We plan to bring eChai across 100 cities in India. It starts with eChai Startup Demo Day on 26 September, all in person. 11 cities confirmed, 305 founders registered. Any city that reaches 20 interested founders is on too. See your city
Money, pricing & model

What is churn and how much churn is too much?

Churn is the rate customers leave, and it silently caps your growth because you're refilling a leaky bucket. For SMB SaaS, ~3-5% monthly is common but painful; for B2B you want low single digits annually. If your product has high churn, fixing retention beats pouring money into acquisition every single time.

Go deeper

2 resources, 1 link-checked.

📄 Article
✓ Link checked Free Intermediate

The reference primer on the metrics and market-sizing logic investors use, including bottom-up market sizing that keeps founders honest about how big a market really is. Canonical a16z source.

16 Startup Metrics

From a16z by Andreessen Horowitz (a16z) ~15 min read

  • Size markets bottom-up from customer count and willingness to pay
  • Know the metrics that actually signal a healthy business
  • Distinguish real traction from vanity metrics
  • Use consistent definitions when comparing yourself to the market
Open a16z.com →
📄 Article
Free Advanced

David Sacks (PayPal, Yammer, Craft Ventures) distills the metrics that actually predict a SaaS company's health, including the burn multiple he popularized. Sharp, operator-grade, and opinionated.

The SaaS Metrics That Matter

From sacks.substack.com by David Sacks essay

  • Net revenue retention and the burn multiple reveal true capital efficiency
  • Focus on a small set of metrics reviewed on a strict weekly cadence
  • Growth and profitability must be balanced (the Rule of 40)
Open sacks.substack.com →

Terms in this answer

Retention Churn

People also ask

What are unit economics and why do they matter? 3 → How do I calculate CAC (customer acquisition cost) and LTV? 3 → What is a good LTV to CAC ratio? 3 → What metrics should I actually track as an early-stage SaaS founder? 3 → How do I build a simple financial model or revenue projection? 3 → My CAC looks great but I paid for it with a founder-led discount. How do I know my unit economics without the promo? 2 →

Also in D2C

The same ground, over in Money, pricing & unit economics, our D2C track.

I'm not a finance person, what books/records do I actually need to keep from day one? 3 → What is cohort analysis, and why does it matter more than a single repeat-rate number? 3 →

Also in How Founders Use AI

How founders actually use AI for this, over in Finance & Accounting.

How do founders use AI for bookkeeping, invoicing, runway and burn analysis? 4 → Why build financial models with AI instead of from a blank spreadsheet? 4 →

Also in GTM

The same ground, over in Close deals and price right, our GTM track.

I have a call booked with a real prospect tomorrow. What do I do on it? 4 → I have no idea what to charge. How do I pick a first price? 4 →

Also in Wealth

The same ground, over in Founder money foundations, our Wealth track.

How much should I pay myself as a founder? 2 → How big should my emergency fund be when my income is lumpy? 3 →
eChai Partner Brands