For Entrepreneurs Blog

Multi-axis Pricing: a key tool for increasing SaaS revenue

Scalable pricing is a powerful tool to grow revenue in a SaaS or software business. It allows you to capture more of the revenue that your customers are willing to pay, without putting off smaller customers that are not able to pay high prices. It also provides a great way to continue to grow revenue from your existing customers. This post looks at how to create scalable pricing using multiple pricing axes, and discusses the different types of axes that can be used. Continued…

SaaS CEOs: Measure Customer Engagement – Increase Conversions & Lower Churn

The goal of a SaaS CEO should be to increase the profit they make from each customer (LTV), and lower the costs in sales and marketing that it takes to acquire each customer (CAC). Measuring Customer Engagement is a key tool that will help you achieve that goal, as it will allow you to increase your trial conversion rates, which directly reduces CAC. And it will help you lower your churn rates, which directly increases LTV. (There are also other significant benefits that are described below.) Continued…

The Science behind Viral Marketing

The Science behind Viral Marketing is a look at the key factors that drive growth in viral marketing. (Hint, the most important factor is not the one everyone expects.) It also looks at what is needed to get virality to work, and how to create and optimize viral marketing campaigns or viral products.

This was a slide deck presented at the Inbound Marketing Summit, Boston, Sept 2011. Continued…

Brainstorming for New Startup Ideas: A Framework to Spur Creative Thinking

If you are a serial entrepreneur starting to look for an idea for your next startup, you are likely to want a way to stimulate your brain to come up with as many good ideas as possible. This blog post outlines a framework that is designed to fire up your best creative thinking modes, triggering the creation of new ideas.

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Cash is King: 8 tips for Optimizing your Startup Financing Strategy

Introduction

This post aims to help startup CEOs optimize their funding strategy by examining how investors value startups, and explaining how to avoid the common cash management pitfalls. Continued…

Slides on Building a Sales & Marketing Machine

Here is the slide deck that I presented last night at the Boston Lean Startup Circle.

The slide deck describes how to build a Sales & Marketing Machine that is predictable, scalable, automated, well instrumented, and cost efficient.

Finding Product/Market Fit: Using Consulting to Understand Customer Needs

Many entrepreneurs have a strong suspicion that there is an opportunity in a particular market, but lack the detailed understanding of customer pain needed to design an appropriate solution. The  following guest post by John Raguin, ex-CEO, and co-founder of Guidewire Software, describes how he and his co-founders tackled this problem. Continued…

Will your 2011 Plan stand up to investor scrutiny?

We have just gone through the time of year when startups present their 2011 plans to their boards for approval. In many ways, these meetings are very similar to the meetings we have with new startups that have projections for how they believe their revenue will grow.

What I always find interesting in this process is looking at how the management team came up with the bookings forecast, and what steps they took to validate the number. In a lot of cases, the bookings target is determined using some rough top down logic like “We should be able to easily double the business this year” or “We’re similar to successful startup XYZ, and they hit $8m revenue in their third year, so we should be able to do the same.” What is surprising is how few companies do the work to validate their top down forecasts. Not surprisingly these are usually the companies that miss their forecast.

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How MySQL solved their Sales & Marketing challenges

An interview with Lesley Young, who was the VP of worldwide Sales for MySQL, and then head of sales for the MySQL division within Oracle. Few products are as well known as the ubiquitous MySQL database. The company behind the database was also one of the great success stories in the Open Source world, and ended being acquired by Sun (now Oracle) for approx. $1 billion. Making money in Open Source businesses is a lot harder than it may appear on the outside. Lesley tells the story of how she and Zack Urlocker, running marketing partnered to solve the sales and marketing challenges that the company faced when trying to monetize MySQL. Continued…

Building a Sales and Marketing Machine Webinar

Slides and video on “Building a Sales and Marketing Machine”, with a discussion on how to optimize your sales & marketing funnel. Presented as a HubSpot Webinar last week together with Mike Volpe, the VP of Marketing at HubSpot. Continued…

SaaS Business Models – Slide Deck

I presented the following set of slides to the Mass TLC group as the keynote for the “SaaS Business Model Update — Creating and Managing Revenues” event. The slides should be useful for anyone interested in learning about the key drivers for a SaaS business, including the SaaS cash flow trough, cost of customer acquisition, churn, lifetime value of the customer, etc. The slides also looks in detail at what drives growth. Continued…

SaaS Economics – Part 2: Scaling the Business

This is the second part of a 2 part series that discusses the cash flow trough that  happens to SaaS, or other subscription/recurring revenue businesses when they decide to scale their business by ramping sales and marketing. These kinds of SaaS businesses face a cash flow problem in the early days, because they have to invest up front in sales and marketing expenses to acquire customers, and only get payments from those customers over a delayed period of time. Continued…

SaaS Economics – Part 1: The SaaS Cash Flow Trough

This post provides SaaS entrepreneurs with an Excel spreadsheet model and graphs that show the cash flow trough that happens to SaaS, or other subscription/recurring revenue businesses that use a sales organization. These kinds of SaaS businesses face a cash flow problem in the early days, because they have to invest up front in sales and marketing expenses to acquire customers, and only get payments from those customers over a delayed period of time. I refer to this phenomenon as the the SaaS Cash Flow Trough. The model also compares the cash flows of businesses that charge monthly to those that are able to charge their customers for a year’s payment in advance. Continued…

Setting the Startup Accelerator Pedal

Startups frequently make one of two mistakes: spending too much money, or spending too little money. A key job of the CEO is knowing where to set the startup accelerator pedal. In a recent series of three blog posts published in GigaOm, I discuss the three key phases of a startup lifecycle, and how each phase requires a different focus, and approach to spending. Continued…

Optimizing your Customer Acquisition Funnel

This blog post focuses on how B2B companies can optimize their customer acquisition funnels using a customer-centric methodology to analyze and remove blockage points.

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Acquiring customers in the B2B world involves using a variety of marketing and sales steps with the goal of converting prospective customers into paying customers. The process is often thought of as a funnel (see diagram above) where you pour in suspects at the top, and various steps in the process, some percentage of prospects successfully convert to the next stage, making the funnel narrower as the process evolves. Continued…