Why Negative Churn is Such a Powerful Growth Mechanism

Negative churn is an incredibly attractive characteristic of a SaaS company because it means that customer accounts are like high-yield savings accounts. Every month, more money comes in, without much effort. This is a powerful effect and can fuel SaaS companies to huge success, as we saw in New Relic’s S-1.
The concept of negative churn is a bit amorphous so let’s illustrate the impact on a startup. The chart above plots the revenue growth of a hypothetical SaaS company for a year.