Connect with us

Start Ups

As Long As You Are Growing 60% Or More — Your Competition Can’t Really Hurt You

Avatar

Published

on

(Note; an update of a classic SaaStr post, with 2020+ learnings.)

A little while ago, I Zoomed with a good friend running a SaaS company doing about $4 million in ARR. A really good SaaS company. And he was beside himself.

First, he was just plain exhausted. He was in that zone from $1 to $10m in ARR when it all just gets so hard. Too much to do with too few people. We’ve talked about how The Cavalry Was Coming. That the operational part would get harder before it got easier … but it would get easier once he doubled or so, when he’d finally have some redundancy and fat on the team and the model. (More on that here).

Second, he was almost overwhelmed with The Competition. “They’re in every deal now,” he told me. “And they have five times the headcount and have raised $25 million. They’re all over us.”

I asked how much would he grow this year? He said at least 50%-60%, maybe more.

My advice: I Know It’s Tough. And, Yes, You Want to Be #1. And Yes, You Really Do Want to Be Growing 100% or more at this phase. It does seem like enough, and maybe it isn’t.

But

Don’t Overly Sweat the Competition — in the Short Term — in SaaS If You Are Growing at Least 50-60% YoY. And certainly — don’t let it take all the wind out of your sails. Or most especially, don’t let it act as an excuse.

Yes, competition can be brutal in SaaS. Super brutal in fact, because especially if you are in an oligopical space, there are very strong economic incentives to not just win in individual deals — but to Kill Your Competition. More on that here and here.

But a few things to think about vis-a-vis competition in SaaS, once you are post-Initial Traction (say $1m-$2m in ARR or so):

  • Second Order Revenue (Upgrades, Word-of-Mouth, Champion Change) Will Continue to Come In and Work, No Matter How Tough the Competition IsIf you keep your customers happy, they’ll upgrade. They’ll buy more. They’ll tell their friends. Even when your champions leave, and take jobs at other companies, they’ll bring you with them. You don’t even have to be Better. You just have to be Great, and make your customers heroes and a success. More on Second Order Revenue (the key to SaaS economics) here.
No alt text provided for this image
  • If You Are Still Growing 50-60% Or More — You Do Have a Competitive Advantage. Even if It Doesn’t Always Feel Like It. It may not always seem that way. Even if the competition has complete feature parity. Better marketing. A better brand. If you are still getting new customers, you do have an advantage in some segment at least, or you wouldn’t be winning at all.  So at least in the short-term, don’t get too bent out of shape about competition. Get bent out of shape on execution. Double down on what is working.
  • Even 50%-60% Growth at $10m ARR Compounds to Something Awesome. Build a Google Sheet and see where even decent growth takes you in 5 years. You may be shocked to see just how large a business you’ll have then. Even if you aren’t growing like Zoom or Slack.
  • Net Negative Churn is an awesome force.  Even if the competition is everywhere, if your net revenue retention is 120%-130% or higher, that means your existing customer base is still happy to buy more from you.  Lean in there.  That lasts decades.
  • Long-term Commitment is a Huge Competitive Asset. SaaS Evolves — and is a 7-10+ Year Journey. You add new features every month, every quarter. And more importantly, new potential customers enter the market over time. You go from Early Adopters to Early Mainstream and beyond. Even if you have a bad year — the next year can be great. What matters is that you maintain the deepest commitment in your space. That may not make you #1. But it will, I think, help you grow even faster. This is one of the many reasons it’s so hard for the Big Guys to compete in SaaS. They often can’t make a 7-10 year commitment to a new market.
  • Your Competition Will Stumble At Some Point. In some way. They always do, even if you can’t see it as an outsider. If you can keep growing, and wait for them to make their Big Mistake — you can pounce then. And leverage that to grow even faster. Everyone has a bad year on the 7-10 year journey. If you have the long-term commitment, you can take advantage of the competition’s bad year or bad strategic decision.
  • Seeing the Competition in Every Deal Can Be a Good Sign. It may feel like they’re in all your deals when they weren’t before. But that also means you are in their deals. It’s a sign you are doing a good job, at opportunity creation if not revenue creation. At least you’re got an invite to the party. That’s one of the raw materials of success. Just focus on doing what it takes to close more of these deals, even if you are losing some / a lot / almost all of them. Drive the close rate up, even if it’s just bit-by-bit. Close feature gaps, improve the quality of the sales team and the marketing processes.
  • Market Pull and Segmentation Down the Road Can Totally Change Things. You may go more enterprise. The market may get 100x larger and change as it does. Room at the Bottom can open up where none exists today. No matter what, things will change, and since you are almost certainly in a growing market — you can take advantage of those changes over time. Things aren’t static in SaaS. Measured over months, nothing changes. Over years, everything does.

My uber-point is this: I think you have about 4-5 years to get “Somewhere” in SaaS. That’s the ultimate real check-in period on the 7-10 year journey to Something Big. If you don’t build something of real scale and size by then, the team will just get too tired, the journey too taxing.

But don’t let competition be an excuse, or a strategic distraction — as long as you are growing. Because 50%-60%+ growth means the competition really isn’t as big a deal as you think. Tactically, of course, sweat competition every day in every deal. And strategically, figure out where the market will be in 2-3-5 years, and make sure you are skating to the winning opportunity there. And if you aren’t growing fast enough, yes that’s a problem. It will hurt with funding, hiring, etc. You want to be #1, no doubt, and kill the competition. But most of all, you want to grow. Grow or Die.

What I can tell you we had a Year of Hell. You can read about it here. We only grew 50-60% that year, and it was really rough. The sales manager I had at the time blamed it on everything from competition to nascent markets to me. All true, in part.

But right after that, we improved the team. And then we quickly grew > 100%. And that had nothing to do with the competition.

Which didn’t change a bit.

Published on June 13, 2020

Source: https://www.saastr.com/as-long-as-you-are-growing-50-your-competition-cant-kill-you/

Aerospace

Boston startups expand region’s venture capital footprint

Avatar

Published

on

This year has shaken up venture capital, turning a hot early start to 2020 into a glacial period permeated with fear during the early days of COVID-19. That ice quickly melted as venture capitalists discovered that demand for software and other services that startups provide was accelerating, pushing many young tech companies back into growth mode, and investors back into the check-writing arena.

Boston has been an exemplar of the trend, with early pandemic caution dissolving into rapid-fire dealmaking as summer rolled into fall.

We collated new data that underscores the trend, showing that Boston’s third quarter looks very solid compared to its peer groups, and leads greater New England’s share of American venture capital higher during the three-month period.

For our October look at Boston and its startup scene, let’s get into the data and then understand how a new cohort of founders is cropping up among the city’s educational network.

A strong Q3, a strong 2020

Boston’s third quarter was strong, effectively matching the capital raised in New York City during the three-month period. As we head into the fourth quarter, it appears that the silver medal in American startup ecosystems is up for grabs based on what happens in Q4.

Boston could start 2021 as the number-two place to raise venture capital in the country. Or New York City could pip it at the finish line. Let’s check the numbers.

According to PitchBook data shared with TechCrunch, the metro Boston area raised $4.34 billion in venture capital during the third quarter. New York City and its metro area managed $4.45 billion during the same time period, an effective tie. Los Angeles and its own metro area managed just $3.90 billion.

In 2020 the numbers tilt in Boston’s favor, with the city and surrounding area collecting $12.83 billion in venture capital. New York City came in second through Q3, with $12.30 billion in venture capital. Los Angeles was a distant third at $8.66 billion for the year through Q3.

Source: https://techcrunch.com/2020/10/23/boston-startups-expand-regions-venture-capital-footprint/

Continue Reading

Blockchain

Financial institutions can support COVID-19 crowdfunding campaigns

Avatar

Published

on

The economic impact of the COVID-19 pandemic adversely affected the financial outlook for millions of people, and continues to cause significant fiscal distress to millions more, but such challenging times have also wrought a more resilient and resourceful financial system.

With the ingenuity of crowdfunding, considered to be one of the last decade’s greatest “success stories,” and such desperate times calling for bold new ways to finance a wide variety of COVID-19 relief efforts, we are now seeing an excellent opportunity for banks and other financial institutions to partner with crowdfunding platforms and campaigns, bolstering their efforts and impact.

COVID-19 crowdfunding: A world of possibilities to help others

Before considering how financial institutions can assist with crowdfunding campaigns, we must first look at the diverse array of impressive results from this financing option during the pandemic. As people choose between paying the rent or buying groceries, and countless other despairing circumstances, we must look to some of the more inventive ways businesses, entrepreneurs and people in general are using crowdfunding to provide the COVID-19 relief that cash-strapped consumers with maxed-out or poor credit do not have access to or the government has not provided.

Some great examples of COVID-19 crowdfunding at its best include the following:

The possibilities presented by crowdfunding in this age of the coronavirus are endless, and financial institutions can certainly lend their assistance. Here is how.

1. Acknowledge that crowdfunding is not a trend

Crowdfunding is a substantial and ever-so relevant means of financing all sorts of businesses, people and products. Denying its substantive contribution to the economy, especially in digital finance during this pandemic, is akin to wearing a monocle when you actually need glasses for both of your eyes. Do not be shortsighted on this. Crowdfunding is here to stay. In fact, countless crowdfunding businesses and platforms continue to make major moves within the markets globally. For example, Parpera from Australia, in coordination with the equity-crowdfunding platforms, hopes to rival the likes of GoFundMe, Kickstarter and Indiegogo.

2. Be willing to invest in crowdfunded campaigns

This might seem contrary to the original purpose of these campaigns, but the right amount of seed-cash infusions to campaigns that are aligned with your goals as a company is a win-win for both you and the entrepreneurs or causes, especially now in such desperate times of need.

3. Get involved in the community and its crowdfunding efforts

This means that small businesses and medium-sized businesses within your institution’s community could use your help. Consider investing in crowdfunding campaigns similar to the ones mentioned earlier. Better yet, bridge the gaps between financial institutions and crowdfunding platforms and campaigns so that smaller businesses get the opportunities they need to survive through these difficult times.

4. Enable sustainable development goals (SDG)

Last month, the United Nations Development Program released a report proclaiming that digital finance is now allowing people from all over the world to customize and personalize their money-management experiences such that their financial needs have the potential to be more readily and sufficiently met. Financial institutions willing to work as a partner with crowdfunding platforms and campaigns will further these goals and set society up for a more robust rebound from any possible detrimental effects of the COVID-19 recession.

5. Lend your regulatory expertise to this relatively new industry

Other countries are already beginning to figure out better ways to regulate the crowdfunding financing industry, such as the recent updates to the European Union’s handling of crowdfunding regulations, set to take effect this fall. Well-established financial institutions can lend their support in defining the policies and standard operating procedures for crowdfunding even during such a chaotic time as the COVID-19 pandemic. Doing so will ensure fair and equitable financing for all, at least, in theory.

While originally born out of either philanthropy or early-adopting innovation, depending on the situation, person or product, crowdfunding has become an increasingly reliable means of providing COVID-19 economic relief when other organizations, including the government and some banks, cannot provide sufficient assistance. Financial institutions must lend their vast expertise, knowledge and resources to these worthy causes; after all, we are all in this together.

Source: https://techcrunch.com/2020/10/23/financial-institutions-can-support-covid-19-crowdfunding-campaigns/

Continue Reading

Start Ups

mmhmm, Phil Libin’s new startup, acquires Memix to add enhanced filters to its video presentation toolkit

Avatar

Published

on

Virtual meetings are a fundamental part of how we interact with each other these days, but even when (if!?) we find better ways to mitigate the effects of COVID-19, many think that they will be here to stay. That means there is an opportunity out there to improve how they work — because let’s face it, Zoom Fatigue is real and I for one am not super excited anymore to be a part of your Team.

Mmhmm, the video presentation startup from former Evernote CEO Phil Libin with ambitions to change the conversation (literally and figuratively) about what we can do with the medium — its first efforts have included things like the ability to manipulate presentation material around your video in real time to mimic newscasts — is today announcing an acquisition as it continues to home in on a wider launch of its product, currently in a closed beta.

It has acquired Memix, an outfit out of San Francisco that has built a series of filters you can apply to videos — either pre-recorded or streaming — to change the lighting, details in the background, or across the whole of the screen, and an app that works across various video platforms to apply those filters.

Like mmhmm, Memix is today focused on building tools that you use on existing video platforms — not building a video player itself. Memix today comes in the form of a virtual camera, accessible via Windows apps for Zoom, WebEx and Microsoft Teams; or web apps like Facebook Messenger, Houseparty and others that run on Chrome, Edge and Firefox.

Libin said in an interview that the plan will be to keep that virtual camera operating as is while it works on integrating the filters and Memix’s technology into mmhmm, while also laying the groundwork for building more on top of the platform.

Libin’s view is that while there are already a lot of video products and users in the market today, we are just at the start of it all, with technology and our expectations changing rapidly. We are shifting, he said, from wanting to reproduce existing experiences (like meetings) to creating completely new ones that might actually be better.

“There is a profound change in the world that we are just at the beginning of,” he said in an interview. “The main thing is that everything is hybrid. If you imagine all the experiences we can have, from in-person to online, or recorded to live, up to now almost everything in life fit neatly into one of those quadrants. The boundaries were fixed. Now all these boundaries have melted away we can rebuild every experience to be natively hybrid. This is a monumental change.”

That is a concept that the Memix founders have not just been thinking about, but also building the software to make it a reality.

“There is a lot to do,” said Pol Jeremias-Vila, one of the co-founders. “One of our ideas was to try to provide people who do streaming professionally an alternative to the really complicated set-ups you currently use,” which can involve expensive cameras, lights, microphones, stands and more. “Can we bring that to a user just with a couple of clicks? What can be done to put the same kind of tech you get with all that hardware into the hands of a massive audience?”

Memix’s team of two — co-founders Inigo Quilez and Pol Jeremias-Vila, Spaniards who met not in Spain but the Bay Area — are not coming on board full-time, but they will be helping with the transition and integration of the tech.

Libin said that he first became aware of Quilez from a YouTube video he’d posted on “The principles of painting with maths”, but that doesn’t give a lot away about the two co-founders. They are in reality graphic engineering whizzes, with Jeremias-Vila currently the lead graphics software engineer at Pixar, and Quilez until last year a product manager and lead engineer at Facebook, where he created, among other things, the Quill VR animation and production tool for Oculus.

Because working the kind of hours that people put in at tech companies wasn’t quite enough time to work on graphics applications, the pair started another effort called Beauty Pi (not to be confused with Beauty Pie), which has become a home for various collaborations between the two that had nothing to do with their day jobs. Memix had been bootstrapped by the pair as a project built out of that. Other efforts have included Shadertoy, a community and platform for creating Shaders (a computer program created to shade in 3D scenes).

That background of Memix points to an interesting opportunity in the world of video right now. In part because of all the focus (sorry not sorry!) on video right now as a medium because of our current pandemic circumstances, but also because of the advances in broadband, devices, apps and video technology, we’re seeing a huge proliferation of startups building interesting variations and improvements on the basic concept of video streaming.

Just in the area of videoconferencing alone, some of the hopefuls have included Headroom, which launched the other week with a really interesting AI-based approach to helping its users get more meaningful notes from meetings, and using computer vision to help presenters “read the room” better by detecting if people are getting bored, annoyed and more.

Vowel is also bringing a new set of tools not just to annotate meetings and their corresponding transcriptions in a better way, but to then be able to search across all your sessions to follow up items and dig into what people said over multiple events.

And Descript, which originally built a tool to edit audio tracks, earlier this week launched a video component, letting users edit visuals and what you say in those moving pictures, by cutting, pasting and rewriting a word-based document transcribing the sound from that video. All of these have obvious B2B angles, like mmhmm, and they are just the tip of the iceberg.

Indeed, the huge amount of IP out there is interesting in itself. Yet the jury is still out on where all of it would best live and thrive as the space continues to evolve, with more defined business models (and leading companies) only now emerging.

That presents an interesting opportunity not just for the biggies like Zoom, Google and Microsoft, but also players who are building entirely new platforms from the ground up.

Mmhmm is a notable company in that context. Not only does it have the reputation and inspiration of Libin behind it — a force powerful enough that even his foray into the ill-fated world of chatbots got headlines — but it’s also backed by the likes of Sequoia, which led a $31 million round earlier this month.

Libin said he doesn’t like to think of his startup as a consolidator, or the industry in a consolidation play, as that implies a degree of maturity in an area that he still feels is just getting started.

“We’re looking at this not so much as consolidation, which to me means market share,” he said. “Our main criteria is that we wanted to work with teams that we are in love with.”

Source: https://techcrunch.com/2020/10/23/mmhmm-phil-libins-new-startup-acquires-memix-to-add-enhanced-filters-to-its-video-presentation-toolkit/

Continue Reading
Blockchain News2 hours ago

Mastercard and GrainChain Bring Blockchain Provenance to Commodity Supply Chain in Americas

AR/VR7 hours ago

Warhammer Age of Sigmar: Tempestfall Announced for PC VR & Oculus Quest, Arrives 2021

Crowdfunding7 hours ago

I Dare You to Ignore This Trend

Blockchain News7 hours ago

Bitcoin Price Flashes $750M Warning Sign As 60,000 BTC Options Set To Expire

AR/VR8 hours ago

Star Wars: Tales from the Galaxy’s Edge to Include VR Short ‘Temple of Darkness’

Blockchain News8 hours ago

Bitcoin Suffers Mild Drop but Analyst Who Predicted Decoupling Expects BTC Price to See Bullish Uptrend

Blockchain News9 hours ago

AMD Purchases Xilinx in All-Stock Transaction to Develop Mining Devices

Cyber Security9 hours ago

Newly Launched Cybersecurity Company Stairwell

AI9 hours ago

How 5G Will Impact Customer Experience?

AR/VR10 hours ago

You can now Request the PlayStation VR Camera Adaptor for PS5

Blockchain News10 hours ago

HSBC and Wave Facilitate Blockchain-Powered Trade Between New Zealand and China

Blockchain News11 hours ago

Aave Makes History as Core Developers Transfer Governance to Token Holders

Blockchain News12 hours ago

Caitlin Long’s Avanti Becomes the Second Crypto Bank in the US, Open for Commercial Clients in Early 2021

Blockchain News12 hours ago

KPMG Partners with Coin Metrics to Boost Institutional Crypto Adoption

Blockchain News12 hours ago

US SEC Executive Who said Ethereum is Not a Security to Leave the Agency

Blockchain News12 hours ago

MicroStrategy Plans to Purchase Additional Bitcoin Reserves With Excess Cash

Covid1914 hours ago

How followers on Instagram can help to navigate your brand during a pandemic

Cyber Security20 hours ago

StackRox Announced the Release of KubeLinter to Identify Misconfigurations in Kubernetes

Cyber Security22 hours ago

How Was 2020 Cyber Security Awareness Month?

Ecommerce22 hours ago

Celerant Technology® Expands NILS™ Integration Enabling Retailers…

Ecommerce22 hours ago

The COVID-19 Pandemic Causes Eating Patterns in America to Take a…

Ecommerce22 hours ago

MyJane Collaborates with Hedger Humor to Bring Wellness and Laughter…

AR/VR23 hours ago

Sci-fi Shooter Hive Slayer is Free, Asks Players for Louisiana Hurricane Relief Donations Instead

AR/VR23 hours ago

AMD Announces Radeon RX 6000-series GPUs with USB-C “for a modern VR experience”

AI1 day ago

Resiliency And Security: Future-Proofing Our AI Future

AI1 day ago

AI Projects Progressing Across Federal Government Agencies

Blockchain1 day ago

Kucoin and Revain Announce Partnership

AR/VR1 day ago

Crowdfunded AR Startup Tilt Five Secures $7.5M Series A Investment

AR/VR1 day ago

The Importance of XR Influencers

AR/VR1 day ago

Head Back Underground in 2021 With Cave Digger 2: Dig Harder

AR/VR1 day ago

Five All-New Multiplayer Modes Revealed for Tetris Effect: Connected

Crowdfunding1 day ago

The Perfect Investment

AR/VR1 day ago

Snapchat’s new Halloween AR Lenses Offer Full Body Tracking

Cyber Security1 day ago

How the PS5 Will Completely Change Gaming As We Know It?

Cyber Security1 day ago

Compromised Credentials used by Hackers to Access the Content Management System

Cyber Security1 day ago

Which are the safest payment methods for online betting?

Cyber Security1 day ago

How to stay safe if you’re using an Android device for betting?

Cyber Security1 day ago

Three technological advancements that we might see in online betting

Cyber Security1 day ago

Why do people prefer to use iOS for betting rather than Android?

Quantum1 day ago

Bell nonlocality with a single shot

Trending