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 :)
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.
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?
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.
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.
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.
Every week, I tackle one specific financial "trap" facing young Australians, and I run the Total Cost of Ownership (TCO) model on it to see if it's actually worth it.
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This Week: The HECS Trap: Why paying it off early is mathematically wrong!
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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 :)
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.
Hi Ethan! Great article. Quick question- What is the timeline for logo retention? Is it monthly, quarterly or annually? Thank you very much!
Since most SaaS companies have annual deals, I find it easiest to think about on an annual basis.
Thank you. For clarity sake, 70-80% for SMBs annually is good logo retention?
Yes, it can be an OK figure if NDR is high.
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?
Divide the annual contract value by 12, and assign that value to each month.
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.
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?
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.
Thank you for the quick reply. This makes a lot of sense.
If LTV includes CAC, then 3x LTV:CAC implies 4x cumulative gross profit : CAC. Is that correct?
Yes, that's correct.
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
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?
If customers primarily interact with you via API, it makes sense for that to count as active use.
Very helpful, thank you!
Great article! Congrats :)
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.
Note, MIT refers to this as Economic Value to the Customer (EVC).
Emailed you the csv. its erroring out for us
These resources are excellent!
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?
Yes, you would spread it out over 36 months, and add upsells as they occur.
great work 🏴☠️
Hello Guys! 👋
Every week, I tackle one specific financial "trap" facing young Australians, and I run the Total Cost of Ownership (TCO) model on it to see if it's actually worth it.
Comment down below what you think I should write about next week?
This Week: The HECS Trap: Why paying it off early is mathematically wrong!
If you like it, please consider subscribing, it will help us grow and provide better articles that you will love!
https://substack.com/home/post/p-181857439
Hope you enjoy! ☺️