Growth Rate for SaaS Founders
What is Growth Rate?
Growth rate measures how much your key metric (revenue, users, MRR) has increased from one period to the next. It answers the question: "How fast are we growing?"
Why Growth Rate matters for SaaS founders
Investors and stakeholders care about growth. A clear growth rate helps you track progress, set targets, and communicate your traction. Healthy SaaS typically aims for double-digit MoM growth in early stages.
How to calculate Growth Rate
Subtract the previous period value from the current period, divide by the previous period, and multiply by 100.
(Current − Previous) / Previous × 100
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Growth Rate Calculator
Example calculation
- (15,000 − 12,000) / 12,000 × 100
- 3,000 / 12,000 × 100
- 25%
Result: 25%
Your MRR grew 25% from last month. For an early-stage SaaS, that is strong momentum.
Benchmarks & best practices
- Early-stage: Early-stage SaaS often targets 10-15% MoM growth.
- Healthy range: Healthy growth is typically 10%+ MoM or 100%+ YoY.
- Warning range: Negative or flat growth for multiple months may signal product-market fit or execution issues.
Frequently Asked Questions
- What is a good growth rate for SaaS?
- A good SaaS growth rate depends on stage. Early-stage companies often aim for 10-15% month-over-month. At scale, 2-5% MoM can be healthy. Year-over-year, 100%+ is impressive for growth-stage companies.
- How do I calculate MoM growth rate?
- MoM (month-over-month) growth rate is calculated by taking the difference between this month and last month, dividing by last month, and multiplying by 100. For example, if MRR went from $10k to $12k, growth is 20%.
- What is the difference between MoM and YoY growth?
- MoM compares consecutive months and shows short-term momentum. YoY compares the same month a year apart and smooths out seasonal fluctuations. Both are useful for different contexts.