The Ultimate Guide to ARR

Our first book captures decades of experience standing up ARR reporting at the likes of Intercom and Atlassian. It's a free masterclass in Annual Recurring Revenue.

The Ultimate Guide to ARR is our first book. It's a practical guide for finance and data professionals at early-stage SaaS companies to excel in measuring, reporting on, and (hopefully) growing Annual Recurring Revenue. Below is a preview of what to expect when it hits digital bookshelves next week.

This book is dedicated to all the first finance and data hires.
And all the friends of finance too. May the ARR be with you.
- Bobby and Chris

Genesis

I first met Eoghan McCabe and Mamoon Hamid back in 2013. I was 25 years young and only three years into my career, but I was raring to help build up an early-stage company. In hindsight, I had no idea what I was getting myself into. 

Intercom—the company Eoghan was CEO and co-founder of—needed help. Just 18 people strong, they’d just raised an exciting Series A from Social Capital, and one of the biggest name investors in the Valley, Mamoon Hamid, had joined the board. As the story goes, Eoghan showed up to that first board meeting with a deck highlighting the product—what’d gone well, what needed to be fixed, and their roadmap. He only covered the product.

Intercom’s founders were product visionaries, and the company quickly became one of the shining examples of what it is like to build a product-first company. Arguably, Intercom was one of the first examples of PLG (product-led growth) in SaaS. Yet, something critical was missing from that board meeting. How was the business doing? What was working? What wasn’t? Where was the business pointed? 

Enter me, the first finance hire. I was brought in to align the company and investors on the story of the business. I had no idea where to start, and few resources existed to point me in the right direction. But I knew the foundational questions we needed to answer were deeply rooted in what was happening with Annual Recurring Revenue – commonly referred to as ARR.

We needed to explain how and why we were growing, uncover opportunities to grow faster, and clearly articulate where we might ultimately end up. It was clear that if we could nail ARR reporting, all the answers would flow from there.

So began an almost 8-year journey marked full of learnings, massive wins, and a lot of mistakes–many of them avoidable. We had transformed Intercom from a <$1M ARR startup to a $150M+ ARR juggernaut by the time I left. 

Looking back, I wish this book had been sitting on my desk waiting for me on my first day at Intercom. It’s co-written by

Chris Burgner

, who joined me on the Finance team at Intercom and now runs Finance at Equals, where he’s also built all of our ARR reporting from scratch. Chris also cleaned up many of the messes I made at Intercom as we scaled. Together, we’ve written a practical guide with a clear set of steps to enable you to set up industry-best ARR reporting, minus all the mistakes we made (the hard way). 

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Introduction

Over the last decade, we’ve seen an explosion in subscription-based businesses–from music to TV and even food delivery. We’ve seen the rise of self-serve and PLG as a motion for selling software. And we’ve seen the proliferation of Stripe, ETL, and data warehousing tools to support it all. Yet, after many attempts by startup after startup, ARR reporting is still a f****ing nightmare. Pardon the language, but it’s how most people who’ve had to deal with it describe it.

Talk to any startup finance hire, and you’ll hear the same story. They spend the first several months on the job cobbling ARR together and then spend years holding it together in a brittle system that needs a never-ending supply of duct tape as the company scales. 

Out-of-the-box solutions that sit on top of your billing data don’t work either. They fail for a variety of reasons, including:

1. They’re too rigid to generate the reporting your business needs–weak.

2. They require you to adapt your systems to fit their reporting–lame.

3. Changes you make to your business break everything–frustrating.

It sounds painful because it is painful.

Of course, you can BYO (bring build your own). We prefer the get-it-all-into-a-data-warehouse-and-transform approach, but it's really hard if you’ve never done it before. While finance teams own ARR reporting, many don’t know SQL and have no idea how to structure a table, let alone set up a resilient system. It’s a recipe for a hot mess. 

This book will help you avoid making that mess yourself. It’s written for the first finance or data hires at early-stage SaaS companies. The people who know why ARR reporting is so fundamental but need to learn what great looks like. People who want to adopt best practices for setting up systems so reporting on ARR is easy, scalable, and resilient to changes in their business. It’s also valuable reading for anyone inheriting that existing mess of ARR reporting. Godspeed. Finally, for founders and CEOs, this book makes a great gift for your friends in finance. Leave a copy waiting for them on their desk (or email inbox). Heck, you might even want to read it before their first day. 😉