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This is because they have to invest heavily upfront to acquire the customer, but recover the profits from that investment over a long period of time. The faster the business decides to grow, the worse the losses become. Many investors/board members have a problem understanding this, and want to hit the brakes at precisely the moment when they should be hitting the accelerator.

In many SaaS businesses, this also translates into a cash flow problem, as they may only be able to get the customer to pay them month by month.

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More SaaS + Software Stats

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

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

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

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

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

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

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

More Growth Strategy Stats

Since churn is so important, wouldn’t it be useful if we could predict in advance which customers were most likely to churn?

When venture capitalists participate in seed rounds, the average round size is 3x larger

Google only has a 30 percent female workforce

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

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

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

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

How To Make Pricing A Constant Process In Your Organization

36% of SaaS businesses managed to reduce their revenue churn over the last 12-months

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%