James Taylor

The Venture Capital ‘Regatta’ is what is Replacing The VC Factory Model. The way VC works now is that there is a ‘start’ line for companies when you cross from early round financing into ‘series’ raises, A,B,C,D — but MOST of the actual race now takes place before the ‘gun’ — … just like in a sailing regatta half the race is won/ lost in tacking back and forth before the start line jockeying for position … and most of investing rather than being structured fixed ‘Seed,A,B,C,D’ is mini-nimble financing rounds before the A in a string of financing.. implications? Well as a seed investors you don’t think about what you do in a single round / bite… but instead in terms of ‘tacks’ back and forth as the company gets ready before the race even starts.

63

9 Comments

Are Dutch and European founders not ambitious enough? 🤔 I just read Techleap's latest report: "AI Scaling Challenges for Dutch Founders." (Okay, I got AI to read it and share the highlights with me. 😜) This quote caught my (& Claude's) eye: "𝘞𝘦 𝘢𝘳𝘦 𝘥𝘦𝘢𝘥 𝘰𝘯 𝘢𝘳𝘳𝘪𝘷𝘢𝘭 𝘪𝘧 𝘰𝘯𝘭𝘺 4% 𝘰𝘧 𝘋𝘶𝘵𝘤𝘩 𝘈𝘐 𝘤𝘰𝘮𝘱𝘢𝘯𝘪𝘦𝘴 𝘢𝘳𝘦 𝘱𝘭𝘢𝘯𝘯𝘪𝘯𝘨 𝘵𝘰 𝘳𝘢𝘪𝘴𝘦 𝘮𝘰𝘳𝘦 𝘵𝘩𝘢𝘯 10𝘔. 𝘛𝘩𝘪𝘴 𝘱𝘪𝘵𝘪𝘧𝘶𝘭 𝘢𝘮𝘣𝘪𝘵𝘪𝘰𝘯..." Almost every day, I see posts and jokes about European founders thinking too small. As someone who works with Euro-founders everyday, I have a different view. I see: - Massive visions - Global mindsets from day one - Founders ready to take on the world It's not the founders who lack ambition. They're just working within the realms of what's possible in Europe. That's why many of them get funded from and/or move to the US. 💰 The real lack of ambition? That's from investors and governments in Europe. 🇪🇺 I'm still working on an article, "The Case for European Optimism." And I think it will show that European founders are just as ambitious as their US counterparts. The real question we should be asking is: - How can we create an environment that allows founders to dream bigger and reach higher? 🚀 And yes, I know this quotes mentions deep ecosystem issues... --- ↳ What's your take? Are European founders thinking too small, or is it the ecosystem that's holding them back? 👇

8

1 Comment

My saas.wtf newsletter just cracked the 2,500 subscriber mark. 🎉 These were the 5 most popular articles: 1️⃣ My Go-To SaaS Benchmark Reports: https://lnkd.in/eVwEqJPj 2️⃣ SaaS Valuation Myths: https://lnkd.in/e2sA_Bgn 3️⃣ Time to hit $1M ARR: https://lnkd.in/emmyt-Hy 4️⃣ Micro M&A for SaaS Startups: https://lnkd.in/e5sCK2mB 5️⃣ Cohort Analysis using AI: https://lnkd.in/ebAxhdma I hope you enjoyed the others too. 🙂 On to the next 2500 subs! #saas #startups #founders #kpi #analysis #valuation #ai #benchmarks #pricing #newsletter

73

19 Comments

𝗪𝗲 𝗻𝗲𝗲𝗱 𝘁𝗼 𝗿𝗲𝘁𝗵𝗶𝗻𝗸 𝗼𝘂𝗿 𝗦𝗮𝗮𝗦 𝗺𝗲𝘁𝗿𝗶𝗰𝘀. CAC, LTV, MRR, and churn rate have been north-star metrics for years—in today’s market, they're no longer enough. 𝗪𝗵𝘆? // There’s too much competition, raising CAC and making it harder to keep churn low with reduced customer loyalty, further decreasing expected LTV. // Customers expect more personalized services, increasing costs. // Market volatility affects spending habits, affecting MRR and churn unpredictably. // Prioritizing growth over profit sidelines important profitability metrics and puts a risk on long-term sustainability. Calculating the CAC payback period gives us insights into the efficiency and sustainability of our growth strategies. 𝗪𝗵𝗮𝘁 𝗶𝘀 𝘁𝗵𝗲 𝗖𝗔𝗖 𝗽𝗮𝘆𝗯𝗮𝗰𝗸 𝗽𝗲𝗿𝗶𝗼𝗱?  It’s the time it takes to recover the cost of acquiring a new customer through the revenue it generates. A shorter payback period indicates an efficient and sustainable business model. The average benchmark for SaaS is 16 months; while there is no “good” number, keeping on top of industry trends is beneficial. Micro SaaS firms should target 3 to 6mths... Shortening the CAC payback period improves cash flow, minimizes potential customer churn, accelerates growth, and increases investment appeal through quicker ROI. 𝗝𝘂𝘀𝘁 𝘁𝗮𝗸𝗲 𝗮 𝗹𝗼𝗼𝗸 𝗮𝘁 ZoomInfo’s 𝗰𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻𝘀.  Their slowed revenue growth, coupled with a spike in churn, has extended their CAC payback period to an alarming 138 months 🚩 Indicating that CAC costs won't be recuperated for over a decade, limiting their flexibility to fund growth and further innovation. This scenario further underscores the need for SaaS to continuously optimize CAC and retention strategies to maintain a sustainable business model, especially in a volatile market. 𝗛𝗲𝗿𝗲’𝘀 𝗵𝗼𝘄 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱 𝗶𝘁: > Enhance conversion rates > Focus on high-quality leads > Optimize pricing strategies > Leverage automation and CRM to streamline operations > Refine marketing spend > Invest in PLG > Upsell, cross-sell, and boost retention With the rise of AI and competition, churn rise is inevitable.  Despite this, it’s still a promising market.  You just need to be proactive and adapt your strategies to survive and thrive in these changing economic conditions. Thanks to OnlyCFO for the insights! If you have a Micro SaaS and are exploring an exit, shoot me a message. Otherwise, follow for more awesome content. #SaaS #MicroSaaS #Startups #Strategy #Tech 

46

3 Comments

This episode of Moneywise left me more inspired than any of the +600 pod episodes I've recorded. My friend Mike Beckham owns Simple Modern, an ecom business. The biz does +$200m/year and is quite profitable. He bootstrapped it, which is a big deal. Mike dives deep on his personal finances. But, more importantly, he talks about how he gives away most of the money. And not just giving it away when he sells or hits big. But he's been giving it away since he started. We dive deep on - how he decides who to give to why - what % of his money he gives - how to do it tax wise And everything else on this topic that people are typically WAY too afraid to discuss. Mike is absolutely amazing. Watch or listen: https://lnkd.in/g_XHv98V

135

14 Comments

This is WILD! 🏋‍♀️ 7 day numbers from one of Order Editing's recent launches: 🏌‍♂️ 352 tickets solved 🥂 $4329 earned in upsell revenue 🍾 🍾 🍾 $1760 in cost saving So for each order edit this merchant makes $15.71 in upsell revenue The app has returned 15x the monthly license fee in 1 week DISGUSTING BEHAVIOUR! #shopify #ecommerce #customerexperience

70

14 Comments

Summary of conversations at conferences about AI in commercial functions: Person a: what are you using AI for in your business? Person b: 🤷‍♂️ we tried to make a super cool predictive model but our data was too dirty. Also our revops team was understaffed. I did ask ChatGPT4 to make me a list of restaurants to visit at this conference. Person c: that’s weird, I asked it to make me a picture this morning Person a: 🙋‍♂️ still wondering….what are you using it for in your business again? I believe that AI will ultimately be really helpful to many different business functions. We’re in the very early innings, though.

17

11 Comments

Spotify went from $13m to $13b in annual revenue in 15 years. Their CFO said it was due to these 4 growth strategies: (In particular, they noted, from 2020 onwards.) 1. Freemium Model Expansion Spotify continues to leverage its freemium model to attract users, with free users being supported by advertisements. This model has been critical in converting free users to paid subscribers, driving user engagement and retention. 2. Diversification and Acquisitions Spotify has made strategic acquisitions to diversify its offerings beyond music. This includes investments in podcasting through purchases of companies like Gimlet and Anchor, and expanding into audiobooks. These moves have not only brought in new types of content but also new revenue streams. 3. Advertising Innovations Advertising has become a significant growth driver for Spotify. The company has enhanced its advertising technologies, such as Streaming Ad Insertion (SAI) and the Spotify Audience Network, to better target and measure ad effectiveness. These innovations have tripled Spotify's ad revenue since 2018 and created new opportunities for advertisers. 4. Global Partnerships Spotify has entered into partnerships, such as the one with WPP, to integrate deeper insights and create more relevant advertising strategies. This partnership aims to leverage Spotify's extensive user data to enhance ad engagement and effectiveness. * * * * * * * They now have: → 550+ million Monthly Active Users → 230+ million paid subscribers → A valuation of $25–35 billion They are still losing money, but now less than ever. Their aim is to dominate the audio space long-term. They're certainly on track to achieving that. I give insights like this every week in my newsletter: The Growth Mindset. Subscribe using the link below. https://lnkd.in/gwnJ28jy Repost this to help your network & follow me Adam Graham for more content like this.

189

133 Comments

Here are the full terms of our recent investment Round size: $61.500 (430.000 DKK) Equity dilution: 2% Valuation: $3.000.000 (21.000.000 DKK) Post Money Cap Pro rata: no Type: SAFE Round Stage: Angel For context: Alvas was founded 11 months ago We’re two founders, one highly technical, the other technical and highly commercial. We build product and get customers ourselves Early revenue with 12 clients and $3250 MRR Our product is simple to understand, solves a pain point for a smaller niche And we’ve shown how we create value for multiple big Danish brands 🦄 #investment #StartUp #founder #unicorn _________________ I’m sharing the journey of building a Unicorn We’ve recently received funding, and I’m sharing everything about the investment Tomorrow I will share why we raised, and what the money will be spent on Feel free to follow along

423

30 Comments

The Importance of Founder-Led Sales - Why Founder-Led Sales Are Crucial in the Early Stages Back in 1998, I had just returned from an overseas youth development trip to Patagonia (this picture is of our base camp), and while it was one of the best experiences of my life, I thought I could do it better / differently and started my first company GVI I was 24 years old, had no experience, money, or network, but I had a compelling vision and the will to hustle, which can open a LOT of doors. My first door was with a very well-respected charity that ran research centers throughout the rainforests of Central and South America. My pitch was to let me use their infrastructure for my environmental expeditions. It was a double win: low-cost operations while piggybacking off their brand. I panicked 20 minutes before my big meeting and had a serious dose of imposter syndrome. I was 24, and the average age of the trustees combined was older than the Royal Geographical Society. To quickly “age up”, I bought some reading glasses that were way too strong. Walking into the meeting, I ended up tripping over as my vision was so impaired. However, whether through sympathy or the pitch, we got the deal, and GVI was born. Vision and hustle! In the early stages of a company, every decision can be a game-changer. One of the most critical aspects is sales, and there's a strong case for why founders should be at the forefront of this effort. Here’s why: 1.   Vision and Passion: Founders carry the original vision and passion for the product. Their enthusiasm is contagious and can convince potential customers and partners more effectively than anyone else. 2.   Deep Product Knowledge: Founders know their product inside and out. They can answer any question, address any concern, and provide insights into the development and future roadmap that no one else can. 3.   Agility and Feedback: Early sales efforts are as much about learning as they are about selling. Founders are in the best position to gather and act on feedback, making necessary pivots and improvements quickly. 4.   Credibility and Trust: Customers and early adopters often want to know who is behind the product. Having direct interaction with the founders builds trust and establishes credibility, fostering stronger relationships. 5.   Building the Sales Playbook: The initial sales process is the foundation for future efforts. Founders can refine the pitch, identify key objections, and develop the strategies that will later be scaled by a dedicated sales team. In summary, founder-led sales are not just about closing deals; they are about building the right foundation for growth. Outsell Sales we make it easy for Founders to stay involved in the sales process while also planning their exit from it.  #Startups #Sales #Entrepreneurship #Leadership #BusinessGrowth #StartupJourney #FounderLedSales

14

4 Comments

Been enjoying Adam Robinson's posts on going from $1mm - 2mm in ARR – in 6 weeks. The key? Pricing. Too many startups underestimate the impact of pricing on their growth and overall success. There are 4 mistakes startups make ALL THE TIME: 1. Price too low. Most (if not all) startups price too low. It's that simple. Want an example of a company that didn't? Tesla. Pricing Roadsters. Model S and Model X at a premium seems to have worked out ok for them. 2. Price too high. Early on you need customers. If you believe your software creates tremendous value but nobody's willing to pay for it, get curious. Maybe they see the value in a different way, or don't see the value at all. The risks to change might outweigh whatever value you might create, and trying to extract a a lot of value may kill your company. Countless examples of this. 3. Pricing that is too complex. Pricing should be simple at first, and get complicated later. Early on you need to experiment and learn; complex pricing makes that harder (and can ruin experiments). Keep it simple early. 4. Overly simple pricing. Pricing should become more complicated as you grow. This is usually the only way to grow NRR (net revenue retention) predictably–by providing more expensive choices for customers willing to pay, while opening up new markets or new segments, and holding off new entrants. Pricing is key to your success both early and as you continue to grow.

4

2 Comments

Trying to get from $0 to $1M ARR? Find your PMF. Obsess over identifying a problem that a big enough market urgently needs solving. Talk to your customers about their most painful problems and validate your assumptions. Not all feedback will be valuable. Focus on insights from your early adopters—they become your ICP and shape your product. Stay true to your core customer profile. Chasing revenue or artificially widening the PMF dilutes your product's effectiveness. Your product can only meet so many needs. Tailor every feature to your ICP. Your first version is your Minimum Sellable Product (MSP). Make the MSP easy to use and beneficial. With customers using your product, continually collect feedback to improve: 1 - Offering 2 - Marketing messages 3 - Sales calls 4 - Pricing structure 5 - Demo flow If you reach $1M ARR, congratulations! Your product has real demand. Next, it’s time to think about scaling to $10M ARR. More on that soon.

63

7 Comments

The highest valuation in a financing round might be attractive but often it is not the option you should chose. Because it will hurt you later. 1.) With an established valuation you also create an expectation for the exit price. E.g. if you raise at 50m you need to build a 500m company - ask yourself how feasible that is in your industry with your model 2.) The highest bidder might not be the best fit for you in terms of know-how and/or on a personal level. Given you will be "married" to your investor for a longer period of time a 100% match is important. 3.) Often raising at a more aggressive valuation takes longer, so you will put the money to work later than with a less competitive but faster round. It is worth asking yourself if some or maybe all of the additional dilution of a lower priced round will be offset by putting the money to work earlier and spending less time on fundraising. 4.) The high price might come with additional asks that can hurt you later 2x liq pref, additional guarantees.... So don't raise the price at all cost

21

4 Comments

Most Pioneer Fund companies send monthly updates (some quarterly), and we read every update across the portfolio of 500+ companies. I actually still personally read every update. Most startups send updates with these sections, and it works well: - High level metrics (revenue, maybe another key metric or two like GMV or MAU, growth since last month, cash in bank, burn rate, runway). Many of the most consistently-growing or fastest-growing companies also include a revenue graph. - Highlights - Lowlights - Investor asks - Maybe a couple investor shoutouts from last month - Some short commentary on what the current priorities are, what's coming next, etc. Some founders like to include a special section or two. A few of my favorites: - Photos or videos of technical progress for hardware companies - One of our founders sends a self rating on a scale of 0-10 for the month, along with detailed explanation. Pretty impressive. - A zoomed out view of how the mission/vision/strategy is specifically evolving - Some have very detailed additional sections that are specific to their business. E.g. manufacturing updates, distribution updates, regulatory updates, etc. Each investor update may only take a few minutes to read, but they are the summary of the hard work of an entire team for an entire month, often fighting uphill or sprinting downhill or exploring the idea maze. We're always grateful reading them.

80

8 Comments

How Dovetail grew to a $970M (Australian) valuation in 5 years—and created a new SaaS category: I chatted with 4 members of their team, and 4 UXR leaders, to learn the details. 1. Product-led growth, design-led company Dovetail's business model is decidedly product-led growth. The company relies on the product, and inherently viral features like research reports, to acquire, convert, monetize, and retain users. But design-led is its culture. CEO and co-founder Benjamin Humphrey has been in the details of the design since its beginning. And the product "feels" like it as a result. 2. Creating a hub for a neglected persona Rewind to 2016. While engineers had JIRA, Designers had Sketch, PMs had Google Docs, and analysts had Tableau, User Researchers had... nothing? Their workflow was a mess of hopping between different software. Ben had lived it as a product designer at Atlassian. There was a plethora of software focused on how to build, but there was almost nothing about what to build. So, after proving out the idea with an MVP, he recruited his Atlassian Engineer friend, Bradley Ayers, to join him. 3. Mastering the PLG motion Dovetail excels in all layers of PLG: → Acquisition: they don't use any outbound sales, focusing on product acquisition → Core problem communication: the home page emphasizes improving how you make product decisions → Reduced friction: its onboarding is focused on a standard walkthrough, but it is 10 steps → Activation: Dovetail has an intuitive product, examples, and templates to take you from setup to habit → Retention: as a system of record, the product gets stickier as more (qualitative) data is put in it → Monetization: the free plan has unlimited functionality, but only 1 project → Expansion: it has a natural growth of free users, who eventually become editors 4. Creating powerful, reinforcing growth loops Dovetail 2 two core loops: • More paid seats helps them build a better product, which helps UXRs succeed, which drives more UXRs and paid seats                                 • UXRs succeed, driving collaborators to join, which go from free to paid seats As well as 2 ancillary loops: • The more paid seats, the more it can invest in inbound sales • The more free seats, the more expansion products like Channels (to analyze customer support data) it can build 5. Building towards a category of one While there are competitors in the research insights space, Dovetail is building out its own category. It's not quite transcription. It's not quite a hub for research. It's that and more. This has helped it create its own, new category in SaaS. As Benjamin, still the CEO, told me: "We're building a system of record for all insights... It's a friggin' long, 20-year journey. You need to be a little nuts to have that level of ambition. "

429

42 Comments

The Ultimate Cheat Sheet collection for SaaS leaders & Founders - by Vencha, Included #VC & Notion Capital Here you have 15 cheat sheets on marketing, sales, fundraising, pitch decks and more: 💵 How to price and package your software ? 🎢 The 5 prospect stages 🚀How fundable is your company? 💸 Leadership transitions at different stages of business growth 🎯 SaaS monetisation in 8 steps 🕹️ Identifying your market: TAM, SAM & SOM demystified 🛠️ How to skyrocket SaaS sales? ⚖️ The ICP Grid, goal setting and how to prioritize ? #Fintech #saas #CheatSheet #isaphr #isapone #isapsolutions #starthubagency #isapinvestments www.isap.group www.isap.one www.isap.hr www.isap.agency www.isap.investments iSAP Solutions ltd iSAP ONE iSAP.HR StartHub.Agency iSAP Group Investments ltd Tino Herold

3

"Mr. Money lives on focus island"* I regularly talk to B2B SaaS founders about the best revenue channel to start with. They usually have 3 dreams: A) The “product led growth” dream 🧑‍💻 Tons of small customers who come by themselves through the website. Problem: high churn, no expansion potential. B) The “someone else is selling for me “ dream 🤝 Finding sales partners who have access to the market and sell my solution. Problem: no commitment, complicated contracts, no direct access to customers. C) The “Big fish” dream 🐠 Closing big enterprise deals with a lot revenue potential. Problem: long sales cycle, many stake holders, high customization effort. Dreams are good, but revenue is better for a startup! ➡️ The best target group up to 1M ARR revenue are mid market companies! Here you have the best correlation between sales cycle, sales potential and product feedback. Focus and learn to sell to this customer group in the beginning. Start selling "up-market" later and do partner business opportunistically. Happy selling 🚀 *The saying is from my friend Johannis Hatt he's right and a great business angel on top. ____________________________ Sharing my experience as an entrepreneur and angel investor. Investing in early stage B2B SaaS startups. Happy to connect 👋

64

14 Comments

OKRs were created by Intel and later adopted by Google. Here’s what you need to know: In a nutshell, OKRs and KPIs work together. OKRs set big goals and the path to follow. KPIs are the numbers that show how well you're moving towards those goals. When you use them together, they give a full picture of your plans and how well you're doing. In this cheat sheet, you’ll find a side-to-side comparison of both terms: → Definition → Purpose → Nature → Flexibility → Alignment → Examples → Measurement → Usage → Ownership Embrace both, and watch your strategy evolve from good to game-changing. #BrainDumps 🧠 💩 // Brain Dump #21

409

106 Comments