Great mind in a great body🏃🏻♀️- Tips for hiring the greatest⭐️- The rise of new Commerce🛒- The new SaaS metric that rules them all (metrics)📐- Amazon vs. the Anti-Amazon alliance 🤼♀️
"Advertising and commerce have now become closer than ever and they can be seen as 2 sides of the same coin". Rex Woodbury
Episode #78. Hey Sunday reader 👋🏼
This Sunday, The Timestamp is here again to help you! Get your weekly dose of summaries from the articles, books, or podcasts you may have missed in tech & culture.
This summer, many of you enjoyed reading this newsletter looking at the number of likes, shares, and new (free) subscribers! Keep it on and thank you 🙏
#1. Is your body your ultimate intelligence?
Last week, we covered here in The Timestamp the very first philosopher, Socrates (even if some would debate that it is Thales). Philosophy can be a strong support to understanding our daily life as well with this (French) podcast below from Charles Pepin “Et si le corps était notre plus belle intelligence?”. Click on the image below to get to this podcast 👇
This podcast, all starts with a reference to Plato who was the first to invite us “to look up in the sky”. In short, to be able to think properly, one would have to listen to his/her body.
“Le coeur a ses raisons que la raison ne connaît pas” from Blaise Pascal is another heritage from Plato. This separation of the body and the mind is called ‘dualism’.
Rousseau debated strongly with Kant about the key concept that separates them: Rousseau thinks that our heart can guide our decisions while Kant argues that it is ‘Pure Reason’.
Define the word ‘intelligence’: The etymologic meaning is ‘what relates us to’.
Another way of looking at our reason, our brain, is that it cannot be physiologically separated from our body. Spinoza will even state that “we do not know what the body can”. Hegel will follow saying that “we have a body and a heart that are intelligent”. Lacan and Freud will finally say that we have to pay attention to the signals that our body sends us”.
Should you have an important decision to make tomorrow, it may be wise to listen to what your body tells you. Your close friends can help you understand how you are in case you are not fully aware that you look strong and happy right now… or not.
#2. Tips to identify the greatest hires
I have to confess one thing. Many readers of The Timestamp seem to enjoy the Twitter threads we share here. This week, this is the big return of Patrick Kervern who pushes us to this threads about hiring from Michael Houck @callmehouck
Mickael Houck co-founder of Launchhouse shares tips on hiring exceptional talents for startups:
They proactively ask for feedback,
They prioritize high-value work (at startups you can't put out every fire right away),
They don't care about their job title (title inflation is a common mistake at startups),
They listen well,
You learn from them,
They ask great questions,
They respond quickly,
They have a genuine passion for the problem you're solving,
They bring solutions not problems,
They take notes,
They communicate and collaborate well,
They hustle (which I like to translate into ‘speed is perfection’).
#3. The rise of new Commerce
I am a big fan of the newsletter called Digital Native written by Rex Woodbury. In my week job (not The Timestamp which is a side hobby), I interact regularly with experts in digital commerce, advertising, and marketing; this post (click below to access) is a great summary of the big chaos in customer acquisition.
If you work in adtech or martech, there is no way you could miss this article from Rex Woodbury 👆. If you don't work in advertising or in marketing, you have the opportunity to read the one article summarizing where this whole industry is going to get you to buy online. Why does it matter? because…
"Commerce is now a $26 trillion global market (e-commerce is about $10 trillion)".
Two decades into the Internet age, the way we discover goods or services to buy has been completely reinvented. But today, there is one aspect of commerce that is reaching some inflection point, some kind of chaos: customer acquisition.
"There are two primary types of shopping: search-driven shopping and discovery-driven shopping. Today, Amazon dominates search-driven shopping: 74% of online shopping searches in the U.S. now originate on Amazon.com".
Amazon’s dominance in search-driven shopping is a key reason it’s been able to build a $ 30 billion advertising business in a few years; Google and Facebook/meta who were totaling up to $2 every $3 invested in online advertising are found a true challenger.
But Amazon has not yet cracked the discovery-driven shopping part of the equation (see table below).
Advertising and commerce have now become closer than ever and they can be seen as 2 sides of the same coin.
Direct response is where 80% of the money is in digital advertising, which makes sense—direct response drives real outcomes for brands, and it’s highly measurable. Direct response lends itself naturally to the internet, where attribution is easier than with TV or physical advertising like billboards.
But today, the customer acquisition engine is kind of broken; customer acquisition costs keep growing online as it becomes more and more difficult to track sales transactions after an ad is displayed... Stricter privacy regulations are creating more complexity and the number of valuable digital ad placements is finite.
So it is time to make a guess. What is the future of commerce? The author believes that creators (not influencers) may be the solution to help create the next-generation sales channel for brands, in a transparent and privacy-forward way.
In the end, what brands will always want is:
Only pay when they’ve acquired a new customer and done so profitably;
Strictly control who can sell/promote their brand and where; and
Measure what’s working and know what’s worth doubling down on.
In case you see another idea to resolve the CAC chaos, you might be seating on a multibillion-dollar business opportunity.
#4. The ultimate SaaS performance indicator: APE
Some like to believe that SaaS business is deterministic only. I will not enter this debate but… for sure SaaS businesses have metrics that prove very useful to evaluate how they are performing vs their peers. This article from Techcrunch focuses on one new KPI 👇
Running a SaaS company, you run a subscription-led business that is measured either monthly in MRR (Monthly Recurring Revenue) or monthly x12 in ARR (Annual Recurring Revenue).
Metrics are great but they also need to be understood by your team so that they become actionable.
Sales and marketing efficiency can usually be measured by the well know LTV-to-CAC (Lifetime value of a contract / Customer acquisition cost). It can also be measured on a company-wide basis as Cash burn needed or Capital raised to generate new ARR.
Like always, using metrics, what counts is to be able to focus on a few. The new one presented by this TechCrunch article is ARR per employee. Since close to 70% of the cost in a SaaS company is people-related, it becomes a new metric that we will measure during those uncertain times when fundraising is more difficult. APE (ARR per employee) becomes the new rule.
No precise number can be defined as good as it will depend highly on the location of your HQ. Engineers will get paid more in Silicon Valley than they would cost in Europe. But the average Cloud company is close to $350k APE and the average APE for companies who went IPO 2021 was $271k. What is your APE in your company?
#5. The anti-Amazon alliance
Here are the key takeaways from a great article published in the Stratechery published in 2020 called the anti-Amazon Alliance. Click HERE to access the source article.
If you look at an online merchant business, you might want to consider building your commerce stack without Amazon. Here is what it may look like:
Facebook helps find the customers
Shopify or WooCommerce build the storefronts
Stripe or PayPal handle payments
Third-party logistics providers package and ship the goods
USPS, Fedex, and UPS deliver the actual packages.
But "49% of Internet shoppers start their searches on Amazon, and only 22% on Google; Amazon’s share is far higher for Prime subscribers, which include over half of U.S. households."
Then building a merchant’s stack with Amazon may also look like this:
Customers come to Amazon directly
Searches on Amazon lead to Amazon product pages or 3rd-party merchant listings that look identical to Amazon product pages
Amazon handles payments
Amazon packages and ships the goods
Amazon increasingly delivers the actual packages
"At first glance, Shopify isn’t an Amazon competitor at all: after all, there is nothing to buy on Shopify.com. And yet, there were 218 million people that bought products from Shopify without even knowing the company existed.
The difference is that Shopify is a platform: instead of interfacing with customers directly, 820,000 3rd-party merchants sit on top of Shopify and are responsible for acquiring all of those customers on their own."
And there is a new counterattack against Amazon that Google is deploying since 2020 with search results on the Google Shopping tab that will consist primarily of free listings, helping merchants better connect with consumers, regardless of whether they advertise on Google. This is referred to as the"Anti-Amazon" alliance in this article.
The ultimate game may also be the capacity to build a differentiated transactional data asset to make sure customers come, buy more often, and return to one merchant. Amazon says they would not collect third-party data from the website of third-party merchants... Truth or deer?
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