Kind of meta, right?
I’m involved with a bunch of different software companies, most of whom sell a Software as a Service (SaaS product. The SaaS model is a really good one, but it changes the game in terms of financial metrics. in the old world, back when most companies produced a product, all we had to worry about was the cost of producing the product (commonly referred to as the cost of goods sold or COGS), the fixed expenses of the business and the sales figures. This data was enough (pretty much) to assess the financial performance and indicators for the business.
In a SaaS world, things are different and there are a whole bunch of new metrics to worry about. Things like Customer Acquisition Costs (CAC), Lifetime Value (LTV) and Churn are the numbers by which SaaS company CEOs live and die.
There are two ways to gain insight into the various SaaS metrics. The first is to spend time each day, week or month calculating them manually – going to the various different systems a company uses (accounting, subscription management etc.) and manually getting the relevant data. The second approach is to use a specialist service that is all about tracking SaaS analytics.
This is the world that ChartMogul works in. The company was founded by Nick Franklin, himself a veteran of SaaS high-flyer Zendesk. Franklin set up ChartMogul precisely to deliver answers to those SaaS-metric questions that every board worth its while asks. ChartMogul now claims more than 1,000 companies, including Typeform, Pipedrive, Calendly and LiveChat.
Scooping up the cash
ChartMogul launched its paid product in 2015, and has been growing more than 100% year over year. Those sort of results mean that investment money comes sniffing and so it is today with the news that ChartMogul has secured another $2.2M in funding to further fuel its growth. The round was led by Alven Capital, with participation from previous investors Point Nine Capital and small angels. Franklin advises that the Berlin-based company will use the cash to accelerate engineering and product development:
This infusion of capital will enable us to grow our product and engineering teams and double down on product development. We have a really exciting product roadmap, so we’re eager to make these additional investments and accelerate our journey toward realizing our broader vision: to build the first truly democratized SaaS analytics solution.
MyPOV
There is no question that SaaS companies need to gain understanding and insights into their SaaS metrics. The question in my mind is how many will really see a third-party tool as the way to gain that understanding. If I think about the various SaaS companies that I’m involved in, roughly half hand-calculate the various metrics on a “when required” basis, while the other half take advantage of generic analytics and visualization tools to create dashboards for this data (either accounting solutions or alternatively broad platforms such as Google’s Data Studio.
To channel some of the language that ChartMogul uses in its own customer conversations, I wonder about the size of this market, and how much of a barrier it is that early stage SaaS companies don’t see sufficient value in a discrete third-party tool such as ChartMogul to drive its uptake.
Don’t get me wrong, ChartMogul absolutely does what it says on the box and delivers clear information about the SaaS metrics of note. I just wonder whether that is enough…
