Top 10 in Tech — What to know for Week ending April 16, 2021

1. SaaS METRIC OF THE WEEK: CAC Understanding customer acquisition cost can help create, measure, and improve a growth strategy that can put a business on the path to profitability. Here is a deep dive into the whys, the whats, and hows of CAC.
2. MARKETPLACES: 2020 was a bit of a gut punch for many marketplace categories, I even (very optimistically) in a pre-covid newsletter mused what marketplace consolidation will occur in the upcoming year. Little did I know! a16z have just updated their Marketplace 100 and guess what? Consolidation was very much a thing: last year, four startups accounted for 76 % of consumer spending. This year more than 70 % of Market Value can be attributed to just one company (Instacart is the Covid winner) and 10% of companies from last year went public or were acquired. Ed Tech is also the newest category winner.
3. VENTURE CAPITAL: BOOM! Investments to US-based companies surged to a record high of $62 Billion in Q1 21 according to the PwC and CB Insights Q1 2021 MoneyTree Headline report (that’s up 62% from Q4 of last year) — to put this into context, it’s almost half of all money raised last year (and 2020 was a historical high). Deal activity is also up 14% YoY (1,735 deals) — great sign, unless you are looking for Seed $$’s, as deal activity is up in all stages except seed (which is down in comparison to Q4 of last year)
4. PRODUCT MARKETING: Marketing is a very broad practice, see here for a list of the separate marketing functions that can exist. So here is a very helpful dive into Product Marketing and specifically what the roles and responsibilities are of a Product Marketing Manager.
5. PERSONALIZATION: Did you know that marketing personalization can reduce acquisition costs as much as 50% and 87% of companies see a lift in key growth metrics when they employ personalization? SaaS marketers have been leveraging personalization to increase conversion rates, improve customer success, and increase the quality of sales/marketing funnels for some time so here is a great article from Chart Mogul on the (modern-day) personalization fundamentals.
6. DEATH TO EMAIL: Just kidding. Email is a long way from going bye-bye, we spend, on average, over 3 hours a day using it, so don’t rush out to delete your inbox just yet. Communication platform companies have been making this death-to-email statement for years though — looking at you Yammer. The irony is not lost as I’m sure many of you are suffering from intense Slack/Zoom/Teams fatigue. But guess what? These platforms are absolutely not going anywhere. A new (VERY Slack-centric) report from Slack shows the impact and importance of collaboration platforms in our new post-pandemic workplace environments: 40% of meetings can be replaced, 95% of Slack users say they prefer Slack to video calls when connecting with their team, and 100% of Slack users want to keep using Slack even after the pandemic!
7. RENEWALS: Existing customers are the lifeblood of growth in a SaaS business, so making sure they renew is an exercise in revenue efficiency. New customer acquisition costs about $1.10+ per $1 of ARR). Compare that to the cost of retaining or up-selling existing customers (about 12c-15c per $1 of ARR) — that’s 8 times cheaper. So take a peep at this article that not only lists 5 SaaS Renewal Best Practices but also explains how best to go about calculating renewal rates.
8. COMMISSIONS: How do you pay out your different sales channels? Commission levels of sales are pretty stable across sale types at about 10–14%. Commissions on renewals are only 3% and upsell is 9% — however about 50% of the time, this is not paid at all. (Bringing up another subject on how much revenue a Customer Service Manager can manage).
9. CSM ATTRIBUTION This is an extension of the last link above: How do you account for, or budget the cost, of a Customer Sucess team? The team at Gainsight dives deep into this question and comes up with some fantastic insight — even though the question itself is complicated and the answers end up being more non-monetary than you would probably like. Owning the renewal, up-sell, cross-sell are key delineation points between expense attribution across different departments who CSM teams may sit under.
10. CASE STUDY: Dropbox! I’ve been a big Dropbox user since inception — I was an early birder! As were they to Product Lead Growth strategies — they have a legendary story of 3900% growth in just 15 months! Just mind-boggling. Check out how they made all that happen.

POD OF THE WEEK: Customer churn is the bane of SaaS businesses — data can help understand the causes of churn and take action to reduce it.