1. SaaS METRIC OF THE WEEK: One I discussed in detail at a session last week: People are the most important (and expensive) metric for any company, especially SaaS (yes, more important than the actual product). Revenue per FTE is one metric to measure regarding company efficiency via people efficiency, but a better one, perhaps, is the ROSE Metric (Return on SaaS Employees). This metric highlights the tradeoffs between a SaaS company's headcount, recurring revenue, and EBITDA growth.
2. BENCHMARKS: ChartMogul launched their 2nd edition of the SaaS Benchmarks Report last week with data from over 2,100 SaaS businesses covering growth patterns and retention, churn, and growth rate benchmarks - LOTS to digest!
3. GROWTH: According to the report above and the SaaS growth in 2022 was the slowest it has been in years, and retention was a key driver of growth, and it caught the attention of Jason Lemkin, who has more to say. Today, top quartile SaaS companies are still growing 65% (and seem to be rebounding) - but in Q1 2021, it was 97%.
4. GROWTH 2: Testing new tactics for marketing growth takes a lot of resources, and most of us often need more time to run experiments? So check this Google Doc from Dashly, where they collected 100 growth marketing hypotheses tested by their experts. (includes advert retargeting, the wait list for product launches, niche glossaries, etc.)
5. SALES COMP: ICONIQ Growth partners just published their Sales Compensation guide (pdf) - a very detailed 77 pages with tons of content, but to tease you into the click: 50/50 base to variable remains the standard comp structure in B2B Sales, OTE/Quota is 4-5x, and Enterprise SDRs need to book 5 SQLs Per Month, but Mid-Market SDRs crank out about 20.
6. FREE TRIALS: According to Userpilot's State of User Onboarding for 2023,74% of SaaS companies now offer a free trial (way up from 43% in 2022). Openview Partners have a great article on how to optimize these free trials. BONUS: Tomasz Tunguz also conducted a survey on Free Trials a few years back, which has one of my favorite facts: Conversion rates aren't impacted by trial length (so make them shorter).
7. PATTERNS: The Data-Driven VC looked late last year at what data patterns can be analyzed across successful startups. Super interesting read, but TL;DR: most important is the number of executives, the split of business versus tech roles, the split of male versus female founders, and their age and degrees.
8. CAPITAL: Another week, another Pitchbook report - this one covers Enterprise SaaS, which remains pretty robust: In Q1 '23, U.S.-based enterprise SaaS startups raised $13.9B (across 363 deals). Funding remained strong for the enterprise SaaS sector last year, second only to the record-setting totals of 2021. YoY, this is tracking down by about 18.5%. But this figure is still way higher than 2020 by about 85% ($34B - $62B).
9. GROWTH LOOPS: Elena Verna (Head of Growth at Amplitude) had an excellent presentation at their Amplify 2022 event about predictable and defensible Growth Loops and how to make money from them. Elena makes the interesting argument that revenue is an outcome and should not be a KPI in Growth. Reforge now has a recent article with some examples and feedback on how to implement Growth Loops.
10. CASE STUDY: Adding onto #9 above, Growth Loops are hard to understand without a concrete example - Git Hub is a great one. This is how they built a 40M+ user platform via loops.
POD OF THE WEEK: From Software Snack Bites, Kyle Poyar from Openview goes all in on tips & tactics, pricing & packaging, sales & marketing, and case studies across the PLG World (including how to make product-led sales work).