Category Archives: SaaS

Insider’s 2016 year in review

Insider, a personalization and predictive marketing tool where we’re investors, recently shared its 2016 year in review. At less than 2 minutes, it’s a short and to the point clip.

The highlight of the clip for me is the list of the new offices that Insider set up in 2016 on its journey to become a global company. This journey will continue in 2017.

You can watch the full clip below.

Insider at the Webrazzi Summit

Hande Cilingir, co-founder and CEO of Insider, a multi-channel online marketing technology provider where we’re investors, recently gave a talk at the Webrazzi Summit.

In her talk, Hande talks about Insider’s predictive modeling tool, shares how Insider uses this tool to segment and target its clients’ most valuable customers, and hosts LC Waikiki’s e-commerce director Salih Yilmaz to provide an overview of LC Waikiki’s experiences working with Insider.

You can watch the full talk in Turkish below.

Insider’s new round

Insider, a customer acquisition and optimization software provider where we’re investors, recently announced its new funding round. The round was led by 212 and also included participation from Wamda Capital, Dogan Holding’s investment arm Oncu, and existing angel investors Melih Odemis, Emre Kurttepeli, and Erinc Ozada.

When we originally invested in Insider 3 years ago, over 90% of the company’s revenue came from Turkey, with the remaining coming from the recently launched Russia office. Since then Insider has tripled its revenue in Turkey while also beginning to serve several new geographies including the Middle East, Poland, and most recently Asia Pacific. The majority of Insider’s current revenue comes from outside of Turkey.

I congratulate the Insider team on their capital efficient growth which laid the foundation for this round, and welcome Insider’s new investors to the company.

Making your buyers look like heroes

I was recently meeting with one of our enterprise SaaS companies. We were reviewing the company’s performance in 2015, a year in which the company has been very successful in acquiring new customers. I asked our entrepreneur what was behind the sales team’s success. My expectation was that his answer would highlight the company’s successful sales team recruitment and variable compensation strategies, as well as the strength of the company’s product.

While these factors were part of the answer, they were not the most important factor. The entrepreneur shared that the most important reason behind the company’s sales success was that each sales team member focused on making the person responsible for their customer’s buying decision look like a hero inside their company. This requires more than just a great product. Specifically, it requires that people inside the customer company know how great the product which the buyer purchased is.

To achieve this, our startup prepares case studies contrasting the customer company’s performance on relevant metrics before and after our startup’s SaaS tool is implemented. This is something that the buyer could prepare themselves, and the best buyers do prepare this output. However, many don’t. And even those who do may not present the performance difference as clearly as our startup. Our startup knows how to best convey the uplift from having prepared the same presentation for tens of other companies.

The result of this effort is that the buyer looks like a hero inside the company. And when the buyer looks good, they’re more likely to refer our startup’s product to buyers in the same role at other companies. They become advocates for our startup and this makes it easier for our startup to acquire new customers. They’re also more likely to renew their contract when the time comes, a consequence we’ll likely observe in 2016.

If you’re an enterprise SaaS company, making your buyers look like heroes is a cost effective way for you to acquire new customers and retain existing ones.

Insider’s international presence

I wrote about our customer acquisition and conversion optimization SaaS startup Insider in an earlier post. Insider is a rare example of a SaaS company emerging from Turkey.

The reason why there are few SaaS companies created in Turkey is because, unlike e-commerce, marketplace, and classifieds businesses whose local operational requirements give an advantage to local players, SaaS businesses tend to compete globally. Turkish startups have traditionally chosen to focus on serving local needs rather than engaging in global competition.

Insider is an exception. In addition to its Turkish operations, Insider has offices in London, Dubai, and Moscow. It serves leading players in each of these markets including Trendyol, eBay, Aramex, and Lamoda. The company recently opened its Warsaw office and plans to open additional offices in Saudi Arabia, Italy, Brazil, and Spain throughout 2016.

Rather than being content with playing in its own backyard, Insider is pursuing a much more ambitious goal. And it is doing so successfully. Insider’s performance in the geographies it has entered so far shows that it’s possible for a SaaS company headquartered in Turkey to succeed in international waters.

I hope that Insider serves as a role model which accelerates the creation of new SaaS businesses in Turkey.

SaaS metrics

Software as a service (SaaS) businesses shift a company’s fixed upfront software costs into variable pay-as-you-go costs that occur in the future. This makes SaaS businesses attractive for customers while also giving a relatively more predictable revenue base for the software provider.

However, when software is offered as a service, it’s no longer sufficient to evaluate the health of the business based on the traditional metrics of a license-based software provider. License providers care mainly about how many customers buy the license and how much revenue they earn from these customers.

In addition to these two core metrics, SaaS businesses need to monitor several more.

First, the shift to a pay-as-you-go model lowers long-term customer lock-in and gives the customer the chance to stop using the software each month. This makes it very important to monitor a SaaS business’ churn.

Second, customers’ ease of churning makes customer service very important. In the licensing model, customer servicing costs are largely incurred at the time of sale. However, in the SaaS model, these costs occur on a monthly basis and can eat in to your monthly recurring revenue (MRR).

Finally, the makeup of a SaaS business’ MRR is a strong indicator of the health of the business. The Social + Capital Partnership, investor in leading SaaS companies like Yammer, Box, and Slack, recommends breaking net MRR into new MRR (from new customers who begin using the software), expansion MRR (account upgrades from existing customers), contraction MRR (account downgrades from existing customers), and cancelled MRR (from existing customers who stop using the software). You can view their full presentation on what they look for in SaaS businesses here.

Especially at the early stages of a startup, it’s important for the company to be increasing its MRR by acquiring new customers rather than through account upgrades from existing customers. If expansion MRR is responsible for net MRR increasing for a startup where new MRR is otherwise outpaced by the contraction MRR and cancelled MRR, this should raise a red flag.

Social + Capital defines the quick ratio as the sum of new MRR and expansion MRR divided by the sum of contraction MRR and cancelled MRR, and looks for a quick ratio higher than 4 in its investments. Given its track record, this is probably a good target.


Insider is a customer acquisition and conversion optimization platform for e-commerce businesses. The company was founded by Hande Cilingir, Serhat Soyuerel, and Arda Koterin in 2011 under the name Sociaplus. We invested in the company in 2013, a year after Galata Business Angels, when the company was operating only in Turkey. Since then, the company has changed its name to Insider and is currently serving customers in Europe, the Middle East, and Russia.

Insider offers businesses a suite of SaaS tools to help them segment their users, find those and similar users on the web and bring them to their website, and get them to complete a desired action. This requires the delivery of a personalized experience based on demographic and behavioral data through a combination of social, email, mobile, and on-site channels.

Together with the growth of mobile usage, clients have started getting the most value from Insider’s mobile solutions. Insider co-founder Arda gave examples of the company’s mobile tools at the Webrazzi Mobile conference in April. The full presentation is below.

Cap tables

I recently read Fred Wilson‘s blog post on Union Square Ventures’ company eShares.  Basically, eShares is a platform which allows companies to manage their cap tables online. Companies can issue shares and options, manage secondaries, and perform other cap table related actions through a centralized online platform accessible to all the parties involved in the company.

Working with over 60 companies, it takes a lot of time for me to keep each company’s cap table updated. Each time a primary or secondary transaction takes place, or an employee receives equity or options, these cap tables need to be updated. They then need to be shared with all other parties. The current way this happens is through tens of emails exchanged among founders, employees, investors, and lawyers. Very often one party doesn’t have the latest version of the cap table and this creates a lot of confusion.

I then saw the Twitter exchange below between Cem and Fred. I hope that eShares starts supporting companies outside of the US soon. We would be among the first users in Turkey.