I presented this slides during the 2nd Edition of Lean Startup Machine in São Paulo on Feb 2013. This was a great event and I'm really grateful for the opportunity.

1. How to kick ass in the The Subscription Economy.
Lean Startup Machine, São Paulo - 2013
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8. Subscription
Economy
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9. Disclaimer.
I’m not an accountant or aspiring CFO/Controller!
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10. Subscription
Economy
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13. Academia
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16. Offer Something in X amount +
time + value + recurring payment.
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19. MASSIVE
GROWTH
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20. Final&Result&
!200.00!!
!180.00!!
!160.00!!
!140.00!!
!120.00!!
!100.00!!
Final!Result!
!80.00!!
!60.00!!
!40.00!!
!20.00!!
!"!!!!
1!
27!
79!
105!
118!
131!
144!
157!
170!
183!
196!
209!
222!
235!
248!
261!
274!
287!
300!
313!
326!
339!
352!
365!
14!
40!
53!
66!
92!
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21. 4 Main Reasons Behind Why
You Sign for a Subscription
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22. Convenience.
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23. Allows you to focus.
Core Services.
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24. Discovery & Curation.
Early Adoption.
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25. Status.
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26. BTW, you should offer all of
them in some capacity.
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27. 6 Essential Metrics for Your
Subscription Business
•MRR
•CHURN
•ARR
•CAC
•ACS
•CLTV Chaotic Flow by Joel York
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28. Example
A two year subscription contract
with a total contract value (TCV) of $24K
ARR = $12K per year = $24K / 2 Years
MRR = $1,000 per month
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29. Monthly Recurring Revenue
MRR.
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30. CHURN
% rate of customers that
cancel over a period of time.
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31. 1
= Customer Lifetime
Churn Rate
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32. 10.000
= ^ (Sua Startup) 83.3
12%
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33. Tempo é Fundamental para calcular o Chrun.
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34. • Calculate out on an uniform population
• Measure the right interval for the customer
• Separate MRR Growth from Churn Growth
• Business Systems are a must to scale
• Exclude New Customers
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39. ARR
Average Recurring Revenue
Total Revenue for a Period of Time
= ARR
Number of Customers for the Time
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40. Customer Acquisition Cost (CAC)
CAC = marketing & sales expenses
X of New Customers
Cumulative ARR x CAC
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41. Average Cost of Service (ACS)
Recurring Expenses with Cost of Revenue
ACS =
All Customers that cost you something
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42. Customer Life Time Value - CLTV
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43. 2 Important Rules of Thumb
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45. You must grow it!
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48. MASSIVE
GROWTH
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49. 100,000+ Enterprise and
SMB customers
Sending 8 billion emails
per month
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50. How are we doing it?
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51. Company Snapshot!
• Founded July 2009 $27M venture capital raised
• TechStars graduate
(Boulder, CO)
• 120 employees:
– HQ: Boulder, CO
– Eng: Anaheim, CA, Romania Angel investors include:
• Scott Petry (Founder, Postini)
• Matt Mullenweg (Founder, Wordpress)
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52. We eat our own dog food.
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53. +
Our Own Backend Tools
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55. Thanks!
Pedro Sorrentino
@pedrosorren
pedro@sendgrid.com
Business Development & Latam
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