SaaStr

JULY 20, 2022

While these aren’t great metrics if Weave was enterprise, they are still solid for SMBs. Many SMB SaaS companies struggle to hit 100% NRR and 80% GRR. A fairly standard SMB price point. 907 employees at IPO, so about $150,000 revenue per employee. So why the terrible revenue multiple? Series C ($5.35

SaaS Payments 220

SaaS Payments Scale Payment Methods Payments 220

Clouded Judgement

APRIL 11, 2024

This has all resulted in the median stock price declining 5% YTD. It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 169

Cloud Software Azure AWS 169

SaaStr

FEBRUARY 24, 2021

I would have expected lower than 100% net revenue retention from Upwork, given that much of the spend can be episodic. Net net, even from SMBs, Upwork manages 100% NRR, just as Shopify and Hubspot do from SMBs. 80% SMB, 20% Enterprise. 20% of clients represent 80% of the revenue. So don’t settle for less.

Marketplace as a Service 254

Marketplace as a Service SMB Cloud Enterprise 254

SaaStr

DECEMBER 26, 2020

And produce a lot less revenue per interaction. That often starts to not feel worth it after just a few million in revenue. Every call takes the same amount of time, but the small ones produce so much less revenue. This makes the SMB leads worth a lot more than just their direct lifetime value. Probably more.

SMB 334

SMB Sales Hiring Marketing Enterprise 334

SaaStr

DECEMBER 27, 2020

Those of us who’ve been around a while think of New Relic as a freemium and almost SMB tool, but today 77% of their revenue comes from accounts greater than $100k. New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise.

Scale 281

Scale Outsourced Development SMB Cloud 281

SaaStr

FEBRUARY 9, 2024

The first role that comes to mind is driving revenue and it’s probably within sales. They had been building toward an SMB audience, so hiring 50 people in sales against a product that wasn’t ready for a specific audience would’ve been a mistake. So, you might hire someone for inbound or outbound sales to meet that growth.

Scale 241

Scale Sales Hiring Sales Marketing 241

SaaStr

OCTOBER 11, 2023

Monday has gone from $7m in 2017 to over $700m in revenue today, showcasing the sheer power of compounding revenue. You don’t want to overwhelm SMB customers, and Monday made this a focus from day one. Big Brain was an internal tool to track revenue, marketing expenses, and usage of the product. They tracked every penny.

Scale 161

Scale Sales Hiring Scaling Banking 161

SaaStr

APRIL 4, 2023

This means you can raise prices, add modules, and expand, increasing the average revenue per customer account (ARPA). Not only did they bring in and convert more leads, but they also moved part of the customer base upmarket, increasing LTV and revenue. They had SMB positioning with an unfavorable LTV to CAC ratio.

Scale 213

Scale Strategy Scaling Outbound Sales Team 213

Clouded Judgement

DECEMBER 21, 2023

Q3 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q3 starting with revenue. Beating consensus revenue estimates is the first aspect of a successful quarter. The formula to calculate this is: (Q3 ’23 revenue) / (Q3 ’22 revenue) - 1.

Cloud 177

Cloud Software Benchmarks Retention 177

SaaStr

OCTOBER 30, 2021

Their CEO will join us at SaaSr Scale 2021 on December 15 to talk about using data to get to 10,000 SMB customers! I asked Aasif Osmany to share his learnings as a top-performing SMB VP of Sales, below. A mentor of mine suggested that I reframe my search to seek out companies that I would invest in, instead of the other way around.

Scale 245

Scale Sales Hiring Sales SMB 245

OPEXEngine

JANUARY 11, 2022

Consumption-based pricing is best used when you can accurately and easily break down your service offering into small, digestible units. Many companies in the technology industry are moving toward “pay for what you use” consumption-based pricing models. Four pricing models. Uncommitted contracts. Challenges and shifts.

Pricing 52

Pricing Payment Solutions Outsourced Development Compensation 52

Clouded Judgement

SEPTEMBER 12, 2023

We will see this show up in revenue figures in a quarter or two. Regardless, as we round into Q3 we’ll start to “lap” the first tough quarters so it wouldn’t surprise me to see a number of companies accelerate their YoY revenue growth. ” Source: company filings Let’s get into some high level data.

Cloud 169

Cloud Software Benchmarks Retention 169

SaaStr

AUGUST 7, 2023

ARR stands for Annualized Recurring Revenue, although its real-world definition has evolved over time. As you’ll learn further down in this article, ARR now means any type of software-related revenue with 100%+ Net Revenue Retention (NRR), even if it’s not truly recurring. The only thing that mattered was revenue.

Metrics 176

Metrics SaaS Sales Hiring Finance 176

User Pilot

AUGUST 6, 2023

Because the omnichannel experience will encourage customers to stick around longer, this has the knock-on effect of increasing customer lifetime value (LTV) or even generating expansion revenue. Promotional emails are consistent with the information on your pricing pages. Source: SMB Compass. Data-driven decisions.

Investment 97

Investment Banking Social Media Customer Lifetime Value 97

Clouded Judgement

JUNE 9, 2023

Expansion revenue is still declining (we see this in falling net retention rates), but gross retention remains strong. Revenue multiples are a shorthand valuation framework. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue. New customer growth seems to be picking up.

Trends 130

Trends Cloud Azure AWS 130

OPEXEngine

MAY 18, 2021

SaaS metrics are viewed differently at different stages of growth and for different sales models, primarily whether a company is selling into an SMB or enterprise marketplace. SaaS Metric #1 – Annual Recurring Revenue (ARR). Revenue from irregular overages should be bucketed together, separately from contracted ARR.

SaaS Payments 98

SaaS Payments Metrics Payments Payment Services 98

Clouded Judgement

APRIL 12, 2023

.” This is not an indication of who I think will preform the strongest in the future, but a look-back on who preformed the best in Q4 (based on a formula I use that factors in many different financial variables) Q4 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q4 starting with revenue.

Cloud 161

Cloud Software Benchmarks Retention 161

Clouded Judgement

JUNE 20, 2023

The market is clearly pricing in lower rates + reacceleration of growth. Beating consensus revenue estimates is the first aspect of a successful quarter. Next Quarter’s Guidance Relative to Consensus Estimates Guiding above next quarter’s consensus revenue estimates is the second factor for a successful quarter.

Cloud 161

Cloud Software Benchmarks Scale 161

Clouded Judgement

JUNE 2, 2023

It’s a bit of a swag as not all companies report ARR (and where they don’t I’m calculating ARR as quarterly subscription revenue x4). ” From Okta: “We're seeing increased macro headwinds on our business, most notably with new business across SMB and enterprise. Overall Stats: Overall Median: 5.8x

Cloud 130

Cloud Trends SMB Subscription 130

ChurnZero

JUNE 2, 2021

Q: How do you calculate net revenue retention for a usage-based model? I still think that net revenue retention works really well. If you say that 100 customers in November gave us this much money, and in December they gave us that much money, it feels like net revenue retention. They amortize the revenue 1/12 th every month.

Benchmarks 98

Benchmarks B2B SMB SaaS 98

Clouded Judgement

DECEMBER 20, 2022

This is not an indication of who I think will preform the strongest in the future, but a look-back on who preformed the best in Q3 (based on a formula I use that factors in many different financial variables) Q3 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q3 starting with revenue.

Cloud 130

Cloud Software Review Software Benchmarks 130

SaaStr

JANUARY 12, 2022

Another top mistake SMB folks make trying to sell enterprise. That you can’t have a majority of y our revenue dependent on one customer. 5M in ARR b/c we were too small a co and compliance dept blocked renewal (shoulda raised price I guess…) ” — Jared Hansen, CEO Thrilling Foods.

CTO Hire 257

CTO Hire Sales Hiring New CTO CTO 257

SaaStr

MARCH 8, 2024

With everything in AI moving so rapidly, what’s the best way to price Artificial Intelligence products or SaaS tools with custom AI features and integrations? So we asked the expert, Sandhya Hegde, General Partner at Unusual Ventures to share her best practices and trends for pricing and packaging AI products. Why is pricing so tricky?

AI 181

AI Artificial Intelligence Pricing SaaS 181

Aaron Beashel

MARCH 9, 2018

It’s free to send less than 2000 emails per month, with paid pricing plans going up from there. The end users of their software are marketers at SMB companies and they sell their product for around $100 per month (Meaning the Annual Contact Value is around $1000). At what price point will you be selling your product?

Scale 192

Scale SaaS Payments B2B Strategy 192

Tom Tunguz

AUGUST 26, 2014

We will explore revenue growth, average revenue per customer, sales efficiency, payback periods, net income, gross margin and engineering spending. HubSpot has achieved amazing revenue growth in their first 7 years as a company growing by more than 12x from $5.7M in 2009 revenue to 2013 revenue of $71M - an 88% CAGR.

Benchmarks 108

Benchmarks SMB Metrics SaaS 108

Tom Tunguz

JUNE 12, 2014

To answer those questions, I’ve pulled together data from a basket of 46 publicly traded SaaS/Cloud companies and segmented them based on their average annual customer value (ACV) into three buckets: SMB ( =$10k to $100k). The median SMB SaaS startup spends significantly less on sales and marketing through year 4 of their lives.

Startup 100

Startup SMB Sales Hiring Acquisition 100

OpenView Labs

FEBRUARY 3, 2022

To find out which of these features are most common, OpenView surveyed over 500 SaaS companies ranging from pre-revenue to $100 million in ARR. All too often, companies omit certain acquisition costs, over-inflate recurring revenue by failing to strip out one-time revenue, and/or leave out some of the ongoing costs of serving a customer.

Headcount 73

Headcount SaaS Compensation Acquisition 73

User Pilot

SEPTEMBER 19, 2023

No-code growth is a method of achieving product-led growth (= using your own product as a lever and revenue growth channel) without coding, using no-code tools. It’s essentially free revenue from your existing user base, which is particularly important when your customers’ LTV is around $150 in total.

SMB 52

SMB Onboarding Mobile Engagement 52

SaaStr

MAY 24, 2019

* How does Andrew advise founders on the question of whether to start in enterprise or SMB? What are the benefits of starting in SMB? How does the product and what you invest in proactively need to change as you move into enterprise? That’s an amazing revenue opportunity. What are those leading indicators?

Sales Hiring 143

Sales Hiring Scale SMB Sales Recruiting 143

Andreessen Horowitz

OCTOBER 16, 2023

As for pricing, how do you know you’re not leaving value on the table? Speaking of, we go beyond the typical discussion of product-market fit into the concept of product-market-sales fit, and what that means for product design, to services, to pricing and packaging, to product management, and more. When should companies offer services?

Product Marketing 75

Product Marketing Scale Sales Hiring Sales Recruiting 75

ChurnZero

MARCH 18, 2022

Q: What’s the rationale for keeping the cadence on Monthly Recurring Revenue (MRR) versus Annual Recurring Revenue (ARR)? Q: Is Net Revenue Retention (NRR) the same as Net Dollar Retention (NDR)? A [You Mon]: I love the idea that a book of business not only has revenue attached, but it also has difficulty attached.

Customer Success 98

Customer Success Metrics SaaS Banking 98

Neil Patel

FEBRUARY 4, 2021

NP Digital has had impressive growth, tripling in revenue in the last couple of years. We’d love to continue this kind of growth, where it’s not just about revenue growth but also the quality of our team. We quickly learned we could not serve most people asking for help because the investment was outside their budget.

VP of Engineering 126

VP of Engineering Marketing Marketplace as a Service Social Media 126

OPEXEngine

FEBRUARY 22, 2022

Small and Mid-Market (SMM) SaaS Companies serve customers with annual revenues of $1 million to $1 billion and with a typical employee base of 100 to 1,000. Customer success is usually staffed by a mix of customer support, sales, and engineering folks contributing some portion of their time to the Cost of Revenue.

SaaS Payments 52

SaaS Payments Payment Services Payment Methods Marketplace as a Service 52

Chart Mogul

SEPTEMBER 15, 2023

5 Reasons I Hate the Rule of 40 by Mikael Johnsson, SaaS Nordic While not necessarily completely useless, I would strongly argue that R40 is a metric applicable to the world of PE and public markets investing and is not a good metric for assessing the quality of venture-stage companies.

Scale 52

Scale Underperforming Technical Team SaaS Sales Hiring 52

OpenView Labs

MAY 29, 2020

gross multiple of invested capital—buying SaaS equities after IPO and holding long term is foolproof.”. Permabull investors point to Workday as their overwhelming proof that SaaS is a guaranteed successful long term investment. Over that same period, though, Workday grew revenues at a 55% CAGR (between ’12-’16).

Marketing 52

Marketing SMB Benchmarks Pricing 52

Chart Mogul

OCTOBER 9, 2020

Yet assessing this pricing model's success can be challenging if you're not measuring its long term, compounding effect on revenue. By removing entry-level cost barriers to product adoption, companies using a Freemium strategy are able to increase their total addressable market to include price-sensitive audiences, startups, and SMBs.

Scale 83

Scale Churn Metrics Retention 83

SaaStr

NOVEMBER 2, 2019

How does Krish think about purely serving the SMB market? How does he think about the mortality rate of SMBs? How does Krish think your customer acquisition and GTM strategy has to change with the movement from SMB to enterprise? That’s in a case when pricing is successful. So you bake that into pricing model.

Scale 125

Scale SaaS Payments Sales Recruiting Payment Services 125