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Browse: Home / Economics

Economics

Basics of Unit Economics Analysis

Basics of Unit Economics Analysis

By Derek Pilling on January 22, 2014

When an investment passes our first-screen at Meritage Funds, the first deep-dive we typically do is on the unit economics of the business. Unit economics are the fundamental financial building blocks of a business. If you can pin down the unit economics, you can determine contribution margins, break-even points and perform ROI calculations all of which […]

Posted in Business | Tagged average customer lifetime, capital expenditures, churn, contribution margin, Economics, Growth Equity, Investment Selection, marginal operating costs, Raising Capital, unit economics

"The Blip", False Patterns, And How Startups Are The Future of Work

"The Blip", False Patterns, And How Startups Are The Future of Work

By Chris Yeh on August 13, 2013

I spend a lot of time thinking about the future–both mine, and that of the world as a whole–and one of the things that has been on my mind is the need for us to do things differently. A recent longform piece in New York focused on the theory that the seeming inexorable economic progress […]

Posted in Trends & Concepts | Tagged Economics, future, patternmatching, startups, work

Book Review: ‘Cloudonomics: The Business Value Of Cloud Computing’

Book Review: ‘Cloudonomics: The Business Value Of Cloud Computing’

By Ben Kepes on December 7, 2012

One of the most interesting areas in the conceptual discussion of the cloud is the economic impacts it can bring. The conversation is so much broader than just cost savings; there is a deep and complex series of discrete topics to look at relating to both costs and ROI relating to cloud. One of the […]

Posted in Trends & Concepts | Tagged Business Value of Cloud Computing, cloud computing, cloudonomics, e-commerce, Economics, Joe Weinman, Weinman

To Make Money, Be A Garbageman

To Make Money, Be A Garbageman

By Chris Yeh on January 18, 2011

Plumbers and garbagemen make a good living despite their lack of PHP coding skills. That’s because they’re willing to do the necessary but unpleasant.Basic economics teaches us that prices are determined by supply and demand. Scarce skills like being …

Posted in Business | Tagged businessmodel, Economics, google, job market, success, Supply and demand | 1 Response

The Cloud Economics : Emerging Signals

The Cloud Economics : Emerging Signals

By Sadagopan on November 17, 2010

Over the weekend, I finished reading the recently released Microsoft paper on the “Economics of the cloud”. As I head to Denver today for participating in the defrag panel on the impact of cloud computing in the enterprise irregulars track, I just…

Posted in Application Software, Featured Posts, Infrastructure | Tagged cloud computing, cloud economics, Clouds, conferences, data center, defragcon, Economics, Emerging Models, microsoft

Why I’m Contrary on Compensation

By Derek Pilling on June 28, 2010

When I was a teenager, I spent two summers working in a furniture manufacturing factory. The company, Steelcase, was (and still is) one of the largest office furniture manufacturers in the world. I worked in the binder-bin plant – a binder-bin is the cabinet that mounts on the back of your desk at about eye-level. […]

Posted in General | Tagged books, compensation, Daniel Pink, Drive, Economics, Edwards Deming, lessons learned, punishment, rewards, The New Economics, venture capital

Do You Sell Multi Year Contracts?

Do You Sell Multi Year Contracts?

By Krishnan Subramanian on April 4, 2010

One of the key selling point of SaaS is the pay as you go model. In fact, some people even consider this to be part of the very definition of cloud computing. Yesterday, Phil Wainewright wrote a post about SaaS vendors selling multi-year contracts. He quotes a talk given by CEO of Workbooks.com, John Cheney, […]

Posted in Strategy | Tagged contracts, Economics, saas

The “Leo the Late Bloomer” of Business Models

The “Leo the Late Bloomer” of Business Models

By Derek Pilling on March 24, 2010

My kids love the book “Leo the Late Bloomer”. As the story goes, Leo was a tiger cub who hadn’t quite hit his stride yet. Leo couldn’t do anything right. He couldn’t read. He couldn’t write. He was a sloppy eater… Leo’s father, playing the classic fatherly role, was very concerned. He couldn’t figure out what was wrong with […]

Posted in Design | Tagged Economics, saas, Uncategorized, venture capital

The math of SaaS revenue growth

By Derek Pilling on November 10, 2009

A conversation with the CEO of a SaaS company today reminded me of the importance of the rule of 78s. What is this “rule”, you ask. If you run a recurring revenue business, it is the most important number you have never heard of. Back to my conversation with the CEO. We were talking about the […]

Posted in Analysis | Tagged Economics, lessons learned, recurring revenue, rule of 78, saas, Uncategorized, venture capital | 4 Responses

The New Economics of Technology Startups?

The New Economics of Technology Startups?

By Guest Authors on September 22, 2009

I have recently been reading the book “Free: The Future of a Radical Price” by Chris Anderson.  Well I am not actually reading it as I find I do not have time for reading books any more.  These days I do all of my “book reading” using audio books from Audible.com.  I find that by […]

Posted in Analysis, Strategy | Tagged advertising, business models, Economics, freemium, michaud, software revenue, startups

Cognitive Dissonance: Are you a technology or a service?

Cognitive Dissonance: Are you a technology or a service?

By Derek Pilling on August 5, 2009

One of the trends I’ve observed over the past several years is that more and more technology entrepreneurs are starting service-delivery business.  By services businesses, I’m referring to the category of businesses that some venture investors refer to as technology-enabled services (“TES”). We at Meritage prefer the term network-enabled services (“NES”), which we think more […]

Posted in Analysis | Tagged business models, capital efficiency, cloud computing, compeititve advantage, Economics, execution, lessons learned, risk, saas, service business, services, Technology, venture capital | 1 Response

Financing a Services Business: The Valley of Death

Financing a Services Business: The Valley of Death

By Derek Pilling on July 30, 2009

It is a late afternoon ritual for me to read the Meritage Minute, a daily briefing on key news events published by my colleague Heidi Longaberger. If you would like to receive The Minute, email Heidi. Yesterday’s briefing included an AlwaysOn piece titled “In Ten Years Will All Apps Be in the Cloud?” I’m not […]

Posted in General | Tagged capital efficiency, cloud, cost structure, Economics, Entrepreneurship, financing strategy, lifetime value of a customer, recurring revenue, saas, services, startups, vc funding, venture capital

Recession Is Good For Cloud Computing – Microsoft Agrees

Recession Is Good For Cloud Computing – Microsoft Agrees

By Krishnan Subramanian on February 12, 2009

Image by Getty Images via Daylife When the whole world was gloomy with onset of current recession, we (the members of cloud computing community) are happy about it in a way. Every single cloud computing evangelist will tell you that recession is good for cloud computing. The reason is obvious CapEx is converted into OpEX […]

Posted in Enterprise, Small business, Strategy | Tagged capex, cloud computing, Economics, economy, microsoft, opex, recession, saas | 6 Responses

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