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

73% of organizations indicated nearly all their apps will be SaaS by 2021

If a software company grows at 20% annually, it has a 92% chance of ceasing to exist within a few years

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

Is your SaaS business viable?

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

How to Reduce Churn

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

More Growth Strategy Stats

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

80% of venture capital investments take place in the enterprise

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

orecasts suggest that global blockchain technology revenues will experience massive growth in the coming years, with the market expected to climb to over 23.3 billion U.S. dollars in size by 2023.

Invention is 10% inspiration and 90% perspiration.

SAAS companies need to track the number of visitors, trials and closed deals; And also track the conversion rates, with the goal of improving those over time

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month