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.
Efficient Growth Marketing Just Got Cool Again
by OpenView Partners
Growth can still happen even if you are focused on efficiency…Companies are looking for efficient growth, not growth at all costs. The good news is: You can still build a great company during tough times. All you need is a little discipline. The next 12 to 18 months is when the best marketers will really shine.
So You Want to Improve Your Sales Efficiency
by Tomasz Tunguz
Three paths emerge from the equation:
1) Increase bookings: increase pricing without sacrificing sales velocity.
2) Improve gross margins: reduce infrastructure spending, eliminate software bills, and/or reduce customer success costs.
3)Decrease sales & marketing cost: increase quotas, focus on marketing channels with superior ROI (at the expense of exploration), and improve sales training/support.
Each strategy is viable. Teams should select the path or combination that suits their business best. But these strategies won’t impact the sales efficiency number the same way. Why? Convexity.
Your Guide to Growth Amid Uncertainty
by OpenView Partners
Keypoints from Kyle Poyar include:
▪️ Protect your core business – Retaining customers is more efficient than acquiring new customers.
▪️ Plan for different scenarios – Create scenarios around potential economic futures: no impact, economic ripple, recession, or a full economic reset.
▪️ Keep an eye on burn and cash runway – Aim to have enough cash for 18-24+ months of runway.
What Really Happened to SaaS in the ’08-’09 Recession
by Jason Lemkin
A lot of folks are talking about how things were in ’08-’09 and even ’00-’01 these days. I don’t think today is anything like those times. The amount of folks buying SaaS software is a force like we’ve never seen before, and even with some stock market drama, many top SaaS companies still trade at $4B, $10B, $20B or more just a decade after being founded.
Startup Ecosystem Optimism Post Correction
by David Cummings
The startup ecosystem is going through a normal course correction and will emerge healthy and strong. Startups that were on shaky ground will get washed out and startups that have the highest potential will get more capital and talent. Much like a forest fire cleaning out underbrush and providing nutrients for the soil, so too does this creative destruction make for a stronger ecosystem going forward.
Key points from Tomasz Tunguz:
▪️ As we navigate this bear market, I’m keeping my eye on broader market data points.
▪️ However, Salesforce announced yesterday that the company exceeded revenue expectations and maintained its annual growth rate. That should bode well for SaaS startups.
▪️ The rest of the group will report over the next 4-6 weeks. Their revenue performance and revenue guidance will reveal how software and infrastructure buyers’ behaviors are evolving with the economy.
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.