COVID relief loans for SaaS companies
Morning! We have some good news amid these bleak times—those of you running SaaS businesses in the U.S. are likely eligible for a forgivable loan via the CARES (Coronavirus Aid Relief and Economic Security) Act.
The basic terms are 2.5x your average monthly payroll from Feb 2018 to Feb 2019, and if you can show proof that the loan goes towards your payroll, rent, mortgage, or utilities, you won’t have to pay it back. This guide from Nathan Latka offers all the forms/details you’ll need, but applications just opened today so start gathering docs!
🍎 The product manager at Apple and the one at your startup may hold the same title, but they have very different roles. The latter doesn’t have a team of 10+ supporting them—they need to be able to build and bring a product to market all by themselves, which makes a “jack of all trades” skillset ideal for their position. If you’re trying to break into startup product management and don’t have a development background, you’ll need to work on skills like SQL, prototyping, and data analytics. That being said, there’s more to being a PM than the tech side. The ability to manage a team, sell your vision, and understand customer needs are often what sets the best managers apart, and we’ve seen great ones from a variety of backgrounds.
🍃 We’re always on the hunt for new metrics that can give a better understanding of your business, and one we found interesting was OpenView’s “natural rate of growth” metric. A major blindspot in traditional SaaS metrics is that they reward high amounts of sales and marketing spend and can ignore product investment. The “natural rate of growth” metric combats this by highlighting the strengths of companies that have invested in product-led growth strategies rather than just traditional GTM. The metric only counts growth that comes from organic signups and purchases that were inspired by using the product, and excludes paid or other conversions.
👕 Zuckerberg put on the same t-shirt, hoodie, and jeans to work at Facebook for most of his career because he didn’t want to waste the time deciding what to wear. He probably could have afforded to change it up, but his thought process was valid—decisions are difficult and take energy. Marketers can use this to their favor by being strategic with their products’ default options. It's easier for a consumer to make a decision if they only have a few choices and one is recommended. Another way to take advantage of our hardwiring is putting decoys in your pricing. Consumers use other prices as a reference to determine how good of a deal they’re getting. So if one item costs $30 and the other is $15 but both feature sets are similar, the latter seems like a great deal comparatively and can be a price you’re happy with.
🔎 Search algorithms are constantly evolving to make our searches as useful and efficient as possible. As algorithms change, so do the tactics used by SEO marketers. A good example of this (and one of the newer search trends we’re seeing) are zero click searches. Today, about 50% of Google searches don’t result in a click because Google is addressing the search with a “smart box” answer on the SERP. That’s great for users because it takes less time to find their answer, but bad for businesses as users don’t interact with their website. It’s impossible to stay ahead of all these algorithm changes, so rather than trying to game the system, we think the best method is to just focus on providing useful content.
🎙️ The complex theories of modern economics may seem distant from real word startup operations, but as EconTalk host Russ Roberts points out in his conversation with Y Combinator, there are some economic concepts that are helpful for founders to keep in mind. Below are our favorites from their discussion—we’ve spared you the basics like opportunity costs and laid out a couple examples that we see come in to play frequently.
Comparative Advantage means that everyone has different strengths and weaknesses, and we should be aware of them. If you’re a technical founder but find yourself spending lots of time figuring out how to balance the books, it probably makes sense to hire someone to handle your accounting so you can focus time where you’re most effective.
Emergent Order means there are certain issues which will be able to work themselves out without direct intervention from you. As CEO, it’s good to know where your team is spending money, but that you probably don’t need to sign off on every expense unless it’s early. Instead, your team will likely be able to determine what is an acceptable expense without asking you for permission each time they need something.