We have been fortunate sufficient to do a deep dive with the co-founders of Monday.com, Eran Ziman and Roy Man. It was nice and can be launched quickly on their podcast and ours.
However forward of that, I wished to put in writing up my high learnings whereas they have been high of thoughts:
#1. Monday Has High Tier NRR right now, however getting there wasn’t straightforward. It took going multi-product.
A terrific level and one the HubSpot co-founders additionally made at SaaStr Annual. If you wish to get to 100%+ NRR with SMBs, you actually do must go multi-product. It took Monday a very long time to cross 100% NRR from SMBs, and so they should have a number of choices to get there.
#2. Very centered on ROI from advertising spend, however put aside 10%-15% for experimentation.
Monday has been very rigorous about its market spend since Day 1. The rule was spend to an 8 month CAC, however not a day longer. Being very cautious right here is particularly vital with SMB SaaS, the place the ACVs are decrease. Monday’s ACV was solely $2k.
#3. Was very laborious to get VCs to know how they’d earn a living from $2k ACV, took very cautious cohort analyses.
Monday’s traders struggled to know the unit economics for small ACV offers till they iterated how they introduced cohort analyses extra clearly. Most essential was segmenting the analyses to separate out the very latest prospects, who have been obscuring how properly older prospects have been performing.
#4. Even Monday remains to be early in Buyer Advertising. We’re all a bit behind right here!
#5. GRR is as essential as NRR, however what’s most essential there’s that it doesn’t go down. GRR will range by phase and class.
NRR is the NorthStar metric in SaaS, however all of us agreed it may be gamed, to some extent. Worth raises can improve NRR, with out including worth. Lengthy-term contracts can increase NRR, with out including long run worth.
#6. Most essential metric to them is the % of paid base actively utilizing the product.
A B2B model of MAU/WAU/DAU. They care most about ensuring the overwhelming majority of their paid seats are energetic. Too many don’t observe this, and have too many “junk” and unused seats and capability. They see this finally monitoring to the very best renewals and upsells.
#7. In the end, at scale, every little thing is NRR. Sooner or later, you seize so many shoppers, it’s all about promoting them extra merchandise they love.
At Monday’s scale, approaching $1B, you begin to have everybody in our database. Sure, new prospects and logos are key, however discovering methods so as to add extra worth and promote to the bottom grow to be what actually issues. Put in a different way, Eran’s level is that there’s a good cause NRR/NDR is the #1 metric public traders search for. It’s the one that actually issues at scale.
Eran Will Be at 2023 SaaStr Annual Sep 6-8 in SF Bay Space!!
