FOUNDER DICTIONARY•KEY CONCEPTS & METRICS

Micro-SaaS Glossary

Essential terminology, financial metrics, and architectural frameworks every solo founder and software builder should know before launching.

MRR (Monthly Recurring Revenue)

Metrics

The predictable total revenue generated by a subscription SaaS business every 30 days.

Example: 50 customers paying ₹2,500/month = ₹1,25,000 MRR.

ARR (Annual Recurring Revenue)

Metrics

The annualized value of recurring subscription revenue (MRR × 12).

Example: ₹1,25,000 MRR = ₹15,00,000 ARR.

Micro-SaaS

Strategy

A small, focused software-as-a-service business built and operated by a solo founder or small team targeting a specific vertical niche without venture capital.

Example: A document checklist tool built specifically for bookkeeping firms.

Churn Rate

Metrics

The percentage of paying subscribers who cancel their subscription within a given time period (usually monthly or annually).

Example: Losing 2 out of 50 customers in a month = 4% monthly churn.

LTV (Customer Lifetime Value)

Metrics

The total revenue a single customer is expected to pay over their entire relationship with your software (Monthly Price / Churn Rate).

Example: ₹2,500/mo at 4% churn = ₹62,500 LTV.

CAC (Customer Acquisition Cost)

Metrics

The total sales and marketing spend required to acquire one new paying customer.

Example: Spending ₹10,000 on LinkedIn outreach to acquire 5 customers = ₹2,000 CAC.

Dunning

Engineering

Automated processes and email sequences used to recover failed recurring credit card payments before the subscription is canceled.

Example: Sending an automated SMS when an invoice credit card expires.

ICP (Ideal Customer Profile)

Strategy

A categorical description of the specific business or buyer persona that derives the highest value from your software with the lowest churn.

Example: Independent dental practices with 1–3 chairs and no full-time receptionist.

MVP (Minimum Viable Product)

Engineering

The simplest functional version of a software product that delivers the core value proposition to solve the user's primary pain point.

Example: A 1-page form with automated WhatsApp notifications, without multi-user teams.

Vertical SaaS

Strategy

Software designed specifically to serve the end-to-end workflows of a single specific industry rather than generic horizontal tools.

Example: Salon booking software vs. a generic calendar scheduling app.

PLG (Product-Led Growth)

Strategy

A business methodology where the software product itself drives customer acquisition, retention, and expansion through free tiers or self-serve trials.

Example: Allowing users to create their first 3 automated invoices for free before upgrading.

Willingness to Pay (WTP)

Strategy

The maximum price a target business is prepared to pay for a software solution based on the tangible time or money it saves.

Example: Bookkeepers paying ₹3,000/mo because it saves 6 hours of manual receipt chasing.

Unbundling

Strategy

Taking one specific feature from a giant, complex enterprise platform and building a superior, lightweight standalone tool.

Example: Unbundling Salesforce's customer review module into a ₹1,500/mo review reply concierge.

Bootstrap

Strategy

Building and scaling a business using personal savings and incoming customer revenue without raising outside venture capital or debt.

Example: Funding SaaS hosting from initial pre-order sales.

Speed-to-Lead

Sales

The amount of time that elapses between a prospect submitting an inquiry and a business responding with a quote or confirmation.

Example: Responding to trade quote inquiries within 60 seconds increases conversion by 391%.

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