Clouded Judgement

APRIL 11, 2024

Q4 earnings season for cloud businesses is now behind us. We then dipped below the trendline as we hit the period of “cloud optimizations,” and things have started to rebound. As a public company with significant scale, it’s hard to grow quickly if you have to rely solely on new customers for that growth.

Cloud 177

Cloud Software Azure AWS 177

Clouded Judgement

MARCH 22, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. For SaaS businesses that target smaller SMB customer segments, gross retention is typically in the mid to low 80’s with net expansion in the ~105% range. Subscribe now Share Clouded Judgement Leave a comment

AI 183

AI Revenue Cloud Technical Advisors 183

SaaStr

MARCH 10, 2024

The New Normal: 700 Employees at $200,000,000 in ARR Many SaaS and Cloud leaders are already there — especially the highest performers, from Cloudflare to Canva to ServiceNow. Even SMB leaders like Monday are there. In fact, almost every SaaS leader at scale is hitting $300,000 in Revenue Per Employee at the pre-IPO phase.

SMB 252

SMB Cloud Startup Scaling 252

SaaStr

FEBRUARY 1, 2022

And that challenge some of your assumptions on how to scale. This is trending to 50/50 now that Asana has crossed $400m in ARR, but still a reminder a self-serve motion combined with sales jumping on the bigger deals can scale very, very far. Toast’s SMB NRR is 114% today — but it took 4 full years just to get to 100%.

Scale 352

Scale SMB SaaS Scaling 352

SaaStr

SEPTEMBER 16, 2022

Zoom’s SMB base has flattened after exploding like nothing we’ve ever seen before. From HubSpot to Snowflake to Asana to Monday to Gitlab to Cloudflare, the best in SaaS and Cloud aren’t just growing faster than ever. They are often accelerating at scale. I mean, just look at the list above. Multiples are down.

SMB 349

SMB SaaS Cloud Scaling 349

Clouded Judgement

DECEMBER 21, 2023

Q3 earnings season for cloud businesses is now behind us. Commentary from the cloud providers seems to be that the major macro headwinds around optimizations and new deal scrutiny have started to abate. For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 177

Cloud Software Benchmarks Retention 177

SaaStr

NOVEMBER 6, 2023

If you’re selling software to SMB merchants and outside of tech like Shopify and Toast and Monday , things are pretty, pretty good, if in some ways still harder than before. If you’re selling cloud infrastructure, for the most part, growth may be down a smidge but is still strong, e.g., MongoDB.

Merchant Services 275

Merchant Services Azure Software AWS 275

SaaStr

APRIL 13, 2022

For 2 days, more than 50+ sessions and 75 expert speakers will be sharing their best practices in Barcelona on scaling, revenue, recruiting, expansion and so much more. From Asana to Zoominfo: this year’s Europa lineup is bringing the best Cloud speakers from around the globe together for two days of incredible learning and insights.

Sales Recruiting 221

Sales Recruiting Cloud Sales Hiring Scale 221

SaaStr

MAY 5, 2022

Podium sales leaders, EVP of Sales Than Hancock, and Regional Sales Manager Carlie Adams recently led a session on how they’ve grown the team at the cloud-based software company. With scale, though, these priorities can change. Principle #4: At Scale, Focus is Critical. Scaling a sales team takes extreme discipline and focus.

Scale 226

Scale Sales Hiring Scaling Sales 226

SaaStr

FEBRUARY 13, 2021

Its definitely at least a Cloud infrastructure and applications company for SMBs: And its also a great case study of learning how to sell and market to SMBs at scale. At $4B of revenue of scale. SaaS is profitable at scale. SMB growth in Cloud and SaaS is still going strong! Freemium is back!

SMB 302

SMB Cloud Scaling Investment 302

SaaStr

AUGUST 27, 2022

Salesforce: “We’re finally seeing slowdown now in our commerce, media, telecom, and SMB segments”. hitting almost $31 Billion in ARR and growing a still stunning 22% at this scale. Salesforce saw demand from SMBs slow, and demandslow in retail, consumer and communications / media. Workday: “There’s no slowdown at all”.

SMB 246

SMB Scale Cloud Trends 246

SaaStr

JANUARY 23, 2021

Cloudflare is one of those iconic Cloud companies most of us use, and know about as a product and vendor … but perhaps we don’t think as much about as a public company. What can founders learn from them as a public SaaS / Cloud company? We’ve seen this metric vary wildly at public SaaS and Cloud companies.

Scale 289

Scale SMB Cloud Enterprise 289

Tom Tunguz

AUGUST 2, 2016

Channel distribution represents one of the biggest and most important changes in customers acquisition for SMB SaaS startups in quite a while. One of the most interesting examples is Microsoft’s Office 365 SMB business. It’s the most successful SMB SaaS acquisition channel ever built. by Thomas Hansen.

Outsourcing Services 107

Outsourcing Services SMB Acquisition Scale 107

Clouded Judgement

SEPTEMBER 12, 2023

Q2 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q2 Source: company filings and Pitchbook consensus estimates Historically, the median beat of consensus estimates is closer to ~4%.

Cloud 169

Cloud Software Benchmarks Retention 169

SaaStr

NOVEMBER 16, 2022

So we’ve taken a look at Monday several times in this series , but with so much change in the world of SaaS and Cloud the past few months, it seemed like a great one to dig in on. It still has very strong NRR for a still muchly SMB and mid-market product at 135%, with no decline since the same 135% at $400m in ARR. #2.

Headcount 296

Headcount SMB Engineering Scaling 296

Clouded Judgement

APRIL 12, 2023

Q4 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q4. This quarter more than half of cloud software businesses missed next quarters consensus. I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 161

Cloud Software Benchmarks Retention 161

SaaStr

JANUARY 3, 2024

Shrav added that if you want to close bigger deals, not just Enterprise, but mid-market and SMB as well, that the moment you’re ready to Go-To-Market, you need to become compliant. However, Shrav explained when that automation won’t necessarily scale anymore. We usually see this happen around 50 to 100 employees.

AI 148

AI SMB Sales Hiring compliance 148

SaaStr

NOVEMBER 2, 2022

While the average Cloud stock has fallen almost 50% in 2022, Duolingo’s has stayed up, and is down just 10% in the past 6 months. The core product is very B2C, but the upgrade to paid has very SMB B2B metrics, and 80% of the revenue is subscription based. They have almost 40 million free users to get to their scale. #2.

Scale 302

Scale B2C SMB B2B 302

SaaStr

MARCH 9, 2022

So DigitalOcean is the quiet Cloud platform that keeps on growing. Focusing on smaller developers, in some ways it’s been a bit overshadowed by AWS, Azure, and Google Cloud. DigitalOcean is growing an impressive 37% at $500,000,000 in ARR, and staying very SMB with 600,000+ customers, but still driving deal sizes up a bit.

Azure 222

Azure AWS SMB Cloud 222

SaaStr

SEPTEMBER 29, 2022

Almost everything is going well in SaaS and Cloud these days — except multiples. But it’s not enough to hit the scale and growth rate they’ve achieved. Channel model and organic approach to SMB and mid-market yields a fairly efficient Sales & Marketing motion. Billion as I type this. Multiples are brutal.

Scale 242

Scale SMB Software Development Cloud 242

Clouded Judgement

DECEMBER 20, 2022

Q3 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q3. This quarter more than half of cloud software businesses missed next quarters consensus. I consider >120% best in class for companies selling to SMBs (like Bill.com).

Cloud 130

Cloud Software Review Software Benchmarks 130

SaaStr

JANUARY 2, 2021

We can see that NRR for tiny customers is probably about 100%, as it is for other SMB leaders. Again, the latest crop of Cloud IPOs shows SMBs seem to have no limit in terms of TAM, with SMB growth at Shopify and Zendesk keeping up with enterprise, and even at Asana, SMB growth is still impressive at $250m ARR.

SMB 349

SMB Enterprise Cloud Churn 349

Clouded Judgement

JUNE 20, 2023

Q1 earnings season for cloud businesses is now behind us. As you can see from the data below most cloud businesses beat the consensus estimates for Q1. As a public company with significant scale, it’s hard to grow quickly if you have to rely solely on new customers for that growth.

Cloud 161

Cloud Software Benchmarks Scale 161

SaaStr

JUNE 27, 2019

Erica has led New Relic through massive growth, scaling the company’s enterprise business 10x since she joined the business pre-IPO. Erica will share the five critical steps (and some lessons learned along the way) for scaling in the enterprise. The first is a migration to the cloud. We operate at great scale.

Scale 180

Scale Enterprise Scaling Sales Hiring 180

SaaStr

OCTOBER 19, 2022

That’s a very impressive revenue multiple in today’s world … for a SaaS company that has the trifecta of growth, profitability, and scale. In fact, it hasn’t really seen the big impact from the Crash of ’22 that so many other Cloud leaders have: Who's completely shrugging off any so-called "downturn"?

Scale 274

Scale SMB Engineering Cloud 274

SaaStr

SEPTEMBER 26, 2019

What we learned from ’08-’09 in SaaS: First, SMB churn went through the roof — as SMBs went under much more quickly and often. As soon as the economy went south, SMBs started to simply go bankrupt and/or shut down. Anyone processing a lot of SMB and credit-card deals saw churn probably double.

SaaS Payments 278

SaaS Payments Sales Hiring Scale SMB 278

SaaStr

JANUARY 23, 2021

Cloudflare is one of those iconic Cloud companies most of us use, and know about as a product and vendor … but perhaps we don’t think as much about as a public company. What can founders learn from them as a public SaaS / Cloud company? We’ve seen this metric vary wildly at public SaaS and Cloud companies.

SMB 263

SMB Cloud Enterprise Scale 263

SaaStr

DECEMBER 9, 2022

So look, very few, if any, SaaS or Cloud companies are out there saying times are easier now than 12 months ago. But the thing is, the underlying trends that power SaaS and Cloud are still here and as strong as ever. And there are still many categories of software and businesses just beginning to move to SaaS and Cloud.

Cybersecurity 280

Cybersecurity SaaS Cloud SMB 280

SaaStr

OCTOBER 25, 2023

Leveling Up PLG to Accelerate SMB Customers, Including More Attention to Onboarding I love seeing this, it can seem hard to invest heavily in small customers, but if you don’t especially invest in onboarding, that’s a big shame. . #7. Like Almost Every Other SaaS Leader, Freshworks Has Gotten Much, Much More Efficient.

SMB 258

SMB AI Onboarding Cloud 258

SaaStr

MAY 10, 2021

Fast forward to today, and we can add an important nuance to that: a second core product not only helps you grow faster at scale (a bigger TAM), but it drives up NRR and more revenue from your existing customers. Pretty good for SMB SaaS. Box at $800m ARR is about 30% SMB / 70% enterprise, the inverse of Shopify.

Merchant Services 181

Merchant Services SaaS Payments SMB Payment Solutions 181

SaaStr

FEBRUARY 24, 2021

Upwork is one of those products and marketplaces many of us use all the time — including Team SaaStr — but we don’t often see discussing that much as a public SaaS / Cloud company. Net net, even from SMBs, Upwork manages 100% NRR, just as Shopify and Hubspot do from SMBs. 80% SMB, 20% Enterprise.

Marketplace as a Service 270

Marketplace as a Service SMB Cloud Enterprise 270

SaaStr

JULY 8, 2022

A recent session from SaaStr Scale. #3. Half of Gorgias’ almost 10,000 SMB customers come from partners. Top 5 Ways to Scale a Sales Team with Zoom CRO Ryan Azus and SaaStr VP of Sales Bryan Elsesser. Another recent session that 32,000 of you watched on how Zoom has gone upmarket and evolved its sales strategy at scale. #7.

VP of Engineering 245

VP of Engineering Scale Outbound Sales Team SMB 245

SaaStr

FEBRUARY 13, 2022

The Argument High Cloud Multiples Are Behind Us. SaaStr 525: Marketing Hyper-Growth at Scale with Klaviyo Head of Marketing Kady Srinivasan. SaaStr 527: Acquiring SMB 10,000 Customers Solely from Data with Gorgias CEO Romain Lapeyre. Even if Epic Growth is Still To Come. Top Podcasts This Week: 1. Top Videos This Week: 1.

Scale 202

Scale SMB Sales Cloud 202

SaaStr

AUGUST 17, 2021

Cloud is huge. Coupa isn’t as much a fintech as SMB players like Bill.com, but it’s getting there with Coupa Pay. This is a bigger task than SMB, but a huge market. It’s interesting to see Coupa present its TAM this way in terms of both customer count and market size. And ARR per deal has gone up every quarter.

Payments 305

Payments SaaS Payments SMB Payment Solutions 305

SaaStr

DECEMBER 27, 2020

New Relic is one of my favorite Cloud stories. Times have changed, the Cloud has gotten a lot bigger, and there are many more vendors, including the red-hot DataDog, to grab mindshare. But New Relic has continued to scale, crossing $650,000,000 in ARR (or so) and a $4B market cap. It’s the secret to scaling effectively.

Scale 310

Scale Outsourced Development SMB Cloud 310

SaaStr

OCTOBER 20, 2022

One thing that is clear is that public SaaS and Cloud stock prices are way down. Note this doesn’t include SMB spend, it’s enterprise focused): In a slightly more dated survey, Gartner found in July 69% of CFOs plan to increase their digital spending in 2023. So are we in some sort of downturn — or aren’t we?

Forecasting 252

Forecasting Artificial Intelligence Software Business 252

Intercom, Inc.

DECEMBER 5, 2019

On this week’s episode of Scale, Matt Rogers, Head of SaaS Initiative at Google, is here to enlighten us. Over the course of his conversation with Amanda Connolly, Matt covers the challenges faced by SaaS companies both starting out and scaling in today’s swiftly evolving market. Big enterprises are super demanding.

Scale 118

Scale Scaling Artificial Intelligence Business 118