Buck on Software

Buck on Software focuses on the SaaS industry, discussing its growth challenges, investment dynamics, and strategic insights for companies. It explores themes like market saturation, the impact of funding, competition, incremental growth strategies, and the evolving nature of SaaS services, including vertical integration and the role of APIs.

SaaS Industry Trends Investment and Funding Company Growth Strategies Market Competition Vertical Integration APIs and Technology Software Efficiency Economic Impacts on SaaS

The hottest Substack posts of Buck on Software

And their main takeaways

The Software Slog

884 implied HN points • 20 Mar 23
🕹 Technology Software Tech industry Venture Capital SaaS Investing
  1. The software industry may be facing a period of slow growth and low returns, akin to a tiring and boring slog.
  2. Consensus estimates predict a rebound in SaaS growth, resembling past historical market cycles.
  3. Zombie SaaS companies, sustained by oversized funding, create challenges for non-zombie competitors in terms of price competition and talent acquisition.

Don't be foie gras

550 implied HN points • 09 Jan 22
  1. Don't overfund initiatives in a company, healthy competition is key.
  2. Successful software companies maintain high revenue efficiency.
  3. Building a culture of efficiency early on can lead to long-term success.

The Wrong Bet

530 implied HN points • 10 May 21
  1. The SaaS market is evolving from being highly attractive to somewhat attractive with factors like lower incremental margins and more competition.
  2. Investors are valuing companies based on past growth rather than considering the changing market conditions and future challenges.
  3. The current dynamics in the software market resemble the semiconductor industry from 2000-2015 with increasing competition and higher costs.

Vertical Aggregation

314 implied HN points • 12 Oct 21
  1. Vertical Aggregation in SMB SaaS is becoming more attractive due to fragmented supply chains.
  2. APIs for various services are reshaping how businesses distribute and bundle services.
  3. Vertical SaaS companies are evolving into banks or vocational training providers to serve their industries better.

23 things you should know

412 implied HN points • 29 Apr 21
  1. Management's confidence shown by speed of hiring
  2. New sales heads bring next year's revenue
  3. Analyze product-led growth SaaS like internet usage
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Explaining the growth software sell-off

235 implied HN points • 07 Mar 21
  1. Growth stocks are sensitive to changes in cost of capital, impacting their valuation
  2. SaaS investing focuses heavily on the terminal value to determine stock value
  3. Increased cost of capital affects fundamentals, like hiring and M&A decisions

Thinking incrementally about SaaS

216 implied HN points • 03 Apr 21
  1. Start with incremental revenue when evaluating SaaS business value.
  2. Watch out for signs of the incremental revenue machine breaking down in a SaaS business.
  3. Consider various structural, investment, and behavioral factors to predict changes in a SaaS company's performance.

Crypto and Chasing the Dragon

176 implied HN points • 14 Mar 21
  1. Experiencing a dopamine surge makes you want more, like chasing the dragon.
  2. After the tech bubble, there hasn't been much excitement, so people like Marc and Ben keep chasing that feeling.
  3. Crypto is like a new frontier for chasing the excitement of the tech bubble, giving people something big to strive for.

Model transitions: A framework for value creation

78 implied HN points • 11 Apr 21
  1. Model transitions are a valuable source of value creation for investors and management teams.
  2. During model transitions, track metrics like growth in incremental ARR and run-rate margins to evaluate success.
  3. For assessing companies going through model transitions like SPLK, NTNX, and GWRE, focus on factors like incremental ARR growth and run-rate margins to make informed decisions.

Thoughts on SaaS and other things

39 implied HN points • 07 Mar 21
  1. Buck on Software provides weekly commentary on the software industry.
  2. The author occasionally delves deep into analysis of companies.
  3. Readers can subscribe to not miss out on the first issue.

Category velocity

1 HN point • 15 Jun 21
  1. People make decisions based on personal fears and benefits, as well as company level initiatives.
  2. Understanding the velocity of your business category helps in making strategic decisions and managing expectations.
  3. Capital availability influences the behavior of companies in different velocity categories.