Free Cash Flow is a key metric for any SaaS investor and thus for SaaS CFOs and CEOs. Moreover Free Cash Flow Margin is a key variable in the Rule of 40 - a key enterprise value creation metric. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the value behind the FCF metric and the different ways to calculate! During this episode Dave and Ray discuss the following elements of Free Cash Flow: Where to find Free Cash Flow on public company filings The three primary Cash Flow statements Dif...
Sep 18, 2024•24 min•Ep. 55
Bessemer Venture Partners recently released their 9th annual Cloud 100 Report. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the impact of AI companies on the top 100 private cloud companies which increased their aggregate enterprise value to $820B and increased their growth rate to 70%! Key highlights Dave and Ray discuss include: Aggregate enterprise value of the Cloud 100 increased 25% year over year Average growth rate increased from 55% in 2023 to 70% in 2024 97% of the Cloud 100 ...
Sep 09, 2024•21 min•Ep. 54
Go-to-Market continues to be a trending topic for the majority of B2B SaaS companies being challenged to optimize efficient revenue growth. ICONIQ recently published a report entitled " State of GTM Benchmarks " and Dave "CAC" Kellogg and Ray "Growth" Rike discuss the report's findings and what the benchmarks mean to both operators and investors. Key GTM benchmarks covered during today's episode include: Growth Rate Trends ('24 vs '23) Customer Acquisition Logo Velocity Pipeline Coverage Ratio P...
Aug 21, 2024•23 min•Ep. 53
The SaaS Mendoza line highlights the slope of the long term growth rate that investors expect and operators should target on a path to IPO. Dave "CAC" Kellogg and Ray "Growth" Rike break down the updated expectations. Veteran software VC, Rory O’Driscoll of Scale Venture Partners proposed a theory to identify the growth rate below which a company may not be on the VC-to-IPO trajectory. In 2018, Rory started with an analysis of SaaS companies at the time of IPO. In 2018, SaaS companies going publ...
Aug 13, 2024•23 min•Ep. 52
Go-to-Market trouble shooting is a very common activity in 2024 as B2B SaaS companies continue to face growth and especially efficient revenue growth challenges. In this episode Dave "CAC" Kellogg shares his top-down GTM trouble shooting method which boils down into two primary categories: Pipeline Coverage Pipeline Conversion Dave and Ray dive into the details on the key metrics to evaluate and what they tell a SaaS GTM operator about the current state of their GTM performance. Key insights are...
Aug 07, 2024•27 min•Ep. 51
OneStream went public on July 24, 2024 and Dave "CAC" Kellogg and Ray "Growth" Rike dedicated this episode to discussing their S-1 and Initial Public Offering (IPO). OneStream, the company offering their Digital Finance Cloud to the Office of Finance has a long history including being self-funded, being acquired by Private Equity (KKR) in 2019 and beginning the transition from a perpetual license software company to a SaaS company in 2020 on the path to their IPO. During the episode, Dave and Ra...
Jul 30, 2024•26 min•Ep. 50
Burn Multiple is a metric created by David Sacks to measure the capital efficiency of ARR growth in B2B SaaS companies. In this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss alternatives to the Burn Multiple and then dive into the details of the two primary burn multiple components which are Net Burn and Net New ARR. There are multiple metrics that attempt to measure capital efficiency of B2B SaaS companies including: Hype Ratio = Capital Raised / ARR Cash Conversion Score: Current A...
Jul 24, 2024•24 min•Ep. 49
Bessemer Venture Partners recently released their " State of the Cloud 24 " which included the catch phrase "The Legacy Cloud is Dead - Long Live AI Cloud!" Dave "CAC" Kellogg and Ray "Growth" Rike discuss the report and the opportunities and threats to traditional SaaS companies. Topics discussed include: Social Media Buzz and Sources of "SaaS is Dead" Gen AI VC Funding Categories and Sources Top Five Gen AI Trends Trend 1: AI foundation models set the stage for Big Tech’s new battle-of-the-cen...
Jul 16, 2024•26 min•Ep. 48
McKinsey recently published a report entitled " Navigating the Generative AI Disruption in Software " that Dave "CAC" Kellogg and Ray "Growth" Rike discuss in his episode. Some of the primary topics discussed include: GEN AI penetration velocity today vs SaaS in the early days GEN AI impact on switching from traditional SW/SaaS vendors Where will the rewards of Gen AI go Impact on SaaS Growth and Churn Rates One of the most interesting parts of the report and this episode is that expansion growt...
Jul 08, 2024•25 min•Ep. 47
What is the difference between the price and value of a SaaS company? How do metrics such as Enterprise Value to EBITDA multiples play a role in this discussion? Dave "CAC" Kellogg and Ray "Growth Rike discuss the topic on this episode of SaaS Talk with the Metrics Brother and cover a wide array of topics including: What is a SaaS company worth? What is the definition of "price vs value" in the stock market Examining Valuation Multiples What They Miss, Why They Differ, and the Link to Fundamenta...
Jul 01, 2024•21 min•Ep. 46
Trouble shooting Go-to-Market (GTM) issues is a critical competency to master for every SaaS company as they face the pressures of lower growth and reduced revenue growth efficiency. Dave "CAC" Kellogg and Ray "Growth" Rike introduce a GTM trouble shooting framework that addresses the five primary opportunities to improve GTM efficiency. The five key areas of Go-to-Market efficiency opportunities include: Pipeline Generation Pipeline Conversion Win Rates + ACV Customer Retention Customer Expansi...
Jun 18, 2024•23 min•Ep. 45
Benchmarkit recently published their 2024 SaaS Performance Metrics Benchmark Report based upon 936 B2B SaaS companies participation. Dave "CAC" Kellogg and Ray "Growth" Rike discuss the recent trends and insights. SaaS Metrics and the corresponding benchmarks discussed include: 2023 Growth Rates 2024 Planned Growth Rates CAC Ratio (Blended, New and Expansion) CAC Payback Period Net Revenue Retention Sales and Marketing expenses as a % of Revenue ARR per Employee The full report and interactive b...
Jun 12, 2024•24 min•Ep. 44
Is Pipeline Coverage Ratio simply the inverse of the win rate? Many people will translate a 20% win rate into the need for a 5:1 Pipeline Coverage Ratio - Dave "CAC" Kellogg and Ray "Growth" Rike dive into why that just isn't the case! There are multiple variables that need to be considered including: Win Rate versus Closed-Won Rate Conversion - there is a difference What happens to Pipeline Coverage Ratio when deals are pushed into or pushed out of the quarter How is Pipeline Coverage Ratio dif...
Jun 06, 2024•22 min•Ep. 43
SaaS Account Executive Benchmarks including On-Target Earnings, Commission Rates, Quota, Quota Achievement, Renewal and Expansion Responsibilities are a few of the benchmarks that Dave "CAC" Kellogg and Ray "Growth" Rike discuss in this episode. Account Executive Benchmarks discussion include: On-Target Earnings (2024 vs 2022) Base Salary and Variable Compensation Mix Commission Rates (2024 vs 2022) Quota Assignment by ACV Quota Achievement Renewal and Expansion Responsibilities If you are leadi...
May 22, 2024•23 min•Ep. 42
Logan Bartlett, Managing Director at Redpoint Ventures recently shared the Market Overview Report they presented to their Limited Partners in March '24 at their AGM event at the Chase Center in San Francisco. Ray "Growth" Rike and Dave "CAC" Kellogg review the key insights during this episode. Insights that Dave and Ray discussion include: Enterprise Valuations - a return to 2019 Growth Rate trends - a return to a time long ago in a land far away The value of Growth vs Profitability - the trends...
May 14, 2024•22 min•Ep. 41
Rubrik, a cloud industry cybersecurity company went public on April 25th - Dave "CAC" Kellogg and Ray "Growth" Rike break down the key metrics that Rubrik used as the foundation to their S-1 and Initial Public Offering. Those metrics include: Annual Recurring Revenue Growth Revenue (GAAP) Growth Net Revenue Retention Sales and Marketing Expenses as % of Revenue Free Cash Flow versus Net Income The Metrics Brothers also discuss the Rubrik transition to a recurring revenue model and the two-tier s...
May 08, 2024•24 min•Ep. 40
Dave "CAC" Kellogg and Ray "Growth" Rike discuss how a "growth rate" endures for a SaaS company trend over time! Topics covered during the conversation include: T2D3 Growth Model and Mantra from 2015 "56789" Growth Model from Metric Brother Dave "CAC" Kellogg The Impact of Growth Endurance decreasing to 65% in 2023 versus 80% in 2021 Growth Endurance is the measure of how a company's growth rate endures over time: GE = current year’s growth rate / last year’s growth rate. At an 80% Growth Endura...
Apr 30, 2024•21 min•Ep. 39
Dave "CAC" Kellogg and Ray "Growth" Rike continue their discussion on the SaaS Metrics Maturity Model which includes the below five levels: Level 1: Foundation Level 2: Trust Level 3: Strategic Linkage Level 4: Metrics Culture Level 5: Trajectory Level 1: Lay the foundation Definitions and calculations Pipeline stages, forecast categories, close dates, values, SaaS metrics Semantics - what do words like best case, forecast, commit and downside mean Instrument underlying systems (GL, CRM, Billing...
Apr 25, 2024•24 min•Ep. 38
Dave "CAC" Kellogg and Ray "Growth" Rike discuss the 5 root causes that created the need to develop a SaaS Metrics Maturity Model for companies as they scale. The top five root causes that lead to the 15 primary problems in how companies use metrics include: There’s no shared metrics foundation There’s no trust Metrics are not integral to strategy The culture is not metrics-driven Metrics are not being used define trajectory and long-term goals This episode discusses the key challenges in using ...
Apr 16, 2024•23 min•Ep. 37
Dave "CAC" Kellogg and Ray "Growth" Rike discuss the Customer Lifetime Value to Customer Acquisition Cost (LTV:CAC) Ratio - a metric many consider the ultimate compound metric that investors love. During this episode topics covered include: How to calculate Customer Lifetime Value How to calculate Customer Acquisition Cost Benchmarks for LTV:CAC Ratio and the translation to Rate of Return Primary input variables and predictive indicators to optimize LTV:CAC Ratio If you have ever heard of the LT...
Apr 11, 2024•18 min•Ep. 36
This is a replay of one of the most popular SaaS Talk episodes (#5) published in season #1. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into all things Customer Acquisition Cost (CAC) including the CAC Ratio. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info .
Apr 02, 2024•24 min•Ep. 35
Aileen Lee, Founder and Managing Partner at Cowboy Ventures recently wrote an article entitled " Welcome Back to the Unicorn Club, 10 Years Later " (1/18/24) which was a follow up to an article she wrote in November, 2013 entitled " Welcome to the Unicorn Club: Learning from Billion-Dollar Startups ". Our SaaS Talk ™ with the Metrics Brothers co-hosts, Dave "CAC" Kellogg and Ray "Growth" Rike do a deep dive into how private and public company valuations are calculate, explore the difference betw...
Mar 21, 2024•23 min•Ep. 34
ICONIQ Growth recently published their " Essential Go-to-Market (GTM) Board Slides ", which includes the categories and metrics that they recommend be included in the GTM portion of the board deck. The template includes slides for the each category of GTM metrics they recommend including: GTM Scorecard Ideal Customer Profile ARR Funnel Logo Velocity Revenue and Logo Retention Win/Loss Analysis Pipeline Lead and Funnel Conversion Sales Capacity and Productivity Team Update and Planning Dave "CAC"...
Mar 12, 2024•25 min•Ep. 33
Common Paper recently released a benchmark report on Cloud contract terms and conditions based upon data from over 1,000 companies. This is the first benchmarking report we have found that covers SaaS/Cloud Master Service Agreements. Dave "CAC" Kellogg and Ray "Growth" Rike, better known as the Metrics Brothers break down the benchmarks contained in the report including: Agreement Length Payment Terms Limitations of Liability AI and Data Privacy Insurance Requirements Design Partner Agreements I...
Mar 05, 2024•22 min•Ep. 32
Nick Mehta, CEO of Gainsight joins Dave "CAC" Kellogg and Ray "Growth" Rike to discuss all things Customer Success and metrics! This is a "special episode" that combines deep Customer Success (CS) expertise with moments of light humor, pop culture references, and SaaS industry insider insights! Topics discussed and benchmarks shared during this episode include: ARR per CSM Customers per CSM Customer Success Reporting Relationships Expansion ARR and Renewal Responsibility CSAT or NPS Further into...
Feb 27, 2024•21 min•Ep. 31
Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top metrics for a Customer Service organization that span the top three goals of CS including resolving, deflecting, and/or preventing cases. During this episode, we lean heavily on CAC's background as a technical support agent for the first two years of his career, and then as the head of the Salesforce Service Cloud. The primary job of Customer Service (Customer Support) including the three below macro-level goals Resolve Cases Deflect Cases...
Feb 20, 2024•20 min•Ep. 30
What are the top metrics for a Professional Services (PS) leader in a B2B SaaS company? During this episode, our hosts Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top PS metrics including: Professional Services Revenue / Billings Gross Margin (%) Billable Utilization Rate ($ and Hours) Non Billable Utilization including reasons Capacity ($ Billables and # Hours) Before diving deep into the actual metrics, Dave highlighted that PS's primary job is to "maximize ARR without losing money". ...
Feb 14, 2024•24 min•Ep. 29
Dave "CAC" Kellogg and Ray "Growth" Rike discuss the top metrics for a Chief Customer Officer to use presenting to the board and to report to the executive team when the CCO has responsibility for: 1) Customer Success; 2) Professional Services and; 3) Customer Support Net Revenue Retention Gross Revenue Retention Customer Health Score Billable PS Revenue Billable Utilization Gross Margin Cases per Agent Post Case Closed CSAT Deflections Those these are the high level metrics for a CCO, each func...
Feb 10, 2024•23 min•Ep. 28
What are the top metrics for a Chief Marketing Officer to use when presenting to the board of directors and in a Quarterly Business Review. Dave "CAC" Kellogg and Ray "Growth" Rike discuss the below top 7 CMO metrics during this episode: Marketing Sourced Pipeline Generation Marketing Sourced Pipeline Conversion Day 1 Pipeline Coverage Demand Generation Cost per Opportunity Brand Awareness Website Visitors Sales CSAT Dave recently wrote a detailed blog article on this topic which can be read by ...
Feb 05, 2024•23 min•Ep. 27
Top 5 Metrics for Chief Revenue Officers that own the entire customer journey, including Customer Acquisition, Customer Retention and Customer Expansion process. Dave "CAC" Kellogg and Ray "Growth" Rike discuss 5 of the top metrics for a Chief Revenue Officer in 2024 including: ARR "Actual vs Plan" - the keep your job metric Pipeline Performance - Coverage & Efficiency Net Revenue Retention CAC Ratio CLTV:CAC Ratio Key context to this episode, is it discusses 5 of the top metrics for a true ...
Jan 25, 2024•23 min•Ep. 26
