onlycfo.io · 2023-09-14 · 994d

Death From Benchmarking

Benchmarking data, when misused by inexperienced practitioners, drives poor strategic and operational decisions through averages of dissimilar companies, isolated metric analysis, and inconsistent expense categorization. The article emphasizes that effective benchmarking requires understanding company comparability, holistic context analysis, and proper financial accounting to avoid costly mistakes in hiring, spending, and organizational design.

6 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Free Cash Flow Margin

30%percent

best-in-class

Best-in-class software companies at scale

Gross Margin (COGS % of Revenue)

33%percent

median

Early-stage SaaS companies

Gross Margin (COGS % of Revenue)

17%percent

median

Post-IPO SaaS companies

Gross Margin (COGS % of Revenue)

25%percent

median

Public software companies (median)

OpEx as % of Revenue

427%percent

median

Early-stage SaaS companies

OpEx as % of Revenue

76%percent

median

Post-IPO SaaS companies