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🚀 SaaS Roundup: The Freemium Model, Getting the First 10 Customers and Measuring PMF
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Freemium is gaining popularity as an effective growth strategy for B2B SaaS companies.
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<span style="font-family:open sans,helvetica neue,helvetica,arial,sans-serif">
<strong>
SaaS Roundup
</strong>
<strong>
#339
</strong>
</span>
</h1>
<br/>
<br/>
Hi there,
<br/>
<br/>
<font color="#000000">
Welcome to another fiery edition of SaaS Roundup 🔥
<br/>
<br/>
This week, we share our top reads on freemium, measuring product-market fit, benchmarking, and how to acquire your first 10 customers.
</font>
<br/>
<br/>
Happy reading,
<br/>
<strong>
Sid @ ChartMogul
</strong>
<br/>
<br/>
P.S. We were at SaaStock this week. See our lovely
<a style="mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;color: #007C89;font-weight: normal;text-decoration: underline;" target="_blank">
photos here
</a>
.
<br/>
P.P.S. I gave a presentation on the subscription business model.
<a style="mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;color: #007C89;font-weight: normal;text-decoration: underline;" target="_blank">
Give it a read
</a>
.
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Forward
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</span>
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<br/>
<span style="font-size:13px">
<span style="font-family:open sans,helvetica neue,helvetica,arial,sans-serif">
<font color="#999999">
Karishma Rajaratnam
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<div style="text-align: left;">
<br/>
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The last decade has seen the explosion of Freemium as a growth strategy in B2B SaaS, and companies like Canva, Notion, and Slack have contributed to the rise of this new normal.
<br/>
<br/>
While some SaaS experts question the Freemium model, fast forward to the 2020s, and buyers now expect to have access to a free, ungated version of a product, or at the very least, access to a free trial.
</font>
<br/>
</div>
<blockquote style="border: 0px;padding: 20px;margin: 0px;background: #EBEAEC;font-style: italic;color: black;text-size-adjust: 100%;text-align: left;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;">
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"Even if freemium is only 20% of your revenue, if it represents 2,000 customers that are happy, spreading the word, tweeting, telling their friends … this is powerful. All the best software companies are built on word-of-mouth. The more happy customers you have, the faster that positive word-of-mouth spreads."
</span>
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<td class="mcnTextContent" style="padding-top: 0;padding-right: 18px;padding-bottom: 9px;padding-left: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;" valign="top">
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How Today’s Fastest Growing B2B Businesses Found Their First Ten Customers
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<br/>
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<font face="open sans, helvetica neue, helvetica, arial, sans-serif">
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How did companies like Shopify, Stripe, Airtable, Plaid, Gusto, Salesforce, Slack, and many more acquire their first 10 customers? In this post, Lenny shares a number of stories from their early days.
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<td style="padding-top: 9px;padding-left: 18px;padding-bottom: 9px;padding-right: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;">
<table border="0" cellspacing="0" class="mcnTextContentContainer" style="min-width: 100% !important;background-color: #EBEAEC;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
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<td class="mcnTextContent" style='padding: 18px;color: #202020;font-family: "Open Sans", "Helvetica Neue", Helvetica, Arial, sans-serif;font-size: 13px;font-style: italic;font-weight: normal;text-align: left;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;line-height: 150%;' valign="top">
"Only three sourcing strategies account for every B2B company’s very early growth. Almost every B2B business hits up both their personal network and heads to the places their potential customers were spending time. It’s a huge advantage to have a strong personal network in B2B.”
</td>
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</td>
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</tbody>
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<tbody>
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<td align="center" class="mcnButtonContent" style='font-family: "Open Sans", "Helvetica Neue", Helvetica, Arial, sans-serif;font-size: 14px;padding: 10px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;' valign="middle">
<a class="mcnButton" style="font-weight: normal;letter-spacing: normal;line-height: 100%;text-align: center;text-decoration: none;color: #000000;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;display: block;" target="_blank" title="Management">
Management
</a>
</td>
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</td>
</tr>
</tbody>
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<table border="0" cellpadding="0" cellspacing="0" class="mcnTextBlock" style="min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody class="mcnTextBlockOuter">
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<tr>
<![endif]-->
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<![endif]-->
<table align="left" border="0" cellpadding="0" cellspacing="0" class="mcnTextContentContainer" style="max-width: 100%;min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td class="mcnTextContent" style="padding-top: 0;padding-right: 18px;padding-bottom: 9px;padding-left: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;" valign="top">
<h4 class="null" style="display: block;margin: 0;padding: 0;color: #202020;font-family: Helvetica;font-size: 18px;font-style: normal;font-weight: bold;line-height: 125%;letter-spacing: normal;text-align: left;">
<a style="color: #1c79ed;font-family: open sans,helvetica neue,helvetica,arial,sans-serif;font-weight: 400;text-decoration: none;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" target="_blank">
The Goldilocks Zone of SaaS Metrics
</a>
</h4>
<p style="padding-bottom: 5px;margin: 10px 0;padding: 0;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;">
<span style="font-size:13px">
<span style="font-family:open sans,helvetica neue,helvetica,arial,sans-serif">
<font color="#999999">
Christoph Janz, Point Nine
</font>
</span>
</span>
<br/>
<br/>
<font face="open sans, helvetica neue, helvetica, arial, sans-serif">
<span style="font-size:14px">
Founders often want to know how their business is performing relative to their peers. This makes sense. But comparing a single metric in isolation can sometimes be misleading. Here's why.
</span>
</font>
</p>
</td>
</tr>
</tbody>
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</td>
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<td align="center" valign="top" ">
<![endif]-->
<table align="left" border="0" cellpadding="0" cellspacing="0" class="mcnBoxedTextContentContainer" style="min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td style="padding-top: 9px;padding-left: 18px;padding-bottom: 9px;padding-right: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;">
<table border="0" cellspacing="0" class="mcnTextContentContainer" style="min-width: 100% !important;background-color: #EBEAEC;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td class="mcnTextContent" style='padding: 18px;color: #202020;font-family: "Open Sans", "Helvetica Neue", Helvetica, Arial, sans-serif;font-size: 13px;font-style: italic;font-weight: normal;text-align: left;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;line-height: 150%;' valign="top">
"A lower trial-to-paid conversion rate is ok if you’re attracting huge numbers of trials at a low cost. A higher churn rate is ok if you have a product with a built-in viral loop. A longer CAC payback time is ok if you have strong negative churn. High CACs for paid acquisition may be ok if your blended CACs are much lower."
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<tbody class="mcnDividerBlockOuter">
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<tbody>
<tr>
<td align="center" class="mcnButtonContent" style='font-family: "Open Sans", "Helvetica Neue", Helvetica, Arial, sans-serif;font-size: 14px;padding: 10px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;' valign="middle">
<a class="mcnButton" style="font-weight: normal;letter-spacing: normal;line-height: 100%;text-align: center;text-decoration: none;color: #000000;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;display: block;" target="_blank" title="Product">
Product
</a>
</td>
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</tbody>
</table>
</td>
</tr>
</tbody>
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<table border="0" cellpadding="0" cellspacing="0" class="mcnTextBlock" style="min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody class="mcnTextBlockOuter">
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<td class="mcnTextBlockInner" style="padding-top: 9px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" valign="top">
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<tr>
<![endif]-->
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<td valign="top" width="600" style="width:600px;">
<![endif]-->
<table align="left" border="0" cellpadding="0" cellspacing="0" class="mcnTextContentContainer" style="max-width: 100%;min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td class="mcnTextContent" style="padding-top: 0;padding-right: 18px;padding-bottom: 9px;padding-left: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;" valign="top">
<h4 class="null" style="display: block;margin: 0;padding: 0;color: #202020;font-family: Helvetica;font-size: 18px;font-style: normal;font-weight: bold;line-height: 125%;letter-spacing: normal;text-align: left;">
<a style="color: #1c79ed;font-family: open sans,helvetica neue,helvetica,arial,sans-serif;font-weight: 400;text-decoration: none;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" target="_blank">
How Superhuman Built an Engine to Find Product Market Fit
</a>
</h4>
<p style="padding-bottom: 5px;margin: 10px 0;padding: 0;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;">
<span style="font-family:open sans,helvetica neue,helvetica,arial,sans-serif; font-size:13px">
<font color="#999999">
Rahul Vohra
</font>
</span>
<br/>
<br/>
<font face="open sans, helvetica neue, helvetica, arial, sans-serif">
<span style="font-size:14px">
We’ve all heard that product/market fit drives startup success. But can you measure it? Yes, not only can you measure it but you can also systematically track your progress to achieving product/market fit using this simple technique.
</span>
</font>
</p>
</td>
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<![endif]-->
<table align="left" border="0" cellpadding="0" cellspacing="0" class="mcnBoxedTextContentContainer" style="min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td style="padding-top: 9px;padding-left: 18px;padding-bottom: 9px;padding-right: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;">
<table border="0" cellspacing="0" class="mcnTextContentContainer" style="min-width: 100% !important;background-color: #EBEAEC;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
<tr>
<td class="mcnTextContent" style='padding: 18px;color: #202020;font-family: "Open Sans", "Helvetica Neue", Helvetica, Arial, sans-serif;font-size: 13px;font-style: italic;font-weight: normal;text-align: left;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;line-height: 150%;' valign="top">
"Just ask users 'how would you feel if you could no longer use the product?' and measure the percent who answer 'very disappointed'. Companies that struggled to find growth almost always had less than 40% of users respond 'very disappointed', whereas companies with strong traction almost always exceeded that threshold.”
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<table border="0" cellpadding="0" cellspacing="0" class="mcnDividerContent" style="min-width: 100%;border-collapse: collapse;mso-table-lspace: 0pt;mso-table-rspace: 0pt;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;" width="100%">
<tbody>
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<td style="mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;">
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</td>
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<tbody>
<tr>
<td class="mcnTextContent" style="padding-top: 0;padding-right: 18px;padding-bottom: 9px;padding-left: 18px;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;word-break: break-word;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;" valign="top">
<div style="padding-top: 20px; padding-bottom: 20px; font-family:open sans,helvetica neue,helvetica,arial,sans-serif;">
<h1 class="null" style="font-weight: 400;text-align: center;display: block;margin: 0;padding: 0;color: #202020;font-family: Helvetica;font-size: 26px;font-style: normal;line-height: 125%;letter-spacing: normal;">
<strong>
<span style="font-family:open sans,helvetica neue,helvetica,arial,sans-serif; font-size:26px">
Chart of the week.
</span>
</strong>
</h1>
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<![endif]-->
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<![endif]-->
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<![endif]-->
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<tbody>
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<p style="margin: 10px 0;padding: 0;mso-line-height-rule: exactly;-ms-text-size-adjust: 100%;-webkit-text-size-adjust: 100%;color: #202020;font-family: Helvetica;font-size: 16px;line-height: 150%;text-align: left;">
<font face="open sans, helvetica neue, helvetica, arial, sans-serif">
<span style="font-size:14px">
<strong>
Which are the most expensive publicly listed SaaS companies?
</strong>
You probably guessed it right, it's Snowflake, ZoomInfo & Atlassian — all trading at 14-18x EV/NTM Revenue multiples.
</span>
</font>
</p>
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2 years, 10 months ago - roundup@chartmogul.com
🚀 SaaS Roundup: The Freemium Model, Getting the First 10 Customers and Measuring PMF
Freemium is gaining popularity as an effective growth strategy for B2B SaaS companies. View this ...