According to Ardas, analysts believe the SaaS market will grow at 12% per year. By the end of this year, the volume of investments will reach $ 141 billion, so here is a rundown of what big things may be in store for tech and Saas in 2022.​

1. PRODUCT: The SaaS world is becoming a lot more democratized as it's more pervasive, accessible thanks to no-code platforms, and more developers are coming online all the time. This results in higher expectations and that a great product experience is a must-have, not a nice to have, and that there is a need to provide personalized experiences to drive value. Don't take my word for it, though - that was just a TL;DR of the Product Trends and Resolutions report for 2022 – from a bunch of top Product Experts.
2. CRYPTO: What do we even call Crypto anymore? Web3 makes sense, and the tech itself has been and still is in a period of ever-increasing complexity (and sophistication). 2022 will absolutely be more distributed, but there is still more infrastructure to build. Tomasz Tunguz has some predictions of which Web3 sectors will be top this year. A significant movement will be National, with some countries declaring that they have adopted <insert crypto coin here> as legal tender.
3. THE METAVERSE: According to many of my friend's Christmas goodies this year, we have some seriously quality VR devices now, and it's just getting started. Expanding on above - as we figure out how Web3 plumbing will work - one can hope the same for VR and AR. Some of it is undoubtedly cool - but where is the value? NFT's are creeping in here, but Bill Gates predicts something interesting: most virtual meetings will move from 2D camera image grids … to the metaverse, a 3D space with digital avatars.
4. SECURITY: I think we can all agree that security is one of the most essential priorities for 2022 and a big problem. Forbes predicts some serious supply-chain hacks, continued public cloud breaches, and an increase in ransomware. 
5. QUANTUM: Back in 2018, IBM and Intel announced impressive advances in Quantum Computing chips. IBM even had a Quantum Computer on display at CES (which was a thing of beauty). But in 2022, things are really heating up for Quantum, with Google, Microsoft, Amazon, and IBM, and Intel establishing themselves in the quantum space through product launches, R&D projects, investments, partnerships, and more. At the time of publishing for this report from CB Insights, $921m of capital had been deployed into Quantum in 2021 (compared to $411m in 2020 and $470 in 2019)
6. CONTENT MARKETING: Content marketing helps you attract, engage, convert, and retain customers you may not reach otherwise, and only 10% of marketers don't use content marketing, so for all you marketers out there, here is a list of Content Marketing statistics and benchmarks for 2022.
7. TOMASZ TUNGUZ: For the last few years, Tomasz Tunguz from Redpoint Ventures has made a list of predictions and scored last year's predictions. Here are this year's top 5 predictions with all the usual suspects: Web3, Data, and Machine Learning topping the list. A great one for all you non-Silicon Valley readers is his post-pandemic prediction of the spread of innovation and funding outside of the Valley.
8. JOBS: Backing up #7 above, this article from Dice (backed up by an analysis of postings on their site) recognizes that organizations everywhere see AI as increasingly vital to their long-term strategies, and they're looking for recruiting Devs with the right mix of AI and machine-learning skills and backing this up, the IDC predicts that spending on AI will increase 24.5% annually to $204 billion by 2025
9. FORRESTER: Forrester publishes a predictions paper every year - here is their 2022 version. Top of their list: higher consumer expectations of digital experiences; "always-on" digital engagement strategy for B2B marketers, one in three businesses implementing a hybrid work model will fail!
10. SOCIAL MEDIA: HubSpot and Talkwalker deliver the Social Media Trends Report for 2022. Viewing TikTok as the platform-du-jour, advertising in a post-cookie apocalyptic world, and the rise of Omni-channel engagement. 

Happy New Year and welcome to the Benchmark Holiday special! This is a compilation of useful benchmark data reported from across the webs in 2021 for you to put to good use.

1. SKOK: David Skok is a legend in the SaaS world, and I have written about his work extensively in the past and convinced him to speak at an event. His 2021 annual report in partnership with KBCM Technology Group (formerly Pacific Crest Securities) is here - absolutely comprehensive benchmarks for any SaaS business. 
2. EXPANSION 1. Acquiring customers is not enough for SaaS companies to sustain long-term success. Expansion strategies are pragmatic growth practices that any good SaaS company needs to grasp, as 36% of new ARR bookings are attributable to cross-sell/up-sell activities. Larger companies use this strategy more heavily than their smaller counterparts (2x more). This is likely due to not being so reliant on new acquisition focused as the business matures. Here is what good expansion looks like. 
3. EXPANSION 2: Expansion is such a big deal that OpenView Partners have gone to town to benchmark this metric with an extensive Expansion SaaS Benchmarks report (it's a downloadable PDF). Product Led Growth businesses lead the pack!
4. RETENTION: To compliment #2 and #3 above, retention is deeply related to expansion regarding sustainable growth. Here is what reasonable retention goals should be benchmarked against (another downloadable PDF report) and how to strategically optimize for this metric. Churn is still a problem overall. The YoY trend of a dollar churn decreased from 13.9% (20% of which was attributed to Covid) in 2020 back to 12.6%. This is back to similar 2019 levels (which was 12.5%).
5. PRODUCT LED GROWTH: As mentioned in #3 above (and from me from time to time in this newsletter), Product Led Growth (PLG) businesses lead the pack when it comes to expansion. PLG companies also deserve their own benchmark reports - so I got you covered with this one where you can benchmark 250+ PLG companies.
6. CAC: This one needs nuance, so the report breaks CAC into 3 main categories: blended, new, and up-sell/expansion. The median blended CAC comes at $1.20 for every $1 of revenue realized which sits slap bang between 2019 ($1.10) and 2020 ($1.32). New Customer CAC is up against 2019 ($1.34) and 2020 ( $1.60) - SaaS is increasingly competitive. Upsell/cross-sell is still cheap at $0.63 per $1 of ARR earned.
7. GROWTH: At the beginning of 2020, 39% growth was expected in January. By the end of June, it was reduced to 20% (in 2019, this was 36%). In 2021 the organic ARR growth levels were back up to a healthier 31% as the COVID disruptions start to settle, and overall growth forecasts are back to the same 36% seen in 2019.
8. MARKETING AND SALES: Hubspot continually benchmarks Pandemic-times data IRL for core business metrics like website traffic, email send and open rates, sales engagements, close rates, and more (aggregated from their global customer base of over 70,000 companies). It's a handy tool as a benchmark to measure your business against. Explore all the benchmark data here. They also took this a step further in 2021 by launching their (not another) State of Marketing Report for 2021.
9. WEB VITALS: Optimizing a User Experience is key to the long-term success of any service or product. Google is all over this and launched Web Vitals a few years back, a program that offers developers guidance about user experience. It's benchmarking very Google-based metrics: loading, interactivity, and visual stability.
10. SPEND: The average SaaS company burns $52m to get to $100m in ARR, and it takes under 9 years (8.7 to be exact). Figuring out how to optimize marketing spend of this burn in relation to growth rate is a crucial question, and this study doesn't show the benchmarks marketers want to hear: While the median sales and marketing spend maybe 36% of revenue, to really ramp ARR growth, you gotta blow a lot more. Percentage of revenue in isn't much more than percentage growth spend out. 

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POD OF THE WEEK: Of course, it's going to be How to Succeed at SaaS with David Skok.

I'm making this last newsletter of the year (taking a break next week) a customer-focused edition - happy holidays and happy new year y'all, thanks for all of your eye-balls and clicks this year.​

1. SaaS METRIC OF THE WEEK: CLV (or sometimes LTV): The C stands for CUSTOMER, and this metric represents the average revenue that a customer generates (LifeTime Value) before they churn. ChartMogul has a great online calculator here. Go to advanced mode, though, as this calculator references the traditional formula and the David Skok version (the advanced one is viewed as more realistic).
2. CUSTOMER EXPERIENCE: Customer loyalty drives the success of a business, and the customer experience (CX) drives loyalty. Zen Desk has published its CX Trends Report for 2021. It's full of great nuggets: support requests are up 20% on average since the start of the pandemic, 75% of customers feel loyal to a particular brand or company (that delivers good CX), and 65% of customers want to buy from companies that offer quick and easy online transactions.
3. CUSTOMER TESTIMONIALS: People trust people over brands when it comes to trust. Chart Mogul has posted an 'Ultimate' Guide to Using Customer Testimonials to Boost Sales, noting that a generic and insincere endorsement is just as helpful as not using anything. It's also possible to take it a step further by leveraging those frothiest customers into a referral channel. Here is a playbook from SaaStr on how to make that happen.
4. CUSTOMER CASE STUDIES: Latching onto #3 above. Going beyond testimonials, case studies are super valuable at the early stages as a company needs to demonstrate its credibility, the business value, and the technical context of the product. Heavy Bit has a great guide on crafting that first customer case study, and Uplift provides six best practices to be used in your story.
5. CUSTOMER SERVICE: In this current age of the customer, enhanced by COVID, SaaSx makes the profound argument that Customer Success IS the product. Want to start building out that product? Check the HubSpot guide on getting started with your customer team.
6. CUSTOMER SEGMENTATION: To calculate the cost of a Customer Service Manager, it's best to segment customers out to understand the efforts required. Chartmogul has this tremendous visual, and once again, Gainsight takes a look at how to Benchmark efforts over-segmentation. Here is what they found. The median amount of ARR that an Enterprise CSM can manage is between $2M and $5M, and The median amount of customers an Enterprise CSM manages is 10-50 - these revenue figures drop with mid and SMB customer segments and increase fairly dramatically with the number of customers per CSM.
7. CUSTOMER PERSONAS: SaaS B2B Marketing is a pretty unique beast - and getting into the minds of an idealized customer often requires going through the practice of creating personas - you should try it - it will def make you a better SaaS marketer. For most SaaS companies creating multiple personas is often a strategic necessity. So here is an additional differentiator (and what the difference is compared to a persona) of an ideal customer profile and how to (with templates!)
8. CUSTOMER DATA: Customer data management is a practice, not a technology. I love that simple message. Gluconic gives the crib notes/5-steps in this article about developing a strategy to optimize and improve customer experience using good data management practices.
9. CUSTOMER ONBOARDING: Onboarding success is often de-prioritized with scrappy fast-growing business but giving customers all the tools they need to succeed with your product is the best way to ensure that they stick around. Profitwell reviews the importance of good SaaS onboarding and discusses steps to create an awesome program. Userpilot also has a great tactical complimentary post on SaaS companies' best customer onboarding software options.
10. CUSTOMER DELIGHT AUDIT. It's the Age of the Customer, you know, so this needs to be a thing - here is an in-depth post from CopyHackers on how to make this kind of Audit happen, and here is a case study on how three big Tech companies (GitLab, HubSpot, and Zoom) make delight happen. Also, here is a Case Study on building a customer-centric B2B organization from McKinsey.

POD OF THE WEEK: WFH life for Customer Success teams - the CEO of ChurnZero has a perspective on how to build this function remotely.

1. SaaS METRIC OF THE WEEK: Retention. A blended retention/acquisition strategy is critical for the long-term sustainability of a SaaS business, but what are the core retention metrics to monitor? Take a read here of how to measure and improve the ones on the list.
2. QUOTA 1/2: Hands up if you're forecasting or re-forecasting for 2022! Compensating SaaS Sales Reps is complicated and expensive. This blog post from Kyle Racki of Proposify has a pretty comprehensive guide on setting quotas and commissions. But here is a quick shortcut to make it easy for all you Account Executives: The average annual quota in this report from David Skok and Co is $770K in ACV, and on average, the quota was  5.3X OTE. An expanded top10inTech teardown of that report (which admittedly is from 2017, so starting to get a bit long in the tooth) can be found here.
3. QUOTA 2/2: Thought-provoking article: Your Sales Team has a Sales Quota. Your Marketing team has to have a quota too - as they are also part of your revenue team. Getting both sales and marketing teams aligned beyond quota is a fundamental trick, and Tomasz Tunguz has a quick diagnostic to determine if your sales and marketing teams are working well together.
4. FORECASTS: Outside of setting quotas, running a SaaS business relies heavily on cash flow - so it is imperative to forecast future revenue to avoid a cash crunch when trying to scale. So check this article covering Sales Forecasts and Pipeline Reviews: Why and How from a cash perspective.
5. PITCH: The days of mandatory in-person pitch meetings to a VC are mostly behind us (at least for the foreseeable future). Pitching over Zoom is where we are at. Before you focus on getting the perfect lighting, though - check these 16 rookie errors founders make pitching to VCs from Jason Lemkin and read here on how you will be Zoom-judged by the VCs you are pitching to.
6. OPTIONS and ESOP: Stock options are necessary for hiring and retaining the best talent in this hyper-competitive Startup Land. So how can companies build an effective option plan? During a call this week, I was referred to this site earlier this week that has compiled a set of benchmark data, comprising over 20,000 option grants from more than 1,650 startups across the US and Europe sorted by Seed or Venture stage.
7. SOCIAL MEDIA: 2021 was a bit bonkers (ask Google), especially in the Social Media world. So how will 2022 fare? Take a read of this report from HubSpot and Talkwalker for 2022 Social Media Trends - they have a pretty good Top 10 list.
8. MULTIPLES: Public SaaS and Tech companies suffered a beat down earlier this month. Did it have any significant impact on multiples of their revenue? Overall Stats: Median: 12.3x, Top 5 Median: 49.0x, 3 Month Trailing Average: 15.5x, 1 Year Trailing Average: 16.0x - that's a measurable downturn but keep in mind these numbers are still 86% above pre-covid highs.
9. UX: Optimizing a User Experience is critical to the long-term success of any service or product. Google has Web Vitals, a program that offers developers guidance about best practice benchmarks on user experience. First, Round Capital has a DEEEEEP dive/crash Course for Founders on the principles of UX Research from people at Zoom, Zapier, and Dropbox.
10. CASE STUDY: Category Creation is the Holy Grail - we all want to be up, and to the right is one of those Gartner/Forrester Quadrant reports. So here is how Neo4 did it. Here is another story from Gett and a warts-and-all case story about how OKTA made their category creation happen via Bessemer Venture Partners.

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POD OF THE WEEK: Financial Reporting for Startups is something every founder has to up-skill at - this webinar (replay) covers operational and financial forecasts. Answering all those hairy questions - such as how do I forecast ARR when in startup mode?

Nerd Alert: Yeeeeeeeee! It's my fav post of the year, and the most challenging part is choosing only 10 highlights, so I'm taking it to 11. My buddy David Skok and KeyBanc Technology Group are back again for their (12th) annual SaaS survey for Private Markets (download the PDF here). This report includes responses from senior executives at more than 350 companies, and we are seeing a rebound in growth as companies recover from the economic disruptions caused by COVID-19. Prior versions can be read here and here.​

1. PRICING: Only 41% of SaaS Companies priced by seat in 2021 (You may have seen my "occasional" posts on Consumption-Based pricing from time to time in this newsletter). Interestingly, this survey now includes varying segments beyond B2B and B2C - such as B2d (D for Developers) and API companies. Which reflects the evolving tech/SaaS landscape.
2. VALUATIONS: New metric measured for this year - The median enterprise value of companies surveyed sits at 8.4x ARR (at the time of the liquidity event). But there is quite a bit of variation and a strong relationship between valuations and top-line growth.
3. SALES: The primary mode of Sales and Marketing efforts remains Field Sales based in 2021 at 55% for companies with more than $5 ARR, with Inside Sales taking the second-largest chunk (29%). But the complimentary slide to this is the distribution of method by deal size. Anything greater than $250k is still Field Sales - but I'm getting no data yet on how many of those "field sales" are now remote/Zoom-led. Here is the expected sales cycle length based on ACV.
4. MARKETING SPEND: Figuring out how to optimize marketing spend and growth rate is a crucial question, and this study doesn't show the benchmarks marketers want to hear: While the median sales and marketing spend maybe 36% of revenue, to really ramp ARR growth, you gotta blow a lot more, - the percentage of revenue in isn't much more than percentage growth spend out. 
5. GROWTH: Last year, 39% growth was expected in January. By the end of June, it was reduced to 20%, and in 2019 was 36%. Those 2019 growth levels are back up to a healthier 31% as the COVID disruptions start to settle, and forecasts are back to the same 36% seen in 2019.
6. CAC: This one needs nuance, so the report has broken it into blended, new, and up-sell/expansion. The median blended CAC comes at $1.20 for every $1 of revenue realized, which sits slap bang in between 2019 ($1.10) and 2020 ($1.32). New Customer CAC is up against 2019 ($1.34) and 2020 ( $1.60) - SaaS is increasingly competitive. Upsell/cross-sell still sitting in cheap at $0.63 per $1 of ARR earned.
7. CAC PAYBACK: CAC is also a measure of cash profitability per customer - and this negative trough is long! According to this survey, new customers, on average, take 2 years and 2 months to become profitable. This really highlights what will be a deepening dependency on Capital to fuel SaaS companies' growth.
8. ANNUAL DISCOUNT: If like me, you are part of the great SaaS Ponzi Scheme, it may come as no surprise to you that annual contracts are discounted. But how much? 10% is median - and the range is tighter than I thought - 6%-14%.
9. CROSS SELL/UPSELL: This is pretty much the same as last year: 36% of new ARR bookings are attributable to cross-sell/up-sell activities. Larger companies use this strategy more heavily than their smaller counterparts (2x more). This is likely due to not being so reliant on new acquisition focused as the business matures.
10. CHURN: It's still a problem, folks. The report for this year recognizes a dollar churn decrease from 13.9% in 2020 (20% of which was attributed to Covid) back to 12.6%. This is back to similar levels from 2019 (12.5%).
11. BURN: The average SaaS company burns $52m to get to $100m in ARR, and it takes under 9 years (8.7 to be exact).

1. SaaS METRIC OF THE WEEK: USER ADOPTION - measuring which new users could turn into paying customers (and which are going to drift away). Everything you need to know is in this article - it’s a comprehensive and very deep dive (because these metrics differ between businesses and between cohorts of users).
2. SDR SALES: Chorus.ai has built a great report of what high-performing outbound sales teams are doing to close deals (this is an analysis of over five million sales calls!). You can add in the kind of business you are (SMB, Mid, Enterprise) on this page to see how you measure up. Key nuggets: An SDR dials, on average, 106 people to schedule just one meeting and the typical win rate of a sales qualified lead (SQL) is 19%.
3. BUSINESS SPEED: First Round Capital always has a good perspective on speed at the business level. This is because top tech companies and are market differentiators in part because they operate at a cadence that is faster than most. It’s all about execution and heartbeat, which requires a fierce focus and prioritization. This kind of adaptability is something we all need after last year.
4. VENTURE CAPITAL: Significant news came in late last week from Sequoia Capital (specifically its U.S. and Europe business). In this blog past Sequoia Cap have announced a massive change to its business model by ending the traditional 10-year fund cycle and setting up a single permanent fund called the "Sequoia Fund" that will contain other funds in it and also will become a registered investment advisor (RIA) which will give them access to different asset classes such as crypto and seed investments. This will also give LPs the flexibility to pull their money out anytime (vs. traditionally waiting for distributions) and proceeds from the various sub-funds will return directly into the overarching Sequoia Fund.
5. MARKETING SPEED: Guess what? Your marketing team is slow!. Take a read of this article on frameworks to make your marketers speed up. Tech companies are market differentiators in part because they operate at a cadence that is faster than most. Speed is a competitive advantage that your marketing teams need to leverage!
6. E-COMMERCE: Shopping from home and a massive move to online shopping behavior has been one of the most significant shifts due to the Pandemic: About 40% of Millennial consumers say they didn’t miss shopping in person during the pandemic, Shopify announced earnings so far this quarter of $1.12 billion (up 46% from a year ago) and the 3 big retailers (Walmart, Target and Amazon) are really seeing the lions share of this increased spend. So given we are close to the end of the year (how did that happen?), here is a list of 13 eCommerce trends to look out for in 2022.
7. CRYPTO-SECURITY: My crypto posts a couple of weeks back on the crypto-future of the internet were more popular than I thought. So here is an expansion into crypto-security for all of your newly acquired NFTs and DAOs with new strategies for storing these assets safely while also allowing holders control and access.
8. TEAM MANAGEMENT: Ouch - I seriously need to make an infographic of this and put it on my wall - I've got some work to do as I'm guilty of more of the DO NOT's in this article than I want - it's discussing how to hold employees accountable without micromanaging them. 
9. PLANNING: For many of you your financial end-of-year is fast approaching, so question: How Dynamic Is Your Revenue Plan this year? 2020/2021 may have forced multiple re-forecasts for your business and who knows what BS 2022 is going to throw down (although hosting a Taco Tuesday on 2/22/22 will be my highlight). Anyway - who knows what could stall or even reverse your growth aspirations, so it's time to pull operational techniques from other departments (ie your Dev squads Agile ways) to create a more dynamic revenue plan - take a good read of this article from SBI for hot tips on avoiding poor Sales-based strategic planning. It even comes with an (OK-ish) downloadable planning tool (which I took the liberty to snag and sacrifice my email address for you) and First Round Capital feels the same way - Annual Planning is Killing Your Growth - but take a different tack - building a three-year plan! 
10. CASE STUDY: You may have already forgotten but last month Facebook (and Instagram and WhatsApp) all went offline (so Meta). It was 7 hours of high drama at the time FYI. The team at Cloudflare has run a full postmortem on this event to help us all understand how facebook disappeared from the internet. TL;DR it was DNS, it's nearly always DNS.

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POD OF THE WEEK: It's the podcast version of #7 above - a16z's Crypto Security Podcast.

1. SaaS METRIC OF THE WEEK: Landing Page Metrics - you may not need 25,000 landing pages as Zapier does, but a well-designed and personalized landing page can make a huge impact. ConvertKit lists the 5 key metrics for measuring the success of landing pages (and how to track them). To back that up, IceBreakerVC lists best practices for good landing page planning and strategy and Google is always up for listing ways to optimize website landing pages for lead generation this page also has some good inspiration.
2. WEBSITE: To compliment #1 above, optimizing the user experience (especially on mobile) can significantly boost the bottom line of a business, for example, improving site load times by just 0.1 seconds can increase conversion rates by up to 8%. Check this page from Google to review your site (and also your competitors' sites) to see how you measure up and review what changes can be made.
3. CONTENT MARKETING: Heavy Bit makes the case that now more than ever is the time to double down on content. Also, spot quiz hotshot - how long should a Blog Post be? Hypothetically this long (but also literally not that long - it's a long-ass blog post).
4. MVT: Here is another one for your tech dictionaries: MVT or Minimum Viable Testing which is about creating hypotheses and conducting tests that allowed you to predict if a market is going to appreciate a product before even launching an MVP.
5. MARKET SIZING: The dreaded slide on everyone's pitch deck. What's the size of the market. TL;DR if the market is not huge, same with your startup. Understanding the nuances of TAM, TOM and SOM is a great way to get started understanding market sizes as it applies to your business and the business problem your startup solves. 
6. COOKIES: Love them or hate them, the reality is that browser cookies have headed the way of the Dodo. This means that conversion tracking via cookies being phased out has created new attribution problems to solve in people's sales and marketing funnels. So check out this article on advances in ad-tech in a post-cookie world - or the PDF of the report here. Conversion modeling is a way forward, so if attribution is a necessary part of your business or your channel/partners Business, take a read of this article from Google on why conversion modeling will be crucial in a world without cookies and Advances in ad tech
7. STORYTELLING: Last month I made a popular post discussing Emotional Moats as a competitive advantage: And anecdotally I feel like my way of storytelling has shifted from my pre-pandemic ways and Google seems to agree with my sentiment suggesting a reboot of our storytelling fundamentals.
8. PRODUCT ANALYTICS: Product Analytics enables teams to develop a holistic, well-rounded understanding of how users engage with their digital products and experiences and totally complements Google Analytics. Check this article for a deeper than deep dive.
9. ZERO TRUST: An emerging phrase for your cybersecurity dictionaries - heck it's even an Executive Order for the US via President Biden. With 2020’s widespread shift to #WFH life, successful IT and security teams have leveraged Zero Trust initiatives to address some coarse-grain and fine-grain access control challenges - all at the edge because that is where we all are these days, and perimeter/fence based protection just won't work. Identify based and zero-trust strategies and architecture are where we need to be so start with this primer on Zero trust from ZDNet and move here with this State of Zero Trust Security report from OKTA for the APAC region.
10. CASE STUDY: Zapier. I like 'em and I use 'em. Zapier is now a $5 billion company based on the premise that we should all just get along because we are greater together. This is why they have the astronomical number of landing pages I reference above in #1. Integrating into and between apps using clicks is a strategy that put Zapier on the top of the No-Code/Low-Code movement and was fully remote long before the pandemic made it fashionable.

POD OF THE WEEK: The podcast version of #10 above. No-Code wasn't a thing when Zapier started, so they kinda created the category and only raised $1.3 million in VC capital.

BONUS: Its SaaStr next week and for those of us with no intention to travel they are hosting a streaming version - sign up here.