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

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In other words, software companies must grow quickly to survive. Slow growing businesses suffer from the lack of oxygen that fuels growth. Raising money is more expensive. Hiring becomes challenging. Without the capacity to invest capital in growth or the ability to compete for top talent, the slow growth cycle reinforces itself.

The McKinsey study breaks down rapid growth into two parts. In part one, the authors identify five key factors of success in the early stages. Large market; logical revenue model; rapid-adoption; stealth/secrecy; proper compensation of the leadership team.

This list will surprise no one, except perhaps for stealth. Is secrecy and stealth a prerequisite to success for every massive software company? For most bottoms-up businesses, stealth isn’t a competitive advantage, but awareness is.

Part two is more interesting. The defining characteristic of enduring software businesses is they “master the transition from one act to the next.” Fast-growth startups must metamorphose constantly because the market demands it of them.

More SaaS + Software Stats

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

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

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

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

More than 1/2 of SAAS companies increased their spending on customer retention last year

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

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

The median cost for a SaaS company to acquire a dollar of new customer revenue is $1.18

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

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

More Growth Strategy Stats

The boom in the industry is creating more jobs for techies. Data reveals there were 627,000 unfilled positions in tech in April 2017

In 2017, the global adoption rate for biotech soybean amounted to 77 percent.

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

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

How To Make Pricing A Constant Process In Your Organization

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

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.

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

They may forget what you said, but they will never forget how you made them feel.

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate