Added by NikkiElizDemere 8 years ago in
SaaS founders are an awesome bunch. We're "Get Stuff Done" people used to hacking our way to success all on our own. Yet, because of this proactive default we can have massive blindspots. We all saw this recently with Zirtual's collapse due to the fact that they didn't know their financial metrics precisely, resulting in too much burn and not enough revenue to cover costs, let alone grow. As Founder and CEO Kate Donovan put it, "[our] numbers were just completely f***ed." We all may laugh or gossip about Zirtual's demise, but how confident are you in your own financial SaaS metric calculations? How about when I tell you that we found 2 out of 5 SaaS companies with greater than $10M ARR were incorrectly calculating something as seemingly simple as MRR? To avoid burying the lead too much - your SaaS financial metrics require the precision of a specialist. The math gets too complicated, and the stakes for getting them right are too high. Let's explore this concept by illuminating how complicated your calculations can become, discuss the disastrous implications of getting these numbers wrong, before revealing how much time this truly takes to do right.
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