SaaS METRIC OF THE WEEK: CLTV: This metric represents the average revenue that a customer generates before they churn - Customer Life Time Value. ChartMogul has a great online calculator here. Go to 'advanced mode' as this calculator references the traditional formula as well as the David Skok version (which is the advanced one, but viewed as being more realistic)....and check here for a thought-provoking read of why your LTV may be lower than you think.
SECOND ORDER REVENUE: Doubling down on LTV this week and a little contrary to the last link above Jason Lemkin claims that CLTV isn’t the whole story and often references a term called "Second-Order Revenue". He states that traditional CLTV analyses underestimate true revenue generated by customers by 50-100% (whaaaaat!!!) in most SaaS models selling to any businesses larger than SMBs.
WEBSITE: Do you have a pretty high churn rate from your home page or landing pages? Maybe you have a trust problem. This article outlining the Trust Pyramid is very much worth a read but TL;DR A website must meet users' basic trust needs before a visitor can be expected to engage meaningfully. With the Trust Pyramid, there are 5 distinct levels of trust-based engagement, each with separate design requirements.
GROWTH: For public SaaS companies there is a wealth of online benchmarks in regard to performance - but it is much harder to scratch the surface of private SaaS (when there is no compliance requirement to share the data). But here is a couple of reference documents for ya (both from SaaS Capital): 1) Growth - here is their latest report on Private SaaS Companies' growth rates. Some snippets: It takes approximately 5 years for companies to reach $1 million in ARR, 87% of those surveyed reported annual revenue growth of greater than 10%. 2) I've posted about this before - but spend is just an important measure as growth - bootstrapped companies are obviously being outspent by venture-backed companies - the average is 80% of ARR to 115% ARR!!
PRODUCT DEBT: This is a nuanced (and more customer-centric spin) on Technical debt: Product Debt is just as bad as Technical Debt - it's all the decisions that have been made, often tactical and acute, without a clear product vision or sufficient consideration about the long term effects of that moment/decision. The link above also has a great case study of Google Messaging's product evolution.
LANDING PAGES: One of the most common reasons why a search engine-based marketing campaign fails is that it does not have optimized landing pages to continue the journey, take a look here at some best practices, real examples, and templates for Google Ad-based Landing Pages. Then also Check this site out - a collection of the best landing pages around the web with a focus on copywriting and design - finally (this is a repeat-post) IceBreakerVC lists best practices for good landing page planning and strategy.
CASE STUDY: STRIPE: Stripe just raised a new round, remaining private. It was a $600 million funding round that boosted its valuation to $36 billion - but how did they come out of nowhere to dominate the payments space? The answer: Developers! They focussed on going after developers — the main group of people involved in integrating payments into all kinds of digital applications.
POD OF THE WEEK: From Invest Like The Best this week is an interview with Michael Seibel - the CEO of Y-Combinator's startup accelerator - he has reviewed literally thousands of applications to YC.