The Rule of 40 is the SaaS heuristic stating that revenue growth rate plus profit margin should be 40% or more. The metric provides a single number balancing growth (which drives valuation but costs cash) and profitability (which signals capital efficiency). It is widely used by SaaS investors as a quick health check at growth and scale-up companies, with the underlying logic being that companies should either grow fast enough to justify burn (high growth + negative profit OK) or be profitable enough to justify slower growth (modest growth + positive profit OK). It is a useful directional metric and one frequently misapplied at early-stage where the math doesn't work yet.
The calculation:
Basic formula:
Expansion revenue is the incremental revenue generated from existing customers through upsells, cross-sells, seat expansion, usage growth, and pricing increases on existing contracts. It is considered the most-valuable form of growth at SaaS companies because it requires minimal customer acquisition cost (the customer is already acquired), produces high gross margins, and signals product-market fit (customers wanting more). Expansion revenue is a primary driver of Net Revenue Retention, a key SaaS valuation determinant, and is the growth motion that distinguishes companies with expanding accounts from companies stuck at flat ACVs.
The sources of expansion revenue:
Seat expansion: more users from the same customer.
Tier upg...
RICE is a prioritization scoring model that ranks product opportunities using Reach × Impact × Confidence ÷ Effort, producing a numeric score across a backlog. It was developed at Intercom (Sean McBride, blogged 2017) and is used as one of the most common starting frameworks for product teams that want structured prioritization without inventing a custom model. It is widely adopted because it's simple enough to compute on a spreadsheet and rigorous enough to force the team to specify what they're claiming about each initiative.
The formula component by component: Reach is the estimated number of people (customers, users, requests) affected by the initiative in a defined time period (usually per quarter or per month), grounded...
A follow-on investment is a subsequent investment in a portfolio company by an existing investor, typically in a later round. For example, a Series A investor participating in Series B. The capital is used either to maintain ownership percentage through pro-rata rights as the company raises additional capital, or to increase ownership beyond pro-rata in winning portfolio companies where the investor has strong conviction about future returns. It is one of the most strategically important VC activities and the place where good portfolio construction either creates or destroys value over a fund's lifetime.
The two main types:
Dissolution is the legal process of formally winding up and ending a corporation or LLC. It includes settling outstanding debts, terminating contracts, distributing any remaining assets to owners per the liquidation waterfall, filing final federal and state tax returns, terminating registrations in qualified states, and filing dissolution paperwork (Certificate of Dissolution in Delaware) with the Secretary of State. It is the cleanup process founders most consistently skip when a startup winds down, creating tax and compliance debt that catches up to them years later.
The major steps in a typical Delaware C-corp dissolution: board approval (board resolution to dissolve), shareholder approval (typically majority shareholder vote...
A vision statement is the articulation of the future state the company is working to create, typically 5-20 years out. It provides direction for strategic decisions and inspiration for the team. The vision sits alongside but distinct from the mission statement (which describes what the company does now). Vision statements are often more aspirational and abstract than mission statements (which should be concrete and present-tense). The rare good vision statements paint a specific enough picture of the future that they actually guide long-term strategic choices. It is one of the higher-leverage documents at company founding when written well and one of the most-skipped or most-generic when written poorly.
The components of a ...
Jobs To Be Done (JTBD) is a customer-research framework focused on the underlying job a customer hires a product to do, not demographics or features. The job covers the functional progress the customer is trying to make plus the emotional and social dimensions. The central thesis is that people don't buy products, they hire products to make progress in their lives. It was popularized by Harvard Business School professor Clayton Christensen in The Innovator's Solution (2003) and Competing Against Luck (2016), drawing on earlier work by Anthony Ulwick (Outcome-Driven Innovation, ODI).
The canonical illustration is the milkshake story from Christensen's research with a fast-food chain: the chain wanted to sell more milkshakes a...
A product requirements document (PRD) is a written specification of what a product or feature should do, for whom, and why. It is used to align stakeholders before engineering begins and to capture the decisions and tradeoffs that shape a build, typically authored by a product manager in collaboration with design and engineering. It is the single most-debated artifact in modern product management because the right level of detail varies enormously by team size, product complexity, and engineering culture.
The classical PRD template (Microsoft / Marty Cagan era) ran 20 to 40 pages and covered problem statement, user stories, functional requirements, non-functional requirements, success metrics, dependencies, ris...
Brand identity is the visual, verbal, and experiential expression of a brand that customers see, hear, and recognize as belonging to the company. It includes the logo, color palette, typography, photography style, illustration approach, voice and tone, design system, and overall aesthetic. It's the tangible expression of brand strategy; [Brand Positioning] is the strategic foundation (what the brand stands for), while brand identity is how that strategy manifests visually and verbally.
The components of brand identity:
Visual identity:
North Star Metric vs North Star Framework: the metric is the single number a company organizes around (DAU, nights booked, etc.). The [North Star Framework] is the operating system around it, the NSM plus its input metrics, the org rituals that use it, and the decision rules it informs. Pick the metric here; install the framework there.
A north star metric (NSM) is the single metric that best captures the core value a product delivers and serves as the company's organizing target. The point is to keep the whole team steering toward the same outcome rather than optimizing local metrics that don't ladder up to long-term business health. The term was popularized at growth-stage tech companies and codified by Sean Ellis, Sea...