Christoph Janz, a venture investor and former Zendesk early backer, writes about SaaS metrics, fundraising, and building large software businesses.
HN commenters cite it as a useful source on SaaS markets and metrics, especially the 'five ways to build a $100M business' post.
This post mostly applies to hunting deers and rabbits[1]. Elephants and flies are different.
The concern with new founders working on enterprise products is that it's very easy to convince yourself you're building for the enterprise when you really aren't. RethinkDB is case in point -- it's not the type of product you sell to a CIO (even with MongoDB, very few if any large organizations run on it -- it's mostly limited to silos). We found that we could capture at most $100k in value annually, and $1m contracts were ten years away.
My advice would be to either (a) not start enterprise companies unless you really know what you're doing, (b) start enterprise companies with consumer adoption models (Slack), or (c) if you must start an enterprise company, get really spectacular advisors who regularly spend enough time with you to understand your business intimately, and then listen to them.
[1] http://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html
> The enterprise playbook is to sell on slides, iterate with a few customers and go after even bigger customers.
I would call this product discovery and development with early adopters, something I hope every startup is doing. I've also seen this be called a Lighthouse program.
> Managing enterprise customers is easier than managing thousands or small companies. And it also create a natural barrier to entry
I definitely get the appeal. To build a billion dollar revenue (not valuation) venture scale company, you can either get 1000 users paying you 1M dollars each, or 1M users paying you $1000 each [1].
It's just painful as a relative early customer to get priced out and no longer be the target market for a company, especially when it has set its eyes on exponential growth and starts to see the SMB market as a means to an end.
[1] https://christophjanz.blogspot.com/2014/10/five-ways-to-build-100-million-business.html
The API is something we're exploring alongside the all-in-one HR & payroll product.
With the API you get much higher volumes for a lower price. It's mice vs. whales! See here for what I'm on about: http://christophjanz.blogspot.com/2019/04/five-years-later-five-ways-to-build-100.html
As far as how well financially one model turns out to be vs the other, I think a lot of that depends on market size. I do wonder how big the market is for a payroll API. Though we've come across some interesting applications (employer of record companies, accounting firms, hr products etc).
The cool thing that I've always liked about API businesses, is that it's like building really fertile ground for new things to arise that don't even exist yet.
Interesting to think about what new modals could bloom over a fully-featured payroll API
I consider David Skok's article on SaaS metrics[1] to be the best articulated and actionable source on this topic. It contains definitions of metrics, why they're important and even an Excel template that I've adapted to run my own SaaS business on. His article on the impact of churn on SaaS businesses[2] is also a must read even if you think you have a handle on it.
Another great source is Christoph Janz's blog, in particular his KPI dashboard for early-stage SaaS startups[3].
[1] http://www.forentrepreneurs.com/saas-metrics-2/
[2] http://www.forentrepreneurs.com/why-churn-is-critical-in-saas/
[3] http://christophjanz.blogspot.co.uk/2013/04/a-kpi-dashboard-for-early-stage-saas.html
I just recently rebuilt our KPI dashboard for Blossom.io and read through the following spreadsheets/posts/pdfs …
* Christoph Janz – http://christophjanz.blogspot.de/search/label/financial%20plan
* David Skok – as mentioned in the article (http://www.forentrepreneurs.com/saas-metrics/)
* Ryan Carson – http://bit.ly/9w8eJ5 (talk: http://video.seedcamp.com/video/867124/seedcamp-week-2010-metrics-for)
* Bessemer Venture Partners – http://www.bvp.com/cloud
Had a ton of a-ha moments and learned a lot. Highly recommended.
Some tech blogs:
Benedict Evans: http://ben-evans.com/benedictevans/
Hunter Walk: https://hunterwalk.com/
Coding Horrow: https://blog.codinghorror.com/
Feld Thoughts: http://www.feld.com/
Mattermark: https://mattermark.com/
BEN THOMPSON: https://stratechery.com/
The Angel VC: http://christophjanz.blogspot.com/