Ten Laws of SaaS and Cloud - with Byron Deeter - Bessemer Venture Partners

**Ray Rike** (0:00)
Hello, I'm Ray Wright, Founder and CEO of RevOp Squared, and host of the Metrics that Measure Up podcast. We talked to a wide variety of B2B SaaS industry thought leaders, executives, and people just like you to discuss what metrics, KPIs, and benchmarks they use to enable better data-driven metrics-informed decisions that accelerate revenue performance and increase enterprise value. Now, on to today's show. Welcome to today's episode of the Metrics It Measure Up podcast. Today, we are joined by Byron Deeter, managing partner at Bessemer Ventures. We are extremely fortunate to have Byron as a guest to talk all things SaaS and Cloud metrics. Who better to discuss this topic than a founding father of SaaS metrics, starting back to 2008 when Byron first published the 10 Laws of Being SaaSy, evolving to the 10 Laws of Cloud Computing, and including the six Cs of Cloud Finance, the BVP Cloud index in the Cloud 100 In today's episode, we will be covering three main areas, SaaS metrics and the evolution to Cloud metrics, the six Cs of Cloud Finance, and a crystal ball from Byron into the future. What's the next big thing? Byron, thanks for joining us today, and please take a moment to give a brief background to our listeners.

**Byron Deeter** (1:27)
Ray, it's great to be with you again, and certainly a lot of appreciation for what you've done for the industry through the years as one of the thought leaders here. Myself, I've had the good fortune of working in and around this area for almost two decades now, both as an operator and as an investor. I started off as a early cloud CEO with a company called Trigo Technologies back when it was in the ASP and SaaS world. And then I came over to work with Bessemer in 2005 to help accelerate our global cloud efforts. And I had the good fortune of working with Bessemer through that time as they were my largest shareholder and investor, so I got to know them very well through that process. And I've since been able to go on and now work with several dozen cloud CEOs in this next wave of the cloud market evolution, including many that have gone on to be public companies themselves now.

**Ray Rike** (2:14)
Yeah, small little companies like LinkedIn and Twilio, right?

**Byron Deeter** (2:18)
We've worked with some very good ones along the way. DocuSign and SendGrid and Box and PagerDuty and a long list that my partners and I have been able to collaborate with.

**Ray Rike** (2:28)
Well, it's a real impressive roster of investments that you made and Byron, you and I go back to those days at Trigo where you were an entrepreneur and founded a enterprise ASP kind of cloud company. But then you jumped into Bessemer and you really kind of jumped headfirst into the SaaS and Cloud investing. What stimulated you to take that risk and jumped so headfirst into Cloud and SaaS?

**Byron Deeter** (2:54)
I saw the benefits firsthand, I think is the easy answer and got religion. One of the real fights we hit our head against every day and tried to carry on was this idea that there was a better way than the licensed on-prem software world of the prior years. And it was still early in that evolution and eventually the revolution. And so we had an uphill battle in almost every meeting we went into, whether it was financing or talking with customers. And yet I came out of that experience absolutely convinced that for both parties, the software vendor and for the customer, that cloud was a better overall package, both in terms of business model and tech delivery model. And I wanted to go all in. And so the vast majority of my work at Bessemer Venture Partners has been around cloud computing. I've dabbled in some frontier tech and some internet infrastructure. But the vast majority of what I do day in and day out is trying to find the next great cloud entrepreneurs and helping them realize their vision.

**Ray Rike** (3:54)
Well, because you jumped in to SaaS and cloud so early, there really wasn't a playbook of here's how to build an amazingly successful SaaS company. In fact, since I've been following you for so long, you had to create some of the key performance indicators and metrics that both investors and operators could use to say, how's my SaaS business trending? I remember you came out with the 10 laws of being SaaSy and then the 10 laws of cloud and now Bessemer 6C's of cloud finance. Can you tell our listeners a little bit about how those KPIs and metrics evolved from your perspective as an investor and then from an operator's perspective?