Tracking the right startup KPIs is one of the smartest moves you can make as a founder.
Whether you’re pre-seed or Series A, tracking the right numbers is one of the fastest ways to stop guessing and start steering. But it’s easy to get lost in a sea of metrics.
Here are five KPIs that truly move the needle:
1. Monthly Recurring Revenue (MRR)
Monthly Recurring Revenue is the heartbeat of any subscription-based startup. It’s the total predictable revenue you can count on every month — no one-offs, no surprises. MRR helps you benchmark growth over time, understand what’s working, and spot red flags early.
Breaking it down even further, you can track:
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New MRR (from new customers)
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Expansion MRR (from upsells or upgrades)
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Churned MRR (from lost accounts)
This gives you a complete picture of how stable and scalable your revenue really is. The more consistent your MRR, the easier it is to forecast growth and build investor confidence. And if you’re not tracking it yet, now’s the time.
2. Customer Acquisition Cost (CAC)
CAC tells you how much you’re spending — in marketing, sales, or other resources — to acquire a single customer. If you don’t know this number, you’re flying blind. For early-stage startups, CAC can be high (and that’s okay). But what matters is how you bring it down as you scale.
To get your CAC, add up the cost of all your customer acquisition efforts over a period (ads, salaries, tools) and divide it by the number of new customers you gained. Once you have it, compare it to your Customer Lifetime Value (more on that next). If your CAC is creeping up and your LTV isn’t following, you’re spending more than you’re earning — and that’s a red flag.
Tracking CAC by acquisition channel (e.g., paid vs. organic) is also powerful. It tells you where your money works best and where it’s leaking.
3. Customer Lifetime Value (LTV)
LTV is about seeing the long game. It’s the total revenue a single customer will generate over their time with your business. The higher the LTV, the more you can afford to spend on acquiring and retaining customers.
Calculating LTV gets easier as you gather more historical data, but you can still estimate it in the early days using average revenue per user (ARPU) and customer lifespan. LTV matters because it gives your business leverage. It tells you whether you’re building relationships or just chasing transactions.
When LTV significantly outweighs CAC (ideally 3:1 or more), you’re on the path to profitability. But if it’s too low, you’ll need to either improve your retention or increase your pricing — or both.
4. Churn Rate
Churn is the silent killer for many startups. It measures the percentage of customers who leave or stop paying within a given period. Even if you’re adding new users every month, a high churn rate can cancel out growth fast.
There are two types of churn to track: customer churn (number of users lost) and revenue churn (amount of revenue lost). Both matter. If your churn is high, it usually means something is off — poor onboarding, lack of product value, or bad customer support.
Startups should track churn monthly and segment it by customer type, price point, or plan. It’s not about eliminating churn completely — that’s impossible — but about understanding and reducing it over time. Lower churn = higher retention = stronger LTV.
5. Burn Rate and Cash Runway
Burn Rate is how quickly you’re spending cash, and Cash Runway is how many months you can keep going at that burn before you run out of funds. Calculating gross burn (total monthly expenses) and net burn (expenses minus revenue) allows you to forecast runway length precisely.
Early-stage investors typically look for 12–18 months of runway—enough time to hit key milestones before raising the next round.
By keeping these metrics front and center, you can adjust hiring, marketing, or R&D spend in real time, ensuring you never get caught off guard by a funding crunch.
Conclusion
Growing a startup isn’t just about moving fast, it’s about knowing what’s working, what’s not, and where to focus next. That’s why tracking the right KPIs matters.
At Drifter, we work with startups to turn those numbers into real momentum—through paid media, SEO, content, and email strategies that actually drive results.
🚀 Want a second pair of eyes on your growth strategy?
Contact us to see how we can help take your numbers (and your team) to the next level.
