The Optimal Average Customer Value for SaaS Startups


This post is by Tomasz Tunguz from Tomasz Tunguz


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What should the optimal revenue per customer be for a SaaS company? I could say million dollar contracts typical of enterprise sales provide more long-term stability and total revenue opportunity. On the other hand I might contend larger customer bases paying smaller license fees enable more predictable growth. Which is the correct argument? First, lets examine the relationship between average customer value and total revenues, to see if smaller customers create a glass ceiling for total revenue.

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