Statistic Info

High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.

Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.

Tomasz Tonguz

More SaaS + Software Stats

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

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

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

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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

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

High-growth companies offer a return to shareholders 5 times greater than medium-growth companies

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

Growing faster has twice as much impact on share price as improving margins

More Growth Strategy Stats

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

Is your SaaS business viable?

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

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

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

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

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

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

Analysed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

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