SaaStr

MAY 18, 2021

But one thing that is almost always true, is you get more renewals, more upsells, and more net revenue retention from your largest customers. Squarespace is almost all not just SMB, but self-service. Their new revenue retention is about 85%. As a best-of-breed player, its net revenue retention is about 100%. Segment it.

Merchant Services 265

Merchant Services Revenue SMB SaaS 265

SaaStr

DECEMBER 1, 2021

The good news is that, as long as you are providing the customer with high value and good experiences, you will likely get repeat business and perhaps even more revenue from the same customer. To make sure you keep customers and revenue in your businesses, pay attention to your NRR (Net Revenue Retention) even more than your ARR.

Software Review 240

Software Review SMB Enterprise Software 240

SaaStr

APRIL 26, 2023

Only 32% of Revenue From Websites. The majority of its revenue comes from ecommerce. Their pure website revenue, which they call “Presence”, is just 32% of their revenue. #2. Most of the website / presence growth came from price increases, which saw limited churn as a result. 68% From Ecommerce.

Scale 227

Scale SMB Churn Pricing 227

FastSpring

SEPTEMBER 16, 2022

But what about pricing? When FastSpring’s Chief Product Officer Kurt Smith worked with growth-stage to Fortune 100 companies at Accel-KKR, he consistently saw pricing as one of the most essential growth levers they employed to meet their next revenue goal. Why You Shouldn’t Trust How Your Competitor’s Price.

Pricing 118

Pricing Payment Solutions Payment Services SaaS Payments 118

SaaStr

FEBRUARY 1, 2022

80% of Datadog’s revenue at $1.2B revenue comes from its $100k+ customers — but its Free edition is still core to its lead gen. Toast’s SMB NRR is 114% today — but it took 4 full years just to get to 100%. A reminder that you don’t need to settle for sub-100% NRR from SMBs.

Scale 344

Scale SMB SaaS Scaling 344

SaaStr

JANUARY 24, 2024

Solving High Volume, Low Conversion at Lattice Dini Mehta joined Lattice at $3M in revenue when it had just 10 people in seat for Go-To-Market and 7 salespeople. Scaling Enterprise vs. Mid-Market Sales: Key Takeaways from Calendly It’s a common blueprint to start with SMB and mid-market accounts as your ideal customers. The result?

Scale 226

Scale Sales Hiring Scaling Revenue 226

SaaStr

MAY 10, 2023

Pricing is up a modest but material 6% on a constant currency basis, and 3% on an as-reported basis, from a year ago. #3. Revenue Up 30%, but Employee Count Only up 10%, to 7,055. At the end of the day, in SaaS, efficiency really comes from growing revenue faster than headcount. 40% of Their Revenues Comes from Partners.

Scale 252

Scale SMB Headcount New CTO 252

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. Soon, They Will Be The Majority of Revenue. A big change from their roots with smaller SMBs.

SMB 248

SMB AI Onboarding Cloud 248

SaaStr

JUNE 8, 2022

ARR, Zoom was an SMB powerhouse, with Enterprise growing. SMB is now saturated at $4B ARR and not growing, but Enterprise is picking up the slack and growing faster than ever. 5 Interesting Learnings: #1 $100k+ customers are now the engine, not self-serve SMBs. ARR … which it did in just 1 year (!!)

SMB 277

SMB Enterprise Engineering Scale 277

SaaStr

AUGUST 24, 2022

SMB sales (most of Toast) is very tough to do without a highly efficient and effective sales force. At least 20% of your customers from referrals and second-order revenue. #4. Many SMB leaders have to get very, very good at outbound because of the limited deal sizes. 20% of new customers / locations come from referrals.

SaaS Payments 288

SaaS Payments Scale SMB Payment Solutions 288

SaaStr

JULY 31, 2022

The Challenge with SMB SaaS: High Growth Can Only Mask High Churn For Just So Long. SMB SaaS has a lot going for it, but one big existential challenge — inherent churn. SaaStr 572: 10 Mistakes in Building Out Your Revenue Organization: A CEO’s Perspective with Insider CEO Hande Çilingir. It’s not as fun anymore.

New CTO 245

New CTO CTO SMB Venture Capital 245

SaaStr

JUNE 29, 2022

It’s moved beyond its tiniest customers, of an ACV of < $1k, but other than that, it’s going upmarket without giving up its SMB roots. In fact, Q’22 was Zendesk’s highest first-quarter revenue increase in history. Even though Zendesk still has thousands and thousands of SMB customers. #2.

SMB 265

SMB Scale B2B Metrics 265

SaaStr

AUGUST 27, 2022

Salesforce: “We’re finally seeing slowdown now in our commerce, media, telecom, and SMB segments”. While the stock price was hit along with everyone else, the business wasn’t. Salesforce saw demand from SMBs slow, and demandslow in retail, consumer and communications / media. Billion in revenue. And how about you?

SMB 236

SMB Scale Cloud Trends 236

SaaStr

JANUARY 3, 2021

One question I struggled with a lot in the early days was what price points supported inside sales reps. It was clear to me that our freemium offering, priced at from $0 to $19/month, couldn’t really support a traditional inside sales team. What about a $199 or even a $99/mo price point? But how low can you go?

SMB 330

SMB Pricing Sales Metrics 330

SaaStr

OCTOBER 4, 2022

Now, if you’re average price point is higher, you can still afford to go a bit lower to expand the bottom of your market. And if you get a bunch of revenue from self-serve, you can also probably push the number down a bit and use the self-serve revenue to justify somewhat lower economics on the sales-driven business.

SMB 197

SMB Sales Pricing Revenue 197

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 239

SaaS Payments Scale Payment Methods Payments 239

Kellblog

APRIL 19, 2024

A lot of today’s SMB companies will be mid-market tomorrow, so we want to catch them on the way up. CEO: Well, you know, you can’t really control who clicks on a Google ad, so we can get inbound from SMB, MM, and ENT. Define the idea of strategic vs. opportunistic revenue. CEO: Mid-market (MM). CEO: Yes, for sure.

Startup 106

Startup SMB Airlines Banking 106

SaaStr

MARCH 25, 2021

Also interesting is that BigCommerce lacks the full fintech / merchant services element of Shopify (it relies more on partners here), leading to much slower overall revenue growth than Shopify, even though its business is overall growing about as fast as Shopify’s SaaS business. Driving existing customer revenue up more than new logos.

Outsourcing Services 218

Outsourcing Services Payments Merchant Services SaaS Payments 218

Tom Tunguz

SEPTEMBER 13, 2016

When an SMB SaaS startup is young with quickly growing revenues, more of the same works. A $1M ARR SaaS startup with an average selling price of $750 per year needs to add 1,333 each year on average to double. All this math assumes that the selling price remains the same. ARR 1 5 10 25 50 100.

SMB 100

SMB Scale Startup Marketing 100

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 263

Marketplace as a Service SMB Cloud Enterprise 263

SaaStr

APRIL 5, 2024

Leandra has over 30 years of experience leading large sales and revenue teams. It needed to be accessible and easy for end users, and for Apollo, that meant a hyperfocus on accessibility for SMBs. So Apollo users can be free forever at the SMB scale and still gain value from the platform. No, you don’t.

Scale 190

Scale Sales Hiring Pricing AI 190

SaaStr

APRIL 19, 2023

One leader in SMB commerce is Lightspeed Commerce, founded way back in 2005. And their mix of software, payments and hardware revenue drives up the total deal size — but puts a lot of pressure on margins. 39% of their revenues from software, and going down. Driving up ARPU at scale key to growth with SMBs.

Payment Solutions 238

Payment Solutions Point of Sale Payments SaaS Payments 238

SaaStr

MAY 18, 2022

If you can’t pull off both points, you’ll mostly likely need a product with a higher price point and a sales-driven model to support it. Even SMB leaders like Monday waited to go Freemium. More on that here. Zoom at IPO got 55% of its customers from a Free session initially.

SMB 230

SMB Pricing B2B Engineering 230

SaaStr

AUGUST 26, 2021

Undercharge if the customer is small by revenue. Charge a super cheap price early to take friction out of sales, and to get to 100, 200, 500+ customers fast. Price way too cheap, and you will just confuse the prospects. And don’t charge $4 a month for an SMB product. You want to remove friction.

SMB 264

SMB Enterprise Pricing Revenue 264

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 177

Cloud Software Azure AWS 177

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 347

SMB Sales Hiring Marketing Enterprise 347

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 300

Scale Outsourced Development SMB Cloud 300

SaaStr

MAY 19, 2019

What lessons can we learn from this huge Kiwi SMB success, for other founders? Here are a few: All the way until $600m+ ARR, the majority of Xero’s new bookings and revenue still came from Australia and New Zealand! Most of the companies in this 5 Interesting Things Series have had net negative churn from SMBs (e.g.,

SMB 217

SMB Customer Lifetime Value AWS Churn 217

SaaStr

MAY 26, 2019

Its growth has been more slow-and-steady than traditional rocketship, crossing $69m in Q4 revenues (let’s call that $280m+ in ARR, so soon to be $300m) — growing 17% a year by revenue, and 10% a year by customer count. That is a similar revenue growth rate to Salesforce’s core CRM product. A few learnings: 1.

Scale 234

Scale SaaS Payments Payments Payment Services 234

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 164

Scale Sales Hiring Scaling Banking 164

SaaStr

NOVEMBER 28, 2022

From 2010 until 2015, the SaaS world was becoming more complex with the introduction of static bundles and recurring revenue as an addition to the annual/monthly subscription model. We are seeing more agile packaging and pricing methods, dynamic deals, ramp-up revenue, and consumption and usage. Era 2, SaaS 2.0: Era 3, SaaS 3.0:

Scale 199

Scale Finance Sales Hiring Scaling 199

SaaStr

FEBRUARY 4, 2021

One was how my First Real VP of Sales Doubled Our Net New Revenue in 90 days. Leads had kept growing, but revenue growth had stagnated. The pricing stayed exactly the same, as did the target customer and target deal size. What happened was in 90 days, he doubled the revenue we got out of each lead that we had.

Sales Hiring 343

Sales Hiring Sales SMB Pricing 343

SaaStr

DECEMBER 19, 2019

Many see this price point as not scaleable. It will really, really show you how power laws kick in with recurring revenue models. International is 40% of revenues today and a growth accelerator. HubSpot has gone global with a fury since 2014, driving from 22% international revenue to 40%. But HubSpot proves otherwise.

Outsourcing Services 320

Outsourcing Services Scale SMB Pricing 320

SaaStr

DECEMBER 3, 2021

10 SaaStr 211: The Ultimate Guide To SaaS Pricing From Investors @ Benchmark, Matrix, Upfront Ventures & Operators @ Figma, Snyk, and Kustomer. #9 7 SaaStr 124: Upfront’s Mark Suster on The One Thing That Kills Sales, Why You Have To Price High and Discount & Why Sales People Are Either Farmers or Hunters. #6

Scale 201

Scale Sales Hiring SMB Benchmarks 201

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 260

Scale Sales Hiring Sales Marketing 260

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 228

Scale Strategy Scaling Outbound Sales Team 228

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