SaaS 101

Net Dollar Retention — Fundamentals In Five Minutes

Net Dollar Retention summarised in five minutes for the founders that need to know!

Aidan Kenealy
4 min readApr 19, 2020

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Hi all, this is Fundamentals in Five minutes, where I take a topic relevant to a start-up founder and challenge myself to summarise it in five minutes or less.

Today’s article is all about Net Dollar Retention (NDR), the lesser-known yet incredibly valuable revenue metric. We’re going to discuss what it is, how it’s used, and why it’s important.

Can I get it all covered in under five minutes? You’ll need to read to the end to find out! There is a lot to cover so put five minutes on the Clock and let's get into it!

What is Net Dollar Retention?

NDR is a metric that dives deeper into changes in recurring revenue by accounting for the fluctuations within our existing revenue base.

To understand NDR, we need to first understand expansion, downgrades and churn and their roles in changing Monthly Recurring Revenue (MRR).

Increases in MRR

MRR can increase via two broad mechanisms.

  1. Through newly acquired customers.
  2. Through an increase in usage or upgrades…

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Aidan Kenealy

Professional startup advisor for founders of high growth startups. More details @ https://aidankenealy.com/