The No IPO Week
There aren’t any IPOs this week! But, don’t worry, we still have the “IPO Corner” in this week’s Financial Digest.
Despite the lack of IPOs, there was still plenty of good content published recently. I’ve got full recaps of my favorite content from the past week below.
Let’s get right into it...
Three Keys To Data-Driven Finance
Today’s companies are becoming increasingly data-driven. I’m sure your company is headed in that direction too. The problem is data is a double-edged sword. It’s useful, but if you’re collecting too much of it, or not collecting the right data points, it can be confusing.
That’s why Digitalist is giving us three keys to moving data-driven finance forward.
First, establish a single source of financial truth. Financial data is everywhere throughout your company. It’s important to establish one source of data as the “true north” for all of your financial decisions.
Next, embed analytics directly into your processes. This involves using a tool that has algorithms to identify trends and problem areas. It will save you a ton of time and uncover hidden insight into your finances.
There’s still one more key to learn. Head over to Digitalist’s blog to read it.
100K+ ACV SaaS Companies: Do Their Metrics Differ From Other SaaS Companies?
If you don’t read Thomas Tunguz’s blog, you should. It’s a regular read for me. In this week’s post, Tom looks for trends among SaaS companies who work with enterprise companies. His findings are interesting.
First, he found that gross margins vary widely for these types of companies - ranging from 79% to 34%. That’s likely due to the amount of customer support needed for enterprise customers. More customer support results in a lower gross margin.
Tom then looked at sales and marketing spending as a % of revenue. There wasn’t much correlation here, but the span was huge. Some companies spend as little as 15% of revenue on sales and marketing. Others, spend up to 133% on it.
There’s a lot more to learn from this post.
The Unexpected Wisdom of Servant Leadership
Not familiar with servant leadership? It’s a different style of leadership that almost sounds too good to be true. It’s “...a philosophy and set of practices that enriches the lives of individuals, builds better organizations, and ultimately creates a more just and caring world.”
It’s a powerful, very effective form of leadership but it does take a different approach. In practice, there are nine principles to servant leadership. Here are the first two principles:
- Serve first. You need to focus on your team’s collaboration as a whole and then on each individual’s personal and professional goals.
- Add value to others. There’s an interesting quote from Zappos’ CEO, Tony Hsieh. He says, “I think of my role as the architect of the greenhouse, and to help figure out the right conditions within the greenhouse to enable all of the other plants to flourish and thrive.” That’s a perfect explanation of this principle.
How One Company Balanced Current Performance with Investing in the Future
Varian Medical Research has helped fight cancer with innovation for the past 70 years. Typically, their Total Shareholder Return (TSR) had been strong. But, over the past few years, it started to dip.
Company leaders identified two areas they needed to improve to get the TSR back to where it should be. Those two areas were decision-making and compensation processes, which they determined were contributing to its underperformance.
The steps they took to correct that worked wonders and over an 18 month period, ending in March 2019, Varian delivered 40% Total Shareholder Return (TSR).
8 Procurement Tools for Modern Businesses
Last week, I wrote about financial tools that your company needs. This week, Spendesk is focusing specifically on procurement tools that you might need.
Procurement tools are built specifically to make your life easier by simplifying the procurement process. Usually, that process has a lot of moving parts. These tools can help:
- Precoro calls themselves “ground control for purchasing.”
- Promena e-Sourcing makes the Request for Quotation process much easier.
- Oracle Procurement Cloud has solutions for every step of the procurement process.
- PurchaseControl gives you total control over your company’s spending.
There are still four more tools that I didn’t cover here.
There aren’t any notable IPOs this week. Actually, there aren’t any at all. Fourth of July always throws that off. But, here are some IPO notes:
- Slack continues to fall. Although their stock price is still up from their IPO, it’s inching down each day. Some people are suggesting that it’s a good buy right now.
- Zoom has dipped recently, but continues its impressive climb.
- Uber, after a rough IPO, is rebounding a bit. Lyft, on the other hand, continues to fall.
- After an initial post-IPO climb-then-fall, Pinterest seems to have leveled out.