From the article:<p>> Every extra $1,000 in Monthly Recurring Revenue (MRR) contributes $78k to the annualized revenue number. This is basic math<p>"Basic math" tells me that $1k in monthly revenue is $12k in annual revenue [1].<p>I ran some numbers and figured out that he's actually talking about $1k of monthly revenue <i>growth</i> per month. I.e. if your plan costs $10/month and you get 100 new customers per month, then at the end of the year, you'll be making $78k / year more than you would have if you didn't have any new customers.<p>This is, indeed, basic math. (In particular the sum of an arithmetic series [2]; he comes up with 78 because it's the 12th triangular number [3] [4].)<p>[1] Plus a little bit if you're putting the money in an interest bearing account, but interest rates are very low right now.<p>[2] <a href="http://en.wikipedia.org/wiki/Arithmetic_progression#Sum" rel="nofollow">http://en.wikipedia.org/wiki/Arithmetic_progression#Sum</a><p>[3] <a href="http://en.wikipedia.org/wiki/Triangular_number" rel="nofollow">http://en.wikipedia.org/wiki/Triangular_number</a><p>[4] <a href="http://oeis.org/A000217" rel="nofollow">http://oeis.org/A000217</a>