By: Jeramey Jannene

Kobe Bryant on Leadership

Leadership is responsibility.

There comes a point when one must make a decision. Are YOU willing to do what it takes to push the right buttons to elevate those around you? If the answer is YES, are you willing to push the right buttons even if it means being perceived as the villain? Here’s where the true responsibility of being a leader lies. Sometimes you must prioritize the success of the team ahead of how your own image is perceived. The ability to elevate those around you is more than simply sharing the ball or making teammates feel a certain level of comfort. It’s pushing them to find their inner beast, even if they end up resenting you for it at the time.

I’d rather be perceived as a winner than a good teammate. I wish they both went hand in hand all the time but that’s just not reality. I have nothing in common with lazy people who blame others for their lack of success. Great things come from hard work and perseverance. No excuses.

 

By: Kyle @SuburbanDollar.com

Sales/marketing spend vs. Product development spend at recently IPO’d SaaS companies

As someone in the SaaS business, I am intrigued by the recent rush of SaaS companies that have IPO’d. The biggest two expenses in most SaaS business going for scale is product and sales/marketing. I wanted to know the proportional breakdown in spend on product dev and sales. So I made a Google Spreadsheet and filled in the numbers from the S1 filings of ten SaaS IPOs. Here’s how much each spent on sales/marketing for every dollar on product dev*:

  • Workday spent $0.97 on sales for every dollar spent on product / dev
  • Veeva Systems – $1.43
  • Marketo – $2.06
  • RallySoftware – $2.28
  • Eloqua – $2.31
  • ExactTarget – $2.52
  • RingCentral – $2.55
  • BazaarVoice – $3.16
  • ServiceNow – $4.36
  • Marin Software – $5.00

Workday is hailed as the model SaaS IPO and has been crushing it for many reasons. At least one of those “secrets” is that they can spend as much on building out their product as they must in convincing people to buy their product.

Deciding how to allocate resources between Sales and Product Dev is an especially difficult question for new SaaS companies. On one hand, spending significantly more on sales can help you hit near term numbers. But a significantly higher spend towards sales may be telling of  a larger problem: that there is less natural demand for your product. Smart investors and entrepreneurs should make a distinction of which one of the two it is.

Now, I don’t think a significantly higher spend for Sales/Marketing relative to ProdDev is always a bad thing, especially in cases where you can show high customer retention and lifetime value. In Workday’s case, their lifetime value is incredibly high because they deploy their solution to large organizations that pay them millions of dollars for a robust solution. But this also means that the Workday product must be that much advanced given its critical role in the day to day operations of its customers. Therefore, we find Workday’s spend on sales to be very close to their spend on product.

In contrast to the role Workday plays in the life of its customers’, a company that loses access to their BazaarVoice subscription is unlikely to suffer any significant organization-wide disruption. This naturally means that BazaarVoice is a much “simpler” product relative to Workday.

You can see my original spreadsheet here.

*Data is based on 3 full year numbers from the S1, typically 2010, 2011 and 2012 but not always

By: E. Dronkert

Is Google too lean for its own good?

Google announced the shut down of the Checkout product this past week. They’d like Checkout users to move to the latest shiny object inside Google Inc. called Wallet. The only problem? Google Wallet does not work for physical goods. And it doesn’t seem to have better customer service than PayPal. And it doesn’t seem to be an alternative to PayPal.

This got me thinking about a deeper issue with Google’s product strategy: Google is incorrectly applying the lean principles in mature categories where a more complete product is required to even get a seat at the table.

Let’s talk about the online consumer payments market…the same market that Checkout was attacking. It is a market that is in the midst of disruption given PayPal’s PR problems and the rise of Square, Braintree, Stripe etc.

Yet, while each of these companies have carved a niche and are “crushing” it in some manner, Google Checkout has been an overwhelming product failure. It was always a confused product with extremely weak positioning. The name “Checkout” suggests that it could be for ecommerce transactions. Yet, Checkout never had any special API or feature set that made it set apart from PayPal or the traditional merchant account experience. The typical Checkout experience consisted of linking out a customer to a Google page that collected the payment information. That is far, far from being seemless in the way that Stripe or Braintree or even PayPal’s advance offering.

Fast forward to Google Wallet. It reeks of the same kinds of problems as Checkout. There is no clear market positioning. Is Google Wallet like PayPal? Or is it like my credit card? Or is it meant to replace all my cards into one place? What is it really?

Unfortunately, I remain unclear even after reviewing the messaging on the homepage. In one screenshot, I see  a “Buy with Google” button. What does that mean? In another screenshot I see a “Claim Money” button. But I see no elaborate section that explains how I receive money. In contrast, PayPal has two very clear options on the homepage: “Buy” and “Sell”.

A headline on the homepage of Google Wallet screams “Start sending money in Gmail.” I use gmail all day long for years. But I cannot recall the last time I had an email open and I wished to attach money to it. It isn’t how we are used to thinking about transacting on the Internet. Now, Google’s got every right to innovate but making a feature such as this the focal part of your product’s pitch shows a fundamental misunderstanding or miscalculation of the market.

What’s the cause behind Google’s failure with payments? A post from May on the MobileWorld blog provides a few hints:

First there was Vikas Gupta in January 2012. About the same time Rob von Behren made departure, followed by Jonathan Wall and Marc Freed-Finnegan, who left to do their own thing. In June, Stephanie Tilenius left for a career in venture capitalism. Finally, last week it was the news that Osama Bedier had made an exit. Google has been losing its payments executives at a surprising rate since its launch in the autumn of 2011.