Intermediate metrics
Activation Rate
The % of new users who reach your product's core value moment within a defined window. The most predictive early-stage metric for long-term retention.
#SaaS
27 results
Glossary
Beginner metrics
ARR - Annual Recurring Revenue
ARR is the annualized value of all active subscriptions. It is the primary top-line metric for SaaS companies and a key signal for fundraising readiness.
Beginner metrics
Churn Rate
Churn rate is the percentage of customers or revenue a business loses over a given period. The most important retention metric for any subscription business.
Intermediate finance
EBITDA
EBITDA measures a company's operating profitability before interest, taxes, depreciation, and amortization - a proxy for core business cash generation.
Intermediate metrics
Expansion MRR
Expansion MRR is additional monthly recurring revenue from existing customers via upgrades or seat additions - the engine behind net negative churn in SaaS.
Beginner strategy
Freemium
A model offering a permanent free tier alongside paid plans. Works when the marginal cost per free user is low and the upgrade trigger is clear and natural.
Beginner finance
Gross Margin
Revenue minus Cost of Goods Sold, divided by revenue. The foundational profitability metric that drives SaaS valuation multiples and unit economics.
Intermediate growth
LTV:CAC Ratio
The LTV:CAC ratio measures how much lifetime value you earn per dollar spent acquiring a customer. A 3:1 ratio is the SaaS benchmark.
Beginner metrics
MRR - Monthly Recurring Revenue
MRR is the total recurring subscription revenue a SaaS company earns each month. It is the operational heartbeat metric for tracking short-term growth.
Intermediate metrics
NRR - Net Revenue Retention
NRR measures how much recurring revenue is retained and grown from existing customers. Above 100% means the company grows revenue without any new customers.
Intermediate finance
Payback Period
Months to recover the cost of acquiring a customer from that customer's gross profit contribution. Best-in-class SaaS is under 12 months.
Intermediate growth
Product-Led Growth (PLG)
Product-led growth is a go-to-market strategy where the product itself drives user acquisition, conversion, and retention without a traditional sales team.
Intermediate fundraising
Revenue-Based Financing
Revenue-based financing gives startups capital in exchange for a percentage of future revenue, with no equity dilution and no fixed monthly payments.
Intermediate metrics
Rule of 40
Growth rate % plus EBITDA margin % must equal or exceed 40. The single metric VCs use to balance SaaS growth against profitability efficiency.
Intermediate finance
Unit Economics
The direct revenues and costs associated with a single unit of a business, used to determine per-unit profitability and scalability.
Beginner ai
Vertical AI
Vertical AI is an AI product built for a specific industry or workflow, combining foundation model capabilities with deep domain expertise and proprietary data.
Beginner business-model
XaaS
Everything as a Service - the delivery model where any product or capability is offered via subscription over the internet instead of as a one-time purchase.
Guides
Intermediate ai
10 min AI for Customer Support
How to build an AI-powered customer support system that deflects 60-80% of tickets while keeping CSAT high.
Intermediate ai
10 min How to Evaluate AI Tools
A framework for selecting AI tools and APIs for your startup stack: benchmarking, cost estimation, vendor risk, and running a time-boxed POC.
Intermediate ai
9 min How to Reduce AI API Costs
Six proven strategies to cut LLM API spending without sacrificing product quality - from caching to model tiering to open-source alternatives.
Intermediate product
15 min How to Price Your SaaS Product
A practical guide to SaaS pricing strategy - which model to use, how to set your tiers, and the exact research process to find your right price.
Intermediate growth
10 min How to Reduce Churn
A 6-step guide to reducing SaaS churn: identify why users leave, fix onboarding, run proactive customer success, and win back churned users.
Intermediate product
14 min How to Design SaaS User Onboarding
A practical guide to designing SaaS onboarding that activates users fast, reduces churn, and maximizes the ROI of every signup you earn.
Concepts
Intermediate ai
AI Go-to-Market Strategy
How AI startups should approach distribution, pricing, and sales - and why AI GTM differs fundamentally from traditional SaaS.
Articles
Intermediate strategy
12 min The Rise of Micro-SaaS
Micro-SaaS proves you don't need to raise millions or hire a team to build a valuable software business. Here's why the model works.
Intermediate metrics
14 min The 10 SaaS Metrics Every Founder Should Track
Most founders track vanity metrics. Here are the 10 SaaS metrics that actually predict growth, retention, and unit economics - with benchmarks.
Intermediate strategy
13 min How to Think About Pricing as a Startup Founder
Pricing is the fastest revenue lever in your business - no new customers required. Here's how to research, set, and raise prices with confidence.