Startup Metrics

I'm a [stage] startup in [industry].
What metrics should I be tracking?
What benchmarks should I aim for?

Help me calculate my SaaS metrics:
[Provide: MRR, customer count, churn data, acquisition costs]

My metrics: [list metrics]
What's concerning? What should I focus on fixing?

## Metrics Framework by Stage

### Pre-Seed (Validation Stage)
**Focus:** Is this a real problem worth solving?

| Metric | Why It Matters | Good Signal |
|--------|---------------|-------------|
| Problem interviews | Validate problem exists | 10+ interviews, 70%+ confirm |
| Solution interviews | Validate solution fits | 60%+ would use |
| LOIs/Waitlist | Real interest signal | Signed commitments |
| Engagement (if prototype) | People want to use it | Daily active usage |

**Not important yet:** Revenue, CAC, LTV, growth rate

---

### Seed (Product-Market Fit Stage)
**Focus:** Do people want this? Will they pay?

| Metric | Why It Matters | Good Signal |
|--------|---------------|-------------|
| **MRR/ARR** | Revenue traction | Any consistent revenue |
| **MoM Growth** | Trajectory | 15-20%+ MoM |
| **Retention** | PMF indicator | >80% monthly retention |
| **NPS** | Customer love | >50 NPS |
| **Engagement** | Product usage | DAU/MAU >20% |

**Emerging importance:** Early unit economics, CAC/LTV ratio

---

### Series A (Scale Stage)
**Focus:** Can this scale? Are unit economics viable?

| Metric | Why It Matters | Good Signal |
|--------|---------------|-------------|
| **ARR** | Revenue scale | $1-2M+ |
| **ARR Growth** | YoY trajectory | 3x YoY |
| **Net Revenue Retention** | Expansion + churn | >100% (ideally >120%) |
| **LTV/CAC** | Unit economics | >3:1 |
| **CAC Payback** | Efficiency | <18 months |
| **Gross Margin** | Business viability | >70% (SaaS) |

---

### Series B+ (Optimization Stage)
**Focus:** Efficiency and path to profitability

| Metric | Why It Matters | Good Signal |
|--------|---------------|-------------|
| **Magic Number** | Sales efficiency | >0.75 |
| **Rule of 40** | Growth + profitability | >40% |
| **Burn Multiple** | Cash efficiency | <2x |
| **Net Dollar Retention** | Account growth | >120% |
| **Quick Ratio** | Growth quality | >4 |

## Metric Calculations

### Revenue Metrics

**MRR (Monthly Recurring Revenue):**
MRR = Sum of all recurring revenue per month

**ARR (Annual Recurring Revenue):**
ARR = MRR × 12

**MRR Components:**
- New MRR: Revenue from new customers
- Expansion MRR: Upgrades and cross-sells
- Contraction MRR: Downgrades
- Churned MRR: Lost customers

**Net New MRR:**
Net New MRR = New + Expansion - Contraction - Churned

---

### Growth Metrics

**MoM Growth Rate:**
Growth = (MRR this month - MRR last month) / MRR last month × 100

**YoY Growth Rate:**
YoY = (ARR this year - ARR last year) / ARR last year × 100

**CMGR (Compound Monthly Growth Rate):**
CMGR = (Ending MRR / Starting MRR)^(1/months) - 1

---

### Retention Metrics

**Gross Revenue Retention (GRR):**
GRR = (MRR - Churned MRR - Contraction MRR) / MRR × 100
Maximum: 100% (doesn't include expansion)

**Net Revenue Retention (NRR) / Net Dollar Retention (NDR):**
NRR = (MRR + Expansion - Contraction - Churned) / MRR × 100
Can be >100% (good!)

**Logo Churn:**
Logo Churn = Customers lost / Customers at start of period × 100

**Revenue Churn:**
Revenue Churn = Churned MRR / MRR at start of period × 100

---

### Unit Economics

**Customer Acquisition Cost (CAC):**
CAC = Total Sales & Marketing Spend / New Customers Acquired

**Lifetime Value (LTV):**
Simple: LTV = ARPU × Gross Margin × Customer Lifetime
With churn: LTV = (ARPU × Gross Margin) / Monthly Churn Rate

**LTV/CAC Ratio:**
LTV/CAC = LTV / CAC
Good: >3:1

**CAC Payback Period:**
Payback = CAC / (ARPU × Gross Margin)
Good: <18 months

---

### Efficiency Metrics

**Magic Number:**
Magic Number = Net New ARR this quarter / S&M Spend last quarter
>1.0 = Very efficient
0.75-1.0 = Good
<0.5 = Inefficient

**Rule of 40:**
Rule of 40 = Revenue Growth Rate + Profit Margin
>40% = Healthy balance of growth and profitability

**Burn Multiple:**
Burn Multiple = Net Burn / Net New ARR
<1x = Excellent
1-2x = Good
>2x = Concerning

**Quick Ratio:**
Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)
>4 = Excellent growth quality

## Metric Benchmarks

### SaaS Benchmarks by Stage

| Metric | Seed | Series A | Series B |
|--------|------|----------|----------|
| ARR | <$1M | $1-5M | $5-15M |
| MoM Growth | 15-25% | 10-15% | 5-10% |
| YoY Growth | 3x+ | 2-3x | 1.5-2x |
| Gross Margin | >60% | >70% | >75% |
| LTV/CAC | >3x | >3x | >4x |
| CAC Payback | <24 mo | <18 mo | <12 mo |
| NRR | >100% | >110% | >120% |
| Logo Churn | <5%/mo | <3%/mo | <2%/mo |

### What "Good" Looks Like by Company Type

**SMB SaaS (low touch):**
- Logo churn: 3-5% monthly
- NRR: 80-100%
- LTV/CAC: >3x
- CAC: <$1,000

**Mid-Market SaaS:**
- Logo churn: 1-2% monthly
- NRR: 100-120%
- LTV/CAC: >4x
- CAC: $5,000-20,000

**Enterprise SaaS:**
- Logo churn: <1% monthly
- NRR: 110-150%
- LTV/CAC: >5x
- CAC: $20,000-100,000+

### Engagement Benchmarks

| Metric | Consumer | B2B SaaS |
|--------|----------|----------|
| DAU/MAU | >20% | >40% |
| D1 Retention | >40% | >50% |
| D7 Retention | >20% | >30% |
| D30 Retention | >10% | >20% |

## Metric Diagnosis Guide

### If MRR Growth is Slowing...

**Possible causes:**
1. Market saturation (ran out of easy customers)
2. Product-market fit weakening (competition, changing needs)
3. Sales inefficiency (declining magic number)
4. High churn eating new growth

**Diagnostic questions:**
- Is logo churn increasing?
- Is CAC increasing?
- Is conversion rate declining?
- Is expansion revenue flat?

---

### If Churn is High...

**Possible causes:**
1. Onboarding problems (never got value)
2. Product gaps (missing critical features)
3. Wrong customers (sold to people who shouldn't buy)
4. Competition (better alternatives emerged)
5. Pricing mismatch (not worth it)

**Diagnostic questions:**
- When do customers churn? (early = onboarding, late = value)
- What's the churn reason? (survey departures)
- Which segments churn most?
- What's usage pattern before churn?

---

### If CAC is Too High...

**Possible causes:**
1. Wrong channel (expensive acquisition)
2. Poor targeting (low conversion)
3. Weak positioning (hard to differentiate)
4. Long sales cycles (expensive process)
5. Market competition (bidding up costs)

**Diagnostic questions:**
- What's CAC by channel?
- What's conversion rate at each stage?
- How long is sales cycle?
- What's win rate vs. competition?

---

### If LTV is Too Low...

**Possible causes:**
1. High churn (short lifetime)
2. Low ARPU (underpriced or wrong segment)
3. No expansion revenue (no upsell path)
4. Low gross margin (cost too high)

**Diagnostic questions:**
- What's average customer lifespan?
- What's ARPU distribution?
- What's expansion revenue %?
- Are costs scaling with revenue?

---

### Quick Diagnostic Table

| Symptom | Primary Metric | Secondary Checks |
|---------|---------------|------------------|
| Revenue plateau | MRR growth rate | New vs. expansion breakdown |
| Customers leaving | Churn rate | Cohort analysis, exit surveys |
| Expensive growth | CAC, Magic Number | Channel efficiency, conversion |
| Low profitability | Gross margin | COGS breakdown, pricing |
| "Leaky bucket" | Quick Ratio | Churn + expansion balance |

## Investor Metrics Dashboard

### What Investors Want to See (by stage)

**Seed Deck Metrics:**
- MRR and growth trajectory
- Customer count and retention
- Engagement metrics
- Early unit economics (if available)

**Series A Deck Metrics:**
- ARR and YoY growth
- Net Revenue Retention
- LTV/CAC ratio
- CAC Payback
- Cohort analysis
- Customer breakdown by segment

**Series B+ Deck Metrics:**
All of above plus:
- Magic Number
- Rule of 40
- Burn Multiple
- Detailed unit economics by segment
- Efficiency trends over time

### Dashboard Template