For cash-strapped SaaS startups trying to break even, the math doesn’t look good.
The downturn in the public markets has dragged down the entire sector, but consumer shopping isn’t getting any cheaper. In the meantime, runways are shrinking like wool sweaters in an electric dryer, and teams hoping to raise more money have some good news to show potential investors.
So what’s the plan?
“The key is to focus on sustainability at scale, using more neglected and underserved sources of income,” said Paddle CEO Christian Owens.
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In a TC+ guest post, Owens shares several strategies “SaaS leaders can use to maximize their expansion revenue,” such as adding higher tiers and charging customers for upfront support.
For a moment, forget about shaming new customers.
Seed-stage startups that show strong returns on expansion revenue, i.e., “money generated after the customer’s first purchase,” always get a second look from investors.
And does expansion increase revenue during a downturn? Well, that’s even more amazing.
I won’t be sending out the TC+ newsletter on Tuesday, October 18th, but I’ll be back a week from today with more resources for entrepreneurs and early recaps from TechCrunch Disrupt.
Thank you very much for reading
Walter Thompson
Editorial Manager, TechCrunch+
@your main actor
Dear Sophie: How can I keep my H-1B and green card if I am fired?
Image Credits: Bryce Durbin / TechCrunch
Dear Sophie,
I am thinking of leaving my current permanent job for a big name in technology. I’m excited, but scared.
I’m hearing you can lose your H-1B status if you get fired. Is there a way to protect my immigration status while I am doing a bold job?
– Leap of faith
Dear Sophie,
Due to strong competition, I was not able to hire early stage startups as quickly as I would have liked. Now that we’re seeing some movement in the job market, we think we can finally compete for some top engineering talent in our budget.
How do I hire recent H-1B layoffs?
– Strategic sponsor
DIY: 5 Ways Disruptive Startups Can Beat OEMs
Image Credits: Alan Rubio (Opens in a new window) / Getty Images
Hardware startup founders have a particularly difficult time.
Few technology investors take meetings, and building product pipelines is often an informal, chaotic process.
Instead of relying on sales and marketing teams to build a customer base for its hardware division, Orimore’s company began building devices that used the company’s technology.
“When you’re building a hardware startup, there’s no point in rushing,” says Moore. “Instead, start by making a single prototype that you can use to show OEMs.”
‘Me too’ investment is return.
Image Credits: Catherine Falls Business (Opens in a new window) / Getty Images
Considering the number of investors in e-commerce, fintech, cyber security, cloud infrastructure, crypto and B2B SaaS, a room full of VCs can look like a bunch of Spider-Man clones pointing at each other.
“Marc Andreessen once said, ‘Software is eating the world,'” says Alan Feld, founder and managing partner of Vintage Investment Partners.
“Unfortunately, ‘me too’ investing can eat returns,” he says, suggesting that investors get out of their misery and “investigate four relatively underfunded areas that could produce big winners over the next 10 years.”
How to go from popular to profitable during a recession
Image Credits: Patrick’s garden (Opens in a new window) / Getty Images
Product-Driven Development Startups Just like a car with a manual transmission that needs a push to go, one driver can’t do everything alone.
According to Nick Mills, whose sales experience includes positions at Stripe, Facebook and CircleCI, “All companies eventually face the same challenge: they need to hire sales teams and build a pipeline to keep growing.
After explaining how to calculate your serviceable addressable market, AKA “now you can win a piece of that pie,” Mills shows how to define product-efficiency leads that will fire sales engines on all cylinders.
“It’s not enough to tell investors about your viral user growth,” says Mills. “They want to know how that translates into revenue, resilience and runway.”
TechCrunch Disrupt 2022: Taking the BS out of your TAM
Every founder should understand the sector they intend to compete in, but calculating the total addressable market (TAM) can be a difficult process, especially for first-timers.
In reality, TAM is just a planning tool that gives investors a better understanding of a company’s underlying potential.
Next Wednesday, at TechCrunch Disruption in San Francisco, I’m having a conversation with three investors to learn how to approach TAM and what they’re looking for during a pitch.
- Cara Norman, Managing Partner, Upfront Ventures
- Aydin Senkut, Founder and Managing Partner, Felicis Ventures
- Deena Shakir, Partner, Lux Capital
I ask them to share methods and strategies for achieving TAM, how to calculate it for new products and services, and the red flags they often see from startup entrepreneurs.
If you’re visiting SF for the Riot, be sure to bring warm layers – if you can’t make it, please join us online.
6 tips for starting a blockchain startup
Image Credits: Kinga Krzeminska (Opens in a new window)
Weighing down public markets, inflation and global instability to get between blockchain founders and their dreams.
Unfortunately, “a solid roadmap, real-world use cases, and having a war chest are only a small part of a blockchain startup’s survival strategy,” advises Wolfgang Ruckerl, founder and CEO of Istari Vision and Entity.
While it’s true that many of the skills required for early-stage startups are applicable to Web3 companies, “the road to success in the blockchain industry is paved differently,” he writes.
