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B2B> B2C
B2C SaaS is limited to Individuals plans. The ability to offer Team plans is a major advantage of B2B SaaS.
- With only ~50% per year retention, these B2C SaaS businesses are effectively an arbitrage on marketing CAC (customer acquisition cost). There’s no long-term business.
- Netflix and Peloton are the exception as they have unique retention strategies.
- Individual plans are a good business only when retention is unusually high (e.g. churn under 2% per month)
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Teams > Individuals in SaaS businesses
SaaS companies make disproportionately more money with Team plans:
- Deal Sizes are bigger
- Retention is so much better. Once a team is collaborating in a product, no single user can easily make the decision to leave
- Seat Expansion...
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165 reads
CURATED FROM
Individuals or Teams: Who’s the Better Customer for SaaS Products?
sacks.substack.com
2 ideas
·301 reads
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Life-long learner. Passionate about leadership, entrepreneurship, philosophy, Buddhism & SF. Founder @deepstash.
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