1. SaaS METRIC OF THE WEEK: Fundraising Metrics. Make your fundraising way less chaotic by getting these metrics dialed in. Unless you are pre-revenue, Investors will expect to see detailed ARR, CAC, LTV, retention rates, and engagement metrics. A strong data deck (or data room) can answer investors' questions and show a clear path to growth.


2. PPG: Tech dictionary time - another acronym for you: PPG or People Powered Growth. This is a derivative of product-led growth, which consists of a cross-functional team with both customer-facing and non-customer-facing members. It's a People + Product partnership that develops and tests solutions, searching for ways to scale human interactions/intervention with a product. Some examples of PPG companies are Drift, Dropbox, and Loom.


3. PRODUCT-MARKET FIT: Finding Product-market fit isn't a one-and-done event—just like the product you ship, it's an ongoing process. This updated playbook breaks down the key signals, from retention curves to sales velocity, and the tactical moves to iterate faster. If you're still guessing, this is your roadmap.


4. MARKETS: Carta's Q4 2024 report is out and shows a fairly dynamic shift in private markets. Early-stage startups saw a 36% drop in deal activity. Series D rounds are up 60% YoY, and Series C bridge valuations doubled! Hopefully, this will give investors confidence in scaling ventures. Despite early-stage declines, median valuations rose by 22%, and M&A activity hit a record high, with 333 deals in 2H 2024.


5. FREEMIUM: AI is sparking a freemium renaissance in SaaS, according to Jason Lemkin. OpenAI and Claude offer robust free tiers, setting new customer expectations. Established players like PagerDuty, HubSpot, and Cloudflare are doubling down on freemium models to drive growth and enterprise pipeline. With AI costs plummeting, embracing freemium is both feasible and strategic.


6. GTM 1: Bookmark and take a read of these 25 automated GTM plays you're probably not using—but should be. From reviving closed-lost deals to automating expansion motions, this list can help your teams rethink your GTM plays for sure!


7. GTM 2: Fast follow from above, Enterprise GTMs are a lil' different, as they aren't just about sales—it's orchestration. This article breaks down the critical pillars: cross-team alignment, stakeholder mapping, sales productivity, and support structures that make or break frustratingly complex deals.


8. INFRASTRUCTURE: The AI boom has a very unique platform architecture compared to prior tech booms, and this article explores the next wave of data infrastructure companies that will be built for AI-scale efficiency. As a former platform geek, what's cool is that energy efficiency, new compute architectures, edge initiatives, and novel go-to-market motions are all going to be needed.


9. SCALE: Hitting $1M ARR is part luck and part product (and PMF), but you don't get there without execution. Bessemer Ventures breaks down what separates those winners: selling before building, picking the right GTM motion early, and ruthlessly qualifying customers. If you're grinding through the early days, this is a solid playbook


10. CASE STUDY: Series B+ raises. Most of us should be so lucky to get to this stage, but how do you raise funds beyond Series B (roughly 15% that raise seed make it to Series B)? Scale Ventures' Stacey Bishop gives the lowdown.

​POD OF THE WEEK: Why read when you can listen to this? Leveraging Notebook LLM again for the podcast version of this week's newsletter - but the AI cannot pronounce "SaaS."

1. SaaS METRIC OF THE WEEK: Share of Wallet. This is a fun one for all you marketplace people (who should also check this other article on Marketplace Liquidity). Share of Wallet is a measure of a marketplace going from being one of many options to becoming the primary option for a buyer (AND also a supplier).


2. ADVISORS: Startups need them; often they can be a little overly plentiful and somewhat predatory. If you find a sound advisor, how should they be compensated? Peter Walker from Carta has some data for you. TL;DR market rates are  0.23%-0.07% median based on stage unless full-time hires, who get 1% typically.


3. VENTURE: Dealroom's latest Global VC report reveals a mixed venture landscape. Startups raised $330B globally in 2024, with megadeals ($100M+) making up 53% of investment. The U.S. dominated, claiming 57% of global VC funding, mainly AI-driven. Meanwhile, early-stage funding slowed.


4. PRIVATE MARKETS: Mostly Metrics has looked into the current state of private markets at EOY 2024 SOY 2025. Much of the same, really - slower deal activity, cautious investors, and a shift toward profitability over growth. Despite the slowdown, AI continues to attract capital.


5. AI: Nice handoff from #3 and #4 above, AI startups have and are rewriting the fundraising playbook. But when can we all expect AI-based economic growth, and how much? This article backs the sentiment by outlining that 2025 should be the year of killer AI apps.


6. AI and JOBS: Bonus content expanding from above - this article has looked at the impact of AI across different tiers of AI and tech sector unemployment. Is it feeling the flow on? IT unemployment rates rose to 5.7% in Jan from 3.9% in Dec (that's a 46.15% change, according to ChatGPT). This same article also shows that job listings for Devs are down -8.5% YoY in Jan


7. GROWTH: Kalungi's Growth Matrix shows how to pinpoint hidden opportunities by plotting segments and adoption stages. It's an excellent four-step process that helps you focus and even comes with a template.


8. FUNDRAISING: What does it take to raise a Series A? How do you break through the $10M ARR barrier and secure growth capital? More Intelligent has a great guide along with must-hit fundraising milestones—from scaling your go-to-market motion to tightening unit economics and KPIs.


9. DRAKE EQUATION: No, Kendrick isn't involved with this; it's for your tech dictionaries. The Drake Equation was originally used to estimate alien civilizations (totally my jam) and calculates success by multiplying probabilities of key factors. This article adapts it to startups—highlighting how market fit, execution, and scalability shape your survival odds.


10. CASE STUDY: Deel's on a growth rocketship right now —70% YoY at $800M ARR (AND profitable). This proves that in SaaS, market share isn't everything when your TAM is massive. SaaStr analyzes Deel's strategy, focusing on category expansion and prioritizing global scale over head-to-head competition, and it looks like they may be able to kickstart Tech IPOs again.


POD OF THE WEEK: This is such a great article covering day-to-day AI use that I used Notebook LLM to turn it into a Podcast. ​

1. SaaS METRIC OF THE WEEK: CAC - in a modern SaaS world that has maturing companies using both Sales Led Growth (SLG) and Product Led Growth (PLG) motions and teams, how do you calculate CAC? The answer is, really, they should be kept separate (see Pod of the Week for more below).


2. PLG vs. SLG: According to the Expansion SaaS Benchmarks report (it's a downloadable PDF), PLG businesses lead the pack, but as stated above, SLG can outperform PLG. According to this article, it's not a "vs." thing—you don't have to choose; both strategies can coexist.


3. BOARD: Mostly Metrics delivers a three-part series on running effective board meetings, covering roles and responsibilities, prepping killer materials, and locking in more discreet updates.


4. MARKETING: We all want to run a high-performing marketing team. MKT1 breaks down that Operating Cadence - how to set the right rhythm for planning, execution, and iteration. From weekly stand-ups to quarterly reviews. This is a super helpful framework to keep all your marketing bits aligned and moving fast.


5. R&D: Research and Development is a major component of any competent Software startup, and often, public R&D incentives (via Grants, Tax breaks, or deductions) align well at the difficult early and growth phases. So, how do you measure if your R&D spend is actually paying off? Mostly Metrics breaks down key efficiency metrics—like R&D as a % of revenue, time-to-market impact, and capitalized vs. expensed costs—to help SaaS leaders optimize innovation investments.


6. CORE 4: Adding onto #5 above is a new framework for your tech dictionaries, Core 4. a pretty powerful (but simple) way to prioritize R&D investments. Instead of spreading resources thin, focus on four core product bets that drive real impact.


7. FACILITATE: A super fun and VERY bookmarkable resource this week. It's a library of tools available to facilitate your next session with people or a team - team building, brainstorming, ice-breakers, check-ins. They are all there!


8. PREDICTIONS: Dave Kellogg's 2025 forecast anticipates continued challenges in the startup ecosystem (yay!), with a stock-standard focus on efficient growth and the rising influence of AI. But he also predicts that LinkedIn may face challenges in maintaining its professional focus amid increasing non-work-related content (why Videos Linkedin? Why?). Additionally, Kellogg discusses the potential for increased division in the U.S. political landscape (check!) and the evolving role of public relations in the era of AI-driven content.


9. MARKETING: eBooks are dead? According to Hubspot, SaaS marketers are pivoting to (free) mini-tools that actually solve problems and add value. Read more about how to get started in that article as well. I guess marketers found the loss leader they've been looking for, and I should start sharing more.


10. CASE STUDY: The GTM Newsletter reveals Outreach's 5-phase GTM framework that drove their growth. This article covers $0-$230m ARR and covers early experiments, scaling tactics, and strategies that cool framework.


POD OF THE WEEK: To marry #1 and #2 above from the SaaS CFO Calculating CAC when you have PLG and SLG motions. ​

1. SaaS METRIC OF THE WEEK:  NRR is one metric that has become a new modern gold standard for SaaS growth (see Pod of the Week below). So much so that ChartMogul has a trends and benchmark report:  industry average NRR ranges from 90% to 100%, and the top-performing SaaS companies achieve NRRs 120%+. It's an action-packed NRR report, though - lots of fantastic insight.


2. EXPANSION: Expanding from above (get it???) - NRR and expansion strategies are pragmatic and capital-efficient growth practices that any good SaaS company needs but are getting harder to come by. Top quartile companies have been hit hard, seeing NRR drop from 119% to 107%. But at scale, more growth is coming from expansion vs. new. The proportion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3% now. In comparison, the proportion of ARR gained from the new business has fallen from 62.0% to 57.9%.


3. TRIGGER TECHNIQUE. This is a new entry for the Tech Dictionaries; The Trigger Technique outlined in this article shows how to leverage customer interviews to learn what "triggers" potential customers' buying decisions. This information helps design more targeted marketing campaigns and boost sales.


4. RETENTION: Can your retention rate be too good? This is an interesting question this week, and Mostly Metrics explores the (surprising to me) downsides of high retention rates—like stifled growth and untapped revenue streams. It's well worth a read just as a reframing exercise.


5. AI part 1: Unless you were living under an AI rock this week, you may have noticed that a new AI Model, DeepSeek, stole the show, showing us all a few things: First mover advantage usually doesn't play out too well, constraints are a ripe spot for innovation (in this case US sanctions on Chips) and that AI commoditization was inevitable. It also ripped deep into the already established AI markets, giving Nvidia the most unwanted crown of the "biggest market loss In history" (about $600B). Yay to everyone's Stock Portfolio!


6. AI part 2: Fast follow to #4 above; Benedict Evans breaks down the real issue with AI models: it's not enough just to be better. As AI commoditization accelerates, differentiation shifts from model capabilities to distribution, UI, and product integration. The AI gold rush isn't just about who builds the best model—it's about who owns the customer (and why first-mover advantage is generally problematic)


7. AI part 3: This is a repost from a newsletter section late last year, but very relevant to #4 and #5 above this week. Every year, Benedict Evans goes on an absolute blinder in PowerPoint, exploring macro and strategic trends in the tech industry. This year's version (across a 90-page slide deck) is all about AI (again, as last year's presentation was "AI, and everything else"). This year's post is about the post-hype investment surge where proven market value hasn't yet been firmly established (by that, I mean investment vs. Value Creation), which Deep Seek may be close to cracking. He wrote this in November and noted back then (which seems to be like 5 AI years ago)  that scale is hard and REALLY expensive, which limits competitiveness (until last week). Slide 59 is the best TL;DR: The future can take a long time - unless US sanctions provide the ripe, constrained environment for quick innovation.


8. FRICTION LOGS: Another addition to your tech dictionary. Software and product design are never truly finished. Friction logs track every pain point in a product experience, helping teams pinpoint issues and refine UX. Want to set one up? Here's a solid guide on how to do it right.


9. VENTURE: The Q4 2024 PitchBook-NVCA Venture Monitor shows a venture market still in limbo. Exit activity remains really weak, with only 3.6% of exits exceeding $500M, but optimism is creeping back for 2025? High dry powder levels, a handful of strong IPOs, and potential rate cuts could shake things up, but valuation expectations are still holding back the IPO market.


10. CASE STUDY: Is growth still good? Ben Thompson tackles the "growth at all costs" dilemma with real-world examples from Meta, Uber, and Tesla. He unpacks how aggressive scaling strategies are now clashing with regulation, shifting market expectations, and economic reality—making sustainable growth the smarter play.


POD OF THE WEEK: From SaaS Stock, a podcast covering what makes a Founder, not a startup. investible (TL;DL) it's founder compatibility, and also companies with an efficiency edge, strong GTM potential and the right metrics (especially NRR - see #1 and #2 above).

​1. SaaS METRIC OF THE WEEK: RULE OF 40: Back in 2021, OpenView observed that "investors have forgotten all about the Rule of 40.", which is a metric to measure if a company is balancing revenue growth and profit margins (a health indicator). For example, a 20% growth rate combined with a 20% profit margin achieves the Rule of 40. In recent years, we have seen the Rule of 40, "back from the dead." This year it's increasingly important but a very tough bar to continually achieve, which has Thibaut Claes ask the intellectual question: Is the Rule of 40 a bullshit Metric?


2. BUDGETS and FINANCE—DEEP DIVE: Because for some of you, the new Financial Year just started, here is a great six-part "fundamentals of startup finance" series from Bessemer: Part 1 (Goldilocks Budgets), Part 2 (Forecasts), Part 3 (Hiring), Part 4 (Growth and Profits), Part 5 (Pricing), and Part 6 (Metrics and benchmarks).


3. PROFITS: Just how profitable should a SaaS Company be? This article from OnlyCFO looks to benchmark profitability data in SaaS and here are the main takeaways: Gross Margins are Crucial: Companies with low gross margins (around 50%) face a hard limit on profitability, even with efficient operations (one of the reasons SaaS is favored); As SaaS companies grow decreases in OpEx as a percentage of revenue should occur, as should Sales and Marketing costs (typically the biggest component of OpEx).


4. AI: McKinsey's latest report on the Gen AI skills revolution dives into how companies are rethinking talent strategies with actionable steps to future-proof your team. The BIG takeaway for all of us is that roles are theoretically being combined as AI compresses the role surface areas enough. Actually, not even theoretically. Look at how Anthropic/Perplexity is merging roles in Product Roles. On top of that observation in the McKinsey Report, the other standout insight is that 75% of leaders plan to re-skill or hire for AI expertise in 2025.


5. CLOUD COSTS: Operations efficiency time. Cloud costs are on the rise, according to this Datadog report. GPU instances now make up 14% of compute spend, and 80% of container costs are being wasted on idle resources. Missed discounts and outdated infrastructure add to the problem—it's time to optimize your Cloud, y'all.


6. UNFAIR ADVANTAGES: Gaurav Vohra's Unfair Advantages Framework is a new addition to your tech dictionaries. It's all about identifying unique, hard-to-replicate strengths: Proprietary data, customer networks, and logged industry experience let you leverage what others can't—it's a startup superpower moat.


7. STRENGTHS AND WEAKNESSES: Expanding on to number 5 above, this article explores how to turn a competitor's strength into your own advantage: Reposition their wins as your opportunities to differentiate, pivot, and outpace - really critical in today's competitive SaaS markets (with some good examples)


8. COMPENSATION: This is the first Founder comp report of the year for you all. This one is from Creandum, whose third edition of their Founder Compensation report, which is fairly global, highlights that Founder salaries have increased across all stages (and significantly for bootstrapped and Pre-Seed companies). BONUS compensation calculator here.


9. TRENDS: Carilu's 2025 Tech Trends lays out how startups can thrive in 2025 (I like the rhyme). Key takeaways (things I often talk about here tbh): AI productization, deeper vertical SaaS adoption, and a continued focus on profitability over growth-at-all-costs. Also predicting that buyers will be back and budgets internally stay tight.


10. CASE STUDY: Here is the start of an incredible 3-part article from Notion covering the challenges faced by (VC-backed) startups towards $100m in revenue. Fun (?) fact: Only 1.2% of us achieve this milestone.


POD OF THE WEEK: From The Practical Founders podcast which provides an intro to growth equity (and how it differs from traditional private equity and venture capital money), with some great examples of how earlier-stage founders leverage this kind of equity for growth.

Going with a marketing-based theme for this year to get everyone's mindset into the growth year ahead


1. SaaS METRIC OF THE WEEK:  Value metric is your business's north star. Similar to the One Metric That Matters in that a Value Metric may be unique to your business or GTM model, these metrics directly align revenue models to customer acquisition models. There are two types of value metrics: functional and outcome-based. Learn more here.


2. MARKETING 1: Are you panicking because you need to quickly plan a 2025 SaaS marketing budget? MKT1 has a detailed guide with practical steps to allocate resources efficiently, maximize ROI, and secure executive buy-in.


3. MARKETING 2. Plan for 2025 - expanding on #2 above. This marketing plan template can help you organize campaigns, track KPIs, and set actionable goals for the year ahead.


4. GROWTH HACKING: Hacks that work edition: Growth hacking isn't dead—it's evolving. Foundation shares some cutting-edge strategies for 2025 to scale in competitive markets. There is some actual gold in there, from viral loops to leveraging micro-influencers.


5. OUTCOME-BASED PRICING: The first new term for your 2025 Tech Dictionaries is outcome-based pricing. It's a pricing strategy tied directly to the value your product delivers to customers, ensuring shared success.


6. DUNNING: Bringing this real term with a weird-ass name back to the newsletter - it's a phrase for involuntary churn (aka bad or failed payments). According to Baremetrics, on average, SaaS and subscription businesses lose around 9% of their MRR due to failed payments. Learn more about a successful dunning (and pre-dunning) process.


7. GTM: Crafting a GTM strategy, especially one that will look rad in the slide deck? This guide details how to create a concise and effective GTM slide, showing investors your market approach, priorities, and scalability at a glance


8. TRIALS: These are proven funnel methods for a solid go-to-market strategy. Check this article on nine ways to optimize your SaaS trial, and then take note from Tomazs Tunguz on how long your customer trial period should be. TL;DR: Longer trials do not convert customers at greater rates. Two weeks, two months, same results.


9. CAMPAIGNS: MKT1's breakdown of effective SaaS campaigns showcases some actionable tactics to boost conversions, refine targeting, and scale this year!


10. CASE STUDY: Check how Customer.io and others leverage upselling and product marketing to boost retention and revenue. There are some great real-world examples (with measurable outcomes).


POD OF THE WEEK: Marketing royalty - Brian Halligan and Dharmesh Shah, two Hubspot co-founders talk about getting the business off the ground and coining "inbound marketing" as a thing.

​1. SaaS METRIC OF THE WEEK - ARR per FTE:  See #3 below for the why: The 2022 KeyBanc report pegs the median at $143K for private SaaS, while public companies double that. High Alpha/OpenView's benchmarks show ranges from $42K to $250K depending on stage, highlighting ARR growth per team as a top KPI. Meritech has a great visual with TriNet, Epxensify, and Shopify being in the top 3.


2. PREDICTIONS 1: Kicking off the new year with a list of predictions of what 2025 may bring in Tech - 25 of them from 25 founders. TL;DR: The AI takeover of SaaS continues, personalization (in real-time) will be here, and vertical SaaS (along with market consolidation) will rise.


3. PREDICTIONS 2: Tomasz Tunguz lays out some bold SaaS predictions for 2025. A big one is that PLG growth will stall as AI-powered tools dominate buyer preferences, GPT-driven products shift GTM strategies (nice!), and efficiency metrics like ARR per FTE take center stage - I already called that one!


4. SPACE TECH: One of my personal favs and 2025 is looking to have a stellar ;-) lineup of space missions: commercial moon landers, Universe mapping, asteroid mining, and new satellite tech.


5. AI WARS: I talked about that quite a lot in 2024, and now we're starting off 2025 with ChatGPT pivoting its business model into being a very-much-for-profit by pivoting into a Tech-Standard Delaware C Corp, OpenAI says it can pursue commercial operations, but the nonprofit will have a "significant interest" in the for-profit corp - not a unique biz model (look to Mozilla > Firefox). OpenAI also said they will need 'more capital than we'd imagined,' which is insane as it raised a $6.6 B round in October.


6. GOOGLE: Google CEO Sundar Pichai has pushed an end-of-year rally for his Google employees and has a pretty high-stakes vision for 2025. The focus is doubling down on AI innovation (Gemini did get better toward the end of 2024 tbh), defending search dominance (pffft), accelerating cloud growth to outpace competitors (GCP currently carries approx 11-12% of the cloud market so has room to move ), and figuring out their Monopoly issues (including possibly being forced to divest Chrome)


7. FOUNDER QUESTIONS: What can drive success for all y'all in the early stages in 2025? Check out these 16 questions you can be prepared to answer around strategy, customer focus, scaling plans, etc.


8. VENTURE: Dealroom has a global venture capital roundup for 2024 and has some cautious optimism for us all in 2025. Yup, we still have some historically low funding volumes, but AI-driven sectors continue to attract capital, and early-stage investments are rebounding - whoop! (and of course, the US still leads the way by an insane amount - >340% than the country in second position - China)


9. PRIVATE EQUITY (a Guide): This is actually a detailed guide for those of you looking at Private Equity this year (after raising Venture), highlighting what makes a transitioning startup attractive to buyout firms: Psst - its ARR growth, capital efficiency, and strong retention.


10. CASE STUDY: It's the Billion Dollar Revenue Club study - which reveals some of the secret sauce of SaaS giants achieving $1B+ ARR. (mastering product-market fit, strategic expansions, and a relentless focus on customer retention.


POD OF THE WEEK: Advocating for people's happiness is part of my day job and mentoring mindset, so it's nice when McKinsey comes out with a podcast about why it's cool to be kind.

Welcome to the last Newsletter of the year. We will be taking a couple of weeks off - have a great Holiday Season, and see y'all in January!


1. SaaS METRIC OF THE WEEK:  Product KPIs: Check out Jason Cohen's playbook for Product KPIs, which maps out how to select KPIs that truly matter. This framework (with a great visualization here) focuses on aligning KPIs with roles, like adoption rates for execs, conversion paths for strategists, or churn for customer-facing teams. Tactical advice includes separating leading indicators (like sign-ups) from lagging ones (like LTV) and ensuring metrics align with business goals for actionability.


2. GO TO MARKET: Go-to-market motions can be quite specific and your GTM motions can impact your marketing strategy and your org chart.  In this article, Robert Kaminski has distilled GTM motions into five types based on a number of use cases. The summary diagram at the bottom is great.


3. ZERO-OPS: A new entry for your tech dictionary, ZeroOps is a set of practices that result in developers focusing solely on coding and creating, with 0% of their time spent on operations or infrastructure.


4. SCALE: The SAAS CFO has a great read and SaaS Metrics Playbook that outlines a Five Pillar framework for scaling confidently. TL;DR Growth (New ARR and Expansion ARR), Retention (GRR and NRR), Margins (gross margin by stream), Financial Profile (balancing growth and profitability), and Sales Efficiency. .https://www.thesaascfo.com/scaling-with-confidence-the-ultimate-saas-metrics-playbook


5. ASYNC CULTURE: Crack open your tech dictionaries again for this one - it's something we do at my day job that we are trying to get better at; I just wasn't aware there was a label for it. With 100% remote and distributed teams across different time zones, management and leadership can get very out of sync. So, this is a great Async playbook for those who need to practice this. It's actually on my wall.


6. FIRST PRINCIPLE THINKING: This phrase has been thrown around a lot in recent years, so do you want to be more like old-school Elon (the one without all the DOGE/Trump drama)? Read here on the concept of First Principles Thinking. In addition, here is a full guide/website.


7. AI CHIPS: Late last month, Amazon announced it's in the AI Chip race - the AI wars are taking on a new layer with the big Public cloud Players, Apple, Broadcom, and governments getting involved.


8. QUANTUM: Google is taking the high road with the AI Chip wars above by focusing on Quantum and has a new quantum chip, Willow, which marks a bonkers leap in compute power. It completed a computation in under five minutes that would have taken the world's fastest supercomputer 10 septillion years (that's 25 Zeros - older than the known universe).


9. GROWTH: Kyle Poyar's gives us "The Best Growth Advice of 2024" with a great end-of-year summary of practical tips. TL;DR takeaways include Jam's 18-month persistence to perfect retention, Rows' email validation boosting conversions, and Folk's white-glove onboarding driving a 4x increase in success rates.


10. CASE STUDY: Adding onto #6 above, here is how First Principle Thinking can be applied IRL - in this example, towards a Product Lead Growth business.


POD OF THE WEEK: Wrapping up 2024 with a Google notebook LLM Podcast version of this Newsletter. ​

​1. ARR GROWTH: The 2024 SaaS Performance Metrics Benchmark report indicates a decline in revenue growth efficiency, with metrics like Blended CAC Ratio and Net Revenue Retention showing downward trends. Read more here.


2. SPEND: Capital Efficiency is back in Vogue! According to Bessemer Venture Partners, here are the benchmarks for B2B SaaS to measure your payback against (full report here). Across all companies, Engineering is consistently the largest department, Customer Success and Product at about 10% and Marketing at only 7%. This slide also has median headcount by stage - which is a great metric to track.


3. GES: Growth Endurance Score is a metric that assesses a company's ability to sustain growth over time. GES measures this efficiency by factoring in both net retention and customer acquisition efficiency. A high GES correlates with long-term business health and resilience. Bessemer has plotted ARR growth lost YoY, and found that the decay is fairly predictable with a Benchmark at 30%. In other words, you should expect next year's growth rate to be 70% of the current year as the stakes get higher.


4. EXPANSION: Acquiring customers is not enough for a SaaS company's sustained long-term success, and expansion strategies are pragmatic and capital-efficient growth practices that any good SaaS company needs but are getting harder to come by. Top quartile companies have been hit hard, seeing NRR drop from 119% to 107%. But at scale, more growth is coming from expansion vs. new. The proportion of ARR gained from expansion has increased from 28.8% in 2020 to 32.3%. In comparison, the proportion of ARR gained from the new business has fallen from 62.0% to 57.9%. NRR is the new normal for B2B SaaS.


5. CHURN: 40% of SaaS businesses with ARR in the $15-30m range have negative churn, and, on average, startups with ARPA over $1k have negative churn. The higher the ARPA, the lower the monthly net MRR churn rate. This is because of lower gross churn and higher expansion revenue at higher ARPAs. This article notes that a monthly churn rate below 5% is healthy, while under 3% is best-in-class


6. RETENTION: To complement #4 and #5 above, retention is deeply related to churn (obviously) but also to expansion. Chartmogul, in their SaaS Growth Trends report, notes that retention strategies are now being viewed as growth strategies. And last year, Companies with best-in-class retention grew at least 1.8x faster than their peers. Check out this other great ChartMogul article that outlines how to calculate, benchmark, and track retention.


7. PRICING: Last year, the median impact on NDR from changing pricing was a +14% increase among expansion-stage software companies. Message heard! 78% of respondents changed pricing and/or packaging. If international expansion is your thing, look at regional friction points: local payment methods (invoices, credit cards, PayPal, and region-specific methods), billing, and tax compliance.


8. SPEND: Capital Efficiency is back in Vogue! According to Bessemer Venture Partners, here are the benchmarks for B2B SaaS to measure your payback against (full report here). Across all companies, Engineering is consistently the largest department, Customer Success and Product at about 10% and Marketing at only 7%. This slide also has median headcount by stage - which is a great metric to track.


9. ARR per FTE: Pulling this from Openview's SaaS Benchmarks Report again; it's the newly popular efficiency metric! For many companies, Annual Recurring Revenue (ARR) per Full-Time Employee (FTE) has emerged as a primary performance indicator, signifying team productivity and doing more with less. There have been significant yearly increases in ARR per FTE across all bands of startups surveyed, and this metric ranges significantly based on stage/revenue ($42k to 250k median based on ARR).


10. BENCHMARKS: And finally, a motherlode of bookmarkable benchmarks with the 2024 BenchmarkIT Report (all B2B SaaS), and it's pretty interactive (or snag the PDF here). Median growth for SaaS companies is 30%, and Net Revenue Retention (NRR) is at 105%. Median Customer Acquisition Cost (CAC) payback is 16 MONTHS! and here is one of my favorites - an average of $.69 per $1 of expansion revenue generated.


POD OF THE WEEK: This is actually a whole Podcast for you to follow called SaaS Talk by Dave "CAC" Kellogg and Ray "Growth" Rike.

1. SaaS METRIC OF THE WEEK:  CAC PAYBACK: The 'payback' period is the nuance of why we measure CAC. How long until we break even? Benchmark-wise, the negative trough is way longer than you think, so take a seat! New B2B customers, on average, take 2 years and 2 months to become profitable. This really highlights a deepening dependency on access to capital to fund a SaaS company's growth through these SaaS Cash Flow troughs. BONUS: Here are last week's CAC Payback benchmarks.


2. FUNDRAISING METRICS: Take a read and a bookmark of this guide to SaaS metrics for fundraising that breaks down the essentials. The big idea here is to build a "data deck" that answers investor questions upfront, focusing on what they perceive as important metrics like MRR, CAC:LTV, and churn patterns to demonstrate profitability and scalability. BONUS: Here is a guide on what should be included in investor reports.


3. CUSTOMER OPERATING SYSTEM: What exactly is the difference between Customer Success and Customer Support? Get started here to understand the nuances, they are both part of the same customer journey spectrum, and Totango posits, in this recent SaaStr Annual presentation, that we need a fresher look at Success and Support that they coin the "Customer Operating System" (Like the presso? Here are the Google Slides deck).


4. PRICING: The title of this article says it all - 5 SaaS pricing mistakes you're probably making. Stop lowballing! Pick the right metric, make purchasing easy, optimize upsells, and keep pricing dynamic.


5. EQUITY: This is a very bookmarkable series from Femstreet that covers the startup founder's guide to equity. Don't worry about Part 1 - it's a very basic primer. The good stuff starts in Part 2 and covers the different types of equity at a startup (founder, investor, vesting, liquidation, pro-rata, etc etc.), and Part 3 - covering cap tables and things you can do if they are messy.


6. VENTURE-STRAPPED: I googled this term already, and it's unique! It's my term for your tech dictionaries for a hybrid startup that is a mash-up of the old debate of bootstrapped vs. VC financing and applies to startups that raise only once. This anecdotally seems a more common practice in these new market conditions (including Klaviyo and Zapier). Jason Lemkin notes this new one-and-done third way.


7. AI INVESTMENTS: Menlo Ventures' new report highlights a significant shift in enterprise AI adoption. AI spending is now at approx $13.8 billion, which is up 6x from 2023. 60% of these investments are from innovation budgets, while 40% are integrated into permanent allocations. Enterprises are exploring an average of TEN AI use cases, with 24% prioritized for near-term implementation.


8. VERTICAL SAAS: A lot of Big Tech is under threat from narrowly focused SaaS companies taking market share in niche areas and building massive businesses. Vertical SaaS isn't new (the difference between vertical and horizontal SaaS here), but look at how these vertical SaaS companies are taking market share from those cloud giants and how AI and Vertical SaaS are the outliers to achieving solid growth in this current market.


9. FOUNDER VESTING: This is a great one for all you founders. Four-year vesting schedules are standard for many founders (and they are still vesting during early funding stages). But with the time between stages now being longer, after this traditional 4-year phase, Investors are now pushing for re-vesting to ensure long-term commitment and minimize "dead equity."


10. CASE STUDY: Everyone loves a good old Pivot story - expanding on #6 above, here are 5: The Hidden Backstory of 5 Startup Pivots That Grew to $43B including Lyft and Discord and also a "definitive" Pivot list from Lenny of Lennys Newsletter (see below for more)


POD OF THE WEEK: Expanding on #8 above, why vertical SaaS is booming, and how to get 110% NRR from SMBs, with Jason Lemkin and the CEO of Mangomint.

1. SaaS METRIC OF THE WEEK:  Consumption-based LTV. If you have a consumption/usage-based model (with other revenue sources sprinkled in), then, like me, you probably have revenue that is not quite consistent month on month.  Variable revenue is now a big thing in SaaS, which is evolving due to AI (see last week's newsletter for more on that - #3). Check out How to calculate LTV with variable revenue customers from the SaaS CFO (comes with a template!).  An analysis of usage-based pricing from Bessemer Ventures is here, to help think about your pricing models.


2. VENTURE: DPI (Distributed to Paid-In Capital) is a measure of the total capital that a fund has returned to its investors (to date), and when looking at their portfolio companies, VCs balance art and science in their exit strategies by selectively selling to secure early DPI gains without losing out on long-term growth potential, while being mindful of the impact on fund performance and LP expectations.


3. GOVERNANCE: Last week's Board post was popular, so here is Mark Suster's series on his Medium Blog covering StartUp Boards. A follow-up article shows a board structure based on stage. He also provides a blog post AND a 43-slide deck.


4. OPEN CLOUD: Battery Ventures' 2024 OpenCloud report reveals enterprises are moving AI projects from experimentation to production, but the gaps between expectations and reality are very much still there (fewer than 30% of AI projects are in prod). But smelling opportunity, Cloud providers are ramping up AI infrastructure to capture a share of the estimated $2T incremental revenue opportunity by 2030; AI's having a pretty major impact on everything cloud. As I've mentioned before - the AI wars are here. One interesting side note slide (slide 15) is that valuations are up.


5. DEVS AI: Accel's 2024 Euroscape report highlights the growing adoption of AI use in software development. 84% of those surveyed (Accel portfolio companies) leverage AI tools like coding assistants to enhance developer productivity. Developers use AI to debug, generate boilerplate code, learn new skills, and drive faster software delivery cycles. GenAI is also reshaping enterprise applications (but only 30% of the time - see above), enabling hyper-personalized customer experiences, and transforming core business functions with AI agents.


6. PURCHASING: Lots of reports this week - Vendr's Q2 2024 SaaS Trends Report reveals a pretty big shift in the software procurement landscape. The big one is that over half (52%) of sellers on their SaaS Leaderboard are new. Despite a 37% decrease in purchase volume for the top 25 categories, the emergence of six new categories suggests that spending is becoming more distributed. Identity and Access Management, Project Management, and Cybersecurity (with Crowdstrike still there for now) continue their leads. And BI is seeing a decrease.


7. AI JOBS: Dragging this up from last year as I had a deeper discussion over the weekend with people convinced that AI will cause employment. Marc Andreessen makes the case in March 2023 that it won't.


8. VENTURE: Scott Hartley highlights the concept of VC "time dislocations," where the current market challenges we are experiencing (like fewer IPOs, lower valuations, and long time between rounds) create opportunities. Savvy investors can secure discounted stakes now, setting the stage for outsized returns when (fingers crossed) markets recover. This may partly explain the slide in #4 above (but probably not as much as Tech hype)


9. MOATS: Moats are one of the best ways to provide a competitive advantage for your business and moats come in all kinds of different flavors (such as speed, Brand, or growth). But here is a great one that conceptually covers B2B and B2C: EMOTION!  When it comes to B2B, this post lists some popular and effective ways companies create moats for their products (see more below).


10. CASE STUDY: Complimenting #9 and Pod of the Week (below) CB Insights reports on Moats IRL with 29 examples of enduring moats (from Amazon and Tesla to Starbucks and Coinbase). Key strategies include leveraging network effects, scaling through cost advantages, and capitalizing on brand loyalty.


POD OF THE WEEK: Expanding on numbers 9 and 10 above, here is Jason Lemkin's pod/vid on Top 10 Moats in SaaS.

​1. SaaS METRIC OF THE WEEK:  Hitting another motherlode this week with this highly bookmarkable Guide to SaaS Metrics from equals.com, which covers all the greatest hits and more (ARPA, LTV:CAC, Burn Multiples, etc.)


2. FINANCIAL FORECAST: Your 2025 new financial year is just around the corner! Now is always the second-best time to start (the first was two months ago). This is a great article with a complimentary  Excel download from The SaaS CFO—it's a SaaS Financial Plan for Startups (and also works for most SMBs). It also comes with a handy complimentary video tutorial for the worksheet.


3. PRICING: The traditional SaaS model is evolving due to AI. With AI integration, companies are shifting from traditional ARR access to performance-based pricing. For instance, Intercom now charges $0.99 per AI-resolved support ticket, and Salesforce's Agentforce bills $2 per conversation (but check this cool list). This approach aligns well with discussions I had last week around costs and delivered value. It also offers customers a lower TCO for AI features and products. VBP (Value-Based Pricing) will be showing up on the block a bunch in 2025.


4. SEED: Last week's post on Seed funding was surprisingly popular, so for all of you at the earlier stages, check out this neat guide to Seed funding from Carta. It covers essentials like raising amounts ($500K to $5M), investor types (angels, accelerators, VCs), and key funding structures (SAFEs, convertible notes).


5. DEVS and AI. Early this year, after reading the Stackoverflow Dev Survey for 2023, I noted that Stackoverflow's main contribution to developers (Code search+copy+paste) looks to be under threat as the majority of Devs are using GenAI in their work, so check out this chart that I found on Reddit last week; Stackoverflow traffic looks to have fallen off a cliff. ChatGPT doesn't Gatekeep or berate, and people prefer that. Anyhow - the new 2024 version of that report has dropped. 62% of developers now incorporate AI tools into their workflows (with 81% citing productivity gains as the primary benefit). Trust in AI outputs remains divided, which is fair. A much better insight is that 70% of professional developers do not view AI as a threat to their jobs, indicating a general optimism about AI and dev.


6. MARKETING: Here are "5 B2B Marketing Trends for 2024-25". This article covers some essentials for AI-leveraged modern marketing: AI-powered personalization, a strong focus on Account-Based Marketing, and a shift toward quality over quantity in content creation.


7. VENTURE: How do investors value startups and navigate ownership? Check this article on VC Math with some TL;DR points that include understanding valuations (pre- and post-money), the impacts of dilution, and popular valuation methods (like the Dilution and Venture Capital methods). Founders also need to get familiar with convertible instruments like SAFEs and understand how market conditions can seriously impact valuations and investor appetite.


8. AI: Check out this Allied Advisers PDF report covering advancements and challenges in AI. The big one is that by 2030, AI's contribution to the global economy is projected to reach $19.9 trillion. Such a big forecast TAM (3.5% of global GDP) and AI adoption in corporate is now 65%, up from 33% in 2023. The bigger challenges (briefly mentioned in last week's newsletter) are the high infrastructure cost, training AI models, and managing data quality, which present significant challenges as organizations navigate these evolving technologies.


9. BOARD: Want to be more effective at startup board meetings? Here is a list of some top tricks. Try starting each meeting by reiterating the company's mission and vision for context in discussions. The CEO's "State of the Union" should offer an open assessment of the company's current status (key successes and areas for improvement). Prioritizing product discussions over financial metrics to focus on long-term strategy is a great one, as is Go-to-market updates should concentrate on strategic objectives rather than tactical details.


10. CASE STUDY: CJ Gustafson has a good read covering three stories of big tech startup names (Asana, Fastly, and Confluent) that are still trading below their IPO prices for reasons.


POD OF THE WEEK: What really matters in SaaS in 2025 with Jason Lemkin and Dave Kellogg, where they delve into five key topics in SaaS and cloud for 2025, discussing the future of AI in B2B, strategic pricing changes, the impact of moving customer success to sales, and the state of private equity deals.

1. SaaS METRIC OF THE WEEK: EXPANSION: Net Dollar Retention is getting harder to come by but never harder than new customer acquisition efforts. Top-quartile companies have been hit hard, seeing NRR drop from 119% to 107%. But at scale, more growth is from Expansion vs. New.


2. GO TO MARKET 1: Tomasz Tunguz from Theory Ventures shares key insights on the evolving GTM landscape for SaaS. This is a great read full of good nuggets. TL;DR: 14-day trials convert best for free trials; Assisted sales (for example, follow-up from sales reps on trial leads) can boost conversion rates by nearly 4x, and Payback Periods and Quotas are both up in parallel (and AI isn't impacting conversion rate or ARR growth). The big takeaway is that to maximize SaaS growth focusing on enterprise NDR (Net Dollar Retention) targets of 120% is, like, the best idea ever.


3. GO TO MARKET 2: ICONIQ has a GTM report out for 2024, showing that ARR growth rates have slowed, particularly for companies under $200M ARR. Sales productivity is also down for most companies, though those over $200M ARR saw gains. 54% of companies use PLG (up from 40% in 2023). Partnerships drive significant revenue for companies over $100M ARR, with three-year contracts becoming standard.


4. OUTBOUND vs INBOUND: How you handle an inbound lead vs an outbound lead is quite different. Check this article from Jack Jorgovan on how Outbound leads differ (and how to close them). The team at predictable revenue have been running over 50 outbound sales experiments to find out what works best (and what doesn't.). Watch the whole series on YouTube. SaaS Weekly also has a guide on automating outbound emails by leveraging intent signals to drive better-targeted campaigns


5. PRODUCTIVITY: Tomasz Tunguz makes a second appliance this week, highlighting AI's accelerating impact on business. As companies increasingly allocate budgets to AI (41% from new funding), those that best embrace AI's chaotic nature and measure outcomes will lead the next wave—and that may already be priced into public companies.


6. PMF: Product-Market Fit is a spectrum and a gradual one, moving through stages of demand, customer satisfaction, and efficiency. Success means balancing high customer needs with scalable growth. Check out this dynamic scale - it's pretty interesting as it enables measures across multiple dimensions.


7. CAPITAL 1: Because we are in a weird time of Venture Capital (and the length between rounds is now much longer than a couple of years ago), we should all know the round-between-round differences: bridge rounds, extension rounds, and in-between rounds.


8. CAPITAL 2 (seed): AngelList data shows that, on average, seed-stage companies have about 18 months to secure a Series A. Because if a startup isn't marked up by then, it's likely to stall.


9. GPU WARS: Earlier this year, I referenced the start of the "AI Wars" for public cloud. But check this article from Tomasz Tunguz; we're going deeper into the GPU Wars. AWS's AI business is growing at triple-digit percentages YoY. But they are also saying that growth is limited by GPUs. Amazon and Google are also developing their own chips.


10. CASE STUDY: How many hours should founders work? Check out this analysis of YCombinator Founders. It's a 3-part series, but a good TL;DR is that pre-product-market fit founders work the most hours, with time spent decreasing as companies grow and gain traction. For many of us, it's a good read for a) Validation and b) Tips on managing work and time.


POD OF THE WEEK: There is way too much really valuable info in #2 above, and Tomasz Tunguz presented all of this in a great SaaStr presentation earlier this year, which you can watch here. ​

1. SaaS METRIC OF THE WEEK:  ARR - I have a whole book for you this week (an "Ultimate Guide," in fact) on ARR. Covers everything you need to know to define, build, and report on ARR from scratch based on experiences at Intercom, Atlassian, and Stripe. Bessemer Ventures also claims to have a founder's roadmap to $100 million ARR.


2. WEBSITE: Quick Question: "Do you think your Website is stressing out visitors"? Quick Answer: Probably. Read further on the WJTBD (Web Jobs to be Done) or TL;DR - remove the noise and focus on the jobs you need the website to do.


3. BENCHMARKS: Bookmark alert! I've got a bit of a benchmarks goldmine this week with the 2024 BenchmarkIT Report (all B2B SaaS), and it's pretty interactive (or snag the PDF here). Median growth for SaaS companies is 30%, and Net Revenue Retention (NRR) is at 105%. Median Customer Acquisition Cost (CAC) payback is 16 months! And here is one of my favorites—an average of $.69 per $1 of expansion revenue generated.


4. DEX: Crack open your tech dictionaries for another acronym-based entry: Digital Employee Experience.  This is all about your internal users - your team. In a surprise to mostly no one, 95% of employees say IT issues decrease workplace productivity and morale - which is a bigger deal AND a bigger challenge to solve now that digital tools are more mission-critical in today's WFH/Hybrid/Remote work environments.


5. USER LED GROWTH: ULG is when existing users become your biggest advocates, driving leads straight into your funnel. It's not for every B2B SaaS company, but when done right, it can build a flywheel that slashes your CAC and ramp times. A classic example is Dropbox's referral program, where users earned extra storage by inviting others—a powerful way to turn customers into evangelists one GB at a time.


6. CASH MANAGEMENT: Part 1 of a 3-part Guide to Cash Management for Startups highlights bank account strategies at different Stages. The startup phase needs basic checking and savings accounts for operational expenses and emergencies, maintaining liquidity, managing cash flow, and keeping financial controls strict. It prioritizes simplicity and security in banking structures.


7. FORECASTING: We are all pretty terrible at it, and for those of you running calendar financial years, you don't have much left to be less terrible at it. Time to get started with a Finances Forecasting 101 article from Bessemer; this article even has a template for you.


8. FINANCIAL HYPOTHESIS: To add to the above, again from Bessemer, Financial models can be pretty overwhelming for many early-stage operators, so the Financial Hypothesis simplifies things. This model focuses on 3-5 key inputs crucial to reaching profitability or securing the next funding round (scroll down to the number 2 listing on this page).


9. PRODUCTS: Balancing the needs of existing vs. new customers is a hard product act to balance, and that push and pull is nicely described in this article, which includes some great analogies and tips on influencing the product roadmap. It also includes an article from First Round Review with a list of things to avoid when building highly technical products.


10. CASE STUDY: PRICING: The SaaS pricing landscape is shifting, with many companies adjusting strategies (73% increased prices). Freemium models remain key, while AI-driven features push usage-based pricing models higher.


POD OF THE WEEK: The Bessemer Venture Partners session at SaaStr 2024, covering the impacts of AI on the State of the Cloud, is a great watch! They have carved $1B of their fund into AI companies.