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🚀 SaaS Roundup #122

This week: Is your churn problem actually an onboarding problem, a comprehensive Domo S-1 breakdown and how startups die from their addiction to paid marketing.

In SaaS Roundup, we comb through the noise to find you only the best SaaS-flavored reads of the week — just our top three.

You can also receive SaaS Roundup in your email inbox every Friday — just drop your email here and you’ll receive the next issue.


This week’s top reads

Is your churn problem actually an onboarding problem?

Claudiu Murariu, InnerTrends

“If your onboarding process is well-defined and explicit, and you deliver on the promise you make to the clients with respect to the product, you will notice that the number of users who come back to your product without finishing the onboarding is around zero in the first few weeks after creating an account.”

In this post, Claudiu makes a very strong case for not just addressing the symptoms of your business’s customer success problems. Churn is always trailing indicator of larger issues further up in the customer lifecycle and onboarding is usually one of the largest contributors to this.


Domo IPO | S-1 Breakdown

Alex Clayton, Spark Capital

“Domo operates in the large and growing market of business intelligence software, and as more enterprises realize the need to be data-driven, the demand for their product will only grow. With that said, the company has unprecedented losses, slowing growth, and below-average unit economics for a SaaS IPO.”

Everyone loves a good old fashioned metrics-filled S-1 breakdown, right? The story with Domo is a fascinating one. With a $40M quarterly sales and marketing spend and a CAC per net new customer of a whopping $430K, the road ahead is sure to be bumpy with many fundamental issues with unit economics.


How startups die from their addiction to paid marketing

Andrew Chen, Andreessen Horowitz

“Scale effects mostly work against you in paid marketing. The longer your campaigns run, the less effective they become – people start seeing your ads too often. The messaging becomes stale, and novelty effects are real. Market performance has a reversion to the mean.”

It’s easy to paint a positive picture of growth when you’re funneling significant budget into paid acquisition. Andrew illustrates this in a very clear way, with multiple examples.


That’s all for this week! Don’t forget you can still receive upcoming issues of SaaS Roundup in your email inbox. See you next Friday.