SaaStr

NOVEMBER 28, 2024

Dear SaaStr: How Big Should The Addressable Market Be to Go into Vertical SaaS? I try to look at two things in Vertical SaaS startups, at least when investing : Will everyone in the vertical / industry use it? It’s just hard to get most vertical SaaS start-ups to scale if they can’t get to a $10k ACV. So be honest.

Payment Solutions 263

Payment Solutions Inbound Sales Team Marketing Scale 263

SaaStr

JANUARY 15, 2025

While some might dismiss sector-specific vertical SaaS software as ‘too small’ or ‘too niche’, companies like Veeva ($40B), Clio ($3B), Toast ($1.3B), and Slice ($1B) have proven there’s massive value in going deep rather than broad. 10 Ways Sales is Different in Vertical SaaS 1.

Scale 276

Scale Sales Hiring SaaS Payments Sales 276

SaaStr

JUNE 16, 2024

Dear SaaStr: How Can a SaaS Business Reactivate Churned Customers? This may sound simple, but the #1 thing you can and should do is create a series of marketing campaigns targeted only to churned customers. And also send that to your “lost” and churned customers. That will keep you top enough of mind. #2.

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Churn Business SaaS Mobile 315

SaaStr

FEBRUARY 12, 2025

Meet Wyatt Jenkins: From Construction Sites to Chief Product Officer If you want to understand how vertical SaaS companies scale to $1B+ in revenue while staying true to their customers, there’s no better person to learn from than Wyatt Jenkins, Chief Product Officer at Procore Technologies.

Construction 253

Construction Scale SaaS Travel 253

SaaStr

JULY 26, 2022

So in theory, SMB SaaS is better than enterprise, at least 9 times out of 10: Deals close much faster. But beyond all the other Pros and Cons of SMB vs enterprise, there’s one looming issue with SMB SaaS: Churn. Endemic churn. The type of churn you almost can’t do anything about.

SMB 363

SMB Churn Payment Services SaaS 363

SaaStr

DECEMBER 22, 2024

Inherent Churn vs. Fixable Churn: You Have to Attack Both #2. Is SaaS Back? (TL;DR: 4 Truly Great SaaS IPOs Since 2021! But Not Always a Great Win for Their Late Stage Investors Inherent Churn vs. Fixable Churn: You Have to Attack Both Top Videos and Podcasts: #1. They Dont Even Know It Yet. #3.

Churn 276

Churn AI B2B Engineering 276

SaaStr

DECEMBER 14, 2020

“Churn” is a term we all use in SaaS as a core metric, but its roots, as near as I remember and can tell, come from our B2C colleagues. Folks churn out of their Verizon plan, their Netflix subscription, etc. And sometimes they’ll churn even just for a modestly better deal. the dynamics are similar.

Churn 362

Churn Sales Hiring Systems Review B2C 362

Stax

MARCH 16, 2025

The average churn rate for the software industry as a whole is 14%. Thats actually one of the lowest churn rates across all industries. That said, industry experts agree that your SaaS companys goal churn should be below 2%. TL;DR The average software industry churn rate is 14%, but SaaS companies should aim for under 2%.

Payment Solutions 88

Payment Solutions Software Review Churn SaaS Payments 88

SaaStr

MARCH 13, 2025

The Traditional “Triple, Triple, Double, Double, Double” Rule is Dead for AI Startups If you’ve been in SaaS for a while, you know the classic growth rule of thumb: “Triple, Triple, Double, Double, Double.” ” It was the gold standard for B2B software companies scaling from $1M to $100M ARR.

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AI Scale Artificial Intelligence Startup 275

SaaStr

JUNE 13, 2022

Metrics are critical in SaaS, and you need to track them fastidiously. And I’m going to suggest two that will worry you a lot as you scale — Churn and Sales Cycle — you should track, but not obsess over, until you are well, well past initial traction, that first $1m-$2m ARR. >> Let’s Start with Churn.

Sales Hiring 276

Sales Hiring Scale Churn Metrics 276

SaaStr

JANUARY 16, 2025

The Second Most Important SaaS Hire? What Most SaaS Companies Get Wrong The standard playbook is: Hire sales Hit growth targets Eventually add CS when churn becomes painful But that’s backward. It’s the foundation that makes everything else in SaaS work – sales, marketing, product. Customer Success.

Sales Hiring 246

Sales Hiring Scale Sales Churn 246

SaaStr

AUGUST 16, 2021

We put out a call on Twitter the other day for folks’ best tips on what has really lowered churn for them this year. “1/ Divide your churn into manageable and unmanageable areas 2/ Strip out definable areas of churn reason (e.g. Are you segmenting churn? High usage can still mask churn.

Churn 327

Churn Sales Hiring Headcount Technical Review 327

SaaStr

MARCH 8, 2024

The burn and the churn. The burn was at a stunning $2m a month, and the churn had spiked. It’s sort of a death spiral: High churn, but no burn = struggle, but the engine self-perpetuates to an extent. What’s really hard to solve is The 3H’s: High Growth for a while — but High Churn. And High Burn.

Churn 305

Churn Startup SaaS Payments Venture Capital 305

SaaStr

JUNE 2, 2022

The amount of folks buying SaaS software is a force like we’ve never seen before, and even with some stock market drama, many top SaaS companies still trade at $4B, $10B, $20B or more just a decade after being founded. First, even in the darkest times of ’08-’09 — folks still bought more SaaS than ever.

SMB 361

SMB SaaS Churn Enterprise 361

SaaStr

MAY 12, 2023

So SaaS Capital put out its latest report on SaaS retention and NRR after having surveyed over 1,500 SaaS companies and professionals. We tend to intuitively think annual contracts help combat churn, but they really don’t — they just defer it. You can download it here. This data confirms that.

Startup 362

Startup SaaS Retention Churn 362

SaaStr

DECEMBER 4, 2024

Pricing is more than just a number on a contract — when used thoughtfully, it can become a strategic tool for your SaaS product that can drive product adoption, customer satisfaction, and business growth. It’s an active part of your product, and you have to evolve it just the same as you do with other products or product features.”

Payments 287

Payments Pricing Scale Revenue 287

SaaStr

NOVEMBER 4, 2021

The “Rule of 40” is one of the most commonly cited valuation benchmarks in SaaS for both public and private companies. The SaaS “Rule of 40” has gained popularity due to its simplicity, requiring only two common financial metrics to be added together. What Is The SaaS “Rule of 40”?

SaaS 319

SaaS Technical Review Benchmarks Azure 319

SaaStr

NOVEMBER 21, 2020

At least 100% net negative churn (i.e., upsell/account growth + renewals – churn) for very small businesses. Let’s look at some of the top public SaaS companies: Shopify — very SMB: 100%. On the low end for the enterprise SaaS companies, but still basically 120%. 130%+ in the enterprise, and for top B2D products.

Retention 349

Retention SMB SaaS Enterprise 349

SaaStr

JANUARY 17, 2021

In theory, many things can kill a SaaS startup after $4m-$5m ARR. In theory, many things can stop a SaaS startup after $4m-$5m ARR from getting to $100m. In practice, high churn is the only thing. But I’ve now looked into almost 20 SaaS companies that stalled out somewhere in the $20m-$40m ARR range.

SaaS 363

SaaS Venture Capital Churn Branding 363

User Pilot

OCTOBER 10, 2024

Can you imagine what the ideal SaaS customer onboarding process looks like? When done well, it can be the difference between a user becoming a loyal customer or churning after the first week. These will include: Userpilot Miro Slack Amplitude Mailchimp Airtable Loom Grammarly What is a SaaS onboarding process?

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Onboarding SaaS Software Communication 105

SaaStr

AUGUST 6, 2023

As a VP of sales at early stage SaaS companies, what’s your best advice for reducing churn rate? A few things that always work to drive down churn in the early days — and later: Make sure you have a strong Head of Customer Success … whose #1 goal is reducing churn. And lead to unnecessary churn.

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Churn Sales Hiring Customer Success Onboarding 242

SaaStr

JANUARY 13, 2021

Burnout is a real risk in SaaS. One piece of “evidence” — a lot of fairly successful SaaS startups all sell at about the same point in time … about 5 years in. High churn is very stressful in the long run (although it doesn’t feel that way in the short term). Not usually in the early days. This always works.

Travel 363

Travel SaaS Banking Startup 363

SaaStr

FEBRUARY 28, 2023

While Zoom Enterprise is growing at a healthy clip, churn is over 3% a month for its SMB customers As a result, it’s now predicting 1% growth next year 1% pic.twitter.com/i2k2W9QbVX — Jason Be Kind Lemkin  (@jasonlk) February 27, 2023 So Zoom has just been the craziest story of all time in SaaS. It probably couldn’t last.

SMB 276

SMB Churn Enterprise Engineering 276

SaaStr

MARCH 23, 2025

Top-tier SaaS companies aim for 120%+ NRR, meaning theyre growing revenue from their existing customers by at least 20% annually through upsells and expansions. A strong GRR (80-90%) ensures your base is solid, and youre not just masking churn with upsells. In short: VPCS Quotas : NRR, GRR, TTV, and customer advocacy.

VPCs (Virtual Private Cloud) 164

VPCs (Virtual Private Cloud) Customer Success Churn Retention 164

Tom Tunguz

MARCH 1, 2021

The idea is that in the future SaaS applications would be built on a single database, instead of each SaaS application writing to its own proprietary database. I thought it would be cloud-prem and customers driving SaaS products to use a single database. SaaS applications also write back to the CDW directly.

Data 363

Data Machine Learning Artificial Intelligence SaaS 363

SaaStr

JUNE 4, 2022

Dear SaaStr: What’s the Harder Part About SaaS Companies, At Each Stage? Most SaaS products are inexpensive. And human churn. At $1B+ ARR, the hardest part is you have to be so Multi-Product that you are really running 2-5 SaaS companies. A related post here: 6 Things in SaaS That Are Only Obvious At Scale.

SaaS 351

SaaS Headcount AWS Churn 351

SaaStr

APRIL 18, 2021

If you haven’t done a SaaS start-up before, it’s different. The reasons are many, but I think they can almost all be summed up in one key factor: SaaS compounds. What does this mean, that SaaS compounds? Success builds on success in SaaS. The post Want to Understand SaaS? Thank you Ohana!

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SaaS Travel Churn Revenue 330

SaaStr

AUGUST 29, 2022

SMB SaaS has a lot going for it: – Millions of them – Short sales cycles – Easier compete. So many VCs and others have gotten more and more excited about SMB SaaS. But SMB SaaS has a lot of challenges, too: Churn is much higher. of public SaaS companies are primarily SMB focused. Much higher.

SaaS Payments 347

SaaS Payments Scale SMB PayPal 347

SaaStr

MAY 22, 2023

Not easy, but easier and easier: There was a bump in 2016, a Flash Crash in SaaS, when budgets were slashed, but it didn’t last long enough to really impact renewal cycles. SaaS markets had fully recovered later that year. Even the 2008-2009 downturn, while truly brutal, didn’t hit SaaS as hard as the rest of the economy.

SaaS 316

SaaS Churn Sales Software 316

SaaStr

NOVEMBER 8, 2022

You know what’s back in fashion today in SaaS? And that’s a lot rarer in SaaS. But so many SaaS leaders aren’t really profitable at $1B ARR even, Why not? And it’s not just public SaaS companies that are often struggling to get profitable. I’m an investor in maybe 30 SaaS startups. So is SaaS cursed?

Scale 296

Scale SaaS Banking AWS 296

USIO

JULY 1, 2024

In the competitive world of Software as a Service (SaaS), generating recurring revenue is essential for sustainable growth. Here are three ways SaaS organizations can create recurring revenue without spending a dime. By focusing on customer satisfaction and reducing churn, SaaS companies can maintain a steady revenue stream.

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Payments SaaS Payments Payment Solutions Payment Services 306