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🚀 SaaS Roundup #123

This week: How to calculate SaaS gross margin, commonly misunderstood SaaS metrics and how to build a SaaS marketing system.

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

How to Correctly Calculate your SaaS Gross Margin

Ben Murray, The SaaS CFO

“To be comparable with other companies, you might want to calculate your recurring gross margin with and without R&D amortization. Some companies capitalize their software development and some do not and it can have a large impact on your margin.”

Ben’s writing on SaaS finance and revenue metrics is incredibly useful for founders or finance professionals finding their way in the SaaS universe. Gross margin is used in some common SaaS metrics like customer lifetime value (LTV), so it’s important to make sure you’re calculating it correctly. Read the full post


Dave Kellogg, CEO @ Host Analytics On The Most Commonly Misunderstood SaaS Metrics

Harry Stebbings talking to Dave Kellogg, the SaaStr podcast

“Everybody agrees we should be ARR first. The question is are you? If your default unit isn’t ARR and if you don’t show your financials with an immediate focus on the ARR bucket and what’s happening to it, I’m going to argue you’re not ARR first. Lord knows, please don’t show up with a gap P&L. These things will hurt you when you try to raise money because a VC wants to know that you get ARR and you are an ARR first person.”

It’s great to hear Dave Kellogg run through his biggest pet peeves in SaaS metrics. Warning: there may be some discussion points here that make you rethink the way you run your own metrics reporting! There’s really no stone left unturned in this discussion. Read the full post


How to Build a SaaS Marketing System

April Dunford presenting on Forget The Funnel

“The problem is that there are a set of questions that are fundamental to building your marketing plan that Google cannot answer for you. So Google can’t tell you ‘what’s the best way to reach my target audience’ or ‘if I’m taking these tactics, how do I tailor them for my business?'”

When I spoke to Gia and Claire on the ChartMogul podcast some months ago, the pair referenced April Dunford as one of their all-time biggest sources of inspiration when it came to marketing strategy. In Gia’s words, “April is one of the OGs in this space.” This isn’t a written article but I’d urge you to watch the full presentation! And if you haven’t already, sign up for the entire series of Forget The Funnel workshops, they’ll 100% change your view on Marketing. Read the full post