The Smedvig Capital team have been doing some reading around the role of Professional Services (PS) in the evolution of SaaS companies as they search for Product Market Fit and the holy grail of long term recurring revenue.
This was prompted by the observation that some of our SaaS investments have seen higher churn than expected despite strong new sales activity. This implies a mis-match between value expectation at sale and realisation in practice. Our hypothesis is that Professional Services is an essential tool to bridge that ‘expectation — reality gap’ in the early days of company scaling.
In this post, I will lift the hood and talk about what we look for when assessing new opportunities. We are constantly evolving our thinking, so would love to hear from you if you have any challenges or suggestions.
Above all we are investing in you and your team. This is about building a relationship and a shared excitement for your vision and mission. No scoring framework can capture this. …
The second article of our Navigating VC Series aims to help CEO’s answer the tough question of when and how much capital to raise.
Firstly, congratulations! If you’re thinking about raising a Series A, B, or C you are already in an elite group of high performing companies. In 2018, 288, 100, and 40 UK companies raised a Series A, B, or C respectively (Crunchbase).
Moving beyond seed is not easy. Of the 3.7k companies that have raised a seed round since 2011, only 29% have gone on to raise again (Beauhurst). So, well done on getting this far!
We had been observing the emergence of ‘app-commerce’ in retail for a while, and believed that this would present an opportunity for a new wave of platforms to dominate apps in the same way that the likes of Magento and Salesforce Commerce Cloud have come to dominate e-commerce.
We had been tracking Poq for over three years and we were confident that the product was far ahead of the limited alternatives in the space. …
Since SaaStock17, I’ve noticed a growing wave of SaaS products aimed at helping B2C businesses to take back control from aggregators. In this article I review what is driving that trend, and what the success factors will be for SaaS companies.
Over the last decade, most fragmented consumer service industries have become slaves to aggregation platforms. Last year, hotels gave away over $20bn in profit to Expedia and PriceLine. Open-Table made $226m from 31k restaurants in 2014. Take away outlets pay JustEat 14% of every order. With gyms it’s ClassPass, salons – TreatWell, taxis – Uber, and flights – SkyScanner…
Earlier in the year, I cycled over 300km from Paris to London to raise money for an amazing charity called Room to Read. I was riding as part of TechBikers — a group of 90+ cyclists from the UK technology ecosystem.
It was an awesome event. A great physical achievement and we raised over £60k, beating the record set last year. The ride was characterised by thought provoking conversations between entrepreneurs, investors and advisers.
We discussed many topics that I would have liked to write about, but one conversation in particular stuck with me. …
In January the government published a green paper on “Building our Industrial Strategy”. The report lays out 10 pillars consisting of wide reaching measures with implications for the whole economy. In my previous post I pulled out the proposals which I think are most relevant to the UK early stage tech sector.
In this post I wanted to discuss in more detail the report’s reasons behind those measures, some of which I agree with, some of which I don’t.
The strategy is principally concerned with improving the productivity of the UK workforce.
It reports that despite strong GDP growth since…
In January the government published a green paper on “Building our Industrial Strategy”. This week I got round to reading it and although it is long (132 pages) and far reaching, it does have some proposals relevant to the UK technology ecosystem.
I don’t necessarily agree with all of the report’s conclusions, but below I have summarised the key proposals that start-ups and investors should be aware of.
In my next post I discuss the main reasons behind these measures, some of which I agree with, some of which I don’t.
In my last two posts I explained why LTV:CAC and CAC Payback are the two most important metrics for SaaS startups and how to use them to interpret the health and potential of your business.
But what do we do if we need to improve either of these metrics?
Unfortunately there is no easy answer. There are limitless tools and tricks, but with imperfect information there is rarely an obvious ‘right’ answer. Even if there was, the right approach would be specific to each individual business situation, so there is no generic playbook for how to improve.
In practice you…
In my last post I presented LTV:CAC and CAC Payback as the two most important metrics for SaaS businesses.
LTV:CAC tells us how profitable a business will be at maturity and CAC Payback tells us how much cash it will take to get there. Therefore, these are the two most important metrics, and entrepreneurs should monitor them religiously.
Management should strive to improve these two metrics. But founders often ask us “how good does my LTV:CAC and CAC Payback need to be?”
In this second post of three, I will explain why for SaaS businesses to ‘work’, they need to…
Venture Capitalist at Smedvig Capital. Lead Series A and B technology investor.