Revisiting Point Nine’s tech stack. Plus: 7 little hacks that help me keep (some of my) sanity

[This post first appeared on Point Nine Land, our Medium channel.]

A few years ago I wrote about some of the tools that we’re using to run a VC fund in the Cloud. Nicolas later followed up with more details about our tech stack. Today I’d like to provide a quick update on how our SaaS stack has evolved, as well as share a couple of little tools and hacks that help me (sort of) keep (a little bit of) my sanity.

Part 1: The Basics

Zendesk continues to be our lifeblood. Since we started using Zendesk to manage our deal-flow about six years ago, we’ve logged more than 18,000 potential investments, and every month, several hundred new ones are being added. Processing so many new deals in a timely fashion is no easy feat (kudos to Savina, Louis and Robin who are doing the bulk of that work!) and wouldn’t be possible without Zendesk. Zendesk obviously hasn’t been built for this use case, but the ability to customize the software with triggers, automations, macros and other features has turned Zendesk into the perfect deal-flow management system for us.

We continue to use Basecamp to keep track of our portfolio companies — we have one dedicated Basecamp project for each portfolio company that we use internally at Point Nine to store updates and meeting notes — but have migrated to Honey and Slack for most other use cases that we previously used Basecamp for. Honey (a Point Nine portfolio company) offers a beautiful, modern intranet and is great for storing long-lived content. Slack has allowed us to heavily reduce internal email communication. I was initially sceptical about Slack (yet another inbox?) but have meanwhile become a big fan because the time we spend on Slack is more than offset by the time we save on email. In my experience, the two biggest advantages of Slack over email are (a) the ability to quickly discuss issues with a group of people in real-time and (b) organizing conversations by channel, which makes it easier to ignore (or process in batches) less urgent messages.

We continue to use Google Docs and Google Sheets for almost all documents and spreadsheets, and after some initial resistance, I think even our COO Aleks (who spent her previous life with Word and Excel), is starting to like it. :) For documents that still come in Word, Excel or PDF form, we’re (of course) using Dropbox to ensure that everybody always has the latest version.

We’re still using Skype for external calls on a daily basis, but have switched to Zoom for internal video conferences. I’m still a fan of Skype, but Zoom seems to be more reliable and to offer a slightly better audio/video quality, and offers call-in numbers for people who have to call in while on the go. The only downside is that Zoom eats up a lot of CPU, and for some reason that is completely beyond me doesn’t allow you to show a large screen-sharing window and a large video at the same time.

Our website is now powered by Contentful, and we use Unbounce for landing pages, and Typeform for all kinds of things. Speaking of dogfooding, we love it when a SaaS company uses ChartMogul as that gives us easy access to all relevant SaaS metrics; we’re using 15Five for team feedback; Mention for media monitoring; Contactually for contact management; and (more recently) Qwilr for occasional sales pitches.

Finally, we recently got started with Recruitee to manage the growing talent pool for the #P9Family. We’re using Medium as our blogging platform (although this blog still runs on Blogger, which tells you something about my age); TinyLetter for our “Content Newsletter” (subscribe here); and Buffer to schedule social media posts. Last but not least, we still use MailChimp to publish our (in)famous newsletter (sign up here if you haven’t yet).

Part 2: The little tools and hacks

1. TextExpander

TextExpander lets you insert snippets of text using shortcuts. I remember using a similar application with the same functionality on Windows 3.11 (which tells you even more about my age), when in the first couple of months after launching Acses, my main job was to write personalized emails, suggesting a link exchange, to as many website owners as possible. Since then, text expanders have become one of my favorite productivity helpers. To give you an idea of how I’m using it, here are a few examples of some of my favorite shortcuts:

Shortcut: calendly30

Text snippet:

Want to pick a time from my calendar?

https://calendly.com/XXX

Alternatively, please feel free let me know a few options that would work well on your end.

Looking forward to it!

Shortcut: iiwfy

Text snippet:

If it works for you we can use Skype, my user name is XXX. Alternatively you can reach me at XXX.

Looking forward to talking to you soon!

Shortcut: m-a-c

Text snippet:

Thank you for your interest!

You can get an editable copy of the spreadsheet by going to „File > Make a copy“.

Let me know if you have any questions.

Best regards

Christoph

I hope you won’t find it rude that if you receive an email from me, not each and every word may be carefully typed in by hand. But there are only 24 hours in the day, and if I didn’t save time this way I could answer fewer emails, which would be worse.

2. Calendly

Did you notice the calendly.com link in the first snippet above? Calendly is another favorite of mine. It’s a scheduling tool that can greatly reduce the back-and-forth emails that are so often required to schedule a meeting or call. Here’s how it works:

• Let Calendly know your availability by connecting it with your calendar and by setting up slots for calls and meetings.
• If you want to schedule a call or meeting with someone, send him/her your Calendly link.
• The other person picks a time, and the event is added to your calendar (and the other person gets a calendar invite for his/her calendar).

Compared to solutions like x.ai, which try to solve the problem using AI, Calendly is a rather “dumb” tool. It won’t solve all of your scheduling issues: If, for example, you need to coordinate a meeting with a bigger group of people or if you need to take into account travel times and traffic, Calendly won’t do the job. But my experience is that it works perfectly well for 90% of my Skype/phone calls, so I can highly recommend it.

Initially I was worried if the UX for the person you’re scheduling with was good enough or if people don’t want to click on a link in an email in order to schedule a meeting with me. However, I’ve gotten only good feedback so far, and just in case, I always include the “Alternatively, please feel free to let me know a few options … “ note when I send around the Calendly URL. Another great solution is MixMax’ “instant scheduling” feature, which arguably offers an even better experience for the person on the receiving end.

3. 1Password

1Password is one of those apps that, once you’ve used it for a little while, makes you wonder how you ever survived without it. If you’re not using a password manager, chances are that:

• you use the same passwords everywhere (pretty risky — if one site gets hacked, the hacker gets access to all your online accounts); or
• you keep a list of all your passwords (not much safer and not very convenient); or
• you try to memorize a lot of different passwords (which probably means you’re resetting passwords all the time)

1Password creates a unique and safe password for each of your online accounts and takes care of the synchronization across all your devices. You only have to memorize one master password in order to unlock your password vault. Just make sure you don’t lose that password!

4. My email signature

Some time ago I made a slightly weird self-observation: I noticed that when I checked my email on my iPhone while I was traveling and e.g. sitting in a cab, I’d often be faster to reply to emails than when I was sitting at my desk. You’d expect the opposite, because typing on a real keyword is obviously much more convenient and much faster. The reason for this behavior is that the “Sent from my iPhone” signature gave me the excuse for writing very brief replies, whereas when I was at my desk I felt obliged to write longer, more well-written answers — which often led to procrastination. When I noticed this behavior I changed my desktop email signature to this:

—
Christoph Janz | www.pointninecap.com | Christoph Janz
Not sent from my iPhone. Please excuse brevity nonetheless.
I can’t claim that this little hack made me a great emailer. I never achieve inbox zero and regularly have to declare email bankruptcy. But it definitely helped to get somewhat better.


5. Typeform => Zapier => Zendesk

About 18 months ago we replaced the “submit” email address on our website by a Typeform. The Typeform lets founders upload a pitch deck and allows us to collect a few bits of information such as the startup’s sector, launch date and funding ask. You can check out the pitch submission Typeform here. We use Zapier to push the data from Typeform to our Zendesk. If you submit the Typeform, here’s what we see:

The impact of this seemingly small hack, which simply ensures that we get all of the information that we need for our initial assessment at a glance , turned out to be staggering. Previously we often felt like we were drowning in incoming inquiries and would often accumulate a large backlog of submissions; thanks to the improved process, we’re usually able to get back to founders within 1–2 weeks.

When we were considering removing the “submit” email address and replacing it by a Typeform, we weren’t sure how people would react. We were somewhat worried that asking founders to complete a form could look unfriendly or unapproachable and were wondering if we’d increase the barrier to submit a pitch too much. Fortunately, we got lots of positive feedback, not least because Typeforms look and feel less like boring web forms and more like a conversational interface. Also, our impression is that the submissions that we’re no longer getting are mostly the ones that we’re happy to miss (like random mass emails about projects that are completely out of our areas of interest).


6. SizeUp

SizeUp is a Mac app that allows you to quickly resize and position windows with keyboard shortcuts. It’s a simple app, but another one of these handy little tools that I don’t want to miss. I frequently want to see two windows on my screen side-by-side, and with SizeUp it just takes one hotkey to move and resize a window to the left or right half of the screen. Occasionally I want to see more than two windows at once. In that case there’s another set of hotkeys that allows me to arrange the screen into four quadrants. Apple added a “Split View” feature to OS X two years ago or so, but I still prefer SizeUp for its extra features and customizability.

7. SaneBox

SaneBox was highly recommended to me by Pawel, who’s been swearing by the product’s ability to help him keep his sanity for some years already. After using SaneBox for a little while it has become an essential part of my tool stack as well. SaneBox comes with a whole bunch of features, but for me the key feature is that it moves all emails that don’t look important into a couple of special folders such as “Social”, “News” and “SaneLater”, leaving only a much smaller amount of emails in my main inbox. This way you can check out newsletters, social network notifications and everything else that SaneBox’s algorithm determines to be unimportant in batches, which saves you lots of interruptions.

I also use SaneBox’s ability to detect emails from people, who I haven’t communicated with before, to send them this auto-responder:

Hi there,

This is an automated reply to thank you for your message. You’re receiving it because my AI-based assistant thinks that we don’t know each other well yet. :)

I’m trying to read and answer all emails in a timely manner, but due to the large volume of emails that I’m getting it doesn’t always work. If you don’t get a personal email soon I apologize in advance.

In the meantime …

* If you’d like to submit a pitch, please use this Typeform:

https://pointninecap.typeform.com/to/gZKJUl?referrer=christoph

* To get a copy of one of the Google spreadsheets that I’ve published on my blog, you can get an editable copy of any spreadsheet by going to „File > Make a copy“.

* If you’re interested in working for one of our amazing portfolio companies, please reach out to jenny@pointninecap.com.

* For other inquiries, please email us at info@pointninecap.com.

* If you’re a SaaS company and you want to get your metrics right, check out ChartMogul (www.chartmogul.com)

* I unfortunately don’t have the time to answer individual questions in regards to financial planning. Sorry.

Best regards

Christoph

—
Christoph Janz
www: pointninecap.com | Blog: www.theangelvc.net | Twitter: @chrija


I still take a look at all of these emails and try to reply to most of them, but it’s not always possible (and also not always necessary) and in these cases I think this auto-reply is better than no reply at all. What’s great about this setup (which uses SaneBox and Zapier) is that none of my regular contacts get this auto-responder. Once I’ve sent you an email, SaneBox classifies you as “important” and removes you from the “SaneLater” label.

This is by no means an exhaustive list of all the tools and little hacks that we’re using at Point Nine, but I hope you found some of them useful.

What are your favorite productivity hacks?

Announcing our investment in ChartMogul

The big guy who's lifting Nick is Michael Hansen,
Zendesk's first employee and a co-investor in ChartMogul

As reported by TechCrunch, we’ve led a seed round in ChartMogul. We’re thrilled about the investment. The decision to invest in ChartMogul, which has developed an analytics solution for subscription businesses, was a very easy one. Here’s why:

1) ChartMogul was founded by Nick Franklin, an early Zendesk employee. As employee #6, Nick has headed Zendesk’s activities in the EMEA region for two years before leading the company’s expansion into Asia for another (almost) three years. I knew that Nick has done a fantastic job at Zendesk and knew that he was an extremely entrepreneurial, hard-working, well-rounded, smart and nice guy. So when Nick told me a few months ago that he’s leaving Zendesk to start his own startup, I was sad for Zendesk but also very keen on learning more about his new gig.

2) ChartMogul is solving a problem which we at Point Nine know very well. We talk to SaaS startups on a daily basis, and almost all of them either have significant trouble getting comprehensive, accurate and consistent metrics or they had to make huge investments (especially into developer man-months) to get reasonably solid data.

When I put together my SaaS metrics dashboard almost two years ago, I drastically underestimated how difficult it is for companies to retrieve all of the relevant data. It sounds very easy in theory, but as we (and many SaaS founders) have painfully learned over the last years, in practice it’s very hard. I’ve heard from several SaaS founders that when they’ve found my SaaS dashboard template, they loved me for creating and open-sourcing the dashboard. But that love turned into hate when they found out, often over months, how hard it is to fill the template with real data. :-) The difficulties include getting and consistently matching data from multiple sources, dealing with complicated billing scenarios, addressing all kinds of exceptions and many more – I’ll let Nick follow-up with an in-depth post on that topic.

ChartMogul is solving that pain. You connect ChartMogul with your billing system (Stripe, Braintree, Chargify or Recurly) and at the click of a button, the product will show you almost any SaaS metric that you want to see, including the SaaS KPIs from my dashboard. But ChartMogul is not only a productized version my dashboard template. Since you can slice and dice all the data that you see on the screen, ChartMogul allows you to get many more insights. If you’re a SaaS company, go check it out!

3) We’re convinced that SaaS will continue to grow very fast throughout the decade and beyond, so the company is addressing a large and growing market. What’s more, while ChartMogul is initially focused on B2B SaaS companies, the solution is equally relevant for any kind of business with subscription revenue, which expands the company’s TAM even further.

So if you happen to provide a subscription service for “authentic T-shirts from the best bars”, curated items for nerds, emergency supplies or, well, dope, ChartMogul’s got you covered. ;-) (seriously - these services all exist, and many more)

Reflections on the early days at Zendesk (part 2)

This is part two of my post about the early days at Zendesk. The first part is here.

Small, fragmented and no potential for differentiation

As mentioned in the first part of this post, the seed round was only $500,000 and it was clear that we’d need much more money soon. That’s why Mikkel and I started to work on a pitch deck and a financial plan almost immediately after the closing of the seed round and started to pitch to VCs shortly thereafter.
In my personal experience as a founder, raising money has never been easy, and so I didn’t expect that it would be easy. I was quite optimistic though, since I thought we had a pretty good pitch: a well-rounded team of three complementary and experienced founders, a beautiful product, a proven business model, paying customers and nice (yet early) traction.

So why did all European VCs pass? I’m getting asked this question a lot and I don’t have a perfect answer, but here are a few important factors:

• There just weren’t (and still aren’t) that many VCs in Europe who can write a Series A check. If a couple of them pass for whatever reason, you’ve quickly exhausted your available options.
• Our timing was horrible – it was almost at the height of the global financial crisis which had started in 2007. While we were trying to raise the Series A, Lehman Brothers imploded and a collapse of the entire global financial markets seemed possible.
• We had failed to convince investors that we were going after a large market and that we could build a defensible position. One feedback that we got was that the market for help desk software is “small and fragmented” and that there are concerns about the “potential for differentiation” and several other VCs were concerned about the size of the opportunity and our ability to differentiate, too.

You’ll notice that I haven’t mentioned the “European VCs are risk-averse/dumb/whatever” theme to explain why we haven’t been able to raise money in Europe. While I do think that there are differences between how VCs work in Europe vs. the US, I think it wouldn’t be fair to blame European investors for missing Zendesk: With hindsight Zendesk looks like a clear winner, but back in 2008 it wasn’t that clear. It was still very early.

At a critical juncture

A few months later, after having talked to a number of US investors and and after an almost-deal with a West Coast VC which was pulled back at the last minute, we eventually got an offer from CRV in Boston. We were relieved, but the valuation was much lower than what we had hoped for.

Because of the dilution which the investment round would mean and because the whole fundraising process has been so hard, Morten and Alexander got more and more doubts if going the VC route was the right thing to do at all. They were wondering if we couldn’t go the 37signals way instead – stay a smaller team, grow organically and maybe raise money at a later point in time when we’d be in a stronger position and when the market conditions would be more favorable. That was definitely a viable alternative and worth considering, but Mikkel and I strongly believed that we had to raise money and that we shouldn’t wait. This led to a lot of long emails and Skype discussions between the four of us. It also led to some very heated discussions between Mikkel, Morten and Alexander, which is no surprise, given how much was at stake. We were at a critical juncture.

One relic from those days is this email snippet (Alex in red, me in green):

I still need to buy Alex a T-Shirt with “I’m not confident that Zendesk can grow into a $100 million company” on it.

In the end we decided to take the investment from CRV, but we took a smaller amount than what Devdutt had offered us to reduce the dilution. It was still a significant hit in terms of dilution, but given how many doors the CRV investment has opened for us and how much Devdutt has done for the company it proved to be the right decision.

The rest is history – get Mikkel’s book to read about it!

Reflections on the early days at Zendesk (part 1)

Yesterday I posted a brief review of Mikkel’s excellent book “Startupland”. For me, the book is also a good opportunity for some reflections and to share some thoughts in relation to Zendesk’s journey.

The first date

When I stumbled on Zendesk in 2008 I knew absolutely nothing about enterprise software, B2B or SaaS. I had always been a consumer Internet guy, having founded comparison shopping engine DealPilot.com back in 1997 and personalized homepage Pageflakes in 2005. If Zendesk’s website hadn’t been so beautiful and if the product hadn’t been so easy to try and use, Zendesk would never have caught my attention (and I wouldn’t be writing this post now). The nice little buddha, the logo/brand and the tone of voice of the site also helped, massively.

Interestingly, if I had been an enterprise software investor, Zendesk probably wouldn’t have caught my attention either, since the website didn’t look like a typical enterprise software website at all. Today the “consumerization of the enterprise” has become mainstream, but in 2008 it wasn’t. Apparently you had to be a consumer Internet entrepreneur looking for the next big thing on the Web in order to stumble on and be attracted by Zendesk. This characteristic – not being a consumer Internet startup but not being a classical enterprise software company either – has probably contributed to our difficulty raising a Series A later on, but more on that later.

So when Mikkel and I met for the first time, I knew nothing about SaaS and probably asked a lot of dumb questions. At that I also knew nothing about inbound marketing and customer success – topics which are now near and dear to my heart for some years – and I was somewhat puzzled when Mikkel explained to me how they’ve been getting customers. I was worried that the inbound marketing plus customer success (at that time, called “customer advocacy”) approach wouldn’t scale and thought that they’d have to do outbound sales soon to keep growing. That turned out to be epically wrong: Zendesk grew to 10,000 paying customers before starting to build a real sales team, and up until this day, the vast majority of customers come from organic sources.

Having been an entrepreneur since the age of 17 I did know a few things about starting and building companies though, and since both DealPilot.com and Pageflakes were VC-funded I also had some experience with venture capital. So Mikkel and I were very complementary, or, as Mikkel puts it in the book:

There was a good vibe between us, even though we were extremely different. […] Ultimately, I think we recognized that we were a good balance for one another.

I remember that a couple of years later, at the first PNC SaaS Founder Meetup in San Francisco in 2012, Mikkel ended his speech saying something along the lines of: “Kudos to Christoph for investing in us back in 2008 – I would never have invested in these three guys”, referring to his co-founders Morten, Alexander and himself. My response was: “Kudos to you for taking money from me – I never would have taken money from me”. I think there’s no better way to sum it up. :-)

After the financing is before the financing

Following our first meeting, we very quickly concluded that it would make sense to work together, agreed on the terms, and voilà, a six-figure dollar amount changed hands. I was excited, but it was also a little bit scary because it was my first angel investment (aside from a few small investments that I had made many years earlier). I didn’t have a diversified portfolio, and I didn’t know if I’d ever have one because I had no idea when I’d make my second investment. I didn’t have deal-flow, and I’m not even sure if I knew the term deal-flow.

I didn’t worry too much about it though, and the mood was good. Quoting Mikkel from the book:

We now had a new direction. The investment from this seed round inspired a new mindset and created a big change in pace. Christoph helped us with a business plan and helped us build out what would be the first attempt at describing the financial model of our business. [...] He helped us think about scale—and about the possibilities.

The seed round, including the friends & family investments and my own investment, was only $500,000 though. It was enough for the founders to take a modest paycheck and to hire a few people, but it was clear that we’d need a much larger round soon. That’s when things started to become worrisome for me, since it quickly became clear that raising a Series A round would be very difficult.

This was the first part. Part two coming soon.
[Update: Here is part two.]

Startupland – How three guys risked everything to turn an idea into a global business

As some of you may know, my friend Mikkel, founder and CEO of Zendesk, wrote a book. It’s called “Startupland: How Three Guys Risked Everything to Turn an Idea into a Global Business” and you can learn more about it here. The hardcover version will be released in about two weeks, but the Kindle version just became available on Amazon and I was lucky enough to get my hands on a draft a few weeks ago.

The book is a well-written and very personal look back at Zendesk’s amazing success story, which began in a loft in Copenhagen and culminated in the company’s Wall Street IPO earlier this year. It’s both autobiography and “tips & tricks" guide: First and foremost it’s a suspenseful chronicle of the journey of Mikkel and his co-founders Alex and Morten that lets you witness some of the many ups and downs which startupland has in store for entrepreneurs, but it also contains a lot of actionable advice for other founders.

It’s an entertaining read, too, and as someone who was fortunate enough to have played a small role in Zendesk’s beginnings, reading about those early days put a smile on my face many times. In some cases, it also made me laugh out loud, e.g. when Mikkel writes about my conversation with Michael Arrington.

One of the reasons why "Startupland" is such a great read is that it’s honest and humble. When other authors write things like “I didn’t know anything about XYZ” it often feels like fishing for compliments. When Mikkel writes it, you know that he really means it that way.

I highly recommend the book to any startup founder, and in particular to all founders from Europe who consider making the move to the US.

It's a ZEN day!

Today is a very special day for me as as an entrepreneur and investor. About an hour ago, Zendesk went public on the New York Stock Exchange. The last time I watched an IPO so carefully was when Shopping.com, the company that had bought my price comparison startup, went public – almost ten years ago.

Here are a few visual impressions of my love affair with Zendesk, which began six years ago:



Huge congrats and thanks to the entire Zendesk team – I couldn't be more proud of you guys!

Yummy, dog food! Or: Running a VC fund in the Cloud

Point Nine not only loves animals, we also love dog food. After all, some months ago we invested in ePetWorld, which runs hundeland.de, a fast-growing online shop for dog food and supplies. Today I'm going to talk about a different type of dog food though.

If you know us a bit you'll know that we talk a lot about the Cloud. In our opinion, the move of software from the desktop or local servers to the Cloud, along with the consumerization of enterprise software and other developments that go hand in hand with it, truly is a revolution. Like in any revolution there will be casualties, in this case incumbents that aren't fast enough to adapt to the new realities, but fortunately it'a a peaceful revolution which only puts bad UIs, overpriced software maintenance contracts and "call us for a demo" websites under the guillotine. And like in any revolution there will be new rulers – startups that drive the Cloud revolution and attract tens of thousands of customers within few years. Our goal at Point Nine is to find some of these revolutionaries at an early stage and back them on their way from the bottom to the top.

Back to the dog food. We run Point Nine mostly using Cloud apps, and it tastes pretty darn good. I wrote about the idea of going "Office free" about seven years ago. Today we're using Google Drive (plus Basecamp) for 90% of our documents and spreadsheets, and ironically that's not because Google Documents and Google Spreadsheets are particularly good products. In fact I think they are pretty bad, and I'm amazed how slowly Google has been developing them if you consider that they were launched many years ago already. But the fact that Google makes it dead simple to collaborate on documents and spreadsheets, this one USP over desktop software, is such a compelling argument that we happily accept all of the products' shortcomings (makes me wonder, by the way, if there could be an interesting opportunity in building a better online version of Word and Excel).

While we're heavy users of Google Docs, Google Spreadsheets and Basecamp, by far the most important application for us is Zendesk ¹, which we use for deal-tracking ². It's our life blood, and I don't know how we'd survive without it. While Zendesk has of course been built for a different use case – customer service –, and Mikkel might kill me if he sees how we're using Zendesk, it turned out that because of its adaptability it works perfectly well for our needs. For us, every new potential investment becomes a "ticket", and we use Zendesk from our first encounter with a new company through the entire assessment of the deal up until we either decide to pass (about 99% of the time) or to invest (about 1% of the time, in which case Basecamp takes over, since we set up a Basecamp project for every investment to collect updates, notes, etc).

Here are some of the great things that Zendesk allows us to do:

• Every email that we receive at submit@pointninecap.com is automatically turned into a Zendesk ticket and gets assigned to Fabian, with the stage automatically being set to "evaluating". Fabian and Nicolas then do some initial research and add things like slides, spreadsheets (ouch, you got me) or call notes to the ticket. Once Fabian and Nicolas have made up their minds they assign the ticket to Pawel or me and set the stage to "Recommendation: Evaluate further" or "Recommendation: Pass". This makes the ticket appear in the respective view/filter for Pawel and me.
• It happens very often that we talk to a startup which looks interesting but isn't ready for an investment yet. Zendesk makes it easy to keep track of these opportunities. We simply set the stage to "Follow-up in 3 months" or "Follow-up in 6 months". After three or six months, Zendesk automatically sets the stage to "Take another look" and sends us an email notification.
• Zendesk makes it easy to stay up-to-date on everything since you'll get an email notification whenever a ticket is updated. You can reply directly to those emails to add comments to the ticket (as well as create new tickets by emailing them in), plus there are great apps for the iPad and the iPhone, so it's convenient to work on tickets on the go.
• Finally, you can use tags or custom fields to collect additional information about tickets. We are, for example, tracking deal sources and company locations, which is helpful for analyses that we're going to do in the future.

Bye now. I still have a bunch of open tickets in my queue. :)


¹ In case you don't know yet: Disclosure, I'm an investor in Zendesk.
² Dear founders, sorry to call your startup a "deal". That's VC speak and I hope it doesn't sound too disrespectful.

Financial planning for SaaS startups

[Update 03/23/16: I've created an improved version of the template - check it out!]

A few people who read my recent post about financial planning asked if I could provide an example for a good financial plan, so I'd like to post one here. The plan is very similar to the one that I created in the very early days at Zendesk and re-used a few times in the meantime, but I had to make a few adjustments to make it more generic.

It's a simple plan for an early-stage SaaS startup with a low-touch sales model – a company which markets a SaaS solution via its website, offers a 30 day free trial, gets most of its trial users organically and through online marketing and converts them into paying customer with very little human interaction. Therefore the key drivers of my imaginary startup are organic growth rate, marketing budget and customer acquisition costs, conversion rate, ARPU and churn rate. If you have a SaaS startup with a higher-touch sales model where revenue growth is largely driven by sales headcount, the plan needs to be modified accordingly.

For non-SaaS business models the template needs to be modified more heavily or may not be useful at all, other than that it shows my way of thinking around business planning. That was one of the points that I was trying to make in the original blog post – you can't simply re-use a template, your financial plan needs to mirror your specific business case.

Here's the plan as a Google spreadsheet. If you want the original Excel version please let me know (yes, Excel is one of the few desktop apps that I'm still using).

[Update: If you'd like to get the original Excel version, which looks a bit nicer, you can download it here. If you like it, tweet it!]

The grey box at the left contains all assumptions (blue text color). Everything on the right is calculated, no hard-coded numbers there. I have, of course, used dummy numbers for all assumptions.

The model should be largely self-explanatory but here are a few notes:

• It all starts with the signups that you're adding. I've separated signups into non-trackable signups (signups that you get from word of mouth, PR and so on) and trackable signups (signups from AdWords and other paid advertising where you can track the costs of acquiring a signup). You may have to break this down further depending on your customer acquisition channels.
• Then I'm assuming that you're converting a certain percentage of signups into paying customers (with a one month time lag, assuming that you have a 30 day free trial). The model contains just one conversion rate regardless of the signup source. You can change that if your conversion rate varies depending on the signup source.
• Next up, I'm calculating revenue by multiplying the (approximate) number of customers that you have mid-month by your average revenue per account. If you have a tiered pricing model or a per-seat pricing, consider modeling that.
• Moving down to the costs side – this should all be self-explanatory. Just replace the dummy values by your actual values or assumptions and add additional expense categories as needed.
• Regarding P&L and cash-flow, I'm keeping things really simple here and am assuming that your EBIT is equal to your operating cash-flow. That is, I'm assuming that you're charging your customers on a monthly basis, that you're not making any investments (in accounting terms) and that there are no taxes or interest payments. I think that simplification works well for most very early-stage SaaS startups but it of course needs to get more sophisticated as you grow.
• Last – but not least because this is one of my favorite parts – the sanity checks: I've seen MANY financial plans with an EBIT margin north of 90% in year 3. That's a classic mistake which can happen if you project your revenues to grow exponentially but don't provision realistic increases on the costs side as well. Adding some sanity checks will help you spot these mistakes and make sure that your plan remains realistic. For example, I've included the number of paying customers which each support agent needs to take care of. If that number gets too high you need to allow for more support staff.

Portfolio update (part 1)

As 2010 is drawing to a close I’d like to take a moment to give you a quick update on my angel investment activities and more importantly, thank the incredibly talented and hard-working people who have made it such an amazing year.

Since becoming a full-time angel investor in 2008 I’ve made 14 seed investments, with 4-5 additional ones being on the way. Except for two of my first investments that didn’t work out – rookie mistakes, fortunately pretty small ones – I’m absolutely blown away by the success of each and every company in my portfolio.

Some highlights:

Zendesk has had a phenomenal year. In May we announced that we’ve reached 5,000 paying customers. We didn’t publish an updated number since then but I think it’s no secret that the number of Zendesk lovers worldwide has continued to explode throughout the year. With a world-class management team and Board, one of the best products and brands in B2B software and a recent $19M cash infusion Zendesk is ideally poised to bring Cloud-based zen and good karma to even more people in 2011. Mange tak to Mikkel, Morten, Alex, Michael and the whole crew.

Speaking of the Cloud, 2010 may mark a tipping point with respect to the adoption of Cloud-based services in the legal technology field: In 2010 my portfolio company Clio, which provides a web-based practice management solution for solo lawyers and small law firms, has grown its customer base by more than 400%. The company also continues to launch new features and initiatives pretty much on a weekly basis, boasts (by far) the highest trial-to-subscription conversion rate that I’ve ever seen and has a ton of great new stuff in the pipeline. Thanks and merci to you, Jack and Rian, and your growing team of hand-picked rock-star developers and industry experts.

The development of Momox, which has bought more than 8.4 million used books, CDs, DVDs and games from private sellers since 2006, has been equally impressive. We’ve grown revenue by more than 2.5x , recruited two stellar executives to head logistics and marketing, moved to a new 85,000 square foot warehouse, relaunched our online shop, raised a couple of million Euros from Acton Capital Partners and scaled up the whole organization to make sure that we can handle our continued growth. Huge kudos to Christian Wegner and his 150+ people in Berlin for this gigantic and successful effort – jut jemacht!

More in part 2.

Zendesk - Help Desk 2.0

Following my long-due update on Pageflakes here’s an update on what I’ve been doing since I’ve left Pageflakes. After spending some time with my family at a beautiful place in the sun, I started to look for new opportunities (to be perfectly honest I of course couldn’t resist researching new ideas while we were still on Barbados. Caribbean beaches and a DSL connection, what more can you ask for?). For various reasons I wasn’t yet ready to start my own thing again so I started to look for existing early-stage companies where I could come in as an angel investor and advisor. To some degree I “went to the dark side” (of funding) as it’s sometimes referred to but I’m really trying to be worthy of the term “angel” investor by really trying to help my companies in many different ways.

The first company I’ve made an investment in is Copenhagen-based Zendesk, founded in 2007 by a rock-star team around CEO Mikkel Asger Svane. This is no new news since it was announced last June and covered by Om Malik and others but I still wanted to blog about it here. If you don’t know Zendesk yet, the company offers a beautifully simple yet powerful on-demand help desk solution. You can buy and operate the system online and never have to worry about downtime, upgrades, security, backup or training. Setup is extremely easy and you can be up and running in hours.

Any business that serves more than a handful of customers needs a help desk solution in order to handle customer questions and support requests. Existing solutions are expensive, painfully difficult to set up and hard to use. Zendesk combines a professional-grade feature set with a beautifully simple Ajax-based user interface that resembles everyday web applications. If you want to have more productive and happier customer agents and want to save money along the way, check it out!