How to Measure Startup Performance

In the startup world, it's easy to get distracted by metrics that feel good but don't drive real growth. Here's your comprehensive guide to focusing on what truly matters: 𝗩𝗮𝗻𝗶𝘁𝘆 𝗺𝗲𝘁𝗿𝗶𝗰𝘀 𝘁𝗼 𝗮𝘃𝗼𝗶𝗱: 1. Social media followers 2. Press mentions 3. Awards and recognitions 4. Number of features shipped 5. Headcount growth 6. Total raised funding 7. Logo count (without context) 𝗪𝗵𝘆 𝘁𝗵𝗲𝘆'𝗿𝗲 𝗱𝗮𝗻𝗴𝗲𝗿𝗼𝘂𝘀: - Create false sense of progress - Distract from real business challenges - Can lead to misallocation of resources 𝗠𝗲𝘁𝗿𝗶𝗰𝘀 𝘁𝗵𝗮𝘁 𝗺𝗮𝘁𝘁𝗲𝗿: 1. Revenue metrics:  • Monthly Recurring Revenue (MRR) growth • Annual Recurring Revenue (ARR) growth • Revenue per employee 2. Customer metrics:  • Customer Acquisition Cost (CAC) • Lifetime Value (LTV) • Churn rate • Net Revenue Retention (NRR) 3. Product metrics:  • Daily/Monthly Active Users (DAU/MAU) • Feature adoption rates • Time to value 4. Financial health:  • Burn rate • Runway • Gross margin 5. Sales efficiency:  • Sales cycle length • Conversion rates at each funnel stage • Quota attainment 6. Market penetration:  • Market share growth • Ideal Customer Profile (ICP) penetration 7. Team performance:  • Employee satisfaction and retention • Revenue per employee 𝗛𝗼𝘄 𝘁𝗼 𝘀𝗵𝗶𝗳𝘁 𝗳𝗼𝗰𝘂𝘀: 1. Define clear, outcome-based OKRs 2. Implement a data-driven decision-making culture 3. Regularly review and update your key performance indicators 4. Align team incentives with core business metrics 5. Celebrate achievements in key metrics, not vanity ones Remember: What you measure drives behavior. Make sure you're driving the right behaviors for sustainable growth. At Valley 🗻 , we're obsessed with metrics that drive real business impact. That's why we're building tools that focus on outcomes, not just activities. Are you measuring what truly matters?

Early-stage B2B companies are wasting colossal amounts of time trying to understand how people use their product with data. Instead: Just talk to your customers. If you try run analyses at this stage, there won't be enough concentration to find signal. You'll just spin your wheels. When you have <50 customers, you should know all of your customers by name. And you'll learn more in a 30-minute conversation than from a week of staring at numbers. At this stage, the ONLY types of metrics that you should look at are GTM-related. They speak to your growth and traction, and make you aware of more pressing issues. Examples of impactful GTM-related metrics to track as an early-stage startup: 1. How much money is the business making?  2. Where in the funnel are people falling off?  3. What levers can you pull to grow faster?  4. Which outbound campaigns are performing well? 5. Where can we trace new top-of-funnel back to? 6. What's our growth rate? Can we accelerate it? 7. Is churn or lack of new customers stalling growth? These don't take complex analysis or lots of resources to understand, but they give you a pulse on the business and show you what's needed ASAP. So, focus on the metrics that tell you if your business is growing and talk to your customers about the rest. The last thing you should do is dive into a spreadsheet just to make yourself feel busy.

We grew to 50k users and 6x growth while tracking less than 5 metrics. Here's what we measured 👇 — Let me first tell you about a very weird moment. A CEO recently asked me about our NPS scores during a podcast interview. I had no idea. I felt embarrassed not knowing them offhand. I remember stumbling through my answer and kind of kicking myself... But later that day, I realized something important: Why do we overly obsess over so many metrics? NPS — while a decent indicator of sentiment — gives us very little to action on. And this feels true for so many metrics you hear kicked around in meetings. When you’re a startup racing to PMF or scaling to your first few million in ARR, tracking every last metric ends up becoming busy work that distracts from what actually moves a startup forward. Ultimately, here are the THREE metrics I obsess over — in an effort to cut through the noise: //1. Growth rate This shows if your core business engine is working. Track both month-over-month to spot trends early. We track revenue, user, and growth in Supademos created. //2. Burn Raw monthly revenue - cost tells you if you can keep the lights on. But it also reveals patterns in customer behavior and market response to your product decisions. I look at this daily, but make decisions on 30-day trends. //3. Retention I track both net revenue retention and logo retention. The gap between these numbers often reveals hidden problems or opportunities. For example: if revenue retention is higher than logo retention, your smaller customers might need more support and guidance. Tracking pure churn can be a false positive due to tire-kickers who never activate or churn after a month. Retention is often a proxy for activation as well, which we do look at — just not every day. Ultimately, sure — you can dive deeper into metrics like: → NPS → ARR per employee → Viral coefficient/K-factor → Adoption % for every feature But it feels like so many metrics are there for the sake of appeasing investors, rather than growing your business. Which can be poison if you’re tracking and forecasting metrics instead of talking to customers. Outside of the 3 core metrics above… our best product insights have never come from dashboards. They come from conversations with users who are willing to tell us exactly what's working and what isn't — so we can dig deep into the root of their problems. Your most important dashboard is your calendar of customer calls. // Maybe I’m wrong, though. 💬FOUNDERS: what are your non-negotiable metrics? 👇

Before you're ready to scale your startup, monitor these 7 metrics. I’ve been in tech sales since the ’90s. I’ve had startups funded by AOL during the dot-com boom. I’ve helped stagnating tech businesses turn into market leaders, and others finally scale to $100M. Whenever I’m brought in to improve a sales team’s performance, I ask for seven metrics. They are: 1. Quota attainment – The percentage of sales reps hitting their targets. – If your team isn’t meeting quota consistently, scaling will only magnify the problem. 2. Pipeline generation – The number of qualified opportunities entering the pipeline. – A weak pipeline today means weak revenue in the coming quarters. 3. Pipeline coverage – Too low? You’ll miss targets. – Too high? Your pipeline is bloated with dead deals. – The ratio of pipeline value to quota (e.g., 3x pipeline coverage for a $1M quota). 4. Closing rates at each stage of the sales funnel – The percentage of deals advancing through each step. – Identifies where deals are stalling and where the sales process needs tightening. 5. Length of sales cycle – The average time it takes to close a deal. – Shorter cycles mean more efficiency and faster revenue growth. 6. Average deal size – The revenue per closed deal. – Helps refine pricing, positioning, and sales rep expectations. 7. Customer Acquisition Cost (CAC) – The total cost of acquiring a new customer. – If CAC is too high relative to LTV, you’re scaling an unprofitable model. Tracking these metrics isn’t just about good housekeeping. It’s about identifying gaps. Most of the time, the sales process, GTM or sales team is already 90% there. One small tweak can be the difference between underperformance and exceeding quota. Keep closing. Like what you read? ♻️ Repost it to your network and follow Steve Litzow for more. Want to accelerate your sales? Join our community of CEOs & Sales Leaders subscribers today: https://lnkd.in/gN_irPiu

In the early stages of a startup, it's easy to get caught up in vanity metrics, like website traffic or social media followers, but these don't always reflect real progress. For startups aiming for growth, focus on metrics that truly matter: Customer Acquisition Cost (CAC): How much does it cost to acquire a new customer? Reducing CAC while increasing revenue is a key sign of efficiency. Lifetime Value (LTV): What’s the total revenue you can expect from a customer over their lifetime? A high LTV to CAC ratio shows long-term sustainability. Monthly Recurring Revenue (MRR): For SaaS or subscription-based models, MRR provides a clear view of consistent revenue growth. Churn Rate: Are your customers sticking around? High churn is a red flag that you need to refine your product or retention strategy. Customer Retention Rate: The flip side of churn, this metric shows how well you're keeping your customers engaged and satisfied. Growth Rate: Ultimately, how fast is your business expanding? A steady growth rate indicates that you're on the right path to scaling. These metrics give investors and founders a better sense of real performance and sustainable growth. The key? Tracking them early and adjusting course before it's too late. What metrics do you focus on in your startup? #startups #growthmetrics #businessstrategy #scaling #entrepreneurship #venturecapital #privateequity

Startups live and die by their numbers.  Use this cheat sheet to keep your finances in check and impress investors ⤵ 1. Cash Conversion Cycle (CCC) This is your operational efficiency meter. A short CCC means you're turning inventory into cash fast. It's a clear sign of smooth operations. 2. Working Capital Ratio Target 1.5-2. Anything below 1.5 risks insolvency. Anything above 2 means you're sitting on too much cash or inventory. 3. Quick Ratio (Acid Test) Keep it above 1. This shows you can cover short-term liabilities without selling inventory. It's your financial resilience test. 4. Earnings Per Share (EPS): Higher EPS is generally better, but context matters. For instance, share buybacks can inflate EPS without true profit growth. 5. Price-Earnings Ratio (P/E): Compares stock price to EPS. A high P/E could mean high growth expectations or overvaluation. Always benchmark against industry averages. Don’t let hype cloud reality. 6. Debt-to-Equity Ratio: Measures financial leverage. The goal isn’t minimizing debt. It's about smart leverage. The right ratio varies by industry and growth stage. Show investors you know how to use debt strategically. 7. Return on Equity (ROE) Higher ROE looks great, but sustainability is key. Investors will see through short-term spikes. Focus on consistent, long-term value creation. What these ratios really tell you (and investors): 1. Liquidity Ratios These are early warning systems. They signal cash flow issues before they hit your P&L. Smart investors use these to spot trouble ahead. 2. Leverage Ratios It's about balanced risk. High leverage can fuel growth or sink you. Match your strategy to your market position. 3. Profitability Ratios Forget vanity metrics. Focus on sustainable, cash-generating growth. 4. Efficiency Ratios These reveal operational strengths and weaknesses. They show investors where you can scale and where you might hit bottlenecks. 5. Valuation Ratios For startups, these bridge current performance and future potential. They help investors quantify your vision. Remember, these ratios are tools, not targets. They're the story of your business in investor language. They show not just where you are but where you're headed. Like this kind of content? 💬 Let me know in the comments what you want me to cover next. Share to reach more founders! #Startups #Finances #Finance #Success #CheatSheet

𝐒𝐭𝐚𝐫𝐭𝐮𝐩 𝐒𝐮𝐜𝐜𝐞𝐬𝐬: 𝐇𝐚𝐫𝐧𝐞𝐬𝐬 𝐭𝐡𝐞 𝐈𝐧𝐬𝐢𝐠𝐡𝐭𝐬 𝐨𝐟 𝐊𝐏𝐈𝐬 𝐄𝐚𝐫𝐥𝐲 & 𝐎𝐟𝐭𝐞𝐧 Founders may be driven by passion - but should be influenced by facts. Peter Drucker said, ❝𝑰𝒇 𝒚𝒐𝒖 𝒄𝒂𝒏'𝒕 𝒎𝒆𝒂𝒔𝒖𝒓𝒆 𝒊𝒕, 𝒚𝒐𝒖 𝒄𝒂𝒏'𝒕 𝒊𝒎𝒑𝒓𝒐𝒗𝒆 𝒊𝒕.❞ While key performance indicators (KPIs) may feel like a distant need in startups, capturing the right metrics helps: 1️⃣ navigate fast-paced market dynamics 2️⃣ encourage agility and profitability, and 3️⃣ extends cash flow Even if you initially lack sophisticated systems and software, tracking critical metrics will best verify your experiments and inform decisions. Here are some examples of valuable startup metrics: 𝘊𝘶𝘴𝘵𝘰𝘮𝘦𝘳𝘴. Strong satisfaction impacts retention, upsells, cross-sells, and referrals, leading to growth and profitability. Ideally, use AI tools to seek and track customers' sentiment across multiple platforms. Otherwise, ask customers via email, surveys, and focus groups. 𝘐𝘯𝘯𝘰𝘷𝘢𝘵𝘪𝘰𝘯. How many new products and services have you launched recently, and how are they affecting your business? If possible, measure revenue from new products or services within the last year to encourage continuous innovation and adaptation to market needs. 𝘌𝘮𝘱𝘭𝘰𝘺𝘦𝘦𝘴. Your team's engagement prompts customer satisfaction, product innovation, and process efficiency. Team costs are incredibly high, so assign tasks immediately after hiring to measure performance and ensure responsibilities align with company goals. 𝘍𝘪𝘯𝘢𝘯𝘤𝘪𝘢𝘭𝘴. Ensure you incorporate industry and business metrics into your discussions e.g. a SaaS company should capture CAC, LTV, churn, etc. Also, scrutinize revenue streams to encourage revenue diversity and pricing models to balance profitability with growth. 𝘊𝘰𝘮𝘮𝘶𝘯𝘪𝘵𝘺. Measure social media activity leading to sales. Do your best to attribute engagement to revenues. Second, track user communication in forums, webinars, and other platforms. How do they talk about your brand publicly? 💡 Virality and referrals will optimize growth with minimal cost. Experiment ways to increase referrals e.g. new messaging, incentives, and campaigns. 𝗚𝗲𝘁𝘁𝗶𝗻𝗴 𝗦𝘁𝗮𝗿𝘁𝗲𝗱 You may think your startup is too busy and bootstrapped to measure results and outcomes. However, these insights will be a necessary input to growth. Start by constantly measuring available information, asking stakeholders questions, and always challenging and testing assumptions. Feedback helps you respond to changes and identify opportunities. Objective metrics clarify how we will grow, prevent us from succumbing to biases, and keep us experimenting to be agile as markets shift. #leaders #founder #adapt #startups

(8/10) 3.0 Journey - KPIs & Unit Economics The first thing I would build is a KPI dashboard to track what numbers that I want to see every day, every hour! I focused on unit economics from day1 in my previous startups, measuring what works and what doesn’t works quickly is one of the key reasons for survival. I've learned that flashy metrics can be deceiving. Sure, user growth looks great on paper, but it's the numbers from every aspect of business that truly defines success. From day one, I've made it a point to laser-focus on the metrics that matter. How much does it cost to acquire a customer? What's their lifetime value? Are we making or losing money on each transaction? This approach isn't just about being cautious - it's about survival. By keeping a close eye on unit economics, we can: Know if you're building a business or burning cash. Unit economics gives you a clear picture of your financial health at the most basic level. Grow where it makes sense. Understanding every KPIs helps you identify which areas of your business are truly profitable and worth scaling. Make data-driven decisions, not based on hearsay. Investors are more likely to back founders who demonstrate a solid grasp of their predictable metics. Understand what it takes to be profitable at scale and what indicators supporting your business model that can show the potential to be sustainable in the long run. Make tough calls quickly. When you're tracking your numbers, you can spot trouble areas early and pivot before it's too late. Remember, in the startup world, cash is oxygen. KPI Dashboard is your oxygen meter. I think, live, breathe on my KPIs, but I'm curious: What's your non-negotiable metric for startup success? Fellow founders, share your thoughts below. These are the KPIs I give high priority to track Financials: Total Revenue New Revenue Renewal Revenue MRR ARR NRR Burn Rate Runway KPIs: Total Customers New Customers Renewal Customers Churn Renewal % Renewal Revenue % ARPU New ARPU Renewal ARPU LTV Cost of Acquisition Cost of Acquisition/Channel Product: Usage Metrics #AIFirst #Startups #KPIs #UnitEconomics #My3.0Journey #FounderLessons #FutureOfWork 

When tracking too many numbers, your team won’t know what matters, or what to do next More data isn’t the answer. Clarity is. Focus on the few metrics that actually drive growth and make them impossible to ignore. These are the 9 key areas of metrics you need to focus on to get 𝗿𝗲𝗮𝗹 𝗿𝗲𝘀𝘂𝗹𝘁𝘀. If you're a SaaS founder, I bet you've asked these questions: > How do we measure what actually moves the needle? > Which metrics lead to growth vs. vanity numbers? > What should our benchmarks or targets be? As a numbers guy, I love answering these questions. And after building my own SaaS and helping others do the same... I was able to distill BUSINESS SUCCESS down to 9 metrics 👇 1. Blended Audience Size. More reach = more opportunities. 2. Lead to Call Conversion % that turn into real conversations. 3. Sales Velocity to turn lead into revenue as quickly as possible. 4. Activation Rate. The sooner they get value, the lower the churn. 5. Customer Health Score to retain, renew, and expand customers. 6. Support CSAT over the last 30 days to keep customers satisfied. 7. NPS. Because the best form of marketing is happy customers. 8. Employee Engagement Score. Team health = business health. 9. Gross Margin. It's the actual money you keep after costs. Want a gut check? Here’s where successful bootstrapped SaaS companies ($100K–$1M ARR) stand: ↳ Monthly MRR Growth: 5–15% ↳ Net MRR Churn: <5% ↳ Gross Margin: 70–90% ↳ CAC Payback: <12 months ↳ Activation Rate: 30–50% ↳ NPS: 30+ ↳ Support CSAT: 85%+ ↳ Employee Engagement: 75%+ You can achieve this and exceed it if you... Measure what matters. Scale what works. 💯 Want a clear PDF copy to share with your team? Just hit me up and I'll send it to you. (make sure to connect first) ✌️ MV

𝐊𝐏𝐈𝐬 101 A few months ago, ChatGPT was the fastest-growing app ever, surpassing 1 million users in just 5 days. And then Threads came out and hit the same milestone in just one hour! 🤯 For context, Threads had 100 million users in its first 5 days of launch (100X more than ChatGPT). It sounds incredible, but unfortunately, these metrics don't tell the full story. 😟 As a startup founder, you want to track important KPIs and not fall into the trap of vanity metrics. > 𝐕𝐚𝐧𝐢𝐭𝐲 𝐦𝐞𝐭𝐫𝐢𝐜𝐬 𝐚𝐫𝐞 𝐦𝐞𝐭𝐫𝐢𝐜𝐬 𝐭𝐡𝐚𝐭 𝐦𝐚𝐤𝐞 𝐲𝐨𝐮 𝐥𝐨𝐨𝐤 𝐠𝐨𝐨𝐝 𝐭𝐨 𝐨𝐭𝐡𝐞𝐫𝐬 𝐛𝐮𝐭 𝐝𝐨𝐧'𝐭 𝐡𝐞𝐥𝐩 𝐲𝐨𝐮 𝐮𝐧𝐝𝐞𝐫𝐬𝐭𝐚𝐧𝐝 𝐲𝐨𝐮𝐫 𝐨𝐰𝐧 𝐩𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐢𝐧 𝐚 𝐰𝐚𝐲 𝐭𝐡𝐚𝐭 𝐢𝐧𝐟𝐨𝐫𝐦𝐬 𝐟𝐮𝐭𝐮𝐫𝐞 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐞𝐬. For example, Threads' active users are down from an all-time high of about 75%. Ouch! 🤕 📊 Here's a list of 10 KPIs you must start tracking to help you better understand how your business is performing. 1/ Monthly Recurring Revenue (MRR) How much money are you making each month? 2/ Annualized Run Rate (ARR) What's your annual revenue estimate? 3/ Gross Margin Is your business making more money than it's spending? 4/ Monthly Active Users (MAU) How many people are using your product each month? 5/ Customer churn Are you losing more customers than you gain? 6/ Customer Lifetime Value (LTV) What's the long-term value of a customer? 7/ Customer Acquisition Cost (CAC) How much does it cost to get a new customer? 8/ Product Usage Metrics Depending on your product, track specific usage metrics such as feature adoption rates, task completion times, or content engagement (for content-based startups). 9/ Customer Feedback & Net Promoter Score (NPS) Are your customers happy enough to recommend you? 10/ Runway The runway measures the time that a startup has before they run out of finances. Success isn't just about huge numbers; it's about understanding these KPIs and how they connect. It's like building a puzzle - you need all the right pieces in place. What KPIs do you find most valuable in your startup journey? 🤔 ----------- 📬 If you like to read more stories like these, every Friday, I post my favorite ones at Algorithms pay my bills (https://buff.ly/3L1PLrD)