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Clouded Judgement 3.22.24 - ERR vs ARR and the Conundrum of AI Revenue Streams Today

Clouded Judgement

Every week I’ll provide updates on the latest trends in cloud software companies. In it's truest form, ARR is used by pure SaaS business models to describe the aggregate annual value of the entire customer set. Why do software companies get “credit” simply for revenue? Follow along to stay up to date!

AI 183
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Cohorts lead to Performance Benchmarks

OPEXEngine

This scenario, played out every day in boardrooms and Zoom® meetings, is well intended to help the “playbook” be data-driven – but the benchmarks used are often pulled out of a blog or anecdotally collected from colleagues at companies with different business models. That relevance requires an intentional comparison to peer companies.

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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. This is true even though selling software on a subscription basis has been around for well over 20 years. The Value of Benchmarking. As an example, let’s take gross margin.

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How To Structure Your Sales Organization For Maximum Efficiency

Sales Hacker

Traditional Sales Organizations – Growth of headcount in sales was structured around revenue per individual contributor (IC). The model used a waterfall-like model that ramps up over the course of a year, in which an individual contributor brings in $2M/IC per year. POD Modeling. This may take >24 months.

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Scaling Outside Silicon Valley: Going from $0 to $60M ARR in 4 Years | SaaStr Software Community (Video + Transcript)

SaaStr

Most businesses don’t have a great way to make it easy for customers to choose them. I just thought there should be a way to get their customers to review them on the sites that matter. And Dennis and I started the company because we saw a huge need for local businesses to get reviews online, and nobody was doing it.

Scale 111
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3 Unusual Drivers of Early-Stage Growth

OpenView Labs

The same was true when I ran the People function at a software development consultancy that doubled its headcount to ~100 while reducing attrition from 40% to 5% voluntary in 18 months. I’ll never forget the ERP provider who snickered as they installed their software. Simon Sinek.

Scale 84
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Mental Models to Help You Grow

Sales Enablement, SaaS and Growth

David Cancel of Drift often talks about letting your ideas “ cross-pollinate ” and mental models can be a catalyst for that. I leveraged many of the 52 mental models while working at various software as a service (SaaS) companies, but in truth, they can be applied anywhere, regardless of industry. Subscription business model.