Alp SuleimanGrowth Partner

Knowledge Base

Every question and definition on the site, on one page.

This page gathers the frequently asked questions, concept definitions, guides, benchmarks, tools and cases published on alpsuleyman.com as questions, answers and definitions. The source of every answer is the page it links to, where the detail and the basis for each figure sit.

Machine-readable version:/llms.txt/llms-full.txt

164 questions

Frequently asked questions

Every frequently asked question on the site, grouped by page title. When the same question appears on more than one page, it is listed once with each page's answer and source.

Growth Partnership8

Open the page →

How is this different from an agency?

Agencies usually run campaigns or channels. Growth Partnership works on the growth system itself: focus, strategy, the revenue funnel, experiments and ownership. In execution we work alongside your team and, where needed, the agencies you already use.

Source: Growth Partnership

How is it different from a fractional CMO or a growth consultant?

A consultant often presents a strategy and leaves; a fractional CMO mostly runs the marketing function. Growth Partnership is not limited to marketing: it treats product, pricing, sales and organization as one growth system, and aims to hand that system over to your team.

Source: Growth Partnership

How many companies do you work with at once?

Three at most. I deliberately keep capacity limited so I can be genuinely involved in strategy, execution and decision-making in every partnership.

Source: Growth Partnership

How does a partnership start?

With the Partner Form. I read your message, and if I think we can do good work together, I get back to you. The first conversation is exploratory: both sides assess the fit. If it fits, we start with diagnosis.

Source: Growth Partnership

Which companies is it right for?

I look at the situation more than the sector: companies whose growth is stuck without a clear reason and who are ready to build a lasting system. The stage a company is in determines how the focus and strategy are chosen.

Source: Growth Partnership

Do you work remotely or on site?

We set the working arrangement together, around your team's rhythm. What matters is not the location but that regular, clearly owned rituals such as the weekly growth review keep running.

Source: Growth Partnership

What do you need from our team?

A leader who can make decisions, an internal owner for growth and access to data. And openness to dropping what isn't working. Since the system stays with your team in the end, the team needs to be involved from the start.

Source: Growth Partnership

When will we see results?

Diagnosis is completed within the first 4–8 weeks and the 90-day focus becomes clear. Lasting results come as the system settles in. This is not a quick fix; it is foundation work.

Source: Growth Partnership

Growth Approaches5

Open the page →

What is growth hacking?

An approach that uses fast, low-cost experiments to find the lever that triggers growth. It is about the speed of testing and learning, and it adds most value early on, when you don't yet know what will work.

Source: Growth Approaches

What is growth marketing?

A marketing practice that keeps improving channels, messaging and budget through measurement. It is a sustained rhythm rather than a one-off experiment, and it mainly looks at acquisition, conversion and retention.

Source: Growth Approaches

Are growth hacking and growth marketing the same thing?

No, though they overlap. Growth hacking is closer to discovering; growth marketing is closer to running what you found efficiently and sustainably. Many teams do both, at different stages.

Source: Growth Approaches

What is the difference between growth consulting and Growth Partnership?

A consultant usually delivers a strategy or an audit and execution stays with you. Growth Partnership joins strategy, execution and decision processes, builds the growth system with your team and hands it over. The goal is for the system to stay in your team.

Source: Growth Approaches

Which is right for a small company?

It depends on the stage. Without product-market fit, fast experiments; with a working channel, channel efficiency; when the blockage is at system level, a partnership. Size alone doesn't decide it; where the problem sits does.

Source: Growth Approaches

The Nominal Growth Illusion5

Open the page →

What is the difference between nominal and real growth?

Nominal growth is the change in the revenue figure. Real growth is what remains after removing the effect of price rises, and shows how much the company actually grew in purchasing power.

Source: The Nominal Growth Illusion

How do you calculate real growth?

(1 + nominal growth) ÷ (1 + inflation) − 1. If revenue rose 40% while prices rose 45%, real growth is about −3.4%: revenue grew, the company shrank.

Source: The Nominal Growth Illusion

Divide the nominal growth multiple by the cumulative inflation multiple for the same period. If revenue grew 5.2× over four years while prices rose about 5.67×, real growth is 5.2 ÷ 5.67 − 1 ≈ −8%. A company that grew 420% in lira terms actually shrank in purchasing-power terms.

Source: Real Growth Calculator

Which inflation rate should I use?

When comparing annual revenue with annual revenue, the annual average change in CPI is the best fit. If your cost base differs markedly from general inflation, also calculate with your own cost index and state which one you used.

Source: The Nominal Growth Illusion

Doesn't TMS 29 solve this?

TMS 29 restates financial statements to purchasing power at the end of the reporting period, an important step for reporting. But growth decisions are mostly made on monthly dashboards, sales targets and management decks that use nominal figures. That is where the illusion lives.

Source: The Nominal Growth Illusion

Isn't growth in dollars enough?

Dollar growth matters for imported inputs, foreign-currency debt or comparison with overseas competitors. But the exchange rate need not move at the same pace as domestic prices. Read it together with real growth in lira.

Source: The Nominal Growth Illusion

Value Debt4

Open the page →

What is value debt?

The gap that builds up, as you grow, between the value you promise users and the value you actually deliver. Its interest is paid quietly, in churn.

Source: Value Debt

How is value debt different from technical debt?

Both are taken to move fast and both charge interest. Engineers see and discuss technical debt. Value debt disappears into the growth chart, so most of the time nobody tracks it.

Source: Value Debt

Is borrowing always wrong?

No. Taking a shortcut to grab a market or make a funding round can be smart. The problem is not knowing you borrowed, not recording it and never paying it back.

Source: Value Debt

How do I measure value debt?

There is no single number. Read new-cohort retention, time to first value, the type of support tickets and the discount needed at renewal together. The check above turns that view into a rough reading.

Source: Value Debt

Growth in the AI Era4

Open the page →

Who is an "AI tourist"?

A term from a16z: a user who signs up for an AI product, tries it for a couple of months and then leaves. a16z writes that, because of them, early retention curves are a less decisive indicator of long-term retention, and it suggests measuring retention and CAC from M3 instead of M0.

Source: Growth in the AI Era

If inference cost is falling, why are unit economics still a problem?

a16z says the cost of an LLM of equivalent performance falls about 10x a year, while adding that its methodology is "far from perfect" and the rate may slow. Ethan Ding argues that demand moves to the newest model, so subscription margins don't recover.

Source: Growth in the AI Era

Does an annual plan fix a retention problem?

It hides the problem in the number; it doesn't fix it. Poyar notes that NRR on annual plans runs 10-20 points above monthly; a16z says high retention on annual contracts can give false confidence and suggests looking at usage and adoption.

Source: Growth in the AI Era

Why split ARR into experimental and serious spend?

In Poyar's data, products in the low price bands show markedly weaker retention, and he himself suggests separating experimental spend from serious spend. The method section of this guide proposes adapting that split to your own price structure, as a hypothesis.

Source: Growth in the AI Era

Cohort Analysis5

Open the page →

What is the difference between a cohort and a segment?

A cohort groups users by a shared starting point (usually signup period) and follows them over time. A segment groups users by an attribute (channel, plan, device). The two combine: building a separate cohort matrix for each channel is the only way to see low retention in one segment.

Source: Cohort Analysis

How many cohorts are enough?

There is no magic number. You need at least a few cohorts to see differences between them, but the number of users per cohort matters more: Amplitude warns against drawing conclusions from small cohorts. If cohorts are small, widen the period; build monthly cohorts instead of weekly ones.

Source: Cohort Analysis

Should I build weekly or monthly cohorts?

Look at your product's usage rhythm. Weekly cohorts are natural for a product used daily, monthly cohorts for a monthly subscription. As the period shortens, each cohort has fewer users; you have to balance the two.

Source: Cohort Analysis

How should I define an “active user”?

Start with a definition that counts the core action in which the user gets value; logging in alone is usually too weak. Also know your tool's choice between counting “on that day” (On) and “on that day or after” (On or After): Amplitude and Mixpanel name the two counts separately and they give different results.

Source: Cohort Analysis

Does cohort analysis prove an improvement worked?

Not by itself. As Amplitude points out, cohort analysis reveals associations, not causes. To see the effect of an improvement, randomly split users in two and compare the two groups' cohort curves.

Source: Cohort Analysis

Unit Economics Guide5

Open the page →

What is unit economics?

An analysis that compares the cost of winning and keeping a customer with the gross profit they bring over their lifetime. Its core measures are ARPU, gross margin, CAC, LTV, LTV:CAC and CAC payback.

Source: Unit Economics Guide

What is a good LTV:CAC ratio?

A common rule of thumb is about 3 or higher. It is not a law: a company with high margin, low churn and plenty of cash can be comfortable with less, while a cash-tight one may need more than 3.

Source: Unit Economics Guide

How many months should CAC payback be?

A frequently quoted rule of thumb is under 12 months, but that too depends on your cash position. The longer the payback, the more capital growth needs.

Source: Unit Economics Guide

How do I calculate LTV?

In its simple form: ARPU × gross margin ÷ churn rate (for the same period). Use monthly ARPU with monthly churn. For new products churn hasn't settled, so read the result as an estimate.

Source: Unit Economics Guide

How does inflation affect unit economics?

Revenue and costs rise at different speeds. If you measure LTV at today's prices and CAC at past prices, the ratio looks better or worse than it is. Both sides should be brought to the same price level.

Source: Unit Economics Guide

Growth Cases4

Open the page →

Why is every figure caveated as a 'company claim'?

Because that is what it is. The annualized revenue of a private company is not an audited number; it is a founder's or an investor's statement. The archive does not hide this, it writes it next to the figure. The claim itself is data too: when it was said, under which definition and in which context all teach something.

Source: Growth Cases

Why are cautionary cases in the archive?

Because nothing shows that a wave brings revenue but not a company better than a wave that has broken. The same loop shape appears in rising and falling cases; the difference is made by a reason to return, margin and trust. Reading only the winners is survivorship bias.

Source: Growth Cases

How much of this applies to a product in Türkiye?

The mechanism applies, the scale does not. Viral output, creator programs and launch cadence work with low traffic too; but a dollar-priced model and a lira-paying customer build margin differently. Each case's 'what it teaches' section does that translation and says it is opinion.

Source: Growth Cases

Why doesn't a case page praise or condemn the company?

The aim is not to grade but to make the mechanism readable. The verdict is about the strength of the public evidence, not about the company. 'Perception level' does not mean the company is bad; it means an outsider has no outcome data in hand.

Source: Growth Cases

Metric Tree5

Open the page →

What's the difference between a North Star metric and a KPI?

KPIs are the many indicators that track the health of a team or process. The North Star is the single metric that sets the shared direction for the whole company; KPIs usually live in the input and lever layers of the metric tree.

Source: Metric Tree

Can a company have more than one North Star metric?

A single North Star is recommended; the point is for everyone to look at the same number. Companies serving very different customer groups can build separate trees per business unit, but each tree should still have one metric at the top.

Source: Metric Tree

What's the difference between an input metric and a lever?

Input metrics are the quantities that directly make up the North Star, such as new, retained and returning users. Levers are the more concrete, weekly-trackable measures teams work on to change those inputs.

Source: Metric Tree

Can I use the templates in this tool as they are?

The templates are a starting point. Adjust the names, definitions and links to your business model, and don't start measuring until you've defined what the 'core value action' means in your product.

Source: Metric Tree

How often should I update my metric tree?

Tracking levers weekly and input metrics monthly is a common rhythm. Revisiting the tree's structure during quarterly planning, or when the business model changes significantly, is usually enough.

Source: Metric Tree

Investment Readiness5

Open the page →

Does this check predict an investor's decision?

No. An investor's decision depends on the team, market, timing and relationships, among many other things. This check is only a self-assessment of your readiness on the growth and metrics side.

Source: Investment Readiness

Is my data sent anywhere?

The calculation runs in your browser and no separate request is made to send your answers. However, your choices are written into the link in the address bar; whoever you share it with sees the same result. Be careful who you share the link with.

Source: Investment Readiness

Are LTV/CAC of 3 and a 12-18 month payback hard rules?

No. They are rules of thumb widely used in the industry. Enterprise sales can justify longer periods and low-priced products shorter ones. What matters is knowing a threshold that makes sense for you and measuring it consistently.

Source: Investment Readiness

Why is real growth a readiness question?

In a high-inflation environment, nominal growth can be overshadowed by price increases. Investors expect you to separate the two, and not doing so can erode trust. See the Nominal Growth Illusion page for detail.

Source: Investment Readiness

My score is low. What should I do?

Start with the three weakest areas on the result page. Closing one or two gaps often changes the overall picture noticeably. Retake the check when you are ready.

Source: Investment Readiness

Pricing Model Picker5

Open the page →

Why is outcome-based pricing not right for everyone?

Because inference cost and the failed attempt stay with the seller. Bessemer lists three conditions: confidence in performance, the ability to absorb cost variance, and a clear, measurable outcome. Poyar notes that many enterprises still crave predictability. That is why the tool recommends outcome-based pricing only when all three conditions hold together.

Source: Pricing Model Picker

Why is hybrid so common?

In Poyar's 2026 survey (230+ software companies, April–May 2026, self-reported) hybrid was the most common model (hybrid = a combination of two or more models): 37%, up from 25% twelve months earlier. In ICONIQ's July 2026 report (Q4 2025 and Q2 2026 surveys of ~300 software executives, self-reported), consumption-based pricing rose from 35% to 42% in six months and outcome-based from 18% to 23%; companies blend 1.7 models on average. These are survey results; they do not show what is right for you.

Source: Pricing Model Picker

Is seat-based pricing over?

In Poyar's words, seats are not necessarily dying but are less effective than they used to be. Where value scales with the number of users, a seat can still make sense. As automation grows, customers need fewer seats, and revenue can fall as the product succeeds.

Source: Pricing Model Picker

Can I offer more than one model at once?

In Poyar's 2026 survey, 29% of companies let customers choose between several models (230+ companies, self-reported). The option gives customers flexibility but complicates the price page and billing. Starting with one model and adding a second once usage data arrives is the healthier order (rule of thumb).

Source: Pricing Model Picker

Why does token pricing not fit everyone?

In Bessemer's words: Tokens work for technical buyers but confuse everyone else. A token relates to your cost, not to the customer's work. For a non-technical buyer, a unit closer to value (a resolved ticket, a prepared file) or included usage inside a plan is easier to understand.

Source: Pricing Model Picker

Growth Claim Check4

Open the page →

Does the tool give a number or a score?

No. It doesn't estimate, correct or benchmark the number. It only shows which questions the claim answered on its way in; the corrected number comes from your own measurement.

Source: Growth Claim Check

Why does a perception measurement decide the reading on its own?

The other four questions adjust a measurement. If the measurement is a survey answer, there is no time or outcome to adjust. Perception is valuable, but it doesn't replace an outcome metric.

Source: Growth Claim Check

What if we can't build a control group?

Compare with older cohorts at the same age, or roll the tool out in stages; the team or segment whose turn hasn't come yet becomes a temporary comparison. If neither is possible, write that next to the number.

Source: Growth Claim Check

Where are my answers kept?

There is no sign-up; the reading runs in your browser and no separate request is made to send your answers. So the reading can be shared, the answers are written to the link as a short code; if you share the link, whoever opens it sees them too. The claim sentence is not written to the link.

Source: Growth Claim Check

Experiment Capacity6

Open the page →

With AI we ship ten variants a week. Why doesn't this tool change its answer?

Because the sample size does not depend on who wrote the variant. There is no AI in the formula: only traffic, base rate and the effect you want to see. Building became free; knowing did not. Adding variants splits traffic and lowers power per experiment.

Source: Experiment Capacity

We run experiments in parallel. Why is the yearly count computed back to back?

In a layered setup several experiments can share the same traffic, but each still waits for its own sample from that same traffic. The bottleneck is not 'how many at once' but 'how many weeks each, and at what effect size'. Overlapping experiments on the same page or flow also carry interaction risk.

Source: Experiment Capacity

The result says 'cannot be seen at this traffic'. What should I do?

Three paths: make a bigger change and look for a bigger effect; measure a step higher in the funnel that sees more users; or move from A/B to coarser but honest methods such as before/after comparisons, cohort tracking and holdouts. Deciding small improvements by principle, without measuring, is also a method; an A/B test run as a ritual is not.

Source: Experiment Capacity

My base conversion is very low, like 0.5 percent. Does the tool still work?

It works, but the required sample grows a lot; low-rate metrics need disproportionate traffic to show an effect. Often the right answer is to measure a higher intermediate metric, such as reaching the checkout page. That is the same direction as Kohavi's advice on sensitive surrogate metrics.

Source: Experiment Capacity

Why do you ask for the win rate?

Because the probability that a significant result is real depends on how many of your experiments truly work. The large-company rates Kohavi reports range from 8 to 33 percent. If you do not know yours, 10 percent is a reasonable start; an optimistic guess makes the tool optimistic too.

Source: Experiment Capacity

Can I use it for a metric like revenue or basket size?

This version assumes a binary metric such as conversion and builds variance as p(1−p). For continuous metrics you need to measure variance from your own data and put it into the same formula. Variance reduction techniques such as CUPED also lower the sample; they are not included here.

Source: Experiment Capacity

What is a good retention rate?3

Open the page →

Are retention and churn the same thing?

They are complements. Retention is the share that stays, churn the share that leaves. 90% retention means 10% churn, but both must be measured on the same cohort and definition.

Source: What is a good retention rate?

Over which period should I measure retention?

By the natural usage rhythm of the product. Lenny's benchmark uses month 6, SaaS Capital a one-year cohort. What matters is keeping the definition fixed and tracking your own curve over time.

Source: What is a good retention rate?

My number is below the 'good' in the table. What now?

First make sure you are looking at the right segment. Then isolate which cohorts and channels the losses concentrate in. A benchmark is not a diagnosis; it tells you where to look.

Source: What is a good retention rate?

What is a good NRR?3

Open the page →

Is a company bad if NRR is below 100%?

Not always. Below 100% is common for products selling to very small businesses; in Lenny's table the good threshold for that segment is roughly 80%. What matters is your position within your own segment, and its direction.

Source: What is a good NRR?

What is the difference between NRR and GRR?

GRR counts only losses and downgrades and cannot exceed 100%. NRR adds upsell, cross-sell and price increases. Together they show both leakage and growth.

Source: What is a good NRR?

How do I calculate NRR?

Divide today's monthly revenue from people who were customers a year ago by their total monthly revenue back then. New customers enter neither number. The calculator does these steps for you.

Source: What is a good NRR?

What is a good LTV:CAC ratio?3

Open the page →

Should LTV:CAC be 3?

3 is a guideline threshold; Skok describes these as guidelines only. Healthy businesses may fall below it at first. Use it as a starting point for discussion, not a target.

Source: What is a good LTV:CAC ratio?

Is a very high ratio good?

The source does not answer this directly; it says the best businesses reach 7-8. A high ratio signals strong economics, but read it together with CAC payback when deciding how fast to push growth.

Source: What is a good LTV:CAC ratio?

When should I calculate LTV?

When you have enough customers and a real retention history. An LTV computed from a few months of data is unreliable; in the early days cohort retention is a sturdier thing to watch.

Source: What is a good LTV:CAC ratio?

What is a good CAC payback period?3

Open the page →

Is 12 months good?

According to Skok, beyond 12 months profitability weakens; in Aleph's data the median is 16. So 12 months is a good reference, but with a high ACV it may not be realistic.

Source: What is a good CAC payback period?

Should I compute payback on revenue or gross margin?

On gross margin where possible. Sources may define the period differently; compare your definition with theirs before benchmarking.

Source: What is a good CAC payback period?

Why do fast-growing companies pay back sooner?

In Aleph's data companies growing above 50% have a median of 10 months. The report reads this as fast growth not being bought through inefficient acquisition; it is not a causal claim.

Source: What is a good CAC payback period?

What is a good churn rate?3

Open the page →

Is 1% monthly churn good?

Arithmetically, 1% monthly is about 11.4% annual loss, close to SaaS Capital's 90% gross retention threshold. It still depends on your segment and on whether you count revenue or customers.

Source: What is a good churn rate?

Can churn be zero?

In practice, no. Even for high-ACV companies the median gross retention is around 95%; aim to reduce loss meaningfully, not to eliminate it.

Source: What is a good churn rate?

Should I track churn through NRR or gross retention?

Both. Gross retention shows the loss, NRR shows it net of expansion. Looking only at NRR can hide weak retention.

Source: What is a good churn rate?

What is a good burn multiple?3

Open the page →

What should my burn multiple be?

On Sacks's suggested scale for venture-stage startups, under 1x is amazing and over 3x is bad. The scale is an investor's rule of thumb; the multiple is expected to fall as the company matures.

Source: What is a good burn multiple?

Why net new ARR and not gross bookings?

Per Sacks, churn nets against the denominator and raises the multiple. Using gross bookings would hide that loss and make the multiple look better than it is.

Source: What is a good burn multiple?

Is a high multiple always bad?

Sacks finds it acceptable in the early years, when sales have just started. If it does not fall as the company matures, he treats it as a warning sign.

Source: What is a good burn multiple?

Rule of 40: what is a good score?3

Open the page →

What should my Rule of 40 score be?

On the rule as Feld reports it, growth rate plus profit should add up to 40%; better is ‘awesome’. It is a rule of thumb with no measured industry average behind it.

Source: Rule of 40: what is a good score?

Who came up with the rule?

Feld writes that he heard it from a late stage investor at a board meeting, whose firm called it the 40% rule. He does not present it as his own.

Source: Rule of 40: what is a good score?

Which profit measure should I use?

Feld takes EBITDA as the baseline and backtests with the others. If you run your own infrastructure the results diverge; state the number you use.

Source: Rule of 40: what is a good score?

What is a good gross margin?3

Open the page →

What gross margin should a SaaS company have?

In Bessemer's cloud portfolio the average is 65–70%, with the middle 50% of companies at roughly 60–80%. Top performers sit at 75–85%+ depending on ARR band. The portfolio is not a random sample.

Source: What is a good gross margin?

Is gross margin for AI products the same as SaaS?

There is no single ‘AI margin’; the sources are separate samples. In BVP's 2025 sample Shooting Stars sit at 60%, slightly below SaaS peers (BVP gives no SaaS figure), and Supernovas at ~25%. ICONIQ's survey gives 45% for 2025, but the text does not define which segment it measures. Do not compare these directly with Bessemer's cloud portfolio through 1H21.

Source: What is a good gross margin?

Is a low gross margin bad?

In Bessemer's portfolio Twilio was strong at ~50% for much of its life; BVP ties Supernovas' low margin to trading profit for distribution. If you cannot write down why yours is low, it is a signal (our inference).

Source: What is a good gross margin?

Real Growth Calculator4

Open the page →

Which inflation rate should I use: annual average or December-on-December?

If you are comparing annual revenues, the annual average CPI change is more consistent, because revenue accrues across the year. If you are comparing year-end balances such as cash or debt, December-on-December fits better. The calculator lets you switch between both and see the difference.

Source: Real Growth Calculator

Can I use my own inflation rate instead of the official one?

Yes. With "My own rate" you can enter a single annual rate applied to every year. If your cost structure differs from headline CPI, for example mostly imported inputs or rent, this can give a more meaningful real growth figure for your company.

Source: Real Growth Calculator

Can revenue grow in lira but shrink in dollars?

Yes. In years when the exchange rate rises faster than inflation, lira revenue can grow while its dollar value falls. The reverse also happens. Which one matters depends on the currency of your costs and goals.

Source: Real Growth Calculator

Where does the inflation data come from and how current is it?

CPI values are TurkStat's official figures as tabulated by the Central Bank of the Republic of Türkiye (CBRT); the exchange rate is the annual average of the CBRT's daily indicative USD buying rates. Only complete years are used, and the last-updated date is shown in the data note under the results.

Source: Real Growth Calculator

Growth Check-up5

Open the page →

How do you measure growth health?

Not with a single number. You need to look at how fast revenue grows, whether customers stay, what growth costs and how long your cash lasts, together. This tool puts those four dimensions on one screen.

Source: Growth Check-up

What is a good burn multiple?

On Craft Ventures' scale, under 1 is amazing, 1–1.5 great, 1.5–2 good, 2–3 suspect and above 3 bad. Burn multiple shows how much cash you burn for every unit of net new ARR.

Source: Growth Check-up

Craft Ventures gives these rules of thumb for venture-stage startups: under 1× is amazing, 1–1.5× great, 1.5–2× good, 2–3× suspect, over 3× bad. Sacks notes that the bar rises at each stage.

Source: Burn Multiple Calculator

What is the Rule of 40?

It says your growth rate plus profit margin should be 40% or higher, a reference point often cited by investors such as Bessemer. A fast-growing company can run at a loss; a slow-growing one is expected to be profitable.

Source: Growth Check-up

It's a rule that says annual revenue growth plus profit margin should be 40% or more. In Bessemer's words, businesses above 40% are deemed increasingly valuable. It shows the balance between growth and profitability in a single number.

Source: Rule of 40 Calculator

How many months of runway is enough?

There is no universal number. We treat under 6 months as critical and 6–12 months as a caution zone; that is our working threshold, not market data. The reasoning: a fundraise or a serious cost reset takes months, and you need time to do it.

Source: Growth Check-up

There's no universal number. The test that matters is whether your break-even month comes before the month cash runs out. If profitability isn't in sight, remember that raising money takes time too, and act well before runway gets short.

Source: Runway & Default Alive Calculator

Will the result be wrong if I leave optional fields empty?

No. Fields left at 0 are not counted. If a dimension lacks enough data, its row shows "Not enough data" and it is excluded when picking the weakest dimension.

Source: Growth Check-up

Cohort Matrix Calculator6

Open the page →

What data should I paste into the cohort matrix?

One row per cohort: a label, the cohort size (M0), then the number of users still active in each period. Tabs, semicolons, commas or spaces all work; copying from Excel is enough. Rows can have different lengths: a newer cohort shows fewer periods. If you only have retention percentages, switch the value type to percent; M0 stays a head count.

Source: Cohort Matrix Calculator

How does my definition of active affect the result?

A lot. Loosen the definition and the matrix looks better while nothing has really changed. Before you run the tool, ask: does your active definition count the action where users get value, or only that they opened the app?

Source: Cohort Matrix Calculator

What does the plateau point mean?

Conditional retention stayed at or above the threshold (default 95%) for two periods in a row: within that window, loss slowed down. Nothing more. With few cohorts, or last periods resting on few people, a plateau can be chance; the tool flags periods with a denominator under 30 as "small sample".

Source: Cohort Matrix Calculator

Why does LTV show an "unobserved share"?

The projection carries the loss rate of your last observed periods forward. When you observe few periods relative to the horizon, part of the number rests on periods that have not happened yet; how much depends on the shape of the curve. When this share is high, read the LTV as an assumption rather than a measurement.

Source: Cohort Matrix Calculator

Is the "M1 +5 points" scenario a forecast?

No. It is a sensitivity calculation: if the first-period rate were 5 points higher and later periods carried that through at the same ratio, what would LTV be? Only an experiment shows whether such an improvement will happen. The calculation helps you weigh whether it is worth the engineering time to try.

Source: Cohort Matrix Calculator

Do my numbers get sent anywhere?

The calculation runs in your browser and makes no separate request to send your numbers. However, the matrix you paste (and the second segment's matrix, if any) is written into the link in the address bar. If you reload or share that link, the numbers travel with the address, and the address also reaches the server that serves the page. If the matrix is long, it is not written to the link at all. If the data is sensitive, anonymise the labels.

Source: Cohort Matrix Calculator

Unit Economics Calculator5

Open the page →

What is a good LTV/CAC ratio?

The commonly cited rule of thumb is 3:1. It is an industry reference point, not a law or a study result. Below 1 means you lose money on each customer. The more fundamental check is whether payback is shorter than average customer lifetime.

Source: Unit Economics Calculator

Why use gross margin when calculating LTV?

Because revenue is not all yours. LTV calculated before direct costs such as hosting, payment fees and support overstates what a customer is worth and misleads you on how much you can spend to acquire one.

Source: Unit Economics Calculator

How do you calculate CAC?

Divide total sales and marketing spend for a period (ads, salaries, tools, agency fees) by the number of new customers won in that period. Using ad spend alone understates CAC.

Source: Unit Economics Calculator

What is a good CAC payback period?

There is no single number; it depends on your sales model. The logical limit is that it must be shorter than average customer lifetime. Bessemer points to under 12 months for SMB, under 18 for mid-market and under 24 for enterprise.

Source: Unit Economics Calculator

If churn is zero, is LTV infinite?

The formula says so, but no customer base stays forever. If your churn is too low to measure yet or you are very early, enter a conservative estimate. The calculator does not show LTV at zero churn.

Source: Unit Economics Calculator

AI Product Unit Economics Calculator7

Open the page →

Where do I find token costs?

On your provider's API pricing page. Providers price per million tokens, with input and output separate and cached input and batch processing as separate lines. The defaults in this tool are examples, not current prices; take real prices from the page and token averages from your own logs.

Source: AI Product Unit Economics Calculator

What is the cache share and why does it not always make things cheaper?

The cache share is the portion of input tokens read from cache; cached reads are priced below normal input. But providers can charge separately for writing to the cache, and if the hit rate is low the saving shrinks. Output tokens are not affected by caching either. In this tool you enter only the cached share and the read ratio; cache write fees are not a separate line, so you can approximate their effect by entering a lower cache share. The example value is zero.

Source: AI Product Unit Economics Calculator

How do I choose the included requests (Q) in a hybrid model?

There is no fixed rule. Rule of thumb: keep Q below the loss threshold that the flat price covers, and check that the overage price covers cost per request. A second rule of thumb: you want a Q that keeps the typical user out of overage and moves heavy users into paying it. Change Q and watch the loss threshold, the blended margin and the chart.

Source: AI Product Unit Economics Calculator

If model prices fall, is the problem solved?

Not necessarily. This is an inference: the bill is price times tokens. If prices fall while users make longer or more requests, cost does not fall. The sensitivity table tests only a change in cost (what happens to margin if cost falls); to test growing usage, raise the typical user's requests or the token averages and compare the results.

Source: AI Product Unit Economics Calculator

How do I set the heavy-user multiplier and share?

From your logs: rank users by monthly requests, and look at how many times typical usage the top slice makes and what share of users it is. Where you cut the slice is a judgment call; run the tool with a few different cuts and see how far the result moves.

Source: AI Product Unit Economics Calculator

What should I track under outcome-based pricing?

Two things: the success rate and the cost of a failed attempt. In the tool every request is an attempt; revenue is success rate times price per outcome, and the inference cost of a failed attempt stays with you. According to Bessemer, a difficult customer issue can consume far more compute than anticipated, so track the success rate split by case difficulty rather than as one average (rule of thumb). The success-rate sensitivity shows where margin goes if the rate falls by 10 and 20 points. Enter the rate from your own logs; the default value is an example.

Source: AI Product Unit Economics Calculator

If the exchange rate rises, how much should I raise my price?

Separate the goal first, because there are two different answers. To keep your lira profit, price rise = cost share × rate rise; if cost is a third of net revenue, a 30 percent rate rise needs only about a 10 percent price rise (an example for illustration). To keep your margin percentage, since all cost is in dollars, the price must rise by the same percentage as the rate. If you are profitable, the second is always the higher price, and not every market will bear it. Choosing between them is a decision: profit amount or margin? The tool shows both and makes no rate forecast; you enter the rate and the scenario. If part of your cost is paid in lira, both results come out slightly overstated.

Source: AI Product Unit Economics Calculator

Runway & Default Alive Calculator4

Open the page →

How do you calculate runway?

In its simplest form: cash ÷ monthly net burn. Net burn is monthly expenses minus monthly revenue. 12 million in cash and 800 thousand of monthly net burn means 15 months of runway. If revenue is growing, real runway is longer; if expenses are rising, it's shorter. This tool accounts for both.

Source: Runway & Default Alive Calculator

What does default alive mean?

It's from Paul Graham's 2015 essay. If your expenses stay constant and your revenue keeps growing at the rate it has over the last several months, and you reach profitability on the money you have left, you're default alive. If not, you're default dead. In other words: would you survive without raising more?

Source: Runway & Default Alive Calculator

What's the difference between gross burn and net burn?

Gross burn is the total you spend each month; net burn subtracts revenue from that. Runway uses net burn, because that's what actually leaves the bank account.

Source: Runway & Default Alive Calculator

Why do I enter expense growth?

Graham's definition holds expenses flat, which is a conservative starting point. In reality, hiring and new tools push expenses up. Enter your planned expense growth and the result reflects your own budget. Leave it at zero and the calculation matches Graham's definition exactly.

Source: Runway & Default Alive Calculator

Burn Multiple Calculator4

Open the page →

How do you calculate burn multiple?

Divide net burn for a period by net new ARR for the same period. $9M of net burn and $4M of net new ARR in a quarter is 2.25×. Net burn is expenses minus the revenue you actually collect.

Source: Burn Multiple Calculator

What if net new ARR is negative?

The ratio stops making sense: the cash you burned brought no growth, and ARR actually shrank. Understand churn and contraction first; trying to optimise the multiple is the wrong question at that point.

Source: Burn Multiple Calculator

How do I read burn multiple if we're profitable?

If net burn is zero or negative, the company is generating cash and the multiple doesn't compute. A measure like the Rule of 40 is better for weighing growth against profitability.

Source: Burn Multiple Calculator

Should I measure it monthly or quarterly?

The formula works for any period, since both numbers cover the same one. But a monthly figure can jump on a single large deal. For decisions, quarterly or trailing twelve months is more reliable.

Source: Burn Multiple Calculator

Rule of 40 Calculator4

Open the page →

How do you calculate the Rule of 40?

Add annual revenue growth percentage to profit margin percentage. A company growing 30% with a 10% FCF margin scores 40. One growing 28% with a −6% margin scores 22.

Source: Rule of 40 Calculator

Should I use EBITDA or FCF?

Bessemer's definitions use free cash flow (FCF) margin. Many companies calculate it with EBITDA too. FCF reflects capital expenditure and working capital, so it's the stricter measure. Whichever you choose, be consistent.

Source: Rule of 40 Calculator

Should early-stage startups use the Rule of 40?

Usually not. Bessemer says efficiency scores like this are meaningful above $25M of ARR, and that early-stage companies should focus on burn multiple and the path to free cash flow.

Source: Rule of 40 Calculator

What is the Rule of X?

Bessemer's 2024 adaptation: growth rate is multiplied by a factor (about 2 for late-stage private companies) and added to FCF margin. The idea is that over the long run growth contributes more to value than profitability does.

Source: Rule of 40 Calculator

NRR & GRR Calculator5

Open the page →

How do you calculate NRR?

Take starting MRR, add expansion from existing customers, subtract contraction and churned MRR, then divide by starting MRR. 500k starting, 15k expansion, 8k contraction and 15k churn: (500 + 15 − 8 − 15) ÷ 500 = 98.4%. New customers are left out.

Source: NRR & GRR Calculator

What's the difference between NRR and GRR?

NRR counts expansion; GRR doesn't. So GRR can never exceed 100% and measures only losses. NRR shows whether the existing base grew on a net basis, expansion included.

Source: NRR & GRR Calculator

What does NRR above 100% mean?

Expansion from existing customers outweighs churn and contraction. Your recurring revenue grows even if you win no new customers, and new sales add on top.

Source: NRR & GRR Calculator

How do you annualise monthly NRR?

Raise the monthly rate to the twelfth power: 101% a month is about 112.7% a year. This assumes the same rate repeats every month. The most accurate annual figure comes from comparing last year's customer cohort's MRR then and now.

Source: NRR & GRR Calculator

Why isn't new-customer MRR part of NRR?

NRR measures only the health of the existing base. Include new customers and strong sales can hide weak retention. This tool shows new MRR only in the bridge and in ending MRR.

Source: NRR & GRR Calculator

ROAS Calculator5

Open the page →

What is a good ROAS?

There is no single right ROAS. The minimum is your break-even ROAS: 1 ÷ contribution margin. With a 30% contribution margin, anything below 3.33× loses money. Profitable growth needs a ROAS above that, one that protects your target margin — the tool calculates that too.

Source: ROAS Calculator

How do you calculate break-even ROAS?

First find what each sale leaves before ads: gross margin minus variable costs such as shipping and fees. Break-even ROAS is the inverse of that ratio. With a 45% gross margin and 15% variable costs, contribution is 30% and break-even ROAS is 1 ÷ 0.30 = 3.33×. If you track revenue including VAT, scale it up by the VAT rate.

Source: ROAS Calculator

What is the difference between ROAS and POAS?

ROAS measures revenue per unit of ad spend; POAS measures profit (here, contribution before ads). A POAS above 1 means ads pay for themselves in profit. When one campaign sells products with very different margins, POAS is the better guide.

Source: ROAS Calculator

Should ROAS include VAT?

Profit should be calculated on revenue excluding VAT, because the tax isn't yours. If your ad dashboard reports VAT-inclusive values, that's fine — just compare VAT-inclusive ROAS with a VAT-inclusive break-even ROAS. The tool puts both on the same basis.

Source: ROAS Calculator

Why is my ROAS high but the business isn't profitable?

Three common reasons: the break-even bar is higher than assumed (shipping, fees and returns were left out), the platform over-credits itself (counting orders that would have happened anyway), or fixed costs outside advertising consume the contribution. This tool fixes the first; attribution needs controlled tests and fixed costs need a break-even analysis.

Source: ROAS Calculator

Conversion Funnel Calculator5

Open the page →

How do you calculate conversion rate?

Conversion rate is the number of people who complete the target action divided by the number who reached that step, times 100. If 1,600 of 20,000 visitors sign up, the sign-up conversion rate is 8%. For the whole funnel, divide people at the last step by people at the first.

Source: Conversion Funnel Calculator

What is a good conversion rate?

There is no single meaningful number; it varies widely with industry, price, traffic source and what counts as a conversion. The most useful comparison is your own history: the same step, same channel, last month and last year. If you borrow an outside average, make sure its step definition matches yours.

Source: Conversion Funnel Calculator

Which funnel step should I focus on first?

Usually the one with the lowest rate, where most people drop off. Relative improvements have the same effect at every step, but a low-rate step is usually easier to improve. The final call depends on the cost of the fix and how confident you are in it.

Source: Conversion Funnel Calculator

What is the difference between funnel and cohort analysis?

Funnel analysis shows where users drop between steps; cohort analysis shows how groups who joined in the same period behave over time. A funnel answers 'where do we lose them?', a cohort answers 'do they stay?'. They're most useful together.

Source: Conversion Funnel Calculator

Should I improve conversion by percentage points or by percent?

They're different things. Going from 8% to 10% is a 2-point gain but a 25% relative increase. State which one you mean when reporting experiment results; this tool lets you try both.

Source: Conversion Funnel Calculator

CAGR Calculator6

Open the page →

What is CAGR and how is it calculated?

CAGR (compound annual growth rate) is the constant yearly rate at which a value would have grown from start to end. Formula: (End ÷ Start)^(1 ÷ years) − 1. Revenue that went from 4 million to 9 million in 3 years has a CAGR of about 31%.

Source: CAGR Calculator

What is the difference between CAGR and average annual growth?

A simple average adds up the yearly growth rates and divides by the number of years, ignoring compounding. A value that grows 50% and then falls 50% has a simple average of 0%, yet it actually lost 25%. CAGR accounts for compounding, so it reflects the true path from start to end.

Source: CAGR Calculator

Can I use CAGR for periods shorter than a year?

You can, but read it with care. Annualising six months of growth turns small differences into very large rates, and seasonality distorts the result. For short periods, reporting monthly growth or total growth is more honest.

Source: CAGR Calculator

How fast do I need to grow each year to reach a target?

Switch the calculator to "Target" mode and enter today's value, the target and the period. The result is the constant annual growth rate needed to get there. Comparing it with your historical CAGR quickly shows whether the plan is realistic.

Source: CAGR Calculator

Is it right to calculate CAGR on lira revenue?

It is right for nominal growth, but under high inflation a large part of the growth comes from price increases. To see real growth, run the same figures through the Real Growth Calculator or compare them in US dollars.

Source: CAGR Calculator

How do I find the doubling time?

If the same CAGR continues, the time to double is ln 2 ÷ ln(1 + CAGR). For a quick mental estimate, the commonly cited rule of thumb is the "rule of 72": divide 72 by the growth rate in percent. The calculator uses the exact formula.

Source: CAGR Calculator

Break-Even Point Calculator5

Open the page →

How do you calculate the break-even point?

Divide fixed costs by unit contribution margin, which is price minus unit variable cost. With 15,000 in monthly fixed costs, a price of 50 and variable cost of 30, unit contribution is 20 and break-even is 15,000 ÷ 20 = 750 units.

Source: Break-Even Point Calculator

What is the difference between fixed and variable costs?

Fixed costs are paid every month regardless of volume: rent, salaries, software subscriptions. Variable costs rise with each sale: product cost, shipping, payment fees, sales commission. If you're unsure, ask whether the cost would halve if sales halved.

Source: Break-Even Point Calculator

How do you find break-even revenue?

Divide fixed costs by the contribution margin ratio. With a 40% ratio, 15,000 in fixed costs needs 15,000 ÷ 0.40 = 37,500 in revenue. For businesses selling many products, revenue-based break-even is usually more practical.

Source: Break-Even Point Calculator

What is margin of safety?

It's how far current sales exceed break-even sales, as a percentage. If you sell 900 units and break even at 750, your margin of safety is 16.7%: a drop larger than that puts you in the red.

Source: Break-Even Point Calculator

How can I lower my break-even point?

Three ways: raise price, lower unit variable cost or cut fixed costs. The lever table in the calculator compares how much the same improvement in each would lower the bar, so you can see where to start.

Source: Break-Even Point Calculator

Profit Margin Calculator5

Open the page →

How do you calculate profit margin?

Subtract cost from price, divide by price and multiply by 100. If a product costs 60 and sells for 100 excluding VAT, profit is 40 and margin is 40 ÷ 100 = 40%.

Source: Profit Margin Calculator

What is the difference between margin and markup?

Margin divides profit by price; markup divides it by cost. The same 40 profit is a 40% margin on a price of 100 and a 66.7% markup on a cost of 60. Margin can never reach 100%; markup has no ceiling. A 100% markup equals a 50% margin.

Source: Profit Margin Calculator

If I add 30% to cost, do I get a 30% margin?

No. Adding 30% to cost is a 30% markup, which equals roughly a 23.1% margin. For a 30% margin, price at cost ÷ 0.70 — 142.86 for a product that costs 100.

Source: Profit Margin Calculator

Is profit margin calculated with or without VAT?

Without. VAT belongs to the tax authority, not the seller. If you know the VAT-inclusive price, divide by (1 + VAT rate) to get the net price first; the tool does this for you.

Source: Profit Margin Calculator

How do I set a selling price?

With cost-based pricing: cost ÷ (1 − target margin). For a cost of 60 and a 35% target margin, the price excluding VAT is 92.31; with 20% VAT it's 110.77. Treat this as a floor and weigh the final price against perceived value and competitors.

Source: Profit Margin Calculator

Price or Volume? Calculator5

Open the page →

What are the price, volume and mix effects?

They are the three parts of a revenue change. The volume effect is the revenue impact of the change in total units sold, the price effect that of changes in unit prices, and the mix effect that of a shift in the share of units across products. In this tool the three add up to the revenue change exactly.

Source: Price or Volume? Calculator

Why can the mix effect be negative?

When the share of sales moves to lower-priced products. Even if total units stay flat and no price changes, revenue falls because the average unit price falls. For example, if units of the expensive product fall while units of the cheap one rise, mix is negative.

Source: Price or Volume? Calculator

Would a different order change the result?

The three effects still add up to the same total, but the split between them changes. For example, measure the price effect with period-1 units and the cross term between price and volume moves to another line. This tool uses the order shown above and writes the formulas on the page; use the same order when you compare periods.

Source: Price or Volume? Calculator

How do I enter a new or discontinued product?

Put 0 in period-1 units for a new product, and 0 in period-2 units for a discontinued one. Because a new product's period-1 price was not observed, the tool uses its period-2 price, so its revenue is booked to volume and mix rather than price.

Source: Price or Volume? Calculator

How much of the price effect is inflation?

This tool does not separate it; the prices you enter are nominal. If the price effect is positive, part of it may reflect general price increases. For inflation-adjusted growth, use the Real Growth Calculator.

Source: Price or Volume? Calculator

81 terms

Concepts

Every glossary term: its one-sentence definition and a link to the term page, by category.

Growth Concepts

The building blocks for thinking about growth: models, loops and ways of working.

Creative Destruction
A concept from Joseph Schumpeter: new products, technologies and business models emerge by making the old ones obsolete, and that churn is what drives economic growth.
Growth Rate
The percentage change in a metric such as revenue, users or orders between two periods.
Growth Loop
A closed system in which the output of one step becomes the input of the next round; for example, users create content that attracts new users, who create more content.
Hypergrowth
A phase in which a company grows far faster than its sector norm, and sustains it. Annual growth above roughly 40% is commonly cited as the threshold, though there is no formal definition.
Growth Flywheel
A system in which each component accelerates the next, so it gains momentum as it turns and needs less effort to keep going. The idea was popularized by Jim Collins.
Growth Model
A mathematical or strategic framework that shows how a business grows, through inputs, conversion rates and outputs.
Growth Stack
The connected map of analytics, automation, experimentation and messaging tools a growth team uses.
Growth OKRs
A planning method that frames growth work as an objective plus a few key results that measure it.
14 more
Growth Experiments
The process of testing growth hypotheses through small, fast, measurable tests to find the most effective path.
Growth Retrospective
A meeting or process that analyzes past growth work to learn what worked, what did not, and why.
Growth Velocity
How much absolute growth is produced per unit of time, such as net new recurring revenue added per month. Growth rate is a percentage; velocity is an absolute amount.
Growth Ceiling
The limit to growth reachable with the current strategy, channels and resources.
Compound Growth
Growth that accelerates because gains build on top of earlier gains; each period is calculated on the already-grown base.
Growth Lever
A variable where a small change produces an outsized effect on results, such as price, activation or channel mix.
Growth Multiplier
A factor or tactic that multiplies the effect of existing effort, such as a referral program, a partnership or automation.
Growth Ops
The processes, data infrastructure and tooling management that let growth teams work quickly and consistently.
Growth Accounting
A method that breaks growth into new, retained, resurrected and churned users or revenue.
Scaling Laws
Patterns describing how cost, efficiency and complexity change as companies grow, with economies of scale and coordination costs chief among them.
Growth KPIs
The core set of metrics chosen to track growth performance.
North Star Metric
The single metric that best captures the value your product delivers to customers and that links to long-term revenue.
Product-Market Fit
When a product satisfies a real need in a specific market and customers keep using it persistently. The term was popularized by Marc Andreessen.
Statistical Power
The probability that an experiment detects an effect that really exists. It depends on sample size, the metric's variance and the smallest effect you want to see; Kohavi, Deng and Vermeer's rule of thumb is n = 16σ²/δ² users per variant (95 percent confidence, 80 percent power).

Core Metrics

The core indicators that appear in every growth conversation and show the health of the business.

DAU / WAU / MAU
Daily, weekly and monthly active users: the unique people who actually use the product in a given period, whether or not they pay.
MRR / ARR
Monthly and Annual Recurring Revenue: the monthly and yearly totals of predictable, subscription-like revenue. One-off revenue is excluded.
CR
Conversion Rate: the percentage of visitors or leads at a step who complete the target action, such as signing up, buying or requesting a demo.
CAC
Customer Acquisition Cost: the average sales and marketing spend needed to win one new paying customer.
ARPU
Average Revenue Per User: the average revenue generated per user (or customer) in a given period.
LTV
Customer Lifetime Value: the total contribution a customer is expected to bring over the whole relationship, usually calculated on gross profit.
Churn / NRR
Churn rate is the share of customers (or revenue) lost in a period. Net Revenue Retention (NRR) compares what the existing customer base pays now, after expansion, contraction and churn, with what it paid at the start.
ROAS
Return on Ad Spend: the revenue earned for each unit of currency spent on advertising.
4 more
NPS
Net Promoter Score: a loyalty indicator based on asking customers how likely they are, from 0 to 10, to recommend you.
Retention Rate
The share of customers who are still active or paying at the end of a period compared with the start.
CAC Payback
How many months of a customer's gross profit it takes to recover what it cost to acquire them.
LTV:CAC
The ratio of a customer's lifetime value to the cost of acquiring them; a summary of how profitable acquisition is.

Advanced Metrics

Finer indicators that go beneath the core numbers to explain customer behavior and efficiency.

Activation Rate
The percentage of new users who reach the 'aha' moment, the first time they experience the product's value, whether or not they pay.
Engagement Rate
A metric showing how much users interact with a product, content or campaign.
RPE
Revenue per Employee: total revenue divided by headcount; it shows how much revenue each person generates and indicates operational efficiency.
COGS
Cost of Goods Sold: the direct costs of producing and delivering a product or service; in software this includes hosting, payment fees and customer support.
AOV
Average Order Value: the average amount spent per order.
Offering Adoption
The percentage of customers who try and start using a newly introduced product, feature or package.
Churned MRR
Churned Monthly Recurring Revenue: the amount of monthly recurring revenue lost in a period because of subscription cancellations.
Expansion Rate
Additional revenue from existing customers, including upsell and cross-sell, as a share of starting revenue.
Virality Coefficient
The coefficient showing how many new users each existing user brings on average (the K-factor).
Cohort Analysis
An analysis that groups users by a shared trait, usually signup period, and compares how they behave over time.

Strategic Indicators

Indicators for reading the company's market position and long-term capacity to grow.

Market Penetration
The share of the total potential customers in the target market that your product or service has reached.
Customer Education
The degree to which customers gain the knowledge and skills they need to get full value from a product or service, and the work that makes that happen.
Flywheel Momentum
An indicator of how much speed a growth flywheel has gained as customer behaviors feed one another.
Value Realization
The extent to which the value a customer actually receives from a product or service meets the expectation they had when buying.
Share of Voice
The brand's share of total communication and visibility in its category, which can be calculated from ad spend, search visibility or mentions.
Operational Leverage
How little costs rise when revenue rises; in businesses with high fixed costs, profit grows faster than revenue as revenue grows.
Innovation Velocity
An indicator of how quickly an idea reaches the market as a product or feature, and how often that repeats in a given time.
Customer Influence
The potential of existing customers to spread the brand among their peers and contribute to organic growth.
Risk-to-Growth
A view that weighs the risk carried by chosen growth strategies against expected growth and profitability.

Real Growth and Cash

Concepts for stripping inflation out of revenue and reading what growth costs and how long the cash lasts.

Real Growth
Nominal growth with the price increase removed: how much more the same revenue can buy compared with the earlier period.
Nominal Growth
Growth measured at current prices, with no inflation adjustment. It carries price increases and growth in volume sold together; if revenue is measured or converted in a foreign currency, currency effects come on top.
Inflation Accounting (IAS 29)Inflation Accounting
Restating financial statements into the purchasing power at the end of the reporting period in hyperinflationary economies. According to the KGK announcement, in Turkey the financial statements of entities applying TFRS and BOBİ FRS for periods ending on or after 31 December 2023 are presented restated under TMS 29 (BOBİ FRS Section 25); sector regulators may set a different transition date.
Burn Multiple
David Sacks's measure of how much cash you burn to add one unit of new annual recurring revenue. The higher it gets, the more each unit of growth costs.
Rule of 40
A rule of thumb Brad Feld relayed from a late stage investor: your growth rate plus your profitability should add up to 40 percent. You can reach the same score by growing faster or by lifting margin.
Runway
How many months the cash on hand lasts at the current net burn. Net burn is monthly spend minus monthly revenue.
Gross Revenue Retention / GRRGross Revenue Retention
How much of the recurring revenue from a group of customers is still there after a period; only churn and contraction are counted, expansion is never added back. ChartMogul also calls it gross dollar retention or gross renewal rate.
Default Alive
Paul Graham's question: if expenses stay constant and revenue growth continues at its pace of the last several months, does the company reach profitability on the money it has left? If it does, it is default alive; if not, default dead.
Contribution Margin
The incremental profit earned on each unit sold: revenue minus direct variable costs. What remains goes to pay fixed costs and other non-operating expenses.

AI and Growth

The shared language for growing an AI product and putting agents into a growth system: cost, pricing, measurement, authority and distribution.

Inference Cost
The compute cost of an AI model producing an answer on each call; if you use an API, it is usually billed on the tokens processed. In classic software one more customer costs almost nothing, while here every query incurs a real expense.
Usage-Based Pricing
Pricing where the customer pays for how much they use, with the unit being a token, a call or a transaction. According to Poyar (2024), most companies in the large language model and infrastructure layer charge per token, which stays close to the cost of compute.
Hybrid Pricing
Pricing that combines a fixed base subscription with usage or outcome tiers. It gives the customer a predictable bill and lets revenue grow as usage grows.
Outcome-Based Pricing
Pricing where the customer pays for a measurable outcome, not for transactions or usage; for example a fee per resolved support ticket. It gives the tightest alignment with customer value, but the vendor absorbs the cost variability.
Seat-Based Pricing
Pricing where the customer pays for the number of people (seats) using the product; a fixed monthly or annual fee per user. The price is predictable and easy to explain, but the fee is tied to the number of users, not to the work the product delivers.
AI Agent / AgenticAI Agent
A system that carries out a task on the user's behalf by itself: the model decides which step to take and which tool to use. Anthropic draws the line clearly: in a workflow the steps live in predefined code; in an agent the model directs its own process and tool use.
Context Engineering
The work of choosing, and keeping current, what the model sees on a call (instructions, tool definitions, conversation history, retrieved data). Anthropic's guiding principle: find the smallest set of high-signal tokens that maximizes the likelihood of the desired outcome.
Evals
A test for an AI system: give it an input, apply grading logic to its output and measure success (Anthropic's definition). A set of tasks is re-run after every change to the model, the instructions or the tools.
11 more
Human-in-the-Loop
A design in which an agent waits for approval or hands control to a person at defined points. OpenAI's agent guide names two triggers: exceeding failure thresholds (for example, the agent failing to understand customer intent after several attempts) and sensitive, irreversible or high-stakes actions (cancelling orders, large refunds, payments).
Task Horizon
The length of tasks a model can complete with a given probability (50% in METR's headline measure), where length is how long the same task takes a human. METR defined it in March 2025.
MCP / Model Context ProtocolMCP (Model Context Protocol)
An open standard for connecting AI applications to external systems (data sources, tools, workflows). Anthropic announced it in November 2024; the official docs compare it to a USB-C port for AI applications: one protocol instead of a separate integration for every data source.
A2A / Agent2AgentA2A (Agent2Agent)
An open protocol that lets agents work together regardless of the framework or vendor they were built on; Google announced it in April 2025. Google positions it as complementary to MCP: MCP gives an agent tools and context, A2A lets agents talk to each other and share work.
Agent-Ready Product
This site's own framing, not an established term: a product that can be found, tried and used when the user or buyer is an AI agent. It looks for three things: the work the product does is described in a machine-readable way, its core actions can be called through an API or an open protocol such as MCP or A2A, and its price and trial terms can be understood without talking to a person.
AI Tourist
a16z's term: a user who signs up for an AI product, tries it for a couple of months and leaves.
Services-as-Software
An AI company selling the finished work itself instead of selling a tool to a professional. The distinction from Sequoia's Julien Bek (March 2026): a copilot sells the tool, an autopilot sells the work. Adapted from Bek's example: instead of selling software to an accounting firm, delivering the closed books.
Work-Unit Pricing
Pricing where the customer pays for a unit of work they recognize (an invoice processed, a report prepared, a ticket resolved) rather than a technical unit such as a token or a call; often implemented through credits that buy that work.
AI Gross Margin
What is left of an AI product's revenue after the direct cost of producing it (inference, hosting, human review where needed). The difference from classic software is that cost grows with usage.
ARR per Employee
Annual recurring revenue (ARR) divided by the number of full-time employees; an efficiency measure of how small a team produces the company's revenue.
Experiment Inflation
When producing variants gets cheap, the number of experiments rises, but traffic stays the same, so the sample and power per experiment fall; apparent experiment speed rises while real learning speed does not (this site's definition).

Full glossary →

38 entries

Frameworks, guides and articles

Guide pages, article series and articles, each with its short description and a link.

Guide pages

The Nominal Growth Illusion
Revenue grows, but does the company? A manifesto on real growth.
Value Debt
The gap between promise and delivered value: stages, symptoms, a self-check and ways to pay it down.
Growth in the AI Era
Growth versus durability in an AI product: inference cost, tourist users, pricing, team and three measurement changes.
AI
Four doors and ten questions for founders, to read AI through the lens of growth.
Cohort Analysis
How to read a cohort matrix, find the retention leak in six steps, and what closing it does to LTV.
Unit Economics Guide
LTV, CAC, LTV:CAC and payback: formulas, common mistakes, a worked example.
Growth Approaches
Growth hacking, growth marketing, consulting and Growth Partnership compared; which one you need.
Growth Foundations
Core concepts and sources of growth.
Strategies
A library of growth strategies by stage and category.
Editorial Principles
Where the numbers on this site come from, and how content is updated and corrected.

Series

Building Real User Value in Digital Products

A series for people building digital products, on the real user value behind feature, engagement and retention talk.

What Is User Value, Really? And Why Do Most Digital Products Misunderstand It Completely?
Value isn't your feature list. It's the difference in the user's life that wouldn't exist without you, which most products never measure.
Going Beyond Features: How Do You Engineer Perceived Value in an Age of Digital Abundance?
Your competitor has the same features. What sets you apart in the user's mind isn't what the product does, but how clearly it makes them feel what it does.
The First Spark of Value: Which Exact Behavior Must a User Perform for Real Value to Have Begun?
Signing up is a statement of intent, not a beginning. Value starts when the user first does one specific thing, and most teams don't know what it is.
The Great Illusion of Retention: You Don't Have to Retain the User, but Their Critical Behavior in the Product
A user can log in every day and still be leaving. What you need to retain isn't the user, but the one behavior in your product that creates value.
Redesigning the Value Flow: How Do You Build Loops That Create Compound Value Instead of One-Off Features?
Every new feature creates value once and stops. Loops create a little more on every turn, and the difference shows in the second year.
The Power of a Value Committee: Making User Value the Responsibility of the Whole System, Not a Single Team
Sales promises one thing, the product delivers another, and support closes the gap by phone. While value is one team's job, the gap never closes.
The Value Layer of Time: The Longer a User Stays in the Product, Why Should the Value They Receive Grow Exponentially?
A user finishing their second year should be getting far more than on day one. If not, what keeps them is habit, not value, and habits break.
Making Monetization a Strategic Product Feature: How Can You Index Pricing to the User's Success and Value Conversion?
The pricing page is the most-read and least-designed screen in your product. Treat pricing as part of the product, not a finance decision.
5 more
The Value-Based Pricing Revolution: The More Value Users Receive, the More They Should Pay – How to Apply It and Why It Is Inevitable
Pricing by your costs or your competitors leaves money on the table. Worse, you never tell customers what your product is actually for.
The Sweet Spot of the Paywall: How Is Monetization Triggered the Moment a User Says “I Wouldn't Want to Lose This”?
A paywall in the wrong place loses users at the door; too late, it gives value away. The right moment is when users think, I don't want to lose this.
Rethinking LTV: True Lifetime Value Is Not Revenue, but the Behavioral Accumulation a User Invests in the Product
An LTV table shows what a user has paid in the past. Whether they will stay depends on what they have left inside your product so far.
The New Battle for Value in the AI Era: Why Are Products Becoming Commodities Much Faster Than Before, and How Do You Resist?
Copying a feature now costs about a weekend. The question to ask yourself is no longer “can a competitor build this?” but “what happens if they do?”
The Value Debt Danger: What Is the Hidden Enemy of Products That Grow Fast but Rot from Within, and How Do You Prevent It?
More dangerous than technical debt is the debt that piles up from promises made to users while you grow. Its interest is paid in churn.

Series

Turning Vision into Organizational Success

A series on why vision is easy to write and hard to live, and how to turn it into organizational success.

The Invisible Power of Vision: It Doesn't Show Up in the Financial Statements or on the Org Chart, So Why Does It Change Everything?
Vision doesn't show up in the financial statements or on the org chart. But whether it is there or not changes everything inside a company.
The Remove-the-Logo Test: Why Cliché Visions and Visions That Forget the Customer Move No One
Take the logo off your vision statement and put it on a competitor's. Does it still make sense? Why cliché and customer-blind visions move no one.
Vision Is the Compass, Strategy the Map: How Do You Balance Dream and Reality, and Align with the Mission?
A vision should be neither a dim light nor an unreachable star. Balancing dream and reality, and aligning vision with mission, values, and strategy.
Getting the Team to Own the Vision: Why a Vision Written Alone and Announced Once Dies, and How It Becomes the Team's Shared Story
A vision is born in the leader's mind but comes to life through the team. Why a vision written alone and announced once dies, and how to fix it.
What Are We Doing for Our Vision Today? Five Factors and Five Questions That Keep a Vision Alive
Writing a vision once and leaving it is not enough. Five factors behind visions that stay alive, and five questions to check yours regularly.

Series

Real Growth in the Age of AI

For growth leaders: an article series that reads AI's effect on speed, activation, retention and teams by the real number, not the apparent one.

The Real Growth of AI: Why Perceived and Measured Speedup Diverge, and How That Shapes Growth Decisions
Why do perceived and measured speedup diverge? Five questions for reading an “AI made us X percent faster” claim before it drives a growth decision.
Experiment Inflation: AI Made Building Free, Not Knowing
AI made building experiments nearly free but added no traffic. At low traffic, more tests mean less power and more false winners. Count decisions.

Series

Agents in the Growth System

For growth teams: an article series that treats "agent" not as a product feature but as a decision about authority and economics at every funnel stage.

Which Growth Work Goes to an Agent? Choosing Between a Prompt, a Workflow and an Agent, Stage by Stage
At each stage of the growth funnel, which work goes to a prompt, a workflow or an agent? A decision built on reversibility, cost of error and measurement.

Series

Growth Desk

A plain-spoken series on customers, teams and profit in the AI era. Every article ends with one step you can try today.

Your Customer Asks AI First: How Do You See That Visitor?
Why does the visitor from AI look so small in your reports, where does it hide inside “Direct”, and how do you measure its value? A one-hour GA4 setup.
The Pilot Is Done. Where Is the Profit? Measuring AI on the P&L, Not on Productivity
Your AI pilot saves hours, but has profit moved? The three places saved hours can go, one test question, and a call to continue, redefine or shut it down.

8 entries

Benchmarks

Sourced benchmark ranges: a short description and the page for each metric.

Retention rate
How many users stay, in consumer and B2B products?
NRR
How much does revenue from existing customers grow over a year?
LTV:CAC ratio
Each unit spent on a customer returns how much over a lifetime?
CAC payback period
In how many months does acquisition cost come back?
Churn rate
How much of your customers and revenue disappears each year?
Burn multiple
How much cash do you burn for each unit of new ARR?
Rule of 40
Do your growth and profit add up to 40?
Gross margin
After delivery costs, how much of your revenue is left?

All benchmarks →

22 entries

Calculators and tools

Calculators and decision tools; the figures you enter are processed in your browser and not sent to a server.

Calculators

Real Growth Calculator
Separates your lira growth from inflation and the exchange rate to show how much you really grew.
Growth Check-up
A four-part growth scorecard: what should you fix first?
Cohort Matrix Calculator
Where do users drop off, and what does fixing it do to LTV?
Unit Economics Calculator
Do you earn back what it costs to win a customer, and when?
AI Product Unit Economics Calculator
The average margin can look reasonable; the loss hides in the bill your heaviest user runs up.
Runway & Default Alive Calculator
How long does your cash last, and do you reach profit before it runs out?
Burn Multiple Calculator
How much cash do you burn for every dollar of new ARR?
Rule of 40 Calculator
Does your balance of growth and profitability clear 40?
7 more
NRR & GRR Calculator
Is your existing customer base growing on its own, or leaking?
ROAS Calculator
Measure profit, not ad revenue: ROAS, break-even ROAS, POAS and the highest CPA you can afford.
Conversion Funnel Calculator
Measure every step of your funnel, find the bottleneck and see what an improvement is worth.
CAGR Calculator
Turns total growth into an annual pace, and finds the pace a target requires.
Break-Even Point Calculator
See how many units you must sell each month to stop losing money, and which lever lowers that bar most.
Profit Margin Calculator
Calculate margin and markup with VAT separated, and find the right price for a target margin.
Price or Volume? Calculator
Splits revenue change into price, volume and mix effects: where is growth coming from?

Tools

Growth Plan
A personal growth plan in 5 questions
Metric Tree
Map your North Star metric tree
Investment Readiness
A 10-question self-assessment on unit economics, runway and retention, with a score and next steps.
Pricing Model Picker
An up-to-4-question decision tree to a seat, usage, outcome or hybrid pricing hypothesis for your AI product; sourced.
Growth Claim Check
Read "AI made us X percent faster" through five questions: perception or measurement, counterfactual, confounders.
Experiment Capacity
From traffic, base conversion and smallest effect: experiment duration, reliable decisions a year, false positive share.
Tools
The tool stack used for growth.

40 entries

Cases

The AI growth case archive: a one-sentence summary of each company and its case page.

11x
The AI sales-rep company reached a ten-million-dollar ARR claim on the back of two top-tier investor signatures; an investigation showed that ARR rested on contracts with exit clauses, unauthorized logos and high early churn.
Apilex
A legal assistant that entered the lawyer market from below with Turkish case-law data and, with no outside funding, claimed eight million dollars of annual revenue in nine months; the number is not necessarily wrong, but nothing about it can be verified from outside.
Bolt.new (StackBlitz)
Seven years of in-browser infrastructure met the right model threshold and exploded into a tens-of-millions revenue claim in five months; after that the revenue curve went dark.
Builder.ai
A no-code app platform valued above a billion dollars on an AI label went from default to insolvency in a month, amid allegations that most of its revenue was unpaid invoices and customers with one-dollar deposits.
Character.ai
A chat app that reached a billion-dollar valuation on more than an hour of daily use never disclosed revenue; the founders left for Google, the CEO for Disney, and under-18 chat was shut down.
Clay
A company that built product for six years on almost no revenue focused on one use case, turned its support channel into a community, and reached one hundred million dollars in ARR in two years; it disclosed its enterprise retention and its own pricing mistake.
Cluely
Millions of views from controversy, a founder-claimed revenue figure, and the retraction of that figure nine months later; the starkest form of the gap between visible and real growth.
Codeway / Retake
A studio from Istanbul claiming more than four hundred million dollars in annual revenue with no outside investment, over sixty mobile apps and heavy paid advertising; the largest scale claim from Turkey, with the least independent evidence.
32 more
Cognition (Devin and Windsurf)
The company selling Devin, an autonomous software engineer agent, doubled its annual revenue over one weekend by acquiring Windsurf; the growth is real, but half of it is inorganic and the product scored poorly in an independent test.
Cursor (Anysphere)
A code editor that spread among developers with near-zero switching cost; it went from $500M to $1B in annualized revenue in five months, paid for selling variable model costs under a fixed subscription with a pricing crisis the same year; the SpaceX sale rests on secondary sources only (secondary data).
Decagon
A customer-support agent that grew through a chain of references rather than virality; the logo and funding evidence is strong, the revenue and resolution-quality evidence is only secondary.
ElevenLabs
A company that never left audio grew a product family through viral output, a developer API and a single credit wallet, reaching a half-billion-dollar annual revenue claim in four years; margin and retention are still undisclosed.
Gamma
A presentation tool losing ninety-five percent of users on a blank page took off once AI produced the first draft; it says it reached a hundred million dollars in annual revenue profitably, with no sales team and no negative margin, and gives one of the cleanest claims on this list.
Genspark
A product that pivoted from search to agents claimed tens of millions in ARR forty-five days after launch with "zero paid distribution"; the figure's definition, persistence and channel claim cannot be verified.
Glean
An enterprise search company deliberately rejected self-serve adoption and says it tripled ARR in fifteen months through direct sales and an in-company network effect; usage and retention evidence is still missing.
Granola
A meeting notepad that sends no bot into the call spread by word of mouth through founder and investor circles and became one of the rare companies to disclose early retention; it has never disclosed revenue.
Harvey
A vertical platform growing through the referral chain of large law firms, with annual-commitment seats and rising usage, is among the cases closest to a real read; margin and net revenue retention are still undisclosed.
HeyGen
An avatar and video-translation platform says it reached hundreds of millions in annual revenue on little capital by letting its output advertise itself and keeping every transaction profitable; retention data is still missing.
Higgsfield
A video platform with no model of its own reached a $700M annualized revenue claim (press release) in eighteen months through creator payouts and six releases a week; retention evidence is still missing.
Humane
Hype built on an ex-Apple team and celebrity investors turned into returns once the device could not find a single thing it did better than a phone on day one; the company sold for roughly half its funding and the devices shut down in ten days.
Insider (Insider One)
A marketing technology company out of Istanbul grew region by region through enterprise sales, disclosed $200M committed ARR and 129 percent net revenue retention in 2024, then rebuilt itself as an agent platform; no revenue claim after 2025.
Jasper
A content tool that reached tens of millions in revenue in two years on the rent of early GPT-3 access cut its projections, laid off staff and pivoted to an enterprise context layer once ChatGPT zeroed that rent; the company is active, but revenue after 2024 is undisclosed.
Kling AI (Kuaishou)
A video model born inside a listed short-video giant, with free distribution and revenue disclosed on earnings calls, is the most auditable media case on the list; retention and margin are still in the dark.
Krea
Two founders who shared a demo running on their own machine and sold subscriptions in a day reached tens of millions of users with a seventeen-person team, on the feel of real-time generation and open-model distribution; absolute revenue was never disclosed.
Lensa AI (Prisma Labs)
One avatar feature produced the #1 app on the iOS App Store's Photo & Video chart in three weeks; two months later downloads fell to below a tenth (secondary data). The wave brought revenue, not a company.
Lovable
An app builder born from an open-source tool reached a hundred-million-dollar annual revenue claim in eight months without paid ads; the bill for speed arrived as security debt, and retention and margin evidence is still missing.
Luma AI
A company growing on a video model that gets cheaper with every release and on shareable output, investing its $900 million round in compute; the product evidence is strong, and there is not a single official revenue figure.
Manus
A general-purpose agent that began with invite scarcity reached a hundred-million-dollar ARR claim in eight months, was sold to Meta, and four months later China blocked the sale; the growth is real, the quality and ownership questions are open.
Mercor
A marketplace selling expert labor to AI labs; the payment flow and the profit are real, but the headline "$2 billion ARR" is gross volume, not net revenue.
Midjourney
An image-generation product that grew inside Discord for years without outside capital, without ads and for a long time without its own website; the size of its revenue can be checked two independent ways, the health of its growth cannot be checked at all.
Mirage (formerly Captions)
A captioning app built in two days rode the short-video wave to tens of millions of creators, then moved upmarket with its own video model; distribution evidence is strong, revenue has never been disclosed.
OpusClip
A single feature inside a failed live-streaming tool became a product whose watermarked clips advertise themselves; the user and view claims are large, revenue and retention are not official.
Perplexity
An answer engine growing on distribution bought through telecom and device bundles, a high-priced tier and a credit-based agent; revenue figures arrive by leak, and user loss after a bundle ends is documented.
Photoroom
A quiet case that focused twice on the e-commerce photo niche, grew through app-store ranking and claims profitability on little capital; no active-user or retention figure.
Replit
Revenue flat for nine years grew fifty-fold in a year once the product turned to non-technical users; margin, retention and the database the agent deleted are the other side of the story.
Runway
A creator tool that trains its own video models built a cultural stage through festivals and studio partnerships, then shifted the weight of revenue to enterprise model licensing; the revenue claim is strong, its definition and quality metrics are missing.
Sierra
A customer-service agent that entered through the enterprise door opened by its founders' reputations; because price is tied to outcomes, measurement became the sales material, the most disciplined measurement story on this list, yet the definition of "resolution" and the time series stay closed.
Suno
A consumer product that turns a text prompt into a full song reached millions of paying subscribers in two years on shared output; it turned copyright lawsuits into label partnerships, and retention evidence is still missing.
Synthesia
An avatar video platform that uses self-serve as the top of its enterprise funnel; 2024 revenue is in accounts filed with Companies House and net revenue retention is disclosed, but profitability and logo churn are still in the dark.
Tome → Lightfield
The presentation tool that reached more than twenty million users fastest stalled at around three million dollars in annual revenue with paid conversion under two percent; the founders shut it down, built a sales CRM with six people and reached a thousand paying customers in ten months.

All cases →