SaaS Knowledge 3

Question 1

What is 'feature flagging' commonly used for in SaaS development?

Accepted Answer

Enabling or disabling features for specific users without redeploying code

Answer

Feature flags let teams toggle functionality on or off at runtime, enabling gradual rollouts, A/B tests, and instant rollbacks.

Question 2

In a SaaS subscription model, what does 'annual contract value' (ACV) represent?

Accepted Answer

The normalized annual revenue from a single customer contract

Answer

ACV is the average annual revenue generated per customer contract, useful for comparing deal sizes across customers with different contract lengths.

Question 3

What is the key difference between 'deferred revenue' and 'recognized revenue' in SaaS accounting?

Accepted Answer

Deferred revenue is cash collected for services not yet delivered; recognized revenue is earned revenue

Answer

When a customer prepays annually, the cash is recorded as deferred revenue and recognized monthly as the service is delivered.

Question 4

What is 'cohort analysis' primarily used for in SaaS?

Accepted Answer

Tracking the behavior and retention of groups of users who started at the same time

Answer

Cohort analysis segments users by a shared characteristic (like signup month) and tracks how their behavior evolves over time, revealing retention patterns.

Question 5

Which SaaS distribution model involves selling through third-party resellers or system integrators?

Accepted Answer

Channel sales

Answer

Channel sales leverages partners — resellers, VARs, or system integrators — to sell and sometimes implement the SaaS product on the vendor's behalf.

SaaS Practice Test

SaaS Practice Test

SaaS Knowledge 3