Clouded Judgement

MARCH 22, 2024

Subscribe now ARR (Annual Recurring Revenue) vs ERR (Experimental Runrate Revenue) ARR (Annual Recurring Revenue) is one of the most popular SaaS (Non-GAAP) metrics. 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.

AI 183

AI Revenue Cloud Technical Advisors 183

SaaStr

APRIL 4, 2022

Jess Weimer, Senior Vice President of Revenue Marketing at Podium, discusses why it’s time to pivot from demand generation to revenue marketing and best practices for making that pivot. Pillars of Revenue Marketing . Evolving to Revenue Marketing . Organizing your teams for revenue marketing.

Scale 225

Scale Revenue Scaling Marketing 225

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 224

Software Review SMB Enterprise Software 224

SaaStr

APRIL 24, 2022

BowtiedCocoon: Top SaaS SMB AEs have $125k OTEs. Navigating the CRO and CMO Relationship with G2 and SalesLoft: Mike Weir, Chief Revenue Officer, G2; Steve Goldberg, Chief Revenue Officer, SalesLoft; Amanda Malko, CMO, G2. Revenue Marketing: Build for Scale with Podium’s SVP, Revenue Marketing Jess Weimer.

Sales Hiring 262

Sales Hiring Revenue Scale SMB 262

SaaStr

JULY 27, 2022

If a SaaS business hopes to win over the SMB market successfully, it will need a precise GTM approach. Founded in 2015, PayFit is a software company that empowers entrepreneurs and SMBs to digitize payroll and HR processes. Without an autonomous-first approach, you will miss out on many SMBs.

SMB 177

SMB Sales Hiring Scale B2C 177

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 262

Merchant Services Revenue SMB SaaS 262

Sales Hacker

AUGUST 29, 2023

Previously, he served as the VP of Sales & Services at Mixpanel, where he ran the more than 100-person global revenue team. And…monthly bonus podcast episodes dropping the first Thursday of every month The post GTM 58: How Stripe SuperCharged their SMB Team with Meka Asonye appeared first on GTMnow.

SMB 73

SMB Scale Compensation Finance 73

SaaStr

NOVEMBER 1, 2023

Well, fast forward to today and it’s truly an SMB powerhouse. How is SMB SaaS doing today? are realtively low, as a huge amount of their payments revenue goes out to the payment processors. 111% NRR from SMBs. . #5. 15% Customer Growth Leads to 48% Revenue Growth Always helpful to me to see this math broken out.

Payment Services 272

Payment Services Payments SaaS Payments Payment Solutions 272

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.

Scale 211

Scale Sales Hiring Scaling Revenue 211

SaaStr

DECEMBER 3, 2023

Non-Recurring Revenue Doesn’t Count, At Least Not as Much. If your revenue from any stream can go down in a given month or quarter, it’s not recurring. Pass-Through Revenue Simply Doesn’t Count. Is it OK to recognize pass through revenue as “revenue”? Loss-making Hardware Revenue Doesn’t Count.

SaaS Payments 191

SaaS Payments Metrics Payments SMB 191

SaaStr

MARCH 10, 2024

Because beyond WFH, RTO, and all the tactical changes of the past few years, the biggest structural one really is — The March To $400,000 in Revenue Per Employee. 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 225

SMB Cloud Startup Scaling 225

SaaStr

MAY 10, 2023

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. 23% Customer Count Growth Leads to 30% Revenue Growth, but NRR dips to 104% HubSpot is still very much SMB, especially the “M” of SMB.

Scale 238

Scale SMB Headcount New CTO 238

SaaStr

NOVEMBER 21, 2020

Let’s look at some of the top public SaaS companies: Shopify — very SMB: 100%. Hubspot — mostly SMB: 100%. Surverymonkey — fairly SMB, but going more enterprise: 100%. Zendesk — 116%, mix of SMB and enterprise. 119% net revenue retention. Asana, 130% net revenue retention. And mostly SMBs.

Retention 318

Retention SMB SaaS Enterprise 318

SaaStr

SEPTEMBER 2, 2023

The higher a company’s retention, the easier it is to grow, as the company doesn’t have to replace as much lost revenue. Increasing Net Revenue Retention (NRR) from the 90% to 100% range to the 100% to 110% range improves growth rate by 9 percentage points. This wasn’t obvious to me.

Startup 234

Startup SaaS SMB Banking 234

SaaStr

MAY 7, 2021

Revenue growth accelerated from 32% to 41% * And new customer growth accelerated to a crazy 45% YoY * All while keeping ACVs constant at ~10k. They did it the hard way, with SMBs. HubSpot is sort a bell-weather stock and company for selling to SMBs and mid-market. And what we see is that SMB is on fire in SaaS.

SMB 358

SMB Revenue Enterprise SaaS 358

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 331

Scale SMB SaaS Scaling 331

SaaStr

MARCH 22, 2024

The path to Cheif Revenue Officer (CRO) is different for many people. Tracy Young , CEO and co-founder at TigerEye, sits down with three CROs to talk about how they navigated the journey to revenue leader. After switching to SaaS, she started as an SMB sales leader with no prior management or SMB sales experience.

Scale 222

Scale Underperforming Technical Team SMB Finance 222

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. 28% of their revenue from outside the U.S. Having said that, many SMB players were hit hard in 2022. 68% From Ecommerce.

Scale 211

Scale SMB Churn Pricing 211

SaaStr

MAY 18, 2022

RingCentral is a very interesting case study in SaaS of starting very SMB, way in the early days of SaaS in 1999, keeping at it … and then tilting upmarket to going much more enterprise post-IPO. Fast forward to today, they are 27% SMB and 63% Mid-Market and Enterprise at $2B in ARR growing 33%. of revenue.

SMB 241

SMB Enterprise Scaling Revenue 241

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 262

SMB Enterprise Engineering Scale 262

SaaStr

FEBRUARY 7, 2024

300,000 Total Paying Customers, With 43,000 Paying $10k or More The vast majority of Atlassian’s customers pay less than $10k a year, but the $10k+ ones make up the bulk of the revenue. And also how important it is to go a smidge upmarket if you sell to SMBs and smaller customers. #2. The markets say Yes to Atlassian.

SMB 211

SMB Enterprise Scaling Trends 211

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 98

Startup SMB Airlines Banking 98

SaaStr

AUGUST 30, 2021

Started 10 years ago as “Freshdesk” and a low-end / SMB helpdesk to rival Zendesk, Freshworks has since expanded its product footprint across IT management (Freshservice) and CRM (Freshsales) to a stunnning 49% growth rate at $350m in ARR. 49% revenue growth from 20% customer growth. Headquartered in the U.S., NRR of 118%.

Scale 340

Scale SMB Scaling Subscription 340

SaaStr

JUNE 2, 2022

Two things though did get hit harder — SMB Churn and Upsell s. Customers kept buying more SaaS than ever, which masked all-time high churn in SMB accounts. SMBs just plain went out of business in ’08-’09. So our gross SMB churn spiked to a crazy high of 5.5% That never even slowed down.

SMB 295

SMB SaaS Churn Enterprise 295

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 272

SaaS Payments Scale SMB Payment Solutions 272

Tom Tunguz

SEPTEMBER 20, 2016

Today, we’ll dig into valuation metrics to see if there’s any systematic bias in the investor community for SMB, Mid-Market and Enterprise SaaS companies. SMB is less than $10k, Mid-Market is between $10k and $100k, and Enterprise is greater than $100k in average customer value.

SMB 100

SMB Scale SaaS Marketing 100

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. IBM, Intel, Cisco and their kin generate more than 80% of their revenues through a universe of resellers and distributors. It’s the most successful SMB SaaS acquisition channel ever built.

Outsourcing Services 108

Outsourcing Services SMB Acquisition Scale 108

SaaStr

SEPTEMBER 1, 2023

119% NRR from SMBs Profitable, and only burned $15m net to date 130,000 total customers There’s not much to not love here! But the metrics, especially for an SMB-focused SaaS business, are breathtaking. Getting above 100% NRR from true SMBs is tough. 36% of Revenue Outside the U.S. Billion SMS messages. #8.

Scale 209

Scale SMB Sales Hiring Interviewing 209

Tom Tunguz

SEPTEMBER 13, 2016

When an SMB SaaS startup is young with quickly growing revenues, more of the same works. For some SMB SaaS companies, generating this kind of lead volume even at scale isn’t a challenge. There is no universal answer to which direction to pursue: remain in the SMB segment and cross-sell or move up-market, or both.

SMB 100

SMB Scale Startup Marketing 100

SaaStr

FEBRUARY 19, 2022

That journey here: Most of us don’t stay SMB forever. Zoom similarly started off almost 100% self-serve and SMB, and then later added an enterprise team. Today, 63% of the revenue is 10+ seat deals, and they have 2,000 Enterprise customers. PagerDuty was almost entirely SMB at IPO, at $125m in ARR.

SMB 331

SMB SaaS Enterprise Software 331

SaaStr

JANUARY 24, 2024

But, it hasn’t left behind its SMB and MidMarket roots, which together are still as large a revenue segment as Enterprise. And 20% or so of its revenue importantly comes from agencies, i.e. partners. Those 3% of customers make up about 40% of total revenues today. Not direct. Are you investing enough there? #3.

Social Media 203

Social Media SMB Enterprise Scaling 203

SaaStr

JUNE 7, 2021

If your SMB product requires or has a salesperson involved in closing, that’s a clear sign you also want a human being involved in making sure that customer is a success post-sale, too. Just assign a certain amount of ARR per each SMB customer success manager. Support has to handle a lot of routine SMB issues anyways.

Customer Success 307

Customer Success Scale SMB Sales 307

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 251

SMB Scale B2B Metrics 251

SaaStr

JUNE 22, 2023

My list: Not committing to 24 months upfront to getting to Real Revenues and a Minimum Sellable Product. It takes 7–10 years to build something real, and the first stage is the 18–24 months it takes to get real revenues and something off the ground. SMB folks want to go upmarket because there is too much churn in SMB.

SMB 213

SMB SaaS B2C Interviewing 213

SaaStr

JULY 22, 2021

That’s the power of compounding revenue right there: 5 Interesting Learnings: #1. 180,000 revenue per employee. We’ve seen this with sales-drive SMB and SME leaders like Xero as well. If you are selling to SMBs, you have to be very efficient. Long-tail look at how partners drive revenue.

Scale 321

Scale SMB compliance Churn 321

SaaStr

AUGUST 27, 2022

Salesforce: “We’re finally seeing slowdown now in our commerce, media, telecom, and SMB segments”. Salesforce saw demand from SMBs slow, and demandslow in retail, consumer and communications / media. Billion in revenue. But e-commerce, media / comms, and SMB are under pressure. Workday: “There’s no slowdown at all”.

SMB 220

SMB Scale Cloud Trends 220

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 327

SMB Enterprise Cloud Churn 327