Remove Acquisition Remove AWS Remove SMB
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The Complete Guide to SaaS Pricing Strategy

Tom Tunguz

AWS, Twilio, Heroku, etc. Just a quick reminder: Payback Period = Cost of Customer Acquisition/Gross Margin The gross margin is the revenue per customer minus the costs to provide the service. So does Expensify, which decreases the time to file expenses. Cost-based pricing is when startups mark up the product they sell by some margin.

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A Look Back at Q1 '24 Public Cloud Software Earnings

Clouded Judgement

It’s worth pointing out that Azure is a bit above the long term trendline, while AWS is still below (but accelerating up). For businesses selling predominantly to SMB customers, these benchmarks are all slightly lower given the higher-churn nature of SMBs.

Cloud 318
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Dharmesh Shah of HubSpot: From Day 0 to IPO. What Went to Plan. What Most Certainly Didn’t (Video, Podcast + Transcript)

SaaStr

The other thing that dropped our odds of success was the fact that we were focused on small business, on the SMB market, and everyone we talked to, literally everyone. Do not…,” and the reason is no one hardly ever has succeeded in building a big business in SMB. I’m paraphrasing… [laughter].

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A Look Back at Q4 '23 Public Cloud Software Earnings

Clouded Judgement

It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. If we break this down and look at Azure and AWS independently (graphs below), you’ll see how the AWS “swings” were a lot more volatile.

Cloud 184
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Clouded Judgement 6.9.23 - Recap of Consumption Trends in Q1 '23

Clouded Judgement

Very healthy new business (new customer) acquisition. Coming out of earning season I’m slightly more optimistic about a back half acceleration (August or later) than I was coming in. The Good Mongo: Very Positive - Is The Bottom Behind Them? They guided to 26-27% growth in Azure in Q2 (with 1% coming from AI).

Trends 130
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How Top Sales Leaders are Adjusting their Sales Process (Video + Transcript)

SaaStr

Then, we’ll end of the day with me and Stewart Butterfield and obviously Slack is doing well, but Slack also has a massive SMB base and its challenges. For example, we’ve got like Roman from Gorgeous that Sam knows at the end of the day talking about dealing with SMB turns, they did something interesting at Gorgeous.

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Clouded Judgement 3.22.24 - ERR vs ARR and the Conundrum of AI Revenue Streams Today

Clouded Judgement

For SaaS businesses that target smaller SMB customer segments, gross retention is typically in the mid to low 80’s with net expansion in the ~105% range. And once a customer has paid back the initial acquisitions costs to acquire it, all future streams of revenue can loosely be described as a cash flow annuity.

AI 190