Blue Horizon’s reading list is a curated collection of articles for SaaS founders and management teams. We are entrepreneurs and operators who have lived through the process of founding and scaling software companies. Here are the articles and resources we found useful this week.

Why Retention is the Most Important Metric We Look At

By: Jeff Galowich, CEO of Blue Horizon Software.

Retention is core to the long-term stability, growth prospects, and ultimately profitability of a SaaS company. However, many companies focus value creation largely on new customer growth and overlook the importance of customer and revenue retention metrics. Creating a robust customer success team with dedicated resources can improve retention which spurs growth, and ultimately, a higher valuation for the business.

The Ultimate List of Usage-Based Pricing Resources

By: Kyle Poyar, OpenView Venture Partners

As this product-led wave gets bigger, the concept of usage-based pricing is becoming more and more appealing to software companies. Be it purely usage-based (per API, per call, per transaction, Gigabyte, etc.) or hybrid (upfront subscription fee, and then a usage-based charge), this billing strategy is a hot topic at the moment.

5 Interesting Learnings from WalkMe at $200,000,000 in ARR
By: Jason Lemkin, SaaStr

Interesting learnings from WalkMe:
– Going upmarket is key to growth
– Professional Services are 12% of revenue and lose money
– 940 employees, so about $200k in revenue per employee
– NRR of 112% overall, 120% for bigger customers

How to Calculate SaaS Revenue Retention
By: Ben Murray, The SaaS CFO

Poor retention has several downline impacts. It leads to the following financial impacts.

Lower customer lifetime values, because we use churn in the denominator of the LTV equation. Poor retention puts more pressure on your new business development team to perform.
We need more new business bookings to offset churn and hit our revenue growth targets.
It puts more pressure on gross margins, increases CAC payback periods, and stresses our P&L.

The Ultimate Product-Led Growth Resources Guide
By: Kyle Poyar, OpenView Venture Partners

Companies with a PLG strategy—think Slack, Expensify, Atlassian, and Dropbox—rely on product features and usage as their primary drivers of customer acquisition, retention, and expansion. It’s through this strategy that companies are able to grow faster and with less cash.

About US

Blue Horizon acquires and invests in profitable software businesses with stable recurring revenue streams. The Blue Horizon platform combines long-term capital and industry expertise with an operating model that enables businesses and their leaders to focus on growth and profitability.