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Five years later: Five ways to build a $100 million SaaS business

Using my five little animals as a simple framework has helped me challenge (and hopefully occasionally provide sound advice on) the scaling strategies of numerous startups over the last couple of years.

May 14, 2019

How the Finance Function Changes as a SaaS Company Grows

We had a great discussion with Andrew Setness, VP Finance at DialSource this week on evolving the Finance organization as a SaaS company grows. We talked about the processes, metrics and systems that change as a company goes from a Series A, to B, to C and beyond.

May 10, 2019

Data-Driven SaaS Growth Relies on Meaningful, Accurate Data

I’m a huge practitioner of data-driven SaaS management. I believe that almost everything in a SaaS business can and should be measured. But there are two important caveats to measurement that I’ve recently seen overlooked.

May 7, 2019

Your SaaS Customer’s Journey

A customer journey is typically defined as the sum of all the experiences that your customer has with your brand and product. In the case of your SaaS product, it includes interactions prior to buying, the actual buying process, on-boarding, continued learning about how to use the product including best practices, up-selling, technical problem resolution, invoicing, other problem resolution and learning about the future direction of the product.

April 30, 2019

Calculating SaaS CAC – What NOT to Put In

Customer Acquisition Cost (CAC) is one of the key SaaS metrics to track and benchmark in your business. By accurately calculating SaaS CAC and benchmarking it against peers and market leaders, companies can better allocate resources to improve growth and profitability. And with accurate calculations, companies can identify the most profitable customer segments. Yet, getting CAC right becomes increasingly complicated as companies grow and invest resources into both acquiring and retaining/delighting customers.

April 26, 2019

More Effective Board Reporting in 3 Easy Steps

Many finance teams consider board reports the most challenging type of report that they put together. And, in many ways, it’s because board members want so much more than numbers, such as nonfinancial information and customized analysis.

April 23, 2019

Managing Your Biggest SaaS Asset – Human Capital

Employees are the biggest asset of a SaaS company as well as the single largest expense. Compensation & benefits alone represent from 65% to 80%+ of revenue. With the Enterprise SaaS market generating revenues of $20B a quarter, the venture community continues to pump funds into new and expansion companies. The resulting competition makes it increasingly difficult and expensive to hire skilled tech employees in almost every discipline. Investors examine employee statistics as key indicators of company value, competitiveness and ability to weather changes in the dynamic SaaS world. Because hiring is so competitive and investors are looking at employee metrics so closely, SaaS management needs to tightly monitor and benchmark key employee productivity metrics to effectively deploy their largest asset.

April 18, 2019

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

PagerDuty was founded in 2009 by 3 former Amazon engineers who were often on-call. To engineers, being on call means carrying a pager to respond to crises when software breaks or services go down. In the 10 years since that day, PagerDuty has built an exceptional business.

April 16, 2019

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

On Friday, the company published its S-1 and revealed to the world a very strong business. the company generated $107M of trailing 12 month revenue, services 33% of the Fortune 500, grew revenue at 48% and has a net retention rate of 139% across 10,800 customers. The average customer is worth about $10,000. Let’s compare PagerDuty to other recent software IPOs for companies selling to engineers at their IPO.

April 16, 2019