David Skok in this lecture at the Web Summit, summarizes the key metrics that you need to track to ensure success and growth of your Saas business. This is hands down one of the simplest presentations you will find on the topic.
Here is what he covers.
What is the Key Startup growth goals? It should be repeatable, Scalable and profitable. How to do that? Grow your bookings quarter after quarter. And how do you measure that?
Here is the formula –
Net New ARR = [Revenue from New Customers + Up-sell to existing customers ] – Revenue loss from Churn.
The other key is to hire Sales team on time. It requires ramp up time and perfect Onboarding and Training. Recruiting is so crucial that according to David you need to ensure you have that skill set in-house. How to know this is working? 75% of sales team should be hitting 75% of quota and 50% should be exceeding quota.
Focus next on Negative churn. -2.5% churn can make all the difference between a some what flat growth and a hockey stick growth without a revenue trough.
And collect cash upfront.
There is a lot more. Be sure to have your pen and paper beside as you sit down to watch.
Where I learnt this #387
The SaaS business model & metrics: Understand the key drivers for success
