Statistic Info

art 1 of the survey results focuses on growth rates, go-to-market trends and cost structure. A new highlight in this year’s survey is data on balancing growth and profitability in SaaS companies, commonly known as The Rule of 40%.

You can find Part 2 results here. Part 2 compares application delivery methods, covers more on operational costs, and offers data on gross margins, contract terms, churn rates, capital requirements and accounting methods.

We’ve also created the forEntrepreneurs 2016 SaaS Infographic. The infographic pulls together major takeaways from the SaaS Survey and ties in advice and insights on key metrics.

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

Forentrepreneurs

More SaaS + Software Stats

SAAS companies invest between 80% and 120% of their revenue in sales and marketing in the first 5 years of their existence

SaaS organizations are now operating in over 100 countries

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

SaaS solutions have the highest security features with 95% security failures due to human error

Negative Churn and Expansion Revenue

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

The median SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Cloud-hosted applications have a 99% uptime

The best place to hide a dead body is page 2 of Google search results.

More Growth Strategy Stats

A University of Texas study showed that women ask for $7,000 less than their male counterparts in job interviews

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

In 2017, Foxconn Technology Group achieved a net income of 135.37 billion New Taiwanese dollars, the equivalent to approximately 4.55 billion U.S. dollars.

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

Three uses for the SaaS Guidelines

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes