Jeff Horing

But the change in new business is way more important.

The change of the change.

I'm growing 100% year over year, my net new bookings

That second derivative is really powerful, where you see a lot of companies with almost zero change in the new business that they had each year.

Off a small number, that could still look like a really big growth rate, sometimes as much as 100% or 75%.

But you can copyright that number if it's flat, and that happens a lot, for example, in vertical software, where you quickly saturate the number of decisions made in a given area.

year and all of a sudden model out five years with a flat new bookings number and your exit growth rate is going to be a lot different than what Google was able to do, which was compounded 100% for 15 years.

We keep learning that you sometimes get fooled into the trap of value and it is not a great way to make money in my estimation.

And people do it and people are really good at it.

I'm not going to say it's not doable, but buying cheap in technology is not a long list of really rich people who've done that as compared to the people who've just bought the dream.

There's a very long list of people who've made lots of money on the dream.

We will not do a low gross retention business today unless we really are confident we could change it.

We think that metric is really the fundamental driver of all exit values and ultimately large companies.

We'll obviously make exceptions if we think we can fix things or we think maybe there's a good story as to why it was not enough sales capacity, this, that.

At least half my partners would tell you that they prefer not to compromise on any of those metrics.

Their view is if you look back in time, nine out of 10 times, those metrics have been the driving metrics for our success.

Zoom out, simple math is LTV divided by CAC.

That's all you're trying to understand is I invest in money, assume R&D gets somewhat normalized to levels that are industry standard.

That's really what you're trying to tease out.

GDR is a great predictor on LTV.