Vendr

How does your company get on base? @VendrHQ dropped a bombshell report on Q2 SaaS buying patterns. The chart that caught my eye analyzed average Annualized Contract Value x Transaction Count across the SaaS universe. Most SaaS companies pick a lane, or decide what game they're playing, to increase either deal size or deal speed. They’re deciding if they want to optimize for home runs or base hits. Typically speaking, high velocity sales motions have lower ACVs but faster sales cycles, and correspondingly low CAC Payback Periods. And enterprise field sales motions require long lead times with heavy investments in expensive sales reps (sluggers). This plays out in delayed CAC Payback Periods, but higher net dollar retention rates, as big customers stick around longer and expand, making up for smaller, churning SMB accounts. Each strategy has its merits. But you’d totally take the best of both worlds if you could. I split Vendr’s graphic into 4 quadrants, remixing it with MLB namesakes: *Mario Mendoza*: A light-hitting shortstop in the late 1970’s who failed to achieve a batting average above .200 five times in his nine big league seasons. The “Mendoza Line” was named after him, representing the absolute bare minimum you need to stick around in the big leagues, or theoretically any endeavor. *Pete Rose*: The all-time leader in singles with 3,215 over his career. This guy got on base like an absolute banshee. He was a high velocity hitter who made first base his second home. *Barry Bonds*: Hit a record 762 home runs in his career. That’s a lot of ding dongs. He was a power hitter, through and through. *Babe Ruth*: Still has the best slugging percentage in MLB history at .6897%. Slugging percentage represents the total number of bases a player records per at-bat. In other words, he was the best mix of singles and homeruns. Some observations: -The Mario Mendoza Quadrant: What you don’t want to be is a low volume, singles hitter. This will get you sent back down to the Pawtucket Red Sox. -The Pete Rose Quadrant: Docusign, 1Password, and Carta get on base at a remarkable clip. They are grinding out base hits at a high velocity, becoming ubiquitous apps for all SaaS companies. Although their deal sizes are smaller, they're table stake apps. -The Barry Bonds Quadrant: DataDog, Zendesk, and Looker are smashing shots over the fence. -The Babe Ruth Quadrant: This is the golden quadrant. Salesforce is closing DataDog sized deals at a Docusign velocity (nuts!) ***So how do I become Babe Ruth?*** You need one or more of the following: -Quasi monopolistic powers for your product offering (Salesforce’s CRM) -Competitive moats (ZoomInfo’s deep data moat) -Critical infrastructure characteristics (Netsuite’s financial backbone) -Powerful Network effects (Each LinkedIn user makes the network incrementally more valuable) When I look at Vendr’s latest report, I see competitive moats. Use your moat to get on base this quarter. Best of luck. Mostlymetrics.com