Understanding NRR changed how I look at SaaS

One thing I've noticed while building in SaaS:

Most founders know their MRR.

Far fewer know their NRR.

I was one of them.

For a long time, I thought growth was mostly about acquisition.

More traffic.

More signups.

More customers.

More MRR.

But Net Revenue Retention made me look at the business differently.

Because NRR asks a question that MRR doesn't:

If you stopped acquiring customers tomorrow, what would happen to your revenue?

That's a fascinating question.

Imagine two SaaS companies.

Both are at $100k MRR.

Both are growing.

Both are adding customers.

From the outside, they look almost identical.

But inside:

Company A is constantly replacing churned customers.

Company B is retaining customers, expanding accounts, and increasing revenue from its existing base.

Same MRR.

Completely different economics.

The second company has built something much more durable.

That's what NRR reveals.

It measures whether your existing customer base is becoming more valuable over time.

While learning about this, I built a simple NRR calculator for myself to understand the metric better:

The more I learn about subscription businesses, the more I think growth is only half the story.

Retention is the other half.

And NRR is one of the few metrics that captures both.

Curious:

How many of you actively track NRR versus just focusing on MRR?