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
17 results
Glossary
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.
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 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.
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.
Guides
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 product
14 min How to Design SaaS User Onboarding That Actually Works
A practical guide to designing SaaS onboarding that activates users fast, reduces churn, and maximizes the ROI of every signup you earn.
Articles
Intermediate strategy
12 min The Rise of Micro-SaaS: Building Small, Profitable Software Businesses
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.