Nicolaj Højer Nielsen’s Post

If you're a SaaS scaleup, Rule of X is a simple way get an idea what revenue multiple your company is valued at. Love this simple framework developed by Bessemer Venture Partners. Also, it shows that growth still matters way more than profitability, and always has, even during the VC crunch. But of course, if growth is limited, you have no other choice than go to profitability. Datadog example: growing 25% and EBITDA margin of 25% = Rule of X score of 3 x 25% + 25% = 100% which implies a 15x revenue '24 multiple.

SaaS companies are raising their prices to chase short-term profitability. They are making a mistake that is not only frustrating to their customers but that will cost them money. If your SaaS product can profitably serve a segment, never price yourself out of that segment. By raising prices you will make extra millions today, that is true. You'll also make fewer hundreds of millions overall by failing to get to IPO.

Understanding the Rule of X for SaaS Scaleups For SaaS scaleups, the Rule of X offers a straightforward framework to estimate revenue multiples. It was originally developed by Bessemer Venture Partners and supplemented with data last week by Dealroom founder Yoram Wijngaarde. It emphasizes that growth significantly outweighs profitability, even amid VC crunches. However, when growth is constrained, profitability becomes essential. Framework Overview: The Rule of X combines growth rate and free cash flow (FCF) margin to evaluate company value, using a multiplier (typically 2-3x) on growth. Datadog Example: With a 25% growth rate and a 25% EBITDA margin, Datadog achieves a Rule of X score of 100%, implying a 15x revenue multiple for 2024. Importance of Growth: Growth has a compounding impact on valuation, significantly outweighing FCF margins. Subscribe to ‘Siliconnector’ Telegram channel for insights and news from Tech world and Silicon Valley: https://t.me/siliconnector

Common SaaS Misconceptions: 👉 Not all SaaS solutions are one-size-fits-all. One common misconception? SaaS is only for large businesses. False! From startups to enterprises, SaaS models can be tailored for any business size. What's the biggest myth you’ve heard about SaaS? 💜 #SaaSDevelopment #SaaSGrowth #BusinessScaling #CustomerRetention #InnovationStrategy #DataDriven #CloudSolutions #BusinessSuccess #GrowthEngine #SaaSOptimization

🎙️ Just Dropped: We Unpack Amplitude's Plus Plan with Katya Fuentes! Explore how this strategic move is revolutionizing SaaS growth and accessibility for startups and SMBs 🌟 Episode Highlights: 📈 Discover the genesis of the Plus Plan and its mission to democratize SaaS tools. 🌍 From Ukraine to the Bay Area, Katya shares her journey and the impact on Amplitude's direction. 🛠️ Peek behind the curtain at the collaborative effort to craft a plan that balances self-service with enterprise needs. Listen now https://lnkd.in/gMeqMzaC for the full story. What's your view on transparent pricing in SaaS? 💭 #saasrevolution #startupgrowth #thrivecast

Scaling SaaS with Kevin White! Discover the latest episode with Kevin White from Common Room, packed with actionable strategies for scaling SaaS companies from their infancy to full-blown success. What You'll Discover: 🎯 Early Focus: Emphasizing product-market fit and the power of swift adaptation. 🌱 Growth Evolution: Transitioning from open source and freemium to advanced acquisition models. 🤝 Synergy: Building a unified front by blending PLG with direct sales efforts. Tune in https://lnkd.in/ge-4Gaj7 to soak in Kevin's wisdom on SaaS growth. Keen to hear about the strategies that have fueled your company's journey. Drop a comment below! #SaaSJourney #ScalingUp #ThriveCast"

Hey SaaS founders 👋 Wanna know the secret for 5X-ing your revenue? 🤑 Johnny Page just pulled back the curtain on the growth blueprint that's turning good companies into industry dominators. Most founders are only scratching the surface of our revenue potential... Like digging for treasure with a plastic spoon. Johnny's laying out the playbook: 🧲 Find your money magnets (customers who are worth their weight in gold) 📈 Double down on what's working (and ruthlessly cut the rest) 💰 10 high-value areas where money's practically growing on trees (and you're probably missing them!) The craziest part? This is the EXACT playbook billion-dollar private equity firms use to 10x SaaS companies, and now you have it for free. Fair warning: This strategy is like rocket fuel, but you need to be pulling $3-5 million ARR for it to work. Not there yet? Bookmark this video for later. 😉 Check it out now ⬇️

Common SaaS Misconceptions: Not all SaaS solutions are one-size-fits-all. One common misconception? SaaS is only for large businesses. False! From startups to enterprises, SaaS models can be tailored for any business size. What's the biggest myth you’ve heard about SaaS?

Common SaaS Misconceptions: Not all SaaS solutions are one-size-fits-all. One common misconception? SaaS is only for large businesses. False! From startups to enterprises, SaaS models can be tailored for any business size. What's the biggest myth you’ve heard about SaaS?

The average SaaS company spends $2.40 (!!) for every $1 of net new ARR. That may have worked in an era of 3% interest rates and bountiful venture capital, but no longer! In this new normal economy, our industry had better get serious about sales and GTM efficiency. Luckily, #revops teams are stepping up to lead change!