Top Metrics Tech Entrepreneurs Must Track for Smarter Growth
Essential Metrics Every Tech Founder Must Track to Scale
In the dynamic ecosystem of tech startups, a founder's success is often not only dictated by their innovation or market timing, but also by their ability to interpret and react to data. Metrics serve as the pulse of a startup. They guide you on whether your product is gaining traction, if your marketing is resonating, and if you're trending toward profitability or running low on fuel.
This article discusses the critical business metrics a tech founder should keep a close distance on. Whether you're crafting a SaaS product, a Web3 offering, or a mobile application, knowing these metrics will empower you to make informed decisions, bypass common obstacles, and stand out to investors.
1. Monthly Recurring Revenue (MRR)
MRR is the lifeblood of many tech startups, particularly SaaS companies and any other subscription-model businesses. It tracks the revenue your company can expect every month from paying customers. Tracking MRR carefully allows founders to:
- Understand their business's growth trajectory
- Gauge runway and cash on hand
- Assess whether customer acquisition strategies are working
There are three segments of MRR worth looking at:
- New MRR: Revenue generated from customers acquired within the month.
- Expansion MRR: Revenues from upsells or product add-ons purchased by customers.
- Churned MRR: Revenue lost from customers who have canceled or downgraded plans.
Paying attention to these three sub-categories leads to a deeper understanding of customer loyalty as well as the health of growth.
2. Customer Churn Rate
Customer churn rate shows you the percentage of customers who churn or stop paying in a given time frame. A high customer churn rate signals dissatisfaction with your product, } pricing trouble, unresponsive support, or something else. You can find your churn rate using this simple formula:
Customer Churn Rate = (Number of customers lost in the timeframe / Total number of customers at start of the time frame) x 100%Even a slight reduction in churn can have massive long-term benefits. Interested in seeing how user behavior and support efficiency will be impacted by AI? Read our related article on AI agents replacing support staff within the next five years.
3. Customer Acquisition Cost (CAC)
Customer acquisition cost is how much it costs you to acquire a customer. Knowing how much it costs you to earn a new customer lets you understand how efficient your sales and marketing efforts are. CAC includes everything from advertising costs to salaries, platforms, and time.
While lower CAC is better to strive for, you should only look at it in the context of revenue and lifetime value to understand it.
Customer Acquisition Cost = (Total costs of Sales and Marketing) / (Total # of new customers)Only effective when combined with lifetime value Most Vaughan’s CAC becomes useful when you can compare it with LTV (customer lifetime value). Generally, investors want to see that your LTV:CAC ratio is at least 3:1. This means your customers are worth three times more than they cost you to acquire.
4. Burn Rate
Burn rate measures how quickly you're spending capital. With startups, especially pre-revenue ones, constantly crunching numbers to cover their spending, burn rates should always be tracked closely. Knowing your burn rate can help you forecast either fundraising needs or customer revenue. It also helps you understand company operations better and whether or not it's sustainable. You should also pay attention to your runway, or the period before you must secure funding. You should check it monthly alongside your burn rate. Planning a new hire? You should know how long you can afford to pay that new employee as well.
In Part 2, we'll explore more advanced metrics including LTV, NPS, DAU/MAU, and growth efficiency. We'll also consider how different these metrics appear for B2B vs. B2C startups, and how smart founders approach them. Stay tuned!
Deeper Insights with Advanced Metrics for Strategic Growth
After you've grasped the fundamentals of metrics, it's time to explore more profoundly. These advanced metrics enable you to fine-tune growth strategies and discover unnoticeable inefficiencies before they become major issues.
1. Net Promoter Score (NPS)
The Net Promoter Score enables you to gauge customer satisfaction and loyalty. You can do this by asking just one question: "How likely are you to recommend our product to a friend or colleague?" Depending on how the interviewee answers, they can be classified into three categories: promoters (9–10), passives (7–8), and detractors (0–6).
- High NPS: Indicates good word-of-mouth potential and happy users.
- Low NPS: Suggests issues with the customer experience or unmet expectations.
2. LTV:CAC Ratio
The Customer Lifespan Value (LTV) to Customer Acquisition Cost (CAC) ratio illustrates how well you are acquiring high-value customers. The figure you're aiming for is somewhere around 3:1.
Tip: If the ratio is too high, you're likely under-investing in growth. If it's below 1, you're losing money per customer.
3. Retention Rate vs. Churn by Cohort
Rather than looking at churn as a global monthly figure, break it down by cohort — for instance, by VOAS month or acquisition channel. It allows you to learn which users are more valuable and helps in optimizing target audiences as well as onboarding efforts.
Example:
Users acquired through Google Ads in January 2025 will likely have a 40% higher retention rate over three months than those who were acquired through Twitter.
4. Revenue by Segment
Understanding which customer segments earn the most money helps you focus on the highest-impact opportunities. You may use dimensions like:
- Company size (SMB vs. enterprise)
- Industry (Fintech, SaaS, ecommerce)
- Plan tier (free, basic, premium).
5. Monthly Active Users (MAU) vs. Daily Active Users (DAU)
These two metrics combined tell a story. A healthy DAU/MAU ratio (around 20% +) indicates that your product is an integral part of users' lives — particularly relevant for SaaS or mobile.
Note: A low DAU/MAU ratio may suggest a lack of engagement or a feature set that doesn't require frequent use — which isn't necessarily bad but should be intentional.
6. Revenue Per Employee
This metric is particularly significant for tech entrepreneurs running lean startups. It’s a measure of productivity and operational efficiency. A growing revenue-per-employee trend generally indicates you're scaling well.
7. Feature Adoption Rate
Keep track of how often your new or existing features are used. It helps with determining the ROI on dev efforts as well as guiding product development.
8. Support Tickets Per User
One often-overlooked indicator of UX problems occurring is if the number of tickets per user rises after a new release. It signals broken flows, a confusing UX, or a bad build.
📌 Related: How To Stay Motivated Working From Home As A Freelancer
Metrics such as productivity and stress levels help you stay efficient, even without an office.
Operational KPIs for Long-Term Success
When the growth curve of your company is in the right direction, operational efficiency counts just as much as growth itself. Here are the metrics to ensure your startup doesn’t just fly up — but also remains up.
1. Burn rate Runway
Your burn rate is how fast you’re literally burning cash, i.e., how much you’re spending each month. Runway tells you how many months you have left to live at that burn rate.
Runway = Cash in bank ÷ Monthly burn rate
- 🔺 High burn, short runway: A sign to raise funds or cut costs.
- ✅ Low burn, long runway: Allows for experimentation, a re-fresh, and growth — sustainably.
2. Gross Margin
This is the profitability of your main product before you add operating overhead expenses. Important for your pricing strategy and whether your business model works.
Target: A 70%+ gross margin is considered good for most SaaS companies.
3. Engineering Velocity
What’s the velocity of shipping new features, fixing bugs, and responding to changes? Track dev productivity using:
- Deploy frequency
- Lead time of changes
- Bugs introduced vs. bugs resolved
4. Customer Support Response Time
In technology, user experience is not just the UI — it’s how well and promptly you solve issues. If your customer support is delayed, so are your customers.
5. Technical Debt Index
Many startups fail to track this until it becomes a gospel. Use internal tools or code quality audits to estimate how much rework will be needed due to rushed dev.
6. Infrastructure & Downtime Metrics
When your user base is growing, infrastructure stability becomes crucial. Use tools like UptimeRobot, Datadog, or Grafana to track:
- Server uptime
- API calls response time
- Error rates per endpoint
7. Employee Net Promoter Score (eNPS)
Your company culture should reflect on everything — productivity, retention, and brand image. eNPS is a fast and easy way toward internal morale.
How to Make the Most Out Of These Metrics
- ✅ Don’t track everything — just what really moves the needle for your stage of growth.
- 📊 Visualize metrics with a dashboard such as Databox, Looker, or Tableau.
- 🧠 Review regularly — but don’t hesitate to make a change. Data matters, but action matters more.
🔗 Also read: Hosting vs. VPS: Key Differences Explained
Learn how to choose the right infrastructure as your startup grows and scales.
📈" And "Drive Sustainable Growth."
But merely spotting the right measures is just the first step. It is how tech entrepreneurs utilize this intelligence to generate sustainable growth that holds the real significance.
📊 KPIs to Inform Decision Making
Once you have determined your KPIs, they should direct decision-making. For instance, if your customer acquisition cost (CAC) is growing and your lifetime value (LTV) is flat, you should start optimizing your acquisition efforts.
🔄 Automate Your Measures
Manual data entry is not a scalable solution. Automate it by using tools such as:
- Mixpanel or Amplitude for product analytics.
- Baremetrics or ChartMogul for SaaS and finance-related measures.
- Google Looker Studio for custom dashboards.
These tools can help with consistency and free up much of your time, so you can spend it on strategizing instead of data entry.
📈 From Intelligence to Action: The Feedback Cycle
The best-performing founders apply a circular approach:
- Collect relevant information.
- Recognize trends and issues.
- Act on them in a targeted way.
- Measure the results.
- Do it again.
For example, if your user churn rate rises, look at the behavior flows or ask your users directly what the problem is. Fix that issue, and your retention will improve—a full cycle in action.
🚫 Khabeer 'Vanity' Measures
Don’t let numbers that shine too bright lead you astray. The figures like social media followers or pageviews are glamorous but rarely drive revenue.
🎯 Only Track What Matters
Only pay attention to figures that are connected to your startup’s growth, engagement, and profitability.
Smart founders know where to stop—nothing, not even vanity metrics. If the numbers don’t lead to a decision, they’re not worth considering.
