SaaStr 728: How to Double Your Magic Number and Increase Your Go-to-Market Efficiency with Sapphire Ventures
Go-to-market (GTM) design and efficiency are sometimes overlooked, but they’re a critical driver of any SaaS business. Rajeev Dham and Karan Singh, Partners at Sapphire Ventures, and Jane Lee, Vice President at Sapphire walk us through how to double your “Magic Number,” a shorthand for your sales and marketing efficiency.
Magic Number is your growth in ARR over a quarter divided by the sales and marketing spend in the prior quarter. Previously in SaaS, it was widely seen that anything > 1 was healthy if you were venture-backed, and anything > 1.5 is was seen as perhaps too capital-efficient. If you were well-funded, 0.7 was fine.
But as Rajeev, Karan, and Jane point out to set the stage for this discussion, Go-to-market efficiency in recent years has suffered a significant drop across both public and private SaaS companies.
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