SaaStr

MARCH 26, 2024

Since then, I’ve made some pretty good other investments as well. The top reasons an investment has turned out to be a Zero: #1. If the founders hide churn, or hide a co-founder is leaving, or really anything that much matters — again, it’s just a smoking gun. cash Second was Algolia leading U.S.

Investment 325

Investment Scale Churn SaaS 325

Tom Tunguz

DECEMBER 26, 2022

A former venture capitalist, Mark Leonard started Constellation in 1995 with $15m of outside investment & a goal of buying vertical software companies with a moat & good unit economics. Customer Churn. -5%. Contraction & churn reduced growth by 8%. Growth Source. Acquisition. New Bookings. Price Increases.

Software Review 283

Software Review Investment Software Acquisition 283

SaaStr

JULY 13, 2020

Q: What was your failed investment experience and where will you never invest funds again? I’ve made about 30 material investments. Most have been successful, but of course not all have and I’ve been reflecting on the ones that didn’t, because they still had attractive elements when I invested. More on them here.

Technical Cofounder 305

Technical Cofounder Investment New CTO CTO 305

SaaStr

NOVEMBER 28, 2024

I try to look at two things in Vertical SaaS startups, at least when investing : Will everyone in the vertical / industry use it? Churn is all over the place with SMBs. Dear SaaStr: How Big Should The Addressable Market Be to Go into Vertical SaaS? Or at least $10,000 at a minimum? You probably have to go multi-product much earlier.

Payment Solutions 261

Payment Solutions Inbound Sales Team Marketing Scale 261

SaaStr

OCTOBER 31, 2023

Dear SaaStr: What Did You Learn From Your Worst Venture Capital Investment? You can’t keep investing in the same companies, at the exact same stage, same valuations, etc. High churn is OK in the early days even. But sometimes, the investment isn’t quite at the stage of maturity you think it is. You want to move quickly.

Venture Capital 273

Venture Capital Investment CTO Churn 273

Clouded Judgement

NOVEMBER 18, 2024

The purpose of the detailed information is to help investors (both institutional and retail) make informed investment decisions. The document contains a plethora of information on the company including a general overview, up to date financials, risk factors to the business, cap table highlights and much more.

Benchmarks 299

Benchmarks Payments Payment Services SaaS Payments 299

Intercom, Inc.

AUGUST 17, 2020

Because of this, localization can seem unattainable to many small and medium-sized businesses that may not have the capital to invest in localization – or the resources to maintain it. Increased churn. The post Not investing in localization is costing you more than you think appeared first on Inside Intercom.

Investment 276

Investment Scale Software Review Systems Review 276

SaaStr

MARCH 7, 2025

It begs the question: is the sales and revenue acceleration space back?

Engagement 219

Engagement Sales AI B2B 219

SaaStr

MARCH 9, 2025

The New AI ROI Framework Before investing in AI, Calendly’s team evaluates four key factors: Customer value (will this meaningfully improve outcomes?) As Shu concludes, “Gathering feedback early and often is crucial to making informed decisions about investments that yield returns for the customer.”

AI 202

AI Scale Education User Experience 202

SaaStr

MARCH 24, 2025

If you’ve used Zendesk, Algolia, Contentful, or Loom, you’ve experienced the impact of his investment thesis firsthand.

Data 147

Data Acquisition AI Finance 147

SaaStr

MAY 20, 2024

A Burn Rate That is Too High Venture capital is meant for investing, for sure. But there’s a fine line between investing and keeping a leaky boat and set of metrics afloat. Not Jumping on High Churn Some types of churn certainly can be addressed over time. Will marketers really buy your product if sales execs do?

Trends 313

Trends Scale Sales Hiring Venture Capital 313

SaaStr

DECEMBER 29, 2019

Some take-aways: If You Truly Have Net Negative Churn and High NPS — Then Almost Any Reasonable CAC Makes Sense. But you have to have insane NPS/CSAT + truly high net negative churn (120%-140%) for this math to really work. Customers invest in not just products, but relationships. Invest like that. Measure NPS.

Scale 353

Scale Churn Construction SMB 353

Tom Tunguz

NOVEMBER 6, 2021

All of the sales and marketing dollars invested to obtain persuade the buyer to put digital ink to pdf have been recouped immediately. And the company has two years of marginal profit to invest in the GTM. Especially if logo churn is low, account expansion is strong, and the sales cycles are brief.

Sales Hiring 352

Sales Hiring Scale Payments Payment Solutions 352

SaaStr

JANUARY 17, 2021

In practice, high churn is the only thing. Part of my job when I invest in a start-up is to get folks excited about the company. Or I wouldn’t make the investment. Put NPS and CSAT and churn in every weekly and monthly email. Because churn will be higher than average. It’s not that hard.

SaaS 363

SaaS Venture Capital Churn Branding 363

SaaStr

APRIL 21, 2021

Even with relatively high churn for a public company (since Wix is self-service), it’s first $1B of ARR will grow to $9.2B So you may underinvest overall, or invest, in fact, too much in Sales and Marketing — and not enough in Customer Success. Take a look at this chart from Wix. over the following 8 years (!):

Revenue 350

Revenue Enterprise Customer Success Churn 350

SaaStr

NOVEMBER 4, 2021

2 drivers stood out as notable: Customer Acquisition Cost (CAC) and Churn. In terms of Churn, “Rule of 40″ Qualifiers” had 29% lower Gross Dollar Churn. The impact of this CAC and Churn outperformance shows up in 83% better capital efficiency for “Rule of 40” Qualifiers.

SaaS 317

SaaS Technical Review Benchmarks Azure 317

ChurnZero

FEBRUARY 7, 2025

To win the battle against churn, CS teams need to leverage the right strategies and specialized tools. By combining a customer success platform (CSP) with a powerful CRM tool, teams can minimize churn, turning satisfied customers into loyal advocates and building a more engaged, long-term customer base. Define what success looks like.

Churn 59

Churn Data Machine Learning Artificial Intelligence 59

SaaStr

NOVEMBER 2, 2021

Yes, this customer churned after 11 years. But it was a reluctant churn. In that gap, customers with champion change churn. Go long if you have happy customers and Net Negative Churn — Go Very Long. But if you have happy customers and net negative churn (i.e., So start investing longer.

Scale 313

Scale Churn Retention Acquisition 313

SaaStr

MAY 12, 2023

We tend to intuitively think annual contracts help combat churn, but they really don’t — they just defer it. This is consistent with my experience and across 30+ investments. There are a lot of great learnings and metrics in the report, and a few stood out to me: #1. This data confirms that.

Startup 362

Startup SaaS Retention Churn 362

SaaStr

MAY 1, 2024

SMB Churn coming down, but still at SMB-Like Levels Zoom for years defied what we knew about SMB churn. But in the end, today, at scale, their small customers churn is at the same high rates as other “grab and go” SMB products. Still, they’ve brought churn down from 3.6% What a crazy story.

SMB 299

SMB Scale Banking Enterprise 299

SaaStr

JULY 11, 2024

In this article, you’ll learn about the 4 vital signs investors are looking for: Revenue growth Sales efficiency Churn Cash burn When you’re at $0-$5M in revenue, most of your investment goes into product. Two Case Studies Scale Ventures invested in Box in 2010 while in the high-growth, low-burn bucket. You want to see about.7

Scale 300

Scale Scaling Churn Investment 300

SaaStr

DECEMBER 2, 2020

Decrease churn. Less churn = more revenue … and many other benefits. So invest more here, in general — and especially if you don’t have any better ideas. Measure churn. In the end, decreasing churn by $X a year is the same as selling $X a year more product. Reach out to your customers more. Have customer meet-ups.

Scale 317

Scale Sales Hiring Sales B2C 317

SaaStr

APRIL 26, 2020

It’s easier just to go find a brand new investment with less overhang and fewer issues. If You “Hold The Line” on Pricing, But Churn Goes Up, You May be Losing, Not Winning. Investment processes are slowed down by remote diligence (for now). ” Worried about emerging market investments.

Technical Review 358

Technical Review Venture Capital Innovation Pricing 358

SaaStr

NOVEMBER 13, 2022

But I’ve made 30+ investments, and while many have been big wins, some haven’t. Here’s what’s caused startups I’ve invested in to fail, or at least, not to thrive and succeed: Founder conflict. This hasn’t driven any startup I’ve invest in 100% to failure, but it’s driven them to unoptimal exits. Too much churn.

Startup 260

Startup Venture Capital Scale Churn 260

SaaStr

APRIL 18, 2021

It means once you get to about $2m in ARR, your business is real and solid. It isn’t going to evaporate, unless churn in massive … which it most likely isn’t once you get to this inflection point. Now is the time to invest, in team and product at least. Because it compounds. Success builds on success in SaaS.

SaaS 329

SaaS Travel Churn Revenue 329

SaaStr

OCTOBER 16, 2020

So invest in it! Customers that are merely behaviorally loyal, or even — prisoners — don’t churn in a day. And they churn at a much higher rate. And I bet you, measured over 9-12 months, it pay for itself in decreased churn or at least, increased Net Promoter Scores. And get it right. Pretend to.

B2C 322

B2C Customer Success Customer Support Churn 322

SaaStr

AUGUST 5, 2020

And every single SaaS company I work with or invested in had a better July. You know your new growth rate, your new retention rate, your new churn rate. First, maybe model a material uptick in churn going into next year. It can’t hurt to model a return to a higher churn phase next year. Even a global pandemic.

Airlines 363

Airlines Government Entertainment Travel 363

SaaStr

DECEMBER 27, 2020

New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise. Do whatever you can to drive up NRR / net negative churn. I’ve seen this across other B2B/API companies I’ve invested in. This is a big take-away.

Scale 341

Scale Outsourced Development SMB Cloud 341

SaaStr

JANUARY 24, 2022

It was too big a flag for a company at the edge of where I like to invest. With early revenue, you start thinking about churn and scalability of every aspect of the business, including product, infrastructure, customer support, sales and marketing. I couldn’t even figure that out. Your focus expands.

Finance 332

Finance Outsourcing Services Systems Review Technical Review 332

SaaStr

FEBRUARY 25, 2025

In addition, this year Mayfield is sponsoring our VC AI Pitch Stage and will invest from $500k-$5m in the winner! Sessions often cover specific benchmarks for customer acquisition costs, churn rates, expansion revenue, sales efficiency, and other SaaS-specific metrics. Meet and Find Your Next VP / CXO!

Sales Recruiting 195

Sales Recruiting Scale CTO Hire Sales Hiring 195

SaaStr

JULY 24, 2024

Jason’s earliest investment had strong product market fit, but it took them four years to come out with their mobile app. If you’re a CEO talking to customers and in deals, you know six months in advance when a major customer is churning, or a competitor is stealing a deal from you. It’s nuanced. The one who can iterate faster.

Sales Hiring 301

Sales Hiring Startup Scale SMB 301

SaaStr

JANUARY 12, 2021

Churn is 1.1% Most of the companies in this 5 Interesting Learnings Series have had net negative churn from SMBs (e.g., Xero’s SMB churn isn’t zero. Inclusive of upsells and churn, their ARPU is $29.25 This is also how they can still afford to invest in a sales-driven sales process with such a low ACV.

Customer Lifetime Value 283

Customer Lifetime Value SMB Churn Scale 283

SaaStr

JANUARY 24, 2021

Well, it does make sense, when you understand the scenario, a combination of two things: First, this SaaS company has a mix of freemium customers and sales-driven customers (with higher ACV, lower churn). And here, they just couldn’t safely invest. It will destress all your investments. Do that if you can.

Scale 343

Scale Sales Hiring Scaling Construction 343

SaaStr

AUGUST 7, 2020

The best startups invest in their sales teams and work hard so most of the reps hit and exceed quota. The best sales teams scale together, with low churn and ideally close to zero churn in management and top performers. Well, they do tend to work at some of the best companies, so there is that. But it’s more than that.

Sales Hiring 363

Sales Hiring Scale Sales Recruiting Compensation 363

SaaStr

APRIL 10, 2020

And more importantly, they are invested in you. Make sure net negative churn is at least covered and invested in. Maybe they can invest a little more, maybe they can’t. As a startup, there are few things more important than Being Present: Your customers need to believe. They didn’t just buy your product once.

Sales Hiring 350

Sales Hiring Startup Investment Revenue 350

SaaStr

OCTOBER 29, 2020

Zendesk’s churn is still a bit higher than pre-Covid, but is almost back to pre-Covid levels. So if you sell to SMBs, or a mix of SMBs and enterprise like Zendesk does (with 160,000 total customers), well … enough with the excuses on churn. Are you investing enough there? 112% Net Revenue Retention.

SMB 298

SMB Enterprise Churn Retention 298