Tom Tunguz

MARCH 24, 2019

The company grew from $61m to $331m in revenue in the past three years. The result is the company spends less than 10% of its revenue on R&D, which is less than half the median of the peer set. These customer acquisition paybacks resemble consumer acquisition figures more than software. Congratulations to the team!

Metrics 268

Metrics Benchmarks Scale Acquisition 268

SaaStr

SEPTEMBER 20, 2023

Discover Bessemer Venture Partners’s annual State of the Cloud report, going through trends, benchmarks, and metrics that underpin the Cloud economy. Announcements of several blockbuster acquisitions, most notably from Adobe acquiring Figma, which was the highest valuation multiple offered in an acquisition for any software company at scale.

Cloud 248

Cloud Payments Software Review Payment Solutions 248

OPEXEngine

APRIL 26, 2022

Well, capturing as much total available market (TAM) makes growing your business through customer acquisition necessary. Fast growth SaaS companies under $50M in revenues have a median 87% increase in new customers a year. What is Customer Acquisition Cost (CAC)? But first, let’s define some critical elements in this equation.

Acquisition 59

Acquisition B2B Benchmarks SaaS 59

Baremetrics

MARCH 23, 2021

When looking at metrics and benchmarks for SaaS companies , the quality of their landing page is a big part of what starts people moving down the sales funnel. Other concerns affect these rates of conversion as well and studying all of them with the proper benchmarks in place; makes it easier for every company to succeed.

Benchmarks 75

Benchmarks SaaS Social Media Sales Funnel 75

SaaStr

NOVEMBER 4, 2021

The “Rule of 40” is one of the most commonly cited valuation benchmarks in SaaS for both public and private companies. While SaaS is an amazingly transparent community with abundant benchmarking resources, there are much fewer publicly available studies that allow an analysis of the underlying drivers of “Rule of 40.”

SaaS 267

SaaS Technical Review Benchmarks Azure 267

Clouded Judgement

DECEMBER 21, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. Q3 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q3 starting with revenue. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 177

Cloud Software Benchmarks Retention 177

Tom Tunguz

DECEMBER 6, 2016

What is your SaaS startup worth in an acquisition? To answer that question, we can analyze the data set of all software companies acquired over the last six years and benchmark them by enterprise value-to-revenue multiples. What is your SaaS startup worth in an acquisition? EV/Revenue multiple is a composite metric.

Acquisition 100

Acquisition Startup SaaS Benchmarks 100

Chart Mogul

JUNE 1, 2023

Tips for tracking customer retention Four strategies to improve customer retention SaaS retention FAQ Is revenue retention more relevant to your business at the moment? Whether net revenue retention, gross revenue retention, or customer retention is your north star metric, we’ve got you covered. What is customer retention?

Retention 90

Retention Metrics Benchmarks SaaS 90

SaaStr

SEPTEMBER 19, 2023

Some of the changes we’ve seen in the last year or two include: CAC reduction Headcount optimization Price complexity Quality of revenue A different environment means a different strategy, and Notion Capital lays out four business model changes that could be helpful based on what peers are doing. Strive for $150k of revenue per FTE.

Business Model 250

Business Model SaaS Payments Payments Headcount 250

OpenView Labs

NOVEMBER 30, 2021

In 2021 the ‘ Rule of 40’ died, according to our latest 2021 Financial & Operating Benchmarks report that launched last week. . The ‘haves’, defined by growing quickly out of the gate and then maintaining 50% or faster revenue growth at significant scale, have seen their valuations skyrocket over the years.

Payment Services 80

Payment Services Benchmarks SaaS Payments Merchant Services 80

Tom Tunguz

JUNE 12, 2016

The acquisition frenzy continues in SaaS. trailing 12 month revenues and 6.7x next 12 month revenues. In the 2016 acquisition market, the median acquisition multiple is 7.8x trailing 12 month revenue and 6.4x next 12 month revenue. In the 2016 acquisition market, the median acquisition multiple is 7.8x

Acquisition 100

Acquisition Startup Banking Benchmarks 100

OPEXEngine

JUNE 29, 2020

If this is the first time you’re hearing about the Rule of 40, this financial framework helps you weigh up your revenue growth against your margins. Benchmark the health of your SaaS company, and. Using this framework, you can: Understand the trade off between growth and profitability. Read on to find out more!

Benchmarks 52

Benchmarks SaaS Sales Hiring Scale 52

Clouded Judgement

SEPTEMBER 12, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. We will see this show up in revenue figures in a quarter or two. Beating consensus revenue estimates is the first aspect of a successful quarter. net retention and CAC payback).

Cloud 169

Cloud Software Benchmarks Retention 169

Tom Tunguz

SEPTEMBER 10, 2013

Benchmarking is a great tool, if you can get access to representative data. Pacific Crest and David Skok have released a fantastic survey benchmarking SaaS metrics for early and growth stage companies. Below is my list of the six most important benchmarks and observations from that report. Median Monthly Revenue Churn is 0.75%.

Benchmarks 108

Benchmarks Startup Sales Hiring Compensation 108

Clouded Judgement

APRIL 12, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. Beating consensus revenue estimates is the first aspect of a successful quarter. The formula to calculate this is: (Q4 ’22 revenue) / (Q4 ’21 revenue) - 1. net retention and CAC payback). .”

Cloud 161

Cloud Software Benchmarks Retention 161

Clouded Judgement

JUNE 20, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. Beating consensus revenue estimates is the first aspect of a successful quarter. The formula to calculate this is: (Q1 ’23 revenue) / (Q1 ’22 revenue) - 1. net retention and CAC payback). .”

Cloud 161

Cloud Software Benchmarks Scale 161

User Pilot

OCTOBER 15, 2023

SaaS conversion rate optimization is important to create the best customer experience that helps lower the customer acquisition cost and increase MRR. Use benchmarks to monitor your performance to see how well each stage converts. But, the ultimate goal for any SaaS business is to translate this perceived value into actual revenue.

SaaS Payments 105

SaaS Payments Payment Methods Payment Solutions Payments 105

CustomerSuccessBox

OCTOBER 21, 2021

For so many years, SaaS has focused so strongly on the acquisition that they have been blind to other aspects of the customer journey. The Golden Benchmark in Customer Success. Thus you want your Annual Recurring Revenue to go up from one million dollars to 1.25 If you are a smaller company, this benchmark should be even higher.

Payments 52

Payments Customer Success SaaS Payments Revenue 52

User Pilot

OCTOBER 5, 2023

TL;DR The CAC payback period measures the time it takes for a company to recover the money invested in new customer acquisition. This metric helps SaaS companies choose the most effective customer acquisition channels , diagnose inefficiencies in customer retention strategies , and inform pricing decisions. Book the demo to see how!

SaaS Payments 105

SaaS Payments Customer Lifetime Value Payment Solutions Acquisition 105

Chart Mogul

MARCH 23, 2023

Are you effectively expanding revenue from your existing customer base? Gross revenue retention (GRR) and net revenue retention (NRR) are the key metrics to understand how well … How good is your business at retaining customers? Are you effectively expanding revenue from your existing customer base?

Retention 52

Retention Metrics Revenue Scale 52

ChurnZero

JUNE 9, 2023

Good sales teams typically get the budget, headcount and tools they desire because the function is tied to revenue. Annual recurring revenue (ARR) ARR is the aggregate value of contracts that renew yearly. A healthy benchmark is a 95% renewal rate in a given period. A healthy benchmark is 100% NRR or greater.

Finance 98

Finance Metrics Customer Success Headcount 98

Tom Tunguz

SEPTEMBER 16, 2017

This is a very nuanced question, but benchmarks do provide some guidance for what is reasonable. The chart above shows the sales and marketing investment of publicly traded software companies at different revenue levels. Looking in the outer revenue ranges at $25M, $50M and $100M, that figure asymptotes to about 50%.

Investment 274

Investment Startup Marketing SaaS 274

Chart Mogul

OCTOBER 3, 2019

The customer acquisition cost can help you create, measure, and improve a business model that will put your business on the path to profitability. This is where the value of subscription metrics comes to the fore — and specifically the customer acquisition cost (CAC) and the customer lifetime value (LTV). Gross margin = Revenue – COGS.

Acquisition 91

Acquisition Underperforming Technical Team Startup Customer Lifetime Value 91

Tom Tunguz

AUGUST 26, 2014

We will explore revenue growth, average revenue per customer, sales efficiency, payback periods, net income, gross margin and engineering spending. HubSpot has achieved amazing revenue growth in their first 7 years as a company growing by more than 12x from $5.7M in 2009 revenue to 2013 revenue of $71M - an 88% CAGR.

Benchmarks 108

Benchmarks SMB Metrics SaaS 108

Clouded Judgement

DECEMBER 20, 2022

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. Beating consensus revenue estimates is the first aspect of a successful quarter. The formula to calculate this is: (Q3 ’22 revenue) / (Q3 ’21 revenue) - 1. net retention and CAC payback).

Cloud 130

Cloud Software Review Software Benchmarks 130

OpenView Labs

NOVEMBER 12, 2020

When we were preparing the 2020 expansion SaaS benchmarking survey, our biggest question was: “How did COVID-19 and the economic downturn affect private SaaS companies?” Respondents were primarily CEOs (38%) and CFOs (29%) at expansion stage software companies with $1 to $20MM in annual recurring revenue (57%).

Benchmarks 52

Benchmarks Scale Technical Review SaaS 52

User Pilot

JULY 13, 2023

Different types of company growth include: Industry growth assesses your company’s performance by benchmarking against the industry average. Customer lifetime value (CLV) determines the total revenue a customer generates throughout the relationship. The formula of Customer Acquisition Costs (CAC).

Metrics 98

Metrics Customer Lifetime Value Benchmarks Churn 98

Tom Tunguz

JANUARY 14, 2015

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. of Revenue -611% -257% -80% -41% -37% -50%. The company reached $62M in revenue in year 7. Gross Profit -0.8 -2.0

Benchmarks 100

Benchmarks Metrics SMB Outsourced Development 100

Tom Tunguz

SEPTEMBER 2, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. Zendesk has matched the SaaS median for revenue growth each year, and slightly exceeded it in 2013.

Benchmarks 100

Benchmarks Metrics SaaS Scale 100

Tom Tunguz

SEPTEMBER 21, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. The company went public in 2013 and we’ll use data from their S-1 through 2013 to benchmark the business.

Benchmarks 100

Benchmarks SaaS Payments Metrics Scale 100

Tom Tunguz

DECEMBER 10, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. While the company took a little longer to hit its stride than most, Box is growing revenues incredibly quickly.

Benchmarks 100

Benchmarks Sales Hiring Metrics SaaS 100

Stax

FEBRUARY 21, 2024

So, of course when it came to revenue-driving activities, Ford knew that success in marketing—and business—wasn’t about how much your marketing spend is, but how efficiently you spend it. Enter the SaaS Magic Number, which measures the return on sales and marketing spend in generating new subscription revenue.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

Tom Tunguz

MARCH 24, 2014

With the Box S-1 in hand, I can now benchmark Box’s business against other publics, and in particular, SaaS companies nine years after founding. Box’s revenue grew 110% in the last twelve months, about 2x the average rate of 53% of a SaaS company in its ninth year. Box is also nine years old. Box spends nearly 3.7x

Benchmarks 100

Benchmarks Metrics SaaS SMB 100

Tom Tunguz

NOVEMBER 16, 2014

This post is part of a continuing series evaluating the S-1s of publicly traded SaaS companies in order to better understand the core business and build a library of benchmarks that might be useful to founders. In industry parlance, this is called negative revenue churn.

Benchmarks 100

Benchmarks Underperforming Technical Team Metrics Sales Hiring 100

Kellblog

OCTOBER 30, 2022

One of my new benchmarking themes is that people need to pay more attention to matching their benchmarks with their aspirations. Customer acquisition cost (CAC) ratio of 1.2 Sales and marketing (S&M) expense of 40% of revenues. This is all private SaaS companies, including 22% PE-backed and 13% boostrapped.

Metrics 136

Metrics SaaS Benchmarks Churn 136

Kellblog

MAY 19, 2021

Just a quick post to highlight my recent appearance on the Metrics That Measure Up podcast, hosted by Ray Rike , founder and CEO of RevOps^2 , a firm focused on SaaS metrics and benchmarking. Avoiding survivor bias , both in calculating churn rates and in comparisons to public comparison benchmarks (comps) [1].

Metrics 89

Metrics Scale Benchmarks Acquisition 89

Chart Mogul

OCTOBER 3, 2019

The customer acquisition cost can help you create, measure, and improve a business model that will put your business on the path to profitability. This is where the value of subscription metrics comes to the fore — and specifically the customer acquisition cost (CAC) and the customer lifetime value (LTV). Gross margin = Revenue – COGS.

Acquisition 52

Acquisition Startup Underperforming Technical Team Customer Lifetime Value 52