Grow your ARR faster
When you can see the "diffs" in your business, growth opportunities are aplenty.
If you’re an engineer, you’ll be familiar with the concept of a diff. For everyone else, a diff is a helpful way to make clear what’s changed in something–like edits to a doc.
Diffs are great because they guide where attention is needed–where you need to spend time. No modern SaaS company ships code without reviewing every diff.
What do diffs have to do with ARR?
Reporting is how you see the “diffs” in your business.
Your SaaS business is constantly changing. You’re shipping new features. Launching new products. Posting content that attracts new audiences. Redesigning your entire marketing site. Experimenting with pricing. The list goes on…
With this constant stream of changes, great reporting gives you visibility into their efficacy. Like a diff, it surfaces what’s working and what’s not–telling you where to spend time.
Yet most SaaS companies don’t have great reporting.
Founders are flying blind. They’re guessing. And it scares the shit out of me.
This is why we started Equals. I can’t help but think of the potential, the “holy-shit-could-you-imagine-how-much-faster-you-could-grow if you could get a deeper understanding of how your business works?”
They don’t have great reporting because of a lack of investment. It’s simply that most don’t know what great reporting looks like, what it unlocks, or how to achieve it.
As a result, they either have nothing or just the basics in place.
Taking the first step towards great reporting
I joined Intercom as the first finance and analytics hire in 2013. At the time, the company had 20 employees and just under $1M in ARR.
There was reporting in place. The CTO had set up a pretty robust Chartio dashboard that had our ARR, signups, churn, etc. Everybody had access to it, and most looked at it regularly. There were metrics, and they were correct. It worked. It wasn’t “broken” by any means. Looking across the many other startups I work with these days, what Intercom had was pretty good.
Yet within those high-level metrics was buried a treasure trove of insights waiting to be unlocked. But most folks misunderstand “unlocking insights.” It’s not about hiring data scientists to build propensity models or do correlation studies. It’s about expanding the framework by which you look into the business. It’s taking those core metrics—ARR, signups, engagement—and breaking them into their next level of granularity. It’s about increasing the fidelity with which you understand and view them.
This did a few things for us.
It changed the pace at which we worked across the company, increasing visibility and accountability. We achieved that with our “Daily Pulse.”
Our ability to “diff” the business (daily) led to confidence in experimentation. Which led to an experiment that doubled signups overnight.
The framework is simple. It’s what we offer in building ARR reporting solutions for customers. We take ARR and break it into its component parts, allowing you to see the drivers of each. Then, we make it dead easy to look at daily. We want you to obsess over it. This framework got us from $1M to $100M in 5 years at Intercom.
Our board discussions improved as we became more confident in the measures we had across the business. We were able to present the state of the business more accurately and spend more time discussing strategic moves to make—not “what’s happening.”
Finally, when we went out to raise money, a big selling point investors cited in getting excited about us was how well we understood our business and how sharp our reporting was. We stood out, and it made fundraising easy.
Unlocking growth with granularity
With the proper foundation and reporting rituals in place, you’ll start to see the real benefit of a deep understanding of the components parts that make up your ARR. To give you yet another real, tangible example from Intercom, the insights we unlocked into the business's expansion, churn, and contraction dynamics led to a change that dramatically improved retention amongst a strategic segment of customers.
Thanks to great reporting, we discovered that churn was becoming a bigger problem amongst our smallest customers. This was the original segment of the market Intercom had been built for–one that we believed was critical to our future growth. This insight led us to introduce an exclusive pricing “program” for this segment. We called it Intercom for Early Stage. Eligible companies got access to all Intercom’s products for a flat rate of $49 a month for up to one year. It was an absolute steal.
Naturally, we thought Early Stage would break even at best. But we were (pleasantly) surprised. Retention among eligible customers increased so much that it was net positive. It was a classic win/win situation—a real smash hit.
And here’s the thing: without great reporting, we:
May not have discovered the churn dynamic until it was too late to course-correct.
Would not have had the level of granularity needed to determine that despite a significant reduction in initial New ARR, Total ARR would actually grow.
Without great reporting, we’d never have seen those critical diffs.
We can help find your diffs
Inspired by the framework we used at Intercom, we take the basic ARR reporting you have today and give you truly great ARR reporting. Most importantly, we custom-fit it to your business because, in our experience, that’s the only way it actually works. You can trust us, like some of the fastest-growing startups in the world, including Notion, Descript, Oso and others, already have.
If any of that sounds good to you, please reach out. We’re ready and waiting to help.