Top 10 Learning about Free Trials from Tomasz Tunguz
At Saastr yesterday, I presented thetop 10 learnings from the Redpoint Free Trial Survey that we distributed in October. The data confirmed many rules of thumb but also raised some interesting new questions about the best way to use trials.
When we distributed the survey, we never would have expected the response. About 600 companies submitted data. They span single digit ARR businesses to publicly traded SaaS companies.
As you start to go to market, there are two things to prioritize from early customers that matter more than cash. Feedback and marketing rights.
The feedback matters for obvious reasons. The product is early; customer feedback will help you hew the raw granite of your initial product into shape.
The second may not be so obvious. Every prospect championing a software purchase will be asked by the opponents of the sale and decision-makers: “Who else is using the software?
How much can a customer success manager manage? I’d heard the wisdom of $1-2M in ARR per year and around 80 accounts. But I hadn’t come across any data. Last summer, Gainsight posted the results of their survey on the topic. The truth is most CSMs manage between $2-5M in ARR and somewhere between 10-500 accounts. But it varies by segment.
The charts above display Gainsight’s data. I’ve reformatted them to compare segments side-by-side.
How far along was the typical SaaS Series A in 2018? The median business was at $1.8M in ARR and growing at 250%. The chart below shows a representative sample of SaaS Series As’ ARR and projected ARR growth rate for 2018.
Breaking this down a bit more into quartiles, the ARR quartiles were:
25th 50th 75th 1.4 1.8 3.0 And the ARR growth rate quartiles were: