Tom Tunguz

JUNE 18, 2019

Over the last decade or so, I’ve compiled a metrics sheet to summarise a SaaS business. Redpoint SaaS Metrics Template. This section covers employee satisfaction, headcount, and recruiting metrics. Marketing digs into lead generation and conversion metrics. If you have suggestions, please email me.

Metrics 250

Metrics Sales Recruiting Startup Headcount 250

Tom Tunguz

MARCH 24, 2019

These customer acquisition paybacks resemble consumer acquisition figures more than software. These metrics are the result of exceptional product market fit. This math also implies a payback period, gross margin burdened, of less than 7 months. The public median is 18 months and the private median is 14 months.

Metrics 279

Metrics Benchmarks Scale Acquisition 279

SaaStr

JANUARY 8, 2025

The SMB sales team was incentivized purely on logo acquisition rather than revenue. The team lacked visibility into key metrics like average revenue per customer. ” Quickly, Lindsey found that comp plans weren’t aligned with Checkr’s revenue goals and incentives.

Revenue 293

Revenue Scale Sales Hiring Compensation 293

Tom Tunguz

DECEMBER 11, 2022

The acquisition is notable for three reasons. Third, it’s the most substantive acquisition to announce this year after Figma’s announced its sale to Adobe. Third, it’s the most substantive acquisition to announce this year after Figma’s announced its sale to Adobe. Second, the multiple is 8.4x

Acquisition 250

Acquisition Startup Software Pricing 250

SaaStr

FEBRUARY 12, 2025

Balanced Metrics : While they track traditional SaaS metrics, they also measure customer success indicators specific to the construction industry. Efficient Growth : Word-of-mouth in tight-knit industries reduces customer acquisition costs. This helps ensure they’re creating real value, not just growing revenue.

Construction 251

Construction Scale SaaS Travel 251

Intercom, Inc.

OCTOBER 18, 2021

The SaaS industry is full of advice on the perfect product metrics to gauge your users’ activation, engagement, and interactions. If you don’t know exactly what questions you want answered, these product metrics leave you blinded by the very data you hoped would open your eyes. What are product metrics?

Metrics 269

Metrics Customer Lifetime Value User Experience Engagement 269

SaaStr

OCTOBER 25, 2024

3: Payback Periods + Quotas Have Jointly Increased The number of months required to recoup the cost of customer acquisition has increased by 12% on average, which is linear with the increase in sales cycles. It’s to say many of us do not know how to use AI effectively enough yet to impact conversion metrics. #6:

Venture Capital 331

Venture Capital Marketing AI SaaS 331

SaaStr

DECEMBER 20, 2024

Driving revenue through acquisition, expansion, and retention. Frontline managers will have acute awareness of what’s working and what’s not. They’ll be the first ones to tell you what’s working and what’s not on calls with prospective customers. Shaping and maintaining company culture. ” 3.

Sales Hiring 260

Sales Hiring Scale Underperforming Technical Team Sales 260

SaaStr

MARCH 24, 2025

Focus on showing clear evidence of growth + efficiency, segment-specific excellence, and one truly scalable acquisition channel. Most importantly, make sure your historic trajectory supports your future projections.

Data 147

Data Acquisition AI Finance 147

SaaStr

APRIL 30, 2022

Check out this 2018 Europa session with Guillaume Princen, Head of France and Southern Europe @ Stripe, where he talks about the metrics you need to be focused on in your startup. If you don’t have the time to watch the whole session, here are the main metrics you should be mindful of. Customer Acquisition Cost (CAC). &

SaaS Payments 246

SaaS Payments Metrics Payment Methods Scale 246

SaaStr

FEBRUARY 10, 2025

Implementation of Product-Led Growth The transition to product-led growth (PLG) required understanding and implementing a fundamentally different business model.

Scale 162

Scale Scaling Outsourced Development Sales 162

SaaStr

SEPTEMBER 25, 2024

What data and metrics do you need to convince SaaS investors you’re in good shape and aligned with what they care about? These metrics are more targeted to those preparing for a Series A or B round and could make the difference between an excited-to-invest-in-you investor and a pass.

Metrics 184

Metrics Sales Hiring Retention Churn 184

Tom Tunguz

FEBRUARY 26, 2025

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. With this model, Twilio maintained contracted revenue at less than 50% of ARR while achieving industry-leading retention metrics. Sales teams lose leverage.

SaaS Payments 283

SaaS Payments Pricing Strategy Scale 283

User Pilot

MARCH 30, 2025

But is your mobile user acquisition strategy strong enough? There are many ways to approach each, so lets go over nine of the most effective strategies for mobile user acquisition: 1. Integrate product-led growth in your acquisition strategy I said earlier that you shouldnt rely on your product alone to attract mobile users.

Mobile 66

Mobile Acquisition Software Review Social Media 66

SaaStr

NOVEMBER 20, 2024

Other places this feedback loop worked well were: Adoption loop metrics. Customers crave metrics about how teams are using all AI products. You want people who have stuck with it when the year was lean or went through a messy acquisition and came out on the other side. Deciding where you don’t want to spend your time.

Scale 261

Scale AI Scaling Marketing 261

SaaStr

AUGUST 7, 2023

Learn about the most important SaaS metrics for founders in 2023 with the CEOs of the most metric-oriented company, monday.com, and the founder of SaaStr. For a quick recap on SaaS metrics: What is ARR in SaaS? CAC stands for Customer Acquisition Costs and measures how much it costs to buy a new customer. The takeaway?

Metrics 245

Metrics SaaS Sales Hiring Finance 245

SaaStr

FEBRUARY 25, 2025

Sessions typically focus on real metrics, strategies, and lessons learned, not theoretical concepts. Benchmark Data and Performance Metrics SaaStr sessions typically feature transparent sharing of key metrics and benchmarks that are otherwise difficult to access. Get out of the home office. Pull together the team.

Sales Recruiting 195

Sales Recruiting Scale CTO Hire Sales Hiring 195

SaaStr

AUGUST 8, 2022

I took a look a little while back at how long it took the average SaaS company that was sold for $1B+ to get that acquisition. years (maybe the better metric): The fastest of the bunch was Divvy’s $2b+ acquisition by Bill 5 years after funding. Even Mailchimp’s incredible $12B acquisition by Intuit took … 20 years.

Startup 328

Startup SaaS Acquisition B2B 328

SaaStr

FEBRUARY 26, 2025

Companies successfully implementing PLG are seeing dramatically lower customer acquisition costs as a percentage of revenue. What he shared was pure gold for any SaaS founder trying to navigate the complex world of GTM motions. Why PLG Matters More Than Ever First, let’s talk numbers.

Enterprise readiness 147

Enterprise readiness Enterprise compliance Acquisition 147

SaaStr

JANUARY 7, 2022

It’s time for a data-driven model, that ties to your trailing growth rate and your current metrics. True understanding of customer-acquisition costs and other revenue metrics. It’s still early, but by the Series A, you should have enough data to understand the economics of customer acquisition for real. NPS and CSAT.

Acquisition 358

Acquisition Metrics Data Revenue 358

SaaStr

AUGUST 22, 2021

Recently Bessemer Venture Partners did another great deep give on Cloud metrics at the Cloud 100. A few metrics really stood out to me this year: Their “Cloud 100” top private Cloud and SaaS companies are now worth on average a stunning $5.2B. And PE firms are doing billion+ acquisitions seemingly every week or two.

Cloud 335

Cloud Scale SaaS Acquisition 335

SaaStr

MARCH 23, 2025

Be explicit about success metrics Define what success looks like beyond revenue targets to align expectations. ” Insufficient focus on post-sale experience “We were so focused on customer acquisition that we didn’t build out our post-sale function quickly enough. In AI especially, deployment success is everything.

Sales Recruiting 242

Sales Recruiting Sales Hiring Scale AI 242

Tom Tunguz

JUNE 22, 2022

The behavioral patterns in web3 differ driven by anonymity, communication patterns on discord and telegram, and the consequences of using tokens as user acquisition, as governance votes, and currency. Of course, daily active users and cohort metrics will hydrate dashboards. There’s no bridge between web2 & web3 data, yet.

Blockchain 355

Blockchain Marketing Advertising Government 355

SaaStr

MAY 25, 2021

At least a few times a week, I am sent a deck or exec summary that includes an “Exit Strategy” The slide sometimes references a nice acquisition by an adjacent company, or a prior competitor or player in the space. Big acquisitions don’t happen every day, no matter how it may seem on TechCrunch.

Strategy 326

Strategy Acquisition Startup Metrics 326

User Pilot

SEPTEMBER 18, 2024

” And that’s also why AARRR metrics are called pirate metrics. Short for acquisition, activation, retention, referral, and revenue, these metrics help you measure and drive product growth. In this article, we’ll dig deeper into the AARRR framework and the relevant metrics associated with each stage.

Metrics 105

Metrics Customer Lifetime Value Acquisition Software Review 105

SaaStr

JULY 29, 2021

Now LinkedIn isn’t a stand-alone public company anymore, so we can’t get quite as many metrics and details from them as we used to. Revenue tripled since Microsoft acquisition in 2016. After a slow patch after the acquisition, LinkedIn hit its new stride and tripled from $3B to $10B ARR from ’16 to ’21. #3.

B2C 332

B2C B2B Acquisition Cloud 332

User Pilot

NOVEMBER 14, 2024

What if you could boost revenue without having to invest a small fortune in new customer acquisition? This metric helps SaaS companies track the effectiveness of their expansion efforts. What metrics should you consider? Well, you can easily track the metrics from one of Userpilot’s analytics dashboards.

Strategy 105

Strategy Payment Solutions Payments Customer Lifetime Value 105

Tom Tunguz

APRIL 16, 2020

Double down the investment in go to market, light up customer acquisition channels with marketing, pursue strategic acquisitions. Which metrics suggest it’s the right time to grow the GTM teams again? If you’re lucky enough to be in the top right, you’re in the best position. Full speed ahead.

Strategy 351

Strategy Startup Venture Capital Acquisition 351

Tom Tunguz

DECEMBER 6, 2022

Post-Covid Metrics. Some portion of R&D spend should be allocated to customer acquisition cost for all software companies. As net income may become a more important metric for valuation, it may replace sales efficiency as a better metric for measuring bookings productivity. GTM Motion. S&M Spend / Revenue.

Headcount 344

Headcount Market Research Acquisition Education 344

Tom Tunguz

NOVEMBER 6, 2021

The payback period metric doesn’t capture the difference in the quality of the revenue/cash collections. After all, the point of the payback period metric is to determine when to invest more in sales and marketing. It’s time for two metrics to exist: a cash-flow based months-to-repay and an accrual accounting metric.

Sales Hiring 352

Sales Hiring Scale Payments Payment Solutions 352

SaaStr

SEPTEMBER 29, 2022

Free user acquisition. As consumer tech growth teams move through this adoption funnel, they evolve their north star metric. This evolution can be described in four stages—each stage with a goal measured by a specific metric. Stage 3: Prove scalable quality user acquisition. This adoption funnel goes through: .

Technical Review 284

Technical Review Technical Advisors Scale Compensation 284

SaaStr

MAY 17, 2024

It sometimes manifests with misalignment on where to make a new acquisition or which avenue of growth to focus on. What Metrics Matter Most for Your Roadmap As you put your roadmap together, what should you look at? What metrics and outcomes matter most? You’re optimizing for a metric or outcome.

Scale 299

Scale Technical Review Sales Hiring Artificial Intelligence 299

Clouded Judgement

JULY 16, 2024

Provides end-to-end visibility of analytics and key metrics to all stakeholders, including executives, Finance professionals, line-of-business leaders and other business partners. You can some metrics below based on different share prices. Financial and Operational Reporting. months and 23.4 months, respectively. months and 23.4

Benchmarks 295

Benchmarks Data Machine Learning Artificial Intelligence 295

SaaStr

DECEMBER 14, 2020

So as you’ve seen, acquisitions have picked up in SaaS. So many acquisitions, so many IPOs, so many public and private valuations of great SaaS companies are actually at / worth less than 10x ARR. Yes, if the acquisition is strategic, multiples are at all-time highs. If you fall out of hyper-growth mode, still go long.

SaaS 352

SaaS Acquisition Cloud Finance 352

SaaStr

NOVEMBER 4, 2021

The SaaS “Rule of 40” has gained popularity due to its simplicity, requiring only two common financial metrics to be added together. 2 drivers stood out as notable: Customer Acquisition Cost (CAC) and Churn. In terms of Customer Acquisition Costs, “Rule of 40” Qualifiers spent 31% less to acquire a new customer.

SaaS 317

SaaS Technical Review Benchmarks Azure 317

Tom Tunguz

JANUARY 19, 2020

Payback period is one of the best composite diagnostic metrics of product market fit. It is amount of time a customer repays the cost of customer acquisition with gross profit dollars. I've written before about the benefits of short payback periods. In 2020, what is an excellent payback period[1]?

Software 356

Software Acquisition Enterprise Startup 356

Tom Tunguz

AUGUST 26, 2020

In this analysis, I’ve compared the metrics of the two companies at the time of IPO. The inverse of this number, normalized for months, is the implied cost-of-customer acquisition payback period. Asana competes with SmartSheet, another publicly traded productivity company. Let me know which you prefer. SmartSheet. SmartSheet.

Payment Solutions 363

Payment Solutions Payments Outsourced Development Payment Services 363