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Mobile app monetization metrics for subscriptions. Historically, mobile app monetization has largely been about scaling and optimizing ad revenue from in-app purchases (IAP). Metrics like ARPU and retention are a critical part of this process — scaling to millions of users means that the tiniest optimizations can make the difference between profit and loss. Today, publishers have a lot more choice when it comes to picking a monetization strategy. Apple’s expanded support for subscriptions on iOS gives advanced control over pricing tiers and managing subscribers. Many of the same app monetization metrics exist for subscriptions, but the way they’re measured differs considerably. This post takes a look at some of those differences. ARPU, ARPPU, ARPDAU IAP model: There are a number of ways to look at the average revenue earned from users through in-app purchases. Average revenue per user (ARPU) gives a basic view of user revenue across the entire user base. This is a widely accepted common measurement but can be skewed by outliers or non-paying users. Average revenue per paying user (ARPPU) is useful in a freemium context, where paid users and free users are commonly segmented separately. Including non-paying users in revenue calculations can be misleading. Average revenue per daily active user (ARPDAU) is an industry standard metric that averages revenue across the number of unique users who are active in a particular day. Subscription model: In the world of paid subscriptions there’s much less variety in the method for measuring average revenue. Average revenue per account (ARPA) is the most widely accepted metric for this, and is calculated as: ARPA = monthly recurring revenue (MRR) / # of customers Note that in a freemium context, ARPA would usually only include paying users. Customer lifetime value (LTV) Customer lifetime value (LTV) is one of the most critical metrics in the mobile app monetization business. It allows publishers to confidently spend on acquisition (customer acquisition cost/eCPI), with the knowledge that any upfront investment will be paid back over the customers’ lifetime (plus — ideally — a profit). The good news for publishers moving to a subscription model is that customers generally have a much higher lifetime value than those acquired through paid ads. For ad-monetized apps, a good ratio between cost per install (eCPI) and LTV has been suggested as somewhere around 1:23 (i.e., LTV is 23x higher than cost of acquisition). In B2B SaaS, that same optimal ratio (commonly referred to as the CAC:LTV ratio) is usually 1:3. This is down to much higher retention — and therefore a higher LTV. For consumer subscription businesses it may not be quite so high, but is still likely to eclipse that of advertising. IAP model: LTV for mobile apps is difficult to calculate, and relies on a lot of data to reliably predict customer retention over time. A commonly used formula for this type of LTV is: LTV = average value of a conversion x average # of conversions in timeframe x average customer lifetime Notice that here we’re measuring from multiple “conversions” across the lifetime, which is typical of an IAP monetization model (relying on repeat IAPs). Subscription model: LTV under a subscription model is simpler to estimate — however you should note that LTV is always an estimation or projection of the future, rather than a measurement. The generally accepted “simple” formula for LTV is defined as: LTV = (ARPA x gross margin) / customer churn rate Retention and churn rate IAP model: When considering revenue from ads, there’s a much greater focus on retention rather than churn. It’s much easier to define and measure when a user returns to the app (is retained) than when a user churns. Since there’s no active recurring subscription, churning in this context just means ceasing to launch the app. Retention rate is the percentage of users who continue engaging with your app over time, and is usually measured on 1-day, 7-day and 30-day intervals: 30-day retention rate = # of monthly active users / # of monthly installs Churn rate, as mentioned above, can be difficult to measure in a non-subscription context. You need to decide the length of inactivity from a user before they’re considered “churned”. This variable is down to the design of your app and how much engagement you expect from users. Subscription model: With subscriptions, users are required to actively cancel (with the exception of failed or non-payments). This means that churn rate is easier to measure and can be defined in a standardized way. Customer churn rate is the rate at which customers cancel their subscription: Customer churn rate = # of churned customers in period / # of customers at start of period Cohort analysis Cohort analyses are one of the best ways to get a long-term view of user retention, and exist both for subscriptions and ad-supported revenue models. How to read a cohort analysis Although the cohort analysis chart can seem overwhelming at first, there’s a straightforward process for interpreting the data: Rows = cohorts Each row represents a cohort of your users. A cohort is simply a group of people, defined by some specific criteria. In this case, it’s users who subscribed in the same calendar month. Therefore each row (labeled with a month) is the group of users who subscribed in that month. Columns = months Each column (labeled in increments by a whole number) represents a single month following the initial subscription. Month zero is the month in which they subscribed, month one is the following month, and so on. The default cohort chart is focused on customer churn rate, so the value in each cell is equal to the customer churn rate for that cohort, during that specific month in the customer lifetime. Reading from left to right for each cohort, you can see the trend in churn rate over time and quickly identify spikes that could be caused by a specific event (such as a pricing change or product downtime). More importantly, you can look vertically at other cohorts at the same point in their customer lifetime to identify trends. This can help you focus on fixing problematic periods for users, either through focused communication or changes to the product itself. Here are some examples of discoveries you can make with cohort analysis: “Month four has a large spike in customer churn due to a gap in onboarding communication” “Customers who signed up with a discount code are more likely to churn after month six” “The new pricing model seems to have addressed the retention problem around month three” Recurring revenue adds greater precision, predictability Mobile app publishers operating at massive scale (usually in the gaming space) have been able to reliably model retention and revenue metrics to balance the economics of their business. For the remaining 99% of publishers, this is much harder to achieve. For many who adopt it, subscription revenue brings a refreshing level of measurability when it comes to scaling revenue and optimizing for profit in the longer term.

[INST] Mobile app monetization metrics for subscriptions [/INST]

Historically, mobile app monetization has largely been about scaling and optimizing ad revenue from in-app purchases (IAP). Metrics like ARPU and retention are a critical part of this process — scaling to millions of users means that the tiniest optimizations can make the difference between profit and loss. Today, publishers have a lot more choice when it comes to picking a monetization strategy. Apple’s expanded support for subscriptions on iOS gives advanced control over pricing tiers and managing subscribers. Many of the same app monetization metrics exist for subscriptions, but the way they’re measured differs considerably. This post takes a look at some of those differences. ARPU, ARPPU, ARPDAU IAP model: There are a number of ways to look at the average revenue earned from users through in-app purchases. Average revenue per user (ARPU) gives a basic view of user revenue across the entire user base. This is a widely accepted common measurement but can be skewed by outliers or non-paying users. Average revenue per paying user (ARPPU) is useful in a freemium context, where paid users and free users are commonly segmented separately. Including non-paying users in revenue calculations can be misleading. Average revenue per daily active user (ARPDAU) is an industry standard metric that averages revenue across the number of unique users who are active in a particular day. Subscription model: In the world of paid subscriptions there’s much less variety in the method for measuring average revenue. Average revenue per account (ARPA) is the most widely accepted metric for this, and is calculated as: ARPA = monthly recurring revenue (MRR) / # of customers Note that in a freemium context, ARPA would usually only include paying users. Customer lifetime value (LTV) Customer lifetime value (LTV) is one of the most critical metrics in the mobile app monetization business. It allows publishers to confidently spend on acquisition (customer acquisition cost/eCPI), with the knowledge that any upfront investment will be paid back over the customers’ lifetime (plus — ideally — a profit). The good news for publishers moving to a subscription model is that customers generally have a much higher lifetime value than those acquired through paid ads. For ad-monetized apps, a good ratio between cost per install (eCPI) and LTV has been suggested as somewhere around 1:23 (i.e., LTV is 23x higher than cost of acquisition). In B2B SaaS, that same optimal ratio (commonly referred to as the CAC:LTV ratio) is usually 1:3. This is down to much higher retention — and therefore a higher LTV. For consumer subscription businesses it may not be quite so high, but is still likely to eclipse that of advertising. IAP model: LTV for mobile apps is difficult to calculate, and relies on a lot of data to reliably predict customer retention over time. A commonly used formula for this type of LTV is: LTV = average value of a conversion x average # of conversions in timeframe x average customer lifetime Notice that here we’re measuring from multiple “conversions” across the lifetime, which is typical of an IAP monetization model (relying on repeat IAPs). Subscription model: LTV under a subscription model is simpler to estimate — however you should note that LTV is always an estimation or projection of the future, rather than a measurement. The generally accepted “simple” formula for LTV is defined as: LTV = (ARPA x gross margin) / customer churn rate Retention and churn rate IAP model: When considering revenue from ads, there’s a much greater focus on retention rather than churn. It’s much easier to define and measure when a user returns to the app (is retained) than when a user churns. Since there’s no active recurring subscription, churning in this context just means ceasing to launch the app. Retention rate is the percentage of users who continue engaging with your app over time, and is usually measured on 1-day, 7-day and 30-day intervals: 30-day retention rate = # of monthly active users / # of monthly installs Churn rate, as mentioned above, can be difficult to measure in a non-subscription context. You need to decide the length of inactivity from a user before they’re considered “churned”. This variable is down to the design of your app and how much engagement you expect from users. Subscription model: With subscriptions, users are required to actively cancel (with the exception of failed or non-payments). This means that churn rate is easier to measure and can be defined in a standardized way. Customer churn rate is the rate at which customers cancel their subscription: Customer churn rate = # of churned customers in period / # of customers at start of period Cohort analysis Cohort analyses are one of the best ways to get a long-term view of user retention, and exist both for subscriptions and ad-supported revenue models. How to read a cohort analysis Although the cohort analysis chart can seem overwhelming at first, there’s a straightforward process for interpreting the data: Rows = cohorts Each row represents a cohort of your users. A cohort is simply a group of people, defined by some specific criteria. In this case, it’s users who subscribed in the same calendar month. Therefore each row (labeled with a month) is the group of users who subscribed in that month. Columns = months Each column (labeled in increments by a whole number) represents a single month following the initial subscription. Month zero is the month in which they subscribed, month one is the following month, and so on. The default cohort chart is focused on customer churn rate, so the value in each cell is equal to the customer churn rate for that cohort, during that specific month in the customer lifetime. Reading from left to right for each cohort, you can see the trend in churn rate over time and quickly identify spikes that could be caused by a specific event (such as a pricing change or product downtime). More importantly, you can look vertically at other cohorts at the same point in their customer lifetime to identify trends. This can help you focus on fixing problematic periods for users, either through focused communication or changes to the product itself. Here are some examples of discoveries you can make with cohort analysis: “Month four has a large spike in customer churn due to a gap in onboarding communication” “Customers who signed up with a discount code are more likely to churn after month six” “The new pricing model seems to have addressed the retention problem around month three” Recurring revenue adds greater precision, predictability Mobile app publishers operating at massive scale (usually in the gaming space) have been able to reliably model retention and revenue metrics to balance the economics of their business. For the remaining 99% of publishers, this is much harder to achieve. For many who adopt it, subscription revenue brings a refreshing level of measurability when it comes to scaling revenue and optimizing for profit in the longer term.

<sys> [INST] Mobile app monetization metrics for subscriptions [/INST] Historically, mobile app monetization has largely been about scaling and optimizing ad revenue from in-app purchases (IAP). Metrics like ARPU and retention are a critical part of this process — scaling to millions of users means that the tiniest optimizations can make the difference between profit and loss. Today, publishers have a lot more choice when it comes to picking a monetization strategy. Apple’s expanded support for subscriptions on iOS gives advanced control over pricing tiers and managing subscribers. Many of the same app monetization metrics exist for subscriptions, but the way they’re measured differs considerably. This post takes a look at some of those differences. ARPU, ARPPU, ARPDAU IAP model: There are a number of ways to look at the average revenue earned from users through in-app purchases. Average revenue per user (ARPU) gives a basic view of user revenue across the entire user base. This is a widely accepted common measurement but can be skewed by outliers or non-paying users. Average revenue per paying user (ARPPU) is useful in a freemium context, where paid users and free users are commonly segmented separately. Including non-paying users in revenue calculations can be misleading. Average revenue per daily active user (ARPDAU) is an industry standard metric that averages revenue across the number of unique users who are active in a particular day. Subscription model: In the world of paid subscriptions there’s much less variety in the method for measuring average revenue. Average revenue per account (ARPA) is the most widely accepted metric for this, and is calculated as: ARPA = monthly recurring revenue (MRR) / # of customers Note that in a freemium context, ARPA would usually only include paying users. Customer lifetime value (LTV) Customer lifetime value (LTV) is one of the most critical metrics in the mobile app monetization business. It allows publishers to confidently spend on acquisition (customer acquisition cost/eCPI), with the knowledge that any upfront investment will be paid back over the customers’ lifetime (plus — ideally — a profit). The good news for publishers moving to a subscription model is that customers generally have a much higher lifetime value than those acquired through paid ads. For ad-monetized apps, a good ratio between cost per install (eCPI) and LTV has been suggested as somewhere around 1:23 (i.e., LTV is 23x higher than cost of acquisition). In B2B SaaS, that same optimal ratio (commonly referred to as the CAC:LTV ratio) is usually 1:3. This is down to much higher retention — and therefore a higher LTV. For consumer subscription businesses it may not be quite so high, but is still likely to eclipse that of advertising. IAP model: LTV for mobile apps is difficult to calculate, and relies on a lot of data to reliably predict customer retention over time. A commonly used formula for this type of LTV is: LTV = average value of a conversion x average # of conversions in timeframe x average customer lifetime Notice that here we’re measuring from multiple “conversions” across the lifetime, which is typical of an IAP monetization model (relying on repeat IAPs). Subscription model: LTV under a subscription model is simpler to estimate — however you should note that LTV is always an estimation or projection of the future, rather than a measurement. The generally accepted “simple” formula for LTV is defined as: LTV = (ARPA x gross margin) / customer churn rate Retention and churn rate IAP model: When considering revenue from ads, there’s a much greater focus on retention rather than churn. It’s much easier to define and measure when a user returns to the app (is retained) than when a user churns. Since there’s no active recurring subscription, churning in this context just means ceasing to launch the app. Retention rate is the percentage of users who continue engaging with your app over time, and is usually measured on 1-day, 7-day and 30-day intervals: 30-day retention rate = # of monthly active users / # of monthly installs Churn rate, as mentioned above, can be difficult to measure in a non-subscription context. You need to decide the length of inactivity from a user before they’re considered “churned”. This variable is down to the design of your app and how much engagement you expect from users. Subscription model: With subscriptions, users are required to actively cancel (with the exception of failed or non-payments). This means that churn rate is easier to measure and can be defined in a standardized way. Customer churn rate is the rate at which customers cancel their subscription: Customer churn rate = # of churned customers in period / # of customers at start of period Cohort analysis Cohort analyses are one of the best ways to get a long-term view of user retention, and exist both for subscriptions and ad-supported revenue models. How to read a cohort analysis Although the cohort analysis chart can seem overwhelming at first, there’s a straightforward process for interpreting the data: Rows = cohorts Each row represents a cohort of your users. A cohort is simply a group of people, defined by some specific criteria. In this case, it’s users who subscribed in the same calendar month. Therefore each row (labeled with a month) is the group of users who subscribed in that month. Columns = months Each column (labeled in increments by a whole number) represents a single month following the initial subscription. Month zero is the month in which they subscribed, month one is the following month, and so on. The default cohort chart is focused on customer churn rate, so the value in each cell is equal to the customer churn rate for that cohort, during that specific month in the customer lifetime. Reading from left to right for each cohort, you can see the trend in churn rate over time and quickly identify spikes that could be caused by a specific event (such as a pricing change or product downtime). More importantly, you can look vertically at other cohorts at the same point in their customer lifetime to identify trends. This can help you focus on fixing problematic periods for users, either through focused communication or changes to the product itself. Here are some examples of discoveries you can make with cohort analysis: “Month four has a large spike in customer churn due to a gap in onboarding communication” “Customers who signed up with a discount code are more likely to churn after month six” “The new pricing model seems to have addressed the retention problem around month three” Recurring revenue adds greater precision, predictability Mobile app publishers operating at massive scale (usually in the gaming space) have been able to reliably model retention and revenue metrics to balance the economics of their business. For the remaining 99% of publishers, this is much harder to achieve. For many who adopt it, subscription revenue brings a refreshing level of measurability when it comes to scaling revenue and optimizing for profit in the longer term. </sys

SaaS Metrics Refresher #4: Expansion. “Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital Definitions Expansion in SaaS is often overlooked. It’s actually a highly useful leading indicator of success, and can often be used in an actionable way. When it comes to measuring expansion, there’s a single metric that’s usually used: MRR Expansion Rate MRR expansion rate is the additional MRR generated for your business that comes from existing customers, usually in the form of add-ons or up-sells. As with most SaaS metrics, we always measure expansion rate across a fixed period: What’s a healthy expansion rate? There isn’t much in the way of benchmarks on SaaS expansion rate, but the 2017 Private SaaS Company Survey from KBCM Technology Group and forEntrepreneurs does give some insights into the proportion of revenue coming form expansion: Source: forEntrepreneurs In this chart we can see that the median percentage of ARR coming from upsells and expansions is 19%. How to increase expansion rate Expansion is really a part of the DNA of any SaaS business. Achieving a healthy expansion rate means building expansion into your pricing model. There are a number of ways to do this, such as implementing scalable pricing (e.g. paying per user account or proportional to revenue). You can also offer a more modular pricing model that incorporates add-ons. This gives you a good opportunity to up-sell or cross-sell existing customers. Keeping customers happy and driving expansion at the same time means making expansion predictable for them. Surprise upgrades aren’t cool. The benefits of a healthy expansion rate Balance increasing acquisition cost: The acquisition cost for new business MRR is far higher than that of expansion MRR. Existing customers are, by definition, much more attuned to the value of your product and are the warmest leads you’ll ever deal with. Customer acquisition cost (CAC) is steadily increasing in the SaaS industry, so balancing this with strong revenue expansion is desirable. Decrease payback period: The result of a lower acquisition cost for expansion revenue means that the payback period is much shorter. Decreasing your payback period means that less cash (risk) is tied up in the company and cash flow is generally healthier. The 2017 Private SaaS Company Survey also illustrates the relative CAC of new business vs. upsells and expansions: source: forEntrepreneurs Identify high-value customers: With expansion built into your pricing, you’re giving customers the chance to grow and see increasing value from the product over time. Identifying those high-LTV customers who stick with you and expand over time is incredibly useful — in part for modelling your ideal customer profile. “The best kinds of customers are those who grow with your product. These kinds of customers are in it for the long haul, because they grow through the ups and downs of your product. They are the most loyal ones and wait for each product release with anticipation.” Silota Expansion’s role in negative churn Achieving a negative MRR churn rate in SaaS is in many ways a badge of honor. A healthy expansion rate is a primary ingredient in negative churn (the other one being low MRR churn rate). “Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. Every month, more money comes in, without much effort. This is a powerful effect and can fuel SaaS companies to huge success.” Tomasz Tunguz Negative churn occurs when expansion MRR exceeds gross MRR churn rate, and it can have a huge impact on growth as illustrated in this chart from Tomasz Tunguz: source: Tomasz Tunguz Resources and Further Reading BASICS Lifecycle of a customer (ChartMogul) — This help center article, while designed to give an overview of the complete lifecycle of a subscription customer, lays out some different categories of expansion. Future Proofing: How To Model SaaS Pricing For Expansion MRR (Chargify) — An excellent article from the team at Chargify on how to design your pricing around healthy expansion. DEEP CUTS Useful ways to analyze SaaS expansion (ChartMogul) — The goal of this post is to really demonstrate how expansion can be actionable for SaaS businesses. There are some more advanced measurements of expansion here that definitely go beyond the basics.

[INST] SaaS Metrics Refresher #4: Expansion [/INST]

“Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital Definitions Expansion in SaaS is often overlooked. It’s actually a highly useful leading indicator of success, and can often be used in an actionable way. When it comes to measuring expansion, there’s a single metric that’s usually used: MRR Expansion Rate MRR expansion rate is the additional MRR generated for your business that comes from existing customers, usually in the form of add-ons or up-sells. As with most SaaS metrics, we always measure expansion rate across a fixed period: What’s a healthy expansion rate? There isn’t much in the way of benchmarks on SaaS expansion rate, but the 2017 Private SaaS Company Survey from KBCM Technology Group and forEntrepreneurs does give some insights into the proportion of revenue coming form expansion: Source: forEntrepreneurs In this chart we can see that the median percentage of ARR coming from upsells and expansions is 19%. How to increase expansion rate Expansion is really a part of the DNA of any SaaS business. Achieving a healthy expansion rate means building expansion into your pricing model. There are a number of ways to do this, such as implementing scalable pricing (e.g. paying per user account or proportional to revenue). You can also offer a more modular pricing model that incorporates add-ons. This gives you a good opportunity to up-sell or cross-sell existing customers. Keeping customers happy and driving expansion at the same time means making expansion predictable for them. Surprise upgrades aren’t cool. The benefits of a healthy expansion rate Balance increasing acquisition cost: The acquisition cost for new business MRR is far higher than that of expansion MRR. Existing customers are, by definition, much more attuned to the value of your product and are the warmest leads you’ll ever deal with. Customer acquisition cost (CAC) is steadily increasing in the SaaS industry, so balancing this with strong revenue expansion is desirable. Decrease payback period: The result of a lower acquisition cost for expansion revenue means that the payback period is much shorter. Decreasing your payback period means that less cash (risk) is tied up in the company and cash flow is generally healthier. The 2017 Private SaaS Company Survey also illustrates the relative CAC of new business vs. upsells and expansions: source: forEntrepreneurs Identify high-value customers: With expansion built into your pricing, you’re giving customers the chance to grow and see increasing value from the product over time. Identifying those high-LTV customers who stick with you and expand over time is incredibly useful — in part for modelling your ideal customer profile. “The best kinds of customers are those who grow with your product. These kinds of customers are in it for the long haul, because they grow through the ups and downs of your product. They are the most loyal ones and wait for each product release with anticipation.” Silota Expansion’s role in negative churn Achieving a negative MRR churn rate in SaaS is in many ways a badge of honor. A healthy expansion rate is a primary ingredient in negative churn (the other one being low MRR churn rate). “Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. Every month, more money comes in, without much effort. This is a powerful effect and can fuel SaaS companies to huge success.” Tomasz Tunguz Negative churn occurs when expansion MRR exceeds gross MRR churn rate, and it can have a huge impact on growth as illustrated in this chart from Tomasz Tunguz: source: Tomasz Tunguz Resources and Further Reading BASICS Lifecycle of a customer (ChartMogul) — This help center article, while designed to give an overview of the complete lifecycle of a subscription customer, lays out some different categories of expansion. Future Proofing: How To Model SaaS Pricing For Expansion MRR (Chargify) — An excellent article from the team at Chargify on how to design your pricing around healthy expansion. DEEP CUTS Useful ways to analyze SaaS expansion (ChartMogul) — The goal of this post is to really demonstrate how expansion can be actionable for SaaS businesses. There are some more advanced measurements of expansion here that definitely go beyond the basics.

<sys> [INST] SaaS Metrics Refresher #4: Expansion [/INST] “Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital Definitions Expansion in SaaS is often overlooked. It’s actually a highly useful leading indicator of success, and can often be used in an actionable way. When it comes to measuring expansion, there’s a single metric that’s usually used: MRR Expansion Rate MRR expansion rate is the additional MRR generated for your business that comes from existing customers, usually in the form of add-ons or up-sells. As with most SaaS metrics, we always measure expansion rate across a fixed period: What’s a healthy expansion rate? There isn’t much in the way of benchmarks on SaaS expansion rate, but the 2017 Private SaaS Company Survey from KBCM Technology Group and forEntrepreneurs does give some insights into the proportion of revenue coming form expansion: Source: forEntrepreneurs In this chart we can see that the median percentage of ARR coming from upsells and expansions is 19%. How to increase expansion rate Expansion is really a part of the DNA of any SaaS business. Achieving a healthy expansion rate means building expansion into your pricing model. There are a number of ways to do this, such as implementing scalable pricing (e.g. paying per user account or proportional to revenue). You can also offer a more modular pricing model that incorporates add-ons. This gives you a good opportunity to up-sell or cross-sell existing customers. Keeping customers happy and driving expansion at the same time means making expansion predictable for them. Surprise upgrades aren’t cool. The benefits of a healthy expansion rate Balance increasing acquisition cost: The acquisition cost for new business MRR is far higher than that of expansion MRR. Existing customers are, by definition, much more attuned to the value of your product and are the warmest leads you’ll ever deal with. Customer acquisition cost (CAC) is steadily increasing in the SaaS industry, so balancing this with strong revenue expansion is desirable. Decrease payback period: The result of a lower acquisition cost for expansion revenue means that the payback period is much shorter. Decreasing your payback period means that less cash (risk) is tied up in the company and cash flow is generally healthier. The 2017 Private SaaS Company Survey also illustrates the relative CAC of new business vs. upsells and expansions: source: forEntrepreneurs Identify high-value customers: With expansion built into your pricing, you’re giving customers the chance to grow and see increasing value from the product over time. Identifying those high-LTV customers who stick with you and expand over time is incredibly useful — in part for modelling your ideal customer profile. “The best kinds of customers are those who grow with your product. These kinds of customers are in it for the long haul, because they grow through the ups and downs of your product. They are the most loyal ones and wait for each product release with anticipation.” Silota Expansion’s role in negative churn Achieving a negative MRR churn rate in SaaS is in many ways a badge of honor. A healthy expansion rate is a primary ingredient in negative churn (the other one being low MRR churn rate). “Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. Every month, more money comes in, without much effort. This is a powerful effect and can fuel SaaS companies to huge success.” Tomasz Tunguz Negative churn occurs when expansion MRR exceeds gross MRR churn rate, and it can have a huge impact on growth as illustrated in this chart from Tomasz Tunguz: source: Tomasz Tunguz Resources and Further Reading BASICS Lifecycle of a customer (ChartMogul) — This help center article, while designed to give an overview of the complete lifecycle of a subscription customer, lays out some different categories of expansion. Future Proofing: How To Model SaaS Pricing For Expansion MRR (Chargify) — An excellent article from the team at Chargify on how to design your pricing around healthy expansion. DEEP CUTS Useful ways to analyze SaaS expansion (ChartMogul) — The goal of this post is to really demonstrate how expansion can be actionable for SaaS businesses. There are some more advanced measurements of expansion here that definitely go beyond the basics. </sys

Introducing a modern ChartMogul. We launched ChartMogul in 2014 to help our customers answer a simple question: How do I track and grow my subscription business? We started out with a super playful design and familiar brand voice. Early customers might remember the little monster that hung out next to our free trial button — that eye was actually the inspiration behind the stylized “O” in our logo! ChartMogul’s homepage circa 2015 We’ve grown a lot since then. So have our customers, and so has the subscription industry at large. Three plus years and a thousand customers in, we’ve started to ask ourselves what we want the world to think about us, and how we think about the world. For SaaS, branding and positioning is more important than ever. In some cases, it can be the primary point of differentiation in a category. Your brand is a promise to your customers. The businesses that are winning in today’s hypercompetitive world are investing in their brand. Growth hacks are temporary, but a great brand is enduring. (Want to read more about our thoughts on B2B branding? Ed wrote a great piece on B2B’s continued investment in brand.) We, too, want to forge an enduring brand. Not one that’s built on gimmicks or undercutting the competition. But instead, one that sets a strong promise: We’re here to help you understand your business, nurture your customer relationships, and figure out ways to be more successful. Customers store their most sensitive and important data with us. We want to continuously earn, and re-earn, that privilege. Our evolving visual identity The first step in that journey is to present a visual identity that feels fresh and modern. We’ve come a long way from a site full of monsters, but reminders of that remain. Today we’re rolling out a new logo and brand mark. Our updated logo is refined without being stuffy. We want to be approachable, but also respect that our relationship with our customers isn’t just built on personal affinity, but utmost trust in how we help them process and act on their data. So with that, we bid a fond farewell to our old logo and invite you to experience a more modern ChartMogul. We’ve swapped out our brand mark with something that feels a bit more iconic. Expect to see this in use across our social properties, as well as on t-shirts and stickers. We’re also updating our website and brand guidelines to be something more befitting our new logo. Our new visual identity is bright and dynamic, without being loud or trendy. If you’re curious to see what our brand team cooked up, you can check out the full guidelines here. And please, check out the new website and let us know what you think! What’s next for ChartMogul? The future for ChartMogul is ambitious. Today we help small and midsize subscription companies manage and analyze their revenue and customer data. But why stop there? Why should we be limited? More importantly, why should the subscription economy be limited? We envision a world where every business — whether they sell to customers on an ad hoc basis or once a month — understands that building a long-term, high-value relationship with each and every customer should be their foremost goal. We’ll be there to help them understand how they can deliver ever-increasing value and grow those relationships. We have some big things in store, and you won’t want to miss out. Keep following us for updates over the coming months.

[INST] Introducing a modern ChartMogul [/INST]

We launched ChartMogul in 2014 to help our customers answer a simple question: How do I track and grow my subscription business? We started out with a super playful design and familiar brand voice. Early customers might remember the little monster that hung out next to our free trial button — that eye was actually the inspiration behind the stylized “O” in our logo! ChartMogul’s homepage circa 2015 We’ve grown a lot since then. So have our customers, and so has the subscription industry at large. Three plus years and a thousand customers in, we’ve started to ask ourselves what we want the world to think about us, and how we think about the world. For SaaS, branding and positioning is more important than ever. In some cases, it can be the primary point of differentiation in a category. Your brand is a promise to your customers. The businesses that are winning in today’s hypercompetitive world are investing in their brand. Growth hacks are temporary, but a great brand is enduring. (Want to read more about our thoughts on B2B branding? Ed wrote a great piece on B2B’s continued investment in brand.) We, too, want to forge an enduring brand. Not one that’s built on gimmicks or undercutting the competition. But instead, one that sets a strong promise: We’re here to help you understand your business, nurture your customer relationships, and figure out ways to be more successful. Customers store their most sensitive and important data with us. We want to continuously earn, and re-earn, that privilege. Our evolving visual identity The first step in that journey is to present a visual identity that feels fresh and modern. We’ve come a long way from a site full of monsters, but reminders of that remain. Today we’re rolling out a new logo and brand mark. Our updated logo is refined without being stuffy. We want to be approachable, but also respect that our relationship with our customers isn’t just built on personal affinity, but utmost trust in how we help them process and act on their data. So with that, we bid a fond farewell to our old logo and invite you to experience a more modern ChartMogul. We’ve swapped out our brand mark with something that feels a bit more iconic. Expect to see this in use across our social properties, as well as on t-shirts and stickers. We’re also updating our website and brand guidelines to be something more befitting our new logo. Our new visual identity is bright and dynamic, without being loud or trendy. If you’re curious to see what our brand team cooked up, you can check out the full guidelines here. And please, check out the new website and let us know what you think! What’s next for ChartMogul? The future for ChartMogul is ambitious. Today we help small and midsize subscription companies manage and analyze their revenue and customer data. But why stop there? Why should we be limited? More importantly, why should the subscription economy be limited? We envision a world where every business — whether they sell to customers on an ad hoc basis or once a month — understands that building a long-term, high-value relationship with each and every customer should be their foremost goal. We’ll be there to help them understand how they can deliver ever-increasing value and grow those relationships. We have some big things in store, and you won’t want to miss out. Keep following us for updates over the coming months.

<sys> [INST] Introducing a modern ChartMogul [/INST] We launched ChartMogul in 2014 to help our customers answer a simple question: How do I track and grow my subscription business? We started out with a super playful design and familiar brand voice. Early customers might remember the little monster that hung out next to our free trial button — that eye was actually the inspiration behind the stylized “O” in our logo! ChartMogul’s homepage circa 2015 We’ve grown a lot since then. So have our customers, and so has the subscription industry at large. Three plus years and a thousand customers in, we’ve started to ask ourselves what we want the world to think about us, and how we think about the world. For SaaS, branding and positioning is more important than ever. In some cases, it can be the primary point of differentiation in a category. Your brand is a promise to your customers. The businesses that are winning in today’s hypercompetitive world are investing in their brand. Growth hacks are temporary, but a great brand is enduring. (Want to read more about our thoughts on B2B branding? Ed wrote a great piece on B2B’s continued investment in brand.) We, too, want to forge an enduring brand. Not one that’s built on gimmicks or undercutting the competition. But instead, one that sets a strong promise: We’re here to help you understand your business, nurture your customer relationships, and figure out ways to be more successful. Customers store their most sensitive and important data with us. We want to continuously earn, and re-earn, that privilege. Our evolving visual identity The first step in that journey is to present a visual identity that feels fresh and modern. We’ve come a long way from a site full of monsters, but reminders of that remain. Today we’re rolling out a new logo and brand mark. Our updated logo is refined without being stuffy. We want to be approachable, but also respect that our relationship with our customers isn’t just built on personal affinity, but utmost trust in how we help them process and act on their data. So with that, we bid a fond farewell to our old logo and invite you to experience a more modern ChartMogul. We’ve swapped out our brand mark with something that feels a bit more iconic. Expect to see this in use across our social properties, as well as on t-shirts and stickers. We’re also updating our website and brand guidelines to be something more befitting our new logo. Our new visual identity is bright and dynamic, without being loud or trendy. If you’re curious to see what our brand team cooked up, you can check out the full guidelines here. And please, check out the new website and let us know what you think! What’s next for ChartMogul? The future for ChartMogul is ambitious. Today we help small and midsize subscription companies manage and analyze their revenue and customer data. But why stop there? Why should we be limited? More importantly, why should the subscription economy be limited? We envision a world where every business — whether they sell to customers on an ad hoc basis or once a month — understands that building a long-term, high-value relationship with each and every customer should be their foremost goal. We’ll be there to help them understand how they can deliver ever-increasing value and grow those relationships. We have some big things in store, and you won’t want to miss out. Keep following us for updates over the coming months. </sys

New: Improve Your Accuracy With Manual Data Editing. We would love to live in a world where subscription data is always perfectly clean, and where subscriptions can be seamlessly moved between billing methods. Sadly, we don’t. Over the years we’ve noticed a few common problems that have made it difficult to provide all of our customers a way to arrive at a full and accurate picture of their subscription metrics. Today we’re solving for that with the launch of manual data editing. While this may not sound like the biggest, sexiest update, it’s actually our most requested feature, and something that only ChartMogul can do. Let’s take a look at some of the problems manual data editing solves. Problem #1: Moving subscriptions between billing systems A frequent occurrence we see, especially among B2B businesses, is that a customer will request to stop paying by credit card and instead pay by wire transfer. The business might cancel the subscription in their billing system (for instance, Braintree) and send the customer an invoice requesting payment by bank transfer. In this scenario it would look like the Braintree customer has been cancelled in ChartMogul. You could then create another subscription manually and merge the Braintree record and manual invoiced customer record into a unified customer record. But while the customers are merged, the subscription objects are still separate, even though conceptually the only thing that has changed is the payment method. In ChartMogul, this will look like a churn event, followed by a reactivation. A less common — but far more painful — occurrence is the total migration of all subscriptions from one billing system to another. This could be a migration from a homegrown billing solution to a SaaS solution like Recurly or Chargebee, or from something like Stripe to a more enterprise billing solution like Zuora. In the event of a company-wide migration to a new billing system, you can add the new data source to your ChartMogul account; however, you’ll still see 100% of your customers churn (in the old data source) and then 100% of them reactivate (in the new data source). This creates the same issue from the first scenario, but on a much larger scale. The solution: Connect your subscriptions to eliminate the false churn We’re fixing the issue of moving subscriptions between payment methods and systems with a feature called Connect Subscriptions. With this feature, you can easily combine multiple subscription objects that originate from different billing systems into a single conceptual subscription object. Navigate to an individual customer profile to view and edit subscription history. Problem #2: Messy billing data (AKA the “garbage in, garbage out” problem) No matter what billing system is being used, something will occasionally go wrong with a customer’s billing and the business will end up doing some sort of manual fix to resolve the issue. This generally results in messy data in your billing system. The adage “garbage in, garbage out” then holds true in these situations and, based on the data alone, it can be impossible to interpret what the MRR should be for a customer at every point in time. The solution: Manually edit MRR to clean up your data Now you can clean up incorrect MRR history caused by these billing issues with manual data editing. Navigate to an individual customer profile in ChartMogul and select Edit MRR to manually define the MRR history for any given customer. It should be a really nice user experience — you can either manually enter the correct MRR or use your mouse and a slider to set the right MRR. Navigate to an individual customer profile to view and edit subscription history. We hope you find these two new features useful! They represent a big leap forward for ChartMogul, and put us closer to our ultimate goal of serving as the single source of truth for all revenue metrics. And this is just the start. In the future we’d like to be able to auto-detect the most common issues and apply these data edits on your behalf. For now, I’ll leave you with this image. With ChartMogul, “garbage in” no longer has to mean “garbage out”.

[INST] New: Improve Your Accuracy With Manual Data Editing [/INST]

We would love to live in a world where subscription data is always perfectly clean, and where subscriptions can be seamlessly moved between billing methods. Sadly, we don’t. Over the years we’ve noticed a few common problems that have made it difficult to provide all of our customers a way to arrive at a full and accurate picture of their subscription metrics. Today we’re solving for that with the launch of manual data editing. While this may not sound like the biggest, sexiest update, it’s actually our most requested feature, and something that only ChartMogul can do. Let’s take a look at some of the problems manual data editing solves. Problem #1: Moving subscriptions between billing systems A frequent occurrence we see, especially among B2B businesses, is that a customer will request to stop paying by credit card and instead pay by wire transfer. The business might cancel the subscription in their billing system (for instance, Braintree) and send the customer an invoice requesting payment by bank transfer. In this scenario it would look like the Braintree customer has been cancelled in ChartMogul. You could then create another subscription manually and merge the Braintree record and manual invoiced customer record into a unified customer record. But while the customers are merged, the subscription objects are still separate, even though conceptually the only thing that has changed is the payment method. In ChartMogul, this will look like a churn event, followed by a reactivation. A less common — but far more painful — occurrence is the total migration of all subscriptions from one billing system to another. This could be a migration from a homegrown billing solution to a SaaS solution like Recurly or Chargebee, or from something like Stripe to a more enterprise billing solution like Zuora. In the event of a company-wide migration to a new billing system, you can add the new data source to your ChartMogul account; however, you’ll still see 100% of your customers churn (in the old data source) and then 100% of them reactivate (in the new data source). This creates the same issue from the first scenario, but on a much larger scale. The solution: Connect your subscriptions to eliminate the false churn We’re fixing the issue of moving subscriptions between payment methods and systems with a feature called Connect Subscriptions. With this feature, you can easily combine multiple subscription objects that originate from different billing systems into a single conceptual subscription object. Navigate to an individual customer profile to view and edit subscription history. Problem #2: Messy billing data (AKA the “garbage in, garbage out” problem) No matter what billing system is being used, something will occasionally go wrong with a customer’s billing and the business will end up doing some sort of manual fix to resolve the issue. This generally results in messy data in your billing system. The adage “garbage in, garbage out” then holds true in these situations and, based on the data alone, it can be impossible to interpret what the MRR should be for a customer at every point in time. The solution: Manually edit MRR to clean up your data Now you can clean up incorrect MRR history caused by these billing issues with manual data editing. Navigate to an individual customer profile in ChartMogul and select Edit MRR to manually define the MRR history for any given customer. It should be a really nice user experience — you can either manually enter the correct MRR or use your mouse and a slider to set the right MRR. Navigate to an individual customer profile to view and edit subscription history. We hope you find these two new features useful! They represent a big leap forward for ChartMogul, and put us closer to our ultimate goal of serving as the single source of truth for all revenue metrics. And this is just the start. In the future we’d like to be able to auto-detect the most common issues and apply these data edits on your behalf. For now, I’ll leave you with this image. With ChartMogul, “garbage in” no longer has to mean “garbage out”.

<sys> [INST] New: Improve Your Accuracy With Manual Data Editing [/INST] We would love to live in a world where subscription data is always perfectly clean, and where subscriptions can be seamlessly moved between billing methods. Sadly, we don’t. Over the years we’ve noticed a few common problems that have made it difficult to provide all of our customers a way to arrive at a full and accurate picture of their subscription metrics. Today we’re solving for that with the launch of manual data editing. While this may not sound like the biggest, sexiest update, it’s actually our most requested feature, and something that only ChartMogul can do. Let’s take a look at some of the problems manual data editing solves. Problem #1: Moving subscriptions between billing systems A frequent occurrence we see, especially among B2B businesses, is that a customer will request to stop paying by credit card and instead pay by wire transfer. The business might cancel the subscription in their billing system (for instance, Braintree) and send the customer an invoice requesting payment by bank transfer. In this scenario it would look like the Braintree customer has been cancelled in ChartMogul. You could then create another subscription manually and merge the Braintree record and manual invoiced customer record into a unified customer record. But while the customers are merged, the subscription objects are still separate, even though conceptually the only thing that has changed is the payment method. In ChartMogul, this will look like a churn event, followed by a reactivation. A less common — but far more painful — occurrence is the total migration of all subscriptions from one billing system to another. This could be a migration from a homegrown billing solution to a SaaS solution like Recurly or Chargebee, or from something like Stripe to a more enterprise billing solution like Zuora. In the event of a company-wide migration to a new billing system, you can add the new data source to your ChartMogul account; however, you’ll still see 100% of your customers churn (in the old data source) and then 100% of them reactivate (in the new data source). This creates the same issue from the first scenario, but on a much larger scale. The solution: Connect your subscriptions to eliminate the false churn We’re fixing the issue of moving subscriptions between payment methods and systems with a feature called Connect Subscriptions. With this feature, you can easily combine multiple subscription objects that originate from different billing systems into a single conceptual subscription object. Navigate to an individual customer profile to view and edit subscription history. Problem #2: Messy billing data (AKA the “garbage in, garbage out” problem) No matter what billing system is being used, something will occasionally go wrong with a customer’s billing and the business will end up doing some sort of manual fix to resolve the issue. This generally results in messy data in your billing system. The adage “garbage in, garbage out” then holds true in these situations and, based on the data alone, it can be impossible to interpret what the MRR should be for a customer at every point in time. The solution: Manually edit MRR to clean up your data Now you can clean up incorrect MRR history caused by these billing issues with manual data editing. Navigate to an individual customer profile in ChartMogul and select Edit MRR to manually define the MRR history for any given customer. It should be a really nice user experience — you can either manually enter the correct MRR or use your mouse and a slider to set the right MRR. Navigate to an individual customer profile to view and edit subscription history. We hope you find these two new features useful! They represent a big leap forward for ChartMogul, and put us closer to our ultimate goal of serving as the single source of truth for all revenue metrics. And this is just the start. In the future we’d like to be able to auto-detect the most common issues and apply these data edits on your behalf. For now, I’ll leave you with this image. With ChartMogul, “garbage in” no longer has to mean “garbage out”. </sys

Feature update: Relative time in Segmentation. Segmentation: The biggest feature launch to date Last month we announced a set of features that we’d been building and iterating on for some time. Segmentation brought probably the biggest change to functionality in ChartMogul since our public release back in 2014, as well as a world of potential when it comes to optimizing and growing your subscription business. ChartMogul customers are now creating views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep …and many more powerful segments. We’re constantly impressed by the different ways in which people are using Segmentation to take their SaaS analytics to the next level. The initial launch of Segmentation last month was the first step in building out an advanced set of features for segmenting customers in ChartMogul. These features are an ever-evolving set of functionality on which we’re already building future iterations. Today we’re launching an update which further expands the possibilities for Segmentation. Relative time makes Segmentation more powerful Today’s update allows you to define a relative time period when adding a custom segment in ChartMogul. Whilst on the surface this seems quite straightforward, it unlocks a whole new set of possible customer segments. What can I do with it? It simply means that instead of a fixed date-based period in a segment, which until today was the only option, e.g: Show me all the customers who signed up since 30/01/2016 …you can now specify a ‘dynamic’, or ‘relative’ time period for the segment, such as: Show me all the customers who signed up within the last 30 days Using this, the following segments are now possible: All annual customers up for renewal in the next 14 days. Customers who upgraded in the past week. Customers less than 3 months old with an NPS score lower than ‘4’. It’s important to remember that segments with rules using relative time-frames are dynamic and will evolve over time. For example, “less than 30 days ago” depends on the current date. How do I use it? To use a parameter with a relative time-span, simply add a custom filter to your view in ChartMogul as normal. When you select a date-based parameter (e.g. Next payment) and select the value field, you’ll be able to toggle between the Relative and Calendar-based (fixed) views: In Relative mode, the following types of rules are possible: before [X] days/weeks/months from now on or before [X] days/weeks/months from now exactly [X] days/weeks/months from now after [X] days/weeks/months from now on or after [X] days/weeks/months from now before [X] days/weeks/months ago on or before [X] days/weeks/months ago exactly [X] days/weeks/months ago after [X] days/weeks/months ago on or after [X] days/weeks/months ago That’s not all… As well as this we’ve also rolled out two smaller enhancements to Segmentation in the last few weeks: New parameter: “Didn’t churn within [X] days of purchase” This allows you to effectively ignore a specific set of customers who churned within a short period after purchasing your product or service. This can be useful in pricing models that include a money-back guarantee, where you don’t consider cancellations within a certain time period as ‘real churn’. New parameter: MRR (if cancelled uses MRR before churn) While we’ve had the “Current MRR” attribute available from the start this isn’t so useful if you want to analyse churn rates for example, e.g. what is the churn rate for customers who pay over $100 per month. With Current MRR this excluded all the churned customers because their MRR was $0. With the new attribute MRR (if cancelled uses MRR before churn), the MRR value for churned customers will be equal to the last value before they churned (instead of zero).

[INST] Feature update: Relative time in Segmentation [/INST]

Segmentation: The biggest feature launch to date Last month we announced a set of features that we’d been building and iterating on for some time. Segmentation brought probably the biggest change to functionality in ChartMogul since our public release back in 2014, as well as a world of potential when it comes to optimizing and growing your subscription business. ChartMogul customers are now creating views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep …and many more powerful segments. We’re constantly impressed by the different ways in which people are using Segmentation to take their SaaS analytics to the next level. The initial launch of Segmentation last month was the first step in building out an advanced set of features for segmenting customers in ChartMogul. These features are an ever-evolving set of functionality on which we’re already building future iterations. Today we’re launching an update which further expands the possibilities for Segmentation. Relative time makes Segmentation more powerful Today’s update allows you to define a relative time period when adding a custom segment in ChartMogul. Whilst on the surface this seems quite straightforward, it unlocks a whole new set of possible customer segments. What can I do with it? It simply means that instead of a fixed date-based period in a segment, which until today was the only option, e.g: Show me all the customers who signed up since 30/01/2016 …you can now specify a ‘dynamic’, or ‘relative’ time period for the segment, such as: Show me all the customers who signed up within the last 30 days Using this, the following segments are now possible: All annual customers up for renewal in the next 14 days. Customers who upgraded in the past week. Customers less than 3 months old with an NPS score lower than ‘4’. It’s important to remember that segments with rules using relative time-frames are dynamic and will evolve over time. For example, “less than 30 days ago” depends on the current date. How do I use it? To use a parameter with a relative time-span, simply add a custom filter to your view in ChartMogul as normal. When you select a date-based parameter (e.g. Next payment) and select the value field, you’ll be able to toggle between the Relative and Calendar-based (fixed) views: In Relative mode, the following types of rules are possible: before [X] days/weeks/months from now on or before [X] days/weeks/months from now exactly [X] days/weeks/months from now after [X] days/weeks/months from now on or after [X] days/weeks/months from now before [X] days/weeks/months ago on or before [X] days/weeks/months ago exactly [X] days/weeks/months ago after [X] days/weeks/months ago on or after [X] days/weeks/months ago That’s not all… As well as this we’ve also rolled out two smaller enhancements to Segmentation in the last few weeks: New parameter: “Didn’t churn within [X] days of purchase” This allows you to effectively ignore a specific set of customers who churned within a short period after purchasing your product or service. This can be useful in pricing models that include a money-back guarantee, where you don’t consider cancellations within a certain time period as ‘real churn’. New parameter: MRR (if cancelled uses MRR before churn) While we’ve had the “Current MRR” attribute available from the start this isn’t so useful if you want to analyse churn rates for example, e.g. what is the churn rate for customers who pay over $100 per month. With Current MRR this excluded all the churned customers because their MRR was $0. With the new attribute MRR (if cancelled uses MRR before churn), the MRR value for churned customers will be equal to the last value before they churned (instead of zero).

<sys> [INST] Feature update: Relative time in Segmentation [/INST] Segmentation: The biggest feature launch to date Last month we announced a set of features that we’d been building and iterating on for some time. Segmentation brought probably the biggest change to functionality in ChartMogul since our public release back in 2014, as well as a world of potential when it comes to optimizing and growing your subscription business. ChartMogul customers are now creating views of their data such as: Monthly Recurring Revenue broken down by marketing channel Lifetime Value broken down by NPS score Churn Rate broken down by sales rep …and many more powerful segments. We’re constantly impressed by the different ways in which people are using Segmentation to take their SaaS analytics to the next level. The initial launch of Segmentation last month was the first step in building out an advanced set of features for segmenting customers in ChartMogul. These features are an ever-evolving set of functionality on which we’re already building future iterations. Today we’re launching an update which further expands the possibilities for Segmentation. Relative time makes Segmentation more powerful Today’s update allows you to define a relative time period when adding a custom segment in ChartMogul. Whilst on the surface this seems quite straightforward, it unlocks a whole new set of possible customer segments. What can I do with it? It simply means that instead of a fixed date-based period in a segment, which until today was the only option, e.g: Show me all the customers who signed up since 30/01/2016 …you can now specify a ‘dynamic’, or ‘relative’ time period for the segment, such as: Show me all the customers who signed up within the last 30 days Using this, the following segments are now possible: All annual customers up for renewal in the next 14 days. Customers who upgraded in the past week. Customers less than 3 months old with an NPS score lower than ‘4’. It’s important to remember that segments with rules using relative time-frames are dynamic and will evolve over time. For example, “less than 30 days ago” depends on the current date. How do I use it? To use a parameter with a relative time-span, simply add a custom filter to your view in ChartMogul as normal. When you select a date-based parameter (e.g. Next payment) and select the value field, you’ll be able to toggle between the Relative and Calendar-based (fixed) views: In Relative mode, the following types of rules are possible: before [X] days/weeks/months from now on or before [X] days/weeks/months from now exactly [X] days/weeks/months from now after [X] days/weeks/months from now on or after [X] days/weeks/months from now before [X] days/weeks/months ago on or before [X] days/weeks/months ago exactly [X] days/weeks/months ago after [X] days/weeks/months ago on or after [X] days/weeks/months ago That’s not all… As well as this we’ve also rolled out two smaller enhancements to Segmentation in the last few weeks: New parameter: “Didn’t churn within [X] days of purchase” This allows you to effectively ignore a specific set of customers who churned within a short period after purchasing your product or service. This can be useful in pricing models that include a money-back guarantee, where you don’t consider cancellations within a certain time period as ‘real churn’. New parameter: MRR (if cancelled uses MRR before churn) While we’ve had the “Current MRR” attribute available from the start this isn’t so useful if you want to analyse churn rates for example, e.g. what is the churn rate for customers who pay over $100 per month. With Current MRR this excluded all the churned customers because their MRR was $0. With the new attribute MRR (if cancelled uses MRR before churn), the MRR value for churned customers will be equal to the last value before they churned (instead of zero). </sys

SaaS Metrics Refresher #10: Wrapping it all up. This is our tenth and final outing in the SaaS Metrics Refresher bus. At this point we’ve touched a range of topics pertinent to SaaS businesses — some of them core metrics you’ll find on any investor report, some more loosely defined characteristics or tools you can use to understand your customers. One of the goals I had when building this ten-step course was to bring together a lot of the knowledge and lessons we’ve churned (sorry) through over the years at ChartMogul. Those of you who’ve been in the industry for some time might be intimately familiar with the subtleties of LTV prediction or the power of deep segmentation, but for anyone starting out today at building or growing a SaaS business, there’s not a clear path through all of those lessons. So that’s what this course has been — a way to connect the many dots of knowledge available The 8 biggest takeaways from the course Any good lesson or course ends with a recap — going over what’s been learned is critical for retention, so listen up! Let’s summarise and walk through some of the biggest learnings on each of the topics covered. Takeaway #1: Recurring revenue Read the full lesson here “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue is the foundation upon which every SaaS business is built. But the biggest takeaway for me is that it almost always helps to break a metric like monthly recurring revenue (MRR) into its component parts — MRR movements. Here’s an MRR movements chart from ChartMogul: Are you doing some analysis of your MRR? Try asking yourself what type of MRR you’re looking at. Takeaway #2: Churn Read the full lesson here “Companies put people on to a customer when they begin to show signs of leaving. A sensible approach to staying in control, is to engage and help customers find value from the very beginning. Adopt a proactive method towards building a trustful business relationship from the start and at various touch points throughout the customer lifecycle. This presents opportunities to iron out churn indications as they emerge, rather than having to firefight and being reactive.” Arun Mani, Freshworks In the SaaS world, one thing is inevitable: Churn. Just as all software has bugs, all SaaS has churn. The biggest lesson for me with churn was classification. Understanding trends in the reason behind customers leaving is often more important than the number itself — especially at the early stages of a business. As a reminder, churn can be: Proactive Passive Happy Not really churn at all (read more) Takeaway #3: Expansion Read the full lesson here “Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital My biggest takeaway when it came to expansion was that it should be woven into the design of your pricing — it doesn’t need to be a product of luck! Take the time to design a pricing model that leads to healthy expansion over time, ideally as your customers grow and see more success with your product. Takeaway #4: Lifetime value Read the full lesson here “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. David Skok, Matrix Partner Time for a controversial hot take(away): Most people reading this probably shouldn’t worry about estimating LTV accurately. In fact, it’s probably better if they don’t look at LTV at all! I discussed this with David Skok in a recent podcast. David also reiterated the point that early stage SaaS businesses shouldn’t focus on LTV, it’s just not possible to predict accurately with such a small volume of data. Takeaway #5: Cohorts Read the full lesson here “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital Cohorts seem really simple on the surface, but can be surprisingly powerful. My biggest takeaway from this was to use cohorts to get a more nuanced view on retention: Instead of looking at your global retention numbers, look at them on a per-cohort basis. Then instead of the absolute, you can understand the trend. Takeaway #6: Revenue recognition Read the full lesson here “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC Revenue recognition is a tough nut to crack, and for some, a necessary evil. Whether you like it or not, you need to balance your books. With the introduction of ASC 606, revenue recognition for SaaS changed significantly. But it’s actually a lot more straightforward than it used to be! Start with the 6 guiding principles in the lesson. Takeaway #7: Data literacy Read the full lesson here “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes After researching for a blog post on data literacy, it dawned on me how much we expect of employees when it comes to interpreting and understanding data nowadays, and how little attention we give to encouraging a good baseline of literacy with data. My takeaway here is that if you really want to be a “data driven” business, you need to start including data literacy as a core competency for every role that works with data. Takeaway #8: Segmentation Read the full lesson here “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint Ventures For me, the takeaway here was the gap between an “aspirational” segment and one that fits all of the criteria Tunguz references above — measurable, addressable, stable and consistent. There are many segments that would be incredibly valuable and actionable, but we simply can’t measure them in a reliable way. Read the full lesson on segmentation That’s a wrap, folks! Remember you can always go back to any of the lessons above, download the resources and go over the details. Still haven’t run through the course yet? What are you doing?! Drop your email here and we’ll walk you through the content week by week.

[INST] SaaS Metrics Refresher #10: Wrapping it all up [/INST]

This is our tenth and final outing in the SaaS Metrics Refresher bus. At this point we’ve touched a range of topics pertinent to SaaS businesses — some of them core metrics you’ll find on any investor report, some more loosely defined characteristics or tools you can use to understand your customers. One of the goals I had when building this ten-step course was to bring together a lot of the knowledge and lessons we’ve churned (sorry) through over the years at ChartMogul. Those of you who’ve been in the industry for some time might be intimately familiar with the subtleties of LTV prediction or the power of deep segmentation, but for anyone starting out today at building or growing a SaaS business, there’s not a clear path through all of those lessons. So that’s what this course has been — a way to connect the many dots of knowledge available The 8 biggest takeaways from the course Any good lesson or course ends with a recap — going over what’s been learned is critical for retention, so listen up! Let’s summarise and walk through some of the biggest learnings on each of the topics covered. Takeaway #1: Recurring revenue Read the full lesson here “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue is the foundation upon which every SaaS business is built. But the biggest takeaway for me is that it almost always helps to break a metric like monthly recurring revenue (MRR) into its component parts — MRR movements. Here’s an MRR movements chart from ChartMogul: Are you doing some analysis of your MRR? Try asking yourself what type of MRR you’re looking at. Takeaway #2: Churn Read the full lesson here “Companies put people on to a customer when they begin to show signs of leaving. A sensible approach to staying in control, is to engage and help customers find value from the very beginning. Adopt a proactive method towards building a trustful business relationship from the start and at various touch points throughout the customer lifecycle. This presents opportunities to iron out churn indications as they emerge, rather than having to firefight and being reactive.” Arun Mani, Freshworks In the SaaS world, one thing is inevitable: Churn. Just as all software has bugs, all SaaS has churn. The biggest lesson for me with churn was classification. Understanding trends in the reason behind customers leaving is often more important than the number itself — especially at the early stages of a business. As a reminder, churn can be: Proactive Passive Happy Not really churn at all (read more) Takeaway #3: Expansion Read the full lesson here “Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital My biggest takeaway when it came to expansion was that it should be woven into the design of your pricing — it doesn’t need to be a product of luck! Take the time to design a pricing model that leads to healthy expansion over time, ideally as your customers grow and see more success with your product. Takeaway #4: Lifetime value Read the full lesson here “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. David Skok, Matrix Partner Time for a controversial hot take(away): Most people reading this probably shouldn’t worry about estimating LTV accurately. In fact, it’s probably better if they don’t look at LTV at all! I discussed this with David Skok in a recent podcast. David also reiterated the point that early stage SaaS businesses shouldn’t focus on LTV, it’s just not possible to predict accurately with such a small volume of data. Takeaway #5: Cohorts Read the full lesson here “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital Cohorts seem really simple on the surface, but can be surprisingly powerful. My biggest takeaway from this was to use cohorts to get a more nuanced view on retention: Instead of looking at your global retention numbers, look at them on a per-cohort basis. Then instead of the absolute, you can understand the trend. Takeaway #6: Revenue recognition Read the full lesson here “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC Revenue recognition is a tough nut to crack, and for some, a necessary evil. Whether you like it or not, you need to balance your books. With the introduction of ASC 606, revenue recognition for SaaS changed significantly. But it’s actually a lot more straightforward than it used to be! Start with the 6 guiding principles in the lesson. Takeaway #7: Data literacy Read the full lesson here “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes After researching for a blog post on data literacy, it dawned on me how much we expect of employees when it comes to interpreting and understanding data nowadays, and how little attention we give to encouraging a good baseline of literacy with data. My takeaway here is that if you really want to be a “data driven” business, you need to start including data literacy as a core competency for every role that works with data. Takeaway #8: Segmentation Read the full lesson here “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint Ventures For me, the takeaway here was the gap between an “aspirational” segment and one that fits all of the criteria Tunguz references above — measurable, addressable, stable and consistent. There are many segments that would be incredibly valuable and actionable, but we simply can’t measure them in a reliable way. Read the full lesson on segmentation That’s a wrap, folks! Remember you can always go back to any of the lessons above, download the resources and go over the details. Still haven’t run through the course yet? What are you doing?! Drop your email here and we’ll walk you through the content week by week.

<sys> [INST] SaaS Metrics Refresher #10: Wrapping it all up [/INST] This is our tenth and final outing in the SaaS Metrics Refresher bus. At this point we’ve touched a range of topics pertinent to SaaS businesses — some of them core metrics you’ll find on any investor report, some more loosely defined characteristics or tools you can use to understand your customers. One of the goals I had when building this ten-step course was to bring together a lot of the knowledge and lessons we’ve churned (sorry) through over the years at ChartMogul. Those of you who’ve been in the industry for some time might be intimately familiar with the subtleties of LTV prediction or the power of deep segmentation, but for anyone starting out today at building or growing a SaaS business, there’s not a clear path through all of those lessons. So that’s what this course has been — a way to connect the many dots of knowledge available The 8 biggest takeaways from the course Any good lesson or course ends with a recap — going over what’s been learned is critical for retention, so listen up! Let’s summarise and walk through some of the biggest learnings on each of the topics covered. Takeaway #1: Recurring revenue Read the full lesson here “The advantage of MRR is that because it’s pretty consistent and predictable, it helps your company more accurately forecast. Plus, calculating MRR encourages a growing SaaS provider to focus on achieving the essential short-term objective of building a steady revenue stream.” Mikayla Middleton, ShipEngine Recurring revenue is the foundation upon which every SaaS business is built. But the biggest takeaway for me is that it almost always helps to break a metric like monthly recurring revenue (MRR) into its component parts — MRR movements. Here’s an MRR movements chart from ChartMogul: Are you doing some analysis of your MRR? Try asking yourself what type of MRR you’re looking at. Takeaway #2: Churn Read the full lesson here “Companies put people on to a customer when they begin to show signs of leaving. A sensible approach to staying in control, is to engage and help customers find value from the very beginning. Adopt a proactive method towards building a trustful business relationship from the start and at various touch points throughout the customer lifecycle. This presents opportunities to iron out churn indications as they emerge, rather than having to firefight and being reactive.” Arun Mani, Freshworks In the SaaS world, one thing is inevitable: Churn. Just as all software has bugs, all SaaS has churn. The biggest lesson for me with churn was classification. Understanding trends in the reason behind customers leaving is often more important than the number itself — especially at the early stages of a business. As a reminder, churn can be: Proactive Passive Happy Not really churn at all (read more) Takeaway #3: Expansion Read the full lesson here “Expansion MRR shows if the company can deliver more and more value to customers and monetize that value. Being able to generate expansion MRR is extremely valuable, especially longer term. Most of the best later-stage SaaS companies get a significant portion of their growth from existing customers.” Christoph Janz, Point Nine Capital My biggest takeaway when it came to expansion was that it should be woven into the design of your pricing — it doesn’t need to be a product of luck! Take the time to design a pricing model that leads to healthy expansion over time, ideally as your customers grow and see more success with your product. Takeaway #4: Lifetime value Read the full lesson here “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. David Skok, Matrix Partner Time for a controversial hot take(away): Most people reading this probably shouldn’t worry about estimating LTV accurately. In fact, it’s probably better if they don’t look at LTV at all! I discussed this with David Skok in a recent podcast. David also reiterated the point that early stage SaaS businesses shouldn’t focus on LTV, it’s just not possible to predict accurately with such a small volume of data. Takeaway #5: Cohorts Read the full lesson here “One of the most important tools to better understand the usage of a web application – or a service, a game or a mobile app, it doesn’t matter – is a cohort analysis. In fact, it’s almost impossible to get a really good understanding of a service’s usage without looking at activity and retention numbers on a cohort-by-cohort basis.” Christoph Janz, Point Nine Capital Cohorts seem really simple on the surface, but can be surprisingly powerful. My biggest takeaway from this was to use cohorts to get a more nuanced view on retention: Instead of looking at your global retention numbers, look at them on a per-cohort basis. Then instead of the absolute, you can understand the trend. Takeaway #6: Revenue recognition Read the full lesson here “The new revenue standard will significantly affect the revenue recognition practices of most companies. The new standard provides a comprehensive, industry-neutral revenue recognition model intended to increase financial statement comparability across companies and industries.” PwC Revenue recognition is a tough nut to crack, and for some, a necessary evil. Whether you like it or not, you need to balance your books. With the introduction of ASC 606, revenue recognition for SaaS changed significantly. But it’s actually a lot more straightforward than it used to be! Start with the 6 guiding principles in the lesson. Takeaway #7: Data literacy Read the full lesson here “Data literacy is built upon data democratization and the user experience. If a platform is difficult, it won’t be used. If a platform doesn’t serve all teams equally well, it will not be adopted across the organization. If a platform isn’t architected to bridge the gap between regular people and the data scientists creating the algorithms, then the era of data-driven anything will fail to materialize.” H.O. Maycotte, Forbes After researching for a blog post on data literacy, it dawned on me how much we expect of employees when it comes to interpreting and understanding data nowadays, and how little attention we give to encouraging a good baseline of literacy with data. My takeaway here is that if you really want to be a “data driven” business, you need to start including data literacy as a core competency for every role that works with data. Takeaway #8: Segmentation Read the full lesson here “…is the segment measurable, addressable, stable and consistent? But the most basic is the first. Is there enough data? Segmentation is a powerful tool to be employed by startups once the customer base becomes large enough, which probably means at least a few hundred customers.” Tomasz Tunguz, Redpoint Ventures For me, the takeaway here was the gap between an “aspirational” segment and one that fits all of the criteria Tunguz references above — measurable, addressable, stable and consistent. There are many segments that would be incredibly valuable and actionable, but we simply can’t measure them in a reliable way. Read the full lesson on segmentation That’s a wrap, folks! Remember you can always go back to any of the lessons above, download the resources and go over the details. Still haven’t run through the course yet? What are you doing?! Drop your email here and we’ll walk you through the content week by week. </sys

Why B2B is finally investing in brand. It all started with subtle changes — the inclusion of friendly illustrations, new colors in landing pages and tweaks to website copy. Many growth industries — SaaS included — congregate around new trends. These recent subtle shifts in approach to B2B brand have snowballed into a full scale rethink of what it means to produce and sell B2B software. Pivotal moments in this shift include Dropbox’s 2017 redesign, from a predictable utilitarian experience to something far bolder: More recently, when I read Typeform’s “behind the scenes” account of the company’s rebrand (almost a year in the making!) I realized the extent to which B2B SaaS companies were taking a ground-up approach to designing brand experience and asking fundamental questions like “who are we?” The new Typeform brand identity. It’s fascinating to take a look at the companies driving such a movement and how they’re rethinking the way they present themselves to the world — let’s dive in! Post-consumerization SaaS is here The consumerization of SaaS is a concept that’s been discussed (perhaps to death) in recent years. It encapsulates a trend in B2B software toward a greater focus on the user experience (UX), often borrowing heavily from design patterns and trends on the consumer side. While this may seem obvious today (many B2B products offer a great UX), business software has historically lacked on this front — carrying the argument that UX is not a valid differentiator for business users who just want to “get their job done.” “The new era is about mobile and SaaS apps that rewrite the way that work gets done. And while they are at it, the user is delighted with consumer-grade, ‘beautifully simple’ UI.” David Skok (source) I’m calling it now: 2018 is the year when B2B SaaS breaks out of its consumerization shackles. We no longer need to evaluate products in the light of their consumer equivalents or make guesses as to where certain design features were borrowed from. It’s time for B2B SaaS to stand on its own as a mature category of software with its own thought leadership, unique user experience and branding. Why now? What’s driving this? “I’ve been thinking a lot lately about how we build the company of the future here at Drift. And I always come back to these three key ingredients: We need to have the best products. We need to have the best service. We need to have the best brand.” David Cancel, Founder of Drift (source) The market for B2B SaaS is maturing. Venture capitalists are discussing the growing divide between SaaS and VC funding, with the potential for huge returns associated with VC becoming increasingly rare. (See The Rise of Non “VC compatible” SaaS Companies.) “Founders must increasingly be aware that going the VC way might not be the best solution for them and that bootstrapping 100% or finding alternative ways of financing their company can be healthier.” Clement Vouillon, Point Nine Capital (source) SaaS is a “winner takes most” industry, where the biggest gains and growth are seen in categories where the business can dominate. Today, most categories are ripe with strong competition. It’s never been easier to build a SaaS business. A wealth of building blocks exist — tools, infrastructure, APIs to code against — making the cost of entry lower than ever. But all of this brings increased competition. With so many similar solutions on the market, it’s difficult to differentiate your product on features alone. So how else can companies differentiate themselves? Price — yes, but that’s a race to the bottom. Brand differentiation is the answer. A well-designed and established brand is a defensible form of differentiation that can carry a strong influence over users. What is branding? It’s easy to think of a brand as something that’s strongly tied to visual design. That’s definitely the case, but it’s also much broader than that. Take Shopify’s definition of branding for example: “Branding is all of the ways you establish an image of your company in your customers’ eyes.” Which is to say that it’s more related to the customers’ perception of your company than the visual representation itself. Of course, colors, logos and aesthetics are one of the primary ways we influence our branding — they set the tone for customer perception. But the list of elements that influence branding is huge: Company logo Color palette Web design Product user experience (UX) Blog content Email content Public speaking Company culture Customer support experience …and much more. If you want to read more about the relationship with brand and user experience from a content perspective, check out the post Is Your Content Marketing Making Brand Withdrawals? Characteristics of a modern SaaS brand On the surface it might seem like one company innovates while the others all copy, but there are a number of businesses in SaaS working hard to build a stand-out brand experience. If you look close enough, they all differ in some way or another. But they do share some commonalities. This post covers many of the visual elements of branding — the web design, general aesthetic etc. — because these are the most publicly-visible components. However, I would expect that all of the companies mentioned have built a stand-out brand that runs much deeper than this. Bold, strong visual identity The days of bland B2B software websites are over. The cutting edge today is punchy, colorful and full of contrast. It’s like B2B SaaS finally drummed up enough confidence to step out of its grey hoodie and show off that technicolor t-shirt underneath. Example: Intercom Intercom cemented its commitment to design and branding a few years ago when it launched the Intercom Brand Studio. This in-house team seemingly has a lot of freedom to think deeply about the overall brand experience of Intercom and contributes on a wide range of projects — from product design to e-books and even print design. The result is a highly differentiated, forward-thinking SaaS brand experience. No other B2B brands out there really touch Intercom in terms of brand experience, and many design trends are pioneered from within the Intercom Brand Studio. Example: Dropbox Dropbox is an interesting case because it’s a business with a large number of both B2C and B2B customers. Perhaps this contributed to its role in influencing branding in the B2B world. Some years ago, Dropbox ushered in many of the current B2B trends of today — utilitarian, functional design with small hints of character through friendly hand-drawn sketches. Their 2017 rebrand (which was likely in preparation for their forthcoming IPO) saw a radical departure from the old-style Dropbox. The new brand serves to represent a highly creative aesthetic reflected in its target user base. While it originated as a cloud storage solution, the Dropbox of today is focused on tools for creation and professional productivity. Real people, original images (stock images are destroying souls) There’s a real problem with most stock images: they look like stock images. While they used to be a cost-efficient way to leverage professional-quality imagery on your company’s website, the kinds of stock images used in B2B software have converged on a common aesthetic — there’s not really much differentiation any more. Secondly, stock images are just too generic. Because they’re designed to fit a large range of clients and uses, they don’t do a good job of accurately conveying your specific brand, and they’re certainly not tailored to your company and its culture. Finally, with massively popular free stock outlets like Unsplash, commonly used images can even be recognized in multiple places around the internet. What worse way to differentiate your brand than to use a hero image that appears on other sites in the industry? B2B businesses in 2018 are realizing the true value of using real people in their images — whether that’s real customers (see Typeform below) or employees. This may require a greater upfront production cost than a purchased stock image, but the end result is far more engaging and relevant to the brand. Example: Typeform Typeform showcases real customers on their landing page. Example: Drift The Drift landing page doesn’t just feature real customers — it’s completely positioned around a single customer! Friendly, abstract illustrations There’s no doubt you’ve identified the new trend in illustrations on SaaS websites. This imagery comes across as friendly and approachable, while conveying the product’s values in an abstract way. In many scenarios, these illustrations have replaced the generic looking stock images previously occupying the “hero” slot on the landing page. Example: Airtable The fun, whimsical illustrations on Airtable’s landing page suggest creativity and playfulness. Example: Atlassian Atlassian’s landing page illustrations are visually interesting and also reflect the theme of the company — collaboration. Simple, accessible language Kiss goodbye to overly colorful, buzzword-filled copy! Simplicity is the flavor of the moment when it comes to the language of B2B businesses. But it runs a little deeper than simplicity alone. The companies pioneering in this area are using copy that’s refreshingly direct — in some cases, surprisingly so. Complex copy is no longer recognized as a marker of sophistication, perhaps as a result of its overuse in recent years. In 2018, headlines are best served short, punchy and to-the-point. Example: Basecamp Basecamp’s landing page copy certainly strikes a chord with professionals suffering from the exact problems they describe — it speaks directly to the user. Aspirational simplicity is the name of the game with this copy. Extension of the brand throughout the user experience (including the product) Engaging people on your company website with a captivating brand is a good step toward B2B success. But businesses are realizing the importance of carrying this experience far beyond the website itself and into the complete product experience. In SaaS and subscription businesses there’s no one-time purchase. Instead, businesses need to attract customers and keep them subscribed by driving significant ongoing value. This requires a holistic approach to branding that’s inextricably tied to user experience. Ask yourself this in 2018: Is your website writing checks that your product can’t cash? Example: Gusto The character and rich, playful nature of Gusto’s brand really shines throughout the product experience. Emotive Example: Typeform Does emotion really belong in business software? Typeform would argue so. With their recent rebrand (which you can read about here), the team stripped everything back to first principles and faced existential questions like “Who are we?” “By listening to our customers, we realized that people often refer to Typeform with words like “love, fun, beautiful.” That’s some pretty emotional vocab for a data collection tool, right?” Alex Antolino, Creative Director at Typeform After a year-long process, the end result is packed with emotion and personality. It’s time for B2B branding to stand on its own The above shifts in B2B companies leading them to leverage great user experience and effective branding has not happened overnight. We’ve seen several phases over a span of multiple years: Phase one saw the enterprise businesses of yesteryear entirely focused on product utility and feature lists. In phase two, businesses awoke to the possibility of great user experience and branding in B2B software. Some companies in the space realized they could innovate with a thoughtfully designed, delightful UX. These companies were largely borrowing from ideas and concepts in the consumer space. Phase three is where we’re at today. Successful B2B brands are no longer chasing the shadows of their more innovative B2C counterparts — these companies now stand on their own and are paving the way for the rest of the industry to follow suit in creating a stand-out brand experience and truly differentiate themselves from competitors.

[INST] Why B2B is finally investing in brand [/INST]

It all started with subtle changes — the inclusion of friendly illustrations, new colors in landing pages and tweaks to website copy. Many growth industries — SaaS included — congregate around new trends. These recent subtle shifts in approach to B2B brand have snowballed into a full scale rethink of what it means to produce and sell B2B software. Pivotal moments in this shift include Dropbox’s 2017 redesign, from a predictable utilitarian experience to something far bolder: More recently, when I read Typeform’s “behind the scenes” account of the company’s rebrand (almost a year in the making!) I realized the extent to which B2B SaaS companies were taking a ground-up approach to designing brand experience and asking fundamental questions like “who are we?” The new Typeform brand identity. It’s fascinating to take a look at the companies driving such a movement and how they’re rethinking the way they present themselves to the world — let’s dive in! Post-consumerization SaaS is here The consumerization of SaaS is a concept that’s been discussed (perhaps to death) in recent years. It encapsulates a trend in B2B software toward a greater focus on the user experience (UX), often borrowing heavily from design patterns and trends on the consumer side. While this may seem obvious today (many B2B products offer a great UX), business software has historically lacked on this front — carrying the argument that UX is not a valid differentiator for business users who just want to “get their job done.” “The new era is about mobile and SaaS apps that rewrite the way that work gets done. And while they are at it, the user is delighted with consumer-grade, ‘beautifully simple’ UI.” David Skok (source) I’m calling it now: 2018 is the year when B2B SaaS breaks out of its consumerization shackles. We no longer need to evaluate products in the light of their consumer equivalents or make guesses as to where certain design features were borrowed from. It’s time for B2B SaaS to stand on its own as a mature category of software with its own thought leadership, unique user experience and branding. Why now? What’s driving this? “I’ve been thinking a lot lately about how we build the company of the future here at Drift. And I always come back to these three key ingredients: We need to have the best products. We need to have the best service. We need to have the best brand.” David Cancel, Founder of Drift (source) The market for B2B SaaS is maturing. Venture capitalists are discussing the growing divide between SaaS and VC funding, with the potential for huge returns associated with VC becoming increasingly rare. (See The Rise of Non “VC compatible” SaaS Companies.) “Founders must increasingly be aware that going the VC way might not be the best solution for them and that bootstrapping 100% or finding alternative ways of financing their company can be healthier.” Clement Vouillon, Point Nine Capital (source) SaaS is a “winner takes most” industry, where the biggest gains and growth are seen in categories where the business can dominate. Today, most categories are ripe with strong competition. It’s never been easier to build a SaaS business. A wealth of building blocks exist — tools, infrastructure, APIs to code against — making the cost of entry lower than ever. But all of this brings increased competition. With so many similar solutions on the market, it’s difficult to differentiate your product on features alone. So how else can companies differentiate themselves? Price — yes, but that’s a race to the bottom. Brand differentiation is the answer. A well-designed and established brand is a defensible form of differentiation that can carry a strong influence over users. What is branding? It’s easy to think of a brand as something that’s strongly tied to visual design. That’s definitely the case, but it’s also much broader than that. Take Shopify’s definition of branding for example: “Branding is all of the ways you establish an image of your company in your customers’ eyes.” Which is to say that it’s more related to the customers’ perception of your company than the visual representation itself. Of course, colors, logos and aesthetics are one of the primary ways we influence our branding — they set the tone for customer perception. But the list of elements that influence branding is huge: Company logo Color palette Web design Product user experience (UX) Blog content Email content Public speaking Company culture Customer support experience …and much more. If you want to read more about the relationship with brand and user experience from a content perspective, check out the post Is Your Content Marketing Making Brand Withdrawals? Characteristics of a modern SaaS brand On the surface it might seem like one company innovates while the others all copy, but there are a number of businesses in SaaS working hard to build a stand-out brand experience. If you look close enough, they all differ in some way or another. But they do share some commonalities. This post covers many of the visual elements of branding — the web design, general aesthetic etc. — because these are the most publicly-visible components. However, I would expect that all of the companies mentioned have built a stand-out brand that runs much deeper than this. Bold, strong visual identity The days of bland B2B software websites are over. The cutting edge today is punchy, colorful and full of contrast. It’s like B2B SaaS finally drummed up enough confidence to step out of its grey hoodie and show off that technicolor t-shirt underneath. Example: Intercom Intercom cemented its commitment to design and branding a few years ago when it launched the Intercom Brand Studio. This in-house team seemingly has a lot of freedom to think deeply about the overall brand experience of Intercom and contributes on a wide range of projects — from product design to e-books and even print design. The result is a highly differentiated, forward-thinking SaaS brand experience. No other B2B brands out there really touch Intercom in terms of brand experience, and many design trends are pioneered from within the Intercom Brand Studio. Example: Dropbox Dropbox is an interesting case because it’s a business with a large number of both B2C and B2B customers. Perhaps this contributed to its role in influencing branding in the B2B world. Some years ago, Dropbox ushered in many of the current B2B trends of today — utilitarian, functional design with small hints of character through friendly hand-drawn sketches. Their 2017 rebrand (which was likely in preparation for their forthcoming IPO) saw a radical departure from the old-style Dropbox. The new brand serves to represent a highly creative aesthetic reflected in its target user base. While it originated as a cloud storage solution, the Dropbox of today is focused on tools for creation and professional productivity. Real people, original images (stock images are destroying souls) There’s a real problem with most stock images: they look like stock images. While they used to be a cost-efficient way to leverage professional-quality imagery on your company’s website, the kinds of stock images used in B2B software have converged on a common aesthetic — there’s not really much differentiation any more. Secondly, stock images are just too generic. Because they’re designed to fit a large range of clients and uses, they don’t do a good job of accurately conveying your specific brand, and they’re certainly not tailored to your company and its culture. Finally, with massively popular free stock outlets like Unsplash, commonly used images can even be recognized in multiple places around the internet. What worse way to differentiate your brand than to use a hero image that appears on other sites in the industry? B2B businesses in 2018 are realizing the true value of using real people in their images — whether that’s real customers (see Typeform below) or employees. This may require a greater upfront production cost than a purchased stock image, but the end result is far more engaging and relevant to the brand. Example: Typeform Typeform showcases real customers on their landing page. Example: Drift The Drift landing page doesn’t just feature real customers — it’s completely positioned around a single customer! Friendly, abstract illustrations There’s no doubt you’ve identified the new trend in illustrations on SaaS websites. This imagery comes across as friendly and approachable, while conveying the product’s values in an abstract way. In many scenarios, these illustrations have replaced the generic looking stock images previously occupying the “hero” slot on the landing page. Example: Airtable The fun, whimsical illustrations on Airtable’s landing page suggest creativity and playfulness. Example: Atlassian Atlassian’s landing page illustrations are visually interesting and also reflect the theme of the company — collaboration. Simple, accessible language Kiss goodbye to overly colorful, buzzword-filled copy! Simplicity is the flavor of the moment when it comes to the language of B2B businesses. But it runs a little deeper than simplicity alone. The companies pioneering in this area are using copy that’s refreshingly direct — in some cases, surprisingly so. Complex copy is no longer recognized as a marker of sophistication, perhaps as a result of its overuse in recent years. In 2018, headlines are best served short, punchy and to-the-point. Example: Basecamp Basecamp’s landing page copy certainly strikes a chord with professionals suffering from the exact problems they describe — it speaks directly to the user. Aspirational simplicity is the name of the game with this copy. Extension of the brand throughout the user experience (including the product) Engaging people on your company website with a captivating brand is a good step toward B2B success. But businesses are realizing the importance of carrying this experience far beyond the website itself and into the complete product experience. In SaaS and subscription businesses there’s no one-time purchase. Instead, businesses need to attract customers and keep them subscribed by driving significant ongoing value. This requires a holistic approach to branding that’s inextricably tied to user experience. Ask yourself this in 2018: Is your website writing checks that your product can’t cash? Example: Gusto The character and rich, playful nature of Gusto’s brand really shines throughout the product experience. Emotive Example: Typeform Does emotion really belong in business software? Typeform would argue so. With their recent rebrand (which you can read about here), the team stripped everything back to first principles and faced existential questions like “Who are we?” “By listening to our customers, we realized that people often refer to Typeform with words like “love, fun, beautiful.” That’s some pretty emotional vocab for a data collection tool, right?” Alex Antolino, Creative Director at Typeform After a year-long process, the end result is packed with emotion and personality. It’s time for B2B branding to stand on its own The above shifts in B2B companies leading them to leverage great user experience and effective branding has not happened overnight. We’ve seen several phases over a span of multiple years: Phase one saw the enterprise businesses of yesteryear entirely focused on product utility and feature lists. In phase two, businesses awoke to the possibility of great user experience and branding in B2B software. Some companies in the space realized they could innovate with a thoughtfully designed, delightful UX. These companies were largely borrowing from ideas and concepts in the consumer space. Phase three is where we’re at today. Successful B2B brands are no longer chasing the shadows of their more innovative B2C counterparts — these companies now stand on their own and are paving the way for the rest of the industry to follow suit in creating a stand-out brand experience and truly differentiate themselves from competitors.

<sys> [INST] Why B2B is finally investing in brand [/INST] It all started with subtle changes — the inclusion of friendly illustrations, new colors in landing pages and tweaks to website copy. Many growth industries — SaaS included — congregate around new trends. These recent subtle shifts in approach to B2B brand have snowballed into a full scale rethink of what it means to produce and sell B2B software. Pivotal moments in this shift include Dropbox’s 2017 redesign, from a predictable utilitarian experience to something far bolder: More recently, when I read Typeform’s “behind the scenes” account of the company’s rebrand (almost a year in the making!) I realized the extent to which B2B SaaS companies were taking a ground-up approach to designing brand experience and asking fundamental questions like “who are we?” The new Typeform brand identity. It’s fascinating to take a look at the companies driving such a movement and how they’re rethinking the way they present themselves to the world — let’s dive in! Post-consumerization SaaS is here The consumerization of SaaS is a concept that’s been discussed (perhaps to death) in recent years. It encapsulates a trend in B2B software toward a greater focus on the user experience (UX), often borrowing heavily from design patterns and trends on the consumer side. While this may seem obvious today (many B2B products offer a great UX), business software has historically lacked on this front — carrying the argument that UX is not a valid differentiator for business users who just want to “get their job done.” “The new era is about mobile and SaaS apps that rewrite the way that work gets done. And while they are at it, the user is delighted with consumer-grade, ‘beautifully simple’ UI.” David Skok (source) I’m calling it now: 2018 is the year when B2B SaaS breaks out of its consumerization shackles. We no longer need to evaluate products in the light of their consumer equivalents or make guesses as to where certain design features were borrowed from. It’s time for B2B SaaS to stand on its own as a mature category of software with its own thought leadership, unique user experience and branding. Why now? What’s driving this? “I’ve been thinking a lot lately about how we build the company of the future here at Drift. And I always come back to these three key ingredients: We need to have the best products. We need to have the best service. We need to have the best brand.” David Cancel, Founder of Drift (source) The market for B2B SaaS is maturing. Venture capitalists are discussing the growing divide between SaaS and VC funding, with the potential for huge returns associated with VC becoming increasingly rare. (See The Rise of Non “VC compatible” SaaS Companies.) “Founders must increasingly be aware that going the VC way might not be the best solution for them and that bootstrapping 100% or finding alternative ways of financing their company can be healthier.” Clement Vouillon, Point Nine Capital (source) SaaS is a “winner takes most” industry, where the biggest gains and growth are seen in categories where the business can dominate. Today, most categories are ripe with strong competition. It’s never been easier to build a SaaS business. A wealth of building blocks exist — tools, infrastructure, APIs to code against — making the cost of entry lower than ever. But all of this brings increased competition. With so many similar solutions on the market, it’s difficult to differentiate your product on features alone. So how else can companies differentiate themselves? Price — yes, but that’s a race to the bottom. Brand differentiation is the answer. A well-designed and established brand is a defensible form of differentiation that can carry a strong influence over users. What is branding? It’s easy to think of a brand as something that’s strongly tied to visual design. That’s definitely the case, but it’s also much broader than that. Take Shopify’s definition of branding for example: “Branding is all of the ways you establish an image of your company in your customers’ eyes.” Which is to say that it’s more related to the customers’ perception of your company than the visual representation itself. Of course, colors, logos and aesthetics are one of the primary ways we influence our branding — they set the tone for customer perception. But the list of elements that influence branding is huge: Company logo Color palette Web design Product user experience (UX) Blog content Email content Public speaking Company culture Customer support experience …and much more. If you want to read more about the relationship with brand and user experience from a content perspective, check out the post Is Your Content Marketing Making Brand Withdrawals? Characteristics of a modern SaaS brand On the surface it might seem like one company innovates while the others all copy, but there are a number of businesses in SaaS working hard to build a stand-out brand experience. If you look close enough, they all differ in some way or another. But they do share some commonalities. This post covers many of the visual elements of branding — the web design, general aesthetic etc. — because these are the most publicly-visible components. However, I would expect that all of the companies mentioned have built a stand-out brand that runs much deeper than this. Bold, strong visual identity The days of bland B2B software websites are over. The cutting edge today is punchy, colorful and full of contrast. It’s like B2B SaaS finally drummed up enough confidence to step out of its grey hoodie and show off that technicolor t-shirt underneath. Example: Intercom Intercom cemented its commitment to design and branding a few years ago when it launched the Intercom Brand Studio. This in-house team seemingly has a lot of freedom to think deeply about the overall brand experience of Intercom and contributes on a wide range of projects — from product design to e-books and even print design. The result is a highly differentiated, forward-thinking SaaS brand experience. No other B2B brands out there really touch Intercom in terms of brand experience, and many design trends are pioneered from within the Intercom Brand Studio. Example: Dropbox Dropbox is an interesting case because it’s a business with a large number of both B2C and B2B customers. Perhaps this contributed to its role in influencing branding in the B2B world. Some years ago, Dropbox ushered in many of the current B2B trends of today — utilitarian, functional design with small hints of character through friendly hand-drawn sketches. Their 2017 rebrand (which was likely in preparation for their forthcoming IPO) saw a radical departure from the old-style Dropbox. The new brand serves to represent a highly creative aesthetic reflected in its target user base. While it originated as a cloud storage solution, the Dropbox of today is focused on tools for creation and professional productivity. Real people, original images (stock images are destroying souls) There’s a real problem with most stock images: they look like stock images. While they used to be a cost-efficient way to leverage professional-quality imagery on your company’s website, the kinds of stock images used in B2B software have converged on a common aesthetic — there’s not really much differentiation any more. Secondly, stock images are just too generic. Because they’re designed to fit a large range of clients and uses, they don’t do a good job of accurately conveying your specific brand, and they’re certainly not tailored to your company and its culture. Finally, with massively popular free stock outlets like Unsplash, commonly used images can even be recognized in multiple places around the internet. What worse way to differentiate your brand than to use a hero image that appears on other sites in the industry? B2B businesses in 2018 are realizing the true value of using real people in their images — whether that’s real customers (see Typeform below) or employees. This may require a greater upfront production cost than a purchased stock image, but the end result is far more engaging and relevant to the brand. Example: Typeform Typeform showcases real customers on their landing page. Example: Drift The Drift landing page doesn’t just feature real customers — it’s completely positioned around a single customer! Friendly, abstract illustrations There’s no doubt you’ve identified the new trend in illustrations on SaaS websites. This imagery comes across as friendly and approachable, while conveying the product’s values in an abstract way. In many scenarios, these illustrations have replaced the generic looking stock images previously occupying the “hero” slot on the landing page. Example: Airtable The fun, whimsical illustrations on Airtable’s landing page suggest creativity and playfulness. Example: Atlassian Atlassian’s landing page illustrations are visually interesting and also reflect the theme of the company — collaboration. Simple, accessible language Kiss goodbye to overly colorful, buzzword-filled copy! Simplicity is the flavor of the moment when it comes to the language of B2B businesses. But it runs a little deeper than simplicity alone. The companies pioneering in this area are using copy that’s refreshingly direct — in some cases, surprisingly so. Complex copy is no longer recognized as a marker of sophistication, perhaps as a result of its overuse in recent years. In 2018, headlines are best served short, punchy and to-the-point. Example: Basecamp Basecamp’s landing page copy certainly strikes a chord with professionals suffering from the exact problems they describe — it speaks directly to the user. Aspirational simplicity is the name of the game with this copy. Extension of the brand throughout the user experience (including the product) Engaging people on your company website with a captivating brand is a good step toward B2B success. But businesses are realizing the importance of carrying this experience far beyond the website itself and into the complete product experience. In SaaS and subscription businesses there’s no one-time purchase. Instead, businesses need to attract customers and keep them subscribed by driving significant ongoing value. This requires a holistic approach to branding that’s inextricably tied to user experience. Ask yourself this in 2018: Is your website writing checks that your product can’t cash? Example: Gusto The character and rich, playful nature of Gusto’s brand really shines throughout the product experience. Emotive Example: Typeform Does emotion really belong in business software? Typeform would argue so. With their recent rebrand (which you can read about here), the team stripped everything back to first principles and faced existential questions like “Who are we?” “By listening to our customers, we realized that people often refer to Typeform with words like “love, fun, beautiful.” That’s some pretty emotional vocab for a data collection tool, right?” Alex Antolino, Creative Director at Typeform After a year-long process, the end result is packed with emotion and personality. It’s time for B2B branding to stand on its own The above shifts in B2B companies leading them to leverage great user experience and effective branding has not happened overnight. We’ve seen several phases over a span of multiple years: Phase one saw the enterprise businesses of yesteryear entirely focused on product utility and feature lists. In phase two, businesses awoke to the possibility of great user experience and branding in B2B software. Some companies in the space realized they could innovate with a thoughtfully designed, delightful UX. These companies were largely borrowing from ideas and concepts in the consumer space. Phase three is where we’re at today. Successful B2B brands are no longer chasing the shadows of their more innovative B2C counterparts — these companies now stand on their own and are paving the way for the rest of the industry to follow suit in creating a stand-out brand experience and truly differentiate themselves from competitors. </sys

The New Chargebee Integration: Open Invoices, Support for Add-ons, and More Accurate Cash Flow Reporting. The new version of our Chargebee integration provides you with more accurate cash flow reporting, more detailed reporting for add-ons, improved handling of prorated charges, and support for open invoices. We have hundreds of customers using Chargebee. It’s one of the fastest growing billing platforms worldwide so we know this number will continue to increase. We’ve been working hard to bring you the latest version of our Chargebee integration and are excited to announce that it’s finally live. The new Chargebee integration is live for all new accounts. Existing accounts using Chargebee can contact us to be migrated over, otherwise they can continue using their current integration. More accurate cash flow reporting The new Chargebee integration utilizes new fields in our Data Platform – because of this, we now are able to support partial refunds, balances, different proration types and credits. These partial payments will be more accurately reflected in your cash flow charts – so you’ll always know exactly how much cash you have on hand. Watch the pennies and the dollars watch themselves. With the new fields now displayed in our Data Platform, this makes it easier to understand how your metrics are calculated, giving you a better understanding of the forces that impact your business. New fields in Data Platform This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. This ensures that the numbers you see in ChartMogul can be traced back to transactions in Chargebee, and therefore, can be trusted. Improved handling of prorated charges The new Chargebee integration can better handle prorated charges, and the resulting MRR calculations. If a customer adds a new plan, seats, or somehow expands their account partway through the month, these changes are accurately reflected in your MRR in ChartMogul. For example, if a customer purchases an add-on to their subscription they’ll immediately receive an invoice for the prorated charges, and a subsequent invoice with the new total will be generated at the time the subscription is set to renew. More accurate reporting of add-ons Expansion can have a huge impact on your MRR growth. When you create subscriptions with base plans and add-ons in Chargebee, this will be treated as new business and expansion movements in ChartMogul. Previously, this would have been counted as a single new business movement. You’ll be able to better separate these components and more accurately measure expansion revenue that comes from these add-ons. The converse is also true; when a customer cancels an add-on but retains their base plan this will be counted as a contraction. With the new Chargebee integration, you can better measure expansion MRR, which will help your Customer Success team be more impactful. Support for add-ons Support for open invoices Unpaid subscriptions in Chargebee can now generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. Our new data setting will give you control over how and when subscriptions and MRR data are created. You can classify invoiced customers as active before the invoice has been paid and remove them if the invoice hasn’t been paid. You can include customers only when they have successfully paid or when the invoice has been opened. We’re excited to announce this new version of our Chargebee integration. Get in touch with us and let us know what you think. We’d love to hear any feedback you may have.

[INST] The New Chargebee Integration: Open Invoices, Support for Add-ons, and More Accurate Cash Flow Reporting [/INST]

The new version of our Chargebee integration provides you with more accurate cash flow reporting, more detailed reporting for add-ons, improved handling of prorated charges, and support for open invoices. We have hundreds of customers using Chargebee. It’s one of the fastest growing billing platforms worldwide so we know this number will continue to increase. We’ve been working hard to bring you the latest version of our Chargebee integration and are excited to announce that it’s finally live. The new Chargebee integration is live for all new accounts. Existing accounts using Chargebee can contact us to be migrated over, otherwise they can continue using their current integration. More accurate cash flow reporting The new Chargebee integration utilizes new fields in our Data Platform – because of this, we now are able to support partial refunds, balances, different proration types and credits. These partial payments will be more accurately reflected in your cash flow charts – so you’ll always know exactly how much cash you have on hand. Watch the pennies and the dollars watch themselves. With the new fields now displayed in our Data Platform, this makes it easier to understand how your metrics are calculated, giving you a better understanding of the forces that impact your business. New fields in Data Platform This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. This ensures that the numbers you see in ChartMogul can be traced back to transactions in Chargebee, and therefore, can be trusted. Improved handling of prorated charges The new Chargebee integration can better handle prorated charges, and the resulting MRR calculations. If a customer adds a new plan, seats, or somehow expands their account partway through the month, these changes are accurately reflected in your MRR in ChartMogul. For example, if a customer purchases an add-on to their subscription they’ll immediately receive an invoice for the prorated charges, and a subsequent invoice with the new total will be generated at the time the subscription is set to renew. More accurate reporting of add-ons Expansion can have a huge impact on your MRR growth. When you create subscriptions with base plans and add-ons in Chargebee, this will be treated as new business and expansion movements in ChartMogul. Previously, this would have been counted as a single new business movement. You’ll be able to better separate these components and more accurately measure expansion revenue that comes from these add-ons. The converse is also true; when a customer cancels an add-on but retains their base plan this will be counted as a contraction. With the new Chargebee integration, you can better measure expansion MRR, which will help your Customer Success team be more impactful. Support for add-ons Support for open invoices Unpaid subscriptions in Chargebee can now generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. Our new data setting will give you control over how and when subscriptions and MRR data are created. You can classify invoiced customers as active before the invoice has been paid and remove them if the invoice hasn’t been paid. You can include customers only when they have successfully paid or when the invoice has been opened. We’re excited to announce this new version of our Chargebee integration. Get in touch with us and let us know what you think. We’d love to hear any feedback you may have.

<sys> [INST] The New Chargebee Integration: Open Invoices, Support for Add-ons, and More Accurate Cash Flow Reporting [/INST] The new version of our Chargebee integration provides you with more accurate cash flow reporting, more detailed reporting for add-ons, improved handling of prorated charges, and support for open invoices. We have hundreds of customers using Chargebee. It’s one of the fastest growing billing platforms worldwide so we know this number will continue to increase. We’ve been working hard to bring you the latest version of our Chargebee integration and are excited to announce that it’s finally live. The new Chargebee integration is live for all new accounts. Existing accounts using Chargebee can contact us to be migrated over, otherwise they can continue using their current integration. More accurate cash flow reporting The new Chargebee integration utilizes new fields in our Data Platform – because of this, we now are able to support partial refunds, balances, different proration types and credits. These partial payments will be more accurately reflected in your cash flow charts – so you’ll always know exactly how much cash you have on hand. Watch the pennies and the dollars watch themselves. With the new fields now displayed in our Data Platform, this makes it easier to understand how your metrics are calculated, giving you a better understanding of the forces that impact your business. New fields in Data Platform This behind-the-scenes view allows our users to audit the data as it’s being piped into ChartMogul. This ensures that the numbers you see in ChartMogul can be traced back to transactions in Chargebee, and therefore, can be trusted. Improved handling of prorated charges The new Chargebee integration can better handle prorated charges, and the resulting MRR calculations. If a customer adds a new plan, seats, or somehow expands their account partway through the month, these changes are accurately reflected in your MRR in ChartMogul. For example, if a customer purchases an add-on to their subscription they’ll immediately receive an invoice for the prorated charges, and a subsequent invoice with the new total will be generated at the time the subscription is set to renew. More accurate reporting of add-ons Expansion can have a huge impact on your MRR growth. When you create subscriptions with base plans and add-ons in Chargebee, this will be treated as new business and expansion movements in ChartMogul. Previously, this would have been counted as a single new business movement. You’ll be able to better separate these components and more accurately measure expansion revenue that comes from these add-ons. The converse is also true; when a customer cancels an add-on but retains their base plan this will be counted as a contraction. With the new Chargebee integration, you can better measure expansion MRR, which will help your Customer Success team be more impactful. Support for add-ons Support for open invoices Unpaid subscriptions in Chargebee can now generate MRR in ChartMogul. We know how important it is for our customers to have closed/won deals accurately reflected in their MRR, even if those invoices have yet to be paid. Our new data setting will give you control over how and when subscriptions and MRR data are created. You can classify invoiced customers as active before the invoice has been paid and remove them if the invoice hasn’t been paid. You can include customers only when they have successfully paid or when the invoice has been opened. We’re excited to announce this new version of our Chargebee integration. Get in touch with us and let us know what you think. We’d love to hear any feedback you may have. </sys

Dig into your metrics with Data tables. We have been getting some feedback that while all the charts look great, it would be useful (and reassuring) to see exactly what data is going into them. With Data tables you can quickly understand why a change happened (and not just that it happened), e.g. you can quickly get answers to questions like “Why did my MRR go down in December?” We recorded a short screencast to show you how it works. We hope you enjoy the new feature!

[INST] Dig into your metrics with Data tables [/INST]

We have been getting some feedback that while all the charts look great, it would be useful (and reassuring) to see exactly what data is going into them. With Data tables you can quickly understand why a change happened (and not just that it happened), e.g. you can quickly get answers to questions like “Why did my MRR go down in December?” We recorded a short screencast to show you how it works. We hope you enjoy the new feature!

<sys> [INST] Dig into your metrics with Data tables [/INST] We have been getting some feedback that while all the charts look great, it would be useful (and reassuring) to see exactly what data is going into them. With Data tables you can quickly understand why a change happened (and not just that it happened), e.g. you can quickly get answers to questions like “Why did my MRR go down in December?” We recorded a short screencast to show you how it works. We hope you enjoy the new feature! </sys

Freemium as a catalyst for growth with Tope Awotona, Founder of Calendly. Focus is everything in small startups. The ability to juggle the demands of customers, investors and other stakeholders while executing on a strong vision for the product and company’s future growth is perhaps one of the toughest parts of being a solo founder. “I just try to involve myself in things that I am uniquely qualified to do… and just let the smart people at Calendly figure out the rest.” Tope Awotona, Founder and CEO of Calendly is big on Focus, and it’s clear that this has played a big part in launching his product to the world. Tope moved from a background of Enterprise Sales in businesses like IBM, Perceptive Software and EMC to solve a problem that was close to his heart in those roles: Scheduling. I spoke to Tope about why the freemium SaaS model has been key to the product’s success so far, how the most important acquisition channel for Calendly is the product itself, and how he manages feedback from customers, amongst other things. Listen to the full interview below, or find us on iTunes, SoundCloud or your usual podcast player. Enjoy!

[INST] Freemium as a catalyst for growth with Tope Awotona, Founder of Calendly [/INST]

Focus is everything in small startups. The ability to juggle the demands of customers, investors and other stakeholders while executing on a strong vision for the product and company’s future growth is perhaps one of the toughest parts of being a solo founder. “I just try to involve myself in things that I am uniquely qualified to do… and just let the smart people at Calendly figure out the rest.” Tope Awotona, Founder and CEO of Calendly is big on Focus, and it’s clear that this has played a big part in launching his product to the world. Tope moved from a background of Enterprise Sales in businesses like IBM, Perceptive Software and EMC to solve a problem that was close to his heart in those roles: Scheduling. I spoke to Tope about why the freemium SaaS model has been key to the product’s success so far, how the most important acquisition channel for Calendly is the product itself, and how he manages feedback from customers, amongst other things. Listen to the full interview below, or find us on iTunes, SoundCloud or your usual podcast player. Enjoy!

<sys> [INST] Freemium as a catalyst for growth with Tope Awotona, Founder of Calendly [/INST] Focus is everything in small startups. The ability to juggle the demands of customers, investors and other stakeholders while executing on a strong vision for the product and company’s future growth is perhaps one of the toughest parts of being a solo founder. “I just try to involve myself in things that I am uniquely qualified to do… and just let the smart people at Calendly figure out the rest.” Tope Awotona, Founder and CEO of Calendly is big on Focus, and it’s clear that this has played a big part in launching his product to the world. Tope moved from a background of Enterprise Sales in businesses like IBM, Perceptive Software and EMC to solve a problem that was close to his heart in those roles: Scheduling. I spoke to Tope about why the freemium SaaS model has been key to the product’s success so far, how the most important acquisition channel for Calendly is the product itself, and how he manages feedback from customers, amongst other things. Listen to the full interview below, or find us on iTunes, SoundCloud or your usual podcast player. Enjoy! </sys

If there ever was a SaaS syllabus, this would be it.. At ChartMogul we eat, sleep, and breathe SaaS. Most of the time… it’s specifically metrics. But the rest of the time, we’re thinking about how to share everything we learn with YOU — how to educate and spread valuable information about SaaS business, to our customers and beyond. It can be a crowded, noisy space on the web, so knowing where to go for quality insights is vital. Whether you like to dive into the blog of an industry thought leader, receive a curated list of top content in an email newsletter, or engage with a variety of perspectives and peers in a community forum — there’s something in this list for you. Figures Tomasz Tunguz VC, Redpoint @ttunguz | http://tomtunguz.com Tomasz Tunguz is a partner at Redpoint Ventures. With a background in engineering and entrepreneurship, he has plenty of thoughts to share on the subjects of startups, software, and SaaS. And he publishes them regularly on his blog, most often with excellent data-driven analysis. We never miss a post. Start with… 5 Mistakes SaaS Startups Often Make with Pricing Christoph Janz VC, Point Nine Capital @chrija | http://christophjanz.blogspot.de Now a managing partner at Point Nine, Christoph Janz spent his earlier years as an internet entrepreneur and an angel investor. Janz’ blog is stacked with data-driven and evidence-based pieces, some of the most thorough and detailed out there. Plus if he sees a certain post is popular, he’ll follow up on the topic shortly after with another blog post, answering readers’ questions and providing further explanation. All of this makes for a very educational follow! Start with… A KPI dashboard for early-stage SaaS startups Jason M. Lemkin Founder, SaaStr @jasonlk | https://www.saastr.com Jason M. Lemkin is a jack-of-all-trades in the Enterprise SaaS world, and you will definitely come across him in the SaaS discussion online. Whether keeping up with his posts on the SaaStr blog, following him on Twitter, reading his answers on Quora — or reading his new book — there is a lot to learn from Lemkin and no shortage of places to learn it. Start with… How to Know You’ve Hit Initial Traction in SaaS David Skok VC, Matrix Partners @bostonvc | http://www.forentrepreneurs.com A five-time entrepreneur turned VC, David Skok is putting all of his comprehensive experience and advice into his blog, which is targeted specifically to founders and early startup teams. In fact, he kicked off the conversation around SaaS metrics years ago. Forbes and Inc. both laud his site as a top resource for entrepreneurs, and ChartMogul does, too. Start with… SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters Lincoln Murphy Founder, Sixteen Ventures @lincolnmurphy | http://sixteenventures.com Lincoln Murphy is a self-described “secret weapon” for SaaS entrepreneurs, with advice on nearly every topic related to getting a subscription company off the ground: business model, customer acquisition, growth hacking, churn reduction, and especially customer success. Murphy has been working in the space for nearly ten years, and publishing regularly on his blog since 2009, so there’s a rich archive and a lot to learn. Start with… Customer Success: The Definitive Guide Steli Efti Founder, Close.io @steli | http://blog.close.io/author/steli-efti Steli Efti is THE sales guy of the SaaS world. From sales tactics to sales metrics, he lays it all out there in a candid style on his blog, which also includes YouTube videos of him presenting his ideas if you feel like giving your eyes a break. Start with… The no-BS guide to understanding churn Bonus! The Point Nine Capital team @PointNineCap | https://medium.com/point-nine-news Point Nine is an early-stage venture capitalist firm that focuses on SaaS and online marketplaces — and that also invests in ChartMogul! Members of their team collaborate to supply both unique observations of the industry (“Open Source is losing, SaaS is leading, APIs will win…”) as well as stories about life inside a VC (“What Point Nine Invests In”). Start here… 7 Trends that Will Shape the SaaS Industry in 2016 Newsletters SaaStr @saastr | https://www.saastr.com SaaStr began as a community for SaaS founders and executives in 2012, and has since established itself as essential reading for SaaS and B2B entrepreneurs. Focusing on long-form content, the site features Jason M. Lemkin’s excellent commentary and advice on everything to do with the industry. You can also come across the blog’s content in other channels, be it Quora, other media publications, or SaaStr’s own podcast. SaaS Club @SaaSclub | http://saasclub.efounders.co SaaS Club is a simple, barebones newsletter that pops up in your inbox every week, alerting you to five “under the radar” SaaS products and five top-quality SaaS articles. SaaScribe @saascribe | http://saascribe.com SaaScribe is a community-driven newsletter where the content comes not from SaaS companies or VCs, but from everyday people who work in and are passionate about SaaS business — from sales and marketing to customer success and strategy. This makes for a multi-faceted collection of articles on the SaaS and startup scenes, with global perspectives and diverse styles. Hiten’s SaaS Weekly | http://hiten.com Run by Hiten Shah, co-founder of analytics company KISSmetrics, this is “a weekly email of useful links for people interested in SaaS businesses.” — we couldn’t say it any better than Hiten’s homepage. Each newsletter compiles articles from around the web to fall into these categories: business, product, marketing, sales, growth, and a quick tip of the week. ChartMogul’s SaaS Roundup @ChartMogul| https://chartmogul.com Every Friday we send out a simple newsletter of our top-rated pieces of content for the week, gathered from all over. Sign up on our site and let us know what you think! Communities GrowthHackers https://growthhackers.com The internet’s largest community based around Growth, growing any part of your business or audience. Users can share content they like, ask questions they’re curious about (and answer others), engage in discussions, and participate in AMAs (Ask Me Anythings) with business leaders from all verticals. If you specifically follow SaaS-related topics, it’s a great tool for discovering new ideas, opinions, and information on the subject. Inbound https://inbound.org Inbound is a marketing-centric community. It has a pretty simple content feed, where users pose questions that garner answers or post content that sparks conversation. Common topics range from brand management to engagement tactics to SEO, but there is a lot of valuable discussion around SaaS and startup business, as well. Hacker News https://news.ycombinator.com Hacker News, around since 2007, is a forum where anyone can submit content or start a discussion. While the general rule for content is “anything that gratifies one’s intellectual curiosity,” the site is run by Paul Graham’s investment fund and startup incubator, Y Combinator — so there’s a lot of content to do with entrepreneurship, technology, startups, and SaaS. Though the format and the topics may be slightly less accessible, slightly more difficult to follow, than GrowthHackers or Inbound, Hacker News is worth having on your radar and diving into if you’re interested! Quora https://www.quora.com Quora is the king Q&A website, with a global community and a wealth of information on the broadest and most minute of topics — it boggles the mind. So we suggest tailoring your Quora experience by following specific topics, such as “Software-as-a-Service.” VCs and other SaaS thought leaders regularly moonlight on Quora, as well as fellow entrepreneurs, each offering their own experience or evidence to the discussion. Have a favorite resource of your own that we missed? Tell us about it in the comments! Share and follow NEW: If there ever was a #SaaS syllabus, this would be it. https://t.co/BpcK7T5WTi @ttunguz @jasonlk @lincolnmurphy pic.twitter.com/XJKJ4TTlEH — ChartMogul (@ChartMogul) March 15, 2016

[INST] If there ever was a SaaS syllabus, this would be it [/INST]

. At ChartMogul we eat, sleep, and breathe SaaS. Most of the time… it’s specifically metrics. But the rest of the time, we’re thinking about how to share everything we learn with YOU — how to educate and spread valuable information about SaaS business, to our customers and beyond. It can be a crowded, noisy space on the web, so knowing where to go for quality insights is vital. Whether you like to dive into the blog of an industry thought leader, receive a curated list of top content in an email newsletter, or engage with a variety of perspectives and peers in a community forum — there’s something in this list for you. Figures Tomasz Tunguz VC, Redpoint @ttunguz | http://tomtunguz.com Tomasz Tunguz is a partner at Redpoint Ventures. With a background in engineering and entrepreneurship, he has plenty of thoughts to share on the subjects of startups, software, and SaaS. And he publishes them regularly on his blog, most often with excellent data-driven analysis. We never miss a post. Start with… 5 Mistakes SaaS Startups Often Make with Pricing Christoph Janz VC, Point Nine Capital @chrija | http://christophjanz.blogspot.de Now a managing partner at Point Nine, Christoph Janz spent his earlier years as an internet entrepreneur and an angel investor. Janz’ blog is stacked with data-driven and evidence-based pieces, some of the most thorough and detailed out there. Plus if he sees a certain post is popular, he’ll follow up on the topic shortly after with another blog post, answering readers’ questions and providing further explanation. All of this makes for a very educational follow! Start with… A KPI dashboard for early-stage SaaS startups Jason M. Lemkin Founder, SaaStr @jasonlk | https://www.saastr.com Jason M. Lemkin is a jack-of-all-trades in the Enterprise SaaS world, and you will definitely come across him in the SaaS discussion online. Whether keeping up with his posts on the SaaStr blog, following him on Twitter, reading his answers on Quora — or reading his new book — there is a lot to learn from Lemkin and no shortage of places to learn it. Start with… How to Know You’ve Hit Initial Traction in SaaS David Skok VC, Matrix Partners @bostonvc | http://www.forentrepreneurs.com A five-time entrepreneur turned VC, David Skok is putting all of his comprehensive experience and advice into his blog, which is targeted specifically to founders and early startup teams. In fact, he kicked off the conversation around SaaS metrics years ago. Forbes and Inc. both laud his site as a top resource for entrepreneurs, and ChartMogul does, too. Start with… SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters Lincoln Murphy Founder, Sixteen Ventures @lincolnmurphy | http://sixteenventures.com Lincoln Murphy is a self-described “secret weapon” for SaaS entrepreneurs, with advice on nearly every topic related to getting a subscription company off the ground: business model, customer acquisition, growth hacking, churn reduction, and especially customer success. Murphy has been working in the space for nearly ten years, and publishing regularly on his blog since 2009, so there’s a rich archive and a lot to learn. Start with… Customer Success: The Definitive Guide Steli Efti Founder, Close.io @steli | http://blog.close.io/author/steli-efti Steli Efti is THE sales guy of the SaaS world. From sales tactics to sales metrics, he lays it all out there in a candid style on his blog, which also includes YouTube videos of him presenting his ideas if you feel like giving your eyes a break. Start with… The no-BS guide to understanding churn Bonus! The Point Nine Capital team @PointNineCap | https://medium.com/point-nine-news Point Nine is an early-stage venture capitalist firm that focuses on SaaS and online marketplaces — and that also invests in ChartMogul! Members of their team collaborate to supply both unique observations of the industry (“Open Source is losing, SaaS is leading, APIs will win…”) as well as stories about life inside a VC (“What Point Nine Invests In”). Start here… 7 Trends that Will Shape the SaaS Industry in 2016 Newsletters SaaStr @saastr | https://www.saastr.com SaaStr began as a community for SaaS founders and executives in 2012, and has since established itself as essential reading for SaaS and B2B entrepreneurs. Focusing on long-form content, the site features Jason M. Lemkin’s excellent commentary and advice on everything to do with the industry. You can also come across the blog’s content in other channels, be it Quora, other media publications, or SaaStr’s own podcast. SaaS Club @SaaSclub | http://saasclub.efounders.co SaaS Club is a simple, barebones newsletter that pops up in your inbox every week, alerting you to five “under the radar” SaaS products and five top-quality SaaS articles. SaaScribe @saascribe | http://saascribe.com SaaScribe is a community-driven newsletter where the content comes not from SaaS companies or VCs, but from everyday people who work in and are passionate about SaaS business — from sales and marketing to customer success and strategy. This makes for a multi-faceted collection of articles on the SaaS and startup scenes, with global perspectives and diverse styles. Hiten’s SaaS Weekly | http://hiten.com Run by Hiten Shah, co-founder of analytics company KISSmetrics, this is “a weekly email of useful links for people interested in SaaS businesses.” — we couldn’t say it any better than Hiten’s homepage. Each newsletter compiles articles from around the web to fall into these categories: business, product, marketing, sales, growth, and a quick tip of the week. ChartMogul’s SaaS Roundup @ChartMogul| https://chartmogul.com Every Friday we send out a simple newsletter of our top-rated pieces of content for the week, gathered from all over. Sign up on our site and let us know what you think! Communities GrowthHackers https://growthhackers.com The internet’s largest community based around Growth, growing any part of your business or audience. Users can share content they like, ask questions they’re curious about (and answer others), engage in discussions, and participate in AMAs (Ask Me Anythings) with business leaders from all verticals. If you specifically follow SaaS-related topics, it’s a great tool for discovering new ideas, opinions, and information on the subject. Inbound https://inbound.org Inbound is a marketing-centric community. It has a pretty simple content feed, where users pose questions that garner answers or post content that sparks conversation. Common topics range from brand management to engagement tactics to SEO, but there is a lot of valuable discussion around SaaS and startup business, as well. Hacker News https://news.ycombinator.com Hacker News, around since 2007, is a forum where anyone can submit content or start a discussion. While the general rule for content is “anything that gratifies one’s intellectual curiosity,” the site is run by Paul Graham’s investment fund and startup incubator, Y Combinator — so there’s a lot of content to do with entrepreneurship, technology, startups, and SaaS. Though the format and the topics may be slightly less accessible, slightly more difficult to follow, than GrowthHackers or Inbound, Hacker News is worth having on your radar and diving into if you’re interested! Quora https://www.quora.com Quora is the king Q&A website, with a global community and a wealth of information on the broadest and most minute of topics — it boggles the mind. So we suggest tailoring your Quora experience by following specific topics, such as “Software-as-a-Service.” VCs and other SaaS thought leaders regularly moonlight on Quora, as well as fellow entrepreneurs, each offering their own experience or evidence to the discussion. Have a favorite resource of your own that we missed? Tell us about it in the comments! Share and follow NEW: If there ever was a #SaaS syllabus, this would be it. https://t.co/BpcK7T5WTi @ttunguz @jasonlk @lincolnmurphy pic.twitter.com/XJKJ4TTlEH — ChartMogul (@ChartMogul) March 15, 2016

<sys> [INST] If there ever was a SaaS syllabus, this would be it [/INST]. At ChartMogul we eat, sleep, and breathe SaaS. Most of the time… it’s specifically metrics. But the rest of the time, we’re thinking about how to share everything we learn with YOU — how to educate and spread valuable information about SaaS business, to our customers and beyond. It can be a crowded, noisy space on the web, so knowing where to go for quality insights is vital. Whether you like to dive into the blog of an industry thought leader, receive a curated list of top content in an email newsletter, or engage with a variety of perspectives and peers in a community forum — there’s something in this list for you. Figures Tomasz Tunguz VC, Redpoint @ttunguz | http://tomtunguz.com Tomasz Tunguz is a partner at Redpoint Ventures. With a background in engineering and entrepreneurship, he has plenty of thoughts to share on the subjects of startups, software, and SaaS. And he publishes them regularly on his blog, most often with excellent data-driven analysis. We never miss a post. Start with… 5 Mistakes SaaS Startups Often Make with Pricing Christoph Janz VC, Point Nine Capital @chrija | http://christophjanz.blogspot.de Now a managing partner at Point Nine, Christoph Janz spent his earlier years as an internet entrepreneur and an angel investor. Janz’ blog is stacked with data-driven and evidence-based pieces, some of the most thorough and detailed out there. Plus if he sees a certain post is popular, he’ll follow up on the topic shortly after with another blog post, answering readers’ questions and providing further explanation. All of this makes for a very educational follow! Start with… A KPI dashboard for early-stage SaaS startups Jason M. Lemkin Founder, SaaStr @jasonlk | https://www.saastr.com Jason M. Lemkin is a jack-of-all-trades in the Enterprise SaaS world, and you will definitely come across him in the SaaS discussion online. Whether keeping up with his posts on the SaaStr blog, following him on Twitter, reading his answers on Quora — or reading his new book — there is a lot to learn from Lemkin and no shortage of places to learn it. Start with… How to Know You’ve Hit Initial Traction in SaaS David Skok VC, Matrix Partners @bostonvc | http://www.forentrepreneurs.com A five-time entrepreneur turned VC, David Skok is putting all of his comprehensive experience and advice into his blog, which is targeted specifically to founders and early startup teams. In fact, he kicked off the conversation around SaaS metrics years ago. Forbes and Inc. both laud his site as a top resource for entrepreneurs, and ChartMogul does, too. Start with… SaaS Metrics 2.0: A Guide to Measuring and Improving What Matters Lincoln Murphy Founder, Sixteen Ventures @lincolnmurphy | http://sixteenventures.com Lincoln Murphy is a self-described “secret weapon” for SaaS entrepreneurs, with advice on nearly every topic related to getting a subscription company off the ground: business model, customer acquisition, growth hacking, churn reduction, and especially customer success. Murphy has been working in the space for nearly ten years, and publishing regularly on his blog since 2009, so there’s a rich archive and a lot to learn. Start with… Customer Success: The Definitive Guide Steli Efti Founder, Close.io @steli | http://blog.close.io/author/steli-efti Steli Efti is THE sales guy of the SaaS world. From sales tactics to sales metrics, he lays it all out there in a candid style on his blog, which also includes YouTube videos of him presenting his ideas if you feel like giving your eyes a break. Start with… The no-BS guide to understanding churn Bonus! The Point Nine Capital team @PointNineCap | https://medium.com/point-nine-news Point Nine is an early-stage venture capitalist firm that focuses on SaaS and online marketplaces — and that also invests in ChartMogul! Members of their team collaborate to supply both unique observations of the industry (“Open Source is losing, SaaS is leading, APIs will win…”) as well as stories about life inside a VC (“What Point Nine Invests In”). Start here… 7 Trends that Will Shape the SaaS Industry in 2016 Newsletters SaaStr @saastr | https://www.saastr.com SaaStr began as a community for SaaS founders and executives in 2012, and has since established itself as essential reading for SaaS and B2B entrepreneurs. Focusing on long-form content, the site features Jason M. Lemkin’s excellent commentary and advice on everything to do with the industry. You can also come across the blog’s content in other channels, be it Quora, other media publications, or SaaStr’s own podcast. SaaS Club @SaaSclub | http://saasclub.efounders.co SaaS Club is a simple, barebones newsletter that pops up in your inbox every week, alerting you to five “under the radar” SaaS products and five top-quality SaaS articles. SaaScribe @saascribe | http://saascribe.com SaaScribe is a community-driven newsletter where the content comes not from SaaS companies or VCs, but from everyday people who work in and are passionate about SaaS business — from sales and marketing to customer success and strategy. This makes for a multi-faceted collection of articles on the SaaS and startup scenes, with global perspectives and diverse styles. Hiten’s SaaS Weekly | http://hiten.com Run by Hiten Shah, co-founder of analytics company KISSmetrics, this is “a weekly email of useful links for people interested in SaaS businesses.” — we couldn’t say it any better than Hiten’s homepage. Each newsletter compiles articles from around the web to fall into these categories: business, product, marketing, sales, growth, and a quick tip of the week. ChartMogul’s SaaS Roundup @ChartMogul| https://chartmogul.com Every Friday we send out a simple newsletter of our top-rated pieces of content for the week, gathered from all over. Sign up on our site and let us know what you think! Communities GrowthHackers https://growthhackers.com The internet’s largest community based around Growth, growing any part of your business or audience. Users can share content they like, ask questions they’re curious about (and answer others), engage in discussions, and participate in AMAs (Ask Me Anythings) with business leaders from all verticals. If you specifically follow SaaS-related topics, it’s a great tool for discovering new ideas, opinions, and information on the subject. Inbound https://inbound.org Inbound is a marketing-centric community. It has a pretty simple content feed, where users pose questions that garner answers or post content that sparks conversation. Common topics range from brand management to engagement tactics to SEO, but there is a lot of valuable discussion around SaaS and startup business, as well. Hacker News https://news.ycombinator.com Hacker News, around since 2007, is a forum where anyone can submit content or start a discussion. While the general rule for content is “anything that gratifies one’s intellectual curiosity,” the site is run by Paul Graham’s investment fund and startup incubator, Y Combinator — so there’s a lot of content to do with entrepreneurship, technology, startups, and SaaS. Though the format and the topics may be slightly less accessible, slightly more difficult to follow, than GrowthHackers or Inbound, Hacker News is worth having on your radar and diving into if you’re interested! Quora https://www.quora.com Quora is the king Q&A website, with a global community and a wealth of information on the broadest and most minute of topics — it boggles the mind. So we suggest tailoring your Quora experience by following specific topics, such as “Software-as-a-Service.” VCs and other SaaS thought leaders regularly moonlight on Quora, as well as fellow entrepreneurs, each offering their own experience or evidence to the discussion. Have a favorite resource of your own that we missed? Tell us about it in the comments! Share and follow NEW: If there ever was a #SaaS syllabus, this would be it. https://t.co/BpcK7T5WTi @ttunguz @jasonlk @lincolnmurphy pic.twitter.com/XJKJ4TTlEH — ChartMogul (@ChartMogul) March 15, 2016 </sys

Come meet us in San Francisco. This will be my third year in a row attending SaaStr Annual. Things have changed a lot since the first event back in 2015, as with everything on SaaStr, scaling fast is the name of the game and Jason and his team haven’t failed to disappoint with their annual conference which is growing each year in leaps and bounds. The conference is now so large that there are many side events in the evenings around the main event. This year we decided to get together with our investors Point Nine Capital, and fellow portfolio company Algolia and host our own side event on the evening of the 7th of February, in San Francisco. If you’d like to come meet some of the ChartMogul team (there will be five of us there) and spend the evening drinking, eating and playing SaaS-themed bingo with fellow SaaS fans we’d love if you could join us. Just click the button below to register for this free event. Register now The event is being co-hosted by Algolia, ChartMogul and Point Nine Capital.

[INST] Come meet us in San Francisco [/INST]

This will be my third year in a row attending SaaStr Annual. Things have changed a lot since the first event back in 2015, as with everything on SaaStr, scaling fast is the name of the game and Jason and his team haven’t failed to disappoint with their annual conference which is growing each year in leaps and bounds. The conference is now so large that there are many side events in the evenings around the main event. This year we decided to get together with our investors Point Nine Capital, and fellow portfolio company Algolia and host our own side event on the evening of the 7th of February, in San Francisco. If you’d like to come meet some of the ChartMogul team (there will be five of us there) and spend the evening drinking, eating and playing SaaS-themed bingo with fellow SaaS fans we’d love if you could join us. Just click the button below to register for this free event. Register now The event is being co-hosted by Algolia, ChartMogul and Point Nine Capital.

<sys> [INST] Come meet us in San Francisco [/INST] This will be my third year in a row attending SaaStr Annual. Things have changed a lot since the first event back in 2015, as with everything on SaaStr, scaling fast is the name of the game and Jason and his team haven’t failed to disappoint with their annual conference which is growing each year in leaps and bounds. The conference is now so large that there are many side events in the evenings around the main event. This year we decided to get together with our investors Point Nine Capital, and fellow portfolio company Algolia and host our own side event on the evening of the 7th of February, in San Francisco. If you’d like to come meet some of the ChartMogul team (there will be five of us there) and spend the evening drinking, eating and playing SaaS-themed bingo with fellow SaaS fans we’d love if you could join us. Just click the button below to register for this free event. Register now The event is being co-hosted by Algolia, ChartMogul and Point Nine Capital. </sys

Be Your Own Swiss Army Knife: How I Work at Typeform. This is a guest post by Evan Schoepke (@gaiapunk) – BizDev at Typeform First of all, a little about my position. I’m a business developer which means I establish partnerships, relationships and integrations that will build long-term value for our company. But, like at many other startups I wear multiple hats so this means I also straddle the marketing and growth team which has a focus on projects that will increase immediate user growth. In order to work well I use a set of tools that I’ve customized to my diverse needs. The screen shot above is a close approximation from my own work dashboard which includes Trello, Todoist, Tweetdeck and ChartMogul. As you can tell, I’ve customized how the CSS displays in some of the Chrome windows using UserStyles to put them in “dark mode” which is much easier on the eyes when working on larger monitors. I use Todoist for individual tasks, Trello for overall project management tracking, Tweetdeck for real-time awareness and ChartMogul to see our critical company health metrics. ChartMogul is especially valuable to Typeform as a whole for assessing if actions that we are taking as a company are having an impact. We want a crystal clear vision regarding expanding or contracting user growth or churn. It is typically where I like to end my day because I like to have an overall picture of our key indicator metrics in my mind at all times. David Apple our head of customer success also frequents the ChartMogul dash daily for his own unique needs. “ChartMogul is a very flexible tool which gives me great insights on our revenue and churn. I love that I can easily breakdown the metrics by plan and that I can see a clear breakdown of activity including number of new customers, number of customers who upgraded or downgraded their PRO plan, number of users who reactivated, and number of users who churned. We also used to spend about a day every quarter to build a cohort analysis with Excel… but in one click I can view cohorts at any time with ChartMogul. Now it’s practically effortless to report on the KPI’s I need.” One key workflow insight that is super powerful, yet simple, is that it’s best to chain similar activities together. In order to do this, I’ve created mental “after I” statements for myself that help me flow seamlessly between tasks. So in the morning after I reply to emails I set reminders with Todoist’s regarding follow-ups. By the way, if you’re not already using MixMax with gmail and OneTab with Chrome then I strongly recommend grabbing those two plugins after this read as they will absolutely save your time and sanity. Simple and uncluttered interfaces that I can easily navigate and grab the info I need quickly have always attracted me. But, in the end it how it all about how you use the tools and not just the tools themselves that bring real value to your workflow. If you find a problem that someone hasn’t solved, a poorly functioning product, a terrible user experience, well then don’t be afraid to be your own swiss army knife or as they say, “scratch your own itch”, because lots of amazing companies have been started that way.

[INST] Be Your Own Swiss Army Knife: How I Work at Typeform [/INST]

This is a guest post by Evan Schoepke (@gaiapunk) – BizDev at Typeform First of all, a little about my position. I’m a business developer which means I establish partnerships, relationships and integrations that will build long-term value for our company. But, like at many other startups I wear multiple hats so this means I also straddle the marketing and growth team which has a focus on projects that will increase immediate user growth. In order to work well I use a set of tools that I’ve customized to my diverse needs. The screen shot above is a close approximation from my own work dashboard which includes Trello, Todoist, Tweetdeck and ChartMogul. As you can tell, I’ve customized how the CSS displays in some of the Chrome windows using UserStyles to put them in “dark mode” which is much easier on the eyes when working on larger monitors. I use Todoist for individual tasks, Trello for overall project management tracking, Tweetdeck for real-time awareness and ChartMogul to see our critical company health metrics. ChartMogul is especially valuable to Typeform as a whole for assessing if actions that we are taking as a company are having an impact. We want a crystal clear vision regarding expanding or contracting user growth or churn. It is typically where I like to end my day because I like to have an overall picture of our key indicator metrics in my mind at all times. David Apple our head of customer success also frequents the ChartMogul dash daily for his own unique needs. “ChartMogul is a very flexible tool which gives me great insights on our revenue and churn. I love that I can easily breakdown the metrics by plan and that I can see a clear breakdown of activity including number of new customers, number of customers who upgraded or downgraded their PRO plan, number of users who reactivated, and number of users who churned. We also used to spend about a day every quarter to build a cohort analysis with Excel… but in one click I can view cohorts at any time with ChartMogul. Now it’s practically effortless to report on the KPI’s I need.” One key workflow insight that is super powerful, yet simple, is that it’s best to chain similar activities together. In order to do this, I’ve created mental “after I” statements for myself that help me flow seamlessly between tasks. So in the morning after I reply to emails I set reminders with Todoist’s regarding follow-ups. By the way, if you’re not already using MixMax with gmail and OneTab with Chrome then I strongly recommend grabbing those two plugins after this read as they will absolutely save your time and sanity. Simple and uncluttered interfaces that I can easily navigate and grab the info I need quickly have always attracted me. But, in the end it how it all about how you use the tools and not just the tools themselves that bring real value to your workflow. If you find a problem that someone hasn’t solved, a poorly functioning product, a terrible user experience, well then don’t be afraid to be your own swiss army knife or as they say, “scratch your own itch”, because lots of amazing companies have been started that way.

<sys> [INST] Be Your Own Swiss Army Knife: How I Work at Typeform [/INST] This is a guest post by Evan Schoepke (@gaiapunk) – BizDev at Typeform First of all, a little about my position. I’m a business developer which means I establish partnerships, relationships and integrations that will build long-term value for our company. But, like at many other startups I wear multiple hats so this means I also straddle the marketing and growth team which has a focus on projects that will increase immediate user growth. In order to work well I use a set of tools that I’ve customized to my diverse needs. The screen shot above is a close approximation from my own work dashboard which includes Trello, Todoist, Tweetdeck and ChartMogul. As you can tell, I’ve customized how the CSS displays in some of the Chrome windows using UserStyles to put them in “dark mode” which is much easier on the eyes when working on larger monitors. I use Todoist for individual tasks, Trello for overall project management tracking, Tweetdeck for real-time awareness and ChartMogul to see our critical company health metrics. ChartMogul is especially valuable to Typeform as a whole for assessing if actions that we are taking as a company are having an impact. We want a crystal clear vision regarding expanding or contracting user growth or churn. It is typically where I like to end my day because I like to have an overall picture of our key indicator metrics in my mind at all times. David Apple our head of customer success also frequents the ChartMogul dash daily for his own unique needs. “ChartMogul is a very flexible tool which gives me great insights on our revenue and churn. I love that I can easily breakdown the metrics by plan and that I can see a clear breakdown of activity including number of new customers, number of customers who upgraded or downgraded their PRO plan, number of users who reactivated, and number of users who churned. We also used to spend about a day every quarter to build a cohort analysis with Excel… but in one click I can view cohorts at any time with ChartMogul. Now it’s practically effortless to report on the KPI’s I need.” One key workflow insight that is super powerful, yet simple, is that it’s best to chain similar activities together. In order to do this, I’ve created mental “after I” statements for myself that help me flow seamlessly between tasks. So in the morning after I reply to emails I set reminders with Todoist’s regarding follow-ups. By the way, if you’re not already using MixMax with gmail and OneTab with Chrome then I strongly recommend grabbing those two plugins after this read as they will absolutely save your time and sanity. Simple and uncluttered interfaces that I can easily navigate and grab the info I need quickly have always attracted me. But, in the end it how it all about how you use the tools and not just the tools themselves that bring real value to your workflow. If you find a problem that someone hasn’t solved, a poorly functioning product, a terrible user experience, well then don’t be afraid to be your own swiss army knife or as they say, “scratch your own itch”, because lots of amazing companies have been started that way. </sys

Being “Product-Led” in 2023 Means Product-Led Sales. Product-led growth is often presented as a silver bullet to hypergrowth. But in reality, many PLG success stories leverage traditional inside sales motions alongside self-service to speed up customer acquisition. This is called product-led sales. With a panel of experts, we discussed what product-led sales looks like in practice and when B2B SaaS leaders should start baking it into their go-to-market. Esben Friis-Jensen, Co-Founder at Userflow, Nicholas Mills, President at Pitch, and Seth DeHart, Advisor at PointNine, joined our panel discussion hosted by Sara Archer, VP of Sales at ChartMogul. Keep these 4 insights in mind as you transition into a product-led sales motion. 4 product-led sales tips: Use your product as a growth engine and augment it with sales Transitioning to product-led sales is not for everyone Find the right mix of self-service and sales acceleration Re-examine your sales team structure, compensation, and commissions SaaS shifted to product-led growth, and it’s impacting sales teams In the past, most companies followed a traditional sales strategy. Traditionally in sales there was an information asymmetry where the buyer needed access to information to make a decision. A salesperson gated it from them as leverage to then engage them in a sales process. That has gone away. – Nicholas Mills, President, Pitch The shift to subscription-based models has changed how a company operates. And it’s impacting sales teams too. Use your product as a growth engine and augment it with sales To delight your prospects, make sure they have all the necessary information to make a purchase decision without the need to ever talk to a sales rep: free trials, freemium model, extensive documentation, and product comparisons. The shift that’s happened is that people have become much more empowered in many companies to actually try things for themselves. – Nick, Pitch Once you remove barriers to adoption, people are empowered to try the product. People are primed to want to experience the product and the value that the product determines for them over the course of that evaluation. – Sara Archer, VP of Sales, ChartMogul For SaaS companies, this shift in consumer behavior means adopting a product-led go-to-market strategy and product-led sales. Complement your product-led motion with sales In a product-led growth strategy, you’re using the product as your growth engine. However, that doesn’t eradicate the need for sales teams. If you are a product-led business, product-led sales is what you can add on top of that, to support that process. It’s basically a way to extract more value from your product-led growth model, by adding sales into it. – Esben Friis-Jensen, Co-Founder, Userflow So, product-led sales is a sales methodology that focuses on leveraging the product itself as the primary driver of customer acquisition and revenue growth. According to our panelists, the product-led sales approach means leading with value. Transitioning to product-led sales is not for everyone Before you get started transitioning from a sales-led company to product-led, consider if product-led sales is truly the right way to run sales at your company. Sales-led growth still is a big thing in driving enormous revenue for many companies. (..) And it’s not right for everybody. – Seth DeHart, Advisor at PointNine If you’re already successful with your sales-led approach, keep at it. Also, remember that it’s not “all or nothing”. Most SaaS businesses should have some kind of a product-led aspect to their business. It’s not binary that you have to go all in on product-led growth or sales-led growth. – Esben, Userflow Slack’s successful product-led sales strategy Some companies experienced massive success with the PLG model, for example, Slack. Slack’s magic in their use of PLG was that they were landing with software engineers in tech companies that were probably 40 to 50% of the overall company headcounts and very influential. In other sectors, that’s not always the case. – Nick, Pitch In PLG companies, the expansion potential depends on how influential and how large that group of advocates is within an organization. How far can you get with that motion? At what point do you need to layer in a sales-led approach? Find the right mix of self-service and sales acceleration In SaaS, the ultimate goal is revenue growth achieved through adoption and retention. But how you get there looks different in each business. To find the right mix of self-service and sales acceleration, define the jobs to be done that help drive the business goals. We’re all in the business of building this together. And I think product-led growth and product-led sales combined does a really nice job of orienting people around the success of the product long term. – Sara, ChartMogul How to use the product-led approach to convert more users? It’s important to bring teams together around shared goals to deliver more value and interact more closely with users. In the end, the combination of self-serve product with people gets the buyer and the customer to where they want to go, what they wanna achieve. – Nick, Pitch Re-examine your sales team structure, compensation, and commissions Product-led growth forces you to rethink organizational structure and skill sets. Let’s not beat around the bush anymore. Now, with product-led growth, let’s look at the SaaS organization and let’s simplify it. Let’s look at these organizations, sales, solution, engineering, and customer success. (…) Let’s make it a single organization and have them work together. – Esben, Userflow It’s never been as important to work together across roles and teams and have the right people on the job. Do we need a large team of sellers who need to do that top down, using sales leads, nurturing, mapping, and the organization that has that traditional hunter skill? Or is it a technical person that’s helping them [customers] set up their trial and troubleshoot and experience the value without any sales? – Seth, PointNine Each team might have a different answer to these questions, but those are certainly questions worth asking. The best salespeople are great at customer success We have a tendency in SaaS, whenever new things come around, we add a role. And, and that’s kind of what we’re doing now. Product-led sales? Let’s add a person. – Esben, Userflow Instead, consider what the key ingredients are that make a salesperson at your company great. A PLS strategy may require you to hire different sales profiles with different skills The best customer success managers were the ones who could do sales and understood the product fully. And the best salespeople were the ones who could do CS and understand the product fully. – Esben Userflow A PLS strategy changes sales incentives Since, in a product-led model, sales reps are only one piece of the puzzle, and sales is a cross-functional activity in SaaS companies, it’s harder to attribute the success of the sale. It’s much more cross-functional than demos, sales pitches, and direct sales. So, did individual influence (of a sales rep) matter? The answer is unclear. For that reason, sales compensation is undergoing major changes. If you have a commission-driven model, you need to have clear lines on what is a sales qualified lead (SQL) versus a product qualified lead (PQL) and when salespeople step in. Our panelists have different perspectives on sales commissions. I think commission models are great, but in this world, I’m not sure they no longer should exist. (..) It’s really the product selling, and it’s you selling, it’s a lot of different things selling. And it makes it hard to allocate commission towards a single person. – Esben Userflow Set the right expectations with your sales team In a business where there are a lot of objectives and changing jobs to be done, set the right expectations for your sales team. We’re on a quarterly plan, and it gives me a little bit of agility to not lock in compensation that drives the wrong incentives and outcomes for the business. – Sara, ChartMogul Set the expectation that you’re gonna be changing the commission structure or you’re gonna be updating it on a quarterly basis. Salespeople tend to hate this change, but as long as it’s part of the culture because we’re learning so fast, I think it just sets the expectation that you’re not locked in. – Seth, PointNine Thank you to our panelists Esben Friis-Jensen, Co-Founder, Userflow Esben Friis-Jensen is the co-founder and Chief Growth Officer at Userflow, a no-code builder for in-app onboarding and surveys, allowing SaaS businesses to be more product-led. Prior to Userflow, Esben co-founded Cobalt, which today is a 200+ employee company. At Cobalt, Esben was part of a product-led growth initiative and this piqued his interest to go all in and be a co-founder of Userflow, a company in the space. Nicholas Mills, President, Pitch Nicholas Mills is the President at Pitch, where he leads the company’s go-to-market efforts.Prior to joining Pitch, Nick led CircleCI’s international expansion, building out operations as EMEA General Manager and a member of the global executive team. Nick has previously led teams at Stripe, Facebook, and Microsoft, and built a number of earlier-stage startups through to successful exits. He also loves helping founders and startups take their first steps on their own journeys as an early-stage investor, non-exec, and board advisor. Seth DeHart, Advisor, PointNine Seth DeHart is a Venture Partner at Point Nine a Berlin-based VC investing in B2B SaaS. In his role at Point Nine, Seth joins startups as a Fractional VP of Sales to help navigate the journey from Founder led sales to a full-time VP Sales hire. Prior to joining Point Nine, Seth was VP Sales of the Dutch startup Framer. Earlier in his career, he was the first sales hire at SF-based Revinate where he led sales first in the US and then Europe.

[INST] Being “Product-Led” in 2023 Means Product-Led Sales [/INST]

Product-led growth is often presented as a silver bullet to hypergrowth. But in reality, many PLG success stories leverage traditional inside sales motions alongside self-service to speed up customer acquisition. This is called product-led sales. With a panel of experts, we discussed what product-led sales looks like in practice and when B2B SaaS leaders should start baking it into their go-to-market. Esben Friis-Jensen, Co-Founder at Userflow, Nicholas Mills, President at Pitch, and Seth DeHart, Advisor at PointNine, joined our panel discussion hosted by Sara Archer, VP of Sales at ChartMogul. Keep these 4 insights in mind as you transition into a product-led sales motion. 4 product-led sales tips: Use your product as a growth engine and augment it with sales Transitioning to product-led sales is not for everyone Find the right mix of self-service and sales acceleration Re-examine your sales team structure, compensation, and commissions SaaS shifted to product-led growth, and it’s impacting sales teams In the past, most companies followed a traditional sales strategy. Traditionally in sales there was an information asymmetry where the buyer needed access to information to make a decision. A salesperson gated it from them as leverage to then engage them in a sales process. That has gone away. – Nicholas Mills, President, Pitch The shift to subscription-based models has changed how a company operates. And it’s impacting sales teams too. Use your product as a growth engine and augment it with sales To delight your prospects, make sure they have all the necessary information to make a purchase decision without the need to ever talk to a sales rep: free trials, freemium model, extensive documentation, and product comparisons. The shift that’s happened is that people have become much more empowered in many companies to actually try things for themselves. – Nick, Pitch Once you remove barriers to adoption, people are empowered to try the product. People are primed to want to experience the product and the value that the product determines for them over the course of that evaluation. – Sara Archer, VP of Sales, ChartMogul For SaaS companies, this shift in consumer behavior means adopting a product-led go-to-market strategy and product-led sales. Complement your product-led motion with sales In a product-led growth strategy, you’re using the product as your growth engine. However, that doesn’t eradicate the need for sales teams. If you are a product-led business, product-led sales is what you can add on top of that, to support that process. It’s basically a way to extract more value from your product-led growth model, by adding sales into it. – Esben Friis-Jensen, Co-Founder, Userflow So, product-led sales is a sales methodology that focuses on leveraging the product itself as the primary driver of customer acquisition and revenue growth. According to our panelists, the product-led sales approach means leading with value. Transitioning to product-led sales is not for everyone Before you get started transitioning from a sales-led company to product-led, consider if product-led sales is truly the right way to run sales at your company. Sales-led growth still is a big thing in driving enormous revenue for many companies. (..) And it’s not right for everybody. – Seth DeHart, Advisor at PointNine If you’re already successful with your sales-led approach, keep at it. Also, remember that it’s not “all or nothing”. Most SaaS businesses should have some kind of a product-led aspect to their business. It’s not binary that you have to go all in on product-led growth or sales-led growth. – Esben, Userflow Slack’s successful product-led sales strategy Some companies experienced massive success with the PLG model, for example, Slack. Slack’s magic in their use of PLG was that they were landing with software engineers in tech companies that were probably 40 to 50% of the overall company headcounts and very influential. In other sectors, that’s not always the case. – Nick, Pitch In PLG companies, the expansion potential depends on how influential and how large that group of advocates is within an organization. How far can you get with that motion? At what point do you need to layer in a sales-led approach? Find the right mix of self-service and sales acceleration In SaaS, the ultimate goal is revenue growth achieved through adoption and retention. But how you get there looks different in each business. To find the right mix of self-service and sales acceleration, define the jobs to be done that help drive the business goals. We’re all in the business of building this together. And I think product-led growth and product-led sales combined does a really nice job of orienting people around the success of the product long term. – Sara, ChartMogul How to use the product-led approach to convert more users? It’s important to bring teams together around shared goals to deliver more value and interact more closely with users. In the end, the combination of self-serve product with people gets the buyer and the customer to where they want to go, what they wanna achieve. – Nick, Pitch Re-examine your sales team structure, compensation, and commissions Product-led growth forces you to rethink organizational structure and skill sets. Let’s not beat around the bush anymore. Now, with product-led growth, let’s look at the SaaS organization and let’s simplify it. Let’s look at these organizations, sales, solution, engineering, and customer success. (…) Let’s make it a single organization and have them work together. – Esben, Userflow It’s never been as important to work together across roles and teams and have the right people on the job. Do we need a large team of sellers who need to do that top down, using sales leads, nurturing, mapping, and the organization that has that traditional hunter skill? Or is it a technical person that’s helping them [customers] set up their trial and troubleshoot and experience the value without any sales? – Seth, PointNine Each team might have a different answer to these questions, but those are certainly questions worth asking. The best salespeople are great at customer success We have a tendency in SaaS, whenever new things come around, we add a role. And, and that’s kind of what we’re doing now. Product-led sales? Let’s add a person. – Esben, Userflow Instead, consider what the key ingredients are that make a salesperson at your company great. A PLS strategy may require you to hire different sales profiles with different skills The best customer success managers were the ones who could do sales and understood the product fully. And the best salespeople were the ones who could do CS and understand the product fully. – Esben Userflow A PLS strategy changes sales incentives Since, in a product-led model, sales reps are only one piece of the puzzle, and sales is a cross-functional activity in SaaS companies, it’s harder to attribute the success of the sale. It’s much more cross-functional than demos, sales pitches, and direct sales. So, did individual influence (of a sales rep) matter? The answer is unclear. For that reason, sales compensation is undergoing major changes. If you have a commission-driven model, you need to have clear lines on what is a sales qualified lead (SQL) versus a product qualified lead (PQL) and when salespeople step in. Our panelists have different perspectives on sales commissions. I think commission models are great, but in this world, I’m not sure they no longer should exist. (..) It’s really the product selling, and it’s you selling, it’s a lot of different things selling. And it makes it hard to allocate commission towards a single person. – Esben Userflow Set the right expectations with your sales team In a business where there are a lot of objectives and changing jobs to be done, set the right expectations for your sales team. We’re on a quarterly plan, and it gives me a little bit of agility to not lock in compensation that drives the wrong incentives and outcomes for the business. – Sara, ChartMogul Set the expectation that you’re gonna be changing the commission structure or you’re gonna be updating it on a quarterly basis. Salespeople tend to hate this change, but as long as it’s part of the culture because we’re learning so fast, I think it just sets the expectation that you’re not locked in. – Seth, PointNine Thank you to our panelists Esben Friis-Jensen, Co-Founder, Userflow Esben Friis-Jensen is the co-founder and Chief Growth Officer at Userflow, a no-code builder for in-app onboarding and surveys, allowing SaaS businesses to be more product-led. Prior to Userflow, Esben co-founded Cobalt, which today is a 200+ employee company. At Cobalt, Esben was part of a product-led growth initiative and this piqued his interest to go all in and be a co-founder of Userflow, a company in the space. Nicholas Mills, President, Pitch Nicholas Mills is the President at Pitch, where he leads the company’s go-to-market efforts.Prior to joining Pitch, Nick led CircleCI’s international expansion, building out operations as EMEA General Manager and a member of the global executive team. Nick has previously led teams at Stripe, Facebook, and Microsoft, and built a number of earlier-stage startups through to successful exits. He also loves helping founders and startups take their first steps on their own journeys as an early-stage investor, non-exec, and board advisor. Seth DeHart, Advisor, PointNine Seth DeHart is a Venture Partner at Point Nine a Berlin-based VC investing in B2B SaaS. In his role at Point Nine, Seth joins startups as a Fractional VP of Sales to help navigate the journey from Founder led sales to a full-time VP Sales hire. Prior to joining Point Nine, Seth was VP Sales of the Dutch startup Framer. Earlier in his career, he was the first sales hire at SF-based Revinate where he led sales first in the US and then Europe.

<sys> [INST] Being “Product-Led” in 2023 Means Product-Led Sales [/INST] Product-led growth is often presented as a silver bullet to hypergrowth. But in reality, many PLG success stories leverage traditional inside sales motions alongside self-service to speed up customer acquisition. This is called product-led sales. With a panel of experts, we discussed what product-led sales looks like in practice and when B2B SaaS leaders should start baking it into their go-to-market. Esben Friis-Jensen, Co-Founder at Userflow, Nicholas Mills, President at Pitch, and Seth DeHart, Advisor at PointNine, joined our panel discussion hosted by Sara Archer, VP of Sales at ChartMogul. Keep these 4 insights in mind as you transition into a product-led sales motion. 4 product-led sales tips: Use your product as a growth engine and augment it with sales Transitioning to product-led sales is not for everyone Find the right mix of self-service and sales acceleration Re-examine your sales team structure, compensation, and commissions SaaS shifted to product-led growth, and it’s impacting sales teams In the past, most companies followed a traditional sales strategy. Traditionally in sales there was an information asymmetry where the buyer needed access to information to make a decision. A salesperson gated it from them as leverage to then engage them in a sales process. That has gone away. – Nicholas Mills, President, Pitch The shift to subscription-based models has changed how a company operates. And it’s impacting sales teams too. Use your product as a growth engine and augment it with sales To delight your prospects, make sure they have all the necessary information to make a purchase decision without the need to ever talk to a sales rep: free trials, freemium model, extensive documentation, and product comparisons. The shift that’s happened is that people have become much more empowered in many companies to actually try things for themselves. – Nick, Pitch Once you remove barriers to adoption, people are empowered to try the product. People are primed to want to experience the product and the value that the product determines for them over the course of that evaluation. – Sara Archer, VP of Sales, ChartMogul For SaaS companies, this shift in consumer behavior means adopting a product-led go-to-market strategy and product-led sales. Complement your product-led motion with sales In a product-led growth strategy, you’re using the product as your growth engine. However, that doesn’t eradicate the need for sales teams. If you are a product-led business, product-led sales is what you can add on top of that, to support that process. It’s basically a way to extract more value from your product-led growth model, by adding sales into it. – Esben Friis-Jensen, Co-Founder, Userflow So, product-led sales is a sales methodology that focuses on leveraging the product itself as the primary driver of customer acquisition and revenue growth. According to our panelists, the product-led sales approach means leading with value. Transitioning to product-led sales is not for everyone Before you get started transitioning from a sales-led company to product-led, consider if product-led sales is truly the right way to run sales at your company. Sales-led growth still is a big thing in driving enormous revenue for many companies. (..) And it’s not right for everybody. – Seth DeHart, Advisor at PointNine If you’re already successful with your sales-led approach, keep at it. Also, remember that it’s not “all or nothing”. Most SaaS businesses should have some kind of a product-led aspect to their business. It’s not binary that you have to go all in on product-led growth or sales-led growth. – Esben, Userflow Slack’s successful product-led sales strategy Some companies experienced massive success with the PLG model, for example, Slack. Slack’s magic in their use of PLG was that they were landing with software engineers in tech companies that were probably 40 to 50% of the overall company headcounts and very influential. In other sectors, that’s not always the case. – Nick, Pitch In PLG companies, the expansion potential depends on how influential and how large that group of advocates is within an organization. How far can you get with that motion? At what point do you need to layer in a sales-led approach? Find the right mix of self-service and sales acceleration In SaaS, the ultimate goal is revenue growth achieved through adoption and retention. But how you get there looks different in each business. To find the right mix of self-service and sales acceleration, define the jobs to be done that help drive the business goals. We’re all in the business of building this together. And I think product-led growth and product-led sales combined does a really nice job of orienting people around the success of the product long term. – Sara, ChartMogul How to use the product-led approach to convert more users? It’s important to bring teams together around shared goals to deliver more value and interact more closely with users. In the end, the combination of self-serve product with people gets the buyer and the customer to where they want to go, what they wanna achieve. – Nick, Pitch Re-examine your sales team structure, compensation, and commissions Product-led growth forces you to rethink organizational structure and skill sets. Let’s not beat around the bush anymore. Now, with product-led growth, let’s look at the SaaS organization and let’s simplify it. Let’s look at these organizations, sales, solution, engineering, and customer success. (…) Let’s make it a single organization and have them work together. – Esben, Userflow It’s never been as important to work together across roles and teams and have the right people on the job. Do we need a large team of sellers who need to do that top down, using sales leads, nurturing, mapping, and the organization that has that traditional hunter skill? Or is it a technical person that’s helping them [customers] set up their trial and troubleshoot and experience the value without any sales? – Seth, PointNine Each team might have a different answer to these questions, but those are certainly questions worth asking. The best salespeople are great at customer success We have a tendency in SaaS, whenever new things come around, we add a role. And, and that’s kind of what we’re doing now. Product-led sales? Let’s add a person. – Esben, Userflow Instead, consider what the key ingredients are that make a salesperson at your company great. A PLS strategy may require you to hire different sales profiles with different skills The best customer success managers were the ones who could do sales and understood the product fully. And the best salespeople were the ones who could do CS and understand the product fully. – Esben Userflow A PLS strategy changes sales incentives Since, in a product-led model, sales reps are only one piece of the puzzle, and sales is a cross-functional activity in SaaS companies, it’s harder to attribute the success of the sale. It’s much more cross-functional than demos, sales pitches, and direct sales. So, did individual influence (of a sales rep) matter? The answer is unclear. For that reason, sales compensation is undergoing major changes. If you have a commission-driven model, you need to have clear lines on what is a sales qualified lead (SQL) versus a product qualified lead (PQL) and when salespeople step in. Our panelists have different perspectives on sales commissions. I think commission models are great, but in this world, I’m not sure they no longer should exist. (..) It’s really the product selling, and it’s you selling, it’s a lot of different things selling. And it makes it hard to allocate commission towards a single person. – Esben Userflow Set the right expectations with your sales team In a business where there are a lot of objectives and changing jobs to be done, set the right expectations for your sales team. We’re on a quarterly plan, and it gives me a little bit of agility to not lock in compensation that drives the wrong incentives and outcomes for the business. – Sara, ChartMogul Set the expectation that you’re gonna be changing the commission structure or you’re gonna be updating it on a quarterly basis. Salespeople tend to hate this change, but as long as it’s part of the culture because we’re learning so fast, I think it just sets the expectation that you’re not locked in. – Seth, PointNine Thank you to our panelists Esben Friis-Jensen, Co-Founder, Userflow Esben Friis-Jensen is the co-founder and Chief Growth Officer at Userflow, a no-code builder for in-app onboarding and surveys, allowing SaaS businesses to be more product-led. Prior to Userflow, Esben co-founded Cobalt, which today is a 200+ employee company. At Cobalt, Esben was part of a product-led growth initiative and this piqued his interest to go all in and be a co-founder of Userflow, a company in the space. Nicholas Mills, President, Pitch Nicholas Mills is the President at Pitch, where he leads the company’s go-to-market efforts.Prior to joining Pitch, Nick led CircleCI’s international expansion, building out operations as EMEA General Manager and a member of the global executive team. Nick has previously led teams at Stripe, Facebook, and Microsoft, and built a number of earlier-stage startups through to successful exits. He also loves helping founders and startups take their first steps on their own journeys as an early-stage investor, non-exec, and board advisor. Seth DeHart, Advisor, PointNine Seth DeHart is a Venture Partner at Point Nine a Berlin-based VC investing in B2B SaaS. In his role at Point Nine, Seth joins startups as a Fractional VP of Sales to help navigate the journey from Founder led sales to a full-time VP Sales hire. Prior to joining Point Nine, Seth was VP Sales of the Dutch startup Framer. Earlier in his career, he was the first sales hire at SF-based Revinate where he led sales first in the US and then Europe. </sys

Lessons from Honey, Movable Ink, Vestwell & more at Mogul I/O New York. Heads up: Tickets are now available for our Mogul I/O London event on May 30th, in partnership with Marvel! See more details and reserve your spot today. Mogul I/O is ChartMogul’s first ever event series, running in San Francisco, New York, London and Berlin. The New York event was an all-round success, so if you came out to see us then thank you! This post features a summary of the event’s panel discussion along with highlighted quotes from our panel members and key takeaways on each topic. Enjoy! The contributors (Moderator) Rachel Koplowitz — CEO, Honey Michaela Lehr — Director FP&A, Movable Ink Dave Sheen — SVP Finance, Vestwell Nicolas Wittenborn — VP, Insight Venture Partners Nick Franklin — CEO, ChartMogul From left to right: Nicolas Wittenborn, Nick Franklin, Michaela Lehr, Dave Sheen, Rachel Koplowitz Team alignment around revenue metrics and building a data-driven team For Movable Ink, it’s all about account expansion Today, Movable Ink is about a 200-person team. Michaela maintains that aligning people around account expansion is very important because it drives the correct behavior and culture. Michaela wants everyone at Movable Ink to care when companies walk away, or when accounts expand due to upsell. As a result of this, the management team defined “net expansion” as a key focus metric. There are specific goals set for Annual Run Rate (ARR) every quarter and a proportion of sales compensation is based on net expansion. “There’s a huge difference when your churn starts to fluctuate up, in terms of what that means for ARR — your revenue. Since ARR is the lifeblood of your business, you want that to grow. That was a big thing we did to align our exec leadership, customer success and sales teams around expansion.” Michaela Lehr, Movable Ink For other teams like R&D and engineering, it’s more about OKRs and more traditional alignment objectives. Michaela’s team is really thinking through how to create a product that’s not only integral to the companies they’re selling to, but also what that means for quarterly roadmap goals and feature releases. Vestwell deployed a prominent large-screen dashboard in its office Vestwell moved into a new office in April. The team immediately erected a large screen in the middle of the office displaying internal metrics. Because Vestwell is a hybrid of SaaS mixed with other components, it’s easiest to align the company around “assets under management” as a metric. This is the compass metric and the whole team can see that. As Dave explained, the screen felt overly sales driven when it was first installed — as a result it felt like if they didn’t meet the sales goals, the whole team would look over at sales and give them the “stink-eye.” Addressing this issue, version two of the dashboard still shows all of these core goals, but it now rotates through different screens of metrics. One screen is sales goals, followed by ops goals (e.g., app response times) and development goals (e.g., sprint progress). The idea here is to make all of the different teams feel connected to the metrics, rather than just sales. At ChartMogul, rapid team growth leads to goal changes As CEO Nick Franklin explains, ChartMogul is currently thinking about how to deal with having almost half its employee base on the engineering team, with many new arrivals in a short space of time. How do you make engineering contributions work toward company goals? In the early days, everyone had access to the company’s ChartMogul account and the whole team rallied around MRR growth and churn. Now the team has grown much larger, Nick’s management team is exploring how to align engineering with MRR growth. This includes potentially rolling out OKRs in the near future. “It’s quite easy if you run a support team to be metrics-driven. That team is really data driven from the start — there’s a lot of data built in, in the form of NPS, ticket response times and more…It’s more challenging in engineering, when you’re looking at paying down tech debt and more abstract projects.” Nick Franklin, ChartMogul Revenue is king, but monitoring churn is critical So what’s the North Star metric for us at ChartMogul? As Nick states, it’s primarily MRR. Since launching a free plan some months ago, the team needed to devise some other ways to measure the success of Freemium accounts — it’s important for the team to try to understand the longer-term value of a free customer. Michaela’s North Star metric at Movable Ink is “without a doubt” ARR. Understanding churn is a huge focus for the team in addition to this: “You can have the best sales team, but if you have a leaky bucket you’re losing a lot of value from your recurring revenue base.” Michaela Lehr, Movable Ink Nico Wittenborn shares his investor point of view on North Star metrics, but here’s the thing: It depends on the business. In SaaS, certainly ARR, MRR, churn and expansion are the most important. Helping entrepreneurs see the value of metrics in the first place is a bigger focus for Nico, though — it’s not uncommon to find founders who just aren’t bought into the measurement part: “There are some great entrepreneurs…they’re incredible entrepreneurs but they just don’t care about the numbers…they don’t know how to talk about it and align the company around it so much.” Nicolas Wittenborn, Insight Venture Partners In Nico’s opinion, a data-driven culture must come from the founders. As an investor, one goal is to get entrepreneurs to have a clear understanding of this — getting them to focus on one KPI that leads the company forward. Data reporting stacks and tools Michaela’s team at Movable Ink uses a lot of disparate systems for recording and reporting, so data accuracy can be difficult. It’s important for someone to own the numbers, and in the case of Movable Ink the responsibility comes down to Michaela’s team. When it comes to data accuracy, there’s no silver bullet — rather a lot of checks throughout the whole stack. Getting systems to talk to each other is a challenge for many SaaS startups. Dave has felt the pain of maintaining a manual dashboard for data reporting, and spends a lot of time into keeping this up to date. It’s all done by a combination of tools — some feed directly into the dashboard — and others go to email where they’re manually entered into the system. This was increasingly messy for him! ChartMogul has recently built a team to manage the company’s integrations with partners, and as Nick explains, having dedicated engineers focusing on specific areas of the business is a luxury. He hopes to have engineers entirely focused on the company’s internal tools before long. What’s the number one tool (excluding ChartMogul) you couldn’t live without? Dave: “Excel! I’m an Excel junkie.” Michaela: “Salesforce, especially when it’s leveraged correctly it’s a very powerful tool. Being able to map the customer journey and have metrics against that is really important.” Nick: “As a product-focused founder, Trello.” Nico: “ChartMogul, of course! But Salesforce is a consistent thing that is so much more than just a CRM now — it sits on top of the whole platform. Really depends on the company though.” In Nico’s opinion, there’s a huge opportunity for tools to manage data processing right now — someone needs to build this! Even independently of GDPR, there’s also what’s happening with Facebook. People are increasingly sensitive about what’s happening with their data and how it’s used. It’s quite possible that in a couple of years a tool to manage personal data could be really successful. Getting to the real “why” behind churn Movable Ink chooses to put a lot of focus on customer expansion, which includes both the upside as well as downside. But Michaela thinks it’s important to face churn head-on, too, in order to understand it: “Churn is an ugly thing, but you have to look it in the face and you have to understand it. If you understand your weaknesses that’s how you grow as a company.” Michaela Lehr, Movable Ink Movable Ink has been focusing on categorizing churn each quarter. Basic categorization is nice, but you can read into it on a much deeper level if you tie these categories back to the customer journey. Michaela’s team originally had broad, basic churn categorization, but they worked really hard to break down the customer journey and figure out what actually happened to make an individual customer churn. There are so many things across the entire journey that can happen to a customer to start them on a downward spiral towards churn — both external and internal factors. Michaela maintains that once you build knowledge around this journey — saying “here’s why it happened, here are the levers,” you’re actually able to put an action plan in place. “People see churn as an ugly thing…but they’re not scared of it any more. If you don’t measure it, you can’t prove it.” Michaela Lehr, Movable Ink How do you get down to a single churn reason when there are often complex issues leading to churn? ChartMogul’s answer to this is to create both high-level categories for churn reasons, as well as highly specific reasons. This gives the team both the ability to group and categorize as well as digging into the more actionable reasons on an individual level. A quick tip from Michaela on this: It’s helpful to try and get to a “five-second elevator pitch” for why the customer churned. Michaela Lehr of Movable Ink shares her insights on churn. Is there such thing as “too data driven”? As Michaela explains, you have to be human at the end of the day. You can be driving yourself crazy looking at the numbers, but you have to take a step back and remember that you’re working with real people — and these people have emotions that drive the decisions they make and the things they do. “…Then you have to take a step back and think ‘I’m a person, and these are people. How do I think about this on a human level?’… and use that to inform your decisions.” Michaela Lehr, Movable Ink Dave believes we’re lying to ourselves all too often when telling stories around financial data: “You can pretty much make any financial model look like it works, if you just throw the right assumptions in there. I’ve seen countless examples of amazingly rosy projections and how companies are going to get to a billion dollars in three years… it rarely comes true.” Dave Sheen, Vestwell What happens when it’s too early to have any reliable data to go on? Nico was involved in the early-stage investments that Point Nine Capital made in both Honey and ChartMogul. Neither company had much in the way of numbers at the time. In the case of ChartMogul it was much more about the founder — Christoph Janz had a strong connection with Zendesk (Nick’s former employer), so prior feedback on Nick as an entrepreneur helped them make a decision. The metrics in this case were not so relevant. In the case of Honey, it was much more about the product and early adopter engagement with the product. Honey allows people in a company to engage more with each other, and the product encourages a high level of activity. Nico was interested in benchmarking the activity and engagement of the early customer accounts, and focusing on how engaged these people were with the product. “The earlier you go, the more micro your lens gets — it’s more about talking to customers and backing that up with some data around the engagement with the product.” Nico Wittenborn, Insight Venture Partners What can people read or attend to be better at data and metrics in SaaS? Nick: “I’ll promote a SaaS event in Dublin called SaaStock — it’s a lot of fun and a huge learning experience!” Dave: “If you haven’t read David Skok’s blog, he’s the OG of SaaS. Nobody does a better job of explaining the basics around SaaS metrics.” Michaela: Also the SaaS Metrics 2.0 post by David Skok — just read through the entire stack and the comments at the end too!

[INST] Lessons from Honey, Movable Ink, Vestwell & more at Mogul I/O New York [/INST]

Heads up: Tickets are now available for our Mogul I/O London event on May 30th, in partnership with Marvel! See more details and reserve your spot today. Mogul I/O is ChartMogul’s first ever event series, running in San Francisco, New York, London and Berlin. The New York event was an all-round success, so if you came out to see us then thank you! This post features a summary of the event’s panel discussion along with highlighted quotes from our panel members and key takeaways on each topic. Enjoy! The contributors (Moderator) Rachel Koplowitz — CEO, Honey Michaela Lehr — Director FP&A, Movable Ink Dave Sheen — SVP Finance, Vestwell Nicolas Wittenborn — VP, Insight Venture Partners Nick Franklin — CEO, ChartMogul From left to right: Nicolas Wittenborn, Nick Franklin, Michaela Lehr, Dave Sheen, Rachel Koplowitz Team alignment around revenue metrics and building a data-driven team For Movable Ink, it’s all about account expansion Today, Movable Ink is about a 200-person team. Michaela maintains that aligning people around account expansion is very important because it drives the correct behavior and culture. Michaela wants everyone at Movable Ink to care when companies walk away, or when accounts expand due to upsell. As a result of this, the management team defined “net expansion” as a key focus metric. There are specific goals set for Annual Run Rate (ARR) every quarter and a proportion of sales compensation is based on net expansion. “There’s a huge difference when your churn starts to fluctuate up, in terms of what that means for ARR — your revenue. Since ARR is the lifeblood of your business, you want that to grow. That was a big thing we did to align our exec leadership, customer success and sales teams around expansion.” Michaela Lehr, Movable Ink For other teams like R&D and engineering, it’s more about OKRs and more traditional alignment objectives. Michaela’s team is really thinking through how to create a product that’s not only integral to the companies they’re selling to, but also what that means for quarterly roadmap goals and feature releases. Vestwell deployed a prominent large-screen dashboard in its office Vestwell moved into a new office in April. The team immediately erected a large screen in the middle of the office displaying internal metrics. Because Vestwell is a hybrid of SaaS mixed with other components, it’s easiest to align the company around “assets under management” as a metric. This is the compass metric and the whole team can see that. As Dave explained, the screen felt overly sales driven when it was first installed — as a result it felt like if they didn’t meet the sales goals, the whole team would look over at sales and give them the “stink-eye.” Addressing this issue, version two of the dashboard still shows all of these core goals, but it now rotates through different screens of metrics. One screen is sales goals, followed by ops goals (e.g., app response times) and development goals (e.g., sprint progress). The idea here is to make all of the different teams feel connected to the metrics, rather than just sales. At ChartMogul, rapid team growth leads to goal changes As CEO Nick Franklin explains, ChartMogul is currently thinking about how to deal with having almost half its employee base on the engineering team, with many new arrivals in a short space of time. How do you make engineering contributions work toward company goals? In the early days, everyone had access to the company’s ChartMogul account and the whole team rallied around MRR growth and churn. Now the team has grown much larger, Nick’s management team is exploring how to align engineering with MRR growth. This includes potentially rolling out OKRs in the near future. “It’s quite easy if you run a support team to be metrics-driven. That team is really data driven from the start — there’s a lot of data built in, in the form of NPS, ticket response times and more…It’s more challenging in engineering, when you’re looking at paying down tech debt and more abstract projects.” Nick Franklin, ChartMogul Revenue is king, but monitoring churn is critical So what’s the North Star metric for us at ChartMogul? As Nick states, it’s primarily MRR. Since launching a free plan some months ago, the team needed to devise some other ways to measure the success of Freemium accounts — it’s important for the team to try to understand the longer-term value of a free customer. Michaela’s North Star metric at Movable Ink is “without a doubt” ARR. Understanding churn is a huge focus for the team in addition to this: “You can have the best sales team, but if you have a leaky bucket you’re losing a lot of value from your recurring revenue base.” Michaela Lehr, Movable Ink Nico Wittenborn shares his investor point of view on North Star metrics, but here’s the thing: It depends on the business. In SaaS, certainly ARR, MRR, churn and expansion are the most important. Helping entrepreneurs see the value of metrics in the first place is a bigger focus for Nico, though — it’s not uncommon to find founders who just aren’t bought into the measurement part: “There are some great entrepreneurs…they’re incredible entrepreneurs but they just don’t care about the numbers…they don’t know how to talk about it and align the company around it so much.” Nicolas Wittenborn, Insight Venture Partners In Nico’s opinion, a data-driven culture must come from the founders. As an investor, one goal is to get entrepreneurs to have a clear understanding of this — getting them to focus on one KPI that leads the company forward. Data reporting stacks and tools Michaela’s team at Movable Ink uses a lot of disparate systems for recording and reporting, so data accuracy can be difficult. It’s important for someone to own the numbers, and in the case of Movable Ink the responsibility comes down to Michaela’s team. When it comes to data accuracy, there’s no silver bullet — rather a lot of checks throughout the whole stack. Getting systems to talk to each other is a challenge for many SaaS startups. Dave has felt the pain of maintaining a manual dashboard for data reporting, and spends a lot of time into keeping this up to date. It’s all done by a combination of tools — some feed directly into the dashboard — and others go to email where they’re manually entered into the system. This was increasingly messy for him! ChartMogul has recently built a team to manage the company’s integrations with partners, and as Nick explains, having dedicated engineers focusing on specific areas of the business is a luxury. He hopes to have engineers entirely focused on the company’s internal tools before long. What’s the number one tool (excluding ChartMogul) you couldn’t live without? Dave: “Excel! I’m an Excel junkie.” Michaela: “Salesforce, especially when it’s leveraged correctly it’s a very powerful tool. Being able to map the customer journey and have metrics against that is really important.” Nick: “As a product-focused founder, Trello.” Nico: “ChartMogul, of course! But Salesforce is a consistent thing that is so much more than just a CRM now — it sits on top of the whole platform. Really depends on the company though.” In Nico’s opinion, there’s a huge opportunity for tools to manage data processing right now — someone needs to build this! Even independently of GDPR, there’s also what’s happening with Facebook. People are increasingly sensitive about what’s happening with their data and how it’s used. It’s quite possible that in a couple of years a tool to manage personal data could be really successful. Getting to the real “why” behind churn Movable Ink chooses to put a lot of focus on customer expansion, which includes both the upside as well as downside. But Michaela thinks it’s important to face churn head-on, too, in order to understand it: “Churn is an ugly thing, but you have to look it in the face and you have to understand it. If you understand your weaknesses that’s how you grow as a company.” Michaela Lehr, Movable Ink Movable Ink has been focusing on categorizing churn each quarter. Basic categorization is nice, but you can read into it on a much deeper level if you tie these categories back to the customer journey. Michaela’s team originally had broad, basic churn categorization, but they worked really hard to break down the customer journey and figure out what actually happened to make an individual customer churn. There are so many things across the entire journey that can happen to a customer to start them on a downward spiral towards churn — both external and internal factors. Michaela maintains that once you build knowledge around this journey — saying “here’s why it happened, here are the levers,” you’re actually able to put an action plan in place. “People see churn as an ugly thing…but they’re not scared of it any more. If you don’t measure it, you can’t prove it.” Michaela Lehr, Movable Ink How do you get down to a single churn reason when there are often complex issues leading to churn? ChartMogul’s answer to this is to create both high-level categories for churn reasons, as well as highly specific reasons. This gives the team both the ability to group and categorize as well as digging into the more actionable reasons on an individual level. A quick tip from Michaela on this: It’s helpful to try and get to a “five-second elevator pitch” for why the customer churned. Michaela Lehr of Movable Ink shares her insights on churn. Is there such thing as “too data driven”? As Michaela explains, you have to be human at the end of the day. You can be driving yourself crazy looking at the numbers, but you have to take a step back and remember that you’re working with real people — and these people have emotions that drive the decisions they make and the things they do. “…Then you have to take a step back and think ‘I’m a person, and these are people. How do I think about this on a human level?’… and use that to inform your decisions.” Michaela Lehr, Movable Ink Dave believes we’re lying to ourselves all too often when telling stories around financial data: “You can pretty much make any financial model look like it works, if you just throw the right assumptions in there. I’ve seen countless examples of amazingly rosy projections and how companies are going to get to a billion dollars in three years… it rarely comes true.” Dave Sheen, Vestwell What happens when it’s too early to have any reliable data to go on? Nico was involved in the early-stage investments that Point Nine Capital made in both Honey and ChartMogul. Neither company had much in the way of numbers at the time. In the case of ChartMogul it was much more about the founder — Christoph Janz had a strong connection with Zendesk (Nick’s former employer), so prior feedback on Nick as an entrepreneur helped them make a decision. The metrics in this case were not so relevant. In the case of Honey, it was much more about the product and early adopter engagement with the product. Honey allows people in a company to engage more with each other, and the product encourages a high level of activity. Nico was interested in benchmarking the activity and engagement of the early customer accounts, and focusing on how engaged these people were with the product. “The earlier you go, the more micro your lens gets — it’s more about talking to customers and backing that up with some data around the engagement with the product.” Nico Wittenborn, Insight Venture Partners What can people read or attend to be better at data and metrics in SaaS? Nick: “I’ll promote a SaaS event in Dublin called SaaStock — it’s a lot of fun and a huge learning experience!” Dave: “If you haven’t read David Skok’s blog, he’s the OG of SaaS. Nobody does a better job of explaining the basics around SaaS metrics.” Michaela: Also the SaaS Metrics 2.0 post by David Skok — just read through the entire stack and the comments at the end too!

<sys> [INST] Lessons from Honey, Movable Ink, Vestwell & more at Mogul I/O New York [/INST] Heads up: Tickets are now available for our Mogul I/O London event on May 30th, in partnership with Marvel! See more details and reserve your spot today. Mogul I/O is ChartMogul’s first ever event series, running in San Francisco, New York, London and Berlin. The New York event was an all-round success, so if you came out to see us then thank you! This post features a summary of the event’s panel discussion along with highlighted quotes from our panel members and key takeaways on each topic. Enjoy! The contributors (Moderator) Rachel Koplowitz — CEO, Honey Michaela Lehr — Director FP&A, Movable Ink Dave Sheen — SVP Finance, Vestwell Nicolas Wittenborn — VP, Insight Venture Partners Nick Franklin — CEO, ChartMogul From left to right: Nicolas Wittenborn, Nick Franklin, Michaela Lehr, Dave Sheen, Rachel Koplowitz Team alignment around revenue metrics and building a data-driven team For Movable Ink, it’s all about account expansion Today, Movable Ink is about a 200-person team. Michaela maintains that aligning people around account expansion is very important because it drives the correct behavior and culture. Michaela wants everyone at Movable Ink to care when companies walk away, or when accounts expand due to upsell. As a result of this, the management team defined “net expansion” as a key focus metric. There are specific goals set for Annual Run Rate (ARR) every quarter and a proportion of sales compensation is based on net expansion. “There’s a huge difference when your churn starts to fluctuate up, in terms of what that means for ARR — your revenue. Since ARR is the lifeblood of your business, you want that to grow. That was a big thing we did to align our exec leadership, customer success and sales teams around expansion.” Michaela Lehr, Movable Ink For other teams like R&D and engineering, it’s more about OKRs and more traditional alignment objectives. Michaela’s team is really thinking through how to create a product that’s not only integral to the companies they’re selling to, but also what that means for quarterly roadmap goals and feature releases. Vestwell deployed a prominent large-screen dashboard in its office Vestwell moved into a new office in April. The team immediately erected a large screen in the middle of the office displaying internal metrics. Because Vestwell is a hybrid of SaaS mixed with other components, it’s easiest to align the company around “assets under management” as a metric. This is the compass metric and the whole team can see that. As Dave explained, the screen felt overly sales driven when it was first installed — as a result it felt like if they didn’t meet the sales goals, the whole team would look over at sales and give them the “stink-eye.” Addressing this issue, version two of the dashboard still shows all of these core goals, but it now rotates through different screens of metrics. One screen is sales goals, followed by ops goals (e.g., app response times) and development goals (e.g., sprint progress). The idea here is to make all of the different teams feel connected to the metrics, rather than just sales. At ChartMogul, rapid team growth leads to goal changes As CEO Nick Franklin explains, ChartMogul is currently thinking about how to deal with having almost half its employee base on the engineering team, with many new arrivals in a short space of time. How do you make engineering contributions work toward company goals? In the early days, everyone had access to the company’s ChartMogul account and the whole team rallied around MRR growth and churn. Now the team has grown much larger, Nick’s management team is exploring how to align engineering with MRR growth. This includes potentially rolling out OKRs in the near future. “It’s quite easy if you run a support team to be metrics-driven. That team is really data driven from the start — there’s a lot of data built in, in the form of NPS, ticket response times and more…It’s more challenging in engineering, when you’re looking at paying down tech debt and more abstract projects.” Nick Franklin, ChartMogul Revenue is king, but monitoring churn is critical So what’s the North Star metric for us at ChartMogul? As Nick states, it’s primarily MRR. Since launching a free plan some months ago, the team needed to devise some other ways to measure the success of Freemium accounts — it’s important for the team to try to understand the longer-term value of a free customer. Michaela’s North Star metric at Movable Ink is “without a doubt” ARR. Understanding churn is a huge focus for the team in addition to this: “You can have the best sales team, but if you have a leaky bucket you’re losing a lot of value from your recurring revenue base.” Michaela Lehr, Movable Ink Nico Wittenborn shares his investor point of view on North Star metrics, but here’s the thing: It depends on the business. In SaaS, certainly ARR, MRR, churn and expansion are the most important. Helping entrepreneurs see the value of metrics in the first place is a bigger focus for Nico, though — it’s not uncommon to find founders who just aren’t bought into the measurement part: “There are some great entrepreneurs…they’re incredible entrepreneurs but they just don’t care about the numbers…they don’t know how to talk about it and align the company around it so much.” Nicolas Wittenborn, Insight Venture Partners In Nico’s opinion, a data-driven culture must come from the founders. As an investor, one goal is to get entrepreneurs to have a clear understanding of this — getting them to focus on one KPI that leads the company forward. Data reporting stacks and tools Michaela’s team at Movable Ink uses a lot of disparate systems for recording and reporting, so data accuracy can be difficult. It’s important for someone to own the numbers, and in the case of Movable Ink the responsibility comes down to Michaela’s team. When it comes to data accuracy, there’s no silver bullet — rather a lot of checks throughout the whole stack. Getting systems to talk to each other is a challenge for many SaaS startups. Dave has felt the pain of maintaining a manual dashboard for data reporting, and spends a lot of time into keeping this up to date. It’s all done by a combination of tools — some feed directly into the dashboard — and others go to email where they’re manually entered into the system. This was increasingly messy for him! ChartMogul has recently built a team to manage the company’s integrations with partners, and as Nick explains, having dedicated engineers focusing on specific areas of the business is a luxury. He hopes to have engineers entirely focused on the company’s internal tools before long. What’s the number one tool (excluding ChartMogul) you couldn’t live without? Dave: “Excel! I’m an Excel junkie.” Michaela: “Salesforce, especially when it’s leveraged correctly it’s a very powerful tool. Being able to map the customer journey and have metrics against that is really important.” Nick: “As a product-focused founder, Trello.” Nico: “ChartMogul, of course! But Salesforce is a consistent thing that is so much more than just a CRM now — it sits on top of the whole platform. Really depends on the company though.” In Nico’s opinion, there’s a huge opportunity for tools to manage data processing right now — someone needs to build this! Even independently of GDPR, there’s also what’s happening with Facebook. People are increasingly sensitive about what’s happening with their data and how it’s used. It’s quite possible that in a couple of years a tool to manage personal data could be really successful. Getting to the real “why” behind churn Movable Ink chooses to put a lot of focus on customer expansion, which includes both the upside as well as downside. But Michaela thinks it’s important to face churn head-on, too, in order to understand it: “Churn is an ugly thing, but you have to look it in the face and you have to understand it. If you understand your weaknesses that’s how you grow as a company.” Michaela Lehr, Movable Ink Movable Ink has been focusing on categorizing churn each quarter. Basic categorization is nice, but you can read into it on a much deeper level if you tie these categories back to the customer journey. Michaela’s team originally had broad, basic churn categorization, but they worked really hard to break down the customer journey and figure out what actually happened to make an individual customer churn. There are so many things across the entire journey that can happen to a customer to start them on a downward spiral towards churn — both external and internal factors. Michaela maintains that once you build knowledge around this journey — saying “here’s why it happened, here are the levers,” you’re actually able to put an action plan in place. “People see churn as an ugly thing…but they’re not scared of it any more. If you don’t measure it, you can’t prove it.” Michaela Lehr, Movable Ink How do you get down to a single churn reason when there are often complex issues leading to churn? ChartMogul’s answer to this is to create both high-level categories for churn reasons, as well as highly specific reasons. This gives the team both the ability to group and categorize as well as digging into the more actionable reasons on an individual level. A quick tip from Michaela on this: It’s helpful to try and get to a “five-second elevator pitch” for why the customer churned. Michaela Lehr of Movable Ink shares her insights on churn. Is there such thing as “too data driven”? As Michaela explains, you have to be human at the end of the day. You can be driving yourself crazy looking at the numbers, but you have to take a step back and remember that you’re working with real people — and these people have emotions that drive the decisions they make and the things they do. “…Then you have to take a step back and think ‘I’m a person, and these are people. How do I think about this on a human level?’… and use that to inform your decisions.” Michaela Lehr, Movable Ink Dave believes we’re lying to ourselves all too often when telling stories around financial data: “You can pretty much make any financial model look like it works, if you just throw the right assumptions in there. I’ve seen countless examples of amazingly rosy projections and how companies are going to get to a billion dollars in three years… it rarely comes true.” Dave Sheen, Vestwell What happens when it’s too early to have any reliable data to go on? Nico was involved in the early-stage investments that Point Nine Capital made in both Honey and ChartMogul. Neither company had much in the way of numbers at the time. In the case of ChartMogul it was much more about the founder — Christoph Janz had a strong connection with Zendesk (Nick’s former employer), so prior feedback on Nick as an entrepreneur helped them make a decision. The metrics in this case were not so relevant. In the case of Honey, it was much more about the product and early adopter engagement with the product. Honey allows people in a company to engage more with each other, and the product encourages a high level of activity. Nico was interested in benchmarking the activity and engagement of the early customer accounts, and focusing on how engaged these people were with the product. “The earlier you go, the more micro your lens gets — it’s more about talking to customers and backing that up with some data around the engagement with the product.” Nico Wittenborn, Insight Venture Partners What can people read or attend to be better at data and metrics in SaaS? Nick: “I’ll promote a SaaS event in Dublin called SaaStock — it’s a lot of fun and a huge learning experience!” Dave: “If you haven’t read David Skok’s blog, he’s the OG of SaaS. Nobody does a better job of explaining the basics around SaaS metrics.” Michaela: Also the SaaS Metrics 2.0 post by David Skok — just read through the entire stack and the comments at the end too! </sys

SaaS Metrics: The Secret To Subscription Success [Slides]. Behind every successful SaaS business is a wealth of SaaS metrics. This presentation gives you a broad overview of the key metrics you should be measuring to fully understand how your business is growing. Metrics like Monthly Recurring Revenue (MRR), Customer Churn Rate, MRR Churn Rate and Customer Lifetime Value (LTV) can often be measured in a number of ways. We show you the intricacies of each of them. SaaS Metrics: The Secret to Subscription Success from EdShelley Got any questions on SaaS Metrics, or want to find out more? Get in touch!

[INST] SaaS Metrics: The Secret To Subscription Success [Slides] [/INST]

Behind every successful SaaS business is a wealth of SaaS metrics. This presentation gives you a broad overview of the key metrics you should be measuring to fully understand how your business is growing. Metrics like Monthly Recurring Revenue (MRR), Customer Churn Rate, MRR Churn Rate and Customer Lifetime Value (LTV) can often be measured in a number of ways. We show you the intricacies of each of them. SaaS Metrics: The Secret to Subscription Success from EdShelley Got any questions on SaaS Metrics, or want to find out more? Get in touch!

<sys> [INST] SaaS Metrics: The Secret To Subscription Success [Slides] [/INST] Behind every successful SaaS business is a wealth of SaaS metrics. This presentation gives you a broad overview of the key metrics you should be measuring to fully understand how your business is growing. Metrics like Monthly Recurring Revenue (MRR), Customer Churn Rate, MRR Churn Rate and Customer Lifetime Value (LTV) can often be measured in a number of ways. We show you the intricacies of each of them. SaaS Metrics: The Secret to Subscription Success from EdShelley Got any questions on SaaS Metrics, or want to find out more? Get in touch! </sys

COVID Discounting: To Do or Not To Do. As a Senior AE with ChartMogul, my role is to take businesses through their revenue metrics within ChartMogul to help them gain an understanding of our product offering and to ideally also teach them something about their business using their metrics. Sometimes I like to call myself a revenue metrics mechanic. I pop the hood of SaaS businesses and figure out why the car is “smoking”. It’s the highlight of my job because I learn so much from my prospects. However, because we work with thousands of high performing SaaS businesses globally, we can also share insights and ideas from like-minded businesses. In a given sales conversation, I aim to share relevant commercial insight and focus on the real SaaS metrics at hand… instead of focusing on our product offering. Demos are much more productive for all involved parties if a prospect is willing to import their Stripe, Recurly, or Chargebee revenue data to a trial account, and we can review the charts together. The first chart that I have prospects navigate to is the MRR chart. There was a pretty constant theme in Q2 and Q3 of 2020 as prospects imported their data and navigated to their MRR chart: A sigh heard around the world. Many prospects are often quick to point out the dip in MRR in April/May 2020 followed by a sigh and someone on the call quickly backing up the sigh by saying, “Ah, COVID”. COVID… 2020 in a nutshell. Earlier this year, SaaS businesses around the globe reacted quickly to the global pandemic. These were “unprecedented times”, after all. A few very obvious things happened in the world of SaaS — we saw negative effects on businesses as they let people go in an attempt to become cashflow efficient in unpredictable times. Subscriptions businesses jumped at the opportunity to provide tools for the world to go more digital while also ensuring they were aware of budget cuts and financial uncertainty. Dropbox gave nonprofits and NGOs 6 months of free access. Mailchimp gave governments, schools, healthcare companies, and non-profits more features in their free accounts and upgraded them to their standard tier at no extra charge. Adobe offered free home access to its Creative Cloud for teachers and students. Dialpad gave customers in Japan and North America two months of access to Dialpad Pro for free and Zoom removed its 40 minute limit on free calls for students and teachers. (Check out this list of SaaS companies with COVID-19 discounts.) Companies of all sizes were trying to navigate the chaos and uncertainty оf the pandemic while providing some kind of support to their customers. But very often trying to offer that kind of support would create even more confusion. Considering offering a discount due to the pandemic is easy, but getting the details right is a lot harder. How do you figure out who deserves a discount? And, above all, what kind of discount do you offer? In my calls with SaaS founders, I’ve noticed several key billing and revenue trends when it comes to COVID-related discounting: Paused subscriptions Free months Discounted plans Freemium models Without a doubt, there’s a trend of decreased MRR for 2020 and early 2021, but there is some gold nestled in the midst of that data — it’s about understanding the impact of your business’ reaction plan and understanding where to look for the opportunity. Understanding the impact of a COVID discount Whatever method you choose to offer a COVID-related respite to your customers, there will be some effect on the performance of your business. Usually, this will be manifested in one (or more) of your core metrics. Typically, you’ll see it in one of the following: Monthly recurring revenue Regardless of the strategy your subscription business took, any of the four strategies will present an overarching drop in MRR. It’s important to note that MRR is much more of a complex metric than we give it credit for — the drop in monthly recurring revenue could have been caused by any of the three factors: lower net new sales, spikes in contraction revenue, or higher overarching churn. As we round the curve and head into 2021, it will be equally as important to look at reactivation MRR to understand if you’re starting to win customers back. Net MRR retention rate Looking at retention from a cohort perspective helps you look at your current customer base in a critical way. MRR Retention Rate = MRR of renewed subscriptions / Total MRR of subscriptions up for renewal. Tweet this quote It’s highly probable that MRR retention dropped in the midst of COVID, considering that renewals could have been negatively impacted by the economic circumstances of your paying customers. As you reflect on your strategies for retention in the midst of COVID, it’s important to understand how much revenue you managed to keep in the door, especially if you put practices in place to keep your customers from churning. Churn rate and Segmented churn rate Churn is not unique to COVID — SaaS executives have long used churn as a barometer for health. At the highest level, understanding your company churn rate through the pandemic was and is paramount. This is straightforward: was there an uptick in your churn percentage? The idea of segmentation is something that we highlight to all prospective users of ChartMogul. It became essential during COVID. Understanding the who’s, how’s and what’s of churn matter — if your business took to one of the strategies I mentioned above, it’s paramount to be able to compare between COVID-related churn and other more average reasons for churn. In April of 2020 our team took to our customer list and determined, based on a small set of criteria, if we suspected the customer could be negatively (or positively) impacted by COVID — in other words, which accounts were potentially at risk. In doing this, we were able to then analyze churn month-over-month throughout Q2 and Q3 to determine if our predictions were accurate. We were also able to measure the success of our practices to prevent churn. Subscriber count The subscriber count is something that you can look at from a couple of angles. Simply put, did your business see the number of net new subscribers decrease in the early months of 2020… or did it increase? As I mentioned before, many businesses shifted their subscription offering to incorporate a free tier for a period of time. Technically speaking, these would be active subscribers. In this case, there may have been a massive positive impact on the number of subscribers. This can be a confusing and misleading metric to follow — an increase in subscribers but a decrease in MRR? The key piece here comes back to understanding the subscriber count and being able to break it down into its parts: paying subscribers and non-paying subscribers. It’s critical to think about these two segments separately. Paid subscribers need to be nurtured for retention. And what about free subscribers? If the hope is to one day move them to a paid plan, the next step will be nurturing them for conversion. Understanding the opportunity a discount will create I have to give credit to businesses that reacted quickly to the needs of their customers in the global pandemic. But there’s a bigger issue to consider. I ask founders daily if they understand what the opportunity, both present and future, their COVID plan of action creates. More times than not I get a single eyebrow raise… confusion, intrigue, and maybe a little excitement. When considering a COVID discount, it is also important to understand the long-term impact your actions will have on your brand. Paused subscriptions + Months free Assuming your business paused subscriptions for a specific period of time, have you factored in a way to examine your expected expansion revenue for when subscriptions become unpaused or return to their paid plans? This will result in an uptick in MRR but could also result in an uptick in churn. What’s your strategy for monitoring the effectiveness of a paused subscription? Do you have a quick and easy way to see what % of customers came back from their pause or didn’t cancel before their plan kicked back in? By using custom attributes or tags you’re able to look at these accounts after the fact and determine how these accounts acted — did they return to normal after their free months or did you lose them entirely? Discounted plans Understanding the impact of discounting is something I educate buyers on daily. Many businesses use discounting as a closing strategy. Discounting impacts MRR but the aggregate result of a discounting approach is often overlooked because it is more of an accounting-focussed metric. If you’re aware of the $$$ you did not bring in during COVID, you’re more aware of what you might need to make up if you hope to stay on target. Do you have a plan to make up the revenue that was lost through COVID discounting? In some (lucky) cases, discounting might be a way to take full advantage of the opportunity the pandemic is generating. On a recent webinar, we heard how SignEasy experienced strong lead generation during the outbreak of the pandemic. They used discounting as a way to maximize this opportunity — rather than let some customers go to a competitor. Freemium models Some businesses count free accounts as subscribers, others do not. This has been noted a few times now. Businesses that acted quickly and provided a free solution are eager to see the conversion of these customers to paid accounts — if something isn’t free forever, do customers keep using your product? It’s important to know how long a customer takes before upgrading and generating MRR for your business. Every crisis creates opportunities as well as threats Looking at your metrics with a critical eye will help you plan for the 2021 year ahead. There are opportunities nestled in the midst of your strategies: areas to understand churn, opportunities to earn business back, plans to convert free customers. COVID strategies, though reactionary and necessary, were experiments that still need to be measured and accounted for. If you’d like to look at any of these points together, book a call with me. I’d be happy to take you through it!

[INST] COVID Discounting: To Do or Not To Do [/INST]

As a Senior AE with ChartMogul, my role is to take businesses through their revenue metrics within ChartMogul to help them gain an understanding of our product offering and to ideally also teach them something about their business using their metrics. Sometimes I like to call myself a revenue metrics mechanic. I pop the hood of SaaS businesses and figure out why the car is “smoking”. It’s the highlight of my job because I learn so much from my prospects. However, because we work with thousands of high performing SaaS businesses globally, we can also share insights and ideas from like-minded businesses. In a given sales conversation, I aim to share relevant commercial insight and focus on the real SaaS metrics at hand… instead of focusing on our product offering. Demos are much more productive for all involved parties if a prospect is willing to import their Stripe, Recurly, or Chargebee revenue data to a trial account, and we can review the charts together. The first chart that I have prospects navigate to is the MRR chart. There was a pretty constant theme in Q2 and Q3 of 2020 as prospects imported their data and navigated to their MRR chart: A sigh heard around the world. Many prospects are often quick to point out the dip in MRR in April/May 2020 followed by a sigh and someone on the call quickly backing up the sigh by saying, “Ah, COVID”. COVID… 2020 in a nutshell. Earlier this year, SaaS businesses around the globe reacted quickly to the global pandemic. These were “unprecedented times”, after all. A few very obvious things happened in the world of SaaS — we saw negative effects on businesses as they let people go in an attempt to become cashflow efficient in unpredictable times. Subscriptions businesses jumped at the opportunity to provide tools for the world to go more digital while also ensuring they were aware of budget cuts and financial uncertainty. Dropbox gave nonprofits and NGOs 6 months of free access. Mailchimp gave governments, schools, healthcare companies, and non-profits more features in their free accounts and upgraded them to their standard tier at no extra charge. Adobe offered free home access to its Creative Cloud for teachers and students. Dialpad gave customers in Japan and North America two months of access to Dialpad Pro for free and Zoom removed its 40 minute limit on free calls for students and teachers. (Check out this list of SaaS companies with COVID-19 discounts.) Companies of all sizes were trying to navigate the chaos and uncertainty оf the pandemic while providing some kind of support to their customers. But very often trying to offer that kind of support would create even more confusion. Considering offering a discount due to the pandemic is easy, but getting the details right is a lot harder. How do you figure out who deserves a discount? And, above all, what kind of discount do you offer? In my calls with SaaS founders, I’ve noticed several key billing and revenue trends when it comes to COVID-related discounting: Paused subscriptions Free months Discounted plans Freemium models Without a doubt, there’s a trend of decreased MRR for 2020 and early 2021, but there is some gold nestled in the midst of that data — it’s about understanding the impact of your business’ reaction plan and understanding where to look for the opportunity. Understanding the impact of a COVID discount Whatever method you choose to offer a COVID-related respite to your customers, there will be some effect on the performance of your business. Usually, this will be manifested in one (or more) of your core metrics. Typically, you’ll see it in one of the following: Monthly recurring revenue Regardless of the strategy your subscription business took, any of the four strategies will present an overarching drop in MRR. It’s important to note that MRR is much more of a complex metric than we give it credit for — the drop in monthly recurring revenue could have been caused by any of the three factors: lower net new sales, spikes in contraction revenue, or higher overarching churn. As we round the curve and head into 2021, it will be equally as important to look at reactivation MRR to understand if you’re starting to win customers back. Net MRR retention rate Looking at retention from a cohort perspective helps you look at your current customer base in a critical way. MRR Retention Rate = MRR of renewed subscriptions / Total MRR of subscriptions up for renewal. Tweet this quote It’s highly probable that MRR retention dropped in the midst of COVID, considering that renewals could have been negatively impacted by the economic circumstances of your paying customers. As you reflect on your strategies for retention in the midst of COVID, it’s important to understand how much revenue you managed to keep in the door, especially if you put practices in place to keep your customers from churning. Churn rate and Segmented churn rate Churn is not unique to COVID — SaaS executives have long used churn as a barometer for health. At the highest level, understanding your company churn rate through the pandemic was and is paramount. This is straightforward: was there an uptick in your churn percentage? The idea of segmentation is something that we highlight to all prospective users of ChartMogul. It became essential during COVID. Understanding the who’s, how’s and what’s of churn matter — if your business took to one of the strategies I mentioned above, it’s paramount to be able to compare between COVID-related churn and other more average reasons for churn. In April of 2020 our team took to our customer list and determined, based on a small set of criteria, if we suspected the customer could be negatively (or positively) impacted by COVID — in other words, which accounts were potentially at risk. In doing this, we were able to then analyze churn month-over-month throughout Q2 and Q3 to determine if our predictions were accurate. We were also able to measure the success of our practices to prevent churn. Subscriber count The subscriber count is something that you can look at from a couple of angles. Simply put, did your business see the number of net new subscribers decrease in the early months of 2020… or did it increase? As I mentioned before, many businesses shifted their subscription offering to incorporate a free tier for a period of time. Technically speaking, these would be active subscribers. In this case, there may have been a massive positive impact on the number of subscribers. This can be a confusing and misleading metric to follow — an increase in subscribers but a decrease in MRR? The key piece here comes back to understanding the subscriber count and being able to break it down into its parts: paying subscribers and non-paying subscribers. It’s critical to think about these two segments separately. Paid subscribers need to be nurtured for retention. And what about free subscribers? If the hope is to one day move them to a paid plan, the next step will be nurturing them for conversion. Understanding the opportunity a discount will create I have to give credit to businesses that reacted quickly to the needs of their customers in the global pandemic. But there’s a bigger issue to consider. I ask founders daily if they understand what the opportunity, both present and future, their COVID plan of action creates. More times than not I get a single eyebrow raise… confusion, intrigue, and maybe a little excitement. When considering a COVID discount, it is also important to understand the long-term impact your actions will have on your brand. Paused subscriptions + Months free Assuming your business paused subscriptions for a specific period of time, have you factored in a way to examine your expected expansion revenue for when subscriptions become unpaused or return to their paid plans? This will result in an uptick in MRR but could also result in an uptick in churn. What’s your strategy for monitoring the effectiveness of a paused subscription? Do you have a quick and easy way to see what % of customers came back from their pause or didn’t cancel before their plan kicked back in? By using custom attributes or tags you’re able to look at these accounts after the fact and determine how these accounts acted — did they return to normal after their free months or did you lose them entirely? Discounted plans Understanding the impact of discounting is something I educate buyers on daily. Many businesses use discounting as a closing strategy. Discounting impacts MRR but the aggregate result of a discounting approach is often overlooked because it is more of an accounting-focussed metric. If you’re aware of the $$$ you did not bring in during COVID, you’re more aware of what you might need to make up if you hope to stay on target. Do you have a plan to make up the revenue that was lost through COVID discounting? In some (lucky) cases, discounting might be a way to take full advantage of the opportunity the pandemic is generating. On a recent webinar, we heard how SignEasy experienced strong lead generation during the outbreak of the pandemic. They used discounting as a way to maximize this opportunity — rather than let some customers go to a competitor. Freemium models Some businesses count free accounts as subscribers, others do not. This has been noted a few times now. Businesses that acted quickly and provided a free solution are eager to see the conversion of these customers to paid accounts — if something isn’t free forever, do customers keep using your product? It’s important to know how long a customer takes before upgrading and generating MRR for your business. Every crisis creates opportunities as well as threats Looking at your metrics with a critical eye will help you plan for the 2021 year ahead. There are opportunities nestled in the midst of your strategies: areas to understand churn, opportunities to earn business back, plans to convert free customers. COVID strategies, though reactionary and necessary, were experiments that still need to be measured and accounted for. If you’d like to look at any of these points together, book a call with me. I’d be happy to take you through it!

<sys> [INST] COVID Discounting: To Do or Not To Do [/INST] As a Senior AE with ChartMogul, my role is to take businesses through their revenue metrics within ChartMogul to help them gain an understanding of our product offering and to ideally also teach them something about their business using their metrics. Sometimes I like to call myself a revenue metrics mechanic. I pop the hood of SaaS businesses and figure out why the car is “smoking”. It’s the highlight of my job because I learn so much from my prospects. However, because we work with thousands of high performing SaaS businesses globally, we can also share insights and ideas from like-minded businesses. In a given sales conversation, I aim to share relevant commercial insight and focus on the real SaaS metrics at hand… instead of focusing on our product offering. Demos are much more productive for all involved parties if a prospect is willing to import their Stripe, Recurly, or Chargebee revenue data to a trial account, and we can review the charts together. The first chart that I have prospects navigate to is the MRR chart. There was a pretty constant theme in Q2 and Q3 of 2020 as prospects imported their data and navigated to their MRR chart: A sigh heard around the world. Many prospects are often quick to point out the dip in MRR in April/May 2020 followed by a sigh and someone on the call quickly backing up the sigh by saying, “Ah, COVID”. COVID… 2020 in a nutshell. Earlier this year, SaaS businesses around the globe reacted quickly to the global pandemic. These were “unprecedented times”, after all. A few very obvious things happened in the world of SaaS — we saw negative effects on businesses as they let people go in an attempt to become cashflow efficient in unpredictable times. Subscriptions businesses jumped at the opportunity to provide tools for the world to go more digital while also ensuring they were aware of budget cuts and financial uncertainty. Dropbox gave nonprofits and NGOs 6 months of free access. Mailchimp gave governments, schools, healthcare companies, and non-profits more features in their free accounts and upgraded them to their standard tier at no extra charge. Adobe offered free home access to its Creative Cloud for teachers and students. Dialpad gave customers in Japan and North America two months of access to Dialpad Pro for free and Zoom removed its 40 minute limit on free calls for students and teachers. (Check out this list of SaaS companies with COVID-19 discounts.) Companies of all sizes were trying to navigate the chaos and uncertainty оf the pandemic while providing some kind of support to their customers. But very often trying to offer that kind of support would create even more confusion. Considering offering a discount due to the pandemic is easy, but getting the details right is a lot harder. How do you figure out who deserves a discount? And, above all, what kind of discount do you offer? In my calls with SaaS founders, I’ve noticed several key billing and revenue trends when it comes to COVID-related discounting: Paused subscriptions Free months Discounted plans Freemium models Without a doubt, there’s a trend of decreased MRR for 2020 and early 2021, but there is some gold nestled in the midst of that data — it’s about understanding the impact of your business’ reaction plan and understanding where to look for the opportunity. Understanding the impact of a COVID discount Whatever method you choose to offer a COVID-related respite to your customers, there will be some effect on the performance of your business. Usually, this will be manifested in one (or more) of your core metrics. Typically, you’ll see it in one of the following: Monthly recurring revenue Regardless of the strategy your subscription business took, any of the four strategies will present an overarching drop in MRR. It’s important to note that MRR is much more of a complex metric than we give it credit for — the drop in monthly recurring revenue could have been caused by any of the three factors: lower net new sales, spikes in contraction revenue, or higher overarching churn. As we round the curve and head into 2021, it will be equally as important to look at reactivation MRR to understand if you’re starting to win customers back. Net MRR retention rate Looking at retention from a cohort perspective helps you look at your current customer base in a critical way. MRR Retention Rate = MRR of renewed subscriptions / Total MRR of subscriptions up for renewal. Tweet this quote It’s highly probable that MRR retention dropped in the midst of COVID, considering that renewals could have been negatively impacted by the economic circumstances of your paying customers. As you reflect on your strategies for retention in the midst of COVID, it’s important to understand how much revenue you managed to keep in the door, especially if you put practices in place to keep your customers from churning. Churn rate and Segmented churn rate Churn is not unique to COVID — SaaS executives have long used churn as a barometer for health. At the highest level, understanding your company churn rate through the pandemic was and is paramount. This is straightforward: was there an uptick in your churn percentage? The idea of segmentation is something that we highlight to all prospective users of ChartMogul. It became essential during COVID. Understanding the who’s, how’s and what’s of churn matter — if your business took to one of the strategies I mentioned above, it’s paramount to be able to compare between COVID-related churn and other more average reasons for churn. In April of 2020 our team took to our customer list and determined, based on a small set of criteria, if we suspected the customer could be negatively (or positively) impacted by COVID — in other words, which accounts were potentially at risk. In doing this, we were able to then analyze churn month-over-month throughout Q2 and Q3 to determine if our predictions were accurate. We were also able to measure the success of our practices to prevent churn. Subscriber count The subscriber count is something that you can look at from a couple of angles. Simply put, did your business see the number of net new subscribers decrease in the early months of 2020… or did it increase? As I mentioned before, many businesses shifted their subscription offering to incorporate a free tier for a period of time. Technically speaking, these would be active subscribers. In this case, there may have been a massive positive impact on the number of subscribers. This can be a confusing and misleading metric to follow — an increase in subscribers but a decrease in MRR? The key piece here comes back to understanding the subscriber count and being able to break it down into its parts: paying subscribers and non-paying subscribers. It’s critical to think about these two segments separately. Paid subscribers need to be nurtured for retention. And what about free subscribers? If the hope is to one day move them to a paid plan, the next step will be nurturing them for conversion. Understanding the opportunity a discount will create I have to give credit to businesses that reacted quickly to the needs of their customers in the global pandemic. But there’s a bigger issue to consider. I ask founders daily if they understand what the opportunity, both present and future, their COVID plan of action creates. More times than not I get a single eyebrow raise… confusion, intrigue, and maybe a little excitement. When considering a COVID discount, it is also important to understand the long-term impact your actions will have on your brand. Paused subscriptions + Months free Assuming your business paused subscriptions for a specific period of time, have you factored in a way to examine your expected expansion revenue for when subscriptions become unpaused or return to their paid plans? This will result in an uptick in MRR but could also result in an uptick in churn. What’s your strategy for monitoring the effectiveness of a paused subscription? Do you have a quick and easy way to see what % of customers came back from their pause or didn’t cancel before their plan kicked back in? By using custom attributes or tags you’re able to look at these accounts after the fact and determine how these accounts acted — did they return to normal after their free months or did you lose them entirely? Discounted plans Understanding the impact of discounting is something I educate buyers on daily. Many businesses use discounting as a closing strategy. Discounting impacts MRR but the aggregate result of a discounting approach is often overlooked because it is more of an accounting-focussed metric. If you’re aware of the $$$ you did not bring in during COVID, you’re more aware of what you might need to make up if you hope to stay on target. Do you have a plan to make up the revenue that was lost through COVID discounting? In some (lucky) cases, discounting might be a way to take full advantage of the opportunity the pandemic is generating. On a recent webinar, we heard how SignEasy experienced strong lead generation during the outbreak of the pandemic. They used discounting as a way to maximize this opportunity — rather than let some customers go to a competitor. Freemium models Some businesses count free accounts as subscribers, others do not. This has been noted a few times now. Businesses that acted quickly and provided a free solution are eager to see the conversion of these customers to paid accounts — if something isn’t free forever, do customers keep using your product? It’s important to know how long a customer takes before upgrading and generating MRR for your business. Every crisis creates opportunities as well as threats Looking at your metrics with a critical eye will help you plan for the 2021 year ahead. There are opportunities nestled in the midst of your strategies: areas to understand churn, opportunities to earn business back, plans to convert free customers. COVID strategies, though reactionary and necessary, were experiments that still need to be measured and accounted for. If you’d like to look at any of these points together, book a call with me. I’d be happy to take you through it! </sys

What to do when your SaaS pricing is WRONG!. The stakes are high, and if you didn’t guess right the first time on your pricing, you could be driving away customers or scrambling to make a profit. It’s okay, really. Finding the right price point is challenging for all of us. Let’s look at a few of the ways you may have gotten off track from the beginning. “What’s a price like you doing on a product like this?” 1. You undervalued your product I can’t tell you how many times I’ve heard this one. Think of it this way: If you can offer more value than your competitors and offer a slightly lower price point – you win! That “lower” price point doesn’t need to be the rock bottom. But, if you offer much more than your competitors, then you have earned the right to charge more. Another factor that often influences our pricing decisions is if producing the product seemed “easy” to create, it’s tempting to price low because you don’t think anything easy could possibly be worth more. Here’s a more productive (and lucrative) perspective: How much value does your product offer the end user? If it took you 5 minutes to solve someone’s biggest problem in life, then good for you! Charge them top dollar and they’ll be delighted to pay. 2. Not so much a strategy as an educated guess… Often, we try to find competitors and base our prices off of theirs. This is not a terrible way to start, but keep in mind that you don’t know all the facts of that price point. What is their overhead? What does their business model look like? Is that price point even working for them? But more importantly, if you just copy your competitor’s pricing, you’ve lost an opportunity to differentiate yourself. 3. You’re just trying to cover your costs and have a decent profit margin I hear you. I do. It makes a whole lot of sense to create your price using a formula of how much you spent to create it, how much it takes to produce and market it, and how much it costs to pay everyone involved (including yourself). And then you may have shareholders you’d like to impress with healthy returns on their investments. Here’s the problem: your customers don’t give a flying fig about any of that. You have to find the price your market is willing to pay, and if that doesn’t cover your costs, then you’ve got some adjustments to make. 4. You tried “Freemium” and now you want out Freemium can work great for some, but absolutely decimate others. Here’s the problem with Freemium: it doesn’t actually give you any indication of interest in your product. All it does is show you that people like things that are free. And that’s not news. Moving from Free to paid will require very gentle handling to ensure you don’t alienate your current freeloader user base. Back to black Let’s talk brass tacks here friends. When you raise your prices, you’ll anger customers. But, there are crafty ways you can get them to spend more money without directly saying “Yes, I’d like you to pay more for exactly what you’re getting now.” You have to change the offering by giving them access to upgrades, add-ons, or some other form of added value that doesn’t cost much for you, but will justify a rise in price for them. Consider: Creating a new edition, a bundle of new features, or a package with value adds can be a graceful way to increase your prices moving forward without alienating your original users. And, of course, you should offer (but not force) your current users the chance to upgrade. Add-ons. If you’ve played Sims 3 (EA Games) recently, you’ll notice that there are some really cool-looking new pieces of furniture available (the furniture the game comes with is looking a little old-fashioned). But each of these décor items costs Sim Points (which translates to real dollars and cents). If you want a more fun gaming experience, you’ll pay for it. And it works. Facebook games use a similar model, like the infamous FarmVille that hooks you in and then charges money if you want to make your farm look as cool as your friends’ farms. Why not take a page from the game producer’s playbook? Raising prices for new customers. Your old customers will be happy, and your new customers won’t know the difference. Want to read more on SaaS Pricing, and get some inspiration from some of the most successful SaaS businesses? Check out this in-depth analysis of the top SaaS pricing pages. 3 values to keep in mind Keep your current customers happy. Your first thought might be to raise prices on them, but this almost never works out. Price to keep conversion rates high. This will require going back and figuring out your pricing strategy from scratch. Tip: your pricing strategy and your marketing strategy should be hammered out together. They’re more connected than most people think. Introduce your raised rates as an opportunity to add value – and you’ll sell more seats! Don’t try to do everything at once Once you’ve figured out that you’ve made a mistake, it’s natural to want to fix it fast. But these things take time – weeks or months. You’ll want to allow enough time to let your customers know what’s coming and reassure them that they’ll still be happy. You’ll also want to build up anticipation for your new offer/bundle/add-ons with marketing campaigns. Changing your price structure should be a positive move for all involved. So take the time to train your customer service and customer success teams on how to talk to new and old customers about the changes, and help everyone become not only comfortable with, but excited about what’s to come. Follow and share New on @ChartMogul: What to do when your #SaaS pricing is WRONG! by @NikkiElizDemere http://t.co/6HqZ15R2oK pic.twitter.com/k6qPFxy4i1 — ChartMogul (@ChartMogul) September 9, 2015

[INST] What to do when your SaaS pricing is WRONG! [/INST]

The stakes are high, and if you didn’t guess right the first time on your pricing, you could be driving away customers or scrambling to make a profit. It’s okay, really. Finding the right price point is challenging for all of us. Let’s look at a few of the ways you may have gotten off track from the beginning. “What’s a price like you doing on a product like this?” 1. You undervalued your product I can’t tell you how many times I’ve heard this one. Think of it this way: If you can offer more value than your competitors and offer a slightly lower price point – you win! That “lower” price point doesn’t need to be the rock bottom. But, if you offer much more than your competitors, then you have earned the right to charge more. Another factor that often influences our pricing decisions is if producing the product seemed “easy” to create, it’s tempting to price low because you don’t think anything easy could possibly be worth more. Here’s a more productive (and lucrative) perspective: How much value does your product offer the end user? If it took you 5 minutes to solve someone’s biggest problem in life, then good for you! Charge them top dollar and they’ll be delighted to pay. 2. Not so much a strategy as an educated guess… Often, we try to find competitors and base our prices off of theirs. This is not a terrible way to start, but keep in mind that you don’t know all the facts of that price point. What is their overhead? What does their business model look like? Is that price point even working for them? But more importantly, if you just copy your competitor’s pricing, you’ve lost an opportunity to differentiate yourself. 3. You’re just trying to cover your costs and have a decent profit margin I hear you. I do. It makes a whole lot of sense to create your price using a formula of how much you spent to create it, how much it takes to produce and market it, and how much it costs to pay everyone involved (including yourself). And then you may have shareholders you’d like to impress with healthy returns on their investments. Here’s the problem: your customers don’t give a flying fig about any of that. You have to find the price your market is willing to pay, and if that doesn’t cover your costs, then you’ve got some adjustments to make. 4. You tried “Freemium” and now you want out Freemium can work great for some, but absolutely decimate others. Here’s the problem with Freemium: it doesn’t actually give you any indication of interest in your product. All it does is show you that people like things that are free. And that’s not news. Moving from Free to paid will require very gentle handling to ensure you don’t alienate your current freeloader user base. Back to black Let’s talk brass tacks here friends. When you raise your prices, you’ll anger customers. But, there are crafty ways you can get them to spend more money without directly saying “Yes, I’d like you to pay more for exactly what you’re getting now.” You have to change the offering by giving them access to upgrades, add-ons, or some other form of added value that doesn’t cost much for you, but will justify a rise in price for them. Consider: Creating a new edition, a bundle of new features, or a package with value adds can be a graceful way to increase your prices moving forward without alienating your original users. And, of course, you should offer (but not force) your current users the chance to upgrade. Add-ons. If you’ve played Sims 3 (EA Games) recently, you’ll notice that there are some really cool-looking new pieces of furniture available (the furniture the game comes with is looking a little old-fashioned). But each of these décor items costs Sim Points (which translates to real dollars and cents). If you want a more fun gaming experience, you’ll pay for it. And it works. Facebook games use a similar model, like the infamous FarmVille that hooks you in and then charges money if you want to make your farm look as cool as your friends’ farms. Why not take a page from the game producer’s playbook? Raising prices for new customers. Your old customers will be happy, and your new customers won’t know the difference. Want to read more on SaaS Pricing, and get some inspiration from some of the most successful SaaS businesses? Check out this in-depth analysis of the top SaaS pricing pages. 3 values to keep in mind Keep your current customers happy. Your first thought might be to raise prices on them, but this almost never works out. Price to keep conversion rates high. This will require going back and figuring out your pricing strategy from scratch. Tip: your pricing strategy and your marketing strategy should be hammered out together. They’re more connected than most people think. Introduce your raised rates as an opportunity to add value – and you’ll sell more seats! Don’t try to do everything at once Once you’ve figured out that you’ve made a mistake, it’s natural to want to fix it fast. But these things take time – weeks or months. You’ll want to allow enough time to let your customers know what’s coming and reassure them that they’ll still be happy. You’ll also want to build up anticipation for your new offer/bundle/add-ons with marketing campaigns. Changing your price structure should be a positive move for all involved. So take the time to train your customer service and customer success teams on how to talk to new and old customers about the changes, and help everyone become not only comfortable with, but excited about what’s to come. Follow and share New on @ChartMogul: What to do when your #SaaS pricing is WRONG! by @NikkiElizDemere http://t.co/6HqZ15R2oK pic.twitter.com/k6qPFxy4i1 — ChartMogul (@ChartMogul) September 9, 2015

<sys> [INST] What to do when your SaaS pricing is WRONG! [/INST] The stakes are high, and if you didn’t guess right the first time on your pricing, you could be driving away customers or scrambling to make a profit. It’s okay, really. Finding the right price point is challenging for all of us. Let’s look at a few of the ways you may have gotten off track from the beginning. “What’s a price like you doing on a product like this?” 1. You undervalued your product I can’t tell you how many times I’ve heard this one. Think of it this way: If you can offer more value than your competitors and offer a slightly lower price point – you win! That “lower” price point doesn’t need to be the rock bottom. But, if you offer much more than your competitors, then you have earned the right to charge more. Another factor that often influences our pricing decisions is if producing the product seemed “easy” to create, it’s tempting to price low because you don’t think anything easy could possibly be worth more. Here’s a more productive (and lucrative) perspective: How much value does your product offer the end user? If it took you 5 minutes to solve someone’s biggest problem in life, then good for you! Charge them top dollar and they’ll be delighted to pay. 2. Not so much a strategy as an educated guess… Often, we try to find competitors and base our prices off of theirs. This is not a terrible way to start, but keep in mind that you don’t know all the facts of that price point. What is their overhead? What does their business model look like? Is that price point even working for them? But more importantly, if you just copy your competitor’s pricing, you’ve lost an opportunity to differentiate yourself. 3. You’re just trying to cover your costs and have a decent profit margin I hear you. I do. It makes a whole lot of sense to create your price using a formula of how much you spent to create it, how much it takes to produce and market it, and how much it costs to pay everyone involved (including yourself). And then you may have shareholders you’d like to impress with healthy returns on their investments. Here’s the problem: your customers don’t give a flying fig about any of that. You have to find the price your market is willing to pay, and if that doesn’t cover your costs, then you’ve got some adjustments to make. 4. You tried “Freemium” and now you want out Freemium can work great for some, but absolutely decimate others. Here’s the problem with Freemium: it doesn’t actually give you any indication of interest in your product. All it does is show you that people like things that are free. And that’s not news. Moving from Free to paid will require very gentle handling to ensure you don’t alienate your current freeloader user base. Back to black Let’s talk brass tacks here friends. When you raise your prices, you’ll anger customers. But, there are crafty ways you can get them to spend more money without directly saying “Yes, I’d like you to pay more for exactly what you’re getting now.” You have to change the offering by giving them access to upgrades, add-ons, or some other form of added value that doesn’t cost much for you, but will justify a rise in price for them. Consider: Creating a new edition, a bundle of new features, or a package with value adds can be a graceful way to increase your prices moving forward without alienating your original users. And, of course, you should offer (but not force) your current users the chance to upgrade. Add-ons. If you’ve played Sims 3 (EA Games) recently, you’ll notice that there are some really cool-looking new pieces of furniture available (the furniture the game comes with is looking a little old-fashioned). But each of these décor items costs Sim Points (which translates to real dollars and cents). If you want a more fun gaming experience, you’ll pay for it. And it works. Facebook games use a similar model, like the infamous FarmVille that hooks you in and then charges money if you want to make your farm look as cool as your friends’ farms. Why not take a page from the game producer’s playbook? Raising prices for new customers. Your old customers will be happy, and your new customers won’t know the difference. Want to read more on SaaS Pricing, and get some inspiration from some of the most successful SaaS businesses? Check out this in-depth analysis of the top SaaS pricing pages. 3 values to keep in mind Keep your current customers happy. Your first thought might be to raise prices on them, but this almost never works out. Price to keep conversion rates high. This will require going back and figuring out your pricing strategy from scratch. Tip: your pricing strategy and your marketing strategy should be hammered out together. They’re more connected than most people think. Introduce your raised rates as an opportunity to add value – and you’ll sell more seats! Don’t try to do everything at once Once you’ve figured out that you’ve made a mistake, it’s natural to want to fix it fast. But these things take time – weeks or months. You’ll want to allow enough time to let your customers know what’s coming and reassure them that they’ll still be happy. You’ll also want to build up anticipation for your new offer/bundle/add-ons with marketing campaigns. Changing your price structure should be a positive move for all involved. So take the time to train your customer service and customer success teams on how to talk to new and old customers about the changes, and help everyone become not only comfortable with, but excited about what’s to come. Follow and share New on @ChartMogul: What to do when your #SaaS pricing is WRONG! by @NikkiElizDemere http://t.co/6HqZ15R2oK pic.twitter.com/k6qPFxy4i1 — ChartMogul (@ChartMogul) September 9, 2015 </sys

Building a Successful SaaS Partnership Program with Recurly’s Jenna Wyer. The concept of partnerships exists at most early stage startups, but often in an unstructured and unproductive format. Jenna Wyer, VP of Partnerships and Head of Payments at Recurly, joins me on this week’s episode of SaaS Open Mic. We discuss what it takes to build a successful partnership program. Jenna has an impressive background in partnerships and payments from her time with Recurly, Spreedly, and as the founding VP of Sales at Braintree. This means she’s no stranger to navigating relationships with payment giants like Stripe and the intricacies of how complex software works together. Our interview covers four main topics: Partnerships from a revenue generation perspective Partnerships from a lead generation and brand perspective Where partnerships go wrong Resources for partnership strategy and inspiration Listen for golden soundbites like: You can also adopt a more proactive approach to partnerships — especially if there’s a driving strategic need or project that requires partner support. For example, imagine your sales team wants to enter a new vertical. What partnerships, if any, are table stakes? Which can help you build credibility and pipeline? Jenna Wyer, Recurly You can find the podcast recording here and in your favorite players. Don’t forget to like and subscribe.

[INST] Building a Successful SaaS Partnership Program with Recurly’s Jenna Wyer [/INST]

The concept of partnerships exists at most early stage startups, but often in an unstructured and unproductive format. Jenna Wyer, VP of Partnerships and Head of Payments at Recurly, joins me on this week’s episode of SaaS Open Mic. We discuss what it takes to build a successful partnership program. Jenna has an impressive background in partnerships and payments from her time with Recurly, Spreedly, and as the founding VP of Sales at Braintree. This means she’s no stranger to navigating relationships with payment giants like Stripe and the intricacies of how complex software works together. Our interview covers four main topics: Partnerships from a revenue generation perspective Partnerships from a lead generation and brand perspective Where partnerships go wrong Resources for partnership strategy and inspiration Listen for golden soundbites like: You can also adopt a more proactive approach to partnerships — especially if there’s a driving strategic need or project that requires partner support. For example, imagine your sales team wants to enter a new vertical. What partnerships, if any, are table stakes? Which can help you build credibility and pipeline? Jenna Wyer, Recurly You can find the podcast recording here and in your favorite players. Don’t forget to like and subscribe.

<sys> [INST] Building a Successful SaaS Partnership Program with Recurly’s Jenna Wyer [/INST] The concept of partnerships exists at most early stage startups, but often in an unstructured and unproductive format. Jenna Wyer, VP of Partnerships and Head of Payments at Recurly, joins me on this week’s episode of SaaS Open Mic. We discuss what it takes to build a successful partnership program. Jenna has an impressive background in partnerships and payments from her time with Recurly, Spreedly, and as the founding VP of Sales at Braintree. This means she’s no stranger to navigating relationships with payment giants like Stripe and the intricacies of how complex software works together. Our interview covers four main topics: Partnerships from a revenue generation perspective Partnerships from a lead generation and brand perspective Where partnerships go wrong Resources for partnership strategy and inspiration Listen for golden soundbites like: You can also adopt a more proactive approach to partnerships — especially if there’s a driving strategic need or project that requires partner support. For example, imagine your sales team wants to enter a new vertical. What partnerships, if any, are table stakes? Which can help you build credibility and pipeline? Jenna Wyer, Recurly You can find the podcast recording here and in your favorite players. Don’t forget to like and subscribe. </sys

Sync Your ChartMogul Data with Amazon S3, Google Cloud Storage, or Azure Blob Storage. ChartMogul is only one part of a larger ecosystem of tools an organization with recurring revenue uses. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, play an essential role in understanding and growing your business. That’s why many organizations send ChartMogul data to a warehouse, combine it with other data sets, and analyze it in aggregate. There are several ways to export data out of ChartMogul. You can export your MRR movements and customers as a CSV, and for a programmatic approach, using the Metrics API. However, CSV exports might prove inefficient, and using the API requires engineering resources. For that reason, we’re launching several new direct integrations that let you synchronize your ChartMogul data directly into your Amazon Web Services, Google Cloud Platform, or Microsoft Azure account. You can export the following data points to your data warehouse: MRR movements Customers Custom attributes Tags Configuring a destination in ChartMogul takes only a few minutes. Configure a destination in ChartMogul Create an S3 bucket, Google Storage bucket or a Blob container for ChartMogul and add it as a destination. Follow the instructions in these step-by-step guides to get started: Configuring Amazon S3 as a destination Configuring Google Cloud Storage as a destination Configuring Azure Blob Storage as a destination To add a new destination in ChartMogul navigate to Data Platform > Data Output > Destinations. Export your data to predict churn and generate forecasts Combining revenue, product, CRM, and other data sets uncovers powerful insights. For example, are users that exhibited decreased usage in the product more prone to churn? Looking into your revenue and product data in aggregate will allow you to identify those users, and create a plan to prevent churn. On the other hand, an increase in usage or user count can be indicative of MRR expansion and will allow you to generate forecasts. What destinations should we build next? We’re excited to release Amazon S3, Google Cloud Storage, and Azure Blob Storage as the first of many direct data output integrations to come. What integrations are you looking to use? Another data warehouse like Snowflake? A customer communications platform like Intercom? Or a CRM like Salesforce or HubSpot? Tell us what is most important to you! Write to our success team, mention us in a tweet or schedule a call with Katarina, the PM working on destinations.

[INST] Sync Your ChartMogul Data with Amazon S3, Google Cloud Storage, or Azure Blob Storage [/INST]

ChartMogul is only one part of a larger ecosystem of tools an organization with recurring revenue uses. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, play an essential role in understanding and growing your business. That’s why many organizations send ChartMogul data to a warehouse, combine it with other data sets, and analyze it in aggregate. There are several ways to export data out of ChartMogul. You can export your MRR movements and customers as a CSV, and for a programmatic approach, using the Metrics API. However, CSV exports might prove inefficient, and using the API requires engineering resources. For that reason, we’re launching several new direct integrations that let you synchronize your ChartMogul data directly into your Amazon Web Services, Google Cloud Platform, or Microsoft Azure account. You can export the following data points to your data warehouse: MRR movements Customers Custom attributes Tags Configuring a destination in ChartMogul takes only a few minutes. Configure a destination in ChartMogul Create an S3 bucket, Google Storage bucket or a Blob container for ChartMogul and add it as a destination. Follow the instructions in these step-by-step guides to get started: Configuring Amazon S3 as a destination Configuring Google Cloud Storage as a destination Configuring Azure Blob Storage as a destination To add a new destination in ChartMogul navigate to Data Platform > Data Output > Destinations. Export your data to predict churn and generate forecasts Combining revenue, product, CRM, and other data sets uncovers powerful insights. For example, are users that exhibited decreased usage in the product more prone to churn? Looking into your revenue and product data in aggregate will allow you to identify those users, and create a plan to prevent churn. On the other hand, an increase in usage or user count can be indicative of MRR expansion and will allow you to generate forecasts. What destinations should we build next? We’re excited to release Amazon S3, Google Cloud Storage, and Azure Blob Storage as the first of many direct data output integrations to come. What integrations are you looking to use? Another data warehouse like Snowflake? A customer communications platform like Intercom? Or a CRM like Salesforce or HubSpot? Tell us what is most important to you! Write to our success team, mention us in a tweet or schedule a call with Katarina, the PM working on destinations.

<sys> [INST] Sync Your ChartMogul Data with Amazon S3, Google Cloud Storage, or Azure Blob Storage [/INST] ChartMogul is only one part of a larger ecosystem of tools an organization with recurring revenue uses. Product analytics, customer data or user feedback from your CRM, as well as revenue analytics, play an essential role in understanding and growing your business. That’s why many organizations send ChartMogul data to a warehouse, combine it with other data sets, and analyze it in aggregate. There are several ways to export data out of ChartMogul. You can export your MRR movements and customers as a CSV, and for a programmatic approach, using the Metrics API. However, CSV exports might prove inefficient, and using the API requires engineering resources. For that reason, we’re launching several new direct integrations that let you synchronize your ChartMogul data directly into your Amazon Web Services, Google Cloud Platform, or Microsoft Azure account. You can export the following data points to your data warehouse: MRR movements Customers Custom attributes Tags Configuring a destination in ChartMogul takes only a few minutes. Configure a destination in ChartMogul Create an S3 bucket, Google Storage bucket or a Blob container for ChartMogul and add it as a destination. Follow the instructions in these step-by-step guides to get started: Configuring Amazon S3 as a destination Configuring Google Cloud Storage as a destination Configuring Azure Blob Storage as a destination To add a new destination in ChartMogul navigate to Data Platform > Data Output > Destinations. Export your data to predict churn and generate forecasts Combining revenue, product, CRM, and other data sets uncovers powerful insights. For example, are users that exhibited decreased usage in the product more prone to churn? Looking into your revenue and product data in aggregate will allow you to identify those users, and create a plan to prevent churn. On the other hand, an increase in usage or user count can be indicative of MRR expansion and will allow you to generate forecasts. What destinations should we build next? We’re excited to release Amazon S3, Google Cloud Storage, and Azure Blob Storage as the first of many direct data output integrations to come. What integrations are you looking to use? Another data warehouse like Snowflake? A customer communications platform like Intercom? Or a CRM like Salesforce or HubSpot? Tell us what is most important to you! Write to our success team, mention us in a tweet or schedule a call with Katarina, the PM working on destinations. </sys

Growth through retention? Berlin SaaS leaders weigh in. On March 21, a variety of Berliner SaaS folks came together for the first Berlin SaaS Meetup, hosted by SaaScribe and SaaStock, and sponsored by Point Nine Capital. We’d say it was a success! Along with plenty of time for networking and some tasty snacks, the meetup featured a panel discussion with three local Berlin founders: Per Fragemann of Small Improvements Niklas Jansen of Blinkist ChartMogul’s very own Nick Franklin and Point Nine Capital co-founder Pawl Chudzinski, who led with questions and later opened the floor to the audience. Below is a recap of the panel discussion on the meetup’s theme: Growth through retention. Why is it important? What are the challenges? How will you improve it? Plenty nuggets of wisdom herein, as well as cool insight into local Berlin startups and what’s on the mind of the Berlin SaaS community. “Investors like retention, but they like growth more.” – Niklas Jansen But how are the two related? “At some point, expansion business is more lucrative than new business,” said Nick Franklin. “50,000 customers each upgrading a little bit is worth more, and a lot easier to attain, than 50,000 brand new customers.” The key to getting to that point, where expansion biz is your growth engine, is to retain your customers and let that customer base compound over time. This is growth through retention. Though customer acquisition is usually the first thing on an early startup’s agenda, the founders agreed that retention becomes more and more critical as your customer count rises. “Retention drives everything,” said Jansen. Including customer lifetime value and word-of-mouth. In fact, Jansen shared that at Blinkist, a 10% improvement in retention improved their LTV by 30%! That is huge! (If you want to brush up on your LTV knowledge, check out the Ultimate Guide to SaaS Customer LTV) The founders monitor retention slightly differently. Small Improvements and Blinkist look mostly at Customer # churn, while ChartMogul follows revenue churn. But when it comes to retention challenges and solutions, there was a lot of commonality. Let’s dive in. What are some retention-related challenges that you’ve faced? Incomplete customer onboarding A huge, and common, cause of churn. It could be a customer who is fully signed up on a paid plan and just didn’t onboard properly — who doesn’t take full advantage of the product and therefore doesn’t see its full value — or someone on a trial plan who has stalled out halfway through. Though both are customer success issues, each scenario requires its own approach. When asked if there are any early signals that a customer would churn, Jansen noted that for Blinkist, the longer the period between signup and conversion, the higher the chances that customer would churn pretty quickly. This is motivation to shorten the conversion rate and reengage stalled users. (For some quick strategies for how to tackle mid-trial stall-outs, check out our SaaS Q&A.) Tracking activity adequately So that you can learn actionable things from it. This includes both customer activity and in-house activity. Customer activity here is user activity in the app. Blinkist used Customer Activity Rate, which was basically “# of customers who were active in a certain period of time / total # of customers”. But without segmentation — without dialing down to see what kind of customer was active, or which activity was performed, or how frequently — it can be hard to come away with a strategy for improving your customers’ engagement with the product. And in turn improving your retention. In-house tracking consists of any efforts to stimulate user activity — to proactively reengage customers. At Blinkist, they tried small experiments to reach out to and reengage their customers. “The problem was we didn’t pay attention to channel versus tactic,” Jansen said. And members of the Blinkist team performed these experiments in silos. Email, in-app notifications, push notifications… all worth trying, but without tracking their effectiveness and coordinating across internal teams, the experiments weren’t as valuable as they could have been. The product has its own timeline. “The product solves almost everything.” – Nick Franklin Sometimes improving retention is just a matter of improving the product. But the rate at which you do this can be a blocker. Niklas Jansen explained the slow feedback loop of product changes at Blinkist: waiting to see how product improvements actually impact the customer, their satisfaction, and then overall retention. It can take a while. You want to move faster, but you need to improve slowly — make incremental changes to the product — so as not to confuse your existing customer base. “Sometimes there’s a conflict of working on the product to serve a market that’s emerging, that will be ready two years from now, and focusing on keeping an existing customer base.” – Per Fragemann Every SaaS company wants to keep up with innovation and evolve their product. So in this light, the conflict can become a question of resources. Where do you direct your dev team? Do you invest in engineering or customer success? Some challenges can be inherent to your customer’s industry. For example, Small Improvements sells software to HR professionals within large companies. HR teams can have high turnover — which means Small Improvements’ point-of-contact, the decision maker who bought their product, leaves the customer company. And the replacement, unfamiliar with SI’s product, often has their own ideas about what software to use. Thanks to Innovation Nest VC (@innovationnest) for tweeting this live-action iPhone shot of the esteemed panel. What are your plans for managing retention moving forward? Focusing on high-value customers When it comes to managing retention proactively, it makes sense to focus on high-value customers. Both Franklin and Fragemann mentioned this. Fragemann talked about creating a “VIP group” for key customers. The strategy here would be manually reaching out to them, sharing product roadmaps sooner and betas more aggressively, essentially nurturing a close relationship where the customer feels full buy-in with the product. Of course this isn’t scalable with all customers or feasible for all companies — where it works, it’s a strategy for only the customers who would have the greatest negative impact on revenue churn. Specializing Customer Success Understand the primary user of your product and their role in their company, and tailor your customer success to them. Nick explained how ChartMogul customers may see more value if their own developers get involved and use the product. So ChartMogul is looking to hire a customer success team member for engineers, and also planning to create customer education (libraries, tutorials, etc.) specifically for developers. Using data to predict churn Blinkist wants to use data from their product to inform user experience, improve their conversion funnel, and predict churn. “So far [when customers cancel] we know what happened, and we sometimes know why it happened — and now we want to know when it’s going to happen,” said Jansen. Spin-off discussions: Questions from the audience resulted in some cool takeaways Customer acquisition How did you go from 0 customers to your first 50? Small Improvements: First customer was an old employer, and from there went by word-of-mouth. It took one year for first the 2 customers, another year for the next 8 customers. ChartMogul: Beta for 3 months garnered 200-300 signups. PointNine introduced ChartMogul to their portfolio of other SaaS businesses — and Nick had a personal network from working in SaaS before — so word-of-mouth played a role. Also posted on ProductHunt. Blinkist: 50 customers on first day! Back in 2013, pre-ProductHunt, they used performance marketing, content, and PR. What are your current customer acquisition methods? Small Improvements: Word-of-mouth ChartMogul: Word-of-mouth and content marketing Blinkist: Performance marketing Pricing How did you come up with your initial pricing? All three said it was pretty random. Small Improvements: Priced way too cheap. Advice? “Think about how many customers you want and can handle, and price for that.” ChartMogul: Checked competition’s prices. Then also offered a cheaper plan for the tiny startups. Advice? “Most SaaS companies undercharge. Charge as much as you can, but make sure you’re still providing more value than you charge.” When you want to change your pricing scheme, what do you do about your existing customers? All three said to grandfather in existing customers so that they continue to pay their original price. The panelists didn’t miss an opportunity to plug their company’s open positions, either! If you’re in the market, check out the Careers pages for Small Improvements, Blinkist, and ChartMogul. All in all, excellent kickoff to Berlin SaaS meetups. We look forward to the next one! Share and follow! Berlin #SaaS leaders weigh in on growth through retention https://t.co/TBTnVYWgYN @saascribe @SaaStock @PointNineCap pic.twitter.com/969JcZmNzQ — ChartMogul (@ChartMogul) March 23, 2016

[INST] Growth through retention? Berlin SaaS leaders weigh in [/INST]

On March 21, a variety of Berliner SaaS folks came together for the first Berlin SaaS Meetup, hosted by SaaScribe and SaaStock, and sponsored by Point Nine Capital. We’d say it was a success! Along with plenty of time for networking and some tasty snacks, the meetup featured a panel discussion with three local Berlin founders: Per Fragemann of Small Improvements Niklas Jansen of Blinkist ChartMogul’s very own Nick Franklin and Point Nine Capital co-founder Pawl Chudzinski, who led with questions and later opened the floor to the audience. Below is a recap of the panel discussion on the meetup’s theme: Growth through retention. Why is it important? What are the challenges? How will you improve it? Plenty nuggets of wisdom herein, as well as cool insight into local Berlin startups and what’s on the mind of the Berlin SaaS community. “Investors like retention, but they like growth more.” – Niklas Jansen But how are the two related? “At some point, expansion business is more lucrative than new business,” said Nick Franklin. “50,000 customers each upgrading a little bit is worth more, and a lot easier to attain, than 50,000 brand new customers.” The key to getting to that point, where expansion biz is your growth engine, is to retain your customers and let that customer base compound over time. This is growth through retention. Though customer acquisition is usually the first thing on an early startup’s agenda, the founders agreed that retention becomes more and more critical as your customer count rises. “Retention drives everything,” said Jansen. Including customer lifetime value and word-of-mouth. In fact, Jansen shared that at Blinkist, a 10% improvement in retention improved their LTV by 30%! That is huge! (If you want to brush up on your LTV knowledge, check out the Ultimate Guide to SaaS Customer LTV) The founders monitor retention slightly differently. Small Improvements and Blinkist look mostly at Customer # churn, while ChartMogul follows revenue churn. But when it comes to retention challenges and solutions, there was a lot of commonality. Let’s dive in. What are some retention-related challenges that you’ve faced? Incomplete customer onboarding A huge, and common, cause of churn. It could be a customer who is fully signed up on a paid plan and just didn’t onboard properly — who doesn’t take full advantage of the product and therefore doesn’t see its full value — or someone on a trial plan who has stalled out halfway through. Though both are customer success issues, each scenario requires its own approach. When asked if there are any early signals that a customer would churn, Jansen noted that for Blinkist, the longer the period between signup and conversion, the higher the chances that customer would churn pretty quickly. This is motivation to shorten the conversion rate and reengage stalled users. (For some quick strategies for how to tackle mid-trial stall-outs, check out our SaaS Q&A.) Tracking activity adequately So that you can learn actionable things from it. This includes both customer activity and in-house activity. Customer activity here is user activity in the app. Blinkist used Customer Activity Rate, which was basically “# of customers who were active in a certain period of time / total # of customers”. But without segmentation — without dialing down to see what kind of customer was active, or which activity was performed, or how frequently — it can be hard to come away with a strategy for improving your customers’ engagement with the product. And in turn improving your retention. In-house tracking consists of any efforts to stimulate user activity — to proactively reengage customers. At Blinkist, they tried small experiments to reach out to and reengage their customers. “The problem was we didn’t pay attention to channel versus tactic,” Jansen said. And members of the Blinkist team performed these experiments in silos. Email, in-app notifications, push notifications… all worth trying, but without tracking their effectiveness and coordinating across internal teams, the experiments weren’t as valuable as they could have been. The product has its own timeline. “The product solves almost everything.” – Nick Franklin Sometimes improving retention is just a matter of improving the product. But the rate at which you do this can be a blocker. Niklas Jansen explained the slow feedback loop of product changes at Blinkist: waiting to see how product improvements actually impact the customer, their satisfaction, and then overall retention. It can take a while. You want to move faster, but you need to improve slowly — make incremental changes to the product — so as not to confuse your existing customer base. “Sometimes there’s a conflict of working on the product to serve a market that’s emerging, that will be ready two years from now, and focusing on keeping an existing customer base.” – Per Fragemann Every SaaS company wants to keep up with innovation and evolve their product. So in this light, the conflict can become a question of resources. Where do you direct your dev team? Do you invest in engineering or customer success? Some challenges can be inherent to your customer’s industry. For example, Small Improvements sells software to HR professionals within large companies. HR teams can have high turnover — which means Small Improvements’ point-of-contact, the decision maker who bought their product, leaves the customer company. And the replacement, unfamiliar with SI’s product, often has their own ideas about what software to use. Thanks to Innovation Nest VC (@innovationnest) for tweeting this live-action iPhone shot of the esteemed panel. What are your plans for managing retention moving forward? Focusing on high-value customers When it comes to managing retention proactively, it makes sense to focus on high-value customers. Both Franklin and Fragemann mentioned this. Fragemann talked about creating a “VIP group” for key customers. The strategy here would be manually reaching out to them, sharing product roadmaps sooner and betas more aggressively, essentially nurturing a close relationship where the customer feels full buy-in with the product. Of course this isn’t scalable with all customers or feasible for all companies — where it works, it’s a strategy for only the customers who would have the greatest negative impact on revenue churn. Specializing Customer Success Understand the primary user of your product and their role in their company, and tailor your customer success to them. Nick explained how ChartMogul customers may see more value if their own developers get involved and use the product. So ChartMogul is looking to hire a customer success team member for engineers, and also planning to create customer education (libraries, tutorials, etc.) specifically for developers. Using data to predict churn Blinkist wants to use data from their product to inform user experience, improve their conversion funnel, and predict churn. “So far [when customers cancel] we know what happened, and we sometimes know why it happened — and now we want to know when it’s going to happen,” said Jansen. Spin-off discussions: Questions from the audience resulted in some cool takeaways Customer acquisition How did you go from 0 customers to your first 50? Small Improvements: First customer was an old employer, and from there went by word-of-mouth. It took one year for first the 2 customers, another year for the next 8 customers. ChartMogul: Beta for 3 months garnered 200-300 signups. PointNine introduced ChartMogul to their portfolio of other SaaS businesses — and Nick had a personal network from working in SaaS before — so word-of-mouth played a role. Also posted on ProductHunt. Blinkist: 50 customers on first day! Back in 2013, pre-ProductHunt, they used performance marketing, content, and PR. What are your current customer acquisition methods? Small Improvements: Word-of-mouth ChartMogul: Word-of-mouth and content marketing Blinkist: Performance marketing Pricing How did you come up with your initial pricing? All three said it was pretty random. Small Improvements: Priced way too cheap. Advice? “Think about how many customers you want and can handle, and price for that.” ChartMogul: Checked competition’s prices. Then also offered a cheaper plan for the tiny startups. Advice? “Most SaaS companies undercharge. Charge as much as you can, but make sure you’re still providing more value than you charge.” When you want to change your pricing scheme, what do you do about your existing customers? All three said to grandfather in existing customers so that they continue to pay their original price. The panelists didn’t miss an opportunity to plug their company’s open positions, either! If you’re in the market, check out the Careers pages for Small Improvements, Blinkist, and ChartMogul. All in all, excellent kickoff to Berlin SaaS meetups. We look forward to the next one! Share and follow! Berlin #SaaS leaders weigh in on growth through retention https://t.co/TBTnVYWgYN @saascribe @SaaStock @PointNineCap pic.twitter.com/969JcZmNzQ — ChartMogul (@ChartMogul) March 23, 2016

<sys> [INST] Growth through retention? Berlin SaaS leaders weigh in [/INST] On March 21, a variety of Berliner SaaS folks came together for the first Berlin SaaS Meetup, hosted by SaaScribe and SaaStock, and sponsored by Point Nine Capital. We’d say it was a success! Along with plenty of time for networking and some tasty snacks, the meetup featured a panel discussion with three local Berlin founders: Per Fragemann of Small Improvements Niklas Jansen of Blinkist ChartMogul’s very own Nick Franklin and Point Nine Capital co-founder Pawl Chudzinski, who led with questions and later opened the floor to the audience. Below is a recap of the panel discussion on the meetup’s theme: Growth through retention. Why is it important? What are the challenges? How will you improve it? Plenty nuggets of wisdom herein, as well as cool insight into local Berlin startups and what’s on the mind of the Berlin SaaS community. “Investors like retention, but they like growth more.” – Niklas Jansen But how are the two related? “At some point, expansion business is more lucrative than new business,” said Nick Franklin. “50,000 customers each upgrading a little bit is worth more, and a lot easier to attain, than 50,000 brand new customers.” The key to getting to that point, where expansion biz is your growth engine, is to retain your customers and let that customer base compound over time. This is growth through retention. Though customer acquisition is usually the first thing on an early startup’s agenda, the founders agreed that retention becomes more and more critical as your customer count rises. “Retention drives everything,” said Jansen. Including customer lifetime value and word-of-mouth. In fact, Jansen shared that at Blinkist, a 10% improvement in retention improved their LTV by 30%! That is huge! (If you want to brush up on your LTV knowledge, check out the Ultimate Guide to SaaS Customer LTV) The founders monitor retention slightly differently. Small Improvements and Blinkist look mostly at Customer # churn, while ChartMogul follows revenue churn. But when it comes to retention challenges and solutions, there was a lot of commonality. Let’s dive in. What are some retention-related challenges that you’ve faced? Incomplete customer onboarding A huge, and common, cause of churn. It could be a customer who is fully signed up on a paid plan and just didn’t onboard properly — who doesn’t take full advantage of the product and therefore doesn’t see its full value — or someone on a trial plan who has stalled out halfway through. Though both are customer success issues, each scenario requires its own approach. When asked if there are any early signals that a customer would churn, Jansen noted that for Blinkist, the longer the period between signup and conversion, the higher the chances that customer would churn pretty quickly. This is motivation to shorten the conversion rate and reengage stalled users. (For some quick strategies for how to tackle mid-trial stall-outs, check out our SaaS Q&A.) Tracking activity adequately So that you can learn actionable things from it. This includes both customer activity and in-house activity. Customer activity here is user activity in the app. Blinkist used Customer Activity Rate, which was basically “# of customers who were active in a certain period of time / total # of customers”. But without segmentation — without dialing down to see what kind of customer was active, or which activity was performed, or how frequently — it can be hard to come away with a strategy for improving your customers’ engagement with the product. And in turn improving your retention. In-house tracking consists of any efforts to stimulate user activity — to proactively reengage customers. At Blinkist, they tried small experiments to reach out to and reengage their customers. “The problem was we didn’t pay attention to channel versus tactic,” Jansen said. And members of the Blinkist team performed these experiments in silos. Email, in-app notifications, push notifications… all worth trying, but without tracking their effectiveness and coordinating across internal teams, the experiments weren’t as valuable as they could have been. The product has its own timeline. “The product solves almost everything.” – Nick Franklin Sometimes improving retention is just a matter of improving the product. But the rate at which you do this can be a blocker. Niklas Jansen explained the slow feedback loop of product changes at Blinkist: waiting to see how product improvements actually impact the customer, their satisfaction, and then overall retention. It can take a while. You want to move faster, but you need to improve slowly — make incremental changes to the product — so as not to confuse your existing customer base. “Sometimes there’s a conflict of working on the product to serve a market that’s emerging, that will be ready two years from now, and focusing on keeping an existing customer base.” – Per Fragemann Every SaaS company wants to keep up with innovation and evolve their product. So in this light, the conflict can become a question of resources. Where do you direct your dev team? Do you invest in engineering or customer success? Some challenges can be inherent to your customer’s industry. For example, Small Improvements sells software to HR professionals within large companies. HR teams can have high turnover — which means Small Improvements’ point-of-contact, the decision maker who bought their product, leaves the customer company. And the replacement, unfamiliar with SI’s product, often has their own ideas about what software to use. Thanks to Innovation Nest VC (@innovationnest) for tweeting this live-action iPhone shot of the esteemed panel. What are your plans for managing retention moving forward? Focusing on high-value customers When it comes to managing retention proactively, it makes sense to focus on high-value customers. Both Franklin and Fragemann mentioned this. Fragemann talked about creating a “VIP group” for key customers. The strategy here would be manually reaching out to them, sharing product roadmaps sooner and betas more aggressively, essentially nurturing a close relationship where the customer feels full buy-in with the product. Of course this isn’t scalable with all customers or feasible for all companies — where it works, it’s a strategy for only the customers who would have the greatest negative impact on revenue churn. Specializing Customer Success Understand the primary user of your product and their role in their company, and tailor your customer success to them. Nick explained how ChartMogul customers may see more value if their own developers get involved and use the product. So ChartMogul is looking to hire a customer success team member for engineers, and also planning to create customer education (libraries, tutorials, etc.) specifically for developers. Using data to predict churn Blinkist wants to use data from their product to inform user experience, improve their conversion funnel, and predict churn. “So far [when customers cancel] we know what happened, and we sometimes know why it happened — and now we want to know when it’s going to happen,” said Jansen. Spin-off discussions: Questions from the audience resulted in some cool takeaways Customer acquisition How did you go from 0 customers to your first 50? Small Improvements: First customer was an old employer, and from there went by word-of-mouth. It took one year for first the 2 customers, another year for the next 8 customers. ChartMogul: Beta for 3 months garnered 200-300 signups. PointNine introduced ChartMogul to their portfolio of other SaaS businesses — and Nick had a personal network from working in SaaS before — so word-of-mouth played a role. Also posted on ProductHunt. Blinkist: 50 customers on first day! Back in 2013, pre-ProductHunt, they used performance marketing, content, and PR. What are your current customer acquisition methods? Small Improvements: Word-of-mouth ChartMogul: Word-of-mouth and content marketing Blinkist: Performance marketing Pricing How did you come up with your initial pricing? All three said it was pretty random. Small Improvements: Priced way too cheap. Advice? “Think about how many customers you want and can handle, and price for that.” ChartMogul: Checked competition’s prices. Then also offered a cheaper plan for the tiny startups. Advice? “Most SaaS companies undercharge. Charge as much as you can, but make sure you’re still providing more value than you charge.” When you want to change your pricing scheme, what do you do about your existing customers? All three said to grandfather in existing customers so that they continue to pay their original price. The panelists didn’t miss an opportunity to plug their company’s open positions, either! If you’re in the market, check out the Careers pages for Small Improvements, Blinkist, and ChartMogul. All in all, excellent kickoff to Berlin SaaS meetups. We look forward to the next one! Share and follow! Berlin #SaaS leaders weigh in on growth through retention https://t.co/TBTnVYWgYN @saascribe @SaaStock @PointNineCap pic.twitter.com/969JcZmNzQ — ChartMogul (@ChartMogul) March 23, 2016 </sys

SaaS Metrics Refresher #5: Customer Lifetime Value. Imagine being able to know the total revenue you’ll receive from a single customer on average — that’s the promise of customer lifetime value (LTV). It’s a valuable metric for assessing the health of a subscription business and making informed decisions about customer acquisition. However, a word of warning: it can be difficult to reliably estimate! Definitions Customer Lifetime Value (LTV) in SaaS is an estimate of the average total value of a customer, over their lifetime (from signup to churn). 💡 Gross Margin is the difference between revenue and COGS (cost of goods sold). This is typically very high in SaaS, e.g. >80%. The dream: how we can use LTV “LTV is a good indicator to segment customers and prospects to plan pursuit, nurture and coverage. However, it cannot gauge changing customer revenues and cost to serve over time, hence one cannot depend on LTV for long-term models to assume retention rates (loyalty rates) to also be stable over time.” Arun Mani, Freshworks Being able to estimate the complete lifetime value of a customer is a hugely powerful tool that is primarily used to control customer acquisition spend. What does that mean? If I know that customers will contribute $5k to my business on average over their lifetime, that tells me a lot about how much I can spend to acquire them. In fact, the general rule is that my customer acquisition cost (CAC) should be no higher than 1/3 of my LTV. If my LTV is $5k and I have a reliable, repeatable way to acquire new customers for just $500, didn’t I just create a money-printing machine? Well, unfortunately it’s a little more complicated than that. The reality “Your LTV tells you how much you can spend to profitably acquire a customer. With accurate conversion rates, it also tells you how much you can spend to profitably acquire a free trial or landing page visitor. It isn’t very useful when you’re just getting started because the numbers it’s based on (ARPU, Churn) fluctuate significantly. Therefore it isn’t accurate.” Andrew Rasmussen, Canny It’s important to remember that LTV is always an estimate or projection of the future. That puts LTV in a very different category to metrics like churn rate or ARPA, which are all measurements of the past. Predicting the future is hard and there’s no perfect way to try and model the potential outcome for your customers, especially if you don’t have a lot of historical data to go on. So based on this we need to temper our expectations a little bit — LTV can be a useful tool to roughly project total value from customers, and it can help us make some decisions and track progress. “Often it is hard to define ‘value’ in terms of customer lifetime value. Is it solely the the amount of years that a customer is your client, with the total sum of MRR during those years. Or lies its lifetime value also in other, harder to quantify fields? Like evangelizing us on social media and conferences, trying out new products or sharing their data with us?” Arun Mani, Freshworks The simple formula assumes linear churn rate This is never usually the case — most churn happens within the first 90 days of the customer lifetime, and tails off after this period. So you’d expect to see a curved chart when looking at a single cohort: It also doesn’t account for expansion or negative churn Cast your mind back to lesson three of this course: Churn. Here, we described negative churn as a state when “the revenue added from up-sells and expansion exceeds that of the revenue lost from churn and downgrades.” Negative churn is a highly desirable goal for any subscription business, and is a strong indicator of healthy growth through account expansion. The problem with the basic LTV formula is that it only looks at customer churn rate, and doesn’t take into account any form of revenue expansion. This can lead to a prediction that’s far too optimistic. A more advanced formula “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. In addition, because you are modeling revenues that will occur far in the future, you will need to apply a discount rate to account for the risks and time value of money.” David Skok, Matrix Ventures To address some of the shortcomings of the widely-used simple formula, David Skok (Partner @ Matrix Ventures) presented a more sophisticated LTV formula: It looks confusing, I know — but don’t panic! Let’s dig into it a little. The two concepts added to this new formula are: “K”, the discount factor Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a predefined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses or 10% for scale-stage businesses. “G”, the expansion rate Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. This advanced formula should result in a more realistic estimation of your business’s LTV. In the majority of cases it’s likely to be more pessimistic, except in the case of a really strong expansion rate. The most important aspect of LTV With all of the debate around the LTV and the the formula that’s used, it’s easy to forget one key aspect of measuring it: It generally doesn’t make sense for early-stage businesses. Due to the limitations outlined above, your efforts are better spent reducing churn, iterating on the product and getting qualitative feedback from customers. LTV is a metric that makes sense when you’re ready to tweak and optimize some of the growth levers in your business, before you really hit the gas and go for scale. Resources and Further Reading BASICS ChartMogul Metrics: LTV — Breaks down both LTV formulae and includes an LTV calculator to try for yourself. The Ultimate SaaS LTV Cheat Sheet — A free downloadable PDF containing everything you need to know on the topic. DEEP CUTS Actionable SaaS Metrics: Customer Lifetime Value (LTV) — This post helps make LTV actionable for your team. SaaS Q&A: How do I calculate LTV when I have negative churn? — This post speaks for itself! If you have negative churn, you’ll want to look at this.

[INST] SaaS Metrics Refresher #5: Customer Lifetime Value [/INST]

Imagine being able to know the total revenue you’ll receive from a single customer on average — that’s the promise of customer lifetime value (LTV). It’s a valuable metric for assessing the health of a subscription business and making informed decisions about customer acquisition. However, a word of warning: it can be difficult to reliably estimate! Definitions Customer Lifetime Value (LTV) in SaaS is an estimate of the average total value of a customer, over their lifetime (from signup to churn). 💡 Gross Margin is the difference between revenue and COGS (cost of goods sold). This is typically very high in SaaS, e.g. >80%. The dream: how we can use LTV “LTV is a good indicator to segment customers and prospects to plan pursuit, nurture and coverage. However, it cannot gauge changing customer revenues and cost to serve over time, hence one cannot depend on LTV for long-term models to assume retention rates (loyalty rates) to also be stable over time.” Arun Mani, Freshworks Being able to estimate the complete lifetime value of a customer is a hugely powerful tool that is primarily used to control customer acquisition spend. What does that mean? If I know that customers will contribute $5k to my business on average over their lifetime, that tells me a lot about how much I can spend to acquire them. In fact, the general rule is that my customer acquisition cost (CAC) should be no higher than 1/3 of my LTV. If my LTV is $5k and I have a reliable, repeatable way to acquire new customers for just $500, didn’t I just create a money-printing machine? Well, unfortunately it’s a little more complicated than that. The reality “Your LTV tells you how much you can spend to profitably acquire a customer. With accurate conversion rates, it also tells you how much you can spend to profitably acquire a free trial or landing page visitor. It isn’t very useful when you’re just getting started because the numbers it’s based on (ARPU, Churn) fluctuate significantly. Therefore it isn’t accurate.” Andrew Rasmussen, Canny It’s important to remember that LTV is always an estimate or projection of the future. That puts LTV in a very different category to metrics like churn rate or ARPA, which are all measurements of the past. Predicting the future is hard and there’s no perfect way to try and model the potential outcome for your customers, especially if you don’t have a lot of historical data to go on. So based on this we need to temper our expectations a little bit — LTV can be a useful tool to roughly project total value from customers, and it can help us make some decisions and track progress. “Often it is hard to define ‘value’ in terms of customer lifetime value. Is it solely the the amount of years that a customer is your client, with the total sum of MRR during those years. Or lies its lifetime value also in other, harder to quantify fields? Like evangelizing us on social media and conferences, trying out new products or sharing their data with us?” Arun Mani, Freshworks The simple formula assumes linear churn rate This is never usually the case — most churn happens within the first 90 days of the customer lifetime, and tails off after this period. So you’d expect to see a curved chart when looking at a single cohort: It also doesn’t account for expansion or negative churn Cast your mind back to lesson three of this course: Churn. Here, we described negative churn as a state when “the revenue added from up-sells and expansion exceeds that of the revenue lost from churn and downgrades.” Negative churn is a highly desirable goal for any subscription business, and is a strong indicator of healthy growth through account expansion. The problem with the basic LTV formula is that it only looks at customer churn rate, and doesn’t take into account any form of revenue expansion. This can lead to a prediction that’s far too optimistic. A more advanced formula “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. In addition, because you are modeling revenues that will occur far in the future, you will need to apply a discount rate to account for the risks and time value of money.” David Skok, Matrix Ventures To address some of the shortcomings of the widely-used simple formula, David Skok (Partner @ Matrix Ventures) presented a more sophisticated LTV formula: It looks confusing, I know — but don’t panic! Let’s dig into it a little. The two concepts added to this new formula are: “K”, the discount factor Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a predefined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses or 10% for scale-stage businesses. “G”, the expansion rate Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. This advanced formula should result in a more realistic estimation of your business’s LTV. In the majority of cases it’s likely to be more pessimistic, except in the case of a really strong expansion rate. The most important aspect of LTV With all of the debate around the LTV and the the formula that’s used, it’s easy to forget one key aspect of measuring it: It generally doesn’t make sense for early-stage businesses. Due to the limitations outlined above, your efforts are better spent reducing churn, iterating on the product and getting qualitative feedback from customers. LTV is a metric that makes sense when you’re ready to tweak and optimize some of the growth levers in your business, before you really hit the gas and go for scale. Resources and Further Reading BASICS ChartMogul Metrics: LTV — Breaks down both LTV formulae and includes an LTV calculator to try for yourself. The Ultimate SaaS LTV Cheat Sheet — A free downloadable PDF containing everything you need to know on the topic. DEEP CUTS Actionable SaaS Metrics: Customer Lifetime Value (LTV) — This post helps make LTV actionable for your team. SaaS Q&A: How do I calculate LTV when I have negative churn? — This post speaks for itself! If you have negative churn, you’ll want to look at this.

<sys> [INST] SaaS Metrics Refresher #5: Customer Lifetime Value [/INST] Imagine being able to know the total revenue you’ll receive from a single customer on average — that’s the promise of customer lifetime value (LTV). It’s a valuable metric for assessing the health of a subscription business and making informed decisions about customer acquisition. However, a word of warning: it can be difficult to reliably estimate! Definitions Customer Lifetime Value (LTV) in SaaS is an estimate of the average total value of a customer, over their lifetime (from signup to churn). 💡 Gross Margin is the difference between revenue and COGS (cost of goods sold). This is typically very high in SaaS, e.g. >80%. The dream: how we can use LTV “LTV is a good indicator to segment customers and prospects to plan pursuit, nurture and coverage. However, it cannot gauge changing customer revenues and cost to serve over time, hence one cannot depend on LTV for long-term models to assume retention rates (loyalty rates) to also be stable over time.” Arun Mani, Freshworks Being able to estimate the complete lifetime value of a customer is a hugely powerful tool that is primarily used to control customer acquisition spend. What does that mean? If I know that customers will contribute $5k to my business on average over their lifetime, that tells me a lot about how much I can spend to acquire them. In fact, the general rule is that my customer acquisition cost (CAC) should be no higher than 1/3 of my LTV. If my LTV is $5k and I have a reliable, repeatable way to acquire new customers for just $500, didn’t I just create a money-printing machine? Well, unfortunately it’s a little more complicated than that. The reality “Your LTV tells you how much you can spend to profitably acquire a customer. With accurate conversion rates, it also tells you how much you can spend to profitably acquire a free trial or landing page visitor. It isn’t very useful when you’re just getting started because the numbers it’s based on (ARPU, Churn) fluctuate significantly. Therefore it isn’t accurate.” Andrew Rasmussen, Canny It’s important to remember that LTV is always an estimate or projection of the future. That puts LTV in a very different category to metrics like churn rate or ARPA, which are all measurements of the past. Predicting the future is hard and there’s no perfect way to try and model the potential outcome for your customers, especially if you don’t have a lot of historical data to go on. So based on this we need to temper our expectations a little bit — LTV can be a useful tool to roughly project total value from customers, and it can help us make some decisions and track progress. “Often it is hard to define ‘value’ in terms of customer lifetime value. Is it solely the the amount of years that a customer is your client, with the total sum of MRR during those years. Or lies its lifetime value also in other, harder to quantify fields? Like evangelizing us on social media and conferences, trying out new products or sharing their data with us?” Arun Mani, Freshworks The simple formula assumes linear churn rate This is never usually the case — most churn happens within the first 90 days of the customer lifetime, and tails off after this period. So you’d expect to see a curved chart when looking at a single cohort: It also doesn’t account for expansion or negative churn Cast your mind back to lesson three of this course: Churn. Here, we described negative churn as a state when “the revenue added from up-sells and expansion exceeds that of the revenue lost from churn and downgrades.” Negative churn is a highly desirable goal for any subscription business, and is a strong indicator of healthy growth through account expansion. The problem with the basic LTV formula is that it only looks at customer churn rate, and doesn’t take into account any form of revenue expansion. This can lead to a prediction that’s far too optimistic. A more advanced formula “For subscription-based businesses who have negative churn (they expand revenue from retained customers at a greater rate than lost revenue from churn), you need new formulae to calculate LTV that includes both this expansion rate and churn. In addition, because you are modeling revenues that will occur far in the future, you will need to apply a discount rate to account for the risks and time value of money.” David Skok, Matrix Ventures To address some of the shortcomings of the widely-used simple formula, David Skok (Partner @ Matrix Ventures) presented a more sophisticated LTV formula: It looks confusing, I know — but don’t panic! Let’s dig into it a little. The two concepts added to this new formula are: “K”, the discount factor Which takes care of value reduction on all fronts. This includes the usual customer churn rate, but also “Discount Rate”. Discount rate accounts for both risk and reduced value of money over time, mentioned above. It’s a predefined annual rate of your choosing. Skok suggests a Discount Rate of 20-25% for pre-scale businesses or 10% for scale-stage businesses. “G”, the expansion rate Annual Growth rate for customers who haven’t churned. Aka: the business expansion rate of your existing customers. Which turns your negative MRR churn into a positive figure in the formula. This advanced formula should result in a more realistic estimation of your business’s LTV. In the majority of cases it’s likely to be more pessimistic, except in the case of a really strong expansion rate. The most important aspect of LTV With all of the debate around the LTV and the the formula that’s used, it’s easy to forget one key aspect of measuring it: It generally doesn’t make sense for early-stage businesses. Due to the limitations outlined above, your efforts are better spent reducing churn, iterating on the product and getting qualitative feedback from customers. LTV is a metric that makes sense when you’re ready to tweak and optimize some of the growth levers in your business, before you really hit the gas and go for scale. Resources and Further Reading BASICS ChartMogul Metrics: LTV — Breaks down both LTV formulae and includes an LTV calculator to try for yourself. The Ultimate SaaS LTV Cheat Sheet — A free downloadable PDF containing everything you need to know on the topic. DEEP CUTS Actionable SaaS Metrics: Customer Lifetime Value (LTV) — This post helps make LTV actionable for your team. SaaS Q&A: How do I calculate LTV when I have negative churn? — This post speaks for itself! If you have negative churn, you’ll want to look at this. </sys

Using ChartMogul as a Bootstrapper. I’m a ChartMogul customer, and I’m a bootstrapper. I’m the founder of Feature Upvote, a bootstrapped and profitable SaaS. As a cash-strapped bootstrapper, if I spend money on a service, it has to be essential. I need to choose wisely where I spend my company’s limited funds. Because, as 100% owner of my company, the money I spend is money coming out of my own pocket. So why do I spend some of that precious, limited money on ChartMogul? Before ChartMogul: Home-grown Metrics In the early days of my business, I wrote my own system for calculating metrics. I say ‘metrics’, but it was really just the singular ‘metric’ of MRR. I only cared about MRR because I hadn’t yet learned about other important SaaS metrics such as Churn and Lifetime Value. MRR was what many bootstrappers were sharing on Twitter and Indie Hackers. Calculating MRR seemed easy, something I could do with one SQL query and a basic web page. And it was easy — when I had just one price point and a few customers. But as my business got traction, pricing got more complex. There were discount plans, coupons, and refunds. My SQL query to calculate MRR was becoming complex and indecipherable. I also had no way to view history and trends. Knowing MRR alone is not useful if I can’t compare it to MRR from a month, six months, or a year ago. Then I added multiple currencies. That completely broke my home-grown metrics. The data it showed was simply wrong. But I didn’t want to spend time maintaining it. I was in the unpleasant situation of having to make business decisions with little data, and what data I had was wrong. As my fellow bootstrappers will know, you always have too many things to do. It is hard to find the time to maintain an internal system used only by the founder. It is the type of work that always finds itself pushed off the to-do list. Discovering ChartMogul’s free plan I read a blog post from another bootstrapper that featured an attractive chart of their MRR growth over time. This chart was generated by ChartMogul and it was awesome! I wanted one for myself! So I took a look at ChartMogul. I instantly realized this was so much better than what my home-grown solution ever could be. Even better, because my MRR was below $10K, I could use ChartMogul’s free plan. More metrics, attractive charts, and free? How could I not use ChartMogul, at least until Feature Upvote grew out of the free tier. Best of all, unlike my homebuilt system, the data was actually accurate. What I initially learned from ChartMogul ChartMogul has excellent free resources that explain what SaaS metrics are and how I can use them. From them I learned that SaaS metrics are more than just MRR. Even just the way MRR is reported in ChartMogul was eye-opening. It breaks down my MRR growth into “New Business” MRR and “Expansion” MRR. This concept of expansion growth was new to me. I soon learnt that it is important for success in SaaS. Expansion revenue is revenue growth that comes from existing customers when they upgrade to a more expensive plan. If your product doesn’t yet have a pricing model that allows your happy customers to give you more money/month, I highly recommend adjusting your pricing model. I discovered that by accident, I had baked expansion revenue into my pricing model. Another SaaS metric that ChartMogul gave me was Gross Churn Rate, a metric I now watch as closely as MRR. This shows how quickly I’m losing those hard-won customers. In the early days, this churn was way too high for my company to ever be sustainable. I got churn under control, partly by improving my product, support and docs, but mostly by increasing prices. $10K MRR: Time to start paying Happy day! I got a notification from ChartMogul telling me I had hit $10K in MRR. But also a sad day, because now I would no longer be able to use ChartMogul for free. My first impulse was to cancel my ChartMogul account. I was still cash-strapped, with too many competing demands on my limited revenue. Paying money to see some pretty charts each month didn’t seem to be a sensible business decision. And yet, I realized it was much more than pretty charts. I had come to rely on the information that ChartMogul gave me. It had become essential in my decision-making. To save money, I could resurrect my home-built SaaS metrics system, and devote some time to make it accurate and show more metrics. But when I estimated how long that would take, it seemed like a silly thing to do, when I could instead pay ChartMogul to keep getting the information they were already providing. In the age-old conundrum of buy-vs-build faced by SaaS founders, buy was the right decision in this case. Decisions I make using ChartMogul I want to share how spending money on ChartMogul has helped me, financially and psychologically. When to pause Google Ads Last year I started running my first Google Ads campaign. After two months of learning and tweaking, Google Ads started to give me new paying customers. But were they paying enough to justify the ad spend? What I needed to know was my “Customer Lifetime Value” or LTV in ChartMogul. I discovered that it wasn’t high enough based on my cost per acquisition from Google Ads. So I paused the ad campaign until we could improve our LTV. Knowing that I should pause the Google Ads campaign saved me way more than I was paying ChartMogul. From that decision alone, my ChartMogul subscription has been worth it. Once our LTV improved, I restarted my Google Ads campaign, confident that doing so was now worthwhile. How did I increase LTV? By increasing prices, which I’ll tell you about further down. Focus on the long term More than I like, my self-esteem as a bootstrapped founder goes up and down with MRR growth. Month-over-month growth greater than 10%? I’m the champion of champions, I tell myself, a true business visionary! But growth only 1% or 2% this month? What am I doing pretending to be something I’m not? Clearly, I have no business acumen at all and should start checking the job ads. A way I’ve found to deal with the yoyo-ing of my business self-belief is to look at longer-term trends in ChartMogul. One way is to compare metrics year-on-year. ChartMogul does this comparison with many metrics by default. This long term view keeps me relatively calm. Another way is to smooth out the curves by grouping data by quarter. I set the date range to all-time and group data by quarter instead of by month, then view the MRR chart. This quarterly view shows me a smooth and steady increase in MRR. Instead of being blinded by monthly swings, I can see that our long-term progress is good. Effect of a large price rise I have the developer’s mentality, shared by many technical founders, whereby we vastly undervalue our work. For a long time I wasn’t charging enough for Feature Upvote. Slowly and steadily I’ve become willing to experiment with pricing, but every price rise still causes me anxiety. My first price experiments were small and cautious price increases — followed by weeks of closely monitoring the result in ChartMogul. Are people still signing up for paid accounts? How does behavior differ at different pricing levels? Who is churning? I monitor the long-term results of pricing changes via ChartMogul’s “Average Revenue Per Account” or ARPA chart. This is perhaps my favorite view of my business in ChartMogul. Watching the consistent ARPA growth helps steady my nerves as our prices go up. After the initial price increases went well, I started to feel bold, so in late 2020 I abruptly doubled our prices for new customers. (Existing customers remained on the old pricing.) Using ChartMogul’s segments feature, I can compare customers by pricing: one segment for customers on old pricing plans, and one segment for customers on the new much higher plan. Comparing customer segments by price has been a revelation. Customers at the new price point have much lower churn. They have higher LTV, way more than double. SaaS veterans already know this, but I had to learn this myself. Only by seeing the result of a large price increase in my own business did I really understand what happens — increasing prices overwhelmingly leads to better customers, who pay more and churn less. I can conclude that raising prices — despite causing a drop in customer signups — was a very good decision. A vital tool for decision making My product was launched four years ago this month, and I’ve been using ChartMogul for three of those four years. It remains a vital part of my decision making process. I discarded my old home-grown metric system long ago, and it is never coming back. Although I was hesitant at first about paying for ChartMogul, it has helped me earn much more than I pay for it. To my fellow SaaS bootstrappers still relying on a creaky home-grown metrics system — or worse, not having access to any metrics at all — I recommend you start using ChartMogul to get accurate insights into the health of your product.

[INST] Using ChartMogul as a Bootstrapper [/INST]

I’m a ChartMogul customer, and I’m a bootstrapper. I’m the founder of Feature Upvote, a bootstrapped and profitable SaaS. As a cash-strapped bootstrapper, if I spend money on a service, it has to be essential. I need to choose wisely where I spend my company’s limited funds. Because, as 100% owner of my company, the money I spend is money coming out of my own pocket. So why do I spend some of that precious, limited money on ChartMogul? Before ChartMogul: Home-grown Metrics In the early days of my business, I wrote my own system for calculating metrics. I say ‘metrics’, but it was really just the singular ‘metric’ of MRR. I only cared about MRR because I hadn’t yet learned about other important SaaS metrics such as Churn and Lifetime Value. MRR was what many bootstrappers were sharing on Twitter and Indie Hackers. Calculating MRR seemed easy, something I could do with one SQL query and a basic web page. And it was easy — when I had just one price point and a few customers. But as my business got traction, pricing got more complex. There were discount plans, coupons, and refunds. My SQL query to calculate MRR was becoming complex and indecipherable. I also had no way to view history and trends. Knowing MRR alone is not useful if I can’t compare it to MRR from a month, six months, or a year ago. Then I added multiple currencies. That completely broke my home-grown metrics. The data it showed was simply wrong. But I didn’t want to spend time maintaining it. I was in the unpleasant situation of having to make business decisions with little data, and what data I had was wrong. As my fellow bootstrappers will know, you always have too many things to do. It is hard to find the time to maintain an internal system used only by the founder. It is the type of work that always finds itself pushed off the to-do list. Discovering ChartMogul’s free plan I read a blog post from another bootstrapper that featured an attractive chart of their MRR growth over time. This chart was generated by ChartMogul and it was awesome! I wanted one for myself! So I took a look at ChartMogul. I instantly realized this was so much better than what my home-grown solution ever could be. Even better, because my MRR was below $10K, I could use ChartMogul’s free plan. More metrics, attractive charts, and free? How could I not use ChartMogul, at least until Feature Upvote grew out of the free tier. Best of all, unlike my homebuilt system, the data was actually accurate. What I initially learned from ChartMogul ChartMogul has excellent free resources that explain what SaaS metrics are and how I can use them. From them I learned that SaaS metrics are more than just MRR. Even just the way MRR is reported in ChartMogul was eye-opening. It breaks down my MRR growth into “New Business” MRR and “Expansion” MRR. This concept of expansion growth was new to me. I soon learnt that it is important for success in SaaS. Expansion revenue is revenue growth that comes from existing customers when they upgrade to a more expensive plan. If your product doesn’t yet have a pricing model that allows your happy customers to give you more money/month, I highly recommend adjusting your pricing model. I discovered that by accident, I had baked expansion revenue into my pricing model. Another SaaS metric that ChartMogul gave me was Gross Churn Rate, a metric I now watch as closely as MRR. This shows how quickly I’m losing those hard-won customers. In the early days, this churn was way too high for my company to ever be sustainable. I got churn under control, partly by improving my product, support and docs, but mostly by increasing prices. $10K MRR: Time to start paying Happy day! I got a notification from ChartMogul telling me I had hit $10K in MRR. But also a sad day, because now I would no longer be able to use ChartMogul for free. My first impulse was to cancel my ChartMogul account. I was still cash-strapped, with too many competing demands on my limited revenue. Paying money to see some pretty charts each month didn’t seem to be a sensible business decision. And yet, I realized it was much more than pretty charts. I had come to rely on the information that ChartMogul gave me. It had become essential in my decision-making. To save money, I could resurrect my home-built SaaS metrics system, and devote some time to make it accurate and show more metrics. But when I estimated how long that would take, it seemed like a silly thing to do, when I could instead pay ChartMogul to keep getting the information they were already providing. In the age-old conundrum of buy-vs-build faced by SaaS founders, buy was the right decision in this case. Decisions I make using ChartMogul I want to share how spending money on ChartMogul has helped me, financially and psychologically. When to pause Google Ads Last year I started running my first Google Ads campaign. After two months of learning and tweaking, Google Ads started to give me new paying customers. But were they paying enough to justify the ad spend? What I needed to know was my “Customer Lifetime Value” or LTV in ChartMogul. I discovered that it wasn’t high enough based on my cost per acquisition from Google Ads. So I paused the ad campaign until we could improve our LTV. Knowing that I should pause the Google Ads campaign saved me way more than I was paying ChartMogul. From that decision alone, my ChartMogul subscription has been worth it. Once our LTV improved, I restarted my Google Ads campaign, confident that doing so was now worthwhile. How did I increase LTV? By increasing prices, which I’ll tell you about further down. Focus on the long term More than I like, my self-esteem as a bootstrapped founder goes up and down with MRR growth. Month-over-month growth greater than 10%? I’m the champion of champions, I tell myself, a true business visionary! But growth only 1% or 2% this month? What am I doing pretending to be something I’m not? Clearly, I have no business acumen at all and should start checking the job ads. A way I’ve found to deal with the yoyo-ing of my business self-belief is to look at longer-term trends in ChartMogul. One way is to compare metrics year-on-year. ChartMogul does this comparison with many metrics by default. This long term view keeps me relatively calm. Another way is to smooth out the curves by grouping data by quarter. I set the date range to all-time and group data by quarter instead of by month, then view the MRR chart. This quarterly view shows me a smooth and steady increase in MRR. Instead of being blinded by monthly swings, I can see that our long-term progress is good. Effect of a large price rise I have the developer’s mentality, shared by many technical founders, whereby we vastly undervalue our work. For a long time I wasn’t charging enough for Feature Upvote. Slowly and steadily I’ve become willing to experiment with pricing, but every price rise still causes me anxiety. My first price experiments were small and cautious price increases — followed by weeks of closely monitoring the result in ChartMogul. Are people still signing up for paid accounts? How does behavior differ at different pricing levels? Who is churning? I monitor the long-term results of pricing changes via ChartMogul’s “Average Revenue Per Account” or ARPA chart. This is perhaps my favorite view of my business in ChartMogul. Watching the consistent ARPA growth helps steady my nerves as our prices go up. After the initial price increases went well, I started to feel bold, so in late 2020 I abruptly doubled our prices for new customers. (Existing customers remained on the old pricing.) Using ChartMogul’s segments feature, I can compare customers by pricing: one segment for customers on old pricing plans, and one segment for customers on the new much higher plan. Comparing customer segments by price has been a revelation. Customers at the new price point have much lower churn. They have higher LTV, way more than double. SaaS veterans already know this, but I had to learn this myself. Only by seeing the result of a large price increase in my own business did I really understand what happens — increasing prices overwhelmingly leads to better customers, who pay more and churn less. I can conclude that raising prices — despite causing a drop in customer signups — was a very good decision. A vital tool for decision making My product was launched four years ago this month, and I’ve been using ChartMogul for three of those four years. It remains a vital part of my decision making process. I discarded my old home-grown metric system long ago, and it is never coming back. Although I was hesitant at first about paying for ChartMogul, it has helped me earn much more than I pay for it. To my fellow SaaS bootstrappers still relying on a creaky home-grown metrics system — or worse, not having access to any metrics at all — I recommend you start using ChartMogul to get accurate insights into the health of your product.

<sys> [INST] Using ChartMogul as a Bootstrapper [/INST] I’m a ChartMogul customer, and I’m a bootstrapper. I’m the founder of Feature Upvote, a bootstrapped and profitable SaaS. As a cash-strapped bootstrapper, if I spend money on a service, it has to be essential. I need to choose wisely where I spend my company’s limited funds. Because, as 100% owner of my company, the money I spend is money coming out of my own pocket. So why do I spend some of that precious, limited money on ChartMogul? Before ChartMogul: Home-grown Metrics In the early days of my business, I wrote my own system for calculating metrics. I say ‘metrics’, but it was really just the singular ‘metric’ of MRR. I only cared about MRR because I hadn’t yet learned about other important SaaS metrics such as Churn and Lifetime Value. MRR was what many bootstrappers were sharing on Twitter and Indie Hackers. Calculating MRR seemed easy, something I could do with one SQL query and a basic web page. And it was easy — when I had just one price point and a few customers. But as my business got traction, pricing got more complex. There were discount plans, coupons, and refunds. My SQL query to calculate MRR was becoming complex and indecipherable. I also had no way to view history and trends. Knowing MRR alone is not useful if I can’t compare it to MRR from a month, six months, or a year ago. Then I added multiple currencies. That completely broke my home-grown metrics. The data it showed was simply wrong. But I didn’t want to spend time maintaining it. I was in the unpleasant situation of having to make business decisions with little data, and what data I had was wrong. As my fellow bootstrappers will know, you always have too many things to do. It is hard to find the time to maintain an internal system used only by the founder. It is the type of work that always finds itself pushed off the to-do list. Discovering ChartMogul’s free plan I read a blog post from another bootstrapper that featured an attractive chart of their MRR growth over time. This chart was generated by ChartMogul and it was awesome! I wanted one for myself! So I took a look at ChartMogul. I instantly realized this was so much better than what my home-grown solution ever could be. Even better, because my MRR was below $10K, I could use ChartMogul’s free plan. More metrics, attractive charts, and free? How could I not use ChartMogul, at least until Feature Upvote grew out of the free tier. Best of all, unlike my homebuilt system, the data was actually accurate. What I initially learned from ChartMogul ChartMogul has excellent free resources that explain what SaaS metrics are and how I can use them. From them I learned that SaaS metrics are more than just MRR. Even just the way MRR is reported in ChartMogul was eye-opening. It breaks down my MRR growth into “New Business” MRR and “Expansion” MRR. This concept of expansion growth was new to me. I soon learnt that it is important for success in SaaS. Expansion revenue is revenue growth that comes from existing customers when they upgrade to a more expensive plan. If your product doesn’t yet have a pricing model that allows your happy customers to give you more money/month, I highly recommend adjusting your pricing model. I discovered that by accident, I had baked expansion revenue into my pricing model. Another SaaS metric that ChartMogul gave me was Gross Churn Rate, a metric I now watch as closely as MRR. This shows how quickly I’m losing those hard-won customers. In the early days, this churn was way too high for my company to ever be sustainable. I got churn under control, partly by improving my product, support and docs, but mostly by increasing prices. $10K MRR: Time to start paying Happy day! I got a notification from ChartMogul telling me I had hit $10K in MRR. But also a sad day, because now I would no longer be able to use ChartMogul for free. My first impulse was to cancel my ChartMogul account. I was still cash-strapped, with too many competing demands on my limited revenue. Paying money to see some pretty charts each month didn’t seem to be a sensible business decision. And yet, I realized it was much more than pretty charts. I had come to rely on the information that ChartMogul gave me. It had become essential in my decision-making. To save money, I could resurrect my home-built SaaS metrics system, and devote some time to make it accurate and show more metrics. But when I estimated how long that would take, it seemed like a silly thing to do, when I could instead pay ChartMogul to keep getting the information they were already providing. In the age-old conundrum of buy-vs-build faced by SaaS founders, buy was the right decision in this case. Decisions I make using ChartMogul I want to share how spending money on ChartMogul has helped me, financially and psychologically. When to pause Google Ads Last year I started running my first Google Ads campaign. After two months of learning and tweaking, Google Ads started to give me new paying customers. But were they paying enough to justify the ad spend? What I needed to know was my “Customer Lifetime Value” or LTV in ChartMogul. I discovered that it wasn’t high enough based on my cost per acquisition from Google Ads. So I paused the ad campaign until we could improve our LTV. Knowing that I should pause the Google Ads campaign saved me way more than I was paying ChartMogul. From that decision alone, my ChartMogul subscription has been worth it. Once our LTV improved, I restarted my Google Ads campaign, confident that doing so was now worthwhile. How did I increase LTV? By increasing prices, which I’ll tell you about further down. Focus on the long term More than I like, my self-esteem as a bootstrapped founder goes up and down with MRR growth. Month-over-month growth greater than 10%? I’m the champion of champions, I tell myself, a true business visionary! But growth only 1% or 2% this month? What am I doing pretending to be something I’m not? Clearly, I have no business acumen at all and should start checking the job ads. A way I’ve found to deal with the yoyo-ing of my business self-belief is to look at longer-term trends in ChartMogul. One way is to compare metrics year-on-year. ChartMogul does this comparison with many metrics by default. This long term view keeps me relatively calm. Another way is to smooth out the curves by grouping data by quarter. I set the date range to all-time and group data by quarter instead of by month, then view the MRR chart. This quarterly view shows me a smooth and steady increase in MRR. Instead of being blinded by monthly swings, I can see that our long-term progress is good. Effect of a large price rise I have the developer’s mentality, shared by many technical founders, whereby we vastly undervalue our work. For a long time I wasn’t charging enough for Feature Upvote. Slowly and steadily I’ve become willing to experiment with pricing, but every price rise still causes me anxiety. My first price experiments were small and cautious price increases — followed by weeks of closely monitoring the result in ChartMogul. Are people still signing up for paid accounts? How does behavior differ at different pricing levels? Who is churning? I monitor the long-term results of pricing changes via ChartMogul’s “Average Revenue Per Account” or ARPA chart. This is perhaps my favorite view of my business in ChartMogul. Watching the consistent ARPA growth helps steady my nerves as our prices go up. After the initial price increases went well, I started to feel bold, so in late 2020 I abruptly doubled our prices for new customers. (Existing customers remained on the old pricing.) Using ChartMogul’s segments feature, I can compare customers by pricing: one segment for customers on old pricing plans, and one segment for customers on the new much higher plan. Comparing customer segments by price has been a revelation. Customers at the new price point have much lower churn. They have higher LTV, way more than double. SaaS veterans already know this, but I had to learn this myself. Only by seeing the result of a large price increase in my own business did I really understand what happens — increasing prices overwhelmingly leads to better customers, who pay more and churn less. I can conclude that raising prices — despite causing a drop in customer signups — was a very good decision. A vital tool for decision making My product was launched four years ago this month, and I’ve been using ChartMogul for three of those four years. It remains a vital part of my decision making process. I discarded my old home-grown metric system long ago, and it is never coming back. Although I was hesitant at first about paying for ChartMogul, it has helped me earn much more than I pay for it. To my fellow SaaS bootstrappers still relying on a creaky home-grown metrics system — or worse, not having access to any metrics at all — I recommend you start using ChartMogul to get accurate insights into the health of your product. </sys

Pricing & Jobs to be Done with Matt Lerner of Startup Core Strengths. In this episode of SaaS Open Mic, I speak with Matt Lerner, the founder and CEO of Startup Core Strengths. He shares his perspective on establishing and optimizing pricing using the Jobs to Be Done framework. Matt spent 15 years as a marketer and General Manager in Silicon Valley, including ten years at PayPal. Later, as a VC at 500 Startups, he led dozens of early-stage investments. Now, Matt is running Startup Core Strengths, a live online program to help startups find their big growth levers, and pull them. Tune in or read the summary below. Two common pricing mistakes founders make How to optimize SaaS pricing with Jobs to be Done Four simple experiments to test price sensitivity 90% of growth comes from 10% of the activities Two common pricing mistakes founders make Matt has worked with dozens of startups and scaleups in his time at 500 Startups and Startup Core Strengths. A challenge that every company must face at some point is optimizing pricing or setting a price for a new product or feature. In Matt’s experience, founders make two common pricing mistakes when optimizing pricing: missing the mark on explaining the product’s value and overlooking non-financial costs. Unclear value of the product If you neglect to explain your product’s value thoroughly, it impacts conversion rates very quickly. Your growth will slow down. If people aren’t buying the product, they [founders] lower the price. And the real reason they’re not buying the product isn’t the price, it’s probably that they don’t actually understand the value of the product. – Matt Lerner Furthermore, lowering the price can be counterproductive as it can introduce more doubt and anxiety about the quality of your product. Instead of lowering the price, what you want to do is find out the real barriers to purchase. And remove those first. Once people understand the value, they become a lot less price sensitive. Overlooking non-financial costs Are you aware of all the blockers that prevent your prospects from purchasing your solution? Your prospects might be concerned about high switching costs, gettings approvals from stakeholders, or re-training staff. Remove non-financial barriers before changing your pricing strategy. Any decent salesperson can sell a Ferrari for a dollar. That’s not the magic. The magic is making a product that people are willing and happy to pay a premium for. So make sure that you understand the value and the barriers before you start mucking about with the price. How to optimize SaaS pricing with Jobs to be Done Jobs to Be Done (JTBD) interviews are widespread in product management. We use jobs to be done interviews to understand their life before the product. What do they think they were looking for to solve this problem? What alternative solutions did they consider? Matt noticed that the knowledge his portfolio companies gained from the JTBD interviews matched perfectly to inform the pricing strategy. After all, people don’t just buy products. They “hire” them to do “jobs” (solve a problem). Your success depends on understanding the actual “jobs” customers use your product for. Make sure you understand the value you’re bringing to your customers to optimize your pricing. A lot of times, people’s jobs to be done are not functional. They’re social and emotional. They’re trying to impress other people, they’re worried about what people will think of them, and that’s the value that their customers are paying. To implement the JTBD framework into your pricing optimization, check out Matt’s Jobs to Be Done canvas which includes interview questions to unpack your prospects’ needs, and a template to organize your insights into “Jobs Cards”. The magic is making a product that people are willing and happy to pay a premium for. Four simple experiments to test price sensitivity There are many well-known methods used for pricing optimization: anchoring, trials, freemium, etc. Price anchoring is when you create an ‘anchor’ price to make the option you want prospects to choose look like a bargain. Free trials enable people to understand the full value of your product before you charge for it. Freemium get users loving one feature so much that they are willing to pay for other features. A/B testing allows you to test selling your product at different price points. The Van Westendorp model Another way to test price sensitivity is the Van Westendorp model. Once users understand the product value, ask them four questions: At what price would be so cheap that you would doubt this product’s quality? At what price does this start to seem like a good deal? At what price is this starting to seem expensive? At what price would the product be ridiculously expensive? The middle is never really a good pricing strategy. Either you’re trying to be the low-end, cheap and cheerful provider, or you’re trying to be a premium product. (..) If you’re trying to set pricing for a new feature or product from scratch, that’s a really good way to start. 90% of growth comes from 10% of the activities When you’ve got a bunch of existing loyal customers, the quickest way to generate free cash flow is to raise prices. So, [at PayPal] we made a price increase. (..) But the big opportunities in payments were really in delivering value to customers. And other companies went with a long-term focus and they were able to capture that value. Price increases are just one lever you can pull, which might be the wrong one. Looking back at PayPal’s growth and success, Matt was struck by how few actions have an impact on growth. All of their growth really just came down to five things. (..) But the point is that PayPal obviously did a lot more than five things. They spent millions on different campaigns, building products that didn’t really have a big impact. This applies to any business according to Matt. For any successful business, when you look back in the beginning, 90% of their growth came from 10% of the stuff they tried. So find your 10% (pricing or not) as quick as you can and focus on it relentlessly. (..) Great startups don’t (cannot!) waste time on little stuff. Focus on the right stuff To grow, focus on the right things. Find your 10% and focus on it relentlessly. Discover what’s the big lever we can pull. And frame up your pricing in terms of customer value. Focus on the big stuff, and the big stuff may or may not be pricing depending on where you are in your business. If it is pricing, then 1) Make sure people fully understand the value of your product in the context of what they’re trying to do in their lives. 2) Make sure that you’ve removed or addressed all the non-financial barriers.

[INST] Pricing & Jobs to be Done with Matt Lerner of Startup Core Strengths [/INST]

In this episode of SaaS Open Mic, I speak with Matt Lerner, the founder and CEO of Startup Core Strengths. He shares his perspective on establishing and optimizing pricing using the Jobs to Be Done framework. Matt spent 15 years as a marketer and General Manager in Silicon Valley, including ten years at PayPal. Later, as a VC at 500 Startups, he led dozens of early-stage investments. Now, Matt is running Startup Core Strengths, a live online program to help startups find their big growth levers, and pull them. Tune in or read the summary below. Two common pricing mistakes founders make How to optimize SaaS pricing with Jobs to be Done Four simple experiments to test price sensitivity 90% of growth comes from 10% of the activities Two common pricing mistakes founders make Matt has worked with dozens of startups and scaleups in his time at 500 Startups and Startup Core Strengths. A challenge that every company must face at some point is optimizing pricing or setting a price for a new product or feature. In Matt’s experience, founders make two common pricing mistakes when optimizing pricing: missing the mark on explaining the product’s value and overlooking non-financial costs. Unclear value of the product If you neglect to explain your product’s value thoroughly, it impacts conversion rates very quickly. Your growth will slow down. If people aren’t buying the product, they [founders] lower the price. And the real reason they’re not buying the product isn’t the price, it’s probably that they don’t actually understand the value of the product. – Matt Lerner Furthermore, lowering the price can be counterproductive as it can introduce more doubt and anxiety about the quality of your product. Instead of lowering the price, what you want to do is find out the real barriers to purchase. And remove those first. Once people understand the value, they become a lot less price sensitive. Overlooking non-financial costs Are you aware of all the blockers that prevent your prospects from purchasing your solution? Your prospects might be concerned about high switching costs, gettings approvals from stakeholders, or re-training staff. Remove non-financial barriers before changing your pricing strategy. Any decent salesperson can sell a Ferrari for a dollar. That’s not the magic. The magic is making a product that people are willing and happy to pay a premium for. So make sure that you understand the value and the barriers before you start mucking about with the price. How to optimize SaaS pricing with Jobs to be Done Jobs to Be Done (JTBD) interviews are widespread in product management. We use jobs to be done interviews to understand their life before the product. What do they think they were looking for to solve this problem? What alternative solutions did they consider? Matt noticed that the knowledge his portfolio companies gained from the JTBD interviews matched perfectly to inform the pricing strategy. After all, people don’t just buy products. They “hire” them to do “jobs” (solve a problem). Your success depends on understanding the actual “jobs” customers use your product for. Make sure you understand the value you’re bringing to your customers to optimize your pricing. A lot of times, people’s jobs to be done are not functional. They’re social and emotional. They’re trying to impress other people, they’re worried about what people will think of them, and that’s the value that their customers are paying. To implement the JTBD framework into your pricing optimization, check out Matt’s Jobs to Be Done canvas which includes interview questions to unpack your prospects’ needs, and a template to organize your insights into “Jobs Cards”. The magic is making a product that people are willing and happy to pay a premium for. Four simple experiments to test price sensitivity There are many well-known methods used for pricing optimization: anchoring, trials, freemium, etc. Price anchoring is when you create an ‘anchor’ price to make the option you want prospects to choose look like a bargain. Free trials enable people to understand the full value of your product before you charge for it. Freemium get users loving one feature so much that they are willing to pay for other features. A/B testing allows you to test selling your product at different price points. The Van Westendorp model Another way to test price sensitivity is the Van Westendorp model. Once users understand the product value, ask them four questions: At what price would be so cheap that you would doubt this product’s quality? At what price does this start to seem like a good deal? At what price is this starting to seem expensive? At what price would the product be ridiculously expensive? The middle is never really a good pricing strategy. Either you’re trying to be the low-end, cheap and cheerful provider, or you’re trying to be a premium product. (..) If you’re trying to set pricing for a new feature or product from scratch, that’s a really good way to start. 90% of growth comes from 10% of the activities When you’ve got a bunch of existing loyal customers, the quickest way to generate free cash flow is to raise prices. So, [at PayPal] we made a price increase. (..) But the big opportunities in payments were really in delivering value to customers. And other companies went with a long-term focus and they were able to capture that value. Price increases are just one lever you can pull, which might be the wrong one. Looking back at PayPal’s growth and success, Matt was struck by how few actions have an impact on growth. All of their growth really just came down to five things. (..) But the point is that PayPal obviously did a lot more than five things. They spent millions on different campaigns, building products that didn’t really have a big impact. This applies to any business according to Matt. For any successful business, when you look back in the beginning, 90% of their growth came from 10% of the stuff they tried. So find your 10% (pricing or not) as quick as you can and focus on it relentlessly. (..) Great startups don’t (cannot!) waste time on little stuff. Focus on the right stuff To grow, focus on the right things. Find your 10% and focus on it relentlessly. Discover what’s the big lever we can pull. And frame up your pricing in terms of customer value. Focus on the big stuff, and the big stuff may or may not be pricing depending on where you are in your business. If it is pricing, then 1) Make sure people fully understand the value of your product in the context of what they’re trying to do in their lives. 2) Make sure that you’ve removed or addressed all the non-financial barriers.

<sys> [INST] Pricing & Jobs to be Done with Matt Lerner of Startup Core Strengths [/INST] In this episode of SaaS Open Mic, I speak with Matt Lerner, the founder and CEO of Startup Core Strengths. He shares his perspective on establishing and optimizing pricing using the Jobs to Be Done framework. Matt spent 15 years as a marketer and General Manager in Silicon Valley, including ten years at PayPal. Later, as a VC at 500 Startups, he led dozens of early-stage investments. Now, Matt is running Startup Core Strengths, a live online program to help startups find their big growth levers, and pull them. Tune in or read the summary below. Two common pricing mistakes founders make How to optimize SaaS pricing with Jobs to be Done Four simple experiments to test price sensitivity 90% of growth comes from 10% of the activities Two common pricing mistakes founders make Matt has worked with dozens of startups and scaleups in his time at 500 Startups and Startup Core Strengths. A challenge that every company must face at some point is optimizing pricing or setting a price for a new product or feature. In Matt’s experience, founders make two common pricing mistakes when optimizing pricing: missing the mark on explaining the product’s value and overlooking non-financial costs. Unclear value of the product If you neglect to explain your product’s value thoroughly, it impacts conversion rates very quickly. Your growth will slow down. If people aren’t buying the product, they [founders] lower the price. And the real reason they’re not buying the product isn’t the price, it’s probably that they don’t actually understand the value of the product. – Matt Lerner Furthermore, lowering the price can be counterproductive as it can introduce more doubt and anxiety about the quality of your product. Instead of lowering the price, what you want to do is find out the real barriers to purchase. And remove those first. Once people understand the value, they become a lot less price sensitive. Overlooking non-financial costs Are you aware of all the blockers that prevent your prospects from purchasing your solution? Your prospects might be concerned about high switching costs, gettings approvals from stakeholders, or re-training staff. Remove non-financial barriers before changing your pricing strategy. Any decent salesperson can sell a Ferrari for a dollar. That’s not the magic. The magic is making a product that people are willing and happy to pay a premium for. So make sure that you understand the value and the barriers before you start mucking about with the price. How to optimize SaaS pricing with Jobs to be Done Jobs to Be Done (JTBD) interviews are widespread in product management. We use jobs to be done interviews to understand their life before the product. What do they think they were looking for to solve this problem? What alternative solutions did they consider? Matt noticed that the knowledge his portfolio companies gained from the JTBD interviews matched perfectly to inform the pricing strategy. After all, people don’t just buy products. They “hire” them to do “jobs” (solve a problem). Your success depends on understanding the actual “jobs” customers use your product for. Make sure you understand the value you’re bringing to your customers to optimize your pricing. A lot of times, people’s jobs to be done are not functional. They’re social and emotional. They’re trying to impress other people, they’re worried about what people will think of them, and that’s the value that their customers are paying. To implement the JTBD framework into your pricing optimization, check out Matt’s Jobs to Be Done canvas which includes interview questions to unpack your prospects’ needs, and a template to organize your insights into “Jobs Cards”. The magic is making a product that people are willing and happy to pay a premium for. Four simple experiments to test price sensitivity There are many well-known methods used for pricing optimization: anchoring, trials, freemium, etc. Price anchoring is when you create an ‘anchor’ price to make the option you want prospects to choose look like a bargain. Free trials enable people to understand the full value of your product before you charge for it. Freemium get users loving one feature so much that they are willing to pay for other features. A/B testing allows you to test selling your product at different price points. The Van Westendorp model Another way to test price sensitivity is the Van Westendorp model. Once users understand the product value, ask them four questions: At what price would be so cheap that you would doubt this product’s quality? At what price does this start to seem like a good deal? At what price is this starting to seem expensive? At what price would the product be ridiculously expensive? The middle is never really a good pricing strategy. Either you’re trying to be the low-end, cheap and cheerful provider, or you’re trying to be a premium product. (..) If you’re trying to set pricing for a new feature or product from scratch, that’s a really good way to start. 90% of growth comes from 10% of the activities When you’ve got a bunch of existing loyal customers, the quickest way to generate free cash flow is to raise prices. So, [at PayPal] we made a price increase. (..) But the big opportunities in payments were really in delivering value to customers. And other companies went with a long-term focus and they were able to capture that value. Price increases are just one lever you can pull, which might be the wrong one. Looking back at PayPal’s growth and success, Matt was struck by how few actions have an impact on growth. All of their growth really just came down to five things. (..) But the point is that PayPal obviously did a lot more than five things. They spent millions on different campaigns, building products that didn’t really have a big impact. This applies to any business according to Matt. For any successful business, when you look back in the beginning, 90% of their growth came from 10% of the stuff they tried. So find your 10% (pricing or not) as quick as you can and focus on it relentlessly. (..) Great startups don’t (cannot!) waste time on little stuff. Focus on the right stuff To grow, focus on the right things. Find your 10% and focus on it relentlessly. Discover what’s the big lever we can pull. And frame up your pricing in terms of customer value. Focus on the big stuff, and the big stuff may or may not be pricing depending on where you are in your business. If it is pricing, then 1) Make sure people fully understand the value of your product in the context of what they’re trying to do in their lives. 2) Make sure that you’ve removed or addressed all the non-financial barriers. </sys

What Is a Good Monthly Growth Rate for SaaS Startups?. “When you stop growing, you start dying” said William S. Burroughs. That’s just as true for SaaS startups as it is for life. Growth is key to building any successful SaaS startup. So, what is a good growth rate for a SaaS subscription business? In this post, we analyze anonymized and aggregated data from ChartMogul to find the answer. Later, we provide an overview of segments, and share insights on how they can help you unlock your startups’ growth. Compound monthly growth rate by MRR range The chart below shows the median compound monthly growth rate (CMGR) for SaaS startups split by monthly recurring revenue (MRR) range. In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows by 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizeable revenue, growth slows down a bit but remains well over 2% per month. The chart below shows the 25th and 75th percentile of CMGR, in addition to the median. The top section in light blue is the 75th percentile. The blue dot in the middle is the median. And the bottom section in pink is the 25th percentile. As you can see, the dispersion in growth is highest in the early stages. The fastest startups outgrow slower ones multiple times over. This is expected, as some startups find product-market fit (PMF) and start scaling, while others keep searching for it. Calculation Methodology. We calculated CMGR using the following formula. We limited the duration of the analysis to the past 12 months. In our opinion, if you analyze data older than 12 months, you start to encounter issues such as 1) the economic scenario changing or 2) the company jumping from one MRR band to another. Factors that influence your growth rate Many factors influence the growth rate of your SaaS startup, some of which are: Adoption — Does your target audience have that lightbulb moment where they realize the value of your product? Do they sign up for a trial to evaluate what you offer? Product usage and engagement — Is a user continuously engaged with the product? Or do they simply sign up and never revisit again? Engagement is a strong indication of eventual purchase. Conversion rates — How many of your leads convert to paying subscribers? Are leads still interested after their initial trial period? New leads source — Where are the new leads coming from? Are they only/primarily coming from paid marketing initiatives, or are they mostly coming from referrals/organic search? Organic leads are often more knowledgeable about the problem you are solving and/or have the highest intent, which indicates they are further ahead in their buying journey compared to leads who came via paid marketing. Reactivations — Do customers come back after they’ve churned ? This is a huge opportunity to win back customers who stopped using your product due to pricing, key features missing, or unsupported integrations. Expansion — Are your subscribers upgrading their subscription? If yes, what actions result in an expansion? If you charge per user per month and subscribers keep adding more users, that’s a super interesting trait. Or you might be offering additional products which your subscribers buy in addition to your main offering. Churn — The overall growth of the business depends on how much you lose each month. If you add 10 subscribers but lose 9, you really just grew by 1. Once you are clear why and how this happens, you can start digging deeper and increase your overall growth rate by reducing churn. When looking at the various stages in the customer lifecycle, it’s important to understand all aspects of the funnel. Optimizing each stage will eventually lead to your desired growth rate. Unlocking growth using segmentation Growth is a key element on your road to success. Here’s why segmenting your data is important to unlock that growth, and gain further insights. Why do SaaS businesses need segmentation? Overall metric averages are helpful to see directionality, but they often mask the underlying segment dynamics. For example, the chart on the left below, shows you a metric (say MRR) on average. Whereas the one on the right shows you the same metric split by segment of customers. Clearly, the second chart tells a more interesting story. It highlights that Segment 4 customers are the ones that you are getting the most MRR from, so you should double down on acquiring them (given they have the same acquisition cost)! Segmentation is how HubSpot grew its business, as well. Brad Coffey, former Chief Strategy Officer at HubSpot shares their story. At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies. As one good example – when we started this analysis, we had 12 reps selling directly into the VSB market and 4 reps selling through Value Added Resellers (VARs). When we looked at the math we realized we had a LTV:CAC ratio of 1.5 selling direct, and a LTV:CAC ratio of 5 selling through the channel. The solution was obvious. Twelve months later we had flipped our approach – keeping just 2 reps selling direct and 25 reps selling through the channel. This dramatically improved our overall economics in the segment and allowed us to continue growing. Brad Coffey, former Chief Strategy Officer at HubSpot Creating customer segments Segmentation is an art on its own. It can be a challenge to create meaningful, actionable segments; however, there are some well-worn segments you can start looking at right away: By geography i.e. by country or region that shares unique characteristics By plan or product line By marketing/acquisition channel By usage metrics (last login, using a certain feature, etc) By company stats: size, industry, funding, etc By satisfaction metrics such as NPS score Each of the above segments can be tested against their impact across each of the key SaaS metrics — conversion, MRR, Lifetime Value, Churn etc. Segmentation is powerful, and can help you identify areas that you should focus on to unlock more growth. Learn more about getting started with segmentation in ChartMogul with this guide. Log in to your account or start your 14-day trial today. Further Reading SaaS Benchmarks Report What Is a Good Customer Churn Rate? What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements

[INST] What Is a Good Monthly Growth Rate for SaaS Startups? [/INST]

“When you stop growing, you start dying” said William S. Burroughs. That’s just as true for SaaS startups as it is for life. Growth is key to building any successful SaaS startup. So, what is a good growth rate for a SaaS subscription business? In this post, we analyze anonymized and aggregated data from ChartMogul to find the answer. Later, we provide an overview of segments, and share insights on how they can help you unlock your startups’ growth. Compound monthly growth rate by MRR range The chart below shows the median compound monthly growth rate (CMGR) for SaaS startups split by monthly recurring revenue (MRR) range. In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows by 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizeable revenue, growth slows down a bit but remains well over 2% per month. The chart below shows the 25th and 75th percentile of CMGR, in addition to the median. The top section in light blue is the 75th percentile. The blue dot in the middle is the median. And the bottom section in pink is the 25th percentile. As you can see, the dispersion in growth is highest in the early stages. The fastest startups outgrow slower ones multiple times over. This is expected, as some startups find product-market fit (PMF) and start scaling, while others keep searching for it. Calculation Methodology. We calculated CMGR using the following formula. We limited the duration of the analysis to the past 12 months. In our opinion, if you analyze data older than 12 months, you start to encounter issues such as 1) the economic scenario changing or 2) the company jumping from one MRR band to another. Factors that influence your growth rate Many factors influence the growth rate of your SaaS startup, some of which are: Adoption — Does your target audience have that lightbulb moment where they realize the value of your product? Do they sign up for a trial to evaluate what you offer? Product usage and engagement — Is a user continuously engaged with the product? Or do they simply sign up and never revisit again? Engagement is a strong indication of eventual purchase. Conversion rates — How many of your leads convert to paying subscribers? Are leads still interested after their initial trial period? New leads source — Where are the new leads coming from? Are they only/primarily coming from paid marketing initiatives, or are they mostly coming from referrals/organic search? Organic leads are often more knowledgeable about the problem you are solving and/or have the highest intent, which indicates they are further ahead in their buying journey compared to leads who came via paid marketing. Reactivations — Do customers come back after they’ve churned ? This is a huge opportunity to win back customers who stopped using your product due to pricing, key features missing, or unsupported integrations. Expansion — Are your subscribers upgrading their subscription? If yes, what actions result in an expansion? If you charge per user per month and subscribers keep adding more users, that’s a super interesting trait. Or you might be offering additional products which your subscribers buy in addition to your main offering. Churn — The overall growth of the business depends on how much you lose each month. If you add 10 subscribers but lose 9, you really just grew by 1. Once you are clear why and how this happens, you can start digging deeper and increase your overall growth rate by reducing churn. When looking at the various stages in the customer lifecycle, it’s important to understand all aspects of the funnel. Optimizing each stage will eventually lead to your desired growth rate. Unlocking growth using segmentation Growth is a key element on your road to success. Here’s why segmenting your data is important to unlock that growth, and gain further insights. Why do SaaS businesses need segmentation? Overall metric averages are helpful to see directionality, but they often mask the underlying segment dynamics. For example, the chart on the left below, shows you a metric (say MRR) on average. Whereas the one on the right shows you the same metric split by segment of customers. Clearly, the second chart tells a more interesting story. It highlights that Segment 4 customers are the ones that you are getting the most MRR from, so you should double down on acquiring them (given they have the same acquisition cost)! Segmentation is how HubSpot grew its business, as well. Brad Coffey, former Chief Strategy Officer at HubSpot shares their story. At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies. As one good example – when we started this analysis, we had 12 reps selling directly into the VSB market and 4 reps selling through Value Added Resellers (VARs). When we looked at the math we realized we had a LTV:CAC ratio of 1.5 selling direct, and a LTV:CAC ratio of 5 selling through the channel. The solution was obvious. Twelve months later we had flipped our approach – keeping just 2 reps selling direct and 25 reps selling through the channel. This dramatically improved our overall economics in the segment and allowed us to continue growing. Brad Coffey, former Chief Strategy Officer at HubSpot Creating customer segments Segmentation is an art on its own. It can be a challenge to create meaningful, actionable segments; however, there are some well-worn segments you can start looking at right away: By geography i.e. by country or region that shares unique characteristics By plan or product line By marketing/acquisition channel By usage metrics (last login, using a certain feature, etc) By company stats: size, industry, funding, etc By satisfaction metrics such as NPS score Each of the above segments can be tested against their impact across each of the key SaaS metrics — conversion, MRR, Lifetime Value, Churn etc. Segmentation is powerful, and can help you identify areas that you should focus on to unlock more growth. Learn more about getting started with segmentation in ChartMogul with this guide. Log in to your account or start your 14-day trial today. Further Reading SaaS Benchmarks Report What Is a Good Customer Churn Rate? What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements

<sys> [INST] What Is a Good Monthly Growth Rate for SaaS Startups? [/INST] “When you stop growing, you start dying” said William S. Burroughs. That’s just as true for SaaS startups as it is for life. Growth is key to building any successful SaaS startup. So, what is a good growth rate for a SaaS subscription business? In this post, we analyze anonymized and aggregated data from ChartMogul to find the answer. Later, we provide an overview of segments, and share insights on how they can help you unlock your startups’ growth. Compound monthly growth rate by MRR range The chart below shows the median compound monthly growth rate (CMGR) for SaaS startups split by monthly recurring revenue (MRR) range. In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows by 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizeable revenue, growth slows down a bit but remains well over 2% per month. The chart below shows the 25th and 75th percentile of CMGR, in addition to the median. The top section in light blue is the 75th percentile. The blue dot in the middle is the median. And the bottom section in pink is the 25th percentile. As you can see, the dispersion in growth is highest in the early stages. The fastest startups outgrow slower ones multiple times over. This is expected, as some startups find product-market fit (PMF) and start scaling, while others keep searching for it. Calculation Methodology. We calculated CMGR using the following formula. We limited the duration of the analysis to the past 12 months. In our opinion, if you analyze data older than 12 months, you start to encounter issues such as 1) the economic scenario changing or 2) the company jumping from one MRR band to another. Factors that influence your growth rate Many factors influence the growth rate of your SaaS startup, some of which are: Adoption — Does your target audience have that lightbulb moment where they realize the value of your product? Do they sign up for a trial to evaluate what you offer? Product usage and engagement — Is a user continuously engaged with the product? Or do they simply sign up and never revisit again? Engagement is a strong indication of eventual purchase. Conversion rates — How many of your leads convert to paying subscribers? Are leads still interested after their initial trial period? New leads source — Where are the new leads coming from? Are they only/primarily coming from paid marketing initiatives, or are they mostly coming from referrals/organic search? Organic leads are often more knowledgeable about the problem you are solving and/or have the highest intent, which indicates they are further ahead in their buying journey compared to leads who came via paid marketing. Reactivations — Do customers come back after they’ve churned ? This is a huge opportunity to win back customers who stopped using your product due to pricing, key features missing, or unsupported integrations. Expansion — Are your subscribers upgrading their subscription? If yes, what actions result in an expansion? If you charge per user per month and subscribers keep adding more users, that’s a super interesting trait. Or you might be offering additional products which your subscribers buy in addition to your main offering. Churn — The overall growth of the business depends on how much you lose each month. If you add 10 subscribers but lose 9, you really just grew by 1. Once you are clear why and how this happens, you can start digging deeper and increase your overall growth rate by reducing churn. When looking at the various stages in the customer lifecycle, it’s important to understand all aspects of the funnel. Optimizing each stage will eventually lead to your desired growth rate. Unlocking growth using segmentation Growth is a key element on your road to success. Here’s why segmenting your data is important to unlock that growth, and gain further insights. Why do SaaS businesses need segmentation? Overall metric averages are helpful to see directionality, but they often mask the underlying segment dynamics. For example, the chart on the left below, shows you a metric (say MRR) on average. Whereas the one on the right shows you the same metric split by segment of customers. Clearly, the second chart tells a more interesting story. It highlights that Segment 4 customers are the ones that you are getting the most MRR from, so you should double down on acquiring them (given they have the same acquisition cost)! Segmentation is how HubSpot grew its business, as well. Brad Coffey, former Chief Strategy Officer at HubSpot shares their story. At HubSpot, we started to see some of our biggest improvements in unit economics when we started segmenting our business and calculating the LTV to CAC ratio for each of our personas and go to market strategies. As one good example – when we started this analysis, we had 12 reps selling directly into the VSB market and 4 reps selling through Value Added Resellers (VARs). When we looked at the math we realized we had a LTV:CAC ratio of 1.5 selling direct, and a LTV:CAC ratio of 5 selling through the channel. The solution was obvious. Twelve months later we had flipped our approach – keeping just 2 reps selling direct and 25 reps selling through the channel. This dramatically improved our overall economics in the segment and allowed us to continue growing. Brad Coffey, former Chief Strategy Officer at HubSpot Creating customer segments Segmentation is an art on its own. It can be a challenge to create meaningful, actionable segments; however, there are some well-worn segments you can start looking at right away: By geography i.e. by country or region that shares unique characteristics By plan or product line By marketing/acquisition channel By usage metrics (last login, using a certain feature, etc) By company stats: size, industry, funding, etc By satisfaction metrics such as NPS score Each of the above segments can be tested against their impact across each of the key SaaS metrics — conversion, MRR, Lifetime Value, Churn etc. Segmentation is powerful, and can help you identify areas that you should focus on to unlock more growth. Learn more about getting started with segmentation in ChartMogul with this guide. Log in to your account or start your 14-day trial today. Further Reading SaaS Benchmarks Report What Is a Good Customer Churn Rate? What Is a Good Net MRR & Gross MRR Churn Rate? Understanding and Benchmarking Your MRR Movements </sys

The Best SaaS Reads of 2022. Every week, I scour the web to pick the top SaaS reads for our weekly newsletter, the SaaS Roundup. This year alone, I shared over 200 curated reads on leadership, growth, pricing, SaaS metrics, benchmarks, and much more. Here are the best SaaS reads of 2022; those articles and charts that resonated most with 19,000 weekly readers. Jump straight onto a section using the links below. Top 10 SaaS Reads of the Year Top 5 ChartMogul Reads Top 5 Charts of the Year Special mention to the teams at OpenView, Bessemer & Battery for appearing multiple times on the list. Why not subscribe to the SaaS Roundup? Join over 19,000 readers and get the next issue straight to your inbox. Top 10 SaaS Reads of the Year 1. How Cheap a Product Can You Have And Still Have Salespeople? – Jason Lemkin, SaaStr What price point can usually be supported by sales reps? In most cases, a $19/month product can’t be supported by a sales rep but can a $99/month product be? Here is some math. “OK, so if an SMB rep needs to make say $80-$100k in OTE (base + bonus) … and you need to clear, say, $300k in revenue from that rep to make the math work on your side … at, say, 100 closed deals a year, to bring in $300k to the company, each deal has to have a $3,000 ACV on average” 2. The SaaS Org Chart – David Sacks, Craft Ventures You’re the founder of a fast-growing SaaS startup that has just raised funding. Congrats! You now need to hire rapidly to seize the opportunity. But how much should you hire, what roles should you hire, and what should the org chart look like when you’re done? “Here are some target org charts that a new Series A, Series B, or Series C stage SaaS startup should be staffing towards. Series A Target — 50 Employee Org, Series B Target — 125 Employee Org, Series C Target — 400 Employee Org.” 3. I looked at 105 SaaS Pricing Pages. Here’s What I Learned – Caya, Slidebean Slideabean analyzed over 100 pricing pages to understand the various pricing models in SaaS. In the video, Caya goes over the pros and cons of flat, tiered, usage, and user-based pricing models. “SaaS allows predictable revenue. It lets us estimate customer lifetime value with unprecedented accuracy. These days you can even raise capital or get a loan based on your MRR.” 4. 2022 OpenView SaaS Benchmarks Report – Curt Townshend, Kyle Poyar, OpenView Partners OpenView partners shared takeaways from a survey of over 600 SaaS companies. In addition to sharing benchmarks on growth & retention, they share numerous insights on hiring trends, SaaS valuations, & PLG adoption. “Great CAC payback and great NDR are clear north stars for leveraging optionality, but neither are easy to come by. Smaller companies have shorter buying cycles (lower CAC), but target customers are generally less committed to your product and may be quicker to churn (lower NDR).” 5. Scaling From $1 to $10 Million ARR – Mary D’Onofrio, Janelle Teng, Ethan Ding, Bessemer Venture Partners Bessemer VP shares a playbook on how to scale your business from $1 to $10mm ARR. What specifically caught my attention was the detailed data on benchmarks related to retention, growth, acquisition cost, expenses, etc. “While not deterministic, growth endurance (the rate at which growth is retained from one year to the next) tends to be about 70% in private cloud companies, meaning that you should expect next year’s growth rate to be approximately 70% of the current year.” 6. What I Learned About Pricing From an Entrepreneur Whose Company Sold for $4.75 Billion – Aaron Dinin, Entrepreneur’s Handbook Finding the right price for your product offering takes some complex math and solid positioning. Balancing your CAC:LTV ratio and covering how much your software costs to develop are crucial, as are aligning price with the perceived value of your product. Learn more about how Phil Fernadez priced his pioneering software Marketo, which sold to Adobe for $4.75 Billion. “And so the idea was sort of less specifically what the software would do, but instead, it was this opportunity to democratize the whole category and bring very powerful and sophisticated marketing technology to people that otherwise didn’t have access to such things. And that was really the founding idea.” 7. Your Guide to Product Qualified Leads (PQLs) – Kyle Poyar, OpenView According to OpenView’s Product Benchmarks report, only one in four SaaS companies have a PQL strategy, even though PQLs convert at 15-30% and are significantly more valuable than MQLs. If you’re looking to shift to a PQL strategy, or improve your current approach, this article is for you. “Your ultimate goal should be to engage with the right accounts at the right time with the right message based on what you know about them. Treating PQLs as one-size-fits-all would miss the point.” 8. The Five Must-Have Board Slides for Sales/Revenue Leaders – Bill Binch, Battery Ventures Bill Bench has spent the last 15 years of his career attending a lot of quarterly board meetings. In this post, he shares with us five slides that every board meeting deck must have. “As a wise mentor once told me, no one ever gets a promotion from a board meeting — but people sure do get fired afterwards. Don’t present slides; present the story. Board members are skilled at thin slicing through data and composing their questions ahead of time. Don’t feel the need to present every nuance around your data — get to the point.” 9. The Ultimate Guide to SaaS Pricing Models, Strategies & Psychological Hacks – Ryan Law, Cobloom Few things impact revenue as much as your pricing. And yet, the average SaaS startup spends just six hours on its pricing strategy. That’s not six hours a week, or six hours a month, it’s six hours in total. So to simplify SaaS pricing, here is an in-depth guide analyzing the crucial components of SaaS pricing strategy. “Price is a relative concept, and when we assess the price of something, we use a reference point to work out its value. If we were buying a car, we’d compare its price to the price of other cars on the lot.” 10. Battery’s Cloud Quarterly – Founders Almanac – Neeraj Agrawal, Brandon Gleklen, Battery Ventures Full of data insights, this 42-slide deck from Battery Ventures is a must-read. They go into details around i) ARR per employee benchmarks, ii) Public cloud valuations, iii) Rule of 40, iv) State of SaaS funding, and much more… “ARR per employee is a great efficiency metric to rally a company around, as growth efficiency metrics (eg. CAC Payback and magic number) can feel less tangible for employees outside the go-to-market organization.” Top 5 ChartMogul Reads 1. What Is a Good Monthly Growth Rate for SaaS Startups? – Thomas Anastaselos Did you ever wonder how your growth compares against your peers? We analyzed and aggregated data from ChartMogul to find out what a good growth rate for SaaS startups truly is. “In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows at 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizable revenue, growth slows down a bit but remains well over 2% per month.” 2. What Is a Good Customer Churn Rate? – Sid Jain What according to you is a good customer churn rate? Worry not, we’ve got the answer. We number-crunched data from over 2,300 SaaS businesses to find out. “The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases.” 3. How a Pricing Migration Enabled ChartMogul To Retain the Right Type of Customers – Ingmar Zahorsky, Bianca Wilk Our VP of Customer Success shares his takeaways from the pricing migration that started in 2018. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. “In that customer segment, we lost 178 accounts. From 322 subscribers in September 2018, we went to 144 in February 2020. Account retention was 44.7%. However, looking at MRR in that same segment tells a different story. We went from $57,640 to $85,838 and attained almost 148.9% MRR retention.” 4. SaaS Benchmarks Report – Sid Jain This year, we released our first-ever ChartMogul SaaS Benchmarks Report. In this report, we analyze, anonymized and aggregated data from thousands of SaaS businesses to bring you benchmarks for early-stage SaaS companies. “Companies with a higher average revenue per account (ARPA) tend to grow 1.5-2x faster. A higher ARPA corresponds to a lower customer churn rate.” 5. SaaS Metrics Every Startup Founder Should Know – Andrew Gazdecki You don’t know how your business is doing if you’re not measuring its performance. The best way to keep track of your growth is to monitor your SaaS metrics. “The customer engagement score is an overview of your customers’ level of engagement. You can create your own engagement score with inputs based on the activity and usage of your product or service. For example, a customer who’s using your product daily for more than an hour has a higher customer engagement score than someone who’s only using your product once a month.” Top 5 Charts of the Year 1. What’s the Average Conversion Rate for SaaS Businesses? Only 0.7% of visitors to your website convert to paid. That number is just 0.3% if you offer a freemium product. Source: OpenView Product Benchmarks 2022 2. What’s the Major Expense Line Item for Most Venture-Backed SaaS Businesses? Engineering? No, it’s sales & marketing (S&M). The chart below shows the margin structure by ARR range for venture-backed SaaS companies. Marketing & sales make up for the largest share of spending, making up for almost ~95% of revenue for companies with ARR <$10m. As companies grow and reach scale (>$100m ARR), S&M expense still makes up for ~50% of revenue. Source: Bessemer Venture Partners 3. What Were the Fastest Growing Apps at the Workplace in 2021? Notion was the fastest-growing work app last year, followed by TripActions (expense & spend management) & Postman (API building platform). 5 of the top 10 fastest-growing work apps (Notion, Figma, Miro, Airtable & Monday.com) were built with team collaboration in mind. Source: Okta Business at Work Report 4. What’s a Good CAC Payback Period? It depends on the market you sell to. Companies selling to consumers/SMB segment have shorter buying cycles/lower CACs compared to those selling to enterprise customers. Source: OpenView SaaS Benchmarks Report 5. What’s a Good Exit (M&A) Multiple in SaaS? Last quarter, SaaS companies were acquired at a median M&A exit multiple of 5.2x times EV/Revenue (trailing 12 months). This has come down from the highs of 2021 (down 35% YoY) but is still 10-15% ahead of pre-pandemic levels. Source: Software Equity Group Happy Reading! Thank you so much for being a part of the SaaS Roundup this year. If you have any suggestions at all for the newsletter, reach out. Join over 19,000 readers who get the SaaS Roundup straight to their inbox each week.

[INST] The Best SaaS Reads of 2022 [/INST]

Every week, I scour the web to pick the top SaaS reads for our weekly newsletter, the SaaS Roundup. This year alone, I shared over 200 curated reads on leadership, growth, pricing, SaaS metrics, benchmarks, and much more. Here are the best SaaS reads of 2022; those articles and charts that resonated most with 19,000 weekly readers. Jump straight onto a section using the links below. Top 10 SaaS Reads of the Year Top 5 ChartMogul Reads Top 5 Charts of the Year Special mention to the teams at OpenView, Bessemer & Battery for appearing multiple times on the list. Why not subscribe to the SaaS Roundup? Join over 19,000 readers and get the next issue straight to your inbox. Top 10 SaaS Reads of the Year 1. How Cheap a Product Can You Have And Still Have Salespeople? – Jason Lemkin, SaaStr What price point can usually be supported by sales reps? In most cases, a $19/month product can’t be supported by a sales rep but can a $99/month product be? Here is some math. “OK, so if an SMB rep needs to make say $80-$100k in OTE (base + bonus) … and you need to clear, say, $300k in revenue from that rep to make the math work on your side … at, say, 100 closed deals a year, to bring in $300k to the company, each deal has to have a $3,000 ACV on average” 2. The SaaS Org Chart – David Sacks, Craft Ventures You’re the founder of a fast-growing SaaS startup that has just raised funding. Congrats! You now need to hire rapidly to seize the opportunity. But how much should you hire, what roles should you hire, and what should the org chart look like when you’re done? “Here are some target org charts that a new Series A, Series B, or Series C stage SaaS startup should be staffing towards. Series A Target — 50 Employee Org, Series B Target — 125 Employee Org, Series C Target — 400 Employee Org.” 3. I looked at 105 SaaS Pricing Pages. Here’s What I Learned – Caya, Slidebean Slideabean analyzed over 100 pricing pages to understand the various pricing models in SaaS. In the video, Caya goes over the pros and cons of flat, tiered, usage, and user-based pricing models. “SaaS allows predictable revenue. It lets us estimate customer lifetime value with unprecedented accuracy. These days you can even raise capital or get a loan based on your MRR.” 4. 2022 OpenView SaaS Benchmarks Report – Curt Townshend, Kyle Poyar, OpenView Partners OpenView partners shared takeaways from a survey of over 600 SaaS companies. In addition to sharing benchmarks on growth & retention, they share numerous insights on hiring trends, SaaS valuations, & PLG adoption. “Great CAC payback and great NDR are clear north stars for leveraging optionality, but neither are easy to come by. Smaller companies have shorter buying cycles (lower CAC), but target customers are generally less committed to your product and may be quicker to churn (lower NDR).” 5. Scaling From $1 to $10 Million ARR – Mary D’Onofrio, Janelle Teng, Ethan Ding, Bessemer Venture Partners Bessemer VP shares a playbook on how to scale your business from $1 to $10mm ARR. What specifically caught my attention was the detailed data on benchmarks related to retention, growth, acquisition cost, expenses, etc. “While not deterministic, growth endurance (the rate at which growth is retained from one year to the next) tends to be about 70% in private cloud companies, meaning that you should expect next year’s growth rate to be approximately 70% of the current year.” 6. What I Learned About Pricing From an Entrepreneur Whose Company Sold for $4.75 Billion – Aaron Dinin, Entrepreneur’s Handbook Finding the right price for your product offering takes some complex math and solid positioning. Balancing your CAC:LTV ratio and covering how much your software costs to develop are crucial, as are aligning price with the perceived value of your product. Learn more about how Phil Fernadez priced his pioneering software Marketo, which sold to Adobe for $4.75 Billion. “And so the idea was sort of less specifically what the software would do, but instead, it was this opportunity to democratize the whole category and bring very powerful and sophisticated marketing technology to people that otherwise didn’t have access to such things. And that was really the founding idea.” 7. Your Guide to Product Qualified Leads (PQLs) – Kyle Poyar, OpenView According to OpenView’s Product Benchmarks report, only one in four SaaS companies have a PQL strategy, even though PQLs convert at 15-30% and are significantly more valuable than MQLs. If you’re looking to shift to a PQL strategy, or improve your current approach, this article is for you. “Your ultimate goal should be to engage with the right accounts at the right time with the right message based on what you know about them. Treating PQLs as one-size-fits-all would miss the point.” 8. The Five Must-Have Board Slides for Sales/Revenue Leaders – Bill Binch, Battery Ventures Bill Bench has spent the last 15 years of his career attending a lot of quarterly board meetings. In this post, he shares with us five slides that every board meeting deck must have. “As a wise mentor once told me, no one ever gets a promotion from a board meeting — but people sure do get fired afterwards. Don’t present slides; present the story. Board members are skilled at thin slicing through data and composing their questions ahead of time. Don’t feel the need to present every nuance around your data — get to the point.” 9. The Ultimate Guide to SaaS Pricing Models, Strategies & Psychological Hacks – Ryan Law, Cobloom Few things impact revenue as much as your pricing. And yet, the average SaaS startup spends just six hours on its pricing strategy. That’s not six hours a week, or six hours a month, it’s six hours in total. So to simplify SaaS pricing, here is an in-depth guide analyzing the crucial components of SaaS pricing strategy. “Price is a relative concept, and when we assess the price of something, we use a reference point to work out its value. If we were buying a car, we’d compare its price to the price of other cars on the lot.” 10. Battery’s Cloud Quarterly – Founders Almanac – Neeraj Agrawal, Brandon Gleklen, Battery Ventures Full of data insights, this 42-slide deck from Battery Ventures is a must-read. They go into details around i) ARR per employee benchmarks, ii) Public cloud valuations, iii) Rule of 40, iv) State of SaaS funding, and much more… “ARR per employee is a great efficiency metric to rally a company around, as growth efficiency metrics (eg. CAC Payback and magic number) can feel less tangible for employees outside the go-to-market organization.” Top 5 ChartMogul Reads 1. What Is a Good Monthly Growth Rate for SaaS Startups? – Thomas Anastaselos Did you ever wonder how your growth compares against your peers? We analyzed and aggregated data from ChartMogul to find out what a good growth rate for SaaS startups truly is. “In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows at 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizable revenue, growth slows down a bit but remains well over 2% per month.” 2. What Is a Good Customer Churn Rate? – Sid Jain What according to you is a good customer churn rate? Worry not, we’ve got the answer. We number-crunched data from over 2,300 SaaS businesses to find out. “The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases.” 3. How a Pricing Migration Enabled ChartMogul To Retain the Right Type of Customers – Ingmar Zahorsky, Bianca Wilk Our VP of Customer Success shares his takeaways from the pricing migration that started in 2018. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. “In that customer segment, we lost 178 accounts. From 322 subscribers in September 2018, we went to 144 in February 2020. Account retention was 44.7%. However, looking at MRR in that same segment tells a different story. We went from $57,640 to $85,838 and attained almost 148.9% MRR retention.” 4. SaaS Benchmarks Report – Sid Jain This year, we released our first-ever ChartMogul SaaS Benchmarks Report. In this report, we analyze, anonymized and aggregated data from thousands of SaaS businesses to bring you benchmarks for early-stage SaaS companies. “Companies with a higher average revenue per account (ARPA) tend to grow 1.5-2x faster. A higher ARPA corresponds to a lower customer churn rate.” 5. SaaS Metrics Every Startup Founder Should Know – Andrew Gazdecki You don’t know how your business is doing if you’re not measuring its performance. The best way to keep track of your growth is to monitor your SaaS metrics. “The customer engagement score is an overview of your customers’ level of engagement. You can create your own engagement score with inputs based on the activity and usage of your product or service. For example, a customer who’s using your product daily for more than an hour has a higher customer engagement score than someone who’s only using your product once a month.” Top 5 Charts of the Year 1. What’s the Average Conversion Rate for SaaS Businesses? Only 0.7% of visitors to your website convert to paid. That number is just 0.3% if you offer a freemium product. Source: OpenView Product Benchmarks 2022 2. What’s the Major Expense Line Item for Most Venture-Backed SaaS Businesses? Engineering? No, it’s sales & marketing (S&M). The chart below shows the margin structure by ARR range for venture-backed SaaS companies. Marketing & sales make up for the largest share of spending, making up for almost ~95% of revenue for companies with ARR <$10m. As companies grow and reach scale (>$100m ARR), S&M expense still makes up for ~50% of revenue. Source: Bessemer Venture Partners 3. What Were the Fastest Growing Apps at the Workplace in 2021? Notion was the fastest-growing work app last year, followed by TripActions (expense & spend management) & Postman (API building platform). 5 of the top 10 fastest-growing work apps (Notion, Figma, Miro, Airtable & Monday.com) were built with team collaboration in mind. Source: Okta Business at Work Report 4. What’s a Good CAC Payback Period? It depends on the market you sell to. Companies selling to consumers/SMB segment have shorter buying cycles/lower CACs compared to those selling to enterprise customers. Source: OpenView SaaS Benchmarks Report 5. What’s a Good Exit (M&A) Multiple in SaaS? Last quarter, SaaS companies were acquired at a median M&A exit multiple of 5.2x times EV/Revenue (trailing 12 months). This has come down from the highs of 2021 (down 35% YoY) but is still 10-15% ahead of pre-pandemic levels. Source: Software Equity Group Happy Reading! Thank you so much for being a part of the SaaS Roundup this year. If you have any suggestions at all for the newsletter, reach out. Join over 19,000 readers who get the SaaS Roundup straight to their inbox each week.

<sys> [INST] The Best SaaS Reads of 2022 [/INST] Every week, I scour the web to pick the top SaaS reads for our weekly newsletter, the SaaS Roundup. This year alone, I shared over 200 curated reads on leadership, growth, pricing, SaaS metrics, benchmarks, and much more. Here are the best SaaS reads of 2022; those articles and charts that resonated most with 19,000 weekly readers. Jump straight onto a section using the links below. Top 10 SaaS Reads of the Year Top 5 ChartMogul Reads Top 5 Charts of the Year Special mention to the teams at OpenView, Bessemer & Battery for appearing multiple times on the list. Why not subscribe to the SaaS Roundup? Join over 19,000 readers and get the next issue straight to your inbox. Top 10 SaaS Reads of the Year 1. How Cheap a Product Can You Have And Still Have Salespeople? – Jason Lemkin, SaaStr What price point can usually be supported by sales reps? In most cases, a $19/month product can’t be supported by a sales rep but can a $99/month product be? Here is some math. “OK, so if an SMB rep needs to make say $80-$100k in OTE (base + bonus) … and you need to clear, say, $300k in revenue from that rep to make the math work on your side … at, say, 100 closed deals a year, to bring in $300k to the company, each deal has to have a $3,000 ACV on average” 2. The SaaS Org Chart – David Sacks, Craft Ventures You’re the founder of a fast-growing SaaS startup that has just raised funding. Congrats! You now need to hire rapidly to seize the opportunity. But how much should you hire, what roles should you hire, and what should the org chart look like when you’re done? “Here are some target org charts that a new Series A, Series B, or Series C stage SaaS startup should be staffing towards. Series A Target — 50 Employee Org, Series B Target — 125 Employee Org, Series C Target — 400 Employee Org.” 3. I looked at 105 SaaS Pricing Pages. Here’s What I Learned – Caya, Slidebean Slideabean analyzed over 100 pricing pages to understand the various pricing models in SaaS. In the video, Caya goes over the pros and cons of flat, tiered, usage, and user-based pricing models. “SaaS allows predictable revenue. It lets us estimate customer lifetime value with unprecedented accuracy. These days you can even raise capital or get a loan based on your MRR.” 4. 2022 OpenView SaaS Benchmarks Report – Curt Townshend, Kyle Poyar, OpenView Partners OpenView partners shared takeaways from a survey of over 600 SaaS companies. In addition to sharing benchmarks on growth & retention, they share numerous insights on hiring trends, SaaS valuations, & PLG adoption. “Great CAC payback and great NDR are clear north stars for leveraging optionality, but neither are easy to come by. Smaller companies have shorter buying cycles (lower CAC), but target customers are generally less committed to your product and may be quicker to churn (lower NDR).” 5. Scaling From $1 to $10 Million ARR – Mary D’Onofrio, Janelle Teng, Ethan Ding, Bessemer Venture Partners Bessemer VP shares a playbook on how to scale your business from $1 to $10mm ARR. What specifically caught my attention was the detailed data on benchmarks related to retention, growth, acquisition cost, expenses, etc. “While not deterministic, growth endurance (the rate at which growth is retained from one year to the next) tends to be about 70% in private cloud companies, meaning that you should expect next year’s growth rate to be approximately 70% of the current year.” 6. What I Learned About Pricing From an Entrepreneur Whose Company Sold for $4.75 Billion – Aaron Dinin, Entrepreneur’s Handbook Finding the right price for your product offering takes some complex math and solid positioning. Balancing your CAC:LTV ratio and covering how much your software costs to develop are crucial, as are aligning price with the perceived value of your product. Learn more about how Phil Fernadez priced his pioneering software Marketo, which sold to Adobe for $4.75 Billion. “And so the idea was sort of less specifically what the software would do, but instead, it was this opportunity to democratize the whole category and bring very powerful and sophisticated marketing technology to people that otherwise didn’t have access to such things. And that was really the founding idea.” 7. Your Guide to Product Qualified Leads (PQLs) – Kyle Poyar, OpenView According to OpenView’s Product Benchmarks report, only one in four SaaS companies have a PQL strategy, even though PQLs convert at 15-30% and are significantly more valuable than MQLs. If you’re looking to shift to a PQL strategy, or improve your current approach, this article is for you. “Your ultimate goal should be to engage with the right accounts at the right time with the right message based on what you know about them. Treating PQLs as one-size-fits-all would miss the point.” 8. The Five Must-Have Board Slides for Sales/Revenue Leaders – Bill Binch, Battery Ventures Bill Bench has spent the last 15 years of his career attending a lot of quarterly board meetings. In this post, he shares with us five slides that every board meeting deck must have. “As a wise mentor once told me, no one ever gets a promotion from a board meeting — but people sure do get fired afterwards. Don’t present slides; present the story. Board members are skilled at thin slicing through data and composing their questions ahead of time. Don’t feel the need to present every nuance around your data — get to the point.” 9. The Ultimate Guide to SaaS Pricing Models, Strategies & Psychological Hacks – Ryan Law, Cobloom Few things impact revenue as much as your pricing. And yet, the average SaaS startup spends just six hours on its pricing strategy. That’s not six hours a week, or six hours a month, it’s six hours in total. So to simplify SaaS pricing, here is an in-depth guide analyzing the crucial components of SaaS pricing strategy. “Price is a relative concept, and when we assess the price of something, we use a reference point to work out its value. If we were buying a car, we’d compare its price to the price of other cars on the lot.” 10. Battery’s Cloud Quarterly – Founders Almanac – Neeraj Agrawal, Brandon Gleklen, Battery Ventures Full of data insights, this 42-slide deck from Battery Ventures is a must-read. They go into details around i) ARR per employee benchmarks, ii) Public cloud valuations, iii) Rule of 40, iv) State of SaaS funding, and much more… “ARR per employee is a great efficiency metric to rally a company around, as growth efficiency metrics (eg. CAC Payback and magic number) can feel less tangible for employees outside the go-to-market organization.” Top 5 ChartMogul Reads 1. What Is a Good Monthly Growth Rate for SaaS Startups? – Thomas Anastaselos Did you ever wonder how your growth compares against your peers? We analyzed and aggregated data from ChartMogul to find out what a good growth rate for SaaS startups truly is. “In the very early days (<$10k MRR), a SaaS startup grows on average by 4.4% every month. That’s 68.0% annualized. As it continues its march towards the $50k MRR mark, it grows at 3.1% every month or 44.9% annualized. Over time, as the company reaches a sizable revenue, growth slows down a bit but remains well over 2% per month.” 2. What Is a Good Customer Churn Rate? – Sid Jain What according to you is a good customer churn rate? Worry not, we’ve got the answer. We number-crunched data from over 2,300 SaaS businesses to find out. “The best companies should target a customer churn rate of <2% per month. This goes down to <1% as your ARPA increases.” 3. How a Pricing Migration Enabled ChartMogul To Retain the Right Type of Customers – Ingmar Zahorsky, Bianca Wilk Our VP of Customer Success shares his takeaways from the pricing migration that started in 2018. ChartMogul lost a large number of legacy customers when migrating them to a new pricing model, however, the highly engaged `good fit` customers enabled ChartMogul’s continued growth. “In that customer segment, we lost 178 accounts. From 322 subscribers in September 2018, we went to 144 in February 2020. Account retention was 44.7%. However, looking at MRR in that same segment tells a different story. We went from $57,640 to $85,838 and attained almost 148.9% MRR retention.” 4. SaaS Benchmarks Report – Sid Jain This year, we released our first-ever ChartMogul SaaS Benchmarks Report. In this report, we analyze, anonymized and aggregated data from thousands of SaaS businesses to bring you benchmarks for early-stage SaaS companies. “Companies with a higher average revenue per account (ARPA) tend to grow 1.5-2x faster. A higher ARPA corresponds to a lower customer churn rate.” 5. SaaS Metrics Every Startup Founder Should Know – Andrew Gazdecki You don’t know how your business is doing if you’re not measuring its performance. The best way to keep track of your growth is to monitor your SaaS metrics. “The customer engagement score is an overview of your customers’ level of engagement. You can create your own engagement score with inputs based on the activity and usage of your product or service. For example, a customer who’s using your product daily for more than an hour has a higher customer engagement score than someone who’s only using your product once a month.” Top 5 Charts of the Year 1. What’s the Average Conversion Rate for SaaS Businesses? Only 0.7% of visitors to your website convert to paid. That number is just 0.3% if you offer a freemium product. Source: OpenView Product Benchmarks 2022 2. What’s the Major Expense Line Item for Most Venture-Backed SaaS Businesses? Engineering? No, it’s sales & marketing (S&M). The chart below shows the margin structure by ARR range for venture-backed SaaS companies. Marketing & sales make up for the largest share of spending, making up for almost ~95% of revenue for companies with ARR <$10m. As companies grow and reach scale (>$100m ARR), S&M expense still makes up for ~50% of revenue. Source: Bessemer Venture Partners 3. What Were the Fastest Growing Apps at the Workplace in 2021? Notion was the fastest-growing work app last year, followed by TripActions (expense & spend management) & Postman (API building platform). 5 of the top 10 fastest-growing work apps (Notion, Figma, Miro, Airtable & Monday.com) were built with team collaboration in mind. Source: Okta Business at Work Report 4. What’s a Good CAC Payback Period? It depends on the market you sell to. Companies selling to consumers/SMB segment have shorter buying cycles/lower CACs compared to those selling to enterprise customers. Source: OpenView SaaS Benchmarks Report 5. What’s a Good Exit (M&A) Multiple in SaaS? Last quarter, SaaS companies were acquired at a median M&A exit multiple of 5.2x times EV/Revenue (trailing 12 months). This has come down from the highs of 2021 (down 35% YoY) but is still 10-15% ahead of pre-pandemic levels. Source: Software Equity Group Happy Reading! Thank you so much for being a part of the SaaS Roundup this year. If you have any suggestions at all for the newsletter, reach out. Join over 19,000 readers who get the SaaS Roundup straight to their inbox each week. </sys

It’s time for SaaS to be boring. If you stay up to date with the SaaS and B2B publishing trends (subscribe to our SaaS Roundup if you don’t!) you may have noticed a number of recently-published articles spelling doom and gloom for Software as a Service. Reading into all of them, you’d probably come away thinking that the industry has moved on to the “next big thing” and the model has no future in the tech industry or elsewhere. Point Nine Capital’s Clement Vouillon started out with an argument that a lot of new SaaS businesses are no longer compatible with the VC model, in his article The Rise of Non “VC compatible” SaaS Companies: “Founders in 2017 can effectively build something in their bedroom, building on an increasing number of “building block” tools, frameworks and API-based services. This means an increase in entries to the market, a lot more bootstrapped companies and overall decreased potential for the huge returns that venture capital demands.” ~ Clement Vouillon If that wasn’t a strong-enough sign, from Europe’s premier SaaS VC, Christoph Janz followed up more recently with a similar take on the topic, The growing dissonance between two business models (SaaS and VC): “There will be more and more SaaS companies that, based on the “pattern recognition” that we’ve developed in the last years, we’d like to invest in but will have to pass on. We can only make 10–15 new investments per year and we’re obviously trying to find the very best ones — the outliers among the outliers, if you will.” ~ Chrisoph Janz Just as Clement started, Christoph discusses the “rise of bootstrapped SaaS”, with some more specifics on how the VC is turning down deals that would have seemed mightily attractive to them just a couple of years ago. He argues that new SaaS businesses today will have to raise the bar even higher than ever before, with growth metrics and traction showing something that’s an “outlier of the outliers.” He was also probably the first person ever to apply a quote from Daft Punk in a Venture Capital article. Nice one, Christoph! Noah Jessop, writing in Hacker Noon, takes the entire discussion a good few steps further with his all-out argument that SaaS is “dying”, in What Comes After SaaS?: “SaaS’s own success is it’s own enemy — the cost and the time to build novel things has fallen significantly. Thus as a software company hits real scale, it’s left in a no man’s land — not large enough to stack, not worthless (or weak enough) to die — but too much competition — from the low end, the high end, from customers cobbling together a series of other tools — to prevent any real growth.” ~ Noah Jessop All valid points, and many of those overlap with the points made in the aforementioned Point Nine articles. So it’s game over, then? Fortunately, the increasingly common “X is DEAD!!!!!” narrative isn’t usually quite as extreme as it’s made out to sound. In this scenario, the word “dying” simply means “not as sexy and hyped as it used to be.” Allow me to explain. Let’s remind ourselves where SaaS is today SaaS is a model for building and selling software products. It’s a way of selling and distributing software to customers that marries very well with the benefits that cloud computing brings: Always-on connectivity, scalability, low onboarding friction and a focus on delivering constant value to the consumer. During the first phase of SaaS (A.K.A. The SaaS Gold Rush), the concept of cloud software was such a revolution in itself that merely taking existing on-premise software and repackaging it for the cloud was a revolutionary move. It wasn’t hard to sell such a solution, if it was in the cloud and functional. The second phase moved towards designing and building software specifically with the cloud in mind, i.e. How does the cloud enable us to sell software in verticals that were never possible before? The third phase saw businesses really care about making cloud software truly great for its users. Consumerization of Enterprise. Why can’t Enterprise software have the same amazing UX as consumer software? SaaS is now “table stakes” for B2B software People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. It’s basically an expectation nowadays that B2B cloud software uses a SaaS model. In almost every team in a modern B2B business, from Engineering to Marketing, Sales to Finance, subscription is normality rather than the exception. About a third of our operating costs at ChartMogul (excluding head count) are spent on SaaS, going to over 40 different products. The result is a more predictable balance sheet with very little capital expenditure and nice, evened out recurring costs featuring far fewer surprises. When evaluating new solutions, we actively seek SaaS, for these reasons. The thing is, there’s nothing sexy about table stakes. People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. What’s actually happening? The recent uptick in discussion must have some substance to it, surely? Well, there are definitely some changes in the industry that have a significant impact for new entrants. The barrier to entry is much lower As Clement discusses in his article, it’s become significantly easier for someone to build a SaaS product from their bedroom — it may be the best time ever to start a SaaS business. Building-block API-based tools like Twilio, Clearbit etc. mean that products can be built by plugging different services together. This leads to… A more saturated market If the barrier to entry is lower then the number of entries to the SaaS market are likely to increase. This is compounded by the unbundling effect, with smaller, more narrowly-focused services competing with those monolithic platforms. Virtually every vertical in SaaS today is fairly tight with competition. There’s very little “green field” left in SaaS. This means that… Opportunities for huge VC returns have decreased As Christoph puts it, “Large VCs need multiple unicorns just to survive”. While there’s been an increase of companies growing to the $1-2M stage, this increase hasn’t been matched at the high-end ($100M+ ARR). What Christoph is saying here is that the techniques and pattern matching they’ve used to find successes is no longer working at the same rate of success. So it’s not actually dying then? Well, in the same way that Noah argues SaaS “is dying”, these things are also “dying”: The Cloud Spreadsheets Email Mobile computing Smart watches Tablets These things are pervasive in our everyday lives. In many cases, we’d be completely lost if they were truly taken away. New businesses are built every day that run on the above technologies. Tens of billions in revenue is made and the industry is as healthy as it’s ever been. It’s just not all that sexy any more. I guess you could say that despite all of the doom and gloom, SaaS is just: “Harder, better, faster, stronger.” (Daft Punk, Harder Better Faster Stronger, 2001) (Sorry Christoph. I had to.)

[INST] It’s time for SaaS to be boring [/INST]

If you stay up to date with the SaaS and B2B publishing trends (subscribe to our SaaS Roundup if you don’t!) you may have noticed a number of recently-published articles spelling doom and gloom for Software as a Service. Reading into all of them, you’d probably come away thinking that the industry has moved on to the “next big thing” and the model has no future in the tech industry or elsewhere. Point Nine Capital’s Clement Vouillon started out with an argument that a lot of new SaaS businesses are no longer compatible with the VC model, in his article The Rise of Non “VC compatible” SaaS Companies: “Founders in 2017 can effectively build something in their bedroom, building on an increasing number of “building block” tools, frameworks and API-based services. This means an increase in entries to the market, a lot more bootstrapped companies and overall decreased potential for the huge returns that venture capital demands.” ~ Clement Vouillon If that wasn’t a strong-enough sign, from Europe’s premier SaaS VC, Christoph Janz followed up more recently with a similar take on the topic, The growing dissonance between two business models (SaaS and VC): “There will be more and more SaaS companies that, based on the “pattern recognition” that we’ve developed in the last years, we’d like to invest in but will have to pass on. We can only make 10–15 new investments per year and we’re obviously trying to find the very best ones — the outliers among the outliers, if you will.” ~ Chrisoph Janz Just as Clement started, Christoph discusses the “rise of bootstrapped SaaS”, with some more specifics on how the VC is turning down deals that would have seemed mightily attractive to them just a couple of years ago. He argues that new SaaS businesses today will have to raise the bar even higher than ever before, with growth metrics and traction showing something that’s an “outlier of the outliers.” He was also probably the first person ever to apply a quote from Daft Punk in a Venture Capital article. Nice one, Christoph! Noah Jessop, writing in Hacker Noon, takes the entire discussion a good few steps further with his all-out argument that SaaS is “dying”, in What Comes After SaaS?: “SaaS’s own success is it’s own enemy — the cost and the time to build novel things has fallen significantly. Thus as a software company hits real scale, it’s left in a no man’s land — not large enough to stack, not worthless (or weak enough) to die — but too much competition — from the low end, the high end, from customers cobbling together a series of other tools — to prevent any real growth.” ~ Noah Jessop All valid points, and many of those overlap with the points made in the aforementioned Point Nine articles. So it’s game over, then? Fortunately, the increasingly common “X is DEAD!!!!!” narrative isn’t usually quite as extreme as it’s made out to sound. In this scenario, the word “dying” simply means “not as sexy and hyped as it used to be.” Allow me to explain. Let’s remind ourselves where SaaS is today SaaS is a model for building and selling software products. It’s a way of selling and distributing software to customers that marries very well with the benefits that cloud computing brings: Always-on connectivity, scalability, low onboarding friction and a focus on delivering constant value to the consumer. During the first phase of SaaS (A.K.A. The SaaS Gold Rush), the concept of cloud software was such a revolution in itself that merely taking existing on-premise software and repackaging it for the cloud was a revolutionary move. It wasn’t hard to sell such a solution, if it was in the cloud and functional. The second phase moved towards designing and building software specifically with the cloud in mind, i.e. How does the cloud enable us to sell software in verticals that were never possible before? The third phase saw businesses really care about making cloud software truly great for its users. Consumerization of Enterprise. Why can’t Enterprise software have the same amazing UX as consumer software? SaaS is now “table stakes” for B2B software People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. It’s basically an expectation nowadays that B2B cloud software uses a SaaS model. In almost every team in a modern B2B business, from Engineering to Marketing, Sales to Finance, subscription is normality rather than the exception. About a third of our operating costs at ChartMogul (excluding head count) are spent on SaaS, going to over 40 different products. The result is a more predictable balance sheet with very little capital expenditure and nice, evened out recurring costs featuring far fewer surprises. When evaluating new solutions, we actively seek SaaS, for these reasons. The thing is, there’s nothing sexy about table stakes. People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. What’s actually happening? The recent uptick in discussion must have some substance to it, surely? Well, there are definitely some changes in the industry that have a significant impact for new entrants. The barrier to entry is much lower As Clement discusses in his article, it’s become significantly easier for someone to build a SaaS product from their bedroom — it may be the best time ever to start a SaaS business. Building-block API-based tools like Twilio, Clearbit etc. mean that products can be built by plugging different services together. This leads to… A more saturated market If the barrier to entry is lower then the number of entries to the SaaS market are likely to increase. This is compounded by the unbundling effect, with smaller, more narrowly-focused services competing with those monolithic platforms. Virtually every vertical in SaaS today is fairly tight with competition. There’s very little “green field” left in SaaS. This means that… Opportunities for huge VC returns have decreased As Christoph puts it, “Large VCs need multiple unicorns just to survive”. While there’s been an increase of companies growing to the $1-2M stage, this increase hasn’t been matched at the high-end ($100M+ ARR). What Christoph is saying here is that the techniques and pattern matching they’ve used to find successes is no longer working at the same rate of success. So it’s not actually dying then? Well, in the same way that Noah argues SaaS “is dying”, these things are also “dying”: The Cloud Spreadsheets Email Mobile computing Smart watches Tablets These things are pervasive in our everyday lives. In many cases, we’d be completely lost if they were truly taken away. New businesses are built every day that run on the above technologies. Tens of billions in revenue is made and the industry is as healthy as it’s ever been. It’s just not all that sexy any more. I guess you could say that despite all of the doom and gloom, SaaS is just: “Harder, better, faster, stronger.” (Daft Punk, Harder Better Faster Stronger, 2001) (Sorry Christoph. I had to.)

<sys> [INST] It’s time for SaaS to be boring [/INST] If you stay up to date with the SaaS and B2B publishing trends (subscribe to our SaaS Roundup if you don’t!) you may have noticed a number of recently-published articles spelling doom and gloom for Software as a Service. Reading into all of them, you’d probably come away thinking that the industry has moved on to the “next big thing” and the model has no future in the tech industry or elsewhere. Point Nine Capital’s Clement Vouillon started out with an argument that a lot of new SaaS businesses are no longer compatible with the VC model, in his article The Rise of Non “VC compatible” SaaS Companies: “Founders in 2017 can effectively build something in their bedroom, building on an increasing number of “building block” tools, frameworks and API-based services. This means an increase in entries to the market, a lot more bootstrapped companies and overall decreased potential for the huge returns that venture capital demands.” ~ Clement Vouillon If that wasn’t a strong-enough sign, from Europe’s premier SaaS VC, Christoph Janz followed up more recently with a similar take on the topic, The growing dissonance between two business models (SaaS and VC): “There will be more and more SaaS companies that, based on the “pattern recognition” that we’ve developed in the last years, we’d like to invest in but will have to pass on. We can only make 10–15 new investments per year and we’re obviously trying to find the very best ones — the outliers among the outliers, if you will.” ~ Chrisoph Janz Just as Clement started, Christoph discusses the “rise of bootstrapped SaaS”, with some more specifics on how the VC is turning down deals that would have seemed mightily attractive to them just a couple of years ago. He argues that new SaaS businesses today will have to raise the bar even higher than ever before, with growth metrics and traction showing something that’s an “outlier of the outliers.” He was also probably the first person ever to apply a quote from Daft Punk in a Venture Capital article. Nice one, Christoph! Noah Jessop, writing in Hacker Noon, takes the entire discussion a good few steps further with his all-out argument that SaaS is “dying”, in What Comes After SaaS?: “SaaS’s own success is it’s own enemy — the cost and the time to build novel things has fallen significantly. Thus as a software company hits real scale, it’s left in a no man’s land — not large enough to stack, not worthless (or weak enough) to die — but too much competition — from the low end, the high end, from customers cobbling together a series of other tools — to prevent any real growth.” ~ Noah Jessop All valid points, and many of those overlap with the points made in the aforementioned Point Nine articles. So it’s game over, then? Fortunately, the increasingly common “X is DEAD!!!!!” narrative isn’t usually quite as extreme as it’s made out to sound. In this scenario, the word “dying” simply means “not as sexy and hyped as it used to be.” Allow me to explain. Let’s remind ourselves where SaaS is today SaaS is a model for building and selling software products. It’s a way of selling and distributing software to customers that marries very well with the benefits that cloud computing brings: Always-on connectivity, scalability, low onboarding friction and a focus on delivering constant value to the consumer. During the first phase of SaaS (A.K.A. The SaaS Gold Rush), the concept of cloud software was such a revolution in itself that merely taking existing on-premise software and repackaging it for the cloud was a revolutionary move. It wasn’t hard to sell such a solution, if it was in the cloud and functional. The second phase moved towards designing and building software specifically with the cloud in mind, i.e. How does the cloud enable us to sell software in verticals that were never possible before? The third phase saw businesses really care about making cloud software truly great for its users. Consumerization of Enterprise. Why can’t Enterprise software have the same amazing UX as consumer software? SaaS is now “table stakes” for B2B software People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. It’s basically an expectation nowadays that B2B cloud software uses a SaaS model. In almost every team in a modern B2B business, from Engineering to Marketing, Sales to Finance, subscription is normality rather than the exception. About a third of our operating costs at ChartMogul (excluding head count) are spent on SaaS, going to over 40 different products. The result is a more predictable balance sheet with very little capital expenditure and nice, evened out recurring costs featuring far fewer surprises. When evaluating new solutions, we actively seek SaaS, for these reasons. The thing is, there’s nothing sexy about table stakes. People want something fresh, new and exciting to hype. Whether AI, Blockchain or self-driving drone cars — all carry the sense of positive uncertainty and feeling of insane potential that we once felt about just running some software in the cloud. What’s actually happening? The recent uptick in discussion must have some substance to it, surely? Well, there are definitely some changes in the industry that have a significant impact for new entrants. The barrier to entry is much lower As Clement discusses in his article, it’s become significantly easier for someone to build a SaaS product from their bedroom — it may be the best time ever to start a SaaS business. Building-block API-based tools like Twilio, Clearbit etc. mean that products can be built by plugging different services together. This leads to… A more saturated market If the barrier to entry is lower then the number of entries to the SaaS market are likely to increase. This is compounded by the unbundling effect, with smaller, more narrowly-focused services competing with those monolithic platforms. Virtually every vertical in SaaS today is fairly tight with competition. There’s very little “green field” left in SaaS. This means that… Opportunities for huge VC returns have decreased As Christoph puts it, “Large VCs need multiple unicorns just to survive”. While there’s been an increase of companies growing to the $1-2M stage, this increase hasn’t been matched at the high-end ($100M+ ARR). What Christoph is saying here is that the techniques and pattern matching they’ve used to find successes is no longer working at the same rate of success. So it’s not actually dying then? Well, in the same way that Noah argues SaaS “is dying”, these things are also “dying”: The Cloud Spreadsheets Email Mobile computing Smart watches Tablets These things are pervasive in our everyday lives. In many cases, we’d be completely lost if they were truly taken away. New businesses are built every day that run on the above technologies. Tens of billions in revenue is made and the industry is as healthy as it’s ever been. It’s just not all that sexy any more. I guess you could say that despite all of the doom and gloom, SaaS is just: “Harder, better, faster, stronger.” (Daft Punk, Harder Better Faster Stronger, 2001) (Sorry Christoph. I had to.) </sys

How to (effectively) analyze Marketing ROI using Churn Rate. The problem with measuring marketing ROI You know all the standard marketing KPIs. Tracking traffic, leads, and conversions are all important. But they don’t tell you the true ROI of your marketing efforts. What happens after the conversion to paying customer? Just like any other team, marketing’s goal is to build and scale a sustainable business, and this requires loyal customers — customers who don’t just purchase once but stay on board. That’s why some sources, such as HubSpot, suggest marketing teams also look at company-wide performance metrics to measure success. Metrics like Customer LTV and Churn rate reflect the longer term value of acquired customers, thus justifying or calling into question the marketing team’s efforts. But how much can you really learn about marketing efforts specifically, when you’re looking at a global metric? At the point that an account cancels, that customer has had so many more touch points within the product and with other teams that it’s hard to draw a clear, actionable correlation between the data and any single team’s initiatives. The problem with global metrics As a marketer, you need to know how these customers — the customers you’ve acquired through strategic efforts and specific channels — stick to the product. Are any churning earlier than average? If so, where did those accounts come from? Without this knowledge, you could be doubling down on efforts in a certain marketing channel that’s bringing you customers who consistently cancel after a few months. Which is to say, you’re increasing your marketing spend in an area that’s actually also increasing your company’s Churn rate. Looking at your overall Churn rate doesn’t cut it. In the same way Ed explains about global LTV and CAC, this blanket analytical approach misses a lot of the valuable nuance that is nestled in your data. The solution is Segmentation Splicing your data by certain account attributes, otherwise known as user segmentation, unlocks a wealth of information about where you earn your money — and where you lose it. For marketing in particular, it can teach you where your money and effort are best spent — and where it’s not worth the investment. Identifying your product’s strong and weak marketing channels will change your whole strategy. So how to do it? Discover your most effective marketing channels with ChartMogul 1. Add marketing attributes to existing customer data. There are a few ways to do this within ChartMogul: An integration with the platform. This method would usually be lowest-effort for your team. With ChartMogul, users can use a Zapier integration to connect their marketing data source to their billing data. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. ChartMogul offers the Enrichment API, which allows users to have extra information automatically attached to customer accounts. You can learn more at our Developer Hub. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and then manually re-import each time you want to update it. ChartMogul users can import data through CSV files or our Google sheets app — or manually tag customer accounts within the ChartMogul app, like so: Create custom tags within ChartMogul 2. Create segments for substantial marketing channels. The first step to creating segments in ChartMogul is to select the desired metric. At ChartMogul we prefer to look at Gross MRR Churn rate, since it (a) focuses on revenue loss, rather than absolute account number, and (b) doesn’t take into account new business or expansions (upsells), which would sugar-coat how much revenue you’re actually losing. If you’re curious to hear more about our thoughts on analyzing Churn, check out our comparison of Churn best practices. The next step is to add a filter. The customer attribute is “channel,” and each filter will focus on one specific channel. Here we’re filtering for Facebook. Once that filter is added, you can click “Save Segment.” Then repeat for each marketing channel you want to evaluate. 3. Compare all marketing channels together. This is where it gets super simple. Once you’ve created each segment, you can compare them by simply selecting all of them from the “Compare Segments” dropdown. The chart will instantaneously parse out your data to show the various performance, color-coordinating each line to its marketing channel. The result The result of this user segmentation by marketing channel should look something like the chart below. Gross MRR Churn rate, segmented by marketing channel, as displayed in ChartMogul. In this example, you can see that Twitter acquisition tactics during the summer did not attract high-quality customers, as the churn rate spiked a bit in August. In contrast, Facebook strategies worked well during those months as that channel had the lowest churn. Armed with deeper insights like this, you’re empowered to make strategic decisions moving forward — such as where to distribute your content more heavily, where to invest in paid campaigns, where to scale back and reallocate your budget. Don’t have an analytics tool? Or have one that lacks comprehensive user segmentation? Take a look at Ed’s guidance for choosing a tool: Using Deep Customer Segmentation in SaaS. Or you can give ChartMogul a try with our 30-day free trial. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts, and start building a better subscription business — with smarter marketing.

[INST] How to (effectively) analyze Marketing ROI using Churn Rate [/INST]

The problem with measuring marketing ROI You know all the standard marketing KPIs. Tracking traffic, leads, and conversions are all important. But they don’t tell you the true ROI of your marketing efforts. What happens after the conversion to paying customer? Just like any other team, marketing’s goal is to build and scale a sustainable business, and this requires loyal customers — customers who don’t just purchase once but stay on board. That’s why some sources, such as HubSpot, suggest marketing teams also look at company-wide performance metrics to measure success. Metrics like Customer LTV and Churn rate reflect the longer term value of acquired customers, thus justifying or calling into question the marketing team’s efforts. But how much can you really learn about marketing efforts specifically, when you’re looking at a global metric? At the point that an account cancels, that customer has had so many more touch points within the product and with other teams that it’s hard to draw a clear, actionable correlation between the data and any single team’s initiatives. The problem with global metrics As a marketer, you need to know how these customers — the customers you’ve acquired through strategic efforts and specific channels — stick to the product. Are any churning earlier than average? If so, where did those accounts come from? Without this knowledge, you could be doubling down on efforts in a certain marketing channel that’s bringing you customers who consistently cancel after a few months. Which is to say, you’re increasing your marketing spend in an area that’s actually also increasing your company’s Churn rate. Looking at your overall Churn rate doesn’t cut it. In the same way Ed explains about global LTV and CAC, this blanket analytical approach misses a lot of the valuable nuance that is nestled in your data. The solution is Segmentation Splicing your data by certain account attributes, otherwise known as user segmentation, unlocks a wealth of information about where you earn your money — and where you lose it. For marketing in particular, it can teach you where your money and effort are best spent — and where it’s not worth the investment. Identifying your product’s strong and weak marketing channels will change your whole strategy. So how to do it? Discover your most effective marketing channels with ChartMogul 1. Add marketing attributes to existing customer data. There are a few ways to do this within ChartMogul: An integration with the platform. This method would usually be lowest-effort for your team. With ChartMogul, users can use a Zapier integration to connect their marketing data source to their billing data. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. ChartMogul offers the Enrichment API, which allows users to have extra information automatically attached to customer accounts. You can learn more at our Developer Hub. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and then manually re-import each time you want to update it. ChartMogul users can import data through CSV files or our Google sheets app — or manually tag customer accounts within the ChartMogul app, like so: Create custom tags within ChartMogul 2. Create segments for substantial marketing channels. The first step to creating segments in ChartMogul is to select the desired metric. At ChartMogul we prefer to look at Gross MRR Churn rate, since it (a) focuses on revenue loss, rather than absolute account number, and (b) doesn’t take into account new business or expansions (upsells), which would sugar-coat how much revenue you’re actually losing. If you’re curious to hear more about our thoughts on analyzing Churn, check out our comparison of Churn best practices. The next step is to add a filter. The customer attribute is “channel,” and each filter will focus on one specific channel. Here we’re filtering for Facebook. Once that filter is added, you can click “Save Segment.” Then repeat for each marketing channel you want to evaluate. 3. Compare all marketing channels together. This is where it gets super simple. Once you’ve created each segment, you can compare them by simply selecting all of them from the “Compare Segments” dropdown. The chart will instantaneously parse out your data to show the various performance, color-coordinating each line to its marketing channel. The result The result of this user segmentation by marketing channel should look something like the chart below. Gross MRR Churn rate, segmented by marketing channel, as displayed in ChartMogul. In this example, you can see that Twitter acquisition tactics during the summer did not attract high-quality customers, as the churn rate spiked a bit in August. In contrast, Facebook strategies worked well during those months as that channel had the lowest churn. Armed with deeper insights like this, you’re empowered to make strategic decisions moving forward — such as where to distribute your content more heavily, where to invest in paid campaigns, where to scale back and reallocate your budget. Don’t have an analytics tool? Or have one that lacks comprehensive user segmentation? Take a look at Ed’s guidance for choosing a tool: Using Deep Customer Segmentation in SaaS. Or you can give ChartMogul a try with our 30-day free trial. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts, and start building a better subscription business — with smarter marketing.

<sys> [INST] How to (effectively) analyze Marketing ROI using Churn Rate [/INST] The problem with measuring marketing ROI You know all the standard marketing KPIs. Tracking traffic, leads, and conversions are all important. But they don’t tell you the true ROI of your marketing efforts. What happens after the conversion to paying customer? Just like any other team, marketing’s goal is to build and scale a sustainable business, and this requires loyal customers — customers who don’t just purchase once but stay on board. That’s why some sources, such as HubSpot, suggest marketing teams also look at company-wide performance metrics to measure success. Metrics like Customer LTV and Churn rate reflect the longer term value of acquired customers, thus justifying or calling into question the marketing team’s efforts. But how much can you really learn about marketing efforts specifically, when you’re looking at a global metric? At the point that an account cancels, that customer has had so many more touch points within the product and with other teams that it’s hard to draw a clear, actionable correlation between the data and any single team’s initiatives. The problem with global metrics As a marketer, you need to know how these customers — the customers you’ve acquired through strategic efforts and specific channels — stick to the product. Are any churning earlier than average? If so, where did those accounts come from? Without this knowledge, you could be doubling down on efforts in a certain marketing channel that’s bringing you customers who consistently cancel after a few months. Which is to say, you’re increasing your marketing spend in an area that’s actually also increasing your company’s Churn rate. Looking at your overall Churn rate doesn’t cut it. In the same way Ed explains about global LTV and CAC, this blanket analytical approach misses a lot of the valuable nuance that is nestled in your data. The solution is Segmentation Splicing your data by certain account attributes, otherwise known as user segmentation, unlocks a wealth of information about where you earn your money — and where you lose it. For marketing in particular, it can teach you where your money and effort are best spent — and where it’s not worth the investment. Identifying your product’s strong and weak marketing channels will change your whole strategy. So how to do it? Discover your most effective marketing channels with ChartMogul 1. Add marketing attributes to existing customer data. There are a few ways to do this within ChartMogul: An integration with the platform. This method would usually be lowest-effort for your team. With ChartMogul, users can use a Zapier integration to connect their marketing data source to their billing data. A public API. You’ll need to dedicate some development resources to integrate the API, but once setup you’ll have a fully-automated connection. ChartMogul offers the Enrichment API, which allows users to have extra information automatically attached to customer accounts. You can learn more at our Developer Hub. Manually importing the data. This is usually done by uploading a file containing data in a specific format, such as CSV or XML. This method will likely require the most effort, as you’ll need to get your data in the correct format, and then manually re-import each time you want to update it. ChartMogul users can import data through CSV files or our Google sheets app — or manually tag customer accounts within the ChartMogul app, like so: Create custom tags within ChartMogul 2. Create segments for substantial marketing channels. The first step to creating segments in ChartMogul is to select the desired metric. At ChartMogul we prefer to look at Gross MRR Churn rate, since it (a) focuses on revenue loss, rather than absolute account number, and (b) doesn’t take into account new business or expansions (upsells), which would sugar-coat how much revenue you’re actually losing. If you’re curious to hear more about our thoughts on analyzing Churn, check out our comparison of Churn best practices. The next step is to add a filter. The customer attribute is “channel,” and each filter will focus on one specific channel. Here we’re filtering for Facebook. Once that filter is added, you can click “Save Segment.” Then repeat for each marketing channel you want to evaluate. 3. Compare all marketing channels together. This is where it gets super simple. Once you’ve created each segment, you can compare them by simply selecting all of them from the “Compare Segments” dropdown. The chart will instantaneously parse out your data to show the various performance, color-coordinating each line to its marketing channel. The result The result of this user segmentation by marketing channel should look something like the chart below. Gross MRR Churn rate, segmented by marketing channel, as displayed in ChartMogul. In this example, you can see that Twitter acquisition tactics during the summer did not attract high-quality customers, as the churn rate spiked a bit in August. In contrast, Facebook strategies worked well during those months as that channel had the lowest churn. Armed with deeper insights like this, you’re empowered to make strategic decisions moving forward — such as where to distribute your content more heavily, where to invest in paid campaigns, where to scale back and reallocate your budget. Don’t have an analytics tool? Or have one that lacks comprehensive user segmentation? Take a look at Ed’s guidance for choosing a tool: Using Deep Customer Segmentation in SaaS. Or you can give ChartMogul a try with our 30-day free trial. Connect your Stripe, Braintree, Recurly, Chargify or PayPal accounts, and start building a better subscription business — with smarter marketing. </sys

What’s the best onboarding plan for B2B SaaS?. There is no “one size fits all” for customer onboarding. But the best plan is one that: demonstrates value quickly empowers the customer evolves along with your product and user base remains scalable for you I’ll just lay out concepts and questions to consider within the framework of your business, as well as a collection of features or practices that are common throughout SaaS onboarding. To plan customer onboarding is to envision customer success First things first. Onboarding is not about teaching your customer how to use your product. It’s about teaching your customer how to solve their problem, using your product. Think about what success looks like for your customer. Why is your customer using your product? What do they want to achieve in their own business, and what role does your product play in reaching that goal? Design your customer onboarding so that they can experience how your product will help them be more successful, or so they can see it clearly on the horizon. So they’ve “seen the value, or they recognize the value potential,” as Lincoln Murphy puts it. The onboarding experience can have any arrangement of these elements: Signup form. Bare minimum necessary = lowest barrier to entry. Some forms ask for just an email address. Welcome email (or call). Keep it simple. Don’t bombard the new user with info or tips. Rather, provide them with some choice resources, such as content from your blog if you have one. And of course, thank them. Educational emails. Yes, the drip campaign. Remember that drips are small; this translates to one concept per email. The goal is simply to get the user into the app. Plan these throughout the customer lifecycle. A word from a SaaS customer success leader on this subject: “Tie your customer or prospect communication (in-app messages, emails, phone calls, etc.) to their progress – or lack thereof – through those success milestones instead of saying you’ll just send something on Day 1, 5, 7, and 32.” – Lincoln Murphy First login. This is very impactful. Don’t display an empty dashboard. Provide a clear path to what they should do next, such as which tool to use first or literally which button to press. Product tutorial. This will depend largely on the kind of product you provide, but it’s definitely necessary. Your question asks specifically about setting up product demos with individual customers. Individual demos present a scalability problem. This would be worthwhile not as a default element of your customer onboarding (which would consume a lot of internal resources), but more as a when-needed tactic for higher value accounts. Otherwise, webinars are a scalable alternative for your product tutorial. You can communicate all the same information you would do one-on-one, but address a much larger segment of your customer base all at once. Data import. Again, this depends on your product. Many tools require this nowadays in order for the user to see any value. Here you’ll want to automate as much as possible and provide specific support around this point of the user experience. Documentation. Be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. This also lightens any strain on your support team. More on that below! Notifications. This is an important contact point, with a strong potential for re-engaging disengaged users. These aren’t just reminders. They can be well-timed bits of information, little “Did you knows?”, which inform the user about the logical next step they can take with your product, after completing a certain action. Checkup call. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time. For even more info on each of these elements, take a look at the ChartMogul Guide to SaaS Customer Onboarding. A few factors to consider when designing your customer onboarding plan Time to First Value Or the amount of time between sign-up and what’s commonly referred to as the “aha moment,” as Szymon mentions. You want to keep this as short as possible, otherwise you risk users becoming disengaged. For more information and advice around the ‘aha moment’ and its role in customer success, check out my answer about converting free trial users to paying customers. Scalable customer support White glove or self-serve? The problem with the first is that one-on-one human support isn’t always scalable, and the problem with the second is that it may not be sufficient for your customer to truly realize their potential with your product. You could settle on a mixture of both. In fact, most customers would rather find the answer on their own than take the time to contact a support member. Read on for more insight on how to provide efficient (yet effective!) customer support in SaaS. Different experiences for different users Is your B2B product designed for the user to bring on colleagues or friends? Then there are two onboarding experiences to consider, as Samuel Hulick points out in his interview with Intercom. First is the experience of the initial user, who found your product, explored it, and came on board. This initial user is motivated to learn how everything works. Second is the experience of follow-on users, who the initial user recruited once they trusted your product. Keep in mind that those follow-on users “know substantially less than that first person did and [are trying] to make sense of what they’re supposed to be doing, why they were invited, what this product is, what it does, what their role in it is, etc.” Are there different automated messages, via email or notifications, that could help better guide this follow-on user experience? So the onboarding plan is complete. Now what? Once you’ve designed your new customer onboarding process, don’t put it into action and forget about it. The process needs constant revision and iteration, the same way your product does, to keep suiting your customers’ needs. Also, remember that onboarding continues throughout a customer’s lifecycle, beyond the new user stage. Each new feature launch should incorporate some kind of customer onboarding to make sure users learn and take advantage of the new feature. Samuel Hulick argues you don’t even need a new feature release to continue onboarding existing customers: “Anytime there’s a way you can be making them more successful, there’s an opportunity to onboard them even further.” I agree. This answer was originally published on Quora. View the original thread here: What’s the best on-boarding plan for a SaaS B2B company?

[INST] What’s the best onboarding plan for B2B SaaS? [/INST]

There is no “one size fits all” for customer onboarding. But the best plan is one that: demonstrates value quickly empowers the customer evolves along with your product and user base remains scalable for you I’ll just lay out concepts and questions to consider within the framework of your business, as well as a collection of features or practices that are common throughout SaaS onboarding. To plan customer onboarding is to envision customer success First things first. Onboarding is not about teaching your customer how to use your product. It’s about teaching your customer how to solve their problem, using your product. Think about what success looks like for your customer. Why is your customer using your product? What do they want to achieve in their own business, and what role does your product play in reaching that goal? Design your customer onboarding so that they can experience how your product will help them be more successful, or so they can see it clearly on the horizon. So they’ve “seen the value, or they recognize the value potential,” as Lincoln Murphy puts it. The onboarding experience can have any arrangement of these elements: Signup form. Bare minimum necessary = lowest barrier to entry. Some forms ask for just an email address. Welcome email (or call). Keep it simple. Don’t bombard the new user with info or tips. Rather, provide them with some choice resources, such as content from your blog if you have one. And of course, thank them. Educational emails. Yes, the drip campaign. Remember that drips are small; this translates to one concept per email. The goal is simply to get the user into the app. Plan these throughout the customer lifecycle. A word from a SaaS customer success leader on this subject: “Tie your customer or prospect communication (in-app messages, emails, phone calls, etc.) to their progress – or lack thereof – through those success milestones instead of saying you’ll just send something on Day 1, 5, 7, and 32.” – Lincoln Murphy First login. This is very impactful. Don’t display an empty dashboard. Provide a clear path to what they should do next, such as which tool to use first or literally which button to press. Product tutorial. This will depend largely on the kind of product you provide, but it’s definitely necessary. Your question asks specifically about setting up product demos with individual customers. Individual demos present a scalability problem. This would be worthwhile not as a default element of your customer onboarding (which would consume a lot of internal resources), but more as a when-needed tactic for higher value accounts. Otherwise, webinars are a scalable alternative for your product tutorial. You can communicate all the same information you would do one-on-one, but address a much larger segment of your customer base all at once. Data import. Again, this depends on your product. Many tools require this nowadays in order for the user to see any value. Here you’ll want to automate as much as possible and provide specific support around this point of the user experience. Documentation. Be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. This also lightens any strain on your support team. More on that below! Notifications. This is an important contact point, with a strong potential for re-engaging disengaged users. These aren’t just reminders. They can be well-timed bits of information, little “Did you knows?”, which inform the user about the logical next step they can take with your product, after completing a certain action. Checkup call. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time. For even more info on each of these elements, take a look at the ChartMogul Guide to SaaS Customer Onboarding. A few factors to consider when designing your customer onboarding plan Time to First Value Or the amount of time between sign-up and what’s commonly referred to as the “aha moment,” as Szymon mentions. You want to keep this as short as possible, otherwise you risk users becoming disengaged. For more information and advice around the ‘aha moment’ and its role in customer success, check out my answer about converting free trial users to paying customers. Scalable customer support White glove or self-serve? The problem with the first is that one-on-one human support isn’t always scalable, and the problem with the second is that it may not be sufficient for your customer to truly realize their potential with your product. You could settle on a mixture of both. In fact, most customers would rather find the answer on their own than take the time to contact a support member. Read on for more insight on how to provide efficient (yet effective!) customer support in SaaS. Different experiences for different users Is your B2B product designed for the user to bring on colleagues or friends? Then there are two onboarding experiences to consider, as Samuel Hulick points out in his interview with Intercom. First is the experience of the initial user, who found your product, explored it, and came on board. This initial user is motivated to learn how everything works. Second is the experience of follow-on users, who the initial user recruited once they trusted your product. Keep in mind that those follow-on users “know substantially less than that first person did and [are trying] to make sense of what they’re supposed to be doing, why they were invited, what this product is, what it does, what their role in it is, etc.” Are there different automated messages, via email or notifications, that could help better guide this follow-on user experience? So the onboarding plan is complete. Now what? Once you’ve designed your new customer onboarding process, don’t put it into action and forget about it. The process needs constant revision and iteration, the same way your product does, to keep suiting your customers’ needs. Also, remember that onboarding continues throughout a customer’s lifecycle, beyond the new user stage. Each new feature launch should incorporate some kind of customer onboarding to make sure users learn and take advantage of the new feature. Samuel Hulick argues you don’t even need a new feature release to continue onboarding existing customers: “Anytime there’s a way you can be making them more successful, there’s an opportunity to onboard them even further.” I agree. This answer was originally published on Quora. View the original thread here: What’s the best on-boarding plan for a SaaS B2B company?

<sys> [INST] What’s the best onboarding plan for B2B SaaS? [/INST] There is no “one size fits all” for customer onboarding. But the best plan is one that: demonstrates value quickly empowers the customer evolves along with your product and user base remains scalable for you I’ll just lay out concepts and questions to consider within the framework of your business, as well as a collection of features or practices that are common throughout SaaS onboarding. To plan customer onboarding is to envision customer success First things first. Onboarding is not about teaching your customer how to use your product. It’s about teaching your customer how to solve their problem, using your product. Think about what success looks like for your customer. Why is your customer using your product? What do they want to achieve in their own business, and what role does your product play in reaching that goal? Design your customer onboarding so that they can experience how your product will help them be more successful, or so they can see it clearly on the horizon. So they’ve “seen the value, or they recognize the value potential,” as Lincoln Murphy puts it. The onboarding experience can have any arrangement of these elements: Signup form. Bare minimum necessary = lowest barrier to entry. Some forms ask for just an email address. Welcome email (or call). Keep it simple. Don’t bombard the new user with info or tips. Rather, provide them with some choice resources, such as content from your blog if you have one. And of course, thank them. Educational emails. Yes, the drip campaign. Remember that drips are small; this translates to one concept per email. The goal is simply to get the user into the app. Plan these throughout the customer lifecycle. A word from a SaaS customer success leader on this subject: “Tie your customer or prospect communication (in-app messages, emails, phone calls, etc.) to their progress – or lack thereof – through those success milestones instead of saying you’ll just send something on Day 1, 5, 7, and 32.” – Lincoln Murphy First login. This is very impactful. Don’t display an empty dashboard. Provide a clear path to what they should do next, such as which tool to use first or literally which button to press. Product tutorial. This will depend largely on the kind of product you provide, but it’s definitely necessary. Your question asks specifically about setting up product demos with individual customers. Individual demos present a scalability problem. This would be worthwhile not as a default element of your customer onboarding (which would consume a lot of internal resources), but more as a when-needed tactic for higher value accounts. Otherwise, webinars are a scalable alternative for your product tutorial. You can communicate all the same information you would do one-on-one, but address a much larger segment of your customer base all at once. Data import. Again, this depends on your product. Many tools require this nowadays in order for the user to see any value. Here you’ll want to automate as much as possible and provide specific support around this point of the user experience. Documentation. Be sure that when users are really stuck, they can get the guidance they need – and that it’s easily accessible and understandable. This also lightens any strain on your support team. More on that below! Notifications. This is an important contact point, with a strong potential for re-engaging disengaged users. These aren’t just reminders. They can be well-timed bits of information, little “Did you knows?”, which inform the user about the logical next step they can take with your product, after completing a certain action. Checkup call. The power of simply picking up the phone and having a quick chat with a new customer to check-in can out-rank almost any other element listed here. And the best thing is, it’s two-way – you get a ton of valuable feedback at the same time. For even more info on each of these elements, take a look at the ChartMogul Guide to SaaS Customer Onboarding. A few factors to consider when designing your customer onboarding plan Time to First Value Or the amount of time between sign-up and what’s commonly referred to as the “aha moment,” as Szymon mentions. You want to keep this as short as possible, otherwise you risk users becoming disengaged. For more information and advice around the ‘aha moment’ and its role in customer success, check out my answer about converting free trial users to paying customers. Scalable customer support White glove or self-serve? The problem with the first is that one-on-one human support isn’t always scalable, and the problem with the second is that it may not be sufficient for your customer to truly realize their potential with your product. You could settle on a mixture of both. In fact, most customers would rather find the answer on their own than take the time to contact a support member. Read on for more insight on how to provide efficient (yet effective!) customer support in SaaS. Different experiences for different users Is your B2B product designed for the user to bring on colleagues or friends? Then there are two onboarding experiences to consider, as Samuel Hulick points out in his interview with Intercom. First is the experience of the initial user, who found your product, explored it, and came on board. This initial user is motivated to learn how everything works. Second is the experience of follow-on users, who the initial user recruited once they trusted your product. Keep in mind that those follow-on users “know substantially less than that first person did and [are trying] to make sense of what they’re supposed to be doing, why they were invited, what this product is, what it does, what their role in it is, etc.” Are there different automated messages, via email or notifications, that could help better guide this follow-on user experience? So the onboarding plan is complete. Now what? Once you’ve designed your new customer onboarding process, don’t put it into action and forget about it. The process needs constant revision and iteration, the same way your product does, to keep suiting your customers’ needs. Also, remember that onboarding continues throughout a customer’s lifecycle, beyond the new user stage. Each new feature launch should incorporate some kind of customer onboarding to make sure users learn and take advantage of the new feature. Samuel Hulick argues you don’t even need a new feature release to continue onboarding existing customers: “Anytime there’s a way you can be making them more successful, there’s an opportunity to onboard them even further.” I agree. This answer was originally published on Quora. View the original thread here: What’s the best on-boarding plan for a SaaS B2B company? </sys

Are you enabling your Content team to do Deep Work?. I just wanted to share a few thoughts that have been on my mind recently with regards to writing. Actually, it all started as I was reading Cal Newport’s latest book, Deep Work: Rules for focused success in a distracted world. Many of us are well aware of the growing problem of distraction, not only in the workplace, but in a life riddled with push notifications, instant messaging and tiny doses of dopamine in the form of “likes”, “shares” and “retweets”. In the book, Newport introduces the idea of Deep Work as: “The ability to focus without distraction on a cognitively-demanding task” – Cal Newport While that might seem like common sense at first, Newport goes much further into this concept and highlights what can be seen as both a problem and an opportunity in industry: The ability of humans to do ‘deep work’ is becoming both more scarce and more valuable as a career skill. In other words, individuals can leverage the ability to intently focus and produce — and also make themselves incredibly valuable to businesses by nurturing this ability. In many areas and professions, those few people with a grasp on deep work and an ability to reliably DO deep work on a regular basis will rise to the top of the professional food chain at a rapid rate, given the fundamentally higher quality and faster pace of their work. Enter: Content Marketing This got me thinking about how the responsibilities of a Content Manager fit into these definitions of “Deep” work, and its arch-nemesis rival, “Shallow” work: Writing original, useful content is deep work Forming new ideas for content is deep work Developing a content strategy is deep work And conversely: Content promotion is shallow work Partaking in industry discussion on social media is shallow work Scheduling interviews & guest posts is shallow work Copy editing is shallow work Re-purposing content is shallow work Writing is, by all accounts, a “deep work” operation I don’t think many people would argue with the suggestion that good, research-based, long-form writing requires deep work in order to be valuable. Generating new ideas, structuring arguments and conveying such arguments through words is a process that demands minimal distraction and a reasonably high proportion of the human brain’s capacity in order to be successful. Social-media-based work is the opposite Social media interaction is used in Newport’s book as a prime example of ‘light work’ — something that does not require long-term focus and attention. In fact, it’s argued to be one of the main causes of the rapid decline of our ability to focus over the last decade. Every time an interaction takes place, such as replying to an incoming Tweet or sharing a news update, our brains are being trained to take the “easy path”, focusing on small rewards gained through little effort. Herein lies the problem The problem here is clear: These are two responsibilities undertaken by many Content Managers in businesses today. We expect people to juggle between a task that requires the utmost focus and attention over an extended period of time, and something that’s built around tiny, interrupting interactions that cannot easily be scheduled or batched together. In assigning these two responsibilities to your Content Manager, you could be destroying their capability to do deep work — to research and write the great content that your business needs to grow. We already have a problem with a flood of unoriginal, regurgitated content which you could argue is a byproduct of applying shallow work to the process of writing. How do we avoid this downward spiral and leverage the benefits of deep work that Cal mentions above? Is this an individual’s problem, or a business problem? Clearly, both aspects of a the Content Manager’s role are a requirement in today’s industry. If you spend time writing great, original content but don’t put any effort into promotion, you won’t see results. We need to do both of these things. So what can we do to mitigate this problem? Content Managers: Make your manager and team aware of the concept of deep work, and the conditions that in-depth writing requires. If you really do have to handle social media AND deep writing, think about whether you can batch these tasks into specific days. Automate as much as possible on the social side to remove distraction. Set aside time to do deep work. During this time, negotiate that it’s acceptable to be offline from Slack, or unreachable by email — whatever it takes. Founders & Marketing Managers: Understand that the responsibilities mentioned above are effectively incompatible with each other. Consider hiring a social media manager to handle your business’s social presence, including the sharing and promotion of content — avoid pushing this task around your whole team! Encourage Content Managers to find their own way to get into the ‘zone’ for doing deep work on content. If that means working remotely, quitting Slack and email for a day or any other more-drastic measures, then at least be open to the idea. In summary: Business leaders should understand that the ability of their content team to shut themselves away and switch off from social media is critical to the operation of writing industry-leading, original content. The kind of content that differentiates their business from the sea of noise that your team strives to stand out from every day.

[INST] Are you enabling your Content team to do Deep Work? [/INST]

I just wanted to share a few thoughts that have been on my mind recently with regards to writing. Actually, it all started as I was reading Cal Newport’s latest book, Deep Work: Rules for focused success in a distracted world. Many of us are well aware of the growing problem of distraction, not only in the workplace, but in a life riddled with push notifications, instant messaging and tiny doses of dopamine in the form of “likes”, “shares” and “retweets”. In the book, Newport introduces the idea of Deep Work as: “The ability to focus without distraction on a cognitively-demanding task” – Cal Newport While that might seem like common sense at first, Newport goes much further into this concept and highlights what can be seen as both a problem and an opportunity in industry: The ability of humans to do ‘deep work’ is becoming both more scarce and more valuable as a career skill. In other words, individuals can leverage the ability to intently focus and produce — and also make themselves incredibly valuable to businesses by nurturing this ability. In many areas and professions, those few people with a grasp on deep work and an ability to reliably DO deep work on a regular basis will rise to the top of the professional food chain at a rapid rate, given the fundamentally higher quality and faster pace of their work. Enter: Content Marketing This got me thinking about how the responsibilities of a Content Manager fit into these definitions of “Deep” work, and its arch-nemesis rival, “Shallow” work: Writing original, useful content is deep work Forming new ideas for content is deep work Developing a content strategy is deep work And conversely: Content promotion is shallow work Partaking in industry discussion on social media is shallow work Scheduling interviews & guest posts is shallow work Copy editing is shallow work Re-purposing content is shallow work Writing is, by all accounts, a “deep work” operation I don’t think many people would argue with the suggestion that good, research-based, long-form writing requires deep work in order to be valuable. Generating new ideas, structuring arguments and conveying such arguments through words is a process that demands minimal distraction and a reasonably high proportion of the human brain’s capacity in order to be successful. Social-media-based work is the opposite Social media interaction is used in Newport’s book as a prime example of ‘light work’ — something that does not require long-term focus and attention. In fact, it’s argued to be one of the main causes of the rapid decline of our ability to focus over the last decade. Every time an interaction takes place, such as replying to an incoming Tweet or sharing a news update, our brains are being trained to take the “easy path”, focusing on small rewards gained through little effort. Herein lies the problem The problem here is clear: These are two responsibilities undertaken by many Content Managers in businesses today. We expect people to juggle between a task that requires the utmost focus and attention over an extended period of time, and something that’s built around tiny, interrupting interactions that cannot easily be scheduled or batched together. In assigning these two responsibilities to your Content Manager, you could be destroying their capability to do deep work — to research and write the great content that your business needs to grow. We already have a problem with a flood of unoriginal, regurgitated content which you could argue is a byproduct of applying shallow work to the process of writing. How do we avoid this downward spiral and leverage the benefits of deep work that Cal mentions above? Is this an individual’s problem, or a business problem? Clearly, both aspects of a the Content Manager’s role are a requirement in today’s industry. If you spend time writing great, original content but don’t put any effort into promotion, you won’t see results. We need to do both of these things. So what can we do to mitigate this problem? Content Managers: Make your manager and team aware of the concept of deep work, and the conditions that in-depth writing requires. If you really do have to handle social media AND deep writing, think about whether you can batch these tasks into specific days. Automate as much as possible on the social side to remove distraction. Set aside time to do deep work. During this time, negotiate that it’s acceptable to be offline from Slack, or unreachable by email — whatever it takes. Founders & Marketing Managers: Understand that the responsibilities mentioned above are effectively incompatible with each other. Consider hiring a social media manager to handle your business’s social presence, including the sharing and promotion of content — avoid pushing this task around your whole team! Encourage Content Managers to find their own way to get into the ‘zone’ for doing deep work on content. If that means working remotely, quitting Slack and email for a day or any other more-drastic measures, then at least be open to the idea. In summary: Business leaders should understand that the ability of their content team to shut themselves away and switch off from social media is critical to the operation of writing industry-leading, original content. The kind of content that differentiates their business from the sea of noise that your team strives to stand out from every day.

<sys> [INST] Are you enabling your Content team to do Deep Work? [/INST] I just wanted to share a few thoughts that have been on my mind recently with regards to writing. Actually, it all started as I was reading Cal Newport’s latest book, Deep Work: Rules for focused success in a distracted world. Many of us are well aware of the growing problem of distraction, not only in the workplace, but in a life riddled with push notifications, instant messaging and tiny doses of dopamine in the form of “likes”, “shares” and “retweets”. In the book, Newport introduces the idea of Deep Work as: “The ability to focus without distraction on a cognitively-demanding task” – Cal Newport While that might seem like common sense at first, Newport goes much further into this concept and highlights what can be seen as both a problem and an opportunity in industry: The ability of humans to do ‘deep work’ is becoming both more scarce and more valuable as a career skill. In other words, individuals can leverage the ability to intently focus and produce — and also make themselves incredibly valuable to businesses by nurturing this ability. In many areas and professions, those few people with a grasp on deep work and an ability to reliably DO deep work on a regular basis will rise to the top of the professional food chain at a rapid rate, given the fundamentally higher quality and faster pace of their work. Enter: Content Marketing This got me thinking about how the responsibilities of a Content Manager fit into these definitions of “Deep” work, and its arch-nemesis rival, “Shallow” work: Writing original, useful content is deep work Forming new ideas for content is deep work Developing a content strategy is deep work And conversely: Content promotion is shallow work Partaking in industry discussion on social media is shallow work Scheduling interviews & guest posts is shallow work Copy editing is shallow work Re-purposing content is shallow work Writing is, by all accounts, a “deep work” operation I don’t think many people would argue with the suggestion that good, research-based, long-form writing requires deep work in order to be valuable. Generating new ideas, structuring arguments and conveying such arguments through words is a process that demands minimal distraction and a reasonably high proportion of the human brain’s capacity in order to be successful. Social-media-based work is the opposite Social media interaction is used in Newport’s book as a prime example of ‘light work’ — something that does not require long-term focus and attention. In fact, it’s argued to be one of the main causes of the rapid decline of our ability to focus over the last decade. Every time an interaction takes place, such as replying to an incoming Tweet or sharing a news update, our brains are being trained to take the “easy path”, focusing on small rewards gained through little effort. Herein lies the problem The problem here is clear: These are two responsibilities undertaken by many Content Managers in businesses today. We expect people to juggle between a task that requires the utmost focus and attention over an extended period of time, and something that’s built around tiny, interrupting interactions that cannot easily be scheduled or batched together. In assigning these two responsibilities to your Content Manager, you could be destroying their capability to do deep work — to research and write the great content that your business needs to grow. We already have a problem with a flood of unoriginal, regurgitated content which you could argue is a byproduct of applying shallow work to the process of writing. How do we avoid this downward spiral and leverage the benefits of deep work that Cal mentions above? Is this an individual’s problem, or a business problem? Clearly, both aspects of a the Content Manager’s role are a requirement in today’s industry. If you spend time writing great, original content but don’t put any effort into promotion, you won’t see results. We need to do both of these things. So what can we do to mitigate this problem? Content Managers: Make your manager and team aware of the concept of deep work, and the conditions that in-depth writing requires. If you really do have to handle social media AND deep writing, think about whether you can batch these tasks into specific days. Automate as much as possible on the social side to remove distraction. Set aside time to do deep work. During this time, negotiate that it’s acceptable to be offline from Slack, or unreachable by email — whatever it takes. Founders & Marketing Managers: Understand that the responsibilities mentioned above are effectively incompatible with each other. Consider hiring a social media manager to handle your business’s social presence, including the sharing and promotion of content — avoid pushing this task around your whole team! Encourage Content Managers to find their own way to get into the ‘zone’ for doing deep work on content. If that means working remotely, quitting Slack and email for a day or any other more-drastic measures, then at least be open to the idea. In summary: Business leaders should understand that the ability of their content team to shut themselves away and switch off from social media is critical to the operation of writing industry-leading, original content. The kind of content that differentiates their business from the sea of noise that your team strives to stand out from every day. </sys

New: Upgrade, Downgrade or Delete Manual Customers. We introduced Manual Customers back in April to address the common scenario of having customers which are invoiced outside of your subscription billing system. We know many of you have customers that fit these criteria, and the importance of including their subscription data alongside the data from your primary billing system. With ChartMogul, we allow you to include and aggregate all of this data in your account – regardless of the source. What’s New? Firstly, you can modify subscriptions for these customers, enabling upgrades and downgrades to their account. You can do this in the ChartMogul Dashboard, or by uploading a CSV file with updated subscription information for the existing customers you want to modify. Any of these modifications to the customer’s subscription will be reflected in a new Activities feed on the Customer page: Secondly, you can now delete manual customers in the ChartMogul dashboard. The customer, including their historical data, will be completely removed from the platform and you’ll no longer see them listed on the Customers page. Finally, we now also allow you to fully delete a customer’s subscription, including all historical records of it. You can do this from the Edit Subscription window: These new updates and the Manual Customers feature are available today to all customers on the PRO Plan.

[INST] New: Upgrade, Downgrade or Delete Manual Customers [/INST]

We introduced Manual Customers back in April to address the common scenario of having customers which are invoiced outside of your subscription billing system. We know many of you have customers that fit these criteria, and the importance of including their subscription data alongside the data from your primary billing system. With ChartMogul, we allow you to include and aggregate all of this data in your account – regardless of the source. What’s New? Firstly, you can modify subscriptions for these customers, enabling upgrades and downgrades to their account. You can do this in the ChartMogul Dashboard, or by uploading a CSV file with updated subscription information for the existing customers you want to modify. Any of these modifications to the customer’s subscription will be reflected in a new Activities feed on the Customer page: Secondly, you can now delete manual customers in the ChartMogul dashboard. The customer, including their historical data, will be completely removed from the platform and you’ll no longer see them listed on the Customers page. Finally, we now also allow you to fully delete a customer’s subscription, including all historical records of it. You can do this from the Edit Subscription window: These new updates and the Manual Customers feature are available today to all customers on the PRO Plan.

<sys> [INST] New: Upgrade, Downgrade or Delete Manual Customers [/INST] We introduced Manual Customers back in April to address the common scenario of having customers which are invoiced outside of your subscription billing system. We know many of you have customers that fit these criteria, and the importance of including their subscription data alongside the data from your primary billing system. With ChartMogul, we allow you to include and aggregate all of this data in your account – regardless of the source. What’s New? Firstly, you can modify subscriptions for these customers, enabling upgrades and downgrades to their account. You can do this in the ChartMogul Dashboard, or by uploading a CSV file with updated subscription information for the existing customers you want to modify. Any of these modifications to the customer’s subscription will be reflected in a new Activities feed on the Customer page: Secondly, you can now delete manual customers in the ChartMogul dashboard. The customer, including their historical data, will be completely removed from the platform and you’ll no longer see them listed on the Customers page. Finally, we now also allow you to fully delete a customer’s subscription, including all historical records of it. You can do this from the Edit Subscription window: These new updates and the Manual Customers feature are available today to all customers on the PRO Plan. </sys

Creating Thriving Culture While Working Remotely. You’re probably reading this from home right now. I’m certainly writing it from home. The pandemic forced many companies to make the transition to a fully remote workforce, but now the question on everyone’s minds is what to do when things go back to (the new) normal. Companies have learned that productivity doesn’t drop when your employees work from home, most often quite the opposite is true. When you’re not commuting and you’re relaxed in your own space without office chatter in earshot you’re probably even more productive. In fact, employees can be so productive some companies are considering a 4-day work week. Whether your team is fully remote or working in a hybrid model, it can be a struggle to manage workplace culture and create a sense of community – especially in times like these. Tatiana Correa, the founder of Revolv Culture Solutions has many years of experience building culture and communities for companies that have their workforces scattered all over the globe. If you have a hybrid you can’t expect the experiences of remote employees and in-office employees to be the same. I come in to support teams and help them figure out what the balance is going to look like and how all their employees can feel equally valued. Tatiana Correa About the episode On this week’s episode, Tatiana and I discuss her background creating inclusive workplace environments and engaged communities at Lululemon and Shopify, and how she’s taken her expertise and built her own company helping others design a remote experience that cultivates company culture. Tatiana shares her insights about: Measuring employee engagement The role of leadership in creating culture Where remote work goes wrong and what to do about it Hybrid work models Creating successful events and off-sites for a remote workforce The future of remote work Thanks for listening. Make sure you hit subscribe so you never miss an episode!

[INST] Creating Thriving Culture While Working Remotely [/INST]

You’re probably reading this from home right now. I’m certainly writing it from home. The pandemic forced many companies to make the transition to a fully remote workforce, but now the question on everyone’s minds is what to do when things go back to (the new) normal. Companies have learned that productivity doesn’t drop when your employees work from home, most often quite the opposite is true. When you’re not commuting and you’re relaxed in your own space without office chatter in earshot you’re probably even more productive. In fact, employees can be so productive some companies are considering a 4-day work week. Whether your team is fully remote or working in a hybrid model, it can be a struggle to manage workplace culture and create a sense of community – especially in times like these. Tatiana Correa, the founder of Revolv Culture Solutions has many years of experience building culture and communities for companies that have their workforces scattered all over the globe. If you have a hybrid you can’t expect the experiences of remote employees and in-office employees to be the same. I come in to support teams and help them figure out what the balance is going to look like and how all their employees can feel equally valued. Tatiana Correa About the episode On this week’s episode, Tatiana and I discuss her background creating inclusive workplace environments and engaged communities at Lululemon and Shopify, and how she’s taken her expertise and built her own company helping others design a remote experience that cultivates company culture. Tatiana shares her insights about: Measuring employee engagement The role of leadership in creating culture Where remote work goes wrong and what to do about it Hybrid work models Creating successful events and off-sites for a remote workforce The future of remote work Thanks for listening. Make sure you hit subscribe so you never miss an episode!

<sys> [INST] Creating Thriving Culture While Working Remotely [/INST] You’re probably reading this from home right now. I’m certainly writing it from home. The pandemic forced many companies to make the transition to a fully remote workforce, but now the question on everyone’s minds is what to do when things go back to (the new) normal. Companies have learned that productivity doesn’t drop when your employees work from home, most often quite the opposite is true. When you’re not commuting and you’re relaxed in your own space without office chatter in earshot you’re probably even more productive. In fact, employees can be so productive some companies are considering a 4-day work week. Whether your team is fully remote or working in a hybrid model, it can be a struggle to manage workplace culture and create a sense of community – especially in times like these. Tatiana Correa, the founder of Revolv Culture Solutions has many years of experience building culture and communities for companies that have their workforces scattered all over the globe. If you have a hybrid you can’t expect the experiences of remote employees and in-office employees to be the same. I come in to support teams and help them figure out what the balance is going to look like and how all their employees can feel equally valued. Tatiana Correa About the episode On this week’s episode, Tatiana and I discuss her background creating inclusive workplace environments and engaged communities at Lululemon and Shopify, and how she’s taken her expertise and built her own company helping others design a remote experience that cultivates company culture. Tatiana shares her insights about: Measuring employee engagement The role of leadership in creating culture Where remote work goes wrong and what to do about it Hybrid work models Creating successful events and off-sites for a remote workforce The future of remote work Thanks for listening. Make sure you hit subscribe so you never miss an episode! </sys

Burnout and How I Clawed My Way Out. I’ve got a confession to make. Until very recently, I felt like a failure. You wouldn’t have had a clue I was thinking that way if you followed my social media. My company Subbly was performing well, everything about my life seemed to be in perfect balance. And yet I felt like a failure. Because I was completely burnt out. Burnout affects far more people than many of us would care to admit. I never thought it would happen to me. Yet here I am. Burnout was a new sensation for me, one which caught me completely off guard thanks to the Coronavirus pandemic. So instead of lecturing you about how and what you should do, let me tell you about what happened to me and how you can avoid the mistakes I made. Remote work vs remote work in a pandemic I’m the founder and CEO of Subbly, a powerful subscription e-commerce platform for entrepreneurs and marketers. Our team is remote and we’re bootstrapped, it’s our lean culture that gives us a competitive edge. You might think that our 100% remote model made us better prepared for the Coronavirus than most. In some ways you’re right, being remote has certainly insulated Subbly from some of the worst effects of the crisis, and our team’s productivity hasn’t been affected at all. For myself, however, I need the buzz of the workplace, so I usually base myself at co-working spaces. Coronavirus caused that system to go the way of the dodo. I was suddenly isolated and I had to adapt. This process was tough and it’s what caused my burnout. How burnout affected me When burnout started to affect me, the first thing I noticed was fatigue, not just in the physical sense. Psychologically I just felt drained. Everything I did seemed to require more effort, from doing calls to making a cup of coffee. Still, it didn’t matter how many coffees I drank, I still felt exhausted. Then the anxiety started, healthy doubt and caution turned into fixating and obsessing over the little things, which soon evolved into frenetic energy and fear. All of this experienced by someone who has spent a long time investing in and working on their mental health and well-being. Burnout creeps up on you slowly — you barely notice it happening until you’re firmly in its grasp, and by the time you understand what’s going on, it’s already too late. This time it was different, it was confusing as everything was going great, and I didn’t know how to get out of it due to the lockdown. After the psychological symptoms manifested, I began to notice changes beyond the fatigue. I was withdrawn, short-tempered, and behaved unpredictably. Worst of all I felt completely alone, and I couldn’t explain what was happening to me. It was like a silent breakdown of all personal boundaries. What was worse was that I could have seen this coming. When I was 21 I tried working from home, but it didn’t work out — I was less productive and I felt miserable due to the lack of structure. Lockdown was therefore the perfect recipe for a personal collapse. The first step to dealing with burnout is accepting it exists Does any of this sound familiar to you? Recognising yourself in my experience? Then you may have burnout, and the first step to fixing a problem is accepting it exists. The catch 22 of burnout is that you know you need to be productive, but you feel unable to deal with your growing pile of work. You subsequently feel guilty that you’re not being productive and this makes it worse. Worse still, it makes it harder for you to recognise the symptoms as you begin to experience denial. It’s a negative, self-perpetuating spiral. You need to know the tell-tale symptoms of burnout and to listen to them. Better still, you should implement a plan to avoid getting there in the first place. Identifying a problem in the early stages is always better for you. Now that I know the difficulties of burnout I know how to mitigate or prevent it in the future. The key is to recognise and accept it early on. There is no one way of doing this as everyone is different, and is in turn affected differently, but if you want to stay productive and mentally healthy you need to prioritise your well-being. We all want to focus on boosting our productivity but it became an unhealthy obsession for me. Focusing on your well-being and mental health isn’t a weakness, it’s a sign of mental strength. This needs to be a mantra you repeat every day, as I do. How do you treat burnout? So there I was stuck in the emotional and professional doldrums. I felt trapped, unable to express how isolated I felt. Luckily, I had a great social network to call on. I reached out to my loved ones and trusted friends, people who I knew would be direct and honest with me, and asked for their help. It wasn’t easy to express myself and I didn’t want to appear vulnerable, but then I realised that it isn’t a sign of weakness. It takes strength to admit (even to yourself) you have an issue and to address it by communicating with the people around you. Tweet this quote Your network reflects who you are as a person, if your contacts are trustworthy and honest you’re doing great. Exercise helped me tremendously and that old cliché of a “healthy body, healthy mind” really does hold true. I couldn’t go to the gym (my favourite place to retreat and re-balance) during the lockdown, so I took up running instead and continued my resistance band workouts. I’m competitive by nature, so having goals to focus on helped me move forward. Try to think of something that you really enjoy. In my case it was exercise but it could just as easily have been learning a new skill, cooking, anything that ‘sparks joy’. This will restore your sense of self-worth, improve your mood, and send endorphins running through your body. It’s all about designing a routine that keeps you on course and supports you. Prevention as a cure When it comes to burnout prevention really is the best cure — believe me, it’s not fun pulling yourself out of it. The best way you can start is by sticking to a solid routine, which, if you’re anything like me, might be difficult at the start. Make sure you get plenty of sleep (eight hours is ideal) and go to sleep at the same time every night. It’s not always easy, I know, there’s always something I have to finish (the classic entrepreneurial drive) but it’s well worth it… I can already predict some of you thinking ‘who needs sleep, I’m young, I’m energetic, I can work all night and still get results.’ Sure, for now, but look at how Coronavirus caught us totally off guard. The cost of burnout or poor mental health is much bigger than working a couple of extra hours every day. Tweet this quote Give yourself time to rest. You’ll feel so much better, and you’ll also find that you’re often more productive. Keep yourself moving, even if it’s just for a brisk walk, and make sure you take yourself out of your home office space regularly. We’re not designed to sit at a desk for eight hours a day, after all. This is about changing your physical environment and perspective as much as it is about your physical health. Never feel that you’re alone It’s okay not to be okay, and it’s especially okay to reach out to someone you trust when you experience burnout. The global economy is going to continue to be unpredictable while Coronavirus persists, and that’s why it’s important to be kind to yourself — I managed to pull myself up out of the hole I found myself in, and you can too. When you find yourself on even ground again, remember to be grateful for the blessings you have, whether they be professional success, family, recognition, etc. Though I was skeptical at first, I started to keep a gratitude journal where I keep track of the things I’m thankful for in my life. It’s easy to lose track of the good things in our lives-journalling brings these things to the top of one’s perceptions, allowing you to maintain gratitude as a state of mind. It’s hard to maintain this through burnout but with patience and practice, you’ll be able to. If you ever feel down in the dumps or completely burnt out I’m here to help if you ever need advice. You can find me on Twitter and LinkedIn. We’re all in this together, so let’s help look after each other.

[INST] Burnout and How I Clawed My Way Out [/INST]

I’ve got a confession to make. Until very recently, I felt like a failure. You wouldn’t have had a clue I was thinking that way if you followed my social media. My company Subbly was performing well, everything about my life seemed to be in perfect balance. And yet I felt like a failure. Because I was completely burnt out. Burnout affects far more people than many of us would care to admit. I never thought it would happen to me. Yet here I am. Burnout was a new sensation for me, one which caught me completely off guard thanks to the Coronavirus pandemic. So instead of lecturing you about how and what you should do, let me tell you about what happened to me and how you can avoid the mistakes I made. Remote work vs remote work in a pandemic I’m the founder and CEO of Subbly, a powerful subscription e-commerce platform for entrepreneurs and marketers. Our team is remote and we’re bootstrapped, it’s our lean culture that gives us a competitive edge. You might think that our 100% remote model made us better prepared for the Coronavirus than most. In some ways you’re right, being remote has certainly insulated Subbly from some of the worst effects of the crisis, and our team’s productivity hasn’t been affected at all. For myself, however, I need the buzz of the workplace, so I usually base myself at co-working spaces. Coronavirus caused that system to go the way of the dodo. I was suddenly isolated and I had to adapt. This process was tough and it’s what caused my burnout. How burnout affected me When burnout started to affect me, the first thing I noticed was fatigue, not just in the physical sense. Psychologically I just felt drained. Everything I did seemed to require more effort, from doing calls to making a cup of coffee. Still, it didn’t matter how many coffees I drank, I still felt exhausted. Then the anxiety started, healthy doubt and caution turned into fixating and obsessing over the little things, which soon evolved into frenetic energy and fear. All of this experienced by someone who has spent a long time investing in and working on their mental health and well-being. Burnout creeps up on you slowly — you barely notice it happening until you’re firmly in its grasp, and by the time you understand what’s going on, it’s already too late. This time it was different, it was confusing as everything was going great, and I didn’t know how to get out of it due to the lockdown. After the psychological symptoms manifested, I began to notice changes beyond the fatigue. I was withdrawn, short-tempered, and behaved unpredictably. Worst of all I felt completely alone, and I couldn’t explain what was happening to me. It was like a silent breakdown of all personal boundaries. What was worse was that I could have seen this coming. When I was 21 I tried working from home, but it didn’t work out — I was less productive and I felt miserable due to the lack of structure. Lockdown was therefore the perfect recipe for a personal collapse. The first step to dealing with burnout is accepting it exists Does any of this sound familiar to you? Recognising yourself in my experience? Then you may have burnout, and the first step to fixing a problem is accepting it exists. The catch 22 of burnout is that you know you need to be productive, but you feel unable to deal with your growing pile of work. You subsequently feel guilty that you’re not being productive and this makes it worse. Worse still, it makes it harder for you to recognise the symptoms as you begin to experience denial. It’s a negative, self-perpetuating spiral. You need to know the tell-tale symptoms of burnout and to listen to them. Better still, you should implement a plan to avoid getting there in the first place. Identifying a problem in the early stages is always better for you. Now that I know the difficulties of burnout I know how to mitigate or prevent it in the future. The key is to recognise and accept it early on. There is no one way of doing this as everyone is different, and is in turn affected differently, but if you want to stay productive and mentally healthy you need to prioritise your well-being. We all want to focus on boosting our productivity but it became an unhealthy obsession for me. Focusing on your well-being and mental health isn’t a weakness, it’s a sign of mental strength. This needs to be a mantra you repeat every day, as I do. How do you treat burnout? So there I was stuck in the emotional and professional doldrums. I felt trapped, unable to express how isolated I felt. Luckily, I had a great social network to call on. I reached out to my loved ones and trusted friends, people who I knew would be direct and honest with me, and asked for their help. It wasn’t easy to express myself and I didn’t want to appear vulnerable, but then I realised that it isn’t a sign of weakness. It takes strength to admit (even to yourself) you have an issue and to address it by communicating with the people around you. Tweet this quote Your network reflects who you are as a person, if your contacts are trustworthy and honest you’re doing great. Exercise helped me tremendously and that old cliché of a “healthy body, healthy mind” really does hold true. I couldn’t go to the gym (my favourite place to retreat and re-balance) during the lockdown, so I took up running instead and continued my resistance band workouts. I’m competitive by nature, so having goals to focus on helped me move forward. Try to think of something that you really enjoy. In my case it was exercise but it could just as easily have been learning a new skill, cooking, anything that ‘sparks joy’. This will restore your sense of self-worth, improve your mood, and send endorphins running through your body. It’s all about designing a routine that keeps you on course and supports you. Prevention as a cure When it comes to burnout prevention really is the best cure — believe me, it’s not fun pulling yourself out of it. The best way you can start is by sticking to a solid routine, which, if you’re anything like me, might be difficult at the start. Make sure you get plenty of sleep (eight hours is ideal) and go to sleep at the same time every night. It’s not always easy, I know, there’s always something I have to finish (the classic entrepreneurial drive) but it’s well worth it… I can already predict some of you thinking ‘who needs sleep, I’m young, I’m energetic, I can work all night and still get results.’ Sure, for now, but look at how Coronavirus caught us totally off guard. The cost of burnout or poor mental health is much bigger than working a couple of extra hours every day. Tweet this quote Give yourself time to rest. You’ll feel so much better, and you’ll also find that you’re often more productive. Keep yourself moving, even if it’s just for a brisk walk, and make sure you take yourself out of your home office space regularly. We’re not designed to sit at a desk for eight hours a day, after all. This is about changing your physical environment and perspective as much as it is about your physical health. Never feel that you’re alone It’s okay not to be okay, and it’s especially okay to reach out to someone you trust when you experience burnout. The global economy is going to continue to be unpredictable while Coronavirus persists, and that’s why it’s important to be kind to yourself — I managed to pull myself up out of the hole I found myself in, and you can too. When you find yourself on even ground again, remember to be grateful for the blessings you have, whether they be professional success, family, recognition, etc. Though I was skeptical at first, I started to keep a gratitude journal where I keep track of the things I’m thankful for in my life. It’s easy to lose track of the good things in our lives-journalling brings these things to the top of one’s perceptions, allowing you to maintain gratitude as a state of mind. It’s hard to maintain this through burnout but with patience and practice, you’ll be able to. If you ever feel down in the dumps or completely burnt out I’m here to help if you ever need advice. You can find me on Twitter and LinkedIn. We’re all in this together, so let’s help look after each other.

<sys> [INST] Burnout and How I Clawed My Way Out [/INST] I’ve got a confession to make. Until very recently, I felt like a failure. You wouldn’t have had a clue I was thinking that way if you followed my social media. My company Subbly was performing well, everything about my life seemed to be in perfect balance. And yet I felt like a failure. Because I was completely burnt out. Burnout affects far more people than many of us would care to admit. I never thought it would happen to me. Yet here I am. Burnout was a new sensation for me, one which caught me completely off guard thanks to the Coronavirus pandemic. So instead of lecturing you about how and what you should do, let me tell you about what happened to me and how you can avoid the mistakes I made. Remote work vs remote work in a pandemic I’m the founder and CEO of Subbly, a powerful subscription e-commerce platform for entrepreneurs and marketers. Our team is remote and we’re bootstrapped, it’s our lean culture that gives us a competitive edge. You might think that our 100% remote model made us better prepared for the Coronavirus than most. In some ways you’re right, being remote has certainly insulated Subbly from some of the worst effects of the crisis, and our team’s productivity hasn’t been affected at all. For myself, however, I need the buzz of the workplace, so I usually base myself at co-working spaces. Coronavirus caused that system to go the way of the dodo. I was suddenly isolated and I had to adapt. This process was tough and it’s what caused my burnout. How burnout affected me When burnout started to affect me, the first thing I noticed was fatigue, not just in the physical sense. Psychologically I just felt drained. Everything I did seemed to require more effort, from doing calls to making a cup of coffee. Still, it didn’t matter how many coffees I drank, I still felt exhausted. Then the anxiety started, healthy doubt and caution turned into fixating and obsessing over the little things, which soon evolved into frenetic energy and fear. All of this experienced by someone who has spent a long time investing in and working on their mental health and well-being. Burnout creeps up on you slowly — you barely notice it happening until you’re firmly in its grasp, and by the time you understand what’s going on, it’s already too late. This time it was different, it was confusing as everything was going great, and I didn’t know how to get out of it due to the lockdown. After the psychological symptoms manifested, I began to notice changes beyond the fatigue. I was withdrawn, short-tempered, and behaved unpredictably. Worst of all I felt completely alone, and I couldn’t explain what was happening to me. It was like a silent breakdown of all personal boundaries. What was worse was that I could have seen this coming. When I was 21 I tried working from home, but it didn’t work out — I was less productive and I felt miserable due to the lack of structure. Lockdown was therefore the perfect recipe for a personal collapse. The first step to dealing with burnout is accepting it exists Does any of this sound familiar to you? Recognising yourself in my experience? Then you may have burnout, and the first step to fixing a problem is accepting it exists. The catch 22 of burnout is that you know you need to be productive, but you feel unable to deal with your growing pile of work. You subsequently feel guilty that you’re not being productive and this makes it worse. Worse still, it makes it harder for you to recognise the symptoms as you begin to experience denial. It’s a negative, self-perpetuating spiral. You need to know the tell-tale symptoms of burnout and to listen to them. Better still, you should implement a plan to avoid getting there in the first place. Identifying a problem in the early stages is always better for you. Now that I know the difficulties of burnout I know how to mitigate or prevent it in the future. The key is to recognise and accept it early on. There is no one way of doing this as everyone is different, and is in turn affected differently, but if you want to stay productive and mentally healthy you need to prioritise your well-being. We all want to focus on boosting our productivity but it became an unhealthy obsession for me. Focusing on your well-being and mental health isn’t a weakness, it’s a sign of mental strength. This needs to be a mantra you repeat every day, as I do. How do you treat burnout? So there I was stuck in the emotional and professional doldrums. I felt trapped, unable to express how isolated I felt. Luckily, I had a great social network to call on. I reached out to my loved ones and trusted friends, people who I knew would be direct and honest with me, and asked for their help. It wasn’t easy to express myself and I didn’t want to appear vulnerable, but then I realised that it isn’t a sign of weakness. It takes strength to admit (even to yourself) you have an issue and to address it by communicating with the people around you. Tweet this quote Your network reflects who you are as a person, if your contacts are trustworthy and honest you’re doing great. Exercise helped me tremendously and that old cliché of a “healthy body, healthy mind” really does hold true. I couldn’t go to the gym (my favourite place to retreat and re-balance) during the lockdown, so I took up running instead and continued my resistance band workouts. I’m competitive by nature, so having goals to focus on helped me move forward. Try to think of something that you really enjoy. In my case it was exercise but it could just as easily have been learning a new skill, cooking, anything that ‘sparks joy’. This will restore your sense of self-worth, improve your mood, and send endorphins running through your body. It’s all about designing a routine that keeps you on course and supports you. Prevention as a cure When it comes to burnout prevention really is the best cure — believe me, it’s not fun pulling yourself out of it. The best way you can start is by sticking to a solid routine, which, if you’re anything like me, might be difficult at the start. Make sure you get plenty of sleep (eight hours is ideal) and go to sleep at the same time every night. It’s not always easy, I know, there’s always something I have to finish (the classic entrepreneurial drive) but it’s well worth it… I can already predict some of you thinking ‘who needs sleep, I’m young, I’m energetic, I can work all night and still get results.’ Sure, for now, but look at how Coronavirus caught us totally off guard. The cost of burnout or poor mental health is much bigger than working a couple of extra hours every day. Tweet this quote Give yourself time to rest. You’ll feel so much better, and you’ll also find that you’re often more productive. Keep yourself moving, even if it’s just for a brisk walk, and make sure you take yourself out of your home office space regularly. We’re not designed to sit at a desk for eight hours a day, after all. This is about changing your physical environment and perspective as much as it is about your physical health. Never feel that you’re alone It’s okay not to be okay, and it’s especially okay to reach out to someone you trust when you experience burnout. The global economy is going to continue to be unpredictable while Coronavirus persists, and that’s why it’s important to be kind to yourself — I managed to pull myself up out of the hole I found myself in, and you can too. When you find yourself on even ground again, remember to be grateful for the blessings you have, whether they be professional success, family, recognition, etc. Though I was skeptical at first, I started to keep a gratitude journal where I keep track of the things I’m thankful for in my life. It’s easy to lose track of the good things in our lives-journalling brings these things to the top of one’s perceptions, allowing you to maintain gratitude as a state of mind. It’s hard to maintain this through burnout but with patience and practice, you’ll be able to. If you ever feel down in the dumps or completely burnt out I’m here to help if you ever need advice. You can find me on Twitter and LinkedIn. We’re all in this together, so let’s help look after each other. </sys

Understanding the Impact of Low-quality Trials in a PLG Company. ChartMogul is a product-led company. Since our inception, we have focused on building a product that our customers love and helps them grow their recurring revenue faster. Along the way, we have been documenting our findings and providing useful content to the SaaS community. This contributes to our acquisition strategy as well. We have a lot of trials every day, and the bulk of our customers start their buying journey with our content. So unquestionably, free trials are super important for us and we make sure we help our users succeed. However, not all trials are the same. Trials are different not only in terms of what type of user is trialing ChartMogul, but also in terms of user setup and how they are using our product. Here we will explore the combination of the two elements, and how they help us identify best-fit and poor-fit customer segments. This will then be used in our marketing efforts to eliminate false signals from the poor-fit trials and improve our reach to good-fit ones. Let’s dig in. Types of customer segments There are several characteristics we can use for our customer segmentation. These include: Company size Location Free email vs company email Other characteristics from the signup form and/or via customer enrichment tools Similarly, there are a lot of characteristics that come from product usage. For example: Has the user connected their billing data? Is that billing data in the right form/does the customer see their key metrics such as MRR? How often is the user logging in during the trial? More usage-based attributes Some segments are quite straightforward to generate. For instance, a customer that fits our ideal company size, from our focus regions, signed up with their business email, has imported all their data, and keeps logging in, is obviously a very high-quality lead. On the other hand, a user signing up with a free email account, from a country that is not traditionally strong for us and doesn’t connect billing data or show interesting activity, could very well be a bad-fit or a user that was probably looking for something else. These low-quality trials can wreak havoc on the data we use to make decisions. In our case, we have a long history of trials that were actually trying to find “chatmogul”, a product with a similar sounding name, but very different in every other regard. Especially in certain periods, the new trials from users that were actually searching for “chatmogul” were actually impactful in our numbers. I’m sure you can relate – not all leads are created equal. Let me walk you through how we can use ChartMogul’s Enrichment API to segment out the poor quality leads and produce more accurate data. Defining and creating the segments Once a new trial gets created, we start tracking them at our own ChartMogul account. We track metrics such as the number of trials for the period, trial-to-paid conversion rate, and other such leads and trials metrics. We typically do a lot of segmentation to better understand the leads that come in, however it might be necessary to add more data to each customer profile through custom attributes in order to arrive at better-defined groups The first thing we do is to define the segments and custom attributes we need to create, so that we can identify the rules and logic that represent this segment. To the example above, a good custom attribute definition would be “is_chatmogul”, with possible values either “true/false” or “high/med/low” depending on the confidence level. The second step is to define the inputs to be used for that segment. In this case, they would be “Company size”, “Country”, “Email”, “Phone number”, “Data import”, “Last login”, “Customer status”. The next step is to identify the sources of that information: Company size is a field that customers self-identify at sign-up. Alternatively, there are multiple customer enrichment tools that can be used for this purpose. Country/region is something we identify through Intercom and/or assisted by other sources of information such as their phone number. Email is being registered at sign up, hence we can easily identify if it is a free email or a work email address. Phone number, which is also being requested at sign up Data import, Last Login, Customer Status etc are product information we get from ChartMogul itself. Once we have the raw data, it’s possible to define the logic for the definition of “is_chatmogul”: “Chatmogul” leads that we try to identify are typically based in a specific region. We create a list of these countries. Since they are not subscription businesses, they typically just sign up and realize it’s the wrong service. That means that all usage based attributes are zero or close to that. They are consumers and not businesses, so they would typically sign up with their gmail account. Sometimes the country would not be captured at all, but the phone number is available. The country code of the phone number though helps in identifying the region. Taking all the above into account, we transform that logic into a script, where we identify each case in a typical IF/THEN/ELSE scenario. This was done once for all historical data, and will continue to apply for every new lead. Finally, after we had all the information, we use ChartMogul’s Enrichment API to push the information to our application, and then create the relevant segments. Alternatively, you can always send the enrichment data via a no-code tool such as Zapier. Understanding the business impact of the false trials The additional information on a lead level proved very important to understand the real trials and conversion rates. More interestingly, there were a few spikes in the number of trials, which was very interesting to identify their source. This is an example of new trials without any segmentation. The below figure shows the same metric in the same timeframe, but after filtering out a specific segment that we had identified and accounted for. So after removing its impact, it turned out that the number of leads coming in was normal. Next steps I hope that this study can help you reflect a bit on what can be improved in your own data (and how to use segmentation to do so). Next up, the revenue team and myself are working towards a more advanced attribution model, taking into account the various sources of leads such as content marketing, organic search etc, and the detailed sources and campaigns that initiated the lead generation. Stay tuned for more updates in the coming months.

[INST] Understanding the Impact of Low-quality Trials in a PLG Company [/INST]

ChartMogul is a product-led company. Since our inception, we have focused on building a product that our customers love and helps them grow their recurring revenue faster. Along the way, we have been documenting our findings and providing useful content to the SaaS community. This contributes to our acquisition strategy as well. We have a lot of trials every day, and the bulk of our customers start their buying journey with our content. So unquestionably, free trials are super important for us and we make sure we help our users succeed. However, not all trials are the same. Trials are different not only in terms of what type of user is trialing ChartMogul, but also in terms of user setup and how they are using our product. Here we will explore the combination of the two elements, and how they help us identify best-fit and poor-fit customer segments. This will then be used in our marketing efforts to eliminate false signals from the poor-fit trials and improve our reach to good-fit ones. Let’s dig in. Types of customer segments There are several characteristics we can use for our customer segmentation. These include: Company size Location Free email vs company email Other characteristics from the signup form and/or via customer enrichment tools Similarly, there are a lot of characteristics that come from product usage. For example: Has the user connected their billing data? Is that billing data in the right form/does the customer see their key metrics such as MRR? How often is the user logging in during the trial? More usage-based attributes Some segments are quite straightforward to generate. For instance, a customer that fits our ideal company size, from our focus regions, signed up with their business email, has imported all their data, and keeps logging in, is obviously a very high-quality lead. On the other hand, a user signing up with a free email account, from a country that is not traditionally strong for us and doesn’t connect billing data or show interesting activity, could very well be a bad-fit or a user that was probably looking for something else. These low-quality trials can wreak havoc on the data we use to make decisions. In our case, we have a long history of trials that were actually trying to find “chatmogul”, a product with a similar sounding name, but very different in every other regard. Especially in certain periods, the new trials from users that were actually searching for “chatmogul” were actually impactful in our numbers. I’m sure you can relate – not all leads are created equal. Let me walk you through how we can use ChartMogul’s Enrichment API to segment out the poor quality leads and produce more accurate data. Defining and creating the segments Once a new trial gets created, we start tracking them at our own ChartMogul account. We track metrics such as the number of trials for the period, trial-to-paid conversion rate, and other such leads and trials metrics. We typically do a lot of segmentation to better understand the leads that come in, however it might be necessary to add more data to each customer profile through custom attributes in order to arrive at better-defined groups The first thing we do is to define the segments and custom attributes we need to create, so that we can identify the rules and logic that represent this segment. To the example above, a good custom attribute definition would be “is_chatmogul”, with possible values either “true/false” or “high/med/low” depending on the confidence level. The second step is to define the inputs to be used for that segment. In this case, they would be “Company size”, “Country”, “Email”, “Phone number”, “Data import”, “Last login”, “Customer status”. The next step is to identify the sources of that information: Company size is a field that customers self-identify at sign-up. Alternatively, there are multiple customer enrichment tools that can be used for this purpose. Country/region is something we identify through Intercom and/or assisted by other sources of information such as their phone number. Email is being registered at sign up, hence we can easily identify if it is a free email or a work email address. Phone number, which is also being requested at sign up Data import, Last Login, Customer Status etc are product information we get from ChartMogul itself. Once we have the raw data, it’s possible to define the logic for the definition of “is_chatmogul”: “Chatmogul” leads that we try to identify are typically based in a specific region. We create a list of these countries. Since they are not subscription businesses, they typically just sign up and realize it’s the wrong service. That means that all usage based attributes are zero or close to that. They are consumers and not businesses, so they would typically sign up with their gmail account. Sometimes the country would not be captured at all, but the phone number is available. The country code of the phone number though helps in identifying the region. Taking all the above into account, we transform that logic into a script, where we identify each case in a typical IF/THEN/ELSE scenario. This was done once for all historical data, and will continue to apply for every new lead. Finally, after we had all the information, we use ChartMogul’s Enrichment API to push the information to our application, and then create the relevant segments. Alternatively, you can always send the enrichment data via a no-code tool such as Zapier. Understanding the business impact of the false trials The additional information on a lead level proved very important to understand the real trials and conversion rates. More interestingly, there were a few spikes in the number of trials, which was very interesting to identify their source. This is an example of new trials without any segmentation. The below figure shows the same metric in the same timeframe, but after filtering out a specific segment that we had identified and accounted for. So after removing its impact, it turned out that the number of leads coming in was normal. Next steps I hope that this study can help you reflect a bit on what can be improved in your own data (and how to use segmentation to do so). Next up, the revenue team and myself are working towards a more advanced attribution model, taking into account the various sources of leads such as content marketing, organic search etc, and the detailed sources and campaigns that initiated the lead generation. Stay tuned for more updates in the coming months.

<sys> [INST] Understanding the Impact of Low-quality Trials in a PLG Company [/INST] ChartMogul is a product-led company. Since our inception, we have focused on building a product that our customers love and helps them grow their recurring revenue faster. Along the way, we have been documenting our findings and providing useful content to the SaaS community. This contributes to our acquisition strategy as well. We have a lot of trials every day, and the bulk of our customers start their buying journey with our content. So unquestionably, free trials are super important for us and we make sure we help our users succeed. However, not all trials are the same. Trials are different not only in terms of what type of user is trialing ChartMogul, but also in terms of user setup and how they are using our product. Here we will explore the combination of the two elements, and how they help us identify best-fit and poor-fit customer segments. This will then be used in our marketing efforts to eliminate false signals from the poor-fit trials and improve our reach to good-fit ones. Let’s dig in. Types of customer segments There are several characteristics we can use for our customer segmentation. These include: Company size Location Free email vs company email Other characteristics from the signup form and/or via customer enrichment tools Similarly, there are a lot of characteristics that come from product usage. For example: Has the user connected their billing data? Is that billing data in the right form/does the customer see their key metrics such as MRR? How often is the user logging in during the trial? More usage-based attributes Some segments are quite straightforward to generate. For instance, a customer that fits our ideal company size, from our focus regions, signed up with their business email, has imported all their data, and keeps logging in, is obviously a very high-quality lead. On the other hand, a user signing up with a free email account, from a country that is not traditionally strong for us and doesn’t connect billing data or show interesting activity, could very well be a bad-fit or a user that was probably looking for something else. These low-quality trials can wreak havoc on the data we use to make decisions. In our case, we have a long history of trials that were actually trying to find “chatmogul”, a product with a similar sounding name, but very different in every other regard. Especially in certain periods, the new trials from users that were actually searching for “chatmogul” were actually impactful in our numbers. I’m sure you can relate – not all leads are created equal. Let me walk you through how we can use ChartMogul’s Enrichment API to segment out the poor quality leads and produce more accurate data. Defining and creating the segments Once a new trial gets created, we start tracking them at our own ChartMogul account. We track metrics such as the number of trials for the period, trial-to-paid conversion rate, and other such leads and trials metrics. We typically do a lot of segmentation to better understand the leads that come in, however it might be necessary to add more data to each customer profile through custom attributes in order to arrive at better-defined groups The first thing we do is to define the segments and custom attributes we need to create, so that we can identify the rules and logic that represent this segment. To the example above, a good custom attribute definition would be “is_chatmogul”, with possible values either “true/false” or “high/med/low” depending on the confidence level. The second step is to define the inputs to be used for that segment. In this case, they would be “Company size”, “Country”, “Email”, “Phone number”, “Data import”, “Last login”, “Customer status”. The next step is to identify the sources of that information: Company size is a field that customers self-identify at sign-up. Alternatively, there are multiple customer enrichment tools that can be used for this purpose. Country/region is something we identify through Intercom and/or assisted by other sources of information such as their phone number. Email is being registered at sign up, hence we can easily identify if it is a free email or a work email address. Phone number, which is also being requested at sign up Data import, Last Login, Customer Status etc are product information we get from ChartMogul itself. Once we have the raw data, it’s possible to define the logic for the definition of “is_chatmogul”: “Chatmogul” leads that we try to identify are typically based in a specific region. We create a list of these countries. Since they are not subscription businesses, they typically just sign up and realize it’s the wrong service. That means that all usage based attributes are zero or close to that. They are consumers and not businesses, so they would typically sign up with their gmail account. Sometimes the country would not be captured at all, but the phone number is available. The country code of the phone number though helps in identifying the region. Taking all the above into account, we transform that logic into a script, where we identify each case in a typical IF/THEN/ELSE scenario. This was done once for all historical data, and will continue to apply for every new lead. Finally, after we had all the information, we use ChartMogul’s Enrichment API to push the information to our application, and then create the relevant segments. Alternatively, you can always send the enrichment data via a no-code tool such as Zapier. Understanding the business impact of the false trials The additional information on a lead level proved very important to understand the real trials and conversion rates. More interestingly, there were a few spikes in the number of trials, which was very interesting to identify their source. This is an example of new trials without any segmentation. The below figure shows the same metric in the same timeframe, but after filtering out a specific segment that we had identified and accounted for. So after removing its impact, it turned out that the number of leads coming in was normal. Next steps I hope that this study can help you reflect a bit on what can be improved in your own data (and how to use segmentation to do so). Next up, the revenue team and myself are working towards a more advanced attribution model, taking into account the various sources of leads such as content marketing, organic search etc, and the detailed sources and campaigns that initiated the lead generation. Stay tuned for more updates in the coming months. </sys