Top 10 KPIs every Startup Founder and CEO must track
The KPIs make or break the startup funding. It helps companies to make data-driven decisions, optimize financial performance, and achieve strategic goals.
What are KPIs?
The Key Performance Indicators (KPIs) are quantifiable metrics used to set goals, monitor their achievement, and identify areas for improvement towards a specific business objective.
Why do startup founders need to measure KPIs?
Being a Startup Founder, you want to accelerate your business growth. So, you need data at your fingertips to help you make informed decisions.
You may want to make strategic decisions that evolve your growth strategy and drive more revenue. Hence, you must track and analyze KPIs for your Startup.
Top 10 KPIs that every Startup Founder and CEO must track
Customer acquisition cost (CAC) – how much it costs to acquire a new customer. In Formula terms, CAC = Total Acquisition Cost/ Number of customers acquired
Average revenue per user (ARPU) – how much revenue gets generated from each active paying user. In Formula terms, ARPU = Monthly Recurring Revenue (MRR)/ Number of Monthly active customers
Customer lifetime value (CLV) – how much money a customer will spend on your products or services during their lifetime. In Formula terms, CLV = ARPU * Customer Average Lifespan
Churn rate (CR) – the rate at which the users stop using the company's product. In Formula terms, CR = Number of users lost in a month/ Number of users at the month beginning
Monthly active users (MAU) – the monthly average number of active users using your product. In Formula terms, MAU = Simple average of monthly active users
Monthly recurring revenue (MRR) – how much revenue a company generates every month. In Formula terms, MRR = ARPU * MAU
Revenue Growth Rate (RGR) – the rate at which the revenue grows over a particular period. In Formula terms, RGR = Current Period Revenue - Previous Period Revenue)/ Previous Period Revenue
Cash Burn Rate (CBR) – the rate at which a company has negative monthly cash flow. In Formula terms, CBR = Net Cash Flow in a month/ Cash Balance at the month beginning
Cash Runway (CRW) – the time (months) a startup has before they run out of cash balance. In Formula terms, CRW = Total Cash Balance/ Average monthly burn
Gross Margin (GM) – the difference between revenue and cost of goods sold (COGS). In Formula terms, GM = (Revenue - COGS)/ Revenue