Adlega Blog:

The Basics of Valuation Ever wondered how Instagram was worth $1 billion when Facebook bought it, even though it wasn’t making any money? Welcome to the fascinating world of startup valuation, where potential matters more than current profits. Common Valuation Methods 1. Revenue Multiples The simplest method: taking your annual revenue and multiplying it by…

What’s Enterprise Business? Imagine your five-person startup that makes a cool project management app suddenly grew into Microsoft. That’s basically what enterprise business is – it’s what happens when a business becomes so big it needs an HR department just to manage its other HR departments. Definition Enterprise business typically refers to large organizations that…

Why SaaS Metrics Matter Software as a Service (SaaS) businesses operate differently from traditional companies. Instead of one-time sales, they rely on recurring revenue and long-term customer relationships. While there are dozens of metrics you could track in a SaaS business, we’ll focus on some of the most crucial ones that help understand business health…

What is a Lead Magnet? In simple terms, a lead magnet is something valuable you give away for free in exchange for someone’s contact information, usually their email address. Think of a lead magnet like a free sample at the grocery store. Just as those tasty samples make you more likely to buy the product, a lead…

What is Lead Generation? Lead generation is the process of attracting and converting interested people into potential customers. Think of it as filling your sales pipeline with people who might want to buy your product or service. Instead of waiting for customers to find you, lead generation actively seeks out and engages potential buyers. Understanding…

What is Feature Adoption Rate? Feature Adoption Rate measures the percentage of users who actively use a specific feature after its release. This metric is crucial for understanding whether users find value in new features and helps guide product development decisions. How to Calculate Feature Adoption The basic formula for fature aadoption rate is straightforward:…

What is ARPU? Average Revenue Per User (ARPU) measures how much revenue a business generates from each user, including both paying and non-paying users. It’s a key metric for understanding business health and growth potential. Basic Formula and Example ARPU = Total Revenue ÷ Total Number of Users Simple Example: Monthly revenue: $10,000 Total users:…

What is ARPPU? ARPPU measures how much revenue you generate from each paying user. Unlike ARPU (Average Revenue Per User), ARPPU only considers users who actually pay, giving a clearer picture of customer value. How to Calculate ARPPU Basic Formula ARPPU = Total Revenue ÷ Number of Paying Users Example Calculation A SaaS company has:…

What is Concentration Risk? Concentration risk occurs when a business depends too heavily on a single factor: One major customer One key supplier One revenue stream One geographic location One product line Imagine putting all your eggs in one basket – that’s concentration risk in its simplest form. Let’s explore how this risk affects businesses…

What is CMGR? Compounded Monthly Growth Rate (CMGR) measures your consistent monthly growth rate, assuming growth compounds each month. It’s particularly useful for startups and SaaS companies to understand their true growth pace. Why CMGR Matters Shows consistent growth pace Better than simple averages (see explanations further in the article) Accounts for compounding effect Helps…

What are Variable Costs? Simple Definition: Variable costs are expenses that change directly with your production or sales volume. The more you produce or sell, the higher these costs; the less you produce or sell, the lower they become. Key Characteristics Change proportionally with activity Zero if no production/sales Easy to assign to specific products…

What are Fixed Costs? Simple Definition: Fixed costs are expenses that remain constant regardless of how much you produce or sell. Think of them as the bills you have to pay even if you don’t make a single sale. Key Characteristics Don’t change with production volume Usually time-based (monthly, yearly) Must be paid regardless of…