Founder Playbook

Retention
if you take the number of users that you're acquiring per month and divide that by your month-to-month churn rate you get the ceiling of users that you can keep at that level...at 5,000 the number in which the inputs will equal the outputs

The Growth Ceiling Formula: Divide Monthly New Users By Churn Rate To See Your Cap

Dan shares the formula most subscription founders don't know: max subscribers = new users per month / monthly churn rate. At 500 new users/month and 10% churn, you cap at 5,000 subscribers — period. Growing below that ceiling feels great and can mask the hard truth. The only ways to raise the ceiling are to reduce churn or increase acquisition. Without one of those, the business will plateau regardless of product investment.


D
Dan Layfield
Subscription IndexHelped scale Codeacademy ARR from $10M to $55M; consults subscription startups at subscriptionindex.com
Sub Club by RevenueCat
The Growth Formula: Churn, Retention Wins, & Smart Product Bets· 20:53
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