MRR. CAC. CLTV. There are a lot of acronyms and buzzwords about how to measure startup success these days, especially for SaaS companies. The reality is that there are many ways to track the health of your tech business, and there are various points of view on which indicators are the most meaningful and why. We wrote a series of blog posts to break down the basics, and we’ve combined them into a single guide.
In The 8 SaaS Metrics that Matter, we take a close look at the most common metrics used in the SaaS industry. Using simple examples, we show how to calculate each metric and provide some background on why these key indicators are so important to investors.
Use this guide to:
Show investors your business has solid traction
Find out how to calculate key metrics
Demonstrate revenue potential
Measure product market fit
Understand how investors & lenders view each metric
Successful tech startups use key SaaS metrics to guide their business decisions. Levi Morehouse, CEO and Founder of Ceterus, says his company uses Monthly Recurring Revenue (MRR) as their main performance indicator. The focus on MRR allows the company to “develop valuable recurring solutions, sell these to the right prospects, and deliver value to customers.”
Morehouse attributes much of his company’s recent growth and success to prioritizing recurring opportunities over non-recurring opportunities, which means frequently rejecting profitable leads that would make them grow quickly in the short run, but would not grow MRR.
This is just one example of how Saas startups are using metrics to make smart, data-based decisions. Take a look at the guide and let us know what you think.