How To Calculate Churn And Churn Rate For SaaS Companies: A Complete Guide

If there's one business metric that rules them all - it's churn. No wonder, many executives and VCs call it "The Silent Killer". And despite that most of the time everyone in the tech ecosystem (founders, investors, media, etc) are focused on nailing growth

2 years ago

SaaS Magic Number: measuring scaling efficiency

Tons of metrics can be calculated for any SaaS business. In order to determine how your start-up is performing in a business environment, it's essential to calculate the SaaS Magic Number and various other sales efficiency metrics. Although the metric is overlooked in the SaaS startup community, it’

5 years ago

What does the Rule of 40 tell about a SaaS company?

The Rule of 40 emerged a few years back at a time when many SaaS companies started to go public. Unlike traditional public on-premise incumbents, SaaS companies do not repay instantly the customer acquisition costs (CAC) and require at least 6-12 months of payback period to recoup it. Capital markets

5 years ago

MRR (monthly recurring revenue): the ultimate guide for SaaS

After writing this post, I found out that it has gotten a bit out of proportion, so below is a short table of contents: Sections: * Intro * Metric vs Reporting (GAAP, IFRS) * Definition: what is MRR (monthly recurring revenue)? * Tracking MRR and why its important? * How to calculate MRR and its

5 years ago

Excel template for cohort analysis and customer life time value

Whether you are a founder or an analyst assessing an attractiveness of a SaaS product or recurring b2c marketplace, one thing that must be at your fingertips is the understanding of a Customer Life Time Value (LTV). Despite the absolute value of LTV does not tell you much, when compared

8 years ago