SaaS/subscription businesses are more complex than traditional businesses. Traditional business metrics totally fail to capture the key factors that drive SaaS performance. In the SaaS world, there are a few key variables that make a big difference to future results. This post is aimed at helping SaaS executives understand which variables really matter, and how to measure them and act on the results.
Entrepreneurship in Britain continues to remain very much in vogue, ably assisted by heavy backing from most quarters (not least the media and government). Prime Minister David Cameron has put entrepreneurship to the forefront of his “strategy for growth”. “There’s only one strategy for growth we can have now and that is rolling up our sleeves and doing everything possible to make it easier for businesses to grow, to invest, to take people on, he told BBC News.
The following blog post by Tom Gorski from SaaS Genius outlines 21 of the most important SaaS Startup Metrics
This blog is well worth a scan as it breaks key metrics down into different buckets. I think trying to measure 21 KPI’s is a little too many so would take the view that it is best to zone in on a smaller subset depending on where your SaaS startups is in its lifecycle. The article breaks the metrics down into three main buckets to help with this.
Many people ask us for help understanding what all the SaaS metrics mean, why they’re useful and how they’re calculated. We thought we’d invest some time detailing the most important metrics for SaaS businesses into a two-page cheat sheet.
“UTM” stands for “Urchin tracking module.” Urchin Software Corporation was acquired by Google in 2005, and their software laid the groundwork for what we now know as Google Analytics.
Customer Lifetime Value (LTV) for SaaS businesses is perhaps one of the most difficult metrics to calculate. Use our free cheat sheet to get to a reliable estimate, and get a better picture of the health of your business.
At 19 I started a SaaS company in my dorm room and just sold it in February after my 25th birthday mainly due to luck and blind hard work. Over the companies life, we raised $2.5M in venture capital, drove $5M in sales (mainly by cold emailing potential partners), and grew our customer base to over 10,000 paying customers.
One of the most powerful levers for SaaS companies to master is payback period. Payback period is the number of months a company requires to payback its cost of customer acquisition. The median SaaS startup has a payback period of 15 months on a gross margin basis.
A cohort study or panel study is a form of longitudinal study used in medicine, social science and ecology. It is one type of study design and should be compared with a cross-sectional study.
Over the last few years I’ve helped quite a lot of SaaS startups to create or fine-tune their KPI dashboards. While every situation is a bit different there’s also a lot of overlap, which made me think that it would make sense to publish my template (not without polishing it a bit). I hope other SaaS startups will find it useful, and it will also make it easier for us to communicate what KPIs we’re looking for when we talk to SaaS entrepreneurs.
In case you haven’t started to think about your plan for 2017 yet, now’s the time. To help you a little bit with your planning, here are three little tools that you might find useful. If you’re a long-time reader of this blog, you may have seen them before.
Entrepreneurs need to ask the right questions: how can I measure and optimize each step of my funnel to grow quickly and expand my customer base? One simple answer is: AARRR.
aaS companies are handed dozens of shiny metric tools on a tray and told to measure things. It can be incredibly difficult to try to assess this collection of numbers and figure out where to begin.
Lately I’ve been talking to more entrepreneurs that have product/market fit and are working to find a repeatable customer acquisition process (see 5 Steps to Startup Success in 30 Words). Now, sales and marketing metrics become critical and it’s time to figure out what works.
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