Here’s the ultimate list of the very best SaaS metrics articles and resources from 2015. These articles have great insights for taking your SaaS business to the next level in 2016.
I expect that you’re already familiar with basic resources like my SaaS Metrics Learning Center, LessChurn Churn University and ChartMogul’s Metrics Cheat Sheets. I’m also skipping older classics - those are fab reads but they’ve been around for years.
The best resources to keep on growing
If you’re going to check out just one resource, I recommend David Skok’s The SaaS business model and metrics slide set. David has been writing about SaaS metrics for years and this slide set is a condensed and updated version of his older material.
My own favorite is the section starting from slide 31 that explains how expansion revenue is the key to negative churn (slide 41):
Lars Lofgren’s slide set The SaaS Metrics that Drive Growth and Keep You From Plateauing gives practical recommendations for achieving that negative churn.
Together these two slide sets are a goldmine of ideas to improve your business.
Going beyond the financial metrics
When you have the product-market-fit and it’s time to scale, you’ll need a bunch of non-financial metrics to measure how well your sales team is doing.
Why? The financial metrics (“lagging metrics”) just arrive too late when you have a strong (=expensive) sales team at place. That’s why most companies choose to set up alternative metrics for the sales pipeline that make it possible to predict revenues in advance and react faster.
Paul Albright from Captora explains the overview of C-Level Metrics and Reporting.
Aaron Ross and Jason Lemkin go more into the details in The Predictable Revenue Guide To Tripling Your Sales. It’s a series of free small ebooks that has started already at 2014 and is currently in part 4. Their landing page is a bit outdated - part 4 exists already. This series goes through the whole process of setting up an outbound lead generation system/team and metrics are just a part of it.
Metrics from the investors’ viewpoint
Partners from Andreessen Horowitz put together an article of 16 metrics that investors are interested in and explains why those metrics matter to them. The article mentions a couple presentation tactics you should avoid if you want to look trustworthy.
They also wrote a followup article called 16 more startup metrics. It’s a nice addition, but doesn’t explain the metrics usage at the same level than the original 16 metrics.
Ali Rahimtula’s article SaaS metrics playbook has superb comments on what partners at Cue Ball Capital look for in metrics and what kind of values are considered good.
Intercom’s Bobby Pinero explains the same process from the fundraiser’s point of view at his post SaaS metrics for fundraising. This is the best article I’ve seen for preparing the material you need when you’re going to talk with the investors.
The vanity fair
Do you want to compare your churn rates to others’?
Clement Vouillon’s SaaS churn benchmark collected results from several benchmark surveys. Many of these surveys are running every year, so we should soon see the updates too.
A word of warning though. Guys from LessChurn signed up to 4 different one-click SaaS analytics apps and published the differences in churn rates below:
Unlike in accounting, we don’t have GAAP or IFRS rules for calculating these numbers so the variations are big at the moment. Hopefully that’ll change some day.
What to do when you can’t calculate metrics?
A list of best posts on metrics wouldn’t be perfect without something from Jason Cohen. I love his articles to the point that I’ll find myself reading some of them several times!
Fermi estimation for startup business models explains how to calculate stuff when you don’t yet know anything.
These posts present fresh new viewpoints to metrics.
Christopher O’Donnell explains how Hubspot adjusts their payback period calculations to be more realistic. Money costs money so Hubspot wants to know how fast they will get back their CAC. They call this new metrics a “gross margin-adjusted payback period”.
Totango’s Customer Retention Cost Report presents another new metric - CRC - Customer Retention Cost. Keeping customers is only worth it if you’re earning more than you spend.
What will 2016 bring?
What are you looking forward to in 2016?