Why it matters
Growth that doesn't turn into revenue isn't a business. Pricing is often the highest-leverage change a company can make, and unit economics decide which channels you can afford at all.
This station covers pricing and packaging, freemium and trial models, CAC, LTV and payback, expansion revenue, and the SaaS metrics investors and operators use.
After this station you can
- Calculate CAC, LTV and payback period from raw numbers
- Explain when freemium beats a free trial, and when it doesn't
- Critique a pricing page for clarity and anchoring
- Name the metrics that matter for a SaaS business at your stage
Every resource below is free to read or watch online. Links open in a new tab.
9.1 Pricing & packaging
| Resource | Type | Level | Time |
|---|---|---|---|
| SaaS pricing models: Everything you need to know — PaddleAn overview of flat-rate, tiered, per-seat, usage-based and freemium pricing models. | Guide | Beginner | 15 min |
| Pricing low-touch SaaS — Patrick McKenzie, Stripe AtlasConcrete advice on charging more, tiering by customer value and designing a pricing page. | Guide | Intermediate | 30 min |
9.2 Freemium & trials
| Resource | Type | Level | Time |
|---|---|---|---|
| A new look at free-to-paid conversion — Kyle Poyar, Growth Unhinged [free with email]Benchmarks for good free-to-paid conversion across freemium and trial models. | Newsletter | Intermediate | 20 min |
9.3 Unit economics (CAC, LTV, payback)
| Resource | Type | Level | Time |
|---|---|---|---|
| The SaaS business model — Patrick McKenzie, Stripe AtlasHow SaaS businesses make money, with plain explanations of churn, LTV and acquisition costs. | Guide | Beginner | 30 min |
| Startup Killer: the Cost of Customer Acquisition — David Skok, forEntrepreneursWhy LTV should be at least 3x CAC and CAC should pay back in about a year. | Article | Intermediate | 25 min |
| Five ways to build a $100 million business — Christoph Janz, Point NineLinks price per customer to how many customers you need and which channels can reach them. | Essay | Intermediate | 10 min |
9.4 Expansion revenue
| Resource | Type | Level | Time |
|---|---|---|---|
| Unlocking the Path to Negative Churn — David Skok, forEntrepreneursHow upsell, cross-sell and usage-based pricing can make revenue from existing customers outgrow churn. | Article | Intermediate | 25 min |
| The 30-day upsell window — Kyle Poyar, Growth UnhingedData from about 4,000 SaaS companies on when customers upgrade and when to push upsells. | Newsletter | Intermediate | 15 min |
9.5 SaaS metrics & benchmarks
| Resource | Type | Level | Time |
|---|---|---|---|
| 16 Startup Metrics — Jeff Jordan, Anu Hariharan, Frank Chen, Preethi Kasireddy (a16z)Clear definitions of common startup metrics and the mistakes people make reporting them. | Article | Beginner | 15 min |
| SaaS metrics library — ChartMogulAn A-Z reference for MRR, ARR, churn, CAC, LTV and other metrics, with formulas. | Docs | Beginner | 30 min |
| SaaS Growth Report — ChartMogulGrowth, retention and expansion benchmarks by ARR stage, from data on 2,000+ SaaS companies. | Guide | Intermediate | 30 min |
| SaaS Metrics 2.0 – A Guide to Measuring and Improving what Matters — David Skok, forEntrepreneursThe classic deep guide to SaaS metrics, cohort analysis, unit economics and dashboards. | Guide | Advanced | 1 h |
Exercise.txt — Run the unit economics
- Pick a business and estimate its monthly price, gross margin, and monthly churn.
- Calculate LTV.
- Estimate CAC for one channel.
- Calculate the LTV:CAC ratio and payback period, and write one sentence on whether that channel is affordable.
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Terms in this station
CACLTVPayback periodARPUNet revenue retentionFreemium
On the bookshelf
Paid books that go deeper on this station: Monetizing Innovation by Madhavan Ramanujam & Georg Tacke. See the full bookshelf.