SaaS Trivia 2

Question 1

Which company is widely credited with coining the term 'Software as a Service' (SaaS)?

Accepted Answer

Salesforce

Answer

Salesforce, founded in 1999, is broadly credited with popularizing and defining the SaaS model as it is known today.

Question 2

What does the 'Rule of 40' measure in SaaS company health?

Accepted Answer

Revenue growth rate plus profit margin should exceed 40%

Answer

The Rule of 40 states that a SaaS company's revenue growth rate plus its profit margin should equal or exceed 40%.

Question 3

Which SaaS pricing model charges customers based on how much they actually use the product?

Accepted Answer

Usage-based pricing

Answer

Usage-based pricing (also called consumption-based pricing) ties the customer's bill directly to their consumption of the service.

Question 4

What is 'negative churn' in a SaaS context?

Accepted Answer

Expansion revenue from existing customers outpaces revenue lost to cancellations

Answer

Negative churn occurs when upsell and expansion revenue from existing customers more than offsets any lost revenue from cancellations.

Question 5

Which SaaS metric specifically measures the revenue retained from existing customers, excluding new sales?

Accepted Answer

Net Revenue Retention (NRR)

Answer

Net Revenue Retention (NRR) tracks how much recurring revenue is retained from the existing customer base after accounting for upgrades, downgrades, and churn.

SaaS Practice Test

SaaS Practice Test

SaaS Trivia 2