Persistence and predictability of SaaS growth
A few years ago, Rory O’Driscoll of Scale Venture Partners, an early investor in Box, DocuSign, ExactTarget, and many other large enterprise SaaS companies, published a fascinating article titled ”Understanding the Mendoza Line for SaaS growth”. The key message of the article is that “… most of the time, growth rates only decline, but do so in a way that is on average fairly predictable.” Looking at the data from 21 SaaS companies, Rory estimated that the growth rate for any given year is between 80% and 85% of the growth rate in the prior year. He referred to this as growth persistence. To read the full article, click here.