1. Are We Any Good at R&D Investment?
June 4, am PST|2pm EST
A SaaS Conversation with Tom Huntington, CFO Qstream

2. Housekeeping
All phones on mute, if you hear an echo, try dialing in on a landline and make sure that the sound on your computer is turned off You can send questions in chat to the moderator; we’ll take questions throughout and have Q&A at the end of the discussion Follow up discussion and questions thru the SaaS Q&A at

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4. Welcome to SaaS Conversations
Tom Huntington, CFO, Qstream
Tom Huntington is a highly strategic CFO and general manager with 20+ years of operating experience in finance, corporate development and general management. Tom is the CFO of Qstream, the leader in corporate microlearning solutions.
Lauren Kelley, Founder & CEO OPEXEngine
Lauren Kelley is the founder of OPEXEngine. She founded OPEXEngine to give Software and SaaS companies independent operational benchmarks — to reduce risk and improve efficiency and growth.

5. Poll – Question #1 Do you sit in Finance or R&D?
2. Do you think your company is getting a high level of return on your R&D investment?
1. Yes
2. No

6. R&D “Magic Number” Calculation:
Calculate by taking last year’s R&D expense against this year’s change in revenue

7. Is R&D spend correlated with revenue growth?
100 private SaaS cos in 2016
44 public SaaS cos from
Controlled for size by revenue
Controlled for S&M spend

8. The data are not encouraging

9. Why is it so hard? Innovation is speculative
Measuring product development is hard
Creative process as oxymoron
Simultaneous optimism and realism
Teamwork
Other?

10. Poll #2 Why do you think it is so hard? Innovation is speculative
Measuring is hard
Creative process
Simultaneous optimism and realism
Teamwork
Other

11. What to do?
Spend less Use budget constraint to drive better choices Require business case And remember to follow up on results after the fact More frequent milestones Demos, experiments, results - all the way up to the board Product-oriented board members Oversight begins at the top Culture of product market fitness Collaboration between customer-facing and product-facing teams

12. Qstream story The Problem The Fix 2016: $15M Series B
2017: 25% increase in R&D spend, upsell product launched
2018: upsell product cancelled
The Fix
2018: Regular board agenda item
2018: Product metrics
Attachment rates: Rebuilt SKUs in Salesforce
Adoption rates: New product usage reports, also MixPanel
Renewal rates: Lagging indicator
2019: Shift form Kanban to Scrum (Jira)
2019: Broader, deeper scrutiny of customer data prior to build

13. Audience Q&A

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