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Ask HN: How do you forecast revenue for your SaaS?
Suppose you've been operating a SaaS for a bit. Now you've got some data on how users move through your conversion funnel. Things are fine, but what about next month, and the month after that? What can you expect? And what do you, SaaS owner and tech savvy HN user, use to forecast revenue based on the data you've gathered?
I was looking at some data today and noticed the following: after we onboarded a user, time-to-conversion roughly follows an exponential decay curve. Most of our signups convert within the first few weeks of onboarding. A handful convert much later, but the probability of conversion drops off sharply with age. Makes sense. I also assume this is pretty typical (yeah?).
So I did what tech-cofounders do...busted out numpy and scipy and did some curve-fitting ;) Assuming the probability of conversion follows an exponential distribution in time, the expected value of total future conversions should be a sum of exponential decay curves, one for each user, with each curve offset by age. The results of this match intuition so far. I'm curious if anyone uses a similar approach. (Or a dissimilar approach...that would be even more interesting.) Thanks in advance!