The Most Expensive Hobby in SaaS? Ignoring the Drips
Let me tell you a quick story about Dave.
Dave is the founder of a promising SaaS company. And Dave is absolutely obsessed with his tap. It’s a big, shiny, chrome-plated tap, connected to a high-pressure pump that gushes water into his bucket. Every time a new customer signs up, he polishes that tap until it gleams. “Look at that flow!” he exclaims, showing off his ever-increasing water bill (his Customer Acquisition Cost).
He is ridiculously chuffed.
Meanwhile, at the bottom of the bucket… drip… drip… drip.
A few small holes are quietly leaking water onto the floor. “It’s fine!” Dave says, barely glancing down. “Just the cost of doing business. Look at the tap!”
But the puddle around his feet is growing. He’s celebrating the incoming torrent while ignoring the fact that his bucket never seems to get much fuller.
STOP THIS: Praising the Tap While Standing in a Puddle
For many SaaS founders, Dave’s obsession is all too familiar. We get fixated on the glorious gush of new logos and new Monthly Recurring Revenue (MRR). We treat the customers who leave—churn—as a minor inconvenience. This is a profound mistake. Focusing all your energy on acquisition while ignoring retention is like trying to fill a leaky bucket. It’s exhausting, expensive, and ultimately, you just end up with very wet socks.
START THIS: Become Obsessed with Plugging the Leaks
It’s time to stop polishing the tap for a moment and instead, become obsessed with one magic number: Net Revenue Retention (NRR).
Forget complex definitions. NRR answers a simple question: “How much is our revenue from existingcustomers growing (or shrinking)?”
It includes the revenue you keep, plus any expansion from upsells, minus any revenue lost from downgrades and cancellations (churn).
The goal? Get your NRR over 100%.
An NRR of 105% means that for every £100 you had at the start of the year, you now have £105—without even signing a single new customer. This is the holy grail. It means the water already in your bucket is magically expanding. It forces you to focus on product quality, customer happiness, and finding ways to deliver more value to the people who already trust you.
THE RESULT: Your Growth Engine Starts Compounding
When you shift your focus to NRR, something incredible happens. Your growth becomes robust and compounds on itself. It’s the difference between constantly running on a hamster wheel for new business and building a fortress of stable, predictable revenue.
A business with 110% NRR is fundamentally more valuable, more stable, and more profitable than one with 85% NRR, even if they have the same top-line growth. One is building on solid ground; the other is building on a sponge.
At WrightCFO, our first job is often to hand the founder a towel and point to the holes in their bucket. We build the simple, clear dashboards that make metrics like NRR and customer churn impossible to ignore. We help you see not just how fast you’re growing, but how sustainably.
So, take a moment to look away from your shiny tap. Are your feet wet?
If you don’t know the answer, perhaps we should talk.
This article was originally published here on LinkedIn on 18th June, 2025.
