Clouded Judgement

DECEMBER 21, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 177

Cloud Software Benchmarks Retention 177

Sales Hacker

DECEMBER 20, 2021

As a result, much of the evaluation, investment, and rollout of virtual training technology in 2020 was rushed, limited in scope, and poorly planned. Businesses must take a step back, evaluate their software investments, and rework their implementations. How to maximize customer training investment. Today, not much has changed.

Investment 94

Investment Technical Review Underperforming Technical Team Scale 94

Tom Tunguz

FEBRUARY 24, 2016

In particular, I benchmarked the revenue, growth rates and round size characteristics of these businesses at their Series A. Benchmarking Exceptional Series A SaaS Companies from Tomasz Tunguz. That figure has grown each year by 80%, and for the investments that closed in early 2016, that figure reached $163k.

Benchmarks 100

Benchmarks SaaS Pricing Investment 100

Tom Tunguz

AUGUST 26, 2019

Here’s why: For every dollar of sales and marketing investment, DataDog generates $1.68 DataDog is playing across price points. One last chart: revenue dollars at IPO per venture dollar invested. This is a measure of turning investment dollars into revenue, a sort of return on equity metric.

Metrics 189

Metrics Benchmarks Scale User Experience 189

ChurnZero

JUNE 2, 2021

SaaS Capital joined us for a webinar to share the results from their 10th annual B2B SaaS benchmarking survey. Now we’re seeing numerous companies price 8 to 12, so it’s definitely jumped up a little bit. A [Rob]: That’s more of a question for the earlier stage investing in the public market. Growth is king.

Benchmarks 98

Benchmarks B2B SMB SaaS 98

OpenView Labs

NOVEMBER 18, 2021

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. But growing fast is easier said than done, especially in the current hiring market.

VP of Engineering 64

VP of Engineering Benchmarks Sales Hiring B2B 64

Tom Tunguz

MARCH 18, 2019

Sales efficiency is a measure of the marginal gross profit generated by a dollar invested in sales and marketing. In terms of price point, PagerDuty is right around the $10,000 revenue per customer per year. According to the recent Redpoint free trial survey, the 140% net retention puts the business in the top decile of businesses.

Metrics 192

Metrics Benchmarks Software Review Engineering 192

Clouded Judgement

SEPTEMBER 12, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 169

Cloud Software Benchmarks Retention 169

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?” It now matches sales and marketing spend at the average SaaS company as folks continued to put significant investments into R&D during the pandemic.

Benchmarks 52

Benchmarks Scale Technical Review SaaS 52

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. So they came up with a North Star benchmark, used it as a hurdle rate by channel, and any channels that hit that benchmark would justify a continued investment.

Cloud 223

Cloud Payments Software Review Payment Solutions 223

Unbounce

JUNE 23, 2020

The problem is the software that makes them possible is usually priced for huge companies with deep pockets. And so you hope that companies price their software in a way that both makes it accessible and reflects the actual value you’re getting back. Or, in shorter terms, giving you what you pay for. We’ve done this, too.).

Pricing 120

Pricing Scale Artificial Intelligence Machine Learning 120

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.

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. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 161

Cloud Software Benchmarks Retention 161

ProfitWell

JANUARY 13, 2020

There’s a question that every startup founder, subscription service provider, and ecommerce store owner, needs to ask themselves on a regular basis: Is this the most effective price for my product or service? Finding an effective price helps you solidify your position, build trust with your customers, and achieve your business goals.

Pricing 52

Pricing Subscription Payment Features Strategy 52

Clouded Judgement

JUNE 20, 2023

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. The market is clearly pricing in lower rates + reacceleration of growth. Not surprisingly, these benchmarks match up relatively well with the numbers public companies reported. net retention and CAC payback).

Cloud 161

Cloud Software Benchmarks Scale 161

OpenView Labs

FEBRUARY 4, 2020

Segment CEO and Co-founder Peter Reinhardt was recently reflecting on what were his top lessons learned from changing packages and pricing. While Segment may be an extreme case, the business is far from unique in learning that it was leaving money on the table due to its pricing. Pricing Is Your Best Shot at Growing 25% Faster.

Pricing 60

Pricing Scale Technical Review Software Review 60

Tom Tunguz

SEPTEMBER 29, 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. Compared to the benchmark set, MobileIron has historically burned more cash and operated at greater negative income than the median.

Benchmarks 100

Benchmarks Metrics SaaS Scale 100

OpenView Labs

SEPTEMBER 8, 2021

2021 has proven to be the year of usage-based pricing. . 45% of expansion stage SaaS companies now say they have a usage-based or consumption-based pricing model, according to data from OpenView’s forthcoming 2021 Finance and Operations benchmarks report. . Product: Treat product investments as a revenue-generating expense.

Pricing 64

Pricing Customer Success Scale Compensation 64

SaaStr

FEBRUARY 9, 2022

And when employees, press, later stage investors, and more are deciding which startup to join, to cover, and to invest in … having a strong brand on the cap table does help. It used to be top funds only invested in the seed and A stage. After all, all money is green, and so many VCs really add no value in the end. Just do it.

Branding 205

Branding Benchmarks Cloud Investment 205

User Pilot

OCTOBER 15, 2023

Use benchmarks to monitor your performance to see how well each stage converts. The PQL to paying user conversion rate represents the strategies’ effectiveness in showcasing value and persuading users of its worthiness for their investment. The industry benchmark for this metric sits at 8.5%. Imagesource: Firstpagesage.

SaaS Payments 105

SaaS Payments Payment Methods Payment Solutions Payments 105

Clouded Judgement

DECEMBER 20, 2022

Through these interactions, I’ve built up mental benchmarks for metrics on which I place extra emphasis. I’ve looked at thousands of private companies, and over time have come up with benchmarks for best-in-class, good, and subpar net revenue retention. net retention and CAC payback).

Cloud 130

Cloud Software Review Software Benchmarks 130

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

OpenView Labs

SEPTEMBER 23, 2019

We’re living in a remarkable era for investing. Enduring business (think Cisco, GE, Walmart) must demonstrate the ability to repeatedly generate predictable earnings – turning the massive revenue scale they’ve achieved into shareholder returns (via share price expansion and dividends). How Do I Know What My Benchmarks Are?

Benchmarks 40

Benchmarks Data SaaS Scale 40

SaaStr

MARCH 27, 2023

Capchase’s dataset is comprised of roughly half bootstrapped companies and half VC-backed companies, so there will be some differences in benchmarking from what you see from the VC firms. They either raise prices or they don’t give discounts. They invest in the right tools, and in the right team, to understand the impact.

SaaS Payments 189

SaaS Payments Technical Review Software Review Venture Capital 189

Tom Tunguz

AUGUST 26, 2014

HubSpot’s target customer base are SMBs and with this price point, it’s possible to support a profitable inside sales model if the team is very efficient. To grow at that pace, HubSpot has been investing aggressively in sales and the company is widely respected for its content marketing prowess.

Benchmarks 108

Benchmarks SMB Metrics SaaS 108

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. The incredible consistency of the gross margin might indicate the company actually manages pricing to this metric.

Benchmarks 100

Benchmarks Underperforming Technical Team Metrics Sales Hiring 100

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

SaaStr

JULY 27, 2023

Investors currently struggle with price finding for these rounds. There’s no new normal or price set yet, and that uncertainty creates a little bit of fear among investors to overpay. “Am And finding that right clearing price is still a work in progress. Now, it’s closer to $2M, with many good funds investing between $2.5M

AI 171

AI Trends Banking Pricing 171

Tom Tunguz

OCTOBER 28, 2017

Normally, accounting changes are not that interesting, but ASC 606 will change several of the key attributes and benchmarks SaaS startups use. Management teams then face a question: continue to operate at higher profitability, or invest even more in sales, and remain at -10% net income margin? I am not an accountant.

Revenue 206

Revenue Benchmarks SaaS Finance 206

Tom Tunguz

FEBRUARY 1, 2015

The SBC investment pattern varies substantially by company. Many factors skew the investments. I’ve plotted the growth in share price by round for nine public companies in this post. In some cases, share prices increased by more than 50x in just a few years.

Compensation 100

Compensation Benchmarks Startup SaaS 100

OpenView Labs

SEPTEMBER 17, 2019

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. Lack of segmentation leads to weak product-market fit.

Benchmarks 41

Benchmarks Underperforming Technical Team Scale SaaS 41

Clouded Judgement

AUGUST 25, 2023

The purpose of the detailed information is to help investors (both institutional and retail) make informed investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses.

Benchmarks 246

Benchmarks Artificial Intelligence Data Software Review 246

Clouded Judgement

APRIL 4, 2024

The purpose of the detailed information is to help investors (both institutional and retail) make informed investment decisions. There’s a lot of info to digest, so in the sections below I’ll try and pull out the relevant financial information and benchmark it against current cloud businesses.

Benchmarks 117

Benchmarks Data Cybersecurity Cloud 117

Stax

FEBRUARY 21, 2024

By analyzing the SaaS Magic Number, SaaS companies can determine how well their revenue-driving investments (in sales, marketing, and customer retention) are translating into actual revenue growth. Focus on lowering marketing costs and optimization before investing more. This is where the SaaS Magic Number becomes particularly handy.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

ChurnZero

JUNE 9, 2023

This will help the finance team relate proposed investments aimed at supporting renewal with business growth. A healthy benchmark is a 95% renewal rate in a given period. A healthy GRR industry benchmark is 80-85% while high-performing SaaS companies often reach 90%. A healthy benchmark is 100% NRR or greater.

Finance 98

Finance Metrics Customer Success Headcount 98

Tom Tunguz

FEBRUARY 20, 2017

Mulesoft prices is a function of the amount of computation power charged by customers and this doubling of average contract size suggests the sales team is able to convince customers to buy more of the software at the outset. First, the number of customers grew from 592 to 839 to 1071 over the last three years.

Metrics 100

Metrics Benchmarks Scale Finance 100

Tom Tunguz

JUNE 8, 2015

ServiceNow commands 30%+ annual price increases from its customers, an impressive figure. Impressively, the company is investing more and more into engineering - exceeding 20% of revenues last year - likely developing broader feature set to enable additional up and cross sells. ServiceNow has recorded a better than 1.0

Benchmarks 108

Benchmarks Metrics SaaS Investment 108