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Money, pricing & model

What metrics should I actually track as an early-stage SaaS founder?

Early on, obsess over MRR growth, churn, gross margin, and CAC payback, ignore vanity metrics like downloads and pageviews. Net revenue retention tells you if the business compounds without adding new customers. Track a short list religiously in a weekly review rather than a giant dashboard nobody reads.

Go deeper

3 resources, 2 link-checked.

📄 Article
✓ Link checked Free Intermediate

The reference primer on the metrics and market-sizing logic investors use, including bottom-up market sizing that keeps founders honest about how big a market really is. Canonical a16z source.

16 Startup Metrics

From a16z by Andreessen Horowitz (a16z) ~15 min read

  • Size markets bottom-up from customer count and willingness to pay
  • Know the metrics that actually signal a healthy business
  • Distinguish real traction from vanity metrics
  • Use consistent definitions when comparing yourself to the market
Open a16z.com →
📄 Article
✓ Link checked Free Advanced

David Skok's For Entrepreneurs work is the foundational, near-universally cited source on SaaS unit economics and modeling. It's where the LTV:CAC and CAC-payback conventions were popularized.

SaaS Metrics 2.0, Detailed Definitions

From forentrepreneurs.com by David Skok long-form reference

  • Unit economics (LTV:CAC and months to recover CAC) reveal long-term profitability
  • Simple LTV formulas break when revenue expands over a customer's lifetime
  • Build financial models from real drivers, not top-down market-share guesses
Open forentrepreneurs.com →
📄 Article
Free Advanced

David Sacks (PayPal, Yammer, Craft Ventures) distills the metrics that actually predict a SaaS company's health, including the burn multiple he popularized. Sharp, operator-grade, and opinionated.

The SaaS Metrics That Matter

From sacks.substack.com by David Sacks essay

  • Net revenue retention and the burn multiple reveal true capital efficiency
  • Focus on a small set of metrics reviewed on a strict weekly cadence
  • Growth and profitability must be balanced (the Rule of 40)
Open sacks.substack.com →

Terms in this answer

Customer Acquisition Cost Net Revenue Retention Gross Margin Retention Churn

People also ask

What are unit economics and why do they matter? 3 → How do I calculate CAC (customer acquisition cost) and LTV? 3 → What is a good LTV to CAC ratio? 3 → How do I build a simple financial model or revenue projection? 3 → What is churn and how much churn is too much? 2 → My CAC looks great but I paid for it with a founder-led discount. How do I know my unit economics without the promo? 2 →

Also in D2C

The same ground, over in Money, pricing & unit economics, our D2C track.

I'm not a finance person, what books/records do I actually need to keep from day one? 3 → What is cohort analysis, and why does it matter more than a single repeat-rate number? 3 →

Also in How Founders Use AI

How founders actually use AI for this, over in Finance & Accounting.

How do founders use AI for bookkeeping, invoicing, runway and burn analysis? 4 → Why build financial models with AI instead of from a blank spreadsheet? 4 →

Also in GTM

The same ground, over in Close deals and price right, our GTM track.

I have a call booked with a real prospect tomorrow. What do I do on it? 4 → I have no idea what to charge. How do I pick a first price? 4 →

Also in Wealth

The same ground, over in Founder money foundations, our Wealth track.

How much should I pay myself as a founder? 2 → How big should my emergency fund be when my income is lumpy? 3 →
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