My Final Verdict on Multi-Year, Prepaid Deals
After years of experience with and thinking about multi-year, prepaid SaaS deals, my mental jury is back in the box and the verdict is in: don’t do them. Why? Multi-year, prepaid deals: Are not the norm, so they raise eyebrows among investors and can backfire with customers [1]. Complexify SaaS metrics. SaaS businesses are hard […]
The Big Mistake You Might Be Making In Calculating Churn: Failing to Annualize Multi-Year ATR Churn Rates
Most of thinking, definitions, and formulas regarding SaaS unit economics is based on assumptions that no longer reflect the reality of the enterprise SaaS environment. For example, thinking in terms of MRR (monthly recurring revenue) is outdated because most enterprise SaaS companies run on annual contracts and thus we should think in terms of ARR […]
