Any software company chasing hypergrowth is under immense pressure. Hypergrowth means constantly increasing monthly revenue, maintaining a relentless 60% growth rate rain or shine. It's the kind of sales pressure that makes even the calmest person break a sweat. To keep up, you don’t just need a steady stream of prospects—you need an ever-growing pipeline of deals. And with that kind of pressure, sometimes any customer seems like a good customer, as long as they’re willing to pay.
But here's the thing—when you're saying "yes" to every deal just to hit those numbers, you're playing a dangerous game. Chasing every dollar, especially with customers who aren’t a great fit, can hurt your bottom line in ways that might not be immediately obvious. That's where minimum deal economics come in. If you don’t define what a bad deal is for your business, you’ll end up taking on clients who do more harm than good in the long run.
So, what exactly is minimum deal economics? It’s the baseline financial threshold for doing business with a client. In other words, it’s the cutoff point that ensures fiscal responsibility. Before jumping into new deals, you need to understand your fully loaded customer acquisition cost (CAC). And no, CAC isn’t just marketing and sales expenses. It includes onboarding, administrative costs, and any other resource allocation that gets the client from prospect to paying customer.
Once you know the real cost of getting a customer live, you can calculate how long it’ll take to recover those expenses. If it takes more than 24 months to break even on a client, you may need to rethink that deal. Some people will try to bend the numbers, promising that future sales—layered ARPU (Average Revenue Per Unit)—or a client’s potential to scale will make the deal worth it. Others will say a big brand name will open doors for you down the line, so it's okay to take the financial hit now.
But let’s be real: bending financial truths is risky. Those future sales are hypothetical, and that glowing brand endorsement doesn't pay the bills today. This is why defining minimum deal economics is crucial.
Yes, it’s hard to say no when the sales pressure is high. Everyone on your team—especially sales—will lobby for any deal they can get. That’s their job! But in the end, it’s up to leadership, especially the CEO and founders, to draw the financial line. Minimum deal economics forces everyone in the company to focus on long-term growth, not just immediate wins. It creates discipline and prevents bad deals that erode profitability.
In a world obsessed with hypergrowth, it’s easy to get caught up in the chase. But sometimes, the smartest move is to slow down, define your financial boundaries, and make sure every deal you sign is a good one. After all, sustained growth comes from making the right deals, not just any deal.
So, take a step back, align with your finance and sales teams, and set those minimum deal economics. You’ll be glad you did when the pressure to grow doesn’t sacrifice the stability of your business. Sometimes, you’ve got to slow down to speed up.