The Ledger, every show

“They produce a nature-based PNL, not a function-based PNL, and you can't do SAS metrics off a nature-based PNL.”

“Templates build trust. Why? Because there's no cherry picking, and the most common form of misleading is cherry picking.”

“If you step back and take a more kind of macro view on it, you should try to raise money about every two years.”

“You know, one interesting thing about this phenomenon is you can often take the size of somebody's round and divide it by eight to 10 and get a pretty good approximation of their burn rate.”

“The perverse thing about this is, the better your category, the more likely that is to happen. If you're selling some very Focused vertical SaaS app, you're unlikely to find a spending arms race, right? But if you're in some horizontal platform category, peopl…”

“That's how you lose interest in meeting with a direct report, and I view the non-desire to meet with one as a huge warning sign that you should inspect.”

“And one of the things VCs do is pattern match, and if you don't channel their energy, you are likely to be pattern matched to death.”

“The number one cause of CEO death is misalignment with the board.”

“And the people who got you from zero to 10 are almost by definition figure it outers, right? If a scale it upper joined your company at zero million dollars, they probably quit pretty quickly.”

“Investors get diversification by investing in 20 of you. You don't have to be diversified, right? Diversification is their problem, not your problem.”

“The way to avoid it is three things. One, Well, really two things. Hire and empower strong architects. Too few companies have an independent architect, not the VP of engineering, who keeps an eye on technical debt and the architecture. Critical role to have on…”

“The U.S. Has geography and vertical industry, right, they're correlated. Like, if you're focused on pharma, you go to New Jersey, finance New York City, entertainment LA, and sometimes for a company, I actually recommend, even if you don't have to be verticall…”

“I literally did a consulting gig with a company that had 100 X pipeline coverage. Can you imagine? So their pipeline was a hundred times bigger, and they still missed their numbers. So, so think about that. And the answer is they don't have what I call pipelin…”

“If I bundle in free services into my subscription, I suck the air out of the room for the partners, right? Who's going to want to work with me? Because you give it away for free.”

“You don't want to raise money from a VC who wants you to be a billion dollars, and you want to sell it a hundred million. I've had friends who wanted to sell it a hundred million. VCs wouldn't let them, right? Because they'll say, no, we're blocking the sale b…”

“Monday.com, the Work OS, aren't they kind of a PLG company, product-led growth? Doesn't the product kind of sell itself? Well, they spend five times as much on sales and marketing as they do in R&D.”

“If the category hasn't formed yet, you're probably in a why-buy-one mode. Hey, I know there's this thing you never heard of. Let me tell you why you should buy one. If there is a category, and there's five vendors in it, and there's a magic quadrant, you're pr…”

“People want references who remind them of themselves. So, this is a large part of the whole Crossing the Chasm book, is you can't take a, you know, technology pioneer and reference them against a pragmatist. It doesn't work.”

“Alliances, which can easily account for 10 to 30% of your pipeline, usually that closes faster and with a higher rate”

“The way to solve that is two things. One, quarterly win-loss analysis at your QBR, right, hire a third-party firm, To analyze wins and losses, to bring reality back into the room, and second, this is done far less often, but I think even more important, a win-…”

“They teach journalists in journalism school that for any story it's about five W plus two H, right? Who, what, where, when, why are the five W's? How and how much are the two H's? I add a Third H for how different, because in tech, differentiation matters so m…”

“And I like messaging to be black and white, particularly when we're on offense, we want to be black and white. Only we have this. When we're on defense, we want gray. Right? Well, you have consolidation. Well, they have consolidation. You don't. Well, actually…”

“So this is the key to building simple, memorable messaging. I still, I launched Business Objects version six in 1996. I still remember the messaging. P-D-E. Why? Because it's in a ternary tree, right? So I firmly, firmly recommend using ternary trees to struct…”

“CMOs last one and a half, two, two and a half years. You're gonna be hiring one soon, whether you just hired one or not.”

“Net dollar retention, which I think is actually a more effective way to get at what churn is trying to measure.”

“In fact, if you only had two numbers to give you the value of a SAS company, it would be ending ARR and growth rate. I could then tell you roughly what that company is worth kind of a first order valuation.”

“To me when it's less than 20%, maybe you're not exploiting your expansion opportunity much, as much as you should be. When it's over 40% maybe you're not getting as much new logo as you should be, right? So, so I personally like it running in the twenties and …”

“So I like the CAC ratio very important SAS metric, you know, typically runs around 1.3, you know, below 1.3 is getting to be quite good. Below one is really good. Best I've ever seen was .4. Anything between 1.5 and two people start to scratch their eyebrows a…”

“VCs in general kind of like all-in-one metrics because they're trying to make an investment decision. I always feel like operators don't love these metrics as much because if it's too high, I don't know which side of it is broken, right? If my CAC payback peri…”

“In the VC side, frankly, I don't see as much recalculation, but when you meet PE people, they will literally take all your financials and just recalculate everything. You know, you're going to say your churn is, you know, only 10%. They're like, well, we'll fi…”

“It will drive on an ARR basis, epic net dollar retention, but on a revenue basis, ASC. So six will flatten it out. It will see right through this trick and you will just end up with a 120 K per year in gap revenue.”

“I think the next metric we're going to see private companies start to look at is now kind of second billing in public companies, RPO remaining performance obligation.”

“A good rate is around a 115%.”

“Some people are good at different phases of the company. That, that's a reality we must deal with, and just because someone was a right member of the team last year, doesn't mean they're a right member of the team next year.”

“First, you're working for a committee, not a person, and second, if you ever went to that committee going, gosh, I wonder what we should do next quarter, right? They would look at you and say, I think you should help us find a new CEO, right? Because you're su…”

“We need to separate kind of vision, which is kind of an end state goal for the company, from strategy, which is kind of a systematic path to get there.”

“All other things being equal in a financing round, you can have somebody who's very nice and very smart from a no-name firm, or somebody who is equivalent from a big-name firm, your future fundraising will be much easier if you pick the second person.”

“If you step back and take a more kind of macro view on it, you should try to raise money about every two years.”

“One interesting thing about this phenomenon is you can often take the size of somebody's round and divide it by eight to 10 and get a pretty good approximation of their burn rate.”

“That's how you lose interest in meeting with a direct report, and I view the non-desire to meet with one as a huge warning sign that you should expect.”

“And if you're CEO of the company, you cannot allow warring princes in your company. Everybody sees it. The whole company knows if two E staffers are at war.”

“What the board wants is for you to be a little bit uncomfortable with your team. The board wants you to be challenged by your team, right? The board wants you to hire people, quote unquote, better than you, or more experienced than you. Why? Because by and lar…”

“The more financial, i.e. Less operational they are, the more they care about two things, numbers and people.”

“If you're getting the board slides out 24 hours or less before the board meeting, you're not looking good, almost regardless.”

“The number one cause of CEO death is misalignment with the board.”

“Corporate finance departments don't actually scale that much with the size of a company, and the number of users of our kind of software actually varies much more with the corporation's centralization philosophy. So some big companies are super centralized, an…”

“You can get to one million with a bad idea. It's hard to get to 10 with a bad idea, right? So, so it's kind of a rite of passage to say there's a lot of risks taken out of it. If you can, you know, get to order a magnitude ten million in ARR there's a lot of r…”

“And we've won business literally for the cost of a 75 cent sticker. I met a CFO of a public company in a restaurant. One of my guys met a CFO of a public company in a bar. People just come up and start talking to you and wow, 75 cents.”