Presentation to the #Elevante61 group from Advance and KPMG.

1. Building a World-Class SaaS Company
Our Adventure in Open Source & Beyond

2. The Journey
1999 20092006

3. About Ephox
• 50 staff
• 50% in Brisbane
• 800+ customers
• 5M downloads
• 500M users

4. Some of our users

5. The promise of publishing on the internet
You World

6. The reality of publishing on the internet
You Developer World
$$ cost
Time delays
Frustration!

7. A better way
You Software World
Faster
Better
Cheaper

8. TinyMCE: the ‘Word’ in WordPress

9. >30% of the world’s websites
1 billion posts/year

12. Check
Core Editor
Images, Video
and more
Spelling &
Grammar
Accessibility
& Compliance
Commenting
Track Changes
Real-time
collaboration
Import from
Word
Cognitive
Live Data

14. What is software as a service (SaaS)?
• Subscription
business model
• Software & data as
key part of value

15. Some SaaSy examples

16. SaaSy Subscription Business Model
Begin
Month
100%
End
(install base)
101%
End
Month
109%
Churn
1%
Upgrades
& Add-ons
2%
8%
New
customers

17. Our Experience of SaaS with TinyMCE
May-15 Aug-15 Nov-15 Feb-16 May-16
9% m/m
170% y/y
$AUD

18. Predictable Compounding Growth
http://www.slideshare.net/shopifyInvestors/shopify-investor-deck-05042016

19. ConvertKit MRR
See https://baremetrics.com/open

20. Quick survey
Who are you?

21. Questions
• What revenue?
• What growth rates?
• What is your average annual contract value
(ACV)?

22. What size are your customers?
http://www.pacific-crest.com/2015-saas-survey/

23. Now for some content
Customer Acquisition

24. You are not growing fast enough
http://www.pacific-crest.com/2015-saas-survey/

25. Growth = Valuation
http://www.softwareequity.com/research_quarterly_reports.aspx

26. EV/Revenue Multipliers vs TTM Revenue
Growth – 1Q16
http://www.softwareequity.com/research_quarterly_reports.aspx

27. Growth Rates by Company Size
http://www.pacific-crest.com/2015-saas-survey/

28. Customer acquisition is EXPENSIVE
http://www.pacific-crest.com/2015-saas-survey/

29. High ACV customers warrant even more CAC
http://www.pacific-crest.com/2015-saas-survey/

30. Sales & Marketing is #1 expense
http://www.softwareequity.com/research_quarterly_reports.aspx

31. Public SaaS companies
http://www.softwareequity.com/research_quarterly_reports.aspx

32. Ramping your customer acquisition rate
• Seeds (Word of mouth)
• Nets (Marketing)
• Spears (Sales)

33. Primary mode of distribution
http://www.pacific-crest.com/2015-saas-survey/

34. Primary Mode by Contract Size
http://www.pacific-crest.com/2015-saas-survey/

35. Growth Rate by Mode of Distribution
http://www.pacific-crest.com/2015-saas-survey/

36. % of Pipeline Source by Marketing
http://www.forentrepreneurs.com/bridge-group-2015/

37. Sales Development Reps (SDR)
• Inbound SDR today
– 67% of SaaS
companies >$5M
have SDR
• Push velocity faster
• Outbound
– 70 calls/contacts per
day
– 10 SQLs per week
• Make it work, scale it

38. Inside Sales Reps (ISR)
• $10-$50K ARR per
deal (average $25K)
• $50K per month in
new business
• $150K OTE
http://www.forentrepreneurs.com/bridge-group-2015/

39. Rep Productivity
http://www.forentrepreneurs.com/bridge-group-2015/

40. Your Reps Should be Busy: 6.6 meaningful
conversations per day

41. >$5M you will need to be a hiring machine
http://www.forentrepreneurs.com/bridge-group-2015/

42. Average Commission Rate is 10.1%
http://www.forentrepreneurs.com/bridge-group-2015/

43. Or 9%
http://www.pacific-crest.com/2015-saas-survey/

44. Field Sales Reps
• $66-84K in ARR/deal
• $240K OTE

45. Customer Success

46. A Model Where Customers Win
• User adoption is key
– no shelfware!
• Prove unit
economics &
addressable market
• 1% difference in
churn = $100M in
market cap

47. Account / Customer Success Mgrs
• The $2M person
• $80K-$100K OTE
• 2% commission on
renewals

48. Gross dollar churn rates
http://www.pacific-crest.com/2015-saas-survey/

49. ConvertKit Churn Rate
See https://baremetrics.com/open

50. ConvertKit’s # of customers
See https://baremetrics.com/open

51. ConvertKit Dollar Retention
See https://baremetrics.com/open

52. Net dollar churn rates
http://www.pacific-crest.com/2015-saas-survey/