Capital Chronicles #10

Being greedy with your GTM, a guide to ARR per FTE (the ‘GOAT’ of SaaS metrics), the best of Kellblog, and 2024: the year to be great

Author

Joshua Boccamazzo
July 09, 2024 • Reading Time: 5 minutes

Hello there! Welcome to Capital Chronicles, saving you hours every week with ~2-3 minute summarised insights from the best venture builders, investors and capital allocators out there. This week: Battery Ventures’ argue to be greedy with your GTM, your guide to ARR per FTE, the ‘GOAT’ of SaaS metrics thanks to OpenView/Mostly Metrics, the best of GTM expert Dave Kellogg, and why a16z believe 2024 is the year to be great.

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Now, read on for the latest…

🛠️ On venture building…

Being long-term greedy with your go-to-market, from Battery Ventures. The team argue logo velocity (the speed and frequency of acquiring new customers) is more important than deal size, especially in an uncertain macro-environment.

  • Why you should read it: we know revenue retention of 100%+ is what makes software companies so attractive, and customer expansion is what makes this possible. But counter-intuitively, the new vs. expansion tradeoff is a more nuanced conversation based on revenue scale and business maturity. The argument (which I agree with) is that acquisition is more indicative of product-market fit for early-stage companies and should be emphasized over expansion. Note: the article also provides useful benchmarks based on your revenue scale.

🧭 On venture investing…

Your guide to ARR per FTE, with Kyle Poyar from OpenView. Kyle provides a comprehensive overview with benchmarks (based on 700+ private software companies) and insights on how to interpret and improve this metric.

📖 Learning resource…

The Best of Kellblog from Dave Kellogg. A curated collection of his most popular and personally favoured posts from nearly 800 entries.

  • Why you should read it: as one of the enterprise software company OGs and a thought leader in everything go-to-market, I find myself continually referencing his material. The blog is based on his personal experience as CEO, CMO, and Board director for 10+ high-growth companies and covers a wide range of topics related to starting, leading, and scaling enterprise software startups across strategy, marketing, positioning, messaging, and management. Pick of few of his ‘all-time favourites’ (which are bolded) and go from there.

📊 Market insight…

The Year to be Great, by David George from a16z. David argues that after years of focusing on efficiency, 2024 is the time for growth-stage companies to strive for greatness.

  • Why you should read it: more than just a rallying cry to software companies, David asks: ‘how does greatness actually show up in your financials?’ To answer that question, the team analysed 78 companies founded after 2000 with a $5B+ market capitalisation to put some numbers behind why growth continues to be so much more important than operating margins for valuation. Note: this is on a relative basis, margins are still important!

🎲Lucky dip essential reads…

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Have a great week!

Josh

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