SaaStr 728: How to Double Your Magic Number and Increase Your Go-to-Market Efficiency with Sapphire Ventures

Go-to-market (GTM) design and efficiency are sometimes overlooked, but they’re a critical driver of any SaaS business. Rajeev Dham and Karan Singh, Partners at Sapphire Ventures, and Jane Lee, Vice President at Sapphire walk us through how to double your “Magic Number,” a shorthand for your sales and marketing efficiency.

Magic Number is your growth in ARR over a quarter divided by the sales and marketing spend in the prior quarter. Previously in SaaS, it was widely seen that anything > 1 was healthy if you were venture-backed, and anything > 1.5 is was seen as perhaps too capital-efficient. If you were well-funded, 0.7 was fine.

But as Rajeev, Karan, and Jane point out to set the stage for this discussion, Go-to-market efficiency in recent years has suffered a significant drop across both public and private SaaS companies.

--------------------------------------------------------------------------------------------

SaaStr hosts the largest SaaS community events on the planet.

Join us in 2024 at:

SaaStr Annual: Sept. 10-12 in the SF Bay Area. Join 12,500 SaaS professionals, CEOs, revenue leaders and investors for the world's LARGEST SaaS community event of the year. Podcast listeners can grab a discount on tickets here: https://www.saastrannual2024.com/buy-tickets?promo=fave20
SaaStr Europa: June 5-6 in London. We'll be hosting the 5th SaaStr Europa in London for two days of content and networking. Join 3,000 SaaS and Cloud leaders. Podcast listeners can grab a discount on Europa tickets here: https://www.saastreuropa2024.com/buy-tickets?promo=fave200

--------------

This episode is sponsored by: Northwest Registered Agent

Get more when Northwest Registered Agent starts your business.

They'll form your company fast and stand up your entire business identity in minutes.

That means business free domain, business email, website, hosting, address, mail scanning, business phone app, all within minutes. Visit https://www.northwestregisteredagent.com/saastr to get a 60 percent discount on your next LLC.

Francis Beckwith Interview