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

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

More SaaS + Software Stats

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

At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

In contrast, only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

Revenue Churn vs Customer Churn – why are they different?

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

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

How To Make Pricing A Constant Process In Your Organization

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

More Growth Strategy Stats

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

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Software and online services are in a period of dizzying growth

It’s essential to have a point of view that puts a stake in the ground and breaks through the clutter.

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

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

How to Reduce Churn

Between the SMB and Enterprise customer types, the top-quartile performers not only have net-revenue churn that is 14% to 23% percentage less than the average performers but also have net-revenue churn that is negative in an absolute sense

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years