Category Archives: SaaStr

Number 7 on the All-Time Top SaaStr Podcasts: On the Importance of LTV/CAC

Just a quick post to say I’m honored to have made number seven on the countdown of the top ten most downloaded podcasts of all time on the SaaStr Podcast.

The podcast in question is an interview performed by Harry Stebbings of The Twenty Minute VC where we sat down to talk about the importance of the lifetime value to customer acquisition cost ratio (LTV/CAC) and why, if you could only know one SaaS metric about a company, that LTV/CAC would be it.

Of course with Harry it’s easy to end up in a wide-ranging conversation, as we did, and we thus discussed many other fun topics including:

  • How I got into enterprise software and SaaS.
  • The biggest challenge as a leader in a high-growth company (hanging on).
  • Why, for a public SaaS company, I’d probably take billings growth as the single metric, because LTV/CAC isn’t available.
  • LTV/CAC and the idea that it’s a powerful (if compound) metric that weights what you pay for something vs. what’s it worth.
  • Which churn metric to use as the basis for calculating LTV.
  • Upsell and how to design your packaging to enable both incremental upsell and major cross-sell.
  • Pricing and how to ensure your pricing is linked to at least one metric that always increases.
  • Bookings and the perils of TCV in SaaS companies, including my favorite self-quote from the podcast: “beware of Greeks bearing gifts as you would beware SaaS companies talking TCV.”
  • Multi-year deals and to what extent they should be prepaid.
  • How once, at Business Objects, we once sold a customer more licenses than they had employees (on the broader topic of vendor/customer interest alignment).
  • How sales and customer success should work together on renewals and upsells — and importance of putting farmers vs. farmers and hunters vs. hunters when it comes to competition.
  • How you can’t analyze churn by analyzing churn — i.e., gathering a list of churned customers and looking for commonalities.
  • The 90 day rule when it comes to new managers.

I hope you enjoy listening to it if you haven’t already. And for those who have, thanks for helping me make the top 10 list!

Kellblog’s Greatest Hits 2016-2019 per the Appealie SaaS Awards

I’ll be speaking at the APPEALIE 2019 SaaS Conference and Awards in San Francisco on September 25th and I noticed that in their promotions the folks at APPEALIE had assembled their own Kellblog’s Greatest Hits album from 2016 to 2019, complete with its own cover art.

appealie

When I looked at the posts they picked, I thought they did a good job of identifying the best material, so I thought I’d share their list here.  They also called me “a GOAT software blogger” and after playing around with acronyms for about half an hour — maybe Groove, OpenView, AngelVC, Tunguz? — my younger son swung by and said, “they called you a GOAT?  Cool.  It means greatest of all time.”  Cool, indeed.  Thanks.

Here’s the APPEALIE Kellblog’s Greatest Hits 2016-2019 list:

 

Kellblog's Greatest Hits 2016-2019 per the Appealie SaaS Awards

I’ll be speaking at the APPEALIE 2019 SaaS Conference and Awards in San Francisco on September 25th and I noticed that in their promotions the folks at APPEALIE had assembled their own Kellblog’s Greatest Hits album from 2016 to 2019, complete with its own cover art.
appealie
When I looked at the posts they picked, I thought they did a good job of identifying the best material, so I thought I’d share their list here.  They also called me “a GOAT software blogger” and after playing around with acronyms for about half an hour — maybe Groove, OpenView, AngelVC, Tunguz? — my younger son swung by and said, “they called you a GOAT?  Cool.  It means greatest of all time.”  Cool, indeed.  Thanks.
Here’s the APPEALIE Kellblog’s Greatest Hits 2016-2019 list:

 

Video of my SaaStr 2019 Presentation: The Five Questions Startup CEOs Worry About

A few days ago, Jason Lemkin from SaaStr sent me a link to the video of my SaaStr Annual 2019 conference presentation, The Five Questions Startup CEOs Worry About. Those questions, by the way, are:

  1. When do I next raise money?
  2. Do I have the right team?
  3. How can I better manage the board?
  4. To what extent should I worry about competition?
  5. Are we focused enough?

Below is the video of the thirty-minute presentation.  The slides are available on Slideshare.

As mentioned in the presentation, I love to know what’s resonating out there, so if you ever have a moment where you think –“Hey, I just used something from Dave’s presentation!” — please let me know via Twitter or email.

Slides from My SaaStr Annual 2019 Presentation (5 Questions CEOs Struggle With)

Thanks to everyone who attended my session today at the amazing — and huge — SaaStr Annual 2019 conference in San Jose.  In this post, I’ll share the slides from my presentation, Five Questions SaaS CEOs Wrestle With (and some thoughts on how to answer them).

The folks at SaaStr recorded the session, so at some point a video of it will be available (but that probably won’t be for a while).  When it is up, I will also post it to Kellblog.

In some sense definitionally, there were two types of people in the audience:

  • CEOs, who hopefully received some fresh perspective on these age-old, never-quite-put-to-bed questions.
  • Those who work for them, who hopefully received some insights into the mind of the CEO that will help make you more valuable team members and help you advance your career.

As mentioned, please send me feedback if you have examples where something in the presentation resonated with you, you applied it in some way, and it made a positive impact on your working life.  I’d love to hear it.

Here are the slides from the presentation.

SaaStr 2019 Presentation Preview: Five Questions SaaS CEO Wrestle With

I’m super excited for the upcoming SaaStr Annual 2019 conference in San Jose from February 5th through the 7th at the San Jose Convention Center.  I hope to see you there — particularly for my session from 10:00 AM to 10:30 AM on Tuesday, February 5th.  Last year they ended up repeating my session but that won’t be possible this year as I’m flying to Europe for a board meeting later in the week — so if you want to see it live, please come by at 10:00 AM on Tuesday!

saastr 2019

I’d quibble with the subtitle, “Lessons from Host Analytics,” because it’s actually more, “Lessons From a Lifetime of Doing This Stuff,” and examples will certainly include but also span well beyond Host Analytics.  In fact, I think one thing that’s reasonably unique about my background is that I have 10+ years’ tenure in two different, key roles within an enterprise software company:

  • CEO of two startups, combined for over ten years (MarkLogic, Host Analytics).
  • CMO of two startups, combined for over ten years (BusinessObjects, Versant).

I’ve also been an independent director on the board of 4 enterprise software startups, two of which have already had outstanding exits.  And I just sold a SaaS startup in an interesting process during which I learned a ton.  So we’ve got a lot of experience to draw upon.

SaaS startup CEO is hard job.  It’s a lonely job, something people don’t typically understand until they do it.  It’s an odd job — for what might be the first time in your career you have no boss, per se, just a committee.  You’re responsible for the life and death of the company.  Scores or hundreds of people depend on you to make payroll.  You need to raise capital, likely in the tens of millions of dollars — but these days increasingly in the hundreds — to build your business.

You’re driving your company into an uncertain future and, if you’re good, you’re trying to define that future your way in the mind of the market.  You’re trying to build an executive team that not only will get the job done today, but that can also scale with you for the next few years.  You’re trying to systematize the realization of a vision, breaking it down into the right parts in the right order to ensure market victory.  And, while you’re trying to do all that, you need to keep a board happy that may have interests divergent from your own and those of the company.  Finally, it’s an accelerating treadmill of a job – the better you do, the more is expected of you.

Wait!  Why do we do this again?  Because it’s also a fantastic job.  You get to:

  • Define and realize a vision for a market space.
  • Evangelize new and better ways of doing things.
  • Compete to win key customers, channels, and partners.
  • Work alongside incredibly talented and accomplished people.
  • Serve the most leading and progressive customers in the market.
  • Manage a growing organization, building ideally not just a company but a culture that reflects your core values.
  • Leverage that growth internationally, exploring and learning about the planet and the business cultures across it.

Basically, you get to play strategic N-dimensional wizard chess against some of the finest minds in the business.  Let’s face it.  It’s cool.  Despite the weight that comes with the job, any SaaS startup CEO should feel privileged every day about the job that they “get to” do.

But there are certain nagging questions that hound any SaaS startup CEO.  Questions that never quite get answered and put to bed.  Ones that need to asked and re-asked.  Those are the 5 questions we’ll discuss in my talk.  And here they are:

  1. When do I next raise money?
  2. Do I have the right team?
  3. How can I better manage the board?
  4. To what extent should I worry about competitors?
  5. Are we focused enough?

Each one is a question that can cost you the company, the market, or your job.  They’re all hard.  In my estimation, number 4 is the trickiest and most subtle.  There’s even a bonus question 6 – “are we winning?” — that is perhaps the most important of them all.

I look forward to speaking with you and hope you can attend the session.  If you have any advance questions to stimulate my thinking while preparing for the session, please do send them along via email, DM, or comment.

You don’t need to be a CEO to benefit from this session.  There are lots of lessons for everyone involving in creating and running a startup.  (If nothing else, you might get some insight to how your CEO might think about you and your team.)

I hope to see you there.

Video of my SaaStr 2018 Presentation: Ten Non-Obvious Things About Scaling SaaS

While I’ve blogged about this presentation before, I only recently stumbled into this full-length video of this very popular session — a 30-minute blaze through some subtle SaaS basics.  Enjoy!

I look forward to seeing everyone again at SaaStr Annual 2019.