The Fastest Growing SaaS Companies Have 140%+ Revenue Retention. Yes, Even if They Sell to SMBs.

In SaaS, they all have top-tier net revenue retention. Even, and even especially, if their customers are SMBs (which churn at a higher rate):

• PagerDuty, 139% net revenue retention. 5 Interesting Learnings From PagerDuty. And Congrats on the A+ IPO!! | SaaStr. And from SMBs!

• Slack, 143% net revenue retention. 5 Interesting Learnings From Slack. As It IPOs (er, Direct Lists). | SaaStr. And part SMBs!

• Zoom, 140% net revenue retention. 5 Interesting Learnings From Zoom. As It IPOs. | SaaStr. And mostly SMBs!

• Fastly, 130% net revenue retention. 5 Interesting Learnings from Fastly. As It IPOs. | SaaStr

• Twilio, 155% net revenue retention. What is Negative Churn? How to Achieve a Net Negative Churn Rate

Companies like SurveyMonkey and Xero with lower dollar retention (100%) have done well, and become unicorns … but have grown more slowly: 5 Interesting Learnings from SurveyMonkey. As It Crosses $300m in ARR. | SaaStr and 5 Interesting Learnings from Xero. As It Crosses $650m in ARR. | SaaStr

Also, if you sell to tiny companies, 1 person shops, you can’t do that. Shopify’s net retention overall is only 100%. Most of its customers are still not just SMBs, but tiny. 1 person shops do go under, all the time. 140% may be tough there. But for Shopify Plus, its bigger customers? It’s 140%+ there, near as I can tell.

130%+ net retention in any event is doable for most of us, for all but the smallest SMBs. And that’s the magic in compounding revenue. Get “just” to $10m ARR, with 120%+ net revenue retention, and then boy, it kicks in. It’s just a huge boost in the medium and long term.

And really, if you get to $10m/100%+ growth/120%+ net revenue retention … you just can’t be stopped. You will be a unicorn. It is just a question of when.

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