Statistic Info

One way of measuring the efficiency of a company’s revenue model is to benchmark revenue per employee. Google and Facebook, the two most efficient companies, generate $1M per revenue per employee per year.

Setting aside those exceptional cases and focusing instead on SaaS companies, the typical average revenue per employee is about $190k to $210k per year.

Tomasz Tonguz

More SaaS + Software Stats

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

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”

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 annual unit churn for SAAS companies was 10% in 2016

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

Only 8% of large companies use internet sales strategies. The proportion of companies relying on internet sales increases as company size decreases

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

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

More Growth Strategy Stats

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

Is your SaaS business viable?

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

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

In 2020, China is expected to generate 55 billion U.S. dollars in the global medical technology market.

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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

Internet Sales strategies have a significantly lower CAC of just $0.42

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

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