Let’s just face it, Zoom is overpriced based on any traditional metrics… no argument, no doubts. Everyone agree.
The question is, can our traditional metrics be used on SaaS companies? In my opinion, that has yet to be determined. We are flying blind right now and taking a leap-of-faith that this time is different. I am always leary of saying “This time is different.” However, we have never, and I truly mean never, had companies that grow at these rates and maintain these margins.
Think of a traditional retail company. High growth was 12-15% new stores, 10-12% comp sales growth, and 1-2% on price… that’s 25% a year! That means they will double in size in approximately 3.5 years. All while maintaining a 40% margin. That’s was high growth for over 100 years and what the traditional metrics are based on. Now we have ZM doubling in size in 3 months with nearly 90% margins! Stop and consider that. It very well may be different this time.
So the question remains, can you use the traditional pricing metrics when the base assumptions have changed so dramatically? And, if you can’t, what metrics are appropriate? The answers have not been decided and for right now it’s an argument without an answer.