The Three SaaS Metrics That Matter in 2024

What are the three most under-discussed metrics on social media, with VCs, and especially with founders? SaaStr founder and CEO Jason Lemkin shares his top three SaaS metrics that matter in 2024:

1. Net new customer count
2. Growth vs. efficiency
3. The bar to IPO

So we’re almost there!! 

2024 SaaStrEuropa.com is June 4-5 in London!

Join us for 2+ fun-filled days, great parties, 100s of braindates and workshops, 1000s of connections, and so much more!  And meet everyone from Harry Stebbings to the CEO of Gong!

Be in the front row for these top 5 sessions:

1. Lessons Learned from Scaling to Billions with Gong’s Co-Founder & CEO

2. Lessons Learned from Scaling GTM Teams and Ops at Notion, Asana, and Dropbox with Notion’s GM

3. Mastering the Customer Lifecycle: Strategies for Hiring, Retention, and Growth with Retool, OpenAI, and 20VC

4. How to Implement a Customer-First Strategy and Structure with Dashlane’s CPO

5. From 0-50,000 Customers: How to Build a GenAI Company for the Enterprise with Synthesia’s CEO 

Get 20% off LAST CHANCE tickets:

Do you really need quotas in sales?  

To some that have been raised with a quota, the answer may be of course “Yes”.  But to others, quotas seem almost dated, and a bit draconian.

Quota or not — won’t reps just close as much as they can — since they want to make their commissions?

Especially if the comp plan is a good one, won’t it just incent folks to close as much as possible? Who needs an icky “quota”?

I wasn’t sure for a while. In fact, back in the day at EchoSign / Adobe Sign, we had goals but not really traditional “quotas”.  Our goal was just close at least $30k a month, but it wasn’t a quota, and once we had an engine going, almost everyone blew past it.

I asked a seasoned account exec this question a little ways back, and his answer was, “Quotas don’t matter anymore.  I want to make as much as I can.  In fact, I spend every dollar I make.  Quotas won’t change that.”

But time has gone by and I’ve learned the reality is, you need both:

Commissions are the carrot

Quotas are yes, the stick

All carrot — you stop when you’re full. That may or may not be what the org needs out of sales.

YCombinator recently put out its list of its Top 50 YC companies of all time based on revenues.  We’re fortunate that over the years so many of their founders and CEOs have spoken at SaaStr Annual and Europa!  More than half of them, in fact!

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

Join 2,000+ peer SaaS finance leaders, such as Jeff Epstein from Bessemer Venture Partners and The SaaS CFO, for this exclusive virtual event on June 5, 2024.

This full-day summit has three different tracks (CFO, Controller, and RevOps) to help you build the processes and teams within fast growth SaaS, AI, and high-tech companies needed to drive efficient growth.

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There are several key types. Let’s break them into several categories:

• Professional vs. non-professional. Professional angels generally have very specific criteria in terms of valuations, team make-up, check size, etc. You do need to ask and listen to what their sweet-spot is. Non-professional angels often shoot from the hip or fish with a wider net.
• Lead vs follow. This is critical. 90%+ of angels just want to “follow” someone that sets the terms, price — and does the due diligence and hard work. It’s so, so much easier to follow. But you at least need a strong lead to get the ball rolling.
• Valuation sensitive vs. less sensitive. Many traditional angels are very sensitive to price. You can see this on Shark Tank. They want to invest a fixed amount of capital, into a specific number of companies, and own a certain amount of each. But other types of angels may care a bit less about price. This can range from family members, to very rich individuals (price is immaterial to them), to corporates investing for other reasons. Listen and ask.
• Can — and can’t — afford to lose it. Ask — and find out. A professional investor typically won’t put more than 2% of their total investable capital in any one investment, at least not at first in the first check. And they will rarely invest more than 10%-20% of their total net worth in true angel deals. If someone is putting way too much of their life savings into an angel investment, maybe don’t take their money. Way too stressful for everyone. A true angel can lose 100% of any given investment and not care that much. They are hunting for that 1 out of 50 that gives them a 100x+ return. The others don’t need to.
• Net net there are so many different goals and different types of angels. You have to ask.

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