Network Effects are a virtuous circle - the gift that keeps giving. And in my opinion, Network Effects are the most valuable and most defensible competitive moat a company can develop. Network Effects come in different flavors. And not all are created equal. As such, there’s an art and a science in identifying which you should put your resources towards trying to harness. Some take capital, some take content, and all require users. This week we’ll dive into the subtle differences that define these flywheels: Physical Network Effects Direct Network Effects Two Sided Network Effects Loca ..read more

In this episode, CJ sits down with John McCauley, the CFO of Calendly. From his learnings under the leadership of Frank Slootman and Mike Scarpelli at ServiceNow to his first CFO role at Seismic, and his current position, John shares valuable insights from his career. He gives advice on hiring and getting promoted, why you should consider your value prop to your company, the benefits of seeking healthy confrontation, and why the CFO should take responsibility for overall company performance. From tracking product-led growth in your metrics to debunking the myths of benchmarking, John offer ..read more

Support for Mostly metrics comes from Mercury, the fintech startups use for banking and all their financial workflows. CAC Payback Period is one of the most referenced, yet miscalculated, metrics in the tech world. Today we’ll cover the following: I. The Art - What it is II. The Science - Two preferred ways to calculate it III. The Components - The data inputs IV. A template for you to use in your own calcs V. What does “good” look like? - Benchmarking real companies VI. Can CAC Payback be too low? - With advice from Alex Clayton of Meritech VII. Anything else to watch out for? - Red flag ..read more

In this episode, CJ is joined by Jeff Cooper, the CFO of Guidewire, a publicly traded vertical software company serving the insurance industry. Jeff explains the strategic advantage Guidewire has in owning the control point within a customer's tech infrastructure and how they achieved this. He sheds light on the challenges and benefits of Guidewire's industry-specific business model, including long sales cycles, non-standard fiscal years, and the risks of burning through their market. He also discusses ARR as the most important metric, how he decides on the metrics he reports on, and how to ..read more

Mostly Metrics is supported by BlueRocket, a top pricing consultancy for tech companies. Readers of this newsletter get a complimentary one hour pricing audit with their CEO. Click here to schedule. My goal is to create the best valuation and performance benchmarks specifically for tech operators. If you are in Finance, Strategy, or Operations, this will help you translate what the outside world values into your target operating model. It’s Turtles DCFs All the Way Down Tech companies die, or live long enough to find themselves in a Discounted Cash Flow Model. Once you start to produce ..read more

Getting a marketplace off the ground is akin to jumping out of a plane and building the parachute on the way down. It requires you to get two sides to show up at once, in the right ratios, and then to transact (and repeat). This precarious situation is also commonly called the Chicken or the Egg problem. Today’s post uncovers tactics that real companies used to solve the Chicken or the Egg problem. We provide 15 tactical tips below, using examples from real companies. Founder, chasing chickens But before we dive in, here are three (somewhat counterintuitive) guiding principles for starting a ..read more

Today, CJ hosts Taylor Holiday, a legend in the e-commerce and D2C (Direct-to-Consumer) world. He is also the CEO and founder of Common Thread Collective, one of the leading marketing agencies for e-commerce brands. Taylor takes us on a deep dive into marketing best practices and shares profound insights from his years of experience in D2C and e-commerce businesses. He talks about bridging the gap between marketing and finance and what marketers often miss about monetization. He explains when to do marketing in-house and when to hire experts, how unit economics and expectations differ in B2 ..read more

Mercury, the fintech startups use for banking and all their financial workflows. Cloudflare, Hubspot, and Gitlab are multi billion dollar tech companies. And they've all successfully evolved their sales motions (and supporting infrastructures) to go "upstream" from the SMB to the Enterprise sales segment. It’s nearly impossible to build a product that literally every size of business wants to buy off the bat. Companies typically get initial traction in one segment, which we’ll broadly classify into three buckets: Small Business (SMB), Mid Market (Commercial), or Enterprise. But eventually th ..read more

Jim Kelliher, the former CFO of PTC, LogMeIn, and Drift, and general CFO legend in Boston, joins CJ to discuss the secrets behind the success of these companies and the lessons he’s learned in his 35-year career. From the importance of product investment to how to navigate IPOs during economic downturns, Jim shares profound insights into how CFOs can drive growth rather than just manage budgets. He explains the importance of investing in product, how to vet budget requests, and how to build a winning team spirit. He also talks about venture capital versus later-stage private equity buyouts ..read more

Mostly Metrics is Proudly Supported by BlueRocket: Your pricing partner for Series A companies through Fortune 500 enterprises. My goal is to create the best valuation and performance benchmarks specifically for tech operators. If you are in Finance, Strategy, or Operations, this will help you translate what the outside world values to your target operating model. The “Next Buyer” Angle to Valuation Last week we talked about how venture fund returns typically follow a power law (e.g., 80% of the returns are generated by 20% of the investments). As a rule of thumb, investors will often w ..read more