“What should I read?”
I get this question a lot from people learning about software and business. What little I know is disproportionately influenced by personal experience and the sources below.
My Daily Staples
These are the people whose thinking I can't live without — I try not to miss a single word they write. (I’m not the only one either — all three are extremely widely read by tech folks, so there’s no secret here.)
Tyler Cowen. Economist and intellectual polyglot. His Marginal Revolution blog with fellow economist Alex Tabarrok is "interesting throughout," as he would say.
Tomasz Tunguz. All things SaaS.
Commoditize your complements: Lower the all-in cost of your product by making its adjacent requirements cheaper. Think Microsoft in relation to PC hardware; Apple in relation to cell carriers; Google in relation to Android.
Come for the tool, stay for the network: On way to build a defensible position is to use a superior tool to acquire customers, then leverage the customer base to offer services no one else can match. Medium is doing this by acquiring writers with a simple tool, which in turn builds an audience, which can then be used to lure more writers. (They've been extremely explicit about this strategy.) Square is doing by getting to iPhone point of sale first, which allowed them to acquire customers and then offer services that are only possible with scale (short-term loans, etc.).
Aggregation theory: Markets have three primary components: Suppliers, distributors, and consumers. The most value will accumulate to companies that can monopolize two of the three pieces, and increasingly that is starting with monopolizing the relationship between distribution and consumers due to superior user experience. Think Netflix, Amazon, Airbnb, etc.
Bundling and unbundling: Waves of disruption in technology can often be explained by this concept: An upstart unbundles an established business by doing a single part of the bundle really well (Google unbundles the Yahoo! homepage by launching superior search), then rebundles many of the same services around this new starting point (Gmail, Adwords, Google News, etc.). The opening to unbundle an established business is usually created due to changes in the technology landscape (discovery became increasingly important as the internet scaled, and Google’s PageRank approach was far superior to the manually curated Yahoo! index—“Yet Another Hierarchically Organized Oracle”).
A dozen things I’ve learned from Charlie Munger about mental models and worldly wisdom: Any one model of how the world works is insufficient. Instead, a heterodox approach that mixes different mental models can product truly sophisticated insights.
Superforecasting: An argument for structured, analytically rigorous thinking about the future without relying heavily on mathematical models. You can get a long way by just starting with simple baseline assumptions about the event you're trying to predict, and then cautiously accommodating specifics. (Excerpt here.)
Software as a Service
Understanding SaaS: Lots of the things SaaS business do, including a willingness to spend heavily on customer acquisition and a need for deep cash reserves, stem from the mechanics of the SaaS business model. SaaS metrics 2.0 is a good companion.
All revenue is not created equal: On the importance of unit economics to company valuation. Outlines the key drivers of tech company valuation and how to influence them.
The dangerous seduction of the lifetime value formula: Very thoughtful discussion of the strengths and weaknesses of using LTV to make business decisions. Argues for a cautionary approach and to avoid over-reliance on it.
Your LTV math is wrong: A few common pitfalls of LTV calculations.
Why investors don’t fund dating: A good example of how to think through the mechanics of a business model. Dating’s model isn’t ours, but the levers Andrew Chen talks about (acquisition costs, churn dynamics, etc.) are recognizable and relevant.
Benchmarking Atlassian’s S-1: SaaS metrics in practice.
Marketing and Growth
An interview with Jonah Peretti: An awesome example of someone who understands their business deeply and is using data as a competitive advantage. Marvel as he rattles off their traffic sources.
Five ways to build a $100mm business: A look at how differences in customer lifetime value require very different growth strategies.
Fixing Heroku’s pricing: Look at pricing in relation to larger business and customer goals.
Indispensable growth frameworks from my years at Facebook, Twitter and Wealthfront: On how to model, implement, and test growth frameworks.
How many funnels does your product have?: On the need to map out and measure each acquisition funnel in the product. This is especially relevant to us given multi-trial users, multi-sub users, revenue expanders, and the professionals market.
How Facebook squashed Twitter: On the risks associated with moving from early adopters to the mass market. Facebook’s dominance of Twitter is in part a reflection of their ability to make the product useful enough for lightweight users, who now won’t be interested in the investment Twitter requires.
A rake too far: Ostensibly about optimal marketplace pricing strategy, but really about the opening that premium pricing provides to your competitors.
Management and Culture
The VP of devil’s advocacy: On the importance of honest criticism.
We don’t sell saddles here: A great example of a company-wide, mission-oriented rallying cry, from Slack CEO Stewart Butterfield.
Why we’ve changed our product team structure 4 times: A transparent look at how an org has changed as a company grew, and the costs and benefits of each approach. As someone who has done a fair amount of team restructuring, this rings true.