Revenue Architecture: Why Math is the Business - Mastering the Mathematics Model for SaaS Growth | Gaz Evans S5:E8

Written by Mike J Midgley | Sep 22, 2025 9:47:13 AM

Welcome to the Force & Friction Podcast, where we break down what really moves the needle in GTM, RevOps, AI, partnerships, and especially in and around the SaaS growth models.

Today we continue our Revenue Architecture series with a deep dive into the Mathematics Model and why understanding the math of your business is fundamental to sustainable growth.

We're joined by Gaz Evans, partner and co-founder of Palaemon GTM AI named after the ancient guys who protected sailors through uncertain waters.

Gaz brings a unique perspective to RevOps and GTM engineering, having spent 20 years in sales before transitioning into revenue operations. His journey from employee to co-founder demonstrates the power of understanding both the front-line sales experience and the mathematical foundations that drive business growth.

We explore why SaaS companies don't fail from lack of ambition but from not understanding their business math, how the bowtie model reveals the interconnected dance of metrics across the entire customer journey, and why AI-native companies are process-first while traditional SaaS companies remain dangerously people-first.

Gaz Evans

Gaz Evans is a strategic operator with over two decades of experience in sales and sales leadership, including extensive time in SaaS. As Co-Founder / Chief Operating Officer of Palaemon, he specializes in GTM architecture, pipeline design, and operating model execution, combining technical depth with commercial focus to deliver scalable, data-driven infrastructure for early-stage B2B SaaS companies.

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What is The Mathmatical Model

Think of the Mathematical Model as the growth engine that reveals how small improvements compound into disproportionate results across your entire revenue system. It's not just about tracking metrics, it's about understanding the polynomial relationships that drive exponential growth in recurring revenue businesses.

If the Revenue Model tells you how you make money, the Mathematical Model tells you how that money multiplies over time.

The Mathematical Model operates on a fundamental principle: each side of the bowtie is governed by different mathematical principles.

Core Mathematical Principles:

1. Acquisition Side: Polynomial Growth Through Conversion Multiplication

The left side of the bowtie appears linear but operates on polynomial mathematics.

What looks like a simple equation - Commits = Opportunities × Win-rate reveals deeper complexity when you examine win-rate itself.

Win-rate is actually the product of multiple conversion rates across meetings:

•Win rate = CR(a) × CR(b) × CR(c) × CR(n)

•When simplified: Win rate = CR(n)^number of meetings

This creates polynomial growth where marginal improvements compound dramatically:

"A 2.22% increase in conversion rate per meeting (from 90% to 92%) across 12 meetings results in a 30% increase in overall win rate (from 28.5% to 36.7%)"

2. Retention Side: Exponential Growth Through Time

The right side operates on exponential mathematics, where small improvements in retention and expansion rates compound over the lifetime of customers:

•Growth Rate = NRR^time

•LTV = ARR_START × CR7 × CR8 (retention × expansion conversion rates)

This creates the "disproportionate impact" where modest improvements in Net Revenue Retention (NRR) create exponential growth curves over time.

3. The Growth Formula: Nonlinear Compounding Effects

The Mathematical Model reveals why SaaS businesses can achieve such dramatic growth, and why they can crash so quickly.

The formula combines:

•Acquisition Growth: Polynomial relationship between conversion improvements and output

•Retention Growth: Exponential relationship between time and accumulated revenue

•Compound Effect: Both sides multiplying together for disproportionate results

The Real Job of the Mathematical Model

Your Mathematical Model doesn't just measure performance, it predicts the future impact of improvements and reveals:

•Why marginal gains (1-5% improvements) create disproportionate results (20-50% growth)

•How the "SaaS Crash" happens when conversion rates decay across multiple stages

•Why retention and expansion create closed-loop systems that minimize volatility

•How AI-native companies use process-first approaches to optimize these mathematical relationships

It explains the difference between linear thinking (double the input, double the output) and polynomial reality (small improvements across multiple stages create exponential results).

Because here's the mathematical truth:

Growth doesn't come from massive improvements in single metrics. It comes from understanding how small, systematic improvements across multiple conversion points multiply together to create the compound growth that defines successful recurring revenue businesses.

And the mathematics begin here.

Here are the core areas we discuss in today's episode:

1: The Math Foundation: Why Numbers Drive Everything

Gaz opens with a fundamental truth that challenges the growth-at-all-costs mentality that has dominated SaaS for years. His perspective on why companies fail reveals the critical importance of mathematical understanding.

"Companies like SaaS companies... it's not. They don't fail because of a lack of ambition. They fail because they don't really understand the math of their business right? And there's this been this growth at all costs. Focus heavily on the top of funnel. Get everything in, and then sort of just forget about the other side."

This insight explains why so many well-funded, ambitious companies still struggle. The Mathematics Model in Revenue Architecture addresses this by connecting the left side (acquisition) with the right side (retention and expansion) of the bowtie, showing how recurring revenue creates the growth multipliers that make SaaS businesses truly scalable.

2: The Bowtie Revelation: Seeing the Complete Picture

Gaz describes his first encounter with the Winning by Design framework as a transformative moment that codified everything he'd been thinking about GTM for years.

"I immediately messaged the CRO from that story my business partner, and was like, I've just watched someone explain in the best way I've ever heard everything that we've been talking about for the last 6 years... that is the best way to succinctly explain to somebody what it is they need to do in go to market."

The bowtie model transforms how teams think about their business by laying the traditional funnel on its side and revealing the recurring revenue engine on the right. This visualization helps organizations understand that subscription businesses aren't just about winning customers—they're about keeping them engaged and delivering continuous impact.

3: Breaking the Sauron Syndrome: Ending Departmental Blame Games

One of Gaz's most powerful analogies describes how leadership often behaves like "the eye of Sauron," constantly scanning for someone to blame when things go wrong, rather than understanding the interconnected nature of GTM challenges.

"Often when things start to go wrong in the business, leadership becomes like the eye of Sauron, it must be sales. It must be marketing... and they get to the end of quarter and go. Oh, wait! Hold on! No, it wasn't the product... and they're constantly scanning looking for a simple problem. And often these things aren't simple. Single answer. Silver bullet problems. They are a interrelation, a dance of things that are happening."

The Mathematics Model helps break this cycle by showing how changes in one area impact the entire system. When teams understand the mathematical relationships between conversion rates, volume, and outcomes across the bowtie, they move from blame to collaboration.

4: Micro-Optimizations: The Compound Power of Small Changes

Gaz emphasizes how understanding the math enables powerful micro-optimizations that can have massive compound effects across the business.

"The idea of those micro adjustments is really powerful... that enables you to have an aligned, unified GTM discussion because it's not sales. You have to make 30% more... it's sales. We just need to increase the win rate. And then how can I help you increase win rate? Well, we need better quality MQLs, okay, great. So let's change. Let's adjust what we need to do in MQLs."

This approach transforms GTM discussions from departmental finger-pointing to collaborative problem-solving. Instead of demanding impossible improvements, teams can identify small, achievable optimizations that compound into significant results.

5: AI-Native vs. SaaS-Native: The Process-First Revolution

Gaz provides crucial insights into why AI-native companies are outpacing traditional SaaS companies, and it's not just about the technology—it's about fundamental operating principles.

"The AI native companies are process driven. They use data to make very quick decisions. They are constantly refining through feedback loops... The SaaS companies are still stuck... they're buying AI tools, but they're often not ready to even be getting the efficiencies out of it. It's really just sort of oh, I hope this works."

The key difference is that AI-native companies are process-first, then people, while traditional SaaS companies remain people-first, then process. This fundamental shift requires understanding the Mathematics Model as the foundation for everything else.

Final Thoughts

Gaz leaves us with a critical warning about the dangers of using AI without understanding the underlying business math.

"Strip out all of the AI pieces. Do you understand the operating math of your business. Do you understand the operating model? So when you plug in AI, it's going to make you more efficient and better and faster. But you understand what it's anchored in, and you're getting outcomes. You're not just trusting a machine to do your thinking for you."

His final insight emphasizes that leaders who truly understand their business math can use AI as a force multiplier, while those who don't understand the fundamentals will simply produce "volume" rather than efficiency.

The Mathematics Model isn't just about spreadsheets and formulas, it's about creating the foundation for aligned GTM teams, intelligent decision-making, and sustainable growth. As Gaz demonstrates, when you understand the math of your business, you move from hoping and guessing to knowing and optimizing.

In an AI-driven world, this mathematical foundation becomes even more critical for separating signal from noise and ensuring that technology amplifies intelligence rather than replacing it.

The Revenue Architecture Series

Watch more episodes from the Revenue Architecture Series - get started with the founder of Winning By Design Jacco van der Kooij's interview - watch that here:

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Mike Midgley runs a portfolio career, a dynamic digital entrepreneur, NXD, strategist, public speaker, Winning by Design certified Revenue Architect and Host at The Force & Friction Podcast.

Mike has achieved successful six and seven-figure exits over a 30+ year career, raised in excess of £1.6m [$2.5m] in Venture Capital and franchised his businesses 68 times.

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