Hacking SaaS: An Insider’s Guide to SaaS Metrics and Managing Software Business Success

By Eric Mersch

Announcing the launch of “Hacking SaaS: An Insider’s Guide to Managing Software Business Success”

by SaaS CFO and FLG partner Eric Mersch

 

Eric Mersch has worked with SaaS companies, private and public, for over two decades. His guidance in “Hacking SaaS” comes directly from his extensive experience as a CFO helping to drive success in these software companies. Over the course of his career, Eric has identified a knowledge gap in SaaS management and strategy. In “Hacking SaaS”, Eric provides a definitive guide to SaaS metrics, performance management advice and knowledge of SaaS business and strategy.

“I have spent nearly my entire business career in subscription software, from the dot-com days to the 2020s and so have experienced the growth of the industry firsthand. Early on, I recognized the strategic importance of the SaaS business model and the nuances key to successfully managing these businesses. I found that learning the SaaS business model was challenging because of the lack of credible educational resources for this niche. Based on the insight I developed as a CFO, I started writing articles on best-in-class SaaS management. When I joined FLG Partners in 2018, I was determined to write a book with the key objective of offering the industry a single resource that consolidates knowledge on the SaaS business model, describes a framework for classifying iterations on these business models, and provides a standardized methodology for managing SaaS companies. I wanted to give guidance on defining, measuring, and executing on SaaS metrics, but I wanted to inform the industry that operational activities must support strategy, for it is the strategy that provides the most value to the company.”

 

INDUSTRY PRAISE

“As a Venture Lender, I am on the receiving end of financials and metrics, working across the table with CFOs of VC-backed portcos. I wish I could tell you that all companies track metrics similarly and that I’ve never seen materially revised financials or metrics. Some cases of poor financial hygiene have been so serious that companies have had to let the CFO go, and in even more serious situations where ARR, CARR, or other metrics tracked were being reported so incorrectly, that it is later determined that the Company is no longer a viable candidate to attract incremental equity. Eric’s book is the culmination of 8 years of blog posts on SaaS in conjunction with FLG Partners and is a very good resource to anyone in or around Finance for SaaS companies. Eric provides a guide for CFOs and stakeholders with common language and definitions, for not just GAAP metrics, but SaaS metrics outside the financial statements to help get everyone on the same page.”

—Darrell Sorenson, SVP of Venture Lending, Pacific Western Bank

“Eric’s book, Hacking SaaS: An Insider’s Guide to Managing
Software Business Success, is a terrific and much-needed
explanation of the fundamental business and financial principles of
running a SaaS business. Eric bridges the ongoing confusion
between well-known financial principles and poorly understood
operational metrics that are the basis of the SaaS business model.
He approaches the subject with a neutral perspective and an
explanation of the basic SaaS structures and tracking mechanisms.
He isn’t an investor or a SaaS consultant with an eye to hype, nor
is he an entrepreneur promoting the value of their way of doing
business. Eric’s an experienced CFO who has brought order to
numerous SaaS companies, helping management and boards get
on the same page in terms of what the key management metrics
should be, how they are defined, and what they mean.”

—Lauren Kelley, Founder and CEO of OPEXEngine

“I’ve known Eric for over fifteen years and have followed his
SaaS career through his many thoughtful articles on the subject.
It was only natural that when I needed a SaaS business case study
for the management team at Key Factor, I turned to Eric. His
work provided the team with detailed reviews of Enterprise SaaS
companies and helped provoke meaningful discussion. His book,
Hacking SaaS: An Insider’s Guide to Managing Software Business
Success, expands the subject far beyond the work he did for us.
I’m confident you will find it just as insightful.”

—Jim DeBlasio, CFO and EVP of Operations at KeyFactor

“Working in the software and tech space for more than twenty
years and personally experiencing on-premise perpetual to
cloudbased SAAS software transitions, I can attest to the challenges
of adopting and managing within this business model. Hacking
SaaS: An Insider’s Guide to Managing Software Business Success, is
a must-have resource for the SAAS professional. Eric provides
a history of this transition and an in-depth study of the SaaS
business model and then connects these details to management
and strategy development. He defines every SaaS metric in use
today, explains how they are calculated, and describes how they
should be used to guide operations and strategy. His book is an
invaluable addition to the SaaS industry’s knowledge base.”

—Ron Fior, CFO and Partner at FLG Partners

“As I was promoted to CEO of Swrve to lead its restructuring,
Eric was the confident, seasoned, and ingenious right-hand who
steered me right from the start. Eric worked with me every step of
the way to implement SaaS best practices into our operations—
providing data-driven strategic guidance and financial acuity. In
his book, Hacking SaaS: An Insider’s Guide to Managing Software
Business Success, Eric consolidates his deep SaaS experience into
a resource that SaaS professionals can rely upon, just as I did
during my CEO tenure.”

—Lisa Cleary, CEO of Swrve, Inc.

“Eric Mersch’s book, Hacking SaaS: An Insider’s Guide to Managing
Software Business Success, is a powerful resource for investors,
analysts, and any executive building a cloud-first company.
He leverages his extensive experience with emerging SaaS companies to
explain the operational and financial models that are foundational
to the software-as-a-service industry. !e book distills complex
frameworks into intuitive concepts by providing rich context
supported with easy-to-understand examples and target metrics.
His work has been instrumental for my investment research, as it
has helped me to gain a CFO’s perspective into SaaS performance
metrics and financial reporting. !e emergence of SaaS models
and the adoption of digital transformation are both trends that are
still early in their development, and Eric’s work provides critical
tools for anyone who is managing or analyzing the businesses
driving the SaaS economy.”

—Erik Suppiger, Equity Analyst at JMP Securities