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An article by Tom Tungz that relates SAAS co marketing budgets to to annuity grabs helps me contextualize this S1. Asana's gross margin is ~85%! Their net ret
by aresant 6y ago
An article by Tom Tungz that relates SAAS co marketing budgets to to annuity grabs helps me contextualize this S1.
Asana's gross margin is ~85%!
Their net retention is tracking @ 120% in 2020.
So every $1.00 dollar of sales to a customer last year turned into $1.20 this year.
AKA negative churn.
Which explains the reason you see them spending $105m in sales & marketing to generate $142m in topline.
Obviously this runs its course eventually, but at that point you cool down your S&M & R&D engine and try to keep up with counting all the cash flows.
SAAS is just a remarkable business, absolute cash pigs.
(1) https://tomtunguz.com/does-better-ndr-imply-greater-tolerance-for-higher-cac/ https://tomtunguz.com/does-better-ndr-imply-greater-toleranc...