Triple-Double-Double is Good. 10-100-110 is Enough.

Neeraj Agarwal of Battery Ventures a few years back simplified a lot of the journies top SaaS companies go on to TripleTripleDoubleDoubleDouble, T2D3.  That the top SaaS companies triple in the early years, and then double after that to get to $100m+ in ARR.  The best SaaS companies do indeed do this and it’s a great yardstick for VCs to measure potential unicorns and decacorns.  And it’s a great post and paradigm for building a unicorn:

But for founders, it’s a bit too many moving pieces.  Founders just want to know:  What Do I Need to Achieve To “Make It”?  To Build a Unicorn?

I’m going to suggest something simpler:  10-100-110+:

  • Get to $10m ARR, however you can.  However long it takes.  If you can go from $1m to $10m ARR in 1 year like Slack, terrific.  If it takes you years like Mailchimp, so be it.  Both won and win.
  • Grow 100% a year, or just close to it.  Many Unicorns and Decacorns didn’t even grow at this rate after $10m ARR.
  • And have 110%+ net retention.  Then you’ll see it.  Then you can do it.  The math says so.

What matters is your momentum after $10m ARR, and not just the raw momentum (top line growth), but your momentum in retention.

If you can retain 110% of your net revenue at $10m in ARR, growing 80%, you will get there. To $100m+ in ARR.  It’s just a question of when.  120% is even better, much better.

And now we know almost all the top SaaS leaders have 110%+ net revenue retention:

More here:

The Fastest Growing Unicorns Have This In Common

Happy customers that buy more from you beget more happy customers that buy more from you.  It takes a few years for this to kick in.  But once it does, it becomes unstoppable (unless you make them unhappy later).

$10m ARR + 110%-120%+ Net Revenue Retention + 80%-100%+ Year-over-Year growth gets you to $100m ARR.  Almost always.

Yes, if you don’t innovate, your growth will decay.  But usually, if you get that far ($10m+ ARR) with happy customers (110%+ net retention) you’ve found a way to continue to innovate enough.

So skate there.  Make that the goal once you cross $1m ARR.  10-100-110+.  And do whatever you can to make it so.

Of the SaaS Class of ’06, Everyone Great Got to $100,000,000 in ARR Eventually. Everyone.

Published on November 26, 2019

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