Common ARR reporting mishaps

Dave lists errors: multiplying a record month, counting trials, opt-outs, and mis-stating churn and CAC.

Play episode from 20:18

chevron_right

Transcript

chevron_right

Transcript

Episode notes

Mostly Growth’s conversation with legendary SaaS operator and blogger Dave Kellogg digs into the shifting economics of software, why traditional ARR metrics are breaking down, and what actually drives buyer interest in today’s M&A landscape. Dave, CJ, and Kyle unpack the growing divide between “recurring,” “re-occurring,” and empirically recurring revenue, calling out how misreported ARR (from multiplying single months by 12, counting trials as customers, or ignoring opt-outs) is warping valuations. They explore why many $20–50M horizontal SaaS companies have become “zombies,” why vertical software and AI tuck-ins are still getting bought, and how investor preferences and preference stacks create brutal misalignments between founders, employees, and late-stage capital. The episode then shifts to real-world pricing psychology—from Instacart and DoorDash memberships to credit-card fee complexity and resort-fee opacity—before finishing with tools they’re using (PowerPoint’s charting, Wispr Flow) and Dave’s hard-won rules for scheduling etiquette after intros.

—

SPONSORS:

Metronome is real-time billing built for modern software companies. Metronome turns raw usage events into accurate invoices, gives customers bills they actually understand, and keeps finance, product, and engineering perfectly in sync. That’s why category-defining companies like OpenAI and Anthropic trust Metronome to power usage-based pricing and enterprise contracts at scale. Focus on your product — not your billing. Learn more and get started at https://www.metronome.com

Pulley is the cap table management platform built for CFOs and finance leaders who need reliable, audit-ready data and intuitive workflows, without the hidden fees or unreliable support. Switch in as little as 5 days and get 25% off your first year: https://pulley.com/mostlymetrics

—

LINKS:

Mostly Metrics: https://www.mostlymetrics.com

CJ on LinkedIn: https://www.linkedin.com/in/cj-gustafson-13140948/

Growth Unhinged: https://www.growthunhinged.com/

Kyle on LinkedIn: https://www.linkedin.com/in/kyle-poyar/

Kellblog: https://kellblog.com/

Dave on LinkedIn: https://www.linkedin.com/in/kelloggdave/

Slacker Stuff: https://www.slackerstuff.com/

Ben on LinkedIn: https://www.linkedin.com/in/slackerstuff/

—

RELATED EPISODES: