As an entrepreneur, how do you know if your company is ready to go to the next level?

It can be tough to know, especially in the early days. Progress can seem so slow, and the absolute numbers so tiny. Is there really any difference between $500 a month in revenue for your new app vs. $1000 a month?

But in SaaS at least, you are ready to go to the next level once you start compounding.

  • Once you go from say 1 new customer a week to 1 a day.
  • From 1 a day to 100 a month
  • Etc.

Compounding is the engine behind recurring revenue businesses, even at the earliest days.

If you aren’t compounding … if you are growing at the same absolute rate as last month, or even less … you aren’t ready to “turn it up.”

But if you are, hire the talent, scale up marketing, bring on new partners. Compounding feels slow and small. But boy it becomes powerful 6, 12, 18, and 24 months out.

More here: Want to Understand SaaS? If Nothing Else — Understand That It Compounds | SaaStr

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Published on November 26, 2018

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