Tag Archives: SaaS

Why I Just Invested in Capbase, The Startup in a Box

Knowing who owns your company should be easy, right? Just keep a spreadsheet with the names and percentages and you’re all set!

Unfortunately, company ownership is a lot more complicated than that. Different investors buy in at different prices and different terms over time. 

That’s where Capbase comes in. Capbase can handle your incorporation, capitalization table (list of company owners), stock options and a lot more. Capbase is so advanced that when you raise a fundraising round, it can automatically update your cap table as the wire transfers come in!

It’s basically a startup in a box. And it’s taking over the industry. 

Very few corporations use any software solution to manage their cap table. In the future, I think all of them will. And Capbase is hard to beat. 

Best of luck to this awesome team!

More on tech:

Inside a Startup Accelerator Demo Day

What if Everyone on Earth Had Super Fast Internet for $1?

Why I Just Invested in Gauge, the Best Way to Sell Your Car

Photo: “wrapped gifts with string and paper tape scissors on wood table” by PersonalCreations.com is licensed under CC BY 2.0

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Save Money on Stuff I Use:

Amazon Business American Express Card

You already shop on Amazon. Why not save $100?

If you’re approved for this card, you get a $100 Amazon gift card. You also get up to 5% back on Amazon and Whole Foods purchases, 2% on restaurants/gas stations/cell phone bills, and 1% everywhere else.

Best of all: No fee!

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! 

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. 

Why I just invested in eyerate, the best online review tool

If you run a retail business, you know what a royal pain online review sites can be. Get one unreasonable customer, and all of a sudden their bad day is turned into your business nightmare. An angry one star screed torpedoes your average and you’re left to rebuild, bit by bit.

But what if you could capture ten times as many positive reviews from your happiest customers, cheaply and easily? And at the same time, you could motivate your employees to give the best service ever?

Well, you can. EyeRate, an innovative software startup from the Sacramento area, has created an incredible tool that both generates awesome reviews and motivates employees.

Here’s how it works:

1) Customer gets a haircut (or any other service).

2) Afterward, the customer gets a text message “You just saw Sarah. How was your experience? Rate us 1-5.” (Customer info pulls from the POS, so no need to enter anything.)

3) Customer texts back 5.

4) Customer is automatically prompted to post the review to Google, and does so with a single click.

5) Sarah gets a cash reward (usually $5-10 each time), which is automatically processed by EyeRate. The business owner doesn’t have to do anything.

By prompting happy customers to review you, EyeRate generates an average 10x increase in positive reviews for its clients. If a customer rates you less than a 4, the customer has the option to post OR share their feedback privately with the business owner and the message is forwarded to leadership to followup.

Where would you rather spend your scarce marketing dollars: expensive Google or Facebook ads with questionable usefulness? Or motivating your employees to provide great service and capture the awesome reviews, building your brand online and making your foot traffic skyrocket?

95% of consumers check online reviews before deciding which store to go to. Online reviews are also critical to your position in Google search. This is the where you will make or break your business.

I just invested in EyeRate, and the company is growing at warp speed for a reason: it produces reliable, massive increases in revenue for its customers that far exceed its modest monthly fee. Competitors like Podium and BirdEye can prompt a customer for a review and aggregate the data, but they can’t handle payments to employees, which is how you motivate them to give great service and ask for reviews.

Check out EyeRate today, before your competition does!

More on tech:

ONE OF THE HOTTEST TECH STARTUPS IN THE WORLD CALLS HOBOKEN HOME

WHY I JUST INVESTED IN GAUGE, THE BEST WAY TO SELL YOUR CAR

KEY METRICS FOR STARTUPS: CONSUMER VS. ENTERPRISE SAAS

Photo: “Symbols – Daytime, Barber Pole – Trinity Barber Shop, Storefront next to a Walton’s Restaurant, Other Stores, Pedestrians on Sidewalk” by MIT-Libraries is licensed under CC BY-NC 2.0

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! And please leave your comments at the bottom.

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

Palantir’s $100 Million Loss

Palantir released its earnings for the first quarter of 2021 today, and it’s not looking good. This 18 year old company that has never made a profit turned in a net loss of $123 million, versus $54 million in the first quarter of 2020.

This is actually a little better than the full year results in 2020, where losses reached nearly $100 million per month. But quarter on quarter, the picture is significantly worse. I’ll be curious to see if last year’s pattern of escalating losses through the year holds again in 2021.

Selling and general/administrative expenses held Palantir’s results down. I saw a similar picture in 2020, and one factor may be the extensive free trials they give customers. I question whether this business model can produce profits, especially given its long history of burning cash. Amazon and Google invested for the future and delayed profits, but not into nonexistence. Google was profitable in 3 years and Amazon in 7.

These poor results don’t seem to trouble CEO Alexander Karp, though. He took home $1 billion in compensation last year while the company lost a similar amount. Hey Alex, how about returning that so the shareholders can at least break even?

Dig into these posts for more on Palantir:

If you found this post interesting, please share it on Twitter/Reddit/etc. using the buttons at the bottom of the page. This helps more people find the blog! 

Save Money on Stuff I Use:

Fundrise

This platform lets me diversify my real estate investments so I’m not too exposed to any one market. I’ve invested since 2018 and returns have been good so far. More on Fundrise in this post.

If you decide to invest in Fundrise, you can use this link to get your management fees waived for 90 days. With their 1% management fee, this could save you $250 on a $100,000 account. I will also get a fee waiver for 90-365 days, depending on what type of account you open.

iHerb

The only place I buy vitamins and supplements. I recently placed an order and received it in less than 48 hours with free shipping! I compared the prices and they were lower than Amazon. I also love how they test a lot of the vitamins so that you know you’re getting what the label says. This isn’t always the case with supplements.

Use this link to save 5%! I’ll also get 5% of however much you spend, at no cost to you.

Misfits Market

My wife and I have gotten organic produce shipped to our house by Misfits for over a year. It’s never once disappointed me. Every fruit and vegetable is super fresh and packed with flavor. I thought radishes were cold, tasteless little lumps at salad bars until I tried theirs! They’re peppery, colorful and crunchy! I wrote a detailed review of Misfits here.

Use this link to sign up and you’ll save $10 on your first order. I’ll also get $10.

How Do You Know If a Startup Is Getting Traction?

Investors look at a lot of startups before laying a bet. But how do we know if the company’s product is catching on, or has failed to find traction? And as a founder, how do you know if you’re headed in the right direction or…nowhere?

In a recent episode of the superb podcast This Week in Startups, investor Jason Calacanis and guests Craig Zingerline and Allen Chen broke down a key metric: customer retention.

Do you have product-market fit? There’s no one better to answer that question than the people who use your product every day. Here are the customer retention numbers to look for, over a 6 month period, for different types of startups:

  • Consumer social (think Instagram): 25% is good, 45% is great
  • Consumer transactional (think Uber): 30% is good, 50% is great
  • Consumer SaaS (think Netflix): 40% is good, 70% is great
  • Small and medium business (SMB) and midmarket SaaS (think Freshbooks): 60% is good, 80% is great
  • Enterprise (big company) SaaS (think Oracle): 70% is good, 90% is great

As you can see, business-to-business products should be a lot stickier than business-to-consumer ones. Consumers are fickle and their investment is minimal. At the other end of the spectrum, major corporations don’t adopt new software lightly. It’s a process that sometimes takes years and costs a fortune. So they don’t switch often, either.

The panel emphasized that you don’t have to get to these numbers right away, but that they should be a goal. Good luck!

For more on startups, check out these posts:

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Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too!

Photo: “Jason Calacanis” by jdlasica is licensed under CC BY 2.0

Palantir Is Growing at a Snail’s Pace

Despite its lofty valuation, Palantir Technologies Inc. is barely growing:

In the fourth quarter, he points out, Palantir signed 21 deals worth more than $5 million, and 12 of more than $10 million. But he adds that it isn’t clear how many of those are actually new customers, as opposed to new projects with existing customers.

He notes that given total customer count went to 139 at year end from 132 one quarter earlier, it would seem that most of the new work is from previous customers. “New customer growth is what will ultimately be required to show the commercial momentum the market wants to see longer term,” he writes. “In this regard, the data is still mixed.”

Seven new customers, net, in 3 months? Not terribly impressive for a company with a market cap of $43 billion and a forward price/earnings ratio of 169. That ratio implies a company that is growing like crazy, not signing a couple of customers a quarter.

Other reports have indicated growth in their core government contracting business has slowed to a crawl. On the commercial side, 20% of revenue comes from a single customer. The business in general is concentrated in a handful of large customers, any one of whose departure would sting, big time.

Until Palantir grows at a rate to justify its buoyant stock price, I’ll be keeping my distance.

For more on Palantir, check out these posts:

If you found this post interesting, please share it on Twitter/Reddit/Facebook/etc. using the buttons below. This helps more people find the blog! And please leave a comment at the bottom of the page letting me know what you think and what other information you’re interested in!

Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too!

Photo: “PandoMonthly – April 2012 – Sarah Lacy Interviews Peter Thiel” by thekenyeung is licensed under CC BY-NC-ND 2.0

This Is How Startups Pitch Investors

You walk into the room, palms sweating. You go over your script in your head. You pray to God your computer doesn’t crash. Eyeing you skeptically are a bunch of grey haired money guys. Don’t screw this up.

At the very least, that may be how the public imagines the meetings where startups pitch investors. The reality isn’t quite so dramatic, especially now that virtually all meetings are conducted via Zoom. I just got off such a meeting myself with a Software as a Service (Saas) company that was looking to raise about half a million in funding. While I can’t discuss the specifics of the company, here’s an overview of what these meetings are like:

1) Intro: The founders describe what the company does, what the market is like, and how the company has grown so far.

2) Deck: The founders go through a slide deck (PowerPoint presentation) that provides further details on what their product does, what makes it different from its competitors products and the size and growth of the market.

3) Demo: This is when the founders actually show you the product in action. I found this part the most interesting. I remember doing software demos myself when I worked in the field, and invariably, something seems to go wrong that worked in rehearsal 1,000 times. But investors understand that, especially if you can get it working in a few minutes.

4) Q&A: The other investors on the call asked a lot about the competition. How is this company different from others in its area? What stops larger companies from shoving their way into the market, elbowing you aside?

I was immediately struck by what a small room one of the founders was in during the call. His chair appeared to nearly touch the door behind him. This brought a smile to my face: they’re not using investor money to pay themselves exorbitant salaries before the company is a clear success.

The other co-founder mentioned getting a refund of $30 from a vendor that accidentally overcharged them. I don’t think he was trying to make any particular point with this story…it was an incidental detail to a larger narrative. But it made a strong impression on me: these are frugal founders that will be good stewards of the capital they’re raising.

I can’t say for sure, but I think this company has strong odds of being funded by our investor group. The round is led by other investors and they’ll already be getting a substantial sum from them, in any event.

The competence and frugality of the founders, coupled with year-on-year growth in the hundreds of percent, is likely to convince a large number of investors.

For more on startups, check out these posts:

If you found this post interesting, please share it on Twitter/LinkedIn/email using the buttons below. This helps more people find the blog! And please leave a comment at the bottom of the page letting me know what you think and what other information you’re interested in!

Check out the Stuff I Use page for some great deals on products and services I use to improve my health and productivity. They just might help you too! 

Photo: “Rich Uncle Pennybags” by Sean Davis is licensed under CC BY-NC-ND 2.0