SaaS/subscription businesses are more complex and challenging than traditional businesses. If you own or work at a SaaS company, you need to pay special attention to your SaaS unit economics if you want to achieve a competitive advantage and increase your business’s profitability.
Since SaaS revenue comes over an extended period (the customer lifetime) and because customer retention is super important, there’s so much focus on metrics related to retention and churn. But what really drives (or negatively impacts) the valuation of a SaaS company? Is it only growth?
Check out the presentation slides of ZenHR’s Co-founder and CEO, Yousef Shamoun, titled “The Top 5 SaaS Unit Economics to Watch Out For”, which he presented at Step Saudi 2022: