Hard Mode by Breaking SaaS

Hard Mode by Breaking SaaS offers expert insights into the Enterprise SaaS market, addressing investment strategies, valuation metrics, and market trends. It covers topics from interest rates' impact on SaaS multiples to AI advancements, financial forecasting, and IPO strategies for tech companies, focusing on the balance between growth and profitability.

Enterprise SaaS Market Investment Strategies SaaS Valuation Market Trends Interest Rates AI Advancements Financial Forecasting IPO Strategies Growth and Profitability Balance Regulatory Concerns

The hottest Substack posts of Hard Mode by Breaking SaaS

And their main takeaways

☁ God Bless Klaviyo

235 implied HN points • 01 Sep 23
💼 Business SaaS IPOs Metrics Pricing Efficiency
  1. Klaviyo's efficiency is part of their success with a high CAC Payback and low burn rate.
  2. Klaviyo's strong NRR of 119% is driven by price increases, customer contact growth, and new product launches.
  3. Klaviyo, as a purpose-built SaaS platform, combines data analytics and marketing to offer a unique solution.

☁ SaaS Revenue 101

176 implied HN points • 23 Aug 23
💼 Business
  1. Revenue forecasting can be simplified into new revenue, renewal revenue, and contracted revenue.
  2. Internal teams have more detailed information for forecasting compared to external teams.
  3. SaaS revenue forecasting involves understanding contracted revenue schedules, renewals, and new annual contract value.
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☁ Databricks & Enterprise AI

117 implied HN points • 31 Jul 23
🕹 Technology AI Data Cybersecurity Software Hardware
  1. Databricks made a bold $1.3B bet on acquiring MosaicML for their generative AI platform.
  2. Efficiency is key in using GPU capacity effectively, leading to competitive advantages.
  3. LLMs are now considered table stakes for data companies, with the focus shifting towards the importance of privacy in AI models.

☁ ARR Book 101: NRR, GRR, and Renewal Rates

39 implied HN points • 28 Nov 23
💼 Business
  1. Renewal rates track how much recurring revenue gets renewed.
  2. Gross Revenue Retention (GRR) shows how much ARR is retained.
  3. Net Revenue Retention (NRR) indicates the incremental revenue from current customers.

☁ Benchmarking 101

78 implied HN points • 11 Sep 23
💼 Business Finance Technology Strategy Investing Management
  1. Benchmarking helps you compare your company's performance with your industry peers and make strategic decisions.
  2. Choose the right benchmarks based on factors like size, growth, and time to ensure accurate comparisons.
  3. Find benchmarking data from public company SEC filings and aggregated private company reports.

☁ How to Build an ARR Book (Part 1)

39 implied HN points • 13 Nov 23
💼 Business SaaS Metrics Analysis Investment Training
  1. An ARR book is essential in SaaS analysis to track customer contracts and calculate key metrics.
  2. The underlying data for an ARR book comes from customer contracts, detailing customer information and contract specifics.
  3. To convert contract data into an ARR book, organize logos and periods, calculate ARR changes, and categorize them into New Logo ARR, Expansion ARR, Logo Churn, and Downsell/Shrinkage.

☁ "Nobody wants a Hiroshima moment"

58 implied HN points • 15 Aug 23
🕹 Technology AI Governance Cybersecurity Regulation
  1. Efforts are being made to regulate AI due to its rapid development and potential risks.
  2. There is a concern about rushing new AI products, especially in cybersecurity, which requires thorough vetting.
  3. Frameworks and resources are available to address risks in AI, such as categorizing high-risk scenarios and ways to attack LLMs.

☁ Datadog Q4: Platform vs. Optimization

58 implied HN points • 26 Feb 23
💼 Business Finance Technology Workshops Investing
  1. Announcement of SaaS 101 Live education workshops with a free 2-hour workshop covering Datadog
  2. Introduction of a shorter transcript focusing on key points of Datadog Q4, emphasizing on growth trends and financial results
  3. Discussion on Datadog's Q1 guidance, FY23 outlook, product innovation, financials, and customer usage patterns

☁ Adobe didn't buy ARR

58 implied HN points • 02 Oct 22
  1. Adobe's acquisition of Figma was not about buying ARR, but about obtaining a key asset for design dominance.
  2. Microsoft's interest in Figma highlighted a potential threat and the importance of distribution strategy in tech acquisitions.
  3. Building multi-user collaborative software is challenging, and Adobe's purchase of Figma shows the value of investing in engineering and design.

☁️ Brex ditches SMBs

19 implied HN points • 21 Jun 22
  1. Brex is no longer serving traditional small businesses, focusing on professionally funded startups instead.
  2. Brex's decision to target more profitable customers is influenced by the need for different product features and support.
  3. Investors favor Brex's shift towards software as it offers higher margins than interchange fees.

☁️ Week 9 Update

0 implied HN points • 06 Mar 22
  1. Cloud stocks declined by 7.2% for the week ending March 4, 2022.
  2. Sanctions against Russia led to a fluctuation in markets.
  3. Federal Reserve ready to adjust policy based on impacts of the Ukraine crisis.

☁️ Week 7 Update

0 implied HN points • 18 Feb 22
  1. Cloud stocks declined 7.9% due to geopolitical concerns.
  2. Markets reacted to Russia/Ukraine tensions throughout the week.
  3. Federal Reserve hinted at upcoming interest rate hikes.

☁️ Week 6 Update

0 implied HN points • 12 Feb 22
  1. Cloud stocks remained stable for the week.
  2. Travel-related stocks performed well due to declining COVID-19 cases.
  3. Highest CPI in 40 years led to increased concerns about higher interest rates.

☁️ 2022 Top SaaS Trends: Insights from 12 Cloud Leaders

0 implied HN points • 20 Jan 22
  1. 2022 will be a big year for Cloud with a focus on SMBs and efficiency.
  2. The CFO suite is getting more digitized attention in the SaaS industry.
  3. PLG strategy and data gravity are important trends in the SaaS space.

☁️ Market Conditions

0 implied HN points • 15 Jan 22
  1. Cloud stocks fell 3.4% last week due to concerns of high inflation and potential rate increases.
  2. Long-duration, hyper-growth tech companies have dropped 49% from their highs in Feb 2021.
  3. Reports indicate bullish signs for cloud spending, with companies still focusing on software, analytics, AI, and security.

☁️ 2021 Cloud Review

0 implied HN points • 05 Jan 22
  1. Cloud stocks declined in 2021 after years of growth
  2. Multiples played a major role in stock performance in 2021
  3. Investors are shifting focus to long-term margins in 2022

☁️ Pour One out for Cloudera ($CLDR)

0 implied HN points • 07 Jun 21
  1. Cloudera is going private in a $5.3B deal after struggling in the public market.
  2. Repatriating cloud loads could unlock $100B of market cap for SaaS companies.
  3. Enterprise cloud spending surpassed enterprise data center spending in 2020, showing rapid growth.

Fast 🖐: $FSLY 1Q21 Earnings Call

0 implied HN points • 22 May 21
  1. Fastly expects more pronounced summer seasonality with global reopenings
  2. Company has greater visibility into back-half of the year and expected growth
  3. Signal Sciences integrated into Fastly's unified contract, offering cross-sell opportunities

☁️ Who Let the $DDOG Out?

0 implied HN points • 09 Oct 20
  1. Cloud stock performance increased 2.2% for the week, outperforming the S&P 500 by 60 bps.
  2. Investors focused on SaaS breakouts like $TWLO and $DDOG, along with Payroll/HCM-focused names.
  3. Datadog's announcement of native Azure integration was a major highlight for investors, making onboarding simpler.

☁️ Tech or GTFO

0 implied HN points • 28 Sep 20
  1. Cloud stocks outperformed the S&P 500 in Week 39.
  2. Recent IPOs: $U on the rise, $FROG surpassing $SNOW, and $SUMO and $KC facing declines.
  3. Updates in tech sector: $SHOP data breach, Microsoft vs. Twilio, and CrowdStrike's acquisition.

☁️ $SNOW-ing on FAANMG parade

0 implied HN points • 24 Sep 20
  1. Cloud stocks outperformed S&P 500 in Week 38
  2. Zoom's stock rose while Fastly rebounded on TikTok news
  3. Snowflake's IPO was highly successful, attracting many investors

☁ ELi5: 409a

0 implied HN points • 14 Aug 22
  1. Cloud stocks rose 2.7% as CPI was lower than expected.
  2. 409a valuation impacts option strike prices for employees.
  3. Private company valuations are influenced by 409a valuations.

☁️ Week 5 Update

0 implied HN points • 05 Feb 22
  1. Cloud stocks increased by 4% in Week 5 of 2022, building on momentum from Week 4.
  2. Daily volatility continued for Cloud stocks throughout the week, with fluctuations in market performance.
  3. Big tech companies like Amazon and Google had strong and weak moments, influencing the overall stock market trends.

☁️ State of Cloud May 2022

0 implied HN points • 02 Jun 22
  1. Cloud stocks were down in May 2022 but some retailers performed well.
  2. Tech sector might be at risk due to possible economic slowdown.
  3. Focus on recurring revenue and efficiency in the SaaS sector during uncertain times.

☁️ Week 11 Update

0 implied HN points • 20 Mar 22
  1. Cloud stocks rose by 15.4% in week 11, 2022.
  2. Lockdowns in China initially impacted shares, but peace talks and a rate hike eased investor concerns.
  3. Dow, S&P 500, and Nasdaq had their best weeks since November 2020.

☁️ Week 8 Update

0 implied HN points • 26 Feb 22
  1. Cloud stocks recovered by 1.8% after a steep decline.
  2. Pressure from the Russia/Ukraine crisis affected markets.
  3. Markets saw a massive rebound, with Nasdaq and cloud stocks rallying.

☁️ To BTFD, or not to BTFD

0 implied HN points • 31 Jan 22
  1. Cloud stocks saw a 4-week losing streak break with a 0.6% gain.
  2. Factors like volatility and sector rotation influenced market trends.
  3. Experts remain divided on whether it's the time to buy the dip in high-growth software stocks.

☁️ Is it 2023 yet?

0 implied HN points • 10 Jan 22
  1. Cloud stocks fell 10.8% in the first week of 2022 due to potential Fed rate hikes affecting tech and high-growth sectors.
  2. Growth stocks are now underperforming compared to other sectors like regional banks, indicating a shift in market dynamics.
  3. Industry multiples are back to pre-covid levels, but growth multiples remain high, with questions surrounding how long they will take to recover.

☁️ SaaS Down YTD: What's Next? ($WCLD)

0 implied HN points • 27 Dec 21
  1. SaaS stocks are down 0.9% YTD, investors facing challenges with changing market dynamics.
  2. Cloud stocks are flirting with bear market territory, down about 19% from November highs.
  3. Investors now realize the importance of valuation, balancing impact of rising rates on high-growth stocks.

☁️ Move $FSLY... And Partner with Google

0 implied HN points • 24 Nov 20
  1. Cloud stocks dominated the market in Week 41 with significant growth.
  2. Investors were excited due to new partnerships, SaaS upgrades, positive earnings pre-announcements, and M&A activity.
  3. Fastly's partnership with Google Cloud led to a significant stock increase of 32.8%.

Data & Podcasts with Paul Vogel

0 implied HN points • 16 Sep 20
  1. Operations are normalizing post-Covid shock
  2. Margins in the music industry pose unique challenges for streaming services
  3. Spotify's focus on growth over profitability and long-term strategy

☁️ Superbubbles + other 2022 Predictions

0 implied HN points • 25 Jan 22
  1. Cloud stocks fell 6.8% and the Nasdaq fell 7.5% causing concern.
  2. There is a warning about being in a superbubble, similar to past crashes.
  3. Investors are looking for mega-trends like analytics, AI, security, and talent wars.

☁️ Parker Conrad is Back

0 implied HN points • 13 Jun 22
  1. High inflation is impacting cloud stocks, causing selling pressure.
  2. Rippling, led by Parker Conrad, aims to streamline HR & IT management in one platform.
  3. Rippling's strategy involves a compound startup model and a focus on employee data as a source of truth.

☁ FinTwit Round Up

0 implied HN points • 05 Jul 22
  1. Cloud stocks fell 7.4% due to consumer pressures and recession fears impacting 10Y rates.
  2. Understanding the role of a CFO involves providing strategic financial guidance to an entire corporation.
  3. The market is seeing a shift towards more focused founders who prioritize solving customer pain and product differentiation.