A Smart Bear: Startups and Marketing for Geeks

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Kung Fu

A Smart Bear: Startups and Marketing for Geeks

Instead, watch payback period for acquisition efficiency, watch retention for product/market fit, watch expansion revenue for long-term growth, and watch gross margin for long-term profitability. A reliable paid acquisition channel results in a somewhat stable business. Sales” is not a dirty word.

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The unprofitable SaaS business model trap

A Smart Bear: Startups and Marketing for Geeks

Even with a great retention rate (e.g. time to earn back the revenue to cover all your customer acquisition expenses) 75% annual retention. But for the few who do, they can maintain growth rates of X%/yr where X is much larger than cancellation, and do so with very little acquisition costs. ” It’s worse.

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Deep dive: Cancellation rate in SaaS business models

A Smart Bear: Startups and Marketing for Geeks

For a company laser-focussed on accelerating the number of active users, it might be actually worth having high cancellation rates if it meant an even higher acquisition rate. for three months, for a retention after three months of (0.85) 3 = 0.61. Sign up for AppSumo 's daily deals specifically for web geeks & entrepreneurs.