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Advice from a serial subscription box entrepreneur. You can also check out this interview on the SaaS Open Mic Podcast: How it all began Ed: One thing that I’m excited to chat about with you is that you deal not in software but with actual physical subscription products. To give people a better picture of what you do, I was wondering if you could just describe yourself to someone else. Jameson: Well, basically at this point in my career, I would describe myself as a serial subscription or subscription box entrepreneur. It’s basically all I’ve been doing over the last several years. I haven’t had a month in 5 years that didn’t have a subscription box product being shipped out. So I’ve started several subscription boxes, I held a role at CrateJoy, which is a platform for subscription boxes. Then I actually ended up leaving CrateJoy to focus on another subscription box business. My current business is the subscription box, Yogi Surprise. Ed: Why subscription boxes? Is there something that drove you to that — was it a conscious decision in the first place or did it just happen? Jameson: It just happened. My first subscription business was Conscious Box, which started in 2011. When we launched, there was no one else doing it besides Birchbox who had launched their beta at the same time. So when we came up with the idea to do a subscription sampling service for natural products, we just liked the idea of this experience we’re sending to people — packaging it up in this cute little box with nice presentation. We weren’t thinking about any of the other business mechanics that make the model cool. We weren’t think about how recurring revenue is a great thing to have, and the predictability that you can have in these types of businesses. We didn’t think about any of those cool benefits you get from the business model. We were just enamored by the idea of sending this cool experience to people. Ed: Okay, so it really was a product-first type thing, to put out something that drives continual value for customers. Jameson: Exactly. So now people going into it and starting their own subscription box business, they’re hyper-aware of some of the other great benefits of the model. But for us, we weren’t aware of those things. We just thought it was cool to send a box of cool stuff and an experience to people. Getting started — PMF and MVP? Ed: The great thing about SaaS is that you can much more easily win a customer and then focus on retention, focus on delivering ongoing value. I’m assuming that’s similar for a subscription box product. Is there anything on your side that makes it more tricky? For example, that it’s a physical product you’re dealing with. And there are logistics involved and you need to source product for that, right? Jameson: Honestly, a Minimum Viable Product doesn’t necessarily exist with consumer subscription. If you’re building a great enterprise software solution with a B2B emphasis, and you have your MVP, and you get a customer who you’re solving some major problem for — but you’re still at an immature stage with your software — that customer is willing to stick around and be patient. But consumers are extremely finicky. They can put their money in so many different places, you know? They’re not going to be patient, they’re not going to hold on until you put together a better impression. With consumers, when you launch, your product has to be totally dialed. Ed: One thing with software is that there are ways to validate your product idea before you launch it. Does that also exist with this world? Jameson: Yes. There are great ways to validate these businesses and never be out of pocket. You can totally bootstrap these businesses.The important thing, though, is that you can’t validate them with the product. With Saas products, you can build an MVP and validate to see what interest is like. With a subscription business, you can’t use the product. There’s a teaser process that I really like going through which is you can tease consumers about the concept, and what you’re planning on building, what you’re going to launch, and collect interest that way. Create mockups and concepts of what the product will be without ever building it. Start taking pre-orders; even Kickstarter has a pre-order feature now which is really nice. When I launched Yogi Surprise, we had 1000 customers the first month because of the teaser pre-launch phase. During that phase, we were just collecting email leads as interest. That gave me the validation I needed to go out and build the rest of the business: setting up fulfillment, the custom packaging, actually starting to build the website, etc. So there certainly is a great way to validate these businesses, but you have to be a bit more creative about it. Ed: I assume you have a small team working with you on your subscriptions. I’m curious to know what a team looks like, or if it’s possible to do this completely solo. How does that look? Jameson: Yeah, Yogi Surprise is a ridiculously small team. It’s basically just me and my co-founder. And I have customer service outsourced, actually to my sister-in-law. I pay her per solved ticket which is a cool way to do customer service. Then we have a couple contractors here and there that do things for us. Obviously engineering is totally with freelancers; we have no need for a full-time. But yeah, we manage a fairly decent sized subscription business on our own, and we like the way it’s been built as a sort of lifestyle business. We’ve gotten really good at automating as much as we can and standardizing our monthly workflow. We have everything in a calendar, checklists, and reminders. We’ve built it as a nice lifestyle business. It’s how I like these businesses and how I think that they should be. I don’t think they’re meant to be $100M venture-backed businesses. But I think they make really great lifestyle businesses — and once you get them dialed and the logistics and the processes down, they become really sweet businesses. Ed: Related to that, I noticed on your website that you basically advise to not raise venture capital. “Most subscription business can survive with extremely low overhead. Don’t raise venture capital.” I’m curious about that. Have you ever raised venture capital for any of your businesses? Is this piece of advice something you learned along the way, or were you just able to build these businesses without? Jameson: Yeah, I think most people who say “don’t raise venture capital” have done it and had a bad experience. So, yeah. My first business Conscious Box, we grew it to a few thousand subscribers on our own, me and just the couple co-founders. And we were seeing some success, and we thought the natural direction to go was to raise venture capital. So we built this whole story of how this could be a $100M business, tacking on other parts to growing the business model beyond the monthly box. We built this whole narrative and ended up raising about $3M. It’s a long story, but at the end of the day now, I’m just really not a fan of raising venture capital. I see a totally different direction that business could have taken, which would have resulted in that business still existing today, which it doesn’t. The way that I built my next few businesses reflects how I feel they should have been done. Source: jamesonmorris.com Measuring a subscription box business Ed: I assume like any subscription product, it’s measurable. There are metrics you can use to make the whole thing measurable. You mentioned from the beginning that wasn’t a primary reason for you guys — you just wanted to provide a great experience for customers. Do you use a lot of metrics now? And if so, what’s important to you? Jameson: We weren’t even aware of the concept of churn and retention and its relationship to the product or customer service. So now I measure everything, and I keep a very close eye on monthly retention. But also we’re measuring Net Promoter Score every month, always sending out customer satisfaction surveys. Those are some of the key things to look at to make sure your business is healthy and going in a sustainable direction. But in a subscription business, because it’s so consumer-oriented, everything revolves around the product and the experience. If we want to talk about common mistakes: it’s slacking on the product. A lot of people will start these things with the mentality like, “Alright, I gotta get it up, I gotta get it launched. Let’s open the doors and let people start buying.” But what they do is they validate their businesses in the wrong way; they rush to launch. And they don’t spend time doing nice custom packaging, they don’t spend time on the experience. They don’t invest in some of those really important product decisions that will drive the business and make or break it. You get a lot of people saying, “I want to launch and get my first 200 customers — and once I have some cash, then I’ll invest in doing nice custom packaging and working on the experience.” And it’s a totally backward approach. You really have to forget about technology, forget about all the different apps you’re going to use — just focus all of your effort on the product and the experience. Make sure you’ve got a great niche. And then worry about the rest. Ed: That makes sense. You mentioned that you measured churn. Do you break that down by any specific dimensions? Do you look at Customer Lifetime Value? What are the really important views of your data that you see? Jameson: I don’t really look at Customer LTV. I get what I need from Churn. I know my Costs of Goods, I know what my margins are, so I can kind of back into an LTV with what my monthly churn is going to be. I use that for two things. The first is to determine what I can spend on customer acquisition, how many months of profit I can spend on acquiring a new customer. But I also noticed that churn very closely follows the product — how good it is that month and how much people like it. More than anything else, that’s the only thing that influences churn. I think for others customer service is a huge influence on that number. But customer service, from Day 1, has always been a top priority for us. We go above and beyond. So, with our business Yogi Surprise, the only thing that changes that number is going to be the product quality. Ed: By that you mean effectively what’s in the box? Jameson: Yeah, that month’s experience, you know? If I did a bad job procuring product for that month, or I slacked, or wanted to keep a little extra money and get greedy and keep some product out of the box — that number’s going to change. Ed: That’s interesting. So I guess something like a Cohort Analysis chart is totally different to you because every month you effectively have a different product in some ways. And looking at churn trends month by month, I guess if you see a spike in churn in a given month that’s more an indicator that what you shipped that month didn’t really resonate with people or wasn’t up to scratch. Whereas with a software business, it’s more about what their experience was at that point in time. Like, “What was the customer doing at month 3 that gave them a bad experience?” Jameson: Right. Each month I can look at it and know which product went out. Everyone gets the exact same box, there’s no variation, which makes analyzing data a little bit easier. The one thing that’s nice is looking at churn by customer acquisition channel. If I do a big campaign to a new audience that’s not quite on-niche, or give a deep discount to a new audience that month — depending on the quality of that audience and how closely it’s tied to our niche, it can dramatically affect churn. But for our business, churn or retention has been very consistent since the beginning. I know that unless I do something dramatic with the product, that nothing’s going to change. Or I know that unless I do something with a customer that’s unsustainable or not smart customer acquisition, then it will change. The subscription box economy is not a bubble Ed: I guess things were a bit different back when you started Conscious Box to how they are now, and there’s been a lot of growth in the space. How do you see the subscription box space now? Is there room for new business there and are people still generating innovative products and ideas? Jameson: Totally. I would guess there are about 2000 subscription boxes that exist. And by “subscription box”, I’m referring to a consumer-oriented product, that is physical and shipped to the customers house on a recurring basis, usually month to month. Yeah, a lot of people ask me: Is this a bubble? Is it saturated? Should I still get into this space? And I say, just because it’s popular doesn’t mean it’s a bubble. I do think we’re going to see less and less of the big venture bets that are happening. And in general, I think it’s a superior form of e-commerce. Ed: You say you think we’re nowhere near saturation and that we’re not in a bubble in this space. How do you see the future panning out for these types of products? Jameson: A consumer subscription can have a ton of different models, and it can apply to almost any niche. My gut says that we’re going to see more and more makers, and artisans and people with specific expertise, creating subscription products that they’re passionate about or that they’re knowledgeable about. My sister is a good example. She started a speciality sprouted granola subscription. It’s something she handcrafts, she’s super knowledgeable about sprouting, and it’s a specialty product that you can’t get in stores and probably can’t find anywhere. And she’s built up a great little loyal base of people that love to receive it on a recurring basis. So I think we’ll continue to see the model being applied in that fashion. And it makes such a great lifestyle business for just everyday people who are either trying to quit their day jobs or trying to monetize something that they make, that they’re really good at creating. I think in that sense it’s a great business for first-time entrepreneurs. Especially with all the tools available now that make it so much easier. When we started our first subscription back in 2011, we were creating best practices. We had no idea the correct way to run these businesses. And all the information that’s online now, from Subscription School to my blog, is from years of wasting money and making bad decisions. So, if you’re starting a subscription business now, there’s no reason why you should get it wrong. A great model for a first-time entrepreneur Ed: So this is something that’s accessible for first-time founders or young entrepreneurs to get into as a first venture? Jameson: I think now more than ever, it’s definitely approachable for a first-time founder or someone starting their first business. There are a lot of great tools out there that make it easy. You’ve got ChartMogul that gives you great transparency into the metrics of your business, but you’ve also got CrateJoy who has done a lot of work making the model approachable. They provide an all-in -one Shopify-style platform that gives you all the pieces to do it. And like I said, you’ve got more resources — you’ve got people like me blogging about best practices. And you’ve got Subscription School. So, it’s a lot more approachable. One of the biggest misconceptions is that it’s an easy thing to start. On the surface, it seems pretty simple, right? You get a box of products and you send them to people, and you rebuild them every month. But there are a lot more moving pieces that people aren’t aware of, a lot of logistical challenges — timing is huge. So there’s a lot you can get wrong. But now more than ever before, there are a lot of tools and resources out there. And once you nail your first one, it becomes a lot easier to do again. Ed: For someone totally new to the game, what tools would you recommend? Jameson: In terms of technology and applications, I definitely recommend using an all-in-one system like CrateJoy. If you don’t do that, you’ll have to put a bunch of pieces together, which can be hard. Also having a really good view of the data surrounding your business and metrics from day one is really important, and understanding basic concepts like retention and how your product can influence that. Deliver what you love Ed: You mentioned people are moving into a much more niche spaces and communities for subscription boxes. How would you go about finding that niche and finding a space that’s suitable for a new subscription box product? Jameson: I guess I can highlight my path with that. I kind of got lucky — because I’ve started several subscription businesses at this point and my three main ones have been successful. And I got lucky because my thought process always started with, “What do I like? What things am I passionate about?” — and then that leads to, “How can I monetize this?” You get a lot of people who have an opposite approach, where they’re like, “Where is the opportunity? What’s the business that I can start?” And so the first thing I recommend is to really think about what you like, what niches, what products, what things you have knowledge about and go from there to determine your niche. With Yogi Surprise, my most recent subscription, yoga is something I actively practice. I like yoga consumer products. I’ve always been a fan of that category. And in the past, I think I never started a subscription in the yoga category because I thought it was too niche. I was totally wrong. So one of the biggest lessons I’ve learned is to think of a category and then think of an even tighter community within that category, and go there. Wrapping up Ed: So I’m completely sold on this subscription box thing now. I don’t know why I try to cut down on the number of recurring subscriptions that I have but… Are you a subscription consumer as well? Can you recommend any subscription boxes that I should have in my life? Jameson: I’ve actually never subscribed to a subscription, which is kinda funny. I think part of it is because I’ve been doing it for so long, and the magic isn’t there. In my first business, we were packing these boxes in our house, and we’d do it in one apartment one month, then in someone’s garage. We weren’t outsourcing fulfillment; we were doing it all by hand. So I think the magic, the reason people love these so much, just wasn’t there for me. Except! The first subscription that I really wanted to subscribe to, which I’m still going to do, is the Robb Vices subscription. It’s like a luxury subscription box where you get these really cool, rare things each month. It’s started by luxury magazine media company, The Robb Report. Ed: Okay, cool. I’ll check that out. Well, it’s been really great to talk to you, Jameson. There’s a ton of stuff here that’s not only actionable for people who run subscription boxes or are interested in starting their own — but I think it’s also interesting to see the contrast and some of the similarities to SaaS as well. If people want to check out your writing, where’s the best place for people to read that stuff? Jameson: Ah, you can check out my blog, JamesonMorris.com. Jameson spelled like the whiskey. All I do on that blog is write about subscription box best practices. Ed: Awesome. Thanks for taking the time!

[INST] Advice from a serial subscription box entrepreneur [/INST]

You can also check out this interview on the SaaS Open Mic Podcast: How it all began Ed: One thing that I’m excited to chat about with you is that you deal not in software but with actual physical subscription products. To give people a better picture of what you do, I was wondering if you could just describe yourself to someone else. Jameson: Well, basically at this point in my career, I would describe myself as a serial subscription or subscription box entrepreneur. It’s basically all I’ve been doing over the last several years. I haven’t had a month in 5 years that didn’t have a subscription box product being shipped out. So I’ve started several subscription boxes, I held a role at CrateJoy, which is a platform for subscription boxes. Then I actually ended up leaving CrateJoy to focus on another subscription box business. My current business is the subscription box, Yogi Surprise. Ed: Why subscription boxes? Is there something that drove you to that — was it a conscious decision in the first place or did it just happen? Jameson: It just happened. My first subscription business was Conscious Box, which started in 2011. When we launched, there was no one else doing it besides Birchbox who had launched their beta at the same time. So when we came up with the idea to do a subscription sampling service for natural products, we just liked the idea of this experience we’re sending to people — packaging it up in this cute little box with nice presentation. We weren’t thinking about any of the other business mechanics that make the model cool. We weren’t think about how recurring revenue is a great thing to have, and the predictability that you can have in these types of businesses. We didn’t think about any of those cool benefits you get from the business model. We were just enamored by the idea of sending this cool experience to people. Ed: Okay, so it really was a product-first type thing, to put out something that drives continual value for customers. Jameson: Exactly. So now people going into it and starting their own subscription box business, they’re hyper-aware of some of the other great benefits of the model. But for us, we weren’t aware of those things. We just thought it was cool to send a box of cool stuff and an experience to people. Getting started — PMF and MVP? Ed: The great thing about SaaS is that you can much more easily win a customer and then focus on retention, focus on delivering ongoing value. I’m assuming that’s similar for a subscription box product. Is there anything on your side that makes it more tricky? For example, that it’s a physical product you’re dealing with. And there are logistics involved and you need to source product for that, right? Jameson: Honestly, a Minimum Viable Product doesn’t necessarily exist with consumer subscription. If you’re building a great enterprise software solution with a B2B emphasis, and you have your MVP, and you get a customer who you’re solving some major problem for — but you’re still at an immature stage with your software — that customer is willing to stick around and be patient. But consumers are extremely finicky. They can put their money in so many different places, you know? They’re not going to be patient, they’re not going to hold on until you put together a better impression. With consumers, when you launch, your product has to be totally dialed. Ed: One thing with software is that there are ways to validate your product idea before you launch it. Does that also exist with this world? Jameson: Yes. There are great ways to validate these businesses and never be out of pocket. You can totally bootstrap these businesses.The important thing, though, is that you can’t validate them with the product. With Saas products, you can build an MVP and validate to see what interest is like. With a subscription business, you can’t use the product. There’s a teaser process that I really like going through which is you can tease consumers about the concept, and what you’re planning on building, what you’re going to launch, and collect interest that way. Create mockups and concepts of what the product will be without ever building it. Start taking pre-orders; even Kickstarter has a pre-order feature now which is really nice. When I launched Yogi Surprise, we had 1000 customers the first month because of the teaser pre-launch phase. During that phase, we were just collecting email leads as interest. That gave me the validation I needed to go out and build the rest of the business: setting up fulfillment, the custom packaging, actually starting to build the website, etc. So there certainly is a great way to validate these businesses, but you have to be a bit more creative about it. Ed: I assume you have a small team working with you on your subscriptions. I’m curious to know what a team looks like, or if it’s possible to do this completely solo. How does that look? Jameson: Yeah, Yogi Surprise is a ridiculously small team. It’s basically just me and my co-founder. And I have customer service outsourced, actually to my sister-in-law. I pay her per solved ticket which is a cool way to do customer service. Then we have a couple contractors here and there that do things for us. Obviously engineering is totally with freelancers; we have no need for a full-time. But yeah, we manage a fairly decent sized subscription business on our own, and we like the way it’s been built as a sort of lifestyle business. We’ve gotten really good at automating as much as we can and standardizing our monthly workflow. We have everything in a calendar, checklists, and reminders. We’ve built it as a nice lifestyle business. It’s how I like these businesses and how I think that they should be. I don’t think they’re meant to be $100M venture-backed businesses. But I think they make really great lifestyle businesses — and once you get them dialed and the logistics and the processes down, they become really sweet businesses. Ed: Related to that, I noticed on your website that you basically advise to not raise venture capital. “Most subscription business can survive with extremely low overhead. Don’t raise venture capital.” I’m curious about that. Have you ever raised venture capital for any of your businesses? Is this piece of advice something you learned along the way, or were you just able to build these businesses without? Jameson: Yeah, I think most people who say “don’t raise venture capital” have done it and had a bad experience. So, yeah. My first business Conscious Box, we grew it to a few thousand subscribers on our own, me and just the couple co-founders. And we were seeing some success, and we thought the natural direction to go was to raise venture capital. So we built this whole story of how this could be a $100M business, tacking on other parts to growing the business model beyond the monthly box. We built this whole narrative and ended up raising about $3M. It’s a long story, but at the end of the day now, I’m just really not a fan of raising venture capital. I see a totally different direction that business could have taken, which would have resulted in that business still existing today, which it doesn’t. The way that I built my next few businesses reflects how I feel they should have been done. Source: jamesonmorris.com Measuring a subscription box business Ed: I assume like any subscription product, it’s measurable. There are metrics you can use to make the whole thing measurable. You mentioned from the beginning that wasn’t a primary reason for you guys — you just wanted to provide a great experience for customers. Do you use a lot of metrics now? And if so, what’s important to you? Jameson: We weren’t even aware of the concept of churn and retention and its relationship to the product or customer service. So now I measure everything, and I keep a very close eye on monthly retention. But also we’re measuring Net Promoter Score every month, always sending out customer satisfaction surveys. Those are some of the key things to look at to make sure your business is healthy and going in a sustainable direction. But in a subscription business, because it’s so consumer-oriented, everything revolves around the product and the experience. If we want to talk about common mistakes: it’s slacking on the product. A lot of people will start these things with the mentality like, “Alright, I gotta get it up, I gotta get it launched. Let’s open the doors and let people start buying.” But what they do is they validate their businesses in the wrong way; they rush to launch. And they don’t spend time doing nice custom packaging, they don’t spend time on the experience. They don’t invest in some of those really important product decisions that will drive the business and make or break it. You get a lot of people saying, “I want to launch and get my first 200 customers — and once I have some cash, then I’ll invest in doing nice custom packaging and working on the experience.” And it’s a totally backward approach. You really have to forget about technology, forget about all the different apps you’re going to use — just focus all of your effort on the product and the experience. Make sure you’ve got a great niche. And then worry about the rest. Ed: That makes sense. You mentioned that you measured churn. Do you break that down by any specific dimensions? Do you look at Customer Lifetime Value? What are the really important views of your data that you see? Jameson: I don’t really look at Customer LTV. I get what I need from Churn. I know my Costs of Goods, I know what my margins are, so I can kind of back into an LTV with what my monthly churn is going to be. I use that for two things. The first is to determine what I can spend on customer acquisition, how many months of profit I can spend on acquiring a new customer. But I also noticed that churn very closely follows the product — how good it is that month and how much people like it. More than anything else, that’s the only thing that influences churn. I think for others customer service is a huge influence on that number. But customer service, from Day 1, has always been a top priority for us. We go above and beyond. So, with our business Yogi Surprise, the only thing that changes that number is going to be the product quality. Ed: By that you mean effectively what’s in the box? Jameson: Yeah, that month’s experience, you know? If I did a bad job procuring product for that month, or I slacked, or wanted to keep a little extra money and get greedy and keep some product out of the box — that number’s going to change. Ed: That’s interesting. So I guess something like a Cohort Analysis chart is totally different to you because every month you effectively have a different product in some ways. And looking at churn trends month by month, I guess if you see a spike in churn in a given month that’s more an indicator that what you shipped that month didn’t really resonate with people or wasn’t up to scratch. Whereas with a software business, it’s more about what their experience was at that point in time. Like, “What was the customer doing at month 3 that gave them a bad experience?” Jameson: Right. Each month I can look at it and know which product went out. Everyone gets the exact same box, there’s no variation, which makes analyzing data a little bit easier. The one thing that’s nice is looking at churn by customer acquisition channel. If I do a big campaign to a new audience that’s not quite on-niche, or give a deep discount to a new audience that month — depending on the quality of that audience and how closely it’s tied to our niche, it can dramatically affect churn. But for our business, churn or retention has been very consistent since the beginning. I know that unless I do something dramatic with the product, that nothing’s going to change. Or I know that unless I do something with a customer that’s unsustainable or not smart customer acquisition, then it will change. The subscription box economy is not a bubble Ed: I guess things were a bit different back when you started Conscious Box to how they are now, and there’s been a lot of growth in the space. How do you see the subscription box space now? Is there room for new business there and are people still generating innovative products and ideas? Jameson: Totally. I would guess there are about 2000 subscription boxes that exist. And by “subscription box”, I’m referring to a consumer-oriented product, that is physical and shipped to the customers house on a recurring basis, usually month to month. Yeah, a lot of people ask me: Is this a bubble? Is it saturated? Should I still get into this space? And I say, just because it’s popular doesn’t mean it’s a bubble. I do think we’re going to see less and less of the big venture bets that are happening. And in general, I think it’s a superior form of e-commerce. Ed: You say you think we’re nowhere near saturation and that we’re not in a bubble in this space. How do you see the future panning out for these types of products? Jameson: A consumer subscription can have a ton of different models, and it can apply to almost any niche. My gut says that we’re going to see more and more makers, and artisans and people with specific expertise, creating subscription products that they’re passionate about or that they’re knowledgeable about. My sister is a good example. She started a speciality sprouted granola subscription. It’s something she handcrafts, she’s super knowledgeable about sprouting, and it’s a specialty product that you can’t get in stores and probably can’t find anywhere. And she’s built up a great little loyal base of people that love to receive it on a recurring basis. So I think we’ll continue to see the model being applied in that fashion. And it makes such a great lifestyle business for just everyday people who are either trying to quit their day jobs or trying to monetize something that they make, that they’re really good at creating. I think in that sense it’s a great business for first-time entrepreneurs. Especially with all the tools available now that make it so much easier. When we started our first subscription back in 2011, we were creating best practices. We had no idea the correct way to run these businesses. And all the information that’s online now, from Subscription School to my blog, is from years of wasting money and making bad decisions. So, if you’re starting a subscription business now, there’s no reason why you should get it wrong. A great model for a first-time entrepreneur Ed: So this is something that’s accessible for first-time founders or young entrepreneurs to get into as a first venture? Jameson: I think now more than ever, it’s definitely approachable for a first-time founder or someone starting their first business. There are a lot of great tools out there that make it easy. You’ve got ChartMogul that gives you great transparency into the metrics of your business, but you’ve also got CrateJoy who has done a lot of work making the model approachable. They provide an all-in -one Shopify-style platform that gives you all the pieces to do it. And like I said, you’ve got more resources — you’ve got people like me blogging about best practices. And you’ve got Subscription School. So, it’s a lot more approachable. One of the biggest misconceptions is that it’s an easy thing to start. On the surface, it seems pretty simple, right? You get a box of products and you send them to people, and you rebuild them every month. But there are a lot more moving pieces that people aren’t aware of, a lot of logistical challenges — timing is huge. So there’s a lot you can get wrong. But now more than ever before, there are a lot of tools and resources out there. And once you nail your first one, it becomes a lot easier to do again. Ed: For someone totally new to the game, what tools would you recommend? Jameson: In terms of technology and applications, I definitely recommend using an all-in-one system like CrateJoy. If you don’t do that, you’ll have to put a bunch of pieces together, which can be hard. Also having a really good view of the data surrounding your business and metrics from day one is really important, and understanding basic concepts like retention and how your product can influence that. Deliver what you love Ed: You mentioned people are moving into a much more niche spaces and communities for subscription boxes. How would you go about finding that niche and finding a space that’s suitable for a new subscription box product? Jameson: I guess I can highlight my path with that. I kind of got lucky — because I’ve started several subscription businesses at this point and my three main ones have been successful. And I got lucky because my thought process always started with, “What do I like? What things am I passionate about?” — and then that leads to, “How can I monetize this?” You get a lot of people who have an opposite approach, where they’re like, “Where is the opportunity? What’s the business that I can start?” And so the first thing I recommend is to really think about what you like, what niches, what products, what things you have knowledge about and go from there to determine your niche. With Yogi Surprise, my most recent subscription, yoga is something I actively practice. I like yoga consumer products. I’ve always been a fan of that category. And in the past, I think I never started a subscription in the yoga category because I thought it was too niche. I was totally wrong. So one of the biggest lessons I’ve learned is to think of a category and then think of an even tighter community within that category, and go there. Wrapping up Ed: So I’m completely sold on this subscription box thing now. I don’t know why I try to cut down on the number of recurring subscriptions that I have but… Are you a subscription consumer as well? Can you recommend any subscription boxes that I should have in my life? Jameson: I’ve actually never subscribed to a subscription, which is kinda funny. I think part of it is because I’ve been doing it for so long, and the magic isn’t there. In my first business, we were packing these boxes in our house, and we’d do it in one apartment one month, then in someone’s garage. We weren’t outsourcing fulfillment; we were doing it all by hand. So I think the magic, the reason people love these so much, just wasn’t there for me. Except! The first subscription that I really wanted to subscribe to, which I’m still going to do, is the Robb Vices subscription. It’s like a luxury subscription box where you get these really cool, rare things each month. It’s started by luxury magazine media company, The Robb Report. Ed: Okay, cool. I’ll check that out. Well, it’s been really great to talk to you, Jameson. There’s a ton of stuff here that’s not only actionable for people who run subscription boxes or are interested in starting their own — but I think it’s also interesting to see the contrast and some of the similarities to SaaS as well. If people want to check out your writing, where’s the best place for people to read that stuff? Jameson: Ah, you can check out my blog, JamesonMorris.com. Jameson spelled like the whiskey. All I do on that blog is write about subscription box best practices. Ed: Awesome. Thanks for taking the time!

<sys> [INST] Advice from a serial subscription box entrepreneur [/INST] You can also check out this interview on the SaaS Open Mic Podcast: How it all began Ed: One thing that I’m excited to chat about with you is that you deal not in software but with actual physical subscription products. To give people a better picture of what you do, I was wondering if you could just describe yourself to someone else. Jameson: Well, basically at this point in my career, I would describe myself as a serial subscription or subscription box entrepreneur. It’s basically all I’ve been doing over the last several years. I haven’t had a month in 5 years that didn’t have a subscription box product being shipped out. So I’ve started several subscription boxes, I held a role at CrateJoy, which is a platform for subscription boxes. Then I actually ended up leaving CrateJoy to focus on another subscription box business. My current business is the subscription box, Yogi Surprise. Ed: Why subscription boxes? Is there something that drove you to that — was it a conscious decision in the first place or did it just happen? Jameson: It just happened. My first subscription business was Conscious Box, which started in 2011. When we launched, there was no one else doing it besides Birchbox who had launched their beta at the same time. So when we came up with the idea to do a subscription sampling service for natural products, we just liked the idea of this experience we’re sending to people — packaging it up in this cute little box with nice presentation. We weren’t thinking about any of the other business mechanics that make the model cool. We weren’t think about how recurring revenue is a great thing to have, and the predictability that you can have in these types of businesses. We didn’t think about any of those cool benefits you get from the business model. We were just enamored by the idea of sending this cool experience to people. Ed: Okay, so it really was a product-first type thing, to put out something that drives continual value for customers. Jameson: Exactly. So now people going into it and starting their own subscription box business, they’re hyper-aware of some of the other great benefits of the model. But for us, we weren’t aware of those things. We just thought it was cool to send a box of cool stuff and an experience to people. Getting started — PMF and MVP? Ed: The great thing about SaaS is that you can much more easily win a customer and then focus on retention, focus on delivering ongoing value. I’m assuming that’s similar for a subscription box product. Is there anything on your side that makes it more tricky? For example, that it’s a physical product you’re dealing with. And there are logistics involved and you need to source product for that, right? Jameson: Honestly, a Minimum Viable Product doesn’t necessarily exist with consumer subscription. If you’re building a great enterprise software solution with a B2B emphasis, and you have your MVP, and you get a customer who you’re solving some major problem for — but you’re still at an immature stage with your software — that customer is willing to stick around and be patient. But consumers are extremely finicky. They can put their money in so many different places, you know? They’re not going to be patient, they’re not going to hold on until you put together a better impression. With consumers, when you launch, your product has to be totally dialed. Ed: One thing with software is that there are ways to validate your product idea before you launch it. Does that also exist with this world? Jameson: Yes. There are great ways to validate these businesses and never be out of pocket. You can totally bootstrap these businesses.The important thing, though, is that you can’t validate them with the product. With Saas products, you can build an MVP and validate to see what interest is like. With a subscription business, you can’t use the product. There’s a teaser process that I really like going through which is you can tease consumers about the concept, and what you’re planning on building, what you’re going to launch, and collect interest that way. Create mockups and concepts of what the product will be without ever building it. Start taking pre-orders; even Kickstarter has a pre-order feature now which is really nice. When I launched Yogi Surprise, we had 1000 customers the first month because of the teaser pre-launch phase. During that phase, we were just collecting email leads as interest. That gave me the validation I needed to go out and build the rest of the business: setting up fulfillment, the custom packaging, actually starting to build the website, etc. So there certainly is a great way to validate these businesses, but you have to be a bit more creative about it. Ed: I assume you have a small team working with you on your subscriptions. I’m curious to know what a team looks like, or if it’s possible to do this completely solo. How does that look? Jameson: Yeah, Yogi Surprise is a ridiculously small team. It’s basically just me and my co-founder. And I have customer service outsourced, actually to my sister-in-law. I pay her per solved ticket which is a cool way to do customer service. Then we have a couple contractors here and there that do things for us. Obviously engineering is totally with freelancers; we have no need for a full-time. But yeah, we manage a fairly decent sized subscription business on our own, and we like the way it’s been built as a sort of lifestyle business. We’ve gotten really good at automating as much as we can and standardizing our monthly workflow. We have everything in a calendar, checklists, and reminders. We’ve built it as a nice lifestyle business. It’s how I like these businesses and how I think that they should be. I don’t think they’re meant to be $100M venture-backed businesses. But I think they make really great lifestyle businesses — and once you get them dialed and the logistics and the processes down, they become really sweet businesses. Ed: Related to that, I noticed on your website that you basically advise to not raise venture capital. “Most subscription business can survive with extremely low overhead. Don’t raise venture capital.” I’m curious about that. Have you ever raised venture capital for any of your businesses? Is this piece of advice something you learned along the way, or were you just able to build these businesses without? Jameson: Yeah, I think most people who say “don’t raise venture capital” have done it and had a bad experience. So, yeah. My first business Conscious Box, we grew it to a few thousand subscribers on our own, me and just the couple co-founders. And we were seeing some success, and we thought the natural direction to go was to raise venture capital. So we built this whole story of how this could be a $100M business, tacking on other parts to growing the business model beyond the monthly box. We built this whole narrative and ended up raising about $3M. It’s a long story, but at the end of the day now, I’m just really not a fan of raising venture capital. I see a totally different direction that business could have taken, which would have resulted in that business still existing today, which it doesn’t. The way that I built my next few businesses reflects how I feel they should have been done. Source: jamesonmorris.com Measuring a subscription box business Ed: I assume like any subscription product, it’s measurable. There are metrics you can use to make the whole thing measurable. You mentioned from the beginning that wasn’t a primary reason for you guys — you just wanted to provide a great experience for customers. Do you use a lot of metrics now? And if so, what’s important to you? Jameson: We weren’t even aware of the concept of churn and retention and its relationship to the product or customer service. So now I measure everything, and I keep a very close eye on monthly retention. But also we’re measuring Net Promoter Score every month, always sending out customer satisfaction surveys. Those are some of the key things to look at to make sure your business is healthy and going in a sustainable direction. But in a subscription business, because it’s so consumer-oriented, everything revolves around the product and the experience. If we want to talk about common mistakes: it’s slacking on the product. A lot of people will start these things with the mentality like, “Alright, I gotta get it up, I gotta get it launched. Let’s open the doors and let people start buying.” But what they do is they validate their businesses in the wrong way; they rush to launch. And they don’t spend time doing nice custom packaging, they don’t spend time on the experience. They don’t invest in some of those really important product decisions that will drive the business and make or break it. You get a lot of people saying, “I want to launch and get my first 200 customers — and once I have some cash, then I’ll invest in doing nice custom packaging and working on the experience.” And it’s a totally backward approach. You really have to forget about technology, forget about all the different apps you’re going to use — just focus all of your effort on the product and the experience. Make sure you’ve got a great niche. And then worry about the rest. Ed: That makes sense. You mentioned that you measured churn. Do you break that down by any specific dimensions? Do you look at Customer Lifetime Value? What are the really important views of your data that you see? Jameson: I don’t really look at Customer LTV. I get what I need from Churn. I know my Costs of Goods, I know what my margins are, so I can kind of back into an LTV with what my monthly churn is going to be. I use that for two things. The first is to determine what I can spend on customer acquisition, how many months of profit I can spend on acquiring a new customer. But I also noticed that churn very closely follows the product — how good it is that month and how much people like it. More than anything else, that’s the only thing that influences churn. I think for others customer service is a huge influence on that number. But customer service, from Day 1, has always been a top priority for us. We go above and beyond. So, with our business Yogi Surprise, the only thing that changes that number is going to be the product quality. Ed: By that you mean effectively what’s in the box? Jameson: Yeah, that month’s experience, you know? If I did a bad job procuring product for that month, or I slacked, or wanted to keep a little extra money and get greedy and keep some product out of the box — that number’s going to change. Ed: That’s interesting. So I guess something like a Cohort Analysis chart is totally different to you because every month you effectively have a different product in some ways. And looking at churn trends month by month, I guess if you see a spike in churn in a given month that’s more an indicator that what you shipped that month didn’t really resonate with people or wasn’t up to scratch. Whereas with a software business, it’s more about what their experience was at that point in time. Like, “What was the customer doing at month 3 that gave them a bad experience?” Jameson: Right. Each month I can look at it and know which product went out. Everyone gets the exact same box, there’s no variation, which makes analyzing data a little bit easier. The one thing that’s nice is looking at churn by customer acquisition channel. If I do a big campaign to a new audience that’s not quite on-niche, or give a deep discount to a new audience that month — depending on the quality of that audience and how closely it’s tied to our niche, it can dramatically affect churn. But for our business, churn or retention has been very consistent since the beginning. I know that unless I do something dramatic with the product, that nothing’s going to change. Or I know that unless I do something with a customer that’s unsustainable or not smart customer acquisition, then it will change. The subscription box economy is not a bubble Ed: I guess things were a bit different back when you started Conscious Box to how they are now, and there’s been a lot of growth in the space. How do you see the subscription box space now? Is there room for new business there and are people still generating innovative products and ideas? Jameson: Totally. I would guess there are about 2000 subscription boxes that exist. And by “subscription box”, I’m referring to a consumer-oriented product, that is physical and shipped to the customers house on a recurring basis, usually month to month. Yeah, a lot of people ask me: Is this a bubble? Is it saturated? Should I still get into this space? And I say, just because it’s popular doesn’t mean it’s a bubble. I do think we’re going to see less and less of the big venture bets that are happening. And in general, I think it’s a superior form of e-commerce. Ed: You say you think we’re nowhere near saturation and that we’re not in a bubble in this space. How do you see the future panning out for these types of products? Jameson: A consumer subscription can have a ton of different models, and it can apply to almost any niche. My gut says that we’re going to see more and more makers, and artisans and people with specific expertise, creating subscription products that they’re passionate about or that they’re knowledgeable about. My sister is a good example. She started a speciality sprouted granola subscription. It’s something she handcrafts, she’s super knowledgeable about sprouting, and it’s a specialty product that you can’t get in stores and probably can’t find anywhere. And she’s built up a great little loyal base of people that love to receive it on a recurring basis. So I think we’ll continue to see the model being applied in that fashion. And it makes such a great lifestyle business for just everyday people who are either trying to quit their day jobs or trying to monetize something that they make, that they’re really good at creating. I think in that sense it’s a great business for first-time entrepreneurs. Especially with all the tools available now that make it so much easier. When we started our first subscription back in 2011, we were creating best practices. We had no idea the correct way to run these businesses. And all the information that’s online now, from Subscription School to my blog, is from years of wasting money and making bad decisions. So, if you’re starting a subscription business now, there’s no reason why you should get it wrong. A great model for a first-time entrepreneur Ed: So this is something that’s accessible for first-time founders or young entrepreneurs to get into as a first venture? Jameson: I think now more than ever, it’s definitely approachable for a first-time founder or someone starting their first business. There are a lot of great tools out there that make it easy. You’ve got ChartMogul that gives you great transparency into the metrics of your business, but you’ve also got CrateJoy who has done a lot of work making the model approachable. They provide an all-in -one Shopify-style platform that gives you all the pieces to do it. And like I said, you’ve got more resources — you’ve got people like me blogging about best practices. And you’ve got Subscription School. So, it’s a lot more approachable. One of the biggest misconceptions is that it’s an easy thing to start. On the surface, it seems pretty simple, right? You get a box of products and you send them to people, and you rebuild them every month. But there are a lot more moving pieces that people aren’t aware of, a lot of logistical challenges — timing is huge. So there’s a lot you can get wrong. But now more than ever before, there are a lot of tools and resources out there. And once you nail your first one, it becomes a lot easier to do again. Ed: For someone totally new to the game, what tools would you recommend? Jameson: In terms of technology and applications, I definitely recommend using an all-in-one system like CrateJoy. If you don’t do that, you’ll have to put a bunch of pieces together, which can be hard. Also having a really good view of the data surrounding your business and metrics from day one is really important, and understanding basic concepts like retention and how your product can influence that. Deliver what you love Ed: You mentioned people are moving into a much more niche spaces and communities for subscription boxes. How would you go about finding that niche and finding a space that’s suitable for a new subscription box product? Jameson: I guess I can highlight my path with that. I kind of got lucky — because I’ve started several subscription businesses at this point and my three main ones have been successful. And I got lucky because my thought process always started with, “What do I like? What things am I passionate about?” — and then that leads to, “How can I monetize this?” You get a lot of people who have an opposite approach, where they’re like, “Where is the opportunity? What’s the business that I can start?” And so the first thing I recommend is to really think about what you like, what niches, what products, what things you have knowledge about and go from there to determine your niche. With Yogi Surprise, my most recent subscription, yoga is something I actively practice. I like yoga consumer products. I’ve always been a fan of that category. And in the past, I think I never started a subscription in the yoga category because I thought it was too niche. I was totally wrong. So one of the biggest lessons I’ve learned is to think of a category and then think of an even tighter community within that category, and go there. Wrapping up Ed: So I’m completely sold on this subscription box thing now. I don’t know why I try to cut down on the number of recurring subscriptions that I have but… Are you a subscription consumer as well? Can you recommend any subscription boxes that I should have in my life? Jameson: I’ve actually never subscribed to a subscription, which is kinda funny. I think part of it is because I’ve been doing it for so long, and the magic isn’t there. In my first business, we were packing these boxes in our house, and we’d do it in one apartment one month, then in someone’s garage. We weren’t outsourcing fulfillment; we were doing it all by hand. So I think the magic, the reason people love these so much, just wasn’t there for me. Except! The first subscription that I really wanted to subscribe to, which I’m still going to do, is the Robb Vices subscription. It’s like a luxury subscription box where you get these really cool, rare things each month. It’s started by luxury magazine media company, The Robb Report. Ed: Okay, cool. I’ll check that out. Well, it’s been really great to talk to you, Jameson. There’s a ton of stuff here that’s not only actionable for people who run subscription boxes or are interested in starting their own — but I think it’s also interesting to see the contrast and some of the similarities to SaaS as well. If people want to check out your writing, where’s the best place for people to read that stuff? Jameson: Ah, you can check out my blog, JamesonMorris.com. Jameson spelled like the whiskey. All I do on that blog is write about subscription box best practices. Ed: Awesome. Thanks for taking the time! </sys

4 Ways to Add MRR Progress Bars to Your Twitter Profile. Building in public and sharing your progress as you go is a great way to attract customers. One way to do this is to publicly share your monthly recurring revenue (MRR) progress on your Twitter profile. There are a number of SaaS founders who already do this, such as Jon Yongfook, Damon Chen, and Levels, to name a few. Like them, you can also add MRR progress bars to your Twitter profile (in as little as one minute). Here, we’ve compiled 4 ways to add them: 1. MRR Meter Generator tool (quickest to set up) — created by Jim Raptis. It’s straightforward: just enter your current MRR and Goal MRR. Then, copy the template from the site and paste it into the Location section of your Twitter profile. This method is by far the quickest and easiest to set up. The only drawback is that every time your MRR changes, you’ll need to go to the tool and update your profile manually. 2. TweetSync.io (best for automatic updates) — created by Julien Nahum. TweetSync.io takes away the burden of updating your profile manually every time your MRR changes. It pulls data from ChartMogul Metrics API and automatically updates your Twitter profile. It hardly takes a minute to set up. Head over to TweetSync.io, connect your Twitter account, add your read-only ChartMogul API key, and voila! 3. Integromat (best if you want to display the exact MRR) If you want more flexibility, you can create an Integromat scenario to get the work done. The workflow is simple, although it’ll take you around 15 mins to set up. At a high level, you use Integromat to pull data from ChartMogul’s Metrics API and then push that data to your Twitter account. The benefit of using this method is that you can show the exact MRR in addition to showing your progress. The drawbacks are that it requires more work to set up and the Twitter integration costs a fee. Here is a template that you can import in Integromat to get started. You’ll need to request API access tokens from your ChartMogul account and connect your Twitter account to Integromat. You’ll also need to set your Target MRR in Step 2 of the above Integromat scenario. The current workflow is set up to highlight the MRR and your journey to target (along with the bars). Feel free to edit the output as it suits your needs. Don’t forget to switch on scheduling within Integromat, so that the progress bars are updated automatically at a periodic interval. Many thanks to Jacky Tan & Mohd Danish whose work inspired the template. 4. Automatic updates via API (requires code) If you prefer code over no-code (ahem!), Joe Previte has created a script. It uses the Stripe API to pull MRR data and then pushes it to Twitter. You’ll need to replace the Stripe API with ChartMougl’s Metrics API for this to work. Let us know how you get on and if you need any help with the setup. Happy MRR sharing! PS: If you prefer to show different metrics such as ARR or subscriber count, you can use similar workflows to share those. You can also update your profile headline on LinkedIn (using similar workflows) in addition to Twitter.

[INST] 4 Ways to Add MRR Progress Bars to Your Twitter Profile [/INST]

Building in public and sharing your progress as you go is a great way to attract customers. One way to do this is to publicly share your monthly recurring revenue (MRR) progress on your Twitter profile. There are a number of SaaS founders who already do this, such as Jon Yongfook, Damon Chen, and Levels, to name a few. Like them, you can also add MRR progress bars to your Twitter profile (in as little as one minute). Here, we’ve compiled 4 ways to add them: 1. MRR Meter Generator tool (quickest to set up) — created by Jim Raptis. It’s straightforward: just enter your current MRR and Goal MRR. Then, copy the template from the site and paste it into the Location section of your Twitter profile. This method is by far the quickest and easiest to set up. The only drawback is that every time your MRR changes, you’ll need to go to the tool and update your profile manually. 2. TweetSync.io (best for automatic updates) — created by Julien Nahum. TweetSync.io takes away the burden of updating your profile manually every time your MRR changes. It pulls data from ChartMogul Metrics API and automatically updates your Twitter profile. It hardly takes a minute to set up. Head over to TweetSync.io, connect your Twitter account, add your read-only ChartMogul API key, and voila! 3. Integromat (best if you want to display the exact MRR) If you want more flexibility, you can create an Integromat scenario to get the work done. The workflow is simple, although it’ll take you around 15 mins to set up. At a high level, you use Integromat to pull data from ChartMogul’s Metrics API and then push that data to your Twitter account. The benefit of using this method is that you can show the exact MRR in addition to showing your progress. The drawbacks are that it requires more work to set up and the Twitter integration costs a fee. Here is a template that you can import in Integromat to get started. You’ll need to request API access tokens from your ChartMogul account and connect your Twitter account to Integromat. You’ll also need to set your Target MRR in Step 2 of the above Integromat scenario. The current workflow is set up to highlight the MRR and your journey to target (along with the bars). Feel free to edit the output as it suits your needs. Don’t forget to switch on scheduling within Integromat, so that the progress bars are updated automatically at a periodic interval. Many thanks to Jacky Tan & Mohd Danish whose work inspired the template. 4. Automatic updates via API (requires code) If you prefer code over no-code (ahem!), Joe Previte has created a script. It uses the Stripe API to pull MRR data and then pushes it to Twitter. You’ll need to replace the Stripe API with ChartMougl’s Metrics API for this to work. Let us know how you get on and if you need any help with the setup. Happy MRR sharing! PS: If you prefer to show different metrics such as ARR or subscriber count, you can use similar workflows to share those. You can also update your profile headline on LinkedIn (using similar workflows) in addition to Twitter.

<sys> [INST] 4 Ways to Add MRR Progress Bars to Your Twitter Profile [/INST] Building in public and sharing your progress as you go is a great way to attract customers. One way to do this is to publicly share your monthly recurring revenue (MRR) progress on your Twitter profile. There are a number of SaaS founders who already do this, such as Jon Yongfook, Damon Chen, and Levels, to name a few. Like them, you can also add MRR progress bars to your Twitter profile (in as little as one minute). Here, we’ve compiled 4 ways to add them: 1. MRR Meter Generator tool (quickest to set up) — created by Jim Raptis. It’s straightforward: just enter your current MRR and Goal MRR. Then, copy the template from the site and paste it into the Location section of your Twitter profile. This method is by far the quickest and easiest to set up. The only drawback is that every time your MRR changes, you’ll need to go to the tool and update your profile manually. 2. TweetSync.io (best for automatic updates) — created by Julien Nahum. TweetSync.io takes away the burden of updating your profile manually every time your MRR changes. It pulls data from ChartMogul Metrics API and automatically updates your Twitter profile. It hardly takes a minute to set up. Head over to TweetSync.io, connect your Twitter account, add your read-only ChartMogul API key, and voila! 3. Integromat (best if you want to display the exact MRR) If you want more flexibility, you can create an Integromat scenario to get the work done. The workflow is simple, although it’ll take you around 15 mins to set up. At a high level, you use Integromat to pull data from ChartMogul’s Metrics API and then push that data to your Twitter account. The benefit of using this method is that you can show the exact MRR in addition to showing your progress. The drawbacks are that it requires more work to set up and the Twitter integration costs a fee. Here is a template that you can import in Integromat to get started. You’ll need to request API access tokens from your ChartMogul account and connect your Twitter account to Integromat. You’ll also need to set your Target MRR in Step 2 of the above Integromat scenario. The current workflow is set up to highlight the MRR and your journey to target (along with the bars). Feel free to edit the output as it suits your needs. Don’t forget to switch on scheduling within Integromat, so that the progress bars are updated automatically at a periodic interval. Many thanks to Jacky Tan & Mohd Danish whose work inspired the template. 4. Automatic updates via API (requires code) If you prefer code over no-code (ahem!), Joe Previte has created a script. It uses the Stripe API to pull MRR data and then pushes it to Twitter. You’ll need to replace the Stripe API with ChartMougl’s Metrics API for this to work. Let us know how you get on and if you need any help with the setup. Happy MRR sharing! PS: If you prefer to show different metrics such as ARR or subscriber count, you can use similar workflows to share those. You can also update your profile headline on LinkedIn (using similar workflows) in addition to Twitter. </sys

How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions. The pitchforks are out If you want to see a prime example of angry customers, pay a visit to the iOS App Store and look at the reviews for writing app Ulysses. The situation (and rating) has actually improved a lot since the company announced their pivot to a subscription model back in August, but at that time, the listing was seeing a carpet-bombing of 1-star reviews. To say that the customer base felt burned at the switch was an understatement. Yet this is the dilemma that many app developers face today when it comes to the monetisation of their product. With the race-to-the-bottom nature of App Store pricing, it’s increasingly difficult to launch a financially-successful app to the world, let alone build a sustainable business from it. Development Lead on Ulysses Max Seeleman visualized the unsustainable nature of the “yearly update” model for apps in his Medium post. (source: https://medium.com/building-ulysses/why-were-switching-ulysses-to-subscription-47f80b07a9cd) The backlash from users probably wasn’t entirely unexpected though — the Ulysses team isn’t the only company facing this dilemma. Other high-profile apps in previous months have garnered a similar response. In fact, Max Seeleman (Dev Lead on Ulysses) seemingly anticipated a reaction by publishing a lengthy explainer post on Medium. “In-between such big point-releases, sales will often drop to a non-sustainable level. So it’s not that we’re getting rich during the development period, and even richer after each update. No. We’re actually losing money during development. And so the longer it takes to ship an update, the riskier it becomes financially.” Max Seeleman, Dev Lead on Ulysses Meet MacPaw Recognized Mac app developer MacPaw develops apps such as the highly-popular CleanMyMac (for hard drive maintenance) and Gemini (for finding and removing duplicate files). But those apps aren’t the reason I wanted to chat with Founder and CEO Oleksandr Kosovan. More recently, the team has built a platform that aims to solve the subscription business model dilemma and add value for both consumers and developers. The catch? It puts them in direct competition with Apple… I sat down to chat with Oleksandr to understand why the company moved from selling focused Mac tools to building a “Netflix for Mac apps” — and just how deeply he believes that the Netflix model is the future for many consumer apps. The MacPaw team is headquartered in Kiev, Ukraine. The problem with perpetual licenses As with many founding stories, Setapp was built out of an internal need. The company was no stranger to selling Mac software — and doing so successfully — but it was clear that the perpetual license model wasn’t going to be sustainable for them in the long run, as Oleksandr illustrates: ”You are a developer. You sold a customer a license. It has a limited value and you charge the customer $50 for example. But over time you have to support the app, you still have to serve the support tickets, release updates, support breaking systems and things like that… at some point in time this model becomes unsustainable for developers” After some initial internal tests and feedback, it was obvious to the team that not all of their existing products would work as a standalone subscription. Some tools like Gemini (for cleaning duplicate files) were often used once, or periodically. Because of this, there’s little continuous value to be gained from subscribing to the software. This is where Setapp comes in. “Setapp is basically a culmination of all the experience we gained during development of the other products. We wanted to build something for the next generation. With Setapp first of all we wanted to fix the problem of moving towards a subscription business inside our existing businesses – apps. As a business we had a huge demand to move into subscriptions.” The “all you can eat” App Store Setapp is the first subscription service for Mac apps, developed in-house by the MacPaw team. To use it, users install the service on their Mac, create an account and start helping themselves to more than 100 apps available inside the Setapp store — all for a fixed monthly cost. It’s a similar experience to the “official” Mac App store, with a more curated selection of apps and the added bonus of being able to “fill your boots” with as much as you like. Setapp is aiming to build a personalized experience around their app store. So does this model benefit users too? There has been a lot of skepticism (and rightly so) as to whether the subscription model for consumer software really delivers any benefit to the end user. It can be far more profitable for developers (especially those with great retention), but the end user is faced with a growing number of independent services, all billing their credit card automatically each month. “For users, first of all, the discovery is much easier – you don’t have to waste time trying different trial versions, searching the internet or Mac App Store for apps… you have access immediately to all the software available in Setapp… If you know what you want – you have some task, or challenge – you can just start using any app on Setapp. This is great for customers. They save a lot of time and money with this model.” So perhaps the Netflix model is the important difference with what Setapp is doing. Netflix works well because it delivers overwhelming value for the consumer, for the monthly cost. The “all you can eat” nature of the platform also applies to the Setapp product. Secondly, the complexity problem of managing multiple active subscriptions also disappears, because everything is rolled into one bundle. The complex problem of paying developers So what about the benefits for developers? I asked Oleksandr about this: “First of all, it’s much easier to enter the subscription model because Setapp is already a subscription – if customers use your product on Setapp, developers will get paid each month. Developers’ only major task is developing a sticky products. If your product really solves a problem for the customers, they will use your product every month.” But clearly developers are going to earn less revenue per user through Setapp than by doing their own subscription. I was eager to understand how the MacPaw team actually pays developers, given that over 100 apps are available on the service for that 10EUR fee. “This was probably one of the most important questions that we had to solve. We were basing our financial model on data on how people use actual software in the real market. How many applications do people use on average per month? What are these applications? How often do they return to these applications? We analyzed a lot of user behaviour in the market.” Through doing this exercise, the team have learned a lot about consumer behavior with regards to app usage: “Basically people do not use tons of applications immediately. They could try a lot of apps in the first trial month, but in the end they will only take the apps they really need for their lifestyle or work. On average it’s not more than 10 applications per month.” So based on this relatively minor usage per user, the platform can pay out developers based on usage — rather like the way that Spotify compensates artists for Spotify plays (although there’s much more revenue to go around in this case). In fact, developer accounts have access to a dashboard which shows usage data and reporting on active users — both for free trial users and paid ones. A pessimistic outlook for the Mac App Store The iOS App Store has seen a collection of improvements in recent months which add greatly improved support for subscriptions. This has not been the story for the Mac App Store however. In fact, since launch there hasn’t been much in the way of improvements at all. This coupled with various break-up stories from renowned developers has only contributed to its problems. Setapp is also attempting to avoid issues with quality by taking a more curated approach: “For us a big challenge is to bring only the best apps to Setapp. We don’t want to have any copycats or poor quality applications on Setapp. I’d compare it even to the Mac App Store — it’s impossible to find a good app there. There’s so much trash, so many clones of popular applications and stuff like that. For us it was one of the key points — to find only the great apps that we’re ready to add to Setapp.” The Mac App Store hasn’t been able to emulate the roaring success of its iOS counterpart, with several high-profile developers moving off the platform in recent months. For more on Apple’s plans for subscriptions, check out our article: Welcome to the subscription economy, Apple. What makes an app a good candidate for subscription? So how should a developer go about assessing a potential move to subscription? It’s clear that not every app is going to be a good candidate. When the future of your business model is on the line, how do you make that call? “This is a very good and complex question. For customers I believe it’s much more acceptable when there’s some background service for your product, like for example a hosting server or continuously-updating content in the background. This way, it’s much easier to justify the subscription model.” Competing with Apple on their home turf Building what is essentially an alternative to Apple’s App Store on their own platform doesn’t sound like the most solid foundation for any business. On the iOS side, numerous horror stories exist in which app developers are pulled from the App Store for seemingly innocuous reasons, killing their livelihood. Oleksandr is clearly aware of this risk, which apparently peaks each year around the time of Apples Worldwide Developer Conference (WWDC) where most platform updates are announced (I have the image of the team anxiously sitting around the live stream sweating). But outside of this, he’s surprisingly bullish on the longer-term prospects of Mac OS as an open platform: “There are some trends where Apple is actually opening a lot of things for developers, for example push notifications – which were previously restricted to apps inside the Mac App Store, and they’ve now opened them up. This is a good trend because it means they’re not planning to close the market for apps and services outside of the Mac App Store. I believe for at least the next 2-3 years we’ll still have a lot of opportunities with Setapp.” My 4 take takeaways from this discussion 1. It’s not quite “Netflix” Firstly, “Netflix for Mac apps” probably isn’t the best term to use. Netflix creates a lot of their own content nowadays, rather than licensing from other studios. Only a handful of Mac apps on Setapp are built by MacPaw. “Spotify for Mac apps” seems like a better analogy, because Spotify’s content is 100% licensed from external studios. From that $10 monthly fee, Spotify is faced with the challenge of paying out artists and studios — similar to the challenge faced by the MacPaw team. Of course, while the average user might only use a handful of apps each month, Spotify users are likely to stream a lot of songs – so neither analogy is perfect. 2. The all-you-can-eat model is far more consumer-friendly The prospect of accessing and using a huge bundle of software for a single monthly fee tackles a lot of problems on the consumer side: The complexity of remembering and managing multiple billing accounts is gone. The perceived user value is overwhelmingly good (the “child locked in a candy store” effect). 3. There’s value for small developers too If you’re a smaller developer launching a high-quality app or tool for the Mac platform, launching through Setapp is a pretty compelling option: There’s a huge boost to discoverability in comparison to the Mac App Store (where unless you get featured by Apple it’s hard to stand out). You don’t need to adapt your product for the subscription model. You don’t have to set up and manage your own subscription billing. 4. The revenue model still carries some doubt It’s still not clear whether Setapp can be a significant revenue stream for developers, let alone their primary revenue stream. With a $10/mo. user subscription shared across multiple apps, the platform would have to reach a significantly larger volume to make up for the reduction in average revenue per customer. A vision for the future Oleksandr is clearly confident that the “all-you-can-eat” model is the right one for many Mac app developers moving forwards. He also has big plans to expand the platform and offer an expanded feature set for enterprise, solving problems for businesses who want to manage licenses for employees (an area in which password management software 1Password has seen some success). In June 2017, Setapp was reported as having “10,000 paying users and another 200,000 people who are using it in the free 30-day trial mode” (source) — not bad for well under a year’s worth of existence. Users clearly appreciate having unmetered access to a library as software — much as they do with music or TV — but the next few years will be a critical test for the platform’s longevity and revenue potential for developers. …and that’s if Apple doesn’t shut them down with the next version of Mac OS.

[INST] How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions [/INST]

The pitchforks are out If you want to see a prime example of angry customers, pay a visit to the iOS App Store and look at the reviews for writing app Ulysses. The situation (and rating) has actually improved a lot since the company announced their pivot to a subscription model back in August, but at that time, the listing was seeing a carpet-bombing of 1-star reviews. To say that the customer base felt burned at the switch was an understatement. Yet this is the dilemma that many app developers face today when it comes to the monetisation of their product. With the race-to-the-bottom nature of App Store pricing, it’s increasingly difficult to launch a financially-successful app to the world, let alone build a sustainable business from it. Development Lead on Ulysses Max Seeleman visualized the unsustainable nature of the “yearly update” model for apps in his Medium post. (source: https://medium.com/building-ulysses/why-were-switching-ulysses-to-subscription-47f80b07a9cd) The backlash from users probably wasn’t entirely unexpected though — the Ulysses team isn’t the only company facing this dilemma. Other high-profile apps in previous months have garnered a similar response. In fact, Max Seeleman (Dev Lead on Ulysses) seemingly anticipated a reaction by publishing a lengthy explainer post on Medium. “In-between such big point-releases, sales will often drop to a non-sustainable level. So it’s not that we’re getting rich during the development period, and even richer after each update. No. We’re actually losing money during development. And so the longer it takes to ship an update, the riskier it becomes financially.” Max Seeleman, Dev Lead on Ulysses Meet MacPaw Recognized Mac app developer MacPaw develops apps such as the highly-popular CleanMyMac (for hard drive maintenance) and Gemini (for finding and removing duplicate files). But those apps aren’t the reason I wanted to chat with Founder and CEO Oleksandr Kosovan. More recently, the team has built a platform that aims to solve the subscription business model dilemma and add value for both consumers and developers. The catch? It puts them in direct competition with Apple… I sat down to chat with Oleksandr to understand why the company moved from selling focused Mac tools to building a “Netflix for Mac apps” — and just how deeply he believes that the Netflix model is the future for many consumer apps. The MacPaw team is headquartered in Kiev, Ukraine. The problem with perpetual licenses As with many founding stories, Setapp was built out of an internal need. The company was no stranger to selling Mac software — and doing so successfully — but it was clear that the perpetual license model wasn’t going to be sustainable for them in the long run, as Oleksandr illustrates: ”You are a developer. You sold a customer a license. It has a limited value and you charge the customer $50 for example. But over time you have to support the app, you still have to serve the support tickets, release updates, support breaking systems and things like that… at some point in time this model becomes unsustainable for developers” After some initial internal tests and feedback, it was obvious to the team that not all of their existing products would work as a standalone subscription. Some tools like Gemini (for cleaning duplicate files) were often used once, or periodically. Because of this, there’s little continuous value to be gained from subscribing to the software. This is where Setapp comes in. “Setapp is basically a culmination of all the experience we gained during development of the other products. We wanted to build something for the next generation. With Setapp first of all we wanted to fix the problem of moving towards a subscription business inside our existing businesses – apps. As a business we had a huge demand to move into subscriptions.” The “all you can eat” App Store Setapp is the first subscription service for Mac apps, developed in-house by the MacPaw team. To use it, users install the service on their Mac, create an account and start helping themselves to more than 100 apps available inside the Setapp store — all for a fixed monthly cost. It’s a similar experience to the “official” Mac App store, with a more curated selection of apps and the added bonus of being able to “fill your boots” with as much as you like. Setapp is aiming to build a personalized experience around their app store. So does this model benefit users too? There has been a lot of skepticism (and rightly so) as to whether the subscription model for consumer software really delivers any benefit to the end user. It can be far more profitable for developers (especially those with great retention), but the end user is faced with a growing number of independent services, all billing their credit card automatically each month. “For users, first of all, the discovery is much easier – you don’t have to waste time trying different trial versions, searching the internet or Mac App Store for apps… you have access immediately to all the software available in Setapp… If you know what you want – you have some task, or challenge – you can just start using any app on Setapp. This is great for customers. They save a lot of time and money with this model.” So perhaps the Netflix model is the important difference with what Setapp is doing. Netflix works well because it delivers overwhelming value for the consumer, for the monthly cost. The “all you can eat” nature of the platform also applies to the Setapp product. Secondly, the complexity problem of managing multiple active subscriptions also disappears, because everything is rolled into one bundle. The complex problem of paying developers So what about the benefits for developers? I asked Oleksandr about this: “First of all, it’s much easier to enter the subscription model because Setapp is already a subscription – if customers use your product on Setapp, developers will get paid each month. Developers’ only major task is developing a sticky products. If your product really solves a problem for the customers, they will use your product every month.” But clearly developers are going to earn less revenue per user through Setapp than by doing their own subscription. I was eager to understand how the MacPaw team actually pays developers, given that over 100 apps are available on the service for that 10EUR fee. “This was probably one of the most important questions that we had to solve. We were basing our financial model on data on how people use actual software in the real market. How many applications do people use on average per month? What are these applications? How often do they return to these applications? We analyzed a lot of user behaviour in the market.” Through doing this exercise, the team have learned a lot about consumer behavior with regards to app usage: “Basically people do not use tons of applications immediately. They could try a lot of apps in the first trial month, but in the end they will only take the apps they really need for their lifestyle or work. On average it’s not more than 10 applications per month.” So based on this relatively minor usage per user, the platform can pay out developers based on usage — rather like the way that Spotify compensates artists for Spotify plays (although there’s much more revenue to go around in this case). In fact, developer accounts have access to a dashboard which shows usage data and reporting on active users — both for free trial users and paid ones. A pessimistic outlook for the Mac App Store The iOS App Store has seen a collection of improvements in recent months which add greatly improved support for subscriptions. This has not been the story for the Mac App Store however. In fact, since launch there hasn’t been much in the way of improvements at all. This coupled with various break-up stories from renowned developers has only contributed to its problems. Setapp is also attempting to avoid issues with quality by taking a more curated approach: “For us a big challenge is to bring only the best apps to Setapp. We don’t want to have any copycats or poor quality applications on Setapp. I’d compare it even to the Mac App Store — it’s impossible to find a good app there. There’s so much trash, so many clones of popular applications and stuff like that. For us it was one of the key points — to find only the great apps that we’re ready to add to Setapp.” The Mac App Store hasn’t been able to emulate the roaring success of its iOS counterpart, with several high-profile developers moving off the platform in recent months. For more on Apple’s plans for subscriptions, check out our article: Welcome to the subscription economy, Apple. What makes an app a good candidate for subscription? So how should a developer go about assessing a potential move to subscription? It’s clear that not every app is going to be a good candidate. When the future of your business model is on the line, how do you make that call? “This is a very good and complex question. For customers I believe it’s much more acceptable when there’s some background service for your product, like for example a hosting server or continuously-updating content in the background. This way, it’s much easier to justify the subscription model.” Competing with Apple on their home turf Building what is essentially an alternative to Apple’s App Store on their own platform doesn’t sound like the most solid foundation for any business. On the iOS side, numerous horror stories exist in which app developers are pulled from the App Store for seemingly innocuous reasons, killing their livelihood. Oleksandr is clearly aware of this risk, which apparently peaks each year around the time of Apples Worldwide Developer Conference (WWDC) where most platform updates are announced (I have the image of the team anxiously sitting around the live stream sweating). But outside of this, he’s surprisingly bullish on the longer-term prospects of Mac OS as an open platform: “There are some trends where Apple is actually opening a lot of things for developers, for example push notifications – which were previously restricted to apps inside the Mac App Store, and they’ve now opened them up. This is a good trend because it means they’re not planning to close the market for apps and services outside of the Mac App Store. I believe for at least the next 2-3 years we’ll still have a lot of opportunities with Setapp.” My 4 take takeaways from this discussion 1. It’s not quite “Netflix” Firstly, “Netflix for Mac apps” probably isn’t the best term to use. Netflix creates a lot of their own content nowadays, rather than licensing from other studios. Only a handful of Mac apps on Setapp are built by MacPaw. “Spotify for Mac apps” seems like a better analogy, because Spotify’s content is 100% licensed from external studios. From that $10 monthly fee, Spotify is faced with the challenge of paying out artists and studios — similar to the challenge faced by the MacPaw team. Of course, while the average user might only use a handful of apps each month, Spotify users are likely to stream a lot of songs – so neither analogy is perfect. 2. The all-you-can-eat model is far more consumer-friendly The prospect of accessing and using a huge bundle of software for a single monthly fee tackles a lot of problems on the consumer side: The complexity of remembering and managing multiple billing accounts is gone. The perceived user value is overwhelmingly good (the “child locked in a candy store” effect). 3. There’s value for small developers too If you’re a smaller developer launching a high-quality app or tool for the Mac platform, launching through Setapp is a pretty compelling option: There’s a huge boost to discoverability in comparison to the Mac App Store (where unless you get featured by Apple it’s hard to stand out). You don’t need to adapt your product for the subscription model. You don’t have to set up and manage your own subscription billing. 4. The revenue model still carries some doubt It’s still not clear whether Setapp can be a significant revenue stream for developers, let alone their primary revenue stream. With a $10/mo. user subscription shared across multiple apps, the platform would have to reach a significantly larger volume to make up for the reduction in average revenue per customer. A vision for the future Oleksandr is clearly confident that the “all-you-can-eat” model is the right one for many Mac app developers moving forwards. He also has big plans to expand the platform and offer an expanded feature set for enterprise, solving problems for businesses who want to manage licenses for employees (an area in which password management software 1Password has seen some success). In June 2017, Setapp was reported as having “10,000 paying users and another 200,000 people who are using it in the free 30-day trial mode” (source) — not bad for well under a year’s worth of existence. Users clearly appreciate having unmetered access to a library as software — much as they do with music or TV — but the next few years will be a critical test for the platform’s longevity and revenue potential for developers. …and that’s if Apple doesn’t shut them down with the next version of Mac OS.

<sys> [INST] How the ‘Netflix for Mac apps’ plans to beat Apple at subscriptions [/INST] The pitchforks are out If you want to see a prime example of angry customers, pay a visit to the iOS App Store and look at the reviews for writing app Ulysses. The situation (and rating) has actually improved a lot since the company announced their pivot to a subscription model back in August, but at that time, the listing was seeing a carpet-bombing of 1-star reviews. To say that the customer base felt burned at the switch was an understatement. Yet this is the dilemma that many app developers face today when it comes to the monetisation of their product. With the race-to-the-bottom nature of App Store pricing, it’s increasingly difficult to launch a financially-successful app to the world, let alone build a sustainable business from it. Development Lead on Ulysses Max Seeleman visualized the unsustainable nature of the “yearly update” model for apps in his Medium post. (source: https://medium.com/building-ulysses/why-were-switching-ulysses-to-subscription-47f80b07a9cd) The backlash from users probably wasn’t entirely unexpected though — the Ulysses team isn’t the only company facing this dilemma. Other high-profile apps in previous months have garnered a similar response. In fact, Max Seeleman (Dev Lead on Ulysses) seemingly anticipated a reaction by publishing a lengthy explainer post on Medium. “In-between such big point-releases, sales will often drop to a non-sustainable level. So it’s not that we’re getting rich during the development period, and even richer after each update. No. We’re actually losing money during development. And so the longer it takes to ship an update, the riskier it becomes financially.” Max Seeleman, Dev Lead on Ulysses Meet MacPaw Recognized Mac app developer MacPaw develops apps such as the highly-popular CleanMyMac (for hard drive maintenance) and Gemini (for finding and removing duplicate files). But those apps aren’t the reason I wanted to chat with Founder and CEO Oleksandr Kosovan. More recently, the team has built a platform that aims to solve the subscription business model dilemma and add value for both consumers and developers. The catch? It puts them in direct competition with Apple… I sat down to chat with Oleksandr to understand why the company moved from selling focused Mac tools to building a “Netflix for Mac apps” — and just how deeply he believes that the Netflix model is the future for many consumer apps. The MacPaw team is headquartered in Kiev, Ukraine. The problem with perpetual licenses As with many founding stories, Setapp was built out of an internal need. The company was no stranger to selling Mac software — and doing so successfully — but it was clear that the perpetual license model wasn’t going to be sustainable for them in the long run, as Oleksandr illustrates: ”You are a developer. You sold a customer a license. It has a limited value and you charge the customer $50 for example. But over time you have to support the app, you still have to serve the support tickets, release updates, support breaking systems and things like that… at some point in time this model becomes unsustainable for developers” After some initial internal tests and feedback, it was obvious to the team that not all of their existing products would work as a standalone subscription. Some tools like Gemini (for cleaning duplicate files) were often used once, or periodically. Because of this, there’s little continuous value to be gained from subscribing to the software. This is where Setapp comes in. “Setapp is basically a culmination of all the experience we gained during development of the other products. We wanted to build something for the next generation. With Setapp first of all we wanted to fix the problem of moving towards a subscription business inside our existing businesses – apps. As a business we had a huge demand to move into subscriptions.” The “all you can eat” App Store Setapp is the first subscription service for Mac apps, developed in-house by the MacPaw team. To use it, users install the service on their Mac, create an account and start helping themselves to more than 100 apps available inside the Setapp store — all for a fixed monthly cost. It’s a similar experience to the “official” Mac App store, with a more curated selection of apps and the added bonus of being able to “fill your boots” with as much as you like. Setapp is aiming to build a personalized experience around their app store. So does this model benefit users too? There has been a lot of skepticism (and rightly so) as to whether the subscription model for consumer software really delivers any benefit to the end user. It can be far more profitable for developers (especially those with great retention), but the end user is faced with a growing number of independent services, all billing their credit card automatically each month. “For users, first of all, the discovery is much easier – you don’t have to waste time trying different trial versions, searching the internet or Mac App Store for apps… you have access immediately to all the software available in Setapp… If you know what you want – you have some task, or challenge – you can just start using any app on Setapp. This is great for customers. They save a lot of time and money with this model.” So perhaps the Netflix model is the important difference with what Setapp is doing. Netflix works well because it delivers overwhelming value for the consumer, for the monthly cost. The “all you can eat” nature of the platform also applies to the Setapp product. Secondly, the complexity problem of managing multiple active subscriptions also disappears, because everything is rolled into one bundle. The complex problem of paying developers So what about the benefits for developers? I asked Oleksandr about this: “First of all, it’s much easier to enter the subscription model because Setapp is already a subscription – if customers use your product on Setapp, developers will get paid each month. Developers’ only major task is developing a sticky products. If your product really solves a problem for the customers, they will use your product every month.” But clearly developers are going to earn less revenue per user through Setapp than by doing their own subscription. I was eager to understand how the MacPaw team actually pays developers, given that over 100 apps are available on the service for that 10EUR fee. “This was probably one of the most important questions that we had to solve. We were basing our financial model on data on how people use actual software in the real market. How many applications do people use on average per month? What are these applications? How often do they return to these applications? We analyzed a lot of user behaviour in the market.” Through doing this exercise, the team have learned a lot about consumer behavior with regards to app usage: “Basically people do not use tons of applications immediately. They could try a lot of apps in the first trial month, but in the end they will only take the apps they really need for their lifestyle or work. On average it’s not more than 10 applications per month.” So based on this relatively minor usage per user, the platform can pay out developers based on usage — rather like the way that Spotify compensates artists for Spotify plays (although there’s much more revenue to go around in this case). In fact, developer accounts have access to a dashboard which shows usage data and reporting on active users — both for free trial users and paid ones. A pessimistic outlook for the Mac App Store The iOS App Store has seen a collection of improvements in recent months which add greatly improved support for subscriptions. This has not been the story for the Mac App Store however. In fact, since launch there hasn’t been much in the way of improvements at all. This coupled with various break-up stories from renowned developers has only contributed to its problems. Setapp is also attempting to avoid issues with quality by taking a more curated approach: “For us a big challenge is to bring only the best apps to Setapp. We don’t want to have any copycats or poor quality applications on Setapp. I’d compare it even to the Mac App Store — it’s impossible to find a good app there. There’s so much trash, so many clones of popular applications and stuff like that. For us it was one of the key points — to find only the great apps that we’re ready to add to Setapp.” The Mac App Store hasn’t been able to emulate the roaring success of its iOS counterpart, with several high-profile developers moving off the platform in recent months. For more on Apple’s plans for subscriptions, check out our article: Welcome to the subscription economy, Apple. What makes an app a good candidate for subscription? So how should a developer go about assessing a potential move to subscription? It’s clear that not every app is going to be a good candidate. When the future of your business model is on the line, how do you make that call? “This is a very good and complex question. For customers I believe it’s much more acceptable when there’s some background service for your product, like for example a hosting server or continuously-updating content in the background. This way, it’s much easier to justify the subscription model.” Competing with Apple on their home turf Building what is essentially an alternative to Apple’s App Store on their own platform doesn’t sound like the most solid foundation for any business. On the iOS side, numerous horror stories exist in which app developers are pulled from the App Store for seemingly innocuous reasons, killing their livelihood. Oleksandr is clearly aware of this risk, which apparently peaks each year around the time of Apples Worldwide Developer Conference (WWDC) where most platform updates are announced (I have the image of the team anxiously sitting around the live stream sweating). But outside of this, he’s surprisingly bullish on the longer-term prospects of Mac OS as an open platform: “There are some trends where Apple is actually opening a lot of things for developers, for example push notifications – which were previously restricted to apps inside the Mac App Store, and they’ve now opened them up. This is a good trend because it means they’re not planning to close the market for apps and services outside of the Mac App Store. I believe for at least the next 2-3 years we’ll still have a lot of opportunities with Setapp.” My 4 take takeaways from this discussion 1. It’s not quite “Netflix” Firstly, “Netflix for Mac apps” probably isn’t the best term to use. Netflix creates a lot of their own content nowadays, rather than licensing from other studios. Only a handful of Mac apps on Setapp are built by MacPaw. “Spotify for Mac apps” seems like a better analogy, because Spotify’s content is 100% licensed from external studios. From that $10 monthly fee, Spotify is faced with the challenge of paying out artists and studios — similar to the challenge faced by the MacPaw team. Of course, while the average user might only use a handful of apps each month, Spotify users are likely to stream a lot of songs – so neither analogy is perfect. 2. The all-you-can-eat model is far more consumer-friendly The prospect of accessing and using a huge bundle of software for a single monthly fee tackles a lot of problems on the consumer side: The complexity of remembering and managing multiple billing accounts is gone. The perceived user value is overwhelmingly good (the “child locked in a candy store” effect). 3. There’s value for small developers too If you’re a smaller developer launching a high-quality app or tool for the Mac platform, launching through Setapp is a pretty compelling option: There’s a huge boost to discoverability in comparison to the Mac App Store (where unless you get featured by Apple it’s hard to stand out). You don’t need to adapt your product for the subscription model. You don’t have to set up and manage your own subscription billing. 4. The revenue model still carries some doubt It’s still not clear whether Setapp can be a significant revenue stream for developers, let alone their primary revenue stream. With a $10/mo. user subscription shared across multiple apps, the platform would have to reach a significantly larger volume to make up for the reduction in average revenue per customer. A vision for the future Oleksandr is clearly confident that the “all-you-can-eat” model is the right one for many Mac app developers moving forwards. He also has big plans to expand the platform and offer an expanded feature set for enterprise, solving problems for businesses who want to manage licenses for employees (an area in which password management software 1Password has seen some success). In June 2017, Setapp was reported as having “10,000 paying users and another 200,000 people who are using it in the free 30-day trial mode” (source) — not bad for well under a year’s worth of existence. Users clearly appreciate having unmetered access to a library as software — much as they do with music or TV — but the next few years will be a critical test for the platform’s longevity and revenue potential for developers. …and that’s if Apple doesn’t shut them down with the next version of Mac OS. </sys

B2B SaaS Revenue Attribution with Lars Grønnegaard of Dreamdata. Blog posts, case studies, ads, and conferences are fantastic ways of attracting leads and generating revenue. But, how do you know which of your top-of-the-funnel activities led to that revenue? With a complex sales cycle, that´s not an easy task. If this challenge sounds familiar to you, listen to this episode of SaaS Open Mic. My guest today is Lars Grønnegaard, the co-founder and CEO of Dreamdata. Revenue Attribution in B2B SaaS When leading product at Trustpilot, Lars experienced a lot of product-led growth but he couldn’t pinpoint its impact on revenue. We had lots of data, but it was connected from the product data directly to the revenue data, which was that was in our CRM, and in our subscription system. That problem, as we discovered, was of course about marketing. Lots of people were doing things in the go to market that were impacting revenue. But they didn’t know if it actually worked, or what worked and what didn’t work. Lars and I speak about revenue attribution, the process of connecting business tacts, like ads or content, to business outcomes. There’s a set of multiple data silos in your company. Getting all the data out and connecting it in a meaningful way, is just such a huge problem and challenge that it remains unsolved for pretty much all SaaS businesses out there. Site Analytics for Complex Sales Cycles Similar to any other B2B SaaS business, Dreamdata’s deals are complex. They engage with multiple people during a sales cycle. Lars shared that it takes their team around three months from the time somebody discovers Dreamdata, through a demo request, sign up, until the ultimate sale. During that time the team interacts with multiple people. Dreamdata completely abandoned using Google Analytics for their business. Lars explains how Google Analytics didn’t allow for multi-touch journeys that a B2B business needs and how it doesn’t integrate with business results. I think that the fundamental problem about Google Analytics is that it’s not account-based. On This Episode of SaaS Open Mic The challenges of revenue attribution for B2B SaaS businesses The do’s and don’ts of revenue attribution Google Analytics for complex sales cycles Why you can’t measure everything but you should measure what you can

[INST] B2B SaaS Revenue Attribution with Lars Grønnegaard of Dreamdata [/INST]

Blog posts, case studies, ads, and conferences are fantastic ways of attracting leads and generating revenue. But, how do you know which of your top-of-the-funnel activities led to that revenue? With a complex sales cycle, that´s not an easy task. If this challenge sounds familiar to you, listen to this episode of SaaS Open Mic. My guest today is Lars Grønnegaard, the co-founder and CEO of Dreamdata. Revenue Attribution in B2B SaaS When leading product at Trustpilot, Lars experienced a lot of product-led growth but he couldn’t pinpoint its impact on revenue. We had lots of data, but it was connected from the product data directly to the revenue data, which was that was in our CRM, and in our subscription system. That problem, as we discovered, was of course about marketing. Lots of people were doing things in the go to market that were impacting revenue. But they didn’t know if it actually worked, or what worked and what didn’t work. Lars and I speak about revenue attribution, the process of connecting business tacts, like ads or content, to business outcomes. There’s a set of multiple data silos in your company. Getting all the data out and connecting it in a meaningful way, is just such a huge problem and challenge that it remains unsolved for pretty much all SaaS businesses out there. Site Analytics for Complex Sales Cycles Similar to any other B2B SaaS business, Dreamdata’s deals are complex. They engage with multiple people during a sales cycle. Lars shared that it takes their team around three months from the time somebody discovers Dreamdata, through a demo request, sign up, until the ultimate sale. During that time the team interacts with multiple people. Dreamdata completely abandoned using Google Analytics for their business. Lars explains how Google Analytics didn’t allow for multi-touch journeys that a B2B business needs and how it doesn’t integrate with business results. I think that the fundamental problem about Google Analytics is that it’s not account-based. On This Episode of SaaS Open Mic The challenges of revenue attribution for B2B SaaS businesses The do’s and don’ts of revenue attribution Google Analytics for complex sales cycles Why you can’t measure everything but you should measure what you can

<sys> [INST] B2B SaaS Revenue Attribution with Lars Grønnegaard of Dreamdata [/INST] Blog posts, case studies, ads, and conferences are fantastic ways of attracting leads and generating revenue. But, how do you know which of your top-of-the-funnel activities led to that revenue? With a complex sales cycle, that´s not an easy task. If this challenge sounds familiar to you, listen to this episode of SaaS Open Mic. My guest today is Lars Grønnegaard, the co-founder and CEO of Dreamdata. Revenue Attribution in B2B SaaS When leading product at Trustpilot, Lars experienced a lot of product-led growth but he couldn’t pinpoint its impact on revenue. We had lots of data, but it was connected from the product data directly to the revenue data, which was that was in our CRM, and in our subscription system. That problem, as we discovered, was of course about marketing. Lots of people were doing things in the go to market that were impacting revenue. But they didn’t know if it actually worked, or what worked and what didn’t work. Lars and I speak about revenue attribution, the process of connecting business tacts, like ads or content, to business outcomes. There’s a set of multiple data silos in your company. Getting all the data out and connecting it in a meaningful way, is just such a huge problem and challenge that it remains unsolved for pretty much all SaaS businesses out there. Site Analytics for Complex Sales Cycles Similar to any other B2B SaaS business, Dreamdata’s deals are complex. They engage with multiple people during a sales cycle. Lars shared that it takes their team around three months from the time somebody discovers Dreamdata, through a demo request, sign up, until the ultimate sale. During that time the team interacts with multiple people. Dreamdata completely abandoned using Google Analytics for their business. Lars explains how Google Analytics didn’t allow for multi-touch journeys that a B2B business needs and how it doesn’t integrate with business results. I think that the fundamental problem about Google Analytics is that it’s not account-based. On This Episode of SaaS Open Mic The challenges of revenue attribution for B2B SaaS businesses The do’s and don’ts of revenue attribution Google Analytics for complex sales cycles Why you can’t measure everything but you should measure what you can </sys

Using Deep Customer Segmentation in SaaS. There are many platforms that support advanced customer segmentation, most of which provide their own built-in segments which act as a suitable starting point. To really get the most from such a tool though, you’ll want to create your own custom segments, based on as the most relevant data available for your customers. With segmentation employed in the right way, you can answer the following questions and much more: Which types of customer are most profitable for me? Which marketing channels produce the highest value customers? How can I better understand where my customers are losing their way in my onboarding process? Which 20% of customers are using 80% of my customer support resources? When is segmentation not suitable? One question you shoud consider is “Do I have enough data for the segments I use to be representable?”. If you have just a handful of customers, the answer is most likely a “no”. In which case, you’d be better off employing other methods for measuring your customers. If you are not able to fulfil one or more of the points below, you should reconsider implementing customer segments: What makes a useful customer segment? You really can’t go too far with using different data for segmentation. The more information you have on how your customers are behaving in your product, the higher level of fine-grained detail you can use in defining different groups. As Tomasz Tunguz suggests, your segments should be measurable, addressable, stable and consistent in order to be used effectively. But what does that really mean? 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. Choosing the right tool for segmentation With a wealth of analytics tools offering some form of segmentation in the market, you should make sure you’re picking a solution that can offer the range of functionality you need. When we approached adding a set of advanced segmentation features to ChartMogul, we considered each of the points below as critical to the success of the release of a flexible, open tool that can be useful to almost any business, regardless of the platform on which their data exists. Note: If you didn’t see the recent announcement, ChartMogul now supports the enrichment of customer profiles through API (or even automatically through our Clearbit integration) along with the ability to define and use custom segments within the ChartMogul dashboard. Read more here: Which data sources do you want to use? Does the platform provide an integration for these? You’ll likely want to leverage a wide range of data from multiple sources, e.g. paid marketing data from Twitter, sales data from Close.io or another CRM tool, industry data from another source – the possibilities are endless. You should make sure that you can get this data into your segmentation platform of choice. This would usually be through one of the following features: An integration with the platform. This method would usually be lowest-effort for your team. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and spend some time importing each time you want to update the data. How flexible is the tool – can you define the segments you need? Analytics platforms vary when it comes to defining customer segments. Whilst some might offer a fairly rigid rule-based system, some of the more advanced platforms allow you to define almost any combination of parameters and rules, sometimes even with nested rules or conditional statements. It’s definitely worth mapping out which customer segments are important to your business, and how you would actually define those first. Example segment: “Customers acquired through Twitter campaigns that have an active trial.” Example rules: Acquisition channel = “twitter_paid” AND account_status = “active_trial”. How is the data visualized? Can you compare multiple segments and get the insights you really need? You should take some time to look at how segmentation fits into the features of the platform. Which KPIs can you segment, and how is the data represented? If you want to see your LTV broken down per segment for example, make sure you can apply a segment filter to the LTV metric. MRR comparison per Marketing channel in ChartMogul Food For Thought: Interesting Customer Segments Signed up but not fully onboarded You should make it your mission to talk to and find out more about these customers – they hold the key to unlocking a smoother onboarding process for your product. Why did they drop off the onboarding flow? Did something confuse them? Or did they simply find out that your product wasn’t quite what they felt they were promised in the first place? All of these answers mean you need to make changes in some way, whether in your marketing/customer acquisition strategy, or in product improvements – particularly in the design of your onboarding process. Defining this segment: You’ll need to integrate some form of measurement into your product’s onboarding flow to achieve this, and to flag each customer’s progress through it. At-risk of churn Warning!! These customers are wobbling on the edge of churn. Focus your Customer Success efforts here to bring them back from this cliff of no-return. Make it your personal mission to review this list every day and to do whatever it takes to minimize churn from these customers. Or if you can’t do that, talk to them and understand why they have become disengaged with your product. Defining this segment: The definition of “churn-risk” customers is fairly fuzzy, and is often defined in different ways across different products. You’ll need to think about what measurable factors would highlight customers that are disengaged with your product. It would probably be highly focused around how active the customer is. Low value / high maintenance / unprofitable customers Let’s be realistic here; these customers are dragging you and your business down. They squeeze you for every possible discount in order to buy in the first place, and when they’re finally subscribed they generate so many support requests, they’re probably cashflow-negative for your business. So what to do with them? Some ideas: Charge them for support Limit their support entitlement Let them go(!) – No really. It’s okay to do this. Defining this segment: This will require you to have access to support tickets and plans belonging to the customer in the system you’re using. You’ll obviously need to decide what is a reasonable threshold at which a customer becomes “high maintenance”. Perhaps start by looking at the bottom 10% of your customers, in terms of profitability? Advocates These customers are the ones using your product to its fullest. And to top it off, they’re also the most vocal about using it and sharing their experience. They’ll give you highly valuable feedback, refer other new customers and are probably more than happy to give you a case study or quote for your website. Here are some actions you’d want to take with this segment: Understand their needs and goals – look-a-likes of this customer should be your number one target for new business, as they’ll likely use it (and love it) in the same way. Take their feedback and feature requests on board, especially negative feedback. You should probably fix the things that are causing them any pain. Use them – and their shining comments – for case studies, customer stories, quotes, and other content marketing. Their words will carry the most weight when potential customers are evaluating your product. Defining this segment: Look for a combination of high engagement with the product (on a wide range of features) and high NPS score. In summary Deep segmentation can definitely take your understanding of the spread of your customer base to the next level. And whilst it’s not always easy to set up and make the data available, the effort is likely to pay off in the long run, when you can make key decisions about the growth of your business, with the backup of solid, actionable data.

[INST] Using Deep Customer Segmentation in SaaS [/INST]

There are many platforms that support advanced customer segmentation, most of which provide their own built-in segments which act as a suitable starting point. To really get the most from such a tool though, you’ll want to create your own custom segments, based on as the most relevant data available for your customers. With segmentation employed in the right way, you can answer the following questions and much more: Which types of customer are most profitable for me? Which marketing channels produce the highest value customers? How can I better understand where my customers are losing their way in my onboarding process? Which 20% of customers are using 80% of my customer support resources? When is segmentation not suitable? One question you shoud consider is “Do I have enough data for the segments I use to be representable?”. If you have just a handful of customers, the answer is most likely a “no”. In which case, you’d be better off employing other methods for measuring your customers. If you are not able to fulfil one or more of the points below, you should reconsider implementing customer segments: What makes a useful customer segment? You really can’t go too far with using different data for segmentation. The more information you have on how your customers are behaving in your product, the higher level of fine-grained detail you can use in defining different groups. As Tomasz Tunguz suggests, your segments should be measurable, addressable, stable and consistent in order to be used effectively. But what does that really mean? 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. Choosing the right tool for segmentation With a wealth of analytics tools offering some form of segmentation in the market, you should make sure you’re picking a solution that can offer the range of functionality you need. When we approached adding a set of advanced segmentation features to ChartMogul, we considered each of the points below as critical to the success of the release of a flexible, open tool that can be useful to almost any business, regardless of the platform on which their data exists. Note: If you didn’t see the recent announcement, ChartMogul now supports the enrichment of customer profiles through API (or even automatically through our Clearbit integration) along with the ability to define and use custom segments within the ChartMogul dashboard. Read more here: Which data sources do you want to use? Does the platform provide an integration for these? You’ll likely want to leverage a wide range of data from multiple sources, e.g. paid marketing data from Twitter, sales data from Close.io or another CRM tool, industry data from another source – the possibilities are endless. You should make sure that you can get this data into your segmentation platform of choice. This would usually be through one of the following features: An integration with the platform. This method would usually be lowest-effort for your team. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and spend some time importing each time you want to update the data. How flexible is the tool – can you define the segments you need? Analytics platforms vary when it comes to defining customer segments. Whilst some might offer a fairly rigid rule-based system, some of the more advanced platforms allow you to define almost any combination of parameters and rules, sometimes even with nested rules or conditional statements. It’s definitely worth mapping out which customer segments are important to your business, and how you would actually define those first. Example segment: “Customers acquired through Twitter campaigns that have an active trial.” Example rules: Acquisition channel = “twitter_paid” AND account_status = “active_trial”. How is the data visualized? Can you compare multiple segments and get the insights you really need? You should take some time to look at how segmentation fits into the features of the platform. Which KPIs can you segment, and how is the data represented? If you want to see your LTV broken down per segment for example, make sure you can apply a segment filter to the LTV metric. MRR comparison per Marketing channel in ChartMogul Food For Thought: Interesting Customer Segments Signed up but not fully onboarded You should make it your mission to talk to and find out more about these customers – they hold the key to unlocking a smoother onboarding process for your product. Why did they drop off the onboarding flow? Did something confuse them? Or did they simply find out that your product wasn’t quite what they felt they were promised in the first place? All of these answers mean you need to make changes in some way, whether in your marketing/customer acquisition strategy, or in product improvements – particularly in the design of your onboarding process. Defining this segment: You’ll need to integrate some form of measurement into your product’s onboarding flow to achieve this, and to flag each customer’s progress through it. At-risk of churn Warning!! These customers are wobbling on the edge of churn. Focus your Customer Success efforts here to bring them back from this cliff of no-return. Make it your personal mission to review this list every day and to do whatever it takes to minimize churn from these customers. Or if you can’t do that, talk to them and understand why they have become disengaged with your product. Defining this segment: The definition of “churn-risk” customers is fairly fuzzy, and is often defined in different ways across different products. You’ll need to think about what measurable factors would highlight customers that are disengaged with your product. It would probably be highly focused around how active the customer is. Low value / high maintenance / unprofitable customers Let’s be realistic here; these customers are dragging you and your business down. They squeeze you for every possible discount in order to buy in the first place, and when they’re finally subscribed they generate so many support requests, they’re probably cashflow-negative for your business. So what to do with them? Some ideas: Charge them for support Limit their support entitlement Let them go(!) – No really. It’s okay to do this. Defining this segment: This will require you to have access to support tickets and plans belonging to the customer in the system you’re using. You’ll obviously need to decide what is a reasonable threshold at which a customer becomes “high maintenance”. Perhaps start by looking at the bottom 10% of your customers, in terms of profitability? Advocates These customers are the ones using your product to its fullest. And to top it off, they’re also the most vocal about using it and sharing their experience. They’ll give you highly valuable feedback, refer other new customers and are probably more than happy to give you a case study or quote for your website. Here are some actions you’d want to take with this segment: Understand their needs and goals – look-a-likes of this customer should be your number one target for new business, as they’ll likely use it (and love it) in the same way. Take their feedback and feature requests on board, especially negative feedback. You should probably fix the things that are causing them any pain. Use them – and their shining comments – for case studies, customer stories, quotes, and other content marketing. Their words will carry the most weight when potential customers are evaluating your product. Defining this segment: Look for a combination of high engagement with the product (on a wide range of features) and high NPS score. In summary Deep segmentation can definitely take your understanding of the spread of your customer base to the next level. And whilst it’s not always easy to set up and make the data available, the effort is likely to pay off in the long run, when you can make key decisions about the growth of your business, with the backup of solid, actionable data.

<sys> [INST] Using Deep Customer Segmentation in SaaS [/INST] There are many platforms that support advanced customer segmentation, most of which provide their own built-in segments which act as a suitable starting point. To really get the most from such a tool though, you’ll want to create your own custom segments, based on as the most relevant data available for your customers. With segmentation employed in the right way, you can answer the following questions and much more: Which types of customer are most profitable for me? Which marketing channels produce the highest value customers? How can I better understand where my customers are losing their way in my onboarding process? Which 20% of customers are using 80% of my customer support resources? When is segmentation not suitable? One question you shoud consider is “Do I have enough data for the segments I use to be representable?”. If you have just a handful of customers, the answer is most likely a “no”. In which case, you’d be better off employing other methods for measuring your customers. If you are not able to fulfil one or more of the points below, you should reconsider implementing customer segments: What makes a useful customer segment? You really can’t go too far with using different data for segmentation. The more information you have on how your customers are behaving in your product, the higher level of fine-grained detail you can use in defining different groups. As Tomasz Tunguz suggests, your segments should be measurable, addressable, stable and consistent in order to be used effectively. But what does that really mean? 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. Choosing the right tool for segmentation With a wealth of analytics tools offering some form of segmentation in the market, you should make sure you’re picking a solution that can offer the range of functionality you need. When we approached adding a set of advanced segmentation features to ChartMogul, we considered each of the points below as critical to the success of the release of a flexible, open tool that can be useful to almost any business, regardless of the platform on which their data exists. Note: If you didn’t see the recent announcement, ChartMogul now supports the enrichment of customer profiles through API (or even automatically through our Clearbit integration) along with the ability to define and use custom segments within the ChartMogul dashboard. Read more here: Which data sources do you want to use? Does the platform provide an integration for these? You’ll likely want to leverage a wide range of data from multiple sources, e.g. paid marketing data from Twitter, sales data from Close.io or another CRM tool, industry data from another source – the possibilities are endless. You should make sure that you can get this data into your segmentation platform of choice. This would usually be through one of the following features: An integration with the platform. This method would usually be lowest-effort for your team. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and spend some time importing each time you want to update the data. How flexible is the tool – can you define the segments you need? Analytics platforms vary when it comes to defining customer segments. Whilst some might offer a fairly rigid rule-based system, some of the more advanced platforms allow you to define almost any combination of parameters and rules, sometimes even with nested rules or conditional statements. It’s definitely worth mapping out which customer segments are important to your business, and how you would actually define those first. Example segment: “Customers acquired through Twitter campaigns that have an active trial.” Example rules: Acquisition channel = “twitter_paid” AND account_status = “active_trial”. How is the data visualized? Can you compare multiple segments and get the insights you really need? You should take some time to look at how segmentation fits into the features of the platform. Which KPIs can you segment, and how is the data represented? If you want to see your LTV broken down per segment for example, make sure you can apply a segment filter to the LTV metric. MRR comparison per Marketing channel in ChartMogul Food For Thought: Interesting Customer Segments Signed up but not fully onboarded You should make it your mission to talk to and find out more about these customers – they hold the key to unlocking a smoother onboarding process for your product. Why did they drop off the onboarding flow? Did something confuse them? Or did they simply find out that your product wasn’t quite what they felt they were promised in the first place? All of these answers mean you need to make changes in some way, whether in your marketing/customer acquisition strategy, or in product improvements – particularly in the design of your onboarding process. Defining this segment: You’ll need to integrate some form of measurement into your product’s onboarding flow to achieve this, and to flag each customer’s progress through it. At-risk of churn Warning!! These customers are wobbling on the edge of churn. Focus your Customer Success efforts here to bring them back from this cliff of no-return. Make it your personal mission to review this list every day and to do whatever it takes to minimize churn from these customers. Or if you can’t do that, talk to them and understand why they have become disengaged with your product. Defining this segment: The definition of “churn-risk” customers is fairly fuzzy, and is often defined in different ways across different products. You’ll need to think about what measurable factors would highlight customers that are disengaged with your product. It would probably be highly focused around how active the customer is. Low value / high maintenance / unprofitable customers Let’s be realistic here; these customers are dragging you and your business down. They squeeze you for every possible discount in order to buy in the first place, and when they’re finally subscribed they generate so many support requests, they’re probably cashflow-negative for your business. So what to do with them? Some ideas: Charge them for support Limit their support entitlement Let them go(!) – No really. It’s okay to do this. Defining this segment: This will require you to have access to support tickets and plans belonging to the customer in the system you’re using. You’ll obviously need to decide what is a reasonable threshold at which a customer becomes “high maintenance”. Perhaps start by looking at the bottom 10% of your customers, in terms of profitability? Advocates These customers are the ones using your product to its fullest. And to top it off, they’re also the most vocal about using it and sharing their experience. They’ll give you highly valuable feedback, refer other new customers and are probably more than happy to give you a case study or quote for your website. Here are some actions you’d want to take with this segment: Understand their needs and goals – look-a-likes of this customer should be your number one target for new business, as they’ll likely use it (and love it) in the same way. Take their feedback and feature requests on board, especially negative feedback. You should probably fix the things that are causing them any pain. Use them – and their shining comments – for case studies, customer stories, quotes, and other content marketing. Their words will carry the most weight when potential customers are evaluating your product. Defining this segment: Look for a combination of high engagement with the product (on a wide range of features) and high NPS score. In summary Deep segmentation can definitely take your understanding of the spread of your customer base to the next level. And whilst it’s not always easy to set up and make the data available, the effort is likely to pay off in the long run, when you can make key decisions about the growth of your business, with the backup of solid, actionable data. </sys

How Float fulfils investor needs with ChartMogul’s metrics. Float integrates with the most popular Accounting Software for Small Businesses: Float for Xero – integrates with Xero Float for FreeAgent – integrates with FreeAgent Float for QuickBooks – currently in beta, integrates with QuickBooks Float is a product of The Float Yard Ltd, founded in October 2010 in Edinburgh, Scotland. Float’s CEO and Co-founder of The Float Yard, Colin Hewitt, was running a digital agency. At the time, all their accounts were on a spreadsheet when he came up with the idea to develop Float. “After moving our accounting to the cloud – we were amazed at the efficiency of this, and said goodbye to our spreadsheet – the only problem being the lack of forward looking cash flow. So we decided to build Float. Float shows you your future bank balance by pulling data from both your accounting software and your CRM system to provide a real-time cash view of the business. It’s aimed at business owners, as a tool they can actually understand and use!” Payment products and manual work weren’t good enough for tracking MRR Prior to the integration of ChartMogul, recurring revenue analytics were done directly with Stripe. However, as Colin puts it: “[Stripe] didn’t track active customer numbers, or churn rate or anything else. We actually used Evernote and updated it manually – it was pretty inaccurate!”. It was so inaccurate and labor intensive, in fact, that churn, LTV and other SaaS metrics were not even calculated. It was clear that they needed something more accurate and automated – and in their search they found ChartMogul. ChartMogul removes the pain from calculating and understanding a company’s recurring revenue. It does this by providing – through 1-click integrations into the subscription billing platforms like Stripe – beautifully simple subscription analytics with little to no configuration. “The transition [to ChartMogul] was really easy, we just connected Stripe and there it was!”. It provides exactly the kind of analytics Float was looking for: Monthly Recurring Revenue (MRR), Churn Rate, Customer Churn Rate, Customer Lifetime Value – and all with multi-currency and geo-mapping. In particular, Colin points out that “Churn Rate is something we track pretty closely and being able to look back over a year and see that metric improving is a great indicator that things are moving in the right direction. For monthly board reporting – we basically copy and paste the key growth graphs, saves a lot of time”. ChartMogul has made a huge difference for Float As Colin explains. “It’s been great to be able to pass on accurate info whenever we’re asked – every investor wants to see the metrics and to be able to show we’re on it – feels great. The whole management team is able to track key metrics now at any time they need them.” With Float, customers get the big picture and can view exactly what their cash flow will look like in several months or even longer. Green bars are cash in and red bars are cash out, while the blue line represents bank balance. Colin adds that “having those key metrics to hand is something that you always want to be able to see, and actually learning about some of your other metrics you might not be as familiar with like LTV or ARPA is great for any founder to be up to understand”. Unparalleled insights ChartMogul adds an extra sophisticated layer of intelligence by offering Cohort Analysis: Observing what happens to a group of customers that joined in a particular time period. It allows companies to better understand the changes in subscription life cycles, helping the decision making process so the company can take action in time to upgrade or avoid a revenue loss.

[INST] How Float fulfils investor needs with ChartMogul’s metrics [/INST]

Float integrates with the most popular Accounting Software for Small Businesses: Float for Xero – integrates with Xero Float for FreeAgent – integrates with FreeAgent Float for QuickBooks – currently in beta, integrates with QuickBooks Float is a product of The Float Yard Ltd, founded in October 2010 in Edinburgh, Scotland. Float’s CEO and Co-founder of The Float Yard, Colin Hewitt, was running a digital agency. At the time, all their accounts were on a spreadsheet when he came up with the idea to develop Float. “After moving our accounting to the cloud – we were amazed at the efficiency of this, and said goodbye to our spreadsheet – the only problem being the lack of forward looking cash flow. So we decided to build Float. Float shows you your future bank balance by pulling data from both your accounting software and your CRM system to provide a real-time cash view of the business. It’s aimed at business owners, as a tool they can actually understand and use!” Payment products and manual work weren’t good enough for tracking MRR Prior to the integration of ChartMogul, recurring revenue analytics were done directly with Stripe. However, as Colin puts it: “[Stripe] didn’t track active customer numbers, or churn rate or anything else. We actually used Evernote and updated it manually – it was pretty inaccurate!”. It was so inaccurate and labor intensive, in fact, that churn, LTV and other SaaS metrics were not even calculated. It was clear that they needed something more accurate and automated – and in their search they found ChartMogul. ChartMogul removes the pain from calculating and understanding a company’s recurring revenue. It does this by providing – through 1-click integrations into the subscription billing platforms like Stripe – beautifully simple subscription analytics with little to no configuration. “The transition [to ChartMogul] was really easy, we just connected Stripe and there it was!”. It provides exactly the kind of analytics Float was looking for: Monthly Recurring Revenue (MRR), Churn Rate, Customer Churn Rate, Customer Lifetime Value – and all with multi-currency and geo-mapping. In particular, Colin points out that “Churn Rate is something we track pretty closely and being able to look back over a year and see that metric improving is a great indicator that things are moving in the right direction. For monthly board reporting – we basically copy and paste the key growth graphs, saves a lot of time”. ChartMogul has made a huge difference for Float As Colin explains. “It’s been great to be able to pass on accurate info whenever we’re asked – every investor wants to see the metrics and to be able to show we’re on it – feels great. The whole management team is able to track key metrics now at any time they need them.” With Float, customers get the big picture and can view exactly what their cash flow will look like in several months or even longer. Green bars are cash in and red bars are cash out, while the blue line represents bank balance. Colin adds that “having those key metrics to hand is something that you always want to be able to see, and actually learning about some of your other metrics you might not be as familiar with like LTV or ARPA is great for any founder to be up to understand”. Unparalleled insights ChartMogul adds an extra sophisticated layer of intelligence by offering Cohort Analysis: Observing what happens to a group of customers that joined in a particular time period. It allows companies to better understand the changes in subscription life cycles, helping the decision making process so the company can take action in time to upgrade or avoid a revenue loss.

<sys> [INST] How Float fulfils investor needs with ChartMogul’s metrics [/INST] Float integrates with the most popular Accounting Software for Small Businesses: Float for Xero – integrates with Xero Float for FreeAgent – integrates with FreeAgent Float for QuickBooks – currently in beta, integrates with QuickBooks Float is a product of The Float Yard Ltd, founded in October 2010 in Edinburgh, Scotland. Float’s CEO and Co-founder of The Float Yard, Colin Hewitt, was running a digital agency. At the time, all their accounts were on a spreadsheet when he came up with the idea to develop Float. “After moving our accounting to the cloud – we were amazed at the efficiency of this, and said goodbye to our spreadsheet – the only problem being the lack of forward looking cash flow. So we decided to build Float. Float shows you your future bank balance by pulling data from both your accounting software and your CRM system to provide a real-time cash view of the business. It’s aimed at business owners, as a tool they can actually understand and use!” Payment products and manual work weren’t good enough for tracking MRR Prior to the integration of ChartMogul, recurring revenue analytics were done directly with Stripe. However, as Colin puts it: “[Stripe] didn’t track active customer numbers, or churn rate or anything else. We actually used Evernote and updated it manually – it was pretty inaccurate!”. It was so inaccurate and labor intensive, in fact, that churn, LTV and other SaaS metrics were not even calculated. It was clear that they needed something more accurate and automated – and in their search they found ChartMogul. ChartMogul removes the pain from calculating and understanding a company’s recurring revenue. It does this by providing – through 1-click integrations into the subscription billing platforms like Stripe – beautifully simple subscription analytics with little to no configuration. “The transition [to ChartMogul] was really easy, we just connected Stripe and there it was!”. It provides exactly the kind of analytics Float was looking for: Monthly Recurring Revenue (MRR), Churn Rate, Customer Churn Rate, Customer Lifetime Value – and all with multi-currency and geo-mapping. In particular, Colin points out that “Churn Rate is something we track pretty closely and being able to look back over a year and see that metric improving is a great indicator that things are moving in the right direction. For monthly board reporting – we basically copy and paste the key growth graphs, saves a lot of time”. ChartMogul has made a huge difference for Float As Colin explains. “It’s been great to be able to pass on accurate info whenever we’re asked – every investor wants to see the metrics and to be able to show we’re on it – feels great. The whole management team is able to track key metrics now at any time they need them.” With Float, customers get the big picture and can view exactly what their cash flow will look like in several months or even longer. Green bars are cash in and red bars are cash out, while the blue line represents bank balance. Colin adds that “having those key metrics to hand is something that you always want to be able to see, and actually learning about some of your other metrics you might not be as familiar with like LTV or ARPA is great for any founder to be up to understand”. Unparalleled insights ChartMogul adds an extra sophisticated layer of intelligence by offering Cohort Analysis: Observing what happens to a group of customers that joined in a particular time period. It allows companies to better understand the changes in subscription life cycles, helping the decision making process so the company can take action in time to upgrade or avoid a revenue loss. </sys

Welcome to the Subscription Economy, Apple.. The App Store is broken, and has been that way for some time. It’s no secret that there are a number of fundamental problems with the way that apps on iOS are discovered, installed and monetized. Fundamental problem 1: Discovery There are upwards of 1.5M apps on the store, with just a Featured page, Charts and Explore page (does anyone even use that?!) to try and expose the best ones. It’s like looking through a tiny pinhole into a huge box of goodies. You’re just never going to find the vast majority of apps. As a result of this, the average number of new apps that users now install per month is zero (comScore’s U.S. Mobile App Report). So good luck getting onto users’ home screens if you’re shipping a new app in 2016. Fundamental problem 2: Installation (and updates) Ever wondered where your data allowance goes? I just took a look at the recently updated apps on my phone, in the App Store app. Today there were 9 apps updated, a total of 637MB downloaded. Yesterday, 13 apps updated, 816MB. How much of the world’s bandwidth is being taken up by app updates?! Apps are cumbersome and inefficient. I either have a ton of apps installed (and constantly downloading updates) just in case I need to launch it one day, or I have to rely on downloading the whole app just when I need to use it, before again uninstalling it. Side-note: Google is looking to address this and kill the app install with a very interesting project called Instant Apps. Game on, Apple. Fundamental problem 3: Monetization Very few apps can rely on one-off payments today. The race to the bottom hit the bottom long ago, and it’s simply not a reliable revenue model when you’re selling to users with the mindset that $2.99 is a “rip off”. Then came in-app purchases (IAP), through which many app and game publishers have seen huge success. But apps designed around this model lead to inherently “spammy” and “insincere” mechanics for getting users to part with their money. This in turn leads to “free” apps which are effectively useless unless you spend money for every single “premium” feature you wish to use. Gotta get those gems! source: thenextweb.com Advertising is another option for monetization which has also led to success for some publishers (particularly in gaming). But constant changes and innovation is required to maintain a level of effectiveness, as users slowly become immune to ad formats over time. So it’s clear that Apple has a fairly large laundry list of things to fix if it wants to future-proof the App Store, and ensure continued success for developers in the months and years to come. Subscription support on iOS: What are the facts? Apple will support a new “auto-renewing subscription” model for both new and existing apps. Apple will only approve apps that “make sense” in a subscription model. You can price your subscription at any one of 200 pre-defined price points. You can vary pricing per region. You can offer different subscription tiers to users. You can have more than one subscription, for different features or services in one app. You can handle changes to pricing, including grandfathering existing users on old plans. Apple takes a 30% cut (as usual) on revenue from the first 12 months, but after this, developers will get an additional 15% (Apple takes less). These changes blow the options wide open when it comes to monetization of apps. Particularly as more products move towards a service-oriented model, this rolls out full support for subscription billing on the platform. What’s likely to change? For subscription apps, the focus will shift to providing ongoing value to consumers. Fail to make users consistently happy? They’ll simply unsubscribe. For developers, everything becomes much more measurable. Revenue is no longer one-time, it’s _recurring_. Metrics like MRR, Churn Rate, LTV, ARPA become much more easy to measure. App analytics will need to adapt to a subscription billing model, and developers will need greater awareness of this branch of analytics. Some developers will inevitably try to exploit the “gold rush” when subscriptions become available. However, with the new features empowering consumers to easily subscribe and unsubscribe to services, this won’t last long. What’s NOT likely to change? Right now, Spotify premium costs $9.99 monthly if you subscribe on the web, but $12.99 monthly if you purchase through the App Store. This is a prime example of the business passing the “Apple Tax” down to consumers. With these changes, big consumer services such as Spotify, Netflix, Soundcloud and Amazon (Prime) will still be hesitant to align their subscription pricing correctly on iOS. Although Apple is now taking less of a cut in the long run, it’s still significant compared to handling the transaction outside of Apple’s ecosystem. I think we’ll see these services sit on the fence at first. The tipping point will be reached if the user experience is so frictionless on the platform that it drives a significantly higher rate of signup to balance out the revenue split disadvantage. In summary: Monetization on iOS is getting more flexible Support for subscriptions on iOS goes at least some of the way to solving Fundamental problem 3 (Monetization), by giving developers more options when it comes to the payment model for their apps. The core benefits of a subscription model (a focus on ongoing value, measurability and predictability) definitely apply here too, although there’s still a considerable tradeoff to be made in the form of Apple skimming a non-trivial chunk of that ongoing revenue. Expect to see recurring payments take up a much greater chunk of your monthly spending, very soon… Read more Interview with Phil Schiller on The Verge, announcing enhanced subscription support on iOS Apple’s WWDC website Article header image: apple.com

[INST] Welcome to the Subscription Economy, Apple [/INST]

. The App Store is broken, and has been that way for some time. It’s no secret that there are a number of fundamental problems with the way that apps on iOS are discovered, installed and monetized. Fundamental problem 1: Discovery There are upwards of 1.5M apps on the store, with just a Featured page, Charts and Explore page (does anyone even use that?!) to try and expose the best ones. It’s like looking through a tiny pinhole into a huge box of goodies. You’re just never going to find the vast majority of apps. As a result of this, the average number of new apps that users now install per month is zero (comScore’s U.S. Mobile App Report). So good luck getting onto users’ home screens if you’re shipping a new app in 2016. Fundamental problem 2: Installation (and updates) Ever wondered where your data allowance goes? I just took a look at the recently updated apps on my phone, in the App Store app. Today there were 9 apps updated, a total of 637MB downloaded. Yesterday, 13 apps updated, 816MB. How much of the world’s bandwidth is being taken up by app updates?! Apps are cumbersome and inefficient. I either have a ton of apps installed (and constantly downloading updates) just in case I need to launch it one day, or I have to rely on downloading the whole app just when I need to use it, before again uninstalling it. Side-note: Google is looking to address this and kill the app install with a very interesting project called Instant Apps. Game on, Apple. Fundamental problem 3: Monetization Very few apps can rely on one-off payments today. The race to the bottom hit the bottom long ago, and it’s simply not a reliable revenue model when you’re selling to users with the mindset that $2.99 is a “rip off”. Then came in-app purchases (IAP), through which many app and game publishers have seen huge success. But apps designed around this model lead to inherently “spammy” and “insincere” mechanics for getting users to part with their money. This in turn leads to “free” apps which are effectively useless unless you spend money for every single “premium” feature you wish to use. Gotta get those gems! source: thenextweb.com Advertising is another option for monetization which has also led to success for some publishers (particularly in gaming). But constant changes and innovation is required to maintain a level of effectiveness, as users slowly become immune to ad formats over time. So it’s clear that Apple has a fairly large laundry list of things to fix if it wants to future-proof the App Store, and ensure continued success for developers in the months and years to come. Subscription support on iOS: What are the facts? Apple will support a new “auto-renewing subscription” model for both new and existing apps. Apple will only approve apps that “make sense” in a subscription model. You can price your subscription at any one of 200 pre-defined price points. You can vary pricing per region. You can offer different subscription tiers to users. You can have more than one subscription, for different features or services in one app. You can handle changes to pricing, including grandfathering existing users on old plans. Apple takes a 30% cut (as usual) on revenue from the first 12 months, but after this, developers will get an additional 15% (Apple takes less). These changes blow the options wide open when it comes to monetization of apps. Particularly as more products move towards a service-oriented model, this rolls out full support for subscription billing on the platform. What’s likely to change? For subscription apps, the focus will shift to providing ongoing value to consumers. Fail to make users consistently happy? They’ll simply unsubscribe. For developers, everything becomes much more measurable. Revenue is no longer one-time, it’s _recurring_. Metrics like MRR, Churn Rate, LTV, ARPA become much more easy to measure. App analytics will need to adapt to a subscription billing model, and developers will need greater awareness of this branch of analytics. Some developers will inevitably try to exploit the “gold rush” when subscriptions become available. However, with the new features empowering consumers to easily subscribe and unsubscribe to services, this won’t last long. What’s NOT likely to change? Right now, Spotify premium costs $9.99 monthly if you subscribe on the web, but $12.99 monthly if you purchase through the App Store. This is a prime example of the business passing the “Apple Tax” down to consumers. With these changes, big consumer services such as Spotify, Netflix, Soundcloud and Amazon (Prime) will still be hesitant to align their subscription pricing correctly on iOS. Although Apple is now taking less of a cut in the long run, it’s still significant compared to handling the transaction outside of Apple’s ecosystem. I think we’ll see these services sit on the fence at first. The tipping point will be reached if the user experience is so frictionless on the platform that it drives a significantly higher rate of signup to balance out the revenue split disadvantage. In summary: Monetization on iOS is getting more flexible Support for subscriptions on iOS goes at least some of the way to solving Fundamental problem 3 (Monetization), by giving developers more options when it comes to the payment model for their apps. The core benefits of a subscription model (a focus on ongoing value, measurability and predictability) definitely apply here too, although there’s still a considerable tradeoff to be made in the form of Apple skimming a non-trivial chunk of that ongoing revenue. Expect to see recurring payments take up a much greater chunk of your monthly spending, very soon… Read more Interview with Phil Schiller on The Verge, announcing enhanced subscription support on iOS Apple’s WWDC website Article header image: apple.com

<sys> [INST] Welcome to the Subscription Economy, Apple [/INST]. The App Store is broken, and has been that way for some time. It’s no secret that there are a number of fundamental problems with the way that apps on iOS are discovered, installed and monetized. Fundamental problem 1: Discovery There are upwards of 1.5M apps on the store, with just a Featured page, Charts and Explore page (does anyone even use that?!) to try and expose the best ones. It’s like looking through a tiny pinhole into a huge box of goodies. You’re just never going to find the vast majority of apps. As a result of this, the average number of new apps that users now install per month is zero (comScore’s U.S. Mobile App Report). So good luck getting onto users’ home screens if you’re shipping a new app in 2016. Fundamental problem 2: Installation (and updates) Ever wondered where your data allowance goes? I just took a look at the recently updated apps on my phone, in the App Store app. Today there were 9 apps updated, a total of 637MB downloaded. Yesterday, 13 apps updated, 816MB. How much of the world’s bandwidth is being taken up by app updates?! Apps are cumbersome and inefficient. I either have a ton of apps installed (and constantly downloading updates) just in case I need to launch it one day, or I have to rely on downloading the whole app just when I need to use it, before again uninstalling it. Side-note: Google is looking to address this and kill the app install with a very interesting project called Instant Apps. Game on, Apple. Fundamental problem 3: Monetization Very few apps can rely on one-off payments today. The race to the bottom hit the bottom long ago, and it’s simply not a reliable revenue model when you’re selling to users with the mindset that $2.99 is a “rip off”. Then came in-app purchases (IAP), through which many app and game publishers have seen huge success. But apps designed around this model lead to inherently “spammy” and “insincere” mechanics for getting users to part with their money. This in turn leads to “free” apps which are effectively useless unless you spend money for every single “premium” feature you wish to use. Gotta get those gems! source: thenextweb.com Advertising is another option for monetization which has also led to success for some publishers (particularly in gaming). But constant changes and innovation is required to maintain a level of effectiveness, as users slowly become immune to ad formats over time. So it’s clear that Apple has a fairly large laundry list of things to fix if it wants to future-proof the App Store, and ensure continued success for developers in the months and years to come. Subscription support on iOS: What are the facts? Apple will support a new “auto-renewing subscription” model for both new and existing apps. Apple will only approve apps that “make sense” in a subscription model. You can price your subscription at any one of 200 pre-defined price points. You can vary pricing per region. You can offer different subscription tiers to users. You can have more than one subscription, for different features or services in one app. You can handle changes to pricing, including grandfathering existing users on old plans. Apple takes a 30% cut (as usual) on revenue from the first 12 months, but after this, developers will get an additional 15% (Apple takes less). These changes blow the options wide open when it comes to monetization of apps. Particularly as more products move towards a service-oriented model, this rolls out full support for subscription billing on the platform. What’s likely to change? For subscription apps, the focus will shift to providing ongoing value to consumers. Fail to make users consistently happy? They’ll simply unsubscribe. For developers, everything becomes much more measurable. Revenue is no longer one-time, it’s _recurring_. Metrics like MRR, Churn Rate, LTV, ARPA become much more easy to measure. App analytics will need to adapt to a subscription billing model, and developers will need greater awareness of this branch of analytics. Some developers will inevitably try to exploit the “gold rush” when subscriptions become available. However, with the new features empowering consumers to easily subscribe and unsubscribe to services, this won’t last long. What’s NOT likely to change? Right now, Spotify premium costs $9.99 monthly if you subscribe on the web, but $12.99 monthly if you purchase through the App Store. This is a prime example of the business passing the “Apple Tax” down to consumers. With these changes, big consumer services such as Spotify, Netflix, Soundcloud and Amazon (Prime) will still be hesitant to align their subscription pricing correctly on iOS. Although Apple is now taking less of a cut in the long run, it’s still significant compared to handling the transaction outside of Apple’s ecosystem. I think we’ll see these services sit on the fence at first. The tipping point will be reached if the user experience is so frictionless on the platform that it drives a significantly higher rate of signup to balance out the revenue split disadvantage. In summary: Monetization on iOS is getting more flexible Support for subscriptions on iOS goes at least some of the way to solving Fundamental problem 3 (Monetization), by giving developers more options when it comes to the payment model for their apps. The core benefits of a subscription model (a focus on ongoing value, measurability and predictability) definitely apply here too, although there’s still a considerable tradeoff to be made in the form of Apple skimming a non-trivial chunk of that ongoing revenue. Expect to see recurring payments take up a much greater chunk of your monthly spending, very soon… Read more Interview with Phil Schiller on The Verge, announcing enhanced subscription support on iOS Apple’s WWDC website Article header image: apple.com </sys

The Ultimate Guide to Using Customer Testimonials to Boost Sales. Customer testimonials are like guac on a burrito… They’re essential, not an optional extra. Checking reviews has become a fundamental step in the customer journey. Customers are smart. They’re wise to your marketing and advertising techniques. Hence, they need some unbiased proof that what your selling is worth buying. That’s why around 92% of buyers are more likely to make a purchase after reading a trusted review. So, you need testimonials like you need your tasty avocado-based dip. We’re going to take you through everything you need to know about getting client testimonials and choosing the right ones to showcase. As well as, how to use client testimonials strategically to make more sales. The value of customer testimonials Client testimonials are a form of social proof. According to the Social Proof theory, people are likely to imitate the attitudes and behaviors of others when they’re unsure how to act. What’s more, we’re more likely to imitate people we see as similar to ourselves, in age, community, etc. The same goes for people we perceive to be more knowledgeable than ourselves. And, finally, the greater the number of people who believe something to be true, or a behavior, correct, the more likely we are to believe it too. It’s like how everybody says that Stranger Things is great, so you start watching it on Netflix, too. Or the more testimonials that say a product is the best thing since sliced bread, the more likely a buyer is to believe the product is the best thing since sliced bread. This is the kind of powerful effect testimonials can have for your brand. Especially, considering the fact that 78% of consumers trust online reviews as much as personal recommendations. Source Testimonials are convincing. They build trust as people see endorsements that come from real people—and in many cases, micro-influencers—rather than a business. Meaning testimonials remove any doubts a consumer may have about making a purchase. Which ultimately leads to more sales. One case study showed that testimonials on sales pages can increase conversions by up to 34%. It’s hard to deny that client testimonials have a ton of value for businesses. It’s clear that you need them, but how do you get them? Learn more: A Guide to SaaS Customer Onboarding How do I get client testimonials? Boost the likelihood of getting testimonials by approaching customers in the right way. Here’s what you need to do: 1. Keep it simple One option is to automate your requests as part of your regular email communications, as TradeGecko does here: Source To increase the chance of a customer leaving a review you have to make it as simple as possible for them to do so. TradeGecko sends out a short and simple email with a direct link to where users can leave their reviews. Also, note how they emphasize the value that leaving a review has for the user, i.e. an improved service. This creates an incentive for their users to take part. 2. Personalize your request Another way to boost your chance of success is to deliver more personalized emails. Target specific clients after they have reached the all-important a-ha moment or surpassed one of their goals. They are more likely to become evangelists for your product at this point. Here’s a template you can use from HubSpot: Source A well-timed, personalized email like this is mighty persuasive. It also gives you the opportunity to emphasize how much you value your customers and celebrate their successes with them. Everybody loves a little pat on the back, after all. What you may also wish to do is guide customers in the direction you want for your testimonials. You could ask questions, such as, What problem did [product] solve for you? Why did you switch to [product]? How do you use [product] to improve [pain point]? So, not only can you increase your chance of getting testimonials, but you can get testimonials that match your objectives. What makes a good testimonial? Client testimonials should incorporate storytelling. You want real people talking about their experiences with your product. This brings a sense of authenticity to your brand and appeals to consumers on an emotional level. Celinne Da Costa at Forbes explains that due to “today’s fast-paced, overly-automated, and digitally-driven society” there’s an increasing need for genuine connections between brands and customers, In this environment, businesses can no longer afford to be faceless entities. To survive, businesses need to connect with audiences, pull at their heartstrings, and engage with them on a much deeper level than seen before. And the best way to connect with an audience is through storytelling. Here’s an example: Source This testimonial takes us on a journey with the user. It not only outlines the benefits of the product, but also how it impacts the day-to-day of the user. Another way to make testimonials more engaging is to personalize them. Marketers use personalization to deliver better customer experiences (88%), increase loyalty (59%) and generate ROI (50%). In this case, personalization means using reviews from people who represent your target audience. It makes testimonials more relatable, and therefore more convincing. Take a look at this example from accounting software provider, QuickBooks: Source Each testimonial comes from a small business owner, which is no doubt the demographic this company is trying to reach. Finally, good testimonials are benefits-focused. You may express your value proposition somewhere on your site. But it’s more impactful to have previous customers say that your product or service solves a problem. The testimonial acts as proof of the value you offer. Take this example from subscription box service, The Beard Club: Source The review illustrates the company’s USP with one simple word, “convenient”. Naturally, the reason why customers want to use a subscription service like this one is convenience. To summarize, good client testimonials engage storytelling, are relatable and convey your USP. Where to use customer testimonials (+ examples) A well-placed testimonial could be the deciding factor for a potential customer. Customers are even willing to spend up to 15% more on a product or service if they’re assured they’ll get a better experience. There are several places on and off-site where you can use testimonials to encourage conversions. Here are the top spots: Landing page The objective of a landing page is to convert customers. Thus, it’s a good idea to use testimonials here to convince users to opt-in. Here’s an example from Loomly: Source Loomly hits users with a social proof triple whammy here. They feature the number of users, seals for awards they’ve won and testimonials. It’s okay to go all-in with the social proof and feature multiple testimonials on your landing pages. Because, unlike other pages or blog content, for example, the purpose is indeed to sell your product. Testimonials page You may wish to create a dedicated testimonials page on your website. It makes sense when you sell digital products because potential customers carry out a lot of research before they consider making a purchase. There’s a much longer purchase cycle for B2B and SaaS buyers. Take a look at Buzzsumo’s testimonials page: Source Buzzsumo has really gone the extra mile by publishing interviews with their top clients. You could do something similar by finding your main evangelists and asking them to take part. What’s more, Buzzsumo namedrops industry leaders. You can magnify your social proof by acquiring testimonials from top experts or companies in your niche. Features page Why not spread the love around your site? Reviews on features pages are particularly convincing as they allow for greater specificity. Hootsuite adds this review to their feature page for content scheduling: Source The review isn’t a general, “This company is great.” But rather “This product is great because of this feature which helped me do XYZ.” If you can grab reviews for multiple features, you’ll be able to appeal to the specific pain points of customers. Customer stories You can place customer stories on your blog, in guest posts or on a dedicated page. As stated above, storytelling is important for testimonials. Customer stories are memorable and emotionally engaging. Salesforce has a dedicated customer success page: Source It’s excellent storytelling. The story not only showcases the dramatic results the customer has achieved by using the product but also how they are able to ‘pay it forward’ and help their own customers. Find your most compelling customer stories to feature and make them engaging. Naturally, you can frame this type of testimonial as a ‘customer success story’, ‘use case’ or ‘case study’. Paid Ads Testimonials make your paid ads, e.g. social ads, more effective. They’re a great way to convince your customers to click without using sales-y copy. Consumers expect to see authentic-looking posts on the likes of social media. Here’s an example of a Facebook ad that includes a testimonial: They use a customer testimonial that sounds natural and relatable. What’s more, the customer describes the rich benefits of the product while addressing a customer pain point i.e. users want to drink less soda. Use testimonials with natural language that address customer pain points to make your ad more clickable. Social media Share testimonials, reviews, and product mentions that fans post on social media. Consumers spend a lot of time on social media. Therefore, it’s the perfect channel to increase the reach of your positive endorsements. Furthermore, customers can engage with the review by leaving likes and comments, potentially creating a buzz around your product. Here, Elementor features a range of user-generated social posts on their homepage: Source What’s interesting is that Elementor says exactly what potential users are thinking, “We’re biased… Read what our users say.” So, grab endorsements from social media to feature on your site. Or simply, share, re-tweet, re-post, etc. directly on social media to encourage engagement. Email It’s difficult to get customers to click through to your website from an email. But, a testimonial could be just the thing that encourages the recipient to click. There are many ways to include testimonials in your emails. You could include specific reviews that relate to the products in your newsletter. Or share a complete customer story in one email. And even dedicate the entire email to social proof, as Eight Sleep does: Source This email contains reviews from highly credible sources, as in top-class sportspeople. Which maximizes the social proof here. Furthermore, they’re sources that Eight Sleep’s target audience, health and fitness enthusiasts, will respect. Experiment with ways of including testimonials in your emails to make them more persuasive. Video Video takes your testimonials to the next level. What’s more convincing than watching a real person talking about a product they’ve used? Subscription service Rituals features a number of video testimonials on their homepage: Source The company has chosen a particularly interesting angle. They’ve used former skeptics who’ve changed their minds about the product. In the videos, real users outline a list of benefits they’ve seen since using the product. Try creating unique testimonial videos to entertain and engage viewers. Customer testimonials are a sales goldmine The large majority of consumers check customer reviews before they make a purchase. But the reasons you should use testimonials goes beyond the fact that customers expect to see them. They provide unbiased social proof and convince consumers to make the decision to purchase. Getting client testimonials isn’t easy but you can increase your chance of success if you approach customers the right way. Once you get testimonials, choose those that are relatable and emphasize your main value proposition. Finally, place testimonials where they will be most effective to boost sales. Now, it’s over to you to enhance the way you use testimonials for your brand. About the Author Emil Kristensen is the CMO and co-founder of Sleeknote: a company that helps e-commerce brands turn their website browsers into buyers—without hurting the user experience.

[INST] The Ultimate Guide to Using Customer Testimonials to Boost Sales [/INST]

Customer testimonials are like guac on a burrito… They’re essential, not an optional extra. Checking reviews has become a fundamental step in the customer journey. Customers are smart. They’re wise to your marketing and advertising techniques. Hence, they need some unbiased proof that what your selling is worth buying. That’s why around 92% of buyers are more likely to make a purchase after reading a trusted review. So, you need testimonials like you need your tasty avocado-based dip. We’re going to take you through everything you need to know about getting client testimonials and choosing the right ones to showcase. As well as, how to use client testimonials strategically to make more sales. The value of customer testimonials Client testimonials are a form of social proof. According to the Social Proof theory, people are likely to imitate the attitudes and behaviors of others when they’re unsure how to act. What’s more, we’re more likely to imitate people we see as similar to ourselves, in age, community, etc. The same goes for people we perceive to be more knowledgeable than ourselves. And, finally, the greater the number of people who believe something to be true, or a behavior, correct, the more likely we are to believe it too. It’s like how everybody says that Stranger Things is great, so you start watching it on Netflix, too. Or the more testimonials that say a product is the best thing since sliced bread, the more likely a buyer is to believe the product is the best thing since sliced bread. This is the kind of powerful effect testimonials can have for your brand. Especially, considering the fact that 78% of consumers trust online reviews as much as personal recommendations. Source Testimonials are convincing. They build trust as people see endorsements that come from real people—and in many cases, micro-influencers—rather than a business. Meaning testimonials remove any doubts a consumer may have about making a purchase. Which ultimately leads to more sales. One case study showed that testimonials on sales pages can increase conversions by up to 34%. It’s hard to deny that client testimonials have a ton of value for businesses. It’s clear that you need them, but how do you get them? Learn more: A Guide to SaaS Customer Onboarding How do I get client testimonials? Boost the likelihood of getting testimonials by approaching customers in the right way. Here’s what you need to do: 1. Keep it simple One option is to automate your requests as part of your regular email communications, as TradeGecko does here: Source To increase the chance of a customer leaving a review you have to make it as simple as possible for them to do so. TradeGecko sends out a short and simple email with a direct link to where users can leave their reviews. Also, note how they emphasize the value that leaving a review has for the user, i.e. an improved service. This creates an incentive for their users to take part. 2. Personalize your request Another way to boost your chance of success is to deliver more personalized emails. Target specific clients after they have reached the all-important a-ha moment or surpassed one of their goals. They are more likely to become evangelists for your product at this point. Here’s a template you can use from HubSpot: Source A well-timed, personalized email like this is mighty persuasive. It also gives you the opportunity to emphasize how much you value your customers and celebrate their successes with them. Everybody loves a little pat on the back, after all. What you may also wish to do is guide customers in the direction you want for your testimonials. You could ask questions, such as, What problem did [product] solve for you? Why did you switch to [product]? How do you use [product] to improve [pain point]? So, not only can you increase your chance of getting testimonials, but you can get testimonials that match your objectives. What makes a good testimonial? Client testimonials should incorporate storytelling. You want real people talking about their experiences with your product. This brings a sense of authenticity to your brand and appeals to consumers on an emotional level. Celinne Da Costa at Forbes explains that due to “today’s fast-paced, overly-automated, and digitally-driven society” there’s an increasing need for genuine connections between brands and customers, In this environment, businesses can no longer afford to be faceless entities. To survive, businesses need to connect with audiences, pull at their heartstrings, and engage with them on a much deeper level than seen before. And the best way to connect with an audience is through storytelling. Here’s an example: Source This testimonial takes us on a journey with the user. It not only outlines the benefits of the product, but also how it impacts the day-to-day of the user. Another way to make testimonials more engaging is to personalize them. Marketers use personalization to deliver better customer experiences (88%), increase loyalty (59%) and generate ROI (50%). In this case, personalization means using reviews from people who represent your target audience. It makes testimonials more relatable, and therefore more convincing. Take a look at this example from accounting software provider, QuickBooks: Source Each testimonial comes from a small business owner, which is no doubt the demographic this company is trying to reach. Finally, good testimonials are benefits-focused. You may express your value proposition somewhere on your site. But it’s more impactful to have previous customers say that your product or service solves a problem. The testimonial acts as proof of the value you offer. Take this example from subscription box service, The Beard Club: Source The review illustrates the company’s USP with one simple word, “convenient”. Naturally, the reason why customers want to use a subscription service like this one is convenience. To summarize, good client testimonials engage storytelling, are relatable and convey your USP. Where to use customer testimonials (+ examples) A well-placed testimonial could be the deciding factor for a potential customer. Customers are even willing to spend up to 15% more on a product or service if they’re assured they’ll get a better experience. There are several places on and off-site where you can use testimonials to encourage conversions. Here are the top spots: Landing page The objective of a landing page is to convert customers. Thus, it’s a good idea to use testimonials here to convince users to opt-in. Here’s an example from Loomly: Source Loomly hits users with a social proof triple whammy here. They feature the number of users, seals for awards they’ve won and testimonials. It’s okay to go all-in with the social proof and feature multiple testimonials on your landing pages. Because, unlike other pages or blog content, for example, the purpose is indeed to sell your product. Testimonials page You may wish to create a dedicated testimonials page on your website. It makes sense when you sell digital products because potential customers carry out a lot of research before they consider making a purchase. There’s a much longer purchase cycle for B2B and SaaS buyers. Take a look at Buzzsumo’s testimonials page: Source Buzzsumo has really gone the extra mile by publishing interviews with their top clients. You could do something similar by finding your main evangelists and asking them to take part. What’s more, Buzzsumo namedrops industry leaders. You can magnify your social proof by acquiring testimonials from top experts or companies in your niche. Features page Why not spread the love around your site? Reviews on features pages are particularly convincing as they allow for greater specificity. Hootsuite adds this review to their feature page for content scheduling: Source The review isn’t a general, “This company is great.” But rather “This product is great because of this feature which helped me do XYZ.” If you can grab reviews for multiple features, you’ll be able to appeal to the specific pain points of customers. Customer stories You can place customer stories on your blog, in guest posts or on a dedicated page. As stated above, storytelling is important for testimonials. Customer stories are memorable and emotionally engaging. Salesforce has a dedicated customer success page: Source It’s excellent storytelling. The story not only showcases the dramatic results the customer has achieved by using the product but also how they are able to ‘pay it forward’ and help their own customers. Find your most compelling customer stories to feature and make them engaging. Naturally, you can frame this type of testimonial as a ‘customer success story’, ‘use case’ or ‘case study’. Paid Ads Testimonials make your paid ads, e.g. social ads, more effective. They’re a great way to convince your customers to click without using sales-y copy. Consumers expect to see authentic-looking posts on the likes of social media. Here’s an example of a Facebook ad that includes a testimonial: They use a customer testimonial that sounds natural and relatable. What’s more, the customer describes the rich benefits of the product while addressing a customer pain point i.e. users want to drink less soda. Use testimonials with natural language that address customer pain points to make your ad more clickable. Social media Share testimonials, reviews, and product mentions that fans post on social media. Consumers spend a lot of time on social media. Therefore, it’s the perfect channel to increase the reach of your positive endorsements. Furthermore, customers can engage with the review by leaving likes and comments, potentially creating a buzz around your product. Here, Elementor features a range of user-generated social posts on their homepage: Source What’s interesting is that Elementor says exactly what potential users are thinking, “We’re biased… Read what our users say.” So, grab endorsements from social media to feature on your site. Or simply, share, re-tweet, re-post, etc. directly on social media to encourage engagement. Email It’s difficult to get customers to click through to your website from an email. But, a testimonial could be just the thing that encourages the recipient to click. There are many ways to include testimonials in your emails. You could include specific reviews that relate to the products in your newsletter. Or share a complete customer story in one email. And even dedicate the entire email to social proof, as Eight Sleep does: Source This email contains reviews from highly credible sources, as in top-class sportspeople. Which maximizes the social proof here. Furthermore, they’re sources that Eight Sleep’s target audience, health and fitness enthusiasts, will respect. Experiment with ways of including testimonials in your emails to make them more persuasive. Video Video takes your testimonials to the next level. What’s more convincing than watching a real person talking about a product they’ve used? Subscription service Rituals features a number of video testimonials on their homepage: Source The company has chosen a particularly interesting angle. They’ve used former skeptics who’ve changed their minds about the product. In the videos, real users outline a list of benefits they’ve seen since using the product. Try creating unique testimonial videos to entertain and engage viewers. Customer testimonials are a sales goldmine The large majority of consumers check customer reviews before they make a purchase. But the reasons you should use testimonials goes beyond the fact that customers expect to see them. They provide unbiased social proof and convince consumers to make the decision to purchase. Getting client testimonials isn’t easy but you can increase your chance of success if you approach customers the right way. Once you get testimonials, choose those that are relatable and emphasize your main value proposition. Finally, place testimonials where they will be most effective to boost sales. Now, it’s over to you to enhance the way you use testimonials for your brand. About the Author Emil Kristensen is the CMO and co-founder of Sleeknote: a company that helps e-commerce brands turn their website browsers into buyers—without hurting the user experience.

<sys> [INST] The Ultimate Guide to Using Customer Testimonials to Boost Sales [/INST] Customer testimonials are like guac on a burrito… They’re essential, not an optional extra. Checking reviews has become a fundamental step in the customer journey. Customers are smart. They’re wise to your marketing and advertising techniques. Hence, they need some unbiased proof that what your selling is worth buying. That’s why around 92% of buyers are more likely to make a purchase after reading a trusted review. So, you need testimonials like you need your tasty avocado-based dip. We’re going to take you through everything you need to know about getting client testimonials and choosing the right ones to showcase. As well as, how to use client testimonials strategically to make more sales. The value of customer testimonials Client testimonials are a form of social proof. According to the Social Proof theory, people are likely to imitate the attitudes and behaviors of others when they’re unsure how to act. What’s more, we’re more likely to imitate people we see as similar to ourselves, in age, community, etc. The same goes for people we perceive to be more knowledgeable than ourselves. And, finally, the greater the number of people who believe something to be true, or a behavior, correct, the more likely we are to believe it too. It’s like how everybody says that Stranger Things is great, so you start watching it on Netflix, too. Or the more testimonials that say a product is the best thing since sliced bread, the more likely a buyer is to believe the product is the best thing since sliced bread. This is the kind of powerful effect testimonials can have for your brand. Especially, considering the fact that 78% of consumers trust online reviews as much as personal recommendations. Source Testimonials are convincing. They build trust as people see endorsements that come from real people—and in many cases, micro-influencers—rather than a business. Meaning testimonials remove any doubts a consumer may have about making a purchase. Which ultimately leads to more sales. One case study showed that testimonials on sales pages can increase conversions by up to 34%. It’s hard to deny that client testimonials have a ton of value for businesses. It’s clear that you need them, but how do you get them? Learn more: A Guide to SaaS Customer Onboarding How do I get client testimonials? Boost the likelihood of getting testimonials by approaching customers in the right way. Here’s what you need to do: 1. Keep it simple One option is to automate your requests as part of your regular email communications, as TradeGecko does here: Source To increase the chance of a customer leaving a review you have to make it as simple as possible for them to do so. TradeGecko sends out a short and simple email with a direct link to where users can leave their reviews. Also, note how they emphasize the value that leaving a review has for the user, i.e. an improved service. This creates an incentive for their users to take part. 2. Personalize your request Another way to boost your chance of success is to deliver more personalized emails. Target specific clients after they have reached the all-important a-ha moment or surpassed one of their goals. They are more likely to become evangelists for your product at this point. Here’s a template you can use from HubSpot: Source A well-timed, personalized email like this is mighty persuasive. It also gives you the opportunity to emphasize how much you value your customers and celebrate their successes with them. Everybody loves a little pat on the back, after all. What you may also wish to do is guide customers in the direction you want for your testimonials. You could ask questions, such as, What problem did [product] solve for you? Why did you switch to [product]? How do you use [product] to improve [pain point]? So, not only can you increase your chance of getting testimonials, but you can get testimonials that match your objectives. What makes a good testimonial? Client testimonials should incorporate storytelling. You want real people talking about their experiences with your product. This brings a sense of authenticity to your brand and appeals to consumers on an emotional level. Celinne Da Costa at Forbes explains that due to “today’s fast-paced, overly-automated, and digitally-driven society” there’s an increasing need for genuine connections between brands and customers, In this environment, businesses can no longer afford to be faceless entities. To survive, businesses need to connect with audiences, pull at their heartstrings, and engage with them on a much deeper level than seen before. And the best way to connect with an audience is through storytelling. Here’s an example: Source This testimonial takes us on a journey with the user. It not only outlines the benefits of the product, but also how it impacts the day-to-day of the user. Another way to make testimonials more engaging is to personalize them. Marketers use personalization to deliver better customer experiences (88%), increase loyalty (59%) and generate ROI (50%). In this case, personalization means using reviews from people who represent your target audience. It makes testimonials more relatable, and therefore more convincing. Take a look at this example from accounting software provider, QuickBooks: Source Each testimonial comes from a small business owner, which is no doubt the demographic this company is trying to reach. Finally, good testimonials are benefits-focused. You may express your value proposition somewhere on your site. But it’s more impactful to have previous customers say that your product or service solves a problem. The testimonial acts as proof of the value you offer. Take this example from subscription box service, The Beard Club: Source The review illustrates the company’s USP with one simple word, “convenient”. Naturally, the reason why customers want to use a subscription service like this one is convenience. To summarize, good client testimonials engage storytelling, are relatable and convey your USP. Where to use customer testimonials (+ examples) A well-placed testimonial could be the deciding factor for a potential customer. Customers are even willing to spend up to 15% more on a product or service if they’re assured they’ll get a better experience. There are several places on and off-site where you can use testimonials to encourage conversions. Here are the top spots: Landing page The objective of a landing page is to convert customers. Thus, it’s a good idea to use testimonials here to convince users to opt-in. Here’s an example from Loomly: Source Loomly hits users with a social proof triple whammy here. They feature the number of users, seals for awards they’ve won and testimonials. It’s okay to go all-in with the social proof and feature multiple testimonials on your landing pages. Because, unlike other pages or blog content, for example, the purpose is indeed to sell your product. Testimonials page You may wish to create a dedicated testimonials page on your website. It makes sense when you sell digital products because potential customers carry out a lot of research before they consider making a purchase. There’s a much longer purchase cycle for B2B and SaaS buyers. Take a look at Buzzsumo’s testimonials page: Source Buzzsumo has really gone the extra mile by publishing interviews with their top clients. You could do something similar by finding your main evangelists and asking them to take part. What’s more, Buzzsumo namedrops industry leaders. You can magnify your social proof by acquiring testimonials from top experts or companies in your niche. Features page Why not spread the love around your site? Reviews on features pages are particularly convincing as they allow for greater specificity. Hootsuite adds this review to their feature page for content scheduling: Source The review isn’t a general, “This company is great.” But rather “This product is great because of this feature which helped me do XYZ.” If you can grab reviews for multiple features, you’ll be able to appeal to the specific pain points of customers. Customer stories You can place customer stories on your blog, in guest posts or on a dedicated page. As stated above, storytelling is important for testimonials. Customer stories are memorable and emotionally engaging. Salesforce has a dedicated customer success page: Source It’s excellent storytelling. The story not only showcases the dramatic results the customer has achieved by using the product but also how they are able to ‘pay it forward’ and help their own customers. Find your most compelling customer stories to feature and make them engaging. Naturally, you can frame this type of testimonial as a ‘customer success story’, ‘use case’ or ‘case study’. Paid Ads Testimonials make your paid ads, e.g. social ads, more effective. They’re a great way to convince your customers to click without using sales-y copy. Consumers expect to see authentic-looking posts on the likes of social media. Here’s an example of a Facebook ad that includes a testimonial: They use a customer testimonial that sounds natural and relatable. What’s more, the customer describes the rich benefits of the product while addressing a customer pain point i.e. users want to drink less soda. Use testimonials with natural language that address customer pain points to make your ad more clickable. Social media Share testimonials, reviews, and product mentions that fans post on social media. Consumers spend a lot of time on social media. Therefore, it’s the perfect channel to increase the reach of your positive endorsements. Furthermore, customers can engage with the review by leaving likes and comments, potentially creating a buzz around your product. Here, Elementor features a range of user-generated social posts on their homepage: Source What’s interesting is that Elementor says exactly what potential users are thinking, “We’re biased… Read what our users say.” So, grab endorsements from social media to feature on your site. Or simply, share, re-tweet, re-post, etc. directly on social media to encourage engagement. Email It’s difficult to get customers to click through to your website from an email. But, a testimonial could be just the thing that encourages the recipient to click. There are many ways to include testimonials in your emails. You could include specific reviews that relate to the products in your newsletter. Or share a complete customer story in one email. And even dedicate the entire email to social proof, as Eight Sleep does: Source This email contains reviews from highly credible sources, as in top-class sportspeople. Which maximizes the social proof here. Furthermore, they’re sources that Eight Sleep’s target audience, health and fitness enthusiasts, will respect. Experiment with ways of including testimonials in your emails to make them more persuasive. Video Video takes your testimonials to the next level. What’s more convincing than watching a real person talking about a product they’ve used? Subscription service Rituals features a number of video testimonials on their homepage: Source The company has chosen a particularly interesting angle. They’ve used former skeptics who’ve changed their minds about the product. In the videos, real users outline a list of benefits they’ve seen since using the product. Try creating unique testimonial videos to entertain and engage viewers. Customer testimonials are a sales goldmine The large majority of consumers check customer reviews before they make a purchase. But the reasons you should use testimonials goes beyond the fact that customers expect to see them. They provide unbiased social proof and convince consumers to make the decision to purchase. Getting client testimonials isn’t easy but you can increase your chance of success if you approach customers the right way. Once you get testimonials, choose those that are relatable and emphasize your main value proposition. Finally, place testimonials where they will be most effective to boost sales. Now, it’s over to you to enhance the way you use testimonials for your brand. About the Author Emil Kristensen is the CMO and co-founder of Sleeknote: a company that helps e-commerce brands turn their website browsers into buyers—without hurting the user experience. </sys

🚀 SaaS Roundup #121: 9 Ways to Make Your SaaS Customers Hate You. 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 A better way to fund SaaS companies Bill Boebel, Pingboard “the best funding source for a SaaS company is closer to an IV drip than it is to a shot of adrenaline to the heart. We need more funding sources that understand this reality and are as iterative with their checks as their portfolio companies are with their product, sales and marketing.” SaaS as a mature market requires a different approach to early-stage growth than the early days. As Bill argues here, we’re dealing with flywheels rather than rocket ships. There are some interesting arguments here regarding the approach to fundraising, comparing “traditional” fundraising rounds to the waterfall model of software development. So what does more agile, iterative fundraising look like? Read the full post SaaS product management explained by 6 product managers Tarif Rahman, Roadmunk “The nature of SaaS implies that your customer is constantly re-evaluating your product — weekly, monthly, or yearly. Switching has become easier. And for a PM, differentiation becomes more critical. It’s a reminder to go back to the basics of ensuring we’re solving the right problems to create products that customers love.” This post shares insights from some big-hitting PM talent from Atlassian, Zendesk, Zuora and more. Everything from trends in SaaS Product Management to metrics and past failures. Read the full post 9 Ways to Make Your SaaS Customers Hate You, Ranked Amy Hoy, Stacking The Bricks “Poorly thought-out price increases are actually much worse than accidental overcharging because it’s a willful act and violates the trust in the relationship. Raising your price isn’t bad. Doing it badly is bad.” This is a great piece! Amy goes far deeper than your average list post. It’s also clear that her considerable experience mopping up issues in SaaS support have given her a highly-trained sense of customer hate. I don’t want to spoil the ranking here, but make sure you read into the reasoning too. Read the full post 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 #121: 9 Ways to Make Your SaaS Customers Hate You [/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 A better way to fund SaaS companies Bill Boebel, Pingboard “the best funding source for a SaaS company is closer to an IV drip than it is to a shot of adrenaline to the heart. We need more funding sources that understand this reality and are as iterative with their checks as their portfolio companies are with their product, sales and marketing.” SaaS as a mature market requires a different approach to early-stage growth than the early days. As Bill argues here, we’re dealing with flywheels rather than rocket ships. There are some interesting arguments here regarding the approach to fundraising, comparing “traditional” fundraising rounds to the waterfall model of software development. So what does more agile, iterative fundraising look like? Read the full post SaaS product management explained by 6 product managers Tarif Rahman, Roadmunk “The nature of SaaS implies that your customer is constantly re-evaluating your product — weekly, monthly, or yearly. Switching has become easier. And for a PM, differentiation becomes more critical. It’s a reminder to go back to the basics of ensuring we’re solving the right problems to create products that customers love.” This post shares insights from some big-hitting PM talent from Atlassian, Zendesk, Zuora and more. Everything from trends in SaaS Product Management to metrics and past failures. Read the full post 9 Ways to Make Your SaaS Customers Hate You, Ranked Amy Hoy, Stacking The Bricks “Poorly thought-out price increases are actually much worse than accidental overcharging because it’s a willful act and violates the trust in the relationship. Raising your price isn’t bad. Doing it badly is bad.” This is a great piece! Amy goes far deeper than your average list post. It’s also clear that her considerable experience mopping up issues in SaaS support have given her a highly-trained sense of customer hate. I don’t want to spoil the ranking here, but make sure you read into the reasoning too. Read the full post 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 #121: 9 Ways to Make Your SaaS Customers Hate You [/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 A better way to fund SaaS companies Bill Boebel, Pingboard “the best funding source for a SaaS company is closer to an IV drip than it is to a shot of adrenaline to the heart. We need more funding sources that understand this reality and are as iterative with their checks as their portfolio companies are with their product, sales and marketing.” SaaS as a mature market requires a different approach to early-stage growth than the early days. As Bill argues here, we’re dealing with flywheels rather than rocket ships. There are some interesting arguments here regarding the approach to fundraising, comparing “traditional” fundraising rounds to the waterfall model of software development. So what does more agile, iterative fundraising look like? Read the full post SaaS product management explained by 6 product managers Tarif Rahman, Roadmunk “The nature of SaaS implies that your customer is constantly re-evaluating your product — weekly, monthly, or yearly. Switching has become easier. And for a PM, differentiation becomes more critical. It’s a reminder to go back to the basics of ensuring we’re solving the right problems to create products that customers love.” This post shares insights from some big-hitting PM talent from Atlassian, Zendesk, Zuora and more. Everything from trends in SaaS Product Management to metrics and past failures. Read the full post 9 Ways to Make Your SaaS Customers Hate You, Ranked Amy Hoy, Stacking The Bricks “Poorly thought-out price increases are actually much worse than accidental overcharging because it’s a willful act and violates the trust in the relationship. Raising your price isn’t bad. Doing it badly is bad.” This is a great piece! Amy goes far deeper than your average list post. It’s also clear that her considerable experience mopping up issues in SaaS support have given her a highly-trained sense of customer hate. I don’t want to spoil the ranking here, but make sure you read into the reasoning too. Read the full post 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

Launching the ChartMogul SaaS Benchmarks Report 2023. I couldn’t be more excited to launch the 2nd edition of the ChartMogul SaaS Benchmarks Report. In this report, we analyze anonymized and aggregated data from over 2,100 SaaS businesses to bring you the latest SaaS benchmarks and growth trends. Here is a summary of what we are seeing in the data: SaaS growth in 2022 was the slowest it has been in years Companies are relying more on expansion revenue to drive growth There are signs of stabilization. Growth for a subset of companies accelerated in Q1 2023 After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Retention was the key to growth in the last 12 months Retention in 2022 was harder than ever You can download the full 60-pg long report here. SaaS growth in 2022 was the slowest it has been in years After a phenomenal 2020 and 2021, 2022 was much slower. The top quartile of SaaS businesses with ARR between $1 and $30 million grew 62.1% in 2022 (vs. 93.4% in 2020 and 78.9% in 2021) It’s not just private companies, public SaaS experienced a slowdown too. The top decile of public SaaS companies grew 48% in 2022 (vs. 66% in 2021) while the top quartile of companies grew 39% in 2022 (vs. 54% in 2021). Companies are relying more on expansion revenue to drive growth Given the landscape, companies are finding it harder to acquire new logos. The proportion of ARR gained from new business activities has come down from 62.0% of ARR gained in 2020 to 57.9% now. In contrast, the portion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3% now. The reactivation component has remained roughly stable at 10%. There are signs of stabilization. Growth for the top quartile companies with ARR over $1m accelerated in Q1 2023 After 7 straight quarters of slowing growth rates, the top quartile of SaaS companies with ARR over $1m saw growth accelerate slightly in the first quarter of 2023. It’s too early to say if this is a temporary stabilization, an outlier, or part of a wider trend. “Even though efficiency is a key factor in whether a startup is more or less exciting for investors, growth is the clear #1 consideration.“ Christoph Janz, Managing Partner, Point Nine Capital After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Late 2020 and the first half of 2021 were the golden periods of new business for most SaaS businesses. The journey from there on has been rough. More recently some green shoots are starting to emerge. Businesses with over $1m in ARR are seeing an acceleration in new business ARR in Q1 2023. “In today’s market average is losing – or more accurately, median is losing. There is a huge difference between being in the top quartile and being on the median. It’s the same difference between having a very strong business and a very meh business. We certainly saw this when I was a VC. We had around 2,000 companies in our portfolio, but all our fund returns came from the top 5%. Things might have looked better for median companies during the free-spending boom of 2020, but that was the anomaly. 2023 is a lot more typical of long-term economic conditions” Matt Lerner, ex-PayPal, 500 Startups VC, Founder at Startup Core Strengths Retention was the key to growth in the last 12 months Companies with best-in-class retention grew at least 1.8x faster than their peers. On average, SaaS businesses with a net retention rate of over 100% grew 49.5% in the last 12 months. In comparison, businesses with net retention in the 60-80% range grew by just 9.2%. “In reality, for every B2B SaaS business retention becomes the biggest growth driver in a way. So it is worth focussing on retention really from day one, perhaps even before you actually have any meaningful retention data to look at.” Nick Franklin, Founder & CEO, ChartMogul Retention in 2022 was harder than ever 2022 was a challenging year for most SaaS businesses. A tough macroeconomic environment meant customers reassessed and cut their SaaS spend. More than half of SaaS businesses saw lower retention rates in 2022. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to previous year. Download the 60-pg ChartMogul SaaS Benchmarks Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings and benchmarks in the full report. What is a good growth rate in 2023? What is a good retention rate? What is a good churn rate? Do companies with higher ARPA grow faster? What percentage of businesses have net retention over 100%? Expansion: is it key to growth? Do B2B businesses have a higher retention rate vs B2C?

[INST] Launching the ChartMogul SaaS Benchmarks Report 2023 [/INST]

I couldn’t be more excited to launch the 2nd edition of the ChartMogul SaaS Benchmarks Report. In this report, we analyze anonymized and aggregated data from over 2,100 SaaS businesses to bring you the latest SaaS benchmarks and growth trends. Here is a summary of what we are seeing in the data: SaaS growth in 2022 was the slowest it has been in years Companies are relying more on expansion revenue to drive growth There are signs of stabilization. Growth for a subset of companies accelerated in Q1 2023 After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Retention was the key to growth in the last 12 months Retention in 2022 was harder than ever You can download the full 60-pg long report here. SaaS growth in 2022 was the slowest it has been in years After a phenomenal 2020 and 2021, 2022 was much slower. The top quartile of SaaS businesses with ARR between $1 and $30 million grew 62.1% in 2022 (vs. 93.4% in 2020 and 78.9% in 2021) It’s not just private companies, public SaaS experienced a slowdown too. The top decile of public SaaS companies grew 48% in 2022 (vs. 66% in 2021) while the top quartile of companies grew 39% in 2022 (vs. 54% in 2021). Companies are relying more on expansion revenue to drive growth Given the landscape, companies are finding it harder to acquire new logos. The proportion of ARR gained from new business activities has come down from 62.0% of ARR gained in 2020 to 57.9% now. In contrast, the portion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3% now. The reactivation component has remained roughly stable at 10%. There are signs of stabilization. Growth for the top quartile companies with ARR over $1m accelerated in Q1 2023 After 7 straight quarters of slowing growth rates, the top quartile of SaaS companies with ARR over $1m saw growth accelerate slightly in the first quarter of 2023. It’s too early to say if this is a temporary stabilization, an outlier, or part of a wider trend. “Even though efficiency is a key factor in whether a startup is more or less exciting for investors, growth is the clear #1 consideration.“ Christoph Janz, Managing Partner, Point Nine Capital After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Late 2020 and the first half of 2021 were the golden periods of new business for most SaaS businesses. The journey from there on has been rough. More recently some green shoots are starting to emerge. Businesses with over $1m in ARR are seeing an acceleration in new business ARR in Q1 2023. “In today’s market average is losing – or more accurately, median is losing. There is a huge difference between being in the top quartile and being on the median. It’s the same difference between having a very strong business and a very meh business. We certainly saw this when I was a VC. We had around 2,000 companies in our portfolio, but all our fund returns came from the top 5%. Things might have looked better for median companies during the free-spending boom of 2020, but that was the anomaly. 2023 is a lot more typical of long-term economic conditions” Matt Lerner, ex-PayPal, 500 Startups VC, Founder at Startup Core Strengths Retention was the key to growth in the last 12 months Companies with best-in-class retention grew at least 1.8x faster than their peers. On average, SaaS businesses with a net retention rate of over 100% grew 49.5% in the last 12 months. In comparison, businesses with net retention in the 60-80% range grew by just 9.2%. “In reality, for every B2B SaaS business retention becomes the biggest growth driver in a way. So it is worth focussing on retention really from day one, perhaps even before you actually have any meaningful retention data to look at.” Nick Franklin, Founder & CEO, ChartMogul Retention in 2022 was harder than ever 2022 was a challenging year for most SaaS businesses. A tough macroeconomic environment meant customers reassessed and cut their SaaS spend. More than half of SaaS businesses saw lower retention rates in 2022. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to previous year. Download the 60-pg ChartMogul SaaS Benchmarks Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings and benchmarks in the full report. What is a good growth rate in 2023? What is a good retention rate? What is a good churn rate? Do companies with higher ARPA grow faster? What percentage of businesses have net retention over 100%? Expansion: is it key to growth? Do B2B businesses have a higher retention rate vs B2C?

<sys> [INST] Launching the ChartMogul SaaS Benchmarks Report 2023 [/INST] I couldn’t be more excited to launch the 2nd edition of the ChartMogul SaaS Benchmarks Report. In this report, we analyze anonymized and aggregated data from over 2,100 SaaS businesses to bring you the latest SaaS benchmarks and growth trends. Here is a summary of what we are seeing in the data: SaaS growth in 2022 was the slowest it has been in years Companies are relying more on expansion revenue to drive growth There are signs of stabilization. Growth for a subset of companies accelerated in Q1 2023 After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Retention was the key to growth in the last 12 months Retention in 2022 was harder than ever You can download the full 60-pg long report here. SaaS growth in 2022 was the slowest it has been in years After a phenomenal 2020 and 2021, 2022 was much slower. The top quartile of SaaS businesses with ARR between $1 and $30 million grew 62.1% in 2022 (vs. 93.4% in 2020 and 78.9% in 2021) It’s not just private companies, public SaaS experienced a slowdown too. The top decile of public SaaS companies grew 48% in 2022 (vs. 66% in 2021) while the top quartile of companies grew 39% in 2022 (vs. 54% in 2021). Companies are relying more on expansion revenue to drive growth Given the landscape, companies are finding it harder to acquire new logos. The proportion of ARR gained from new business activities has come down from 62.0% of ARR gained in 2020 to 57.9% now. In contrast, the portion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3% now. The reactivation component has remained roughly stable at 10%. There are signs of stabilization. Growth for the top quartile companies with ARR over $1m accelerated in Q1 2023 After 7 straight quarters of slowing growth rates, the top quartile of SaaS companies with ARR over $1m saw growth accelerate slightly in the first quarter of 2023. It’s too early to say if this is a temporary stabilization, an outlier, or part of a wider trend. “Even though efficiency is a key factor in whether a startup is more or less exciting for investors, growth is the clear #1 consideration.“ Christoph Janz, Managing Partner, Point Nine Capital After 5-6 quarters of lackluster growth, new business ARR is finally ticking up Late 2020 and the first half of 2021 were the golden periods of new business for most SaaS businesses. The journey from there on has been rough. More recently some green shoots are starting to emerge. Businesses with over $1m in ARR are seeing an acceleration in new business ARR in Q1 2023. “In today’s market average is losing – or more accurately, median is losing. There is a huge difference between being in the top quartile and being on the median. It’s the same difference between having a very strong business and a very meh business. We certainly saw this when I was a VC. We had around 2,000 companies in our portfolio, but all our fund returns came from the top 5%. Things might have looked better for median companies during the free-spending boom of 2020, but that was the anomaly. 2023 is a lot more typical of long-term economic conditions” Matt Lerner, ex-PayPal, 500 Startups VC, Founder at Startup Core Strengths Retention was the key to growth in the last 12 months Companies with best-in-class retention grew at least 1.8x faster than their peers. On average, SaaS businesses with a net retention rate of over 100% grew 49.5% in the last 12 months. In comparison, businesses with net retention in the 60-80% range grew by just 9.2%. “In reality, for every B2B SaaS business retention becomes the biggest growth driver in a way. So it is worth focussing on retention really from day one, perhaps even before you actually have any meaningful retention data to look at.” Nick Franklin, Founder & CEO, ChartMogul Retention in 2022 was harder than ever 2022 was a challenging year for most SaaS businesses. A tough macroeconomic environment meant customers reassessed and cut their SaaS spend. More than half of SaaS businesses saw lower retention rates in 2022. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to previous year. Download the 60-pg ChartMogul SaaS Benchmarks Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings and benchmarks in the full report. What is a good growth rate in 2023? What is a good retention rate? What is a good churn rate? Do companies with higher ARPA grow faster? What percentage of businesses have net retention over 100%? Expansion: is it key to growth? Do B2B businesses have a higher retention rate vs B2C? </sys

Useful ways to analyze SaaS expansion. Expansion rate in SaaS is an oft-overlooked metric that can uncover a lot of insights about the health of your business. While there are other common health check metrics commonly used by investors such as churn rate, expansion rate holds its own as a good indicator of future success, since: Strong customer expansion is the primary ingredient in negative churn It removes churn from the equation which — while important — can often cloud the overall picture The basic formula for MRR expansion rate is as follows: Beyond these high-level health checks that investors love to see, digging into expansion rate can actually answer more practical questions about your pricing strategy. Here are a couple of ways you can look at expansion, beyond pure expansion rate. Time to expansion How long does it take for new customers to upgrade their subscription? Time to expansion (TTE) is a measurement of the average time it takes for a customer to upgrade (expand) their subscription after signing up. When measuring the average, I’d recommend using median, which should lessen the impact of outliers (see our data literacy cheat sheet for more advice on averages). It can also be useful to only exclude customers who have never upgraded in your sample. While this is both interesting and useful metric to analyze, you should take care when optimizing for TTE — it’s not something you should unquestionably aim to shorten. If TTE is too short, you’ll end up with unhappy customers who feel they’re being pushed to upgrade too soon after signing up. Average expansion size How much do customers typically increase their subscription by? Looking at expansion size can be useful when analyzing the friction or potential pain for your customers to upgrade. You can measure this in two ways: Average expansion size as a dollar increase Expansion size as a percentage of MRR Measuring dollar increase is useful when looking at expansion from the perspective of your business. Calculating expansion size as a percentage can help you understand the pain (or friction) for customers to upgrade. If you’re asking them to increase their monthly subscription payment by a significant amount (compared to what they already pay), they may think twice about the upgrade and look elsewhere. Actions from these analyses can help you make smart changes to your pricing. This could include defining more granular expansion points in your plans (more frequent, smaller upgrades) or simply smoothing out any large jumps in price that may be causing pain. Passive vs. Active expansion An important distinction Be careful: Not all account expansion is equal. Depending on your billing model, the way in which your customers upgrade could differ between: Active expansion: The customer chooses to upgrade their account, usually to make use of more advanced features or roll out the software to a wider group of users. Passive expansion: The customer’s account expands — usually automatically — based on some scalable criteria built into the pricing. For example, the number of transactions processed or email subscribers in the system. You can read more about these two types of account expansion in The two types of freemium. Taking this even further As always, high level metrics can be made more actionable through segmentation. Why not look at the metrics above on the level of each individual plan to answer questions like “which plans exhibit more healthy account expansion?” If your business serves multiple industries, it makes sense to analyze expansion for each industry segment. There are many other ways to segment metrics according to characteristics of your business — ways that can lead to new insights and better decisions.

[INST] Useful ways to analyze SaaS expansion [/INST]

Expansion rate in SaaS is an oft-overlooked metric that can uncover a lot of insights about the health of your business. While there are other common health check metrics commonly used by investors such as churn rate, expansion rate holds its own as a good indicator of future success, since: Strong customer expansion is the primary ingredient in negative churn It removes churn from the equation which — while important — can often cloud the overall picture The basic formula for MRR expansion rate is as follows: Beyond these high-level health checks that investors love to see, digging into expansion rate can actually answer more practical questions about your pricing strategy. Here are a couple of ways you can look at expansion, beyond pure expansion rate. Time to expansion How long does it take for new customers to upgrade their subscription? Time to expansion (TTE) is a measurement of the average time it takes for a customer to upgrade (expand) their subscription after signing up. When measuring the average, I’d recommend using median, which should lessen the impact of outliers (see our data literacy cheat sheet for more advice on averages). It can also be useful to only exclude customers who have never upgraded in your sample. While this is both interesting and useful metric to analyze, you should take care when optimizing for TTE — it’s not something you should unquestionably aim to shorten. If TTE is too short, you’ll end up with unhappy customers who feel they’re being pushed to upgrade too soon after signing up. Average expansion size How much do customers typically increase their subscription by? Looking at expansion size can be useful when analyzing the friction or potential pain for your customers to upgrade. You can measure this in two ways: Average expansion size as a dollar increase Expansion size as a percentage of MRR Measuring dollar increase is useful when looking at expansion from the perspective of your business. Calculating expansion size as a percentage can help you understand the pain (or friction) for customers to upgrade. If you’re asking them to increase their monthly subscription payment by a significant amount (compared to what they already pay), they may think twice about the upgrade and look elsewhere. Actions from these analyses can help you make smart changes to your pricing. This could include defining more granular expansion points in your plans (more frequent, smaller upgrades) or simply smoothing out any large jumps in price that may be causing pain. Passive vs. Active expansion An important distinction Be careful: Not all account expansion is equal. Depending on your billing model, the way in which your customers upgrade could differ between: Active expansion: The customer chooses to upgrade their account, usually to make use of more advanced features or roll out the software to a wider group of users. Passive expansion: The customer’s account expands — usually automatically — based on some scalable criteria built into the pricing. For example, the number of transactions processed or email subscribers in the system. You can read more about these two types of account expansion in The two types of freemium. Taking this even further As always, high level metrics can be made more actionable through segmentation. Why not look at the metrics above on the level of each individual plan to answer questions like “which plans exhibit more healthy account expansion?” If your business serves multiple industries, it makes sense to analyze expansion for each industry segment. There are many other ways to segment metrics according to characteristics of your business — ways that can lead to new insights and better decisions.

<sys> [INST] Useful ways to analyze SaaS expansion [/INST] Expansion rate in SaaS is an oft-overlooked metric that can uncover a lot of insights about the health of your business. While there are other common health check metrics commonly used by investors such as churn rate, expansion rate holds its own as a good indicator of future success, since: Strong customer expansion is the primary ingredient in negative churn It removes churn from the equation which — while important — can often cloud the overall picture The basic formula for MRR expansion rate is as follows: Beyond these high-level health checks that investors love to see, digging into expansion rate can actually answer more practical questions about your pricing strategy. Here are a couple of ways you can look at expansion, beyond pure expansion rate. Time to expansion How long does it take for new customers to upgrade their subscription? Time to expansion (TTE) is a measurement of the average time it takes for a customer to upgrade (expand) their subscription after signing up. When measuring the average, I’d recommend using median, which should lessen the impact of outliers (see our data literacy cheat sheet for more advice on averages). It can also be useful to only exclude customers who have never upgraded in your sample. While this is both interesting and useful metric to analyze, you should take care when optimizing for TTE — it’s not something you should unquestionably aim to shorten. If TTE is too short, you’ll end up with unhappy customers who feel they’re being pushed to upgrade too soon after signing up. Average expansion size How much do customers typically increase their subscription by? Looking at expansion size can be useful when analyzing the friction or potential pain for your customers to upgrade. You can measure this in two ways: Average expansion size as a dollar increase Expansion size as a percentage of MRR Measuring dollar increase is useful when looking at expansion from the perspective of your business. Calculating expansion size as a percentage can help you understand the pain (or friction) for customers to upgrade. If you’re asking them to increase their monthly subscription payment by a significant amount (compared to what they already pay), they may think twice about the upgrade and look elsewhere. Actions from these analyses can help you make smart changes to your pricing. This could include defining more granular expansion points in your plans (more frequent, smaller upgrades) or simply smoothing out any large jumps in price that may be causing pain. Passive vs. Active expansion An important distinction Be careful: Not all account expansion is equal. Depending on your billing model, the way in which your customers upgrade could differ between: Active expansion: The customer chooses to upgrade their account, usually to make use of more advanced features or roll out the software to a wider group of users. Passive expansion: The customer’s account expands — usually automatically — based on some scalable criteria built into the pricing. For example, the number of transactions processed or email subscribers in the system. You can read more about these two types of account expansion in The two types of freemium. Taking this even further As always, high level metrics can be made more actionable through segmentation. Why not look at the metrics above on the level of each individual plan to answer questions like “which plans exhibit more healthy account expansion?” If your business serves multiple industries, it makes sense to analyze expansion for each industry segment. There are many other ways to segment metrics according to characteristics of your business — ways that can lead to new insights and better decisions. </sys

SaaS Open Mic: A Chat With Nikos, CEO of Workable. Workable is a one-stop shop for your company’s entire recruitment process. In the early days of the business, CEO Nikos Moraitakis and his team set out to create an affordable solution for recruitment that actually offered a great all-round user experience – in stark contrast to some of the more traditional “applicant management” systems of old. It’s safe to say they’re currently succeeding at that, with solid growth since their conception and a $27 Million Series B funding round earlier this year. I grabbed a 20-minute chat with Nikos (@moraitakis on Twitter), to discuss a range of SaaS-related topics: How Workable was started (in Greece) and eventually moved to Boston SaaS Metrics and measurement in a high-growth environment Customer Churn characteristics – Dealing with a high amount of “sleeper” accounts that eventually reactivate Pausing vs. cancelling subscriptions, and the perceived difference for customers The economics of a SaaS business past initial traction stage, and the difficulty of capturing/balancing other business costs LTV, Payback Period and how to make them useful Listen to the full interview below: Stay tuned for future editions of SaaS Open Mic, coming soon! Subscribe to our weekly digest to stay informed and get them (and other great SaaS content) sent straight to your email inbox: [mc4wp_form id=”1472″]

[INST] SaaS Open Mic: A Chat With Nikos, CEO of Workable [/INST]

Workable is a one-stop shop for your company’s entire recruitment process. In the early days of the business, CEO Nikos Moraitakis and his team set out to create an affordable solution for recruitment that actually offered a great all-round user experience – in stark contrast to some of the more traditional “applicant management” systems of old. It’s safe to say they’re currently succeeding at that, with solid growth since their conception and a $27 Million Series B funding round earlier this year. I grabbed a 20-minute chat with Nikos (@moraitakis on Twitter), to discuss a range of SaaS-related topics: How Workable was started (in Greece) and eventually moved to Boston SaaS Metrics and measurement in a high-growth environment Customer Churn characteristics – Dealing with a high amount of “sleeper” accounts that eventually reactivate Pausing vs. cancelling subscriptions, and the perceived difference for customers The economics of a SaaS business past initial traction stage, and the difficulty of capturing/balancing other business costs LTV, Payback Period and how to make them useful Listen to the full interview below: Stay tuned for future editions of SaaS Open Mic, coming soon! Subscribe to our weekly digest to stay informed and get them (and other great SaaS content) sent straight to your email inbox: [mc4wp_form id=”1472″]

<sys> [INST] SaaS Open Mic: A Chat With Nikos, CEO of Workable [/INST] Workable is a one-stop shop for your company’s entire recruitment process. In the early days of the business, CEO Nikos Moraitakis and his team set out to create an affordable solution for recruitment that actually offered a great all-round user experience – in stark contrast to some of the more traditional “applicant management” systems of old. It’s safe to say they’re currently succeeding at that, with solid growth since their conception and a $27 Million Series B funding round earlier this year. I grabbed a 20-minute chat with Nikos (@moraitakis on Twitter), to discuss a range of SaaS-related topics: How Workable was started (in Greece) and eventually moved to Boston SaaS Metrics and measurement in a high-growth environment Customer Churn characteristics – Dealing with a high amount of “sleeper” accounts that eventually reactivate Pausing vs. cancelling subscriptions, and the perceived difference for customers The economics of a SaaS business past initial traction stage, and the difficulty of capturing/balancing other business costs LTV, Payback Period and how to make them useful Listen to the full interview below: Stay tuned for future editions of SaaS Open Mic, coming soon! Subscribe to our weekly digest to stay informed and get them (and other great SaaS content) sent straight to your email inbox: [mc4wp_form id=”1472″] </sys

New graphs: Net Revenue and Non-Recurring Revenue. So far we’ve been completely focussed on giving you an accurate measure of your Monthly Recurring Revenue (MRR) and other subscription metrics like churn rate. But in order to track your net revenue (how much money you actually received from customers) you had to login to your billing system’s dashboard (or your bank account). Net Revenue shows the total invoiced/booked revenue. Revenue from subscriptions, setup fees, one-off payments and metered charges are all included. Credit card and other transaction fees are not deducted. Non-Recurring Revenue shows any revenue you receive that is not a recurring/subscription charge. Setup fees, one-off payments and metered charges are included in this graph. Non-recurring add-ons are included but recurring add-ons are not. Important – If the graphs appear blank in your ChartMogul account you will need to re-import your data from your billing system – just go to Settings > Data load > Re-import Data.

[INST] New graphs: Net Revenue and Non-Recurring Revenue [/INST]

So far we’ve been completely focussed on giving you an accurate measure of your Monthly Recurring Revenue (MRR) and other subscription metrics like churn rate. But in order to track your net revenue (how much money you actually received from customers) you had to login to your billing system’s dashboard (or your bank account). Net Revenue shows the total invoiced/booked revenue. Revenue from subscriptions, setup fees, one-off payments and metered charges are all included. Credit card and other transaction fees are not deducted. Non-Recurring Revenue shows any revenue you receive that is not a recurring/subscription charge. Setup fees, one-off payments and metered charges are included in this graph. Non-recurring add-ons are included but recurring add-ons are not. Important – If the graphs appear blank in your ChartMogul account you will need to re-import your data from your billing system – just go to Settings > Data load > Re-import Data.

<sys> [INST] New graphs: Net Revenue and Non-Recurring Revenue [/INST] So far we’ve been completely focussed on giving you an accurate measure of your Monthly Recurring Revenue (MRR) and other subscription metrics like churn rate. But in order to track your net revenue (how much money you actually received from customers) you had to login to your billing system’s dashboard (or your bank account). Net Revenue shows the total invoiced/booked revenue. Revenue from subscriptions, setup fees, one-off payments and metered charges are all included. Credit card and other transaction fees are not deducted. Non-Recurring Revenue shows any revenue you receive that is not a recurring/subscription charge. Setup fees, one-off payments and metered charges are included in this graph. Non-recurring add-ons are included but recurring add-ons are not. Important – If the graphs appear blank in your ChartMogul account you will need to re-import your data from your billing system – just go to Settings > Data load > Re-import Data. </sys

Understanding the “SaaS Gold Rush”. I’m going to preface this article by stating that we should all be skeptical of industry commentary like this. They have a tendency to generalise and imply that we’re unable to set new precedence, which is not the case. Anyone fortunate enough to work in our industry has the potential to do great new things, regardless of any wider industry trends. Salesforce is 17 years old From the birth of SaaS, we’ve seen three generations take shape, and we’re currently in the third. Even in the second generation, founders sometimes didn’t realize that there could be such a huge opportunity ahead of them. Here’s an early email exchange between Zendesk co-founder Alexander Aghassipour, and Zendesk’s angel investor Christoph Janz, discussing their Series A round. The first message is from Aghassipour, the second from Janz. Source: Christoph Janz’s blog, The Angel VC. And disclosure: both Christoph and Alexander are investors in ChartMogul. This is a founder of Zendesk, at the point when the company has ~1,000 customers, doubting that they could grow to be a huge company. Now, in hindsight, it seems inevitable of course. We’ve seen Zendesk grow to having over 80,000 customers, all while SaaS steadily takes over the software industry. But it seems, at this point in time, we’re questioning the opportunity in SaaS again. Nearly all new business software being built today is SaaS. But in conversations amongst peers and in articles on Medium, people are asking, “Is the SaaS gold rush over?” The answer is no. There are still enormous, unrealised opportunities ahead for SaaS. [Source: Bessemer Ventures] “IDC expects cloud software will grow to surpass $112.8 billion by 2019 at a compound annual growth rate (CAGR) of 18.3%. SaaS delivery will significantly outpace traditional software product delivery, growing nearly five times faster than the traditional software market.” – IDC So you could say the gold rush in SaaS can’t be over — we’ve only got 30% of the market and it’s growing like crazy. We’re definitely not at peak SaaS. So the more apt question is: How much of the market that’s still up for grabs is going to be taken by new SaaS companies, rather than soaked up by existing SaaS players? E.g. public companies such as Salesforce, Zendesk, HubSpot or Workday, or some of the larger private SaaS companies? Will SaaS companies being seed funded today be able to go big? The answer here is yes, but it’s tricky. The dynamics are completely different from what came before. To understand our current environment and the opportunities on the horizon, let’s look at the evolution of SaaS through these three generations. First Generation SaaS What drove it? The technology and business model of Software-as-a-Service was brand new and disruptive. It allowed upstart companies to encroach on territory held by on-premise giants. The value proposition was clear: SaaS removed the need for on-premise installations and ongoing maintenance. Who were some of the players? Salesforce in CRM, competing with Siebel, SAP and Microsoft NetSuite in ERP, competing with SAP and Oracle Advantages and disadvantages to being in this generation of SaaS The greatest advantage to being in the first generation of SaaS was that every vertical was a green field. But to take over some of that territory, these players faced the obstacle of educating customers on the SaaS model and convincing them away from long-standing, trusted on-premise solutions. What was the result? How did it change the game? As both customers and other software companies became aware of the benefits of the SaaS model, legacy vendors began releasing their own SaaS offerings, e.g. Quickbooks Online, sometimes via acquisitions. The SaaS model was here to stay, and it would keep spreading. Second Generation SaaS What drove it? Here things really started taking off. The second generation still rode a similar wave as the first. The SaaS value proposition still included that there is no installation or maintenance. When I joined Zendesk back in 2009, we still had to explain to many customers that there’s nothing to download, that it’s “Software as a Service”. This was a new concept for many buyers. But beyond this, new trends emerged that added even more value and fed a lot of growth for the second-generation companies. The second generation of SaaS ignited the consumerization of enterprise. The consumerization of enterprise is the ongoing shift in enterprise software towards lower cost and ease of use, trends pioneered in the consumer world. Users began demanding a friendly interface with a self-service and ease of use that legacy providers couldn’t adapt and provide quickly enough. So a new generation of SaaS rushed in “to satisfy this human desire for well-designed products.” (Forbes) “2014 is proving to be the year […] with a large wave of new-generation SaaS apps that really deliver on a delightful user experience. Employees and managers are taking notice of these new user-friendly tools, causing adoption to explode from the bottoms up.” – David Skok, ForEntrepreneurs.com The ability to deliver software via the web browser (and the release of frameworks such as Ruby on Rails) was the technology shift that helped ignite this trend. At this point, the value proposition expanded to include better design than existing solutions, a better user experience, more cost savings and simplicity. Who were some of the players? Zendesk in Customer Support Box in Storage Hubspot in Marketing Basecamp/37Signals for Project Management Advantages and disadvantages to being in this generation of SaaS A “consumerized” SaaS product is easy for potential customers to try, use, and buy on their own. As a result, the addressable market for these software categories is much broader than before. Second-generation SaaS could scale down further to the SMB and capture parts of the market that on-premise and first-generation SaaS couldn’t or wouldn’t. “The danger here for the Salesforce.com’s of the world is that corporate managers will choose which software to purchase based on what their direct reports use the most. Better interfaces are making it easier for startups and new companies to displace entrenched competitors.” – Darian Shirazi, Forbes in 2013 What was the result? How did it change things? The consumerization of the enterprise set new standards for UI/UX in enterprise software. First generation SaaS began adopting better design, or attempting to. But second-generation SaaS really took design seriously and combined this with a lower starting price. And ultimately, this combination of design and low cost opened up markets so that SaaS growth began to rocket past other software models. Third Generation SaaS — where we are now What’s driving it? Some of the main drivers of our current generation of SaaS are the further consumerization of enterprise and the low costs of both development and customer acquisition. New markets and customer types are opening up for SaaS solutions. You can organize them into the following three general buckets: 1. A few large categories still in transition. I can speak to the analytics market as that’s our field at ChartMogul. There’s no public pure-SaaS analytics company today. Tableau and Microstrategy, while have some cloud offerings, are still shipping Windows software. Perhaps this is because analytics has to work with fragmented and siloed data sets, which makes it harder to do a one-size-fits-all product; the onboarding and integration barrier is just higher. 2. Vertical SaaS. There are many verticals that were previously too small for a dedicated solution to make economic sense, but now — with the lower cost to develop and distribute software — they can support lucrative businesses. Clio for legal practices DocuTAP for medical practices ChartMogul (our company) for subscription businesses There is even a SaaS for goat herding! Product differentiation is difficult in major categories, so the easier (and perhaps necessary) route is to go to a virgin vertical or market that doesn’t have a SaaS solution yet. This generation is seeking out green fields of sorts, verticals where the main competitor is often just Excel. 3. New categories that are only possible because of the cloud. New communication and collaboration methods: Intercom, Slack APIs: Clearbit, Algolia and Contentful Advantages and disadvantages to being in this generation of SaaS There’s been a lot of venture capital flowing into early stage SaaS companies. The SaaS market is also larger and more connected, with a lot of word of mouth between startups, which makes it easier and cheaper to get to $1M in ARR than ever before. However, opportunities may appear to be smaller. Most of the market remains dominated by first and second generation SaaS. Crowded markets can mean less efficient growth, which means a rockier path to profitability and a longer shot at a successful exit. As a result, while it might be easier to get to $1M ARR than before, it may be harder to get to $100M, as at this point, there simply aren’t as many huge markets sitting there without a SaaS solution on offer. To murder a metaphor, there are fewer green fields but a lot of green gardens. Third generation SaaS companies will need to fight hard to find ways to break out of their cohort. How are things changing? This generation is shaping up to be the true consumerization of enterprise. Many first and even second generation SaaS still have poor UX and a high price. They were easier to use and cheaper than their original on-premise competitors. But the majority of these early SaaS companies still ignored the SMB space and instead focused upmarket, the more profitable end, but where elegant design is usually neglected. Today’s SaaS is made for the “everyman” company, with pricing levels that favor the customer and suit practically any budget. Also, on the other hand, the rise of API-based SaaS has given way to a whole new breed of product, one without any visual UI at all. Beyond third generation SaaS: what’s the next frontier? More vertical SaaS Most new SaaS companies I’ve seen in the last couple of years are vertical SaaS. SaaS products today are much cheaper to build and distribute than previously, so one can now launch a vertical SaaS in almost any industry and have it be a viable small or medium-sized business, and a few will almost certainly scale into large organisations. We’ve still only scratched the surface of what’s possible. There are many untouched or unsaturated verticals, markets that are only starting to transition to SaaS, such as education. Mobile-first SaaS Very few mobile-first SaaS companies really exist yet. At ChartMogul we’ve asked whether desktop will remain king, or if a device-centric view is even relevant today, given the omnipresent nature of web services. For now there are mobile-first SaaS solutions for the construction and engineering industries, such as Closeout from Bridgit — for work and project management that must be done on the go. But whether a SaaS company can truly scale in mobile-first remains to be seen. Innovating on existing legacy SaaS, a.k.a. SaaS Cannibalisation We’re seeing this happen already in a few areas: Typeform taking on SurveyMonkey Pipedrive taking on SFDC Slack taking on Yammer, Skype The innovation catalyzing the disruption of legacy SaaS will likely have to do with shifts in UI or UX, such as a shift to voice or chat UI. Automation is also likely to play a large role. Companies that figure out how AI can perform part of functions like customer service, sales, or bookkeeping, could be highly disruptive to incumbent SaaS players. Conclusion The “SaaS Gold Rush” isn’t over — it’s evolving, finding new markets, models, and advantages. The latest generation of SaaS startups are tapping into new verticals, inventing new categories made possible by new technologies, and iterating on existing “legacy” SaaS solutions.The low hanging fruit (if it ever existed) is gone and the competition is so intense the opportunity to “strike gold” might be narrower, but can be just as real. What remains to be seen is how much of the market will be taken by startups being seed funded today versus one of the public SaaS or top 300 private cloud companies (some listed here are now acquired or public). That’s how gold rushes go. The possibility of striking it rich draws all of the hopefuls and upstarts to the field — but only a few will truly find success. The incumbent SaaS companies still have relatively modern technology stacks and the global sales and marketing teams to secure their current hold on the market. But if SaaS startups can innovate in such a way to disrupt this hold, as previous generations have done before, then the sky’s the limit.

[INST] Understanding the “SaaS Gold Rush” [/INST]

I’m going to preface this article by stating that we should all be skeptical of industry commentary like this. They have a tendency to generalise and imply that we’re unable to set new precedence, which is not the case. Anyone fortunate enough to work in our industry has the potential to do great new things, regardless of any wider industry trends. Salesforce is 17 years old From the birth of SaaS, we’ve seen three generations take shape, and we’re currently in the third. Even in the second generation, founders sometimes didn’t realize that there could be such a huge opportunity ahead of them. Here’s an early email exchange between Zendesk co-founder Alexander Aghassipour, and Zendesk’s angel investor Christoph Janz, discussing their Series A round. The first message is from Aghassipour, the second from Janz. Source: Christoph Janz’s blog, The Angel VC. And disclosure: both Christoph and Alexander are investors in ChartMogul. This is a founder of Zendesk, at the point when the company has ~1,000 customers, doubting that they could grow to be a huge company. Now, in hindsight, it seems inevitable of course. We’ve seen Zendesk grow to having over 80,000 customers, all while SaaS steadily takes over the software industry. But it seems, at this point in time, we’re questioning the opportunity in SaaS again. Nearly all new business software being built today is SaaS. But in conversations amongst peers and in articles on Medium, people are asking, “Is the SaaS gold rush over?” The answer is no. There are still enormous, unrealised opportunities ahead for SaaS. [Source: Bessemer Ventures] “IDC expects cloud software will grow to surpass $112.8 billion by 2019 at a compound annual growth rate (CAGR) of 18.3%. SaaS delivery will significantly outpace traditional software product delivery, growing nearly five times faster than the traditional software market.” – IDC So you could say the gold rush in SaaS can’t be over — we’ve only got 30% of the market and it’s growing like crazy. We’re definitely not at peak SaaS. So the more apt question is: How much of the market that’s still up for grabs is going to be taken by new SaaS companies, rather than soaked up by existing SaaS players? E.g. public companies such as Salesforce, Zendesk, HubSpot or Workday, or some of the larger private SaaS companies? Will SaaS companies being seed funded today be able to go big? The answer here is yes, but it’s tricky. The dynamics are completely different from what came before. To understand our current environment and the opportunities on the horizon, let’s look at the evolution of SaaS through these three generations. First Generation SaaS What drove it? The technology and business model of Software-as-a-Service was brand new and disruptive. It allowed upstart companies to encroach on territory held by on-premise giants. The value proposition was clear: SaaS removed the need for on-premise installations and ongoing maintenance. Who were some of the players? Salesforce in CRM, competing with Siebel, SAP and Microsoft NetSuite in ERP, competing with SAP and Oracle Advantages and disadvantages to being in this generation of SaaS The greatest advantage to being in the first generation of SaaS was that every vertical was a green field. But to take over some of that territory, these players faced the obstacle of educating customers on the SaaS model and convincing them away from long-standing, trusted on-premise solutions. What was the result? How did it change the game? As both customers and other software companies became aware of the benefits of the SaaS model, legacy vendors began releasing their own SaaS offerings, e.g. Quickbooks Online, sometimes via acquisitions. The SaaS model was here to stay, and it would keep spreading. Second Generation SaaS What drove it? Here things really started taking off. The second generation still rode a similar wave as the first. The SaaS value proposition still included that there is no installation or maintenance. When I joined Zendesk back in 2009, we still had to explain to many customers that there’s nothing to download, that it’s “Software as a Service”. This was a new concept for many buyers. But beyond this, new trends emerged that added even more value and fed a lot of growth for the second-generation companies. The second generation of SaaS ignited the consumerization of enterprise. The consumerization of enterprise is the ongoing shift in enterprise software towards lower cost and ease of use, trends pioneered in the consumer world. Users began demanding a friendly interface with a self-service and ease of use that legacy providers couldn’t adapt and provide quickly enough. So a new generation of SaaS rushed in “to satisfy this human desire for well-designed products.” (Forbes) “2014 is proving to be the year […] with a large wave of new-generation SaaS apps that really deliver on a delightful user experience. Employees and managers are taking notice of these new user-friendly tools, causing adoption to explode from the bottoms up.” – David Skok, ForEntrepreneurs.com The ability to deliver software via the web browser (and the release of frameworks such as Ruby on Rails) was the technology shift that helped ignite this trend. At this point, the value proposition expanded to include better design than existing solutions, a better user experience, more cost savings and simplicity. Who were some of the players? Zendesk in Customer Support Box in Storage Hubspot in Marketing Basecamp/37Signals for Project Management Advantages and disadvantages to being in this generation of SaaS A “consumerized” SaaS product is easy for potential customers to try, use, and buy on their own. As a result, the addressable market for these software categories is much broader than before. Second-generation SaaS could scale down further to the SMB and capture parts of the market that on-premise and first-generation SaaS couldn’t or wouldn’t. “The danger here for the Salesforce.com’s of the world is that corporate managers will choose which software to purchase based on what their direct reports use the most. Better interfaces are making it easier for startups and new companies to displace entrenched competitors.” – Darian Shirazi, Forbes in 2013 What was the result? How did it change things? The consumerization of the enterprise set new standards for UI/UX in enterprise software. First generation SaaS began adopting better design, or attempting to. But second-generation SaaS really took design seriously and combined this with a lower starting price. And ultimately, this combination of design and low cost opened up markets so that SaaS growth began to rocket past other software models. Third Generation SaaS — where we are now What’s driving it? Some of the main drivers of our current generation of SaaS are the further consumerization of enterprise and the low costs of both development and customer acquisition. New markets and customer types are opening up for SaaS solutions. You can organize them into the following three general buckets: 1. A few large categories still in transition. I can speak to the analytics market as that’s our field at ChartMogul. There’s no public pure-SaaS analytics company today. Tableau and Microstrategy, while have some cloud offerings, are still shipping Windows software. Perhaps this is because analytics has to work with fragmented and siloed data sets, which makes it harder to do a one-size-fits-all product; the onboarding and integration barrier is just higher. 2. Vertical SaaS. There are many verticals that were previously too small for a dedicated solution to make economic sense, but now — with the lower cost to develop and distribute software — they can support lucrative businesses. Clio for legal practices DocuTAP for medical practices ChartMogul (our company) for subscription businesses There is even a SaaS for goat herding! Product differentiation is difficult in major categories, so the easier (and perhaps necessary) route is to go to a virgin vertical or market that doesn’t have a SaaS solution yet. This generation is seeking out green fields of sorts, verticals where the main competitor is often just Excel. 3. New categories that are only possible because of the cloud. New communication and collaboration methods: Intercom, Slack APIs: Clearbit, Algolia and Contentful Advantages and disadvantages to being in this generation of SaaS There’s been a lot of venture capital flowing into early stage SaaS companies. The SaaS market is also larger and more connected, with a lot of word of mouth between startups, which makes it easier and cheaper to get to $1M in ARR than ever before. However, opportunities may appear to be smaller. Most of the market remains dominated by first and second generation SaaS. Crowded markets can mean less efficient growth, which means a rockier path to profitability and a longer shot at a successful exit. As a result, while it might be easier to get to $1M ARR than before, it may be harder to get to $100M, as at this point, there simply aren’t as many huge markets sitting there without a SaaS solution on offer. To murder a metaphor, there are fewer green fields but a lot of green gardens. Third generation SaaS companies will need to fight hard to find ways to break out of their cohort. How are things changing? This generation is shaping up to be the true consumerization of enterprise. Many first and even second generation SaaS still have poor UX and a high price. They were easier to use and cheaper than their original on-premise competitors. But the majority of these early SaaS companies still ignored the SMB space and instead focused upmarket, the more profitable end, but where elegant design is usually neglected. Today’s SaaS is made for the “everyman” company, with pricing levels that favor the customer and suit practically any budget. Also, on the other hand, the rise of API-based SaaS has given way to a whole new breed of product, one without any visual UI at all. Beyond third generation SaaS: what’s the next frontier? More vertical SaaS Most new SaaS companies I’ve seen in the last couple of years are vertical SaaS. SaaS products today are much cheaper to build and distribute than previously, so one can now launch a vertical SaaS in almost any industry and have it be a viable small or medium-sized business, and a few will almost certainly scale into large organisations. We’ve still only scratched the surface of what’s possible. There are many untouched or unsaturated verticals, markets that are only starting to transition to SaaS, such as education. Mobile-first SaaS Very few mobile-first SaaS companies really exist yet. At ChartMogul we’ve asked whether desktop will remain king, or if a device-centric view is even relevant today, given the omnipresent nature of web services. For now there are mobile-first SaaS solutions for the construction and engineering industries, such as Closeout from Bridgit — for work and project management that must be done on the go. But whether a SaaS company can truly scale in mobile-first remains to be seen. Innovating on existing legacy SaaS, a.k.a. SaaS Cannibalisation We’re seeing this happen already in a few areas: Typeform taking on SurveyMonkey Pipedrive taking on SFDC Slack taking on Yammer, Skype The innovation catalyzing the disruption of legacy SaaS will likely have to do with shifts in UI or UX, such as a shift to voice or chat UI. Automation is also likely to play a large role. Companies that figure out how AI can perform part of functions like customer service, sales, or bookkeeping, could be highly disruptive to incumbent SaaS players. Conclusion The “SaaS Gold Rush” isn’t over — it’s evolving, finding new markets, models, and advantages. The latest generation of SaaS startups are tapping into new verticals, inventing new categories made possible by new technologies, and iterating on existing “legacy” SaaS solutions.The low hanging fruit (if it ever existed) is gone and the competition is so intense the opportunity to “strike gold” might be narrower, but can be just as real. What remains to be seen is how much of the market will be taken by startups being seed funded today versus one of the public SaaS or top 300 private cloud companies (some listed here are now acquired or public). That’s how gold rushes go. The possibility of striking it rich draws all of the hopefuls and upstarts to the field — but only a few will truly find success. The incumbent SaaS companies still have relatively modern technology stacks and the global sales and marketing teams to secure their current hold on the market. But if SaaS startups can innovate in such a way to disrupt this hold, as previous generations have done before, then the sky’s the limit.

<sys> [INST] Understanding the “SaaS Gold Rush” [/INST] I’m going to preface this article by stating that we should all be skeptical of industry commentary like this. They have a tendency to generalise and imply that we’re unable to set new precedence, which is not the case. Anyone fortunate enough to work in our industry has the potential to do great new things, regardless of any wider industry trends. Salesforce is 17 years old From the birth of SaaS, we’ve seen three generations take shape, and we’re currently in the third. Even in the second generation, founders sometimes didn’t realize that there could be such a huge opportunity ahead of them. Here’s an early email exchange between Zendesk co-founder Alexander Aghassipour, and Zendesk’s angel investor Christoph Janz, discussing their Series A round. The first message is from Aghassipour, the second from Janz. Source: Christoph Janz’s blog, The Angel VC. And disclosure: both Christoph and Alexander are investors in ChartMogul. This is a founder of Zendesk, at the point when the company has ~1,000 customers, doubting that they could grow to be a huge company. Now, in hindsight, it seems inevitable of course. We’ve seen Zendesk grow to having over 80,000 customers, all while SaaS steadily takes over the software industry. But it seems, at this point in time, we’re questioning the opportunity in SaaS again. Nearly all new business software being built today is SaaS. But in conversations amongst peers and in articles on Medium, people are asking, “Is the SaaS gold rush over?” The answer is no. There are still enormous, unrealised opportunities ahead for SaaS. [Source: Bessemer Ventures] “IDC expects cloud software will grow to surpass $112.8 billion by 2019 at a compound annual growth rate (CAGR) of 18.3%. SaaS delivery will significantly outpace traditional software product delivery, growing nearly five times faster than the traditional software market.” – IDC So you could say the gold rush in SaaS can’t be over — we’ve only got 30% of the market and it’s growing like crazy. We’re definitely not at peak SaaS. So the more apt question is: How much of the market that’s still up for grabs is going to be taken by new SaaS companies, rather than soaked up by existing SaaS players? E.g. public companies such as Salesforce, Zendesk, HubSpot or Workday, or some of the larger private SaaS companies? Will SaaS companies being seed funded today be able to go big? The answer here is yes, but it’s tricky. The dynamics are completely different from what came before. To understand our current environment and the opportunities on the horizon, let’s look at the evolution of SaaS through these three generations. First Generation SaaS What drove it? The technology and business model of Software-as-a-Service was brand new and disruptive. It allowed upstart companies to encroach on territory held by on-premise giants. The value proposition was clear: SaaS removed the need for on-premise installations and ongoing maintenance. Who were some of the players? Salesforce in CRM, competing with Siebel, SAP and Microsoft NetSuite in ERP, competing with SAP and Oracle Advantages and disadvantages to being in this generation of SaaS The greatest advantage to being in the first generation of SaaS was that every vertical was a green field. But to take over some of that territory, these players faced the obstacle of educating customers on the SaaS model and convincing them away from long-standing, trusted on-premise solutions. What was the result? How did it change the game? As both customers and other software companies became aware of the benefits of the SaaS model, legacy vendors began releasing their own SaaS offerings, e.g. Quickbooks Online, sometimes via acquisitions. The SaaS model was here to stay, and it would keep spreading. Second Generation SaaS What drove it? Here things really started taking off. The second generation still rode a similar wave as the first. The SaaS value proposition still included that there is no installation or maintenance. When I joined Zendesk back in 2009, we still had to explain to many customers that there’s nothing to download, that it’s “Software as a Service”. This was a new concept for many buyers. But beyond this, new trends emerged that added even more value and fed a lot of growth for the second-generation companies. The second generation of SaaS ignited the consumerization of enterprise. The consumerization of enterprise is the ongoing shift in enterprise software towards lower cost and ease of use, trends pioneered in the consumer world. Users began demanding a friendly interface with a self-service and ease of use that legacy providers couldn’t adapt and provide quickly enough. So a new generation of SaaS rushed in “to satisfy this human desire for well-designed products.” (Forbes) “2014 is proving to be the year […] with a large wave of new-generation SaaS apps that really deliver on a delightful user experience. Employees and managers are taking notice of these new user-friendly tools, causing adoption to explode from the bottoms up.” – David Skok, ForEntrepreneurs.com The ability to deliver software via the web browser (and the release of frameworks such as Ruby on Rails) was the technology shift that helped ignite this trend. At this point, the value proposition expanded to include better design than existing solutions, a better user experience, more cost savings and simplicity. Who were some of the players? Zendesk in Customer Support Box in Storage Hubspot in Marketing Basecamp/37Signals for Project Management Advantages and disadvantages to being in this generation of SaaS A “consumerized” SaaS product is easy for potential customers to try, use, and buy on their own. As a result, the addressable market for these software categories is much broader than before. Second-generation SaaS could scale down further to the SMB and capture parts of the market that on-premise and first-generation SaaS couldn’t or wouldn’t. “The danger here for the Salesforce.com’s of the world is that corporate managers will choose which software to purchase based on what their direct reports use the most. Better interfaces are making it easier for startups and new companies to displace entrenched competitors.” – Darian Shirazi, Forbes in 2013 What was the result? How did it change things? The consumerization of the enterprise set new standards for UI/UX in enterprise software. First generation SaaS began adopting better design, or attempting to. But second-generation SaaS really took design seriously and combined this with a lower starting price. And ultimately, this combination of design and low cost opened up markets so that SaaS growth began to rocket past other software models. Third Generation SaaS — where we are now What’s driving it? Some of the main drivers of our current generation of SaaS are the further consumerization of enterprise and the low costs of both development and customer acquisition. New markets and customer types are opening up for SaaS solutions. You can organize them into the following three general buckets: 1. A few large categories still in transition. I can speak to the analytics market as that’s our field at ChartMogul. There’s no public pure-SaaS analytics company today. Tableau and Microstrategy, while have some cloud offerings, are still shipping Windows software. Perhaps this is because analytics has to work with fragmented and siloed data sets, which makes it harder to do a one-size-fits-all product; the onboarding and integration barrier is just higher. 2. Vertical SaaS. There are many verticals that were previously too small for a dedicated solution to make economic sense, but now — with the lower cost to develop and distribute software — they can support lucrative businesses. Clio for legal practices DocuTAP for medical practices ChartMogul (our company) for subscription businesses There is even a SaaS for goat herding! Product differentiation is difficult in major categories, so the easier (and perhaps necessary) route is to go to a virgin vertical or market that doesn’t have a SaaS solution yet. This generation is seeking out green fields of sorts, verticals where the main competitor is often just Excel. 3. New categories that are only possible because of the cloud. New communication and collaboration methods: Intercom, Slack APIs: Clearbit, Algolia and Contentful Advantages and disadvantages to being in this generation of SaaS There’s been a lot of venture capital flowing into early stage SaaS companies. The SaaS market is also larger and more connected, with a lot of word of mouth between startups, which makes it easier and cheaper to get to $1M in ARR than ever before. However, opportunities may appear to be smaller. Most of the market remains dominated by first and second generation SaaS. Crowded markets can mean less efficient growth, which means a rockier path to profitability and a longer shot at a successful exit. As a result, while it might be easier to get to $1M ARR than before, it may be harder to get to $100M, as at this point, there simply aren’t as many huge markets sitting there without a SaaS solution on offer. To murder a metaphor, there are fewer green fields but a lot of green gardens. Third generation SaaS companies will need to fight hard to find ways to break out of their cohort. How are things changing? This generation is shaping up to be the true consumerization of enterprise. Many first and even second generation SaaS still have poor UX and a high price. They were easier to use and cheaper than their original on-premise competitors. But the majority of these early SaaS companies still ignored the SMB space and instead focused upmarket, the more profitable end, but where elegant design is usually neglected. Today’s SaaS is made for the “everyman” company, with pricing levels that favor the customer and suit practically any budget. Also, on the other hand, the rise of API-based SaaS has given way to a whole new breed of product, one without any visual UI at all. Beyond third generation SaaS: what’s the next frontier? More vertical SaaS Most new SaaS companies I’ve seen in the last couple of years are vertical SaaS. SaaS products today are much cheaper to build and distribute than previously, so one can now launch a vertical SaaS in almost any industry and have it be a viable small or medium-sized business, and a few will almost certainly scale into large organisations. We’ve still only scratched the surface of what’s possible. There are many untouched or unsaturated verticals, markets that are only starting to transition to SaaS, such as education. Mobile-first SaaS Very few mobile-first SaaS companies really exist yet. At ChartMogul we’ve asked whether desktop will remain king, or if a device-centric view is even relevant today, given the omnipresent nature of web services. For now there are mobile-first SaaS solutions for the construction and engineering industries, such as Closeout from Bridgit — for work and project management that must be done on the go. But whether a SaaS company can truly scale in mobile-first remains to be seen. Innovating on existing legacy SaaS, a.k.a. SaaS Cannibalisation We’re seeing this happen already in a few areas: Typeform taking on SurveyMonkey Pipedrive taking on SFDC Slack taking on Yammer, Skype The innovation catalyzing the disruption of legacy SaaS will likely have to do with shifts in UI or UX, such as a shift to voice or chat UI. Automation is also likely to play a large role. Companies that figure out how AI can perform part of functions like customer service, sales, or bookkeeping, could be highly disruptive to incumbent SaaS players. Conclusion The “SaaS Gold Rush” isn’t over — it’s evolving, finding new markets, models, and advantages. The latest generation of SaaS startups are tapping into new verticals, inventing new categories made possible by new technologies, and iterating on existing “legacy” SaaS solutions.The low hanging fruit (if it ever existed) is gone and the competition is so intense the opportunity to “strike gold” might be narrower, but can be just as real. What remains to be seen is how much of the market will be taken by startups being seed funded today versus one of the public SaaS or top 300 private cloud companies (some listed here are now acquired or public). That’s how gold rushes go. The possibility of striking it rich draws all of the hopefuls and upstarts to the field — but only a few will truly find success. The incumbent SaaS companies still have relatively modern technology stacks and the global sales and marketing teams to secure their current hold on the market. But if SaaS startups can innovate in such a way to disrupt this hold, as previous generations have done before, then the sky’s the limit. </sys

Advanced Subscription Analytics for Recurly. With a couple of clicks you can import all your subscription data from Recurly into ChartMogul and get a complete picture of your recurring revenue metrics. Plus all new activity in your Recurly account will by synced to ChartMogul in real-time. This gives Recurly customers access to key metrics like MRR, LTV, Churn rates and other important analytics essential to every SaaS subscription business. This is what your dashboard will look like once your data is imported. We’re committed to supporting the Recurly community and this integration comes with the same functionality as our Stripe and Braintree integrations which have been available for some time. We’ve started sending invites out to Recurly users who signed up for our beta. As this is very new there may be bugs/issues we don’t know about yet – if you do encounter any problems importing your data from Recurly please email support@chartmogul.com and we’ll investigate right away. If you haven’t yet received a ChartMogul invite and would like to try out our Recurly integration please email support@chartmogul.com or Tweet @chartmogul and we’ll be happy to oblige. Existing ChartMogul users will see this additional option under Admin > Data load

[INST] Advanced Subscription Analytics for Recurly [/INST]

With a couple of clicks you can import all your subscription data from Recurly into ChartMogul and get a complete picture of your recurring revenue metrics. Plus all new activity in your Recurly account will by synced to ChartMogul in real-time. This gives Recurly customers access to key metrics like MRR, LTV, Churn rates and other important analytics essential to every SaaS subscription business. This is what your dashboard will look like once your data is imported. We’re committed to supporting the Recurly community and this integration comes with the same functionality as our Stripe and Braintree integrations which have been available for some time. We’ve started sending invites out to Recurly users who signed up for our beta. As this is very new there may be bugs/issues we don’t know about yet – if you do encounter any problems importing your data from Recurly please email support@chartmogul.com and we’ll investigate right away. If you haven’t yet received a ChartMogul invite and would like to try out our Recurly integration please email support@chartmogul.com or Tweet @chartmogul and we’ll be happy to oblige. Existing ChartMogul users will see this additional option under Admin > Data load

<sys> [INST] Advanced Subscription Analytics for Recurly [/INST] With a couple of clicks you can import all your subscription data from Recurly into ChartMogul and get a complete picture of your recurring revenue metrics. Plus all new activity in your Recurly account will by synced to ChartMogul in real-time. This gives Recurly customers access to key metrics like MRR, LTV, Churn rates and other important analytics essential to every SaaS subscription business. This is what your dashboard will look like once your data is imported. We’re committed to supporting the Recurly community and this integration comes with the same functionality as our Stripe and Braintree integrations which have been available for some time. We’ve started sending invites out to Recurly users who signed up for our beta. As this is very new there may be bugs/issues we don’t know about yet – if you do encounter any problems importing your data from Recurly please email support@chartmogul.com and we’ll investigate right away. If you haven’t yet received a ChartMogul invite and would like to try out our Recurly integration please email support@chartmogul.com or Tweet @chartmogul and we’ll be happy to oblige. Existing ChartMogul users will see this additional option under Admin > Data load </sys

Keeping your product alive, with Intercom’s Des Traynor. Intercom has 10K+ customers, $10s of millions in revenue, and $116M raised. How can your company get there, too? It has to stay alive. “Make it work, make it grow, keep it relevant.” That was the topic of Des Traynor’s keynote talk in Berlin, his only European visit on Inside Intercom’s World Tour. From the stage of the beautiful Delphi Theater, Des — co-founder, Chief Strategy Officer and VP Marketing at Intercom — laid out survival guidelines for any product in today’s evolving tech scene. His motivation is simple. “We didn’t come this far, to only come this far.” No matter how far your company has come, your product will always face threats of disruption, of being made obsolete. And it’s imperative that founders, execs, anyone who cares about the product, to stay honest about this fact. Des admitted it to the crowd. “It’s when you’re at your most successful point that you feel most vulnerable.” Ironic, right? But you know what happens when you rest on your laurels… You get taken down. As such, nearly all key points of keeping a product alive came down to the character of the team behind the product itself. It’s essential for any product team, at any scale of company, to embody these three things: Self and industry awareness Forward thinking Decisive action Self and industry awareness “There’s no email from YC telling you it’s over.” Shifts in tech are subtle, he says. If you’re not staying attuned to every move in the industry and shift of your customer’s needs, then your product is already obsolete. You must pay close attention to the new technologies creeping up behind you, even if you are wildly outperforming them at the moment. Because those are the ones who will disrupt you. Without that awareness and attention — taking innovators and upcomers seriously — you’ll be swiftly overtaken. Des inverted a famous Gandhi quote to articulate his point: Des pointed to SMS to Garmin, which was an industry leader up until 2007, and which now sustains itself merely by selling data to the companies that defeated them. And another great example: SMS vs. WhatsApp. The API trend is a perfect example of how subtle shifts can compound to topple industries. Now so many APIs exist that brand new companies can use them as building blocks to tower over everyone else. Des explained how someone could integrate Stripe, Shopify, and Postmates, and voila — “incorporate and run a same day delivery online store in 30 minutes.” Alex MacCaw, CEO of Clearbit, recently made the same point about Uber, which was initially build on four APIs. If the right APIs are “in place and you can build on top of them, that’s when you can build the world’s biggest company,” Alex says. Forward thinking “The present is the past.” Don’t base your product decisions on how your customers act today; base the decisions on how your customers will act tomorrow. If you’re thinking about today, then your product is already obsolete. Founders and product teams must constantly ask themselves: “Does [this technology] make it cheaper, faster, or easier for our customers to make progress in their lives?” Decisive action “Customers don’t wait around while you’re writing your JIRA tickets.” Move quickly; speed is key. “Good enough” is good for now, if you can make a product improvement immediately. If you’re waiting for some element to be perfect, then your product is already obsolete. So on this note, he advises to not discount a product because of poor design; it could still solve a problem for you in an amazing way. On the other hand, some products can “be polished as hell,” but not actually be that useful. Other things to keep in mind to keep your product alive Cost is about more than money For your customers, cost includes any time and effort spent getting to a successful use of your product. e.g.- training employees, educating customers. It’s all an investment for them. Use a UI your customers already know Customers can either jump right in and be familiar with what you’re offering, or they can have to learn it all from scratch. “That’s why good design is propagated over and over.” While you’re busy reinventing the wheel, your customers are moving on. Your product is a system, not a destination “This is a post-app world.” It’s not just a set of screens that you’re solving for; it’s disseminating information to your customer. It’s a matter of how, when, and where your customer interacts with your product. With the system model, change is less threatening, because you can adapt and expand. If you’re interested in this discussion around moving beyond device-centric product design, take a look at Why Desktop is Still King. So, stay fiercely honest with yourself about your product, stay vigilant about innovating it, and of course — stay hungry. And if you haven’t had the pleasure of attending a night of Inside Intercom’s World Tour, check out their schedule.

[INST] Keeping your product alive, with Intercom’s Des Traynor [/INST]

Intercom has 10K+ customers, $10s of millions in revenue, and $116M raised. How can your company get there, too? It has to stay alive. “Make it work, make it grow, keep it relevant.” That was the topic of Des Traynor’s keynote talk in Berlin, his only European visit on Inside Intercom’s World Tour. From the stage of the beautiful Delphi Theater, Des — co-founder, Chief Strategy Officer and VP Marketing at Intercom — laid out survival guidelines for any product in today’s evolving tech scene. His motivation is simple. “We didn’t come this far, to only come this far.” No matter how far your company has come, your product will always face threats of disruption, of being made obsolete. And it’s imperative that founders, execs, anyone who cares about the product, to stay honest about this fact. Des admitted it to the crowd. “It’s when you’re at your most successful point that you feel most vulnerable.” Ironic, right? But you know what happens when you rest on your laurels… You get taken down. As such, nearly all key points of keeping a product alive came down to the character of the team behind the product itself. It’s essential for any product team, at any scale of company, to embody these three things: Self and industry awareness Forward thinking Decisive action Self and industry awareness “There’s no email from YC telling you it’s over.” Shifts in tech are subtle, he says. If you’re not staying attuned to every move in the industry and shift of your customer’s needs, then your product is already obsolete. You must pay close attention to the new technologies creeping up behind you, even if you are wildly outperforming them at the moment. Because those are the ones who will disrupt you. Without that awareness and attention — taking innovators and upcomers seriously — you’ll be swiftly overtaken. Des inverted a famous Gandhi quote to articulate his point: Des pointed to SMS to Garmin, which was an industry leader up until 2007, and which now sustains itself merely by selling data to the companies that defeated them. And another great example: SMS vs. WhatsApp. The API trend is a perfect example of how subtle shifts can compound to topple industries. Now so many APIs exist that brand new companies can use them as building blocks to tower over everyone else. Des explained how someone could integrate Stripe, Shopify, and Postmates, and voila — “incorporate and run a same day delivery online store in 30 minutes.” Alex MacCaw, CEO of Clearbit, recently made the same point about Uber, which was initially build on four APIs. If the right APIs are “in place and you can build on top of them, that’s when you can build the world’s biggest company,” Alex says. Forward thinking “The present is the past.” Don’t base your product decisions on how your customers act today; base the decisions on how your customers will act tomorrow. If you’re thinking about today, then your product is already obsolete. Founders and product teams must constantly ask themselves: “Does [this technology] make it cheaper, faster, or easier for our customers to make progress in their lives?” Decisive action “Customers don’t wait around while you’re writing your JIRA tickets.” Move quickly; speed is key. “Good enough” is good for now, if you can make a product improvement immediately. If you’re waiting for some element to be perfect, then your product is already obsolete. So on this note, he advises to not discount a product because of poor design; it could still solve a problem for you in an amazing way. On the other hand, some products can “be polished as hell,” but not actually be that useful. Other things to keep in mind to keep your product alive Cost is about more than money For your customers, cost includes any time and effort spent getting to a successful use of your product. e.g.- training employees, educating customers. It’s all an investment for them. Use a UI your customers already know Customers can either jump right in and be familiar with what you’re offering, or they can have to learn it all from scratch. “That’s why good design is propagated over and over.” While you’re busy reinventing the wheel, your customers are moving on. Your product is a system, not a destination “This is a post-app world.” It’s not just a set of screens that you’re solving for; it’s disseminating information to your customer. It’s a matter of how, when, and where your customer interacts with your product. With the system model, change is less threatening, because you can adapt and expand. If you’re interested in this discussion around moving beyond device-centric product design, take a look at Why Desktop is Still King. So, stay fiercely honest with yourself about your product, stay vigilant about innovating it, and of course — stay hungry. And if you haven’t had the pleasure of attending a night of Inside Intercom’s World Tour, check out their schedule.

<sys> [INST] Keeping your product alive, with Intercom’s Des Traynor [/INST] Intercom has 10K+ customers, $10s of millions in revenue, and $116M raised. How can your company get there, too? It has to stay alive. “Make it work, make it grow, keep it relevant.” That was the topic of Des Traynor’s keynote talk in Berlin, his only European visit on Inside Intercom’s World Tour. From the stage of the beautiful Delphi Theater, Des — co-founder, Chief Strategy Officer and VP Marketing at Intercom — laid out survival guidelines for any product in today’s evolving tech scene. His motivation is simple. “We didn’t come this far, to only come this far.” No matter how far your company has come, your product will always face threats of disruption, of being made obsolete. And it’s imperative that founders, execs, anyone who cares about the product, to stay honest about this fact. Des admitted it to the crowd. “It’s when you’re at your most successful point that you feel most vulnerable.” Ironic, right? But you know what happens when you rest on your laurels… You get taken down. As such, nearly all key points of keeping a product alive came down to the character of the team behind the product itself. It’s essential for any product team, at any scale of company, to embody these three things: Self and industry awareness Forward thinking Decisive action Self and industry awareness “There’s no email from YC telling you it’s over.” Shifts in tech are subtle, he says. If you’re not staying attuned to every move in the industry and shift of your customer’s needs, then your product is already obsolete. You must pay close attention to the new technologies creeping up behind you, even if you are wildly outperforming them at the moment. Because those are the ones who will disrupt you. Without that awareness and attention — taking innovators and upcomers seriously — you’ll be swiftly overtaken. Des inverted a famous Gandhi quote to articulate his point: Des pointed to SMS to Garmin, which was an industry leader up until 2007, and which now sustains itself merely by selling data to the companies that defeated them. And another great example: SMS vs. WhatsApp. The API trend is a perfect example of how subtle shifts can compound to topple industries. Now so many APIs exist that brand new companies can use them as building blocks to tower over everyone else. Des explained how someone could integrate Stripe, Shopify, and Postmates, and voila — “incorporate and run a same day delivery online store in 30 minutes.” Alex MacCaw, CEO of Clearbit, recently made the same point about Uber, which was initially build on four APIs. If the right APIs are “in place and you can build on top of them, that’s when you can build the world’s biggest company,” Alex says. Forward thinking “The present is the past.” Don’t base your product decisions on how your customers act today; base the decisions on how your customers will act tomorrow. If you’re thinking about today, then your product is already obsolete. Founders and product teams must constantly ask themselves: “Does [this technology] make it cheaper, faster, or easier for our customers to make progress in their lives?” Decisive action “Customers don’t wait around while you’re writing your JIRA tickets.” Move quickly; speed is key. “Good enough” is good for now, if you can make a product improvement immediately. If you’re waiting for some element to be perfect, then your product is already obsolete. So on this note, he advises to not discount a product because of poor design; it could still solve a problem for you in an amazing way. On the other hand, some products can “be polished as hell,” but not actually be that useful. Other things to keep in mind to keep your product alive Cost is about more than money For your customers, cost includes any time and effort spent getting to a successful use of your product. e.g.- training employees, educating customers. It’s all an investment for them. Use a UI your customers already know Customers can either jump right in and be familiar with what you’re offering, or they can have to learn it all from scratch. “That’s why good design is propagated over and over.” While you’re busy reinventing the wheel, your customers are moving on. Your product is a system, not a destination “This is a post-app world.” It’s not just a set of screens that you’re solving for; it’s disseminating information to your customer. It’s a matter of how, when, and where your customer interacts with your product. With the system model, change is less threatening, because you can adapt and expand. If you’re interested in this discussion around moving beyond device-centric product design, take a look at Why Desktop is Still King. So, stay fiercely honest with yourself about your product, stay vigilant about innovating it, and of course — stay hungry. And if you haven’t had the pleasure of attending a night of Inside Intercom’s World Tour, check out their schedule. </sys

How to Build a (Remote) Customer Success Team for a SaaS Company. Editor note: This article is based on a presentation Ingmar gave at SaaS Movement. I was the first full-time customer success hire at ChartMogul. 4 years later, we’re a team of 7 people split between 3 sub-teams (customer advocacy, solutions engineering, and success management) and we help over 2,000 great companies measure, understand, and grow their recurring revenue. Along the way, I’ve learned some things about building a great (remote) customer success team and in this article, I’m going to share them with you. The amazing people who make ChartMogul possible. Photo from 2018’s offsite in Croatia. Today ChartMogul is a team of 35 people split between 15 different countries. Last year we decided to switch the company to a fully distributed team. The customer success team, however, has been designed with remote in mind from the beginning. I’ll share some of the reasons for that decision below. Before we get to it, I would like to tell you a bit about how we built our customer success team and how we ensured it works well with the rest of the company. This article is divided into three sections: The first one is on building a customer success organization; Then I will discuss aligning departments with customer success; And in the last part, I will talk about working effectively as a distributed team. Before I get into organizational building, I would like to make the connection between SaaS and customer success. Why customer success is so important for SaaS companies The subscription business is about building long-term relationships with your customers. The value of this relationship is realized over many months and even years. Retention is the key factor for success in subscription businesses. If you successfully manage this relationship, you can attain a predictable stable revenue growth that leads to a large ARR. Putting customer success at the heart of your organization will enable this growth. Every department in your business can contribute to empowering your customers to achieve their desired outcomes. For example, the content team at ChartMogul contributes to customer success by educating our users on best practices on how to grow their business using SaaS metrics. Building a customer success team in a SaaS organization When I first started at ChartMogul, I was based in Berlin. The majority of our customers were in North America. This meant that I had to shift my hours in order to be responsive. I started working late in the evening so that I can support the East Coast time zone. This is not a humblebrag about the struggles of startup life. Rather, it was the experience that led me to the realization that we needed to hire people remotely from the beginning in order to be able to bridge these different time zones. And one thing that was a key learning for me there was to manage a team well it was really important to pick overlap. So we hired into both directions but I always had enough overlap into the time zones, I was working with, so I could easily talk to my team. Integrate continuous feedback loops Another area that that really helped (and is still helping us) scale our customer success effort at the beginning was to integrate continuous feedback loops into our workflows — both in an automated and in a manual way. Running surveys like NPS and more transactional surveys like CSAT will help you improve your customer experience and understand it and also see where you are under-delivering. These feedback loops also help you to get to product/market fit faster. Having some manual ones as well — like a really solid feature request workflow (so that your roadmap can be adapted quickly) — will accelerate this. Then what we do also is to have a feedback channel so we collect qualitative information from our customers and pipe this in to share it with the rest of the company. Lastly, we bring product managers into calls with our largest customers. This helps us to see where our customers are pushing the boundaries of what is currently possible with our software. It also helps us understand where our next 100 customers will come from. Enable self-service with great documentation The next area that I think is an amazing return on investment that is often overlooked is to really double down on documentation. We did this early on, we have a fairly technical product, and we look to companies like Slack and Stripe and see how they are serving their customers with their documentation. Our API and documentation allow customers to build complex integrations with ChartMogul We have a help center with over 100 articles, and we also have very detailed API documentation, which is in a separate developer doc. We put a lot of effort into maintaining this — initially, it was really hard to make the time to build this up, but the discipline has paid off many times over. A few months after relaunching this, we saw our support volume decrease rapidly for our self-service customers and the onboarding improved greatly. Nail down your performance metrics Another area that I would encourage you to focus on is to build up performance metrics for the different parts of your team. Think about the behavior you want to encourage when coming up with metrics for your team I had mentioned our team is split into three parts. We track high-level team metrics and individual contributor metrics. Once you start measuring these KPIs you can set goals for different parts of your team. It makes it easy to hold everyone on the team (including managers) accountable for their achievements and to measure performance in an objective way. This really helps when managing your team, because the expectations are very clear. These metrics should drive your growth and they should help improve your customer experience. The metrics you pick to track would be specific to your company, but if you’re at the beginning and you are a cross-functional team, you might just want to pick one or two that really move the needle. For us at the beginning, it was really important to be very responsive to customer requests for help and that’s why we focused on First Reply Time. When we started tracking, we were doing alright — we didn’t really have the people on our team to be able to commit to an ambitious service-level agreement (SLA). Once our team got large enough, we were at a point where we could say “Okay, we’re going to set an ambitious goal of having a first reply time during business hours in Europe and the US of less than one hour.” Setting an ambitious goal for First reply time allowed us to start making progress quickly. We achieved this goal within two months, and we have been under one hour ever since. Today, we’re actually closer to 30 minutes for our first reply. This experience was really energizing for our team, so we took the learnings and applied service level agreements to all parts of the team. We would look not only at the first reply time of our frontline advocacy team, but also the next reply time, and also at what happens with escalations, etc. It goes even beyond the customer success team — we have metrics and SLAs that govern what happens when a customer communication goes to the product or the engineering team. All this has really helped us improve the customer experience dramatically. But it wouldn’t have been possible without having buy-in from all parts of the company. In the next section, I’d like to share some learnings from aligning departments with customer success. Aligning departments with customer success Customer success is really an organizational level goal and getting your CEO and the different departments on board will be necessary to succeed in it. One way to do this is to build a data-driven company culture. Everybody cares about growth, so tracking metrics such as MRR, churn rates, retention rates, and then seeing how each part of the team can impact these different metrics will actually motivate the team to help you. For us, this was about deeply understanding churn. Churn is something that often is assigned to be owned by customer success but I would actually argue that churn is a company-wide metric. Tweet this quote Because very often, developing the product further is what actually leads to reducing churn. If you have really great product/market fit your churn will also automatically be lower. So it’s not just great (customer) service that will lower churn. We do monthly and quarterly churn reporting and then segment the churn reasons based on self-service customers and managed accounts (which for us start at $1000 MRR or higher). We map out retention-related activities for each department and then we’re driving these initiatives in order to lower churn. Onboard customers with product marketing One departmental activity that led to improving customer success was through our content marketing. At ChartMogul content marketing was something that we did from the beginning, and it actually was a really inexpensive way to attract our first customers by establishing ourselves as an authority in SaaS metrics. We published a lot of useful content like our SaaS metrics cheat sheets that we then could use in our onboarding. We would include this content in our onboarding emails and lead nurturing campaigns. We also injected our content into notification emails that we send out to customers to notify them of MRR changes: Every email we send out is a chance to continue onboarding and educating customers. We send out millions of those emails each month — our goal with adding our content at the end is to help customers with continuous education and onboarding. Turn your sales team into customer champions The sales team has also been a great source of inspiration and improvement for our customer success department. At ChartMogul, the sales team owns the relationship with a prospect up to the point of sale and then customers are funneled into self-service or managed accounts. We designed a training program for our sales team that they run through when they start at ChartMogul. As part of this training, new team members assume the role of a customer and go through the whole buying process — integrating the software, adding their data, etc. During the program, they will also be asked to do customer support and oversee all other critical functions of customer success to get hands-on experience of our work. The purpose of this is to train them on how to sell on the full value of the product — not just the software, but how our team can help customers achieve their goals. This is an ongoing process. We do product training on a weekly basis with our team members and these are run by different members of the success team. Example of the training sessions run by our customer success team. It’s a collaborative exercise for everybody from the success team — the whole sales team attends, and also the rest of the company is encouraged to participate in the sessions in order to learn more about the product. This helps at conferences where you can have someone from HR or your finance team speak to a prospect — if they understand the intricacies offered, they can be promoters of your product wherever they go. Get product and engineering in front of customers The last area, I’d like to share is about getting product and engineering teams involved with your customers. For us, that is bringing them closer, by taking them to conferences. Marco, our head of engineering, talking to prospects at SaaStock 2018 So here is our head of engineering talking to prospects to learn about their requirements and what outcomes they’re trying to achieve. It changes the dynamics in our engineering team to also be customer-centric. Working effectively as a distributed customer success team In the last section, I’d like to talk to you about working effectively as a distributed team. This will also be relevant to you if you just have a satellite office or you have just a few people working remotely. The challenge of working with a remote team is predominantly around communication and collaboration. A lot of that can happen more organically in an office setting but when your team members are remote this can become challenging and it requires putting more thought into those areas. For us, it meant to be really disciplined about how we communicate. Roundups, standups, and one-on-ones We silo stand-ups to the specific sub-departments in our success team so that every session is relevant and we do those on a weekly basis. We also have one-on-ones at a higher frequency than we used to do when people were in the office with us. Depending on the role, this could be weekly or bi-weekly. This helps to surface problem areas because if someone is unhappy about something or really needs help, they might not come to you directly. These one-on-one calls allow us to surface and address such issues quickly. The last piece — this is the cornerstone that has really unified our team to create a singular mission — is to do success roundups every month. These happen as a Zoom call and they are also recorded for those team members who cannot attend. An example of the agenda of a monthly roundup session. We put this together every single month — we look at our performance metrics, how we did in the last month, and if we want to update our goals and/or our policies. We also do goal setting based on tasks that are assigned to the team as additional projects. In addition to operational things and we also like to play a game or do something fun together, which is something that usually falls short in a remote setting. Clearly defined processes The other area around collaboration is to design clearly defined processes. I think it’s important to keep your process design simple for the stage of your startup. A lot of the customer success content that you will find on the internet targets large businesses and suggests practices that may introduce unnecessary complexity. It is important to implement processes that align with your growth stage and team size. Keeping things simple reduces touchpoints and generally results in better customer experience. We have this for each subsection of our team for these three teams to have their own section within Notion (which we use for our internal documentation). Our Notion board captures every piece of knowledge around customer success. We found that this helps to create really clear expectations because when you work in a remote team, you can’t always speak to someone in real-time, because they might not be online. So, having things documented helps people make their own decisions when they’re not able to talk to someone. Goal-oriented task setting We also do goal-oriented task setting on a monthly basis. This is in addition to the operational work that we do. Projects like this are a great way to create diversity in the work of the customer success team. We use a Kanban board and we have a backlog that comes from the rest of the company and also from our team and from our customers. We pick the projects we want to work on a monthly basis and then go through them and it has helped us achieve over 90% of these every single month. This has been a great way to build a sense of ownership and to also make roles such as frontline customer support more fun when you can also do some project work on the side. Have fun together The last area, I would like to share is to make time to meet your team in person. Fly in your remote team members to work with you at the office. Consider doing something like an offsite to bring the whole company together. This really helps to rally your team around the vision, and you can do sessions and team-building work that will really build the relationships within your team. On the left here we have some of our success team working together in Berlin. The photo on the right is from Croatia — in 2018 we chartered a boat there and had a great time going to some beaches. This year we’re going to Mallorca where we have rented a resort. Of course, this is something where you have to keep your budget in mind of what you can do at the stage where you’re at, but you can get creative there: like having people share rooms or picking a destination that’s not too expensive. One thing is important to note: the benefit of getting your team together and having them bond is times what you’ll be paying to fly and host everyone at the same place for a week. Customer success will be your competitive advantage If there’s just one thing you can walk away with, I would like it to be this one — start simple and evolve your team through fast feedback loops. Define goals and actionable performance metrics for each person and team; Establish a culture of customer success across your entire organization; And lastly, create clear processes that empower your distributed team. In a SaaS startup, customer success will be your competitive advantage. Thank you very much. You can find me on Twitter or LinkedIn. This is a very high-level article, so if you’re interested in talking deeper about one of these subjects, please get in touch.

[INST] How to Build a (Remote) Customer Success Team for a SaaS Company [/INST]

Editor note: This article is based on a presentation Ingmar gave at SaaS Movement. I was the first full-time customer success hire at ChartMogul. 4 years later, we’re a team of 7 people split between 3 sub-teams (customer advocacy, solutions engineering, and success management) and we help over 2,000 great companies measure, understand, and grow their recurring revenue. Along the way, I’ve learned some things about building a great (remote) customer success team and in this article, I’m going to share them with you. The amazing people who make ChartMogul possible. Photo from 2018’s offsite in Croatia. Today ChartMogul is a team of 35 people split between 15 different countries. Last year we decided to switch the company to a fully distributed team. The customer success team, however, has been designed with remote in mind from the beginning. I’ll share some of the reasons for that decision below. Before we get to it, I would like to tell you a bit about how we built our customer success team and how we ensured it works well with the rest of the company. This article is divided into three sections: The first one is on building a customer success organization; Then I will discuss aligning departments with customer success; And in the last part, I will talk about working effectively as a distributed team. Before I get into organizational building, I would like to make the connection between SaaS and customer success. Why customer success is so important for SaaS companies The subscription business is about building long-term relationships with your customers. The value of this relationship is realized over many months and even years. Retention is the key factor for success in subscription businesses. If you successfully manage this relationship, you can attain a predictable stable revenue growth that leads to a large ARR. Putting customer success at the heart of your organization will enable this growth. Every department in your business can contribute to empowering your customers to achieve their desired outcomes. For example, the content team at ChartMogul contributes to customer success by educating our users on best practices on how to grow their business using SaaS metrics. Building a customer success team in a SaaS organization When I first started at ChartMogul, I was based in Berlin. The majority of our customers were in North America. This meant that I had to shift my hours in order to be responsive. I started working late in the evening so that I can support the East Coast time zone. This is not a humblebrag about the struggles of startup life. Rather, it was the experience that led me to the realization that we needed to hire people remotely from the beginning in order to be able to bridge these different time zones. And one thing that was a key learning for me there was to manage a team well it was really important to pick overlap. So we hired into both directions but I always had enough overlap into the time zones, I was working with, so I could easily talk to my team. Integrate continuous feedback loops Another area that that really helped (and is still helping us) scale our customer success effort at the beginning was to integrate continuous feedback loops into our workflows — both in an automated and in a manual way. Running surveys like NPS and more transactional surveys like CSAT will help you improve your customer experience and understand it and also see where you are under-delivering. These feedback loops also help you to get to product/market fit faster. Having some manual ones as well — like a really solid feature request workflow (so that your roadmap can be adapted quickly) — will accelerate this. Then what we do also is to have a feedback channel so we collect qualitative information from our customers and pipe this in to share it with the rest of the company. Lastly, we bring product managers into calls with our largest customers. This helps us to see where our customers are pushing the boundaries of what is currently possible with our software. It also helps us understand where our next 100 customers will come from. Enable self-service with great documentation The next area that I think is an amazing return on investment that is often overlooked is to really double down on documentation. We did this early on, we have a fairly technical product, and we look to companies like Slack and Stripe and see how they are serving their customers with their documentation. Our API and documentation allow customers to build complex integrations with ChartMogul We have a help center with over 100 articles, and we also have very detailed API documentation, which is in a separate developer doc. We put a lot of effort into maintaining this — initially, it was really hard to make the time to build this up, but the discipline has paid off many times over. A few months after relaunching this, we saw our support volume decrease rapidly for our self-service customers and the onboarding improved greatly. Nail down your performance metrics Another area that I would encourage you to focus on is to build up performance metrics for the different parts of your team. Think about the behavior you want to encourage when coming up with metrics for your team I had mentioned our team is split into three parts. We track high-level team metrics and individual contributor metrics. Once you start measuring these KPIs you can set goals for different parts of your team. It makes it easy to hold everyone on the team (including managers) accountable for their achievements and to measure performance in an objective way. This really helps when managing your team, because the expectations are very clear. These metrics should drive your growth and they should help improve your customer experience. The metrics you pick to track would be specific to your company, but if you’re at the beginning and you are a cross-functional team, you might just want to pick one or two that really move the needle. For us at the beginning, it was really important to be very responsive to customer requests for help and that’s why we focused on First Reply Time. When we started tracking, we were doing alright — we didn’t really have the people on our team to be able to commit to an ambitious service-level agreement (SLA). Once our team got large enough, we were at a point where we could say “Okay, we’re going to set an ambitious goal of having a first reply time during business hours in Europe and the US of less than one hour.” Setting an ambitious goal for First reply time allowed us to start making progress quickly. We achieved this goal within two months, and we have been under one hour ever since. Today, we’re actually closer to 30 minutes for our first reply. This experience was really energizing for our team, so we took the learnings and applied service level agreements to all parts of the team. We would look not only at the first reply time of our frontline advocacy team, but also the next reply time, and also at what happens with escalations, etc. It goes even beyond the customer success team — we have metrics and SLAs that govern what happens when a customer communication goes to the product or the engineering team. All this has really helped us improve the customer experience dramatically. But it wouldn’t have been possible without having buy-in from all parts of the company. In the next section, I’d like to share some learnings from aligning departments with customer success. Aligning departments with customer success Customer success is really an organizational level goal and getting your CEO and the different departments on board will be necessary to succeed in it. One way to do this is to build a data-driven company culture. Everybody cares about growth, so tracking metrics such as MRR, churn rates, retention rates, and then seeing how each part of the team can impact these different metrics will actually motivate the team to help you. For us, this was about deeply understanding churn. Churn is something that often is assigned to be owned by customer success but I would actually argue that churn is a company-wide metric. Tweet this quote Because very often, developing the product further is what actually leads to reducing churn. If you have really great product/market fit your churn will also automatically be lower. So it’s not just great (customer) service that will lower churn. We do monthly and quarterly churn reporting and then segment the churn reasons based on self-service customers and managed accounts (which for us start at $1000 MRR or higher). We map out retention-related activities for each department and then we’re driving these initiatives in order to lower churn. Onboard customers with product marketing One departmental activity that led to improving customer success was through our content marketing. At ChartMogul content marketing was something that we did from the beginning, and it actually was a really inexpensive way to attract our first customers by establishing ourselves as an authority in SaaS metrics. We published a lot of useful content like our SaaS metrics cheat sheets that we then could use in our onboarding. We would include this content in our onboarding emails and lead nurturing campaigns. We also injected our content into notification emails that we send out to customers to notify them of MRR changes: Every email we send out is a chance to continue onboarding and educating customers. We send out millions of those emails each month — our goal with adding our content at the end is to help customers with continuous education and onboarding. Turn your sales team into customer champions The sales team has also been a great source of inspiration and improvement for our customer success department. At ChartMogul, the sales team owns the relationship with a prospect up to the point of sale and then customers are funneled into self-service or managed accounts. We designed a training program for our sales team that they run through when they start at ChartMogul. As part of this training, new team members assume the role of a customer and go through the whole buying process — integrating the software, adding their data, etc. During the program, they will also be asked to do customer support and oversee all other critical functions of customer success to get hands-on experience of our work. The purpose of this is to train them on how to sell on the full value of the product — not just the software, but how our team can help customers achieve their goals. This is an ongoing process. We do product training on a weekly basis with our team members and these are run by different members of the success team. Example of the training sessions run by our customer success team. It’s a collaborative exercise for everybody from the success team — the whole sales team attends, and also the rest of the company is encouraged to participate in the sessions in order to learn more about the product. This helps at conferences where you can have someone from HR or your finance team speak to a prospect — if they understand the intricacies offered, they can be promoters of your product wherever they go. Get product and engineering in front of customers The last area, I’d like to share is about getting product and engineering teams involved with your customers. For us, that is bringing them closer, by taking them to conferences. Marco, our head of engineering, talking to prospects at SaaStock 2018 So here is our head of engineering talking to prospects to learn about their requirements and what outcomes they’re trying to achieve. It changes the dynamics in our engineering team to also be customer-centric. Working effectively as a distributed customer success team In the last section, I’d like to talk to you about working effectively as a distributed team. This will also be relevant to you if you just have a satellite office or you have just a few people working remotely. The challenge of working with a remote team is predominantly around communication and collaboration. A lot of that can happen more organically in an office setting but when your team members are remote this can become challenging and it requires putting more thought into those areas. For us, it meant to be really disciplined about how we communicate. Roundups, standups, and one-on-ones We silo stand-ups to the specific sub-departments in our success team so that every session is relevant and we do those on a weekly basis. We also have one-on-ones at a higher frequency than we used to do when people were in the office with us. Depending on the role, this could be weekly or bi-weekly. This helps to surface problem areas because if someone is unhappy about something or really needs help, they might not come to you directly. These one-on-one calls allow us to surface and address such issues quickly. The last piece — this is the cornerstone that has really unified our team to create a singular mission — is to do success roundups every month. These happen as a Zoom call and they are also recorded for those team members who cannot attend. An example of the agenda of a monthly roundup session. We put this together every single month — we look at our performance metrics, how we did in the last month, and if we want to update our goals and/or our policies. We also do goal setting based on tasks that are assigned to the team as additional projects. In addition to operational things and we also like to play a game or do something fun together, which is something that usually falls short in a remote setting. Clearly defined processes The other area around collaboration is to design clearly defined processes. I think it’s important to keep your process design simple for the stage of your startup. A lot of the customer success content that you will find on the internet targets large businesses and suggests practices that may introduce unnecessary complexity. It is important to implement processes that align with your growth stage and team size. Keeping things simple reduces touchpoints and generally results in better customer experience. We have this for each subsection of our team for these three teams to have their own section within Notion (which we use for our internal documentation). Our Notion board captures every piece of knowledge around customer success. We found that this helps to create really clear expectations because when you work in a remote team, you can’t always speak to someone in real-time, because they might not be online. So, having things documented helps people make their own decisions when they’re not able to talk to someone. Goal-oriented task setting We also do goal-oriented task setting on a monthly basis. This is in addition to the operational work that we do. Projects like this are a great way to create diversity in the work of the customer success team. We use a Kanban board and we have a backlog that comes from the rest of the company and also from our team and from our customers. We pick the projects we want to work on a monthly basis and then go through them and it has helped us achieve over 90% of these every single month. This has been a great way to build a sense of ownership and to also make roles such as frontline customer support more fun when you can also do some project work on the side. Have fun together The last area, I would like to share is to make time to meet your team in person. Fly in your remote team members to work with you at the office. Consider doing something like an offsite to bring the whole company together. This really helps to rally your team around the vision, and you can do sessions and team-building work that will really build the relationships within your team. On the left here we have some of our success team working together in Berlin. The photo on the right is from Croatia — in 2018 we chartered a boat there and had a great time going to some beaches. This year we’re going to Mallorca where we have rented a resort. Of course, this is something where you have to keep your budget in mind of what you can do at the stage where you’re at, but you can get creative there: like having people share rooms or picking a destination that’s not too expensive. One thing is important to note: the benefit of getting your team together and having them bond is times what you’ll be paying to fly and host everyone at the same place for a week. Customer success will be your competitive advantage If there’s just one thing you can walk away with, I would like it to be this one — start simple and evolve your team through fast feedback loops. Define goals and actionable performance metrics for each person and team; Establish a culture of customer success across your entire organization; And lastly, create clear processes that empower your distributed team. In a SaaS startup, customer success will be your competitive advantage. Thank you very much. You can find me on Twitter or LinkedIn. This is a very high-level article, so if you’re interested in talking deeper about one of these subjects, please get in touch.

<sys> [INST] How to Build a (Remote) Customer Success Team for a SaaS Company [/INST] Editor note: This article is based on a presentation Ingmar gave at SaaS Movement. I was the first full-time customer success hire at ChartMogul. 4 years later, we’re a team of 7 people split between 3 sub-teams (customer advocacy, solutions engineering, and success management) and we help over 2,000 great companies measure, understand, and grow their recurring revenue. Along the way, I’ve learned some things about building a great (remote) customer success team and in this article, I’m going to share them with you. The amazing people who make ChartMogul possible. Photo from 2018’s offsite in Croatia. Today ChartMogul is a team of 35 people split between 15 different countries. Last year we decided to switch the company to a fully distributed team. The customer success team, however, has been designed with remote in mind from the beginning. I’ll share some of the reasons for that decision below. Before we get to it, I would like to tell you a bit about how we built our customer success team and how we ensured it works well with the rest of the company. This article is divided into three sections: The first one is on building a customer success organization; Then I will discuss aligning departments with customer success; And in the last part, I will talk about working effectively as a distributed team. Before I get into organizational building, I would like to make the connection between SaaS and customer success. Why customer success is so important for SaaS companies The subscription business is about building long-term relationships with your customers. The value of this relationship is realized over many months and even years. Retention is the key factor for success in subscription businesses. If you successfully manage this relationship, you can attain a predictable stable revenue growth that leads to a large ARR. Putting customer success at the heart of your organization will enable this growth. Every department in your business can contribute to empowering your customers to achieve their desired outcomes. For example, the content team at ChartMogul contributes to customer success by educating our users on best practices on how to grow their business using SaaS metrics. Building a customer success team in a SaaS organization When I first started at ChartMogul, I was based in Berlin. The majority of our customers were in North America. This meant that I had to shift my hours in order to be responsive. I started working late in the evening so that I can support the East Coast time zone. This is not a humblebrag about the struggles of startup life. Rather, it was the experience that led me to the realization that we needed to hire people remotely from the beginning in order to be able to bridge these different time zones. And one thing that was a key learning for me there was to manage a team well it was really important to pick overlap. So we hired into both directions but I always had enough overlap into the time zones, I was working with, so I could easily talk to my team. Integrate continuous feedback loops Another area that that really helped (and is still helping us) scale our customer success effort at the beginning was to integrate continuous feedback loops into our workflows — both in an automated and in a manual way. Running surveys like NPS and more transactional surveys like CSAT will help you improve your customer experience and understand it and also see where you are under-delivering. These feedback loops also help you to get to product/market fit faster. Having some manual ones as well — like a really solid feature request workflow (so that your roadmap can be adapted quickly) — will accelerate this. Then what we do also is to have a feedback channel so we collect qualitative information from our customers and pipe this in to share it with the rest of the company. Lastly, we bring product managers into calls with our largest customers. This helps us to see where our customers are pushing the boundaries of what is currently possible with our software. It also helps us understand where our next 100 customers will come from. Enable self-service with great documentation The next area that I think is an amazing return on investment that is often overlooked is to really double down on documentation. We did this early on, we have a fairly technical product, and we look to companies like Slack and Stripe and see how they are serving their customers with their documentation. Our API and documentation allow customers to build complex integrations with ChartMogul We have a help center with over 100 articles, and we also have very detailed API documentation, which is in a separate developer doc. We put a lot of effort into maintaining this — initially, it was really hard to make the time to build this up, but the discipline has paid off many times over. A few months after relaunching this, we saw our support volume decrease rapidly for our self-service customers and the onboarding improved greatly. Nail down your performance metrics Another area that I would encourage you to focus on is to build up performance metrics for the different parts of your team. Think about the behavior you want to encourage when coming up with metrics for your team I had mentioned our team is split into three parts. We track high-level team metrics and individual contributor metrics. Once you start measuring these KPIs you can set goals for different parts of your team. It makes it easy to hold everyone on the team (including managers) accountable for their achievements and to measure performance in an objective way. This really helps when managing your team, because the expectations are very clear. These metrics should drive your growth and they should help improve your customer experience. The metrics you pick to track would be specific to your company, but if you’re at the beginning and you are a cross-functional team, you might just want to pick one or two that really move the needle. For us at the beginning, it was really important to be very responsive to customer requests for help and that’s why we focused on First Reply Time. When we started tracking, we were doing alright — we didn’t really have the people on our team to be able to commit to an ambitious service-level agreement (SLA). Once our team got large enough, we were at a point where we could say “Okay, we’re going to set an ambitious goal of having a first reply time during business hours in Europe and the US of less than one hour.” Setting an ambitious goal for First reply time allowed us to start making progress quickly. We achieved this goal within two months, and we have been under one hour ever since. Today, we’re actually closer to 30 minutes for our first reply. This experience was really energizing for our team, so we took the learnings and applied service level agreements to all parts of the team. We would look not only at the first reply time of our frontline advocacy team, but also the next reply time, and also at what happens with escalations, etc. It goes even beyond the customer success team — we have metrics and SLAs that govern what happens when a customer communication goes to the product or the engineering team. All this has really helped us improve the customer experience dramatically. But it wouldn’t have been possible without having buy-in from all parts of the company. In the next section, I’d like to share some learnings from aligning departments with customer success. Aligning departments with customer success Customer success is really an organizational level goal and getting your CEO and the different departments on board will be necessary to succeed in it. One way to do this is to build a data-driven company culture. Everybody cares about growth, so tracking metrics such as MRR, churn rates, retention rates, and then seeing how each part of the team can impact these different metrics will actually motivate the team to help you. For us, this was about deeply understanding churn. Churn is something that often is assigned to be owned by customer success but I would actually argue that churn is a company-wide metric. Tweet this quote Because very often, developing the product further is what actually leads to reducing churn. If you have really great product/market fit your churn will also automatically be lower. So it’s not just great (customer) service that will lower churn. We do monthly and quarterly churn reporting and then segment the churn reasons based on self-service customers and managed accounts (which for us start at $1000 MRR or higher). We map out retention-related activities for each department and then we’re driving these initiatives in order to lower churn. Onboard customers with product marketing One departmental activity that led to improving customer success was through our content marketing. At ChartMogul content marketing was something that we did from the beginning, and it actually was a really inexpensive way to attract our first customers by establishing ourselves as an authority in SaaS metrics. We published a lot of useful content like our SaaS metrics cheat sheets that we then could use in our onboarding. We would include this content in our onboarding emails and lead nurturing campaigns. We also injected our content into notification emails that we send out to customers to notify them of MRR changes: Every email we send out is a chance to continue onboarding and educating customers. We send out millions of those emails each month — our goal with adding our content at the end is to help customers with continuous education and onboarding. Turn your sales team into customer champions The sales team has also been a great source of inspiration and improvement for our customer success department. At ChartMogul, the sales team owns the relationship with a prospect up to the point of sale and then customers are funneled into self-service or managed accounts. We designed a training program for our sales team that they run through when they start at ChartMogul. As part of this training, new team members assume the role of a customer and go through the whole buying process — integrating the software, adding their data, etc. During the program, they will also be asked to do customer support and oversee all other critical functions of customer success to get hands-on experience of our work. The purpose of this is to train them on how to sell on the full value of the product — not just the software, but how our team can help customers achieve their goals. This is an ongoing process. We do product training on a weekly basis with our team members and these are run by different members of the success team. Example of the training sessions run by our customer success team. It’s a collaborative exercise for everybody from the success team — the whole sales team attends, and also the rest of the company is encouraged to participate in the sessions in order to learn more about the product. This helps at conferences where you can have someone from HR or your finance team speak to a prospect — if they understand the intricacies offered, they can be promoters of your product wherever they go. Get product and engineering in front of customers The last area, I’d like to share is about getting product and engineering teams involved with your customers. For us, that is bringing them closer, by taking them to conferences. Marco, our head of engineering, talking to prospects at SaaStock 2018 So here is our head of engineering talking to prospects to learn about their requirements and what outcomes they’re trying to achieve. It changes the dynamics in our engineering team to also be customer-centric. Working effectively as a distributed customer success team In the last section, I’d like to talk to you about working effectively as a distributed team. This will also be relevant to you if you just have a satellite office or you have just a few people working remotely. The challenge of working with a remote team is predominantly around communication and collaboration. A lot of that can happen more organically in an office setting but when your team members are remote this can become challenging and it requires putting more thought into those areas. For us, it meant to be really disciplined about how we communicate. Roundups, standups, and one-on-ones We silo stand-ups to the specific sub-departments in our success team so that every session is relevant and we do those on a weekly basis. We also have one-on-ones at a higher frequency than we used to do when people were in the office with us. Depending on the role, this could be weekly or bi-weekly. This helps to surface problem areas because if someone is unhappy about something or really needs help, they might not come to you directly. These one-on-one calls allow us to surface and address such issues quickly. The last piece — this is the cornerstone that has really unified our team to create a singular mission — is to do success roundups every month. These happen as a Zoom call and they are also recorded for those team members who cannot attend. An example of the agenda of a monthly roundup session. We put this together every single month — we look at our performance metrics, how we did in the last month, and if we want to update our goals and/or our policies. We also do goal setting based on tasks that are assigned to the team as additional projects. In addition to operational things and we also like to play a game or do something fun together, which is something that usually falls short in a remote setting. Clearly defined processes The other area around collaboration is to design clearly defined processes. I think it’s important to keep your process design simple for the stage of your startup. A lot of the customer success content that you will find on the internet targets large businesses and suggests practices that may introduce unnecessary complexity. It is important to implement processes that align with your growth stage and team size. Keeping things simple reduces touchpoints and generally results in better customer experience. We have this for each subsection of our team for these three teams to have their own section within Notion (which we use for our internal documentation). Our Notion board captures every piece of knowledge around customer success. We found that this helps to create really clear expectations because when you work in a remote team, you can’t always speak to someone in real-time, because they might not be online. So, having things documented helps people make their own decisions when they’re not able to talk to someone. Goal-oriented task setting We also do goal-oriented task setting on a monthly basis. This is in addition to the operational work that we do. Projects like this are a great way to create diversity in the work of the customer success team. We use a Kanban board and we have a backlog that comes from the rest of the company and also from our team and from our customers. We pick the projects we want to work on a monthly basis and then go through them and it has helped us achieve over 90% of these every single month. This has been a great way to build a sense of ownership and to also make roles such as frontline customer support more fun when you can also do some project work on the side. Have fun together The last area, I would like to share is to make time to meet your team in person. Fly in your remote team members to work with you at the office. Consider doing something like an offsite to bring the whole company together. This really helps to rally your team around the vision, and you can do sessions and team-building work that will really build the relationships within your team. On the left here we have some of our success team working together in Berlin. The photo on the right is from Croatia — in 2018 we chartered a boat there and had a great time going to some beaches. This year we’re going to Mallorca where we have rented a resort. Of course, this is something where you have to keep your budget in mind of what you can do at the stage where you’re at, but you can get creative there: like having people share rooms or picking a destination that’s not too expensive. One thing is important to note: the benefit of getting your team together and having them bond is times what you’ll be paying to fly and host everyone at the same place for a week. Customer success will be your competitive advantage If there’s just one thing you can walk away with, I would like it to be this one — start simple and evolve your team through fast feedback loops. Define goals and actionable performance metrics for each person and team; Establish a culture of customer success across your entire organization; And lastly, create clear processes that empower your distributed team. In a SaaS startup, customer success will be your competitive advantage. Thank you very much. You can find me on Twitter or LinkedIn. This is a very high-level article, so if you’re interested in talking deeper about one of these subjects, please get in touch. </sys

ChartMogul and the GDPR. As you probably already know from the flood of messages in your email inbox, the General Data Protection Regulation (GDPR) is in effect on 25th May and is designed to protect the data of all users located in the EU. As an analytics company, ChartMogul is already dedicated to the protection and responsible use of data as a core competency. Our customers put ChartMogul at the center of their decision-making processes and trust us to handle their data with utmost care. We only collect personal data where absolutely necessary for the function of our business, and are committed to your right to privacy in every aspect of how we handle it. ChartMogul does not (and will never) sell your data to a third party. You pay us to deliver a service and we’re not in the business of monetizing you or your data through other methods. The data stored in your ChartMogul account is only ever accessed, with your permission, when we need to solve a technical issue or support your use of the product. We may also require access to investigate suspected abuse on your account. Is ChartMogul GDPR compliant? Yes, ChartMogul is fully compliant with GDPR. Our existing internal standards for handling personal data mean that we already met many aspects of the data privacy rules, but we’ve also gone through an extensive external auditing process to ensure that we handle our customers’ data correctly in light of the forthcoming regulation. What steps have you taken to ensure the correct handling of personal data? ✅ Full data audit We’ve worked with trusted third parties to complete a complete audit of how personal data is collected and used at ChartMogul. This includes adjustments to processes where personal data collection is not essential to our business function. ✅ Privacy policy updates We’ve rolled out an updated privacy policy which includes clear, explicit explanations of how and why personal data is collected. ✅ Data Protection Agreement We have created a legal agreement that ChartMogul customers and other third parties can request from us, which promises the correct use of any personally identifiable information that’s stored. ✅ Documenting and listing sub-processors We’ve compiled a list of all sub-processors currently in use at ChartMogul that we share personally identifiable data with, and have a mechanism for people to keep up to date with changes to that list. ✅ Employee data privacy training To establish a common baseline of knowledge across the company, we enrolled every permanent employee of ChartMogul in a program of data privacy and GDPR training. I’m a ChartMogul customer. Do my users need to consent to using ChartMogul? The GDPR states that processing of data without explicit consent is lawful if it is “necessary for the purposes of the legitimate interests pursued by the controller or by a third party” (Article 6, paragraph 1 (f)*). There’s a legitimate business interest for you to measure and understand your revenue. You should also read our data processing agreement, which is incorporated into our Terms of Service, and if you require a signed copy, execute that here. *(Note that this article also states an exception to the above, in cases where the data subject is a child — this does not apply unless for some reason a child’s data was entered into ChartMogul). Does the GDPR affect how I use ChartMogul? No. The functionality of ChartMogul remains exactly the same. Does ChartMogul have a data processing agreement (DPA)? Yes! Users and third parties can sign our DPA, which guarantees the protection of personally identifiable information that we collect and process. This should be read, signed and submitted to our team. Questions can be directed to support@chartmogul.com. What subcontractors does ChartMogul use? Like most modern SaaS businesses, we use a number of technologies and services to build and operate our product efficiently. You can find a full list of the subcontractors we use here: ChartMogul Subcontractors. You can also register to be notified of any updates to this list. What is a “data processor” and “data controller”? These are the two most commonly used terms in the wording of the GDPR. Much of the regulation revolves around the relationship between these two entities. Data Controller: Here’s the formal definition of a data controller: “…the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law” In other words, if your company is the principal entity determining the purpose of collecting and working with such data, that makes it a data controller. Data Processor: “…a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller.” In the context of a SaaS business, a common example of a data processor would be a service used by your team to automate onboarding email campaigns sent to customers. The email automation platform handles (processes) the personal data of your customers, on behalf of your business (the data controller). One of the key changes introduced with the GDPR is the introduction of direct obligations for data processors. In addition to this, data controllers should only choose processors that are GDPR-compliant. As a data controller, businesses need to have an appropriate contract in place — usually referred to as a data processing agreement (DPA) — with any processor it shares data with. If you use ChartMogul as a data processor for your business, you may need to sign a DPA with us. Have further questions? You can always reach out to our team at support@chartmogul.com who will be happy to answer any further questions on GDPR compliance or data privacy.

[INST] ChartMogul and the GDPR [/INST]

As you probably already know from the flood of messages in your email inbox, the General Data Protection Regulation (GDPR) is in effect on 25th May and is designed to protect the data of all users located in the EU. As an analytics company, ChartMogul is already dedicated to the protection and responsible use of data as a core competency. Our customers put ChartMogul at the center of their decision-making processes and trust us to handle their data with utmost care. We only collect personal data where absolutely necessary for the function of our business, and are committed to your right to privacy in every aspect of how we handle it. ChartMogul does not (and will never) sell your data to a third party. You pay us to deliver a service and we’re not in the business of monetizing you or your data through other methods. The data stored in your ChartMogul account is only ever accessed, with your permission, when we need to solve a technical issue or support your use of the product. We may also require access to investigate suspected abuse on your account. Is ChartMogul GDPR compliant? Yes, ChartMogul is fully compliant with GDPR. Our existing internal standards for handling personal data mean that we already met many aspects of the data privacy rules, but we’ve also gone through an extensive external auditing process to ensure that we handle our customers’ data correctly in light of the forthcoming regulation. What steps have you taken to ensure the correct handling of personal data? ✅ Full data audit We’ve worked with trusted third parties to complete a complete audit of how personal data is collected and used at ChartMogul. This includes adjustments to processes where personal data collection is not essential to our business function. ✅ Privacy policy updates We’ve rolled out an updated privacy policy which includes clear, explicit explanations of how and why personal data is collected. ✅ Data Protection Agreement We have created a legal agreement that ChartMogul customers and other third parties can request from us, which promises the correct use of any personally identifiable information that’s stored. ✅ Documenting and listing sub-processors We’ve compiled a list of all sub-processors currently in use at ChartMogul that we share personally identifiable data with, and have a mechanism for people to keep up to date with changes to that list. ✅ Employee data privacy training To establish a common baseline of knowledge across the company, we enrolled every permanent employee of ChartMogul in a program of data privacy and GDPR training. I’m a ChartMogul customer. Do my users need to consent to using ChartMogul? The GDPR states that processing of data without explicit consent is lawful if it is “necessary for the purposes of the legitimate interests pursued by the controller or by a third party” (Article 6, paragraph 1 (f)*). There’s a legitimate business interest for you to measure and understand your revenue. You should also read our data processing agreement, which is incorporated into our Terms of Service, and if you require a signed copy, execute that here. *(Note that this article also states an exception to the above, in cases where the data subject is a child — this does not apply unless for some reason a child’s data was entered into ChartMogul). Does the GDPR affect how I use ChartMogul? No. The functionality of ChartMogul remains exactly the same. Does ChartMogul have a data processing agreement (DPA)? Yes! Users and third parties can sign our DPA, which guarantees the protection of personally identifiable information that we collect and process. This should be read, signed and submitted to our team. Questions can be directed to support@chartmogul.com. What subcontractors does ChartMogul use? Like most modern SaaS businesses, we use a number of technologies and services to build and operate our product efficiently. You can find a full list of the subcontractors we use here: ChartMogul Subcontractors. You can also register to be notified of any updates to this list. What is a “data processor” and “data controller”? These are the two most commonly used terms in the wording of the GDPR. Much of the regulation revolves around the relationship between these two entities. Data Controller: Here’s the formal definition of a data controller: “…the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law” In other words, if your company is the principal entity determining the purpose of collecting and working with such data, that makes it a data controller. Data Processor: “…a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller.” In the context of a SaaS business, a common example of a data processor would be a service used by your team to automate onboarding email campaigns sent to customers. The email automation platform handles (processes) the personal data of your customers, on behalf of your business (the data controller). One of the key changes introduced with the GDPR is the introduction of direct obligations for data processors. In addition to this, data controllers should only choose processors that are GDPR-compliant. As a data controller, businesses need to have an appropriate contract in place — usually referred to as a data processing agreement (DPA) — with any processor it shares data with. If you use ChartMogul as a data processor for your business, you may need to sign a DPA with us. Have further questions? You can always reach out to our team at support@chartmogul.com who will be happy to answer any further questions on GDPR compliance or data privacy.

<sys> [INST] ChartMogul and the GDPR [/INST] As you probably already know from the flood of messages in your email inbox, the General Data Protection Regulation (GDPR) is in effect on 25th May and is designed to protect the data of all users located in the EU. As an analytics company, ChartMogul is already dedicated to the protection and responsible use of data as a core competency. Our customers put ChartMogul at the center of their decision-making processes and trust us to handle their data with utmost care. We only collect personal data where absolutely necessary for the function of our business, and are committed to your right to privacy in every aspect of how we handle it. ChartMogul does not (and will never) sell your data to a third party. You pay us to deliver a service and we’re not in the business of monetizing you or your data through other methods. The data stored in your ChartMogul account is only ever accessed, with your permission, when we need to solve a technical issue or support your use of the product. We may also require access to investigate suspected abuse on your account. Is ChartMogul GDPR compliant? Yes, ChartMogul is fully compliant with GDPR. Our existing internal standards for handling personal data mean that we already met many aspects of the data privacy rules, but we’ve also gone through an extensive external auditing process to ensure that we handle our customers’ data correctly in light of the forthcoming regulation. What steps have you taken to ensure the correct handling of personal data? ✅ Full data audit We’ve worked with trusted third parties to complete a complete audit of how personal data is collected and used at ChartMogul. This includes adjustments to processes where personal data collection is not essential to our business function. ✅ Privacy policy updates We’ve rolled out an updated privacy policy which includes clear, explicit explanations of how and why personal data is collected. ✅ Data Protection Agreement We have created a legal agreement that ChartMogul customers and other third parties can request from us, which promises the correct use of any personally identifiable information that’s stored. ✅ Documenting and listing sub-processors We’ve compiled a list of all sub-processors currently in use at ChartMogul that we share personally identifiable data with, and have a mechanism for people to keep up to date with changes to that list. ✅ Employee data privacy training To establish a common baseline of knowledge across the company, we enrolled every permanent employee of ChartMogul in a program of data privacy and GDPR training. I’m a ChartMogul customer. Do my users need to consent to using ChartMogul? The GDPR states that processing of data without explicit consent is lawful if it is “necessary for the purposes of the legitimate interests pursued by the controller or by a third party” (Article 6, paragraph 1 (f)*). There’s a legitimate business interest for you to measure and understand your revenue. You should also read our data processing agreement, which is incorporated into our Terms of Service, and if you require a signed copy, execute that here. *(Note that this article also states an exception to the above, in cases where the data subject is a child — this does not apply unless for some reason a child’s data was entered into ChartMogul). Does the GDPR affect how I use ChartMogul? No. The functionality of ChartMogul remains exactly the same. Does ChartMogul have a data processing agreement (DPA)? Yes! Users and third parties can sign our DPA, which guarantees the protection of personally identifiable information that we collect and process. This should be read, signed and submitted to our team. Questions can be directed to support@chartmogul.com. What subcontractors does ChartMogul use? Like most modern SaaS businesses, we use a number of technologies and services to build and operate our product efficiently. You can find a full list of the subcontractors we use here: ChartMogul Subcontractors. You can also register to be notified of any updates to this list. What is a “data processor” and “data controller”? These are the two most commonly used terms in the wording of the GDPR. Much of the regulation revolves around the relationship between these two entities. Data Controller: Here’s the formal definition of a data controller: “…the natural or legal person, public authority, agency or other body which, alone or jointly with others, determines the purposes and means of the processing of personal data; where the purposes and means of such processing are determined by Union or Member State law, the controller or the specific criteria for its nomination may be provided for by Union or Member State law” In other words, if your company is the principal entity determining the purpose of collecting and working with such data, that makes it a data controller. Data Processor: “…a natural or legal person, public authority, agency or other body which processes personal data on behalf of the controller.” In the context of a SaaS business, a common example of a data processor would be a service used by your team to automate onboarding email campaigns sent to customers. The email automation platform handles (processes) the personal data of your customers, on behalf of your business (the data controller). One of the key changes introduced with the GDPR is the introduction of direct obligations for data processors. In addition to this, data controllers should only choose processors that are GDPR-compliant. As a data controller, businesses need to have an appropriate contract in place — usually referred to as a data processing agreement (DPA) — with any processor it shares data with. If you use ChartMogul as a data processor for your business, you may need to sign a DPA with us. Have further questions? You can always reach out to our team at support@chartmogul.com who will be happy to answer any further questions on GDPR compliance or data privacy. </sys

Actionable SaaS Metrics: Customer Churn Rate. Customer Churn. Everyone loves talking about how to calculate it, how to reduce it, and how bad it is (us included!). But isn’t it time to sit down and figure out how we can actually influence it, and what actions we can actually take, given certain characteristics? What to do if your Customer Churn Rate is… 1. Low Well, you’re sitting in a pretty good position that a lot of businesses would be envious of – well done you. But just before you pop the champagne and log off for the day, we should be sure that the numbers you’re looking at actually make sense. How to measure Customer Churn Rate Let’s just remind ourselves of the basic formula for Customer Churn Rate: It’s important to make sure you’re only measuring paying customers in this formula – free trial customers should be excluded, as well as those on a free plan (if you use a freemium model). There is also an alternative churn rate calculation suggested by Shopify, which simplifies to the following, more iterative formula which sums up the customer churn from each day in the period: What counts as ‘low’ Customer Churn Rate? Many SaaS companies at a growth stage report monthly churn rate of around 2-5%. Remember that this level of monthly churn rate still equates to losing a significant amount of your customer base in the longer term – A cohort of customers acquired in a single month would half in size over the period of a year! The other thing to remember is that we’re talking about customer churn rate – not MRR churn rate. It’s okay to lose customers, if they’re not the customers contributing a large proportion of your MRR. Consequently, a high MRR Churn Rate can be much more destructive to the growth of a SaaS business. Actions to take Make sure you’re measuring Customer Churn correctly Continue to invest in customer success and lowering churn – what you see may just be a temporary characteristic of your business at this point – i.e. maybe nobody has reached the “critical” churn risk period yet. Pat yourself on the back. You’re doing okay so far! 2. High High Churn Rate is the Achilles’ Heel of any growing business. Tomasz Tunguz (Redpoint Ventures) illustrates this perfectly in this post: source: https://tomtunguz.com/negative-churn/ Because churn compounds (just like recurring revenue), a 5% churn rate over time can severely limit the growth of a business. What is ‘high’ Customer Churn Rate? Anything over 3-5% should be sending warning signals. Although some businesses by design are more tolerant of higher churn levels – i.e. B2C businesses with a large number of customers paying a tiny amount will always exhibit a higher customer churn rate. For this reason, it’s often better to look at MRR Churn Rate (which will account for this). Actions to take First, segment your churn into Cohorts – look at a Cohort Analysis. You can use a platform such as ChartMogul for this. Identify any specific months of high churn in the customer lifetime. Find out why customers are churning, particularly in those high-churn months you just identified. Talk to them! Or perhaps implement an exit survey when people cancel. Implement a framework for customer success in your business, aimed at helping customers achieve their goals within your product. 3. Unstable This might seem like a strange one, but it’s entirely plausible that your calculated Customer Churn Rate would jump around from one month to the next – it’s actually quite a common symptom, particularly in smaller SaaS startups with just a few customers. It may seem obvious, but if you have just a handful of customers and you lose one of them, that’s a BIG percentage churn for you. Conversely, a large enterprise with thousands of customers requires a much larger number of cancellations to have an impact on the overall churn rate. Actions to take Make sure that you’re calculating Customer Churn Rate correctly and consistently. Check The Ultimate Churn Cheat Sheet for more detailed examples. If your number of customers is fairly small (less than 100 customers), consider removing focus from the Customer Churn Rate metric at this point – an unstable number will not help you make consistent, positive decisions about your business. Instead, why not focus on talking to your customer base to understand their experience and needs from your product? Share & Follow NEW on @ChartMogul – Actionable SaaS Metrics: Customer Churn Rate https://t.co/DofL54ZlHd #SaaS #Churn pic.twitter.com/nFBMnurRMg — ChartMogul (@ChartMogul) October 21, 2015

[INST] Actionable SaaS Metrics: Customer Churn Rate [/INST]

Customer Churn. Everyone loves talking about how to calculate it, how to reduce it, and how bad it is (us included!). But isn’t it time to sit down and figure out how we can actually influence it, and what actions we can actually take, given certain characteristics? What to do if your Customer Churn Rate is… 1. Low Well, you’re sitting in a pretty good position that a lot of businesses would be envious of – well done you. But just before you pop the champagne and log off for the day, we should be sure that the numbers you’re looking at actually make sense. How to measure Customer Churn Rate Let’s just remind ourselves of the basic formula for Customer Churn Rate: It’s important to make sure you’re only measuring paying customers in this formula – free trial customers should be excluded, as well as those on a free plan (if you use a freemium model). There is also an alternative churn rate calculation suggested by Shopify, which simplifies to the following, more iterative formula which sums up the customer churn from each day in the period: What counts as ‘low’ Customer Churn Rate? Many SaaS companies at a growth stage report monthly churn rate of around 2-5%. Remember that this level of monthly churn rate still equates to losing a significant amount of your customer base in the longer term – A cohort of customers acquired in a single month would half in size over the period of a year! The other thing to remember is that we’re talking about customer churn rate – not MRR churn rate. It’s okay to lose customers, if they’re not the customers contributing a large proportion of your MRR. Consequently, a high MRR Churn Rate can be much more destructive to the growth of a SaaS business. Actions to take Make sure you’re measuring Customer Churn correctly Continue to invest in customer success and lowering churn – what you see may just be a temporary characteristic of your business at this point – i.e. maybe nobody has reached the “critical” churn risk period yet. Pat yourself on the back. You’re doing okay so far! 2. High High Churn Rate is the Achilles’ Heel of any growing business. Tomasz Tunguz (Redpoint Ventures) illustrates this perfectly in this post: source: https://tomtunguz.com/negative-churn/ Because churn compounds (just like recurring revenue), a 5% churn rate over time can severely limit the growth of a business. What is ‘high’ Customer Churn Rate? Anything over 3-5% should be sending warning signals. Although some businesses by design are more tolerant of higher churn levels – i.e. B2C businesses with a large number of customers paying a tiny amount will always exhibit a higher customer churn rate. For this reason, it’s often better to look at MRR Churn Rate (which will account for this). Actions to take First, segment your churn into Cohorts – look at a Cohort Analysis. You can use a platform such as ChartMogul for this. Identify any specific months of high churn in the customer lifetime. Find out why customers are churning, particularly in those high-churn months you just identified. Talk to them! Or perhaps implement an exit survey when people cancel. Implement a framework for customer success in your business, aimed at helping customers achieve their goals within your product. 3. Unstable This might seem like a strange one, but it’s entirely plausible that your calculated Customer Churn Rate would jump around from one month to the next – it’s actually quite a common symptom, particularly in smaller SaaS startups with just a few customers. It may seem obvious, but if you have just a handful of customers and you lose one of them, that’s a BIG percentage churn for you. Conversely, a large enterprise with thousands of customers requires a much larger number of cancellations to have an impact on the overall churn rate. Actions to take Make sure that you’re calculating Customer Churn Rate correctly and consistently. Check The Ultimate Churn Cheat Sheet for more detailed examples. If your number of customers is fairly small (less than 100 customers), consider removing focus from the Customer Churn Rate metric at this point – an unstable number will not help you make consistent, positive decisions about your business. Instead, why not focus on talking to your customer base to understand their experience and needs from your product? Share & Follow NEW on @ChartMogul – Actionable SaaS Metrics: Customer Churn Rate https://t.co/DofL54ZlHd #SaaS #Churn pic.twitter.com/nFBMnurRMg — ChartMogul (@ChartMogul) October 21, 2015

<sys> [INST] Actionable SaaS Metrics: Customer Churn Rate [/INST] Customer Churn. Everyone loves talking about how to calculate it, how to reduce it, and how bad it is (us included!). But isn’t it time to sit down and figure out how we can actually influence it, and what actions we can actually take, given certain characteristics? What to do if your Customer Churn Rate is… 1. Low Well, you’re sitting in a pretty good position that a lot of businesses would be envious of – well done you. But just before you pop the champagne and log off for the day, we should be sure that the numbers you’re looking at actually make sense. How to measure Customer Churn Rate Let’s just remind ourselves of the basic formula for Customer Churn Rate: It’s important to make sure you’re only measuring paying customers in this formula – free trial customers should be excluded, as well as those on a free plan (if you use a freemium model). There is also an alternative churn rate calculation suggested by Shopify, which simplifies to the following, more iterative formula which sums up the customer churn from each day in the period: What counts as ‘low’ Customer Churn Rate? Many SaaS companies at a growth stage report monthly churn rate of around 2-5%. Remember that this level of monthly churn rate still equates to losing a significant amount of your customer base in the longer term – A cohort of customers acquired in a single month would half in size over the period of a year! The other thing to remember is that we’re talking about customer churn rate – not MRR churn rate. It’s okay to lose customers, if they’re not the customers contributing a large proportion of your MRR. Consequently, a high MRR Churn Rate can be much more destructive to the growth of a SaaS business. Actions to take Make sure you’re measuring Customer Churn correctly Continue to invest in customer success and lowering churn – what you see may just be a temporary characteristic of your business at this point – i.e. maybe nobody has reached the “critical” churn risk period yet. Pat yourself on the back. You’re doing okay so far! 2. High High Churn Rate is the Achilles’ Heel of any growing business. Tomasz Tunguz (Redpoint Ventures) illustrates this perfectly in this post: source: https://tomtunguz.com/negative-churn/ Because churn compounds (just like recurring revenue), a 5% churn rate over time can severely limit the growth of a business. What is ‘high’ Customer Churn Rate? Anything over 3-5% should be sending warning signals. Although some businesses by design are more tolerant of higher churn levels – i.e. B2C businesses with a large number of customers paying a tiny amount will always exhibit a higher customer churn rate. For this reason, it’s often better to look at MRR Churn Rate (which will account for this). Actions to take First, segment your churn into Cohorts – look at a Cohort Analysis. You can use a platform such as ChartMogul for this. Identify any specific months of high churn in the customer lifetime. Find out why customers are churning, particularly in those high-churn months you just identified. Talk to them! Or perhaps implement an exit survey when people cancel. Implement a framework for customer success in your business, aimed at helping customers achieve their goals within your product. 3. Unstable This might seem like a strange one, but it’s entirely plausible that your calculated Customer Churn Rate would jump around from one month to the next – it’s actually quite a common symptom, particularly in smaller SaaS startups with just a few customers. It may seem obvious, but if you have just a handful of customers and you lose one of them, that’s a BIG percentage churn for you. Conversely, a large enterprise with thousands of customers requires a much larger number of cancellations to have an impact on the overall churn rate. Actions to take Make sure that you’re calculating Customer Churn Rate correctly and consistently. Check The Ultimate Churn Cheat Sheet for more detailed examples. If your number of customers is fairly small (less than 100 customers), consider removing focus from the Customer Churn Rate metric at this point – an unstable number will not help you make consistent, positive decisions about your business. Instead, why not focus on talking to your customer base to understand their experience and needs from your product? Share & Follow NEW on @ChartMogul – Actionable SaaS Metrics: Customer Churn Rate https://t.co/DofL54ZlHd #SaaS #Churn pic.twitter.com/nFBMnurRMg — ChartMogul (@ChartMogul) October 21, 2015 </sys

New feature: Custom charts. ChartMogul is really great when it comes to letting you drill down into your data; however, up until now we’ve required you to rebuild your custom views each time you load the app, or bookmark a URL. This has added a bit of friction for users who love to build complex charts comprised of multiple segments. Today, I’m thrilled to share that we’re making ChartMogul faster and easier to use with custom charts. Now you can save your favorite charts and easily access them again, and again, and again. Even better, you can make sure your most business-critical charts are shared with the whole team. “I love how custom charts put answers to my daily worries at my fingertips.” Sergei Anikin, CTO, Pipedrive How custom charts work When you go to your Charts view, you’ll see a Save button above every chart. Once you’ve created the perfect chart, click that button and a modal will guide you through the process of saving and sharing your chart. To save your chart, you’ll need to fill out a few details: Name: Make sure this is descriptive. A best practice would be to include the metric name and segment so it’s clear what’s being measured. Available for: You can choose to keep charts private to your account, or if you’re an admin, share with all ChartMogul users on your team. Chart time-period: Choose either a dynamic time period (e.g., last 365 days) or fixed time period (e.g., January 1, 2017–December 31, 2017). After you’ve saved your chart, you’ll see it added to a new section of your Charts sidebar called Custom charts. Your custom charts are organized based on recency, but can be reordered by dragging and dropping. We’ve pre-loaded your account with some of our favorite charts, which you can explore, edit or remove. Bonus: reorganize your ChartMogul charts navigation Building on this, we’re giving ChartMogul users another way to customize their Charts view: drag-and-drop reordering of the chart categories in the sidebar. You can reorganize the Charts navigation to reflect the metrics that are most important to your business. For instance, if your business doesn’t offer a free trial, you might want to move your Leads and trials section to the bottom of the menu. Or if you’re laser-focused on reducing churn, you can move those metrics to the top of your menu for quick access. These changes will only be reflected in your view, so every member of the team can adjust their ChartMogul Charts menu to fit their needs. These latest updates are intended to make ChartMogul even more personal, and your business more efficient in how it analyzes and acts on revenue data. I hope you enjoy using custom charts!

[INST] New feature: Custom charts [/INST]

ChartMogul is really great when it comes to letting you drill down into your data; however, up until now we’ve required you to rebuild your custom views each time you load the app, or bookmark a URL. This has added a bit of friction for users who love to build complex charts comprised of multiple segments. Today, I’m thrilled to share that we’re making ChartMogul faster and easier to use with custom charts. Now you can save your favorite charts and easily access them again, and again, and again. Even better, you can make sure your most business-critical charts are shared with the whole team. “I love how custom charts put answers to my daily worries at my fingertips.” Sergei Anikin, CTO, Pipedrive How custom charts work When you go to your Charts view, you’ll see a Save button above every chart. Once you’ve created the perfect chart, click that button and a modal will guide you through the process of saving and sharing your chart. To save your chart, you’ll need to fill out a few details: Name: Make sure this is descriptive. A best practice would be to include the metric name and segment so it’s clear what’s being measured. Available for: You can choose to keep charts private to your account, or if you’re an admin, share with all ChartMogul users on your team. Chart time-period: Choose either a dynamic time period (e.g., last 365 days) or fixed time period (e.g., January 1, 2017–December 31, 2017). After you’ve saved your chart, you’ll see it added to a new section of your Charts sidebar called Custom charts. Your custom charts are organized based on recency, but can be reordered by dragging and dropping. We’ve pre-loaded your account with some of our favorite charts, which you can explore, edit or remove. Bonus: reorganize your ChartMogul charts navigation Building on this, we’re giving ChartMogul users another way to customize their Charts view: drag-and-drop reordering of the chart categories in the sidebar. You can reorganize the Charts navigation to reflect the metrics that are most important to your business. For instance, if your business doesn’t offer a free trial, you might want to move your Leads and trials section to the bottom of the menu. Or if you’re laser-focused on reducing churn, you can move those metrics to the top of your menu for quick access. These changes will only be reflected in your view, so every member of the team can adjust their ChartMogul Charts menu to fit their needs. These latest updates are intended to make ChartMogul even more personal, and your business more efficient in how it analyzes and acts on revenue data. I hope you enjoy using custom charts!

<sys> [INST] New feature: Custom charts [/INST] ChartMogul is really great when it comes to letting you drill down into your data; however, up until now we’ve required you to rebuild your custom views each time you load the app, or bookmark a URL. This has added a bit of friction for users who love to build complex charts comprised of multiple segments. Today, I’m thrilled to share that we’re making ChartMogul faster and easier to use with custom charts. Now you can save your favorite charts and easily access them again, and again, and again. Even better, you can make sure your most business-critical charts are shared with the whole team. “I love how custom charts put answers to my daily worries at my fingertips.” Sergei Anikin, CTO, Pipedrive How custom charts work When you go to your Charts view, you’ll see a Save button above every chart. Once you’ve created the perfect chart, click that button and a modal will guide you through the process of saving and sharing your chart. To save your chart, you’ll need to fill out a few details: Name: Make sure this is descriptive. A best practice would be to include the metric name and segment so it’s clear what’s being measured. Available for: You can choose to keep charts private to your account, or if you’re an admin, share with all ChartMogul users on your team. Chart time-period: Choose either a dynamic time period (e.g., last 365 days) or fixed time period (e.g., January 1, 2017–December 31, 2017). After you’ve saved your chart, you’ll see it added to a new section of your Charts sidebar called Custom charts. Your custom charts are organized based on recency, but can be reordered by dragging and dropping. We’ve pre-loaded your account with some of our favorite charts, which you can explore, edit or remove. Bonus: reorganize your ChartMogul charts navigation Building on this, we’re giving ChartMogul users another way to customize their Charts view: drag-and-drop reordering of the chart categories in the sidebar. You can reorganize the Charts navigation to reflect the metrics that are most important to your business. For instance, if your business doesn’t offer a free trial, you might want to move your Leads and trials section to the bottom of the menu. Or if you’re laser-focused on reducing churn, you can move those metrics to the top of your menu for quick access. These changes will only be reflected in your view, so every member of the team can adjust their ChartMogul Charts menu to fit their needs. These latest updates are intended to make ChartMogul even more personal, and your business more efficient in how it analyzes and acts on revenue data. I hope you enjoy using custom charts! </sys

Introducing the ChartMogul PHP Client. The ChartMogul Platform At ChartMogul, our mission is to help you measure, understand and grow your subscription business. Toward that goal, we currently offer a set of APIs to ease customer integration with our platform and cover every 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 it’s most valuable for your team. These APIs are for you to use — to build with and build from — to create unique value for your business. Since they form the basis of all integrations with ChartMogul, we both consume and maintain each API on our end. In our commitment to making ChartMogul the most powerful platform for subscription businesses, we regularly build and release new tools and plugins for our customers. For example, you can import spreadsheet data directly (and swiftly) to ChartMogul via our Google Sheets app. We also recently launched Ruby and Node.js client libraries, for those of you building in those environments. Now, we’re excited to announce our PHP client library! The ChartMogul PHP client The PHP 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 PHP client library is fully open source. We encourage 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. Get started To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will 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 PHP client is our third client library for the ChartMogul platform. We have plans for more languages and frameworks in the pipeline. If there’s 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 ChartMogul PHP Client [/INST]

The ChartMogul Platform At ChartMogul, our mission is to help you measure, understand and grow your subscription business. Toward that goal, we currently offer a set of APIs to ease customer integration with our platform and cover every 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 it’s most valuable for your team. These APIs are for you to use — to build with and build from — to create unique value for your business. Since they form the basis of all integrations with ChartMogul, we both consume and maintain each API on our end. In our commitment to making ChartMogul the most powerful platform for subscription businesses, we regularly build and release new tools and plugins for our customers. For example, you can import spreadsheet data directly (and swiftly) to ChartMogul via our Google Sheets app. We also recently launched Ruby and Node.js client libraries, for those of you building in those environments. Now, we’re excited to announce our PHP client library! The ChartMogul PHP client The PHP 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 PHP client library is fully open source. We encourage 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. Get started To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will 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 PHP client is our third client library for the ChartMogul platform. We have plans for more languages and frameworks in the pipeline. If there’s 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 ChartMogul PHP Client [/INST] The ChartMogul Platform At ChartMogul, our mission is to help you measure, understand and grow your subscription business. Toward that goal, we currently offer a set of APIs to ease customer integration with our platform and cover every 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 it’s most valuable for your team. These APIs are for you to use — to build with and build from — to create unique value for your business. Since they form the basis of all integrations with ChartMogul, we both consume and maintain each API on our end. In our commitment to making ChartMogul the most powerful platform for subscription businesses, we regularly build and release new tools and plugins for our customers. For example, you can import spreadsheet data directly (and swiftly) to ChartMogul via our Google Sheets app. We also recently launched Ruby and Node.js client libraries, for those of you building in those environments. Now, we’re excited to announce our PHP client library! The ChartMogul PHP client The PHP 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 PHP client library is fully open source. We encourage 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. Get started To set up and install the library, check the GitHub project and its README file: Full documentation and code examples for usage will 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 PHP client is our third client library for the ChartMogul platform. We have plans for more languages and frameworks in the pipeline. If there’s something specific that would make your life easier when interacting with ChartMogul, let us know via email so we can prioritize accordingly! </sys

ChartMogul Retrospective: A look back on 2015. 2015 at a glance January On January 6th we published The Ultimate SaaS Metrics Cheat Sheet – this turned out to be so popular that we’ve started mailing printed copies out to new customers. January 6th was also the day we had our first customer start paying for ChartMogul. Also in January we announced our seed funding from Point Nine Capital and others. Announcing our investment in @ChartMogul. CC @Nick_Franklin and @MichaelFHansen http://t.co/TfNQErSRv7 pic.twitter.com/tSwrrykm9E — Christoph Janz (@chrija) January 15, 2015 February February 5th was the inaugural SaaStr Annual. 2015 was the year that SaaS went truly mainstream and Jason Lemkin emerged as it’s godfather. We were blown away by the scale and potential for a community surrounding the SaaS space. SaaStr Annual 2016 looks to continue this momentum and take things to another level – and of course, ChartMogul will be there! During February we also launched a major new feature: Cohorts. Cohort analyses are key for any SaaS business to drill down into their revenue churn and identify trends that help to target a solution. Announcing Cohorts – Get cohort analysis for your SaaS / Subscription business with one-click https://t.co/aU8EPVXLaC pic.twitter.com/V3xkh0GAsS — ChartMogul (@ChartMogul) February 16, 2015 March March saw us release our Chargify integration, which meant that Chargify customers could connect their account and quickly get access to our awesome metrics and analytics for their account. I also weighed in on the State of play for Berlin’s B2B SaaS startups: New blog post: State of play: Berlin B2B SaaS Industry https://t.co/hwhpcUVYHJ pic.twitter.com/vHc1T9Dt74 — ChartMogul (@ChartMogul) March 17, 2015 April In April we launched our Manual Customers feature. Most people have customers that they bill manually, outside of their billing system (i.e. invoices) and this feature allowed everyone to import these customers and include their data in ChartMogul’s metrics. We also added support for multiple data connections. May to July On our blog, we kicked off May with a huge analysis of B2B SaaS pricing pages: 5 key learnings from analyzing top B2B SaaS pricing pages http://t.co/EqUE6dvknp ft. @contentful @shopify @hubspot pic.twitter.com/WBYD4VivBJ — ChartMogul (@ChartMogul) May 5, 2015 In June we extended the functionality of our Manual Customers feature, allowing for upgrades, downgrades and deletions. We released our Metrics API in July, paving the way for people to build apps and integrations on top of the ChartMogul platform: We’re excited to be announcing the ChartMogul Metrics API https://t.co/axhQTzYaLV pic.twitter.com/lvv597JeW7 — ChartMogul (@ChartMogul) July 20, 2015 August We launched a complete redesign of ChartMogul, paving the way for future new features as we build out the platform. TheNextWeb were even kind enough to write about it. On August 26 we announced our second round of seed funding: Announcing our Second Seed Investment https://t.co/fwXEPZn3Re pic.twitter.com/JZXCHYoz7t — ChartMogul (@ChartMogul) August 26, 2015 We also built a Zendesk app, using the recently-released Metrics API. September and October In September we finally got our own home in form of a 200sqm office in Berlin’s Mitte district, and by October our team had grown to fifteen! ChartMogul all hands, 11 in the office and 4 on Skype (projected overhead). On October 5th we launched our PayPal integration. We also welcomed our 500th paying customer at the start of October and launched a new Customers page to celebrate. Looking ahead: What to expect from ChartMogul in 2016 While we’re keeping a few things close to our chest you can expect to see a slew of new features going live in the first couple of months of 2016, with more tools to help you measure, understand and grow your recurring revenue. We’ll also be at SaaStr Annual again in February (this time with a booth)…so we’re looking forward to seeing some of our customers there again. The whole team at ChartMogul would like to wish Happy Holidays and a prosperous 2016 to all our customers, partners and friends, thanks for making 2015 so great!

[INST] ChartMogul Retrospective: A look back on 2015 [/INST]

2015 at a glance January On January 6th we published The Ultimate SaaS Metrics Cheat Sheet – this turned out to be so popular that we’ve started mailing printed copies out to new customers. January 6th was also the day we had our first customer start paying for ChartMogul. Also in January we announced our seed funding from Point Nine Capital and others. Announcing our investment in @ChartMogul. CC @Nick_Franklin and @MichaelFHansen http://t.co/TfNQErSRv7 pic.twitter.com/tSwrrykm9E — Christoph Janz (@chrija) January 15, 2015 February February 5th was the inaugural SaaStr Annual. 2015 was the year that SaaS went truly mainstream and Jason Lemkin emerged as it’s godfather. We were blown away by the scale and potential for a community surrounding the SaaS space. SaaStr Annual 2016 looks to continue this momentum and take things to another level – and of course, ChartMogul will be there! During February we also launched a major new feature: Cohorts. Cohort analyses are key for any SaaS business to drill down into their revenue churn and identify trends that help to target a solution. Announcing Cohorts – Get cohort analysis for your SaaS / Subscription business with one-click https://t.co/aU8EPVXLaC pic.twitter.com/V3xkh0GAsS — ChartMogul (@ChartMogul) February 16, 2015 March March saw us release our Chargify integration, which meant that Chargify customers could connect their account and quickly get access to our awesome metrics and analytics for their account. I also weighed in on the State of play for Berlin’s B2B SaaS startups: New blog post: State of play: Berlin B2B SaaS Industry https://t.co/hwhpcUVYHJ pic.twitter.com/vHc1T9Dt74 — ChartMogul (@ChartMogul) March 17, 2015 April In April we launched our Manual Customers feature. Most people have customers that they bill manually, outside of their billing system (i.e. invoices) and this feature allowed everyone to import these customers and include their data in ChartMogul’s metrics. We also added support for multiple data connections. May to July On our blog, we kicked off May with a huge analysis of B2B SaaS pricing pages: 5 key learnings from analyzing top B2B SaaS pricing pages http://t.co/EqUE6dvknp ft. @contentful @shopify @hubspot pic.twitter.com/WBYD4VivBJ — ChartMogul (@ChartMogul) May 5, 2015 In June we extended the functionality of our Manual Customers feature, allowing for upgrades, downgrades and deletions. We released our Metrics API in July, paving the way for people to build apps and integrations on top of the ChartMogul platform: We’re excited to be announcing the ChartMogul Metrics API https://t.co/axhQTzYaLV pic.twitter.com/lvv597JeW7 — ChartMogul (@ChartMogul) July 20, 2015 August We launched a complete redesign of ChartMogul, paving the way for future new features as we build out the platform. TheNextWeb were even kind enough to write about it. On August 26 we announced our second round of seed funding: Announcing our Second Seed Investment https://t.co/fwXEPZn3Re pic.twitter.com/JZXCHYoz7t — ChartMogul (@ChartMogul) August 26, 2015 We also built a Zendesk app, using the recently-released Metrics API. September and October In September we finally got our own home in form of a 200sqm office in Berlin’s Mitte district, and by October our team had grown to fifteen! ChartMogul all hands, 11 in the office and 4 on Skype (projected overhead). On October 5th we launched our PayPal integration. We also welcomed our 500th paying customer at the start of October and launched a new Customers page to celebrate. Looking ahead: What to expect from ChartMogul in 2016 While we’re keeping a few things close to our chest you can expect to see a slew of new features going live in the first couple of months of 2016, with more tools to help you measure, understand and grow your recurring revenue. We’ll also be at SaaStr Annual again in February (this time with a booth)…so we’re looking forward to seeing some of our customers there again. The whole team at ChartMogul would like to wish Happy Holidays and a prosperous 2016 to all our customers, partners and friends, thanks for making 2015 so great!

<sys> [INST] ChartMogul Retrospective: A look back on 2015 [/INST] 2015 at a glance January On January 6th we published The Ultimate SaaS Metrics Cheat Sheet – this turned out to be so popular that we’ve started mailing printed copies out to new customers. January 6th was also the day we had our first customer start paying for ChartMogul. Also in January we announced our seed funding from Point Nine Capital and others. Announcing our investment in @ChartMogul. CC @Nick_Franklin and @MichaelFHansen http://t.co/TfNQErSRv7 pic.twitter.com/tSwrrykm9E — Christoph Janz (@chrija) January 15, 2015 February February 5th was the inaugural SaaStr Annual. 2015 was the year that SaaS went truly mainstream and Jason Lemkin emerged as it’s godfather. We were blown away by the scale and potential for a community surrounding the SaaS space. SaaStr Annual 2016 looks to continue this momentum and take things to another level – and of course, ChartMogul will be there! During February we also launched a major new feature: Cohorts. Cohort analyses are key for any SaaS business to drill down into their revenue churn and identify trends that help to target a solution. Announcing Cohorts – Get cohort analysis for your SaaS / Subscription business with one-click https://t.co/aU8EPVXLaC pic.twitter.com/V3xkh0GAsS — ChartMogul (@ChartMogul) February 16, 2015 March March saw us release our Chargify integration, which meant that Chargify customers could connect their account and quickly get access to our awesome metrics and analytics for their account. I also weighed in on the State of play for Berlin’s B2B SaaS startups: New blog post: State of play: Berlin B2B SaaS Industry https://t.co/hwhpcUVYHJ pic.twitter.com/vHc1T9Dt74 — ChartMogul (@ChartMogul) March 17, 2015 April In April we launched our Manual Customers feature. Most people have customers that they bill manually, outside of their billing system (i.e. invoices) and this feature allowed everyone to import these customers and include their data in ChartMogul’s metrics. We also added support for multiple data connections. May to July On our blog, we kicked off May with a huge analysis of B2B SaaS pricing pages: 5 key learnings from analyzing top B2B SaaS pricing pages http://t.co/EqUE6dvknp ft. @contentful @shopify @hubspot pic.twitter.com/WBYD4VivBJ — ChartMogul (@ChartMogul) May 5, 2015 In June we extended the functionality of our Manual Customers feature, allowing for upgrades, downgrades and deletions. We released our Metrics API in July, paving the way for people to build apps and integrations on top of the ChartMogul platform: We’re excited to be announcing the ChartMogul Metrics API https://t.co/axhQTzYaLV pic.twitter.com/lvv597JeW7 — ChartMogul (@ChartMogul) July 20, 2015 August We launched a complete redesign of ChartMogul, paving the way for future new features as we build out the platform. TheNextWeb were even kind enough to write about it. On August 26 we announced our second round of seed funding: Announcing our Second Seed Investment https://t.co/fwXEPZn3Re pic.twitter.com/JZXCHYoz7t — ChartMogul (@ChartMogul) August 26, 2015 We also built a Zendesk app, using the recently-released Metrics API. September and October In September we finally got our own home in form of a 200sqm office in Berlin’s Mitte district, and by October our team had grown to fifteen! ChartMogul all hands, 11 in the office and 4 on Skype (projected overhead). On October 5th we launched our PayPal integration. We also welcomed our 500th paying customer at the start of October and launched a new Customers page to celebrate. Looking ahead: What to expect from ChartMogul in 2016 While we’re keeping a few things close to our chest you can expect to see a slew of new features going live in the first couple of months of 2016, with more tools to help you measure, understand and grow your recurring revenue. We’ll also be at SaaStr Annual again in February (this time with a booth)…so we’re looking forward to seeing some of our customers there again. The whole team at ChartMogul would like to wish Happy Holidays and a prosperous 2016 to all our customers, partners and friends, thanks for making 2015 so great! </sys

Ghost CEO John O’Nolan: How we built the non-profit, distributed SaaS company of our dreams. A SaaS business with a mission “Trying to create good technology to facilitate media organizations at a time when media orgs are haemorrhaging cash and staff is something that I care deeply about.” Ghost may look like a typical SaaS blogging platform at first glance, but if you look a little closer you’ll see that things are very different. The company is a non-profit organization, originally funded through kickstarter and subsequently bootstrapped through to profitability. Ghost shares its financial metrics openly – you can see them at ghost.org/about – and the technology behind the platform is 100% open-source. The Ghost public dashboard, built on ChartMogul’s API. (source: ghost.org/about) A founder’s vision “We’re hoping to use technology to level the playing field of modern media and power some of the greatest journalists in the world.” It’s obvious that there’s a strong, clear vision behind Ghost — one that I wanted to understand in more detail. I spoke to Founder and CEO John O’Nolan (@JohnONolan), who started the company way back in 2012 after a single blog post outlining his idea went viral. (I still remember reading this post at the time, and the subsequent excitement in the community). In many ways Ghost is an embodiment of John and his beliefs and philosophy on the future of journalism — something he cares about deeply. The other part of the story (which is equally as captivating) revolves around John’s aspiration for building a sustainable company with distributed employees, and that supports his and his employees goals of living around the world and leading a rich life while working on something he cares about. There’s so much here to learn from, and I wish we had more time to talk. But for now, get the full episode below, or on iTunes, SoundCloud, Stitcher or by searching for us in your usual podcast player. Any thoughts or discussion on the conversation? Join me where I’ll be hanging out in the comments section, further down the page. Enjoy!

[INST] Ghost CEO John O’Nolan: How we built the non-profit, distributed SaaS company of our dreams [/INST]

A SaaS business with a mission “Trying to create good technology to facilitate media organizations at a time when media orgs are haemorrhaging cash and staff is something that I care deeply about.” Ghost may look like a typical SaaS blogging platform at first glance, but if you look a little closer you’ll see that things are very different. The company is a non-profit organization, originally funded through kickstarter and subsequently bootstrapped through to profitability. Ghost shares its financial metrics openly – you can see them at ghost.org/about – and the technology behind the platform is 100% open-source. The Ghost public dashboard, built on ChartMogul’s API. (source: ghost.org/about) A founder’s vision “We’re hoping to use technology to level the playing field of modern media and power some of the greatest journalists in the world.” It’s obvious that there’s a strong, clear vision behind Ghost — one that I wanted to understand in more detail. I spoke to Founder and CEO John O’Nolan (@JohnONolan), who started the company way back in 2012 after a single blog post outlining his idea went viral. (I still remember reading this post at the time, and the subsequent excitement in the community). In many ways Ghost is an embodiment of John and his beliefs and philosophy on the future of journalism — something he cares about deeply. The other part of the story (which is equally as captivating) revolves around John’s aspiration for building a sustainable company with distributed employees, and that supports his and his employees goals of living around the world and leading a rich life while working on something he cares about. There’s so much here to learn from, and I wish we had more time to talk. But for now, get the full episode below, or on iTunes, SoundCloud, Stitcher or by searching for us in your usual podcast player. Any thoughts or discussion on the conversation? Join me where I’ll be hanging out in the comments section, further down the page. Enjoy!

<sys> [INST] Ghost CEO John O’Nolan: How we built the non-profit, distributed SaaS company of our dreams [/INST] A SaaS business with a mission “Trying to create good technology to facilitate media organizations at a time when media orgs are haemorrhaging cash and staff is something that I care deeply about.” Ghost may look like a typical SaaS blogging platform at first glance, but if you look a little closer you’ll see that things are very different. The company is a non-profit organization, originally funded through kickstarter and subsequently bootstrapped through to profitability. Ghost shares its financial metrics openly – you can see them at ghost.org/about – and the technology behind the platform is 100% open-source. The Ghost public dashboard, built on ChartMogul’s API. (source: ghost.org/about) A founder’s vision “We’re hoping to use technology to level the playing field of modern media and power some of the greatest journalists in the world.” It’s obvious that there’s a strong, clear vision behind Ghost — one that I wanted to understand in more detail. I spoke to Founder and CEO John O’Nolan (@JohnONolan), who started the company way back in 2012 after a single blog post outlining his idea went viral. (I still remember reading this post at the time, and the subsequent excitement in the community). In many ways Ghost is an embodiment of John and his beliefs and philosophy on the future of journalism — something he cares about deeply. The other part of the story (which is equally as captivating) revolves around John’s aspiration for building a sustainable company with distributed employees, and that supports his and his employees goals of living around the world and leading a rich life while working on something he cares about. There’s so much here to learn from, and I wish we had more time to talk. But for now, get the full episode below, or on iTunes, SoundCloud, Stitcher or by searching for us in your usual podcast player. Any thoughts or discussion on the conversation? Join me where I’ll be hanging out in the comments section, further down the page. Enjoy! </sys

The humble origins of SaaStock, Europe’s B2B SaaS conference. SaaStock, the latest and poised-to-be greatest event for Europe’s SaaS community, is coming up on September 22. We’re really looking forward to being there in Dublin, hearing from industry leaders, and meeting people from around the world. In our anticipation, we transcribed our recent SaaS Open Mic podcast with Alex Theuma, founder of SaaScribe and SaaStock. Having started from scratch and now launching a large-scale event, Theuma has great insight to share about community building and getting involved in SaaS. Enjoy! Introducing a SaaSpreneur Ed: I was going to start by explaining your background and what you do. But I thought it would be cool if you do that instead. So if somebody asks you what you do, what would you tell them? Alex: It depends who asks me. To any lay person, I guess I could say I’m a “SaaS-preneur.” Actually that might confuse them even more… But I’m the founder of SaaScribe and SaaStock. In its simplest terms, that’s what I am. For those listening, SaaScribe is an online/offline community for SaaS startups, which includes the blog Saascribe.com, the podcast the SaaS Revolution Show, and a Slack channel (SaaS Founders Club). All of those properties live in the online world. And toward the end of last year we started thinking — if you’re talking community, you have to do more in the offline world. You can’t just be sitting at your desk in your home office, uploading content and tweeting, and building a community that way. You need to get out of the office and try to do more offline. So we’ve been hosting SaaS meetups. I’m not content with doing those just in the UK, so we’ve done some in the UK, in Dublin, even one in Berlin. We’ve done about 8 so far. And finally a kind of 10x meetup, which will be SaaStock — the premiere European conference for B2B SaaS founders, execs, and investors, which is taking place on the 22nd of September in Dublin. It’s hopefully going to be very similar to some of the meetups we’ve had, but 10x. It’s going to be about networking, sharing valuable insights, and having a bit of fun as well. So yeah, that’s the long version of what it is that I do. [Editor’s note: I attended the SaaScribe meetup in Berlin, and it was great! Check out my recap of the “growth through retention” discussion.] SaaScribe, the independent SaaS community Ed: There are a few SaaS-related communities out there. But I think pretty much all of them are in some way tied to a brand that is selling a product, and it’s really a side thing to grow an audience, for marketing purposes or brand recognition. But SaaScribe struck me as something outside of that. Because you are building this community pretty much from scratch. What’s the reason behind that? Why did you do it? Alex: I guess I started SaaScribe because… I spent 11 years or so in sales, in tech sales selling IT support, selling cloud computing which merged into saas. SaaS was the only thing out of those different services and products that I found exciting, sexy, and cool. It connected with me a lot more than the others. Then I found out that the people working in SaaS were also exciting, sexy, and cool, right? The truly great thing I found within this SaaS space is that people were willing to share, to help others learn. It was something I’d never experienced before and something I wanted to be a part of. So what I decided to do is to go a little out of my comfort zone, to start writing some content — stuff I knew that, in comparison to some of the thought leaders out there (like Lincoln Murphy), was very inconsequential. But it was something I wanted to do. The idea of SaaScribe resonated with part of the SaaS startup community, more so than the initial content of the early days, which was a bit ropey at best. It took off from there. One day I was thinking actually I’m quite passionate about SaaS. I’m reading the thought leaders, and a lot of the stuff is marketing for a product or a company. There wasn’t anything or anybody doing it independently and unbiased. Without portfolio companies of VCs. So to come with a neutral, non-biased perspective, not trying to market or sell anything in the early days, that was our idea. And the idea took hold and the first couple of months we saw some rocketship growth in terms of traffic. And ever since then we’ve just been continuing with it. Ed: Do you think you have a benefit in not being tied to a marketing projecting or a brand? Do you think that’s what allowed you to see this growth so early on? Alex: Yes, I think so. But I think there are pros and cons to both. I think so because we were (and still are) independent. Somehow that struck a chord with the community. Also the initial volume of content that we put out was probably a bit too much. But it meant that people knew about us by default because we were putting out 4-5 pieces of content per week. And they were surprised it was only two of us behind it at the time. People within the SaaS community are curious and hungry to learn, so their curious nature took them to SaaScribe, to sign up for yet another newsletter. We’ve kept many of those on board. There are drawbacks. I wouldn’t say we’re necessarily competing with the likes of HubSpot’s blog or Close.io. But these are companies that have a lot of money and can invest a lot into the production of content and podcasts and also promotion, to go beyond what we can as a bootstrapped self-funded startup. So it can be difficult if we were looking for specific metrics or numbers, like 1000 post reads. It’s not easy to obtain that every time. Delivering real value as a SaaS community Ed: So it’s 2016. A lot of people in this space pushing out content. And a lot of it, if I’m honest, is mediocre quality. There’s a lot of noise. Let’s say I’m trying to start a community in a vertical today. What kind of approach would you suggest? How did you do it with SaaScribe? Did you just start writing, or was there more of a method to it? Alex: I don’t think there was really a method to it in the beginning. It was just: starting to write. We got set up on WordPress and started putting out our first few posts. And probably, to be honest, we were still trying to find direction. “Are we still truly a community or are we gonna go down the route of doing news?” So in the early days we weren’t really 100% on what was happening with it. But then, I can’t remember why, but I decided I’d start doing the podcast. The first guest was Mark Roberge. That continued and we just saw the first anniversary of the podcast, have probably done about 40 or so of those since then. And I think the other thing was that it just started to grow. There wasn’t this grand master plan like, “Okay, to build a community, this is what we’re going to need to do. We need all these offline channels and these online channels.” It just all fell into place and was pretty logical. There was no one doing SaaS meetups in Europe or the UK, so wouldn’t it make sense that what I’m doing with SaaScribe, I take the initiative and do meetups? And that’s what happened. If someone were going to do it today, and they knew they wanted to set up a community, I guess those communities can take different forms. There’s the Reddits and the Growthhackers — you can find software out there that will give you that kind of online community. Or do you want to do content and drive engagement through that? Therefore having some kind of blog might be your option. But Slack communities are really interesting as well. And I’ve seen a lot of people in the last year going in that direction. Some succeeding and some failing, because I think it’s quite difficult to — I don’t want to say moderate — but the level of communication, when you only have one channel, you can kind of feel like you’re drowning at times. But still, very interesting. Ed: Yeah, I think I’m logged into about nine Slack communities now. And it’s kind of proven to me the breaking points where Slack no longer scales well for the user. I think there’s something really interesting there, and I have had some occasions where it’s great to casually chat with people. But I’m at the point where my Slack doesn’t ever have an unread notification on it. That’s the problem. Alex: Yeah. I joined one or two before I started my own. And the problem I found with those was that you have about 40 people in the community, and there would be two channels: a “general” channel and a “please share” channel, for sharing content. So if I hadn’t logged in for a day or two, there would be 50 or so unread notificat ions. And I was never going to read all of those. And when you’re on it, the constant notifications can become a bit of a distraction or annoyance. So when I set up SaaS Founders Club, which is strictly for SaaS founders only, I knew these are very busy people who perhaps want fewer distractions. But also I had to engineer it so they can get value out of it. We’ve got loads of different channels. Actually in the main channels, there isn’t a lot of activity. A lot of the activity is done in direct messaging. So the value is being served from this community, but it’s being done in a manner that doesn’t disturb everyone publicly. So that seems to be working well and that’s growing. I think if you get it right with Slack, it’s a good forum for a community. From community to conference: launching SaaStock Ed: You mentioned that you’ve slowly moved into events in the last few months. Actually I’ve been to a couple of the SaaS meetups — it’s a great sense of community and you’ve got great people talking there. But now you’re working on this much bigger thing, SaaStock. What are some of the challenges around deciding to host a big conference? And going from nothing to actually hosting it? I know it hasn’t happened yet, but I’m sure you’ve come across some things along the way that you hadn’t expected. Alex: Yeah! It’s really hard work. I think when I initially decided that I was going to do SaaStock, I kind of thought for a moment that I would be doing this all myself. That was a very short moment. I’m pretty much on the conference full-time at the moment, as well as managing SaaScribe. I’ve got a guy that’s working with me. Chris, who’s helping me, he’s working on the demand generation and owning the ticket sales side of things. But we’re pretty much wearing many hats right now. We’re looking at bringing in a third full-timer already, because of the sheer workload we’ve given ourselves from the ambitions we have for SaaStock. Behind that we have a production company called Catapult Events. These are the guys that worked on Web Summit, and they even managed the production for the InsideIntercom World Tour. They manage the creative, the event management, etc. So what we need to do is focus on the sales and marketing side of things, and a few logistics. But there’s just so much work to do. The sheer amount of work for a conference of this size has been the main challenge. We’re capable of doing everything, even though we’re very new to the conference business. But it’s just the workload — there aren’t enough hours in the day, hence why I’m hiring. I think eventually we’ll need to grow out a decent-sized team. To do the conference justice, to do your vision justice, you can’t do it all yourself. Ed: It seems like you’re going for a pretty big event. I think if you look at conferences, particularly tech ones, along the timeline since their conception, most of them slowly grow. Is there anything that you can cutdown in the first iteration that makes things easier? Or do you have to go all out, straightaway? Alex: Well, we are kind of going all out in a way, but I think we are still being sensible. If you have a look at these tech conferences, when they start out, a lot of them start out on this magic number of 300 — 300 attendees for the first year. And then double or triple in size, from 300 to maybe 2000 in just year 2. Web Summit is an outlier wherein they started with 300 and in four or five years, they’re at 42,000. They’ve scaled incredibly. We did our market research in regard to SaaS companies and startups in Europe. But also the content is going to be relevant to a global SaaS audience. We’re hoping there will be a global SaaS community there. We’ve got folks coming in from North America and New Zealand. If I had gone with the number 300, just to be conservative, just because everybody else has been doing that, then I would have been disappointed talking to you today. Because we’re almost coming up on that mark in terms of tickets sold, and we’re still four months away. So I think we’ve given ourselves a good target. We’re working hard at that, and it’s very achievable. In terms of pure independent SaaS conferences, for a SaaS community, there aren’t that many. I guess the obvious one is SaaStr — and they had 5,000 in 2016, looking at 10,000 next year. The SaaS founders are hungry to go to these types of events and do business. I think your CEO, Nick, went to the first SaaStr and met some very important customers of ChartMogul today. So attending these conferences is very valuable for SaaS founders that sell to other SaaS companies, especially in the early days. We’ve got to deliver huge value to our delegates beyond the content, just through everything. Make sure everyone has a fantastic time so that everyone comes back next year. Building relationships, and a business, through conversation Ed: So I guess you’re still a salesperson at heart. How is it selling conference tickets or speaking spots? Is that something that’s difficult in the beginning when you don’t have an established event already? Are there any tips you have for people trying to recruit speakers or sell conference tickets? Alex: Yeah, definitely my sales background has helped. I know of a lot of people who are in the conference game and don’t have that sales background, and therefore haven’t done so well on the sponsorship side, for instance. That’s simply because they don’t have that natural inclination to send cold emails or pick up the phone, whereas I’m really used to that. I’ve been doing it for 11-12 years. Also, if I didn’t have the one year under my belt of SaaScribe, it would have been a totally different speaker lineup. It would have been really challenging. Even six months ago, through SaaScribe, I was strategically building local relationships, with people at Intercom, people like Christoph Janz etc. So when I told them about the vision of SaaStock, it was easier to secure those first speakers. I actually think the first speakers we got on board were Des Traynor, Christoph Janz, and Nikos of Workable. So the tip is: if you can land your first couple of speakers, and if they are good names, and if you’ve done that through building relationships — strategically, long term before your conference — then once you send an email to someone else, and you tell them who you have on board already, it makes it much easier. I think SaaScribe played a massive part in what SaaStock is today. It just gave me that little bit of credibility. People knew who I was when they received my email. That helped the curation part of what now is a really awesome, strong line-up. Ed: Yeah, that’s an interesting point actually and something I’ve noticed having done some podcasts at ChartMogul. Using that as a tool for either relationship building or even customer success is really interesting. We do a lot of content with out customers — we tell stories about how they grow their business and everything else related to the SaaS universe. And it’s almost as valuable for our customer relationship as it is for the listeners. I know you could argue that that’s a big investment, to go around and do a podcast with each of your customers to make them happy, but I think it’s a good point. And it’s something I’ve seen over the last few years. People value it and it turns into longer term relationships that you can leverage in the future. Alex: Yeah, absolutely. And even not just for your existing customer relationships, or having a podcast for ChartMogul’s customers… I’ve seen a lot where founders of SaaS companies are starting up their own podcasts and interviewing or recruiting guests, kind of as a sales tactic. They want to connect to this guest, the guest is flattered to be on the podcast, and at some point — I don’t know when — there’s probably going to be a conversation like, “Hey, what about our product? Would you like to try it out?” This is a great way to open doors. And it’s relationship building. That’s what it’s done for me from the SaaStock perspective. For SaaS founders, it might be interesting to try the podcast channel. Final words Ed: You’ve got a ton of great interviews on the site now, whether it be a podcast or a written piece. I guess you’ve learned quite a bit across those interviews. I’m wondering if you have a favorite and if there’s something you’ve learned from it that you didn’t know before. Alex: Yeah, I mean it’s a bit like asking which one of your kids is your favorite. Do I have to say I love each and every one of my podcasts the same? Well, I love the first one. We had Mark Roberge, Chief Revenue Officer of Hubspot. That was a really good coup, to get Mark to do a podcast’s first episode when there was no credibility about it. But clearly I wrote a good email that resonated with Mark and he was a great guy, and he agreed to do it. (Of course he had a book to promote at the time, so that helped.) That was really enjoyable. He gave incredible tips on building a sales acceleration machine. There are probably too many tips to mention so I suggest you listen to that particular episode of the SaaS Revolution show. Throughout all of them, I’m learning a ton. And I would say this has really ramped up my acceleration of knowledge on SaaS, hosting these podcasts. So I’m learning and hopefully my audience is learning at the same time. Ed: Okay I’ll let you get on. Before we go, is there anything you would like people to check out? Where can people find you? Alex: SaaScribe.com. If anyone hasn’t heard of it before, check it out. We think it’s a great, neutral resource for SaaS startup founders. Of course I have to get a cheeky plug in for SaaStock as well. If you’re a B2B SaaS founder, investor, or exec, then SaaStock will be the conference in 2016 where you can learn how to build a category leading business and turn your SaaS to 11. We’ll hopefully see you there! Beautiful Dublin, site of SaaStock this September. [Source: www.dublintown.ie]

[INST] The humble origins of SaaStock, Europe’s B2B SaaS conference [/INST]

SaaStock, the latest and poised-to-be greatest event for Europe’s SaaS community, is coming up on September 22. We’re really looking forward to being there in Dublin, hearing from industry leaders, and meeting people from around the world. In our anticipation, we transcribed our recent SaaS Open Mic podcast with Alex Theuma, founder of SaaScribe and SaaStock. Having started from scratch and now launching a large-scale event, Theuma has great insight to share about community building and getting involved in SaaS. Enjoy! Introducing a SaaSpreneur Ed: I was going to start by explaining your background and what you do. But I thought it would be cool if you do that instead. So if somebody asks you what you do, what would you tell them? Alex: It depends who asks me. To any lay person, I guess I could say I’m a “SaaS-preneur.” Actually that might confuse them even more… But I’m the founder of SaaScribe and SaaStock. In its simplest terms, that’s what I am. For those listening, SaaScribe is an online/offline community for SaaS startups, which includes the blog Saascribe.com, the podcast the SaaS Revolution Show, and a Slack channel (SaaS Founders Club). All of those properties live in the online world. And toward the end of last year we started thinking — if you’re talking community, you have to do more in the offline world. You can’t just be sitting at your desk in your home office, uploading content and tweeting, and building a community that way. You need to get out of the office and try to do more offline. So we’ve been hosting SaaS meetups. I’m not content with doing those just in the UK, so we’ve done some in the UK, in Dublin, even one in Berlin. We’ve done about 8 so far. And finally a kind of 10x meetup, which will be SaaStock — the premiere European conference for B2B SaaS founders, execs, and investors, which is taking place on the 22nd of September in Dublin. It’s hopefully going to be very similar to some of the meetups we’ve had, but 10x. It’s going to be about networking, sharing valuable insights, and having a bit of fun as well. So yeah, that’s the long version of what it is that I do. [Editor’s note: I attended the SaaScribe meetup in Berlin, and it was great! Check out my recap of the “growth through retention” discussion.] SaaScribe, the independent SaaS community Ed: There are a few SaaS-related communities out there. But I think pretty much all of them are in some way tied to a brand that is selling a product, and it’s really a side thing to grow an audience, for marketing purposes or brand recognition. But SaaScribe struck me as something outside of that. Because you are building this community pretty much from scratch. What’s the reason behind that? Why did you do it? Alex: I guess I started SaaScribe because… I spent 11 years or so in sales, in tech sales selling IT support, selling cloud computing which merged into saas. SaaS was the only thing out of those different services and products that I found exciting, sexy, and cool. It connected with me a lot more than the others. Then I found out that the people working in SaaS were also exciting, sexy, and cool, right? The truly great thing I found within this SaaS space is that people were willing to share, to help others learn. It was something I’d never experienced before and something I wanted to be a part of. So what I decided to do is to go a little out of my comfort zone, to start writing some content — stuff I knew that, in comparison to some of the thought leaders out there (like Lincoln Murphy), was very inconsequential. But it was something I wanted to do. The idea of SaaScribe resonated with part of the SaaS startup community, more so than the initial content of the early days, which was a bit ropey at best. It took off from there. One day I was thinking actually I’m quite passionate about SaaS. I’m reading the thought leaders, and a lot of the stuff is marketing for a product or a company. There wasn’t anything or anybody doing it independently and unbiased. Without portfolio companies of VCs. So to come with a neutral, non-biased perspective, not trying to market or sell anything in the early days, that was our idea. And the idea took hold and the first couple of months we saw some rocketship growth in terms of traffic. And ever since then we’ve just been continuing with it. Ed: Do you think you have a benefit in not being tied to a marketing projecting or a brand? Do you think that’s what allowed you to see this growth so early on? Alex: Yes, I think so. But I think there are pros and cons to both. I think so because we were (and still are) independent. Somehow that struck a chord with the community. Also the initial volume of content that we put out was probably a bit too much. But it meant that people knew about us by default because we were putting out 4-5 pieces of content per week. And they were surprised it was only two of us behind it at the time. People within the SaaS community are curious and hungry to learn, so their curious nature took them to SaaScribe, to sign up for yet another newsletter. We’ve kept many of those on board. There are drawbacks. I wouldn’t say we’re necessarily competing with the likes of HubSpot’s blog or Close.io. But these are companies that have a lot of money and can invest a lot into the production of content and podcasts and also promotion, to go beyond what we can as a bootstrapped self-funded startup. So it can be difficult if we were looking for specific metrics or numbers, like 1000 post reads. It’s not easy to obtain that every time. Delivering real value as a SaaS community Ed: So it’s 2016. A lot of people in this space pushing out content. And a lot of it, if I’m honest, is mediocre quality. There’s a lot of noise. Let’s say I’m trying to start a community in a vertical today. What kind of approach would you suggest? How did you do it with SaaScribe? Did you just start writing, or was there more of a method to it? Alex: I don’t think there was really a method to it in the beginning. It was just: starting to write. We got set up on WordPress and started putting out our first few posts. And probably, to be honest, we were still trying to find direction. “Are we still truly a community or are we gonna go down the route of doing news?” So in the early days we weren’t really 100% on what was happening with it. But then, I can’t remember why, but I decided I’d start doing the podcast. The first guest was Mark Roberge. That continued and we just saw the first anniversary of the podcast, have probably done about 40 or so of those since then. And I think the other thing was that it just started to grow. There wasn’t this grand master plan like, “Okay, to build a community, this is what we’re going to need to do. We need all these offline channels and these online channels.” It just all fell into place and was pretty logical. There was no one doing SaaS meetups in Europe or the UK, so wouldn’t it make sense that what I’m doing with SaaScribe, I take the initiative and do meetups? And that’s what happened. If someone were going to do it today, and they knew they wanted to set up a community, I guess those communities can take different forms. There’s the Reddits and the Growthhackers — you can find software out there that will give you that kind of online community. Or do you want to do content and drive engagement through that? Therefore having some kind of blog might be your option. But Slack communities are really interesting as well. And I’ve seen a lot of people in the last year going in that direction. Some succeeding and some failing, because I think it’s quite difficult to — I don’t want to say moderate — but the level of communication, when you only have one channel, you can kind of feel like you’re drowning at times. But still, very interesting. Ed: Yeah, I think I’m logged into about nine Slack communities now. And it’s kind of proven to me the breaking points where Slack no longer scales well for the user. I think there’s something really interesting there, and I have had some occasions where it’s great to casually chat with people. But I’m at the point where my Slack doesn’t ever have an unread notification on it. That’s the problem. Alex: Yeah. I joined one or two before I started my own. And the problem I found with those was that you have about 40 people in the community, and there would be two channels: a “general” channel and a “please share” channel, for sharing content. So if I hadn’t logged in for a day or two, there would be 50 or so unread notificat ions. And I was never going to read all of those. And when you’re on it, the constant notifications can become a bit of a distraction or annoyance. So when I set up SaaS Founders Club, which is strictly for SaaS founders only, I knew these are very busy people who perhaps want fewer distractions. But also I had to engineer it so they can get value out of it. We’ve got loads of different channels. Actually in the main channels, there isn’t a lot of activity. A lot of the activity is done in direct messaging. So the value is being served from this community, but it’s being done in a manner that doesn’t disturb everyone publicly. So that seems to be working well and that’s growing. I think if you get it right with Slack, it’s a good forum for a community. From community to conference: launching SaaStock Ed: You mentioned that you’ve slowly moved into events in the last few months. Actually I’ve been to a couple of the SaaS meetups — it’s a great sense of community and you’ve got great people talking there. But now you’re working on this much bigger thing, SaaStock. What are some of the challenges around deciding to host a big conference? And going from nothing to actually hosting it? I know it hasn’t happened yet, but I’m sure you’ve come across some things along the way that you hadn’t expected. Alex: Yeah! It’s really hard work. I think when I initially decided that I was going to do SaaStock, I kind of thought for a moment that I would be doing this all myself. That was a very short moment. I’m pretty much on the conference full-time at the moment, as well as managing SaaScribe. I’ve got a guy that’s working with me. Chris, who’s helping me, he’s working on the demand generation and owning the ticket sales side of things. But we’re pretty much wearing many hats right now. We’re looking at bringing in a third full-timer already, because of the sheer workload we’ve given ourselves from the ambitions we have for SaaStock. Behind that we have a production company called Catapult Events. These are the guys that worked on Web Summit, and they even managed the production for the InsideIntercom World Tour. They manage the creative, the event management, etc. So what we need to do is focus on the sales and marketing side of things, and a few logistics. But there’s just so much work to do. The sheer amount of work for a conference of this size has been the main challenge. We’re capable of doing everything, even though we’re very new to the conference business. But it’s just the workload — there aren’t enough hours in the day, hence why I’m hiring. I think eventually we’ll need to grow out a decent-sized team. To do the conference justice, to do your vision justice, you can’t do it all yourself. Ed: It seems like you’re going for a pretty big event. I think if you look at conferences, particularly tech ones, along the timeline since their conception, most of them slowly grow. Is there anything that you can cutdown in the first iteration that makes things easier? Or do you have to go all out, straightaway? Alex: Well, we are kind of going all out in a way, but I think we are still being sensible. If you have a look at these tech conferences, when they start out, a lot of them start out on this magic number of 300 — 300 attendees for the first year. And then double or triple in size, from 300 to maybe 2000 in just year 2. Web Summit is an outlier wherein they started with 300 and in four or five years, they’re at 42,000. They’ve scaled incredibly. We did our market research in regard to SaaS companies and startups in Europe. But also the content is going to be relevant to a global SaaS audience. We’re hoping there will be a global SaaS community there. We’ve got folks coming in from North America and New Zealand. If I had gone with the number 300, just to be conservative, just because everybody else has been doing that, then I would have been disappointed talking to you today. Because we’re almost coming up on that mark in terms of tickets sold, and we’re still four months away. So I think we’ve given ourselves a good target. We’re working hard at that, and it’s very achievable. In terms of pure independent SaaS conferences, for a SaaS community, there aren’t that many. I guess the obvious one is SaaStr — and they had 5,000 in 2016, looking at 10,000 next year. The SaaS founders are hungry to go to these types of events and do business. I think your CEO, Nick, went to the first SaaStr and met some very important customers of ChartMogul today. So attending these conferences is very valuable for SaaS founders that sell to other SaaS companies, especially in the early days. We’ve got to deliver huge value to our delegates beyond the content, just through everything. Make sure everyone has a fantastic time so that everyone comes back next year. Building relationships, and a business, through conversation Ed: So I guess you’re still a salesperson at heart. How is it selling conference tickets or speaking spots? Is that something that’s difficult in the beginning when you don’t have an established event already? Are there any tips you have for people trying to recruit speakers or sell conference tickets? Alex: Yeah, definitely my sales background has helped. I know of a lot of people who are in the conference game and don’t have that sales background, and therefore haven’t done so well on the sponsorship side, for instance. That’s simply because they don’t have that natural inclination to send cold emails or pick up the phone, whereas I’m really used to that. I’ve been doing it for 11-12 years. Also, if I didn’t have the one year under my belt of SaaScribe, it would have been a totally different speaker lineup. It would have been really challenging. Even six months ago, through SaaScribe, I was strategically building local relationships, with people at Intercom, people like Christoph Janz etc. So when I told them about the vision of SaaStock, it was easier to secure those first speakers. I actually think the first speakers we got on board were Des Traynor, Christoph Janz, and Nikos of Workable. So the tip is: if you can land your first couple of speakers, and if they are good names, and if you’ve done that through building relationships — strategically, long term before your conference — then once you send an email to someone else, and you tell them who you have on board already, it makes it much easier. I think SaaScribe played a massive part in what SaaStock is today. It just gave me that little bit of credibility. People knew who I was when they received my email. That helped the curation part of what now is a really awesome, strong line-up. Ed: Yeah, that’s an interesting point actually and something I’ve noticed having done some podcasts at ChartMogul. Using that as a tool for either relationship building or even customer success is really interesting. We do a lot of content with out customers — we tell stories about how they grow their business and everything else related to the SaaS universe. And it’s almost as valuable for our customer relationship as it is for the listeners. I know you could argue that that’s a big investment, to go around and do a podcast with each of your customers to make them happy, but I think it’s a good point. And it’s something I’ve seen over the last few years. People value it and it turns into longer term relationships that you can leverage in the future. Alex: Yeah, absolutely. And even not just for your existing customer relationships, or having a podcast for ChartMogul’s customers… I’ve seen a lot where founders of SaaS companies are starting up their own podcasts and interviewing or recruiting guests, kind of as a sales tactic. They want to connect to this guest, the guest is flattered to be on the podcast, and at some point — I don’t know when — there’s probably going to be a conversation like, “Hey, what about our product? Would you like to try it out?” This is a great way to open doors. And it’s relationship building. That’s what it’s done for me from the SaaStock perspective. For SaaS founders, it might be interesting to try the podcast channel. Final words Ed: You’ve got a ton of great interviews on the site now, whether it be a podcast or a written piece. I guess you’ve learned quite a bit across those interviews. I’m wondering if you have a favorite and if there’s something you’ve learned from it that you didn’t know before. Alex: Yeah, I mean it’s a bit like asking which one of your kids is your favorite. Do I have to say I love each and every one of my podcasts the same? Well, I love the first one. We had Mark Roberge, Chief Revenue Officer of Hubspot. That was a really good coup, to get Mark to do a podcast’s first episode when there was no credibility about it. But clearly I wrote a good email that resonated with Mark and he was a great guy, and he agreed to do it. (Of course he had a book to promote at the time, so that helped.) That was really enjoyable. He gave incredible tips on building a sales acceleration machine. There are probably too many tips to mention so I suggest you listen to that particular episode of the SaaS Revolution show. Throughout all of them, I’m learning a ton. And I would say this has really ramped up my acceleration of knowledge on SaaS, hosting these podcasts. So I’m learning and hopefully my audience is learning at the same time. Ed: Okay I’ll let you get on. Before we go, is there anything you would like people to check out? Where can people find you? Alex: SaaScribe.com. If anyone hasn’t heard of it before, check it out. We think it’s a great, neutral resource for SaaS startup founders. Of course I have to get a cheeky plug in for SaaStock as well. If you’re a B2B SaaS founder, investor, or exec, then SaaStock will be the conference in 2016 where you can learn how to build a category leading business and turn your SaaS to 11. We’ll hopefully see you there! Beautiful Dublin, site of SaaStock this September. [Source: www.dublintown.ie]

<sys> [INST] The humble origins of SaaStock, Europe’s B2B SaaS conference [/INST] SaaStock, the latest and poised-to-be greatest event for Europe’s SaaS community, is coming up on September 22. We’re really looking forward to being there in Dublin, hearing from industry leaders, and meeting people from around the world. In our anticipation, we transcribed our recent SaaS Open Mic podcast with Alex Theuma, founder of SaaScribe and SaaStock. Having started from scratch and now launching a large-scale event, Theuma has great insight to share about community building and getting involved in SaaS. Enjoy! Introducing a SaaSpreneur Ed: I was going to start by explaining your background and what you do. But I thought it would be cool if you do that instead. So if somebody asks you what you do, what would you tell them? Alex: It depends who asks me. To any lay person, I guess I could say I’m a “SaaS-preneur.” Actually that might confuse them even more… But I’m the founder of SaaScribe and SaaStock. In its simplest terms, that’s what I am. For those listening, SaaScribe is an online/offline community for SaaS startups, which includes the blog Saascribe.com, the podcast the SaaS Revolution Show, and a Slack channel (SaaS Founders Club). All of those properties live in the online world. And toward the end of last year we started thinking — if you’re talking community, you have to do more in the offline world. You can’t just be sitting at your desk in your home office, uploading content and tweeting, and building a community that way. You need to get out of the office and try to do more offline. So we’ve been hosting SaaS meetups. I’m not content with doing those just in the UK, so we’ve done some in the UK, in Dublin, even one in Berlin. We’ve done about 8 so far. And finally a kind of 10x meetup, which will be SaaStock — the premiere European conference for B2B SaaS founders, execs, and investors, which is taking place on the 22nd of September in Dublin. It’s hopefully going to be very similar to some of the meetups we’ve had, but 10x. It’s going to be about networking, sharing valuable insights, and having a bit of fun as well. So yeah, that’s the long version of what it is that I do. [Editor’s note: I attended the SaaScribe meetup in Berlin, and it was great! Check out my recap of the “growth through retention” discussion.] SaaScribe, the independent SaaS community Ed: There are a few SaaS-related communities out there. But I think pretty much all of them are in some way tied to a brand that is selling a product, and it’s really a side thing to grow an audience, for marketing purposes or brand recognition. But SaaScribe struck me as something outside of that. Because you are building this community pretty much from scratch. What’s the reason behind that? Why did you do it? Alex: I guess I started SaaScribe because… I spent 11 years or so in sales, in tech sales selling IT support, selling cloud computing which merged into saas. SaaS was the only thing out of those different services and products that I found exciting, sexy, and cool. It connected with me a lot more than the others. Then I found out that the people working in SaaS were also exciting, sexy, and cool, right? The truly great thing I found within this SaaS space is that people were willing to share, to help others learn. It was something I’d never experienced before and something I wanted to be a part of. So what I decided to do is to go a little out of my comfort zone, to start writing some content — stuff I knew that, in comparison to some of the thought leaders out there (like Lincoln Murphy), was very inconsequential. But it was something I wanted to do. The idea of SaaScribe resonated with part of the SaaS startup community, more so than the initial content of the early days, which was a bit ropey at best. It took off from there. One day I was thinking actually I’m quite passionate about SaaS. I’m reading the thought leaders, and a lot of the stuff is marketing for a product or a company. There wasn’t anything or anybody doing it independently and unbiased. Without portfolio companies of VCs. So to come with a neutral, non-biased perspective, not trying to market or sell anything in the early days, that was our idea. And the idea took hold and the first couple of months we saw some rocketship growth in terms of traffic. And ever since then we’ve just been continuing with it. Ed: Do you think you have a benefit in not being tied to a marketing projecting or a brand? Do you think that’s what allowed you to see this growth so early on? Alex: Yes, I think so. But I think there are pros and cons to both. I think so because we were (and still are) independent. Somehow that struck a chord with the community. Also the initial volume of content that we put out was probably a bit too much. But it meant that people knew about us by default because we were putting out 4-5 pieces of content per week. And they were surprised it was only two of us behind it at the time. People within the SaaS community are curious and hungry to learn, so their curious nature took them to SaaScribe, to sign up for yet another newsletter. We’ve kept many of those on board. There are drawbacks. I wouldn’t say we’re necessarily competing with the likes of HubSpot’s blog or Close.io. But these are companies that have a lot of money and can invest a lot into the production of content and podcasts and also promotion, to go beyond what we can as a bootstrapped self-funded startup. So it can be difficult if we were looking for specific metrics or numbers, like 1000 post reads. It’s not easy to obtain that every time. Delivering real value as a SaaS community Ed: So it’s 2016. A lot of people in this space pushing out content. And a lot of it, if I’m honest, is mediocre quality. There’s a lot of noise. Let’s say I’m trying to start a community in a vertical today. What kind of approach would you suggest? How did you do it with SaaScribe? Did you just start writing, or was there more of a method to it? Alex: I don’t think there was really a method to it in the beginning. It was just: starting to write. We got set up on WordPress and started putting out our first few posts. And probably, to be honest, we were still trying to find direction. “Are we still truly a community or are we gonna go down the route of doing news?” So in the early days we weren’t really 100% on what was happening with it. But then, I can’t remember why, but I decided I’d start doing the podcast. The first guest was Mark Roberge. That continued and we just saw the first anniversary of the podcast, have probably done about 40 or so of those since then. And I think the other thing was that it just started to grow. There wasn’t this grand master plan like, “Okay, to build a community, this is what we’re going to need to do. We need all these offline channels and these online channels.” It just all fell into place and was pretty logical. There was no one doing SaaS meetups in Europe or the UK, so wouldn’t it make sense that what I’m doing with SaaScribe, I take the initiative and do meetups? And that’s what happened. If someone were going to do it today, and they knew they wanted to set up a community, I guess those communities can take different forms. There’s the Reddits and the Growthhackers — you can find software out there that will give you that kind of online community. Or do you want to do content and drive engagement through that? Therefore having some kind of blog might be your option. But Slack communities are really interesting as well. And I’ve seen a lot of people in the last year going in that direction. Some succeeding and some failing, because I think it’s quite difficult to — I don’t want to say moderate — but the level of communication, when you only have one channel, you can kind of feel like you’re drowning at times. But still, very interesting. Ed: Yeah, I think I’m logged into about nine Slack communities now. And it’s kind of proven to me the breaking points where Slack no longer scales well for the user. I think there’s something really interesting there, and I have had some occasions where it’s great to casually chat with people. But I’m at the point where my Slack doesn’t ever have an unread notification on it. That’s the problem. Alex: Yeah. I joined one or two before I started my own. And the problem I found with those was that you have about 40 people in the community, and there would be two channels: a “general” channel and a “please share” channel, for sharing content. So if I hadn’t logged in for a day or two, there would be 50 or so unread notificat ions. And I was never going to read all of those. And when you’re on it, the constant notifications can become a bit of a distraction or annoyance. So when I set up SaaS Founders Club, which is strictly for SaaS founders only, I knew these are very busy people who perhaps want fewer distractions. But also I had to engineer it so they can get value out of it. We’ve got loads of different channels. Actually in the main channels, there isn’t a lot of activity. A lot of the activity is done in direct messaging. So the value is being served from this community, but it’s being done in a manner that doesn’t disturb everyone publicly. So that seems to be working well and that’s growing. I think if you get it right with Slack, it’s a good forum for a community. From community to conference: launching SaaStock Ed: You mentioned that you’ve slowly moved into events in the last few months. Actually I’ve been to a couple of the SaaS meetups — it’s a great sense of community and you’ve got great people talking there. But now you’re working on this much bigger thing, SaaStock. What are some of the challenges around deciding to host a big conference? And going from nothing to actually hosting it? I know it hasn’t happened yet, but I’m sure you’ve come across some things along the way that you hadn’t expected. Alex: Yeah! It’s really hard work. I think when I initially decided that I was going to do SaaStock, I kind of thought for a moment that I would be doing this all myself. That was a very short moment. I’m pretty much on the conference full-time at the moment, as well as managing SaaScribe. I’ve got a guy that’s working with me. Chris, who’s helping me, he’s working on the demand generation and owning the ticket sales side of things. But we’re pretty much wearing many hats right now. We’re looking at bringing in a third full-timer already, because of the sheer workload we’ve given ourselves from the ambitions we have for SaaStock. Behind that we have a production company called Catapult Events. These are the guys that worked on Web Summit, and they even managed the production for the InsideIntercom World Tour. They manage the creative, the event management, etc. So what we need to do is focus on the sales and marketing side of things, and a few logistics. But there’s just so much work to do. The sheer amount of work for a conference of this size has been the main challenge. We’re capable of doing everything, even though we’re very new to the conference business. But it’s just the workload — there aren’t enough hours in the day, hence why I’m hiring. I think eventually we’ll need to grow out a decent-sized team. To do the conference justice, to do your vision justice, you can’t do it all yourself. Ed: It seems like you’re going for a pretty big event. I think if you look at conferences, particularly tech ones, along the timeline since their conception, most of them slowly grow. Is there anything that you can cutdown in the first iteration that makes things easier? Or do you have to go all out, straightaway? Alex: Well, we are kind of going all out in a way, but I think we are still being sensible. If you have a look at these tech conferences, when they start out, a lot of them start out on this magic number of 300 — 300 attendees for the first year. And then double or triple in size, from 300 to maybe 2000 in just year 2. Web Summit is an outlier wherein they started with 300 and in four or five years, they’re at 42,000. They’ve scaled incredibly. We did our market research in regard to SaaS companies and startups in Europe. But also the content is going to be relevant to a global SaaS audience. We’re hoping there will be a global SaaS community there. We’ve got folks coming in from North America and New Zealand. If I had gone with the number 300, just to be conservative, just because everybody else has been doing that, then I would have been disappointed talking to you today. Because we’re almost coming up on that mark in terms of tickets sold, and we’re still four months away. So I think we’ve given ourselves a good target. We’re working hard at that, and it’s very achievable. In terms of pure independent SaaS conferences, for a SaaS community, there aren’t that many. I guess the obvious one is SaaStr — and they had 5,000 in 2016, looking at 10,000 next year. The SaaS founders are hungry to go to these types of events and do business. I think your CEO, Nick, went to the first SaaStr and met some very important customers of ChartMogul today. So attending these conferences is very valuable for SaaS founders that sell to other SaaS companies, especially in the early days. We’ve got to deliver huge value to our delegates beyond the content, just through everything. Make sure everyone has a fantastic time so that everyone comes back next year. Building relationships, and a business, through conversation Ed: So I guess you’re still a salesperson at heart. How is it selling conference tickets or speaking spots? Is that something that’s difficult in the beginning when you don’t have an established event already? Are there any tips you have for people trying to recruit speakers or sell conference tickets? Alex: Yeah, definitely my sales background has helped. I know of a lot of people who are in the conference game and don’t have that sales background, and therefore haven’t done so well on the sponsorship side, for instance. That’s simply because they don’t have that natural inclination to send cold emails or pick up the phone, whereas I’m really used to that. I’ve been doing it for 11-12 years. Also, if I didn’t have the one year under my belt of SaaScribe, it would have been a totally different speaker lineup. It would have been really challenging. Even six months ago, through SaaScribe, I was strategically building local relationships, with people at Intercom, people like Christoph Janz etc. So when I told them about the vision of SaaStock, it was easier to secure those first speakers. I actually think the first speakers we got on board were Des Traynor, Christoph Janz, and Nikos of Workable. So the tip is: if you can land your first couple of speakers, and if they are good names, and if you’ve done that through building relationships — strategically, long term before your conference — then once you send an email to someone else, and you tell them who you have on board already, it makes it much easier. I think SaaScribe played a massive part in what SaaStock is today. It just gave me that little bit of credibility. People knew who I was when they received my email. That helped the curation part of what now is a really awesome, strong line-up. Ed: Yeah, that’s an interesting point actually and something I’ve noticed having done some podcasts at ChartMogul. Using that as a tool for either relationship building or even customer success is really interesting. We do a lot of content with out customers — we tell stories about how they grow their business and everything else related to the SaaS universe. And it’s almost as valuable for our customer relationship as it is for the listeners. I know you could argue that that’s a big investment, to go around and do a podcast with each of your customers to make them happy, but I think it’s a good point. And it’s something I’ve seen over the last few years. People value it and it turns into longer term relationships that you can leverage in the future. Alex: Yeah, absolutely. And even not just for your existing customer relationships, or having a podcast for ChartMogul’s customers… I’ve seen a lot where founders of SaaS companies are starting up their own podcasts and interviewing or recruiting guests, kind of as a sales tactic. They want to connect to this guest, the guest is flattered to be on the podcast, and at some point — I don’t know when — there’s probably going to be a conversation like, “Hey, what about our product? Would you like to try it out?” This is a great way to open doors. And it’s relationship building. That’s what it’s done for me from the SaaStock perspective. For SaaS founders, it might be interesting to try the podcast channel. Final words Ed: You’ve got a ton of great interviews on the site now, whether it be a podcast or a written piece. I guess you’ve learned quite a bit across those interviews. I’m wondering if you have a favorite and if there’s something you’ve learned from it that you didn’t know before. Alex: Yeah, I mean it’s a bit like asking which one of your kids is your favorite. Do I have to say I love each and every one of my podcasts the same? Well, I love the first one. We had Mark Roberge, Chief Revenue Officer of Hubspot. That was a really good coup, to get Mark to do a podcast’s first episode when there was no credibility about it. But clearly I wrote a good email that resonated with Mark and he was a great guy, and he agreed to do it. (Of course he had a book to promote at the time, so that helped.) That was really enjoyable. He gave incredible tips on building a sales acceleration machine. There are probably too many tips to mention so I suggest you listen to that particular episode of the SaaS Revolution show. Throughout all of them, I’m learning a ton. And I would say this has really ramped up my acceleration of knowledge on SaaS, hosting these podcasts. So I’m learning and hopefully my audience is learning at the same time. Ed: Okay I’ll let you get on. Before we go, is there anything you would like people to check out? Where can people find you? Alex: SaaScribe.com. If anyone hasn’t heard of it before, check it out. We think it’s a great, neutral resource for SaaS startup founders. Of course I have to get a cheeky plug in for SaaStock as well. If you’re a B2B SaaS founder, investor, or exec, then SaaStock will be the conference in 2016 where you can learn how to build a category leading business and turn your SaaS to 11. We’ll hopefully see you there! Beautiful Dublin, site of SaaStock this September. [Source: www.dublintown.ie] </sys

Why Connect Ventures invests early in mission-driven founders. Ever wondered what metrics investors really want to see? Or the all-too-common mistakes founders make when pitching their startup? Ed visited the headquarters of Connect Ventures, a London-based VC focusing on early seed-stage investments in the technology space, to speak with Managing Partner Pietro Bezza. You have the chance to meet Connect Ventures, too. Sitar Teli, a fellow partner, will be at the SaaStock conference in Dublin on September 22, speaking about the SaaS VC landscape in Europe. Don’t miss it! Why invest at early stage? It’s all about the product. Ed: It’s really good to get a SaaS investor perspective. Let’s start at the beginning. I think it makes sense for you to describe what Connect Ventures is and what you guys do as a VC. Pietro: Yes, it’s something I wonder myself very often, especially when I try to explain my job to my parents or my five-year-old son. For both it’s an issue to get the full picture. So the way I like to think about what I do is to help extraordinary people to extraordinary things. The version for my kid is: “To help superheros turn the impossible to possible.” It works for him. But it’s true. Because our mission is to help exceptional talents, and you really need incredible personal traits and talented people in tech and design, in creativity. Our role is basically to help. I like the emphasis on the “help” part, because the fact is that venture capital is a service business at core. We provide capital, of course, and advice. But really, especially at Connect, we respect that it’s the founders team that really makes things happen, and our role is to support and to do whatever it takes to make them succeed. Ed: So you guys focus on early stage investments. My first question is why? Pietro: To take a step back to explain why we choose early stage — and also why Europe — the foundational vision for Connect Ventures, Sitar Teli, Bill Earner and myself in 2011, the three of us held one strong belief in our minds and our hearts: We really believe in privately-led companies. Because we think, in the end, a technology business is an innovation business. Okay, so I’m confessing my Italian Classics studies, but… “technology” comes from the Greek techne, which means “the art of crafting, to make things better.” So the technology business at heart, its role, is to make things better through technology, through innovation. And innovation, in the end, is the product. So innovation comes from the product, and the founder can design a better experience. For that reason, we believe products come before the companies. So when we invest, we invest in product. Product must be the answer to every strategic puzzle. It should be the foundation of solving the problem the founders want to tackle, but also it should be the answer for growth, for hiring strategy. And it should be the start of the company but also the growth engine. I’m not saying other components aren’t indispensable to building an incredible category winner, like the market, and other functions like sales and marketing, etc. But I think a strong foundation in the DNA of the product is a necessary condition to succeed. So, the answer to your question. Product innovation is the most hard capability for a company to find. And it’s either something that is in the DNA from day one, or you count it out over time. And it’s this 0 to 1, to Product-Market Fit that happens at seed, where we invest — that’s where you really build the pillars for the company. And that’s why we like to be there. From founder to investor Ed: So you yourself have experience growing and leading a business prior to Connect Ventures. Can you explain what you did previously? And if it’s affected your work at Connect in any way? Pietro: Of course it affects my work at Connect because it must, but I don’t have yet a clear picture of how. I think it’s evolving over time. Just to give you the background: I had been an operator in marketing and branding for five years, and then at 28 I co-founded Neo Network in Milan. The idea was to bring digital interactive content online. It was the period where TV was dead, “the internet killed the TV,” and everyone gets their shows on demand, which is something that is still true now after fifteen years. We pivoted a couple times, and we were lucky. We were the right team at the right moment to pivot to mobile. We were very good at designing and building editorial content, and messaging apps, interactive stuff. We started distributing through TELCOs to consumer SMS applications and SMS content. And that was an incredible, booming segment to be in. Together with the UK, Italy and Japan were the leaders. From 2003-2007, was incredible growth — a period of hyper growth — from minus to $40M in revenue. 80 people, very profitable. Then we sold the company to Zodiac media, a big conglomerate in content production. Then I stayed three years. I was CEO of the digital unit of this group. After three years at this corporation I realized okay, I definitely want to keep working with startups. The smaller, the better. “Think small” is my mantra. Less is more, simplicity. This goes back to the product. So from my experience as a founder, mostly what I advise to the founders whom I invest in is to avoid overly fucked up ideas. As a founder myself [and now an investor], I tried also to learn it was a completely different era. Yes we developed apps, but back then it was just about being the first. For example, you were the only dating SMS app. It’s not like it is now, when you go onto app stores and there are 1000 others. So if your product is not 10x better, then you’re not going to exist. Also my company was European, and we didn’t raise a lot of money. Now instead we are doing the opposite: Product first, and once you get PMF, then accelerate. So I apply my experience more in management style, how you build the team, how to create a great culture in the company. More on the soft things, but not on the hard things, because my previous company wouldn’t be successful nowadays. Being solution-oriented and mission-driven Ed: You also mentioned that you sometimes make decisions based on a team, in the case where a product is not their yet or doesn’t exist yet. Can you tell me some of the qualities you can identify in a team that tell you it’s something that could be successful? Pietro: Yes. Overall every investor or every firm has a thesis or a style, and basically this criteria changes with a pendulum swinging between Product, Market, and Team. Some put more focus on market, some on product, some on team. Of course the team must be exceptional. But based on your VC style, the team could have a different relevancy. For us, the most important thing is that the founders or the team are mission-led or mission-driven. The most important question we ask is: “Why are you doing this?” What’s your purpose? Why are you spending ten years of your life and giving up other things for this? And when the answer is, “Because I think running a startup is cool; because I have an idea to do my own startup,” these are red flags for us. We really want to back people who don’t want to build a company — maybe they hate building companies! — but they couldn’t live without solving the problem they’re facing everyday. There wasn’t any solution they liked on the market so they say, “You know what, I’ll just create a better version for this problem.” Reinventing and reimagining something that could solve their problem. So when someone says, “Oh, I’ve been working and this has been my pet project for one year,” we say: “Great. In this case you really want to solve the problem and not build the company.” We call this Founder-Market Fit, technically — but it’s not just domain expertise. Because often we back dropouts. There are 22 or 23 year olds, so they have zero domain expertise in terms of professional knowledge of the sector or the network of people. They know nothing about the market players. Instead they have incredible insight into that specific problem. And I can give you a lot of examples of that. We just invested in a company in France, basically a marketplace for students to find great temporary jobs at companies. The four founders are four students who have been through the struggle of trying to find a job during their studies. So they said, “Why don’t we create a platform where someone selects the best students and the best companies and does the matchmaking?” They know nothing about the employment market because they are students, but they are students, so they totally have good insight into what you need to be served well in this market, with this target audience. There are too many reasons why we choose to invest in mission-driven companies: These people are solution driven, so they come with a product. The answer to the problem is designing and building a product. There’s no other way to tackle it. And again, we think the product is innovation and the way to the business, not vice versa. Being invested in mission driven founders is key for that. If you are really tied to your market or your category and you work for a purpose, then you will always be in it for the long run. You’re not going to be a flake. You’re not thinking “I see an opportunity, I want to seize it, I’ll build something and then I’m going to flake by selling it after two years.” Our seed fund is small, but our second fund is 50M pounds. It’s big enough that we need to be part of a big company; we’re investing for it to become a highly valuable company over time. So we need to partner with founders that can stay ten years and build big companies. And only someone who is mission-driven can expand the boundaries of his sector over time and go after big things. Innovation is very quick in cycles, and so if you’re not a product person, you can’t really re-innovate at the next technology change. Thats why we really, really, really — I can’t stress this more — why we stand by founder/CEO. We think that overtime, the CEO must be the founders. Because they imagined the company for the first time, they had the idea of the product. They created something out of nothing. So, when the first solution is no longer buyable, they can just reimagine again, without panicking. If you come to a company as CEO and the company has already grown, and then something changes, you panic and think, “Okay this isn’t going to last forever.” Founders are very good at creating, maybe not the best at maximizing something. But today we see technology companies keep surfing on all the changes. And only someone who really has a bond with the market, who can reimagine a product solution with great UX — that’s the key. The founder attributes important to Connect Ventures Ed: So basically you’re arguing that the founder is the best equipped person to innovate. Pietro: It’s by definition. Because again, the founder must be a learnable person. A product is not sufficient condition to succeed. A problem-centric, founder-mission founder is not in a sufficient condition to succeed. Of course once they build a product, they have to build a company. And they have to understand how to run a company. That’s a big thing! It’s about: organization, culture, communication, growth, money. And so the other attribute we really want to see is how learnable you are. That doesn’t mean that you shouldn’t be incredibly strongly opinionated. Because if you are on a mission, you really have to fight for your opinion. But you also have to be coachable and you have to listen. So the “strong opinions loosely held” kind of person is our ideal. We are totally fine if they are tractable or if they are difficult. There are founders we really like to work with because they are so open and so nice, and you also have great founders who you should work with… it takes a bit of your passion, let’s say, to work with them. But it’s incredibly rewarding anyway. They must be learnable, they must learn over time how to build things. And also stay dedicated to something. That is about the transition from a product person to a great company CEO. Ed: Do you think founders can learn those skills, or is this something that’s deeply rooted in people? Pietro: I think you can learn everything, pretty much. You have to want to learn. And you can learn how to learn! You have to have a mindset hungry for learning and you also have to apply and execute action to stay in a learnable position. For example, asking for feedback. Have the communication clear in your company. Have the culture in your company be of incredible candid feedback, because without feedback you can’t learn. You need this loop. You can learn how to be learnable over time. Also you need to understand your strengths and weaknesses. And once you learn that, you can focus on the things you’re good at and delegate the others. The SaaS metrics important to Connect Ventures Ed: I’m also interested to know about the flipside of the people stuff. There obviously comes a time when you need to measure and evaluate a business. You’re looking at a lot of pitchdecks and monitoring the business you’ve invested in. What are some of the key metrics or compass metrics that you like to see, that give you a good indicator? Pietro: I’m a big fan of the ChartMogul product, for SaaS, because it provides me with an immediate picture of how healthy is the business. Diving into the SaaS businesses, there are two metrics or criteria that I personally focus on. I’ll split it to pre-investment and after investment. One is “engagement.” And this varies from product to product, but for example — it could be a quantity measurement or a quality measurement, or both. For Typeform, it’s how many Typeforms a specific organization has created and distributed over time. That’s just about quantity. Of course you want to see the quality. You want to see how many people have completed a Typeform, too. After investment we stay for series A or B, so the company starts growing. This is where ChartMogul comes into play. I think MRR doesn’t lie. You can break down everything, get conclusions, break down the dynamics. In the end, MRR doesn’t lie. It encapsulates everything — what’s the ARPA? What’s your ability to expand with a certain customer and add an upsell? And on the negative, it shows your ability to retain your customers and where you have unhealthy churn. So definitely, after the investment, to evaluate the health of the business, MRR is the big important thing that we look at. MRR and all the movements. I’m not a big fan of CAC/LTV, because it’s very subjective. The way you define CAC and define LTV is a bit arbitrary and, for sure, I don’t care about it as investment criteria. Because I don’t have time to figure out how the metric is defined or built, and the founders optimize it for [funding rounds] anyway. Instead, once we are in the company, and we have much better access inside and understanding, then it is something we track. If you’d like to learn more about the SaaS metrics mentioned above, check out the Ultimate SaaS Metrics Cheat Sheet. Monitoring metrics and finding something exceptional Ed: Are there any big mistakes you see people making with metrics? Either at the pre-investment stage or post investment? Is there anything you see that’s instantly a red flag for you? Pietro: One mistake I did was to focus on MRR statically, without looking at how much MRR you’ve added in the last two or three months. It really matters where you see acceleration, deceleration. In under $50k MRR SaaS business, it can look the same as one with $150k MRR — it means nothing. What matters is how long it took you to get to that point; what’s your velocity? And if you can grow the MRR new business very quickly and efficiently, but there is also a big churn… Churn compounds, new business doesn’t. So the mistake could be just seeing “$40K MRR,” a big splash on the screen that tells you nothing. It tells you the cash in for the next month, but it doesn’t tell you if there is something exceptional. And personally, the way I invest, I need something exceptional. I don’t need fifteen good things. I need fourteen disaster things and something phenomenal. And this [phenomenal thing] could be a founder’s attribute, or a specific feature of the product or of the company. Ed: Do you have any examples of those? Pietro: Sure. Typeform. There were a lot of good things and a lot of bad things, we invested so early. Entire pieces of the organization were not there. And some investors may see that and say, “Well why would you invest? They don’t have this and this.” We are totally fine with that. We want to see some incredible, actionable element. So with Typeform, one was founder’s attribute. They are designer geniuses. The solution they had in their heads and how they executed it is phenomenal. In its simplicity, it is incredible. They didn’t invent anything; forms and surveys have been around for years. But what they did do was make them sexy, make them fun, and make them conversional. And the public vision on this is incredible. So we think that adding extraordinary design and user experience talent, in the market and category where Typeform wanted to be, is pivotal. Ed: Awesome. Thanks very much. It’s been great to chat. Pietro: Thank you, it’s been a pleasure.

[INST] Why Connect Ventures invests early in mission-driven founders [/INST]

Ever wondered what metrics investors really want to see? Or the all-too-common mistakes founders make when pitching their startup? Ed visited the headquarters of Connect Ventures, a London-based VC focusing on early seed-stage investments in the technology space, to speak with Managing Partner Pietro Bezza. You have the chance to meet Connect Ventures, too. Sitar Teli, a fellow partner, will be at the SaaStock conference in Dublin on September 22, speaking about the SaaS VC landscape in Europe. Don’t miss it! Why invest at early stage? It’s all about the product. Ed: It’s really good to get a SaaS investor perspective. Let’s start at the beginning. I think it makes sense for you to describe what Connect Ventures is and what you guys do as a VC. Pietro: Yes, it’s something I wonder myself very often, especially when I try to explain my job to my parents or my five-year-old son. For both it’s an issue to get the full picture. So the way I like to think about what I do is to help extraordinary people to extraordinary things. The version for my kid is: “To help superheros turn the impossible to possible.” It works for him. But it’s true. Because our mission is to help exceptional talents, and you really need incredible personal traits and talented people in tech and design, in creativity. Our role is basically to help. I like the emphasis on the “help” part, because the fact is that venture capital is a service business at core. We provide capital, of course, and advice. But really, especially at Connect, we respect that it’s the founders team that really makes things happen, and our role is to support and to do whatever it takes to make them succeed. Ed: So you guys focus on early stage investments. My first question is why? Pietro: To take a step back to explain why we choose early stage — and also why Europe — the foundational vision for Connect Ventures, Sitar Teli, Bill Earner and myself in 2011, the three of us held one strong belief in our minds and our hearts: We really believe in privately-led companies. Because we think, in the end, a technology business is an innovation business. Okay, so I’m confessing my Italian Classics studies, but… “technology” comes from the Greek techne, which means “the art of crafting, to make things better.” So the technology business at heart, its role, is to make things better through technology, through innovation. And innovation, in the end, is the product. So innovation comes from the product, and the founder can design a better experience. For that reason, we believe products come before the companies. So when we invest, we invest in product. Product must be the answer to every strategic puzzle. It should be the foundation of solving the problem the founders want to tackle, but also it should be the answer for growth, for hiring strategy. And it should be the start of the company but also the growth engine. I’m not saying other components aren’t indispensable to building an incredible category winner, like the market, and other functions like sales and marketing, etc. But I think a strong foundation in the DNA of the product is a necessary condition to succeed. So, the answer to your question. Product innovation is the most hard capability for a company to find. And it’s either something that is in the DNA from day one, or you count it out over time. And it’s this 0 to 1, to Product-Market Fit that happens at seed, where we invest — that’s where you really build the pillars for the company. And that’s why we like to be there. From founder to investor Ed: So you yourself have experience growing and leading a business prior to Connect Ventures. Can you explain what you did previously? And if it’s affected your work at Connect in any way? Pietro: Of course it affects my work at Connect because it must, but I don’t have yet a clear picture of how. I think it’s evolving over time. Just to give you the background: I had been an operator in marketing and branding for five years, and then at 28 I co-founded Neo Network in Milan. The idea was to bring digital interactive content online. It was the period where TV was dead, “the internet killed the TV,” and everyone gets their shows on demand, which is something that is still true now after fifteen years. We pivoted a couple times, and we were lucky. We were the right team at the right moment to pivot to mobile. We were very good at designing and building editorial content, and messaging apps, interactive stuff. We started distributing through TELCOs to consumer SMS applications and SMS content. And that was an incredible, booming segment to be in. Together with the UK, Italy and Japan were the leaders. From 2003-2007, was incredible growth — a period of hyper growth — from minus to $40M in revenue. 80 people, very profitable. Then we sold the company to Zodiac media, a big conglomerate in content production. Then I stayed three years. I was CEO of the digital unit of this group. After three years at this corporation I realized okay, I definitely want to keep working with startups. The smaller, the better. “Think small” is my mantra. Less is more, simplicity. This goes back to the product. So from my experience as a founder, mostly what I advise to the founders whom I invest in is to avoid overly fucked up ideas. As a founder myself [and now an investor], I tried also to learn it was a completely different era. Yes we developed apps, but back then it was just about being the first. For example, you were the only dating SMS app. It’s not like it is now, when you go onto app stores and there are 1000 others. So if your product is not 10x better, then you’re not going to exist. Also my company was European, and we didn’t raise a lot of money. Now instead we are doing the opposite: Product first, and once you get PMF, then accelerate. So I apply my experience more in management style, how you build the team, how to create a great culture in the company. More on the soft things, but not on the hard things, because my previous company wouldn’t be successful nowadays. Being solution-oriented and mission-driven Ed: You also mentioned that you sometimes make decisions based on a team, in the case where a product is not their yet or doesn’t exist yet. Can you tell me some of the qualities you can identify in a team that tell you it’s something that could be successful? Pietro: Yes. Overall every investor or every firm has a thesis or a style, and basically this criteria changes with a pendulum swinging between Product, Market, and Team. Some put more focus on market, some on product, some on team. Of course the team must be exceptional. But based on your VC style, the team could have a different relevancy. For us, the most important thing is that the founders or the team are mission-led or mission-driven. The most important question we ask is: “Why are you doing this?” What’s your purpose? Why are you spending ten years of your life and giving up other things for this? And when the answer is, “Because I think running a startup is cool; because I have an idea to do my own startup,” these are red flags for us. We really want to back people who don’t want to build a company — maybe they hate building companies! — but they couldn’t live without solving the problem they’re facing everyday. There wasn’t any solution they liked on the market so they say, “You know what, I’ll just create a better version for this problem.” Reinventing and reimagining something that could solve their problem. So when someone says, “Oh, I’ve been working and this has been my pet project for one year,” we say: “Great. In this case you really want to solve the problem and not build the company.” We call this Founder-Market Fit, technically — but it’s not just domain expertise. Because often we back dropouts. There are 22 or 23 year olds, so they have zero domain expertise in terms of professional knowledge of the sector or the network of people. They know nothing about the market players. Instead they have incredible insight into that specific problem. And I can give you a lot of examples of that. We just invested in a company in France, basically a marketplace for students to find great temporary jobs at companies. The four founders are four students who have been through the struggle of trying to find a job during their studies. So they said, “Why don’t we create a platform where someone selects the best students and the best companies and does the matchmaking?” They know nothing about the employment market because they are students, but they are students, so they totally have good insight into what you need to be served well in this market, with this target audience. There are too many reasons why we choose to invest in mission-driven companies: These people are solution driven, so they come with a product. The answer to the problem is designing and building a product. There’s no other way to tackle it. And again, we think the product is innovation and the way to the business, not vice versa. Being invested in mission driven founders is key for that. If you are really tied to your market or your category and you work for a purpose, then you will always be in it for the long run. You’re not going to be a flake. You’re not thinking “I see an opportunity, I want to seize it, I’ll build something and then I’m going to flake by selling it after two years.” Our seed fund is small, but our second fund is 50M pounds. It’s big enough that we need to be part of a big company; we’re investing for it to become a highly valuable company over time. So we need to partner with founders that can stay ten years and build big companies. And only someone who is mission-driven can expand the boundaries of his sector over time and go after big things. Innovation is very quick in cycles, and so if you’re not a product person, you can’t really re-innovate at the next technology change. Thats why we really, really, really — I can’t stress this more — why we stand by founder/CEO. We think that overtime, the CEO must be the founders. Because they imagined the company for the first time, they had the idea of the product. They created something out of nothing. So, when the first solution is no longer buyable, they can just reimagine again, without panicking. If you come to a company as CEO and the company has already grown, and then something changes, you panic and think, “Okay this isn’t going to last forever.” Founders are very good at creating, maybe not the best at maximizing something. But today we see technology companies keep surfing on all the changes. And only someone who really has a bond with the market, who can reimagine a product solution with great UX — that’s the key. The founder attributes important to Connect Ventures Ed: So basically you’re arguing that the founder is the best equipped person to innovate. Pietro: It’s by definition. Because again, the founder must be a learnable person. A product is not sufficient condition to succeed. A problem-centric, founder-mission founder is not in a sufficient condition to succeed. Of course once they build a product, they have to build a company. And they have to understand how to run a company. That’s a big thing! It’s about: organization, culture, communication, growth, money. And so the other attribute we really want to see is how learnable you are. That doesn’t mean that you shouldn’t be incredibly strongly opinionated. Because if you are on a mission, you really have to fight for your opinion. But you also have to be coachable and you have to listen. So the “strong opinions loosely held” kind of person is our ideal. We are totally fine if they are tractable or if they are difficult. There are founders we really like to work with because they are so open and so nice, and you also have great founders who you should work with… it takes a bit of your passion, let’s say, to work with them. But it’s incredibly rewarding anyway. They must be learnable, they must learn over time how to build things. And also stay dedicated to something. That is about the transition from a product person to a great company CEO. Ed: Do you think founders can learn those skills, or is this something that’s deeply rooted in people? Pietro: I think you can learn everything, pretty much. You have to want to learn. And you can learn how to learn! You have to have a mindset hungry for learning and you also have to apply and execute action to stay in a learnable position. For example, asking for feedback. Have the communication clear in your company. Have the culture in your company be of incredible candid feedback, because without feedback you can’t learn. You need this loop. You can learn how to be learnable over time. Also you need to understand your strengths and weaknesses. And once you learn that, you can focus on the things you’re good at and delegate the others. The SaaS metrics important to Connect Ventures Ed: I’m also interested to know about the flipside of the people stuff. There obviously comes a time when you need to measure and evaluate a business. You’re looking at a lot of pitchdecks and monitoring the business you’ve invested in. What are some of the key metrics or compass metrics that you like to see, that give you a good indicator? Pietro: I’m a big fan of the ChartMogul product, for SaaS, because it provides me with an immediate picture of how healthy is the business. Diving into the SaaS businesses, there are two metrics or criteria that I personally focus on. I’ll split it to pre-investment and after investment. One is “engagement.” And this varies from product to product, but for example — it could be a quantity measurement or a quality measurement, or both. For Typeform, it’s how many Typeforms a specific organization has created and distributed over time. That’s just about quantity. Of course you want to see the quality. You want to see how many people have completed a Typeform, too. After investment we stay for series A or B, so the company starts growing. This is where ChartMogul comes into play. I think MRR doesn’t lie. You can break down everything, get conclusions, break down the dynamics. In the end, MRR doesn’t lie. It encapsulates everything — what’s the ARPA? What’s your ability to expand with a certain customer and add an upsell? And on the negative, it shows your ability to retain your customers and where you have unhealthy churn. So definitely, after the investment, to evaluate the health of the business, MRR is the big important thing that we look at. MRR and all the movements. I’m not a big fan of CAC/LTV, because it’s very subjective. The way you define CAC and define LTV is a bit arbitrary and, for sure, I don’t care about it as investment criteria. Because I don’t have time to figure out how the metric is defined or built, and the founders optimize it for [funding rounds] anyway. Instead, once we are in the company, and we have much better access inside and understanding, then it is something we track. If you’d like to learn more about the SaaS metrics mentioned above, check out the Ultimate SaaS Metrics Cheat Sheet. Monitoring metrics and finding something exceptional Ed: Are there any big mistakes you see people making with metrics? Either at the pre-investment stage or post investment? Is there anything you see that’s instantly a red flag for you? Pietro: One mistake I did was to focus on MRR statically, without looking at how much MRR you’ve added in the last two or three months. It really matters where you see acceleration, deceleration. In under $50k MRR SaaS business, it can look the same as one with $150k MRR — it means nothing. What matters is how long it took you to get to that point; what’s your velocity? And if you can grow the MRR new business very quickly and efficiently, but there is also a big churn… Churn compounds, new business doesn’t. So the mistake could be just seeing “$40K MRR,” a big splash on the screen that tells you nothing. It tells you the cash in for the next month, but it doesn’t tell you if there is something exceptional. And personally, the way I invest, I need something exceptional. I don’t need fifteen good things. I need fourteen disaster things and something phenomenal. And this [phenomenal thing] could be a founder’s attribute, or a specific feature of the product or of the company. Ed: Do you have any examples of those? Pietro: Sure. Typeform. There were a lot of good things and a lot of bad things, we invested so early. Entire pieces of the organization were not there. And some investors may see that and say, “Well why would you invest? They don’t have this and this.” We are totally fine with that. We want to see some incredible, actionable element. So with Typeform, one was founder’s attribute. They are designer geniuses. The solution they had in their heads and how they executed it is phenomenal. In its simplicity, it is incredible. They didn’t invent anything; forms and surveys have been around for years. But what they did do was make them sexy, make them fun, and make them conversional. And the public vision on this is incredible. So we think that adding extraordinary design and user experience talent, in the market and category where Typeform wanted to be, is pivotal. Ed: Awesome. Thanks very much. It’s been great to chat. Pietro: Thank you, it’s been a pleasure.

<sys> [INST] Why Connect Ventures invests early in mission-driven founders [/INST] Ever wondered what metrics investors really want to see? Or the all-too-common mistakes founders make when pitching their startup? Ed visited the headquarters of Connect Ventures, a London-based VC focusing on early seed-stage investments in the technology space, to speak with Managing Partner Pietro Bezza. You have the chance to meet Connect Ventures, too. Sitar Teli, a fellow partner, will be at the SaaStock conference in Dublin on September 22, speaking about the SaaS VC landscape in Europe. Don’t miss it! Why invest at early stage? It’s all about the product. Ed: It’s really good to get a SaaS investor perspective. Let’s start at the beginning. I think it makes sense for you to describe what Connect Ventures is and what you guys do as a VC. Pietro: Yes, it’s something I wonder myself very often, especially when I try to explain my job to my parents or my five-year-old son. For both it’s an issue to get the full picture. So the way I like to think about what I do is to help extraordinary people to extraordinary things. The version for my kid is: “To help superheros turn the impossible to possible.” It works for him. But it’s true. Because our mission is to help exceptional talents, and you really need incredible personal traits and talented people in tech and design, in creativity. Our role is basically to help. I like the emphasis on the “help” part, because the fact is that venture capital is a service business at core. We provide capital, of course, and advice. But really, especially at Connect, we respect that it’s the founders team that really makes things happen, and our role is to support and to do whatever it takes to make them succeed. Ed: So you guys focus on early stage investments. My first question is why? Pietro: To take a step back to explain why we choose early stage — and also why Europe — the foundational vision for Connect Ventures, Sitar Teli, Bill Earner and myself in 2011, the three of us held one strong belief in our minds and our hearts: We really believe in privately-led companies. Because we think, in the end, a technology business is an innovation business. Okay, so I’m confessing my Italian Classics studies, but… “technology” comes from the Greek techne, which means “the art of crafting, to make things better.” So the technology business at heart, its role, is to make things better through technology, through innovation. And innovation, in the end, is the product. So innovation comes from the product, and the founder can design a better experience. For that reason, we believe products come before the companies. So when we invest, we invest in product. Product must be the answer to every strategic puzzle. It should be the foundation of solving the problem the founders want to tackle, but also it should be the answer for growth, for hiring strategy. And it should be the start of the company but also the growth engine. I’m not saying other components aren’t indispensable to building an incredible category winner, like the market, and other functions like sales and marketing, etc. But I think a strong foundation in the DNA of the product is a necessary condition to succeed. So, the answer to your question. Product innovation is the most hard capability for a company to find. And it’s either something that is in the DNA from day one, or you count it out over time. And it’s this 0 to 1, to Product-Market Fit that happens at seed, where we invest — that’s where you really build the pillars for the company. And that’s why we like to be there. From founder to investor Ed: So you yourself have experience growing and leading a business prior to Connect Ventures. Can you explain what you did previously? And if it’s affected your work at Connect in any way? Pietro: Of course it affects my work at Connect because it must, but I don’t have yet a clear picture of how. I think it’s evolving over time. Just to give you the background: I had been an operator in marketing and branding for five years, and then at 28 I co-founded Neo Network in Milan. The idea was to bring digital interactive content online. It was the period where TV was dead, “the internet killed the TV,” and everyone gets their shows on demand, which is something that is still true now after fifteen years. We pivoted a couple times, and we were lucky. We were the right team at the right moment to pivot to mobile. We were very good at designing and building editorial content, and messaging apps, interactive stuff. We started distributing through TELCOs to consumer SMS applications and SMS content. And that was an incredible, booming segment to be in. Together with the UK, Italy and Japan were the leaders. From 2003-2007, was incredible growth — a period of hyper growth — from minus to $40M in revenue. 80 people, very profitable. Then we sold the company to Zodiac media, a big conglomerate in content production. Then I stayed three years. I was CEO of the digital unit of this group. After three years at this corporation I realized okay, I definitely want to keep working with startups. The smaller, the better. “Think small” is my mantra. Less is more, simplicity. This goes back to the product. So from my experience as a founder, mostly what I advise to the founders whom I invest in is to avoid overly fucked up ideas. As a founder myself [and now an investor], I tried also to learn it was a completely different era. Yes we developed apps, but back then it was just about being the first. For example, you were the only dating SMS app. It’s not like it is now, when you go onto app stores and there are 1000 others. So if your product is not 10x better, then you’re not going to exist. Also my company was European, and we didn’t raise a lot of money. Now instead we are doing the opposite: Product first, and once you get PMF, then accelerate. So I apply my experience more in management style, how you build the team, how to create a great culture in the company. More on the soft things, but not on the hard things, because my previous company wouldn’t be successful nowadays. Being solution-oriented and mission-driven Ed: You also mentioned that you sometimes make decisions based on a team, in the case where a product is not their yet or doesn’t exist yet. Can you tell me some of the qualities you can identify in a team that tell you it’s something that could be successful? Pietro: Yes. Overall every investor or every firm has a thesis or a style, and basically this criteria changes with a pendulum swinging between Product, Market, and Team. Some put more focus on market, some on product, some on team. Of course the team must be exceptional. But based on your VC style, the team could have a different relevancy. For us, the most important thing is that the founders or the team are mission-led or mission-driven. The most important question we ask is: “Why are you doing this?” What’s your purpose? Why are you spending ten years of your life and giving up other things for this? And when the answer is, “Because I think running a startup is cool; because I have an idea to do my own startup,” these are red flags for us. We really want to back people who don’t want to build a company — maybe they hate building companies! — but they couldn’t live without solving the problem they’re facing everyday. There wasn’t any solution they liked on the market so they say, “You know what, I’ll just create a better version for this problem.” Reinventing and reimagining something that could solve their problem. So when someone says, “Oh, I’ve been working and this has been my pet project for one year,” we say: “Great. In this case you really want to solve the problem and not build the company.” We call this Founder-Market Fit, technically — but it’s not just domain expertise. Because often we back dropouts. There are 22 or 23 year olds, so they have zero domain expertise in terms of professional knowledge of the sector or the network of people. They know nothing about the market players. Instead they have incredible insight into that specific problem. And I can give you a lot of examples of that. We just invested in a company in France, basically a marketplace for students to find great temporary jobs at companies. The four founders are four students who have been through the struggle of trying to find a job during their studies. So they said, “Why don’t we create a platform where someone selects the best students and the best companies and does the matchmaking?” They know nothing about the employment market because they are students, but they are students, so they totally have good insight into what you need to be served well in this market, with this target audience. There are too many reasons why we choose to invest in mission-driven companies: These people are solution driven, so they come with a product. The answer to the problem is designing and building a product. There’s no other way to tackle it. And again, we think the product is innovation and the way to the business, not vice versa. Being invested in mission driven founders is key for that. If you are really tied to your market or your category and you work for a purpose, then you will always be in it for the long run. You’re not going to be a flake. You’re not thinking “I see an opportunity, I want to seize it, I’ll build something and then I’m going to flake by selling it after two years.” Our seed fund is small, but our second fund is 50M pounds. It’s big enough that we need to be part of a big company; we’re investing for it to become a highly valuable company over time. So we need to partner with founders that can stay ten years and build big companies. And only someone who is mission-driven can expand the boundaries of his sector over time and go after big things. Innovation is very quick in cycles, and so if you’re not a product person, you can’t really re-innovate at the next technology change. Thats why we really, really, really — I can’t stress this more — why we stand by founder/CEO. We think that overtime, the CEO must be the founders. Because they imagined the company for the first time, they had the idea of the product. They created something out of nothing. So, when the first solution is no longer buyable, they can just reimagine again, without panicking. If you come to a company as CEO and the company has already grown, and then something changes, you panic and think, “Okay this isn’t going to last forever.” Founders are very good at creating, maybe not the best at maximizing something. But today we see technology companies keep surfing on all the changes. And only someone who really has a bond with the market, who can reimagine a product solution with great UX — that’s the key. The founder attributes important to Connect Ventures Ed: So basically you’re arguing that the founder is the best equipped person to innovate. Pietro: It’s by definition. Because again, the founder must be a learnable person. A product is not sufficient condition to succeed. A problem-centric, founder-mission founder is not in a sufficient condition to succeed. Of course once they build a product, they have to build a company. And they have to understand how to run a company. That’s a big thing! It’s about: organization, culture, communication, growth, money. And so the other attribute we really want to see is how learnable you are. That doesn’t mean that you shouldn’t be incredibly strongly opinionated. Because if you are on a mission, you really have to fight for your opinion. But you also have to be coachable and you have to listen. So the “strong opinions loosely held” kind of person is our ideal. We are totally fine if they are tractable or if they are difficult. There are founders we really like to work with because they are so open and so nice, and you also have great founders who you should work with… it takes a bit of your passion, let’s say, to work with them. But it’s incredibly rewarding anyway. They must be learnable, they must learn over time how to build things. And also stay dedicated to something. That is about the transition from a product person to a great company CEO. Ed: Do you think founders can learn those skills, or is this something that’s deeply rooted in people? Pietro: I think you can learn everything, pretty much. You have to want to learn. And you can learn how to learn! You have to have a mindset hungry for learning and you also have to apply and execute action to stay in a learnable position. For example, asking for feedback. Have the communication clear in your company. Have the culture in your company be of incredible candid feedback, because without feedback you can’t learn. You need this loop. You can learn how to be learnable over time. Also you need to understand your strengths and weaknesses. And once you learn that, you can focus on the things you’re good at and delegate the others. The SaaS metrics important to Connect Ventures Ed: I’m also interested to know about the flipside of the people stuff. There obviously comes a time when you need to measure and evaluate a business. You’re looking at a lot of pitchdecks and monitoring the business you’ve invested in. What are some of the key metrics or compass metrics that you like to see, that give you a good indicator? Pietro: I’m a big fan of the ChartMogul product, for SaaS, because it provides me with an immediate picture of how healthy is the business. Diving into the SaaS businesses, there are two metrics or criteria that I personally focus on. I’ll split it to pre-investment and after investment. One is “engagement.” And this varies from product to product, but for example — it could be a quantity measurement or a quality measurement, or both. For Typeform, it’s how many Typeforms a specific organization has created and distributed over time. That’s just about quantity. Of course you want to see the quality. You want to see how many people have completed a Typeform, too. After investment we stay for series A or B, so the company starts growing. This is where ChartMogul comes into play. I think MRR doesn’t lie. You can break down everything, get conclusions, break down the dynamics. In the end, MRR doesn’t lie. It encapsulates everything — what’s the ARPA? What’s your ability to expand with a certain customer and add an upsell? And on the negative, it shows your ability to retain your customers and where you have unhealthy churn. So definitely, after the investment, to evaluate the health of the business, MRR is the big important thing that we look at. MRR and all the movements. I’m not a big fan of CAC/LTV, because it’s very subjective. The way you define CAC and define LTV is a bit arbitrary and, for sure, I don’t care about it as investment criteria. Because I don’t have time to figure out how the metric is defined or built, and the founders optimize it for [funding rounds] anyway. Instead, once we are in the company, and we have much better access inside and understanding, then it is something we track. If you’d like to learn more about the SaaS metrics mentioned above, check out the Ultimate SaaS Metrics Cheat Sheet. Monitoring metrics and finding something exceptional Ed: Are there any big mistakes you see people making with metrics? Either at the pre-investment stage or post investment? Is there anything you see that’s instantly a red flag for you? Pietro: One mistake I did was to focus on MRR statically, without looking at how much MRR you’ve added in the last two or three months. It really matters where you see acceleration, deceleration. In under $50k MRR SaaS business, it can look the same as one with $150k MRR — it means nothing. What matters is how long it took you to get to that point; what’s your velocity? And if you can grow the MRR new business very quickly and efficiently, but there is also a big churn… Churn compounds, new business doesn’t. So the mistake could be just seeing “$40K MRR,” a big splash on the screen that tells you nothing. It tells you the cash in for the next month, but it doesn’t tell you if there is something exceptional. And personally, the way I invest, I need something exceptional. I don’t need fifteen good things. I need fourteen disaster things and something phenomenal. And this [phenomenal thing] could be a founder’s attribute, or a specific feature of the product or of the company. Ed: Do you have any examples of those? Pietro: Sure. Typeform. There were a lot of good things and a lot of bad things, we invested so early. Entire pieces of the organization were not there. And some investors may see that and say, “Well why would you invest? They don’t have this and this.” We are totally fine with that. We want to see some incredible, actionable element. So with Typeform, one was founder’s attribute. They are designer geniuses. The solution they had in their heads and how they executed it is phenomenal. In its simplicity, it is incredible. They didn’t invent anything; forms and surveys have been around for years. But what they did do was make them sexy, make them fun, and make them conversional. And the public vision on this is incredible. So we think that adding extraordinary design and user experience talent, in the market and category where Typeform wanted to be, is pivotal. Ed: Awesome. Thanks very much. It’s been great to chat. Pietro: Thank you, it’s been a pleasure. </sys

What a $4K DSLR can teach you about SaaS onboarding. Do we really need another metaphor? The SaaS industry is ripe with overused metaphors. I’m sure you’ve seen enough leaky buckets and rocket ships in your career. But please allow me to use another metaphor here — I promise it’ll be worth your while. Blame Kathy Sierra Or alternatively just buy her excellent book. I’ve recently been reading Badass: Making Users Awesome by Kathy Sierra. In the book, Kathy presents what I think should be the founding framework of any Customer Success organization in a business: The process of achieving true empathy with your customer, and understanding what they’re really trying to achieve. (hint: It’s always something more high-level than “close more deals” or “generate more leads”). A lot of the examples in the book are based around a comparison with photography, and the process photographers go through to improve their craft. It creates a nice illustration of several concepts that are relevant to B2B SaaS, so I’d like to discuss these in a bit more detail. Note: Although I’m expanding on them, the majority of the concepts discussed here belong to Kathy Sierra — who deserves all credit. True customer goals A camera is just a tool, like anything else. People don’t buy a Canon 5D MkIV because they want the features of that camera, they want to take their photography to the next level and produce amazing images. Case in point: The Canon 5D Mk IV. Yours for just $3,499 (without lens). (source: https://www.usa.canon.com/) Canon’s Marketing for the 5D is decidedly aspirational. I mean, why not? The best way of selling a camera is clearly to use some remarkable images shot with the camera: Anyone know how to get the title “Canon Explorer of Light”? (Source: https://www.usa.canon.com/internet/portal/us/home/explore/see-legendary/testimonials) The same principle applies when a customer purchases your B2B software. They don’t want to buy ChartMogul because ChartMogul has some cool features — they’re aspiring to make better, more data-informed decisions to grow their business. In the book, Kathy outlines the difference between the pre-purchase and post-purchase experience when buying a premium camera. Once you open the box, there’s a sharp contrast between the marketing material that persuaded you to purchase, and the technical instruction manual that falls onto your desk. “Good Marketing focuses on what the potential user really wants to do. But after they buy? Every experience the user has with us shifts to just the tool.” – Kathy Sierra In other words, the Marketing department has solved the messaging here. But for some reason the designers of the actual product UX have not: A page from the Canon 5D manual. Quite a contrast from the previous shiny marketing material! How do I achieve all the aspirational stuff I signed up for in the first place? (source: https://www.usa.canon.com) Just to pause for a second, this is where I initially started to feel uncomfortable with the points and examples raised in the book. This camera is, after all, an advanced product. A tool for people with advanced skills in photography to hone their craft. Should the tool really teach its operator how to be a better artist? Surely the best thing a manual like the one above can do is tell the operator how it can be operated, in as much detail as possible. Zero bullshit – just let me get on with photographing weddings. But then I thought about the same dilemma in professional B2B software. Making users better Much of Kathy’s arguments revolve around the following statement: “Don’t make a better [X] Make a better user of [X].” This has huge implications when it comes to designing a software product’s UX. If this is our true goal, we’re effectively expanding the scope far outside of what happens when the user is actually interacting with your product. If we help people make better, data-informed business decisions at ChartMogul, when do you think those decisions get made? Most of the time it’s probably not while they’re logged into their ChartMogul account and sitting in front of the computer. This can be a liberating yet overwhelming way of thinking; suddenly the scope of what we consider relevant to our product is blown wide open! AUTO mode Even our super advanced Canon 5D Mk IV from above has an AUTO mode. It’s very easy to find (It’s usually green). Your software needs to have an AUTO mode too – and it needs to be easy to find. But there are risks involved, if you don’t design a natural way for your users to graduate from AUTO (and, as the book states, become “badass”). A helpful exercise at this point is to define what it actually means to be an expert, in the context of your product. And not just the top-end of the scale – think about the entire journey from novice to expert for your users. Let’s call it The Path To Awesomeness (I actually made this up and will take credit for this one). The Path To Awesomeness™ Hidden depth is a large component of successful consumer software. Companies like Apple nail this on a regular basis, with just the right balance of feature discoverability and simplicity. When it comes to business software, it’s often assumed that everything should be exposed to the user at once, because “they know what they’re doing”. That’s a big assumption to make, and more often than not it’s incorrect. Here’s the most popular consumer camera interface in the world: And here’s the main interface of our 5D Mk IV: (source: https://www.usa.canon.com) Have you ever tried handing your iPhone to a passer-by when you need a group photo taken? If so, I’m guessing you didn’t need to explain to the person how to operate the camera. Have you ever handed a DSLR to a passer-by for the same purpose? Good luck! The problem is, enterprise software needs to fit somewhere between these two extremes when it comes to exposing functionality. In fact, it basically needs to have the benefits of each, with the drawbacks of neither one: It’s easy to pick up and get started, discover features and understand them It’s conveniently optimized for experienced “power” users with advanced workflows And finally, you need to design a way for users to navigate from the first point to the second — along the path of awesomeness. UX problems in the B2B software space today People (us at ChartMogul included) talk about Onboarding, i.e. the experience of getting started with a product or tool. There’s a huge amount of effort put into this critical “early life” part of the relationship between your product and the customer, and rightly so. But one huge flaw in a lot of the thinking around onboarding is that it really only defines a small fixed period in the lifetime of a customer. We think of it as a binary step — the user is either “fully onboarded”, or “not yet onboarded”. This helps us optimise UX, but it doesn’t help us track and improve the learning journey that users go on over their entire lifetime in the product. In other words, onboarding finishes far too early. 5 things you can implement to improve this 1. Design a learning experience that extends outside of app usage If we really are in the business of making users better, we need to take a holistic approach towards education. What does this mean in practical terms? For me at least, it means: Your product should make users more awesome Your customer success interactions should make users more awesome Your content should make users more awesome The holy grail here is to have a structured approach across all three areas. 2. Check for contrast between marketing experience and product experience Have you ever been super excited to sign up for and start using a new tool, only to hand over your credit card details and be faced with constant friction and flaws? Make sure you’re not offering an aspirational Marketing experience to potential users, only to hand over the product with an accompanying black-and-white manual containing hard-to-read small print (not literally of course). 3. Track users’ path to awesomeness We’re lucky to have a wealth of tools available to measure engagement and user activity within our software today. And it’s easy to implement. Take those points you defined in your path to awesomeness Find things within your software that suggest the user has reached those points Use event-based behavioural analytics to measure whether the user has reached that point Record from each point what the user might need to achieve in your app to “level up”. Then take a look at how natural a progression this is in your UX today. 4. Optimise your “blank slate” experience When the user logs into your software for the first time, what does it look like? It’s really hard to look at this from an unbiased, fresh perspective – you’ve probably seen the screen a million times and can no longer adopt a high-level view. Perhaps test with some other people who’ve never seen or used the software? Do these people have any idea of where to go next, or what to do? Take this a step further. Look at the state immediately AFTER the user has completed your onboarding. In all likelihood, this will have been given less attention than the first login. Do the same exercise here. 5. Give new users an AUTO mode You don’t have to make it green if that clashes with your colour palette, but this fallback needs to be easily recognisable and clear to users. And just to emphasise, this doesn’t necessarily need to be a specific “mode” – the goal is to build a whole set of functionality — or mode of use — that just simply works, zero knowledge required. This is your users’ comfort zone, and a place to fall back to when everything else fails. Hint: IT’S THE GREEN ONE (source: http://cpn.canon-europe.com/) Final word Read Kathy Sierra’s book, BADASS: Making Users Awesome! It covers far more than I’ve talked about here, and the concepts inside will change the way you think about designing your product’s user experience. If you want to go deeper into the elements of SaaS customer onboarding, you should read our post: A Guide to SaaS Customer Onboarding Finally, I promise I’m done with SaaS metaphors for at least a couple of weeks.

[INST] What a $4K DSLR can teach you about SaaS onboarding [/INST]

Do we really need another metaphor? The SaaS industry is ripe with overused metaphors. I’m sure you’ve seen enough leaky buckets and rocket ships in your career. But please allow me to use another metaphor here — I promise it’ll be worth your while. Blame Kathy Sierra Or alternatively just buy her excellent book. I’ve recently been reading Badass: Making Users Awesome by Kathy Sierra. In the book, Kathy presents what I think should be the founding framework of any Customer Success organization in a business: The process of achieving true empathy with your customer, and understanding what they’re really trying to achieve. (hint: It’s always something more high-level than “close more deals” or “generate more leads”). A lot of the examples in the book are based around a comparison with photography, and the process photographers go through to improve their craft. It creates a nice illustration of several concepts that are relevant to B2B SaaS, so I’d like to discuss these in a bit more detail. Note: Although I’m expanding on them, the majority of the concepts discussed here belong to Kathy Sierra — who deserves all credit. True customer goals A camera is just a tool, like anything else. People don’t buy a Canon 5D MkIV because they want the features of that camera, they want to take their photography to the next level and produce amazing images. Case in point: The Canon 5D Mk IV. Yours for just $3,499 (without lens). (source: https://www.usa.canon.com/) Canon’s Marketing for the 5D is decidedly aspirational. I mean, why not? The best way of selling a camera is clearly to use some remarkable images shot with the camera: Anyone know how to get the title “Canon Explorer of Light”? (Source: https://www.usa.canon.com/internet/portal/us/home/explore/see-legendary/testimonials) The same principle applies when a customer purchases your B2B software. They don’t want to buy ChartMogul because ChartMogul has some cool features — they’re aspiring to make better, more data-informed decisions to grow their business. In the book, Kathy outlines the difference between the pre-purchase and post-purchase experience when buying a premium camera. Once you open the box, there’s a sharp contrast between the marketing material that persuaded you to purchase, and the technical instruction manual that falls onto your desk. “Good Marketing focuses on what the potential user really wants to do. But after they buy? Every experience the user has with us shifts to just the tool.” – Kathy Sierra In other words, the Marketing department has solved the messaging here. But for some reason the designers of the actual product UX have not: A page from the Canon 5D manual. Quite a contrast from the previous shiny marketing material! How do I achieve all the aspirational stuff I signed up for in the first place? (source: https://www.usa.canon.com) Just to pause for a second, this is where I initially started to feel uncomfortable with the points and examples raised in the book. This camera is, after all, an advanced product. A tool for people with advanced skills in photography to hone their craft. Should the tool really teach its operator how to be a better artist? Surely the best thing a manual like the one above can do is tell the operator how it can be operated, in as much detail as possible. Zero bullshit – just let me get on with photographing weddings. But then I thought about the same dilemma in professional B2B software. Making users better Much of Kathy’s arguments revolve around the following statement: “Don’t make a better [X] Make a better user of [X].” This has huge implications when it comes to designing a software product’s UX. If this is our true goal, we’re effectively expanding the scope far outside of what happens when the user is actually interacting with your product. If we help people make better, data-informed business decisions at ChartMogul, when do you think those decisions get made? Most of the time it’s probably not while they’re logged into their ChartMogul account and sitting in front of the computer. This can be a liberating yet overwhelming way of thinking; suddenly the scope of what we consider relevant to our product is blown wide open! AUTO mode Even our super advanced Canon 5D Mk IV from above has an AUTO mode. It’s very easy to find (It’s usually green). Your software needs to have an AUTO mode too – and it needs to be easy to find. But there are risks involved, if you don’t design a natural way for your users to graduate from AUTO (and, as the book states, become “badass”). A helpful exercise at this point is to define what it actually means to be an expert, in the context of your product. And not just the top-end of the scale – think about the entire journey from novice to expert for your users. Let’s call it The Path To Awesomeness (I actually made this up and will take credit for this one). The Path To Awesomeness™ Hidden depth is a large component of successful consumer software. Companies like Apple nail this on a regular basis, with just the right balance of feature discoverability and simplicity. When it comes to business software, it’s often assumed that everything should be exposed to the user at once, because “they know what they’re doing”. That’s a big assumption to make, and more often than not it’s incorrect. Here’s the most popular consumer camera interface in the world: And here’s the main interface of our 5D Mk IV: (source: https://www.usa.canon.com) Have you ever tried handing your iPhone to a passer-by when you need a group photo taken? If so, I’m guessing you didn’t need to explain to the person how to operate the camera. Have you ever handed a DSLR to a passer-by for the same purpose? Good luck! The problem is, enterprise software needs to fit somewhere between these two extremes when it comes to exposing functionality. In fact, it basically needs to have the benefits of each, with the drawbacks of neither one: It’s easy to pick up and get started, discover features and understand them It’s conveniently optimized for experienced “power” users with advanced workflows And finally, you need to design a way for users to navigate from the first point to the second — along the path of awesomeness. UX problems in the B2B software space today People (us at ChartMogul included) talk about Onboarding, i.e. the experience of getting started with a product or tool. There’s a huge amount of effort put into this critical “early life” part of the relationship between your product and the customer, and rightly so. But one huge flaw in a lot of the thinking around onboarding is that it really only defines a small fixed period in the lifetime of a customer. We think of it as a binary step — the user is either “fully onboarded”, or “not yet onboarded”. This helps us optimise UX, but it doesn’t help us track and improve the learning journey that users go on over their entire lifetime in the product. In other words, onboarding finishes far too early. 5 things you can implement to improve this 1. Design a learning experience that extends outside of app usage If we really are in the business of making users better, we need to take a holistic approach towards education. What does this mean in practical terms? For me at least, it means: Your product should make users more awesome Your customer success interactions should make users more awesome Your content should make users more awesome The holy grail here is to have a structured approach across all three areas. 2. Check for contrast between marketing experience and product experience Have you ever been super excited to sign up for and start using a new tool, only to hand over your credit card details and be faced with constant friction and flaws? Make sure you’re not offering an aspirational Marketing experience to potential users, only to hand over the product with an accompanying black-and-white manual containing hard-to-read small print (not literally of course). 3. Track users’ path to awesomeness We’re lucky to have a wealth of tools available to measure engagement and user activity within our software today. And it’s easy to implement. Take those points you defined in your path to awesomeness Find things within your software that suggest the user has reached those points Use event-based behavioural analytics to measure whether the user has reached that point Record from each point what the user might need to achieve in your app to “level up”. Then take a look at how natural a progression this is in your UX today. 4. Optimise your “blank slate” experience When the user logs into your software for the first time, what does it look like? It’s really hard to look at this from an unbiased, fresh perspective – you’ve probably seen the screen a million times and can no longer adopt a high-level view. Perhaps test with some other people who’ve never seen or used the software? Do these people have any idea of where to go next, or what to do? Take this a step further. Look at the state immediately AFTER the user has completed your onboarding. In all likelihood, this will have been given less attention than the first login. Do the same exercise here. 5. Give new users an AUTO mode You don’t have to make it green if that clashes with your colour palette, but this fallback needs to be easily recognisable and clear to users. And just to emphasise, this doesn’t necessarily need to be a specific “mode” – the goal is to build a whole set of functionality — or mode of use — that just simply works, zero knowledge required. This is your users’ comfort zone, and a place to fall back to when everything else fails. Hint: IT’S THE GREEN ONE (source: http://cpn.canon-europe.com/) Final word Read Kathy Sierra’s book, BADASS: Making Users Awesome! It covers far more than I’ve talked about here, and the concepts inside will change the way you think about designing your product’s user experience. If you want to go deeper into the elements of SaaS customer onboarding, you should read our post: A Guide to SaaS Customer Onboarding Finally, I promise I’m done with SaaS metaphors for at least a couple of weeks.

<sys> [INST] What a $4K DSLR can teach you about SaaS onboarding [/INST] Do we really need another metaphor? The SaaS industry is ripe with overused metaphors. I’m sure you’ve seen enough leaky buckets and rocket ships in your career. But please allow me to use another metaphor here — I promise it’ll be worth your while. Blame Kathy Sierra Or alternatively just buy her excellent book. I’ve recently been reading Badass: Making Users Awesome by Kathy Sierra. In the book, Kathy presents what I think should be the founding framework of any Customer Success organization in a business: The process of achieving true empathy with your customer, and understanding what they’re really trying to achieve. (hint: It’s always something more high-level than “close more deals” or “generate more leads”). A lot of the examples in the book are based around a comparison with photography, and the process photographers go through to improve their craft. It creates a nice illustration of several concepts that are relevant to B2B SaaS, so I’d like to discuss these in a bit more detail. Note: Although I’m expanding on them, the majority of the concepts discussed here belong to Kathy Sierra — who deserves all credit. True customer goals A camera is just a tool, like anything else. People don’t buy a Canon 5D MkIV because they want the features of that camera, they want to take their photography to the next level and produce amazing images. Case in point: The Canon 5D Mk IV. Yours for just $3,499 (without lens). (source: https://www.usa.canon.com/) Canon’s Marketing for the 5D is decidedly aspirational. I mean, why not? The best way of selling a camera is clearly to use some remarkable images shot with the camera: Anyone know how to get the title “Canon Explorer of Light”? (Source: https://www.usa.canon.com/internet/portal/us/home/explore/see-legendary/testimonials) The same principle applies when a customer purchases your B2B software. They don’t want to buy ChartMogul because ChartMogul has some cool features — they’re aspiring to make better, more data-informed decisions to grow their business. In the book, Kathy outlines the difference between the pre-purchase and post-purchase experience when buying a premium camera. Once you open the box, there’s a sharp contrast between the marketing material that persuaded you to purchase, and the technical instruction manual that falls onto your desk. “Good Marketing focuses on what the potential user really wants to do. But after they buy? Every experience the user has with us shifts to just the tool.” – Kathy Sierra In other words, the Marketing department has solved the messaging here. But for some reason the designers of the actual product UX have not: A page from the Canon 5D manual. Quite a contrast from the previous shiny marketing material! How do I achieve all the aspirational stuff I signed up for in the first place? (source: https://www.usa.canon.com) Just to pause for a second, this is where I initially started to feel uncomfortable with the points and examples raised in the book. This camera is, after all, an advanced product. A tool for people with advanced skills in photography to hone their craft. Should the tool really teach its operator how to be a better artist? Surely the best thing a manual like the one above can do is tell the operator how it can be operated, in as much detail as possible. Zero bullshit – just let me get on with photographing weddings. But then I thought about the same dilemma in professional B2B software. Making users better Much of Kathy’s arguments revolve around the following statement: “Don’t make a better [X] Make a better user of [X].” This has huge implications when it comes to designing a software product’s UX. If this is our true goal, we’re effectively expanding the scope far outside of what happens when the user is actually interacting with your product. If we help people make better, data-informed business decisions at ChartMogul, when do you think those decisions get made? Most of the time it’s probably not while they’re logged into their ChartMogul account and sitting in front of the computer. This can be a liberating yet overwhelming way of thinking; suddenly the scope of what we consider relevant to our product is blown wide open! AUTO mode Even our super advanced Canon 5D Mk IV from above has an AUTO mode. It’s very easy to find (It’s usually green). Your software needs to have an AUTO mode too – and it needs to be easy to find. But there are risks involved, if you don’t design a natural way for your users to graduate from AUTO (and, as the book states, become “badass”). A helpful exercise at this point is to define what it actually means to be an expert, in the context of your product. And not just the top-end of the scale – think about the entire journey from novice to expert for your users. Let’s call it The Path To Awesomeness (I actually made this up and will take credit for this one). The Path To Awesomeness™ Hidden depth is a large component of successful consumer software. Companies like Apple nail this on a regular basis, with just the right balance of feature discoverability and simplicity. When it comes to business software, it’s often assumed that everything should be exposed to the user at once, because “they know what they’re doing”. That’s a big assumption to make, and more often than not it’s incorrect. Here’s the most popular consumer camera interface in the world: And here’s the main interface of our 5D Mk IV: (source: https://www.usa.canon.com) Have you ever tried handing your iPhone to a passer-by when you need a group photo taken? If so, I’m guessing you didn’t need to explain to the person how to operate the camera. Have you ever handed a DSLR to a passer-by for the same purpose? Good luck! The problem is, enterprise software needs to fit somewhere between these two extremes when it comes to exposing functionality. In fact, it basically needs to have the benefits of each, with the drawbacks of neither one: It’s easy to pick up and get started, discover features and understand them It’s conveniently optimized for experienced “power” users with advanced workflows And finally, you need to design a way for users to navigate from the first point to the second — along the path of awesomeness. UX problems in the B2B software space today People (us at ChartMogul included) talk about Onboarding, i.e. the experience of getting started with a product or tool. There’s a huge amount of effort put into this critical “early life” part of the relationship between your product and the customer, and rightly so. But one huge flaw in a lot of the thinking around onboarding is that it really only defines a small fixed period in the lifetime of a customer. We think of it as a binary step — the user is either “fully onboarded”, or “not yet onboarded”. This helps us optimise UX, but it doesn’t help us track and improve the learning journey that users go on over their entire lifetime in the product. In other words, onboarding finishes far too early. 5 things you can implement to improve this 1. Design a learning experience that extends outside of app usage If we really are in the business of making users better, we need to take a holistic approach towards education. What does this mean in practical terms? For me at least, it means: Your product should make users more awesome Your customer success interactions should make users more awesome Your content should make users more awesome The holy grail here is to have a structured approach across all three areas. 2. Check for contrast between marketing experience and product experience Have you ever been super excited to sign up for and start using a new tool, only to hand over your credit card details and be faced with constant friction and flaws? Make sure you’re not offering an aspirational Marketing experience to potential users, only to hand over the product with an accompanying black-and-white manual containing hard-to-read small print (not literally of course). 3. Track users’ path to awesomeness We’re lucky to have a wealth of tools available to measure engagement and user activity within our software today. And it’s easy to implement. Take those points you defined in your path to awesomeness Find things within your software that suggest the user has reached those points Use event-based behavioural analytics to measure whether the user has reached that point Record from each point what the user might need to achieve in your app to “level up”. Then take a look at how natural a progression this is in your UX today. 4. Optimise your “blank slate” experience When the user logs into your software for the first time, what does it look like? It’s really hard to look at this from an unbiased, fresh perspective – you’ve probably seen the screen a million times and can no longer adopt a high-level view. Perhaps test with some other people who’ve never seen or used the software? Do these people have any idea of where to go next, or what to do? Take this a step further. Look at the state immediately AFTER the user has completed your onboarding. In all likelihood, this will have been given less attention than the first login. Do the same exercise here. 5. Give new users an AUTO mode You don’t have to make it green if that clashes with your colour palette, but this fallback needs to be easily recognisable and clear to users. And just to emphasise, this doesn’t necessarily need to be a specific “mode” – the goal is to build a whole set of functionality — or mode of use — that just simply works, zero knowledge required. This is your users’ comfort zone, and a place to fall back to when everything else fails. Hint: IT’S THE GREEN ONE (source: http://cpn.canon-europe.com/) Final word Read Kathy Sierra’s book, BADASS: Making Users Awesome! It covers far more than I’ve talked about here, and the concepts inside will change the way you think about designing your product’s user experience. If you want to go deeper into the elements of SaaS customer onboarding, you should read our post: A Guide to SaaS Customer Onboarding Finally, I promise I’m done with SaaS metaphors for at least a couple of weeks. </sys

Charting the Data: Three Takeaways from Working on an Analytics Product. If a picture is worth a thousand words, then a good chart is definitely a match for even the most verbose images. This might help explain why analytics are everywhere. Take Twitter as an example. It would never be as popular as it is without showing its users how well their tweets are doing. Analytics are central to Twitter and other social media companies: they may be fairly crude, but they are also crucial for triggering that dopamine hit that brings people back. The ubiquity of analytics hides the potential complexity underneath, especially when you start to consider products where the analytics are more front and centre. Rather than Twitter, think of something like Hootsuite’s Analyze, which offers vastly more information and –hopefully at least – insights. Creating and maintaining pretty charts isn’t as easy as it seems, and I will be touching on three things that weren’t salient to me before I started working in the space. #1: The charts are just the tip of the iceberg This is a lesson I learned already in my research days, before I moved into product management. After completing my data collection, I would be keen to run my analyses and contribute to scientific knowledge. Yet, I quickly learned that there was a lot of work still to do before the data would be ready for analysis. I had greatly underestimated the amount of data processing that was required. When I eventually got to run the analyses themselves, it turned out to be anticlimactically quick. About ninety percent of an iceberg is under the surface. Think of these proportions the next time you see a dashboard. The data crunching can be divided into two stages. The first is the initial processing, where you get the data into a state in which they can be calculated, and the second is doing said calculations. If we look at the latter stage first. The metric you are going for will determine the complexity of the calculation. Working out something like the number of blog post views in a given month is relatively straightforward once you have the number of visits and when they took place. In contrast, calculating the customer churn rate of a SaaS business will be a bit more of an involved process. You need to take into account how many customers you had at the start of the month, how many canceled that same month, but only those cancelations who were for customers who were with you before the start of the month. You may also want to control for any cancelations that were followed by reactivations by those customers in that same period. Whether you are dealing with blog post views or customer churn rates, the calculation itself may be the easy bit. Imagine you want to know which are the top five countries your users are based in. If you already have the country information for each one, this task is fairly easy. Now imagine you only have their GPS location. You will first need to figure out the country a user is in. If we want to make it really complicated, let’s assume you only have the raw GPS data. The amount of processing to determine the countries just increased manyfold. Let’s hope you don’t have to do the equivalent of determining your users’ locations from scratch, but bear in mind that some of your product’s allure will come from information you are providing which isn’t easily available elsewhere. Doing the hard work for someone else is one of the reasons people will come to your product. Just make sure you are providing metrics that people actually use and care about. #2: The virtues of transparency Since your data processing is one of your competitive advantages, you might be tempted to keep it under wraps, as you might otherwise feel like you are revealing the ingredients for your secret sauce. However, opaqueness is not a good way to build trust in your numbers. After all, you aren’t providing numbers pulled out of nowhere, but rather something that would be too much work for your users to do themselves. The way in which it is calculated is not going to be a trade secret. “I could tell you how I calculated your numbers, but I am afraid that’s a secret. Don’t worry, just trust me.” Moreover, how different metrics are calculated can be a source of heated debate. The different methods will tend to have their own strengths and weaknesses, so you should make it clear which method you are using. People will then also know how to better interpret the data you are providing. Think of the churn rate example from earlier. People are better served if they can follow your approach. A good example of this in the world of SaaS metrics is around ARR (annual recurring revenue) and how it is often used interchangeably with annual run rate. The confusion is not surprising considering the shared initials. The former is the recurring revenue that comes from your annual plans, whereas the latter is how much recurring revenue you would get from all your plans – regardless of their duration – in a year (or MRR x 12 for short). One can argue about the merits of both and when each one is useful, but the main thing is not to confuse the two. That being said, it could be worse… I once heard a podcast state ARR as average recurring revenue. https://twitter.com/Mqsley/status/1403371831646642176 As a final point on this, the building blocks of your metrics have value of their own. If you are assessing the loading time of your application, the average time will be interesting, but you also want to dig into the numbers that make up this average, and so identify the major sources of latency. This is key for identifying which performance improvements will yield the highest return on investment. DataDog does this well, as they make it really easy to explore what their aggregate charts consist of. #3: The challenges of improvement Like any product out in the world, there will always be things you would like to add or change. For an analytics product this is harder than you might expect, so be careful if you are someone who likes to “move fast and break things”, as some things are harder to repair than others. When you tweak the way you calculate a metric in order to account for a new scenario, you are in a bit of a tricky situation. If you reprocess pre-existing data then your previous values will also change (to which people don’t take kindly when this happens out of the blue). If you don’t reprocess, and the changes apply only going forward, then you may have inconsistent numbers, and it is hard to make it clear why your January numbers are different from your February ones. Also, if you are actually improving the calculations, should you not provide this improved data? There are multiple ways of dealing with or mitigating these challenges, including adding new data settings, coordinated data reprocessing, and being transparent on how the numbers are obtained (as mentioned above). A clear data processing pipeline will also make any improvements easier to implement. Yet the best cure is prevention, so plan with care how you process your data and calculate your metrics. Final thoughts Working on a data product can present its own unexpected challenges even for those who have worked with data before. Not only do you have to make the underlying complexity clear and actionable, but you also have to provide the right amount of depth and transparency. All the while, you are dealing with a constant flow of ever-changing data. As we have seen it can get complicated quickly! But it’s worth it. Information is key for empowering people to make the best decisions, and being able to provide those insights is a rewarding thing indeed.

[INST] Charting the Data: Three Takeaways from Working on an Analytics Product [/INST]

If a picture is worth a thousand words, then a good chart is definitely a match for even the most verbose images. This might help explain why analytics are everywhere. Take Twitter as an example. It would never be as popular as it is without showing its users how well their tweets are doing. Analytics are central to Twitter and other social media companies: they may be fairly crude, but they are also crucial for triggering that dopamine hit that brings people back. The ubiquity of analytics hides the potential complexity underneath, especially when you start to consider products where the analytics are more front and centre. Rather than Twitter, think of something like Hootsuite’s Analyze, which offers vastly more information and –hopefully at least – insights. Creating and maintaining pretty charts isn’t as easy as it seems, and I will be touching on three things that weren’t salient to me before I started working in the space. #1: The charts are just the tip of the iceberg This is a lesson I learned already in my research days, before I moved into product management. After completing my data collection, I would be keen to run my analyses and contribute to scientific knowledge. Yet, I quickly learned that there was a lot of work still to do before the data would be ready for analysis. I had greatly underestimated the amount of data processing that was required. When I eventually got to run the analyses themselves, it turned out to be anticlimactically quick. About ninety percent of an iceberg is under the surface. Think of these proportions the next time you see a dashboard. The data crunching can be divided into two stages. The first is the initial processing, where you get the data into a state in which they can be calculated, and the second is doing said calculations. If we look at the latter stage first. The metric you are going for will determine the complexity of the calculation. Working out something like the number of blog post views in a given month is relatively straightforward once you have the number of visits and when they took place. In contrast, calculating the customer churn rate of a SaaS business will be a bit more of an involved process. You need to take into account how many customers you had at the start of the month, how many canceled that same month, but only those cancelations who were for customers who were with you before the start of the month. You may also want to control for any cancelations that were followed by reactivations by those customers in that same period. Whether you are dealing with blog post views or customer churn rates, the calculation itself may be the easy bit. Imagine you want to know which are the top five countries your users are based in. If you already have the country information for each one, this task is fairly easy. Now imagine you only have their GPS location. You will first need to figure out the country a user is in. If we want to make it really complicated, let’s assume you only have the raw GPS data. The amount of processing to determine the countries just increased manyfold. Let’s hope you don’t have to do the equivalent of determining your users’ locations from scratch, but bear in mind that some of your product’s allure will come from information you are providing which isn’t easily available elsewhere. Doing the hard work for someone else is one of the reasons people will come to your product. Just make sure you are providing metrics that people actually use and care about. #2: The virtues of transparency Since your data processing is one of your competitive advantages, you might be tempted to keep it under wraps, as you might otherwise feel like you are revealing the ingredients for your secret sauce. However, opaqueness is not a good way to build trust in your numbers. After all, you aren’t providing numbers pulled out of nowhere, but rather something that would be too much work for your users to do themselves. The way in which it is calculated is not going to be a trade secret. “I could tell you how I calculated your numbers, but I am afraid that’s a secret. Don’t worry, just trust me.” Moreover, how different metrics are calculated can be a source of heated debate. The different methods will tend to have their own strengths and weaknesses, so you should make it clear which method you are using. People will then also know how to better interpret the data you are providing. Think of the churn rate example from earlier. People are better served if they can follow your approach. A good example of this in the world of SaaS metrics is around ARR (annual recurring revenue) and how it is often used interchangeably with annual run rate. The confusion is not surprising considering the shared initials. The former is the recurring revenue that comes from your annual plans, whereas the latter is how much recurring revenue you would get from all your plans – regardless of their duration – in a year (or MRR x 12 for short). One can argue about the merits of both and when each one is useful, but the main thing is not to confuse the two. That being said, it could be worse… I once heard a podcast state ARR as average recurring revenue. https://twitter.com/Mqsley/status/1403371831646642176 As a final point on this, the building blocks of your metrics have value of their own. If you are assessing the loading time of your application, the average time will be interesting, but you also want to dig into the numbers that make up this average, and so identify the major sources of latency. This is key for identifying which performance improvements will yield the highest return on investment. DataDog does this well, as they make it really easy to explore what their aggregate charts consist of. #3: The challenges of improvement Like any product out in the world, there will always be things you would like to add or change. For an analytics product this is harder than you might expect, so be careful if you are someone who likes to “move fast and break things”, as some things are harder to repair than others. When you tweak the way you calculate a metric in order to account for a new scenario, you are in a bit of a tricky situation. If you reprocess pre-existing data then your previous values will also change (to which people don’t take kindly when this happens out of the blue). If you don’t reprocess, and the changes apply only going forward, then you may have inconsistent numbers, and it is hard to make it clear why your January numbers are different from your February ones. Also, if you are actually improving the calculations, should you not provide this improved data? There are multiple ways of dealing with or mitigating these challenges, including adding new data settings, coordinated data reprocessing, and being transparent on how the numbers are obtained (as mentioned above). A clear data processing pipeline will also make any improvements easier to implement. Yet the best cure is prevention, so plan with care how you process your data and calculate your metrics. Final thoughts Working on a data product can present its own unexpected challenges even for those who have worked with data before. Not only do you have to make the underlying complexity clear and actionable, but you also have to provide the right amount of depth and transparency. All the while, you are dealing with a constant flow of ever-changing data. As we have seen it can get complicated quickly! But it’s worth it. Information is key for empowering people to make the best decisions, and being able to provide those insights is a rewarding thing indeed.

<sys> [INST] Charting the Data: Three Takeaways from Working on an Analytics Product [/INST] If a picture is worth a thousand words, then a good chart is definitely a match for even the most verbose images. This might help explain why analytics are everywhere. Take Twitter as an example. It would never be as popular as it is without showing its users how well their tweets are doing. Analytics are central to Twitter and other social media companies: they may be fairly crude, but they are also crucial for triggering that dopamine hit that brings people back. The ubiquity of analytics hides the potential complexity underneath, especially when you start to consider products where the analytics are more front and centre. Rather than Twitter, think of something like Hootsuite’s Analyze, which offers vastly more information and –hopefully at least – insights. Creating and maintaining pretty charts isn’t as easy as it seems, and I will be touching on three things that weren’t salient to me before I started working in the space. #1: The charts are just the tip of the iceberg This is a lesson I learned already in my research days, before I moved into product management. After completing my data collection, I would be keen to run my analyses and contribute to scientific knowledge. Yet, I quickly learned that there was a lot of work still to do before the data would be ready for analysis. I had greatly underestimated the amount of data processing that was required. When I eventually got to run the analyses themselves, it turned out to be anticlimactically quick. About ninety percent of an iceberg is under the surface. Think of these proportions the next time you see a dashboard. The data crunching can be divided into two stages. The first is the initial processing, where you get the data into a state in which they can be calculated, and the second is doing said calculations. If we look at the latter stage first. The metric you are going for will determine the complexity of the calculation. Working out something like the number of blog post views in a given month is relatively straightforward once you have the number of visits and when they took place. In contrast, calculating the customer churn rate of a SaaS business will be a bit more of an involved process. You need to take into account how many customers you had at the start of the month, how many canceled that same month, but only those cancelations who were for customers who were with you before the start of the month. You may also want to control for any cancelations that were followed by reactivations by those customers in that same period. Whether you are dealing with blog post views or customer churn rates, the calculation itself may be the easy bit. Imagine you want to know which are the top five countries your users are based in. If you already have the country information for each one, this task is fairly easy. Now imagine you only have their GPS location. You will first need to figure out the country a user is in. If we want to make it really complicated, let’s assume you only have the raw GPS data. The amount of processing to determine the countries just increased manyfold. Let’s hope you don’t have to do the equivalent of determining your users’ locations from scratch, but bear in mind that some of your product’s allure will come from information you are providing which isn’t easily available elsewhere. Doing the hard work for someone else is one of the reasons people will come to your product. Just make sure you are providing metrics that people actually use and care about. #2: The virtues of transparency Since your data processing is one of your competitive advantages, you might be tempted to keep it under wraps, as you might otherwise feel like you are revealing the ingredients for your secret sauce. However, opaqueness is not a good way to build trust in your numbers. After all, you aren’t providing numbers pulled out of nowhere, but rather something that would be too much work for your users to do themselves. The way in which it is calculated is not going to be a trade secret. “I could tell you how I calculated your numbers, but I am afraid that’s a secret. Don’t worry, just trust me.” Moreover, how different metrics are calculated can be a source of heated debate. The different methods will tend to have their own strengths and weaknesses, so you should make it clear which method you are using. People will then also know how to better interpret the data you are providing. Think of the churn rate example from earlier. People are better served if they can follow your approach. A good example of this in the world of SaaS metrics is around ARR (annual recurring revenue) and how it is often used interchangeably with annual run rate. The confusion is not surprising considering the shared initials. The former is the recurring revenue that comes from your annual plans, whereas the latter is how much recurring revenue you would get from all your plans – regardless of their duration – in a year (or MRR x 12 for short). One can argue about the merits of both and when each one is useful, but the main thing is not to confuse the two. That being said, it could be worse… I once heard a podcast state ARR as average recurring revenue. https://twitter.com/Mqsley/status/1403371831646642176 As a final point on this, the building blocks of your metrics have value of their own. If you are assessing the loading time of your application, the average time will be interesting, but you also want to dig into the numbers that make up this average, and so identify the major sources of latency. This is key for identifying which performance improvements will yield the highest return on investment. DataDog does this well, as they make it really easy to explore what their aggregate charts consist of. #3: The challenges of improvement Like any product out in the world, there will always be things you would like to add or change. For an analytics product this is harder than you might expect, so be careful if you are someone who likes to “move fast and break things”, as some things are harder to repair than others. When you tweak the way you calculate a metric in order to account for a new scenario, you are in a bit of a tricky situation. If you reprocess pre-existing data then your previous values will also change (to which people don’t take kindly when this happens out of the blue). If you don’t reprocess, and the changes apply only going forward, then you may have inconsistent numbers, and it is hard to make it clear why your January numbers are different from your February ones. Also, if you are actually improving the calculations, should you not provide this improved data? There are multiple ways of dealing with or mitigating these challenges, including adding new data settings, coordinated data reprocessing, and being transparent on how the numbers are obtained (as mentioned above). A clear data processing pipeline will also make any improvements easier to implement. Yet the best cure is prevention, so plan with care how you process your data and calculate your metrics. Final thoughts Working on a data product can present its own unexpected challenges even for those who have worked with data before. Not only do you have to make the underlying complexity clear and actionable, but you also have to provide the right amount of depth and transparency. All the while, you are dealing with a constant flow of ever-changing data. As we have seen it can get complicated quickly! But it’s worth it. Information is key for empowering people to make the best decisions, and being able to provide those insights is a rewarding thing indeed. </sys

B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses. Why SaaS Pricing pages are fascinating Pricing pages are a rare window into a SaaS business’s strategy. It’s often the single part of a B2B site that deals in pure facts. Where other landing pages and product info pages are driven by fuzzy information like value and benefit (both of which are important), on the pricing page there’s no escaping the facts. “Pricing pages are a rare window into a business’s strategy.” Despite this (or maybe because of this), the presentation of a pricing page can make or break the effective ability of a website to generate signups. The majority of SaaS businesses today rely on “self-service” signup flows, meaning that there’s no human involved in the process. The website is your sales rep in this case, and the Pricing page is often the final hurdle to a conversion. Every business should care about how they communicate the information on their Pricing page, and looking to others for inspiration is a great place to start. That’s why for the second time, we’ve compiled a giant analysis of top pricing pages in the SaaS industry. Our 2015 analysis remains one of our most popular posts of all time. This time round, it’s over double the size, covering more than 100 businesses! We’re covering businesses representing a large range of SaaS industry verticals: Billing & Finance 10.5% Business Intelligence 6.1% Commerce 2.6% Communication 7.9% CRM 14.9% Design 4.4% Dev & Infrastructure 11.4% HR Management 10.5% Marketing 9.6% Office Management 1.8% Project Management 13.2% Sales 3.5% Other 3.5% View the pages As always, you can view the full-length pricing page screenshots in this pinterest board. This alone serves as a great resource for your own inspiration – have a browse yourself! Our findings Below you can find a breakdown of the insights and findings in this year’s analysis. Pricing pages contain several key elements, and it made sense to look in detail at each of these elements one by one. You’ll also find hand-picked examples for each of the elements, from the set of pages we analyzed. Let’s dig in! Side-note: The examples included in this post are not necessarily what we consider the “best” or “winner” of any specific category — they’re interesting examples of the concepts and elements we’re discussing. This is not an awards ceremony ;) Part 1: The Headline If we’re in agreement that the pricing page is critical, the headline is the critical part of the pricing page. Usually located in the “Hero” section, it’s the first thing visitors will fix their eyes on before they inevitably scroll down to look at your offering. The job of the headline in this not to communicate any specific information as such — rather to set the tone and emotion of the page (yes, emotion is always involved), and to make sure it reflects your brand values. Looking at the 100+ headlines in this analysis, the language used is surprisingly similar, based around the core values of: Flexibility Choice Simplicity Fitting your (the visitor’s) needs Affordability If you had to create a single generic headline that was the average of all included in the analysis, it would be something like: “Our pricing is flexible: Choose a simple, affordable plan that fits your needs.” (I don’t recommend using this one, it’s too generic and not very good.) It’s all about the language One of the easiest ways to get a high-level impression of the language used in these headlines is with a word cloud. Here, we’ve removed some “stop” words (‘a’, ‘the’, brand names etc.) and what’s left is a good indication of the general sentiment of pricing pages: What we learned Conveying the right emotion and tone is more important here than useful or actionable information. It sets up the entire page. Keep it short (the vast majority are less than 7 words). You can also use this to reinforce your brand values – great for consistency across your site. Example: Kayako, for the feeling of flexibility and simplicity The folks at Kayako have done a great job of designing a pricing page that inspires confidence in the visitor. The language on the page — particularly the headline — reinforces and encourages people that they’re not being tricked in any way (transparency) and no matter what your business looks like, they have something for you (flexibility): View the page at kayako.com/pricing Part 2: Monthly vs. Annual billing Should you bill your customers on a monthly or annual basis? Both have benefits and drawbacks. Monthly billing: Requires less up-front commitment from customers (lower friction to buy) Allows you to effectively analyze metrics like churn rate Suits a self-service signup flow Annual billing: Increases cashflow Can make revenue metrics more difficult Can reduce churn May need a higher-touch Sales and Support approach Proportion of businesses offering only a monthly plan vs. only annual vs. both monthly and annual. What we learned Think carefully about defaults, and their impact. Don’t feel that you have to offer both monthly and annual plans — many don’t. Annual plans usually need some discount incentive over monthly (e.g. 1 month free). Example 1: Vend, for the classic ‘toggle’ switch The toggle switch has become the most common UI implementation of presenting both monthly and annual pricing to the visitor. The benefit of using this today is that it’s almost an expectation from visitors that they’ll find this (or something very similar) on your page. The more interesting decision to make here, given that you want to offer both annual and monthly pricing, is which option to make default: Default to monthly: Your prices look lower (the numbers are smaller) but more customers on monthly plans could mean greater churn risk. Default to annual: The prices look higher, but you’re nudging users towards a bigger revenue commitment. View the page at https://www.vendhq.com/pricing Example 2: Leadpages, for offering a 2-year plan I’d love to know the thinking behind adding the Leadpages 2-year plan. On the surface, it might seem like an odd choice — it could be that the LeadPages team had committed, satisfied customers who were more than happy to buy in to a longer term. Plus, they save even more over a monthly plan – 46%! On the flip side, this could be a case of Price Anchoring. The 2-year plan may work from a psychological perspective to make the Annual plan seem less of a commitment, and therefore drive increase Annual signups. Price Anchoring exists everywhere on the web, especially in SaaS where every small impact is measurable. Read more about it in this mint.com explainer. Is it something you should implement on your own pricing page? That’s a decision you need to make. View the page at leadpages.net/pricing Example 3: Talkdesk, for not even mentioning the billing period This move from Talkdesk highlights just how much information is assumed by the user on modern websites. When you’ve evaluated enough SaaS products, you’re quite aware that nearly all of them show monthly pricing (unless there’s a separate annual option). So they don’t even show the billing period. Secondly, Talkdesk really pushes visitors towards a live demo or sales call, suggesting that pricing is discussed in more detail through this process (it’s not as important to be explicit here). For a predominantly self-serve signup, this strategy would still be a little risky. View the page at talkdesk.com/pricing Part 3: Pricing tiers You may feel like the presentation and layout of SaaS pricing plans has converged on a single, un-interesting design. Everyone knows and recognizes the “3 column” style. But surprisingly, there’s room for numerous small optimizations and innovation here — as you’ll see in the examples! The goal of this section is to present the different pricing plans for your product in a simple, understandable way. However, under the surface most businesses are using psychology to get you to spend that little bit more – with strategies for emphasizing (or de-emphasizing) certain elements. What we learned The “expected” design works for a reason. It’s often advisable to stick to Good, Better, Best – unless you’re targeting a large number of different personas. Be creative when emphasising your “preferred” plan – see the examples below. State who the plan is for! There’s no reason not to do this. This can also be aspirational – visitors will buy the plan that corresponds what they want to be. Example: Highrise, for reversing the order Good – Better – Best. We always expect this order when looking at pricing options – because in 99% of cases this is how it’s presented. The Highrise team decided to reverse this though. Why would they do this? They want you to see the Premium (best) plan first. In the Western world at least, we always read from left to right. So put the Premium plan on the left! Doing this is not an act of trickery – I don’t think they expect you to “accidentally” sign up for the Premium plan. It’s more about where you put your attention first. View the page at highrisehq.com/pricing Geckoboard, for being clear about each plan’s target customer We mentioned this in our 2015 pricing analysis, but it seems to be an even stronger trend this time round – which I consider a good thing! Generally, pricing plans should be designed for a specific type of business. If you’re offering your product at ‘Price Point X’, it should be because there’s a specific type of customer you have in mind who will willingly buy at that price point. When it comes to the pricing page, you can make this even clearer by actually communicating the target customer for each plan. You’re basically saying “if you fit these criteria, this is the plan for you – so buy it.” Geckoboard is a prime example of this, with copy like “For growing businesses who want broader usage to focus their teams.” View the page at geckoboard.com/pricing Freshdesk for the delightful use of animation Highlighting the “best value” or “most popular” plan has been a strategy in SaaS for years. The thing is, such text is often meaningless and is really just there to pull attention towards a specific plan. Some businesses use color, size or other forms of visual accenting to do this. Freshdesk has gone one step further with animation! My eyes can’t help but be drawn to the ESTATE plan due to the simple, eye-catching animated illustration. This is proof of how effective animation can be on the web, when used sparingly. View the page at freshdesk.com/pricing Webflow, for simplifying complexity Some SaaS products grow and increase in complexity, especially in the way they’re priced. The Webflow product targets multiple personas: Individuals Freelance designers and website builders Full design teams The solution for each of those categories of customer is very different – offering a combination of design tools, collaboration features through to white-labelling and client billing. This can result in a messy, confusing Pricing page with mixed messaging. Instead, what they did was to add a sort of “pre-pricing” page, targeting each individual persona and directing them to their own specific pricing. Smart! View the page at webflow.com/pricing Part 4: Freemium or no Freemium? As we wrote in our recent article on The two sides of Freemium, the Freemium model in B2B SaaS has seen some controversy. When implemented badly or without a solid strategy, Freemium can cost far more than it ever pays you back. However, it can also provide a huge boost to growth sparking a feedback loop of referrals and upgrades — particularly for SaaS businesses spanning the gap between Consumer and Enterprise. What we learned Think about whether you want your free plan to be discoverable. Many businesses choose to de-emphasize their free offering, or even hide it. Try to visually differentiate your free plan, if it’s a radically-different (or limited) set of features. Be upfront about the limits of the free plan – this will help visitors make the decision. Example: GoSquared, for differentiating their Free tier Increasingly, SaaS businesses are moving away from positioning their Free tier on the same level as those that are paid. The idea behind this is to avoid visitors directly comparing Paid with Free — instead seeing the free option as a different, usually much more limited version of the product. GoSquared is a good example of this. The messaging is clear, honest and differentiated from the paid plans: View the page at gosquared.com/plans GoToMeeting, for hiding their Free plan You have to have good eyesight if you want to find the Free plan for GoToMeeting (see if you can find it in the screenshot below). It’s clear that they want the focus of this page to be purely on the paid offering. So why put the Free plan there at all? They want it to be there for the people who are specifically looking for it — not discoverable by those who didn’t know it existed. View the page at gotomeeting.com/meeting/pricing Part 5: Scalable pricing SaaS pricing is often more complex than a simple 3-tier structure. In the majority of cases, the pricing will also scale based on a variable such as “seats” or “active customers”, adding another dimension to the cost. A scalable pricing structure is your chance to make sure your product is valuable for both small businesses and large enterprise customers. Representing this additional complexity on the Pricing page can be tricky if you’re trying to avoid complex pricing matrices or calculators. Many of the businesses we studied take different approaches to this, with varying complexity. Remember that the design of your scalable pricing structure sets your path for revenue expansion for customers in the future. Modelling this in detail is always a good idea, avoiding potentially-painful changes to the pricing structure further down the line. What we learned It’s good to be explicit about how your pricing scales, rather than saying “starting from $x” – surprises aren’t fun for users. Pricing calculators can be a sign that your pricing is too complex. Make any interaction fun (or at least pleasant) to use – any positive reinforcement here can sway the visitor’s decision! Example: Gusto, for the simple slider We saw a lot of examples of the interactive pricing slider this year — definitely more than in 2015. It remains a great way to make the pricing page engaging (users interact and play with it) and the cost transparent to visitors. Gusto is a great example of this, allowing visitors to use the slider and select the number of people in the company: View the page at gusto.com/product/pricing Example: Marvel, for inline plan scaling The price of Marvel’s Team plan scales per user. The team have handled this really nicely by designing the scaling into the plan – allowing you to select the number of users inline. No pricing calculator required! View the page at marvelapp.com/plans Part 6: Pricing add-ons Add-ons are an increasingly popular trend in SaaS, especially where services can be unbundled into smaller confined solutions. The result is a more customised product for customers, who can add whichever add-ons they see value in. What we learned Add-ons require careful thinking about the parts of your product you consider “core” and those that could be unbundled. They usually result in a more complex pricing structure in your own system – you can end up with one “plan” for every combination of add-ons. The unbundled add-ons need to offer a clear, standalone value proposition to visitors for them make sense. They can work really well when offering more specialized or niche functionality not everyone would want to pay for. Example: HeavenHR We picked out European HRM startup HeavenHR here, as they give a very simple overview of add-ons to their core pricing. Nothing fancy here, nothing hidden. View the page at heavenhr.com/DE/de/preise Example: Teamleader Teamleader goes one step beyond the basics with add-ons, with a “build your own” feeling, rolling the scalable pricing and add-on selection into a single pricing calculator. Visitors can simply select the features and number of users they need, and see the final price instantly. View the page at teamleader.eu/pricing Part 7: Feature comparisons We always talk about selling value, not features when it comes to marketing a SaaS product. So why is it then nearly 70% of businesses in our analysis include a feature table on the pricing page? No matter how you present the value of your product on your website, there comes a point where certain visitors just want to see a list of features. This is especially true for Enterprise customers and larger businesses who have a “preferred” feature set in mind before they even land on your site. For these businesses, listing out the features of your platform simply allows them to check all the boxes when evaluating your solution. What we learned There’s nothing wrong with a table, which is usually the clearest way to convey this information! Add tooltips to the feature names, for deeper description of features that may not be obvious. Consider displaying “coming soon” features here, if they’re significant and may affect visitor’s decisions. Example: DroneDeploy There are so many giant, complex or plain boring SaaS feature comparisons out there (trust me, I’ve seen them all) and DroneDeploy’s isn’t one of them. This version: Is simple Picks a sensible level of detail for features Has tooltips for expanded feature details Is visually pleasing Has Call To Action buttons View the page at dronedeploy.com/pricing.html Example: ChartMogul Feature comparison for complex products and platforms can be difficult — there are a lot of features considered important by some users. At ChartMogul, we designed a collapsible table of categorized platform features. This allows visitors to drill down and dig into categories of features they care about, without being overwhelmed by a giant table requiring endless scrolling. View the page at chartmogul.com/pricing Part 8: Free trial (or no free trial) The free trial is a staple of most B2B SaaS solutions — many visitors will look for the trial signup button — a cry of “just let me see the thing” rather than digging around in marketing pages. This is fine, provided you can give a great self-service trial experience to customers. Onboarding is critical here, and in certain cases it may be better to push for a product demo or sales call. Check out some examples of this below. What we learned Offering a free trial usually makes sense UNLESS you’re primarily targeting Enterprise businesses, or it’s just not possible to give a smooth self-service onboarding experience. The lines between a free trial and Freemium are becoming blurred. There are benefits and drawbacks to both. (Read this article on the two sides of Freemium SaaS) The term “No credit card required” is used by almost every business offering a trial. Users will look for this and expect it. Example: Drift Drift doesn’t have a free trial, but they do have a “forever free” (Freemium) plan: View the page at drift.com/pricing Example: Base CRM Interestingly, Base does have a free trial, but it’s not linked from anywhere on the Pricing page. You only have to look at the screenshot below to see the event they’re trying to push visitors towards: A product demo. For more Enterprise-focused platforms, the demo route can be beneficial. Complex products are best demonstrated by real people (rather than self-service trials). Enterprise customers are more comfortable with this method of buying, where their questions can be answered and custom pricing can be discussed. View the page at getbase.com/pricing Part 9: Social proof Social proof on SaaS websites takes many forms: Human faces Customer logos Testimonial quotes Videos Social media posts …and other more experimental ones! Example: Leadpages for experimental social proof If you go to the Leadpages Pricing page and wait for a few seconds, you’ll probably see one of these popping up in the bottom corner of the page: View the page at leadpages.net/pricing This is a form of social proof that I’ve never seen before in SaaS. The goal of this is clear: To reassure visitors and inspire confidence by saying “Look! All of these people are buying the product right now, and we’re showing them to you in real time!” Is it a genuine real-time feed of people purchasing the product? I don’t know. Does it work? Well, what do you think? Example: Zenefits, for professional-looking customer videos As we covered in our SaaS Landing Pages analysis, Zenefits does a great job of providing social proof in the form of really slick customer testimonial videos. This is no different on the pricing page, where you’ll also find a selection of videos. Clearly, Zenefits understands the important of social proof throughout their site. View the page at zenefits.com/pricing Example: Autopilot, for putting customers front and center The Autopilot pricing page is full of different forms of social proof – logos, quotes, photos – and they all revolve around the success of their customers: View the page at autopilothq.com/pricing.html Takeaways Designing a SaaS Pricing page in 2017 is no less complex than it was two years ago. Despite the convergence of certain elements, and common trends in the industry, there’s no getting away from the fact that you need to give every single aspect of the page considerable thought – from every angle possible. The most engaging, interesting pricing pages in our study took existing concepts and pushed them into new areas, leveraging modern UX techniques to convey information accurately but also nudge visitors towards that all-important Signup button. The study here is proof that B2B pricing can be presented in engaging way that’s delightful to navigate. We hope that the data and examples above can provide your own team with inspiration when it comes to putting your own site together. Good luck! Did you find this analysis valuable? Please consider sharing the post with your own audience: NEW: B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses https://t.co/59FmegRkVZ #SaaS #pricing pic.twitter.com/QZWeAKAN8M — ChartMogul (@ChartMogul) July 20, 2017

[INST] B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses [/INST]

Why SaaS Pricing pages are fascinating Pricing pages are a rare window into a SaaS business’s strategy. It’s often the single part of a B2B site that deals in pure facts. Where other landing pages and product info pages are driven by fuzzy information like value and benefit (both of which are important), on the pricing page there’s no escaping the facts. “Pricing pages are a rare window into a business’s strategy.” Despite this (or maybe because of this), the presentation of a pricing page can make or break the effective ability of a website to generate signups. The majority of SaaS businesses today rely on “self-service” signup flows, meaning that there’s no human involved in the process. The website is your sales rep in this case, and the Pricing page is often the final hurdle to a conversion. Every business should care about how they communicate the information on their Pricing page, and looking to others for inspiration is a great place to start. That’s why for the second time, we’ve compiled a giant analysis of top pricing pages in the SaaS industry. Our 2015 analysis remains one of our most popular posts of all time. This time round, it’s over double the size, covering more than 100 businesses! We’re covering businesses representing a large range of SaaS industry verticals: Billing & Finance 10.5% Business Intelligence 6.1% Commerce 2.6% Communication 7.9% CRM 14.9% Design 4.4% Dev & Infrastructure 11.4% HR Management 10.5% Marketing 9.6% Office Management 1.8% Project Management 13.2% Sales 3.5% Other 3.5% View the pages As always, you can view the full-length pricing page screenshots in this pinterest board. This alone serves as a great resource for your own inspiration – have a browse yourself! Our findings Below you can find a breakdown of the insights and findings in this year’s analysis. Pricing pages contain several key elements, and it made sense to look in detail at each of these elements one by one. You’ll also find hand-picked examples for each of the elements, from the set of pages we analyzed. Let’s dig in! Side-note: The examples included in this post are not necessarily what we consider the “best” or “winner” of any specific category — they’re interesting examples of the concepts and elements we’re discussing. This is not an awards ceremony ;) Part 1: The Headline If we’re in agreement that the pricing page is critical, the headline is the critical part of the pricing page. Usually located in the “Hero” section, it’s the first thing visitors will fix their eyes on before they inevitably scroll down to look at your offering. The job of the headline in this not to communicate any specific information as such — rather to set the tone and emotion of the page (yes, emotion is always involved), and to make sure it reflects your brand values. Looking at the 100+ headlines in this analysis, the language used is surprisingly similar, based around the core values of: Flexibility Choice Simplicity Fitting your (the visitor’s) needs Affordability If you had to create a single generic headline that was the average of all included in the analysis, it would be something like: “Our pricing is flexible: Choose a simple, affordable plan that fits your needs.” (I don’t recommend using this one, it’s too generic and not very good.) It’s all about the language One of the easiest ways to get a high-level impression of the language used in these headlines is with a word cloud. Here, we’ve removed some “stop” words (‘a’, ‘the’, brand names etc.) and what’s left is a good indication of the general sentiment of pricing pages: What we learned Conveying the right emotion and tone is more important here than useful or actionable information. It sets up the entire page. Keep it short (the vast majority are less than 7 words). You can also use this to reinforce your brand values – great for consistency across your site. Example: Kayako, for the feeling of flexibility and simplicity The folks at Kayako have done a great job of designing a pricing page that inspires confidence in the visitor. The language on the page — particularly the headline — reinforces and encourages people that they’re not being tricked in any way (transparency) and no matter what your business looks like, they have something for you (flexibility): View the page at kayako.com/pricing Part 2: Monthly vs. Annual billing Should you bill your customers on a monthly or annual basis? Both have benefits and drawbacks. Monthly billing: Requires less up-front commitment from customers (lower friction to buy) Allows you to effectively analyze metrics like churn rate Suits a self-service signup flow Annual billing: Increases cashflow Can make revenue metrics more difficult Can reduce churn May need a higher-touch Sales and Support approach Proportion of businesses offering only a monthly plan vs. only annual vs. both monthly and annual. What we learned Think carefully about defaults, and their impact. Don’t feel that you have to offer both monthly and annual plans — many don’t. Annual plans usually need some discount incentive over monthly (e.g. 1 month free). Example 1: Vend, for the classic ‘toggle’ switch The toggle switch has become the most common UI implementation of presenting both monthly and annual pricing to the visitor. The benefit of using this today is that it’s almost an expectation from visitors that they’ll find this (or something very similar) on your page. The more interesting decision to make here, given that you want to offer both annual and monthly pricing, is which option to make default: Default to monthly: Your prices look lower (the numbers are smaller) but more customers on monthly plans could mean greater churn risk. Default to annual: The prices look higher, but you’re nudging users towards a bigger revenue commitment. View the page at https://www.vendhq.com/pricing Example 2: Leadpages, for offering a 2-year plan I’d love to know the thinking behind adding the Leadpages 2-year plan. On the surface, it might seem like an odd choice — it could be that the LeadPages team had committed, satisfied customers who were more than happy to buy in to a longer term. Plus, they save even more over a monthly plan – 46%! On the flip side, this could be a case of Price Anchoring. The 2-year plan may work from a psychological perspective to make the Annual plan seem less of a commitment, and therefore drive increase Annual signups. Price Anchoring exists everywhere on the web, especially in SaaS where every small impact is measurable. Read more about it in this mint.com explainer. Is it something you should implement on your own pricing page? That’s a decision you need to make. View the page at leadpages.net/pricing Example 3: Talkdesk, for not even mentioning the billing period This move from Talkdesk highlights just how much information is assumed by the user on modern websites. When you’ve evaluated enough SaaS products, you’re quite aware that nearly all of them show monthly pricing (unless there’s a separate annual option). So they don’t even show the billing period. Secondly, Talkdesk really pushes visitors towards a live demo or sales call, suggesting that pricing is discussed in more detail through this process (it’s not as important to be explicit here). For a predominantly self-serve signup, this strategy would still be a little risky. View the page at talkdesk.com/pricing Part 3: Pricing tiers You may feel like the presentation and layout of SaaS pricing plans has converged on a single, un-interesting design. Everyone knows and recognizes the “3 column” style. But surprisingly, there’s room for numerous small optimizations and innovation here — as you’ll see in the examples! The goal of this section is to present the different pricing plans for your product in a simple, understandable way. However, under the surface most businesses are using psychology to get you to spend that little bit more – with strategies for emphasizing (or de-emphasizing) certain elements. What we learned The “expected” design works for a reason. It’s often advisable to stick to Good, Better, Best – unless you’re targeting a large number of different personas. Be creative when emphasising your “preferred” plan – see the examples below. State who the plan is for! There’s no reason not to do this. This can also be aspirational – visitors will buy the plan that corresponds what they want to be. Example: Highrise, for reversing the order Good – Better – Best. We always expect this order when looking at pricing options – because in 99% of cases this is how it’s presented. The Highrise team decided to reverse this though. Why would they do this? They want you to see the Premium (best) plan first. In the Western world at least, we always read from left to right. So put the Premium plan on the left! Doing this is not an act of trickery – I don’t think they expect you to “accidentally” sign up for the Premium plan. It’s more about where you put your attention first. View the page at highrisehq.com/pricing Geckoboard, for being clear about each plan’s target customer We mentioned this in our 2015 pricing analysis, but it seems to be an even stronger trend this time round – which I consider a good thing! Generally, pricing plans should be designed for a specific type of business. If you’re offering your product at ‘Price Point X’, it should be because there’s a specific type of customer you have in mind who will willingly buy at that price point. When it comes to the pricing page, you can make this even clearer by actually communicating the target customer for each plan. You’re basically saying “if you fit these criteria, this is the plan for you – so buy it.” Geckoboard is a prime example of this, with copy like “For growing businesses who want broader usage to focus their teams.” View the page at geckoboard.com/pricing Freshdesk for the delightful use of animation Highlighting the “best value” or “most popular” plan has been a strategy in SaaS for years. The thing is, such text is often meaningless and is really just there to pull attention towards a specific plan. Some businesses use color, size or other forms of visual accenting to do this. Freshdesk has gone one step further with animation! My eyes can’t help but be drawn to the ESTATE plan due to the simple, eye-catching animated illustration. This is proof of how effective animation can be on the web, when used sparingly. View the page at freshdesk.com/pricing Webflow, for simplifying complexity Some SaaS products grow and increase in complexity, especially in the way they’re priced. The Webflow product targets multiple personas: Individuals Freelance designers and website builders Full design teams The solution for each of those categories of customer is very different – offering a combination of design tools, collaboration features through to white-labelling and client billing. This can result in a messy, confusing Pricing page with mixed messaging. Instead, what they did was to add a sort of “pre-pricing” page, targeting each individual persona and directing them to their own specific pricing. Smart! View the page at webflow.com/pricing Part 4: Freemium or no Freemium? As we wrote in our recent article on The two sides of Freemium, the Freemium model in B2B SaaS has seen some controversy. When implemented badly or without a solid strategy, Freemium can cost far more than it ever pays you back. However, it can also provide a huge boost to growth sparking a feedback loop of referrals and upgrades — particularly for SaaS businesses spanning the gap between Consumer and Enterprise. What we learned Think about whether you want your free plan to be discoverable. Many businesses choose to de-emphasize their free offering, or even hide it. Try to visually differentiate your free plan, if it’s a radically-different (or limited) set of features. Be upfront about the limits of the free plan – this will help visitors make the decision. Example: GoSquared, for differentiating their Free tier Increasingly, SaaS businesses are moving away from positioning their Free tier on the same level as those that are paid. The idea behind this is to avoid visitors directly comparing Paid with Free — instead seeing the free option as a different, usually much more limited version of the product. GoSquared is a good example of this. The messaging is clear, honest and differentiated from the paid plans: View the page at gosquared.com/plans GoToMeeting, for hiding their Free plan You have to have good eyesight if you want to find the Free plan for GoToMeeting (see if you can find it in the screenshot below). It’s clear that they want the focus of this page to be purely on the paid offering. So why put the Free plan there at all? They want it to be there for the people who are specifically looking for it — not discoverable by those who didn’t know it existed. View the page at gotomeeting.com/meeting/pricing Part 5: Scalable pricing SaaS pricing is often more complex than a simple 3-tier structure. In the majority of cases, the pricing will also scale based on a variable such as “seats” or “active customers”, adding another dimension to the cost. A scalable pricing structure is your chance to make sure your product is valuable for both small businesses and large enterprise customers. Representing this additional complexity on the Pricing page can be tricky if you’re trying to avoid complex pricing matrices or calculators. Many of the businesses we studied take different approaches to this, with varying complexity. Remember that the design of your scalable pricing structure sets your path for revenue expansion for customers in the future. Modelling this in detail is always a good idea, avoiding potentially-painful changes to the pricing structure further down the line. What we learned It’s good to be explicit about how your pricing scales, rather than saying “starting from $x” – surprises aren’t fun for users. Pricing calculators can be a sign that your pricing is too complex. Make any interaction fun (or at least pleasant) to use – any positive reinforcement here can sway the visitor’s decision! Example: Gusto, for the simple slider We saw a lot of examples of the interactive pricing slider this year — definitely more than in 2015. It remains a great way to make the pricing page engaging (users interact and play with it) and the cost transparent to visitors. Gusto is a great example of this, allowing visitors to use the slider and select the number of people in the company: View the page at gusto.com/product/pricing Example: Marvel, for inline plan scaling The price of Marvel’s Team plan scales per user. The team have handled this really nicely by designing the scaling into the plan – allowing you to select the number of users inline. No pricing calculator required! View the page at marvelapp.com/plans Part 6: Pricing add-ons Add-ons are an increasingly popular trend in SaaS, especially where services can be unbundled into smaller confined solutions. The result is a more customised product for customers, who can add whichever add-ons they see value in. What we learned Add-ons require careful thinking about the parts of your product you consider “core” and those that could be unbundled. They usually result in a more complex pricing structure in your own system – you can end up with one “plan” for every combination of add-ons. The unbundled add-ons need to offer a clear, standalone value proposition to visitors for them make sense. They can work really well when offering more specialized or niche functionality not everyone would want to pay for. Example: HeavenHR We picked out European HRM startup HeavenHR here, as they give a very simple overview of add-ons to their core pricing. Nothing fancy here, nothing hidden. View the page at heavenhr.com/DE/de/preise Example: Teamleader Teamleader goes one step beyond the basics with add-ons, with a “build your own” feeling, rolling the scalable pricing and add-on selection into a single pricing calculator. Visitors can simply select the features and number of users they need, and see the final price instantly. View the page at teamleader.eu/pricing Part 7: Feature comparisons We always talk about selling value, not features when it comes to marketing a SaaS product. So why is it then nearly 70% of businesses in our analysis include a feature table on the pricing page? No matter how you present the value of your product on your website, there comes a point where certain visitors just want to see a list of features. This is especially true for Enterprise customers and larger businesses who have a “preferred” feature set in mind before they even land on your site. For these businesses, listing out the features of your platform simply allows them to check all the boxes when evaluating your solution. What we learned There’s nothing wrong with a table, which is usually the clearest way to convey this information! Add tooltips to the feature names, for deeper description of features that may not be obvious. Consider displaying “coming soon” features here, if they’re significant and may affect visitor’s decisions. Example: DroneDeploy There are so many giant, complex or plain boring SaaS feature comparisons out there (trust me, I’ve seen them all) and DroneDeploy’s isn’t one of them. This version: Is simple Picks a sensible level of detail for features Has tooltips for expanded feature details Is visually pleasing Has Call To Action buttons View the page at dronedeploy.com/pricing.html Example: ChartMogul Feature comparison for complex products and platforms can be difficult — there are a lot of features considered important by some users. At ChartMogul, we designed a collapsible table of categorized platform features. This allows visitors to drill down and dig into categories of features they care about, without being overwhelmed by a giant table requiring endless scrolling. View the page at chartmogul.com/pricing Part 8: Free trial (or no free trial) The free trial is a staple of most B2B SaaS solutions — many visitors will look for the trial signup button — a cry of “just let me see the thing” rather than digging around in marketing pages. This is fine, provided you can give a great self-service trial experience to customers. Onboarding is critical here, and in certain cases it may be better to push for a product demo or sales call. Check out some examples of this below. What we learned Offering a free trial usually makes sense UNLESS you’re primarily targeting Enterprise businesses, or it’s just not possible to give a smooth self-service onboarding experience. The lines between a free trial and Freemium are becoming blurred. There are benefits and drawbacks to both. (Read this article on the two sides of Freemium SaaS) The term “No credit card required” is used by almost every business offering a trial. Users will look for this and expect it. Example: Drift Drift doesn’t have a free trial, but they do have a “forever free” (Freemium) plan: View the page at drift.com/pricing Example: Base CRM Interestingly, Base does have a free trial, but it’s not linked from anywhere on the Pricing page. You only have to look at the screenshot below to see the event they’re trying to push visitors towards: A product demo. For more Enterprise-focused platforms, the demo route can be beneficial. Complex products are best demonstrated by real people (rather than self-service trials). Enterprise customers are more comfortable with this method of buying, where their questions can be answered and custom pricing can be discussed. View the page at getbase.com/pricing Part 9: Social proof Social proof on SaaS websites takes many forms: Human faces Customer logos Testimonial quotes Videos Social media posts …and other more experimental ones! Example: Leadpages for experimental social proof If you go to the Leadpages Pricing page and wait for a few seconds, you’ll probably see one of these popping up in the bottom corner of the page: View the page at leadpages.net/pricing This is a form of social proof that I’ve never seen before in SaaS. The goal of this is clear: To reassure visitors and inspire confidence by saying “Look! All of these people are buying the product right now, and we’re showing them to you in real time!” Is it a genuine real-time feed of people purchasing the product? I don’t know. Does it work? Well, what do you think? Example: Zenefits, for professional-looking customer videos As we covered in our SaaS Landing Pages analysis, Zenefits does a great job of providing social proof in the form of really slick customer testimonial videos. This is no different on the pricing page, where you’ll also find a selection of videos. Clearly, Zenefits understands the important of social proof throughout their site. View the page at zenefits.com/pricing Example: Autopilot, for putting customers front and center The Autopilot pricing page is full of different forms of social proof – logos, quotes, photos – and they all revolve around the success of their customers: View the page at autopilothq.com/pricing.html Takeaways Designing a SaaS Pricing page in 2017 is no less complex than it was two years ago. Despite the convergence of certain elements, and common trends in the industry, there’s no getting away from the fact that you need to give every single aspect of the page considerable thought – from every angle possible. The most engaging, interesting pricing pages in our study took existing concepts and pushed them into new areas, leveraging modern UX techniques to convey information accurately but also nudge visitors towards that all-important Signup button. The study here is proof that B2B pricing can be presented in engaging way that’s delightful to navigate. We hope that the data and examples above can provide your own team with inspiration when it comes to putting your own site together. Good luck! Did you find this analysis valuable? Please consider sharing the post with your own audience: NEW: B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses https://t.co/59FmegRkVZ #SaaS #pricing pic.twitter.com/QZWeAKAN8M — ChartMogul (@ChartMogul) July 20, 2017

<sys> [INST] B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses [/INST] Why SaaS Pricing pages are fascinating Pricing pages are a rare window into a SaaS business’s strategy. It’s often the single part of a B2B site that deals in pure facts. Where other landing pages and product info pages are driven by fuzzy information like value and benefit (both of which are important), on the pricing page there’s no escaping the facts. “Pricing pages are a rare window into a business’s strategy.” Despite this (or maybe because of this), the presentation of a pricing page can make or break the effective ability of a website to generate signups. The majority of SaaS businesses today rely on “self-service” signup flows, meaning that there’s no human involved in the process. The website is your sales rep in this case, and the Pricing page is often the final hurdle to a conversion. Every business should care about how they communicate the information on their Pricing page, and looking to others for inspiration is a great place to start. That’s why for the second time, we’ve compiled a giant analysis of top pricing pages in the SaaS industry. Our 2015 analysis remains one of our most popular posts of all time. This time round, it’s over double the size, covering more than 100 businesses! We’re covering businesses representing a large range of SaaS industry verticals: Billing & Finance 10.5% Business Intelligence 6.1% Commerce 2.6% Communication 7.9% CRM 14.9% Design 4.4% Dev & Infrastructure 11.4% HR Management 10.5% Marketing 9.6% Office Management 1.8% Project Management 13.2% Sales 3.5% Other 3.5% View the pages As always, you can view the full-length pricing page screenshots in this pinterest board. This alone serves as a great resource for your own inspiration – have a browse yourself! Our findings Below you can find a breakdown of the insights and findings in this year’s analysis. Pricing pages contain several key elements, and it made sense to look in detail at each of these elements one by one. You’ll also find hand-picked examples for each of the elements, from the set of pages we analyzed. Let’s dig in! Side-note: The examples included in this post are not necessarily what we consider the “best” or “winner” of any specific category — they’re interesting examples of the concepts and elements we’re discussing. This is not an awards ceremony ;) Part 1: The Headline If we’re in agreement that the pricing page is critical, the headline is the critical part of the pricing page. Usually located in the “Hero” section, it’s the first thing visitors will fix their eyes on before they inevitably scroll down to look at your offering. The job of the headline in this not to communicate any specific information as such — rather to set the tone and emotion of the page (yes, emotion is always involved), and to make sure it reflects your brand values. Looking at the 100+ headlines in this analysis, the language used is surprisingly similar, based around the core values of: Flexibility Choice Simplicity Fitting your (the visitor’s) needs Affordability If you had to create a single generic headline that was the average of all included in the analysis, it would be something like: “Our pricing is flexible: Choose a simple, affordable plan that fits your needs.” (I don’t recommend using this one, it’s too generic and not very good.) It’s all about the language One of the easiest ways to get a high-level impression of the language used in these headlines is with a word cloud. Here, we’ve removed some “stop” words (‘a’, ‘the’, brand names etc.) and what’s left is a good indication of the general sentiment of pricing pages: What we learned Conveying the right emotion and tone is more important here than useful or actionable information. It sets up the entire page. Keep it short (the vast majority are less than 7 words). You can also use this to reinforce your brand values – great for consistency across your site. Example: Kayako, for the feeling of flexibility and simplicity The folks at Kayako have done a great job of designing a pricing page that inspires confidence in the visitor. The language on the page — particularly the headline — reinforces and encourages people that they’re not being tricked in any way (transparency) and no matter what your business looks like, they have something for you (flexibility): View the page at kayako.com/pricing Part 2: Monthly vs. Annual billing Should you bill your customers on a monthly or annual basis? Both have benefits and drawbacks. Monthly billing: Requires less up-front commitment from customers (lower friction to buy) Allows you to effectively analyze metrics like churn rate Suits a self-service signup flow Annual billing: Increases cashflow Can make revenue metrics more difficult Can reduce churn May need a higher-touch Sales and Support approach Proportion of businesses offering only a monthly plan vs. only annual vs. both monthly and annual. What we learned Think carefully about defaults, and their impact. Don’t feel that you have to offer both monthly and annual plans — many don’t. Annual plans usually need some discount incentive over monthly (e.g. 1 month free). Example 1: Vend, for the classic ‘toggle’ switch The toggle switch has become the most common UI implementation of presenting both monthly and annual pricing to the visitor. The benefit of using this today is that it’s almost an expectation from visitors that they’ll find this (or something very similar) on your page. The more interesting decision to make here, given that you want to offer both annual and monthly pricing, is which option to make default: Default to monthly: Your prices look lower (the numbers are smaller) but more customers on monthly plans could mean greater churn risk. Default to annual: The prices look higher, but you’re nudging users towards a bigger revenue commitment. View the page at https://www.vendhq.com/pricing Example 2: Leadpages, for offering a 2-year plan I’d love to know the thinking behind adding the Leadpages 2-year plan. On the surface, it might seem like an odd choice — it could be that the LeadPages team had committed, satisfied customers who were more than happy to buy in to a longer term. Plus, they save even more over a monthly plan – 46%! On the flip side, this could be a case of Price Anchoring. The 2-year plan may work from a psychological perspective to make the Annual plan seem less of a commitment, and therefore drive increase Annual signups. Price Anchoring exists everywhere on the web, especially in SaaS where every small impact is measurable. Read more about it in this mint.com explainer. Is it something you should implement on your own pricing page? That’s a decision you need to make. View the page at leadpages.net/pricing Example 3: Talkdesk, for not even mentioning the billing period This move from Talkdesk highlights just how much information is assumed by the user on modern websites. When you’ve evaluated enough SaaS products, you’re quite aware that nearly all of them show monthly pricing (unless there’s a separate annual option). So they don’t even show the billing period. Secondly, Talkdesk really pushes visitors towards a live demo or sales call, suggesting that pricing is discussed in more detail through this process (it’s not as important to be explicit here). For a predominantly self-serve signup, this strategy would still be a little risky. View the page at talkdesk.com/pricing Part 3: Pricing tiers You may feel like the presentation and layout of SaaS pricing plans has converged on a single, un-interesting design. Everyone knows and recognizes the “3 column” style. But surprisingly, there’s room for numerous small optimizations and innovation here — as you’ll see in the examples! The goal of this section is to present the different pricing plans for your product in a simple, understandable way. However, under the surface most businesses are using psychology to get you to spend that little bit more – with strategies for emphasizing (or de-emphasizing) certain elements. What we learned The “expected” design works for a reason. It’s often advisable to stick to Good, Better, Best – unless you’re targeting a large number of different personas. Be creative when emphasising your “preferred” plan – see the examples below. State who the plan is for! There’s no reason not to do this. This can also be aspirational – visitors will buy the plan that corresponds what they want to be. Example: Highrise, for reversing the order Good – Better – Best. We always expect this order when looking at pricing options – because in 99% of cases this is how it’s presented. The Highrise team decided to reverse this though. Why would they do this? They want you to see the Premium (best) plan first. In the Western world at least, we always read from left to right. So put the Premium plan on the left! Doing this is not an act of trickery – I don’t think they expect you to “accidentally” sign up for the Premium plan. It’s more about where you put your attention first. View the page at highrisehq.com/pricing Geckoboard, for being clear about each plan’s target customer We mentioned this in our 2015 pricing analysis, but it seems to be an even stronger trend this time round – which I consider a good thing! Generally, pricing plans should be designed for a specific type of business. If you’re offering your product at ‘Price Point X’, it should be because there’s a specific type of customer you have in mind who will willingly buy at that price point. When it comes to the pricing page, you can make this even clearer by actually communicating the target customer for each plan. You’re basically saying “if you fit these criteria, this is the plan for you – so buy it.” Geckoboard is a prime example of this, with copy like “For growing businesses who want broader usage to focus their teams.” View the page at geckoboard.com/pricing Freshdesk for the delightful use of animation Highlighting the “best value” or “most popular” plan has been a strategy in SaaS for years. The thing is, such text is often meaningless and is really just there to pull attention towards a specific plan. Some businesses use color, size or other forms of visual accenting to do this. Freshdesk has gone one step further with animation! My eyes can’t help but be drawn to the ESTATE plan due to the simple, eye-catching animated illustration. This is proof of how effective animation can be on the web, when used sparingly. View the page at freshdesk.com/pricing Webflow, for simplifying complexity Some SaaS products grow and increase in complexity, especially in the way they’re priced. The Webflow product targets multiple personas: Individuals Freelance designers and website builders Full design teams The solution for each of those categories of customer is very different – offering a combination of design tools, collaboration features through to white-labelling and client billing. This can result in a messy, confusing Pricing page with mixed messaging. Instead, what they did was to add a sort of “pre-pricing” page, targeting each individual persona and directing them to their own specific pricing. Smart! View the page at webflow.com/pricing Part 4: Freemium or no Freemium? As we wrote in our recent article on The two sides of Freemium, the Freemium model in B2B SaaS has seen some controversy. When implemented badly or without a solid strategy, Freemium can cost far more than it ever pays you back. However, it can also provide a huge boost to growth sparking a feedback loop of referrals and upgrades — particularly for SaaS businesses spanning the gap between Consumer and Enterprise. What we learned Think about whether you want your free plan to be discoverable. Many businesses choose to de-emphasize their free offering, or even hide it. Try to visually differentiate your free plan, if it’s a radically-different (or limited) set of features. Be upfront about the limits of the free plan – this will help visitors make the decision. Example: GoSquared, for differentiating their Free tier Increasingly, SaaS businesses are moving away from positioning their Free tier on the same level as those that are paid. The idea behind this is to avoid visitors directly comparing Paid with Free — instead seeing the free option as a different, usually much more limited version of the product. GoSquared is a good example of this. The messaging is clear, honest and differentiated from the paid plans: View the page at gosquared.com/plans GoToMeeting, for hiding their Free plan You have to have good eyesight if you want to find the Free plan for GoToMeeting (see if you can find it in the screenshot below). It’s clear that they want the focus of this page to be purely on the paid offering. So why put the Free plan there at all? They want it to be there for the people who are specifically looking for it — not discoverable by those who didn’t know it existed. View the page at gotomeeting.com/meeting/pricing Part 5: Scalable pricing SaaS pricing is often more complex than a simple 3-tier structure. In the majority of cases, the pricing will also scale based on a variable such as “seats” or “active customers”, adding another dimension to the cost. A scalable pricing structure is your chance to make sure your product is valuable for both small businesses and large enterprise customers. Representing this additional complexity on the Pricing page can be tricky if you’re trying to avoid complex pricing matrices or calculators. Many of the businesses we studied take different approaches to this, with varying complexity. Remember that the design of your scalable pricing structure sets your path for revenue expansion for customers in the future. Modelling this in detail is always a good idea, avoiding potentially-painful changes to the pricing structure further down the line. What we learned It’s good to be explicit about how your pricing scales, rather than saying “starting from $x” – surprises aren’t fun for users. Pricing calculators can be a sign that your pricing is too complex. Make any interaction fun (or at least pleasant) to use – any positive reinforcement here can sway the visitor’s decision! Example: Gusto, for the simple slider We saw a lot of examples of the interactive pricing slider this year — definitely more than in 2015. It remains a great way to make the pricing page engaging (users interact and play with it) and the cost transparent to visitors. Gusto is a great example of this, allowing visitors to use the slider and select the number of people in the company: View the page at gusto.com/product/pricing Example: Marvel, for inline plan scaling The price of Marvel’s Team plan scales per user. The team have handled this really nicely by designing the scaling into the plan – allowing you to select the number of users inline. No pricing calculator required! View the page at marvelapp.com/plans Part 6: Pricing add-ons Add-ons are an increasingly popular trend in SaaS, especially where services can be unbundled into smaller confined solutions. The result is a more customised product for customers, who can add whichever add-ons they see value in. What we learned Add-ons require careful thinking about the parts of your product you consider “core” and those that could be unbundled. They usually result in a more complex pricing structure in your own system – you can end up with one “plan” for every combination of add-ons. The unbundled add-ons need to offer a clear, standalone value proposition to visitors for them make sense. They can work really well when offering more specialized or niche functionality not everyone would want to pay for. Example: HeavenHR We picked out European HRM startup HeavenHR here, as they give a very simple overview of add-ons to their core pricing. Nothing fancy here, nothing hidden. View the page at heavenhr.com/DE/de/preise Example: Teamleader Teamleader goes one step beyond the basics with add-ons, with a “build your own” feeling, rolling the scalable pricing and add-on selection into a single pricing calculator. Visitors can simply select the features and number of users they need, and see the final price instantly. View the page at teamleader.eu/pricing Part 7: Feature comparisons We always talk about selling value, not features when it comes to marketing a SaaS product. So why is it then nearly 70% of businesses in our analysis include a feature table on the pricing page? No matter how you present the value of your product on your website, there comes a point where certain visitors just want to see a list of features. This is especially true for Enterprise customers and larger businesses who have a “preferred” feature set in mind before they even land on your site. For these businesses, listing out the features of your platform simply allows them to check all the boxes when evaluating your solution. What we learned There’s nothing wrong with a table, which is usually the clearest way to convey this information! Add tooltips to the feature names, for deeper description of features that may not be obvious. Consider displaying “coming soon” features here, if they’re significant and may affect visitor’s decisions. Example: DroneDeploy There are so many giant, complex or plain boring SaaS feature comparisons out there (trust me, I’ve seen them all) and DroneDeploy’s isn’t one of them. This version: Is simple Picks a sensible level of detail for features Has tooltips for expanded feature details Is visually pleasing Has Call To Action buttons View the page at dronedeploy.com/pricing.html Example: ChartMogul Feature comparison for complex products and platforms can be difficult — there are a lot of features considered important by some users. At ChartMogul, we designed a collapsible table of categorized platform features. This allows visitors to drill down and dig into categories of features they care about, without being overwhelmed by a giant table requiring endless scrolling. View the page at chartmogul.com/pricing Part 8: Free trial (or no free trial) The free trial is a staple of most B2B SaaS solutions — many visitors will look for the trial signup button — a cry of “just let me see the thing” rather than digging around in marketing pages. This is fine, provided you can give a great self-service trial experience to customers. Onboarding is critical here, and in certain cases it may be better to push for a product demo or sales call. Check out some examples of this below. What we learned Offering a free trial usually makes sense UNLESS you’re primarily targeting Enterprise businesses, or it’s just not possible to give a smooth self-service onboarding experience. The lines between a free trial and Freemium are becoming blurred. There are benefits and drawbacks to both. (Read this article on the two sides of Freemium SaaS) The term “No credit card required” is used by almost every business offering a trial. Users will look for this and expect it. Example: Drift Drift doesn’t have a free trial, but they do have a “forever free” (Freemium) plan: View the page at drift.com/pricing Example: Base CRM Interestingly, Base does have a free trial, but it’s not linked from anywhere on the Pricing page. You only have to look at the screenshot below to see the event they’re trying to push visitors towards: A product demo. For more Enterprise-focused platforms, the demo route can be beneficial. Complex products are best demonstrated by real people (rather than self-service trials). Enterprise customers are more comfortable with this method of buying, where their questions can be answered and custom pricing can be discussed. View the page at getbase.com/pricing Part 9: Social proof Social proof on SaaS websites takes many forms: Human faces Customer logos Testimonial quotes Videos Social media posts …and other more experimental ones! Example: Leadpages for experimental social proof If you go to the Leadpages Pricing page and wait for a few seconds, you’ll probably see one of these popping up in the bottom corner of the page: View the page at leadpages.net/pricing This is a form of social proof that I’ve never seen before in SaaS. The goal of this is clear: To reassure visitors and inspire confidence by saying “Look! All of these people are buying the product right now, and we’re showing them to you in real time!” Is it a genuine real-time feed of people purchasing the product? I don’t know. Does it work? Well, what do you think? Example: Zenefits, for professional-looking customer videos As we covered in our SaaS Landing Pages analysis, Zenefits does a great job of providing social proof in the form of really slick customer testimonial videos. This is no different on the pricing page, where you’ll also find a selection of videos. Clearly, Zenefits understands the important of social proof throughout their site. View the page at zenefits.com/pricing Example: Autopilot, for putting customers front and center The Autopilot pricing page is full of different forms of social proof – logos, quotes, photos – and they all revolve around the success of their customers: View the page at autopilothq.com/pricing.html Takeaways Designing a SaaS Pricing page in 2017 is no less complex than it was two years ago. Despite the convergence of certain elements, and common trends in the industry, there’s no getting away from the fact that you need to give every single aspect of the page considerable thought – from every angle possible. The most engaging, interesting pricing pages in our study took existing concepts and pushed them into new areas, leveraging modern UX techniques to convey information accurately but also nudge visitors towards that all-important Signup button. The study here is proof that B2B pricing can be presented in engaging way that’s delightful to navigate. We hope that the data and examples above can provide your own team with inspiration when it comes to putting your own site together. Good luck! Did you find this analysis valuable? Please consider sharing the post with your own audience: NEW: B2B SaaS pricing pages in 2017: Lessons from 100+ top businesses https://t.co/59FmegRkVZ #SaaS #pricing pic.twitter.com/QZWeAKAN8M — ChartMogul (@ChartMogul) July 20, 2017 </sys

Add Context to Your HappyFox Tickets With ChartMogul. At ChartMogul, we believe that everyone in your company should understand how their actions contribute to the bottom line. For many of our customers, that means giving their full team access to ChartMogul so they can explore revenue and customer data and support faster business growth. But it’s just as important to serve up revenue and subscription billing data in the context of other activities — for instance, when your customer success team is dealing with support tickets. HappyFox’s new ChartMogul integration helps customer success teams access key subscriber information, directly within HappyFox, in order to improve support. Now they can access details like monthly recurring revenue, customer start date, active subscriptions and plans — all without leaving a ticket. About HappyFox HappyFox offers an enterprise-grade help desk ticketing system and live chat software. Their software focuses on improving agent productivity and success by making it easy to unify, manage and act on inbound support requests. Connect ChartMogul and HappyFox today With this integration, success teams can improve response time and avoid manually querying customer information. Already using HappyFox? Connecting ChartMogul is easy — just grab your API credentials and enter them into the ChartMogul app in the HappyFox app store. You can follow these instructions or watch the video below. We’re so honored that HappyFox has added an integration for ChartMogul, and love seeing our customers find new ways to use data to support their customers. Do you have an idea for a ChartMogul integration? Learn more about our Metrics API and start building!

[INST] Add Context to Your HappyFox Tickets With ChartMogul [/INST]

At ChartMogul, we believe that everyone in your company should understand how their actions contribute to the bottom line. For many of our customers, that means giving their full team access to ChartMogul so they can explore revenue and customer data and support faster business growth. But it’s just as important to serve up revenue and subscription billing data in the context of other activities — for instance, when your customer success team is dealing with support tickets. HappyFox’s new ChartMogul integration helps customer success teams access key subscriber information, directly within HappyFox, in order to improve support. Now they can access details like monthly recurring revenue, customer start date, active subscriptions and plans — all without leaving a ticket. About HappyFox HappyFox offers an enterprise-grade help desk ticketing system and live chat software. Their software focuses on improving agent productivity and success by making it easy to unify, manage and act on inbound support requests. Connect ChartMogul and HappyFox today With this integration, success teams can improve response time and avoid manually querying customer information. Already using HappyFox? Connecting ChartMogul is easy — just grab your API credentials and enter them into the ChartMogul app in the HappyFox app store. You can follow these instructions or watch the video below. We’re so honored that HappyFox has added an integration for ChartMogul, and love seeing our customers find new ways to use data to support their customers. Do you have an idea for a ChartMogul integration? Learn more about our Metrics API and start building!

<sys> [INST] Add Context to Your HappyFox Tickets With ChartMogul [/INST] At ChartMogul, we believe that everyone in your company should understand how their actions contribute to the bottom line. For many of our customers, that means giving their full team access to ChartMogul so they can explore revenue and customer data and support faster business growth. But it’s just as important to serve up revenue and subscription billing data in the context of other activities — for instance, when your customer success team is dealing with support tickets. HappyFox’s new ChartMogul integration helps customer success teams access key subscriber information, directly within HappyFox, in order to improve support. Now they can access details like monthly recurring revenue, customer start date, active subscriptions and plans — all without leaving a ticket. About HappyFox HappyFox offers an enterprise-grade help desk ticketing system and live chat software. Their software focuses on improving agent productivity and success by making it easy to unify, manage and act on inbound support requests. Connect ChartMogul and HappyFox today With this integration, success teams can improve response time and avoid manually querying customer information. Already using HappyFox? Connecting ChartMogul is easy — just grab your API credentials and enter them into the ChartMogul app in the HappyFox app store. You can follow these instructions or watch the video below. We’re so honored that HappyFox has added an integration for ChartMogul, and love seeing our customers find new ways to use data to support their customers. Do you have an idea for a ChartMogul integration? Learn more about our Metrics API and start building! </sys

Understanding and Benchmarking Your MRR Movements. Tring Tring. You just received a notification from ChartMogul. A new customer signed up. Oh yes! Your monthly recurring revenue (MRR) just shot up. Tring Tring. Another notification. A customer just canceled. Oh no! Your MRR went down. Tring Tring. A customer just upgraded their plan from basic to premium. Yes! MRR goes up again. You get the point. Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. Understanding and being on top of all these MRR movements can sometimes get confusing. To simplify this a bit, you can think that your MRR movements only have two components: MRR Added — i.e. the revenue that your business added in a particular period MRR Lost — i.e. the revenue that your business lost Below is a screenshot of the MRR movements chart in ChartMogul. The blue bars show the MRR added while the pink ones show the MRR lost. If your goal is to grow your business, you need to add more MRR than you lose. So the blue bars need to add up to more than the pink ones. Understanding MRR Movements Let’s dive deeper into how your SaaS business adds or loses MRR. And how those changes are categorized in SaaS as MRR movements. You can add MRR to your business by: Attracting new customers — in SaaS jargon, this is called a New Business MRR When existing customers pay more — this is called Expansion MRR Re-attracting ex-customers — Reactivation MRR And, you can lose MRR when your: Customers cancel — Churn MRR Existing customers start paying less — Contraction MRR So that’s how you lose or add MRR to your business. Now that you have a basic understanding of MRR movements, let’s look at these metrics for an average startup. Benchmarking MRR Movements by MRR Bands MRR Added Benchmarks As we discussed above, MRR added is made up of three components: i) New Business, ii) Expansion & iii) Reactivation We analyzed, aggregated and anonymized data from ChartMogul to find out how MRR movements split up across these three sub-components. The chart below shows new business MRR as a percentage of MRR added. As you would expect, new business makes up the largest component of MRR added for most businesses. Specifically, for startups with MRR <$10k, new business MRR makes up for 77.7% of their MRR added. As businesses grow, the proportion of revenue generated from new business decreases. It goes down to almost half (50.7%) for startups with MRR >$1m. This is because as SaaS businesses grow, they focus their energy on increasing revenue from their existing customers. Hence, the proportion of expansion revenue as a percentage of total MRR added increases. As you’ll notice in the chart below, startups with >$1m in MRR, generate 36.1% of MRR added from expansion activities. This is the classic “land and expand” strategy that many SaaS businesses employ. The third component of MRR added is reactivation. This component remains roughly stable throughout business growth, contributing to 9-13% of MRR added. MRR Lost Benchmarks Now, let’s move on to MRR lost. As a reminder, MRR lost can be grouped into two components: i) Churn and ii) Contraction. The chart below shows Churn MRR as a percentage of total MRR lost. Churn makes up for the bulk of the MRR lost — roughly 70-80%. Here too, as the business grows, contraction MRR as a percentage of MRR lost increases in proportion. Although, it does eventually stabilize around that 30% range. Benchmarking MRR Movements by ARPA Bands In the section above, we looked at MRR movements by the MRR band. In this section, we look at MRR movements by bands of average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account, i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA in ChartMogul. Why look at MRR movements by ARPA band? Well, everything is sort of the same at a given ARPA value. The way you sell, the way you service, and the way you retain all depend on your ARPA. MRR Added Benchmarks by ARPA Bands The chart below shows new business MRR as a percentage of MRR added across bands of ARPA per month. As you’ll notice, here too, new business MRR makes up the largest share of MRR added. Although, at higher ARPA, this proportion does get smaller. This is because, at a higher ARPA, expansion starts to contribute more to the MRR added. For example, companies with ARPA per month of >$500 or annual contracts over $6k get 43.7% of their revenue through expansion. For companies with an ARPA of less than $10, it’s only 7.9%. The reactivation proportion of MRR also depends on your ARPA. At a higher ARPA, your reactivation MRR decreases. One reason for this could be that at a higher ARPA, fewer customers take the knee-jerk reaction of churning. And because of that informed decision, fewer come back. MRR Lost Benchmarks by ARPA Bands As for MRR lost, Churn is the largest contributor. Although, for startups with ARPA >$500, churn contributes to only a little more than half of the revenue lost. The rest is contraction MRR. If your business is in a higher ARPA band, retaining existing customers and making sure they are using your product becomes of key importance. Calculation Methodology. We used anonymized and aggregated data from ChartMogul’s platform to carry out this analysis. We categorized companies into MRR & ARPA bands and then calculated aggregates over 3 months (Dec ‘21, Jan ‘22 & Feb ‘22). Three Questions You Should Ask Yourself Now that you understand the basics of MRR movements, there are three questions that you should ask yourself: Do you understand the dynamics of MRR movements for your particular business? For example, do you know how much of your MRR added comes from new business vs expansion or reactivation? Do you have an expansion loop built-in within your product? As businesses grow, one of the key drivers for their growth is expansion revenue. Does your pricing strategy take this into account? Do you have a strategy in place to contain contraction? Contraction can be as high as 45% of all MRR lost at higher ARPA’s. Having a strategy in place to contain that could help you grow faster. As is wisely said, MRR Saved = MRR Gained :)

[INST] Understanding and Benchmarking Your MRR Movements [/INST]

Tring Tring. You just received a notification from ChartMogul. A new customer signed up. Oh yes! Your monthly recurring revenue (MRR) just shot up. Tring Tring. Another notification. A customer just canceled. Oh no! Your MRR went down. Tring Tring. A customer just upgraded their plan from basic to premium. Yes! MRR goes up again. You get the point. Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. Understanding and being on top of all these MRR movements can sometimes get confusing. To simplify this a bit, you can think that your MRR movements only have two components: MRR Added — i.e. the revenue that your business added in a particular period MRR Lost — i.e. the revenue that your business lost Below is a screenshot of the MRR movements chart in ChartMogul. The blue bars show the MRR added while the pink ones show the MRR lost. If your goal is to grow your business, you need to add more MRR than you lose. So the blue bars need to add up to more than the pink ones. Understanding MRR Movements Let’s dive deeper into how your SaaS business adds or loses MRR. And how those changes are categorized in SaaS as MRR movements. You can add MRR to your business by: Attracting new customers — in SaaS jargon, this is called a New Business MRR When existing customers pay more — this is called Expansion MRR Re-attracting ex-customers — Reactivation MRR And, you can lose MRR when your: Customers cancel — Churn MRR Existing customers start paying less — Contraction MRR So that’s how you lose or add MRR to your business. Now that you have a basic understanding of MRR movements, let’s look at these metrics for an average startup. Benchmarking MRR Movements by MRR Bands MRR Added Benchmarks As we discussed above, MRR added is made up of three components: i) New Business, ii) Expansion & iii) Reactivation We analyzed, aggregated and anonymized data from ChartMogul to find out how MRR movements split up across these three sub-components. The chart below shows new business MRR as a percentage of MRR added. As you would expect, new business makes up the largest component of MRR added for most businesses. Specifically, for startups with MRR <$10k, new business MRR makes up for 77.7% of their MRR added. As businesses grow, the proportion of revenue generated from new business decreases. It goes down to almost half (50.7%) for startups with MRR >$1m. This is because as SaaS businesses grow, they focus their energy on increasing revenue from their existing customers. Hence, the proportion of expansion revenue as a percentage of total MRR added increases. As you’ll notice in the chart below, startups with >$1m in MRR, generate 36.1% of MRR added from expansion activities. This is the classic “land and expand” strategy that many SaaS businesses employ. The third component of MRR added is reactivation. This component remains roughly stable throughout business growth, contributing to 9-13% of MRR added. MRR Lost Benchmarks Now, let’s move on to MRR lost. As a reminder, MRR lost can be grouped into two components: i) Churn and ii) Contraction. The chart below shows Churn MRR as a percentage of total MRR lost. Churn makes up for the bulk of the MRR lost — roughly 70-80%. Here too, as the business grows, contraction MRR as a percentage of MRR lost increases in proportion. Although, it does eventually stabilize around that 30% range. Benchmarking MRR Movements by ARPA Bands In the section above, we looked at MRR movements by the MRR band. In this section, we look at MRR movements by bands of average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account, i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA in ChartMogul. Why look at MRR movements by ARPA band? Well, everything is sort of the same at a given ARPA value. The way you sell, the way you service, and the way you retain all depend on your ARPA. MRR Added Benchmarks by ARPA Bands The chart below shows new business MRR as a percentage of MRR added across bands of ARPA per month. As you’ll notice, here too, new business MRR makes up the largest share of MRR added. Although, at higher ARPA, this proportion does get smaller. This is because, at a higher ARPA, expansion starts to contribute more to the MRR added. For example, companies with ARPA per month of >$500 or annual contracts over $6k get 43.7% of their revenue through expansion. For companies with an ARPA of less than $10, it’s only 7.9%. The reactivation proportion of MRR also depends on your ARPA. At a higher ARPA, your reactivation MRR decreases. One reason for this could be that at a higher ARPA, fewer customers take the knee-jerk reaction of churning. And because of that informed decision, fewer come back. MRR Lost Benchmarks by ARPA Bands As for MRR lost, Churn is the largest contributor. Although, for startups with ARPA >$500, churn contributes to only a little more than half of the revenue lost. The rest is contraction MRR. If your business is in a higher ARPA band, retaining existing customers and making sure they are using your product becomes of key importance. Calculation Methodology. We used anonymized and aggregated data from ChartMogul’s platform to carry out this analysis. We categorized companies into MRR & ARPA bands and then calculated aggregates over 3 months (Dec ‘21, Jan ‘22 & Feb ‘22). Three Questions You Should Ask Yourself Now that you understand the basics of MRR movements, there are three questions that you should ask yourself: Do you understand the dynamics of MRR movements for your particular business? For example, do you know how much of your MRR added comes from new business vs expansion or reactivation? Do you have an expansion loop built-in within your product? As businesses grow, one of the key drivers for their growth is expansion revenue. Does your pricing strategy take this into account? Do you have a strategy in place to contain contraction? Contraction can be as high as 45% of all MRR lost at higher ARPA’s. Having a strategy in place to contain that could help you grow faster. As is wisely said, MRR Saved = MRR Gained :)

<sys> [INST] Understanding and Benchmarking Your MRR Movements [/INST] Tring Tring. You just received a notification from ChartMogul. A new customer signed up. Oh yes! Your monthly recurring revenue (MRR) just shot up. Tring Tring. Another notification. A customer just canceled. Oh no! Your MRR went down. Tring Tring. A customer just upgraded their plan from basic to premium. Yes! MRR goes up again. You get the point. Your monthly recurring revenue (MRR) moves every day. It’s because of all the underlying dynamics of customers joining, upgrading, canceling, or downgrading. Understanding and being on top of all these MRR movements can sometimes get confusing. To simplify this a bit, you can think that your MRR movements only have two components: MRR Added — i.e. the revenue that your business added in a particular period MRR Lost — i.e. the revenue that your business lost Below is a screenshot of the MRR movements chart in ChartMogul. The blue bars show the MRR added while the pink ones show the MRR lost. If your goal is to grow your business, you need to add more MRR than you lose. So the blue bars need to add up to more than the pink ones. Understanding MRR Movements Let’s dive deeper into how your SaaS business adds or loses MRR. And how those changes are categorized in SaaS as MRR movements. You can add MRR to your business by: Attracting new customers — in SaaS jargon, this is called a New Business MRR When existing customers pay more — this is called Expansion MRR Re-attracting ex-customers — Reactivation MRR And, you can lose MRR when your: Customers cancel — Churn MRR Existing customers start paying less — Contraction MRR So that’s how you lose or add MRR to your business. Now that you have a basic understanding of MRR movements, let’s look at these metrics for an average startup. Benchmarking MRR Movements by MRR Bands MRR Added Benchmarks As we discussed above, MRR added is made up of three components: i) New Business, ii) Expansion & iii) Reactivation We analyzed, aggregated and anonymized data from ChartMogul to find out how MRR movements split up across these three sub-components. The chart below shows new business MRR as a percentage of MRR added. As you would expect, new business makes up the largest component of MRR added for most businesses. Specifically, for startups with MRR <$10k, new business MRR makes up for 77.7% of their MRR added. As businesses grow, the proportion of revenue generated from new business decreases. It goes down to almost half (50.7%) for startups with MRR >$1m. This is because as SaaS businesses grow, they focus their energy on increasing revenue from their existing customers. Hence, the proportion of expansion revenue as a percentage of total MRR added increases. As you’ll notice in the chart below, startups with >$1m in MRR, generate 36.1% of MRR added from expansion activities. This is the classic “land and expand” strategy that many SaaS businesses employ. The third component of MRR added is reactivation. This component remains roughly stable throughout business growth, contributing to 9-13% of MRR added. MRR Lost Benchmarks Now, let’s move on to MRR lost. As a reminder, MRR lost can be grouped into two components: i) Churn and ii) Contraction. The chart below shows Churn MRR as a percentage of total MRR lost. Churn makes up for the bulk of the MRR lost — roughly 70-80%. Here too, as the business grows, contraction MRR as a percentage of MRR lost increases in proportion. Although, it does eventually stabilize around that 30% range. Benchmarking MRR Movements by ARPA Bands In the section above, we looked at MRR movements by the MRR band. In this section, we look at MRR movements by bands of average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account, i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA in ChartMogul. Why look at MRR movements by ARPA band? Well, everything is sort of the same at a given ARPA value. The way you sell, the way you service, and the way you retain all depend on your ARPA. MRR Added Benchmarks by ARPA Bands The chart below shows new business MRR as a percentage of MRR added across bands of ARPA per month. As you’ll notice, here too, new business MRR makes up the largest share of MRR added. Although, at higher ARPA, this proportion does get smaller. This is because, at a higher ARPA, expansion starts to contribute more to the MRR added. For example, companies with ARPA per month of >$500 or annual contracts over $6k get 43.7% of their revenue through expansion. For companies with an ARPA of less than $10, it’s only 7.9%. The reactivation proportion of MRR also depends on your ARPA. At a higher ARPA, your reactivation MRR decreases. One reason for this could be that at a higher ARPA, fewer customers take the knee-jerk reaction of churning. And because of that informed decision, fewer come back. MRR Lost Benchmarks by ARPA Bands As for MRR lost, Churn is the largest contributor. Although, for startups with ARPA >$500, churn contributes to only a little more than half of the revenue lost. The rest is contraction MRR. If your business is in a higher ARPA band, retaining existing customers and making sure they are using your product becomes of key importance. Calculation Methodology. We used anonymized and aggregated data from ChartMogul’s platform to carry out this analysis. We categorized companies into MRR & ARPA bands and then calculated aggregates over 3 months (Dec ‘21, Jan ‘22 & Feb ‘22). Three Questions You Should Ask Yourself Now that you understand the basics of MRR movements, there are three questions that you should ask yourself: Do you understand the dynamics of MRR movements for your particular business? For example, do you know how much of your MRR added comes from new business vs expansion or reactivation? Do you have an expansion loop built-in within your product? As businesses grow, one of the key drivers for their growth is expansion revenue. Does your pricing strategy take this into account? Do you have a strategy in place to contain contraction? Contraction can be as high as 45% of all MRR lost at higher ARPA’s. Having a strategy in place to contain that could help you grow faster. As is wisely said, MRR Saved = MRR Gained :) </sys

Going global from day one with Unbabel CEO Vasco Pedro. One of the biggest barriers to SaaS businesses going truly global from day one is localization. That is, the process of adapting your product to meet the language and cultural requirements of a specific target market. Vasco Pedro is co-founder and CEO of Unbabel, which removes language barriers between companies and their customers by blending artificial intelligence with a global network of translators to provide real-time, human-quality translations at scale. Originally from Lisbon, Portugal, he has a PhD in Language Technologies from, and was a Invited Researcher and Research Assistant at, Carnegie Mellon University in Pittsburgh. A serial entrepreneur, since 2013 he has led Unbabel, taking it through Y Combinator and raising a total of $8 million in funding. This discussion with Vasco is a must-listen for anyone approaching new markets or thinking about localization of their product. There are hidden challenges here and common misconceptions that completely change the game. Did you know for example that English is a shrinking language online? The need to localize software is higher than ever, and it was great to hear how Vasco’s team are tackling this with a hybrid AI and human-based approach. “If you look at the amount of content online, it used to be about 80% English around 1998. And now, English represents about 20% of online content and it’s expected to bottom out at about 10%.” “We’re now about 3.5 billion people online. We’re expected to hit 4.5-5 billion in the next 3-4 years. Most of the people coming online right now are from developing countries — the next 400 million people in India to go online won’t speak English.” 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] Going global from day one with Unbabel CEO Vasco Pedro [/INST]

One of the biggest barriers to SaaS businesses going truly global from day one is localization. That is, the process of adapting your product to meet the language and cultural requirements of a specific target market. Vasco Pedro is co-founder and CEO of Unbabel, which removes language barriers between companies and their customers by blending artificial intelligence with a global network of translators to provide real-time, human-quality translations at scale. Originally from Lisbon, Portugal, he has a PhD in Language Technologies from, and was a Invited Researcher and Research Assistant at, Carnegie Mellon University in Pittsburgh. A serial entrepreneur, since 2013 he has led Unbabel, taking it through Y Combinator and raising a total of $8 million in funding. This discussion with Vasco is a must-listen for anyone approaching new markets or thinking about localization of their product. There are hidden challenges here and common misconceptions that completely change the game. Did you know for example that English is a shrinking language online? The need to localize software is higher than ever, and it was great to hear how Vasco’s team are tackling this with a hybrid AI and human-based approach. “If you look at the amount of content online, it used to be about 80% English around 1998. And now, English represents about 20% of online content and it’s expected to bottom out at about 10%.” “We’re now about 3.5 billion people online. We’re expected to hit 4.5-5 billion in the next 3-4 years. Most of the people coming online right now are from developing countries — the next 400 million people in India to go online won’t speak English.” 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] Going global from day one with Unbabel CEO Vasco Pedro [/INST] One of the biggest barriers to SaaS businesses going truly global from day one is localization. That is, the process of adapting your product to meet the language and cultural requirements of a specific target market. Vasco Pedro is co-founder and CEO of Unbabel, which removes language barriers between companies and their customers by blending artificial intelligence with a global network of translators to provide real-time, human-quality translations at scale. Originally from Lisbon, Portugal, he has a PhD in Language Technologies from, and was a Invited Researcher and Research Assistant at, Carnegie Mellon University in Pittsburgh. A serial entrepreneur, since 2013 he has led Unbabel, taking it through Y Combinator and raising a total of $8 million in funding. This discussion with Vasco is a must-listen for anyone approaching new markets or thinking about localization of their product. There are hidden challenges here and common misconceptions that completely change the game. Did you know for example that English is a shrinking language online? The need to localize software is higher than ever, and it was great to hear how Vasco’s team are tackling this with a hybrid AI and human-based approach. “If you look at the amount of content online, it used to be about 80% English around 1998. And now, English represents about 20% of online content and it’s expected to bottom out at about 10%.” “We’re now about 3.5 billion people online. We’re expected to hit 4.5-5 billion in the next 3-4 years. Most of the people coming online right now are from developing countries — the next 400 million people in India to go online won’t speak English.” 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

ChartMogul Zendesk App. The app gives you a quick overview of your customer’s subscription billing history whilst viewing a support ticket in Zendesk – helping agents to make smarter decisions about each customer they interact with. View the following customer information at a glance: Monthly Recurring Revenue (MRR) Annual Run Rate (ARR) Active and cancelled subscriptions Recent account activity, e.g. upgrades, downgrades, etc. There are also convenient links to both the ChartMogul customer profile and the profile of the customer in your billing system (e.g. Stripe, Braintree, Recurly or Chargify). It will be useful for ChartMogul customers who also use Zendesk, as well as serving as a nice showcase for the types of integrations that are now possible with the Metrics API. Screenshot: Browse customer subscription records without leaving Zendesk. To install just login to your Zendesk account and go to Admin > Apps Marketplace > search for ‘ChartMogul’ and open the app > follow the instructions complete the installation.

[INST] ChartMogul Zendesk App [/INST]

The app gives you a quick overview of your customer’s subscription billing history whilst viewing a support ticket in Zendesk – helping agents to make smarter decisions about each customer they interact with. View the following customer information at a glance: Monthly Recurring Revenue (MRR) Annual Run Rate (ARR) Active and cancelled subscriptions Recent account activity, e.g. upgrades, downgrades, etc. There are also convenient links to both the ChartMogul customer profile and the profile of the customer in your billing system (e.g. Stripe, Braintree, Recurly or Chargify). It will be useful for ChartMogul customers who also use Zendesk, as well as serving as a nice showcase for the types of integrations that are now possible with the Metrics API. Screenshot: Browse customer subscription records without leaving Zendesk. To install just login to your Zendesk account and go to Admin > Apps Marketplace > search for ‘ChartMogul’ and open the app > follow the instructions complete the installation.

<sys> [INST] ChartMogul Zendesk App [/INST] The app gives you a quick overview of your customer’s subscription billing history whilst viewing a support ticket in Zendesk – helping agents to make smarter decisions about each customer they interact with. View the following customer information at a glance: Monthly Recurring Revenue (MRR) Annual Run Rate (ARR) Active and cancelled subscriptions Recent account activity, e.g. upgrades, downgrades, etc. There are also convenient links to both the ChartMogul customer profile and the profile of the customer in your billing system (e.g. Stripe, Braintree, Recurly or Chargify). It will be useful for ChartMogul customers who also use Zendesk, as well as serving as a nice showcase for the types of integrations that are now possible with the Metrics API. Screenshot: Browse customer subscription records without leaving Zendesk. To install just login to your Zendesk account and go to Admin > Apps Marketplace > search for ‘ChartMogul’ and open the app > follow the instructions complete the installation. </sys

SaaS Q&A: What are the pros & cons of API-based SaaS?. API-based features or products can have a huge impact on the dynamics of a SaaS startup. In recent years we’ve noticed a trend towards dedicated API-first SaaS products, which are often broken out as ‘micro-services’ from larger SaaS solutions. And other companies, like us here at ChartMogul, are rolling out an API offering as the business develops. Given this trend, it’s useful to consider the implications on the rest of a SaaS company’s operations. Read more about this industry trend in our recent guide, The Rise of the API-based SaaS. Here are some benefits of an API-based SaaS product: Little to no design, UX consideration required. There is no user interface, and therefore you aren’t doing any visual design. Speed and style of scale. You can scale more quickly to a large volume of customers, and also have more control over how the service is scaled. Value to customers. There’s inherently more focus on the true value you’re delivering to customers, because the value is usually in the raw data you’re providing. And some drawbacks to keep in mind: Sales cycles are generally much longer. Committing to purchasing an API-based solution can be seen as greater risk for the customer, due to the initial barrier to integration. Onboarding. It can be more difficult to provide a great onboarding experience when engineering and development time are required to start using the product: Less flexibility in pricing. You’ll have less options for pricing your solution. Pricing for API-based solutions is usually volume-based (depending on the number of requests you make to the API). This answer was originally published on Quora. View the original thread here: How does an API play into the growth of an enterprise SaaS startup? Share and follow! NEW on @ChartMogul: SaaS Q&A: What are the pros & cons of API-based #SaaS? https://t.co/9TGJnxGuB1 #API pic.twitter.com/4aL1ngh5cj — ChartMogul (@ChartMogul) April 7, 2016

[INST] SaaS Q&A: What are the pros & cons of API-based SaaS? [/INST]

API-based features or products can have a huge impact on the dynamics of a SaaS startup. In recent years we’ve noticed a trend towards dedicated API-first SaaS products, which are often broken out as ‘micro-services’ from larger SaaS solutions. And other companies, like us here at ChartMogul, are rolling out an API offering as the business develops. Given this trend, it’s useful to consider the implications on the rest of a SaaS company’s operations. Read more about this industry trend in our recent guide, The Rise of the API-based SaaS. Here are some benefits of an API-based SaaS product: Little to no design, UX consideration required. There is no user interface, and therefore you aren’t doing any visual design. Speed and style of scale. You can scale more quickly to a large volume of customers, and also have more control over how the service is scaled. Value to customers. There’s inherently more focus on the true value you’re delivering to customers, because the value is usually in the raw data you’re providing. And some drawbacks to keep in mind: Sales cycles are generally much longer. Committing to purchasing an API-based solution can be seen as greater risk for the customer, due to the initial barrier to integration. Onboarding. It can be more difficult to provide a great onboarding experience when engineering and development time are required to start using the product: Less flexibility in pricing. You’ll have less options for pricing your solution. Pricing for API-based solutions is usually volume-based (depending on the number of requests you make to the API). This answer was originally published on Quora. View the original thread here: How does an API play into the growth of an enterprise SaaS startup? Share and follow! NEW on @ChartMogul: SaaS Q&A: What are the pros & cons of API-based #SaaS? https://t.co/9TGJnxGuB1 #API pic.twitter.com/4aL1ngh5cj — ChartMogul (@ChartMogul) April 7, 2016

<sys> [INST] SaaS Q&A: What are the pros & cons of API-based SaaS? [/INST] API-based features or products can have a huge impact on the dynamics of a SaaS startup. In recent years we’ve noticed a trend towards dedicated API-first SaaS products, which are often broken out as ‘micro-services’ from larger SaaS solutions. And other companies, like us here at ChartMogul, are rolling out an API offering as the business develops. Given this trend, it’s useful to consider the implications on the rest of a SaaS company’s operations. Read more about this industry trend in our recent guide, The Rise of the API-based SaaS. Here are some benefits of an API-based SaaS product: Little to no design, UX consideration required. There is no user interface, and therefore you aren’t doing any visual design. Speed and style of scale. You can scale more quickly to a large volume of customers, and also have more control over how the service is scaled. Value to customers. There’s inherently more focus on the true value you’re delivering to customers, because the value is usually in the raw data you’re providing. And some drawbacks to keep in mind: Sales cycles are generally much longer. Committing to purchasing an API-based solution can be seen as greater risk for the customer, due to the initial barrier to integration. Onboarding. It can be more difficult to provide a great onboarding experience when engineering and development time are required to start using the product: Less flexibility in pricing. You’ll have less options for pricing your solution. Pricing for API-based solutions is usually volume-based (depending on the number of requests you make to the API). This answer was originally published on Quora. View the original thread here: How does an API play into the growth of an enterprise SaaS startup? Share and follow! NEW on @ChartMogul: SaaS Q&A: What are the pros & cons of API-based #SaaS? https://t.co/9TGJnxGuB1 #API pic.twitter.com/4aL1ngh5cj — ChartMogul (@ChartMogul) April 7, 2016 </sys

SaaS Metrics Refresher #8: Data Literacy. Just like people don’t need an advanced English degree to be literate, your employees don’t need advanced statistical knowledge and programming skills in Python or R to be data literate. Reading and writing skill levels are often defined by what people can or can’t accomplish in their everyday life—we must do the same for data literacy. Brent Dykes, Forbes Definition: what is data literacy? Simply put, data literacy is the ability to read, understand, create and communicate data as information. Just in the same way that literacy denotes our ability to work with and derive information from the written word, data literacy is all about our ability to work effectively with data. Margaret Rouse of whatis.com breaks this down into several key skills: Knowing what data is appropriate to use for a particular purpose. Interpreting data visualizations, such as graphs and charts. Thinking critically about information yielded by data analysis. Understanding data analytics tools and methods and when and where to use them. Recognizing when data is being misrepresented or used misleadingly. Communicating information about data to people lacking data literacy, an ability sometimes referred to as data storytelling. Key data literacy terms Qualitative data is descriptive – it describes something, e.g. Reason for customer cancellation. Quantitative data is always numerical (involves numbers), e.g. Revenue lost from customer cancellations. Discrete data can only take certain values (like whole numbers), e.g. Number of customers churned. Continuous data can take any value, within a given range, e.g. Customer churn rate. Categorical data can be sorted, according to defined groups or categories, e.g. Industry vertical. Statistical significance is when the observed outcome of an experiment is unlikely to have occurred due to chance. This is an important factor when running multi-variant (A/B) tests on your product or website. How to question data From The Ultimate Data Literacy Cheat Sheet: Why is data literacy important today? As I explained in my post the data literacy shortfall: For years, modern businesses have used data and metrics in almost every decision they make. If you want to argue for more budget for your project, you’d better have some data to back up your reasoning. But more recently, the use of data shifted. Technology companies started to implement Machine Learning and AI algorithms in tech products, to find highly optimized solutions to big problems humans weren’t so good at. Machine Learning algorithms are incredibly hungry for data — they require training on huge data sets to be effective, and there’s really no limit to what they can consume. The more data, the better. At this limitless scale, and with this technology, you can see why people are hailing data as the “new currency”. For professionals, there’s no escaping the numbers and statistics present in our working day, regardless of your role — Marketers, Salespeople, Engineers, etc. — these people all use data to make decisions and do their everyday work. So we are all surrounded by data. But are we equipped with the skills and knowledge required to make sense of it? Do the people using such data for storytelling have adequate skills for effectively communicating and visualizing data for their audience? One could argue that these are all critical skills in business today. “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes Steps you can take to improve data literacy in your company 1. Start treating data literacy as a core work competency Core competencies need deliberate training and embedding within a company. They also need to be highlighted in job specifications, probed in job interviews and included in employee objectives. Adoption of data literacy within your business will not happen without a deliberate approach. 2. Empower employees with the right tools Fortunately, there’s a never been a better time for supporting data literacy with accessible, affordable tools. Check out The data literacy shortfall where I mention some recommendations. 3. Democratize your company’s data and insights A company with democratized data is a company where anyone can discover insights that help them make decisions — but getting to this point involves more than just software tools. Map out your “road to data democratization” and figure out how to put valuable data at the fingertips of your entire team. Resources and Further Reading DOWNLOADABLES The Ultimate Data Literacy Cheat Sheet [PDF] (ChartMogul) BASICS The data literacy shortfall: Are we data-driven, or data-duped? (ChartMogul) Data literacy : A critical  skill for the 21st century (Tableau) Data Literacy — What It Is And Why None of Us Have It (Forbes) DEEP CUTS Data Literacy Report [PDF] (Qlik)

[INST] SaaS Metrics Refresher #8: Data Literacy [/INST]

Just like people don’t need an advanced English degree to be literate, your employees don’t need advanced statistical knowledge and programming skills in Python or R to be data literate. Reading and writing skill levels are often defined by what people can or can’t accomplish in their everyday life—we must do the same for data literacy. Brent Dykes, Forbes Definition: what is data literacy? Simply put, data literacy is the ability to read, understand, create and communicate data as information. Just in the same way that literacy denotes our ability to work with and derive information from the written word, data literacy is all about our ability to work effectively with data. Margaret Rouse of whatis.com breaks this down into several key skills: Knowing what data is appropriate to use for a particular purpose. Interpreting data visualizations, such as graphs and charts. Thinking critically about information yielded by data analysis. Understanding data analytics tools and methods and when and where to use them. Recognizing when data is being misrepresented or used misleadingly. Communicating information about data to people lacking data literacy, an ability sometimes referred to as data storytelling. Key data literacy terms Qualitative data is descriptive – it describes something, e.g. Reason for customer cancellation. Quantitative data is always numerical (involves numbers), e.g. Revenue lost from customer cancellations. Discrete data can only take certain values (like whole numbers), e.g. Number of customers churned. Continuous data can take any value, within a given range, e.g. Customer churn rate. Categorical data can be sorted, according to defined groups or categories, e.g. Industry vertical. Statistical significance is when the observed outcome of an experiment is unlikely to have occurred due to chance. This is an important factor when running multi-variant (A/B) tests on your product or website. How to question data From The Ultimate Data Literacy Cheat Sheet: Why is data literacy important today? As I explained in my post the data literacy shortfall: For years, modern businesses have used data and metrics in almost every decision they make. If you want to argue for more budget for your project, you’d better have some data to back up your reasoning. But more recently, the use of data shifted. Technology companies started to implement Machine Learning and AI algorithms in tech products, to find highly optimized solutions to big problems humans weren’t so good at. Machine Learning algorithms are incredibly hungry for data — they require training on huge data sets to be effective, and there’s really no limit to what they can consume. The more data, the better. At this limitless scale, and with this technology, you can see why people are hailing data as the “new currency”. For professionals, there’s no escaping the numbers and statistics present in our working day, regardless of your role — Marketers, Salespeople, Engineers, etc. — these people all use data to make decisions and do their everyday work. So we are all surrounded by data. But are we equipped with the skills and knowledge required to make sense of it? Do the people using such data for storytelling have adequate skills for effectively communicating and visualizing data for their audience? One could argue that these are all critical skills in business today. “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes Steps you can take to improve data literacy in your company 1. Start treating data literacy as a core work competency Core competencies need deliberate training and embedding within a company. They also need to be highlighted in job specifications, probed in job interviews and included in employee objectives. Adoption of data literacy within your business will not happen without a deliberate approach. 2. Empower employees with the right tools Fortunately, there’s a never been a better time for supporting data literacy with accessible, affordable tools. Check out The data literacy shortfall where I mention some recommendations. 3. Democratize your company’s data and insights A company with democratized data is a company where anyone can discover insights that help them make decisions — but getting to this point involves more than just software tools. Map out your “road to data democratization” and figure out how to put valuable data at the fingertips of your entire team. Resources and Further Reading DOWNLOADABLES The Ultimate Data Literacy Cheat Sheet [PDF] (ChartMogul) BASICS The data literacy shortfall: Are we data-driven, or data-duped? (ChartMogul) Data literacy : A critical  skill for the 21st century (Tableau) Data Literacy — What It Is And Why None of Us Have It (Forbes) DEEP CUTS Data Literacy Report [PDF] (Qlik)

<sys> [INST] SaaS Metrics Refresher #8: Data Literacy [/INST] Just like people don’t need an advanced English degree to be literate, your employees don’t need advanced statistical knowledge and programming skills in Python or R to be data literate. Reading and writing skill levels are often defined by what people can or can’t accomplish in their everyday life—we must do the same for data literacy. Brent Dykes, Forbes Definition: what is data literacy? Simply put, data literacy is the ability to read, understand, create and communicate data as information. Just in the same way that literacy denotes our ability to work with and derive information from the written word, data literacy is all about our ability to work effectively with data. Margaret Rouse of whatis.com breaks this down into several key skills: Knowing what data is appropriate to use for a particular purpose. Interpreting data visualizations, such as graphs and charts. Thinking critically about information yielded by data analysis. Understanding data analytics tools and methods and when and where to use them. Recognizing when data is being misrepresented or used misleadingly. Communicating information about data to people lacking data literacy, an ability sometimes referred to as data storytelling. Key data literacy terms Qualitative data is descriptive – it describes something, e.g. Reason for customer cancellation. Quantitative data is always numerical (involves numbers), e.g. Revenue lost from customer cancellations. Discrete data can only take certain values (like whole numbers), e.g. Number of customers churned. Continuous data can take any value, within a given range, e.g. Customer churn rate. Categorical data can be sorted, according to defined groups or categories, e.g. Industry vertical. Statistical significance is when the observed outcome of an experiment is unlikely to have occurred due to chance. This is an important factor when running multi-variant (A/B) tests on your product or website. How to question data From The Ultimate Data Literacy Cheat Sheet: Why is data literacy important today? As I explained in my post the data literacy shortfall: For years, modern businesses have used data and metrics in almost every decision they make. If you want to argue for more budget for your project, you’d better have some data to back up your reasoning. But more recently, the use of data shifted. Technology companies started to implement Machine Learning and AI algorithms in tech products, to find highly optimized solutions to big problems humans weren’t so good at. Machine Learning algorithms are incredibly hungry for data — they require training on huge data sets to be effective, and there’s really no limit to what they can consume. The more data, the better. At this limitless scale, and with this technology, you can see why people are hailing data as the “new currency”. For professionals, there’s no escaping the numbers and statistics present in our working day, regardless of your role — Marketers, Salespeople, Engineers, etc. — these people all use data to make decisions and do their everyday work. So we are all surrounded by data. But are we equipped with the skills and knowledge required to make sense of it? Do the people using such data for storytelling have adequate skills for effectively communicating and visualizing data for their audience? One could argue that these are all critical skills in business today. “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes Steps you can take to improve data literacy in your company 1. Start treating data literacy as a core work competency Core competencies need deliberate training and embedding within a company. They also need to be highlighted in job specifications, probed in job interviews and included in employee objectives. Adoption of data literacy within your business will not happen without a deliberate approach. 2. Empower employees with the right tools Fortunately, there’s a never been a better time for supporting data literacy with accessible, affordable tools. Check out The data literacy shortfall where I mention some recommendations. 3. Democratize your company’s data and insights A company with democratized data is a company where anyone can discover insights that help them make decisions — but getting to this point involves more than just software tools. Map out your “road to data democratization” and figure out how to put valuable data at the fingertips of your entire team. Resources and Further Reading DOWNLOADABLES The Ultimate Data Literacy Cheat Sheet [PDF] (ChartMogul) BASICS The data literacy shortfall: Are we data-driven, or data-duped? (ChartMogul) Data literacy : A critical  skill for the 21st century (Tableau) Data Literacy — What It Is And Why None of Us Have It (Forbes) DEEP CUTS Data Literacy Report [PDF] (Qlik) </sys

Increasing NDR to Build a Compelling Enterprise SaaS Play. Recent ecommerce growth has (re)introduced many SaaS founders and investors to the major differences associated with running a business that offers physical products. On this week’s podcast, I talk with ecommerce expert and Co-founder of Assembly, Adam Crawshaw, about the strategies they and SaaS companies can use to build net dollar retention (NDR) and make Assembly an ecommerce powerhouse. About the episode Assembly is made up of three brands: Helium10, Refersion, and OrderMetrics. Interestingly, Assembly’s first business, Helium 10, started as a podcast (much like this one!). That podcast built a community, which helped Adam and his co-founder, Sandeep Kella, build a SaaS product. That product, Helium10, was built to help ecommerce brands optimize their Amazon performance. However, the challenge of running an ecommerce business extends far beyond Amazon. Adam, Sandeep, and team are committed to addressing those challenges by acquiring relevant software businesses and building out a true enterprise-ready platform. Now, the Assembly platform offers feature coverage and capabilities so that throughout their ecommerce journey, their customers have the right solutions at the right time at the right price. Adam uses an often overlooked SaaS metric, net dollar retention (NDR), to strategize. If you’re an enterprise SaaS business, you need ~100% net retention or something is wrong. Whereas with SMB SaaS businesses, you find different scenarios. Those scenarios can mean a lot of different things — maybe [something needs to change with] pricing, packaging, or product. Net dollar retention is a good signal to diagnose what’s going on with the business beyond what you can see with revenue growth. Adam Crawshaw, Assembly Strategies to drive NDR is a SaaS business What I love about this episode is Adam’s willingness to share his thinking and strategy about what it means to succeed as an enterprise solution. Additionally, Adam graciously shares details of the Assembly story and gives insight on the following: Strategies to diversify and promote your brand How consumer buying trends impact GMV, and how GMV impacts related-SaaS entrepreneurship His approach to analyze, research, and acquire SaaS businesses in the ecommerce space Why acquirers should prioritize relationships and customer alignment over SaaS metrics The importance of net dollar retention Strategies to improve net dollar retention Listen, subscribe, and share wherever you most enjoy podcasts.

[INST] Increasing NDR to Build a Compelling Enterprise SaaS Play [/INST]

Recent ecommerce growth has (re)introduced many SaaS founders and investors to the major differences associated with running a business that offers physical products. On this week’s podcast, I talk with ecommerce expert and Co-founder of Assembly, Adam Crawshaw, about the strategies they and SaaS companies can use to build net dollar retention (NDR) and make Assembly an ecommerce powerhouse. About the episode Assembly is made up of three brands: Helium10, Refersion, and OrderMetrics. Interestingly, Assembly’s first business, Helium 10, started as a podcast (much like this one!). That podcast built a community, which helped Adam and his co-founder, Sandeep Kella, build a SaaS product. That product, Helium10, was built to help ecommerce brands optimize their Amazon performance. However, the challenge of running an ecommerce business extends far beyond Amazon. Adam, Sandeep, and team are committed to addressing those challenges by acquiring relevant software businesses and building out a true enterprise-ready platform. Now, the Assembly platform offers feature coverage and capabilities so that throughout their ecommerce journey, their customers have the right solutions at the right time at the right price. Adam uses an often overlooked SaaS metric, net dollar retention (NDR), to strategize. If you’re an enterprise SaaS business, you need ~100% net retention or something is wrong. Whereas with SMB SaaS businesses, you find different scenarios. Those scenarios can mean a lot of different things — maybe [something needs to change with] pricing, packaging, or product. Net dollar retention is a good signal to diagnose what’s going on with the business beyond what you can see with revenue growth. Adam Crawshaw, Assembly Strategies to drive NDR is a SaaS business What I love about this episode is Adam’s willingness to share his thinking and strategy about what it means to succeed as an enterprise solution. Additionally, Adam graciously shares details of the Assembly story and gives insight on the following: Strategies to diversify and promote your brand How consumer buying trends impact GMV, and how GMV impacts related-SaaS entrepreneurship His approach to analyze, research, and acquire SaaS businesses in the ecommerce space Why acquirers should prioritize relationships and customer alignment over SaaS metrics The importance of net dollar retention Strategies to improve net dollar retention Listen, subscribe, and share wherever you most enjoy podcasts.

<sys> [INST] Increasing NDR to Build a Compelling Enterprise SaaS Play [/INST] Recent ecommerce growth has (re)introduced many SaaS founders and investors to the major differences associated with running a business that offers physical products. On this week’s podcast, I talk with ecommerce expert and Co-founder of Assembly, Adam Crawshaw, about the strategies they and SaaS companies can use to build net dollar retention (NDR) and make Assembly an ecommerce powerhouse. About the episode Assembly is made up of three brands: Helium10, Refersion, and OrderMetrics. Interestingly, Assembly’s first business, Helium 10, started as a podcast (much like this one!). That podcast built a community, which helped Adam and his co-founder, Sandeep Kella, build a SaaS product. That product, Helium10, was built to help ecommerce brands optimize their Amazon performance. However, the challenge of running an ecommerce business extends far beyond Amazon. Adam, Sandeep, and team are committed to addressing those challenges by acquiring relevant software businesses and building out a true enterprise-ready platform. Now, the Assembly platform offers feature coverage and capabilities so that throughout their ecommerce journey, their customers have the right solutions at the right time at the right price. Adam uses an often overlooked SaaS metric, net dollar retention (NDR), to strategize. If you’re an enterprise SaaS business, you need ~100% net retention or something is wrong. Whereas with SMB SaaS businesses, you find different scenarios. Those scenarios can mean a lot of different things — maybe [something needs to change with] pricing, packaging, or product. Net dollar retention is a good signal to diagnose what’s going on with the business beyond what you can see with revenue growth. Adam Crawshaw, Assembly Strategies to drive NDR is a SaaS business What I love about this episode is Adam’s willingness to share his thinking and strategy about what it means to succeed as an enterprise solution. Additionally, Adam graciously shares details of the Assembly story and gives insight on the following: Strategies to diversify and promote your brand How consumer buying trends impact GMV, and how GMV impacts related-SaaS entrepreneurship His approach to analyze, research, and acquire SaaS businesses in the ecommerce space Why acquirers should prioritize relationships and customer alignment over SaaS metrics The importance of net dollar retention Strategies to improve net dollar retention Listen, subscribe, and share wherever you most enjoy podcasts. </sys

ChartMogul vs. Baremetrics. Everything You Need to Know. TL;DR: What sets ChartMogul apart from Baremetrics If you’re evaluating Baremetrics versus ChartMogul there are a few things that you should consider. Power and flexibility. ChartMogul has more powerful analytics and segmentation functionality. You have access to more charts, more cohorts, and ultimately more information about your business from which to derive insights. With ChartMogul you can quickly build segments to apply across all of your charts, helping you discover which pricing plans are most profitable, which customer profiles are likely to convert, and who your great-fit customers really are. We also offer more direct integrations with billing systems, enrichment data sources, and export destinations. Control and transparency. ChartMogul offers data settings that give you full control over how your metrics are calculated. You can see how individual MRR movements track from your billing system to your metrics in ChartMogul, directly within our UI. Data editing tools make it possible to attain perfect accuracy from your billing data, and consequently, your subscription analytics. Pricing. ChartMogul is offering all of those features at a lower price. Since Baremetrics announced its most recent price hike, effective April 2022, ChartMogul has a more comprehensive feature set and it makes more financial sense. Grow your recurring revenue with ChartMogul Growing a subscription business is hard work. You have to track MRR, churn, LTV, cash flow, and more in order to focus your efforts and make the right decisions for your company. But to succeed in SaaS, you need to understand the trends driving those top level numbers – the micro metrics behind the macro. You need to understand not just what your churn rate is, but which groups of customers are churning, at what point in their lifecycle, and why. You need to understand which segments of your market are driving the most growth and which plans contribute most to your MRR. The list goes on. There’s a world of difference between the features of a subscription metrics tool, and the functionality that comprises a subscription analytics platform. Both can calculate MRR, churn, and ARPA – but only one can act as a hub of revenue data. One solution can ingest data from multiple sources to act as a single source of truth, while having the capability to enrich that data from any source, and send that data to your favorite SaaS tools or your data warehouse for further analysis. ChartMogul grows with your business, because the problems that you face at $10k MRR are not the problems you face at $83,334 MRR and beyond. Here’s how ChartMogul and Baremetrics face off feature-wise: Segmentation and analytics Compared side-by-side with Baremetrics, ChartMogul provides you with more charts, cohorts, and other features with which you can use to optimize your business and strategize for future growth. Easily check MRR movements – new business, upgrades, downgrades, churn, and reactivations – and see how they contribute to your overall MRR growth. Customer churn (or retention) cohorts allow you to see how subscriptions perform over time, relative to the starting month or the previous month. Heat maps aggregate your invoice data and overlay it on a world map so you can see your ARPA, churn rate, or LTV by region. You can also customize each chart and create beautiful visualizations. When you create a chart that you love you can save it for yourself, or add it to the dashboard for the whole team to view. ChartMogul provides you with an infinite number of ways to segment your customers – beyond what’s in your invoice data (though we offer many filters out of the box). With our Enrichment API (or Zapier) you can pipe information from your CRM, marketing attribution data, or data from any other source, and get the full picture of your business. Then you can use these custom attributes to determine which groups of customers have the highest ARPA, LTV, retention rates, and more. Any of the filters or segments you add will be applied across all of your charts – and you can add as many as you like. Compare all your segments at once or toggle between them individually. There’s also no need to recreate charts, you can easily save them for yourself or share them with your team. Every chart you see in ChartMogul is actionable – it’s possible to drill down to the customer level and see the data that underlies the metrics in your analyses. Not only is ChartMogul a powerful tool, it also provides you with a great user experience. Data import ChartMogul offers direct integrations to Stripe, Chargebee, Recurly, Google Play, App Store Connect and many more. It’s also possible to build something custom with our API, or you could work with our partner SaaSync, to design, build, and maintain your integrations. If you like you can add data manually or use our Google sheets app. We have extensive documentation and are happy to lend a hand if you need help getting set up Data auditing, editing, and advanced settings We know that no two subscription businesses are alike – all have different needs for reporting and, more specifically, how metrics are calculated. For this reason, we provide numerous data settings that give you full control over how churn is calculated, when churn is reported, how refunds are handled, and how free customers are handled. ChartMogul and Baremetrics have one data setting in common; auto-churning delinquent customers after a given time period. ChartMogul allows you to audit the data coming from your connected billing system. Our UI gives you full transparency into how every individual MRR movement was generated. Whenever you see some new business or an upgrade in your Stripe account, you can check out the ChartMogul data platform to see exactly how that MRR movement has mapped to our data model and rolls up into your metrics. See all transactions in our Data Platform Data output and integrations With ChartMogul, you can add multiple data sources, and even send your subscription data elsewhere. We offer direct integrations with Amazon S3, Azure Blob, Google Storage for cloud services. Customers often send their data to a data warehouse; in this sense ChartMogul can act as an emitter of clean and tidy revenue data for you to perform even more complex analyses. You can also connect ChartMogul to your favorite SaaS tools like Zendesk, Pitch, Geckoboard, and more. Baremetrics has a native integration with Slack. ChartMogul, by contrast, can connect to Slack via Zapier. Beyond analytics ChartMogul has dramatically improved the security of our APIs and provided increased flexibility for you and your team in the form of our new API access manager. Admins can create both read-write or read-only keys, and team members can create their own read-only keys. You can get an overview of the health of your business with our iOS and Android apps. You can see Monthly Recurring Revenue, Annual Run Rate, and your total number of subscribers. It’s not just for admins either, team members can also download the app, track progress, and share in the wins. So many of our customers are building their products and their audiences in public, so we also just added a way to download any chart and add a cool background for social sharing. https://twitter.com/agazdecki/status/1488884410841583616 Baremetrics offers an email dunning tool called Recover. B2B churn is on average around 5% according to recent data from Recurly. If you break down this 5% further, voluntary churn accounts for 4.21%. While passive churn due to outdated credit cards is clearly a problem (even more so if you’re B2C with a higher volume of customers), it’s not a bigger problem than customers actively choosing to suspend service with your company. ChartMogul’s strategic goal is to provide a holistic tool that’ll help you make data-informed decisions, discover your best fit customers, and grow your recurring revenue in a sustainable way – rather than charging for extras that’ll save you some customers who aren’t a fit and will probably keep churning anyway. To sum it all up Our customers love us because of the power and flexibility of our core product, the fast evolution of the data platform, and our dedicated (and growing) support, integrations, product, and engineering teams. Not to mention the ease of setup – if you’re thinking about switching to ChartMogul, we can easily import all your historical subscription data and get you set up in no time. But don’t take my word for it, check out what everyone’s been saying… We’re at the point where if you’re starting a SaaS business, you need a tool like ChartMogul from day 1. Buffer CEO Joel Gascoigne ChartMogul is absolutely worth the cost we’ve invested five times to ten times over. Instapage CEO Tyson Quick ChartMogul is a tool that helps you get a better understanding of the value you provide to customers. Whereby Director of Finance Ken Carlson 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. Livestorm CEO Gilles Bertaux

[INST] ChartMogul vs [/INST]

Core&Outline. Everything You Need to Know. TL;DR: What sets ChartMogul apart from Core&Outline If you’re evaluating Core&Outline versus ChartMogul there are a few things that you should consider. Power and flexibility. ChartMogul has more powerful analytics and segmentation functionality. You have access to more charts, more cohorts, and ultimately more information about your business from which to derive insights. With ChartMogul you can quickly build segments to apply across all of your charts, helping you discover which pricing plans are most profitable, which customer profiles are likely to convert, and who your great-fit customers really are. We also offer more direct integrations with billing systems, enrichment data sources, and export destinations. Control and transparency. ChartMogul offers data settings that give you full control over how your metrics are calculated. You can see how individual MRR movements track from your billing system to your metrics in ChartMogul, directly within our UI. Data editing tools make it possible to attain perfect accuracy from your billing data, and consequently, your subscription analytics. Pricing. ChartMogul is offering all of those features at a lower price. Since Core&Outline announced its most recent price hike, effective April 2022, ChartMogul has a more comprehensive feature set and it makes more financial sense. Grow your recurring revenue with ChartMogul Growing a subscription business is hard work. You have to track MRR, churn, LTV, cash flow, and more in order to focus your efforts and make the right decisions for your company. But to succeed in SaaS, you need to understand the trends driving those top level numbers – the micro metrics behind the macro. You need to understand not just what your churn rate is, but which groups of customers are churning, at what point in their lifecycle, and why. You need to understand which segments of your market are driving the most growth and which plans contribute most to your MRR. The list goes on. There’s a world of difference between the features of a subscription metrics tool, and the functionality that comprises a subscription analytics platform. Both can calculate MRR, churn, and ARPA – but only one can act as a hub of revenue data. One solution can ingest data from multiple sources to act as a single source of truth, while having the capability to enrich that data from any source, and send that data to your favorite SaaS tools or your data warehouse for further analysis. ChartMogul grows with your business, because the problems that you face at $10k MRR are not the problems you face at $83,334 MRR and beyond. Here’s how ChartMogul and Core&Outline face off feature-wise: Segmentation and analytics Compared side-by-side with Core&Outline, ChartMogul provides you with more charts, cohorts, and other features with which you can use to optimize your business and strategize for future growth. Easily check MRR movements – new business, upgrades, downgrades, churn, and reactivations – and see how they contribute to your overall MRR growth. Customer churn (or retention) cohorts allow you to see how subscriptions perform over time, relative to the starting month or the previous month. Heat maps aggregate your invoice data and overlay it on a world map so you can see your ARPA, churn rate, or LTV by region. You can also customize each chart and create beautiful visualizations. When you create a chart that you love you can save it for yourself, or add it to the dashboard for the whole team to view. ChartMogul provides you with an infinite number of ways to segment your customers – beyond what’s in your invoice data (though we offer many filters out of the box). With our Enrichment API (or Zapier) you can pipe information from your CRM, marketing attribution data, or data from any other source, and get the full picture of your business. Then you can use these custom attributes to determine which groups of customers have the highest ARPA, LTV, retention rates, and more. Any of the filters or segments you add will be applied across all of your charts – and you can add as many as you like. Compare all your segments at once or toggle between them individually. There’s also no need to recreate charts, you can easily save them for yourself or share them with your team. Every chart you see in ChartMogul is actionable – it’s possible to drill down to the customer level and see the data that underlies the metrics in your analyses. Not only is ChartMogul a powerful tool, it also provides you with a great user experience. Data import ChartMogul offers direct integrations to Stripe, Chargebee, Recurly, Google Play, App Store Connect and many more. It’s also possible to build something custom with our API, or you could work with our partner SaaSync, to design, build, and maintain your integrations. If you like you can add data manually or use our Google sheets app. We have extensive documentation and are happy to lend a hand if you need help getting set up Data auditing, editing, and advanced settings We know that no two subscription businesses are alike – all have different needs for reporting and, more specifically, how metrics are calculated. For this reason, we provide numerous data settings that give you full control over how churn is calculated, when churn is reported, how refunds are handled, and how free customers are handled. ChartMogul and Core&Outline have one data setting in common; auto-churning delinquent customers after a given time period. ChartMogul allows you to audit the data coming from your connected billing system. Our UI gives you full transparency into how every individual MRR movement was generated. Whenever you see some new business or an upgrade in your Stripe account, you can check out the ChartMogul data platform to see exactly how that MRR movement has mapped to our data model and rolls up into your metrics. See all transactions in our Data Platform Data output and integrations With ChartMogul, you can add multiple data sources, and even send your subscription data elsewhere. We offer direct integrations with Amazon S3, Azure Blob, Google Storage for cloud services. Customers often send their data to a data warehouse; in this sense ChartMogul can act as an emitter of clean and tidy revenue data for you to perform even more complex analyses. You can also connect ChartMogul to your favorite SaaS tools like Zendesk, Pitch, Geckoboard, and more. Core&Outline has a native integration with Slack. ChartMogul, by contrast, can connect to Slack via Zapier. Beyond analytics ChartMogul has dramatically improved the security of our APIs and provided increased flexibility for you and your team in the form of our new API access manager. Admins can create both read-write or read-only keys, and team members can create their own read-only keys. You can get an overview of the health of your business with our iOS and Android apps. You can see Monthly Recurring Revenue, Annual Run Rate, and your total number of subscribers. It’s not just for admins either, team members can also download the app, track progress, and share in the wins. So many of our customers are building their products and their audiences in public, so we also just added a way to download any chart and add a cool background for social sharing. https://twitter.com/agazdecki/status/1488884410841583616 Core&Outline offers an email dunning tool called Recover. B2B churn is on average around 5% according to recent data from Recurly. If you break down this 5% further, voluntary churn accounts for 4.21%. While passive churn due to outdated credit cards is clearly a problem (even more so if you’re B2C with a higher volume of customers), it’s not a bigger problem than customers actively choosing to suspend service with your company. ChartMogul’s strategic goal is to provide a holistic tool that’ll help you make data-informed decisions, discover your best fit customers, and grow your recurring revenue in a sustainable way – rather than charging for extras that’ll save you some customers who aren’t a fit and will probably keep churning anyway. To sum it all up Our customers love us because of the power and flexibility of our core product, the fast evolution of the data platform, and our dedicated (and growing) support, integrations, product, and engineering teams. Not to mention the ease of setup – if you’re thinking about switching to ChartMogul, we can easily import all your historical subscription data and get you set up in no time. But don’t take my word for it, check out what everyone’s been saying… We’re at the point where if you’re starting a SaaS business, you need a tool like ChartMogul from day 1. Buffer CEO Joel Gascoigne ChartMogul is absolutely worth the cost we’ve invested five times to ten times over. Instapage CEO Tyson Quick ChartMogul is a tool that helps you get a better understanding of the value you provide to customers. Whereby Director of Finance Ken Carlson 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. Livestorm CEO Gilles Bertaux

<sys> [INST] ChartMogul vs [/INST] Core&Outline. Everything You Need to Know. TL;DR: What sets ChartMogul apart from Core&Outline If you’re evaluating Core&Outline versus ChartMogul there are a few things that you should consider. Power and flexibility. ChartMogul has more powerful analytics and segmentation functionality. You have access to more charts, more cohorts, and ultimately more information about your business from which to derive insights. With ChartMogul you can quickly build segments to apply across all of your charts, helping you discover which pricing plans are most profitable, which customer profiles are likely to convert, and who your great-fit customers really are. We also offer more direct integrations with billing systems, enrichment data sources, and export destinations. Control and transparency. ChartMogul offers data settings that give you full control over how your metrics are calculated. You can see how individual MRR movements track from your billing system to your metrics in ChartMogul, directly within our UI. Data editing tools make it possible to attain perfect accuracy from your billing data, and consequently, your subscription analytics. Pricing. ChartMogul is offering all of those features at a lower price. Since Core&Outline announced its most recent price hike, effective April 2022, ChartMogul has a more comprehensive feature set and it makes more financial sense. Grow your recurring revenue with ChartMogul Growing a subscription business is hard work. You have to track MRR, churn, LTV, cash flow, and more in order to focus your efforts and make the right decisions for your company. But to succeed in SaaS, you need to understand the trends driving those top level numbers – the micro metrics behind the macro. You need to understand not just what your churn rate is, but which groups of customers are churning, at what point in their lifecycle, and why. You need to understand which segments of your market are driving the most growth and which plans contribute most to your MRR. The list goes on. There’s a world of difference between the features of a subscription metrics tool, and the functionality that comprises a subscription analytics platform. Both can calculate MRR, churn, and ARPA – but only one can act as a hub of revenue data. One solution can ingest data from multiple sources to act as a single source of truth, while having the capability to enrich that data from any source, and send that data to your favorite SaaS tools or your data warehouse for further analysis. ChartMogul grows with your business, because the problems that you face at $10k MRR are not the problems you face at $83,334 MRR and beyond. Here’s how ChartMogul and Core&Outline face off feature-wise: Segmentation and analytics Compared side-by-side with Core&Outline, ChartMogul provides you with more charts, cohorts, and other features with which you can use to optimize your business and strategize for future growth. Easily check MRR movements – new business, upgrades, downgrades, churn, and reactivations – and see how they contribute to your overall MRR growth. Customer churn (or retention) cohorts allow you to see how subscriptions perform over time, relative to the starting month or the previous month. Heat maps aggregate your invoice data and overlay it on a world map so you can see your ARPA, churn rate, or LTV by region. You can also customize each chart and create beautiful visualizations. When you create a chart that you love you can save it for yourself, or add it to the dashboard for the whole team to view. ChartMogul provides you with an infinite number of ways to segment your customers – beyond what’s in your invoice data (though we offer many filters out of the box). With our Enrichment API (or Zapier) you can pipe information from your CRM, marketing attribution data, or data from any other source, and get the full picture of your business. Then you can use these custom attributes to determine which groups of customers have the highest ARPA, LTV, retention rates, and more. Any of the filters or segments you add will be applied across all of your charts – and you can add as many as you like. Compare all your segments at once or toggle between them individually. There’s also no need to recreate charts, you can easily save them for yourself or share them with your team. Every chart you see in ChartMogul is actionable – it’s possible to drill down to the customer level and see the data that underlies the metrics in your analyses. Not only is ChartMogul a powerful tool, it also provides you with a great user experience. Data import ChartMogul offers direct integrations to Stripe, Chargebee, Recurly, Google Play, App Store Connect and many more. It’s also possible to build something custom with our API, or you could work with our partner SaaSync, to design, build, and maintain your integrations. If you like you can add data manually or use our Google sheets app. We have extensive documentation and are happy to lend a hand if you need help getting set up Data auditing, editing, and advanced settings We know that no two subscription businesses are alike – all have different needs for reporting and, more specifically, how metrics are calculated. For this reason, we provide numerous data settings that give you full control over how churn is calculated, when churn is reported, how refunds are handled, and how free customers are handled. ChartMogul and Core&Outline have one data setting in common; auto-churning delinquent customers after a given time period. ChartMogul allows you to audit the data coming from your connected billing system. Our UI gives you full transparency into how every individual MRR movement was generated. Whenever you see some new business or an upgrade in your Stripe account, you can check out the ChartMogul data platform to see exactly how that MRR movement has mapped to our data model and rolls up into your metrics. See all transactions in our Data Platform Data output and integrations With ChartMogul, you can add multiple data sources, and even send your subscription data elsewhere. We offer direct integrations with Amazon S3, Azure Blob, Google Storage for cloud services. Customers often send their data to a data warehouse; in this sense ChartMogul can act as an emitter of clean and tidy revenue data for you to perform even more complex analyses. You can also connect ChartMogul to your favorite SaaS tools like Zendesk, Pitch, Geckoboard, and more. Core&Outline has a native integration with Slack. ChartMogul, by contrast, can connect to Slack via Zapier. Beyond analytics ChartMogul has dramatically improved the security of our APIs and provided increased flexibility for you and your team in the form of our new API access manager. Admins can create both read-write or read-only keys, and team members can create their own read-only keys. You can get an overview of the health of your business with our iOS and Android apps. You can see Monthly Recurring Revenue, Annual Run Rate, and your total number of subscribers. It’s not just for admins either, team members can also download the app, track progress, and share in the wins. So many of our customers are building their products and their audiences in public, so we also just added a way to download any chart and add a cool background for social sharing. https://twitter.com/agazdecki/status/1488884410841583616 Core&Outline offers an email dunning tool called Recover. B2B churn is on average around 5% according to recent data from Recurly. If you break down this 5% further, voluntary churn accounts for 4.21%. While passive churn due to outdated credit cards is clearly a problem (even more so if you’re B2C with a higher volume of customers), it’s not a bigger problem than customers actively choosing to suspend service with your company. ChartMogul’s strategic goal is to provide a holistic tool that’ll help you make data-informed decisions, discover your best fit customers, and grow your recurring revenue in a sustainable way – rather than charging for extras that’ll save you some customers who aren’t a fit and will probably keep churning anyway. To sum it all up Our customers love us because of the power and flexibility of our core product, the fast evolution of the data platform, and our dedicated (and growing) support, integrations, product, and engineering teams. Not to mention the ease of setup – if you’re thinking about switching to ChartMogul, we can easily import all your historical subscription data and get you set up in no time. But don’t take my word for it, check out what everyone’s been saying… We’re at the point where if you’re starting a SaaS business, you need a tool like ChartMogul from day 1. Buffer CEO Joel Gascoigne ChartMogul is absolutely worth the cost we’ve invested five times to ten times over. Instapage CEO Tyson Quick ChartMogul is a tool that helps you get a better understanding of the value you provide to customers. Whereby Director of Finance Ken Carlson 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. Livestorm CEO Gilles Bertaux </sys

Exploring Two Underappreciated MRR Growth Levers. MRR is the scoreboard where you can rank how you are doing compared to other SaaS companies. While there are other metrics that are used to understand SaaS businesses, MRR (or close derivatives such as MRR Growth Rates) is the primary metric that most B2B SaaS companies, their CEOs, and their investor partners measure themselves by. Most SaaS CEOs that I meet are obsessed with their MRR, but many don’t think about all of the levers available to them in growing MRR. When I took my first assignment as a Head of Growth a couple of years ago at a B2C company that I co-founded, I struggled with where to start? There are unlimited ways that one can grow a business. That is actually the problem: too many options! The engineer in me desired simplicity. I took a step backwards and broke down the five components of MRR, which then guided what I should own and what I should ask my colleagues to assist on. There are only 5 ways to increase your company’s MRR growth rate If you were to sit in a leadership team meeting at your typical SaaS business, and you asked Who is responsible for MRR growth? eyes in the meeting would likely shift towards the VP of Sales or the VP of Marketing. However, this is a very narrow lens through which one should view growth. There are five MRR levers available to a company when trying to grow a SaaS business. Each of these five levers should have an internal owner who is responsible and accountable for their particular metric. So much so, that those business owners should be tracking and reporting progress towards those metrics on a weekly basis. The five ways to increase the rate at which you grow MRR are: Increase New Business MRR Increase Expansion MRR Decrease Contraction MRR Decrease Churned MRR Increase Reactivation MRR While you could write a book on each of these five metrics, I’ll simply ask who is accountable for each of these metrics in your organization? New Business MRR is the easiest to answer for as this is usually owned by the Head of Sales or — in a B2C business — the Head of Marketing. Churn is sometimes more nuanced but is usually owned by a leader in customer success — though the argument can be made that sales, marketing, product, and engineering also impact churn. Expansion and Contraction are usually fairly clear cut in most organizations, owned by account management. What about Reactivation? The answer is often Nobody, or at best Marketing sort of owns it. There are a multitude of articles written about the big two levers: New business and Churn. I believe, however, that it’s worth recognizing that expansion and reactivation can have an appreciable — even a substantial — impact on your business’s MRR growth. To start, it sometimes helps to visualize the data. I find that waterfall diagrams are very useful in this case, and can easily be made by extracting your businesses data from ChartMogul and placing it in a spreadsheet. It’s a very simple and powerful way to visualize your MRR movements, all you need to do is simply grab five numbers from ChartMogul and put it in a spreadsheet and chart it. A waterfall chart allows you to visualize the impact of Expansion and Reactivation MRR. What does your business look like? What should it look like? For now, let’s assume like most companies you are putting a lot of focus on new business and churn MRR. What if, like in my fictitious example above, churn eats up most or all new business MRR. That can be very sobering, and unfortunately, very real to many SaaS businesses. The good news is that there are two other major growth vectors to help drive the business forward in a real way while you continue to attempt to find product/market fit. Expansion MRR For SaaS businesses increased Net Expansion (Expansion minus Contraction) can and should be a considerable growth vector. What if for every $1 of new business MRR, you could generate $2 of net expansion MRR? In the early days of the company, net expansion should be owned by the CEO and the founders. There are many ways to design your product for increased expansion (and reduced contraction), but two of the primary things to consider are: A pricing model designed to allow you to provide more value and grow MRR as your customers grow. Periodic price increases, especially if your business model isn’t designed to automatically capture the benefit of customer growth (see point 1). It’s worth doubling down on this — the pricing model that you put in place early on to enable net expansion growth will set the course for the effectiveness your account management team realizes in driving net expansion later on. When you designed your pricing model how much thought and effort went into it, a few hours? As your company grows and learns from your early customers, I believe you should revisit your pricing model. Probably more than once. It’s likely you didn’t get it right the first time, and maybe even the second time. While there are a tremendous number of things to consider in setting up your pricing model, I think the most important thing to remember is that it can be changed and improved. The second thing I would suggest is putting yourself in the place of your customers when thinking about the best model for your business. Your customer bought your product for a reason — they get some form of value. Under what scenario would they be excited to give you more money? The answer is likely not “more seats” or possibly even “more features”. Reactivation MRR Sitting at the very bottom of the funnel is reactivation. You might be surprised at how large of a component of your MRR movements reactivation is to your business. This is especially true if you run a B2C business. I’ve seen cases where reactivation each month is 30%+ of monthly churn. In other words, for every ten customers you lose, three come right back to your product. And the effort required to win them back is fractional when compared to the resources required to win a new customer. They already know your brand, understand your pricing, and have used your product before. The reason reactivation can be more profound in B2C businesses is that customers many times churn by accident or simply want a brief pause. Despite seeing in-app warnings and multiple emails that their credit card is going to expire, they sometimes don’t act — this is why it’s sometimes referred to as “passive churn”. People are busy, they take vacations, they get interrupted, many times they don’t think about you until they need you. Only to find their account has been downgraded. Proactive win-back campaigns can be very effective. When designing these campaigns keep in mind they usually require re-entry of billing information — so do your best to streamline that process for your returning customers. In the B2B world churning is usually much more intentional — many times referred to as “active churn”. That doesn’t mean that your former customer will not come back, many times they try competing products only to realize that the grass isn’t greener elsewhere. Periodic proactive nurturing after churn can bear fruit. In many organizations I find that reactivation is a forgotten lever, one of those that nobody seems to really own and take seriously. In B2B businesses customer success and marketing can play a big role, in B2C businesses it’s usually marketing that can have the biggest impact on reactivation. Almost every product that you cancel asks you for a reason that you are leaving their product — that data, mostly ignored in many organizations, can be gold. Identify and understand the top two or three reasons that your customers are churning. Then, I suggest creating two marketing or outreach campaigns. The first trying to win-back your former customers over the 90-180 days following their churn. The second campaign designed for the longer term, periodically checking in letting former customers know that your product is getting better each passing day. In each campaign you can address the top two or three issues identified as the reason most of your customers churned. The underappreciated levers of MRR growth There are only 5 ways to alter your business’s MRR growth rate. You are likely honed in on growing new business, and nipping churn in the bud. There are however two levers I’ve suggested that can bear similar fruit. They come with a great benefit — a customer (or former customer) that already has a relationship with you. They know who you are, and more importantly, they’ve passed the initial hurdle in buying from your company. With focus and ownership, a successful company can turn these two levers into growth vectors that rival or exceed your gross new business MRR. Imagine that, as you move towards product/market fit you might have a company that someday hypothetically doesn’t need any new customers to grow and survive! Further Reading Understanding and Benchmarking Your MRR Movements

[INST] Exploring Two Underappreciated MRR Growth Levers [/INST]

MRR is the scoreboard where you can rank how you are doing compared to other SaaS companies. While there are other metrics that are used to understand SaaS businesses, MRR (or close derivatives such as MRR Growth Rates) is the primary metric that most B2B SaaS companies, their CEOs, and their investor partners measure themselves by. Most SaaS CEOs that I meet are obsessed with their MRR, but many don’t think about all of the levers available to them in growing MRR. When I took my first assignment as a Head of Growth a couple of years ago at a B2C company that I co-founded, I struggled with where to start? There are unlimited ways that one can grow a business. That is actually the problem: too many options! The engineer in me desired simplicity. I took a step backwards and broke down the five components of MRR, which then guided what I should own and what I should ask my colleagues to assist on. There are only 5 ways to increase your company’s MRR growth rate If you were to sit in a leadership team meeting at your typical SaaS business, and you asked Who is responsible for MRR growth? eyes in the meeting would likely shift towards the VP of Sales or the VP of Marketing. However, this is a very narrow lens through which one should view growth. There are five MRR levers available to a company when trying to grow a SaaS business. Each of these five levers should have an internal owner who is responsible and accountable for their particular metric. So much so, that those business owners should be tracking and reporting progress towards those metrics on a weekly basis. The five ways to increase the rate at which you grow MRR are: Increase New Business MRR Increase Expansion MRR Decrease Contraction MRR Decrease Churned MRR Increase Reactivation MRR While you could write a book on each of these five metrics, I’ll simply ask who is accountable for each of these metrics in your organization? New Business MRR is the easiest to answer for as this is usually owned by the Head of Sales or — in a B2C business — the Head of Marketing. Churn is sometimes more nuanced but is usually owned by a leader in customer success — though the argument can be made that sales, marketing, product, and engineering also impact churn. Expansion and Contraction are usually fairly clear cut in most organizations, owned by account management. What about Reactivation? The answer is often Nobody, or at best Marketing sort of owns it. There are a multitude of articles written about the big two levers: New business and Churn. I believe, however, that it’s worth recognizing that expansion and reactivation can have an appreciable — even a substantial — impact on your business’s MRR growth. To start, it sometimes helps to visualize the data. I find that waterfall diagrams are very useful in this case, and can easily be made by extracting your businesses data from ChartMogul and placing it in a spreadsheet. It’s a very simple and powerful way to visualize your MRR movements, all you need to do is simply grab five numbers from ChartMogul and put it in a spreadsheet and chart it. A waterfall chart allows you to visualize the impact of Expansion and Reactivation MRR. What does your business look like? What should it look like? For now, let’s assume like most companies you are putting a lot of focus on new business and churn MRR. What if, like in my fictitious example above, churn eats up most or all new business MRR. That can be very sobering, and unfortunately, very real to many SaaS businesses. The good news is that there are two other major growth vectors to help drive the business forward in a real way while you continue to attempt to find product/market fit. Expansion MRR For SaaS businesses increased Net Expansion (Expansion minus Contraction) can and should be a considerable growth vector. What if for every $1 of new business MRR, you could generate $2 of net expansion MRR? In the early days of the company, net expansion should be owned by the CEO and the founders. There are many ways to design your product for increased expansion (and reduced contraction), but two of the primary things to consider are: A pricing model designed to allow you to provide more value and grow MRR as your customers grow. Periodic price increases, especially if your business model isn’t designed to automatically capture the benefit of customer growth (see point 1). It’s worth doubling down on this — the pricing model that you put in place early on to enable net expansion growth will set the course for the effectiveness your account management team realizes in driving net expansion later on. When you designed your pricing model how much thought and effort went into it, a few hours? As your company grows and learns from your early customers, I believe you should revisit your pricing model. Probably more than once. It’s likely you didn’t get it right the first time, and maybe even the second time. While there are a tremendous number of things to consider in setting up your pricing model, I think the most important thing to remember is that it can be changed and improved. The second thing I would suggest is putting yourself in the place of your customers when thinking about the best model for your business. Your customer bought your product for a reason — they get some form of value. Under what scenario would they be excited to give you more money? The answer is likely not “more seats” or possibly even “more features”. Reactivation MRR Sitting at the very bottom of the funnel is reactivation. You might be surprised at how large of a component of your MRR movements reactivation is to your business. This is especially true if you run a B2C business. I’ve seen cases where reactivation each month is 30%+ of monthly churn. In other words, for every ten customers you lose, three come right back to your product. And the effort required to win them back is fractional when compared to the resources required to win a new customer. They already know your brand, understand your pricing, and have used your product before. The reason reactivation can be more profound in B2C businesses is that customers many times churn by accident or simply want a brief pause. Despite seeing in-app warnings and multiple emails that their credit card is going to expire, they sometimes don’t act — this is why it’s sometimes referred to as “passive churn”. People are busy, they take vacations, they get interrupted, many times they don’t think about you until they need you. Only to find their account has been downgraded. Proactive win-back campaigns can be very effective. When designing these campaigns keep in mind they usually require re-entry of billing information — so do your best to streamline that process for your returning customers. In the B2B world churning is usually much more intentional — many times referred to as “active churn”. That doesn’t mean that your former customer will not come back, many times they try competing products only to realize that the grass isn’t greener elsewhere. Periodic proactive nurturing after churn can bear fruit. In many organizations I find that reactivation is a forgotten lever, one of those that nobody seems to really own and take seriously. In B2B businesses customer success and marketing can play a big role, in B2C businesses it’s usually marketing that can have the biggest impact on reactivation. Almost every product that you cancel asks you for a reason that you are leaving their product — that data, mostly ignored in many organizations, can be gold. Identify and understand the top two or three reasons that your customers are churning. Then, I suggest creating two marketing or outreach campaigns. The first trying to win-back your former customers over the 90-180 days following their churn. The second campaign designed for the longer term, periodically checking in letting former customers know that your product is getting better each passing day. In each campaign you can address the top two or three issues identified as the reason most of your customers churned. The underappreciated levers of MRR growth There are only 5 ways to alter your business’s MRR growth rate. You are likely honed in on growing new business, and nipping churn in the bud. There are however two levers I’ve suggested that can bear similar fruit. They come with a great benefit — a customer (or former customer) that already has a relationship with you. They know who you are, and more importantly, they’ve passed the initial hurdle in buying from your company. With focus and ownership, a successful company can turn these two levers into growth vectors that rival or exceed your gross new business MRR. Imagine that, as you move towards product/market fit you might have a company that someday hypothetically doesn’t need any new customers to grow and survive! Further Reading Understanding and Benchmarking Your MRR Movements

<sys> [INST] Exploring Two Underappreciated MRR Growth Levers [/INST] MRR is the scoreboard where you can rank how you are doing compared to other SaaS companies. While there are other metrics that are used to understand SaaS businesses, MRR (or close derivatives such as MRR Growth Rates) is the primary metric that most B2B SaaS companies, their CEOs, and their investor partners measure themselves by. Most SaaS CEOs that I meet are obsessed with their MRR, but many don’t think about all of the levers available to them in growing MRR. When I took my first assignment as a Head of Growth a couple of years ago at a B2C company that I co-founded, I struggled with where to start? There are unlimited ways that one can grow a business. That is actually the problem: too many options! The engineer in me desired simplicity. I took a step backwards and broke down the five components of MRR, which then guided what I should own and what I should ask my colleagues to assist on. There are only 5 ways to increase your company’s MRR growth rate If you were to sit in a leadership team meeting at your typical SaaS business, and you asked Who is responsible for MRR growth? eyes in the meeting would likely shift towards the VP of Sales or the VP of Marketing. However, this is a very narrow lens through which one should view growth. There are five MRR levers available to a company when trying to grow a SaaS business. Each of these five levers should have an internal owner who is responsible and accountable for their particular metric. So much so, that those business owners should be tracking and reporting progress towards those metrics on a weekly basis. The five ways to increase the rate at which you grow MRR are: Increase New Business MRR Increase Expansion MRR Decrease Contraction MRR Decrease Churned MRR Increase Reactivation MRR While you could write a book on each of these five metrics, I’ll simply ask who is accountable for each of these metrics in your organization? New Business MRR is the easiest to answer for as this is usually owned by the Head of Sales or — in a B2C business — the Head of Marketing. Churn is sometimes more nuanced but is usually owned by a leader in customer success — though the argument can be made that sales, marketing, product, and engineering also impact churn. Expansion and Contraction are usually fairly clear cut in most organizations, owned by account management. What about Reactivation? The answer is often Nobody, or at best Marketing sort of owns it. There are a multitude of articles written about the big two levers: New business and Churn. I believe, however, that it’s worth recognizing that expansion and reactivation can have an appreciable — even a substantial — impact on your business’s MRR growth. To start, it sometimes helps to visualize the data. I find that waterfall diagrams are very useful in this case, and can easily be made by extracting your businesses data from ChartMogul and placing it in a spreadsheet. It’s a very simple and powerful way to visualize your MRR movements, all you need to do is simply grab five numbers from ChartMogul and put it in a spreadsheet and chart it. A waterfall chart allows you to visualize the impact of Expansion and Reactivation MRR. What does your business look like? What should it look like? For now, let’s assume like most companies you are putting a lot of focus on new business and churn MRR. What if, like in my fictitious example above, churn eats up most or all new business MRR. That can be very sobering, and unfortunately, very real to many SaaS businesses. The good news is that there are two other major growth vectors to help drive the business forward in a real way while you continue to attempt to find product/market fit. Expansion MRR For SaaS businesses increased Net Expansion (Expansion minus Contraction) can and should be a considerable growth vector. What if for every $1 of new business MRR, you could generate $2 of net expansion MRR? In the early days of the company, net expansion should be owned by the CEO and the founders. There are many ways to design your product for increased expansion (and reduced contraction), but two of the primary things to consider are: A pricing model designed to allow you to provide more value and grow MRR as your customers grow. Periodic price increases, especially if your business model isn’t designed to automatically capture the benefit of customer growth (see point 1). It’s worth doubling down on this — the pricing model that you put in place early on to enable net expansion growth will set the course for the effectiveness your account management team realizes in driving net expansion later on. When you designed your pricing model how much thought and effort went into it, a few hours? As your company grows and learns from your early customers, I believe you should revisit your pricing model. Probably more than once. It’s likely you didn’t get it right the first time, and maybe even the second time. While there are a tremendous number of things to consider in setting up your pricing model, I think the most important thing to remember is that it can be changed and improved. The second thing I would suggest is putting yourself in the place of your customers when thinking about the best model for your business. Your customer bought your product for a reason — they get some form of value. Under what scenario would they be excited to give you more money? The answer is likely not “more seats” or possibly even “more features”. Reactivation MRR Sitting at the very bottom of the funnel is reactivation. You might be surprised at how large of a component of your MRR movements reactivation is to your business. This is especially true if you run a B2C business. I’ve seen cases where reactivation each month is 30%+ of monthly churn. In other words, for every ten customers you lose, three come right back to your product. And the effort required to win them back is fractional when compared to the resources required to win a new customer. They already know your brand, understand your pricing, and have used your product before. The reason reactivation can be more profound in B2C businesses is that customers many times churn by accident or simply want a brief pause. Despite seeing in-app warnings and multiple emails that their credit card is going to expire, they sometimes don’t act — this is why it’s sometimes referred to as “passive churn”. People are busy, they take vacations, they get interrupted, many times they don’t think about you until they need you. Only to find their account has been downgraded. Proactive win-back campaigns can be very effective. When designing these campaigns keep in mind they usually require re-entry of billing information — so do your best to streamline that process for your returning customers. In the B2B world churning is usually much more intentional — many times referred to as “active churn”. That doesn’t mean that your former customer will not come back, many times they try competing products only to realize that the grass isn’t greener elsewhere. Periodic proactive nurturing after churn can bear fruit. In many organizations I find that reactivation is a forgotten lever, one of those that nobody seems to really own and take seriously. In B2B businesses customer success and marketing can play a big role, in B2C businesses it’s usually marketing that can have the biggest impact on reactivation. Almost every product that you cancel asks you for a reason that you are leaving their product — that data, mostly ignored in many organizations, can be gold. Identify and understand the top two or three reasons that your customers are churning. Then, I suggest creating two marketing or outreach campaigns. The first trying to win-back your former customers over the 90-180 days following their churn. The second campaign designed for the longer term, periodically checking in letting former customers know that your product is getting better each passing day. In each campaign you can address the top two or three issues identified as the reason most of your customers churned. The underappreciated levers of MRR growth There are only 5 ways to alter your business’s MRR growth rate. You are likely honed in on growing new business, and nipping churn in the bud. There are however two levers I’ve suggested that can bear similar fruit. They come with a great benefit — a customer (or former customer) that already has a relationship with you. They know who you are, and more importantly, they’ve passed the initial hurdle in buying from your company. With focus and ownership, a successful company can turn these two levers into growth vectors that rival or exceed your gross new business MRR. Imagine that, as you move towards product/market fit you might have a company that someday hypothetically doesn’t need any new customers to grow and survive! Further Reading Understanding and Benchmarking Your MRR Movements </sys

What it takes to be a category king. It’s a ruler-takes-all game In the world of SaaS, there’s a never-ending game of thrones. Ruling over an entire category is the ultimate goal, but getting there is a grueling journey that requires killing your competitors and uncompromising focus. Today, taking on an existing market with a well-established leader is verging on suicidal. The prospect of trying to overthrow the kingdom of Salesforce by beating them at their own game just doesn’t make sense. So what’s the alternative for an ambitious SaaS startup? Build your own throne, castle and kingdom. The concept of category creation has seen increased discussion in the past 6–12 months. If you believe the thought leaders, it’s a critical component required for new SaaS businesses to succeed today. Category creation means that: You won’t be directly compared with competitors. In fact, you won’t really have competitors as such. You can set your own price point, avoiding any preconception among potential customers. This in turn sets your average contract value (ACV), which is a major factor in your valuation. You receive a huge boost in branding from designing and naming your own approach. Creating a category doesn’t mean having the best product. It’s about being seen in a different light — standing alone rather than in a crowd. Drift positions itself as the conversational marketing platform rather than just another marketing automation product. Gainsight sparked the customer success movement at a time when nobody knew what customer success was. Hubspot coined the term inbound marketing, rather than being yet another CRM. “Find a vector that you can own — the key is it has to be ownable. It’s not a product message, it’s a community message, an industry message.” Aaron Levie — CEO, Box It’s worth noting that some categories come about naturally from advances in technology or organizational functions. For example, cloud storage became feasible when bandwidth and data storage costs approached a sweet spot — Dropbox and Box were able to capitalize on this. As cloud technology adoption grew, Gainsight saw the need (and potential) for a new role within cloud software businesses, in the form of the customer success manager. Other cases of category creation are driven more from the business side rather than external market forces. These are businesses that are cognizant of the fact that category creation is a prerequisite for rocket-ship growth, so they put serious effort into manufacturing and refining their own category — with varying levels of success. Owning a category vs. creating a category: Is there a difference? Category owners or “kings” are often lauded in the SaaS industry where they take a disproportionately large chunk of market revenue. This means that owning a category is in most cases a requirement for the level of growth and investment multiples that venture capital demands. Zendesk is a great example of a category king — the company gobbles up the vast proportion of value in cloud-based support desk solutions. But do category owners need to have built the population over which they rule? It’s usually the case, but on rare occasions startups have been known to overthrow incumbents. Innovative startups have the potential to disrupt and overthrow the very leaders who established the category in the first place. What if the category creator is too soon? Timing is everything when aiming for category domination. Market dynamics change incredibly quickly, and technological advances often tip the balance in favor of aggressive upstarts. Creating a new category requires a different set of qualities than getting to category leader status. Why is this happening now? As I’ve written before, SaaS businesses’ ability to differentiate themselves from increasingly fierce competition is tougher than it’s ever been. As the market matures and verticals start to reach saturation, features that were once key points of differentiation have become commoditized. In the early days (first-generation SaaS), just being in the cloud was differentiation. Oh how far we’ve come. So what’s left? A few key opportunities for differentiation: Branding (see Why B2B is finally investing in brand) Data (as machine learning techniques are increasingly accessible, data becomes a point of leverage) Framing Category creation is all about framing — the way that the outside world perceives your business, and the problem you’re solving. A symptom of market saturation Just a quick look at the shape of the marketing technology space gives you an idea of just how much competition exists in the market in 2018: And this is only the marketing technology landscape! (source) In 2015, Tomasz Tunguz wrote about how most companies at the time — irrespective of size — were shown to very consistently use 14 SaaS applications across the organization: “SaaS startups are either competing within these categories or creating a new category. The consistency of 14 apps underscores the importance of category creation for SaaS companies creating software for newer workflows, in contrast to those replacing existing products.” Fast forward three years and this reality is even more extreme. Future growth in SaaS is far more likely to come from new categories generated by emerging technologies and use cases than existing ones. So which challenge would you rather take on: Selling a replacement for an incumbent solution in an established category? Offering a new type of solution for a problem most businesses don’t realize they have yet? Both paths represent huge mountains to climb, requiring considerably different approaches to branding and positioning. An existing category is easy to enter, but hard to own. A new category is hard to create, but easy to own once you’ve created it. The emergence of SaaS micro categories “The result for users is a sprawling array of products, all claiming they’re on a slightly different mission to the next one” Not every SaaS business needs to exist in its own category — and that’s okay. But almost every SaaS wants to exist in its own category, and that causes some interesting side effects in the landscape. With the entire industry scrambling to differentiate themselves from the next competing product, nobody wants to be “yet another CRM”. The result for users is a sprawling array of products, all claiming they’re on a slightly different mission than the next one — and that their approach is the right one. As you can imagine, this gets confusing for buyers looking for a straightforward solution. Is this a real problem? Perhaps not. Is it even anything new? Businesses have been shouting for many years about how their solution is “the new way”. Today’s category kings Slack (business communication) Slack has transformed the way people communicate at work. With a rate of growth rarely seen in B2B software businesses, the company has demonstrated the kind of ROI found through category creation. Salesforce (CRM) Also known as the “founding father of SaaS”, Salesforce went on to define the CRM category that many businesses compete in today, and have since expanded beyond this. Marketo (marketing automation) Marketing automation as a category is dominated my Marketo, which took advantage of a shift toward more self-service B2B software with free trials — conditions ripe for scale through automation. Hubspot (inbound marketing) Hubspot could have decided to take on existing CRMs like Salesforce when they launched. Instead, they invented inbound marketing and with it, ushered in a completely new approach to engaging with potential customers. Gainsight (customer success) Customer success as we know it today exists because of Gainsight. The company saw that helping customers succeed and driving retention was a critical component of businesses entering the (then emerging) cloud software market. How to create a category in four very difficult steps So you want to create your own category — a noble goal! What does it actually take? Step 1: define it This might sound simple, but it’s not. The successful category creators in SaaS didn’t think of a concept and slap a nice-sounding name on it. Just like naming a product or company, this needs to be memorable and unique to the point that people won’t have pre-existing biases or preconceptions toward it. Step 2: align around it You won’t be able to earn validation from an entire industry without first aligning your entire company around your concept. Every team needs to know your mission inside-out and really believe in it. Step 3: communicate it Repeat it over and over. And over. If you want your concept to stick in people’s minds you’ll need to put considerable effort into marketing it to your target audience through content, PR and in every form of public-facing communication. Communicate the problem you’re solving (and how you’re solving it) in a unique way. Framing is key here. Step 4: make it a reality You need to condition the market to your solution and your company’s perspective on the problem. This is by far the hardest step — the goal here is to change people’s way of thinking about a problem. They need to see it in a new light. You’ll need to show evidence that your approach to the problem actually works. Step four represents market acceptance of your category, validated by third party adoption in communication (people talking about it) and even other businesses emerging with similar positioning (competition). Should I aim to create a category for my business? Looks alluring, doesn’t it? The bottom line here is that it comes down to your product and the way you’re solving problems for your customers. Category creation is not just a marketing strategy, even though there’s a large element of marketing and positioning involved. It’s a ground-up approach to building a business and bringing it to market. The companies listed above succeeded because their offering was fundamentally different than anything else that existed at the time. Is the the problem your product solves something that hasn’t been addressed in the market? Is the way your product solves an existing problem unique — does it reframe the problem in a groundbreaking way or implement cutting-edge technology to transform your approach? If you’re applying category creation as a thinly veiled attempt to differentiate your brand that doesn’t reflect your product, people will see through this. Failed attempts at category creation end up in obscurity and a message that doesn’t resonate with your target customers — a big fat “huh?!” from the market. You don’t need to create a category to be successful. If you’re not aiming for the scale and returns that venture capital demands, simply being a significant player in an existing market segment can result in an enduring, profitable business. In 2018 there still exists a strong potential for differentiation in SaaS — whether that means building a stand-out brand, leveraging large volumes of data or framing your solution in a unique way is up to you. Looking to the future What does the industry look like if everyone exists in a category of one? There are certainly downsides to this form of market fragmentation. How can businesses make buying decisions when every vendor argues that, although there’s some overlap, they’re not really a competitor to that other product? We’re likely to see an increase in the number of services businesses pay for. Perhaps competition between SaaS services will be pushed further down the funnel, from the marketing and pre-purchase stage into early-life adoption and onboarding, when the true value of a solution becomes clear.

[INST] What it takes to be a category king [/INST]

It’s a ruler-takes-all game In the world of SaaS, there’s a never-ending game of thrones. Ruling over an entire category is the ultimate goal, but getting there is a grueling journey that requires killing your competitors and uncompromising focus. Today, taking on an existing market with a well-established leader is verging on suicidal. The prospect of trying to overthrow the kingdom of Salesforce by beating them at their own game just doesn’t make sense. So what’s the alternative for an ambitious SaaS startup? Build your own throne, castle and kingdom. The concept of category creation has seen increased discussion in the past 6–12 months. If you believe the thought leaders, it’s a critical component required for new SaaS businesses to succeed today. Category creation means that: You won’t be directly compared with competitors. In fact, you won’t really have competitors as such. You can set your own price point, avoiding any preconception among potential customers. This in turn sets your average contract value (ACV), which is a major factor in your valuation. You receive a huge boost in branding from designing and naming your own approach. Creating a category doesn’t mean having the best product. It’s about being seen in a different light — standing alone rather than in a crowd. Drift positions itself as the conversational marketing platform rather than just another marketing automation product. Gainsight sparked the customer success movement at a time when nobody knew what customer success was. Hubspot coined the term inbound marketing, rather than being yet another CRM. “Find a vector that you can own — the key is it has to be ownable. It’s not a product message, it’s a community message, an industry message.” Aaron Levie — CEO, Box It’s worth noting that some categories come about naturally from advances in technology or organizational functions. For example, cloud storage became feasible when bandwidth and data storage costs approached a sweet spot — Dropbox and Box were able to capitalize on this. As cloud technology adoption grew, Gainsight saw the need (and potential) for a new role within cloud software businesses, in the form of the customer success manager. Other cases of category creation are driven more from the business side rather than external market forces. These are businesses that are cognizant of the fact that category creation is a prerequisite for rocket-ship growth, so they put serious effort into manufacturing and refining their own category — with varying levels of success. Owning a category vs. creating a category: Is there a difference? Category owners or “kings” are often lauded in the SaaS industry where they take a disproportionately large chunk of market revenue. This means that owning a category is in most cases a requirement for the level of growth and investment multiples that venture capital demands. Zendesk is a great example of a category king — the company gobbles up the vast proportion of value in cloud-based support desk solutions. But do category owners need to have built the population over which they rule? It’s usually the case, but on rare occasions startups have been known to overthrow incumbents. Innovative startups have the potential to disrupt and overthrow the very leaders who established the category in the first place. What if the category creator is too soon? Timing is everything when aiming for category domination. Market dynamics change incredibly quickly, and technological advances often tip the balance in favor of aggressive upstarts. Creating a new category requires a different set of qualities than getting to category leader status. Why is this happening now? As I’ve written before, SaaS businesses’ ability to differentiate themselves from increasingly fierce competition is tougher than it’s ever been. As the market matures and verticals start to reach saturation, features that were once key points of differentiation have become commoditized. In the early days (first-generation SaaS), just being in the cloud was differentiation. Oh how far we’ve come. So what’s left? A few key opportunities for differentiation: Branding (see Why B2B is finally investing in brand) Data (as machine learning techniques are increasingly accessible, data becomes a point of leverage) Framing Category creation is all about framing — the way that the outside world perceives your business, and the problem you’re solving. A symptom of market saturation Just a quick look at the shape of the marketing technology space gives you an idea of just how much competition exists in the market in 2018: And this is only the marketing technology landscape! (source) In 2015, Tomasz Tunguz wrote about how most companies at the time — irrespective of size — were shown to very consistently use 14 SaaS applications across the organization: “SaaS startups are either competing within these categories or creating a new category. The consistency of 14 apps underscores the importance of category creation for SaaS companies creating software for newer workflows, in contrast to those replacing existing products.” Fast forward three years and this reality is even more extreme. Future growth in SaaS is far more likely to come from new categories generated by emerging technologies and use cases than existing ones. So which challenge would you rather take on: Selling a replacement for an incumbent solution in an established category? Offering a new type of solution for a problem most businesses don’t realize they have yet? Both paths represent huge mountains to climb, requiring considerably different approaches to branding and positioning. An existing category is easy to enter, but hard to own. A new category is hard to create, but easy to own once you’ve created it. The emergence of SaaS micro categories “The result for users is a sprawling array of products, all claiming they’re on a slightly different mission to the next one” Not every SaaS business needs to exist in its own category — and that’s okay. But almost every SaaS wants to exist in its own category, and that causes some interesting side effects in the landscape. With the entire industry scrambling to differentiate themselves from the next competing product, nobody wants to be “yet another CRM”. The result for users is a sprawling array of products, all claiming they’re on a slightly different mission than the next one — and that their approach is the right one. As you can imagine, this gets confusing for buyers looking for a straightforward solution. Is this a real problem? Perhaps not. Is it even anything new? Businesses have been shouting for many years about how their solution is “the new way”. Today’s category kings Slack (business communication) Slack has transformed the way people communicate at work. With a rate of growth rarely seen in B2B software businesses, the company has demonstrated the kind of ROI found through category creation. Salesforce (CRM) Also known as the “founding father of SaaS”, Salesforce went on to define the CRM category that many businesses compete in today, and have since expanded beyond this. Marketo (marketing automation) Marketing automation as a category is dominated my Marketo, which took advantage of a shift toward more self-service B2B software with free trials — conditions ripe for scale through automation. Hubspot (inbound marketing) Hubspot could have decided to take on existing CRMs like Salesforce when they launched. Instead, they invented inbound marketing and with it, ushered in a completely new approach to engaging with potential customers. Gainsight (customer success) Customer success as we know it today exists because of Gainsight. The company saw that helping customers succeed and driving retention was a critical component of businesses entering the (then emerging) cloud software market. How to create a category in four very difficult steps So you want to create your own category — a noble goal! What does it actually take? Step 1: define it This might sound simple, but it’s not. The successful category creators in SaaS didn’t think of a concept and slap a nice-sounding name on it. Just like naming a product or company, this needs to be memorable and unique to the point that people won’t have pre-existing biases or preconceptions toward it. Step 2: align around it You won’t be able to earn validation from an entire industry without first aligning your entire company around your concept. Every team needs to know your mission inside-out and really believe in it. Step 3: communicate it Repeat it over and over. And over. If you want your concept to stick in people’s minds you’ll need to put considerable effort into marketing it to your target audience through content, PR and in every form of public-facing communication. Communicate the problem you’re solving (and how you’re solving it) in a unique way. Framing is key here. Step 4: make it a reality You need to condition the market to your solution and your company’s perspective on the problem. This is by far the hardest step — the goal here is to change people’s way of thinking about a problem. They need to see it in a new light. You’ll need to show evidence that your approach to the problem actually works. Step four represents market acceptance of your category, validated by third party adoption in communication (people talking about it) and even other businesses emerging with similar positioning (competition). Should I aim to create a category for my business? Looks alluring, doesn’t it? The bottom line here is that it comes down to your product and the way you’re solving problems for your customers. Category creation is not just a marketing strategy, even though there’s a large element of marketing and positioning involved. It’s a ground-up approach to building a business and bringing it to market. The companies listed above succeeded because their offering was fundamentally different than anything else that existed at the time. Is the the problem your product solves something that hasn’t been addressed in the market? Is the way your product solves an existing problem unique — does it reframe the problem in a groundbreaking way or implement cutting-edge technology to transform your approach? If you’re applying category creation as a thinly veiled attempt to differentiate your brand that doesn’t reflect your product, people will see through this. Failed attempts at category creation end up in obscurity and a message that doesn’t resonate with your target customers — a big fat “huh?!” from the market. You don’t need to create a category to be successful. If you’re not aiming for the scale and returns that venture capital demands, simply being a significant player in an existing market segment can result in an enduring, profitable business. In 2018 there still exists a strong potential for differentiation in SaaS — whether that means building a stand-out brand, leveraging large volumes of data or framing your solution in a unique way is up to you. Looking to the future What does the industry look like if everyone exists in a category of one? There are certainly downsides to this form of market fragmentation. How can businesses make buying decisions when every vendor argues that, although there’s some overlap, they’re not really a competitor to that other product? We’re likely to see an increase in the number of services businesses pay for. Perhaps competition between SaaS services will be pushed further down the funnel, from the marketing and pre-purchase stage into early-life adoption and onboarding, when the true value of a solution becomes clear.

<sys> [INST] What it takes to be a category king [/INST] It’s a ruler-takes-all game In the world of SaaS, there’s a never-ending game of thrones. Ruling over an entire category is the ultimate goal, but getting there is a grueling journey that requires killing your competitors and uncompromising focus. Today, taking on an existing market with a well-established leader is verging on suicidal. The prospect of trying to overthrow the kingdom of Salesforce by beating them at their own game just doesn’t make sense. So what’s the alternative for an ambitious SaaS startup? Build your own throne, castle and kingdom. The concept of category creation has seen increased discussion in the past 6–12 months. If you believe the thought leaders, it’s a critical component required for new SaaS businesses to succeed today. Category creation means that: You won’t be directly compared with competitors. In fact, you won’t really have competitors as such. You can set your own price point, avoiding any preconception among potential customers. This in turn sets your average contract value (ACV), which is a major factor in your valuation. You receive a huge boost in branding from designing and naming your own approach. Creating a category doesn’t mean having the best product. It’s about being seen in a different light — standing alone rather than in a crowd. Drift positions itself as the conversational marketing platform rather than just another marketing automation product. Gainsight sparked the customer success movement at a time when nobody knew what customer success was. Hubspot coined the term inbound marketing, rather than being yet another CRM. “Find a vector that you can own — the key is it has to be ownable. It’s not a product message, it’s a community message, an industry message.” Aaron Levie — CEO, Box It’s worth noting that some categories come about naturally from advances in technology or organizational functions. For example, cloud storage became feasible when bandwidth and data storage costs approached a sweet spot — Dropbox and Box were able to capitalize on this. As cloud technology adoption grew, Gainsight saw the need (and potential) for a new role within cloud software businesses, in the form of the customer success manager. Other cases of category creation are driven more from the business side rather than external market forces. These are businesses that are cognizant of the fact that category creation is a prerequisite for rocket-ship growth, so they put serious effort into manufacturing and refining their own category — with varying levels of success. Owning a category vs. creating a category: Is there a difference? Category owners or “kings” are often lauded in the SaaS industry where they take a disproportionately large chunk of market revenue. This means that owning a category is in most cases a requirement for the level of growth and investment multiples that venture capital demands. Zendesk is a great example of a category king — the company gobbles up the vast proportion of value in cloud-based support desk solutions. But do category owners need to have built the population over which they rule? It’s usually the case, but on rare occasions startups have been known to overthrow incumbents. Innovative startups have the potential to disrupt and overthrow the very leaders who established the category in the first place. What if the category creator is too soon? Timing is everything when aiming for category domination. Market dynamics change incredibly quickly, and technological advances often tip the balance in favor of aggressive upstarts. Creating a new category requires a different set of qualities than getting to category leader status. Why is this happening now? As I’ve written before, SaaS businesses’ ability to differentiate themselves from increasingly fierce competition is tougher than it’s ever been. As the market matures and verticals start to reach saturation, features that were once key points of differentiation have become commoditized. In the early days (first-generation SaaS), just being in the cloud was differentiation. Oh how far we’ve come. So what’s left? A few key opportunities for differentiation: Branding (see Why B2B is finally investing in brand) Data (as machine learning techniques are increasingly accessible, data becomes a point of leverage) Framing Category creation is all about framing — the way that the outside world perceives your business, and the problem you’re solving. A symptom of market saturation Just a quick look at the shape of the marketing technology space gives you an idea of just how much competition exists in the market in 2018: And this is only the marketing technology landscape! (source) In 2015, Tomasz Tunguz wrote about how most companies at the time — irrespective of size — were shown to very consistently use 14 SaaS applications across the organization: “SaaS startups are either competing within these categories or creating a new category. The consistency of 14 apps underscores the importance of category creation for SaaS companies creating software for newer workflows, in contrast to those replacing existing products.” Fast forward three years and this reality is even more extreme. Future growth in SaaS is far more likely to come from new categories generated by emerging technologies and use cases than existing ones. So which challenge would you rather take on: Selling a replacement for an incumbent solution in an established category? Offering a new type of solution for a problem most businesses don’t realize they have yet? Both paths represent huge mountains to climb, requiring considerably different approaches to branding and positioning. An existing category is easy to enter, but hard to own. A new category is hard to create, but easy to own once you’ve created it. The emergence of SaaS micro categories “The result for users is a sprawling array of products, all claiming they’re on a slightly different mission to the next one” Not every SaaS business needs to exist in its own category — and that’s okay. But almost every SaaS wants to exist in its own category, and that causes some interesting side effects in the landscape. With the entire industry scrambling to differentiate themselves from the next competing product, nobody wants to be “yet another CRM”. The result for users is a sprawling array of products, all claiming they’re on a slightly different mission than the next one — and that their approach is the right one. As you can imagine, this gets confusing for buyers looking for a straightforward solution. Is this a real problem? Perhaps not. Is it even anything new? Businesses have been shouting for many years about how their solution is “the new way”. Today’s category kings Slack (business communication) Slack has transformed the way people communicate at work. With a rate of growth rarely seen in B2B software businesses, the company has demonstrated the kind of ROI found through category creation. Salesforce (CRM) Also known as the “founding father of SaaS”, Salesforce went on to define the CRM category that many businesses compete in today, and have since expanded beyond this. Marketo (marketing automation) Marketing automation as a category is dominated my Marketo, which took advantage of a shift toward more self-service B2B software with free trials — conditions ripe for scale through automation. Hubspot (inbound marketing) Hubspot could have decided to take on existing CRMs like Salesforce when they launched. Instead, they invented inbound marketing and with it, ushered in a completely new approach to engaging with potential customers. Gainsight (customer success) Customer success as we know it today exists because of Gainsight. The company saw that helping customers succeed and driving retention was a critical component of businesses entering the (then emerging) cloud software market. How to create a category in four very difficult steps So you want to create your own category — a noble goal! What does it actually take? Step 1: define it This might sound simple, but it’s not. The successful category creators in SaaS didn’t think of a concept and slap a nice-sounding name on it. Just like naming a product or company, this needs to be memorable and unique to the point that people won’t have pre-existing biases or preconceptions toward it. Step 2: align around it You won’t be able to earn validation from an entire industry without first aligning your entire company around your concept. Every team needs to know your mission inside-out and really believe in it. Step 3: communicate it Repeat it over and over. And over. If you want your concept to stick in people’s minds you’ll need to put considerable effort into marketing it to your target audience through content, PR and in every form of public-facing communication. Communicate the problem you’re solving (and how you’re solving it) in a unique way. Framing is key here. Step 4: make it a reality You need to condition the market to your solution and your company’s perspective on the problem. This is by far the hardest step — the goal here is to change people’s way of thinking about a problem. They need to see it in a new light. You’ll need to show evidence that your approach to the problem actually works. Step four represents market acceptance of your category, validated by third party adoption in communication (people talking about it) and even other businesses emerging with similar positioning (competition). Should I aim to create a category for my business? Looks alluring, doesn’t it? The bottom line here is that it comes down to your product and the way you’re solving problems for your customers. Category creation is not just a marketing strategy, even though there’s a large element of marketing and positioning involved. It’s a ground-up approach to building a business and bringing it to market. The companies listed above succeeded because their offering was fundamentally different than anything else that existed at the time. Is the the problem your product solves something that hasn’t been addressed in the market? Is the way your product solves an existing problem unique — does it reframe the problem in a groundbreaking way or implement cutting-edge technology to transform your approach? If you’re applying category creation as a thinly veiled attempt to differentiate your brand that doesn’t reflect your product, people will see through this. Failed attempts at category creation end up in obscurity and a message that doesn’t resonate with your target customers — a big fat “huh?!” from the market. You don’t need to create a category to be successful. If you’re not aiming for the scale and returns that venture capital demands, simply being a significant player in an existing market segment can result in an enduring, profitable business. In 2018 there still exists a strong potential for differentiation in SaaS — whether that means building a stand-out brand, leveraging large volumes of data or framing your solution in a unique way is up to you. Looking to the future What does the industry look like if everyone exists in a category of one? There are certainly downsides to this form of market fragmentation. How can businesses make buying decisions when every vendor argues that, although there’s some overlap, they’re not really a competitor to that other product? We’re likely to see an increase in the number of services businesses pay for. Perhaps competition between SaaS services will be pushed further down the funnel, from the marketing and pre-purchase stage into early-life adoption and onboarding, when the true value of a solution becomes clear. </sys

Create and Share Customer Lists in ChartMogul. When you think about the value ChartMogul provides, you probably think about the metrics we calculate and visualize. And you’re not wrong. But ChartMogul power-users know that one of our most useful features is our Customers page, where we aggregate every lead, active customer, past due customer and cancelled customer and allow you to explore their payment history. Similar to the rest of ChartMogul, users can apply filters and segments to look at specific customer views. However, until now you would have to bookmark the URL in your browser or recreate your view when you needed it again. I’m excited to share that we’ve revamped your customer lists to be customizable, savable and shareable. Using customer lists Now when you go to your Customers page, you’ll see a few new options: Edit Columns: You can now choose which columns are displayed. In addition to ChartMogul’s built-in attributes, you can also select from your custom attributes. You can also rearrange the order in which columns are displayed and set the default sorting of each column. Save List: Once you’ve created a list you want to reuse, you can save it to your ChartMogul account. By default, lists will be saved to the individual user’s account. If you’re an admin, you can choose to share your new list with everyone on your account. You can of course update (or delete) a list once it’s been created. Getting started with Customer Lists Need some inspiration on how to use Customer Lists? We’re pre-loading each account with a few examples, including: 🇺🇸 American customers Customers based in the USA! 🇪🇺 European customers I hope our slightly irregular definition of Europe doesn’t offend anyone! We didn’t want to do the EU as that is probably going to change next month 😢 💸 Discounted customers Any customers who has a discount. 👥 Customers with multiple subscriptions Shows you customers with more than one active subscription. 🏢 Large customers We set this to any customer paying over $1,000 per month. If you’re a B2C business, or just selling smaller deals, you’ll probably want to adjust that threshold. 🔄 Renewing in <7 days Any customer up for renewal in the next 7 days. 🚨 Past due customers Customers that are past due on their payment. 😢 Churned customers An unhappy list, everyone who was once a subscriber, but sadly cancelled. 📥 Free trials (not yet converted) All leads with a ‘free trial started at’ value, who’ve haven’t yet purchased a subscription. The above is just a selection of customer lists that we thought you may find useful, you can modify these defaults, and even delete them if you wish. Emojipedia was useful for finding the right emoji for the name :-) One more thing… We’ve taken this opportunity to also re-vamp the export functionality of the Customers section. Previously when you exported the customers list you actually got a CSV containing subscriptions (one subscription per row). We’ve kept that export option available (we don’t want to break anyone’s workflow), but now you have the option to export Customers instead, and also include either the visible columns, or all available columns (including custom attributes and tags) associated with your customers. We know how useful solid export functionality is to our power users so we’re really excited to be releasing more robust export options with this release. Get Customer Lists today Customer lists are available to all user on a paid ChartMogul plan. If you’re new to ChartMogul, start your 14-day free trial and get access to all Scale plan features. If you’re on our free Launch plan and want to upgrade to Scale in order to take advantage of the customer lists feature, then your account owner will need to head over to your billing page > click “Adjust subscription” and switch you over to the Scale plan.

[INST] Create and Share Customer Lists in ChartMogul [/INST]

When you think about the value ChartMogul provides, you probably think about the metrics we calculate and visualize. And you’re not wrong. But ChartMogul power-users know that one of our most useful features is our Customers page, where we aggregate every lead, active customer, past due customer and cancelled customer and allow you to explore their payment history. Similar to the rest of ChartMogul, users can apply filters and segments to look at specific customer views. However, until now you would have to bookmark the URL in your browser or recreate your view when you needed it again. I’m excited to share that we’ve revamped your customer lists to be customizable, savable and shareable. Using customer lists Now when you go to your Customers page, you’ll see a few new options: Edit Columns: You can now choose which columns are displayed. In addition to ChartMogul’s built-in attributes, you can also select from your custom attributes. You can also rearrange the order in which columns are displayed and set the default sorting of each column. Save List: Once you’ve created a list you want to reuse, you can save it to your ChartMogul account. By default, lists will be saved to the individual user’s account. If you’re an admin, you can choose to share your new list with everyone on your account. You can of course update (or delete) a list once it’s been created. Getting started with Customer Lists Need some inspiration on how to use Customer Lists? We’re pre-loading each account with a few examples, including: 🇺🇸 American customers Customers based in the USA! 🇪🇺 European customers I hope our slightly irregular definition of Europe doesn’t offend anyone! We didn’t want to do the EU as that is probably going to change next month 😢 💸 Discounted customers Any customers who has a discount. 👥 Customers with multiple subscriptions Shows you customers with more than one active subscription. 🏢 Large customers We set this to any customer paying over $1,000 per month. If you’re a B2C business, or just selling smaller deals, you’ll probably want to adjust that threshold. 🔄 Renewing in <7 days Any customer up for renewal in the next 7 days. 🚨 Past due customers Customers that are past due on their payment. 😢 Churned customers An unhappy list, everyone who was once a subscriber, but sadly cancelled. 📥 Free trials (not yet converted) All leads with a ‘free trial started at’ value, who’ve haven’t yet purchased a subscription. The above is just a selection of customer lists that we thought you may find useful, you can modify these defaults, and even delete them if you wish. Emojipedia was useful for finding the right emoji for the name :-) One more thing… We’ve taken this opportunity to also re-vamp the export functionality of the Customers section. Previously when you exported the customers list you actually got a CSV containing subscriptions (one subscription per row). We’ve kept that export option available (we don’t want to break anyone’s workflow), but now you have the option to export Customers instead, and also include either the visible columns, or all available columns (including custom attributes and tags) associated with your customers. We know how useful solid export functionality is to our power users so we’re really excited to be releasing more robust export options with this release. Get Customer Lists today Customer lists are available to all user on a paid ChartMogul plan. If you’re new to ChartMogul, start your 14-day free trial and get access to all Scale plan features. If you’re on our free Launch plan and want to upgrade to Scale in order to take advantage of the customer lists feature, then your account owner will need to head over to your billing page > click “Adjust subscription” and switch you over to the Scale plan.

<sys> [INST] Create and Share Customer Lists in ChartMogul [/INST] When you think about the value ChartMogul provides, you probably think about the metrics we calculate and visualize. And you’re not wrong. But ChartMogul power-users know that one of our most useful features is our Customers page, where we aggregate every lead, active customer, past due customer and cancelled customer and allow you to explore their payment history. Similar to the rest of ChartMogul, users can apply filters and segments to look at specific customer views. However, until now you would have to bookmark the URL in your browser or recreate your view when you needed it again. I’m excited to share that we’ve revamped your customer lists to be customizable, savable and shareable. Using customer lists Now when you go to your Customers page, you’ll see a few new options: Edit Columns: You can now choose which columns are displayed. In addition to ChartMogul’s built-in attributes, you can also select from your custom attributes. You can also rearrange the order in which columns are displayed and set the default sorting of each column. Save List: Once you’ve created a list you want to reuse, you can save it to your ChartMogul account. By default, lists will be saved to the individual user’s account. If you’re an admin, you can choose to share your new list with everyone on your account. You can of course update (or delete) a list once it’s been created. Getting started with Customer Lists Need some inspiration on how to use Customer Lists? We’re pre-loading each account with a few examples, including: 🇺🇸 American customers Customers based in the USA! 🇪🇺 European customers I hope our slightly irregular definition of Europe doesn’t offend anyone! We didn’t want to do the EU as that is probably going to change next month 😢 💸 Discounted customers Any customers who has a discount. 👥 Customers with multiple subscriptions Shows you customers with more than one active subscription. 🏢 Large customers We set this to any customer paying over $1,000 per month. If you’re a B2C business, or just selling smaller deals, you’ll probably want to adjust that threshold. 🔄 Renewing in <7 days Any customer up for renewal in the next 7 days. 🚨 Past due customers Customers that are past due on their payment. 😢 Churned customers An unhappy list, everyone who was once a subscriber, but sadly cancelled. 📥 Free trials (not yet converted) All leads with a ‘free trial started at’ value, who’ve haven’t yet purchased a subscription. The above is just a selection of customer lists that we thought you may find useful, you can modify these defaults, and even delete them if you wish. Emojipedia was useful for finding the right emoji for the name :-) One more thing… We’ve taken this opportunity to also re-vamp the export functionality of the Customers section. Previously when you exported the customers list you actually got a CSV containing subscriptions (one subscription per row). We’ve kept that export option available (we don’t want to break anyone’s workflow), but now you have the option to export Customers instead, and also include either the visible columns, or all available columns (including custom attributes and tags) associated with your customers. We know how useful solid export functionality is to our power users so we’re really excited to be releasing more robust export options with this release. Get Customer Lists today Customer lists are available to all user on a paid ChartMogul plan. If you’re new to ChartMogul, start your 14-day free trial and get access to all Scale plan features. If you’re on our free Launch plan and want to upgrade to Scale in order to take advantage of the customer lists feature, then your account owner will need to head over to your billing page > click “Adjust subscription” and switch you over to the Scale plan. </sys

Yes, SaaS Startup Growth Is Slowing Down. Here’s the Data. Have you recently experienced slowing growth at your SaaS startup? In all likelihood, you’re not alone. See the chart below. It shows the median monthly growth rate for SaaS startups in April 2022 (dark blue circles) compared to the previous 12-month average (light blue circles). As you can see, startup growth in April 2022 was markedly slower across the board (except for the >$1m MRR segment). This slowing growth trend continued into May. See the chart below for the projected median monthly growth rate for May (based on May’s month-to-date growth data). From looking at the data, we can see that the growth slowdown is impacting the entire SaaS industry, and isn’t company-specific. Your startup isn’t alone. Rising inflation, a cautious investment environment coupled with a slowing economy, and rising interest rates are all contributing to this slowdown. Both B2B and B2C companies have been impacted by this slowdown. Initially, in April, as consumers felt the pain (from rising inflation), they cut down on B2C spending (lower ARPA companies)… …but now, in May, even B2B growth (higher ARPA companies) is slowing down. We don’t know what the next few months hold for us. But we do know that if you focus on your customers, and serve them well, you’ll pass this storm. PS: NfX did a great post on navigating (and thriving) in this environment. Appendix: Median Monthly Growth Rate by MRR Band Growth has been slow across the board. Although, we do note that companies with MRR >$1m have been more resilient in this downturn while SaaS startups with <$10k MRR have been hit the hardest. The charts below show you the median monthly growth rate split by MRR bands. Median Monthly Growth Rate by ARPA Band As consumers felt the pain, growth initially slowed down for B2C companies i.e. those with lower ARPA. But recently, we are also seeing slowing growth in the B2B segment and startups with higher ARPAs. The charts below show you the median monthly growth rate split by ARPA bands. Calculation Methodology. We used anonymised and aggregated data from ChartMogul to calculate these aggregates. Further Reading What Is a Good Monthly Growth Rate for SaaS Startups? Churn Benchmarks and Basics Understanding and Benchmarking Your MRR Movements What Is a Good Customer Churn Rate?

[INST] Yes, SaaS Startup Growth Is Slowing Down [/INST]

Here’s the Data. Have you recently experienced slowing growth at your SaaS startup? In all likelihood, you’re not alone. See the chart below. It shows the median monthly growth rate for SaaS startups in April 2022 (dark blue circles) compared to the previous 12-month average (light blue circles). As you can see, startup growth in April 2022 was markedly slower across the board (except for the >$1m MRR segment). This slowing growth trend continued into May. See the chart below for the projected median monthly growth rate for May (based on May’s month-to-date growth data). From looking at the data, we can see that the growth slowdown is impacting the entire SaaS industry, and isn’t company-specific. Your startup isn’t alone. Rising inflation, a cautious investment environment coupled with a slowing economy, and rising interest rates are all contributing to this slowdown. Both B2B and B2C companies have been impacted by this slowdown. Initially, in April, as consumers felt the pain (from rising inflation), they cut down on B2C spending (lower ARPA companies)… …but now, in May, even B2B growth (higher ARPA companies) is slowing down. We don’t know what the next few months hold for us. But we do know that if you focus on your customers, and serve them well, you’ll pass this storm. PS: NfX did a great post on navigating (and thriving) in this environment. Appendix: Median Monthly Growth Rate by MRR Band Growth has been slow across the board. Although, we do note that companies with MRR >$1m have been more resilient in this downturn while SaaS startups with <$10k MRR have been hit the hardest. The charts below show you the median monthly growth rate split by MRR bands. Median Monthly Growth Rate by ARPA Band As consumers felt the pain, growth initially slowed down for B2C companies i.e. those with lower ARPA. But recently, we are also seeing slowing growth in the B2B segment and startups with higher ARPAs. The charts below show you the median monthly growth rate split by ARPA bands. Calculation Methodology. We used anonymised and aggregated data from ChartMogul to calculate these aggregates. Further Reading What Is a Good Monthly Growth Rate for SaaS Startups? Churn Benchmarks and Basics Understanding and Benchmarking Your MRR Movements What Is a Good Customer Churn Rate?

<sys> [INST] Yes, SaaS Startup Growth Is Slowing Down [/INST] Here’s the Data. Have you recently experienced slowing growth at your SaaS startup? In all likelihood, you’re not alone. See the chart below. It shows the median monthly growth rate for SaaS startups in April 2022 (dark blue circles) compared to the previous 12-month average (light blue circles). As you can see, startup growth in April 2022 was markedly slower across the board (except for the >$1m MRR segment). This slowing growth trend continued into May. See the chart below for the projected median monthly growth rate for May (based on May’s month-to-date growth data). From looking at the data, we can see that the growth slowdown is impacting the entire SaaS industry, and isn’t company-specific. Your startup isn’t alone. Rising inflation, a cautious investment environment coupled with a slowing economy, and rising interest rates are all contributing to this slowdown. Both B2B and B2C companies have been impacted by this slowdown. Initially, in April, as consumers felt the pain (from rising inflation), they cut down on B2C spending (lower ARPA companies)… …but now, in May, even B2B growth (higher ARPA companies) is slowing down. We don’t know what the next few months hold for us. But we do know that if you focus on your customers, and serve them well, you’ll pass this storm. PS: NfX did a great post on navigating (and thriving) in this environment. Appendix: Median Monthly Growth Rate by MRR Band Growth has been slow across the board. Although, we do note that companies with MRR >$1m have been more resilient in this downturn while SaaS startups with <$10k MRR have been hit the hardest. The charts below show you the median monthly growth rate split by MRR bands. Median Monthly Growth Rate by ARPA Band As consumers felt the pain, growth initially slowed down for B2C companies i.e. those with lower ARPA. But recently, we are also seeing slowing growth in the B2B segment and startups with higher ARPAs. The charts below show you the median monthly growth rate split by ARPA bands. Calculation Methodology. We used anonymised and aggregated data from ChartMogul to calculate these aggregates. Further Reading What Is a Good Monthly Growth Rate for SaaS Startups? Churn Benchmarks and Basics Understanding and Benchmarking Your MRR Movements What Is a Good Customer Churn Rate? </sys

SaaS Q&A: What opportunities are there in 2016 & beyond?. Opportunities emerge from problems. Since all opportunities are created through the existence of problems, it makes sense to look at where big problems still exist in the space. Of course, not all such problems can be addressed with SaaS solutions. Here are a few highly prevalent problems we see today: Healthcare is inexpensive & inaccessible Education is inefficient and expensive Creating an effective and focused workplace is tough Communication is fragmented across different channels Managing interaction with customers is a headache Implementing advanced AI algorithms in software is out of reach for SMBs Managing multiple devices, platforms, apps is a pain (for consumers) Analyzing and optimizing subscription revenue is still too much of a guessing game All of these problems present opportunities which could be solved with cloud-based software, of varying scale and reach. Let’s look at some of the emerging trends that may blow up in the next couple of years… AI as a Service Artificial Intelligence / Machine Learning is on the cusp of providing large scale, real value within technology products. Although AI machine learning algorithms in software have existed for some time now, many of the problems surrounding AI implementation have made it infeasible. For many SMBs, home-grown AI solutions are still out of reach. But there’s an answer to this: AI as a Service. Reap the benefits of machine learning in your software, by just plugging in an API-based service. Large-scale consumer SaaS acceptance The move to subscription in the consumer software market has been somewhat lacklustre. With big everyday brands now pushing into the subscription space, however, general consumer acceptance of subscriptions should improve. Personally, the percentage of my monthly outgoings that are recurring payments is already far higher than it’s ever been. Where’s the opportunity here, then? Scale. If you can offer a consumer subscription that delivers real value at an acceptable price point, go and sell it to the world! As stated by Andreessen Horowitz: The entire world is clearly going subscription-crazy. Which begs the question: which other consumer products could benefit from Mass SaaS? What if YouTube does, in fact, move ahead with its rumored $10 a month offering? What if Starbucks took its card to the next level and launched a full-fledged subscription along with their recently announced delivery service, courtesy of Postmates? Note that the “rumored” YouTube subscription mentioned here has since happened: Subscription Management Because if I now have 20+ subscriptions in my life, how do I keep track of them all, turn them on and off when I need / don’t need them?! Give me a single place to manage this — enough said. The rise of API-based SaaS, with potential for huge scale We’re starting to see the emergence of SaaS products which deliver value programatically through an API, rather than a GUI. Products like Clearbit, Twilio and Contentful all exist as purely API-based services. These services are the building blocks of the next generation of web-based software. I wrote a piece about this recently: The Rise of the API-based SaaS Platform-agnostic SaaS And no — this is does not mean “mobile first”. This means SaaS products which abstract away from the notion of “platform” and “device”, instead offering a consistent experience wherever the user needs to interact with them. See my recent writing about this here: Why Desktop is still king for B2B SaaS This answer was originally published on Quora. Read the thread in full here: What are the biggest opportunity areas for SaaS startups over the next 2-3 years?

[INST] SaaS Q&A: What opportunities are there in 2016 & beyond? [/INST]

Opportunities emerge from problems. Since all opportunities are created through the existence of problems, it makes sense to look at where big problems still exist in the space. Of course, not all such problems can be addressed with SaaS solutions. Here are a few highly prevalent problems we see today: Healthcare is inexpensive & inaccessible Education is inefficient and expensive Creating an effective and focused workplace is tough Communication is fragmented across different channels Managing interaction with customers is a headache Implementing advanced AI algorithms in software is out of reach for SMBs Managing multiple devices, platforms, apps is a pain (for consumers) Analyzing and optimizing subscription revenue is still too much of a guessing game All of these problems present opportunities which could be solved with cloud-based software, of varying scale and reach. Let’s look at some of the emerging trends that may blow up in the next couple of years… AI as a Service Artificial Intelligence / Machine Learning is on the cusp of providing large scale, real value within technology products. Although AI machine learning algorithms in software have existed for some time now, many of the problems surrounding AI implementation have made it infeasible. For many SMBs, home-grown AI solutions are still out of reach. But there’s an answer to this: AI as a Service. Reap the benefits of machine learning in your software, by just plugging in an API-based service. Large-scale consumer SaaS acceptance The move to subscription in the consumer software market has been somewhat lacklustre. With big everyday brands now pushing into the subscription space, however, general consumer acceptance of subscriptions should improve. Personally, the percentage of my monthly outgoings that are recurring payments is already far higher than it’s ever been. Where’s the opportunity here, then? Scale. If you can offer a consumer subscription that delivers real value at an acceptable price point, go and sell it to the world! As stated by Andreessen Horowitz: The entire world is clearly going subscription-crazy. Which begs the question: which other consumer products could benefit from Mass SaaS? What if YouTube does, in fact, move ahead with its rumored $10 a month offering? What if Starbucks took its card to the next level and launched a full-fledged subscription along with their recently announced delivery service, courtesy of Postmates? Note that the “rumored” YouTube subscription mentioned here has since happened: Subscription Management Because if I now have 20+ subscriptions in my life, how do I keep track of them all, turn them on and off when I need / don’t need them?! Give me a single place to manage this — enough said. The rise of API-based SaaS, with potential for huge scale We’re starting to see the emergence of SaaS products which deliver value programatically through an API, rather than a GUI. Products like Clearbit, Twilio and Contentful all exist as purely API-based services. These services are the building blocks of the next generation of web-based software. I wrote a piece about this recently: The Rise of the API-based SaaS Platform-agnostic SaaS And no — this is does not mean “mobile first”. This means SaaS products which abstract away from the notion of “platform” and “device”, instead offering a consistent experience wherever the user needs to interact with them. See my recent writing about this here: Why Desktop is still king for B2B SaaS This answer was originally published on Quora. Read the thread in full here: What are the biggest opportunity areas for SaaS startups over the next 2-3 years?

<sys> [INST] SaaS Q&A: What opportunities are there in 2016 & beyond? [/INST] Opportunities emerge from problems. Since all opportunities are created through the existence of problems, it makes sense to look at where big problems still exist in the space. Of course, not all such problems can be addressed with SaaS solutions. Here are a few highly prevalent problems we see today: Healthcare is inexpensive & inaccessible Education is inefficient and expensive Creating an effective and focused workplace is tough Communication is fragmented across different channels Managing interaction with customers is a headache Implementing advanced AI algorithms in software is out of reach for SMBs Managing multiple devices, platforms, apps is a pain (for consumers) Analyzing and optimizing subscription revenue is still too much of a guessing game All of these problems present opportunities which could be solved with cloud-based software, of varying scale and reach. Let’s look at some of the emerging trends that may blow up in the next couple of years… AI as a Service Artificial Intelligence / Machine Learning is on the cusp of providing large scale, real value within technology products. Although AI machine learning algorithms in software have existed for some time now, many of the problems surrounding AI implementation have made it infeasible. For many SMBs, home-grown AI solutions are still out of reach. But there’s an answer to this: AI as a Service. Reap the benefits of machine learning in your software, by just plugging in an API-based service. Large-scale consumer SaaS acceptance The move to subscription in the consumer software market has been somewhat lacklustre. With big everyday brands now pushing into the subscription space, however, general consumer acceptance of subscriptions should improve. Personally, the percentage of my monthly outgoings that are recurring payments is already far higher than it’s ever been. Where’s the opportunity here, then? Scale. If you can offer a consumer subscription that delivers real value at an acceptable price point, go and sell it to the world! As stated by Andreessen Horowitz: The entire world is clearly going subscription-crazy. Which begs the question: which other consumer products could benefit from Mass SaaS? What if YouTube does, in fact, move ahead with its rumored $10 a month offering? What if Starbucks took its card to the next level and launched a full-fledged subscription along with their recently announced delivery service, courtesy of Postmates? Note that the “rumored” YouTube subscription mentioned here has since happened: Subscription Management Because if I now have 20+ subscriptions in my life, how do I keep track of them all, turn them on and off when I need / don’t need them?! Give me a single place to manage this — enough said. The rise of API-based SaaS, with potential for huge scale We’re starting to see the emergence of SaaS products which deliver value programatically through an API, rather than a GUI. Products like Clearbit, Twilio and Contentful all exist as purely API-based services. These services are the building blocks of the next generation of web-based software. I wrote a piece about this recently: The Rise of the API-based SaaS Platform-agnostic SaaS And no — this is does not mean “mobile first”. This means SaaS products which abstract away from the notion of “platform” and “device”, instead offering a consistent experience wherever the user needs to interact with them. See my recent writing about this here: Why Desktop is still king for B2B SaaS This answer was originally published on Quora. Read the thread in full here: What are the biggest opportunity areas for SaaS startups over the next 2-3 years? </sys

SaaS Q&A: What are the benefits of a SaaS business model?. Here are some of the benefits enjoyed by a company that adopts a SaaS business model. Lower cost One version of the service that is accessed by all customers from one infrastructure: simple deployment and maintenance. There’s no need to manufacture anything. And the more customers you get, the “cheaper” it is to operate the infrastructure. With each new customer, the average cost of operation is reduced for everyone. This is called a lower Total Cost of Ownership. The economies of scale for SaaS are a huge inherent benefit. Accessibility and Scalability All a customer needs is the internet and a browser. Boom. And that network can support any growing number of users. This means your company can easily scale to accommodate the number of your customers — but also that your service can easily accommodate your customers’ growth as well. As they get bigger, add more users, have more customers of their own, your SaaS solution scales to their needs. Optimization and Customer Loyalty Since you maintain the service from one infrastructure, your product development cycles can be super short. You can push out updates and fixes immediately and at whatever frequency your team can handle. Such rapid improvement and responsiveness leads to higher customer loyalty. Recurring Revenue model SaaS has compounding revenue, if customer churn is monitored and managed accordingly. This relieves the stress of constant customer acquisition — and the cost of acquiring them, too. To learn all the ins and outs of churn, take a look at the Ultimate Churn Rate Cheat Sheet. Building off the customer loyalty point above, current customers are a huge source of revenue growth. Loyal customers will not only stay on board but upgrade their package, especially as you continue to enhance your offering. This is called Expansion business. Measurability and Predictability SaaS businesses also have a huge advantage in the data they capture about their users: How their customers use the service, what they do in the app and when they do it, when they cancel the service altogether, etc. You can use this data to optimize your offering, easily experimenting thanks to shorter product development cycles. You can optimize your pricing and packaging, or your customer success efforts. All of this makes it easier to satisfy and retain customers — as well as target future ones. The SaaS business model lends itself to a set of effective metrics that measure performance and growth. Insights from these metrics can inform product development, process changes, sales strategy, customer success, future planning, and investment decisions. Here are some of the key SaaS metrics we focus on at ChartMogul: Monthly Recurring Revenue (MRR) Customer Churn Rate Net MRR Churn Rate Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Customer Lifetime Value (LTV) If you’d like detailed definitions of each of these, plus more, check out the Ultimate SaaS Metrics Cheat Sheet. The recurring revenue model is proven to generate and sustain long-term profits. Business growth is more predictable, and the model provides foresight into future cash flow which allows you to predict future revenue growth and profit margins. Predictable growth and reliable projections like this are very attractive to investors, who have swarmed to the SaaS space. Of course the benefit of steady and predictable revenue is that you can reinvest cash into your own growth, which keeps the whole cycle going. This answer was originally published on Quora. View the original thread here: What are the inherent benefits of SaaS as a business model? Share and follow! NEW on @ChartMogul — SaaS Q&A: What are the benefits of a #SaaS business model? https://t.co/wOdUfjJS6b #startups pic.twitter.com/qMrrrM7nq1 — ChartMogul (@ChartMogul) April 14, 2016

[INST] SaaS Q&A: What are the benefits of a SaaS business model? [/INST]

Here are some of the benefits enjoyed by a company that adopts a SaaS business model. Lower cost One version of the service that is accessed by all customers from one infrastructure: simple deployment and maintenance. There’s no need to manufacture anything. And the more customers you get, the “cheaper” it is to operate the infrastructure. With each new customer, the average cost of operation is reduced for everyone. This is called a lower Total Cost of Ownership. The economies of scale for SaaS are a huge inherent benefit. Accessibility and Scalability All a customer needs is the internet and a browser. Boom. And that network can support any growing number of users. This means your company can easily scale to accommodate the number of your customers — but also that your service can easily accommodate your customers’ growth as well. As they get bigger, add more users, have more customers of their own, your SaaS solution scales to their needs. Optimization and Customer Loyalty Since you maintain the service from one infrastructure, your product development cycles can be super short. You can push out updates and fixes immediately and at whatever frequency your team can handle. Such rapid improvement and responsiveness leads to higher customer loyalty. Recurring Revenue model SaaS has compounding revenue, if customer churn is monitored and managed accordingly. This relieves the stress of constant customer acquisition — and the cost of acquiring them, too. To learn all the ins and outs of churn, take a look at the Ultimate Churn Rate Cheat Sheet. Building off the customer loyalty point above, current customers are a huge source of revenue growth. Loyal customers will not only stay on board but upgrade their package, especially as you continue to enhance your offering. This is called Expansion business. Measurability and Predictability SaaS businesses also have a huge advantage in the data they capture about their users: How their customers use the service, what they do in the app and when they do it, when they cancel the service altogether, etc. You can use this data to optimize your offering, easily experimenting thanks to shorter product development cycles. You can optimize your pricing and packaging, or your customer success efforts. All of this makes it easier to satisfy and retain customers — as well as target future ones. The SaaS business model lends itself to a set of effective metrics that measure performance and growth. Insights from these metrics can inform product development, process changes, sales strategy, customer success, future planning, and investment decisions. Here are some of the key SaaS metrics we focus on at ChartMogul: Monthly Recurring Revenue (MRR) Customer Churn Rate Net MRR Churn Rate Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Customer Lifetime Value (LTV) If you’d like detailed definitions of each of these, plus more, check out the Ultimate SaaS Metrics Cheat Sheet. The recurring revenue model is proven to generate and sustain long-term profits. Business growth is more predictable, and the model provides foresight into future cash flow which allows you to predict future revenue growth and profit margins. Predictable growth and reliable projections like this are very attractive to investors, who have swarmed to the SaaS space. Of course the benefit of steady and predictable revenue is that you can reinvest cash into your own growth, which keeps the whole cycle going. This answer was originally published on Quora. View the original thread here: What are the inherent benefits of SaaS as a business model? Share and follow! NEW on @ChartMogul — SaaS Q&A: What are the benefits of a #SaaS business model? https://t.co/wOdUfjJS6b #startups pic.twitter.com/qMrrrM7nq1 — ChartMogul (@ChartMogul) April 14, 2016

<sys> [INST] SaaS Q&A: What are the benefits of a SaaS business model? [/INST] Here are some of the benefits enjoyed by a company that adopts a SaaS business model. Lower cost One version of the service that is accessed by all customers from one infrastructure: simple deployment and maintenance. There’s no need to manufacture anything. And the more customers you get, the “cheaper” it is to operate the infrastructure. With each new customer, the average cost of operation is reduced for everyone. This is called a lower Total Cost of Ownership. The economies of scale for SaaS are a huge inherent benefit. Accessibility and Scalability All a customer needs is the internet and a browser. Boom. And that network can support any growing number of users. This means your company can easily scale to accommodate the number of your customers — but also that your service can easily accommodate your customers’ growth as well. As they get bigger, add more users, have more customers of their own, your SaaS solution scales to their needs. Optimization and Customer Loyalty Since you maintain the service from one infrastructure, your product development cycles can be super short. You can push out updates and fixes immediately and at whatever frequency your team can handle. Such rapid improvement and responsiveness leads to higher customer loyalty. Recurring Revenue model SaaS has compounding revenue, if customer churn is monitored and managed accordingly. This relieves the stress of constant customer acquisition — and the cost of acquiring them, too. To learn all the ins and outs of churn, take a look at the Ultimate Churn Rate Cheat Sheet. Building off the customer loyalty point above, current customers are a huge source of revenue growth. Loyal customers will not only stay on board but upgrade their package, especially as you continue to enhance your offering. This is called Expansion business. Measurability and Predictability SaaS businesses also have a huge advantage in the data they capture about their users: How their customers use the service, what they do in the app and when they do it, when they cancel the service altogether, etc. You can use this data to optimize your offering, easily experimenting thanks to shorter product development cycles. You can optimize your pricing and packaging, or your customer success efforts. All of this makes it easier to satisfy and retain customers — as well as target future ones. The SaaS business model lends itself to a set of effective metrics that measure performance and growth. Insights from these metrics can inform product development, process changes, sales strategy, customer success, future planning, and investment decisions. Here are some of the key SaaS metrics we focus on at ChartMogul: Monthly Recurring Revenue (MRR) Customer Churn Rate Net MRR Churn Rate Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Customer Lifetime Value (LTV) If you’d like detailed definitions of each of these, plus more, check out the Ultimate SaaS Metrics Cheat Sheet. The recurring revenue model is proven to generate and sustain long-term profits. Business growth is more predictable, and the model provides foresight into future cash flow which allows you to predict future revenue growth and profit margins. Predictable growth and reliable projections like this are very attractive to investors, who have swarmed to the SaaS space. Of course the benefit of steady and predictable revenue is that you can reinvest cash into your own growth, which keeps the whole cycle going. This answer was originally published on Quora. View the original thread here: What are the inherent benefits of SaaS as a business model? Share and follow! NEW on @ChartMogul — SaaS Q&A: What are the benefits of a #SaaS business model? https://t.co/wOdUfjJS6b #startups pic.twitter.com/qMrrrM7nq1 — ChartMogul (@ChartMogul) April 14, 2016 </sys

5 of the Hottest Startups at Web Summit 2015. 1. Branch Metrics https://branch.io Branch Metrics offers a solution for mobile deep linking that’s both easy to implement and works across all platforms. This means that, for example, a user who’s been sent a link to some content inside an app can be taken to the App Store, complete the app download and then still directed to the right point inside the app after install. Deep linking really addresses the problem that mobile apps introduce – of exposing content inside what are essentially closed-off sandboxes. And to complement the deep linking functionality, Branch Metrics includes full analytics and insights into how the deep links are performing. Deep-linking can be used in many scenarios to improve the mobile experience. Source: branch.io Branch Metrics raised a $15M Series A round earlier this year, and seem to be on track to change the way that apps are used globally. 2. Fidel https://fidelapp.com Fidel puts more power in the hands of small retail businesses. Source: fidelapp.com Fidel is a platform for businesses to better engage with their customers, through a smart app which enables a customer loyalty program, customer relationship management features and analytics to better understand customer behaviour. The product aims to make the kind of “big data” retail analytics (that have so far only been accessible to the huge players in the space) available to any business, of any size. 3. Gigmit https://www.gigmit.com It was great to see a representative of the Berlin startup scene! Gigmit is a tool for live music promoters, clubs, festivals and artists to connect with each other and do magic. Marcus Rüssel, founder of Gigmit, worked with clubs and bands in the past, and saw a problem when it came to the booking process for live music events. Gigmit already works with a range of promoters, artists, and festivals. Source: gigmit.com 4. FATMAP http://fatmap.com MOBILE 3D SKI MAPS. FOR EVERY SKIER, FOR EVERY ADVENTURE. For the ski-enthusiast out there, the folks at FATMAP are really taking the ski experience to a new level. Fatmap is a consumer SaaS-solution that uses high-resolution stereoscopic satellite imagery to create finely-detailed 3d maps of mountainous areas. Combining this with piste information, users are able to preview and explore ski runs ahead of time as well as tracking and replaying their runs at the end of the day. The team raised a £350k seed round at the end of last year, and are based in Bristol, UK (and of course, the french alps). Bring on the ski season! 5. Connecterra http://www.connecterra.io CONNECTING THE ANALOG TO UNDERSTAND EVERYTHING ON EARTH. The Amsterdam-based Connecterra team are due to receive a lot more attention after winning the Best Pitch (ALPHA) competition at Web Summit. The Connecterra product extends the Internet of Things category to the farming industry, providing a smart Dairy Activity Monitor which is worn by cows in order to enable a more data-driven approach to dairy farming. Using this data, Connecterra is able to help optimize breeding cycles, improve milk production per animal and give insights on the grazing time of each animal. I’m not sure about the term “Fitbit for cows”, but the Connecterra team’s pitch inspired many. The product is currently in testing, and the team are raising funds to launch at scale in the coming months. source: websummit.com

[INST] 5 of the Hottest Startups at Web Summit 2015 [/INST]

1. Branch Metrics https://branch.io Branch Metrics offers a solution for mobile deep linking that’s both easy to implement and works across all platforms. This means that, for example, a user who’s been sent a link to some content inside an app can be taken to the App Store, complete the app download and then still directed to the right point inside the app after install. Deep linking really addresses the problem that mobile apps introduce – of exposing content inside what are essentially closed-off sandboxes. And to complement the deep linking functionality, Branch Metrics includes full analytics and insights into how the deep links are performing. Deep-linking can be used in many scenarios to improve the mobile experience. Source: branch.io Branch Metrics raised a $15M Series A round earlier this year, and seem to be on track to change the way that apps are used globally. 2. Fidel https://fidelapp.com Fidel puts more power in the hands of small retail businesses. Source: fidelapp.com Fidel is a platform for businesses to better engage with their customers, through a smart app which enables a customer loyalty program, customer relationship management features and analytics to better understand customer behaviour. The product aims to make the kind of “big data” retail analytics (that have so far only been accessible to the huge players in the space) available to any business, of any size. 3. Gigmit https://www.gigmit.com It was great to see a representative of the Berlin startup scene! Gigmit is a tool for live music promoters, clubs, festivals and artists to connect with each other and do magic. Marcus Rüssel, founder of Gigmit, worked with clubs and bands in the past, and saw a problem when it came to the booking process for live music events. Gigmit already works with a range of promoters, artists, and festivals. Source: gigmit.com 4. FATMAP http://fatmap.com MOBILE 3D SKI MAPS. FOR EVERY SKIER, FOR EVERY ADVENTURE. For the ski-enthusiast out there, the folks at FATMAP are really taking the ski experience to a new level. Fatmap is a consumer SaaS-solution that uses high-resolution stereoscopic satellite imagery to create finely-detailed 3d maps of mountainous areas. Combining this with piste information, users are able to preview and explore ski runs ahead of time as well as tracking and replaying their runs at the end of the day. The team raised a £350k seed round at the end of last year, and are based in Bristol, UK (and of course, the french alps). Bring on the ski season! 5. Connecterra http://www.connecterra.io CONNECTING THE ANALOG TO UNDERSTAND EVERYTHING ON EARTH. The Amsterdam-based Connecterra team are due to receive a lot more attention after winning the Best Pitch (ALPHA) competition at Web Summit. The Connecterra product extends the Internet of Things category to the farming industry, providing a smart Dairy Activity Monitor which is worn by cows in order to enable a more data-driven approach to dairy farming. Using this data, Connecterra is able to help optimize breeding cycles, improve milk production per animal and give insights on the grazing time of each animal. I’m not sure about the term “Fitbit for cows”, but the Connecterra team’s pitch inspired many. The product is currently in testing, and the team are raising funds to launch at scale in the coming months. source: websummit.com

<sys> [INST] 5 of the Hottest Startups at Web Summit 2015 [/INST] 1. Branch Metrics https://branch.io Branch Metrics offers a solution for mobile deep linking that’s both easy to implement and works across all platforms. This means that, for example, a user who’s been sent a link to some content inside an app can be taken to the App Store, complete the app download and then still directed to the right point inside the app after install. Deep linking really addresses the problem that mobile apps introduce – of exposing content inside what are essentially closed-off sandboxes. And to complement the deep linking functionality, Branch Metrics includes full analytics and insights into how the deep links are performing. Deep-linking can be used in many scenarios to improve the mobile experience. Source: branch.io Branch Metrics raised a $15M Series A round earlier this year, and seem to be on track to change the way that apps are used globally. 2. Fidel https://fidelapp.com Fidel puts more power in the hands of small retail businesses. Source: fidelapp.com Fidel is a platform for businesses to better engage with their customers, through a smart app which enables a customer loyalty program, customer relationship management features and analytics to better understand customer behaviour. The product aims to make the kind of “big data” retail analytics (that have so far only been accessible to the huge players in the space) available to any business, of any size. 3. Gigmit https://www.gigmit.com It was great to see a representative of the Berlin startup scene! Gigmit is a tool for live music promoters, clubs, festivals and artists to connect with each other and do magic. Marcus Rüssel, founder of Gigmit, worked with clubs and bands in the past, and saw a problem when it came to the booking process for live music events. Gigmit already works with a range of promoters, artists, and festivals. Source: gigmit.com 4. FATMAP http://fatmap.com MOBILE 3D SKI MAPS. FOR EVERY SKIER, FOR EVERY ADVENTURE. For the ski-enthusiast out there, the folks at FATMAP are really taking the ski experience to a new level. Fatmap is a consumer SaaS-solution that uses high-resolution stereoscopic satellite imagery to create finely-detailed 3d maps of mountainous areas. Combining this with piste information, users are able to preview and explore ski runs ahead of time as well as tracking and replaying their runs at the end of the day. The team raised a £350k seed round at the end of last year, and are based in Bristol, UK (and of course, the french alps). Bring on the ski season! 5. Connecterra http://www.connecterra.io CONNECTING THE ANALOG TO UNDERSTAND EVERYTHING ON EARTH. The Amsterdam-based Connecterra team are due to receive a lot more attention after winning the Best Pitch (ALPHA) competition at Web Summit. The Connecterra product extends the Internet of Things category to the farming industry, providing a smart Dairy Activity Monitor which is worn by cows in order to enable a more data-driven approach to dairy farming. Using this data, Connecterra is able to help optimize breeding cycles, improve milk production per animal and give insights on the grazing time of each animal. I’m not sure about the term “Fitbit for cows”, but the Connecterra team’s pitch inspired many. The product is currently in testing, and the team are raising funds to launch at scale in the coming months. source: websummit.com </sys

$83,334 and Beyond! 4 Takeaways From SaaStr Annual 2021. The decision to sponsor and attend SaaStr Annual 2021 with thousands of in-person participants was challenging to make this year. We’re still in the middle of a pandemic, for one. And in the case of the ChartMogul team that has been entirely remote (with teams in practically every time zone), traveling to San Mateo requires a lot of coordination. But all challenges aside, we are incredibly grateful for how it turned out and what we learned in the process. We were able to meet the fantastic SaaS community, learn from inspiring businesses, and enjoy the in-person teamwork we’ve been operating without for so long. SaaStr 2021 was the most successful SaaStr we’ve had to date. Here are our four main takeaways from the event. SaaS is a tightly-knit community “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” – Dale Carnegie. Selling software often means trying to have your voice heard online: content, emails, ads, demos, calls. The online world can be overwhelming. SaaStr allowed us to stop and listen. The in-person event allowed us to meet with peers, exchange ideas, celebrate success, and even commiserate. All of you in SaaS have a unique perspective that we want to learn from. There’s nothing like an in-person conference to check in on customers, partners, and other SaaS enthusiasts. Highlights for us include getting the Mogul.io community together for dinner, another dinner with the SaaSync team that has been a fantastic integration partner, and hundreds of conversations with ChartMogul users and other SaaS businesses. https://twitter.com/nick_franklin/status/1443474149905559557?s=21 https://twitter.com/Nick_Franklin/status/1442906758498816003 There are thousands of SaaS businesses out there. But at SaaStr, it feels like a tightly-knit community. If you want to be successful in business, you can’t do it alone. Revenue data is often a black box Most of the attendees at SaaStr remembered us from the sparkly $83,334 on our shirts. We’ve been asked: “Is it how much money your product can save me?” or “Is this how much MRR you’re making?” The answer to both of these questions is no. Our goal is to help grow your business and the shirt symbolizes a $1M business. If you want to be a $1M business, $83,334 is the MRR you need to do so. https://twitter.com/carlyjchalmers/status/1442885423777214469?s=21 To grow your business, revenue metrics should be top of mind. At SaaStr, we realized that not everyone has a reliable way to track subscription metrics. And if they do, their metrics are cosmetic and don’t provide enough insight to base decisions on. After all, revenue data can be a complex thing to master and it is not always easy to have it readily available. We believe you should be able to track your MRR movements, get real-time MRR updates, and see the complete picture of how your subscriptions evolve over time. These insights allow you to make better decisions for your business. At SaaStr we had many great conversations about growing SaaS businesses. We discussed formulating compensation plans, adjusting marketing spend, evaluating hiring plans, and exploring new growth levers. At the core of growth is understanding your subscription metrics. Team building was long overdue ChartMogul grew to 60 people in the last years but many of us never met in person. Even though we have 3 main locations (Berlin, Toronto, Seoul), we operate as a distributed team. Team building was long overdue! Even though it was just a small piece of the team that was able to join SaaStr, it made a big difference. We got to experience amazing teamwork in action and got through 3 days of working in the boiling sun together. https://twitter.com/biancatwilk/status/1443022754568032256?s=21 https://twitter.com/cayahere/status/1443246452373819397 Conference ROI is hard to calculate Sponsoring a conference is an expensive and time-consuming endeavor. The cost of the sponsorship itself, travel and accommodation for the team, time invested in planning, it all adds up to a significant sum. And if your sales cycle is long, it’s hard to understand the impact right away. Conference ROI is in many ways intangible. “Of course we measure leads generated and how those leads convert to sales pipeline and paying customers. But that alone doesn’t represent the value of sponsoring a show. There’s brand awareness, new hire recruitment, customer feedback, and employee engagement — all critical aspects of running a successful SaaS business.” – Sara Archer, Director of Sales and Marketing If you want to find out even more about our experience sponsoring a booth at SaaStr and how we define success, keep an eye out on our Twitter and the Slidebean YouTube channel.

[INST] $83,334 and Beyond! 4 Takeaways From SaaStr Annual 2021 [/INST]

The decision to sponsor and attend SaaStr Annual 2021 with thousands of in-person participants was challenging to make this year. We’re still in the middle of a pandemic, for one. And in the case of the ChartMogul team that has been entirely remote (with teams in practically every time zone), traveling to San Mateo requires a lot of coordination. But all challenges aside, we are incredibly grateful for how it turned out and what we learned in the process. We were able to meet the fantastic SaaS community, learn from inspiring businesses, and enjoy the in-person teamwork we’ve been operating without for so long. SaaStr 2021 was the most successful SaaStr we’ve had to date. Here are our four main takeaways from the event. SaaS is a tightly-knit community “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” – Dale Carnegie. Selling software often means trying to have your voice heard online: content, emails, ads, demos, calls. The online world can be overwhelming. SaaStr allowed us to stop and listen. The in-person event allowed us to meet with peers, exchange ideas, celebrate success, and even commiserate. All of you in SaaS have a unique perspective that we want to learn from. There’s nothing like an in-person conference to check in on customers, partners, and other SaaS enthusiasts. Highlights for us include getting the Mogul.io community together for dinner, another dinner with the SaaSync team that has been a fantastic integration partner, and hundreds of conversations with ChartMogul users and other SaaS businesses. https://twitter.com/nick_franklin/status/1443474149905559557?s=21 https://twitter.com/Nick_Franklin/status/1442906758498816003 There are thousands of SaaS businesses out there. But at SaaStr, it feels like a tightly-knit community. If you want to be successful in business, you can’t do it alone. Revenue data is often a black box Most of the attendees at SaaStr remembered us from the sparkly $83,334 on our shirts. We’ve been asked: “Is it how much money your product can save me?” or “Is this how much MRR you’re making?” The answer to both of these questions is no. Our goal is to help grow your business and the shirt symbolizes a $1M business. If you want to be a $1M business, $83,334 is the MRR you need to do so. https://twitter.com/carlyjchalmers/status/1442885423777214469?s=21 To grow your business, revenue metrics should be top of mind. At SaaStr, we realized that not everyone has a reliable way to track subscription metrics. And if they do, their metrics are cosmetic and don’t provide enough insight to base decisions on. After all, revenue data can be a complex thing to master and it is not always easy to have it readily available. We believe you should be able to track your MRR movements, get real-time MRR updates, and see the complete picture of how your subscriptions evolve over time. These insights allow you to make better decisions for your business. At SaaStr we had many great conversations about growing SaaS businesses. We discussed formulating compensation plans, adjusting marketing spend, evaluating hiring plans, and exploring new growth levers. At the core of growth is understanding your subscription metrics. Team building was long overdue ChartMogul grew to 60 people in the last years but many of us never met in person. Even though we have 3 main locations (Berlin, Toronto, Seoul), we operate as a distributed team. Team building was long overdue! Even though it was just a small piece of the team that was able to join SaaStr, it made a big difference. We got to experience amazing teamwork in action and got through 3 days of working in the boiling sun together. https://twitter.com/biancatwilk/status/1443022754568032256?s=21 https://twitter.com/cayahere/status/1443246452373819397 Conference ROI is hard to calculate Sponsoring a conference is an expensive and time-consuming endeavor. The cost of the sponsorship itself, travel and accommodation for the team, time invested in planning, it all adds up to a significant sum. And if your sales cycle is long, it’s hard to understand the impact right away. Conference ROI is in many ways intangible. “Of course we measure leads generated and how those leads convert to sales pipeline and paying customers. But that alone doesn’t represent the value of sponsoring a show. There’s brand awareness, new hire recruitment, customer feedback, and employee engagement — all critical aspects of running a successful SaaS business.” – Sara Archer, Director of Sales and Marketing If you want to find out even more about our experience sponsoring a booth at SaaStr and how we define success, keep an eye out on our Twitter and the Slidebean YouTube channel.

<sys> [INST] $83,334 and Beyond! 4 Takeaways From SaaStr Annual 2021 [/INST] The decision to sponsor and attend SaaStr Annual 2021 with thousands of in-person participants was challenging to make this year. We’re still in the middle of a pandemic, for one. And in the case of the ChartMogul team that has been entirely remote (with teams in practically every time zone), traveling to San Mateo requires a lot of coordination. But all challenges aside, we are incredibly grateful for how it turned out and what we learned in the process. We were able to meet the fantastic SaaS community, learn from inspiring businesses, and enjoy the in-person teamwork we’ve been operating without for so long. SaaStr 2021 was the most successful SaaStr we’ve had to date. Here are our four main takeaways from the event. SaaS is a tightly-knit community “You can make more friends in two months by becoming interested in other people than you can in two years by trying to get other people interested in you.” – Dale Carnegie. Selling software often means trying to have your voice heard online: content, emails, ads, demos, calls. The online world can be overwhelming. SaaStr allowed us to stop and listen. The in-person event allowed us to meet with peers, exchange ideas, celebrate success, and even commiserate. All of you in SaaS have a unique perspective that we want to learn from. There’s nothing like an in-person conference to check in on customers, partners, and other SaaS enthusiasts. Highlights for us include getting the Mogul.io community together for dinner, another dinner with the SaaSync team that has been a fantastic integration partner, and hundreds of conversations with ChartMogul users and other SaaS businesses. https://twitter.com/nick_franklin/status/1443474149905559557?s=21 https://twitter.com/Nick_Franklin/status/1442906758498816003 There are thousands of SaaS businesses out there. But at SaaStr, it feels like a tightly-knit community. If you want to be successful in business, you can’t do it alone. Revenue data is often a black box Most of the attendees at SaaStr remembered us from the sparkly $83,334 on our shirts. We’ve been asked: “Is it how much money your product can save me?” or “Is this how much MRR you’re making?” The answer to both of these questions is no. Our goal is to help grow your business and the shirt symbolizes a $1M business. If you want to be a $1M business, $83,334 is the MRR you need to do so. https://twitter.com/carlyjchalmers/status/1442885423777214469?s=21 To grow your business, revenue metrics should be top of mind. At SaaStr, we realized that not everyone has a reliable way to track subscription metrics. And if they do, their metrics are cosmetic and don’t provide enough insight to base decisions on. After all, revenue data can be a complex thing to master and it is not always easy to have it readily available. We believe you should be able to track your MRR movements, get real-time MRR updates, and see the complete picture of how your subscriptions evolve over time. These insights allow you to make better decisions for your business. At SaaStr we had many great conversations about growing SaaS businesses. We discussed formulating compensation plans, adjusting marketing spend, evaluating hiring plans, and exploring new growth levers. At the core of growth is understanding your subscription metrics. Team building was long overdue ChartMogul grew to 60 people in the last years but many of us never met in person. Even though we have 3 main locations (Berlin, Toronto, Seoul), we operate as a distributed team. Team building was long overdue! Even though it was just a small piece of the team that was able to join SaaStr, it made a big difference. We got to experience amazing teamwork in action and got through 3 days of working in the boiling sun together. https://twitter.com/biancatwilk/status/1443022754568032256?s=21 https://twitter.com/cayahere/status/1443246452373819397 Conference ROI is hard to calculate Sponsoring a conference is an expensive and time-consuming endeavor. The cost of the sponsorship itself, travel and accommodation for the team, time invested in planning, it all adds up to a significant sum. And if your sales cycle is long, it’s hard to understand the impact right away. Conference ROI is in many ways intangible. “Of course we measure leads generated and how those leads convert to sales pipeline and paying customers. But that alone doesn’t represent the value of sponsoring a show. There’s brand awareness, new hire recruitment, customer feedback, and employee engagement — all critical aspects of running a successful SaaS business.” – Sara Archer, Director of Sales and Marketing If you want to find out even more about our experience sponsoring a booth at SaaStr and how we define success, keep an eye out on our Twitter and the Slidebean YouTube channel. </sys

What Is a Good Customer Churn Rate?. Customer churn rate, also known as logo churn rate is a key indicator of the health of your SaaS business. At a high level, it gives you the rate at which your customers are canceling their subscriptions. A high customer churn rate can be deadly for your business. In this post, we analyze, anonymized and aggregated data from ChartMogul to find out what is a good customer churn rate for a SaaS subscription business. We also discuss why it is important to track it and the underlying reasons behind a high churn rate. Monthly Customer Churn Rate by ARPA & MRR Bands The chart below shows the median customer churn by a company’s average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA within your ChartMogul Dashboard. As you’ll notice, the customer churn rate for the median company varies by the ARPA band you are in. For companies with ARPA per month in the range of $0-10, the median monthly customer churn rate is 6.8%. It decreases to 1.9% as your ARPA per month increases to >$500. In addition, to the median, the chart below also shows the 25th and 75th percentiles of the customer churn rate. The trend remains the same. For companies with lower ARPA, the rate is higher while for companies with higher ARPA it is lower. The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases. Below is the data for monthly customer churn rate split by monthly recurring revenue (MRR) band. As you’ll notice, the monthly Customer churn rate of a median company is higher in the initial stages of the business (6.8% for <$10k MRR, 4.6% for those with MRR b/w $10-50k). As more companies find product-market fit and hone into their customer category the churn reduces. Down to about 3.5% per month. Although it then stabilizes at that level and doesn’t reduce even when a company grows. The chart below also shows you the 25th and 75th percentiles of the customer churn rate by MRR band. The best companies should target a monthly churn rate <2%. If you have managed to bring down your customer churn to that level, you are already among the top 25% of all SaaS companies. Instead of focusing on bringing down churn further, there may be more important things to tackle. Why Should You Care About Customer Churn Rate? It is helpful because it gives you: Quick feedback — compared to other cohort-based metrics such as Net or Gross dollar/customer retention, churn gives you immediate feedback. You can run tests on your platform and then see feedback in a few days or months. Easy to measure — the formula for customer churn rate is straightforward and easy to measure. Also, it is relatively hard to game this metric. If your customer churn rate is high that means that i) You’ll not be able to compound your user base and hence your revenue, and ii) The money you just spent to acquire your customers i.e. the acquisition cost (CAC) goes down the drain sooner. Churn is deadly. A monthly churn rate of 5% corresponds to an annual churn rate of 46%. That means you’ll lose close to half your existing customers in the next year if you don’t contain your churn. Here is a helpful table that helps you look at yearly churn corresponding to a particular monthly churn number. The formula we use to get the annual churn rate from monthly churn rate is the following: Annual Churn Rate = (1- (1-Monthly Churn Rate)12) Why Do You Lose Customers, Anyway? Customers leave you primarily because they don’t see value in your product. The underlying reason as to why they don’t see the value could be threefold: They haven’t been onboarded well — They can’t get to the ‘Aha’ moment where they get to see the magic of your product. Your product is too complex to understand or they are not sure of what job your product accomplishes. Support docs are not easy to understand. Customers are searching for an answer and they just can’t get it. When trying out a new product what you don’t have is time/patience. Price doesn’t correlate with value — even if some of your customers see the value in your product, they can get more value for the same price elsewhere. Hence they churn. Wrong customer segment — Maybe they weren’t the right customer segment who should be using your product in the first place. Your marketing strategy needs to change in this case. And probably you’ll need to fire some of your customers too. Unrelated to your product value, there is also some Involuntary churn that happens. This is because of card expiry, declined payments, etc. Customers also leave because they get acquired, and their new home no longer uses your product. Consider digging deeper to get the real reason behind the churn. A way to do this is to talk to your customers. Find out why they churned? Was it because of your pricing or was it because your product was missing a key feature. And then test your hypotheses (eg. features, pricing, plan). Repeat. Calculation Methodology. Monthly Customer churn rate is calculated as the ratio of the number of customers who churned in the month (excluding any customers who both joined & churned in the same month) / Total number of customers at the start of the month. We calculate the aggregates over a 3 month period (Nov ‘21, Dec ‘21 & Jan ‘22). We use the standard B2B churn formula for all companies for easier comparability. Further Reading What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements What Is a Good Monthly Growth Rate for SaaS Startups? SaaS Benchmarks Report

[INST] What Is a Good Customer Churn Rate? [/INST]

Customer churn rate, also known as logo churn rate is a key indicator of the health of your SaaS business. At a high level, it gives you the rate at which your customers are canceling their subscriptions. A high customer churn rate can be deadly for your business. In this post, we analyze, anonymized and aggregated data from ChartMogul to find out what is a good customer churn rate for a SaaS subscription business. We also discuss why it is important to track it and the underlying reasons behind a high churn rate. Monthly Customer Churn Rate by ARPA & MRR Bands The chart below shows the median customer churn by a company’s average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA within your ChartMogul Dashboard. As you’ll notice, the customer churn rate for the median company varies by the ARPA band you are in. For companies with ARPA per month in the range of $0-10, the median monthly customer churn rate is 6.8%. It decreases to 1.9% as your ARPA per month increases to >$500. In addition, to the median, the chart below also shows the 25th and 75th percentiles of the customer churn rate. The trend remains the same. For companies with lower ARPA, the rate is higher while for companies with higher ARPA it is lower. The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases. Below is the data for monthly customer churn rate split by monthly recurring revenue (MRR) band. As you’ll notice, the monthly Customer churn rate of a median company is higher in the initial stages of the business (6.8% for <$10k MRR, 4.6% for those with MRR b/w $10-50k). As more companies find product-market fit and hone into their customer category the churn reduces. Down to about 3.5% per month. Although it then stabilizes at that level and doesn’t reduce even when a company grows. The chart below also shows you the 25th and 75th percentiles of the customer churn rate by MRR band. The best companies should target a monthly churn rate <2%. If you have managed to bring down your customer churn to that level, you are already among the top 25% of all SaaS companies. Instead of focusing on bringing down churn further, there may be more important things to tackle. Why Should You Care About Customer Churn Rate? It is helpful because it gives you: Quick feedback — compared to other cohort-based metrics such as Net or Gross dollar/customer retention, churn gives you immediate feedback. You can run tests on your platform and then see feedback in a few days or months. Easy to measure — the formula for customer churn rate is straightforward and easy to measure. Also, it is relatively hard to game this metric. If your customer churn rate is high that means that i) You’ll not be able to compound your user base and hence your revenue, and ii) The money you just spent to acquire your customers i.e. the acquisition cost (CAC) goes down the drain sooner. Churn is deadly. A monthly churn rate of 5% corresponds to an annual churn rate of 46%. That means you’ll lose close to half your existing customers in the next year if you don’t contain your churn. Here is a helpful table that helps you look at yearly churn corresponding to a particular monthly churn number. The formula we use to get the annual churn rate from monthly churn rate is the following: Annual Churn Rate = (1- (1-Monthly Churn Rate)12) Why Do You Lose Customers, Anyway? Customers leave you primarily because they don’t see value in your product. The underlying reason as to why they don’t see the value could be threefold: They haven’t been onboarded well — They can’t get to the ‘Aha’ moment where they get to see the magic of your product. Your product is too complex to understand or they are not sure of what job your product accomplishes. Support docs are not easy to understand. Customers are searching for an answer and they just can’t get it. When trying out a new product what you don’t have is time/patience. Price doesn’t correlate with value — even if some of your customers see the value in your product, they can get more value for the same price elsewhere. Hence they churn. Wrong customer segment — Maybe they weren’t the right customer segment who should be using your product in the first place. Your marketing strategy needs to change in this case. And probably you’ll need to fire some of your customers too. Unrelated to your product value, there is also some Involuntary churn that happens. This is because of card expiry, declined payments, etc. Customers also leave because they get acquired, and their new home no longer uses your product. Consider digging deeper to get the real reason behind the churn. A way to do this is to talk to your customers. Find out why they churned? Was it because of your pricing or was it because your product was missing a key feature. And then test your hypotheses (eg. features, pricing, plan). Repeat. Calculation Methodology. Monthly Customer churn rate is calculated as the ratio of the number of customers who churned in the month (excluding any customers who both joined & churned in the same month) / Total number of customers at the start of the month. We calculate the aggregates over a 3 month period (Nov ‘21, Dec ‘21 & Jan ‘22). We use the standard B2B churn formula for all companies for easier comparability. Further Reading What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements What Is a Good Monthly Growth Rate for SaaS Startups? SaaS Benchmarks Report

<sys> [INST] What Is a Good Customer Churn Rate? [/INST] Customer churn rate, also known as logo churn rate is a key indicator of the health of your SaaS business. At a high level, it gives you the rate at which your customers are canceling their subscriptions. A high customer churn rate can be deadly for your business. In this post, we analyze, anonymized and aggregated data from ChartMogul to find out what is a good customer churn rate for a SaaS subscription business. We also discuss why it is important to track it and the underlying reasons behind a high churn rate. Monthly Customer Churn Rate by ARPA & MRR Bands The chart below shows the median customer churn by a company’s average revenue per account (ARPA) per month. As a reminder, ARPA is the average revenue per account i.e. average MRR across all your customers. It is also known as ARPU or APRC. You can find your ARPA within your ChartMogul Dashboard. As you’ll notice, the customer churn rate for the median company varies by the ARPA band you are in. For companies with ARPA per month in the range of $0-10, the median monthly customer churn rate is 6.8%. It decreases to 1.9% as your ARPA per month increases to >$500. In addition, to the median, the chart below also shows the 25th and 75th percentiles of the customer churn rate. The trend remains the same. For companies with lower ARPA, the rate is higher while for companies with higher ARPA it is lower. The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases. Below is the data for monthly customer churn rate split by monthly recurring revenue (MRR) band. As you’ll notice, the monthly Customer churn rate of a median company is higher in the initial stages of the business (6.8% for <$10k MRR, 4.6% for those with MRR b/w $10-50k). As more companies find product-market fit and hone into their customer category the churn reduces. Down to about 3.5% per month. Although it then stabilizes at that level and doesn’t reduce even when a company grows. The chart below also shows you the 25th and 75th percentiles of the customer churn rate by MRR band. The best companies should target a monthly churn rate <2%. If you have managed to bring down your customer churn to that level, you are already among the top 25% of all SaaS companies. Instead of focusing on bringing down churn further, there may be more important things to tackle. Why Should You Care About Customer Churn Rate? It is helpful because it gives you: Quick feedback — compared to other cohort-based metrics such as Net or Gross dollar/customer retention, churn gives you immediate feedback. You can run tests on your platform and then see feedback in a few days or months. Easy to measure — the formula for customer churn rate is straightforward and easy to measure. Also, it is relatively hard to game this metric. If your customer churn rate is high that means that i) You’ll not be able to compound your user base and hence your revenue, and ii) The money you just spent to acquire your customers i.e. the acquisition cost (CAC) goes down the drain sooner. Churn is deadly. A monthly churn rate of 5% corresponds to an annual churn rate of 46%. That means you’ll lose close to half your existing customers in the next year if you don’t contain your churn. Here is a helpful table that helps you look at yearly churn corresponding to a particular monthly churn number. The formula we use to get the annual churn rate from monthly churn rate is the following: Annual Churn Rate = (1- (1-Monthly Churn Rate)12) Why Do You Lose Customers, Anyway? Customers leave you primarily because they don’t see value in your product. The underlying reason as to why they don’t see the value could be threefold: They haven’t been onboarded well — They can’t get to the ‘Aha’ moment where they get to see the magic of your product. Your product is too complex to understand or they are not sure of what job your product accomplishes. Support docs are not easy to understand. Customers are searching for an answer and they just can’t get it. When trying out a new product what you don’t have is time/patience. Price doesn’t correlate with value — even if some of your customers see the value in your product, they can get more value for the same price elsewhere. Hence they churn. Wrong customer segment — Maybe they weren’t the right customer segment who should be using your product in the first place. Your marketing strategy needs to change in this case. And probably you’ll need to fire some of your customers too. Unrelated to your product value, there is also some Involuntary churn that happens. This is because of card expiry, declined payments, etc. Customers also leave because they get acquired, and their new home no longer uses your product. Consider digging deeper to get the real reason behind the churn. A way to do this is to talk to your customers. Find out why they churned? Was it because of your pricing or was it because your product was missing a key feature. And then test your hypotheses (eg. features, pricing, plan). Repeat. Calculation Methodology. Monthly Customer churn rate is calculated as the ratio of the number of customers who churned in the month (excluding any customers who both joined & churned in the same month) / Total number of customers at the start of the month. We calculate the aggregates over a 3 month period (Nov ‘21, Dec ‘21 & Jan ‘22). We use the standard B2B churn formula for all companies for easier comparability. Further Reading What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements What Is a Good Monthly Growth Rate for SaaS Startups? SaaS Benchmarks Report </sys

Moving ChartMogul to AWS and Kubernetes. A few months ago, we retired our last pieces of infrastructure on DigitalOcean, marking our migration to AWS as complete. Our journey was not your regular AWS migration as it involved moving our infrastructure from classic VMs to containers orchestrated by Kubernetes. In a series of articles, we will share our experiences about: Our journey to AWS EKS (Kubernetes managed service). Some of the most critical roadblocks we encountered. Our current stack and tooling. Our infrastructure plans going forward, hoping they can be helpful to the entire community. Life with DigitalOcean Since our inception in 2014 and up to mid-2021, our entire infrastructure has run on DigitalOcean droplets (self-managed cloud virtual machines). We needed a cloud provider to get us off the ground quickly, reliably, and cost-effectively. DigitalOcean made a lot of sense and was a great choice. We are where we are because of them. That choice gave us the freedom to focus on product building without worrying about scalability and infrastructure complexity – aspects that typically kick in at a later stage. Every aspect of our infrastructure was provisioned, configured, and managed in-house. We used configuration management and Infrastructure as Code tools (Saltstack and Terraform) to manage things. We kept growing over the years, and by 2019 we found ourselves looking at a fleet of somewhere around 50 machines in constant need of management, software updates, security patches, and so on. And with new projects in our pipeline, we expected our compute power needs to double by the end of 2020. Why move and why now? As great of a choice DigitalOcean was, our organic growth was pushing the boundaries of our setup over the years. We faced challenges with multiple areas, some fixable and preventable, some not. Various failures Ad-hoc unannounced maintenance windows that suddenly broke production. Hardware failures on several occasions, affecting our primary – replica database setup (e.g., droplets entering a ”live migration state to other hardware machines” without notice, meaning 1-2 hours of downtime for that droplet.) Unexplained networking issues with latency between our machines that DigitalOcean’s support team never cleared out (this was critical for our Postgres read-replicas lag, Redis instances, and HA in general). AMS2 region deprecation Our DigitalOcean region (AMS2) was announced as “soon to be retired”, meaning limited support. We could not secure additional resources on-demand, and executing simple tasks usually meant long planning and wasted resources. Simple things such as upgrading a Postgres version and provisioning a new machine to perform a task were becoming impossible to do. Limited hardware choices Being in the subscription analytics space means data-intensive operations, large volumes, and the ability to often scale accordingly. Modern machines with more extensive hardware resources were only available in other regions. Network performance degradation was a frequent occurrence, and we soon realized that migrating to a different region was our best bet. Lack of modern cloud features and managed services The volume of operational work to maintain our infrastructure to keep up with the growth rate (and deal with tech debt simultaneously) increased. We had to take a hard look at our setup and understand whether moving into a different DigitalOcean region or a new cloud provider was the best choice. Should we stay or should we go? We started looking into the benefits of staying with DigitalOcean and simply moving to a new region – a more leisurely, quicker, cheaper, less painful option. But at the same time, we treated this move as an opportunity to modernize parts of our stack in service of expected user growth and an increased rate of progress. By the end of our assessment, we realized that specific must-have requirements would be hard to achieve by staying and simply switching regions. The most important ones were: Flexibility in auto-scaling compute resources. Managed databases. Provisioning of resources based on temporary usage. Low(er) latency. Service interoperability. Container-based infrastructure with Kubernetes orchestration. This list of requirements along with the challenges listed in the previous section tipped the scale in favor of switching providers. Why AWS? Choosing a new cloud provider to power ChartMogul infrastructure was a long journey. We researched the market and discovered many tradeoffs and advantages a new provider could bring to the table. Our options were Amazon Web Services (AWS), Google Cloud (GCP), and Azure. Ultimately, we decided to go with AWS. We list some of the main reasons below. Team expertise We were already using some AWS services in production (e.g., S3 for storing incremental Postgres backups). More importantly, a few of our engineers had prior professional experience using various AWS services extensively in production systems. Scalability We can ramp AWS instances up or down at the push of a button. We can instantly provision resources like RDS databases and compute resources temporarily. We can iterate through experiments and proof of concepts quickly. The flexibility and scalability of Kubernetes node pools backed up by EC2 auto-scaling are hard to beat. Data security and compliance Data security has always been top of mind. Over the years, AWS security capabilities have grown substantially. The number of new services AWS developed around data security covers most of our needs in the container/Kubernetes space. They play nicely with well-established services such as private VPC isolation, fine-grain control of policies, and IAM roles. Compliance-wise, we plan to become SOC II certified asap, and we found AWS compliance programs to be an advantage that can help fast-track that journey. Managed services Postgres is at the heart of what we do at ChartMogul, and we’ve typically spent a lot of time actively managing our database fleet of machines to support our growth. High availability and reliability of databases were becoming growing concerns, so we decided to evaluate multiple offers from major cloud providers with managed PostgreSQL. AWS RDS was the clear winner. Managed Kubernetes was another major factor to consider, and this was head to head with Google Cloud (GCP). Google’s managed Kubernetes (GKE) felt better than what AWS had at the time, but comparing RDS to CloudSQL wasn’t close feature-wise. Nowadays it seems that AWS is catching up with EKS however; We benefit from great RDS features such as snapshots flexibility, backup durability (with SLA), read replicas for Postgres, painless upgrades, dedicated IOPS, Cloudwatch metrics, Performance Insights, and the list goes on. The insane number of AWS services At the time of writing, AWS offers over 200 services. Most of them give you the ability to get instant access to managed services from so many areas like compute, databases, data analytics, data warehousing, serverless, and storage. Our engineering teams can now leverage top-notch integrations to solve core problems quickly and prioritize buy vs. build where it makes sense. Disaster Recovery AWS cloud is an essential part of our Disaster Recovery plan. That’s because instances are easy to spin up, we can promote RDS read-replicas to primary at the click of a button, snapshots are a breeze, we can host in multiple regions, and we have a top-notch integration with our IaC tool of choice. AWS Credits We secured $100k worth of credits through the AWS Startup program. We were able to plan, test, and complete our migration without considerable expenses. Migration to AWS Our migration from DigitalOcean to AWS was a ten-month-long journey. The entire effort was backed up by volunteers from all of our engineering teams and driven by a DevOps engineer, a backend engineer, and our head of engineering. Some things involved trial & error. We tried multiple ways of: Moving data from Postgres to RDS with near-zero downtime. Moving our app and services from VM-based architecture to containerized ones in Kubernetes. Fundamentally changing the way we deploy. A perfect plan was in place, and everything looked good to go on paper, but we learned the hard way that things will not always go to plan. At times, our near-zero downtime migration goal was at serious risk, and back to the drawing board we went. Perseverance, drive, and fantastic team effort helped us overcome the challenges we faced. Careful planning did wonders too; Given our capacity, we established early on that breaking down the actual migration into three stages (or days) would work best. Week prior D-day Start Postgres replication from DigitalOcean to RDS instances. Review our AWS future production infrastructure. Configuration of secrets (AWS Parameter Store). Ensure CI/CD pipelines are ready to deploy to our new Kubernetes clusters. The day before D-day Prepare our AWS temp webhook recorder infrastructure (losing events during our migration was not an option). Move some data in advance (e.g., DigitalOcean Spaces to S3). Update all Parameter Store secrets to production values. Prepare DNS changes. Set all Kubernetes deployments to zero pods to prevent services from accessing production data during migration. D-day: Flicking the switch Redirect all webhooks to AWS temporary recorder. Stop all the services on DigitalOcean. Wait for Postgres replication to catch up on the latest updates. Compare DigitalOcean and RDS Postgres data (to ensure integrity and replication catch up). Drop the subscription from RDS to Postgres running in DigitalOcean. Create RDS read replicas. Update our Parameter Store secrets with new RDS endpoints and secrets. Deploy to Kubernetes and restart PgBouncer to load new configurations. Switch DNS records for app.chartmogul.com to AWS. At this point, we were running our production workload on the shiny new infrastructure! We finished the whole thing in 10 hours (we initially estimated 8 hours – not too bad). Challenges with AWS The biggest struggle was with the DMS service (AWS managed service to move databases into RDS). It was not as easy to use as advertised. In our case with Postgres, it was not helpful. Eventually, we developed a custom way of moving data into AWS. We also came to the hard realization that moving databases with zero downtime to AWS with webhook support is complicated. We developed a custom approach to support this setup. More on these custom approaches in future articles. Future articles in the series Look out for future articles documenting our migration journey from DigitalOcean to AWS. We will touch on topics such as: Why we chose Kubernetes to power ChartMogul. How we migrated PostgreSQL to RDS. How we migrated our Rails app to Kubernetes. How we set up an IPSEC tunnel to AWS VPC.

[INST] Moving ChartMogul to AWS and Kubernetes [/INST]

A few months ago, we retired our last pieces of infrastructure on DigitalOcean, marking our migration to AWS as complete. Our journey was not your regular AWS migration as it involved moving our infrastructure from classic VMs to containers orchestrated by Kubernetes. In a series of articles, we will share our experiences about: Our journey to AWS EKS (Kubernetes managed service). Some of the most critical roadblocks we encountered. Our current stack and tooling. Our infrastructure plans going forward, hoping they can be helpful to the entire community. Life with DigitalOcean Since our inception in 2014 and up to mid-2021, our entire infrastructure has run on DigitalOcean droplets (self-managed cloud virtual machines). We needed a cloud provider to get us off the ground quickly, reliably, and cost-effectively. DigitalOcean made a lot of sense and was a great choice. We are where we are because of them. That choice gave us the freedom to focus on product building without worrying about scalability and infrastructure complexity – aspects that typically kick in at a later stage. Every aspect of our infrastructure was provisioned, configured, and managed in-house. We used configuration management and Infrastructure as Code tools (Saltstack and Terraform) to manage things. We kept growing over the years, and by 2019 we found ourselves looking at a fleet of somewhere around 50 machines in constant need of management, software updates, security patches, and so on. And with new projects in our pipeline, we expected our compute power needs to double by the end of 2020. Why move and why now? As great of a choice DigitalOcean was, our organic growth was pushing the boundaries of our setup over the years. We faced challenges with multiple areas, some fixable and preventable, some not. Various failures Ad-hoc unannounced maintenance windows that suddenly broke production. Hardware failures on several occasions, affecting our primary – replica database setup (e.g., droplets entering a ”live migration state to other hardware machines” without notice, meaning 1-2 hours of downtime for that droplet.) Unexplained networking issues with latency between our machines that DigitalOcean’s support team never cleared out (this was critical for our Postgres read-replicas lag, Redis instances, and HA in general). AMS2 region deprecation Our DigitalOcean region (AMS2) was announced as “soon to be retired”, meaning limited support. We could not secure additional resources on-demand, and executing simple tasks usually meant long planning and wasted resources. Simple things such as upgrading a Postgres version and provisioning a new machine to perform a task were becoming impossible to do. Limited hardware choices Being in the subscription analytics space means data-intensive operations, large volumes, and the ability to often scale accordingly. Modern machines with more extensive hardware resources were only available in other regions. Network performance degradation was a frequent occurrence, and we soon realized that migrating to a different region was our best bet. Lack of modern cloud features and managed services The volume of operational work to maintain our infrastructure to keep up with the growth rate (and deal with tech debt simultaneously) increased. We had to take a hard look at our setup and understand whether moving into a different DigitalOcean region or a new cloud provider was the best choice. Should we stay or should we go? We started looking into the benefits of staying with DigitalOcean and simply moving to a new region – a more leisurely, quicker, cheaper, less painful option. But at the same time, we treated this move as an opportunity to modernize parts of our stack in service of expected user growth and an increased rate of progress. By the end of our assessment, we realized that specific must-have requirements would be hard to achieve by staying and simply switching regions. The most important ones were: Flexibility in auto-scaling compute resources. Managed databases. Provisioning of resources based on temporary usage. Low(er) latency. Service interoperability. Container-based infrastructure with Kubernetes orchestration. This list of requirements along with the challenges listed in the previous section tipped the scale in favor of switching providers. Why AWS? Choosing a new cloud provider to power ChartMogul infrastructure was a long journey. We researched the market and discovered many tradeoffs and advantages a new provider could bring to the table. Our options were Amazon Web Services (AWS), Google Cloud (GCP), and Azure. Ultimately, we decided to go with AWS. We list some of the main reasons below. Team expertise We were already using some AWS services in production (e.g., S3 for storing incremental Postgres backups). More importantly, a few of our engineers had prior professional experience using various AWS services extensively in production systems. Scalability We can ramp AWS instances up or down at the push of a button. We can instantly provision resources like RDS databases and compute resources temporarily. We can iterate through experiments and proof of concepts quickly. The flexibility and scalability of Kubernetes node pools backed up by EC2 auto-scaling are hard to beat. Data security and compliance Data security has always been top of mind. Over the years, AWS security capabilities have grown substantially. The number of new services AWS developed around data security covers most of our needs in the container/Kubernetes space. They play nicely with well-established services such as private VPC isolation, fine-grain control of policies, and IAM roles. Compliance-wise, we plan to become SOC II certified asap, and we found AWS compliance programs to be an advantage that can help fast-track that journey. Managed services Postgres is at the heart of what we do at ChartMogul, and we’ve typically spent a lot of time actively managing our database fleet of machines to support our growth. High availability and reliability of databases were becoming growing concerns, so we decided to evaluate multiple offers from major cloud providers with managed PostgreSQL. AWS RDS was the clear winner. Managed Kubernetes was another major factor to consider, and this was head to head with Google Cloud (GCP). Google’s managed Kubernetes (GKE) felt better than what AWS had at the time, but comparing RDS to CloudSQL wasn’t close feature-wise. Nowadays it seems that AWS is catching up with EKS however; We benefit from great RDS features such as snapshots flexibility, backup durability (with SLA), read replicas for Postgres, painless upgrades, dedicated IOPS, Cloudwatch metrics, Performance Insights, and the list goes on. The insane number of AWS services At the time of writing, AWS offers over 200 services. Most of them give you the ability to get instant access to managed services from so many areas like compute, databases, data analytics, data warehousing, serverless, and storage. Our engineering teams can now leverage top-notch integrations to solve core problems quickly and prioritize buy vs. build where it makes sense. Disaster Recovery AWS cloud is an essential part of our Disaster Recovery plan. That’s because instances are easy to spin up, we can promote RDS read-replicas to primary at the click of a button, snapshots are a breeze, we can host in multiple regions, and we have a top-notch integration with our IaC tool of choice. AWS Credits We secured $100k worth of credits through the AWS Startup program. We were able to plan, test, and complete our migration without considerable expenses. Migration to AWS Our migration from DigitalOcean to AWS was a ten-month-long journey. The entire effort was backed up by volunteers from all of our engineering teams and driven by a DevOps engineer, a backend engineer, and our head of engineering. Some things involved trial & error. We tried multiple ways of: Moving data from Postgres to RDS with near-zero downtime. Moving our app and services from VM-based architecture to containerized ones in Kubernetes. Fundamentally changing the way we deploy. A perfect plan was in place, and everything looked good to go on paper, but we learned the hard way that things will not always go to plan. At times, our near-zero downtime migration goal was at serious risk, and back to the drawing board we went. Perseverance, drive, and fantastic team effort helped us overcome the challenges we faced. Careful planning did wonders too; Given our capacity, we established early on that breaking down the actual migration into three stages (or days) would work best. Week prior D-day Start Postgres replication from DigitalOcean to RDS instances. Review our AWS future production infrastructure. Configuration of secrets (AWS Parameter Store). Ensure CI/CD pipelines are ready to deploy to our new Kubernetes clusters. The day before D-day Prepare our AWS temp webhook recorder infrastructure (losing events during our migration was not an option). Move some data in advance (e.g., DigitalOcean Spaces to S3). Update all Parameter Store secrets to production values. Prepare DNS changes. Set all Kubernetes deployments to zero pods to prevent services from accessing production data during migration. D-day: Flicking the switch Redirect all webhooks to AWS temporary recorder. Stop all the services on DigitalOcean. Wait for Postgres replication to catch up on the latest updates. Compare DigitalOcean and RDS Postgres data (to ensure integrity and replication catch up). Drop the subscription from RDS to Postgres running in DigitalOcean. Create RDS read replicas. Update our Parameter Store secrets with new RDS endpoints and secrets. Deploy to Kubernetes and restart PgBouncer to load new configurations. Switch DNS records for app.chartmogul.com to AWS. At this point, we were running our production workload on the shiny new infrastructure! We finished the whole thing in 10 hours (we initially estimated 8 hours – not too bad). Challenges with AWS The biggest struggle was with the DMS service (AWS managed service to move databases into RDS). It was not as easy to use as advertised. In our case with Postgres, it was not helpful. Eventually, we developed a custom way of moving data into AWS. We also came to the hard realization that moving databases with zero downtime to AWS with webhook support is complicated. We developed a custom approach to support this setup. More on these custom approaches in future articles. Future articles in the series Look out for future articles documenting our migration journey from DigitalOcean to AWS. We will touch on topics such as: Why we chose Kubernetes to power ChartMogul. How we migrated PostgreSQL to RDS. How we migrated our Rails app to Kubernetes. How we set up an IPSEC tunnel to AWS VPC.

<sys> [INST] Moving ChartMogul to AWS and Kubernetes [/INST] A few months ago, we retired our last pieces of infrastructure on DigitalOcean, marking our migration to AWS as complete. Our journey was not your regular AWS migration as it involved moving our infrastructure from classic VMs to containers orchestrated by Kubernetes. In a series of articles, we will share our experiences about: Our journey to AWS EKS (Kubernetes managed service). Some of the most critical roadblocks we encountered. Our current stack and tooling. Our infrastructure plans going forward, hoping they can be helpful to the entire community. Life with DigitalOcean Since our inception in 2014 and up to mid-2021, our entire infrastructure has run on DigitalOcean droplets (self-managed cloud virtual machines). We needed a cloud provider to get us off the ground quickly, reliably, and cost-effectively. DigitalOcean made a lot of sense and was a great choice. We are where we are because of them. That choice gave us the freedom to focus on product building without worrying about scalability and infrastructure complexity – aspects that typically kick in at a later stage. Every aspect of our infrastructure was provisioned, configured, and managed in-house. We used configuration management and Infrastructure as Code tools (Saltstack and Terraform) to manage things. We kept growing over the years, and by 2019 we found ourselves looking at a fleet of somewhere around 50 machines in constant need of management, software updates, security patches, and so on. And with new projects in our pipeline, we expected our compute power needs to double by the end of 2020. Why move and why now? As great of a choice DigitalOcean was, our organic growth was pushing the boundaries of our setup over the years. We faced challenges with multiple areas, some fixable and preventable, some not. Various failures Ad-hoc unannounced maintenance windows that suddenly broke production. Hardware failures on several occasions, affecting our primary – replica database setup (e.g., droplets entering a ”live migration state to other hardware machines” without notice, meaning 1-2 hours of downtime for that droplet.) Unexplained networking issues with latency between our machines that DigitalOcean’s support team never cleared out (this was critical for our Postgres read-replicas lag, Redis instances, and HA in general). AMS2 region deprecation Our DigitalOcean region (AMS2) was announced as “soon to be retired”, meaning limited support. We could not secure additional resources on-demand, and executing simple tasks usually meant long planning and wasted resources. Simple things such as upgrading a Postgres version and provisioning a new machine to perform a task were becoming impossible to do. Limited hardware choices Being in the subscription analytics space means data-intensive operations, large volumes, and the ability to often scale accordingly. Modern machines with more extensive hardware resources were only available in other regions. Network performance degradation was a frequent occurrence, and we soon realized that migrating to a different region was our best bet. Lack of modern cloud features and managed services The volume of operational work to maintain our infrastructure to keep up with the growth rate (and deal with tech debt simultaneously) increased. We had to take a hard look at our setup and understand whether moving into a different DigitalOcean region or a new cloud provider was the best choice. Should we stay or should we go? We started looking into the benefits of staying with DigitalOcean and simply moving to a new region – a more leisurely, quicker, cheaper, less painful option. But at the same time, we treated this move as an opportunity to modernize parts of our stack in service of expected user growth and an increased rate of progress. By the end of our assessment, we realized that specific must-have requirements would be hard to achieve by staying and simply switching regions. The most important ones were: Flexibility in auto-scaling compute resources. Managed databases. Provisioning of resources based on temporary usage. Low(er) latency. Service interoperability. Container-based infrastructure with Kubernetes orchestration. This list of requirements along with the challenges listed in the previous section tipped the scale in favor of switching providers. Why AWS? Choosing a new cloud provider to power ChartMogul infrastructure was a long journey. We researched the market and discovered many tradeoffs and advantages a new provider could bring to the table. Our options were Amazon Web Services (AWS), Google Cloud (GCP), and Azure. Ultimately, we decided to go with AWS. We list some of the main reasons below. Team expertise We were already using some AWS services in production (e.g., S3 for storing incremental Postgres backups). More importantly, a few of our engineers had prior professional experience using various AWS services extensively in production systems. Scalability We can ramp AWS instances up or down at the push of a button. We can instantly provision resources like RDS databases and compute resources temporarily. We can iterate through experiments and proof of concepts quickly. The flexibility and scalability of Kubernetes node pools backed up by EC2 auto-scaling are hard to beat. Data security and compliance Data security has always been top of mind. Over the years, AWS security capabilities have grown substantially. The number of new services AWS developed around data security covers most of our needs in the container/Kubernetes space. They play nicely with well-established services such as private VPC isolation, fine-grain control of policies, and IAM roles. Compliance-wise, we plan to become SOC II certified asap, and we found AWS compliance programs to be an advantage that can help fast-track that journey. Managed services Postgres is at the heart of what we do at ChartMogul, and we’ve typically spent a lot of time actively managing our database fleet of machines to support our growth. High availability and reliability of databases were becoming growing concerns, so we decided to evaluate multiple offers from major cloud providers with managed PostgreSQL. AWS RDS was the clear winner. Managed Kubernetes was another major factor to consider, and this was head to head with Google Cloud (GCP). Google’s managed Kubernetes (GKE) felt better than what AWS had at the time, but comparing RDS to CloudSQL wasn’t close feature-wise. Nowadays it seems that AWS is catching up with EKS however; We benefit from great RDS features such as snapshots flexibility, backup durability (with SLA), read replicas for Postgres, painless upgrades, dedicated IOPS, Cloudwatch metrics, Performance Insights, and the list goes on. The insane number of AWS services At the time of writing, AWS offers over 200 services. Most of them give you the ability to get instant access to managed services from so many areas like compute, databases, data analytics, data warehousing, serverless, and storage. Our engineering teams can now leverage top-notch integrations to solve core problems quickly and prioritize buy vs. build where it makes sense. Disaster Recovery AWS cloud is an essential part of our Disaster Recovery plan. That’s because instances are easy to spin up, we can promote RDS read-replicas to primary at the click of a button, snapshots are a breeze, we can host in multiple regions, and we have a top-notch integration with our IaC tool of choice. AWS Credits We secured $100k worth of credits through the AWS Startup program. We were able to plan, test, and complete our migration without considerable expenses. Migration to AWS Our migration from DigitalOcean to AWS was a ten-month-long journey. The entire effort was backed up by volunteers from all of our engineering teams and driven by a DevOps engineer, a backend engineer, and our head of engineering. Some things involved trial & error. We tried multiple ways of: Moving data from Postgres to RDS with near-zero downtime. Moving our app and services from VM-based architecture to containerized ones in Kubernetes. Fundamentally changing the way we deploy. A perfect plan was in place, and everything looked good to go on paper, but we learned the hard way that things will not always go to plan. At times, our near-zero downtime migration goal was at serious risk, and back to the drawing board we went. Perseverance, drive, and fantastic team effort helped us overcome the challenges we faced. Careful planning did wonders too; Given our capacity, we established early on that breaking down the actual migration into three stages (or days) would work best. Week prior D-day Start Postgres replication from DigitalOcean to RDS instances. Review our AWS future production infrastructure. Configuration of secrets (AWS Parameter Store). Ensure CI/CD pipelines are ready to deploy to our new Kubernetes clusters. The day before D-day Prepare our AWS temp webhook recorder infrastructure (losing events during our migration was not an option). Move some data in advance (e.g., DigitalOcean Spaces to S3). Update all Parameter Store secrets to production values. Prepare DNS changes. Set all Kubernetes deployments to zero pods to prevent services from accessing production data during migration. D-day: Flicking the switch Redirect all webhooks to AWS temporary recorder. Stop all the services on DigitalOcean. Wait for Postgres replication to catch up on the latest updates. Compare DigitalOcean and RDS Postgres data (to ensure integrity and replication catch up). Drop the subscription from RDS to Postgres running in DigitalOcean. Create RDS read replicas. Update our Parameter Store secrets with new RDS endpoints and secrets. Deploy to Kubernetes and restart PgBouncer to load new configurations. Switch DNS records for app.chartmogul.com to AWS. At this point, we were running our production workload on the shiny new infrastructure! We finished the whole thing in 10 hours (we initially estimated 8 hours – not too bad). Challenges with AWS The biggest struggle was with the DMS service (AWS managed service to move databases into RDS). It was not as easy to use as advertised. In our case with Postgres, it was not helpful. Eventually, we developed a custom way of moving data into AWS. We also came to the hard realization that moving databases with zero downtime to AWS with webhook support is complicated. We developed a custom approach to support this setup. More on these custom approaches in future articles. Future articles in the series Look out for future articles documenting our migration journey from DigitalOcean to AWS. We will touch on topics such as: Why we chose Kubernetes to power ChartMogul. How we migrated PostgreSQL to RDS. How we migrated our Rails app to Kubernetes. How we set up an IPSEC tunnel to AWS VPC. </sys

ChartMogul 2016 year in review. Some stats Team growth – up 54% in 2016 (from 13 to 20 people) Most popular blog post – The Rise of the API-based SaaS (19,700 opens) Most popular podcast – SaaS Open Mic 06: Alex MacCaw – CEO, Clearbit (1,200 plays) Our NPS scores – 70 (Q1), 45 (Q3), 53 (Q4) MRR email notifications sent – up 321% in 2016 (from 1.5M to 5M) January One of the key themes in product development over the past year has been our focus on building a world-class set of segmentation features. The initial segmentation feature launch came in January, and throughout 2016 we released multiple updates. I think we’ve ended up with a really solid set of tools for giving greater insights into customer data. February We were excited to be a sponsor at the second SaaStr Annual conference in San Francisco. It was an exceptional SaaS conference and we’ll be there again in February 2017. Ed put together this photo journal of the event. March We released a few improvements to the segmentation features (relative time and attributes explorer). We also released a Zapier integration to make it easier to import customer attributes for use with Segmentation. April We released a Google Sheets app, so users can use our Import, Enrichment and Metrics APIs without needing to write any code. We also launched a refreshed Help Center in April. Our customer success team invested a lot of time this year in making sure we have solid documentation and setup guides for all parts of the app. May Another big theme of 2016 was our shift from being a product that works with a handful of third-party billing solutions to a more open platform, with a comprehensive set of APIs, developer documentation and client libraries. This puts more control in the hands of our users, enables new use cases and makes ChartMogul useful to a wider audience. Read the Import API announcement or head over to the developer hub. June In June we published a dedicated Resources section to make available all the cheat sheets, podcasts and other materials we’ve authored over the past couple of years. July We released our first official API client library in July, Ruby. This was followed by Node and PHP, with more clients planned. August Nearly the whole team was in Berlin at the start of August. We planned to take a team photo outdoors with a nice cityscape in the background, but a storm forced us to take shelter in this subway station, which turned out to have great lighting. September We launched the merge customers feature to enable customer records coming from multiple data sources to be consolidated into unified customer profiles. The “European SaaS event of the year” award has to go to SaaStock, which took place in Dublin. We were excited to be a sponsor, and it was a lot of fun meeting with so many of our customers and people from the wider SaaS community. Read our roundup of SaaStock here. October In October we launched our partnership with subscription billing provider, cleverbridge. One of my favourite accomplishments of the year was our recent enhancements to Segmentation. The update makes comparing segments much more tactile, and you can even assign a colour to your segments! November We released a new set of charts so users can track leads and free trials, trial-to-paid conversion rates and sales cycle length. These features really come to life when combined with the Segmentation features. Support for ChargeOver and Chargebee also went live in November. Check out the new integrations page for an up-to-date list of available integrations. December Our friends over at Geckoboard released a native ChartMogul integration. The integration makes showing your subscription metrics on a live TV dashboard just a few clicks away. Happy Holidays! That just about sums things up for 2016. We have ambitious plans for 2017, including a really great product roadmap that we’re incredibly excited about delivering for our customers. From the team at ChartMogul, we’d like to wish all of our customers, partners and friends, Happy Holidays and a joyful and prosperous 2017! 🚀

[INST] ChartMogul 2016 year in review [/INST]

Some stats Team growth – up 54% in 2016 (from 13 to 20 people) Most popular blog post – The Rise of the API-based SaaS (19,700 opens) Most popular podcast – SaaS Open Mic 06: Alex MacCaw – CEO, Clearbit (1,200 plays) Our NPS scores – 70 (Q1), 45 (Q3), 53 (Q4) MRR email notifications sent – up 321% in 2016 (from 1.5M to 5M) January One of the key themes in product development over the past year has been our focus on building a world-class set of segmentation features. The initial segmentation feature launch came in January, and throughout 2016 we released multiple updates. I think we’ve ended up with a really solid set of tools for giving greater insights into customer data. February We were excited to be a sponsor at the second SaaStr Annual conference in San Francisco. It was an exceptional SaaS conference and we’ll be there again in February 2017. Ed put together this photo journal of the event. March We released a few improvements to the segmentation features (relative time and attributes explorer). We also released a Zapier integration to make it easier to import customer attributes for use with Segmentation. April We released a Google Sheets app, so users can use our Import, Enrichment and Metrics APIs without needing to write any code. We also launched a refreshed Help Center in April. Our customer success team invested a lot of time this year in making sure we have solid documentation and setup guides for all parts of the app. May Another big theme of 2016 was our shift from being a product that works with a handful of third-party billing solutions to a more open platform, with a comprehensive set of APIs, developer documentation and client libraries. This puts more control in the hands of our users, enables new use cases and makes ChartMogul useful to a wider audience. Read the Import API announcement or head over to the developer hub. June In June we published a dedicated Resources section to make available all the cheat sheets, podcasts and other materials we’ve authored over the past couple of years. July We released our first official API client library in July, Ruby. This was followed by Node and PHP, with more clients planned. August Nearly the whole team was in Berlin at the start of August. We planned to take a team photo outdoors with a nice cityscape in the background, but a storm forced us to take shelter in this subway station, which turned out to have great lighting. September We launched the merge customers feature to enable customer records coming from multiple data sources to be consolidated into unified customer profiles. The “European SaaS event of the year” award has to go to SaaStock, which took place in Dublin. We were excited to be a sponsor, and it was a lot of fun meeting with so many of our customers and people from the wider SaaS community. Read our roundup of SaaStock here. October In October we launched our partnership with subscription billing provider, cleverbridge. One of my favourite accomplishments of the year was our recent enhancements to Segmentation. The update makes comparing segments much more tactile, and you can even assign a colour to your segments! November We released a new set of charts so users can track leads and free trials, trial-to-paid conversion rates and sales cycle length. These features really come to life when combined with the Segmentation features. Support for ChargeOver and Chargebee also went live in November. Check out the new integrations page for an up-to-date list of available integrations. December Our friends over at Geckoboard released a native ChartMogul integration. The integration makes showing your subscription metrics on a live TV dashboard just a few clicks away. Happy Holidays! That just about sums things up for 2016. We have ambitious plans for 2017, including a really great product roadmap that we’re incredibly excited about delivering for our customers. From the team at ChartMogul, we’d like to wish all of our customers, partners and friends, Happy Holidays and a joyful and prosperous 2017! 🚀

<sys> [INST] ChartMogul 2016 year in review [/INST] Some stats Team growth – up 54% in 2016 (from 13 to 20 people) Most popular blog post – The Rise of the API-based SaaS (19,700 opens) Most popular podcast – SaaS Open Mic 06: Alex MacCaw – CEO, Clearbit (1,200 plays) Our NPS scores – 70 (Q1), 45 (Q3), 53 (Q4) MRR email notifications sent – up 321% in 2016 (from 1.5M to 5M) January One of the key themes in product development over the past year has been our focus on building a world-class set of segmentation features. The initial segmentation feature launch came in January, and throughout 2016 we released multiple updates. I think we’ve ended up with a really solid set of tools for giving greater insights into customer data. February We were excited to be a sponsor at the second SaaStr Annual conference in San Francisco. It was an exceptional SaaS conference and we’ll be there again in February 2017. Ed put together this photo journal of the event. March We released a few improvements to the segmentation features (relative time and attributes explorer). We also released a Zapier integration to make it easier to import customer attributes for use with Segmentation. April We released a Google Sheets app, so users can use our Import, Enrichment and Metrics APIs without needing to write any code. We also launched a refreshed Help Center in April. Our customer success team invested a lot of time this year in making sure we have solid documentation and setup guides for all parts of the app. May Another big theme of 2016 was our shift from being a product that works with a handful of third-party billing solutions to a more open platform, with a comprehensive set of APIs, developer documentation and client libraries. This puts more control in the hands of our users, enables new use cases and makes ChartMogul useful to a wider audience. Read the Import API announcement or head over to the developer hub. June In June we published a dedicated Resources section to make available all the cheat sheets, podcasts and other materials we’ve authored over the past couple of years. July We released our first official API client library in July, Ruby. This was followed by Node and PHP, with more clients planned. August Nearly the whole team was in Berlin at the start of August. We planned to take a team photo outdoors with a nice cityscape in the background, but a storm forced us to take shelter in this subway station, which turned out to have great lighting. September We launched the merge customers feature to enable customer records coming from multiple data sources to be consolidated into unified customer profiles. The “European SaaS event of the year” award has to go to SaaStock, which took place in Dublin. We were excited to be a sponsor, and it was a lot of fun meeting with so many of our customers and people from the wider SaaS community. Read our roundup of SaaStock here. October In October we launched our partnership with subscription billing provider, cleverbridge. One of my favourite accomplishments of the year was our recent enhancements to Segmentation. The update makes comparing segments much more tactile, and you can even assign a colour to your segments! November We released a new set of charts so users can track leads and free trials, trial-to-paid conversion rates and sales cycle length. These features really come to life when combined with the Segmentation features. Support for ChargeOver and Chargebee also went live in November. Check out the new integrations page for an up-to-date list of available integrations. December Our friends over at Geckoboard released a native ChartMogul integration. The integration makes showing your subscription metrics on a live TV dashboard just a few clicks away. Happy Holidays! That just about sums things up for 2016. We have ambitious plans for 2017, including a really great product roadmap that we’re incredibly excited about delivering for our customers. From the team at ChartMogul, we’d like to wish all of our customers, partners and friends, Happy Holidays and a joyful and prosperous 2017! 🚀 </sys

New feature: Add Custom Charts to Your Dashboard. Your ChartMogul dashboard is about to get a ton more useful… and a lot more fun! Starting today, you can add saved charts to your dashboard. A more useful dashboard What gets measured gets improved. Somebody smart While there are a few variants of this quote, they get at the same point — when you measure and track a specific metric, improving not only becomes possible, it becomes a priority. But it takes more than just measurement. Your team has to review the metric on a regular basis. Only then can they start to improve it. Your ChartMogul dashboard is about to get a whole lot more appealing. And this is why allowing you to add saved charts to your dashboard makes both saved charts and the dashboard more useful and relevant. Now your whole company can see your most important, customized subscription metrics — front and center — on a daily basis. Practicing what we preach Here at ChartMogul, we’ve built a number of customized charts that our team relies on to help make good decisions: 🌆 MRR sliced by industry 🏝️ Launch plan signups 🔌 Customers sliced by billing system used 🐻 What animals are we hunting? 🌎 MRR sliced by region Saved charts like these have helped us better understand our own business, for example, to see which of our integrations are the most popular, how many trials choose our free Launch plan, or which new industry segments show the most promise. A brighter, more relevant dashboard 🌈🦄 Custom charts are a lot more visually exciting than the default metrics. This means your dashboard can become more engaging and visually appealing than it was before, at the same time as becoming more relevant to your team! Getting started Adding a saved chart to your ChartMogul dashboard. If you’re an Admin user in ChartMogul you click ⚙️ (in the top right corner of your dashboard) > Add report > Saved charts. You’ll then see a list of the charts you previously customized and saved. Select one and add it to your dashboard — it’s that easy. (Just be sure you’ve already shared the chart with your whole team.) By the way — next time you save a new custom chart, you’ll be able to add it to the dashboard at the same time. One more thing! 🥚🐇 We’ve included a tiny easter-egg-like piece of functionality in this release. The colored circles on the saved charts act as both a chart key and a set of buttons. Click on the circles to switch in and out of Compare segments mode and also change which segment is currently visible on the dashboard.

[INST] New feature: Add Custom Charts to Your Dashboard [/INST]

Your ChartMogul dashboard is about to get a ton more useful… and a lot more fun! Starting today, you can add saved charts to your dashboard. A more useful dashboard What gets measured gets improved. Somebody smart While there are a few variants of this quote, they get at the same point — when you measure and track a specific metric, improving not only becomes possible, it becomes a priority. But it takes more than just measurement. Your team has to review the metric on a regular basis. Only then can they start to improve it. Your ChartMogul dashboard is about to get a whole lot more appealing. And this is why allowing you to add saved charts to your dashboard makes both saved charts and the dashboard more useful and relevant. Now your whole company can see your most important, customized subscription metrics — front and center — on a daily basis. Practicing what we preach Here at ChartMogul, we’ve built a number of customized charts that our team relies on to help make good decisions: 🌆 MRR sliced by industry 🏝️ Launch plan signups 🔌 Customers sliced by billing system used 🐻 What animals are we hunting? 🌎 MRR sliced by region Saved charts like these have helped us better understand our own business, for example, to see which of our integrations are the most popular, how many trials choose our free Launch plan, or which new industry segments show the most promise. A brighter, more relevant dashboard 🌈🦄 Custom charts are a lot more visually exciting than the default metrics. This means your dashboard can become more engaging and visually appealing than it was before, at the same time as becoming more relevant to your team! Getting started Adding a saved chart to your ChartMogul dashboard. If you’re an Admin user in ChartMogul you click ⚙️ (in the top right corner of your dashboard) > Add report > Saved charts. You’ll then see a list of the charts you previously customized and saved. Select one and add it to your dashboard — it’s that easy. (Just be sure you’ve already shared the chart with your whole team.) By the way — next time you save a new custom chart, you’ll be able to add it to the dashboard at the same time. One more thing! 🥚🐇 We’ve included a tiny easter-egg-like piece of functionality in this release. The colored circles on the saved charts act as both a chart key and a set of buttons. Click on the circles to switch in and out of Compare segments mode and also change which segment is currently visible on the dashboard.

<sys> [INST] New feature: Add Custom Charts to Your Dashboard [/INST] Your ChartMogul dashboard is about to get a ton more useful… and a lot more fun! Starting today, you can add saved charts to your dashboard. A more useful dashboard What gets measured gets improved. Somebody smart While there are a few variants of this quote, they get at the same point — when you measure and track a specific metric, improving not only becomes possible, it becomes a priority. But it takes more than just measurement. Your team has to review the metric on a regular basis. Only then can they start to improve it. Your ChartMogul dashboard is about to get a whole lot more appealing. And this is why allowing you to add saved charts to your dashboard makes both saved charts and the dashboard more useful and relevant. Now your whole company can see your most important, customized subscription metrics — front and center — on a daily basis. Practicing what we preach Here at ChartMogul, we’ve built a number of customized charts that our team relies on to help make good decisions: 🌆 MRR sliced by industry 🏝️ Launch plan signups 🔌 Customers sliced by billing system used 🐻 What animals are we hunting? 🌎 MRR sliced by region Saved charts like these have helped us better understand our own business, for example, to see which of our integrations are the most popular, how many trials choose our free Launch plan, or which new industry segments show the most promise. A brighter, more relevant dashboard 🌈🦄 Custom charts are a lot more visually exciting than the default metrics. This means your dashboard can become more engaging and visually appealing than it was before, at the same time as becoming more relevant to your team! Getting started Adding a saved chart to your ChartMogul dashboard. If you’re an Admin user in ChartMogul you click ⚙️ (in the top right corner of your dashboard) > Add report > Saved charts. You’ll then see a list of the charts you previously customized and saved. Select one and add it to your dashboard — it’s that easy. (Just be sure you’ve already shared the chart with your whole team.) By the way — next time you save a new custom chart, you’ll be able to add it to the dashboard at the same time. One more thing! 🥚🐇 We’ve included a tiny easter-egg-like piece of functionality in this release. The colored circles on the saved charts act as both a chart key and a set of buttons. Click on the circles to switch in and out of Compare segments mode and also change which segment is currently visible on the dashboard. </sys

How to turn a first-time purchase into a high LTV customer. Jenna Ochoa is the Partner Marketing Manager at Justuno. She has been working in the e-commerce industry for over 5 years and occasionally writes about it on the Justuno blog. Thanks for the e-commerce insights, Jenna! For most e-commerce merchants, the need for segmentation is obvious once they reach a period of rapid growth. As sales increase, customer segments become increasingly apparent and merchants must understand their customers to scale effectively. However, the key to continuing that rapid growth lies in effectively utilizing customer segment information to better market to the website’s overall visitor audience. Looking at the marketing funnel Moving website traffic and customers through your marketing funnel is only achievable by segmentation. It’s easy to move everyone through a one-size-fits-all funnel, but you will quickly hit the ceiling on maximum conversions. By divvying-up your audience and applying a personalized marketing strategy to each segment, each audience will then have its own funnel, unique messaging and unique incentives to purchase. “Segmentation gets people to make decisions” Travis Logan, CTO & Co-Founder, Justuno The easiest way to get started with segmentation is to go one level deeper in your lead capture data. For example, what information are you currently capturing when a new visitor arrives at your site? Most often, e-commerce retailers capture information like name and email address. This is a great start: easy and low barrier to entry. But, what would happen if you started to collect product interest, shirt size, shoes size, etc. right in your welcome pop-up? With this information, you could automatically build segments within your new visitor audience. This allows you to send more relevant email marketing to those new visitors after they opt-in. Your welcome series could link to the “most popular shoes” that are women’s size 9. Or to top men’s clothing recently purchased. By adding extra data to your lead capture campaigns, you can easily start building segments that speak to your visitors specific needs, rather than general wants. Where are you spending off-site budget and resources? Most e-commerce retailers put a hefty amount of budget into ads. What’s mind-blowing about the ad spend and marketing strategy is that for every $92 spent acquiring customers, only $1 is spent converting them. That’s crazy! At Justuno, we advocate for that measly $1 and help e-commerce retailers understand they can squeeze even more ROI out of their ad spend with a simple practice: mirroring your off-site messaging on-site. For example, when you create an ad on Facebook offering $10 off a purchase for the next 48 hours and a visitor clicks the ad, he/she should see that same $10 off messaging on your website as well as a reminder of when that offer ends. It is simple and incredibly effective. Over the 2018 holiday rush (October 20, 2018 – January 1, 2019), we analyzed how countdown timers performed across our user base. On average, Justuno users saw an average engagement rate of 8.82% and an average conversion rate of 5.44%. What’s important to note here is that message mirroring is incredibly easy to set up. By leveraging UTM parameters from your ad campaigns on channels like Facebook, AdWords, affiliates or Instagram, you can trigger pop-ups or message bars to display when those click-thrus arrive on-site. Learn more about that here. The bottom-line: squeeze more ROI out of the money you’re already spending. On-site messaging is quick and easy to set up and is often the only nudge your website visitor needs to become a customer. They purchased! Now what? As e-commerce retailers begin to make more sales, the challenge now lies in getting repeat purchase. Here, again, segmentation is crucial. It’s helpful to have an understanding of what your customers purchased, when they purchased, and with what on-site offers they have engaged with. This information informs the email marketing campaigns you deploy to initiate repeat purchases from customers. Recipients are 75% more likely to click on emails from segmented campaigns than non-segmented campaigns MailChimp, 2017 And, again, we arrive back at on-site messaging. When these folks click-thru from their personalized email what message will they see on-site? You can see how the 1:1 marketing loop never sleeps and every step taken to refine this loop will bring you closer to a higher AOV (average order value) and an increase in repeat purchases. Creating high-LTV customers High-LTV customers means “high lifetime value” customers. Here’s a handy blog post from Shopify to help you better understand what that means for your e-commerce business. You can’t achieve high-LTV immediately. It is a “crawl, walk, run” process. But as soon as you start dialing-in your segmentation strategy, you can be more aggressive in pursuing tactics to nurture these customers. Here are the must-have elements needed to create high-LTV customers: Traffic coming to your e-commerce site (organic, paid, or both) A lead capture solution A powerful ESP (Klaviyo or Dotdigitial are great for e-commerce) Segmentation within your ESP Here are a few basic tactics you can implement into your marketing strategy to create repeat customers: New visitor discounts Cart abandonment offers Tiered offer discounts Cross-sell/upsell campaigns to increase AOV Building a 1:1 marketing loop can start simple. In fact, that’s the best way to begin. Set up your simple loop today, learn more about your customers, and what you can do on your next loop iteration.

[INST] How to turn a first-time purchase into a high LTV customer [/INST]

Jenna Ochoa is the Partner Marketing Manager at Justuno. She has been working in the e-commerce industry for over 5 years and occasionally writes about it on the Justuno blog. Thanks for the e-commerce insights, Jenna! For most e-commerce merchants, the need for segmentation is obvious once they reach a period of rapid growth. As sales increase, customer segments become increasingly apparent and merchants must understand their customers to scale effectively. However, the key to continuing that rapid growth lies in effectively utilizing customer segment information to better market to the website’s overall visitor audience. Looking at the marketing funnel Moving website traffic and customers through your marketing funnel is only achievable by segmentation. It’s easy to move everyone through a one-size-fits-all funnel, but you will quickly hit the ceiling on maximum conversions. By divvying-up your audience and applying a personalized marketing strategy to each segment, each audience will then have its own funnel, unique messaging and unique incentives to purchase. “Segmentation gets people to make decisions” Travis Logan, CTO & Co-Founder, Justuno The easiest way to get started with segmentation is to go one level deeper in your lead capture data. For example, what information are you currently capturing when a new visitor arrives at your site? Most often, e-commerce retailers capture information like name and email address. This is a great start: easy and low barrier to entry. But, what would happen if you started to collect product interest, shirt size, shoes size, etc. right in your welcome pop-up? With this information, you could automatically build segments within your new visitor audience. This allows you to send more relevant email marketing to those new visitors after they opt-in. Your welcome series could link to the “most popular shoes” that are women’s size 9. Or to top men’s clothing recently purchased. By adding extra data to your lead capture campaigns, you can easily start building segments that speak to your visitors specific needs, rather than general wants. Where are you spending off-site budget and resources? Most e-commerce retailers put a hefty amount of budget into ads. What’s mind-blowing about the ad spend and marketing strategy is that for every $92 spent acquiring customers, only $1 is spent converting them. That’s crazy! At Justuno, we advocate for that measly $1 and help e-commerce retailers understand they can squeeze even more ROI out of their ad spend with a simple practice: mirroring your off-site messaging on-site. For example, when you create an ad on Facebook offering $10 off a purchase for the next 48 hours and a visitor clicks the ad, he/she should see that same $10 off messaging on your website as well as a reminder of when that offer ends. It is simple and incredibly effective. Over the 2018 holiday rush (October 20, 2018 – January 1, 2019), we analyzed how countdown timers performed across our user base. On average, Justuno users saw an average engagement rate of 8.82% and an average conversion rate of 5.44%. What’s important to note here is that message mirroring is incredibly easy to set up. By leveraging UTM parameters from your ad campaigns on channels like Facebook, AdWords, affiliates or Instagram, you can trigger pop-ups or message bars to display when those click-thrus arrive on-site. Learn more about that here. The bottom-line: squeeze more ROI out of the money you’re already spending. On-site messaging is quick and easy to set up and is often the only nudge your website visitor needs to become a customer. They purchased! Now what? As e-commerce retailers begin to make more sales, the challenge now lies in getting repeat purchase. Here, again, segmentation is crucial. It’s helpful to have an understanding of what your customers purchased, when they purchased, and with what on-site offers they have engaged with. This information informs the email marketing campaigns you deploy to initiate repeat purchases from customers. Recipients are 75% more likely to click on emails from segmented campaigns than non-segmented campaigns MailChimp, 2017 And, again, we arrive back at on-site messaging. When these folks click-thru from their personalized email what message will they see on-site? You can see how the 1:1 marketing loop never sleeps and every step taken to refine this loop will bring you closer to a higher AOV (average order value) and an increase in repeat purchases. Creating high-LTV customers High-LTV customers means “high lifetime value” customers. Here’s a handy blog post from Shopify to help you better understand what that means for your e-commerce business. You can’t achieve high-LTV immediately. It is a “crawl, walk, run” process. But as soon as you start dialing-in your segmentation strategy, you can be more aggressive in pursuing tactics to nurture these customers. Here are the must-have elements needed to create high-LTV customers: Traffic coming to your e-commerce site (organic, paid, or both) A lead capture solution A powerful ESP (Klaviyo or Dotdigitial are great for e-commerce) Segmentation within your ESP Here are a few basic tactics you can implement into your marketing strategy to create repeat customers: New visitor discounts Cart abandonment offers Tiered offer discounts Cross-sell/upsell campaigns to increase AOV Building a 1:1 marketing loop can start simple. In fact, that’s the best way to begin. Set up your simple loop today, learn more about your customers, and what you can do on your next loop iteration.

<sys> [INST] How to turn a first-time purchase into a high LTV customer [/INST] Jenna Ochoa is the Partner Marketing Manager at Justuno. She has been working in the e-commerce industry for over 5 years and occasionally writes about it on the Justuno blog. Thanks for the e-commerce insights, Jenna! For most e-commerce merchants, the need for segmentation is obvious once they reach a period of rapid growth. As sales increase, customer segments become increasingly apparent and merchants must understand their customers to scale effectively. However, the key to continuing that rapid growth lies in effectively utilizing customer segment information to better market to the website’s overall visitor audience. Looking at the marketing funnel Moving website traffic and customers through your marketing funnel is only achievable by segmentation. It’s easy to move everyone through a one-size-fits-all funnel, but you will quickly hit the ceiling on maximum conversions. By divvying-up your audience and applying a personalized marketing strategy to each segment, each audience will then have its own funnel, unique messaging and unique incentives to purchase. “Segmentation gets people to make decisions” Travis Logan, CTO & Co-Founder, Justuno The easiest way to get started with segmentation is to go one level deeper in your lead capture data. For example, what information are you currently capturing when a new visitor arrives at your site? Most often, e-commerce retailers capture information like name and email address. This is a great start: easy and low barrier to entry. But, what would happen if you started to collect product interest, shirt size, shoes size, etc. right in your welcome pop-up? With this information, you could automatically build segments within your new visitor audience. This allows you to send more relevant email marketing to those new visitors after they opt-in. Your welcome series could link to the “most popular shoes” that are women’s size 9. Or to top men’s clothing recently purchased. By adding extra data to your lead capture campaigns, you can easily start building segments that speak to your visitors specific needs, rather than general wants. Where are you spending off-site budget and resources? Most e-commerce retailers put a hefty amount of budget into ads. What’s mind-blowing about the ad spend and marketing strategy is that for every $92 spent acquiring customers, only $1 is spent converting them. That’s crazy! At Justuno, we advocate for that measly $1 and help e-commerce retailers understand they can squeeze even more ROI out of their ad spend with a simple practice: mirroring your off-site messaging on-site. For example, when you create an ad on Facebook offering $10 off a purchase for the next 48 hours and a visitor clicks the ad, he/she should see that same $10 off messaging on your website as well as a reminder of when that offer ends. It is simple and incredibly effective. Over the 2018 holiday rush (October 20, 2018 – January 1, 2019), we analyzed how countdown timers performed across our user base. On average, Justuno users saw an average engagement rate of 8.82% and an average conversion rate of 5.44%. What’s important to note here is that message mirroring is incredibly easy to set up. By leveraging UTM parameters from your ad campaigns on channels like Facebook, AdWords, affiliates or Instagram, you can trigger pop-ups or message bars to display when those click-thrus arrive on-site. Learn more about that here. The bottom-line: squeeze more ROI out of the money you’re already spending. On-site messaging is quick and easy to set up and is often the only nudge your website visitor needs to become a customer. They purchased! Now what? As e-commerce retailers begin to make more sales, the challenge now lies in getting repeat purchase. Here, again, segmentation is crucial. It’s helpful to have an understanding of what your customers purchased, when they purchased, and with what on-site offers they have engaged with. This information informs the email marketing campaigns you deploy to initiate repeat purchases from customers. Recipients are 75% more likely to click on emails from segmented campaigns than non-segmented campaigns MailChimp, 2017 And, again, we arrive back at on-site messaging. When these folks click-thru from their personalized email what message will they see on-site? You can see how the 1:1 marketing loop never sleeps and every step taken to refine this loop will bring you closer to a higher AOV (average order value) and an increase in repeat purchases. Creating high-LTV customers High-LTV customers means “high lifetime value” customers. Here’s a handy blog post from Shopify to help you better understand what that means for your e-commerce business. You can’t achieve high-LTV immediately. It is a “crawl, walk, run” process. But as soon as you start dialing-in your segmentation strategy, you can be more aggressive in pursuing tactics to nurture these customers. Here are the must-have elements needed to create high-LTV customers: Traffic coming to your e-commerce site (organic, paid, or both) A lead capture solution A powerful ESP (Klaviyo or Dotdigitial are great for e-commerce) Segmentation within your ESP Here are a few basic tactics you can implement into your marketing strategy to create repeat customers: New visitor discounts Cart abandonment offers Tiered offer discounts Cross-sell/upsell campaigns to increase AOV Building a 1:1 marketing loop can start simple. In fact, that’s the best way to begin. Set up your simple loop today, learn more about your customers, and what you can do on your next loop iteration. </sys

The Grapevine of B2B: how word of mouth actually works. You can also listen to this piece in podcast form here, or subscribe on iTunes: I still remember the first time I saw Trello. A few years ago, working at a dynamic, fast-growing startup, a coworker showed me her Trello board for managing an overhaul of our new employee onboarding, one random day during a one-off meeting. I was interested to check it out, but we needed to move on to tahe topic at hand. So she sent me an email invitation in a couple clicks. And we moved on. A few days later when I got around to signing up, I created my own board — and I was hooked. What a relief from the mess of hand-written to-do lists and cluttered gCal deadlines. Using it to track anything I was accountable for, I showed it to the founder in our weekly 1:1 meeting. Right there I added him to the board via email invitation, in a couple clicks. From then on Trello boards served as guides for everyone’s check-ins with him. And within a few weeks our entire 50 person team was using Trello to manage various projects, with some smaller groups upgrading to a premium plan. Such is the power of word of mouth in a B2B setting. Or one form of it. My Trello experience is a great example of internal WOM, coworker referral. But there are other forms. And all combine to make word of mouth the single greatest driver of B2B customer growth. Don’t believe me? Customers say it’s the most important influence in their buying decisions. Founders say it’s the most important customer acquisition channel, whether at the earliest stage or at scale. 91% of B2B buyers are influenced by word-of-mouth when making their buying decision. [USM] 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision. [B to B Magazine] WOM is the leading influence in purchasing decision in developing markets. [McKinsey & Company] “Ultimately, almost all software companies end up getting ~80% or so of their new customers from their existing customers once they hit scale. From referrals. From brand. From word of mouth.” [Jason Lemkin] Source: mckinsey.com. McKinsey’s data shows that word of mouth is a top influence in consumer behavior, the highest in developing markets. On top of all of this, word of mouth helps you outperform competitors. “For those unsure about actively managing word of mouth, consider this: the incremental gain from outperforming competitors with superior television ads, for example, is relatively small. That’s because all companies actively manage their traditional marketing activities and all have similar knowledge. With so few companies actively managing word of mouth—the most powerful form of marketing—the potential upside is exponentially greater.” McKinsey Scratch “superior television ads” for something more modern and digital, like adwords and SEO, and you have the case for B2B WOM management. Whether it’s gaining a new customer, or expanding the volume of a customer (i.e. the number of seats they pay for), WOM is most likely the driving force behind that growth. WOM can work differently for B2B. And within B2B, differently between small business customers and enterprise customers. The trick is to know the who, what, when, where, and why. Once you know those things, you can harness word of mouth and even spur it on. Why people share To dive deep into the psychology of WOM… Jonah Berger, a marketing professor at Wharton, published Contagious: Why Things Catch On. In it, he examines why some products get more word of mouth than others, and “how consumers make decisions, how ideas diffuse, and how social influence leads people to imitate (or avoid) what others are doing.” He boils contagion — or viral popularity, if you prefer that — down to 6 principles: Social Currency Triggers Emotions Public (Observability) Practical value Stories As I explore word of mouth and how it works for B2B in particular, I’ll point out where Berger’s principles apply. So, why do B2B customers share? The most basic reason someone would share is that… you’ve made a great product. You’ve solved a real problem in a compelling way. “If your product is good and solves a need better than other existing solutions, you should experience steady growth just from word of mouth. That’s a big indicator of product/market fit – and if it’s not happening, you know that you haven’t achieved PMF yet.” – Steli Efti They want their brand or company to be perceived in a certain way, particularly cool or innovative. Jonah Berger’s principle #1, Social Currency This is especially the case with enterprise customers, who are notoriously more careful about sharing with products they use, much less endorsing them. So, how do you go about encouraging a perception that being associated with your product or company is cool or innovative? Focus on your positioning, your branding, and your content marketing. Their experience differs from their expectation. Satisfied customers aren’t necessarily the ones who will talk. It’s the ones who are surprised, delighted, by features or benefits that really matter to them. So, under promise and over deliver. Jolt your customers out of their expectations, in a good way. Jonah Berger’s principle #3, Emotion Where do B2B customers share? Person to person “56% of B2B purchasers look to offline word-of-mouth as a source of information and advice.” BaseOne The age-old form of word of mouth. While 56% isn’t a huge majority, the value of offline WOM largely lies in its effectiveness. A trusted source like family, a friend, or a coworker is what McKinsey calls a high-impact reference. High-impact references are 50x more likely to trigger a purchase. Online “75% of buyers consulted online reviews before making purchasing decisions about business software.” SoftwareAdvice Online sources are generally considered low-impact references. But specifically in the B2B community, online reviews can be a more trusted source because it’s all within a qualified network. Readers know reviews are written by fellow business owners, by people who are familiar with the industry or business model. So in B2B, online reviews might carry more weight than in B2C. A few popular destinations for B2B customer reviews are these online directories: GetApp G2 Crowd FinancesOnline How you can harness the word of mouth already out there Find out exactly what your customers are saying Why? According to McKinsey, what is said is the primary driver of WOM’s impact on another consumer. How? Lincoln Murphy recommends a short, sweet tool for picking up valuable extra information. When a customer says they heard about you from a friend, simply follow up with, “What’d they tell you?” It’s like listening in on their conversation, insight you’d never get otherwise. “The real why,” as Murphy says. And what do you do next? Use customer WOM to drive your content marketing. Maintain a robust presence online, and keep benefits top of mind. If people are frequently reminded of your product, they talk about it more often. Link your product to parts of their daily environment; associate it with some part of their daily routine. Jonah Berger’s principle #2, Triggers Offer advice, tips, and other how-to content, based around what you know customers appreciate about your product. McKinsey says the value of B2B WOM is less about emotional positioning and more about functional messages. Jonah Berger’s principle #5, Practical value Write customer stories and testimonials. This is key! Provide customers with a place to share their positive experiences. To learn what your customers really think, gather rich feedback, and craft a knockout customer story, read this piece on how to conduct a successful customer interview. Jonah Berger’s principle #6, Stories How to kickstart more WOM for your business Conduct an NPS survey to identify customers with word-of-mouth potential The Net Promoter Score metric gauges a simple and timeless customer sentiment: “How likely are you to recommend us to a friend or colleague?” Each customer gives a score between 0 and 10, which — aggregated together — yields your company’s Net Promoter Score. The customers that mark you 9 or 10 are likely to actively recommend your company to others. When you land in the 9s and 10s for some customers, you know these are your WOM targets: if they’re not already talking about you, they probably will. So, try directly asking them to recommend your company. Implement a referral marketing program How to reward One-way referral. Ask your existing users to suggest the product to a friend. When the friend signs up, reward your existing customer. This benefits the referrer only. Two-way referral. Ask your existing users to suggest the product to a friend. Then, when the friend signs up, you reward both parties. The existing user and the referred customer both benefit. This double-sided incentive model has proven very successful. Trello in fact has a great example of a referral marketing strategy. The page for their paid plan, Trello Gold, features their referral marketing program right next to the option to upgrade via payment. The reward proposition — a temporary plan upgrade — is laid out clearly, with some extra copy highlighting the benefits you’ll enjoy with Trello Gold. Then the ways to recommend Trello are listed — and linked to the appropriate channels for quick-and-easy referring on the spot. Trello even gamifies the customer’s referring performance, displaying a progress bar and total counts of new signups. Gamification can motivate a customer to stay active and keep sharing your product. Well, this image is a little sad, as I’ve clearly not started my Trello referral campaign — not yet. But you get the idea. What to offer as a reward The reward is up to you, from a free trial extension, temporary plan upgrade, payment discounts, or other perks. Test and see what incentivizes your customers most. But beware offering an incentive that’s too high, that’s too good. This can work against you as you’re not really promoting “true” WOM. Constant referrals will make it clear that existing customers are acting more for their own benefit and not genuine recommendation, and the pool of potential customers — flooded with referral requests — will tune out your brand. A note on influencers There’s lots of talk about creating “brand advocates” through “influencers” — but it takes serious time and energy to develop these relationships, and there’s no solid proof that they are any more effective than the options listed above. Better to utilize the influencer base you already have: your happy customers. What about viral marketing? Some products are inherently “viral” — which is to say they’re about sharing or collaborating, such as Dropbox, Hackpad, and Slack. But by and large, virality just isn’t baked into most B2B products. Jason Lemkin talks about what’s called the low “viral coefficient” for B2B. “I’d say typically, SaaS apps don’t have enough customers to see the material, economic benefits of viral revenue until they cross $1m-$2m in ARR at the earliest.” Still, there are a couple of simple tactics you can employ to improve your product’s reach and exposure. As Kissmetrics puts it, virality is a design principle. Make your product as shareable and as visible as possible. Jonah Berger’s principle #4, Public Make it really convenient to invite other users Integrate your product with Google so people can easily fetch email contacts. Provide links to social media platforms. Auto-fill any messages. Yesware does all of this and more on their referral page. Anything a user can share directly from your product, put your logo on it This is often called passive sharing, and it works whether you provide invoices, reports, designs, email campaigns, etc. Mailchimp puts their logo as a footnote at the end of every email sent through their service, which is well over 80 million emails per day. There’s also the familiar ”powered by” widgets. Typeform is an excellent example of this tactic, as you can see in one of their mock surveys. Clicking on “Powered by Typeform” takes you directly to their “Create a form” page, bringing potential users to the point of conversion in an instant. Takeaways Word of mouth is the single greatest driver of B2B customer growth. Infuse customer word of mouth into your content marketing strategy to amplify its influence. Conduct an NPS survey to identify active referrers in your existing customer base. Test a referral campaign to acquire new customers. Insert viral design tactics into your product to make your brand more visible. All in all, you’re leaving a lot of opportunity on the table if you aren’t paying attention to what your customers are saying. Harness customer loyalty and make it work for you! And of course, you should measure all of the activity and efforts around word of mouth. Put a system in place to capture statistics around referred customers, through both informal WOM and referral marketing. Then optimize as you go and reap the benefits.

[INST] The Grapevine of B2B: how word of mouth actually works [/INST]

You can also listen to this piece in podcast form here, or subscribe on iTunes: I still remember the first time I saw Trello. A few years ago, working at a dynamic, fast-growing startup, a coworker showed me her Trello board for managing an overhaul of our new employee onboarding, one random day during a one-off meeting. I was interested to check it out, but we needed to move on to tahe topic at hand. So she sent me an email invitation in a couple clicks. And we moved on. A few days later when I got around to signing up, I created my own board — and I was hooked. What a relief from the mess of hand-written to-do lists and cluttered gCal deadlines. Using it to track anything I was accountable for, I showed it to the founder in our weekly 1:1 meeting. Right there I added him to the board via email invitation, in a couple clicks. From then on Trello boards served as guides for everyone’s check-ins with him. And within a few weeks our entire 50 person team was using Trello to manage various projects, with some smaller groups upgrading to a premium plan. Such is the power of word of mouth in a B2B setting. Or one form of it. My Trello experience is a great example of internal WOM, coworker referral. But there are other forms. And all combine to make word of mouth the single greatest driver of B2B customer growth. Don’t believe me? Customers say it’s the most important influence in their buying decisions. Founders say it’s the most important customer acquisition channel, whether at the earliest stage or at scale. 91% of B2B buyers are influenced by word-of-mouth when making their buying decision. [USM] 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision. [B to B Magazine] WOM is the leading influence in purchasing decision in developing markets. [McKinsey & Company] “Ultimately, almost all software companies end up getting ~80% or so of their new customers from their existing customers once they hit scale. From referrals. From brand. From word of mouth.” [Jason Lemkin] Source: mckinsey.com. McKinsey’s data shows that word of mouth is a top influence in consumer behavior, the highest in developing markets. On top of all of this, word of mouth helps you outperform competitors. “For those unsure about actively managing word of mouth, consider this: the incremental gain from outperforming competitors with superior television ads, for example, is relatively small. That’s because all companies actively manage their traditional marketing activities and all have similar knowledge. With so few companies actively managing word of mouth—the most powerful form of marketing—the potential upside is exponentially greater.” McKinsey Scratch “superior television ads” for something more modern and digital, like adwords and SEO, and you have the case for B2B WOM management. Whether it’s gaining a new customer, or expanding the volume of a customer (i.e. the number of seats they pay for), WOM is most likely the driving force behind that growth. WOM can work differently for B2B. And within B2B, differently between small business customers and enterprise customers. The trick is to know the who, what, when, where, and why. Once you know those things, you can harness word of mouth and even spur it on. Why people share To dive deep into the psychology of WOM… Jonah Berger, a marketing professor at Wharton, published Contagious: Why Things Catch On. In it, he examines why some products get more word of mouth than others, and “how consumers make decisions, how ideas diffuse, and how social influence leads people to imitate (or avoid) what others are doing.” He boils contagion — or viral popularity, if you prefer that — down to 6 principles: Social Currency Triggers Emotions Public (Observability) Practical value Stories As I explore word of mouth and how it works for B2B in particular, I’ll point out where Berger’s principles apply. So, why do B2B customers share? The most basic reason someone would share is that… you’ve made a great product. You’ve solved a real problem in a compelling way. “If your product is good and solves a need better than other existing solutions, you should experience steady growth just from word of mouth. That’s a big indicator of product/market fit – and if it’s not happening, you know that you haven’t achieved PMF yet.” – Steli Efti They want their brand or company to be perceived in a certain way, particularly cool or innovative. Jonah Berger’s principle #1, Social Currency This is especially the case with enterprise customers, who are notoriously more careful about sharing with products they use, much less endorsing them. So, how do you go about encouraging a perception that being associated with your product or company is cool or innovative? Focus on your positioning, your branding, and your content marketing. Their experience differs from their expectation. Satisfied customers aren’t necessarily the ones who will talk. It’s the ones who are surprised, delighted, by features or benefits that really matter to them. So, under promise and over deliver. Jolt your customers out of their expectations, in a good way. Jonah Berger’s principle #3, Emotion Where do B2B customers share? Person to person “56% of B2B purchasers look to offline word-of-mouth as a source of information and advice.” BaseOne The age-old form of word of mouth. While 56% isn’t a huge majority, the value of offline WOM largely lies in its effectiveness. A trusted source like family, a friend, or a coworker is what McKinsey calls a high-impact reference. High-impact references are 50x more likely to trigger a purchase. Online “75% of buyers consulted online reviews before making purchasing decisions about business software.” SoftwareAdvice Online sources are generally considered low-impact references. But specifically in the B2B community, online reviews can be a more trusted source because it’s all within a qualified network. Readers know reviews are written by fellow business owners, by people who are familiar with the industry or business model. So in B2B, online reviews might carry more weight than in B2C. A few popular destinations for B2B customer reviews are these online directories: GetApp G2 Crowd FinancesOnline How you can harness the word of mouth already out there Find out exactly what your customers are saying Why? According to McKinsey, what is said is the primary driver of WOM’s impact on another consumer. How? Lincoln Murphy recommends a short, sweet tool for picking up valuable extra information. When a customer says they heard about you from a friend, simply follow up with, “What’d they tell you?” It’s like listening in on their conversation, insight you’d never get otherwise. “The real why,” as Murphy says. And what do you do next? Use customer WOM to drive your content marketing. Maintain a robust presence online, and keep benefits top of mind. If people are frequently reminded of your product, they talk about it more often. Link your product to parts of their daily environment; associate it with some part of their daily routine. Jonah Berger’s principle #2, Triggers Offer advice, tips, and other how-to content, based around what you know customers appreciate about your product. McKinsey says the value of B2B WOM is less about emotional positioning and more about functional messages. Jonah Berger’s principle #5, Practical value Write customer stories and testimonials. This is key! Provide customers with a place to share their positive experiences. To learn what your customers really think, gather rich feedback, and craft a knockout customer story, read this piece on how to conduct a successful customer interview. Jonah Berger’s principle #6, Stories How to kickstart more WOM for your business Conduct an NPS survey to identify customers with word-of-mouth potential The Net Promoter Score metric gauges a simple and timeless customer sentiment: “How likely are you to recommend us to a friend or colleague?” Each customer gives a score between 0 and 10, which — aggregated together — yields your company’s Net Promoter Score. The customers that mark you 9 or 10 are likely to actively recommend your company to others. When you land in the 9s and 10s for some customers, you know these are your WOM targets: if they’re not already talking about you, they probably will. So, try directly asking them to recommend your company. Implement a referral marketing program How to reward One-way referral. Ask your existing users to suggest the product to a friend. When the friend signs up, reward your existing customer. This benefits the referrer only. Two-way referral. Ask your existing users to suggest the product to a friend. Then, when the friend signs up, you reward both parties. The existing user and the referred customer both benefit. This double-sided incentive model has proven very successful. Trello in fact has a great example of a referral marketing strategy. The page for their paid plan, Trello Gold, features their referral marketing program right next to the option to upgrade via payment. The reward proposition — a temporary plan upgrade — is laid out clearly, with some extra copy highlighting the benefits you’ll enjoy with Trello Gold. Then the ways to recommend Trello are listed — and linked to the appropriate channels for quick-and-easy referring on the spot. Trello even gamifies the customer’s referring performance, displaying a progress bar and total counts of new signups. Gamification can motivate a customer to stay active and keep sharing your product. Well, this image is a little sad, as I’ve clearly not started my Trello referral campaign — not yet. But you get the idea. What to offer as a reward The reward is up to you, from a free trial extension, temporary plan upgrade, payment discounts, or other perks. Test and see what incentivizes your customers most. But beware offering an incentive that’s too high, that’s too good. This can work against you as you’re not really promoting “true” WOM. Constant referrals will make it clear that existing customers are acting more for their own benefit and not genuine recommendation, and the pool of potential customers — flooded with referral requests — will tune out your brand. A note on influencers There’s lots of talk about creating “brand advocates” through “influencers” — but it takes serious time and energy to develop these relationships, and there’s no solid proof that they are any more effective than the options listed above. Better to utilize the influencer base you already have: your happy customers. What about viral marketing? Some products are inherently “viral” — which is to say they’re about sharing or collaborating, such as Dropbox, Hackpad, and Slack. But by and large, virality just isn’t baked into most B2B products. Jason Lemkin talks about what’s called the low “viral coefficient” for B2B. “I’d say typically, SaaS apps don’t have enough customers to see the material, economic benefits of viral revenue until they cross $1m-$2m in ARR at the earliest.” Still, there are a couple of simple tactics you can employ to improve your product’s reach and exposure. As Kissmetrics puts it, virality is a design principle. Make your product as shareable and as visible as possible. Jonah Berger’s principle #4, Public Make it really convenient to invite other users Integrate your product with Google so people can easily fetch email contacts. Provide links to social media platforms. Auto-fill any messages. Yesware does all of this and more on their referral page. Anything a user can share directly from your product, put your logo on it This is often called passive sharing, and it works whether you provide invoices, reports, designs, email campaigns, etc. Mailchimp puts their logo as a footnote at the end of every email sent through their service, which is well over 80 million emails per day. There’s also the familiar ”powered by” widgets. Typeform is an excellent example of this tactic, as you can see in one of their mock surveys. Clicking on “Powered by Typeform” takes you directly to their “Create a form” page, bringing potential users to the point of conversion in an instant. Takeaways Word of mouth is the single greatest driver of B2B customer growth. Infuse customer word of mouth into your content marketing strategy to amplify its influence. Conduct an NPS survey to identify active referrers in your existing customer base. Test a referral campaign to acquire new customers. Insert viral design tactics into your product to make your brand more visible. All in all, you’re leaving a lot of opportunity on the table if you aren’t paying attention to what your customers are saying. Harness customer loyalty and make it work for you! And of course, you should measure all of the activity and efforts around word of mouth. Put a system in place to capture statistics around referred customers, through both informal WOM and referral marketing. Then optimize as you go and reap the benefits.

<sys> [INST] The Grapevine of B2B: how word of mouth actually works [/INST] You can also listen to this piece in podcast form here, or subscribe on iTunes: I still remember the first time I saw Trello. A few years ago, working at a dynamic, fast-growing startup, a coworker showed me her Trello board for managing an overhaul of our new employee onboarding, one random day during a one-off meeting. I was interested to check it out, but we needed to move on to tahe topic at hand. So she sent me an email invitation in a couple clicks. And we moved on. A few days later when I got around to signing up, I created my own board — and I was hooked. What a relief from the mess of hand-written to-do lists and cluttered gCal deadlines. Using it to track anything I was accountable for, I showed it to the founder in our weekly 1:1 meeting. Right there I added him to the board via email invitation, in a couple clicks. From then on Trello boards served as guides for everyone’s check-ins with him. And within a few weeks our entire 50 person team was using Trello to manage various projects, with some smaller groups upgrading to a premium plan. Such is the power of word of mouth in a B2B setting. Or one form of it. My Trello experience is a great example of internal WOM, coworker referral. But there are other forms. And all combine to make word of mouth the single greatest driver of B2B customer growth. Don’t believe me? Customers say it’s the most important influence in their buying decisions. Founders say it’s the most important customer acquisition channel, whether at the earliest stage or at scale. 91% of B2B buyers are influenced by word-of-mouth when making their buying decision. [USM] 61% of IT buyers report that colleague recommendations are the most important factor when making a purchase decision. [B to B Magazine] WOM is the leading influence in purchasing decision in developing markets. [McKinsey & Company] “Ultimately, almost all software companies end up getting ~80% or so of their new customers from their existing customers once they hit scale. From referrals. From brand. From word of mouth.” [Jason Lemkin] Source: mckinsey.com. McKinsey’s data shows that word of mouth is a top influence in consumer behavior, the highest in developing markets. On top of all of this, word of mouth helps you outperform competitors. “For those unsure about actively managing word of mouth, consider this: the incremental gain from outperforming competitors with superior television ads, for example, is relatively small. That’s because all companies actively manage their traditional marketing activities and all have similar knowledge. With so few companies actively managing word of mouth—the most powerful form of marketing—the potential upside is exponentially greater.” McKinsey Scratch “superior television ads” for something more modern and digital, like adwords and SEO, and you have the case for B2B WOM management. Whether it’s gaining a new customer, or expanding the volume of a customer (i.e. the number of seats they pay for), WOM is most likely the driving force behind that growth. WOM can work differently for B2B. And within B2B, differently between small business customers and enterprise customers. The trick is to know the who, what, when, where, and why. Once you know those things, you can harness word of mouth and even spur it on. Why people share To dive deep into the psychology of WOM… Jonah Berger, a marketing professor at Wharton, published Contagious: Why Things Catch On. In it, he examines why some products get more word of mouth than others, and “how consumers make decisions, how ideas diffuse, and how social influence leads people to imitate (or avoid) what others are doing.” He boils contagion — or viral popularity, if you prefer that — down to 6 principles: Social Currency Triggers Emotions Public (Observability) Practical value Stories As I explore word of mouth and how it works for B2B in particular, I’ll point out where Berger’s principles apply. So, why do B2B customers share? The most basic reason someone would share is that… you’ve made a great product. You’ve solved a real problem in a compelling way. “If your product is good and solves a need better than other existing solutions, you should experience steady growth just from word of mouth. That’s a big indicator of product/market fit – and if it’s not happening, you know that you haven’t achieved PMF yet.” – Steli Efti They want their brand or company to be perceived in a certain way, particularly cool or innovative. Jonah Berger’s principle #1, Social Currency This is especially the case with enterprise customers, who are notoriously more careful about sharing with products they use, much less endorsing them. So, how do you go about encouraging a perception that being associated with your product or company is cool or innovative? Focus on your positioning, your branding, and your content marketing. Their experience differs from their expectation. Satisfied customers aren’t necessarily the ones who will talk. It’s the ones who are surprised, delighted, by features or benefits that really matter to them. So, under promise and over deliver. Jolt your customers out of their expectations, in a good way. Jonah Berger’s principle #3, Emotion Where do B2B customers share? Person to person “56% of B2B purchasers look to offline word-of-mouth as a source of information and advice.” BaseOne The age-old form of word of mouth. While 56% isn’t a huge majority, the value of offline WOM largely lies in its effectiveness. A trusted source like family, a friend, or a coworker is what McKinsey calls a high-impact reference. High-impact references are 50x more likely to trigger a purchase. Online “75% of buyers consulted online reviews before making purchasing decisions about business software.” SoftwareAdvice Online sources are generally considered low-impact references. But specifically in the B2B community, online reviews can be a more trusted source because it’s all within a qualified network. Readers know reviews are written by fellow business owners, by people who are familiar with the industry or business model. So in B2B, online reviews might carry more weight than in B2C. A few popular destinations for B2B customer reviews are these online directories: GetApp G2 Crowd FinancesOnline How you can harness the word of mouth already out there Find out exactly what your customers are saying Why? According to McKinsey, what is said is the primary driver of WOM’s impact on another consumer. How? Lincoln Murphy recommends a short, sweet tool for picking up valuable extra information. When a customer says they heard about you from a friend, simply follow up with, “What’d they tell you?” It’s like listening in on their conversation, insight you’d never get otherwise. “The real why,” as Murphy says. And what do you do next? Use customer WOM to drive your content marketing. Maintain a robust presence online, and keep benefits top of mind. If people are frequently reminded of your product, they talk about it more often. Link your product to parts of their daily environment; associate it with some part of their daily routine. Jonah Berger’s principle #2, Triggers Offer advice, tips, and other how-to content, based around what you know customers appreciate about your product. McKinsey says the value of B2B WOM is less about emotional positioning and more about functional messages. Jonah Berger’s principle #5, Practical value Write customer stories and testimonials. This is key! Provide customers with a place to share their positive experiences. To learn what your customers really think, gather rich feedback, and craft a knockout customer story, read this piece on how to conduct a successful customer interview. Jonah Berger’s principle #6, Stories How to kickstart more WOM for your business Conduct an NPS survey to identify customers with word-of-mouth potential The Net Promoter Score metric gauges a simple and timeless customer sentiment: “How likely are you to recommend us to a friend or colleague?” Each customer gives a score between 0 and 10, which — aggregated together — yields your company’s Net Promoter Score. The customers that mark you 9 or 10 are likely to actively recommend your company to others. When you land in the 9s and 10s for some customers, you know these are your WOM targets: if they’re not already talking about you, they probably will. So, try directly asking them to recommend your company. Implement a referral marketing program How to reward One-way referral. Ask your existing users to suggest the product to a friend. When the friend signs up, reward your existing customer. This benefits the referrer only. Two-way referral. Ask your existing users to suggest the product to a friend. Then, when the friend signs up, you reward both parties. The existing user and the referred customer both benefit. This double-sided incentive model has proven very successful. Trello in fact has a great example of a referral marketing strategy. The page for their paid plan, Trello Gold, features their referral marketing program right next to the option to upgrade via payment. The reward proposition — a temporary plan upgrade — is laid out clearly, with some extra copy highlighting the benefits you’ll enjoy with Trello Gold. Then the ways to recommend Trello are listed — and linked to the appropriate channels for quick-and-easy referring on the spot. Trello even gamifies the customer’s referring performance, displaying a progress bar and total counts of new signups. Gamification can motivate a customer to stay active and keep sharing your product. Well, this image is a little sad, as I’ve clearly not started my Trello referral campaign — not yet. But you get the idea. What to offer as a reward The reward is up to you, from a free trial extension, temporary plan upgrade, payment discounts, or other perks. Test and see what incentivizes your customers most. But beware offering an incentive that’s too high, that’s too good. This can work against you as you’re not really promoting “true” WOM. Constant referrals will make it clear that existing customers are acting more for their own benefit and not genuine recommendation, and the pool of potential customers — flooded with referral requests — will tune out your brand. A note on influencers There’s lots of talk about creating “brand advocates” through “influencers” — but it takes serious time and energy to develop these relationships, and there’s no solid proof that they are any more effective than the options listed above. Better to utilize the influencer base you already have: your happy customers. What about viral marketing? Some products are inherently “viral” — which is to say they’re about sharing or collaborating, such as Dropbox, Hackpad, and Slack. But by and large, virality just isn’t baked into most B2B products. Jason Lemkin talks about what’s called the low “viral coefficient” for B2B. “I’d say typically, SaaS apps don’t have enough customers to see the material, economic benefits of viral revenue until they cross $1m-$2m in ARR at the earliest.” Still, there are a couple of simple tactics you can employ to improve your product’s reach and exposure. As Kissmetrics puts it, virality is a design principle. Make your product as shareable and as visible as possible. Jonah Berger’s principle #4, Public Make it really convenient to invite other users Integrate your product with Google so people can easily fetch email contacts. Provide links to social media platforms. Auto-fill any messages. Yesware does all of this and more on their referral page. Anything a user can share directly from your product, put your logo on it This is often called passive sharing, and it works whether you provide invoices, reports, designs, email campaigns, etc. Mailchimp puts their logo as a footnote at the end of every email sent through their service, which is well over 80 million emails per day. There’s also the familiar ”powered by” widgets. Typeform is an excellent example of this tactic, as you can see in one of their mock surveys. Clicking on “Powered by Typeform” takes you directly to their “Create a form” page, bringing potential users to the point of conversion in an instant. Takeaways Word of mouth is the single greatest driver of B2B customer growth. Infuse customer word of mouth into your content marketing strategy to amplify its influence. Conduct an NPS survey to identify active referrers in your existing customer base. Test a referral campaign to acquire new customers. Insert viral design tactics into your product to make your brand more visible. All in all, you’re leaving a lot of opportunity on the table if you aren’t paying attention to what your customers are saying. Harness customer loyalty and make it work for you! And of course, you should measure all of the activity and efforts around word of mouth. Put a system in place to capture statistics around referred customers, through both informal WOM and referral marketing. Then optimize as you go and reap the benefits. </sys

How Zapier, an API SaaS pioneer, views the industry today. In many ways, the success of Zapier is an indication of the times. The company and product seem to reflect all the trends in the SaaS industry today, even though the company started back in 2011. Ed Shelley spoke with co-founder and CEO, Wade Foster, about not only the growth of Zapier, but also their foresight and current perspective on API SaaS. Ed: Wade, thanks so much for joining me. Wade: Thanks for having me! I’m excited. Ed: I have such a huge list of questions that I’ve put together. Which probably reflects my enthusiasm for Zapier not just as a company and product, but I think you guys fit so well in certain trends in the SaaS industry today. Some of which we write about on a regular basis at ChartMogul. So it’d be great to get your input on some of that, too. We should start at the beginning. When people ask what Zapier is and what you do, what do you say? Wade: Zapier is a workflow automation app. It hooks into about 800 of the most popular SaaS web apps that you might use to get work done. You can set up automations between things like Salesforce, Google apps, Slack, Dropbox, ChartMogul, you name it. Ed: What’s the most common example you use to describe what Zapier can do? Wade: A simple thing I do is that every time I get an email in Gmail that has an attachment, save the attachment to Dropbox. But you can also get a lot more creative in the things you can do. You can chain events across multiple apps and build really complex workflows. So your limitation is really your creativity. You can also check out this interview on the SaaS Open Mic Podcast: The origins of Zapier Identifying a need Ed: If I’m right (correct me if I’m not), it seems you guys were founded in 2011. You’ve been through Y Combinator. You obviously raised money that way but are now a self-sufficient, profitable business. Is that right? Wade: Yep, you got it! Ed: Awesome! So in 2011, things looked a bit different in the SaaS space. And obviously, you guys must have had quite a bit of foresight to see this trend in apps that have a growing need to communicate with each other, especially in SaaS. and to fill that need with this automation tool. How did things look back then? And why did you decide to jump on building Zapier? Wade: So, we were freelancing back then, and we’d get approached now and again to build these one-off integrations. Like, get PayPal payments into Quickbooks, take a list of leads and push it into Salesforce, that sort of thing. My founder Ryan pitched me over instant message saying “Hey! I think we could build something that automates this stuff for folks.” And the timing was right. APIs were starting to come into their own. Stripe was just starting to get some very early momentum. Twilio was pretty hot back then. So these APIs were getting more love than they had gotten in the past. Ed: Fast forwarding to 2017, of course things have just increased in that same trend. We have businesses now that are purely API-based, so we’re talking API-first rather than products which support a programmatic interface. Was this something that you saw happening, or did you just act on a need you saw at the time? Wade: I guess it makes sense, you know. We’d seen Twilio, we’d seen Stripe. We’d seen the transaction email providers, like MailGun. It made sense that APIs would become more of a thing. Where you’d see companies like Lob, where you could do an API call to send a postcard. Or Checker, where you could do an API call to do a background check. So, you know, an API call does just this bit of functionality, and a company has abstracted all the messy work that goes into doing that stuff, behind the scenes for you. So it makes sense that lots of these things you might do in a business, that are just bits of functionality, would get abstracted into an API call. Overcoming business challenges Ed: Zapier is a product that is effectively a glue that holds all of these services together. And without a lot of these other platforms and partners that you have, the product isn’t really much in itself. It doesn’t work without all of these integrations that you’ve built. What are the challenges in building a business that relies so much on other platforms and services? Wade: Well the big one is that you don’t have full control over what happens, right? We have 800+ partners. We can influence them, and make suggestions and recommendations, and our ability to influence over time has grown… But at the end of the day, every single one of our partners —they set their own product roadmaps, they have their own business models, and they set their own timelines for when things ship. So we have to work with them on that. We might think something is the greatest thing in the world, and we might say, “Hey you guys should really do this. We think this will change how business operates” … And if they don’t buy into that, it probably won’t happen. So that’s a challenge. Of course, we have to deal with quality issues where API versions change and quality might degrade. So we have a bunch of alerting and monitoring in place to ensure that the quality of what you’re doing on Zapier stays super high. Early evolutions of Zapier, the business and the product Ed: You mentioned you have now 800 integrations. Back in the early days, I guess it was much harder to kickstart your growth, given you needed some integrations and a certain volume to convince people of the value of the service. I’m curious how you managed to do that in the beginning when you were starting from nothing. Wade: We basically just brute forced it. We looked around and made gut calls on what we thought were popular, so — “Hey, MailChimp is popular, let’s build an integration to MailChimp. Zendesk is popular, let’s build an integration to Zendesk. PayPal, let’s see if we can get PayPal on Zapier.” So we just went out and looked for the API docs. If the API docs were easy enough to work with, the app was popular, we just built it. And we started to set up a framework of how to build these so that it was a little more plug and play for us. So it was fast. We got to where we could build integrations in — well, now the docs are good and clean — we can build an integration in 15 minutes. Ed: Wow, okay. Did you see a tipping point where, at a certain size, people were more coming to you to propose partnerships? Wade: Yeah. When we had around 50 apps on Zapier, we started to get a lot more inbound interest, people wanting apps on Zapier. People would email us saying, “Why isn’t our app on Zapier?” or “Why isn’t this popular app on Zapier?” The answer was that we’re three guys brute forcing this. We can only build so many so fast. With that being the answer, we thought: How can we make this self-serve? How can empower others to build on Zapier? So in 2012, as we were going through Y combinator, the big thing we released that summer was our developer platform. Which allowed people to build the integrations into Zapier. Ed: One thing that’s really interesting to me as a marketing professional is approaching Zapier from a marketing perspective. I believe your background is in marketing too, right? It’s having a product that’s not inherently visual, and the challenge of marketing the value of Zapier when it’s very difficult to show that value, especially on a landing page or your website. It seems like it’s very example driven, and you have to convey the value through specific examples. Wade: You’re absolutely right. The thing we realized early on was that people wanted specific integrations. MailChimp had the integration directory, Salesforce had the app exchange, Quickbooks had apps.com. People were already looking in all these places for integrations, so we didn’t need to necessarily convince our earliest users to use an integration. They were already seeking that out. We basically just had to say, “Hey, we’ve got one!” We were the only person in town, more or less, that would offer that. For us it was like: Let’s target people who are looking for certain integrations and make sure they can find us. We didn’t have to say — “here’s what it looks like, these are the benefits, here’s all the features,” and that sort of thing. Instead, people just kind of knew. Ed: Okay, so I’m guessing the biggest way people find Zapier is through these existing integrations and app stores and marketplaces and things. Wade: Yes, that’s definitely a big way. Also just search, going into Google and searching if this thing exists. And now word of mouth is pretty big as well. Ed: Is there anything that has changed from your original vision for Zapier? Wade: Honestly, not too much. From the very get go, we wanted to build an integration hub, we wanted to build a way for people to connect apps. One big change was, about a year ago, we launched multi-step zaps so you could chain actions along. So that was a big improvement to the product that allowed people to do a lot of things you couldn’t do before. But that was more of an evolution and less of a “We didn’t expect this to happen” sort of thing. How Zapier thinks about pricing Why they added a freemium plan Ed: Another thing I wanted to talk about was pricing. It’s a huge topic and a lot of people in SaaS struggle, esp in the early days, to find a pricing model for their product. For a product that’s so focused around integrations and is an infrastructure product, I want to know why you guys decided to go with a Freemium model, and whether you think that was critical to your growth. Wade: So, we started not as freemium. For the first six months, we had a paid subscription model, with a free trial. And we did that because we had no money. We were a bootstrapped business; we had to make money. So we started that way. After YC, we decided to revisit it because we were able to get a little bit of money in the bank, and we thought maybe freemium is something that could work for us. And the big reasons we decided to try was 1) we realized the market of people who could use Zapier was massive, it was enormous. So we didn’t need everyone to pay us to make a really good business out of it. And 2) freemium really allowed people to get in and play with the product, and to figure out what they wanted to use it for. Because Zapier isn’t always a thing you can figure out right away, the very first thing. Sometimes you have to figure out: What’s the use case I want? How do I set this up? You have to plug in these other pieces. So while it’s easy to do that stuff, sometimes it needs that creative spark before you get started. And freemium allowed people to do that. Another thing freemium helped us with was our partnerships. It really helped to have that generous free plan to get partners to say, “Yeah I’m cool pointing my customers to Zapier because I know people can try it for free, and it’s easy to get started.” So it really made it easy for other partners to refer people to Zapier. Perceived value vs. actual value Ed: I think the other thing there, I can probably contribute here from a customer perspective, is that when you get that realization of value —when you’ve plugged things together and you’ve set up a flow that makes sense for you — the value becomes clear so quickly and so strongly, that it’s almost a no-brainer to fit that into your work process. And once you’ve done that, it’s such a sticky product that you almost can’t go back. You’ve added so much efficiency or saved so much time or simply achieved something you wouldn’t be able to achieve without the tool, that it’s just a no-brainer to become a paying customer at that point. Wade: Yes, like you said, once you automate away 2, 3, 4 hours of your week… are you really going to want to go back to the way it was before? You don’t. Another interesting thing that I think exists here, which I didn’t realize going in, but I saw a study done by IKEA where folks that bought things from IKEA and then built them — the act of going through and assembling IKEA furniture makes people value it much higher when they try to resell it. They try to sell it at a much higher rate than is reasonable. And the reason they say that is because folks went through the emotional attachment of building that thing. And Zapier has a bit of that, too. You make this little cool thing and at the end, you get it, and it’s like, “It works! This is awesome!” So you have an affinity towards it as well. Ed: That’s true. I can identify with that. We’ve built a pretty solid marketing flow for handling a lead pipeline, and it’s something that we’ve designed and created. It’s our thing. And we obviously optimize that over time and it’s still flexible and we can tweak it, but the sense of creation there is really strong. Trends in SaaS and where Zapier fits Why SaaS is not consolidating Ed: So I think a lot of the success of Zapier today at least is because we’ve seen a lot of this unbundling of SaaS products into very small, narrow solutions that solve one small problem. And obviously, we need all these different services to talk to each other if we want an efficient work process. If you look at a marketer’s software stack, actually it’s kind of insane. The number of different tools we use is way more than it would have been 10 years ago. How do you see this trend in the industry? A lot of people talk about the unbundling of SaaS, but it also seems there’s this cycle where things eventually consolidate again into big, single solutions. Is that something that you would agree with, or what do you think about that? Wade: The idea that things are consolidating is kind of nonsense. Yeah, in one or two situations there is some consolidation. But on the whole, it’s so easy to build an app nowadays! The tooling is so good that a single developer can build a small bit of functionality that solves a very specific, niche problem so quickly and so much better than a massive conglomerate of apps can. It just makes sense that there’s going to be this unbundling of point-specific apps, that do one thing, one thing really well, and they’re going to be the best at that one thing! I mean we mentioned the API-ification of all these things, and that’s part of it. Enterprise software is a different ball game where the bundling does make sense to a degree, and I understand why they’re looking for it. But for small or mid-market business, they don’t want these massive tools. They want one thing. “I just want to send an email to a customer. I just need to be able to text him when this happens.” They don’t want to add a lot of complexity to their life. They just want that one thing that allows them to get their message across to customers, or something like that. Ed: And I guess a selection of well-targeted small solutions is always going to be better than a large suite of applications, probably 70% of which are not designed for that person’s specific problem. Wade: Yeah! Exactly. That’s the challenge as you start to get bigger and you start to add multiple product lines. When you have multiple product lines, it’s like — well, which one is the most important? One is going to get more love than another one. So the other apps are kind of half baked compared to the main, principal app. And maybe they’re feature bloated. So when you sign up for these [as a user], it’s like — well, which pieces of this do I want to use? And because there’s so much other stuff going on, it can actually be harder to get started using it. The impact of integrations and accessibility Ed: We’re building all these services today that are built using APIs to communicate with each other and to integrate with different services. Do you have a vision for what the extension of this is? To me, there are still a lot of problems around integrating APIs. It’s still a highly technical job to do that. Is there some v2 of this where everything just talks to each other without the need for that? Wade: Well I think Zapier is a big part of the solution for some of this stuff. We have people now who are not engineers, but they’re using stuff like Twilio or Sendgrid and Stripe to deliver products to folks. Basic marketers who’ve never used an API call in their life are able to use tools like Zapier because they are easy to use. So it brings a level of accessibility to this functionality that you don’t get when you require the user to know what a CLI tool is or a coral request is. Ed: I guess there’s another part to this as well which is that companies who are building products today can much more easily become platforms, through Zapier and through integrating with your [sales]. It’s almost expected today that any product has a whole suite of integrations to connect the other services that you use. In fact, it’s almost infeasible to launch a product without that, I might argue. It might be a separate case. Is that how you think about this? Wade: Yeah, it’s really tough when you’re building your new app, and it’s very point-specific and it does one thing really well. You really do need to hook into an array of apps that your end user is going to be using in the workplace. I think we’ve all seen studies of the average small business using about a dozen apps in their line of work already. And if you can’t hook into that existing tooling that they’re using, those existing workflows, it’s going to make it harder for you to get adoption for your app. The SaaS metrics that power Zapier Ed: Obviously at ChartMogul, we’re obsessed with metrics, specifically those around SaaS and subscription businesses. I’d love to know what you guys use at Zapier, what kind of metrics you use internally to measure the success of the product. Wade: We’re looking at a handful of things on a weekly basis. Weekly sign up rate, to make sure we’re attracting new folks to the product. Activation rate, to make sure those people are becoming engaged with the product. We’re tracking our ability to drive expansion revenue, so to expand customers’ usage of the product, to go from using it for one thing to using it for five things. All the way down to eventually tracking the revenue growth that we’re generating, and how can we grow the business from there. Ed: Would you call yourself a data-driven business? How much do you lean on the numbers and metrics? Wade: I’d say we’re data-informed rather than data-driven. Not every decision has a number that goes with it. We definitely try to pull in and use data to help us make good decisions. But we’re also using a lot of qualitative data, from talking to customers, talking to partners… And we also feel that gut feel is a decent metric as well. We can consider ourselves experts because we’ve been in this a while now. Our guts are probably better than the average person at guessing on this stuff. So, in the absence of any data, I think that’s also a fair thing to do as well. Ed: I totally agree. If you have one metric that was to be your compass metric, the one that you watch to measure your success on a high level, which one would that be? Wade: New weekly active users. Ed: New weekly active users. Okay, interesting! I guess that’s something you guys follow closely, week to week. Wade: Yes, I’m looking at it every week. Ed: Cool. What kind of decisions or actions does that metric inform? Wade: Well, I think it informs two things, right? You’re looking at new weekly active users so it’s making sure that we’re driving new folks to the platform. That’s a big part of it. You’re not going to grow that number if you aren’t driving traffic and converting those into signups. You care about the active part because you don’t just want to drive junk to your site. You want people who are actually going to be the right people. And you care that it’s growing. So you want to make sure that every week you want to raise the bar on that as well. Ed: Yep. Almost every company has their own definition of success and their own custom metric to define it. So it’s really interesting to hear how different people see the success of their product, especially when it comes to engagement. Distributed SaaS a.k.a. Working (and hiring) remotely Ed: One last thing, which I have to ask because, again, it’s such a hot topic and you guys seem to have nailed so well the concept of a fully distributed, remote business. I guess the first question is: Why did you guys decide to build a completely remote company? Wade: Well it was mostly out of necessity. When we started Zapier, we were in Columbia, MO and we had no money. It started as a side project; it was a nights and weekends things. Out the gate, we were just working on Zapier whenever we could and wherever we could. So we got good at working this way, we got good at working through pull requests or through Trello cards or through chat. It came pretty naturally for us. And then after YC, when it came time to start hiring folks, we didn’t know anyone in the Bay Area because we’d only been there a few weeks, a couple months. The people that we did know were friends who happened to live elsewhere. So the first folks we hired were in Chicago and back in Missouri. So we started as a remote team and we just got good at it as we went along. The tooling is good enough now that you can really make this work. There were enough example companies to look at and say, “Yeah, other folks are doing this successfully. We think we can do it, too.” Ed: For those people who are starting a business today and are also considering going completely remote, what are the things you’d say are absolutely critical to get right? Wade: Pay attention to how you’re documenting your work. Out the gate, try to work in public, if you have teammates. Set up Slack and talk in public channels. Document pull requests and things like that. The toughest thing in remote is when knowledge is hidden, so try not to hide what you know. Ed: And when it comes to artifacts such as meetings and get-togethers, what do you guys have in terms of a structure that keeps you on the right path? Wade: For meetings, they always have an agenda and generally someone always takes notes in a Google Doc, and they always get published somewhere. So outcomes and action items are available if someone needs to know what happened. Ed: Do you think hiring is more difficult when you’re 100% remote? Wade: I actually think it’s easier. You’re not limited to the people within a 30-mile radius. So you’re able to hire from people across the world. Stack Overflow also just did a study that showed, I think, for 50% of people looking for jobs right now, working remotely is top-of-mind for them. That’s a huge portion of the market that cares about remote. So, I think it really does increase your visibility and access to candidates, which is great. Looking ahead Ed: Cool. What does 2017 hold for you guys? I’m sure you have big plans. What does the future of Zapier look like? Wade: Yeah! Good question. We actually just launched this past week a new version of our developer platform, that lets you build apps via a command line. It should make it a lot easier for folks who are building SaaS apps and have APIs to plug their apps into Zapier and make it easier for them to maintain. We’re also starting work on a team product. So it should make it easier to collaborate and work on your zaps as part of a group, in an organization. Ed: Sounds amazing! Wade, this has been really cool. Thanks for answering these questions. Where can people find out more? I’m assuming that you’re always hiring, so perhaps if you are, feel free to plug that. Wade: Yeah! Zapier.com — and you can check out our jobs page, zapier.com/jobs. We are hiring a lot right now, so smart folks who are interested, definitely check that out. And if you have any questions for me, I’m hanging out on Twitter @wadefoster, and wade@zapier.com is my email address. So, I’m happy to help.

[INST] How Zapier, an API SaaS pioneer, views the industry today [/INST]

In many ways, the success of Zapier is an indication of the times. The company and product seem to reflect all the trends in the SaaS industry today, even though the company started back in 2011. Ed Shelley spoke with co-founder and CEO, Wade Foster, about not only the growth of Zapier, but also their foresight and current perspective on API SaaS. Ed: Wade, thanks so much for joining me. Wade: Thanks for having me! I’m excited. Ed: I have such a huge list of questions that I’ve put together. Which probably reflects my enthusiasm for Zapier not just as a company and product, but I think you guys fit so well in certain trends in the SaaS industry today. Some of which we write about on a regular basis at ChartMogul. So it’d be great to get your input on some of that, too. We should start at the beginning. When people ask what Zapier is and what you do, what do you say? Wade: Zapier is a workflow automation app. It hooks into about 800 of the most popular SaaS web apps that you might use to get work done. You can set up automations between things like Salesforce, Google apps, Slack, Dropbox, ChartMogul, you name it. Ed: What’s the most common example you use to describe what Zapier can do? Wade: A simple thing I do is that every time I get an email in Gmail that has an attachment, save the attachment to Dropbox. But you can also get a lot more creative in the things you can do. You can chain events across multiple apps and build really complex workflows. So your limitation is really your creativity. You can also check out this interview on the SaaS Open Mic Podcast: The origins of Zapier Identifying a need Ed: If I’m right (correct me if I’m not), it seems you guys were founded in 2011. You’ve been through Y Combinator. You obviously raised money that way but are now a self-sufficient, profitable business. Is that right? Wade: Yep, you got it! Ed: Awesome! So in 2011, things looked a bit different in the SaaS space. And obviously, you guys must have had quite a bit of foresight to see this trend in apps that have a growing need to communicate with each other, especially in SaaS. and to fill that need with this automation tool. How did things look back then? And why did you decide to jump on building Zapier? Wade: So, we were freelancing back then, and we’d get approached now and again to build these one-off integrations. Like, get PayPal payments into Quickbooks, take a list of leads and push it into Salesforce, that sort of thing. My founder Ryan pitched me over instant message saying “Hey! I think we could build something that automates this stuff for folks.” And the timing was right. APIs were starting to come into their own. Stripe was just starting to get some very early momentum. Twilio was pretty hot back then. So these APIs were getting more love than they had gotten in the past. Ed: Fast forwarding to 2017, of course things have just increased in that same trend. We have businesses now that are purely API-based, so we’re talking API-first rather than products which support a programmatic interface. Was this something that you saw happening, or did you just act on a need you saw at the time? Wade: I guess it makes sense, you know. We’d seen Twilio, we’d seen Stripe. We’d seen the transaction email providers, like MailGun. It made sense that APIs would become more of a thing. Where you’d see companies like Lob, where you could do an API call to send a postcard. Or Checker, where you could do an API call to do a background check. So, you know, an API call does just this bit of functionality, and a company has abstracted all the messy work that goes into doing that stuff, behind the scenes for you. So it makes sense that lots of these things you might do in a business, that are just bits of functionality, would get abstracted into an API call. Overcoming business challenges Ed: Zapier is a product that is effectively a glue that holds all of these services together. And without a lot of these other platforms and partners that you have, the product isn’t really much in itself. It doesn’t work without all of these integrations that you’ve built. What are the challenges in building a business that relies so much on other platforms and services? Wade: Well the big one is that you don’t have full control over what happens, right? We have 800+ partners. We can influence them, and make suggestions and recommendations, and our ability to influence over time has grown… But at the end of the day, every single one of our partners —they set their own product roadmaps, they have their own business models, and they set their own timelines for when things ship. So we have to work with them on that. We might think something is the greatest thing in the world, and we might say, “Hey you guys should really do this. We think this will change how business operates” … And if they don’t buy into that, it probably won’t happen. So that’s a challenge. Of course, we have to deal with quality issues where API versions change and quality might degrade. So we have a bunch of alerting and monitoring in place to ensure that the quality of what you’re doing on Zapier stays super high. Early evolutions of Zapier, the business and the product Ed: You mentioned you have now 800 integrations. Back in the early days, I guess it was much harder to kickstart your growth, given you needed some integrations and a certain volume to convince people of the value of the service. I’m curious how you managed to do that in the beginning when you were starting from nothing. Wade: We basically just brute forced it. We looked around and made gut calls on what we thought were popular, so — “Hey, MailChimp is popular, let’s build an integration to MailChimp. Zendesk is popular, let’s build an integration to Zendesk. PayPal, let’s see if we can get PayPal on Zapier.” So we just went out and looked for the API docs. If the API docs were easy enough to work with, the app was popular, we just built it. And we started to set up a framework of how to build these so that it was a little more plug and play for us. So it was fast. We got to where we could build integrations in — well, now the docs are good and clean — we can build an integration in 15 minutes. Ed: Wow, okay. Did you see a tipping point where, at a certain size, people were more coming to you to propose partnerships? Wade: Yeah. When we had around 50 apps on Zapier, we started to get a lot more inbound interest, people wanting apps on Zapier. People would email us saying, “Why isn’t our app on Zapier?” or “Why isn’t this popular app on Zapier?” The answer was that we’re three guys brute forcing this. We can only build so many so fast. With that being the answer, we thought: How can we make this self-serve? How can empower others to build on Zapier? So in 2012, as we were going through Y combinator, the big thing we released that summer was our developer platform. Which allowed people to build the integrations into Zapier. Ed: One thing that’s really interesting to me as a marketing professional is approaching Zapier from a marketing perspective. I believe your background is in marketing too, right? It’s having a product that’s not inherently visual, and the challenge of marketing the value of Zapier when it’s very difficult to show that value, especially on a landing page or your website. It seems like it’s very example driven, and you have to convey the value through specific examples. Wade: You’re absolutely right. The thing we realized early on was that people wanted specific integrations. MailChimp had the integration directory, Salesforce had the app exchange, Quickbooks had apps.com. People were already looking in all these places for integrations, so we didn’t need to necessarily convince our earliest users to use an integration. They were already seeking that out. We basically just had to say, “Hey, we’ve got one!” We were the only person in town, more or less, that would offer that. For us it was like: Let’s target people who are looking for certain integrations and make sure they can find us. We didn’t have to say — “here’s what it looks like, these are the benefits, here’s all the features,” and that sort of thing. Instead, people just kind of knew. Ed: Okay, so I’m guessing the biggest way people find Zapier is through these existing integrations and app stores and marketplaces and things. Wade: Yes, that’s definitely a big way. Also just search, going into Google and searching if this thing exists. And now word of mouth is pretty big as well. Ed: Is there anything that has changed from your original vision for Zapier? Wade: Honestly, not too much. From the very get go, we wanted to build an integration hub, we wanted to build a way for people to connect apps. One big change was, about a year ago, we launched multi-step zaps so you could chain actions along. So that was a big improvement to the product that allowed people to do a lot of things you couldn’t do before. But that was more of an evolution and less of a “We didn’t expect this to happen” sort of thing. How Zapier thinks about pricing Why they added a freemium plan Ed: Another thing I wanted to talk about was pricing. It’s a huge topic and a lot of people in SaaS struggle, esp in the early days, to find a pricing model for their product. For a product that’s so focused around integrations and is an infrastructure product, I want to know why you guys decided to go with a Freemium model, and whether you think that was critical to your growth. Wade: So, we started not as freemium. For the first six months, we had a paid subscription model, with a free trial. And we did that because we had no money. We were a bootstrapped business; we had to make money. So we started that way. After YC, we decided to revisit it because we were able to get a little bit of money in the bank, and we thought maybe freemium is something that could work for us. And the big reasons we decided to try was 1) we realized the market of people who could use Zapier was massive, it was enormous. So we didn’t need everyone to pay us to make a really good business out of it. And 2) freemium really allowed people to get in and play with the product, and to figure out what they wanted to use it for. Because Zapier isn’t always a thing you can figure out right away, the very first thing. Sometimes you have to figure out: What’s the use case I want? How do I set this up? You have to plug in these other pieces. So while it’s easy to do that stuff, sometimes it needs that creative spark before you get started. And freemium allowed people to do that. Another thing freemium helped us with was our partnerships. It really helped to have that generous free plan to get partners to say, “Yeah I’m cool pointing my customers to Zapier because I know people can try it for free, and it’s easy to get started.” So it really made it easy for other partners to refer people to Zapier. Perceived value vs. actual value Ed: I think the other thing there, I can probably contribute here from a customer perspective, is that when you get that realization of value —when you’ve plugged things together and you’ve set up a flow that makes sense for you — the value becomes clear so quickly and so strongly, that it’s almost a no-brainer to fit that into your work process. And once you’ve done that, it’s such a sticky product that you almost can’t go back. You’ve added so much efficiency or saved so much time or simply achieved something you wouldn’t be able to achieve without the tool, that it’s just a no-brainer to become a paying customer at that point. Wade: Yes, like you said, once you automate away 2, 3, 4 hours of your week… are you really going to want to go back to the way it was before? You don’t. Another interesting thing that I think exists here, which I didn’t realize going in, but I saw a study done by IKEA where folks that bought things from IKEA and then built them — the act of going through and assembling IKEA furniture makes people value it much higher when they try to resell it. They try to sell it at a much higher rate than is reasonable. And the reason they say that is because folks went through the emotional attachment of building that thing. And Zapier has a bit of that, too. You make this little cool thing and at the end, you get it, and it’s like, “It works! This is awesome!” So you have an affinity towards it as well. Ed: That’s true. I can identify with that. We’ve built a pretty solid marketing flow for handling a lead pipeline, and it’s something that we’ve designed and created. It’s our thing. And we obviously optimize that over time and it’s still flexible and we can tweak it, but the sense of creation there is really strong. Trends in SaaS and where Zapier fits Why SaaS is not consolidating Ed: So I think a lot of the success of Zapier today at least is because we’ve seen a lot of this unbundling of SaaS products into very small, narrow solutions that solve one small problem. And obviously, we need all these different services to talk to each other if we want an efficient work process. If you look at a marketer’s software stack, actually it’s kind of insane. The number of different tools we use is way more than it would have been 10 years ago. How do you see this trend in the industry? A lot of people talk about the unbundling of SaaS, but it also seems there’s this cycle where things eventually consolidate again into big, single solutions. Is that something that you would agree with, or what do you think about that? Wade: The idea that things are consolidating is kind of nonsense. Yeah, in one or two situations there is some consolidation. But on the whole, it’s so easy to build an app nowadays! The tooling is so good that a single developer can build a small bit of functionality that solves a very specific, niche problem so quickly and so much better than a massive conglomerate of apps can. It just makes sense that there’s going to be this unbundling of point-specific apps, that do one thing, one thing really well, and they’re going to be the best at that one thing! I mean we mentioned the API-ification of all these things, and that’s part of it. Enterprise software is a different ball game where the bundling does make sense to a degree, and I understand why they’re looking for it. But for small or mid-market business, they don’t want these massive tools. They want one thing. “I just want to send an email to a customer. I just need to be able to text him when this happens.” They don’t want to add a lot of complexity to their life. They just want that one thing that allows them to get their message across to customers, or something like that. Ed: And I guess a selection of well-targeted small solutions is always going to be better than a large suite of applications, probably 70% of which are not designed for that person’s specific problem. Wade: Yeah! Exactly. That’s the challenge as you start to get bigger and you start to add multiple product lines. When you have multiple product lines, it’s like — well, which one is the most important? One is going to get more love than another one. So the other apps are kind of half baked compared to the main, principal app. And maybe they’re feature bloated. So when you sign up for these [as a user], it’s like — well, which pieces of this do I want to use? And because there’s so much other stuff going on, it can actually be harder to get started using it. The impact of integrations and accessibility Ed: We’re building all these services today that are built using APIs to communicate with each other and to integrate with different services. Do you have a vision for what the extension of this is? To me, there are still a lot of problems around integrating APIs. It’s still a highly technical job to do that. Is there some v2 of this where everything just talks to each other without the need for that? Wade: Well I think Zapier is a big part of the solution for some of this stuff. We have people now who are not engineers, but they’re using stuff like Twilio or Sendgrid and Stripe to deliver products to folks. Basic marketers who’ve never used an API call in their life are able to use tools like Zapier because they are easy to use. So it brings a level of accessibility to this functionality that you don’t get when you require the user to know what a CLI tool is or a coral request is. Ed: I guess there’s another part to this as well which is that companies who are building products today can much more easily become platforms, through Zapier and through integrating with your [sales]. It’s almost expected today that any product has a whole suite of integrations to connect the other services that you use. In fact, it’s almost infeasible to launch a product without that, I might argue. It might be a separate case. Is that how you think about this? Wade: Yeah, it’s really tough when you’re building your new app, and it’s very point-specific and it does one thing really well. You really do need to hook into an array of apps that your end user is going to be using in the workplace. I think we’ve all seen studies of the average small business using about a dozen apps in their line of work already. And if you can’t hook into that existing tooling that they’re using, those existing workflows, it’s going to make it harder for you to get adoption for your app. The SaaS metrics that power Zapier Ed: Obviously at ChartMogul, we’re obsessed with metrics, specifically those around SaaS and subscription businesses. I’d love to know what you guys use at Zapier, what kind of metrics you use internally to measure the success of the product. Wade: We’re looking at a handful of things on a weekly basis. Weekly sign up rate, to make sure we’re attracting new folks to the product. Activation rate, to make sure those people are becoming engaged with the product. We’re tracking our ability to drive expansion revenue, so to expand customers’ usage of the product, to go from using it for one thing to using it for five things. All the way down to eventually tracking the revenue growth that we’re generating, and how can we grow the business from there. Ed: Would you call yourself a data-driven business? How much do you lean on the numbers and metrics? Wade: I’d say we’re data-informed rather than data-driven. Not every decision has a number that goes with it. We definitely try to pull in and use data to help us make good decisions. But we’re also using a lot of qualitative data, from talking to customers, talking to partners… And we also feel that gut feel is a decent metric as well. We can consider ourselves experts because we’ve been in this a while now. Our guts are probably better than the average person at guessing on this stuff. So, in the absence of any data, I think that’s also a fair thing to do as well. Ed: I totally agree. If you have one metric that was to be your compass metric, the one that you watch to measure your success on a high level, which one would that be? Wade: New weekly active users. Ed: New weekly active users. Okay, interesting! I guess that’s something you guys follow closely, week to week. Wade: Yes, I’m looking at it every week. Ed: Cool. What kind of decisions or actions does that metric inform? Wade: Well, I think it informs two things, right? You’re looking at new weekly active users so it’s making sure that we’re driving new folks to the platform. That’s a big part of it. You’re not going to grow that number if you aren’t driving traffic and converting those into signups. You care about the active part because you don’t just want to drive junk to your site. You want people who are actually going to be the right people. And you care that it’s growing. So you want to make sure that every week you want to raise the bar on that as well. Ed: Yep. Almost every company has their own definition of success and their own custom metric to define it. So it’s really interesting to hear how different people see the success of their product, especially when it comes to engagement. Distributed SaaS a.k.a. Working (and hiring) remotely Ed: One last thing, which I have to ask because, again, it’s such a hot topic and you guys seem to have nailed so well the concept of a fully distributed, remote business. I guess the first question is: Why did you guys decide to build a completely remote company? Wade: Well it was mostly out of necessity. When we started Zapier, we were in Columbia, MO and we had no money. It started as a side project; it was a nights and weekends things. Out the gate, we were just working on Zapier whenever we could and wherever we could. So we got good at working this way, we got good at working through pull requests or through Trello cards or through chat. It came pretty naturally for us. And then after YC, when it came time to start hiring folks, we didn’t know anyone in the Bay Area because we’d only been there a few weeks, a couple months. The people that we did know were friends who happened to live elsewhere. So the first folks we hired were in Chicago and back in Missouri. So we started as a remote team and we just got good at it as we went along. The tooling is good enough now that you can really make this work. There were enough example companies to look at and say, “Yeah, other folks are doing this successfully. We think we can do it, too.” Ed: For those people who are starting a business today and are also considering going completely remote, what are the things you’d say are absolutely critical to get right? Wade: Pay attention to how you’re documenting your work. Out the gate, try to work in public, if you have teammates. Set up Slack and talk in public channels. Document pull requests and things like that. The toughest thing in remote is when knowledge is hidden, so try not to hide what you know. Ed: And when it comes to artifacts such as meetings and get-togethers, what do you guys have in terms of a structure that keeps you on the right path? Wade: For meetings, they always have an agenda and generally someone always takes notes in a Google Doc, and they always get published somewhere. So outcomes and action items are available if someone needs to know what happened. Ed: Do you think hiring is more difficult when you’re 100% remote? Wade: I actually think it’s easier. You’re not limited to the people within a 30-mile radius. So you’re able to hire from people across the world. Stack Overflow also just did a study that showed, I think, for 50% of people looking for jobs right now, working remotely is top-of-mind for them. That’s a huge portion of the market that cares about remote. So, I think it really does increase your visibility and access to candidates, which is great. Looking ahead Ed: Cool. What does 2017 hold for you guys? I’m sure you have big plans. What does the future of Zapier look like? Wade: Yeah! Good question. We actually just launched this past week a new version of our developer platform, that lets you build apps via a command line. It should make it a lot easier for folks who are building SaaS apps and have APIs to plug their apps into Zapier and make it easier for them to maintain. We’re also starting work on a team product. So it should make it easier to collaborate and work on your zaps as part of a group, in an organization. Ed: Sounds amazing! Wade, this has been really cool. Thanks for answering these questions. Where can people find out more? I’m assuming that you’re always hiring, so perhaps if you are, feel free to plug that. Wade: Yeah! Zapier.com — and you can check out our jobs page, zapier.com/jobs. We are hiring a lot right now, so smart folks who are interested, definitely check that out. And if you have any questions for me, I’m hanging out on Twitter @wadefoster, and wade@zapier.com is my email address. So, I’m happy to help.

<sys> [INST] How Zapier, an API SaaS pioneer, views the industry today [/INST] In many ways, the success of Zapier is an indication of the times. The company and product seem to reflect all the trends in the SaaS industry today, even though the company started back in 2011. Ed Shelley spoke with co-founder and CEO, Wade Foster, about not only the growth of Zapier, but also their foresight and current perspective on API SaaS. Ed: Wade, thanks so much for joining me. Wade: Thanks for having me! I’m excited. Ed: I have such a huge list of questions that I’ve put together. Which probably reflects my enthusiasm for Zapier not just as a company and product, but I think you guys fit so well in certain trends in the SaaS industry today. Some of which we write about on a regular basis at ChartMogul. So it’d be great to get your input on some of that, too. We should start at the beginning. When people ask what Zapier is and what you do, what do you say? Wade: Zapier is a workflow automation app. It hooks into about 800 of the most popular SaaS web apps that you might use to get work done. You can set up automations between things like Salesforce, Google apps, Slack, Dropbox, ChartMogul, you name it. Ed: What’s the most common example you use to describe what Zapier can do? Wade: A simple thing I do is that every time I get an email in Gmail that has an attachment, save the attachment to Dropbox. But you can also get a lot more creative in the things you can do. You can chain events across multiple apps and build really complex workflows. So your limitation is really your creativity. You can also check out this interview on the SaaS Open Mic Podcast: The origins of Zapier Identifying a need Ed: If I’m right (correct me if I’m not), it seems you guys were founded in 2011. You’ve been through Y Combinator. You obviously raised money that way but are now a self-sufficient, profitable business. Is that right? Wade: Yep, you got it! Ed: Awesome! So in 2011, things looked a bit different in the SaaS space. And obviously, you guys must have had quite a bit of foresight to see this trend in apps that have a growing need to communicate with each other, especially in SaaS. and to fill that need with this automation tool. How did things look back then? And why did you decide to jump on building Zapier? Wade: So, we were freelancing back then, and we’d get approached now and again to build these one-off integrations. Like, get PayPal payments into Quickbooks, take a list of leads and push it into Salesforce, that sort of thing. My founder Ryan pitched me over instant message saying “Hey! I think we could build something that automates this stuff for folks.” And the timing was right. APIs were starting to come into their own. Stripe was just starting to get some very early momentum. Twilio was pretty hot back then. So these APIs were getting more love than they had gotten in the past. Ed: Fast forwarding to 2017, of course things have just increased in that same trend. We have businesses now that are purely API-based, so we’re talking API-first rather than products which support a programmatic interface. Was this something that you saw happening, or did you just act on a need you saw at the time? Wade: I guess it makes sense, you know. We’d seen Twilio, we’d seen Stripe. We’d seen the transaction email providers, like MailGun. It made sense that APIs would become more of a thing. Where you’d see companies like Lob, where you could do an API call to send a postcard. Or Checker, where you could do an API call to do a background check. So, you know, an API call does just this bit of functionality, and a company has abstracted all the messy work that goes into doing that stuff, behind the scenes for you. So it makes sense that lots of these things you might do in a business, that are just bits of functionality, would get abstracted into an API call. Overcoming business challenges Ed: Zapier is a product that is effectively a glue that holds all of these services together. And without a lot of these other platforms and partners that you have, the product isn’t really much in itself. It doesn’t work without all of these integrations that you’ve built. What are the challenges in building a business that relies so much on other platforms and services? Wade: Well the big one is that you don’t have full control over what happens, right? We have 800+ partners. We can influence them, and make suggestions and recommendations, and our ability to influence over time has grown… But at the end of the day, every single one of our partners —they set their own product roadmaps, they have their own business models, and they set their own timelines for when things ship. So we have to work with them on that. We might think something is the greatest thing in the world, and we might say, “Hey you guys should really do this. We think this will change how business operates” … And if they don’t buy into that, it probably won’t happen. So that’s a challenge. Of course, we have to deal with quality issues where API versions change and quality might degrade. So we have a bunch of alerting and monitoring in place to ensure that the quality of what you’re doing on Zapier stays super high. Early evolutions of Zapier, the business and the product Ed: You mentioned you have now 800 integrations. Back in the early days, I guess it was much harder to kickstart your growth, given you needed some integrations and a certain volume to convince people of the value of the service. I’m curious how you managed to do that in the beginning when you were starting from nothing. Wade: We basically just brute forced it. We looked around and made gut calls on what we thought were popular, so — “Hey, MailChimp is popular, let’s build an integration to MailChimp. Zendesk is popular, let’s build an integration to Zendesk. PayPal, let’s see if we can get PayPal on Zapier.” So we just went out and looked for the API docs. If the API docs were easy enough to work with, the app was popular, we just built it. And we started to set up a framework of how to build these so that it was a little more plug and play for us. So it was fast. We got to where we could build integrations in — well, now the docs are good and clean — we can build an integration in 15 minutes. Ed: Wow, okay. Did you see a tipping point where, at a certain size, people were more coming to you to propose partnerships? Wade: Yeah. When we had around 50 apps on Zapier, we started to get a lot more inbound interest, people wanting apps on Zapier. People would email us saying, “Why isn’t our app on Zapier?” or “Why isn’t this popular app on Zapier?” The answer was that we’re three guys brute forcing this. We can only build so many so fast. With that being the answer, we thought: How can we make this self-serve? How can empower others to build on Zapier? So in 2012, as we were going through Y combinator, the big thing we released that summer was our developer platform. Which allowed people to build the integrations into Zapier. Ed: One thing that’s really interesting to me as a marketing professional is approaching Zapier from a marketing perspective. I believe your background is in marketing too, right? It’s having a product that’s not inherently visual, and the challenge of marketing the value of Zapier when it’s very difficult to show that value, especially on a landing page or your website. It seems like it’s very example driven, and you have to convey the value through specific examples. Wade: You’re absolutely right. The thing we realized early on was that people wanted specific integrations. MailChimp had the integration directory, Salesforce had the app exchange, Quickbooks had apps.com. People were already looking in all these places for integrations, so we didn’t need to necessarily convince our earliest users to use an integration. They were already seeking that out. We basically just had to say, “Hey, we’ve got one!” We were the only person in town, more or less, that would offer that. For us it was like: Let’s target people who are looking for certain integrations and make sure they can find us. We didn’t have to say — “here’s what it looks like, these are the benefits, here’s all the features,” and that sort of thing. Instead, people just kind of knew. Ed: Okay, so I’m guessing the biggest way people find Zapier is through these existing integrations and app stores and marketplaces and things. Wade: Yes, that’s definitely a big way. Also just search, going into Google and searching if this thing exists. And now word of mouth is pretty big as well. Ed: Is there anything that has changed from your original vision for Zapier? Wade: Honestly, not too much. From the very get go, we wanted to build an integration hub, we wanted to build a way for people to connect apps. One big change was, about a year ago, we launched multi-step zaps so you could chain actions along. So that was a big improvement to the product that allowed people to do a lot of things you couldn’t do before. But that was more of an evolution and less of a “We didn’t expect this to happen” sort of thing. How Zapier thinks about pricing Why they added a freemium plan Ed: Another thing I wanted to talk about was pricing. It’s a huge topic and a lot of people in SaaS struggle, esp in the early days, to find a pricing model for their product. For a product that’s so focused around integrations and is an infrastructure product, I want to know why you guys decided to go with a Freemium model, and whether you think that was critical to your growth. Wade: So, we started not as freemium. For the first six months, we had a paid subscription model, with a free trial. And we did that because we had no money. We were a bootstrapped business; we had to make money. So we started that way. After YC, we decided to revisit it because we were able to get a little bit of money in the bank, and we thought maybe freemium is something that could work for us. And the big reasons we decided to try was 1) we realized the market of people who could use Zapier was massive, it was enormous. So we didn’t need everyone to pay us to make a really good business out of it. And 2) freemium really allowed people to get in and play with the product, and to figure out what they wanted to use it for. Because Zapier isn’t always a thing you can figure out right away, the very first thing. Sometimes you have to figure out: What’s the use case I want? How do I set this up? You have to plug in these other pieces. So while it’s easy to do that stuff, sometimes it needs that creative spark before you get started. And freemium allowed people to do that. Another thing freemium helped us with was our partnerships. It really helped to have that generous free plan to get partners to say, “Yeah I’m cool pointing my customers to Zapier because I know people can try it for free, and it’s easy to get started.” So it really made it easy for other partners to refer people to Zapier. Perceived value vs. actual value Ed: I think the other thing there, I can probably contribute here from a customer perspective, is that when you get that realization of value —when you’ve plugged things together and you’ve set up a flow that makes sense for you — the value becomes clear so quickly and so strongly, that it’s almost a no-brainer to fit that into your work process. And once you’ve done that, it’s such a sticky product that you almost can’t go back. You’ve added so much efficiency or saved so much time or simply achieved something you wouldn’t be able to achieve without the tool, that it’s just a no-brainer to become a paying customer at that point. Wade: Yes, like you said, once you automate away 2, 3, 4 hours of your week… are you really going to want to go back to the way it was before? You don’t. Another interesting thing that I think exists here, which I didn’t realize going in, but I saw a study done by IKEA where folks that bought things from IKEA and then built them — the act of going through and assembling IKEA furniture makes people value it much higher when they try to resell it. They try to sell it at a much higher rate than is reasonable. And the reason they say that is because folks went through the emotional attachment of building that thing. And Zapier has a bit of that, too. You make this little cool thing and at the end, you get it, and it’s like, “It works! This is awesome!” So you have an affinity towards it as well. Ed: That’s true. I can identify with that. We’ve built a pretty solid marketing flow for handling a lead pipeline, and it’s something that we’ve designed and created. It’s our thing. And we obviously optimize that over time and it’s still flexible and we can tweak it, but the sense of creation there is really strong. Trends in SaaS and where Zapier fits Why SaaS is not consolidating Ed: So I think a lot of the success of Zapier today at least is because we’ve seen a lot of this unbundling of SaaS products into very small, narrow solutions that solve one small problem. And obviously, we need all these different services to talk to each other if we want an efficient work process. If you look at a marketer’s software stack, actually it’s kind of insane. The number of different tools we use is way more than it would have been 10 years ago. How do you see this trend in the industry? A lot of people talk about the unbundling of SaaS, but it also seems there’s this cycle where things eventually consolidate again into big, single solutions. Is that something that you would agree with, or what do you think about that? Wade: The idea that things are consolidating is kind of nonsense. Yeah, in one or two situations there is some consolidation. But on the whole, it’s so easy to build an app nowadays! The tooling is so good that a single developer can build a small bit of functionality that solves a very specific, niche problem so quickly and so much better than a massive conglomerate of apps can. It just makes sense that there’s going to be this unbundling of point-specific apps, that do one thing, one thing really well, and they’re going to be the best at that one thing! I mean we mentioned the API-ification of all these things, and that’s part of it. Enterprise software is a different ball game where the bundling does make sense to a degree, and I understand why they’re looking for it. But for small or mid-market business, they don’t want these massive tools. They want one thing. “I just want to send an email to a customer. I just need to be able to text him when this happens.” They don’t want to add a lot of complexity to their life. They just want that one thing that allows them to get their message across to customers, or something like that. Ed: And I guess a selection of well-targeted small solutions is always going to be better than a large suite of applications, probably 70% of which are not designed for that person’s specific problem. Wade: Yeah! Exactly. That’s the challenge as you start to get bigger and you start to add multiple product lines. When you have multiple product lines, it’s like — well, which one is the most important? One is going to get more love than another one. So the other apps are kind of half baked compared to the main, principal app. And maybe they’re feature bloated. So when you sign up for these [as a user], it’s like — well, which pieces of this do I want to use? And because there’s so much other stuff going on, it can actually be harder to get started using it. The impact of integrations and accessibility Ed: We’re building all these services today that are built using APIs to communicate with each other and to integrate with different services. Do you have a vision for what the extension of this is? To me, there are still a lot of problems around integrating APIs. It’s still a highly technical job to do that. Is there some v2 of this where everything just talks to each other without the need for that? Wade: Well I think Zapier is a big part of the solution for some of this stuff. We have people now who are not engineers, but they’re using stuff like Twilio or Sendgrid and Stripe to deliver products to folks. Basic marketers who’ve never used an API call in their life are able to use tools like Zapier because they are easy to use. So it brings a level of accessibility to this functionality that you don’t get when you require the user to know what a CLI tool is or a coral request is. Ed: I guess there’s another part to this as well which is that companies who are building products today can much more easily become platforms, through Zapier and through integrating with your [sales]. It’s almost expected today that any product has a whole suite of integrations to connect the other services that you use. In fact, it’s almost infeasible to launch a product without that, I might argue. It might be a separate case. Is that how you think about this? Wade: Yeah, it’s really tough when you’re building your new app, and it’s very point-specific and it does one thing really well. You really do need to hook into an array of apps that your end user is going to be using in the workplace. I think we’ve all seen studies of the average small business using about a dozen apps in their line of work already. And if you can’t hook into that existing tooling that they’re using, those existing workflows, it’s going to make it harder for you to get adoption for your app. The SaaS metrics that power Zapier Ed: Obviously at ChartMogul, we’re obsessed with metrics, specifically those around SaaS and subscription businesses. I’d love to know what you guys use at Zapier, what kind of metrics you use internally to measure the success of the product. Wade: We’re looking at a handful of things on a weekly basis. Weekly sign up rate, to make sure we’re attracting new folks to the product. Activation rate, to make sure those people are becoming engaged with the product. We’re tracking our ability to drive expansion revenue, so to expand customers’ usage of the product, to go from using it for one thing to using it for five things. All the way down to eventually tracking the revenue growth that we’re generating, and how can we grow the business from there. Ed: Would you call yourself a data-driven business? How much do you lean on the numbers and metrics? Wade: I’d say we’re data-informed rather than data-driven. Not every decision has a number that goes with it. We definitely try to pull in and use data to help us make good decisions. But we’re also using a lot of qualitative data, from talking to customers, talking to partners… And we also feel that gut feel is a decent metric as well. We can consider ourselves experts because we’ve been in this a while now. Our guts are probably better than the average person at guessing on this stuff. So, in the absence of any data, I think that’s also a fair thing to do as well. Ed: I totally agree. If you have one metric that was to be your compass metric, the one that you watch to measure your success on a high level, which one would that be? Wade: New weekly active users. Ed: New weekly active users. Okay, interesting! I guess that’s something you guys follow closely, week to week. Wade: Yes, I’m looking at it every week. Ed: Cool. What kind of decisions or actions does that metric inform? Wade: Well, I think it informs two things, right? You’re looking at new weekly active users so it’s making sure that we’re driving new folks to the platform. That’s a big part of it. You’re not going to grow that number if you aren’t driving traffic and converting those into signups. You care about the active part because you don’t just want to drive junk to your site. You want people who are actually going to be the right people. And you care that it’s growing. So you want to make sure that every week you want to raise the bar on that as well. Ed: Yep. Almost every company has their own definition of success and their own custom metric to define it. So it’s really interesting to hear how different people see the success of their product, especially when it comes to engagement. Distributed SaaS a.k.a. Working (and hiring) remotely Ed: One last thing, which I have to ask because, again, it’s such a hot topic and you guys seem to have nailed so well the concept of a fully distributed, remote business. I guess the first question is: Why did you guys decide to build a completely remote company? Wade: Well it was mostly out of necessity. When we started Zapier, we were in Columbia, MO and we had no money. It started as a side project; it was a nights and weekends things. Out the gate, we were just working on Zapier whenever we could and wherever we could. So we got good at working this way, we got good at working through pull requests or through Trello cards or through chat. It came pretty naturally for us. And then after YC, when it came time to start hiring folks, we didn’t know anyone in the Bay Area because we’d only been there a few weeks, a couple months. The people that we did know were friends who happened to live elsewhere. So the first folks we hired were in Chicago and back in Missouri. So we started as a remote team and we just got good at it as we went along. The tooling is good enough now that you can really make this work. There were enough example companies to look at and say, “Yeah, other folks are doing this successfully. We think we can do it, too.” Ed: For those people who are starting a business today and are also considering going completely remote, what are the things you’d say are absolutely critical to get right? Wade: Pay attention to how you’re documenting your work. Out the gate, try to work in public, if you have teammates. Set up Slack and talk in public channels. Document pull requests and things like that. The toughest thing in remote is when knowledge is hidden, so try not to hide what you know. Ed: And when it comes to artifacts such as meetings and get-togethers, what do you guys have in terms of a structure that keeps you on the right path? Wade: For meetings, they always have an agenda and generally someone always takes notes in a Google Doc, and they always get published somewhere. So outcomes and action items are available if someone needs to know what happened. Ed: Do you think hiring is more difficult when you’re 100% remote? Wade: I actually think it’s easier. You’re not limited to the people within a 30-mile radius. So you’re able to hire from people across the world. Stack Overflow also just did a study that showed, I think, for 50% of people looking for jobs right now, working remotely is top-of-mind for them. That’s a huge portion of the market that cares about remote. So, I think it really does increase your visibility and access to candidates, which is great. Looking ahead Ed: Cool. What does 2017 hold for you guys? I’m sure you have big plans. What does the future of Zapier look like? Wade: Yeah! Good question. We actually just launched this past week a new version of our developer platform, that lets you build apps via a command line. It should make it a lot easier for folks who are building SaaS apps and have APIs to plug their apps into Zapier and make it easier for them to maintain. We’re also starting work on a team product. So it should make it easier to collaborate and work on your zaps as part of a group, in an organization. Ed: Sounds amazing! Wade, this has been really cool. Thanks for answering these questions. Where can people find out more? I’m assuming that you’re always hiring, so perhaps if you are, feel free to plug that. Wade: Yeah! Zapier.com — and you can check out our jobs page, zapier.com/jobs. We are hiring a lot right now, so smart folks who are interested, definitely check that out. And if you have any questions for me, I’m hanging out on Twitter @wadefoster, and wade@zapier.com is my email address. So, I’m happy to help. </sys

The Continuous Saga: how to keep a steady pace without breaking things. One of the most exciting and important moments for a product and engineering team is when you grow beyond 2-3 contributors to as many as 10-15. In my experience everyone is full of energy, is positive and is engaged — but with more hands on and ideas on the development lifecycle, there is more room for risks and roadblocks. Imagine a scenario like this… Your new, bigger team starts to implement multiple changes to the product(s), autonomously, in parallel and without the level of coordination that you used to have when there were just a few people. Sound familiar? At first, all is okay (exciting even) but in time, product starts to bleed from each and every angle. As a result, the team spends more time fighting fires and eventually, burnout sets in. One by one, each person becomes less engaged and as a team lead, you are left to pick up and resolve resulting personnel and product issues. As a functional team lead in product or in engineering, it is critical that you prevent a scenario like this in order to ensure the long term success of the business and of course, the happiness of your customers. Avoid the avoidable It’s been almost a decade since Jez Humble and David Farley released Continuous Delivery, in which they formalized state-of-the-art principles and practices to craft quality software at scale. The first iPad was just being released; Atari was still a company and Bitcoin was worth $0.01. Today continuous delivery is not just a nice-to-have — it is a must-have if your goal is to provide high value to your clients. However in order to talk about continuous delivery, we first need to have a broader conversation about what I call the continuous saga: continuous integration, continuous delivery and continuous deployment. Continuous Integration The youngest of the three was first mentioned in 1991 in the context of extreme programming. The goal of CI is simply to integrate and test every single change you add to your code base (aka product). So in other words, every time an engineer adds code to the version that is currently running in production, principles of CI mean that you are integrating and testing the full application before releasing it. So what? Continuous integration helps the overall product development process because it: Reduces the number of unknowns that you can find when features are merged (assuming you have a reliable test suite) Resolves, or at least mitigates, the “works on my machine” paradigm Assuming you run the test suite for each commit, CI reduces the probability that your change is not compatible with the codebase version There are plenty of resources and books about CI and there isn’t any reasonable motivation as to why you shouldn’t implement it. Continuous Delivery CI is necessary — but not sufficient alone. With continuous delivery you can take the maturity of your product development process a step further. Done right continuous delivery can add another layer of automation and security to your team’s operations. After a product version is validated, you package it and deploy it to a staging (or testing) environment. Automatically, without any human intervention. At that point if the team is happy with one of the versions they can then manually deploy to the production environment. In this case, the only required human intervention is to decide if a release is going to production or not. However, nothing needs to be prepared for that, everything is packaged, tested, and deployed in a test environment. As you can imagine continuous delivery is more complex to implement and requires a higher level of automation. The benefits, however, also are greater: Mitigates deployment risks. Smaller changes reduce the risk of deployment failures and make it easier to detect the root cause of identified issues. Decreases time to market. You no longer need to wait months or quarters to roll out a change incrementally. Instead, you can release on demand and involve more your customers in the discovery phase. Reduces costs. Continuous delivery eliminates fixed costs and frees up time for your team to focus on more important and less tedious tasks (don’t let people do what a machine can do). Helps to build better products. Faster, iterative deployment means more feedback from your customers faster. Continuous Deployment The final step of the continuous saga is another CD acronym, but this time the ‘D’ stand for deploy. The goal of this step and approach is to completely remove any human intervention. Any change that passes all quality and testing gates goes straight to production. I know — from the outside — it doesn’t look much different than continuous delivery, but the implications are enormous. Every time a single line of code is added to your code base, it’s also going directly to your customer hands without exception. This approach requires a high level of awareness and diligence in the team and in process. You don’t just need to be able to deploy fast, but you also need to recover fast in case of failures. High risk, high reward, right? When you remove transition time and the time/energy required by human coordination, your team can test more variations in shorter time and receive product feedback faster. The level of effectiveness that you can provide to your customers is directly proportional to your level of knowledge of their needs. The more and faster you know about customer needs, the better you can help them. What to do then? Which of these processes you’re able to employ depends on the level of maturity of your company and what your goals are. Not all companies can afford to implement continuous deployment, but it’s important to understand each area of process improvement and how they are connected to one another. You should focus your effort in implementing a solid and reliable first step before moving on to the next one. However, before rewriting guidelines and process, don’t forget to encourage the most important change — the one that takes place with your and the team’s mindset. Performance goes beyond process compliance. Failure to adjust your thinking will result in poor adoption and execution. In fact, I suspect that this is the reason why many companies still don’t do continuous delivery or fail to launch improved processes. Perhaps they see it as technical and execution activity, when in reality, the fundamentals are deeper and are tied to how you approach product development and who you are as a company.

[INST] The Continuous Saga: how to keep a steady pace without breaking things [/INST]

One of the most exciting and important moments for a product and engineering team is when you grow beyond 2-3 contributors to as many as 10-15. In my experience everyone is full of energy, is positive and is engaged — but with more hands on and ideas on the development lifecycle, there is more room for risks and roadblocks. Imagine a scenario like this… Your new, bigger team starts to implement multiple changes to the product(s), autonomously, in parallel and without the level of coordination that you used to have when there were just a few people. Sound familiar? At first, all is okay (exciting even) but in time, product starts to bleed from each and every angle. As a result, the team spends more time fighting fires and eventually, burnout sets in. One by one, each person becomes less engaged and as a team lead, you are left to pick up and resolve resulting personnel and product issues. As a functional team lead in product or in engineering, it is critical that you prevent a scenario like this in order to ensure the long term success of the business and of course, the happiness of your customers. Avoid the avoidable It’s been almost a decade since Jez Humble and David Farley released Continuous Delivery, in which they formalized state-of-the-art principles and practices to craft quality software at scale. The first iPad was just being released; Atari was still a company and Bitcoin was worth $0.01. Today continuous delivery is not just a nice-to-have — it is a must-have if your goal is to provide high value to your clients. However in order to talk about continuous delivery, we first need to have a broader conversation about what I call the continuous saga: continuous integration, continuous delivery and continuous deployment. Continuous Integration The youngest of the three was first mentioned in 1991 in the context of extreme programming. The goal of CI is simply to integrate and test every single change you add to your code base (aka product). So in other words, every time an engineer adds code to the version that is currently running in production, principles of CI mean that you are integrating and testing the full application before releasing it. So what? Continuous integration helps the overall product development process because it: Reduces the number of unknowns that you can find when features are merged (assuming you have a reliable test suite) Resolves, or at least mitigates, the “works on my machine” paradigm Assuming you run the test suite for each commit, CI reduces the probability that your change is not compatible with the codebase version There are plenty of resources and books about CI and there isn’t any reasonable motivation as to why you shouldn’t implement it. Continuous Delivery CI is necessary — but not sufficient alone. With continuous delivery you can take the maturity of your product development process a step further. Done right continuous delivery can add another layer of automation and security to your team’s operations. After a product version is validated, you package it and deploy it to a staging (or testing) environment. Automatically, without any human intervention. At that point if the team is happy with one of the versions they can then manually deploy to the production environment. In this case, the only required human intervention is to decide if a release is going to production or not. However, nothing needs to be prepared for that, everything is packaged, tested, and deployed in a test environment. As you can imagine continuous delivery is more complex to implement and requires a higher level of automation. The benefits, however, also are greater: Mitigates deployment risks. Smaller changes reduce the risk of deployment failures and make it easier to detect the root cause of identified issues. Decreases time to market. You no longer need to wait months or quarters to roll out a change incrementally. Instead, you can release on demand and involve more your customers in the discovery phase. Reduces costs. Continuous delivery eliminates fixed costs and frees up time for your team to focus on more important and less tedious tasks (don’t let people do what a machine can do). Helps to build better products. Faster, iterative deployment means more feedback from your customers faster. Continuous Deployment The final step of the continuous saga is another CD acronym, but this time the ‘D’ stand for deploy. The goal of this step and approach is to completely remove any human intervention. Any change that passes all quality and testing gates goes straight to production. I know — from the outside — it doesn’t look much different than continuous delivery, but the implications are enormous. Every time a single line of code is added to your code base, it’s also going directly to your customer hands without exception. This approach requires a high level of awareness and diligence in the team and in process. You don’t just need to be able to deploy fast, but you also need to recover fast in case of failures. High risk, high reward, right? When you remove transition time and the time/energy required by human coordination, your team can test more variations in shorter time and receive product feedback faster. The level of effectiveness that you can provide to your customers is directly proportional to your level of knowledge of their needs. The more and faster you know about customer needs, the better you can help them. What to do then? Which of these processes you’re able to employ depends on the level of maturity of your company and what your goals are. Not all companies can afford to implement continuous deployment, but it’s important to understand each area of process improvement and how they are connected to one another. You should focus your effort in implementing a solid and reliable first step before moving on to the next one. However, before rewriting guidelines and process, don’t forget to encourage the most important change — the one that takes place with your and the team’s mindset. Performance goes beyond process compliance. Failure to adjust your thinking will result in poor adoption and execution. In fact, I suspect that this is the reason why many companies still don’t do continuous delivery or fail to launch improved processes. Perhaps they see it as technical and execution activity, when in reality, the fundamentals are deeper and are tied to how you approach product development and who you are as a company.

<sys> [INST] The Continuous Saga: how to keep a steady pace without breaking things [/INST] One of the most exciting and important moments for a product and engineering team is when you grow beyond 2-3 contributors to as many as 10-15. In my experience everyone is full of energy, is positive and is engaged — but with more hands on and ideas on the development lifecycle, there is more room for risks and roadblocks. Imagine a scenario like this… Your new, bigger team starts to implement multiple changes to the product(s), autonomously, in parallel and without the level of coordination that you used to have when there were just a few people. Sound familiar? At first, all is okay (exciting even) but in time, product starts to bleed from each and every angle. As a result, the team spends more time fighting fires and eventually, burnout sets in. One by one, each person becomes less engaged and as a team lead, you are left to pick up and resolve resulting personnel and product issues. As a functional team lead in product or in engineering, it is critical that you prevent a scenario like this in order to ensure the long term success of the business and of course, the happiness of your customers. Avoid the avoidable It’s been almost a decade since Jez Humble and David Farley released Continuous Delivery, in which they formalized state-of-the-art principles and practices to craft quality software at scale. The first iPad was just being released; Atari was still a company and Bitcoin was worth $0.01. Today continuous delivery is not just a nice-to-have — it is a must-have if your goal is to provide high value to your clients. However in order to talk about continuous delivery, we first need to have a broader conversation about what I call the continuous saga: continuous integration, continuous delivery and continuous deployment. Continuous Integration The youngest of the three was first mentioned in 1991 in the context of extreme programming. The goal of CI is simply to integrate and test every single change you add to your code base (aka product). So in other words, every time an engineer adds code to the version that is currently running in production, principles of CI mean that you are integrating and testing the full application before releasing it. So what? Continuous integration helps the overall product development process because it: Reduces the number of unknowns that you can find when features are merged (assuming you have a reliable test suite) Resolves, or at least mitigates, the “works on my machine” paradigm Assuming you run the test suite for each commit, CI reduces the probability that your change is not compatible with the codebase version There are plenty of resources and books about CI and there isn’t any reasonable motivation as to why you shouldn’t implement it. Continuous Delivery CI is necessary — but not sufficient alone. With continuous delivery you can take the maturity of your product development process a step further. Done right continuous delivery can add another layer of automation and security to your team’s operations. After a product version is validated, you package it and deploy it to a staging (or testing) environment. Automatically, without any human intervention. At that point if the team is happy with one of the versions they can then manually deploy to the production environment. In this case, the only required human intervention is to decide if a release is going to production or not. However, nothing needs to be prepared for that, everything is packaged, tested, and deployed in a test environment. As you can imagine continuous delivery is more complex to implement and requires a higher level of automation. The benefits, however, also are greater: Mitigates deployment risks. Smaller changes reduce the risk of deployment failures and make it easier to detect the root cause of identified issues. Decreases time to market. You no longer need to wait months or quarters to roll out a change incrementally. Instead, you can release on demand and involve more your customers in the discovery phase. Reduces costs. Continuous delivery eliminates fixed costs and frees up time for your team to focus on more important and less tedious tasks (don’t let people do what a machine can do). Helps to build better products. Faster, iterative deployment means more feedback from your customers faster. Continuous Deployment The final step of the continuous saga is another CD acronym, but this time the ‘D’ stand for deploy. The goal of this step and approach is to completely remove any human intervention. Any change that passes all quality and testing gates goes straight to production. I know — from the outside — it doesn’t look much different than continuous delivery, but the implications are enormous. Every time a single line of code is added to your code base, it’s also going directly to your customer hands without exception. This approach requires a high level of awareness and diligence in the team and in process. You don’t just need to be able to deploy fast, but you also need to recover fast in case of failures. High risk, high reward, right? When you remove transition time and the time/energy required by human coordination, your team can test more variations in shorter time and receive product feedback faster. The level of effectiveness that you can provide to your customers is directly proportional to your level of knowledge of their needs. The more and faster you know about customer needs, the better you can help them. What to do then? Which of these processes you’re able to employ depends on the level of maturity of your company and what your goals are. Not all companies can afford to implement continuous deployment, but it’s important to understand each area of process improvement and how they are connected to one another. You should focus your effort in implementing a solid and reliable first step before moving on to the next one. However, before rewriting guidelines and process, don’t forget to encourage the most important change — the one that takes place with your and the team’s mindset. Performance goes beyond process compliance. Failure to adjust your thinking will result in poor adoption and execution. In fact, I suspect that this is the reason why many companies still don’t do continuous delivery or fail to launch improved processes. Perhaps they see it as technical and execution activity, when in reality, the fundamentals are deeper and are tied to how you approach product development and who you are as a company. </sys

How Agorapulse measures Marketing ROI with ChartMogul. The growing headache of social media management “One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to.” Ed: I would love to talk a bit about Agorapulse the product. I’m fairly new to the marketing world. I’ve been in the content game for just over a year or nearly two years. I find that the space is so overwhelming and noisy. There are a lot of products selling themselves as solutions for cutting through that noise and getting meaningful data about content marketing and the performance of it. I’m really interested to know how Agorapulse addresses it. I noticed on your site, you have this sentence: “Social media management is still seen by most businesses as a necessary evil. It’s overwhelming, noisy, chaotic, and nearly impossible to measure the value in their social media efforts.” It just resonated with me so much! I find that the social side of content is such a headache. How do you guys go about solving it? Emeric: First and foremost, that sentence you read is the result of a big round of interviews we did last year with 350 businesses actively managing social media. All 350 of them, each and every one of those businesses, came back with that feeling of: overwhelming, noisy, chaotic, impossible to measure the value, frustrating, necessary evil. (Laughs) I came up with the “necessary evil” sentence in the end, but that’s really what I felt. These people are managing their social media presence, but they don’t like it. Or if they like it, they like people and talking to people — that’s the part they like. But business wise, they are frustrated. And we decided from that day that this will be our big mission. This will be what we’ll be working on solving, as hard as we can. This being said, we are not there yet in solving it entirely. But we’ve made a lot of progress in a lot of different areas. One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to — giving you a clear picture of where you stand. With most other tools (not naming all of them, but for example the biggest one, HootSuite), you get in there and it’s total chaos. You have no idea where you are, you have bazillion feeds, you don’t even remember which feeds are for what. That’s my case after having used HootSuite for three years. I know it’s shared by a lot of people using HootSuite. They definitely don’t help you identify what needs to be done, and who needs a response, and what’s important in your inbox. That’s because they don’t have the concept of an inbox, they have the concept of feeds. A lot of social media management tools copy [the platforms] in that sense. And it’s not the way the human brain is used to functioning. The human brain is used to functioning with lists. We love to do lists, right? We love to check things as ‘Done.’ That’s why Gmail is like a list. You respond and the email goes away from your Unread inbox. That’s how we built the tool. To my knowledge, we’re the only tool engineered to work this way. That’s basically helping you to get to Inbox Zero, to know where things are and what to pay attention to. There are a ton of other little things. On Twitter there are a lot of people using automation, sending you auto messages that look like they’ve been sent by a robot. We have developed a specific engine that helps you get rid of them. Except for the inbox, which is one big thing and solves a big thing, everything else adds up small details and little features to remove that little pain in your butt — and this one and that one and this one! And hopefully, by the end of our journey, we’ll be solving so many of them that we’ll be really living up to our promise, which is making it easy, painless, and rewarding. Social media silos are problematic “I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end.” Ed: Okay! I feel like there’s maybe a breaking point for the social media marketer today. They’re forced to exist and interact within so many walled gardens, so many platforms. Do you think there’s a point where that has to change in some way, or do you think that just enables tools like your own for managing these platforms? Emeric: I’m afraid this is not going anywhere anytime soon. And when I say “I’m afraid this isn’t going anywhere anytime soon,” I mean it. Meaning I would love that to go away! I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end. Some platforms may not take off, like Google+. It hasn’t really taken off as an engaging, active platform so it’s getting less attention. But I’m still amazed by the number of people who want to publish on their Google+ page. Whether or not there’s engagement there, they want to have that as a channel for publishing content. So we added Google+ as a channel. So even if some of them are not that strategic or active or important, they exist. And [businesses] are on them, and they don’t want to be seen as not active, so they have to have content published there. And eventually if a guy leaves one comment back, they want to be in the know and be able to reply to that one comment. That’s the worst part: If you’re present somewhere and there’s one or two people commenting or getting back to you every month, it’s nothing, right? You could ignore them. But ignoring those one or two people may make you feel bad, and may trigger [this perception of] “Oh, those guys don’t care.” In the case that one of those people are important or an influencer or VIPs or whatever, if may even backfire for you. So it’s challenging. And I don’t think it’s going to get less challenging in the future. Ed: Yep. So I guess the only option is for a business to exist on pretty much every channel where there customers expect them to exist and to offer a good level of interaction in all of those places, right? Emeric: Yeah! Or… don’t exist in channels you know you’re not going to be able to handle. How Agorapulse leverages SaaS Metrics “…for us, now, what really makes a difference is the ability to segment.” I have a few questions about metrics and how you guys measure yourselves. At ChartMogul obviously metrics are our thing. So it’d be great to understand better how you guys are using ChartMogul right now and how you came to implement ChartMogul in your business processes. Where is the value for you? Emeric: We track all the typical saas metrics that any other saas company should be tracking: LTV, ARPU, ARR, MRR, Customer/net MRR churn. It’s interesting — when we started using ChartMogul that was two years ago. Probably very much at the beginning when you guys were starting out. We were using Recurly and not Stripe. At the time there was a solution from Stripe, your competitor, and we were totally frustrated by the analytics we had on Recurly, which was basically non-existent. When we discovered CM it was like, “Wow! This is exactly what we need!” We had started to build something on our own backend, in our own admin system, but it took us a lot of development work. And it wasn’t 10% as good as what ChartMogul was coming up with so we were thrilled at finally having a visualization of our metrics in a very easy-to-use, clear way. We were very happy about the basic segments by plan, by month, by cohort. Ed: And were you measuring these things previous to ChartMogul or did this give you new insights that you didn’t have before? Emeric: Yeah, with spreadsheets, I guess! It was a mess. It was not done well. So, we were happy about that. It was finally a way to visualize and get all the SaaS metrics we needed to follow up on. Then two years later, I’d say there are a couple of alternatives now. Some of them even are free. So the landscape has changed a little bit on what is the real value and now the big, big value proposition of ChartMogul is in the segment side of things. Everything else is still nice to have and cool to have, and for newbies it will probably still be an ‘aha’ moment like the one we had two years ago. But for us, now, what really makes a difference is the ability to segment. We did spend time to integrate our own data set into CM to create the right segments. As soon as you start getting a significant number of clients, above 500 or something, or significant MRR (above $50k), what you really need is not only to have your main SaaS metrics but to understand within those metrics how your different channels, types of users, and different tool usage actually plays out for you. And that’s where the segmentation changed the way we look at our business. How Segmentation insights helped Agorapulse pivot “The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: ‘Kill that business and go for this one.’ “ Emeric: There’s something specific about us that’s probably not very common, even though it’s probably shared by some SaaS businesses that have pivoted quite a bit. We started our business model five years ago on something, and we evolved it to something else. It’s connected but not the same thing. We were mainly used for FB contests and promotions five years ago, and now we’re really a full blown social media management software — which is still targeting the same audience but not for the same needs. So it’s a very different core product. When looking at our SaaS metrics aggregated, we have a false picture of our business. What really makes sense for us it to look is based on platform usage on our side. How is the business of people still using the contest [feature] going? How is the new business of people using the social media management features? And when we started getting more visibility on that thanks to segmentation, we were totally blown away by the results. That was like “OMG okay, now we get it. Theres the bad business. Theres the good business.” The problem is when you mix them together, you don’t have that sense. You don’t have the chance to see, “Ok that business is killing it. 20% growth MOM, very little churn, yada yada yada, like the ideal future unicorn. And this other business is like 15% churn, no growth, sucks. The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: “Kill that business and go for this one.” So, long story short, that is the reason for people to use ChartMogul. For the segmentation. And they have to implement every integration they can on their side to make sure they follow their big acquisition channel. Ed: That’s really interesting. And very insightful for us to know how you’re using that. Is ChartMogul a tool that’s used by a lot of different people in the company? How does it fit into your business? Emeric: Everyone at the company has access to ChartMogul. Not necessarily because they’re using all the nitty gritty of ChartMogul, but because they are all super excited when we grow! Even the tech guys, I think they log into CM three times a day to see how the day has been. It’s part of the dashboard of the company’s health and how the company is doing. When it comes to digging into the results and the segmented stuff, it’s not everybody — it’s like one or two people. How Agorapulse measures the ROI of their blog “If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different.” Ed: What kind of metrics are key to you for acquisition channels? If you were to just pick one or two metrics to measure your success, what would they be? Emeric: It’s a combination of MRR and Churn, which ends up being LTV eventually but starting with MRR. You always have to keep in mind that there are some metrics that you will get early on, like MRR, and there are metrics you’ll have to wait a year for an accurate measurement for, like LTV. So you can’t measure the effectiveness of your acquisition channels on LTV because basically you’ll be blind for a year or more. Even after a year your LTV is an unsure metric. You may not even have enough data to have an accurate LTV at this point, especially if the acquisition channel is small. If you’re only getting $1-2000 MRR on that channel, it may take forever before you have an accurate LTV you can rely on! So I first look at MRR, and after 6-8 months I look at Churn. You have to wait that 6-8 months for Churn numbers that are actually meaningful. So I would say in the first year, look at MRR. Ed: What kind of decisions does that enable for you? What decisions would you make based on the data you see? Emeric: Put more money in ads, or less. Or change the way you do ads. Stop trying to do outreach ads, and try to do retargeting or re-nurturing ads. It would have all sorts of impact on long-term decisions. For example, we’re doing a lot of blogging. When we looked at how blogging was impacting our bottom line, the only way we had to look at that was Google Analytics. So, basically looking at direct conversions from blog traffic, which is a super bad metric to look at because you have very little direct conversion from your blog traffic. That’s not the reason they came to you. And the conversion rate sucks, like 0._%. So it’s very disappointing. When my CTO would look at this, he would say, “Why are we blogging? What’s the point? It doesn’t help!” But as a marketer and a 15 year SaaS entrepreneur, I know there’s a point. I know it matters. I know it’s important. I know it’s more than a direct conversion, but it was so hard to give more metrics [to prove it]. Now what we’ve done is we’ve used MRR on everybody who had the blog as their first point of contact with us. Not the ads, not the referral, not Google — landing on the blog is the first time they see us. And then [we track] whatever they do after that: They see an ad, they read another blog post, they see something else, they read a review, and then they come back and they finally subscribe. We’ll count that MRR and we’ll attribute it to the blog, as the first point of contact. And the revenue there is quite significant, it’s actually pretty good. It’s definitely good enough to justify the effort on a pure conversion basis, not even mentioning the SEO, the credibility and everything else that a blog will give you. So it was good to see that! If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different. Ed: I think it’s such a common case of content marketer trying to sell content marketing internally in the business and getting acceptance for investing in great content. It’s something that not a lot of people can measure in this way, right now. But what you’ve just outlined completely turns the tables on that. Emeric: It’s a big problem. It’s very hard to measure these things. Usually when you’re small, just starting out, you don’t even worry about measuring those types of things. You go by gut feeling; you just do what you think is right and you don’t do it based on metrics. So thanks to that segmentation, we were able to get more metrics. For example, we basically saw that despite the fact we were spending as much money on Facebook ads as we were on content, content was bringing in more MRR than Facebook ads (as a first point of contact). And there’s all the side benefits [to content marketing], too, which makes it a no brainer! The primacy of your product and… knowing how to write! “Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product.” Ed: Just looking into your background, Agorapulse is not the first startup you’ve founded or been involved with. I’m also interested to see you’re coming from a law background. Do you see that as something that gives you an advantage or a different perspective on SaaS businesses? Emeric: The plusses are that, number 1, I know how to write, which is quite a skill you can use when you’re an entrepreneur on the business side. I know how to write things that people understand because I’ve been trained to write to convince people, to make my story go through. I have a very hard time finding it in the people I try to hire. The second advantage is that I’m not afraid of anything legal. When we did fundraising three years ago, I’m the only one that looked at the shareholders agreement and I told the guys, “Not this, not this, not that, move this, add that.” It gives me an advantage to not be afraid of these things and to save on legal fees because I don’t need lawyers. The third thing — which is related to the second — is that every time we do deals with people, i’m the one handling the writing. Were in the process of buying a company right now. I’m doing the LOI, the purchase agreement, because I’m actually faster at doing it. And I might actually be better than real lawyers, because a real lawyer who has no clue about your business will come up with a 30 page agreement, where ⅔ of which is meaningless! I just come up with 8-10 page agreement where everything is important. Ed: Ah, so it’s very much still an active role for you. Is there any advice you’d offer to people who are trying to navigate through the law associated to starting a business? Emeric: Yeah. Spend more time on contracts and corporation and structuring the investments, and spend more time on growing the business. Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product. We had the big agreement between the founders on paper, the shares we would have once we created the company and what’s expected from each founder. We had the big picture, basically, but we didn’t do any legal work until it was worth it. So my advice is: Basically, don’t even create a company until you have a product. Then implement a payment system, a bank account, and a company once you get to that point. But for the first six months, only worry about the product and the clients. What’s next for Agorapulse (and what they look for in a marketer) Ed: Great. I’d love to know what the future holds for you guys. I guess you’re still focused on building out the product, from the sound of it. Emeric: We’re in the process of raising money. So obviously one of the big milestones we’re looking for in 2016 is raising our Series A. In terms of big milestones for the team and the organization, we’ve never had an actual marketer on the team. I was basically acting as the CMO. I’m a founder so by definition not a CMO. Ed: I really need to ask you what you’re looking for in a marketer, if you’re hiring a marketer. Emeric: Experience. They need to have “been there, done that” with a SaaS business and know exactly what they’re doing. It’s very rare, but we’ve just found one and we’re excited about that. It’s going to bring a lot of structure and organization into how we do things, marketing wise. And I can already feel the difference. My way of doing that stuff was very freestyle… “Hey! Lets try this! Hey, why don’t we do that?” Ed: Which I think is very common. Emeric: Oh, it’s more than very common. Everybody does that, until they get to the point where they can afford someone who’s better than them at that. It’s not always bad — you move fast, you try a lot of things, you’re very lean. But it comes to a point… we’re at 1.5M ARR, so freestyle is not good enough for us now. We need to be very structured about what we do and why we do it. The third [thing in store for Agorapulse] is to continue to grow the product and keep the mission in mind. It’s critical that we make our users lives easier and create a “wow” experience when they get to the product. What I’d love is for them to feel, after a couple hours, “Oh my god, this is going to save me so much time. I’m going to be so much more efficient.” If we can get them to feel that, we win. Ed: Sure! Makes sense. Simple! Emeric: Yeah! The simplest things are the hardest to build. If you want to listen to the full interview, you can find it as part of the SaaS Open Mic podcast on SoundCloud (also below) or iTunes.

[INST] How Agorapulse measures Marketing ROI with ChartMogul [/INST]

The growing headache of social media management “One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to.” Ed: I would love to talk a bit about Agorapulse the product. I’m fairly new to the marketing world. I’ve been in the content game for just over a year or nearly two years. I find that the space is so overwhelming and noisy. There are a lot of products selling themselves as solutions for cutting through that noise and getting meaningful data about content marketing and the performance of it. I’m really interested to know how Agorapulse addresses it. I noticed on your site, you have this sentence: “Social media management is still seen by most businesses as a necessary evil. It’s overwhelming, noisy, chaotic, and nearly impossible to measure the value in their social media efforts.” It just resonated with me so much! I find that the social side of content is such a headache. How do you guys go about solving it? Emeric: First and foremost, that sentence you read is the result of a big round of interviews we did last year with 350 businesses actively managing social media. All 350 of them, each and every one of those businesses, came back with that feeling of: overwhelming, noisy, chaotic, impossible to measure the value, frustrating, necessary evil. (Laughs) I came up with the “necessary evil” sentence in the end, but that’s really what I felt. These people are managing their social media presence, but they don’t like it. Or if they like it, they like people and talking to people — that’s the part they like. But business wise, they are frustrated. And we decided from that day that this will be our big mission. This will be what we’ll be working on solving, as hard as we can. This being said, we are not there yet in solving it entirely. But we’ve made a lot of progress in a lot of different areas. One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to — giving you a clear picture of where you stand. With most other tools (not naming all of them, but for example the biggest one, HootSuite), you get in there and it’s total chaos. You have no idea where you are, you have bazillion feeds, you don’t even remember which feeds are for what. That’s my case after having used HootSuite for three years. I know it’s shared by a lot of people using HootSuite. They definitely don’t help you identify what needs to be done, and who needs a response, and what’s important in your inbox. That’s because they don’t have the concept of an inbox, they have the concept of feeds. A lot of social media management tools copy [the platforms] in that sense. And it’s not the way the human brain is used to functioning. The human brain is used to functioning with lists. We love to do lists, right? We love to check things as ‘Done.’ That’s why Gmail is like a list. You respond and the email goes away from your Unread inbox. That’s how we built the tool. To my knowledge, we’re the only tool engineered to work this way. That’s basically helping you to get to Inbox Zero, to know where things are and what to pay attention to. There are a ton of other little things. On Twitter there are a lot of people using automation, sending you auto messages that look like they’ve been sent by a robot. We have developed a specific engine that helps you get rid of them. Except for the inbox, which is one big thing and solves a big thing, everything else adds up small details and little features to remove that little pain in your butt — and this one and that one and this one! And hopefully, by the end of our journey, we’ll be solving so many of them that we’ll be really living up to our promise, which is making it easy, painless, and rewarding. Social media silos are problematic “I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end.” Ed: Okay! I feel like there’s maybe a breaking point for the social media marketer today. They’re forced to exist and interact within so many walled gardens, so many platforms. Do you think there’s a point where that has to change in some way, or do you think that just enables tools like your own for managing these platforms? Emeric: I’m afraid this is not going anywhere anytime soon. And when I say “I’m afraid this isn’t going anywhere anytime soon,” I mean it. Meaning I would love that to go away! I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end. Some platforms may not take off, like Google+. It hasn’t really taken off as an engaging, active platform so it’s getting less attention. But I’m still amazed by the number of people who want to publish on their Google+ page. Whether or not there’s engagement there, they want to have that as a channel for publishing content. So we added Google+ as a channel. So even if some of them are not that strategic or active or important, they exist. And [businesses] are on them, and they don’t want to be seen as not active, so they have to have content published there. And eventually if a guy leaves one comment back, they want to be in the know and be able to reply to that one comment. That’s the worst part: If you’re present somewhere and there’s one or two people commenting or getting back to you every month, it’s nothing, right? You could ignore them. But ignoring those one or two people may make you feel bad, and may trigger [this perception of] “Oh, those guys don’t care.” In the case that one of those people are important or an influencer or VIPs or whatever, if may even backfire for you. So it’s challenging. And I don’t think it’s going to get less challenging in the future. Ed: Yep. So I guess the only option is for a business to exist on pretty much every channel where there customers expect them to exist and to offer a good level of interaction in all of those places, right? Emeric: Yeah! Or… don’t exist in channels you know you’re not going to be able to handle. How Agorapulse leverages SaaS Metrics “…for us, now, what really makes a difference is the ability to segment.” I have a few questions about metrics and how you guys measure yourselves. At ChartMogul obviously metrics are our thing. So it’d be great to understand better how you guys are using ChartMogul right now and how you came to implement ChartMogul in your business processes. Where is the value for you? Emeric: We track all the typical saas metrics that any other saas company should be tracking: LTV, ARPU, ARR, MRR, Customer/net MRR churn. It’s interesting — when we started using ChartMogul that was two years ago. Probably very much at the beginning when you guys were starting out. We were using Recurly and not Stripe. At the time there was a solution from Stripe, your competitor, and we were totally frustrated by the analytics we had on Recurly, which was basically non-existent. When we discovered CM it was like, “Wow! This is exactly what we need!” We had started to build something on our own backend, in our own admin system, but it took us a lot of development work. And it wasn’t 10% as good as what ChartMogul was coming up with so we were thrilled at finally having a visualization of our metrics in a very easy-to-use, clear way. We were very happy about the basic segments by plan, by month, by cohort. Ed: And were you measuring these things previous to ChartMogul or did this give you new insights that you didn’t have before? Emeric: Yeah, with spreadsheets, I guess! It was a mess. It was not done well. So, we were happy about that. It was finally a way to visualize and get all the SaaS metrics we needed to follow up on. Then two years later, I’d say there are a couple of alternatives now. Some of them even are free. So the landscape has changed a little bit on what is the real value and now the big, big value proposition of ChartMogul is in the segment side of things. Everything else is still nice to have and cool to have, and for newbies it will probably still be an ‘aha’ moment like the one we had two years ago. But for us, now, what really makes a difference is the ability to segment. We did spend time to integrate our own data set into CM to create the right segments. As soon as you start getting a significant number of clients, above 500 or something, or significant MRR (above $50k), what you really need is not only to have your main SaaS metrics but to understand within those metrics how your different channels, types of users, and different tool usage actually plays out for you. And that’s where the segmentation changed the way we look at our business. How Segmentation insights helped Agorapulse pivot “The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: ‘Kill that business and go for this one.’ “ Emeric: There’s something specific about us that’s probably not very common, even though it’s probably shared by some SaaS businesses that have pivoted quite a bit. We started our business model five years ago on something, and we evolved it to something else. It’s connected but not the same thing. We were mainly used for FB contests and promotions five years ago, and now we’re really a full blown social media management software — which is still targeting the same audience but not for the same needs. So it’s a very different core product. When looking at our SaaS metrics aggregated, we have a false picture of our business. What really makes sense for us it to look is based on platform usage on our side. How is the business of people still using the contest [feature] going? How is the new business of people using the social media management features? And when we started getting more visibility on that thanks to segmentation, we were totally blown away by the results. That was like “OMG okay, now we get it. Theres the bad business. Theres the good business.” The problem is when you mix them together, you don’t have that sense. You don’t have the chance to see, “Ok that business is killing it. 20% growth MOM, very little churn, yada yada yada, like the ideal future unicorn. And this other business is like 15% churn, no growth, sucks. The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: “Kill that business and go for this one.” So, long story short, that is the reason for people to use ChartMogul. For the segmentation. And they have to implement every integration they can on their side to make sure they follow their big acquisition channel. Ed: That’s really interesting. And very insightful for us to know how you’re using that. Is ChartMogul a tool that’s used by a lot of different people in the company? How does it fit into your business? Emeric: Everyone at the company has access to ChartMogul. Not necessarily because they’re using all the nitty gritty of ChartMogul, but because they are all super excited when we grow! Even the tech guys, I think they log into CM three times a day to see how the day has been. It’s part of the dashboard of the company’s health and how the company is doing. When it comes to digging into the results and the segmented stuff, it’s not everybody — it’s like one or two people. How Agorapulse measures the ROI of their blog “If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different.” Ed: What kind of metrics are key to you for acquisition channels? If you were to just pick one or two metrics to measure your success, what would they be? Emeric: It’s a combination of MRR and Churn, which ends up being LTV eventually but starting with MRR. You always have to keep in mind that there are some metrics that you will get early on, like MRR, and there are metrics you’ll have to wait a year for an accurate measurement for, like LTV. So you can’t measure the effectiveness of your acquisition channels on LTV because basically you’ll be blind for a year or more. Even after a year your LTV is an unsure metric. You may not even have enough data to have an accurate LTV at this point, especially if the acquisition channel is small. If you’re only getting $1-2000 MRR on that channel, it may take forever before you have an accurate LTV you can rely on! So I first look at MRR, and after 6-8 months I look at Churn. You have to wait that 6-8 months for Churn numbers that are actually meaningful. So I would say in the first year, look at MRR. Ed: What kind of decisions does that enable for you? What decisions would you make based on the data you see? Emeric: Put more money in ads, or less. Or change the way you do ads. Stop trying to do outreach ads, and try to do retargeting or re-nurturing ads. It would have all sorts of impact on long-term decisions. For example, we’re doing a lot of blogging. When we looked at how blogging was impacting our bottom line, the only way we had to look at that was Google Analytics. So, basically looking at direct conversions from blog traffic, which is a super bad metric to look at because you have very little direct conversion from your blog traffic. That’s not the reason they came to you. And the conversion rate sucks, like 0._%. So it’s very disappointing. When my CTO would look at this, he would say, “Why are we blogging? What’s the point? It doesn’t help!” But as a marketer and a 15 year SaaS entrepreneur, I know there’s a point. I know it matters. I know it’s important. I know it’s more than a direct conversion, but it was so hard to give more metrics [to prove it]. Now what we’ve done is we’ve used MRR on everybody who had the blog as their first point of contact with us. Not the ads, not the referral, not Google — landing on the blog is the first time they see us. And then [we track] whatever they do after that: They see an ad, they read another blog post, they see something else, they read a review, and then they come back and they finally subscribe. We’ll count that MRR and we’ll attribute it to the blog, as the first point of contact. And the revenue there is quite significant, it’s actually pretty good. It’s definitely good enough to justify the effort on a pure conversion basis, not even mentioning the SEO, the credibility and everything else that a blog will give you. So it was good to see that! If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different. Ed: I think it’s such a common case of content marketer trying to sell content marketing internally in the business and getting acceptance for investing in great content. It’s something that not a lot of people can measure in this way, right now. But what you’ve just outlined completely turns the tables on that. Emeric: It’s a big problem. It’s very hard to measure these things. Usually when you’re small, just starting out, you don’t even worry about measuring those types of things. You go by gut feeling; you just do what you think is right and you don’t do it based on metrics. So thanks to that segmentation, we were able to get more metrics. For example, we basically saw that despite the fact we were spending as much money on Facebook ads as we were on content, content was bringing in more MRR than Facebook ads (as a first point of contact). And there’s all the side benefits [to content marketing], too, which makes it a no brainer! The primacy of your product and… knowing how to write! “Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product.” Ed: Just looking into your background, Agorapulse is not the first startup you’ve founded or been involved with. I’m also interested to see you’re coming from a law background. Do you see that as something that gives you an advantage or a different perspective on SaaS businesses? Emeric: The plusses are that, number 1, I know how to write, which is quite a skill you can use when you’re an entrepreneur on the business side. I know how to write things that people understand because I’ve been trained to write to convince people, to make my story go through. I have a very hard time finding it in the people I try to hire. The second advantage is that I’m not afraid of anything legal. When we did fundraising three years ago, I’m the only one that looked at the shareholders agreement and I told the guys, “Not this, not this, not that, move this, add that.” It gives me an advantage to not be afraid of these things and to save on legal fees because I don’t need lawyers. The third thing — which is related to the second — is that every time we do deals with people, i’m the one handling the writing. Were in the process of buying a company right now. I’m doing the LOI, the purchase agreement, because I’m actually faster at doing it. And I might actually be better than real lawyers, because a real lawyer who has no clue about your business will come up with a 30 page agreement, where ⅔ of which is meaningless! I just come up with 8-10 page agreement where everything is important. Ed: Ah, so it’s very much still an active role for you. Is there any advice you’d offer to people who are trying to navigate through the law associated to starting a business? Emeric: Yeah. Spend more time on contracts and corporation and structuring the investments, and spend more time on growing the business. Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product. We had the big agreement between the founders on paper, the shares we would have once we created the company and what’s expected from each founder. We had the big picture, basically, but we didn’t do any legal work until it was worth it. So my advice is: Basically, don’t even create a company until you have a product. Then implement a payment system, a bank account, and a company once you get to that point. But for the first six months, only worry about the product and the clients. What’s next for Agorapulse (and what they look for in a marketer) Ed: Great. I’d love to know what the future holds for you guys. I guess you’re still focused on building out the product, from the sound of it. Emeric: We’re in the process of raising money. So obviously one of the big milestones we’re looking for in 2016 is raising our Series A. In terms of big milestones for the team and the organization, we’ve never had an actual marketer on the team. I was basically acting as the CMO. I’m a founder so by definition not a CMO. Ed: I really need to ask you what you’re looking for in a marketer, if you’re hiring a marketer. Emeric: Experience. They need to have “been there, done that” with a SaaS business and know exactly what they’re doing. It’s very rare, but we’ve just found one and we’re excited about that. It’s going to bring a lot of structure and organization into how we do things, marketing wise. And I can already feel the difference. My way of doing that stuff was very freestyle… “Hey! Lets try this! Hey, why don’t we do that?” Ed: Which I think is very common. Emeric: Oh, it’s more than very common. Everybody does that, until they get to the point where they can afford someone who’s better than them at that. It’s not always bad — you move fast, you try a lot of things, you’re very lean. But it comes to a point… we’re at 1.5M ARR, so freestyle is not good enough for us now. We need to be very structured about what we do and why we do it. The third [thing in store for Agorapulse] is to continue to grow the product and keep the mission in mind. It’s critical that we make our users lives easier and create a “wow” experience when they get to the product. What I’d love is for them to feel, after a couple hours, “Oh my god, this is going to save me so much time. I’m going to be so much more efficient.” If we can get them to feel that, we win. Ed: Sure! Makes sense. Simple! Emeric: Yeah! The simplest things are the hardest to build. If you want to listen to the full interview, you can find it as part of the SaaS Open Mic podcast on SoundCloud (also below) or iTunes.

<sys> [INST] How Agorapulse measures Marketing ROI with ChartMogul [/INST] The growing headache of social media management “One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to.” Ed: I would love to talk a bit about Agorapulse the product. I’m fairly new to the marketing world. I’ve been in the content game for just over a year or nearly two years. I find that the space is so overwhelming and noisy. There are a lot of products selling themselves as solutions for cutting through that noise and getting meaningful data about content marketing and the performance of it. I’m really interested to know how Agorapulse addresses it. I noticed on your site, you have this sentence: “Social media management is still seen by most businesses as a necessary evil. It’s overwhelming, noisy, chaotic, and nearly impossible to measure the value in their social media efforts.” It just resonated with me so much! I find that the social side of content is such a headache. How do you guys go about solving it? Emeric: First and foremost, that sentence you read is the result of a big round of interviews we did last year with 350 businesses actively managing social media. All 350 of them, each and every one of those businesses, came back with that feeling of: overwhelming, noisy, chaotic, impossible to measure the value, frustrating, necessary evil. (Laughs) I came up with the “necessary evil” sentence in the end, but that’s really what I felt. These people are managing their social media presence, but they don’t like it. Or if they like it, they like people and talking to people — that’s the part they like. But business wise, they are frustrated. And we decided from that day that this will be our big mission. This will be what we’ll be working on solving, as hard as we can. This being said, we are not there yet in solving it entirely. But we’ve made a lot of progress in a lot of different areas. One area we’ve improved a lot is the overwhelming side of things. The way Agorapulse works in terms of managing incoming engagement is basically like how Gmail works. Telling you what you’ve seen, what you’ve not seen, what you’ve responding to, what you’ve not responded to — giving you a clear picture of where you stand. With most other tools (not naming all of them, but for example the biggest one, HootSuite), you get in there and it’s total chaos. You have no idea where you are, you have bazillion feeds, you don’t even remember which feeds are for what. That’s my case after having used HootSuite for three years. I know it’s shared by a lot of people using HootSuite. They definitely don’t help you identify what needs to be done, and who needs a response, and what’s important in your inbox. That’s because they don’t have the concept of an inbox, they have the concept of feeds. A lot of social media management tools copy [the platforms] in that sense. And it’s not the way the human brain is used to functioning. The human brain is used to functioning with lists. We love to do lists, right? We love to check things as ‘Done.’ That’s why Gmail is like a list. You respond and the email goes away from your Unread inbox. That’s how we built the tool. To my knowledge, we’re the only tool engineered to work this way. That’s basically helping you to get to Inbox Zero, to know where things are and what to pay attention to. There are a ton of other little things. On Twitter there are a lot of people using automation, sending you auto messages that look like they’ve been sent by a robot. We have developed a specific engine that helps you get rid of them. Except for the inbox, which is one big thing and solves a big thing, everything else adds up small details and little features to remove that little pain in your butt — and this one and that one and this one! And hopefully, by the end of our journey, we’ll be solving so many of them that we’ll be really living up to our promise, which is making it easy, painless, and rewarding. Social media silos are problematic “I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end.” Ed: Okay! I feel like there’s maybe a breaking point for the social media marketer today. They’re forced to exist and interact within so many walled gardens, so many platforms. Do you think there’s a point where that has to change in some way, or do you think that just enables tools like your own for managing these platforms? Emeric: I’m afraid this is not going anywhere anytime soon. And when I say “I’m afraid this isn’t going anywhere anytime soon,” I mean it. Meaning I would love that to go away! I would love the silos and chinese walls between the platforms to not exist. But they do exist and there’s no sign that it’s going to end. Some platforms may not take off, like Google+. It hasn’t really taken off as an engaging, active platform so it’s getting less attention. But I’m still amazed by the number of people who want to publish on their Google+ page. Whether or not there’s engagement there, they want to have that as a channel for publishing content. So we added Google+ as a channel. So even if some of them are not that strategic or active or important, they exist. And [businesses] are on them, and they don’t want to be seen as not active, so they have to have content published there. And eventually if a guy leaves one comment back, they want to be in the know and be able to reply to that one comment. That’s the worst part: If you’re present somewhere and there’s one or two people commenting or getting back to you every month, it’s nothing, right? You could ignore them. But ignoring those one or two people may make you feel bad, and may trigger [this perception of] “Oh, those guys don’t care.” In the case that one of those people are important or an influencer or VIPs or whatever, if may even backfire for you. So it’s challenging. And I don’t think it’s going to get less challenging in the future. Ed: Yep. So I guess the only option is for a business to exist on pretty much every channel where there customers expect them to exist and to offer a good level of interaction in all of those places, right? Emeric: Yeah! Or… don’t exist in channels you know you’re not going to be able to handle. How Agorapulse leverages SaaS Metrics “…for us, now, what really makes a difference is the ability to segment.” I have a few questions about metrics and how you guys measure yourselves. At ChartMogul obviously metrics are our thing. So it’d be great to understand better how you guys are using ChartMogul right now and how you came to implement ChartMogul in your business processes. Where is the value for you? Emeric: We track all the typical saas metrics that any other saas company should be tracking: LTV, ARPU, ARR, MRR, Customer/net MRR churn. It’s interesting — when we started using ChartMogul that was two years ago. Probably very much at the beginning when you guys were starting out. We were using Recurly and not Stripe. At the time there was a solution from Stripe, your competitor, and we were totally frustrated by the analytics we had on Recurly, which was basically non-existent. When we discovered CM it was like, “Wow! This is exactly what we need!” We had started to build something on our own backend, in our own admin system, but it took us a lot of development work. And it wasn’t 10% as good as what ChartMogul was coming up with so we were thrilled at finally having a visualization of our metrics in a very easy-to-use, clear way. We were very happy about the basic segments by plan, by month, by cohort. Ed: And were you measuring these things previous to ChartMogul or did this give you new insights that you didn’t have before? Emeric: Yeah, with spreadsheets, I guess! It was a mess. It was not done well. So, we were happy about that. It was finally a way to visualize and get all the SaaS metrics we needed to follow up on. Then two years later, I’d say there are a couple of alternatives now. Some of them even are free. So the landscape has changed a little bit on what is the real value and now the big, big value proposition of ChartMogul is in the segment side of things. Everything else is still nice to have and cool to have, and for newbies it will probably still be an ‘aha’ moment like the one we had two years ago. But for us, now, what really makes a difference is the ability to segment. We did spend time to integrate our own data set into CM to create the right segments. As soon as you start getting a significant number of clients, above 500 or something, or significant MRR (above $50k), what you really need is not only to have your main SaaS metrics but to understand within those metrics how your different channels, types of users, and different tool usage actually plays out for you. And that’s where the segmentation changed the way we look at our business. How Segmentation insights helped Agorapulse pivot “The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: ‘Kill that business and go for this one.’ “ Emeric: There’s something specific about us that’s probably not very common, even though it’s probably shared by some SaaS businesses that have pivoted quite a bit. We started our business model five years ago on something, and we evolved it to something else. It’s connected but not the same thing. We were mainly used for FB contests and promotions five years ago, and now we’re really a full blown social media management software — which is still targeting the same audience but not for the same needs. So it’s a very different core product. When looking at our SaaS metrics aggregated, we have a false picture of our business. What really makes sense for us it to look is based on platform usage on our side. How is the business of people still using the contest [feature] going? How is the new business of people using the social media management features? And when we started getting more visibility on that thanks to segmentation, we were totally blown away by the results. That was like “OMG okay, now we get it. Theres the bad business. Theres the good business.” The problem is when you mix them together, you don’t have that sense. You don’t have the chance to see, “Ok that business is killing it. 20% growth MOM, very little churn, yada yada yada, like the ideal future unicorn. And this other business is like 15% churn, no growth, sucks. The problem is when you look at your main metrics all combined, all together, you don’t see that clear picture that tells you: “Kill that business and go for this one.” So, long story short, that is the reason for people to use ChartMogul. For the segmentation. And they have to implement every integration they can on their side to make sure they follow their big acquisition channel. Ed: That’s really interesting. And very insightful for us to know how you’re using that. Is ChartMogul a tool that’s used by a lot of different people in the company? How does it fit into your business? Emeric: Everyone at the company has access to ChartMogul. Not necessarily because they’re using all the nitty gritty of ChartMogul, but because they are all super excited when we grow! Even the tech guys, I think they log into CM three times a day to see how the day has been. It’s part of the dashboard of the company’s health and how the company is doing. When it comes to digging into the results and the segmented stuff, it’s not everybody — it’s like one or two people. How Agorapulse measures the ROI of their blog “If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different.” Ed: What kind of metrics are key to you for acquisition channels? If you were to just pick one or two metrics to measure your success, what would they be? Emeric: It’s a combination of MRR and Churn, which ends up being LTV eventually but starting with MRR. You always have to keep in mind that there are some metrics that you will get early on, like MRR, and there are metrics you’ll have to wait a year for an accurate measurement for, like LTV. So you can’t measure the effectiveness of your acquisition channels on LTV because basically you’ll be blind for a year or more. Even after a year your LTV is an unsure metric. You may not even have enough data to have an accurate LTV at this point, especially if the acquisition channel is small. If you’re only getting $1-2000 MRR on that channel, it may take forever before you have an accurate LTV you can rely on! So I first look at MRR, and after 6-8 months I look at Churn. You have to wait that 6-8 months for Churn numbers that are actually meaningful. So I would say in the first year, look at MRR. Ed: What kind of decisions does that enable for you? What decisions would you make based on the data you see? Emeric: Put more money in ads, or less. Or change the way you do ads. Stop trying to do outreach ads, and try to do retargeting or re-nurturing ads. It would have all sorts of impact on long-term decisions. For example, we’re doing a lot of blogging. When we looked at how blogging was impacting our bottom line, the only way we had to look at that was Google Analytics. So, basically looking at direct conversions from blog traffic, which is a super bad metric to look at because you have very little direct conversion from your blog traffic. That’s not the reason they came to you. And the conversion rate sucks, like 0._%. So it’s very disappointing. When my CTO would look at this, he would say, “Why are we blogging? What’s the point? It doesn’t help!” But as a marketer and a 15 year SaaS entrepreneur, I know there’s a point. I know it matters. I know it’s important. I know it’s more than a direct conversion, but it was so hard to give more metrics [to prove it]. Now what we’ve done is we’ve used MRR on everybody who had the blog as their first point of contact with us. Not the ads, not the referral, not Google — landing on the blog is the first time they see us. And then [we track] whatever they do after that: They see an ad, they read another blog post, they see something else, they read a review, and then they come back and they finally subscribe. We’ll count that MRR and we’ll attribute it to the blog, as the first point of contact. And the revenue there is quite significant, it’s actually pretty good. It’s definitely good enough to justify the effort on a pure conversion basis, not even mentioning the SEO, the credibility and everything else that a blog will give you. So it was good to see that! If you rely on the wrong metrics because nothing else is at hand, you may be tempted to think a marketing effort is not worth it. But when you have a better way to measure things, your world will look different. Ed: I think it’s such a common case of content marketer trying to sell content marketing internally in the business and getting acceptance for investing in great content. It’s something that not a lot of people can measure in this way, right now. But what you’ve just outlined completely turns the tables on that. Emeric: It’s a big problem. It’s very hard to measure these things. Usually when you’re small, just starting out, you don’t even worry about measuring those types of things. You go by gut feeling; you just do what you think is right and you don’t do it based on metrics. So thanks to that segmentation, we were able to get more metrics. For example, we basically saw that despite the fact we were spending as much money on Facebook ads as we were on content, content was bringing in more MRR than Facebook ads (as a first point of contact). And there’s all the side benefits [to content marketing], too, which makes it a no brainer! The primacy of your product and… knowing how to write! “Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product.” Ed: Just looking into your background, Agorapulse is not the first startup you’ve founded or been involved with. I’m also interested to see you’re coming from a law background. Do you see that as something that gives you an advantage or a different perspective on SaaS businesses? Emeric: The plusses are that, number 1, I know how to write, which is quite a skill you can use when you’re an entrepreneur on the business side. I know how to write things that people understand because I’ve been trained to write to convince people, to make my story go through. I have a very hard time finding it in the people I try to hire. The second advantage is that I’m not afraid of anything legal. When we did fundraising three years ago, I’m the only one that looked at the shareholders agreement and I told the guys, “Not this, not this, not that, move this, add that.” It gives me an advantage to not be afraid of these things and to save on legal fees because I don’t need lawyers. The third thing — which is related to the second — is that every time we do deals with people, i’m the one handling the writing. Were in the process of buying a company right now. I’m doing the LOI, the purchase agreement, because I’m actually faster at doing it. And I might actually be better than real lawyers, because a real lawyer who has no clue about your business will come up with a 30 page agreement, where ⅔ of which is meaningless! I just come up with 8-10 page agreement where everything is important. Ed: Ah, so it’s very much still an active role for you. Is there any advice you’d offer to people who are trying to navigate through the law associated to starting a business? Emeric: Yeah. Spend more time on contracts and corporation and structuring the investments, and spend more time on growing the business. Every time I’ve started a company, we didn’t have a company. We didn’t have a bank account, we didn’t have anything. We just focused on the product. We had the big agreement between the founders on paper, the shares we would have once we created the company and what’s expected from each founder. We had the big picture, basically, but we didn’t do any legal work until it was worth it. So my advice is: Basically, don’t even create a company until you have a product. Then implement a payment system, a bank account, and a company once you get to that point. But for the first six months, only worry about the product and the clients. What’s next for Agorapulse (and what they look for in a marketer) Ed: Great. I’d love to know what the future holds for you guys. I guess you’re still focused on building out the product, from the sound of it. Emeric: We’re in the process of raising money. So obviously one of the big milestones we’re looking for in 2016 is raising our Series A. In terms of big milestones for the team and the organization, we’ve never had an actual marketer on the team. I was basically acting as the CMO. I’m a founder so by definition not a CMO. Ed: I really need to ask you what you’re looking for in a marketer, if you’re hiring a marketer. Emeric: Experience. They need to have “been there, done that” with a SaaS business and know exactly what they’re doing. It’s very rare, but we’ve just found one and we’re excited about that. It’s going to bring a lot of structure and organization into how we do things, marketing wise. And I can already feel the difference. My way of doing that stuff was very freestyle… “Hey! Lets try this! Hey, why don’t we do that?” Ed: Which I think is very common. Emeric: Oh, it’s more than very common. Everybody does that, until they get to the point where they can afford someone who’s better than them at that. It’s not always bad — you move fast, you try a lot of things, you’re very lean. But it comes to a point… we’re at 1.5M ARR, so freestyle is not good enough for us now. We need to be very structured about what we do and why we do it. The third [thing in store for Agorapulse] is to continue to grow the product and keep the mission in mind. It’s critical that we make our users lives easier and create a “wow” experience when they get to the product. What I’d love is for them to feel, after a couple hours, “Oh my god, this is going to save me so much time. I’m going to be so much more efficient.” If we can get them to feel that, we win. Ed: Sure! Makes sense. Simple! Emeric: Yeah! The simplest things are the hardest to build. If you want to listen to the full interview, you can find it as part of the SaaS Open Mic podcast on SoundCloud (also below) or iTunes. </sys

Creating a subscription box empire with Jameson Morris. Driving the subscription box economy Jameson is no stranger to the subscription economy. From starting Conscious Box with a group of friends at the time when the subscription box wasn’t really a “thing”, to the present day where he’s focused on growing the success that is Yogi Surprise, a box for yoga lovers. Source: jamesonmorris.com There are plenty of problems to tackle when it comes to shipping a physical subscription product. While some of them are shared with any other software-based subscription, plenty are unique to a business which sends out thousands of filled cardboard boxes each month. For example, you should get ready to think more about the unboxing experience rather than onboarding experience. One of the biggest misconceptions is that this kind of business is an easy thing to start. From my chat with Jameson, I wanted to understand how he’s grown a scalable model for such lifestyle businesses. And while the answer is that there’s inevitably a huge amount of good old hard work involved, it does seem that the eventual result is a solid source of income which doesn’t require 80 hours of your sweat per week. Jameson publishes some great stuff on the nuances of building such a business, so make sure you check out his blog if this episode piques your interest. Here’s the full conversation below. Don’t forget to subscribe on SoundCloud or iTunes!

[INST] Creating a subscription box empire with Jameson Morris [/INST]

Driving the subscription box economy Jameson is no stranger to the subscription economy. From starting Conscious Box with a group of friends at the time when the subscription box wasn’t really a “thing”, to the present day where he’s focused on growing the success that is Yogi Surprise, a box for yoga lovers. Source: jamesonmorris.com There are plenty of problems to tackle when it comes to shipping a physical subscription product. While some of them are shared with any other software-based subscription, plenty are unique to a business which sends out thousands of filled cardboard boxes each month. For example, you should get ready to think more about the unboxing experience rather than onboarding experience. One of the biggest misconceptions is that this kind of business is an easy thing to start. From my chat with Jameson, I wanted to understand how he’s grown a scalable model for such lifestyle businesses. And while the answer is that there’s inevitably a huge amount of good old hard work involved, it does seem that the eventual result is a solid source of income which doesn’t require 80 hours of your sweat per week. Jameson publishes some great stuff on the nuances of building such a business, so make sure you check out his blog if this episode piques your interest. Here’s the full conversation below. Don’t forget to subscribe on SoundCloud or iTunes!

<sys> [INST] Creating a subscription box empire with Jameson Morris [/INST] Driving the subscription box economy Jameson is no stranger to the subscription economy. From starting Conscious Box with a group of friends at the time when the subscription box wasn’t really a “thing”, to the present day where he’s focused on growing the success that is Yogi Surprise, a box for yoga lovers. Source: jamesonmorris.com There are plenty of problems to tackle when it comes to shipping a physical subscription product. While some of them are shared with any other software-based subscription, plenty are unique to a business which sends out thousands of filled cardboard boxes each month. For example, you should get ready to think more about the unboxing experience rather than onboarding experience. One of the biggest misconceptions is that this kind of business is an easy thing to start. From my chat with Jameson, I wanted to understand how he’s grown a scalable model for such lifestyle businesses. And while the answer is that there’s inevitably a huge amount of good old hard work involved, it does seem that the eventual result is a solid source of income which doesn’t require 80 hours of your sweat per week. Jameson publishes some great stuff on the nuances of building such a business, so make sure you check out his blog if this episode piques your interest. Here’s the full conversation below. Don’t forget to subscribe on SoundCloud or iTunes! </sys

A passion for code paves the road to CEO. You can also check out this interview on the SaaS Open Mic Podcast: From Twitter to Stripe to Clearbit Ed: I know you have an interesting background as a developer, and you’ve done several things and worked for several startups — such as Twitter and Stripe — in a front-end developer role. It’d be great to figure out how you got started with that, and then go through to how you eventually founded Clearbit. So where did it all start for you? Alex: Well, if we go back to the beginning, it started when I was in high school. I was just experimenting with coding, teaching myself, and doing a bit of consulting. I couldn’t get good enough math grades to get into a computer science course, so I decided to drop out and do an internship at a startup. And I kind of pity that startup for hiring me because I was so bad at coding! I remember using some particular instance variables instead of local variables because they were a prettier color in the editor… But basically I learned everything at that company. It’s called Reevoo. And then did a bunch more consulting in London. I got my first taste of San Francisco on a trip here and decided I wanted to come out here permanently. So I figured out how to do the visa situation, managed to get out to San Francisco and I joined Twitter. I worked there for about a year; I was on the revenue team building up all of their ad products. And then I joined Stripe, and I worked on a lot of Stripe’s front-end. I worked on Stripe JS, I made the Stripe checkout, and I wrote all the iOS libraries and a few other things. Then after my time at Stripe it was time to do what I actually came out to the city to do, which was my own startup. And I worked through various ideas. I’d like to say I left Stripe to do exactly what I wanted to do, but that’s not the case. I worked on a lifestyle business in the recruiting space for a while, which I sold. Then I came upon the idea of Clearbit. Essentially taking all of the experience I learned at Stripe about working with data APIs but in a slightly different realm: where we’re selling data instead of doing credit card transactions. Ed: Was this something that you knew all along? That the end goal was for you to start a business? Or was this something that appeared to you at some point along that journey? Alex: It absolutely was a goal the whole time. I worked for the other companies in San Francisco to learn a few things — and I learned a lot, to be honest. What he learned coding at Stripe Ed: What were the key things you learned at companies like Stripe and Twitter that weren’t just: how to code better apps? I guess being thrust into companies of that size or with that rate of growth was overwhelming. Alex: Yes, I certainly learned a lot at Stripe. It’s quite amazing being a part of a rocketship like that — you get to feel something pretty rare. What would I say I learned… that’s a tricky thing. You know, one thing I learned at Stripe was to make pixel-perfect designs. The designers at stripe are really awesome. And one thing I learned was to get really good at CSS so now I can produce picture-perfect markups. And I’m still the one that does front-end implementation at Clearbit. So, there’s one thing I learned! But it’s kindof hard to talk about specific things I learned because it was just so much. An example of Stripe’s dynamic, detailed — yet clean — design. A screenshot doesn’t do it justice. source: https://stripe.com/connect Ed: Something we’re always blown away by at ChartMogul, as a product that integrates and is partnered with Stripe, is the quality of their front-end work, and the stuff they put out on their site, even their blog actually. I don’t know if you were involved with that side of the site at the time, but whoever is doing that now is doing an amazing job! Alex: Well, I can hardly take credit. I mean, it’s kind of unfair for us, other API startups, to compete with Stripe because they have such an incredible design team that one can only dream of having splash pages as nice as theirs. But I think we [at Clearbit] pull above our weight. Our designs are all done by this guy called Drew Wilson who is fantastic. We contract all those in. Ed: Do you think that was some of the secret sauce at Stripe, this perfection on the design side that just made everything so visually attractive? Alex: No. It didn’t hurt! It’s great. But the magic behind Stripe was that there was a real need for a solution to that problem. And they did a few things… I think Stripe JS was ingenious, the fact that you didn’t need to worry about being PCI compliant or that it was the minimum compliance that you had to implement. That was a stroke of genius. And I think the merchant account — the fact that they would allocate merchant account for you behind the scenes so you could sign up and start accepting payments asap — that was an incredible thing at the time, as well. So for me, it was execution on those fronts. Now, the design is fantastic but I certainly don’t think their success is due to it. Ed: Was there always a clear vision of where Stripe was going and was everyone behind it, very focused on that goal? Alex: Yeah, there was. Their motto is: “Increase the GDP of the internet.” I like that, I like that a lot. For us working there, it made a lot of sense. Ed: Sure. Did you have a mentor there or a figure who guided you through or did you find your own way? Alex: Mostly my own way. I mean, I certainly learned from my colleagues, but one of the reasons I didn’t do more conventional schooling is because I like teaching myself things. Going his own way Ed: Having skipped the Computer Science path, do you think that gives you a different perspective, or perhaps an advantage or maybe even a disadvantage compared to the Computer Science grads that go through the typical route to software engineering at a startup? Alex: Well, it certainly gives you a lot of first-hand real-world knowledge. I’d be slightly wary of hiring a recent Computer Science graduate unless I’d seen their coding. Because I think a lot of it is pretty abstract. And the languages they teach, like Java for example, aren’t very practical in startup land. But I keep a pretty open mind when people apply for jobs at Clearbit. For example, I probably couldn’t tell you if any of the guys I work with have degrees or what they’re in. It’s more about what they can do from now on. Ed: So what was your strategy for getting hired in the first place in a startup? I guess companies like Stripe and Twitter aren’t the easiest to get into — they have a pretty high barrier. So, how did you negotiate or navigate those routes? Alex: To be honest, I’m very lucky and very fortunate to be working in an industry that doesn’t have a lot of hangups around having a degree. So it wasn’t that hard. For Twitter I think I just DMed Dan Webb, whom I knew, another Brit, who was head of the web team there. And for Stripe, I think I met John [Collison] at some housewarming party. So, it wasn’t tricky, to be honest, because there’s a huge amount of demand for good engineers out here. Visa wise it was tricky. They just don’t usually let people in without degrees. Alex MacCaw during his days at Stripe. How he got the US visa, and managed to travel the world in the meantime Ed: I noticed you took some time out at one point to travel. I remember reading some of your stuff on your blog a while back, and you come across as someone who tends to push themselves in sharing things and creating, also traveling and self-development — and writing about all of it. I was wondering if you could talk a little about your motivation for that and how big a part of your self-development that is. Alex: It’s core. I love traveling. When I was coming out to the states and organizing the visa, it was the perfect opportunity. Because I managed to get what’s called an O-1 visa. When I was trying to figure out how to get over to the States, there were a few options. The O-1 is probably the best one. But it did require me to demonstrate some kind of extraordinary ability; that’s the criteria for that visa. So I decided to write a book. I wrote a book for O’Reilly on programming JavaScript apps — actually I wrote two, another on CoffeeScript. So I was like, “Okay I have a contract to write this book. It will maybe take me six months. I might as well do it while I’m traveling and combine all these things at once.” I felt like it was perhaps my last chance to travel aimlessly for a year without anything else I had to think about. So I bought a round-the-world ticket, which is actually reasonably priced, and just started traveling. I wrote a lot of the book in South Africa and Southeast Asia. And I ended up going to about 20 countries that year, which was quite excessive. My advice to people on traveling is a little different now. I got a taste of everything but I hardly had two nights in the same bed. But now I have a taste of everything, so I feel I know what I like and what I don’t like, so I can go back to those countries and really immerse myself. Ed: There are so many people out there who have a goal of doing some world travel, particularly after studying or before they move into an intensive career. What are the key bits of advice you’d give to those people? If I wanted to travel the world, what would you tell me? Alex: My main piece of advice would be: don’t plan it. Have no agenda. Just buy a one-way ticket to wherever you want to start; somewhere in Asia is always a good choice. And just take it day-by-day and see what happens. I wouldn’t worry about traveling alone, I traveled alone for the year. Cost, I mean, if you’re living in San Francisco, traveling is way, way cheaper. And if you’re a programmer you can always contract along the way. Ed: Is that something you did or were you fully focused on the book? Alex: I was fully focused on the book. I was fortunate I had a bit of spare cash from consulting gigs. So I could just dedicate myself to that. Ed: Was the book contract just a means to get a visa to get into the US, or was it something you wanted to do anyway? Alex: Well it certainly was a book I thought should be written. At the time there had been very little thought put into frameworks — this is even pre-backbone JS. So after working on JS apps and big web apps for a while, and trying to assign NBC architectures to them that I’d been practicing on the server side, I thought there honestly were a lot of practices that could be improved. So I really wanted to write that particular book. And it was great to get the opportunity to do it. It was great career wise. I don’t think it was particularly hard to do… You could probably write a book in the evenings, do it in three months if not less. I found it pretty straightforward. But I certainly didn’t do it for the money; there’s no money it. Ultimately it was a means to getting that visa. Origin of Clearbit Ed: So let’s talk about Clearbit. You said you fell upon this problem that existed and the idea of creating Clearbit as a product. It’d be great if you mentioned what the problem is and how you went about solving it. Alex: So, it was really won out of a lot of the frustrations that I had at Stripe around obtaining high-quality data: either that data didn’t exist, or it was a really crappy API. And I thought I could improve on that. I wanted to work in the API space; I really love working with APIs. I like the fact that you can put an API out there and not know what people will build on it until you finally see something and be blown away by what someone has built on top of your platform. So I knew I wanted to be in APIs and in data. So let’s make a company that builds data APIs for business. And the best API to start with was the email lookup one. Because practically every company has that problem. This API, you give it an email address and it returns someone’s name, their social handles, their job titles, their location down the city — basically automating a Google search. We don’t return anything more on the personal side than a Google search would, but it’s a very useful API. Then we expanded that by adding company information. Every corporate email has a domain name on it. Just a company’s website is an excellent source of data for us. So we had those two APIs, and we’ve been adding more and more since then. We’ve added APIs to find new companies, based on technologies. You can say, “Show me all companies in SF that use Stripe and have this many employees.” You can get really granular with your search queries. We have APIs where you can find contacts at different companies, find the best person to get in touch with. We have APIs for what’s called an O-fact check, which is a form of financial compliance. And the idea is that we just keep adding to these. Our forte is APIs and we’re going to keep adding to these business APIs. Whatever our customers demand, essentially. View of Market Street, through the heart of downtown San Francisco. Wave to the Clearbit headquarters! APIs, Integrations, and the future of SaaS Ed: Obviously you have a SaaS model, and your customers pay a subscription to get access to this data. It seems to me there’s probably a trend in this Data-as-a-Service model, where you have a product that doesn’t have traditional elements, such as a user interface or anything other than a programmatic interface. Do you think this is a trend that will continue to grow? Alex: Yes, for sure. We’ve just seen the first company that was API-first IPO, which was Twilio. And this trend is just going to continue to grow. I think APIs are incredibly powerful. One thing we strongly believe at Clearbit is that you get leaps and advances in technology by basic infrastructure improvements. So we’re just making a really good platform for everyone else to build on. And while on the surface our APIs might not be that innovative, the very fact that they’re there and easy to use, and all in one place, means that people are going to create really exciting businesses on top of them. Ed: They really are just building blocks. Actually it’s interesting to think how many products you can put together with just integrations of APIs. Alex: It’s incredible. You see a company like Uber that’s just four APIs: Twilio, Braintree for payment processing, Google Maps, and Checkr for the background processing. Uber wouldn’t be possible without those APIs, especially Google maps. You just can’t innovate on that many fronts as a company. But if those are in place and you can build on top of them, that’s when you can build the world’s biggest company. Ed: What do you think about integrations? A lot of tech products right now may offer an API, but they also offer a huge array of integrations with existing services that don’t require any programming work to plug in. Is that a strategy you guys are taking as well? Alex: Yeah, for sure. So if we’ve succeeded, then you shouldn’t be thinking of Clearbit. We should just be humming along in the background. And so our data should be wherever you hang out. Our Salesforce integration, for example, is incredibly successful. People love that. And I just view our integration with Salesforce as a Ruby library or a Python library or a Node library. It’s the same thing basically, just a means to an end: getting the data where it needs to be. Ed: That makes sense. I always just think of Slack, of course. Those guys are pretty much just building a platform based upon the power of offering integrations with almost any service that’s available. Alex: It’s quite incredible. I think Slack bots are going to be awesome. They have a massive fund dedicated to Slack bots; I think those are going to be huge. Ed: Yeah, it’s kind of scary and awesome at the same time… So do you envision a future where we are just building not much from scratch anymore and almost everything is built on this micro-service infrastructure? Alex: Yeah, I mean, everything we do is abstractions upon abstractions. I feel like all human society is like that. And suddenly all programming languages are. So, for us, we’re just making business abstractions better. We’re making them easier to use. Ed: There’s some risk to building a product on top of existing services that are not owned by yourself. What are the challenges around building a product that is, to a lot of people, part of their infrastructure? Alex: Well certainly there is some risk there. Especially if that product has no competition. Luckily for a lot of other APIs, there are alternatives. It does weigh heavily on me. We’re often asked — “Clearbit is awesome and we love using it. Please, please don’t ever get acquired or acqui-hired, and then shut the service down!” Because I think people are so burned by all these companies that they rely on doing exactly that. So that is something I never want to do. That’s why Clearbit is profitable, and I want to keep it profitable because I want control over my destiny and I want to build this company that lasts. Building a company that lasts Marketing and metrics for an API product Ed: So, how do you market a product that doesn’t have a UI or a user experience as such? Well, I guess you could argue that an API has a user experience, but it’s not a product that is visual in nature. How on earth do you do that? Alex: Well it comes along with its own set of complexities, and it’s one of the things I’ve learned most about in building this company. For outbound sales, we don’t sell the API itself. We sell specific integrations. Because that is much easier for people to visualize and understand, and it’s also much easier for us to find a contact at a company who would be interested in using it. For example, a Salesforce implementation will actually go out and sell to the head of sales. Or a Marketo implementation will go out and sell to a head of marketing. For inbound traffic, it’s mostly about the API. Stripe and GitHub have really pioneered for us, having a great relationship with the dev community. We’re giving back lots of open source, lots of talks, and we have some free APIs as well. Like we have the Logo API so you can turn any domain name into a company logo. So there’s a few different strategies there, but that kind of outlines it. If anyone is starting an API business, I would say one thing to realize is that the sales cycles are long. Because once you’ve sold to the product side, you have to get the engineering side involved. And even if you are a company like Stripe who is targeting engineers, because engineers can see a direct value from the API, as you grow bigger and bigger, you’re often targeting the business side of the corporation anyway. And so, there is a slow sales cycle, but the flip side of that is that your churn is pretty low. Ed: Yeah, it’s sticky right, if you have an API integrated into your product. It’s interesting. Last week at ChartMogul we launched a fairly big feature, which is an advanced segmentation for our analytics tool that allows people to pipe in data from other sources. Obviously through an API. It’s something we’ve been thinking a lot about over the last weeks: Should we extend our trial or account for much longer sales cycles for people who are integrating this? Also, interestingly enough we just integrated Clearbit as well as a part of this feature! Alex: I was excited to see that. That’s awesome! Ed: It’s really cool actually because it means we can offer it out of the box. Without the customer having to pipe in any data, they have something already to play with. They have the segmentation tool with data that comes from Clearbit, which they can use to segment their customers. I think it’s something where — if you can really make people see the value and the possibilities of what they can do with the data, then it’s pretty much a no-brainer for them. But it’s getting to that point which can be a lot of effort, in some cases. Alex: Yes, exactly. Getting it in front of people, that’s the hard thing. Ed: So, as a SaaS business, do you guys use a lot of metrics to measure your growth? Are you a numbers guy, or…? Alex: To some degree, but I would say the rest of my team — certainly on the sales side — are much better than me. We have a pretty good analytics set-up right now. So we synchronize with Stripe. When you’re doing Stripe integration you could just do stata runtime and have Stripe calculate it, but that’s pretty slow. So we have subscriptions and built out a pretty extensive billing system on our end. And then for analytics, we use a combination of things. We’ve tried pretty much everything. Right now we’re using Kissmetrics for a few things, but we’re moving to a plain redshift. I actually wrote a pretty awesome little open source library that takes S3 logs and turns them into redshift table rows. So that’s something we’re thinking of moving to. Because S3s, you can imagine, can probably take any traffic that you throw at it. Creating a team and a vision Ed: How on earth do you still find the time to write open source libraries? Alex: I…probably shouldn’t, is the answer. Ed: Do you just dictate them and outsource the development? Alex: No, I just enjoy coding so much. I mean, I still code a lot of Clearbit. I’m trying to step back a little bit from that, because as CEO your responsibility is to a lot of other things — as well as the engineering. But I think that technical CEOs have this struggle. Because my first love is programming. And it’s very hard to juggle all the things I like to do. Ed: What does that mean in terms of the team that you’ve hired around you? You obviously still want to stay close to the technical side, so I guess you want to hire a team that complements that. Alex: Right. So we have three engineers, and we have three sales engineers. Everyone on the sales side can code, as well. I think it’s important to keep the company technical for as long as we can. Because it’s hard to sell an API if you can’t actually program one… So the team definitely complements my abilities. The sales side of the company is just fantastic. You might think it’s hard finding a unicorn programmer who can do front-end and backend and a bit of design — but it’s even harder to find someone who’s in sales and who can code. And we’ve got three of those. Ed: Wow, rare breeds. Alex: Rare breeds, indeed. So, my time mostly is spent hiring these days. I completed probably the last bit of programming, this connect product that we’re releasing this year, and then I’ll try to focus on less technical things. What I will say is that I’ve laid a good groundwork. Code quality is very important to me. And whenever you join a company as an engineer, I’d encourage you to look at the code before you join because you see what you’re going to be living with for the next year or so. We have a really good standard at Clearbit, an awesome service-oriented architecture. It’s incredibly important to the company that engineers can create a new service within five minutes. So if you want your cname, you want your server, all of that stuff — we have a really nice architecture so you can create that very, very quickly. And essentially we just copied Heroku — so you just go “git push production,” and it all works. Ed: I guess that’s something that’s attractive to engineers you’re trying to hire, as well, right? If you’re building a super high-quality, great foundational engineering culture, that will help you attract the best people. Alex: Yeah, I hope so. I hope Clearbit, over time, will become renown for its code quality and its artistic approach to code. Ed: What do the next six months to a year hold for you guys? You said you’re building out this set of APIs. Is that your strategy moving forward, to scale and expand the functionality that you have already? Alex: Yes. I mean, I think we could build a very substantial business off the APIs that we currently have, and we will definitely be doing that and improving them. But I also think one core idea of Clearbit is to have a whole suite of data APIs and cross-sell people. It’s a lot like AWS’ approach to things. You go in and start using S3, and then you’re like, “What’s this EC2 thing?,” and then you get more and more into the ecosystem. That’s our strategy as well. So we will be focused on building more APIs this year and improving our existing ones. Ed: That sounds great. Before we go, is there anything that you guys would like to mention? Are you hiring right now? Alex: We’re hiring. Ideally based in San Francisco, but we have one person in Costa Rica and one person in London, so remote is fine as well. Ed: Actually that’s an interesting point. Is that something you’re open to? Building a remote company? Or do you think there’s too much value having everyone co-located? Alex: I’d rather everybody be in the same room. There’s so much interaction you miss with a remote team. I know a lot of people will disagree with me, but I can’t think of a sports team that was built remotely. I think it’s pretty important. Ed: Sure. Do you ever look back to the UK or London, or is it so great out there that you’ve never looked back at all? Alex: Well, I go back once a year or so. But I would never move home. I may move on from the US one day, but I’d never move back to England. From a company building perspective, being in the US helps so much. Being in San Francisco helps so much. So, no, not coming home any time soon. Share and follow! Passion for code paves the road to CEO: how @maccaw went from @Stripe to @Clearbit https://t.co/NkNTNeXIGN #SaaS pic.twitter.com/ZX2XoijtV8 — ChartMogul (@ChartMogul) May 18, 2016

[INST] A passion for code paves the road to CEO [/INST]

You can also check out this interview on the SaaS Open Mic Podcast: From Twitter to Stripe to Clearbit Ed: I know you have an interesting background as a developer, and you’ve done several things and worked for several startups — such as Twitter and Stripe — in a front-end developer role. It’d be great to figure out how you got started with that, and then go through to how you eventually founded Clearbit. So where did it all start for you? Alex: Well, if we go back to the beginning, it started when I was in high school. I was just experimenting with coding, teaching myself, and doing a bit of consulting. I couldn’t get good enough math grades to get into a computer science course, so I decided to drop out and do an internship at a startup. And I kind of pity that startup for hiring me because I was so bad at coding! I remember using some particular instance variables instead of local variables because they were a prettier color in the editor… But basically I learned everything at that company. It’s called Reevoo. And then did a bunch more consulting in London. I got my first taste of San Francisco on a trip here and decided I wanted to come out here permanently. So I figured out how to do the visa situation, managed to get out to San Francisco and I joined Twitter. I worked there for about a year; I was on the revenue team building up all of their ad products. And then I joined Stripe, and I worked on a lot of Stripe’s front-end. I worked on Stripe JS, I made the Stripe checkout, and I wrote all the iOS libraries and a few other things. Then after my time at Stripe it was time to do what I actually came out to the city to do, which was my own startup. And I worked through various ideas. I’d like to say I left Stripe to do exactly what I wanted to do, but that’s not the case. I worked on a lifestyle business in the recruiting space for a while, which I sold. Then I came upon the idea of Clearbit. Essentially taking all of the experience I learned at Stripe about working with data APIs but in a slightly different realm: where we’re selling data instead of doing credit card transactions. Ed: Was this something that you knew all along? That the end goal was for you to start a business? Or was this something that appeared to you at some point along that journey? Alex: It absolutely was a goal the whole time. I worked for the other companies in San Francisco to learn a few things — and I learned a lot, to be honest. What he learned coding at Stripe Ed: What were the key things you learned at companies like Stripe and Twitter that weren’t just: how to code better apps? I guess being thrust into companies of that size or with that rate of growth was overwhelming. Alex: Yes, I certainly learned a lot at Stripe. It’s quite amazing being a part of a rocketship like that — you get to feel something pretty rare. What would I say I learned… that’s a tricky thing. You know, one thing I learned at Stripe was to make pixel-perfect designs. The designers at stripe are really awesome. And one thing I learned was to get really good at CSS so now I can produce picture-perfect markups. And I’m still the one that does front-end implementation at Clearbit. So, there’s one thing I learned! But it’s kindof hard to talk about specific things I learned because it was just so much. An example of Stripe’s dynamic, detailed — yet clean — design. A screenshot doesn’t do it justice. source: https://stripe.com/connect Ed: Something we’re always blown away by at ChartMogul, as a product that integrates and is partnered with Stripe, is the quality of their front-end work, and the stuff they put out on their site, even their blog actually. I don’t know if you were involved with that side of the site at the time, but whoever is doing that now is doing an amazing job! Alex: Well, I can hardly take credit. I mean, it’s kind of unfair for us, other API startups, to compete with Stripe because they have such an incredible design team that one can only dream of having splash pages as nice as theirs. But I think we [at Clearbit] pull above our weight. Our designs are all done by this guy called Drew Wilson who is fantastic. We contract all those in. Ed: Do you think that was some of the secret sauce at Stripe, this perfection on the design side that just made everything so visually attractive? Alex: No. It didn’t hurt! It’s great. But the magic behind Stripe was that there was a real need for a solution to that problem. And they did a few things… I think Stripe JS was ingenious, the fact that you didn’t need to worry about being PCI compliant or that it was the minimum compliance that you had to implement. That was a stroke of genius. And I think the merchant account — the fact that they would allocate merchant account for you behind the scenes so you could sign up and start accepting payments asap — that was an incredible thing at the time, as well. So for me, it was execution on those fronts. Now, the design is fantastic but I certainly don’t think their success is due to it. Ed: Was there always a clear vision of where Stripe was going and was everyone behind it, very focused on that goal? Alex: Yeah, there was. Their motto is: “Increase the GDP of the internet.” I like that, I like that a lot. For us working there, it made a lot of sense. Ed: Sure. Did you have a mentor there or a figure who guided you through or did you find your own way? Alex: Mostly my own way. I mean, I certainly learned from my colleagues, but one of the reasons I didn’t do more conventional schooling is because I like teaching myself things. Going his own way Ed: Having skipped the Computer Science path, do you think that gives you a different perspective, or perhaps an advantage or maybe even a disadvantage compared to the Computer Science grads that go through the typical route to software engineering at a startup? Alex: Well, it certainly gives you a lot of first-hand real-world knowledge. I’d be slightly wary of hiring a recent Computer Science graduate unless I’d seen their coding. Because I think a lot of it is pretty abstract. And the languages they teach, like Java for example, aren’t very practical in startup land. But I keep a pretty open mind when people apply for jobs at Clearbit. For example, I probably couldn’t tell you if any of the guys I work with have degrees or what they’re in. It’s more about what they can do from now on. Ed: So what was your strategy for getting hired in the first place in a startup? I guess companies like Stripe and Twitter aren’t the easiest to get into — they have a pretty high barrier. So, how did you negotiate or navigate those routes? Alex: To be honest, I’m very lucky and very fortunate to be working in an industry that doesn’t have a lot of hangups around having a degree. So it wasn’t that hard. For Twitter I think I just DMed Dan Webb, whom I knew, another Brit, who was head of the web team there. And for Stripe, I think I met John [Collison] at some housewarming party. So, it wasn’t tricky, to be honest, because there’s a huge amount of demand for good engineers out here. Visa wise it was tricky. They just don’t usually let people in without degrees. Alex MacCaw during his days at Stripe. How he got the US visa, and managed to travel the world in the meantime Ed: I noticed you took some time out at one point to travel. I remember reading some of your stuff on your blog a while back, and you come across as someone who tends to push themselves in sharing things and creating, also traveling and self-development — and writing about all of it. I was wondering if you could talk a little about your motivation for that and how big a part of your self-development that is. Alex: It’s core. I love traveling. When I was coming out to the states and organizing the visa, it was the perfect opportunity. Because I managed to get what’s called an O-1 visa. When I was trying to figure out how to get over to the States, there were a few options. The O-1 is probably the best one. But it did require me to demonstrate some kind of extraordinary ability; that’s the criteria for that visa. So I decided to write a book. I wrote a book for O’Reilly on programming JavaScript apps — actually I wrote two, another on CoffeeScript. So I was like, “Okay I have a contract to write this book. It will maybe take me six months. I might as well do it while I’m traveling and combine all these things at once.” I felt like it was perhaps my last chance to travel aimlessly for a year without anything else I had to think about. So I bought a round-the-world ticket, which is actually reasonably priced, and just started traveling. I wrote a lot of the book in South Africa and Southeast Asia. And I ended up going to about 20 countries that year, which was quite excessive. My advice to people on traveling is a little different now. I got a taste of everything but I hardly had two nights in the same bed. But now I have a taste of everything, so I feel I know what I like and what I don’t like, so I can go back to those countries and really immerse myself. Ed: There are so many people out there who have a goal of doing some world travel, particularly after studying or before they move into an intensive career. What are the key bits of advice you’d give to those people? If I wanted to travel the world, what would you tell me? Alex: My main piece of advice would be: don’t plan it. Have no agenda. Just buy a one-way ticket to wherever you want to start; somewhere in Asia is always a good choice. And just take it day-by-day and see what happens. I wouldn’t worry about traveling alone, I traveled alone for the year. Cost, I mean, if you’re living in San Francisco, traveling is way, way cheaper. And if you’re a programmer you can always contract along the way. Ed: Is that something you did or were you fully focused on the book? Alex: I was fully focused on the book. I was fortunate I had a bit of spare cash from consulting gigs. So I could just dedicate myself to that. Ed: Was the book contract just a means to get a visa to get into the US, or was it something you wanted to do anyway? Alex: Well it certainly was a book I thought should be written. At the time there had been very little thought put into frameworks — this is even pre-backbone JS. So after working on JS apps and big web apps for a while, and trying to assign NBC architectures to them that I’d been practicing on the server side, I thought there honestly were a lot of practices that could be improved. So I really wanted to write that particular book. And it was great to get the opportunity to do it. It was great career wise. I don’t think it was particularly hard to do… You could probably write a book in the evenings, do it in three months if not less. I found it pretty straightforward. But I certainly didn’t do it for the money; there’s no money it. Ultimately it was a means to getting that visa. Origin of Clearbit Ed: So let’s talk about Clearbit. You said you fell upon this problem that existed and the idea of creating Clearbit as a product. It’d be great if you mentioned what the problem is and how you went about solving it. Alex: So, it was really won out of a lot of the frustrations that I had at Stripe around obtaining high-quality data: either that data didn’t exist, or it was a really crappy API. And I thought I could improve on that. I wanted to work in the API space; I really love working with APIs. I like the fact that you can put an API out there and not know what people will build on it until you finally see something and be blown away by what someone has built on top of your platform. So I knew I wanted to be in APIs and in data. So let’s make a company that builds data APIs for business. And the best API to start with was the email lookup one. Because practically every company has that problem. This API, you give it an email address and it returns someone’s name, their social handles, their job titles, their location down the city — basically automating a Google search. We don’t return anything more on the personal side than a Google search would, but it’s a very useful API. Then we expanded that by adding company information. Every corporate email has a domain name on it. Just a company’s website is an excellent source of data for us. So we had those two APIs, and we’ve been adding more and more since then. We’ve added APIs to find new companies, based on technologies. You can say, “Show me all companies in SF that use Stripe and have this many employees.” You can get really granular with your search queries. We have APIs where you can find contacts at different companies, find the best person to get in touch with. We have APIs for what’s called an O-fact check, which is a form of financial compliance. And the idea is that we just keep adding to these. Our forte is APIs and we’re going to keep adding to these business APIs. Whatever our customers demand, essentially. View of Market Street, through the heart of downtown San Francisco. Wave to the Clearbit headquarters! APIs, Integrations, and the future of SaaS Ed: Obviously you have a SaaS model, and your customers pay a subscription to get access to this data. It seems to me there’s probably a trend in this Data-as-a-Service model, where you have a product that doesn’t have traditional elements, such as a user interface or anything other than a programmatic interface. Do you think this is a trend that will continue to grow? Alex: Yes, for sure. We’ve just seen the first company that was API-first IPO, which was Twilio. And this trend is just going to continue to grow. I think APIs are incredibly powerful. One thing we strongly believe at Clearbit is that you get leaps and advances in technology by basic infrastructure improvements. So we’re just making a really good platform for everyone else to build on. And while on the surface our APIs might not be that innovative, the very fact that they’re there and easy to use, and all in one place, means that people are going to create really exciting businesses on top of them. Ed: They really are just building blocks. Actually it’s interesting to think how many products you can put together with just integrations of APIs. Alex: It’s incredible. You see a company like Uber that’s just four APIs: Twilio, Braintree for payment processing, Google Maps, and Checkr for the background processing. Uber wouldn’t be possible without those APIs, especially Google maps. You just can’t innovate on that many fronts as a company. But if those are in place and you can build on top of them, that’s when you can build the world’s biggest company. Ed: What do you think about integrations? A lot of tech products right now may offer an API, but they also offer a huge array of integrations with existing services that don’t require any programming work to plug in. Is that a strategy you guys are taking as well? Alex: Yeah, for sure. So if we’ve succeeded, then you shouldn’t be thinking of Clearbit. We should just be humming along in the background. And so our data should be wherever you hang out. Our Salesforce integration, for example, is incredibly successful. People love that. And I just view our integration with Salesforce as a Ruby library or a Python library or a Node library. It’s the same thing basically, just a means to an end: getting the data where it needs to be. Ed: That makes sense. I always just think of Slack, of course. Those guys are pretty much just building a platform based upon the power of offering integrations with almost any service that’s available. Alex: It’s quite incredible. I think Slack bots are going to be awesome. They have a massive fund dedicated to Slack bots; I think those are going to be huge. Ed: Yeah, it’s kind of scary and awesome at the same time… So do you envision a future where we are just building not much from scratch anymore and almost everything is built on this micro-service infrastructure? Alex: Yeah, I mean, everything we do is abstractions upon abstractions. I feel like all human society is like that. And suddenly all programming languages are. So, for us, we’re just making business abstractions better. We’re making them easier to use. Ed: There’s some risk to building a product on top of existing services that are not owned by yourself. What are the challenges around building a product that is, to a lot of people, part of their infrastructure? Alex: Well certainly there is some risk there. Especially if that product has no competition. Luckily for a lot of other APIs, there are alternatives. It does weigh heavily on me. We’re often asked — “Clearbit is awesome and we love using it. Please, please don’t ever get acquired or acqui-hired, and then shut the service down!” Because I think people are so burned by all these companies that they rely on doing exactly that. So that is something I never want to do. That’s why Clearbit is profitable, and I want to keep it profitable because I want control over my destiny and I want to build this company that lasts. Building a company that lasts Marketing and metrics for an API product Ed: So, how do you market a product that doesn’t have a UI or a user experience as such? Well, I guess you could argue that an API has a user experience, but it’s not a product that is visual in nature. How on earth do you do that? Alex: Well it comes along with its own set of complexities, and it’s one of the things I’ve learned most about in building this company. For outbound sales, we don’t sell the API itself. We sell specific integrations. Because that is much easier for people to visualize and understand, and it’s also much easier for us to find a contact at a company who would be interested in using it. For example, a Salesforce implementation will actually go out and sell to the head of sales. Or a Marketo implementation will go out and sell to a head of marketing. For inbound traffic, it’s mostly about the API. Stripe and GitHub have really pioneered for us, having a great relationship with the dev community. We’re giving back lots of open source, lots of talks, and we have some free APIs as well. Like we have the Logo API so you can turn any domain name into a company logo. So there’s a few different strategies there, but that kind of outlines it. If anyone is starting an API business, I would say one thing to realize is that the sales cycles are long. Because once you’ve sold to the product side, you have to get the engineering side involved. And even if you are a company like Stripe who is targeting engineers, because engineers can see a direct value from the API, as you grow bigger and bigger, you’re often targeting the business side of the corporation anyway. And so, there is a slow sales cycle, but the flip side of that is that your churn is pretty low. Ed: Yeah, it’s sticky right, if you have an API integrated into your product. It’s interesting. Last week at ChartMogul we launched a fairly big feature, which is an advanced segmentation for our analytics tool that allows people to pipe in data from other sources. Obviously through an API. It’s something we’ve been thinking a lot about over the last weeks: Should we extend our trial or account for much longer sales cycles for people who are integrating this? Also, interestingly enough we just integrated Clearbit as well as a part of this feature! Alex: I was excited to see that. That’s awesome! Ed: It’s really cool actually because it means we can offer it out of the box. Without the customer having to pipe in any data, they have something already to play with. They have the segmentation tool with data that comes from Clearbit, which they can use to segment their customers. I think it’s something where — if you can really make people see the value and the possibilities of what they can do with the data, then it’s pretty much a no-brainer for them. But it’s getting to that point which can be a lot of effort, in some cases. Alex: Yes, exactly. Getting it in front of people, that’s the hard thing. Ed: So, as a SaaS business, do you guys use a lot of metrics to measure your growth? Are you a numbers guy, or…? Alex: To some degree, but I would say the rest of my team — certainly on the sales side — are much better than me. We have a pretty good analytics set-up right now. So we synchronize with Stripe. When you’re doing Stripe integration you could just do stata runtime and have Stripe calculate it, but that’s pretty slow. So we have subscriptions and built out a pretty extensive billing system on our end. And then for analytics, we use a combination of things. We’ve tried pretty much everything. Right now we’re using Kissmetrics for a few things, but we’re moving to a plain redshift. I actually wrote a pretty awesome little open source library that takes S3 logs and turns them into redshift table rows. So that’s something we’re thinking of moving to. Because S3s, you can imagine, can probably take any traffic that you throw at it. Creating a team and a vision Ed: How on earth do you still find the time to write open source libraries? Alex: I…probably shouldn’t, is the answer. Ed: Do you just dictate them and outsource the development? Alex: No, I just enjoy coding so much. I mean, I still code a lot of Clearbit. I’m trying to step back a little bit from that, because as CEO your responsibility is to a lot of other things — as well as the engineering. But I think that technical CEOs have this struggle. Because my first love is programming. And it’s very hard to juggle all the things I like to do. Ed: What does that mean in terms of the team that you’ve hired around you? You obviously still want to stay close to the technical side, so I guess you want to hire a team that complements that. Alex: Right. So we have three engineers, and we have three sales engineers. Everyone on the sales side can code, as well. I think it’s important to keep the company technical for as long as we can. Because it’s hard to sell an API if you can’t actually program one… So the team definitely complements my abilities. The sales side of the company is just fantastic. You might think it’s hard finding a unicorn programmer who can do front-end and backend and a bit of design — but it’s even harder to find someone who’s in sales and who can code. And we’ve got three of those. Ed: Wow, rare breeds. Alex: Rare breeds, indeed. So, my time mostly is spent hiring these days. I completed probably the last bit of programming, this connect product that we’re releasing this year, and then I’ll try to focus on less technical things. What I will say is that I’ve laid a good groundwork. Code quality is very important to me. And whenever you join a company as an engineer, I’d encourage you to look at the code before you join because you see what you’re going to be living with for the next year or so. We have a really good standard at Clearbit, an awesome service-oriented architecture. It’s incredibly important to the company that engineers can create a new service within five minutes. So if you want your cname, you want your server, all of that stuff — we have a really nice architecture so you can create that very, very quickly. And essentially we just copied Heroku — so you just go “git push production,” and it all works. Ed: I guess that’s something that’s attractive to engineers you’re trying to hire, as well, right? If you’re building a super high-quality, great foundational engineering culture, that will help you attract the best people. Alex: Yeah, I hope so. I hope Clearbit, over time, will become renown for its code quality and its artistic approach to code. Ed: What do the next six months to a year hold for you guys? You said you’re building out this set of APIs. Is that your strategy moving forward, to scale and expand the functionality that you have already? Alex: Yes. I mean, I think we could build a very substantial business off the APIs that we currently have, and we will definitely be doing that and improving them. But I also think one core idea of Clearbit is to have a whole suite of data APIs and cross-sell people. It’s a lot like AWS’ approach to things. You go in and start using S3, and then you’re like, “What’s this EC2 thing?,” and then you get more and more into the ecosystem. That’s our strategy as well. So we will be focused on building more APIs this year and improving our existing ones. Ed: That sounds great. Before we go, is there anything that you guys would like to mention? Are you hiring right now? Alex: We’re hiring. Ideally based in San Francisco, but we have one person in Costa Rica and one person in London, so remote is fine as well. Ed: Actually that’s an interesting point. Is that something you’re open to? Building a remote company? Or do you think there’s too much value having everyone co-located? Alex: I’d rather everybody be in the same room. There’s so much interaction you miss with a remote team. I know a lot of people will disagree with me, but I can’t think of a sports team that was built remotely. I think it’s pretty important. Ed: Sure. Do you ever look back to the UK or London, or is it so great out there that you’ve never looked back at all? Alex: Well, I go back once a year or so. But I would never move home. I may move on from the US one day, but I’d never move back to England. From a company building perspective, being in the US helps so much. Being in San Francisco helps so much. So, no, not coming home any time soon. Share and follow! Passion for code paves the road to CEO: how @maccaw went from @Stripe to @Clearbit https://t.co/NkNTNeXIGN #SaaS pic.twitter.com/ZX2XoijtV8 — ChartMogul (@ChartMogul) May 18, 2016

<sys> [INST] A passion for code paves the road to CEO [/INST] You can also check out this interview on the SaaS Open Mic Podcast: From Twitter to Stripe to Clearbit Ed: I know you have an interesting background as a developer, and you’ve done several things and worked for several startups — such as Twitter and Stripe — in a front-end developer role. It’d be great to figure out how you got started with that, and then go through to how you eventually founded Clearbit. So where did it all start for you? Alex: Well, if we go back to the beginning, it started when I was in high school. I was just experimenting with coding, teaching myself, and doing a bit of consulting. I couldn’t get good enough math grades to get into a computer science course, so I decided to drop out and do an internship at a startup. And I kind of pity that startup for hiring me because I was so bad at coding! I remember using some particular instance variables instead of local variables because they were a prettier color in the editor… But basically I learned everything at that company. It’s called Reevoo. And then did a bunch more consulting in London. I got my first taste of San Francisco on a trip here and decided I wanted to come out here permanently. So I figured out how to do the visa situation, managed to get out to San Francisco and I joined Twitter. I worked there for about a year; I was on the revenue team building up all of their ad products. And then I joined Stripe, and I worked on a lot of Stripe’s front-end. I worked on Stripe JS, I made the Stripe checkout, and I wrote all the iOS libraries and a few other things. Then after my time at Stripe it was time to do what I actually came out to the city to do, which was my own startup. And I worked through various ideas. I’d like to say I left Stripe to do exactly what I wanted to do, but that’s not the case. I worked on a lifestyle business in the recruiting space for a while, which I sold. Then I came upon the idea of Clearbit. Essentially taking all of the experience I learned at Stripe about working with data APIs but in a slightly different realm: where we’re selling data instead of doing credit card transactions. Ed: Was this something that you knew all along? That the end goal was for you to start a business? Or was this something that appeared to you at some point along that journey? Alex: It absolutely was a goal the whole time. I worked for the other companies in San Francisco to learn a few things — and I learned a lot, to be honest. What he learned coding at Stripe Ed: What were the key things you learned at companies like Stripe and Twitter that weren’t just: how to code better apps? I guess being thrust into companies of that size or with that rate of growth was overwhelming. Alex: Yes, I certainly learned a lot at Stripe. It’s quite amazing being a part of a rocketship like that — you get to feel something pretty rare. What would I say I learned… that’s a tricky thing. You know, one thing I learned at Stripe was to make pixel-perfect designs. The designers at stripe are really awesome. And one thing I learned was to get really good at CSS so now I can produce picture-perfect markups. And I’m still the one that does front-end implementation at Clearbit. So, there’s one thing I learned! But it’s kindof hard to talk about specific things I learned because it was just so much. An example of Stripe’s dynamic, detailed — yet clean — design. A screenshot doesn’t do it justice. source: https://stripe.com/connect Ed: Something we’re always blown away by at ChartMogul, as a product that integrates and is partnered with Stripe, is the quality of their front-end work, and the stuff they put out on their site, even their blog actually. I don’t know if you were involved with that side of the site at the time, but whoever is doing that now is doing an amazing job! Alex: Well, I can hardly take credit. I mean, it’s kind of unfair for us, other API startups, to compete with Stripe because they have such an incredible design team that one can only dream of having splash pages as nice as theirs. But I think we [at Clearbit] pull above our weight. Our designs are all done by this guy called Drew Wilson who is fantastic. We contract all those in. Ed: Do you think that was some of the secret sauce at Stripe, this perfection on the design side that just made everything so visually attractive? Alex: No. It didn’t hurt! It’s great. But the magic behind Stripe was that there was a real need for a solution to that problem. And they did a few things… I think Stripe JS was ingenious, the fact that you didn’t need to worry about being PCI compliant or that it was the minimum compliance that you had to implement. That was a stroke of genius. And I think the merchant account — the fact that they would allocate merchant account for you behind the scenes so you could sign up and start accepting payments asap — that was an incredible thing at the time, as well. So for me, it was execution on those fronts. Now, the design is fantastic but I certainly don’t think their success is due to it. Ed: Was there always a clear vision of where Stripe was going and was everyone behind it, very focused on that goal? Alex: Yeah, there was. Their motto is: “Increase the GDP of the internet.” I like that, I like that a lot. For us working there, it made a lot of sense. Ed: Sure. Did you have a mentor there or a figure who guided you through or did you find your own way? Alex: Mostly my own way. I mean, I certainly learned from my colleagues, but one of the reasons I didn’t do more conventional schooling is because I like teaching myself things. Going his own way Ed: Having skipped the Computer Science path, do you think that gives you a different perspective, or perhaps an advantage or maybe even a disadvantage compared to the Computer Science grads that go through the typical route to software engineering at a startup? Alex: Well, it certainly gives you a lot of first-hand real-world knowledge. I’d be slightly wary of hiring a recent Computer Science graduate unless I’d seen their coding. Because I think a lot of it is pretty abstract. And the languages they teach, like Java for example, aren’t very practical in startup land. But I keep a pretty open mind when people apply for jobs at Clearbit. For example, I probably couldn’t tell you if any of the guys I work with have degrees or what they’re in. It’s more about what they can do from now on. Ed: So what was your strategy for getting hired in the first place in a startup? I guess companies like Stripe and Twitter aren’t the easiest to get into — they have a pretty high barrier. So, how did you negotiate or navigate those routes? Alex: To be honest, I’m very lucky and very fortunate to be working in an industry that doesn’t have a lot of hangups around having a degree. So it wasn’t that hard. For Twitter I think I just DMed Dan Webb, whom I knew, another Brit, who was head of the web team there. And for Stripe, I think I met John [Collison] at some housewarming party. So, it wasn’t tricky, to be honest, because there’s a huge amount of demand for good engineers out here. Visa wise it was tricky. They just don’t usually let people in without degrees. Alex MacCaw during his days at Stripe. How he got the US visa, and managed to travel the world in the meantime Ed: I noticed you took some time out at one point to travel. I remember reading some of your stuff on your blog a while back, and you come across as someone who tends to push themselves in sharing things and creating, also traveling and self-development — and writing about all of it. I was wondering if you could talk a little about your motivation for that and how big a part of your self-development that is. Alex: It’s core. I love traveling. When I was coming out to the states and organizing the visa, it was the perfect opportunity. Because I managed to get what’s called an O-1 visa. When I was trying to figure out how to get over to the States, there were a few options. The O-1 is probably the best one. But it did require me to demonstrate some kind of extraordinary ability; that’s the criteria for that visa. So I decided to write a book. I wrote a book for O’Reilly on programming JavaScript apps — actually I wrote two, another on CoffeeScript. So I was like, “Okay I have a contract to write this book. It will maybe take me six months. I might as well do it while I’m traveling and combine all these things at once.” I felt like it was perhaps my last chance to travel aimlessly for a year without anything else I had to think about. So I bought a round-the-world ticket, which is actually reasonably priced, and just started traveling. I wrote a lot of the book in South Africa and Southeast Asia. And I ended up going to about 20 countries that year, which was quite excessive. My advice to people on traveling is a little different now. I got a taste of everything but I hardly had two nights in the same bed. But now I have a taste of everything, so I feel I know what I like and what I don’t like, so I can go back to those countries and really immerse myself. Ed: There are so many people out there who have a goal of doing some world travel, particularly after studying or before they move into an intensive career. What are the key bits of advice you’d give to those people? If I wanted to travel the world, what would you tell me? Alex: My main piece of advice would be: don’t plan it. Have no agenda. Just buy a one-way ticket to wherever you want to start; somewhere in Asia is always a good choice. And just take it day-by-day and see what happens. I wouldn’t worry about traveling alone, I traveled alone for the year. Cost, I mean, if you’re living in San Francisco, traveling is way, way cheaper. And if you’re a programmer you can always contract along the way. Ed: Is that something you did or were you fully focused on the book? Alex: I was fully focused on the book. I was fortunate I had a bit of spare cash from consulting gigs. So I could just dedicate myself to that. Ed: Was the book contract just a means to get a visa to get into the US, or was it something you wanted to do anyway? Alex: Well it certainly was a book I thought should be written. At the time there had been very little thought put into frameworks — this is even pre-backbone JS. So after working on JS apps and big web apps for a while, and trying to assign NBC architectures to them that I’d been practicing on the server side, I thought there honestly were a lot of practices that could be improved. So I really wanted to write that particular book. And it was great to get the opportunity to do it. It was great career wise. I don’t think it was particularly hard to do… You could probably write a book in the evenings, do it in three months if not less. I found it pretty straightforward. But I certainly didn’t do it for the money; there’s no money it. Ultimately it was a means to getting that visa. Origin of Clearbit Ed: So let’s talk about Clearbit. You said you fell upon this problem that existed and the idea of creating Clearbit as a product. It’d be great if you mentioned what the problem is and how you went about solving it. Alex: So, it was really won out of a lot of the frustrations that I had at Stripe around obtaining high-quality data: either that data didn’t exist, or it was a really crappy API. And I thought I could improve on that. I wanted to work in the API space; I really love working with APIs. I like the fact that you can put an API out there and not know what people will build on it until you finally see something and be blown away by what someone has built on top of your platform. So I knew I wanted to be in APIs and in data. So let’s make a company that builds data APIs for business. And the best API to start with was the email lookup one. Because practically every company has that problem. This API, you give it an email address and it returns someone’s name, their social handles, their job titles, their location down the city — basically automating a Google search. We don’t return anything more on the personal side than a Google search would, but it’s a very useful API. Then we expanded that by adding company information. Every corporate email has a domain name on it. Just a company’s website is an excellent source of data for us. So we had those two APIs, and we’ve been adding more and more since then. We’ve added APIs to find new companies, based on technologies. You can say, “Show me all companies in SF that use Stripe and have this many employees.” You can get really granular with your search queries. We have APIs where you can find contacts at different companies, find the best person to get in touch with. We have APIs for what’s called an O-fact check, which is a form of financial compliance. And the idea is that we just keep adding to these. Our forte is APIs and we’re going to keep adding to these business APIs. Whatever our customers demand, essentially. View of Market Street, through the heart of downtown San Francisco. Wave to the Clearbit headquarters! APIs, Integrations, and the future of SaaS Ed: Obviously you have a SaaS model, and your customers pay a subscription to get access to this data. It seems to me there’s probably a trend in this Data-as-a-Service model, where you have a product that doesn’t have traditional elements, such as a user interface or anything other than a programmatic interface. Do you think this is a trend that will continue to grow? Alex: Yes, for sure. We’ve just seen the first company that was API-first IPO, which was Twilio. And this trend is just going to continue to grow. I think APIs are incredibly powerful. One thing we strongly believe at Clearbit is that you get leaps and advances in technology by basic infrastructure improvements. So we’re just making a really good platform for everyone else to build on. And while on the surface our APIs might not be that innovative, the very fact that they’re there and easy to use, and all in one place, means that people are going to create really exciting businesses on top of them. Ed: They really are just building blocks. Actually it’s interesting to think how many products you can put together with just integrations of APIs. Alex: It’s incredible. You see a company like Uber that’s just four APIs: Twilio, Braintree for payment processing, Google Maps, and Checkr for the background processing. Uber wouldn’t be possible without those APIs, especially Google maps. You just can’t innovate on that many fronts as a company. But if those are in place and you can build on top of them, that’s when you can build the world’s biggest company. Ed: What do you think about integrations? A lot of tech products right now may offer an API, but they also offer a huge array of integrations with existing services that don’t require any programming work to plug in. Is that a strategy you guys are taking as well? Alex: Yeah, for sure. So if we’ve succeeded, then you shouldn’t be thinking of Clearbit. We should just be humming along in the background. And so our data should be wherever you hang out. Our Salesforce integration, for example, is incredibly successful. People love that. And I just view our integration with Salesforce as a Ruby library or a Python library or a Node library. It’s the same thing basically, just a means to an end: getting the data where it needs to be. Ed: That makes sense. I always just think of Slack, of course. Those guys are pretty much just building a platform based upon the power of offering integrations with almost any service that’s available. Alex: It’s quite incredible. I think Slack bots are going to be awesome. They have a massive fund dedicated to Slack bots; I think those are going to be huge. Ed: Yeah, it’s kind of scary and awesome at the same time… So do you envision a future where we are just building not much from scratch anymore and almost everything is built on this micro-service infrastructure? Alex: Yeah, I mean, everything we do is abstractions upon abstractions. I feel like all human society is like that. And suddenly all programming languages are. So, for us, we’re just making business abstractions better. We’re making them easier to use. Ed: There’s some risk to building a product on top of existing services that are not owned by yourself. What are the challenges around building a product that is, to a lot of people, part of their infrastructure? Alex: Well certainly there is some risk there. Especially if that product has no competition. Luckily for a lot of other APIs, there are alternatives. It does weigh heavily on me. We’re often asked — “Clearbit is awesome and we love using it. Please, please don’t ever get acquired or acqui-hired, and then shut the service down!” Because I think people are so burned by all these companies that they rely on doing exactly that. So that is something I never want to do. That’s why Clearbit is profitable, and I want to keep it profitable because I want control over my destiny and I want to build this company that lasts. Building a company that lasts Marketing and metrics for an API product Ed: So, how do you market a product that doesn’t have a UI or a user experience as such? Well, I guess you could argue that an API has a user experience, but it’s not a product that is visual in nature. How on earth do you do that? Alex: Well it comes along with its own set of complexities, and it’s one of the things I’ve learned most about in building this company. For outbound sales, we don’t sell the API itself. We sell specific integrations. Because that is much easier for people to visualize and understand, and it’s also much easier for us to find a contact at a company who would be interested in using it. For example, a Salesforce implementation will actually go out and sell to the head of sales. Or a Marketo implementation will go out and sell to a head of marketing. For inbound traffic, it’s mostly about the API. Stripe and GitHub have really pioneered for us, having a great relationship with the dev community. We’re giving back lots of open source, lots of talks, and we have some free APIs as well. Like we have the Logo API so you can turn any domain name into a company logo. So there’s a few different strategies there, but that kind of outlines it. If anyone is starting an API business, I would say one thing to realize is that the sales cycles are long. Because once you’ve sold to the product side, you have to get the engineering side involved. And even if you are a company like Stripe who is targeting engineers, because engineers can see a direct value from the API, as you grow bigger and bigger, you’re often targeting the business side of the corporation anyway. And so, there is a slow sales cycle, but the flip side of that is that your churn is pretty low. Ed: Yeah, it’s sticky right, if you have an API integrated into your product. It’s interesting. Last week at ChartMogul we launched a fairly big feature, which is an advanced segmentation for our analytics tool that allows people to pipe in data from other sources. Obviously through an API. It’s something we’ve been thinking a lot about over the last weeks: Should we extend our trial or account for much longer sales cycles for people who are integrating this? Also, interestingly enough we just integrated Clearbit as well as a part of this feature! Alex: I was excited to see that. That’s awesome! Ed: It’s really cool actually because it means we can offer it out of the box. Without the customer having to pipe in any data, they have something already to play with. They have the segmentation tool with data that comes from Clearbit, which they can use to segment their customers. I think it’s something where — if you can really make people see the value and the possibilities of what they can do with the data, then it’s pretty much a no-brainer for them. But it’s getting to that point which can be a lot of effort, in some cases. Alex: Yes, exactly. Getting it in front of people, that’s the hard thing. Ed: So, as a SaaS business, do you guys use a lot of metrics to measure your growth? Are you a numbers guy, or…? Alex: To some degree, but I would say the rest of my team — certainly on the sales side — are much better than me. We have a pretty good analytics set-up right now. So we synchronize with Stripe. When you’re doing Stripe integration you could just do stata runtime and have Stripe calculate it, but that’s pretty slow. So we have subscriptions and built out a pretty extensive billing system on our end. And then for analytics, we use a combination of things. We’ve tried pretty much everything. Right now we’re using Kissmetrics for a few things, but we’re moving to a plain redshift. I actually wrote a pretty awesome little open source library that takes S3 logs and turns them into redshift table rows. So that’s something we’re thinking of moving to. Because S3s, you can imagine, can probably take any traffic that you throw at it. Creating a team and a vision Ed: How on earth do you still find the time to write open source libraries? Alex: I…probably shouldn’t, is the answer. Ed: Do you just dictate them and outsource the development? Alex: No, I just enjoy coding so much. I mean, I still code a lot of Clearbit. I’m trying to step back a little bit from that, because as CEO your responsibility is to a lot of other things — as well as the engineering. But I think that technical CEOs have this struggle. Because my first love is programming. And it’s very hard to juggle all the things I like to do. Ed: What does that mean in terms of the team that you’ve hired around you? You obviously still want to stay close to the technical side, so I guess you want to hire a team that complements that. Alex: Right. So we have three engineers, and we have three sales engineers. Everyone on the sales side can code, as well. I think it’s important to keep the company technical for as long as we can. Because it’s hard to sell an API if you can’t actually program one… So the team definitely complements my abilities. The sales side of the company is just fantastic. You might think it’s hard finding a unicorn programmer who can do front-end and backend and a bit of design — but it’s even harder to find someone who’s in sales and who can code. And we’ve got three of those. Ed: Wow, rare breeds. Alex: Rare breeds, indeed. So, my time mostly is spent hiring these days. I completed probably the last bit of programming, this connect product that we’re releasing this year, and then I’ll try to focus on less technical things. What I will say is that I’ve laid a good groundwork. Code quality is very important to me. And whenever you join a company as an engineer, I’d encourage you to look at the code before you join because you see what you’re going to be living with for the next year or so. We have a really good standard at Clearbit, an awesome service-oriented architecture. It’s incredibly important to the company that engineers can create a new service within five minutes. So if you want your cname, you want your server, all of that stuff — we have a really nice architecture so you can create that very, very quickly. And essentially we just copied Heroku — so you just go “git push production,” and it all works. Ed: I guess that’s something that’s attractive to engineers you’re trying to hire, as well, right? If you’re building a super high-quality, great foundational engineering culture, that will help you attract the best people. Alex: Yeah, I hope so. I hope Clearbit, over time, will become renown for its code quality and its artistic approach to code. Ed: What do the next six months to a year hold for you guys? You said you’re building out this set of APIs. Is that your strategy moving forward, to scale and expand the functionality that you have already? Alex: Yes. I mean, I think we could build a very substantial business off the APIs that we currently have, and we will definitely be doing that and improving them. But I also think one core idea of Clearbit is to have a whole suite of data APIs and cross-sell people. It’s a lot like AWS’ approach to things. You go in and start using S3, and then you’re like, “What’s this EC2 thing?,” and then you get more and more into the ecosystem. That’s our strategy as well. So we will be focused on building more APIs this year and improving our existing ones. Ed: That sounds great. Before we go, is there anything that you guys would like to mention? Are you hiring right now? Alex: We’re hiring. Ideally based in San Francisco, but we have one person in Costa Rica and one person in London, so remote is fine as well. Ed: Actually that’s an interesting point. Is that something you’re open to? Building a remote company? Or do you think there’s too much value having everyone co-located? Alex: I’d rather everybody be in the same room. There’s so much interaction you miss with a remote team. I know a lot of people will disagree with me, but I can’t think of a sports team that was built remotely. I think it’s pretty important. Ed: Sure. Do you ever look back to the UK or London, or is it so great out there that you’ve never looked back at all? Alex: Well, I go back once a year or so. But I would never move home. I may move on from the US one day, but I’d never move back to England. From a company building perspective, being in the US helps so much. Being in San Francisco helps so much. So, no, not coming home any time soon. Share and follow! Passion for code paves the road to CEO: how @maccaw went from @Stripe to @Clearbit https://t.co/NkNTNeXIGN #SaaS pic.twitter.com/ZX2XoijtV8 — ChartMogul (@ChartMogul) May 18, 2016 </sys

A Recap of Our Offsite 2022 in Portugal. 2017 in Germany, 2018 in Croatia, 2019 in Spain… We were asking ourselves, “when should we hold our next offsite?” right when the pandemic hit. After two years of staying safe, growing from 30 Moguls to 66, and many Zoom calls later, we successfully held our 2022 offsite in beautiful Cascais, Portugal in May 🌴 Sadly, not all of us could make it, but 41 Moguls traveled from 16 countries (Canada, India, Australia to name a few) to learn from our colleagues, enjoy each other’s company, and drink port wine while admiring stunning views of the beach. Being a remote team, this was the first time many of us were meeting each other face-to-face or even at all. To avoid calling one another by wrong names or confusing other hotel guests as a fellow Mogul, we wore name tags and matching ChartMogul t-shirts beautifully designed by our Creative team! 👕 The offsite started at the hotel with all of us catching up over our first team dinner and drinks. The next morning, we excitedly jumped into the first day of content, starting with a keynote from Nick Franklin (Founder/CEO). This was followed by motivational workshops and presentations conducted by team members, including the evolution of customer centricity with Ingmar Zahorsky (GM North America & VP of Customer Success) and Tyler Daley (Director of Strategic Accounts), effective writing with Carly Chalmers (Senior Instructional Designer), and ESOP essentials with Brittany Heilmann (Legal & Compliance Manager). Sara Archer (VP of Sales) ran a team building session: “The Egg Drop Challenge.” We formed groups of 4-5 and came up with the best way to protect our eggs from a fall using materials like balloons, straws, and toilet paper rolls. This activity not only tested our problem-solving skills and creativity, but was also very fun and a great way to bond with our team! There was no winner, it turns out that we were all too good at protecting our eggs and they each survived the drop! We invited a special guest speaker, Rachel Kaplowitz (Founder/CEO of Honey), who has been a ChartMogul customer since 2015. Rachel shared her inspiring journey of being a founder and how ChartMogul helped her grow and run her company. The final day kicked off with more engaging and informative sessions from Sales, Product, and Content Marketing as well as learning about the Engineering roadmap. It was a great chance for Moguls to gain further insight into how other teams work and see how each team helps the wheels turn to get us closer to our company goals. After a delicious lunch at the hotel, we got ready for a team activity. Each team had a blast at the outing of their choice: exploring Pena Palace and tasting port wine in Sintra; learning to golf and having a fun, little competition; or enjoying the sea breeze on a boat with surprise visits from dolphins! Check out this cool music video created by Ingmar (our VP of Customer Success) 🎵 https://youtu.be/WUNNalaE4Ms Before bidding adieu, we all gathered together for a final team dinner at a Portuguese restaurant and afterwards, some of us rallied over to a nearby bar for drinks and karaoke! (Yes, there are videos of us singing, but they are hidden in the vaults for only us to enjoy 😉 ) All in all, it was a great reunion for some and for others, a memorable time meeting fellow Moguls for the first time. Being a remote company has its perks and we can send as many emojis and GIFs on Slack to each other as we want, but the offsite reminded us again how good it is to have those face-to-face moments and bond with each other in ways that are different from Zoom calls or Slack huddles. Want To Join Our Next Offsite? We hope to continue the tradition of our annual company offsite, so if you want to join us for our next one, we are hiring across multiple roles and locations! Check out our careers page! 🚀

[INST] A Recap of Our Offsite 2022 in Portugal [/INST]

2017 in Germany, 2018 in Croatia, 2019 in Spain… We were asking ourselves, “when should we hold our next offsite?” right when the pandemic hit. After two years of staying safe, growing from 30 Moguls to 66, and many Zoom calls later, we successfully held our 2022 offsite in beautiful Cascais, Portugal in May 🌴 Sadly, not all of us could make it, but 41 Moguls traveled from 16 countries (Canada, India, Australia to name a few) to learn from our colleagues, enjoy each other’s company, and drink port wine while admiring stunning views of the beach. Being a remote team, this was the first time many of us were meeting each other face-to-face or even at all. To avoid calling one another by wrong names or confusing other hotel guests as a fellow Mogul, we wore name tags and matching ChartMogul t-shirts beautifully designed by our Creative team! 👕 The offsite started at the hotel with all of us catching up over our first team dinner and drinks. The next morning, we excitedly jumped into the first day of content, starting with a keynote from Nick Franklin (Founder/CEO). This was followed by motivational workshops and presentations conducted by team members, including the evolution of customer centricity with Ingmar Zahorsky (GM North America & VP of Customer Success) and Tyler Daley (Director of Strategic Accounts), effective writing with Carly Chalmers (Senior Instructional Designer), and ESOP essentials with Brittany Heilmann (Legal & Compliance Manager). Sara Archer (VP of Sales) ran a team building session: “The Egg Drop Challenge.” We formed groups of 4-5 and came up with the best way to protect our eggs from a fall using materials like balloons, straws, and toilet paper rolls. This activity not only tested our problem-solving skills and creativity, but was also very fun and a great way to bond with our team! There was no winner, it turns out that we were all too good at protecting our eggs and they each survived the drop! We invited a special guest speaker, Rachel Kaplowitz (Founder/CEO of Honey), who has been a ChartMogul customer since 2015. Rachel shared her inspiring journey of being a founder and how ChartMogul helped her grow and run her company. The final day kicked off with more engaging and informative sessions from Sales, Product, and Content Marketing as well as learning about the Engineering roadmap. It was a great chance for Moguls to gain further insight into how other teams work and see how each team helps the wheels turn to get us closer to our company goals. After a delicious lunch at the hotel, we got ready for a team activity. Each team had a blast at the outing of their choice: exploring Pena Palace and tasting port wine in Sintra; learning to golf and having a fun, little competition; or enjoying the sea breeze on a boat with surprise visits from dolphins! Check out this cool music video created by Ingmar (our VP of Customer Success) 🎵 https://youtu.be/WUNNalaE4Ms Before bidding adieu, we all gathered together for a final team dinner at a Portuguese restaurant and afterwards, some of us rallied over to a nearby bar for drinks and karaoke! (Yes, there are videos of us singing, but they are hidden in the vaults for only us to enjoy 😉 ) All in all, it was a great reunion for some and for others, a memorable time meeting fellow Moguls for the first time. Being a remote company has its perks and we can send as many emojis and GIFs on Slack to each other as we want, but the offsite reminded us again how good it is to have those face-to-face moments and bond with each other in ways that are different from Zoom calls or Slack huddles. Want To Join Our Next Offsite? We hope to continue the tradition of our annual company offsite, so if you want to join us for our next one, we are hiring across multiple roles and locations! Check out our careers page! 🚀

<sys> [INST] A Recap of Our Offsite 2022 in Portugal [/INST] 2017 in Germany, 2018 in Croatia, 2019 in Spain… We were asking ourselves, “when should we hold our next offsite?” right when the pandemic hit. After two years of staying safe, growing from 30 Moguls to 66, and many Zoom calls later, we successfully held our 2022 offsite in beautiful Cascais, Portugal in May 🌴 Sadly, not all of us could make it, but 41 Moguls traveled from 16 countries (Canada, India, Australia to name a few) to learn from our colleagues, enjoy each other’s company, and drink port wine while admiring stunning views of the beach. Being a remote team, this was the first time many of us were meeting each other face-to-face or even at all. To avoid calling one another by wrong names or confusing other hotel guests as a fellow Mogul, we wore name tags and matching ChartMogul t-shirts beautifully designed by our Creative team! 👕 The offsite started at the hotel with all of us catching up over our first team dinner and drinks. The next morning, we excitedly jumped into the first day of content, starting with a keynote from Nick Franklin (Founder/CEO). This was followed by motivational workshops and presentations conducted by team members, including the evolution of customer centricity with Ingmar Zahorsky (GM North America & VP of Customer Success) and Tyler Daley (Director of Strategic Accounts), effective writing with Carly Chalmers (Senior Instructional Designer), and ESOP essentials with Brittany Heilmann (Legal & Compliance Manager). Sara Archer (VP of Sales) ran a team building session: “The Egg Drop Challenge.” We formed groups of 4-5 and came up with the best way to protect our eggs from a fall using materials like balloons, straws, and toilet paper rolls. This activity not only tested our problem-solving skills and creativity, but was also very fun and a great way to bond with our team! There was no winner, it turns out that we were all too good at protecting our eggs and they each survived the drop! We invited a special guest speaker, Rachel Kaplowitz (Founder/CEO of Honey), who has been a ChartMogul customer since 2015. Rachel shared her inspiring journey of being a founder and how ChartMogul helped her grow and run her company. The final day kicked off with more engaging and informative sessions from Sales, Product, and Content Marketing as well as learning about the Engineering roadmap. It was a great chance for Moguls to gain further insight into how other teams work and see how each team helps the wheels turn to get us closer to our company goals. After a delicious lunch at the hotel, we got ready for a team activity. Each team had a blast at the outing of their choice: exploring Pena Palace and tasting port wine in Sintra; learning to golf and having a fun, little competition; or enjoying the sea breeze on a boat with surprise visits from dolphins! Check out this cool music video created by Ingmar (our VP of Customer Success) 🎵 https://youtu.be/WUNNalaE4Ms Before bidding adieu, we all gathered together for a final team dinner at a Portuguese restaurant and afterwards, some of us rallied over to a nearby bar for drinks and karaoke! (Yes, there are videos of us singing, but they are hidden in the vaults for only us to enjoy 😉 ) All in all, it was a great reunion for some and for others, a memorable time meeting fellow Moguls for the first time. Being a remote company has its perks and we can send as many emojis and GIFs on Slack to each other as we want, but the offsite reminded us again how good it is to have those face-to-face moments and bond with each other in ways that are different from Zoom calls or Slack huddles. Want To Join Our Next Offsite? We hope to continue the tradition of our annual company offsite, so if you want to join us for our next one, we are hiring across multiple roles and locations! Check out our careers page! 🚀 </sys

Introducing ChartMogul CRM. Today is an exciting day for us at ChartMogul; we’re launching a CRM, tailor-made for B2B SaaS companies. And we’re excited for you to try it. A CRM designed for B2B SaaS companies We’ve spent the past eight years helping SaaS companies analyze their recurring revenue using our Subscription Analytics Platform. From calculating MRR movements, to enabling cohort analysis, we’ve helped our customers deeply understand the dynamics of their subscription businesses. But for a while we’ve been thinking that we could provide more prescriptive insights for our customers by combining data from the pre-purchase lead journey, with the subscription history that’s already being analyzed in ChartMogul. We noticed that our users have been doing more and more CRM-like activities in their ChartMogul accounts. They add custom attributes and tags to customer profiles, and save custom customer lists. So we got to thinking, what would it mean if we built a CRM in ChartMogul? We could combine subscription data with sales opportunities and customer communication in one place. We could build powerful analytics that show performance across the entire customer journey. And we could enable people to answer questions in one platform like “what’s the difference in Net Revenue Retention between sales-assisted vs. customers who self-serve?” We figured that if we were able to put all this information in one system, not only would it be more convenient for users (one less SaaS platform to maintain), but we could enable some really helpful insights which aren’t possible with any other CRM. Naturally, most of our customers already have a CRM, but those CRMs weren’t built with the needs of product-first B2B SaaS companies in mind. They don’t really handle subscription data at all. So to get the full picture of how much revenue you’re generating from sales activity, you need to gather data from a bunch of different places. So, we built the CRM that we want to use ourselves. A CRM backed by powerful subscription analytics ChartMogul can now combine your lead, trial, opportunity, and subscription data together in a single platform, allowing you to analyze your entire funnel in a way no other CRM can. We’ve included many of the standard CRM features you’re used to. Your account execs can create opportunities, and manage those deals through custom sales pipelines. Track all communication with prospects from a single view and use simple workflow features like call logs, notes, and email templates to keep deals moving through deal-stages. Track all communication with prospects from a single view. Leaders can get a bird’s-eye-view over the current sales-led pipeline and can run forecast calls easily with the whole team. Because we built ChartMogul CRM with SaaS businesses in mind, you can also see self-service revenue and adjust the funnel stages to fit how you think about your customer journey. The Deal Stage Probability Forecast and Forecast Category Report help managers keep an eye on the current state of the pipeline to see if the team is on track to reach its targets. With the Pipeline Funnel Analysis you can measure the rate at which leads become opportunities and see where deals might have stalled. You can see how much of your self-serve business contributes to ARR and how that has changed over time. See how your sales-led function compares to self-serve and how effective they are If you’d like to get a personalized tour of ChartMogul CRM and learn more about how it could work for your early-stage start up, book time with us. Get started today, for free Best of all, you can use it right now for free. All ChartMogul customers can assign three CRM seats for free. If you need more than three seats you can upgrade to CRM PRO through your billing page. Once you’ve been assigned a seat, you will have access to a suite of new features. Check out the CRM help center section if you need help getting started. ChartMogul CRM is a natural extension of our existing product, and a big step forwards in fulfilling our mission of helping more B2B SaaS companies succeed. There’s so much more to come. We’ll continue the rapid pace of innovation in Subscription Analytics while also building out the best CRM in the world for B2B SaaS companies like you.

[INST] Introducing ChartMogul CRM [/INST]

Today is an exciting day for us at ChartMogul; we’re launching a CRM, tailor-made for B2B SaaS companies. And we’re excited for you to try it. A CRM designed for B2B SaaS companies We’ve spent the past eight years helping SaaS companies analyze their recurring revenue using our Subscription Analytics Platform. From calculating MRR movements, to enabling cohort analysis, we’ve helped our customers deeply understand the dynamics of their subscription businesses. But for a while we’ve been thinking that we could provide more prescriptive insights for our customers by combining data from the pre-purchase lead journey, with the subscription history that’s already being analyzed in ChartMogul. We noticed that our users have been doing more and more CRM-like activities in their ChartMogul accounts. They add custom attributes and tags to customer profiles, and save custom customer lists. So we got to thinking, what would it mean if we built a CRM in ChartMogul? We could combine subscription data with sales opportunities and customer communication in one place. We could build powerful analytics that show performance across the entire customer journey. And we could enable people to answer questions in one platform like “what’s the difference in Net Revenue Retention between sales-assisted vs. customers who self-serve?” We figured that if we were able to put all this information in one system, not only would it be more convenient for users (one less SaaS platform to maintain), but we could enable some really helpful insights which aren’t possible with any other CRM. Naturally, most of our customers already have a CRM, but those CRMs weren’t built with the needs of product-first B2B SaaS companies in mind. They don’t really handle subscription data at all. So to get the full picture of how much revenue you’re generating from sales activity, you need to gather data from a bunch of different places. So, we built the CRM that we want to use ourselves. A CRM backed by powerful subscription analytics ChartMogul can now combine your lead, trial, opportunity, and subscription data together in a single platform, allowing you to analyze your entire funnel in a way no other CRM can. We’ve included many of the standard CRM features you’re used to. Your account execs can create opportunities, and manage those deals through custom sales pipelines. Track all communication with prospects from a single view and use simple workflow features like call logs, notes, and email templates to keep deals moving through deal-stages. Track all communication with prospects from a single view. Leaders can get a bird’s-eye-view over the current sales-led pipeline and can run forecast calls easily with the whole team. Because we built ChartMogul CRM with SaaS businesses in mind, you can also see self-service revenue and adjust the funnel stages to fit how you think about your customer journey. The Deal Stage Probability Forecast and Forecast Category Report help managers keep an eye on the current state of the pipeline to see if the team is on track to reach its targets. With the Pipeline Funnel Analysis you can measure the rate at which leads become opportunities and see where deals might have stalled. You can see how much of your self-serve business contributes to ARR and how that has changed over time. See how your sales-led function compares to self-serve and how effective they are If you’d like to get a personalized tour of ChartMogul CRM and learn more about how it could work for your early-stage start up, book time with us. Get started today, for free Best of all, you can use it right now for free. All ChartMogul customers can assign three CRM seats for free. If you need more than three seats you can upgrade to CRM PRO through your billing page. Once you’ve been assigned a seat, you will have access to a suite of new features. Check out the CRM help center section if you need help getting started. ChartMogul CRM is a natural extension of our existing product, and a big step forwards in fulfilling our mission of helping more B2B SaaS companies succeed. There’s so much more to come. We’ll continue the rapid pace of innovation in Subscription Analytics while also building out the best CRM in the world for B2B SaaS companies like you.

<sys> [INST] Introducing ChartMogul CRM [/INST] Today is an exciting day for us at ChartMogul; we’re launching a CRM, tailor-made for B2B SaaS companies. And we’re excited for you to try it. A CRM designed for B2B SaaS companies We’ve spent the past eight years helping SaaS companies analyze their recurring revenue using our Subscription Analytics Platform. From calculating MRR movements, to enabling cohort analysis, we’ve helped our customers deeply understand the dynamics of their subscription businesses. But for a while we’ve been thinking that we could provide more prescriptive insights for our customers by combining data from the pre-purchase lead journey, with the subscription history that’s already being analyzed in ChartMogul. We noticed that our users have been doing more and more CRM-like activities in their ChartMogul accounts. They add custom attributes and tags to customer profiles, and save custom customer lists. So we got to thinking, what would it mean if we built a CRM in ChartMogul? We could combine subscription data with sales opportunities and customer communication in one place. We could build powerful analytics that show performance across the entire customer journey. And we could enable people to answer questions in one platform like “what’s the difference in Net Revenue Retention between sales-assisted vs. customers who self-serve?” We figured that if we were able to put all this information in one system, not only would it be more convenient for users (one less SaaS platform to maintain), but we could enable some really helpful insights which aren’t possible with any other CRM. Naturally, most of our customers already have a CRM, but those CRMs weren’t built with the needs of product-first B2B SaaS companies in mind. They don’t really handle subscription data at all. So to get the full picture of how much revenue you’re generating from sales activity, you need to gather data from a bunch of different places. So, we built the CRM that we want to use ourselves. A CRM backed by powerful subscription analytics ChartMogul can now combine your lead, trial, opportunity, and subscription data together in a single platform, allowing you to analyze your entire funnel in a way no other CRM can. We’ve included many of the standard CRM features you’re used to. Your account execs can create opportunities, and manage those deals through custom sales pipelines. Track all communication with prospects from a single view and use simple workflow features like call logs, notes, and email templates to keep deals moving through deal-stages. Track all communication with prospects from a single view. Leaders can get a bird’s-eye-view over the current sales-led pipeline and can run forecast calls easily with the whole team. Because we built ChartMogul CRM with SaaS businesses in mind, you can also see self-service revenue and adjust the funnel stages to fit how you think about your customer journey. The Deal Stage Probability Forecast and Forecast Category Report help managers keep an eye on the current state of the pipeline to see if the team is on track to reach its targets. With the Pipeline Funnel Analysis you can measure the rate at which leads become opportunities and see where deals might have stalled. You can see how much of your self-serve business contributes to ARR and how that has changed over time. See how your sales-led function compares to self-serve and how effective they are If you’d like to get a personalized tour of ChartMogul CRM and learn more about how it could work for your early-stage start up, book time with us. Get started today, for free Best of all, you can use it right now for free. All ChartMogul customers can assign three CRM seats for free. If you need more than three seats you can upgrade to CRM PRO through your billing page. Once you’ve been assigned a seat, you will have access to a suite of new features. Check out the CRM help center section if you need help getting started. ChartMogul CRM is a natural extension of our existing product, and a big step forwards in fulfilling our mission of helping more B2B SaaS companies succeed. There’s so much more to come. We’ll continue the rapid pace of innovation in Subscription Analytics while also building out the best CRM in the world for B2B SaaS companies like you. </sys

9 Startup Lessons From Phil Knight, Creator of NIKE. Nike is one of the best-known brands in the world today. It sells almost 1,500 shoes every minute. That is 780 million shoes every year. Most likely, at some point in your life, you might have worn a Nike yourself. Since its public listing in 1980, Nike has returned its investors over 1200x their original investment. But like every other startup, it started small. It started with a crazy idea. Phil Knights’ crazy idea. Over the years, Phil’s & Nike’s journey has been full of many ups and downs. Phil documents this in his bestselling book, Shoe Dog. In this post, we share with you nine lessons that all startups can learn from his inspirational journey. 1) Don’t Wish for Your Problems To Go Away… Because They Never Will The path to building a great company is full of challenges. To mention that Nike’s path had a few is a massive understatement. Nike was only 2 months old when it ran into its first challenge — a legal battle with another competing distributor. It had only just resolved this legal hurdle, that another problem hit — one of its early employees threatened to quit. To add to all this, Nike faced constant delays from its supplier, Onitsuka in Japan, causing all sorts of problems. Phil, in his book, Shoe Dog writes: “Onitsuka was always late shipping my shoes, which meant less time to sell, which meant less time to make enough money to cover my loan. When I complained, Onitsuka didn’t answer” Later in Nike’s journey, its bank, Bank of California, fired it. The bank refused to do any business with Nike. Without a bank, Nike was almost on the verge of collapse. “… the net-net is that I have no bank. And thus I have no money. And I need to make payroll. And I need to pay my other creditors. And if I can’t meet those obligations, I am out of business.” As the company continued to grow, the problems continued to grow as well. “Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while stakes were forever getting higher.” Ultimately, Phil realized that the problems will never go away. They are a part of the building process. “The problems were never going to stop, I realized, but for the moment we had more momentum than problems.” Startups often face a multitude of problems. For example, a release might get delayed. A competitor might copy your product. An employee might jump ship. An investor might pressure you to get acquired. A major customer might default. A media outlet might criticize you. The list goes on. As founders or early employees, you might wish for these problems to go away. But alas, they never do. You need to accept that problems are a part of the building process. They are here to stay. Do not wish for them to go away. Gather the courage to face them. 2) Hire a Team of Believers Before starting Nike, Phil Knight had two different sales jobs. In one, he sold encyclopedias and in the other, he sold mutual funds. He recounts that he barely made any sales. He didn’t believe in those things and hence sold them reluctantly. But with Nike it was different. He believed in the shoes and that made a difference. “Driving back to Portland I’d puzzle over my sudden success at selling. I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because I realized, it wasn’t selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves.” Nike’s co-founder, Bowerman, a track shoe coach, was a believer too. And so were all other early Nike team members. For them Nike was more than just a job, it was their life’s mission. They were all shoe dogs. “Shoes were their way of connecting with humanity. What better way of connecting, shoe dogs thought, than by refining the hinge that joins each person to the world’s surface?” Bowerman, on his part, spent countless hours researching and crafting the perfect shoe. “Bowerman was a genius coach, a master motivator, a natural leader of young men, and there was one piece of gear he deemed crucial to their development. Shoes. He was obsessed with how human beings are shod. […] He’d spend days tearing them apart, stitching them back up, then hand them back with some minor modification, which made us either run like deer or bleed. Regardless of the results he never stopped.” Unknown to Knight, some of Nike’s other early employees skipped cashing in their paychecks altogether. For them, working at Nike was not about money. It was about something else. It was about their calling. “I’d tell men and women in their mid-twenties not settle for a job or a profession or even a career. Seek a calling. Even if you don’t know what it means, seek it. If you’re falling your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt” In every startups’ journey, there are bound to be rough patches. At times, money will be tight. Other times, the workload will be sky-high. It would be rather tough for someone who does not believe in the mission to stick around for long. That is why, when hiring for startups, hire people who are bought into your mission. Hire a team of believers. 3) Target Your End Customers In Nike’s early days, while pitching his track shoes, sporting good stores would dismiss Phil saying: “Kid, what this world does not need is another track shoe!” He was not discouraged. Instead, he started pitching his track shoes to end customers, i.e. the coaches and the runners. And it worked wonders. “I drove all over the Pacific Northwest, to various track meets. Between races, I’d chat up the coaches, the runners, the fans, and show them my wares. The response was always the same. I couldn’t write orders fast enough. […] Sometimes people wanted my shoes so badly that they’d write me, or phone me, saying they’d heard about new Tigers and just had to have a pair, could I please send them?” Similarly, in Silicon Valley, Stripe grew its product by pitching it to developers, instead of finance chiefs. Collison brothers talk about how Stripe’s primary appeal i.e. easy integration was aimed at developers. “…think many of the developers were just really glad that someone was finally paying attention to them at all.” As startups, you should always cut through the noise and directly target your end customers. They are the ones who are going to benefit the most from your product and potentially influence the sale. Start cultivating relationships with them. Take inspiration from Nike’s early employee, Johnson. “He sent them Christmas Cards. He sent them birthday cards. He sent them notes of congratulation after they completed a big race or marathon. […] Most customers came to depend on Johnson’s letter. Most wrote him back. They’d tell him about their lives, their troubles, their injuries, and he would lavishly console, sympathize and advise.” 4) Your Brand Does Not Have To Be Perfect on Day 1 We know Nike today as one of the best brands in the world. But you know what? Nike and its swoosh logo were not even born until after 11 years of its existence. In its early years, the company was called Blue Ribbon. It was only in 1975 after a particular shoe range called Nike became popular that they renamed the company to Nike Inc. Phil recalls: “More than a brand, Nike was now becoming a household word, to such an extent that we would have to change the company name. Blue Ribbon, we decided, had run its course. We would have to incorporate as Nike, Inc.” Startups sometimes spend loads of energy in getting to the perfect brand on Day 1. Although important, let not branding decisions cripple you down. Instead, make a decision and move on. As with Nike, your brand can always evolve over time. Bonus fact: Phil wanted to originally call the Nike range of shoes “Dimension Six”. The employees said no and one of them came up with the name Nike instead. 5) Take Care of Your Mental and Physical Health Bringing an idea to life can be rewarding and fun. But it can also be hard emotionally. Rejection after rejection can knock you down. Phil recalls: “I wasn’t built for heavy doses of rejection. I’d known this about myself since high school, freshman year, when I got cut from the baseball team. A small setback, in the grand scheme, but it knocked me sideways.” Long working hours can also take their toll. Phil, unable to disconnect, started to get lost in his work. “I often didn’t hear what she [her wife] said, and if I did hear I didn’t remember it minutes later. She was learning that I was absentminded, that I would drive to the grocery store and come empty-handed, without the one item she’d asked me to buy, because all the way there and all the way back I’d been puzzling over the latest bank crisis, or the most recent Onitsuka shipping delay. […] I told her I didn’t know when I’d craved a holiday so much. I needed rest, and sleep, and good food” At one point, he also gave up on his running habit, something that had inspired him to start Nike in the first place. “My weight ballooned. By the middle of 1970, I was around 190, an all-time high. […] Somehow I’d gotten out of the running habit. Blue Ribbon, marriage, fatherhood – there was never time. Also, I’d felt burned out.” Times were tough. But fortunately, Phil introspected. He swore to get back on the track. He started running again. Working at startups can be tough. You always have more to do than there is time. The worst thing that you can do in this situation is to let your work get onto your health. There is nothing in the world, seriously nothing, more important than your health. Every dream, every opportunity, every dollar becomes irrelevant if your health is not with you. Health has to be your top priority. Everything else comes after that. 6) Keep a Tab on Your Company’s Financial Health There were multiple instances when Nike was on the verge of bankruptcy. In its early days, liquidity was very tight. “…1970 was Summer of Liquidity, and I had none. I spent most of every day thinking about liquidity, talking about liquidity, looking to the heavens, and pleading for liquidity.[…] we weren’t broke, we just had no money. Lots of assets, no cash.” Paying its creditors on time was always a big headache. “We struggled to make every payment, to Bank of California, to all of our other creditors, but that Nissho payment at the end of the month was like passing a kidney stone. As we’d begin scraping together our available cash, writing checks with barely enough to cover them, we’d start to sweat. The Nissho payment was sometimes so big that we’d be dead broke for a day or two.” This culminated in constant stress. Stress around bringing in new sales and about the company’s future. “If we didn’t “sell-through”, sell all the shoes in our most recent order, and quickly convert that product into cash, we’d be in big trouble. […] We were leveraged to the hilt, and like most people who live from paycheck to paycheck, we were walking the edge of a precipice.” In the early stages, startups tend to focus more on the company’s product, technology, and distribution. Sometimes, rightly so. But once in a while, you should also direct your attention to the company’s finances. Make sure that your books are in place, you are aware of your cash flow situation, and you have the runway you need to succeed. 7) Managing Work/Life Balance Is Tough During Nike’s early days, Phil wrote about his rigorous work schedule. To start with, things were trending well. “I was putting in six days a week at Price Waterhouse, spending early mornings and late nights and all weekends and vacations at Blue Ribbon [Nike]. No friends, no exercise, no social life – and wholly content. My life was out of balance, sure, but I didn’t care. In fact, I wanted even more imbalance. Or a different kind of imbalance.” But once Phil started a family, things started to go downhill. As demands of both work and family life increased, Phil had to make some tough choices. “I didn’t like leaving Penny alone with Matthew [Phil’s first son], especially around holidays, but it couldn’t be avoided.” With the birth of Phil’s second son, the choices got even tougher. He had to decide between spending time with his work-family and real-family. “The buttfaces [Nike’s inner team] were like family, but every minute I spent with them was at the cost of my other family, my real family. The guilt was palpable. Often I’d walk into my house and Matthew and Travis would meet me at the door. ‘Where have you been’ they’d ask’ ” Unable to spend much time with kids, Phil felt remorse and then regret. “By the end of 1973, I thought, it’s very possible I’ll have two kids and no job. […] Was it even feasible to run a startup company while starting a family? Should I go back to accounting, or teaching, or something more stable?. […] But in late 1977, when I evaluated myself honestly, when I looked at how much time I was spending away from the boys, and how distant I was even when I was home, I gave myself low marks.” Finding a balance between your work and personal life is hard. You are often juggling multiple priorities. And knowingly or unknowingly you are forced to prioritize. Unfortunately, finding balance is not easy. Indra Nooyi, PepsiCo’s ex-CEO, gives an honest insight into her work/life balance challenges here. She recommends developing coping mechanisms as a way to manage the work/life balance challenge. 8) Be Wary of the Bargaining Power of Suppliers Michael E. Porter, in his competitive strategy framework, talks about how suppliers with huge bargaining power can adversely impact a company’s profitability. A live example of this is Nike. In Nike’s early years, it depended solely on 1 big Japanese supplier named Onitsuka for its shoes. As a result, Onitsuka exerted a huge bargaining power over Nike. Though their relationship was mutually beneficial, it was full of conflicts and problems. One time, Onitsuka threatened to cut off Nike completely. “Onitsuka was considering a clean break with Blue Ribbon, and Kitami was in touch with several distributors in the United States.” Another time, they targeted Nike with a hostile takeover. They said: “Onitsuka Co. Ltd will buy a controlling interest in Blue Ribbon, fifty-one percent. It is the best deal for your company. And you. You would be wise to accept” All of this cornered Nike into a state of helplessness. “I still needed him. I had no backup, no plan B, no exit strategy. If I was going to save Blue Ribbon [Nike], I needed to do it slowly, on my own schedule so as not to spook customers and retailers.” Ultimately, Nike diversified its supply and got over its Onitsuka problem. Thinking about it, startups, as well, can sometimes come to rely heavily on a single big supplier or customer. This can be risky. It doesn’t take a lot for things to turn awry and you to find yourself in the middle of a perfect storm. As you grow, make sure you have a plan, in case your supplier or customer were to hold a gun to your head. 9) Never Stop It took many years of hard work and determination for Nike to get to where it currently is. For the majority of its first decade of existence, Nike couldn’t afford Phil’s salary. He had to take full and part-time jobs to support himself. “Blue Ribbon simply couldn’t support me. Though the company was on track to double sales for a fifth straight year, it still couldn’t justify a salary for its co-founder.” Nike’s initial product development ideas (to its suppliers) were almost always dismissed or never replied to. “Most of Bowerman’s letters [and ideas] were unanswered. When there was an answer, it was cryptic, or curly dismissive. Nike’s first attempt to raise capital failed miserably. “Woodell and I sent out fliers advertising our first offering, then sent back and braced for the clamorous response. Silence. A month passed. Deafening silence. Not one phone. Not one person.” But the team never lost hope. They kept running. “Every runner knows this. You run and run, mile after mile, and you never quite know why. You tell yourself that you are running toward some goal, chasing some rush, but really you run because the alternative, stopping, scares you to death.” As startups, we sometimes give up on our ideas and dreams way too early. We stop. If we were to learn just one thing from Phil Knight and Nike’s inspirational journey, it would be to NEVER STOP! “Let everyone else call your idea crazy, [you] just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop.” Note: The author would like to thank the Noun Project for the image icons.

[INST] 9 Startup Lessons From Phil Knight, Creator of NIKE [/INST]

Nike is one of the best-known brands in the world today. It sells almost 1,500 shoes every minute. That is 780 million shoes every year. Most likely, at some point in your life, you might have worn a Nike yourself. Since its public listing in 1980, Nike has returned its investors over 1200x their original investment. But like every other startup, it started small. It started with a crazy idea. Phil Knights’ crazy idea. Over the years, Phil’s & Nike’s journey has been full of many ups and downs. Phil documents this in his bestselling book, Shoe Dog. In this post, we share with you nine lessons that all startups can learn from his inspirational journey. 1) Don’t Wish for Your Problems To Go Away… Because They Never Will The path to building a great company is full of challenges. To mention that Nike’s path had a few is a massive understatement. Nike was only 2 months old when it ran into its first challenge — a legal battle with another competing distributor. It had only just resolved this legal hurdle, that another problem hit — one of its early employees threatened to quit. To add to all this, Nike faced constant delays from its supplier, Onitsuka in Japan, causing all sorts of problems. Phil, in his book, Shoe Dog writes: “Onitsuka was always late shipping my shoes, which meant less time to sell, which meant less time to make enough money to cover my loan. When I complained, Onitsuka didn’t answer” Later in Nike’s journey, its bank, Bank of California, fired it. The bank refused to do any business with Nike. Without a bank, Nike was almost on the verge of collapse. “… the net-net is that I have no bank. And thus I have no money. And I need to make payroll. And I need to pay my other creditors. And if I can’t meet those obligations, I am out of business.” As the company continued to grow, the problems continued to grow as well. “Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while stakes were forever getting higher.” Ultimately, Phil realized that the problems will never go away. They are a part of the building process. “The problems were never going to stop, I realized, but for the moment we had more momentum than problems.” Startups often face a multitude of problems. For example, a release might get delayed. A competitor might copy your product. An employee might jump ship. An investor might pressure you to get acquired. A major customer might default. A media outlet might criticize you. The list goes on. As founders or early employees, you might wish for these problems to go away. But alas, they never do. You need to accept that problems are a part of the building process. They are here to stay. Do not wish for them to go away. Gather the courage to face them. 2) Hire a Team of Believers Before starting Nike, Phil Knight had two different sales jobs. In one, he sold encyclopedias and in the other, he sold mutual funds. He recounts that he barely made any sales. He didn’t believe in those things and hence sold them reluctantly. But with Nike it was different. He believed in the shoes and that made a difference. “Driving back to Portland I’d puzzle over my sudden success at selling. I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because I realized, it wasn’t selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves.” Nike’s co-founder, Bowerman, a track shoe coach, was a believer too. And so were all other early Nike team members. For them Nike was more than just a job, it was their life’s mission. They were all shoe dogs. “Shoes were their way of connecting with humanity. What better way of connecting, shoe dogs thought, than by refining the hinge that joins each person to the world’s surface?” Bowerman, on his part, spent countless hours researching and crafting the perfect shoe. “Bowerman was a genius coach, a master motivator, a natural leader of young men, and there was one piece of gear he deemed crucial to their development. Shoes. He was obsessed with how human beings are shod. […] He’d spend days tearing them apart, stitching them back up, then hand them back with some minor modification, which made us either run like deer or bleed. Regardless of the results he never stopped.” Unknown to Knight, some of Nike’s other early employees skipped cashing in their paychecks altogether. For them, working at Nike was not about money. It was about something else. It was about their calling. “I’d tell men and women in their mid-twenties not settle for a job or a profession or even a career. Seek a calling. Even if you don’t know what it means, seek it. If you’re falling your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt” In every startups’ journey, there are bound to be rough patches. At times, money will be tight. Other times, the workload will be sky-high. It would be rather tough for someone who does not believe in the mission to stick around for long. That is why, when hiring for startups, hire people who are bought into your mission. Hire a team of believers. 3) Target Your End Customers In Nike’s early days, while pitching his track shoes, sporting good stores would dismiss Phil saying: “Kid, what this world does not need is another track shoe!” He was not discouraged. Instead, he started pitching his track shoes to end customers, i.e. the coaches and the runners. And it worked wonders. “I drove all over the Pacific Northwest, to various track meets. Between races, I’d chat up the coaches, the runners, the fans, and show them my wares. The response was always the same. I couldn’t write orders fast enough. […] Sometimes people wanted my shoes so badly that they’d write me, or phone me, saying they’d heard about new Tigers and just had to have a pair, could I please send them?” Similarly, in Silicon Valley, Stripe grew its product by pitching it to developers, instead of finance chiefs. Collison brothers talk about how Stripe’s primary appeal i.e. easy integration was aimed at developers. “…think many of the developers were just really glad that someone was finally paying attention to them at all.” As startups, you should always cut through the noise and directly target your end customers. They are the ones who are going to benefit the most from your product and potentially influence the sale. Start cultivating relationships with them. Take inspiration from Nike’s early employee, Johnson. “He sent them Christmas Cards. He sent them birthday cards. He sent them notes of congratulation after they completed a big race or marathon. […] Most customers came to depend on Johnson’s letter. Most wrote him back. They’d tell him about their lives, their troubles, their injuries, and he would lavishly console, sympathize and advise.” 4) Your Brand Does Not Have To Be Perfect on Day 1 We know Nike today as one of the best brands in the world. But you know what? Nike and its swoosh logo were not even born until after 11 years of its existence. In its early years, the company was called Blue Ribbon. It was only in 1975 after a particular shoe range called Nike became popular that they renamed the company to Nike Inc. Phil recalls: “More than a brand, Nike was now becoming a household word, to such an extent that we would have to change the company name. Blue Ribbon, we decided, had run its course. We would have to incorporate as Nike, Inc.” Startups sometimes spend loads of energy in getting to the perfect brand on Day 1. Although important, let not branding decisions cripple you down. Instead, make a decision and move on. As with Nike, your brand can always evolve over time. Bonus fact: Phil wanted to originally call the Nike range of shoes “Dimension Six”. The employees said no and one of them came up with the name Nike instead. 5) Take Care of Your Mental and Physical Health Bringing an idea to life can be rewarding and fun. But it can also be hard emotionally. Rejection after rejection can knock you down. Phil recalls: “I wasn’t built for heavy doses of rejection. I’d known this about myself since high school, freshman year, when I got cut from the baseball team. A small setback, in the grand scheme, but it knocked me sideways.” Long working hours can also take their toll. Phil, unable to disconnect, started to get lost in his work. “I often didn’t hear what she [her wife] said, and if I did hear I didn’t remember it minutes later. She was learning that I was absentminded, that I would drive to the grocery store and come empty-handed, without the one item she’d asked me to buy, because all the way there and all the way back I’d been puzzling over the latest bank crisis, or the most recent Onitsuka shipping delay. […] I told her I didn’t know when I’d craved a holiday so much. I needed rest, and sleep, and good food” At one point, he also gave up on his running habit, something that had inspired him to start Nike in the first place. “My weight ballooned. By the middle of 1970, I was around 190, an all-time high. […] Somehow I’d gotten out of the running habit. Blue Ribbon, marriage, fatherhood – there was never time. Also, I’d felt burned out.” Times were tough. But fortunately, Phil introspected. He swore to get back on the track. He started running again. Working at startups can be tough. You always have more to do than there is time. The worst thing that you can do in this situation is to let your work get onto your health. There is nothing in the world, seriously nothing, more important than your health. Every dream, every opportunity, every dollar becomes irrelevant if your health is not with you. Health has to be your top priority. Everything else comes after that. 6) Keep a Tab on Your Company’s Financial Health There were multiple instances when Nike was on the verge of bankruptcy. In its early days, liquidity was very tight. “…1970 was Summer of Liquidity, and I had none. I spent most of every day thinking about liquidity, talking about liquidity, looking to the heavens, and pleading for liquidity.[…] we weren’t broke, we just had no money. Lots of assets, no cash.” Paying its creditors on time was always a big headache. “We struggled to make every payment, to Bank of California, to all of our other creditors, but that Nissho payment at the end of the month was like passing a kidney stone. As we’d begin scraping together our available cash, writing checks with barely enough to cover them, we’d start to sweat. The Nissho payment was sometimes so big that we’d be dead broke for a day or two.” This culminated in constant stress. Stress around bringing in new sales and about the company’s future. “If we didn’t “sell-through”, sell all the shoes in our most recent order, and quickly convert that product into cash, we’d be in big trouble. […] We were leveraged to the hilt, and like most people who live from paycheck to paycheck, we were walking the edge of a precipice.” In the early stages, startups tend to focus more on the company’s product, technology, and distribution. Sometimes, rightly so. But once in a while, you should also direct your attention to the company’s finances. Make sure that your books are in place, you are aware of your cash flow situation, and you have the runway you need to succeed. 7) Managing Work/Life Balance Is Tough During Nike’s early days, Phil wrote about his rigorous work schedule. To start with, things were trending well. “I was putting in six days a week at Price Waterhouse, spending early mornings and late nights and all weekends and vacations at Blue Ribbon [Nike]. No friends, no exercise, no social life – and wholly content. My life was out of balance, sure, but I didn’t care. In fact, I wanted even more imbalance. Or a different kind of imbalance.” But once Phil started a family, things started to go downhill. As demands of both work and family life increased, Phil had to make some tough choices. “I didn’t like leaving Penny alone with Matthew [Phil’s first son], especially around holidays, but it couldn’t be avoided.” With the birth of Phil’s second son, the choices got even tougher. He had to decide between spending time with his work-family and real-family. “The buttfaces [Nike’s inner team] were like family, but every minute I spent with them was at the cost of my other family, my real family. The guilt was palpable. Often I’d walk into my house and Matthew and Travis would meet me at the door. ‘Where have you been’ they’d ask’ ” Unable to spend much time with kids, Phil felt remorse and then regret. “By the end of 1973, I thought, it’s very possible I’ll have two kids and no job. […] Was it even feasible to run a startup company while starting a family? Should I go back to accounting, or teaching, or something more stable?. […] But in late 1977, when I evaluated myself honestly, when I looked at how much time I was spending away from the boys, and how distant I was even when I was home, I gave myself low marks.” Finding a balance between your work and personal life is hard. You are often juggling multiple priorities. And knowingly or unknowingly you are forced to prioritize. Unfortunately, finding balance is not easy. Indra Nooyi, PepsiCo’s ex-CEO, gives an honest insight into her work/life balance challenges here. She recommends developing coping mechanisms as a way to manage the work/life balance challenge. 8) Be Wary of the Bargaining Power of Suppliers Michael E. Porter, in his competitive strategy framework, talks about how suppliers with huge bargaining power can adversely impact a company’s profitability. A live example of this is Nike. In Nike’s early years, it depended solely on 1 big Japanese supplier named Onitsuka for its shoes. As a result, Onitsuka exerted a huge bargaining power over Nike. Though their relationship was mutually beneficial, it was full of conflicts and problems. One time, Onitsuka threatened to cut off Nike completely. “Onitsuka was considering a clean break with Blue Ribbon, and Kitami was in touch with several distributors in the United States.” Another time, they targeted Nike with a hostile takeover. They said: “Onitsuka Co. Ltd will buy a controlling interest in Blue Ribbon, fifty-one percent. It is the best deal for your company. And you. You would be wise to accept” All of this cornered Nike into a state of helplessness. “I still needed him. I had no backup, no plan B, no exit strategy. If I was going to save Blue Ribbon [Nike], I needed to do it slowly, on my own schedule so as not to spook customers and retailers.” Ultimately, Nike diversified its supply and got over its Onitsuka problem. Thinking about it, startups, as well, can sometimes come to rely heavily on a single big supplier or customer. This can be risky. It doesn’t take a lot for things to turn awry and you to find yourself in the middle of a perfect storm. As you grow, make sure you have a plan, in case your supplier or customer were to hold a gun to your head. 9) Never Stop It took many years of hard work and determination for Nike to get to where it currently is. For the majority of its first decade of existence, Nike couldn’t afford Phil’s salary. He had to take full and part-time jobs to support himself. “Blue Ribbon simply couldn’t support me. Though the company was on track to double sales for a fifth straight year, it still couldn’t justify a salary for its co-founder.” Nike’s initial product development ideas (to its suppliers) were almost always dismissed or never replied to. “Most of Bowerman’s letters [and ideas] were unanswered. When there was an answer, it was cryptic, or curly dismissive. Nike’s first attempt to raise capital failed miserably. “Woodell and I sent out fliers advertising our first offering, then sent back and braced for the clamorous response. Silence. A month passed. Deafening silence. Not one phone. Not one person.” But the team never lost hope. They kept running. “Every runner knows this. You run and run, mile after mile, and you never quite know why. You tell yourself that you are running toward some goal, chasing some rush, but really you run because the alternative, stopping, scares you to death.” As startups, we sometimes give up on our ideas and dreams way too early. We stop. If we were to learn just one thing from Phil Knight and Nike’s inspirational journey, it would be to NEVER STOP! “Let everyone else call your idea crazy, [you] just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop.” Note: The author would like to thank the Noun Project for the image icons.

<sys> [INST] 9 Startup Lessons From Phil Knight, Creator of NIKE [/INST] Nike is one of the best-known brands in the world today. It sells almost 1,500 shoes every minute. That is 780 million shoes every year. Most likely, at some point in your life, you might have worn a Nike yourself. Since its public listing in 1980, Nike has returned its investors over 1200x their original investment. But like every other startup, it started small. It started with a crazy idea. Phil Knights’ crazy idea. Over the years, Phil’s & Nike’s journey has been full of many ups and downs. Phil documents this in his bestselling book, Shoe Dog. In this post, we share with you nine lessons that all startups can learn from his inspirational journey. 1) Don’t Wish for Your Problems To Go Away… Because They Never Will The path to building a great company is full of challenges. To mention that Nike’s path had a few is a massive understatement. Nike was only 2 months old when it ran into its first challenge — a legal battle with another competing distributor. It had only just resolved this legal hurdle, that another problem hit — one of its early employees threatened to quit. To add to all this, Nike faced constant delays from its supplier, Onitsuka in Japan, causing all sorts of problems. Phil, in his book, Shoe Dog writes: “Onitsuka was always late shipping my shoes, which meant less time to sell, which meant less time to make enough money to cover my loan. When I complained, Onitsuka didn’t answer” Later in Nike’s journey, its bank, Bank of California, fired it. The bank refused to do any business with Nike. Without a bank, Nike was almost on the verge of collapse. “… the net-net is that I have no bank. And thus I have no money. And I need to make payroll. And I need to pay my other creditors. And if I can’t meet those obligations, I am out of business.” As the company continued to grow, the problems continued to grow as well. “Each new day brought fifty new problems, fifty tough decisions that needed to be made, right now, and we were always acutely aware that one rash move, one wrong decision could be the end. The margin for error was forever getting narrower, while stakes were forever getting higher.” Ultimately, Phil realized that the problems will never go away. They are a part of the building process. “The problems were never going to stop, I realized, but for the moment we had more momentum than problems.” Startups often face a multitude of problems. For example, a release might get delayed. A competitor might copy your product. An employee might jump ship. An investor might pressure you to get acquired. A major customer might default. A media outlet might criticize you. The list goes on. As founders or early employees, you might wish for these problems to go away. But alas, they never do. You need to accept that problems are a part of the building process. They are here to stay. Do not wish for them to go away. Gather the courage to face them. 2) Hire a Team of Believers Before starting Nike, Phil Knight had two different sales jobs. In one, he sold encyclopedias and in the other, he sold mutual funds. He recounts that he barely made any sales. He didn’t believe in those things and hence sold them reluctantly. But with Nike it was different. He believed in the shoes and that made a difference. “Driving back to Portland I’d puzzle over my sudden success at selling. I’d been unable to sell encyclopedias, and I’d despised it to boot. I’d been slightly better at selling mutual funds, but I’d felt dead inside. So why was selling shoes so different? Because I realized, it wasn’t selling. I believed in running. I believed that if people got out and ran a few miles every day, the world would be a better place, and I believed these shoes were better to run in. People, sensing my belief, wanted some of that belief for themselves.” Nike’s co-founder, Bowerman, a track shoe coach, was a believer too. And so were all other early Nike team members. For them Nike was more than just a job, it was their life’s mission. They were all shoe dogs. “Shoes were their way of connecting with humanity. What better way of connecting, shoe dogs thought, than by refining the hinge that joins each person to the world’s surface?” Bowerman, on his part, spent countless hours researching and crafting the perfect shoe. “Bowerman was a genius coach, a master motivator, a natural leader of young men, and there was one piece of gear he deemed crucial to their development. Shoes. He was obsessed with how human beings are shod. […] He’d spend days tearing them apart, stitching them back up, then hand them back with some minor modification, which made us either run like deer or bleed. Regardless of the results he never stopped.” Unknown to Knight, some of Nike’s other early employees skipped cashing in their paychecks altogether. For them, working at Nike was not about money. It was about something else. It was about their calling. “I’d tell men and women in their mid-twenties not settle for a job or a profession or even a career. Seek a calling. Even if you don’t know what it means, seek it. If you’re falling your calling, the fatigue will be easier to bear, the disappointments will be fuel, the highs will be like nothing you’ve ever felt” In every startups’ journey, there are bound to be rough patches. At times, money will be tight. Other times, the workload will be sky-high. It would be rather tough for someone who does not believe in the mission to stick around for long. That is why, when hiring for startups, hire people who are bought into your mission. Hire a team of believers. 3) Target Your End Customers In Nike’s early days, while pitching his track shoes, sporting good stores would dismiss Phil saying: “Kid, what this world does not need is another track shoe!” He was not discouraged. Instead, he started pitching his track shoes to end customers, i.e. the coaches and the runners. And it worked wonders. “I drove all over the Pacific Northwest, to various track meets. Between races, I’d chat up the coaches, the runners, the fans, and show them my wares. The response was always the same. I couldn’t write orders fast enough. […] Sometimes people wanted my shoes so badly that they’d write me, or phone me, saying they’d heard about new Tigers and just had to have a pair, could I please send them?” Similarly, in Silicon Valley, Stripe grew its product by pitching it to developers, instead of finance chiefs. Collison brothers talk about how Stripe’s primary appeal i.e. easy integration was aimed at developers. “…think many of the developers were just really glad that someone was finally paying attention to them at all.” As startups, you should always cut through the noise and directly target your end customers. They are the ones who are going to benefit the most from your product and potentially influence the sale. Start cultivating relationships with them. Take inspiration from Nike’s early employee, Johnson. “He sent them Christmas Cards. He sent them birthday cards. He sent them notes of congratulation after they completed a big race or marathon. […] Most customers came to depend on Johnson’s letter. Most wrote him back. They’d tell him about their lives, their troubles, their injuries, and he would lavishly console, sympathize and advise.” 4) Your Brand Does Not Have To Be Perfect on Day 1 We know Nike today as one of the best brands in the world. But you know what? Nike and its swoosh logo were not even born until after 11 years of its existence. In its early years, the company was called Blue Ribbon. It was only in 1975 after a particular shoe range called Nike became popular that they renamed the company to Nike Inc. Phil recalls: “More than a brand, Nike was now becoming a household word, to such an extent that we would have to change the company name. Blue Ribbon, we decided, had run its course. We would have to incorporate as Nike, Inc.” Startups sometimes spend loads of energy in getting to the perfect brand on Day 1. Although important, let not branding decisions cripple you down. Instead, make a decision and move on. As with Nike, your brand can always evolve over time. Bonus fact: Phil wanted to originally call the Nike range of shoes “Dimension Six”. The employees said no and one of them came up with the name Nike instead. 5) Take Care of Your Mental and Physical Health Bringing an idea to life can be rewarding and fun. But it can also be hard emotionally. Rejection after rejection can knock you down. Phil recalls: “I wasn’t built for heavy doses of rejection. I’d known this about myself since high school, freshman year, when I got cut from the baseball team. A small setback, in the grand scheme, but it knocked me sideways.” Long working hours can also take their toll. Phil, unable to disconnect, started to get lost in his work. “I often didn’t hear what she [her wife] said, and if I did hear I didn’t remember it minutes later. She was learning that I was absentminded, that I would drive to the grocery store and come empty-handed, without the one item she’d asked me to buy, because all the way there and all the way back I’d been puzzling over the latest bank crisis, or the most recent Onitsuka shipping delay. […] I told her I didn’t know when I’d craved a holiday so much. I needed rest, and sleep, and good food” At one point, he also gave up on his running habit, something that had inspired him to start Nike in the first place. “My weight ballooned. By the middle of 1970, I was around 190, an all-time high. […] Somehow I’d gotten out of the running habit. Blue Ribbon, marriage, fatherhood – there was never time. Also, I’d felt burned out.” Times were tough. But fortunately, Phil introspected. He swore to get back on the track. He started running again. Working at startups can be tough. You always have more to do than there is time. The worst thing that you can do in this situation is to let your work get onto your health. There is nothing in the world, seriously nothing, more important than your health. Every dream, every opportunity, every dollar becomes irrelevant if your health is not with you. Health has to be your top priority. Everything else comes after that. 6) Keep a Tab on Your Company’s Financial Health There were multiple instances when Nike was on the verge of bankruptcy. In its early days, liquidity was very tight. “…1970 was Summer of Liquidity, and I had none. I spent most of every day thinking about liquidity, talking about liquidity, looking to the heavens, and pleading for liquidity.[…] we weren’t broke, we just had no money. Lots of assets, no cash.” Paying its creditors on time was always a big headache. “We struggled to make every payment, to Bank of California, to all of our other creditors, but that Nissho payment at the end of the month was like passing a kidney stone. As we’d begin scraping together our available cash, writing checks with barely enough to cover them, we’d start to sweat. The Nissho payment was sometimes so big that we’d be dead broke for a day or two.” This culminated in constant stress. Stress around bringing in new sales and about the company’s future. “If we didn’t “sell-through”, sell all the shoes in our most recent order, and quickly convert that product into cash, we’d be in big trouble. […] We were leveraged to the hilt, and like most people who live from paycheck to paycheck, we were walking the edge of a precipice.” In the early stages, startups tend to focus more on the company’s product, technology, and distribution. Sometimes, rightly so. But once in a while, you should also direct your attention to the company’s finances. Make sure that your books are in place, you are aware of your cash flow situation, and you have the runway you need to succeed. 7) Managing Work/Life Balance Is Tough During Nike’s early days, Phil wrote about his rigorous work schedule. To start with, things were trending well. “I was putting in six days a week at Price Waterhouse, spending early mornings and late nights and all weekends and vacations at Blue Ribbon [Nike]. No friends, no exercise, no social life – and wholly content. My life was out of balance, sure, but I didn’t care. In fact, I wanted even more imbalance. Or a different kind of imbalance.” But once Phil started a family, things started to go downhill. As demands of both work and family life increased, Phil had to make some tough choices. “I didn’t like leaving Penny alone with Matthew [Phil’s first son], especially around holidays, but it couldn’t be avoided.” With the birth of Phil’s second son, the choices got even tougher. He had to decide between spending time with his work-family and real-family. “The buttfaces [Nike’s inner team] were like family, but every minute I spent with them was at the cost of my other family, my real family. The guilt was palpable. Often I’d walk into my house and Matthew and Travis would meet me at the door. ‘Where have you been’ they’d ask’ ” Unable to spend much time with kids, Phil felt remorse and then regret. “By the end of 1973, I thought, it’s very possible I’ll have two kids and no job. […] Was it even feasible to run a startup company while starting a family? Should I go back to accounting, or teaching, or something more stable?. […] But in late 1977, when I evaluated myself honestly, when I looked at how much time I was spending away from the boys, and how distant I was even when I was home, I gave myself low marks.” Finding a balance between your work and personal life is hard. You are often juggling multiple priorities. And knowingly or unknowingly you are forced to prioritize. Unfortunately, finding balance is not easy. Indra Nooyi, PepsiCo’s ex-CEO, gives an honest insight into her work/life balance challenges here. She recommends developing coping mechanisms as a way to manage the work/life balance challenge. 8) Be Wary of the Bargaining Power of Suppliers Michael E. Porter, in his competitive strategy framework, talks about how suppliers with huge bargaining power can adversely impact a company’s profitability. A live example of this is Nike. In Nike’s early years, it depended solely on 1 big Japanese supplier named Onitsuka for its shoes. As a result, Onitsuka exerted a huge bargaining power over Nike. Though their relationship was mutually beneficial, it was full of conflicts and problems. One time, Onitsuka threatened to cut off Nike completely. “Onitsuka was considering a clean break with Blue Ribbon, and Kitami was in touch with several distributors in the United States.” Another time, they targeted Nike with a hostile takeover. They said: “Onitsuka Co. Ltd will buy a controlling interest in Blue Ribbon, fifty-one percent. It is the best deal for your company. And you. You would be wise to accept” All of this cornered Nike into a state of helplessness. “I still needed him. I had no backup, no plan B, no exit strategy. If I was going to save Blue Ribbon [Nike], I needed to do it slowly, on my own schedule so as not to spook customers and retailers.” Ultimately, Nike diversified its supply and got over its Onitsuka problem. Thinking about it, startups, as well, can sometimes come to rely heavily on a single big supplier or customer. This can be risky. It doesn’t take a lot for things to turn awry and you to find yourself in the middle of a perfect storm. As you grow, make sure you have a plan, in case your supplier or customer were to hold a gun to your head. 9) Never Stop It took many years of hard work and determination for Nike to get to where it currently is. For the majority of its first decade of existence, Nike couldn’t afford Phil’s salary. He had to take full and part-time jobs to support himself. “Blue Ribbon simply couldn’t support me. Though the company was on track to double sales for a fifth straight year, it still couldn’t justify a salary for its co-founder.” Nike’s initial product development ideas (to its suppliers) were almost always dismissed or never replied to. “Most of Bowerman’s letters [and ideas] were unanswered. When there was an answer, it was cryptic, or curly dismissive. Nike’s first attempt to raise capital failed miserably. “Woodell and I sent out fliers advertising our first offering, then sent back and braced for the clamorous response. Silence. A month passed. Deafening silence. Not one phone. Not one person.” But the team never lost hope. They kept running. “Every runner knows this. You run and run, mile after mile, and you never quite know why. You tell yourself that you are running toward some goal, chasing some rush, but really you run because the alternative, stopping, scares you to death.” As startups, we sometimes give up on our ideas and dreams way too early. We stop. If we were to learn just one thing from Phil Knight and Nike’s inspirational journey, it would be to NEVER STOP! “Let everyone else call your idea crazy, [you] just keep going. Don’t stop. Don’t even think about stopping until you get there, and don’t give much thought to where ‘there’ is. Whatever comes, just don’t stop.” Note: The author would like to thank the Noun Project for the image icons. </sys

Wartime SaaS Forecasting: Fighting Uncertainty by Accounting for Unknowns. Ben Horowitz teaches us the traits of peacetime and wartime CEOs. In this article, I zoom in on the art of forecasting the future in this new wartime. Arrested attention With a pandemic underway, software-as-a-service businesses, in normal times the beneficiaries of relatively stable compounding growth, are now facing an existential threat: recurring revenue streams are drying up, at least in part. In a matter of weeks, business forecasting and scenario planning — activities normally reserved for (and often relegated to) board rooms, have seized the attention of employers and employees across the globe. Like the sirens of an early warning system, SaaS dashboards are alerting revenue leaders to sudden changes in the direction and velocity of their key metrics. In direct opposition to this surge of interest in projections is the outgoing tide of confidence in leadership’s ability to forecast with any accuracy. What better ‘Exhibit A’ than the pandemic itself, which they failed to predict? And those early warning systems? Having successfully awakened us to impending danger, they’re now sending mixed messages — “Churn is up!” “LTV is up!” “Revenue is down!” “Trial signups are up!” ‘Are we turning the corner already? Was that the last wave of bad news?’ ‘I’m sorry, but we didn’t buy the night vision add-on … so we hope so … because now … we’re out of ammo.’ Marching forward It’s true: no one’s March forecast included a global pandemic. But for 21st-century leaders, these kinds of cascading disasters can’t be swept under a force majeure clause. At least, not anymore. Employees, stakeholders, and shareholders expect guidance. And they will take it from those they trust the most. 21st-century leaders can’t sweep disasters such as the current pandemic under a force majeure clause anymore. Employees, stakeholders, and shareholders expect guidance. Tweet this quote How can we, as leaders, provide it? Models and projections have taken their own kind of beating. A post-truth marketplace is a hard place for nuanced data science, or as they used to call it, “lies, damn lies, and statistics.” So how can we use the weapon of SaaS forecasting to fight back in a perilous time? By meticulously exposing all of the assumptions behind our forecasts until elementary math is all that remains. This is not the time to be clever or to argue over algorithms. Instead, it’s time to take stock — a real inventory, of what we know, what we can’t know, and what we’re learning. Broadly, there are 3 key assumptions on which our new forecast will be built: How bad will it get: what is our new normal? How long will it last: will we survive until recovery? What does the road back to normal look like: what should we expect? These key assumptions pave a stochastic road into our future, like so; At a minimum, when we share a forecast, we need to proactively share what our forecast assumes to be true about each of these answers. Assumptions inventory Now we can expand each of our assumption pillars with the goal of improving our forward-looking view. Overwhelmed? This overall list (1–2–3) and each set of subpoints are logically ordered using General Eisenhower’s Urgent/Important method, so you can maximize your time-to-value simply by working top to bottom. A good plan violently executed now is better than a perfect plan executed next week Gen. George Patton Still, keep in mind that “a good plan violently executed now is better than a perfect plan executed next week”. Once you’ve unearthed valuable unknowns from a point, try to move on to the next. 1. How bad will it get? Existing customers: This will hinge on the industries you serve, the demographics of our customer base, and, critically, the extent to which your customer’s success drives your own. Womply, a CRM provider for over 450,000 small businesses, has compiled impacts by industry. Pricing models that depend on the growth of a customer’s business to drive upsells — adding seats to a CRM, for example, may find themselves in an expansion revenue drought or even contractions. Similarly, volume-based pricing models need to admit uncertainty regarding the number of monetizable requests or transactions. New customers: Our “Crisis Cohorts” — new signups since the pandemic’s arrival, may behave differently than the rest of our customer base. Do we know the extent to which this month’s trial signups were driven by boredom or curiosity versus urgent demand for our service? Similarly, new subscribers may merit a double portion of attention from customer success, as these purchases are being made in a time when every expense is being scrutinized, and their success with our tool is more critical. 2. How long will it last? Cash for survival: What percentage of our customers are monthly payees versus annual? What assumption are we making in terms of this ratio going forward? Are any of our subscribers prepared to take advantage of a discount on an annual subscription? What will happen when the rate of subscriptions that enter dunning increases? Could we benefit from a SaaS cashflow solution like Pipe? Death to lurking vanity metrics: Uncloud your leading indicators reducing the number of numbers in your dashboards. Promote the metrics that signify business progress and demote the rest. It has never been more important to have a North Star Metric and to simplify your Minority Report heads-up display into an innovation accounting dashboard that reduces wasted dollars and effort. More than 4? Keep whittling. “In limbo” pipeline stage: Are we assuming our leads and opportunities will move through the pipeline at the same rate as before? How much are we expecting our “Closing — Waiting on Signature” stage to balloon? How will this impact our revenue forecast? Are we assuming new prospects will follow the same buying process and timing as before, or are we assuming they follow a different cadence? Do new prospects need refreshed collateral, perhaps focused on cost savings? Team productivity: How productive is each member of our team today versus before? What business processes are most impacted because of this? In some cases, individual ability focus may be higher. In many, if not most, it will be less. Have you surveyed your team, or are you running on assumptions? If the latter, admit it, then find out. 3. Which road back to normal? Ramping back: Are things getting better yet? When will it start? Perhaps it already has? Because timing is so difficult, it might be easier to think in terms of the shape of the ramp back to normal, rather than trying to guess the moment improvements will begin. We entered on the left side of a “U”, but the exit will most certainly look more like a “V” (linear) or “S” (a slow, compounding curve upwards). If your forecast assumes a dramatic rebound, explain why you believe this is the right assumption to make. More ramps: The macro trend above will remove headwinds, but internally, you have your own set of ramps to assume. How long will it take for your team to return to full productivity? Will it take longer for a customer to upgrade? The medium-term outlook: What if the virus returns to some extent in the fall of 2020? How will your Q4 change? This single assumption could have the greatest impact on your destination by year’s end. This article by Ed Yong in the Atlantic paints a broad picture of recurring waves of distancing and isolation prior to a vaccine’s development. The long-term outlook: How will the world change more permanently? Have you mapped the movements of individual components of your business and competitive forces? Is there a big opportunity ahead? Wardley Maps are the best tool for mapping the evolution of terrain over time. A culture of SaaS forecasting Done correctly, your new, wartime SaaS forecast for 2020 and beyond will be completed faster than any prior versions that emphasized numerical precision and accuracy. Against your pride, I encourage you not to hide this MVP. Share it, complete with any holes and question marks, with other leaders within your business to check for the accuracy of what you do know, and then with your team and investors. Ask the latter to help their managers fill in the blanks, and in parallel, take action on what you know you know. In this way, wartime SaaS forecasting becomes a collaborative exercise that spurs foxhole discussions that highlight and remove execution risks. Your team’s need to know the direction you’re headed is an opportunity for bold leadership that humbly admits what it does not know and relentlessly communicates what’s being done to reduce the risk of the unknown. This wartime posture invites employees, shareholders, and partners to build their confidence in your grasp of the terrain and your adaptability — not your clairvoyance.

[INST] Wartime SaaS Forecasting: Fighting Uncertainty by Accounting for Unknowns [/INST]

Ben Horowitz teaches us the traits of peacetime and wartime CEOs. In this article, I zoom in on the art of forecasting the future in this new wartime. Arrested attention With a pandemic underway, software-as-a-service businesses, in normal times the beneficiaries of relatively stable compounding growth, are now facing an existential threat: recurring revenue streams are drying up, at least in part. In a matter of weeks, business forecasting and scenario planning — activities normally reserved for (and often relegated to) board rooms, have seized the attention of employers and employees across the globe. Like the sirens of an early warning system, SaaS dashboards are alerting revenue leaders to sudden changes in the direction and velocity of their key metrics. In direct opposition to this surge of interest in projections is the outgoing tide of confidence in leadership’s ability to forecast with any accuracy. What better ‘Exhibit A’ than the pandemic itself, which they failed to predict? And those early warning systems? Having successfully awakened us to impending danger, they’re now sending mixed messages — “Churn is up!” “LTV is up!” “Revenue is down!” “Trial signups are up!” ‘Are we turning the corner already? Was that the last wave of bad news?’ ‘I’m sorry, but we didn’t buy the night vision add-on … so we hope so … because now … we’re out of ammo.’ Marching forward It’s true: no one’s March forecast included a global pandemic. But for 21st-century leaders, these kinds of cascading disasters can’t be swept under a force majeure clause. At least, not anymore. Employees, stakeholders, and shareholders expect guidance. And they will take it from those they trust the most. 21st-century leaders can’t sweep disasters such as the current pandemic under a force majeure clause anymore. Employees, stakeholders, and shareholders expect guidance. Tweet this quote How can we, as leaders, provide it? Models and projections have taken their own kind of beating. A post-truth marketplace is a hard place for nuanced data science, or as they used to call it, “lies, damn lies, and statistics.” So how can we use the weapon of SaaS forecasting to fight back in a perilous time? By meticulously exposing all of the assumptions behind our forecasts until elementary math is all that remains. This is not the time to be clever or to argue over algorithms. Instead, it’s time to take stock — a real inventory, of what we know, what we can’t know, and what we’re learning. Broadly, there are 3 key assumptions on which our new forecast will be built: How bad will it get: what is our new normal? How long will it last: will we survive until recovery? What does the road back to normal look like: what should we expect? These key assumptions pave a stochastic road into our future, like so; At a minimum, when we share a forecast, we need to proactively share what our forecast assumes to be true about each of these answers. Assumptions inventory Now we can expand each of our assumption pillars with the goal of improving our forward-looking view. Overwhelmed? This overall list (1–2–3) and each set of subpoints are logically ordered using General Eisenhower’s Urgent/Important method, so you can maximize your time-to-value simply by working top to bottom. A good plan violently executed now is better than a perfect plan executed next week Gen. George Patton Still, keep in mind that “a good plan violently executed now is better than a perfect plan executed next week”. Once you’ve unearthed valuable unknowns from a point, try to move on to the next. 1. How bad will it get? Existing customers: This will hinge on the industries you serve, the demographics of our customer base, and, critically, the extent to which your customer’s success drives your own. Womply, a CRM provider for over 450,000 small businesses, has compiled impacts by industry. Pricing models that depend on the growth of a customer’s business to drive upsells — adding seats to a CRM, for example, may find themselves in an expansion revenue drought or even contractions. Similarly, volume-based pricing models need to admit uncertainty regarding the number of monetizable requests or transactions. New customers: Our “Crisis Cohorts” — new signups since the pandemic’s arrival, may behave differently than the rest of our customer base. Do we know the extent to which this month’s trial signups were driven by boredom or curiosity versus urgent demand for our service? Similarly, new subscribers may merit a double portion of attention from customer success, as these purchases are being made in a time when every expense is being scrutinized, and their success with our tool is more critical. 2. How long will it last? Cash for survival: What percentage of our customers are monthly payees versus annual? What assumption are we making in terms of this ratio going forward? Are any of our subscribers prepared to take advantage of a discount on an annual subscription? What will happen when the rate of subscriptions that enter dunning increases? Could we benefit from a SaaS cashflow solution like Pipe? Death to lurking vanity metrics: Uncloud your leading indicators reducing the number of numbers in your dashboards. Promote the metrics that signify business progress and demote the rest. It has never been more important to have a North Star Metric and to simplify your Minority Report heads-up display into an innovation accounting dashboard that reduces wasted dollars and effort. More than 4? Keep whittling. “In limbo” pipeline stage: Are we assuming our leads and opportunities will move through the pipeline at the same rate as before? How much are we expecting our “Closing — Waiting on Signature” stage to balloon? How will this impact our revenue forecast? Are we assuming new prospects will follow the same buying process and timing as before, or are we assuming they follow a different cadence? Do new prospects need refreshed collateral, perhaps focused on cost savings? Team productivity: How productive is each member of our team today versus before? What business processes are most impacted because of this? In some cases, individual ability focus may be higher. In many, if not most, it will be less. Have you surveyed your team, or are you running on assumptions? If the latter, admit it, then find out. 3. Which road back to normal? Ramping back: Are things getting better yet? When will it start? Perhaps it already has? Because timing is so difficult, it might be easier to think in terms of the shape of the ramp back to normal, rather than trying to guess the moment improvements will begin. We entered on the left side of a “U”, but the exit will most certainly look more like a “V” (linear) or “S” (a slow, compounding curve upwards). If your forecast assumes a dramatic rebound, explain why you believe this is the right assumption to make. More ramps: The macro trend above will remove headwinds, but internally, you have your own set of ramps to assume. How long will it take for your team to return to full productivity? Will it take longer for a customer to upgrade? The medium-term outlook: What if the virus returns to some extent in the fall of 2020? How will your Q4 change? This single assumption could have the greatest impact on your destination by year’s end. This article by Ed Yong in the Atlantic paints a broad picture of recurring waves of distancing and isolation prior to a vaccine’s development. The long-term outlook: How will the world change more permanently? Have you mapped the movements of individual components of your business and competitive forces? Is there a big opportunity ahead? Wardley Maps are the best tool for mapping the evolution of terrain over time. A culture of SaaS forecasting Done correctly, your new, wartime SaaS forecast for 2020 and beyond will be completed faster than any prior versions that emphasized numerical precision and accuracy. Against your pride, I encourage you not to hide this MVP. Share it, complete with any holes and question marks, with other leaders within your business to check for the accuracy of what you do know, and then with your team and investors. Ask the latter to help their managers fill in the blanks, and in parallel, take action on what you know you know. In this way, wartime SaaS forecasting becomes a collaborative exercise that spurs foxhole discussions that highlight and remove execution risks. Your team’s need to know the direction you’re headed is an opportunity for bold leadership that humbly admits what it does not know and relentlessly communicates what’s being done to reduce the risk of the unknown. This wartime posture invites employees, shareholders, and partners to build their confidence in your grasp of the terrain and your adaptability — not your clairvoyance.

<sys> [INST] Wartime SaaS Forecasting: Fighting Uncertainty by Accounting for Unknowns [/INST] Ben Horowitz teaches us the traits of peacetime and wartime CEOs. In this article, I zoom in on the art of forecasting the future in this new wartime. Arrested attention With a pandemic underway, software-as-a-service businesses, in normal times the beneficiaries of relatively stable compounding growth, are now facing an existential threat: recurring revenue streams are drying up, at least in part. In a matter of weeks, business forecasting and scenario planning — activities normally reserved for (and often relegated to) board rooms, have seized the attention of employers and employees across the globe. Like the sirens of an early warning system, SaaS dashboards are alerting revenue leaders to sudden changes in the direction and velocity of their key metrics. In direct opposition to this surge of interest in projections is the outgoing tide of confidence in leadership’s ability to forecast with any accuracy. What better ‘Exhibit A’ than the pandemic itself, which they failed to predict? And those early warning systems? Having successfully awakened us to impending danger, they’re now sending mixed messages — “Churn is up!” “LTV is up!” “Revenue is down!” “Trial signups are up!” ‘Are we turning the corner already? Was that the last wave of bad news?’ ‘I’m sorry, but we didn’t buy the night vision add-on … so we hope so … because now … we’re out of ammo.’ Marching forward It’s true: no one’s March forecast included a global pandemic. But for 21st-century leaders, these kinds of cascading disasters can’t be swept under a force majeure clause. At least, not anymore. Employees, stakeholders, and shareholders expect guidance. And they will take it from those they trust the most. 21st-century leaders can’t sweep disasters such as the current pandemic under a force majeure clause anymore. Employees, stakeholders, and shareholders expect guidance. Tweet this quote How can we, as leaders, provide it? Models and projections have taken their own kind of beating. A post-truth marketplace is a hard place for nuanced data science, or as they used to call it, “lies, damn lies, and statistics.” So how can we use the weapon of SaaS forecasting to fight back in a perilous time? By meticulously exposing all of the assumptions behind our forecasts until elementary math is all that remains. This is not the time to be clever or to argue over algorithms. Instead, it’s time to take stock — a real inventory, of what we know, what we can’t know, and what we’re learning. Broadly, there are 3 key assumptions on which our new forecast will be built: How bad will it get: what is our new normal? How long will it last: will we survive until recovery? What does the road back to normal look like: what should we expect? These key assumptions pave a stochastic road into our future, like so; At a minimum, when we share a forecast, we need to proactively share what our forecast assumes to be true about each of these answers. Assumptions inventory Now we can expand each of our assumption pillars with the goal of improving our forward-looking view. Overwhelmed? This overall list (1–2–3) and each set of subpoints are logically ordered using General Eisenhower’s Urgent/Important method, so you can maximize your time-to-value simply by working top to bottom. A good plan violently executed now is better than a perfect plan executed next week Gen. George Patton Still, keep in mind that “a good plan violently executed now is better than a perfect plan executed next week”. Once you’ve unearthed valuable unknowns from a point, try to move on to the next. 1. How bad will it get? Existing customers: This will hinge on the industries you serve, the demographics of our customer base, and, critically, the extent to which your customer’s success drives your own. Womply, a CRM provider for over 450,000 small businesses, has compiled impacts by industry. Pricing models that depend on the growth of a customer’s business to drive upsells — adding seats to a CRM, for example, may find themselves in an expansion revenue drought or even contractions. Similarly, volume-based pricing models need to admit uncertainty regarding the number of monetizable requests or transactions. New customers: Our “Crisis Cohorts” — new signups since the pandemic’s arrival, may behave differently than the rest of our customer base. Do we know the extent to which this month’s trial signups were driven by boredom or curiosity versus urgent demand for our service? Similarly, new subscribers may merit a double portion of attention from customer success, as these purchases are being made in a time when every expense is being scrutinized, and their success with our tool is more critical. 2. How long will it last? Cash for survival: What percentage of our customers are monthly payees versus annual? What assumption are we making in terms of this ratio going forward? Are any of our subscribers prepared to take advantage of a discount on an annual subscription? What will happen when the rate of subscriptions that enter dunning increases? Could we benefit from a SaaS cashflow solution like Pipe? Death to lurking vanity metrics: Uncloud your leading indicators reducing the number of numbers in your dashboards. Promote the metrics that signify business progress and demote the rest. It has never been more important to have a North Star Metric and to simplify your Minority Report heads-up display into an innovation accounting dashboard that reduces wasted dollars and effort. More than 4? Keep whittling. “In limbo” pipeline stage: Are we assuming our leads and opportunities will move through the pipeline at the same rate as before? How much are we expecting our “Closing — Waiting on Signature” stage to balloon? How will this impact our revenue forecast? Are we assuming new prospects will follow the same buying process and timing as before, or are we assuming they follow a different cadence? Do new prospects need refreshed collateral, perhaps focused on cost savings? Team productivity: How productive is each member of our team today versus before? What business processes are most impacted because of this? In some cases, individual ability focus may be higher. In many, if not most, it will be less. Have you surveyed your team, or are you running on assumptions? If the latter, admit it, then find out. 3. Which road back to normal? Ramping back: Are things getting better yet? When will it start? Perhaps it already has? Because timing is so difficult, it might be easier to think in terms of the shape of the ramp back to normal, rather than trying to guess the moment improvements will begin. We entered on the left side of a “U”, but the exit will most certainly look more like a “V” (linear) or “S” (a slow, compounding curve upwards). If your forecast assumes a dramatic rebound, explain why you believe this is the right assumption to make. More ramps: The macro trend above will remove headwinds, but internally, you have your own set of ramps to assume. How long will it take for your team to return to full productivity? Will it take longer for a customer to upgrade? The medium-term outlook: What if the virus returns to some extent in the fall of 2020? How will your Q4 change? This single assumption could have the greatest impact on your destination by year’s end. This article by Ed Yong in the Atlantic paints a broad picture of recurring waves of distancing and isolation prior to a vaccine’s development. The long-term outlook: How will the world change more permanently? Have you mapped the movements of individual components of your business and competitive forces? Is there a big opportunity ahead? Wardley Maps are the best tool for mapping the evolution of terrain over time. A culture of SaaS forecasting Done correctly, your new, wartime SaaS forecast for 2020 and beyond will be completed faster than any prior versions that emphasized numerical precision and accuracy. Against your pride, I encourage you not to hide this MVP. Share it, complete with any holes and question marks, with other leaders within your business to check for the accuracy of what you do know, and then with your team and investors. Ask the latter to help their managers fill in the blanks, and in parallel, take action on what you know you know. In this way, wartime SaaS forecasting becomes a collaborative exercise that spurs foxhole discussions that highlight and remove execution risks. Your team’s need to know the direction you’re headed is an opportunity for bold leadership that humbly admits what it does not know and relentlessly communicates what’s being done to reduce the risk of the unknown. This wartime posture invites employees, shareholders, and partners to build their confidence in your grasp of the terrain and your adaptability — not your clairvoyance. </sys

Flipping the Agency Model on Its Head with John Thornton from Black Propeller. Most marketing agencies base their fees on a percentage of what their clients intend to spend on advertising. John Thornton, the founder and CEO of Black Propeller, realized that the traditional agency model could be simplified for his team and his customers. That’s when he started looking at the typical agency retainer from a different perspective – it wasn’t just a fee for digital marketing services, it was a subscription to the Black Propeller product. Black Propeller is a digital marketing agency specializing in paid search and paid social. John and his team are laser-focused on providing top-notch services in the highly competitive market of PPC advertising. When John started running his business like a SaaS company, he started using Recurly to manage his subscriptions. But he was also sitting on numerous spreadsheets of historical data, and that is how he found ChartMogul. With ChartMogul he was able to combine the history of his business with the future he’d have with Recurly in order to provide clear trend lines of where he’s been and where he’s headed. “It was about getting it all the data in one place. It was overwhelming at first to have all these metrics. Now we have such a refined view of the business.” John Thornton About the episode John and I sit down to talk about the success he’s seen running his agency like a subscription business, and: Agency versus subscription model HIstorical data and billing practices LTV, ARPA, and other SaaS metrics Tracking lead source and its contribution to revenue Churn and customer retention Tracking custom attributes Pricing Enjoy the latest episode of SaaS Open Mic!

[INST] Flipping the Agency Model on Its Head with John Thornton from Black Propeller [/INST]

Most marketing agencies base their fees on a percentage of what their clients intend to spend on advertising. John Thornton, the founder and CEO of Black Propeller, realized that the traditional agency model could be simplified for his team and his customers. That’s when he started looking at the typical agency retainer from a different perspective – it wasn’t just a fee for digital marketing services, it was a subscription to the Black Propeller product. Black Propeller is a digital marketing agency specializing in paid search and paid social. John and his team are laser-focused on providing top-notch services in the highly competitive market of PPC advertising. When John started running his business like a SaaS company, he started using Recurly to manage his subscriptions. But he was also sitting on numerous spreadsheets of historical data, and that is how he found ChartMogul. With ChartMogul he was able to combine the history of his business with the future he’d have with Recurly in order to provide clear trend lines of where he’s been and where he’s headed. “It was about getting it all the data in one place. It was overwhelming at first to have all these metrics. Now we have such a refined view of the business.” John Thornton About the episode John and I sit down to talk about the success he’s seen running his agency like a subscription business, and: Agency versus subscription model HIstorical data and billing practices LTV, ARPA, and other SaaS metrics Tracking lead source and its contribution to revenue Churn and customer retention Tracking custom attributes Pricing Enjoy the latest episode of SaaS Open Mic!

<sys> [INST] Flipping the Agency Model on Its Head with John Thornton from Black Propeller [/INST] Most marketing agencies base their fees on a percentage of what their clients intend to spend on advertising. John Thornton, the founder and CEO of Black Propeller, realized that the traditional agency model could be simplified for his team and his customers. That’s when he started looking at the typical agency retainer from a different perspective – it wasn’t just a fee for digital marketing services, it was a subscription to the Black Propeller product. Black Propeller is a digital marketing agency specializing in paid search and paid social. John and his team are laser-focused on providing top-notch services in the highly competitive market of PPC advertising. When John started running his business like a SaaS company, he started using Recurly to manage his subscriptions. But he was also sitting on numerous spreadsheets of historical data, and that is how he found ChartMogul. With ChartMogul he was able to combine the history of his business with the future he’d have with Recurly in order to provide clear trend lines of where he’s been and where he’s headed. “It was about getting it all the data in one place. It was overwhelming at first to have all these metrics. Now we have such a refined view of the business.” John Thornton About the episode John and I sit down to talk about the success he’s seen running his agency like a subscription business, and: Agency versus subscription model HIstorical data and billing practices LTV, ARPA, and other SaaS metrics Tracking lead source and its contribution to revenue Churn and customer retention Tracking custom attributes Pricing Enjoy the latest episode of SaaS Open Mic! </sys

Announcing the ChartMogul GoCardless integration. This new integration imports your GoCardless data into ChartMogul, and keeps it in sync. It gives GoCardless customers access to all of ChartMogul’s advanced reporting and analytics, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more In addition to GoCardless, you can also connect many other tools to your ChartMogul account, such as Zapier. These enrich your data with countless other attributes, so you can perform advanced segmentation on your GoCardless subscription data. For example, using ChartMogul you could filter your MRR by sales rep, LTV by marketing channel, and churn rate by NPS score. Learn more about segmentation. Get started! If you already have a ChartMogul account, here’s how to connect your GoCardless account to ChartMogul. If you don’t yet have a ChartMogul account, you can sign up for a free trial first before connecting your GoCardless account. If you have any feedback when using this new integration, please let us know!

[INST] Announcing the ChartMogul GoCardless integration [/INST]

This new integration imports your GoCardless data into ChartMogul, and keeps it in sync. It gives GoCardless customers access to all of ChartMogul’s advanced reporting and analytics, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more In addition to GoCardless, you can also connect many other tools to your ChartMogul account, such as Zapier. These enrich your data with countless other attributes, so you can perform advanced segmentation on your GoCardless subscription data. For example, using ChartMogul you could filter your MRR by sales rep, LTV by marketing channel, and churn rate by NPS score. Learn more about segmentation. Get started! If you already have a ChartMogul account, here’s how to connect your GoCardless account to ChartMogul. If you don’t yet have a ChartMogul account, you can sign up for a free trial first before connecting your GoCardless account. If you have any feedback when using this new integration, please let us know!

<sys> [INST] Announcing the ChartMogul GoCardless integration [/INST] This new integration imports your GoCardless data into ChartMogul, and keeps it in sync. It gives GoCardless customers access to all of ChartMogul’s advanced reporting and analytics, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more In addition to GoCardless, you can also connect many other tools to your ChartMogul account, such as Zapier. These enrich your data with countless other attributes, so you can perform advanced segmentation on your GoCardless subscription data. For example, using ChartMogul you could filter your MRR by sales rep, LTV by marketing channel, and churn rate by NPS score. Learn more about segmentation. Get started! If you already have a ChartMogul account, here’s how to connect your GoCardless account to ChartMogul. If you don’t yet have a ChartMogul account, you can sign up for a free trial first before connecting your GoCardless account. If you have any feedback when using this new integration, please let us know! </sys

Give Churn the Old Heave-Ho With These Data-Driven Hacks. “Heave” “Boil” “Swirl” “Toss” “Seethe” These are not the words you want to use to describe your clients’ reactions to your SaaS product – and they are all synonyms for “Churn.” Of all of these unsettling terms, I think churn is the worst. Churn is what happens when you’ve built up your hopes and dashed them on the rocks of poor management and failure to meet expectations. And, reducing (dare I say, eliminating?) churn should be the goal of every growing subscription-based company. Why is Churn so Important? The official definition of churn rate is “a measure of the number of individuals moving out of a collective group over a specific period of time.” The number is vital for estimating customer lifetime values and determining the ROI of marketing efforts, the quality of customer service programs, and the importance of customer success initiatives. For SaaS companies in particular, it’s the key to sustainability, growth and profit. Think of it as the beating pulse of your business that determines whether you live, die slowly, or meet your demise like an 17th century duelist who forgot his flintlock at home. Am I being melodramatic? You tell me: What is the worst that could happen if customers leave faster than you can bring them in? Think about it. Okay. Now that you’re ready to take churn seriously, let’s dive in, because you have the power to beat churn. First, however, you have to understand it. Let the Numbers Be Your Guide When calculating churn, the most successful companies factor in revenue, user count, and duration of customer relationships, within the context of company size and industry type. For example, let’s start with two simple churn equations: Churn Rate = # of customers lost in period / # of total customers at start of period This gives you a good indicator of customer satisfaction, but doesn’t tell you the impact of these losses on your business. Churn Rate = $ of recurring revenue lost in period / $ of total revenue at start of period This tells you whether you’re losing your best customers or your worst customers, and how much that impacts your business. It’s helpful to know the churn averages of similar-sized businesses, and industry averages. And, you’ll also want to look at the bigger picture of up-sells, cross-sells, upgrades and downgrades – and down-sells. If you find that your churn rates are high, customers are clearly not getting what they need. A high churn rate can be like hauling water in a leaky sieve; and when it’s dollars that are dripping out, your business is hurting. By taking proactive steps to help your customers be successful with your product or service, you can plug each of those little holes until you’ve got a bowlful of money that runneth over. However, to get an even better picture of how churn affects your business, you should also calculate your Cost to Acquire a Customer (CAC) number and your customer Lifetime Value (LTV). CAC = cost of the product + research + development + marketing at every stage of the sales funnel LTV = Revenue earned from customer within Churn period + up-sells, cross-sells and client referrals Pro tip: Before calculating CAC and LTV, segment your customer lists. That way you can identify which types of customers tend to deliver the highest LTVs, and which deliver the lowest – iterating marketing efforts accordingly. If you find that the CAC number is higher than your customer lifetime value (LTV), you have a problem – likely, one or more of these: Your marketing efforts aren’t reaching your target demographic. That target demographic shifted since the last time you checked. Your buyer persona is inaccurate. Your keywords are off. Your messaging is off (on your website, offer pages, CTAs and ads). If in calculating your churn, CAC and LTV, you find that your customers are leaving faster than lemmings in a cliff-diving competition, that tells you something: Sometime after purchase, they’re not getting what they hoped for from your product. “What is the worst that could happen if customers leave faster than you can bring them in?” http://t.co/F9GYxH2FcQ pic.twitter.com/9e8uoqcEJC — ChartMogul (@ChartMogul) July 7, 2015 It’s Nancy Drew Time Once you’ve done the math to identify your problem, it’s time to find where the expectation/delivery disconnect is happening. Start by tracking customer behavior and looking for warning signs customers display before they leave. Whenever a customer disengages with a product, there are signs – and you can track them. You might want to offer an exit survey to ask customers why they’re leaving. Your investigative work has only just begun – now it’s time to dig for clues as to why customers came to you in the first place, what they expected, and what they found. Again, surveys come in handy. Try implementing an entrance survey asking what new customers hope to find and expect to get. Most importantly, ask questions that get them to reveal what success means to them. Use the information from these exit and entrance surveys to drive your customer success initiatives and increase engagement. 3 Churn-Chopping Hacks to Try Right Now Now that you’re measuring Churn, CAC and LTV and finding out where you’re going wrong, you can take the appropriate steps to reduce churn by giving your customers what they want: success with your product. We’re proponents of Customer Success initiatives for SaaS businesses. It’s the only way to build sustainable growth. Find out what your customers want and help them to successfully use your product – that will solve 90% of your problems. For the other 10%, try these simple hacks. 1. Don’t let credit cards expire. This is the easiest money you’ll ever make, and the trick is to find a billing system that provides a credit card updater service which automatically informs users when their cards are about to expire. 2. Embrace high quality content marketing that has a customer-success focus. With strong content that provides real value and fun, friendly and responsive social media staff, you can become a positive force in your clients’ lives on a daily basis. Answer questions. Offer tips. Make jokes. Tell stories. Make every interaction an enjoyable, valuable experience that helps customers achieve their goals. 3. Increase your usefulness. Sometimes customers leave because they outgrow what you can do for them. The only solution to that is to keep growing. Consider developing partnerships with complimentary services to expand your reach and make it more convenient for people to stay than to leave. Maybe invite companies to build add-ons and integrations for your product. Ultimately, when customers can unsubscribe any time, you have to keep providing compelling reasons to stay. Your customers want to love you, and they only leave if your product, service or customer care isn’t giving them what they need. By taking a proactive approach that is driven by data, you can identify what could go wrong before it does go wrong. What Happens Next? What’s on the other side of the churn rainbow? When you’ve hacked the churn problem once and for all by cracking the code of customer success, you’ll find a magical land of exponentially growing revenue. Successful customers become brand advocates who cheerfully advertise and refer your business for free, while providing opportunities for up-sells and cross-sells. Lifetime value skyrockets. Your CAC shrinks. And you can focus on bringing even more value into the lives of your customer base. Can cracking churn make the world a better place? We think it can. Want to read more about SaaS Churn? Download The Ultimate Churn Rate Cheat Sheet PDF from ChartMogul.

[INST] Give Churn the Old Heave-Ho With These Data-Driven Hacks [/INST]

“Heave” “Boil” “Swirl” “Toss” “Seethe” These are not the words you want to use to describe your clients’ reactions to your SaaS product – and they are all synonyms for “Churn.” Of all of these unsettling terms, I think churn is the worst. Churn is what happens when you’ve built up your hopes and dashed them on the rocks of poor management and failure to meet expectations. And, reducing (dare I say, eliminating?) churn should be the goal of every growing subscription-based company. Why is Churn so Important? The official definition of churn rate is “a measure of the number of individuals moving out of a collective group over a specific period of time.” The number is vital for estimating customer lifetime values and determining the ROI of marketing efforts, the quality of customer service programs, and the importance of customer success initiatives. For SaaS companies in particular, it’s the key to sustainability, growth and profit. Think of it as the beating pulse of your business that determines whether you live, die slowly, or meet your demise like an 17th century duelist who forgot his flintlock at home. Am I being melodramatic? You tell me: What is the worst that could happen if customers leave faster than you can bring them in? Think about it. Okay. Now that you’re ready to take churn seriously, let’s dive in, because you have the power to beat churn. First, however, you have to understand it. Let the Numbers Be Your Guide When calculating churn, the most successful companies factor in revenue, user count, and duration of customer relationships, within the context of company size and industry type. For example, let’s start with two simple churn equations: Churn Rate = # of customers lost in period / # of total customers at start of period This gives you a good indicator of customer satisfaction, but doesn’t tell you the impact of these losses on your business. Churn Rate = $ of recurring revenue lost in period / $ of total revenue at start of period This tells you whether you’re losing your best customers or your worst customers, and how much that impacts your business. It’s helpful to know the churn averages of similar-sized businesses, and industry averages. And, you’ll also want to look at the bigger picture of up-sells, cross-sells, upgrades and downgrades – and down-sells. If you find that your churn rates are high, customers are clearly not getting what they need. A high churn rate can be like hauling water in a leaky sieve; and when it’s dollars that are dripping out, your business is hurting. By taking proactive steps to help your customers be successful with your product or service, you can plug each of those little holes until you’ve got a bowlful of money that runneth over. However, to get an even better picture of how churn affects your business, you should also calculate your Cost to Acquire a Customer (CAC) number and your customer Lifetime Value (LTV). CAC = cost of the product + research + development + marketing at every stage of the sales funnel LTV = Revenue earned from customer within Churn period + up-sells, cross-sells and client referrals Pro tip: Before calculating CAC and LTV, segment your customer lists. That way you can identify which types of customers tend to deliver the highest LTVs, and which deliver the lowest – iterating marketing efforts accordingly. If you find that the CAC number is higher than your customer lifetime value (LTV), you have a problem – likely, one or more of these: Your marketing efforts aren’t reaching your target demographic. That target demographic shifted since the last time you checked. Your buyer persona is inaccurate. Your keywords are off. Your messaging is off (on your website, offer pages, CTAs and ads). If in calculating your churn, CAC and LTV, you find that your customers are leaving faster than lemmings in a cliff-diving competition, that tells you something: Sometime after purchase, they’re not getting what they hoped for from your product. “What is the worst that could happen if customers leave faster than you can bring them in?” http://t.co/F9GYxH2FcQ pic.twitter.com/9e8uoqcEJC — ChartMogul (@ChartMogul) July 7, 2015 It’s Nancy Drew Time Once you’ve done the math to identify your problem, it’s time to find where the expectation/delivery disconnect is happening. Start by tracking customer behavior and looking for warning signs customers display before they leave. Whenever a customer disengages with a product, there are signs – and you can track them. You might want to offer an exit survey to ask customers why they’re leaving. Your investigative work has only just begun – now it’s time to dig for clues as to why customers came to you in the first place, what they expected, and what they found. Again, surveys come in handy. Try implementing an entrance survey asking what new customers hope to find and expect to get. Most importantly, ask questions that get them to reveal what success means to them. Use the information from these exit and entrance surveys to drive your customer success initiatives and increase engagement. 3 Churn-Chopping Hacks to Try Right Now Now that you’re measuring Churn, CAC and LTV and finding out where you’re going wrong, you can take the appropriate steps to reduce churn by giving your customers what they want: success with your product. We’re proponents of Customer Success initiatives for SaaS businesses. It’s the only way to build sustainable growth. Find out what your customers want and help them to successfully use your product – that will solve 90% of your problems. For the other 10%, try these simple hacks. 1. Don’t let credit cards expire. This is the easiest money you’ll ever make, and the trick is to find a billing system that provides a credit card updater service which automatically informs users when their cards are about to expire. 2. Embrace high quality content marketing that has a customer-success focus. With strong content that provides real value and fun, friendly and responsive social media staff, you can become a positive force in your clients’ lives on a daily basis. Answer questions. Offer tips. Make jokes. Tell stories. Make every interaction an enjoyable, valuable experience that helps customers achieve their goals. 3. Increase your usefulness. Sometimes customers leave because they outgrow what you can do for them. The only solution to that is to keep growing. Consider developing partnerships with complimentary services to expand your reach and make it more convenient for people to stay than to leave. Maybe invite companies to build add-ons and integrations for your product. Ultimately, when customers can unsubscribe any time, you have to keep providing compelling reasons to stay. Your customers want to love you, and they only leave if your product, service or customer care isn’t giving them what they need. By taking a proactive approach that is driven by data, you can identify what could go wrong before it does go wrong. What Happens Next? What’s on the other side of the churn rainbow? When you’ve hacked the churn problem once and for all by cracking the code of customer success, you’ll find a magical land of exponentially growing revenue. Successful customers become brand advocates who cheerfully advertise and refer your business for free, while providing opportunities for up-sells and cross-sells. Lifetime value skyrockets. Your CAC shrinks. And you can focus on bringing even more value into the lives of your customer base. Can cracking churn make the world a better place? We think it can. Want to read more about SaaS Churn? Download The Ultimate Churn Rate Cheat Sheet PDF from ChartMogul.

<sys> [INST] Give Churn the Old Heave-Ho With These Data-Driven Hacks [/INST] “Heave” “Boil” “Swirl” “Toss” “Seethe” These are not the words you want to use to describe your clients’ reactions to your SaaS product – and they are all synonyms for “Churn.” Of all of these unsettling terms, I think churn is the worst. Churn is what happens when you’ve built up your hopes and dashed them on the rocks of poor management and failure to meet expectations. And, reducing (dare I say, eliminating?) churn should be the goal of every growing subscription-based company. Why is Churn so Important? The official definition of churn rate is “a measure of the number of individuals moving out of a collective group over a specific period of time.” The number is vital for estimating customer lifetime values and determining the ROI of marketing efforts, the quality of customer service programs, and the importance of customer success initiatives. For SaaS companies in particular, it’s the key to sustainability, growth and profit. Think of it as the beating pulse of your business that determines whether you live, die slowly, or meet your demise like an 17th century duelist who forgot his flintlock at home. Am I being melodramatic? You tell me: What is the worst that could happen if customers leave faster than you can bring them in? Think about it. Okay. Now that you’re ready to take churn seriously, let’s dive in, because you have the power to beat churn. First, however, you have to understand it. Let the Numbers Be Your Guide When calculating churn, the most successful companies factor in revenue, user count, and duration of customer relationships, within the context of company size and industry type. For example, let’s start with two simple churn equations: Churn Rate = # of customers lost in period / # of total customers at start of period This gives you a good indicator of customer satisfaction, but doesn’t tell you the impact of these losses on your business. Churn Rate = $ of recurring revenue lost in period / $ of total revenue at start of period This tells you whether you’re losing your best customers or your worst customers, and how much that impacts your business. It’s helpful to know the churn averages of similar-sized businesses, and industry averages. And, you’ll also want to look at the bigger picture of up-sells, cross-sells, upgrades and downgrades – and down-sells. If you find that your churn rates are high, customers are clearly not getting what they need. A high churn rate can be like hauling water in a leaky sieve; and when it’s dollars that are dripping out, your business is hurting. By taking proactive steps to help your customers be successful with your product or service, you can plug each of those little holes until you’ve got a bowlful of money that runneth over. However, to get an even better picture of how churn affects your business, you should also calculate your Cost to Acquire a Customer (CAC) number and your customer Lifetime Value (LTV). CAC = cost of the product + research + development + marketing at every stage of the sales funnel LTV = Revenue earned from customer within Churn period + up-sells, cross-sells and client referrals Pro tip: Before calculating CAC and LTV, segment your customer lists. That way you can identify which types of customers tend to deliver the highest LTVs, and which deliver the lowest – iterating marketing efforts accordingly. If you find that the CAC number is higher than your customer lifetime value (LTV), you have a problem – likely, one or more of these: Your marketing efforts aren’t reaching your target demographic. That target demographic shifted since the last time you checked. Your buyer persona is inaccurate. Your keywords are off. Your messaging is off (on your website, offer pages, CTAs and ads). If in calculating your churn, CAC and LTV, you find that your customers are leaving faster than lemmings in a cliff-diving competition, that tells you something: Sometime after purchase, they’re not getting what they hoped for from your product. “What is the worst that could happen if customers leave faster than you can bring them in?” http://t.co/F9GYxH2FcQ pic.twitter.com/9e8uoqcEJC — ChartMogul (@ChartMogul) July 7, 2015 It’s Nancy Drew Time Once you’ve done the math to identify your problem, it’s time to find where the expectation/delivery disconnect is happening. Start by tracking customer behavior and looking for warning signs customers display before they leave. Whenever a customer disengages with a product, there are signs – and you can track them. You might want to offer an exit survey to ask customers why they’re leaving. Your investigative work has only just begun – now it’s time to dig for clues as to why customers came to you in the first place, what they expected, and what they found. Again, surveys come in handy. Try implementing an entrance survey asking what new customers hope to find and expect to get. Most importantly, ask questions that get them to reveal what success means to them. Use the information from these exit and entrance surveys to drive your customer success initiatives and increase engagement. 3 Churn-Chopping Hacks to Try Right Now Now that you’re measuring Churn, CAC and LTV and finding out where you’re going wrong, you can take the appropriate steps to reduce churn by giving your customers what they want: success with your product. We’re proponents of Customer Success initiatives for SaaS businesses. It’s the only way to build sustainable growth. Find out what your customers want and help them to successfully use your product – that will solve 90% of your problems. For the other 10%, try these simple hacks. 1. Don’t let credit cards expire. This is the easiest money you’ll ever make, and the trick is to find a billing system that provides a credit card updater service which automatically informs users when their cards are about to expire. 2. Embrace high quality content marketing that has a customer-success focus. With strong content that provides real value and fun, friendly and responsive social media staff, you can become a positive force in your clients’ lives on a daily basis. Answer questions. Offer tips. Make jokes. Tell stories. Make every interaction an enjoyable, valuable experience that helps customers achieve their goals. 3. Increase your usefulness. Sometimes customers leave because they outgrow what you can do for them. The only solution to that is to keep growing. Consider developing partnerships with complimentary services to expand your reach and make it more convenient for people to stay than to leave. Maybe invite companies to build add-ons and integrations for your product. Ultimately, when customers can unsubscribe any time, you have to keep providing compelling reasons to stay. Your customers want to love you, and they only leave if your product, service or customer care isn’t giving them what they need. By taking a proactive approach that is driven by data, you can identify what could go wrong before it does go wrong. What Happens Next? What’s on the other side of the churn rainbow? When you’ve hacked the churn problem once and for all by cracking the code of customer success, you’ll find a magical land of exponentially growing revenue. Successful customers become brand advocates who cheerfully advertise and refer your business for free, while providing opportunities for up-sells and cross-sells. Lifetime value skyrockets. Your CAC shrinks. And you can focus on bringing even more value into the lives of your customer base. Can cracking churn make the world a better place? We think it can. Want to read more about SaaS Churn? Download The Ultimate Churn Rate Cheat Sheet PDF from ChartMogul. </sys

Announcing Mogul I/O. The consumerization of enterprise software is a trend that we at ChartMogul are proud to be part of. In fact, we probably wouldn’t have started ChartMogul if it wasn’t for this trend — the old school world of enterprise software just doesn’t get us excited (sorry, SAP). But there is one thing that can get a bit lost in this shift toward self-service, cloud-delivered software, and that is the face-to-face human interaction. Meeting customers in person used to be a necessity to close a deal. That’s no longer the case. But meeting people in real life is critical for nurturing relationships. This is why we believe that events are more important than ever, and why we’ve been sponsors and attendees of SaaStr Annual and SaaStock conferences since their inception. These conferences are simply great places for the SaaS community (and by proxy, a large number of our customers) to come together under one roof. So we’ve always been passionate about community and about events, and over the past year we’ve been thinking about what we could bring to the table if we were to put something on ourselves. I’m very excited to announce the launch of Mogul I/O. Mogul I/O is a series of events focussed entirely on helping subscription businesses drive predictable business growth. The program will feature more general topics, as well as parts that are hyper-focussed for users of ChartMogul; e.g., we’ll be sharing our product roadmap. Where and when? We’ve confirmed our first two events, which will take place during April in San Francisco and New York. We’ll then follow with events in London and Berlin (our home base) later in the year. San Francisco – April 12 at 6 PM PT New York – April 18 at 6pm ET London – May 29th at 6pm GMT+1 Berlin – June 6th at 6pm CEST Many thanks to our event partners Autopilot and Honey, who are helping us host the SF and NY events. The program will be a mix of keynotes, panels and networking over food and drinks. We have a great lineup of speakers, including folks from Autopilot, Typeform, Mobilize, Algolia, Insight Venture Partners, Movable Ink, Vestwell and Honey. I’ll also be joining the lineup representing ChartMogul. This is just the beginning! The plan is for Mogul I/O to become a regular series of events. How exactly it will evolve we’re not quite sure yet, but we’re super excited to be hosting these first few. We hope you can make it to one of them, and we look forward to meeting you in person very soon!

[INST] Announcing Mogul I/O [/INST]

The consumerization of enterprise software is a trend that we at ChartMogul are proud to be part of. In fact, we probably wouldn’t have started ChartMogul if it wasn’t for this trend — the old school world of enterprise software just doesn’t get us excited (sorry, SAP). But there is one thing that can get a bit lost in this shift toward self-service, cloud-delivered software, and that is the face-to-face human interaction. Meeting customers in person used to be a necessity to close a deal. That’s no longer the case. But meeting people in real life is critical for nurturing relationships. This is why we believe that events are more important than ever, and why we’ve been sponsors and attendees of SaaStr Annual and SaaStock conferences since their inception. These conferences are simply great places for the SaaS community (and by proxy, a large number of our customers) to come together under one roof. So we’ve always been passionate about community and about events, and over the past year we’ve been thinking about what we could bring to the table if we were to put something on ourselves. I’m very excited to announce the launch of Mogul I/O. Mogul I/O is a series of events focussed entirely on helping subscription businesses drive predictable business growth. The program will feature more general topics, as well as parts that are hyper-focussed for users of ChartMogul; e.g., we’ll be sharing our product roadmap. Where and when? We’ve confirmed our first two events, which will take place during April in San Francisco and New York. We’ll then follow with events in London and Berlin (our home base) later in the year. San Francisco – April 12 at 6 PM PT New York – April 18 at 6pm ET London – May 29th at 6pm GMT+1 Berlin – June 6th at 6pm CEST Many thanks to our event partners Autopilot and Honey, who are helping us host the SF and NY events. The program will be a mix of keynotes, panels and networking over food and drinks. We have a great lineup of speakers, including folks from Autopilot, Typeform, Mobilize, Algolia, Insight Venture Partners, Movable Ink, Vestwell and Honey. I’ll also be joining the lineup representing ChartMogul. This is just the beginning! The plan is for Mogul I/O to become a regular series of events. How exactly it will evolve we’re not quite sure yet, but we’re super excited to be hosting these first few. We hope you can make it to one of them, and we look forward to meeting you in person very soon!

<sys> [INST] Announcing Mogul I/O [/INST] The consumerization of enterprise software is a trend that we at ChartMogul are proud to be part of. In fact, we probably wouldn’t have started ChartMogul if it wasn’t for this trend — the old school world of enterprise software just doesn’t get us excited (sorry, SAP). But there is one thing that can get a bit lost in this shift toward self-service, cloud-delivered software, and that is the face-to-face human interaction. Meeting customers in person used to be a necessity to close a deal. That’s no longer the case. But meeting people in real life is critical for nurturing relationships. This is why we believe that events are more important than ever, and why we’ve been sponsors and attendees of SaaStr Annual and SaaStock conferences since their inception. These conferences are simply great places for the SaaS community (and by proxy, a large number of our customers) to come together under one roof. So we’ve always been passionate about community and about events, and over the past year we’ve been thinking about what we could bring to the table if we were to put something on ourselves. I’m very excited to announce the launch of Mogul I/O. Mogul I/O is a series of events focussed entirely on helping subscription businesses drive predictable business growth. The program will feature more general topics, as well as parts that are hyper-focussed for users of ChartMogul; e.g., we’ll be sharing our product roadmap. Where and when? We’ve confirmed our first two events, which will take place during April in San Francisco and New York. We’ll then follow with events in London and Berlin (our home base) later in the year. San Francisco – April 12 at 6 PM PT New York – April 18 at 6pm ET London – May 29th at 6pm GMT+1 Berlin – June 6th at 6pm CEST Many thanks to our event partners Autopilot and Honey, who are helping us host the SF and NY events. The program will be a mix of keynotes, panels and networking over food and drinks. We have a great lineup of speakers, including folks from Autopilot, Typeform, Mobilize, Algolia, Insight Venture Partners, Movable Ink, Vestwell and Honey. I’ll also be joining the lineup representing ChartMogul. This is just the beginning! The plan is for Mogul I/O to become a regular series of events. How exactly it will evolve we’re not quite sure yet, but we’re super excited to be hosting these first few. We hope you can make it to one of them, and we look forward to meeting you in person very soon! </sys

SaaS Q&A: How do you engage mid-trial customers?. Instead of adding some more guidance here around “aha moments”, etc. (all of which you should definitely pay attention to) I thought I’d put forward a couple of common UX patterns you can implement to get trial customers to engage more with your product. Drip emails This is probably the most common (and easy to implement) strategy for re-engaging users once they’ve actually created a trial account. Drip campaigns can vary in how complex – or smart – they are. On a basic level, you have a set of emails which are delivered to everyone, at pre-defined intervals after signup. This can be good for walking users through your feature set, bypassing the need to overwhelm with information in one go. If you want to get more advanced, segment these emails based on feature usage (only tell them about the features they haven’t used yet) or engagement (only send to users who become inactive). Zapier’s first welcome email is a great entry point for easing customers into using the feature of the product. Notifications On the surface this might seem the same as drip emails, but there’s a subtle difference. Notifications can actually be more successful at re-engaging users, because they’re often related to something that’s happened in the product, or in other words, their business. In the consumer world this is often something like: Hey Ed, your friend just posted an update! See what they said… But in B2B SaaS, it’s more likely to look something like this: Hey Ed, we’ve noticed your latest campaign is taking off. Take a look at the performance… There’s no better way for getting people to re-engage with your solution than giving them a reason that they actually care about. Gamification This is one of the higher-cost methods to implement, because it requires you to build these features into your product. But, if implemented well, you can really create a feedback loop for engagement. LinkedIn had the classic ‘Complete your profile’ checklist: Call your trial customers! Don’t forget this one. In today’s world, with so many tools and indirect communication, it’s easy to forget sometimes that you can just pick up the phone. Ask your customers about their trial experience, which features they’ve used, and why. This will almost certainly be the most valuable feedback when it comes to improving the product. So start dialing! This answer was originally published on Quora. View the original thread here: What’s the best way to go about ensuring my trial users fully try out our SaaS offering?

[INST] SaaS Q&A: How do you engage mid-trial customers? [/INST]

Instead of adding some more guidance here around “aha moments”, etc. (all of which you should definitely pay attention to) I thought I’d put forward a couple of common UX patterns you can implement to get trial customers to engage more with your product. Drip emails This is probably the most common (and easy to implement) strategy for re-engaging users once they’ve actually created a trial account. Drip campaigns can vary in how complex – or smart – they are. On a basic level, you have a set of emails which are delivered to everyone, at pre-defined intervals after signup. This can be good for walking users through your feature set, bypassing the need to overwhelm with information in one go. If you want to get more advanced, segment these emails based on feature usage (only tell them about the features they haven’t used yet) or engagement (only send to users who become inactive). Zapier’s first welcome email is a great entry point for easing customers into using the feature of the product. Notifications On the surface this might seem the same as drip emails, but there’s a subtle difference. Notifications can actually be more successful at re-engaging users, because they’re often related to something that’s happened in the product, or in other words, their business. In the consumer world this is often something like: Hey Ed, your friend just posted an update! See what they said… But in B2B SaaS, it’s more likely to look something like this: Hey Ed, we’ve noticed your latest campaign is taking off. Take a look at the performance… There’s no better way for getting people to re-engage with your solution than giving them a reason that they actually care about. Gamification This is one of the higher-cost methods to implement, because it requires you to build these features into your product. But, if implemented well, you can really create a feedback loop for engagement. LinkedIn had the classic ‘Complete your profile’ checklist: Call your trial customers! Don’t forget this one. In today’s world, with so many tools and indirect communication, it’s easy to forget sometimes that you can just pick up the phone. Ask your customers about their trial experience, which features they’ve used, and why. This will almost certainly be the most valuable feedback when it comes to improving the product. So start dialing! This answer was originally published on Quora. View the original thread here: What’s the best way to go about ensuring my trial users fully try out our SaaS offering?

<sys> [INST] SaaS Q&A: How do you engage mid-trial customers? [/INST] Instead of adding some more guidance here around “aha moments”, etc. (all of which you should definitely pay attention to) I thought I’d put forward a couple of common UX patterns you can implement to get trial customers to engage more with your product. Drip emails This is probably the most common (and easy to implement) strategy for re-engaging users once they’ve actually created a trial account. Drip campaigns can vary in how complex – or smart – they are. On a basic level, you have a set of emails which are delivered to everyone, at pre-defined intervals after signup. This can be good for walking users through your feature set, bypassing the need to overwhelm with information in one go. If you want to get more advanced, segment these emails based on feature usage (only tell them about the features they haven’t used yet) or engagement (only send to users who become inactive). Zapier’s first welcome email is a great entry point for easing customers into using the feature of the product. Notifications On the surface this might seem the same as drip emails, but there’s a subtle difference. Notifications can actually be more successful at re-engaging users, because they’re often related to something that’s happened in the product, or in other words, their business. In the consumer world this is often something like: Hey Ed, your friend just posted an update! See what they said… But in B2B SaaS, it’s more likely to look something like this: Hey Ed, we’ve noticed your latest campaign is taking off. Take a look at the performance… There’s no better way for getting people to re-engage with your solution than giving them a reason that they actually care about. Gamification This is one of the higher-cost methods to implement, because it requires you to build these features into your product. But, if implemented well, you can really create a feedback loop for engagement. LinkedIn had the classic ‘Complete your profile’ checklist: Call your trial customers! Don’t forget this one. In today’s world, with so many tools and indirect communication, it’s easy to forget sometimes that you can just pick up the phone. Ask your customers about their trial experience, which features they’ve used, and why. This will almost certainly be the most valuable feedback when it comes to improving the product. So start dialing! This answer was originally published on Quora. View the original thread here: What’s the best way to go about ensuring my trial users fully try out our SaaS offering? </sys

The metrics behind Spotify’s IPO. Spotify has revealed its intentions to go public with a novel “direct listing” approach. This means that the company will not embark on the usual roadshow, there will be no pre-defined opening share price and more freedom for existing stakeholders who want to sell their shares. This somewhat risky direct listing is likely to be a benchmark for other future public listings in 2018, with the likes of Airbnb predicted to follow suit if all goes to plan. Spotify even states in the company’s F-1 filing that it expects a volatile share price in the early days after listing. Spotify’s filing gives us a rare look into the metrics of a large-scale consumer subscription business. Here’s a quick rundown of some key findings from the F-1 document. Spotify Co-Founder & CEO Daniel Ek Customer Churn Rate TL;DR: Churn rate declined from 7.7% to 5.5% over three years, despite strong subscriber growth Churn rate in consumer subscriptions is generally higher than in B2B, particularly where consumers are more sensitive to the ongoing cost of subscriptions. First of all, the fact that Spotify’s customer churn rate is even under 10% is promising. That they’ve managed to add 43 million subscribers in three years and still see a decline in churn rate is highly impressive. It’s worth remembering that this is all happening during a period of strong competition in the form of Apple Music, Google Play Music and others. What decreases churn? The introduction of a Family plan — Spotify’s Family plan allows multiple users in the same household to share a subscription — sees significantly higher retention (lower churn). With multiple users lumped under a single paid subscription, a decreased likelihood of churn makes sense.* Increased product personalization — This can lead to a stickier product with more invested, engaged users. Undoubtedly, Spotify’s array of personalized playlists (especially Discover Weekly) keep people subscribed. User-generated value within the product — A great example of this is the large collection of Spotify playlists that users might create over time. These are artifacts into which the user has put significant effort, making the decision to cancel all the more difficult. *The Family plan is widely known to be exploited by groups of friends seeking a lower subscription cost by sharing with others. Perhaps Spotify isn’t bothered by this, given that the retention is higher? Average Revenue Per Account (ARPA) TL;DR: ARPA is down from €6.84 in 2015 to €5.32 in 2017. This is likely due to family subscriptions and internationalization. ARPA is the lifeblood of any subscription business. How much money do I make from my customers? So why is Spotify’s ARPA steadily decreasing? In the SaaS world, businesses generally aim to drive higher ARPA through add-ons and paid upgrades as the product matures. Things are very different for B2C though. Two possible drivers behind this decrease are: Global expansion to new markets (i18n) with less purchasing power, and therefore lower price points. In some markets such as the Philippines, premium subscriptions are the equivalent of less than $3. The adoption of family subscriptions, which cost $14.99 for up to six people, thus a large discount on the individual premium plans. How might Spotify increase ARPA in the future? Paid upgrades, such as higher-quality streaming at a higher price point New platform products such as a (rumored) smart speaker Raising the price of the Premium plan, similarly to Netflix (which recently increased from $9.99 to $10.99, seeing a profit margin rise from 6.2% to 7.5% year-over-year in Q4 2017) Ad-supported Freemium “Our Ad-Supported Service serves as a funnel, driving more than 60% of our total gross added Premium Subscribers since we began tracking this data in February 2014.” Spotify’s free plan uses in-app advertising to monetize freemium users. Ad revenue from free plans is a small proportion of total revenue (about 10%) but is growing steadily year over year. Like most freemium subscriptions, the free plan is a core driver of the growth of paid subscriber and Spotify’s ability to acquire and convert users on the free plan is critical to future revenue growth. Gross Margin One huge difference between a typical SaaS businesses and a music streaming service like Spotify is gross margin — the difference between cost of goods sold (COGS) and revenue. Median gross margin for SaaS is 71% — virtually unheard of in less scalable revenue models. Revenue is growing faster than the company’s costs, so Spotify’s gross margin is increasing — it rose from 16% in 2014 to 21% in 2017. But those costs are still huge and predominantly attributed to one thing: royalty payments to rights holders. These grew by 27% year over year in 2017. Spotify has paid more than $9 billion in total royalties since its founding! This has been (and will likely continue to be) a primary cause of the company’s annual losses — a whopping $461 million from revenue of nearly $5 billion in 2017. Customer Lifetime Value (LTV) First of all, how long do customers stick around on average? We can calculate customer lifetime as: 1 / customer churn rate So the average premium subscriber remains subscribed for 18 months. LTV is not a metric that’s included in the company’s F-1 filing, but the components to estimate it are all there. In SaaS, the accepted (highly simplified) formula for LTV is as follows: In 2017: Gross margin (for Premium) was 22% ARPA was €5.32 Churn rate is 5.5% Estimated LTV = €21.28 (If we don’t take into account gross margin, LTV is €96.73.) Increasing LTV There are two key ways of driving higher lifetime value in a subscription business: Lengthen customer lifetime (better retention) Increase average revenue per account (ARPA) For Spotify, there are a number of concrete options on the table for increasing ARPA (see ARPA section), but when it comes to increasing retention, it’s really about customer satisfaction and perceived value in the face of industry competition. Retention in a subscription business is all about delivering significant ongoing value to the customer. If the company continues to innovate on features and builds a sticky platform, the prospect of jumping ship to another streaming service becomes less attractive. Spotify’s biggest challenge: becoming a platform Today, Spotify has 71 million premium subscribers. That’s nearly double that of their (arguably biggest) competitor, Apple Music. But post-IPO success for Spotify will need far more than a vast library of streaming audio to survive against Apple, Google and Amazon’s platform-focused strategies. These companies don’t need to have a profitable streaming business — they rely on revenue from other products and services (e.g., iPhone) so the music streaming component is merely a value add. A $12.99 Amazon Prime subscription gets me streaming music, streaming video, e-books, fast shipping and a whole host of other benefits. A $10.99 Spotify subscription gets me… well, Spotify. EDIT: As has been highlighted out in the Hacker News thread for this post, the $12.99 Amazon Prime subscription does NOT get you Amazon’s complete library of music. That’s called Amazon Music Unlimited and costs an extra $7.99 for Prime subscribers. Spotify desperately needs to demonstrate that it can make music licensing and streaming profitable (unlikely) or it needs to add other high-margin revenue streams to offset the massive cost of licensing deals. We’re seeing hints of this with recent job openings in hardware, but the question remains whether the company can adapt to compete in this space with its tech giant rivals. Sources and further reading: Spotify Pricing Index Spotify’s IPO in six charts – recode Netflix quarterly earnings Lessons from Spotify – Stratechery

[INST] The metrics behind Spotify’s IPO [/INST]

Spotify has revealed its intentions to go public with a novel “direct listing” approach. This means that the company will not embark on the usual roadshow, there will be no pre-defined opening share price and more freedom for existing stakeholders who want to sell their shares. This somewhat risky direct listing is likely to be a benchmark for other future public listings in 2018, with the likes of Airbnb predicted to follow suit if all goes to plan. Spotify even states in the company’s F-1 filing that it expects a volatile share price in the early days after listing. Spotify’s filing gives us a rare look into the metrics of a large-scale consumer subscription business. Here’s a quick rundown of some key findings from the F-1 document. Spotify Co-Founder & CEO Daniel Ek Customer Churn Rate TL;DR: Churn rate declined from 7.7% to 5.5% over three years, despite strong subscriber growth Churn rate in consumer subscriptions is generally higher than in B2B, particularly where consumers are more sensitive to the ongoing cost of subscriptions. First of all, the fact that Spotify’s customer churn rate is even under 10% is promising. That they’ve managed to add 43 million subscribers in three years and still see a decline in churn rate is highly impressive. It’s worth remembering that this is all happening during a period of strong competition in the form of Apple Music, Google Play Music and others. What decreases churn? The introduction of a Family plan — Spotify’s Family plan allows multiple users in the same household to share a subscription — sees significantly higher retention (lower churn). With multiple users lumped under a single paid subscription, a decreased likelihood of churn makes sense.* Increased product personalization — This can lead to a stickier product with more invested, engaged users. Undoubtedly, Spotify’s array of personalized playlists (especially Discover Weekly) keep people subscribed. User-generated value within the product — A great example of this is the large collection of Spotify playlists that users might create over time. These are artifacts into which the user has put significant effort, making the decision to cancel all the more difficult. *The Family plan is widely known to be exploited by groups of friends seeking a lower subscription cost by sharing with others. Perhaps Spotify isn’t bothered by this, given that the retention is higher? Average Revenue Per Account (ARPA) TL;DR: ARPA is down from €6.84 in 2015 to €5.32 in 2017. This is likely due to family subscriptions and internationalization. ARPA is the lifeblood of any subscription business. How much money do I make from my customers? So why is Spotify’s ARPA steadily decreasing? In the SaaS world, businesses generally aim to drive higher ARPA through add-ons and paid upgrades as the product matures. Things are very different for B2C though. Two possible drivers behind this decrease are: Global expansion to new markets (i18n) with less purchasing power, and therefore lower price points. In some markets such as the Philippines, premium subscriptions are the equivalent of less than $3. The adoption of family subscriptions, which cost $14.99 for up to six people, thus a large discount on the individual premium plans. How might Spotify increase ARPA in the future? Paid upgrades, such as higher-quality streaming at a higher price point New platform products such as a (rumored) smart speaker Raising the price of the Premium plan, similarly to Netflix (which recently increased from $9.99 to $10.99, seeing a profit margin rise from 6.2% to 7.5% year-over-year in Q4 2017) Ad-supported Freemium “Our Ad-Supported Service serves as a funnel, driving more than 60% of our total gross added Premium Subscribers since we began tracking this data in February 2014.” Spotify’s free plan uses in-app advertising to monetize freemium users. Ad revenue from free plans is a small proportion of total revenue (about 10%) but is growing steadily year over year. Like most freemium subscriptions, the free plan is a core driver of the growth of paid subscriber and Spotify’s ability to acquire and convert users on the free plan is critical to future revenue growth. Gross Margin One huge difference between a typical SaaS businesses and a music streaming service like Spotify is gross margin — the difference between cost of goods sold (COGS) and revenue. Median gross margin for SaaS is 71% — virtually unheard of in less scalable revenue models. Revenue is growing faster than the company’s costs, so Spotify’s gross margin is increasing — it rose from 16% in 2014 to 21% in 2017. But those costs are still huge and predominantly attributed to one thing: royalty payments to rights holders. These grew by 27% year over year in 2017. Spotify has paid more than $9 billion in total royalties since its founding! This has been (and will likely continue to be) a primary cause of the company’s annual losses — a whopping $461 million from revenue of nearly $5 billion in 2017. Customer Lifetime Value (LTV) First of all, how long do customers stick around on average? We can calculate customer lifetime as: 1 / customer churn rate So the average premium subscriber remains subscribed for 18 months. LTV is not a metric that’s included in the company’s F-1 filing, but the components to estimate it are all there. In SaaS, the accepted (highly simplified) formula for LTV is as follows: In 2017: Gross margin (for Premium) was 22% ARPA was €5.32 Churn rate is 5.5% Estimated LTV = €21.28 (If we don’t take into account gross margin, LTV is €96.73.) Increasing LTV There are two key ways of driving higher lifetime value in a subscription business: Lengthen customer lifetime (better retention) Increase average revenue per account (ARPA) For Spotify, there are a number of concrete options on the table for increasing ARPA (see ARPA section), but when it comes to increasing retention, it’s really about customer satisfaction and perceived value in the face of industry competition. Retention in a subscription business is all about delivering significant ongoing value to the customer. If the company continues to innovate on features and builds a sticky platform, the prospect of jumping ship to another streaming service becomes less attractive. Spotify’s biggest challenge: becoming a platform Today, Spotify has 71 million premium subscribers. That’s nearly double that of their (arguably biggest) competitor, Apple Music. But post-IPO success for Spotify will need far more than a vast library of streaming audio to survive against Apple, Google and Amazon’s platform-focused strategies. These companies don’t need to have a profitable streaming business — they rely on revenue from other products and services (e.g., iPhone) so the music streaming component is merely a value add. A $12.99 Amazon Prime subscription gets me streaming music, streaming video, e-books, fast shipping and a whole host of other benefits. A $10.99 Spotify subscription gets me… well, Spotify. EDIT: As has been highlighted out in the Hacker News thread for this post, the $12.99 Amazon Prime subscription does NOT get you Amazon’s complete library of music. That’s called Amazon Music Unlimited and costs an extra $7.99 for Prime subscribers. Spotify desperately needs to demonstrate that it can make music licensing and streaming profitable (unlikely) or it needs to add other high-margin revenue streams to offset the massive cost of licensing deals. We’re seeing hints of this with recent job openings in hardware, but the question remains whether the company can adapt to compete in this space with its tech giant rivals. Sources and further reading: Spotify Pricing Index Spotify’s IPO in six charts – recode Netflix quarterly earnings Lessons from Spotify – Stratechery

<sys> [INST] The metrics behind Spotify’s IPO [/INST] Spotify has revealed its intentions to go public with a novel “direct listing” approach. This means that the company will not embark on the usual roadshow, there will be no pre-defined opening share price and more freedom for existing stakeholders who want to sell their shares. This somewhat risky direct listing is likely to be a benchmark for other future public listings in 2018, with the likes of Airbnb predicted to follow suit if all goes to plan. Spotify even states in the company’s F-1 filing that it expects a volatile share price in the early days after listing. Spotify’s filing gives us a rare look into the metrics of a large-scale consumer subscription business. Here’s a quick rundown of some key findings from the F-1 document. Spotify Co-Founder & CEO Daniel Ek Customer Churn Rate TL;DR: Churn rate declined from 7.7% to 5.5% over three years, despite strong subscriber growth Churn rate in consumer subscriptions is generally higher than in B2B, particularly where consumers are more sensitive to the ongoing cost of subscriptions. First of all, the fact that Spotify’s customer churn rate is even under 10% is promising. That they’ve managed to add 43 million subscribers in three years and still see a decline in churn rate is highly impressive. It’s worth remembering that this is all happening during a period of strong competition in the form of Apple Music, Google Play Music and others. What decreases churn? The introduction of a Family plan — Spotify’s Family plan allows multiple users in the same household to share a subscription — sees significantly higher retention (lower churn). With multiple users lumped under a single paid subscription, a decreased likelihood of churn makes sense.* Increased product personalization — This can lead to a stickier product with more invested, engaged users. Undoubtedly, Spotify’s array of personalized playlists (especially Discover Weekly) keep people subscribed. User-generated value within the product — A great example of this is the large collection of Spotify playlists that users might create over time. These are artifacts into which the user has put significant effort, making the decision to cancel all the more difficult. *The Family plan is widely known to be exploited by groups of friends seeking a lower subscription cost by sharing with others. Perhaps Spotify isn’t bothered by this, given that the retention is higher? Average Revenue Per Account (ARPA) TL;DR: ARPA is down from €6.84 in 2015 to €5.32 in 2017. This is likely due to family subscriptions and internationalization. ARPA is the lifeblood of any subscription business. How much money do I make from my customers? So why is Spotify’s ARPA steadily decreasing? In the SaaS world, businesses generally aim to drive higher ARPA through add-ons and paid upgrades as the product matures. Things are very different for B2C though. Two possible drivers behind this decrease are: Global expansion to new markets (i18n) with less purchasing power, and therefore lower price points. In some markets such as the Philippines, premium subscriptions are the equivalent of less than $3. The adoption of family subscriptions, which cost $14.99 for up to six people, thus a large discount on the individual premium plans. How might Spotify increase ARPA in the future? Paid upgrades, such as higher-quality streaming at a higher price point New platform products such as a (rumored) smart speaker Raising the price of the Premium plan, similarly to Netflix (which recently increased from $9.99 to $10.99, seeing a profit margin rise from 6.2% to 7.5% year-over-year in Q4 2017) Ad-supported Freemium “Our Ad-Supported Service serves as a funnel, driving more than 60% of our total gross added Premium Subscribers since we began tracking this data in February 2014.” Spotify’s free plan uses in-app advertising to monetize freemium users. Ad revenue from free plans is a small proportion of total revenue (about 10%) but is growing steadily year over year. Like most freemium subscriptions, the free plan is a core driver of the growth of paid subscriber and Spotify’s ability to acquire and convert users on the free plan is critical to future revenue growth. Gross Margin One huge difference between a typical SaaS businesses and a music streaming service like Spotify is gross margin — the difference between cost of goods sold (COGS) and revenue. Median gross margin for SaaS is 71% — virtually unheard of in less scalable revenue models. Revenue is growing faster than the company’s costs, so Spotify’s gross margin is increasing — it rose from 16% in 2014 to 21% in 2017. But those costs are still huge and predominantly attributed to one thing: royalty payments to rights holders. These grew by 27% year over year in 2017. Spotify has paid more than $9 billion in total royalties since its founding! This has been (and will likely continue to be) a primary cause of the company’s annual losses — a whopping $461 million from revenue of nearly $5 billion in 2017. Customer Lifetime Value (LTV) First of all, how long do customers stick around on average? We can calculate customer lifetime as: 1 / customer churn rate So the average premium subscriber remains subscribed for 18 months. LTV is not a metric that’s included in the company’s F-1 filing, but the components to estimate it are all there. In SaaS, the accepted (highly simplified) formula for LTV is as follows: In 2017: Gross margin (for Premium) was 22% ARPA was €5.32 Churn rate is 5.5% Estimated LTV = €21.28 (If we don’t take into account gross margin, LTV is €96.73.) Increasing LTV There are two key ways of driving higher lifetime value in a subscription business: Lengthen customer lifetime (better retention) Increase average revenue per account (ARPA) For Spotify, there are a number of concrete options on the table for increasing ARPA (see ARPA section), but when it comes to increasing retention, it’s really about customer satisfaction and perceived value in the face of industry competition. Retention in a subscription business is all about delivering significant ongoing value to the customer. If the company continues to innovate on features and builds a sticky platform, the prospect of jumping ship to another streaming service becomes less attractive. Spotify’s biggest challenge: becoming a platform Today, Spotify has 71 million premium subscribers. That’s nearly double that of their (arguably biggest) competitor, Apple Music. But post-IPO success for Spotify will need far more than a vast library of streaming audio to survive against Apple, Google and Amazon’s platform-focused strategies. These companies don’t need to have a profitable streaming business — they rely on revenue from other products and services (e.g., iPhone) so the music streaming component is merely a value add. A $12.99 Amazon Prime subscription gets me streaming music, streaming video, e-books, fast shipping and a whole host of other benefits. A $10.99 Spotify subscription gets me… well, Spotify. EDIT: As has been highlighted out in the Hacker News thread for this post, the $12.99 Amazon Prime subscription does NOT get you Amazon’s complete library of music. That’s called Amazon Music Unlimited and costs an extra $7.99 for Prime subscribers. Spotify desperately needs to demonstrate that it can make music licensing and streaming profitable (unlikely) or it needs to add other high-margin revenue streams to offset the massive cost of licensing deals. We’re seeing hints of this with recent job openings in hardware, but the question remains whether the company can adapt to compete in this space with its tech giant rivals. Sources and further reading: Spotify Pricing Index Spotify’s IPO in six charts – recode Netflix quarterly earnings Lessons from Spotify – Stratechery </sys

Announcing the ChartMogul Import API. ChartMogul: From app to platform The concept for ChartMogul grew from an urge to solve an important problem facing subscription businesses: the need to calculate and track key SaaS and subscription metrics for use by the management team and board of directors. We started by making it easy for companies using Stripe, Braintree, Recurly, Chargify or PayPal to import their billing data, with our one-click integrations. But what if your company uses a different billing system or has built their own custom billing solution in-house? Today we’re launching a simple way for any subscription business to use ChartMogul — regardless of where your data sits. This furthers our vision for building ChartMogul as a flexible, open platform that acts as a central hub for helping recurring revenue businesses unlock the value in their data. The ChartMogul Import API We’re really excited to officially launch the ChartMogul Import API. The Import API enables any subscription business to get the full benefits of ChartMogul regardless of what system they are using to bill their customers. Previously the only option if you weren’t using a supported billing platform was to upload a CSV file. However, there are some limitations to what can be done with CSV uploads. Once integrated with the Import API, any business or billing platform can securely push billing data to ChartMogul in real time, for use with features like Cohort Analysis, Segmentation and the full set of reporting features that over 700 businesses already use and love. How does it work? We’ve designed the Import API to be simple to use, regardless of the system you’re integrating, or programming language you’re using. Using our RESTful web endpoints, your developers will need to: Make secure web requests to api.chartmogul.com over HTTPS Authenticate with ChartMogul using HTTP Basic Authentication Client-side apps can also communicate with the API using Cross-Origin Resource Sharing (CORS) You’ll need to go through the following steps to get fully integrated: Create a data source (customer data in ChartMogul must belong to a data source) Create customers Create subscription plans Create invoices (invoice objects contains most of the key data about a customer’s subscription and related transactions) How do I get started? We’re also launching the ChartMogul Developer Hub today! This is your one-stop shop for all of ChartMogul’s developer resources, and is the starting point for integrating the Import API. Head on over to the Import API section at dev.chartmogul.com. You’ll also find a getting started tutorial, as well as comprehensive documentation of all the functionality: What if I need help? Not a problem. Our customer success engineers are ready to help you get setup with the Import API or anything else related to ChartMogul, just email support@chartmogul.com

[INST] Announcing the ChartMogul Import API [/INST]

ChartMogul: From app to platform The concept for ChartMogul grew from an urge to solve an important problem facing subscription businesses: the need to calculate and track key SaaS and subscription metrics for use by the management team and board of directors. We started by making it easy for companies using Stripe, Braintree, Recurly, Chargify or PayPal to import their billing data, with our one-click integrations. But what if your company uses a different billing system or has built their own custom billing solution in-house? Today we’re launching a simple way for any subscription business to use ChartMogul — regardless of where your data sits. This furthers our vision for building ChartMogul as a flexible, open platform that acts as a central hub for helping recurring revenue businesses unlock the value in their data. The ChartMogul Import API We’re really excited to officially launch the ChartMogul Import API. The Import API enables any subscription business to get the full benefits of ChartMogul regardless of what system they are using to bill their customers. Previously the only option if you weren’t using a supported billing platform was to upload a CSV file. However, there are some limitations to what can be done with CSV uploads. Once integrated with the Import API, any business or billing platform can securely push billing data to ChartMogul in real time, for use with features like Cohort Analysis, Segmentation and the full set of reporting features that over 700 businesses already use and love. How does it work? We’ve designed the Import API to be simple to use, regardless of the system you’re integrating, or programming language you’re using. Using our RESTful web endpoints, your developers will need to: Make secure web requests to api.chartmogul.com over HTTPS Authenticate with ChartMogul using HTTP Basic Authentication Client-side apps can also communicate with the API using Cross-Origin Resource Sharing (CORS) You’ll need to go through the following steps to get fully integrated: Create a data source (customer data in ChartMogul must belong to a data source) Create customers Create subscription plans Create invoices (invoice objects contains most of the key data about a customer’s subscription and related transactions) How do I get started? We’re also launching the ChartMogul Developer Hub today! This is your one-stop shop for all of ChartMogul’s developer resources, and is the starting point for integrating the Import API. Head on over to the Import API section at dev.chartmogul.com. You’ll also find a getting started tutorial, as well as comprehensive documentation of all the functionality: What if I need help? Not a problem. Our customer success engineers are ready to help you get setup with the Import API or anything else related to ChartMogul, just email support@chartmogul.com

<sys> [INST] Announcing the ChartMogul Import API [/INST] ChartMogul: From app to platform The concept for ChartMogul grew from an urge to solve an important problem facing subscription businesses: the need to calculate and track key SaaS and subscription metrics for use by the management team and board of directors. We started by making it easy for companies using Stripe, Braintree, Recurly, Chargify or PayPal to import their billing data, with our one-click integrations. But what if your company uses a different billing system or has built their own custom billing solution in-house? Today we’re launching a simple way for any subscription business to use ChartMogul — regardless of where your data sits. This furthers our vision for building ChartMogul as a flexible, open platform that acts as a central hub for helping recurring revenue businesses unlock the value in their data. The ChartMogul Import API We’re really excited to officially launch the ChartMogul Import API. The Import API enables any subscription business to get the full benefits of ChartMogul regardless of what system they are using to bill their customers. Previously the only option if you weren’t using a supported billing platform was to upload a CSV file. However, there are some limitations to what can be done with CSV uploads. Once integrated with the Import API, any business or billing platform can securely push billing data to ChartMogul in real time, for use with features like Cohort Analysis, Segmentation and the full set of reporting features that over 700 businesses already use and love. How does it work? We’ve designed the Import API to be simple to use, regardless of the system you’re integrating, or programming language you’re using. Using our RESTful web endpoints, your developers will need to: Make secure web requests to api.chartmogul.com over HTTPS Authenticate with ChartMogul using HTTP Basic Authentication Client-side apps can also communicate with the API using Cross-Origin Resource Sharing (CORS) You’ll need to go through the following steps to get fully integrated: Create a data source (customer data in ChartMogul must belong to a data source) Create customers Create subscription plans Create invoices (invoice objects contains most of the key data about a customer’s subscription and related transactions) How do I get started? We’re also launching the ChartMogul Developer Hub today! This is your one-stop shop for all of ChartMogul’s developer resources, and is the starting point for integrating the Import API. Head on over to the Import API section at dev.chartmogul.com. You’ll also find a getting started tutorial, as well as comprehensive documentation of all the functionality: What if I need help? Not a problem. Our customer success engineers are ready to help you get setup with the Import API or anything else related to ChartMogul, just email support@chartmogul.com </sys

SaaS Q&A: What are the ingredients of a sustainable SaaS business?. If you’re in for the long haul and you truly want to build a sustainable SaaS business, you need to effectively build a well oiled machine. The machine has a lot of moving parts, the failure of any single piece causing triggering the inevitable breakdown of the entire thing. source: oldbookillustrations.com So what are the key parts? It always starts with a great product, that solves a meaningful real-world problem in a compelling way. If you don’t have this, you may as well forget the whole thing. Solve a problem, then figure out how to put your solution in front of people. Many SaaS businesses that fail often see success in the early days, through intensive sales and marketing efforts, only to be fatally bitten by an inadequate product eventually. So what does a great SaaS product do that a good one doesn’t? It onboards users with an experience that’s not just trouble-free, it’s actually so good people will write about it and use it as an example. It gets users to the “aha” moment within the first few minutes of using the product. It has built-in virality The second part of the machine is an efficient Customer Success process. If you want your SaaS business to be sustainable, you need to have near-watertight levels of customer retention. And the only real way to do that is to hire a great Customer Success person and send them out into the world. Once the machine is watertight and not leaking steam from every pipe, it’s time to pour in the coal… er, customers. For most SaaS businesses, by far the most cost-efficient method of acquiring customers is through Content Marketing. Educate your target audience, become a thought leader in your space, and put your brand front and center on the most high quality content people have seen. This is the only true way to stand out. While most other people are pushing for growth hacks and quantity, you can only win by standing out, being different and telling a story. All of the parts of the business that I’ve mentioned here can (and should) be measured, with metrics. If you build a machine with a good balance of: Customer Acquitision Cost to Customer Lifetime Value Excellent Retention Low Churn Rate Healthy Account Expansion …You can go crazy pouring in more coal with the confidence that it’ll efficiently add momentum to your growth. This post was originally published on Quora – read the original thread here.

[INST] SaaS Q&A: What are the ingredients of a sustainable SaaS business? [/INST]

If you’re in for the long haul and you truly want to build a sustainable SaaS business, you need to effectively build a well oiled machine. The machine has a lot of moving parts, the failure of any single piece causing triggering the inevitable breakdown of the entire thing. source: oldbookillustrations.com So what are the key parts? It always starts with a great product, that solves a meaningful real-world problem in a compelling way. If you don’t have this, you may as well forget the whole thing. Solve a problem, then figure out how to put your solution in front of people. Many SaaS businesses that fail often see success in the early days, through intensive sales and marketing efforts, only to be fatally bitten by an inadequate product eventually. So what does a great SaaS product do that a good one doesn’t? It onboards users with an experience that’s not just trouble-free, it’s actually so good people will write about it and use it as an example. It gets users to the “aha” moment within the first few minutes of using the product. It has built-in virality The second part of the machine is an efficient Customer Success process. If you want your SaaS business to be sustainable, you need to have near-watertight levels of customer retention. And the only real way to do that is to hire a great Customer Success person and send them out into the world. Once the machine is watertight and not leaking steam from every pipe, it’s time to pour in the coal… er, customers. For most SaaS businesses, by far the most cost-efficient method of acquiring customers is through Content Marketing. Educate your target audience, become a thought leader in your space, and put your brand front and center on the most high quality content people have seen. This is the only true way to stand out. While most other people are pushing for growth hacks and quantity, you can only win by standing out, being different and telling a story. All of the parts of the business that I’ve mentioned here can (and should) be measured, with metrics. If you build a machine with a good balance of: Customer Acquitision Cost to Customer Lifetime Value Excellent Retention Low Churn Rate Healthy Account Expansion …You can go crazy pouring in more coal with the confidence that it’ll efficiently add momentum to your growth. This post was originally published on Quora – read the original thread here.

<sys> [INST] SaaS Q&A: What are the ingredients of a sustainable SaaS business? [/INST] If you’re in for the long haul and you truly want to build a sustainable SaaS business, you need to effectively build a well oiled machine. The machine has a lot of moving parts, the failure of any single piece causing triggering the inevitable breakdown of the entire thing. source: oldbookillustrations.com So what are the key parts? It always starts with a great product, that solves a meaningful real-world problem in a compelling way. If you don’t have this, you may as well forget the whole thing. Solve a problem, then figure out how to put your solution in front of people. Many SaaS businesses that fail often see success in the early days, through intensive sales and marketing efforts, only to be fatally bitten by an inadequate product eventually. So what does a great SaaS product do that a good one doesn’t? It onboards users with an experience that’s not just trouble-free, it’s actually so good people will write about it and use it as an example. It gets users to the “aha” moment within the first few minutes of using the product. It has built-in virality The second part of the machine is an efficient Customer Success process. If you want your SaaS business to be sustainable, you need to have near-watertight levels of customer retention. And the only real way to do that is to hire a great Customer Success person and send them out into the world. Once the machine is watertight and not leaking steam from every pipe, it’s time to pour in the coal… er, customers. For most SaaS businesses, by far the most cost-efficient method of acquiring customers is through Content Marketing. Educate your target audience, become a thought leader in your space, and put your brand front and center on the most high quality content people have seen. This is the only true way to stand out. While most other people are pushing for growth hacks and quantity, you can only win by standing out, being different and telling a story. All of the parts of the business that I’ve mentioned here can (and should) be measured, with metrics. If you build a machine with a good balance of: Customer Acquitision Cost to Customer Lifetime Value Excellent Retention Low Churn Rate Healthy Account Expansion …You can go crazy pouring in more coal with the confidence that it’ll efficiently add momentum to your growth. This post was originally published on Quora – read the original thread here. </sys

Starting a SaaS in Berlin – 3 years in. The good… Ecosystem: While I’ve only been here 3 years I can see that the technology industry and ecosystem is growing and maturing at a healthy rate, though SaaS is still not as big a slice of the tech industry here as it could be. Although SaaS still feels like a minority in Berlin, European events like SaaStock are driving growth and awareness. Costs: Costs really are lower here, renting an apartment or office space is inexpensive compared with other tech hubs. For example, ChartMogul’s 200sqm (2,150 sqft) office only costs around €4K per month and is in a great location in central Berlin. Salaries: Salaries are lower on average in Berlin than comparable technology hubs, this means we can afford to pay at the upper-end of the pay spectrum, making us a more competitive employer. Talent: One of the most important factors for any technology startup is being able to hire the right people. Berlin is a good place to be when it comes to building a team, especially for engineering (it’s a place many engineers are attracted to move to). Many engineers in Berlin work for large (often Rocket Internet-backed) e-commerce companies, and working at a SaaS startup can be seen as an attractive alternative. Of course, some roles are tough to hire for here, especially senior sales and marketing executives (though this is a global problem as far as I can tell). Immigration: Germany is about as close to visa heaven as you could realistically hope for. Sponsoring visas for employees coming from outside the EU is very easy (I shouldn’t really call it sponsoring, it doesn’t cost us anything). The new employee simply makes an appointment at the immigration office (bringing with them their employment contract) and is (9 times out of 10) approved to start work immediately. We’ve never been unsuccessful in obtaining the necessary visas for people we wanted to hire from outside of the EU. We didn’t predict Brexit back in 2014 of course, but in hindsight it’s really lucky that we did choose pro-EU/pro-immigration Germany over the UK; out of our 20 team members we have 14 different nationalities represented (e.g. Australian, Japanese, French, Belarusian, Korean, Brazilian, Portuguese, Indian, British, German and others). This ability to hire the best candidate for a position, regardless of their passport, just wouldn’t have been possible in the UK. The ChartMogul team, which has grown a bit since we took this photo! Lifestyle: This point is pretty subjective, depending on what you’re into. But there are some things most everybody likes, e.g. not being crushed in overcrowded subway trains, or having a lot of options for eating out, and Berlin is great in these areas and many others in the lifestyle bucket. Also, I’m discovering (as the father of a 2yr old) that it’s a great place to raise young children, there are lots of parks and playgrounds (and other such facilities that make parenting easier). Fundraising: There are many local VC firms (and new ones being founded), especially at the seed stage. There’s not a lot of capital available locally at later stages, but this doesn’t hold back the best companies from attracting top international investors. It doesn’t hurt that Point Nine Capital (which is probably the best seed stage SaaS investor in Europe, if not the World – we’re biased of course) are headquartered in Berlin: Keep your friends close and your investors closer? ;-) The bad… International travel: Originally planned for 2011, Berlin’s new Brandenburg Airport is still nowhere close to being open — the ‘German efficiency’ stereotype clearly not extending to large-scale public sector infrastructure projects. The silver lining is that some airlines have got tired of waiting and begun opening more direct routes from the ageing Tegel Airport to key destinations (at least for us) such as San Francisco (might be short-lived now Air Berlin have entered bankruptcy) and Toronto. We still don’t have an open date for Berlin’s new airport. Read the full article Ease of doing business: Incorporating locally in Berlin and getting setup from a regulatory standpoint (e.g. employing people, filing financials, etc) consumed a lot of time and effort and was quite stressful (at least for a non-local/non-German speaker). We went through two accounting firms before finally finding one that understood our business and was able to deliver (I can highly recommend Tilango). At the end of our first year in Berlin I understood why the World Bank ranks Germany 114th (out of 190 ranked countries) on “Ease of Starting a Business” (while Germany ranks 17th for overall “Ease of Doing Business”). However, there is a silver lining. Once you are up and running things do run smoothly and reliably — just getting there isn’t super easy in the beginning. We now also have an in-house Director of Finance and Operations who (among other things) takes care of most of the regulatory side of running the business, this is really an essential hire for any non-local founder looking to do business in Germany. Conclusion There is of course no perfect place to start a business, but if you are considering moving somewhere to launch a technology business I hope you’ll consider Berlin and find this post useful. Feel free to ask me any questions about running a business in Berlin in the comments below and I’ll do my best to answer. This post is a followup to Why we chose Berlin over London, which was published in 2014. (Title photo credit: Michael J. Zirbes)

[INST] Starting a SaaS in Berlin – 3 years in [/INST]

The good… Ecosystem: While I’ve only been here 3 years I can see that the technology industry and ecosystem is growing and maturing at a healthy rate, though SaaS is still not as big a slice of the tech industry here as it could be. Although SaaS still feels like a minority in Berlin, European events like SaaStock are driving growth and awareness. Costs: Costs really are lower here, renting an apartment or office space is inexpensive compared with other tech hubs. For example, ChartMogul’s 200sqm (2,150 sqft) office only costs around €4K per month and is in a great location in central Berlin. Salaries: Salaries are lower on average in Berlin than comparable technology hubs, this means we can afford to pay at the upper-end of the pay spectrum, making us a more competitive employer. Talent: One of the most important factors for any technology startup is being able to hire the right people. Berlin is a good place to be when it comes to building a team, especially for engineering (it’s a place many engineers are attracted to move to). Many engineers in Berlin work for large (often Rocket Internet-backed) e-commerce companies, and working at a SaaS startup can be seen as an attractive alternative. Of course, some roles are tough to hire for here, especially senior sales and marketing executives (though this is a global problem as far as I can tell). Immigration: Germany is about as close to visa heaven as you could realistically hope for. Sponsoring visas for employees coming from outside the EU is very easy (I shouldn’t really call it sponsoring, it doesn’t cost us anything). The new employee simply makes an appointment at the immigration office (bringing with them their employment contract) and is (9 times out of 10) approved to start work immediately. We’ve never been unsuccessful in obtaining the necessary visas for people we wanted to hire from outside of the EU. We didn’t predict Brexit back in 2014 of course, but in hindsight it’s really lucky that we did choose pro-EU/pro-immigration Germany over the UK; out of our 20 team members we have 14 different nationalities represented (e.g. Australian, Japanese, French, Belarusian, Korean, Brazilian, Portuguese, Indian, British, German and others). This ability to hire the best candidate for a position, regardless of their passport, just wouldn’t have been possible in the UK. The ChartMogul team, which has grown a bit since we took this photo! Lifestyle: This point is pretty subjective, depending on what you’re into. But there are some things most everybody likes, e.g. not being crushed in overcrowded subway trains, or having a lot of options for eating out, and Berlin is great in these areas and many others in the lifestyle bucket. Also, I’m discovering (as the father of a 2yr old) that it’s a great place to raise young children, there are lots of parks and playgrounds (and other such facilities that make parenting easier). Fundraising: There are many local VC firms (and new ones being founded), especially at the seed stage. There’s not a lot of capital available locally at later stages, but this doesn’t hold back the best companies from attracting top international investors. It doesn’t hurt that Point Nine Capital (which is probably the best seed stage SaaS investor in Europe, if not the World – we’re biased of course) are headquartered in Berlin: Keep your friends close and your investors closer? ;-) The bad… International travel: Originally planned for 2011, Berlin’s new Brandenburg Airport is still nowhere close to being open — the ‘German efficiency’ stereotype clearly not extending to large-scale public sector infrastructure projects. The silver lining is that some airlines have got tired of waiting and begun opening more direct routes from the ageing Tegel Airport to key destinations (at least for us) such as San Francisco (might be short-lived now Air Berlin have entered bankruptcy) and Toronto. We still don’t have an open date for Berlin’s new airport. Read the full article Ease of doing business: Incorporating locally in Berlin and getting setup from a regulatory standpoint (e.g. employing people, filing financials, etc) consumed a lot of time and effort and was quite stressful (at least for a non-local/non-German speaker). We went through two accounting firms before finally finding one that understood our business and was able to deliver (I can highly recommend Tilango). At the end of our first year in Berlin I understood why the World Bank ranks Germany 114th (out of 190 ranked countries) on “Ease of Starting a Business” (while Germany ranks 17th for overall “Ease of Doing Business”). However, there is a silver lining. Once you are up and running things do run smoothly and reliably — just getting there isn’t super easy in the beginning. We now also have an in-house Director of Finance and Operations who (among other things) takes care of most of the regulatory side of running the business, this is really an essential hire for any non-local founder looking to do business in Germany. Conclusion There is of course no perfect place to start a business, but if you are considering moving somewhere to launch a technology business I hope you’ll consider Berlin and find this post useful. Feel free to ask me any questions about running a business in Berlin in the comments below and I’ll do my best to answer. This post is a followup to Why we chose Berlin over London, which was published in 2014. (Title photo credit: Michael J. Zirbes)

<sys> [INST] Starting a SaaS in Berlin – 3 years in [/INST] The good… Ecosystem: While I’ve only been here 3 years I can see that the technology industry and ecosystem is growing and maturing at a healthy rate, though SaaS is still not as big a slice of the tech industry here as it could be. Although SaaS still feels like a minority in Berlin, European events like SaaStock are driving growth and awareness. Costs: Costs really are lower here, renting an apartment or office space is inexpensive compared with other tech hubs. For example, ChartMogul’s 200sqm (2,150 sqft) office only costs around €4K per month and is in a great location in central Berlin. Salaries: Salaries are lower on average in Berlin than comparable technology hubs, this means we can afford to pay at the upper-end of the pay spectrum, making us a more competitive employer. Talent: One of the most important factors for any technology startup is being able to hire the right people. Berlin is a good place to be when it comes to building a team, especially for engineering (it’s a place many engineers are attracted to move to). Many engineers in Berlin work for large (often Rocket Internet-backed) e-commerce companies, and working at a SaaS startup can be seen as an attractive alternative. Of course, some roles are tough to hire for here, especially senior sales and marketing executives (though this is a global problem as far as I can tell). Immigration: Germany is about as close to visa heaven as you could realistically hope for. Sponsoring visas for employees coming from outside the EU is very easy (I shouldn’t really call it sponsoring, it doesn’t cost us anything). The new employee simply makes an appointment at the immigration office (bringing with them their employment contract) and is (9 times out of 10) approved to start work immediately. We’ve never been unsuccessful in obtaining the necessary visas for people we wanted to hire from outside of the EU. We didn’t predict Brexit back in 2014 of course, but in hindsight it’s really lucky that we did choose pro-EU/pro-immigration Germany over the UK; out of our 20 team members we have 14 different nationalities represented (e.g. Australian, Japanese, French, Belarusian, Korean, Brazilian, Portuguese, Indian, British, German and others). This ability to hire the best candidate for a position, regardless of their passport, just wouldn’t have been possible in the UK. The ChartMogul team, which has grown a bit since we took this photo! Lifestyle: This point is pretty subjective, depending on what you’re into. But there are some things most everybody likes, e.g. not being crushed in overcrowded subway trains, or having a lot of options for eating out, and Berlin is great in these areas and many others in the lifestyle bucket. Also, I’m discovering (as the father of a 2yr old) that it’s a great place to raise young children, there are lots of parks and playgrounds (and other such facilities that make parenting easier). Fundraising: There are many local VC firms (and new ones being founded), especially at the seed stage. There’s not a lot of capital available locally at later stages, but this doesn’t hold back the best companies from attracting top international investors. It doesn’t hurt that Point Nine Capital (which is probably the best seed stage SaaS investor in Europe, if not the World – we’re biased of course) are headquartered in Berlin: Keep your friends close and your investors closer? ;-) The bad… International travel: Originally planned for 2011, Berlin’s new Brandenburg Airport is still nowhere close to being open — the ‘German efficiency’ stereotype clearly not extending to large-scale public sector infrastructure projects. The silver lining is that some airlines have got tired of waiting and begun opening more direct routes from the ageing Tegel Airport to key destinations (at least for us) such as San Francisco (might be short-lived now Air Berlin have entered bankruptcy) and Toronto. We still don’t have an open date for Berlin’s new airport. Read the full article Ease of doing business: Incorporating locally in Berlin and getting setup from a regulatory standpoint (e.g. employing people, filing financials, etc) consumed a lot of time and effort and was quite stressful (at least for a non-local/non-German speaker). We went through two accounting firms before finally finding one that understood our business and was able to deliver (I can highly recommend Tilango). At the end of our first year in Berlin I understood why the World Bank ranks Germany 114th (out of 190 ranked countries) on “Ease of Starting a Business” (while Germany ranks 17th for overall “Ease of Doing Business”). However, there is a silver lining. Once you are up and running things do run smoothly and reliably — just getting there isn’t super easy in the beginning. We now also have an in-house Director of Finance and Operations who (among other things) takes care of most of the regulatory side of running the business, this is really an essential hire for any non-local founder looking to do business in Germany. Conclusion There is of course no perfect place to start a business, but if you are considering moving somewhere to launch a technology business I hope you’ll consider Berlin and find this post useful. Feel free to ask me any questions about running a business in Berlin in the comments below and I’ll do my best to answer. This post is a followup to Why we chose Berlin over London, which was published in 2014. (Title photo credit: Michael J. Zirbes) </sys

Announcing the ChartMogul PayKickstart integration. Introducing PayKickstart We’re pleased to announce our new integration with PayKickstart, a shopping cart software that serves businesses around the world. PayKickstart has built an integration that allows their merchants to import their billing data into ChartMogul. From there, all billing data — including new customers, invoices, payments and subscriptions — will be synced automatically in ChartMogul and updated in real time. What does it do? With this integration, PayKickstart customers can access all the reporting and analytics features of ChartMogul, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more Get started! If you’ve already created a ChartMogul account, follow these integration instructions provided by PayKickstart to connect your two accounts. If you have any questions regarding the integration, you can reach PayKickstart support at support@paykickstart.com. Don’t have an account yet? Try out the ChartMogul integration with a 14-day free trial, and start building a better subscription business. If you’re interested in using PayKickstart and don’t yet have an account, you can also try their 14-day free trial.

[INST] Announcing the ChartMogul PayKickstart integration [/INST]

Introducing PayKickstart We’re pleased to announce our new integration with PayKickstart, a shopping cart software that serves businesses around the world. PayKickstart has built an integration that allows their merchants to import their billing data into ChartMogul. From there, all billing data — including new customers, invoices, payments and subscriptions — will be synced automatically in ChartMogul and updated in real time. What does it do? With this integration, PayKickstart customers can access all the reporting and analytics features of ChartMogul, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more Get started! If you’ve already created a ChartMogul account, follow these integration instructions provided by PayKickstart to connect your two accounts. If you have any questions regarding the integration, you can reach PayKickstart support at support@paykickstart.com. Don’t have an account yet? Try out the ChartMogul integration with a 14-day free trial, and start building a better subscription business. If you’re interested in using PayKickstart and don’t yet have an account, you can also try their 14-day free trial.

<sys> [INST] Announcing the ChartMogul PayKickstart integration [/INST] Introducing PayKickstart We’re pleased to announce our new integration with PayKickstart, a shopping cart software that serves businesses around the world. PayKickstart has built an integration that allows their merchants to import their billing data into ChartMogul. From there, all billing data — including new customers, invoices, payments and subscriptions — will be synced automatically in ChartMogul and updated in real time. What does it do? With this integration, PayKickstart customers can access all the reporting and analytics features of ChartMogul, including: Monthly Recurring Revenue (MRR) Churn rates Customer Lifetime Value (LTV) Segmentation Cohort analysis Geo-mapping And much more Get started! If you’ve already created a ChartMogul account, follow these integration instructions provided by PayKickstart to connect your two accounts. If you have any questions regarding the integration, you can reach PayKickstart support at support@paykickstart.com. Don’t have an account yet? Try out the ChartMogul integration with a 14-day free trial, and start building a better subscription business. If you’re interested in using PayKickstart and don’t yet have an account, you can also try their 14-day free trial. </sys

🐻 Find out which animal(s) you’re hunting. Before we get started let’s just make clear that no-one is interested in actually hunting any of these wonderful animals ;) Before reading further I do recommend skimming Christoph’s most recent blog post on the subject. As people who run subscription businesses we all like making money. But not everyone is on a trajectory to get to $100M in the next few years. However, this doesn’t mean the animals analogy can’t be a useful tool for understanding your business. And perhaps helping you lift your ARR growth angle so it is on a path to reach $100M. I recently got to thinking about which animals we are hunting at ChartMogul, which led me to try and answer this question using ChartMogul. To build out these charts in ChartMogul I started by creating 5 segments (1 for each animal). However, to make this work as a chart we’ll need to assign each animal an “ACV range” as it’s unlikely you’re charging your customers exactly, $100, $1,000, $10,000, etc. per year. I attempted to assign ranges that felt reasonable. So, I came up with these translations. It’s not an exact science but this gives us a good place to start and you can always tweak it for your business. I made the starting threshold for Whale quite a lot smaller than $1M ACV so more businesses perhaps have a chance to actually win some whales :) The reason for including the MRR range in the above table is for this next stage. ChartMogul doesn’t have a way to filter by ACV so we convert ACV to MRR by dividing by 12. Building your animals chart The next step is to navigate to the ARR chart and click the “New segment” button 4 times. You should now have 5 segments open. Then create the following segment configuration: Click this link to auto-create the above so you don’t need to do a lot of clicking. (pro-tip: I got these non-standard colors by editing the URL directly) Then we save the segments: Including emoji in the segment names is very important. Now you can navigate around the various default charts, ARR, Subscribers, Customer Churn Rate, Net MRR Churn rate and the segments should persist as you navigate. What we discovered Below is our ARR chart sliced by animal (sorry I removed the Y-axis labels). On seeing this chart a few key things became clear to us We’re no longer hunting mice, most of these accounts were transitioned onto our Free Launch plan and don’t show up in an ARR report. We make the vast majority of our revenues from rabbits and deer, and now have a few elephants too. As most growth is coming from deer (and elephants) these are the animals that are probably going to bring us our future growth. But that doesn’t mean we shouldn’t focus on smaller animals. After all, in SaaS, thanks to it’s compounding nature. It’s often just a matter of time before a rabbit becomes a deer ;-) One more thing For those signing up for a new free trial of ChartMogul, we’ve gone ahead and pre-loaded this chart into your default set of custom charts. Existing customers will need to build this chart by hand, but we hope the above instructions give you a head start.

[INST] 🐻 Find out which animal(s) you’re hunting [/INST]

Before we get started let’s just make clear that no-one is interested in actually hunting any of these wonderful animals ;) Before reading further I do recommend skimming Christoph’s most recent blog post on the subject. As people who run subscription businesses we all like making money. But not everyone is on a trajectory to get to $100M in the next few years. However, this doesn’t mean the animals analogy can’t be a useful tool for understanding your business. And perhaps helping you lift your ARR growth angle so it is on a path to reach $100M. I recently got to thinking about which animals we are hunting at ChartMogul, which led me to try and answer this question using ChartMogul. To build out these charts in ChartMogul I started by creating 5 segments (1 for each animal). However, to make this work as a chart we’ll need to assign each animal an “ACV range” as it’s unlikely you’re charging your customers exactly, $100, $1,000, $10,000, etc. per year. I attempted to assign ranges that felt reasonable. So, I came up with these translations. It’s not an exact science but this gives us a good place to start and you can always tweak it for your business. I made the starting threshold for Whale quite a lot smaller than $1M ACV so more businesses perhaps have a chance to actually win some whales :) The reason for including the MRR range in the above table is for this next stage. ChartMogul doesn’t have a way to filter by ACV so we convert ACV to MRR by dividing by 12. Building your animals chart The next step is to navigate to the ARR chart and click the “New segment” button 4 times. You should now have 5 segments open. Then create the following segment configuration: Click this link to auto-create the above so you don’t need to do a lot of clicking. (pro-tip: I got these non-standard colors by editing the URL directly) Then we save the segments: Including emoji in the segment names is very important. Now you can navigate around the various default charts, ARR, Subscribers, Customer Churn Rate, Net MRR Churn rate and the segments should persist as you navigate. What we discovered Below is our ARR chart sliced by animal (sorry I removed the Y-axis labels). On seeing this chart a few key things became clear to us We’re no longer hunting mice, most of these accounts were transitioned onto our Free Launch plan and don’t show up in an ARR report. We make the vast majority of our revenues from rabbits and deer, and now have a few elephants too. As most growth is coming from deer (and elephants) these are the animals that are probably going to bring us our future growth. But that doesn’t mean we shouldn’t focus on smaller animals. After all, in SaaS, thanks to it’s compounding nature. It’s often just a matter of time before a rabbit becomes a deer ;-) One more thing For those signing up for a new free trial of ChartMogul, we’ve gone ahead and pre-loaded this chart into your default set of custom charts. Existing customers will need to build this chart by hand, but we hope the above instructions give you a head start.

<sys> [INST] 🐻 Find out which animal(s) you’re hunting [/INST] Before we get started let’s just make clear that no-one is interested in actually hunting any of these wonderful animals ;) Before reading further I do recommend skimming Christoph’s most recent blog post on the subject. As people who run subscription businesses we all like making money. But not everyone is on a trajectory to get to $100M in the next few years. However, this doesn’t mean the animals analogy can’t be a useful tool for understanding your business. And perhaps helping you lift your ARR growth angle so it is on a path to reach $100M. I recently got to thinking about which animals we are hunting at ChartMogul, which led me to try and answer this question using ChartMogul. To build out these charts in ChartMogul I started by creating 5 segments (1 for each animal). However, to make this work as a chart we’ll need to assign each animal an “ACV range” as it’s unlikely you’re charging your customers exactly, $100, $1,000, $10,000, etc. per year. I attempted to assign ranges that felt reasonable. So, I came up with these translations. It’s not an exact science but this gives us a good place to start and you can always tweak it for your business. I made the starting threshold for Whale quite a lot smaller than $1M ACV so more businesses perhaps have a chance to actually win some whales :) The reason for including the MRR range in the above table is for this next stage. ChartMogul doesn’t have a way to filter by ACV so we convert ACV to MRR by dividing by 12. Building your animals chart The next step is to navigate to the ARR chart and click the “New segment” button 4 times. You should now have 5 segments open. Then create the following segment configuration: Click this link to auto-create the above so you don’t need to do a lot of clicking. (pro-tip: I got these non-standard colors by editing the URL directly) Then we save the segments: Including emoji in the segment names is very important. Now you can navigate around the various default charts, ARR, Subscribers, Customer Churn Rate, Net MRR Churn rate and the segments should persist as you navigate. What we discovered Below is our ARR chart sliced by animal (sorry I removed the Y-axis labels). On seeing this chart a few key things became clear to us We’re no longer hunting mice, most of these accounts were transitioned onto our Free Launch plan and don’t show up in an ARR report. We make the vast majority of our revenues from rabbits and deer, and now have a few elephants too. As most growth is coming from deer (and elephants) these are the animals that are probably going to bring us our future growth. But that doesn’t mean we shouldn’t focus on smaller animals. After all, in SaaS, thanks to it’s compounding nature. It’s often just a matter of time before a rabbit becomes a deer ;-) One more thing For those signing up for a new free trial of ChartMogul, we’ve gone ahead and pre-loaded this chart into your default set of custom charts. Existing customers will need to build this chart by hand, but we hope the above instructions give you a head start. </sys

Alex MacCaw on Stripe’s success, API products & founding Clearbit. Alex MacCaw and his Co-Founders are innovating in an emerging space for SaaS businesses – one that looks set to grow significantly in the next couple of years. This new breed of SaaS product is one without a user interface – you interact with the service through an API, which any business can easily integrate into the business logic of their product. Clearbit is essentially a building block, where the true value is in the data consumed. During our chat, I wanted to understand how Alex approached some of the challenges and opportunities presented in building such a business. As well as his current role of CEO at Clearbit, Alex has an fascinating history in the tech community, where he’s spent years writing code for the likes of Stripe, winning a book deal with O’Reilly – and then spending the following months travelling the world to write the book – as well as writing and building a loyal audience within the developer community through his blog and other mediums. I hope you get as much from this discussion as I did! You can listen to the full conversation below, or find it in the usual places on our SoundCloud or iTunes accounts. Enjoy!

[INST] Alex MacCaw on Stripe’s success, API products & founding Clearbit [/INST]

Alex MacCaw and his Co-Founders are innovating in an emerging space for SaaS businesses – one that looks set to grow significantly in the next couple of years. This new breed of SaaS product is one without a user interface – you interact with the service through an API, which any business can easily integrate into the business logic of their product. Clearbit is essentially a building block, where the true value is in the data consumed. During our chat, I wanted to understand how Alex approached some of the challenges and opportunities presented in building such a business. As well as his current role of CEO at Clearbit, Alex has an fascinating history in the tech community, where he’s spent years writing code for the likes of Stripe, winning a book deal with O’Reilly – and then spending the following months travelling the world to write the book – as well as writing and building a loyal audience within the developer community through his blog and other mediums. I hope you get as much from this discussion as I did! You can listen to the full conversation below, or find it in the usual places on our SoundCloud or iTunes accounts. Enjoy!

<sys> [INST] Alex MacCaw on Stripe’s success, API products & founding Clearbit [/INST] Alex MacCaw and his Co-Founders are innovating in an emerging space for SaaS businesses – one that looks set to grow significantly in the next couple of years. This new breed of SaaS product is one without a user interface – you interact with the service through an API, which any business can easily integrate into the business logic of their product. Clearbit is essentially a building block, where the true value is in the data consumed. During our chat, I wanted to understand how Alex approached some of the challenges and opportunities presented in building such a business. As well as his current role of CEO at Clearbit, Alex has an fascinating history in the tech community, where he’s spent years writing code for the likes of Stripe, winning a book deal with O’Reilly – and then spending the following months travelling the world to write the book – as well as writing and building a loyal audience within the developer community through his blog and other mediums. I hope you get as much from this discussion as I did! You can listen to the full conversation below, or find it in the usual places on our SoundCloud or iTunes accounts. Enjoy! </sys

Making Customer Feedback Your Next Big Superpower. Is there a bigger pain than when you get hit with a pop-up, asking for your honest feedback, while you’re trying to do a bank transfer? Probably not, but how would a business know if its messaging, product offers, and evolution are on the right path? Collecting feedback is an integral way to do this and doing it the right way is imperative. With feedback, brands that are doing well can find out what they are doing right, and how they can improve even further. Alternatively, companies that aren’t doing so well can figure out what they are doing wrong and how they can fix it. That being said, there are certain guidelines to keep in mind and follow when collecting feedback. For this reason, we have prepared a guide with some best practices, based on what we’ve seen over the last 7 years collecting feedback. We want to get your customers’ voices heard within your organization, and ultimately allow for feedback-driven products to become the norm for your company. First thing’s first: Know that we just don’t know Many brands invest a lot in their businesses believing that they have created an ideal experience for their customers from the get-go. The focus on their game-changing idea or experience can be a blindspot, and the lack of customer interest often validates this when it is too late. For example, even Apple (the largest private company in the world) had to listen to their customers and change their MacBook’s butterfly keyboard design. Better to be humble, and accept the fact that you don’t know everything about your users. That will enable you to be open-minded enough to make the required changes to improve the customer experience when it becomes obvious you need to do so. Feedback-driven businesses do well in the long-run, as compared to the ones that don’t listen to what their users are saying. Identify what feedback matters most Equally important as the “yes to feedback” mindset, it is also relevant and important to know where you need to collect customer feedback. Where do you think your bottlenecks are, and what do you intend to achieve by collecting feedback on that topic? Importantly, ask these questions upfront to yourself and your team, and get the most out of your feedback. Use your existing tech stack to identify where getting customer feedback would make the most sense. For example, we collected feedback from our customers and found out that they wanted to request features from us. What better way to do that than creating a feature request collector so they can let us know what’s most important, and we can have all of that information in one place? Coming up with a plan which allows you to gather accurate and insightful information about the right aspects of your business can turn challenges into solutions. Feedback: simply start asking for it Businesses that ask for feedback perform better, so says the businesses themselves. According to Barclays, 85% of SMEs say that online customer feedback has been beneficial to their business. This is the script we’ve seen: when the experience a company creates is according to expectations, customers don’t go out of their way to say anything about it unless your brand has done something truly exceptional. However, the customers who neither see the value you provide nor feel valued will tell you, but indirectly via a poor review on a comparison website. In general, 96% of unhappy customers won’t complain to you, but don’t mind running off and telling more than a handful of their friends about their experience. Further, if the experience is truly a bad one, your company’s name will appear on a review site with a big thumbs down. For this reason alone, it makes sense to actively solicit feedback from your customers. This way, you can jump out in front of bad experiences, and rectify them before they truly turn sour. Be active and let your customers tell you their thoughts internally and in advance. Inspire your team to believe in feedback Very often we see cases where management attempts to seriously address their customers’ issues, but that message isn’t echoing through the halls of the company. This usually happens when your company’s employees aren’t aligned with your vision. When devising a feedback collection strategy for whatever purpose, ask your team if they believe in the importance of feedback. If they don’t, how can you expect them to take it seriously when it comes from a customer? For example, when launching a brand new product, test it with colleagues before launching it to the world. If it helps, take your team through interactive exercises, where they play the role of customers, and provide honest feedback about a product or customer experience. At Usersnap, we do this for every project; whether it’s Alpha & Beta Testing or Usability testing, we recognize that we have to get the team involved to put their customer goggles on, even for 10 to 15 minutes. This provides a lot of value in improving the project, and also in fostering a feedback culture. Identify ambassadors you can count on Every business has those loyal customers who stick to the brand, no matter what. They share your vision, and this is awesome. These are the people who are fully aware of ins and outs of the overall customer experience you deliver, your product’s features, and the areas where you lack. We help identify our brand ambassadors notably through Net Promoter Score (NPS). Not only can customers let us know how likely they’d be to promote your product, but also give you a sense of where you could improve further. Once you have identified who your brand ambassadors are, get them involved and make them feel included. This incentivizes them so they feel more enthusiastic and provide their honest feedback. You can find out about their preferences, what they like and dislike, the value they’d want to take advantage of, and in what areas they’d like you to improve. Finally, you can close the customer feedback loop with them and follow-up with gusto. You can tell them “Hey! We took your advice and built this new feature. Want to check it out?” By doing so, another feedback loop can begin, and you’ll be that much closer to integrating the customer’s voice into your products. Patience, once said a Zen master One of the most important things to remember is that customer feedback collection and reputation management are both long-term endeavors. Although getting results within a few weeks is ambitious, it is better to be realistic, as you will need to accumulate enough quality data to determine actionable insights. While waiting, determine where you can improve your method and feedback collection strategy. Sometimes certain methods work better than others with a particular target audience. Also, drill down to the questions that you’re asking and if they help you get the right user feedback. You can tinker with your messaging, timing, and ultimately what you ask of customers or users when you start to notice that the feedback isn’t useful. In the meantime, it will take a few months for you to get the sheer number of feedback items, and also to streamline and put together a seamless feedback collection method that will put your company on the path to success. Identify what’s actionable & what isn’t People are different and every customer isn’t the same. On the same note, every one of them could have different expectations. This is the exact reason why you’ll need to single out the feedback that delivers value and insight. At Usersnap, we often get customer feedback that simply tells us that the product was “good” or “bad”, that doesn’t really help us. You can probably use it to accumulate quantitative data but it doesn’t tell you anything specific about your product. Why was it good? Or what made it bad? Find customer feedback with specific or detailed reasons why they liked, disliked, or provided a suggestion to a certain aspect of their experience or product. This sort of customer feedback is what we at Usersnap like to call actionable. From there, test and validate a piece of customer feedback instead of just running with it all the way off the cliff. A Usersnap example of this is a landing page we built dedicated to UX researchers, all based on feedback, research, and prototyping. Before going into the heavy development of this offer, the landing page serves to validate a simple question “are we on the right track?” In short, wait for the moment to have enough customer feedback to ascertain that a particular aspect of your product requires action, and then pounce! (But do so strategically.) But wait: how to select what’s actionable & what isn’t? Many times it is difficult to identify which feedback provides valuable insights, and which feedback should be ignored. Here are a few pointers that will help you identify actionable feedback. Let trends & patterns emerge When you are not sure about what is actionable and what isn’t, especially when you are early in your feedback collection cycle, simply wait and collect corroborative feedback. Use a statistics dashboard to see how many people in total are giving you customer feedback, and drill down from there. Frequency yes, but also understand why Try to identify the common issues that most people are talking about. Also, note their sentiment and the manner in which they express their frustration. The intensity of their feelings points towards issues that your brand can address. The intent behind the feedback As we have already mentioned, you are not going to please everyone (we certainly do not). This is why it is important to know whose feedback is important. If you’re getting customer feedback, emotionally charged but without reasoning, think twice about how important it is. Furthermore, double-check and make sure that the people who are providing feedback match the persona of your target audience. If someone who isn’t your target audience writes some scathing feedback, maybe their opinion isn’t as valuable as another’s within the context of your business objectives. Process the feedback & identify pain points The major burden on any business’s shoulders is to weigh that customer feedback and take all data in to make sense of it. Once you’ve made sense of the trends and patterns that have emerged prepare a list of all the pain points. Also, prioritise them according to their severity as well as your current team circumstances so you can address all the issues in a timely manner. There will be issues that are quite obvious — for instance, a button not working — while others will be more complex and nuanced. Unleashing the Power of Customer Feedback If you are a modern digital business not yet collecting feedback from your customers, we don’t want you to risk losing ground to your competition. You can create a robust feedback collection strategy and deploy the best industry practices so your brand is in a better position to understand customers and deliver inclusive, high-performing, and reliable customer experiences across your websites and apps. About the author: Josef is an agile software development specialist, with a deep background in computer science. He has been a thriving entrepreneur since 2006, having built software that handled 300 million page requests per month. Josef is one of the original founders of Usersnap and has a keen eye for spotting new trends and needs on the software horizon. He has experience in the most critical stages of a company’s journey when starting a SaaS product from the ground up. Josef is passionate when finding solutions and building the right product to improve others’ businesses.

[INST] Making Customer Feedback Your Next Big Superpower [/INST]

Is there a bigger pain than when you get hit with a pop-up, asking for your honest feedback, while you’re trying to do a bank transfer? Probably not, but how would a business know if its messaging, product offers, and evolution are on the right path? Collecting feedback is an integral way to do this and doing it the right way is imperative. With feedback, brands that are doing well can find out what they are doing right, and how they can improve even further. Alternatively, companies that aren’t doing so well can figure out what they are doing wrong and how they can fix it. That being said, there are certain guidelines to keep in mind and follow when collecting feedback. For this reason, we have prepared a guide with some best practices, based on what we’ve seen over the last 7 years collecting feedback. We want to get your customers’ voices heard within your organization, and ultimately allow for feedback-driven products to become the norm for your company. First thing’s first: Know that we just don’t know Many brands invest a lot in their businesses believing that they have created an ideal experience for their customers from the get-go. The focus on their game-changing idea or experience can be a blindspot, and the lack of customer interest often validates this when it is too late. For example, even Apple (the largest private company in the world) had to listen to their customers and change their MacBook’s butterfly keyboard design. Better to be humble, and accept the fact that you don’t know everything about your users. That will enable you to be open-minded enough to make the required changes to improve the customer experience when it becomes obvious you need to do so. Feedback-driven businesses do well in the long-run, as compared to the ones that don’t listen to what their users are saying. Identify what feedback matters most Equally important as the “yes to feedback” mindset, it is also relevant and important to know where you need to collect customer feedback. Where do you think your bottlenecks are, and what do you intend to achieve by collecting feedback on that topic? Importantly, ask these questions upfront to yourself and your team, and get the most out of your feedback. Use your existing tech stack to identify where getting customer feedback would make the most sense. For example, we collected feedback from our customers and found out that they wanted to request features from us. What better way to do that than creating a feature request collector so they can let us know what’s most important, and we can have all of that information in one place? Coming up with a plan which allows you to gather accurate and insightful information about the right aspects of your business can turn challenges into solutions. Feedback: simply start asking for it Businesses that ask for feedback perform better, so says the businesses themselves. According to Barclays, 85% of SMEs say that online customer feedback has been beneficial to their business. This is the script we’ve seen: when the experience a company creates is according to expectations, customers don’t go out of their way to say anything about it unless your brand has done something truly exceptional. However, the customers who neither see the value you provide nor feel valued will tell you, but indirectly via a poor review on a comparison website. In general, 96% of unhappy customers won’t complain to you, but don’t mind running off and telling more than a handful of their friends about their experience. Further, if the experience is truly a bad one, your company’s name will appear on a review site with a big thumbs down. For this reason alone, it makes sense to actively solicit feedback from your customers. This way, you can jump out in front of bad experiences, and rectify them before they truly turn sour. Be active and let your customers tell you their thoughts internally and in advance. Inspire your team to believe in feedback Very often we see cases where management attempts to seriously address their customers’ issues, but that message isn’t echoing through the halls of the company. This usually happens when your company’s employees aren’t aligned with your vision. When devising a feedback collection strategy for whatever purpose, ask your team if they believe in the importance of feedback. If they don’t, how can you expect them to take it seriously when it comes from a customer? For example, when launching a brand new product, test it with colleagues before launching it to the world. If it helps, take your team through interactive exercises, where they play the role of customers, and provide honest feedback about a product or customer experience. At Usersnap, we do this for every project; whether it’s Alpha & Beta Testing or Usability testing, we recognize that we have to get the team involved to put their customer goggles on, even for 10 to 15 minutes. This provides a lot of value in improving the project, and also in fostering a feedback culture. Identify ambassadors you can count on Every business has those loyal customers who stick to the brand, no matter what. They share your vision, and this is awesome. These are the people who are fully aware of ins and outs of the overall customer experience you deliver, your product’s features, and the areas where you lack. We help identify our brand ambassadors notably through Net Promoter Score (NPS). Not only can customers let us know how likely they’d be to promote your product, but also give you a sense of where you could improve further. Once you have identified who your brand ambassadors are, get them involved and make them feel included. This incentivizes them so they feel more enthusiastic and provide their honest feedback. You can find out about their preferences, what they like and dislike, the value they’d want to take advantage of, and in what areas they’d like you to improve. Finally, you can close the customer feedback loop with them and follow-up with gusto. You can tell them “Hey! We took your advice and built this new feature. Want to check it out?” By doing so, another feedback loop can begin, and you’ll be that much closer to integrating the customer’s voice into your products. Patience, once said a Zen master One of the most important things to remember is that customer feedback collection and reputation management are both long-term endeavors. Although getting results within a few weeks is ambitious, it is better to be realistic, as you will need to accumulate enough quality data to determine actionable insights. While waiting, determine where you can improve your method and feedback collection strategy. Sometimes certain methods work better than others with a particular target audience. Also, drill down to the questions that you’re asking and if they help you get the right user feedback. You can tinker with your messaging, timing, and ultimately what you ask of customers or users when you start to notice that the feedback isn’t useful. In the meantime, it will take a few months for you to get the sheer number of feedback items, and also to streamline and put together a seamless feedback collection method that will put your company on the path to success. Identify what’s actionable & what isn’t People are different and every customer isn’t the same. On the same note, every one of them could have different expectations. This is the exact reason why you’ll need to single out the feedback that delivers value and insight. At Usersnap, we often get customer feedback that simply tells us that the product was “good” or “bad”, that doesn’t really help us. You can probably use it to accumulate quantitative data but it doesn’t tell you anything specific about your product. Why was it good? Or what made it bad? Find customer feedback with specific or detailed reasons why they liked, disliked, or provided a suggestion to a certain aspect of their experience or product. This sort of customer feedback is what we at Usersnap like to call actionable. From there, test and validate a piece of customer feedback instead of just running with it all the way off the cliff. A Usersnap example of this is a landing page we built dedicated to UX researchers, all based on feedback, research, and prototyping. Before going into the heavy development of this offer, the landing page serves to validate a simple question “are we on the right track?” In short, wait for the moment to have enough customer feedback to ascertain that a particular aspect of your product requires action, and then pounce! (But do so strategically.) But wait: how to select what’s actionable & what isn’t? Many times it is difficult to identify which feedback provides valuable insights, and which feedback should be ignored. Here are a few pointers that will help you identify actionable feedback. Let trends & patterns emerge When you are not sure about what is actionable and what isn’t, especially when you are early in your feedback collection cycle, simply wait and collect corroborative feedback. Use a statistics dashboard to see how many people in total are giving you customer feedback, and drill down from there. Frequency yes, but also understand why Try to identify the common issues that most people are talking about. Also, note their sentiment and the manner in which they express their frustration. The intensity of their feelings points towards issues that your brand can address. The intent behind the feedback As we have already mentioned, you are not going to please everyone (we certainly do not). This is why it is important to know whose feedback is important. If you’re getting customer feedback, emotionally charged but without reasoning, think twice about how important it is. Furthermore, double-check and make sure that the people who are providing feedback match the persona of your target audience. If someone who isn’t your target audience writes some scathing feedback, maybe their opinion isn’t as valuable as another’s within the context of your business objectives. Process the feedback & identify pain points The major burden on any business’s shoulders is to weigh that customer feedback and take all data in to make sense of it. Once you’ve made sense of the trends and patterns that have emerged prepare a list of all the pain points. Also, prioritise them according to their severity as well as your current team circumstances so you can address all the issues in a timely manner. There will be issues that are quite obvious — for instance, a button not working — while others will be more complex and nuanced. Unleashing the Power of Customer Feedback If you are a modern digital business not yet collecting feedback from your customers, we don’t want you to risk losing ground to your competition. You can create a robust feedback collection strategy and deploy the best industry practices so your brand is in a better position to understand customers and deliver inclusive, high-performing, and reliable customer experiences across your websites and apps. About the author: Josef is an agile software development specialist, with a deep background in computer science. He has been a thriving entrepreneur since 2006, having built software that handled 300 million page requests per month. Josef is one of the original founders of Usersnap and has a keen eye for spotting new trends and needs on the software horizon. He has experience in the most critical stages of a company’s journey when starting a SaaS product from the ground up. Josef is passionate when finding solutions and building the right product to improve others’ businesses.

<sys> [INST] Making Customer Feedback Your Next Big Superpower [/INST] Is there a bigger pain than when you get hit with a pop-up, asking for your honest feedback, while you’re trying to do a bank transfer? Probably not, but how would a business know if its messaging, product offers, and evolution are on the right path? Collecting feedback is an integral way to do this and doing it the right way is imperative. With feedback, brands that are doing well can find out what they are doing right, and how they can improve even further. Alternatively, companies that aren’t doing so well can figure out what they are doing wrong and how they can fix it. That being said, there are certain guidelines to keep in mind and follow when collecting feedback. For this reason, we have prepared a guide with some best practices, based on what we’ve seen over the last 7 years collecting feedback. We want to get your customers’ voices heard within your organization, and ultimately allow for feedback-driven products to become the norm for your company. First thing’s first: Know that we just don’t know Many brands invest a lot in their businesses believing that they have created an ideal experience for their customers from the get-go. The focus on their game-changing idea or experience can be a blindspot, and the lack of customer interest often validates this when it is too late. For example, even Apple (the largest private company in the world) had to listen to their customers and change their MacBook’s butterfly keyboard design. Better to be humble, and accept the fact that you don’t know everything about your users. That will enable you to be open-minded enough to make the required changes to improve the customer experience when it becomes obvious you need to do so. Feedback-driven businesses do well in the long-run, as compared to the ones that don’t listen to what their users are saying. Identify what feedback matters most Equally important as the “yes to feedback” mindset, it is also relevant and important to know where you need to collect customer feedback. Where do you think your bottlenecks are, and what do you intend to achieve by collecting feedback on that topic? Importantly, ask these questions upfront to yourself and your team, and get the most out of your feedback. Use your existing tech stack to identify where getting customer feedback would make the most sense. For example, we collected feedback from our customers and found out that they wanted to request features from us. What better way to do that than creating a feature request collector so they can let us know what’s most important, and we can have all of that information in one place? Coming up with a plan which allows you to gather accurate and insightful information about the right aspects of your business can turn challenges into solutions. Feedback: simply start asking for it Businesses that ask for feedback perform better, so says the businesses themselves. According to Barclays, 85% of SMEs say that online customer feedback has been beneficial to their business. This is the script we’ve seen: when the experience a company creates is according to expectations, customers don’t go out of their way to say anything about it unless your brand has done something truly exceptional. However, the customers who neither see the value you provide nor feel valued will tell you, but indirectly via a poor review on a comparison website. In general, 96% of unhappy customers won’t complain to you, but don’t mind running off and telling more than a handful of their friends about their experience. Further, if the experience is truly a bad one, your company’s name will appear on a review site with a big thumbs down. For this reason alone, it makes sense to actively solicit feedback from your customers. This way, you can jump out in front of bad experiences, and rectify them before they truly turn sour. Be active and let your customers tell you their thoughts internally and in advance. Inspire your team to believe in feedback Very often we see cases where management attempts to seriously address their customers’ issues, but that message isn’t echoing through the halls of the company. This usually happens when your company’s employees aren’t aligned with your vision. When devising a feedback collection strategy for whatever purpose, ask your team if they believe in the importance of feedback. If they don’t, how can you expect them to take it seriously when it comes from a customer? For example, when launching a brand new product, test it with colleagues before launching it to the world. If it helps, take your team through interactive exercises, where they play the role of customers, and provide honest feedback about a product or customer experience. At Usersnap, we do this for every project; whether it’s Alpha & Beta Testing or Usability testing, we recognize that we have to get the team involved to put their customer goggles on, even for 10 to 15 minutes. This provides a lot of value in improving the project, and also in fostering a feedback culture. Identify ambassadors you can count on Every business has those loyal customers who stick to the brand, no matter what. They share your vision, and this is awesome. These are the people who are fully aware of ins and outs of the overall customer experience you deliver, your product’s features, and the areas where you lack. We help identify our brand ambassadors notably through Net Promoter Score (NPS). Not only can customers let us know how likely they’d be to promote your product, but also give you a sense of where you could improve further. Once you have identified who your brand ambassadors are, get them involved and make them feel included. This incentivizes them so they feel more enthusiastic and provide their honest feedback. You can find out about their preferences, what they like and dislike, the value they’d want to take advantage of, and in what areas they’d like you to improve. Finally, you can close the customer feedback loop with them and follow-up with gusto. You can tell them “Hey! We took your advice and built this new feature. Want to check it out?” By doing so, another feedback loop can begin, and you’ll be that much closer to integrating the customer’s voice into your products. Patience, once said a Zen master One of the most important things to remember is that customer feedback collection and reputation management are both long-term endeavors. Although getting results within a few weeks is ambitious, it is better to be realistic, as you will need to accumulate enough quality data to determine actionable insights. While waiting, determine where you can improve your method and feedback collection strategy. Sometimes certain methods work better than others with a particular target audience. Also, drill down to the questions that you’re asking and if they help you get the right user feedback. You can tinker with your messaging, timing, and ultimately what you ask of customers or users when you start to notice that the feedback isn’t useful. In the meantime, it will take a few months for you to get the sheer number of feedback items, and also to streamline and put together a seamless feedback collection method that will put your company on the path to success. Identify what’s actionable & what isn’t People are different and every customer isn’t the same. On the same note, every one of them could have different expectations. This is the exact reason why you’ll need to single out the feedback that delivers value and insight. At Usersnap, we often get customer feedback that simply tells us that the product was “good” or “bad”, that doesn’t really help us. You can probably use it to accumulate quantitative data but it doesn’t tell you anything specific about your product. Why was it good? Or what made it bad? Find customer feedback with specific or detailed reasons why they liked, disliked, or provided a suggestion to a certain aspect of their experience or product. This sort of customer feedback is what we at Usersnap like to call actionable. From there, test and validate a piece of customer feedback instead of just running with it all the way off the cliff. A Usersnap example of this is a landing page we built dedicated to UX researchers, all based on feedback, research, and prototyping. Before going into the heavy development of this offer, the landing page serves to validate a simple question “are we on the right track?” In short, wait for the moment to have enough customer feedback to ascertain that a particular aspect of your product requires action, and then pounce! (But do so strategically.) But wait: how to select what’s actionable & what isn’t? Many times it is difficult to identify which feedback provides valuable insights, and which feedback should be ignored. Here are a few pointers that will help you identify actionable feedback. Let trends & patterns emerge When you are not sure about what is actionable and what isn’t, especially when you are early in your feedback collection cycle, simply wait and collect corroborative feedback. Use a statistics dashboard to see how many people in total are giving you customer feedback, and drill down from there. Frequency yes, but also understand why Try to identify the common issues that most people are talking about. Also, note their sentiment and the manner in which they express their frustration. The intensity of their feelings points towards issues that your brand can address. The intent behind the feedback As we have already mentioned, you are not going to please everyone (we certainly do not). This is why it is important to know whose feedback is important. If you’re getting customer feedback, emotionally charged but without reasoning, think twice about how important it is. Furthermore, double-check and make sure that the people who are providing feedback match the persona of your target audience. If someone who isn’t your target audience writes some scathing feedback, maybe their opinion isn’t as valuable as another’s within the context of your business objectives. Process the feedback & identify pain points The major burden on any business’s shoulders is to weigh that customer feedback and take all data in to make sense of it. Once you’ve made sense of the trends and patterns that have emerged prepare a list of all the pain points. Also, prioritise them according to their severity as well as your current team circumstances so you can address all the issues in a timely manner. There will be issues that are quite obvious — for instance, a button not working — while others will be more complex and nuanced. Unleashing the Power of Customer Feedback If you are a modern digital business not yet collecting feedback from your customers, we don’t want you to risk losing ground to your competition. You can create a robust feedback collection strategy and deploy the best industry practices so your brand is in a better position to understand customers and deliver inclusive, high-performing, and reliable customer experiences across your websites and apps. About the author: Josef is an agile software development specialist, with a deep background in computer science. He has been a thriving entrepreneur since 2006, having built software that handled 300 million page requests per month. Josef is one of the original founders of Usersnap and has a keen eye for spotting new trends and needs on the software horizon. He has experience in the most critical stages of a company’s journey when starting a SaaS product from the ground up. Josef is passionate when finding solutions and building the right product to improve others’ businesses. </sys

What Type of SaaS Are You Building?. A glance at The Martech Landscape graphic is enough to understand how competitive SaaS has become: Source (It’s the Martech 8000 in its latest edition.) But if we look at how that diagram has evolved over the past 10 years, we’ll see that it’s grown from ~150 companies to today’s staggering number: Source At every step, the prevailing opinion has been that the industry has become too competitive. That it’s too hard, impossible even, to break into anymore — without some killer new technology or similarly significant advantage. Yet, every year we’ve seen new companies emerge and carve out a place for themselves without having to rely on a buzzword technology like AI or Blockchain. These companies typically achieve breakthrough success by relying on one of the following approaches: They pick a niche that’s currently underserved by a large incumbent and provide a better solution to the problem this niche audience is facing; They create a new category (or redefine an existing one) and capture a broad audience. Both approaches can support the creation of a successful SaaS business. We see it in the comparison between Intercom ($150m in ARR) and Drift (valued at $360m at their latest funding round): Intercom (founded in 2011) was one of the first companies to offer live on-site chat going after a broad audience of companies and teams. Drift started 4 years later with a similar product offer but focussed intensely on marketing teams as their (initial) core audience. So how do new SaaS companies choose which route to pursue? They have to decide whether to go for a niche or broad audience along 2 vectors — industry and department. At ChartMogul, we think about this as a 2×2 matrix, which we call the SaaS Types Matrix. Introducing the SaaS Types Matrix SaaS companies start with a solution to a problem. One of the first decisions a founding team needs to make is whether their solution is aimed only at a particular industry and/or department. This gives us 4 possible categories or types of SaaS companies: Super-niche: Those that go after a specific team/department within a particular industry. An example of this would be Veeva, which produces CRM software for the pharma industry. Industry-niche: The second example covers companies building software that every department in a specific industry can use. We put ChartMogul in this category (for Subscriptions), but another great example is Clio, which goes after lawyers and everyone who works in the Legal industry. Department-niche: The next category captures companies that go after a specific team/department(s), regardless of the industry they operate in. Companies like Salesforce (sales) and Zendesk (support) demonstrate the market opportunity such niches generate. Broad: Finally, we have companies that have neither industry nor departmental focus. Here, we find the biggest names in SaaS and some of the fastest-growing companies — such as Slack, Notion, Pitch, and Calendly. Why is this helpful? Knowing where you stand within this matrix is essential when working on a new SaaS product. Picking the most appropriate type of SaaS to build will help you figure out a range of important product and strategy decisions: Who are your early customers, and where do you find them? How can you expect to grow once you exhaust that initial opportunity/group of people? By expanding into other verticals or other teams (or both)? How important is it to build your product for product-led growth? This is especially relevant to companies that rely on winning large enterprises team by team (the way Slack is doing). Finding the right place on this matrix can help create a clear product vision, an essential first step to finding success in SaaS. How to figure out your position on the matrix Finding the exact place along the matrix that will allow you to capture a competitive position takes equal parts art and science. Here are some things you should explore to decide what type of SaaS business you should aim to build. Understand where the market currently stands We’ll go back to Drift because their growth provides a useful example for SaaS founders. They weren’t the first company to offer an on-site asynchronous messaging/bot functionality — Intercom was already growing very fast in that space. By redefining the category and targeting their product specifically at marketers, Drift established themselves as a viable competitor. Drift’s example should help you understand why you need to think about the quadrant where you want to be. It would be hard to capture market share with a generic support solution because Zendesk is already dominant in that category. But you might be able to find space by narrowing down and focusing on a single niche/team (or both). This is a strategy pursued by Kayako with their focus on ecommerce/DTC brands. It’s easy to say you need to identify opportunities like this, but much harder to spot them. One way to do this is by looking for opportunities to unbundle existing platforms. Source Going after a specific niche (or team) allows you to create a product that fulfills the needs in that niche in a much better way. Tweet this quote The result is that you can build a business that’s bigger even than the whole original platform. We see this with companies like Airbnb, which is at least double the size of Craigslist (estimated at a little over $1B in 2018 revenue) even after it got decimated by the pandemic. Nail down your positioning The positioning of new products is one of the most overlooked areas in SaaS. There’s hardly a territory where you have a combination between so much control and such an opportunity for impact early in your company’s lifetime. It is also strongly related to the point in the previous section — defining the market in a way that would allow you to create an opportunity for yourself. I highly recommend April Dunford’s excellent book on the topic as a starting point. (We recently shared an overview in The SaaS Roundup newsletter.) Source In any case, the most important takeaway from this is that you should craft a positioning that’s concurrent with the place you’ve chosen on our framework. That would maximize your chances for success. Make data your ally You don’t have to make decisions out of thin air when figuring out your niche and positioning. Data can help you make better decisions about these strategic questions even in your company’s early stages. Tweet this quote We consistently see the best performing startups rely on data from the very early days of the company. Even basic metrics can help you navigate these decisions better, for example: Metrics like Average Revenue per Account/User (ARPU) and Annual Contract Value (ACV) will tell you what part of the market you should be aiming for. Your Churn Rate can guide your search for product/market fit when you’re developing a new category. And this is just scratching the surface with what you can do with data. In case you need a little refresher on the basics, check out our SaaS Metrics Refresher email course. Does it even matter how many types of SaaS there are? On the surface, we can easily reject the need to deal with this question at all. Defining where you fall on the types-of-SaaS spectrum might seem like a matter of cosmetic importance. However, as I’ve tried to outline in this article, it’s a question, which carries essential strategic considerations for your business.

[INST] What Type of SaaS Are You Building? [/INST]

A glance at The Martech Landscape graphic is enough to understand how competitive SaaS has become: Source (It’s the Martech 8000 in its latest edition.) But if we look at how that diagram has evolved over the past 10 years, we’ll see that it’s grown from ~150 companies to today’s staggering number: Source At every step, the prevailing opinion has been that the industry has become too competitive. That it’s too hard, impossible even, to break into anymore — without some killer new technology or similarly significant advantage. Yet, every year we’ve seen new companies emerge and carve out a place for themselves without having to rely on a buzzword technology like AI or Blockchain. These companies typically achieve breakthrough success by relying on one of the following approaches: They pick a niche that’s currently underserved by a large incumbent and provide a better solution to the problem this niche audience is facing; They create a new category (or redefine an existing one) and capture a broad audience. Both approaches can support the creation of a successful SaaS business. We see it in the comparison between Intercom ($150m in ARR) and Drift (valued at $360m at their latest funding round): Intercom (founded in 2011) was one of the first companies to offer live on-site chat going after a broad audience of companies and teams. Drift started 4 years later with a similar product offer but focussed intensely on marketing teams as their (initial) core audience. So how do new SaaS companies choose which route to pursue? They have to decide whether to go for a niche or broad audience along 2 vectors — industry and department. At ChartMogul, we think about this as a 2×2 matrix, which we call the SaaS Types Matrix. Introducing the SaaS Types Matrix SaaS companies start with a solution to a problem. One of the first decisions a founding team needs to make is whether their solution is aimed only at a particular industry and/or department. This gives us 4 possible categories or types of SaaS companies: Super-niche: Those that go after a specific team/department within a particular industry. An example of this would be Veeva, which produces CRM software for the pharma industry. Industry-niche: The second example covers companies building software that every department in a specific industry can use. We put ChartMogul in this category (for Subscriptions), but another great example is Clio, which goes after lawyers and everyone who works in the Legal industry. Department-niche: The next category captures companies that go after a specific team/department(s), regardless of the industry they operate in. Companies like Salesforce (sales) and Zendesk (support) demonstrate the market opportunity such niches generate. Broad: Finally, we have companies that have neither industry nor departmental focus. Here, we find the biggest names in SaaS and some of the fastest-growing companies — such as Slack, Notion, Pitch, and Calendly. Why is this helpful? Knowing where you stand within this matrix is essential when working on a new SaaS product. Picking the most appropriate type of SaaS to build will help you figure out a range of important product and strategy decisions: Who are your early customers, and where do you find them? How can you expect to grow once you exhaust that initial opportunity/group of people? By expanding into other verticals or other teams (or both)? How important is it to build your product for product-led growth? This is especially relevant to companies that rely on winning large enterprises team by team (the way Slack is doing). Finding the right place on this matrix can help create a clear product vision, an essential first step to finding success in SaaS. How to figure out your position on the matrix Finding the exact place along the matrix that will allow you to capture a competitive position takes equal parts art and science. Here are some things you should explore to decide what type of SaaS business you should aim to build. Understand where the market currently stands We’ll go back to Drift because their growth provides a useful example for SaaS founders. They weren’t the first company to offer an on-site asynchronous messaging/bot functionality — Intercom was already growing very fast in that space. By redefining the category and targeting their product specifically at marketers, Drift established themselves as a viable competitor. Drift’s example should help you understand why you need to think about the quadrant where you want to be. It would be hard to capture market share with a generic support solution because Zendesk is already dominant in that category. But you might be able to find space by narrowing down and focusing on a single niche/team (or both). This is a strategy pursued by Kayako with their focus on ecommerce/DTC brands. It’s easy to say you need to identify opportunities like this, but much harder to spot them. One way to do this is by looking for opportunities to unbundle existing platforms. Source Going after a specific niche (or team) allows you to create a product that fulfills the needs in that niche in a much better way. Tweet this quote The result is that you can build a business that’s bigger even than the whole original platform. We see this with companies like Airbnb, which is at least double the size of Craigslist (estimated at a little over $1B in 2018 revenue) even after it got decimated by the pandemic. Nail down your positioning The positioning of new products is one of the most overlooked areas in SaaS. There’s hardly a territory where you have a combination between so much control and such an opportunity for impact early in your company’s lifetime. It is also strongly related to the point in the previous section — defining the market in a way that would allow you to create an opportunity for yourself. I highly recommend April Dunford’s excellent book on the topic as a starting point. (We recently shared an overview in The SaaS Roundup newsletter.) Source In any case, the most important takeaway from this is that you should craft a positioning that’s concurrent with the place you’ve chosen on our framework. That would maximize your chances for success. Make data your ally You don’t have to make decisions out of thin air when figuring out your niche and positioning. Data can help you make better decisions about these strategic questions even in your company’s early stages. Tweet this quote We consistently see the best performing startups rely on data from the very early days of the company. Even basic metrics can help you navigate these decisions better, for example: Metrics like Average Revenue per Account/User (ARPU) and Annual Contract Value (ACV) will tell you what part of the market you should be aiming for. Your Churn Rate can guide your search for product/market fit when you’re developing a new category. And this is just scratching the surface with what you can do with data. In case you need a little refresher on the basics, check out our SaaS Metrics Refresher email course. Does it even matter how many types of SaaS there are? On the surface, we can easily reject the need to deal with this question at all. Defining where you fall on the types-of-SaaS spectrum might seem like a matter of cosmetic importance. However, as I’ve tried to outline in this article, it’s a question, which carries essential strategic considerations for your business.

<sys> [INST] What Type of SaaS Are You Building? [/INST] A glance at The Martech Landscape graphic is enough to understand how competitive SaaS has become: Source (It’s the Martech 8000 in its latest edition.) But if we look at how that diagram has evolved over the past 10 years, we’ll see that it’s grown from ~150 companies to today’s staggering number: Source At every step, the prevailing opinion has been that the industry has become too competitive. That it’s too hard, impossible even, to break into anymore — without some killer new technology or similarly significant advantage. Yet, every year we’ve seen new companies emerge and carve out a place for themselves without having to rely on a buzzword technology like AI or Blockchain. These companies typically achieve breakthrough success by relying on one of the following approaches: They pick a niche that’s currently underserved by a large incumbent and provide a better solution to the problem this niche audience is facing; They create a new category (or redefine an existing one) and capture a broad audience. Both approaches can support the creation of a successful SaaS business. We see it in the comparison between Intercom ($150m in ARR) and Drift (valued at $360m at their latest funding round): Intercom (founded in 2011) was one of the first companies to offer live on-site chat going after a broad audience of companies and teams. Drift started 4 years later with a similar product offer but focussed intensely on marketing teams as their (initial) core audience. So how do new SaaS companies choose which route to pursue? They have to decide whether to go for a niche or broad audience along 2 vectors — industry and department. At ChartMogul, we think about this as a 2×2 matrix, which we call the SaaS Types Matrix. Introducing the SaaS Types Matrix SaaS companies start with a solution to a problem. One of the first decisions a founding team needs to make is whether their solution is aimed only at a particular industry and/or department. This gives us 4 possible categories or types of SaaS companies: Super-niche: Those that go after a specific team/department within a particular industry. An example of this would be Veeva, which produces CRM software for the pharma industry. Industry-niche: The second example covers companies building software that every department in a specific industry can use. We put ChartMogul in this category (for Subscriptions), but another great example is Clio, which goes after lawyers and everyone who works in the Legal industry. Department-niche: The next category captures companies that go after a specific team/department(s), regardless of the industry they operate in. Companies like Salesforce (sales) and Zendesk (support) demonstrate the market opportunity such niches generate. Broad: Finally, we have companies that have neither industry nor departmental focus. Here, we find the biggest names in SaaS and some of the fastest-growing companies — such as Slack, Notion, Pitch, and Calendly. Why is this helpful? Knowing where you stand within this matrix is essential when working on a new SaaS product. Picking the most appropriate type of SaaS to build will help you figure out a range of important product and strategy decisions: Who are your early customers, and where do you find them? How can you expect to grow once you exhaust that initial opportunity/group of people? By expanding into other verticals or other teams (or both)? How important is it to build your product for product-led growth? This is especially relevant to companies that rely on winning large enterprises team by team (the way Slack is doing). Finding the right place on this matrix can help create a clear product vision, an essential first step to finding success in SaaS. How to figure out your position on the matrix Finding the exact place along the matrix that will allow you to capture a competitive position takes equal parts art and science. Here are some things you should explore to decide what type of SaaS business you should aim to build. Understand where the market currently stands We’ll go back to Drift because their growth provides a useful example for SaaS founders. They weren’t the first company to offer an on-site asynchronous messaging/bot functionality — Intercom was already growing very fast in that space. By redefining the category and targeting their product specifically at marketers, Drift established themselves as a viable competitor. Drift’s example should help you understand why you need to think about the quadrant where you want to be. It would be hard to capture market share with a generic support solution because Zendesk is already dominant in that category. But you might be able to find space by narrowing down and focusing on a single niche/team (or both). This is a strategy pursued by Kayako with their focus on ecommerce/DTC brands. It’s easy to say you need to identify opportunities like this, but much harder to spot them. One way to do this is by looking for opportunities to unbundle existing platforms. Source Going after a specific niche (or team) allows you to create a product that fulfills the needs in that niche in a much better way. Tweet this quote The result is that you can build a business that’s bigger even than the whole original platform. We see this with companies like Airbnb, which is at least double the size of Craigslist (estimated at a little over $1B in 2018 revenue) even after it got decimated by the pandemic. Nail down your positioning The positioning of new products is one of the most overlooked areas in SaaS. There’s hardly a territory where you have a combination between so much control and such an opportunity for impact early in your company’s lifetime. It is also strongly related to the point in the previous section — defining the market in a way that would allow you to create an opportunity for yourself. I highly recommend April Dunford’s excellent book on the topic as a starting point. (We recently shared an overview in The SaaS Roundup newsletter.) Source In any case, the most important takeaway from this is that you should craft a positioning that’s concurrent with the place you’ve chosen on our framework. That would maximize your chances for success. Make data your ally You don’t have to make decisions out of thin air when figuring out your niche and positioning. Data can help you make better decisions about these strategic questions even in your company’s early stages. Tweet this quote We consistently see the best performing startups rely on data from the very early days of the company. Even basic metrics can help you navigate these decisions better, for example: Metrics like Average Revenue per Account/User (ARPU) and Annual Contract Value (ACV) will tell you what part of the market you should be aiming for. Your Churn Rate can guide your search for product/market fit when you’re developing a new category. And this is just scratching the surface with what you can do with data. In case you need a little refresher on the basics, check out our SaaS Metrics Refresher email course. Does it even matter how many types of SaaS there are? On the surface, we can easily reject the need to deal with this question at all. Defining where you fall on the types-of-SaaS spectrum might seem like a matter of cosmetic importance. However, as I’ve tried to outline in this article, it’s a question, which carries essential strategic considerations for your business. </sys

This Downturn Is Different: How to Drive Retention and Mitigate Churn in 2023. In a downturn, priorities shift. Buyers start getting cautious. They stop purchasing new software and reevaluate their current spending. Naturally, this puts extra pressure on customer success. After all, it’s the customer success teams that drive growth through retention and churn mitigation. So, what’s the best way to drive retention and mitigate churn in 2023? We hosted a panel of customer success experts this month. We asked them for their strategies and tactics on how they mitigate churn in the short term and improve retention in the long term. María del Mar Mitjavila Bedmar of Ledgy, Parker Moore of Vitally, Mirana Dufour of Loomly, and Travis Todd of SaaSync shared the good, the bad, and the ugly of fighting churn in a challenging market. Six lessons in customer success to boost your retention Analyze your churn data for any patterns Identify who your best-fit customers are Extend your cash runway Develop a customer health score Build customer feedback loops Conduct exit interviews The Spotlight Is on Customer Success People have changed what they care about. Before, it was all about retaining talent and fighting in the talent world. And now it’s all about keeping that money in the bank and making sure that every investment you make actually pays off. – María del Mar Mitjavila Bedmar of Ledgy Customer success leaders have noticed that tech companies started getting more cautious and vigilant when it comes to spending. They are reevaluating their budgets, limiting how much they spend on software, and even cutting down their staff. The industry is expecting this trend to continue. As a result, businesses try to extend their runway and put even more focus on tracking ROI. A lot of the spotlight is on customer success and customer-facing teams to deliver value and demonstrate that value throughout the duration of the customer journey. – Parker Moore, Vitally For SaaS companies like Ledgy, Loomly, Vitally, and SaaSync, an economic downturn means that suddenly customers and prospects are much more sensitive to pricing. The task of customer success teams is to make sure customers are deriving value from the product and understand why it’s worth the investment. There are no shortcuts to improve retention, but our panelists shared a few pieces of advice that help them tackle churn. Analyze Your Churn Data for Any Patterns First of all, you need to understand churn to mitigate it. So look at past churn data and investigate where the problem area might be. Is it a customer success problem? Or a product shortfall? A positioning problem? Have some type of churn analysis in place to determine the reasoning for churn. And then with that, you’re able to uncover what processes are broken. It also gives you some direction on what cross-functional teams you may need to work with. – Parker Customer success teams need to determine which inputs or product events are consistent between customers that churn to mitigate it. However, our panelists advise avoiding getting distracted by wrong-fit customers. A few years ago at ChartMogul, we lost many legacy customers when migrating them to a new pricing model. However, the highly engaged good-fit customers enabled ChartMogul’s continued growth. Read our pricing migration story. Identify Who Your Best-Fit Customers Are Luckily, it’s also the role of customer success teams to learn which events and characteristics drive best-fit customers. Understand what brings value to your customer, and track that. And make sure that whatever place you have, whether it is onboarding or adoption, you configure your customer journey towards that value and towards helping your customer. – María del Mar Make sure your customers have a clear path to success when using your product and derive value from it at each step of the journey. Extend Your Cash Runway In an economic crisis, securing cash flow is an immediate reaction for many SaaS companies. You can try several practices to guarantee revenue: experimenting with reactivation campaigns, offering trial extensions, or moving customers to yearly contracts at a discounted price. For our business, it’s better to have a yearly subscriber than a monthly one. It’s less risky. So we do sometimes try to incentivize them to upgrade to a yearly plan by offering a discount that will be available for seven days. (…) We are not giving discounts to everybody all the time, but we try to be flexible. – Mirana Dufour of Loomly If you’re offering discounts on yearly plans, you must be aware that you’re giving up MRR. In return, you’re getting cash flow that’s guaranteed that you can spend wisely over the next several years. Any special advice from our panelists? Get creative with your offers and introduce some type of gamification to incentivize your customers to move to a yearly plan. Increase your cash flow to extend your runway and gain stability in uncertain times. Develop a Customer Health Score At the end of the day, you want your customers to get the most value out of your product. Sometimes it’s hard to predict if customers will stay with you or leave. But if you can assess when customers are successful, you’ll be able to predict it too. Vitally’s Parker Moore recommends developing a health score. His team looks at three dimensions when determining a customer’s health score. 1. What is your customer’s relationship to the customer success team? How often do they engage with their customer success manager (CSM)? What are the types of engagements with the CSM? What types of support tickets are coming in? 2. What is your customer’s relationship to the product? Customer retention depends on usage. Make sure that usage is going up by tracking metrics like daily, weekly, or monthly active users. 3. What is your customer’s relationship to their own performance? Make sure you understand your customer’s goals and KPIs. Can you see if they are getting closer to achieving them? So if we know their goals, we know their KPIs, we know their baseline on where they’re starting from, we should be able to see if they are getting closer to or farther away from those things. If any one of those relationships is going in the wrong direction, our health score can catch that with all those different inputs. And then it auto-assigns a prescriptive and sequential set of plays to run to address those inputs to better that particular relationship to really impact the overall relationship with us. – Parker Build Customer Feedback Loops When you’re planning to improve customer onboarding, ensure that the entire customer success organization is clear on why a customer is using the product, what problems they’re solving, and how they’re measuring success. Every CSM should know goals, they should know metrics, and they should know how their customer’s going to use the product. Parker To achieve that, talk to customers, understand their requirements, and then translate that into processes. Make sure to deliver value at every stage of the customer journey. For example, Loomly built their product exclusively around customer feedback. In a competitive space of social media management, they need to be very quick to react to market updates. We are working in a very competitive environment. So we created a very tight feedback loop to make sure that the CS team can actually advocate for what our users want and customers need to the product team and our platform. – Mirana Conduct Exit Interviews To deliver value at every stage of the customer journey, includes the last stage – cancellation. So consider rethinking your offboarding process. Are you conducting exit interviews? Those are opportunities to get valuable feedback too. We really want to talk with each and every customer that doesn’t find the necessary value in our product to understand what it is that we could be doing better. – María del Mar Use every opportunity that brings you closer to customer loyalty. Are You Providing a Vitamin or a Painkiller? The customer success leaders on the panel remind us to provide value at every step of the customer journey: to understand where customers are at in their onboarding, adoption, and retention journeys. SaaSync’s Travis Todd pointed out that in a time of uncertainty, we need to understand your value proposition and focus on the things that we can control. Are you providing a vitamin or are you providing a painkiller? If you’re providing a vitamin, are there things you can do to your product to move towards being a painkiller? – Travis Todd, SaaSync Thank you to our panelists María del Mar Mitjavila Bedmar, Head of Customer Experience, Ledgy María joined the customer experience team at equity management platform, Ledgy last year, and has been an important piece of their growth story since. As Head of CX, María is helping growing startups get their cap table and employee participation plans right from the start. Raising a $22m series B earlier this year, María’s focus is on scaling CX to support Ledgy’s growing customer base. Parker Moore, Head of Customer Success, Vitally Since joining Vitally as Head of Customer Success, Parker has grown the CS organization by 5x and been part of incredible customer growth. Vitally is a best-in-class Customer Success Platform for B2B SaaS companies, so Parker brings expertise as both a CS practitioner and expert. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Mirana Dufour, VP Success, Loomly Over the past five years, Mirana has scaled Loomly’s Customer Success and Operations with a customer-centric approach. The direct feedback loop Mirana has established with Loomly users helps drive product development priorities, has created a tight-knit Loomly user community, and allows Loomly to consistently and swiftly deliver new value to customers. Travis Todd, CEO & Co-Founder, SaaSync Travis is passionate about optimizing the levels that impact key growth metrics at SaaS companies. As CEO and co-founder of SaaSync, Travis focuses on helping his customers integrate their billing data into advanced analytics platforms such as ChartMogul. With over a decade spent in tech, most of which as co-founder of SaaS-based startups, Travis has a wealth of experience in customer retention.

[INST] This Downturn Is Different: How to Drive Retention and Mitigate Churn in 2023 [/INST]

In a downturn, priorities shift. Buyers start getting cautious. They stop purchasing new software and reevaluate their current spending. Naturally, this puts extra pressure on customer success. After all, it’s the customer success teams that drive growth through retention and churn mitigation. So, what’s the best way to drive retention and mitigate churn in 2023? We hosted a panel of customer success experts this month. We asked them for their strategies and tactics on how they mitigate churn in the short term and improve retention in the long term. María del Mar Mitjavila Bedmar of Ledgy, Parker Moore of Vitally, Mirana Dufour of Loomly, and Travis Todd of SaaSync shared the good, the bad, and the ugly of fighting churn in a challenging market. Six lessons in customer success to boost your retention Analyze your churn data for any patterns Identify who your best-fit customers are Extend your cash runway Develop a customer health score Build customer feedback loops Conduct exit interviews The Spotlight Is on Customer Success People have changed what they care about. Before, it was all about retaining talent and fighting in the talent world. And now it’s all about keeping that money in the bank and making sure that every investment you make actually pays off. – María del Mar Mitjavila Bedmar of Ledgy Customer success leaders have noticed that tech companies started getting more cautious and vigilant when it comes to spending. They are reevaluating their budgets, limiting how much they spend on software, and even cutting down their staff. The industry is expecting this trend to continue. As a result, businesses try to extend their runway and put even more focus on tracking ROI. A lot of the spotlight is on customer success and customer-facing teams to deliver value and demonstrate that value throughout the duration of the customer journey. – Parker Moore, Vitally For SaaS companies like Ledgy, Loomly, Vitally, and SaaSync, an economic downturn means that suddenly customers and prospects are much more sensitive to pricing. The task of customer success teams is to make sure customers are deriving value from the product and understand why it’s worth the investment. There are no shortcuts to improve retention, but our panelists shared a few pieces of advice that help them tackle churn. Analyze Your Churn Data for Any Patterns First of all, you need to understand churn to mitigate it. So look at past churn data and investigate where the problem area might be. Is it a customer success problem? Or a product shortfall? A positioning problem? Have some type of churn analysis in place to determine the reasoning for churn. And then with that, you’re able to uncover what processes are broken. It also gives you some direction on what cross-functional teams you may need to work with. – Parker Customer success teams need to determine which inputs or product events are consistent between customers that churn to mitigate it. However, our panelists advise avoiding getting distracted by wrong-fit customers. A few years ago at ChartMogul, we lost many legacy customers when migrating them to a new pricing model. However, the highly engaged good-fit customers enabled ChartMogul’s continued growth. Read our pricing migration story. Identify Who Your Best-Fit Customers Are Luckily, it’s also the role of customer success teams to learn which events and characteristics drive best-fit customers. Understand what brings value to your customer, and track that. And make sure that whatever place you have, whether it is onboarding or adoption, you configure your customer journey towards that value and towards helping your customer. – María del Mar Make sure your customers have a clear path to success when using your product and derive value from it at each step of the journey. Extend Your Cash Runway In an economic crisis, securing cash flow is an immediate reaction for many SaaS companies. You can try several practices to guarantee revenue: experimenting with reactivation campaigns, offering trial extensions, or moving customers to yearly contracts at a discounted price. For our business, it’s better to have a yearly subscriber than a monthly one. It’s less risky. So we do sometimes try to incentivize them to upgrade to a yearly plan by offering a discount that will be available for seven days. (…) We are not giving discounts to everybody all the time, but we try to be flexible. – Mirana Dufour of Loomly If you’re offering discounts on yearly plans, you must be aware that you’re giving up MRR. In return, you’re getting cash flow that’s guaranteed that you can spend wisely over the next several years. Any special advice from our panelists? Get creative with your offers and introduce some type of gamification to incentivize your customers to move to a yearly plan. Increase your cash flow to extend your runway and gain stability in uncertain times. Develop a Customer Health Score At the end of the day, you want your customers to get the most value out of your product. Sometimes it’s hard to predict if customers will stay with you or leave. But if you can assess when customers are successful, you’ll be able to predict it too. Vitally’s Parker Moore recommends developing a health score. His team looks at three dimensions when determining a customer’s health score. 1. What is your customer’s relationship to the customer success team? How often do they engage with their customer success manager (CSM)? What are the types of engagements with the CSM? What types of support tickets are coming in? 2. What is your customer’s relationship to the product? Customer retention depends on usage. Make sure that usage is going up by tracking metrics like daily, weekly, or monthly active users. 3. What is your customer’s relationship to their own performance? Make sure you understand your customer’s goals and KPIs. Can you see if they are getting closer to achieving them? So if we know their goals, we know their KPIs, we know their baseline on where they’re starting from, we should be able to see if they are getting closer to or farther away from those things. If any one of those relationships is going in the wrong direction, our health score can catch that with all those different inputs. And then it auto-assigns a prescriptive and sequential set of plays to run to address those inputs to better that particular relationship to really impact the overall relationship with us. – Parker Build Customer Feedback Loops When you’re planning to improve customer onboarding, ensure that the entire customer success organization is clear on why a customer is using the product, what problems they’re solving, and how they’re measuring success. Every CSM should know goals, they should know metrics, and they should know how their customer’s going to use the product. Parker To achieve that, talk to customers, understand their requirements, and then translate that into processes. Make sure to deliver value at every stage of the customer journey. For example, Loomly built their product exclusively around customer feedback. In a competitive space of social media management, they need to be very quick to react to market updates. We are working in a very competitive environment. So we created a very tight feedback loop to make sure that the CS team can actually advocate for what our users want and customers need to the product team and our platform. – Mirana Conduct Exit Interviews To deliver value at every stage of the customer journey, includes the last stage – cancellation. So consider rethinking your offboarding process. Are you conducting exit interviews? Those are opportunities to get valuable feedback too. We really want to talk with each and every customer that doesn’t find the necessary value in our product to understand what it is that we could be doing better. – María del Mar Use every opportunity that brings you closer to customer loyalty. Are You Providing a Vitamin or a Painkiller? The customer success leaders on the panel remind us to provide value at every step of the customer journey: to understand where customers are at in their onboarding, adoption, and retention journeys. SaaSync’s Travis Todd pointed out that in a time of uncertainty, we need to understand your value proposition and focus on the things that we can control. Are you providing a vitamin or are you providing a painkiller? If you’re providing a vitamin, are there things you can do to your product to move towards being a painkiller? – Travis Todd, SaaSync Thank you to our panelists María del Mar Mitjavila Bedmar, Head of Customer Experience, Ledgy María joined the customer experience team at equity management platform, Ledgy last year, and has been an important piece of their growth story since. As Head of CX, María is helping growing startups get their cap table and employee participation plans right from the start. Raising a $22m series B earlier this year, María’s focus is on scaling CX to support Ledgy’s growing customer base. Parker Moore, Head of Customer Success, Vitally Since joining Vitally as Head of Customer Success, Parker has grown the CS organization by 5x and been part of incredible customer growth. Vitally is a best-in-class Customer Success Platform for B2B SaaS companies, so Parker brings expertise as both a CS practitioner and expert. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Mirana Dufour, VP Success, Loomly Over the past five years, Mirana has scaled Loomly’s Customer Success and Operations with a customer-centric approach. The direct feedback loop Mirana has established with Loomly users helps drive product development priorities, has created a tight-knit Loomly user community, and allows Loomly to consistently and swiftly deliver new value to customers. Travis Todd, CEO & Co-Founder, SaaSync Travis is passionate about optimizing the levels that impact key growth metrics at SaaS companies. As CEO and co-founder of SaaSync, Travis focuses on helping his customers integrate their billing data into advanced analytics platforms such as ChartMogul. With over a decade spent in tech, most of which as co-founder of SaaS-based startups, Travis has a wealth of experience in customer retention.

<sys> [INST] This Downturn Is Different: How to Drive Retention and Mitigate Churn in 2023 [/INST] In a downturn, priorities shift. Buyers start getting cautious. They stop purchasing new software and reevaluate their current spending. Naturally, this puts extra pressure on customer success. After all, it’s the customer success teams that drive growth through retention and churn mitigation. So, what’s the best way to drive retention and mitigate churn in 2023? We hosted a panel of customer success experts this month. We asked them for their strategies and tactics on how they mitigate churn in the short term and improve retention in the long term. María del Mar Mitjavila Bedmar of Ledgy, Parker Moore of Vitally, Mirana Dufour of Loomly, and Travis Todd of SaaSync shared the good, the bad, and the ugly of fighting churn in a challenging market. Six lessons in customer success to boost your retention Analyze your churn data for any patterns Identify who your best-fit customers are Extend your cash runway Develop a customer health score Build customer feedback loops Conduct exit interviews The Spotlight Is on Customer Success People have changed what they care about. Before, it was all about retaining talent and fighting in the talent world. And now it’s all about keeping that money in the bank and making sure that every investment you make actually pays off. – María del Mar Mitjavila Bedmar of Ledgy Customer success leaders have noticed that tech companies started getting more cautious and vigilant when it comes to spending. They are reevaluating their budgets, limiting how much they spend on software, and even cutting down their staff. The industry is expecting this trend to continue. As a result, businesses try to extend their runway and put even more focus on tracking ROI. A lot of the spotlight is on customer success and customer-facing teams to deliver value and demonstrate that value throughout the duration of the customer journey. – Parker Moore, Vitally For SaaS companies like Ledgy, Loomly, Vitally, and SaaSync, an economic downturn means that suddenly customers and prospects are much more sensitive to pricing. The task of customer success teams is to make sure customers are deriving value from the product and understand why it’s worth the investment. There are no shortcuts to improve retention, but our panelists shared a few pieces of advice that help them tackle churn. Analyze Your Churn Data for Any Patterns First of all, you need to understand churn to mitigate it. So look at past churn data and investigate where the problem area might be. Is it a customer success problem? Or a product shortfall? A positioning problem? Have some type of churn analysis in place to determine the reasoning for churn. And then with that, you’re able to uncover what processes are broken. It also gives you some direction on what cross-functional teams you may need to work with. – Parker Customer success teams need to determine which inputs or product events are consistent between customers that churn to mitigate it. However, our panelists advise avoiding getting distracted by wrong-fit customers. A few years ago at ChartMogul, we lost many legacy customers when migrating them to a new pricing model. However, the highly engaged good-fit customers enabled ChartMogul’s continued growth. Read our pricing migration story. Identify Who Your Best-Fit Customers Are Luckily, it’s also the role of customer success teams to learn which events and characteristics drive best-fit customers. Understand what brings value to your customer, and track that. And make sure that whatever place you have, whether it is onboarding or adoption, you configure your customer journey towards that value and towards helping your customer. – María del Mar Make sure your customers have a clear path to success when using your product and derive value from it at each step of the journey. Extend Your Cash Runway In an economic crisis, securing cash flow is an immediate reaction for many SaaS companies. You can try several practices to guarantee revenue: experimenting with reactivation campaigns, offering trial extensions, or moving customers to yearly contracts at a discounted price. For our business, it’s better to have a yearly subscriber than a monthly one. It’s less risky. So we do sometimes try to incentivize them to upgrade to a yearly plan by offering a discount that will be available for seven days. (…) We are not giving discounts to everybody all the time, but we try to be flexible. – Mirana Dufour of Loomly If you’re offering discounts on yearly plans, you must be aware that you’re giving up MRR. In return, you’re getting cash flow that’s guaranteed that you can spend wisely over the next several years. Any special advice from our panelists? Get creative with your offers and introduce some type of gamification to incentivize your customers to move to a yearly plan. Increase your cash flow to extend your runway and gain stability in uncertain times. Develop a Customer Health Score At the end of the day, you want your customers to get the most value out of your product. Sometimes it’s hard to predict if customers will stay with you or leave. But if you can assess when customers are successful, you’ll be able to predict it too. Vitally’s Parker Moore recommends developing a health score. His team looks at three dimensions when determining a customer’s health score. 1. What is your customer’s relationship to the customer success team? How often do they engage with their customer success manager (CSM)? What are the types of engagements with the CSM? What types of support tickets are coming in? 2. What is your customer’s relationship to the product? Customer retention depends on usage. Make sure that usage is going up by tracking metrics like daily, weekly, or monthly active users. 3. What is your customer’s relationship to their own performance? Make sure you understand your customer’s goals and KPIs. Can you see if they are getting closer to achieving them? So if we know their goals, we know their KPIs, we know their baseline on where they’re starting from, we should be able to see if they are getting closer to or farther away from those things. If any one of those relationships is going in the wrong direction, our health score can catch that with all those different inputs. And then it auto-assigns a prescriptive and sequential set of plays to run to address those inputs to better that particular relationship to really impact the overall relationship with us. – Parker Build Customer Feedback Loops When you’re planning to improve customer onboarding, ensure that the entire customer success organization is clear on why a customer is using the product, what problems they’re solving, and how they’re measuring success. Every CSM should know goals, they should know metrics, and they should know how their customer’s going to use the product. Parker To achieve that, talk to customers, understand their requirements, and then translate that into processes. Make sure to deliver value at every stage of the customer journey. For example, Loomly built their product exclusively around customer feedback. In a competitive space of social media management, they need to be very quick to react to market updates. We are working in a very competitive environment. So we created a very tight feedback loop to make sure that the CS team can actually advocate for what our users want and customers need to the product team and our platform. – Mirana Conduct Exit Interviews To deliver value at every stage of the customer journey, includes the last stage – cancellation. So consider rethinking your offboarding process. Are you conducting exit interviews? Those are opportunities to get valuable feedback too. We really want to talk with each and every customer that doesn’t find the necessary value in our product to understand what it is that we could be doing better. – María del Mar Use every opportunity that brings you closer to customer loyalty. Are You Providing a Vitamin or a Painkiller? The customer success leaders on the panel remind us to provide value at every step of the customer journey: to understand where customers are at in their onboarding, adoption, and retention journeys. SaaSync’s Travis Todd pointed out that in a time of uncertainty, we need to understand your value proposition and focus on the things that we can control. Are you providing a vitamin or are you providing a painkiller? If you’re providing a vitamin, are there things you can do to your product to move towards being a painkiller? – Travis Todd, SaaSync Thank you to our panelists María del Mar Mitjavila Bedmar, Head of Customer Experience, Ledgy María joined the customer experience team at equity management platform, Ledgy last year, and has been an important piece of their growth story since. As Head of CX, María is helping growing startups get their cap table and employee participation plans right from the start. Raising a $22m series B earlier this year, María’s focus is on scaling CX to support Ledgy’s growing customer base. Parker Moore, Head of Customer Success, Vitally Since joining Vitally as Head of Customer Success, Parker has grown the CS organization by 5x and been part of incredible customer growth. Vitally is a best-in-class Customer Success Platform for B2B SaaS companies, so Parker brings expertise as both a CS practitioner and expert. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Mirana Dufour, VP Success, Loomly Over the past five years, Mirana has scaled Loomly’s Customer Success and Operations with a customer-centric approach. The direct feedback loop Mirana has established with Loomly users helps drive product development priorities, has created a tight-knit Loomly user community, and allows Loomly to consistently and swiftly deliver new value to customers. Travis Todd, CEO & Co-Founder, SaaSync Travis is passionate about optimizing the levels that impact key growth metrics at SaaS companies. As CEO and co-founder of SaaSync, Travis focuses on helping his customers integrate their billing data into advanced analytics platforms such as ChartMogul. With over a decade spent in tech, most of which as co-founder of SaaS-based startups, Travis has a wealth of experience in customer retention. </sys

When to Buy and When to Build When It Comes to Your Subscription Analytics. At ChartMogul, we are lucky to talk to many companies in the SaaS space and see the spectrum of challenges each faces at each phase of their growth. Depending on where these companies find themselves along that spectrum, we can find ourselves in conversations with teams that are comparing our Subscription Data Platform against a tool they are planning to build internally. Naturally, we want to get as many customers for ChartMogul as possible but are also very aware that for some teams, only an in-house tool can provide the level of insight they need. Our experience has helped us develop a good understanding of what characteristics make a team a good fit for build vs buy. In this post, we want to share some of that knowledge in order to help companies that are trying to decide whether they should build or buy their subscription analytics software. Further reading Some additional interesting takes on the “build vs. buy” conundrum: Build versus buy. by Will Larson SaaS billing build vs. buy by Shar Darafsheh Both Build and Buy involve tradeoffs Many teams choose to “buy” because they want to start using their data to their advantage as quickly as possible. Similarly, quite a few teams choose to “build” their solution in-house because they believe their use case is so unique that nothing in the market comes close to fulfilling their requirements. No matter which approach you choose to go with at the end, it is important to understand you will always gain and lose something (speed vs. customization, etc.) To make that decision for your company, it’s not enough just to be aware of the advantages and challenges of each approach. You also have to develop a high level of understanding of both the business and technical requirements you have to fulfill to decide which approach would work best for your company. What does a solution need to do, and how will it be managed and iterated on over time? Who are the user groups that will interact with the solution, and how will they use that solution? If your CFO needs to use the solution to build EOM and EOQ investor reports, they will need the solution to be reliable and consistent. Let’s compare the two approaches and see how they stack against each other. Building your own analytics tool Building from scratch may appear to be a good option because it allows you to create a tool that is the perfect fit for your specific business model. However, you also need to consider that it is improbable that you will get the resources to build this vision of the perfect tool. One of the reasons is that investing in something that is not part of your core differentiator is probably not a great use of your resources in the first place. Especially in the beginning — you’re much more likely to start with something that looks a lot like a proof of concept than the complete platform you envisioned during the planning stage. Here are some of the other pros and cons building subscription analytics internally comes with: Positives: Complete control over how metrics are calculated; Fits your use case 100%, you can create any charts/features you want; You can integrate with any of the other tools you’re using. Negatives: There are significant costs associated with setting up your infrastructure and developing the software you will need; Building the initial proof-of-concept version is relatively easy, but generating proper charts, maintaining them, and making sure they are accurate gets increasingly complex and challenging; Any additional functionalities and integrations need to be built on a custom basis by your team. Over time, the volume and complexity of the data your solution needs to account for compounds and your business and technical requirements change. So when planning for your solution, you need to anticipate that you may change billing systems later on and to be prepared to build support for that if and when the time comes. Now, let’s look at what this looks like when you decide to buy a pre-made subscription analytics product. Buying a third-party analytics product Two distinct motives usually drive teams that choose to buy an analytics platform. The apparent reason is, of course, to save time, money, and engineering resources. The equally-important-yet-less-prominent motivation is that an external vendor — especially in the case where they are developing analytics for a specific niche — also brings deep domain knowledge about the area you’re interested in. So, whether it’s revenue, marketing, or product analytics, companies like Mixpanel, Heap, and others spend a lot of time thinking about the underlying discipline. I know we do. Besides, buying from an external vendor means you are (almost) guaranteed that the company will continue to develop the tool, so you’re using something that is always following the latest trends in the industry. Just as with building, buying an analytics platform requires a set of tradeoffs. Positives: You can get started right away with minimal time investment, and your engineers can focus on your core product. Metrics calculations are based on deep domain knowledge, and they are thoroughly vetted and trusted by leadership teams and investors the world over; Most integrations are built by the vendor and work out of the box; The product is improved continuously by a dedicated development team focused on implementing the latest thinking and trends in the field. Negatives: The vendor might be unwilling to consider and customize the product for your specific use case if it doesn’t apply to a larger share of customers; Most tools focus on a specific niche/type of analytics, so you can’t perform every kind of analysis in one place; Sometimes, you will still need to dedicate some developer resources (for example, when trying to import data that lives in a legacy system). Now that you have a good understanding of the tradeoffs each approach involves, you should also consider the resources building internally would require. What does it take (and how much does it cost) to build your own analytics? If you’re thinking about building a subscription analytics capability internally, it’s important to consider the requirements and costs of such a project. First, in terms of technology, you will need to provide solutions for the following three layers: Data warehouse: As the name implies, this is where you will store all your data. Essentially, this is a database optimized for the types of analytics queries you will be performing. Typical examples of this include Amazon Redshift, Snowflake, and Google BigQuery. Extract, transform, load (ETL): This piece of your setup will be responsible for extracting your data from your primary database, transforming it into a pre-defined format, and loading it into your data warehouse, so it can be used to perform analyses. Examples of this layer include Fivetran and Stitch. Even if you are only going to analyze data stored in SaaS/cloud services, you will still need to write (and run) your own scripts to extract, transform, and load the required data into your data warehouse. Business intelligence/Data visualization: The final piece is the solution you’ll use to perform queries and display the data you get from them. Typical tools in this category include Looker, Tableau, Power BI, Google Data Studio. In terms of costs, it can be challenging to estimate the exact amount to build internally. Many of these tools cater to larger organizations and, as a result, don’t have public pricing available. Based on some of the information we’ve been able to unearth, building a best-in-class solution can easily require northward of $100,000 per year (excluding headcount costs!) to build and operate: Data warehouse: Pricing depends on a range of factors such as the number of nodes and cluster sizes you will require, but our estimates suggest that using Redshift/Snowflake would start at between $5,000-8,000/year; ETL: Adding FiveTran would add around $20,000 to the bill; Data visualization: Looker is the priciest piece, with some reports putting it at over $50,000. Of course, you will also have to consider a full-time data engineer’s salary that you will need to build the solution in the beginning and a data scientist that will be the primary person who will be using it. The average salary for both those is over $100,000 per year, according to Glassdoor. As you can see, the costs to build a “best in class” solution can quickly escalate into six figures, so it is essential to keep that in mind when choosing which approach to take. Some teams choose to build using cheaper and/or open-source products, but that introduces a whole different set of challenges and usually, it ends up requiring even more data engineering effort, which makes the end result just as expensive. With that, we do not want to imply that you should also choose to “buy” over “build”. In fact, we believe there are circumstances in which either can be the better option. How to choose between Build vs Buy We believe that your decision to build your own solution or buy from a third-party vendor should be driven by what end goals you want to achieve. Suppose you’re looking to implement analytics and start using the insight from them in well-defined areas such as marketing, product, or revenue. In that case, it makes sense to buy from a vendor who already has built a dedicated product based on the expertise they have in the field. However, suppose you are more interested in exploratory data analysis, precisely in cases where you can combine different types of data (e.g., specific types of in-product usage and revenue/subscription movements). In that case, it makes sense to invest in building your own stack and hiring a (team of) data scientist(s) to run this for you. We also increasingly see a trend of what we call Reverse ETL. Companies with a high level of maturity in their data operations connect their data warehouses to tools like ChartMogul to take advantage of pre-built integrations, metric computations, and other features. This preserves their control over data and gives them the ability to do any type of consolidation and analysis on their end. Some ChartMogul customers also use our Metrics API to pull their metrics and present them in their preferred reporting solution/stack. Pick a side, make a move No matter which route you choose to go, we believe making a move is inherently better compared to pondering the decision too long. A lot is at stake when it comes to your data and how you use it. There’s a lot in it that can help you understand the potential of your business and grow it sustainably. If you’re currently facing some of these issues and would like to get a second opinion from an expert (it will be only slightly biased, we promise), you can schedule a technical scoping session with our team. We’ll help you define your business and technical requirements and avoid any serious pitfalls. Contact us at sales@chartmogul.com.

[INST] When to Buy and When to Build When It Comes to Your Subscription Analytics [/INST]

At ChartMogul, we are lucky to talk to many companies in the SaaS space and see the spectrum of challenges each faces at each phase of their growth. Depending on where these companies find themselves along that spectrum, we can find ourselves in conversations with teams that are comparing our Subscription Data Platform against a tool they are planning to build internally. Naturally, we want to get as many customers for ChartMogul as possible but are also very aware that for some teams, only an in-house tool can provide the level of insight they need. Our experience has helped us develop a good understanding of what characteristics make a team a good fit for build vs buy. In this post, we want to share some of that knowledge in order to help companies that are trying to decide whether they should build or buy their subscription analytics software. Further reading Some additional interesting takes on the “build vs. buy” conundrum: Build versus buy. by Will Larson SaaS billing build vs. buy by Shar Darafsheh Both Build and Buy involve tradeoffs Many teams choose to “buy” because they want to start using their data to their advantage as quickly as possible. Similarly, quite a few teams choose to “build” their solution in-house because they believe their use case is so unique that nothing in the market comes close to fulfilling their requirements. No matter which approach you choose to go with at the end, it is important to understand you will always gain and lose something (speed vs. customization, etc.) To make that decision for your company, it’s not enough just to be aware of the advantages and challenges of each approach. You also have to develop a high level of understanding of both the business and technical requirements you have to fulfill to decide which approach would work best for your company. What does a solution need to do, and how will it be managed and iterated on over time? Who are the user groups that will interact with the solution, and how will they use that solution? If your CFO needs to use the solution to build EOM and EOQ investor reports, they will need the solution to be reliable and consistent. Let’s compare the two approaches and see how they stack against each other. Building your own analytics tool Building from scratch may appear to be a good option because it allows you to create a tool that is the perfect fit for your specific business model. However, you also need to consider that it is improbable that you will get the resources to build this vision of the perfect tool. One of the reasons is that investing in something that is not part of your core differentiator is probably not a great use of your resources in the first place. Especially in the beginning — you’re much more likely to start with something that looks a lot like a proof of concept than the complete platform you envisioned during the planning stage. Here are some of the other pros and cons building subscription analytics internally comes with: Positives: Complete control over how metrics are calculated; Fits your use case 100%, you can create any charts/features you want; You can integrate with any of the other tools you’re using. Negatives: There are significant costs associated with setting up your infrastructure and developing the software you will need; Building the initial proof-of-concept version is relatively easy, but generating proper charts, maintaining them, and making sure they are accurate gets increasingly complex and challenging; Any additional functionalities and integrations need to be built on a custom basis by your team. Over time, the volume and complexity of the data your solution needs to account for compounds and your business and technical requirements change. So when planning for your solution, you need to anticipate that you may change billing systems later on and to be prepared to build support for that if and when the time comes. Now, let’s look at what this looks like when you decide to buy a pre-made subscription analytics product. Buying a third-party analytics product Two distinct motives usually drive teams that choose to buy an analytics platform. The apparent reason is, of course, to save time, money, and engineering resources. The equally-important-yet-less-prominent motivation is that an external vendor — especially in the case where they are developing analytics for a specific niche — also brings deep domain knowledge about the area you’re interested in. So, whether it’s revenue, marketing, or product analytics, companies like Mixpanel, Heap, and others spend a lot of time thinking about the underlying discipline. I know we do. Besides, buying from an external vendor means you are (almost) guaranteed that the company will continue to develop the tool, so you’re using something that is always following the latest trends in the industry. Just as with building, buying an analytics platform requires a set of tradeoffs. Positives: You can get started right away with minimal time investment, and your engineers can focus on your core product. Metrics calculations are based on deep domain knowledge, and they are thoroughly vetted and trusted by leadership teams and investors the world over; Most integrations are built by the vendor and work out of the box; The product is improved continuously by a dedicated development team focused on implementing the latest thinking and trends in the field. Negatives: The vendor might be unwilling to consider and customize the product for your specific use case if it doesn’t apply to a larger share of customers; Most tools focus on a specific niche/type of analytics, so you can’t perform every kind of analysis in one place; Sometimes, you will still need to dedicate some developer resources (for example, when trying to import data that lives in a legacy system). Now that you have a good understanding of the tradeoffs each approach involves, you should also consider the resources building internally would require. What does it take (and how much does it cost) to build your own analytics? If you’re thinking about building a subscription analytics capability internally, it’s important to consider the requirements and costs of such a project. First, in terms of technology, you will need to provide solutions for the following three layers: Data warehouse: As the name implies, this is where you will store all your data. Essentially, this is a database optimized for the types of analytics queries you will be performing. Typical examples of this include Amazon Redshift, Snowflake, and Google BigQuery. Extract, transform, load (ETL): This piece of your setup will be responsible for extracting your data from your primary database, transforming it into a pre-defined format, and loading it into your data warehouse, so it can be used to perform analyses. Examples of this layer include Fivetran and Stitch. Even if you are only going to analyze data stored in SaaS/cloud services, you will still need to write (and run) your own scripts to extract, transform, and load the required data into your data warehouse. Business intelligence/Data visualization: The final piece is the solution you’ll use to perform queries and display the data you get from them. Typical tools in this category include Looker, Tableau, Power BI, Google Data Studio. In terms of costs, it can be challenging to estimate the exact amount to build internally. Many of these tools cater to larger organizations and, as a result, don’t have public pricing available. Based on some of the information we’ve been able to unearth, building a best-in-class solution can easily require northward of $100,000 per year (excluding headcount costs!) to build and operate: Data warehouse: Pricing depends on a range of factors such as the number of nodes and cluster sizes you will require, but our estimates suggest that using Redshift/Snowflake would start at between $5,000-8,000/year; ETL: Adding FiveTran would add around $20,000 to the bill; Data visualization: Looker is the priciest piece, with some reports putting it at over $50,000. Of course, you will also have to consider a full-time data engineer’s salary that you will need to build the solution in the beginning and a data scientist that will be the primary person who will be using it. The average salary for both those is over $100,000 per year, according to Glassdoor. As you can see, the costs to build a “best in class” solution can quickly escalate into six figures, so it is essential to keep that in mind when choosing which approach to take. Some teams choose to build using cheaper and/or open-source products, but that introduces a whole different set of challenges and usually, it ends up requiring even more data engineering effort, which makes the end result just as expensive. With that, we do not want to imply that you should also choose to “buy” over “build”. In fact, we believe there are circumstances in which either can be the better option. How to choose between Build vs Buy We believe that your decision to build your own solution or buy from a third-party vendor should be driven by what end goals you want to achieve. Suppose you’re looking to implement analytics and start using the insight from them in well-defined areas such as marketing, product, or revenue. In that case, it makes sense to buy from a vendor who already has built a dedicated product based on the expertise they have in the field. However, suppose you are more interested in exploratory data analysis, precisely in cases where you can combine different types of data (e.g., specific types of in-product usage and revenue/subscription movements). In that case, it makes sense to invest in building your own stack and hiring a (team of) data scientist(s) to run this for you. We also increasingly see a trend of what we call Reverse ETL. Companies with a high level of maturity in their data operations connect their data warehouses to tools like ChartMogul to take advantage of pre-built integrations, metric computations, and other features. This preserves their control over data and gives them the ability to do any type of consolidation and analysis on their end. Some ChartMogul customers also use our Metrics API to pull their metrics and present them in their preferred reporting solution/stack. Pick a side, make a move No matter which route you choose to go, we believe making a move is inherently better compared to pondering the decision too long. A lot is at stake when it comes to your data and how you use it. There’s a lot in it that can help you understand the potential of your business and grow it sustainably. If you’re currently facing some of these issues and would like to get a second opinion from an expert (it will be only slightly biased, we promise), you can schedule a technical scoping session with our team. We’ll help you define your business and technical requirements and avoid any serious pitfalls. Contact us at sales@chartmogul.com.

<sys> [INST] When to Buy and When to Build When It Comes to Your Subscription Analytics [/INST] At ChartMogul, we are lucky to talk to many companies in the SaaS space and see the spectrum of challenges each faces at each phase of their growth. Depending on where these companies find themselves along that spectrum, we can find ourselves in conversations with teams that are comparing our Subscription Data Platform against a tool they are planning to build internally. Naturally, we want to get as many customers for ChartMogul as possible but are also very aware that for some teams, only an in-house tool can provide the level of insight they need. Our experience has helped us develop a good understanding of what characteristics make a team a good fit for build vs buy. In this post, we want to share some of that knowledge in order to help companies that are trying to decide whether they should build or buy their subscription analytics software. Further reading Some additional interesting takes on the “build vs. buy” conundrum: Build versus buy. by Will Larson SaaS billing build vs. buy by Shar Darafsheh Both Build and Buy involve tradeoffs Many teams choose to “buy” because they want to start using their data to their advantage as quickly as possible. Similarly, quite a few teams choose to “build” their solution in-house because they believe their use case is so unique that nothing in the market comes close to fulfilling their requirements. No matter which approach you choose to go with at the end, it is important to understand you will always gain and lose something (speed vs. customization, etc.) To make that decision for your company, it’s not enough just to be aware of the advantages and challenges of each approach. You also have to develop a high level of understanding of both the business and technical requirements you have to fulfill to decide which approach would work best for your company. What does a solution need to do, and how will it be managed and iterated on over time? Who are the user groups that will interact with the solution, and how will they use that solution? If your CFO needs to use the solution to build EOM and EOQ investor reports, they will need the solution to be reliable and consistent. Let’s compare the two approaches and see how they stack against each other. Building your own analytics tool Building from scratch may appear to be a good option because it allows you to create a tool that is the perfect fit for your specific business model. However, you also need to consider that it is improbable that you will get the resources to build this vision of the perfect tool. One of the reasons is that investing in something that is not part of your core differentiator is probably not a great use of your resources in the first place. Especially in the beginning — you’re much more likely to start with something that looks a lot like a proof of concept than the complete platform you envisioned during the planning stage. Here are some of the other pros and cons building subscription analytics internally comes with: Positives: Complete control over how metrics are calculated; Fits your use case 100%, you can create any charts/features you want; You can integrate with any of the other tools you’re using. Negatives: There are significant costs associated with setting up your infrastructure and developing the software you will need; Building the initial proof-of-concept version is relatively easy, but generating proper charts, maintaining them, and making sure they are accurate gets increasingly complex and challenging; Any additional functionalities and integrations need to be built on a custom basis by your team. Over time, the volume and complexity of the data your solution needs to account for compounds and your business and technical requirements change. So when planning for your solution, you need to anticipate that you may change billing systems later on and to be prepared to build support for that if and when the time comes. Now, let’s look at what this looks like when you decide to buy a pre-made subscription analytics product. Buying a third-party analytics product Two distinct motives usually drive teams that choose to buy an analytics platform. The apparent reason is, of course, to save time, money, and engineering resources. The equally-important-yet-less-prominent motivation is that an external vendor — especially in the case where they are developing analytics for a specific niche — also brings deep domain knowledge about the area you’re interested in. So, whether it’s revenue, marketing, or product analytics, companies like Mixpanel, Heap, and others spend a lot of time thinking about the underlying discipline. I know we do. Besides, buying from an external vendor means you are (almost) guaranteed that the company will continue to develop the tool, so you’re using something that is always following the latest trends in the industry. Just as with building, buying an analytics platform requires a set of tradeoffs. Positives: You can get started right away with minimal time investment, and your engineers can focus on your core product. Metrics calculations are based on deep domain knowledge, and they are thoroughly vetted and trusted by leadership teams and investors the world over; Most integrations are built by the vendor and work out of the box; The product is improved continuously by a dedicated development team focused on implementing the latest thinking and trends in the field. Negatives: The vendor might be unwilling to consider and customize the product for your specific use case if it doesn’t apply to a larger share of customers; Most tools focus on a specific niche/type of analytics, so you can’t perform every kind of analysis in one place; Sometimes, you will still need to dedicate some developer resources (for example, when trying to import data that lives in a legacy system). Now that you have a good understanding of the tradeoffs each approach involves, you should also consider the resources building internally would require. What does it take (and how much does it cost) to build your own analytics? If you’re thinking about building a subscription analytics capability internally, it’s important to consider the requirements and costs of such a project. First, in terms of technology, you will need to provide solutions for the following three layers: Data warehouse: As the name implies, this is where you will store all your data. Essentially, this is a database optimized for the types of analytics queries you will be performing. Typical examples of this include Amazon Redshift, Snowflake, and Google BigQuery. Extract, transform, load (ETL): This piece of your setup will be responsible for extracting your data from your primary database, transforming it into a pre-defined format, and loading it into your data warehouse, so it can be used to perform analyses. Examples of this layer include Fivetran and Stitch. Even if you are only going to analyze data stored in SaaS/cloud services, you will still need to write (and run) your own scripts to extract, transform, and load the required data into your data warehouse. Business intelligence/Data visualization: The final piece is the solution you’ll use to perform queries and display the data you get from them. Typical tools in this category include Looker, Tableau, Power BI, Google Data Studio. In terms of costs, it can be challenging to estimate the exact amount to build internally. Many of these tools cater to larger organizations and, as a result, don’t have public pricing available. Based on some of the information we’ve been able to unearth, building a best-in-class solution can easily require northward of $100,000 per year (excluding headcount costs!) to build and operate: Data warehouse: Pricing depends on a range of factors such as the number of nodes and cluster sizes you will require, but our estimates suggest that using Redshift/Snowflake would start at between $5,000-8,000/year; ETL: Adding FiveTran would add around $20,000 to the bill; Data visualization: Looker is the priciest piece, with some reports putting it at over $50,000. Of course, you will also have to consider a full-time data engineer’s salary that you will need to build the solution in the beginning and a data scientist that will be the primary person who will be using it. The average salary for both those is over $100,000 per year, according to Glassdoor. As you can see, the costs to build a “best in class” solution can quickly escalate into six figures, so it is essential to keep that in mind when choosing which approach to take. Some teams choose to build using cheaper and/or open-source products, but that introduces a whole different set of challenges and usually, it ends up requiring even more data engineering effort, which makes the end result just as expensive. With that, we do not want to imply that you should also choose to “buy” over “build”. In fact, we believe there are circumstances in which either can be the better option. How to choose between Build vs Buy We believe that your decision to build your own solution or buy from a third-party vendor should be driven by what end goals you want to achieve. Suppose you’re looking to implement analytics and start using the insight from them in well-defined areas such as marketing, product, or revenue. In that case, it makes sense to buy from a vendor who already has built a dedicated product based on the expertise they have in the field. However, suppose you are more interested in exploratory data analysis, precisely in cases where you can combine different types of data (e.g., specific types of in-product usage and revenue/subscription movements). In that case, it makes sense to invest in building your own stack and hiring a (team of) data scientist(s) to run this for you. We also increasingly see a trend of what we call Reverse ETL. Companies with a high level of maturity in their data operations connect their data warehouses to tools like ChartMogul to take advantage of pre-built integrations, metric computations, and other features. This preserves their control over data and gives them the ability to do any type of consolidation and analysis on their end. Some ChartMogul customers also use our Metrics API to pull their metrics and present them in their preferred reporting solution/stack. Pick a side, make a move No matter which route you choose to go, we believe making a move is inherently better compared to pondering the decision too long. A lot is at stake when it comes to your data and how you use it. There’s a lot in it that can help you understand the potential of your business and grow it sustainably. If you’re currently facing some of these issues and would like to get a second opinion from an expert (it will be only slightly biased, we promise), you can schedule a technical scoping session with our team. We’ll help you define your business and technical requirements and avoid any serious pitfalls. Contact us at sales@chartmogul.com. </sys

B2B SaaS Retention Trends in 2023. Retention is arguably the most critical metric in SaaS regardless of a company’s stage. We sit down with Daniel Bakh, CEO & Co-founder at Fullview, Parker Moore, Head of Customer Success at Vitally, and Enzo Avigo, CEO & Co-founder at June to discuss recent trends in this key metric. Sid Jain, Senior Analyst at ChartMogul, our panel moderator is loaded with retention-related insights after analyzing data from over 2,100 SaaS startups to publish the SaaS retention report. Together, they discuss three main topics: Customer retention rate, and why it’s important in B2B SaaS Recent SaaS retention trends and what’s happening in the market Customer retention strategies Customer retention rate, and why it’s important in B2B SaaS When it comes to the value of retention Parker puts it best, “Retention matters because revenue matters. It’s very difficult to outsell a high churn percent number. It’s like trying to scoop water out of a sinking boat faster than it’s sinking.” – Parker Moore, Head of Customer Success at Vitally For early-stage companies, retention is an indicator of product-market fit. “If you’re an early-stage company your retention is a key sign of your product-market fit. It’s something you should look at as often as you can. In the early days especially.” – Daniel Bakh, CEO & Co-founder at Fullview There’s more to gain from tracking retention than just financial insights. It also offers insights from the customer’s perspective. “If people come back to your product it usually means they are getting value. It’s a very healthy way to look into the value that people derivate from your product.” – Enzo Avigo, CEO & Co-founder at June What’s a good cadence and practices for checking SaaS retention data? There are a lot of different ways to look at your retention data. How you look at the data can help answer specific questions or tell a certain story. Taking a closer look at churn, in cohorts, for example, can pinpoint problem areas and help you strategize next moves. To get the most from your data it needs to be not only accurate but malleable as well. You want to manipulate data quickly to create different reports that tell different stories. There are multiple types of retention to consider: customer retention, gross revenue retention (GRR), and net revenue retention (NRR). Our panelists most commonly refer to NRR during our conversation. “I like looking at different cohorts—YTD, last 90, current quarter—they tell different stories. Overlay things like customer segment by NRR, or health score by NRR to actually see if it’s correlated to NRR retainment. There are a lot of ways cut it up, you need to look from different perspectives and choose what’s the most impactful or actionable for your team.” – Parker Moore, Head of Customer Success at Vitally The chart below was generated with ChartMogul Subscription Analytics to show NRR by regional segments. America, Canada, and Western Europe are the selected segments displayed. Comparing metrics by segments in ChartMogul lets you dive deeper. Who owns retention in SaaS B2B Ownership of retention is hard to nail down to one person or team. It’s dynamic and touches many teams and positions. Strategically it makes sense to look at it from many angles and decide which team has the most touchpoints with the angle in hand. “I really have the feeling that it’s a metric that is owned by many people or at least many people have an impact on. I think of it as a leading metric that is really high level with a lot of metrics that impact it—NPS is one of them.” – Enzo Avigo, CEO & Co-founder at June Recent SaaS retention trends and what’s happening in the market ROI is top of mind for buyers When adding to their tech stack they care more than ever about how much value a product brings. Tools that don’t directly contribute to revenue or savings are less likely to be adopted. “There’s a lot more scrutiny around ROI. CFOs are more involved in the buying/renewal process. You clearly need to dictate how a product has delivered business outcomes. B2B SaaS tools have not done a great job of building intuitive ways to capture ROI received from the product.” – Parker Moore, Head of Customer Success at Vitally People are consolidating their tech stacks. Clients may want to take a step back and review their tech stacks for non-crucial products. It’s a situation with a high potential for churn. Year-end reviews are just one case where you might see this. “The biggest lump in terms of churn was the end of the year when people started to consolidate their stack wanting to cut a lot of expenses. This is where we’ve seen the biggest drop (churn) … quite a few customers have seen the same.” – Enzo Avigo, CEO & Co-founder at June Buyers are more cautious There’s more scrutiny in the market around spending but it’s not always a bad thing. Potential clients who go the extra mile to justify buying a product are usually a good fit. Daniel says there’s a silver lining to the current market conditions. “You have less noise. You’ll be able to find a stronger product-market fit with the people who buy your product. There will be more signal and less noise versus 2021 and 2020 where people were just buying because they had so much money—which could really muddy the waters when it comes to understanding if you have product-market fit.” – Daniel Bakh, CEO & Co-founder at Fullview Customer retention strategies Go the extra mile to showcase value Proving value, high touch support, and proactive customer success are the echoing points when it comes to moving the needle on retention. Having a great product is the foundation but you need to go the extra mile and show value to the customer. “The more that CS teams can partner with product and marketing to ideally get ROI intuitively displayed in the product or at least start to create a consistent narrative that you can equip your champions with around ROI the better.” – Parker Moore, Head of Customer Success at Vitally Establish and iterate on your onboarding experience The onboarding stage is a great time to get on the same page with your customer and establish their definition of success. Once you have that you can craft their user experience so your product enables them to achieve those goals. “We learned recently that if you can understand the goal people have with your product, their success definition, then you can help them navigate that journey. Something we see a lot of great companies doing is really trying to understand why customers are adopting their tool, what’s goal and success definition and really trying to help them get there.” – Enzo Avigo, CEO & Co-founder at June Prioritize product and feature adoption At Fullview customer success includes ensuring product adoption by the user. Not only do customers get the most from all the features, but it also helps them reach their goals. “We try to be proactive in helping our customers. They come to us, onboard, and then we’re basically monitoring to make sure everything is going well. We don’t just let them off to do their own thing. We really try to see what is going on in their day-to-day usage of the product.” – Daniel Bakh, CEO & Co-founder at Fullview Align on OKRs with the new customer Parker discusses how at Vitally they align on the desired outcome and set up an OKR framework around those goals. Everything is documented in the product so there’s no ambiguity about what needs to be done. It’s also a nice feature for quickly presenting ROI within the tool. “In the beginning, we try to align on what outcome you want to achieve. We try to follow the OKR format—what’s the objective, the key result you want to drive, and by what time? Then drive that to completion and that’s the signal to align on the next goal with that customer. When someone in the organization questions the value of the tool we have it documented.” – Parker Moore, Head of Customer Success at Vitally Using discounts to increase retention or delay churn in the near term In any sales cycle the topic of discounts is bound to arise at some point. It’s a tool you can always use as leverage for the unwilling to convert. On this point there is unanimity amongst the panel: use discounts cautiously. It can be challenging for early-stage companies to understand your product-market fit and price point if you’re giving a high number of discounts. “You need to be a bit careful in the early stages because it can also give you a skewed view of your product-market fit. You’re also trying to validate that people want to pay at or above a certain threshold for your product.“ – Daniel Bakh, CEO & Co-founder at Fullview In the short-term, a discount can win you that contract. But keep in mind your lifetime value (LTV) to customer acquisition cost (CAC) ratio. Enzo brings up the point that you need to be mindful when discounting and ensure you’re dealing with the right persona. It’s worth considering the short and long-term implications of a discount. “If you discount the wrong persona or ICP, or they come for the wrong reason then you’re basically just delaying the churn. You’re gonna make a few bucks but it’s gonna hurt your NRR and other things that investors look at a lot.” “Something we learned early on was that the people who we gave the biggest discounts churned the most.” – Enzo Avigo, CEO & Co-founder at June Thank you to the panelists Parker Moore Head of Customer Success, Vitally Parker Moore is the Head of Customer Success at Vitally, which is a best-in-class Customer Success Platform for B2B SaaS companies. Since joining, he has grown the CS organization by 5x & been part of incredible customer growth. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Parker lives in Michigan with his wife and two boys. Enzo Avigo CEO & Co-founder, June Enzo Avigo is the Co-Founder of June.so – the next-gen analytics for B2B SaaS. Prior to founding June, Enzo has built 6+ years of experience in Product Management where he worked in various verticals – SaaS (Intercom), FinTech (N26) and eCommerce (Zalando) – and helped scale fast-growing companies. Daniel Bakh CEO & Co-founder, Fullview Daniel Bakh is the CEO and co-founder of Fullview. With a background in product-led growth, enterprise sales, and VC. Daniel is also an angel investor with over 40 startups in his portfolio. He started Fullview in May 2021 after experiencing first-hand the frustrations and inefficiencies of giving and receiving customer support.

[INST] B2B SaaS Retention Trends in 2023 [/INST]

Retention is arguably the most critical metric in SaaS regardless of a company’s stage. We sit down with Daniel Bakh, CEO & Co-founder at Fullview, Parker Moore, Head of Customer Success at Vitally, and Enzo Avigo, CEO & Co-founder at June to discuss recent trends in this key metric. Sid Jain, Senior Analyst at ChartMogul, our panel moderator is loaded with retention-related insights after analyzing data from over 2,100 SaaS startups to publish the SaaS retention report. Together, they discuss three main topics: Customer retention rate, and why it’s important in B2B SaaS Recent SaaS retention trends and what’s happening in the market Customer retention strategies Customer retention rate, and why it’s important in B2B SaaS When it comes to the value of retention Parker puts it best, “Retention matters because revenue matters. It’s very difficult to outsell a high churn percent number. It’s like trying to scoop water out of a sinking boat faster than it’s sinking.” – Parker Moore, Head of Customer Success at Vitally For early-stage companies, retention is an indicator of product-market fit. “If you’re an early-stage company your retention is a key sign of your product-market fit. It’s something you should look at as often as you can. In the early days especially.” – Daniel Bakh, CEO & Co-founder at Fullview There’s more to gain from tracking retention than just financial insights. It also offers insights from the customer’s perspective. “If people come back to your product it usually means they are getting value. It’s a very healthy way to look into the value that people derivate from your product.” – Enzo Avigo, CEO & Co-founder at June What’s a good cadence and practices for checking SaaS retention data? There are a lot of different ways to look at your retention data. How you look at the data can help answer specific questions or tell a certain story. Taking a closer look at churn, in cohorts, for example, can pinpoint problem areas and help you strategize next moves. To get the most from your data it needs to be not only accurate but malleable as well. You want to manipulate data quickly to create different reports that tell different stories. There are multiple types of retention to consider: customer retention, gross revenue retention (GRR), and net revenue retention (NRR). Our panelists most commonly refer to NRR during our conversation. “I like looking at different cohorts—YTD, last 90, current quarter—they tell different stories. Overlay things like customer segment by NRR, or health score by NRR to actually see if it’s correlated to NRR retainment. There are a lot of ways cut it up, you need to look from different perspectives and choose what’s the most impactful or actionable for your team.” – Parker Moore, Head of Customer Success at Vitally The chart below was generated with ChartMogul Subscription Analytics to show NRR by regional segments. America, Canada, and Western Europe are the selected segments displayed. Comparing metrics by segments in ChartMogul lets you dive deeper. Who owns retention in SaaS B2B Ownership of retention is hard to nail down to one person or team. It’s dynamic and touches many teams and positions. Strategically it makes sense to look at it from many angles and decide which team has the most touchpoints with the angle in hand. “I really have the feeling that it’s a metric that is owned by many people or at least many people have an impact on. I think of it as a leading metric that is really high level with a lot of metrics that impact it—NPS is one of them.” – Enzo Avigo, CEO & Co-founder at June Recent SaaS retention trends and what’s happening in the market ROI is top of mind for buyers When adding to their tech stack they care more than ever about how much value a product brings. Tools that don’t directly contribute to revenue or savings are less likely to be adopted. “There’s a lot more scrutiny around ROI. CFOs are more involved in the buying/renewal process. You clearly need to dictate how a product has delivered business outcomes. B2B SaaS tools have not done a great job of building intuitive ways to capture ROI received from the product.” – Parker Moore, Head of Customer Success at Vitally People are consolidating their tech stacks. Clients may want to take a step back and review their tech stacks for non-crucial products. It’s a situation with a high potential for churn. Year-end reviews are just one case where you might see this. “The biggest lump in terms of churn was the end of the year when people started to consolidate their stack wanting to cut a lot of expenses. This is where we’ve seen the biggest drop (churn) … quite a few customers have seen the same.” – Enzo Avigo, CEO & Co-founder at June Buyers are more cautious There’s more scrutiny in the market around spending but it’s not always a bad thing. Potential clients who go the extra mile to justify buying a product are usually a good fit. Daniel says there’s a silver lining to the current market conditions. “You have less noise. You’ll be able to find a stronger product-market fit with the people who buy your product. There will be more signal and less noise versus 2021 and 2020 where people were just buying because they had so much money—which could really muddy the waters when it comes to understanding if you have product-market fit.” – Daniel Bakh, CEO & Co-founder at Fullview Customer retention strategies Go the extra mile to showcase value Proving value, high touch support, and proactive customer success are the echoing points when it comes to moving the needle on retention. Having a great product is the foundation but you need to go the extra mile and show value to the customer. “The more that CS teams can partner with product and marketing to ideally get ROI intuitively displayed in the product or at least start to create a consistent narrative that you can equip your champions with around ROI the better.” – Parker Moore, Head of Customer Success at Vitally Establish and iterate on your onboarding experience The onboarding stage is a great time to get on the same page with your customer and establish their definition of success. Once you have that you can craft their user experience so your product enables them to achieve those goals. “We learned recently that if you can understand the goal people have with your product, their success definition, then you can help them navigate that journey. Something we see a lot of great companies doing is really trying to understand why customers are adopting their tool, what’s goal and success definition and really trying to help them get there.” – Enzo Avigo, CEO & Co-founder at June Prioritize product and feature adoption At Fullview customer success includes ensuring product adoption by the user. Not only do customers get the most from all the features, but it also helps them reach their goals. “We try to be proactive in helping our customers. They come to us, onboard, and then we’re basically monitoring to make sure everything is going well. We don’t just let them off to do their own thing. We really try to see what is going on in their day-to-day usage of the product.” – Daniel Bakh, CEO & Co-founder at Fullview Align on OKRs with the new customer Parker discusses how at Vitally they align on the desired outcome and set up an OKR framework around those goals. Everything is documented in the product so there’s no ambiguity about what needs to be done. It’s also a nice feature for quickly presenting ROI within the tool. “In the beginning, we try to align on what outcome you want to achieve. We try to follow the OKR format—what’s the objective, the key result you want to drive, and by what time? Then drive that to completion and that’s the signal to align on the next goal with that customer. When someone in the organization questions the value of the tool we have it documented.” – Parker Moore, Head of Customer Success at Vitally Using discounts to increase retention or delay churn in the near term In any sales cycle the topic of discounts is bound to arise at some point. It’s a tool you can always use as leverage for the unwilling to convert. On this point there is unanimity amongst the panel: use discounts cautiously. It can be challenging for early-stage companies to understand your product-market fit and price point if you’re giving a high number of discounts. “You need to be a bit careful in the early stages because it can also give you a skewed view of your product-market fit. You’re also trying to validate that people want to pay at or above a certain threshold for your product.“ – Daniel Bakh, CEO & Co-founder at Fullview In the short-term, a discount can win you that contract. But keep in mind your lifetime value (LTV) to customer acquisition cost (CAC) ratio. Enzo brings up the point that you need to be mindful when discounting and ensure you’re dealing with the right persona. It’s worth considering the short and long-term implications of a discount. “If you discount the wrong persona or ICP, or they come for the wrong reason then you’re basically just delaying the churn. You’re gonna make a few bucks but it’s gonna hurt your NRR and other things that investors look at a lot.” “Something we learned early on was that the people who we gave the biggest discounts churned the most.” – Enzo Avigo, CEO & Co-founder at June Thank you to the panelists Parker Moore Head of Customer Success, Vitally Parker Moore is the Head of Customer Success at Vitally, which is a best-in-class Customer Success Platform for B2B SaaS companies. Since joining, he has grown the CS organization by 5x & been part of incredible customer growth. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Parker lives in Michigan with his wife and two boys. Enzo Avigo CEO & Co-founder, June Enzo Avigo is the Co-Founder of June.so – the next-gen analytics for B2B SaaS. Prior to founding June, Enzo has built 6+ years of experience in Product Management where he worked in various verticals – SaaS (Intercom), FinTech (N26) and eCommerce (Zalando) – and helped scale fast-growing companies. Daniel Bakh CEO & Co-founder, Fullview Daniel Bakh is the CEO and co-founder of Fullview. With a background in product-led growth, enterprise sales, and VC. Daniel is also an angel investor with over 40 startups in his portfolio. He started Fullview in May 2021 after experiencing first-hand the frustrations and inefficiencies of giving and receiving customer support.

<sys> [INST] B2B SaaS Retention Trends in 2023 [/INST] Retention is arguably the most critical metric in SaaS regardless of a company’s stage. We sit down with Daniel Bakh, CEO & Co-founder at Fullview, Parker Moore, Head of Customer Success at Vitally, and Enzo Avigo, CEO & Co-founder at June to discuss recent trends in this key metric. Sid Jain, Senior Analyst at ChartMogul, our panel moderator is loaded with retention-related insights after analyzing data from over 2,100 SaaS startups to publish the SaaS retention report. Together, they discuss three main topics: Customer retention rate, and why it’s important in B2B SaaS Recent SaaS retention trends and what’s happening in the market Customer retention strategies Customer retention rate, and why it’s important in B2B SaaS When it comes to the value of retention Parker puts it best, “Retention matters because revenue matters. It’s very difficult to outsell a high churn percent number. It’s like trying to scoop water out of a sinking boat faster than it’s sinking.” – Parker Moore, Head of Customer Success at Vitally For early-stage companies, retention is an indicator of product-market fit. “If you’re an early-stage company your retention is a key sign of your product-market fit. It’s something you should look at as often as you can. In the early days especially.” – Daniel Bakh, CEO & Co-founder at Fullview There’s more to gain from tracking retention than just financial insights. It also offers insights from the customer’s perspective. “If people come back to your product it usually means they are getting value. It’s a very healthy way to look into the value that people derivate from your product.” – Enzo Avigo, CEO & Co-founder at June What’s a good cadence and practices for checking SaaS retention data? There are a lot of different ways to look at your retention data. How you look at the data can help answer specific questions or tell a certain story. Taking a closer look at churn, in cohorts, for example, can pinpoint problem areas and help you strategize next moves. To get the most from your data it needs to be not only accurate but malleable as well. You want to manipulate data quickly to create different reports that tell different stories. There are multiple types of retention to consider: customer retention, gross revenue retention (GRR), and net revenue retention (NRR). Our panelists most commonly refer to NRR during our conversation. “I like looking at different cohorts—YTD, last 90, current quarter—they tell different stories. Overlay things like customer segment by NRR, or health score by NRR to actually see if it’s correlated to NRR retainment. There are a lot of ways cut it up, you need to look from different perspectives and choose what’s the most impactful or actionable for your team.” – Parker Moore, Head of Customer Success at Vitally The chart below was generated with ChartMogul Subscription Analytics to show NRR by regional segments. America, Canada, and Western Europe are the selected segments displayed. Comparing metrics by segments in ChartMogul lets you dive deeper. Who owns retention in SaaS B2B Ownership of retention is hard to nail down to one person or team. It’s dynamic and touches many teams and positions. Strategically it makes sense to look at it from many angles and decide which team has the most touchpoints with the angle in hand. “I really have the feeling that it’s a metric that is owned by many people or at least many people have an impact on. I think of it as a leading metric that is really high level with a lot of metrics that impact it—NPS is one of them.” – Enzo Avigo, CEO & Co-founder at June Recent SaaS retention trends and what’s happening in the market ROI is top of mind for buyers When adding to their tech stack they care more than ever about how much value a product brings. Tools that don’t directly contribute to revenue or savings are less likely to be adopted. “There’s a lot more scrutiny around ROI. CFOs are more involved in the buying/renewal process. You clearly need to dictate how a product has delivered business outcomes. B2B SaaS tools have not done a great job of building intuitive ways to capture ROI received from the product.” – Parker Moore, Head of Customer Success at Vitally People are consolidating their tech stacks. Clients may want to take a step back and review their tech stacks for non-crucial products. It’s a situation with a high potential for churn. Year-end reviews are just one case where you might see this. “The biggest lump in terms of churn was the end of the year when people started to consolidate their stack wanting to cut a lot of expenses. This is where we’ve seen the biggest drop (churn) … quite a few customers have seen the same.” – Enzo Avigo, CEO & Co-founder at June Buyers are more cautious There’s more scrutiny in the market around spending but it’s not always a bad thing. Potential clients who go the extra mile to justify buying a product are usually a good fit. Daniel says there’s a silver lining to the current market conditions. “You have less noise. You’ll be able to find a stronger product-market fit with the people who buy your product. There will be more signal and less noise versus 2021 and 2020 where people were just buying because they had so much money—which could really muddy the waters when it comes to understanding if you have product-market fit.” – Daniel Bakh, CEO & Co-founder at Fullview Customer retention strategies Go the extra mile to showcase value Proving value, high touch support, and proactive customer success are the echoing points when it comes to moving the needle on retention. Having a great product is the foundation but you need to go the extra mile and show value to the customer. “The more that CS teams can partner with product and marketing to ideally get ROI intuitively displayed in the product or at least start to create a consistent narrative that you can equip your champions with around ROI the better.” – Parker Moore, Head of Customer Success at Vitally Establish and iterate on your onboarding experience The onboarding stage is a great time to get on the same page with your customer and establish their definition of success. Once you have that you can craft their user experience so your product enables them to achieve those goals. “We learned recently that if you can understand the goal people have with your product, their success definition, then you can help them navigate that journey. Something we see a lot of great companies doing is really trying to understand why customers are adopting their tool, what’s goal and success definition and really trying to help them get there.” – Enzo Avigo, CEO & Co-founder at June Prioritize product and feature adoption At Fullview customer success includes ensuring product adoption by the user. Not only do customers get the most from all the features, but it also helps them reach their goals. “We try to be proactive in helping our customers. They come to us, onboard, and then we’re basically monitoring to make sure everything is going well. We don’t just let them off to do their own thing. We really try to see what is going on in their day-to-day usage of the product.” – Daniel Bakh, CEO & Co-founder at Fullview Align on OKRs with the new customer Parker discusses how at Vitally they align on the desired outcome and set up an OKR framework around those goals. Everything is documented in the product so there’s no ambiguity about what needs to be done. It’s also a nice feature for quickly presenting ROI within the tool. “In the beginning, we try to align on what outcome you want to achieve. We try to follow the OKR format—what’s the objective, the key result you want to drive, and by what time? Then drive that to completion and that’s the signal to align on the next goal with that customer. When someone in the organization questions the value of the tool we have it documented.” – Parker Moore, Head of Customer Success at Vitally Using discounts to increase retention or delay churn in the near term In any sales cycle the topic of discounts is bound to arise at some point. It’s a tool you can always use as leverage for the unwilling to convert. On this point there is unanimity amongst the panel: use discounts cautiously. It can be challenging for early-stage companies to understand your product-market fit and price point if you’re giving a high number of discounts. “You need to be a bit careful in the early stages because it can also give you a skewed view of your product-market fit. You’re also trying to validate that people want to pay at or above a certain threshold for your product.“ – Daniel Bakh, CEO & Co-founder at Fullview In the short-term, a discount can win you that contract. But keep in mind your lifetime value (LTV) to customer acquisition cost (CAC) ratio. Enzo brings up the point that you need to be mindful when discounting and ensure you’re dealing with the right persona. It’s worth considering the short and long-term implications of a discount. “If you discount the wrong persona or ICP, or they come for the wrong reason then you’re basically just delaying the churn. You’re gonna make a few bucks but it’s gonna hurt your NRR and other things that investors look at a lot.” “Something we learned early on was that the people who we gave the biggest discounts churned the most.” – Enzo Avigo, CEO & Co-founder at June Thank you to the panelists Parker Moore Head of Customer Success, Vitally Parker Moore is the Head of Customer Success at Vitally, which is a best-in-class Customer Success Platform for B2B SaaS companies. Since joining, he has grown the CS organization by 5x & been part of incredible customer growth. Prior to Vitally, Parker worked at HubSpot and Eventbrite, where he helped build out the Customer Success function. Parker lives in Michigan with his wife and two boys. Enzo Avigo CEO & Co-founder, June Enzo Avigo is the Co-Founder of June.so – the next-gen analytics for B2B SaaS. Prior to founding June, Enzo has built 6+ years of experience in Product Management where he worked in various verticals – SaaS (Intercom), FinTech (N26) and eCommerce (Zalando) – and helped scale fast-growing companies. Daniel Bakh CEO & Co-founder, Fullview Daniel Bakh is the CEO and co-founder of Fullview. With a background in product-led growth, enterprise sales, and VC. Daniel is also an angel investor with over 40 startups in his portfolio. He started Fullview in May 2021 after experiencing first-hand the frustrations and inefficiencies of giving and receiving customer support. </sys

🚀 SaaS Roundup #127. 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. Our top three reads How Alex Theuma Built the Biggest SaaS Conference in Europe Sujan Patel for Entrepreneur “It’s true what they say: Your network is your net worth. Building your network allows you to grow a community and a following — followers who will buy what you plan to sell.” Sujan Patel It’s fascinating to see how Alex Theuma built both the SaaStock event and brand from scratch. But, perhaps surprisingly, Alex didn’t actually intend on building a conference when he started out. Sujan pulls out some nice reusable lessons in this piece. Read the full post The Missing “Magic Metric” for Customer Success Philip F Lay, Octopus Ventures “Keep in mind that retention is quite distinct from defection; in the former case, a customer may simply not renew a contract because the original problem they were solving has gone away or is being solved by different means, whereas in the latter they not only cancel the contract but choose a competing provider.” Philip F Lay In this detailed post, Philip digs into some of the gaps in metrics used by different business functions. Your average SaaS businesses deploys a plethora of metrics across different teams, but what about the conflicts of interest created when everyone’s optimizing for slightly different outcomes? Read the full post Avoiding the summertime lull: why mentoring your team is critical to keeping production up year-round Collin Stewart, Predictable Revenue “There’s a long-held belief that July and August are months where prospects are impossible to get on the phone, demos can’t get scheduled, and deals don’t happen. As a result, salespeople take a collective foot of the gas and wait for the busy fall season to ramp up. But in my years as a sales leader, summer has actually proven to be the opposite.” Collin Stewart July and August are always bad months for SaaS sales. Right? But at what point does this just become a self-fulfilling prophecy? As Collin explains in this well timed post, those summer months can actually be leveraged in different ways. The linked podcast with Zach Barney on SDR processes is great too. Read the full post 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 #127 [/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. Our top three reads How Alex Theuma Built the Biggest SaaS Conference in Europe Sujan Patel for Entrepreneur “It’s true what they say: Your network is your net worth. Building your network allows you to grow a community and a following — followers who will buy what you plan to sell.” Sujan Patel It’s fascinating to see how Alex Theuma built both the SaaStock event and brand from scratch. But, perhaps surprisingly, Alex didn’t actually intend on building a conference when he started out. Sujan pulls out some nice reusable lessons in this piece. Read the full post The Missing “Magic Metric” for Customer Success Philip F Lay, Octopus Ventures “Keep in mind that retention is quite distinct from defection; in the former case, a customer may simply not renew a contract because the original problem they were solving has gone away or is being solved by different means, whereas in the latter they not only cancel the contract but choose a competing provider.” Philip F Lay In this detailed post, Philip digs into some of the gaps in metrics used by different business functions. Your average SaaS businesses deploys a plethora of metrics across different teams, but what about the conflicts of interest created when everyone’s optimizing for slightly different outcomes? Read the full post Avoiding the summertime lull: why mentoring your team is critical to keeping production up year-round Collin Stewart, Predictable Revenue “There’s a long-held belief that July and August are months where prospects are impossible to get on the phone, demos can’t get scheduled, and deals don’t happen. As a result, salespeople take a collective foot of the gas and wait for the busy fall season to ramp up. But in my years as a sales leader, summer has actually proven to be the opposite.” Collin Stewart July and August are always bad months for SaaS sales. Right? But at what point does this just become a self-fulfilling prophecy? As Collin explains in this well timed post, those summer months can actually be leveraged in different ways. The linked podcast with Zach Barney on SDR processes is great too. Read the full post 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 #127 [/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. Our top three reads How Alex Theuma Built the Biggest SaaS Conference in Europe Sujan Patel for Entrepreneur “It’s true what they say: Your network is your net worth. Building your network allows you to grow a community and a following — followers who will buy what you plan to sell.” Sujan Patel It’s fascinating to see how Alex Theuma built both the SaaStock event and brand from scratch. But, perhaps surprisingly, Alex didn’t actually intend on building a conference when he started out. Sujan pulls out some nice reusable lessons in this piece. Read the full post The Missing “Magic Metric” for Customer Success Philip F Lay, Octopus Ventures “Keep in mind that retention is quite distinct from defection; in the former case, a customer may simply not renew a contract because the original problem they were solving has gone away or is being solved by different means, whereas in the latter they not only cancel the contract but choose a competing provider.” Philip F Lay In this detailed post, Philip digs into some of the gaps in metrics used by different business functions. Your average SaaS businesses deploys a plethora of metrics across different teams, but what about the conflicts of interest created when everyone’s optimizing for slightly different outcomes? Read the full post Avoiding the summertime lull: why mentoring your team is critical to keeping production up year-round Collin Stewart, Predictable Revenue “There’s a long-held belief that July and August are months where prospects are impossible to get on the phone, demos can’t get scheduled, and deals don’t happen. As a result, salespeople take a collective foot of the gas and wait for the busy fall season to ramp up. But in my years as a sales leader, summer has actually proven to be the opposite.” Collin Stewart July and August are always bad months for SaaS sales. Right? But at what point does this just become a self-fulfilling prophecy? As Collin explains in this well timed post, those summer months can actually be leveraged in different ways. The linked podcast with Zach Barney on SDR processes is great too. Read the full post 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

How to Use High-End Courses to Grow Your SaaS Company. This is a guest post by Nico Prins. Nico is an online marketer and the founder of Launch Space. He helps companies make money blogging. He’s worked with everyone from Fortune 500 companies to startups helping them develop content marketing strategies that align with their business goals. The problem with SaaS is getting people to see the value in your product. This is difficult, especially if your product is complex. Moreover, in every niche, you will have dozens of competitors with a similar product offering, often at a lower price point. Some companies have found a curious way to overcome this challenge — by offering high-end courses. In this guide, I’ll cover why one of the biggest problems impacting the growth of your SaaS company is churn. I’ll then show you why a high-end course could be your solution and provide some real-world examples of companies that are having great success with this method (including one company that scaled to millions of dollars in Annual Recurring Revenue in just a few short years). The Link Between Usage and Lifetime Value Usage, or consumption, measures the engagement of customers with your product. As a general rule of thumb, the higher the rate of consumption the more value they are seeing from your service. The most engaged users are the ones who are most likely to stay with you for the long term. Or to rephrase that using business lingo… There is a clear correlation between the rate of consumption and customer LTV. Below is a nice example of the kind of correlation companies tend to see when they get an engaged user. You can see a graph from a study by Harvard Business Review that has some interesting stats on how consumption impacts LTV. The data is based on analysis of membership trends for a gym/country club in the US. Source: HBR The graph shows how payment plans impact usage. In the example above, you can see there is a correlation between how much people use a service and their willingness to pay for it. If a customer doesn’t see value in the product or service they won’t pay. Low rates of consumption are less of a problem for a company selling a product, but for a SaaS company that needs to “sell” a renewal every month low consumption rates result in high churn. If you can reduce your churn you can scale your company faster. All of this data highlights the point that if you want to keep the people who sign up for your SaaS product, they need to receive a benefit or they will question why they are paying you. Why Are Courses a Good Way to Scale Your SaaS Company There are many methods for reducing churn, but fundamentally every strategy boils down to ensuring that the benefits a customer receives outweigh the cost of the service you are offering. A course is a useful tool for growing your company when knowledge is an important element in your customers’ success. Let me give you a couple of hypothetical examples to make my point: If a customer finds it easier to use your blogger outreach software to generate guest post opportunities than they would without it, then the software is useful When a customer can use your email marketing software to make more money, they are happy If a customer finds it easier to use your Facebook Ads software to run their PPC campaigns, you are onto a winner In all of the examples listed above, your software is just a tool for achieving a business goal. For example, to get the most use of email marketing software you need to: Have an email list or be able to grow one Understand the basics of email marketing and email sequences Know how to write a sales email Without this knowledge, you won’t make the best use of the software. If you aren’t using the tool or seeing a positive result, there is a higher chance you will stop using it. A course can help fill in these knowledge gaps for your customers. Of course, you should only provide a course to your customers when the goals of your business align with those of the customer. There is little value in you offering a course about how to code if you are running a graphic design platform. While you might find people who are willing to buy the course, the knowledge they get won’t help them use your tool. Should You Charge For Your Course So now we get onto the issue of pricing. The title of this guide is “How to Use High-End Courses to Grow Your SaaS Company.” In this instance high-end means expensive. In this article, I look at three examples of companies that have used courses costing $500 or more to grow their SaaS business. There are a couple of reasons you might want to sell a course to grow your SaaS company: Revenue: Selling a course generates revenue that you can reinvest into the business; Motivation: People who pay for a course supposedly get more value from it and are more likely to complete it; Self-Selection: The people who buy a course have the budget and desire to succeed. You can segment these customers and offer them additional support. The first statement is obviously true. Online courses are a huge (and growing) industry. In regards to the second statement, there is no clear correlation between the price of an online course and the completion rate. Course creators love to use it to justify why customers should spend a lot of money on their course, but the completion rate of a course depends above all on the quality of the content. There is a case for providing a free course to your customers. The obvious benefit is that everyone will get access to it. You can also use the free course as an enticement for signing up to your platform, or as part of the customer onboarding process. Let’s look at some real-life business development strategies from companies using high-end courses to acquire and retain customers. Market Hero If you want an absolute masterclass in how to grow a SaaS company with high-end courses, you need look no further than Market Hero. The company has created an email automation program designed for people running a Shopify store. In a saturated niche, Market Hero laser-focused on their target audience. When this email automation platform launched a few years ago, you could have been forgiven for thinking that the market was already sewn up by major low-cost players like MailChimp, as many mimicked their successful “forever free” pricing and there are now plenty of email software tools. Within a few short years, Alex Becker grew the company into a multi-million dollar enterprise. So how did Market Hero scale so quickly? A large part of their success can be attributed to an innovative customer acquisition funnel based on selling an expensive e-commerce course. The course is priced at around $2,000. This fluctuates based on testing. Wrapped up in the course, which provides the theory for creating a successful e-commerce store, is a 3-month license to Market Hero. Below is a quick overview of what the acquisition funnel looks like: The funnel starts with Youtube Ads that target people who are likely to purchase the course. They are then sent to the webinar signup page. You can access the page here. When you sign up you are sent a confirmation email. You will be sent to a webinar where Alex Becker will try to sell you his e-commerce course. If you don’t purchase the course then you are sent a series of follow up emails. The sales funnel Market Hero use has been carefully optimized over the years. They cover the cost of the ad spend from people who sign up for the course. This also serves as a lead generation campaign. For each person that signs up, they get hundreds of people who don’t, who are still potential Market Hero customers. For example: You advertise to 100,000 people with a FB ad 1,000 people sign up to the webinar and provide their email address 10 people buy the course Image Source: Email Monday The 990 people who didn’t buy the course are then targeted through email marketing, webinars, and other marketing channels to get them to sign up to Market Hero. It’s a system that enabled Market Hero to rapidly scale their user base. Introductory webinars are a great way to captivate and entertain your potential customers while building the trust needed to take the next step in the funnel. It allows you to warm them up for a longer commitment and take the high-end course. The registration for a webinar also allows you to collect emails and drive more webinar attendance through email. The reason this works so well is that each stage of this funnel is aimed at building up the capacity of people who want to start an e-commerce company. This capacity building is logically tied in with the SaaS product offering. In addition to using high-end courses as a customer acquisition strategy, Market Hero also give anyone that signs up to the platform access to courses. They understand the importance of consumption. Youzign Youzign is a one-stop-shop visual marketing platform for non-design geeks. They are operating in a competitive niche where the market leader Canva runs a freemium platform. To stand out in this vertical, Youzign offers a course titled Visual Story Mastery. Many of Youzign’s users are not design specialists. For this reason, most users need two types of capacity building: Develop an understanding of the business applications of the platform Learn some of the fundamentals of good design In addition to increasing consumption, students learn how to make their Youzign creations more effective in terms of their own business goals. This helps the product pay for itself. The third thing to consider within the context of Youzign is the value of the course as a means of generating a connection with students. Students who complete Visual Story Mastery spend hours listening to the founder talk at length about business and design. This is further reinforced through membership of an active Facebook group. As any psychologist would remind you, emotions shouldn’t be overlooked. Humans like to feel that they belong, which is why most people identify with a group or a set of beliefs. A course can form the introduction to such a group. The course is closely tied to the product offering. People who purchase the course get access to a free 6-month subscription to the product itself. This is crucial. In the bootstrapped startup economy, high-end courses allows SaaS to acquire paid subscribers at no cost. This formula has worked for companies like Clickfunnels and its CEO Russel Brunson, allowing them to gross over $100 million in just a couple of years without any outside investment. We are applying the same strategy to grow our user base over here atYouzign. Bertrand, Founder of Youzign Youzign understands that increased consumption of their course goes hand in hand with increased consumption of their product. And it’s all about maximizing user capacity. Vyper Vyper is an online software platform that enables customers to run online competitions. They have used expensive courses to grow their customer base. They offer several courses that aim to improve the capacity of their users to successfully utilize their platform. One of the co-founders of the company, Jack Paxton, conducted interviews with customers to identify their pain points. Based on responses they found that there is a correlation between the ability to run a successful Facebook advertising campaign and the chance of a competition being successful. As a result of this customer research, they decided to create three courses. According to Jack, the aim of the courses is two-fold: To provide users with the underlying skills they needed to run effective competitions To establish expertise and credibility with users The Viral Facebook Academy, the most expensive course, is aimed at customers who have the budget to scale and become super users. The course covers everything about Facebook advertising, from copywriting through to targeting. There isn’t even a mention of how to run a competition using Facebook until the 15th and final installment. Unlike the other two examples, Vyper’s flagship Facebook Academy course comes with a free lifetime license of the Pro version of their platform. A quick look at their product range says a lot about why they do this. You’ll notice that the Pro license is limited both in terms of the number of competition participants it allows, and the total amount of trackable revenue. The ultimate aim of the course and license giveaway is to maximize consumption to the point that users are ready to move on to purchasing the Enterprise and Agency Licenses. This is their ideal customer target demographic. How You Can Use Courses To Grow Your SaaS High-end courses are a powerful method for both acquiring new customers, and keeping the ones that you have. Creating sellable courses that help your students achieve specific results that are closely tied to your product offering can increase consumption. Additionally, creating valuable courses to drip-feed insights to your existing customers improves your retention, by ensuring that they can use the product to the fullest. In both cases, the aim remains the same — getting people to stick with your product.

[INST] How to Use High-End Courses to Grow Your SaaS Company [/INST]

This is a guest post by Nico Prins. Nico is an online marketer and the founder of Launch Space. He helps companies make money blogging. He’s worked with everyone from Fortune 500 companies to startups helping them develop content marketing strategies that align with their business goals. The problem with SaaS is getting people to see the value in your product. This is difficult, especially if your product is complex. Moreover, in every niche, you will have dozens of competitors with a similar product offering, often at a lower price point. Some companies have found a curious way to overcome this challenge — by offering high-end courses. In this guide, I’ll cover why one of the biggest problems impacting the growth of your SaaS company is churn. I’ll then show you why a high-end course could be your solution and provide some real-world examples of companies that are having great success with this method (including one company that scaled to millions of dollars in Annual Recurring Revenue in just a few short years). The Link Between Usage and Lifetime Value Usage, or consumption, measures the engagement of customers with your product. As a general rule of thumb, the higher the rate of consumption the more value they are seeing from your service. The most engaged users are the ones who are most likely to stay with you for the long term. Or to rephrase that using business lingo… There is a clear correlation between the rate of consumption and customer LTV. Below is a nice example of the kind of correlation companies tend to see when they get an engaged user. You can see a graph from a study by Harvard Business Review that has some interesting stats on how consumption impacts LTV. The data is based on analysis of membership trends for a gym/country club in the US. Source: HBR The graph shows how payment plans impact usage. In the example above, you can see there is a correlation between how much people use a service and their willingness to pay for it. If a customer doesn’t see value in the product or service they won’t pay. Low rates of consumption are less of a problem for a company selling a product, but for a SaaS company that needs to “sell” a renewal every month low consumption rates result in high churn. If you can reduce your churn you can scale your company faster. All of this data highlights the point that if you want to keep the people who sign up for your SaaS product, they need to receive a benefit or they will question why they are paying you. Why Are Courses a Good Way to Scale Your SaaS Company There are many methods for reducing churn, but fundamentally every strategy boils down to ensuring that the benefits a customer receives outweigh the cost of the service you are offering. A course is a useful tool for growing your company when knowledge is an important element in your customers’ success. Let me give you a couple of hypothetical examples to make my point: If a customer finds it easier to use your blogger outreach software to generate guest post opportunities than they would without it, then the software is useful When a customer can use your email marketing software to make more money, they are happy If a customer finds it easier to use your Facebook Ads software to run their PPC campaigns, you are onto a winner In all of the examples listed above, your software is just a tool for achieving a business goal. For example, to get the most use of email marketing software you need to: Have an email list or be able to grow one Understand the basics of email marketing and email sequences Know how to write a sales email Without this knowledge, you won’t make the best use of the software. If you aren’t using the tool or seeing a positive result, there is a higher chance you will stop using it. A course can help fill in these knowledge gaps for your customers. Of course, you should only provide a course to your customers when the goals of your business align with those of the customer. There is little value in you offering a course about how to code if you are running a graphic design platform. While you might find people who are willing to buy the course, the knowledge they get won’t help them use your tool. Should You Charge For Your Course So now we get onto the issue of pricing. The title of this guide is “How to Use High-End Courses to Grow Your SaaS Company.” In this instance high-end means expensive. In this article, I look at three examples of companies that have used courses costing $500 or more to grow their SaaS business. There are a couple of reasons you might want to sell a course to grow your SaaS company: Revenue: Selling a course generates revenue that you can reinvest into the business; Motivation: People who pay for a course supposedly get more value from it and are more likely to complete it; Self-Selection: The people who buy a course have the budget and desire to succeed. You can segment these customers and offer them additional support. The first statement is obviously true. Online courses are a huge (and growing) industry. In regards to the second statement, there is no clear correlation between the price of an online course and the completion rate. Course creators love to use it to justify why customers should spend a lot of money on their course, but the completion rate of a course depends above all on the quality of the content. There is a case for providing a free course to your customers. The obvious benefit is that everyone will get access to it. You can also use the free course as an enticement for signing up to your platform, or as part of the customer onboarding process. Let’s look at some real-life business development strategies from companies using high-end courses to acquire and retain customers. Market Hero If you want an absolute masterclass in how to grow a SaaS company with high-end courses, you need look no further than Market Hero. The company has created an email automation program designed for people running a Shopify store. In a saturated niche, Market Hero laser-focused on their target audience. When this email automation platform launched a few years ago, you could have been forgiven for thinking that the market was already sewn up by major low-cost players like MailChimp, as many mimicked their successful “forever free” pricing and there are now plenty of email software tools. Within a few short years, Alex Becker grew the company into a multi-million dollar enterprise. So how did Market Hero scale so quickly? A large part of their success can be attributed to an innovative customer acquisition funnel based on selling an expensive e-commerce course. The course is priced at around $2,000. This fluctuates based on testing. Wrapped up in the course, which provides the theory for creating a successful e-commerce store, is a 3-month license to Market Hero. Below is a quick overview of what the acquisition funnel looks like: The funnel starts with Youtube Ads that target people who are likely to purchase the course. They are then sent to the webinar signup page. You can access the page here. When you sign up you are sent a confirmation email. You will be sent to a webinar where Alex Becker will try to sell you his e-commerce course. If you don’t purchase the course then you are sent a series of follow up emails. The sales funnel Market Hero use has been carefully optimized over the years. They cover the cost of the ad spend from people who sign up for the course. This also serves as a lead generation campaign. For each person that signs up, they get hundreds of people who don’t, who are still potential Market Hero customers. For example: You advertise to 100,000 people with a FB ad 1,000 people sign up to the webinar and provide their email address 10 people buy the course Image Source: Email Monday The 990 people who didn’t buy the course are then targeted through email marketing, webinars, and other marketing channels to get them to sign up to Market Hero. It’s a system that enabled Market Hero to rapidly scale their user base. Introductory webinars are a great way to captivate and entertain your potential customers while building the trust needed to take the next step in the funnel. It allows you to warm them up for a longer commitment and take the high-end course. The registration for a webinar also allows you to collect emails and drive more webinar attendance through email. The reason this works so well is that each stage of this funnel is aimed at building up the capacity of people who want to start an e-commerce company. This capacity building is logically tied in with the SaaS product offering. In addition to using high-end courses as a customer acquisition strategy, Market Hero also give anyone that signs up to the platform access to courses. They understand the importance of consumption. Youzign Youzign is a one-stop-shop visual marketing platform for non-design geeks. They are operating in a competitive niche where the market leader Canva runs a freemium platform. To stand out in this vertical, Youzign offers a course titled Visual Story Mastery. Many of Youzign’s users are not design specialists. For this reason, most users need two types of capacity building: Develop an understanding of the business applications of the platform Learn some of the fundamentals of good design In addition to increasing consumption, students learn how to make their Youzign creations more effective in terms of their own business goals. This helps the product pay for itself. The third thing to consider within the context of Youzign is the value of the course as a means of generating a connection with students. Students who complete Visual Story Mastery spend hours listening to the founder talk at length about business and design. This is further reinforced through membership of an active Facebook group. As any psychologist would remind you, emotions shouldn’t be overlooked. Humans like to feel that they belong, which is why most people identify with a group or a set of beliefs. A course can form the introduction to such a group. The course is closely tied to the product offering. People who purchase the course get access to a free 6-month subscription to the product itself. This is crucial. In the bootstrapped startup economy, high-end courses allows SaaS to acquire paid subscribers at no cost. This formula has worked for companies like Clickfunnels and its CEO Russel Brunson, allowing them to gross over $100 million in just a couple of years without any outside investment. We are applying the same strategy to grow our user base over here atYouzign. Bertrand, Founder of Youzign Youzign understands that increased consumption of their course goes hand in hand with increased consumption of their product. And it’s all about maximizing user capacity. Vyper Vyper is an online software platform that enables customers to run online competitions. They have used expensive courses to grow their customer base. They offer several courses that aim to improve the capacity of their users to successfully utilize their platform. One of the co-founders of the company, Jack Paxton, conducted interviews with customers to identify their pain points. Based on responses they found that there is a correlation between the ability to run a successful Facebook advertising campaign and the chance of a competition being successful. As a result of this customer research, they decided to create three courses. According to Jack, the aim of the courses is two-fold: To provide users with the underlying skills they needed to run effective competitions To establish expertise and credibility with users The Viral Facebook Academy, the most expensive course, is aimed at customers who have the budget to scale and become super users. The course covers everything about Facebook advertising, from copywriting through to targeting. There isn’t even a mention of how to run a competition using Facebook until the 15th and final installment. Unlike the other two examples, Vyper’s flagship Facebook Academy course comes with a free lifetime license of the Pro version of their platform. A quick look at their product range says a lot about why they do this. You’ll notice that the Pro license is limited both in terms of the number of competition participants it allows, and the total amount of trackable revenue. The ultimate aim of the course and license giveaway is to maximize consumption to the point that users are ready to move on to purchasing the Enterprise and Agency Licenses. This is their ideal customer target demographic. How You Can Use Courses To Grow Your SaaS High-end courses are a powerful method for both acquiring new customers, and keeping the ones that you have. Creating sellable courses that help your students achieve specific results that are closely tied to your product offering can increase consumption. Additionally, creating valuable courses to drip-feed insights to your existing customers improves your retention, by ensuring that they can use the product to the fullest. In both cases, the aim remains the same — getting people to stick with your product.

<sys> [INST] How to Use High-End Courses to Grow Your SaaS Company [/INST] This is a guest post by Nico Prins. Nico is an online marketer and the founder of Launch Space. He helps companies make money blogging. He’s worked with everyone from Fortune 500 companies to startups helping them develop content marketing strategies that align with their business goals. The problem with SaaS is getting people to see the value in your product. This is difficult, especially if your product is complex. Moreover, in every niche, you will have dozens of competitors with a similar product offering, often at a lower price point. Some companies have found a curious way to overcome this challenge — by offering high-end courses. In this guide, I’ll cover why one of the biggest problems impacting the growth of your SaaS company is churn. I’ll then show you why a high-end course could be your solution and provide some real-world examples of companies that are having great success with this method (including one company that scaled to millions of dollars in Annual Recurring Revenue in just a few short years). The Link Between Usage and Lifetime Value Usage, or consumption, measures the engagement of customers with your product. As a general rule of thumb, the higher the rate of consumption the more value they are seeing from your service. The most engaged users are the ones who are most likely to stay with you for the long term. Or to rephrase that using business lingo… There is a clear correlation between the rate of consumption and customer LTV. Below is a nice example of the kind of correlation companies tend to see when they get an engaged user. You can see a graph from a study by Harvard Business Review that has some interesting stats on how consumption impacts LTV. The data is based on analysis of membership trends for a gym/country club in the US. Source: HBR The graph shows how payment plans impact usage. In the example above, you can see there is a correlation between how much people use a service and their willingness to pay for it. If a customer doesn’t see value in the product or service they won’t pay. Low rates of consumption are less of a problem for a company selling a product, but for a SaaS company that needs to “sell” a renewal every month low consumption rates result in high churn. If you can reduce your churn you can scale your company faster. All of this data highlights the point that if you want to keep the people who sign up for your SaaS product, they need to receive a benefit or they will question why they are paying you. Why Are Courses a Good Way to Scale Your SaaS Company There are many methods for reducing churn, but fundamentally every strategy boils down to ensuring that the benefits a customer receives outweigh the cost of the service you are offering. A course is a useful tool for growing your company when knowledge is an important element in your customers’ success. Let me give you a couple of hypothetical examples to make my point: If a customer finds it easier to use your blogger outreach software to generate guest post opportunities than they would without it, then the software is useful When a customer can use your email marketing software to make more money, they are happy If a customer finds it easier to use your Facebook Ads software to run their PPC campaigns, you are onto a winner In all of the examples listed above, your software is just a tool for achieving a business goal. For example, to get the most use of email marketing software you need to: Have an email list or be able to grow one Understand the basics of email marketing and email sequences Know how to write a sales email Without this knowledge, you won’t make the best use of the software. If you aren’t using the tool or seeing a positive result, there is a higher chance you will stop using it. A course can help fill in these knowledge gaps for your customers. Of course, you should only provide a course to your customers when the goals of your business align with those of the customer. There is little value in you offering a course about how to code if you are running a graphic design platform. While you might find people who are willing to buy the course, the knowledge they get won’t help them use your tool. Should You Charge For Your Course So now we get onto the issue of pricing. The title of this guide is “How to Use High-End Courses to Grow Your SaaS Company.” In this instance high-end means expensive. In this article, I look at three examples of companies that have used courses costing $500 or more to grow their SaaS business. There are a couple of reasons you might want to sell a course to grow your SaaS company: Revenue: Selling a course generates revenue that you can reinvest into the business; Motivation: People who pay for a course supposedly get more value from it and are more likely to complete it; Self-Selection: The people who buy a course have the budget and desire to succeed. You can segment these customers and offer them additional support. The first statement is obviously true. Online courses are a huge (and growing) industry. In regards to the second statement, there is no clear correlation between the price of an online course and the completion rate. Course creators love to use it to justify why customers should spend a lot of money on their course, but the completion rate of a course depends above all on the quality of the content. There is a case for providing a free course to your customers. The obvious benefit is that everyone will get access to it. You can also use the free course as an enticement for signing up to your platform, or as part of the customer onboarding process. Let’s look at some real-life business development strategies from companies using high-end courses to acquire and retain customers. Market Hero If you want an absolute masterclass in how to grow a SaaS company with high-end courses, you need look no further than Market Hero. The company has created an email automation program designed for people running a Shopify store. In a saturated niche, Market Hero laser-focused on their target audience. When this email automation platform launched a few years ago, you could have been forgiven for thinking that the market was already sewn up by major low-cost players like MailChimp, as many mimicked their successful “forever free” pricing and there are now plenty of email software tools. Within a few short years, Alex Becker grew the company into a multi-million dollar enterprise. So how did Market Hero scale so quickly? A large part of their success can be attributed to an innovative customer acquisition funnel based on selling an expensive e-commerce course. The course is priced at around $2,000. This fluctuates based on testing. Wrapped up in the course, which provides the theory for creating a successful e-commerce store, is a 3-month license to Market Hero. Below is a quick overview of what the acquisition funnel looks like: The funnel starts with Youtube Ads that target people who are likely to purchase the course. They are then sent to the webinar signup page. You can access the page here. When you sign up you are sent a confirmation email. You will be sent to a webinar where Alex Becker will try to sell you his e-commerce course. If you don’t purchase the course then you are sent a series of follow up emails. The sales funnel Market Hero use has been carefully optimized over the years. They cover the cost of the ad spend from people who sign up for the course. This also serves as a lead generation campaign. For each person that signs up, they get hundreds of people who don’t, who are still potential Market Hero customers. For example: You advertise to 100,000 people with a FB ad 1,000 people sign up to the webinar and provide their email address 10 people buy the course Image Source: Email Monday The 990 people who didn’t buy the course are then targeted through email marketing, webinars, and other marketing channels to get them to sign up to Market Hero. It’s a system that enabled Market Hero to rapidly scale their user base. Introductory webinars are a great way to captivate and entertain your potential customers while building the trust needed to take the next step in the funnel. It allows you to warm them up for a longer commitment and take the high-end course. The registration for a webinar also allows you to collect emails and drive more webinar attendance through email. The reason this works so well is that each stage of this funnel is aimed at building up the capacity of people who want to start an e-commerce company. This capacity building is logically tied in with the SaaS product offering. In addition to using high-end courses as a customer acquisition strategy, Market Hero also give anyone that signs up to the platform access to courses. They understand the importance of consumption. Youzign Youzign is a one-stop-shop visual marketing platform for non-design geeks. They are operating in a competitive niche where the market leader Canva runs a freemium platform. To stand out in this vertical, Youzign offers a course titled Visual Story Mastery. Many of Youzign’s users are not design specialists. For this reason, most users need two types of capacity building: Develop an understanding of the business applications of the platform Learn some of the fundamentals of good design In addition to increasing consumption, students learn how to make their Youzign creations more effective in terms of their own business goals. This helps the product pay for itself. The third thing to consider within the context of Youzign is the value of the course as a means of generating a connection with students. Students who complete Visual Story Mastery spend hours listening to the founder talk at length about business and design. This is further reinforced through membership of an active Facebook group. As any psychologist would remind you, emotions shouldn’t be overlooked. Humans like to feel that they belong, which is why most people identify with a group or a set of beliefs. A course can form the introduction to such a group. The course is closely tied to the product offering. People who purchase the course get access to a free 6-month subscription to the product itself. This is crucial. In the bootstrapped startup economy, high-end courses allows SaaS to acquire paid subscribers at no cost. This formula has worked for companies like Clickfunnels and its CEO Russel Brunson, allowing them to gross over $100 million in just a couple of years without any outside investment. We are applying the same strategy to grow our user base over here atYouzign. Bertrand, Founder of Youzign Youzign understands that increased consumption of their course goes hand in hand with increased consumption of their product. And it’s all about maximizing user capacity. Vyper Vyper is an online software platform that enables customers to run online competitions. They have used expensive courses to grow their customer base. They offer several courses that aim to improve the capacity of their users to successfully utilize their platform. One of the co-founders of the company, Jack Paxton, conducted interviews with customers to identify their pain points. Based on responses they found that there is a correlation between the ability to run a successful Facebook advertising campaign and the chance of a competition being successful. As a result of this customer research, they decided to create three courses. According to Jack, the aim of the courses is two-fold: To provide users with the underlying skills they needed to run effective competitions To establish expertise and credibility with users The Viral Facebook Academy, the most expensive course, is aimed at customers who have the budget to scale and become super users. The course covers everything about Facebook advertising, from copywriting through to targeting. There isn’t even a mention of how to run a competition using Facebook until the 15th and final installment. Unlike the other two examples, Vyper’s flagship Facebook Academy course comes with a free lifetime license of the Pro version of their platform. A quick look at their product range says a lot about why they do this. You’ll notice that the Pro license is limited both in terms of the number of competition participants it allows, and the total amount of trackable revenue. The ultimate aim of the course and license giveaway is to maximize consumption to the point that users are ready to move on to purchasing the Enterprise and Agency Licenses. This is their ideal customer target demographic. How You Can Use Courses To Grow Your SaaS High-end courses are a powerful method for both acquiring new customers, and keeping the ones that you have. Creating sellable courses that help your students achieve specific results that are closely tied to your product offering can increase consumption. Additionally, creating valuable courses to drip-feed insights to your existing customers improves your retention, by ensuring that they can use the product to the fullest. In both cases, the aim remains the same — getting people to stick with your product. </sys

What Is The Difference Between Reporting And Analytics?. A necessary disambiguation between two valuable — and very different — forms of business intelligence. Reporting and analytics are often used interchangeably these days—incorrectly so. Many businesses choose to label their reporting as analytics—we put that down to the added flair implied by the fancier word choice. We get it—analytics does sound more sophisticated. That’s because it is. Reporting is sharing information, analytics is investigating it. Now, by no means are we saying that reporting is dead—it’s very much alive and well, and remains to be a fundamental and important part of SaaS. What we’re saying is that reporting and analytics correspond to two different functions, which provide different value and play unique roles in your business growth. To confuse the terms is to lose the crucial distinction between measuring your performance and investigating your performance—a business intelligence mistake you don’t want to make. TL;DR Reporting and analytics both serve important, but different, functions in your business growth. Reporting raises questions, and analytics focuses on interpreting data to answer them. Analytics can be descriptive, diagnostic, predictive, and prescriptive—each answers a different question and uncover different insights. Analytics are only helpful if you take action following investigation. First thing’s first, let’s set the record straight on what exactly we mean with the terms ‘report’ and ‘analytics’. We spoke to Nick, CEO at ChartMogul for industry-approved definitions. What is a report? “A report is a document that presents information in an organized format. For example, a report to your investors will include reports on revenue and growth.” Reporting on your core SaaS metrics and presenting them—be it via an email, a slidedeck, or another tool—falls under this category. What is analytics? “Analytics is the process of discovering, interpreting, and communicating significant patterns in data.” Revenue analytics involves diving deeper into your raw to understand the why behind your core SaaS metrics.This enables you to make better business decisions. ChartMogul support businesses when it comes to both reporting and analytics. The sleek charts and graphs make visualizing and sharing your business reporting quick and easy, while the ample analytics features enable you to dive deeper and find your why. Reporting vs analytics: what’s the difference Reporting provides you with information, analytics give you insights. Reporting raises questions, and analytics focuses on interpreting data to answer them. Both are valuable, but for different purposes. What’s so special about analytics? Analytics explains the “why?” and the “so what?” How? Because it’s dynamic—on more than just a scale of time or interval. You should be able to contort data points to whatever you need. If what you see is a set of standard metrics, then it isn’t truly an analytic assessment—or an analytics product. From this dynamic investigation into the data, you can derive actionable recommendations about your business. What should you change about your practices to improve your core metrics? Once you’ve got your insight-driven next steps—it’s essential you take action. Otherwise, the value of analytics is entirely foregone. Self-service analytics are enabling companies to track and analyze data from the get-go, and seamlessly scale with growing data needs. For example, we see SaaS companies adopt more self-service analytics tools as their data efforts evolve and increase. As the organization grows, they need deeper insights—which they obtain through adding and integrating specialized tools. It’s only when businesses have more sophisticated data science needs that they begin to questions whether to build or buy analytics tools, At this point, they’re ready to move on to building data teams capable of managing and analyzing large sets of data. That’s often after years of operations, however, self-serve analytics tools typically suffice for SaaS companies looking to understand business intelligence. Now, time to don our data analyst hat and look at how both analytics and reporting can be visually presented. How are reports presented visually? Let’s use Monthly Recurring Revenue as an example. Here is how MRR is typically reported. This chart shows the MRR for the last year, marked monthly. The organization is well on its way towards the $3M+ ARR mark, but wants to dig deeper to understand how to ensure they hit that mark. This chart displays the fluctuations in MRR but doesn’t necessarily provide any information on why. If you want to analyze your MRR, you can play with the parameters and drill into different nooks and crannies of the data—that’s where analytics comes in. How are analytics presented visually? Here is MRR sliced by marketing channel, over the same twelve months as above. This gives insights into where MRR is coming from—enabling you to prioritize high-performing channels. You can go even further than that. Here is MRR split by two sales representatives, limited to the last year and marked monthly. This would come in handy not only for routine management but also for quarterly performance evaluations. What are the types of analytics? Analytics can be ad-hoc sessions or routine deep dives, and different questions get different answers. There are four main types of analytics to consider, that answer four different questions: Descriptive analytics: what happened? Diagnostic analytics: why did it happen? Predictive analytics: what might happen in the future? Prescriptive analytics: what are the next steps? These types of business data analytics help companies maximize the usability of their data to extract deeper insights. How? A number of ways, really. Let’s take a look at two of them. Cohort analysis “Cohort is simply a fancy name for a group.” – David Skok Cohort analysis is a practice of analyzing data by groups of customers, where all customers in the group share a certain attribute. For example, in ChartMogul the attribute is the time period when users signed up for the service. In this case, you’d have a September cohort containing customers who signed up that month, an October cohort of new customers, and so on. From there, you can see how various cohorts behave over time. In this example, you can clearly see that people are dropping off in their third month. In ChartMogul, you can zoom in and see the customer activity that contributed to the calculation. You can question the data further to understand why you’re seeing higher user churn at the three month mark. You can ask questions like: Was a new plan introduced that bills every three months? Does onboarding need to be improved during those first three months? Do we need to check in with customers at the two and a half month mark? Cohort analysis can be especially helpful for churn analytics—as it reveals when during the customer lifecycle that a customer is most likely to cancel. Customer success teams can use these insights to work proactively to preempt and reduce churn. To find out more, download our free Ultimate Cohort Analysis Cheat Sheet and check out our comprehensive how-to guide on cohort analysis using ChartMogul. Segmentation Segmentation is the practice of slicing your data to distinguish groups based on different attributes. For example, you can segment your customer data by industry vertical, to see how customer behavior differs based on what kind of business they are. You could also segment your revenue data by region, to identify what areas of the world are most lucrative and hold the most opportunity for your business. Segmentation is, on the one hand, a very basic concept—and then very complex on the other. That’s because you can do so much with it. For an example of how dynamic and flexible segmentation can be, check out one of our deep dive refresher course on Segmentation, where we explain all the ways you can slice and dice your data. Examples of reporting and analytics for each team Let’s take a look at some examples of reporting vs analytics to consider the role each plays with your teams. Notice how analytics typically starts where reporting leaves off, and answers who, what, when, where, and why questions. Marketing metrics: reporting vs analytics Reporting metrics: # of qualified leads Customer Acquisition Cost (CAC) LTV:CAC Analytics: What’s our MRR broken down by lead source? How much of our new business MRR can be attributed to last month’s Adwords campaign? Which marketing channels have the lowest ROI? At ChartMogul we explained how to analyze the effectiveness of marketing channels using churn rate. With marketing channel attribution data flowing into ChartMogul, you can analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. 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. – Aaron Beashel, Co-Founder at Simul Docs Sales metrics: reporting vs analytics Reporting metrics: New business MRR ARR Conversions (demo>trial>purchase) CAC Analytics: Which reps bring on accounts with the highest retention? Which verticals constituted our highest sales last month? How many free trial customers came on board within one week of the product demo? Customer success metrics: reporting vs analytics Reporting metrics: Customer retention MRR retention Expansion MRR (Upsells) Analytics: At what point are subscribers at the highest risk of churn? Which team members secure the greatest amount of expansion MRR? Is retention above average for any particular verticals, or for customers in particular regions? Finance metrics: reporting vs analytics Reporting metrics: Net cash flow Non-recurring cash flow Refunds Analytics: Profitability analysis across any axis within the business: products, services, accounts, payment plans, geographic regions. What percentage of revenue comes from recurring vs non-recurring transactions? A little rusty? To brush up on some of these SaaS metrics, check out the Ultimate SaaS Metrics Cheat Sheet, which gives you an overview of all of them. We’ve also got our SaaS Benchmark Report—where we’ve analyzed anonymized and aggregated data from ChartMogul to help you find out how your key metrics compare to your peers. What comes next Investing the time, tools, and personnel in analytics is only worth it if you, well, do something about it. The real meat of analytics lies in using the findings to inform practical and tactical elements of your business growth. Improving best practices so that metrics improve—this is the value add. So, what do you do once you’ve analyzed your data? Quick rundown of a follow-up process: Assemble the results of the data analysis as well as likely explanations for those results. For example, this could be to create a saved chart or download your chart to include in your investor report. Communicate findings to key players. This can include employees at any level. When it comes to numbers and performance, transparency is the best policy. It fosters understanding of the metrics and of one’s impact, buy-in, and enthusiasm for new goals and tactics, and ultimately the foundation for a data-driven culture. Identify goals and the strategies you’ll change or tactics you’ll test. Determine a time to check the results. Two weeks? 30 days? Be sure to allow enough time for results to appear. Don’t let the desire to move fast impede your ability to learn from what you’re trying. Perform the same analysis to assess whether the changes produced the intended results. Analysis gives you insights, but it’s up to you to act on those insights. Otherwise, you might as well have left it at reporting your core metrics. Final thoughts The bottom line is that both reporting and analytics are necessary, and both are valuable. But they are not the same thing. Buzzwords often pick up in the tech world, and all of a sudden everyone is using word ‘X’ to describe thing ‘Y.’ Words shift meaning based on how they’re branded. That’s what’s at risk with reporting and analytics. Great analytic efforts are misrepresented as reporting, and standard KPI displays are hyped as analytics. In anything, losing vigilance with language costs us clarity. In business, if we confuse terms like this we don’t clearly see the function we’re actually performing (or paying for). As a result, we might also miss the opportunities the function reveals. If this seems like a dramatic take on the issue, that’s just because at ChartMogul our whole mission is around helping our customers build a better subscription business. We provide a reporting and analytics platform, and we want our product to not only inform but also empower our users. We hope this disambiguation has been helpful in identifying the differences between the two. Please now go forth, seize your data, and engage in both reporting and analytics to strengthen your team and grow your business. Reporting and analytics: FAQs What is the best subscription reporting and analytics platform? The best reporting and analytics platform provides businesses with the tools necessary to investigate data and uncover key insights. It should cover the four types of analytics and offer data anlytics features, as well as a wide variety of integrations for connecting your data across platforms. There are ample options on offer, but we—of course—back ourselves. ChartMogul’s industry-leading platform provides businesses with key business intelligence insights that enable better decision-making. Where to start with analytics and reporting? As a SaaS business, you’re likely already reporting—it’s analytics you need to catch up on. If you create KPI spreadsheets and report on your core metrics, you’re already reporting. Analytics starts when you begin to dive deeper into the why and so what of your business intelligence.

[INST] What Is The Difference Between Reporting And Analytics? [/INST]

A necessary disambiguation between two valuable — and very different — forms of business intelligence. Reporting and analytics are often used interchangeably these days—incorrectly so. Many businesses choose to label their reporting as analytics—we put that down to the added flair implied by the fancier word choice. We get it—analytics does sound more sophisticated. That’s because it is. Reporting is sharing information, analytics is investigating it. Now, by no means are we saying that reporting is dead—it’s very much alive and well, and remains to be a fundamental and important part of SaaS. What we’re saying is that reporting and analytics correspond to two different functions, which provide different value and play unique roles in your business growth. To confuse the terms is to lose the crucial distinction between measuring your performance and investigating your performance—a business intelligence mistake you don’t want to make. TL;DR Reporting and analytics both serve important, but different, functions in your business growth. Reporting raises questions, and analytics focuses on interpreting data to answer them. Analytics can be descriptive, diagnostic, predictive, and prescriptive—each answers a different question and uncover different insights. Analytics are only helpful if you take action following investigation. First thing’s first, let’s set the record straight on what exactly we mean with the terms ‘report’ and ‘analytics’. We spoke to Nick, CEO at ChartMogul for industry-approved definitions. What is a report? “A report is a document that presents information in an organized format. For example, a report to your investors will include reports on revenue and growth.” Reporting on your core SaaS metrics and presenting them—be it via an email, a slidedeck, or another tool—falls under this category. What is analytics? “Analytics is the process of discovering, interpreting, and communicating significant patterns in data.” Revenue analytics involves diving deeper into your raw to understand the why behind your core SaaS metrics.This enables you to make better business decisions. ChartMogul support businesses when it comes to both reporting and analytics. The sleek charts and graphs make visualizing and sharing your business reporting quick and easy, while the ample analytics features enable you to dive deeper and find your why. Reporting vs analytics: what’s the difference Reporting provides you with information, analytics give you insights. Reporting raises questions, and analytics focuses on interpreting data to answer them. Both are valuable, but for different purposes. What’s so special about analytics? Analytics explains the “why?” and the “so what?” How? Because it’s dynamic—on more than just a scale of time or interval. You should be able to contort data points to whatever you need. If what you see is a set of standard metrics, then it isn’t truly an analytic assessment—or an analytics product. From this dynamic investigation into the data, you can derive actionable recommendations about your business. What should you change about your practices to improve your core metrics? Once you’ve got your insight-driven next steps—it’s essential you take action. Otherwise, the value of analytics is entirely foregone. Self-service analytics are enabling companies to track and analyze data from the get-go, and seamlessly scale with growing data needs. For example, we see SaaS companies adopt more self-service analytics tools as their data efforts evolve and increase. As the organization grows, they need deeper insights—which they obtain through adding and integrating specialized tools. It’s only when businesses have more sophisticated data science needs that they begin to questions whether to build or buy analytics tools, At this point, they’re ready to move on to building data teams capable of managing and analyzing large sets of data. That’s often after years of operations, however, self-serve analytics tools typically suffice for SaaS companies looking to understand business intelligence. Now, time to don our data analyst hat and look at how both analytics and reporting can be visually presented. How are reports presented visually? Let’s use Monthly Recurring Revenue as an example. Here is how MRR is typically reported. This chart shows the MRR for the last year, marked monthly. The organization is well on its way towards the $3M+ ARR mark, but wants to dig deeper to understand how to ensure they hit that mark. This chart displays the fluctuations in MRR but doesn’t necessarily provide any information on why. If you want to analyze your MRR, you can play with the parameters and drill into different nooks and crannies of the data—that’s where analytics comes in. How are analytics presented visually? Here is MRR sliced by marketing channel, over the same twelve months as above. This gives insights into where MRR is coming from—enabling you to prioritize high-performing channels. You can go even further than that. Here is MRR split by two sales representatives, limited to the last year and marked monthly. This would come in handy not only for routine management but also for quarterly performance evaluations. What are the types of analytics? Analytics can be ad-hoc sessions or routine deep dives, and different questions get different answers. There are four main types of analytics to consider, that answer four different questions: Descriptive analytics: what happened? Diagnostic analytics: why did it happen? Predictive analytics: what might happen in the future? Prescriptive analytics: what are the next steps? These types of business data analytics help companies maximize the usability of their data to extract deeper insights. How? A number of ways, really. Let’s take a look at two of them. Cohort analysis “Cohort is simply a fancy name for a group.” – David Skok Cohort analysis is a practice of analyzing data by groups of customers, where all customers in the group share a certain attribute. For example, in ChartMogul the attribute is the time period when users signed up for the service. In this case, you’d have a September cohort containing customers who signed up that month, an October cohort of new customers, and so on. From there, you can see how various cohorts behave over time. In this example, you can clearly see that people are dropping off in their third month. In ChartMogul, you can zoom in and see the customer activity that contributed to the calculation. You can question the data further to understand why you’re seeing higher user churn at the three month mark. You can ask questions like: Was a new plan introduced that bills every three months? Does onboarding need to be improved during those first three months? Do we need to check in with customers at the two and a half month mark? Cohort analysis can be especially helpful for churn analytics—as it reveals when during the customer lifecycle that a customer is most likely to cancel. Customer success teams can use these insights to work proactively to preempt and reduce churn. To find out more, download our free Ultimate Cohort Analysis Cheat Sheet and check out our comprehensive how-to guide on cohort analysis using ChartMogul. Segmentation Segmentation is the practice of slicing your data to distinguish groups based on different attributes. For example, you can segment your customer data by industry vertical, to see how customer behavior differs based on what kind of business they are. You could also segment your revenue data by region, to identify what areas of the world are most lucrative and hold the most opportunity for your business. Segmentation is, on the one hand, a very basic concept—and then very complex on the other. That’s because you can do so much with it. For an example of how dynamic and flexible segmentation can be, check out one of our deep dive refresher course on Segmentation, where we explain all the ways you can slice and dice your data. Examples of reporting and analytics for each team Let’s take a look at some examples of reporting vs analytics to consider the role each plays with your teams. Notice how analytics typically starts where reporting leaves off, and answers who, what, when, where, and why questions. Marketing metrics: reporting vs analytics Reporting metrics: # of qualified leads Customer Acquisition Cost (CAC) LTV:CAC Analytics: What’s our MRR broken down by lead source? How much of our new business MRR can be attributed to last month’s Adwords campaign? Which marketing channels have the lowest ROI? At ChartMogul we explained how to analyze the effectiveness of marketing channels using churn rate. With marketing channel attribution data flowing into ChartMogul, you can analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. 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. – Aaron Beashel, Co-Founder at Simul Docs Sales metrics: reporting vs analytics Reporting metrics: New business MRR ARR Conversions (demo>trial>purchase) CAC Analytics: Which reps bring on accounts with the highest retention? Which verticals constituted our highest sales last month? How many free trial customers came on board within one week of the product demo? Customer success metrics: reporting vs analytics Reporting metrics: Customer retention MRR retention Expansion MRR (Upsells) Analytics: At what point are subscribers at the highest risk of churn? Which team members secure the greatest amount of expansion MRR? Is retention above average for any particular verticals, or for customers in particular regions? Finance metrics: reporting vs analytics Reporting metrics: Net cash flow Non-recurring cash flow Refunds Analytics: Profitability analysis across any axis within the business: products, services, accounts, payment plans, geographic regions. What percentage of revenue comes from recurring vs non-recurring transactions? A little rusty? To brush up on some of these SaaS metrics, check out the Ultimate SaaS Metrics Cheat Sheet, which gives you an overview of all of them. We’ve also got our SaaS Benchmark Report—where we’ve analyzed anonymized and aggregated data from ChartMogul to help you find out how your key metrics compare to your peers. What comes next Investing the time, tools, and personnel in analytics is only worth it if you, well, do something about it. The real meat of analytics lies in using the findings to inform practical and tactical elements of your business growth. Improving best practices so that metrics improve—this is the value add. So, what do you do once you’ve analyzed your data? Quick rundown of a follow-up process: Assemble the results of the data analysis as well as likely explanations for those results. For example, this could be to create a saved chart or download your chart to include in your investor report. Communicate findings to key players. This can include employees at any level. When it comes to numbers and performance, transparency is the best policy. It fosters understanding of the metrics and of one’s impact, buy-in, and enthusiasm for new goals and tactics, and ultimately the foundation for a data-driven culture. Identify goals and the strategies you’ll change or tactics you’ll test. Determine a time to check the results. Two weeks? 30 days? Be sure to allow enough time for results to appear. Don’t let the desire to move fast impede your ability to learn from what you’re trying. Perform the same analysis to assess whether the changes produced the intended results. Analysis gives you insights, but it’s up to you to act on those insights. Otherwise, you might as well have left it at reporting your core metrics. Final thoughts The bottom line is that both reporting and analytics are necessary, and both are valuable. But they are not the same thing. Buzzwords often pick up in the tech world, and all of a sudden everyone is using word ‘X’ to describe thing ‘Y.’ Words shift meaning based on how they’re branded. That’s what’s at risk with reporting and analytics. Great analytic efforts are misrepresented as reporting, and standard KPI displays are hyped as analytics. In anything, losing vigilance with language costs us clarity. In business, if we confuse terms like this we don’t clearly see the function we’re actually performing (or paying for). As a result, we might also miss the opportunities the function reveals. If this seems like a dramatic take on the issue, that’s just because at ChartMogul our whole mission is around helping our customers build a better subscription business. We provide a reporting and analytics platform, and we want our product to not only inform but also empower our users. We hope this disambiguation has been helpful in identifying the differences between the two. Please now go forth, seize your data, and engage in both reporting and analytics to strengthen your team and grow your business. Reporting and analytics: FAQs What is the best subscription reporting and analytics platform? The best reporting and analytics platform provides businesses with the tools necessary to investigate data and uncover key insights. It should cover the four types of analytics and offer data anlytics features, as well as a wide variety of integrations for connecting your data across platforms. There are ample options on offer, but we—of course—back ourselves. ChartMogul’s industry-leading platform provides businesses with key business intelligence insights that enable better decision-making. Where to start with analytics and reporting? As a SaaS business, you’re likely already reporting—it’s analytics you need to catch up on. If you create KPI spreadsheets and report on your core metrics, you’re already reporting. Analytics starts when you begin to dive deeper into the why and so what of your business intelligence.

<sys> [INST] What Is The Difference Between Reporting And Analytics? [/INST] A necessary disambiguation between two valuable — and very different — forms of business intelligence. Reporting and analytics are often used interchangeably these days—incorrectly so. Many businesses choose to label their reporting as analytics—we put that down to the added flair implied by the fancier word choice. We get it—analytics does sound more sophisticated. That’s because it is. Reporting is sharing information, analytics is investigating it. Now, by no means are we saying that reporting is dead—it’s very much alive and well, and remains to be a fundamental and important part of SaaS. What we’re saying is that reporting and analytics correspond to two different functions, which provide different value and play unique roles in your business growth. To confuse the terms is to lose the crucial distinction between measuring your performance and investigating your performance—a business intelligence mistake you don’t want to make. TL;DR Reporting and analytics both serve important, but different, functions in your business growth. Reporting raises questions, and analytics focuses on interpreting data to answer them. Analytics can be descriptive, diagnostic, predictive, and prescriptive—each answers a different question and uncover different insights. Analytics are only helpful if you take action following investigation. First thing’s first, let’s set the record straight on what exactly we mean with the terms ‘report’ and ‘analytics’. We spoke to Nick, CEO at ChartMogul for industry-approved definitions. What is a report? “A report is a document that presents information in an organized format. For example, a report to your investors will include reports on revenue and growth.” Reporting on your core SaaS metrics and presenting them—be it via an email, a slidedeck, or another tool—falls under this category. What is analytics? “Analytics is the process of discovering, interpreting, and communicating significant patterns in data.” Revenue analytics involves diving deeper into your raw to understand the why behind your core SaaS metrics.This enables you to make better business decisions. ChartMogul support businesses when it comes to both reporting and analytics. The sleek charts and graphs make visualizing and sharing your business reporting quick and easy, while the ample analytics features enable you to dive deeper and find your why. Reporting vs analytics: what’s the difference Reporting provides you with information, analytics give you insights. Reporting raises questions, and analytics focuses on interpreting data to answer them. Both are valuable, but for different purposes. What’s so special about analytics? Analytics explains the “why?” and the “so what?” How? Because it’s dynamic—on more than just a scale of time or interval. You should be able to contort data points to whatever you need. If what you see is a set of standard metrics, then it isn’t truly an analytic assessment—or an analytics product. From this dynamic investigation into the data, you can derive actionable recommendations about your business. What should you change about your practices to improve your core metrics? Once you’ve got your insight-driven next steps—it’s essential you take action. Otherwise, the value of analytics is entirely foregone. Self-service analytics are enabling companies to track and analyze data from the get-go, and seamlessly scale with growing data needs. For example, we see SaaS companies adopt more self-service analytics tools as their data efforts evolve and increase. As the organization grows, they need deeper insights—which they obtain through adding and integrating specialized tools. It’s only when businesses have more sophisticated data science needs that they begin to questions whether to build or buy analytics tools, At this point, they’re ready to move on to building data teams capable of managing and analyzing large sets of data. That’s often after years of operations, however, self-serve analytics tools typically suffice for SaaS companies looking to understand business intelligence. Now, time to don our data analyst hat and look at how both analytics and reporting can be visually presented. How are reports presented visually? Let’s use Monthly Recurring Revenue as an example. Here is how MRR is typically reported. This chart shows the MRR for the last year, marked monthly. The organization is well on its way towards the $3M+ ARR mark, but wants to dig deeper to understand how to ensure they hit that mark. This chart displays the fluctuations in MRR but doesn’t necessarily provide any information on why. If you want to analyze your MRR, you can play with the parameters and drill into different nooks and crannies of the data—that’s where analytics comes in. How are analytics presented visually? Here is MRR sliced by marketing channel, over the same twelve months as above. This gives insights into where MRR is coming from—enabling you to prioritize high-performing channels. You can go even further than that. Here is MRR split by two sales representatives, limited to the last year and marked monthly. This would come in handy not only for routine management but also for quarterly performance evaluations. What are the types of analytics? Analytics can be ad-hoc sessions or routine deep dives, and different questions get different answers. There are four main types of analytics to consider, that answer four different questions: Descriptive analytics: what happened? Diagnostic analytics: why did it happen? Predictive analytics: what might happen in the future? Prescriptive analytics: what are the next steps? These types of business data analytics help companies maximize the usability of their data to extract deeper insights. How? A number of ways, really. Let’s take a look at two of them. Cohort analysis “Cohort is simply a fancy name for a group.” – David Skok Cohort analysis is a practice of analyzing data by groups of customers, where all customers in the group share a certain attribute. For example, in ChartMogul the attribute is the time period when users signed up for the service. In this case, you’d have a September cohort containing customers who signed up that month, an October cohort of new customers, and so on. From there, you can see how various cohorts behave over time. In this example, you can clearly see that people are dropping off in their third month. In ChartMogul, you can zoom in and see the customer activity that contributed to the calculation. You can question the data further to understand why you’re seeing higher user churn at the three month mark. You can ask questions like: Was a new plan introduced that bills every three months? Does onboarding need to be improved during those first three months? Do we need to check in with customers at the two and a half month mark? Cohort analysis can be especially helpful for churn analytics—as it reveals when during the customer lifecycle that a customer is most likely to cancel. Customer success teams can use these insights to work proactively to preempt and reduce churn. To find out more, download our free Ultimate Cohort Analysis Cheat Sheet and check out our comprehensive how-to guide on cohort analysis using ChartMogul. Segmentation Segmentation is the practice of slicing your data to distinguish groups based on different attributes. For example, you can segment your customer data by industry vertical, to see how customer behavior differs based on what kind of business they are. You could also segment your revenue data by region, to identify what areas of the world are most lucrative and hold the most opportunity for your business. Segmentation is, on the one hand, a very basic concept—and then very complex on the other. That’s because you can do so much with it. For an example of how dynamic and flexible segmentation can be, check out one of our deep dive refresher course on Segmentation, where we explain all the ways you can slice and dice your data. Examples of reporting and analytics for each team Let’s take a look at some examples of reporting vs analytics to consider the role each plays with your teams. Notice how analytics typically starts where reporting leaves off, and answers who, what, when, where, and why questions. Marketing metrics: reporting vs analytics Reporting metrics: # of qualified leads Customer Acquisition Cost (CAC) LTV:CAC Analytics: What’s our MRR broken down by lead source? How much of our new business MRR can be attributed to last month’s Adwords campaign? Which marketing channels have the lowest ROI? At ChartMogul we explained how to analyze the effectiveness of marketing channels using churn rate. With marketing channel attribution data flowing into ChartMogul, you can analyse your different marketing channels by critical revenue metrics rather than by just the number of website visitors. 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. – Aaron Beashel, Co-Founder at Simul Docs Sales metrics: reporting vs analytics Reporting metrics: New business MRR ARR Conversions (demo>trial>purchase) CAC Analytics: Which reps bring on accounts with the highest retention? Which verticals constituted our highest sales last month? How many free trial customers came on board within one week of the product demo? Customer success metrics: reporting vs analytics Reporting metrics: Customer retention MRR retention Expansion MRR (Upsells) Analytics: At what point are subscribers at the highest risk of churn? Which team members secure the greatest amount of expansion MRR? Is retention above average for any particular verticals, or for customers in particular regions? Finance metrics: reporting vs analytics Reporting metrics: Net cash flow Non-recurring cash flow Refunds Analytics: Profitability analysis across any axis within the business: products, services, accounts, payment plans, geographic regions. What percentage of revenue comes from recurring vs non-recurring transactions? A little rusty? To brush up on some of these SaaS metrics, check out the Ultimate SaaS Metrics Cheat Sheet, which gives you an overview of all of them. We’ve also got our SaaS Benchmark Report—where we’ve analyzed anonymized and aggregated data from ChartMogul to help you find out how your key metrics compare to your peers. What comes next Investing the time, tools, and personnel in analytics is only worth it if you, well, do something about it. The real meat of analytics lies in using the findings to inform practical and tactical elements of your business growth. Improving best practices so that metrics improve—this is the value add. So, what do you do once you’ve analyzed your data? Quick rundown of a follow-up process: Assemble the results of the data analysis as well as likely explanations for those results. For example, this could be to create a saved chart or download your chart to include in your investor report. Communicate findings to key players. This can include employees at any level. When it comes to numbers and performance, transparency is the best policy. It fosters understanding of the metrics and of one’s impact, buy-in, and enthusiasm for new goals and tactics, and ultimately the foundation for a data-driven culture. Identify goals and the strategies you’ll change or tactics you’ll test. Determine a time to check the results. Two weeks? 30 days? Be sure to allow enough time for results to appear. Don’t let the desire to move fast impede your ability to learn from what you’re trying. Perform the same analysis to assess whether the changes produced the intended results. Analysis gives you insights, but it’s up to you to act on those insights. Otherwise, you might as well have left it at reporting your core metrics. Final thoughts The bottom line is that both reporting and analytics are necessary, and both are valuable. But they are not the same thing. Buzzwords often pick up in the tech world, and all of a sudden everyone is using word ‘X’ to describe thing ‘Y.’ Words shift meaning based on how they’re branded. That’s what’s at risk with reporting and analytics. Great analytic efforts are misrepresented as reporting, and standard KPI displays are hyped as analytics. In anything, losing vigilance with language costs us clarity. In business, if we confuse terms like this we don’t clearly see the function we’re actually performing (or paying for). As a result, we might also miss the opportunities the function reveals. If this seems like a dramatic take on the issue, that’s just because at ChartMogul our whole mission is around helping our customers build a better subscription business. We provide a reporting and analytics platform, and we want our product to not only inform but also empower our users. We hope this disambiguation has been helpful in identifying the differences between the two. Please now go forth, seize your data, and engage in both reporting and analytics to strengthen your team and grow your business. Reporting and analytics: FAQs What is the best subscription reporting and analytics platform? The best reporting and analytics platform provides businesses with the tools necessary to investigate data and uncover key insights. It should cover the four types of analytics and offer data anlytics features, as well as a wide variety of integrations for connecting your data across platforms. There are ample options on offer, but we—of course—back ourselves. ChartMogul’s industry-leading platform provides businesses with key business intelligence insights that enable better decision-making. Where to start with analytics and reporting? As a SaaS business, you’re likely already reporting—it’s analytics you need to catch up on. If you create KPI spreadsheets and report on your core metrics, you’re already reporting. Analytics starts when you begin to dive deeper into the why and so what of your business intelligence. </sys

What Is CMRR and How to Calculate It?. What is CMRR in SaaS? CMRR stands for Committed Monthly Recurring Revenue. This metric helps SaaS businesses predict their monthly recurring revenue (MRR). It is calculated considering booked monthly contract revenue, as well as scheduled contract changes: like cancellations or upsells. CMRR can help SaaS fight churn, realign priorities and better manage their budgets. CMRR can also help teams know if they’re going to hit their end-of-year growth goals and proactively strategize if things aren’t currently going to plan. MRR vs CMRR CMRR as a metric is often misunderstood. It doesn’t help that to begin with, it’s often found under two different names: Committed Monthly Recurring Revenue Contracted Monthly Recurring Revenue So what’s the deal here? Are these two different variations on the same metric? Committed Monthly Recurring Revenue and Contracted Monthly Recurring Revenue are the same metric. When you see each of these names, they refer to the same thing. To avoid further confusion, we’ll just refer to it as CMRR. What is MRR? Monthly Recurring Revenue (MRR) is a calculation of your normalized (amortized), monthly subscription revenue. If your SaaS pricing model uses a monthly subscription, your MRR is simply the total of all your customers’ subscriptions. If you have annual subscriptions, you should divide these by 12 to calculate MRR. MRR Calculations should always exclude any one-off payments and metered charges for customers – we only want to look at the recurring portion of revenue. Example: If I have 120 customers, each paying $60 per month in subscriptions, my MRR is $7200. What is CMRR? Defining CMRR isn’t so easy. There is no fixed definition, and there are certainly no fixed rules about what to include in the formula. Here’s what most businesses provide as a definition: “CMRR is the value of recurring portion of subscription revenue.” CMRR is a metric that’s also used in more traditional fixed-term-based payment structures (i.e. non-recurring revenue). For non-fixed-term-based models (SaaS, subscription), we can use a slightly clearer definition of what CMRR really equates to: “CMRR for a SaaS business is a projection of MRR in a future period, modified to take into account any guaranteed revenue expansion or anticipated churn over the period.” Now that makes more sense as a definition for subscription businesses. CMRR is similar to MRR, but gives us a more realistic projection of monthly revenue, accounting for adjustments to recurring revenue that we already know about. Remember: this is not guaranteed monthly recurring revenue! It’s predicted with as much knowledge as SaaS companies have available to them. How to calculate CMRR? Now we’ve got a clear understanding of what CMRR is and how it lines up with MRR. Let’s look at the formula you can use to calculate CMRR if you want to do this manually. CMRR Formula At a high level, the formula for CMRR is fairly simple: Despite this simple formula, there may be other elements that could be included in the CMRR calculation – there is no standard definition for this so you’ll need to decide what makes sense for your business. Example: I have 120 customers, each paying $60 per month in subscriptions. For the next month I have a guaranteed expansion MRR of $1200 and an expected churn of $500. My CMRR for the next month is 7200 + 1200 – 500 = $7900. Here’s a visual representation of the difference between measuring MRR and CMRR: A simple MRR Growth chart. A chart demonstrating the additional components considered in CMRR. What’s Included in CMRR? MRR! You still need to include the core MRR of your business. Guaranteed new business that you know about for the period – e.g. If a customer has signed a contract for an account with you which only comes into effect in the following month – you can include this New Business MRR in your CMRR calculation. Guaranteed account expansion from upgrades that you know will take place in the period – e.g. If a customer is on a plan that requires them to upgrade after a certain time, this is expected Expansion MRR that you can include in your CMRR calculation. Anticipated churn for the specified period – e.g. A customer has stated that they don’t intend to renew their account in the following month, so you can factor this as churn in your CMRR calculation. Note: This churn is not 100% guaranteed – you still have the chance to reverse the customer’s decision! Anticipated downgrades for the specified period – e.g. You expect the customer to downgrade their account, due to either the customer stating so, or to features of your pricing model. Where can you use CMRR? CMRR is always a forward-looking metric, i.e. it’s only applicable when calculated for future time periods, where you have potential expansion and churn that hasn’t happened yet. Because of this, CMRR paints a more realistic picture of a recurring business. Particularly in the case of a high churn rate, CMRR would produce a slightly more pessimistic outlook – taking into account the anticipated churn (although additional revenue from expansion may balance this out). Here are some uses of CMRR: CMRR appears to be more of a “VC metric” – i.e. something that investors would want to see, particularly as an indicator of the health of a business, based on projections. As Philippe Botteri (Accel Partners) mentions, breaking down the average CMRR by different dimensions (such as per customer) can lead to a more insightful analysis. Christoph Janz (Point Nine Capital) also mentions that CMRR is more relevant for enterprise-targeted businesses, where the sales cycles are typically much longer and the need for such projections are greater. Smaller SaaS startups selling mainly monthly deals to SMBs may not find so much use in the metric. Why is CMRR important? CMRR is important because it helps a SaaS company proactively manage future budgets! This is something that typically wouldn’t be possible for businesses to understand. One of the joys of working on a monthly subscription revenue model is that you’re able to ammend strategies quicker and on the fly—rather than waiting for end-of-quarter or (worse) end-of-year financial reports. It’s so crucial that your team trusts subscription metrics like CMRR. When you’re able to trust in your data, you’ll be making some hefty spending decisions in answer to your findings. Here’s what Bessemer Ventures say about CMRR in their Laws of Cloud Computing report: “This single metric gives you the purest forward view of the “steady state” revenue of the business based on all the known information today. The monthly focus also tends to drive many positive behavioral changes within a team including a monthly sales and development cadence, better sales compensation plan and cash flow alignment, reduced customer price sensitivity, and heightened awareness around small MRR changes. Many leading cloud companies therefore use CMRR as the basis for everything from the financial model to the sales commission plan. This is the single most important metric for a cloud business to monitor, as the change in CMRR provides the clearest visibility into the health of any cloud business.” There’s no doubt that SaaS founders use CMRR to give a more accurate projection of recurring revenue, by taking into account expected adjustments to the core MRR. However, for most SaaS startups, it’s not clear how it can be useful on a day-to-day basis for measuring and growing the business. You’ll be required to develop your own definition – and the added complexity may not add much value over simply using MRR. If you want to read more on CMRR, and the nuances of calculating and using it, check out the following resources: Cloud Computing Metrics Saas Business Metrics CMRR Net Dollar Retention CMRR SaaS FAQs How can you track CMRR? In the Charts section of the ChartMogul app, you’ll see the CMRR Forecast report. You’ll be able to see the most complete picture of your company’s financial health with a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. What is the purpose of tracking CMRR in SaaS? Committed monthly recurring revenue (CMRR) enables SaaS businesses to predict revenue growth or loss and act on the results they see. CMRR calculates predicted revenue based on planned contract changes such as churn, upsells, downgrades, and more. How can I use CMRR to grow a SaaS business? SaaS businesses can use CMRR to predict income and plan against that. For example, a SaaS business can use CMRR data to better understand if they’re going to hit revenue goals, identify churning accounts, and hypothesize strategies to combat any harmful changes on the horizon. How to plan using CMRR? You can plan using CMRR by clearly outlining where your predicted losses are coming from and finding ways to combat them before they happen. CMRR can also highlight where your budgets will be at the end of a period, and will allow you to tweak your spend accordingly so that your end-of-year accounts remain healthy and happy.

[INST] What Is CMRR and How to Calculate It? [/INST]

What is CMRR in SaaS? CMRR stands for Committed Monthly Recurring Revenue. This metric helps SaaS businesses predict their monthly recurring revenue (MRR). It is calculated considering booked monthly contract revenue, as well as scheduled contract changes: like cancellations or upsells. CMRR can help SaaS fight churn, realign priorities and better manage their budgets. CMRR can also help teams know if they’re going to hit their end-of-year growth goals and proactively strategize if things aren’t currently going to plan. MRR vs CMRR CMRR as a metric is often misunderstood. It doesn’t help that to begin with, it’s often found under two different names: Committed Monthly Recurring Revenue Contracted Monthly Recurring Revenue So what’s the deal here? Are these two different variations on the same metric? Committed Monthly Recurring Revenue and Contracted Monthly Recurring Revenue are the same metric. When you see each of these names, they refer to the same thing. To avoid further confusion, we’ll just refer to it as CMRR. What is MRR? Monthly Recurring Revenue (MRR) is a calculation of your normalized (amortized), monthly subscription revenue. If your SaaS pricing model uses a monthly subscription, your MRR is simply the total of all your customers’ subscriptions. If you have annual subscriptions, you should divide these by 12 to calculate MRR. MRR Calculations should always exclude any one-off payments and metered charges for customers – we only want to look at the recurring portion of revenue. Example: If I have 120 customers, each paying $60 per month in subscriptions, my MRR is $7200. What is CMRR? Defining CMRR isn’t so easy. There is no fixed definition, and there are certainly no fixed rules about what to include in the formula. Here’s what most businesses provide as a definition: “CMRR is the value of recurring portion of subscription revenue.” CMRR is a metric that’s also used in more traditional fixed-term-based payment structures (i.e. non-recurring revenue). For non-fixed-term-based models (SaaS, subscription), we can use a slightly clearer definition of what CMRR really equates to: “CMRR for a SaaS business is a projection of MRR in a future period, modified to take into account any guaranteed revenue expansion or anticipated churn over the period.” Now that makes more sense as a definition for subscription businesses. CMRR is similar to MRR, but gives us a more realistic projection of monthly revenue, accounting for adjustments to recurring revenue that we already know about. Remember: this is not guaranteed monthly recurring revenue! It’s predicted with as much knowledge as SaaS companies have available to them. How to calculate CMRR? Now we’ve got a clear understanding of what CMRR is and how it lines up with MRR. Let’s look at the formula you can use to calculate CMRR if you want to do this manually. CMRR Formula At a high level, the formula for CMRR is fairly simple: Despite this simple formula, there may be other elements that could be included in the CMRR calculation – there is no standard definition for this so you’ll need to decide what makes sense for your business. Example: I have 120 customers, each paying $60 per month in subscriptions. For the next month I have a guaranteed expansion MRR of $1200 and an expected churn of $500. My CMRR for the next month is 7200 + 1200 – 500 = $7900. Here’s a visual representation of the difference between measuring MRR and CMRR: A simple MRR Growth chart. A chart demonstrating the additional components considered in CMRR. What’s Included in CMRR? MRR! You still need to include the core MRR of your business. Guaranteed new business that you know about for the period – e.g. If a customer has signed a contract for an account with you which only comes into effect in the following month – you can include this New Business MRR in your CMRR calculation. Guaranteed account expansion from upgrades that you know will take place in the period – e.g. If a customer is on a plan that requires them to upgrade after a certain time, this is expected Expansion MRR that you can include in your CMRR calculation. Anticipated churn for the specified period – e.g. A customer has stated that they don’t intend to renew their account in the following month, so you can factor this as churn in your CMRR calculation. Note: This churn is not 100% guaranteed – you still have the chance to reverse the customer’s decision! Anticipated downgrades for the specified period – e.g. You expect the customer to downgrade their account, due to either the customer stating so, or to features of your pricing model. Where can you use CMRR? CMRR is always a forward-looking metric, i.e. it’s only applicable when calculated for future time periods, where you have potential expansion and churn that hasn’t happened yet. Because of this, CMRR paints a more realistic picture of a recurring business. Particularly in the case of a high churn rate, CMRR would produce a slightly more pessimistic outlook – taking into account the anticipated churn (although additional revenue from expansion may balance this out). Here are some uses of CMRR: CMRR appears to be more of a “VC metric” – i.e. something that investors would want to see, particularly as an indicator of the health of a business, based on projections. As Philippe Botteri (Accel Partners) mentions, breaking down the average CMRR by different dimensions (such as per customer) can lead to a more insightful analysis. Christoph Janz (Point Nine Capital) also mentions that CMRR is more relevant for enterprise-targeted businesses, where the sales cycles are typically much longer and the need for such projections are greater. Smaller SaaS startups selling mainly monthly deals to SMBs may not find so much use in the metric. Why is CMRR important? CMRR is important because it helps a SaaS company proactively manage future budgets! This is something that typically wouldn’t be possible for businesses to understand. One of the joys of working on a monthly subscription revenue model is that you’re able to ammend strategies quicker and on the fly—rather than waiting for end-of-quarter or (worse) end-of-year financial reports. It’s so crucial that your team trusts subscription metrics like CMRR. When you’re able to trust in your data, you’ll be making some hefty spending decisions in answer to your findings. Here’s what Bessemer Ventures say about CMRR in their Laws of Cloud Computing report: “This single metric gives you the purest forward view of the “steady state” revenue of the business based on all the known information today. The monthly focus also tends to drive many positive behavioral changes within a team including a monthly sales and development cadence, better sales compensation plan and cash flow alignment, reduced customer price sensitivity, and heightened awareness around small MRR changes. Many leading cloud companies therefore use CMRR as the basis for everything from the financial model to the sales commission plan. This is the single most important metric for a cloud business to monitor, as the change in CMRR provides the clearest visibility into the health of any cloud business.” There’s no doubt that SaaS founders use CMRR to give a more accurate projection of recurring revenue, by taking into account expected adjustments to the core MRR. However, for most SaaS startups, it’s not clear how it can be useful on a day-to-day basis for measuring and growing the business. You’ll be required to develop your own definition – and the added complexity may not add much value over simply using MRR. If you want to read more on CMRR, and the nuances of calculating and using it, check out the following resources: Cloud Computing Metrics Saas Business Metrics CMRR Net Dollar Retention CMRR SaaS FAQs How can you track CMRR? In the Charts section of the ChartMogul app, you’ll see the CMRR Forecast report. You’ll be able to see the most complete picture of your company’s financial health with a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. What is the purpose of tracking CMRR in SaaS? Committed monthly recurring revenue (CMRR) enables SaaS businesses to predict revenue growth or loss and act on the results they see. CMRR calculates predicted revenue based on planned contract changes such as churn, upsells, downgrades, and more. How can I use CMRR to grow a SaaS business? SaaS businesses can use CMRR to predict income and plan against that. For example, a SaaS business can use CMRR data to better understand if they’re going to hit revenue goals, identify churning accounts, and hypothesize strategies to combat any harmful changes on the horizon. How to plan using CMRR? You can plan using CMRR by clearly outlining where your predicted losses are coming from and finding ways to combat them before they happen. CMRR can also highlight where your budgets will be at the end of a period, and will allow you to tweak your spend accordingly so that your end-of-year accounts remain healthy and happy.

<sys> [INST] What Is CMRR and How to Calculate It? [/INST] What is CMRR in SaaS? CMRR stands for Committed Monthly Recurring Revenue. This metric helps SaaS businesses predict their monthly recurring revenue (MRR). It is calculated considering booked monthly contract revenue, as well as scheduled contract changes: like cancellations or upsells. CMRR can help SaaS fight churn, realign priorities and better manage their budgets. CMRR can also help teams know if they’re going to hit their end-of-year growth goals and proactively strategize if things aren’t currently going to plan. MRR vs CMRR CMRR as a metric is often misunderstood. It doesn’t help that to begin with, it’s often found under two different names: Committed Monthly Recurring Revenue Contracted Monthly Recurring Revenue So what’s the deal here? Are these two different variations on the same metric? Committed Monthly Recurring Revenue and Contracted Monthly Recurring Revenue are the same metric. When you see each of these names, they refer to the same thing. To avoid further confusion, we’ll just refer to it as CMRR. What is MRR? Monthly Recurring Revenue (MRR) is a calculation of your normalized (amortized), monthly subscription revenue. If your SaaS pricing model uses a monthly subscription, your MRR is simply the total of all your customers’ subscriptions. If you have annual subscriptions, you should divide these by 12 to calculate MRR. MRR Calculations should always exclude any one-off payments and metered charges for customers – we only want to look at the recurring portion of revenue. Example: If I have 120 customers, each paying $60 per month in subscriptions, my MRR is $7200. What is CMRR? Defining CMRR isn’t so easy. There is no fixed definition, and there are certainly no fixed rules about what to include in the formula. Here’s what most businesses provide as a definition: “CMRR is the value of recurring portion of subscription revenue.” CMRR is a metric that’s also used in more traditional fixed-term-based payment structures (i.e. non-recurring revenue). For non-fixed-term-based models (SaaS, subscription), we can use a slightly clearer definition of what CMRR really equates to: “CMRR for a SaaS business is a projection of MRR in a future period, modified to take into account any guaranteed revenue expansion or anticipated churn over the period.” Now that makes more sense as a definition for subscription businesses. CMRR is similar to MRR, but gives us a more realistic projection of monthly revenue, accounting for adjustments to recurring revenue that we already know about. Remember: this is not guaranteed monthly recurring revenue! It’s predicted with as much knowledge as SaaS companies have available to them. How to calculate CMRR? Now we’ve got a clear understanding of what CMRR is and how it lines up with MRR. Let’s look at the formula you can use to calculate CMRR if you want to do this manually. CMRR Formula At a high level, the formula for CMRR is fairly simple: Despite this simple formula, there may be other elements that could be included in the CMRR calculation – there is no standard definition for this so you’ll need to decide what makes sense for your business. Example: I have 120 customers, each paying $60 per month in subscriptions. For the next month I have a guaranteed expansion MRR of $1200 and an expected churn of $500. My CMRR for the next month is 7200 + 1200 – 500 = $7900. Here’s a visual representation of the difference between measuring MRR and CMRR: A simple MRR Growth chart. A chart demonstrating the additional components considered in CMRR. What’s Included in CMRR? MRR! You still need to include the core MRR of your business. Guaranteed new business that you know about for the period – e.g. If a customer has signed a contract for an account with you which only comes into effect in the following month – you can include this New Business MRR in your CMRR calculation. Guaranteed account expansion from upgrades that you know will take place in the period – e.g. If a customer is on a plan that requires them to upgrade after a certain time, this is expected Expansion MRR that you can include in your CMRR calculation. Anticipated churn for the specified period – e.g. A customer has stated that they don’t intend to renew their account in the following month, so you can factor this as churn in your CMRR calculation. Note: This churn is not 100% guaranteed – you still have the chance to reverse the customer’s decision! Anticipated downgrades for the specified period – e.g. You expect the customer to downgrade their account, due to either the customer stating so, or to features of your pricing model. Where can you use CMRR? CMRR is always a forward-looking metric, i.e. it’s only applicable when calculated for future time periods, where you have potential expansion and churn that hasn’t happened yet. Because of this, CMRR paints a more realistic picture of a recurring business. Particularly in the case of a high churn rate, CMRR would produce a slightly more pessimistic outlook – taking into account the anticipated churn (although additional revenue from expansion may balance this out). Here are some uses of CMRR: CMRR appears to be more of a “VC metric” – i.e. something that investors would want to see, particularly as an indicator of the health of a business, based on projections. As Philippe Botteri (Accel Partners) mentions, breaking down the average CMRR by different dimensions (such as per customer) can lead to a more insightful analysis. Christoph Janz (Point Nine Capital) also mentions that CMRR is more relevant for enterprise-targeted businesses, where the sales cycles are typically much longer and the need for such projections are greater. Smaller SaaS startups selling mainly monthly deals to SMBs may not find so much use in the metric. Why is CMRR important? CMRR is important because it helps a SaaS company proactively manage future budgets! This is something that typically wouldn’t be possible for businesses to understand. One of the joys of working on a monthly subscription revenue model is that you’re able to ammend strategies quicker and on the fly—rather than waiting for end-of-quarter or (worse) end-of-year financial reports. It’s so crucial that your team trusts subscription metrics like CMRR. When you’re able to trust in your data, you’ll be making some hefty spending decisions in answer to your findings. Here’s what Bessemer Ventures say about CMRR in their Laws of Cloud Computing report: “This single metric gives you the purest forward view of the “steady state” revenue of the business based on all the known information today. The monthly focus also tends to drive many positive behavioral changes within a team including a monthly sales and development cadence, better sales compensation plan and cash flow alignment, reduced customer price sensitivity, and heightened awareness around small MRR changes. Many leading cloud companies therefore use CMRR as the basis for everything from the financial model to the sales commission plan. This is the single most important metric for a cloud business to monitor, as the change in CMRR provides the clearest visibility into the health of any cloud business.” There’s no doubt that SaaS founders use CMRR to give a more accurate projection of recurring revenue, by taking into account expected adjustments to the core MRR. However, for most SaaS startups, it’s not clear how it can be useful on a day-to-day basis for measuring and growing the business. You’ll be required to develop your own definition – and the added complexity may not add much value over simply using MRR. If you want to read more on CMRR, and the nuances of calculating and using it, check out the following resources: Cloud Computing Metrics Saas Business Metrics CMRR Net Dollar Retention CMRR SaaS FAQs How can you track CMRR? In the Charts section of the ChartMogul app, you’ll see the CMRR Forecast report. You’ll be able to see the most complete picture of your company’s financial health with a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. What is the purpose of tracking CMRR in SaaS? Committed monthly recurring revenue (CMRR) enables SaaS businesses to predict revenue growth or loss and act on the results they see. CMRR calculates predicted revenue based on planned contract changes such as churn, upsells, downgrades, and more. How can I use CMRR to grow a SaaS business? SaaS businesses can use CMRR to predict income and plan against that. For example, a SaaS business can use CMRR data to better understand if they’re going to hit revenue goals, identify churning accounts, and hypothesize strategies to combat any harmful changes on the horizon. How to plan using CMRR? You can plan using CMRR by clearly outlining where your predicted losses are coming from and finding ways to combat them before they happen. CMRR can also highlight where your budgets will be at the end of a period, and will allow you to tweak your spend accordingly so that your end-of-year accounts remain healthy and happy. </sys

Bootstrappers: SaaS startups finding their own route to $1M+ ARR. What’s enabling bootstrapped SaaS? The concept of bootstrapping a business is nothing new. The term originates from the concept of “pulling yourself up by your own bootstraps”. Did you know the term “booting”, i.e. “I’m going to boot up my computer” also comes from the word “bootstrapping”? In the business world, the term generally refers to: “Financing and growing your business without the need for external assistance in the form of capital investment.” In other words, it’s the “I’m doing it my way” approach to building a business. There’s a buzz today in the SaaS universe around bootstrapping. The wind has changed in some way, and has spurred some conversation on the topic. So what’s the deal? The growing divide between SaaS and venture capital Point Nine Capital’s Clement Vouillon spoke about the increasing incompatibility between Venture Capital and SaaS in The Rise of Non “VC compatible” SaaS Companies: ”When I entered the SaaS world 10 years ago (building a product on top of flash…) I knew very few founders running bootstrapped SaaS companies. Raising money was the main way to go. But this has changed and I now encounter, almost on a weekly basis, awesome bootstrapped software companies and micro SaaS.” Clement’s view on the increasing viability of bootstrapping boils down to the following reasons: A growing market for SaaS Ease of building & distribution Availability of advice (i.e. the playbook has already been written) And the above points make a lot of sense. It’s never been easier to build, market and grow a SaaS business — almost every aspect is being solved by tools and products on some level or another. Whether engineering, marketing, billing, analytics — there’s a wealth of advice and tools to help you along the way. Historically, bootstrapping SaaS has always been an option — companies like Atlassian, Qualtrics and Mailchimp have all bootstrapped their way to success and even IPO in the case of Atlassian — but until now, it’s always presented a big tradeoff in one or more ways. Bootstrapping has been the exception, rather than the norm. A path pursued by those true outliers who, in hindsight, seemed destined to find success through unconventional means. Seed-stage fundraising for SaaS is getting harder It’s getting harder for early-stage companies to raise a VC-backed seed round. Many SaaS-focused VCs including Redpoint’s Tomasz Tunguz have discussed this on several occasions: “SaaS company formation has fallen by 44% in the last 3 years. I’m using SaaS seed rounds as a proxy metric. I believe competition is a major driving force, especially since venture capital is conspicuously copious.” Importantly here, Tomasz is using “seed rounds raised” as a proxy for company formation. So what we’re really seeing is that seed rounds are dropping. This is illustrated perfectly by Tomasz’s chart showing the number of seed rounds raised per year: source: http://tomtunguz.com/rising-table-stakes-in-saas/ In fact, the stakes are raising across the board for SaaS companies looking for capital investment. Jason Lemkin, renowned SaaS VC and founder of SaaStr recently wrote about the top-end of the SaaS market: “A funny thing happened as part of the last 2 years of this epic bull run: $3 Billion became the New $1 Billion In SaaS. So maybe it’s time to change the definition of a SaaS Unicorn” In his post, Lemkin discusses a similar theme to that in Tunguz’s article above: Competition is tougher than ever across every vertical BUT the rewards are higher than ever, for those who do make it “Multiples [of revenue] are not that impressive in SaaS today, and arguably too low to support the massive amount of venture investment in the past few years.” So in the face of adversity in the form of tougher competition, higher standards for fundraising and growing incompatibility with venture capital, what do smart founders do? They dig in and hack their way to profitability, of course… 3 examples of bootstrapped SaaS So who are the people out there on the ground, battling on the front lines of this bootstrapping revolution? And what are they experiencing? I wanted to find out. There must be something to learn here… Canny Status: Bootstrapped from zero “ramen” profitability Canny Co-Founders Sarah Hum and Andrew Rasmussen have spent the majority of their time working remotely and travelling. Canny is a SaaS customer feedback app, founded by ex-Facebook employees Sarah Hum and Andrew Rasmussen. Having completed the Y Combinator Startup School (a free 10-week program to educate founders), they proceeded to work on building the product without any outside investment. Seven months after launching the product, the pair were proud to announce that they’d reached “ramen profitability” — covering both their business and personal expenses, all while travelling the world: “If you can get away with it, you can save a lot of money working nomad. As long as you have Wi-Fi, you can work anywhere. We’re actually more productive working remotely because we don’t know as many people. All we do is eat, sleep, work, and explore.” Getting to profitability within a year of launching clearly requires an incredibly lean operation, and the folks at Canny have optimized their lives around pulling off such a feat. I asked Andrew for his input on the story behind this decision making. What were the benefits of bootstrapping a product like Canny? “I think bootstrapping is a great way to start a SaaS company. You don’t really need the money to get started, it’s so easy and cheap. You build a solid, profitable foundation for your company. You retain more ownership of your company.” Now that you’ve bootstrapped to basic profitability, what’s the next step? “From there, it depends on your goals. Lifestyle or go big? No right or wrong answer. I believe raising VC is more compatible with going big, and bootstrapping with lifestyle.” Instapage Status: Bootstrapped from zero to >$10M ARR Instapage Founder Tyson Quick bootstrapped the company out of necessity, rather than choice. In a recent interview with Forbes he highlighted just how critical the situation was for him in the early days: “It started with necessity. I didn’t have much to point to that would make institutional investment firms trust me, and I was so busy building out the beta product that if I dedicated even part of my time to raising money, we would have completely stagnated and died. It also would have been a terrible valuation at that time and I’d have given away too much of the company.” Once the momentum started to pick up, Tyson realised that they wouldn’t need to raise capital at all, and continued to power the company’s growth through revenue. Fast forward to 2017 and Instapage has over $10M in revenue and 130 employees across multiple countries. “I would say that the most important thing for people that want to bootstrap is to find one particular problem that matters to people and work to solve it better than anyone else. Make sure that you validate that the problem does matter and people would pay to solve it. And stay focused.” Storemapper Status: Bootstrapped from zero to profitability (sold) Storemapper Founder Tyler Tringas spoke at the B2B Rocks conference about building Micro SaaS Tyler Tringas represents an interesting case for bootstrapping, primarily because his company Storemapper was built from the ground up as a “micro-SaaS”. But what does that mean? “It is a software as a service business owned and operated by one person or a small team. These businesses are location-independent, high margin, low-risk with predictable recurring revenue. They are the lifestyle business of the future. I scrapped and scrambled my way to building and ultimately selling a profitable SaaS business.” So the entire product was optimized to be lean right from the beginning. Recently, after 5 years of operation, Tyler sold the business (and documented the entire process). “When you estimate ‘how will my SaaS business be doing in 6-12 months’ the answer is very bi-modal. There’s a very very large chance that it’s doing a bit better and a very small but non-zero chance the whole thing blows up in some unforeseen way. At least that was my estimate at the time and that’s why a key financial decision for me to sell the business was diversification.” Is bootstrapping the new default for SaaS? In 2017, we’re seeing the emergence of a slightly evolved version of SaaS business. One that can thrive on the playbook written by the companies that came before it. This new breed is tightly-focused, highly-optimized and altogether more robust. In an environment where it’s becoming harder to raise a VC-backed seed round without proven traction, revenue or product-market fit, it’s natural that startups are finding smarter ways to get there. However, as Canny Founder Andrew Rasmussen stated, the path you take once you have meaningful revenue depends on your personal goals and aspirations. There’s still a clear split between those businesses designed from the ground up as a “lifestyle” business, and those with loftier growth goals. This is a personal choice, for which both routes are completely valid. Also worth mentioning is the variety of alternative fundraising options available to founders today, such as crowdfunding, venture debt and others. The choice for founders is not purely “bootstrap vs. VC”.

[INST] Bootstrappers: SaaS startups finding their own route to $1M+ ARR [/INST]

What’s enabling bootstrapped SaaS? The concept of bootstrapping a business is nothing new. The term originates from the concept of “pulling yourself up by your own bootstraps”. Did you know the term “booting”, i.e. “I’m going to boot up my computer” also comes from the word “bootstrapping”? In the business world, the term generally refers to: “Financing and growing your business without the need for external assistance in the form of capital investment.” In other words, it’s the “I’m doing it my way” approach to building a business. There’s a buzz today in the SaaS universe around bootstrapping. The wind has changed in some way, and has spurred some conversation on the topic. So what’s the deal? The growing divide between SaaS and venture capital Point Nine Capital’s Clement Vouillon spoke about the increasing incompatibility between Venture Capital and SaaS in The Rise of Non “VC compatible” SaaS Companies: ”When I entered the SaaS world 10 years ago (building a product on top of flash…) I knew very few founders running bootstrapped SaaS companies. Raising money was the main way to go. But this has changed and I now encounter, almost on a weekly basis, awesome bootstrapped software companies and micro SaaS.” Clement’s view on the increasing viability of bootstrapping boils down to the following reasons: A growing market for SaaS Ease of building & distribution Availability of advice (i.e. the playbook has already been written) And the above points make a lot of sense. It’s never been easier to build, market and grow a SaaS business — almost every aspect is being solved by tools and products on some level or another. Whether engineering, marketing, billing, analytics — there’s a wealth of advice and tools to help you along the way. Historically, bootstrapping SaaS has always been an option — companies like Atlassian, Qualtrics and Mailchimp have all bootstrapped their way to success and even IPO in the case of Atlassian — but until now, it’s always presented a big tradeoff in one or more ways. Bootstrapping has been the exception, rather than the norm. A path pursued by those true outliers who, in hindsight, seemed destined to find success through unconventional means. Seed-stage fundraising for SaaS is getting harder It’s getting harder for early-stage companies to raise a VC-backed seed round. Many SaaS-focused VCs including Redpoint’s Tomasz Tunguz have discussed this on several occasions: “SaaS company formation has fallen by 44% in the last 3 years. I’m using SaaS seed rounds as a proxy metric. I believe competition is a major driving force, especially since venture capital is conspicuously copious.” Importantly here, Tomasz is using “seed rounds raised” as a proxy for company formation. So what we’re really seeing is that seed rounds are dropping. This is illustrated perfectly by Tomasz’s chart showing the number of seed rounds raised per year: source: http://tomtunguz.com/rising-table-stakes-in-saas/ In fact, the stakes are raising across the board for SaaS companies looking for capital investment. Jason Lemkin, renowned SaaS VC and founder of SaaStr recently wrote about the top-end of the SaaS market: “A funny thing happened as part of the last 2 years of this epic bull run: $3 Billion became the New $1 Billion In SaaS. So maybe it’s time to change the definition of a SaaS Unicorn” In his post, Lemkin discusses a similar theme to that in Tunguz’s article above: Competition is tougher than ever across every vertical BUT the rewards are higher than ever, for those who do make it “Multiples [of revenue] are not that impressive in SaaS today, and arguably too low to support the massive amount of venture investment in the past few years.” So in the face of adversity in the form of tougher competition, higher standards for fundraising and growing incompatibility with venture capital, what do smart founders do? They dig in and hack their way to profitability, of course… 3 examples of bootstrapped SaaS So who are the people out there on the ground, battling on the front lines of this bootstrapping revolution? And what are they experiencing? I wanted to find out. There must be something to learn here… Canny Status: Bootstrapped from zero “ramen” profitability Canny Co-Founders Sarah Hum and Andrew Rasmussen have spent the majority of their time working remotely and travelling. Canny is a SaaS customer feedback app, founded by ex-Facebook employees Sarah Hum and Andrew Rasmussen. Having completed the Y Combinator Startup School (a free 10-week program to educate founders), they proceeded to work on building the product without any outside investment. Seven months after launching the product, the pair were proud to announce that they’d reached “ramen profitability” — covering both their business and personal expenses, all while travelling the world: “If you can get away with it, you can save a lot of money working nomad. As long as you have Wi-Fi, you can work anywhere. We’re actually more productive working remotely because we don’t know as many people. All we do is eat, sleep, work, and explore.” Getting to profitability within a year of launching clearly requires an incredibly lean operation, and the folks at Canny have optimized their lives around pulling off such a feat. I asked Andrew for his input on the story behind this decision making. What were the benefits of bootstrapping a product like Canny? “I think bootstrapping is a great way to start a SaaS company. You don’t really need the money to get started, it’s so easy and cheap. You build a solid, profitable foundation for your company. You retain more ownership of your company.” Now that you’ve bootstrapped to basic profitability, what’s the next step? “From there, it depends on your goals. Lifestyle or go big? No right or wrong answer. I believe raising VC is more compatible with going big, and bootstrapping with lifestyle.” Instapage Status: Bootstrapped from zero to >$10M ARR Instapage Founder Tyson Quick bootstrapped the company out of necessity, rather than choice. In a recent interview with Forbes he highlighted just how critical the situation was for him in the early days: “It started with necessity. I didn’t have much to point to that would make institutional investment firms trust me, and I was so busy building out the beta product that if I dedicated even part of my time to raising money, we would have completely stagnated and died. It also would have been a terrible valuation at that time and I’d have given away too much of the company.” Once the momentum started to pick up, Tyson realised that they wouldn’t need to raise capital at all, and continued to power the company’s growth through revenue. Fast forward to 2017 and Instapage has over $10M in revenue and 130 employees across multiple countries. “I would say that the most important thing for people that want to bootstrap is to find one particular problem that matters to people and work to solve it better than anyone else. Make sure that you validate that the problem does matter and people would pay to solve it. And stay focused.” Storemapper Status: Bootstrapped from zero to profitability (sold) Storemapper Founder Tyler Tringas spoke at the B2B Rocks conference about building Micro SaaS Tyler Tringas represents an interesting case for bootstrapping, primarily because his company Storemapper was built from the ground up as a “micro-SaaS”. But what does that mean? “It is a software as a service business owned and operated by one person or a small team. These businesses are location-independent, high margin, low-risk with predictable recurring revenue. They are the lifestyle business of the future. I scrapped and scrambled my way to building and ultimately selling a profitable SaaS business.” So the entire product was optimized to be lean right from the beginning. Recently, after 5 years of operation, Tyler sold the business (and documented the entire process). “When you estimate ‘how will my SaaS business be doing in 6-12 months’ the answer is very bi-modal. There’s a very very large chance that it’s doing a bit better and a very small but non-zero chance the whole thing blows up in some unforeseen way. At least that was my estimate at the time and that’s why a key financial decision for me to sell the business was diversification.” Is bootstrapping the new default for SaaS? In 2017, we’re seeing the emergence of a slightly evolved version of SaaS business. One that can thrive on the playbook written by the companies that came before it. This new breed is tightly-focused, highly-optimized and altogether more robust. In an environment where it’s becoming harder to raise a VC-backed seed round without proven traction, revenue or product-market fit, it’s natural that startups are finding smarter ways to get there. However, as Canny Founder Andrew Rasmussen stated, the path you take once you have meaningful revenue depends on your personal goals and aspirations. There’s still a clear split between those businesses designed from the ground up as a “lifestyle” business, and those with loftier growth goals. This is a personal choice, for which both routes are completely valid. Also worth mentioning is the variety of alternative fundraising options available to founders today, such as crowdfunding, venture debt and others. The choice for founders is not purely “bootstrap vs. VC”.

<sys> [INST] Bootstrappers: SaaS startups finding their own route to $1M+ ARR [/INST] What’s enabling bootstrapped SaaS? The concept of bootstrapping a business is nothing new. The term originates from the concept of “pulling yourself up by your own bootstraps”. Did you know the term “booting”, i.e. “I’m going to boot up my computer” also comes from the word “bootstrapping”? In the business world, the term generally refers to: “Financing and growing your business without the need for external assistance in the form of capital investment.” In other words, it’s the “I’m doing it my way” approach to building a business. There’s a buzz today in the SaaS universe around bootstrapping. The wind has changed in some way, and has spurred some conversation on the topic. So what’s the deal? The growing divide between SaaS and venture capital Point Nine Capital’s Clement Vouillon spoke about the increasing incompatibility between Venture Capital and SaaS in The Rise of Non “VC compatible” SaaS Companies: ”When I entered the SaaS world 10 years ago (building a product on top of flash…) I knew very few founders running bootstrapped SaaS companies. Raising money was the main way to go. But this has changed and I now encounter, almost on a weekly basis, awesome bootstrapped software companies and micro SaaS.” Clement’s view on the increasing viability of bootstrapping boils down to the following reasons: A growing market for SaaS Ease of building & distribution Availability of advice (i.e. the playbook has already been written) And the above points make a lot of sense. It’s never been easier to build, market and grow a SaaS business — almost every aspect is being solved by tools and products on some level or another. Whether engineering, marketing, billing, analytics — there’s a wealth of advice and tools to help you along the way. Historically, bootstrapping SaaS has always been an option — companies like Atlassian, Qualtrics and Mailchimp have all bootstrapped their way to success and even IPO in the case of Atlassian — but until now, it’s always presented a big tradeoff in one or more ways. Bootstrapping has been the exception, rather than the norm. A path pursued by those true outliers who, in hindsight, seemed destined to find success through unconventional means. Seed-stage fundraising for SaaS is getting harder It’s getting harder for early-stage companies to raise a VC-backed seed round. Many SaaS-focused VCs including Redpoint’s Tomasz Tunguz have discussed this on several occasions: “SaaS company formation has fallen by 44% in the last 3 years. I’m using SaaS seed rounds as a proxy metric. I believe competition is a major driving force, especially since venture capital is conspicuously copious.” Importantly here, Tomasz is using “seed rounds raised” as a proxy for company formation. So what we’re really seeing is that seed rounds are dropping. This is illustrated perfectly by Tomasz’s chart showing the number of seed rounds raised per year: source: http://tomtunguz.com/rising-table-stakes-in-saas/ In fact, the stakes are raising across the board for SaaS companies looking for capital investment. Jason Lemkin, renowned SaaS VC and founder of SaaStr recently wrote about the top-end of the SaaS market: “A funny thing happened as part of the last 2 years of this epic bull run: $3 Billion became the New $1 Billion In SaaS. So maybe it’s time to change the definition of a SaaS Unicorn” In his post, Lemkin discusses a similar theme to that in Tunguz’s article above: Competition is tougher than ever across every vertical BUT the rewards are higher than ever, for those who do make it “Multiples [of revenue] are not that impressive in SaaS today, and arguably too low to support the massive amount of venture investment in the past few years.” So in the face of adversity in the form of tougher competition, higher standards for fundraising and growing incompatibility with venture capital, what do smart founders do? They dig in and hack their way to profitability, of course… 3 examples of bootstrapped SaaS So who are the people out there on the ground, battling on the front lines of this bootstrapping revolution? And what are they experiencing? I wanted to find out. There must be something to learn here… Canny Status: Bootstrapped from zero “ramen” profitability Canny Co-Founders Sarah Hum and Andrew Rasmussen have spent the majority of their time working remotely and travelling. Canny is a SaaS customer feedback app, founded by ex-Facebook employees Sarah Hum and Andrew Rasmussen. Having completed the Y Combinator Startup School (a free 10-week program to educate founders), they proceeded to work on building the product without any outside investment. Seven months after launching the product, the pair were proud to announce that they’d reached “ramen profitability” — covering both their business and personal expenses, all while travelling the world: “If you can get away with it, you can save a lot of money working nomad. As long as you have Wi-Fi, you can work anywhere. We’re actually more productive working remotely because we don’t know as many people. All we do is eat, sleep, work, and explore.” Getting to profitability within a year of launching clearly requires an incredibly lean operation, and the folks at Canny have optimized their lives around pulling off such a feat. I asked Andrew for his input on the story behind this decision making. What were the benefits of bootstrapping a product like Canny? “I think bootstrapping is a great way to start a SaaS company. You don’t really need the money to get started, it’s so easy and cheap. You build a solid, profitable foundation for your company. You retain more ownership of your company.” Now that you’ve bootstrapped to basic profitability, what’s the next step? “From there, it depends on your goals. Lifestyle or go big? No right or wrong answer. I believe raising VC is more compatible with going big, and bootstrapping with lifestyle.” Instapage Status: Bootstrapped from zero to >$10M ARR Instapage Founder Tyson Quick bootstrapped the company out of necessity, rather than choice. In a recent interview with Forbes he highlighted just how critical the situation was for him in the early days: “It started with necessity. I didn’t have much to point to that would make institutional investment firms trust me, and I was so busy building out the beta product that if I dedicated even part of my time to raising money, we would have completely stagnated and died. It also would have been a terrible valuation at that time and I’d have given away too much of the company.” Once the momentum started to pick up, Tyson realised that they wouldn’t need to raise capital at all, and continued to power the company’s growth through revenue. Fast forward to 2017 and Instapage has over $10M in revenue and 130 employees across multiple countries. “I would say that the most important thing for people that want to bootstrap is to find one particular problem that matters to people and work to solve it better than anyone else. Make sure that you validate that the problem does matter and people would pay to solve it. And stay focused.” Storemapper Status: Bootstrapped from zero to profitability (sold) Storemapper Founder Tyler Tringas spoke at the B2B Rocks conference about building Micro SaaS Tyler Tringas represents an interesting case for bootstrapping, primarily because his company Storemapper was built from the ground up as a “micro-SaaS”. But what does that mean? “It is a software as a service business owned and operated by one person or a small team. These businesses are location-independent, high margin, low-risk with predictable recurring revenue. They are the lifestyle business of the future. I scrapped and scrambled my way to building and ultimately selling a profitable SaaS business.” So the entire product was optimized to be lean right from the beginning. Recently, after 5 years of operation, Tyler sold the business (and documented the entire process). “When you estimate ‘how will my SaaS business be doing in 6-12 months’ the answer is very bi-modal. There’s a very very large chance that it’s doing a bit better and a very small but non-zero chance the whole thing blows up in some unforeseen way. At least that was my estimate at the time and that’s why a key financial decision for me to sell the business was diversification.” Is bootstrapping the new default for SaaS? In 2017, we’re seeing the emergence of a slightly evolved version of SaaS business. One that can thrive on the playbook written by the companies that came before it. This new breed is tightly-focused, highly-optimized and altogether more robust. In an environment where it’s becoming harder to raise a VC-backed seed round without proven traction, revenue or product-market fit, it’s natural that startups are finding smarter ways to get there. However, as Canny Founder Andrew Rasmussen stated, the path you take once you have meaningful revenue depends on your personal goals and aspirations. There’s still a clear split between those businesses designed from the ground up as a “lifestyle” business, and those with loftier growth goals. This is a personal choice, for which both routes are completely valid. Also worth mentioning is the variety of alternative fundraising options available to founders today, such as crowdfunding, venture debt and others. The choice for founders is not purely “bootstrap vs. VC”. </sys

Slack’s IPO Is Going to Be a Success. Here’s Why. Slack will go public later today on a $15.7B valuation, the biggest SaaS IPO in history and the first direct listing of a SaaS company. We are truly living through a golden age of business software. While the core functionality of Slack is similar to IRC, it’s clearly something beyond the core product that has enabled Slack to become so valuable. The success of the company speaks for itself — Slack is the fastest growing workplace app ever and its shares have been popular in private trading for a while. So where does this success come from? I believe it’s rooted in two (connected) factors: The Slack team has built a truly great product: one that is connected in existing behavior, improves on it, and is very sticky. In the process, they’ve created a new (huge) category in which they hold a formidable advantage. They’ve come up with a business model which supports the product: it allows the company to capture the lion’s share of this new category/market and grow sustainably. This explains why Slack is so bullish on their public offering — it’s planned as a direct listing (technically not an IPO), meaning the company won’t be issuing new shares, but rather allowing investors to monetize their existing stock. Also, there would be no limitations to selling, which creates a risk about the price of Slack’s shares. Because of the reasons I explained above, I believe Slack’s public offering will be a success. In the following sections, I will go into detail on what makes Slack’s product and business model so good and so well-aligned. But before we get to it, let’s quickly go over Slack’s numbers. A look at Slack’s numbers A look at Slack’s S-1 statement reveals some truly fascinating statistics about the company: Slack’s revenue was $134.8m in Q1 2019 Slack generated $134.8m in revenue in Q1 of 2019. That means sales grew 66.6% in one year. That level of growth is amazing for a company that generates over $100m in sales on a quarterly basis. The fact that revenue continues to grow so fast, combined with where this growth is coming from (more on this below), signals that Slack’s (long-term) business strategy is working. The question is, how much runway do they have… Slack recorded a net loss of $31.9m in Q1 of 2019 Slack continues to burn through a significant amount of cash per quarter. However, it’s also important to look at their numbers from the perspective of the $792m in cash Slack have sitting in their bank account. At their current rate, they would have around 6 years of runway. That’s plenty of time to figure out how to make money (also, it’s aligned with their overall strategy, which I’ll get to in a bit). 40% of revenue comes from 0.7% of customers That’s perhaps the biggest threat to Slack, if there’s one. Out of 95 thousand paying customers, there are 645 organizations that generate >$100,000 in annual recurring revenue. These large customers contribute about 40% of Slack’s total revenue. Clearly, relying on such a small number of customers is a risk, but it also shows how successful Slack is at growing through existing customers — they can enter an organization just by getting one team/department to use Slack and then expand internally by getting the whole company to switch. Net dollar retention rate of 143% Slack is well into net negative churn territory. In fact, the company has one of the best net dollar retention rates a SaaS company going public has ever reported: Source What the 143% is telling us is that Slack’s customers are growing and expanding their use of the product faster than they are churning. This is a critical piece of Slack’s business model. However, before we get to it, we should look at how Slack created a product that became so sticky. Find an existing (broken) behavior and fix it Organizations have relied on email for quick (asynchronous) communication for years, but email is not a good fit for that purpose. Slack identified this and built a tool, which is much better aligned with the goals that users want to achieve. The similarity with IRC is not by chance — early in the life of the company when they were working on developing an MMORPG game, they were using IRC as a team. However, the team quickly realized what were the limitations of IRC and started building and expanding on it. After the game didn’t pan out as expected, CEO Stewart Butterfield decided to pivot and spin out their tool for internal communication as a separate product. Thus, Slack was born. Slack not only created a new tool that was well aligned with the needs of professional teams, but they also created a whole new category. Being pioneers and having a great product positioned Slack to capture the lion’s share in their category. However, that didn’t prompt the team to exploit this position for quick returns. Instead, Slack focussed on building a business model that would allow them to capture a lot more value in the long term. Focus on integrating then building all the tools Professional software is a gradually more fragmented field. The average large company in the US uses software from around 1000 different vendors. Yet, most companies look at expanding their own suite of products as a way to grow. Slack has chosen a different way. The company admits its product offering is limited, but that’s by design. Instead of trying to expand by building a tool for every task and behavior as a way to grow, Slack has chosen to focus on integrating as many popular tools as possible to work with their chat tool. That means their users don’t have to switch their behavior and learn a new tool. That lowers friction for people to start using Slack and makes the product sticky. Thus, Slack has become a platform — it allows external developers to integrate and build on top of the tool. This creates a long-term network effect: the more people use Slack, the more other popular tools would want to integrate with it, thus sparking further growth in the number of teams that want to use Slack, and so forth. (To learn more about what it means for Slack to be a platform and how they’re marketing it, check out this interview with Ceci Stallsmith, Slack’s Director of Platform Marketing) Build a business model that supports your product strategy According to the S-1 filing, there are over 600,000 teams worldwide that use Slack, but only around 95,000 (or ~16%) are paying for the product. That might seem like a precarious position to be in, but you also need to consider the fact that only 8% of their customers start with a paid plan. For Slack, the freemium model is a great lead generation tool — once a team joins and starts chatting, integrating with other tools they’re using, and adding their information to the platform, it would be very hard to switch to another tool. That way, Slack can “enter” a team early with their free tier, establish a foothold, and stay for the long haul — the stickiness of the product minimizes the chance customers leave early. The net negative churn numbers we saw above are a testament that the strategy works. Slack is going to be successful as a public company Let’s do this. pic.twitter.com/YfGc8OwJOD — kris (@kriz) June 19, 2019 Slack sets a great example for all types of subscription companies. Butterfield and team succeeded by focusing on defining their market well and building a product that’s both great at fulfilling the needs of their market and sticky. Additionally, they also did a great job of formulating their strategy and business model in a way that supports the product strategy. Because of the above, I am very optimistic about Slack’s future as a public company. Even if market analysts seem to be pretty cautious at the moment. Disclaimer: As of writing I own no shares in Slack, though this could change following their listing later today. This article does not constitute investment or financial advice.

[INST] Slack’s IPO Is Going to Be a Success [/INST]

Here’s Why. Slack will go public later today on a $15.7B valuation, the biggest SaaS IPO in history and the first direct listing of a SaaS company. We are truly living through a golden age of business software. While the core functionality of Slack is similar to IRC, it’s clearly something beyond the core product that has enabled Slack to become so valuable. The success of the company speaks for itself — Slack is the fastest growing workplace app ever and its shares have been popular in private trading for a while. So where does this success come from? I believe it’s rooted in two (connected) factors: The Slack team has built a truly great product: one that is connected in existing behavior, improves on it, and is very sticky. In the process, they’ve created a new (huge) category in which they hold a formidable advantage. They’ve come up with a business model which supports the product: it allows the company to capture the lion’s share of this new category/market and grow sustainably. This explains why Slack is so bullish on their public offering — it’s planned as a direct listing (technically not an IPO), meaning the company won’t be issuing new shares, but rather allowing investors to monetize their existing stock. Also, there would be no limitations to selling, which creates a risk about the price of Slack’s shares. Because of the reasons I explained above, I believe Slack’s public offering will be a success. In the following sections, I will go into detail on what makes Slack’s product and business model so good and so well-aligned. But before we get to it, let’s quickly go over Slack’s numbers. A look at Slack’s numbers A look at Slack’s S-1 statement reveals some truly fascinating statistics about the company: Slack’s revenue was $134.8m in Q1 2019 Slack generated $134.8m in revenue in Q1 of 2019. That means sales grew 66.6% in one year. That level of growth is amazing for a company that generates over $100m in sales on a quarterly basis. The fact that revenue continues to grow so fast, combined with where this growth is coming from (more on this below), signals that Slack’s (long-term) business strategy is working. The question is, how much runway do they have… Slack recorded a net loss of $31.9m in Q1 of 2019 Slack continues to burn through a significant amount of cash per quarter. However, it’s also important to look at their numbers from the perspective of the $792m in cash Slack have sitting in their bank account. At their current rate, they would have around 6 years of runway. That’s plenty of time to figure out how to make money (also, it’s aligned with their overall strategy, which I’ll get to in a bit). 40% of revenue comes from 0.7% of customers That’s perhaps the biggest threat to Slack, if there’s one. Out of 95 thousand paying customers, there are 645 organizations that generate >$100,000 in annual recurring revenue. These large customers contribute about 40% of Slack’s total revenue. Clearly, relying on such a small number of customers is a risk, but it also shows how successful Slack is at growing through existing customers — they can enter an organization just by getting one team/department to use Slack and then expand internally by getting the whole company to switch. Net dollar retention rate of 143% Slack is well into net negative churn territory. In fact, the company has one of the best net dollar retention rates a SaaS company going public has ever reported: Source What the 143% is telling us is that Slack’s customers are growing and expanding their use of the product faster than they are churning. This is a critical piece of Slack’s business model. However, before we get to it, we should look at how Slack created a product that became so sticky. Find an existing (broken) behavior and fix it Organizations have relied on email for quick (asynchronous) communication for years, but email is not a good fit for that purpose. Slack identified this and built a tool, which is much better aligned with the goals that users want to achieve. The similarity with IRC is not by chance — early in the life of the company when they were working on developing an MMORPG game, they were using IRC as a team. However, the team quickly realized what were the limitations of IRC and started building and expanding on it. After the game didn’t pan out as expected, CEO Stewart Butterfield decided to pivot and spin out their tool for internal communication as a separate product. Thus, Slack was born. Slack not only created a new tool that was well aligned with the needs of professional teams, but they also created a whole new category. Being pioneers and having a great product positioned Slack to capture the lion’s share in their category. However, that didn’t prompt the team to exploit this position for quick returns. Instead, Slack focussed on building a business model that would allow them to capture a lot more value in the long term. Focus on integrating then building all the tools Professional software is a gradually more fragmented field. The average large company in the US uses software from around 1000 different vendors. Yet, most companies look at expanding their own suite of products as a way to grow. Slack has chosen a different way. The company admits its product offering is limited, but that’s by design. Instead of trying to expand by building a tool for every task and behavior as a way to grow, Slack has chosen to focus on integrating as many popular tools as possible to work with their chat tool. That means their users don’t have to switch their behavior and learn a new tool. That lowers friction for people to start using Slack and makes the product sticky. Thus, Slack has become a platform — it allows external developers to integrate and build on top of the tool. This creates a long-term network effect: the more people use Slack, the more other popular tools would want to integrate with it, thus sparking further growth in the number of teams that want to use Slack, and so forth. (To learn more about what it means for Slack to be a platform and how they’re marketing it, check out this interview with Ceci Stallsmith, Slack’s Director of Platform Marketing) Build a business model that supports your product strategy According to the S-1 filing, there are over 600,000 teams worldwide that use Slack, but only around 95,000 (or ~16%) are paying for the product. That might seem like a precarious position to be in, but you also need to consider the fact that only 8% of their customers start with a paid plan. For Slack, the freemium model is a great lead generation tool — once a team joins and starts chatting, integrating with other tools they’re using, and adding their information to the platform, it would be very hard to switch to another tool. That way, Slack can “enter” a team early with their free tier, establish a foothold, and stay for the long haul — the stickiness of the product minimizes the chance customers leave early. The net negative churn numbers we saw above are a testament that the strategy works. Slack is going to be successful as a public company Let’s do this. pic.twitter.com/YfGc8OwJOD — kris (@kriz) June 19, 2019 Slack sets a great example for all types of subscription companies. Butterfield and team succeeded by focusing on defining their market well and building a product that’s both great at fulfilling the needs of their market and sticky. Additionally, they also did a great job of formulating their strategy and business model in a way that supports the product strategy. Because of the above, I am very optimistic about Slack’s future as a public company. Even if market analysts seem to be pretty cautious at the moment. Disclaimer: As of writing I own no shares in Slack, though this could change following their listing later today. This article does not constitute investment or financial advice.

<sys> [INST] Slack’s IPO Is Going to Be a Success [/INST] Here’s Why. Slack will go public later today on a $15.7B valuation, the biggest SaaS IPO in history and the first direct listing of a SaaS company. We are truly living through a golden age of business software. While the core functionality of Slack is similar to IRC, it’s clearly something beyond the core product that has enabled Slack to become so valuable. The success of the company speaks for itself — Slack is the fastest growing workplace app ever and its shares have been popular in private trading for a while. So where does this success come from? I believe it’s rooted in two (connected) factors: The Slack team has built a truly great product: one that is connected in existing behavior, improves on it, and is very sticky. In the process, they’ve created a new (huge) category in which they hold a formidable advantage. They’ve come up with a business model which supports the product: it allows the company to capture the lion’s share of this new category/market and grow sustainably. This explains why Slack is so bullish on their public offering — it’s planned as a direct listing (technically not an IPO), meaning the company won’t be issuing new shares, but rather allowing investors to monetize their existing stock. Also, there would be no limitations to selling, which creates a risk about the price of Slack’s shares. Because of the reasons I explained above, I believe Slack’s public offering will be a success. In the following sections, I will go into detail on what makes Slack’s product and business model so good and so well-aligned. But before we get to it, let’s quickly go over Slack’s numbers. A look at Slack’s numbers A look at Slack’s S-1 statement reveals some truly fascinating statistics about the company: Slack’s revenue was $134.8m in Q1 2019 Slack generated $134.8m in revenue in Q1 of 2019. That means sales grew 66.6% in one year. That level of growth is amazing for a company that generates over $100m in sales on a quarterly basis. The fact that revenue continues to grow so fast, combined with where this growth is coming from (more on this below), signals that Slack’s (long-term) business strategy is working. The question is, how much runway do they have… Slack recorded a net loss of $31.9m in Q1 of 2019 Slack continues to burn through a significant amount of cash per quarter. However, it’s also important to look at their numbers from the perspective of the $792m in cash Slack have sitting in their bank account. At their current rate, they would have around 6 years of runway. That’s plenty of time to figure out how to make money (also, it’s aligned with their overall strategy, which I’ll get to in a bit). 40% of revenue comes from 0.7% of customers That’s perhaps the biggest threat to Slack, if there’s one. Out of 95 thousand paying customers, there are 645 organizations that generate >$100,000 in annual recurring revenue. These large customers contribute about 40% of Slack’s total revenue. Clearly, relying on such a small number of customers is a risk, but it also shows how successful Slack is at growing through existing customers — they can enter an organization just by getting one team/department to use Slack and then expand internally by getting the whole company to switch. Net dollar retention rate of 143% Slack is well into net negative churn territory. In fact, the company has one of the best net dollar retention rates a SaaS company going public has ever reported: Source What the 143% is telling us is that Slack’s customers are growing and expanding their use of the product faster than they are churning. This is a critical piece of Slack’s business model. However, before we get to it, we should look at how Slack created a product that became so sticky. Find an existing (broken) behavior and fix it Organizations have relied on email for quick (asynchronous) communication for years, but email is not a good fit for that purpose. Slack identified this and built a tool, which is much better aligned with the goals that users want to achieve. The similarity with IRC is not by chance — early in the life of the company when they were working on developing an MMORPG game, they were using IRC as a team. However, the team quickly realized what were the limitations of IRC and started building and expanding on it. After the game didn’t pan out as expected, CEO Stewart Butterfield decided to pivot and spin out their tool for internal communication as a separate product. Thus, Slack was born. Slack not only created a new tool that was well aligned with the needs of professional teams, but they also created a whole new category. Being pioneers and having a great product positioned Slack to capture the lion’s share in their category. However, that didn’t prompt the team to exploit this position for quick returns. Instead, Slack focussed on building a business model that would allow them to capture a lot more value in the long term. Focus on integrating then building all the tools Professional software is a gradually more fragmented field. The average large company in the US uses software from around 1000 different vendors. Yet, most companies look at expanding their own suite of products as a way to grow. Slack has chosen a different way. The company admits its product offering is limited, but that’s by design. Instead of trying to expand by building a tool for every task and behavior as a way to grow, Slack has chosen to focus on integrating as many popular tools as possible to work with their chat tool. That means their users don’t have to switch their behavior and learn a new tool. That lowers friction for people to start using Slack and makes the product sticky. Thus, Slack has become a platform — it allows external developers to integrate and build on top of the tool. This creates a long-term network effect: the more people use Slack, the more other popular tools would want to integrate with it, thus sparking further growth in the number of teams that want to use Slack, and so forth. (To learn more about what it means for Slack to be a platform and how they’re marketing it, check out this interview with Ceci Stallsmith, Slack’s Director of Platform Marketing) Build a business model that supports your product strategy According to the S-1 filing, there are over 600,000 teams worldwide that use Slack, but only around 95,000 (or ~16%) are paying for the product. That might seem like a precarious position to be in, but you also need to consider the fact that only 8% of their customers start with a paid plan. For Slack, the freemium model is a great lead generation tool — once a team joins and starts chatting, integrating with other tools they’re using, and adding their information to the platform, it would be very hard to switch to another tool. That way, Slack can “enter” a team early with their free tier, establish a foothold, and stay for the long haul — the stickiness of the product minimizes the chance customers leave early. The net negative churn numbers we saw above are a testament that the strategy works. Slack is going to be successful as a public company Let’s do this. pic.twitter.com/YfGc8OwJOD — kris (@kriz) June 19, 2019 Slack sets a great example for all types of subscription companies. Butterfield and team succeeded by focusing on defining their market well and building a product that’s both great at fulfilling the needs of their market and sticky. Additionally, they also did a great job of formulating their strategy and business model in a way that supports the product strategy. Because of the above, I am very optimistic about Slack’s future as a public company. Even if market analysts seem to be pretty cautious at the moment. Disclaimer: As of writing I own no shares in Slack, though this could change following their listing later today. This article does not constitute investment or financial advice. </sys

SaaS Metrics Refresher #2: Recurring Revenue. Recurring revenue is the heart of every subscription business, and a key reason for the explosion of SaaS as a business model in recent years. In short, recurring revenue is all about predictable, long-term value — it’s in these characteristics where non-recurring revenue can fall short. What is it? Put simply, recurring revenue is any of your company’s revenue that’s highly likely to continue in the future. In terms of SaaS, that’s usually revenue from customer subscriptions. It’s predictable, stable and can be counted on with a high degree of certainty. “Recurring revenue makes a company more stable and predictable both operationally and financially. This, in turn, lowers the risk associated with a company’s operations, though negative word of mouth or bad publicity can easily reduce this sense of security.” Investopedia Why is it important? “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue compounds — it builds over time as you add more subscriptions. This is what makes businesses with a recurring revenue model so appealing. Adding a new customer means adding cumulative ongoing revenue. “Recurring revenue is important because to create a valuable, sellable company, you need to demonstrate how the business will continue to thrive once you’re gone. Long-term contracts are the best way to guarantee a stream of revenue in the future, but you can also create recurring revenue through a subscription service or membership club or even just by adding a line of consumables to what you sell.” John Warrillow (@JohnWarrillow), author of Built To Sell: 8 Things That Drive The Value Of Your Business Recurring revenue metrics & analysis “Not all MRR should be treated alike. For example, you read crazy success stories about how so-and-so got to $100k MRR in their first year, then you find out that their cost of revenue is $120k/mo, so they’re just selling $1.20 for $1. Anyone can do that. MRR is definitely one of the most important metrics in SaaS, but profit margins are underrated” Andrew Rasmussen (@a13n), Canny Monthly recurring revenue (MRR): A measure of your normalized (amortized) monthly subscription revenue. If you have some annual subscriptions, you can normalize these (divide by 12) to calculate MRR. Annualized run rate (ARR): Your MRR multiplied by 12 — a forecast of your annual revenue, based on MRR. This is often used as a rough benchmark for subscriptions, especially for investors. 🚨 Annualized run rate isn’t the same as annual recurring revenue! Here we’re simply forecasting revenue that hasn’t yet been earned. Average revenue per account (ARPA): Your MRR divided by customer count — the average MRR across all customers. This is useful for measuring and tracking upsells and revenue growth from expansion. 💡 ARPA is also known as average revenue per customer (ARPC) or average revenue per user (ARPU). Net MRR growth rate: The month over month (percentage) increase in net MRR. This is useful as an indicator of overall revenue growth in a SaaS business. MRR growth rate = (Net MRR at end of period – Net MRR at beginning of period) / Net MRR at beginning of period * 100 Categorizing recurring revenue with MRR movements Not all MRR is made equal! To get a more actionable view of your revenue, you can break it down into its component parts — what we call MRR movements: When should you use ARR vs MRR? MRR is the most popular metric for revenue in subscription businesses, and is generally a more actionable metric to use in analysis (if you’re trying to reach actionable results and make operational decisions). If you have primarily annual or multi-year contracts, lower transaction volume and high average contract value (ACV), ARR can be a useful metric to use. It’s also generally better aligned with your GAAP revenue, whereas MRR can differ significantly. Resources and Further Reading DOWNLOADABLES The Ultimate SaaS Metrics Cheat Sheet (ChartMogul) — Our original cheat sheet gives a comprehensive overview of revenue-based metrics. This is the perfect starting point for everything MRR-based! BASICS SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters (David Skok) — There’s a reason why David is commonly referred to as the “godfather of SaaS metrics”, and a lot of it is packed into this definitive post on all things metrics related. Make Metrics Meaningful: how each team relates to MRR (ChartMogul) — Perhaps you’re bought into the concept of MRR, but what about the other teams across your company? DEEP CUTS How much of your MRR is slipping away? (ChartMogul) — Just one example of how MRR can be used in conjunction with other data to provide more actionable insights. Mobile app monetization metrics for subscriptions (ChartMogul) — How do you measure mobile app monetization in the context of subscription revenue?

[INST] SaaS Metrics Refresher #2: Recurring Revenue [/INST]

Recurring revenue is the heart of every subscription business, and a key reason for the explosion of SaaS as a business model in recent years. In short, recurring revenue is all about predictable, long-term value — it’s in these characteristics where non-recurring revenue can fall short. What is it? Put simply, recurring revenue is any of your company’s revenue that’s highly likely to continue in the future. In terms of SaaS, that’s usually revenue from customer subscriptions. It’s predictable, stable and can be counted on with a high degree of certainty. “Recurring revenue makes a company more stable and predictable both operationally and financially. This, in turn, lowers the risk associated with a company’s operations, though negative word of mouth or bad publicity can easily reduce this sense of security.” Investopedia Why is it important? “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue compounds — it builds over time as you add more subscriptions. This is what makes businesses with a recurring revenue model so appealing. Adding a new customer means adding cumulative ongoing revenue. “Recurring revenue is important because to create a valuable, sellable company, you need to demonstrate how the business will continue to thrive once you’re gone. Long-term contracts are the best way to guarantee a stream of revenue in the future, but you can also create recurring revenue through a subscription service or membership club or even just by adding a line of consumables to what you sell.” John Warrillow (@JohnWarrillow), author of Built To Sell: 8 Things That Drive The Value Of Your Business Recurring revenue metrics & analysis “Not all MRR should be treated alike. For example, you read crazy success stories about how so-and-so got to $100k MRR in their first year, then you find out that their cost of revenue is $120k/mo, so they’re just selling $1.20 for $1. Anyone can do that. MRR is definitely one of the most important metrics in SaaS, but profit margins are underrated” Andrew Rasmussen (@a13n), Canny Monthly recurring revenue (MRR): A measure of your normalized (amortized) monthly subscription revenue. If you have some annual subscriptions, you can normalize these (divide by 12) to calculate MRR. Annualized run rate (ARR): Your MRR multiplied by 12 — a forecast of your annual revenue, based on MRR. This is often used as a rough benchmark for subscriptions, especially for investors. 🚨 Annualized run rate isn’t the same as annual recurring revenue! Here we’re simply forecasting revenue that hasn’t yet been earned. Average revenue per account (ARPA): Your MRR divided by customer count — the average MRR across all customers. This is useful for measuring and tracking upsells and revenue growth from expansion. 💡 ARPA is also known as average revenue per customer (ARPC) or average revenue per user (ARPU). Net MRR growth rate: The month over month (percentage) increase in net MRR. This is useful as an indicator of overall revenue growth in a SaaS business. MRR growth rate = (Net MRR at end of period – Net MRR at beginning of period) / Net MRR at beginning of period * 100 Categorizing recurring revenue with MRR movements Not all MRR is made equal! To get a more actionable view of your revenue, you can break it down into its component parts — what we call MRR movements: When should you use ARR vs MRR? MRR is the most popular metric for revenue in subscription businesses, and is generally a more actionable metric to use in analysis (if you’re trying to reach actionable results and make operational decisions). If you have primarily annual or multi-year contracts, lower transaction volume and high average contract value (ACV), ARR can be a useful metric to use. It’s also generally better aligned with your GAAP revenue, whereas MRR can differ significantly. Resources and Further Reading DOWNLOADABLES The Ultimate SaaS Metrics Cheat Sheet (ChartMogul) — Our original cheat sheet gives a comprehensive overview of revenue-based metrics. This is the perfect starting point for everything MRR-based! BASICS SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters (David Skok) — There’s a reason why David is commonly referred to as the “godfather of SaaS metrics”, and a lot of it is packed into this definitive post on all things metrics related. Make Metrics Meaningful: how each team relates to MRR (ChartMogul) — Perhaps you’re bought into the concept of MRR, but what about the other teams across your company? DEEP CUTS How much of your MRR is slipping away? (ChartMogul) — Just one example of how MRR can be used in conjunction with other data to provide more actionable insights. Mobile app monetization metrics for subscriptions (ChartMogul) — How do you measure mobile app monetization in the context of subscription revenue?

<sys> [INST] SaaS Metrics Refresher #2: Recurring Revenue [/INST] Recurring revenue is the heart of every subscription business, and a key reason for the explosion of SaaS as a business model in recent years. In short, recurring revenue is all about predictable, long-term value — it’s in these characteristics where non-recurring revenue can fall short. What is it? Put simply, recurring revenue is any of your company’s revenue that’s highly likely to continue in the future. In terms of SaaS, that’s usually revenue from customer subscriptions. It’s predictable, stable and can be counted on with a high degree of certainty. “Recurring revenue makes a company more stable and predictable both operationally and financially. This, in turn, lowers the risk associated with a company’s operations, though negative word of mouth or bad publicity can easily reduce this sense of security.” Investopedia Why is it important? “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue compounds — it builds over time as you add more subscriptions. This is what makes businesses with a recurring revenue model so appealing. Adding a new customer means adding cumulative ongoing revenue. “Recurring revenue is important because to create a valuable, sellable company, you need to demonstrate how the business will continue to thrive once you’re gone. Long-term contracts are the best way to guarantee a stream of revenue in the future, but you can also create recurring revenue through a subscription service or membership club or even just by adding a line of consumables to what you sell.” John Warrillow (@JohnWarrillow), author of Built To Sell: 8 Things That Drive The Value Of Your Business Recurring revenue metrics & analysis “Not all MRR should be treated alike. For example, you read crazy success stories about how so-and-so got to $100k MRR in their first year, then you find out that their cost of revenue is $120k/mo, so they’re just selling $1.20 for $1. Anyone can do that. MRR is definitely one of the most important metrics in SaaS, but profit margins are underrated” Andrew Rasmussen (@a13n), Canny Monthly recurring revenue (MRR): A measure of your normalized (amortized) monthly subscription revenue. If you have some annual subscriptions, you can normalize these (divide by 12) to calculate MRR. Annualized run rate (ARR): Your MRR multiplied by 12 — a forecast of your annual revenue, based on MRR. This is often used as a rough benchmark for subscriptions, especially for investors. 🚨 Annualized run rate isn’t the same as annual recurring revenue! Here we’re simply forecasting revenue that hasn’t yet been earned. Average revenue per account (ARPA): Your MRR divided by customer count — the average MRR across all customers. This is useful for measuring and tracking upsells and revenue growth from expansion. 💡 ARPA is also known as average revenue per customer (ARPC) or average revenue per user (ARPU). Net MRR growth rate: The month over month (percentage) increase in net MRR. This is useful as an indicator of overall revenue growth in a SaaS business. MRR growth rate = (Net MRR at end of period – Net MRR at beginning of period) / Net MRR at beginning of period * 100 Categorizing recurring revenue with MRR movements Not all MRR is made equal! To get a more actionable view of your revenue, you can break it down into its component parts — what we call MRR movements: When should you use ARR vs MRR? MRR is the most popular metric for revenue in subscription businesses, and is generally a more actionable metric to use in analysis (if you’re trying to reach actionable results and make operational decisions). If you have primarily annual or multi-year contracts, lower transaction volume and high average contract value (ACV), ARR can be a useful metric to use. It’s also generally better aligned with your GAAP revenue, whereas MRR can differ significantly. Resources and Further Reading DOWNLOADABLES The Ultimate SaaS Metrics Cheat Sheet (ChartMogul) — Our original cheat sheet gives a comprehensive overview of revenue-based metrics. This is the perfect starting point for everything MRR-based! BASICS SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters (David Skok) — There’s a reason why David is commonly referred to as the “godfather of SaaS metrics”, and a lot of it is packed into this definitive post on all things metrics related. Make Metrics Meaningful: how each team relates to MRR (ChartMogul) — Perhaps you’re bought into the concept of MRR, but what about the other teams across your company? DEEP CUTS How much of your MRR is slipping away? (ChartMogul) — Just one example of how MRR can be used in conjunction with other data to provide more actionable insights. Mobile app monetization metrics for subscriptions (ChartMogul) — How do you measure mobile app monetization in the context of subscription revenue? </sys

Retention Benchmarks and Insights From Studying Over 2,100 SaaS Businesses. Retention isn’t a silver bullet, but in SaaS, it’s the closest thing to it. Why is retention so pivotal? What does good retention look like? And does higher retention mean higher growth? We analyzed it all in our inaugural ChartMogul SaaS Retention Report. Here are the four insights that stood out in our research: Companies with best-in-class retention grow at least 1.5-3x faster than their peers B2B SaaS businesses enjoy higher net retention than B2C SaaS Retention becomes more important as SaaS businesses enter the post-PMF growth phase Retention in 2022 was harder than ever Companies with best-in-class retention grow at least 1.5-3x faster than their peers On average, SaaS businesses with a net retention rate of over 100% grow 43.6% per annum. In comparison, businesses with a net retention rate of less than 60% grow at just 13.1% per annum. See chapter 6 in the report for more on how retention impacts growth. Not just better growth, a high net retention rate can also help you build a more capital-efficient business, and even get higher valuations from investors. “We really like this metric because it encapsulates both the business’s ability to retain — so minimizing churn — and also their ability to upsell. That’s super important, not just winning new logos in B2B software, but adding additional products, expanding your platform, cross-selling, and increasing usage.” Jess Bartos, Investor, Salesforce Ventures B2B SaaS businesses enjoy higher net retention than B2C SaaS How your business operates depends on who you sell to. Companies are a lot more similar at a particular average revenue per month (ARPA) band than you’d expect, especially in terms of retention. B2C companies have a lower ARPA compared to B2B companies. The length of the sales cycle, the tenure of your contract, discounting, onboarding, the type of customer support, and even retention strategies all depend on your ARPA. Only 2.7% of SaaS businesses with an ARPA less than $10/month have net retention rates over 100%. In contrast, 41.1% of SaaS businesses with an ARPA over $500/month have net retention of over 100%. See chapter 2 in the report to learn more about net retention benchmarks. It’s hard for B2C businesses to have high net retention rates. That’s because, in B2C, churn is higher and expansion is lower. Churn is higher because of a lot of knee-jerk buying by the individual customers and expansion is lower because there are fewer upselling and cross-selling opportunities. Retention becomes more important as SaaS businesses enter the post-PMF growth phase What’s a good net retention rate, differs by the stage of business you are in. In the pre-product market fit stage of the business, net retention is usually poor. As startups grow and find product-market fit, net retention improves. Finally, as companies reach scale, and become category leaders, net retention often goes over 100%. A net retention rate of less than 100% means that your ARR decays. This means that you have less ARR today than a year ago from the same set of customers. Whereas, a net retention rate of over 100% indicates strong product market fit and showcases your ability to compound your revenue from your existing customer base. When benchmarking, always keep the stage of your business in mind. Businesses with ARR in the range of $1-3m have a top quartile net retention rate of 94%. Those in the $3-15m ARR segment, have a top quartile net retention rate of 99%. Businesses at scale with ARR in the range of $15-30m have a top quartile net retention rate of over 105%. “Not every dollar is created equal, especially in the venture world. A retained dollar is worth a lot more than a newly acquired dollar that has yet to renew.” Daria Danilina, Co-founder, Salesroom Retention in 2022 was harder than ever More than half of SaaS businesses had lower retention in 2022 compared to 2021. A challenging macroeconomic environment meant that subscribers re-assessed and cut their SaaS spend. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to 2020. Learn more in chapter 6 of the report. This trend of retention being lower in 2022 vs. 2021 is not unique to SaaS startups and scaleups. Even SaaS behemoths like Snowflake also saw their retention come down from the highs of 2021. Download the ChartMogul SaaS Retention Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings in the ChartMogul SaaS Retention Report. What is retention and why does it matter? What are some strengths & weaknesses of the net retention metric? What is a good retention rate (net, gross & customer)? What percentage of companies have customer retention over 85%? Does a higher gross retention rate mean a higher growth rate? Does a net retention rate over 100% mean you can grow organically forever? What is a good 3 and 12-month customer retention rate for new customers? What percentage of revenue added comes from expansion? And many more insights… Download the PDF now.

[INST] Retention Benchmarks and Insights From Studying Over 2,100 SaaS Businesses [/INST]

Retention isn’t a silver bullet, but in SaaS, it’s the closest thing to it. Why is retention so pivotal? What does good retention look like? And does higher retention mean higher growth? We analyzed it all in our inaugural ChartMogul SaaS Retention Report. Here are the four insights that stood out in our research: Companies with best-in-class retention grow at least 1.5-3x faster than their peers B2B SaaS businesses enjoy higher net retention than B2C SaaS Retention becomes more important as SaaS businesses enter the post-PMF growth phase Retention in 2022 was harder than ever Companies with best-in-class retention grow at least 1.5-3x faster than their peers On average, SaaS businesses with a net retention rate of over 100% grow 43.6% per annum. In comparison, businesses with a net retention rate of less than 60% grow at just 13.1% per annum. See chapter 6 in the report for more on how retention impacts growth. Not just better growth, a high net retention rate can also help you build a more capital-efficient business, and even get higher valuations from investors. “We really like this metric because it encapsulates both the business’s ability to retain — so minimizing churn — and also their ability to upsell. That’s super important, not just winning new logos in B2B software, but adding additional products, expanding your platform, cross-selling, and increasing usage.” Jess Bartos, Investor, Salesforce Ventures B2B SaaS businesses enjoy higher net retention than B2C SaaS How your business operates depends on who you sell to. Companies are a lot more similar at a particular average revenue per month (ARPA) band than you’d expect, especially in terms of retention. B2C companies have a lower ARPA compared to B2B companies. The length of the sales cycle, the tenure of your contract, discounting, onboarding, the type of customer support, and even retention strategies all depend on your ARPA. Only 2.7% of SaaS businesses with an ARPA less than $10/month have net retention rates over 100%. In contrast, 41.1% of SaaS businesses with an ARPA over $500/month have net retention of over 100%. See chapter 2 in the report to learn more about net retention benchmarks. It’s hard for B2C businesses to have high net retention rates. That’s because, in B2C, churn is higher and expansion is lower. Churn is higher because of a lot of knee-jerk buying by the individual customers and expansion is lower because there are fewer upselling and cross-selling opportunities. Retention becomes more important as SaaS businesses enter the post-PMF growth phase What’s a good net retention rate, differs by the stage of business you are in. In the pre-product market fit stage of the business, net retention is usually poor. As startups grow and find product-market fit, net retention improves. Finally, as companies reach scale, and become category leaders, net retention often goes over 100%. A net retention rate of less than 100% means that your ARR decays. This means that you have less ARR today than a year ago from the same set of customers. Whereas, a net retention rate of over 100% indicates strong product market fit and showcases your ability to compound your revenue from your existing customer base. When benchmarking, always keep the stage of your business in mind. Businesses with ARR in the range of $1-3m have a top quartile net retention rate of 94%. Those in the $3-15m ARR segment, have a top quartile net retention rate of 99%. Businesses at scale with ARR in the range of $15-30m have a top quartile net retention rate of over 105%. “Not every dollar is created equal, especially in the venture world. A retained dollar is worth a lot more than a newly acquired dollar that has yet to renew.” Daria Danilina, Co-founder, Salesroom Retention in 2022 was harder than ever More than half of SaaS businesses had lower retention in 2022 compared to 2021. A challenging macroeconomic environment meant that subscribers re-assessed and cut their SaaS spend. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to 2020. Learn more in chapter 6 of the report. This trend of retention being lower in 2022 vs. 2021 is not unique to SaaS startups and scaleups. Even SaaS behemoths like Snowflake also saw their retention come down from the highs of 2021. Download the ChartMogul SaaS Retention Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings in the ChartMogul SaaS Retention Report. What is retention and why does it matter? What are some strengths & weaknesses of the net retention metric? What is a good retention rate (net, gross & customer)? What percentage of companies have customer retention over 85%? Does a higher gross retention rate mean a higher growth rate? Does a net retention rate over 100% mean you can grow organically forever? What is a good 3 and 12-month customer retention rate for new customers? What percentage of revenue added comes from expansion? And many more insights… Download the PDF now.

<sys> [INST] Retention Benchmarks and Insights From Studying Over 2,100 SaaS Businesses [/INST] Retention isn’t a silver bullet, but in SaaS, it’s the closest thing to it. Why is retention so pivotal? What does good retention look like? And does higher retention mean higher growth? We analyzed it all in our inaugural ChartMogul SaaS Retention Report. Here are the four insights that stood out in our research: Companies with best-in-class retention grow at least 1.5-3x faster than their peers B2B SaaS businesses enjoy higher net retention than B2C SaaS Retention becomes more important as SaaS businesses enter the post-PMF growth phase Retention in 2022 was harder than ever Companies with best-in-class retention grow at least 1.5-3x faster than their peers On average, SaaS businesses with a net retention rate of over 100% grow 43.6% per annum. In comparison, businesses with a net retention rate of less than 60% grow at just 13.1% per annum. See chapter 6 in the report for more on how retention impacts growth. Not just better growth, a high net retention rate can also help you build a more capital-efficient business, and even get higher valuations from investors. “We really like this metric because it encapsulates both the business’s ability to retain — so minimizing churn — and also their ability to upsell. That’s super important, not just winning new logos in B2B software, but adding additional products, expanding your platform, cross-selling, and increasing usage.” Jess Bartos, Investor, Salesforce Ventures B2B SaaS businesses enjoy higher net retention than B2C SaaS How your business operates depends on who you sell to. Companies are a lot more similar at a particular average revenue per month (ARPA) band than you’d expect, especially in terms of retention. B2C companies have a lower ARPA compared to B2B companies. The length of the sales cycle, the tenure of your contract, discounting, onboarding, the type of customer support, and even retention strategies all depend on your ARPA. Only 2.7% of SaaS businesses with an ARPA less than $10/month have net retention rates over 100%. In contrast, 41.1% of SaaS businesses with an ARPA over $500/month have net retention of over 100%. See chapter 2 in the report to learn more about net retention benchmarks. It’s hard for B2C businesses to have high net retention rates. That’s because, in B2C, churn is higher and expansion is lower. Churn is higher because of a lot of knee-jerk buying by the individual customers and expansion is lower because there are fewer upselling and cross-selling opportunities. Retention becomes more important as SaaS businesses enter the post-PMF growth phase What’s a good net retention rate, differs by the stage of business you are in. In the pre-product market fit stage of the business, net retention is usually poor. As startups grow and find product-market fit, net retention improves. Finally, as companies reach scale, and become category leaders, net retention often goes over 100%. A net retention rate of less than 100% means that your ARR decays. This means that you have less ARR today than a year ago from the same set of customers. Whereas, a net retention rate of over 100% indicates strong product market fit and showcases your ability to compound your revenue from your existing customer base. When benchmarking, always keep the stage of your business in mind. Businesses with ARR in the range of $1-3m have a top quartile net retention rate of 94%. Those in the $3-15m ARR segment, have a top quartile net retention rate of 99%. Businesses at scale with ARR in the range of $15-30m have a top quartile net retention rate of over 105%. “Not every dollar is created equal, especially in the venture world. A retained dollar is worth a lot more than a newly acquired dollar that has yet to renew.” Daria Danilina, Co-founder, Salesroom Retention in 2022 was harder than ever More than half of SaaS businesses had lower retention in 2022 compared to 2021. A challenging macroeconomic environment meant that subscribers re-assessed and cut their SaaS spend. This is in sharp contrast to 2021 which saw almost 70% of businesses having a higher retention rate in 2021 when compared to 2020. Learn more in chapter 6 of the report. This trend of retention being lower in 2022 vs. 2021 is not unique to SaaS startups and scaleups. Even SaaS behemoths like Snowflake also saw their retention come down from the highs of 2021. Download the ChartMogul SaaS Retention Report These insights only scratch the surface – there’s a lot more data and charts for you to explore! We share all our learnings in the ChartMogul SaaS Retention Report. What is retention and why does it matter? What are some strengths & weaknesses of the net retention metric? What is a good retention rate (net, gross & customer)? What percentage of companies have customer retention over 85%? Does a higher gross retention rate mean a higher growth rate? Does a net retention rate over 100% mean you can grow organically forever? What is a good 3 and 12-month customer retention rate for new customers? What percentage of revenue added comes from expansion? And many more insights… Download the PDF now. </sys

Christoph Janz on SaaS fundraising in 2018 and how startups should use data. “I think the table stakes have gone up in the sense that if in 2018 you’re not on top of these metrics, I’m less patient — there’s no excuse for not knowing this.” Christoph Janz (@chrija) is managing partner at Point Nine Capital — a venture capital firm that’s highly prevalent in the world of SaaS. After founding several internet businesses in the 90s and early 2000s, Christoph converted to a career in venture capital and made several early investments in companies such as Zendesk, FreeAgent and Geckoboard. Today, Point Nine invests in early stage companies with a focus on SaaS and marketplaces. If you’re not a regular reader, make sure you check out the team’s excellent thought leadership content! Topics covered in this episode What it takes for SaaS startups today to raise venture capital Whether you should aim to create a moat of defensibility How startups should be using data today Whether startups should aim to dominate a niche before expanding to wider market segments How Point Nine Capital is making fundraising suck less for founders Whether it’s possible for startups to shift from linear to exponential growth ChartMogul CEO Nick Franklin talking to Christoph at the Mogul I/O Berlin event. 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] Christoph Janz on SaaS fundraising in 2018 and how startups should use data [/INST]

“I think the table stakes have gone up in the sense that if in 2018 you’re not on top of these metrics, I’m less patient — there’s no excuse for not knowing this.” Christoph Janz (@chrija) is managing partner at Point Nine Capital — a venture capital firm that’s highly prevalent in the world of SaaS. After founding several internet businesses in the 90s and early 2000s, Christoph converted to a career in venture capital and made several early investments in companies such as Zendesk, FreeAgent and Geckoboard. Today, Point Nine invests in early stage companies with a focus on SaaS and marketplaces. If you’re not a regular reader, make sure you check out the team’s excellent thought leadership content! Topics covered in this episode What it takes for SaaS startups today to raise venture capital Whether you should aim to create a moat of defensibility How startups should be using data today Whether startups should aim to dominate a niche before expanding to wider market segments How Point Nine Capital is making fundraising suck less for founders Whether it’s possible for startups to shift from linear to exponential growth ChartMogul CEO Nick Franklin talking to Christoph at the Mogul I/O Berlin event. 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] Christoph Janz on SaaS fundraising in 2018 and how startups should use data [/INST] “I think the table stakes have gone up in the sense that if in 2018 you’re not on top of these metrics, I’m less patient — there’s no excuse for not knowing this.” Christoph Janz (@chrija) is managing partner at Point Nine Capital — a venture capital firm that’s highly prevalent in the world of SaaS. After founding several internet businesses in the 90s and early 2000s, Christoph converted to a career in venture capital and made several early investments in companies such as Zendesk, FreeAgent and Geckoboard. Today, Point Nine invests in early stage companies with a focus on SaaS and marketplaces. If you’re not a regular reader, make sure you check out the team’s excellent thought leadership content! Topics covered in this episode What it takes for SaaS startups today to raise venture capital Whether you should aim to create a moat of defensibility How startups should be using data today Whether startups should aim to dominate a niche before expanding to wider market segments How Point Nine Capital is making fundraising suck less for founders Whether it’s possible for startups to shift from linear to exponential growth ChartMogul CEO Nick Franklin talking to Christoph at the Mogul I/O Berlin event. 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

5 SaaStock sessions to expand your mind. Don’t forget: You can see the full schedule for the event at SaaStock.com. If you don’t have a ticket, there are still a few remaining so be fast! 1) “Building a category leading SaaS business in Europe: How we did it” A panel feat. Jos White – Partner, Notion Capital, Nikos Moraitakis – CEO, Workable, Jonathan Gale – CEO, NewVoiceMedia, David Okuniev – Co-Founder & Joint CEO, Typeform. David Okuniev This panel is my personal bet for being one of the highlights of the event — I guarantee. With a mixture of proven SaaS growth and VC thought leadership between them, these are the people you want to be learning from if you want to make it as a European SaaS. We’ve spoken to two of the participants previously on our SaaS Open Mic podcast – David Okuniev and Nikos Moraitakis: A Chat With Nikos, CEO of Workable Thinking beyond User Experience with David Okuniev, Co-founder of Typeform 2) “8 DOs and DON’Ts for SaaS Startups” Christoph Janz – Managing Partner, Point Nine Capital and Nick Franklin – CEO, ChartMogul Christoph Janz and Nick Franklin Our very own Nick Franklin will be taking the stage along with Legendary SaaS VC Christoph Janz to lift the lid on the things each of them has learned over the years building, growing and investing in SaaS. This is the session to focus your note-taking skills on, for sure. If you want to read more from Christoph Janz, check out his blog, The Angel VC. His hugely popular post 5 ways to build a $100M business is definitely worth a read (or two!). 3) “Don’t F**k up: Scaling into the US” Will Prendergast – Partner at Frontline Ventures, Nicolas Dessaigne – Co-founder & CEO at Algolia, Ray Smith – CEO & Co-Founder of Datahug.com I’m highlighting this session as it’s a highly under-appreciated — and often underestimated — topic. And why figure it out for yourself, when you can simply listen to the guys who’ve done it already? The team at Algolia especially have done an incredible job of building out a technical infrastructure that scales to fit their global vision. This is a session on the Operator stage, which means that it’s set to be a more in-depth hands-on session with the chance to get involved in the discussion. Read more: Algolia’s top 10 tips to achieve highly relevant search results 4) “Delighting your customers: How and why to go that extra mile” Janna Bastow – CEO and Co-Founder of ProdPad Janna Bastow (source: prodpad.com) The team at ProdPad are really driving a lot of the discussion and forward-thinking approach to Product Management in the B2B space. And guess who’s one of the key figures behind that? Yep, Janna is a veritable Product veteran who always manages to change the way I look at things like product roadmaps, strategy and other processes. If you want to read more from Janna, check out this great article: User Onboarding: The UX Behind Our Magically Extending Free Trial 5) “Customer Success Metrics That Matter” Krish Subramanian – Co-Founder & CEO at Chargebee, Helen Crowley – VP Global Client Services at Socialbakers, David Apple – Director of Customer Success at Typeform, Zoli Radnai – Global Director of Customer Care at Prezi David Apple We love metrics at ChartMogul. When it comes to measuring customer success, our friends at Typeform have done some excellent work on establishing best practices everything related to Net Promoter Score (NPS) and more. Add that to the fact that Chargebee have been publishing some great quality writing in recent months on the topic too. Again, this session is running on the Operator stage so you have a chance to get involved with the session in the form of a mini workshop. Our favorite read from Typeform lately: The Star Wars Guide to Net Promoter Score And from Chargebee: Minimum Viable UX: A Guide for SaaS Design

[INST] 5 SaaStock sessions to expand your mind [/INST]

Don’t forget: You can see the full schedule for the event at SaaStock.com. If you don’t have a ticket, there are still a few remaining so be fast! 1) “Building a category leading SaaS business in Europe: How we did it” A panel feat. Jos White – Partner, Notion Capital, Nikos Moraitakis – CEO, Workable, Jonathan Gale – CEO, NewVoiceMedia, David Okuniev – Co-Founder & Joint CEO, Typeform. David Okuniev This panel is my personal bet for being one of the highlights of the event — I guarantee. With a mixture of proven SaaS growth and VC thought leadership between them, these are the people you want to be learning from if you want to make it as a European SaaS. We’ve spoken to two of the participants previously on our SaaS Open Mic podcast – David Okuniev and Nikos Moraitakis: A Chat With Nikos, CEO of Workable Thinking beyond User Experience with David Okuniev, Co-founder of Typeform 2) “8 DOs and DON’Ts for SaaS Startups” Christoph Janz – Managing Partner, Point Nine Capital and Nick Franklin – CEO, ChartMogul Christoph Janz and Nick Franklin Our very own Nick Franklin will be taking the stage along with Legendary SaaS VC Christoph Janz to lift the lid on the things each of them has learned over the years building, growing and investing in SaaS. This is the session to focus your note-taking skills on, for sure. If you want to read more from Christoph Janz, check out his blog, The Angel VC. His hugely popular post 5 ways to build a $100M business is definitely worth a read (or two!). 3) “Don’t F**k up: Scaling into the US” Will Prendergast – Partner at Frontline Ventures, Nicolas Dessaigne – Co-founder & CEO at Algolia, Ray Smith – CEO & Co-Founder of Datahug.com I’m highlighting this session as it’s a highly under-appreciated — and often underestimated — topic. And why figure it out for yourself, when you can simply listen to the guys who’ve done it already? The team at Algolia especially have done an incredible job of building out a technical infrastructure that scales to fit their global vision. This is a session on the Operator stage, which means that it’s set to be a more in-depth hands-on session with the chance to get involved in the discussion. Read more: Algolia’s top 10 tips to achieve highly relevant search results 4) “Delighting your customers: How and why to go that extra mile” Janna Bastow – CEO and Co-Founder of ProdPad Janna Bastow (source: prodpad.com) The team at ProdPad are really driving a lot of the discussion and forward-thinking approach to Product Management in the B2B space. And guess who’s one of the key figures behind that? Yep, Janna is a veritable Product veteran who always manages to change the way I look at things like product roadmaps, strategy and other processes. If you want to read more from Janna, check out this great article: User Onboarding: The UX Behind Our Magically Extending Free Trial 5) “Customer Success Metrics That Matter” Krish Subramanian – Co-Founder & CEO at Chargebee, Helen Crowley – VP Global Client Services at Socialbakers, David Apple – Director of Customer Success at Typeform, Zoli Radnai – Global Director of Customer Care at Prezi David Apple We love metrics at ChartMogul. When it comes to measuring customer success, our friends at Typeform have done some excellent work on establishing best practices everything related to Net Promoter Score (NPS) and more. Add that to the fact that Chargebee have been publishing some great quality writing in recent months on the topic too. Again, this session is running on the Operator stage so you have a chance to get involved with the session in the form of a mini workshop. Our favorite read from Typeform lately: The Star Wars Guide to Net Promoter Score And from Chargebee: Minimum Viable UX: A Guide for SaaS Design

<sys> [INST] 5 SaaStock sessions to expand your mind [/INST] Don’t forget: You can see the full schedule for the event at SaaStock.com. If you don’t have a ticket, there are still a few remaining so be fast! 1) “Building a category leading SaaS business in Europe: How we did it” A panel feat. Jos White – Partner, Notion Capital, Nikos Moraitakis – CEO, Workable, Jonathan Gale – CEO, NewVoiceMedia, David Okuniev – Co-Founder & Joint CEO, Typeform. David Okuniev This panel is my personal bet for being one of the highlights of the event — I guarantee. With a mixture of proven SaaS growth and VC thought leadership between them, these are the people you want to be learning from if you want to make it as a European SaaS. We’ve spoken to two of the participants previously on our SaaS Open Mic podcast – David Okuniev and Nikos Moraitakis: A Chat With Nikos, CEO of Workable Thinking beyond User Experience with David Okuniev, Co-founder of Typeform 2) “8 DOs and DON’Ts for SaaS Startups” Christoph Janz – Managing Partner, Point Nine Capital and Nick Franklin – CEO, ChartMogul Christoph Janz and Nick Franklin Our very own Nick Franklin will be taking the stage along with Legendary SaaS VC Christoph Janz to lift the lid on the things each of them has learned over the years building, growing and investing in SaaS. This is the session to focus your note-taking skills on, for sure. If you want to read more from Christoph Janz, check out his blog, The Angel VC. His hugely popular post 5 ways to build a $100M business is definitely worth a read (or two!). 3) “Don’t F**k up: Scaling into the US” Will Prendergast – Partner at Frontline Ventures, Nicolas Dessaigne – Co-founder & CEO at Algolia, Ray Smith – CEO & Co-Founder of Datahug.com I’m highlighting this session as it’s a highly under-appreciated — and often underestimated — topic. And why figure it out for yourself, when you can simply listen to the guys who’ve done it already? The team at Algolia especially have done an incredible job of building out a technical infrastructure that scales to fit their global vision. This is a session on the Operator stage, which means that it’s set to be a more in-depth hands-on session with the chance to get involved in the discussion. Read more: Algolia’s top 10 tips to achieve highly relevant search results 4) “Delighting your customers: How and why to go that extra mile” Janna Bastow – CEO and Co-Founder of ProdPad Janna Bastow (source: prodpad.com) The team at ProdPad are really driving a lot of the discussion and forward-thinking approach to Product Management in the B2B space. And guess who’s one of the key figures behind that? Yep, Janna is a veritable Product veteran who always manages to change the way I look at things like product roadmaps, strategy and other processes. If you want to read more from Janna, check out this great article: User Onboarding: The UX Behind Our Magically Extending Free Trial 5) “Customer Success Metrics That Matter” Krish Subramanian – Co-Founder & CEO at Chargebee, Helen Crowley – VP Global Client Services at Socialbakers, David Apple – Director of Customer Success at Typeform, Zoli Radnai – Global Director of Customer Care at Prezi David Apple We love metrics at ChartMogul. When it comes to measuring customer success, our friends at Typeform have done some excellent work on establishing best practices everything related to Net Promoter Score (NPS) and more. Add that to the fact that Chargebee have been publishing some great quality writing in recent months on the topic too. Again, this session is running on the Operator stage so you have a chance to get involved with the session in the form of a mini workshop. Our favorite read from Typeform lately: The Star Wars Guide to Net Promoter Score And from Chargebee: Minimum Viable UX: A Guide for SaaS Design </sys

ChartMogul ❤️ QuickBooks & Xero. Ever since we launched ChartMogul, customers have asked us to build an integration with cloud accounting platforms QuickBooks Online and Xero. Given how these two systems structure and store billing data, it just wasn’t possible to build the same type of single-click integration our customers have come to expect and love from us. Enter SaaSync, ChartMogul’s premier, US-based integration partner. Led by former FullContact co-founder Travis Todd, SaaSync provides a mix of software and professional services related to ChartMogul and subscription billing platforms. Travis and his team got to work last year and built a new SaaS app that acts as an integration layer between QuickBooks, Xero, and ChartMogul. We’re excited to finally bring ChartMogul’s industry-leading subscription analytics to companies using QuickBooks and Xero. How SaaSync works SaaSync starts by retrieving billing data from QuickBooks Online or Xero, such as invoices, credit notes, sales receipts, and payments. From there, it transforms the data for use with ChartMogul’s subscription data model. The SaaSync dashboard SaaSync can automatically transform and sync most data between Quickbooks Online or Xero and ChartMogul. Using an additional review system, SaaSync users enter missing or incomplete data before syncing the remaining transactions to ChartMogul. About SaaSync SaaSync, a close ChartMogul partner, is based in Wyoming and Colorado. Their software ranges from complex custom integrations (Zuora, InfusionSoft, etc.) down to self-service integrations such as QuickBooks and Xero. They also provide custom implementation and consulting services to some of ChartMogul’s largest and most complex clients. How to get started You’ll need to be an admin in ChartMogul (sign up for a free trial if you don’t yet have a ChartMogul account). The SaaSync team has put together a video that shows you how to connect your QuickBooks/Xero account with ChartMogul and start syncing your data: All your data in one place Allowing our customers to bring in data from QuickBooks and Xero brings a step closer to our vision of making ChartMogul the central piece in the data stack of every subscription company. Curious to see how that works for you? Start a free trial of ChartMogul and SaaSync and connect your accounting platform.

[INST] ChartMogul ❤️ QuickBooks & Xero [/INST]

Ever since we launched ChartMogul, customers have asked us to build an integration with cloud accounting platforms QuickBooks Online and Xero. Given how these two systems structure and store billing data, it just wasn’t possible to build the same type of single-click integration our customers have come to expect and love from us. Enter SaaSync, ChartMogul’s premier, US-based integration partner. Led by former FullContact co-founder Travis Todd, SaaSync provides a mix of software and professional services related to ChartMogul and subscription billing platforms. Travis and his team got to work last year and built a new SaaS app that acts as an integration layer between QuickBooks, Xero, and ChartMogul. We’re excited to finally bring ChartMogul’s industry-leading subscription analytics to companies using QuickBooks and Xero. How SaaSync works SaaSync starts by retrieving billing data from QuickBooks Online or Xero, such as invoices, credit notes, sales receipts, and payments. From there, it transforms the data for use with ChartMogul’s subscription data model. The SaaSync dashboard SaaSync can automatically transform and sync most data between Quickbooks Online or Xero and ChartMogul. Using an additional review system, SaaSync users enter missing or incomplete data before syncing the remaining transactions to ChartMogul. About SaaSync SaaSync, a close ChartMogul partner, is based in Wyoming and Colorado. Their software ranges from complex custom integrations (Zuora, InfusionSoft, etc.) down to self-service integrations such as QuickBooks and Xero. They also provide custom implementation and consulting services to some of ChartMogul’s largest and most complex clients. How to get started You’ll need to be an admin in ChartMogul (sign up for a free trial if you don’t yet have a ChartMogul account). The SaaSync team has put together a video that shows you how to connect your QuickBooks/Xero account with ChartMogul and start syncing your data: All your data in one place Allowing our customers to bring in data from QuickBooks and Xero brings a step closer to our vision of making ChartMogul the central piece in the data stack of every subscription company. Curious to see how that works for you? Start a free trial of ChartMogul and SaaSync and connect your accounting platform.

<sys> [INST] ChartMogul ❤️ QuickBooks & Xero [/INST] Ever since we launched ChartMogul, customers have asked us to build an integration with cloud accounting platforms QuickBooks Online and Xero. Given how these two systems structure and store billing data, it just wasn’t possible to build the same type of single-click integration our customers have come to expect and love from us. Enter SaaSync, ChartMogul’s premier, US-based integration partner. Led by former FullContact co-founder Travis Todd, SaaSync provides a mix of software and professional services related to ChartMogul and subscription billing platforms. Travis and his team got to work last year and built a new SaaS app that acts as an integration layer between QuickBooks, Xero, and ChartMogul. We’re excited to finally bring ChartMogul’s industry-leading subscription analytics to companies using QuickBooks and Xero. How SaaSync works SaaSync starts by retrieving billing data from QuickBooks Online or Xero, such as invoices, credit notes, sales receipts, and payments. From there, it transforms the data for use with ChartMogul’s subscription data model. The SaaSync dashboard SaaSync can automatically transform and sync most data between Quickbooks Online or Xero and ChartMogul. Using an additional review system, SaaSync users enter missing or incomplete data before syncing the remaining transactions to ChartMogul. About SaaSync SaaSync, a close ChartMogul partner, is based in Wyoming and Colorado. Their software ranges from complex custom integrations (Zuora, InfusionSoft, etc.) down to self-service integrations such as QuickBooks and Xero. They also provide custom implementation and consulting services to some of ChartMogul’s largest and most complex clients. How to get started You’ll need to be an admin in ChartMogul (sign up for a free trial if you don’t yet have a ChartMogul account). The SaaSync team has put together a video that shows you how to connect your QuickBooks/Xero account with ChartMogul and start syncing your data: All your data in one place Allowing our customers to bring in data from QuickBooks and Xero brings a step closer to our vision of making ChartMogul the central piece in the data stack of every subscription company. Curious to see how that works for you? Start a free trial of ChartMogul and SaaSync and connect your accounting platform. </sys

Growbots CEO: Metrics for Sales Emails & Cold Mailing. This week we have a guest post from Greg Pietruszynski, CEO & co-founder at Growbots – A. I. for Sales. Greg Founded 3 companies in China & Europe before Growbots, and is responsible for more than 200 web and mobile apps. He’s also an automation freak & growth geek. Follow Greg on Twitter or check out the Growbots blog for more great sales-focused resources. Let’s start with the statement that response rate is the only metric that matters. Open rate is a vanity metric. Why? Because cold email campaigns have a set of different rules to marketing email campaigns. In marketing email, you can’t send a follow-up; a response isn’t what is required. Open rate is definitely worth watching, as it allows scope for improvements in subjects and time of sending, but it’s not the most important thing. Every time the Growbots team achieves a poor open rate (less than 40%), we wait two days, and then send a follow-up. Do you know why? Because follow-ups in sales emails receive between 20% and 30% higher open rates. Response rate and conversion from demo to deal are the numbers you should outperform. So the right question to ask now is “how do we achieve high response rates?” There’s a sort of recipe for that, but before describing it, let me introduce you to AQC metrics. As the Close.io team explains (http://blog.close.io/which-sales-metrics), AQC is a simple and easy way to control metrics. Behind this acronym stand Activity, Quality and Conversion. These three things will help you to track your performance and identify bottlenecks, and point you in the right direction. Here’s an example of a cold email campaign: Action: How many cold emails did you send? Quality: How many emails reached their destination (deliverability) and were opened? Conversion: How many responses did you get? It’s probably the simplest spreadsheet you can get. So how do we achieve high response rates? I’ve prepared a step-by-step guide for you: 1. Subject This is always the tricky part. Write it as last, so it matches the body. Keep it short and avoid capital letters (it’s not a discount from your favourite shop). Maintain a conversational style in your message – do you write to your colleagues with subjects in capital letters? I bet you don’t. Try not to personalize, because nowadays this is the domain of spammers and Google could treat you like one. Also, if you think about it, you’ll realise that a lot of cold emails include this name + company personalization scheme. It’s a kind of red flag. Nevertheless, it’s worth testing this: “Hey <name>”. It may work. In one of our campaigns, we tested a subject with a company name in it and the exact same subject without a company name. What we got was 38% OR in the campaign with the company name, and 16% OR in campaign without the company name. Easy choice in that particular case! Don’t cheat – that’s why I’m suggesting coming up with the subject at the end. As soon as recipients discover that the subject was a mock-up and doesn’t relate to the content of the email, they’ll not only lose interest, but also will be annoyed, and that’s a short track to the “mark as spam” button. But there’s one thing you should test: “Quick question/feedback”. Such a subject very often has a high open rate and is vague enough to match your email’s content. What do you measure in subjects? Open rate. Subject and preview have the biggest impact on open rates. 2. Perfect Timing In marketing emails, you basically pick few slots and test which performs the best. In sales emails, the trick is to observe behaviour and make assumptions for your targets. I don’t want to create any rules, because it’s really a very specific field, and the best thing you can do is to test it yourself. Generally speaking, what we’ve observed is as follows: Emails sent in the morning (7 a.m.–9 a.m. local time) perform very well. Sending emails during lunch, as well as slightly before and after, it is a waste of time. People tend to tidy up loose ends before going home, so they check their inboxes before leaving work. So if your email has a CTA which prospects could perform in less than five minutes, there’s a chance they will do this on the spot. For that, you should try sending a message in the late afternoon: 6 p.m.–8 p.m. When approaching C-level, it’s a good idea to try something non-standard, such as emailing them on Sunday! It may work in the case of higher positions, because they often unload their inboxes ready for Monday morning. What to measure in timing? Time, obviously: a 24-hour performance graph will be useful here. Most tools provide such a feature. A 24-hour performance graph from MailChimp. 3. Content + Structure Once more, response rate is something you should focus on. It tells you how attractive your copy was and how convincing your CTA was. After that, it’s time to compare this metric with response rate and identify the effectiveness of your flow. When it comes to the content and structure of an email, personalization of the first sentence is a smart move. Preview is the reason you should focus on the first sentence. This is especially when you are addressing a problem they are experiencing on a particular job position. Another useful hack is mentioning a few of their customers or mutual friends and telling them what they love about your product. Such “social proof” increases CTR. What’s really a bad idea is writing who you are: “Hi, I’m Greg from Growbots”. Just don’t. What do you measure? Response rate. CTA has a strong influence on it, but keep in mind that benefits and social proof are your leverage. Convince people that it’s worth investing their time. 4. Follow-ups Here’s the big news: you have to send 7–8 follow-ups to be completely sure the prospect is not interested. Unless you send 7–8 follow-ups, you simply will not get your full potential response rate. If you want to get as many responses as possible, you should be persistent. Until no one will tell you to stop contact them you are good to go. Additionally, try to change an email subject 2–3 times: each time you make a change gives you an extra chance of getting someone interested. After sending four emails , the chance of getting a response in the same thread is almost zero. So, as I mentioned before, follow-ups in sales emails receive up to 30% higher open rates than first emails. But follow-up metrics don’t differ that much from the first email. Open rate is important if you send a follow-up in a new thread. Still, click-through rate could be difficult to control, because part of the follow-ups don’t include a link. So, in the case of follow-ups, the number of sent messages is something you should probably pay attention to. Finally, I would like to give you a mini case study. At Growbots, we’ve generated a 75% response rate after the first email. Twitter helped. So how did we generate a 75% response rate after the first email using Twitter + email? This technique is based on the idea of warming up your leads before emailing them. We started with Twitter. Make a secret list of your ideal customers and track their tweets. Retweet and comment – try to create interaction. The main purpose of this task is to create a foothold which you can mention later in your email. So, when you’re ready, write an email, but this can’t be a poor email built using your standard pitch template. This is the email which served us well for a very long time and brought awesome results: I’m Greg (@pietruszynski) from Growbots. We have been tweeting about the article you shared: ‘The power of personalization’. I did some research and saw that you may be responsible for lead generation at XYZ, so I decided to get in touch. At Growbots, we’ve automated lead generation, email communication and CRM integration. Lead generation is the biggest growth challenge for 60% of companies, and you are in charge of it, so I thought we might exchange some war stories on the topic? Growbots software will automatically find great-fit companies, contact the right decision-makers and generate warm leads for your sales team. We have the best matching algorithm on the market – 15 lead-qualification criteria and the lowest email bounce rate (less than 1%). Would you be up for doing a quick brainstorm about your lead generation methods? A 15-minute call should be enough. This email represents the attitude. In the first paragraph we refer to an article shared on Twitter (that’s why it’s important to engage there for real). In the second paragraph we underline the connection (shared niche or market, or even an event you both attended or a group on LinkedIn you both belong to), and in the last paragraph we give a benefit, a social proof and a clear CTA. Thanks to engagement on Twitter and later presenting it in the first few lines of a message, we’ve experienced 75% response rate to the first outbound email. To wrap this up: response rate is the most important metric you encounter in cold-email campaigns. Use AQC metrics to keep things simple. Focus on things you can keep under control (subject, content and timing) to outperform response rate. Remember about perfect targeting, and start scaling when you find the sweet spot. Measure and improve! About Greg Pietruszynski: CEO & co-founder at Growbots – A. I. for Sales. Founded 3 companies in China & Europe before Growbots. Responsible for more than 200 web and mobile apps. automation freak & growth geek.

[INST] Growbots CEO: Metrics for Sales Emails & Cold Mailing [/INST]

This week we have a guest post from Greg Pietruszynski, CEO & co-founder at Growbots – A. I. for Sales. Greg Founded 3 companies in China & Europe before Growbots, and is responsible for more than 200 web and mobile apps. He’s also an automation freak & growth geek. Follow Greg on Twitter or check out the Growbots blog for more great sales-focused resources. Let’s start with the statement that response rate is the only metric that matters. Open rate is a vanity metric. Why? Because cold email campaigns have a set of different rules to marketing email campaigns. In marketing email, you can’t send a follow-up; a response isn’t what is required. Open rate is definitely worth watching, as it allows scope for improvements in subjects and time of sending, but it’s not the most important thing. Every time the Growbots team achieves a poor open rate (less than 40%), we wait two days, and then send a follow-up. Do you know why? Because follow-ups in sales emails receive between 20% and 30% higher open rates. Response rate and conversion from demo to deal are the numbers you should outperform. So the right question to ask now is “how do we achieve high response rates?” There’s a sort of recipe for that, but before describing it, let me introduce you to AQC metrics. As the Close.io team explains (http://blog.close.io/which-sales-metrics), AQC is a simple and easy way to control metrics. Behind this acronym stand Activity, Quality and Conversion. These three things will help you to track your performance and identify bottlenecks, and point you in the right direction. Here’s an example of a cold email campaign: Action: How many cold emails did you send? Quality: How many emails reached their destination (deliverability) and were opened? Conversion: How many responses did you get? It’s probably the simplest spreadsheet you can get. So how do we achieve high response rates? I’ve prepared a step-by-step guide for you: 1. Subject This is always the tricky part. Write it as last, so it matches the body. Keep it short and avoid capital letters (it’s not a discount from your favourite shop). Maintain a conversational style in your message – do you write to your colleagues with subjects in capital letters? I bet you don’t. Try not to personalize, because nowadays this is the domain of spammers and Google could treat you like one. Also, if you think about it, you’ll realise that a lot of cold emails include this name + company personalization scheme. It’s a kind of red flag. Nevertheless, it’s worth testing this: “Hey <name>”. It may work. In one of our campaigns, we tested a subject with a company name in it and the exact same subject without a company name. What we got was 38% OR in the campaign with the company name, and 16% OR in campaign without the company name. Easy choice in that particular case! Don’t cheat – that’s why I’m suggesting coming up with the subject at the end. As soon as recipients discover that the subject was a mock-up and doesn’t relate to the content of the email, they’ll not only lose interest, but also will be annoyed, and that’s a short track to the “mark as spam” button. But there’s one thing you should test: “Quick question/feedback”. Such a subject very often has a high open rate and is vague enough to match your email’s content. What do you measure in subjects? Open rate. Subject and preview have the biggest impact on open rates. 2. Perfect Timing In marketing emails, you basically pick few slots and test which performs the best. In sales emails, the trick is to observe behaviour and make assumptions for your targets. I don’t want to create any rules, because it’s really a very specific field, and the best thing you can do is to test it yourself. Generally speaking, what we’ve observed is as follows: Emails sent in the morning (7 a.m.–9 a.m. local time) perform very well. Sending emails during lunch, as well as slightly before and after, it is a waste of time. People tend to tidy up loose ends before going home, so they check their inboxes before leaving work. So if your email has a CTA which prospects could perform in less than five minutes, there’s a chance they will do this on the spot. For that, you should try sending a message in the late afternoon: 6 p.m.–8 p.m. When approaching C-level, it’s a good idea to try something non-standard, such as emailing them on Sunday! It may work in the case of higher positions, because they often unload their inboxes ready for Monday morning. What to measure in timing? Time, obviously: a 24-hour performance graph will be useful here. Most tools provide such a feature. A 24-hour performance graph from MailChimp. 3. Content + Structure Once more, response rate is something you should focus on. It tells you how attractive your copy was and how convincing your CTA was. After that, it’s time to compare this metric with response rate and identify the effectiveness of your flow. When it comes to the content and structure of an email, personalization of the first sentence is a smart move. Preview is the reason you should focus on the first sentence. This is especially when you are addressing a problem they are experiencing on a particular job position. Another useful hack is mentioning a few of their customers or mutual friends and telling them what they love about your product. Such “social proof” increases CTR. What’s really a bad idea is writing who you are: “Hi, I’m Greg from Growbots”. Just don’t. What do you measure? Response rate. CTA has a strong influence on it, but keep in mind that benefits and social proof are your leverage. Convince people that it’s worth investing their time. 4. Follow-ups Here’s the big news: you have to send 7–8 follow-ups to be completely sure the prospect is not interested. Unless you send 7–8 follow-ups, you simply will not get your full potential response rate. If you want to get as many responses as possible, you should be persistent. Until no one will tell you to stop contact them you are good to go. Additionally, try to change an email subject 2–3 times: each time you make a change gives you an extra chance of getting someone interested. After sending four emails , the chance of getting a response in the same thread is almost zero. So, as I mentioned before, follow-ups in sales emails receive up to 30% higher open rates than first emails. But follow-up metrics don’t differ that much from the first email. Open rate is important if you send a follow-up in a new thread. Still, click-through rate could be difficult to control, because part of the follow-ups don’t include a link. So, in the case of follow-ups, the number of sent messages is something you should probably pay attention to. Finally, I would like to give you a mini case study. At Growbots, we’ve generated a 75% response rate after the first email. Twitter helped. So how did we generate a 75% response rate after the first email using Twitter + email? This technique is based on the idea of warming up your leads before emailing them. We started with Twitter. Make a secret list of your ideal customers and track their tweets. Retweet and comment – try to create interaction. The main purpose of this task is to create a foothold which you can mention later in your email. So, when you’re ready, write an email, but this can’t be a poor email built using your standard pitch template. This is the email which served us well for a very long time and brought awesome results: I’m Greg (@pietruszynski) from Growbots. We have been tweeting about the article you shared: ‘The power of personalization’. I did some research and saw that you may be responsible for lead generation at XYZ, so I decided to get in touch. At Growbots, we’ve automated lead generation, email communication and CRM integration. Lead generation is the biggest growth challenge for 60% of companies, and you are in charge of it, so I thought we might exchange some war stories on the topic? Growbots software will automatically find great-fit companies, contact the right decision-makers and generate warm leads for your sales team. We have the best matching algorithm on the market – 15 lead-qualification criteria and the lowest email bounce rate (less than 1%). Would you be up for doing a quick brainstorm about your lead generation methods? A 15-minute call should be enough. This email represents the attitude. In the first paragraph we refer to an article shared on Twitter (that’s why it’s important to engage there for real). In the second paragraph we underline the connection (shared niche or market, or even an event you both attended or a group on LinkedIn you both belong to), and in the last paragraph we give a benefit, a social proof and a clear CTA. Thanks to engagement on Twitter and later presenting it in the first few lines of a message, we’ve experienced 75% response rate to the first outbound email. To wrap this up: response rate is the most important metric you encounter in cold-email campaigns. Use AQC metrics to keep things simple. Focus on things you can keep under control (subject, content and timing) to outperform response rate. Remember about perfect targeting, and start scaling when you find the sweet spot. Measure and improve! About Greg Pietruszynski: CEO & co-founder at Growbots – A. I. for Sales. Founded 3 companies in China & Europe before Growbots. Responsible for more than 200 web and mobile apps. automation freak & growth geek.

<sys> [INST] Growbots CEO: Metrics for Sales Emails & Cold Mailing [/INST] This week we have a guest post from Greg Pietruszynski, CEO & co-founder at Growbots – A. I. for Sales. Greg Founded 3 companies in China & Europe before Growbots, and is responsible for more than 200 web and mobile apps. He’s also an automation freak & growth geek. Follow Greg on Twitter or check out the Growbots blog for more great sales-focused resources. Let’s start with the statement that response rate is the only metric that matters. Open rate is a vanity metric. Why? Because cold email campaigns have a set of different rules to marketing email campaigns. In marketing email, you can’t send a follow-up; a response isn’t what is required. Open rate is definitely worth watching, as it allows scope for improvements in subjects and time of sending, but it’s not the most important thing. Every time the Growbots team achieves a poor open rate (less than 40%), we wait two days, and then send a follow-up. Do you know why? Because follow-ups in sales emails receive between 20% and 30% higher open rates. Response rate and conversion from demo to deal are the numbers you should outperform. So the right question to ask now is “how do we achieve high response rates?” There’s a sort of recipe for that, but before describing it, let me introduce you to AQC metrics. As the Close.io team explains (http://blog.close.io/which-sales-metrics), AQC is a simple and easy way to control metrics. Behind this acronym stand Activity, Quality and Conversion. These three things will help you to track your performance and identify bottlenecks, and point you in the right direction. Here’s an example of a cold email campaign: Action: How many cold emails did you send? Quality: How many emails reached their destination (deliverability) and were opened? Conversion: How many responses did you get? It’s probably the simplest spreadsheet you can get. So how do we achieve high response rates? I’ve prepared a step-by-step guide for you: 1. Subject This is always the tricky part. Write it as last, so it matches the body. Keep it short and avoid capital letters (it’s not a discount from your favourite shop). Maintain a conversational style in your message – do you write to your colleagues with subjects in capital letters? I bet you don’t. Try not to personalize, because nowadays this is the domain of spammers and Google could treat you like one. Also, if you think about it, you’ll realise that a lot of cold emails include this name + company personalization scheme. It’s a kind of red flag. Nevertheless, it’s worth testing this: “Hey <name>”. It may work. In one of our campaigns, we tested a subject with a company name in it and the exact same subject without a company name. What we got was 38% OR in the campaign with the company name, and 16% OR in campaign without the company name. Easy choice in that particular case! Don’t cheat – that’s why I’m suggesting coming up with the subject at the end. As soon as recipients discover that the subject was a mock-up and doesn’t relate to the content of the email, they’ll not only lose interest, but also will be annoyed, and that’s a short track to the “mark as spam” button. But there’s one thing you should test: “Quick question/feedback”. Such a subject very often has a high open rate and is vague enough to match your email’s content. What do you measure in subjects? Open rate. Subject and preview have the biggest impact on open rates. 2. Perfect Timing In marketing emails, you basically pick few slots and test which performs the best. In sales emails, the trick is to observe behaviour and make assumptions for your targets. I don’t want to create any rules, because it’s really a very specific field, and the best thing you can do is to test it yourself. Generally speaking, what we’ve observed is as follows: Emails sent in the morning (7 a.m.–9 a.m. local time) perform very well. Sending emails during lunch, as well as slightly before and after, it is a waste of time. People tend to tidy up loose ends before going home, so they check their inboxes before leaving work. So if your email has a CTA which prospects could perform in less than five minutes, there’s a chance they will do this on the spot. For that, you should try sending a message in the late afternoon: 6 p.m.–8 p.m. When approaching C-level, it’s a good idea to try something non-standard, such as emailing them on Sunday! It may work in the case of higher positions, because they often unload their inboxes ready for Monday morning. What to measure in timing? Time, obviously: a 24-hour performance graph will be useful here. Most tools provide such a feature. A 24-hour performance graph from MailChimp. 3. Content + Structure Once more, response rate is something you should focus on. It tells you how attractive your copy was and how convincing your CTA was. After that, it’s time to compare this metric with response rate and identify the effectiveness of your flow. When it comes to the content and structure of an email, personalization of the first sentence is a smart move. Preview is the reason you should focus on the first sentence. This is especially when you are addressing a problem they are experiencing on a particular job position. Another useful hack is mentioning a few of their customers or mutual friends and telling them what they love about your product. Such “social proof” increases CTR. What’s really a bad idea is writing who you are: “Hi, I’m Greg from Growbots”. Just don’t. What do you measure? Response rate. CTA has a strong influence on it, but keep in mind that benefits and social proof are your leverage. Convince people that it’s worth investing their time. 4. Follow-ups Here’s the big news: you have to send 7–8 follow-ups to be completely sure the prospect is not interested. Unless you send 7–8 follow-ups, you simply will not get your full potential response rate. If you want to get as many responses as possible, you should be persistent. Until no one will tell you to stop contact them you are good to go. Additionally, try to change an email subject 2–3 times: each time you make a change gives you an extra chance of getting someone interested. After sending four emails , the chance of getting a response in the same thread is almost zero. So, as I mentioned before, follow-ups in sales emails receive up to 30% higher open rates than first emails. But follow-up metrics don’t differ that much from the first email. Open rate is important if you send a follow-up in a new thread. Still, click-through rate could be difficult to control, because part of the follow-ups don’t include a link. So, in the case of follow-ups, the number of sent messages is something you should probably pay attention to. Finally, I would like to give you a mini case study. At Growbots, we’ve generated a 75% response rate after the first email. Twitter helped. So how did we generate a 75% response rate after the first email using Twitter + email? This technique is based on the idea of warming up your leads before emailing them. We started with Twitter. Make a secret list of your ideal customers and track their tweets. Retweet and comment – try to create interaction. The main purpose of this task is to create a foothold which you can mention later in your email. So, when you’re ready, write an email, but this can’t be a poor email built using your standard pitch template. This is the email which served us well for a very long time and brought awesome results: I’m Greg (@pietruszynski) from Growbots. We have been tweeting about the article you shared: ‘The power of personalization’. I did some research and saw that you may be responsible for lead generation at XYZ, so I decided to get in touch. At Growbots, we’ve automated lead generation, email communication and CRM integration. Lead generation is the biggest growth challenge for 60% of companies, and you are in charge of it, so I thought we might exchange some war stories on the topic? Growbots software will automatically find great-fit companies, contact the right decision-makers and generate warm leads for your sales team. We have the best matching algorithm on the market – 15 lead-qualification criteria and the lowest email bounce rate (less than 1%). Would you be up for doing a quick brainstorm about your lead generation methods? A 15-minute call should be enough. This email represents the attitude. In the first paragraph we refer to an article shared on Twitter (that’s why it’s important to engage there for real). In the second paragraph we underline the connection (shared niche or market, or even an event you both attended or a group on LinkedIn you both belong to), and in the last paragraph we give a benefit, a social proof and a clear CTA. Thanks to engagement on Twitter and later presenting it in the first few lines of a message, we’ve experienced 75% response rate to the first outbound email. To wrap this up: response rate is the most important metric you encounter in cold-email campaigns. Use AQC metrics to keep things simple. Focus on things you can keep under control (subject, content and timing) to outperform response rate. Remember about perfect targeting, and start scaling when you find the sweet spot. Measure and improve! About Greg Pietruszynski: CEO & co-founder at Growbots – A. I. for Sales. Founded 3 companies in China & Europe before Growbots. Responsible for more than 200 web and mobile apps. automation freak & growth geek. </sys

Announcing our Seed Investors. You can read more about the announcement on TechCrunch and Christoph Janz’s blog. The investment amount is $600,000 which will help us double down on our mission of building the best analytics platform on earth for subscription companies. It also brings on board some really awesome people as investors. Point Nine Capital (led by Christoph Janz and Pawel Chudzinski) are one of the leading SaaS investors out there and we’re very honoured to be joining their family of companies. Christoph, who was an angel investor in Zendesk is insanely knowledgable about SaaS metrics and the author of the highly popular KPI dashboard for early stage SaaS. You could describe part of what we’re doing at ChartMogul as ‘productising’ Christoph’s spreadsheet so it’s fantastic to have him and the whole Point Nine team on board. “Having invested in more than 20 SaaS companies and seen many, many more, I know that ChartMogul is solving a big problem which almost all SaaS companies suffer from – getting accurate SaaS metrics.” – Christoph Janz Also invested are Michael Hansen and Tom James. Michael is a seed investor and employee #1 at Zendesk and played a huge role in their success. Michael also hired me into Zendesk back in 2009, I knew almost nothing about business software but he gave me a chance and we ended up working closely together for over 5 years – you can read more about Michael (and Christoph) in Mikkel Svane’s new book Startupland. Tom James founded his first startup in his early 20’s, IntecTelecom (ITL) which later listed on the LSE, since then he has invested in numerous early stage businesses including; Zendesk, Onelogin, Lapio, Kloudless, Holidog, SolanoLabs, Umantis and Ca7ch. What this means for our customers is simply that we’ll continue working hard on building and improving our product and service, but this improvement will start happening at a faster pace as we grow our team (did I mention we’re hiring?).

[INST] Announcing our Seed Investors [/INST]

You can read more about the announcement on TechCrunch and Christoph Janz’s blog. The investment amount is $600,000 which will help us double down on our mission of building the best analytics platform on earth for subscription companies. It also brings on board some really awesome people as investors. Point Nine Capital (led by Christoph Janz and Pawel Chudzinski) are one of the leading SaaS investors out there and we’re very honoured to be joining their family of companies. Christoph, who was an angel investor in Zendesk is insanely knowledgable about SaaS metrics and the author of the highly popular KPI dashboard for early stage SaaS. You could describe part of what we’re doing at ChartMogul as ‘productising’ Christoph’s spreadsheet so it’s fantastic to have him and the whole Point Nine team on board. “Having invested in more than 20 SaaS companies and seen many, many more, I know that ChartMogul is solving a big problem which almost all SaaS companies suffer from – getting accurate SaaS metrics.” – Christoph Janz Also invested are Michael Hansen and Tom James. Michael is a seed investor and employee #1 at Zendesk and played a huge role in their success. Michael also hired me into Zendesk back in 2009, I knew almost nothing about business software but he gave me a chance and we ended up working closely together for over 5 years – you can read more about Michael (and Christoph) in Mikkel Svane’s new book Startupland. Tom James founded his first startup in his early 20’s, IntecTelecom (ITL) which later listed on the LSE, since then he has invested in numerous early stage businesses including; Zendesk, Onelogin, Lapio, Kloudless, Holidog, SolanoLabs, Umantis and Ca7ch. What this means for our customers is simply that we’ll continue working hard on building and improving our product and service, but this improvement will start happening at a faster pace as we grow our team (did I mention we’re hiring?).

<sys> [INST] Announcing our Seed Investors [/INST] You can read more about the announcement on TechCrunch and Christoph Janz’s blog. The investment amount is $600,000 which will help us double down on our mission of building the best analytics platform on earth for subscription companies. It also brings on board some really awesome people as investors. Point Nine Capital (led by Christoph Janz and Pawel Chudzinski) are one of the leading SaaS investors out there and we’re very honoured to be joining their family of companies. Christoph, who was an angel investor in Zendesk is insanely knowledgable about SaaS metrics and the author of the highly popular KPI dashboard for early stage SaaS. You could describe part of what we’re doing at ChartMogul as ‘productising’ Christoph’s spreadsheet so it’s fantastic to have him and the whole Point Nine team on board. “Having invested in more than 20 SaaS companies and seen many, many more, I know that ChartMogul is solving a big problem which almost all SaaS companies suffer from – getting accurate SaaS metrics.” – Christoph Janz Also invested are Michael Hansen and Tom James. Michael is a seed investor and employee #1 at Zendesk and played a huge role in their success. Michael also hired me into Zendesk back in 2009, I knew almost nothing about business software but he gave me a chance and we ended up working closely together for over 5 years – you can read more about Michael (and Christoph) in Mikkel Svane’s new book Startupland. Tom James founded his first startup in his early 20’s, IntecTelecom (ITL) which later listed on the LSE, since then he has invested in numerous early stage businesses including; Zendesk, Onelogin, Lapio, Kloudless, Holidog, SolanoLabs, Umantis and Ca7ch. What this means for our customers is simply that we’ll continue working hard on building and improving our product and service, but this improvement will start happening at a faster pace as we grow our team (did I mention we’re hiring?). </sys

A Guide to SaaS Customer Onboarding [Updated for 2020]. Think back to the last time you tried to add a new habit to your life. Perhaps you thought “this is finally my year to learn a new language.” You downloaded an app, felt the thrill of practicing for 5 days in a row, and then…life happened. One day you had to stay late at work, so your evening was rushed, and you fell into bed without practicing. Then you tried that new show everyone is talking about and watched the whole season in one weekend. After a while, your motivation fades and the excuses become more prevalent. If you relate to any part of that scenario, chances are you’re a human. We’ve all tried building new habits, to varying degrees of success. It’s no easy feat. The thing is, learning and incorporating a SaaS app into a workflow is no different than learning a language, hitting the gym, or sticking to morning meditation. When a person signs up for a SaaS free trial, they’re faced with building the habit of using that product consistently. We know that building habits is hard, so your job as a SaaS company is to support a new user as much as possible during those initial weeks. This is where customer onboarding comes into play. Let’s explore. What is customer onboarding? First up, what does “customer onboarding” mean? Customer onboarding, or SaaS onboarding, is the process of helping new users get started and stay engaged. It’s a series of steps and resources that help make incorporating a SaaS product into the user’s routine as easy as possible. Onboarding isn’t just about teaching new users which buttons to click to use your app, though. The best customer onboarding strategy considers true customer goals. That is, what is it that users want to achieve, and what does “success” mean to them? People care more about outcomes than features, and it’s your job to help them reach those outcomes as easily and predictably as possible. Tweet this quote Onboarding is made easy when it: Offers users a roadmap and process Sends consistent reminders and motivators Has resources for potential sticking points Onboarding is made predictable when it: Segments engagements based on user goals or cohorts Adapts to changing goals over time Is created and tested intentionally In addition to the positive aspects of onboarding, such as a user’s definition of “success,” you also need to consider the challenges. Onboarding is all about helping a user build a new habit, which means they’ll face roadblocks. To counteract this, you’re going to have to figure out how to keep motivation high, and barriers to maintaining momentum low. When do you need a customer onboarding process? SaaS onboarding is used any time a user is new to your platform. This happens most often with free trials. However, you might need a smaller onboarding process when a user upgrades to a new product or tier that has additional features. While we’ll be exploring a full-blown, multi-channel approach below, customer onboarding isn’t something to start considering once you hit a certain threshold. Onboarding is essential for every user, even your first. Tweet this quote While it may take time to build up your process, there needs to be some form of support from the get-go. How long does onboarding last? Truthfully, onboarding should last as long as it takes for a user to become comfortable and confident using the tool. However, you’ll focus your planning within the bounds of your free trial. Even a freemium product should focus on the first few weeks of a user’s account. In addition to considering how long an onboarding process should last, you need to limit how much information you’ll cover. It’s tempting to show every user every feature you’ve worked so hard on, but relevance is more powerful than quantity. What is the “aha moment”? Every habit you’ve ever stuck with has had a moment that solidified itself in your routine. You think “ah, so THAT’S what meditation can do for me” when you react calmly to an unnerving situation. Or you feel a little more pep in your step when you try your new running shoes. Successful SaaS users have these moments, too, and they’re called “aha moments.” The aha moment is the point that the value of your product finally clicks for a user. Tweet this quote While it may seem like an elusive moment, you can use data to uncover it. You can read a great guide about the aha moment here, but I’ll summarize. By comparing the actions and engagement of retained users versus churned users, the moments that contribute most to a user’s success begin to float to the surface. When a new user follows the path to an aha moment, they understand how your product can help, and they want to keep getting the results. Without an aha moment, a user will feel lackluster about their success and lose motivation to keep going. How do you measure SaaS onboarding? The lasting effect of customer onboarding will surface as either rising monthly recurring revenue or rising churn. Therefore, it’s critical to monitor onboarding metrics that signal whether a user is succeeding or sinking. The ultimate goal of onboarding is to carry users into a paid plan. Therefore, you’ll measure your conversion rate from free trial to paying subscriber. Pinning down a single “good” conversion rate for an industry is tricky. So I always suggest comparing your rates now to your rates in the past. Looking at industry benchmarks are interesting, but the only real test is tracking your company’s progress over time. While conversions are an essential metric, they don’t tell us much about the details of the onboarding process. Therefore, the main customer onboarding metric to measure is customer engagement. Focus your investigation on: How often customers are logging in How long a user stays logged in How many features users are exploring Which features are most popular, and which are being ignored When users are taking advantage of certain features Another powerful tool to have in your inboarding analysis toolbox is cohort analysis. Cohort analysis is a powerful tool to understand how specific features and measures impact churn. These graphs may look confusing at first, but they help you monitor the evolution of users via their churn rate. Implementing a cohort analysis alongside your onboarding process updates gives you insight into whether or not your changes are helping (or hurting). Tailoring the customer onboarding process for your company We’ve explored SaaS onboarding from a high-level, but there’s truly no one-size-fits-all strategy. Product considerations The first factor that impacts your onboarding is your product. The length and format of onboarding will vary based on: How complicated your product is, and which features are best to start with What plan level users start with, and what feature limitations may be in place Whether or not features require data or information to work Customer considerations In addition to considering user segments and goals, you need to choose between a high-tech or high-touch onboarding approach. High-tech onboarding uses more automated messages and self-service information or product tours. This is ideal for simpler products or single users. High-touch onboarding incorporates more one-on-one assistance or touchpoints with a Customer Success Manager. This approach may be helpful for very technical products or user accounts with multiple team members. Elements of SaaS customer onboarding (and what you can do to improve them) If everything we’ve covered so far has felt abstract, don’t worry. It’s time to look at specific tactics you’ll use in your customer onboarding strategy. Signup process I know what you’re thinking: “you said onboarding is for people who have signed up, not for people signing up.” The signup process is part of the journey, though. Basecamp uses the signup process to help set up the product (click to view full-size image). During sign up, you begin to set expectations and gather useful information about user goals and priorities. For example, Basecamp uses the signup process to get information that sets up the product. Rather than making a user start from scratch and create their own teams and projects, they offer a selection to choose from during signup. Then, that info is auto-filled as soon as a user completes registration. Best practices: Should you have a simple signup form or ask for a lot of information upfront? When in doubt, start simple. Only asking for the absolutely necessary information reduces the complexity and lowers the barrier to signing up. You can experiment with adding more later as Basecamp does. Form field validation – nothing is more annoying than entering a bunch of data and afterward being told that you actually need “at least one upper case character”. Grr! Some positive reinforcement while the form is being filled in, that the user is actually signing up for something great – why not complement the signup form with some social proof – a much-needed helping hand to get through the chore of signing up. Social signup buttons – they’re proven to increase signup rates, and the process is generally much smoother for the user. Also, they see a brand that they respect on your site (i.e., Facebook). Caution: Think about whether you’ll still need to request a password and more information from the user, though. A social signup followed by another lengthy form pretty much defeats the point! How to create it: Think about what information is absolutely critical. For most products, this is probably just a name, email, and password. Beyond the “need to know” are the “great to know” elements. These could be self-segmenting questions that help autofill data. Add on questions or segments carefully, and number it so that they know when they’re getting close. How to improve it: If not many people are getting through your signup, you may be asking too much. Consider scaling back fields or reducing any back-and-forth steps. Welcome email After the signup comes the welcome email. Think of it as a celebration or kick-off! The welcome email is important since it’s your first contact with the customer once they’ve created their account. It’s also the first true email you’re sending them, and therefore needs to set communication expectations. FreshBooks’ welcome email is full of reminders of the value users are getting. The welcome email from FreshBooks is a great example. First, they state their value prop with the intro “Welcome to the World of Easy Invoicing.” They’re also celebrating the user’s action, and adding a little social proof. Next, they reiterate the outcomes to expect. Finally, they offer a few next steps. Best practices: Keeping it simple. Yes, there are probably a lot of things you want to (or need to) tell your new customers. But don’t bombard them with information! Some things can wait until they’ve spent a bit of time in your product. Give them some resources that will help them and further engage them – this is a great opportunity to use that high-quality content you’ve been publishing on your blog. At ChartMogul, we always send links to our SaaS Metrics Cheat Sheets, which give a concise overview of the topic. Don’t forget to thank them! They’ve just taken the time to sign up for your product, after all. Reiterate your company’s perspective or mission, along with the outcomes and benefits a new user can expect. How to create it: Think about the context in which someone is signing up. What are they going through or struggling with that led them to sign up today? Address the outcomes they want and give them the first step to get started. How to improve it: If you have a few links in the email like FreshBooks does, monitor which are most popular. If one consistently gets ignored, delete it in favor of a simpler email. If the welcome email isn’t getting them into your app at all, you might need to change positioning. If any of the links in your welcome email are constantly getting ignored, delete them in favor of a simpler email. Tweet this quote First login The first login is a user’s first impression of the app. If you want to reduce churn, take a look at your first login experience. It will either get the ball rolling or interrupt the experience. Mention doesn’t risk leaving me with an empty dashboard when I first log in. Mention uses a pop-up at first login to welcome users, as seen above. Once again, there’s a summary of the benefits and use cases. Then, the CTA is to “create your first alert.” Best practices: Not presenting the user with an empty UI. In many cases, with a B2B SaaS product, the customer is not going to have a wealth of data presented to them on the first login. Services that require data connections, import, etc. are going to require an extra step after login (see Data Import). Give the user a clear path to what they should do first. Presenting them with a set of tools and buttons that they’ve never seen before is going to require some form of signpost towards the first step. Positive reinforcement. They’ve got this far – why not take the chance to thank them again and remind them of how awesome things are going to be, once they have everything set up. How to create it: What’s the first step? This could be the first hurdle to overcome or a quick win. Give them a welcome and a place to start. How to improve it: Do people take the step you put forward? If yes, did it have a positive impact on onboarding and retention? If not, is there a more logical first step? Data import Many B2B tools require customers to import their data (or connect data sources) to use them. For example, Buffer needs you to connect a social account, and ChartMogul needs you to connect a billing system. This is one of the major barriers to the whole onboarding process – customers will generally not see any value from the product until they complete this step. There are a few ways you can approach data import, including: Making it easy to connect accounts or import data, and making it the first step Autofill information based on what you learned during signup, as Basecamp does Put in dummy data, so they see how great it is to import their own information Notion chooses to offer data import during sign up, but their design could be used after the first login, too. Notion are (literally) putting money on getting you to import data. No matter how essential importing data is to customer success, you should always allow users to skip if they want. Notion includes a progress bar to let users know the setup is almost finished, but there’s still a “skip” button in the upper right corner. Interestingly, Notion has chosen to make importing data more worthwhile by offering a $5 credit when importing from Evernote. They may have identified this step as an “aha moment” contributor and want to really entice users to do it. Best practices: Automating as much of the process as possible Supporting those who get stuck Not requiring hours of the user’s time (we’ll let you know when it’s finished). Whether you can do any of this during the signup process? How to create it: You probably know what that essential piece of data is. If you don’t, look to what people skip over who eventually churn. Make importing data as seamless and as few steps as possible. How to improve it: Can the connection or import be even easier? Can you prep them before they get to that point so that they have the info they need? If they don’t import, can you remind them? Other emails After the initial welcome email, you have a great opportunity to keep your new customers engaged and educated by sending them emails. This is your best chance of getting the customer to really use all the features of your product. There are many different types of onboarding emails you can use, too. You can call attention to single features at a time, or group them together as a “use case” or a unique way to take advantage of your app. Content is also a great way to bolster the onboarding journey. Case studies and testimonials are useful for re-energizing users. Tweet this quote Finally, make sure you’re sending reminders and CTA emails toward the end of the trial. Evernote gradually educates users on the multiple ways they can profit from the service. In the Evernote example above, the company is calling attention to the “use case” of collaboration. They mention a few features, such as sharing notes and collecting feedback but group them together as a general way to use Evernote. Best practices They’re called Drip campaigns because drips are small. Make sure you introduce just one new concept per email – the rest can wait for the following emails. They’re also called Drip campaigns because drips are regular. Follow a posting schedule that supports “little and often.” If you get this right, the customer will expect (and even look forward to) each subsequent mail. The goal is not to show each feature of the product and how it works in detail. The goal is to entice the customer to go and try out the feature. If you don’t get people INTO your app, they’ll become disengaged. If you want to make your onboarding email series personalized, add behavior-based emails. Messages that are specific to the actions a person has (or hasn’t) taken are more relevant than generic time-based emails. How to create it: Refer back to your “aha moment” and determine what steps lead up to that. This will help you prioritize what features to call attention to, and which content is most relevant. How to improve it: Look at which emails are driving the most and least engagement. Based on your top performers, what can you learn about what catches a person’s eye and motivates them to act? Product tutorials A welcome message during the first login is great, but you’re here to support users in the long run. Product tours and tooltips give your community on-demand lessons on using your app. As with every onboarding component, there are different ways to present product tutorials. These include: A “getting started” checklist within the UI to keep users on track An in-app learning center or in-demand product tour Tutorial buttons alongside different features GoToMeeting chooses to use an onboarding checklist that’s always available for review, shown below. It clearly lays out a roadmap for new users and tracks their progress. Anyone who has ever added a task to their daily to-do list just to cross it off understands how enticing a progress bar is. GoToMeetings uses a checklist to give users a roadmap to follow. Other companies, such as Google Drive, insert videos or animations to take users step-by-step. Google Drive makes great use of videos to educate users. Best practices: Making it skippable. This is critical. There’s nothing worse than being forced through a tutorial that you don’t need to or want to see. Let me out!! Making it possible for people to come back to it later. People commonly skip pop-ups and notifications when they first log in to something. So at least make sure that they can find it again when they realize it was actually quite useful to them after all… How to create it: Prioritize product tutorials for either a) core first steps or b) tasks where you see engagement drop off. Product tutorials are useful for showing users how easy or how helpful a given action is. How to improve it: First, look at whether or not people are using the tutorial, and if so, when? A tutorial that is more “in the way” than helpful may need to be scrapped or shown at a different time. Documentation Documentation isn’t an entirely exciting prospect, but it’s an important element of any onboarding experience. If everything goes well, perhaps it’s not needed at all. But you want to be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. The Mailchimp Knowledge Base is well-structured, easy to find and puts search front and center. In the example above, Mailchimp splits their “knowledge base” across different categories. The more you empower a user to self-service, the better. Having various types and levels of support casts the widest net for users to overcome their issues and continue using your app. Best practices: Bad or out-of-date documentation can be worse than no documentation at all. Make sure that the documentation you do have is easily maintainable – otherwise, get rid of it. Structure your documentation around tasks that the user is trying to accomplish with your product (and name them this way). There’s nothing wrong with “How to do X…“ How to create it: Need to start creating documentation from scratch? It may seem counterintuitive but start with the pieces of the “aha moment” puzzle. You want to bolster your critical moments first, to capitalize on the strengths you already have. Then, move onto the topics or features that users are struggling with. How to improve it: Once you’ve covered all of the documentation bases, go back and recreate some in different formats. Everyone has learning preferences or formats that are more accessible to them. In-App Notifications Depending on the nature of your SaaS product, notifications will have a varying impact on the onboarding experience. Regardless of how many notifications you push to users, they remain a key contact point, with a strong potential for re-engaging disengaged users. You can use in-app engagements to: Call attention to a critical feature a user has been ignoring Congratulate a user’s progress Give small tips (like Harvest does below) Remind users about missing data Harvest explains the value in clear terms when asking users to perform a specific action. Best practices: Frequency. Getting this right is a fine balance between fading into background noise and spamming the user into frustration. How do you tempt the user into re-engaging with the product? If you give them too much information in the notification, they might have no need to do this. Get the balance right, and the notification is both useful and acts as positive encouragement to go and explore your product. Choice. Let the user fine-tune your notifications to achieve the frequency that suits them. How to create it: Your priority during onboarding is reinforcing prime features. Start with in-app messages that keep users on track. How to improve it: Experiment with different frequencies, amount of information, format, and segmentation. Checkup call This can have a huge impact on the overall onboarding experience of your customers. Why? Because it’s a touchpoint with a human being. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time! Win-win. You can either send a message specifically offering a checkup call, or incorporate the offer into your onboarding emails. Customer.io chooses the latter, as seen below. Customer.io uses the onboarding flow to get users to talk to the team. Best practices: Find the right point in time to do this. Too soon, and the customer won’t really have anything much to tell you – they might even find your behavior almost “needy.” Too late, and they may already have made a clear-cut decision that their sub-par experience will mean that they won’t be paying for your product. Think about what you can do with the data you get from these calls. It’s likely that there are some great actionable insights, but you need to take a measured approach – it’s easy to derail your vision and roadmap for the product with individual cases of feedback, particularly when talking directly with customers (there’s more emotion involved). How to create it: Your customer success management program is unique to your company. When in doubt, keep it simple, and personally reach out to users offering help. How to improve it: Your customer success, marketing, sales, and product teams should be talking about what you’re finding out, and what you’d like to learn. Swag Everyone loves swag! Startups are always finding more innovative ways to wow users with ever-more elaborate swag packs. There are even services such as StartupThreads, which manage sending swag boxes to customers. You can also turn high-quality swag into an incentive. ConvertKit sends users a free t-shirt IF they complete the onboarding checklist during your trial. Genius. Complete the onboarding — get a branded t-shirt. Best practice: Swag only works well when it’s an additive to a great onboarding experience. i.e., it can make a good experience great, but not a poor experience good. Send something that customers will actually want to use (or wear). You don’t want to represent your brand with that pathetically-poor last-generation iPhone charging cable that nobody can use any more. If you’re small enough, add a personal touch! Hand-written cards or a quick thank you note will make the customer truly feel loved. How to create it: Be very intentional about what you send, when, and to who. Sending pointless or low-quality swag could damage your brand. Think about what you’d want to receive and use, and then how you can make it personal or memorable. How to improve it: You could send special swag to your most engaged segments for an extra “wow” factor. The difficult truth about customer onboarding We’ve covered what customer onboarding can do when it’s going well. Now, let’s address a hard fact. Your entire onboarding process is only as strong as your weakest component. Tweet this quote If there’s a spot for new users to slip through a crack of engagement and let their free trial come and go, some will inevitably fall victim. Even an onboarding experience that results in someone converting to a paid plan isn’t exempt from scrutiny. After all, poor onboarding leads to churn. Without the proper foundation and support, a user may fail to see value in the long run and choose to cancel their account. You may be able to lure some users back after churning, but it will be tough. I don’t say this to scare you, though. We review onboarding so that these things don’t happen. You can use a churn-informed onboarding review strategy. First, you need to identify red flags. Start by asking yourself: Where are users dropping off during their free trial? Could it be because they’re struggling with a particular feature, or that they aren’t sure what to do next? Are there any signals in analytics that users are frustrated around a particular step? Is one segment showing better retention than another? What’s different about their onboarding journeys? How do usage patterns compare for churning vs. non-churning customers? When you’re improving your SaaS onboarding, ask as many questions and find as many answers as possible. Consult the data, as well as feedback from users. Cross-department communication is important. Once you’ve identified your weak spots, get to work improving them. Start with one change at a time, and see how it plays out in your cohort analysis. Your onboarding strategy won’t be created in a day, so it certainly won’t be changed in one. In the meantime, check out our other SaaS Resources to learn about the other metrics and SaaS strategies you need to know. This article was originally published on the ChartMogul blog on November 9, 2015.

[INST] A Guide to SaaS Customer Onboarding [Updated for 2020] [/INST]

Think back to the last time you tried to add a new habit to your life. Perhaps you thought “this is finally my year to learn a new language.” You downloaded an app, felt the thrill of practicing for 5 days in a row, and then…life happened. One day you had to stay late at work, so your evening was rushed, and you fell into bed without practicing. Then you tried that new show everyone is talking about and watched the whole season in one weekend. After a while, your motivation fades and the excuses become more prevalent. If you relate to any part of that scenario, chances are you’re a human. We’ve all tried building new habits, to varying degrees of success. It’s no easy feat. The thing is, learning and incorporating a SaaS app into a workflow is no different than learning a language, hitting the gym, or sticking to morning meditation. When a person signs up for a SaaS free trial, they’re faced with building the habit of using that product consistently. We know that building habits is hard, so your job as a SaaS company is to support a new user as much as possible during those initial weeks. This is where customer onboarding comes into play. Let’s explore. What is customer onboarding? First up, what does “customer onboarding” mean? Customer onboarding, or SaaS onboarding, is the process of helping new users get started and stay engaged. It’s a series of steps and resources that help make incorporating a SaaS product into the user’s routine as easy as possible. Onboarding isn’t just about teaching new users which buttons to click to use your app, though. The best customer onboarding strategy considers true customer goals. That is, what is it that users want to achieve, and what does “success” mean to them? People care more about outcomes than features, and it’s your job to help them reach those outcomes as easily and predictably as possible. Tweet this quote Onboarding is made easy when it: Offers users a roadmap and process Sends consistent reminders and motivators Has resources for potential sticking points Onboarding is made predictable when it: Segments engagements based on user goals or cohorts Adapts to changing goals over time Is created and tested intentionally In addition to the positive aspects of onboarding, such as a user’s definition of “success,” you also need to consider the challenges. Onboarding is all about helping a user build a new habit, which means they’ll face roadblocks. To counteract this, you’re going to have to figure out how to keep motivation high, and barriers to maintaining momentum low. When do you need a customer onboarding process? SaaS onboarding is used any time a user is new to your platform. This happens most often with free trials. However, you might need a smaller onboarding process when a user upgrades to a new product or tier that has additional features. While we’ll be exploring a full-blown, multi-channel approach below, customer onboarding isn’t something to start considering once you hit a certain threshold. Onboarding is essential for every user, even your first. Tweet this quote While it may take time to build up your process, there needs to be some form of support from the get-go. How long does onboarding last? Truthfully, onboarding should last as long as it takes for a user to become comfortable and confident using the tool. However, you’ll focus your planning within the bounds of your free trial. Even a freemium product should focus on the first few weeks of a user’s account. In addition to considering how long an onboarding process should last, you need to limit how much information you’ll cover. It’s tempting to show every user every feature you’ve worked so hard on, but relevance is more powerful than quantity. What is the “aha moment”? Every habit you’ve ever stuck with has had a moment that solidified itself in your routine. You think “ah, so THAT’S what meditation can do for me” when you react calmly to an unnerving situation. Or you feel a little more pep in your step when you try your new running shoes. Successful SaaS users have these moments, too, and they’re called “aha moments.” The aha moment is the point that the value of your product finally clicks for a user. Tweet this quote While it may seem like an elusive moment, you can use data to uncover it. You can read a great guide about the aha moment here, but I’ll summarize. By comparing the actions and engagement of retained users versus churned users, the moments that contribute most to a user’s success begin to float to the surface. When a new user follows the path to an aha moment, they understand how your product can help, and they want to keep getting the results. Without an aha moment, a user will feel lackluster about their success and lose motivation to keep going. How do you measure SaaS onboarding? The lasting effect of customer onboarding will surface as either rising monthly recurring revenue or rising churn. Therefore, it’s critical to monitor onboarding metrics that signal whether a user is succeeding or sinking. The ultimate goal of onboarding is to carry users into a paid plan. Therefore, you’ll measure your conversion rate from free trial to paying subscriber. Pinning down a single “good” conversion rate for an industry is tricky. So I always suggest comparing your rates now to your rates in the past. Looking at industry benchmarks are interesting, but the only real test is tracking your company’s progress over time. While conversions are an essential metric, they don’t tell us much about the details of the onboarding process. Therefore, the main customer onboarding metric to measure is customer engagement. Focus your investigation on: How often customers are logging in How long a user stays logged in How many features users are exploring Which features are most popular, and which are being ignored When users are taking advantage of certain features Another powerful tool to have in your inboarding analysis toolbox is cohort analysis. Cohort analysis is a powerful tool to understand how specific features and measures impact churn. These graphs may look confusing at first, but they help you monitor the evolution of users via their churn rate. Implementing a cohort analysis alongside your onboarding process updates gives you insight into whether or not your changes are helping (or hurting). Tailoring the customer onboarding process for your company We’ve explored SaaS onboarding from a high-level, but there’s truly no one-size-fits-all strategy. Product considerations The first factor that impacts your onboarding is your product. The length and format of onboarding will vary based on: How complicated your product is, and which features are best to start with What plan level users start with, and what feature limitations may be in place Whether or not features require data or information to work Customer considerations In addition to considering user segments and goals, you need to choose between a high-tech or high-touch onboarding approach. High-tech onboarding uses more automated messages and self-service information or product tours. This is ideal for simpler products or single users. High-touch onboarding incorporates more one-on-one assistance or touchpoints with a Customer Success Manager. This approach may be helpful for very technical products or user accounts with multiple team members. Elements of SaaS customer onboarding (and what you can do to improve them) If everything we’ve covered so far has felt abstract, don’t worry. It’s time to look at specific tactics you’ll use in your customer onboarding strategy. Signup process I know what you’re thinking: “you said onboarding is for people who have signed up, not for people signing up.” The signup process is part of the journey, though. Basecamp uses the signup process to help set up the product (click to view full-size image). During sign up, you begin to set expectations and gather useful information about user goals and priorities. For example, Basecamp uses the signup process to get information that sets up the product. Rather than making a user start from scratch and create their own teams and projects, they offer a selection to choose from during signup. Then, that info is auto-filled as soon as a user completes registration. Best practices: Should you have a simple signup form or ask for a lot of information upfront? When in doubt, start simple. Only asking for the absolutely necessary information reduces the complexity and lowers the barrier to signing up. You can experiment with adding more later as Basecamp does. Form field validation – nothing is more annoying than entering a bunch of data and afterward being told that you actually need “at least one upper case character”. Grr! Some positive reinforcement while the form is being filled in, that the user is actually signing up for something great – why not complement the signup form with some social proof – a much-needed helping hand to get through the chore of signing up. Social signup buttons – they’re proven to increase signup rates, and the process is generally much smoother for the user. Also, they see a brand that they respect on your site (i.e., Facebook). Caution: Think about whether you’ll still need to request a password and more information from the user, though. A social signup followed by another lengthy form pretty much defeats the point! How to create it: Think about what information is absolutely critical. For most products, this is probably just a name, email, and password. Beyond the “need to know” are the “great to know” elements. These could be self-segmenting questions that help autofill data. Add on questions or segments carefully, and number it so that they know when they’re getting close. How to improve it: If not many people are getting through your signup, you may be asking too much. Consider scaling back fields or reducing any back-and-forth steps. Welcome email After the signup comes the welcome email. Think of it as a celebration or kick-off! The welcome email is important since it’s your first contact with the customer once they’ve created their account. It’s also the first true email you’re sending them, and therefore needs to set communication expectations. FreshBooks’ welcome email is full of reminders of the value users are getting. The welcome email from FreshBooks is a great example. First, they state their value prop with the intro “Welcome to the World of Easy Invoicing.” They’re also celebrating the user’s action, and adding a little social proof. Next, they reiterate the outcomes to expect. Finally, they offer a few next steps. Best practices: Keeping it simple. Yes, there are probably a lot of things you want to (or need to) tell your new customers. But don’t bombard them with information! Some things can wait until they’ve spent a bit of time in your product. Give them some resources that will help them and further engage them – this is a great opportunity to use that high-quality content you’ve been publishing on your blog. At ChartMogul, we always send links to our SaaS Metrics Cheat Sheets, which give a concise overview of the topic. Don’t forget to thank them! They’ve just taken the time to sign up for your product, after all. Reiterate your company’s perspective or mission, along with the outcomes and benefits a new user can expect. How to create it: Think about the context in which someone is signing up. What are they going through or struggling with that led them to sign up today? Address the outcomes they want and give them the first step to get started. How to improve it: If you have a few links in the email like FreshBooks does, monitor which are most popular. If one consistently gets ignored, delete it in favor of a simpler email. If the welcome email isn’t getting them into your app at all, you might need to change positioning. If any of the links in your welcome email are constantly getting ignored, delete them in favor of a simpler email. Tweet this quote First login The first login is a user’s first impression of the app. If you want to reduce churn, take a look at your first login experience. It will either get the ball rolling or interrupt the experience. Mention doesn’t risk leaving me with an empty dashboard when I first log in. Mention uses a pop-up at first login to welcome users, as seen above. Once again, there’s a summary of the benefits and use cases. Then, the CTA is to “create your first alert.” Best practices: Not presenting the user with an empty UI. In many cases, with a B2B SaaS product, the customer is not going to have a wealth of data presented to them on the first login. Services that require data connections, import, etc. are going to require an extra step after login (see Data Import). Give the user a clear path to what they should do first. Presenting them with a set of tools and buttons that they’ve never seen before is going to require some form of signpost towards the first step. Positive reinforcement. They’ve got this far – why not take the chance to thank them again and remind them of how awesome things are going to be, once they have everything set up. How to create it: What’s the first step? This could be the first hurdle to overcome or a quick win. Give them a welcome and a place to start. How to improve it: Do people take the step you put forward? If yes, did it have a positive impact on onboarding and retention? If not, is there a more logical first step? Data import Many B2B tools require customers to import their data (or connect data sources) to use them. For example, Buffer needs you to connect a social account, and ChartMogul needs you to connect a billing system. This is one of the major barriers to the whole onboarding process – customers will generally not see any value from the product until they complete this step. There are a few ways you can approach data import, including: Making it easy to connect accounts or import data, and making it the first step Autofill information based on what you learned during signup, as Basecamp does Put in dummy data, so they see how great it is to import their own information Notion chooses to offer data import during sign up, but their design could be used after the first login, too. Notion are (literally) putting money on getting you to import data. No matter how essential importing data is to customer success, you should always allow users to skip if they want. Notion includes a progress bar to let users know the setup is almost finished, but there’s still a “skip” button in the upper right corner. Interestingly, Notion has chosen to make importing data more worthwhile by offering a $5 credit when importing from Evernote. They may have identified this step as an “aha moment” contributor and want to really entice users to do it. Best practices: Automating as much of the process as possible Supporting those who get stuck Not requiring hours of the user’s time (we’ll let you know when it’s finished). Whether you can do any of this during the signup process? How to create it: You probably know what that essential piece of data is. If you don’t, look to what people skip over who eventually churn. Make importing data as seamless and as few steps as possible. How to improve it: Can the connection or import be even easier? Can you prep them before they get to that point so that they have the info they need? If they don’t import, can you remind them? Other emails After the initial welcome email, you have a great opportunity to keep your new customers engaged and educated by sending them emails. This is your best chance of getting the customer to really use all the features of your product. There are many different types of onboarding emails you can use, too. You can call attention to single features at a time, or group them together as a “use case” or a unique way to take advantage of your app. Content is also a great way to bolster the onboarding journey. Case studies and testimonials are useful for re-energizing users. Tweet this quote Finally, make sure you’re sending reminders and CTA emails toward the end of the trial. Evernote gradually educates users on the multiple ways they can profit from the service. In the Evernote example above, the company is calling attention to the “use case” of collaboration. They mention a few features, such as sharing notes and collecting feedback but group them together as a general way to use Evernote. Best practices They’re called Drip campaigns because drips are small. Make sure you introduce just one new concept per email – the rest can wait for the following emails. They’re also called Drip campaigns because drips are regular. Follow a posting schedule that supports “little and often.” If you get this right, the customer will expect (and even look forward to) each subsequent mail. The goal is not to show each feature of the product and how it works in detail. The goal is to entice the customer to go and try out the feature. If you don’t get people INTO your app, they’ll become disengaged. If you want to make your onboarding email series personalized, add behavior-based emails. Messages that are specific to the actions a person has (or hasn’t) taken are more relevant than generic time-based emails. How to create it: Refer back to your “aha moment” and determine what steps lead up to that. This will help you prioritize what features to call attention to, and which content is most relevant. How to improve it: Look at which emails are driving the most and least engagement. Based on your top performers, what can you learn about what catches a person’s eye and motivates them to act? Product tutorials A welcome message during the first login is great, but you’re here to support users in the long run. Product tours and tooltips give your community on-demand lessons on using your app. As with every onboarding component, there are different ways to present product tutorials. These include: A “getting started” checklist within the UI to keep users on track An in-app learning center or in-demand product tour Tutorial buttons alongside different features GoToMeeting chooses to use an onboarding checklist that’s always available for review, shown below. It clearly lays out a roadmap for new users and tracks their progress. Anyone who has ever added a task to their daily to-do list just to cross it off understands how enticing a progress bar is. GoToMeetings uses a checklist to give users a roadmap to follow. Other companies, such as Google Drive, insert videos or animations to take users step-by-step. Google Drive makes great use of videos to educate users. Best practices: Making it skippable. This is critical. There’s nothing worse than being forced through a tutorial that you don’t need to or want to see. Let me out!! Making it possible for people to come back to it later. People commonly skip pop-ups and notifications when they first log in to something. So at least make sure that they can find it again when they realize it was actually quite useful to them after all… How to create it: Prioritize product tutorials for either a) core first steps or b) tasks where you see engagement drop off. Product tutorials are useful for showing users how easy or how helpful a given action is. How to improve it: First, look at whether or not people are using the tutorial, and if so, when? A tutorial that is more “in the way” than helpful may need to be scrapped or shown at a different time. Documentation Documentation isn’t an entirely exciting prospect, but it’s an important element of any onboarding experience. If everything goes well, perhaps it’s not needed at all. But you want to be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. The Mailchimp Knowledge Base is well-structured, easy to find and puts search front and center. In the example above, Mailchimp splits their “knowledge base” across different categories. The more you empower a user to self-service, the better. Having various types and levels of support casts the widest net for users to overcome their issues and continue using your app. Best practices: Bad or out-of-date documentation can be worse than no documentation at all. Make sure that the documentation you do have is easily maintainable – otherwise, get rid of it. Structure your documentation around tasks that the user is trying to accomplish with your product (and name them this way). There’s nothing wrong with “How to do X…“ How to create it: Need to start creating documentation from scratch? It may seem counterintuitive but start with the pieces of the “aha moment” puzzle. You want to bolster your critical moments first, to capitalize on the strengths you already have. Then, move onto the topics or features that users are struggling with. How to improve it: Once you’ve covered all of the documentation bases, go back and recreate some in different formats. Everyone has learning preferences or formats that are more accessible to them. In-App Notifications Depending on the nature of your SaaS product, notifications will have a varying impact on the onboarding experience. Regardless of how many notifications you push to users, they remain a key contact point, with a strong potential for re-engaging disengaged users. You can use in-app engagements to: Call attention to a critical feature a user has been ignoring Congratulate a user’s progress Give small tips (like Harvest does below) Remind users about missing data Harvest explains the value in clear terms when asking users to perform a specific action. Best practices: Frequency. Getting this right is a fine balance between fading into background noise and spamming the user into frustration. How do you tempt the user into re-engaging with the product? If you give them too much information in the notification, they might have no need to do this. Get the balance right, and the notification is both useful and acts as positive encouragement to go and explore your product. Choice. Let the user fine-tune your notifications to achieve the frequency that suits them. How to create it: Your priority during onboarding is reinforcing prime features. Start with in-app messages that keep users on track. How to improve it: Experiment with different frequencies, amount of information, format, and segmentation. Checkup call This can have a huge impact on the overall onboarding experience of your customers. Why? Because it’s a touchpoint with a human being. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time! Win-win. You can either send a message specifically offering a checkup call, or incorporate the offer into your onboarding emails. Customer.io chooses the latter, as seen below. Customer.io uses the onboarding flow to get users to talk to the team. Best practices: Find the right point in time to do this. Too soon, and the customer won’t really have anything much to tell you – they might even find your behavior almost “needy.” Too late, and they may already have made a clear-cut decision that their sub-par experience will mean that they won’t be paying for your product. Think about what you can do with the data you get from these calls. It’s likely that there are some great actionable insights, but you need to take a measured approach – it’s easy to derail your vision and roadmap for the product with individual cases of feedback, particularly when talking directly with customers (there’s more emotion involved). How to create it: Your customer success management program is unique to your company. When in doubt, keep it simple, and personally reach out to users offering help. How to improve it: Your customer success, marketing, sales, and product teams should be talking about what you’re finding out, and what you’d like to learn. Swag Everyone loves swag! Startups are always finding more innovative ways to wow users with ever-more elaborate swag packs. There are even services such as StartupThreads, which manage sending swag boxes to customers. You can also turn high-quality swag into an incentive. ConvertKit sends users a free t-shirt IF they complete the onboarding checklist during your trial. Genius. Complete the onboarding — get a branded t-shirt. Best practice: Swag only works well when it’s an additive to a great onboarding experience. i.e., it can make a good experience great, but not a poor experience good. Send something that customers will actually want to use (or wear). You don’t want to represent your brand with that pathetically-poor last-generation iPhone charging cable that nobody can use any more. If you’re small enough, add a personal touch! Hand-written cards or a quick thank you note will make the customer truly feel loved. How to create it: Be very intentional about what you send, when, and to who. Sending pointless or low-quality swag could damage your brand. Think about what you’d want to receive and use, and then how you can make it personal or memorable. How to improve it: You could send special swag to your most engaged segments for an extra “wow” factor. The difficult truth about customer onboarding We’ve covered what customer onboarding can do when it’s going well. Now, let’s address a hard fact. Your entire onboarding process is only as strong as your weakest component. Tweet this quote If there’s a spot for new users to slip through a crack of engagement and let their free trial come and go, some will inevitably fall victim. Even an onboarding experience that results in someone converting to a paid plan isn’t exempt from scrutiny. After all, poor onboarding leads to churn. Without the proper foundation and support, a user may fail to see value in the long run and choose to cancel their account. You may be able to lure some users back after churning, but it will be tough. I don’t say this to scare you, though. We review onboarding so that these things don’t happen. You can use a churn-informed onboarding review strategy. First, you need to identify red flags. Start by asking yourself: Where are users dropping off during their free trial? Could it be because they’re struggling with a particular feature, or that they aren’t sure what to do next? Are there any signals in analytics that users are frustrated around a particular step? Is one segment showing better retention than another? What’s different about their onboarding journeys? How do usage patterns compare for churning vs. non-churning customers? When you’re improving your SaaS onboarding, ask as many questions and find as many answers as possible. Consult the data, as well as feedback from users. Cross-department communication is important. Once you’ve identified your weak spots, get to work improving them. Start with one change at a time, and see how it plays out in your cohort analysis. Your onboarding strategy won’t be created in a day, so it certainly won’t be changed in one. In the meantime, check out our other SaaS Resources to learn about the other metrics and SaaS strategies you need to know. This article was originally published on the ChartMogul blog on November 9, 2015.

<sys> [INST] A Guide to SaaS Customer Onboarding [Updated for 2020] [/INST] Think back to the last time you tried to add a new habit to your life. Perhaps you thought “this is finally my year to learn a new language.” You downloaded an app, felt the thrill of practicing for 5 days in a row, and then…life happened. One day you had to stay late at work, so your evening was rushed, and you fell into bed without practicing. Then you tried that new show everyone is talking about and watched the whole season in one weekend. After a while, your motivation fades and the excuses become more prevalent. If you relate to any part of that scenario, chances are you’re a human. We’ve all tried building new habits, to varying degrees of success. It’s no easy feat. The thing is, learning and incorporating a SaaS app into a workflow is no different than learning a language, hitting the gym, or sticking to morning meditation. When a person signs up for a SaaS free trial, they’re faced with building the habit of using that product consistently. We know that building habits is hard, so your job as a SaaS company is to support a new user as much as possible during those initial weeks. This is where customer onboarding comes into play. Let’s explore. What is customer onboarding? First up, what does “customer onboarding” mean? Customer onboarding, or SaaS onboarding, is the process of helping new users get started and stay engaged. It’s a series of steps and resources that help make incorporating a SaaS product into the user’s routine as easy as possible. Onboarding isn’t just about teaching new users which buttons to click to use your app, though. The best customer onboarding strategy considers true customer goals. That is, what is it that users want to achieve, and what does “success” mean to them? People care more about outcomes than features, and it’s your job to help them reach those outcomes as easily and predictably as possible. Tweet this quote Onboarding is made easy when it: Offers users a roadmap and process Sends consistent reminders and motivators Has resources for potential sticking points Onboarding is made predictable when it: Segments engagements based on user goals or cohorts Adapts to changing goals over time Is created and tested intentionally In addition to the positive aspects of onboarding, such as a user’s definition of “success,” you also need to consider the challenges. Onboarding is all about helping a user build a new habit, which means they’ll face roadblocks. To counteract this, you’re going to have to figure out how to keep motivation high, and barriers to maintaining momentum low. When do you need a customer onboarding process? SaaS onboarding is used any time a user is new to your platform. This happens most often with free trials. However, you might need a smaller onboarding process when a user upgrades to a new product or tier that has additional features. While we’ll be exploring a full-blown, multi-channel approach below, customer onboarding isn’t something to start considering once you hit a certain threshold. Onboarding is essential for every user, even your first. Tweet this quote While it may take time to build up your process, there needs to be some form of support from the get-go. How long does onboarding last? Truthfully, onboarding should last as long as it takes for a user to become comfortable and confident using the tool. However, you’ll focus your planning within the bounds of your free trial. Even a freemium product should focus on the first few weeks of a user’s account. In addition to considering how long an onboarding process should last, you need to limit how much information you’ll cover. It’s tempting to show every user every feature you’ve worked so hard on, but relevance is more powerful than quantity. What is the “aha moment”? Every habit you’ve ever stuck with has had a moment that solidified itself in your routine. You think “ah, so THAT’S what meditation can do for me” when you react calmly to an unnerving situation. Or you feel a little more pep in your step when you try your new running shoes. Successful SaaS users have these moments, too, and they’re called “aha moments.” The aha moment is the point that the value of your product finally clicks for a user. Tweet this quote While it may seem like an elusive moment, you can use data to uncover it. You can read a great guide about the aha moment here, but I’ll summarize. By comparing the actions and engagement of retained users versus churned users, the moments that contribute most to a user’s success begin to float to the surface. When a new user follows the path to an aha moment, they understand how your product can help, and they want to keep getting the results. Without an aha moment, a user will feel lackluster about their success and lose motivation to keep going. How do you measure SaaS onboarding? The lasting effect of customer onboarding will surface as either rising monthly recurring revenue or rising churn. Therefore, it’s critical to monitor onboarding metrics that signal whether a user is succeeding or sinking. The ultimate goal of onboarding is to carry users into a paid plan. Therefore, you’ll measure your conversion rate from free trial to paying subscriber. Pinning down a single “good” conversion rate for an industry is tricky. So I always suggest comparing your rates now to your rates in the past. Looking at industry benchmarks are interesting, but the only real test is tracking your company’s progress over time. While conversions are an essential metric, they don’t tell us much about the details of the onboarding process. Therefore, the main customer onboarding metric to measure is customer engagement. Focus your investigation on: How often customers are logging in How long a user stays logged in How many features users are exploring Which features are most popular, and which are being ignored When users are taking advantage of certain features Another powerful tool to have in your inboarding analysis toolbox is cohort analysis. Cohort analysis is a powerful tool to understand how specific features and measures impact churn. These graphs may look confusing at first, but they help you monitor the evolution of users via their churn rate. Implementing a cohort analysis alongside your onboarding process updates gives you insight into whether or not your changes are helping (or hurting). Tailoring the customer onboarding process for your company We’ve explored SaaS onboarding from a high-level, but there’s truly no one-size-fits-all strategy. Product considerations The first factor that impacts your onboarding is your product. The length and format of onboarding will vary based on: How complicated your product is, and which features are best to start with What plan level users start with, and what feature limitations may be in place Whether or not features require data or information to work Customer considerations In addition to considering user segments and goals, you need to choose between a high-tech or high-touch onboarding approach. High-tech onboarding uses more automated messages and self-service information or product tours. This is ideal for simpler products or single users. High-touch onboarding incorporates more one-on-one assistance or touchpoints with a Customer Success Manager. This approach may be helpful for very technical products or user accounts with multiple team members. Elements of SaaS customer onboarding (and what you can do to improve them) If everything we’ve covered so far has felt abstract, don’t worry. It’s time to look at specific tactics you’ll use in your customer onboarding strategy. Signup process I know what you’re thinking: “you said onboarding is for people who have signed up, not for people signing up.” The signup process is part of the journey, though. Basecamp uses the signup process to help set up the product (click to view full-size image). During sign up, you begin to set expectations and gather useful information about user goals and priorities. For example, Basecamp uses the signup process to get information that sets up the product. Rather than making a user start from scratch and create their own teams and projects, they offer a selection to choose from during signup. Then, that info is auto-filled as soon as a user completes registration. Best practices: Should you have a simple signup form or ask for a lot of information upfront? When in doubt, start simple. Only asking for the absolutely necessary information reduces the complexity and lowers the barrier to signing up. You can experiment with adding more later as Basecamp does. Form field validation – nothing is more annoying than entering a bunch of data and afterward being told that you actually need “at least one upper case character”. Grr! Some positive reinforcement while the form is being filled in, that the user is actually signing up for something great – why not complement the signup form with some social proof – a much-needed helping hand to get through the chore of signing up. Social signup buttons – they’re proven to increase signup rates, and the process is generally much smoother for the user. Also, they see a brand that they respect on your site (i.e., Facebook). Caution: Think about whether you’ll still need to request a password and more information from the user, though. A social signup followed by another lengthy form pretty much defeats the point! How to create it: Think about what information is absolutely critical. For most products, this is probably just a name, email, and password. Beyond the “need to know” are the “great to know” elements. These could be self-segmenting questions that help autofill data. Add on questions or segments carefully, and number it so that they know when they’re getting close. How to improve it: If not many people are getting through your signup, you may be asking too much. Consider scaling back fields or reducing any back-and-forth steps. Welcome email After the signup comes the welcome email. Think of it as a celebration or kick-off! The welcome email is important since it’s your first contact with the customer once they’ve created their account. It’s also the first true email you’re sending them, and therefore needs to set communication expectations. FreshBooks’ welcome email is full of reminders of the value users are getting. The welcome email from FreshBooks is a great example. First, they state their value prop with the intro “Welcome to the World of Easy Invoicing.” They’re also celebrating the user’s action, and adding a little social proof. Next, they reiterate the outcomes to expect. Finally, they offer a few next steps. Best practices: Keeping it simple. Yes, there are probably a lot of things you want to (or need to) tell your new customers. But don’t bombard them with information! Some things can wait until they’ve spent a bit of time in your product. Give them some resources that will help them and further engage them – this is a great opportunity to use that high-quality content you’ve been publishing on your blog. At ChartMogul, we always send links to our SaaS Metrics Cheat Sheets, which give a concise overview of the topic. Don’t forget to thank them! They’ve just taken the time to sign up for your product, after all. Reiterate your company’s perspective or mission, along with the outcomes and benefits a new user can expect. How to create it: Think about the context in which someone is signing up. What are they going through or struggling with that led them to sign up today? Address the outcomes they want and give them the first step to get started. How to improve it: If you have a few links in the email like FreshBooks does, monitor which are most popular. If one consistently gets ignored, delete it in favor of a simpler email. If the welcome email isn’t getting them into your app at all, you might need to change positioning. If any of the links in your welcome email are constantly getting ignored, delete them in favor of a simpler email. Tweet this quote First login The first login is a user’s first impression of the app. If you want to reduce churn, take a look at your first login experience. It will either get the ball rolling or interrupt the experience. Mention doesn’t risk leaving me with an empty dashboard when I first log in. Mention uses a pop-up at first login to welcome users, as seen above. Once again, there’s a summary of the benefits and use cases. Then, the CTA is to “create your first alert.” Best practices: Not presenting the user with an empty UI. In many cases, with a B2B SaaS product, the customer is not going to have a wealth of data presented to them on the first login. Services that require data connections, import, etc. are going to require an extra step after login (see Data Import). Give the user a clear path to what they should do first. Presenting them with a set of tools and buttons that they’ve never seen before is going to require some form of signpost towards the first step. Positive reinforcement. They’ve got this far – why not take the chance to thank them again and remind them of how awesome things are going to be, once they have everything set up. How to create it: What’s the first step? This could be the first hurdle to overcome or a quick win. Give them a welcome and a place to start. How to improve it: Do people take the step you put forward? If yes, did it have a positive impact on onboarding and retention? If not, is there a more logical first step? Data import Many B2B tools require customers to import their data (or connect data sources) to use them. For example, Buffer needs you to connect a social account, and ChartMogul needs you to connect a billing system. This is one of the major barriers to the whole onboarding process – customers will generally not see any value from the product until they complete this step. There are a few ways you can approach data import, including: Making it easy to connect accounts or import data, and making it the first step Autofill information based on what you learned during signup, as Basecamp does Put in dummy data, so they see how great it is to import their own information Notion chooses to offer data import during sign up, but their design could be used after the first login, too. Notion are (literally) putting money on getting you to import data. No matter how essential importing data is to customer success, you should always allow users to skip if they want. Notion includes a progress bar to let users know the setup is almost finished, but there’s still a “skip” button in the upper right corner. Interestingly, Notion has chosen to make importing data more worthwhile by offering a $5 credit when importing from Evernote. They may have identified this step as an “aha moment” contributor and want to really entice users to do it. Best practices: Automating as much of the process as possible Supporting those who get stuck Not requiring hours of the user’s time (we’ll let you know when it’s finished). Whether you can do any of this during the signup process? How to create it: You probably know what that essential piece of data is. If you don’t, look to what people skip over who eventually churn. Make importing data as seamless and as few steps as possible. How to improve it: Can the connection or import be even easier? Can you prep them before they get to that point so that they have the info they need? If they don’t import, can you remind them? Other emails After the initial welcome email, you have a great opportunity to keep your new customers engaged and educated by sending them emails. This is your best chance of getting the customer to really use all the features of your product. There are many different types of onboarding emails you can use, too. You can call attention to single features at a time, or group them together as a “use case” or a unique way to take advantage of your app. Content is also a great way to bolster the onboarding journey. Case studies and testimonials are useful for re-energizing users. Tweet this quote Finally, make sure you’re sending reminders and CTA emails toward the end of the trial. Evernote gradually educates users on the multiple ways they can profit from the service. In the Evernote example above, the company is calling attention to the “use case” of collaboration. They mention a few features, such as sharing notes and collecting feedback but group them together as a general way to use Evernote. Best practices They’re called Drip campaigns because drips are small. Make sure you introduce just one new concept per email – the rest can wait for the following emails. They’re also called Drip campaigns because drips are regular. Follow a posting schedule that supports “little and often.” If you get this right, the customer will expect (and even look forward to) each subsequent mail. The goal is not to show each feature of the product and how it works in detail. The goal is to entice the customer to go and try out the feature. If you don’t get people INTO your app, they’ll become disengaged. If you want to make your onboarding email series personalized, add behavior-based emails. Messages that are specific to the actions a person has (or hasn’t) taken are more relevant than generic time-based emails. How to create it: Refer back to your “aha moment” and determine what steps lead up to that. This will help you prioritize what features to call attention to, and which content is most relevant. How to improve it: Look at which emails are driving the most and least engagement. Based on your top performers, what can you learn about what catches a person’s eye and motivates them to act? Product tutorials A welcome message during the first login is great, but you’re here to support users in the long run. Product tours and tooltips give your community on-demand lessons on using your app. As with every onboarding component, there are different ways to present product tutorials. These include: A “getting started” checklist within the UI to keep users on track An in-app learning center or in-demand product tour Tutorial buttons alongside different features GoToMeeting chooses to use an onboarding checklist that’s always available for review, shown below. It clearly lays out a roadmap for new users and tracks their progress. Anyone who has ever added a task to their daily to-do list just to cross it off understands how enticing a progress bar is. GoToMeetings uses a checklist to give users a roadmap to follow. Other companies, such as Google Drive, insert videos or animations to take users step-by-step. Google Drive makes great use of videos to educate users. Best practices: Making it skippable. This is critical. There’s nothing worse than being forced through a tutorial that you don’t need to or want to see. Let me out!! Making it possible for people to come back to it later. People commonly skip pop-ups and notifications when they first log in to something. So at least make sure that they can find it again when they realize it was actually quite useful to them after all… How to create it: Prioritize product tutorials for either a) core first steps or b) tasks where you see engagement drop off. Product tutorials are useful for showing users how easy or how helpful a given action is. How to improve it: First, look at whether or not people are using the tutorial, and if so, when? A tutorial that is more “in the way” than helpful may need to be scrapped or shown at a different time. Documentation Documentation isn’t an entirely exciting prospect, but it’s an important element of any onboarding experience. If everything goes well, perhaps it’s not needed at all. But you want to be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. The Mailchimp Knowledge Base is well-structured, easy to find and puts search front and center. In the example above, Mailchimp splits their “knowledge base” across different categories. The more you empower a user to self-service, the better. Having various types and levels of support casts the widest net for users to overcome their issues and continue using your app. Best practices: Bad or out-of-date documentation can be worse than no documentation at all. Make sure that the documentation you do have is easily maintainable – otherwise, get rid of it. Structure your documentation around tasks that the user is trying to accomplish with your product (and name them this way). There’s nothing wrong with “How to do X…“ How to create it: Need to start creating documentation from scratch? It may seem counterintuitive but start with the pieces of the “aha moment” puzzle. You want to bolster your critical moments first, to capitalize on the strengths you already have. Then, move onto the topics or features that users are struggling with. How to improve it: Once you’ve covered all of the documentation bases, go back and recreate some in different formats. Everyone has learning preferences or formats that are more accessible to them. In-App Notifications Depending on the nature of your SaaS product, notifications will have a varying impact on the onboarding experience. Regardless of how many notifications you push to users, they remain a key contact point, with a strong potential for re-engaging disengaged users. You can use in-app engagements to: Call attention to a critical feature a user has been ignoring Congratulate a user’s progress Give small tips (like Harvest does below) Remind users about missing data Harvest explains the value in clear terms when asking users to perform a specific action. Best practices: Frequency. Getting this right is a fine balance between fading into background noise and spamming the user into frustration. How do you tempt the user into re-engaging with the product? If you give them too much information in the notification, they might have no need to do this. Get the balance right, and the notification is both useful and acts as positive encouragement to go and explore your product. Choice. Let the user fine-tune your notifications to achieve the frequency that suits them. How to create it: Your priority during onboarding is reinforcing prime features. Start with in-app messages that keep users on track. How to improve it: Experiment with different frequencies, amount of information, format, and segmentation. Checkup call This can have a huge impact on the overall onboarding experience of your customers. Why? Because it’s a touchpoint with a human being. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time! Win-win. You can either send a message specifically offering a checkup call, or incorporate the offer into your onboarding emails. Customer.io chooses the latter, as seen below. Customer.io uses the onboarding flow to get users to talk to the team. Best practices: Find the right point in time to do this. Too soon, and the customer won’t really have anything much to tell you – they might even find your behavior almost “needy.” Too late, and they may already have made a clear-cut decision that their sub-par experience will mean that they won’t be paying for your product. Think about what you can do with the data you get from these calls. It’s likely that there are some great actionable insights, but you need to take a measured approach – it’s easy to derail your vision and roadmap for the product with individual cases of feedback, particularly when talking directly with customers (there’s more emotion involved). How to create it: Your customer success management program is unique to your company. When in doubt, keep it simple, and personally reach out to users offering help. How to improve it: Your customer success, marketing, sales, and product teams should be talking about what you’re finding out, and what you’d like to learn. Swag Everyone loves swag! Startups are always finding more innovative ways to wow users with ever-more elaborate swag packs. There are even services such as StartupThreads, which manage sending swag boxes to customers. You can also turn high-quality swag into an incentive. ConvertKit sends users a free t-shirt IF they complete the onboarding checklist during your trial. Genius. Complete the onboarding — get a branded t-shirt. Best practice: Swag only works well when it’s an additive to a great onboarding experience. i.e., it can make a good experience great, but not a poor experience good. Send something that customers will actually want to use (or wear). You don’t want to represent your brand with that pathetically-poor last-generation iPhone charging cable that nobody can use any more. If you’re small enough, add a personal touch! Hand-written cards or a quick thank you note will make the customer truly feel loved. How to create it: Be very intentional about what you send, when, and to who. Sending pointless or low-quality swag could damage your brand. Think about what you’d want to receive and use, and then how you can make it personal or memorable. How to improve it: You could send special swag to your most engaged segments for an extra “wow” factor. The difficult truth about customer onboarding We’ve covered what customer onboarding can do when it’s going well. Now, let’s address a hard fact. Your entire onboarding process is only as strong as your weakest component. Tweet this quote If there’s a spot for new users to slip through a crack of engagement and let their free trial come and go, some will inevitably fall victim. Even an onboarding experience that results in someone converting to a paid plan isn’t exempt from scrutiny. After all, poor onboarding leads to churn. Without the proper foundation and support, a user may fail to see value in the long run and choose to cancel their account. You may be able to lure some users back after churning, but it will be tough. I don’t say this to scare you, though. We review onboarding so that these things don’t happen. You can use a churn-informed onboarding review strategy. First, you need to identify red flags. Start by asking yourself: Where are users dropping off during their free trial? Could it be because they’re struggling with a particular feature, or that they aren’t sure what to do next? Are there any signals in analytics that users are frustrated around a particular step? Is one segment showing better retention than another? What’s different about their onboarding journeys? How do usage patterns compare for churning vs. non-churning customers? When you’re improving your SaaS onboarding, ask as many questions and find as many answers as possible. Consult the data, as well as feedback from users. Cross-department communication is important. Once you’ve identified your weak spots, get to work improving them. Start with one change at a time, and see how it plays out in your cohort analysis. Your onboarding strategy won’t be created in a day, so it certainly won’t be changed in one. In the meantime, check out our other SaaS Resources to learn about the other metrics and SaaS strategies you need to know. This article was originally published on the ChartMogul blog on November 9, 2015. </sys

SaaS Q&A: How do I calculate LTV when I have negative churn?. Calculating Customer LTV is always tricky, even if you don’t have negative churn. I’ll begin by explaining the problems with the original formula, and then move on to answer how you should calculate it when you have negative churn. Basic Customer LTV formula The original formula is problematic because it makes assumptions about churn rate — and totally overlooks other things. As a result, this LTV prediction is overly optimistic. The standard limitations of the basic LTV formula Assumes linear churn rate over time. This is never really the case in real life. SaaS businesses see most churn within the first 90 days of a subscription, and then churn tapers off in later months. Like so: Doesn’t account for risk or reduced value of money over time. – Risk: Particularly as a startup, there is unlimited risk in the form of changes to the market, technology becoming obsolete, and fierce competition. – Reduced value of money over time: When viewing money as a future resource, the common practice is to model it at a reduced value. Since LTV is a predictive metric, it’s more accurate to reduce the value of future revenue. Doesn’t account for customer growth. And this is the gap that particularly concerns you. When a SaaS company has strong MRR growth over a customer lifetime — or expansion business — that can result in negative churn. The limitation when it comes to negative churn, specifically The basic LTV formula doesn’t work well with negative churn. Why? Because this formula is about CUSTOMER churn rate. “Negative churn” has to do with MRR churn rate. These are measuring two completely different factors of your business: number of accounts versus recurring revenue. So how do you try to solve for the three limitations plus the blocker that negative churn has no place in the formula? Well, David Skok expertly, and true to form, exploded the basic LTV metric by analyzing these three limitations and researching a better LTV formula. Spoiler alert: this new formula is definitely more complicated. And it will show you a lower Customer LTV than you see with the other formula. But this one is actually far more accurate. David Skok’s revised LTV formula The two concepts added to this new formula are: “K” Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a pre-defined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses. “G” Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. Final Word Try out this revised LTV formula and see how it works for your business. For a much more in-depth explanation and detailed advice, do check out David Skok’s impressive breakdown of this new definition of LTV. Another resource, more of a quick-and-easy read, is this SaaS LTV Cheat Sheet. It’s a free PDF that could be handy around the office. I leave you with Skok’s LTV wisdom. “Don’t obsess over getting to the last level of accuracy here. We are using a formula to predict the future, and the future, by its very definition is not predictable.” Good luck! This answer was originally published on Quora. View the original thread here: How do I calculate customer lifetime value (LTV) when my SaaS business has negative churn? NEW SaaS Q&A: How do I calculate #LTV when I have negative churn? https://t.co/h1mXVu9V1g #SaaS #churn pic.twitter.com/6Iv2rIIxCE — ChartMogul (@ChartMogul) June 29, 2016

[INST] SaaS Q&A: How do I calculate LTV when I have negative churn? [/INST]

Calculating Customer LTV is always tricky, even if you don’t have negative churn. I’ll begin by explaining the problems with the original formula, and then move on to answer how you should calculate it when you have negative churn. Basic Customer LTV formula The original formula is problematic because it makes assumptions about churn rate — and totally overlooks other things. As a result, this LTV prediction is overly optimistic. The standard limitations of the basic LTV formula Assumes linear churn rate over time. This is never really the case in real life. SaaS businesses see most churn within the first 90 days of a subscription, and then churn tapers off in later months. Like so: Doesn’t account for risk or reduced value of money over time. – Risk: Particularly as a startup, there is unlimited risk in the form of changes to the market, technology becoming obsolete, and fierce competition. – Reduced value of money over time: When viewing money as a future resource, the common practice is to model it at a reduced value. Since LTV is a predictive metric, it’s more accurate to reduce the value of future revenue. Doesn’t account for customer growth. And this is the gap that particularly concerns you. When a SaaS company has strong MRR growth over a customer lifetime — or expansion business — that can result in negative churn. The limitation when it comes to negative churn, specifically The basic LTV formula doesn’t work well with negative churn. Why? Because this formula is about CUSTOMER churn rate. “Negative churn” has to do with MRR churn rate. These are measuring two completely different factors of your business: number of accounts versus recurring revenue. So how do you try to solve for the three limitations plus the blocker that negative churn has no place in the formula? Well, David Skok expertly, and true to form, exploded the basic LTV metric by analyzing these three limitations and researching a better LTV formula. Spoiler alert: this new formula is definitely more complicated. And it will show you a lower Customer LTV than you see with the other formula. But this one is actually far more accurate. David Skok’s revised LTV formula The two concepts added to this new formula are: “K” Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a pre-defined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses. “G” Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. Final Word Try out this revised LTV formula and see how it works for your business. For a much more in-depth explanation and detailed advice, do check out David Skok’s impressive breakdown of this new definition of LTV. Another resource, more of a quick-and-easy read, is this SaaS LTV Cheat Sheet. It’s a free PDF that could be handy around the office. I leave you with Skok’s LTV wisdom. “Don’t obsess over getting to the last level of accuracy here. We are using a formula to predict the future, and the future, by its very definition is not predictable.” Good luck! This answer was originally published on Quora. View the original thread here: How do I calculate customer lifetime value (LTV) when my SaaS business has negative churn? NEW SaaS Q&A: How do I calculate #LTV when I have negative churn? https://t.co/h1mXVu9V1g #SaaS #churn pic.twitter.com/6Iv2rIIxCE — ChartMogul (@ChartMogul) June 29, 2016

<sys> [INST] SaaS Q&A: How do I calculate LTV when I have negative churn? [/INST] Calculating Customer LTV is always tricky, even if you don’t have negative churn. I’ll begin by explaining the problems with the original formula, and then move on to answer how you should calculate it when you have negative churn. Basic Customer LTV formula The original formula is problematic because it makes assumptions about churn rate — and totally overlooks other things. As a result, this LTV prediction is overly optimistic. The standard limitations of the basic LTV formula Assumes linear churn rate over time. This is never really the case in real life. SaaS businesses see most churn within the first 90 days of a subscription, and then churn tapers off in later months. Like so: Doesn’t account for risk or reduced value of money over time. – Risk: Particularly as a startup, there is unlimited risk in the form of changes to the market, technology becoming obsolete, and fierce competition. – Reduced value of money over time: When viewing money as a future resource, the common practice is to model it at a reduced value. Since LTV is a predictive metric, it’s more accurate to reduce the value of future revenue. Doesn’t account for customer growth. And this is the gap that particularly concerns you. When a SaaS company has strong MRR growth over a customer lifetime — or expansion business — that can result in negative churn. The limitation when it comes to negative churn, specifically The basic LTV formula doesn’t work well with negative churn. Why? Because this formula is about CUSTOMER churn rate. “Negative churn” has to do with MRR churn rate. These are measuring two completely different factors of your business: number of accounts versus recurring revenue. So how do you try to solve for the three limitations plus the blocker that negative churn has no place in the formula? Well, David Skok expertly, and true to form, exploded the basic LTV metric by analyzing these three limitations and researching a better LTV formula. Spoiler alert: this new formula is definitely more complicated. And it will show you a lower Customer LTV than you see with the other formula. But this one is actually far more accurate. David Skok’s revised LTV formula The two concepts added to this new formula are: “K” Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a pre-defined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses. “G” Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. Final Word Try out this revised LTV formula and see how it works for your business. For a much more in-depth explanation and detailed advice, do check out David Skok’s impressive breakdown of this new definition of LTV. Another resource, more of a quick-and-easy read, is this SaaS LTV Cheat Sheet. It’s a free PDF that could be handy around the office. I leave you with Skok’s LTV wisdom. “Don’t obsess over getting to the last level of accuracy here. We are using a formula to predict the future, and the future, by its very definition is not predictable.” Good luck! This answer was originally published on Quora. View the original thread here: How do I calculate customer lifetime value (LTV) when my SaaS business has negative churn? NEW SaaS Q&A: How do I calculate #LTV when I have negative churn? https://t.co/h1mXVu9V1g #SaaS #churn pic.twitter.com/6Iv2rIIxCE — ChartMogul (@ChartMogul) June 29, 2016 </sys

ChartMogul 2022: Year in Review . If you thought 2021 was a busy year for product development at ChartMogul, we shifted into hyperdrive for 2022. And if we had to give it a name, we’d call 2022 ‘The Year of the Destination.’ We released 9 different destinations, because we know that ChartMogul is only one part of the larger ecosystem of tools that organizations use on a daily basis. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, all play an essential role in understanding and growing your business. With our new destinations, you can send your clean and tidy revenue data to be combined with other data points in: Amazon S3, Google Cloud, Microsoft Azure, Snowflake, Amazon Redshift, or Google BigQuery. But that’s just cloud storage and data warehouse destinations! The team has also been working hard all year to bring you these and many other improvements to the ChartMogul platform. Let’s get to it. See future changes to your recurring revenue with CMRR CMRR gives you the complete picture of your SaaS business to see if you’re on target to reach your monthly, quarterly, or yearly goals. That kind of information is really powerful; you can take action to mitigate upcoming churn, allocate marketing spend, or just give you the motivation you need to push a bit harder to hit that target. Check out the CMRR Forecast Report to see a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. 3 new charts give you more insight into your business Net MRR Movements If MRR often fluctuates for your customers, by adding or removing seats for example, it can be difficult to see the overall change for each customer in a given time period. Net MRR Movements makes it easy to see the total impact of those MRR movements for each of your customers and the individual customer count for each MRR movement. Cut through the noise and see the total effect of your MRR movements for each of your customers with Net MRR Movements. Check out the chart. Net and Gross MRR Retention Rates Retention rates tell you how effective you are at gaining value from existing customers and that those customers are sticking with you. Net and Gross MRR Retention Rates are often considered the most important metrics and SaaS. They hold the key to finding product-market fit and telling an effective growth story. Try it out. We have higher NRR with our Growth plans Get your team on board with user roles and permissions We rolled out our new and improved user roles and permissions. It will give you more flexibility and control over who has access to what data in your ChartMogul account. It’s our hope that by giving more of your team access to SaaS metrics, they make more informed decisions, improve their workflows, and ultimately become more effective in their roles. It’s even possible to invite external advisors, consultants, and investors to your ChartMogul account in a way that’s GDPR compliant. The following roles are now available: Lite Read-only Staff Admin Owner Send out invites to your whole company to get them comfortable using SaaS metrics – and celebrating the wins. With Lite users, there’s no long any reason not to invite all your VCs and investors to your ChartMogul account. Lite users can see all metrics and run analysis without being able to view any identifiable customer data. Nick Franklin, CEO ChartMogul Send ChartMogul data to 9 new destinations This is the big one folks. Pre-2022, there were only a couple ways to export data out of ChartMogul. You could export your MRR movements and customers as a CSV, or for a programmatic approach, use the Metrics API. But we knew that sometimes those solutions might not be the most efficient in terms of time or developer resources. So the team has been hard at work over the last year bringing you 9 new ways to send ChartMogul data to the systems and tools you need it most. Cloud storage and data warehouses Combining revenue, product, CRM, and other data sets can uncover powerful insights. Many of our customers use MRR movements from ChartMogul to predict churn or generate financial forecasts. To that end, it’s necessary to get subscription data into your data warehouse for further analysis. Now you can configure Amazon S3, Google Cloud Storage, Azure Blob Storage, Snowflake, Amazon Redshift, and Google BigQuery as destinations in ChartMogul. You can analyze your data in aggregate and make more data-informed decisions. Scheduled email exports If you don’t have a data warehouse or cloud storage solution set up just yet, and you’re regularly pulling CSVs from our UI, you can schedule email exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) lists of all your customers. Intercom Looking to step up your marketing with more personalized campaigns? Our Intercom destination will allow you to populate Customer profiles with data like MRR, ARR, Net payments, subscriber since, subscription status, plan, email, currency, and company. Slack And last but not least, the Slack destination will help keep your team pushing for new clients, celebrate in the wins, and respond to concerns by sending MRR notifications to any channel you choose. Get more detail on your Stripe homepage With 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. Even more cool features and improvements Image download – More and more companies are sharing their growth journeys online. Earlier in 2022, we released a nifty image download feature that allows you save and download a PNG of any chart with a cool background to match. New time intervals – Previously only available in months, our churn rate and LTV charts are now available at different time intervals – week, month, quarter, and year. Free customer handling and churn recognition – Previously only available for certain integrations, we added universal support for free customer handling and churn recognition. Reorder custom attributes – You can predefine the order in which your custom attributes are shown on customer profiles – move the ten most important to the top of your list. Faster and more reliable CSV exports – The team spent a lot of time working under the hood to improve the speed and reliability of your CSV exports. Microacquire – SaaS metrics are crucial to your valuation, and now you can integrate ChartMogul directly with Microaquire to give potential investors your data upfront. As always, you can stay updated on what’s new with our product on our blog or in our release notes. That’s a wrap on 2022 We’d like to give a special thank you to all of our customers, readers, investors, and partners. You’re the reason we’re committed to building the best subscription analytics platform on the market. We’ve got even bigger plans for 2023. Be sure to keep following our journey and feel free to let us know what we should build next.

[INST] ChartMogul 2022: Year in Review [/INST]

If you thought 2021 was a busy year for product development at ChartMogul, we shifted into hyperdrive for 2022. And if we had to give it a name, we’d call 2022 ‘The Year of the Destination.’ We released 9 different destinations, because we know that ChartMogul is only one part of the larger ecosystem of tools that organizations use on a daily basis. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, all play an essential role in understanding and growing your business. With our new destinations, you can send your clean and tidy revenue data to be combined with other data points in: Amazon S3, Google Cloud, Microsoft Azure, Snowflake, Amazon Redshift, or Google BigQuery. But that’s just cloud storage and data warehouse destinations! The team has also been working hard all year to bring you these and many other improvements to the ChartMogul platform. Let’s get to it. See future changes to your recurring revenue with CMRR CMRR gives you the complete picture of your SaaS business to see if you’re on target to reach your monthly, quarterly, or yearly goals. That kind of information is really powerful; you can take action to mitigate upcoming churn, allocate marketing spend, or just give you the motivation you need to push a bit harder to hit that target. Check out the CMRR Forecast Report to see a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. 3 new charts give you more insight into your business Net MRR Movements If MRR often fluctuates for your customers, by adding or removing seats for example, it can be difficult to see the overall change for each customer in a given time period. Net MRR Movements makes it easy to see the total impact of those MRR movements for each of your customers and the individual customer count for each MRR movement. Cut through the noise and see the total effect of your MRR movements for each of your customers with Net MRR Movements. Check out the chart. Net and Gross MRR Retention Rates Retention rates tell you how effective you are at gaining value from existing customers and that those customers are sticking with you. Net and Gross MRR Retention Rates are often considered the most important metrics and SaaS. They hold the key to finding product-market fit and telling an effective growth story. Try it out. We have higher NRR with our Growth plans Get your team on board with user roles and permissions We rolled out our new and improved user roles and permissions. It will give you more flexibility and control over who has access to what data in your ChartMogul account. It’s our hope that by giving more of your team access to SaaS metrics, they make more informed decisions, improve their workflows, and ultimately become more effective in their roles. It’s even possible to invite external advisors, consultants, and investors to your ChartMogul account in a way that’s GDPR compliant. The following roles are now available: Lite Read-only Staff Admin Owner Send out invites to your whole company to get them comfortable using SaaS metrics – and celebrating the wins. With Lite users, there’s no long any reason not to invite all your VCs and investors to your ChartMogul account. Lite users can see all metrics and run analysis without being able to view any identifiable customer data. Nick Franklin, CEO ChartMogul Send ChartMogul data to 9 new destinations This is the big one folks. Pre-2022, there were only a couple ways to export data out of ChartMogul. You could export your MRR movements and customers as a CSV, or for a programmatic approach, use the Metrics API. But we knew that sometimes those solutions might not be the most efficient in terms of time or developer resources. So the team has been hard at work over the last year bringing you 9 new ways to send ChartMogul data to the systems and tools you need it most. Cloud storage and data warehouses Combining revenue, product, CRM, and other data sets can uncover powerful insights. Many of our customers use MRR movements from ChartMogul to predict churn or generate financial forecasts. To that end, it’s necessary to get subscription data into your data warehouse for further analysis. Now you can configure Amazon S3, Google Cloud Storage, Azure Blob Storage, Snowflake, Amazon Redshift, and Google BigQuery as destinations in ChartMogul. You can analyze your data in aggregate and make more data-informed decisions. Scheduled email exports If you don’t have a data warehouse or cloud storage solution set up just yet, and you’re regularly pulling CSVs from our UI, you can schedule email exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) lists of all your customers. Intercom Looking to step up your marketing with more personalized campaigns? Our Intercom destination will allow you to populate Customer profiles with data like MRR, ARR, Net payments, subscriber since, subscription status, plan, email, currency, and company. Slack And last but not least, the Slack destination will help keep your team pushing for new clients, celebrate in the wins, and respond to concerns by sending MRR notifications to any channel you choose. Get more detail on your Stripe homepage With 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. Even more cool features and improvements Image download – More and more companies are sharing their growth journeys online. Earlier in 2022, we released a nifty image download feature that allows you save and download a PNG of any chart with a cool background to match. New time intervals – Previously only available in months, our churn rate and LTV charts are now available at different time intervals – week, month, quarter, and year. Free customer handling and churn recognition – Previously only available for certain integrations, we added universal support for free customer handling and churn recognition. Reorder custom attributes – You can predefine the order in which your custom attributes are shown on customer profiles – move the ten most important to the top of your list. Faster and more reliable CSV exports – The team spent a lot of time working under the hood to improve the speed and reliability of your CSV exports. Microacquire – SaaS metrics are crucial to your valuation, and now you can integrate ChartMogul directly with Microaquire to give potential investors your data upfront. As always, you can stay updated on what’s new with our product on our blog or in our release notes. That’s a wrap on 2022 We’d like to give a special thank you to all of our customers, readers, investors, and partners. You’re the reason we’re committed to building the best subscription analytics platform on the market. We’ve got even bigger plans for 2023. Be sure to keep following our journey and feel free to let us know what we should build next.

<sys> [INST] ChartMogul 2022: Year in Review [/INST] If you thought 2021 was a busy year for product development at ChartMogul, we shifted into hyperdrive for 2022. And if we had to give it a name, we’d call 2022 ‘The Year of the Destination.’ We released 9 different destinations, because we know that ChartMogul is only one part of the larger ecosystem of tools that organizations use on a daily basis. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, all play an essential role in understanding and growing your business. With our new destinations, you can send your clean and tidy revenue data to be combined with other data points in: Amazon S3, Google Cloud, Microsoft Azure, Snowflake, Amazon Redshift, or Google BigQuery. But that’s just cloud storage and data warehouse destinations! The team has also been working hard all year to bring you these and many other improvements to the ChartMogul platform. Let’s get to it. See future changes to your recurring revenue with CMRR CMRR gives you the complete picture of your SaaS business to see if you’re on target to reach your monthly, quarterly, or yearly goals. That kind of information is really powerful; you can take action to mitigate upcoming churn, allocate marketing spend, or just give you the motivation you need to push a bit harder to hit that target. Check out the CMRR Forecast Report to see a breakdown of all scheduled monthly MRR movements from now into the future, and how they will impact your MRR and ARR. 3 new charts give you more insight into your business Net MRR Movements If MRR often fluctuates for your customers, by adding or removing seats for example, it can be difficult to see the overall change for each customer in a given time period. Net MRR Movements makes it easy to see the total impact of those MRR movements for each of your customers and the individual customer count for each MRR movement. Cut through the noise and see the total effect of your MRR movements for each of your customers with Net MRR Movements. Check out the chart. Net and Gross MRR Retention Rates Retention rates tell you how effective you are at gaining value from existing customers and that those customers are sticking with you. Net and Gross MRR Retention Rates are often considered the most important metrics and SaaS. They hold the key to finding product-market fit and telling an effective growth story. Try it out. We have higher NRR with our Growth plans Get your team on board with user roles and permissions We rolled out our new and improved user roles and permissions. It will give you more flexibility and control over who has access to what data in your ChartMogul account. It’s our hope that by giving more of your team access to SaaS metrics, they make more informed decisions, improve their workflows, and ultimately become more effective in their roles. It’s even possible to invite external advisors, consultants, and investors to your ChartMogul account in a way that’s GDPR compliant. The following roles are now available: Lite Read-only Staff Admin Owner Send out invites to your whole company to get them comfortable using SaaS metrics – and celebrating the wins. With Lite users, there’s no long any reason not to invite all your VCs and investors to your ChartMogul account. Lite users can see all metrics and run analysis without being able to view any identifiable customer data. Nick Franklin, CEO ChartMogul Send ChartMogul data to 9 new destinations This is the big one folks. Pre-2022, there were only a couple ways to export data out of ChartMogul. You could export your MRR movements and customers as a CSV, or for a programmatic approach, use the Metrics API. But we knew that sometimes those solutions might not be the most efficient in terms of time or developer resources. So the team has been hard at work over the last year bringing you 9 new ways to send ChartMogul data to the systems and tools you need it most. Cloud storage and data warehouses Combining revenue, product, CRM, and other data sets can uncover powerful insights. Many of our customers use MRR movements from ChartMogul to predict churn or generate financial forecasts. To that end, it’s necessary to get subscription data into your data warehouse for further analysis. Now you can configure Amazon S3, Google Cloud Storage, Azure Blob Storage, Snowflake, Amazon Redshift, and Google BigQuery as destinations in ChartMogul. You can analyze your data in aggregate and make more data-informed decisions. Scheduled email exports If you don’t have a data warehouse or cloud storage solution set up just yet, and you’re regularly pulling CSVs from our UI, you can schedule email exports of i) your MRR movements, ii) MRR movements broken down by customer, and iii) lists of all your customers. Intercom Looking to step up your marketing with more personalized campaigns? Our Intercom destination will allow you to populate Customer profiles with data like MRR, ARR, Net payments, subscriber since, subscription status, plan, email, currency, and company. Slack And last but not least, the Slack destination will help keep your team pushing for new clients, celebrate in the wins, and respond to concerns by sending MRR notifications to any channel you choose. Get more detail on your Stripe homepage With 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. Even more cool features and improvements Image download – More and more companies are sharing their growth journeys online. Earlier in 2022, we released a nifty image download feature that allows you save and download a PNG of any chart with a cool background to match. New time intervals – Previously only available in months, our churn rate and LTV charts are now available at different time intervals – week, month, quarter, and year. Free customer handling and churn recognition – Previously only available for certain integrations, we added universal support for free customer handling and churn recognition. Reorder custom attributes – You can predefine the order in which your custom attributes are shown on customer profiles – move the ten most important to the top of your list. Faster and more reliable CSV exports – The team spent a lot of time working under the hood to improve the speed and reliability of your CSV exports. Microacquire – SaaS metrics are crucial to your valuation, and now you can integrate ChartMogul directly with Microaquire to give potential investors your data upfront. As always, you can stay updated on what’s new with our product on our blog or in our release notes. That’s a wrap on 2022 We’d like to give a special thank you to all of our customers, readers, investors, and partners. You’re the reason we’re committed to building the best subscription analytics platform on the market. We’ve got even bigger plans for 2023. Be sure to keep following our journey and feel free to let us know what we should build next. </sys

The SaaS guide to website personalization. Ben Johnson is the Head of Content at Proof, a Y Combinator-backed startup that provides real-time social proof and personalization software. Over 18,000 sites trust Proof to help increase their conversion rates. We recommend Proof’s impressive blog and their podcast, Scale or Die. Thanks Ben! Personalization — it’s nothing new. In fact, we’ve seen the tactic at play in the real-world for years. Here are a few examples of when you might have encountered a personalized experience in your non-Internet life: When you check into a fancy, 5-star hotel and your favorite snacks are waiting for you upon your pillow alongside a handwritten note from the staff. At the local coffee shop, when the barista knows your order and can write your name on the cup before you even say it. A handmade custom shirt — tailored and monogrammed just for you. Over the past several years, this level of human attention that we’ve seen offline has made its way online, making the Internet a more delightful and efficient place to be a consumer. Nowadays, the top SaaS marketers are turning to personalization to increase their conversion rates, improve customer happiness, and increase the number of MQLs for their brand. Personalization defined So, what is personalization? In marketing, personalization is the concept of building a customized experience for each visitor. Rather than showing a one-size-fits page to a visitor — you use available first-party (your own data) and third-party data (enriched from an external source) to make the page more relevant for each and every person that lands on-site. This can be accomplished by adjusting headlines, CTAs, subheadings, value props, and so much more. Really any piece of content can be swapped out in real-time for a more relevant one. Here’s a quick example to better explain the concept. On our homepage at Proof, we have a generic headline that we display when we don’t have information on a visitor’s industry: But when we are able to accurately identify a visitor, we can adjust the headline to seem more relevant for our visitor. Here’s one variation for E-commerce visitors that toutes Proof as “the most powerful social proof platform for E-commerce brands.” By running this personalization experiment with a handful of other tests, we’ve seen a 51% increase in demo registrations and a 31% increase in new trials. Personalization can occur across mediums — from ad copy to landing pages to mobile apps to the web. But for SaaS businesses, the most notable and important instance of personalization occurs on the web and in-app. We’ll talk through some examples you can launch on your site later in this post. Why personalization matters for SaaS in 2019 While personalization has been around in the offline world for decades, it’s emergence to the online world is pretty recent. In the past, marketers wanting to personalize their sites faced a few big problems: Not enough data for personalization: For businesses that want to personalize, data is key. Until 3rd party data-sources such as FullContact, Clearbit, and Datanyze emerged, there was no easy way to pull visitor data. Now with an IP address or email, you can perform a real-time pull of a plethora of information around a visitor. Difficult to map customer journey: Even if you were able to collect information about a visitor, it was hard to have it update across your CRM, on your site, and in your app. Luckily, in 2019, software tools are a whole lot better at integrating and talking to one another. Plus, you have tools such as Segment that can help create a single place to store and aggregate your date from various endpoints. Time and resource constraints: Personalization is easier than ever before — but until platforms like Experiences emerged, these tactics were hard to implement and most companies didn’t have the engineering time to commit to personalization. With an influx of integrations and little-engineering-required software for personalization, this has all changed. So, you’re probably thinking, “this is great and all — but is it worth my time?” Here are a few reasons we think it’s pretty appealing for SaaS marketers looking to improve their conversion rates, lifetime value, or other metrics in 2019: Personalization reduces acquisition costs as much as 50%, lifts revenues by 5-15%, and increases the efficiency of marketing spend by 10-30% 77% of consumers have chosen, recommended or paid more for a brand that offers a personalized service or experience 87% of companies see a lift in key growth metrics (such as conversion rates, engagement rates, or average order value) when they employ personalization 59% of consumers say that personalization plays an impact in their buying decisions It’s also important to note: SaaS customers are some of the earliest adopters and most scrupulous consumers. You’ve likely seen that SaaS companies are amongst the first to launch new tactics, try out software, and run growth experiments — a testing mentality is just part of the role. For these reasons, your SaaS customers are going to expect personalization and hyper-relevant marketing. If you’re not already personalizing, it’s something you should consider launching on your site today. It creates a better customer experience and leads to improved metrics for your marketing team. 3 personalization experiments you can launch today Curious how exactly to integrate personalization on your site? Here a few quick ideas of experiments you can start running on your site today: Swap out CTAs Based on your visitors stage in the sales cycle, you’ll want to adjust your headlines, subheadlines, and imagery to appeal to your users’ unique properties. An even more powerful method for SaaS businesses is to personalize a CTA to push the visitor to the most relevant next action: Book a demo: On a visitor’s first visit to your site, push them towards a demo signup to show them exactly what your SaaS can do for their site. Start a trial: Once a visitor has watched a demo, it feels sloppy to push them back to the same demo tape. Instead, push them to signup for a free trial. Log in: If a customer starts their trial (or continues on to become a customer), the most relevant action is to push them towards logging in to their account. Match ad headlines to your landing pages It might seem like a simple task, but you’d be surprised by the number of SaaS businesses that don’t personalize their landing pages to match their ads. By taking the headline you’re using on Facebook, Adwords, or other ad platforms — you can easily adjust your pages to match the landing page to what a visitor is expecting to see when they click an ad. And the genius part of this tactic is you can create one optimized page — and simply swap out elements on the page based on a visitor’s unique qualities. Here’s an example from BigCommerce of a Facebook ad they’re running with the headline “Start Your Online Business Today. It’s Easy.” Then, behind this ad is a landing page that perfectly matches the ad you clicked on. Welcome back existing customers If you just launched a new website, one of the most pleasant ways to surprise and delight customers is to deploy a personalization that adjusts the homepage when a visitor lands. If a visitor has already converted and started to pay your business, why do most sites still push towards pitching their software and pretend like they’re running an outbound sales cycle? It’s sloppy and reflects badly on your brand. Gusto provides an incredible example of how to adjust the homepage to account for whether a visitor is a customer or not. Here’s the page you’ll see if you’re visiting without a Gusto account. But once you visit as a customer, the page adjusts. The headline adjusts to say “Welcome back,” the signup form disappears, and the CTA reads “Sign in.” The result? A more human experience for visitors to the site. If you’re looking for a lightweight way to get started with this tactic, you can use pretty much any live chat software to customize the messaging for return visitors. You can get more advanced with your message targeting, but it’s normally simple to set up a “welcome back” message based on the number of site visits. Image source How exactly do you launch personalization experiments You might be thinking — I’m ready to start personalizing but I simply don’t know where to begin. Luckily for you, there’s a whole host of software tools that can help you launch delightful experiences and increase conversions for your SaaS. In terms of data, you’ll need to utilize a third-party data provider such as Clearbit, Datanyze, or FullContact to enrich the amount of information you receive from a visitor. Then, you’ll also want to utilize a data integration tool such as Segment or Hull.io to manage that customer data. To easily deploy these online experiments, Proof Experiences is our a new personalization platform built exclusively for B2B SaaS companies. With our visual editor, you can quickly and easily deploy unique experiences for your visitors without having to bring in your engineering team. It’s fast, easy, and powerful. Interested in learning more about how to use the tools mentioned above in a personalization strategy? Our new guide walks you through how to organize and store your customer data for personalization.

[INST] The SaaS guide to website personalization [/INST]

Ben Johnson is the Head of Content at Proof, a Y Combinator-backed startup that provides real-time social proof and personalization software. Over 18,000 sites trust Proof to help increase their conversion rates. We recommend Proof’s impressive blog and their podcast, Scale or Die. Thanks Ben! Personalization — it’s nothing new. In fact, we’ve seen the tactic at play in the real-world for years. Here are a few examples of when you might have encountered a personalized experience in your non-Internet life: When you check into a fancy, 5-star hotel and your favorite snacks are waiting for you upon your pillow alongside a handwritten note from the staff. At the local coffee shop, when the barista knows your order and can write your name on the cup before you even say it. A handmade custom shirt — tailored and monogrammed just for you. Over the past several years, this level of human attention that we’ve seen offline has made its way online, making the Internet a more delightful and efficient place to be a consumer. Nowadays, the top SaaS marketers are turning to personalization to increase their conversion rates, improve customer happiness, and increase the number of MQLs for their brand. Personalization defined So, what is personalization? In marketing, personalization is the concept of building a customized experience for each visitor. Rather than showing a one-size-fits page to a visitor — you use available first-party (your own data) and third-party data (enriched from an external source) to make the page more relevant for each and every person that lands on-site. This can be accomplished by adjusting headlines, CTAs, subheadings, value props, and so much more. Really any piece of content can be swapped out in real-time for a more relevant one. Here’s a quick example to better explain the concept. On our homepage at Proof, we have a generic headline that we display when we don’t have information on a visitor’s industry: But when we are able to accurately identify a visitor, we can adjust the headline to seem more relevant for our visitor. Here’s one variation for E-commerce visitors that toutes Proof as “the most powerful social proof platform for E-commerce brands.” By running this personalization experiment with a handful of other tests, we’ve seen a 51% increase in demo registrations and a 31% increase in new trials. Personalization can occur across mediums — from ad copy to landing pages to mobile apps to the web. But for SaaS businesses, the most notable and important instance of personalization occurs on the web and in-app. We’ll talk through some examples you can launch on your site later in this post. Why personalization matters for SaaS in 2019 While personalization has been around in the offline world for decades, it’s emergence to the online world is pretty recent. In the past, marketers wanting to personalize their sites faced a few big problems: Not enough data for personalization: For businesses that want to personalize, data is key. Until 3rd party data-sources such as FullContact, Clearbit, and Datanyze emerged, there was no easy way to pull visitor data. Now with an IP address or email, you can perform a real-time pull of a plethora of information around a visitor. Difficult to map customer journey: Even if you were able to collect information about a visitor, it was hard to have it update across your CRM, on your site, and in your app. Luckily, in 2019, software tools are a whole lot better at integrating and talking to one another. Plus, you have tools such as Segment that can help create a single place to store and aggregate your date from various endpoints. Time and resource constraints: Personalization is easier than ever before — but until platforms like Experiences emerged, these tactics were hard to implement and most companies didn’t have the engineering time to commit to personalization. With an influx of integrations and little-engineering-required software for personalization, this has all changed. So, you’re probably thinking, “this is great and all — but is it worth my time?” Here are a few reasons we think it’s pretty appealing for SaaS marketers looking to improve their conversion rates, lifetime value, or other metrics in 2019: Personalization reduces acquisition costs as much as 50%, lifts revenues by 5-15%, and increases the efficiency of marketing spend by 10-30% 77% of consumers have chosen, recommended or paid more for a brand that offers a personalized service or experience 87% of companies see a lift in key growth metrics (such as conversion rates, engagement rates, or average order value) when they employ personalization 59% of consumers say that personalization plays an impact in their buying decisions It’s also important to note: SaaS customers are some of the earliest adopters and most scrupulous consumers. You’ve likely seen that SaaS companies are amongst the first to launch new tactics, try out software, and run growth experiments — a testing mentality is just part of the role. For these reasons, your SaaS customers are going to expect personalization and hyper-relevant marketing. If you’re not already personalizing, it’s something you should consider launching on your site today. It creates a better customer experience and leads to improved metrics for your marketing team. 3 personalization experiments you can launch today Curious how exactly to integrate personalization on your site? Here a few quick ideas of experiments you can start running on your site today: Swap out CTAs Based on your visitors stage in the sales cycle, you’ll want to adjust your headlines, subheadlines, and imagery to appeal to your users’ unique properties. An even more powerful method for SaaS businesses is to personalize a CTA to push the visitor to the most relevant next action: Book a demo: On a visitor’s first visit to your site, push them towards a demo signup to show them exactly what your SaaS can do for their site. Start a trial: Once a visitor has watched a demo, it feels sloppy to push them back to the same demo tape. Instead, push them to signup for a free trial. Log in: If a customer starts their trial (or continues on to become a customer), the most relevant action is to push them towards logging in to their account. Match ad headlines to your landing pages It might seem like a simple task, but you’d be surprised by the number of SaaS businesses that don’t personalize their landing pages to match their ads. By taking the headline you’re using on Facebook, Adwords, or other ad platforms — you can easily adjust your pages to match the landing page to what a visitor is expecting to see when they click an ad. And the genius part of this tactic is you can create one optimized page — and simply swap out elements on the page based on a visitor’s unique qualities. Here’s an example from BigCommerce of a Facebook ad they’re running with the headline “Start Your Online Business Today. It’s Easy.” Then, behind this ad is a landing page that perfectly matches the ad you clicked on. Welcome back existing customers If you just launched a new website, one of the most pleasant ways to surprise and delight customers is to deploy a personalization that adjusts the homepage when a visitor lands. If a visitor has already converted and started to pay your business, why do most sites still push towards pitching their software and pretend like they’re running an outbound sales cycle? It’s sloppy and reflects badly on your brand. Gusto provides an incredible example of how to adjust the homepage to account for whether a visitor is a customer or not. Here’s the page you’ll see if you’re visiting without a Gusto account. But once you visit as a customer, the page adjusts. The headline adjusts to say “Welcome back,” the signup form disappears, and the CTA reads “Sign in.” The result? A more human experience for visitors to the site. If you’re looking for a lightweight way to get started with this tactic, you can use pretty much any live chat software to customize the messaging for return visitors. You can get more advanced with your message targeting, but it’s normally simple to set up a “welcome back” message based on the number of site visits. Image source How exactly do you launch personalization experiments You might be thinking — I’m ready to start personalizing but I simply don’t know where to begin. Luckily for you, there’s a whole host of software tools that can help you launch delightful experiences and increase conversions for your SaaS. In terms of data, you’ll need to utilize a third-party data provider such as Clearbit, Datanyze, or FullContact to enrich the amount of information you receive from a visitor. Then, you’ll also want to utilize a data integration tool such as Segment or Hull.io to manage that customer data. To easily deploy these online experiments, Proof Experiences is our a new personalization platform built exclusively for B2B SaaS companies. With our visual editor, you can quickly and easily deploy unique experiences for your visitors without having to bring in your engineering team. It’s fast, easy, and powerful. Interested in learning more about how to use the tools mentioned above in a personalization strategy? Our new guide walks you through how to organize and store your customer data for personalization.

<sys> [INST] The SaaS guide to website personalization [/INST] Ben Johnson is the Head of Content at Proof, a Y Combinator-backed startup that provides real-time social proof and personalization software. Over 18,000 sites trust Proof to help increase their conversion rates. We recommend Proof’s impressive blog and their podcast, Scale or Die. Thanks Ben! Personalization — it’s nothing new. In fact, we’ve seen the tactic at play in the real-world for years. Here are a few examples of when you might have encountered a personalized experience in your non-Internet life: When you check into a fancy, 5-star hotel and your favorite snacks are waiting for you upon your pillow alongside a handwritten note from the staff. At the local coffee shop, when the barista knows your order and can write your name on the cup before you even say it. A handmade custom shirt — tailored and monogrammed just for you. Over the past several years, this level of human attention that we’ve seen offline has made its way online, making the Internet a more delightful and efficient place to be a consumer. Nowadays, the top SaaS marketers are turning to personalization to increase their conversion rates, improve customer happiness, and increase the number of MQLs for their brand. Personalization defined So, what is personalization? In marketing, personalization is the concept of building a customized experience for each visitor. Rather than showing a one-size-fits page to a visitor — you use available first-party (your own data) and third-party data (enriched from an external source) to make the page more relevant for each and every person that lands on-site. This can be accomplished by adjusting headlines, CTAs, subheadings, value props, and so much more. Really any piece of content can be swapped out in real-time for a more relevant one. Here’s a quick example to better explain the concept. On our homepage at Proof, we have a generic headline that we display when we don’t have information on a visitor’s industry: But when we are able to accurately identify a visitor, we can adjust the headline to seem more relevant for our visitor. Here’s one variation for E-commerce visitors that toutes Proof as “the most powerful social proof platform for E-commerce brands.” By running this personalization experiment with a handful of other tests, we’ve seen a 51% increase in demo registrations and a 31% increase in new trials. Personalization can occur across mediums — from ad copy to landing pages to mobile apps to the web. But for SaaS businesses, the most notable and important instance of personalization occurs on the web and in-app. We’ll talk through some examples you can launch on your site later in this post. Why personalization matters for SaaS in 2019 While personalization has been around in the offline world for decades, it’s emergence to the online world is pretty recent. In the past, marketers wanting to personalize their sites faced a few big problems: Not enough data for personalization: For businesses that want to personalize, data is key. Until 3rd party data-sources such as FullContact, Clearbit, and Datanyze emerged, there was no easy way to pull visitor data. Now with an IP address or email, you can perform a real-time pull of a plethora of information around a visitor. Difficult to map customer journey: Even if you were able to collect information about a visitor, it was hard to have it update across your CRM, on your site, and in your app. Luckily, in 2019, software tools are a whole lot better at integrating and talking to one another. Plus, you have tools such as Segment that can help create a single place to store and aggregate your date from various endpoints. Time and resource constraints: Personalization is easier than ever before — but until platforms like Experiences emerged, these tactics were hard to implement and most companies didn’t have the engineering time to commit to personalization. With an influx of integrations and little-engineering-required software for personalization, this has all changed. So, you’re probably thinking, “this is great and all — but is it worth my time?” Here are a few reasons we think it’s pretty appealing for SaaS marketers looking to improve their conversion rates, lifetime value, or other metrics in 2019: Personalization reduces acquisition costs as much as 50%, lifts revenues by 5-15%, and increases the efficiency of marketing spend by 10-30% 77% of consumers have chosen, recommended or paid more for a brand that offers a personalized service or experience 87% of companies see a lift in key growth metrics (such as conversion rates, engagement rates, or average order value) when they employ personalization 59% of consumers say that personalization plays an impact in their buying decisions It’s also important to note: SaaS customers are some of the earliest adopters and most scrupulous consumers. You’ve likely seen that SaaS companies are amongst the first to launch new tactics, try out software, and run growth experiments — a testing mentality is just part of the role. For these reasons, your SaaS customers are going to expect personalization and hyper-relevant marketing. If you’re not already personalizing, it’s something you should consider launching on your site today. It creates a better customer experience and leads to improved metrics for your marketing team. 3 personalization experiments you can launch today Curious how exactly to integrate personalization on your site? Here a few quick ideas of experiments you can start running on your site today: Swap out CTAs Based on your visitors stage in the sales cycle, you’ll want to adjust your headlines, subheadlines, and imagery to appeal to your users’ unique properties. An even more powerful method for SaaS businesses is to personalize a CTA to push the visitor to the most relevant next action: Book a demo: On a visitor’s first visit to your site, push them towards a demo signup to show them exactly what your SaaS can do for their site. Start a trial: Once a visitor has watched a demo, it feels sloppy to push them back to the same demo tape. Instead, push them to signup for a free trial. Log in: If a customer starts their trial (or continues on to become a customer), the most relevant action is to push them towards logging in to their account. Match ad headlines to your landing pages It might seem like a simple task, but you’d be surprised by the number of SaaS businesses that don’t personalize their landing pages to match their ads. By taking the headline you’re using on Facebook, Adwords, or other ad platforms — you can easily adjust your pages to match the landing page to what a visitor is expecting to see when they click an ad. And the genius part of this tactic is you can create one optimized page — and simply swap out elements on the page based on a visitor’s unique qualities. Here’s an example from BigCommerce of a Facebook ad they’re running with the headline “Start Your Online Business Today. It’s Easy.” Then, behind this ad is a landing page that perfectly matches the ad you clicked on. Welcome back existing customers If you just launched a new website, one of the most pleasant ways to surprise and delight customers is to deploy a personalization that adjusts the homepage when a visitor lands. If a visitor has already converted and started to pay your business, why do most sites still push towards pitching their software and pretend like they’re running an outbound sales cycle? It’s sloppy and reflects badly on your brand. Gusto provides an incredible example of how to adjust the homepage to account for whether a visitor is a customer or not. Here’s the page you’ll see if you’re visiting without a Gusto account. But once you visit as a customer, the page adjusts. The headline adjusts to say “Welcome back,” the signup form disappears, and the CTA reads “Sign in.” The result? A more human experience for visitors to the site. If you’re looking for a lightweight way to get started with this tactic, you can use pretty much any live chat software to customize the messaging for return visitors. You can get more advanced with your message targeting, but it’s normally simple to set up a “welcome back” message based on the number of site visits. Image source How exactly do you launch personalization experiments You might be thinking — I’m ready to start personalizing but I simply don’t know where to begin. Luckily for you, there’s a whole host of software tools that can help you launch delightful experiences and increase conversions for your SaaS. In terms of data, you’ll need to utilize a third-party data provider such as Clearbit, Datanyze, or FullContact to enrich the amount of information you receive from a visitor. Then, you’ll also want to utilize a data integration tool such as Segment or Hull.io to manage that customer data. To easily deploy these online experiments, Proof Experiences is our a new personalization platform built exclusively for B2B SaaS companies. With our visual editor, you can quickly and easily deploy unique experiences for your visitors without having to bring in your engineering team. It’s fast, easy, and powerful. Interested in learning more about how to use the tools mentioned above in a personalization strategy? Our new guide walks you through how to organize and store your customer data for personalization. </sys

The Ultimate Cohort Analysis Cheat Sheet. Presenting: The Ultimate Cohort Analysis Cheat Sheet A perfect resource for the following information: What is a Cohort Analysis? Why are they useful? How to read a Cohort Analysis chart Making Cohorts more useful with segmentation And more! Download for free Find it useful? Please share! Big thanks to David Skok, Tomasz Tunguz and our investor Christoph Janz who let us use their cohort diagrams and for providing such fantastic resources on SaaS metrics for us to draw inspiration from. Learn more about cohort analysis Get cohort analysis with one click – for Stripe, Braintree, Chargify and Recurly.

[INST] The Ultimate Cohort Analysis Cheat Sheet [/INST]

Presenting: The Ultimate Cohort Analysis Cheat Sheet A perfect resource for the following information: What is a Cohort Analysis? Why are they useful? How to read a Cohort Analysis chart Making Cohorts more useful with segmentation And more! Download for free Find it useful? Please share! Big thanks to David Skok, Tomasz Tunguz and our investor Christoph Janz who let us use their cohort diagrams and for providing such fantastic resources on SaaS metrics for us to draw inspiration from. Learn more about cohort analysis Get cohort analysis with one click – for Stripe, Braintree, Chargify and Recurly.

<sys> [INST] The Ultimate Cohort Analysis Cheat Sheet [/INST] Presenting: The Ultimate Cohort Analysis Cheat Sheet A perfect resource for the following information: What is a Cohort Analysis? Why are they useful? How to read a Cohort Analysis chart Making Cohorts more useful with segmentation And more! Download for free Find it useful? Please share! Big thanks to David Skok, Tomasz Tunguz and our investor Christoph Janz who let us use their cohort diagrams and for providing such fantastic resources on SaaS metrics for us to draw inspiration from. Learn more about cohort analysis Get cohort analysis with one click – for Stripe, Braintree, Chargify and Recurly. </sys

How to Build a Community to Grow Your SaaS Company. Lots of SaaS companies talk about their communities. Welcome to the [company] community, they say on Twitter, when a new customer comes on board. Thanks to our community of early adopters, they write in a blog post. But what most of these companies really have is a mailing list — people they’ve largely never met who are happy enough to receive emails passively, without ever really doing much. There’s nothing wrong with that, of course — the right mailing list can be the foundation of inbound growth. But an actual community of active and engaged people, in conversation not just with the company but with each other, is hard to create, harder to build and just as difficult to keep. But creating a genuine community can be orders of magnitude more valuable than other growth channels: people getting value from each other, and coming back every day because they want to, rather than being retargeted, creates a priceless brand association. You don’t have to look hard to find growth success stories driven by community — Notion and Figma being two of the most prominent. Marketing to haystack needles At Juro, we’re building the all-in-one contract automation platform for visionary General Counsels to create, agree and manage contracts in one unified workspace. Our challenge is the same one that plenty of early-stage B2B SaaS companies confront: our ideal customer persona (ICP) is extraordinarily narrow. Juro is loved by lean legal teams at venture-backed tech companies between series A and D — typically marketplaces or fellow SaaS companies. Ideally, they’re looking to automate non-disclosure agreements or MSAs for commercial teams around the business. That’s a pretty specific bunch of people, and one of their defining characteristics is that they’re incredibly busy. Finding them, capturing their details, nurturing, and ultimately selling to them at scale requires incredible precision for a small team. So instead of scouring the internet to find these needles in haystacks, we decided to just build the perfect home for them and make them hang out there. If we provided an exclusive experience, crucially imitating the peer networking they’d been missing during the pandemic, we knew we could put ourselves at the center of their lives and increase our stickiness as a brand. We set ourselves an aggressive deadline to launch a formalized community and got to work. Starting with why Our founders are huge believers in starting with why, and I had zero chance of getting buy-in without a clear articulation of why we were doing this, a short and medium-term strategy, and some clearly defined success metrics. The first things I tackled were: Why create a community? This was a fairly easy case to make — when we analyzed won deals, there was a strong correlation between sales prospects that had met our team in person, and the deal closing. Simply put, making friends was good for growth. Discovery: I spoke at length with several other community builders to work out how much of my life it would take over. As Director of Content, I also look after our owned channels and content, so I’m already pushed for time. Competitive landscape: what other communities were out there for our target market? If another group already had it sewn up, I needed to weigh up the effort versus the reward. Once I was happy that we should still go ahead, the next steps were to: Define the community: what are the channels and artifacts — what actually are we building? For us, this was a Slack group, a jobs board, a weekly newsletter, an events program, and some branding. Roles for all of these were assigned. Define the entry criteria: our community needed to be exclusive and invite-only. Our ICPs don’t like being bothered, but theirs is also a lonely role — we wanted to make sure members genuinely were peers and could help each other. Create the entry mechanism: to implement this, we built a Typeform that effectively qualified applicants by their role and company type. We also used it to ask a couple of open-ended questions that gave us ideas for events and content. Create the onboarding experience: applicants were sent through one of two email workflows, depending on their answers — either a polite rejection or an acceptance email with the Slack onboarding link. I was (and remain) the ultimate arbiter of who we let in. We need a little flexibility to let in customers who don’t exactly meet the ICP criteria, but who we obviously want to treat as VIPs. We also made a firm decision to ban our sales team from the community. To work, it had to be all about value — if members started getting industrious sales reps sliding into their DMs and trying to book meetings, we knew it would turn people off. All that decided, we were ready to launch. But where would we find the initial members? Recruitment Early-stage recruitment for a community is a bit like early-stage sales — start with the soft targets. We wrote highly personalized emails to a select group of existing customers, friends of the company, thought leaders we’d featured in content, and so on. We had to manage expectations — they needed to know they’d be walking into an empty Slack group — and let them know we appreciated their support while we built it up around them. To my amazement, they all said yes. 30 senior lawyers joined without blinking and started chatting about parenting during the lockdown in the Slack group. This was a great validation of our hypothesis that scaleup legal can be pretty lonely, and they were missing the endless series of law firm and vendor breakfasts they’d get if there was no COVID. The next milestone was crucial, and the difference between a mailing list and a community — events. If people don’t actually show up, in person (albeit virtually), at an appointed time, and talk to each other, then you don’t really have a community. Example of a Juro community event The first few events were nerve-wracking and painful for me. More than once I sat alone on Zoom at two minutes past the hour wondering if anyone would dial in. I use Lu.ma to create and host the events, and I was determined to run them as meetings, not webinars — so people would feel encouraged to switch on cameras and talk to each other. The downside of this was that if there were only two of us on the call, they’d know. The way to de-risk this was to sprint from 30 to 100 members. To make this happen I canceled two days of meetings and spent all my time sending (and chasing) extremely personalized emails to perfect-fit prospects. It worked. By the end of the first month, I had 100 members, including the legal teams of UiPath, TrustPilot, Monzo, Revolut, Stripe, and various other wishlist companies I’d assumed would ignore me. By now we have 200 members, and I run all our events with a headline speaker (or two) that takes the pressure off me as the host. All our events are closed-door — non-members aren’t allowed, and when they try to join (having been forwarded the link by a member), then I can refuse their registration in Luma. Of course, if they meet the entry criteria, that refusal is accompanied by a personalized invitation to join the community. This is what the tech stack for running a community looks like for us: Typeform: for applications and feedback HubSpot: for emails, records management, and lead scoring Luma: for frictionless Zoom events Figma: for self-serve event banners Notion: for the jobs board … and of course, Slack, where it all happens. Results As a SaaS marketer, I took on this huge burden partly to try and increase brand loyalty but ultimately to turn contacts into MQLs, MQLs into SQLs, and SQLs into customers. So did it work? In the three months since we launched, three members have made the hallowed journey to the #juro-customers channel. This outperformed our expectations as the sales cycle for legal software is usually much longer. 10 more are currently in active sales conversations. Looking at the calculus of contract value versus lead volume, this more than validates community as a growth channel — and to borrow the startup cliche, we’re only just getting started. Beyond revenue — if we allow ourselves to consider such a thing, for a moment — there were significant benefits I hadn’t anticipated. I’m of the firm belief that there’s almost nothing more valuable for anyone in a startup to do than talk to customers, but what’s been great about the community is the extent to which I get to talk to ideal customers, without the pressure of a commercial conversation about contract management looming in the background. If people want to talk to sales they can ask — and they do — but most of the time they’re chatting about their lives, their jobs, their pain points, and their priorities for the year ahead. Pure gold. It’s also rewarding to see them help each other out — sharing a contract template, or recommending a patents lawyer in France, or some compliance software to try. The real proof point of a successful community is that members get value even if you get out of the way. Lessons learned The main lesson I learned is that we should have done this a year ago. Juro already had an informal community of customers, prospects, and the thought leaders we feature in our content. We’d never made time to build a place just for them, but in hindsight, it was an obvious way to cash in all the goodwill we’d built through the brand. We’re now on a sprint to get to 500 members, which is a huge time investment — but we can be confident enough in the early results that it’ll be well worth it, for both sides. In the words of my CEO, Richard, if you’re selling something radical, you need to find believers in the product — visionaries who are prepared to change the way they work. Traditional inbound marketing methods rarely work in finding these people — or at least not quickly. By building a community of like-minded lawyers, we are building a group of evangelists for our vision and product. What could be a better use of my time?

[INST] How to Build a Community to Grow Your SaaS Company [/INST]

Lots of SaaS companies talk about their communities. Welcome to the [company] community, they say on Twitter, when a new customer comes on board. Thanks to our community of early adopters, they write in a blog post. But what most of these companies really have is a mailing list — people they’ve largely never met who are happy enough to receive emails passively, without ever really doing much. There’s nothing wrong with that, of course — the right mailing list can be the foundation of inbound growth. But an actual community of active and engaged people, in conversation not just with the company but with each other, is hard to create, harder to build and just as difficult to keep. But creating a genuine community can be orders of magnitude more valuable than other growth channels: people getting value from each other, and coming back every day because they want to, rather than being retargeted, creates a priceless brand association. You don’t have to look hard to find growth success stories driven by community — Notion and Figma being two of the most prominent. Marketing to haystack needles At Juro, we’re building the all-in-one contract automation platform for visionary General Counsels to create, agree and manage contracts in one unified workspace. Our challenge is the same one that plenty of early-stage B2B SaaS companies confront: our ideal customer persona (ICP) is extraordinarily narrow. Juro is loved by lean legal teams at venture-backed tech companies between series A and D — typically marketplaces or fellow SaaS companies. Ideally, they’re looking to automate non-disclosure agreements or MSAs for commercial teams around the business. That’s a pretty specific bunch of people, and one of their defining characteristics is that they’re incredibly busy. Finding them, capturing their details, nurturing, and ultimately selling to them at scale requires incredible precision for a small team. So instead of scouring the internet to find these needles in haystacks, we decided to just build the perfect home for them and make them hang out there. If we provided an exclusive experience, crucially imitating the peer networking they’d been missing during the pandemic, we knew we could put ourselves at the center of their lives and increase our stickiness as a brand. We set ourselves an aggressive deadline to launch a formalized community and got to work. Starting with why Our founders are huge believers in starting with why, and I had zero chance of getting buy-in without a clear articulation of why we were doing this, a short and medium-term strategy, and some clearly defined success metrics. The first things I tackled were: Why create a community? This was a fairly easy case to make — when we analyzed won deals, there was a strong correlation between sales prospects that had met our team in person, and the deal closing. Simply put, making friends was good for growth. Discovery: I spoke at length with several other community builders to work out how much of my life it would take over. As Director of Content, I also look after our owned channels and content, so I’m already pushed for time. Competitive landscape: what other communities were out there for our target market? If another group already had it sewn up, I needed to weigh up the effort versus the reward. Once I was happy that we should still go ahead, the next steps were to: Define the community: what are the channels and artifacts — what actually are we building? For us, this was a Slack group, a jobs board, a weekly newsletter, an events program, and some branding. Roles for all of these were assigned. Define the entry criteria: our community needed to be exclusive and invite-only. Our ICPs don’t like being bothered, but theirs is also a lonely role — we wanted to make sure members genuinely were peers and could help each other. Create the entry mechanism: to implement this, we built a Typeform that effectively qualified applicants by their role and company type. We also used it to ask a couple of open-ended questions that gave us ideas for events and content. Create the onboarding experience: applicants were sent through one of two email workflows, depending on their answers — either a polite rejection or an acceptance email with the Slack onboarding link. I was (and remain) the ultimate arbiter of who we let in. We need a little flexibility to let in customers who don’t exactly meet the ICP criteria, but who we obviously want to treat as VIPs. We also made a firm decision to ban our sales team from the community. To work, it had to be all about value — if members started getting industrious sales reps sliding into their DMs and trying to book meetings, we knew it would turn people off. All that decided, we were ready to launch. But where would we find the initial members? Recruitment Early-stage recruitment for a community is a bit like early-stage sales — start with the soft targets. We wrote highly personalized emails to a select group of existing customers, friends of the company, thought leaders we’d featured in content, and so on. We had to manage expectations — they needed to know they’d be walking into an empty Slack group — and let them know we appreciated their support while we built it up around them. To my amazement, they all said yes. 30 senior lawyers joined without blinking and started chatting about parenting during the lockdown in the Slack group. This was a great validation of our hypothesis that scaleup legal can be pretty lonely, and they were missing the endless series of law firm and vendor breakfasts they’d get if there was no COVID. The next milestone was crucial, and the difference between a mailing list and a community — events. If people don’t actually show up, in person (albeit virtually), at an appointed time, and talk to each other, then you don’t really have a community. Example of a Juro community event The first few events were nerve-wracking and painful for me. More than once I sat alone on Zoom at two minutes past the hour wondering if anyone would dial in. I use Lu.ma to create and host the events, and I was determined to run them as meetings, not webinars — so people would feel encouraged to switch on cameras and talk to each other. The downside of this was that if there were only two of us on the call, they’d know. The way to de-risk this was to sprint from 30 to 100 members. To make this happen I canceled two days of meetings and spent all my time sending (and chasing) extremely personalized emails to perfect-fit prospects. It worked. By the end of the first month, I had 100 members, including the legal teams of UiPath, TrustPilot, Monzo, Revolut, Stripe, and various other wishlist companies I’d assumed would ignore me. By now we have 200 members, and I run all our events with a headline speaker (or two) that takes the pressure off me as the host. All our events are closed-door — non-members aren’t allowed, and when they try to join (having been forwarded the link by a member), then I can refuse their registration in Luma. Of course, if they meet the entry criteria, that refusal is accompanied by a personalized invitation to join the community. This is what the tech stack for running a community looks like for us: Typeform: for applications and feedback HubSpot: for emails, records management, and lead scoring Luma: for frictionless Zoom events Figma: for self-serve event banners Notion: for the jobs board … and of course, Slack, where it all happens. Results As a SaaS marketer, I took on this huge burden partly to try and increase brand loyalty but ultimately to turn contacts into MQLs, MQLs into SQLs, and SQLs into customers. So did it work? In the three months since we launched, three members have made the hallowed journey to the #juro-customers channel. This outperformed our expectations as the sales cycle for legal software is usually much longer. 10 more are currently in active sales conversations. Looking at the calculus of contract value versus lead volume, this more than validates community as a growth channel — and to borrow the startup cliche, we’re only just getting started. Beyond revenue — if we allow ourselves to consider such a thing, for a moment — there were significant benefits I hadn’t anticipated. I’m of the firm belief that there’s almost nothing more valuable for anyone in a startup to do than talk to customers, but what’s been great about the community is the extent to which I get to talk to ideal customers, without the pressure of a commercial conversation about contract management looming in the background. If people want to talk to sales they can ask — and they do — but most of the time they’re chatting about their lives, their jobs, their pain points, and their priorities for the year ahead. Pure gold. It’s also rewarding to see them help each other out — sharing a contract template, or recommending a patents lawyer in France, or some compliance software to try. The real proof point of a successful community is that members get value even if you get out of the way. Lessons learned The main lesson I learned is that we should have done this a year ago. Juro already had an informal community of customers, prospects, and the thought leaders we feature in our content. We’d never made time to build a place just for them, but in hindsight, it was an obvious way to cash in all the goodwill we’d built through the brand. We’re now on a sprint to get to 500 members, which is a huge time investment — but we can be confident enough in the early results that it’ll be well worth it, for both sides. In the words of my CEO, Richard, if you’re selling something radical, you need to find believers in the product — visionaries who are prepared to change the way they work. Traditional inbound marketing methods rarely work in finding these people — or at least not quickly. By building a community of like-minded lawyers, we are building a group of evangelists for our vision and product. What could be a better use of my time?

<sys> [INST] How to Build a Community to Grow Your SaaS Company [/INST] Lots of SaaS companies talk about their communities. Welcome to the [company] community, they say on Twitter, when a new customer comes on board. Thanks to our community of early adopters, they write in a blog post. But what most of these companies really have is a mailing list — people they’ve largely never met who are happy enough to receive emails passively, without ever really doing much. There’s nothing wrong with that, of course — the right mailing list can be the foundation of inbound growth. But an actual community of active and engaged people, in conversation not just with the company but with each other, is hard to create, harder to build and just as difficult to keep. But creating a genuine community can be orders of magnitude more valuable than other growth channels: people getting value from each other, and coming back every day because they want to, rather than being retargeted, creates a priceless brand association. You don’t have to look hard to find growth success stories driven by community — Notion and Figma being two of the most prominent. Marketing to haystack needles At Juro, we’re building the all-in-one contract automation platform for visionary General Counsels to create, agree and manage contracts in one unified workspace. Our challenge is the same one that plenty of early-stage B2B SaaS companies confront: our ideal customer persona (ICP) is extraordinarily narrow. Juro is loved by lean legal teams at venture-backed tech companies between series A and D — typically marketplaces or fellow SaaS companies. Ideally, they’re looking to automate non-disclosure agreements or MSAs for commercial teams around the business. That’s a pretty specific bunch of people, and one of their defining characteristics is that they’re incredibly busy. Finding them, capturing their details, nurturing, and ultimately selling to them at scale requires incredible precision for a small team. So instead of scouring the internet to find these needles in haystacks, we decided to just build the perfect home for them and make them hang out there. If we provided an exclusive experience, crucially imitating the peer networking they’d been missing during the pandemic, we knew we could put ourselves at the center of their lives and increase our stickiness as a brand. We set ourselves an aggressive deadline to launch a formalized community and got to work. Starting with why Our founders are huge believers in starting with why, and I had zero chance of getting buy-in without a clear articulation of why we were doing this, a short and medium-term strategy, and some clearly defined success metrics. The first things I tackled were: Why create a community? This was a fairly easy case to make — when we analyzed won deals, there was a strong correlation between sales prospects that had met our team in person, and the deal closing. Simply put, making friends was good for growth. Discovery: I spoke at length with several other community builders to work out how much of my life it would take over. As Director of Content, I also look after our owned channels and content, so I’m already pushed for time. Competitive landscape: what other communities were out there for our target market? If another group already had it sewn up, I needed to weigh up the effort versus the reward. Once I was happy that we should still go ahead, the next steps were to: Define the community: what are the channels and artifacts — what actually are we building? For us, this was a Slack group, a jobs board, a weekly newsletter, an events program, and some branding. Roles for all of these were assigned. Define the entry criteria: our community needed to be exclusive and invite-only. Our ICPs don’t like being bothered, but theirs is also a lonely role — we wanted to make sure members genuinely were peers and could help each other. Create the entry mechanism: to implement this, we built a Typeform that effectively qualified applicants by their role and company type. We also used it to ask a couple of open-ended questions that gave us ideas for events and content. Create the onboarding experience: applicants were sent through one of two email workflows, depending on their answers — either a polite rejection or an acceptance email with the Slack onboarding link. I was (and remain) the ultimate arbiter of who we let in. We need a little flexibility to let in customers who don’t exactly meet the ICP criteria, but who we obviously want to treat as VIPs. We also made a firm decision to ban our sales team from the community. To work, it had to be all about value — if members started getting industrious sales reps sliding into their DMs and trying to book meetings, we knew it would turn people off. All that decided, we were ready to launch. But where would we find the initial members? Recruitment Early-stage recruitment for a community is a bit like early-stage sales — start with the soft targets. We wrote highly personalized emails to a select group of existing customers, friends of the company, thought leaders we’d featured in content, and so on. We had to manage expectations — they needed to know they’d be walking into an empty Slack group — and let them know we appreciated their support while we built it up around them. To my amazement, they all said yes. 30 senior lawyers joined without blinking and started chatting about parenting during the lockdown in the Slack group. This was a great validation of our hypothesis that scaleup legal can be pretty lonely, and they were missing the endless series of law firm and vendor breakfasts they’d get if there was no COVID. The next milestone was crucial, and the difference between a mailing list and a community — events. If people don’t actually show up, in person (albeit virtually), at an appointed time, and talk to each other, then you don’t really have a community. Example of a Juro community event The first few events were nerve-wracking and painful for me. More than once I sat alone on Zoom at two minutes past the hour wondering if anyone would dial in. I use Lu.ma to create and host the events, and I was determined to run them as meetings, not webinars — so people would feel encouraged to switch on cameras and talk to each other. The downside of this was that if there were only two of us on the call, they’d know. The way to de-risk this was to sprint from 30 to 100 members. To make this happen I canceled two days of meetings and spent all my time sending (and chasing) extremely personalized emails to perfect-fit prospects. It worked. By the end of the first month, I had 100 members, including the legal teams of UiPath, TrustPilot, Monzo, Revolut, Stripe, and various other wishlist companies I’d assumed would ignore me. By now we have 200 members, and I run all our events with a headline speaker (or two) that takes the pressure off me as the host. All our events are closed-door — non-members aren’t allowed, and when they try to join (having been forwarded the link by a member), then I can refuse their registration in Luma. Of course, if they meet the entry criteria, that refusal is accompanied by a personalized invitation to join the community. This is what the tech stack for running a community looks like for us: Typeform: for applications and feedback HubSpot: for emails, records management, and lead scoring Luma: for frictionless Zoom events Figma: for self-serve event banners Notion: for the jobs board … and of course, Slack, where it all happens. Results As a SaaS marketer, I took on this huge burden partly to try and increase brand loyalty but ultimately to turn contacts into MQLs, MQLs into SQLs, and SQLs into customers. So did it work? In the three months since we launched, three members have made the hallowed journey to the #juro-customers channel. This outperformed our expectations as the sales cycle for legal software is usually much longer. 10 more are currently in active sales conversations. Looking at the calculus of contract value versus lead volume, this more than validates community as a growth channel — and to borrow the startup cliche, we’re only just getting started. Beyond revenue — if we allow ourselves to consider such a thing, for a moment — there were significant benefits I hadn’t anticipated. I’m of the firm belief that there’s almost nothing more valuable for anyone in a startup to do than talk to customers, but what’s been great about the community is the extent to which I get to talk to ideal customers, without the pressure of a commercial conversation about contract management looming in the background. If people want to talk to sales they can ask — and they do — but most of the time they’re chatting about their lives, their jobs, their pain points, and their priorities for the year ahead. Pure gold. It’s also rewarding to see them help each other out — sharing a contract template, or recommending a patents lawyer in France, or some compliance software to try. The real proof point of a successful community is that members get value even if you get out of the way. Lessons learned The main lesson I learned is that we should have done this a year ago. Juro already had an informal community of customers, prospects, and the thought leaders we feature in our content. We’d never made time to build a place just for them, but in hindsight, it was an obvious way to cash in all the goodwill we’d built through the brand. We’re now on a sprint to get to 500 members, which is a huge time investment — but we can be confident enough in the early results that it’ll be well worth it, for both sides. In the words of my CEO, Richard, if you’re selling something radical, you need to find believers in the product — visionaries who are prepared to change the way they work. Traditional inbound marketing methods rarely work in finding these people — or at least not quickly. By building a community of like-minded lawyers, we are building a group of evangelists for our vision and product. What could be a better use of my time? </sys

How much of your MRR is slipping away?. Many people love using Intercom as a tool for understanding how customers are using their product, providing awesome customer service and generally being closer to them. I’m guessing a lot of people see the Slipping Away segment that’s built into the product and shown in the top menu bar: Wait… What?! Disaster! 784 users are “slipping away”! We must take action. Someone take action. But wait a minute. What if you could actually know what those 784 users represented for your business in terms of MRR? This way, you could actually see that recurring revenue that you’re slowly losing grasp of, as it gently drips from the leaky churn-ridden bucket that is your subscription business. You can get this data. Using a combination of Intercom, ChartMogul and Zapier, we can view all of the relevant SaaS metrics for the customers in this segment. Allow me to show you how… You’ll need: An Intercom account, with users (duh). A ChartMogul account (grab a free trial here and import your data from your billing system). A Zapier account (Zapier connects events in Intercom with ChartMogul data). Step 1: Activate the Zapier Zap Zapier’s integration with ChartMogul means that you can connect all kinds of other platforms to your ChartMogul data. In this case, we’re going to use a ‘Zap’ (Zapier app) which connects ChartMogul to Intercom. Here’s the one you want: Go to the page for the Zap, and click “Make this Zap!” Connect your Intercom and Zapier accounts, providing the required information. When you get to the Action Fields step, follow the instructions to choose Tag Name. Useremail should already be selected in the second text field. Click Save + finish! The Zap will be enabled after a few seconds of behind-the-scenes magic. Step 2: Tag the Slipping Away Intercom users Now that we’ve enabled the above Zap, any user tag added in Intercom will be instantly pushed to the corresponding user in ChartMogul. Cool, huh? Let’s do some bulk tagging. Log in to Intercom, and click the Slipping Away menu item. You’ll see that by default, Intercom uses the following definition of “Slipping Away”: “User was last seen more than 10 days ago AND less than 60 days ago” If you can define this better for your own business, now is the time to tweak it. You can change any of the filter settings on the left until you’re happy with the definition. Tip: One interesting approach is to look at users who have a high number of total web sessions but are no longer logging in very much. These are likely to be once-active, now disengaged users. Either that or they went on a very long vacation. Now, hit the Tag button. This will tag all of the users that fall within your criteria. Let’s call the tag “Slipping away”. Once you create the tag, the Zapier-powered back end will get to work pushing all of those tags straight to your ChartMogul account. Time to go and see the results… Step 3: View the data in ChartMogul To enjoy the fruits of your labor, follow these steps: Log in to your ChartMogul account. Once you’re at the Overview page, click Add Filter in the filter bar at the top. Select the Tags attribute from the dropdown list and “has all of the following” in the 2nd dropdown. Now type our tag name in the 3rd box – “Slipping away”. Click Add. Et voila! The data has now been filtered to your “Slipping away” customers. Take a look at the MRR! We can see that: The MRR of “Slipping away” customers is $471 It has increased 25% from the last 30 days ARR is $5,652 This represents 13 customers (and I can click through to see them) Using these insights into your customers, you can make far better decisions and take more decisive actions towards the growth of your subscription business. Actually, the above example scratches the surface of what you can do with the Segmentation and Integrations available in ChartMogul. We’ll be sure to offer more guides and walkthroughs in the future, but for now go and check out the announcement of our Zapier integration or the ChartMogul Help Center to read more.

[INST] How much of your MRR is slipping away? [/INST]

Many people love using Intercom as a tool for understanding how customers are using their product, providing awesome customer service and generally being closer to them. I’m guessing a lot of people see the Slipping Away segment that’s built into the product and shown in the top menu bar: Wait… What?! Disaster! 784 users are “slipping away”! We must take action. Someone take action. But wait a minute. What if you could actually know what those 784 users represented for your business in terms of MRR? This way, you could actually see that recurring revenue that you’re slowly losing grasp of, as it gently drips from the leaky churn-ridden bucket that is your subscription business. You can get this data. Using a combination of Intercom, ChartMogul and Zapier, we can view all of the relevant SaaS metrics for the customers in this segment. Allow me to show you how… You’ll need: An Intercom account, with users (duh). A ChartMogul account (grab a free trial here and import your data from your billing system). A Zapier account (Zapier connects events in Intercom with ChartMogul data). Step 1: Activate the Zapier Zap Zapier’s integration with ChartMogul means that you can connect all kinds of other platforms to your ChartMogul data. In this case, we’re going to use a ‘Zap’ (Zapier app) which connects ChartMogul to Intercom. Here’s the one you want: Go to the page for the Zap, and click “Make this Zap!” Connect your Intercom and Zapier accounts, providing the required information. When you get to the Action Fields step, follow the instructions to choose Tag Name. Useremail should already be selected in the second text field. Click Save + finish! The Zap will be enabled after a few seconds of behind-the-scenes magic. Step 2: Tag the Slipping Away Intercom users Now that we’ve enabled the above Zap, any user tag added in Intercom will be instantly pushed to the corresponding user in ChartMogul. Cool, huh? Let’s do some bulk tagging. Log in to Intercom, and click the Slipping Away menu item. You’ll see that by default, Intercom uses the following definition of “Slipping Away”: “User was last seen more than 10 days ago AND less than 60 days ago” If you can define this better for your own business, now is the time to tweak it. You can change any of the filter settings on the left until you’re happy with the definition. Tip: One interesting approach is to look at users who have a high number of total web sessions but are no longer logging in very much. These are likely to be once-active, now disengaged users. Either that or they went on a very long vacation. Now, hit the Tag button. This will tag all of the users that fall within your criteria. Let’s call the tag “Slipping away”. Once you create the tag, the Zapier-powered back end will get to work pushing all of those tags straight to your ChartMogul account. Time to go and see the results… Step 3: View the data in ChartMogul To enjoy the fruits of your labor, follow these steps: Log in to your ChartMogul account. Once you’re at the Overview page, click Add Filter in the filter bar at the top. Select the Tags attribute from the dropdown list and “has all of the following” in the 2nd dropdown. Now type our tag name in the 3rd box – “Slipping away”. Click Add. Et voila! The data has now been filtered to your “Slipping away” customers. Take a look at the MRR! We can see that: The MRR of “Slipping away” customers is $471 It has increased 25% from the last 30 days ARR is $5,652 This represents 13 customers (and I can click through to see them) Using these insights into your customers, you can make far better decisions and take more decisive actions towards the growth of your subscription business. Actually, the above example scratches the surface of what you can do with the Segmentation and Integrations available in ChartMogul. We’ll be sure to offer more guides and walkthroughs in the future, but for now go and check out the announcement of our Zapier integration or the ChartMogul Help Center to read more.

<sys> [INST] How much of your MRR is slipping away? [/INST] Many people love using Intercom as a tool for understanding how customers are using their product, providing awesome customer service and generally being closer to them. I’m guessing a lot of people see the Slipping Away segment that’s built into the product and shown in the top menu bar: Wait… What?! Disaster! 784 users are “slipping away”! We must take action. Someone take action. But wait a minute. What if you could actually know what those 784 users represented for your business in terms of MRR? This way, you could actually see that recurring revenue that you’re slowly losing grasp of, as it gently drips from the leaky churn-ridden bucket that is your subscription business. You can get this data. Using a combination of Intercom, ChartMogul and Zapier, we can view all of the relevant SaaS metrics for the customers in this segment. Allow me to show you how… You’ll need: An Intercom account, with users (duh). A ChartMogul account (grab a free trial here and import your data from your billing system). A Zapier account (Zapier connects events in Intercom with ChartMogul data). Step 1: Activate the Zapier Zap Zapier’s integration with ChartMogul means that you can connect all kinds of other platforms to your ChartMogul data. In this case, we’re going to use a ‘Zap’ (Zapier app) which connects ChartMogul to Intercom. Here’s the one you want: Go to the page for the Zap, and click “Make this Zap!” Connect your Intercom and Zapier accounts, providing the required information. When you get to the Action Fields step, follow the instructions to choose Tag Name. Useremail should already be selected in the second text field. Click Save + finish! The Zap will be enabled after a few seconds of behind-the-scenes magic. Step 2: Tag the Slipping Away Intercom users Now that we’ve enabled the above Zap, any user tag added in Intercom will be instantly pushed to the corresponding user in ChartMogul. Cool, huh? Let’s do some bulk tagging. Log in to Intercom, and click the Slipping Away menu item. You’ll see that by default, Intercom uses the following definition of “Slipping Away”: “User was last seen more than 10 days ago AND less than 60 days ago” If you can define this better for your own business, now is the time to tweak it. You can change any of the filter settings on the left until you’re happy with the definition. Tip: One interesting approach is to look at users who have a high number of total web sessions but are no longer logging in very much. These are likely to be once-active, now disengaged users. Either that or they went on a very long vacation. Now, hit the Tag button. This will tag all of the users that fall within your criteria. Let’s call the tag “Slipping away”. Once you create the tag, the Zapier-powered back end will get to work pushing all of those tags straight to your ChartMogul account. Time to go and see the results… Step 3: View the data in ChartMogul To enjoy the fruits of your labor, follow these steps: Log in to your ChartMogul account. Once you’re at the Overview page, click Add Filter in the filter bar at the top. Select the Tags attribute from the dropdown list and “has all of the following” in the 2nd dropdown. Now type our tag name in the 3rd box – “Slipping away”. Click Add. Et voila! The data has now been filtered to your “Slipping away” customers. Take a look at the MRR! We can see that: The MRR of “Slipping away” customers is $471 It has increased 25% from the last 30 days ARR is $5,652 This represents 13 customers (and I can click through to see them) Using these insights into your customers, you can make far better decisions and take more decisive actions towards the growth of your subscription business. Actually, the above example scratches the surface of what you can do with the Segmentation and Integrations available in ChartMogul. We’ll be sure to offer more guides and walkthroughs in the future, but for now go and check out the announcement of our Zapier integration or the ChartMogul Help Center to read more. </sys

The problem with SaaS marketing ft. Gia and Claire of Forget The Funnel. According to Gia and Claire of Forget The Funnel: “The vast majority of early- and growth-stage tech companies undervalue marketing — that is, until marketing becomes an emergency.” Sound familiar?! This episode is for you. Given that both Gia and Claire are seasoned veterans in the world of SaaS marketing, I’m inclined to listen. Claire (@ClaireSuellen) served as Director of Marketing and employee #2 at Calendly, where she helped the product grow to over 400k monthly users and millions in revenue. Since leaving Calendly she helps high-growth SaaS companies get inside their customers’ heads and increase conversions along their sales, marketing, and onboarding funnels. Gia (@ggiiaa) was an early employee and the VP of Marketing at Unbounce, where she helped grow revenue by 900% in her first 3 years, scale her team from 1 to 35, and go from under $1M to $15.6M in ARR without any major funding. In the episode “When a marketer is eventually hired, they’re often at a disadvantage: their goal is to increase revenue — the lifeblood of the company — but their projects are consistently at the mercy of / de-prioritized in favor of product development.” This episode is a must-listen for SaaS marketing professionals, particularly those feeling a little lost or struggling to understand their role in the increasingly complex structure of the modern tech business. Just a few of the topics we cover: Why startups’ approach to marketing is so often an afterthought, and how that impacts the first few marketing hires What “forget the funnel” really means, and why there’s a better approach to SaaS marketing What the high-performing marketers featured on their site have in common, and what makes them stand out How SaaS marketers can focus on what really matters in 2018 and beyond, in the face of constant industry changes Claire and Gia’s recommended resources Claire: When Coffee And Kale Compete – Alan Klement (free PDF, eBook and physical formats available). “For understanding how people make decisions, related to customer research.” CopyHackers – “Joanna Wiebe is the original conversion copywriter.” Gia: Customer Experience Mapping – Adaptive Paths. “It was a really great jumping off point for me… it gives a really nice framework for thinking about how to start the development process in an organization.” GetUplift blog – Talia Wolf. “The optimization side of things often feels unattainable to an earlier stage marketer.” Nicole Elizabeth Demeré Val Geisler’s onboarding teardowns Ty Magnin at AppCues Join a Forget The Funnel workshop As discussed in this episode, you can now pre-register for the SaaS Marketer Essentials training. You also can sign up for free SaaS marketing workshops over at forgetthefunnel.com. My personal recommendation is to check out the session with Brian Sun of Autopilot, during which I frantically scribbled notes and takeaways for my own strategy. It’s called How to Build a SaaS Content Strategy Your Boss Will Love. 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] The problem with SaaS marketing ft [/INST]

Gia and Claire of Forget The Funnel. According to Gia and Claire of Forget The Funnel: “The vast majority of early- and growth-stage tech companies undervalue marketing — that is, until marketing becomes an emergency.” Sound familiar?! This episode is for you. Given that both Gia and Claire are seasoned veterans in the world of SaaS marketing, I’m inclined to listen. Claire (@ClaireSuellen) served as Director of Marketing and employee #2 at Calendly, where she helped the product grow to over 400k monthly users and millions in revenue. Since leaving Calendly she helps high-growth SaaS companies get inside their customers’ heads and increase conversions along their sales, marketing, and onboarding funnels. Gia (@ggiiaa) was an early employee and the VP of Marketing at Unbounce, where she helped grow revenue by 900% in her first 3 years, scale her team from 1 to 35, and go from under $1M to $15.6M in ARR without any major funding. In the episode “When a marketer is eventually hired, they’re often at a disadvantage: their goal is to increase revenue — the lifeblood of the company — but their projects are consistently at the mercy of / de-prioritized in favor of product development.” This episode is a must-listen for SaaS marketing professionals, particularly those feeling a little lost or struggling to understand their role in the increasingly complex structure of the modern tech business. Just a few of the topics we cover: Why startups’ approach to marketing is so often an afterthought, and how that impacts the first few marketing hires What “forget the funnel” really means, and why there’s a better approach to SaaS marketing What the high-performing marketers featured on their site have in common, and what makes them stand out How SaaS marketers can focus on what really matters in 2018 and beyond, in the face of constant industry changes Claire and Gia’s recommended resources Claire: When Coffee And Kale Compete – Alan Klement (free PDF, eBook and physical formats available). “For understanding how people make decisions, related to customer research.” CopyHackers – “Joanna Wiebe is the original conversion copywriter.” Gia: Customer Experience Mapping – Adaptive Paths. “It was a really great jumping off point for me… it gives a really nice framework for thinking about how to start the development process in an organization.” GetUplift blog – Talia Wolf. “The optimization side of things often feels unattainable to an earlier stage marketer.” Nicole Elizabeth Demeré Val Geisler’s onboarding teardowns Ty Magnin at AppCues Join a Forget The Funnel workshop As discussed in this episode, you can now pre-register for the SaaS Marketer Essentials training. You also can sign up for free SaaS marketing workshops over at forgetthefunnel.com. My personal recommendation is to check out the session with Brian Sun of Autopilot, during which I frantically scribbled notes and takeaways for my own strategy. It’s called How to Build a SaaS Content Strategy Your Boss Will Love. 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] The problem with SaaS marketing ft [/INST] Gia and Claire of Forget The Funnel. According to Gia and Claire of Forget The Funnel: “The vast majority of early- and growth-stage tech companies undervalue marketing — that is, until marketing becomes an emergency.” Sound familiar?! This episode is for you. Given that both Gia and Claire are seasoned veterans in the world of SaaS marketing, I’m inclined to listen. Claire (@ClaireSuellen) served as Director of Marketing and employee #2 at Calendly, where she helped the product grow to over 400k monthly users and millions in revenue. Since leaving Calendly she helps high-growth SaaS companies get inside their customers’ heads and increase conversions along their sales, marketing, and onboarding funnels. Gia (@ggiiaa) was an early employee and the VP of Marketing at Unbounce, where she helped grow revenue by 900% in her first 3 years, scale her team from 1 to 35, and go from under $1M to $15.6M in ARR without any major funding. In the episode “When a marketer is eventually hired, they’re often at a disadvantage: their goal is to increase revenue — the lifeblood of the company — but their projects are consistently at the mercy of / de-prioritized in favor of product development.” This episode is a must-listen for SaaS marketing professionals, particularly those feeling a little lost or struggling to understand their role in the increasingly complex structure of the modern tech business. Just a few of the topics we cover: Why startups’ approach to marketing is so often an afterthought, and how that impacts the first few marketing hires What “forget the funnel” really means, and why there’s a better approach to SaaS marketing What the high-performing marketers featured on their site have in common, and what makes them stand out How SaaS marketers can focus on what really matters in 2018 and beyond, in the face of constant industry changes Claire and Gia’s recommended resources Claire: When Coffee And Kale Compete – Alan Klement (free PDF, eBook and physical formats available). “For understanding how people make decisions, related to customer research.” CopyHackers – “Joanna Wiebe is the original conversion copywriter.” Gia: Customer Experience Mapping – Adaptive Paths. “It was a really great jumping off point for me… it gives a really nice framework for thinking about how to start the development process in an organization.” GetUplift blog – Talia Wolf. “The optimization side of things often feels unattainable to an earlier stage marketer.” Nicole Elizabeth Demeré Val Geisler’s onboarding teardowns Ty Magnin at AppCues Join a Forget The Funnel workshop As discussed in this episode, you can now pre-register for the SaaS Marketer Essentials training. You also can sign up for free SaaS marketing workshops over at forgetthefunnel.com. My personal recommendation is to check out the session with Brian Sun of Autopilot, during which I frantically scribbled notes and takeaways for my own strategy. It’s called How to Build a SaaS Content Strategy Your Boss Will Love. 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

The Ultimate SaaS Metrics Cheat Sheet. Presenting: The Ultimate SaaS Metrics Cheat Sheet A perfect, quick resource to learn about the following: Monthly Recurring Revenue (MRR) Classifying MRR (MRR Movements) Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Churn Rate Customer Lifetime Value (LTV) Customer Acquisition Cost (CAC) And more! Download for free Big thanks to Tomasz Tunguz and Christoph Janz who let us use their cohort diagrams and David Skok for providing such a fantastic resource on SaaS metrics for us to draw from.

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

Presenting: The Ultimate SaaS Metrics Cheat Sheet A perfect, quick resource to learn about the following: Monthly Recurring Revenue (MRR) Classifying MRR (MRR Movements) Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Churn Rate Customer Lifetime Value (LTV) Customer Acquisition Cost (CAC) And more! Download for free Big thanks to Tomasz Tunguz and Christoph Janz who let us use their cohort diagrams and David Skok for providing such a fantastic resource on SaaS metrics for us to draw from.

<sys> [INST] The Ultimate SaaS Metrics Cheat Sheet [/INST] Presenting: The Ultimate SaaS Metrics Cheat Sheet A perfect, quick resource to learn about the following: Monthly Recurring Revenue (MRR) Classifying MRR (MRR Movements) Annualized Run Rate (ARR) Average Revenue Per Account (ARPA) Churn Rate Customer Lifetime Value (LTV) Customer Acquisition Cost (CAC) And more! Download for free Big thanks to Tomasz Tunguz and Christoph Janz who let us use their cohort diagrams and David Skok for providing such a fantastic resource on SaaS metrics for us to draw from. </sys

Going beyond the subscription model. In the enterprise software market, the move to a recurring revenue model is effectively complete. Gartner predicts that all new market entrants and 80% of historical vendors will offer subscription-based business models. “By 2020, all new entrants and 80% of historical vendors will offer subscription-based business models” Laurie Wurster, Research Director — Gartner And while the adoption of a subscription model is following suit in other industries too, it doesn’t mean that pure subscription is the future. In fact, there’s plenty of diversity today in the way businesses make revenue from their customers. In SaaS specifically, the increased maturation of the market has led businesses to try and innovate and diversify revenue streams from customers. For years though, moving upmarket to target enterprise customers has meant offering paid professional services — something that’s in many ways a hangover from the on-premise days when things like deployment and onboarding were far from simple. 4 key types of hybrid billing model business Infrastructure (SaaS + transaction costs) Infrastructure products require a slightly different approach to pricing and packaging than pure software products. The value delivered to the customer is usually found in the consumption of a resource such as bandwidth, compute power or transactions, and therefore most infrastructure businesses scale their pricing along this axis. While many businesses try to frame pricing around different tiers of usage, there’s often some form of non-subscription fees involved. These can be purely metered billing (e.g., charged per 10K API requests) or as one-off purchases. Example: Cloudflare Cloudflare’s core product is a subscription offering, priced per domain, per month. But the company also offers additional add-ons such as rate limiting — some of these are charged in batches of server requests. Example: Stackpath Stackpath sells hosting and web infrastructure services such as content delivery networks and managed DNS as pure subscription. However, in addition to this you can purchase one-time add-ons such as additional bandwidth or resources. With infrastructure products, there’s a fine line between metered billing and packaged add-ons. Metered billing tends to fluctuate month to month and are billed retroactively, whereas add-ons are typically purchased upfront in batches. Enterprise (SaaS + professional services) For enterprise SaaS businesses that have been around long enough to live through the transition to the cloud, hybrid billing models are likely to be a staple feature on the earnings sheet. On-premise enterprise software typically had far bigger one-time costs for implementation, customer training and migration, and some of these would have naturally carried over to the SaaS world. For the new generation of cloud-first SaaS businesses, professional services can still make up a significant proportion of revenue — up to 40% in some cases. As SaaS venture capitalist Tomasz Tunguz explains: “In order for new software to flourish within an enterprise, the software most likely will have to be integrated into existing systems. This integration work constitutes the vast majority of professional services work. In addition, large numbers of customer staff must be trained to use the product, which also falls into the professional services bucket.” Tomasz Tunguz Tunguz also clearly illustrates the proportion of professional services revenue in a number of public SaaS companies: Source: http://tomtunguz.com/professional_services/ Example: Marketo Marketo is a pure SaaS product that targets enterprise customers. In order to succeed at this, the company offers professional services in the form of custom onboarding and implementation, consulting and even creative services. Example: Workday Workday offers a wealth of professional services in addition to its core financial and HR management products. For example Workday Launch is a custom deployment and onboarding service for midsize deployments of its products. It’s billed as a fixed-fee service Hardware + SaaS solutions In recent years, the rise of power-efficient mobile hardware and the Internet of Things (IoT) has led to a burst in hardware products featuring always-on internet connectivity. This in turn has enabled a much tighter integration between hardware and cloud software services, giving birth to consumer and business products with elements of both. Example: Nest Nest was one of the first consumer businesses to tightly integrate always-connected hardware products with cloud-based management software. The company’s security cameras can only be used to their full extent with an additional subscription called Nest Aware. This enables more advanced cloud computing features like facial recognition. Example: Livestream In the B2B software space, SaaS company Livestream provides large businesses with the tools and infrastructure to stream live video to millions of viewers across multiple platforms. But why stop there? In addition to the software subscription, Livestream also has an online store selling specialist hardware products to make the broadcasting experience even easier. This is a great example of a vertical solution, solving a problem for businesses from start to finish. Physical subscriptions (ecommerce + subscription box) Consumer subscription boxes have played a huge part in the subscription revolution. In many cases, traditional consumer products started to introduce a subscription for regularly used products (such as razors, toothbrushes and even underwear). But rather than an all-or-nothing approach to subscriptions, in this space businesses are trending toward giving consumers the choice. This means that in many cases, subscriptions can become an upsell product for regular consumers. Example: Birchbox Birchbox is one of the most well-known subscription boxes, shipping a wide range of beauty products to over one million subscribers. What you might not realize is that they sell hundreds of products outside of the core subscription box, right on their site. These standalone products can work as an upsell opportunity for the company, increasing the average revenue earned from existing customers. Example: Under Armour Under Armour traditionally sells fitness products, from clothing to shoes and other accessories. However, in October 2017 it launched ArmourBox, a subscription box allowing users to receive regular shipments of its merchandise. This is a prime example of a traditional consumer e-commerce operation looking to add recurring revenue to its earnings sheet. It doesn’t stop there though – Under Armour acquired fitness tracker apps MyFitnessPal and Endomondo back in 2015, both featuring paid consumer subscriptions. The move to a hybrid model can work both ways Many traditional e-commerce businesses selling products with purely one-time payments are looking to capture some of that recurring revenue goodness — Under Armour is a great example of a company doing this, looking to reignite revenue growth through diversifying the billing model in its products. On the other hand, Birchbox started out as a subscription box and has since expanded its offering to more traditional e-commerce sales. Consumer choice is the real winner here. In the world of SaaS, businesses that are traditionally 100% subscription-based often move upmarket to target bigger enterprise businesses (margins are much bigger in this segment). In doing this, businesses like Workday have introduced a range of single-use products in the form of professional services. For some larger SaaS businesses, professional services makes up a large proportion of total revenue (up to 40%). Even outside of enterprise, we see SaaS businesses diversifying their products and driving up-sell through add-ons and one-off purchases.

[INST] Going beyond the subscription model [/INST]

In the enterprise software market, the move to a recurring revenue model is effectively complete. Gartner predicts that all new market entrants and 80% of historical vendors will offer subscription-based business models. “By 2020, all new entrants and 80% of historical vendors will offer subscription-based business models” Laurie Wurster, Research Director — Gartner And while the adoption of a subscription model is following suit in other industries too, it doesn’t mean that pure subscription is the future. In fact, there’s plenty of diversity today in the way businesses make revenue from their customers. In SaaS specifically, the increased maturation of the market has led businesses to try and innovate and diversify revenue streams from customers. For years though, moving upmarket to target enterprise customers has meant offering paid professional services — something that’s in many ways a hangover from the on-premise days when things like deployment and onboarding were far from simple. 4 key types of hybrid billing model business Infrastructure (SaaS + transaction costs) Infrastructure products require a slightly different approach to pricing and packaging than pure software products. The value delivered to the customer is usually found in the consumption of a resource such as bandwidth, compute power or transactions, and therefore most infrastructure businesses scale their pricing along this axis. While many businesses try to frame pricing around different tiers of usage, there’s often some form of non-subscription fees involved. These can be purely metered billing (e.g., charged per 10K API requests) or as one-off purchases. Example: Cloudflare Cloudflare’s core product is a subscription offering, priced per domain, per month. But the company also offers additional add-ons such as rate limiting — some of these are charged in batches of server requests. Example: Stackpath Stackpath sells hosting and web infrastructure services such as content delivery networks and managed DNS as pure subscription. However, in addition to this you can purchase one-time add-ons such as additional bandwidth or resources. With infrastructure products, there’s a fine line between metered billing and packaged add-ons. Metered billing tends to fluctuate month to month and are billed retroactively, whereas add-ons are typically purchased upfront in batches. Enterprise (SaaS + professional services) For enterprise SaaS businesses that have been around long enough to live through the transition to the cloud, hybrid billing models are likely to be a staple feature on the earnings sheet. On-premise enterprise software typically had far bigger one-time costs for implementation, customer training and migration, and some of these would have naturally carried over to the SaaS world. For the new generation of cloud-first SaaS businesses, professional services can still make up a significant proportion of revenue — up to 40% in some cases. As SaaS venture capitalist Tomasz Tunguz explains: “In order for new software to flourish within an enterprise, the software most likely will have to be integrated into existing systems. This integration work constitutes the vast majority of professional services work. In addition, large numbers of customer staff must be trained to use the product, which also falls into the professional services bucket.” Tomasz Tunguz Tunguz also clearly illustrates the proportion of professional services revenue in a number of public SaaS companies: Source: http://tomtunguz.com/professional_services/ Example: Marketo Marketo is a pure SaaS product that targets enterprise customers. In order to succeed at this, the company offers professional services in the form of custom onboarding and implementation, consulting and even creative services. Example: Workday Workday offers a wealth of professional services in addition to its core financial and HR management products. For example Workday Launch is a custom deployment and onboarding service for midsize deployments of its products. It’s billed as a fixed-fee service Hardware + SaaS solutions In recent years, the rise of power-efficient mobile hardware and the Internet of Things (IoT) has led to a burst in hardware products featuring always-on internet connectivity. This in turn has enabled a much tighter integration between hardware and cloud software services, giving birth to consumer and business products with elements of both. Example: Nest Nest was one of the first consumer businesses to tightly integrate always-connected hardware products with cloud-based management software. The company’s security cameras can only be used to their full extent with an additional subscription called Nest Aware. This enables more advanced cloud computing features like facial recognition. Example: Livestream In the B2B software space, SaaS company Livestream provides large businesses with the tools and infrastructure to stream live video to millions of viewers across multiple platforms. But why stop there? In addition to the software subscription, Livestream also has an online store selling specialist hardware products to make the broadcasting experience even easier. This is a great example of a vertical solution, solving a problem for businesses from start to finish. Physical subscriptions (ecommerce + subscription box) Consumer subscription boxes have played a huge part in the subscription revolution. In many cases, traditional consumer products started to introduce a subscription for regularly used products (such as razors, toothbrushes and even underwear). But rather than an all-or-nothing approach to subscriptions, in this space businesses are trending toward giving consumers the choice. This means that in many cases, subscriptions can become an upsell product for regular consumers. Example: Birchbox Birchbox is one of the most well-known subscription boxes, shipping a wide range of beauty products to over one million subscribers. What you might not realize is that they sell hundreds of products outside of the core subscription box, right on their site. These standalone products can work as an upsell opportunity for the company, increasing the average revenue earned from existing customers. Example: Under Armour Under Armour traditionally sells fitness products, from clothing to shoes and other accessories. However, in October 2017 it launched ArmourBox, a subscription box allowing users to receive regular shipments of its merchandise. This is a prime example of a traditional consumer e-commerce operation looking to add recurring revenue to its earnings sheet. It doesn’t stop there though – Under Armour acquired fitness tracker apps MyFitnessPal and Endomondo back in 2015, both featuring paid consumer subscriptions. The move to a hybrid model can work both ways Many traditional e-commerce businesses selling products with purely one-time payments are looking to capture some of that recurring revenue goodness — Under Armour is a great example of a company doing this, looking to reignite revenue growth through diversifying the billing model in its products. On the other hand, Birchbox started out as a subscription box and has since expanded its offering to more traditional e-commerce sales. Consumer choice is the real winner here. In the world of SaaS, businesses that are traditionally 100% subscription-based often move upmarket to target bigger enterprise businesses (margins are much bigger in this segment). In doing this, businesses like Workday have introduced a range of single-use products in the form of professional services. For some larger SaaS businesses, professional services makes up a large proportion of total revenue (up to 40%). Even outside of enterprise, we see SaaS businesses diversifying their products and driving up-sell through add-ons and one-off purchases.

<sys> [INST] Going beyond the subscription model [/INST] In the enterprise software market, the move to a recurring revenue model is effectively complete. Gartner predicts that all new market entrants and 80% of historical vendors will offer subscription-based business models. “By 2020, all new entrants and 80% of historical vendors will offer subscription-based business models” Laurie Wurster, Research Director — Gartner And while the adoption of a subscription model is following suit in other industries too, it doesn’t mean that pure subscription is the future. In fact, there’s plenty of diversity today in the way businesses make revenue from their customers. In SaaS specifically, the increased maturation of the market has led businesses to try and innovate and diversify revenue streams from customers. For years though, moving upmarket to target enterprise customers has meant offering paid professional services — something that’s in many ways a hangover from the on-premise days when things like deployment and onboarding were far from simple. 4 key types of hybrid billing model business Infrastructure (SaaS + transaction costs) Infrastructure products require a slightly different approach to pricing and packaging than pure software products. The value delivered to the customer is usually found in the consumption of a resource such as bandwidth, compute power or transactions, and therefore most infrastructure businesses scale their pricing along this axis. While many businesses try to frame pricing around different tiers of usage, there’s often some form of non-subscription fees involved. These can be purely metered billing (e.g., charged per 10K API requests) or as one-off purchases. Example: Cloudflare Cloudflare’s core product is a subscription offering, priced per domain, per month. But the company also offers additional add-ons such as rate limiting — some of these are charged in batches of server requests. Example: Stackpath Stackpath sells hosting and web infrastructure services such as content delivery networks and managed DNS as pure subscription. However, in addition to this you can purchase one-time add-ons such as additional bandwidth or resources. With infrastructure products, there’s a fine line between metered billing and packaged add-ons. Metered billing tends to fluctuate month to month and are billed retroactively, whereas add-ons are typically purchased upfront in batches. Enterprise (SaaS + professional services) For enterprise SaaS businesses that have been around long enough to live through the transition to the cloud, hybrid billing models are likely to be a staple feature on the earnings sheet. On-premise enterprise software typically had far bigger one-time costs for implementation, customer training and migration, and some of these would have naturally carried over to the SaaS world. For the new generation of cloud-first SaaS businesses, professional services can still make up a significant proportion of revenue — up to 40% in some cases. As SaaS venture capitalist Tomasz Tunguz explains: “In order for new software to flourish within an enterprise, the software most likely will have to be integrated into existing systems. This integration work constitutes the vast majority of professional services work. In addition, large numbers of customer staff must be trained to use the product, which also falls into the professional services bucket.” Tomasz Tunguz Tunguz also clearly illustrates the proportion of professional services revenue in a number of public SaaS companies: Source: http://tomtunguz.com/professional_services/ Example: Marketo Marketo is a pure SaaS product that targets enterprise customers. In order to succeed at this, the company offers professional services in the form of custom onboarding and implementation, consulting and even creative services. Example: Workday Workday offers a wealth of professional services in addition to its core financial and HR management products. For example Workday Launch is a custom deployment and onboarding service for midsize deployments of its products. It’s billed as a fixed-fee service Hardware + SaaS solutions In recent years, the rise of power-efficient mobile hardware and the Internet of Things (IoT) has led to a burst in hardware products featuring always-on internet connectivity. This in turn has enabled a much tighter integration between hardware and cloud software services, giving birth to consumer and business products with elements of both. Example: Nest Nest was one of the first consumer businesses to tightly integrate always-connected hardware products with cloud-based management software. The company’s security cameras can only be used to their full extent with an additional subscription called Nest Aware. This enables more advanced cloud computing features like facial recognition. Example: Livestream In the B2B software space, SaaS company Livestream provides large businesses with the tools and infrastructure to stream live video to millions of viewers across multiple platforms. But why stop there? In addition to the software subscription, Livestream also has an online store selling specialist hardware products to make the broadcasting experience even easier. This is a great example of a vertical solution, solving a problem for businesses from start to finish. Physical subscriptions (ecommerce + subscription box) Consumer subscription boxes have played a huge part in the subscription revolution. In many cases, traditional consumer products started to introduce a subscription for regularly used products (such as razors, toothbrushes and even underwear). But rather than an all-or-nothing approach to subscriptions, in this space businesses are trending toward giving consumers the choice. This means that in many cases, subscriptions can become an upsell product for regular consumers. Example: Birchbox Birchbox is one of the most well-known subscription boxes, shipping a wide range of beauty products to over one million subscribers. What you might not realize is that they sell hundreds of products outside of the core subscription box, right on their site. These standalone products can work as an upsell opportunity for the company, increasing the average revenue earned from existing customers. Example: Under Armour Under Armour traditionally sells fitness products, from clothing to shoes and other accessories. However, in October 2017 it launched ArmourBox, a subscription box allowing users to receive regular shipments of its merchandise. This is a prime example of a traditional consumer e-commerce operation looking to add recurring revenue to its earnings sheet. It doesn’t stop there though – Under Armour acquired fitness tracker apps MyFitnessPal and Endomondo back in 2015, both featuring paid consumer subscriptions. The move to a hybrid model can work both ways Many traditional e-commerce businesses selling products with purely one-time payments are looking to capture some of that recurring revenue goodness — Under Armour is a great example of a company doing this, looking to reignite revenue growth through diversifying the billing model in its products. On the other hand, Birchbox started out as a subscription box and has since expanded its offering to more traditional e-commerce sales. Consumer choice is the real winner here. In the world of SaaS, businesses that are traditionally 100% subscription-based often move upmarket to target bigger enterprise businesses (margins are much bigger in this segment). In doing this, businesses like Workday have introduced a range of single-use products in the form of professional services. For some larger SaaS businesses, professional services makes up a large proportion of total revenue (up to 40%). Even outside of enterprise, we see SaaS businesses diversifying their products and driving up-sell through add-ons and one-off purchases. </sys

The complete guide to SaaS revenue recognition with ASC 606. Cash is not revenue. The process of converting bookings (and the subsequent cash from those bookings) into revenue within your business is called revenue recognition. 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, and compliance with official standards is not optional! 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. Fresh standards changes are approaching fast in the form of ASC 606 (and the jointly-developed IFRS 15), and now’s the perfect time to get compliant. Thankfully, the new ASC 606 standards simplify and clarify a lot of accounting principles when it comes to SaaS, so read on for an overview of what that means for you, and guidance on how you can implement it. A recognized revenue chart in ChartMogul What is ASC 606? ASC 606 (and IFRS 15) are standards jointly issued by The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The goal of this standard is to smooth over how contracted revenue is recognized across industries and around the world. They both fall under US Generally Accepted Accounting Principles (GAAP). “The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today’s revenue recognition guidance.” (PWC) For SaaS businesses specifically, ASC 606 will unify and simplify the approach to accounting. Whereas before a variety of interpretations of the guidelines existed, from 2018 we should see the end of such discrepancies, leaving less room for different interpretation — because, as mentioned earlier, compliance is with ASC 606 is not optional. In practice, the guidelines are designed to ensure that companies recognize revenue at the time when goods and services are transferred to the customer, in an amount that’s proportionate to how much has been delivered at that point. Who does ASC 606 apply to? The new reporting framework applies to any situation where there is a contract for goods and services. If you’re a SaaS business, this definitely applies to you. What’s the deadline for reporting? If you’re a public company, December 15th 2017 is your deadline. All annual reporting after this date must comply with ASC 606. Because most reporting periods start January 1st, this effectively means that from January 1st 2018, it will affect your reporting. If you’re a private company, the deadline is December 15th 2018 — so from January 1st 2019 you’ll need to be reporting in this way. In reality, you probably want to implement this right now if you haven’t already. Investors and VCs are already looking for ASC 606-compliant metrics when evaluating businesses, and it’s always good to meet the needs of your investors. Free download: The Ultimate SaaS Finance Cheat Sheet, featuring: – Definitions of common terms – Accounting principles – Tax guidelines, and much more How to recognize revenue under ASC 606 The model for revenue recognition under ASC 606 is outlined in 5 steps: 1. Identifying 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. Identifying the performance obligations 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.” In a non-SaaS world, performance obligations can be more complex as the customer is owning the product outright with a perpetual license. Because of this, performance obligations are a bigger focus upfront in the transaction. 3. Determining 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. There are a few small complexities to think about here though: Discounts or rebates against the listed price Discounts based on usage, i.e. the customer can move up to “volume” plans the more capacity they require, which results in them paying less per unit. The problem with this is that it’s not known upfront — you don’t know until the usage actually occurs. Anything else that would cause the price to deviate from the standard listed price, such as reward or referral systems etc. 4. Allocating 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. When it comes to reporting the revenue, we only need to do that month-by-month. For internal reporting and analysis, it can be useful to calculate these on a more granular basis. For example, Revenue Recognition in ChartMogul does this. 5. Recognizing the revenue as each performance obligation is satisfied This is the big one — this is where we actually get to turn our billings into recognized revenue! But before we do that, it’s worth looking at some criteria for revenue recognition. Can I recognize the revenue yet? Thre 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 In the example below, we’ll take you through a typical revenue recognition scenario for a SaaS business, and show how criteria apply in their context. Deferred revenue Any amount you’ve invoiced that has not yet been recognized is called deferred revenue, and is classed as a liability for the business. A common example of this is when a customer pays for a year’s service upfront, but you haven’t yet delivered the full year’s service. For example: I collect $12K today for a new annual subscription (new business) My deferred revenue today is $12k For each month following the purchase, my deferred revenue decreases by $1k as we recognize it over the course of the service period. It’s important to correctly identify and categorize deferred revenue, because investors or auditors will want to take this into account as a liability when assessing your business — either for due diligence, credit-worthiness or other reasons. Example revenue recognition scenario for SaaS TIME OF PURCHASE, 23rd January CONTEXT: The customer “ZenTicket” has signed up for a monthly subscription on your website, entered their credit card details and hit the confirm button. You get a notification from your billing system that the payment has been processed and the money has left the customer’s account. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO, we haven’t transferred risks and rewards to the buyer until we’ve delivered them a month of service. Does the seller have no control over the goods sold? – ❌ NO. We, the seller, have complete control over the goods we’re selling. Is collection of payment reasonably assured? – ✅ YES, at least in the scenario where we’re accepting credit cards, we can be fairly certain (within reason) that we’ll collect the payment. Can the amount of revenue be reasonably measured? – ❌ NO, we generally can’t measure because of the possibility of pro-rated refunds. If your business doesn’t do pro-rated refunds, you should be able to put a ✅ here. Can the cost of earning the revenue be reasonably measured? – ✅ YES. in SaaS, the incremental cost to service a new customer is usually negligible, with the exception of huge volume deals or custom implementations. CLOSING OF BOOKS, 31st January CONTEXT: The customer “ZenTicket” has been actively using your product for 8 days since purchasing. It’s time to do the accounting for January. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO (although this is partially fulfilled – for the part of the billing period that was in January) Does the seller have no control over the goods sold? – ❌ NO (again, partially-fulfilled at this stage) Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ❌ NO (partially-fulfilled) Can the cost of earning the revenue be reasonably measured? – ✅ YES CLOSING OF BOOKS, 28th February CONTEXT: The customer “ZenTicket” has been using your product for over one month. They’ve recently been billed for their 2nd month of service. Now that the customer is into their second month of service, can we recognize revenue from their first month? Have the risks and rewards been transferred from the seller to the buyer? – ✅ YES Does the seller have no control over the goods sold? – ✅ YES Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ✅ YES Can the cost of earning the revenue be reasonably measured? – ✅ YES In this scenario, we can now recognize the revenue from the first month of service for this customer! 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. Revenue waterfalls 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. A revenue waterfall in ChartMogul In summary Revenue recognition for SaaS businesses is inherently complex, and depends on your specific revenue model. Fortunately for most businesses, ASC 606 brings a level of consistency and clarity that did not exist before in SaaS accounting — the Wild West is being tamed, and that’s a good thing for all of us. Take the time to: Understand the five-step model for ASC 606 Determine if any aspects of your customers contracts add complexity to your “performance obligations” (consulting fees, one-off setup costs, etc.) Consider using a tool to automate at least part of the recognition process, save time and reduce risk. If your investors and business stakeholders are not already expecting ASC 606-compliant revenue recognition, they will be before long. Now’s the time to get ahead of the deadline and get compliant! Further reading ASC 606 — Revenue From Contracts With Customers – Deloitte Revenue from contracts with customers (accounting guide) – PWC The new revenue recognition standard [PDF] – EY Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG

[INST] The complete guide to SaaS revenue recognition with ASC 606 [/INST]

Cash is not revenue. The process of converting bookings (and the subsequent cash from those bookings) into revenue within your business is called revenue recognition. 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, and compliance with official standards is not optional! 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. Fresh standards changes are approaching fast in the form of ASC 606 (and the jointly-developed IFRS 15), and now’s the perfect time to get compliant. Thankfully, the new ASC 606 standards simplify and clarify a lot of accounting principles when it comes to SaaS, so read on for an overview of what that means for you, and guidance on how you can implement it. A recognized revenue chart in ChartMogul What is ASC 606? ASC 606 (and IFRS 15) are standards jointly issued by The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The goal of this standard is to smooth over how contracted revenue is recognized across industries and around the world. They both fall under US Generally Accepted Accounting Principles (GAAP). “The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today’s revenue recognition guidance.” (PWC) For SaaS businesses specifically, ASC 606 will unify and simplify the approach to accounting. Whereas before a variety of interpretations of the guidelines existed, from 2018 we should see the end of such discrepancies, leaving less room for different interpretation — because, as mentioned earlier, compliance is with ASC 606 is not optional. In practice, the guidelines are designed to ensure that companies recognize revenue at the time when goods and services are transferred to the customer, in an amount that’s proportionate to how much has been delivered at that point. Who does ASC 606 apply to? The new reporting framework applies to any situation where there is a contract for goods and services. If you’re a SaaS business, this definitely applies to you. What’s the deadline for reporting? If you’re a public company, December 15th 2017 is your deadline. All annual reporting after this date must comply with ASC 606. Because most reporting periods start January 1st, this effectively means that from January 1st 2018, it will affect your reporting. If you’re a private company, the deadline is December 15th 2018 — so from January 1st 2019 you’ll need to be reporting in this way. In reality, you probably want to implement this right now if you haven’t already. Investors and VCs are already looking for ASC 606-compliant metrics when evaluating businesses, and it’s always good to meet the needs of your investors. Free download: The Ultimate SaaS Finance Cheat Sheet, featuring: – Definitions of common terms – Accounting principles – Tax guidelines, and much more How to recognize revenue under ASC 606 The model for revenue recognition under ASC 606 is outlined in 5 steps: 1. Identifying 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. Identifying the performance obligations 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.” In a non-SaaS world, performance obligations can be more complex as the customer is owning the product outright with a perpetual license. Because of this, performance obligations are a bigger focus upfront in the transaction. 3. Determining 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. There are a few small complexities to think about here though: Discounts or rebates against the listed price Discounts based on usage, i.e. the customer can move up to “volume” plans the more capacity they require, which results in them paying less per unit. The problem with this is that it’s not known upfront — you don’t know until the usage actually occurs. Anything else that would cause the price to deviate from the standard listed price, such as reward or referral systems etc. 4. Allocating 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. When it comes to reporting the revenue, we only need to do that month-by-month. For internal reporting and analysis, it can be useful to calculate these on a more granular basis. For example, Revenue Recognition in ChartMogul does this. 5. Recognizing the revenue as each performance obligation is satisfied This is the big one — this is where we actually get to turn our billings into recognized revenue! But before we do that, it’s worth looking at some criteria for revenue recognition. Can I recognize the revenue yet? Thre 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 In the example below, we’ll take you through a typical revenue recognition scenario for a SaaS business, and show how criteria apply in their context. Deferred revenue Any amount you’ve invoiced that has not yet been recognized is called deferred revenue, and is classed as a liability for the business. A common example of this is when a customer pays for a year’s service upfront, but you haven’t yet delivered the full year’s service. For example: I collect $12K today for a new annual subscription (new business) My deferred revenue today is $12k For each month following the purchase, my deferred revenue decreases by $1k as we recognize it over the course of the service period. It’s important to correctly identify and categorize deferred revenue, because investors or auditors will want to take this into account as a liability when assessing your business — either for due diligence, credit-worthiness or other reasons. Example revenue recognition scenario for SaaS TIME OF PURCHASE, 23rd January CONTEXT: The customer “ZenTicket” has signed up for a monthly subscription on your website, entered their credit card details and hit the confirm button. You get a notification from your billing system that the payment has been processed and the money has left the customer’s account. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO, we haven’t transferred risks and rewards to the buyer until we’ve delivered them a month of service. Does the seller have no control over the goods sold? – ❌ NO. We, the seller, have complete control over the goods we’re selling. Is collection of payment reasonably assured? – ✅ YES, at least in the scenario where we’re accepting credit cards, we can be fairly certain (within reason) that we’ll collect the payment. Can the amount of revenue be reasonably measured? – ❌ NO, we generally can’t measure because of the possibility of pro-rated refunds. If your business doesn’t do pro-rated refunds, you should be able to put a ✅ here. Can the cost of earning the revenue be reasonably measured? – ✅ YES. in SaaS, the incremental cost to service a new customer is usually negligible, with the exception of huge volume deals or custom implementations. CLOSING OF BOOKS, 31st January CONTEXT: The customer “ZenTicket” has been actively using your product for 8 days since purchasing. It’s time to do the accounting for January. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO (although this is partially fulfilled – for the part of the billing period that was in January) Does the seller have no control over the goods sold? – ❌ NO (again, partially-fulfilled at this stage) Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ❌ NO (partially-fulfilled) Can the cost of earning the revenue be reasonably measured? – ✅ YES CLOSING OF BOOKS, 28th February CONTEXT: The customer “ZenTicket” has been using your product for over one month. They’ve recently been billed for their 2nd month of service. Now that the customer is into their second month of service, can we recognize revenue from their first month? Have the risks and rewards been transferred from the seller to the buyer? – ✅ YES Does the seller have no control over the goods sold? – ✅ YES Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ✅ YES Can the cost of earning the revenue be reasonably measured? – ✅ YES In this scenario, we can now recognize the revenue from the first month of service for this customer! 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. Revenue waterfalls 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. A revenue waterfall in ChartMogul In summary Revenue recognition for SaaS businesses is inherently complex, and depends on your specific revenue model. Fortunately for most businesses, ASC 606 brings a level of consistency and clarity that did not exist before in SaaS accounting — the Wild West is being tamed, and that’s a good thing for all of us. Take the time to: Understand the five-step model for ASC 606 Determine if any aspects of your customers contracts add complexity to your “performance obligations” (consulting fees, one-off setup costs, etc.) Consider using a tool to automate at least part of the recognition process, save time and reduce risk. If your investors and business stakeholders are not already expecting ASC 606-compliant revenue recognition, they will be before long. Now’s the time to get ahead of the deadline and get compliant! Further reading ASC 606 — Revenue From Contracts With Customers – Deloitte Revenue from contracts with customers (accounting guide) – PWC The new revenue recognition standard [PDF] – EY Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG

<sys> [INST] The complete guide to SaaS revenue recognition with ASC 606 [/INST] Cash is not revenue. The process of converting bookings (and the subsequent cash from those bookings) into revenue within your business is called revenue recognition. 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, and compliance with official standards is not optional! 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. Fresh standards changes are approaching fast in the form of ASC 606 (and the jointly-developed IFRS 15), and now’s the perfect time to get compliant. Thankfully, the new ASC 606 standards simplify and clarify a lot of accounting principles when it comes to SaaS, so read on for an overview of what that means for you, and guidance on how you can implement it. A recognized revenue chart in ChartMogul What is ASC 606? ASC 606 (and IFRS 15) are standards jointly issued by The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). The goal of this standard is to smooth over how contracted revenue is recognized across industries and around the world. They both fall under US Generally Accepted Accounting Principles (GAAP). “The standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries and significantly reduce the complexity inherent in today’s revenue recognition guidance.” (PWC) For SaaS businesses specifically, ASC 606 will unify and simplify the approach to accounting. Whereas before a variety of interpretations of the guidelines existed, from 2018 we should see the end of such discrepancies, leaving less room for different interpretation — because, as mentioned earlier, compliance is with ASC 606 is not optional. In practice, the guidelines are designed to ensure that companies recognize revenue at the time when goods and services are transferred to the customer, in an amount that’s proportionate to how much has been delivered at that point. Who does ASC 606 apply to? The new reporting framework applies to any situation where there is a contract for goods and services. If you’re a SaaS business, this definitely applies to you. What’s the deadline for reporting? If you’re a public company, December 15th 2017 is your deadline. All annual reporting after this date must comply with ASC 606. Because most reporting periods start January 1st, this effectively means that from January 1st 2018, it will affect your reporting. If you’re a private company, the deadline is December 15th 2018 — so from January 1st 2019 you’ll need to be reporting in this way. In reality, you probably want to implement this right now if you haven’t already. Investors and VCs are already looking for ASC 606-compliant metrics when evaluating businesses, and it’s always good to meet the needs of your investors. Free download: The Ultimate SaaS Finance Cheat Sheet, featuring: – Definitions of common terms – Accounting principles – Tax guidelines, and much more How to recognize revenue under ASC 606 The model for revenue recognition under ASC 606 is outlined in 5 steps: 1. Identifying 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. Identifying the performance obligations 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.” In a non-SaaS world, performance obligations can be more complex as the customer is owning the product outright with a perpetual license. Because of this, performance obligations are a bigger focus upfront in the transaction. 3. Determining 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. There are a few small complexities to think about here though: Discounts or rebates against the listed price Discounts based on usage, i.e. the customer can move up to “volume” plans the more capacity they require, which results in them paying less per unit. The problem with this is that it’s not known upfront — you don’t know until the usage actually occurs. Anything else that would cause the price to deviate from the standard listed price, such as reward or referral systems etc. 4. Allocating 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. When it comes to reporting the revenue, we only need to do that month-by-month. For internal reporting and analysis, it can be useful to calculate these on a more granular basis. For example, Revenue Recognition in ChartMogul does this. 5. Recognizing the revenue as each performance obligation is satisfied This is the big one — this is where we actually get to turn our billings into recognized revenue! But before we do that, it’s worth looking at some criteria for revenue recognition. Can I recognize the revenue yet? Thre 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 In the example below, we’ll take you through a typical revenue recognition scenario for a SaaS business, and show how criteria apply in their context. Deferred revenue Any amount you’ve invoiced that has not yet been recognized is called deferred revenue, and is classed as a liability for the business. A common example of this is when a customer pays for a year’s service upfront, but you haven’t yet delivered the full year’s service. For example: I collect $12K today for a new annual subscription (new business) My deferred revenue today is $12k For each month following the purchase, my deferred revenue decreases by $1k as we recognize it over the course of the service period. It’s important to correctly identify and categorize deferred revenue, because investors or auditors will want to take this into account as a liability when assessing your business — either for due diligence, credit-worthiness or other reasons. Example revenue recognition scenario for SaaS TIME OF PURCHASE, 23rd January CONTEXT: The customer “ZenTicket” has signed up for a monthly subscription on your website, entered their credit card details and hit the confirm button. You get a notification from your billing system that the payment has been processed and the money has left the customer’s account. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO, we haven’t transferred risks and rewards to the buyer until we’ve delivered them a month of service. Does the seller have no control over the goods sold? – ❌ NO. We, the seller, have complete control over the goods we’re selling. Is collection of payment reasonably assured? – ✅ YES, at least in the scenario where we’re accepting credit cards, we can be fairly certain (within reason) that we’ll collect the payment. Can the amount of revenue be reasonably measured? – ❌ NO, we generally can’t measure because of the possibility of pro-rated refunds. If your business doesn’t do pro-rated refunds, you should be able to put a ✅ here. Can the cost of earning the revenue be reasonably measured? – ✅ YES. in SaaS, the incremental cost to service a new customer is usually negligible, with the exception of huge volume deals or custom implementations. CLOSING OF BOOKS, 31st January CONTEXT: The customer “ZenTicket” has been actively using your product for 8 days since purchasing. It’s time to do the accounting for January. Have the risks and rewards been transferred from the seller to the buyer? – ❌ NO (although this is partially fulfilled – for the part of the billing period that was in January) Does the seller have no control over the goods sold? – ❌ NO (again, partially-fulfilled at this stage) Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ❌ NO (partially-fulfilled) Can the cost of earning the revenue be reasonably measured? – ✅ YES CLOSING OF BOOKS, 28th February CONTEXT: The customer “ZenTicket” has been using your product for over one month. They’ve recently been billed for their 2nd month of service. Now that the customer is into their second month of service, can we recognize revenue from their first month? Have the risks and rewards been transferred from the seller to the buyer? – ✅ YES Does the seller have no control over the goods sold? – ✅ YES Is collection of payment reasonably assured? – ✅ YES Can the amount of revenue be reasonably measured? – ✅ YES Can the cost of earning the revenue be reasonably measured? – ✅ YES In this scenario, we can now recognize the revenue from the first month of service for this customer! 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. Revenue waterfalls 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. A revenue waterfall in ChartMogul In summary Revenue recognition for SaaS businesses is inherently complex, and depends on your specific revenue model. Fortunately for most businesses, ASC 606 brings a level of consistency and clarity that did not exist before in SaaS accounting — the Wild West is being tamed, and that’s a good thing for all of us. Take the time to: Understand the five-step model for ASC 606 Determine if any aspects of your customers contracts add complexity to your “performance obligations” (consulting fees, one-off setup costs, etc.) Consider using a tool to automate at least part of the recognition process, save time and reduce risk. If your investors and business stakeholders are not already expecting ASC 606-compliant revenue recognition, they will be before long. Now’s the time to get ahead of the deadline and get compliant! Further reading ASC 606 — Revenue From Contracts With Customers – Deloitte Revenue from contracts with customers (accounting guide) – PWC The new revenue recognition standard [PDF] – EY Investor perspectives on ASC 606 for software and SaaS [PDF] – KPMG </sys