Like revealing the size of one’s net worth, publicly disclosing a business’s revenue figures is generally seen as taboo. Something not to be done, unless you’re with a trusted confidante in a dark alleyway, and both of you perform a secret handshake before proceeding with a whispered conversation.
And though this is a common way of thinking in more traditional industries, many SaaS businesses find themselves falling into one of two exceptional situations…
For one, you might be publicly listed. If so, you are obliged to regularly publish financial reports that SaaStr’s Jason Lemkin will later dissect in detail.
Another situation is if you belong to that corner of the SaaS world where people have—gasp—no qualms openly sharing their numbers.
Just head over to websites like Indie Hackers and Medium, and you’ll see startup founders routinely blogging about how they’ve “just hit $1,000 in MRR (monthly recurring revenue)!” or “gone from zero to $50,000 ARR (annual recurring revenue) in 12 months!”, while their peers cheer them on.
Some SaaS businesses even go to the extent of connecting their platforms to subscription analytics platform Baremetrics, which publicly reports on companies’ revenue—and other SaaS metrics—in real-time.
But if your SaaS business is privately run and you’re way past the “enthusiastic new founder” stage, is it worthwhile to make your SaaS revenue figures public?
Let’s consider some pros and cons.
The pros of going public with your numbers
Clearly, something must be driving SaaS business owners to divulge their revenue figures to the world. Otherwise, they wouldn’t do so.
Here are some possibilities:
You hold yourself publicly accountable
As Shakira will tell you, hips don’t lie—and neither do numbers.
If you’ve just hit a new revenue high, your numbers will show it. If dozens of customers have left in droves, your numbers will also show it. Short of you cooking your books—which we don’t recommend doing, by the way—your numbers provide a transparent record of your business’s performance.
And with outsiders being able to keep tabs on your business success, you know that you’ll have to work damn hard at:
- acquiring new customers,
- improving your product, and
- keeping existing customers happy,
to keep having beautifully (high) revenue numbers to share.
“This is one of the big benefits of sharing these [revenue] numbers openly,” acknowledges Joel Gascoigne, founder CEO of social media management platform Buffer.
“It holds us to a high standard, forces us to face the reality (sic). And in many ways, it is freeing to be open, we don’t hold the full weight of it, it is more shared.”
While everyone loves bragging rights, they’re far from the only reason to make your revenue figures public. There are tangible benefits to doing so, too.
One of these being…
You give customers the confidence to sign up
In the past, customers could buy a software license for a one-time fee and use the product forever, even if it’s no longer being maintained.
Just like how I continue to use my beloved BlackBerry phone to this day. Rest in peace, BlackBerry.
But the subscription nature of SaaS makes this impossible. If the business goes bust (or is on its way there), its software platform will slowly but surely be shut down. Customers will then have to look for an alternative solution.
And if you’ve ever had to switch platforms, you’ll know how tedious it can be. You’d also want to avoid doing so if you can.
Publicizing healthy revenue figures can thus:
- boost customer confidence that your business won’t be closing shop anytime soon, and
- give customers the reassurance they need to sign up for the long haul.
“I believe that being completely transparent will ultimately result in increased trust with customers and potential customers,” writes Dave Negost, co-founder and CEO of Hubstaff, in a blog post on why the productivity tracking platform decided to embrace revenue transparency.
“They will be able to see what we are doing based on hard data, so they can see that we are doing our best to provide a valuable product that people love.”
The cons of baring it all
While going public with your SaaS revenue figures is a bold move, that’s not to say that people who prefer to keep their revenue under wraps are cowards.
There are perfectly legitimate reasons for doing so, namely:
Now *everyone* knows your numbers!
When you make your revenue figures public, anyone who cares enough to check can easily learn what they are.
People who may fall within this category include your parents, loving spouse, and closest friends. And rest assured, your competitors will definitely be peeping at your numbers.
That’s because you’re effectively giving them a free sneak peek into your business’s financial health and the success of your business strategies. From your revenue figures, for example, your competitors can glean:
- whether your novel marketing campaign managed to pull in new signups, or
- whether your new product feature is helping you retain existing customers.
If things appear to be working out for you, your competitors could happily copy what you’ve done to reap the rewards for themselves.
Or if your business has had a less-than-stellar quarter, your competitors may infer that your recent initiatives haven’t worked out—and avoid spending resources on the same.
And are they obliged to reveal their revenue to you in return, as thanks for your generosity?
Not at all.
In a podcast episode, co-founder of Transistor.fm Justin Jackson expressed his “growing discomfort” with making his podcasting platform’s revenue figures public. (It no longer does so.)
This discomfort stemmed from not only his awareness that competitors looked at Transistor.fm’s revenue, but also his belief that the numbers encouraged new competitors to join the fray.
“I’m not opposed to competition, but you don’t necessarily want to say, ‘Come on [in], everybody!’,” Jackson laughs.
He also likens being in a viable industry to finding an excellent surf spot: “You generally want to keep it quiet.”
Are you chasing revenue at the expense of team well-being?
Sharing your revenue figures and just your revenue figures tends to promote hustle culture—in other words, working as much as you can, and for as long as you can, every day.
Because the harder you work, the more money you can generally make (and show off to everyone).
And for sure, having more money is great. If anyone wanted to give me a wad of cash with zero strings attached, I’d gladly take it.
But working overly hard to earn more revenue may only be harmful to team productivity and well-being—yours included.
Just ask the 28% of U.S. employees surveyed by McKinsey who reported experiencing symptoms of burnout. Or, as Gallup found, the 50+% of the U.S. workforce who engage in “quiet quitting,” performing what’s minimally required of them at work and nothing more.
Hence co-founder and CEO of SparkToro Rand Fishkin’s irritation when entrepreneur Sam Parr seemingly dissed Buffer for its dip in revenue:
For context, Fishkin is an advocate for “Chill Work,” a work philosophy that entails “a Zen-like appreciation for the fulfillment and rewards of high-quality work, but never letting work intensity overwhelm the rest of life.”
Meanwhile, Parr recently sold to HubSpot, for an undisclosed amount, his highly successful newsletter titled “The Hustle.” Is it any wonder that Fishkin doesn’t like him?
SaaS revenue: to disclose or not to disclose?
Like confessing your feelings to a crush, spilling the beans on your SaaS revenue can be scary. After all, you increase your business’s vulnerability—on which competitors may be all too willing to capitalize.
But unlike the experience of the emperor in the story of the Emperor’s New Clothes, sharing the naked truth about your revenue can have its benefits.
So perhaps the solution here is to opt for a middle ground.
You don’t necessarily need to publish revenue numbers that are updated to the very last second. And if accountability is a key value for you, it may still be helpful to release periodic reports like how publicly-listed SaaS businesses do.
Just keep in mind that any revenue details you share will become part of the permanent public record. Once you let your numbers loose into the wild, there’s no going back.
