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The end of free money, how to forecast NRR, slashing SaaS spending • TechCrunch


If you asked three different people if we were in a recession, you could easily get three different answers.

The word ‘R’ is frequently mentioned in the field of technology, a survey of 450 early stage founders found that only 12% plan to hire fewer workers and 6% have laid off people.

“The data is proving that early-stage founders are seeing a gradual approach to the downturn,” said Jen Neundorfer, founding partner of January Ventures.


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“It’s the opposite of some of the memos you see from Sequoias around the world that say, ‘cut instantly and cut deep.'”

80% of seed and pre-seed founders who responded to the survey in January are less than a year away. Only half of respondents said they plan to cut costs, “compared to 2020, when 81% of companies reported doing so,” writes Rebecca Szkutak.

Thanks so much for reading,

Walter Thompson
Managing Editor, TechCrunch+
@your main character

December 8 Twitter Space: Immigration law for startups

Lonely figure at the entrance to the labyrinth fence with the American flag in the center

Image credits: Bryce Durbin/TechCrunch

On Thursday, December 8 at 9 a.m. PT/noon ET, I’ll be hosting a Twitter Space with Sophie Alcorn, a Silicon Valley-based immigration attorney and author of to Sophiea column that appears on TechCrunch+ every Wednesday.

If you’re a laid off visa officer or if you just have questions about working and living legally inside the US, feel free to join the conversation.

This space is open to everyone: Click through to set a reminder and submit your immigration-related questions so we can raise them in the Q&A.

Use customer health data to develop and forecast future NRR

3D illustration of human brain in pink when lifting heavy weights.  Mind training and mental health concept.  Knowledge training.

Image credits: Osaka Wayne Film Studio (Opens in a new window) / Beautiful pictures

When investors are more interested in organic growth than writing the next check, desperate founders can set off on a quest to find a metric to rule them all, like one of the rings of power. force in Middle-earth.

Net revenue retention is a powerful metric for startups looking to reduce churn, which is why Kellie Capote, chief customer officer at Gainsight, recommends using the DEAR framework:

  • implementation
  • Engagement
  • adoption
  • ROD

Capote writes: “DEAR Customer Result Score allows you to connect workflows with leading metrics and lagging results.

“If you’re looking for a data-driven way to build confidence in your model with the executive team and board, this is it.”

Let’s go? The end of free money and the importance of keeping cash on hand

Image of white broken piggy bank on a red background.

Image credits: dimensional image (Opens in a new window) / Beautiful pictures

In simpler times, founders can often please investors simply by showing how quickly their company meets growth expectations.

“Investors today are less concerned with the future,” said Max Schireson, a managing partner at Battery Ventures.

“They care about how much money they need to invest in your company to achieve that future and when it will arrive.”

In a guest post for TC+, he shares candid advice and a variety of scenarios that can help founders meet investor exceptions during tough times.

“It is said that time cannot be bought, but in reality, time is the easiest thing to buy when starting a business.”

If you’re a start-up, switch to user-centric design to thrive in adversity

fit fit in the store being designed

Image credits: Tony C in French (Opens in a new window) / Beautiful pictures

I started paying more attention to a CEO who was using surveys to ask platform users what features were most important to them.

So far, it’s not going very well.

With a truly user-centric design, product managers gather as much information as possible to make sure they’re building for their audience — not for themselves.

“Now that investors are more demanding and write smaller checks, UCD can be the difference between getting your business going and going live,” said Adam Sandman, founder and CEO of Inflectra. or never succeed.

How companies can cut bloated SaaS costs

Bar chart image and ascending lines on a blue background to show sales growth to developers through a consistent data strategy.

Image credits: Ong-ad Nuseewor (Opens in a new window) / Beautiful pictures

A study conducted by purchasing management platform Vertice found that one out of every eight dollars that businesses spend is on SaaS products.

Kyle Wiggers reports: “It’s not surprising when you consider the average organization currently uses about 110 SaaS solutions. As a result, customers are spending 53% more on software licensing today than in 2017.

“Most organizations have significantly grown their software vendor portfolio over the past 10 years,” said Stephen White, director and senior analyst at Gartner. “No wonder that supplier category has more than doubled.”

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