Investors look at just two numbers – ARR and ARR growth, says Dave Kellogg

SaaS companies are growing faster than ever, spurred by the COVID-19-induced digital adoption globally. Amidst rapid growth, founders often find it hard to track growth correctly. The major bottleneck here is deciding on the right metrics to measure and devising the appropriate framework.

Dave Kellogg, ex CEO Host Analytics, ex-SVP/GM of Salesforce Service Cloud, ex-CEO MarkLogic, ex-CMO SAP Business Objects, led a SaaSBoomi Annual OnAir deep-dive session into two crucial SaaS metrics – customer acquisition cost (CAC) & net dollar rate (NDR). Dave has a unique perspective on SaaS metrics because he has been both CMO and CEO of SaaS companies for close to two decades and sat on boards of 6.

Jayadevan PK, Evangelist, Freshworks for Startups, hosted Dave in this power-packed session, asking all the right questions that plague a SaaS company doing $1 million and up in ARR.

Dave says that any SaaS founder needs to look at only two metrics – ARR and ARR growth – because those are the two numbers investors look at. All other metrics must support measuring these two. Dave calls SaaS companies a leaky bucket of ARR. He says,

If you want me to understand how your company is performing, tell me how high is the water level and how fast is it growing.

Starting with the basic question of whether you should be ARR-focused or MRR-focused, Dave provides awesome insights and actionable steps on important SaaS metrics like CAC, NDR, NPS and more. Watch this video to reinforce your understanding of the SaaS metrics and how you can use them to empower your teams.

About the author

Shweta Mishra

Independent consultant, i Tech creations
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