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Are You Dying by the Hands of Analysis?

If there’s one thing a finance professional can do forever, it’s analyze stuff. We’re never short of data to analyze, and there are always more details to be ironed out. We love analyzing stuff so much that we almost forget the purpose of doing the analysis. The purpose is to improve business performance through improved decision-making. That means that the analysis must produce an outcome that can be presented and discussed with business leaders. Too often though, we don’t get to that stage, and yet again finance falls short of making an impact.

January 7, 2020

Data helped CircleCI CFO make switch from subscription to usage pricing

“Forecasting a usage model is more of a data science problem than it is a classic Excel modeling problem,” Balasubramanian told CFO Dive. “Revenue is a backward-looking metric. Subscription values are just fairly standard and fixed units. You can’t necessarily call a usage-based model recurring revenue because it really is re-recurring revenue.” Find out how Balasubramanian and her team used data to validate making the switch to consumption-based pricing model in this guest post from CFODive.

January 1, 2020

110% Net Dollar Retention Is The Benchmark

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 than 100%, then growth from your existing customer base more than offset any losses from that customer base.

December 31, 2019

How Automation and Machine Learning are Reshaping the Finance Function, Part One

Here’s how more advanced methods of automation, including machine learning, can help CFOs transform the finance function to be more of a strategic advisor to the business.

December 24, 2019

SaaS Company Benchmarking: Leveraging Metrics for Performance Insights

In the many years I’ve worked with SaaS companies, I continue to observe a surprising lack of standardization of SaaS metrics and performance reporting. My experience reinforces the fact that SaaS business model variants and approaches to measuring performance via metrics are still very much undefined. This is true even though selling software on a subscription basis has been around for well over 20 years.

December 17, 2019

Non-US-Based SaaS Companies on the Rise

US SaaS companies need to take note of the growing number of world class SaaS companies based outside the US because the international landscape is shifting rapidly. Increased funding activity in Canada, Europe and Asia/Pac is introducing more non-US competition in the SaaS marketplace. More and better funded SaaS companies worldwide can be a challenge but also an opportunity for US firms. Think about it as you review your resource allocations dedicated to international markets in your 2020 plans.2019 Investment in non-US based SaaS companies rose dramatically, granted off a smaller base. In Canada alone investment has risen by over 200% from 2018 to $5.13B this year, according to Ottawa-based accelerator L-Spark. According to venture firm Accel’s 2019 Euroscape, European investment grew from $2B in 2016 to over $5B in 2019, still only a quarter of US SaaS investment.

December 12, 2019

Let’s Do Launch: Five Critical Moves for Your Next Launch

By excelling at these moves, marketers ensure that their message breaks through the noise.

December 10, 2019

SaaS Cash Conversion Score – What Does It Mean?

Last week, Bessemer released interesting new research regarding the return on invested capital. Three key take-aways from their analysis: 1. Founders and CEOs should evaluate how effectively they are turning their capital into ARR instead of the size of their funding rounds. 2. A new metric, called the Cash Conversion Score (CCS), shows the return on investment for each dollar ever invested in the company. 3. Bessemer found that the CCS is a good indicator of internal rate of return (IRR) for investors.

December 5, 2019

The Complete Guide to Understanding Net Negative Churn

As your subscriber base grows larger, the loss of revenue caused by even a low churn rate will begin to compound. The number of new bookings needed to replace the customers who are leaving becomes unachievable, and the struggle to keep your head above water becomes unsustainable. Not only will the aimless pursuit of plugging this hole in revenue cause an overwhelming drain on company resources, but your teams will also become scattered, morale will plummet and company growth will stall.

December 3, 2019