📕 Flywheels over funnels; How to measure SaaS operating leverage; Nailing your value prop...

December 11, 2020
The SaaS Playbook

In just 5 years, The Morning Brew has emerged as one of the GOAT newsletters. Their growth to stardom is in large part thanks to their referral marketing mastery – 30% of their 2.5m million subscribers came through the channel. We aren’t saying that a referral program will work quite as well for your B2B SaaS product (newsletters charge time, SaaS products charge money) but if it can work even just 1/10th as well, it could be worth testing...

Strategy

🎯 We are big believers in flywheels over funnels because while funnels have an end state (paid customer), flywheels create a cycle and build momentum. The change to flywheels isn’t as drastic as you think – once a customer reaches the end of your funnel, add a couple steps like having them refer a friend, submit a testimonial, or sign up for your newsletter (all should increase stickiness). Redpoint Venture’s Tomasz Tunguz made an interesting point in favor of flywheels by looking at hiring practices. Once you bring someone on board, that isn’t your final interaction with them – you manage, cultivate, and foster that employee to improve their performance and attract future ones. Your customers should be treated no differently!

Finance

🏦 The management of your margins only becomes more important as you scale. We liked how the SaaS CFO addresses margin by spitting his P&L into two simple layers: gross profit and operating leverage. Gross profit is just your revenue less COGS, and should scale at a relatively similar rate as revenue. Operating leverage, on the other hand, should be closer to a fixed cost as you scale, growing at a much slower rate than revenues. Check out the equation below to calculate – the scale maximum for positive operating leverage is $1, meaning if you achieve $1 of operating leverage, you kept operating expenses flat year over year.

Customers

🤑 When it comes to customer success metrics (and really customer success in general) there are few more knowledgeable than Lincoln Murphy. He recently covered TTFV (Time to First Value), which is the time between the close of a sale and when that customer is onboarded. It’s a bit of an oddball in that it’s not a metric that businesses have complete control over – every customer has actions they must take to get up and running which you don’t manage. But by setting a goal (say 30 days) and working to get with your TTFV down to that number, you will will be able to measure exactly how much more quickly you can get users to their “aha” moment.

Strategy

🔨 When people discuss why B2B SaaS startups fail, the blame typically falls on a bad product or overly crowded market. But there are obviously lots of other factors and reasons in play, one being that founders’ can become overly focused on product, at the expense of the total business. So before going heads down on scaling, you need a solid foundation in place, meaning: cultivating your value prop, fine-tuning your revenue model, and understanding how you fit within the broader ecosystem. The strength of your growth potential hinges on how well you understand the nuances of those elements and how you blend them together.


Reads

💻 Time for a history lesson on one of the hot topics of today: digitization. As Ray Wang breaks down in “Disrupting Digital Business,” the shift to a virtual world started years ago, and didn’t just impact how we interact with people. It changed the foundation of the business world. To survive in 2021 and beyond companies have to understand we’re no longer built on an economy of products and services, but one of experiences and outcomes, and success now hinges on how well we keep our promises to deliver those things. Wang urges us to build an intention-driven business, noting that old best practices and processes aren’t enough. The best companies are building systems to predict what will happen next and how customers’ attitudes are changing.

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Previous Weekly Playbooks

March 5, 2021
📕 Why it’s time to retire the MQL; Board meetings for beginners; Expert outbound sales sequences...

Welcome to the end of the week. We’ve got some big news, as we’ve just launched a brand new website featuring a SaaS Playbook library! Now if you’re looking for great B2B SaaS content in a specific area, you can filter through our historical playbook features by topic to quickly find the best of the best. Historical features are being added as we speak so you should have access to the full library soon... excited to see what you think!

February 26, 2021
📕 The weighted Rule of 40; Navigating SaaS loan interest rates; F#ck Content Marketing

Happy Friday everyone. The job market has been slower than usual for obvious reasons, but we do have some open roles here at Scaleworks which we’re looking to fill. Namely, we’re searching for a Corporate Development Associate to help us find great products to invest in and awesome B2B SaaS content to share with you all. Give us a shout if you think you or anyone in your network might be a fit… Referral fees included!

February 19, 2021
📕 Get smart with sales intelligence; Hubspot hits $1B; Simple email marketing optimizations...

Morning folks, hope all our readers facing these winter storms are staying warm and safe right now. We’ll get to the newsletter shortly, but first we’d like to highlight a few organizations which are working to support Texans in need right now. There are links with information on how you can donate or help if you’re interested. 

  1. Feeding Texas 
  2. Crowdsource Rescue
  3. The Salvation Army
January 15, 2021
📕 Pricing as a growth lever; 10x approach to content marketing; How to scale customer segments...

Two weeks into the year is a bit early to identify any real 2021 SaaS trends, but that doesn’t mean we can’t take out our crystal ball and at least try. Onetool CEO Gordian Braun thinks the increasing number of SaaS tools will create chaos for end-users – more options and new, super niche verticals could result in overlapping features for products in different categories, making buying decisions more difficult. No-code tools (like Notion and Airtable) and workflow automation tools should also be on the rise as both are “simplifiers” that address the issue of having too many tools to handle. Let’s see how his predictions shake out...

January 22, 2021
📕 Customer-Led growth FTW; Breaking a billion; Solving product problems…

It seems like every year, there’s a debate on if Silicon Valley is the best place to launch your startup. In 2020, this conversation picked up even more steam because, well, we don’t need to get back into those details. We recently stumbled across this LinkedIn thread that gives some great arguments for both sides of the table. We’ve always been partial to building new tech ecosystems outside the Valley, but would love to hear what you think.

Alright, now for this week’s Playbook!

January 29, 2021
📕 How to measure your Power User Curve; Solving product backlogs; The Chief Customer Officer 2.0...

Howdy folks, and welcome to the end of the week! Today’s playbook takes a focus on customer-centric strategies, from unique methods to measure user engagement, to the best ways to gather and prioritize customer feedback. We also managed to wrap in not one, but two corny car analogies. Please forgive us, it’s the end of the month and we’re behind quota.

Have a great weekend.

January 8, 2021
📕 Amplifying content via thought leaders; The Adjacent Customer; “Obviously awesome” product positioning…

Happy Friday folks. We can’t be the only ones a bit behind on our 2021 business planning, so we thought you all might get some use out of this template from our very own Ed Byrne, which will help you review last year’s progress and set thoughtful 2021 goals. It’s a roughly two-day process that requires some buy-in from your team and serious self-awareness... let us know what you think!

November 20, 2020
📕 The rise of the pod people; Self-caring your way to effective leadership; Simplifying revenue attribution...

Tech startup culture is known for two things: brooding dev teams and amazing office snacks. Kidding (sort of). What’s actually at the heart of startup culture is breaking down norms and creating new solutions to perennial problems.

Speaking of problem-solving – we’ve got some great content this week on solving the internal struggles most startups face, from team structure to leadership burnout and revenue attribution.

November 27, 2020
📕 SaaS Black Friday deals; How Typeform built an A+ brand, Why you shouldn’t “just ship it”…

Good morning to those just waking up from a turkey coma, it’s time for your weekly serving of SaaS news. And, because we love a good deal, we suggest you check out the B2B SaaS blog’s 2020 Black Friday deal list. We know everyone is in 2021 planning mode, so hopefully, the ~200 discounted SaaS deals save you some dollars.

Enjoy the rest of the holiday weekend.

December 4, 2020
📕 Avoiding the SaaS Valley of Death; Hiring “scrappers”; How to become a trusted advisor...

With the new year on the horizon it’s time to start thinking about that 2021 hiring plan. It’s hard not to focus on a candidate’s resume when making hiring decisions, but remember, an impressive resume doesn’t tell the whole story. More companies are foregoing those with “expert credentials” in favor of teachable hires who are willing to take risks. An openness to risk is especially important to surviving in B2B SaaS, so our advice is to always look for scrappers.

December 11, 2020
📕 Flywheels over funnels; How to measure SaaS operating leverage; Nailing your value prop...

In just 5 years, The Morning Brew has emerged as one of the GOAT newsletters. Their growth to stardom is in large part thanks to their referral marketing mastery – 30% of their 2.5m million subscribers came through the channel. We aren’t saying that a referral program will work quite as well for your B2B SaaS product (newsletters charge time, SaaS products charge money) but if it can work even just 1/10th as well, it could be worth testing...

December 18, 2020
📕 Avoiding measurability bias; The Shape-Up method; The power of Pre-Suasion...

Happy Friday folks. This is our last Playbook before Christmas, so we’ll wish you an early happy holidays now! It’s been an eventful year to say the least, here’s to hoping 2021 brings brighter days (we’re optimistic). Cheers!

January 1, 2021
📕 Your intro to cognitive marketing; A SaaS growth simulator; Boosting retention with intent data...

Happy New Year folks! Can’t believe we actually made it to 2021, we hope you have a great start to the year. We’ve been working on some of our new year’s resolutions and have a couple nailed down: to better understand our customers and thoroughly testing our acquisition channels. We’re touching on both (plus more) today, hope you enjoy!