What is B2B SaaS?

B2B SaaS — Business-to-Business Software as a Service — is software sold to businesses on a subscription basis, accessed over the internet rather than installed locally. The customer pays a recurring fee (monthly or annual) for continued access. The defining characteristic of the model is that revenue is predictable and recurring — unlike one-time software licences, a B2B SaaS business builds a growing base of revenue that renews every period unless the customer actively cancels.

What makes B2B SaaS different from other software models?

Recurring revenue: the customer relationship is ongoing, not transactional. Retention matters as much as acquisition. Low marginal cost of delivery: serving one more customer costs almost nothing once the software is built — gross margins of 70–80% are standard. The need to sell to organisations: B2B buying involves multiple stakeholders, procurement processes, and longer sales cycles than consumer software. And the continuous delivery model: updates and improvements happen continuously, so the product the customer bought on day one improves over time without them doing anything.

What are the key metrics in B2B SaaS?

MRR (Monthly Recurring Revenue): the revenue generated from active subscriptions each month. ARR (Annual Recurring Revenue): MRR multiplied by 12 — the annualised view. Churn rate: the percentage of revenue or customers lost in a period. NRR (Net Revenue Retention): revenue from existing customers including expansion, minus contraction and churn. CAC (Customer Acquisition Cost): what it costs to acquire a new customer. LTV:CAC ratio: lifetime customer value divided by acquisition cost — the primary unit economics health check. A well-run B2B SaaS business has MRR growing month over month, churn below 2% monthly, and LTV:CAC above 3:1.

What does a typical B2B SaaS go-to-market look like?

Most B2B SaaS companies start with outbound sales: founders or SDRs reach out directly to the ICP, run demos, and close early customers manually. As the company grows, inbound channels — SEO, content, paid ads, word of mouth — supplement or eventually lead outbound. At scale, some products add a product-led growth layer: a free tier or trial that lets users experience value before talking to sales. The right mix depends on ACV, product complexity, and how far the market has developed awareness of the category.

What is the hardest part of building a B2B SaaS company?

Not building the product. The hardest part is building consistent distribution. The AI builder wave of 2024–2026 made it possible for a single founder to ship a complete B2B platform in weeks. What it didn't change: finding customers, convincing them to try the product, and retaining them long enough to generate returns. Distribution — consistent, repeatable customer acquisition at acceptable CAC — remains the primary constraint on growth for the vast majority of B2B SaaS companies.