The guide to great metrics: Product-led principles

Welcome to TechCrunch+ Tuesday

Imagine a world where founders boasted about how much growth they’ve driven, as opposed to their fundraising prowess.

The ability to raise capital is less impressive than finding sustainable ways to build a growing base of paying customers. The right coaching and a strong network can help many founders land a sizable seed round, but that money reflects investor confidence, not market demand.

In a post for TC+, Curtis Townshend, senior director of growth at OpenView, shares 11 product-led growth tactics that foster “customer acquisition, retention and expansion.”

After surveying 14 public B2B software companies, Townshend says firms that built for discoverability and deployed usage-based pricing had a median growth rate of 141%, compared to 21% for traditional SaaS.

These companies were also much more efficient with regard to the Rule of 40 and retaining revenue. “Across the board, the variance in metrics is stark,” says Townshend.

The TechCrunch+ team is growing!

Tomorrow at 8 a.m. PT/11 a.m. ET, we’re hosting a Twitter Space with new contributors who are covering climate, crypto, venture capital, and more. To join the chat, follow @techcrunch on Twitter.

Have a great week,

Walter Thompson
Senior Editor, TechCrunch+
@yourprotagonist

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Fighting the ‘copycat’ stigma in SaaS: 3 tricks that work

Years ago, I found myself at a party with someone who was wearing the same sweater, jeans and shoes, down to the manufacturer. We looked like we’d stepped out of a clothing catalog.

At first, it was funny. And then, as other guests made endless jokes, it became annoying. We spent most of the evening avoiding each other, and I couldn’t wait to leave.

Startups that lack the first-to-market advantage face a similar conundrum, according to Sachin Gupta, CEO and co-founder of HackerEarth, who shares three ways “brands can push back against the stigma of being a copycat platform.”

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TC Sessions: Climate

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The ‘unicorn glut’ theory of startup misery

Tech’s rolling green meadows are seeing fewer new unicorns, but the slowing venture market suggests that past mega-deals are making it harder for early-stage startups to raise funds.

“The biggest issue in venture today isn’t interest rates, revenue multiples, or any of that,” posted SaaS investor Jason Lemkin on Twitter yesterday.

“We’ve seen that all before… what’s new-ish (at least since 2001) is the massive overhang of growth investments that will take startups years to grow into,” he wrote.

Via The Exchange, Alex Wilhelm agreed with Lemkin’s assessment:

“The unicorn glut is compounding the unicorn traffic jam, and as far as the eyes can see, the great majority of private-market value is frozen.”

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Armed with experience, insurtech MGAs are paving the way for insurtech 2.0

Innovation has long been a part of insurance: Managing general agents were a result of insurers requiring agents far afield to have a measure of independent underwriting and servicing ability.

Now, new insurtech startups developing MGAs are using the lessons learned by their predecessors to make the industry more sustainable, writes Dave Wechsler, who leads insurtech investing at OMERS Ventures.

“MGAs are correcting course, and the new crop of challengers are going in with new principles based on this knowledge.”

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To better manage cybersecurity risk, extend zero-trust principles to third parties

When it comes to cybersecurity, it’s no longer enough to just have your own house in order — 81 individual third-party incidents led to more than 200 publicly disclosed breaches and thousands of ripple-effect breaches throughout 2021, according to a report by Black Kite.

Companies must also asses the cybersecurity risk of third-party vendors before they sign agreements, writes Saket Modi, the co-founder and CEO of Safe Security.

“Businesses should establish zero-trust principles for all vendors, assess risk across external and internal assets with inside-out assessments and measure cyber risk in real time.”

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