

The impact of $2k of new recurring revenue on a SAAS business - samaparicio
http://blog.aparicio.org/2013/02/08/recurring-revenue-impact-for-saas/

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csense
From the article:

> Every extra $1,000 in Monthly Recurring Revenue (MRR) contributes $78k to
> the annualized revenue number. This is basic math

"Basic math" tells me that $1k in monthly revenue is $12k in annual revenue
[1].

I ran some numbers and figured out that he's actually talking about $1k of
monthly revenue _growth_ per month. I.e. if your plan costs $10/month and you
get 100 new customers per month, then at the end of the year, you'll be making
$78k / year more than you would have if you didn't have any new customers.

This is, indeed, basic math. (In particular the sum of an arithmetic series
[2]; he comes up with 78 because it's the 12th triangular number [3] [4].)

[1] Plus a little bit if you're putting the money in an interest bearing
account, but interest rates are very low right now.

[2] <http://en.wikipedia.org/wiki/Arithmetic_progression#Sum>

[3] <http://en.wikipedia.org/wiki/Triangular_number>

[4] <http://oeis.org/A000217>

