Top KPIs for Startups

You know that sinking feeling when an investor asks about your metrics and you start rattling off user signups and page views? Yeah, been there. Most startups track dozens of metrics but can't answer the simple question: are we actually building something sustainable?

Here's the thing - the KPIs that matter aren't the ones that look good in pitch decks. They're the unglamorous numbers that tell you whether you'll still be in business next year. Let's talk about which metrics actually deserve your attention and how to track them without drowning in dashboards.

The importance of selecting the right KPIs for startup growth

Look, everyone tells you to track KPIs, but most advice is generic nonsense about "aligning with your goals." Let's get practical. The right KPIs are the ones that make you uncomfortable - they expose what's broken and force hard conversations.

Start with metrics that directly impact your runway. If you're burning $50k a month with 6 months of cash left, vanity metrics won't save you. The folks at Gilion put it well: avoid metrics that make you feel good but don't drive decisions. You need numbers that answer three questions: Are customers sticking around? Can we afford to grow? And are we getting better at what we do?

Here's what I've learned: pick 3-5 core metrics and obsess over them. Everything else is noise. For most startups, that means tracking:

• How much it costs to get a customer (CAC)

• How much that customer is worth (LTV)

• How fast you're losing customers (churn)

• Your monthly recurring revenue (MRR)

The best part? When you focus on fewer metrics, your team actually remembers what they're optimizing for. As discussed on Reddit's startup community, teams that track everything often improve nothing.

One last thing - your KPIs will change, and that's fine. Marshall Hargrave noted on LinkedIn that what matters in year one (proving people want your product) is different from year three (proving you can scale profitably). Review your metrics quarterly and don't be afraid to swap them out.

Essential financial KPIs to ensure scalability and profitability

Let's talk money - because if you run out, nothing else matters. The LTV:CAC ratio is your north star for unit economics. Multiple sources suggest aiming for 3:1, but here's the reality: anything above 1:1 means you're not actively lighting money on fire, which is a win in the early days.

Calculate your CAC by dividing total sales and marketing spend by new customers acquired. Simple, right? Wrong. Most startups forget to include salaries, tools, and that expensive conference you attended. Be honest about the full cost. For LTV, multiply your average revenue per customer by their average lifespan. If you're too early for accurate lifetime data, use 12-24 months as a proxy.

Your burn rate tells you how fast you're dying. Treasury management experts at Amnis recommend calculating both gross burn (total monthly spend) and net burn (spend minus revenue). Here's a sobering exercise: divide your bank balance by monthly burn rate. That number? That's how many months until you're dead. Most startups need 18-24 months of runway to raise their next round comfortably.

For recurring revenue businesses, MRR and ARR are your growth scorecard. But don't just track the total - break it down:

• New MRR (from new customers)

• Expansion MRR (from upsells)

• Churned MRR (from cancellations)

• Net MRR growth

This breakdown tells you whether you're growing through acquisition or retention. Hint: retention is cheaper and more sustainable.

Key user engagement metrics for sustainable growth

Financial metrics keep you alive, but engagement metrics tell you if you're building something people actually want. Churn rate is the brutal truth about your product. Industry benchmarks vary wildly, but for B2B SaaS, anything above 10% monthly churn means you're filling a leaky bucket.

Calculate churn simply: customers lost divided by total customers at the start of the period. But here's where it gets interesting - segment your churn. Are you losing customers after 30 days? 90 days? Different churn patterns require different fixes. Early churn usually means onboarding problems. Late churn means your product isn't delivering ongoing value.

Net Promoter Score (NPS) gets a bad rap, but it's useful if you actually act on it. The team at Amnis Treasury found that the real value isn't the score itself - it's the follow-up conversations. When someone gives you a 6, call them. Ask why. Their answer is worth more than a thousand survey responses.

For product teams, MAU and DAU tell you if people actually use what you build. Statsig's analysis shows that the DAU/MAU ratio (called stickiness) predicts retention better than raw usage numbers. A ratio above 50% means people use your product most days they're active - that's habit territory. Below 20%? You're a sometimes tool, which makes you replaceable.

Building an effective KPI dashboard for actionable insights

Here's an uncomfortable truth: most dashboards are where good intentions go to die. You spend weeks building the perfect visualization, then nobody looks at it after the first month. The design experts at Statsig recommend starting with one simple question: what decision will this dashboard help someone make?

The best dashboards follow three rules:

1. One metric per chart - if you need a legend, you've already lost

2. Context over precision - show trends and comparisons, not decimal places

3. Actions over observations - every metric should suggest what to do next

Skip the fancy visualizations. A simple line chart showing MRR growth with annotations for major events (product launches, price changes) tells a better story than any 3D pie chart. Startup operators on Reddit consistently praise boring dashboards that load fast and answer questions quickly.

Make your dashboard a living document. Set up automated alerts when metrics move outside normal ranges. If CAC suddenly spikes 50%, you want to know immediately, not at the quarterly review. Tools like Statsig let you set up these guardrails and run experiments to see what actually moves your metrics.

Interactive elements sound cool but use them sparingly. The ability to filter by customer segment or time period? Essential. Seventeen different ways to slice the same data? You're building a toy, not a tool. Your dashboard should tell a story, not require a PhD to interpret.

Closing thoughts

Building a startup is hard enough without flying blind. The KPIs you choose - and more importantly, the ones you ignore - shape every decision you make. Start simple with the fundamentals: make sure you're not spending more to acquire customers than they're worth, keep them around once you have them, and don't run out of money in the process.

The best metrics framework is the one you'll actually use. Pick a handful of numbers that keep you up at night, track them religiously, and act on what they tell you. Everything else is just expensive decoration.

Want to dig deeper? Check out Lenny's Newsletter on prioritizing metrics, browse the SaaS subreddit's KPI discussions, or explore how platforms like Statsig can help you run experiments to improve your metrics instead of just watching them.

Hope this helps you focus on what actually matters. Now stop reading about KPIs and go improve one!