SaaS Reading List for February: Raising Prices, Growth vs. Efficiency, Actionable Market Research

Blue Horizon’s reading list is a curated collection of articles for SaaS founders and management teams. We are entrepreneurs and operators who have lived through the process of founding and scaling software companies. Here are the articles and resources we found useful this month.

Zoom and Shopify Are The Latest SaaS Leaders to Raise Prices. They’re Not Alone.
by Jason Lemkin

If growth has slowed, like Zoom and Shopify, it almost automatically gives you a huge boost the next 12-18 months. And if growth is strong, like HubSpot and Atlassian — it helps ensure it stays that way in more challenging times…Raising prices isn’t always the easiest or best way to grow your NRR and your deal size. Oftentimes, adding an enterprise edition, or another product, or a critical feature you can charge for ends up adding more actual and perceived value. That customers are happy to pay for. No one is happy to pay a price increase, however. At best, they tolerate it.

Become Efficient or Die
OnlyCFO

While the growth-at-all-costs mindset is dead, growth is still really important if a company plans to fundraise again. Investors just now want strong growth AND efficiency. If a company isn’t ”default investable” based on its metrics then they need to do one of the following:
▪️ Extend cash runway long enough to get to “default investable”.
▪️ Move quickly to becoming “default alive” before running out of cash.

The Key to Making Market Research Actionable
by Dave Kellogg

First, create what I call the hypothesis file. This is a file where you write down, over the course of the year, every time you hear an assertion or a hypothesis that you’d love to validate…Second, to ensure high relevance, try to identify the core strategic questions you’re facing, whether they appear in the hypothesis file or not…To ensure you’re asking action-oriented questions, as you build the study, question-by-question you need to ask yourself, “what would I do differently based on the answer?”

Which Customer Segments are Healthiest During the Downturn?
by Tomasz Tunguz

Do public software companies with largely enterprise customer bases benefit from superior growth to their peers with mid-market or SMB focuses?
▪️ The data so far suggests the economic slowdown has struck across the industry similarly. Variations will surely emerge between competitors as a result of differences in product, execution, or strategy.