In the first 3 years, these public SaaS companies spend between 80 to 120% of their revenue in sales and marketing (using venture dollars or other forms of capital to finance the business). By year 5, that ratio has fallen to about 50% where it remains for the life of the business.
Despite the divergent revenue ramps, the marketing and sales spend patterns for these companies resemble each other strongly and serve as good benchmarks for high-growth SaaS startups.
In case you’re curious, below is the “typical” revenue growth trajectory for these SaaS companies: $50M in year five, $100M in year ten.
Tomasz TonguzLess than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
High-growth companies offer a return to shareholders 5 times greater than medium-growth companies
How To Make Pricing A Constant Process In Your Organization
SaaS organizations are now operating in over 100 countries
Growing faster has twice as much impact on share price as improving margins
Investment in marketing automation tools is expected to reach $25 billion by the year 2023