← SaaS Go-to-Market
Day 11 of 14
Metrics That Matter for Early-Stage SaaS
The SaaS Metrics Framework
Five metrics define the health of a SaaS business: MRR (Monthly Recurring Revenue), Churn Rate, CAC (Customer Acquisition Cost), LTV (Lifetime Value), and Activation Rate. Everything else is either derived from these or is a vanity metric.
MRR is your baseline — total active subscription revenue per month. Track it weekly. Know your MRR movements: new MRR (new customers), expansion MRR (upgrades), contraction MRR (downgrades), churned MRR (cancellations), and net new MRR (the sum). If expansion MRR is higher than churned MRR, you have negative net churn — you're growing revenue from your existing base even as some customers leave. This is the holy grail.
LTV/CAC ratio must be above 3:1 for a sustainable SaaS business. If you spend $500 to acquire a customer (CAC) and they're worth $1,200 over their lifetime (LTV), your ratio is 2.4 — you're underwater. Either reduce CAC (better targeting, referral growth) or increase LTV (reduce churn, offer upsells). Understanding this ratio tells you how aggressively you can afford to invest in growth.
Building Your Metrics Dashboard
A metrics dashboard doesn't need to be complex. For an early-stage SaaS, a weekly review of 10 numbers is more valuable than a complex analytics system you don't look at. Use Stripe for revenue data, your App Store Connect for downloads and revenue, and a simple spreadsheet or Notion database to track the key metrics week over week.
For Toggl users: track the time you spend on acquisition activities (sales calls, content creation, outreach) and map it against new MRR. This gives you a personal CAC in time, which is often more useful than dollar CAC at the early stage. If you spend 20 hours acquiring a customer worth $50/month, that's not sustainable — something needs to change in your distribution model.
ChartMogul integrates with Stripe and provides all the SaaS metrics automatically — MRR, churn, LTV, cohort analysis. It's free up to $10k MRR and invaluable for any subscription business. Set it up once, connect Stripe, and it runs automatically.
⚡ Today's Action
Set up ChartMogul or ProfitWell (both free at early stage) and connect your Stripe account. Review your current MRR, monthly churn rate, and average customer lifetime. If these numbers surprise you, that's important information — sit with the discomfort and diagnose the cause.
💡 Pro Tip
Review your key metrics on the same day each week (e.g., every Monday morning). Consistency matters more than the tool. A simple Google Sheet you review every Monday is better than a sophisticated dashboard you check randomly.