Two ways to grow your SaaS business

PhotoSpin Money & Finance 2 ? 2001 PhotoSpin www.photospin.comSaaS is a pretty simple business: You pay to acquire a customer on day one. Over time as you invoice that customer you recover your acquisition cost. From then on, the longer you keep that customer the more profitable they are. As the years go on and you keep more and more customers that you have already paid for, your business as a whole becomes profitable. Simple, right?

Tomasz Tunguz from Redpoint recently asked whether SaaS startups are less profitable these days. According to his data (below), no matter whether you sell to small companies or enterprise, over time the profitability of SaaS companies converges around a similar median.

cash_flow_by_acv

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Why you need a CFO…

I saw this gem from Prakash Ramachandran CFO, Polyera. This is especially true for early stage startups where CFOs have to wear many hats.

If you don’t have one already, this is why you need a CFO:

The many role of a startup CFO:

• Chief Fund Raising Officer
• Chief Accounting Officer
• Chief Operations Officer
• Chief HR Officer
• Chief I.T. Officer
• Chief Risk Officer
• Chief Strategy Officer
• Chief Negotiation Officer

Your 2015 Personal Roadmap

marketing-roadmap-315-300x281

At the end of December, I recorded a short video segment for the Toronto Stock Exchange along with someother “knowledgeable” types. Each of us were asked to take a minute to share the one piece of advice that we have for founders and executives as they prepare for the new year.

It’s hard to limit yourself to just one piece of advice. There’s so much that  matters. As I thought about it, I went back to my own experience and what I am doing personally to grow in 2015 and picked the thing that matters most: developing ourselves.

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Down time

Today’s my last day in the office for 2014. Tomorrow I will work from home,  wrap up my loose ends and make sure I’m ready to hit the ground running in January. Q1 is always a busy time for finance types and we have a lot to accomplish next year.

I’m lucky. FreshBooks closes down between Christmas and New Year. There’s over 170 of us now. But we’re closed from the 24th till Jan 5. That’s a lot of down time and a big investment on our part, but we really believe that our team members need and deserve down time. We always need to be there for our customers, so our World class support team is still on the case, but the rest of us are fortunate enough to have this time to recharge.

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