# Top 10 in Tech - What to know for Week ending December 2, 2022

Published: 1 December 2022
Canonical: https://www.top10in.tech/posts/week-ending-december-2-2022

[Last month](https://www.top10in.tech/top-10-in-tech/top-10-in-tech-what-to-know-for-week-ending-november-18-2022) I reviewed the KeyBanc Capital Markets 13th annual SaaS survey for Private Markets (you can [download it here](https://www.key.com/kco/images/2022_kbcm_saas_survey_10-20-22_vf.pdf)) and offered a warning as the number of respondents has dropped significantly: Now 110 vs. [424](https://www.key.com/kco/images/2019_KBCM_saas_survey_102319.pdf) in 2019.

Another player in town, Openview, is also benchmarking privately held SaaS businesses with a PLG Lens. Their 2022 SaaS Benchmarks Report has a much broader sample size and combines over 3,000 respondents' results (and 660 this year) which make up this week's Top 10 (and can be [downloaded here](https://366266.fs1.hubspotusercontent-na1.net/hubfs/366266/2022%20SaaS%20Benchmarks/OpenView%20SaaS%20Benchmarks%20Report_2022.pdf) as a PDF); it's a much different story than in 2021 - but we still [take it to 11](https://media.giphy.com/media/aqSl7Dw5HTojK/giphy.gif):

1. GROSS RETENTION:

OpenView's SaaS survey found that early-stage companies ($2.5m to $10m ARR) are seeing gross retention [decrease relative to 2021](https://www.dropbox.com/s/p3710y01gzspxm8/1%20-%20GDR%20less%20than%20%2410m.png?dl=0). Those earlier-stage businesses should be focused on Churn as a primary KPI. PLG lead companies see best-in-class retention (128%) and have highly efficient growth engines (63% Rule of 40).

2. BURN:

2022 values profitability over growth rate, and most companies are cutting burn, [regardless of cash runway](https://www.dropbox.com/s/de2h62wnm0hdegd/2%20-%20BURN.png?dl=0) or Growth Rate (see why with #3 below). LeanOps is the whiplash to what is happening both in the VC world and Public Market - also reflected by the rapid [handbrake on minted Unicorns](https://www.dropbox.com/s/o3q4bkqspmh3xir/2%20UNICORNS-2022-SaaS-Benchmarks_Unicorns-Minted-Per-Quarter.png?dl=0) from Q4 '21 to Q3 '22 (from 139 to 24).

3. RULE OF 40:

In 2021, OpenView observed that "investors have forgotten all about the [Rule of 4](https://twitter.com/PointNineCap/status/1108374783262158849)0." This year's response: the Rule of 40 "[back from the dead](https://www.dropbox.com/s/aer76d3cq20f0z3/3%20-%20Rule-of-40-public-companies.png?dl=0)." Cash is no longer cheap, and [multiples](https://www.dropbox.com/s/og6zg83mhbm39jm/2%20-%20MULTIPLES%20OpenView-2022-SaaS-Benchmarks_EV-LTM-Revenue.png?dl=0) have plummeted. Efficient Groth Engines and LeanOps practices are essential - PLG lead companies also stand out in this category with 63% tracking with the Rule of 40).

4. FINOPS:

This slide could be a newsletter all in itself. A very meaty section that breaks down [core FINOPS metrics by stage](https://www.dropbox.com/s/r6hvez2i5lsjgfq/4-financial-operating-metrics.webp?dl=0) - headcount, funding amount, ARR, etc. This shows what it takes to raise funding in today's environment (Bold numbers are median performance).

5. CAC PAYBACK:

According to KeyBancs report, New customers, on **average**, [take 2 years and 2 months](https://www.dropbox.com/s/z3tedek2i7ejen8/7%20%20-%20CAC%20PAYBACK.png?dl=0) to become profitable. OpenView has a different take, and [the answer depends on the market](https://www.dropbox.com/s/x3nbmpljrk9aejn/5%20-%20CAC%20Payback.png?dl=0). Companies selling to consumers/SMB segment have shorter buying cycles/lower CACs than those selling to enterprise customers, and [PLG outperform their peers](https://www.dropbox.com/s/uszw2qieic4nult/5%20CAC%20Payback%20and%20PLG.png?dl=0) (again).

6. NET DOLLAR RETENTION:

This metric can be paired with #5 above. Being strong in both these metrics allows you to fuel high growth and stay efficient. Growing and staying efficient is only possible if you're [strong in these two metrics](https://www.dropbox.com/s/lycf26m9il1e046/6%20-%20NDR%20%2B%20CAC.png?dl=0). [Great NDR is 116% in SMB and 125% in Enterprise](https://www.dropbox.com/s/n23ds2339e4qav3/6%20-%20NDR.png?dl=0).

7. REVERSE TRIALS:

This is a crucial lever with those of us at PLG-Land: [Reverse Trials](https://openviewpartners.com/blog/your-guide-to-reverse-trials/?) allow users to try premium features during the trial. Companies are maximizing the upfront value for users and increasing the likelihood they will [convert through usage paywalls](https://www.dropbox.com/s/4d4iraov43zn1a2/7%20-%20REVERESE%20TRIALS.png?dl=0).

8. PRICING:

Just like Software Products - pricing is never done. [61% of the companies surveyed adjusted pricing in the last year, and, on average, this resulted in a 27% lift in ARR](https://www.dropbox.com/s/areold5wc5xxjrq/8%20-%20PRICING.png?dl=0). Side note in that slide: 55% of respondents have at least tested usage-based pricing.

9. SALES AND MARKETING:

This is similar to KeyBanc, who noted marketing spend has [dropped this year to 31%](https://www.dropbox.com/s/mivd1ak1ygwxvko/4%20-%20SM%20spend-vs-growth.png?dl=0) of ARR (down [from 36%](https://www.forentrepreneurs.com/wp-content/uploads/2021/10/Slide34.png)) KeyBanc correlates Sales and Marketing Spend to Growth Rates, whereas OpenView [separate spend based on stage](https://www.dropbox.com/s/fji08wqyx2fz2pr/9%20-%20S%26M%20SPEND.png?dl=0) (33% average across the board though). Both methods are interesting benchmarks. Sales employees range from [10-20% of all staff](https://www.dropbox.com/s/t07tqs0kzu24d4a/9%20-%20SALES%20TEAM.png?dl=0) across the revenue stage - but that percentage increases at the higher end of town.

**10, EMPLOYEE DISTRIBUTION**: Across all companies, [Engineering is consistently the largest department](https://www.dropbox.com/s/3z3v1arez18mqaa/10%20-%20Employees.png?dl=0), Customer Success and Product at about 10%, and Marketing at only 7%. This slide also has median headcount by stage - which is a great metric to track.

11. REPRESENTATION:

Or Women-Led Growth: Less than one-third of leadership roles are filled by women at most early-stage companies. Here is the kicker: [EVERY BUSINESS with at least one-third of the team women has a greater growth rate than those that don't](https://www.dropbox.com/s/z53b24ad87cmv2p/11%20-%20WLG.png?dl=0), regardless of stage.