Startup Metrics

MRR is predictable subscription revenue normalized to a monthly amount, commonly used by SaaS businesses to track growth.

Churn is the rate at which customers or revenue are lost during a period; high churn can erase growth even when acquisition is strong.

CAC is the average cost of acquiring a new customer, including sales and marketing spend divided by new customers gained.

LTV estimates the total gross profit a customer will generate over the relationship with the business.

Payback period measures how long it takes to recover the cost of acquiring a customer from that customer's gross profit.

Activation rate is the percentage of new users who complete a key action that indicates they have experienced initial value.

NRR measures revenue retained from existing customers after expansion, contraction, and churn; above 100% means accounts are growing overall.

Runway is how long a company can operate before running out of cash at its current burn rate.

A vanity metric looks impressive but does not clearly connect to business health or decision-making.

A PQL is a user whose product behavior shows strong purchase intent, such as reaching usage limits or inviting teammates.

An activation metric measures whether new users experience the product's first meaningful value.

It predicts later retention better than simple signup counts.