No. 16Pricing & the numbers13 min read

The seven numbers that run the business

17 August 2026

There are about seven numbers that describe a software business, and most founders track twelve that don't. This is the list: the honest definition of each, the way each is commonly overstated, and — the useful part — what to actually do when one of them is bad.

The short version

→Seven numbers: MRR, growth rate, churn, ARPA, CAC, payback period, NRR. Everything else is a diagnostic for one of these.
→MRR must be normalised: an annual contract is its value ÷ 12, not a spike in the month it was signed. Getting this wrong makes a lumpy business look like a growing one.
→Payback period — months of gross margin to recover CAC — is the number that decides whether you can grow without funding. Under 12 months is roughly self-fundable.
→LTV:CAC is the most-quoted and least-reliable ratio in SaaS, because LTV depends on a churn estimate that is itself unreliable early. Use payback instead until you have real cohort data.
→Every one of these is downstream of something in the other five tracks. The value of tracking them is knowing which track to work on next.

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