SaaSletter - Flying Blind
Announcing Our July 16 Event With Ebsta, G2, and People Data Labs
Flying Blind → Our Value Creation Summit
Poor forecasting in software1 has very real human costs, as best illustrated by GTM overhiring followed by brutal layoffs (via Cloud Ratings and People Data Labs):
… and massive economic costs - see this Zendesk case study with $6.8 billion lost due to missed plans:
With modern data + tools and a forward-looking orientation, these painful misses can be avoided with early detection:
Our Cloud Ratings Data Science practice area - best described to our many buy-side readers as “quantamental” or “insights from alt data” through our Alto Model - has conducted extensive testing of alternative datasets to forecast future financial results.
Even on an “outside-in” basis, improved forecasts are achievable.
Our Alt Data Research With People Data Labs
We recently published our research collaboration with People Data Labs: “Headcount as Alpha: Forecasting Revenue for Growth & PE Investors” 2
The study key points:
A sample of 45 publicly traded software companies
Regressions were measured across various lags (i.e. time intervals) to evaluate the forward-looking predictive power of headcount data in estimating future revenue performance
PDL Headcount data was benchmarked against four other alternative data sources for this study (note: Cloud Ratings has evaluated and benchmarked far more than five alternative data sets for its Alto Model)
Key finding: GTM headcount is highly predictive of future revenue:
An alternative framing of the value of alternative data: the status quo of channel checks.
Cloud Ratings regressed n = 264 equity research systematic channel checks covering 7,500+ data points, conducted by a Tier 1 investment bank. Top quartile alternative data outperformed equity research channel checks by 5x.
Our Value Creation Summit | Weds July 16
All of the above quantitative research, combined with my strong opinions on the human and economic costs of missed forecasts, inspired our upcoming Value Creation Summit.
Content
Proprietary data + case studies
Advanced strategies + tactics
Speakers
Guy Rubin, Founder + CEO of Ebsta
Sean Saint, Head of Investment Research at People Data Labs
Kai Mitsushio, Investor Alliances at G2
Ryan Walsh, Founder + CEO of RepVue
Matt Harney, Founder of Cloud Ratings
Jaap Westrik, Founder of Modern Revenue
Audience
Private Equity + Growth Equity Investors
Operating Partners + Value Creation Pros
CFOs + VP Finance + FP&A (especially private/growth equity backed)
CROs + VP Sales (especially private/growth equity backed)
Chief Marketing Officers (especially private/growth equity backed)
This slide from Jaap gives a *taste* of the advanced nature of the event’s content:
About Cloud Ratings
In mid-2024, we announced a research partnership with G2 - more here:
With this slide showing how our G2-enhanced Quadrants (like our recent Sales Compensation Software) release, this business of software newsletter you are reading, our podcasts, and our True ROI practice area all fit within our modern analyst firm:
Disclosure: Cloud Ratings has a partner agreement with PDL with compensation for referrals.