The metrics that matter change as your startup evolves. Focusing on the wrong metrics for your stage can mislead your team and waste precious resources. Here’s what to track when.

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Pre-product market fit

Primary KPI: Weekly Active Users (WAU) or key engagement metric

At this stage, you’re still figuring out what customers actually want. Revenue metrics can be misleading because you might be getting paid for something customers don’t really love.

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What to track

Product engagement:

  • Weekly/Daily Active Users
  • Session duration and frequency
  • Feature adoption rates
  • User journey completion rates

Learning velocity:

  • Customer interviews completed per week
  • Feature release cycle time
  • A/B test completion rate
  • User feedback response rate

Early signals:

  • Net Promoter Score (NPS)
  • Customer effort score
  • Product-market fit survey results
  • Organic word-of-mouth referrals

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What NOT to track yet

  • Monthly Recurring Revenue (focus on product, not price)
  • Customer Acquisition Cost (you’re not scaling acquisition yet)
  • Churn rate (sample size too small to be meaningful)
  • Lifetime Value (customers haven’t been around long enough)

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Key actions

  • Interview customers weekly
  • Ship new features bi-weekly
  • Measure and improve core user actions
  • Look for early signs of product love, not just usage

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Early product market fit

Primary KPI: Monthly Recurring Revenue (MRR)

You’ve found something customers want and are willing to pay for. Now it’s time to prove you can grow it sustainably.

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What to track

Revenue growth:

  • Monthly Recurring Revenue (MRR)
  • MRR growth rate (month-over-month)
  • Average Revenue Per User (ARPU)
  • Expansion vs new customer revenue

Unit economics:

  • Customer Acquisition Cost (CAC)
  • Customer Lifetime Value (LTV)
  • LTV:CAC ratio
  • CAC payback period

Product health:

  • Monthly churn rate
  • Weekly Active Users among paying customers
  • Feature adoption among key segments

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Key benchmarks

  • MRR growth: 15-20% month-over-month for early stage
  • LTV:CAC ratio: At least 3:1, ideally 5:1+
  • CAC payback: Under 18 months
  • Churn rate: Under 5% monthly for B2B SaaS

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Key actions

  • Optimize your sales and onboarding process
  • Double down on acquisition channels that work
  • Reduce churn through better customer success
  • Start measuring cohort-based retention

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Scaling growth

Primary KPI: Still MRR, but with focus on efficiency

You’ve proven the model works. Now you need to scale it efficiently while maintaining quality.

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What to track

Growth efficiency:

  • MRR growth rate
  • Net Revenue Retention (NRR)
  • Customer Acquisition Cost by channel
  • Sales efficiency metrics

Operational metrics:

  • Gross margin
  • Burn multiple (dollars burned per net new ARR)
  • Employee productivity metrics
  • Customer support ticket volume

Market expansion:

  • Market share in core segments
  • New market penetration rates
  • Product-led growth metrics
  • Viral coefficient

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Key benchmarks

  • Net Revenue Retention: 110%+ (great is 120%+)
  • Gross margin: 80%+ for SaaS
  • Burn multiple: Under 2x (world-class is under 1x)
  • CAC payback: Under 12 months

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Key actions

  • Optimize unit economics across all channels
  • Build scalable customer success processes
  • Expand into adjacent markets or segments
  • Invest in product-led growth capabilities

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Late stage / Pre-IPO

Primary KPI: Annual Recurring Revenue (ARR) and Rule of 40

You’re now a substantial business focused on profitable growth and market leadership.

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What to track

Financial efficiency:

  • Annual Recurring Revenue (ARR)
  • Rule of 40 (growth rate + profit margin)
  • Free cash flow margin
  • Magic Number (sales efficiency)

Market position:

  • Market share
  • Net Promoter Score
  • Brand awareness metrics
  • Competitive win rates

Operational excellence:

  • Employee Net Promoter Score (eNPS)
  • Revenue per employee
  • Customer satisfaction scores
  • System uptime and performance

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Key benchmarks

  • Rule of 40: 40%+ (growth rate + profit margin)
  • Free cash flow margin: 20%+
  • Net Revenue Retention: 120%+
  • Gross margin: 85%+

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Key actions

  • Focus on profitable growth over pure growth
  • Build category-defining product capabilities
  • Expand internationally
  • Prepare for potential exit or IPO

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Choosing your stage

Not sure which stage you’re in? Here are some guideposts:

  • Pre-PMF: Under $100K ARR, still iterating on core product
  • Early PMF: 100K−100K - 1M ARR, proven model but small scale
  • Scaling: 1M−1M - 10M ARR, focused on efficient growth
  • Late stage: $10M+ ARR, market leader in your category

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Transitioning between stages

The biggest mistake is switching your primary KPI too early or too late:

  • Too early: You start optimizing for revenue before you have product-market fit
  • Too late: You keep focusing on engagement when you should be driving revenue

Signs it’s time to switch your primary KPI:

  • Consistent organic referrals and word-of-mouth
  • Customers actively using your product multiple times per week
  • You can predict customer behavior and lifetime value
  • You have repeatable sales and marketing processes

Remember: these stages aren’t just about revenue size—they’re about the maturity of your business model and market understanding.

Next steps

Once you know your stage, dive into the specific metrics that matter most: product metrics, revenue metrics, or unit economics.