Not Sold on SMAR

I personally don’t think SMAR is doing anything that special. There’s a ton of competition and what they do is NOT business critical. These project management tools make it very easy to swap from one to the other.

Also and more importantly, I’ve worked at clients that are massive organizations and have a little awareness of what our own people use (~6,000 people) and I’ve never talked to one person who’s actually used Smartsheets.

This could mean there’s a ton of potential. But what I think it means is just that they aren’t significantly better than what’s already out there.

Sure, their revenue growth is high, but they are building off a tiny base and we don’t know if that growth is good or bad compared to some of their competitors that are still private. I bet there’s some growing MUCH faster.

Here’s a couple review sites that reflect what I have seen personally working in this space.…… (not even mentioned)

I wish anyone who’s invested in SMAR luck… I just can’t get comfortable and it feels like we’re stretching to fit it into our next big idea bucket.

But, that’s what makes investing wonderful. The market will tell us who’s right in the end.


Cisco, Netflix, Hilton, and Paypal disagree with you. As well as many government agencies:

“Library of Congress, National Park Service, National Institute of Alcohol Abuse and Alcoholism, National Institute of Standards and Technology, Lawrence Berkeley National Laboratory and US Geological Society easily manage tasks and projects as well as collaborate with stakeholders.”



I’d be interested to know how many project management tools those companies each use, how many users for each, how often they’ve changed, etc.


Also I give a point for high CEO glass door ratings:

Mark Mader, CEO
95% Approve

Based on 106 Ratings

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It’s there single system.

That’s just one example.



I personally don’t think SMAR is doing anything that special. There’s a ton of competition and what they do is NOT business critical. These project management tools make it very easy to swap from one to the other.

Thought about this as well…maybe what is “special” about SMAR is its simplicity.

If one can roll it out with little to no training/hassles…that does free up resources to concentrate on higher order mission critical processes.

And that launch and forget “simplicity” could be its appeal.

I am also not invested but also acknowledge they are growing at an impressive pace and there must be a reason for it.


Dana, I think you may have misunderstood the quote in that video. I’m almost 100% confident the CIO did not say it’s their single project management system in the organization (that just doesn’t happen). I think what he meant was for his team, department, or something along those lines.


Smartsheets is no simpler than, Aha, and even several of the Atlassian tools.

I also don’t think their growth is that impressive for their size. I think Trello has actually grown much faster than SMAR and I’d bet and a couple other private companies that are similar in size to Smartsheets are probably growing much, much faster.

I don’t want to belabor the point here. I’ve shared my thoughts and I really do hope I’m wrong because I know a lot of the board probably owns a position.


This article by Forbes does a good job of laying out the bull case for Smartsheet.

I don’t see SMAR as going after the same type of use case or market that a Trello or some of those types of collaboration software. I see them going after higher value and more mission critical markets that require a greater scale of work execution.

This makes for value add-ons with integrations and pre-built accelerators tailored for use cases that need solutions. That’s been a major driver of the growth of annual contract value.…

A few of the larger expansion deals were the result of organizations deciding to consolidate a number of collaboration tools and standardize on Smartsheet as their work execution platform. The Smartsheet platform sees broader adoption when customers use it as part of their overall sales planning process, according to management.

To help attract a greater number of large accounts, the company has improved the compliance and control capabilities on the platform.

For FY’20, Smartsheet plans to drive scale and improve performance across the platform to make sure enterprise customers are well served in larger deployments, while continuing to build out the dashboard capabilities for real-time visibility and improved decision-making.

Also in FY’20, Smartsheet looks to increase the number of Accelerators—the pre-packaged offerings geared toward specific use cases—in the product portfolio. Priced in the five-figures, Accelerators are sold with a combination of recurring software revenue. The three Accelerators currently available handle workflow collaboration related to IT projects, professional services and M&A deals.

They have impressive growth of high value accounts and grew revenue 58% and Billings of 63% with a $NRR of 134%.

So they are executing well. And driving the platform to a higher value to enterprises.

They will launch more accelerators over the next year bringing in more opportunities.

Doesn’t have to be for everybody but just wanted to put out the bull case and that Forbes article is pretty much it. Good read for those interested.



Atlassian said that Trello contributed “about $20 million” to revenue for all of FY 2018. That’s as of end of FY in June or July 2018. I believe that was a full year since acquisition. They were roughly about a $10M run rate prior to acquisition in 2017.


Yeah… so 100%ish growth. Atlassian isn’t even trying to make Trello a cash cow. The company doesn’t even have an official sales org.

Just look at these numbers and remember… Atlassian is about 5x larger than SmartSheets

Revenue Growth: SMAR 58% // TEAM 39%

Total Expense Growth: TEAM 33% // SMAR 56%

Gross Profit Margin: TEAM 83% // SMAR 81%

Sales&Marketing Exp as % of rev TEAM 22% // SMAR 60%

Now this does not take PS into account. The point I’m trying to make is in order for a company in this space to be a market crusher long term (like TEAM has been) the product has to be 50% - 100% better than the other options.

Atlassian clearly has that. By investing in SMAR right now, we are hoping they will too. I’m not saying it isn’t possible, but from my personal experience and those numbers at such small scale, I’m just not seeing a market leading product and that’s what I believe it will take for them to be a good long-term investment.

Okay last post on this for me. Don’t want it to turn into too much of a back and forth. Let’s check back in on it after another couple quarters of #s


While this might be a back and forth, articulating a potential bear case and some challenges to overcome is very worthwhile for those of us holding SMAR. Thanks for the discussion.


Wow! thanks folks for with this tread you have laid out why I’m so thrilled to have come to follow this board. When I decided to venture into investing hyper-growth stocks my first thought was simply I’m new to the game and need to learn big time. It is threads like this, that Austin posted that inspire thoughts and great responses from so many other knowledgeable people. When you add Saul’s rules to the board, and the write ups under “announcements” where you can study his evolution in investing, well with study and plain old hard work I get turned on! A lot of the stocks mentioned have grown so well and of course have a great chance to continue that going forward has allowed me to
start several strong positions. With that said I see the need to “find the future winners early” to really have all of this payoff going forward. The “deep dives” are great and I’ve gone back over posts of them prior to investing in these companies. Thanks to all who share their great work and passion on this board and a special thanks to Saul for encouraging all of us to learn “how to do this on our own”

enjoying the ride


I am concerned about the 10% churn. Lowering Churn for SAAS is a big deal - see link below. They have had greater expansion rates thus far so the high churn has not hurt revenue growth. But the bigger they get it will be harder if they don’t fix churn. I also wonder why 10% drop out every year. Is the product not so sticky?


I think discovering more information is healthy for us. Sometimes maybe we go a little too much I get that. But I’ll be honest I’m trying to figure out the market for Smartsheet. I think the whole world is a little confused. Maybe because SMAR is carving out its own space??

So to correct something I said. Trello had ARR of $10M as of May 2016. And $13M as of October 2016. So very small company.

So call that $11M as of June 2016. And Atlassian disclosed Trello contribution of $20M as of June 2018. $11M to $20M in two years. That’s about a 35% CAGR.

Trello had 17 Million users as of the article on October 2016. As I understand it, Trello is amazingly popular in what it does and has viral use. But whatever they are doing it is not as valuable as what Smartsheet is doing. Trello has 11% of the revenue Smart has. $20M vs $177M. And apparently is growing revenue much slower.

Point here is that Trello is considered by many (including by online comparisons) to be in the same market. And in many cases the more used or higher rated product. But there is a disparity in revenue and revenue growth rates. By a wide margin on both accounts.

So that leads me to think, are we and the market research placing these products in the same category that shouldn’t be. Have we and the market properly defined what Smartsheet is and thereby what market it competes in? And by extension who it’s competitors are.

350,000 people, from 76 countries, in 60,000 teams manage their work with

Not sure what “people” means. Smartsheet has 800,000 paid licensees and 4.8M users. I don’t think has five figure add-ons and accelerators to drive deals up to $100K or even as high as $2M.



There’s a 30 day demo for it. I think anyone investing in it should sign up for the demo so they can get a feel for what it does. I subscribed to it a couple of years ago but dropped the subscription after only using it for a couple of months. My impression was that it was a souped up spreadsheet that was cool but ultimately didn’t use as much since no one else at my company used it and there wasn’t a lot of appetite to introduce another software package when we had Project and Excel already. I recently did the demo again to see how much had changed and ultimately decided not to do the subscription.



Smartsheets is definitely not creating a new market. Not even close.

I think it’s important to understand that Atlassian doesn’t want or need to monetize Trello. Not right now at least. Most of its functionality is free.

What Atlassian wants is to own mindshare of project managers and organizations because using Trello feeds directly into paying for products like Jira and Confluence (also from Atlassian).

It’s incredible marketing and a feeder to Atlassian’s valuable products.

That’s exactly my concern with Smartsheets. They HAVE to monetize the same people who can otherwise use something like Trello for free which feeds directly into a premium product if/when ready.

Another example, it’s super easy and convenient to mix and match Trello with work/personal use (I use it for both). I would never consider using Smartsheets because no teams I’ve ever worked on use it.

Again, this is just my experience, but I work at a company that’s pretty involved in the enterprise world so we have some wide-ranging exposure.


Lieb, you’re right about “it’s not anything special”. There’s clearly a huge marketing campaign behind it, but - depending on the organization, the business, the development model, the methodology chosen and the management, there are targeted and preferred tools out there. Here’s a short, partial list (from experience and evaluation)

  • Microsoft Project, server
  • Rally
  • VersionOne
  • Atlassian (JIRA, Confluence, and now Trello) which each contain “portfolio” management tools
  • KeyedIn
  • construction project software (aka startups like Thunderbolt)
  • Excel for the truly cheap
  • Google Docs (Sheets) for the truly truly cheap, live action real time collaboration at zero cost
  • tens of other niche products

Wouldn’t touch it as a “Saul stock”.



I have taken a small starter position in SMAR, but my confidence level is low. I’m going to need some very good performance to up my position and I might bail pretty quickly.

I have looked at their web site and frankly, I just don’t see anything all that special about this product (and so far, it’s essentially one product). I don’t perceive a moat. Looks like an easy thing to get rid of in a downturn. From what I’ve been able to glean, calling it a collaboration tool is much more accurate than calling it a project management tool.

But their numbers are impressive.

I’m watching it closely.


The moat for SMAR may be a bit different than what we are used to. I have not used their product, but I have used a number of competing products and mostly my reaction is that they are terrible. They might be OK at producing a pretty GANTT chart at the start of the project on which to base planning, but actually responding to the changes of A getting done early and B getting done late and how one reallocates personnel as a result (in the case where one is managing a team rather than a bunch of unrelated resources) is mostly pretty terrible in the products I have used. So, if they can simply be less terrible, that might be a moat.


There moat is because they are cheap to use. They charge 25 dollars per user per month. I think if you are a larger company you can even get a better price than that. Most companies probably pay for the product and just forget about it.