ScaleVP has a definite and aggressive perspective on what it takes to win in SaaS. We want to invest in companies in markets that have good growth characteristics and where the SaaS model provides an unfair advantage over incumbents. Once the sales and marketing model is aligned, it pays to scale aggressively because disproportionate value goes to the winner in these markets.
The metrics for success in SaaS are just different enough from those in enterprise software to allow for confusion. That’s why we developed our “Magic Number” metric to help us pick winners. We like the Magic Number because it’s simple and can be calculated for any company with basic GAAP financials – including all the public SaaS companies. Despite its simplicity, the Magic Number is highly predictive of success.
Current pervasive trends within SaaS we focus on include:
Mobile Centric Productivity
Core Business Software
Vertical SaaS/Tech Enabled Services