Benchmarking LinkedIn's S-1 - How 7 Key SaaS Metrics Stack Up by @ttunguz (2023)

FAQs

What is SaaS benchmark? ›

A SaaS financial benchmark refers to benchmarks that are specifically focused on average performance in the SaaS world. In particular, a SaaS financial benchmark is a benchmark about something financial, such as MRR, ARR or other financial metrics that are commonly used throughout the SaaS world.

Second to Salesforce, LinkedIn is the second largest SaaS company in the world. Unlike most SaaS companies which are B2B, LinkedIn is a B2C2B company. LinkedIn attracts hundreds of millions of consumers to post resumes online and sells this data and access to its audience to advertisers and recruiters and salespeople.

The overall median growth rate for all companies in the survey registered 40%. This is up from an overall median of just under 30% in 2020 and puts growth at the same pre-pandemic levels seen in 2019.

SaaS company growth rate depends much on a company development stage. On average, the revenue increase falls into the 15% to 45% year-to-year growth range.

There are four main types of benchmarking: internal, external, performance, and practice.

The most common types of SaaS solutions are Customer Relationship Management (CRM), Enterprise Resource Planning (ERP), Content Management System (CMS), Project Management Software, Sales, Marketing, eCommerce.

Existing Azure features

In addition to a few experiments, LinkedIn uses Microsoft's public cloud in three notable ways: Azure Media Services to accelerate LinkedIn video post-delivery. Microsoft Text Analytics API, an Azure Cognitive Service, to improve machine translation in LinkedIn's Feed.

The Rule of 40 is a principle that states a software company's combined revenue growth rate and profit margin should equal or exceed 40%. SaaS companies above 40% are generating profit at a rate that's sustainable, whereas companies below 40% may face cash flow or liquidity issues.

What is a good profit margin for SaaS? ›

Understanding why gross profit margin is important and how it's calculated is good, but it means little without context. SaaS companies should achieve a gross profit margin of 75%, and anything below 70% may raise concerns for financial advisors, investors, VCs, and analysts.

According to a study by Bessemer Venture Partners, the average monthly growth rate for successful SaaS startups is 7-8%. This means that a company's revenue is increasing by 7-8% each month.

The rule of 70 is a calculation to determine how many years it'll take for your money or an investment to double given a specified rate of return. Investors can use this metric to evaluate various investments including mutual fund returns and the growth rate for a retirement portfolio.

The SaaS Magic Number is a ratio showing yearly recurring revenue growth gained for every sales and marketing dollar spent. It indicates the level of operational efficiency of a company, as well as the sustainability of sales and marketing expenditure.

Simply put, you take you growth rate and subtract your EBITDA margin. If it's above 40%, you're in good shape. If it's below 40%, you should start figuring out how to cut costs.

'Our benchmark criteria are explained under the eight categories of: Behaviour, Customer Orientation, Theory, Insight, Exchange, Competition, Segmentation and Methods Mix.

What are benchmark techniques? ›

Benchmarking is a technique for looking outside where at the practices of the own company are compared with the external practices. Comparison means that there must be a basis line of similarities. Only similar things can be compared each other. Therefore it is necessary to recognize one's own operations and processes.

The essential SaaS components are: CRM system. Marketing automation.

SaaS (Software-as-a-Service) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted (Wikipedia). It's a method of software delivery where applications are hosted remotely by a vendor or service provider and are made available to customers over a network.

There are two different types of Software as a Service model, horizontal SaaS and vertical SaaS. A horizontal SaaS is a structure well used by established cloud services such as Salesforce, Microsoft, Slack, Hubspot etc.

Bill Gates, used LinkedIn to share his 'impressive' resume from when he was 18 years old. Of all the things that you can find on social media and other platforms, finding Bill Gates' resume is difficult to find, however, not when Gates himself shares it with whole the world.

The APIs are currently provided for free, but LinkedIn reserves the right to charge for the APIs in the future. If we do charge a fee for use of the APIs or any developer tools and features, you do not have any obligation to continue to use the APIs.

Dominating the Cloud Service Provider (CSP) market are three hyperscalers: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). They consume an impressive 34%, 21%, and 10% respectively of the global cloud infrastructure market (as at June 2022), which is worth a staggering $203 billion.

What are the three types of benchmarks? ›

Three different types of benchmarking can be defined in this way: process, performance and strategic. Process benchmarking is about comparing the steps in your operation versus the ones that others have mapped out.

Benchmarks are often used to measure performance of computing resources and have previously been applied to cloud resources [2]. Benchmarking is usually performed independently of an application and does not take into account any bespoke requirements an application might have.

The term benchmark has essentially the same meaning as standard, but nevertheless is most often used in relation to the dynamic process of making relative comparisons – a process frequently referred to as benchmarking (see section 5 for UK examples).

Each benchmark corresponds to a set of metrics that determine if your teams are meeting the target response and resolution times. The percentage indicators beside each metric determine whether you achieved (green) or missed (red) the target performance for that SLA plan over a period of time.

Some widely used benchmarks in the stock market are the Wilson 5000, Dow Jones Industrial Average, and the Russel 2000.

The goal of benchmarking is to create new methods or improve current processes to meet that higher standard. It's not a one-time effort. Rather, it's another part of continuous process improvement that the best organizations commit to if they want to stay competitive.

Benchmarking is the practice of comparing a company's metrics to other businesses to analyze what's effective in their respective industries. Implementing this process can lead to various benefits, including improved efficiency and increased sales.

Benchmarking is a process of measuring the performance of a company's products, services, or processes against those of another business considered to be the best in the industry, aka “best in class.” The point of benchmarking is to identify internal opportunities for improvement.

Benchmarking examples are instances of companies or departments measuring their results against other departments or others in their industry, a practice that can help them understand how they're performing compared to their competitors.

What is an example of benchmark assessment? ›

An example of a benchmark assessment is a weekly spelling test given to all students. This is a benchmark assessment because it can be used to measure how well students are meeting the learning goal of learning how to spell.