How MRR growth compounds

MRR growth is usually measured as a monthly percentage, and it compounds. A product at $1,000 MRR growing 10% a month doesn't reach $2,200 in a year. It reaches $3,138, because each month's growth is on a bigger base.

MRR after n months = current MRR × (1 + monthly growth rate)ⁿ

How long until I reach my goal?

Rearranging the formula gives the number of months to any target:

Months to target = ln(target ÷ current) ÷ ln(1 + growth rate)

From $2,000 MRR growing 8% a month, $10,000 MRR is ln(5) ÷ ln(1.08) ≈ 21 months away. At 15% a month it's only 11.5 months. Small changes in growth rate move the date a lot, which is why founders track growth obsessively.

What growth rate do I need?

If you have a deadline, like "$10K MRR before my savings run out in 18 months", work backwards:

Required monthly growth = (target ÷ current)^(1 ÷ months) − 1

Use the second tab of the calculator to find it.

Compounded monthly growth rate (CMGR)

Real growth is bumpy: +30% one month, +2% the next. CMGR turns a messy history into one comparable number:

CMGR = (ending MRR ÷ starting MRR)^(1 ÷ months between) − 1

Going from $1,500 to $6,000 MRR over 12 months is a CMGR of 12.2%. Use CMGR rather than an average of monthly percentages, which overstates growth when months are volatile.

What's a good MRR growth rate?

There's no single answer, but common reference points:

Stage Strong monthly growth
Under $10K MRR 10–20% (small base, big swings)
$10K–$100K MRR 7–15%
$100K MRR+ 5–10%

Y Combinator famously suggests 5–7% weekly growth during the program for very early companies. For a bootstrapped indie product, steady 5–10% monthly growth is excellent and compounds into a real business within a few years.

Why projections are optimistic

Growth rates almost always decay as a product gets bigger. Your first 100 customers come from your network and launches, and the next 1,000 need repeatable channels. Treat any projection more than 12 months out as a motivating scenario, not a plan. Also note that this projection uses net growth. If churn rises as you grow, net growth falls even when new sales stay flat.

When you hit a milestone, make a card and share it. See the guide to building in public for why that helps you grow.