The "phantom revenue" problem in SaaS metrics

Had three pitches this week where founders showed hockey stick growth, but when I dug into cohort retention it was basically a leaky bucket with great marketing spend. Starting to think half the SaaS world is confusing new bookings with actual business momentum.

There's actually a term for this in the literature - "phantom revenue" - where SaaS companies optimize for vanity metrics instead of unit economics. Bessemer's 2023 study found 40% of Series A companies couldn't accurately calculate their true LTV because they were measuring gross bookings instead of net retained revenue after churn.