19 Startup Metrics Every Founder Needs to Track Today

Ever wonder what it takes to build a successful startup?

To measure growth and performance, you need to track essential startup metrics.

When you collect the right data, you can make smarter decisions, fuel growth, and build a sustainable business.

Below, I break down 19 essential metrics every founder needs to measure, including tips to identify your startup’s north star metric.

Key Takeaways:

• Founders should track a mix of financial, customer, engagement, and growth metrics.
• Measuring the right metrics helps you track performance and identify areas for improvement.
• Deciding on a north star metric aligns your team around a common goal.

What Are Startup Metrics and Why Do They Matter?

Startup metrics are measurements that reflect different aspects of your business performance.

With the right metrics, you can measure progress toward business goals and benchmark your growth.

So whether you’re aiming to sign your first 100 customers or you’re trying to secure your next funding round, these indicators will tell you if you’re on the right track.

In some cases, metrics also act as warning signs. They can alert you to problems like rising costs, declining revenue, or churned customers before they become trends that are tough to overcome.

Plus, they’re helpful for making important business decisions. Metrics give you the data you need to guide your startup in the right direction.

When building my agency from the ground up, I’ve used metrics to guide decisions on everything from service development to pricing strategy to user acquisition.

An Entrepreneurs Guide to Growing Your Startup

Essential Metrics Every Startup Founder Should Measure

These 19 metrics are important for every founder to track, no matter your startup marketing strategy. I’ve broken them down into categories to show what they reveal and why you should measure them.

Financial Metrics

Financial metrics reflect your startup’s fiscal health and stability. They show how much your business is earning and spending, providing a complete picture of monthly revenue and financial health.

1. Monthly Recurring Revenue

Monthly recurring revenue (MRR) reflects the revenue you generate every month, typically from product or service subscriptions. It’s essential for SaaS startups that need to track predictable revenue and measure monthly income.

You can also get a more nuanced view of MRR by evaluating:

• New MRR, which includes new customers only
• Expansion MRR, which includes upgrades from existing customers

Many startups also measure annual recurring revenue (ARR), which includes the total revenue for the year.

2. Net Profit

Net profit is the revenue your startup earns, minus expenses like cost of goods sold (COGS), operating expenses, and tax and interest payments.

Also known as your bottom line, it’s a critical measure of your startup’s profitability.

Net profit confirms whether your business is making money. It helps you gauge how well you generate revenue and manage costs. It also helps you assess whether your startup is on a path toward sustainable growth.

3. Gross Margin

Gross margin is a percentage that compares your revenue to your COGS.

Gross Margin = ((Revenue – Cost of Goods Sold) / Revenue) x 100%

It’s another way to measure profitability because it reveals how efficiently your startup turns revenue into profit.

It’s also a key startup metric if you’re planning to scale rapidly, as a high gross margin reflects profitable growth.

Essentially, the higher your gross margin, the more attractive your startup tends to look to investors.

4. Cash Runway

Cash runway is the amount of time your startup can keep operating before it’s out of money.

A healthy startup typically measures runway in months or years. When you raise funds, you generally want to aim for a round that gives you a runway of 24 to 36 months.

Having less than six months of runway on hand can be a negative signal to investors. But everything is relative. When you get ready to raise funds, you typically spend more on sales and marketing, which burns cash faster.

5. Burn Rate

Burn rate tells you how quickly you’re spending your startup’s cash.

It’s a key metric for measuring financial health and avoiding running out of cash unexpectedly.

Burn rate is particularly important for early-stage startups without significant cash reserves. You need to know how quickly you’re spending money so you don’t run out of it before you have time to raise funds.

But it’s an important metric for growth-stage startups, too. Tracking burn rate can help you determine if your expenses are increasing too quickly so you can turn around your spending before it’s too late.

Customer Metrics

Customer metrics help you understand the cost and value of acquiring customers. They also help you gauge net customer gain and loss.

6. Contract Value

Contract value refers to the size of the deals you sign with customers.

You can measure this metric a couple different ways:

• Total contract value refers to the full value, no matter how long the contract is
• Annual contract value evaluates this metric over a yearlong period

To benchmark growth, use annual contract value. This performance metric tells you if your service or product is generating more value over time due to price increases, feature additions, or scope expansions.

7. Customer Acquisition Cost

Customer acquisition cost (CAC) is the amount you spend to acquire a new customer.

Depending on your startup’s approach to customer acquisition, these costs might include:

• Marketing and sales expenses, including content creation, tool costs and employee salaries
• Digital advertising spend
• Event, travel, and entertainment costs
• Customer discounts and incentives

While you can calculate CAC as a single metric for all acquisition channels, I often find it helpful to figure CAC for paid acquisition separately. This way, you can get a sense of how your ad campaigns are performing.

8. Customer Lifetime Value

Customer lifetime value (LTV) is the net profit a customer generates over the course of the entire relationship.

It helps you assess how much value each customer provides, minus the CAC. This metric is also helpful for identifying your best (i.e., most valuable) customers.

For early-stage startups without much revenue history, measuring actual LTV can be difficult. Instead, I recommend measuring customer value for six or 12 months.

9. Churn Rate

Churn rate refers to lost customers or revenue. For SaaS companies and other subscription-based startups, churn refers to customers who don’t renew their contracts.

You can use this formula to measure either revenue or customers:

Churn Rate = (Lost [Customers or Revenue] / Total [Customers or Revenue at Start of Period]) x 100%

Some churn is inevitable. But I suggest measuring this metric over time so you can look for trends.

For example, if churn spikes, you might need to revisit your retention efforts. If churn continues to increase over time, your profitability can suffer.

10. Net Promoter Score

Net promoter score (NPS) measures customer satisfaction. To gauge NPS, you typically need to survey your customers and ask them how likely they are to recommend your solution to someone else.

NPS uses a scale from zero to 10:

• Promoters give your startup a nine or 10
• Passives give your solution a seven or eight
• Detractors rate your business zero through six

Churn rate and NPS are key metrics to consider when evaluating retention. I suggest using them to find areas to improve customer loyalty.

Engagement Metrics

Engagement metrics show how customers interact with your product or service. They track everything from the initial conversion to ongoing activity, which help you gauge whether customers find value in your offering.

11. Monthly Active Users

Monthly active users (MAU) is the number of unique customers who used your product or service in the past month.

The catch?

You have to define what activity means for your business. For example, you might define it as users who logged into your software at least once.

This metric provides critical insight into customer engagement and growth. I recommend measuring it over time to make sure customers are continuing to use your solution and your user base is continuing to grow.

12. Adoption Rate

Adoption rate is a percentage that shows how quickly customers begin using your service or product after they first discover it.

This metric helps you forecast traction and understand whether your service or product provides value and meets customers’ needs.

To calculate it, divide the number of active users by the number of signups. To focus on new customers, adjust the inputs to new active users and new signups.

13. Activation Rate

Activation rate is the percentage of customers who complete a desired action. It can include anything from completing an onboarding task (e.g., filling out a user profile) to trying a newly launched feature.

This metric offers insight into how users experience your solution and where it creates friction.

When you monitor activation rate trends, you can spot actions that users don’t complete. Then, you can use the data to improve your solution and increase your engagement metrics.

14. Retention Rate

Retention rate measures the percentage of customers you keep over the course of a time period.

Essentially the opposite of churn, customer retention rate is important for a few reasons. Retaining customers:

• Is more cost-effective than acquiring new customers and decreases CAC
• Increases LTV, a key customer metric
• Often aligns with NPS and reflects positively on your value proposition

15. Lead-to-Customer Conversion Rate

Lead-to-customer conversion rate reflects how frequently your business turns leads into customers.

It’s helpful for aligning marketing and sales efforts and checking the efficiency of your sales process. Plus, you can use this metric to forecast revenue, making it important to track for your startup growth.

Growth Metrics

Growth metrics indicate how quickly your startup is expanding. They’re important for assessing business growth and understanding if your startup is scaling at a rate that’s likely to attract investors.

16. Deferred Revenue

Deferred revenue is an important metric for SaaS companies and other startups that bill customers well in advance of delivering the product or service.

For example, many SaaS companies offer annual plans or even longer subscriptions. But they don’t recognize revenue when the contract is signed and the payment is received.

Instead, the revenue is deferred and then recognized over the course of the deal as the company delivers the service.

To get a better handle on growth, many startups factor in the change in deferred revenue when evaluating monthly or quarterly revenue. This clarifies whether revenue is coming from new or existing customers.

17. Total Addressable Market

Total addressable market (TAM) and market share are important growth metrics to measure as your startup scales.

For early-stage startups, TAM tends to be smaller. During this stage, you focus on achieving product-market fit with a specific audience segment and a single product.

But for growth-stage startups, TAM often expands. During this stage, you might launch new products or go after new customer segments, increasing your market size.

No matter your market size, it’s important to monitor your market share. This metric indicates how much of the overall market your business controls—which reflects your startup’s performance and growth potential.

18. Compound Monthly Growth Rate

Compound monthly growth rate (CMGR) measures month-over-month growth for a set period, such as six months or a year.

It reveals the rate at which your startup is growing. And it also helps you compare different periods against each other to identify trends and patterns.

One of the most flexible yet most informative metrics to track, CMGR works with several different values. For example, you can plug MRR, MAU, or other metrics into the formula:

CMGR = ((Final Value / Initial Value) ^ (1 / Number of Months)) – 1

19. Viral Coefficient

Also known as the K-factor, this metric measures the virality of your product or service. It evaluates the rate at which your startup attracts new customers via referrals from existing customers, which reflect organic growth.

A viral coefficient greater than one means every customer you acquire attracts more than one additional customer. This indicates exponential startup growth, typically at a lower CAC.

Viral Coefficient = Average Number of Referrals per User / Average Conversion Rate for Referred Users

How to Find Your Startup’s North Star Metric

The longer I work with startups, the more I see that tracking the right metrics doesn’t mean making the longest possible list of measurements to monitor.

Instead, it’s about identifying specific metrics that matter to your business and your stakeholders—whether you’re bootstrapping your startup or planning to seek investors.

In many cases, there’s a single startup metric you can build around to make sure you’re hitting your performance goals.

Also known as a north star metric, this measurement keeps the entire company focused, answers stakeholders’ most important questions, and inspires your team to experiment with a shared goal in mind.

To decide on your north star metric, you need to know your business type (e.g., SaaS, media, or transactional) and your growth stage (e.g., pre-launch, early stage, or growth stage).

• For pre-launch startups, it’s typically best to collect qualitative feedback rather than tracking metrics you can quantify.
• For early-stage startups, it’s often best to monitor conversion rates, NPS, and MAU.
• For growth-stage startups, it’s more helpful to measure value-focused metrics like churn, LTV, and MRR.

My recommendation?

Keep your north star metric consistent as long as it’s relevant so you can benchmark results. But don’t hesitate to reevaluate as your startup matures and reaches the next stage of growth.

Conclusion

To achieve your business goals, you need to measure the right metrics and set relevant key performance indicators (KPIs).

No matter your growth goals, our agency can help with organic and paid marketing. Contact us to learn how we can grow your startup revenue with paid media, SEO, email marketing, and other channels.