David Sacks

You look at the net dollar retention.

You look at the net dollar retention.

You want to see, depending on the phase- RPO, RPO, revenue under performance obligation.

You want to see, depending on the phase- RPO, RPO, revenue under performance obligation.

And so these things began to be seen as like an annuity with growth, right?

And so these things began to be seen as like an annuity with growth, right?

Yeah, because a good net dollar retention would be something like 120%, which means that your sort of cohort of existing customers on balance would all renew the next year.

Yeah, because a good net dollar retention would be something like 120%, which means that your sort of cohort of existing customers on balance would all renew the next year.

And actually, they would renew at 120% of their previous year's contract values.

And actually, they would renew at 120% of their previous year's contract values.

And the reason you got that extra 20% is they would buy more seats or there'd be additional products or features they would upsell.

And the reason you got that extra 20% is they would buy more seats or there'd be additional products or features they would upsell.

It got to be very, very predictable.

It got to be very, very predictable.

And so when people were buying...

And so when people were buying...

Software companies at, I don't know, 13 times ARR, they thought they were buying a growth annuity.

Software companies at, I don't know, 13 times ARR, they thought they were buying a growth annuity.

And now all of a sudden, you got to factor into that.

And now all of a sudden, you got to factor into that.