There are a couple of reasons for calculating SaaS metrics, and metrics in general. One is that you want to share them with external people, like investors. The other is that you want to make some strategic business decisions based on those metrics.
Either way you will want to make sure that your calculations are correct. Otherwise you jeopardize the whole effort. I’ve seen quite a few ways of calculating SaaS metrics, and here’s a list of most common reasons for them being incorrect.
From time to time one of your customers will delay a payment. Maybe it’s an expired credit card or a person responsible for making a wire transfer is on vacation. One way or the other such delay in payment affects your metrics. Let’s look into one example of such delay, or past-due payment, and see what possible solutions we could apply to minimize impact on your metrics.
In order to understand how to interpret cohort analysis, you have to realize that the time on the cohort table is passing in two directions. From left to right – as each cohort progresses with its life. From top to the bottom – with each new cohort being added at the bottom.
At the start of each new product are just a couple of people having an idea and trying to figure out how to make it a reality. You probably speak with potential customers researching your thesis and start building the product.
Small team means everyone stays in sync. Then you start having your first customers, perhaps you raised money and your team grows. It becomes harder and harder to keep everyone focused and up to date on what is happening inside the company.
I worked for 8 years at a successful startup called Base CRM. It was acquired by Zendesk 2 years ago. During this time I saw the company take different approaches to many problems startups have, but one remained unchanged: unparalleled, obsessive focus on shipping new functionality. Lately, I’ve been thinking a bit more about a company as a whole because I co-started a gig called Probe, so here’s some things I think should have been different at Base.
After spending 5 years at Base CRM and its acquisition by Zendesk I’ve co-founded Probe – a product in the business analytics space. We defined MVP scope and began a journey to release. At the beginning of the year, we decided to launch on ProductHunt. We had high hopes for this launch and here is a story about how everything went wrong.