Usage-based pricing (aka consumption-based pricing) is a popular pricing strategy, especially among developer-focused startups. Amazon AWS, Twilio, and Datadog are three great examples of this model.

Companies with usage-based pricing. Source: Kyle Poyar at TechCrunch

Usage-based pricing is popular because it is a win-win for both sides: the customer avoids committing to a large purchase that may or may not work, while the product can have quick lands and real expands.

If usage-based pricing is good enough for AWS, Snowflake, and Stripe, should you adopt it as well? It depends. In this post, I share a framework for deciding whether you should use usage-based pricing.

This framework is based…


Net revenue retention (“NRR”) is the most important SaaS metric. It measures the year-over-year growth in ARR from existing customers; after accounting for churn, downgrades, and upgrades.

An NRR of 120% means ARR from existing customers grew by 20%. NRR is a built-in growth engine. For instance, Snowflake IPO’d at $500m in ARR. With an NRR of 158%, Snowflake could double to $1b in ARR in a little over a year, without adding a single new customer! This power of compounding is why NRR is the most important SaaS metric.

Despite its importance, NRR is a difficult metric to improve…


This post is part of a series in which I extract patterns from a data set of thirty-nine SaaS companies that filed for IPO from 2018 to 2020. The previous discussions in this series are:

  1. Pricing & Packaging and the developer buyer — 4 insights from SaaS IPOs
  2. Benchmarks for Key SaaS metrics from SaaS IPOs of 2018–2020

Last time, in the pricing & packaging discussion, I discussed the least friction package (“LFP”).

What is the least friction package? Companies offer three archetypes of packages: free, trial, and sales demo. Naturally, a customer experiences the least friction in evaluating the…


In the three years spanning 2018–2020, at least thirty-nine¹ SaaS companies filed for IPO. They form a healthy dataset to create benchmarks for startups that are early on their journey.

I use the average contract value (“ACV”) as the framework for extracting insights from this dataset. The ACV cohorts I use are:

  1. X-small: ACV < $10k, e.g. Dropbox, Slack, and Zoom. 13 companies
  2. Small: $10k <= ACV < $50k, e.g. Datadog, PagerDuty, and ZoomInfo. 12 companies.
  3. Medium: $50k <= ACV < $100k, e.g. Fastly, Sumo Logic, and ZScaler. 6 companies.
  4. Large: $100k <= ACV < $1m, e.g. Anaplan, Medallia, and…

Alex Clayton assembles end of year reviews for SaaS IPOs of the year. You can read his reviews for 2018, 2019, and 2020 here. I feel grateful to Alex for his efforts; his reviews and S-1 breakdowns provide valuable benchmarks for founders.

In this post, I build on top of Alex’s reviews from 2018–20. He reviews thirty-nine¹ SaaS companies that went public in these years, a healthy dataset to learn from. These companies have a broad spectrum of go-to-market strategies and resulting price points; from the bottom-up and self-serve motion of Dropbox with an average contract value (“ACV”)of $111 to…


I recently got an email from DocuSign with the subject: “How e-signatures are safer than wet signatures”. It made me wonder, why would DocuSign send such an email? E-signatures are ubiquitous; from job offers to house purchases, we e-sign most of our contracts. Doesn’t everyone believe that e-signatures are safer than wet signatures?

For context, DocuSign is the largest company in the e-signature market. It’s so dominant that its name is a verb. Its market cap is in the range of General Motors, the largest car company in America. In other words, DocuSign is winning.

So, why bother sending an…

Adil Aijaz

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store