>> wonder if they're just spending $.99 of every $1

If they spend $0.99 for $1 of MRR, that is amazing, because the first month's revenue covers the cost of acquisition and the rest of the stream is profit (minus other expenses of course.)

Some of it depends on churn and how much MRR you lose and how quickly.

So it's a metric you can game if you go viral on Twitter and get a lot of signups that cancel after one month?

Not really, because MRR isnt the only metric.

We'd look at an objective function of LTV to CAC ratio.

We'd ignore everything below a certain absolute MRR.

We'd also ignore anything below a certain MRR growth rate.

The ones we'd typically look at as an investor are: MRR/ARR, Churn, CAC and TLV.

TLV would be total lifetime value which includes the monthly revenue * months given churn.

CAC would be the advertisement cost.

This basically means, how much $ are you spending to make what total $ per customer, and how what is the volume.

Monthly recurring revenue typically corresponds with cashflow and cashflow pretty much rules the roost when thinking about useful metrics for a business. With sporadic, or unreliable, MRR you're going to have more risk because there's a higher likelihood of having a "down month" where you're forced to use savings or loans to cover expenses.

I typically only see MRR numbers for "one man startups" because you see the number and compare it to your salary and go - Shit I can do that. I could've done that. Damnit!

MRR is meaningless in larger startups because for all intents and purposes would be eaten by the salaries in two seconds, unless it's huge. At any point it becomes reported as annual revenue.

Startups spend like $2-$5 per $1 of MRR, which is why they run out of runway and constantly need more investors.

Successful startups spend more like $1.25 per $1 of MRR.

Profit is for solo founders and bootstrapers.

Just to dive into this, most advertising people are tracking "ROAS", Return on Ad Spend, so for every dollar you are spending in advertising, how much do you get back. Depending on your situation you may target different roas numbers and find it acceptable.

ROAS is a good operational metric, but I'd argue that for a SAAS, you need to look at CLV vs cost of acquisition.