TSIA’s Post

Explore the evolution of SaaS monitization models in 2024! My colleagues Andreas Jonason and Andrea De Franceschi discuss how the shift from usage-based to outcome-based monitization models can create significant double digit increase in growth and profits. Reach out for further insights on how this approach can help your business unlock growth in SaaS #monetization #commercialexcellence #pricingstrategy #saas #tech

🚀 𝗜𝗱𝗲𝗻𝘁𝗶𝗳𝘆𝗶𝗻𝗴 𝗣𝗿𝗼𝗳𝗶𝘁𝗮𝗯𝗹𝗲 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗠𝗼𝗱𝗲𝗹𝘀 𝗶𝗻 𝘁𝗵𝗲 𝗦𝗮𝗮𝗦 𝗦𝗲𝗰𝘁𝗼𝗿 💡 In the rapidly growing 𝗦𝗮𝗮𝗦 𝗶𝗻𝗱𝘂𝘀𝘁𝗿𝘆, finding the right business model is key to long-term success. This insightful article from TechBullion explores the essential factors that define a profitable SaaS business, from pricing strategies to customer retention methods. If you're looking to launch or optimize a SaaS business, understanding these models could be the difference between scaling up and stagnation. Discover the strategies behind successful SaaS companies: 📌 https://lnkd.in/dNqjHC6A #SaaS #BusinessModels #GrowthStrategies #TechInnovation #DigitalTransformation

Thrilled to share McKinsey's latest insights on maximizing growth through SaaS! 🌐 The SaaS market is booming, with projections reaching $10 trillion by 2030. Here are six strategies to build successful SaaS businesses. 1. Innovate with rapid test-and-learn cycles 2. Leverage existing digital and data assets 3. Plan for scale from day one 4. Expand and target the right talent 5. Focus on usage-based pricing 6. Secure dedicated funding Dive into the full article for detailed insights! Read more: https://lnkd.in/gVWsUpDh #SaaS #Growth #Innovation #DigitalTransformation #McKinseyInsights

The global SaaS market is booming. McKinsey Digital predicted the market worth of the SaaS industry will reach $20 trillion by 2030. Is your business ready to grab this growth opportunity? Check these five SaaS industry trends that will have a major impact on businesses in 2024 and beyond. #KhiredNetworks #SaaS #industry #digitalmarketing #business #trend #growth

The issue with SaaS Models is that: 1. Very low overall value and lack of innovation, often legacy tech, but may be a niche benefit (too many "one trick ponies" ), 2. Too high Opex (cut of the business!) giving firms financial motivation to consider other options and 3. Many are easily replaced with strong teams and more innovative open source. Organizations need strong strategies and capabilities to execute different paths! This is the key dependency! #saas #opensource #strategy https://lnkd.in/gP2vpQXj

🚀In the competitive landscape of technology-as-a-service, the ability to scale is crucial for success. However, many businesses face the challenge of diminishing returns as they expand. Our blog explores strategies to avoid this trap and ensure sustainable growth: https://hubs.ly/Q02kQq9w0 #diminishingreturns #saas #businessautomation #businessgrowth #automationtools

Is the "Rule of 40" really a rule for SaaS companies? Which is more important in the Rule of 40 - Growth Rate or Profitability??? This is a metric that I get asked about all the time - and the questions are multi-faceted including how to calculate which is: Rule of 40 = Annual Growth Rate + Free Cash Flow Margin ...the formula is where the questions begin 👇: #1: Does the growth rate use ARR or GAAP Revenue 👉The SaaS Metrics Standards Board definition uses ARR Growth Rate ⚠ Public companies do not typically disclose ARR so the Rule of 40 is typically using GAAP Revenue Growth Rate + FCF Margin ⚠ Some companies will use EBITDA instead of FCF Margin - especially if they are earlier in the journey and do not use calculate Free Cash Flow 😨 #2. At what stage does the Rule of 40 become a relevant and/or important metric to track 👉 The answer is of course "it depends" but most investors would suggest beginning to track around $10M - $20M but always track and report at $20M ARR and above    - Byron Deeter and Sameer Dholakia from Bessemer Venture Partners     lead a great session at SaaS Metrics Palooza '23 on this topic #3. Which variable is more important - Growth Rate or FCF Margin? 👉 If you asked this question in 2020, 2021 of 1H-22 it was met with - Growth of course!!! 👉 If you asked this question in 2H-22 and heading into 1H-23 it was met with - you need a healthy balance of Growth and Profitability 😤🤯 It was almost impossible to get a specific "number" or "weighting" of which was more important and by how much! 🎧 Alex Clayton, Managing Partner at Meritech Capital led an incredible session on the impact of Growth versus FCF Margin on enterprise value at his session at SaaS Metrics Palooza '23 - another great session where you can see the details on how different combinations of Growth + FCF Margin (i.e. the two variables in the Rule of 40) impacted Enterprise Value:Revenue multiples       - spoiler alert - growth still wins...but by how much - watch Alex's session      at SaaS Metrics Palooza '23 to get the details #4. If Growth is more important (today) what is the associated weight of      Growth to FCF Margin 🧙♂️ This is a question that both Software Equity Group and Meritech Capital answered by conducting a two-factor linear regression analysis to create a growth-weighted Rule of 40 and the Meritech Rule of 40 💡🦉 An "OG" of SaaS Metrics - Byron Deeter and Sam Bondy from Bessemer Venture Partners determined it was time to create a new metric with the name "𝐑𝐮𝐥𝐞 𝐨𝐟 𝐗" that answered the question:   "What is the weight of Growth vs Free Cash Flow Margin" to use to     calculate a growth-weighted Rule of 40 🎙🎧 Dave Kellogg and I discussed the "Rule of X" in detail on a recent SaaS Talk™ with the Metrics Brothers podcast 🗺 You can read more detail about "Rule of X" in the Atlas section of the BVP website #b2bsaas #metrics #ruleofx *Chart below from data on Meritech Capital "Benchmarks" website

In the fast-paced world of SaaS, innovation is key. Rapid due diligence can streamline your clients’ growth process and help them stay ahead. Due diligence practices can identify potential risks and opportunities, ensuring your clients make informed decisions quickly. Read more. https://lnkd.in/gcqEzf_d #SaaSGrowth

Having read a lot about SaaS and having worked with few SaaS companies as part of my work, I am now sharing some of the key SaaS Metrics that investors look for when evaluating a SaaS company. When I started writing on Linkedin, one of the first posts was about SaaS metrics. So, I decided to revisit the SaaS metrics and share the same for our learning in my newsletter. I have compiled the following 10 metrics and I would love to hear your thoughts. Rule of 40 SaaS Magic Number Burn Multiple LTV/CAC CAC Payback Period Net Dollar Retention ARR/FTE Pipeline Conversion Rate ARR and ACV Growth Rate Gross Margin #saas #enterprisesaas #tech #technology #venturecapital

The State of SaaS: Achieving Success in a Reset Market After a Positive Start to 2024. Read the following article to discover key metrics. https://lnkd.in/gKmshMvw #SaaS #Market #Founders #2024