• Monthly Recurring Revenue
• Shows how much revenue you make next month if you don‘t win
any new customers
(assuming no churn, no upgrades/downgrades, etc.)
• #1 SaaS metric. Much more important indicator than bookings or
(but cash inﬂow pays the bills!)
• 2 customers
• 1 on a $20/m monthly plan
• 1 on a $120/y yearly plan
=> MRR = $30
# of customers who churned
# of customers who could have churned
Including customers who can‘t cancel in the
denominator screws up your churn estimate!
If you include customers who can‘t churn in
your churn calculation, you‘ll be hit by a bad
surprise once they can leave!
Do you know these cars? When small children take a tour in them,
they believe they are steering them around the curves.
If you‘re attributing all conversions to your sales efforts you‘re doing
something similar. :)
Find out how well your signups are converting
without being called by a salesperson.
A/B test and calculate the ROI on your sales
investments based on the conversion uplift.
• True exponential growth is very, very rare in SaaS – requires virality
which most SaaS products don‘t have
• Most SaaS companies grow linearly and with step changes
• Even a modest exponential growth rate of 10% p.m. is very hard to
sustain for a longer period of time
Reading exponential growth into linear growth
numbers can lead to wrong conclusions
• Investors want historic numbers, not just a snapshot
• Many metrics are actionable – they tell you what to focus on, when
to invest in acceleration, etc.
• Metrics help you focus your team on what matters most