Tomasz Tunguz Partner, Redpoint Ventures
• I write about SaaS startups at tomtunguz.com • Redpoint works with many as-a-Service companies including Stripe, Twilio, Zuora, Zendesk, Looker, Infer, Tidemark, and Expensify • Former PM at Google; statistics nut

Why CS Is Critical Happy
customers, better product Grow faster Decrease capital needs

Hypothetical SaaS Company $50k in
MRR 50 customers at $1k ARR each $1250 in CAC, Sales Efficiency of 0.8 Growing 15% m/m

How Much to Spend on
CS? Expected Value = Save Rate x Value of Extension = 30% x 12 months x $83/month = $298 or about 30% of ACV

Return on Investment? 2 pp
decrease in churn - Increases revenue by 50% - Decreases S&M spend by 30%