Dec 13, 2023 · 32m · saastr
15 Signs You Have A SaaS Metrics Problem (and How to Fix it) with Dave Kellogg
0:00 / 0:00
▶ Watch on YouTube →
gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions
SaaS expert Dave Kellogg details fifteen diagnostic warning signs of broken metrics systems and introduces a comprehensive five-layer maturity model to help organizations achieve operational transparency, alignment, and long-term strategic trajectory.
How this conversation actually went
Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. How this is scored →
Jason as informed peer 0.0 Guest teaching 0.0 Guest disagreement 1.8 Jason pushing back 0.0
speaking balance: gold is Jason, purple is the guest (3 minute bins)
Sharpest disagreement ▶ 21:25 Calling out deceptive $1 renewals
Kellogg scathingly critiques companies that disguise 25% gross churn by renewing accounts for a dollar to report an artificial 5% logo churn rate.
Hardest push from Jason ▶ 0:58 No host pushback (Solo keynote)This session is delivered as a solo keynote talk by Dave Kellogg without an active interlocutor challenging him on mic.
Biggest teaching moment ▶ 2:44 Dissecting misleading ARR bridgesKellogg details how companies falsely report finishing at 96% of plan by relying on beginning ARR to hide a catastrophic 60% attainment on new bookings.
Jason holds their own ▶ 0:58 No host counter (Solo keynote)The presentation format features Kellogg presenting uninterrupted to an audience without a co-host or interviewer interjecting.
the scores for every segment, with the reasoning behind each
| Chapter | Topic | Jason as informed peer | Guest teaching | Guest disagreement | Jason pushing back | Why |
|---|---|---|---|---|---|---|
| Identifying Metrics Misuse: Bludgeoning and Deceptive Reporting | 0 | 0 | 2 | 0 | Monologue presentation by Kellogg outlining the misuse of metrics for bludgeoning and misleading board members. Host is not present on mic. | |
| Diagnosing Deja Vu, Metric Rat-Holing, and Semantic Ambiguity | 0 | 0 | 2 | 0 | Kellogg breaks down deja vu meetings, MQL rabbit holes, and ambiguous forecasting terminology without host participation. | |
| Uncovering Data Recalculation and Diagnostic Inexplicability | 0 | 0 | 3 | 0 | Kellogg humorously contrasts VC vs PE recalculation habits, unexplained metric disconnects, and cognitive dissonance in board decks. | |
| Correcting Strategic Disconnects and Isolated Piecemeal Analysis | 0 | 0 | 1 | 0 | Presentation on aligning metrics to strategy (such as mid-market pushes) and avoiding isolated piecemeal evaluation. | |
| Mitigating Mis-Benchmarking, False Causality, and Data Torture | 0 | 0 | 3 | 0 | Kellogg criticizes poorly segmented benchmarking, confusing correlation with causation, and juicing retention via one-dollar renewals. | |
| Unpacking Root Causes and the Five-Layer Maturity Framework | 0 | 0 | 1 | 0 | Introduction of the Five-Layer SaaS Metrics Maturity Model and managing organizational change management. | |
| Implementing Foundational Alignment, Trust, Strategy, and Culture | 0 | 0 | 2 | 0 | Deep dive into building trust through standardized templates, leading indicators, and establishing a rigorous data culture. | |
| Strategic Trajectory Planning, Session Summary, and Q&A Transition | 0 | 0 | 0 | 0 | Kellogg concludes the keynote summary of the 15 symptoms and maturity model before opening up for audience Q&A. |
Statements from this episode (16)
Kellogg: The most common metric deception in SaaS is cherry-picking
“The most common form of misleading is what I call cherry picking, right? You just don't put up the bad numbers, right? You put up different numbers every quarter.”
Kellogg: Companies with clear metrics avoid repetitive board meeting debates
“That the companies I work with that kind of have their metrics act together, Don't have the deja vu problem because the numbers are telling us what's not working.”
Kellogg: A 90% confidence sales forecast allows missing once every 2.5 years
“And when I give the forecast to the board, I want to give a 90% confidence interval. So I'm giving them the lower bound of a 90% confidence interval. Now people hate that. And if people get scared when you use those words, I have advice. Just say you get to mi…”
Kellogg: VCs trust founders' CAC while PE firms recalculate it themselves
“Because the VCs tend to be trusting and say, what's your CAC and tell me how you calculate it. And isn't that interesting? Whereas the PE people just said to say, give me all your data. I'll tell you what your CAC is fundamentally. Especially in the context of…”
Kellogg: Board members recalculating metrics indicates broken trust in management
“I have one of my MBA is recalculate everything. And I'm like, this is a symptom of a very serious problem, right? We don't trust the management team to present the correct numbers. We don't correct them to do the trust them to do the right formulas.”
Kellogg: Missing ARR while pipeline metrics look good signals measurement failure
“If the top two important numbers are not being achieved and you can't see why in all the other numbers, I can't diagnose what the problem is, but I can tell you have a problem and it does happen from time to time.”
Kellogg: Only CFO and RevOps knowing metrics signals organizational innumeracy
“The symptom is very simple. You go to a board meeting or QBR or management meeting, and the only two people who ever asked numbers, answer numbers questions are the CFO and the head of rev ops.”
Kellogg: VCs bludgeon founders by expecting best-in-class metrics across every single category
“You know, a VC will look across their portfolio and think of the best CAC payback period, the best LTV to CAC, the best rule of 40, and ask you to do, you know, beat them on all four, right? It's inherently unfair. It's a form of bludgeoning, right?”
Kellogg: High growth increases enterprise SaaS CAC due to ramping resources
“That's going to drive your CAC up because CAC is a function of growth rate in enterprise software because you're carrying unproductive slash ramping resources, right?”
Kellogg: SaaS Benchmarks Should Be Segmented by Company Aspiration
“I actually think the best way to segment them is by aspiration. That, that if we could, and nobody offers these yet, but I want you to just consider this concept that we should segment benchmarks by aspiration, which is if I want to sell for 18 times EBITDA in…”
Kellogg: Competitor Used One-Dollar Renewals to Manipulate Churn Metrics
“I competed against the company that did one dollar renewals. And they would juice their churn rate so they could offset their SAS metrics.”
Kellogg: Establishing SaaS metric foundations takes quarters, not 30 days
“Even layer one has taken me with certain companies I work with quarters. And I walk in every time I have this kind of entrepreneurial blind spot going, this is going to be easy. Me, head of FP&A, CFO, we'll get this nailed in 30 days, 60 days. Every time I do …”
Kellogg: Upgrading SaaS metrics often requires replacing non-strategic RevOps and FP&A staff
“The change management is hard. It may require staff upgrades, particularly key analytics roles like RevOps, FP&A. Sometimes those people are not that strategic. They're not that fast, right? That they're good at making a budget and they're good at getting comp…”
Kellogg: SaaS metrics cannot be calculated from nature-based P&Ls
“They produce a nature-based PNL, not a function-based PNL, and you can't do SAS metrics off a nature-based PNL.”