SaaS Business Model Competitive Advantage Revisited

Chaotic Flow

When trying to create a successful SaaS business model, being SaaS is interesting, but doing SaaS is essential. It’s far less important that your SaaS business model meet the exact definition of SaaS, than it is that your SaaS business model creates sustainable competitive advantage through SaaS. ” with a short visual tour of SaaS business model basics. SaaS Business Model Economics. What is SaaS?

Essentials of a SaaS Business Model

CustomerSuccessBox

The main difference between traditional businesses and SaaS businesses: the cost of growth. In the traditional world of software, companies like Oracle or SAP base their business on the marketing of licenses for their solutions. The SaaS Business Model.

Insiders

Sign Up for our Newsletter

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

What Is Good Retention: An Exhaustive Benchmark Study with Lenny Rachitsky

Casey Accidental

across business models, customer types, etc. Retention is not only the primary measure of product value and product/market fit for most businesses; it is also the biggest driver of monetization and acquisition as well. This does not make them inferior businesses!

Benchmarking and Budgeting Go Hand in Hand

OPEXEngine

In working with hundreds and hundreds of SaaS CFOs over the past 15 years, I’ve noticed that effective and strategic CFOs incorporate accurate benchmarking into the daily business of the company and especially into the budgeting and planning process. .

Research Report: The State of Community Management

Online communities provide a wealth of benefits for organizations. In collaboration with the Community Roundtable, we have provided you with a comprehensive summary of The State of Community Management 2020. Get a free copy today!

Q&A recap | 2022 SaaS retention benchmarks

ChurnZero

What does this mean for B2B SaaS businesses? In our webinar, 2022 SaaS retention benchmarks , SaaS Capital Manager Director Rob Belcher shares the results from their 11th annual B2B SaaS benchmarking survey. Rob Belcher from SaaS Capital answers your SaaS benchmarking questions.

Q&A recap | 2022 SaaS retention benchmarks

ChurnZero

What does this mean for B2B SaaS businesses? In our webinar, 2022 SaaS retention benchmarks , SaaS Capital Manager Director Rob Belcher shares the results from their 11th annual B2B SaaS benchmarking survey. Rob Belcher from SaaS Capital answers your SaaS benchmarking questions.

Coinbase & Uniswap: How 7 Key Benchmarks Stack Up

Tomasz Tunguz

Just how comparable are these businesses? Their business models differ meaningfully. Coinbase and Uniswap are two of the leading crypto exchanges. The market values COIN, Coinbase’s stock, and UNI, Uniswap’s token at about 3x trailing 12-month revenues.

Pulse 2021 Slides: Net Dollar Retention (NDR) Benchmarks and Thoughts

Kellblog

This is a quick post to share the slides I presented today at the GainSight Pulse Everywhere 2021 conference in a session entitled Net Dollar Retention, Key Benchmarks at $50M, $200M, and $1B in annual recurring revenue (ARR).

Reflections on the SaaS Sector’s Benchmarks Coming into 2020

OPEXEngine

Last week we published the most recent SaaS & Software benchmarks in our platform used by companies in their FP&A analyses for management, boards and investors. We’ve also added more filters by more granular break-outs of revenue, revenue growth rates and Average Contract Value, plus a filter for EBITDA, to help companies better compare themselves against the myriad SaaS business models that have evolved as SaaS has become more widespread.

What Is Good Retention: An Exhaustive Benchmark Study with Lenny Rachitsky

Casey Accidental

across business models, customer types, etc. Retention is not only the primary measure of product value and product/market fit for most businesses; it is also the biggest driver of monetization and acquisition as well. This does not make them inferior businesses!

SaaS Company Benchmarking: Leveraging Metrics for Performance Insights

OPEXEngine

My experience reinforces the fact that SaaS business model variants and approaches to measuring performance via metrics are still very much undefined. The Value of Benchmarking. By tapping into this horde of data, a skilled SaaS CFO can create comparable company benchmarks to validate their reporting methodology, then use these to drive their annual planning process and evaluate business performance on several levels. Top-Down Planning: Using Benchmarks.

SaaS Conversion Rates for All The Different Benchmarks

Baremetrics

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. 3 What Benchmarks Do You Want to Use? What Benchmarks Do You Want to Use?

Massive Growth, IPOs, and PLG: Fifth Annual Financial & Operating Benchmarks Survey Results

OpenView Labs

Today we released our fifth annual Financial & Operating Benchmarks Survey (formerly known as Expansion SaaS Benchmarks). product-led growth), and benchmarks well against economics that support high Free Cash Flow margins over the long term.

Nothing simple about SaaS benchmark metrics

Practical Advice on SaaS marketing

There are certainly plenty of surveys and published benchmarks on SaaS metrics that try to provide guidance. For example, it’s tough to make the SaaS business model work when attrition exceeds 10 percent. Use caution with rules of thumb But you should be careful not to take these SaaS benchmarks as gospel. Just because they apply to some SaaS businesses doesn’t necessarily mean they apply to yours.

Why a Low Customer Acquisition Cost (CAC) Isn’t Always a Good Benchmark

OPEXEngine

What it tells you about your company will depend on your goals, your business model and needs, and your customer lifecycle. Accordingly, your goal should be to improve the cost structure and scalability of your business.

Growth Benchmarks Are (Mostly) Useless

Brian Balfour

Most growth communities, forums, and email lists will inevitably have that thread that goes: “Hey, what are the benchmarks everyone’s seeing for X?” I constantly find people seeking out benchmarks or pointing to benchmarks, and we’ve all been there -- who doesn’t want some normalizing data to understand whether we’re on track or not? The desire is further fueled by many companies releasing “benchmark reports.” Now, back to benchmarks. Or the model of Z!”

2019 SaaS Benchmarks: Actionable Advice to Accelerate Your Growth

OpenView Labs

This week we released our third annual Expansion SaaS Benchmarks report. But benchmarks alone are not enough. We’ve got to make the leap from benchmarks to action. Here’s our advice on how to use the benchmark data to grow even faster in 2020. It has become clear that many of the best performing SaaS companies are embracing a product led growth strategy (for evidence, check out how they describe their business model in their S-1s).

SaaS, Subscription, and On-Premises Software – Don’t Confuse Subscription with SaaS

OPEXEngine

The terms aren’t universally understood, nor are the implications of each on the financial model of a company, so the following is an effort to provide an overview. At OPEXEngine, we pull apart the different nuances of each business model to make sure we are benchmarking companies correctly.

The Limitations of Data and Benchmarks

Tomasz Tunguz

And each metric only describes a facet of the business. It might be the case that as a company grows and matures and mechanizes its business model and its go to market strategy, that numbers capture more and more of the business. But even then, data is just one way to describe a business. . And for every one path trod by a business, there is another path less taken that a founding team will take to redefine all the rules and observations.

Why Financial Modeling Is Like A Superpower

OPEXEngine

Financial modeling is like a superpower—one that lets you test your assumptions and hypotheses across dimensions, versions, and time before executing budgets and plans. In other words, dynamic financial models show you the probable results of pulling various levers (e.g.,

What’s Your Magic Number for Sales and Marketing Efficiency?

OPEXEngine

Like the benchmarking of any key metric, you will drive operational efficiency and better use of your resources, when you see the variance between your company and your peers at the same stage and with a similar business model.

Benchmarking Atlassian's S-1 - How 7 Key SaaS Metrics Stack Up

Tomasz Tunguz

The chart above details the revenue growth of the business compared to the median of the 50+ publicly traded SaaS companies. It follows a beautiful geometric curve characteristic of Flywheel business models, where an efficient customer acquisition engine keeps building momentum and growing revenues exceptionally. Perhaps the most impressive part of Atlassian’s business is their go-to-market efficiency.

Benchmarking Tableau's S-1 - How 7 Key SaaS Metrics Stack Up

Tomasz Tunguz

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. All of the businesses we’ve looked at in the past have been purely SaaS businesses. The company went public in 2013 and we’ll use data from their S-1 through 2013 to benchmark the business.

Is Strategy Dead in Tech? The Winners Don’t Think So

OPEXEngine

Although the San Jose-based company has always been a leader in developing world-class creative software like Photoshop and Illustrator, its go-to-market model (licensing boxed software) eventually slowed it down. What are we learning about this business and how is it changing?

Capitalizing Software Development Costs in a SaaS Business

OPEXEngine

We think GAAP financials generally do a better job than cash-based financial statements in reflecting the underlying financial performance of a SaaS business. Background: Before the emergence of the SaaS business model, most software firms would make major product releases every few years.

There are No Shortcuts: 5 Hard-Won Lessons from Zenefits CEO Jay Fulcher

OPEXEngine

There are no shortcuts to building a business.”. However, if the basic ingredients for growing a sustainable, high-performance business are missing, you’re setting yourself up for frustration.”. However, this model was unsustainable. Business Model.

5 Reasons COVID-19 Changes SaaS Forever

OPEXEngine

I’ve met thousands and thousands of SaaS CEOs and execs and I can affirmatively say that most SaaS businesses have adopted the product model of the future (cloud) but still employ the internal practices of the past. Older businesses will be looking to learn from them.

SaaS 56

The Complete Guide to Understanding Net Negative? Churn

OPEXEngine

To help readers understand this concept better, David Skok of ForEntrepaneurs put together a very simple model which illustrates this point quite nicely. The model starts with MRR ( Monthly Recurring Revenue ) at zero, and bookings from new customers at $10k in the first month, increasing by $2k every month after that. Blog Financial Benchmarks MRR negative churn negative churn rate net negative churn

Churn 40

Investing Sales and Marketing dollars in retention vs acquisition – How much?

OPEXEngine

The Fundamental Value of the SaaS Model is that Customer Retention is Cheaper than Customer Acquisition. It totally depends on the business model and size of the product contract. Benchmarking Best Practices Blog Lauren Kelley on SaaS

OPEXEngine SaaS Conversations Recap

OPEXEngine

KPIs to drive alignment between R&D spend and corporate business goals. . Lauren and Rob shared a range of benchmarks that executive management should consider to accurately assess R&D ROI and resource allocations. . R&D Spend as a % of Revenue Benchmarks.

State of the Cloud 2022: The Centaur Report With Bessemer Venture Partners (Pod 593 + Video)

SaaStr

To illustrate the turbulence, consider the following metrics: The BVP NASDAQ Emerging Cloud Index (the public benchmark of software performance) has contracted by more than 40%. Historically, cloud businesses were all about growth, but now the focus is on profitability and efficiency. .

Cloud 212

SaaS Finance MeetUP – Scaling Finance

OPEXEngine

It is an exclusive meeting limited to Finance executives benchmarking with us and governed by Chatham House Rules. The SaaS Finance MeetUPs help provide context for our benchmarking community to the OPEXEngine benchmarks and content that we develop.

SaaS Operating Plans, What Changed?

OPEXEngine

Comparing current benchmarks to pre-COVID-19 benchmarks. The results are in and we’ve published the latest benchmarks incorporating 2020 actuals in our platform. SaaS Revenue Growth Benchmarks Didn’t Change A Lot, Except for Zoom and Early Stage Companies.

JFrog IPO: Lessons For Entrepreneurs

SaaStr

However, since the adoption was so strong from users, the founders quickly realized that there was a big-time business opportunity with JFrog. There was also a highly efficient inbound sales model. That’s the benchmark we are looking for.”.

How Customer Loyalty Can Drive B2B SaaS Business Growth

Totango

Customer loyalty is a key to repeat business and referral generation for any business model. For B2B SaaS companies, customer loyalty drives subscription renewals and brand advocacy, making it a critical component of a profitable business model.

B2B 93

From the Desk of Totango: How to Scale Customer Success For Growth With Totango and Zoom

SaaStr

In the report, they pursue the latest customer success trends and predictions, including significant challenges, top goals, team organization, key benchmarks, compensation and various technologies. . Customer success is one of the most powerful growth levers a business possesses.

How to Fight Excessive Customer Churn: 4 Winning Strategies

Totango

Knowing how to fight customer churn is critical for keeping SaaS business models sustainable. The more customers you lose to churn, the more you have to invest in new customer acquisition to maintain your revenue, and the harder it becomes to grow your business.

Churn 84

MRR Growth Rate vs. Net MRR Growth Rate

Baremetrics

MRR as a SaaS metric is pretty straightforward , but there are some nuances that you'll want to take into consideration depending on your business model. As a business metric tool, Baremetrics provides insight into your monthly recurring revenue and other significant trends.

Usefulness of SaaS Metrics Lies in Context, Not Isolation

OPEXEngine

Janz, whose company invests in SaaS startups, doesn’t speculate on an optimal CAC to LTV ratio; that will differ based on each company’s business model. But he does suggest a reasonable benchmark of 4x.