Glossary

3 High/3 Low Metrics Framework — Six metrics to track after MRR and growth: push CAC, sales effort, and churn low; push ACV, expansion revenue, and referrals high (Ch 6)

ACV (annual contract value) — What a customer pays over a year. The author prefers it to LTV for bootstrappers (Ch 4, Ch 6)

ARPA — Average revenue per account, usually per month (Ch 3)

Aspirational pricing — Keeping a price customers call too high and improving the product until it is worth it (Ch 3)

Big 5 — The most common B2B SaaS marketing approaches: SEO, PPC, cold outreach, integration marketing, content marketing (Ch 4)

Bootstrapped — In this book: self-funded, bootstrapped, or mostly bootstrapped; capital-efficient and customer-funded, even with a small round (Ch 1)

CAC (cost to acquire a customer) — All acquisition costs in a period divided by customers acquired. Judged by payback period (Ch 6)

CAC payback period — Months until a customer’s payments cover their CAC. Bootstrappers: about 2–6 months (Ch 6)

Cap table — The list of who owns what share of the company (Ch 7)

Crackpots / No-Brainers / In-Betweens — The three buckets for feature requests: decline, build, or judge with three questions (Ch 2)

Dual funnels — A Cheat Code: a wide low-touch funnel and a premium high-touch funnel run together (Ch 4)

Economic moat — A lasting advantage that protects market share and profit (Ch 2)

Escape velocity — Product-market fit plus one or more repeatable growth channels (Ch 1)

Expansion revenue — A Cheat Code: existing customers pay more as they get more value (Ch 3, Ch 6)

False moat — Unique features, which competitors copy within months (Ch 2)

Feature gating — Unlocking features or integrations at higher tiers (Ch 3)

Founder gut — The founder’s instinct for the right path, developed by experience and by learning from others (Ch 7)

Founder retreat — 48–72 hours alone, without media, to reflect on yourself and your direction (Ch 7)

Freemium — A forever-free plan. Offered by 17% of SaaS products, against 66% that offer free trials (Ch 3)

Grandfathering — Keeping existing customers at their old price after an increase (Ch 3)

Gross revenue churn — Cancelled MRR ÷ MRR at the start of the month (Ch 6)

High-touch funnel — A sales process with a lot of human contact (demos, calls). Needs at least about $500 a month per customer (Ch 4)

ICE — Ranking approaches by Impact, Confidence, and Ease, each scored 1–10 (Ch 4)

Integration marketing — Integrating with a partner product and promoting the integration together (Ch 4)

Low-touch (no-touch) funnel — Self-serve sign-up and trial, for wide markets and low prices (Ch 4)

Marketing changelog — A dated record of every marketing change, used to trace changes in results (Ch 4)

Mastermind — A small, recurring group of peer founders for growth, accountability, and support (Ch 7)

Minimum path to awesome (MPA) — The shortest route to the moment a customer says “This is amazing!” (Ch 6)

Mostly bootstrapped — Raised one small round, usually $100,000–500,000, without following the VC path (Ch 1)

MRR / ARR — Monthly / annual recurring revenue (Ch 1, Ch 6)

Net negative churn — A Cheat Code: expansion revenue exceeds revenue lost to cancellations, so you grow without new customers (Ch 6)

North Star metrics — MRR and month-over-month growth rate (Ch 6)

Opening the floodgates — Removing the credit-card requirement for trials once the business is established (Ch 3)

Plateau number — Maximum MRR = new MRR added per month ÷ monthly churn rate (Ch 6)

Poor person’s split test — Changing a price for everyone and comparing new cohorts with old ones (Ch 3)

Product-market fit — “You’ve built something businesses want and are willing to pay for.” Often firms up around $10–20K MRR (Ch 1)

Retention grid — A cohort table of MRR kept by sign-up month and account age (Ch 6)

Risk vs. Certainty — Delegate work you know how to do; keep uncertain, founder-level work (Ch 7)

Rob’s Rule of 10 — Raise prices on existing customers only if it grows MRR by at least 10% (Ch 3)

SaaS Cheat Codes — Four super-strategies: expansion revenue, virality, net negative churn, dual funnels (Ch 1)

Sales effort — Days from first demo to close, and calls needed to close (Ch 6)

Self-funded — Funding a new startup from the profits of existing products (Ch 1)

Siren songs — Distractions founders chase when growth is slow: translation, white labeling, new verticals, underpricing (Ch 2)

Speed bump vs. roadblock — An obstacle that slows you, versus one that ends the business. Most are speed bumps (Ch 7)

Stair Step Method — One product with one channel, then several products until you own your time, then standalone SaaS (Ch 1)

Task-, project-, owner-level thinkers — People who focus on the next task, on multi-week projects, or on processes and strategy (Ch 5)

Three Factor Framework — Filtering marketing approaches by speed, cost, and scalability (Ch 4)

Value metric — The per-unit measure you charge by, such as seats, subscribers, or usage (Ch 3)

Viral coefficient — The number of new users each user brings in. Virality, a Cheat Code, means it is above zero (Ch 6)

Viral loop, strong vs. weak — Value from connecting people or sending the product to others, versus branding badges on customer output (Ch 6)

White labeling — Licensing your product to be sold under another company’s brand (Ch 2)