Observations about Silicon Valley Two Weeks into Quarantine

Tom Tunguz

The rule says that all employees of affiliated companies must be considered headcount. Some are seeing significant churn. What’s going on in Startupland? Venture rounds are closing. We’ve seen seeds, As, Bs, and growth rounds in the past few weeks.

Redpoint SaaS Startup Key Metrics Template

Tom Tunguz

This section covers employee satisfaction, headcount, and recruiting metrics. Customer Success reviews the net dollar and logo retention, plus churns and expansions. Over the last decade or so, I’ve compiled a metrics sheet to summarise a SaaS business. While no living document like this is ever perfect, this is currently the best board-level summary of the overall health of a business I have found. I’m sharing it so that others may benefit and improve it.

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1 Key SaaS Sales Metric to Fine-Tune Sales Productivity

InsightSquared

At the highest level, SaaS companies look at sales expense, headcount, sales productivity and SaaS metrics like: The cost of new customer acquisition (CAC). Customer churn or retention rates. Sales is the Growth Engine. Sales is the engine driving SaaS company value.

If You Want to Hit The ’20 Plan … You Gotta Be Making the Hires Now

SaaStr

The real magic from a Wall Street perspective isn’t that Salesforce is “SaaS” and much of, say, Oracle still mostly isn’t … it’s that Salesforce’s revenue, with net negative churn, completely recurs every year. With precise headcount and budget needs.

8 Finance Mistakes Growing SaaS Businesses Make and How to Fix Them

SaaSX

This INCLUDES headcount-related expenses. If you are utilizing Gusto or a similar payroll tool, your headcount expenses are likely coming into your P&L as one (or maybe two) line item(s). Gross Revenue Churn: How much money was lost within a given period from clients leaving.

Rules to Run Your SaaS Business By

Sales Enablement, SaaS and Growth

The number of employees when things get particularly troublesome are three, 10, 30, 100, 300 and 1,000 - before company headcount hits these milestones you’ll need to rethink how you operate. Keep annual churn <7% In my mind, churn is the most important of all SaaS metrics.

We Haven’t Hit Peak SaaS

Hitenism

In 2014, Mixpanel’s Series B pitch deck spelled out the company’s expansion plans over the next two years: 3x sales headcount and rapidly race towards distribution. Double headcount every 6-9 months.

By the time you're at $2-3M in ARR, you need a VP of Sales who's done it before

The Angel VC

An exception are SaaS startups with a no/low-touch sales model and viral growth (see above) and potentially companies which have a massively negative net MRR churn rate and therefore don't have to acquire as many new customers. Input your monthly net MRR churn rate (i.e.

The 4 Challenges Facing Customer Success Teams in SaaS Startups

Tom Tunguz

In addition to mitigating churn, CS teams increase account revenue, which in many SaaS companies, can grow to be multiples of the first year’s customer value. Customer success teams must justify the investment of building a CS team, often at the expense of headcount in another team. Constrained by headcount budgets and burn requirements, startup leadership teams often must choose between hiring an additional sales person or investing in a customer success person, for example.

ChurnZero Named Customer Success Leader in G2 Winter 2020 Report

ChurnZero

The new Customer Success Software Momentum Grid from G2 showcases CS solutions with the highest growth trajectory on a product’s user satisfaction, online presence, and employee headcount growth over the last year. ChurnZero helps subscription businesses fight customer churn.

CS Platform Increases Team Efficiencies and Optimizes Trial-to-Paid User Conversions – A Success Story

ChurnZero

The team lacked a way to assign health scores or predict a customer’s likelihood to churn. Become More Proactive in Account Management – The implementation of real-time heath metrics has allowed the team to gauge a customer’s likelihood to churn or renew. . .

Top Customer Success Takeaways from Pulse Europe 2018

ChurnZero

How to Scale without Scaling Headcount. To ensure you success function scales without scaling your headcount, make sure everyone in the company is bought into the success mindset. Top 15 Takeaways from Pulse Europe 2018.

3 (free) tools to help SaaS founders with their 2017 planning

The Angel VC

Sales Team Hiring Plan This tool helps you find out how many sales people you need to hire in 2017 based on your growth targets and other import inputs such as your MRR churn rate, your sales team's quota, ramp-up times, etc.

How to Calculate Your Customer Renewal Rate

Totango

Customer expectations are higher than ever, and if you can’t deliver lifetime customer value, then a relationship you’ve worked hard to build may just end in churn. To account for that, you can insert potential and actual dollar values in place of the headcount: Customer Renewal Rate = Actual Renewal Value ÷ Potential Renewal Value X 100. An inverse reading of these renewal stats will give you a glimpse of your churn rate. Understanding Renewal and Churn.

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ChurnZero Leads G2’s Momentum Report for Customer Success Software

ChurnZero

The new Customer Success Software Momentum Grid from G2 showcases CS solutions with the highest growth trajectory on a product’s user satisfaction, online presence, and employee headcount growth over the last year. ChurnZero helps subscription businesses fight customer churn.

Your Product Sells Itself. Now Hire Sales.

OpenView Labs

Sales now accounts for about 7% of the company’s headcount–a similar share of their workforce as marketing or product management. Among the PLG businesses that have gone public since 2017, sales headcount grew by an average of 45% year-on-year compared to a 33% increase in non-sales headcount.

The Top 5 Product Usage Metrics for Customer Success Teams

Totango

If these metrics are negative, you are alerted to potential churn—in time to do something about it. Renewal and churn are not tied exclusively to anniversary dates. One sure-fire sign of a successful enterprise is an expanding headcount.

ChurnZero Leads Momentum Grid on G2 Crowd For Second Season

ChurnZero

The new Customer Success Software Momentum Grid from G2 showcases CS solutions with the highest growth trajectory on a product’s user satisfaction, online presence, and employee headcount growth over the last year. ChurnZero helps subscription businesses fight customer churn.

Insights from Typeform: Leveraging Customer Success to Scale Your Business

OpenView Labs

Over this time, our headcount has grown by over 10x, and our revenue has grown by over 60x. Through our churn survey we found that a lot of our churn isn’t actually due to customers being unhappy, but rather from people successfully completing a project and not knowing what to do next.

Understanding the Real Impact of Improving Customer Retention

ChurnZero

You should view this webinar on-demand to learn: How your company ranks in terms of net and gross churn compared to companies with similar ACV’s and ARR. How to measure the impact of churn on your company. Q: Can you go over how you calculate churn?

What's the ROI of your mom?

ProfitWell

He references Dan Steinman from Gainsight , who says, “the natural tendency for customers is towards churn.”. If we fail, our customers will churn. But we know customer success reduces churn and increases expansion revenue, so CSMs do have a very serious purpose in an organization. And in this article he explains why, and proposes a different approach to thinking about the optimal CSM headcount to help you build a more effective customer success organization.

Professional Services and Customer Success in SaaS Startups

OpenView Labs

This survey also indicates that Professional Services can lead to more enterprise deals and lower churn. Lower churn. Similar to the old adage, “The best defense is a strong offense,” the most effective churn prevention tactic is to set the customer up for success from the beginning.

Found in translation: How multilingual support helps you scale customer experiences

Inside Intercom

How do you ensure a great customer experience globally without adding a ton of headcount? Offering multilingual support doesn’t just drive CSAT scores, it can even impact churn. For online businesses, our customers can come from any part of the world and at any time.

After Selling For $580M, Here’s What I Learned About SaaS During My Time At Buildium

Outseta

This required no additional addressable market and also helped to drive down Buildium’s churn rate. By Geoff Roberts 20 min read. Last month I woke up to a Twitter update that Buildium , where I started my career, had been sold for $580M.

5 lessons learned starting a new team within our sales organization

Inside Intercom

” In our case, a resounding “yes” required seeing a positive impact on customer expansion and one big enough to justify the fully-loaded cost for the additional headcount.

Serious About Customer Success? Your CRM is Not Enough!

ChurnZero

In fact, they allow your team to manage more accounts without the need to increase headcount. . Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero. Serious About Customer Success?

Data-driven sales: 18 sales KPIs and metrics to grow your revenue faster

Inside Intercom

“The point of tracking sales KPIs is to drive action for our team, not just to display them on a sales dashboard” That’s why I spend much of my time examining underlying KPIs like lead flow, pipeline creation, churn, expansion and more. Churn dollars. Gross customer churn.

How Revenue-Based Financing Works and What RBF Providers Care About

Chart Mogul

MRR (scale and growth rates) Revenue quality: ARPU , LTV , Quick Ratio Cohort metrics : cohort sizes, cohort multiple — an indicator of growth Retention / churn metrics. Sales & Marketing spend: headcount and discretionary.

There’s more than one path to $100 million

The Angel VC

What makes things tricky is, first, the uncertainty of how your CACs will develop at increasing scale and of how your churn rate will develop over time. Like a large tanker at cruising speed that cannot quickly take a turn, a startup with a fast-growing headcount and a high burn rate loses some of its ability to quickly react to new information, new insights, or changes in the market. A couple of years ago I wrote a post titled “How fast is fast enough?”.

Expert Tips from Customer Success Leaders

ChurnZero

If a customer isn’t engaging in upselling, they are often heading towards churn. Often times , they are teetering on the edge of renewal or cancellation and may end up as a churn ed account. This week , we hosted a RYG Leadership Hour in Atlanta.

It’s a Rough Time to Be a Startup – Here’s What You Can Do About It

OpenView Labs

We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. In-product guides and email cadences are low cost ways of steering users towards activation without engineering work or new customer success headcount.

Financial planning for SaaS startups

The Angel VC

Therefore the key drivers of my imaginary startup are organic growth rate, marketing budget and customer acquisition costs, conversion rate, ARPU and churn rate. If you have a SaaS startup with a higher-touch sales model where revenue growth is largely driven by sales headcount, the plan needs to be modified accordingly. [Update 03/23/16: I've created an improved version of the template - check it out! ]

HubSpot’s Michael Redbord on staying in touch with your customers as you scale

Inside Intercom

So often, when we think about investing in a support team, sometimes the conversation becomes about getting the headcount higher, higher, higher. But where else can you be investing outside of headcount to maintain that customer centricity?

There’s more than one path to $100 million

Point Nine Land

What makes things tricky is, first, the uncertainty of how your CACs will develop at increasing scale and of how your churn rate will develop over time. A couple of years ago I wrote a post titled “How fast is fast enough?”.

It’s a Rough Time to Be a Startup – Here’s What You Can Do About It

OpenView Labs

We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. In-product guides and email cadences are low cost ways of steering users towards activation without engineering work or new customer success headcount.

Q&A: Why It’s Time to Build a CS Ops Role in Your Organization

ChurnZero

Q: If there is no headcount for a new CS ops person, what’s the best way to incorporate the function until you can get budget? Fighting Churn is a newsletter of inspiration, ideas and news on customer success, churn, renewal and other stuff and is curated by ChurnZero.

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

SaaStr

It was a huge growth year from a revenue perspective for us and a huge growth year from an employee headcount perspective. So they would talk about what they were doing and it was very obvious they were copying us and trying to copy somebody else, and their churn was through the roof.

Elad Gil on catapulting into hyper growth

Inside Intercom

As VP of Corporate Strategy at Twitter, Elad Gil was a key player as company headcount skyrocketed from 90 to 1,500 employees. This wasn’t Elad’s first experience with hyper growth – Google grew headcount 10x during his time as a product manager there – nor the last.

It’s a Rough Time to Be a Startup – Here’s What You Can Do About It

OpenView Labs

We’re seeing three drivers of lower lifetime value: feature commoditization, less pricing power (price wars), and worsening churn. In-product guides and email cadences are low cost ways of steering users towards activation without engineering work or new customer success headcount.

Sales Hacker’s Max Altschuler on selling more with less

Inside Intercom

You need to build an efficient sales team…you can’t just throw money or headcount at things. You need to maximize everything you possibly can to beat the competition because you can’t just throw money or headcount at things. Whether you’re at an early-stage startup that’s just made its first sales hires, or part of a fast-moving sales team in a large organization, the key to success often comes down to efficiency.

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