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.
When a financial slowdown approaches, the smartest businesses look for areas where their investment has the best leverage. Today, the greatest opportunity for efficient growth lies with Customer Success (CS) teams—the purveyors of customer loyalty. Key takeaways include:
▪️ Double down on customer retention during a downturn
▪️ Focus on your customers’ top three churn risks
▪️ Share customer stories across your organization
The #1 Question to Ask When Looking for a Startup Idea
by David Cummings
Startup ideas are everywhere. Entrepreneurs in the arena are uniquely attune to opportunities that would make their own business better. And, knowing what they now know about their current business idea and market, they can’t help but compare potential ideas and markets to what they’re working on. Often, they have ideas that are even better than what they’re doing, but they have too much momentum, progress, and scale to change course.
200% NDR: What Does it Take to Achieve this Stellar Milestone?
by Tomasz Tunguz
The key to sustaining high Net Dollar Retention (NDR) is ensuring the majority of the existing customer base continues to expand. As a company scales, renewal revenue begins to dwarf the new bookings. This is where longer-term product planning comes into play.
What Add-Ons You Can — And Can’t — Charge For
by Jason Lemkin
▪️ There will be product additions you can easily charge more for. Your customers want to buy it from you already.
▪️ Those you just have to include, and can’t charge more for. They become tablestakes, or the customers just assume it’s included in the price. And feel ripped off if it isn’t.
▪️ Those you might be able to charge more for, but only if they are much, much better than the standalone competition.
▪️ And … those your partners can charge for, but you can’t get away with charging for yourself.
OPEXEngine SaaS Conversations Recap
One of the eternal questions asked by CFOs is “what’s the optimal R&D spend as a % of revenue?” OPEXEngine’s current benchmarking shows that overall, R&D expense ratios do drop as companies grow over $IB – there are economies of scale as revenue increases, but interestingly, highly-valued SaaS companies actually spend a higher percentage on R&D than their peers in the same revenue size.
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