3 min - May 26, 2021

The SaaS Metrics that Matter Most with Patrick Hankinson, Concrete Ventures

Concrete Ventures invests in great ideas and founders in Atlantic Canada who are ready to build massively scalable businesses. Concrete Ventures has invested in firms across a broad range of sectors at the pre-seed stage for 10 years. 

The majority of Concrete Ventures portfolio companies are SaaS, including:  

Rally – For law firms of all sizes, Rally helps users attract and retain clients with a best-in-class, white-labelled collaborative workspace. Their advanced automation technology boosts profits on fixed-fee and routine services while freeing up time to focus on higher value work.

Squiggle Park – Squiggle Park uses a scientifically backed reading methodology to accelerate mastery of reading skills for ages 3 to 8, and reading comprehension for ages 8 – 15+.  

TrojAI – TrojAI is developing solutions to protect artificial intelligence platforms from adversarial attacks on training data and AI models, such as poisoning or embedded Trojan and evasion attacks. 

General Partner Patrick Hankinson advises founders to focus on their product before focusing on metrics.

In terms of key metrics to track at the pre-seed stage, Patrick has 4 top picks:

Year over Year Growth Rate – In the early days, Patrick likes to see a plan scale rapidly year over year, to double and double and double ARR/MRR.  

CAC Payback Period – Patrick prefers this metric over LTV:CAC because assumptions on margin and churn in LTV can skew the numbers dramatically. It’s rare to hit 6 months in the early stages. 

Product Usage / Engagement – You can trick yourself into thinking you’re delivering a great product because someone is paying you. But if they’re not actually using the product, you’re going to be facing churn at some point. Track metrics such as Daily Active Users to Monthly Active Users, Free vs Paid users, or create your own.

North Star Metric – Identify a unique value for your company and context that shows value.

Patrick also shares two bonus metrics he tracks as an investor, and that he advises his portfolio companies to start tracking towards the end of the seed stage or into the Series A stage. 

Hype Ratio – Defined as the amount of capital raised – cash on hand / ARR. Shows how efficiently a company spends money to generate revenue. Deep tech requires more investment.

Burn Multiple – Defined as Net Burn / Net New Annual Recurring Revenue (ARR). You want to start tracking this when you have product-market fit and are deploying cash to the Sales & Marketing engine.

About SaaSCan

SaaSCan was created to bring deep experience in customer-centric growth and SaaS metrics to Canada’s growing SaaS ecosystem. 

SaaSCan for Startups services were born in the early days of COVID-19 to help Canadian SaaS companies understand COVID’s impact on churn and retention. We have expanded to provide enablement for SaaS startups on SaaS metrics and benchmarks.

SaaSCan for Early Stage Growth services emerged from the need startups have to adopt a customer-centric approach as they grow, so they can deliver ongoing value to existing customers and optimize key SaaS retention, expansion, and efficiency metrics.

SaaSCan for Later Stage Growth services empower SaaS companies to be customer-centric and metrics-savvy at scale, further optimizing customer retention, SaaS metric performance, and company valuation.

 

To learn more about our Advisors, Partners, and Services, please visit www.saascan.ca.

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