Layoffs and H1-B visas, SaaS growth levers, blockchain startup tips • TechCrunch
For cash-strapped SaaS startups trying to scale, the math doesn’t look good.
A decline in the public markets has dragged the whole sector down, but customer acquisition is not getting any cheaper. Meanwhile, runways are shrinking like a wool sweater in an electric dryer, and teams hoping to raise money have some good news to show potential investors.
So, what’s the plan?
“The key is to focus on scaling sustainably using more overlooked and undervalued sources of revenue,” says Paddle CEO Christian Owens.
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In his TC+ guest post, Owens shares several tactics “SaaS leaders can use to increase their expansion revenue,” such as adding upsell tiers and charging customers for priority support.
Just for a moment, forget about introducing new customers.
Early-stage startups that show strong gains in expansion revenue, i.e. money “generated after the customer’s first purchase”, will always get a second look from investors.
And increase expansion revenues during a downturn? Well, that’s even more impressive.
I won’t be sending out a TC+ newsletter on Tuesday, October 18th, but will be back a week from today with more resources for founders and early recaps from TechCrunch Disrupt.
Thank you so much for reading,
Walter Thompson
Editor-in-Chief, TechCrunch+
@yourprotagonist
Dear Sophie: How can I protect my H-1B and green card if I am laid off?
Image credit: Bryce Durbin/TechCrunch
Dear Sophie,
I am considering leaving my current permanent job for a job with a big name in technology. I’m excited but nervous.
I have heard that you can lose your H-1B status if you are laid off. Is there any way I can protect my immigration status while doing a bold job?
— Leap of faith
Dear Sophie,
My early stage startup has not been able to hire as quickly as I would like due to stiff competition. Now that we’re seeing some movement in the job market, we think we can probably finally compete for some top engineering talent in our budget.
How can I hire people who were recently laid off on H-1B?
— Strategic sponsor
DIY: 5 Ways Disruptive Components Startup Can Win Over OEMs
Image credit: Alan Rubio (opens in new window) / Getty Images
Hardware startup founders have a uniquely difficult time.
Only a tiny fraction of tech investors will even take meetings with them, and building product pipelines is often an erratic, chaotic process.
Instead of relying on sales and marketing teams to build a customer base for a hardware component startup, Ori Mor’s company began building devices that used the company’s technology.
“There’s no point in rushing when you’re building a hardware startup,” says Mor. “Instead, start by making just a single prototype that you can use to show OEMs.”
“Me too” investing is eating returns
Image credit: Catherine Falls Commercial (opens in new window) / Getty Images
Considering the number of investors who are all-in on e-commerce, fintech, cybersecurity, cloud infrastructure, crypto and B2B SaaS, a room full of VCs can look like a bunch of Spider-Man clones pointing at each other.
“Marc Andreessen once said that ‘software is eating the world,'” writes Alan Feld, founder and managing partner of Vintage Investment Partners.
“Unfortunately, ‘me-too’ investing is eating returns,” he says, suggesting that investors get out of their rut and explore “four relatively underfunded areas that could produce big winners over the next 10 years.”
How to go from popular to profitable in a downturn
Image credit: Patrick Giardino (opens in new window) / Getty Images
Product-led growth startups are like a car with a manual transmission that needs a push to start: A driver just can’t do everything on his own.
According to Nick Mills, whose sales experience includes stints at Stripe, Facebook and CircleCI, “all companies eventually face a similar challenge: To continue growing, sales teams need to be hired and a pipeline needs to be built.”
After explaining how to calculate your usable addressable market, AKA “the piece of the pie you can win right now,” Mills shows how to define product-qualified leads that will get your sales engines firing on all cylinders.
“Telling investors about your viral user growth is no longer enough,” says Mills. “They want to know how that translates into revenue, resilience and runway.”
TechCrunch Disrupt 2022: Take the BS out of your TAM
Every founder needs to understand the sector they intend to compete in, but calculating the Total Addressable Market (TAM) is a daunting process, especially for beginners.
In reality, TAM is just a planning tool that gives potential investors a better understanding of a company’s upside potential.
Next Wednesday, at TechCrunch Disrupt in San Francisco, I’ll moderate a discussion with three investors to find out how they approach TAM and what they look for during a pitch:
- Kara Nortman, Managing Partner, Upfront Ventures
- Aydin Senkut, founder and managing partner, Felicis Ventures
- Deena Shakir, Partner, Lux Capital
I’ll ask them to share tactics and strategies for finding TAM, how they calculate it for new products and services, and the red flags they most often see from newbies.
Be sure to bring warm layers if you’re visiting SF for Disrupt – if you can’t make it, please join us online.
6 tips for launching a blockchain startup
Image credit: Kinga Krzeminska (opens in new window)
It will take a lot more than a downturn in the public markets, record inflation and global instability to come between the blockchain founders and their dreams.
Unfortunately, “having a solid roadmap, real-world use cases and a war chest is only a small part of a blockchain startup’s survival strategy,” advises Wolfgang Rückerl, co-founder and CEO of Istari Vision and Entity.
While it’s true that many of the skills required to launch an early-stage startup also apply to web3 companies, “the road to success in the blockchain industry is paved differently,” he writes.
