Metrics and key performance indicators (KPIs) are essential for startups to measure the success and growth of their business. Some common metrics and KPIs that startups may track include:
- Revenue: This is a measure of the amount of money that a startup brings in through its products or services. For example, a startup that sells software as a service (SaaS) may track its monthly or annual revenue to see how its sales are growing over time.
- Cost of customer acquisition (CAC): This is a measure of how much it costs a startup to acquire a new customer, and is typically expressed as the total amount spent on marketing and sales divided by the number of new customers acquired. For example, a startup that spends $100,000 on marketing and acquires 100 new customers in a month would have a CAC of $1,000.
- Customer lifetime value (CLV): This is a measure of how much revenue a startup can expect to generate from a typical customer over the course of their relationship with the company. For example, a startup that sells subscriptions to its software may track its CLV to see how much revenue it can expect to generate from each customer over the course of their subscription.
- Monthly recurring revenue (MRR): This is a measure of the amount of predictable revenue that a startup generates on a monthly basis, typically from subscriptions or other recurring sources. For example, a startup that sells subscriptions to its software may track its MRR to see how its recurring revenue is growing over time.
- Gross margin: This is a measure of a startup’s profitability, calculated as the difference between its revenue and the cost of goods sold, divided by its revenue. For example, a startup that sells physical products may track its gross margin to see how much profit it is generating on each sale.
These are just a few examples of the types of metrics and KPIs that startups may track. The specific metrics and KPIs that are most important for a startup will depend on its business model and industry.
