Fresh Insights

Analyses, Musings & Observations

SaaS measures of customer health

In software, there are a few ways to measure the health of the customer base and stickiness of the product. Zuora does a nice job of showing four measures of customer health in their S1. Processed Transaction Volume Zuora’s first measure of the overall health of the business is processed transaction volume. According to their…
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First to market is meaningless

There are countless examples of ‘first to market’ not being a sustainable competitive advantage. Comparing the 2018 public offering of Spotify to Pandora’s original IPO in 2011 is a major example. Below are some excerpts from Pandora’s S1 (official IPO document filed with the SEC) that show its dominance at the time: Pandora is the…
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Measuring SaaS sales efficiency

There are many ways to measure SaaS sales & marketing efficiency. One of the simplest is to look at revenue booked over a given time period divided by sales & marketing spend during the period (New Rev/S&M). While the sales & marketing expense in a period may not necessarily be attributable to a given period’s…
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Building SaaS pipeline part 4

I read Trish Bertuzzi’s book ‘The Sales Development Playbook’ and it was by far one of the best sales books I’ve read in a while.  The book focuses heavily on building pipeline with SDR teams.  This is the second post of a few I’m going to share about this book: there was so much good…
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Growing into enterprise customers

Zoominfo recently went public and in their prospectus is a chart that shows their migration to larger enterprise customers. The chart is subtle, but it does show a transformation that most SaaS companies will undergo: as your product becomes more feature rich and valuable, the customer base migrate towards higher value enterprise customers. Why are…
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Building SaaS Pipeline – part 3

I read Trish Bertuzzi’s book ‘The Sales Development Playbook’ and it was by far one of the best sales books I’ve read in a while. The book focuses heavily on building pipeline with SDR teams. This is the second post of a few I’m going to share about this book: there was so much good…
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Building SaaS pipeline part 2

Building SaaS pipeline — part 2 I read Trish Bertuzzi’s book ‘The Sales Development Playbook’ and it was by far one of the best sales books I’ve read in a while. The book focuses heavily on building pipeline with SDR teams. This is the second post of a few I’m going to share about this book: there was…
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110% net dollar retention is the standard

One SaaS metric we monitor closely is net dollar retention. It tells you what percent of revenue from current customers you retained from the prior year, after accounting for upgrades, downgrades, and churn. Formulaically it’s beginning of period revenue + upgrades — downgrades — churn all divided by beginning of period revenue. If that formula yields a number greater…
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Managing SDR’s

Trish Bertuzzi’s book ‘The Sales Development Playbook’ is by far one of the best sales books I’ve read in a while. The book focuses heavily on building pipeline with SDR teams. This is the first post of a few I’m going to share about this book: there was so much good information that putting it…
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Revenue and growth of tech IPOs

We looked at the size (revenue) and revenue growth of 154 tech companies prior to going public to see how fast you need to grow prior to IPO. Data is below.   SaaS. Software companies posted median revenue of $105mm in the year prior to going public with 55% median growth. The range of growth…
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