29 Comments
User's avatar
Amit Mina's avatar

Great summary. Thanks. with such structured data you can pretty much automate investing in SaaS upto a certain amount. If SaaSgrid has APIs we can build it :)

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Justin Lane's avatar

Great article. A question I have is... if a person can have multiple user accounts would you count people or user accounts in your MAU/DAU metrics? I'm thinking it might depend on how the accounts are monetised? I'm guessing this isn't a new question..... interested in any thoughts.

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Anant's avatar

Hi Ethan! Great article. Quick question- What is the timeline for logo retention? Is it monthly, quarterly or annually? Thank you very much!

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Ethan Ruby's avatar

Since most SaaS companies have annual deals, I find it easiest to think about on an annual basis.

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Anant's avatar

Thank you. For clarity sake, 70-80% for SMBs annually is good logo retention?

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Ethan Ruby's avatar

Yes, it can be an OK figure if NDR is high.

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Lachlan's avatar

On the spreadsheet, if we sign annual subscriptions should we break that down by moth? Or just input the total amount in the month of renewal?

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Ethan Ruby's avatar

Divide the annual contract value by 12, and assign that value to each month.

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Rajeev Prasad's avatar

This would move already realized revenue to the future. I have a similar problem and wondering if there is a better way to accommodate for it.

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Fariba Toofanian's avatar

I understand ARR for annual contracts. But is ARR relevant to a truly month-to-month subscription business? How should I calculate Burn Multiple (net burn / net new ARR)? Do you suggest I calculate the year-end ARR as last month's MRR x12?

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Ethan Ruby's avatar

You can certainly multiply MRR * 12 to get ARR for the purpose of calculating burn multiple. However, if the month to month nature of your subscription business means you have high churn (<80% NDR at month 12), then many of these metrics won't be applicable. If that's the case, I recommend focusing on MRR, LTV, and burn rate as your north star metrics.

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Fariba Toofanian's avatar

Thank you for the quick reply. This makes a lot of sense.

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Sam's avatar

If LTV includes CAC, then 3x LTV:CAC implies 4x cumulative gross profit : CAC. Is that correct?

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Ethan Ruby's avatar

Yes, that's correct.

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Prakash Chandran's avatar

Hey founders! Want to easily bring in your Stripe data? The team at Xano.com has created a tool that will automatically fill in the customer revenue part of the SaaSGrid CSV with a simple Stripe export. Video instructions included.

https://www.xano.com/snippet/kRNV975S

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Scott's avatar

for enterprise software, would you include API/Integration accounts for DAU/MAU and DAU/MAU? Or should DAU/MAU and DAU/MAU only be for human accounts?

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Ethan Ruby's avatar

If customers primarily interact with you via API, it makes sense for that to count as active use.

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Flora Azucena's avatar

Very helpful, thank you!

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Pablo Núñez's avatar

Great article! Congrats :)

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Steven Forth's avatar

I fear this is missing the most important metric, which is Value to Customer (V2C). One will only have a sustainable business if one is actually providing value to customers. These metrics are too inwardly focussed.

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Steven Forth's avatar

Note, MIT refers to this as Economic Value to the Customer (EVC).

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Sumit's avatar

Emailed you the csv. its erroring out for us

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Jiri "Skzites" Fiala's avatar

SaaS days are over. So those metrics as well:)

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Francis C.'s avatar

These resources are excellent!

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Daniel Soliman's avatar

Great resource. Thanks! How would you enter a customer paying upfront for 3-years? They may also choose to add additional capacity during that period.

Spread it out over the 36 months, or just enter when and what was actually collected?

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Ethan Ruby's avatar

Yes, you would spread it out over 36 months, and add upsells as they occur.

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Category Pirates 🏴‍☠️'s avatar

great work 🏴‍☠️

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