Project Management Software - Overlooked?

The combination of Asana’s stellar Q1 and’s IPO motivated me to look into the project management / productivity software more closely. Regrettably, I’m publishing this post later than I had hoped as I broke my wrist – so I’ve been slowly getting back into typing.[1]

Industry: For starters, this is an extremely competitive market, with pure-play project management solutions (i.e. Monday, Asana, Smartsheet, etc.), full productivity suites (i.e. Microsoft, Google, Apple), and specialized solutions that offer a some project management tools (i.e. ServiceNow, Atlassian, Zendesk) butting elbows. Monday admits on its S1 that “the markets in which we operate are extremely competitive, fragmented, and subject to rapidly changing technology, shifting customer needs, new market entrants, and frequent introductions of new products and services. We expect competition to increase in the future.” Equally, Asana states that “we operate in a highly competitive industry, and competition presents an ongoing threat to the success of our businesses.” This is one of the main reasons why many have shied away from this industry, and the market has attributed a discounted valuation to these companies.

Yet while it is important to take into account the hyper-competitiveness, it is also worth noting the size of the market. According to one of the latest comprehensive industry analyst reports, the market size was ~$23B in 2020, and is expected to grow at nearly 12% CAGR over the next few years, reaching $32B by 2023 [2]. This TAM is clearly understated due to the pandemic effects, which is also an important point to remember – this niche has quietly been one of the most accelerated ones over the last year. We got clues of this effect during Okta’s Business at Work report [3]. In fact, Monday was highlighted as the 4th fastest growing app. Project management tools were highlighted as the first tools of the “remote work stack.” It should come to no surprise to us – if we were starting a company today, organizing our team’s tasks and tracking priorities be one of our first priorities? Especially if the team is working remote! Having one of these tools is simply indispensable.

According to Forrester’s latest Wave report [4], Workfront, Smartsheet, and Wrike are the industry leaders, with both the strongest offering and strategy. Asana and Monday are considered “strong performers” and are ranked almost equally – both above Microsoft. Now, for the purpose of the company-specific analysis, we will focus on Asana and Monday as Smartsheet’s growth rates are <40% now.

Asana: WSM007 published a phenomenal introduction to Asana, so I will simply supplement his analysis with an update since the post. When the post was published, Asana’s latest report reflected:
- Revenue Growth: 55%
- Gross Margins: 87.6%
- RPO Growth: ? (quarterly figure not revealed in S1)
- Free Cash Flow: -$19.5M
- Non-gaap Operating Loss: $37M (63% of revenue)
- Paying Customers: >89k
- >$5k Spend Customer Growth: 80%

Just two quarters later, Asana’s figures look as follows:
- Revenue Growth: 61%
- Gross Margins: 89.7%
- RPO Growth YoY: 83% (19% QoQ)
- Free Cash Flow: -$7.7M
- Non-gaap Operating Loss: $33M (43% of revenue)
- Paying Customers: >100k
- >$5k Spend Customer Growth: 82%

Shockingly, Asana was trading at an EV/S (NTM) of 14x-15x during the March-May sell-off. Moskovitz (CEO) bought nearly $15M of shares, which added to the triggers sending its share price to what’s now 46% surge since its last earning report.It’s also worth pointing out that Asana guided for 8.2% QoQ growth. A similar beat to last quarter would entail 74% YoY revenue growth. was founded less then a decade ago in Israel by Roy Mann and Eran Zinman. It labels itself as a “work operating system (OS)” as its project management software is highly configurable to adapt to its users. Its platform contains building blocks that can be adapted based on a customer’s requirements, and integrated across a host of other applications. This kind of configurability and interoperability is common amongst “low code” software providers – intending to empower workforce to build things without needing to code. They pride on building software that can be used to “manage anything” but from several use case from my peers – it is great for project management but mediocre for more specific use cases. Here is a high-level example on its basics: While I appreciate Monday’s willingness to position itself as a versatile “do-it-all” tool however, I still think it primarily fits the label as a project management solution, because the vast majority of use cases involve that very use.

Its S1 explains that its software tends to be deployed for three purposes:
(1) building business-critical software applications: such as Universal Music using Monday for label relations, campaign management, project management, and IT operations
(2) building work management tools: such as the NHL using Monday to IT development across 30 business units
(3) acting as connective layer to form a unified workplace and integrate applications: such as Hubspot using Monday to integrate with HR to optimize onboarding and connect departments, people, and processes

Business Metrics:
-128k customers (34% YoY growth), 70% which work in traditionally non-tech industries
-Customers with >10 users account for 65% of ARR (up from 53% in 2019)
-Enterprise customers (spending >$50k p/year) growing at 247% YoY
-63% of customers use it for 3+ products

Financial Metrics:
-$236 LTM revenue (85% YoY growth). This is expectedly a slightly lower rate than last year (88%) and a 114% Covid-peak growth. Last two quarters it has grown at 18% sequentially.
-90% non-gaap gross margins
-(19%) LTM FCF margins
-(40%) operating margins. Last quarter expenses (as % of rev):
-S&M: 100%
-R&D: 19%
-G&A: 10%
-Net dollar retention of 107% (121% for customers with >10 users)

-We won’t know truly know the specifics given the recency of its IPO. But, assuming it grows at ~70% over the next year, it will reach $320M in NTM revenue. At its current EV of ~$10.7B, that puts it at ~33x EV/S (NTM). This puts it as the 8th highest valued cloud company – just below Crowdstrike and Zscaler, and above Shopify and Datadog. Keep in mind that these are rough estimates, and that the market is still piecing together its value based on its reported metrics.

Conclusion: All in all, this is an exciting space that (at least I feel) has been overlooked. Distributed workforces are here to stay, and powerful tools to keep remote workers engaged and honest will continue to be a priority for C-suites across the world. Despite the differences that separate Asana and Monday, it will be interesting to watch if this niche is able to support multiple winners, or if we will witness hunger games battle it out [5].

[1] I say regrettably because Asana has since my intended post, and I had hope to help this board (and myself) be part of that appreciation. Needless to say, sometimes life gets in the way.

Protect the identity of this board and maximize your learning by… before participating. Any feedback is welcome.


I have been in $ASAN since they went IPO and really like their business. We use Asana where I work and I know lots of other companies that use it. It integrates into a variety of other tools and that’s what makes it sticky and hard to replace. Alternatives like Workfront or MS Teams just don’t have quite the same feature set, at least that’s my opinion.

As for Monday, here is a good write-up.…

“$MDNY has seen revenues rapidly grow 106% in 2020 to $161M and has grown 86% in Q1 2021 to $59M. It had net losses of $152M in 2020. Sales and Marketing spend is over 100% of revenue. In Q1 2021, for instance, generated $59 million in revenue with $63 million in associated sales and marketing costs.”

What stood out to me was that the losses are even greater than Asana, which is shocking. Since I am already in Asana, I am not a buyer of Monday at the IPO. Otherwise, the two businesses look surprisingly similar.

I think both of these companies are similar to Slack in that they are trendy software companies with tools that appeal to the developer/startup demographic. It’s a big market, but it’s not clear to me how big. However, unlike Slack, I don’t think MS is going to come after them as viciously as they did that company.

Also FWIW, I don’t know any companies that use Monday.

If you’re a buyer of Monday, good luck.


I’ve previously owned both SMAR and WORK but have passed on ASAN so far.

I guess the difficulty I’ve had with these companies is the eventual path to profits. S&M expenses seem to consistently stay elevated, and the profit margins move more sideways than most of the other companies we discuss. Denny has explained quite eloquently in the past the difference between “nice to have” software versus “mission critical”. With the move to remote working, project management may indeed become mission critical. I’m just not seeing it in the numbers yet. I’ll probably end up staying on the sidelines until they say otherwise. If I miss out, I miss out.


A little OT, but I’m a software development manager that uses TEAM/Atlassian agile tools to run my projects (and I’m a big fan). And then I interface with a PM team that wants to use Smartsheets to track deliverables/dependencies between my team and external group. So they replicate a bunch of my agile epics in a smartsheet, and then have weekly meetings to waste an hour manually updating the status of every little deliverable - when the up-to-date information is right there in Jira. I have come to detest Smartsheets with the passion of a million fiery suns.


when the up-to-date information is right there in Jira.

Love the “burning suns” reference. Software development/implementation manager here too. The amount of money and time some organizations waste - pure waste - on duplicative software just because a few don’t want to take an hour to learn the model they’ve already paid for is… mind-boggling. JIRA is not perfect, but as a cloud platform Atlassian CONSTANTLY tweaks it to make it (mostly) easier and more valuable to use. There are numerous PM software tools out there. They all basically do the same thing, in different ways with different effectiveness. These organizations that bleed $ paying for multiple niche tools for, what is in effect, a checklist manager with automated notifications… insane.