Why is growth important?
Posted: Thu Feb 06, 2025 6:42 am
We recommend that once a business has shown that it can succeed, it should invest aggressively to increase its growth rate. You might ask: Why?
SaaS is generally a "winner takes all" game, so it's important to capture market share as quickly as possible to ensure you are the winner in your space. Wall Street, buyout firms, and venture capitalists will all reward higher growth with higher valuations if you can tell a story that shows growth will eventually lead to profitability. Market leaders in specific areas also command a premium.
However, not all investments make sense. In the next cameroon mobile database section, we’ll look at a tool to help you ensure your growth plansinvestments pay off: unit economics.
A powerful tool: unit economics
Because of early losses, which grow larger the more successful a company is in acquiring customers, it becomes harder for management and investors to determine whether a SaaS business is financially viable. We need some tools to help us figure this out.
A good way to understand any business model is to answer these simple questions:
Can I make more profit from a customer than I did from acquiring him?
This is actually a study of the unit economics of each customer. To answer this question, we need two metrics.
SaaS is generally a "winner takes all" game, so it's important to capture market share as quickly as possible to ensure you are the winner in your space. Wall Street, buyout firms, and venture capitalists will all reward higher growth with higher valuations if you can tell a story that shows growth will eventually lead to profitability. Market leaders in specific areas also command a premium.
However, not all investments make sense. In the next cameroon mobile database section, we’ll look at a tool to help you ensure your growth plansinvestments pay off: unit economics.
A powerful tool: unit economics
Because of early losses, which grow larger the more successful a company is in acquiring customers, it becomes harder for management and investors to determine whether a SaaS business is financially viable. We need some tools to help us figure this out.
A good way to understand any business model is to answer these simple questions:
Can I make more profit from a customer than I did from acquiring him?
This is actually a study of the unit economics of each customer. To answer this question, we need two metrics.