What’s the best way to prioritize?

Tomasz Tunguz (Partner at Redpoint Ventures)
Startup Best Practices 13 – Patience with Unit Economics

Mark Roberge, Chief Revenue Officer at Hubspot, recently shared with me how he instills patience in unit economics in his teams. 1. Adopt before you buy – develop a bottoms up product that people can try out and ultimately upgrade themselves without having to contact sales or support. 2. Product before people – focus on improving the product before hiring additional customer support or salespeople. The product has to stand on its own. 3. Individu… (read more)

What’s the best way to plan headcount for your sales team?

Tomasz Tunguz (Partner at Redpoint Ventures)
Startup Best Practices 13 – Patience with Unit Economics

Mark [Roberge, CRO at Hubspot] uses his sales teams’ performance to determine how quickly he grows the sales team. For example, a startup employing Mark’s strategy might have a $4k MRR quota for its five person sales team. The VP of sales would then tell the existing sales team, if they exceed $4. 5k MRR quota next month, there won’t be any incremental hires. And the quota then increase the next month to $5. 0k, and so on until the team can no lo… (read more)

What’s the best way to monetize?

Tomasz Tunguz (Partner at Redpoint Ventures)
The Common Characteristics of Successful Freemium Companies

Startups should consider freemium when four conditions are met: The number of potential free users numbers in the tens of millions. Freemium conversion funnels tend to be very lossy. On average, 1-4% of users convert to paid. 2. Free distribution is a competitive advantage in the market. 3. The product used by a free user has a simple and straightforward value proposition. Because customers are educating themselves, freemium products have a very … (read more)

What’s the best way to monetize?

Tomasz Tunguz (Partner at Redpoint Ventures)
The 3 strategies of freemium companies | A Founder’s Notebook

Successful freemium companies do three things: 1. They use free to market, educate and win mindshare. The Internet enables potential customers to research products much more deeply before engaging with a sales person. 2. They leverage usage data to improve their product. The large amount of users using the product enables A/B testing with statistical significance, a non-trivial strategic advantage. 3. They gather information about their customer … (read more)

What’s the best way to interview customers?

Tomasz Tunguz (Partner at Redpoint Ventures)
8 Customer Discovery Questions to Validate Product Market Fit for Your Startup

1. How did you hear about the product? 2. What process did you use to pick this product over the competition? 3. Why did you choose this product? 4. Which teams in the company use the product, and how has that changed over time? 5. How important is this product compared to other software? 6. How much do you pay? 7. How quickly is the product evolving? 8. To whom would you recommend this product?

What’s the best way to get more customers for your product?

Tomasz Tunguz (Partner at Redpoint Ventures)
How Customer Success Meaningfully Reduces Cost of Customer Acquisition

When discussing customer success for SaaS startups, the conversation focuses mostly on retaining customers and reducing churn. These are two fantastic benefits with meaningful return-on-investment. But great customer success organizations can meaningfully impact another critical part of the customer lifecycle, customer acquisition, by catalyzing evangelists to refer new customers.

What’s the best way to do sales?

Tomasz Tunguz (Partner at Redpoint Ventures)
The Innovator’s Solution for SaaS Startups – The Flywheel SaaS Company

There’s another, novel way of building companies that still isn’t very well understood. In this approach, the enterprise sales team is exclusively inbound. They are explicitly denied the option of seeking business outside the customer base, and must gin up business from only existing customers. The enterprise sales team is an up-sell and cross-sell team. In fact, so is the mid-market sales team. Only the SMB marketing team is permitted to acquire… (read more)

What’s the best way to do a reference check?

Tomasz Tunguz (Partner at Redpoint Ventures)
Anatomy of a Reference Check

Where does the referenced person shine? What kinds of work did the referenced prefer to do? What kinds of people does the referenced need around him/her to be successful? How is the referenced persuaded or convinced? What kinds of motivation does he/she respond best to? What is it like to work with the referenced day-to-day? How would you characterize your typical interactions? Would you hire or work with this person again? How highly do you reg… (read more)