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Follow me on Twitter for my thoughts on startups and venture capital.

In 2019, the average person in the US spent over $640 on digital subscription apps. The proliferation of the subscription model comes from its key benefits, which include a predictable, recurring revenue stream and stronger relationships with users. A few years ago, I wrote a TechCrunch post highlighting the key metrics to measure the health of a consumer subscription business. In that post, I linked to a subscription lifetime value (LTV) model, which I’ve included once again here. Note that the model works best in Microsoft Excel.

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Follow me on Twitter for my thoughts on startups and venture capital.

As COVID-19 continues to spread, Zoom has emerged as the leading tool to help enterprises and schools continue to operate during the crisis. According to data from App Annie, over the weekend, Zoom eclipsed 500K daily downloads, a 5x increase from the baseline. A majority of this is driven by activity in China and South Korea, with recent increases in the US and European markets.

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Follow me on Twitter for my thoughts on startups and venture capital.

I’ve written posts in the past aimed at helping founders benchmark their revenue growth and sales efficiency. This new post is focused on helping benchmark SaaS operating expenses (S&M, G&A, R&D) in more detail. Are your expenses in-line with other peers at your scale?

Historically, I would guide founders to benchmark their growth and expenses by using the “Rule of 40” which is a formula to analyze the health of a software business. Simply put, your growth rate and profit margin should add up to at least 40%. While this is a helpful rule of thumb, it is fairly high-level and doesn’t differentiate between costs allocated to different parts of the business. If you aren’t meeting the “Rule of 40” benchmark, how do you know where to better optimize? …

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Congrats to Brex on announcing a $100M investment led by Kleiner Perkins Digital Growth Fund. Read more about the financing here.

In IVP’s Hyper-Growth Podcast series, IVP investors talk with CEOs from the fastest-growing companies to understand the ins-and-outs of company-building in the hyper-growth environment.

In our sixth episode, I speak with Henrique Dubugras, Co-Founder and CEO of Brex, the smartest corporate card in the room. With over $300 million in funding, Brex aims to rebuild B2B financial products, starting first with a corporate card for startups and now for e-commerce businesses. …

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Follow me on Twitter for my thoughts on startups and venture capital.

I recently published a post on revenue growth benchmarking for startups. The data is helpful to benchmark whether your company is growing fast enough to be on the path to IPO. The data on its own, however, ignores how much is being spent for that growth. It is easy to grow by spending wildly on sales & marketing (S&M), but growing quickly and efficiently is difficult to accomplish. …

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In 2017 I published a post summarizing the key learnings from Jeff Bezos after reading each of his annual shareholder letters. Key themes on the company’s philosophy include a focus on the customer, long-term thinking, and constantly raising the bar. Earlier today, Bezos released his 22nd annual letter. In this letter, Bezos discusses how much of Amazon’s success has been driven by the combination of building and wandering. Below I have summarized the key takeaways:

“Third-party sellers are kicking our first-party butt”

To begin the letter, Bezos shares a list of percentages which reflects the share of physical gross merchandise sales sold on Amazon by independent third-party sellers as opposed to Amazon’s own first-party sales. This ratio has grown from 3% to 58% and is reflected in the chart below. Amazon’s first-party business grew to $117 billion in 2018, up from $1.6 billion in 1999, representing a CAGR of 25%. At the same time, third-party sales have grown from $0.1 …

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Follow me on Twitter for my thoughts on venture capital and startups.

Last year I published a post on revenue growth rate benchmarking. Based on popular demand, I’m updating the post to include data from 2018. The updated data reflects historical revenue from 191 IPOs, including 31 new IPOs from last year. For this update, I’m presenting the data in a new format that allows for more granular benchmarking. Previously, the revenue was presented in ranges, but this iteration allows you to see percentile growth rates based on your company’s exact revenue.

A quick overview of the methodology:

  • Gathered historical GAAP revenue growth data from 191 enterprise and consumer IPOs between 2010 and 2018 (over 600 data points). …

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Ilkka Paananen, Co-Founder and CEO of Supercell

We are pleased to kickoff IVP’s Hyper-Growth Podcast series where we interview CEOs of the fastest-growing companies to discuss the ins-and-outs of company-building in the hyper-growth environment. In this podcast, I interview Co-Founder and CEO of Supercell, Ilkka Paananen. Supercell is a Finnish mobile games developer known for its hit titles Clash of Clans and Clash Royale which together have grossed over $8 billion since launch. The company is majority-owned by Tencent and is currently valued at over $10 billion.

In this episode, I discuss with Ilkka the company’s founding story, the crucial early pivot to mobile, Supercell’s decentralized structure, and the strong international strategy that has enabled Supercell to reach over 100 million people every day. …

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New York City has quickly emerged as a prominent hub for innovation and entrepreneurship. The city has a strong foundation of tech talent and early-stage venture capital firms, and is becoming a real alternative to the Bay Area for founders looking to start a business. Over the last few years, investment activity has more than quadrupled ($12B in 2017), round sizes have increased substantially (3x in 4 years), and we’ve seen an improved exit environment for venture-backed companies. …

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Editorial credit: Julie Clopper / Shutterstock.com (634308593)

Follow me on Twitter (@parsa_s) for my thoughts on startups and venture capital.

I recently published a post summarizing what I learned from Jeff Bezos after reading every Amazon shareholder letter. As I noted in that post, Bezos’ letters are incredibly thought-provoking and are a must-read for anyone interested in business or tech. This afternoon, Bezos released his 21st annual letter to shareholders and this edition is no exception. Bezos discusses the importance of having high standards in an organization and shares some of the key milestones the company achieved in 2017. Below I have summarized the top highlights.

The Importance of Having High Standards

Bezos kicks off the letter by thanking his 560,000 employees who come to work obsessed about the company’s customers and committed to operational excellence. He also thanks his millions of customers who continue to rank Amazon as #1 in terms of customer satisfaction. As Bezos has stated in the past, customers are fickle; they are loyal to a company until a competitor offers a better service. He states that customer expectations “are never static — they go up… Yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’”. In order to meet these rising expectations, Bezos stresses the importance of having high standards. He shares some of the essentials around what he’s learned about high standards inside Amazon. …

About

Parsa Saljoughian

vc @ivp | former growth pm @snap | studied @stanfordgsb, @cal

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