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 328

Investment Scale Churn SaaS 328

SaaStr

MAY 10, 2025

It combines renewals, churn, and upsells. Invest in Relationships Customer success isnt just about metricsits about people. Track metrics like churn, NRR, time-to-value, and customer health scores. Dont wait until youre at $5M or later to invest in customer success. Be careful here. Start Early.

Sales Hiring 235

Sales Hiring Customer Success Scale Retention 235

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 295

Software Review Investment Software Acquisition 295

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 300

Technical Cofounder Investment New CTO CTO 300

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 264

Payment Solutions Inbound Sales Team Marketing Scale 264

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 278

Venture Capital Investment CTO Churn 278

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

SaaStr

MAY 9, 2025

Getting 2-3 years of revenue upfront can give you the runway to invest in growth, hire key team members, or even just sleep better at night knowing youre not scrambling for cash. Customer Commitment : Annual and multi-year contracts do lock in customer more, reducing churn risk and keeping competitors at bay.

Payments 173

Payments Churn B2B Branding 173

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

MAY 16, 2025

High CAC Is a Symptom, Not the Root Problem If your CAC is too high, its likely because of one (or more) of these issues: Churn is too high : If customers arent sticking around, your CAC payback period will balloon. Fixing churn is often the fastest way to make CAC more reasonable. Itll just starve your pipeline and make things worse.

Marketing 159

Marketing Scale Churn Content Marketing 159

SaaStr

MAY 24, 2025

Most VCs wont invest unless they see a clear path to 3x ARR in 12-18 months. If youre selling to SMBs, churn can be a killerfix it now. And one VCs wont be interested, and most buyers and Private Equity firms wont be either until you cross $10m ARR or so. Operational Focus At 35% growth, you need to optimize every dollar spent.

Sales Hiring 195

Sales Hiring B2B Churn Retention 195

SaaStr

MARCH 7, 2025

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

Engagement 216

Engagement Sales AI B2B 216

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 201

AI Scale Education User Experience 201

SaaStr

MARCH 24, 2025

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

Data 141

Data Acquisition AI Finance 141

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

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 317

Trends Scale Sales Hiring Venture Capital 317

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

MAY 1, 2025

Startups I invested in from cold email from founder: Salesloft (exited $2.4B) Talkdesk ($10B) Pipedrive (exited $1.5B) Logikcull (exited $270m) Owner Mangomint etc. Include your ARR, growth rate, customer count, churn rate, or any other metric that shows traction. Dear SaaStr: How Do I Write a Great Cold Email To VCs? VCs love numbers.

Scale 159

Scale Startup Investment Scaling 159

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 351

Revenue Enterprise Customer Success Churn 351

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 321

SaaS Technical Review Benchmarks Azure 321

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 317

Scale Churn Retention Acquisition 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

APRIL 30, 2025

This breadth of functionality ensures customers are deeply embedded in the platform, making churn almost impossible. But remember, this requires significant investment in product depth and breadth. Profitable on a Non-GAAP Basis, But Not Wildly So ServiceTitan’s growth is still epic coming up on $1B ARR, so it’s investing.

Payments 147

Payments Payment Services SaaS Payments Payment Solutions 147

SaaStr

MAY 11, 2025

Invest The TIme Here : You need to know who your best prospects are. Its a high-churn, entry-level role, but the best SDRs dont give up. AI tools can help you research and craft better messaging, but the human touch is what seals the deal. Understand Your ICP (Ideal Customer Profile). Persistence Wins : SDR is a grind.

Scale 147

Scale AI Churn Investment 147

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

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 305

Scale Scaling Churn Investment 305

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 321

Scale Sales Hiring Sales B2C 321

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 304

SMB Scale Banking Enterprise 304

User Pilot

OCTOBER 31, 2024

These issues might range from low engagement with specific features to a high churn rate or poor user onboarding. Depending on these gaps (and your budget), you’ll need to decide whether to invest in buying data or building a data infrastructure. This process may reveal gaps such as: Insufficient raw data. Outdated technology.

Strategy 105

Strategy Underperforming Technical Team Government Customer Lifetime Value 105

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 263

Startup Venture Capital Scale Churn 263

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 331

SaaS Travel Churn Revenue 331

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 325

B2C Customer Success Customer Support Churn 325

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 342

Scale Outsourced Development SMB Cloud 342

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 334

Finance Outsourcing Services Systems Review Technical Review 334