Important Subtleties in Calculating Quarterly, Annual, and ATR-based Churn Rates
This post won’t save your life, or your company. But it might save you a few precious hours at 2:00 AM if you’re working on your company’s SaaS metrics and can’t foot your quarterly and annual churn rates while preparing a board or investor deck. The generic issue is a lot of SaaS metrics gurus […]
The Domo S-1: Does the Emperor Have Clothes?
I preferred Silicon Valley [1] back in the day when companies raised modest amounts of capital (e.g., $30M) prior to an IPO that took 4-6 years from inception, where burn rates of $10M/year looked high, and where $100M raise was the IPO, not one or more rounds prior to it. When cap tables had 1x, […]
Bookings vs. Billings in a SaaS Company
Financial analysts speak a lot about “billings” in a public SaaS companies, but in private VC-backed SaaS companies, you rarely hear discussion of this metric. In this post, we’ll use a model of a private SaaS company (where we know all the internal metrics), to show how financial analysts use rules of thumb to estimate […]
The Leaky Bucket, Net New ARR, and the SaaS Growth Efficiency Index
My ears always perk up when I hear someone say net new ARR — because I’m trying to figure out which, of typically two, ways they are using the term: To mean ARR from net new customers, in which case, I don’t know why they need the word “net” in there. I call this new business […]
The Question that CEOs Too Often Don’t Discuss with the Board
Startup boards are complex. While all board members own stock in the company their interests are not necessarily aligned. Founders may be motivated by a vision to change the world, to hit a certain net worth target, to see their name in an S-1, to make the Forbes 500, or — and I’ve seen crazier […]
How to Walk From a Deal
Like it or not, once in a while it’s appropriate for a vendor to walk away from a prospective deal. Why might you want to do that? You think your product is a poor fit with the customer’s needs. You believe there is insufficient budget to achieve success on the project. You feel like the […]
My SaaStr Talk Abstract: 10 Non-Obvious Things About Scaling SaaS
In an effort to promote my upcoming presentation at SaaStr 2018, which is currently on the agenda for Wednesday, February 7th at 9:00 AM in Studio C, I thought I’d do a quick post sharing what I’ll be covering in the presentation, officially titled, “The Best of Kellblog: 10 Non-Obvious Things About Scaling SaaS.” Before […]
Using Time-Based Close Rates to Align Marketing Budgets with Sales Targets
This post builds on my prior post Win Rates, Close Rates, and Milestone vs. Flow Analysis. In it, I will take the ideas in that post, expand on them a bit, and then apply them to difficult problem of ensuring you have enough marketing demand generation budget to hit your sales targets. Let’s pretend it’s […]
Win Rates, Close Rates and Milestone vs. Flow Analysis
Hey, what’s your win rate? It’s another seemingly simple question. But, like most SaaS metrics, when you dig deeper you find it’s not. In this post we’ll take a look at how to calculate win rates and use win rates to introduce the broader concept of milestone vs. flow analysis that applies to conversion rates […]
Don’t Let Product Management Turn Into “The Roadmap Guys”
At many enterprise software companies product management (PM) ends up defaulting into a role that I can’t stand: The Roadmap Guys*. Like a restaurant with one item on the menu, the company defaults into ordering one thing from product management: a roadmap pitch. “The VP of PM is in Boston and Providence this week, can […]
