Key Metrics for Product-led SaaS with Unusual Ventures
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Sandhya Hegde, General Partner @ Unusual Ventures Alisa Parret, Vice President @ Unusual Ventures
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Key Metrics for Product-led SaaS with Unusual Ventures
- 1. Alisa Parrett Vice President Unusual Ventures @Unusual_VC Product-led SaaS Metrics & how they differ from the traditional GTM model Sandhya Hegde General Partner Unusual Ventures @sandhya 1
- 3. Historical fundraising milestones for traditional GTM models 3 Profile: Enterprise software focused on mid-market + large customers, $25k-$150k ACV Round ARR # Customers Seed 0-$100k 0-5 Series A $1-1.5M 30-50 Series B $10-12M 150-300 Year 1 2 4 Series C $20-30M 300-500 6 Size $2-5M $5-20M $20-50M $50-100M
- 4. T2D3 Growth Rate was the standard formula 4 $100 M $50 M $12 M $25 M $4 M $1 M Zero IPO Seed A B C ... Guardrails for efficiency ● Gross Margin ● Magic Number ○ Burn multiple
- 5. The 5 metrics that mattered in traditional GTM SaaS 5 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5
- 6. The 5 metrics that mattered in traditional GTM SaaS 6 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5 Mid market > $30k; Enterprise > $100k; Expansion to $1M+
- 7. The 5 metrics that mattered in traditional GTM SaaS 7 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5 Mid market > $30k; Enterprise > $100k; Expansion to $1M+ Mid market <4 weeks; Enterprise land <6 months; Whales >12 months
- 8. The 5 metrics that mattered in traditional GTM SaaS 8 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5 Mid market > $30k; Enterprise > $100k; Expansion to $1M+ Mid market <4 weeks; Enterprise land <6 months; Whales >12 months Early stage > 100% of capacity; Gold standard at scale ~80% Also proxy for pipeline coverage
- 9. The 5 metrics that mattered in traditional GTM SaaS 9 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5 Mid market > $30k; Enterprise > $100k; Expansion to $1M+ Mid market <4 weeks; Enterprise land <6 months; Whales >12 months Early stage > 100% of capacity; Gold standard at scale ~80% Also proxy for pipeline coverage Gold standard <1% controllable logo churn (because high CAC)
- 10. The 5 metrics that mattered in traditional GTM SaaS 10 ACV Sales Cycle Quota Attainment Logo Churn Win Rate 1 2 3 4 5 Mid market > $30k; Enterprise > $100k; Expansion to $1M+ Mid market <4 weeks; Enterprise land <6 months; Whales >12 months Early stage > 100% of capacity; Gold standard at scale ~80% Also proxy for pipeline coverage Gold standard <1% controllable logo churn (because high CAC) >20% close rate for qualified sales accepted opportunities (SAOs) >75% H2H win rate against competitors in a sales cycle
- 11. What’s missing?
- 12. PLG Companies grow differently and investors are now savvy(?) 12 2015
- 13. Metrics that matter For PLG companies
- 14. Levels of product-led growth 14 product-led $ conversion product-led acquisition product-led expansion
- 15. Levels of product-led growth 15 product-led $ conversion product-led acquisition product-led expansion 1 Ensure paying customers can organically expand usage
- 16. Levels of product-led growth 16 product-led $ conversion product-led acquisition product-led expansion 1 Ensure paying customers can organically expand usage 2 Self-serve adoption of a free/OS tool
- 17. Levels of product-led growth 17 product-led $ conversion product-led acquisition product-led expansion 1 Ensure paying customers can organically expand usage 2 Self-serve adoption of a free/OS tool 3 Self-serve monetization & renewals Level 3 → “Full PLG”
- 18. Questions that inform “full” PLG metrics 18 1 2 3 4 5 How fast should my free user base be growing? What should user engagement and retention look like? How much self-serve conversion from free to paid is good? How many prosumer vs. ICP account teams do I need? What ACV is too low? How do I calculate cohorted NDR and what’s the benchmark?
- 19. Questions that inform “full” PLG metrics 19 User Growth Product Adoption F2P Conversion Product Qualified Accounts Cohorted NDR 1 2 3 4 5 How fast should my free user base be growing? What should user engagement and retention look like? How much self-serve conversion from free to paid is good? How many prosumer vs. ICP account teams do I need? What ACV is too low? How do I calculate cohorted NDR and what’s the benchmark?
- 21. Metric #1 - Organic User Growth Benchmarks (top quartile) 21 ~30% ~10% Early Pre-IPO MoM Growth in free weekly active users 90%+ 4-6% Organic Visitor → Sign-up Key tactics Notes: >2x annually, avoid $ spend on *free* user base
- 22. Metric #1 - Organic User Growth Benchmarks (top quartile) 22 ~30% ~10% Early Pre-IPO MoM Growth in free weekly active users 90%+ 4-6% Organic Visitor → Sign-up Key tactics Notes: Loops not funnels! Design some successful user output that helps acquire more: https://www.reforge.com/blog/growth-loops 1 2 3 4 Content (SEO/CGC/UGC) Social WoM Referrals w/ clear incentives Lifecycle nurture
- 24. Metric #2 - Product Adoption (engagement & retention) Benchmarks (top quartile) 24 Notes: Destination vs. Integration products (earn the right!) ~70% ~90% Prosumer/SMB Enterprise 6-month end-user retention Key tactics ~60% ~80% Higher for admin/power users DAU/WAU ratio WAU/MAU ratio
- 25. Metric #2 - Product Adoption (engagement & retention) Benchmarks (top quartile) 25 Key tactics 1 2 3 Pull vs push distribution Information refresh rate Lifecycle nurture Notes: Meet users where they are; track and “show” their success metric ~70% ~90% Prosumer/SMB Enterprise ~60% ~80% Higher for admin/power users DAU/WAU ratio WAU/MAU ratio
- 26. Free to Paid Conversion Metric #3 26
- 27. Metric #3 - Self Serve Free to Paid Conversion Benchmarks (top quartile) 27 Notes: CC/not debate, trial vs free debate ~5-10% ~20-30% Prosumer/SMB Enterprise Freemium Key tactics ~20% ~30-50% Trial (CC req for pro) Prosumer/SMB Enterprise
- 28. Metric #3 - Self Serve Free to Paid Conversion Benchmarks (top quartile) 28 Key tactics 1 2 3 Aha! Onboarding is king Paywall design (see: reverse trial) Targeted user incentives (credits) Notes: Invest in infrastructure for contextual cues (Dopt) and flexible pricing strategies: (Stigg) ~5-10% ~20-30% Prosumer/SMB Enterprise Freemium ~20% ~30-50% Trial Prosumer/SMB Enterprise
- 30. Metric #4 - Product Qualified Accounts Benchmarks (top quartile) 30 Notes: PQAs => ICP + Product Signal + User Trend ~50% ~5-10% SMB (self-serve) Mid/Enterprise % of total active accounts Key tactics $6-25k $50K++ Annual Contract Value SMB (self-serve) Mid/Enterprise
- 31. Metric #4 - Product Qualified Accounts Benchmarks (top quartile) 31 Key tactics 1 2 3 Use PQA based workflow & CRM Spend $$ on acq/nurturing (ABM - Targeted Ads, LPs, Events etc) Layer timely outreach w/ cases Notes: Endgame ~50% ~5-10% SMB (self-serve) Mid/Enterprise $ of active accounts $6-25k $50k++ SMB (self-serve) Mid/Enterprise $ of active accounts 4 Tease enterprise features
- 33. Metric #5 - Cohorted NDR Benchmarks (top quartile) 33 Notes: Hubspot case ~80% ~200-300% + SMB (self-serve) Mid/Enterprise EARLY Key tactics ~100% 120-140% + LATE SMB (self-serve) Mid/Enterprise % Retained Mo13 /Qtr5/Yr2 (based on contract structure)
- 34. Metric #5 - Cohorted NDR Benchmarks (top quartile) 34 ~80% ~200-300% + SMB (self-serve) Mid/Enterprise EARLY Key tactics ~100% 120-140% + LATE SMB (self-serve) Mid/Enterprise % Retained Mo13 /Qtr5/Yr2 (based on contract structure) 1 2 3 Internal invite/referral flow Usage-based pricing Free, sticky integrations → INFRA 4 >> use cases/value over time Notes: Roles/access
- 35. Best-in-class benchmarks for “full” PLG metrics 35 User Growth Product Adoption F2P Conversion Product Qualified Accounts Cohorted NDR 1 2 3 4 5 Ranging from 30% to 10% MoM based on stage 70-90% 6-month user retention based on user segment 5-50% based on segment and package design 5-50% of total accounts based on account segment and ACV 80-140% based on stage, segment, and cycle
- 36. It’s all about CAC/LTV
- 37. • Measuring SaaS Engagement - David Sacks • Product North Star Metrics - Sandhya Hegde • Trial or Freemium? Get the Best of Both with a Reverse Trial - Elena Verna • The Hidden Freemium Advantage - Elena Verna • What is Good Retention? - Casey Winters & Lenny Rachitsky • How to Measure Cohort Retention - Olga Berezovsky & Lenny Rachitsky • Your Guide to PLG Benchmarks - Kyle Poyar • PLG Playbook for B2B Startups - Mark Roberge • Unusual Insights for Founders Building a Self-Service Motion - John Vrionis • Growth Loops are the New Funnels - Brian Balfour Recommended Reading 37
Notas do Editor
- Users, adoption, inbound pipeline, etc