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A–Z index
Every term, alphabetised. Click any for the full definition, formula, and examples.
The moment a new user experiences the product's core value for the first time — the aha moment.
The average annualised revenue per contract — used to compare deals across customers regardless of contract length.
A defined interface for one piece of software to communicate with another — the contract between client and server.
The average monthly revenue a SaaS earns per active customer.
The yearly version of MRR — the total recurring subscription revenue a SaaS would earn over 12 months at today's run rate.
The fully-loaded cost of acquiring one paying customer, including sales + marketing + tooling.
The percentage of queries served from a pre-computed or stored result instead of re-running the expensive underlying operation (LLM call, database query, API request).
The percentage of customers (or revenue) a SaaS loses in a given period. Low churn compounds growth; high churn silently kills it.
The direct costs of delivering your SaaS service to a customer — hosting, third-party APIs, payment fees, customer support.
Attracting and converting customers through valuable written, video, or audio content that answers their questions and ranks organically.
A durable, structural advantage that competitors find hard to replicate — protecting the business over time.
Two opposing architectural patterns. Monolith: one deployable application. Microservices: many small services communicating over a network.
The predictable revenue a SaaS earns every month from active subscriptions, normalised to a monthly figure.
A single application serving multiple customer organisations (tenants), with data isolation between them.
The smallest version of a product that delivers real value to real users — used to test whether the core hypothesis is true.
The number of months required to recover the cost of acquiring a customer through that customer's gross profit.
A SaaS pricing model that charges the customer for each completed business-value event (ticket resolved, PR opened, invoice reconciled, return filed) rather than per user or per month.
A structured change in product, market, or business model in response to learning that the current path won't reach PMF.
A go-to-market motion where the product itself is the primary driver of acquisition, activation, and expansion — rather than sales.
The state where a product satisfies a real market demand so well that customers adopt, pay, and stay without heroic growth effort.
The deliberate choice of what your product is, who it's for, and what it's better than — so that the market slots you into a clear mental category.
The practice of placing a higher-priced option next to your target tier to make the target look reasonable by comparison.
An AI architecture where relevant documents are retrieved from a private corpus at query time and injected into the model's context, letting the model answer from proprietary data without fine-tuning.
An authorisation model where permissions are attached to roles, and users gain permissions by being assigned roles.
The opposite of churn — the percentage of customers who stay with you over a given period.
The number of months a startup can operate before running out of cash at the current net burn rate.
A catalogue of reusable business-model DNA templates founders can adopt for their own SaaS, each backed by public examples of who tried the pattern and what happened.
The staged progression a prospect moves through: Awareness → Acquisition → Activation → Retention → Revenue → Referral.
The discipline of earning free organic traffic from search engines by matching user intent with high-quality, well-structured content.
The effort, time, money, or risk a customer must incur to move from your product to a competitor — higher switching costs = stronger retention.
The high-level structure of a software system — its major components, their responsibilities, and how they communicate.
Three nested measures of market size — the total market opportunity (TAM), the portion you can realistically serve (SAM), and the slice you can capture near-term (SOM).
The total revenue a signed contract will generate over its full duration, including discounts, services, and any committed add-ons.
The long-term cost of short-term engineering decisions — the interest you pay every time shortcuts compound.
The revenue and cost of a single customer or transaction, used to prove the business model works before scaling.
An India-specific payment mandate framework by NPCI that lets merchants charge recurring amounts up to Rs 1 lakh per month from a user's UPI handle, with one-time user approval.
A research-backed composite of a specific user type within your ICP — their role, goals, pain points, tools, and decision triggers.
Server-to-server HTTP callbacks fired when a specific event happens — the push counterpart to pull APIs.
Meta's programmatic messaging interface that lets businesses send and receive WhatsApp messages at scale, with pricing based on conversation categories and a 24-hour free window for user-initiated chats.
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How to use this glossary
This glossary is written for practitioners, not students. Every entry is a definition you can use inside a board deck, a pricing conversation, or a strategy doc today — not a textbook explanation you need a course to unpack. Most entries include three parts: the short definition, the formula or calculation (when one exists), and a rule of thumb that tells you what a “healthy” value looks like for a SaaS in the first 24 months.
The terms fall into four rough buckets, and which ones matter depends on what stage you are in. Pre-revenue founders should get fluent in PMF, ICP, TAM/SAM/SOM, MVP, and CAC payback before anything else — these shape what you build and who you build it for. Early-revenue founders (<$10k MRR) live inside MRR, ARR, churn, LTV, gross margin, and activation rate — the metrics that tell you whether growth is worth accelerating. Scaling founders (<$1M ARR) add net revenue retention, expansion MRR, CAC/LTV ratio, Rule of 40, and magic number — metrics that predict capital efficiency. Anyone running a team cares about burn multiple, runway, default alive/dead, and cash conversion score.
A few patterns to watch for. First, the same metric is often calculated three different ways across tools (e.g., churn can be customer churn, revenue churn, or net revenue churn — and they tell different stories). When this glossary gives a formula, that is the version we use; if your dashboard shows a different number, check which variant it is computing before you panic. Second, “good” ranges shift by motion: a PLG self-serve SaaS has very different healthy CAC, churn, and ACV than an enterprise sales-led product. When a rule of thumb is motion-dependent, we call it out. Third, vanity metrics (total signups, page views, GitHub stars) are deliberately excluded — they are not in the glossary because they rarely help founders decide anything.
If a term you use regularly is missing, email hello@planmysaas.com — we add requested terms within a week and credit the reporter.