SaaStr

SEPTEMBER 3, 2023

Recurring software revenue is now recognized as a great way to generate tons of cash for investors,” says Gerety. Do public markets understand recurring revenue and SaaS models?” Fast forward, and Box is over $1B in revenue. They’re at $700M in revenue and growing 50%. By freezing headcount for a year.

Sales Hiring 239

Sales Hiring Headcount Finance Technical Review 239

Tom Tunguz

JULY 21, 2022

Management teams expect to reduce operating expense by 20% predominantly through headcount reductions or hiring freezes - everyone from sardine startups to public megalodons. Software automates manual work, provides leverage, and the total cost is often less than a headcount. Software does more with less.

Sales Hiring 141

Sales Hiring Headcount Software Finance 141

SaaStr

NOVEMBER 27, 2021

Because in a typical SaaS company, even if you are growing 100% a year — well 50% of your revenue is existing revenue. Often as much as 50% of that growth is upsell / additional seats / more revenue from your existing customer base. At $2m in ARR, budget $200k in headcount for the CSM positions + support.

Sales Hiring 246

Sales Hiring Customer Success Scale Customer Lifetime Value 246

SaaStr

DECEMBER 11, 2021

We’ve walked through why Second Order Revenue (i.e., the revenue ultimately generated or supported by Customer Success) is the key to growing a SaaS business. We’ve talked about how all the Second Timers are hiring in customer success way early , ahead of sales, ahead of revenue. Yet still … people wait.

Sales Hiring 276

Sales Hiring Customer Success Headcount Churn 276

Intercom, Inc.

AUGUST 23, 2022

With increasing business costs and reduced headcount, companies are feeling the squeeze as they also grapple with rising consumer expectations. While a 1% increase in acquisition might boost your bottom line by about 3% , a 1% decrease in churn can boost it by 7% ! It’s more significant than you might think….

Customer Support 211

Customer Support Retention Headcount Customer Lifetime Value 211

Intercom, Inc.

NOVEMBER 14, 2018

If you’re forecasting short on your global revenue target, do you know how you’ll make up the difference? Average revenue per account (also referred to as Average Transaction Size (ATS) or Average Sales Price (ASP)). New logo revenue. Churn dollars. Gross customer churn. Net expansion revenue.

Sales Hiring 188

Sales Hiring Metrics Revenue Sales 188

SaaStr

NOVEMBER 27, 2021

Because in a typical SaaS company, even if you are growing 100% a year — well 50% of your revenue is existing revenue. Often as much as 50% of that growth is upsell / additional seats / more revenue from your existing customer base. At $2m in ARR, budget $200k in headcount for the CSM positions + support.

Sales Hiring 209

Sales Hiring Customer Success Scale Customer Lifetime Value 209

SaaStr

JANUARY 12, 2024

Now, in 2024, we’re in the age of efficiencies, and we’re rethinking whether we should put more people on it or tolerate more churn and issues because we want to be cash flow positive. Eventually, you can build a model to show you can create sustainable value in a company that’s not just based on a revenue multiple.

Sales Hiring 255

Sales Hiring Customer Success Scale AI 255

ChurnZero

JUNE 9, 2023

Good sales teams typically get the budget, headcount and tools they desire because the function is tied to revenue. As a result, CS teams often have to work harder to make the case for headcount, technology and even product requests on behalf of customers. How can CS leaders address this challenge?

Finance 98

Finance Metrics Customer Success Headcount 98

Tom Tunguz

JUNE 18, 2019

The template is broken into six sections: People, Bookings & Revenue, Cash, Sales, Marketing, Customer Success. This section covers employee satisfaction, headcount, and recruiting metrics. Bookings and Revenue illuminates the company’s performance in closing new business (bookings) and recurring revenue.

Metrics 209

Metrics Sales Recruiting Startup SaaS 209

ChurnZero

NOVEMBER 11, 2022

1: Customer Success teams are driving revenue and earning more influence. to the chief revenue officer—all indicating that Customer Success teams are revenue drivers. In companies with $500M or more in revenue, one-third (30.3%) of CS leaders have a place in the C-suite. The top metrics in CS are all revenue metrics.

Leadership 98

Leadership Trends Customer Success Investment 98

Chart Mogul

JULY 15, 2021

High growth companies like Airtable, Figma, Notion, or Github all have revenue as a top of mind business milestone. In fact, out of a sample of 40 growth stage companies, 50% said revenue growth was their #1 north star metric, according to research led by Lenny Rachitsky for Future.

Underperforming Technical Team 52

Underperforming Technical Team Revenue Scale Communication 52

Chart Mogul

JULY 15, 2021

High growth companies like Airtable, Figma, Notion, or Github all have revenue as a top of mind business milestone. In fact, out of a sample of 40 growth stage companies, 50% said revenue growth was their #1 north star metric, according to research led by Lenny Rachitsky for Future.

Underperforming Technical Team 52

Underperforming Technical Team Revenue Scale Communication 52

The Angel VC

MARCH 23, 2016

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.

SaaS Payments 217

SaaS Payments Headcount SaaS Payment Methods 217

SaaSX

FEBRUARY 5, 2020

Here’s a super basic overview of the key P&L areas we typically use: Revenue Cost of Goods Sold (COGS) Sales & Marketing Expenses (S&M) Research & Development Expenses (R&D) General & Administrative Expenses (G&A). This INCLUDES headcount-related expenses. Not Utilizing a Proper SaaS Chart of Accounts.

Finance 118

Finance Sales Hiring Headcount Scale 118

SaaStr

JUNE 13, 2020

And they have five times the headcount and have raised $25 million. But a few things to think about vis-a-vis competition in SaaS, once you are post-Initial Traction (say $1m-$2m in ARR or so): Second Order Revenue (Upgrades, Word-of-Mouth, Champion Change) Will Continue to Come In and Work, No Matter How Tough the Competition Is.

Sales Hiring 294

Sales Hiring Scale Headcount SaaS 294

SaaStr

OCTOBER 17, 2023

If you’ve raised venture capital, you know net revenue retention is important. Headcount maybe goes from 2 or 4 to 10. They’re fully saturated unless customers churn. This is generally where churn starts to pick up because competitors are selling against you. When one person churns, it counts for more.

Scale 161

Scale Sales Hiring Customer Success Scaling 161

Intercom, Inc.

AUGUST 16, 2022

Support teams are facing a critical juncture: business costs and customer expectations continue to grow while resources like headcount and budget are decreasing. Plus, 65% of the average company’s revenue comes from existing customers – so it pays off in the long run to keep them happy.

Headcount 118

Headcount Scale Sales Hiring Customer Lifetime Value 118

ChurnZero

JULY 14, 2021

It is the amount of revenue your business will make from a customer over their average lifetime as a customer. To calculate customer lifetime value, you need to know your average revenue per unit/user, your gross margin, and your average customer lifetime length. How Do You Calculate Customer Lifetime Value?

Customer Lifetime Value 98

Customer Lifetime Value Scale Headcount Churn 98

SaaStr

OCTOBER 18, 2019

Recurring revenue certainly has pros and cons. 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. How many reps.

Sales Hiring 186

Sales Hiring Scale Headcount Revenue 186

SaaStr

MARCH 7, 2023

Many of them said headcount management and spend were common levers they pulled, given the immediate and significant impact they have on spend. Companies are giving price breaks this year to reduce churn and increase retention, with the caveat that it might go up next year. What are companies doing today to scale efficiently?

Outsourcing Services 161

Outsourcing Services Scaling Venture Capital Forecasting 161

OPEXEngine

DECEMBER 13, 2022

Most SaaS executives can relate to a friendly debate they’ve had at a board or leadership team meeting about what percentage of revenue should come from “upsells” to existing customers or what is “healthy churn.” Companies with an equivalent commercial operation- sales headcount, marketing spend, and customer acquisition cost (CAC).

Benchmarks 52

Benchmarks Scale Headcount Software Review 52

Totango

JULY 5, 2022

As a customer success leader, it’s important to ensure resources are focused on delivering value and creating exceptional customer experiences, while also keenly identifying any potential opportunities for revenue and expansion. So, how do you do this? Signs to look for when learning how to identify at-risk customers include: .

Customer Success 98

Customer Success Scale Headcount Churn 98

ChurnZero

MAY 17, 2022

’s premier technology companies and an employer of choice, growing revenue over 100% annually for the last three years. The company plans on doubling its headcount in 2022. About ChurnZero ChurnZero is a real-time Customer Success platform that helps subscription businesses fight customer churn.

Marketplace as a Service 98

Marketplace as a Service Technical Review Headcount Software Review 98

Chart Mogul

AUGUST 15, 2019

Revenue-based financing is quickly becoming a popular way for startups to raise funds without sacrificing equity. You may have heard of Revenue-based financing (RBF), venture debt or hybrid structures blending a revenue or profit share concept with an equity ownership stake. A high-level look at Revenue-based financing (RBF).

Finance 85

Finance Payments Revenue Payment Solutions 85

The Angel VC

JUNE 25, 2015

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. click for a larger version).

Sales Hiring 185

Sales Hiring Sales Recruiting Scale Headcount 185

Intercom, Inc.

DECEMBER 8, 2020

It can also guide your hiring process if increasing headcount is required to guarantee 24/7 coverage for customers. Your CSAT score will impact sales and revenue, so a decline in this score should be considered a priority and quickly remedied. Customer satisfaction. Tickets by hour. Choosing the metrics that matter.

Customer Support 211

Customer Support Metrics Technical Review Scale 211

Sixteen Ventures

APRIL 26, 2023

NRR Defined Net Revenue Retention – NRR – is the percentage of revenue retained from existing customers in a defined time period, including Expansion, Contraction, and Churn. The “North Star” is falling! Time to panic? Unless you understand what’s really going on.

Headcount 43

Headcount Churn Retention Metrics 43

Kellblog

NOVEMBER 23, 2022

Churn ARR is the sum of ARR lost due to shrinking customers (aka, downsell) and lost customers. Ending ARR is starting ARR + new ARR – churn ARR. It’s + churn ARR if you assign a negative sign to churn, which I usually do.) YoY growth in churn ARR. Churn rate (ATR-based) = churn ARR/available-to-renew ARR.

Technical Review 116

Technical Review Software Review Forecasting Churn 116

OPEXEngine

NOVEMBER 23, 2020

Here’s a super basic overview of the key P&L areas we typically use: Revenue. 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). Cost of Goods Sold (COGS).

Finance 52

Finance Sales Hiring Headcount Scale 52

Baremetrics

NOVEMBER 1, 2021

Initially, we’ll be bringing your Baremetrics data into your Flightpath account so you can forecast new revenue by new customers, expansion, contraction, and churn. Flightpath allows you to forecast your revenues, expenses and bank balance, giving you better visibility into your company’s future.

Finance 96

Finance Outsourced Development Sales Hiring Forecasting 96

The Angel VC

NOVEMBER 23, 2016

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. You can easily adjust this to a different growth path by changing row 22 accordingly.

Sales Hiring 141

Sales Hiring Point of Sale SaaS Headcount 141

Tom Tunguz

MAY 14, 2014

Yesterday, I spoke on a panel at the Gainsight Pulse conference with Aaron Ross, the author of Predictable Revenue , Jason Lemkin of Storm Ventures who authors SaaStr , and Brian Stafford, a customer success expert from McKinsey.

Customer Success 100

Customer Success Startup Headcount Compensation 100

Intercom, Inc.

JULY 26, 2022

Loyal, engaged customers are the lifeblood of your company’s success, providing a steady and reliable revenue stream as well as positive word of mouth for your brand. Use automation to make your headcount count for more. Businesses can’t afford to reduce the quality of their customer experience – or customers will churn.

Payment Methods 118

Payment Methods Payment Solutions Payments Payment Services 118

Chart Mogul

AUGUST 15, 2019

Revenue-based financing is quickly becoming a popular way for startups to raise funds without sacrificing equity. You may have heard of Revenue-based financing (RBF), venture debt or hybrid structures blending a revenue or profit share concept with an equity ownership stake. A high-level look at Revenue-based financing (RBF).

Finance 52

Finance Payments Revenue Payment Solutions 52

ChurnZero

JANUARY 25, 2024

As companies find more ways to support their customers and build recurring revenue, “traditional” CS skillsets are no longer enough. Skillset 1: Sales acumen In 2024, driving revenue is a primary responsibility of CS. As the awareness of CS’s impact grows, so does its ownership of revenue.

Customer Success 52

Customer Success Sales Recruiting Sales Hiring Scale 52

Point Nine Land

NOVEMBER 11, 2022

Maybe you’ll achieve your revenue objectives, but your burn will be higher than planned. Perhaps customer growth will exceed expectations, but you’ll have a larger percentage of less happy customers, so you’ll have more churn down the road. The chance that you’ll hit all of your targets is tiny.

Sales Hiring 59

Sales Hiring Headcount Startup Churn 59