Alex Hormozi

He means that users start, they get activated, and then they never churn.

That is what growth looks like.

Because if you can retain a certain percentage of customers forever, then it means all you do is you can just keep filling in the front end, but then that base level just keeps sticking and growing and growing and growing.

And that is how software companies become incredibly valuable.

So the biggest problem you have to solve is number one, making a product that people wanna buy, and number two, making sure that they keep buying it, they keep coming back, they keep spending money on it.

That's the issue.

And so on a consumer side, if you're keeping over 60% by the end of the year from Logo's perspective, ideally over 100% from a revenue perspective, that becomes an incredibly valuable business.

And so what do I mean the difference between, I'm gonna get a little bit softwarey, but Logo churn versus revenue?

So revenue retention is if I have 10 customers that pay me $10 a month, that means that I'm making $100 a month.

A year later, am I still making $100 a month from those initial customers?

Now, I might have lost a few of those customers, but if some of those other customers spend more money, because we build our software in such a way that we have the opportunity for them to spend more, if we have more than $100 from those original customers, we have 100% or greater revenue retention.

That's the game you want to be in.

And that works the same for consumers as it does for enterprise sales, for B2B.

So all the way through.

Now, it tends to be easier to have stick on enterprise customers because they're willing to incur more costs.

Switching costs are higher for them.

Whereas consumers, it's harder.

But there's a whole hell of a lot of them.

So how do you win in software or in SaaS?

Number one, you have to obsess over product quality and customer feedback.