FORECASTING ARR AND MRR

Summary from the TLDR Founders newsletter

Most SaaS companies spend weeks building elaborate forecasting models only to base projections on gut feelings, then act surprised when ARR comes in 15% below target because they forgot about that summer churn spike that happens every year. The companies that nail their forecasts aren't trying to predict the future - they calculate churn, expansion, and contraction as percentages of opening balance using six-month rolling averages from their own historical data.