SaaStr · 2021-04-18
· 1872d
The Compounding Nature of SaaS: Why Revenue Growth Accelerates at Key Inflection Points
Jason Lemkin explains that SaaS businesses compound, meaning they are difficult to launch but accelerate dramatically once key revenue milestones are reached. The article identifies critical inflection points ($2M, $10M, and $25-30M ARR) where business dynamics fundamentally shift from struggle to inevitable success.
Metrics in this report
NRR Doubling Timeline at 110%
8years
median
Revenue doubles with zero new customers
NRR Doubling Timeline at 120%
5years
median
Revenue doubles with zero new customers
Okta Path to $2B ARR
14years
actual
Time from founding to $2 billion ARR milestone
Salesforce Operating Margin Expansion
16.8% to 32.8%%
FY20 to FY25 guidance
Margin improvement over 5 years
Salesforce Revenue Growth
5.4B to 38.0B$B
FY15 to FY25 guidance
Public SaaS company annual recurring revenue
Shopify Quarterly Revenue Growth
9M to 989M$M
Q1 2013 to Q1 2021
Public SaaS company quarterly revenue