1. Understanding SaaS valuations: How do you measure a business that itself is creating an entirely new way of doing business?

“That’s how traditional software companies can get to profitability on the income statement early on in their lifecycles. Now compare that to what happens with SaaS…The timing of revenue and expenses are misaligned. The income statement alone therefore can no longer tell us everything we need to know about valuing a SaaS business. Even more significantly (since cash is the lifeblood of any business), the cash flow timing is also misaligned: The customer often only pays for the service one month or year at a time — but the software business has to pay its full expenses immediately. Thus, as with many innovative new businesses, cash flow is a lagging not a leading indicator of the business’s financial health.”

Read the entire primer here (and more from our ‘You Bet Your SaaS’ series here)

2. Why does Amazon have no profits? Because it keeps (productively) investing in its own business…

“Amazon has perhaps 1% of the US retail market by value. Should it stop entering new categories and markets and instead take profit, and by extension leave those segments and markets for other companies? Or should it keep investing to sweep them into the platform? Jeff Bezos’s view is pretty clear: keep investing, because to take profit out of the business would be to waste the opportunity. He seems very happy to keep seizing new opportunities, creating new businesses, and using every last penny to do it.”

Read the entire analysis here

3. Raising capital is a marathon, not a sprint. But what happens when things don’t go as planned?

“Whenever you’re raising capital, think about constructing the round in such a way that you’re strongly positioned for the future. This means raise enough money to put the company in a strong position to achieve the necessary operational and financial milestones and maximize the probability of raising future capital — even if you don’t think you’ll need to.”

Read the advice we give to our founders here

4. Mobile is eating the world

We’re now in a post-Netscape, post-PageRank world: More time is spent in mobile apps than on all of the web. By 2020, 80% of the adults on earth will have mobile phones — really, pocket supercomputers. There’s no point in drawing a distinction between the future of technology and the future of mobile anymore. Which means technology is now outgrowing the tech industry.

See the slideshow here (and the entire ‘mobile is eating the world’ package here)

5. And your smartphone is now also remaking infrastructure: Here’s what’s in it for startups

“Mobile is not only changing the composition of the datacenter, but is also forming the basis for the next generation of companies… For startups, the combination of hardware accessible from the mobile supply chain, open-source building blocks, and SaaS means that — for the first time — the entire stack can finally be re-invented. Before, startups had to fit into the legacy stack…If the dominant market player didn’t want a startup in that stack, all it had to do was restrict access to its APIs or cry out, ‘Sorry, not supported.’ Game over. Now, instead of having to slip around and get stuck inside this incumbent fat, startups can offer solutions at every level of the infrastructure stack…without having to be a part of it.”

Read the article here

6. Full stack startups: What are they and why do they matter?

“Suppose you develop a new technology that is valuable to some industry. The old approach was to sell or license your technology to the existing companies in that industry. The new approach is to build a complete, end-to-end product or service that bypasses existing companies… The full stack approach lets you bypass industry incumbents, completely control the customer experience, and capture a greater portion of the economic benefits you provide.”

Read the post here. (See also this tweetstorm and listen to this podcast for additional details.) 

7. What will it take to create the next great Silicon Valley? Especially since previous attempts haven’t worked?

“But policymakers shouldn’t be trying to copy Silicon Valley. Instead, they should be figuring out what domain is (or could be) specific to their region — and then removing the regulatory hurdles for that particular domain. Because we don’t want 50 Silicon Valleys; we want 50 different variations of Silicon Valley, all unique from each other and all focusing on different domains…  Think of it as a sort of ‘global arbitrage’ around permissionless innovation…”

Read the full argument here

8. Tone matters: Why it’s more important to find out what’s right about somebody’s company than what’s wrong

“Lately, it’s become in vogue to write articles, comments, and tweets about everything that’s wrong with young technology companies…It seems like there is a movement to replace today’s startup culture of hope and curiosity with one of smug superiority. Why does this matter?… The word technology means ‘a better way of doing things.’ This is easy to say, but extremely difficult to do…From a psychological standpoint, in order to achieve a great breakthrough, you must be able to suspend disbelief indefinitely. The technology startup world is where brilliant people come to imagine the impossible.”

Read more on can-do vs. can’t-do cultures

9. How to avoid being only successful at work (but a failure at home)

“In retrospect, I believe that I could convince the hardest working CEOs that having some real life balance by investing in your important relationships will make you a better CEO. When you are out of balance, it affects your stress, judgment, and ultimately becomes another destabilizer just when you need to be the most put together. I also believe this change is actually a much better example of leadership than the one I was exuding. When a leader shows the way toward getting things done and balancing their life, it sets a much better example for everyone else in the company who struggle with it too.”

Read more here

10. The best analogy for scaling a startup

“I discovered the experience and requirements of successfully running a hyper-growth business changes dramatically over time. The best analogy I have for it is a sports analogy… it was an incredibly gratifying journey to be able to scale effectively from running a small start-up to leading a huge organization…I recall a conversation late in my eBay tenure with Scott McNealy about how I was becoming more effective but having less fun over the years as the business scaled. He said something to me along the lines of ‘You idiot, don’t you realize that your job is to do the shit stuff so that everyone else in the company can be productive and happy?’ I didn’t then, but I do now.”

Read more here