Churn rates vary by ACV
Why do companies start below the mid-market?
Innovators Dilemma. New distribution mechanisms create ways of scalably acquiring customers that aren’t possible for the incumbents.
Why do SaaS companies always seem to move up market?
-
Churn rates higher with smaller ACVs. Greater revenue = higher replacement costs.
-
Sales teams scale. 10 guys at $125k each generating $500k in annual ARR for 5M or 3 guys as $350k each generating $2M ARR.