---
title: "How Much is 20% More NDR Worth to Your SaaS Startup?"
description: "Discover how a 20% increase in net dollar retention can make your SaaS startup 4.2x larger in 5 years. Real data from DataDog, NewRelic \u0026 AppDynamics."
categories: ["customer success","SaaS","startups"]
keywords: ["Theory Ventures","Tomasz Tunguz","net dollar retention","NDR","SaaS growth","customer success","venture capital","Application Performance Monitoring","DataDog","New Relic","AppDynamics"]
ai_summary: "A 20% increase in net dollar retention can significantly amplify your SaaS startup's growth potential, leading to 4.2x larger revenue in 5 years."
date: 2021-03-05
lastmod: 2026-07-23
canonical_url: https://www.tomtunguz.com/ndr-delta/
author: "Tomasz Tunguz"
---

A 20% delta in net dollar retention (NDR) may not seem like much, just a trifle, but make no mistake, it's massive. In preparing for a presentation at next week's [Saastr Build](https://www.saastrbuild.com) conference, I reviewed this [S-1 analysis for DataDog](https://tomtunguz.com/benchmarking-datadog-s-s-1-how-7-key-metrics-stack-up/) that I had published a few years ago.

It shows the difference in the net dollar retention across three competitors in the same space, Application Performance Monitoring: DataDog, New Relic, and AppDynamics. 

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto/f_auto/w_auto/v1566834346/apm_ndr_k3l2ap.png)

At the time of IPO, DataDog charted 151% NDR compared to 123% for AppDynamics and 115% at NewRelic. That may not seem like a big difference. But it is. Let me show you why.

![image](https://res.cloudinary.com/dzawgnnlr/image/upload/v1614965320/eugedef5uxmzug2lwzjo.png)

Imagine three companies: one at 120% NDR, one at 140% NDR and the last at 160% NDR. In five years, assuming all else is equal, how much bigger is the last company than the first?

The answer is 4.2x - four times bigger! And 1.9x bigger than the company with 120% NDR. 

Each marginal 20% of NDR is a doubling of company ARR in 5 years.