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Q: I’m curious what metrics early-stage bottom-up SaaS startups track and how they visualize these metrics –– especially metrics other than MRR and revenue?
With so many tools, potential metrics to track, and perspectives on measuring your progress, it’s no surprise founders often struggle to know where to start.
Not having run a SaaS startup myself, I came at this question from a few directions: crowdsourcing the answer, asking my smartest founder friends, and doing a bit of primary research. Below you’ll find answers to the following three questions
🔬 What metrics should early-stage bottom-up SaaS founders focus on?
🛠 What tools should they use to track their metrics?
🎨 How does one best visualize and share these metrics?
I don’t have all of the answers so I’d love to hear from you. Is there anything below that looks off or incomplete? I’ll use this post as a living document and update it with anything I learn. Just reply to this email, leave a comment, or hit me up on Twitter. I would love to make this the most accurate and actionable list of recommendations for founders of bottom-up SaaS companies.
🔬 What metrics should early-stage bottom-up SaaS founders focus on?
Below are the most important metrics ranked in priority order, divided into three buckets: pre-revenue, post-revenue, and additional metrics to track. You don’t need to track all of these immediately — pick a few to start with and add more over time.
Pre-revenue:
1. Retention
User retention: % of new users who are still active 3-6 months later
Logo retention: % of new companies who are still active 3-6 months later
L7/L30 retention: Number of days that users are active per week/month
2. Virality within an organization
Invite rate: % of new users who sent at least one invite in the first X days
Invite conversion rate: % of users who receive an invite that sign-up in the next X days
Virality factor: % of new users who have come from an invite
3. Top-of-funnel growth
Traffic: Visits to site/week
MoM user growth: Month over month growth rate in total users
Activation: % new users who “activate”, whatever that means for your product
Post-revenue:
1. Revenue growth
MRR: Total and MoM MRR growth
ARR: Total and MoM ARR growth
New customers: New customers/week
2. Retention
Customer retention: % of new paying customers who are still customers 3-6 months later
Net Dollar Retention: MRR of each cohort at 12 months
3. Monetization
Paid company conversion: % of free companies that convert to paid within X days
Payback period: Average time to pay back CAC
Gross margins: Net sales revenue minus the cost of goods sold
Additional metrics to track and have available:
1. Engagement
DAU/MAU
Key actions per day/week (e.g. tasks created, pics sent)
Average time spent/user/day
2. Virality within an organization
Invite volume: When an invite was sent, median number of invites sent per user
Velocity of virality: Median days from 1 —> N seats at a company
Traction: Number of total companies with at least 3 users signed-up
Leads: Top domain name with most users (to target outreach)
3. Monetization
ARPU: Average revenue per user
User conversion: % of free users that convert to paid within X days
Quick ratio: (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)
Growth spend efficiency: CAC/LTV
Speed to next tier: If usage-based pricing, speed to next tier/plan
Company adoption: Number of users per domain name
4. Funnel conversion
Landing conversion: % visitors click CTA
Activation: % visitors who “activate”, whatever that means for your product
% visitors complete your sign-up flow
% visitors signup
🛠 What tool should founders use to track their metrics AND 🎨 How do I best visualize and share these metrics?
I put a call out on Twitter asking SaaS founders to share their metrics dashboards:
Below I’ve synthesized the best examples, and grouped them by the tools that these teams use to track these metrics. Surprisingly (though not that surprisingly) Google Sheets was by far the most used tool, followed by Profitwell and Google Data Studio (sitting on top of Google Sheets). If you have any more examples to share, shoot me a note!
1. Google Sheets
Courtesy of @craigzingerline:
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Courtesy of @garrett_wj:
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