So ever since I started in SaaS, I’ve been trying to answer a basic question: how quickly do the best take off and get to $10m ARR?
It took us about 5.5 years back in the day, but SaaS was much smaller then. And I worried when I compared us to Dropbox, Yammer, Box and others that were our peers that got there faster.
Then I started investing and I came up with a basic ruie that the best startups needed to grow at least 8% a month once they crossed $1m ARR. I realized many got there in all different amounts of times. But once you hit $1m ARR, you sort of needed to grow at that rate to break-out. Roll that over a few more stages and you get to “Triple Triple Double Double”, i.e. that the best SaaS companies triple at $1m ARR, triple the next year, and at least double each year after that. That puts you on a path to $100m+ ARR in 7-8 years or so.
Now ChartMogul has summarized all this in one very useful chart in their latest report summarizing the data from their 1000s of SaaS customers:
- The best go from first revenue to $10m ARR in 2 years and 9 months. Let’s call it Just Under 3 Years.
- The Top Quartile takes just under 4 years to get to $10m ARR.
- And the Median is 5 years.
- But … but … this only summarizes a subset of all SaaS startups they track — the ones that actually get there. Because only 13% of all startups they track get to $10m ARR at all after 10 years.
Now I know successes that have taken longer, and ChartMogul’s data also shows a surprising number of folks stall out after $10m ARR. So the data in this chart isn’t everything.
But if you are really going for it, and hit $1m ARR and want to know how hard to push — well, the data above is super helpful to benchmark yourself against.
The full report here:
