happening (or not happening) just before these churn indicators present. Based on the red flags that users display, where might they need help? For example, does engagement drop way off after a certain point in your onboarding experience? Is there a typical time period that users start to lost interest? Is one user segment having a harder time than others? These are the types of questions you’ll have to ask yourself. This is the point in the process in which you need to pinpoint the ailment. Churn and its indicators are the symptoms and side effects of something amiss in your process, and these gaps in customer engagement and success are the root cause. Don’t sweat it if you don’t perfectly uncover the issue on your first try. Experimentation and improvement are much better strategies than taking a single shot. Using Onboarding & Content to Reduce Churn Alright, doc, are you ready to prescribe a cure for churn? The beauty of finding the gaps in customers experience that are resulting in churn is that you can direct your efforts to where it matters most. No more casting a wide net and wasting time and resources; we’re here to pack a punch in a meaningful way. Evaluate current efforts You probably thought we were done analyzing and investigating, but I promise we’re close. With your list of weak points in one hand, you need to compile a list of everything that a customer is seeing (or not seeing) at those points in their journey. This step is critical because you need to determine whether you need to create new or upgrade existing content to support those points. What is your current onboarding and engagement strategy? If you don’t have a plan in place, then your first task is to create one. Armed with your newfound knowledge about churn risk factors, you’ll be able to create a customer success and engagement strategy from scratch that targets problem areas. If you do have an onboarding and engagement strategy, take time to assess each element. Are you highlighting the features that move users closer to their goals, and are you supporting their effort with useful content? Map and list out all of the touchpoints that are currently being used to engage with users. Create or upgrade onboarding emails Next stop — onboarding emails! This is a great place to look to improve if you’re seeing churn risk indicators such as a failure to complete onboarding. Sending consistent and helpful onboarding emails motivates users to get into your app, where they should be getting prompts and support. Make sure that onboarding emails aren’t simply a feature dump. Curate the tools that you’re highlighting and use emails to show the power and results of leveraging them, not just how to use them. Weak onboarding emails could also be to blame for lasting issues, too. Though this is harder to identify, a user that doesn’t get off on the right foot is more likely to churn down the road. This could manifest in the form of users that are past the typical onboarding stage, yet fail to make use of key features. Build up your free resources If onboarding emails propel users into your app and in-app messages get them playing around, then free content helps them see a project through to the end. For example, Shopify doesn’t just give e-commerce business owners a platform. They also provide extensive checklists and guides that detail how to launch and grow their business. If there’s a feature that seems to be a sticking point for users, it may be worthwhile to create better documentation for it. This can mean upgrading blog posts and guides related to the task at hand or presenting information in a new format. It’s also useful to create content that’s relevant for users, even if it relates to tasks beyond your product. A prime example of this is Shopify’s Ultimate Guide to Dropshipping. While Shopify doesn’t supply items to dropship, it’s a project their users may want to take on. Rather than focusing on Shopify features, the guide highlights the possibilities. Additionally, if users aren’t taking advantage of blog post and guides, it might be time to try webinars so that they can see features or strategies in action. In addition to guides, content that shows off the result of using different features can also support users in their journey. Presenting case studies lets users see how other companies in a similar position to theirs solved an issue or tackled a project. Deploy and test After you’ve upgraded your customer onboarding and engagement strategy, you’ll need to regularly check back in to see if it’s done the trick. Using the same churn indicators and problem areas as before, assess whether your new content has helped users after it’s been deployed for a few months. I’ll leave you with a final piece of advice so that you can reduce further churn with the help of upgraded onboarding and content. Make it omnichannel. If you’re using a mix of tactics, such as emails, promoted content, in-app messages, and more, you’ll automatically have a multi-channel engagement strategy. However, that doesn’t mean you’ve reached omnichannel nirvana. All of your messaging and engagements should point users in the same, streamlined direction. Remember to keep customer goals in mind, and use your tools and expertise to illuminate their path.

<sys> [INST] Churn-informed onboarding and engagement strategies [/INST] This week’s blog article comes to us from Steph Knapp in Nashville, Tennessee. You may know Steph from her Zendesk Onboarding Email Breakdown featured in our 2018 SaaS Roundup summary. Steph Knapp is a SaaS copywriter and content marketer. She loves writing about onboarding emails and helping companies guide users to their “a-ha” moments. Ah, churn. Can’t live with it, can’t live without it. Though the term likely makes you shudder, a customer churning isn’t always as unfortunate as you might think. Churn is a natural part of subscription businesses, but it’s everyone’s goal to make it as low as possible. Churn is calculated after a user has left your service, but what if you could use it for a proactive measures instead of reactive tactics? Instead of looking at your churn rate as a whole and shooting in the dark in an attempt to lower it, you can use metrics to upgrade your onboarding and engagement efforts in an organized way. Let’s explore. Pinpointing Churn Red Flags & Engagement Metrics to Find Weak Points Churn on its own is a naturally lagging indicator. After all, that stat doesn’t pop up until after the deed is done. However, your users are sending you red flags that should act as warning signals for impending churn. Here’s how to spot the red flags that will, in turn, help you find the root cause of the issue. Calculate churn risk factors in your business as a whole Let’s start at the top. Start by zooming all the way out and looking at all of your customers together, and the resulting churn. First, keep in mind that not all churn is negative. Believe it or not, there is such an idea as “happy churn” (but we won’t be tackling that in this post). This type of churn occurs when a customer has done what they aimed to do, and leaves satisfied. Some of your churn may also be “passive,” such as when credit cards expire and cause accounts to lapse. For the time being, we’re going to focus on active churn. This is the type that likely comes to mind when you think of churn, and it occurs when a user consciously chooses to leave. More often than not, customers leave because they aren’t gaining proportionate value from your product. It could be that the fit was never there, but churn also stems from disengagement. Think of it like a dusty treadmill in the basement — if you aren’t using it, you won’t reap the benefits. If you don’t reap the benefits, you’ll deem it worthless and sell it in a garage sale. Churn red flags pop up wherever there is a lack or decrease of engagement. Some common churn indicators include: A customer logs in less frequently A customer isn’t using a key feature A customer doesn’t reach out to Support anymore Some of these, such as decreased login activity, are obvious. Others are less so. For example, a customer may stop reaching out to support because they feel so lost or frustrated; it’s easier to throw your hands up and walk away. Want to learn more about tracking these churn indicators? Check out this post. Segment users to find cohort-specific red flags Next, take a more in-depth look at each customer segment. How do churn risk factors vary across segments? For example, do high lifetime value enterprise users exhibit the same warning signs as more casual ad hoc customers? Perhaps users in different roles within their org or those with different end goals engage with your product differently. What’s a normal and healthy engagement level for one user segment may not be right for another group. P.S. If you’d like to learn more about creating and using customer segments to increase retention, you’ll love our Retention 2.0 webinar. Identify gaps in your customer engagement and success strategy After you’ve found the red flags to look out for across all of your customers, you need to shift your attention to what’s happening (or not happening) just before these churn indicators present. Based on the red flags that users display, where might they need help? For example, does engagement drop way off after a certain point in your onboarding experience? Is there a typical time period that users start to lost interest? Is one user segment having a harder time than others? These are the types of questions you’ll have to ask yourself. This is the point in the process in which you need to pinpoint the ailment. Churn and its indicators are the symptoms and side effects of something amiss in your process, and these gaps in customer engagement and success are the root cause. Don’t sweat it if you don’t perfectly uncover the issue on your first try. Experimentation and improvement are much better strategies than taking a single shot. Using Onboarding & Content to Reduce Churn Alright, doc, are you ready to prescribe a cure for churn? The beauty of finding the gaps in customers experience that are resulting in churn is that you can direct your efforts to where it matters most. No more casting a wide net and wasting time and resources; we’re here to pack a punch in a meaningful way. Evaluate current efforts You probably thought we were done analyzing and investigating, but I promise we’re close. With your list of weak points in one hand, you need to compile a list of everything that a customer is seeing (or not seeing) at those points in their journey. This step is critical because you need to determine whether you need to create new or upgrade existing content to support those points. What is your current onboarding and engagement strategy? If you don’t have a plan in place, then your first task is to create one. Armed with your newfound knowledge about churn risk factors, you’ll be able to create a customer success and engagement strategy from scratch that targets problem areas. If you do have an onboarding and engagement strategy, take time to assess each element. Are you highlighting the features that move users closer to their goals, and are you supporting their effort with useful content? Map and list out all of the touchpoints that are currently being used to engage with users. Create or upgrade onboarding emails Next stop — onboarding emails! This is a great place to look to improve if you’re seeing churn risk indicators such as a failure to complete onboarding. Sending consistent and helpful onboarding emails motivates users to get into your app, where they should be getting prompts and support. Make sure that onboarding emails aren’t simply a feature dump. Curate the tools that you’re highlighting and use emails to show the power and results of leveraging them, not just how to use them. Weak onboarding emails could also be to blame for lasting issues, too. Though this is harder to identify, a user that doesn’t get off on the right foot is more likely to churn down the road. This could manifest in the form of users that are past the typical onboarding stage, yet fail to make use of key features. Build up your free resources If onboarding emails propel users into your app and in-app messages get them playing around, then free content helps them see a project through to the end. For example, Shopify doesn’t just give e-commerce business owners a platform. They also provide extensive checklists and guides that detail how to launch and grow their business. If there’s a feature that seems to be a sticking point for users, it may be worthwhile to create better documentation for it. This can mean upgrading blog posts and guides related to the task at hand or presenting information in a new format. It’s also useful to create content that’s relevant for users, even if it relates to tasks beyond your product. A prime example of this is Shopify’s Ultimate Guide to Dropshipping. While Shopify doesn’t supply items to dropship, it’s a project their users may want to take on. Rather than focusing on Shopify features, the guide highlights the possibilities. Additionally, if users aren’t taking advantage of blog post and guides, it might be time to try webinars so that they can see features or strategies in action. In addition to guides, content that shows off the result of using different features can also support users in their journey. Presenting case studies lets users see how other companies in a similar position to theirs solved an issue or tackled a project. Deploy and test After you’ve upgraded your customer onboarding and engagement strategy, you’ll need to regularly check back in to see if it’s done the trick. Using the same churn indicators and problem areas as before, assess whether your new content has helped users after it’s been deployed for a few months. I’ll leave you with a final piece of advice so that you can reduce further churn with the help of upgraded onboarding and content. Make it omnichannel. If you’re using a mix of tactics, such as emails, promoted content, in-app messages, and more, you’ll automatically have a multi-channel engagement strategy. However, that doesn’t mean you’ve reached omnichannel nirvana. All of your messaging and engagements should point users in the same, streamlined direction. Remember to keep customer goals in mind, and use your tools and expertise to illuminate their path. </sys

Tracking Attribution with Ahoy and ChartMogul Segmentation. Introducing Ahoy Ahoy is an open source project developed by Instacart. According to its Github description: Ahoy provides a solid foundation to track visits and events in Ruby, JavaScript, and native apps. I like to think of it as a bit like having the backend of Google Analytics and instead of rendering charts in a UI, it dumps everything into a database of your choosing (we have a dedicated box with PostgreSQL for this purpose). This means that we can more easily access information on our visitors. What do we want to achieve with Ahoy and ChartMogul? Using the data gathered by Ahoy, we can start to track the earliest stages of our user funnel and get a more complete picture on where our customers are coming from (attribution), more specifically tracking the point at which they first come into contact with our brand. Most SaaS businesses today partake in a wide range of marketing activities spread across a large number of platforms on the web. The ability to track how each of these impact the bottom line is critical when optimizing your marketing strategy. I want to be able to answer these 5 questions inside my ChartMogul account: Which discovery sources produce the most paying customers? Which discovery sources produce customers with the highest MRR or LTV? Which landing pages ultimately produce the most paying customers? Which conversion sources produce the most paying customers? Which discovery sources produce customers with the lowest churn rate? It should be quite obvious to anyone working in a marketing or revenue generation role at a subscription business that being able to answer these questions (even ‘somewhat’ accurately) would be extremely valuable. How it’s going to work You embed some JavaScript from Ahoy on your website, just like you do for Google analytics. This JS tracks all the same visitor data that Google Analytics tracks and sends the raw data to the Ahoy application which writes the visitor event data to a database of your choosing. The JS also cookies the user so all data collected is associated with the same person (or at least the same browser/machine). As soon as any visitor signs up for an account (trial, paid, freemium, doesn’t matter), you’ll then want to fire off a webhook from your backend to the Ahoy application informing it that a user has signed up for a free trial – the webhook would collect the Ahoy identifier from the cookie as well as the internal ID of the user account. As soon as that’s done all the previously collected data about the site visitor will be associated with the newly created user account. We can then send the relevant pieces of data to ChartMogul using the Enrichment API, each time time a trial converts to a paying customer – if the visitor doesn’t have a free trial then the feedback loop is even faster and you can associate the visitor data with the customer as soon as they signup. Setting up Ahoy There are three main parts to setting up Ahoy: Setup a separate server and database and install the Ahoy application there. Paste the Ahoy javascript embed into your website’s code. You’ll need to custom code a callback/webhook that will fire each time a visitor signs up on your website and a user account is created. The idea here is to ‘close the loop’ and associate the visitor data that’s being collected by Ahoy with the user account in your database. Pushing Ahoy data to ChartMogul Once you’ve completed the above steps you’ll want to use the ChartMogul Enrichment API to push the relevant bits of data (discovery referrer, discovery landing url and conversion referrer) to your ChartMogul account each time a new customer is added. You will start to see the Ahoy metadata appearing on your customer profiles in ChartMogul: A ChartMogul customer profile, with additional attributes piped in from Ahoy. Segmenting your metrics in ChartMogul using Ahoy data You are now ready to create some very insightful graphs in ChartMogul. Click “Add filter” and setup like this: discovery_referrer contains t.co Once you’ve achieved this setup, you can add further segments that would be interesting to you – and even compare them directly: Comparing different “disovery_referrer” MRR values in ChartMogul Some limitations As always, when tracking and attributing users on the web, you’re always going to run into a set of common issues. People commonly use different devices and browsers on the web, and using cookies to track users across those devices isn’t really feasible. You should bare in mind that the data you get will never be 100% accurate. You’ll end up with some traffic that looks like first-time visits and will actually be users who have, for example, come into contact with your brand on a mobile device and then moved to a desktop browser. With that in mind, it’s clear that the insights you can gain from implementing and using such a system vastly outweighs its drawbacks. Being able to attribute your customers right back to their first touch-point with your brand can answer countless questions and guide your focus and spending when it comes to sales and marketing.

[INST] Tracking Attribution with Ahoy and ChartMogul Segmentation [/INST]

Introducing Ahoy Ahoy is an open source project developed by Instacart. According to its Github description: Ahoy provides a solid foundation to track visits and events in Ruby, JavaScript, and native apps. I like to think of it as a bit like having the backend of Google Analytics and instead of rendering charts in a UI, it dumps everything into a database of your choosing (we have a dedicated box with PostgreSQL for this purpose). This means that we can more easily access information on our visitors. What do we want to achieve with Ahoy and ChartMogul? Using the data gathered by Ahoy, we can start to track the earliest stages of our user funnel and get a more complete picture on where our customers are coming from (attribution), more specifically tracking the point at which they first come into contact with our brand. Most SaaS businesses today partake in a wide range of marketing activities spread across a large number of platforms on the web. The ability to track how each of these impact the bottom line is critical when optimizing your marketing strategy. I want to be able to answer these 5 questions inside my ChartMogul account: Which discovery sources produce the most paying customers? Which discovery sources produce customers with the highest MRR or LTV? Which landing pages ultimately produce the most paying customers? Which conversion sources produce the most paying customers? Which discovery sources produce customers with the lowest churn rate? It should be quite obvious to anyone working in a marketing or revenue generation role at a subscription business that being able to answer these questions (even ‘somewhat’ accurately) would be extremely valuable. How it’s going to work You embed some JavaScript from Ahoy on your website, just like you do for Google analytics. This JS tracks all the same visitor data that Google Analytics tracks and sends the raw data to the Ahoy application which writes the visitor event data to a database of your choosing. The JS also cookies the user so all data collected is associated with the same person (or at least the same browser/machine). As soon as any visitor signs up for an account (trial, paid, freemium, doesn’t matter), you’ll then want to fire off a webhook from your backend to the Ahoy application informing it that a user has signed up for a free trial – the webhook would collect the Ahoy identifier from the cookie as well as the internal ID of the user account. As soon as that’s done all the previously collected data about the site visitor will be associated with the newly created user account. We can then send the relevant pieces of data to ChartMogul using the Enrichment API, each time time a trial converts to a paying customer – if the visitor doesn’t have a free trial then the feedback loop is even faster and you can associate the visitor data with the customer as soon as they signup. Setting up Ahoy There are three main parts to setting up Ahoy: Setup a separate server and database and install the Ahoy application there. Paste the Ahoy javascript embed into your website’s code. You’ll need to custom code a callback/webhook that will fire each time a visitor signs up on your website and a user account is created. The idea here is to ‘close the loop’ and associate the visitor data that’s being collected by Ahoy with the user account in your database. Pushing Ahoy data to ChartMogul Once you’ve completed the above steps you’ll want to use the ChartMogul Enrichment API to push the relevant bits of data (discovery referrer, discovery landing url and conversion referrer) to your ChartMogul account each time a new customer is added. You will start to see the Ahoy metadata appearing on your customer profiles in ChartMogul: A ChartMogul customer profile, with additional attributes piped in from Ahoy. Segmenting your metrics in ChartMogul using Ahoy data You are now ready to create some very insightful graphs in ChartMogul. Click “Add filter” and setup like this: discovery_referrer contains t.co Once you’ve achieved this setup, you can add further segments that would be interesting to you – and even compare them directly: Comparing different “disovery_referrer” MRR values in ChartMogul Some limitations As always, when tracking and attributing users on the web, you’re always going to run into a set of common issues. People commonly use different devices and browsers on the web, and using cookies to track users across those devices isn’t really feasible. You should bare in mind that the data you get will never be 100% accurate. You’ll end up with some traffic that looks like first-time visits and will actually be users who have, for example, come into contact with your brand on a mobile device and then moved to a desktop browser. With that in mind, it’s clear that the insights you can gain from implementing and using such a system vastly outweighs its drawbacks. Being able to attribute your customers right back to their first touch-point with your brand can answer countless questions and guide your focus and spending when it comes to sales and marketing.

<sys> [INST] Tracking Attribution with Ahoy and ChartMogul Segmentation [/INST] Introducing Ahoy Ahoy is an open source project developed by Instacart. According to its Github description: Ahoy provides a solid foundation to track visits and events in Ruby, JavaScript, and native apps. I like to think of it as a bit like having the backend of Google Analytics and instead of rendering charts in a UI, it dumps everything into a database of your choosing (we have a dedicated box with PostgreSQL for this purpose). This means that we can more easily access information on our visitors. What do we want to achieve with Ahoy and ChartMogul? Using the data gathered by Ahoy, we can start to track the earliest stages of our user funnel and get a more complete picture on where our customers are coming from (attribution), more specifically tracking the point at which they first come into contact with our brand. Most SaaS businesses today partake in a wide range of marketing activities spread across a large number of platforms on the web. The ability to track how each of these impact the bottom line is critical when optimizing your marketing strategy. I want to be able to answer these 5 questions inside my ChartMogul account: Which discovery sources produce the most paying customers? Which discovery sources produce customers with the highest MRR or LTV? Which landing pages ultimately produce the most paying customers? Which conversion sources produce the most paying customers? Which discovery sources produce customers with the lowest churn rate? It should be quite obvious to anyone working in a marketing or revenue generation role at a subscription business that being able to answer these questions (even ‘somewhat’ accurately) would be extremely valuable. How it’s going to work You embed some JavaScript from Ahoy on your website, just like you do for Google analytics. This JS tracks all the same visitor data that Google Analytics tracks and sends the raw data to the Ahoy application which writes the visitor event data to a database of your choosing. The JS also cookies the user so all data collected is associated with the same person (or at least the same browser/machine). As soon as any visitor signs up for an account (trial, paid, freemium, doesn’t matter), you’ll then want to fire off a webhook from your backend to the Ahoy application informing it that a user has signed up for a free trial – the webhook would collect the Ahoy identifier from the cookie as well as the internal ID of the user account. As soon as that’s done all the previously collected data about the site visitor will be associated with the newly created user account. We can then send the relevant pieces of data to ChartMogul using the Enrichment API, each time time a trial converts to a paying customer – if the visitor doesn’t have a free trial then the feedback loop is even faster and you can associate the visitor data with the customer as soon as they signup. Setting up Ahoy There are three main parts to setting up Ahoy: Setup a separate server and database and install the Ahoy application there. Paste the Ahoy javascript embed into your website’s code. You’ll need to custom code a callback/webhook that will fire each time a visitor signs up on your website and a user account is created. The idea here is to ‘close the loop’ and associate the visitor data that’s being collected by Ahoy with the user account in your database. Pushing Ahoy data to ChartMogul Once you’ve completed the above steps you’ll want to use the ChartMogul Enrichment API to push the relevant bits of data (discovery referrer, discovery landing url and conversion referrer) to your ChartMogul account each time a new customer is added. You will start to see the Ahoy metadata appearing on your customer profiles in ChartMogul: A ChartMogul customer profile, with additional attributes piped in from Ahoy. Segmenting your metrics in ChartMogul using Ahoy data You are now ready to create some very insightful graphs in ChartMogul. Click “Add filter” and setup like this: discovery_referrer contains t.co Once you’ve achieved this setup, you can add further segments that would be interesting to you – and even compare them directly: Comparing different “disovery_referrer” MRR values in ChartMogul Some limitations As always, when tracking and attributing users on the web, you’re always going to run into a set of common issues. People commonly use different devices and browsers on the web, and using cookies to track users across those devices isn’t really feasible. You should bare in mind that the data you get will never be 100% accurate. You’ll end up with some traffic that looks like first-time visits and will actually be users who have, for example, come into contact with your brand on a mobile device and then moved to a desktop browser. With that in mind, it’s clear that the insights you can gain from implementing and using such a system vastly outweighs its drawbacks. Being able to attribute your customers right back to their first touch-point with your brand can answer countless questions and guide your focus and spending when it comes to sales and marketing. </sys

How we use ChartMogul at Livestorm. Livestorm is the modern software you need to run a webinar or any live session such as a product demo or customer training call. Livestorm’s vision is to be the best integrated live conferencing suite and is designed to make webinars enjoyable from start to finish. Marketers have been using webinars and live sessions as an active part of their conversion funnel for years now, but the tools they have at their disposal to host webinars are outdated, and have to be managed as standalone apps, completely separated from their automated marketing funnel. They also often necessitate lousy app installs, sometimes only for presenters, sometimes even for participants. With Livestorm, there’s nothing to install. Just register, sit down and enjoy the show. The product was launched at the end of 2016 with a few customers and quickly grew. Now, Livestorm powers live sessions for hundreds of customers with tens of thousands of attendees every month. Customers range from small to mid-size businesses like Pipedrive and Customer.io, to larger corporations such as Bosch. We offer a product driven by data to our customers, so it’s only natural for us to closely monitor our own internal numbers as well. Livestorm helps businesses run better more engaging webinars. When raw numbers aren’t enough, custom tags come to the rescue When growing a SaaS business, you have a handful of key metrics to track. The first obvious data point you’ll look at is MRR (and its growth). But if you’re not careful, summing up your growth and the state of your business into a few high-level metrics can hide important insights. Thanks to ChartMogul, we can create our own custom data points and tags, adding context to our numbers. Now we’re able to drill down into numbers and trends to understand what’s really going on. We can answer questions such as “Why are our users churning?” which, more importantly, helps us answer the question “How do we reduce churn?” “Including custom data and tags enables me to put our growth metrics into perspective. We’ve been able find valuable insights that will drive not only our product decisions, but also our go-to-market strategy. My favorite features are the cohort analysis and MRR movements.” One key use case for custom tags is churn classification. We’re asking customers who unsubscribe to tell us the reason for their unsubscribe, then pushing this data into ChartMogul in the form of tags. We can then use segments to exclude specific customers who simply paused their subscription during periods of webinar inactivity. This allows us to think about ways to accommodate these customers without cancelling their plan while keeping their replays active. This is just one example of an insight made clear thanks to ChartMogul — something that helped us drive a product decision. Saving time reporting to the team and investors “Thanks to ChartMogul, I’ve cut down the time to build my monthly investors’ report by half.” Every Friday, we discuss key metrics with the team. We have 10 data points that we report on, from week-over-week growth, to churn, to Net Promoter Score (NPS), to naming our top five customers and so on. While we don’t get everything above from ChartMogul, there’s a lot that comes from our dashboard, which saves tons of time. Before this, we had to copy and paste info from multiple spreadsheets and sources, and sometimes we couldn’t be 100% sure about the accuracy of our data. Thinking about this time now feels like we were in the middle ages… never again! Our ChartMogul account also comes in handy when reporting to investors. At Livestorm, we raised our first round of investment in the summer of 2017. Today, in addition to keeping our team up-to-date with key metrics, we report to our investors every month. Getting the right numbers and formatting them into monthly presentations is usually a drag, not fun, and often seen as a waste of time. But ChartMogul does a lot of the work for us. Start building a better subscription business today Livestorm is one of many businesses using ChartMogul to make decisions and better inform stakeholders. To start discovering your own insights and understanding your customers, create your free trial or contact [email protected].

[INST] How we use ChartMogul at Livestorm [/INST]

Livestorm is the modern software you need to run a webinar or any live session such as a product demo or customer training call. Livestorm’s vision is to be the best integrated live conferencing suite and is designed to make webinars enjoyable from start to finish. Marketers have been using webinars and live sessions as an active part of their conversion funnel for years now, but the tools they have at their disposal to host webinars are outdated, and have to be managed as standalone apps, completely separated from their automated marketing funnel. They also often necessitate lousy app installs, sometimes only for presenters, sometimes even for participants. With Livestorm, there’s nothing to install. Just register, sit down and enjoy the show. The product was launched at the end of 2016 with a few customers and quickly grew. Now, Livestorm powers live sessions for hundreds of customers with tens of thousands of attendees every month. Customers range from small to mid-size businesses like Pipedrive and Customer.io, to larger corporations such as Bosch. We offer a product driven by data to our customers, so it’s only natural for us to closely monitor our own internal numbers as well. Livestorm helps businesses run better more engaging webinars. When raw numbers aren’t enough, custom tags come to the rescue When growing a SaaS business, you have a handful of key metrics to track. The first obvious data point you’ll look at is MRR (and its growth). But if you’re not careful, summing up your growth and the state of your business into a few high-level metrics can hide important insights. Thanks to ChartMogul, we can create our own custom data points and tags, adding context to our numbers. Now we’re able to drill down into numbers and trends to understand what’s really going on. We can answer questions such as “Why are our users churning?” which, more importantly, helps us answer the question “How do we reduce churn?” “Including custom data and tags enables me to put our growth metrics into perspective. We’ve been able find valuable insights that will drive not only our product decisions, but also our go-to-market strategy. My favorite features are the cohort analysis and MRR movements.” One key use case for custom tags is churn classification. We’re asking customers who unsubscribe to tell us the reason for their unsubscribe, then pushing this data into ChartMogul in the form of tags. We can then use segments to exclude specific customers who simply paused their subscription during periods of webinar inactivity. This allows us to think about ways to accommodate these customers without cancelling their plan while keeping their replays active. This is just one example of an insight made clear thanks to ChartMogul — something that helped us drive a product decision. Saving time reporting to the team and investors “Thanks to ChartMogul, I’ve cut down the time to build my monthly investors’ report by half.” Every Friday, we discuss key metrics with the team. We have 10 data points that we report on, from week-over-week growth, to churn, to Net Promoter Score (NPS), to naming our top five customers and so on. While we don’t get everything above from ChartMogul, there’s a lot that comes from our dashboard, which saves tons of time. Before this, we had to copy and paste info from multiple spreadsheets and sources, and sometimes we couldn’t be 100% sure about the accuracy of our data. Thinking about this time now feels like we were in the middle ages… never again! Our ChartMogul account also comes in handy when reporting to investors. At Livestorm, we raised our first round of investment in the summer of 2017. Today, in addition to keeping our team up-to-date with key metrics, we report to our investors every month. Getting the right numbers and formatting them into monthly presentations is usually a drag, not fun, and often seen as a waste of time. But ChartMogul does a lot of the work for us. Start building a better subscription business today Livestorm is one of many businesses using ChartMogul to make decisions and better inform stakeholders. To start discovering your own insights and understanding your customers, create your free trial or contact [email protected].

<sys> [INST] How we use ChartMogul at Livestorm [/INST] Livestorm is the modern software you need to run a webinar or any live session such as a product demo or customer training call. Livestorm’s vision is to be the best integrated live conferencing suite and is designed to make webinars enjoyable from start to finish. Marketers have been using webinars and live sessions as an active part of their conversion funnel for years now, but the tools they have at their disposal to host webinars are outdated, and have to be managed as standalone apps, completely separated from their automated marketing funnel. They also often necessitate lousy app installs, sometimes only for presenters, sometimes even for participants. With Livestorm, there’s nothing to install. Just register, sit down and enjoy the show. The product was launched at the end of 2016 with a few customers and quickly grew. Now, Livestorm powers live sessions for hundreds of customers with tens of thousands of attendees every month. Customers range from small to mid-size businesses like Pipedrive and Customer.io, to larger corporations such as Bosch. We offer a product driven by data to our customers, so it’s only natural for us to closely monitor our own internal numbers as well. Livestorm helps businesses run better more engaging webinars. When raw numbers aren’t enough, custom tags come to the rescue When growing a SaaS business, you have a handful of key metrics to track. The first obvious data point you’ll look at is MRR (and its growth). But if you’re not careful, summing up your growth and the state of your business into a few high-level metrics can hide important insights. Thanks to ChartMogul, we can create our own custom data points and tags, adding context to our numbers. Now we’re able to drill down into numbers and trends to understand what’s really going on. We can answer questions such as “Why are our users churning?” which, more importantly, helps us answer the question “How do we reduce churn?” “Including custom data and tags enables me to put our growth metrics into perspective. We’ve been able find valuable insights that will drive not only our product decisions, but also our go-to-market strategy. My favorite features are the cohort analysis and MRR movements.” One key use case for custom tags is churn classification. We’re asking customers who unsubscribe to tell us the reason for their unsubscribe, then pushing this data into ChartMogul in the form of tags. We can then use segments to exclude specific customers who simply paused their subscription during periods of webinar inactivity. This allows us to think about ways to accommodate these customers without cancelling their plan while keeping their replays active. This is just one example of an insight made clear thanks to ChartMogul — something that helped us drive a product decision. Saving time reporting to the team and investors “Thanks to ChartMogul, I’ve cut down the time to build my monthly investors’ report by half.” Every Friday, we discuss key metrics with the team. We have 10 data points that we report on, from week-over-week growth, to churn, to Net Promoter Score (NPS), to naming our top five customers and so on. While we don’t get everything above from ChartMogul, there’s a lot that comes from our dashboard, which saves tons of time. Before this, we had to copy and paste info from multiple spreadsheets and sources, and sometimes we couldn’t be 100% sure about the accuracy of our data. Thinking about this time now feels like we were in the middle ages… never again! Our ChartMogul account also comes in handy when reporting to investors. At Livestorm, we raised our first round of investment in the summer of 2017. Today, in addition to keeping our team up-to-date with key metrics, we report to our investors every month. Getting the right numbers and formatting them into monthly presentations is usually a drag, not fun, and often seen as a waste of time. But ChartMogul does a lot of the work for us. Start building a better subscription business today Livestorm is one of many businesses using ChartMogul to make decisions and better inform stakeholders. To start discovering your own insights and understanding your customers, create your free trial or contact [email protected]. </sys

SaaS in China – Subscription Software Behind the Firewall. With companies like Salesforce exhibiting consistent YoY growth of more than 30%, the opportunity there for companies to enter the market and succeed with a SaaS business – at least in the US, European and ANZ markets. But whilst the US market commanded over 60% of the global SaaS spending at the end of 2014, China had just a 3% share. However, there are signs of strong growth especially in e-commerce which is ~2x the U.S., spearheaded by Chinese giants Alibaba and Tencent-backed JD.com. If you focus solely on mobile e-commerce, China is 5x and growing faster than the US. I spent some time in the country recently, and was able to discover some fascinating insights from business leaders on the state of play in this diverse, unique market laced with opportunities. E-commerce sales in China (source: https://chinamarketingtips.com/infographic-chinese-online-retail-market-vs-us/) Differences in Chinese SaaS Given the differences in market maturity, SaaS in China is generally more focused around “tools”, such as cloud storage and video-conferencing. Also large-scale solutions, for example in the healthcare sector, are showing some promise. The U.S. market on the other hand, tends to be more focused on enterprise SaaS – CRM solutions such as close.io, and many Enterprise Resource Management (ERP) solutions, such as in the diagram below: Source: Wikipedia There are similarities, however. Many of the market drivers for moving to a SaaS model are the same – and these drivers still exist in the Chinese market. Tighter capital budgets force a focus on leaner alternatives with lower upfront expenditure. China is currently transitioning towards increased productivity over sheer workforce power (see below), and SaaS facilitates an important step towards this. Secondly, the improved, more predictable ROI offered by SaaS is also a large factor for both Chinese and Western companies alike. Other similarities between the two markets include some of the challenges in SaaS adoption – these typically apply globally. Concerns around security, authentication and access control lead to unease in large corporations, who in transitioning to SaaS are often giving up a lot of control they have traditionally commanded over large-scale enterprise solutions. The Chinese Government is especially strict when it comes to data travelling outside of its jurisdiction, but is actively encouraging businesses to buy from Chinese SaaS, rather than foreign competitors. Finally, the same concerns can be found in both markets surrounding cloud-based solutions which require a reliable always-on internet connection. Whilst connectivity is constantly improving, with significant Chinese infrastructure improvements in 2015, the risk of downtime still looms – leaving many SaaS products effectively useless. In Q2 of last year, China’s average Internet download speed was 3.39 Mb/s, close to the global average but far behind other industrialized countries, who have average download speeds closer to 8 Mb/s. – Lisa Hanson, Forbes You can read more about Chinese data protection law here. The Chinese SaaS sweet spot is close As Peng T. Ong (co-founder of match.com) discusses on TheNextWeb, up to a point in the Asian market, it has traditionally been cheaper to simply throw more people at a problem. But when the GDP per capita hits a certain “sweet spot” ($8,000-10,000 per year, Peng suggests) a tipping point occurs, where businesses start to focus more on increasing productivity and effectiveness of solutions – and that’s where enterprise SaaS solutions really shine. Right now, China is sitting at a GDP value of nearly $7,000 per capita – meaning that things should start to get very interesting in the near future. So, the question is, can foreign (non-Chinese) SaaS companies capitalise on this opportunity? Foreign SaaS in China faces an up-hill struggle High profile online businesses have tried and failed to enter the Chinese market, including Groupon and eBay, both of whom were unable to compete with domestic competition that had a better knowledge of the market. The same applies to SaaS – if you’re planning to do business in China, you’ll encounter a maze of legislation and law which is prohibitively hostile towards foreign businesses. Here are a few options, along with their problems: Host your SaaS outside of China. All traffic will have to pass through the Great Firewall, meaning that the connection will be slow, inconsistent and at risk of being blocked permanently if you trigger any one of the many restrictive filters. If you’re a cloud storage SaaS solution, or you host user-created content of some kind, this is almost certainly not an option for you. There are also many other caveats to this approach. Also supporting tools from Google are blocked. Host your SaaS within China. For this, you’ll require a commercial ICP license to have a web presence in the country. And unfortunately for you, a foreign entity cannot obtain a commercial ICP license in China. This option is a no-go. Re-sell your SaaS within China through a licensing agreement with a 100% Chinese entity. These are commonly referred to as “Internet Portals” The SaaS must be provisioned and hosted by the licensee, offering you little control over how the operation is coordinated. This is realistically the only feasible option, but still poses some (huge) challenges. If you want to read more about selling SaaS in China, China Law Blog is full of useful information and resources. A Potential Solution: Partnerships One avenue that foreign SaaS companies are (somewhat successfully) exploring when it comes to entering the Chinese market is building partnerships with existing Chinese companies. A great example of this is Zoho, which successfully partnered with Baihui to bring its SaaS CRM, productivity and business tools to market (albeit in a rebranded form). Partnering with Chinese businesses has a huge advantage in getting around a lot of the strict legal and licensing issues required to have an online presence in China: “The primary issue for Internet business in China is that all commercial Internet businesses require the website owner acquire a commercial ICP (Internet Content Provider) license. This means that in addition to traditional e-commerce websites, cloud computing, software as a service (SaaS) and software as a platform (SaaP) sites all require a commercial ICP license…This ICP licensing requirement makes it very difficult for foreign software developers to get into the PRC cloud computing market.” Source: ChinaLawBlog Baihui CRM – a rebranded version of Zoho’s CRM tool, tailored for the Chinese market. Doing business in China: Guanxi One of the key reasons why foreign businesses try, and fail to enter the Chinese market is due to the the cultural differences when it comes to doing business. This difference can be nicely summarised with a single Chinese term, which describes the situation nicely: guanxi (noun); (in China) the system of social networks and influential relationships which facilitate businesses and other dealings. In other words, the core of any business deal in China is a strong relationship between the stakeholders involved. Without this strong foundation, which often requires months of relationship-building, you’re likely to fail hard when it comes to doing any kind of business there. During my time in China, every single company owner and business leader told me that they don’t make any partnerships or deals for their business without at least a dinner (usually multiple dinners, spread over a period of time) and a strong foundation of trust. Read more about Guanxi in the Forbes article “Want To Capitalize On China? You Better Have Good Guanxi.” Conclusion The SaaS market in China lags behind the U.S. by at least 5 years in adoption rate and 10 years in market size (at the current projected growth rate). There are factors unique to the Chinese market that act as roadblocks to accelerated growth, such as severe lags in infrastructure and difficulties in distribution. In addition to this, the lack of presence of big-name foreign SaaS companies doesn’t do anything to promote and encourage further growth. However, one can’t ignore that the market in China remains huge – on a scale that far outweighs that of the U.S.

[INST] SaaS in China – Subscription Software Behind the Firewall [/INST]

With companies like Salesforce exhibiting consistent YoY growth of more than 30%, the opportunity there for companies to enter the market and succeed with a SaaS business – at least in the US, European and ANZ markets. But whilst the US market commanded over 60% of the global SaaS spending at the end of 2014, China had just a 3% share. However, there are signs of strong growth especially in e-commerce which is ~2x the U.S., spearheaded by Chinese giants Alibaba and Tencent-backed JD.com. If you focus solely on mobile e-commerce, China is 5x and growing faster than the US. I spent some time in the country recently, and was able to discover some fascinating insights from business leaders on the state of play in this diverse, unique market laced with opportunities. E-commerce sales in China (source: https://chinamarketingtips.com/infographic-chinese-online-retail-market-vs-us/) Differences in Chinese SaaS Given the differences in market maturity, SaaS in China is generally more focused around “tools”, such as cloud storage and video-conferencing. Also large-scale solutions, for example in the healthcare sector, are showing some promise. The U.S. market on the other hand, tends to be more focused on enterprise SaaS – CRM solutions such as close.io, and many Enterprise Resource Management (ERP) solutions, such as in the diagram below: Source: Wikipedia There are similarities, however. Many of the market drivers for moving to a SaaS model are the same – and these drivers still exist in the Chinese market. Tighter capital budgets force a focus on leaner alternatives with lower upfront expenditure. China is currently transitioning towards increased productivity over sheer workforce power (see below), and SaaS facilitates an important step towards this. Secondly, the improved, more predictable ROI offered by SaaS is also a large factor for both Chinese and Western companies alike. Other similarities between the two markets include some of the challenges in SaaS adoption – these typically apply globally. Concerns around security, authentication and access control lead to unease in large corporations, who in transitioning to SaaS are often giving up a lot of control they have traditionally commanded over large-scale enterprise solutions. The Chinese Government is especially strict when it comes to data travelling outside of its jurisdiction, but is actively encouraging businesses to buy from Chinese SaaS, rather than foreign competitors. Finally, the same concerns can be found in both markets surrounding cloud-based solutions which require a reliable always-on internet connection. Whilst connectivity is constantly improving, with significant Chinese infrastructure improvements in 2015, the risk of downtime still looms – leaving many SaaS products effectively useless. In Q2 of last year, China’s average Internet download speed was 3.39 Mb/s, close to the global average but far behind other industrialized countries, who have average download speeds closer to 8 Mb/s. – Lisa Hanson, Forbes You can read more about Chinese data protection law here. The Chinese SaaS sweet spot is close As Peng T. Ong (co-founder of match.com) discusses on TheNextWeb, up to a point in the Asian market, it has traditionally been cheaper to simply throw more people at a problem. But when the GDP per capita hits a certain “sweet spot” ($8,000-10,000 per year, Peng suggests) a tipping point occurs, where businesses start to focus more on increasing productivity and effectiveness of solutions – and that’s where enterprise SaaS solutions really shine. Right now, China is sitting at a GDP value of nearly $7,000 per capita – meaning that things should start to get very interesting in the near future. So, the question is, can foreign (non-Chinese) SaaS companies capitalise on this opportunity? Foreign SaaS in China faces an up-hill struggle High profile online businesses have tried and failed to enter the Chinese market, including Groupon and eBay, both of whom were unable to compete with domestic competition that had a better knowledge of the market. The same applies to SaaS – if you’re planning to do business in China, you’ll encounter a maze of legislation and law which is prohibitively hostile towards foreign businesses. Here are a few options, along with their problems: Host your SaaS outside of China. All traffic will have to pass through the Great Firewall, meaning that the connection will be slow, inconsistent and at risk of being blocked permanently if you trigger any one of the many restrictive filters. If you’re a cloud storage SaaS solution, or you host user-created content of some kind, this is almost certainly not an option for you. There are also many other caveats to this approach. Also supporting tools from Google are blocked. Host your SaaS within China. For this, you’ll require a commercial ICP license to have a web presence in the country. And unfortunately for you, a foreign entity cannot obtain a commercial ICP license in China. This option is a no-go. Re-sell your SaaS within China through a licensing agreement with a 100% Chinese entity. These are commonly referred to as “Internet Portals” The SaaS must be provisioned and hosted by the licensee, offering you little control over how the operation is coordinated. This is realistically the only feasible option, but still poses some (huge) challenges. If you want to read more about selling SaaS in China, China Law Blog is full of useful information and resources. A Potential Solution: Partnerships One avenue that foreign SaaS companies are (somewhat successfully) exploring when it comes to entering the Chinese market is building partnerships with existing Chinese companies. A great example of this is Zoho, which successfully partnered with Baihui to bring its SaaS CRM, productivity and business tools to market (albeit in a rebranded form). Partnering with Chinese businesses has a huge advantage in getting around a lot of the strict legal and licensing issues required to have an online presence in China: “The primary issue for Internet business in China is that all commercial Internet businesses require the website owner acquire a commercial ICP (Internet Content Provider) license. This means that in addition to traditional e-commerce websites, cloud computing, software as a service (SaaS) and software as a platform (SaaP) sites all require a commercial ICP license…This ICP licensing requirement makes it very difficult for foreign software developers to get into the PRC cloud computing market.” Source: ChinaLawBlog Baihui CRM – a rebranded version of Zoho’s CRM tool, tailored for the Chinese market. Doing business in China: Guanxi One of the key reasons why foreign businesses try, and fail to enter the Chinese market is due to the the cultural differences when it comes to doing business. This difference can be nicely summarised with a single Chinese term, which describes the situation nicely: guanxi (noun); (in China) the system of social networks and influential relationships which facilitate businesses and other dealings. In other words, the core of any business deal in China is a strong relationship between the stakeholders involved. Without this strong foundation, which often requires months of relationship-building, you’re likely to fail hard when it comes to doing any kind of business there. During my time in China, every single company owner and business leader told me that they don’t make any partnerships or deals for their business without at least a dinner (usually multiple dinners, spread over a period of time) and a strong foundation of trust. Read more about Guanxi in the Forbes article “Want To Capitalize On China? You Better Have Good Guanxi.” Conclusion The SaaS market in China lags behind the U.S. by at least 5 years in adoption rate and 10 years in market size (at the current projected growth rate). There are factors unique to the Chinese market that act as roadblocks to accelerated growth, such as severe lags in infrastructure and difficulties in distribution. In addition to this, the lack of presence of big-name foreign SaaS companies doesn’t do anything to promote and encourage further growth. However, one can’t ignore that the market in China remains huge – on a scale that far outweighs that of the U.S.

<sys> [INST] SaaS in China – Subscription Software Behind the Firewall [/INST] With companies like Salesforce exhibiting consistent YoY growth of more than 30%, the opportunity there for companies to enter the market and succeed with a SaaS business – at least in the US, European and ANZ markets. But whilst the US market commanded over 60% of the global SaaS spending at the end of 2014, China had just a 3% share. However, there are signs of strong growth especially in e-commerce which is ~2x the U.S., spearheaded by Chinese giants Alibaba and Tencent-backed JD.com. If you focus solely on mobile e-commerce, China is 5x and growing faster than the US. I spent some time in the country recently, and was able to discover some fascinating insights from business leaders on the state of play in this diverse, unique market laced with opportunities. E-commerce sales in China (source: https://chinamarketingtips.com/infographic-chinese-online-retail-market-vs-us/) Differences in Chinese SaaS Given the differences in market maturity, SaaS in China is generally more focused around “tools”, such as cloud storage and video-conferencing. Also large-scale solutions, for example in the healthcare sector, are showing some promise. The U.S. market on the other hand, tends to be more focused on enterprise SaaS – CRM solutions such as close.io, and many Enterprise Resource Management (ERP) solutions, such as in the diagram below: Source: Wikipedia There are similarities, however. Many of the market drivers for moving to a SaaS model are the same – and these drivers still exist in the Chinese market. Tighter capital budgets force a focus on leaner alternatives with lower upfront expenditure. China is currently transitioning towards increased productivity over sheer workforce power (see below), and SaaS facilitates an important step towards this. Secondly, the improved, more predictable ROI offered by SaaS is also a large factor for both Chinese and Western companies alike. Other similarities between the two markets include some of the challenges in SaaS adoption – these typically apply globally. Concerns around security, authentication and access control lead to unease in large corporations, who in transitioning to SaaS are often giving up a lot of control they have traditionally commanded over large-scale enterprise solutions. The Chinese Government is especially strict when it comes to data travelling outside of its jurisdiction, but is actively encouraging businesses to buy from Chinese SaaS, rather than foreign competitors. Finally, the same concerns can be found in both markets surrounding cloud-based solutions which require a reliable always-on internet connection. Whilst connectivity is constantly improving, with significant Chinese infrastructure improvements in 2015, the risk of downtime still looms – leaving many SaaS products effectively useless. In Q2 of last year, China’s average Internet download speed was 3.39 Mb/s, close to the global average but far behind other industrialized countries, who have average download speeds closer to 8 Mb/s. – Lisa Hanson, Forbes You can read more about Chinese data protection law here. The Chinese SaaS sweet spot is close As Peng T. Ong (co-founder of match.com) discusses on TheNextWeb, up to a point in the Asian market, it has traditionally been cheaper to simply throw more people at a problem. But when the GDP per capita hits a certain “sweet spot” ($8,000-10,000 per year, Peng suggests) a tipping point occurs, where businesses start to focus more on increasing productivity and effectiveness of solutions – and that’s where enterprise SaaS solutions really shine. Right now, China is sitting at a GDP value of nearly $7,000 per capita – meaning that things should start to get very interesting in the near future. So, the question is, can foreign (non-Chinese) SaaS companies capitalise on this opportunity? Foreign SaaS in China faces an up-hill struggle High profile online businesses have tried and failed to enter the Chinese market, including Groupon and eBay, both of whom were unable to compete with domestic competition that had a better knowledge of the market. The same applies to SaaS – if you’re planning to do business in China, you’ll encounter a maze of legislation and law which is prohibitively hostile towards foreign businesses. Here are a few options, along with their problems: Host your SaaS outside of China. All traffic will have to pass through the Great Firewall, meaning that the connection will be slow, inconsistent and at risk of being blocked permanently if you trigger any one of the many restrictive filters. If you’re a cloud storage SaaS solution, or you host user-created content of some kind, this is almost certainly not an option for you. There are also many other caveats to this approach. Also supporting tools from Google are blocked. Host your SaaS within China. For this, you’ll require a commercial ICP license to have a web presence in the country. And unfortunately for you, a foreign entity cannot obtain a commercial ICP license in China. This option is a no-go. Re-sell your SaaS within China through a licensing agreement with a 100% Chinese entity. These are commonly referred to as “Internet Portals” The SaaS must be provisioned and hosted by the licensee, offering you little control over how the operation is coordinated. This is realistically the only feasible option, but still poses some (huge) challenges. If you want to read more about selling SaaS in China, China Law Blog is full of useful information and resources. A Potential Solution: Partnerships One avenue that foreign SaaS companies are (somewhat successfully) exploring when it comes to entering the Chinese market is building partnerships with existing Chinese companies. A great example of this is Zoho, which successfully partnered with Baihui to bring its SaaS CRM, productivity and business tools to market (albeit in a rebranded form). Partnering with Chinese businesses has a huge advantage in getting around a lot of the strict legal and licensing issues required to have an online presence in China: “The primary issue for Internet business in China is that all commercial Internet businesses require the website owner acquire a commercial ICP (Internet Content Provider) license. This means that in addition to traditional e-commerce websites, cloud computing, software as a service (SaaS) and software as a platform (SaaP) sites all require a commercial ICP license…This ICP licensing requirement makes it very difficult for foreign software developers to get into the PRC cloud computing market.” Source: ChinaLawBlog Baihui CRM – a rebranded version of Zoho’s CRM tool, tailored for the Chinese market. Doing business in China: Guanxi One of the key reasons why foreign businesses try, and fail to enter the Chinese market is due to the the cultural differences when it comes to doing business. This difference can be nicely summarised with a single Chinese term, which describes the situation nicely: guanxi (noun); (in China) the system of social networks and influential relationships which facilitate businesses and other dealings. In other words, the core of any business deal in China is a strong relationship between the stakeholders involved. Without this strong foundation, which often requires months of relationship-building, you’re likely to fail hard when it comes to doing any kind of business there. During my time in China, every single company owner and business leader told me that they don’t make any partnerships or deals for their business without at least a dinner (usually multiple dinners, spread over a period of time) and a strong foundation of trust. Read more about Guanxi in the Forbes article “Want To Capitalize On China? You Better Have Good Guanxi.” Conclusion The SaaS market in China lags behind the U.S. by at least 5 years in adoption rate and 10 years in market size (at the current projected growth rate). There are factors unique to the Chinese market that act as roadblocks to accelerated growth, such as severe lags in infrastructure and difficulties in distribution. In addition to this, the lack of presence of big-name foreign SaaS companies doesn’t do anything to promote and encourage further growth. However, one can’t ignore that the market in China remains huge – on a scale that far outweighs that of the U.S. </sys

How to develop a success management strategy. At ChartMogul, our aim is to help our customers become category leaders. We know that transformational customer success focuses on proactive, strategic engagement. It ensures that users are successful. And this kind of customer success may even transcend traditional boundaries to the collective benefit of all parties. One way that we think about our customer success program can be illustrated by a diagram like this: Imagine the light blue on the pyramid fanning out from left to right, encompassing more of each tier. We work hard to span all areas of the pyramid, with smart feature prioritization, solid help center documentation, regular NPS surveys, and now, proactive customer success. Ingmar, our VP of Customer Success, and our support team cracked the code on first response time and measuring NPS. We realized, however, that we needed to do a better job supporting the strategic vision of our key accounts. Keenly aware of the effects of churn, we agreed to implement a more formal plan to proactively engage and learn from our key accounts. As we grow, we’re able to spend more time developing the proactive tiers of the pyramid without de-prioritizing a strong foundation of fast, helpful ticket replies and features that delight. So, after being charged with the task of building a success management program, I got to thinking: how and where do you begin? Defining your program First, we needed to decide on the number of key accounts — which accounts should be managed? We had to think critically about our capacity. At what rate is the key account segment growing? How many accounts can one Account Manager successfully manage based on the requirements of the program? We also needed to ensure each team and each individual contributor had clear goals and metrics to track success. We summed up our definition of a managed account based on three distinct criteria: Revenue (which should never be a lone indicator) Expansion and growth potential Are they a strategic customer? The first two are fairly obvious. Based on the market you play in (SMB, mid-market, enterprise), you should have a general idea of the complexity of your product and customer relationships. This will help you determine a manageable number of accounts for your 1-to-1 strategy. Do you have gated features, product add-ons or services that you can upsell? These are just a few items that present opportunities for account expansion. If you consider them a strategic partner, this could mean they’re: (1) a recognizable logo you’d love to have on your website as a testimonial or case study; (2) a partner you stand to learn a lot from; or, (3) an experience you can draw on when working with similar customers. It’s tempting to label many customers as “key accounts” at one time, but be conservative. You can’t tell a key account they’ve been demoted, but you can tell a traditional buyer you’re promoting them. Aja Frost, HubSpot Key takeaways That said, here is the general thought process I used and will share so that you can build your own framework: Proactive customer success is not a replacement for quality support. Determine your team’s capacity based on factors like the complexity of your product, account growth, and customer expectations. Determine what your success framework should include — what does this team own? Is it onboarding, renewals, NPS, etc. Spell out your criteria for a managed account and be careful not to make exceptions. Define each of these and any other criteria that are relevant to your business! This will help with determining your success management metrics. Customer Success Management metrics How do you build a compensation plan for a new customer success team and strategy? This is a question that is no stranger to SaaS leaders. You want to incentivize, but it shouldn’t be all about that 💸. As I mentioned earlier — and this doesn’t only pertain to ChartMogul — SaaS and subscription companies with a keen eye on core metrics (churn, retention, expansion) should, at the very least, have a pulse on two easily measurable success management metrics: logo (account) retention and revenue retention. Logo retention is the percentage of customers retained over a given period of time. Whereas revenue retention is simply the percentage of revenue retained over a period of time. Because I’m also building a department, we also outline 4-5 key strategic or growth objectives we’d like to accomplish as a team each quarter. We refer to these as management by objectives, or MBOs. Logo and revenue retention At ChartMogul, we’ve weighted these targets as 50% and 25%, respectively. Logo retention has been assigned a larger weighting simply because strong account retention undeniably promotes stronger revenue retention. If you place too much importance on revenue retention, and not enough on logo retention, it could lead to a culture that encourages decisions being made for the sole purpose of revenue rather than a combination of revenue, customer health, and longevity. MBOs (Management by Objectives) These targets carry the remaining 25% of target. Specific objectives that have been a focus for us include the following: Account health assessment Improving price-to-value alignment ‘x’ number of QBRs (quarterly business reviews) per quarter Defining, refining, and documenting success processes Developing a training program In an early stage startup such as ChartMogul, it’s not expected that you’ll be able to quickly or easily implement a customer health platform like Totango or Gainsight. What you can do in the short-term is to create a shared document that outlines all accounts, including details such as key stakeholders, MRR, plan type, renewal date, account health and action items, to name a few. This document, accompanied by your CRM, will aid in timely and insightful outreach. I suggest saving a copy each quarter so you can track progress across your managed accounts. This assessment will also prove invaluable when the time comes to transition to a more automated and integrated method for measuring customer health. I’ll touch on one more MBO here, and that is ‘improving price to value alignment’. Many SaaS companies find themselves in a position where legacy customers are severely underpaying, but they might also be severely underusing the product. Re-engaging, educating, and enabling these users is crucial to ensure success and help validate what they’re currently paying. So, what is the right timing? Customer Success is where 90% of the revenue is. Jason Lemkin (source) The honest truth is — this is entirely up to the company, and resources at its disposal, to determine when it should make its first hire (or promotion) to create a Customer Success Management team. At ChartMogul, we decided to first build a world class customer service and solutions team before establishing success management. Timing also depends on the product and how high-touch onboarding is. Products that are quite self-service in nature tend to require little-to-no onboarding. Keep in mind, when initiating success management within your company, things tend to get worse before they get better. You might receive a lot of customer feedback initially that uncovers customers who are a bad fit, or customers that have never fully completed their onboarding. All things said, if you’re focusing on logo retention, revenue retention, and quarterly MBOs, and meeting or exceeding targets that are in-line with the broader company metrics, you are well on your way to improved customer health across key accounts and a clearly defined strategy on workflows, processes, and interventions.

[INST] How to develop a success management strategy [/INST]

At ChartMogul, our aim is to help our customers become category leaders. We know that transformational customer success focuses on proactive, strategic engagement. It ensures that users are successful. And this kind of customer success may even transcend traditional boundaries to the collective benefit of all parties. One way that we think about our customer success program can be illustrated by a diagram like this: Imagine the light blue on the pyramid fanning out from left to right, encompassing more of each tier. We work hard to span all areas of the pyramid, with smart feature prioritization, solid help center documentation, regular NPS surveys, and now, proactive customer success. Ingmar, our VP of Customer Success, and our support team cracked the code on first response time and measuring NPS. We realized, however, that we needed to do a better job supporting the strategic vision of our key accounts. Keenly aware of the effects of churn, we agreed to implement a more formal plan to proactively engage and learn from our key accounts. As we grow, we’re able to spend more time developing the proactive tiers of the pyramid without de-prioritizing a strong foundation of fast, helpful ticket replies and features that delight. So, after being charged with the task of building a success management program, I got to thinking: how and where do you begin? Defining your program First, we needed to decide on the number of key accounts — which accounts should be managed? We had to think critically about our capacity. At what rate is the key account segment growing? How many accounts can one Account Manager successfully manage based on the requirements of the program? We also needed to ensure each team and each individual contributor had clear goals and metrics to track success. We summed up our definition of a managed account based on three distinct criteria: Revenue (which should never be a lone indicator) Expansion and growth potential Are they a strategic customer? The first two are fairly obvious. Based on the market you play in (SMB, mid-market, enterprise), you should have a general idea of the complexity of your product and customer relationships. This will help you determine a manageable number of accounts for your 1-to-1 strategy. Do you have gated features, product add-ons or services that you can upsell? These are just a few items that present opportunities for account expansion. If you consider them a strategic partner, this could mean they’re: (1) a recognizable logo you’d love to have on your website as a testimonial or case study; (2) a partner you stand to learn a lot from; or, (3) an experience you can draw on when working with similar customers. It’s tempting to label many customers as “key accounts” at one time, but be conservative. You can’t tell a key account they’ve been demoted, but you can tell a traditional buyer you’re promoting them. Aja Frost, HubSpot Key takeaways That said, here is the general thought process I used and will share so that you can build your own framework: Proactive customer success is not a replacement for quality support. Determine your team’s capacity based on factors like the complexity of your product, account growth, and customer expectations. Determine what your success framework should include — what does this team own? Is it onboarding, renewals, NPS, etc. Spell out your criteria for a managed account and be careful not to make exceptions. Define each of these and any other criteria that are relevant to your business! This will help with determining your success management metrics. Customer Success Management metrics How do you build a compensation plan for a new customer success team and strategy? This is a question that is no stranger to SaaS leaders. You want to incentivize, but it shouldn’t be all about that 💸. As I mentioned earlier — and this doesn’t only pertain to ChartMogul — SaaS and subscription companies with a keen eye on core metrics (churn, retention, expansion) should, at the very least, have a pulse on two easily measurable success management metrics: logo (account) retention and revenue retention. Logo retention is the percentage of customers retained over a given period of time. Whereas revenue retention is simply the percentage of revenue retained over a period of time. Because I’m also building a department, we also outline 4-5 key strategic or growth objectives we’d like to accomplish as a team each quarter. We refer to these as management by objectives, or MBOs. Logo and revenue retention At ChartMogul, we’ve weighted these targets as 50% and 25%, respectively. Logo retention has been assigned a larger weighting simply because strong account retention undeniably promotes stronger revenue retention. If you place too much importance on revenue retention, and not enough on logo retention, it could lead to a culture that encourages decisions being made for the sole purpose of revenue rather than a combination of revenue, customer health, and longevity. MBOs (Management by Objectives) These targets carry the remaining 25% of target. Specific objectives that have been a focus for us include the following: Account health assessment Improving price-to-value alignment ‘x’ number of QBRs (quarterly business reviews) per quarter Defining, refining, and documenting success processes Developing a training program In an early stage startup such as ChartMogul, it’s not expected that you’ll be able to quickly or easily implement a customer health platform like Totango or Gainsight. What you can do in the short-term is to create a shared document that outlines all accounts, including details such as key stakeholders, MRR, plan type, renewal date, account health and action items, to name a few. This document, accompanied by your CRM, will aid in timely and insightful outreach. I suggest saving a copy each quarter so you can track progress across your managed accounts. This assessment will also prove invaluable when the time comes to transition to a more automated and integrated method for measuring customer health. I’ll touch on one more MBO here, and that is ‘improving price to value alignment’. Many SaaS companies find themselves in a position where legacy customers are severely underpaying, but they might also be severely underusing the product. Re-engaging, educating, and enabling these users is crucial to ensure success and help validate what they’re currently paying. So, what is the right timing? Customer Success is where 90% of the revenue is. Jason Lemkin (source) The honest truth is — this is entirely up to the company, and resources at its disposal, to determine when it should make its first hire (or promotion) to create a Customer Success Management team. At ChartMogul, we decided to first build a world class customer service and solutions team before establishing success management. Timing also depends on the product and how high-touch onboarding is. Products that are quite self-service in nature tend to require little-to-no onboarding. Keep in mind, when initiating success management within your company, things tend to get worse before they get better. You might receive a lot of customer feedback initially that uncovers customers who are a bad fit, or customers that have never fully completed their onboarding. All things said, if you’re focusing on logo retention, revenue retention, and quarterly MBOs, and meeting or exceeding targets that are in-line with the broader company metrics, you are well on your way to improved customer health across key accounts and a clearly defined strategy on workflows, processes, and interventions.

<sys> [INST] How to develop a success management strategy [/INST] At ChartMogul, our aim is to help our customers become category leaders. We know that transformational customer success focuses on proactive, strategic engagement. It ensures that users are successful. And this kind of customer success may even transcend traditional boundaries to the collective benefit of all parties. One way that we think about our customer success program can be illustrated by a diagram like this: Imagine the light blue on the pyramid fanning out from left to right, encompassing more of each tier. We work hard to span all areas of the pyramid, with smart feature prioritization, solid help center documentation, regular NPS surveys, and now, proactive customer success. Ingmar, our VP of Customer Success, and our support team cracked the code on first response time and measuring NPS. We realized, however, that we needed to do a better job supporting the strategic vision of our key accounts. Keenly aware of the effects of churn, we agreed to implement a more formal plan to proactively engage and learn from our key accounts. As we grow, we’re able to spend more time developing the proactive tiers of the pyramid without de-prioritizing a strong foundation of fast, helpful ticket replies and features that delight. So, after being charged with the task of building a success management program, I got to thinking: how and where do you begin? Defining your program First, we needed to decide on the number of key accounts — which accounts should be managed? We had to think critically about our capacity. At what rate is the key account segment growing? How many accounts can one Account Manager successfully manage based on the requirements of the program? We also needed to ensure each team and each individual contributor had clear goals and metrics to track success. We summed up our definition of a managed account based on three distinct criteria: Revenue (which should never be a lone indicator) Expansion and growth potential Are they a strategic customer? The first two are fairly obvious. Based on the market you play in (SMB, mid-market, enterprise), you should have a general idea of the complexity of your product and customer relationships. This will help you determine a manageable number of accounts for your 1-to-1 strategy. Do you have gated features, product add-ons or services that you can upsell? These are just a few items that present opportunities for account expansion. If you consider them a strategic partner, this could mean they’re: (1) a recognizable logo you’d love to have on your website as a testimonial or case study; (2) a partner you stand to learn a lot from; or, (3) an experience you can draw on when working with similar customers. It’s tempting to label many customers as “key accounts” at one time, but be conservative. You can’t tell a key account they’ve been demoted, but you can tell a traditional buyer you’re promoting them. Aja Frost, HubSpot Key takeaways That said, here is the general thought process I used and will share so that you can build your own framework: Proactive customer success is not a replacement for quality support. Determine your team’s capacity based on factors like the complexity of your product, account growth, and customer expectations. Determine what your success framework should include — what does this team own? Is it onboarding, renewals, NPS, etc. Spell out your criteria for a managed account and be careful not to make exceptions. Define each of these and any other criteria that are relevant to your business! This will help with determining your success management metrics. Customer Success Management metrics How do you build a compensation plan for a new customer success team and strategy? This is a question that is no stranger to SaaS leaders. You want to incentivize, but it shouldn’t be all about that 💸. As I mentioned earlier — and this doesn’t only pertain to ChartMogul — SaaS and subscription companies with a keen eye on core metrics (churn, retention, expansion) should, at the very least, have a pulse on two easily measurable success management metrics: logo (account) retention and revenue retention. Logo retention is the percentage of customers retained over a given period of time. Whereas revenue retention is simply the percentage of revenue retained over a period of time. Because I’m also building a department, we also outline 4-5 key strategic or growth objectives we’d like to accomplish as a team each quarter. We refer to these as management by objectives, or MBOs. Logo and revenue retention At ChartMogul, we’ve weighted these targets as 50% and 25%, respectively. Logo retention has been assigned a larger weighting simply because strong account retention undeniably promotes stronger revenue retention. If you place too much importance on revenue retention, and not enough on logo retention, it could lead to a culture that encourages decisions being made for the sole purpose of revenue rather than a combination of revenue, customer health, and longevity. MBOs (Management by Objectives) These targets carry the remaining 25% of target. Specific objectives that have been a focus for us include the following: Account health assessment Improving price-to-value alignment ‘x’ number of QBRs (quarterly business reviews) per quarter Defining, refining, and documenting success processes Developing a training program In an early stage startup such as ChartMogul, it’s not expected that you’ll be able to quickly or easily implement a customer health platform like Totango or Gainsight. What you can do in the short-term is to create a shared document that outlines all accounts, including details such as key stakeholders, MRR, plan type, renewal date, account health and action items, to name a few. This document, accompanied by your CRM, will aid in timely and insightful outreach. I suggest saving a copy each quarter so you can track progress across your managed accounts. This assessment will also prove invaluable when the time comes to transition to a more automated and integrated method for measuring customer health. I’ll touch on one more MBO here, and that is ‘improving price to value alignment’. Many SaaS companies find themselves in a position where legacy customers are severely underpaying, but they might also be severely underusing the product. Re-engaging, educating, and enabling these users is crucial to ensure success and help validate what they’re currently paying. So, what is the right timing? Customer Success is where 90% of the revenue is. Jason Lemkin (source) The honest truth is — this is entirely up to the company, and resources at its disposal, to determine when it should make its first hire (or promotion) to create a Customer Success Management team. At ChartMogul, we decided to first build a world class customer service and solutions team before establishing success management. Timing also depends on the product and how high-touch onboarding is. Products that are quite self-service in nature tend to require little-to-no onboarding. Keep in mind, when initiating success management within your company, things tend to get worse before they get better. You might receive a lot of customer feedback initially that uncovers customers who are a bad fit, or customers that have never fully completed their onboarding. All things said, if you’re focusing on logo retention, revenue retention, and quarterly MBOs, and meeting or exceeding targets that are in-line with the broader company metrics, you are well on your way to improved customer health across key accounts and a clearly defined strategy on workflows, processes, and interventions. </sys

Choose How You Classify 100% Discounts; Downgrade and Churn. Update: This feature was previously only available for Stripe, Chargebee, Recurly, and Braintree. It’s now available for new customers with any billing source. We will enable this data setting for current customers with other billing integrations over the next few weeks. Get in touch if you want us to switch it on for you now. When a paying subscriber is given a 100% discount, or moved from a paid plan to a free plan, their Monthly Recurring Revenue (MRR) drops to $0. But is this a downgrade (Contraction MRR) or a cancellation (Churn MRR)? ChartMogul customers are divided on how we should classify these events – and the decision always depends on the specific dynamics of each business. Currently we’re classifying these events as downgrades rather than churn. Therefore, customer churn rate isn’t currently being impacted by these events, although MRR churn rate is. When there’s no universal way of doing something the best thing we can do is provide you with the option. So today we are releasing a new switch you’ll find under Admin > Data settings > Free customer handling: Please note: if you do select the second option, customers who are moved from a paid plan to a free plan, or are given a 100% discount, will start to impact your customer churn numbers and will stop impacting your downgrade/contraction numbers.

[INST] Choose How You Classify 100% Discounts; Downgrade and Churn [/INST]

Update: This feature was previously only available for Stripe, Chargebee, Recurly, and Braintree. It’s now available for new customers with any billing source. We will enable this data setting for current customers with other billing integrations over the next few weeks. Get in touch if you want us to switch it on for you now. When a paying subscriber is given a 100% discount, or moved from a paid plan to a free plan, their Monthly Recurring Revenue (MRR) drops to $0. But is this a downgrade (Contraction MRR) or a cancellation (Churn MRR)? ChartMogul customers are divided on how we should classify these events – and the decision always depends on the specific dynamics of each business. Currently we’re classifying these events as downgrades rather than churn. Therefore, customer churn rate isn’t currently being impacted by these events, although MRR churn rate is. When there’s no universal way of doing something the best thing we can do is provide you with the option. So today we are releasing a new switch you’ll find under Admin > Data settings > Free customer handling: Please note: if you do select the second option, customers who are moved from a paid plan to a free plan, or are given a 100% discount, will start to impact your customer churn numbers and will stop impacting your downgrade/contraction numbers.

<sys> [INST] Choose How You Classify 100% Discounts; Downgrade and Churn [/INST] Update: This feature was previously only available for Stripe, Chargebee, Recurly, and Braintree. It’s now available for new customers with any billing source. We will enable this data setting for current customers with other billing integrations over the next few weeks. Get in touch if you want us to switch it on for you now. When a paying subscriber is given a 100% discount, or moved from a paid plan to a free plan, their Monthly Recurring Revenue (MRR) drops to $0. But is this a downgrade (Contraction MRR) or a cancellation (Churn MRR)? ChartMogul customers are divided on how we should classify these events – and the decision always depends on the specific dynamics of each business. Currently we’re classifying these events as downgrades rather than churn. Therefore, customer churn rate isn’t currently being impacted by these events, although MRR churn rate is. When there’s no universal way of doing something the best thing we can do is provide you with the option. So today we are releasing a new switch you’ll find under Admin > Data settings > Free customer handling: Please note: if you do select the second option, customers who are moved from a paid plan to a free plan, or are given a 100% discount, will start to impact your customer churn numbers and will stop impacting your downgrade/contraction numbers. </sys

Using Webhooks.io to split the Recurly Webhook. Several customers have overcome this by simply forwarding/relaying the webhook from their server onto their ChartMogul webhook URL. However this is a little extra work to setup. I recently had the pleasure of trying out webhooks.io and it took me around 5 minutes to setup a webhook receiver with multiple relay destinations. Webhooks.io is still in private beta so this isn’t an ‘official’ recommendation – you’ll have to be a little adventurous to try it out for now. Once you’ve signed up for a beta invite and received your invite (I got mine within 24 hours) you should login to your dashboard and go to Webhook Buckets > Add New Bucket > Give it a name (e.g. Recurly Splitter). Then click Add New Input – this will create a webhook URL that you will later point your Recurly webhook to. Once you’ve done that click on the title of the input and click “New Destination”. Here you define where to send the webhook, e.g. ChartMogul or your checkout system. You can then define your destination URL (where to forward the webhook to) and have the ability to setup custom retry policies. You can create multiple destinations, one for your checkout, one for ChartMogul, etc. It’s really useful for us at ChartMogul internally as we have multiple developers testing our Recurly integration so we can have the webhook forwarded to our staging and development servers. The last step is to go into your Recurly dashboard and point your Recurly webhook at the webhooks.io input URL. Once you’re done you get a useful dashboard showing successful and failed deliveries per destination. Webhooks.io is currently free while in private beta and I’m not sure what it will cost once released. We’ve been impressed with what we’ve seen so far, it solves a pain point that many of our Recurly customers are experiencing and we’re eagerly awaiting it’s formal release so we can start recommending it.

[INST] Using Webhooks [/INST]

io to split the Recurly Webhook. Several customers have overcome this by simply forwarding/relaying the webhook from their server onto their ChartMogul webhook URL. However this is a little extra work to setup. I recently had the pleasure of trying out webhooks.io and it took me around 5 minutes to setup a webhook receiver with multiple relay destinations. Webhooks.io is still in private beta so this isn’t an ‘official’ recommendation – you’ll have to be a little adventurous to try it out for now. Once you’ve signed up for a beta invite and received your invite (I got mine within 24 hours) you should login to your dashboard and go to Webhook Buckets > Add New Bucket > Give it a name (e.g. Recurly Splitter). Then click Add New Input – this will create a webhook URL that you will later point your Recurly webhook to. Once you’ve done that click on the title of the input and click “New Destination”. Here you define where to send the webhook, e.g. ChartMogul or your checkout system. You can then define your destination URL (where to forward the webhook to) and have the ability to setup custom retry policies. You can create multiple destinations, one for your checkout, one for ChartMogul, etc. It’s really useful for us at ChartMogul internally as we have multiple developers testing our Recurly integration so we can have the webhook forwarded to our staging and development servers. The last step is to go into your Recurly dashboard and point your Recurly webhook at the webhooks.io input URL. Once you’re done you get a useful dashboard showing successful and failed deliveries per destination. Webhooks.io is currently free while in private beta and I’m not sure what it will cost once released. We’ve been impressed with what we’ve seen so far, it solves a pain point that many of our Recurly customers are experiencing and we’re eagerly awaiting it’s formal release so we can start recommending it.

<sys> [INST] Using Webhooks [/INST]io to split the Recurly Webhook. Several customers have overcome this by simply forwarding/relaying the webhook from their server onto their ChartMogul webhook URL. However this is a little extra work to setup. I recently had the pleasure of trying out webhooks.io and it took me around 5 minutes to setup a webhook receiver with multiple relay destinations. Webhooks.io is still in private beta so this isn’t an ‘official’ recommendation – you’ll have to be a little adventurous to try it out for now. Once you’ve signed up for a beta invite and received your invite (I got mine within 24 hours) you should login to your dashboard and go to Webhook Buckets > Add New Bucket > Give it a name (e.g. Recurly Splitter). Then click Add New Input – this will create a webhook URL that you will later point your Recurly webhook to. Once you’ve done that click on the title of the input and click “New Destination”. Here you define where to send the webhook, e.g. ChartMogul or your checkout system. You can then define your destination URL (where to forward the webhook to) and have the ability to setup custom retry policies. You can create multiple destinations, one for your checkout, one for ChartMogul, etc. It’s really useful for us at ChartMogul internally as we have multiple developers testing our Recurly integration so we can have the webhook forwarded to our staging and development servers. The last step is to go into your Recurly dashboard and point your Recurly webhook at the webhooks.io input URL. Once you’re done you get a useful dashboard showing successful and failed deliveries per destination. Webhooks.io is currently free while in private beta and I’m not sure what it will cost once released. We’ve been impressed with what we’ve seen so far, it solves a pain point that many of our Recurly customers are experiencing and we’re eagerly awaiting it’s formal release so we can start recommending it. </sys

SaaS Metrics Refresher #7: Revenue Recognition. Repeat after me: cash is not revenue! There are a set of rules and guidelines focused around how businesses calculate and recognize revenue, and if you report earnings to investors or other business stakeholders, they’ll want to see this. Revenue recognition is a critical piece of accounting for any business. For a SaaS or subscription business, revenue recognition can be complex, mainly because of the service-oriented nature of the product. While your customers may pay you a lump sum upfront for a year’s worth of usage, you won’t be able to categorize that entire amount of cash as revenue right away. Definition: what is revenue recognition? Revenue recognition is the process of converting bookings (and the subsequent cash from those bookings) into revenue within your business. Key terminology GAAP (Generally Accepted Accounting Principles) — Vary by country but most people refer to US GAAP. FASB (Financial Accounting Standards Board) — A Standard setting body that issues guidelines. ASC 606 – Accounting Standards Codification related to revenue recognition. Balance sheet (has two sides) — one side reflects assets, the other liabilities & equity. Income statement — reflects the results of a period by showing revenue and expenses a company incurred. Recognized Revenue — commonly referred to as just “revenue” and reflected in the income statement. Payments that fulfill five criteria (see below) can be considered recognized revenue. Deferred Revenue — relates to payments that have been received by the company, but for which goods or services have not yet been provided. It is reflected as a liability on the balance sheet because the company is still liable to provide these goods or services. ASC 606 & IFRS 15 “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC ASC 606 and IFRS 15 are standards jointly issued by The Financial Accounting Standards Board and the International Accounting Standards Board. The goal of these standards is to smooth over how contracted revenue is recognized across industries and around the world. “The new guidance affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards” Financial Standards Accounting Board (FASB) The good news for SaaS and subscription businesses is that they actually simplify and unify a lot of the obligations for revenue recognition, where it was previously lacking consistency. But the new standards may require an overhaul of your company’s financial reporting processes. “While SaaS entities may not expect the new revenue standard to affect them as much as other entities, the experiences of public SaaS entities in the past year has shown they should not underestimate its impact.” Deloitte Why is revenue recognition important? The bottom line here is that compliance with the above standards is not optional. The consequences of non-compliance can be severe. You should always fulfill your company’s reporting obligations. The good news however, is that you can take a smart approach when it comes to automating these processes. Depending on the size of your business and the nature of your services — e.g. with a mixture of monthly and annual deals — recognizing revenue can get pretty complex. Automating the creation of deferred and recognized revenue schedule can help save time, reduce complexity and any potential for human error. The guiding principles of revenue recognition under ASC 606 1. Identify the contract with the customer Customer contracts are reasonably straightforward for SaaS businesses — the cost and value exchange is defined upfront on the website, and there’s little deviance from the pre-defined structure. There’s one complexity here though: In the subscription world, the terms of a contract can change frequently. This includes: When a customer upgrades (expands) their subscription When a customer downgrades (contracts) their subscription When an add-on is purchased, e.g. additional seats These changes could mean creation of a separate contract, but in many cases it’s just a modification of the original. 2. Identify the performance obligations in the contract The term “performance obligations” may seem overly vague at first, but it basically just refers to the product (or service) you’re actually delivering to the customer, i.e. what are they getting for their money? The answer is most likely “a month’s worth of access to my service.” 3. Determine the transaction price With the exception of some custom enterprise deals, the price of most SaaS contracts is a known quantity — it’s clearly defined upfront (on the pricing page). When we talk about transaction price here, we’re always talking about the net price. 4. Allocate the transaction price to separate performance obligations For SaaS, the product is delivered continually (“as a service”). This means that there aren’t really separate performance obligations — rather one continuous performance obligation. What we do here is allocate a share of the billing value to each month that contains at least some part of the service period. The share of the value assigned to a month equals the share of the billing period that falls into this month. 5. Recognize revenue as each performance obligation is satisfied There are actually five criteria for recognizing revenue as per ASC 606. If the prerequisites are not all met, you cannot recognize the billings as revenue. Risks and rewards have been transferred from the seller to the buyer The seller has no control over the goods sold The collection of payment is reasonably assured The amount of revenue can be reasonably measured The costs of earning the revenue can be reasonably measured Tracking and analyzing recognized revenue While most businesses will likely start out with a basic spreadsheet, there are a number of ways you can track revenue recognition that go beyond simple tables, and help make the connection between cashflow and revenue. A revenue waterfall is useful to see how billing amounts turn into revenue over time. Due to different billing cycles, payment terms and other complexities, the amount billed in a single month may not all be recognized as revenue until some months later. The revenue waterfall visualizes the billing volume top to bottom and recognized revenue by month from left to right. The two dimensions of the revenue waterfall table connect billing and revenue so that you can get a clear picture of how each months’ billings are translated into recognized revenue over time: A revenue waterfall in ChartMogul Resources and Further Reading DOWNLOADABLES The new revenue recognition standard [PDF] (EY) BASICS The complete guide to SaaS revenue recognition with ASC 606 (ChartMogul) — Includes more detail on many of the concepts discussed here. ASC 606 — Revenue From Contracts With Customers (Deloitte) Revenue from contracts with customers (PWC) Handbook: Revenue for software and SaaS (KPMG) DEEP CUTS Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG

[INST] SaaS Metrics Refresher #7: Revenue Recognition [/INST]

Repeat after me: cash is not revenue! There are a set of rules and guidelines focused around how businesses calculate and recognize revenue, and if you report earnings to investors or other business stakeholders, they’ll want to see this. Revenue recognition is a critical piece of accounting for any business. For a SaaS or subscription business, revenue recognition can be complex, mainly because of the service-oriented nature of the product. While your customers may pay you a lump sum upfront for a year’s worth of usage, you won’t be able to categorize that entire amount of cash as revenue right away. Definition: what is revenue recognition? Revenue recognition is the process of converting bookings (and the subsequent cash from those bookings) into revenue within your business. Key terminology GAAP (Generally Accepted Accounting Principles) — Vary by country but most people refer to US GAAP. FASB (Financial Accounting Standards Board) — A Standard setting body that issues guidelines. ASC 606 – Accounting Standards Codification related to revenue recognition. Balance sheet (has two sides) — one side reflects assets, the other liabilities & equity. Income statement — reflects the results of a period by showing revenue and expenses a company incurred. Recognized Revenue — commonly referred to as just “revenue” and reflected in the income statement. Payments that fulfill five criteria (see below) can be considered recognized revenue. Deferred Revenue — relates to payments that have been received by the company, but for which goods or services have not yet been provided. It is reflected as a liability on the balance sheet because the company is still liable to provide these goods or services. ASC 606 & IFRS 15 “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC ASC 606 and IFRS 15 are standards jointly issued by The Financial Accounting Standards Board and the International Accounting Standards Board. The goal of these standards is to smooth over how contracted revenue is recognized across industries and around the world. “The new guidance affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards” Financial Standards Accounting Board (FASB) The good news for SaaS and subscription businesses is that they actually simplify and unify a lot of the obligations for revenue recognition, where it was previously lacking consistency. But the new standards may require an overhaul of your company’s financial reporting processes. “While SaaS entities may not expect the new revenue standard to affect them as much as other entities, the experiences of public SaaS entities in the past year has shown they should not underestimate its impact.” Deloitte Why is revenue recognition important? The bottom line here is that compliance with the above standards is not optional. The consequences of non-compliance can be severe. You should always fulfill your company’s reporting obligations. The good news however, is that you can take a smart approach when it comes to automating these processes. Depending on the size of your business and the nature of your services — e.g. with a mixture of monthly and annual deals — recognizing revenue can get pretty complex. Automating the creation of deferred and recognized revenue schedule can help save time, reduce complexity and any potential for human error. The guiding principles of revenue recognition under ASC 606 1. Identify the contract with the customer Customer contracts are reasonably straightforward for SaaS businesses — the cost and value exchange is defined upfront on the website, and there’s little deviance from the pre-defined structure. There’s one complexity here though: In the subscription world, the terms of a contract can change frequently. This includes: When a customer upgrades (expands) their subscription When a customer downgrades (contracts) their subscription When an add-on is purchased, e.g. additional seats These changes could mean creation of a separate contract, but in many cases it’s just a modification of the original. 2. Identify the performance obligations in the contract The term “performance obligations” may seem overly vague at first, but it basically just refers to the product (or service) you’re actually delivering to the customer, i.e. what are they getting for their money? The answer is most likely “a month’s worth of access to my service.” 3. Determine the transaction price With the exception of some custom enterprise deals, the price of most SaaS contracts is a known quantity — it’s clearly defined upfront (on the pricing page). When we talk about transaction price here, we’re always talking about the net price. 4. Allocate the transaction price to separate performance obligations For SaaS, the product is delivered continually (“as a service”). This means that there aren’t really separate performance obligations — rather one continuous performance obligation. What we do here is allocate a share of the billing value to each month that contains at least some part of the service period. The share of the value assigned to a month equals the share of the billing period that falls into this month. 5. Recognize revenue as each performance obligation is satisfied There are actually five criteria for recognizing revenue as per ASC 606. If the prerequisites are not all met, you cannot recognize the billings as revenue. Risks and rewards have been transferred from the seller to the buyer The seller has no control over the goods sold The collection of payment is reasonably assured The amount of revenue can be reasonably measured The costs of earning the revenue can be reasonably measured Tracking and analyzing recognized revenue While most businesses will likely start out with a basic spreadsheet, there are a number of ways you can track revenue recognition that go beyond simple tables, and help make the connection between cashflow and revenue. A revenue waterfall is useful to see how billing amounts turn into revenue over time. Due to different billing cycles, payment terms and other complexities, the amount billed in a single month may not all be recognized as revenue until some months later. The revenue waterfall visualizes the billing volume top to bottom and recognized revenue by month from left to right. The two dimensions of the revenue waterfall table connect billing and revenue so that you can get a clear picture of how each months’ billings are translated into recognized revenue over time: A revenue waterfall in ChartMogul Resources and Further Reading DOWNLOADABLES The new revenue recognition standard [PDF] (EY) BASICS The complete guide to SaaS revenue recognition with ASC 606 (ChartMogul) — Includes more detail on many of the concepts discussed here. ASC 606 — Revenue From Contracts With Customers (Deloitte) Revenue from contracts with customers (PWC) Handbook: Revenue for software and SaaS (KPMG) DEEP CUTS Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG

<sys> [INST] SaaS Metrics Refresher #7: Revenue Recognition [/INST] Repeat after me: cash is not revenue! There are a set of rules and guidelines focused around how businesses calculate and recognize revenue, and if you report earnings to investors or other business stakeholders, they’ll want to see this. Revenue recognition is a critical piece of accounting for any business. For a SaaS or subscription business, revenue recognition can be complex, mainly because of the service-oriented nature of the product. While your customers may pay you a lump sum upfront for a year’s worth of usage, you won’t be able to categorize that entire amount of cash as revenue right away. Definition: what is revenue recognition? Revenue recognition is the process of converting bookings (and the subsequent cash from those bookings) into revenue within your business. Key terminology GAAP (Generally Accepted Accounting Principles) — Vary by country but most people refer to US GAAP. FASB (Financial Accounting Standards Board) — A Standard setting body that issues guidelines. ASC 606 – Accounting Standards Codification related to revenue recognition. Balance sheet (has two sides) — one side reflects assets, the other liabilities & equity. Income statement — reflects the results of a period by showing revenue and expenses a company incurred. Recognized Revenue — commonly referred to as just “revenue” and reflected in the income statement. Payments that fulfill five criteria (see below) can be considered recognized revenue. Deferred Revenue — relates to payments that have been received by the company, but for which goods or services have not yet been provided. It is reflected as a liability on the balance sheet because the company is still liable to provide these goods or services. ASC 606 & IFRS 15 “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC ASC 606 and IFRS 15 are standards jointly issued by The Financial Accounting Standards Board and the International Accounting Standards Board. The goal of these standards is to smooth over how contracted revenue is recognized across industries and around the world. “The new guidance affects any reporting organization that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards” Financial Standards Accounting Board (FASB) The good news for SaaS and subscription businesses is that they actually simplify and unify a lot of the obligations for revenue recognition, where it was previously lacking consistency. But the new standards may require an overhaul of your company’s financial reporting processes. “While SaaS entities may not expect the new revenue standard to affect them as much as other entities, the experiences of public SaaS entities in the past year has shown they should not underestimate its impact.” Deloitte Why is revenue recognition important? The bottom line here is that compliance with the above standards is not optional. The consequences of non-compliance can be severe. You should always fulfill your company’s reporting obligations. The good news however, is that you can take a smart approach when it comes to automating these processes. Depending on the size of your business and the nature of your services — e.g. with a mixture of monthly and annual deals — recognizing revenue can get pretty complex. Automating the creation of deferred and recognized revenue schedule can help save time, reduce complexity and any potential for human error. The guiding principles of revenue recognition under ASC 606 1. Identify the contract with the customer Customer contracts are reasonably straightforward for SaaS businesses — the cost and value exchange is defined upfront on the website, and there’s little deviance from the pre-defined structure. There’s one complexity here though: In the subscription world, the terms of a contract can change frequently. This includes: When a customer upgrades (expands) their subscription When a customer downgrades (contracts) their subscription When an add-on is purchased, e.g. additional seats These changes could mean creation of a separate contract, but in many cases it’s just a modification of the original. 2. Identify the performance obligations in the contract The term “performance obligations” may seem overly vague at first, but it basically just refers to the product (or service) you’re actually delivering to the customer, i.e. what are they getting for their money? The answer is most likely “a month’s worth of access to my service.” 3. Determine the transaction price With the exception of some custom enterprise deals, the price of most SaaS contracts is a known quantity — it’s clearly defined upfront (on the pricing page). When we talk about transaction price here, we’re always talking about the net price. 4. Allocate the transaction price to separate performance obligations For SaaS, the product is delivered continually (“as a service”). This means that there aren’t really separate performance obligations — rather one continuous performance obligation. What we do here is allocate a share of the billing value to each month that contains at least some part of the service period. The share of the value assigned to a month equals the share of the billing period that falls into this month. 5. Recognize revenue as each performance obligation is satisfied There are actually five criteria for recognizing revenue as per ASC 606. If the prerequisites are not all met, you cannot recognize the billings as revenue. Risks and rewards have been transferred from the seller to the buyer The seller has no control over the goods sold The collection of payment is reasonably assured The amount of revenue can be reasonably measured The costs of earning the revenue can be reasonably measured Tracking and analyzing recognized revenue While most businesses will likely start out with a basic spreadsheet, there are a number of ways you can track revenue recognition that go beyond simple tables, and help make the connection between cashflow and revenue. A revenue waterfall is useful to see how billing amounts turn into revenue over time. Due to different billing cycles, payment terms and other complexities, the amount billed in a single month may not all be recognized as revenue until some months later. The revenue waterfall visualizes the billing volume top to bottom and recognized revenue by month from left to right. The two dimensions of the revenue waterfall table connect billing and revenue so that you can get a clear picture of how each months’ billings are translated into recognized revenue over time: A revenue waterfall in ChartMogul Resources and Further Reading DOWNLOADABLES The new revenue recognition standard [PDF] (EY) BASICS The complete guide to SaaS revenue recognition with ASC 606 (ChartMogul) — Includes more detail on many of the concepts discussed here. ASC 606 — Revenue From Contracts With Customers (Deloitte) Revenue from contracts with customers (PWC) Handbook: Revenue for software and SaaS (KPMG) DEEP CUTS Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG </sys

Schedule ChartMogul Data Downloads Directly to Your Inbox. Now you can receive regular emails with exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) list of all your customers. Up until now it’s only been possible to export your customer metrics directly from the UI, programmatically via our Metrics API, or by configuring a Destination like Amazon Redshift, Google BigQuery, or Snowflake. But what if you don’t have a data warehouse or other cloud storage solution set up just yet? Now you can get these reports sent directly via email – when you want, to whomever you want, and without all the manual work. If you’re regularly pulling data from ChartMogul for further analysis, or sending it along to your investors (or both!), setting up scheduled email exports can improve your workflows and save you lots of time. You can send the following data directly to your inbox: MRR Movements Customers Tags Custom attributes Set Up Scheduled Email Exports Go to Destinations and choose ‘Email’ from the list of Destinations. Choose the data you’d like to export, select frequency (Daily, Weekly, Monthly), and then add your recipients. Once you’ve configured these settings you can expect to receive regular emails from us that your downloads are ready. Data Destinations allow you to export clean and tidy revenue data Combining revenue, product, CRM, and other data sets can help you uncover powerful insights. For example, you could identify users who are more likely to churn and create a plan to prevent it before it occurs. You could also focus on improving retention by creating MRR-based onboarding, or identify and sell to customers who are more likely to expand their subscriptions. Destinations allow you to export subscription data from ChartMogul with just a few clicks. Get in touch with us and let us know which integration you’d like us to build next. Tweet at us, reach out to our success team, or schedule a call with PM Katarina.

[INST] Schedule ChartMogul Data Downloads Directly to Your Inbox [/INST]

Now you can receive regular emails with exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) list of all your customers. Up until now it’s only been possible to export your customer metrics directly from the UI, programmatically via our Metrics API, or by configuring a Destination like Amazon Redshift, Google BigQuery, or Snowflake. But what if you don’t have a data warehouse or other cloud storage solution set up just yet? Now you can get these reports sent directly via email – when you want, to whomever you want, and without all the manual work. If you’re regularly pulling data from ChartMogul for further analysis, or sending it along to your investors (or both!), setting up scheduled email exports can improve your workflows and save you lots of time. You can send the following data directly to your inbox: MRR Movements Customers Tags Custom attributes Set Up Scheduled Email Exports Go to Destinations and choose ‘Email’ from the list of Destinations. Choose the data you’d like to export, select frequency (Daily, Weekly, Monthly), and then add your recipients. Once you’ve configured these settings you can expect to receive regular emails from us that your downloads are ready. Data Destinations allow you to export clean and tidy revenue data Combining revenue, product, CRM, and other data sets can help you uncover powerful insights. For example, you could identify users who are more likely to churn and create a plan to prevent it before it occurs. You could also focus on improving retention by creating MRR-based onboarding, or identify and sell to customers who are more likely to expand their subscriptions. Destinations allow you to export subscription data from ChartMogul with just a few clicks. Get in touch with us and let us know which integration you’d like us to build next. Tweet at us, reach out to our success team, or schedule a call with PM Katarina.

<sys> [INST] Schedule ChartMogul Data Downloads Directly to Your Inbox [/INST] Now you can receive regular emails with exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) list of all your customers. Up until now it’s only been possible to export your customer metrics directly from the UI, programmatically via our Metrics API, or by configuring a Destination like Amazon Redshift, Google BigQuery, or Snowflake. But what if you don’t have a data warehouse or other cloud storage solution set up just yet? Now you can get these reports sent directly via email – when you want, to whomever you want, and without all the manual work. If you’re regularly pulling data from ChartMogul for further analysis, or sending it along to your investors (or both!), setting up scheduled email exports can improve your workflows and save you lots of time. You can send the following data directly to your inbox: MRR Movements Customers Tags Custom attributes Set Up Scheduled Email Exports Go to Destinations and choose ‘Email’ from the list of Destinations. Choose the data you’d like to export, select frequency (Daily, Weekly, Monthly), and then add your recipients. Once you’ve configured these settings you can expect to receive regular emails from us that your downloads are ready. Data Destinations allow you to export clean and tidy revenue data Combining revenue, product, CRM, and other data sets can help you uncover powerful insights. For example, you could identify users who are more likely to churn and create a plan to prevent it before it occurs. You could also focus on improving retention by creating MRR-based onboarding, or identify and sell to customers who are more likely to expand their subscriptions. Destinations allow you to export subscription data from ChartMogul with just a few clicks. Get in touch with us and let us know which integration you’d like us to build next. Tweet at us, reach out to our success team, or schedule a call with PM Katarina. </sys

Why your company should have a Freaky Friday. For me, those two “Freaky Friday” hours on a Friday morning are the point of the week that I most look forward to in the ChartMogul Marketing team. It’s a time when each of us has an enforced reason for stepping away from their laptop screen, to take a couple of hours and gain some perspective on the why, as well as the high-level ‘what’. I asked Annie, our Content Manager, for her input on what the session means for her: “For me it’s great to step outside of the Content Calendar, which otherwise rules activity and directs focus, and into a wide open space with room enough for the big picture. There are no limits. There you can stretch! It’s like a stretching session for your mind, keeping you limber and agile, so that when you’re back at your desk and in front of your computer, new ideas and creative angles continue coming to you. No one wants to be stuck, no matter what they’re doing — content marketing or otherwise.” The core rules of Freaky Friday Have a topic. Try to go with open-ended questions, especially the ones that start with “What if…?” Don’t be afraid to turn things on their head, this is the part where anything goes. One of our latest ones was “What if we could no longer have a blog?” NO input is wrong. If anyone goes about shooting down ideas, they’re not welcome in the room. Everyone should feel comfortable suggesting anything at all. As Annie mentions, this doesn’t always come naturally: “Another great thing about Freaky Fridays is that you learn about your team, how people think, where their strength lies. Just through spitballing in a setting where there’s no judgment of ideas, you’re learning to understand each other and how to better work together. Personally it helped me get comfortable in my new role at a new company, to feel at ease (and yet more confident) around my new teammates, Ed and Matthias. For any team, it may take a couple of Freaky Fridays — a warm-up period — for people to get comfortable with sharing potentially stupid or outright impossible ideas in front of their colleagues. But that’s okay.” NO screens. This is screen-off time. Just you and a whiteboard or paper. Force yourself to come up with stupid ideas. Those ideas that go down like a lead balloon. Stupid ideas have more in common with the stunningly beautiful ones than you think — they’re further out towards the fringes of what’s acceptable. That’s where the good stuff is, so generate plenty of awful ideas. Pick one experiment. By the end of the session, aim to come away with one actionable experiment that you can take action on before the next meeting to test the hypothesis. Make sure you have a clear way to test whether it failed or succeeded. After the session, everyone involved should work on validating the suggested experiment. A word from Annie on this: “It’s important to book time to actually pursue some of the legitimate ideas you’ve come up with. Especially when you’re in a fast-paced startup environment, with a lot to do, and with one eye always on the next thing coming down the pipeline. If you don’t dedicate time to pursuing your Freaky Friday gems, then you just keep stockpiling “things to try,” and that doesn’t feel too great, either.” Content Marketing’s 3 biggest myths Content Marketing, in my opinion, is an often-misunderstood process in business. The following aspects are what I see as the biggest misconceptions: Myth 1: Content is 80% writing, 20% promoting File this one alongside “Just do great work, and they will come”. Trust me, nobody will come – nobody gives a damn. If you’re putting the majority of your effort into writing, you’re not achieving the potential reach of said content. Your hard work is wasted. Myth 2: Content Marketing is formulaic I don’t know about most people — and I’m certainly not most people — but ideas don’t hit me while I’m sitting at my desk, staring at the WordPress dashboard. The last successful piece I wrote was on a flight. The last great idea I had came to me when I decided to go for a walk out of frustration. Most other things hit me in the shower. Creativity can’t be forced — it’s like a plant that once seeded, requires the right conditions and nurturing in order to sprout. Your desk is an arid, nutrient-weak environment, and the sooner your boss can understand this, the better for your content strategy. If you want to be inspired about creativity even more, I urge you to watch this rather ‘vintage’ interview with comedian and writer John Cleese, which remains 100% relevant in today’s world: MacKinnon showed that the most creative had simply acquired a facility for getting themselves into a particular mood — “a way of operating” — which allowed their natural creativity to function. In fact, MacKinnon described this particular facility as an ability to play. Indeed he described the most creative (when in this mood) as being childlike. For they were able to play with ideas… to explore them… not for any immediate practical purpose but just for enjoyment. Play for its own sake. (You can also read the full transcript here.) Myth 3: Content Marketing can be “growth-hacked” to success In this world, everyone wants to feed you “quick wins” and “growth hacks”. I’ll let you in on a secret: The folks truly succeeding at this game are NOT the ones posting (and reading about) growth hacks. The truly successful guys are busy just getting on with it. They’re figuring out their niche, finding their voice and letting things flow. If you’re following a recipe, you’re not creating anything new. Picasso didn’t paint by numbers, so shut yourself off from the world and do you your own thing. Doesn’t assigning time to be “creative” go against the very notion of creativity? Yes. I completely agree — creativity should be something bred into the DNA of a business and nurtured throughout its growth. But here’s the thing: I bet 99% of people reading this would NOT call their company ‘highly creative’. So what are you going to do about it? For us, Freaky Friday is a starting point — a foot in the door to creativity in a business that’s still finding its feet, and shaping its culture. In encouraging everyone to practice, rehearse in this way, I think people’s tendency to apply the same sort of thinking to other problems outside this environment will grow. Think of creativity as a muscle. It requires regular structured training and exercising, otherwise you won’t be able to apply it very effectively when you really need it. Final note: I apologize if you were expecting something more along these lines when you saw the term “Freaky Friday”:

[INST] Why your company should have a Freaky Friday [/INST]

For me, those two “Freaky Friday” hours on a Friday morning are the point of the week that I most look forward to in the ChartMogul Marketing team. It’s a time when each of us has an enforced reason for stepping away from their laptop screen, to take a couple of hours and gain some perspective on the why, as well as the high-level ‘what’. I asked Annie, our Content Manager, for her input on what the session means for her: “For me it’s great to step outside of the Content Calendar, which otherwise rules activity and directs focus, and into a wide open space with room enough for the big picture. There are no limits. There you can stretch! It’s like a stretching session for your mind, keeping you limber and agile, so that when you’re back at your desk and in front of your computer, new ideas and creative angles continue coming to you. No one wants to be stuck, no matter what they’re doing — content marketing or otherwise.” The core rules of Freaky Friday Have a topic. Try to go with open-ended questions, especially the ones that start with “What if…?” Don’t be afraid to turn things on their head, this is the part where anything goes. One of our latest ones was “What if we could no longer have a blog?” NO input is wrong. If anyone goes about shooting down ideas, they’re not welcome in the room. Everyone should feel comfortable suggesting anything at all. As Annie mentions, this doesn’t always come naturally: “Another great thing about Freaky Fridays is that you learn about your team, how people think, where their strength lies. Just through spitballing in a setting where there’s no judgment of ideas, you’re learning to understand each other and how to better work together. Personally it helped me get comfortable in my new role at a new company, to feel at ease (and yet more confident) around my new teammates, Ed and Matthias. For any team, it may take a couple of Freaky Fridays — a warm-up period — for people to get comfortable with sharing potentially stupid or outright impossible ideas in front of their colleagues. But that’s okay.” NO screens. This is screen-off time. Just you and a whiteboard or paper. Force yourself to come up with stupid ideas. Those ideas that go down like a lead balloon. Stupid ideas have more in common with the stunningly beautiful ones than you think — they’re further out towards the fringes of what’s acceptable. That’s where the good stuff is, so generate plenty of awful ideas. Pick one experiment. By the end of the session, aim to come away with one actionable experiment that you can take action on before the next meeting to test the hypothesis. Make sure you have a clear way to test whether it failed or succeeded. After the session, everyone involved should work on validating the suggested experiment. A word from Annie on this: “It’s important to book time to actually pursue some of the legitimate ideas you’ve come up with. Especially when you’re in a fast-paced startup environment, with a lot to do, and with one eye always on the next thing coming down the pipeline. If you don’t dedicate time to pursuing your Freaky Friday gems, then you just keep stockpiling “things to try,” and that doesn’t feel too great, either.” Content Marketing’s 3 biggest myths Content Marketing, in my opinion, is an often-misunderstood process in business. The following aspects are what I see as the biggest misconceptions: Myth 1: Content is 80% writing, 20% promoting File this one alongside “Just do great work, and they will come”. Trust me, nobody will come – nobody gives a damn. If you’re putting the majority of your effort into writing, you’re not achieving the potential reach of said content. Your hard work is wasted. Myth 2: Content Marketing is formulaic I don’t know about most people — and I’m certainly not most people — but ideas don’t hit me while I’m sitting at my desk, staring at the WordPress dashboard. The last successful piece I wrote was on a flight. The last great idea I had came to me when I decided to go for a walk out of frustration. Most other things hit me in the shower. Creativity can’t be forced — it’s like a plant that once seeded, requires the right conditions and nurturing in order to sprout. Your desk is an arid, nutrient-weak environment, and the sooner your boss can understand this, the better for your content strategy. If you want to be inspired about creativity even more, I urge you to watch this rather ‘vintage’ interview with comedian and writer John Cleese, which remains 100% relevant in today’s world: MacKinnon showed that the most creative had simply acquired a facility for getting themselves into a particular mood — “a way of operating” — which allowed their natural creativity to function. In fact, MacKinnon described this particular facility as an ability to play. Indeed he described the most creative (when in this mood) as being childlike. For they were able to play with ideas… to explore them… not for any immediate practical purpose but just for enjoyment. Play for its own sake. (You can also read the full transcript here.) Myth 3: Content Marketing can be “growth-hacked” to success In this world, everyone wants to feed you “quick wins” and “growth hacks”. I’ll let you in on a secret: The folks truly succeeding at this game are NOT the ones posting (and reading about) growth hacks. The truly successful guys are busy just getting on with it. They’re figuring out their niche, finding their voice and letting things flow. If you’re following a recipe, you’re not creating anything new. Picasso didn’t paint by numbers, so shut yourself off from the world and do you your own thing. Doesn’t assigning time to be “creative” go against the very notion of creativity? Yes. I completely agree — creativity should be something bred into the DNA of a business and nurtured throughout its growth. But here’s the thing: I bet 99% of people reading this would NOT call their company ‘highly creative’. So what are you going to do about it? For us, Freaky Friday is a starting point — a foot in the door to creativity in a business that’s still finding its feet, and shaping its culture. In encouraging everyone to practice, rehearse in this way, I think people’s tendency to apply the same sort of thinking to other problems outside this environment will grow. Think of creativity as a muscle. It requires regular structured training and exercising, otherwise you won’t be able to apply it very effectively when you really need it. Final note: I apologize if you were expecting something more along these lines when you saw the term “Freaky Friday”:

<sys> [INST] Why your company should have a Freaky Friday [/INST] For me, those two “Freaky Friday” hours on a Friday morning are the point of the week that I most look forward to in the ChartMogul Marketing team. It’s a time when each of us has an enforced reason for stepping away from their laptop screen, to take a couple of hours and gain some perspective on the why, as well as the high-level ‘what’. I asked Annie, our Content Manager, for her input on what the session means for her: “For me it’s great to step outside of the Content Calendar, which otherwise rules activity and directs focus, and into a wide open space with room enough for the big picture. There are no limits. There you can stretch! It’s like a stretching session for your mind, keeping you limber and agile, so that when you’re back at your desk and in front of your computer, new ideas and creative angles continue coming to you. No one wants to be stuck, no matter what they’re doing — content marketing or otherwise.” The core rules of Freaky Friday Have a topic. Try to go with open-ended questions, especially the ones that start with “What if…?” Don’t be afraid to turn things on their head, this is the part where anything goes. One of our latest ones was “What if we could no longer have a blog?” NO input is wrong. If anyone goes about shooting down ideas, they’re not welcome in the room. Everyone should feel comfortable suggesting anything at all. As Annie mentions, this doesn’t always come naturally: “Another great thing about Freaky Fridays is that you learn about your team, how people think, where their strength lies. Just through spitballing in a setting where there’s no judgment of ideas, you’re learning to understand each other and how to better work together. Personally it helped me get comfortable in my new role at a new company, to feel at ease (and yet more confident) around my new teammates, Ed and Matthias. For any team, it may take a couple of Freaky Fridays — a warm-up period — for people to get comfortable with sharing potentially stupid or outright impossible ideas in front of their colleagues. But that’s okay.” NO screens. This is screen-off time. Just you and a whiteboard or paper. Force yourself to come up with stupid ideas. Those ideas that go down like a lead balloon. Stupid ideas have more in common with the stunningly beautiful ones than you think — they’re further out towards the fringes of what’s acceptable. That’s where the good stuff is, so generate plenty of awful ideas. Pick one experiment. By the end of the session, aim to come away with one actionable experiment that you can take action on before the next meeting to test the hypothesis. Make sure you have a clear way to test whether it failed or succeeded. After the session, everyone involved should work on validating the suggested experiment. A word from Annie on this: “It’s important to book time to actually pursue some of the legitimate ideas you’ve come up with. Especially when you’re in a fast-paced startup environment, with a lot to do, and with one eye always on the next thing coming down the pipeline. If you don’t dedicate time to pursuing your Freaky Friday gems, then you just keep stockpiling “things to try,” and that doesn’t feel too great, either.” Content Marketing’s 3 biggest myths Content Marketing, in my opinion, is an often-misunderstood process in business. The following aspects are what I see as the biggest misconceptions: Myth 1: Content is 80% writing, 20% promoting File this one alongside “Just do great work, and they will come”. Trust me, nobody will come – nobody gives a damn. If you’re putting the majority of your effort into writing, you’re not achieving the potential reach of said content. Your hard work is wasted. Myth 2: Content Marketing is formulaic I don’t know about most people — and I’m certainly not most people — but ideas don’t hit me while I’m sitting at my desk, staring at the WordPress dashboard. The last successful piece I wrote was on a flight. The last great idea I had came to me when I decided to go for a walk out of frustration. Most other things hit me in the shower. Creativity can’t be forced — it’s like a plant that once seeded, requires the right conditions and nurturing in order to sprout. Your desk is an arid, nutrient-weak environment, and the sooner your boss can understand this, the better for your content strategy. If you want to be inspired about creativity even more, I urge you to watch this rather ‘vintage’ interview with comedian and writer John Cleese, which remains 100% relevant in today’s world: MacKinnon showed that the most creative had simply acquired a facility for getting themselves into a particular mood — “a way of operating” — which allowed their natural creativity to function. In fact, MacKinnon described this particular facility as an ability to play. Indeed he described the most creative (when in this mood) as being childlike. For they were able to play with ideas… to explore them… not for any immediate practical purpose but just for enjoyment. Play for its own sake. (You can also read the full transcript here.) Myth 3: Content Marketing can be “growth-hacked” to success In this world, everyone wants to feed you “quick wins” and “growth hacks”. I’ll let you in on a secret: The folks truly succeeding at this game are NOT the ones posting (and reading about) growth hacks. The truly successful guys are busy just getting on with it. They’re figuring out their niche, finding their voice and letting things flow. If you’re following a recipe, you’re not creating anything new. Picasso didn’t paint by numbers, so shut yourself off from the world and do you your own thing. Doesn’t assigning time to be “creative” go against the very notion of creativity? Yes. I completely agree — creativity should be something bred into the DNA of a business and nurtured throughout its growth. But here’s the thing: I bet 99% of people reading this would NOT call their company ‘highly creative’. So what are you going to do about it? For us, Freaky Friday is a starting point — a foot in the door to creativity in a business that’s still finding its feet, and shaping its culture. In encouraging everyone to practice, rehearse in this way, I think people’s tendency to apply the same sort of thinking to other problems outside this environment will grow. Think of creativity as a muscle. It requires regular structured training and exercising, otherwise you won’t be able to apply it very effectively when you really need it. Final note: I apologize if you were expecting something more along these lines when you saw the term “Freaky Friday”: </sys

How do you know when you’ve reached Product-Market Fit?. What is PMF? At the risk of being redundant, the oft cited definition of PMF comes from Marc Andreessen: “Product/market fit means being in a good market with a product that can satisfy that market.” – Marc Andreessen The definition is vague and fluid. It reflects how PMF is a moving target — markets change, right? As a result, it’s difficult to know when you’ve reached PMF. In a lot of cases, it’s more a sense of PMF. The following outlines some approaches to follow this instinct and also measure your progress toward it. What are some approaches to achieving PMF? Approaches to PMF vary based on the market you’re heading into. Is the product category already established, with competitors on whom you can innovate? Are you embarking on new territory with a new solution? Most experts say focus on finding the right market, one that is both large enough and also has a dire need. Marc Andreessen says market is the most important component of PMF, because, all else aside, the right market will pull the product out of you. Plus if you spend time developing a great product or technology for a perceived problem, and treat market as a secondary concern, then you may end up with no one to sell to. Or, more likely, end up selling in a market that’s too small to fuel scaling and warrant investment. Once you’ve identified your market and the problem you’re trying to solve, then it’s a relentless focus on product — but through the prism of market validation and customer feedback. Critical observation of the market and critical listening to customers are common denominators of any approach to PMF. Reaching PMF requires a constant feedback loop between the customer and you, or the product development team. It’s what Joel York calls the “listen, build, deliver” loop. How do you know when you are there? You often hear the term “initial traction.” The point is to move from manual traction to automatic traction. A focused example of this: going from individually reaching out to prospects and getting them to try your product, to a flow of inbound prospects seeking you out. When that traction is automatic, your focus shifts from nailing a product that customers want to distributing your product and scaling to serve your growing customer base. There are qualitative and quantitative metrics you can track. None are a litmus test; rather look at these as a matrix of indicators. It’s tricky because there are no benchmarks. The circumstances and metrics of PMF for one business could be completely different for yours. You simply have to keep an eye and an ear on your own business — cranking, tweaking, and iterating until the engine runs smoothly on its own. Customer dependency Your customers do not want to, or couldn’t, function without your product. Sean Ellis released a survey based on this concept, to gauge your customer dependency. User engagement This is tied to customer dependency, but you can gather the data yourself rather than by surveying your users. Follow data points that show your customers are spending an exponentially higher amount of time within your product, using more features, or checking it at shorter and shorter intervals. Reduced lead times and shorter sales cycle These indicate that your potential customers need your solution and see the value in your product. They are willing — even eager — to try it. Word of mouth/referrals If current customers are recommending your product to others, you know something is working. For some insight on how to encourage this, check out this article on how B2B word of mouth works. Conversion rates Similar to above. As conversion rates increase, you know you are satisfying more and more of the market. Higher initial order value Customers sign on at a higher price point. They’re not just willing to pay for it, they’re paying even more than the cheapest option. Revenue expansion (contract length, renewals, ACV, upgrades) Similar to above. Customer willingness to upgrade their service plan or commit longer reflects that your product not only solves their need, but that your business has the ability to retain and expand on its existing portfolio. Expansion business is key to scaling, eventually becoming the engine of your growth. Standard SaaS metrics you can consider tracking as PMF indicators are CAC:LTV and Churn. [Other sources: Andrew Chen and Notion Capital] This answer was originally published on Quora. You can read the full thread here: How do you know when you have product market fit?

[INST] How do you know when you’ve reached Product-Market Fit? [/INST]

What is PMF? At the risk of being redundant, the oft cited definition of PMF comes from Marc Andreessen: “Product/market fit means being in a good market with a product that can satisfy that market.” – Marc Andreessen The definition is vague and fluid. It reflects how PMF is a moving target — markets change, right? As a result, it’s difficult to know when you’ve reached PMF. In a lot of cases, it’s more a sense of PMF. The following outlines some approaches to follow this instinct and also measure your progress toward it. What are some approaches to achieving PMF? Approaches to PMF vary based on the market you’re heading into. Is the product category already established, with competitors on whom you can innovate? Are you embarking on new territory with a new solution? Most experts say focus on finding the right market, one that is both large enough and also has a dire need. Marc Andreessen says market is the most important component of PMF, because, all else aside, the right market will pull the product out of you. Plus if you spend time developing a great product or technology for a perceived problem, and treat market as a secondary concern, then you may end up with no one to sell to. Or, more likely, end up selling in a market that’s too small to fuel scaling and warrant investment. Once you’ve identified your market and the problem you’re trying to solve, then it’s a relentless focus on product — but through the prism of market validation and customer feedback. Critical observation of the market and critical listening to customers are common denominators of any approach to PMF. Reaching PMF requires a constant feedback loop between the customer and you, or the product development team. It’s what Joel York calls the “listen, build, deliver” loop. How do you know when you are there? You often hear the term “initial traction.” The point is to move from manual traction to automatic traction. A focused example of this: going from individually reaching out to prospects and getting them to try your product, to a flow of inbound prospects seeking you out. When that traction is automatic, your focus shifts from nailing a product that customers want to distributing your product and scaling to serve your growing customer base. There are qualitative and quantitative metrics you can track. None are a litmus test; rather look at these as a matrix of indicators. It’s tricky because there are no benchmarks. The circumstances and metrics of PMF for one business could be completely different for yours. You simply have to keep an eye and an ear on your own business — cranking, tweaking, and iterating until the engine runs smoothly on its own. Customer dependency Your customers do not want to, or couldn’t, function without your product. Sean Ellis released a survey based on this concept, to gauge your customer dependency. User engagement This is tied to customer dependency, but you can gather the data yourself rather than by surveying your users. Follow data points that show your customers are spending an exponentially higher amount of time within your product, using more features, or checking it at shorter and shorter intervals. Reduced lead times and shorter sales cycle These indicate that your potential customers need your solution and see the value in your product. They are willing — even eager — to try it. Word of mouth/referrals If current customers are recommending your product to others, you know something is working. For some insight on how to encourage this, check out this article on how B2B word of mouth works. Conversion rates Similar to above. As conversion rates increase, you know you are satisfying more and more of the market. Higher initial order value Customers sign on at a higher price point. They’re not just willing to pay for it, they’re paying even more than the cheapest option. Revenue expansion (contract length, renewals, ACV, upgrades) Similar to above. Customer willingness to upgrade their service plan or commit longer reflects that your product not only solves their need, but that your business has the ability to retain and expand on its existing portfolio. Expansion business is key to scaling, eventually becoming the engine of your growth. Standard SaaS metrics you can consider tracking as PMF indicators are CAC:LTV and Churn. [Other sources: Andrew Chen and Notion Capital] This answer was originally published on Quora. You can read the full thread here: How do you know when you have product market fit?

<sys> [INST] How do you know when you’ve reached Product-Market Fit? [/INST] What is PMF? At the risk of being redundant, the oft cited definition of PMF comes from Marc Andreessen: “Product/market fit means being in a good market with a product that can satisfy that market.” – Marc Andreessen The definition is vague and fluid. It reflects how PMF is a moving target — markets change, right? As a result, it’s difficult to know when you’ve reached PMF. In a lot of cases, it’s more a sense of PMF. The following outlines some approaches to follow this instinct and also measure your progress toward it. What are some approaches to achieving PMF? Approaches to PMF vary based on the market you’re heading into. Is the product category already established, with competitors on whom you can innovate? Are you embarking on new territory with a new solution? Most experts say focus on finding the right market, one that is both large enough and also has a dire need. Marc Andreessen says market is the most important component of PMF, because, all else aside, the right market will pull the product out of you. Plus if you spend time developing a great product or technology for a perceived problem, and treat market as a secondary concern, then you may end up with no one to sell to. Or, more likely, end up selling in a market that’s too small to fuel scaling and warrant investment. Once you’ve identified your market and the problem you’re trying to solve, then it’s a relentless focus on product — but through the prism of market validation and customer feedback. Critical observation of the market and critical listening to customers are common denominators of any approach to PMF. Reaching PMF requires a constant feedback loop between the customer and you, or the product development team. It’s what Joel York calls the “listen, build, deliver” loop. How do you know when you are there? You often hear the term “initial traction.” The point is to move from manual traction to automatic traction. A focused example of this: going from individually reaching out to prospects and getting them to try your product, to a flow of inbound prospects seeking you out. When that traction is automatic, your focus shifts from nailing a product that customers want to distributing your product and scaling to serve your growing customer base. There are qualitative and quantitative metrics you can track. None are a litmus test; rather look at these as a matrix of indicators. It’s tricky because there are no benchmarks. The circumstances and metrics of PMF for one business could be completely different for yours. You simply have to keep an eye and an ear on your own business — cranking, tweaking, and iterating until the engine runs smoothly on its own. Customer dependency Your customers do not want to, or couldn’t, function without your product. Sean Ellis released a survey based on this concept, to gauge your customer dependency. User engagement This is tied to customer dependency, but you can gather the data yourself rather than by surveying your users. Follow data points that show your customers are spending an exponentially higher amount of time within your product, using more features, or checking it at shorter and shorter intervals. Reduced lead times and shorter sales cycle These indicate that your potential customers need your solution and see the value in your product. They are willing — even eager — to try it. Word of mouth/referrals If current customers are recommending your product to others, you know something is working. For some insight on how to encourage this, check out this article on how B2B word of mouth works. Conversion rates Similar to above. As conversion rates increase, you know you are satisfying more and more of the market. Higher initial order value Customers sign on at a higher price point. They’re not just willing to pay for it, they’re paying even more than the cheapest option. Revenue expansion (contract length, renewals, ACV, upgrades) Similar to above. Customer willingness to upgrade their service plan or commit longer reflects that your product not only solves their need, but that your business has the ability to retain and expand on its existing portfolio. Expansion business is key to scaling, eventually becoming the engine of your growth. Standard SaaS metrics you can consider tracking as PMF indicators are CAC:LTV and Churn. [Other sources: Andrew Chen and Notion Capital] This answer was originally published on Quora. You can read the full thread here: How do you know when you have product market fit? </sys

Rapidly Scaling a Team With Gilles Bertaux of Livestorm. When faced with rapid growth, how does a company adjust, adapt, and evolve? In this week’s SaaS Open Mic podcast, we speak with Gilles Bertaux, CEO and Co-founder of Livestorm. He shares his lessons from the last two years of running and rapidly scaling the company. When the pandemic started, a video engagement platform was exactly what many organizations were looking for. No wonder Livestorm experienced massive growth. 2020 has been very crazy. We went from 30 people to 86 in that single year. And from 1000 to almost 3000 customers by the end of May. I don’t think that’s something that usually happens in a company’s life. Gilles explains how the team was able to grow sustainably and successfully while experiencing unprecedented growth. To support the rapid customer and revenue growth, they needed to build out the team. However, in order to hire and onboard rapidly, they needed to strengthen their frameworks and create a model that would support that hiring velocity. We wanted to have the foundation here to support that new team. We were much more proactive. When you’re in the scaling phase, you’re more in a proactive way of building your new team architecture than a non-scaling phase. Gilles explains his approach to measuring team success, and shares Livestorm’s hiring and onboarding processes, and the metrics that keep the whole team aligned and motivated. Listen to the podcast to learn more about how the ways Livestorm strengthened its company by focusing on building a self-sustaining organization. In this episode of the SaaS Open Mic we discuss: Rapid growth during a pandemic How to tailor priorities and keep focus during a growth phase Establishing clear guidelines and expectations in remote work Measuring success through outputs (and not inputs) Hiring with a standardized process in mind Focus on company values Automating onboarding North Star metric for team alignment

[INST] Rapidly Scaling a Team With Gilles Bertaux of Livestorm [/INST]

When faced with rapid growth, how does a company adjust, adapt, and evolve? In this week’s SaaS Open Mic podcast, we speak with Gilles Bertaux, CEO and Co-founder of Livestorm. He shares his lessons from the last two years of running and rapidly scaling the company. When the pandemic started, a video engagement platform was exactly what many organizations were looking for. No wonder Livestorm experienced massive growth. 2020 has been very crazy. We went from 30 people to 86 in that single year. And from 1000 to almost 3000 customers by the end of May. I don’t think that’s something that usually happens in a company’s life. Gilles explains how the team was able to grow sustainably and successfully while experiencing unprecedented growth. To support the rapid customer and revenue growth, they needed to build out the team. However, in order to hire and onboard rapidly, they needed to strengthen their frameworks and create a model that would support that hiring velocity. We wanted to have the foundation here to support that new team. We were much more proactive. When you’re in the scaling phase, you’re more in a proactive way of building your new team architecture than a non-scaling phase. Gilles explains his approach to measuring team success, and shares Livestorm’s hiring and onboarding processes, and the metrics that keep the whole team aligned and motivated. Listen to the podcast to learn more about how the ways Livestorm strengthened its company by focusing on building a self-sustaining organization. In this episode of the SaaS Open Mic we discuss: Rapid growth during a pandemic How to tailor priorities and keep focus during a growth phase Establishing clear guidelines and expectations in remote work Measuring success through outputs (and not inputs) Hiring with a standardized process in mind Focus on company values Automating onboarding North Star metric for team alignment

<sys> [INST] Rapidly Scaling a Team With Gilles Bertaux of Livestorm [/INST] When faced with rapid growth, how does a company adjust, adapt, and evolve? In this week’s SaaS Open Mic podcast, we speak with Gilles Bertaux, CEO and Co-founder of Livestorm. He shares his lessons from the last two years of running and rapidly scaling the company. When the pandemic started, a video engagement platform was exactly what many organizations were looking for. No wonder Livestorm experienced massive growth. 2020 has been very crazy. We went from 30 people to 86 in that single year. And from 1000 to almost 3000 customers by the end of May. I don’t think that’s something that usually happens in a company’s life. Gilles explains how the team was able to grow sustainably and successfully while experiencing unprecedented growth. To support the rapid customer and revenue growth, they needed to build out the team. However, in order to hire and onboard rapidly, they needed to strengthen their frameworks and create a model that would support that hiring velocity. We wanted to have the foundation here to support that new team. We were much more proactive. When you’re in the scaling phase, you’re more in a proactive way of building your new team architecture than a non-scaling phase. Gilles explains his approach to measuring team success, and shares Livestorm’s hiring and onboarding processes, and the metrics that keep the whole team aligned and motivated. Listen to the podcast to learn more about how the ways Livestorm strengthened its company by focusing on building a self-sustaining organization. In this episode of the SaaS Open Mic we discuss: Rapid growth during a pandemic How to tailor priorities and keep focus during a growth phase Establishing clear guidelines and expectations in remote work Measuring success through outputs (and not inputs) Hiring with a standardized process in mind Focus on company values Automating onboarding North Star metric for team alignment </sys

Launching the ChartMogul Metrics API. ChartMogul calculates all your key subscription metrics and displays them in a simple & powerful web interface. However, we’ve been getting frequent customer requests to provide a way to easily pull this data into third-party systems such as Geckoboard or in-house reporting dashboards. The ChartMogul Metrics API enables these types of integrations by giving developers simple and secure access to the metrics in your ChartMogul account: Monthly Recurring Revenue (MRR) Customer Lifetime Value (LTV) Customer Churn Rate MRR Churn Rate Average Revenue Per Account (ARPA) Average Sale Price (ASP) Customer profiles and more You can choose the date range you’re interested in and even segment the results by subscription plan or region. We’re really excited by the all the ideas the Metrics API makes possible. If you have any questions or would like to share something cool you’ve built using the API please email [email protected] Everything you need to get started can be found here in the docs.

[INST] Launching the ChartMogul Metrics API [/INST]

ChartMogul calculates all your key subscription metrics and displays them in a simple & powerful web interface. However, we’ve been getting frequent customer requests to provide a way to easily pull this data into third-party systems such as Geckoboard or in-house reporting dashboards. The ChartMogul Metrics API enables these types of integrations by giving developers simple and secure access to the metrics in your ChartMogul account: Monthly Recurring Revenue (MRR) Customer Lifetime Value (LTV) Customer Churn Rate MRR Churn Rate Average Revenue Per Account (ARPA) Average Sale Price (ASP) Customer profiles and more You can choose the date range you’re interested in and even segment the results by subscription plan or region. We’re really excited by the all the ideas the Metrics API makes possible. If you have any questions or would like to share something cool you’ve built using the API please email [email protected] Everything you need to get started can be found here in the docs.

<sys> [INST] Launching the ChartMogul Metrics API [/INST] ChartMogul calculates all your key subscription metrics and displays them in a simple & powerful web interface. However, we’ve been getting frequent customer requests to provide a way to easily pull this data into third-party systems such as Geckoboard or in-house reporting dashboards. The ChartMogul Metrics API enables these types of integrations by giving developers simple and secure access to the metrics in your ChartMogul account: Monthly Recurring Revenue (MRR) Customer Lifetime Value (LTV) Customer Churn Rate MRR Churn Rate Average Revenue Per Account (ARPA) Average Sale Price (ASP) Customer profiles and more You can choose the date range you’re interested in and even segment the results by subscription plan or region. We’re really excited by the all the ideas the Metrics API makes possible. If you have any questions or would like to share something cool you’ve built using the API please email [email protected] Everything you need to get started can be found here in the docs. </sys

SaaS Metrics Refresher #6: Cohort Analysis. Before we get started, let’s address the elephant in the room: Cohort analyses aren’t exactly a SaaS metric. But when it comes to the tools and visualizations at your disposal for growing your SaaS business, cohorts are an essential piece of the puzzle. A cohort analysis enables you to observe how a specific group of customers (a cohort) evolves over time. Understanding user behavior over the course of a customer’s lifetime helps you optimize everything from plans and pricing to product features. Definitions “A cohort is simply a fancy name for a group.” David Skok A cohort is, as Skok suggests, just a predefined grouping of your customers. In reality, when analyzing cohorts for a SaaS business you’re likely to be grouping by date of signup. We call this a time-based cohort analysis. For example, your cohorts might look something like: “Signed up June 2021” “Signed up July 2021” “Signed up August 2021” The reason for this grouping is that it gives us a good segmentation that can show us trends in behavior over time. That “Signed up June 2021” cohort will always remain, and you’ll track their journey as a user of your product. There are other ways to group cohorts for analysis (grouping by segment or size), but time-based cohorts are by far the most common approach in SaaS. A cohort analysis is a visual chart for plotting and comparing the progression of specific metrics for each cohort over time. For example, typically in SaaS we would look at the progression of retention rate, plotting retention values for each month following the cohort’s creation. Cohort analyses also allow us to directly compare cohorts to each other — by lining up the starting date of each cohort. Why are cohort analyses useful? “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital When growing a SaaS business, it’s critical to identify and target problematic points in the customer lifetime. Cohort analyses allow you to do exactly this. Rather than looking at high-level metrics for churn or retention, it’s possible to zone in on the specific months and focus your retention efforts accordingly. Consider which statement is more actionable: “Our customer churn rate is up by 2%.” “Customer churn rate is significantly higher in month three of the customer lifetime.” In the second example, you can focus efforts on understanding what’s happening in month three, engaging with customers at that point in their lifetime and applying additional customer success resources. Note: Cohorts only really work well with monthly subscriptions (or shorter time intervals) and it’s very important not to mix annual subscriptions into your monthly cohorts. How to read a cohort analysis The most common form of cohort analysis is presented in table form, with a few standard characteristics: Each row represents a cohort of users, with the name of the cohort in the first column (e.g., “Feb 2014”) Each column represents a month following the cohort’s creation (month zero being the month of signup). The value in each cell is typically the churn rate or retention rate relative to the previous month. Why are some of the cells blank? Because these cells reference a point in the future! This chart type is extremely useful for quickly identifying problematic months with respect to churn or retention. The color shading (green = low churn, red = high churn) draws our eyes to the problem areas immediately. In this example, month two was showing a spike in churn for earlier cohorts, but appears to have improved from the August 2014 cohort onward. It’s also possible to view a cohort analysis as a stacked line chart: MRR per cohort (stacked) And finally, a “hanging ribbon” chart as demonstrated by David Skok. This chart type does a great job of demonstrating the non-linear characteristics of customer churn: Cohort retention over time Taking cohorts to the next level The key to a meaningful cohort analysis is segmentation, which can give you a highly specific, more actionable insights to base your decisions on. In SaaS, it can be useful to segment cohorts by pricing plan. Typically, each plan will have its own characteristics in terms of churn and retention. Segmenting your cohorts will help uncover this, rather than simply looking at high-level metrics. You can also segment by geographical region, customer characteristics (size of company, etc.) and many more attributes! Resources and Further Reading DOWNLOADABLES The Ultimate Cohort Analysis Cheat Sheet (ChartMogul) — Our comprehensive cheat sheet on performing and interpreting cohort analyses. Print a copy and keep it handy! BASICS Tips & Tricks: Creating a cohort analysis to understand user acquisition (ChartMogul) — This post walks you through a practical example of a specific cohort analysis use case in ChartMogul. Cohort Analysis (ChartMogul) — An in-depth guide on working with cohort analyses in ChartMogul. DEEP CUTS Cohort Analysis: A (practical) Q&A (The Angel VC) — SaaS VC Nicolas Wittenborn covers the finer points of building your own cohort analysis in this useful Q&A post. Make trial-to-paid conversion rates meaningful with Cohorts (ChartMogul) — A specific use case where cohorts can help you understand trial-to-paid conversion rates.

[INST] SaaS Metrics Refresher #6: Cohort Analysis [/INST]

Before we get started, let’s address the elephant in the room: Cohort analyses aren’t exactly a SaaS metric. But when it comes to the tools and visualizations at your disposal for growing your SaaS business, cohorts are an essential piece of the puzzle. A cohort analysis enables you to observe how a specific group of customers (a cohort) evolves over time. Understanding user behavior over the course of a customer’s lifetime helps you optimize everything from plans and pricing to product features. Definitions “A cohort is simply a fancy name for a group.” David Skok A cohort is, as Skok suggests, just a predefined grouping of your customers. In reality, when analyzing cohorts for a SaaS business you’re likely to be grouping by date of signup. We call this a time-based cohort analysis. For example, your cohorts might look something like: “Signed up June 2021” “Signed up July 2021” “Signed up August 2021” The reason for this grouping is that it gives us a good segmentation that can show us trends in behavior over time. That “Signed up June 2021” cohort will always remain, and you’ll track their journey as a user of your product. There are other ways to group cohorts for analysis (grouping by segment or size), but time-based cohorts are by far the most common approach in SaaS. A cohort analysis is a visual chart for plotting and comparing the progression of specific metrics for each cohort over time. For example, typically in SaaS we would look at the progression of retention rate, plotting retention values for each month following the cohort’s creation. Cohort analyses also allow us to directly compare cohorts to each other — by lining up the starting date of each cohort. Why are cohort analyses useful? “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital When growing a SaaS business, it’s critical to identify and target problematic points in the customer lifetime. Cohort analyses allow you to do exactly this. Rather than looking at high-level metrics for churn or retention, it’s possible to zone in on the specific months and focus your retention efforts accordingly. Consider which statement is more actionable: “Our customer churn rate is up by 2%.” “Customer churn rate is significantly higher in month three of the customer lifetime.” In the second example, you can focus efforts on understanding what’s happening in month three, engaging with customers at that point in their lifetime and applying additional customer success resources. Note: Cohorts only really work well with monthly subscriptions (or shorter time intervals) and it’s very important not to mix annual subscriptions into your monthly cohorts. How to read a cohort analysis The most common form of cohort analysis is presented in table form, with a few standard characteristics: Each row represents a cohort of users, with the name of the cohort in the first column (e.g., “Feb 2014”) Each column represents a month following the cohort’s creation (month zero being the month of signup). The value in each cell is typically the churn rate or retention rate relative to the previous month. Why are some of the cells blank? Because these cells reference a point in the future! This chart type is extremely useful for quickly identifying problematic months with respect to churn or retention. The color shading (green = low churn, red = high churn) draws our eyes to the problem areas immediately. In this example, month two was showing a spike in churn for earlier cohorts, but appears to have improved from the August 2014 cohort onward. It’s also possible to view a cohort analysis as a stacked line chart: MRR per cohort (stacked) And finally, a “hanging ribbon” chart as demonstrated by David Skok. This chart type does a great job of demonstrating the non-linear characteristics of customer churn: Cohort retention over time Taking cohorts to the next level The key to a meaningful cohort analysis is segmentation, which can give you a highly specific, more actionable insights to base your decisions on. In SaaS, it can be useful to segment cohorts by pricing plan. Typically, each plan will have its own characteristics in terms of churn and retention. Segmenting your cohorts will help uncover this, rather than simply looking at high-level metrics. You can also segment by geographical region, customer characteristics (size of company, etc.) and many more attributes! Resources and Further Reading DOWNLOADABLES The Ultimate Cohort Analysis Cheat Sheet (ChartMogul) — Our comprehensive cheat sheet on performing and interpreting cohort analyses. Print a copy and keep it handy! BASICS Tips & Tricks: Creating a cohort analysis to understand user acquisition (ChartMogul) — This post walks you through a practical example of a specific cohort analysis use case in ChartMogul. Cohort Analysis (ChartMogul) — An in-depth guide on working with cohort analyses in ChartMogul. DEEP CUTS Cohort Analysis: A (practical) Q&A (The Angel VC) — SaaS VC Nicolas Wittenborn covers the finer points of building your own cohort analysis in this useful Q&A post. Make trial-to-paid conversion rates meaningful with Cohorts (ChartMogul) — A specific use case where cohorts can help you understand trial-to-paid conversion rates.

<sys> [INST] SaaS Metrics Refresher #6: Cohort Analysis [/INST] Before we get started, let’s address the elephant in the room: Cohort analyses aren’t exactly a SaaS metric. But when it comes to the tools and visualizations at your disposal for growing your SaaS business, cohorts are an essential piece of the puzzle. A cohort analysis enables you to observe how a specific group of customers (a cohort) evolves over time. Understanding user behavior over the course of a customer’s lifetime helps you optimize everything from plans and pricing to product features. Definitions “A cohort is simply a fancy name for a group.” David Skok A cohort is, as Skok suggests, just a predefined grouping of your customers. In reality, when analyzing cohorts for a SaaS business you’re likely to be grouping by date of signup. We call this a time-based cohort analysis. For example, your cohorts might look something like: “Signed up June 2021” “Signed up July 2021” “Signed up August 2021” The reason for this grouping is that it gives us a good segmentation that can show us trends in behavior over time. That “Signed up June 2021” cohort will always remain, and you’ll track their journey as a user of your product. There are other ways to group cohorts for analysis (grouping by segment or size), but time-based cohorts are by far the most common approach in SaaS. A cohort analysis is a visual chart for plotting and comparing the progression of specific metrics for each cohort over time. For example, typically in SaaS we would look at the progression of retention rate, plotting retention values for each month following the cohort’s creation. Cohort analyses also allow us to directly compare cohorts to each other — by lining up the starting date of each cohort. Why are cohort analyses useful? “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital When growing a SaaS business, it’s critical to identify and target problematic points in the customer lifetime. Cohort analyses allow you to do exactly this. Rather than looking at high-level metrics for churn or retention, it’s possible to zone in on the specific months and focus your retention efforts accordingly. Consider which statement is more actionable: “Our customer churn rate is up by 2%.” “Customer churn rate is significantly higher in month three of the customer lifetime.” In the second example, you can focus efforts on understanding what’s happening in month three, engaging with customers at that point in their lifetime and applying additional customer success resources. Note: Cohorts only really work well with monthly subscriptions (or shorter time intervals) and it’s very important not to mix annual subscriptions into your monthly cohorts. How to read a cohort analysis The most common form of cohort analysis is presented in table form, with a few standard characteristics: Each row represents a cohort of users, with the name of the cohort in the first column (e.g., “Feb 2014”) Each column represents a month following the cohort’s creation (month zero being the month of signup). The value in each cell is typically the churn rate or retention rate relative to the previous month. Why are some of the cells blank? Because these cells reference a point in the future! This chart type is extremely useful for quickly identifying problematic months with respect to churn or retention. The color shading (green = low churn, red = high churn) draws our eyes to the problem areas immediately. In this example, month two was showing a spike in churn for earlier cohorts, but appears to have improved from the August 2014 cohort onward. It’s also possible to view a cohort analysis as a stacked line chart: MRR per cohort (stacked) And finally, a “hanging ribbon” chart as demonstrated by David Skok. This chart type does a great job of demonstrating the non-linear characteristics of customer churn: Cohort retention over time Taking cohorts to the next level The key to a meaningful cohort analysis is segmentation, which can give you a highly specific, more actionable insights to base your decisions on. In SaaS, it can be useful to segment cohorts by pricing plan. Typically, each plan will have its own characteristics in terms of churn and retention. Segmenting your cohorts will help uncover this, rather than simply looking at high-level metrics. You can also segment by geographical region, customer characteristics (size of company, etc.) and many more attributes! Resources and Further Reading DOWNLOADABLES The Ultimate Cohort Analysis Cheat Sheet (ChartMogul) — Our comprehensive cheat sheet on performing and interpreting cohort analyses. Print a copy and keep it handy! BASICS Tips & Tricks: Creating a cohort analysis to understand user acquisition (ChartMogul) — This post walks you through a practical example of a specific cohort analysis use case in ChartMogul. Cohort Analysis (ChartMogul) — An in-depth guide on working with cohort analyses in ChartMogul. DEEP CUTS Cohort Analysis: A (practical) Q&A (The Angel VC) — SaaS VC Nicolas Wittenborn covers the finer points of building your own cohort analysis in this useful Q&A post. Make trial-to-paid conversion rates meaningful with Cohorts (ChartMogul) — A specific use case where cohorts can help you understand trial-to-paid conversion rates. </sys

Early SaaS growth and the path to $20M ARR. You can also check out this interview on the SaaS Open Mic Podcast, or subscribe on iTunes: Ed: First tell us about Workable. Nikos: Workable is a SaaS software aimed at SMB. What we do is everything around the hiring process. From the moment you make a job description to the moment you put an offer letter to someone. We manage everything — from careers pages, collecting applicants, syndicating your jobs and advertising them, getting your talent pool, helping you collaborate with your colleagues to discuss candidates and manage interviews. The field is typically called “applicant tracking system,” which I really don’t like at all because it’s really old fashioned. Ed: Okay, so it’s managing that whole process end-to-end and giving it a complete solution. How did you guys start? What’s the founding story? Nikos: The company started three years ago, but the product has been on the market for about two. We started in Greece, not a very likely place to start that kind of thing! But by now it’s grown to be a very international company. Our base is in the United States in Boston — I moved here recently and a lot of our people are here. Right now we have 3,300 business customers all over the world; 60% of them are in the US. We are over $5 million ARR and growing at 15% month-over-month. So it’s been doing reasonably well recently. We raised a round of $27 million led by Balderton and Notion. Basically, we’re in that phase where we want to scale the business. The team at Workable. SaaS business model and pricing Ed: There are a lot of good sounding numbers in there so it sounds like things are going pretty well for you guys! If you look back to when you were building the product, was it clear to you from the beginning that the SaaS business model made sense for this product — or did you know from the beginning how you would map that out and how you would price it? Nikos: To be honest with you… No, we didn’t have a very clear idea of everything when we started. We were total noobs back then. But I guess if you start a software company today, it’s likely going to be a cloud software company. It’s likely going to be delivered with a SaaS business model. So, at the time, I don’t think we considered an alternative. What is special about Workable is the targets; it fits SMB very squarely. We are not starting with the small companies with clear intention to go massively upmarket, which is most common. We are actually doing an SMB play. And in terms of pricing, exactly how models and metrics work, things are a little bit distorted on our end because you touch the consumer side of metrics and marketing. Ed: I noticed you guys have five different pricing tiers on your site. Is that to capture the spread of the market that you’re addressing? Was it always that way? Nikos: Actually yes, we haven’t changed pricing all that much. There’s two ways to see that: either we were right all along …or we’re too late to change our pricing. I think for most companies at our stage, it’s probably the second. And it’s one thing that I think about a lot. But to be honest with you, we don’t focus too much on that aspect. When you’re doing an SMB SaaS, it’s more important to capture the growth, capture the customers, meet their needs — and worry later if you could possibly pick up more money from the table. SaaS Growth metrics Ed: In terms of capturing and measuring SaaS growth, how do you measure yourselves and what metrics are really important to you? I guess there are some metrics that you look at everyday and use as an indicator for growth of the product. Nikos: Well, all the obvious SaaS metrics that most people are looking at. MRR, the movements of MRR. We’re looking at churn a lot. I think what’s also not so common but common in our case: we have a lot of small customers that come and go. The interpretation of churn is harder, because a lot of our smaller customers are just using it for four months, and then four months later on. We have a strong reactivation component. So, there are some interesting metrics like the percentage of revenue coming from reactivation, which you can only judge on the basis of the customers that have already been lost, not the customers you have. On the low end of the market, in some of those metrics you might see slight differences in interpretation. But in general, yes we follow the metrics that I see everyone else track. I think that’s a very well-documented part of the business, as well. The business model has matured. If I were starting today, I think in two weeks I could figure out exactly how to monitor and run the business. Of course with a tool like yours, I could even implement it in a day. SMB churn / Seasonality / Reactivation Ed: It’s interesting you mentioned your level of reactivation MRR. I’ve seen a lot of small businesses talk about the problem of customers coming on board for a couple of months, getting the value out of the product, and then leaving again. Is that something you would try to fix in the product, or is that not a problem for you guys because you’re able to measure it — and you know they’ll come back when they need your service again? Nikos: That’s the thing. If you apply traditional enterprise SaaS thinking on a situation like that, you see a problem where there isn’t one. And you’re trying to fix it by actually forcing behaviors that don’t fit the customers. That’s the conclusion that I’ve arrived at. In our case, really small businesses may not be hiring all the time. They may only be hiring once or twice a year. So for them to pay subscription prices all year long doesn’t make sense. To lose their data and start again doesn’t make sense. So one thing that they appreciate about Workable is they can use it for three months, pause it, and come back find all of their data and restart the subscription. And when you look at these customers saying, “I’m canceling my subscription, but I’m really happy and I’ll use it again!” Then you shouldn’t think, “Oh, how do I make these people stay longer?” The thing you have to think about is: How do I make sure the next time they need this, they remember who I am and they come back to me? So, let’s say you have a second order marketing machine. Some people who are in your database: They are customers, they’ve been customers in the past, they know who you are, they know how to use the product. You don’t want to be spamming them with emails every month because that would be very annoying, but you somehow need to stay top-of-mind for them. And how do you track that? You track the activation as a percentage of the sleeping database that you have. That’s an interesting discussion about metrics, by the way. In the beginning, we’re seeing reactivation as a percentage of the MRR that we currently have. But for [this situation], it’s how many sleepers do you have in there, and how do you improve [their reactivation rate]. Ed: I’m assuming that you capture that at the point of cancellation. You must be able to categorize the sleepers from the actual churn. Nikos: To be honest with you, we don’t. I guess we could have easily put a little thing there asking them why they left, but it’s one of those things that we haven’t done. You know, when you grow really fast, a lot of the things you should have done, you just don’t do them because you’re doing the features. But in reality what you would like to do is to capture that, to understand who are the people in that category, and market to them specifically in different ways. Relative to the discussion of metrics, none of these things can be done if you don’t appreciate how big it is for you, how important it is for you. For us for example, it’s really important. For others, it’s not. Ed: Maybe there’s something around the notion of canceling versus pausing. It’s a semantic difference between the two. Nikos: We used to just have “Cancel”. And the customers would say, “No I don’t want to cancel. I just want to stop for a while.” And we said, “Yes you stop, then you resubscribe.” But this wasn’t obvious. So then we made a button that said “Pause” and a separate one that says “Cancel”. SaaS growth and cost at scale Ed: What would you say are the main challenges for you guys growing? Based on what you’ve said, I guess you have a slightly higher churn rate than some other SaaS businesses may have. But what are the main barriers to growth for you? Nikos: It’s not so much the churn because in SMB you have very high customer count churn. But the MRR churn is not big. In fact we have negative net churn. Because the bigger accounts plus some of the upgrades carry it, and the people who left are on the smaller plans. I guess the challenge that I believe we will face, and I think this will be the challenge for a lot of SaaS companies as the industry matures, is that in the beginning you figure out your acquisition economics. And then you can use your channels and your acquisition economics to grow really fast. But as you become bigger, other things enter the financial equation. It’s mostly the question of margins. At a bigger scale, the acquisition economics change. The support and maintenance economics change. You need a bigger organization so then you have to start minding not just how much a customer costs to acquire, but also how much a customer costs to support. The older generation of startup businesses, the ones who have had IPOs in the past couple of years, the playbook was that you eventually go directly up market, and you go to the customers that will pay so much that they will eventually cover all of those costs. So it’s only a challenge to grow. That’s why the focus on VCs, metrics, everybody in the industry is: “Just get the acquisition economics to grow, and then you’re not going to have to worry about it later.” But I think with this second wave of successful SaaS companies, we’re also looking at mid-market and smaller companies. And there the margins are not going to be solved dramatically by going upmarket. So you really need to build a streamlined, highly self-service business and to be mindful of those metrics. Talking about metrics, the SaaS metrics we have are a lot about the usage and the revenue, etc. A lot of companies I see do not have very sophisticated cost-allocation mechanisms inside the company to be able to attribute from salaries, or fully-loaded costs of customer support integrated into the rest of the metrics. And that’s something we’re working on right now. Ed: It’s definitely a challenge to capture all of those costs, everything around the core MRR/acquisition costs. That’s something I’m not sure anybody has solved yet. Would you say there’s a certain tipping point where that suddenly becomes a problem for you — or is it something that you should be thinking about that from the early stage? Nikos: Look, I think what happens is that up until $5–10mil ARR, your main focus is: Can I have scalable sums that can help me grow really fast? But when you get in that area between 5 and 10, then even if you don’t have it yet, you can clearly see the path to 20. Maybe it’ll be a few months earlier or a few months later, but you know you’re going to get to $20mil ARR. And then you start thinking that once I get to 20, I need to build a business that can credibly claim it will have margins at scale. A business that has economics, that can use capital efficiently, that can get from 20 to 100. You can’t start thinking about that once you’re at 20, because then it would be too late. So I think your mindset starts to shift a little bit. As you approach 10, you start thinking that the next big challenge will be [scaling to $100million ARR]. We’re at that stage. Maybe also because we’re at the low-end of the market. So if you have low price point, if your average revenue is $100–200, then it’s much more important. Customer LTV — is it all it’s cracked up to be? Ed: In terms of Customer Lifetime Value… is that something you care about or monitor? There’s a lot of discussion on this out there, but I’m curious to know who is actually able to estimate that and to use it. Nikos: Customer LTV is the one common metric that I don’t care at all about, that I think is misleading. I think it’s misleading in very many ways. The most obvious one is that it’s wrong. It’s really difficult to capture the dynamics of upgrades and changes in the product, etc. I have done calculations with five different methods, including your tool, none of them reflect the minimum [value], much less the reality. When I look back on two years of data, it’s not what I see. So having someone produce a formula that makes sense. Here’s another issue I see with customer LTV — it’s what I like to call the “Company Lifetime Value.” What I mean is that when you are VC-funded company, and you operate on 18 months of runway, and your LTV is really good — four years later, you’re not going to be there to see it. You have to be there to collect that money. I like to look at revenue per year and tune the acquisition and economics to that. Ed: Okay so you take a fixed, yearly time range for the value, over one year. Nikos: Yes that’s what I do. And I know in the end [the customer’s overall value] is going to be higher, but if you cannot, at the early stage, have a payback of a year or maybe a little extra (ideally less than a year), then you are just not capital-efficient enough to grow really fast. You need the money back. And I don’t care if I don’t get that money back in five years, because in a venture-funded world… if you’re not doing well in five years, then you’re not going to be there. There’s going to be competitors in five years. So I think it’s silly to discuss the revenue we’re going to be getting from today’s customers then. And to claim that this is somehow contributing to our economics. If you’d like to learn more about Customer LTV as a metric, check out the Ultimate LTV Cheat Sheet. And if you’re curious about your own company’s LTV, get an accurate estimate with our LTV calculator.

[INST] Early SaaS growth and the path to $20M ARR [/INST]

You can also check out this interview on the SaaS Open Mic Podcast, or subscribe on iTunes: Ed: First tell us about Workable. Nikos: Workable is a SaaS software aimed at SMB. What we do is everything around the hiring process. From the moment you make a job description to the moment you put an offer letter to someone. We manage everything — from careers pages, collecting applicants, syndicating your jobs and advertising them, getting your talent pool, helping you collaborate with your colleagues to discuss candidates and manage interviews. The field is typically called “applicant tracking system,” which I really don’t like at all because it’s really old fashioned. Ed: Okay, so it’s managing that whole process end-to-end and giving it a complete solution. How did you guys start? What’s the founding story? Nikos: The company started three years ago, but the product has been on the market for about two. We started in Greece, not a very likely place to start that kind of thing! But by now it’s grown to be a very international company. Our base is in the United States in Boston — I moved here recently and a lot of our people are here. Right now we have 3,300 business customers all over the world; 60% of them are in the US. We are over $5 million ARR and growing at 15% month-over-month. So it’s been doing reasonably well recently. We raised a round of $27 million led by Balderton and Notion. Basically, we’re in that phase where we want to scale the business. The team at Workable. SaaS business model and pricing Ed: There are a lot of good sounding numbers in there so it sounds like things are going pretty well for you guys! If you look back to when you were building the product, was it clear to you from the beginning that the SaaS business model made sense for this product — or did you know from the beginning how you would map that out and how you would price it? Nikos: To be honest with you… No, we didn’t have a very clear idea of everything when we started. We were total noobs back then. But I guess if you start a software company today, it’s likely going to be a cloud software company. It’s likely going to be delivered with a SaaS business model. So, at the time, I don’t think we considered an alternative. What is special about Workable is the targets; it fits SMB very squarely. We are not starting with the small companies with clear intention to go massively upmarket, which is most common. We are actually doing an SMB play. And in terms of pricing, exactly how models and metrics work, things are a little bit distorted on our end because you touch the consumer side of metrics and marketing. Ed: I noticed you guys have five different pricing tiers on your site. Is that to capture the spread of the market that you’re addressing? Was it always that way? Nikos: Actually yes, we haven’t changed pricing all that much. There’s two ways to see that: either we were right all along …or we’re too late to change our pricing. I think for most companies at our stage, it’s probably the second. And it’s one thing that I think about a lot. But to be honest with you, we don’t focus too much on that aspect. When you’re doing an SMB SaaS, it’s more important to capture the growth, capture the customers, meet their needs — and worry later if you could possibly pick up more money from the table. SaaS Growth metrics Ed: In terms of capturing and measuring SaaS growth, how do you measure yourselves and what metrics are really important to you? I guess there are some metrics that you look at everyday and use as an indicator for growth of the product. Nikos: Well, all the obvious SaaS metrics that most people are looking at. MRR, the movements of MRR. We’re looking at churn a lot. I think what’s also not so common but common in our case: we have a lot of small customers that come and go. The interpretation of churn is harder, because a lot of our smaller customers are just using it for four months, and then four months later on. We have a strong reactivation component. So, there are some interesting metrics like the percentage of revenue coming from reactivation, which you can only judge on the basis of the customers that have already been lost, not the customers you have. On the low end of the market, in some of those metrics you might see slight differences in interpretation. But in general, yes we follow the metrics that I see everyone else track. I think that’s a very well-documented part of the business, as well. The business model has matured. If I were starting today, I think in two weeks I could figure out exactly how to monitor and run the business. Of course with a tool like yours, I could even implement it in a day. SMB churn / Seasonality / Reactivation Ed: It’s interesting you mentioned your level of reactivation MRR. I’ve seen a lot of small businesses talk about the problem of customers coming on board for a couple of months, getting the value out of the product, and then leaving again. Is that something you would try to fix in the product, or is that not a problem for you guys because you’re able to measure it — and you know they’ll come back when they need your service again? Nikos: That’s the thing. If you apply traditional enterprise SaaS thinking on a situation like that, you see a problem where there isn’t one. And you’re trying to fix it by actually forcing behaviors that don’t fit the customers. That’s the conclusion that I’ve arrived at. In our case, really small businesses may not be hiring all the time. They may only be hiring once or twice a year. So for them to pay subscription prices all year long doesn’t make sense. To lose their data and start again doesn’t make sense. So one thing that they appreciate about Workable is they can use it for three months, pause it, and come back find all of their data and restart the subscription. And when you look at these customers saying, “I’m canceling my subscription, but I’m really happy and I’ll use it again!” Then you shouldn’t think, “Oh, how do I make these people stay longer?” The thing you have to think about is: How do I make sure the next time they need this, they remember who I am and they come back to me? So, let’s say you have a second order marketing machine. Some people who are in your database: They are customers, they’ve been customers in the past, they know who you are, they know how to use the product. You don’t want to be spamming them with emails every month because that would be very annoying, but you somehow need to stay top-of-mind for them. And how do you track that? You track the activation as a percentage of the sleeping database that you have. That’s an interesting discussion about metrics, by the way. In the beginning, we’re seeing reactivation as a percentage of the MRR that we currently have. But for [this situation], it’s how many sleepers do you have in there, and how do you improve [their reactivation rate]. Ed: I’m assuming that you capture that at the point of cancellation. You must be able to categorize the sleepers from the actual churn. Nikos: To be honest with you, we don’t. I guess we could have easily put a little thing there asking them why they left, but it’s one of those things that we haven’t done. You know, when you grow really fast, a lot of the things you should have done, you just don’t do them because you’re doing the features. But in reality what you would like to do is to capture that, to understand who are the people in that category, and market to them specifically in different ways. Relative to the discussion of metrics, none of these things can be done if you don’t appreciate how big it is for you, how important it is for you. For us for example, it’s really important. For others, it’s not. Ed: Maybe there’s something around the notion of canceling versus pausing. It’s a semantic difference between the two. Nikos: We used to just have “Cancel”. And the customers would say, “No I don’t want to cancel. I just want to stop for a while.” And we said, “Yes you stop, then you resubscribe.” But this wasn’t obvious. So then we made a button that said “Pause” and a separate one that says “Cancel”. SaaS growth and cost at scale Ed: What would you say are the main challenges for you guys growing? Based on what you’ve said, I guess you have a slightly higher churn rate than some other SaaS businesses may have. But what are the main barriers to growth for you? Nikos: It’s not so much the churn because in SMB you have very high customer count churn. But the MRR churn is not big. In fact we have negative net churn. Because the bigger accounts plus some of the upgrades carry it, and the people who left are on the smaller plans. I guess the challenge that I believe we will face, and I think this will be the challenge for a lot of SaaS companies as the industry matures, is that in the beginning you figure out your acquisition economics. And then you can use your channels and your acquisition economics to grow really fast. But as you become bigger, other things enter the financial equation. It’s mostly the question of margins. At a bigger scale, the acquisition economics change. The support and maintenance economics change. You need a bigger organization so then you have to start minding not just how much a customer costs to acquire, but also how much a customer costs to support. The older generation of startup businesses, the ones who have had IPOs in the past couple of years, the playbook was that you eventually go directly up market, and you go to the customers that will pay so much that they will eventually cover all of those costs. So it’s only a challenge to grow. That’s why the focus on VCs, metrics, everybody in the industry is: “Just get the acquisition economics to grow, and then you’re not going to have to worry about it later.” But I think with this second wave of successful SaaS companies, we’re also looking at mid-market and smaller companies. And there the margins are not going to be solved dramatically by going upmarket. So you really need to build a streamlined, highly self-service business and to be mindful of those metrics. Talking about metrics, the SaaS metrics we have are a lot about the usage and the revenue, etc. A lot of companies I see do not have very sophisticated cost-allocation mechanisms inside the company to be able to attribute from salaries, or fully-loaded costs of customer support integrated into the rest of the metrics. And that’s something we’re working on right now. Ed: It’s definitely a challenge to capture all of those costs, everything around the core MRR/acquisition costs. That’s something I’m not sure anybody has solved yet. Would you say there’s a certain tipping point where that suddenly becomes a problem for you — or is it something that you should be thinking about that from the early stage? Nikos: Look, I think what happens is that up until $5–10mil ARR, your main focus is: Can I have scalable sums that can help me grow really fast? But when you get in that area between 5 and 10, then even if you don’t have it yet, you can clearly see the path to 20. Maybe it’ll be a few months earlier or a few months later, but you know you’re going to get to $20mil ARR. And then you start thinking that once I get to 20, I need to build a business that can credibly claim it will have margins at scale. A business that has economics, that can use capital efficiently, that can get from 20 to 100. You can’t start thinking about that once you’re at 20, because then it would be too late. So I think your mindset starts to shift a little bit. As you approach 10, you start thinking that the next big challenge will be [scaling to $100million ARR]. We’re at that stage. Maybe also because we’re at the low-end of the market. So if you have low price point, if your average revenue is $100–200, then it’s much more important. Customer LTV — is it all it’s cracked up to be? Ed: In terms of Customer Lifetime Value… is that something you care about or monitor? There’s a lot of discussion on this out there, but I’m curious to know who is actually able to estimate that and to use it. Nikos: Customer LTV is the one common metric that I don’t care at all about, that I think is misleading. I think it’s misleading in very many ways. The most obvious one is that it’s wrong. It’s really difficult to capture the dynamics of upgrades and changes in the product, etc. I have done calculations with five different methods, including your tool, none of them reflect the minimum [value], much less the reality. When I look back on two years of data, it’s not what I see. So having someone produce a formula that makes sense. Here’s another issue I see with customer LTV — it’s what I like to call the “Company Lifetime Value.” What I mean is that when you are VC-funded company, and you operate on 18 months of runway, and your LTV is really good — four years later, you’re not going to be there to see it. You have to be there to collect that money. I like to look at revenue per year and tune the acquisition and economics to that. Ed: Okay so you take a fixed, yearly time range for the value, over one year. Nikos: Yes that’s what I do. And I know in the end [the customer’s overall value] is going to be higher, but if you cannot, at the early stage, have a payback of a year or maybe a little extra (ideally less than a year), then you are just not capital-efficient enough to grow really fast. You need the money back. And I don’t care if I don’t get that money back in five years, because in a venture-funded world… if you’re not doing well in five years, then you’re not going to be there. There’s going to be competitors in five years. So I think it’s silly to discuss the revenue we’re going to be getting from today’s customers then. And to claim that this is somehow contributing to our economics. If you’d like to learn more about Customer LTV as a metric, check out the Ultimate LTV Cheat Sheet. And if you’re curious about your own company’s LTV, get an accurate estimate with our LTV calculator.

<sys> [INST] Early SaaS growth and the path to $20M ARR [/INST] You can also check out this interview on the SaaS Open Mic Podcast, or subscribe on iTunes: Ed: First tell us about Workable. Nikos: Workable is a SaaS software aimed at SMB. What we do is everything around the hiring process. From the moment you make a job description to the moment you put an offer letter to someone. We manage everything — from careers pages, collecting applicants, syndicating your jobs and advertising them, getting your talent pool, helping you collaborate with your colleagues to discuss candidates and manage interviews. The field is typically called “applicant tracking system,” which I really don’t like at all because it’s really old fashioned. Ed: Okay, so it’s managing that whole process end-to-end and giving it a complete solution. How did you guys start? What’s the founding story? Nikos: The company started three years ago, but the product has been on the market for about two. We started in Greece, not a very likely place to start that kind of thing! But by now it’s grown to be a very international company. Our base is in the United States in Boston — I moved here recently and a lot of our people are here. Right now we have 3,300 business customers all over the world; 60% of them are in the US. We are over $5 million ARR and growing at 15% month-over-month. So it’s been doing reasonably well recently. We raised a round of $27 million led by Balderton and Notion. Basically, we’re in that phase where we want to scale the business. The team at Workable. SaaS business model and pricing Ed: There are a lot of good sounding numbers in there so it sounds like things are going pretty well for you guys! If you look back to when you were building the product, was it clear to you from the beginning that the SaaS business model made sense for this product — or did you know from the beginning how you would map that out and how you would price it? Nikos: To be honest with you… No, we didn’t have a very clear idea of everything when we started. We were total noobs back then. But I guess if you start a software company today, it’s likely going to be a cloud software company. It’s likely going to be delivered with a SaaS business model. So, at the time, I don’t think we considered an alternative. What is special about Workable is the targets; it fits SMB very squarely. We are not starting with the small companies with clear intention to go massively upmarket, which is most common. We are actually doing an SMB play. And in terms of pricing, exactly how models and metrics work, things are a little bit distorted on our end because you touch the consumer side of metrics and marketing. Ed: I noticed you guys have five different pricing tiers on your site. Is that to capture the spread of the market that you’re addressing? Was it always that way? Nikos: Actually yes, we haven’t changed pricing all that much. There’s two ways to see that: either we were right all along …or we’re too late to change our pricing. I think for most companies at our stage, it’s probably the second. And it’s one thing that I think about a lot. But to be honest with you, we don’t focus too much on that aspect. When you’re doing an SMB SaaS, it’s more important to capture the growth, capture the customers, meet their needs — and worry later if you could possibly pick up more money from the table. SaaS Growth metrics Ed: In terms of capturing and measuring SaaS growth, how do you measure yourselves and what metrics are really important to you? I guess there are some metrics that you look at everyday and use as an indicator for growth of the product. Nikos: Well, all the obvious SaaS metrics that most people are looking at. MRR, the movements of MRR. We’re looking at churn a lot. I think what’s also not so common but common in our case: we have a lot of small customers that come and go. The interpretation of churn is harder, because a lot of our smaller customers are just using it for four months, and then four months later on. We have a strong reactivation component. So, there are some interesting metrics like the percentage of revenue coming from reactivation, which you can only judge on the basis of the customers that have already been lost, not the customers you have. On the low end of the market, in some of those metrics you might see slight differences in interpretation. But in general, yes we follow the metrics that I see everyone else track. I think that’s a very well-documented part of the business, as well. The business model has matured. If I were starting today, I think in two weeks I could figure out exactly how to monitor and run the business. Of course with a tool like yours, I could even implement it in a day. SMB churn / Seasonality / Reactivation Ed: It’s interesting you mentioned your level of reactivation MRR. I’ve seen a lot of small businesses talk about the problem of customers coming on board for a couple of months, getting the value out of the product, and then leaving again. Is that something you would try to fix in the product, or is that not a problem for you guys because you’re able to measure it — and you know they’ll come back when they need your service again? Nikos: That’s the thing. If you apply traditional enterprise SaaS thinking on a situation like that, you see a problem where there isn’t one. And you’re trying to fix it by actually forcing behaviors that don’t fit the customers. That’s the conclusion that I’ve arrived at. In our case, really small businesses may not be hiring all the time. They may only be hiring once or twice a year. So for them to pay subscription prices all year long doesn’t make sense. To lose their data and start again doesn’t make sense. So one thing that they appreciate about Workable is they can use it for three months, pause it, and come back find all of their data and restart the subscription. And when you look at these customers saying, “I’m canceling my subscription, but I’m really happy and I’ll use it again!” Then you shouldn’t think, “Oh, how do I make these people stay longer?” The thing you have to think about is: How do I make sure the next time they need this, they remember who I am and they come back to me? So, let’s say you have a second order marketing machine. Some people who are in your database: They are customers, they’ve been customers in the past, they know who you are, they know how to use the product. You don’t want to be spamming them with emails every month because that would be very annoying, but you somehow need to stay top-of-mind for them. And how do you track that? You track the activation as a percentage of the sleeping database that you have. That’s an interesting discussion about metrics, by the way. In the beginning, we’re seeing reactivation as a percentage of the MRR that we currently have. But for [this situation], it’s how many sleepers do you have in there, and how do you improve [their reactivation rate]. Ed: I’m assuming that you capture that at the point of cancellation. You must be able to categorize the sleepers from the actual churn. Nikos: To be honest with you, we don’t. I guess we could have easily put a little thing there asking them why they left, but it’s one of those things that we haven’t done. You know, when you grow really fast, a lot of the things you should have done, you just don’t do them because you’re doing the features. But in reality what you would like to do is to capture that, to understand who are the people in that category, and market to them specifically in different ways. Relative to the discussion of metrics, none of these things can be done if you don’t appreciate how big it is for you, how important it is for you. For us for example, it’s really important. For others, it’s not. Ed: Maybe there’s something around the notion of canceling versus pausing. It’s a semantic difference between the two. Nikos: We used to just have “Cancel”. And the customers would say, “No I don’t want to cancel. I just want to stop for a while.” And we said, “Yes you stop, then you resubscribe.” But this wasn’t obvious. So then we made a button that said “Pause” and a separate one that says “Cancel”. SaaS growth and cost at scale Ed: What would you say are the main challenges for you guys growing? Based on what you’ve said, I guess you have a slightly higher churn rate than some other SaaS businesses may have. But what are the main barriers to growth for you? Nikos: It’s not so much the churn because in SMB you have very high customer count churn. But the MRR churn is not big. In fact we have negative net churn. Because the bigger accounts plus some of the upgrades carry it, and the people who left are on the smaller plans. I guess the challenge that I believe we will face, and I think this will be the challenge for a lot of SaaS companies as the industry matures, is that in the beginning you figure out your acquisition economics. And then you can use your channels and your acquisition economics to grow really fast. But as you become bigger, other things enter the financial equation. It’s mostly the question of margins. At a bigger scale, the acquisition economics change. The support and maintenance economics change. You need a bigger organization so then you have to start minding not just how much a customer costs to acquire, but also how much a customer costs to support. The older generation of startup businesses, the ones who have had IPOs in the past couple of years, the playbook was that you eventually go directly up market, and you go to the customers that will pay so much that they will eventually cover all of those costs. So it’s only a challenge to grow. That’s why the focus on VCs, metrics, everybody in the industry is: “Just get the acquisition economics to grow, and then you’re not going to have to worry about it later.” But I think with this second wave of successful SaaS companies, we’re also looking at mid-market and smaller companies. And there the margins are not going to be solved dramatically by going upmarket. So you really need to build a streamlined, highly self-service business and to be mindful of those metrics. Talking about metrics, the SaaS metrics we have are a lot about the usage and the revenue, etc. A lot of companies I see do not have very sophisticated cost-allocation mechanisms inside the company to be able to attribute from salaries, or fully-loaded costs of customer support integrated into the rest of the metrics. And that’s something we’re working on right now. Ed: It’s definitely a challenge to capture all of those costs, everything around the core MRR/acquisition costs. That’s something I’m not sure anybody has solved yet. Would you say there’s a certain tipping point where that suddenly becomes a problem for you — or is it something that you should be thinking about that from the early stage? Nikos: Look, I think what happens is that up until $5–10mil ARR, your main focus is: Can I have scalable sums that can help me grow really fast? But when you get in that area between 5 and 10, then even if you don’t have it yet, you can clearly see the path to 20. Maybe it’ll be a few months earlier or a few months later, but you know you’re going to get to $20mil ARR. And then you start thinking that once I get to 20, I need to build a business that can credibly claim it will have margins at scale. A business that has economics, that can use capital efficiently, that can get from 20 to 100. You can’t start thinking about that once you’re at 20, because then it would be too late. So I think your mindset starts to shift a little bit. As you approach 10, you start thinking that the next big challenge will be [scaling to $100million ARR]. We’re at that stage. Maybe also because we’re at the low-end of the market. So if you have low price point, if your average revenue is $100–200, then it’s much more important. Customer LTV — is it all it’s cracked up to be? Ed: In terms of Customer Lifetime Value… is that something you care about or monitor? There’s a lot of discussion on this out there, but I’m curious to know who is actually able to estimate that and to use it. Nikos: Customer LTV is the one common metric that I don’t care at all about, that I think is misleading. I think it’s misleading in very many ways. The most obvious one is that it’s wrong. It’s really difficult to capture the dynamics of upgrades and changes in the product, etc. I have done calculations with five different methods, including your tool, none of them reflect the minimum [value], much less the reality. When I look back on two years of data, it’s not what I see. So having someone produce a formula that makes sense. Here’s another issue I see with customer LTV — it’s what I like to call the “Company Lifetime Value.” What I mean is that when you are VC-funded company, and you operate on 18 months of runway, and your LTV is really good — four years later, you’re not going to be there to see it. You have to be there to collect that money. I like to look at revenue per year and tune the acquisition and economics to that. Ed: Okay so you take a fixed, yearly time range for the value, over one year. Nikos: Yes that’s what I do. And I know in the end [the customer’s overall value] is going to be higher, but if you cannot, at the early stage, have a payback of a year or maybe a little extra (ideally less than a year), then you are just not capital-efficient enough to grow really fast. You need the money back. And I don’t care if I don’t get that money back in five years, because in a venture-funded world… if you’re not doing well in five years, then you’re not going to be there. There’s going to be competitors in five years. So I think it’s silly to discuss the revenue we’re going to be getting from today’s customers then. And to claim that this is somehow contributing to our economics. If you’d like to learn more about Customer LTV as a metric, check out the Ultimate LTV Cheat Sheet. And if you’re curious about your own company’s LTV, get an accurate estimate with our LTV calculator. </sys

5 Sales Lessons from Leadfeeder’s Journey of Growing $150k MRR Without Salespeople. First things first, if you’ve arrived at this article eager for a quick fix to massive growth, reconsider proceeding. So, what gives? Here’s the thing: Our $150k MRR didn’t happen overnight. The journey required a hefty budget, and above all, time. What Leadfeeder was lacking in salespeople back in the early days, we made up for in our adherence to a high growth business model. Image Source Our approach involved a balancing act between the cost to acquire a customer (CAC) and monetization (LTV). And our strategy, in particular, was one that emphasized a preference around inbound marketing tactics, automated sales, and partnerships. On our journey to becoming one of the best lead generation tools to add your marketing stack, patience has been key. Just as important as keeping our users’ perspectives at the forefront of every decision. Here are five growth lessons we’ve picked up along the way — no salespeople required. #1: Invest upfront in both paid and organic acquisition channels Balance isn’t just a self-care buzzword. In the business world, it’s a necessary characteristic in your approach to acquisition. By this, we mean you can’t go all-in on one inbound marketing channel and neglect the others. Just like a salesperson shouldn’t solely rely on networking event attendance for connecting with new potential prospects. This is because — and it shouldn’t come as a surprise — digital channels are interconnected. What you do on one will inevitably lead a visitor down a path toward another. If you’re picking and choosing what to optimize based solely on what you think will drive the most leads, you’re likely leading quality leads to a dead end. In the same vein, you’re going to need to spend money. This is because organic channels, like SEO, take time to optimize. They’re long-term games. Paid tactics, on the other hand, help to feed the beast in the short-term. You need to be feeding both sides of the equation in getting people through the door if you’re ever going to figure out how to keep them around. As you build out strategy around where to put your time and money on the acquisition side, allow us to offer suggestions based on what’s worked for us. On our journey to $150 MRR, we’ve invested heavily in the following: Content marketing (both owned content and third-party, i.e. guest blogging) and SEO PR with help from a third party agency (we’ve been featured with mentions on publications like Forbes, TechCrunch, and Enterpreneur.com) Advertising through Google Ads, Facebook, Twitter, and LinkedIn Managing a presence on comparison websites Building out an affiliate program Encouraging referrals It’s worth mentioning that we spent a fair amount of time building a solid foundation (such as with website content) before spending a dime on pointing people to it. Every piece of the puzzle will inevitably evolve over time with the influx of both visitors and performance data. #2: Don’t underestimate the power of word-of-mouth Outside of Google Ads, we’ve found a surprising amount of success from word-of-mouth. Or maybe it’s not so surprising when you consider the rise of a tactic like influencer marketing. At its core, influencer marketing relies on the value people put in recommendations received from individuals — those they align themselves with based on shared interests and values. You don’t even have to know an influencer personally to feel as though what they have to say can be trusted. As our user base has grown, so too have our referrals. Part of this relies on the quality of our product. People have to believe in the efficacy of a product before putting their name behind it. Another aspect of driving word-of-mouth requires making it easy for people to help us do so. From this end, we’ve supported referrals with something we’ll refer to as the viral loop. For example, users can extend their free trial of our premium Leadfeeder product when they share it with their network. This not only works to drive more leads but more quality leads. After all, our users wouldn’t put their names behind our product if they wouldn’t vouch for it! It’s a constant loop of product use, love, and sharing that continues spinning as long as there’s a need met and the means to easily get the word out. #3: Support every conversion with a plan for retention Conversions are worth far less than your ability to retain customers over time. This ties back to the idea that the strongest startups are built to maximize growth, not profit. Think of conversions as indicative in the short-term of a quality offering. Retention indicates a quality product in the long-term. When we first launched Leadfeeder, it was an entirely free product. We knew we had an offering that was enticing enough to get people through the door. We spent that year with our heads down in product use patterns and regularly solicited user feedback. Iterating and learning from what resonated most with our user base allowed us to develop a premium offering people would actually be interested in paying for. But what was free for our users upfront was anything but free for us. We invested upwards of €500,000 over the course of that first year to keep ourselves afloat and develop a product people would want to use. Outside of the product itself, this also meant developing a support system prospects and customers alike could depend on. We offered free, 30-minute online training sessions, built out automated Intercom campaigns for responding quickly to paid users, and developed support content in the form of webinars, case studies, and blogs to upsell and educate relevant audiences. Ultimately, when you’re thinking about retention, aim for a net churn of less than 2% per month. If you have high churn, keep working on your product-market fit — don’t simply throw more money at acquisition. #4: Monitor user behavior metrics Think about user behavior metrics from two different angles. On one side, you should be paying attention to the buyer’s journey from lead to sales. On the other, you should be monitoring how your current customers are using the product — and the frequency with which they’re doing so. Set up and actually use your Google Analytics. Create UTM tags and goals with funnels. Use Google Tag Manager and pay attention to traffic sources that convert campaign optimization, and track visitor conversion rates and funnels. As you become more familiar with these dashboards, you’ll be able to identify opportunities for personalization. For example, we developed landing pages that catered to keywords of interest among our audience and drove higher conversion rates as a result. Welcome back pages for repeat webinar visitors worked to achieve the same. As a word of warning, try not to overcomplicate marketing KPIs (key performance indicators) around lead generation. We’ve found that qualified lead volume is the single most important lead generation KPI to track — alongside these four other metrics for keeping your efforts focused. #5: Make sure you have a product worth selling We’ve already touched on this point a bit but it’s important enough to warrant its own dedicated takeaway. Aside from support — from both inbound marketing and operations — product is at the core of your growth marketing success. If you haven’t nailed your product-market-fit, building customer loyalty is going to prove an uphill battle. You have to value your customer’s feedback as much as you do your own assumptions and intentions. This requires a willingness to iterate fast and frequently. Make it easy for your prospects to sign up and get started with a free trial. For us, this meant positioning clear and enticing CTAs with email feeds. And encouraging sign-ups without credit card requirements. Sure, having a credit card on file makes it easier to shimmy customers into the cycle of automated monthly subscriptions. But it also creates another barrier to entry. If you’re thinking with a long-term lens and developing a quality product that’ll be worth paying for come trial’s end, then the money will come. Final thoughts If it hasn’t been made clear already, we’re big proponents of quality traffic. It’s a driver behind our product offering — providing businesses with greater transparency around who their website visitors are. Rather than spend money on a sales team to push your product, invest in creating the best possible product. With enough backup from your inbound marketing efforts, it can practically sell itself over time. Dive into additional insights on how to reach $150k MRR without salespeople from our founder and CEO Pekka Koskinen on SlideShare.

[INST] 5 Sales Lessons from Leadfeeder’s Journey of Growing $150k MRR Without Salespeople [/INST]

First things first, if you’ve arrived at this article eager for a quick fix to massive growth, reconsider proceeding. So, what gives? Here’s the thing: Our $150k MRR didn’t happen overnight. The journey required a hefty budget, and above all, time. What Leadfeeder was lacking in salespeople back in the early days, we made up for in our adherence to a high growth business model. Image Source Our approach involved a balancing act between the cost to acquire a customer (CAC) and monetization (LTV). And our strategy, in particular, was one that emphasized a preference around inbound marketing tactics, automated sales, and partnerships. On our journey to becoming one of the best lead generation tools to add your marketing stack, patience has been key. Just as important as keeping our users’ perspectives at the forefront of every decision. Here are five growth lessons we’ve picked up along the way — no salespeople required. #1: Invest upfront in both paid and organic acquisition channels Balance isn’t just a self-care buzzword. In the business world, it’s a necessary characteristic in your approach to acquisition. By this, we mean you can’t go all-in on one inbound marketing channel and neglect the others. Just like a salesperson shouldn’t solely rely on networking event attendance for connecting with new potential prospects. This is because — and it shouldn’t come as a surprise — digital channels are interconnected. What you do on one will inevitably lead a visitor down a path toward another. If you’re picking and choosing what to optimize based solely on what you think will drive the most leads, you’re likely leading quality leads to a dead end. In the same vein, you’re going to need to spend money. This is because organic channels, like SEO, take time to optimize. They’re long-term games. Paid tactics, on the other hand, help to feed the beast in the short-term. You need to be feeding both sides of the equation in getting people through the door if you’re ever going to figure out how to keep them around. As you build out strategy around where to put your time and money on the acquisition side, allow us to offer suggestions based on what’s worked for us. On our journey to $150 MRR, we’ve invested heavily in the following: Content marketing (both owned content and third-party, i.e. guest blogging) and SEO PR with help from a third party agency (we’ve been featured with mentions on publications like Forbes, TechCrunch, and Enterpreneur.com) Advertising through Google Ads, Facebook, Twitter, and LinkedIn Managing a presence on comparison websites Building out an affiliate program Encouraging referrals It’s worth mentioning that we spent a fair amount of time building a solid foundation (such as with website content) before spending a dime on pointing people to it. Every piece of the puzzle will inevitably evolve over time with the influx of both visitors and performance data. #2: Don’t underestimate the power of word-of-mouth Outside of Google Ads, we’ve found a surprising amount of success from word-of-mouth. Or maybe it’s not so surprising when you consider the rise of a tactic like influencer marketing. At its core, influencer marketing relies on the value people put in recommendations received from individuals — those they align themselves with based on shared interests and values. You don’t even have to know an influencer personally to feel as though what they have to say can be trusted. As our user base has grown, so too have our referrals. Part of this relies on the quality of our product. People have to believe in the efficacy of a product before putting their name behind it. Another aspect of driving word-of-mouth requires making it easy for people to help us do so. From this end, we’ve supported referrals with something we’ll refer to as the viral loop. For example, users can extend their free trial of our premium Leadfeeder product when they share it with their network. This not only works to drive more leads but more quality leads. After all, our users wouldn’t put their names behind our product if they wouldn’t vouch for it! It’s a constant loop of product use, love, and sharing that continues spinning as long as there’s a need met and the means to easily get the word out. #3: Support every conversion with a plan for retention Conversions are worth far less than your ability to retain customers over time. This ties back to the idea that the strongest startups are built to maximize growth, not profit. Think of conversions as indicative in the short-term of a quality offering. Retention indicates a quality product in the long-term. When we first launched Leadfeeder, it was an entirely free product. We knew we had an offering that was enticing enough to get people through the door. We spent that year with our heads down in product use patterns and regularly solicited user feedback. Iterating and learning from what resonated most with our user base allowed us to develop a premium offering people would actually be interested in paying for. But what was free for our users upfront was anything but free for us. We invested upwards of €500,000 over the course of that first year to keep ourselves afloat and develop a product people would want to use. Outside of the product itself, this also meant developing a support system prospects and customers alike could depend on. We offered free, 30-minute online training sessions, built out automated Intercom campaigns for responding quickly to paid users, and developed support content in the form of webinars, case studies, and blogs to upsell and educate relevant audiences. Ultimately, when you’re thinking about retention, aim for a net churn of less than 2% per month. If you have high churn, keep working on your product-market fit — don’t simply throw more money at acquisition. #4: Monitor user behavior metrics Think about user behavior metrics from two different angles. On one side, you should be paying attention to the buyer’s journey from lead to sales. On the other, you should be monitoring how your current customers are using the product — and the frequency with which they’re doing so. Set up and actually use your Google Analytics. Create UTM tags and goals with funnels. Use Google Tag Manager and pay attention to traffic sources that convert campaign optimization, and track visitor conversion rates and funnels. As you become more familiar with these dashboards, you’ll be able to identify opportunities for personalization. For example, we developed landing pages that catered to keywords of interest among our audience and drove higher conversion rates as a result. Welcome back pages for repeat webinar visitors worked to achieve the same. As a word of warning, try not to overcomplicate marketing KPIs (key performance indicators) around lead generation. We’ve found that qualified lead volume is the single most important lead generation KPI to track — alongside these four other metrics for keeping your efforts focused. #5: Make sure you have a product worth selling We’ve already touched on this point a bit but it’s important enough to warrant its own dedicated takeaway. Aside from support — from both inbound marketing and operations — product is at the core of your growth marketing success. If you haven’t nailed your product-market-fit, building customer loyalty is going to prove an uphill battle. You have to value your customer’s feedback as much as you do your own assumptions and intentions. This requires a willingness to iterate fast and frequently. Make it easy for your prospects to sign up and get started with a free trial. For us, this meant positioning clear and enticing CTAs with email feeds. And encouraging sign-ups without credit card requirements. Sure, having a credit card on file makes it easier to shimmy customers into the cycle of automated monthly subscriptions. But it also creates another barrier to entry. If you’re thinking with a long-term lens and developing a quality product that’ll be worth paying for come trial’s end, then the money will come. Final thoughts If it hasn’t been made clear already, we’re big proponents of quality traffic. It’s a driver behind our product offering — providing businesses with greater transparency around who their website visitors are. Rather than spend money on a sales team to push your product, invest in creating the best possible product. With enough backup from your inbound marketing efforts, it can practically sell itself over time. Dive into additional insights on how to reach $150k MRR without salespeople from our founder and CEO Pekka Koskinen on SlideShare.

<sys> [INST] 5 Sales Lessons from Leadfeeder’s Journey of Growing $150k MRR Without Salespeople [/INST] First things first, if you’ve arrived at this article eager for a quick fix to massive growth, reconsider proceeding. So, what gives? Here’s the thing: Our $150k MRR didn’t happen overnight. The journey required a hefty budget, and above all, time. What Leadfeeder was lacking in salespeople back in the early days, we made up for in our adherence to a high growth business model. Image Source Our approach involved a balancing act between the cost to acquire a customer (CAC) and monetization (LTV). And our strategy, in particular, was one that emphasized a preference around inbound marketing tactics, automated sales, and partnerships. On our journey to becoming one of the best lead generation tools to add your marketing stack, patience has been key. Just as important as keeping our users’ perspectives at the forefront of every decision. Here are five growth lessons we’ve picked up along the way — no salespeople required. #1: Invest upfront in both paid and organic acquisition channels Balance isn’t just a self-care buzzword. In the business world, it’s a necessary characteristic in your approach to acquisition. By this, we mean you can’t go all-in on one inbound marketing channel and neglect the others. Just like a salesperson shouldn’t solely rely on networking event attendance for connecting with new potential prospects. This is because — and it shouldn’t come as a surprise — digital channels are interconnected. What you do on one will inevitably lead a visitor down a path toward another. If you’re picking and choosing what to optimize based solely on what you think will drive the most leads, you’re likely leading quality leads to a dead end. In the same vein, you’re going to need to spend money. This is because organic channels, like SEO, take time to optimize. They’re long-term games. Paid tactics, on the other hand, help to feed the beast in the short-term. You need to be feeding both sides of the equation in getting people through the door if you’re ever going to figure out how to keep them around. As you build out strategy around where to put your time and money on the acquisition side, allow us to offer suggestions based on what’s worked for us. On our journey to $150 MRR, we’ve invested heavily in the following: Content marketing (both owned content and third-party, i.e. guest blogging) and SEO PR with help from a third party agency (we’ve been featured with mentions on publications like Forbes, TechCrunch, and Enterpreneur.com) Advertising through Google Ads, Facebook, Twitter, and LinkedIn Managing a presence on comparison websites Building out an affiliate program Encouraging referrals It’s worth mentioning that we spent a fair amount of time building a solid foundation (such as with website content) before spending a dime on pointing people to it. Every piece of the puzzle will inevitably evolve over time with the influx of both visitors and performance data. #2: Don’t underestimate the power of word-of-mouth Outside of Google Ads, we’ve found a surprising amount of success from word-of-mouth. Or maybe it’s not so surprising when you consider the rise of a tactic like influencer marketing. At its core, influencer marketing relies on the value people put in recommendations received from individuals — those they align themselves with based on shared interests and values. You don’t even have to know an influencer personally to feel as though what they have to say can be trusted. As our user base has grown, so too have our referrals. Part of this relies on the quality of our product. People have to believe in the efficacy of a product before putting their name behind it. Another aspect of driving word-of-mouth requires making it easy for people to help us do so. From this end, we’ve supported referrals with something we’ll refer to as the viral loop. For example, users can extend their free trial of our premium Leadfeeder product when they share it with their network. This not only works to drive more leads but more quality leads. After all, our users wouldn’t put their names behind our product if they wouldn’t vouch for it! It’s a constant loop of product use, love, and sharing that continues spinning as long as there’s a need met and the means to easily get the word out. #3: Support every conversion with a plan for retention Conversions are worth far less than your ability to retain customers over time. This ties back to the idea that the strongest startups are built to maximize growth, not profit. Think of conversions as indicative in the short-term of a quality offering. Retention indicates a quality product in the long-term. When we first launched Leadfeeder, it was an entirely free product. We knew we had an offering that was enticing enough to get people through the door. We spent that year with our heads down in product use patterns and regularly solicited user feedback. Iterating and learning from what resonated most with our user base allowed us to develop a premium offering people would actually be interested in paying for. But what was free for our users upfront was anything but free for us. We invested upwards of €500,000 over the course of that first year to keep ourselves afloat and develop a product people would want to use. Outside of the product itself, this also meant developing a support system prospects and customers alike could depend on. We offered free, 30-minute online training sessions, built out automated Intercom campaigns for responding quickly to paid users, and developed support content in the form of webinars, case studies, and blogs to upsell and educate relevant audiences. Ultimately, when you’re thinking about retention, aim for a net churn of less than 2% per month. If you have high churn, keep working on your product-market fit — don’t simply throw more money at acquisition. #4: Monitor user behavior metrics Think about user behavior metrics from two different angles. On one side, you should be paying attention to the buyer’s journey from lead to sales. On the other, you should be monitoring how your current customers are using the product — and the frequency with which they’re doing so. Set up and actually use your Google Analytics. Create UTM tags and goals with funnels. Use Google Tag Manager and pay attention to traffic sources that convert campaign optimization, and track visitor conversion rates and funnels. As you become more familiar with these dashboards, you’ll be able to identify opportunities for personalization. For example, we developed landing pages that catered to keywords of interest among our audience and drove higher conversion rates as a result. Welcome back pages for repeat webinar visitors worked to achieve the same. As a word of warning, try not to overcomplicate marketing KPIs (key performance indicators) around lead generation. We’ve found that qualified lead volume is the single most important lead generation KPI to track — alongside these four other metrics for keeping your efforts focused. #5: Make sure you have a product worth selling We’ve already touched on this point a bit but it’s important enough to warrant its own dedicated takeaway. Aside from support — from both inbound marketing and operations — product is at the core of your growth marketing success. If you haven’t nailed your product-market-fit, building customer loyalty is going to prove an uphill battle. You have to value your customer’s feedback as much as you do your own assumptions and intentions. This requires a willingness to iterate fast and frequently. Make it easy for your prospects to sign up and get started with a free trial. For us, this meant positioning clear and enticing CTAs with email feeds. And encouraging sign-ups without credit card requirements. Sure, having a credit card on file makes it easier to shimmy customers into the cycle of automated monthly subscriptions. But it also creates another barrier to entry. If you’re thinking with a long-term lens and developing a quality product that’ll be worth paying for come trial’s end, then the money will come. Final thoughts If it hasn’t been made clear already, we’re big proponents of quality traffic. It’s a driver behind our product offering — providing businesses with greater transparency around who their website visitors are. Rather than spend money on a sales team to push your product, invest in creating the best possible product. With enough backup from your inbound marketing efforts, it can practically sell itself over time. Dive into additional insights on how to reach $150k MRR without salespeople from our founder and CEO Pekka Koskinen on SlideShare. </sys

Is there room for SaaS in outer space?. Space has been the next frontier for a long time. And now, after years of startup outer space analogies, rocketship emojis, and coopting terms like “escape velocity” — the tech industry has finally collided with real space exploration. “Every single company on earth can benefit from space.” – Amaresh Kollipara, Founder and managing partner of Earth2Orbit, India’s first private space startup. Here’s a diagram of various applications NewSpace can have on our life on earth. [Source: SpaceTec] What exactly is the scope of opportunity when it comes to space, and where could SaaS and other subscription services fit? State of the NewSpace industry Well, we have lift off. And we’re speeding up. There are 900+ companies in the sector today, worldwide. FastCompany reports that 10,000 private space companies will be launched in the next decade, according to Richard Rocket, the CEO of NewSpace Global. The space industry has gone through a few different chapters to get to this point — a process which we in the tech world would call disruption! People debate how to define each stage and which stage we’re currently in, but here’s my breakdown: Space 1.0 – Old school. Governments and space agencies rule space exploration. Space 2.0 – Corporations with large budgets, such as Virgin Galactic and Google, come on the scene. Space 3.0 – The beginning of the tech transformation: New companies who are completely focused on keeping cost low and building for scalability. Space 4.0 – “We’re seeing further commercialization, digitalization, more participation. Which leads to further jobs and growth.” – Jan Wörner, European Space Agency director general, at DisruptSpace Summit in Berlin. It’s this commercialization, these startups behind it, that are shrinking timeframes and accelerating the cycle of innovation, well beyond the capability of governments with bureaucratic processes who are using their taxpayers’ money. Funding Indeed, Space Tech is the new frontier for angels and VCs as well. Investors are seeing the improvements, viability, and profit potential that were similarly promising with the evolution of SaaS. So far NewSpace has absorbed more than $10B in private funding, from what some call “billionaire philanthropists” and the like. More notable, though, is how venture capital is taking off. Sure, the majority of that crazy spike is big investments in established companies (not sure if we can say “legacy NewSpace” yet?). But even if you removed those two deals from the total, you’re still looking at an increase to $300 million spend in 2015. And we’re waiting to see just how high that’s climbed in 2016. Customers Who are these companies selling to? Just as in any other business sector, NewSpace contains products and services that target different customers. Before we continue, it’s helpful to take the standard business models and place them in the right context. B2G – Business to Government. An interesting development of Space 2.0 and beyond is how now governments and agencies are becoming the customers of NewSpace tech companies. Mexico’s government bought a ride to the moon via Astrobotic. These customers include state space agencies, militaries, and other security authorities (read: spies). B2B – Business to Business. B2B NewSpace companies provide hardware and services for other entrepreneurs and companies to take advantage of the opportunity in space. Rocket launching, ridesharing into space, software platforms to simulate satellites, etc. B2C – Business to Customer. These NewSpace verticals include tourism and real estate. These are the sexier mainstream topics, since they feed fantasies about average people, like me, getting a spin in space. But, again, because I have to limit the scope of this article somewhere, I draw the line at speculating about B2C “astropreneurship.” I leave that to proper scientists, journalists, and Hollywood. So what kind of business is emerging, really? While famous companies like SpaceX get most of the attention, there are countless other services and verticals within NewSpace. [Source: SpaceTec] Astroscale Indeed, there is still a whole ecosystem waiting to be built out. “There’s a wide array of components and technologies and high-level services that will sit on top of this whole space renaissance.” – Sunil Nagaraj, of Bessemer Venture Partners In fact, NewSpace is emulating the SaaS industry We’re seeing similar trends in how the sector is transforming – technological advances (and manufacturing developments) dramatically reduce cost. This lowers the barrier to entry, widening access and therefore also the various uses and applications of space exploration. All of this combines to encourage even further growth, perhaps even induce a Gold Rush as we’ve seen in SaaS. Access. Technology advancements and reduced costs have opened the playing field, making space entrepreneurship a realistic possibility for others: SpaceX cut the cost of launching a space mission from $1B to tens of millions. The founder of Moon Express predicts his moon landing to cost $55m, a quarter of the $2b governments have spent in the past. Rocket Labs creating vehicle that reduces the cost to send a rocket into space by 95% No need for expertise. NewSpace startups provide the above-mentioned access to other startups at a price. This removes the need for aerospace expertise; instead entrepreneurs can experiment, test, and develop their space products with the support of specific NewSpace services. Winner-take-all dynamic. The first one to market “gets a vastly disproportionate share of the economic return.” (Sunil) But of course, this doesn’t stay true in every vertical; it can change! The make-or-buy question. Decision makers ask themselves, “Do we really need to do this in-house?” Why invest so much capital in building your own rocket launcher or communications system when you can pay to use another company’s? Platforms. Businesses create new services by building on each other. We’re observing a shift from products to platforms in SaaS as well. So what space is there for SaaS? It’s hard to break down the vast opportunities into commercial business prospects, to summarize them in a single article like this, simply because the possibilities are actually endless. What’s interesting is that the as-a-Service-ification of NewSpace is just beginning, right about now. Some products are slated to be released in just the next few months. Plus it’s fun to speculate how it might spread and evolve. Let’s go though a handful of verticals. As we go along, I’ll point out some low-hanging fruit that Chad Anderson of Space Angels Network just shared at the Disrupt Space Summit in Berlin. Satellites I reached out to Sunil Nagaraj of Bessemer Venture Partners to get his thoughts on the role SaaS could play in NewSpace, and his first answer was to do with satellite software. He says we will need specific software for: “managing the development, testing, and deployment of several versions of software to several hardware versions of satellites on-orbit. The needs are demanding because bugs can easily be fatal in space.” – Sunil Nagaraj One service in this vein already exists. KubOS is a full-stack flight software for satellites, with ongoing support provided throughout the satellite mission. Their slogan has a familiar ring to it: “Space is hard … the software you use doesn’t have to be.” They offer their services as a yearly subscription. Another service is coming that allows “astropreneurs” to experiment with software, before deploying it in space and running the potentially huge risks that Sunil mentions. Galactic Sky is a satellite virtualization platform for other “astropreneurs” to test and execute their ideas and algorithms on virtual orbiting satellites. The software is slated to be available to early access customers in the first half of 2017. Galactic Sky allows NewSpace businesses to keep innovating “without having to go through the traditional process of building a spacecraft, integrating with a ground system, and waiting for a launch opportunity.” Data The scale and breadth of data accumulated in space is almost impossible for me to grasp, the variety of sources and multitude of purposes. “Electro-optical, infrared, hyperspectral, multispectral or other geospatial data.” When I reached out to ask Sunil Nagaraj what he thinks the role of SaaS could be, his first answer was to do with managing all the data that satellites collect. “This could be simple storage/retrieval or include a rich interface that offers some analytics overlay. (Orbital Insight is an example of this.)” Indeed, some believe data is the honey pot — and the true shiny object that investors are flocking to. “I don’t think anybody is investing in space companies. I think people are investing in highly proprietary data and data analytics and one of the areas where you can generate that is from space. That’s what people are investing in.’” – Spire CEO Peter Platzer, Deep Space industries If that’s the case, then as Sunil suggests, analytics products will continue to be in high demand and will evolve to suit the complexities of extraterrestrial data. Plus there will be a huge need for data storage and transfer services as well. Communication Slack in Space? Software is being developed to provide affordable communication services between earth and space, then eventually to provide inter-space communication. At least one company is already developing a communications service. Audacy hopes to unveil a ground-based data relay service in 2017, with a space-based service coming in 2019, both of which would provide real-time communication around the clock. On their website, they seem to want to distance themselves from the complexity mentioned above by driving home the simplicity of their solution: “Integrating Audacy into your operations is as simple as installing a certified radio and purchasing a service plan.” Perhaps, over time, such technology will expand to intergalactic SMS? 3D Printing Print-your-own, as-a-Service: Astronauts, robots, or other space technologies could print their own tools in space. I smell a subscription opportunity here — a certain price guarantees you a certain amount of printed material, per month. We already have the first 3D printer on the international space station. (Fun fact: the printer arrived there aboard a SpaceX commercial resupply mission.) The California-based Made in Space is a bootstrapped startup that helped NASA create the 3D printer. They’re now working on sending another commercial printer into space, so that businesses and scientists on earth can pay to make things that will then be sent back to Earth or stay in space. Navigation Mission Control SaaS: Tools to navigate, coordinate and manage missions in space. *Low-hanging fruit: Orbital corrections Star tracker is navigation software used across technologies and hardware, including satellites, launch vehicles, and small spacecrafts. NASA offers star tracker software, and they bill it as “relatively inexpensive.” But as the private sphere has been able to reduce the costs of space exploration by up to 90% so far, it’s likely there’s room for a SaaS takeover of NASA’s offering. In order to create a newer, cheaper, more agile star tracker software, a SaaS company would simply need to construct the complex database that actually powers star tracking: “Orientation of a star configuration is confirmed by comparison of measured angular differences with angular differences contained in a database. Star configurations viewed from a polyhedron defined by two, three, four or more non-coincident planes can be used to estimate a three-dimensional viewing direction of the polyhedron.” – NASA …Unless, of course, another aerospace company offers their database of star configurations as a separate SaaS offering, in which case an integration would take care of that. Why build when you can buy, right?

[INST] Is there room for SaaS in outer space? [/INST]

Space has been the next frontier for a long time. And now, after years of startup outer space analogies, rocketship emojis, and coopting terms like “escape velocity” — the tech industry has finally collided with real space exploration. “Every single company on earth can benefit from space.” – Amaresh Kollipara, Founder and managing partner of Earth2Orbit, India’s first private space startup. Here’s a diagram of various applications NewSpace can have on our life on earth. [Source: SpaceTec] What exactly is the scope of opportunity when it comes to space, and where could SaaS and other subscription services fit? State of the NewSpace industry Well, we have lift off. And we’re speeding up. There are 900+ companies in the sector today, worldwide. FastCompany reports that 10,000 private space companies will be launched in the next decade, according to Richard Rocket, the CEO of NewSpace Global. The space industry has gone through a few different chapters to get to this point — a process which we in the tech world would call disruption! People debate how to define each stage and which stage we’re currently in, but here’s my breakdown: Space 1.0 – Old school. Governments and space agencies rule space exploration. Space 2.0 – Corporations with large budgets, such as Virgin Galactic and Google, come on the scene. Space 3.0 – The beginning of the tech transformation: New companies who are completely focused on keeping cost low and building for scalability. Space 4.0 – “We’re seeing further commercialization, digitalization, more participation. Which leads to further jobs and growth.” – Jan Wörner, European Space Agency director general, at DisruptSpace Summit in Berlin. It’s this commercialization, these startups behind it, that are shrinking timeframes and accelerating the cycle of innovation, well beyond the capability of governments with bureaucratic processes who are using their taxpayers’ money. Funding Indeed, Space Tech is the new frontier for angels and VCs as well. Investors are seeing the improvements, viability, and profit potential that were similarly promising with the evolution of SaaS. So far NewSpace has absorbed more than $10B in private funding, from what some call “billionaire philanthropists” and the like. More notable, though, is how venture capital is taking off. Sure, the majority of that crazy spike is big investments in established companies (not sure if we can say “legacy NewSpace” yet?). But even if you removed those two deals from the total, you’re still looking at an increase to $300 million spend in 2015. And we’re waiting to see just how high that’s climbed in 2016. Customers Who are these companies selling to? Just as in any other business sector, NewSpace contains products and services that target different customers. Before we continue, it’s helpful to take the standard business models and place them in the right context. B2G – Business to Government. An interesting development of Space 2.0 and beyond is how now governments and agencies are becoming the customers of NewSpace tech companies. Mexico’s government bought a ride to the moon via Astrobotic. These customers include state space agencies, militaries, and other security authorities (read: spies). B2B – Business to Business. B2B NewSpace companies provide hardware and services for other entrepreneurs and companies to take advantage of the opportunity in space. Rocket launching, ridesharing into space, software platforms to simulate satellites, etc. B2C – Business to Customer. These NewSpace verticals include tourism and real estate. These are the sexier mainstream topics, since they feed fantasies about average people, like me, getting a spin in space. But, again, because I have to limit the scope of this article somewhere, I draw the line at speculating about B2C “astropreneurship.” I leave that to proper scientists, journalists, and Hollywood. So what kind of business is emerging, really? While famous companies like SpaceX get most of the attention, there are countless other services and verticals within NewSpace. [Source: SpaceTec] Astroscale Indeed, there is still a whole ecosystem waiting to be built out. “There’s a wide array of components and technologies and high-level services that will sit on top of this whole space renaissance.” – Sunil Nagaraj, of Bessemer Venture Partners In fact, NewSpace is emulating the SaaS industry We’re seeing similar trends in how the sector is transforming – technological advances (and manufacturing developments) dramatically reduce cost. This lowers the barrier to entry, widening access and therefore also the various uses and applications of space exploration. All of this combines to encourage even further growth, perhaps even induce a Gold Rush as we’ve seen in SaaS. Access. Technology advancements and reduced costs have opened the playing field, making space entrepreneurship a realistic possibility for others: SpaceX cut the cost of launching a space mission from $1B to tens of millions. The founder of Moon Express predicts his moon landing to cost $55m, a quarter of the $2b governments have spent in the past. Rocket Labs creating vehicle that reduces the cost to send a rocket into space by 95% No need for expertise. NewSpace startups provide the above-mentioned access to other startups at a price. This removes the need for aerospace expertise; instead entrepreneurs can experiment, test, and develop their space products with the support of specific NewSpace services. Winner-take-all dynamic. The first one to market “gets a vastly disproportionate share of the economic return.” (Sunil) But of course, this doesn’t stay true in every vertical; it can change! The make-or-buy question. Decision makers ask themselves, “Do we really need to do this in-house?” Why invest so much capital in building your own rocket launcher or communications system when you can pay to use another company’s? Platforms. Businesses create new services by building on each other. We’re observing a shift from products to platforms in SaaS as well. So what space is there for SaaS? It’s hard to break down the vast opportunities into commercial business prospects, to summarize them in a single article like this, simply because the possibilities are actually endless. What’s interesting is that the as-a-Service-ification of NewSpace is just beginning, right about now. Some products are slated to be released in just the next few months. Plus it’s fun to speculate how it might spread and evolve. Let’s go though a handful of verticals. As we go along, I’ll point out some low-hanging fruit that Chad Anderson of Space Angels Network just shared at the Disrupt Space Summit in Berlin. Satellites I reached out to Sunil Nagaraj of Bessemer Venture Partners to get his thoughts on the role SaaS could play in NewSpace, and his first answer was to do with satellite software. He says we will need specific software for: “managing the development, testing, and deployment of several versions of software to several hardware versions of satellites on-orbit. The needs are demanding because bugs can easily be fatal in space.” – Sunil Nagaraj One service in this vein already exists. KubOS is a full-stack flight software for satellites, with ongoing support provided throughout the satellite mission. Their slogan has a familiar ring to it: “Space is hard … the software you use doesn’t have to be.” They offer their services as a yearly subscription. Another service is coming that allows “astropreneurs” to experiment with software, before deploying it in space and running the potentially huge risks that Sunil mentions. Galactic Sky is a satellite virtualization platform for other “astropreneurs” to test and execute their ideas and algorithms on virtual orbiting satellites. The software is slated to be available to early access customers in the first half of 2017. Galactic Sky allows NewSpace businesses to keep innovating “without having to go through the traditional process of building a spacecraft, integrating with a ground system, and waiting for a launch opportunity.” Data The scale and breadth of data accumulated in space is almost impossible for me to grasp, the variety of sources and multitude of purposes. “Electro-optical, infrared, hyperspectral, multispectral or other geospatial data.” When I reached out to ask Sunil Nagaraj what he thinks the role of SaaS could be, his first answer was to do with managing all the data that satellites collect. “This could be simple storage/retrieval or include a rich interface that offers some analytics overlay. (Orbital Insight is an example of this.)” Indeed, some believe data is the honey pot — and the true shiny object that investors are flocking to. “I don’t think anybody is investing in space companies. I think people are investing in highly proprietary data and data analytics and one of the areas where you can generate that is from space. That’s what people are investing in.’” – Spire CEO Peter Platzer, Deep Space industries If that’s the case, then as Sunil suggests, analytics products will continue to be in high demand and will evolve to suit the complexities of extraterrestrial data. Plus there will be a huge need for data storage and transfer services as well. Communication Slack in Space? Software is being developed to provide affordable communication services between earth and space, then eventually to provide inter-space communication. At least one company is already developing a communications service. Audacy hopes to unveil a ground-based data relay service in 2017, with a space-based service coming in 2019, both of which would provide real-time communication around the clock. On their website, they seem to want to distance themselves from the complexity mentioned above by driving home the simplicity of their solution: “Integrating Audacy into your operations is as simple as installing a certified radio and purchasing a service plan.” Perhaps, over time, such technology will expand to intergalactic SMS? 3D Printing Print-your-own, as-a-Service: Astronauts, robots, or other space technologies could print their own tools in space. I smell a subscription opportunity here — a certain price guarantees you a certain amount of printed material, per month. We already have the first 3D printer on the international space station. (Fun fact: the printer arrived there aboard a SpaceX commercial resupply mission.) The California-based Made in Space is a bootstrapped startup that helped NASA create the 3D printer. They’re now working on sending another commercial printer into space, so that businesses and scientists on earth can pay to make things that will then be sent back to Earth or stay in space. Navigation Mission Control SaaS: Tools to navigate, coordinate and manage missions in space. *Low-hanging fruit: Orbital corrections Star tracker is navigation software used across technologies and hardware, including satellites, launch vehicles, and small spacecrafts. NASA offers star tracker software, and they bill it as “relatively inexpensive.” But as the private sphere has been able to reduce the costs of space exploration by up to 90% so far, it’s likely there’s room for a SaaS takeover of NASA’s offering. In order to create a newer, cheaper, more agile star tracker software, a SaaS company would simply need to construct the complex database that actually powers star tracking: “Orientation of a star configuration is confirmed by comparison of measured angular differences with angular differences contained in a database. Star configurations viewed from a polyhedron defined by two, three, four or more non-coincident planes can be used to estimate a three-dimensional viewing direction of the polyhedron.” – NASA …Unless, of course, another aerospace company offers their database of star configurations as a separate SaaS offering, in which case an integration would take care of that. Why build when you can buy, right?

<sys> [INST] Is there room for SaaS in outer space? [/INST] Space has been the next frontier for a long time. And now, after years of startup outer space analogies, rocketship emojis, and coopting terms like “escape velocity” — the tech industry has finally collided with real space exploration. “Every single company on earth can benefit from space.” – Amaresh Kollipara, Founder and managing partner of Earth2Orbit, India’s first private space startup. Here’s a diagram of various applications NewSpace can have on our life on earth. [Source: SpaceTec] What exactly is the scope of opportunity when it comes to space, and where could SaaS and other subscription services fit? State of the NewSpace industry Well, we have lift off. And we’re speeding up. There are 900+ companies in the sector today, worldwide. FastCompany reports that 10,000 private space companies will be launched in the next decade, according to Richard Rocket, the CEO of NewSpace Global. The space industry has gone through a few different chapters to get to this point — a process which we in the tech world would call disruption! People debate how to define each stage and which stage we’re currently in, but here’s my breakdown: Space 1.0 – Old school. Governments and space agencies rule space exploration. Space 2.0 – Corporations with large budgets, such as Virgin Galactic and Google, come on the scene. Space 3.0 – The beginning of the tech transformation: New companies who are completely focused on keeping cost low and building for scalability. Space 4.0 – “We’re seeing further commercialization, digitalization, more participation. Which leads to further jobs and growth.” – Jan Wörner, European Space Agency director general, at DisruptSpace Summit in Berlin. It’s this commercialization, these startups behind it, that are shrinking timeframes and accelerating the cycle of innovation, well beyond the capability of governments with bureaucratic processes who are using their taxpayers’ money. Funding Indeed, Space Tech is the new frontier for angels and VCs as well. Investors are seeing the improvements, viability, and profit potential that were similarly promising with the evolution of SaaS. So far NewSpace has absorbed more than $10B in private funding, from what some call “billionaire philanthropists” and the like. More notable, though, is how venture capital is taking off. Sure, the majority of that crazy spike is big investments in established companies (not sure if we can say “legacy NewSpace” yet?). But even if you removed those two deals from the total, you’re still looking at an increase to $300 million spend in 2015. And we’re waiting to see just how high that’s climbed in 2016. Customers Who are these companies selling to? Just as in any other business sector, NewSpace contains products and services that target different customers. Before we continue, it’s helpful to take the standard business models and place them in the right context. B2G – Business to Government. An interesting development of Space 2.0 and beyond is how now governments and agencies are becoming the customers of NewSpace tech companies. Mexico’s government bought a ride to the moon via Astrobotic. These customers include state space agencies, militaries, and other security authorities (read: spies). B2B – Business to Business. B2B NewSpace companies provide hardware and services for other entrepreneurs and companies to take advantage of the opportunity in space. Rocket launching, ridesharing into space, software platforms to simulate satellites, etc. B2C – Business to Customer. These NewSpace verticals include tourism and real estate. These are the sexier mainstream topics, since they feed fantasies about average people, like me, getting a spin in space. But, again, because I have to limit the scope of this article somewhere, I draw the line at speculating about B2C “astropreneurship.” I leave that to proper scientists, journalists, and Hollywood. So what kind of business is emerging, really? While famous companies like SpaceX get most of the attention, there are countless other services and verticals within NewSpace. [Source: SpaceTec] Astroscale Indeed, there is still a whole ecosystem waiting to be built out. “There’s a wide array of components and technologies and high-level services that will sit on top of this whole space renaissance.” – Sunil Nagaraj, of Bessemer Venture Partners In fact, NewSpace is emulating the SaaS industry We’re seeing similar trends in how the sector is transforming – technological advances (and manufacturing developments) dramatically reduce cost. This lowers the barrier to entry, widening access and therefore also the various uses and applications of space exploration. All of this combines to encourage even further growth, perhaps even induce a Gold Rush as we’ve seen in SaaS. Access. Technology advancements and reduced costs have opened the playing field, making space entrepreneurship a realistic possibility for others: SpaceX cut the cost of launching a space mission from $1B to tens of millions. The founder of Moon Express predicts his moon landing to cost $55m, a quarter of the $2b governments have spent in the past. Rocket Labs creating vehicle that reduces the cost to send a rocket into space by 95% No need for expertise. NewSpace startups provide the above-mentioned access to other startups at a price. This removes the need for aerospace expertise; instead entrepreneurs can experiment, test, and develop their space products with the support of specific NewSpace services. Winner-take-all dynamic. The first one to market “gets a vastly disproportionate share of the economic return.” (Sunil) But of course, this doesn’t stay true in every vertical; it can change! The make-or-buy question. Decision makers ask themselves, “Do we really need to do this in-house?” Why invest so much capital in building your own rocket launcher or communications system when you can pay to use another company’s? Platforms. Businesses create new services by building on each other. We’re observing a shift from products to platforms in SaaS as well. So what space is there for SaaS? It’s hard to break down the vast opportunities into commercial business prospects, to summarize them in a single article like this, simply because the possibilities are actually endless. What’s interesting is that the as-a-Service-ification of NewSpace is just beginning, right about now. Some products are slated to be released in just the next few months. Plus it’s fun to speculate how it might spread and evolve. Let’s go though a handful of verticals. As we go along, I’ll point out some low-hanging fruit that Chad Anderson of Space Angels Network just shared at the Disrupt Space Summit in Berlin. Satellites I reached out to Sunil Nagaraj of Bessemer Venture Partners to get his thoughts on the role SaaS could play in NewSpace, and his first answer was to do with satellite software. He says we will need specific software for: “managing the development, testing, and deployment of several versions of software to several hardware versions of satellites on-orbit. The needs are demanding because bugs can easily be fatal in space.” – Sunil Nagaraj One service in this vein already exists. KubOS is a full-stack flight software for satellites, with ongoing support provided throughout the satellite mission. Their slogan has a familiar ring to it: “Space is hard … the software you use doesn’t have to be.” They offer their services as a yearly subscription. Another service is coming that allows “astropreneurs” to experiment with software, before deploying it in space and running the potentially huge risks that Sunil mentions. Galactic Sky is a satellite virtualization platform for other “astropreneurs” to test and execute their ideas and algorithms on virtual orbiting satellites. The software is slated to be available to early access customers in the first half of 2017. Galactic Sky allows NewSpace businesses to keep innovating “without having to go through the traditional process of building a spacecraft, integrating with a ground system, and waiting for a launch opportunity.” Data The scale and breadth of data accumulated in space is almost impossible for me to grasp, the variety of sources and multitude of purposes. “Electro-optical, infrared, hyperspectral, multispectral or other geospatial data.” When I reached out to ask Sunil Nagaraj what he thinks the role of SaaS could be, his first answer was to do with managing all the data that satellites collect. “This could be simple storage/retrieval or include a rich interface that offers some analytics overlay. (Orbital Insight is an example of this.)” Indeed, some believe data is the honey pot — and the true shiny object that investors are flocking to. “I don’t think anybody is investing in space companies. I think people are investing in highly proprietary data and data analytics and one of the areas where you can generate that is from space. That’s what people are investing in.’” – Spire CEO Peter Platzer, Deep Space industries If that’s the case, then as Sunil suggests, analytics products will continue to be in high demand and will evolve to suit the complexities of extraterrestrial data. Plus there will be a huge need for data storage and transfer services as well. Communication Slack in Space? Software is being developed to provide affordable communication services between earth and space, then eventually to provide inter-space communication. At least one company is already developing a communications service. Audacy hopes to unveil a ground-based data relay service in 2017, with a space-based service coming in 2019, both of which would provide real-time communication around the clock. On their website, they seem to want to distance themselves from the complexity mentioned above by driving home the simplicity of their solution: “Integrating Audacy into your operations is as simple as installing a certified radio and purchasing a service plan.” Perhaps, over time, such technology will expand to intergalactic SMS? 3D Printing Print-your-own, as-a-Service: Astronauts, robots, or other space technologies could print their own tools in space. I smell a subscription opportunity here — a certain price guarantees you a certain amount of printed material, per month. We already have the first 3D printer on the international space station. (Fun fact: the printer arrived there aboard a SpaceX commercial resupply mission.) The California-based Made in Space is a bootstrapped startup that helped NASA create the 3D printer. They’re now working on sending another commercial printer into space, so that businesses and scientists on earth can pay to make things that will then be sent back to Earth or stay in space. Navigation Mission Control SaaS: Tools to navigate, coordinate and manage missions in space. *Low-hanging fruit: Orbital corrections Star tracker is navigation software used across technologies and hardware, including satellites, launch vehicles, and small spacecrafts. NASA offers star tracker software, and they bill it as “relatively inexpensive.” But as the private sphere has been able to reduce the costs of space exploration by up to 90% so far, it’s likely there’s room for a SaaS takeover of NASA’s offering. In order to create a newer, cheaper, more agile star tracker software, a SaaS company would simply need to construct the complex database that actually powers star tracking: “Orientation of a star configuration is confirmed by comparison of measured angular differences with angular differences contained in a database. Star configurations viewed from a polyhedron defined by two, three, four or more non-coincident planes can be used to estimate a three-dimensional viewing direction of the polyhedron.” – NASA …Unless, of course, another aerospace company offers their database of star configurations as a separate SaaS offering, in which case an integration would take care of that. Why build when you can buy, right? </sys