The Official SaaStr Podcast: SaaS | Founders | Investors

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

Mar 6, 2024

Guest

Rajeev Dham

Learn how to double your 'Magic Number' and increase go-to-market efficiency in SaaS businesses with insights from Sapphire Ventures. Discover the evolving strategies in software sales and the importance of optimizing go-to-market design for sustainable growth.

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Introduction

00:00 • 2min

Unlocking Growth: The Importance of Go-To-Market Design in SaaS Businesses

01:48 • 5min

Challenges and Evolving Strategies in Software Sales

07:18 • 3min

Evolution of Go-to-Market Strategies

10:17 • 9min

Optimizing Go-to-Market Organization Design for Sustainable Growth

19:45 • 5min

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.

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