After $10M in ARR, the median growth rate slows to just under 50%

SaaS + Software
Statistic in Growth Strategy

Statistic Info

The future of growth is product led. This isn’t merely the latest fad or buzzword. Data shows that companies leveraging a PLG strategy perform better on average -faster growth, higher margins, lower burn and stronger valuation multiples. As with many new operational strategies, OpenView believes product led growth will soon become the norm, making it table stakes for SaaS companies that want to win in their markets. What is your company doing to adapt to the product led growth revolution

HubSpot

More SaaS + Software Stats

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

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

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

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

Negative Churn and Expansion Revenue

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

More Growth Strategy Stats

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

The venture-backed companies that were acquired most often had a 7 percent share of female execs, as opposed to 3 percent at unsuccessful (unacquired) firms

47% of millennials want to work at diverse companies, according to a recent study.

Negative Churn and Expansion Revenue

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

When determining Sales Capacity, “it’s worth noting that some percentage of new sales hires won’t meet expectations, so that should be taken into consideration when setting hiring goals. Typically we have seen failure rates around 25-30% for field sales reps, but this varies by company. The failure rate is lower for inside sales reps. can be counted as half of a productive rep”

SaaS organizations are now operating in over 100 countries

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

A 1% increase in pricing strategy yields an average 11% increase in profit

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