Quote Info

David Skok has noted that there is a problem with using this formula, as you may have several expensive people in the team that should scale to handle a larger number of customers as you grow. In this case, your CAC will be too high. David suggested making a very simple adjustment to the Sales & Marketing expenses to take only a portion of those salaries and expenses in the early days. This will provide a better indication of how CAC will look in the future when you are at scale.

 

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More SaaS + Software Stats

Moving from $1.5 million with an eye towards $10 million in ARR is a tough a task and will take an excellent VP of sales to get you there

Revenue Churn Rate = (RCR) (MRR at beginning of month – MRR at end of month) – MRR in upgrades during month / MRR at beginning of month

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

Companies with longer contracts (2+ years) reported the lowest annual unit churn

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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

56% treat “Existing Customer Renewals” as high priority

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn

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

More Growth Strategy Stats

in 2016, women-led companies received $1.46 billion in investments from venture capitalists. Male-led companies, on the other hand, received $58.2 billion

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

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

At Facebook, 15 percent of tech roles are staffed by women

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

At Twitter, 10 percent of tech roles are staffed by women

High-growth companies generate 60% fewer sales opportunities than low-growth companies

Women in western countries use the internet 17 percent more than their male counterparts