If your Co-Sell services partner hasn't been certified by PartnernomicsĪre you willing to bet your job on your current Co-Sell strategy? We've been building up other services companies alongside usĪnd they're all getting Co-Sell Certified by PARTNERNOMICS® So not only is Forecastable now squarely in "Co-Selling Services" #notmyfirstrodeoĪnd frankly, had ZERO interest in building another one (costly to scale).īut it can't be done alone because of the sheer volume of demand I've built and sold two services companies in my life. bunch of random, meaningless, inaccurate frameworks - "Guesswork"Ĭo-Selling requires clockwork not guesswork. Since when do tech vendors define things? Inwardly focused. It's because our industry is sorely lacking professional services partnersĭelivering vendor-agnostic best practices. Most definitions are flat-out WRONG though. □ It's like every tech vendor woke up and found a new buzzword□ Noticing all the buzz around "co-selling" all of a sudden Without intervention, it's going to burn brands AND careers, big time! □ The entire partnerships industry is being misled I’m looking to acquire a few more HR SaaS companies, so if you're interested in learning more- shoot me a message. I can usually pick up on this metric by reading reviews.Ĭompanies will pay a lot of money for it and they won't switch because it's just part of their routine - it works, they like it, and it’s familiar. Even if it's just on a monthly, quarterly, or annual cadence. The more a product/service gets built into the routine of a company, the better. There’s a competitor to ours where the switching costs are super low, but people love it so much that it just essentially becomes mission-critical because it's something that the employees look forward to using. This is a good sign because it means that those people will be recommending your product to other people. People need to truly love your product to be compelled to leave an authentic positive review. Seeing a strong base of authentic reviews is a green light. This is the easiest KPI to track by far - especially if you see companies that have a positive churn. Here are a few 'unique' KPIs I look at when analyzing SaaS deals: #growthequity #venturecapital #privateequity #investmentbanking #vc #buyside #investing #interviewskills #finance #networking #interviews #recruiter #headhunterĪfter both working in private equity and running my acquisition. It means that the company is close to achieving a 1-to-1 ratio of dollars spent to dollars earned in a year. How well does the company translate dollars spent on marketing into new revenue dollars? □ Basically, the SaaS magic number addresses the fundamental question: “How effectively did the marketing expenses convert prospects into customers?” Typically, this calculation is performed every quarter, which aligns with the quarterly reporting of sales and marketing expenses in accounting. It's defined as the ratio between the new recurring revenue and the marketing costs incurred during the last reporting period. The SaaS Magic Number is a key metric that provides insights into sales efficiency. (Sorry to disappoint if you were expecting something else □)īut hey, this is a valuable concept for future investors to learn! Yes, you read that right – I’m going to teach you some “magic”. #growthequity #venturecapital #privateequity #investmentbanking #vc #buyside #investing #interviewskills #finance #networking #interviews #recruiter #headhunter □ Join my FREE newsletter and get these lessons, tips, and frameworks directly to your email inbox. This is independent of when you receive cash from the customer! In summary, just need to remember you recognize revenue as the service is provided – whether it is recurring or one-off. We’d recognize onboarding fees in full in January and overage fees in July. We discuss refunding the balance or applying it to future service. Let’s also imagine the client downgrades in October to a $250 monthly plan, so going forward we will only recognize $250 per month instead of $500 in revenue. Let’s add some extra factors to the equationĪlongside the $6,000 subscription, there's a $250 onboarding fee and $75 overage fees paid in July. If a client cancels mid-year, we avoid writing off a loss because we haven't recognized all the upfront payment. This method safeguards both the company and the customer. Going forward, each month, we recognize revenue for the service provided, reducing the Unearned Revenue: Suppose a new client starts in January with a $6,000 yearly subscription, and per your contract with them, they pay you all upfront.Įven though we have the cash already, we don't recognize it as revenue yet. One of the most basic questions is: “How do SaaS companies recognize revenue?” Let’s walk through an example – with actual numbers □ If you’re interviewing for a firm that invests in SaaS,
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