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What a few percent a month actually compounds to, and when you hit each milestone.
Eight percent a month sounds modest. It is 152% a year, and it doubles your business every nine months. The gap between how the monthly number feels and what it compounds to is the whole reason to run this.
Net of churn — this month's MRR ÷ last month's, minus one
Compounding at a constant rate is a projection, not a forecast. Growth rates almost always decline as the base grows, so treat long-range figures as an upper bound.
At 8% a month you double roughly every 9 months. That is 152% a year — the gap between the monthly figure and the annual one is why small changes to growth matter so much.
When you reach each milestone
| Monthly | Annual | Doubling time |
|---|---|---|
| 2% | 26.8% | 35 months |
| 5% | 79.6% | 14 months |
| 8% | 151.8% | 9 months |
| 10% | 213.8% | 7.3 months |
| 15% | 435.0% | 5 months |
The famous startup benchmark of 5–7% weekly is roughly 20–30% monthly, which annualises to somewhere between 800% and 2,200%. It is achievable only from a very small base, which is exactly the point of the benchmark.
The rate to enter is net of churn: this month''s MRR divided by last month''s, minus one. Using gross new MRR ignores everything leaving and produces a projection that never arrives.
If gross and net growth differ substantially, the quick ratio will tell you how much of your acquisition is being consumed by churn.
Divide 72 by your monthly growth percentage for an approximate doubling time in months. At 8%, that is nine months — close enough to the exact 9.01 to do in your head.
GOOD QUESTIONS
It depends heavily on stage. Very early companies can grow 15–20% monthly from a small base. At $1M ARR, 10% monthly is exceptional and 5% is strong. At $10M, 3–5% monthly is very healthy.
Net — this month's MRR divided by last month's, minus one. It already accounts for churn. Using gross new MRR produces a projection that ignores everything leaving and will never be reached.
Because the denominator grows. Adding $10,000 of MRR is 40% growth at $25,000 MRR and 1% at $1M. Maintaining a constant percentage requires adding ever-larger absolute amounts, which is why projections assuming constant rates overshoot.
Divide 72 by your growth rate to approximate the doubling period. At 8% monthly growth, 72 ÷ 8 = 9 months, which is almost exactly right. It works for any compounding rate.