Tomasz Tunguz on Tomasz Tunguz

  • SaaS Freemium/Free Trial Survey is Here

    Earlier this year, I wrote about MadKudu’s analysis of free trials and asked if readers were interested in another benchmarking survey on the topic, and the response was overwhelming. Over the...

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  • Normalization of Valuations in the Public and Private Software Markets

    I’ve written quite a bit about the public market software multiples. They’ve increased to near historic levels with forward revenue multiples approaching 9x. As the public markets have...

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  • What Does AirBnB's 'Shares for Hosts' Idea Imply for Blockchain?

    Last week, AirBnB proposed granting their most valuable hosts shares in the company, much like employees. This requires a change in securities law. It’s a novel idea that has a history, promise...

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  • In Early Markets, Services Can Be a Competitive Advantage

    In early markets, customers prefer entire solutions, not best in class point products. These solutions often include significant professional services and education. At the beginning of a new...

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  • Our Investment in Gremlin - Leveraging Chaos to Create Resilient Systems

    Dr. Richard Cook, formerly an associate professor at the University of Chicago, published a paper in 1998 entitled How Complex Systems Fail. In his paper, Dr. Cook lists 18 observations from his...

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  • Three Observations About the Adobe/Marketo Acquisition

    About two years ago, Marketo was publicly traded and valued at roughly $1.1B. Vista Equity paid $1.8B to take the company private, a 64% premium. At the time it was taken private by Vista,...

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  • How the Economics of Professional Services Have Changed in Software

    A founder asked me recently if there were any trends in professional services across public SaaS companies. I had examined the gross margins and share of revenue from professional services about...

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  • Elastic S-1 Analysis - Another Open Source Monster

    Last week, Elastic filed their S-1 to go public. Elastic is a Dutch company founded in 2012. Just five years later, the company generated $159.9M in revenue. Elastic commercializes open source...

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  • Access is the Scarcest Commodity in Startupland

    The SEC announced last week that it wants to find ways to let Main Street investors access stage private venture companies. This news item underscores an important trend that is reshaping the...

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  • How SaaS Companies are Valued

    In a post earlier this week, I argued 1% of Salesforce’s revenues creates a unicorn. More broadly, I said that the biggest SaaS companies are so large, that they must have underserved customer...

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  • 1% of Salesforce's Revenue Makes a Unicorn

    Salesforce is worth $113 billion. 1% of $113 billion is $1.13 billion. ServiceNow is worth $34B and Workday is worth $33B. 3% of $33-34B is $1B. Atlassian is worth $20.5B. 5% of $20.5B is $1B....

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  • Why Fast Learning Curves are So Important to Startups

    Startups are business machines engineered to grow quickly. The forces of hypergrowth exert enormous strain on every aspect of the company. Internal break all the time as the company moults into...

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  • How Long Should Your SaaS Software Trial Period Be?

    How long should you let a customer use your software before they sign a contract? You could offer them a 7 day free trial. Or 14 or 21 or 30 or 90. Longer trials might be better. The customer...

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  • Are We Investing Enough in Our Managers?

    I met a seasoned executive recently. He made a bold claim. “Management is an art, and one that is overwhelmingly undervalued in Silicon Valley.” I wondered, are we investing enough in our...

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  • Jacob's Ladder in the Startup Fundraising Market - How Startups Today Skip a Round of Fundraising

    Jacob’s Ladder is a toy of thin wooden blocks attached by ribbon. If you hold it in your hand and rotate it to touch the second block, it seems to set off a cascade of blocks falling from the...

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  • Why Your Startup Doesn't Invest Sufficiently in its Differentiators

    There are three types of product features, a seasoned head of product told me recently. MMRs, neutralizers, and differentiators. MMRs are minimum market requirements; basic features that every...

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  • The Startup Founder's Almanac

    I first met Elad Gil when I became an associate product manager at Google. Back then, he had an unusual habit I noticed right away. Most people carry their laptop in the same way. The laptop is...

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  • this is is a test

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  • Timing Cashflows of Your Sales Commissions and Your Customers

    Your sales team is starting to close some terrific accounts. As your startup grows, your sales team will experiment with different sales techniques. For example, qualification, pricing,...

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  • Lessons Learned from 20 Years at the Leading Edge of SaaS

    Over the weekend, I read Tien Tzuo’s book, Subscribed. Tien is the founder and CEO of Zuora, and former CSO/CMO at Salesforce, where he started in 1999. He has been working in SaaS for nearly 20...

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