Intermediate metrics
Activation Rate
The % of new users who reach your product's core value moment within a defined window. The most predictive early-stage metric for long-term retention.
#metrics
37 results
Glossary
Beginner metrics
ARR - Annual Recurring Revenue
ARR is the annualized value of all active subscriptions. It is the primary top-line metric for SaaS companies and a key signal for fundraising readiness.
Beginner finance
Burn Rate
Burn rate is the monthly rate at which a startup spends cash. It determines how much runway remains before the company must raise more money or turn profitable.
Intermediate metrics
CAC - Customer Acquisition Cost
CAC is the total cost to acquire a new customer, including all sales and marketing spend. A core unit economics metric for evaluating business viability.
Beginner metrics
Churn Rate
Churn rate is the percentage of customers or revenue a business loses over a given period. The most important retention metric for any subscription business.
Intermediate metrics
Cohort Analysis
A method of grouping users by a shared trait—typically signup date—and tracking their behavior over time to reveal retention trends.
Intermediate strategy
Default Alive
A startup is default alive if its revenue growth will reach profitability before cash runs out. Coined by Paul Graham in 2015.
Intermediate finance
EBITDA
EBITDA measures a company's operating profitability before interest, taxes, depreciation, and amortization - a proxy for core business cash generation.
Intermediate metrics
Expansion MRR
Expansion MRR is additional monthly recurring revenue from existing customers via upgrades or seat additions - the engine behind net negative churn in SaaS.
Beginner finance
Gross Margin
Revenue minus Cost of Goods Sold, divided by revenue. The foundational profitability metric that drives SaaS valuation multiples and unit economics.
Beginner growth
Hockey Stick Growth
The growth curve every investor wants to see - flat for a long time, then a sudden exponential rise that resembles a hockey stick.
Intermediate finance
J-Curve
The pattern of initial losses or decline before growth - common in VC fund returns, startup unit economics, and post-investment metrics.
Beginner metrics
KPI
Key Performance Indicator - a measurable value that shows how effectively a company is achieving its key business objectives.
Intermediate growth
LTV:CAC Ratio
The LTV:CAC ratio measures how much lifetime value you earn per dollar spent acquiring a customer. A 3:1 ratio is the SaaS benchmark.
Intermediate metrics
LTV - Lifetime Value
LTV is the total revenue a business expects from a customer over their lifetime. The key metric for justifying acquisition spend and evaluating unit economics.
Beginner metrics
MRR - Monthly Recurring Revenue
MRR is the total recurring subscription revenue a SaaS company earns each month. It is the operational heartbeat metric for tracking short-term growth.
Intermediate metrics
North Star Metric
The North Star Metric is the single number that best captures the core value a product delivers to customers and predicts long-term sustainable growth.
Intermediate metrics
NRR - Net Revenue Retention
NRR measures how much recurring revenue is retained and grown from existing customers. Above 100% means the company grows revenue without any new customers.
Intermediate finance
Payback Period
Months to recover the cost of acquiring a customer from that customer's gross profit contribution. Best-in-class SaaS is under 12 months.
Intermediate metrics
Rule of 40
Growth rate % plus EBITDA margin % must equal or exceed 40. The single metric VCs use to balance SaaS growth against profitability efficiency.
Beginner finance
Runway
Runway is how many months a startup can operate before running out of cash. It defines the time to reach the next milestone or close the next funding round.
Beginner growth
Traction
Traction is quantifiable evidence that a startup is gaining real customers and momentum - the key signal investors use to gauge product-market fit.
Intermediate finance
Unit Economics
The direct revenues and costs associated with a single unit of a business, used to determine per-unit profitability and scalability.
Intermediate growth
Viral Coefficient
Also called K-factor: the average number of new users each existing user generates. K above 1 means exponential viral growth; below 1 is partial amplification.
Beginner finance
Working Capital
Working capital = current assets minus current liabilities. It measures a company's short-term liquidity and ability to fund day-to-day operations.
Guides
Beginner finance
9 min How to Read Your Startup's P&L
A founder's guide to understanding the profit and loss statement - what each line means, how to interpret it, and what to fix.
Intermediate growth
13 min How to Run Growth Experiments at Your Startup
Learn how to design, prioritize, and run growth experiments at your startup using the ICE framework, experiment logs, and disciplined test design.
Intermediate operations
10 min How to Set Company OKRs That Actually Work
A practical guide to writing and running OKRs in your startup - from setting the right objectives to weekly check-ins, mid-quarter reviews, and retros.
Beginner product
12 min How to Set Up Analytics for Your Startup
Set up a three-layer analytics stack for your startup - product, revenue, and marketing analytics - and avoid the data traps that waste founder time.
Concepts
Intermediate ai
AI Product-Market Fit
How product-market fit signals differ for AI products - and why the awe of early demos often masks the absence of real retention.
Intermediate methodology
Innovation Accounting
Eric Ries' framework for measuring startup progress using leading indicators when traditional revenue metrics are too early to be meaningful.
Beginner operations
OKRs - Objectives and Key Results
OKRs (Objectives and Key Results) are a goal-setting framework that aligns teams around ambitious, measurable outcomes on a quarterly or annual cycle.
Beginner framework
Pirate Metrics (AARRR Framework)
The AARRR framework breaks startup growth into five measurable stages: Acquisition, Activation, Retention, Revenue, and Referral.
Articles
Intermediate ai
10 min AI Startup Metrics
The key metrics founders should track for AI products - from AI-specific signals to standard SaaS metrics adapted for AI economics.
Beginner finance
7 min Revenue, Profit, and Cash Flow Explained
Most founders confuse revenue, profit, and cash flow. Here is what each means, why they differ, and why getting this wrong can kill your startup.
Intermediate metrics
14 min The 10 SaaS Metrics Every Founder Should Track
Most founders track vanity metrics. Here are the 10 SaaS metrics that actually predict growth, retention, and unit economics - with benchmarks.
Intermediate metrics
10 min Startup KPIs by Stage
The metrics that matter change as your startup grows. The KPI framework founders should use from pre-seed to Series B, with real benchmarks at each stage.