"The Top Metrics for Vertical SaaS Companies" — CJ Gustafson (Mostly Metrics)

Why this is in the vault

Squarely is, in a loose-fitting frame, a vertical-SaaS-shaped bet (vertical = "people who play one specific puzzle daily" not "everyone who likes games"). The metrics that matter for vertical-SaaS-shaped products are different from generic consumer-app metrics, and CJ's piece is the cleanest enumeration I've seen. Saving the framework as a reference for when Squarely's analytics conversation gets serious.

⚠️ Sponsorship

Sponsored by LockSimple. Same sponsor as the Chicken-or-Egg piece — LockSimple was the recurring advertiser earlier in 2026 before Brex and Abacum took over. Doesn't appear to bend the editorial.

Core thesis

Vertical SaaS companies need metrics that capture (a) wallet-share within a narrow ICP rather than market share across a broad one, (b) multi-product attach (because the path is layering products into the same customer), and (c) location-level / transaction-level penetration (because the unit of compounding is per-location, not per-logo).

The five metrics

1. AOV / ARPU. Average order value or average revenue per user — but the use is to track product-stacking, not headline revenue. Increasing ARPU = more products attached to existing accounts.
2. Product Attach Rate. What % of customers use 2+ products. Vertical SaaS lives or dies on cross-sell to the same logo.
3. Take Rate. For transaction-flow products, the commission percentage. CJ cites 5-30% range depending on marketplace shape. Direct lift from marketplace economics applied to vertical-SaaS-with-payments-attached.
4. Net Dollar Retention. Existing-customer expansion as the growth engine. For vertical SaaS, NDR > 120% is the bar.
5. Growth Equation: Locations × ARPU. The atomic unit. Vertical SaaS compounds by adding locations (or location-equivalents — for a consumer puzzle app, that's "active daily users") and increasing per-location revenue.

Voice tactics

• "You can't be everything to everyone. I've tried — just ask my in laws." The self-deprecating personal-life callback as punchline.
• "I heard there's a 74th competitor to Monday launching next week, this one incorporates AI." Specific-number-as-comic-exaggeration.

Mapping against Ray Data Co

• Squarely's atomic unit reframed. Squarely's growth equation, by analogy: DAU × ARPU. DAU is the location-equivalent (each daily player is a "store"). ARPU is currently low because Squarely is one-time-purchase with no recurring layer. The implication: Squarely's growth math doesn't actually compound until there's a recurring ARPU layer (subscription, IAP, ads-as-revenue). Single-purchase puzzle is a flat business by definition. This is a useful, slightly uncomfortable, clarification.
• Product Attach Rate is the path. If Squarely is to grow beyond one-time-purchase, the attach question is: what product does a daily-puzzle-player also want, that we can sell? Candidate adjacencies: puzzle-archive subscription, friends-leaderboard premium, themed puzzle packs, a sister-puzzle (different mechanic, same brand). The math becomes interesting at attach rate > 30%.
• Take Rate isn't directly relevant to Squarely (no transaction flow), but is directly relevant to any future RDCO bet that sits between two parties (Sanity Check-marketplace variant, MAC-as-platform variant). Filing for that.
• NDR > 120% as the vertical-SaaS bar. Aspirationally relevant. Squarely doesn't have an NDR concept (no subscriptions yet) — but if/when we add a subscription, the bar from CJ is 120%. That's a hard bar for a consumer app. Probably means Squarely-as-vertical-SaaS only works if we move into the daily-ritual-bundle SKU, not single-game subscription.

Related

• [[2026-05-11-mostlymetrics-owning-the-control-point]]
• [[2026-05-11-mostlymetrics-chicken-or-egg-marketplace]]
• [[../01-projects/squarely/metrics]]