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 week.
Practical Thoughts on Branding for Software Startups
by Dave Kellogg
Some startups put the cart in front of the horse. Don’t do that. Found a company. Create a product. Get product-market fit (PMF), i.e., determine some problem you solve for some person with some product. You don’t need a brand before you have PMF. Go get PMF. Go sell some software to prove there’s a market. Then you can start thinking about branding.
▪️ Targeting (Who Do We Sell To?)
▪️ Promise (Why Do They Buy From Our Company?)
▪️ Positioning (Why Do They Buy Our Product?)
▪️ Identity (Do We Look Like Us?)
▪️ Values (What Do We Stand For?)
▪️ Voice (Do We Sound Like Us?)
▪️ Awareness (“What percent have heard of us?”)
▪️ Perceptions (“What do they think of us?”)
▪️ Overall business software spend will still grow a stunning 11.8% in 2023, up from 9.6% in 2022, to over $900 Billion.
▪️ Cloud spending is still expected to grow even faster in 2022 than 2021,
▪️ And on a related note, CMO marketing budgets are still up across the board.
Improving free trial to paid conversions is more than just a couple of actions taken here and there. It’s an overarching strategy built by learning more about customer behaviors, creating better-informed customer profiles, identifying product features to emphasize, developing better onboarding practices, and personalizing details of free trial offers.
▪️ Know your customers inside out
▪️ Double down on what’s already working
▪️ Make your team your number one priority
How SaaS Companies Can Tell Their Story to Investors
by David Appel, Sage Intacct
Whether you’re communicating your story internally or externally, make sure your communications around your company metrics and story are:
▪️ Balanced. Use a selection of metrics that will allow you to maintain a crystal clear picture of business developments and shortfalls.
▪️ Preemptive. Proactively identify areas that need improvement, and outline a plan to improve them.
▪️ Detailed. Being specific about your metrics and performance allows you to better highlight your strengths and chart a course to correct your mistakes.
5 Interesting Learnings from Model N at $200,000,000 in ARR
by Jason Lemkin
▪️ 28% of Revenues from Professional Services — Dragging Down Gross Margins
▪️ Still not profitable after 23 years, but free-cash flow positive
▪️ Most customers use 2-3 of their Cloud products
Narrowing the sales & marketing focus to core ICP (ideal customer profiles) improves efficiency & mitigates churn. It may be worth tracking new bookings in the ICP as a percentage of total bookings to ensure team alignment. Doing more with less means finding customers who benefit disproportionately from your software.
Three common pitfalls
1. Analysis Paralysis
2. Being Overly Skeptical About a Deal
3. Delayed Implementation of Financial Integration
Blue Horizon acquires and invests in profitable software businesses with stable recurring revenue streams. The Blue Horizon platform combines long-term capital and industry expertise with an operating model that enables businesses and their leaders to focus on growth and profitability.