The Metrics Brothers

Ideal Customer Profile (ICP) is a term commonly used across the SaaS industry - but what does it really mean, how can a company effectively build a customer acquisition strategy around it and what METRICS can be used to determine a company's ICP and then measure if it really is the best target customer segment? During this week's episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss the follow...

Net Customer Base Expansion = (Expansion ARR - Churned ARR) which helps SaaS companies to understand how the existing customer base is impacting ARR growth excluding the impact of new logo customer ARR.  Why not just use Net Revenue Retention? CAC and Growth dive deep into this SaaS metric including: Calculation formula for Net Customer Base Expansion (NCBE) How is NCBE different from Ne...

B2B SaaS Pricing models have evolved over the past few years with 67% of SaaS companies now saying they have introduced at least one element of Usage-Based Pricing. Though this benchmark does not tell the whole story of pricing, as the primary pricing model is still based upon a subscription fee per user or a subscription fee per user + a Usage-Based or Value-Based pricing variable. During th...

Common practice is to measure Sales and Marketing expenses as a percentage of revenue, which in the SaaS industry ranges between 20% - 60% based upon stage, growth and efficiency. CAC and Growth discuss an alternative metric which measures the ratio between Sales expenses and Marketing expenses, known as the Sales/Marketing Expense Ratio. During this episode topics discussed include: Sal...

The Sales Velocity metric calculation formula is (win rate x average contract value x # opportunities)/ average sales cycle length. The resultant Sales Velocity metrics highlights the amount of new bookings a Sales team can deliver per day....one key question about Sales Velocity is " is this a metric to help understand sales capacity, sales effectiveness or sales efficiency? Dave "CAC" Kellogg an...

Dave "CAC" Kellogg and Ray "Growth" Rike discuss the latest revenue growth trends and the related metrics driving the growth as highlighted in GONGs 2025 State of Revenue Growth Report. Topics discussed include: 2024 Growth Rates Sales Velocity Trends including Win Rates, Sales Cycle Length and ACV AI Adoption Top Growth Initiatives SaaS Magic Number trends If you are responsible for the GTM and R...

Implied ARR is the SaaS metric used to convert GAAP revenue for public SaaS companies into an equivalent to Annual Recurring Revenue (ARR) used by investors and private SaaS companies. Dave "CAC" Kellogg and Ray "Growth" Rike discuss the what, why and how behind Implied ARR. During this episode CAC and Growth discuss multiple Implied ARR topics including: Implied ARR Calculation Formula Why Invest...

Max Schireson and Jason Mendel, from Battery Ventures recently published an article on Managing and Measuring R&D spend including key metrics from the DORA and SPACE frameworks and they also introduced their own 5 step R&D measurement framework including: Allocate top down Break R&D into granular buckets (not a lump sum) Listen to product-adjacent teams that are customer-facing Be deli...

In this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss the SaaS Quick Ratio, a SaaS metric first introduced in 2015 with the goal to measure ARR growth efficiency by comparing New ARR growth versus existing customer ARR contraction. The SaaS Quick Ratio borrows a concept used in general finance known as the "Quick Ratio" - which measures a company's ability to pay it's current liabiliti...

Marketing budget and productivity benchmarks are hard to find, so when Dave "CAC" Kellogg and Ray "Growth" Rike first saw the ICONIQ Growth Marketing Budget and Productivity Report - they knew it was a great topic for this episode of SaaS Talk with the Metrics Brothers. During today's episode, Dave and Ray discuss several critical Marketing Planning, Budget, and Productivity benchmarks including:...

ServiceTitan, a vertical SaaS company for the trades recently filed their S-1 and went public on December 12, 2024. Dave "CAC" Kellogg and Ray "Growth" Rike discuss many details regarding the S-1 including the basic enterprise value creating performance metrics and some very interesting aspects of the IPO structure. During this episode, Dave and Ray discuss several aspects of the S-1 and...

KeyBanc Capital Markets in partnership with Sapphire Ventures recently published their 2024 SaaS Metrics Benchmark report. During today's episode, Dave "CAC" Kellogg and Ray "Growth" Rike dive into this years highlights including: Growth Rates Net and Gross Revenue Retention Rule of 40 Go-to-Market Organization Ratios Marketing Strategies and Productivity Human Capital Efficiency Valuation Multipl...

The Sales Operations function evolves dramatically as a company scales and Meghan Gill, SVP Sales Ops and Sales Development at MongoDB has lived that reality. Meghan started in Marketing at MongoDB as employee number 8 as the first non engineering hire, and then seven years later took over Sales Operations in preparation for their IPO. CAC and Growth discuss the evolution of Sales Ops with Meghan...

CAC and Growth discuss the recent Scaling SaaS from $1M to $20M ARR ICONIQ Growth report that provides a long term view on the performance metrics benchmarks that SaaS companies exhibit at granular stages of growth including $5M, $10M, $15M and $20M ARR. Benchmarks covered include: Enterprise Five Benchmarks (Median and Top Quartile) Growth Plateau Challenges started at $25M ARR New Logo Growth Op...

The Remaining Performance Obligation (RPO) metric has become a more standard metric that public company Wall Street analysts have started to follow closely to help evaluate the bookings growth of recurring revenue companies. CAC and Growth cover the following topics regarding RPO including: Why was the Remaining Performance Obligation created What does the Remaining Performance Obligation (RPO) me...

Customer Retention is a hallmark of the SaaS recurring revenue business model. But what is the primary metric to measure the cost of retaining each customer, how is the efficiency to renew ARR calculated, and what goes into that metric? Dave "CAC" Kellogg and Ray "Growth" Rike go deep into the components of Customer Retention Costs and the value in measuring including: The benefits of measuring Cu...

New investment announcements in B2B SaaS companies are not quite what they seem!? Over the past few years, public announcements have moved from how much capital was raised to what the valuation of the company was at funding. BEWARE - those valuation headlines are full of nuance and details that are not disclosed!!! Dave "CAC" Kellogg and Ray "Growth" Rike - also known as The Metrics Brothers...

Contracted Annual Recurring Revenue (CARR) and Annual Recurring Revenue (ARR) are commonly used terms in the SaaS and Cloud Industry but are not standardized leading to inconsistent calculation. In fact, they were the first two metrics the SaaS Metrics Standards Board published standards upon. Dave and Ray discuss the current definitions, calculations and how Usage-Based Pricing is impacting...

Free Cash Flow is a key metric for any SaaS investor and thus for SaaS CFOs and CEOs. Moreover Free Cash Flow Margin is a key variable in the Rule of 40 - a key enterprise value creation metric. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the value behind the FCF metric and the different ways to calculate! During this episode Dave and Ray discuss the following elements of Free Cas...

Bessemer Venture Partners recently released their 9th annual Cloud 100 Report. Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the impact of AI companies on the top 100 private cloud companies which increased their aggregate enterprise value to $820B and increased their growth rate to 70%! Key highlights Dave and Ray discuss include: Aggregate enterprise value of the Cloud 100 increas...

Go-to-Market continues to be a trending topic for the majority of B2B SaaS companies being challenged to optimize efficient revenue growth. ICONIQ recently published a report entitled " State of GTM Benchmarks " and Dave "CAC" Kellogg and Ray "Growth" Rike discuss the report's findings and what the benchmarks mean to both operators and investors. Key GTM benchmarks covered during today's...

The SaaS Mendoza line highlights the slope of the long term growth rate that investors expect and operators should target on a path to IPO. Dave "CAC" Kellogg and Ray "Growth" Rike break down the updated expectations. Veteran software VC, Rory O’Driscoll of Scale Venture Partners  proposed  a theory to identify the growth rate below which a company may not be on the VC-to-IPO trajectory....

Go-to-Market trouble shooting is a very common activity in 2024 as B2B SaaS companies continue to face growth and especially efficient revenue growth challenges. In this episode Dave "CAC" Kellogg shares his top-down GTM trouble shooting method which boils down into two primary categories: Pipeline Coverage Pipeline Conversion Dave and Ray dive into the details on the key metrics to evaluate...

OneStream went public on July 24, 2024 and Dave "CAC" Kellogg and Ray "Growth" Rike dedicated this episode to discussing their S-1 and Initial Public Offering (IPO). OneStream, the company offering their Digital Finance Cloud to the Office of Finance has a long history including being self-funded, being acquired by Private Equity (KKR) in 2019 and beginning the transition from a perpetual license...

Burn Multiple is a metric created by David Sacks to measure the capital efficiency of ARR growth in B2B SaaS companies. In this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss alternatives to the Burn Multiple and then dive into the details of the two primary burn multiple components which are Net Burn and Net New ARR. There are multiple metrics that attempt to measure capital efficiency...