ARR

| startups | biz | bullshit |

*raspy old man voice*

Back in my day ARR used to mean something.

Three key components:

I have no idea what ARR means now.

First we saw usage-based-pricing models touting eARR where the e = expected (I always joke that the e stands for Enron). Now we have all these AI companies changing the A from annual to annualized which is not the same thing.

This is how the market collapses because we’re making decisions based on revenue multiples but the formula for ARR has reached its peak bullshit level and is only rising up from here.

Modern Definition of ARR

Annual12 Recurring3 Revenue4


  1. expected ↩︎

  2. annualized ↩︎

  3. we expect some people to stick around for longer than a month ↩︎

  4. we’ve sent an invoice to our customers finance team with net 90 terms and they assure us they’ll pay us soon ↩︎

Thank you for reading! Share your thoughts with me on bluesky, mastodon, or via email.

Check out some more stuff to read down below.

Most popular posts this month

Recent Favorite Blog Posts

This is a collection of the last 8 posts that I bookmarked.

Articles from blogs I follow around the net

Is Zig's New Writer Unsafe?

If we wanted to write a function that takes one of Zig's new *std.Io.Reader and write it to stdout, we might start with something like: fn output(r: *std.Io.Reader) !void { const stdout = std.fs.File.stdout(); var buffer: [???]u8 = undefined; …

via openmymind.net September 20, 2025

Are you an experienced software buyer? I could use some help.

If it seems like I’ve been relatively quiet lately on social media and my blog, that’s because I have. Liz, Austin, George and I have been busy toiling away on the second edition of “Observability Engineering” ever since April or May. I personally have be…

via charity.wtf September 19, 2025

Class Warfare! Can I eliminate CSS classes from my HTML?

I recently read a brilliantly provocative blog post called "This website has no class". In it, Adam Stoddard makes the case that you might not need CSS classes on a modern website: I think constraints lead to interesting, creative solutions […]. …

via Terence Eden’s Blog September 19, 2025

Generated by openring