Software and online services are in a period of dizzying growth

From Mckinsey
Quote in SaaS & Tech Growth Strategy

Year-old companies are turning down billion-dollar buyouts in the hopes of multibillions in a few months. But we have seen similar industry phases before, and they have often ended with growth and valuations fizzling out. The industry’s booms and busts make growth, an essential ingredient in value creation, difficult to understand. To date, little empirical work has been done on the importance of revenue growth for software and Internet-services companies or how to find new sources of growth when old ones run out.

More SaaS + Software Stats

Achieving a SaaS Quick Ratio of 4 is a good benchmark for young, high-growth companies but the equation changes as those companies reach scale

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”

SaaS organizations are now operating in over 100 countries

The very best SaaS businesses have a negative revenue churn rate and will have a Revenue Retention Rate of greater than 100%

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

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

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

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

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

Is your SaaS business viable?

More SaaS & Tech Growth Strategy Stats

Women in western countries use the internet 17 percent more than their male counterparts

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

Internet sales strategies are the only sales method to see a decline in CAC, dropping from $0.54 to $0.42 between 2014 and 2015

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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