Let's have an honest conversation about SaaS in 2025. It's a highly saturated market with fierce competition, and everyone is yelling the same things about how their AI is the better than the competition. Many companies are seeing growth begin to stall while others seem to keep scaling sustainably.

This divide exists even in mature SaaS companies, as many are facing an enormous pressure to innovate to stay relevant in a rapidly evolving environment, grow users and revenue while also maintaining profitability to demonstrate the Rule of 40 for investors. 

At one point or another, every SaaS company has experienced stalling growth and has felt its painful consequences:

• At $100M ARR: Enterprise deals become harder to close, sales cycles lengthen, and the pressure to expand internationally intensifies while competing with well-funded giants
• At $10M ARR: Finding product-market fit in new verticals becomes challenging, hiring top talent gets expensive, and operational inefficiencies start showing their true cost
• At $100k MRR: Early product-market fit starts to plateau, customer acquisition costs rise significantly, and keeping up with feature requests while maintaining quality becomes a delicate balance

In this world of hyper competition, stalling growth can be the nail in the coffin-- eventually stalling growth turns into steady and then a rapid decline in market share and revenue.

Keeping an eye on when your SaaS will plateau and avoiding stalling growth is always preferred. But what do you do if you've already found yourself in a plateau?

In this article, we’ll explain how to scale a SaaS company sustainably. We'll explore holistic growth and retention strategies via business development, customer success, team building, and then share how data can be leveraged to drive impact. 

Read on for actionable tips tailored to the unique challenges and opportunities SaaS companies face in 2025 and beyond! 

The 4 Largest Points of Friction Slowing Your Growth

In physics we learn that without gravity, an object in motion will stay in motion into perpetuity. It is only because of friction between the object in motion and the surface it is traveling on that causes the object to come to a complete stop eventually. In order to continue traveling at the same speed, you need continued force: the combustion of gasoline in the engine of a car, for example.

Extending this metaphor to your SaaS: the friction that keeps your SaaS from continuing to grow at the same rate over time include 1) infrastructure, 2) churn, 3) market competition and 4) evolving customer needs.

Addressing these challenges early is vital to prevent growth stalling and scale successfully. 

1. Infrastructure

As more and more users adopt your product, your SaaS will require increased infrastructure and resources to support all your users without compromising performance. 

This can be both expensive and complicated. 

When building out your tech stack, it’s important to consider future growth—even if you’re still small today.

Some teams prioritize new features too quickly, which can lead to growing tech debt that may require more computational resources than necessary. 

It’s essential to regularly take a pause to review your architecture and optimize computational resources.

One benefit of adopting cloud infrastructure is that you can implementing automation tools to scale your infrastructure when you need it in an instant. 

Infrastructure is never sexy to talk about-- but it is key, which is why we put it first. By addressing these factors early, you can ensure your infrastructure grows seamlessly with your business.

Okay, now let's get on with the other friction points.

2. Churn

What makes a SaaS business special is the recurring nature of its revenue.

The best SaaS products solve a very painful aspect of their users' business or personal lives, and they're willing to continue to pay for your product to address that pain.

If 100% of your existing users continue to pay for your product, each new sale is incremental, and your growth begins to look like an exponential curve.

Churn suggests your solution isn't solving the user's pain in the way they expected it would.

If left unchecked, at some point the number of users that churn from your SaaS will become equal to the number of new users that adopt your product, and your growth will completely flatline.

Because of this, it is incredibly important to understand who your customers are and why they choose to leave, so that you can get in front of churn early.

Regularly talk to your customers, get feedback and offer personalized support in the early months of onboarding to ensure smooth adoption. 

Another explanation for churn could be that your competitors are solving user's pain better than you. Let's talk about that next.

3. Market Competition

It is expected that by the end of 2025, there will be around 72,000 SaaS companies operating globally, more than 2x from 2024.

This level of increasing competition means that SaaS companies need to work extra hard to build an amazing product with strong product-market fit to be the reason for customers to choose your SaaS.

Finding product-market fit may mean niching down into a specific industry or market and delivering extremely well-tailored products and features that those specific customers love.

Having an amazing support experience is a great way to differentiate yourself from competitors as well.

And because your customer is at the center of it all, let's focus on their needs.

4. Evolving Customer Needs

Nothing stays the same forever. Your customers are no different.

With changing expectations with AI and other new technologies, your customers will have new expectations from your SaaS over time.

If they are using AI copilots in all their other tools, but your tool doesn't offer a copilot, they may begin to see your product as insufficient, even if it continues to do what they expected from it the past 2 years.

This is another reason to have some line of communication with your customers. Allow your Customer Success team to collect feature requests, escalate complaints, and feel like they have a voice at the table in building your product.

And then actually prioritize your customer's evolving needs.

Maintain Your Engine: 4 Key Elements to Continue to Scale

The foundation on which you grow your SaaS will be the engine that will allow you to travel the distance.

If you want a guarantee of getting from where you are today to point B in the future, you need to keep your engine well oiled.

Take each of these 4 elements into consideration as you maintain your engine as you grow.

1. Data Infrastructure

As your SaaS grows, it becomes a challenge to stay on top of every aspect of your Go to Market strategy: marketing, sales, customer success.

This may sound surprising at first, since data infrastructure does not directly add value to the product or users, and can be an expensive investment to make early on.

But having access to the granular interactions your customers have across your GTM funnel is incredibly valuable to every layer of an organization.

Data are the dots, that when connected, tell you the whole story across everything you do:

• Who your best customers are
• What marketing campaigns are resonating most strongly to your best customer
• What products and features your best customers are using the most
• Which of your best customers are at risk of churning

Having access to this information allows you and your teams to fine-tune your GTM strategy, improve product-market fit, mitigate churn and ultimately grow faster.

2. Pricing

Pricing is one of your biggest growth levers in SaaS.

And yet most SaaS products on the market are underpriced.

The cost of underpricing a SaaS is huge. Beyond generating less revenue, underpricing SaaS has two hidden consequences:

1. A price below $100/month makes certain marketing and sales channels not worthwhile, including paid ads, trade shows and even cold calling.
2. Low prices (including free and freemium plans) attract a customer that may not be the right fit. They come with both high demands and likely high churn and can easily distract you from your best customers.

Pricing can also be ingeniously engineered to scale with the value your SaaS provides to your customers. Customers would be happy to pay you more for more value they receive over time, effectively offsetting revenue "lost" from other customers churning.

When such expansion revenue exceeds churn, you would have achieved net-negative churn. SaaS companies that grow with net-negative churn grow at truly exponential rates.

3. Go-to-Market

Did you know that 40% of marketing spend is wasted and a third of sales-people are not pulling their weight?

Examples of a low efficiency GTM:

• Marketing that prioritizes impressions and clicks, but not conversions and ROAS
• Campaigns that used to do well but keep running after they have gotten stale
• Sales focused on the “easy customers to sell” instead of the best fit customers that have the highest lifetime value

GTM is one of the most essential areas to have a robust data infrastructure, especially for SaaS companies that have tens of thousands of customers and hundreds of thousands of web visitors.

Only by understanding your visitors and customers can you fine tune the engine and optimize for efficiency.

4. Operations

As Marshall Goldsmith said perfectly, “what got you here won’t get you there.”

As your SaaS grows, so does your processes need to evolve.

Having a regular pulse check on your teams and internal processes will go a long way to ensure enduring success, through both good times and rough patches.

Get the leadership team in a room every quarter to set goals that need to get done by quarter end.

Create a scorecard for every team in the organization, and keep teams accountable on those goals every week.

Be sure to incentivize the right behavior and celebrate wins to foster teamwork and positive morale.

Push your teams to continuously innovate on how processes can be optimized to save time and improve the customer experience.

The level of management experience is the major differentiator that separates the strong companies that get to $1B+ valuation from the rest.

10 Actionable Tips to Scale Your SaaS Sustainably in 2025

Now that we’ve discussed the fundamentals of SaaS growth, let’s discuss actional steps you can take today to avoid the trap of stalling growth and fuel more exponential scalability.

1. Own Your Data

Did you know 90% of data that exists today was created in the last 2 years?

Every piece of software you use to build and operate your SaaS captures a wealth of information from your customers, core business functions and internal teams.

Every piece of software also has its own reporting tool that is useful for answering simple questions.

But if you don’t have a robust data infrastructure that stores and manages this information, you don’t actually own your data, and you won’t have the ability to harness the true value from it.

When we say data infrastructure, we mean the following components:

1. Data warehouse: a central hub that stores data from a variety of software and internal databases. Examples of a data warehouse include BigQuery and Snowflake.
2. ETL tool: a tool to extract data from external sources, transforms it for data cleaning, and loads it into a data warehouse. Examples of ETL tools include Fivetran and Airbyte.
3. Business Intelligence: the visualization component of data analytics that allows Data Engineers to produce automated dashboards and scorecards for business leaders and functional teams. Examples of business intelligence tools include Tableau and Google Looker.
4. Analytics projects: the hub where your Business Analysts work out of to perform adhoc analytics to solve key business challenges, and translates those into real business impact. Examples of analytic project tools include Hex and Jupyter notebooks.
5. Machine Learning projects: the hubs where Data Scientists build, test and maintain Machine Learning models, both for analytics and production deployment. Examples of Machine Learning tools include Databricks and SAS.
6. Anomaly Detection tools: the tools used to proactively detect unusual trends of KPI’s across the organization, so that business teams can respond immediately to them. An example of anomaly detection tool includes Anamalo.

This type of data infrastructure can be expensive to setup, but it doesn’t have to be.

The rest of this article will provide actionable tips to scale your SaaS sustainably. In each one of these tips, we’ll demonstrate how data and which of these tools proves useful in supporting these actions.

2. Identify Your Best Customer and Create a Persona for them

It’s crucial that SaaS companies truly understand who they are serving: who is the end user, their companies, and their pain points.

If you dig deep enough, you will likely find recurring themes in these best customer types.

The more you know about your customers, the more accurately you can label them:

1. Demographics: age, gender, education level
2. Firmographic: industry, number of employees, revenue, tech stack
3. Behavioral: login frequency, top features used, API usage levels
4. Geographic: region, local regulations, cultural preferences
5. Goals: primary use case, key challenges, success metrics, budget
6. Acquisition Journey: marketing channel, sales cycle length, price sensitivity
7. Customer Relationship: lifetime value, satisfaction, feature request

To accomplish this, work with your data science team to perform an extensive clustering deep dive. In this process, this team can collect as much data as is available for all of your existing customers. (Note: the more information you can collect from your customers from the start, the more effective this will be.)

Once the clusters are created (usually 3-5 clusters), they can be analyzed and validated with the Customer Success and Product teams. They can also help put together the personas for each based on the labels that are most strongly represented in each cluster.

If done correctly, you will find a cluster that has the highest lifetime value—these are your best customers. They get the most value from your SaaS and are most likely to advocate and evangelize your product.

You will also find a cluster that will not value your product to pay for it (in case of freemium) or stick around (high churn rate). These customers will likely show up in higher numbers and are a distraction.

Having created these personas, you can now go back to your GTM and evaluate which marketing and sales campaigns are driving the best-fit customers, and which campaigns should be halted immediately.

It also becomes a lot more reliable to predict the next 12 months of cashflows based on new customers that sign up this month.

How data can help: A clustering exercise is intrinsically data heavy. Before building a model, data needs to be cleaned and pre-processed with ETL tools, then stored in a Data Warehouse, so that it can be used to build the model using a Machine Learning tool. Once it’s built, the model needs to be productionized so that it can score new customer signups into their appropriate cluster on a daily basis. The output of the scoring needs to be saved back to the Data Warehouse for the purposes of analytics and dashboarding in Business Intelligence tools.

See a previous post where covered customer segmentation with a more visual example.

3. Tailor Your Product Roadmap to Your Best Customer

Having a deeper understanding of who your best customer is, you now have a narrower lens to focus on.

What features do these customers use the most, and what are they asking for the most.

If you want even more information, we would strongly recommend reaching out to 20 of your best customers and collecting as much feedback as possible.

Is your current product roadmap aligned with the priorities of these customers? If not, make the changes to ensure these customers’ needs are met in the future.

For example, if these customers are all telling you they want to be able to automate a recurring task using an AI copilot in your app, you can build this directly in the product for them.

Simultaneously, make sure all messaging and positioning on your website and ads are aligned with the product and use cases that your best customer is using your product for.

In some cases, this could be a real pivot in another direction.

While it may seem drastic, this is simply the process of discovering product-market fit.

How data can help: We can first identify our best fit customer in our Data Warehouse from our productionized model. By capturing your customers feedback in a survey tool, it can then be classified either by using Natural Language Processing or setting a prompt in a Large Language Model. This type of classification will categorize and tag the customer’s feedback into similar themes, or groupings, that can then be easier for product teams to synthesize and consume.

4. Update Your Pricing Model and Pricing to Maximize Revenue and Fuel Growth

You might come to realize that your best fit customer is getting a great deal for the value they are receiving.

If this is the case, you have just found an opportunity to update your pricing model in a way that will work with you and your growth potential.

Do realize that a change to your pricing model is going to upset some users, and some users will churn because of it.

However, if you can make a pricing change that delivers an immediate 20% increase in net revenue increased, then it is worth it.

Better yet, the customers who choose to stick around will disproportionately be your best customers, so while you will lose customers, you will also increase the focus on the customers that matter the most.

This makes it easier to continue to build features for your best customers.

Here are some popular value-based pricing models to choose from:

1. Tiered Pricing: create feature flags for more valuable features and put them in higher priced plans. The power users who need those features will be willing to pay more for them
2. Per-User Pricing: set a price for each user who can login to the app. While straightforward, this is best used when there is a different experience that each user will access when they login to their account. Otherwise, many customers will tend to create one account and share login to their teams.
3. Usage-Based Pricing: determine an action that is tied to value received by the customer, and scale pricing with the number of actions the customer performs. For example, email providers scale pricing with the number of emails sent per month and Zapier charges by the number of zaps made per month.

The model you choose depends on the nature of your product and how your best customers use your product, and how they would prefer to pay.

If you’re nervous about how a new pricing model will affect existing customers, you can simply roll it out to all new customers first. If the conversion performance and feedback from new customers is positive, then you can confidently roll it out to all existing customers as well. Just be sure to give them adequate heads up-–3-6 months—to avoid surprises.

How data can help: By joining data from CRM, billing and a backend database into the Data Warehouse, one can quickly identify what the best-fit customers are paying and how long they’ve been on the platform, as well as how often they are using specific features on the platform. This would allow an analyst to quickly create scenarios of different pricing models and what the net impact on revenue would be as a function of churn and increased revenue in each model.

5. Competitive Analysis

In a world where technology is constantly evolving, it is important to be sure you are staying ahead of the curve.

Incentivize your product teams to perform market research consistently to identify growth opportunities and potential threats in your space.

Market research may not only tell you where the competition is moving, but it could also reveal where there are emerging gaps in the market that you can fill!

This should be paired with regular customer interviews with your best fit customers.

Remember, they are also doing their own version of competition analysis for you. If they’re loyal to you, they will likely not jump ship to another product that has a feature they want. Instead, they will make this request from you.

Requests from your best customers are one of the best ways to learn what’s new and what would be valuable to add in your product offering.

Other potential sources of valuable research on your competitors:

1. Product pages
2. Pricing pages
3. Review sites like Capterra and G2

How data can help: Competitive analysis and customer research provides some of the messiest data there is. Typically, a product team would have to read through pages and surveys line by line. This is incredibly time consuming and difficult to synthesize. Thanks to Large Language Models, this process can be mostly automated. Competitive data can be captured with web scraping and joined with survey responses. A Machine Learning or Analytical platform can run a LLM prompt to classify this data into categories to help reveal recurring themes.

6. “Slow” Marketing

SaaS that relies too heavily on “Fast” Marketing, marketing channels that have a quick turnaround to results, like paid ads or manual outreach are stuck in a tricky position.

Scaling with “Fast” Marketing usually means spending a lot more money and resources.

The alternative would be to invest in “Slow” Marketing—marketing channels that are much slower to turnaround value but are significantly more scalable.

These include Content Marketing, SEO and Email Marketing.

Content Marketing, combined with search engine optimization (SEO), drives organic traffic to your website.

SEO is the process of optimizing your content for search such that it lands high up on results pages to generate high traffic from search engines like Google and Bing.

This means that users who search for keywords that are relevant to your SaaS product will more likely be able to find your SaaS organically.

Content Marketing allows you to generate valuable content that educates your potential customers. It helps build brand equity and credibility, and these visitors may even choose to sign up for your email list, schedule a demo, or sign up directly.

You can then continue to nurture these prospects via valuable content and nurture campaigns via email. For those who don’t sign up, you can set up tracking and run retargeting campaigns to bring them back to your website.

Here are some best practices to create SEO content that resonates with the best prospects:

1. Understand who your best fit customer is, and tailor your content to those customers. This will help attract prospects who you expect will become your best fit customer.
2. Perform keyword research using tools such as Ahrefs and SEMrush to find relevant keywords and phrases that your ideal prospects might be searching for.
3. Create high-quality content on a blog page in your website that provides informative, engaging and valuable content. This should directly address your best customer’s needs and questions.
4. Optimize headings and metadata by incorporating targeted keywords in titles, headings and meta descriptions of any attached images to improve search visibility
5. Use internal and external links to create a map of links to relevant internal content and authoritative external sources to enhance credibility and SEO
6. Optimize for mobile to accommodate the 60% of web traffic that occurs on smartphones
7. Update content regularly to keep your content fresh and relevant as technology and use cases in your sector evolve over time
8. Monitor performance of your blog posts and engagement using analytics tools to see what resonates with your audience and adjust the type of content you produce accordingly. Metrics you could measure include # conversions, % conversion rate, average time spent, bounce rate, and # page views.

How data can help: After content is created, data engineering teams can leverage ETL and Business Intelligence to create automated dashboards to track key metrics for all content created, so that they can be evaluated on performance, and provide the feedback loop of what type of content works well for a company’s ideal customer profile. Anamoly detection can be set up to alert the team when a particular piece of content performs unexpectedly well or poorly, in order to prompt the content team to immediately dig further to understand and respond to the trend.

7. Ramp up Sales Slowly

It is tempting to want to hire more salespeople to get more sales.

Sounds intuitive, right?

Don’t do it yet.

Start by evaluating the performance of your existing sales team. Look at performance metrics like number of leads, number of sales qualified leads (SQL), Lead-to-SQL conversion rate, number of sales closed and won, Lead-to-Won conversion rate, total dollar value of sales won.

Then evaluate the total occupancy and performance of each salesperson. It’s possible that your sales team is not yet at full capacity. If this is the case, work with Marketing to ramp up resources to send more Leads to the pipeline.

Simultaneously, work with Sales leadership to find opportunities to streamline processes to save time, and open up more bandwidth for each Salesperson to take on more Leads per month.

Continue to push the Sales team on higher efficiency and higher sales closings—Sales people are inherently very competitive and can handle it!

Once it becomes clear that there are more Leads than the existing Sales team can handle, then (and only then!) should you consider hiring your next Salesperson.

Hire slowly and ensure new hires are onboarded fully and ramp up to the same performance level as the rest of the team. Then continue to iterate over time.

This keeps the energy and morale in the Sales team high. The worst thing you can do is hire too many Salespeople at once and suddenly your top performers don’t have enough pipeline to continue meeting goals.

As unintuitive as it sounds, hire your sales team slowly!

How data can help: With the help of ETL and Business Intelligence, the data engineering team can create automated dashboards to monitor key metrics for the entire Sales team. Anomaly detection can also be set up to alert leadership when Sales performance drops unexpectedly, which may require a deeper dive to understand the story behind the trend and respond appropriately.

8. Retention and Expansion

It is a lot easier (and cheaper) to upsell an existing customer than it is to acquire a new customer.

This cuts both ways.

Losing a customer is more costly than the cost to acquire a new customer.

So be sure to allocate sufficient resources to your Customer Success team to be there for your customers when they need help! This is especially true for onboarding and early adoption, where your engagement with customers as they start using your product is essential to complete adoption and support retention.

Your Customer Success team should be well staffed and fully cover the hours that your customers most often contact you for support. It is also important for this team to be sufficiently staffed so they can proactively reach out to customers, foster a community of collaborative support, and update the knowledge base according to product release timelines.

Once the Customer Success team can fully support the above tasks such that your SaaS has strong retention, you can expand their efforts to capture expansion revenue.

Here are some strategies to capture expansion revenue:

1. Upsell more advanced features in higher-tier plans that meet evolving customer needs, encouraging them to upgrade
2. Cross-sell complementary products or services that enhance the customer experience, which entrenches their company deeper into your product ecosystem
3. Loyalty programs offer incentives and rewards for long-term customers to strengthen their commitment and use your product more
4. Referral programs similarly offer incentives for your most loyal customers to evangelize your product to similar customers, thereby reducing your cost of acquisition

How data can help: A Data Scientist can build a Machine Learning model based on data on product usage trends, customer support contacts, and sentiment of those contacts to estimate the probability of that customer churning in the next 90 days. This model could run on a daily basis and feed a dashboard highlighting the highest value customers that are at highest risk of churn. The Customer Success team could use this dashboard to proactively reach out to these customers to understand their challenges and find opportunities to uniquely support them.

9. SaaS Partnerships

Sometimes it makes more sense to partner with another SaaS than to try to build out a new feature yourself. This all depends on the complexity of the feature requests you get, how many of your customers are requesting these features, and how much of an impact this feature would have on retention and acquisition.

Solving gaps with partnerships can often be the perfect solution to give you back the focus you need and simultaneously be mutually beneficial.

With the right partner, this can be a strategic alliance that allows you to tap into each other’s customer networks and open new channels for growth.

It can also build your credibility, improve your SEO search rankings, and lead to additional strategic partnerships that can further expand the growth flywheel.

10. Free Up Resources with Automation

If you are a leader in a SaaS company, you are probably also a tech power user.

Think about ways in which you can use workflows and automation to save time in your day-to-day and in the operations of the broader organization.

LLMs and AI play a key role in further bolstering automations. For example, instead of your sales team manually recording call notes and updating records in Salesforce or HubSpot, build an automated system where an AI voice recorder transcribes the notes, sends them to a custom AI agent in a N8N workflow that updates the corresponding records in your CRM.

This is useful for smaller teams with limited bandwidth to stay afloat, and even more so for larger companies that can scale without needing to hire as many people.

How data can help: A measurement of efficiency can be created for each employee in their function. A transparent dashboard can create a sense of competition amongst employees to perform at a higher level and further adopt automation tools to drive more value to the organization.

Closing Thoughts: Scaling Your SaaS in 2025 and How Go Fig Can Help

With all the advancements in technology, 2025 will prove to be an exciting year to scale a SaaS business.

While the market is saturated and highly competitive, there is also a huge opportunity to use new technologies to operate more efficiently and offer a uniquely valuable experience to your best-fit customers, moreso than your competitors can achieve.

To recap, here are the 10 actionable strategies to scale your SaaS:

1. Own Your Data
2. Identify Your Best Customer and Create a Persona for them
3. Tailor Your Product Roadmap to Your Best Customer
4. Update Your Pricing Model and Pricing to Maximize Revenue and Fuel Growth
5. Competitive Analysis
6. “Slow” Marketing
7. Ramp up Sales Slowly
8. Retention and Expansion
9. SaaS Partnerships
10. Free Up Resources with Automation

Ready to scale your SaaS better than the competition?

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Traditional data infrastructure can take up to 12 months and cost over $1 million to set up. Go Fig leverages technical industry insight, automated tools and a highly specialized team of Data Engineers and Data Scientists to complete build out of your Google BigQuery warehouse so your organization can get the information it needs to tackle the most pressing challenges affecting profitability and growth later this week.

Contact Go Fig today to learn how we can help transform your vision into a reality.

FAQs: Common Questions About Growing a SaaS Sustainably in 2025

How Do I Scale My SaaS Business in a Profitable Way?

Here’s how to scale a SaaS business in a profitable way.  To scale your SaaS business profitably, focus on automating key processes, optimizing your sales funnel, and increasing prices as an immediate opportunity. Invest in a robust data infrastructure that gives proactive alerts on KPIs, slow marketing tactics that scale more cheaply, and explore synergistic partnerships with other complementary SaaS brands. Prioritize an amazing customer support experience to minimize churn, capture expansion revenue via upselling and cross-selling, and tailor your product roadmap to your best-fit customer.

What is the 3-3-2-2-2 Rule of SaaS?

The 3-3-2-2-2 Rule of SaaS is a growth framework that suggests your business should triple in revenue for the first two years and then double each year for the next three years.  Specifically, grow 3x in years 1 and 2, then 2x in years 3, 4, and 5. This trajectory indicates a SaaS company has achieved product-market fit and is growing rapidly and in a sustainably way.

What is the Rule of 40 for SaaS Companies?

The Rule of 40 is a primary performance metric to measure the health of technology companies that balances growth and profitability.  The Rule of 40 states that the sum of a company’s revenue annual growth rate and profit margin should equal or exceed 40%.  For example, a company that grew 40% in the last year with a profit margin of 25% would be considered a healthy business with a cumulative sum of 65%. 

What is the 20-20 Rule for SaaS?

The 20-20 Rule is a benchmark for how a SaaS should prioritize growth and profitability. The 20-20 Rule suggests that a company should aim for at least 20% revenue growth and a 20% profit margin.  This balance indicates strong, sustainable performance, ensuring the company grows while maintaining healthy profitability.

How To Scale SaaS Sales Teams?

Before scaling your sales team, thoroughly analyze your existing team's performance metrics (including lead conversion rates and total sales value) and maximize their efficiency through process improvements and increased marketing support. Only consider hiring new salespeople when your current team is operating at full capacity and there are consistently more leads than they can handle. Use data engineering and BI tools to create automated dashboards and anomaly detection systems that help monitor sales performance and identify potential issues early.

What is the Growth Pattern of SaaS?

The growth pattern of SaaS typically follows an initial slow phase during product development and market fit, followed by rapid scaling as the business gains traction. Growth accelerates through customer acquisition, upselling, and market expansion. Eventually, growth stabilizes as the company matures, focusing on retention and sustainable profitability growth.

How Do SaaS Companies Get Leads?

SaaS companies generate leads through a combination of “fast” and “slow” marketing. It is best practice to implement a system of both fast and slow marketing solutions. While “fast” marketing solutions generate value more quickly, scaling them is incredibly expensive. “Slow” marketing solutions on the other hand take more time to return value, but scale more efficiently.

“Slow” Marketing Solutions:

• Content marketing
• SEO
• Social media
• Email marketing
• Free tools and ROI calculators
• Virality

“Fast” Marketing Solutions

• Referral programs
• Cold calling
• Paid advertising
• Partnerships
• Trade shows and in-person events 
• Public Relations, or PR
• Offline Ads