[HN Gopher] SaaS Financial Model ___________________________________________________________________ SaaS Financial Model Author : gk1 Score : 138 points Date : 2020-09-25 11:59 UTC (11 hours ago) (HTM) web link (baremetrics.com) (TXT) w3m dump (baremetrics.com) | JaakkoP wrote: | Author of the model here. First time on the front page with my | content - thanks for sharing! | | This is the same model I used to service several dozens of SaaS | companies a month when we didn't have any software to help us. | | The idea was that I need to have one core template that I can use | to quickly onboard companies around $1m in revenue, while keeping | it modular enough to add more complex forecasts or metrics for | companies in the $5-20m range. (Not all of those more complex | pieces are in this template though). | | I'd appreciate any feedback on the model! There's definitely a | lot of legacy stuff I would do differently if I were to start | over. | | I'm planning to update it this fall to make it simpler to get | started, while keeping the structure robust enough to keep adding | forecasts & reports over time. Maybe a video how-to would make | the learning curve a little less steep as well. | crizzlenizzle wrote: | The example in your blog post. Are those numbers close to | reality? I'm just blown away by the CAC in the SaaS world. | molsongolden wrote: | Jaakko mentions not being a fan of benchmarking against the | average startup but, for a gut check, the recent KBCM SaaS | Survey[1] puts the median blended CAC payback period (>$5MM | ARR) @ 18mo using 2019 data, ~21mo using 2020 YTD. | | [1] direct PDF link - https://www.key.com/kco/images/2020_KBC | M_SaaS_Survey_8102020... | JaakkoP wrote: | It's all dummy data which makes the metrics sometimes look a | little wacky, but I tried to model everything based on real- | world examples I've seen. | | The Customer Acquisition Cost (CAC) is high, but so is the | ARPC (Average Revenue per Customer), so you can't just look | at the one number in isolation to see if it's realistic or | not. | | In this case, I'd look at the CAC Payback time and the | CAC:LTV ratio to see if these acquisition costs would be | realistic in any kind of a company. The payback time climbs | from 6-8 months to 19 over time, which is a pretty clear | indication that this is unlikely to be a bootstrapped | company. They just wouldn't have the capital to sustain it | long-term, unless they sell mostly multi-year deals paid in | advance. | | For a VC Company, 19 months would be on the high end for | sure, but not unheard of. Dated, but still great article from | Tom Tunguz[1] says the SaaS median is 15 months, indicating | there are a lot of companies with longer payback times. | | Finally, if you look into the future projections you'll | notice that the payback time grows to 26 months. Unless you | have clear understanding why this should happen, this is more | likely an indication that your forecast isn't very good. | (Which, I'm realizing typing this, is quite ironic). Either | your revenue growth is not fast enough in your forecast, or | if it is the maximum you think you can do, your S&M spending | is too high and your business just isn't sustainable. Or | something else. | | [1] https://tomtunguz.com/payback_period_cash/ | elixirelixir wrote: | From the link above, how did they calculate the 7.8M CAC | with a 12 month payback period? I assume it is based on the | data below, but how did the number end up to 7.8M: | | "Let's take a hypothetical example of a SaaS company at | $625k in ARR, growing at 15% per month. The company has 25 | customers each paying $25,000 and operates with an 80% | gross margin. The company bills monthly." | gk1 wrote: | Jaakko also founded the SaaS financial planning software | Flightpath, mentioned in the post: | https://www.flightpathfinance.com/ | wmab wrote: | Thanks for sharing! This is the first time I've seen this model | and looks to accomplish a lot, so will definitely have a play | around with it! | JaakkoP wrote: | Great to hear! Feel free to shoot me any questions here or on | Twitter. @JaakkoPiipponen ___________________________________________________________________ (page generated 2020-09-25 23:00 UTC)