Quote Info

This is because they have to invest heavily upfront to acquire the customer, but recover the profits from that investment over a long period of time. The faster the business decides to grow, the worse the losses become. Many investors/board members have a problem understanding this, and want to hit the brakes at precisely the moment when they should be hitting the accelerator.

In many SaaS businesses, this also translates into a cash flow problem, as they may only be able to get the customer to pay them month by month.

For Entrepreneurs.com

More SaaS + Software Stats

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

Growing faster has twice as much impact on share price as improving margins

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

Software and online services are in a period of dizzying growth

More Growth Strategy Stats

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

Software and online services are in a period of dizzying growth

Japanese company Hitachi accounted for three percent of the world’s market for diagnostic imaging in 2017.

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

The median annual unit churn for SAAS companies was 10% in 2016

How To Make Pricing A Constant Process In Your Organization

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

After $10M in ARR, the median growth rate slows to just under 50%

47% of millennials want to work at diverse companies, according to a recent study.