Metrics by Stage of Startup
Startups move through stages from pre-seed to seed to growth to scale.
The metrics you apply should adjust to the stage of the company.
Here’s a list of metrics by stage:
Pre-seed – when you have an idea, use qualitative metrics and focus on basic activity.
Key metrics include qualitative feedback, website traffic, and conversions.
Seed – when you have a first product, focus on initial revenue.
Key metrics include MRR (monthly recurring revenue), ARR (annual recurring revenue), as well as CAC (customer acquisition cost), and LTV (lifetime value ratio).
Cash flow and burn rate are also useful.
Growth – when you have product-market fit and start to grow, then focus on growth revenue.
Key metrics include gross margin, segment analysis, forecast sales vs. quota, and month-over-month revenue growth.
Scale – when you start scaling the business, focus on the core drivers of the business.
Key metrics include customer activation by channel or segment, increasing retention, and reducing churn.
The metrics start qualitative and shift to quantitative to focus the company on what drives growth.
As the company matures, so the metrics become more specific and refined.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.