Episode 602 | Explaining SaaS Metrics to a Child

In episode 602, Rob Walling explains SaaS metrics to his kid. This is a great episode to listen to if you are unfamiliar or not well-versed in SaaS because we dig into from first principles, starting with dollars, revenue, and the purpose of businesses, all the way to SaaS metrics like MRR, ACV, and LTV. And, even if you are well-versed in SaaS metrics, you’ll likely learn a few things from this conversation. Episode Sponsor: Microsoft for Startups Founder Hub  Microsoft for Startups is on a mission to help all founders innovate and grow no matter their background, location, or progress. Microsoft for Startups Founders Hub is a platform that provides founders with free resources to help solve startup challenges, including access to Azure credits, development tools like Github, mentorship resources, Microsoft collaboration and productivity software like Teams and Outlook and more. The program is open to all and takes 5 minutes to sign up, with no funding required. Learn more aka.ms/startupsfortherestofus Topics we cover:  [1:55] MicroConf Local London tickets are on sale  [3:17] Starting with the basics: money, dollars, and businesses  [7:01] Revenue  [7:12] Expenses  [10:51] SaaS  [13:29] Recurring revenue  [13:58] Average revenue per account (ARPA) [14:56] Monthly recurring revenue (MRR)  [15:08] Average revenue per customer  [17:08] Annual contract value (ACV)  [18:18] Churn [19:30] Differences between Revenue Churn and Customer Churn  [21:18] Lifetime value  [22:10] Average customer lifetime value  [25:49] Customer Acquisition Cost (CAC) If you have questions about starting or scaling a software business that you’d like for us to cover, please submit your question for an upcoming episode. We’d love to hear from you. Subscribe & Review: iTunes | Spotify | Stitcher