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Now what does this number mean? See how you stack up against the set of public companies in Scale Venture Partners SaaS Index.  Though the companies in the ScaleVP SaaS Index are larger than most startups, the premise of being able to run an efficient distribution engine is universal.

Image removed.Visit Scale Studio to calculate your Magic Number, along with all 4 of the Vital Signs of SaaS

If your Magic Number is low (< 0.7), think about whether or not you need to make changes to your go-to-market model.

  • Have you segmented your prospects and identified your ideal customer profile?
  • Are you using the right distribution model and routes to market?
  • Do you have sufficient marketing and sales alignment on customer messaging and demand generation?

Conversely, if your Magic Number is high (> 0.7), think about stepping on the gas to accelerate growth.

  • Can you easily envision yourself adding headcount in a scalable fashion?
  • Do you need to think about adding additional routes to market?
  • Is it time to add additional markets?
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