Slides presented at SaaS Metrics Palooza 2024 by Matt Harney, Founder of Cloud Ratings.
SaaS Historical Benchmarks - 2010 To 2023
2010 to 2021 Benchmarks:
‘10-’21 Change
‘10-’21 CAGR 2022 2023
‘10-’23 Change
'10-’23 CAGR
‘10-’23 Heatmap
2010 2021
Net Revenue Retention 106% 109% 3% Gross Revenue Churn 5% 14% 9% % Revenue From Expansion 19% 46% 27%
103% 101% (5%) 11% 11% 6% 33% 35% 16%
New Logo CAC $0.93 $1.78 91% 6% $1.76 $1.76
89% 5%
Expansion CAC $0.28 $0.61
118% 7% $0.69 $1.00 257% 11%
Field Sales CAC $1.00 $2.07 107% 7% Inside Sales CAC $0.90 $1.40 56% 4%
2022 to 2023 Benchmarks:
Revenue Per Employee ($k) * $142 $143
1% 0%
$156
10% 1%
Margins: Gross Margin 71% 73% 2% Sales + Marketing 32% 40% 8%
72% 74% 3% 34% 34% 2% 30% 30% 7% 24% 23% 9%
R+D 23% 25% 2% G+A 14% 19% 5%
EBITDA 1% (10%)
(11%)
(10%) (10%)
(10%)
Full 2009-2023 Study
Revenue Growth 45% 28% (17%) Rule of 40 ** 46% 18% (28%)
30% 27% (18%) 14% 14% (32%)
Software In 2024: A Maturing Growth Industry
Source: Pacific Crest / Key Banc / Benchmarkit Surveys. *: Rev/FTE starts 2014 **: 2022 + 2023: Derived from P&L, differs from report median. Social Attribution: @CloudRatings + @SaaSletter
SaaS Funding History - 2008 - 2024
($ in millions)
Early Stage
Late Stage
$14,000
"A decade ago, an interesting category would have ~2-3 companies at the Series A. Now, there can be 10+" - tenured, Series A-focused enterprise GP
$12,000
$10,000
Stripe - Series I: $6.5b - Mar’23
$8,000
$6,000
$4,000
$2,000
$0
Source: Crunchbase Hubs Social Attribution: @CloudRatings + @SaaSletter
Quadrant View: Crowded
GRID EXAMPLE
Social Attribution: @CloudRatings + @SaaSletter
Product + NPS: Be So Good They Can’t Ignore You FACTOR VS GRID RANK
Leaders
High Performers
Contenders
Niche
Grid Rank:
High Performers Leaders
Meets Requirements
Niche Contenders
High Performers Leaders
Ease of Use
Niche Contenders
High Performers Leaders
Ease of Set Up
Niche Contenders
Competitors age poorly = ongoing opportunity
High Performers Leaders
Ease of Admin
Niche Contenders
Emerging, younger High Performers need outsized NPS to break through
High Performers Leaders
Ease of Doing Business
Modest differences in user experience factors... add up to a large NPS gap
Niche Contenders
High Performers Leaders
Quality of Support
Niche Contenders
High Performers Leaders
Product Direction
Niche Contenders
High Performers Leaders
NPS
Niche Contenders
-30%
-20%
-10%
0%
10%
20%
Cloud Ratings + G2 Primary Research Covering 4,222 Software Companies Social Attribution: @CloudRatings + @SaaSletter + @G2dotcom
Higher NPS Is Achievable
FACTOR R-SQUARES VS NPS
FOR EARLY STAGE
0.00
0.20
0.40
0.60
Quality of Support
0.61
Very Achievable
Somewhat Achievable
Meets Requirements
0.59
Very Achievable
Ease of Doing Business
0.57
Very Achievable
0.56
Ease of Use
Very Achievable
Ease of Set Up
0.46
0.45
Product Direction
Very Achievable
ROI
0.16
Very Achievable ***
0.13
Year Founded
Impossible
0.13
Months To Go Live
Very Achievable
Adoption 0.01
Somewhat Achievable
*** ROI: Early-stage software companies tend to underinvest in ROI messaging + proof vs established leaders Social Attribution: @CloudRatings + @SaaSletter + @G2dotcom
SDR View: Effort Up, Results Down
# Attempts In A Cadence Quality Conversations Per Day
12.0
10.0
Attempts: 11.3
QC's: 8
8.0
6.0
Attempts: 7.3
4.0
QC's: 3.6
2.0
0.0
2014
2016
2018
2020
2022
Source: The Bridge Group Social Attribution: @CloudRatings + @SaaSletter
AE View: Missed Quota, Slower Ramps
Quota Attainment
Ramp > 5 Months
80.0
80%
5+ Mo Ramp: 63%
60.0
60%
Quota: 74%
Quota: 51%
41%-48%
40.0
40%
20%
20.0
5+ Mo Ramp: 17%
0.0
2012
2015
2017
2020
2022
2024
Source: The Bridge Group, RepVue Social Attribution: @CloudRatings + @SaaSletter
New Check Engine Lights - via
TOP REP OUTPERFORMANCE
ICP PIPELINE MIX ICP represents only 18% of pipeline ICP pipeline flat
.00
16% of reps generate 83% of revenue in H1 2024
10.2x
.00
8.9x
.00
6x
.00
4x
.00
.00
.00
2022
2023 - H1
2023 - H2 2024 - H1
Source: Ebsta + Pavilion Sales Benchmarks Reports Social Attribution: @CloudRatings + @SaaSletter
Missed 2024 Forecasts Unacceptable
90% Confidence Level: “I should come in under my forecast once every 2.5 years (10 quarters).” - Dave Kellogg
Source: Pavilion Member Pulse Report, Dave Kellogg on Kellblog.com Social Attribution: @CloudRatings + @SaaSletter
Poor Forecasts Drove GTM Overhiring In 2022
= Sales Net Hires / Fires
+29% Capacity Post Market Peak
= Marketing Net Hires / Fires
+ Alto Model
2019
2020
2021
2022
2023
2024
Index Components: Proprietary to Cloud Ratings | Data Source: People Data Labs Social Attribution: @CloudRatings + @SaaSletter
C-Suite More Involved + FOMU: Fear Of Messing Up
Engaging the CXO early in stage increases sales velocity by 9.2x
Top performers are 250% more likely to have the C-suite engaged early
Source: G2 CMO at SaaStr 2024, Ebsta + Pavilion Sales Benchmarks Social Attribution: @CloudRatings + @SaaSletter
It All Comes Back to ROI
Source: G2, Cloud Ratings, Morgan Stanley Counterpoint Global Social Attribution: @CloudRatings + @SaaSletter
ROI More Important Than Ever -> Discuss Early
Source: Ebsta + Pavilion Sales Benchmarks Reports Social Attribution: @CloudRatings + @SaaSletter
AI ROI by Function - via
Too Early to Tell
Little to no ROI (<5%)
Some ROI (5-20%)
Significant ROI (20+%)
Too Early to Tell
Little to no ROI (<5%)
Some ROI (5-20%)
Significant ROI (20+%)
3%
13%
21%
29%
42%
42%
63%
59%
58%
26%
42%
57%
32%
11%
13% 8%
13%
21%
17%
14%
10%
6%
Product + Engineering
Information Technology
Marketing
N=36 Sales
Finance N=22
Operations N=40
N=51
N=50
N=36
Cloud Ratings analysis of ICONIQ Growth’s “State of AI” Report. Social Attribution: @CloudRatings + @SaaSletter
AI = Winning The Next Game
"It's not small sales teams with credit cards that can go swipe. It's actually the market-leading companies that like winning because they see AI and think, ' We won the last game, and now AI helps us win the future . How do we get AI to as many people in our organization as possible?' "
INTERNAL
EXTERNAL
Matt Slotnick Co-Founder + CEO
When selling AI in ‘24/’25 -> ICP = Winners + Leaders
Reminder: ICP Win Rates Are 2x - 3x via
ON OUR PODCAST:
Source: McKinsey, scaleMatters, Ebsta, Poggio Social Attribution: @CloudRatings + @SaaSletter
Signs Of Hope - via
Source: Battery Ventures Social Attribution: @CloudRatings + @SaaSletter
Key Messages A Maturing Growth Industry Best Seen At “Tip of Spear” It All Comes Back To ROI C-Suite ROI Proof Early In Sales Cycle -> We Can Help Opportunities
Be So Good They Can’t Ignore You AI Revitalizes Software Growth Story Better Forecasts -> More On This Soon
Matt Harney matt.harney@cloudratings.com | @saasletter | saasletter.com
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