Startup Metrics That Actually Matter
Startup Metrics That Actually Matter
You've got analytics dashboards lighting up like a Christmas tree. Page views, social followers, email subscribers - they're all going up and to the right.
But are you tracking what actually matters?
This week, we're cutting through the vanity metrics to focus on the 5 numbers that tell the real story of your startup's health.
The Problem with Vanity Metrics
Vanity metrics feel good but don't drive decisions:
These numbers go up, but your revenue stays flat. Here's what to track instead.
The 5 Metrics That Matter
1. Monthly Recurring Revenue (MRR)
What it is: Predictable revenue you can count on each month.
Why it matters: MRR is oxygen. It's the clearest signal of product-market fit and the foundation for all your growth projections.
How to calculate:
MRR = Number of customers × Average revenue per customer
What's good:
Track it in: Stripe Dashboard, ChartMogul, or a simple spreadsheet
2. Customer Acquisition Cost (CAC)
What it is: How much you spend to acquire one customer.
Why it matters: If it costs you $500 to acquire a customer who pays you $50/month, you have a problem.
How to calculate:
CAC = Total sales & marketing spend ÷ Number of new customers
What's good:
Pro tip: Track CAC by channel. Your Facebook CAC might be $200 while your product-led growth CAC is $5.
3. Churn Rate
What it is: The percentage of customers who cancel each month.
Why it matters: You can't grow if you're leaking customers faster than you're adding them. High churn is a red flag that screams "product-market fit issues."
How to calculate:
Monthly Churn = (Customers lost this month ÷ Customers at start of month) × 100
What's good:
Watch out: If churn is high in the first 30 days, your onboarding is broken. Fix that first.
4. Net Revenue Retention (NRR)
What it is: How much revenue you keep from existing customers, including upgrades and downgrades.
Why it matters: NRR > 100% means your existing customers are growing their spend - a sign of strong product value.
How to calculate:
NRR = (Starting MRR + Expansion - Downgrades - Churn) ÷ Starting MRR × 100
What's good:
Real example: Snowflake went public with 158% NRR. Their customers were spending 58% more each year without acquiring new ones.
5. Time to Value (TTV)
What it is: How long it takes a new user to get their first win with your product.
Why it matters: The faster users see value, the less they churn. Simple as that.
How to measure:
TTV = Time between signup and first "aha moment"
What's good:
How to improve:
The Dashboard You Actually Need
Stop checking 20 different dashboards. Build one that shows:
- •MRR trend (this month vs. last month)
- •CAC by channel (where to double down)
- •Churn rate (are you retaining?)
- •NRR (are customers expanding?)
- •TTV (are users getting value fast?)
Update it weekly. Review it with your team. Make decisions based on it.
Tools for Tracking
For MRR & Churn:
For CAC:
For TTV:
The Bottom Line
Investors don't care about your page views. They care about:
Track these five. Ignore the rest (for now).
Next Week: Email automation for startups - comparing Loops.so vs. Customer.io vs. Resend. Which one should power your transactional emails?
Stay sharp, The Startup Starter Kit Team
P.S. What's your current MRR? Reply with your number - we read every message and we're rooting for you.