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What does it take to achieve extraordinary SaaS B2B valuation multiples? Zscaler Example

What does it take to achieve extraordinary SaaS B2B valuation multiples? A big market and performance indicators showing that the company can acquire customers at a fast pace. In addition, it is valuable to show that your company can support/maintain customers with a low cost of revenue. Even better when your metrics show gains in all the right directions over time. Getting to the point where you can deliver that kind of performance requires critical focus on all the levers across the business: from lead generation through customer success and renewal to product development.

June 27, 2019

Don’t obsess over Average Contract Value

Average Contract Value is (“ACV”) is a vanity metric that should be looked at as part of a group of ratios that include number of qualified leads, close ratio, sales cycle, and other critical sales metrics. It shouldn’t be put on a pedestal. Here is why:

June 25, 2019

SaaS Metrics Aren't Just For Investors. You Need Them, Too.

I often talk about B2B SaaS metrics from the perspective of what investors want. If you don’t have easy access to the metrics they expect (or, worse, if they’re wrong), your valuation could suffer, and that’s the last thing SaaS founders, CEOs and CFOs want to hear. But on occasion, I’ll hear prospects say they don’t need SaaS metrics because they’re not raising capital yet. That’s when I realized we need to talk more about the value metrics and analytics brings to operating your business and making data-driven decisions.

June 18, 2019

10 Key Trends for SaaS B2B Growth Strategies

In this week’s 2019 State of the Internet presentation, Mary Meeker, the Midas List Kleiner Perkins/Bond Capital partner behind Spotify, Dropbox, Instacart, Slack, Square, Airbnb and Houzz, as well as Facebook and Twitter, captured how the internet is transforming the consumer and enterprise world, and even the political and regulatory sphere. Given at Vox/Recode’s Code Conference 2019 in Scotsdale, AZ, the 333 slide presentation is a terrific whirlwind review of technology trends from someone who has scored huge wins betting on where the puck is going (sorry, Bostonians, for the hockey reference!).

June 14, 2019

Benchmarking Slack's S-1: How 7 Key Metrics Stack Up

Slack has transformed the way we work. By replacing email with beautiful and simple internal chat, Slack has productized productivity. Founded as a gaming company called Tiny Speck in 2009, the company’s initial product, Glitch, didn’t catch on as expected. So the business pivoted to commercialize an internal tool - a Searchable Log of All Conversation and Knowledge, Slack. Since those early days, the company has grown to employ 1500 employees according to their S-1. The company filed to trade under the ticker SK.

June 11, 2019

Are we any good at R&D investment in the software and SaaS world

Two/thirds of the SaaS Finance executives in this week’s webinar audience said they don’t feel they are getting a high level of return on their R&D investment. Tom Huntington, an experienced SaaS CFO and I explored the R&D “Magic Number,” and how the SaaS model and Lean Start-Up methodologies are helping to make R&D investment more accountable to revenue growth.

June 7, 2019

Don’t forget about one-time revenue

Everyone loves recurring revenue and rightly so: it’s far more valuable than one-time revenue to VC and acquirers. But, don’t forsake one-time revenue. Whether it’s for services, onboarding, licensing, or some other one-time event, revenue of this type is incredibly valuable especially at early stages. There are three big reasons it’s valuable.

June 4, 2019

Is Your SaaS R&D Productivity Good, Great, or Below Average?

Great SaaS companies grow fast and have great products. Top line growth is the number one priority for most SaaS companies, but what about Research and Development (R&D)? You can’t have fast growth without great products, but often, the link between product development and revenue growth isn’t clear. How do you know if you are getting the productivity out of your R&D investment that your peers or market leaders are getting?

May 31, 2019

SaaS Revenue Recognition a Nightmare? Your System is to Blame

As the ways in which we do business change and evolve, the tools we use for SaaS revenue recognition should, ideally, change as well. Unfortunately, that’s not always the case.

May 28, 2019