The document discusses key areas a CFO of a SaaS startup should focus on when managing rapid growth, including implementing regular reporting cycles, building flexible long-term financial models, hiring the best talent, planning integrated systems, aligning strategic planning, and conducting honest reviews of goals and results. The CFO should establish monthly and quarterly reporting, track unit economics, recruit top talent, integrate systems cost-effectively, clearly communicate strategy internally and externally, and rigorously review actual performance versus goals.

1. MANAGING GROWTH IN SAAS
STARTUPS
by David Stack

2. OVERVIEW

3. MANAGING AND
SUPPORTING
GROWTH IN A SAAS
STARTUP IS ONE OF
THE MOST CRITICAL
AND CHALLENGING
ASPECTS OF THE
CFO ROLE.

4. ““As a CFO of several startups I have
seen and supported rapid growth
rates for these companies and
implemented processes to help with
long-term growth.”
-David Stack, CFO, Qstream

5. HERE ARE SEVERAL KEY AREAS YOU
SHOULD FOCUS YOUR EFFORTS ON:

6. REPORTING
It is essential that you have a
regular monthly and quarterly
reporting cycle.

7. ➤ Even if your business is
more quarterly driven, it
is important you have a
detailed monthly
reporting cycle as well.
➤ In a startup that is
growing rapidly, you can’t
afford to wait every 90
days to react to emerging
trends.
Photo source: 1stpayblaze.com

8. ➤ In addition to standard
financial statements, you
must also track your unit
economics (including life
time value, cost of
customer acquisition,
magic number, etc. ) and
know the sensitivity
inside and out.
Photo source: www.imoneza.com

9. ➤ These are the key levers
that you will use to
evaluate the effectiveness
of your Sales, Marketing,
and Product Development
efforts.
Photo source: www.pancgroup.com

10. LONG TERM
MODELS /
SENSITIVITY
You should go to great lengths to
build long term financial models that
are flexible and can be used as great
tools to track your actual progress.

11. ➤ By having a great
reporting process in
place, including key unit
economic metrics, you
can easily integrate those
concepts into your
financial model.
➤ This model should allow
you to determine how
more aggressive revenue
growth plans will impact
the investment required.

12. ➤ The models should also
clearly illustrate the
sensitivity in your unit
economics as you
determine what level of
revenue growth is
reasonable for your
business model.

13. ➤ Another ancillary benefit
is that by having a
detailed financial model
with key metrics, you can
easily work with future
investors to quickly
understand your
business.

14. PEOPLE
There are several age old statements
that apply here. Hiring someone
smarter than you is a good policy to
follow.

15. ➤ Setting up a great
recruiting engine is
essential to hiring the
best people.
➤ The recruiting process is
an extension of your
brand, so having a
defined process is
important so all
candidates have a similar
experience.
Photo source: biz30.timedoctor.com

16. ➤ The key item to manage
during rapid growth
periods is keeping the bar
high on talent you hire
and not succumbing to the
pressure to fill open
requisitions because you
are behind on your budget.
➤ Holding out for the best
talent and best culture fit
will payoff on multiple
levels.

17. SYSTEMS
If your startup is experiencing rapid
growth that is expected to continue long
term, it is critical that you have a
roadmap for your internal systems. Photo source: www.vencore.com

18. ➤ You should develop a plan
for all key systems
including CRM, ERP
(Financials), and so on.
➤ The 2 key components to
focus on here are
integration between
systems and costs.
Photo source: www.mckinsey.com

19. ➤ Determining in advance
how each system you plan
to purchase integrates
with existing systems is
hugely important.
Photo source: www.pexels.com

20. ➤ The other area of focus is
on cost.
➤ Focusing on per user cost
per year in a SaaS system
is supercritical because
your total cost can
balloon as you grow and
add employees who
require additional
licenses.

21. ➤ Make sure you plan for
success and that you are
diligent about negotiating
each SaaS application you
purchase in the early
stages of your company’s
growth.

22. STRATEGIC
PLANNING
Your strategic planning process is the
most critical to help ensure everything
is aligned within your startup.
Photo source: www.bluefinhomes.com

23. ➤ Clearly communicating
the strategy internally so
that everyone is on the
same page is crucial.
➤ You should also stay in
lock step with your
investors and BOD so
that everyone is in sync.
Photo source: www.latechwatch.com

24. ➤ You also need to have a
system whereby the key
stakeholders review your
strategy, updates are
made as needed, and
changes are
communicated to
everyone, etc.
Photo source: businesscollective.com

25. FINAL THOUGHTS
Photo source: www.telegraph.co.uk

26. ““Most importantly, the discipline of
reviewing how actual results and programs
are progressing vs stated goals with brutal
honesty is key to a good process that can
scale as you continue to manage aggressive
growth targets.”
-David Stack

27. THAT, COMBINED WITH
A RIGOROUS SYSTEM
OF RECRUITING AND
REPORTING WILL GET
YOU AND YOUR
COMPANY THROUGH
ACCELERATED GROWTH
CYCLES.

28. IF YOU LIKED THIS PIECE, PLEASE
VISIT: DAVID-STACK.COM
➤ David Stack is a chief financial
officer with over 20 years of
success in leading global
financial operations for growing
companies, particularly those in
the software as a service (SaaS)
industry. David is currently the
CFO at Qstream, a Boston-based
mobile enterprise software
company that provides analytics
to ignite high performance sales
teams. For more information,
visit David-Stack.com and follow
on Twitter & LinkedIn!