This is a working note. I don't have it all figured out yet, but I keep coming back to the same question: how do SaaS metrics actually relate to each other in practice, not just in textbook diagrams? On paper it's clean. ARR grows through new business and expansion, shrinks through churn and contraction. NRR tells you how much your existing base is growing on its own. CAC tells you what it costs to acquire, LTV tells you what you get back. Simple ratios, simple stories. In practice, it's messier. Here's what I'm wrestling with: **NRR hides a lot.** A company can have 120% NRR and still be in trouble if the expansion is concentrated in a few large accounts. I've seen this: the headline number looks great, but the underlying cohort data tells a different story. You need to look at NRR by segment, by cohort, by product line. The average is almost never the story. **Churn is never just one number.** Logo churn, revenue churn, gross churn, net churn: they all tell different stories. And the definition varies between companies, which makes benchmarking harder than it should be. I've started asking "how do you define churn?" in every conversation and I get a different answer every time. **CAC and LTV feel more like art than science.** What counts as a sales cost? Do you include onboarding? Customer success? And LTV depends on assumptions about retention that are themselves uncertain. I use these ratios but I hold them loosely. **The metrics map is circular.** Improving retention improves LTV, which justifies higher CAC, which enables faster growth, which improves unit economics at scale. But the loop only works if the product actually delivers value. Metrics follow product quality, not the other way around. I'm trying to build a clearer mental model of these connections. The variance analysis framework I've been building helps me think about decomposing changes, and I've been watching the [[signal/SaaS Benchmarks 2026|SaaS benchmarks 2026]] data closely to calibrate my intuitions. Still a map being drawn. ← [[Notebook|Back to /notebook]]