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

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

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

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

Three uses for the SaaS Guidelines

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

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

54% treat upselling and add-on sales as high priority

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

More Growth Strategy Stats

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

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.

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

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; this will become a major drag on growth

The average SaaS company spends just 6 hours determining their pricing strategy

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

Revenue Renewal Rate= (MRR up for the renewal at beginning of month- MRR not renewed at the end of month)/ MRR up for renewal at beginning of month)

How Often Should The Pricing Committee Be Meeting And Making Changes?

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.