Metrics

Stickiness is the metric that measures the number of people that are highly engaged with a product. Highly engaged users are the ones that return time and time again to the platform.

Customer Acquisition Cost is the metric that measures the amount of money a company spends in order to bring in new customers. Keeping track of the CAC will give the founder a good view of the short and long-term profitability of the company, which is something that plays a key role in the decision-making process of an investor. This metric viewed in relation to LTV (Customer Lifetime Value) gives investors insights into what the return on investment looks like.

Monthly Recurring Revenue (also known as MRR) is the amount of recurring revenue subscription based businesses are making each month. Keeping an eye on the MRR helps founders forecast the company’s growth, model financial projections and understand present performance. It’s also a key metric that investors like to look at. Here is how to calculate it properly and benchmark it against similar companies.

Burn rate is one of the most critical metrics that any early-stage startup should be tracking. It shows the amount of cash leaving your company’s bank account each month.

Learn who should track what in your startup: vanity metrics, decision metrics, performance metrics, coincident metrics.

While the giants of the business world (Amazon, Walmart, Alibaba) are dominating the space, there is still room for a lot of growth when looking at the fact that 1.8 billion people have made purchases online in 2018—a number that is expected to grow to 2.14 billion in 2021.

More and more companies are integrating SaaS tools to help with their processes, which means a lot of growth is forecasted for these types of startups. But knowing how to evaluate the health of a company means looking at the relevant metrics. Here is a list of essential metrics to keep track of when dealing with SaaS startups.

Some of the biggest players in the game, the unicorns that made it on every startups’ “when I grow up” list, are companies that have achieved success by creating platforms which ease transactions between two different sides. Amazon, Airbnb, eBay, Craigslist and Uber are a few examples of marketplaces that became giants in the industry. In Asia, marketplaces are some of the fastest-growing startups.