2014 Pacific Crest SaaS Survey – Part 1
For the third year in a row, we worked together with Pacific Crest
Securities, an investment banking firm with a specific focus on SaaS, to
survey 306 SaaS companies.
This represents nearly double the # of respondents from last year, giving us
deeper benchmarking data and insights to share on the growth and operations
of the companies in this space.
We also welcome this year the participation of OpenView, an expansion stage
venture capital firm specializing in B2B Software, who brought additional
I want to extend my personal thanks to the many readers of this blog who
participated in the survey. My thanks also go out to David Spitz and his team
at Pacific Crest Securities (@dspitz and @PacCrestSec, respectively on
Twitter) for their hard work on the survey. Part 1 of the results of the
survey, which focuses on growt... (more)
“If you cannot measure it, you cannot improve it” – Lord Kelvin
This article is a comprehensive and detailed look at the key metrics that are
needed to understand and optimize a SaaS business. It is a completely updated
rewrite of an older post. For this version, I have co-opted two real
experts in the field: Ron Gill, (CFO, NetSuite), and Brad Coffey (VP of
Strategy, HubSpot), to add expertise, color and commentary from the viewpoint
of a public and private SaaS company. My sincere thanks to both of them for
their time and input.
SaaS/subscription businesses are more complex th... (more)
In the many thousands of articles advising entrepreneurs on what they have to
focus on to build successful startups, much has been written about three key
factors: team, product and market, with particular focus on the importance of
product/market fit. Failure to get product/market fit right is very likely
the number 1 cause of startup failure. However in all these articles, I have
not seen any discussion about what I believe is the second biggest cause of
startup failure: the cost of acquiring customers turns out to be higher than
expected, and exceeds the ability to monetize th... (more)
This article looks at the high level goals of a SaaS business and drills down
layer by layer to expose the key metrics that will help drive success.
Metrics for metric’s sake are not very useful. Instead the goal is to
provide a detailed look at what management must focus on to drive a
successful SaaS business. For each metric, we will also look at what is
Before going any further, I would like to thank the management team at
HubSpot, and Gail Goodman of Constant Contact, who sits on the HubSpot board.
A huge part of the material that I write about below comes my exp... (more)
As a serial entrepreneur, I learned a lot of lessons from things that
didn’t work. These lessons later on shaped my ideas on what would be needed
to build a successful startup company. When I became a VC, I realized that
these same lessons could be applied to helping evaluate the many businesses
that I was getting to see. Whilst the following criteria are by no means a
guarantee of success, or the only criteria that you should think about, I do
believe they can be very helpful.
So in no particular order, here is a list of six questions that I learned to
ask to validate my own st... (more)