Michael Furlong

As a B2B SaaS VC 👩‍💻 and a huge data nerd 🤓, fewer things bring me more joy than a truly statistically significant analysis (600+ companies surveyed) of B2B SaaS metrics across early stage companies. Great work by our team at Emergence Capital! See comments for full report, and please let us know how we can make this better in the future!

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As a founder and CEO, I’ve learned that true founder-market fit isn’t just about understanding your industry, it’s about the tenacity to push through when the inevitable challenges hit. Budget freezes, talent moves, customer churn, investor pullback, lost sales, and product or service quality issues are all part of the journey. Startups aren’t linear; the road is bumpy, and you need to be ready to navigate the unexpected. Building startup businesses in any sector is difficult but surviving and thriving in the technology arena is not for the faint of heart. You can have the best product-market fit in the world, but without the grit to keep going when constant change is afoot, key talent departs, or when you lose a big deal you thought was in the bag, it won’t matter. Your deep understanding, experience, expertise and comfort of the market gives you an edge, but it’s the ability to adapt, stay committed and push forward every day that ultimately drives success. Tenacity isn’t just a trait... it’s the backbone of every successful founder. It’s waking up every day, hungry to improve, iterate, and win. A results and outcomes disposition is key. Founders who embrace the uncertainty and keep the faith are the ones who move industries forward.

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In case you missed it last week, one of my favorite SaaS benchmark reports was released. Thanks to High Alpha and OpenView for the work and having us as a partner! This thing is stuffed full of insights on everything from growth rates, net revenue retention, ARR per FTE, and more. You can't build a great SaaS business without it! https://lnkd.in/ghKT_tBY

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Early this year, we made tough changes at Brex to increase intensity, quality, and speed. 10 months later, after switching into founder mode, here’s how Brex is doing: 📈 Revenue growth accelerated nearly 3x in 2024, NRR up >15 points; burn rate down 70%. Customer acquisition up 50%; CAC paybacks improved 40%. 🏦 Enterprise business grew 91%, with NRR >130%. Now serving the largest organizations on the planet, with a combined market cap >$2.9T. ⚡️ 3 major product releases, 100+ features in each, and 4 new products in partnership with Stripe and Navan, serving startups through enterprises. NPS improved by 11 points. 🧠 Eliminated two layers of people management, elevating builders that operate at all levels and reconnecting leaders back to their craft. 💵 In 2025, we expect revenue growth to continue accelerating at scale, and to be the last year in which Brex burns money. … but the biggest change of 2024 is expecting nothing to ever come easy again. During our first 6 years of Brex, things just “happened.” We went from 0 to $100MM ARR in 16 months, despite many mistakes. This stopped being true in 2023, and it required a painful reset to bring our culture back into what it once was: a culture of builders, willing to go extra hard to build a generational company. This year taught me that taking the hard path, and running the company in a way that’s truly authentic to you, is worth the risk. The biggest risk of all is not gaining energy from the process itself – the only reliable source of energy to compound for decades to come. I hope this inspires other founders to make the changes they need to realize their company's full potential. ❤️ So grateful for everyone at Brex who made this year’s progress possible. Onwards! 🚀 Link in comments to read more.

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With quota attainment at 42.7% in Q2-24 (RepVue data), your comp plans matter more than ever. We hosted Gabe Rothman on #RevOps Lab to chat about about comp planning for complex scenarios. CONTEXT Background on Rescale: - Consumption pricing - Margin on deals fluctuate - Customer buy credits over time - Spend fluctuate The context above can create very complicated comp plans. Instead, Gabe and his team choose to what he refers to 1st principles: - Limit complexity - Be outcome oriented - Don’t overcommit - Bend reality to your will The outcome 1. Comp on bookings (new logo, expansion, renewals) - Easy to understand - Transparent 2. Hedge P&L risk for company - Compensation isn't a contract - Opt-out clause for deals where margin creates business risks 3. Excellence in Ops & Finance - Finance & Ops predict margin via Deal Desk - Commission is based on key business fundamentals - Reduces complexity for AEs Any tips on comp plans worth sharing? Comment 👇 -- 🔊 Listen to the full episode - link to RevOps Lab in my profile ♻ Share with your friends Thanks for sharing those invaluable lessons w/ our audience, Gabe! #revops #saas

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Hot Take… RIP #PLG, Long Live #SLG But before you throw shade, let me explain… 🔹 There are undoubtedly exceptions, I’m sure many will highlight monday.com, Freshworks, etc. 🔹 PLG works well for low ACV deals with low CAC… think SMB and mid-market customers. Target CAC payback <12 months 🔹 PLG is a fantastic top of funnel marketing channel for enterprise sales ⭐ But for 6-figure enterprise sales, you need enterprise salespeople pressing the flesh with customers

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Amplitude Announces Second Quarter 2024 Financial Results: - Second quarter revenue of $73.3 million, up 8% year over year - Annual Recurring Revenue of $290 million, up 8% year over year - Number of customers representing $100,000 or more of ARR in Q2 grew to 547, an increase of 10% year over year This quarter was all about meeting our customers where they are. In Q2 we took our Snowflake Native offering GA, doubled down on our open ecosystem, and unveiled a self-serve portal that makes it easier than ever to integrate with Amplitude. To our customers, partners, and Ampliteers, thank you! Your trust, partnership, and hard work is invaluable! #PLG #ProductLedGrowth #DigitalAnalytics #ProductAnalytics #Retention #Acquisition #Monetization

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Board meetings are a time when I am reminded about how product velocity continues to be key ingredient to success in SaaS. The most successful companies we've partnered with at Menlo Ventures don't just deliver, they dazzle, consistently outpacing the competition -- competitors can try to copy your product but not your speed! Why does product velocity create such a divide? Because when you're faster, not only do you improve, you inspire. Your customer become not just users, but fans. They can't wait to see what's next. We always hear that they "can't keep up with all the new features" (that also hit the mark!) and they end up rooting for the company to win. Competitors will never be able to copy that!

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There are so many vendors, and so much noise in the market right now. It's hard to tell what anyone does, harder to figure out who’s delivering value, and impossible to differentiate one from the next. I’ve been talking to a lot of VCs lately, and they all feel it in their portfolio companies - even good companies w/happy customers, great products, and strong net retention - just can’t get the market to believe (or pay attention to) to the success they are delivering for customers. It’s a huge problem - everyone is struggling to generate pipeline and opportunities, and struggling to win new business when they do get conversations. So what are we (as a market) doing about this noise problem? YELLING LOUDER (and more often) More emails. More calls.  Emails informed by intent data.  Emails informed by AI w/intent data context.  aiSDRs. Auto-dialers, AI-driven video at scale. Inbox creation/rotation/warming.  Signal-based emails. Microcampaigns. “Quick question”.  “Are you the right person?” “Q4 Priorities at %%Company_Name%%” You can have the most advanced technical outbound setup in the world w/Clay linked up to Unify linked up to HeyReach w AI Layers and Human Layers and waterfall enrichment, and all this (pretty damn) impressive/clever tooling, and could have downloaded the entire brains of Brendan Short and Mark Kosoglow and then trained an AI on them on how to set this ^ all up... But… the gains are only incremental at best, b/c the bigger problem is the channels (ie email, LinkedIn inbox, soon to be phone) are just bombed out. My inbox certainly is a mess - but interestingly enough - I’ve gotten so good at scanning/deleting an email about lead generation services that’s clearly AI-generated in about .35 seconds - that ironically I don’t actually get that many well thought out human emails. So what’s my prediction for what works for cold outbound in 2025? Well nothing really - again the channels are bombed out and anything that does work won’t be a silver bullet and will only be a small incremental improvement.  But if there is one thing that might sort of work in 2025… I think it’s a return to manually written, well-thought out outreach. And a whole bunch of dials :) Long-term I think we need to rethink the underlying problem of trust and attention in B2B though - there’s a whole lot of energy being wasted.

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Winning early GTM via founder led sales is an essential step in building a consequential start up. 🎯 But, while there are countless conferences focused on scaling GTM once you've hit a couple million in revenue, to date there hasn't been a conference focused on FOUNDER LED SALES and nailing the earliest days of GTM. 👀 😅 That ends now. 🙌 Pear VC has helped 100+ founders learn how to sell, how to build their 0-to-1 sales engine, how to get from $0 ARR to $1M ARR -- and now we're introducing the first ever GTM CONFERENCE for EARLY STAGE FOUNDERS. ⭐ "Zero to $1M: Winning Early GTM" will be held in San Francisco, CA this September 5th! ⭐ If you're at the idea 💡, pre-seed 🌰 , or seed stage 🌱 , this is the GTM conference for YOU. Come hear from Pear veterans, industry leaders, and successful repeat founders like Sanjit Biswas (Samsara and Cisco Meraki Co-founder and CEO), and leave with actionable guidance to supercharge your startup’s revenue from day 1. ​ ➡ APPLY NOW! Space is limited, and the early application deadline is July 15th. Pepe Agell and I will review applications on a rolling basis. 🚀 CANNOT WAIT TO SEE YOU THERE! 🚀 #earlystageGTM #zeroto1M #founderledsales

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Do you know how many hyper-growth public software companies are growing by over 40% this year? According to the latest June Guggenheim report… Zero. Not a single public SaaS company is growing over 40%. Do you know how many are growing their next twelve months (NTM) revenue over 30%? Also, zero! With that context, I was strategizing with my team on the most impactful ways companies can change their growth trajectory, and one thing we landed on solving immediately was time to integrate. If a company growing at 30% can pull in all net new integrations and thus revenue by just 1 month over the course of the year, it can increase its growth rate by almost 5%. For simplicity, assuming a $100M annual revenue, a 10% discount rate, and a 5-year valuation period, using a DCF, the company’s present value would not be 5% more valuable, but closer to 20% more valuable for all shareholders. The power of compounded growth rates. Game changer, and with just the smallest adjustments. That’s why smart companies are investing heavily in new customer onboarding and no-code, low-code technologies, like lightweight agents, hosted or embedded UIs, and more. The Socure team is ahead of the curve—ask our people about what we’re building and how we can help you accelerate your revenue growth.

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How to pitch: The company has zero traction —> “We’re early” You only have 2 customers —> “We’re working with design partners” You currently have no revenue but hoping some pipeline finally closes —> “we’re on track to exit this year at $3M ARR” You’re in the natural kill zone of a FAANG —> “We view them as partners rather than competitors” There’s no way the tech can actually work —>“We’re manifesting the future” And of course: One of your developers uses Co-Pilot to write some front end code —> “We’re an AI company”

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Would you hire a recently fired VP of Sales to lead the GTM strategy for your $500K start-up, especially if that candidate had absolutely no industry experience? Likely not, right? Well, LinkSquares did. And I bet they were happy with that decision! So, what's the story? How (and why) did Steve Travaglini (Pavilion 2023 CRO of the year) get fired from one VP of Sales role, after scaling sales from $0-$7M, only to lead growth at LinkSquares from $500K to $50M in ARR over the ensuing 5 years? In the clip below he talks about what he learned in the early days of their rapid growth and what he would change going forward. You can hear the entire episode for yourself on today's episode of The GOATS of Growth podcast, but if he were one of my candidates, here is how I would summarize his attributes: --Gritty --Resilient --Adaptable --Resourceful --Optimistic --Humble And, most importantly, a STRONG bias towards action which was, in opinion, the bedrock for their strong sales culture. Steve, I had been looking forward to interviewing you for a long time and I'm happy I finally got the chance. Thanks for being such a great guest! Please follow Steve to watch as he builds his own startup, Winrate, in public. Listen to the full episode here: https://buff.ly/3Cjhr6Q

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The journey from $1 to $10M in ARR is typically an exercise in finding your first channel-market fit as a GTM/Marketing leader and/or founder. After prioritizing the top 1-3 channels you believe are most likely to be a fit for your product, finding channel-market fit is typically an exercise in experiments and iterations. If you’re flying blind bc you don’t have the systems, processes, and data hygiene setup to measure and test quickly inside a framework, it’s going to be a difficult journey. Check out the podcast I did with the team at Evron for more mistakes to avoid on your journey from $1M to $10M ARR.

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When you're not in the board room, you're always wondering, "What's going on in there?". I have now worked with seven companies where I'd regularly present to a board, a mixture of PE and VC-led, and it's almost always centered around a few key topics. If you're meeting your numbers: - what's your future forecast  - how are you going to continue to grow - how will you grow faster and more efficient  - update on money in the bank and spend If you're not meeting your numbers (along with the things I mentioned above): - what is your plan to turn things around and meet your numbers (this includes new logo, back-to-base sales, and churn reduction) - what resources can they offer to help - do you have the right players in the right seat This is an oversimplification because many nuances are at play, but this is generally it. While board meetings can be stressful, almost every board I've worked with wants to be helpful. Of course, their interest is, first and foremost, that the business is healthy and growing, so there's always that undertone, but overall, they want to help. After all, they are guardians of the investments they make on behalf of others and have to report back on their performance. Think of them like they are CSMs for their investors (the folks that give them money). They need to get a great return on the investment they made on their behalf.

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SaaS Buying Behavior Has Shifted: What Software Founders Need to Know The landscape for software purchasing has changed dramatically since 2021. Companies are no longer buying software for every need—instead, they’re categorizing products as either "nice-to-have" or "must-have." Here's what that means: Scrutiny is Higher Than Ever: Every purchase is heavily examined, with CFOs, head of sales, and RevOps teams now playing key roles in the decision-making process. Must-Have or Bust: If your SaaS product isn’t essential, you’re at risk. Companies demand solutions that solve critical problems. The game has changed. Has your SaaS strategy?

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Many SaaS solutions resonate most with directors/VPs/department heads. For the past 5+ years the approach for selling to these folks was to get them very excited about your solution and price in such a way that they could get a deal done with minimal sign off. In enterprise this could run as high as 500k. Now, there is scrutiny on 25k deals. Smart sellers realize this and are running a totally different play. A little different flavor of the traditional top down model. These folks are still doing well. Folks running the old playbook? In struggleville. P.S. - when times are hard it’s actually easier to do big deals…if you know how to sell transformations.

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"All this implies that the 'AI transition' needs to happen very delicately and thoughtfully" ... which implies if you're a start-up founded in ~5-18months ago and have a path to $1M ARR, you have a window to force-the-hand. The name of the game is speed-of-execution. Actualize that your competitor's features are now commodities, disrupt not their product but their business model, offer the commodity for free, and accelerate their own cannibalization so quickly that it destroys them before it can save them.

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Amplitude Announces First Quarter 2024 Financial Results: - Fourth quarter revenue of $72.6 million, up 9% year-over-year - Number of paying customers grew 37% year-over-year to nearly 3,000 - Free cash flow margin up 7 percentage points YoY We’ve been up-leveling our GTM strategy over the last year, and Q1 was all about execution. Our self-serve account is attracting diverse customers, our named account strategy is seeing early promise, and we're building healthier and deeper relationships with our customers. We also continued to innovate. We released Session Replay and are making it easier than ever before to get started with Amplitude. As always, I’d like to extend a massive thank you to our awesome Ampliteers, partners, and customers—your partnership is invaluable! #ProductLedGrowth #DigitalAnalytics #ProductAnalytics #Retention #Acquisition #Monetization Spenser Skates Christopher (Criss) Harms Kristina Johnson Francois Ajenstat Shadi Rostami Shintaro Matsui Nathaniel Crook Tifenn Dano Kwan Jenna Schwalbe Elliott Chris Sharp Daniel Carpenter Rachel Courtney Jonathan Anderson

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