So SaaS Capital put out its latest report on SaaS retention and NRR after having surveyed over 1,500 SaaS companies and professionals.

There are a lot of great learnings and metrics in the report, and a few stood out to me:

#1.  Annual Contracts Didn’t Boost NRR, And Even Multi-Year Contracts Only Had a Modest Impact on NRR.  We tend to intuitively think annual contracts help combat churn, but they really don’t — they just defer it.  And as time goes on, that doesn’t really help you much.  This data confirms that.  Let customers buy the way they want to buy.

#2.  Median NRR is 102% across all SaaS companies, Media Gross Retention is 91%.  Not a profound learning, but a great confirmation.

So founders, in many cases, were taught some of the wrong lessons in the Boom of late ’20 to early ’22. 

They were taught you could fundraise in a week. 

That you could sort of hide things.  And that you didn’t even need to have board meetings or really do much for your investors.

Now that’s biting founders when their investors aren’t as supportive as they would otherwise be.  And that just doesn’t help you.

So I updated a classic post on the 9 Types of CEOs that VCs don’t want to work with, along with a new video above. The 9 types. In rough order.

This edition of the SaaStr Daily is sponsored in part by Notion

Organize your docs, projects, and wiki in one connected workspace. Then leverage the power of AI right inside Notion, instead of jumping between your work and a separate AI-powered tool. No waitlist, no "limited preview.”

We’re less than 4 weeks away from SaaStr Europa in London, June 6-7!  Our 4th ever SaaStr Europa.  The first 2 were in Paris, last year was at the beach in sunny Barcelona, and finally, we’ve come to London!!

As always, we have an amazing agenda for you! Here are just a few of the top SaaS leaders that will be speaking.

We kicked off a new series that productized something we’ve been doing for 10+ years at SaaStr … getting top leaders share their mistakes.  So the rest of us can get to $100m+ ARR faster, with less stress and more success.  We’ve done a ton of this content over the years, but never on a consistent basis. 

The first was with Nick Mehta, CEO of Gainsight, and it was very popular.

Next up is Jason Cohen, founder of $100m+ WP Engine.

His classic session from 2019 SaaStr Annual continues to be one of our more popular pieces of content on YouTube.

I really thought this first one was truly excellent and hit home.  

Take a read, and a watch, here. 

This edition of the SaaStr Daily is sponsored in part by Upzelo

Increase customer retention, LTV and generate more revenue with Upzelo. Take a look at their live demo today. No sign-up is required.

Roughly, for me, for as long as it’s about a 10-hour a week job. Or often, maybe only up to $3m-$5m in ARR or so. 

These days, especially, I see way too many SaaS companies at $8m-$10m ARR or beyond without a true VP of Product.

First, they wait too long to hire a full-time “head of product” even after the product gets complex.

Once your product has 50–100 workflows, dozens of use cases, 100s or 1000s of customers, etc. … even just 15-20+ really big customers, all using your product differently … it’s just too much to hack and juggle informally.

My rough rule of thumb is somewhere between $3m and $5m in ARR in SaaS most products just get too complicated to hack product anymore. You’ll ship better-prioritized features, with happier customers, with better trade-offs, with a full-time head of product.

CEOs that hang on too long here start shipping features and products that are no longer force-ranked the way they should be. And the key is to hire a true head of product. Someone that can own it, and in the past, has owned a product. If you hire someone too junior, you get a project manager but not enough of an owner here.

© SaaStr 2023

644 Emerson St. Suite 200, Palo Alto, CA, 94301

If you'd like to stop receiving the SaaStr Daily, click here