SaaS (Software as a Service) is a subscription-based software model. The main advantage: recurring revenue (MRR — Monthly Recurring Revenue) and low marginal cost (adding a new user is cheap). Salesforce, Notion, and GitHub are globally successful SaaS examples.
Key SaaS health metrics: MRR (monthly recurring revenue), ARR (annual), Churn rate (subscriber loss), LTV (Customer Lifetime Value), CAC (Customer Acquisition Cost). LTV/CAC > 3 is a healthy ratio. Freemium (free + paid): wide reach, but low conversion. Product-led growth (PLG) — the product itself becomes the marketing tool.
Our courses on this topic