SaaStr at Dreamforce '14: Benchmarking Your Start-Up: How Am I Doing -- Really?
1. Benchmarking SaaS Start-Ups:
How Am I Doing?
Really?
Brian Jacobs
General Partner, Emergence Capital
@brian_emcap
Jason M. Lemkin
SaaStr; Managing Director, Storm Ventures
@jasonlk
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3. Brian Jacobs
Founding Partner, Emergence Capital
Investors in Salesforce, Successfactors,
Veeva, Yammer, Box, InsideView, ServiceMax,
Bill.com, EchoSign, Hightail, Lithium, etc.
4. Jason M. Lemkin
SaaStr Founder Community – 1m Views/Mo
Managing Director, Storm Ventures
Founder/CEO – EchoSign/Adobe
Investors in MobileIron, Marketo, EchoSign,
GuideSpark, Metacloud, Sandforce, etc.
5. Benchmarking – What We’ll Discuss
•The Journey
•The Numbers:
The Good, The Bad and the Ugly
Average is Good …
But You (Probably)
Have to Do Better
•The Live Case Studies:
– Early-ish Stage: TalkDesk: $150K to $2.5m ARR in 12 mos.; the next phase
– Growth Stage: GuideSpark $2m-$20m in 24 Mos. (but it took a while to get there)
6. The Journey
What Matters – And What Doesn’t
• The Best SaaS Companies Get to
$100m in 7-10 Years
• Outliers are rare: Workday, Salesforce,
DropBox, but few others
• Pace to $100m:
– Box: 7 Years
– Hubspot: 8 Years
– Marketo: 6 Years
– Zendesk: 8 Years
– MobileIron: 6 Years
– Veeva: 5 Years ($1m+ ACV)
– LinkedIn: 7 Years
7. The Journey
What Matters – And What Doesn’t
• But … It Really Doesn’t Matter How Long it
Takes You to Get to Initial Traction (first $1-
$1.5m) – As Long As You Stay 100%
Committed
• Some get there in 1 Year. Some take 3
Years (GuideSpark). It doesn’t matter – if
you are committed.
• Key is Not to Burn Out Around Year 4-5
8. The Journey
What Matters – And What Doesn’t
• After Initial Traction, Growth Rate is Critical
• Then …
– The “Best” SaaS Companies go from $2-$10m
ARR in 6 Quarters or Less:
– 10% MoM – not red hot, but good enough
– >=15% MoM <- Killer
– 20% MoM = Outlier
– Key is momentum coming up to $10m ARR
(>=100% YoY)
9. Many Entrepreneurs Benchmark against the Growth of
Public SaaS Companies…
…How fast were they growing at the Early Stages?
11. Top SaaS Players Grew Much Faster Pre-$10M in
Revenue…
Max: 10.83X
Annual Revenue
Growth Before
Achieving $10M in
Revenue Mean: 3.91X
Target Range
Min: 1.36X
12. …Without Sacrificing Sales Efficiency
Dollars of
Sales &
Marketing
Spend per
Dollar of
Revenue
Max: $0.20
Mean: $0.94
Target Range
Note: Sales Efficiency = Previous Year’s
Sales and Marketing Spend / Change in
Yearly Revenues
Min: $2.21
13. The Live Case Studies: TalkDesk and
GuideSpark
Potential Outliers
14. Talkdesk: Getting to 20% MoM Growth – From Nothing
From Hackathon, to Product-Market Fit
• Talkdesk – Top Desk.com Partner
• Call/Contact Center in the Cloud
• History:
– Started off winning Twillio hackathon
– Then productized
– Then monetized
– Hit Initial Traction ($1.5m) 16 mos. After Launch –
and velocity then increased (20%)
– On pace grow $1m to $10m in < magic 5 quarters
15. Talkdesk: Getting to 20% MoM Growth – From Nothing
From Hackathon, to Product-Market Fit
• Q&A
• Keys to igniting growth:
– Partners and integrations (takes time)
– Driving ACV and deal sizes up (to six figures)
– Upgrades key: < 40% of target ACV
bought upfront today
– Understanding how do true enterprise-grade
implemenations --- even for SMBs :)
– Pricing for value
– Lead Growth > Revenue Growth = VPS + Raise $$$
16. Talkdesk: Getting to 20% MoM Growth Post-Initial
From Hackathon to Product-Market Fit to Outlier
• Brian Jacobs:
• Would you do the Series A?
• Is It In the Ballpark vs. Other SaaS
Investments?
• Why or Why Not?
17. Case Study #2: Guidespark: 5 Years to Outlier
Three Tough Years to Initial Traction. Then – Acceleration.
GuideSpark: Employee Communications in the
Cloud – Instead of In-Person or paper
•Great customers like Adobe, 7-11, Pepsico,
Workday, City of San Antonio, etc.
•200 employees today vs. Sept’12 = 12
employees
•Hired VPS as #10 in July‘12 – timed with start
of acceleration customers closed
18. Case Study #2: Guidespark: 5 Years to Outlier
Three Tough Years to Initial Traction. Then – Acceleration.
GuideSpark: Employee Communications in the
Cloud – Instead of In-Person
•History:
– Started off as a cloud-based wellness solution
– Struggled for product-market fit until found one core
use case, and one core enterprise customer
– Doubled down on (x) enterprise + (y) employee
communications
– Hired their Great VP of Sales at <$1.5m ARR – once
real business model proven and first enterprise
customers closed
19. GuideSpark: Outlier Growth Post-Initial Scale
A Long Journey to The Top
• Brian Jacobs:
• Would you do the Series C?
• Why or Why Not?
Hinweis der Redaktion
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Talk Track:
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