Category Archives: Metrics

Slides from my Radia Accelerator Presentation: SaaS Metrics 101

Here’s a quick post to share my slides from the presentation I gave today at the Radia Accelerator, a UK-based accelerator for female SaaS entrepreneurs, as part of my work with Balderton Capital.

Our topic was SaaS Metrics 101. In building the deck, I tried to do 3 things

  • Start with the basics: definitions and such.
  • Build up in layers: start simple and layer into complex.
  • Cover the metrics you are likely to be asked about as a SaaS entrepreneur: pick based not upon what I like, but on what I think you’re likely to get asked (e.g., LTV/CAC vs. NRR)

I want to thank the audience for their attendance and engagement. To use my favorite George W. Bush malapropism, I greatly misunderestimated the time I’d need to get through the material, but by taking every minute and staying reasonably interactive we made it through. And remember, there are plenty of links in the deck for people who want to dig deeper.

For those interested in this topic, I did a podcast a while back on SaaSihimi which is the spiritual equivalent of this session, but in interview format and only slightly out of date.

Below are my Radia Accelerator slides. You can also download them on Drive.

My Appearance on the Exit 5 Podcast: Traits of a High-Performing CMO

Just a quick post to highlight a recent podcast appearance I did on the Exit Five podcast, which is produced by the Exit Five community for B2B marketers, led by veteran marketer Dave Gerhardt.

In the episode we touch on the following topics:

  • My background and career path and my positioning of such: 10 years a CMO, 10 years a CEO, and independent director at 10 companies.
  • The origin of Kellblog, which was originally called The MarkLogic CEO Blog, created so I could walk in the footsteps of my media customers.
  • My early experiment with ChatGPT, see the comments on the post for an example that a friend did to prompt it better.
  • What makes a great CMO?
  • How to be a great partner to sales.
  • How and why to become the dispassionate analyst. (Or anchor — I don’t make the news, I just tell you about it.)
  • How to be a great partner to CEO.
  • Why is it often hard to partner with sales? Misaligned incentives or more than that?
  • How and why to become Woodstein with the VP of Sales.
  • How to call out misalignment and what to do about it.
  • When in doubt, serve sales, not the CEO.
  • How to avoid finger-pointing at the stage 1 to stage 2 handoff.
  • The idea that marketing owns a lot of the high funnel, and rides shotgun on the low funnel — and can help on both.
  • How to present information, non-defensively, and without automatically providing reasons or fixes. (Instead just seek discussion on whether we think it’s a problem and how high a priority it is to fix it.)
  • The right answer to most marketing challenges is this: the one I agree to with the VP of sales. The idea being that you have 15 marketing tools in your bag to fix something and want to agree with sales on which ones to use, when.
  • The importance of benchmarking and metrics.
  • A reminder to use market research — for many reasons, but in particular to avoid navel-gazing.
  • Spend 5-10% on measurement to ensure effectiveness on the other 90-95% rule.
  • Why the CMO should develop a strong overall understanding of the business and its metrics.

The episode is available on Apple, Spotify, Google, and Castbox.

I thank Dave for having me. I think the episode turned out really well thanks to his thoughtful and informed questioning.

Register for Balderton SaaS Metrics That Matter Webinar on June 28, 2023

Just a quick post to invite you to register for a Balderton-hosted, public webinar on June 28th where Michael Lavner and I will discuss the SaaS Metrics That Matter in 2023.

This webinar will based on the slides that we used last week in London at a Balderton portfolio company breakfast event, which in turn were based on the presentation I did at KiwiSaaS last month. The point of the presentation is to discuss the metrics that matter now, given the change in the business and funding environment. The slides are available on Slideshare (or Drive) if you want to get a clear sense for what we’ll be talking about.

The fun part of the presentation should be not only the audience questions (which we’ll be taking via chat) but also the back-and-forth between Michael and myself as we compare and contract the operator and investor perspective on SaaS metrics.

The event will be held at 8 am Pacific, 4pm UK, and 5pm Europe time on June 28, 2023. Register here. I hope to see you there.

Slides from the Balderton Version of Metrics That Matter in 2023

With the able help of Michael Lavner, we did a special, live presentation and discussion of my KiwiSaaS talk, Metrics That Matter in 2023, for Balderton portfolio executives.

These slides are largely the same as the KiwiSaaS ones, with the notable exception that European companies may find some of the data more relevant because Michael was able, in several cases, to replace my largely US-based benchmarks with data from Balderton’s universe of European SaaS companies.

We had a great discussions with those who attended and dove into the more advanced topics of:

  • Growth-weighted rule of 40 scores.
  • Growth endurance (also known as growth retention or growth persistence) as an increasingly popular metric. See this post by Christopher Janz which builds upon this post by Rory O’Driscoll. In short, tell me your current ARR and your ARR one year ago, and I’ll tell you when you’ll hit $100M in ARR. (I love that quote.)
  • NPS and employee NPS (eNPS) as important, but nevertheless second-tier, SaaS metrics from the investor point of view.
  • Several discussions contrasting the operator and the VC point of view on metrics in general. This is one of my favorite topics and I need to do more work here because it goes well beyond the CAC Payback Period (CPP) example I frequently use.
  • A reminder that CPP is a risk metric, not a return metric — a statement I expect to have engraved on my headstone.
  • The tendency of growth alone vs. Rule-of-40 score to better predict enterprise value multiples and how this varies over time. (I consider the market to be in an inversion when growth alone is the better predictor.)
  • The importance of understanding the composition of the data set when benchmarking. In a perfect world, you could segment SaaS benchmarks by aspiration: IPO-track, PE-track, and bootstrap-track. Some data sets mix these three groups, others don’t. It’s key to know what you are looking at, because you want to benchmark against companies with aspirations similar to your own.

I’ve embedded a copy of the slides below. You can get them on Google Drive as well.

Thanks to those who attended the session, and please note that we’ll soon be hosting a public webinar version of this as well. All are welcome, and I hope to see you there.

Metrics That Matter in 2023: My KiwiSaaS Presentation Slides

Just a quick post to share the slides from the presentation I gave today at the KiwiSaaS conference to discuss the SaaS metrics that matter in 2023 and 2024.

The presentation has three sections:

First, an introduction which quickly reviews the ways the startup world has changed in the past 6 months.  Simply put:  Toto, I have a feeling we’re not in 2021 anymore.

Second, a three-step set of recommendations for what to do about that:  (1) extend your runway, (2) make a plan to re-earn your last round valuation, and (3) enable your next round, likely in 18-24 months, by focusing on the metrics that matter in this new world.

  • Phrasing these strategies in terms of songs/albums:  (1) Staying Alive, (2) Get Back [to where you once were valued], and (3) Born to Run [convince VCs that, “tramps like us, baby, we were born to run” — i.e., that we have a lean machine where ARR is a predictable output of VC investment.]
  • Note that I also did a Balderton webinar (Balancing Growth and Burn in 2023) on this topic with David Thevenon.

Third, a one-slide-per-metric review of the set of metrics that matter in 2023:  ARR growth, free cashflow margin, Rule of 40 score, subscription gross margin, burn multiple, ARR/FTE, CAC ratio, CAC payback period, NRR, and GRR.

  • This includes an explanation of why I excluded (what I view as old school) churn, lifetime value (LTV) and LTV/CAC analysis from those metrics.  That explanation is also available in considerably longer form in my SaaStr talk:  Churn is Dead, Long Live NDR.

The presentation is chock full of links to interesting articles (e.g., an amazing 75-page interview transcript with Sequoia founder Don Valentine as part of an oral history of Silicon Valley, a great breakdown on stock-based compensation by Janelle Teng) and it includes a slide on people to follow and sites to visit if you are interested in this material.  An image of it is pasted below, the presentation itself has live links.

The slides of the presentation are embedded below.

For those who don’t use Slideshare, the presentation is also available on Google Drive.

Thanks to KiwiSaaS for inviting me, the audience for putting up with a remote live presentation, and to the sources I included as data in the slides — particularly RevOps Squared, on whose 2022 SaaS Benchmarks survey I relied fairly heavily.