Knowledge is Power 🧠
This week we are highlighting reports and podcasts with robust data and insights on term sheets, sales, pricing, and consumer tech.
Greetings! Happy Thanksgiving if you celebrate!
Since this is a short week for those in the U.S. and you might have a little more down time (depending on if you’re hosting Thanksgiving dinner and how much family “togetherness” you can tolerate 😉), we are switching up our format and timing to highlight longer reports and podcasts for you to enjoy over the break.
📄 Unpacking Term Sheets
In last week’s VC Minute episode 172, AJ highlights that financing terms are more than just valuations. “Closing Time”, a podcast hosted by Halle Tecco and Michael Esquivel, just released a short series titled “All About Term Sheets”. These episodes are a good expansion on what AJ discusses, providing very concrete and digestible advice on what founders should be looking for in any term sheet.
STV Take: A big part of the discussion in this series is that valuation is just one aspect to the term sheet. Optimizing for valuation and not other aspects, such as liquidation preferences for investors, can be detrimental to founders in the long term. As the market exuberance of 2021 has receded, down rounds are becoming a potential scenario for some. For founders confronting this situation, it’s best to just accept the circumstances and do a clean round at a lower valuation, rather than trying to preserve valuation but conceding to onerous terms that will haunt all future financings.
2023 GTM & Sales Benchmark Report
Lightspeed released their annual go-to-market (GTM) and sales benchmarking report. It highlights sales rep performance, utilization of AI-driven sales applications, and overall trends in revenue attainment for the companies surveyed. Interesting stats include:
There has been a 47% decrease in sales rep quota attainment for companies with an initial sale price of >$250K.
The majority of companies organize sales teams based on geography, regardless of initial sale price.
Fifty-eight percent of surveyed companies reported that “loss of project funding” had increased meaningfully among reasons for deals being lost in the last year.
STV Take: This report is an incredibly robust look at how sales cycles are evolving and how to think about sales team composition. While this is great data to benchmark against, one of the more interesting sections discusses the opportunity and challenges for companies looking to adopt AI-driven sales tools. The number one area companies cited as being meaningfully improved with an AI-driven sales tool? Not surprisingly, lead gen.
💸 The State of B2B SaaS Pricing in 2023
As Lightspeed’s report notes, sales cycles are getting longer, and this report from Paddle highlights how pricing and packaging play a critical role in navigating a tougher market (spoiler alert: it’s not just about being the cheapest!). The report covers four main areas—the current state of the SaaS market, how best-in-class leaders are researching the pricing process, the dominant pricing strategies, and the opportunity for value-based pricing in 2024. Below is one of (many!) graphs from the report that highlights the primary success metric B2B sales leaders are using:
STV Take: Deciding how to structure and price at the early stage is one of the most fascinating and complex topics for companies. It’s incredibly dynamic and evolves as a company and market does. For founders that might be experimenting with different options, this report has some great insights that might save them a step or two. For example, the decision to use a freemium or free trial model really depends on how quickly a customer/user can realize value, how big the target market is, and overall value prop.
🤖 The Future of Technology & Media in 2024
Activate Consulting released their annual report for tech and media in 2024—and whoa, talk about extensive! It includes predictions for consumer time and attention and ecommerce and B2B growth. Notable stats include:
Individuals spend 13 hours and five minutes on technology and media, which is expected to increase by 12 minutes in 2027.
“Super users” (those who spend >18 hours on tech and media) account for a disproportionately high share of ecommerce spend while also spending more per month on video, gaming, and music.
For monthly gen AI users, the most common use case is writing improvement.
STV Take: Even if you’re a founder of a B2B company, it’s still important to understand consumer tech adoption and trends. For many startups, the target user and/or customer is not someone deep in tech so understanding how the “average” person sees new tools is useful for thinking about adoption and marketing. My favorite section is the “Super User” section (pages 11-25). Finding those early adopters is essential for any company to get traction, and I found the stats around this group to be thought provoking in how companies might reach them.
😴 Decompression Zone
If you’re scrambling to find a last-minute appetizer to bring to Thanksgiving dinner, I got you! This sun-dried tomato and artichoke spinach dip is a crowd pleaser. I made it on a whim several years ago and always get requests for it. While it calls for gouda and fontina cheese, this recipe is super flexible. I usually use a combination of parmesan, gouda, and mozzarella. The recipe suggests crackers, but I (and most people I serve it to) think corn chips are a much better option.
👋 Have an awesome holiday!