20VC: Scaling ServiceNow to $5BN in ARR | Leadership Lessons from Doug Leone, Frank Slootman and Bill McDermott | VC Value Add: Is it Real and Why the Worst VCs are "Seagull VCs"
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Rethinking Customer Success in SaaS Revenue Models
Revenue from net new customers versus existing customers should be carefully analyzed in a SaaS context. Initially, a land-expand-retain model was favored without prioritizing customer success (CS). This approach allowed all team members to oversee the customer lifecycle, from initial engagement to upselling. However, historical skepticism regarding the value of CS surfaces, with examples indicating a disconnect between CS roles and measurable business impact. A critical examination revealed that functions typically associated with CS—such as customer support, upselling, and configuration assistance—were better suited to dedicated departments like support and sales. The notion of CS was seen as unnecessary, particularly in organizations with high renewal rates and minimal churn. Efforts focused on funding necessary roles in support, sales, and professional services instead of maintaining a separate CS function. A growing sentiment among CEOs of SaaS companies suggests skepticism about the need for CS teams, with many leaders reconsidering their contributions and organizational efficiency. The emphasis lies in quantifying performance based on efficiency metrics rather than simply adding staff based on customer count or revenue, underscoring a need for every division to justify its value in real revenue generation.
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