ICONIQ Growth Report: State of Go-To-Market in 2024
ICONIQ Capital just published their latest Go-To-Market report that provides valuable insight to Chief Revenue Officers and anyone on a revenue leadership role in B2B SaaS.
The report includes responses from 150 B2B SaaS companies, many but not all from within the ICONIQ Capital portfolio.
Location: 88% have the majority of their employees in the US, 12% outside the US
Sales motion: top down 38%, hybrid 53%, bottom up 9%
ARR scale: equal across <$25m, $25-$100m, $100m-$250m, >$250m
Sector: infrastructure 22%, horizontal SaaS 37%, vertical SaaS 30%, Fintech 11%
That is to say, the survey is broad and not a reflection of one sub-sector of SaaS.
I recommend you read the full report from ICONIQ Capital’s site, but here are a few charts that jumped out to me.
Top line ARR growth decelerated
With a challenging market companies at all revenue stages have seen ARR growth decelerate.
As expected this is most pronounced in the <$25m ARR bracket where companies striving to find go-to-market fit and stay close to the T2D3 model find this goal harder to achieve.
Net Dollar Retention continues to slide
One of the key valuation drivers for B2B SaaS businesses is that every dollar of new business you acquire ‘will’ continue to grow over time as customers expand their usage.
That assumption is being tested right now, with companies in the $25-$100m and $100-$250m brackets showing flat 100% Net Dollar Retention (no growth no churn)
Fewer AEs achieve quota
Companies have tried to balance their sales hiring (and layoffs) to match the current pipeline and revenue numbers, but still the percentage of AEs achieving quota continues to fall.
Across all ARR brackets, little more than 50% of AEs are achieving their quota - which affects morale, voluntary attrition and the experience that customers receive.
Pipeline coverage stays flat at 3.9%
In order to achieve their quota AEs need a healthy pipeline coverage, and this remains at the same 3.9x figure from the 2023 report.
Given that the pipeline coverage stayed the same, but percentage of AEs achieving quota has fallen, we can draw that generating more pipeline of a higher quality must be a focus for revenue leaders for H2.
Funnel metrics show improvement
Probably my favourite graphic in the report, this helps you to see how others are viewing their pipeline metrics.
In the >$100m ARR bracket it is consistent through the funnel, 25% from new lead to MQL, of those 25% move to SQL, of those 25% move to closed won.
1000 new leads becomes 250 MQLs
250 MQLs becomes 62 SQLs
62 SQLs becomes 15 closed won deals
Some improvements are being seen in the <$100m bracket - fairly flat in the upper segments.
AEs primarily comped on signing new customers
And the final chart I’ll call out looks at how AEs are being compensated. Nothing surprising here - the primary metric is on winning new revenue and extending that ARR out into future years with multi-year contracts.
ICONIQ call out the 7% rise in AEs being comped on Net Dollar Retention (ie do the accounts AEs sign grow in future years). This metric aligns the funnel incentivising AEs to sign good business not just any business.
How to use this report?
Download the report and walk through it with your fellow leaders.
Are there any standout metrics that conflict with your own?
Why do you think that is?
What data are you missing from your own go-to-market function?
What three actions would you take based on what you learn in the report?
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