Great list of B2B GTM metrics

Recently, Martin Casado from Andreessen Horowitz summarized his 11 key GTM metrics for B2B businesses.

He starts with CARR (contracted annual recurring revenue) which is the single best metric for the health of the business.  This forward-looking metric leads to recognized recurring revenue and assuming a high retention rate can look like an annuity.  Frequently, the question is "if you sold nothing else this year what would your revenue be?" 

One key assumption behind CARR is that the contract lengths should be one year or more in duration.   Many times folks will multiple CMRR (contract monthly recurring revenue) by 12 to obtain a CARR but this can be misleading.   In the B2B enterprise world CARR is predominately used.

Martin's 4th and 5th metrics are Net Dollar Retention and Gross Dollar Retention.  Both are important and just getting one or the other of the metrics can obfuscate what is really happening with the business.  The measurement of retention is one of the biggest areas of creativity in the public SaaS company world.   An illustrative note about public saas companies' disclosure of retention and renewal metrics on this was published by KeyBanc. 

Martin's 8th metric CAC Payback has some variability across businesses.   Sometimes companies use new ARR vs. net new ARR.   Also, if there is a meaningful professional services component to revenue, sometimes companies subtract the one time GP of services from the S&M costs.

I think Martin's key metrics are a great set to standardize on.   Even if the definitions are slightly different, having a consistent set of metrics will show the trends in the business.   Most importantly, the right metrics are those you will run your business with and will help articulate the power of your business model to investors.
 

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