Rule of 40 has been the standard metric B2B SaaS investors and operators have used to measure balanced growth...will the Rule of 40 be surpassed by the new Rule of X recently created by Bessemer Ventures? Join Dave "CAC" Kellogg and Ray "Growth" Rike as they discuss the details about the Rule of X including: Foundational calculation formula for the Rule of X How to find the "Growth Weighted" M in the formula What is a good "Rule of X" score The Rule of 40 has been around for over a decade - but ...
Jan 16, 2024•23 min•Ep. 25
How the Enterprise Value of a SaaS company impacted by growth rate is the topic of today's conversation with Dave "CAC" Kellogg and Ray "Growth" Rike - the result is a new metric named "ERG" - the Enterprise Value to Revenue to Growth Rate Multiple. During this episode, Dave and Ray highlight several leading public, B2B Cloud companies and how their Enterprise Value to Revenue multiples are impacted when the growth rate is factored in. With a public Cloud/SaaS company median growth rate of 21%, ...
Jan 10, 2024•23 min•Ep. 24
Dave "CAC" Kellogg and Ray "Growth" Rike go out on a limb and share their predictions on the Top 5 SaaS Metrics in 2024 - some are old friends and two are brand new for 2024!!! 2023 was a year focused on efficient growth, extending cash runways and making progress towards profitability. Simultaneously, certain metrics became more important in correlation to enterprise value to revenue multiples - including the re-emergence of the Rule of 40 being critical to company valuations. Which metrics are...
Jan 03, 2024•22 min•Ep. 23
Dave "CAC" Kellogg and Ray "Growth" Rike discuss the long standing, industry standard SaaS Metrics Benchmark report from KeyBanc Capital Markets, which was released in December, 2023. If you are a long-time SaaS veteran or new to the SaaS industry - this report has been the de facto SaaS Metrics benchmarking report for 14 years. This year's report includes a total population of 106 companies, and often comes up short in comparison to previous year's report. The small population makes segmenting ...
Dec 29, 2023•22 min•Ep. 22
Dave "CAC" Kellogg and Ray "Growth" Rike continue their break down the recent Battery Ventures - State of the OpenCloud 2023 Report which includes a historic view of performance benchmarks and some predictions on how AI will impact performance metrics in the future. During Part 2 of this episode the co-hosts cover several metrics and SaaS industry trends including: Growth Rates Technology Buyer Sentiment heading into 2024 The impact of balanced growth + profitability Business model and pricing e...
Dec 20, 2023•34 min•Ep. 21
Dave "CAC" Kellogg and Ray "Growth" Rike break down the recent Battery Ventures - State of the OpenCloud 2023 Report which includes a historic view of performance benchmarks and some predictions on how AI will impact performance metrics in the future. During this episode the co-hosts cover several metrics and SaaS industry trends including: Growth Rates Technology Buyer Sentiment heading into 2024 The impact of balanced growth + profitability Business model and pricing evolution Stock Option Re-...
Dec 12, 2023•20 min•Ep. 20
Dave "CAC" Kellogg and Ray "Growth" Rike analyze the recently published OpenView Partners 2023 Benchmark Report which was conducted in partnership with Paddle. Interesting insights into the declining growth rates and increased customer churn trends. Key metrics and the associated benchmarks segmented by company ARR analyzed include: Growth Rate Rule of 40 Net Revenue Retention Gross Revenue Retention CAC Payback Period Headcount Revenue/FTE The OpenView 2023 Benchmark Report is at: openviewpartn...
Nov 28, 2023•26 min•Ep. 19
Rule of 40 is a long standing metric used by investors to determine the health and enterprise value of a SaaS company, that is misunderstood far too often - so CAC and Growth dedicated an episode to how the Rule of 40 is calculated and how it impact company valuations including: Calculation formula Best variable for the operating profitability component Balance of growth and profitability yielding the highest valuation multiples When does the Rule of 40 become valuable versus a vanity metric If ...
Nov 15, 2023•23 min•Ep. 18
Presenting performance metrics at a board meeting is a critical skill for every SaaS CEO, CFO and executive team member - Dave "CAC" Kellogg and Ray "Growth" Rike share a few best practices during this episode including: First slide provides a holistic executive summary Second slide establishes the foundation for every other slide The importance of showing trends and establishing context Mistakes to avoid This episode encapsulates much of the content from two different presentations shared at Sa...
Nov 07, 2023•28 min•Ep. 17
SaaS metric benchmark trends over the last decade highlights the challenges associated with the rapid expansion and evolution of the B2B SaaS industry. Some of the significant changes that every SaaS industry stakeholder should understand include: Expansion as a % of Revenue Growth Gross Churn Rate Net Revenue Rate Customer Acquisition Cost Ratio (cost of acquiring a $ of Growth ARR - New and Expansion) Rule of 40 ARR per FTE Matt Harney - at Cloud Ratings did a great job at putting this report ...
Nov 03, 2023•22 min•Ep. 16
Dave "CAC" Kellogg and Ray "Growth" Rike discuss all things Bookings, Total Contract Value, Annual Contract Value, Billings and revenue including: Bookings vs Total Contract Value vs Annual Contract Value Billings - more than an invoice? Revenue - CARR, ARR and GAAP B2B SaaS companies regularly use the above terms, but unfortunately not always consistently defined, calculated and/or utilized. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/priva...
Oct 18, 2023•26 min•Ep. 15
Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the ICONIQ | GROWTH 2023 - The New Era of Efficient Growth Report to discussed several key report components including: Enterprise Five Metrics Resiliency Rubric Trade-off between Growth and Efficiency Expansion vs New Logo contribution to New ARR Operating Expenses as a % of Revenue Benchmark utilization cautions, concerns and insights Go grab the ICONIQ | Growth Report - take it for a read while listening to this episode to see if some of...
Oct 05, 2023•25 min•Ep. 14
Dave "CAC" Kellogg and Ray "Growth" Rike continue their discussion on the importance of measuring revenue retention. This week they cover Net Revenue Retention (NRR) - a top three B2B SaaS Metric. ' During this episode they cover many aspects of how to calculate and use Net Revenue Retention including: Cohort method versus formula method The impact of Usage-Based Pricing on the NRR calculation NRR benchmarks using a Good, Better, Best framework Ideas on how to optimize and increase NRR In additi...
Sep 21, 2023•27 min•Ep. 13
On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss four SaaS metrics from the Klaviyo S-1 including: Annual Recurring Revenue (ARR) CAC Payback Period Gross Revenue Retention (GRR) Net Revenue Retention (NRR) This conversation covers many of the nuances of SaaS metrics and uncovers the lack of a standard way that even the best companies define and calculate SaaS metrics See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-no...
Sep 14, 2023•26 min•Ep. 12
On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss Gross Revenue Retention (GRR), aka Gross Dollar Retention (GDR), and the different nuances to consider when calculating this metric. In addition, Dave and Ray discuss why this metric is important, how to calculate GRR and how to use the results to inform decision making. The Metrics brothers discuss the following nuances of calculating Gross Revenue Retention The definition of GRR Cohort vs Formula Method What to exclude and inclu...
Sep 05, 2023•26 min•Ep. 11
On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss Customer Lifetime Value, and the different input variables required to calculate this compound, multi-variable metric. The Metrics brothers discuss the following nuances of calculating Customer Lifetime Value The basics - CLTV or LTV Revenue or Gross Profit Which number to use for churn in the formula (GRR, Logo Churn, all ARR or only available to renew ARR) Which number to use for the Average Revenue Per Account (ARPA) - new cust...
Aug 21, 2023•22 min•Ep. 10
On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss in detail how Usage-Based Pricing (UBP) impacts the calculation of Customer Acquisition Cost and it's efficiency derivatives including CAC Ratio and CAC Payback Period. They discuss the three primary different types of Usage-Based Pricing Models including: Pure usage-based or consumption-based pricing with no minimum commitments Minimum commitment agreement that includes up to #x units and then overage $/unit over the minimum Annu...
Aug 15, 2023•23 min•Ep. 9
The Metrics Brothers discuss how Product-Led Growth (PLG) including the use of Freemiums and/or Free Trials impacts the Customer Acquisition Cost (CAC) calculation. Each PLG model may have different times to value, conversion rates to paid users, different definitions of when a free user becomes a customer which all can impact the CAC calculation formula and the resultant usefulness of the metrics During this weeks episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss CAC Payback Period, and...
Aug 01, 2023•24 min•Ep. 8
The Metrics Brothers discuss the use of Customer Acquisition Cost Payback Period (CAC Payback Period). On the surface CAC Payback Period (CPP) is easy to understand, yet in practice there are many nuances and considerations such as using Gross Margin in the CPP calculation, and if CAC Payback Period is an efficiency, risk or return metric. During this weeks episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss CAC Payback Period, and provide a little entertainment along the journey to using ...
Jul 26, 2023•22 min•Ep. 7
The Metrics Brothers discuss advanced topics and uses of Customer Acquisition Cost (CAC) and the CAC Ratio. On the surface CAC and CAC related metrics appear easy to understand, yet in practice there are many nuances, considerations and approaches to optimize the insights provided by CAC. During this weeks episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss those advanced topics, and provide a little entertainment along the journey to using CAC in your SaaS company. See Privacy Policy at h...
Jul 18, 2023•28 min•Ep. 6
The Metrics Brothers discuss Customer Acquisition Cost (CAC) and the CAC Ratio. The two metrics are closely related, yet are fundamentally two very different SaaS metrics. During this weeks episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss the value of each metric, when to use them and how to calculate each metric. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info ....
Jul 11, 2023•24 min•Ep. 5
How do B2B SaaS leaders measure the financial returns on pipeline generation? On the surface this question may seem quite simple, but one with that presents several options, especially when considering how a CFO evaluates return on investment. The Metrics Brothers, Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the nuances and considerations of pipeline returns on this week's episode of SaaS Talk ™ with the Metrics Brothers. See Privacy Policy at https://art19.com/privacy and California...
Jul 04, 2023•23 min•Ep. 4
In this episode of SaaS Talk™ with the Metrics Brothers, Dave "CAC" Kellogg and Ray "Growth Rike discuss Pipeline Measurements See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info .
Jun 29, 2023•24 min•Ep. 3
In this episode of SaaS Talk™ with the Metrics Brothers, Dave "CAC" Kellogg and Ray "Growth" Rike, they discuss all things Pipeline Generation See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info .
Jun 20, 2023•22 min•Ep. 2
SaaS Talk™ dives deep into the world of Software as a Service, discussing the successes and hurdles that C-suite leaders in the SaaS industry encounter. Co-hosted by Ray Rike, CEO of Rev Ops Squared, and Dave Kellogg, Executive In Residence at Balderton Capital and Principal at Dave Kellogg Consulting, this podcast brings forth insights and perspectives from esteemed SaaS leaders. They share knowledge and experience on a wide array of topics, including SaaS strategy, business model innovation, c...
May 10, 2023•22 min•Ep. 1
