research

A book that I’ve read recently is Strategy Beyond the Hockey Sticks, written by Chris Bradley, Martin Hint and Sven Smith, consultants at McKinsey. This book covers the social side of strategy development and the common pitfalls executives experience. It introduces new ways to think about strategy primarily centered around bringing an outside view of your competitive landscape, and evaluating strategy in the theme of big moves. Perhaps the most insightful element of the book is the encouragement to take an outside view....

Customer churn refers to the rate at which customers stop using a company’s products or services. Within the SaaS environment, it’s simply the rate at which customers cancel their subscriptions. The two main measures of churn are: Customer churn Revenue churn These two metrics are often correlated but they have subtle differences. Customer-based churn is when the paying entity, be it an account or user stops using your service. Whereas, revenue churn encompasses less customer spending or plan downgrades....

But before we dive in, you may be wondering “what is an AB test”. Good question! Put simply - it’s when we split a segment of data (like customers) into two groups, and give them two experiences to see which they respond better to. So - why do we AB test? You might initially think to improve something, and I’d say you’re partially correct. There may be many reasons why we test, but the main reason is to reduce uncertainty....

Gross Margin is perhaps of the most followed metrics when evaluating software companies. Investors and companies themselves are absolutely obsessed with it In this article, we break down Gross Margin to figure out what drives it, and whether companies are actually rewarded for having a good gross margin. In my last article, I explored the relationship of Sales and Marketing expenditure to examine whether there is an ideal ratio of spend....

Sales and Marketing (S&M) and Research and Development (R&D) often compete when it comes to company budgeting. For budget managers and shareholders alike it’s interesting and beneficial to compare companies spend in this area to get insight into strategy and design budgets. A good start would be to look at how some of the largest US listed Software companies split their spending between S&M and R&D. This plot below illustrates that there is a large range of spending choices, right from Square through to Splunk....