November 03, 2024   |   Read Online

It Takes A Village ䷊

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Hey,

Welcome to The Middle, your midweek rundown of the most interesting things we've read this week.

Two under two in this house = we're surviving (hope to be thriving next). Respond and send me all of your helpful parenting tips.

Let’s jump into The Middle.

Jeff

Today’s Newsletter is brought to you by DIVACS​​

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Request a demo and try it for yourself       MARKET Zuroa going private

​Silver Lake just announced plans to take Zuora private for $1.7 billion.​

Some quick hits on the financials:

• $416m Annual Recurring Revenue
• 104% Net Revenue Retention
• 445 $250k+ Customers
• 9% Growth Rate
• 11% Free Cash Flow Margins

Quick math would tell you that they got the deal for 4.25x ARR. This seems a far cry from the SaaS multiples we've been used to during fundraising.

But, overall, it seems like a move that should encourage SaaS leaders:

• Private Equity is still Investing in SaaS
• Zuora was cash-flow positive and had a 100%+ NRR
• They have 445 customers paying over $250k per year (!!!)

Some vital signs to take away from the deal.

What do you think?

  BUSINESS OPS The Future of Customer Success

“Customer Success” is the only department where companies routinely debate whether they should nuke the entire org and hope for the best.

 OnlyCFO

​OnlyCFO is hot on the topic of the future of customer success. In the article, they present a case for and against CSM teams, with some assumptions baked in.

I walked away with a few critical thoughts:

1. CS leaders can do a much better job of documenting ROI for their peers across the organization. In the article, he outlines Net $ Saved from Churn, Expansion Revenue, and Second-Order Impacts. Take these models and assumptions to your Finance team to get buy-in.
2. Every person still has a different definition of what a CSM should be doing. Marketing, Sales, and Product leaders don't have nearly as much ambiguity. You cannot solve it overnight, but it better be clear that the company knows what your CSMs are doing (and what they're not doing).
3. Lastly... this:

  CULTURE It Takes A Village

The Primary Venture Partners team listed out ten tactics to reinforce customer-centric thinking in a SaaS business:

1. At the leadership level, use the same variable compensation targets irrespective of the function the exec owns
2. Bring in technical resources from customers to speak with your sprint teams
3. Require all managers to shadow the support desk on a regular cadence
4. Democratize access to NPS and CSAT data
5. Bring the bus to both sales meetings and quarterly business reviews
6. Build a forum for bringing non-economic buyers together on the customer side
7. Celebrate “time to advocacy” as a metric in its own right
8. Include cross-functional representation in your planning and learning
9. “Build” in public
10. Leverage your board members for reinforcement

Hard to pick a favorite. But if I were forced to, it would be #4.

Too often, data is siloed, and by controlling the data, we feel that we can control the narrative (even front-run any potential issues). But that's how you get caught building a fiefdom.

It's better to give everyone access to the data—with some quality control—but this would allow people to create their own analyses, assumptions, and tests.

That can only be a good thing when it is data that you are responsible for moving the needle on.

Which one is your favorite?

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