4 Takeaways For Founders From Battery Ventures’ “State of the OpenCloud”

Relative to any other sector, the SaaS industry is uniquely transparent. This sharing of best practices means bootstrapped entrepreneurs – from Brazil to Boise – can become “self-taught experts” just by studying freely available playbooks, YouTube videos of sessions from SaaStr’s conferences (subscribe here), and slide decks.

In my opinion, the most informative and useful SaaS content “speaks for itself” and is well suited for future reference. The slides from Battery Ventures’ “State of the OpenCloud” event meet that standard. 

With too many examples from SaaStr Annual 2021 to call out specifically, here are 2 “Cloud talks plus decks” that I can imagine the Self-Taught Founder relying upon:

David Sacks On SaaS Org Charts

Full Session YouTube

Example Referenceable Slide + Full Deck:

Mark Roberge On The Science of Scaling

Full YouTube Session

Example Referenceable Slide + Full Deck:

 

The flagship deck from Battery Ventures’ recent OpenCloud event is an equally authoritative and durable resource.

While the entire Battery Ventures’ OpenCloud 2021 deck is worth reading, I wanted to call out 4 specific OpenCloud 2021 slides for the Self-Taught Founder:

#1 – Top of Funnel Conversion Rule of 20s

This 20-20-20 data is amazingly useful to that Self-Taught Founder building out their GTM operating model.

An important warning that is always worth repeating: DO THE MATH.

20% times 20% becomes 4%. Not that bad – 4% of the top of your funnel become active users. Unfortunately, multiplying that by a further 20% takes you down to 0.8%. So only 0.8% of the top of the funnel become paid users!

Importantly, translate that math further into how much “traffic” you need when every 1,000 “visitors” lead to only 8 paid users.

That math can be daunting.

Let’s assume you have a $2,000/month product (which is a healthy if high ACV for an early-stage PLG GTM motion) and need to grow your ARR by $600,000 to hit your plan, which translates to needing 25 new paid accounts. That requires 3,125 top-of-the-funnel “visitors.”

That is certainly doable… but in a noisy world with hundreds of SaaS companies competing hard for the same developers on GitHub, by no means is driving that “traffic” easy.

So when building out your forecast, do the math and work backwards to the top of funnel metrics you need under this 20-20-20 framework.

#2 – Product Qualified Lead To Marketing Qualified Lead Ratio

Just like David Sacks’ SaaS Org Charts talk + slides, this Battery slide on the evolution of PQLs versus MQLs by company stage is a great standalone reference point.

#3 – Cloud = Consistently Bigger Than Expected

By laying out how SaaS IPOs have consistently grown faster than expectations, this slide might inspire the Self-Taught Founder to invest in growth more aggressively, or recognize their total addressable market (TAM) will end up bigger than expected, or even hold out for a higher exit valuation. 

Related SaaStr Reading:

Why The Law of Large Numbers is Just an Excuse

Now back to the final call out from Battery Ventures’ 2021 “State of the OpenCloud”:

#4 – The Advantages of Consumption-Based Pricing

The favorable consumption-based pricing metrics on this Battery slide speak for themselves. And are very aligned with OpenView’s research on usage-based pricing.

The message is clear: if you can implement usage-based pricing, do it.

Bonus: More SaaS “Rule of 40” Data

The much lower R-squared (0.22 vs 0.63) of the “Rule of 40” versus revenue growth is consistent with our recent analysis that suggests the SaaS “Rule of 40” has declined in importance.

Additional Resources: SaaStr Annual 2021 Sessions Worth Studying

If you are that Self-Taught Founder looking for sessions to study, these curated round-ups from our 2021 conference might help you prioritize:

Scaling:

6 Top Sessions On Scaling From SaaStr Annual 2021

Marketing:

5 Great Marketing Sessions From SaaStr Annual 2021 with CMOs of Datadog, G2, BlackLine, Marqeta and Dave Kellogg

Customer Success:

5 Top Customer Success Talks at SaaStr Annual 2021

Product:

4 Great Sessions On Product From SaaStr Annual 2021 With CXOs from Box, Brex, Loom, and Slack

 

Published on November 8, 2021

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